Not Subject to Laws on Arms Sales, Secord Says : He Would Give $7 Million in Account to Contras; Several Congressmen Expect He’ll Be Indicted

Retired Maj. Gen. Richard V. Secord, a key, private middleman in the Iran- contra scandal, told congressional investigating committees Friday that he was not subject to laws governing U.S. diplomacy and military sales--even though investigators produced two White House documents designating him as a government agent.

And privately, several committee members who are former prosecutors said that Secord, who is under investigation by independent counsel Lawrence E. Walsh, is likely to be indicted for conspiracy to violate the laws that he claims did not apply to him.

In his fourth and final day of testimony, Secord offered to donate as much as $7 million remaining in his aborted venture to a fund recently established for the benefit of the Nicaraguan rebels in honor of former CIA Director William J. Casey, who died Wednesday.

Objections to Offer

Some committee members objected to Secord’s offer, however. Sen. Warren B. Rudman (R-N.H.) argued that these funds, generated from the sale of American arms to Iran, legitimately belong to the U.S. Treasury. Rep. Ed Jenkins (D-Ga.) joked that such a donation “would probably be the biggest diversion of all.”

Secord, who was recruited by the White House to sell arms secretly to the contras and to Iran, testified that as a private businessman he was not subject to laws governing the conduct of government officials. These laws include the Arms Export Control Act, the Foreign Assistance Act and the Boland Amendment, which prohibited direct U.S. aid to the contras for most of 1985 and 1986.

“I did not feel that I was an agent of the United States government,” Secord said. “I viewed myself as a commercial operator at all times. The U.S. government did not put any money into this operation.”

When Sen. Sam Nunn (D-Ga.) produced two documents that described Secord’s role as that of an authorized agent for the CIA, the retired Air Force general insisted that he had never seen either of them. The documents were a memo written Aug. 31, 1985, by former White House aide Oliver L. North and a Jan. 17, 1986, memo prepared for President Reagan.

Secord said North never told him of the memo. “I don’t think that he knew I was an agent of CIA and I certainly never was an agent of CIA,” he said.

In addition, committee members noted that Secord’s operation enjoyed many other trappings of a government venture--White House-supplied encryption devices, arms from U.S. stockpiles and the implied sanction of the President. Sen. Paul S. Sarbanes (D-Md.) said that White House support gave Secord “the cloak of legitimacy.”

That led some committee members to suggest that Secord cannot count on being exempt from laws governing government agents. On Thursday, Sen. Howell Heflin (D-Ala.), a former judge, publicly predicted that Secord will be indicted.

‘A Bitter End’

Apparently referring to Heflin’s remarks, Secord told the committee: “It looks like there are some who think there is going to be a bitter end to it. But I’ve done what I’ve done.”

Even under Secord’s claim that he acted entirely as a private citizen, committee members indicated that he may not entirely escape legal entanglements. As a private citizen, he is subject to the tax laws and the Neutrality Act, which prohibits American citizens from waging a private war against a country with which the United States has diplomatic relations.

Secord had testified earlier that he had obtained a legal opinion saying that he was not violating the Neutrality Act. But he confessed under questioning by Rep. Jenkins that he had paid no taxes on the funds that went through his operation.

“It was a covert undertaking and I didn’t think it had tax implications,” he said. “Maybe I was wrong.”

‘Two Conflicting Stories’

In an interview, Sen. David L. Boren (D-Okla.) said Secord has been “telling two conflicting stories” to Congress in an effort to skirt any legal liability.

“He’s going to have to come down on one side or the other,” Boren said. “He either is a government official and thus involved in a conspiracy to violate the Boland Amendment, or he is a private citizen who has converted government property to private use.”

Under questioning by the author of that amendment, Rep. Edward P. Boland (D-Mass.), Secord asserted that the law did not apply to his activities as a private citizen. Boland then read the amendment:

“No funds available to the Central Intelligence Agency, the Department of Defense or another agency or entity of the U.S. government involved in intelligence activities may be obligated or expended for the purpose or which would have the effect of supporting, directly or indirectly, military or paramilitary operations in Nicaragua by any nation, group, organization, movement or individual.”

Secord Concedes Point

Under pressure from Boland, Secord conceded that the White House National Security Council staff, which recruited him to provide military assistance to the contras after enactment of the amendment, is probably an intelligence agency as defined by the law.

Republican members frequently sought to defend Secord from allegations that he had violated the law. His most vehement defender was Rep. William S. Broomfield (R-Mich.).

“I want everyone to know that I’m not a former prosecutor,” he said. “Hell, I’m not even a lawyer but I’ve got some common sense and I’m not one of those who is predicting who should and who shouldn’t be indicted. If there is evidence of criminal wrongdoing by individuals involved in this affair, I would hope that the committee would leave that to the special prosecutor. That’s not our job.”

Sensitive Operations

Rep. Jim Courter (R-N.J.) argued that the United States has a long history of calling on private citizens to perform sensitive operations and encouraged Secord to compare his covert operation to Air America, the CIA-owned airline that delivered goods to U.S. soldiers in Southeast Asia in the 1960s.

“We were in some measure trying to recreate just that on a smaller scale, of course,” replied Secord, who had been an employee of Air America.

Secord’s offer to donate the profits from his enterprise to the Casey fund was consistent with his claim that the remaining money is not the property of the U.S. government. But Rudman insisted that the issue is far from settled.

“I must tell you that in my view you or no one else has a right to send that money anywhere,” Rudman said. “That money belongs to the people of the United States and I will assure you that the Justice Department at the appropriate time will make that claim.”

Criticized by Cohen

When Secord responded that he will do whatever the law requires, including giving the money to the U.S. Treasury, he was criticized by Sen. William S. Cohen (R-Me.) for being inconsistent.

“You’re standing on two stools that are rapidly splitting apart and a horrible hernia at least will result from that,” Cohen said.

Nunn estimated that Secord’s operation charged an average markup of 130% on the arms sold to Iran from U.S. government stockpiles, making them far more expensive than arms sold to other governments.

According to Nunn, investigators have at least four theories about why the government sold arms to Iran: “1--to open a dialogue with Iran; 2--to win release of American hostages in Lebanon; 3--to raise funds for the contras, and 4--to generate private profits for Secord and other middlemen.

Nunn asked: “Of those theories, which one would you subscribe to?”

Secord: “One and two.”

Nunn: “It seems to me the pricing was more compatible with three and four.”

New Details Emerge

Among the new details that emerged from Secord’s fourth day on the witness stand was the disclosure that Iran did not receive up-to-date TOW missiles from U.S. stockpiles in the October, 1986, shipment. New models were shipped from the United States to Israel, but the Israeli government kept the newer weapons and gave the Iranians an older version of the TOWs from its own arsenal.

It was also disclosed that Secord, North and former White House National Security Adviser John M. Poindexter--three of the central figures in the Iran-contra scandal--have met several times since the arms sales were disclosed six months ago.

Sen. George J. Mitchell (D-Me.) declared that one meeting between Secord and North shortly after Atty. Gen. Edwin Meese III disclosed the diversion of Iran arms sales proceeds to the contras last Nov. 25 “may well be central to this inquiry.”

But Thomas C. Green, Secord’s attorney, objected to the questioning, claiming that the meeting was off limits to investigators because of the attorney-client privilege. Green said he was present at the meeting and acted as the attorney for both Secord and North.

Secord said he also met with North about a month ago, “when he and I got together to haul some wood.”

Secord also met briefly earlier this week with Poindexter.

“His attorney called my attorney” to say that “John wanted to drop by and shake my hand,” he recalled. He described Poindexter’s visit as “a very flattering gesture on his part” and described it as “a social occasion.”