Broader Charges Seen in Iran-Contra Probe : Experts Say Hearings Are Laying Groundwork for Walsh to Seek Wider Conspiracy Indictments

Criminal defense attorneys and veteran prosecutors, who as recently as last month believed that only limited legal charges would emerge from the Iran- contra scandal, have raised their expectations dramatically after the first week of congressional hearings on the affair.

These specialists now see independent counsel Lawrence E. Walsh pursuing a broad array of legal lines of attack against those inside the government and out who sold arms to Iran and channeled profits to the Nicaraguan rebels. And they expect a substantial number of prosecutions to result from Walsh’s efforts.

Among the likely charges, according to legal experts, are conspiracies to obstruct justice, defraud the government and violate Congress’ ban on government aid to the contras and, possibly, the Neutrality Act.

“You can get a conspiracy to do all sorts of things,” said James Bierbower, who represented Jeb Stuart Magruder, a central figure in the Watergate cover-up. “In this case, from the posture of the interrogation, they’ll throw in the kitchen sink.”

Tells of Vast Network

Retired Air Force Maj. Gen. Richard V. Secord, who broke his silence and testified for four days without immunity after associates provided investigators with crucial information, described his elaborate network to sell arms to Iran and the contras. As the hearings ended for the week, Secord was considered a prime target of Walsh’s investigation.

Sen. Howell Heflin (D-Ala.), a member of the Senate select committee whose experience as chief justice of his state’s supreme court rates him as a legal authority among many colleagues, predicted that Secord will be indicted.

Heflin said that possible criminal charges included defrauding the government, obstruction of justice and conspiring to evade the legal ban on military aid to the contras.

Secord’s revelations, coupled with glimpses of what other witnesses have told congressional investigators, bolster prospects that Walsh will move against other participants besides Lt. Col. Oliver L. North, the fired National Security Council aide, who was at the center of Iran-contra dealings.

To be sure, based on evidence unearthed so far, some legal authorities have reservations about how successful Walsh may be in winning convictions of those who are indicted.

“Conspiracy to defraud the government out of what?” asked Lawrence E. Barcella, a highly regarded former prosecutor turned defense attorney. “If the government was repaid the amount drawn down out of the Treasury--that is, the bottom line cost of the weapons--then the fact that some middlemen upped the prices to the Iranians should have no bearing.”

Barcella was referring to what appeared to be a major line of defense in Secord’s testimony: That the U.S. government recovered the cost of arms shipped to Iran and thus was defrauded out of nothing.

“If only the ayatollah was defrauded, prosecutors would be crazy to take the case to an American jury,” a veteran defense attorney said.

But this was the reasoning rejected by Justice Department lawyers when the case was referred to an independent counsel. They concluded that the arms transactions were a U.S.-Iran deal, and that the middlemen, including Israel and arms merchants involved, were entitled to nothing more than “reasonable fees.”

‘That Inflames a Jury’

“If the prosecution can get anything on the money, they will certainly include it,” Bierbower said. “That inflames a jury--charges like war profiteering.”

In any such charge, it would be essential for prosecutors to contend that the money belonged to the U.S. government, Bierbower added. “From Secord’s testimony, I’m sure his defense would be that unaccounted-for funds never belonged to the government.”

An attorney for another figure in the case said that conflicts between Secord’s testimony and testimony of some of his associates in efforts to supply the contras could add up to serious legal problems for some of them--depending on which version prosecutors accept as truthful.

In one such conflict, Secord attempted to disown a memo on various options to dispose of an airplane and related equipment used in the program. He said that the memo represented the ideas of Robert C. Dutton, a former Air Force colonel he had recruited to manage the Central American operation.

Contrary Testimony

But Senate committee chief counsel Arthur L. Liman then read a section of Dutton’s testimony, given to Senate investigators, which described the proposals as Secord’s ideas.

An attorney for another witness said that he expected prosecutors to consider charges of obstruction of a congressional investigation over a false chronology that was prepared for former CIA Director William J. Casey’s Senate testimony last November.

While television sets in much of official Washington were tuned in to the first week of hearings, they were dark in the office of Walsh and his 23 lawyers. That was to prevent the lawyers and investigators from hearing any of the testimony cited from witnesses who have been given limited immunity.

If Walsh seeks to indict any of those given immunity by the congressional committees, he must meet what the Supreme Court has called “the heavy burden” of proving that all of the evidence came from independent sources--not the immunized witnesses’ testimony before Congress or from leads to evidence from that testimony.

To meet the burden, Walsh has taken some unusual steps. Before a witness’s congressional immunity becomes effective, Walsh’s lawyers place the evidence and leads they have gathered on the individual in a sealed envelope and present it to Chief U.S. District Judge Aubrey Robinson. Then, until the witness actually testifies, additional evidence is delivered to Robinson each week in sealed envelopes.

Some Lawyers ‘Exposed’

Walsh also has designated a small number of his 23 attorneys as “exposed,” meaning they will become familiar with immunized testimony. They’re needed for liaison with other government agencies and congressional committees. And they will monitor the hearings for possible perjury.

An FBI agent assigned to Walsh’s office did tape and watch the hearings in seclusion, and transcripts of Secord’s testimony are given to Walsh’s “unexposed” lawyers, after the transcripts are sanitized to remove any reference to immunized testimony.

As Walsh noted in a recent interim report, not a single immunized Watergate witness was successfully tried and convicted after the grant of immunity.

John M. Bray, for instance, the lawyer for Watergate defendant Gordon C. Strachan, won dismissal of Strachan’s indictment by demonstrating that Watergate prosecutors had been exposed to his immunized Senate Watergate testimony on television or had read the transcripts.

Bray described Walsh’s practice of sealing off his lawyers from the televised testimony as “a sensible technique.”