Hearings Uncover Wider White House Contra Effort

After just two weeks, the congressional hearings on the Iran- contra affair have already revealed widespread and hitherto secret Administration efforts to raise money for and run weapons to the Nicaraguan rebels during the two years when Congress had prohibited government aid.

Whether the Administration violated the letter of the law--or just exploited its loopholes--has yet to be determined. But as Sen. William S. Cohen (R-Me.) said in an interview: “Clearly, there was intent to circumvent the spirit.

“That will become more evident,” he added, “as we hear from additional witnesses.”

What began as an investigation of the diversion of Iran arms sale profits to the contras has unearthed a massive effort, headquartered in the White House and hidden from Congress’ view, to keep the insurgency alive with contributions solicited from foreign governments and private individuals.

In the wake of the testimony, President Reagan said Friday that he “was very definitely involved in the decisions about support to the freedom fighters--my idea to begin with.” But he also said he had never personally “engaged in soliciting from other countries.”

Questioned on the matter in another interview with magazine correspondents, the President said he did not believe that either he or the National Security Council was affected by legal prohibitions, embodied in the so-called Boland amendment, against using federal funds or resources to provide direct or indirect aid to the Nicaraguan contras in the two years beginning in October, 1984.

“There is nothing in the law that prevents citizens--individuals or groups--from offering aid of whatever kind they wanted to . . . and my interpretation was that it was not restrictive on the national security adviser or the NSC,” Reagan said in an interview conducted Thursday with reporters from National Journal, Time, Newsweek and U.S. News & World Report.

“I believe the NSC is not an intelligence operation; it’s simply advisory to me,” Reagan continued. “And there is nothing that has ever been in the Boland amendment that could keep me from asking other people to help. The only restriction on me was that I couldn’t approve the sending of help or arms out of our budget.”

According to testimony at the hearings thus far, Reagan ordered his aides to help the rebels “hold body and soul together” during the time when Congress had cut off all government assistance, and he also participated in discussions in February, 1985, at which Saudi Arabian King Fahd offered to double his $1-million-a-month contribution to the rebels.

White House spokesman Marlin Fitzwater insisted that Reagan did not solicit funds from King Fahd. But he also claimed that the White House has never believed it was illegal “to solicit money from third countries--for humanitarian (aid) or arms.”

At lower levels in the White House, the involvement was more direct. Testimony Thursday indicated that before he was fired last November, White House aide Lt. Col. Oliver L. North personally doled out cash from his office safe to contra leaders and provided them with maps and intelligence from the Defense Department and the CIA.

North as Quartermaster

In at least one instance, North go-between Robert W. Owen handed an envelope stuffed with cash and traveler’s checks to a contra representative directly in front of the White House, according to Owen’s testimony. Owen described North to the congressional investigating committees as the quartermaster of the Nicaraguan resistance.

And retired Air Force Maj. Gen. Richard V. Secord, the committees’ first witness, testified that North recruited him to operate a private network to supply arms to the contras. Secord said he was introduced to contra leader Adolfo Calero in North’s office in the Old Executive Office Building, next to the White House.

If members of Congress did not already know it, they should now be painfully aware that they are virtually powerless to stop an organized and secret effort by the Administration to circumvent a law that interferes with its own foreign policy goals.

Congress Seeks Answers

During 1985 and 1986, while the congressional ban was in effect, top Administration officials were less than candid even when Congress asked point-blank about their support for the contras. Robert C. McFarlane, Reagan’s national security adviser and North’s boss for nearly all of 1985, admitted in testimony last week that he and other top White House officials withheld “a full account.”

That left members of the Iran-contra investigating committees scratching their heads.

“If the national security adviser to the President of the United States and other high officials do not provide complete and accurate answers to the Congress, what can we do?” asked an exasperated Rep. Lee H. Hamilton (D-Ind.), chairman of the House committee. “How can our system of government work if the Administration is not candid in its answers to the Congress?”

Even Congress’ staunchest supporters of the contras are expressing bitterness and anger over being misled by the White House. But they insist that at least part of the blame lies with Congress, which sought to write a politically balanced bill that could command majority support--and consequently produced an extremely ambiguous law.

Rep. Jim Courter (R-N.J.), a member of the House panel and a strong contra supporter, described the law as a piece of “mush” in which liberals can find a flat ban on aid but conservatives can find some wiggle room. “Basically,” he said in an interview, “it allows Congress to once again have it both ways.”

Although the ban is generally known as the Boland amendment after former House Intelligence Committee Chairman Edward P. Boland (D-Mass.), it was actually a succession of laws of varying degrees of restrictiveness that were in effect from December, 1982, through October, 1986.

The toughest, in effect for the year beginning October, 1984, cut off all government funds to assist the contras. In addition, it banned any agency that was “involved in intelligence activities” from spending its funds “directly or indirectly” in support of the contras’ “military or paramilitary” operations.

Secret Legal Memorandum

With the CIA and Pentagon clearly ruled out of the picture, the President’s National Security Council, where North worked, picked up the job of ensuring the contras’ military survival. The President’s Intelligence Oversight Board in 1985 issued a secret legal memorandum, found in North’s safe, that said the law did not apply to the NSC because, as the President’s advisory body on foreign policy, it was not involved in intelligence activities.

However, congressional leaders of both parties claim that NSC involvement was illegal. And McFarlane, who as the President’s national security adviser was the director of the NSC staff, said he too believed the Boland amendment applied to his staff.

“It was clear to me Mr. Boland didn’t want anybody in the U.S. government assisting the contras,” McFarlane said. “As there were people after the vote saying, ‘Well, the CIA can’t do it, or the Defense Department (can’t) do it . . . but all the rest of you can do it.’ Well, that’s just not reasonable.”

McFarlane testified that he repeatedly told his staff that it was to live well within the Boland amendment. That, he said, meant “we were not to solicit, encourage, coerce or otherwise broker financial contributions to the contras.”

But a former staff member said otherwise. Gaston J. Sigur Jr., who now is an assistant secretary of state, said North encouraged him to solicit what was ultimately $2 million in donations to the contras from Taiwan in 1985 and 1986.

Sigur said North, claiming that the money was for non-military purposes such as food and medicine, repeatedly assured him that the solicitation was proper. But Sen. Warren B. Rudman (R-N.H.) noted that the $2 million found its way into a secret Swiss bank account controlled by Secord, who was running a private network supplying the contras with weapons. Lake Resources, the shell company that held the secret bank account, “has not been known for buying much rice or wheat,” Rudman said.

Sigur said he also arranged for North to approach South Korea and China for help. When North asked these favors, Sigur said, “there was never any doubt in my mind that Col. North spoke for Mr. McFarlane,” who was then his boss.

And the Washington Post reported Thursday that Saudi sources said McFarlane himself asked King Fahd in February, 1985, to increase his contribution to the contras, although McFarlane denied it when confronted by the committee later that day.

Testimony and evidence produced by the committee indicated that North’s role went far beyond asking other countries to contribute humanitarian aid.

For instance, in a March, 1986, computer message to McFarlane--who by then had resigned as national security adviser and was working for the Administration as a private citizen--North noted: “We are trying to find a way to get 10 BLOWPIPE launchers and 20 missiles through the Short Bros. rep. . . . Short Bros., the manufacturer of the BLOWPIPE, is willing to arrange the deal, conduct the training and even send . . . tech. reps. if we can close the arrangement. Dick Secord has already paid 10% down.” The Blowpipe is a shoulder-fired, surface-to-air missile.

Even here, some claim that North may not have violated the law. McFarlane noted that at this time, a second law, separate from the Boland amendment, authorized the government to provide communications, communications equipment and “advice” to the contras--a provision that meant different things even to the chairmen of the House and Senate committees that wrote the law.

But in an April, 1986, message to McFarlane, North showed even more direct involvement: “So far, we have seven a/c (aircraft) working, have delivered over $37 m (million) in supplies and ordnance, but the pot is almost empty.”

Whether North was acting on his own initiative or on orders from higher up has yet to be definitively established. McFarlane testified that North first told him in May, 1986--five months after McFarlane had resigned as national security adviser--that funds from secret sales of U.S. arms to Iran were being diverted to the contras. North assured McFarlane that the transfer of funds had been authorized, although he did not say by whom, McFarlane testified.

Casey Suspected

Under questioning Wednesday, McFarlane said he suspected that the higher authority might have been former CIA Director William J. Casey, a close Reagan confidant who died of complications from brain cancer on May 6. Several congressional investigators said they also believed North took his orders from Casey.

Apart from the basic question of legality, some members of the committee express concerns that by soliciting military and financial support for the contras from other governments, the White House may have been incurring secret obligations.

“I’m not concerned about whether the President stepped over the line,” Cohen said. “Frankly, I have serious questions as to whether Congress can pass any law that would prohibit the President of the United States from asking a third country for help. But the real question is, what are the policy implications that flow from it? . . . We never know what the implications are, what is required in return at some future time.”

Courter, however, countered that the United States should be able to expect its allies to contribute to important causes because it is “the right thing to do. . . . It’s not sinister that the President asked for help in foreign policy at all.” Britain did the same thing, he said, when it asked the United States for intelligence and ammunition for its 1982 war with Argentina over the Falkland Islands.

Bank records show that Saudi King Fahd agreed to begin giving the contras $1 million a month shortly after he met with Reagan in May, 1984. With that decision, he became one of the most important contributors to an insurgency taking place halfway around the world from his country.

The same month, Reagan bypassed Congress through an emergency procedure and secretly sold the Saudis 400 Stinger missiles, which helped them protect their oil fields from a potential Iranian attack.

When the king announced to Reagan the following February that he was doubling his monthly contribution, it came during a meeting at which he was pressing for U.S. approval to buy $3-billion worth of arms. But in the face of strong congressional opposition, the Saudis withdrew their request before the Administration could formally submit it to Congress.

Even so, as Sen. Daniel K. Inouye (D-Hawaii) noted in questioning McFarlane last week, the Saudis rely on the United States for much of their arms, and the United States is the best customer for Saudi oil. “Would you say,” Inouye asked, “that (Saudi Arabia) was literally forced to make this contribution?”

“In no sense,” McFarlane replied. He added later: “Surely we were vulnerable to the possibility that one day, a quid pro quo would be asked, or urged. But, to my knowledge, none occurred.”