Gave North $90,000, Contra Leader Says : Part Was to Be Used to Ransom Lebanon Hostages, Calero Testifies

Nicaraguan resistance leader Adolfo Calero told Senate and House committees Wednesday that he gave $90,000 in unsigned traveler’s checks to former White House aide Oliver L. North in 1985--money that congressional investigators say is still largely unaccounted for.

The money was just a fraction of the $33.6 million that Calero received from a variety of sources--primarily King Fahd of Saudi Arabia and private U.S. donors--between 1984 and 1986, when direct military aid from the U.S. government was prohibited by Congress. North had played a major role in raising the funds.

Three wealthy American contributors--Colorado brewer Joseph Coors, Ellen St. John Garwood of Texas and William O’Boyle of New York--will appear before the committee today, along with retired Army Maj. Gen. John K. Singlaub, who testified Wednesday that his attempts to supply Calero with cheap weapons were undermined by higher-priced vendors such as North’s associate, retired Air Force Maj. Gen. Richard V. Secord.

Singlaub said also that his solicitation of contra donations from two countries--Taiwan and South Korea--was curtailed in May, 1986, at the request of Assistant Secretary of State Elliott Abrams, who told him that it was being handled “at the highest levels” of the U.S. government. Taiwan’s $2-million contribution went to Secord, not directly to Calero.

Calero testified that North had requested money in 1985 for two purposes: to finance the work of other contra leaders and to help fund a so-called “private effort” that North was directing to pay ransom for the release of American hostages in Lebanon. He said he responded gladly by giving North about $90,000 in unsigned traveler’s checks drawn on his bank in the Cayman Islands.

“I reacted immediately, saying that Nicaraguan hostages of the Sandinistas (and) American hostages of these groups in Lebanon were one and the same and that I would be happy to help in their liberation,” he said. “I felt deeply for those poor people who had been kidnaped.”

Calero said he is certain that North, who was fired from the White House last November, never made personal use of any of the money, even though much of it has not yet been traced and some apparently was spent by North for personal goods such as groceries.

Check Cashing Detailed

The Times reported Wednesday that the congressional committees have found that North cashed $2,440 of Calero’s checks himself--$340 in food stores, $220 in other retail shops and $1,180 for what appear to be travel-related expenses between April and December, 1985. One $20 check was cashed at a women’s hosiery shop; a $100 check was spent for snow tires.

“When was the last time it snowed in Nicaragua?” Sen. Warren B. Rudman (R-N.H.) asked, noting that the money had been donated to help the contras.

Calero replied: “It does not snow in Nicaragua. However, I am sure there’s an explanation for that . . . . I have full confidence that whatever he did was for the cause.”

North has consistently been portrayed by his associates as a selfless patriot who acted solely out of loyalty to the policies of President Reagan. Although Calero said nothing to alter that image, his testimony is expected to heighten pressure already being exerted on North to testify voluntarily, without demanding immunity from prosecution.

Arthur L. Liman, counsel for the Senate committee investigating the Iran-contra affair, said that investigators so far have been unable to verify how most of the $90,000 was spent, although they recently obtained the canceled traveler’s checks from Calero’s bank.

Although the committee has heard testimony that $50,000 of Calero’s money was spent on the hostage ransom attempt, Liman said that only half of the amount has been traced to that purpose. He said $25,000 of the checks were cashed by Drug Enforcement Administration agents who were recruited to help North in the ransom operation.

$1,000 Wedding Gift

Robert W. Owen, who acted as North’s liaison with the contra leadership, has testified that he cashed about $30,000 of the contra traveler’s checks for North and distributed the money to more than six other contra leaders. Owen said also that North, who kept the checks in his White House office safe, gave him $1,000 of the funds as a wedding gift.

Calero testified that he had not been asked by North to approve the expenditure of $1,000 for Owen’s wedding gift, nor was he told explicitly by North that the remainder of the funds was going to other rebel leaders. But he said: “I sort of imagined it.”

He added: “At one point, we discussed my passing money to other leaders of other factions of the resistance, and we came to the conclusion that it was not politically sound to do that; and, at a later meeting, he told me that I would not have to do it, that another way had been found.”

It was not unusual for Calero to conduct his financial transactions with unsigned traveler’s checks. According to his bank records, at least $3.8 million of the more than $33 million he got from various sources was converted to traveler’s checks and spent for purposes ranging from travel expenses to family support.

Another Karl Malden

“You may do for traveler’s checks what Karl Malden has done for American Express,” Sen. William S. Cohen (R-Me.), a member of the committee, told Calero.

Just as he claimed that he was unconcerned about the $90,000 that he gave to North, Calero, who once taught college-level accounting in Nicaragua, insisted under repeated questioning that he never asked about the source of any of the money he received as a result of North’s efforts.

For example, he said that, until recently, he was unaware that $32 million of the money came from King Fahd of Saudi Arabia. “I had an inkling that it came from a Middle Eastern source,” he said. “Many times, I do not want to be privy to information that I do not need.”

There is no evidence that any of the money that Calero received in his own bank account came from profits diverted from U.S. arms sales to Iran, the issue that sparked these hearings. But Secord, Calero’s chief arms supplier, has testified that $3.5 million of the Iran arms profits was used to establish an airlift that carried weapons to the contras.

$200,000 From Secord

Calero acknowledged that he once received $200,000 from Secord’s Swiss bank account, held in the name of Lake Resources, which was the vehicle by which money was diverted from the Iran arms sales. But the donation to Calero was made in October, 1985, one month before any money from the Iran arms sales was deposited into that account.

In addition to King Fahd, the other major source of Calero’s funds was Intel Co-operation Inc., an account used to funnel money collected by conservative fund-raiser Richard Miller. Calero’s books show that he received $1.8 million from Intel.

Calero paid a total of $670,635 directly to other contra leaders, including $50,000 to Fernando Chamorro and $600,635 to Alfonso Robelo. In addition, he spent $19 million of the money for arms and $14 million for maintenance, equipment and non-lethal supplies.

Preferred Singlaub

Calero had two main weapons suppliers. He purchased $5.3-million worth of arms from Singlaub and $11.8 million from Secord, but he clearly preferred doing business with Singlaub because his arms were cheaper. He complained that Secord demanded payment in advance for weapons, even though Secord’s airlift was funded by donations intended for the contras.

“The committee has been aware for some time that Singlaub offered a better deal,” Cohen said in an interview. “But the fact of the matter was that Gen. Secord became the main point of contact for the contras.”

In 1985, North decided to take control of the contra funds from Calero and put Secord in charge of supplying the contras. Secord has testified that the decision reflected a concern about possible corruption in the contra ranks, but some committee members allege that the switch made it possible for Secord to reap large profits from the operation.

Singlaub’s testimony raises new questions about whether Secord or other suppliers were overcharging the contras for the weapons they provided.

In one instance, he said, one of his arms shipments was met on its arrival in Central America by a Cuban-American named Mario Dellamico, who took control of the arms and “behaved in a way indicating that he had the full authority of that (country’s) government.” Committee sources identified the country as Honduras.

A ‘Kind of Threat’

However, Dellamico later told Singlaub that he was actually working for rival arms dealer Ron Martin and issued what Singlaub interpreted as a “kind of a threat” aimed at forcing Singlaub to buy weapons through Martin.

According to a memorandum to North from Barbara Studley, a Singlaub associate, Dellamico exposed the identity of Singlaub’s supplier to the government of the country where the weapons were produced, believed to be Poland. The memo described the supplier as “very angry” and “afraid this will leak to the press and cause them problems.”

When Singlaub complained to North of his problems with Dellamico, he said, the NSC aide was “noncommittal.”

Singlaub said he had been active in soliciting aid for the contras from foreign governments and had made it clear to Administration officials--including Abrams and North--that he was seeking to provide weapons for the rebels.

He said that Abrams had “concurred in the solicitation” of Taiwan and South Korea in May, 1986. But, when he arrived in Taiwan, he was told by Abrams “to not carry through with this extracurricular activity.” He said Abrams later assured him that the funds would be solicited by “someone at the highest level.”

Denial by Abrams

In response, Abrams, through a spokesman, said that he never endorsed Singlaub’s solicitation.

“That is not Elliott’s recollection of the conversation,” the spokesman said. “The fact of the matter is that Elliott did not make a representation (to the government of Taiwan) . . . . He said any decision to do so would have to be made at a higher level.”

Abrams’ spokesman confirmed testimony that Abrams had encouraged Singlaub to approach dissident contra leader Eden Pastora in March, 1986, to entice him into the rebel coalition. But he said that Abrams, along with other Administration officials, objected to the agreement that Singlaub and Pastora reached because it committed the United States to delivering goods to Pastora.

Singlaub gave a different account. “I had absolute assurances that this was going to go through,” he said. “It was later, after I left the country on another activity, that I was informed that we had reneged.”

Pastora had taken his troops into Nicaragua on the assumption that he would receive the supplies, but, when he went to the agreed-upon rendezvous, “they never arrived,” Singlaub said. “Ultimately, he had to surrender. He walked out, turned himself in to the Costa Rican authorities and was thrown in jail.”

Staff writer Doyle McManus contributed to this story.

CONTRA BALANCE SHEET How Calero spent rebels’ funds:

Sources of Deposits Saudi Arabia $32,000,000 Lake Resources* $200,000 Misc. Deposits $417,000 Intel Co-operation, Inc.** $1,045,000

Disbursements funds Paid to Other $670,635 Contra Factions Arms Purchases $19,178,188 Maintenance, Equipment $13,965,177 and Other Supplies

Balances Deposits: $33,662,000 + Interest $248,000 Total $33,910,000 - Disbursements $33,814,000 Current Balance $96,000

* Lake resources is a Swiss shell company controlled by Albert A. Hakim and Richard V. Secord.

** Intel Co-operation, Inc., is a company controlled by Richard R. Miller, indicted for conspiring to defraud the IRS in raising funds for the Contras. Source: Adolfo Calero