Fund for North Family Revealed : Used Iran Sale Profits, Hakim Tells Probers

WASHINGTON — A secret $200,000 fund was created from the profits of the Iran- contra affair to provide for the family of former White House aide Oliver L. North, the operation’s money manager told Senate and House investigating committees on Wednesday.

In addition, Albert A. Hakim, the Iranian-born California businessman who supervised more than $35 million in financial transactions, testified that North stood to gain $2 million under a will that he signed in 1986 with his business partner, retired Air Force Maj. Gen. Richard V. Secord.

Never Told North

North was not told about either of the transactions, Hakim said, although he added that he once assured North that his four children would be taken care of if he died in the service of his country.

Hakim said he told North: “Ollie, you are a part of the family for as long as one of us is alive. You need not to worry about your family.

“I do not recall ever sitting him down and saying that I have set aside $200,000 for your family’s benefit,” Hakim said.

Although Hakim said the $200,000 fund was conceived as a death benefit, he later tried to transfer the funds to North’s family. However, he added: “To the best of my knowledge, no money was sent to North’s family.”

It was the most bizarre twist yet in the story of patriotism and profiteering that has emerged from this congressional inquiry into the private “enterprise” created by North and run by Secord and Hakim to secretly sell U.S. arms to Iran and provide military assistance to the Nicaraguan rebels.

But it was not the first evidence the committee has uncovered that North could have profited personally from the scheme he devised from his White House office. Earlier, it was disclosed that North had personally cashed about $2,400 in traveler’s checks belonging to the contras--spending $100 of it for snow tires and $20 at a hosiery shop.

Hakim was also the first witness to testify that the profits generated by the Iran arms sales were always intended to go to the contras. Others have portrayed the diversion of profits to the contras as an afterthought.

Mystery Witness

Hakim will give more testimony today, following a mysterious witness whom the committees identified only as “Mr. Lewis.” Sources said he is David Lewis, an attorney who had “come out of the woodwork” to offer new details about Hakim’s testimony.

Hakim said that, even though he knew the law prohibits giving valuable gifts to government officials, he decided to set up the $200,000 fund for North because he greatly admired the gutsy Marine lieutenant colonel. “I really love this man,” he said.

The fund was established in a secret Swiss bank account under the unlikely name of “Belly Button” on May 20, 1986, shortly before North flew to Iran with former presidential National Security Adviser Robert C. McFarlane. Hakim indicated that he had been afraid that North might lose his life on the mission and viewed the fund initially as “a death benefit.”

Torn Between Two Loves

“He’s got two loves,” Hakim said, referring to North. “One, his country, and to a point that is, in my mind, the biggest satisfaction that can be given to him if he would enter into an environment that he could get killed for his country. I sensed that so many times. And the other love that he has is for his family. . . . I witnessed him being torn apart between these two loves.”

Hakim said he originally wanted to set aside $500,000 for North, but the less generous Secord rejected that sum as too much. He said Secord did not reject the $200,000 figure, although “he did not come right out and say go ahead.”

Willard I. Zucker, Hakim’s banker, was given the task of finding a way to give the $200,000 to North’s family without violating the law or “compromising” North. He said Zucker was unable to accomplish it, even though North’s wife was summoned to a meeting in Philadelphia to discuss the matter.

Hakim said that, the last time he checked, Zucker was exploring the prospect that a friend, a real estate developer, could employ North’s wife and use the $200,000 to pay her salary.

Likewise, Hakim said he made provisions in the spring of 1986 that, if he and Secord died or became disabled, $2 million that he had set aside in his personal capital account for self-insurance of a plane used in the Iran arms sales would become North’s. If all three men died, their heirs would split the money three ways.

Hakim emphasized that North never saw the document. “To my knowledge,” he said, “he was never aware of it.”

The money involved in the two transactions was part of $9.6 million that Hakim and his business associates have set aside from a web of secret Swiss bank accounts and offshore companies that he established for the Iran-contra operation. Hakim retains control of $6.8 million of it, although he insisted that not all of that sum represented profits.

Hakim disclosed that, prior to April, 1986, he had placed $1.04 million into an account designated for Secord, even though he said Secord renounced any profit from the Iran arms deal in early 1986. He indicated that he thought Secord might some day reconsider his decision against taking the money.

In his earlier testimony, Secord said he had no knowledge of any account with money designated for him. He said he wanted no profit from the deal because he hoped some day to return to government service and felt a profit would hurt his chances.

Likewise, Hakim testified, a total of $990,000 was placed in an account for Thomas Clines, a business associate of Hakim and Secord. And $606,000 went into an account for Stanford Technology Trading Group International, a corporation owned by Hakim and Secord.

The last distribution of profits occurred in August, 1986, after the “enterprise” sold the CIA a shipload of weapons that it had originally purchased for the contras. Under an agreed-on split of 30-30-30-10, Hakim, Secord and Clines received $258,000 each and $86,000 went to Stanford Technology.

Unlike Secord, who disclaimed any profit motive, Hakim admitted that he got into the operation with the combined motives of helping his adopted nation and making money. “I intended to profit from my activities, and I never made any pretense about that fact,” he said.

Also unlike Secord, he admitted that a $500,000 “loan” that his firm took from the Iran-contra accounts was eventually written off as payment “for services rendered.” Secord insisted the money is still owed.

Hakim said he never had any doubt that what he was doing was legal, even though Congress had banned direct or indirect military assistance by the U.S. government to the contras.

“I was told that our contra activities were being undertaken not only with approval by, but at the request of, the President of the United States,” he said. “We were dealing directly with the White House staff. Consequently, it never occurred to me, as a private citizen, independently to investigate the legality of the President’s policy.”

Sen. Daniel K. Inouye (D-Hawaii), chairman of the Senate panel investigating the affair, said North may be the only person who can clear up repeated testimony that those working with North believed they were working for the President.

“Mr. Hakim’s testimony this afternoon makes it very clear, as far as I’m concerned, that Mr. North must appear before the committees and testify,” Inouye said, “because Mr. Hakim has unfortunately placed a cloud over the presidency of the United States.”

Used as Translator

Hakim, 50, added new and often humorous detail to an account offered in earlier testimony by Secord of how Hakim was pressed into service as a translator at a February, 1986, meeting that North and Secord held with Iranian representatives in Frankfurt, West Germany.

After being told by Iranian middleman Manucher Ghorbanifar that Hakim was unacceptable as a translator because he was viewed by the Iranians as “an enemy of the state,” Secord and North tried disguising him.

The disguise worked. The balding Hakim bought a wig, had his hair styled around it and was--as he recalled--”introduced as the special interpreter for the President of the United States, to impress the Iranians.”

In fact, the disguise was so convincing, he said, that after the session a top Iranian official approached Hakim and asked “if I could whisper in the ear of President to go ahead and--whatever money was needed--to supply the arms. . . . He basically was trying to bypass all the people and make a deal with the President.”

The negotiations themselves had been hampered by what Hakim described as “a culture gap” that was worsened by Ghorbanifar’s efforts to twist the translation to his own advantage. He said North kept stressing the “long-term objective” of strengthening U.S. ties with Iran, while the Iranians were “highly, if not only, focused on the purchase of weapons.”

“Before my eyes and my ears, the translation was taken in a direction that would serve Mr. Ghorbanifar best,” he said. “What the American delegation was saying and what the Iranian delegation was saying, they were on different frequencies.”

THE ENTERPRISE: A BALANCE SHEET

Approximate income and outgo of the enterprise operated by Albert A. Hakim and Richard V. Secord, partners in Stanford Technology Trading Group International, for selling arms to the contras and to Iran from August, 1985, to December, 1986.

Receipts Past contra arms sale profits $700,000 Private individuals 1,800,000 Taiwan 2,000,000 Iran arms sales 31,100,000 Total 35,600,000 Disbursements Contra assistance 7,900,000 Arms for Iran 14,400,000 Oliver North projects 900,000 Benefit of partners 600,000 Loss on arms sale to CIA 900,000 General expenses 700,000 Unknown transactions 600,000 Total 26,000,000 Cash on hand Albert A. Hakim 6,800,000 Richard V. Secord 1,000,000 Thomas Clines 1,000,000 Stanford Technology 600,000 Oliver L. North 200,000 Total 9,600,000

Source: Albert A. Hakim