Big Secord Arms Sale Markups Told : Gouging of Contras Seen as Hakim’s Data Conflicts With General’s Story

Richard V. Secord, a key middleman in the Iran- contra affair, took markups as big as 60%--or three times larger than he has acknowledged--on weapons sales to the Nicaraguan rebels, according to records made public Friday by the congressional investigating committees.

The evidence appeared to contradict Secord’s earlier testimony that he was motivated entirely by patriotism and had no interest in profiting from his role in the contra supply network and the sale of U.S. arms to Iran.

Sen. Paul S. Trible Jr. (R-Va.), a committee member, said it now appears that Secord’s operation was “gouging the contras--the very people that Gen. Secord said he was so fervently hopeful in helping.” He noted that the documents add a new dimension to the Iran-contra story.

“This all smacks of a soap opera,” he said. “It’s a saga of venality and greed and a flare for the dramatic. It’s part James Bond and part Jimmy Durante.”

Bought Sports Car

The documents showed also that Secord, a retired Air Force major general who portrayed himself to the committees as a man of modest means, took about $300,000 from the Iran-contra operation for his investments and personal use--spending part of it to buy a fancy sports car, a private airplane and a visit to a luxury health spa.

“Gen. Secord said he was only advancing national interest,” Trible said. “And yet the evidence shows that he was actively promoting his own self-interest.”

As a result, committee members said that Secord is likely to be recalled for a second appearance before the committee to explain how this evidence squares with his earlier testimony.

The financial records were provided to the committee by Secord’s Iranian-American business partner, Albert A. Hakim, who concluded his testimony Friday. Although Hakim was the Iran-contra operation’s financial manager, he said, it was Secord who decided what the markups would be.

Among other things, the documents showed that Secord and his business partners sold their first air shipment of weapons to the contras in 1984 for $307,200, a markup of $118,900--more than 60%--over the $188,300 that they had paid for the weapons.

A later boat shipment, which did not reach the contras until 1986 although the weapons were purchased in 1985, produced a markup of about 50%, or $606,725, for Secord and his associates. They purchased the arms for $1.2 million and sold them for $1.8 million.

In his testimony four weeks ago, Secord said that he and his partners took markups of only about 20%--unusually low in the arms business--because they believed in the contras’ cause. Hakim said that he had always been under the impression that the markup normally was about 30%.

Hakim testified that Secord agreed to allow a markup of 40% on an arms purchase in 1986 that the partners presumed would be their last transaction with the contras. It occurred shortly before Congress resumed direct U.S. military aid to the contras, precluding the need for a privately financed arms-supply network.

Hakim said that he, Secord and their associate, former CIA agent Thomas Clines, shared a profit of $861,000 from funds in the accounts of their enterprise about the time that they purchased the weapons at a price of $2.1 million in August, 1986. But the weapons, which were never bought by the contras, later were sold to the CIA for about $1.2 million.

Evidence of Secord’s large markups drew criticism from retired Army Maj. Gen. John K. Singlaub, who had been an active fund-raiser and arms supplier for the contras. Singlaub had told the panel two weeks ago that he was cut out of the contra supply business, apparently by Secord, even though he was charging lower prices.

Markup ‘Excessive’

In an interview, Singlaub said that the markup “appears to be excessive,” even though the Hakim-Secord operation needed a certain amount of profit to pay its overhead costs. He further noted that Secord’s profits were derived in part from the contributions of private citizens who thought they were supporting the rebel cause.

The documents indicated that Secord withdrew at least $113,300 for his personal use from a secret Swiss bank account named Korel, into which his share of the profits was deposited by Hakim. Secord had testified that he was unaware of any such account.

In addition, Secord and Hakim withdrew a total of $250,000 from the Iran-contra operation’s capital accounts to finance two business ventures in which they were to share equally--a machine-gun company and a timber business. Neither business ever got off the ground, and Hakim attributed this to Secord’s lack of business acumen.

“Gen. Secord will never make a good businessman,” he said. “He was born a general; he will die a general.”

By Secord’s account, he told Hakim in the summer of 1985 that he no longer wanted to receive profits from the Iran-contra transactions. Nevertheless, all the withdrawals he apparently made from the Korel account occurred after he renounced his claim on the profits.

‘Emotional’ Streak

Hakim, attributing Secord’s renunciation of profits to his “emotional” streak, indicated that he never seriously believed that the general did not intend to make money on the deal. He added that Secord never told him to abolish the Korel account.

Overall, about $8 million remains in a web of foreign bank accounts in the Iran-contra operation. Although the money has been frozen by authorities, it still is under the joint control of Secord and Hakim.

When Secord was asked by the committee what he intended to do with the money, he replied that he would contribute it to a fund for the contras established in the name of the late CIA Director William J. Casey--another statement that Hakim attributed to emotionalism.

Hakim, who unlike Secord admits that he got involved in the operation to make money, noted that there are many people who still have claims on that money--including himself and the U.S. government. He said also that he has an obligation to pay the Iranians with whom he dealt, some of whom have been threatening to harm him if he fails to make good on his promises.

‘Monster Sitting There’

“There is a monster sitting there with a few heads,” he said, referring to the competing claims against the $8 million.

But his answer did not satisfy Sen. David L. Boren (D-Okla.), who charged that Secord and Hakim made a profit of nearly $15 million, after expenses, by selling U.S. weapons to Iran for $30 million and returning only $12 million to the U.S. Treasury.

“When do you plan to give the American taxpayers back their $15 million?” he demanded.

Hakim responded: “As soon as we can figure out what this monster is, we’ll settle up.”

Boren then asked: “Could you at least go ahead and give us back that $8 million? . . . When could you give that back?”

Hakim’s reply did not change.

Boren added that Secord and Hakim must either give the money to the U.S. government or pay taxes on it, which they have not done. “If any other American taxpayers were to get $15 million to do with as they please, they’d have to pay taxes on that money,” he said. “I don’t believe you can have it both ways.”

Irate About Talks

Committee members were also irate to learn about the manner in which Hakim, Secord, then-White House aide Oliver L. North and retired CIA official George Cave had negotiated with high-ranking Iranians last October in Frankfurt, West Germany. When the talks threatened to break down, North left Hakim and Secord to carry on.

The result of those talks was a nine-point agreement, which Rep. Ed Jenkins (D-Ga.) dubbed the “Hakim accords,” that eventually led to the shipment of 500 TOW missiles to Iran and the release of an American being held hostage in Lebanon, David P. Jacobsen.

Handwritten documents obtained by the committee show that Secord made the Iranians at least two promises that were contrary to U.S. policy--that the United States “will fight Russians in Iran in case of invasion, with or without the government of Iran’s assistance” and that U.S. officials would “cooperate to depose” Iraqi President Saddam Hussein.

Hakim was asked by committee counsel Arthur L. Liman: “Did you find it surprising that Gen. Secord, a private citizen, a lieutenant colonel and a retiree--or annuitant, as they call them--of the CIA could, without any congressional approval or anything more that you knew of, make these kinds of representations to the leader of the Iranian delegation?”

Hakim replied that he did not think it was strange because he had been told by North that their mission had the full support of President Reagan. In addition, he indicated that the pledge to depose Hussein was probably a deception.

Appalled by ‘Accords’

Sen. Daniel K. Inouye (D-Hawaii) said he was appalled that the “Hakim accords” proposed also to obtain freedom for one or two American hostages in Lebanon by releasing from Kuwaiti jails 17 Shia Muslim convicts who had admitted bombing the U.S. Embassy and attempting to assassinate embassy personnel in Kuwait in December, 1983. Two years later, members of that terrorist group captured a TWA jet in Beirut and killed two Americans.

“You are telling me that a patriotic American general was willing to swap 17 terrorists, who were guilty of killing American personnel, in return for . . . hostages, who were innocent of any criminal deed?” he asked Hakim.

Hakim replied that the Americans only agreed to try to persuade the Iranians and Kuwaitis to discuss the matter. Inouye expressed skepticism that the American hostages would have been released unless Hakim came through on the Kuwaiti prisoners.

‘Just Unbelievable’

“We find an American general who should know better, an American lieutenant colonel who everyone suggests is second only to the President of the United States, committing this country, its power and its majesty, to defend Iran, without even consultation with the Congress of the United States,” Inouye said. He called that situation “just unbelievable.”

Committee members indicated that they did not believe Hakim’s earlier testimony that he set aside $200,000 for North’s family simply because he “loved” the gung-ho Marine lieutenant colonel. They noted that Hakim did not work closely with North until late 1986, even though the fund was established the preceding May.

“With all of these facts, it just seems to me the logical conclusion that what you were trying to do with Ollie North was to influence,” said Rep. Michael DeWine (R-Ohio). “You were trying to have him beholden to you. You were trying to have him literally in your hip pocket.”