North Tied to Church Funds in Nicaragua

Lt. Col. Oliver L. North was part of a group that may have covertly funneled hundreds of thousands of dollars to the Roman Catholic Church in Nicaragua after congressional committees blocked a similar CIA program in 1985, Newsweek magazine reported Sunday.

The church, headed by Cardinal Miguel Obando y Bravo, who is archbishop of Managua and opposes Nicaragua’s Sandinista regime, “may have received hundreds of thousands of dollars in covert aid from the United States,” an article in the magazine’s June 15 issue says.

The aid came from the CIA until 1985, when congressional oversight committees blocked such assistance out of concern that the church would be compromised if the payments came to light, the magazine said. Funding came thereafter, it said, through the clandestine White House operation headed by North, a key figure in the Iran- contra affair who was fired as a National Security Council official after the scandal broke.

Danger for Recipients

Although the legality of the operation is still undetermined, public disclosure of CIA aid to any group in Nicaragua could give the Sandinista regime an opening through which to deride the recipients as pawns of the United States, thus discrediting them with all but the most conservative element in the country and providing a new motive for the government to crack down on its internal critics.

Citing “sources in the U.S. intelligence community and the Nicaraguan opposition,” Newsweek said North used an account at BAC International, a Cayman Islands bank, and unidentified banks in New York and Miami to funnel “at least $125,000” to the church. It said the money reached Nicaragua in a variety of ways, including archdiocesan accounts, contra couriers and church lay workers traveling outside the country.

A possible link with this funding was turned up by the General Accounting Office, the magazine said, in the form of a signature card bearing Obando’s name for an account at BAC International. It was not learned whether the signature had been verified, the article said.

Many Give to Church

The Catholic church in Nicaragua has received contributions from many anti-Communist groups around the world, Newsweek said, and there was no evidence that Obando knew the source of the particular contributions attributed to covert U.S. sources.

The magazine said that in an interview last week Obando called the report that his church was helped by the CIA “a tremendous slander” and denied receiving any funds from North or Richard R. Miller, a private fund-raiser who was associated with North’s operation and is believed to have handled the financial transactions.

Newsweek said Federico Arguello, a conservative priest close to Obando, had confirmed that he had received $31,000 through a New York bank and said the money was used “to help the church and the poor.” It said he declined to say who arranged the payments. The magazine said other sums paid for the training of seminarians and financed a “Eucharistic Congress” in Nicaragua designed to draw attention to the friction between the church and the Sandinistas.

Further uses for the money were suggested in an internal memorandum circulated in 1984 among officials of W. R. Grace & Co., which, according to Newsweek, said Obando was seeking private aid for “leadership” courses and “religious instruction” to “thwart the Marxist-Leninist policies of the Sandinistas.” W. Peter Grace, the company’s chairman, is not only a strong supporter of President Reagan, but also an active Catholic layman.