Real Winners in Iran Scheme Are Lawyers

According to congressional testimony, Nicaragua’s rebels received $3.5 million from Iran arms sale profits. Before everything is over, the dozens of lawyers now involved in sorting out what happened may get many times that much.

With defense attorneys charging $250 an hour and up, lawyers involved in the case say that even relatively minor witnesses already owe fees approaching $200,000. Major figures, such as former National Security Advisers Robert C. McFarlane and John M. Poindexter, already have run up bills in the $750,000 range.

Lt. Col. Oliver L. North, whose lawyers have gone to court twice so far to try to block the independent counsel’s investigation, probably now owes more than $1 million, lawyers close to the case say.

“Our clients are deemed innocent until proven broke,” one lawyer in the case said.

And that is just the defense side. Meanwhile, independent counsel Lawrence E. Walsh, who has already obtained criminal convictions of two persons involved in the affair and who is expected to prosecute other figures as well, has assembled a staff of 24 lawyers, earning roughly $70,000 each.

Altogether, Walsh’s operation had spent $782,000 through the end of April and is now spending at the rate of $400,000 a month, according to spokesman Dennis Feldman. And that does not count the salaries of the 50 FBI, Internal Revenue Service and Customs Service agents serving on Walsh’s staff.

The government is footing Walsh’s bill. And it may also have to pay the attorneys of some of the potential Iran- contra defendants who cannot cope with their enormous expenses.

Not Charging McFarlane

In at least one case, that of McFarlane, lawyer Leonard Garment says he is not planning to ask his client to pay him. However, at least two laws might allow McFarlane and other Iran-contra figures to get government reimbursement for their legal bills, and the White House has already taken steps to assist some of them in that effort.

The cost of top-flight lawyers has rocketed upward since the Watergate scandal of the early 1970s, when the major defendants faced bills in the $300,000 range.

It is a subject few lawyers are willing to discuss openly. “It’s a bit like asking us about our underwear,” said Stuart F. Pierson, lawyer for Iranian arms dealer Manucher Ghorbanifar.

“I charge $250 an hour,” said a lawyer for another Iran-contra figure. He said that rate is “about in the middle of the pack.” If he ever got in trouble, he added, “I couldn’t afford myself.”

Lawyers Monitor Testimony

The public sees the lawyers as they sit by their clients during their testimony before congressional investigating committees. For each hour of testimony, however, many more are spent reviewing documents, going over possible questions and answers, negotiating with congressional staff members, bargaining with Walsh’s prosecutors, preparing legal arguments and monitoring what other witnesses have said.

Often two or three--in North’s case four or five--lawyers may be working on a single potential defendant’s case. In some of the capital’s poshest office buildings, senior attorneys have been spending full days watching the televised congressional hearings, their meters ticking away at $200 to $300 an hour.

And, if a case goes to trial, the cost balloons. “There is no way, if your client gets indicted, that you’re not going to put 4 or 5 million (dollars) into a case like this,” said one defense lawyer.

Legal fees can be “financially ruinous,” Pierson said. “If you don’t have six- or, in some cases, seven-figure resources available, you just can’t afford it.”

Seeks to Block Walsh

Pierson’s client, Ghorbanifar, may be able to. He has gone to court in Switzerland seeking to block Walsh’s access to records of bank accounts there.

Retired Air Force Maj. Gen. Richard V. Secord and his partner, Iranian-American businessman Albert A. Hakim, also have tried to block Walsh’s access to Swiss accounts.

A former Watergate defense lawyer recently was asked if he had a client in the Iran-contra proceedings. “No,” he replied with a grin, “but I wish I had. Our firm likes to represent people who the press claims have funds stashed in secret foreign bank accounts.”

For those not wealthy enough to pay their own bills--and perhaps even for those who are--the pocket of choice is the taxpayer.

Law Provides for Payment

A long-standing federal law calls on the government to pay the legal bills of current and former government officials if acts related to their official duties are investigated by Congress or if they are witnesses--but not targets--in criminal proceedings.

For such officials, the law requires that the agencies that employed them inform the Justice Department that it approves of the reimbursement. Deputy White House counsel Jay B. Stephens has formally asked that at least some National Security Council officials’ legal fees be paid, sources close to the case confirmed.

It is not known which NSC officials were covered by Stephens’ request, but three of the most deeply involved figures in the Iran-contra affair--McFarlane, Poindexter and North--all worked there.

So far, the Justice Department has taken no action. James M. Spears, deputy assistant attorney general in the Justice Department’s civil division, noted that the government’s policy is to provide legal assistance to a federal official only when it is “in the interests of the United States.” But reimbursement for private lawyers, he said, is “exceptionally rare.”

Reimbursement of ‘Subjects’

A second law allowing access to the Treasury is a provision added in 1982 to the statute that governs independent counsels. That provision allows reimbursement of at least part of the legal fees of any “subject of an investigation” who is not indicted. “Subject” is a broad and undefined term, say lawyers familiar with the provision.

The law has been used only once, by Atty. Gen. Edwin Meese III, whose finances were investigated in 1984 by independent counsel Jacob A. Stein. Meese’s lawyers, led by Garment, the former White House counsel under President Richard M. Nixon who now represents McFarlane, submitted a bill for $720,824 at rates up to $250 an hour. They eventually collected $472,190.

Neither legal provision appears to hold out much hope for Iran-contra figures who are indicted. At least two who face that possibility, Poindexter and North, have legal defense funds.

“I won’t tell you how much has been raised, because that way Dick Beckler would know how much is in the treasury,” retired Rear Adm. Clarence A. Hill, the head of Poindexter’s defense fund, said in a recent interview. Richard W. Beckler is Poindexter’s lawyer.

“But I’ll say this: The response has been such that we can support John Poindexter regardless of what his legal bills amount to,” Hill added. “We know who is interested, and we can go back to the same people if the costs are higher than anticipated.”

Indictment Expected

Hill said he expects Poindexter to be indicted because “there are so many ways they can get you under the laws.”

In raising funds, Hill and the two other retired naval officers who run the fund, Adm. James L. Holloway III, former chief of naval operations, and Vice Adm. Gerald E. Miller, former commander of the 6th Fleet, have relied mostly on retired admirals and members of military groups.

“We sent out a fund-raising letter basically to people we thought had a vested interest in supporting John Poindexter,” Hill said. He added that several thousand persons from all 50 states have contributed.

“Ollie North is fairly flashy and enjoys the support of the right wing,” Hill said. By contrast, “John Poindexter is a rather reserved professional who saw his role as a confidential adviser to the President and kept a low profile.”

However, North has received relatively little money, according to Mark C. Treanor, a Maryland lawyer who attended the U.S. Naval Academy and served in the Marines with North and is now one of the two trustees of the Oliver North Legal Assistance Fund.

$90,000 in Fund

“We’ve received between $90,000 and $100,000,” Treanor said, “nowhere near what would be needed to take this thing down the road.”

Treanor said his group, unlike Poindexter’s, “hasn’t solicited any funds. It’s just been a place where people could send money.”

Rumors have widely circulated that North has been offered large sums to write a book. But, Treanor said, “he’s a pretty private guy. I’m not sure it’s the kind of thing that would appeal to him.”

Treanor added that North may have to work out “a long-term payoff” plan with his lawyers. “It’s got to be a devastating kind of thing,” he said.

As for the prosecution side, the Justice Department wants Congress to appropriate $9 million to cover the costs of all five current investigations by independent counsels from now through September, 1988. Walsh’s office would receive the lion’s share.

$60,000 Monthly Rent

In addition to salaries, Walsh’s tab includes office equipment, telephones and roughly $60,000 a month in rent in one of Washington’s newest downtown office buildings.

The salaries of the 35 FBI agents, 11 IRS examiners and four Customs officers working for Walsh are being paid by their home agencies. An FBI spokesman estimated that the cost to that agency is roughly $140,000 a month.