Secord Defense Given $500,000, Ex-Trustee Says

A legal defense fund set up for retired Maj. Gen. Richard V. Secord recently received $500,000 in anonymous contributions funneled through the Swiss bank where Secord kept the proceeds from the secret sale of U.S. arms to Iran, a former trustee of the fund testified Tuesday.

Noel C. Koch, who said he resigned Friday because of the mysterious windfall, said he does not know who made the contributions from a numbered Swiss bank account and does not know whether Secord had any connection with that account.

But he told the congressional committees investigating the Iran- contra affair that the money had a “peculiar odor to it.”

The revelation came amid growing evidence that Secord may have profited from the arms sales to Iran or from the secret supply operation he managed for the Nicaraguan rebels at a time when U.S. military aid to the contras was banned.

Although Secord has insisted that he saw no personal gain from the sales, he has refused congressional demands to turn over the remaining proceeds, saying that they belong to “the enterprise” he established with his partner, Albert A. Hakim, for the operation.

Congressional investigators have traced $8 million in unspent profits from the sales. At one time, the proceeds were kept in the Credit Suisse bank, the same Swiss bank used by the anonymous donor who contributed $500,000 to Secord’s defense fund, but most has since been moved to other financial institutions.

Up to Investigators

Sen. Warren B. Rudman (R-N.H.), vice chairman of the Senate investigating committee, said it would be “irresponsible to jump to a conclusion” that profits from the arms sales are now being channeled back to assist Secord, a key target of the inquiry. He said the committees would leave it up to criminal investigators to uncover the source.

Koch said the anonymous contributions came in three installments and began to flow from Credit Suisse to the Richard V. Secord Legal Assistance Fund about six weeks ago. Koch said he asked his friend Secord about the money, but the retired Air Force general professed ignorance.

“I asked him if it came from Albert . . . or from one of Albert’s accounts. He said Albert’s accounts are all frozen” because of the continuing investigation, Koch recalled. “I said, maybe there may be accounts that you’re not aware of. And he said he didn’t know.”

Ex-Pentagon Official

Koch, who resigned last year as the deputy assistant secretary of defense in charge of anti-terrorism policy, is now in private business. He said he established the fund last February with Middleton A. Martin, a Washington attorney who had provided financial advice to Secord. Martin was unavailable for comment.

Throughout his testimony before the congressional committees, Secord insisted that he is a man of modest means and several times lamented his inability to keep abreast of his mounting legal fees.

However, documents produced earlier by the investigating committees indicated that Secord took about $300,000 from the Swiss accounts for his own use in 1985 and 1986--including roughly $30,000 that he spent on a Porsche, more than $50,000 used to purchase a Piper Cub airplane and $2,300 for a visit to a health spa.

‘Special Forces’

In soliciting contributions on Secord’s behalf, Koch said he worked with mailing lists of military units known as “special forces”--troops involved in such missions as hostage rescues and jungle training. Secord had been involved in such operations during his military career. Koch estimated that he mailed out as many as 1,200 form letters, signing each and adding a handwritten note at the bottom.

Despite that personal touch, he said, “We were raising money in modest sums, (until) we reached a point one morning, there was a very considerable sum of money in that legal assistance fund. And over a period of about two weeks, that sum grew.” Specifically, Koch testified, the fund received two anonymous contributions of $200,000 each and a third for $100,000--all provided through Credit Suisse.

Koch said he and Martin used about $94,000 to pay a bill for legal services submitted to the fund. Koch did not name the attorney who sent the bill, but Secord has relied for legal counsel primarily on Washington attorney Thomas C. Green. Green himself has become a controversial figure during the congressional investigation of the Iran-contra affair, with several witnesses suggesting that he may have been involved in efforts to cover up the controversy.

Concern Grows

Koch said his concern about the anonymous contributions grew.

“If it were some benevolent association for the rehabilitation of wayward politicians, and it was anonymous money, you could understand that somebody was trying to be kind and put some money in there,” Koch said. “But for Gen. Secord . . . numbers of that magnitude, from that particular source, from a Swiss bank, had a peculiar odor to it.”

He said his own attorney advised him to seek out “a very, strong prestigious law firm” to oversee the trust and lend respectability to the defense fund effort. But in Washington--where the scandal has provided a great boon in the legal business--that proved hard to do.

Opposed by Secord

“There’s no firm in this town that’s not conflicted by this Iran-contra situation,” Koch said. “If you find one that can take the case, you assume immediately they can’t be much good.” Moreover, he said, Secord opposed the idea of bringing in a law firm.

Finally, Koch said, he decided to follow a friend’s advice to “get out.”

Despite the fact that the anonymous deposits prompted him to abandon the fund, Koch later insisted: “I think this is dumb money; I don’t think it is dirty money.”

He added facetiously that it would have been smarter for Secord’s anonymous benefactor to “have dropped by the house with a brown paper bag and $500,000 in it. It would have been a hell of a lot better than sending it through a Swiss bank without a name attached to it.”

Staff writer Michael Wines contributed to this story.