North Says He Used Contra Money to Reimburse Self : Calls False Letters to Hide Secord Gift ‘Grossest’ Act

Oliver L. North today admitted spending traveler’s checks from the Iran- contra operation on personal expenses but said he was only paying himself back after using his own money for the operation and insisted, “I never took a penny that didn’t belong to me.”

He also said “the grossest misjudgment” of his life was to create phony letters to conceal that he hadn’t paid for a $16,000 home security system.

As he did Tuesday, North appeared before the congressional Iran-contra committee in his Marine uniform, complete with six rows of ribbons. He wore silver-framed glasses to aid in reading documents that House counsel John W. Nields Jr. often called to his attention.

Asked about the $20 traveler’s checks that he cashed in the Washington area for lingerie and snow tires, North said those were reimbursement for money he had spent from his own paycheck on contra activities.

“Every single one of those traveler’s checks which have my name were used to defray an actual operating expense paid by me,” he said heatedly. “I never took a single penny that didn’t belong to me.”

‘A Little Hanky-Panky’

He angrily denounced those who “snickered” in earlier testimony or suggested he was having an extramarital affair with his secretary, Fawn Hall.

“I want to make it very clear,” North said, “that when you (the committee) put up things like Parklane Hosiery and you all snicker at it and you know that I’ve got a beautiful secretary, and the good Lord gave her the gift of beauty, and that people snicker that Ollie North might have been doing a little hanky-panky with his secretary. . . .

“Ollie North has been loyal to his wife since the day he married her. And the fact is, I went to my best friend (his wife, Betsy) and I asked her, ‘Did I ever go to Parklane Hosiery?’ And you know what she told me? ‘Of course you did, you old buffoon. You went there to buy leotards for our two little girls.’ ”

He said he kept meticulous records of the transactions but destroyed the account book to protect people named in it from retribution by enemies.

North defended acceptance of the $16,000 home security system, saying his family had to have it because of death threats from Abu Nidal, the world’s best-known terrorist.

No Protection Offered

“This lieutenant colonel was not offered at that time any protection by the government of the United States,” North said. He said he was told all that could be done for him was a transfer to Camp Lejeune, N.C.

“I’ll be glad to meet Abu Nidal on equal terms anywhere in the world, OK, as an even deal for him,” North said. “But I am not willing to have my wife and my four children meet Abu Nidal or his organization on his terms,” North told a hushed committee room.

“That was the first time in my life that I accepted something that I hadn’t paid for,” the Marine officer said. Other testimony has shown the security system was paid for by his main Iran-contra operative, retired Maj. Gen. Richard V. Secord.

He said it was “the grossest misjudgment” of his life to create two phony letters to conceal that he hadn’t paid for the system. The backdated documents were intended to make it look as though North had requested bills for the security system at the time it was installed early last year.

North also heatedly denied that he had known about a $200,000 “death benefit” set up for his family in a Swiss account known as “Button” or that he profited from the complex arms sales schemes.

Wife Met With Lawyer

But he said he did have his wife meet with a lawyer at the suggestion of a Secord associate who had promised to help North’s family if any harm came to him. Nothing came of that meeting, North said.

“Nobody ever told me that a single penny was set aside for my purposes, for my benefit, whatsoever,” said North. “I never heard of buttons or bellybuttons until these hearings began.”

In a riveting moment during his second day in the witness chair, North said that at the insistence of former CIA Director William J. Casey, he took along “the means to take my own life” when he made a secret trip to Iran last year.

“I did not tell my wife and children that,” the 43-year-old former combat officer testified before a national television audience. “And they may be hearing it today for the first time.”

North also told the committees that it was a “neat idea” to divert proceeds from Iranians arms sales--what he called “the ayatollah’s money”--to Nicaraguan rebels and stoutly defended the sale of arms in exchange for freedom for three American hostages in the Middle East.

Not ‘in Wildest Dreams’

When House committee counsel Nields insisted that that was U.S. government money, forbidden by law to be used on behalf of the rebels, North said he would have made sure that the arms sales proceeds were deposited with the U.S. Treasury if he had received orders to that effect.

“I never in my wildest dreams” imagined the possibility of facing criminal charges, said North, who is a principal target of independent counsel Lawrence E. Walsh’s investigation into the affair.

The idea for using profits from the arms sale to Iran for helping the “Nicaraguan freedom fighters,” North said, came from Manucher Ghorbanifar, the middleman in the dealings with Iran, during a conversation they had overseas.

“I thought it was a right good idea,” North testified. “I came back and advocated it. And we did it.” That set off this exchange:

Nields: “Even Ghorbanifar knew that you were supporting the contras?”

North: “Yes he did. Izvestia knew it. My name had been in the papers in Moscow, had been all over Danny Ortega’s newscasts, Radio Havana was broadcasting it, it had been in every newspaper in the land.”

Nields: “All our enemies knew it, and you wanted to conceal it from the United States Congress?”

North: “We wanted to be able to deny a covert operation.”

In the afternoon session, North described his role as point man in organizing support for the contras during a congressional ban on U.S. aid.

He said it was Casey who suggested that he develop a system of communications that was safe from Soviet eavesdropping, and thus he procured several top-secret encryption devices maintained by the super-secret National Security Agency.

North said he helped arrange for arms for the contras, and sought assistance from Ambassador to Costa Rica Lewis B. Tambs for instruction on a resupply airstrip in that country.