Poindexter’s Bombshells : Reagan Shielded on Diversion, Contradicted on Iran Deal : Admiral Says He Tore Up Signed Document

In a day of riveting testimony, former National Security Adviser John M. Poindexter said today that he never told President Reagan about using Iranian arms sales money for the contras because he wanted to insulate the President from political embarrassment if the plan leaked out.

But, while supporting the President on that point, the former top White House aide contradicted Reagan on a second important issue in the congressional Iran-contra hearings: He said the President initially approved selling weapons to Iran in late 1985 as a straight arms-for-hostages deal.

Reagan has said repeatedly that he never intended such a swap, which would have run counter to his stated policies but that a general effort to forge ties with Iranian moderates deteriorated into arms-for-hostages dealing behind his back.

Reagan, who has also insisted that he did not know of the diversion to the contras, said of Poindexter’s testimony on that subject: “What’s new about that? I’ve been saying it for seven months.”

On the other matter, arms for hostages, Reagan spokesman Marlin Fitzwater said the President can’t recall signing an approval document cited by Poindexter “but he doesn’t disagree with those who say he did.” Poindexter testified that he tore up the paper because it might have caused “a significant political embarrassment.”

Poindexter, testifying under immunity from prosecution based on his words, said Lt. Col. Oliver L. North proposed using the Iranian money for the contras at a time that U.S. humanitarian aid for the Nicaraguan rebels was running out. North was relaying an idea proposed in early 1986 by Israeli official Amiram Nir, Poindexter said.

‘A Neat Idea’

“I thought it was a neat idea too,” he said, echoing North’s own description, “and I felt the President would have enjoyed knowing about it.”

“But because it would be controversial . . . I wanted the President to have some deniability so he would be protected.”

Said Poindexter:

“The buck stops here with me. I made the decision. I thought I had the authority to do it. I thought it was a good idea . . . but I did not want him to be associated with the decision.”

Poindexter was North’s boss and one of those from whom the Marine officer said he sought and received authority for all his actions while on the National Security Council staff.

North testified last week that he submitted five memoranda referring to the fund diversion to Poindexter with the intention that they be shown to Reagan. Poindexter said he does not recall ever seeing four of the papers and testified that he only recalls seeing the other document last fall when the affair was already under investigation.

‘Not So Naive’

Poindexter testified in a slow, calm voice that he told neither the President nor anyone else about the diversion plan until last November when Atty. Gen. Edwin Meese III began an inquiry.

Poindexter, puffing on his pipe, said Reagan’s policy about supporting the contras was well known and “I was convinced I understood the President’s thinking on this and if I had taken it to him, he would approve it.”

But, he said: “I was not so naive to believe it was not a politically volatile issue. . . . I made a very deliberate decision not to ask the President (for permission) so I could insulate him from the decision and provide some future deniability for the President if it ever should leak out.”

Poindexter also said he sought to shield then-CIA Director William J. Casey from difficulty by not referring to the diversion in his presence. The admiral noted that Casey periodically testified before congressional committees, and said he did not want the CIA director to have to be “evasive.” Ironically, Casey, who died in May, knew all along of the diversion, according to North’s testimony.

Committee counsel Arthur Liman asked: “Your decision was not to tell the President so he would be able to deny he knew of it?”

“That’s correct,” the admiral said.

The admiral was asked whether he ever was tempted to tell the President about using Iranian money for the contras.

He recalled that in May, 1986, coming back from the economic summit in Tokyo, he discussed with Reagan the plans for trying to get Congress to approve $100 million in aid for the rebels.

“I don’t want to pull out our support for the contras for any reason,” Poindexter quoted Reagan as saying. “It’s an unacceptable option. Isn’t there something I can do unilaterally?”

Said Pondexter: “I was sorely tempted at that point to tell him what we had working, but I thought better of it and did not.”

Liman characterized that attitude as: “The more controversial the issue, the less the President should be told,” prompting protests from Poindexter’s lawyer.

Undercuts Reagan

On the subject of the arms sales, Poindexter’s testimony on Reagan approval undercut the President’s own statements that the sales never were intended to be ransom for the hostages but were part of a broader effort to reach out to Iranians who might come to power after the Ayatollah Ruhollah Khomeini.

Copies of a presidential finding giving only the hostages’ freedom as a reason for the sales exist, but a signed version apparently does not. Poindexter’s predecessor in the White House job, Robert McFarlane, testified Tuesday that he doubted it was ever signed.

Poindexter, however, said that Reagan did sign it, on Dec. 5, 1985, and that he, Poindexter, destroyed it.

“I tore it up and put it in the burn bag behind my desk,” he said, after Meese told him last Nov. 21 that he was beginning an inquiry into the arms sales.

“At that point, if that paper had leaked out, it would have reinforced the story that all we had in mind . . . was arms for hostages. That was not the case,” he said.

Poindexter testified that Reagan signed a second paper authorizing the sales Jan. 17, 1986--a version that also spoke of the broader attempt to forge an opening with Iran.

Poindexter, in confirming testimony by North that Reagan signed the earlier finding prepared by CIA counsel Stanley Sporkin, stressed it was written primarily as a way to cover past actions--”a CYA (cover your ass) effort.”

At the White House, Fitzwater said Poindexter’s testimony “doesn’t change the facts of the situation at all.” Reagan watched portions of his former aide’s testimony on television, Fitzwater said.

Poindexter’s attorney, Richard Beckler, said at the outset that Poindexter is the target of a criminal grand jury investigation by special prosecutor Lawrence E. Walsh. Beckler tried but failed to persuade the committees to withdraw their subpoena compelling Poindexter’s testimony.

Unlike North, the 50-year-old Poindexter, a Navy rear admiral, wore civilian clothes rather than his military uniform, saying he was doing so because “this issue is not a Navy issue.”

At one point, he described a meeting in the White House residence in Dec. 7, 1985, in which Secretary of State George P. Shultz and Defense Secretary Caspar W. Weinberger advised Reagan against selling arms to Iran.

“The President pulled a footstool up to the coffee table and listened quietly to all the discussions up to that point, as is his manner,” the admiral said.

“At the end of the discussion, he sat back and said something to the effect that--this is not a direct quote--I don’t feel that we can leave any stone unturned in trying to get the hostages back. We clearly have a situation here where there are larger strategic interests, but it’s also an opportunity to get the hostages back. And I think we ought to at least take the next step.”

Shultz and Weinberger “vigorously” objected to the initiative, Poindexter said, but once the President expressed his desires, the two officials backed off.