North’s Weapons Supplier Tied to Terrorist Abu Nidal

Lt. Col. Oliver L. North’s secret arms network supplied Nicaraguan rebels with $1.5 million in weapons bought in 1985 and 1986 from a Syrian smuggler tied to notorious terrorist Abu Nidal, according to records released by the congressional Iran- contra panels.

The weapons, apparently of Polish origin, were purchased from Manzer Kassar, a Damascus drug smuggler and arms merchant. The 42-year-old Kassar and his three brothers have built a multimillion-dollar empire on military deals in Eastern and Western Europe.

Administration officials, speaking on condition that they not be named, said Kassar has “clearly established” business links to the Abu Nidal terrorist ring, responsible for a November, 1985, Egyptair hijacking in which 57 people died and for December, 1985, massacres in the Rome and Vienna airports.

The congressional records point up a particular irony for North, who dramatically invoked a death threat by Abu Nidal in testimony last week to explain his acceptance of a $16,000 security system financed with cash from North’s network. Lebanese terrorists claiming to represent Abu Nidal reportedly placed North’s name on an assassination list last year, apparently because of his work on U.S. counterterrorism policies.

Moreover, the records support North’s testimony that retired Air Force Maj. Gen. Richard V. Secord and his associates sought to turn their secret “enterprise” into a major international operation, one congressional source said.

“It just shows you that what happens is these operations tend to degenerate down to the lowest goddamn levels,” the source said. “These guys who are in international (weapons) businesses don’t set moral standards. That’s the first thing you have to learn.”

Congressional sources familiar with the records said it is uncertain whether North knew the contra arms were purchased from an associate of Abu Nidal. North testified last week that operational details of his network were handled by private associates such as Secord.

The dealings with Kassar, a major arms merchant, are among $47 million in transactions that flowed through the web of dummy companies set up to manage North’s Iran-contra activities in the three years before the secret operation was shut down last November.

An accounting ledger of the deals was turned over to the congressional investigative panels last spring by Albert A. Hakim, Secord’s business partner and the fiscal manager of North’s network. It was made public this week.

The records cover the accounts of nine dummy corporations used in the Iran-contra operations from December, 1984, through November, 1987.

$25 Million in Profits

Of the $47.7 million that flowed into the enterprise’s bank accounts, $25 million apparently came from profits from the Iran arms sales. The documents indicate that the rest came from an array of sources, including contra leader Adolfo Calero, who apparently used Saudi Arabian cash donations to buy weapons from the network, Israel, South Korea and the Central Intelligence Agency.

Where the money went is not as easy to trace. Although Calero placed $11.3 million in the accounts in the first seven months alone, the records show that only $9.8 million was actually spent during the entire three-year period to purchase arms for the contras. An additional $2.1 million was used to buy weapons that were intended for the contras but were later sold to the CIA at a loss in one of the North enterprise’s final deals.

An additional $3.25 million was paid to Southern Air Transport, the Miami-based charter airline used extensively in the Iran arms deals and as a front in North’s contra supply operation. And about $707,000 was spent to purchase and operate a Danish coastal freighter, the Erria, which North has testified was used in a variety of ill-starred covert operations at the direction of himself and former CIA Director William J. Casey.

Much of the cash, however, appears to have been transferred out of the enterprise’s operating accounts and into the private accounts of Hakim, Secord, their partner and ex-CIA official Thomas Clines, and others linked to the scandal.

Gave Selves Commission

On a single day in August, 1986, for example, the three men and a Hakim-Secord company, Stanford Technology Trading Group International, credited themselves with an $861,000 commission for the sale of arms to the CIA. The actual sale would not take place for another month.

On three other occasions, Hakim made special payments totaling $768,000 into a sub-account called Defex, the name of a Portuguese weapons-trading firm. Congressional investigators say, however, that the Defex account was actually a disguised repository for commissions for Secord.

The two Kassar weapons deals, on Aug. 30, 1985, and June 20, 1986, apparently cover purchases of East Bloc arms from the Polish government weapons company CENZIN, in which Kassar acted as a broker. Administration officials say Kassar maintains offices in Damascus and in Warsaw and is a major dealer for the Polish firm.

The first arms purchase from Kassar, totaling $1 million, was sent by boat to an unidentified Caribbean port in the fall of 1985, where it was unloaded and later distributed to contra fighters.

Sales to CIA

The Long Island newspaper Newsday, which reported allegations of Kassar’s dealing with the network in April, said the second shipment of Polish arms was eventually sold to the CIA as part of the money-losing arms transaction.

Congressional sources disputed that account, saying the CIA shipment can be accounted for elsewhere. But records show Kassar was paid $500,000 only 20 days before the Erria docked in Poland to pick up a 158-ton load of AK-47 rifles and ammunition. That boatload of arms eventually was sent to a secret CIA warehouse in the southwestern United States, sources say.

Staff writers Karen Tumulty and Doyle McManus contributed to this story.