Laxalt Defends Iran Arms Sale, Fund Diversion

Republican presidential contender Paul Laxalt Thursday defended the sale of arms to Iran in exchange for freedom for American hostages and defended the diversion of profits to support the Nicaraguan contras.

But Laxalt, a former Nevada senator and close friend of President Reagan, said also that his management style differs substantially from the President’s.

“I select good people and I delegate freely, but I want to know what’s going on in my own shop,” Laxalt said, apparently referring to reports that Reagan was not told of the diversion of the arms sales profits to the U.S.-backed contras.

In defending the sale of arms to Iran in exchange for freedom for the hostages as well as the diversion of profits, Laxalt said: “I see nothing wrong in making an accommodation for a swap.”

Should Have Told Allies

But he added that U.S. allies, knowing only of the “hands-off” publicly stated policy toward Iran at the time, should have been told about the deal.

“We toyed with our credibility by not advising our allies,” he said.

Laxalt said the diversion of profits did not circumvent the ban on U.S. military aid to the contras, saying the legislation applied only to the use of government funds.

“As far as I’m concerned, that was private funds,” he said of the profits.

If the congressional investigation of that diversion of funds proves harmful to the President, Laxalt said, the backlash could “adversely affect those closest” to Reagan--himself and fellow presidential candidate Vice President George Bush.