Secret documents seized from Lt. Col. Oliver L. North's office could expose "people in very difficult situations to torture and death" in the Middle East if publicly disclosed, the prosecutor in the Iran-Contra case said today.
At a hearing on providing classified documents to the defense, independent counsel Lawrence E. Walsh told U.S. District Judge Gerhard A. Gesell that some of the documents contain information so sensitive that a person known to have seen it would be in danger by travel to the Middle East.
"There were documents found in Col. North's safe he shouldn't have had" under government security regulations, Walsh said.
The material included compilations of highly sensitive information that is usually scattered in bits and pieces throughout other documents.
"Why he had them I don't know," Walsh said.
Gesell has ruled that the defense is entitled to see 300,000 pages of classified material collected by Walsh so that lawyers for North and three co-defendants can determine if any of the documents would help their case.
Between 5% and 10% of the material is extremely sensitive, and government security experts are concerned about releasing it for inspection by at least one of North's co-defendants, businessman Albert A. Hakim, Walsh said.
"As advocates we have no interest in this whatever," Walsh said, indicating a rift with the Reagan Administration over disclosure.
But government security experts are concerned about giving full access to Hakim, a security consultant who deals with governments in the Middle East and Asia, he said.
"I don't see why he would like to have in his possession that type of information when he is traveling in the Middle East," Walsh said. "He's put in jeopardy by that kind of information."
The restriction sought by government security officials would also apply, at least temporarily, to retired Air Force Maj. Gen. Richard V. Secord, another defendant charged in the case, according to court papers. Lawyers for Hakim and Secord, however, could see the material.
Walsh said the government has no objection to North and his former boss, one-time national security adviser John M. Poindexter, examining all the documents being placed in a secure facility for defense lawyers to work with the material.
'Doesn't Pose Problem'
"Colonel North doesn't pose the problem because most of these documents he's seen anyhow," Walsh said.
North and his three co-defendants are charged with conspiring to illegally divert profits from the U.S.-Iran arms sales to the Nicaraguan rebels.
Gesell said resolving the issue might involve a month of secret hearings.
According to court papers filed this week by Hakim's lawyers, the sensitive information the government seeks to protect includes documents that would expose hostages in the Middle East to death if released.
Disclosure would also compromise U.S. intelligence gathering, military planning and sensitive foreign policy initiatives, according to a letter Walsh's office sent to the defense earlier this week.
On Wednesday, Gesell accused the Reagan Administration of intentionally withholding secret documents and threatened to dismiss the charges if the material is not made available to the defense.