Panel Rejects Move to Halt North’s Trial : Justice Department May Appeal Secrets Issue to High Court

The Justice Department lost a round in an attempt Thursday to halt former Lt. Col. Oliver L. North’s trial in the Iran-Contra scandal but said that its legal challenge could be carried to the Supreme Court, an action that might delay proceedings against the former White House aide at least for several days.

The government, deeply concerned about sensitive national security information that North’s lawyers may seek to introduce during the trial, wants the judge in the case ordered to impose tighter restrictions over such evidence. But a three-judge panel of the U.S. Court of Appeals here denied the Justice Department request Thursday.

The decision capped a day of legal maneuvering that resulted in the trial’s being delayed just as prosecutors and defense attorneys were preparing to give their opening statements to a newly chosen jury. Those statements were postponed until Monday by U.S. District Judge Gerhard A. Gesell but may have to be delayed further.

Walsh Opposed Appeal

The appellate judges, in a brief order, unanimously sided with independent counsel Lawrence E. Walsh, who opposed the Justice Department’s position on classified information and contended that the department had no legal standing to intervene in the case at the 11th hour.

Walsh said in papers filed with the appellate judges that he--and not Atty. Gen. Dick Thornburgh--is the court-appointed independent prosecutor and that he is satisfied with procedures established by Gesell for handling documents and testimony that bear on national security. Walsh suggested that it is Thornburgh’s duty to withhold certain sensitive information altogether from the trial if he believes state secrets are in jeopardy.

Thornburgh did just that a month ago, with Walsh’s concurrence, in a decision that forced dismissal of the primary charges of conspiracy and theft against North. Thornburgh agreed with government security analysts that documents necessary to try North on those charges are too sensitive to be disclosed at trial.

Thornburgh, as head of the Justice Department, now is contending that Gesell’s guidelines for the use of classified information are so loose that North may force disclosure of top-secret matters during his trial on 12 lesser charges, which allege that North destroyed documents and made false statements to Congress and a presidential board of inquiry.

Wants Explicit Rulings

The department, in its brief, said that Gesell should be forced to make “explicit rulings concerning the relevance and admissibility of each item of classified information that the defense intends to introduce.”

In expressing dissatisfaction with the broad guidelines that Gesell established to govern the use of such data, department lawyers said that they might be powerless to stop North from disclosing secrets.

After the Justice Department had filed its papers Thursday, Gesell proceeded to select a jury of three men and nine women. Then the appellate judges ordered an “administrative stay,” a ruling that halted the trial while they studied the national security dispute.

Jurors Sent Home

Gesell promptly told the jurors to go home and return on Monday, when he hoped the question would be settled.

“What we are going to do is shut down, catch up on our sleep,” he said.

Two hours later, the appellate judges rejected the Justice Department’s arguments and lifted the stay. But the jurors already had gone home.

After the appellate ruling, Edward S. G. Dennis Jr., chief of the Justice Department’s criminal division, told reporters that he and his colleagues are determined to pursue the issue.

He said that the department has the option of asking the three-judge panel to reconsider its decision or of appealing the issue to the full 11-member Court of Appeals for the District of Columbia. The department could also appeal directly to the Supreme Court, he said.

“We are committed to pursuing a stay” in the North trial until the issue can be decided on its merits, Dennis said. He suggested that the department might select an option by today.

Dennis was asked repeatedly if Thornburgh were prepared to withhold additional sensitive material as a last resort, a move that might abort North’s trial altogether. He replied that such a decision was “premature.”

“We have not thought that far ahead,” he said, “but we’re not leaving any options out of consideration.”

Dennis described the present situation as “a crap shoot,” declaring that “we cannot go into this trial knowing we will not have a right to be heard” on the subject of possible sensitive disclosures by North’s lawyers.