Ex-CIA Official Relates Plan to Avoid Congressional Ban : Casey Wanted North to Help Contras, Jury Told

A former CIA official testified Monday that William J. Casey, the late CIA director, designated Oliver L. North to assist the Nicaraguan Contras after Congress cut off U.S. government funding for the rebel forces in 1984.

The ex-official, Vincent M. Cannistraro, said he attended a meeting that year at which Casey announced that he had obtained the approval of then-President Ronald Reagan to make North “the reference point” for aiding the Contras when Congress barred the CIA from continuing to play that role.

Cannistraro’s testimony came as North’s attorneys opened their defense of the retired Marine lieutenant colonel and former National Security Council aide who is being tried on 12 felony counts in the Iran-Contra scandal. North’s attorneys are expected to call witnesses for the next few days, after which the two-month-old case will go to the jury.

The testimony of Cannistraro, a former CIA supervisor who was permitted by the judge to avoid giving his exact job title in the agency, bolstered contentions of defense lawyers that North was acting at the direction of his superiors when he helped organize efforts to assist the Contras during a two-year period when Congress prohibited government aid.

The principal charges against North are not that he helped the Contras but that he gave false statements to Congress about his activities and obstructed congressional inquiries into his affairs. But Brendan V. Sullivan Jr., North’s chief defense attorney, has argued that the Reagan Administration’s overall plan envisioned keeping the extent of North’s activities secret from Congress.

North’s lawyers have not disclosed whether he will take the witness stand at his trial.

Cannistraro testified about two meetings called by Casey in early 1984 to outline North’s role in the event Congress cut off funding for the Contras, as it did later that year. He said that Casey, who died in 1987, “wanted to assure the Nicaraguan freedom fighters that the United States would find a way” to support them after the congressional ban took effect.

In the second meeting, attended also by North, Contra leader Adolfo Calero and two other CIA officials, Cannistraro said that Casey reported he had discussed North’s prospective Contra role with Reagan and that “he (Casey) agreed with the President that this is how it should be handled.”

In other testimony by defense witnesses, Stanley Sporkin, the CIA’s former general counsel, told of drafting a “presidential finding” signed by Reagan in early 1986 to authorize covert efforts to free American hostages in Lebanon through the sale of U.S. arms to so-called moderates in the Iranian government. Some money from the sale was later diverted to the Contras.

Sporkin said that the finding included a provision that Reagan could wait some time before notifying Congress of the covert hostage mission, although timely notification of such operations generally is given to members of the House and Senate Intelligence committees.

When asked by Sullivan why such a provision was included, Sporkin, now a federal district judge in Washington, replied: “You want to keep the information as tightly as possible to make sure the operation doesn’t get out.”

Sullivan has contended that North feared his own secret assistance to the Contras would have been jeopardized if he had answered questions honestly from congressional committees about his private fund-raising efforts for the rebels and the military advice he was providing them.

However, U.S. District Judge Gerhard A. Gesell asked Sporkin whether lying to Congress would have been permissible regardless of what Reagan had signed.

“Oh no, sir. Of course not,” Sporkin shot back. “You know better than that!”

On cross-examination, prosecutor John W. Keker also brought out that the presidential finding dealt only with secret efforts aimed at freeing hostages and did not include any matters relating to Contra aid.

Another witness, Ellen Garwood, a wealthy Texas widow, testified that she claimed an income tax deduction of more than $2 million for money she gave to a North associate, Carl (Spitz) Channell, for food, clothing and military equipment for the Contras. But Garwood said she gave her donation in good faith through a nonprofit foundation operated by Channell, and that North never asked for the funds directly or advised her on tax matters.

The last count in North’s indictment accuses him of conspiring with Channell to defraud the United States of income tax revenue.