Judge Gesell Accepts Hakim Guilty Plea Deal After Calling It ‘Charade’

A federal judge today accepted guilty pleas from Iran-Contra figure Albert Hakim and one of the companies he operated after complaining that the government wasn’t being given an opportunity to recover money diverted in the affair.

Hakim, an Iranian-born businessman whose complex of companies assisted both the Reagan Administration’s arms sales to Iran and the diversion of funds to the Contras, pleaded guilty to a misdemeanor.

He admitted aiding and abetting supplementing the salary of fired White House aide Oliver North by paying for a security fence at North’s home. Hakim faces up to a year in prison and will be sentenced Feb. 1.

One of the corporations he set up, Lake Resources, pleaded guilty to theft of government property, a felony carrying a fine of up to $500,000.

U.S. District Judge Gerhard Gesell initially rejected the proposed plea bargain, calling it a “charade” that wouldn’t require Hakim to make significant admissions or require his corporation to pay money back to the U.S. government.

But after meeting in chambers with prosecutors and defense attorneys, Gesell returned to the courtroom and accepted the plea.

Outside the courtroom, associate independent counsel Stuart Abrams emphasized that the plea agreement does not bar the government from seeking restitution of the $8 million in frozen Swiss bank accounts once controlled by Hakim.

Earlier, Gesell said that in connection with documents filed as part of the plea agreement, it was “not contemplated” that Hakim’s corporation, Lake Resources, “will admit the allegations.”

An angry Gesell objected to parts of the deal, negotiated between special prosecutor Lawrence E. Walsh and lawyers for Hakim and Lake Resources Inc.

“You can’t fancy dance through the paragraphs,” Gesell said, reviewing the proposed plea agreement that he called “an extraordinary document.”

Holding up the plea deal, Gesell said: “It’s simply a public relations agreement that has no place in court.”

Hakim was the business partner of former Air Force Maj. Gen. Richard V. Secord, who pleaded guilty to charges in the Iran-Contra scandal on Nov. 8. Secord has not yet been sentenced and was the fifth person to plead guilty or be convicted in the Iran-Contra affair.

Hakim helped arrange a complex web of shell companies and foreign bank accounts that were behind the Reagan Administration’s secret arms sales to Iran and the diversion of profits to assist the Contras trying to overthrow the Nicaraguan government.

Lake Resources was one of the key corporations through which the secret arms money was distributed. Gesell, noting that Lake Resources claims to have no current assets, derided its attempt to plead guilty.

“The United States is the victim here of the diversion of hundreds of thousands of dollars,” Gesell said. “The corporation got rid of its assets to keep the police from getting it.”

Gesell continued, glaring at a lawyer for Lake Resources:

“What is it but a charade? You have no assets,” the judge said.