Thornburgh Withholds Data From Iran-Contra Trial : Security: Charges against ex-CIA agent may be dropped. Secrets being protected called ‘fictional.’

Citing national security concerns, Atty. Gen. Dick Thornburgh on Wednesday filed an unprecedented affidavit to withhold sensitive government documents from the trial of a former ranking CIA officer in the Iran-Contra scandal.

The move--which could lead to dismissal of all charges against Joseph F. Fernandez, former CIA station chief in Costa Rica--marked the first use of a power granted to the attorney general under the 1980 Classified Information Procedures Act.

Fernandez helped set up an airstrip to assist former White House aide Oliver L. North in arming the Contras at a time when Congress had banned all military assistance to them. Fernandez is charged on four counts of false statements and obstruction of government inquiries into the Iran-Contra scandal.

U.S. District Judge Claude M. Hilton has taken no action yet in response to Thornburgh’s filing. He scheduled a hearing for Friday at which attorneys for independent counsel Lawrence E. Walsh are expected to offer alternatives to dismissing the Fernandez case.

One source said that Thornburgh hopes Fernandez will be prosecuted and filed the affidavit only to protect national security secrets.

But Walsh charged that the attorney general was trying to protect “fictional secrets.” Justice Department lawyers previously had sought to intervene in the case, but Hilton kept them at bay.

By “fictional secrets,” Walsh referred to the fact that Thornburgh has objected to disclosing the sites of three CIA facilities in Honduras and El Salvador--sites that already are apparent to people following the case.

Officials said that Thornburgh’s affidavit, placed under court seal, seeks also to keep secret the existence of three U.S. programs in Costa Rica at the time that Nicaragua’s Contras were receiving undercover U.S. aid in 1985 and 1986.

Fernandez is accused of lying to a panel appointed by then-President Ronald Reagan and headed by former Texas Sen. John Tower that investigated the scandal in 1987. He is also accused of lying during a separate inquiry by the CIA inspector general.

If convicted on all four counts, Fernandez--the highest-ranking CIA official ever indicted--could face a maximum punishment of 20 years in prison and $1 million in fines.

The issue of classified information arose when Hilton ruled last summer that Fernandez is entitled in his defense to disclose the specific locations of CIA facilities and the existence of U.S. programs in Costa Rica.

Immediately after Thornburgh filed the affidavit, Fernandez’s defense attorney, Thomas Wilson, called on Hilton to dismiss the case, saying that the “sword of Damocles” had been hanging over his client’s head for three years.

Justice Department attorney Ronald Noble, reading a brief statement from Thornburgh, said the documents that Fernandez seeks to use in his defense would cause “serious damage to the national security of the United States” and must be withheld.

Thornburgh’s statement added, however, that he hopes “further judicial examination . . . will establish the potential for accommodating both the defendant’s rights and the national security interests at stake, thereby allowing this case to be tried to conclusion.”

Walsh said that his office “deplore(s) the fact that the attorney general for the first time has filed an affidavit to protect fictional secrets, which could prevent the trial of a former high-ranking CIA official.”

Associate independent counsel Laurence Shtasel told reporters that “we are disappointed that the affidavit is extremely broad” and that it bars disclosure of “information that is generally known to the public.”

An intelligence community source told The Times that Thornburgh was carrying out the wishes of intelligence experts he had consulted.

“We have to protect the host country by giving it credible deniability,” he said. “As long as we don’t officially acknowledge certain stations and programs, there will always be a degree of doubt.”