Hakim Receives Probation, Fine, No Arms Profits

Albert A. Hakim, who arranged arms shipments to Iran as part of a scheme to fund the Nicaraguan Contras, was sentenced Thursday to two years’ probation and a $5,000 fine.

The Iranian-born businessman also agreed to give up his claim to $7.3 million in profits from the arms sales--profits that have been lodged in frozen Swiss bank accounts since 1986. Under an agreement with prosecutors, the U.S. government can now lay claim to the money.

Hakim originally faced five felony charges of conspiracy to illegally divert funds to the Contras and theft of government property. However, under a November plea bargain, Hakim pleaded guilty to a minor charge: a misdemeanor for making an illegal payment to a U.S. government employee. More specifically, he paid for a $13,800 security fence for Lt. Col. Oliver L. North’s suburban Virginia home.

Also as part of the plea bargain, Hakim agreed to cooperate with prosecutors and to give up his claim to the $7.3 million. He will continue to fight, however, for the $1.7 million in interest that has accrued in the Swiss accounts.

After humbly thanking U.S. District Judge Gerhard A. Gesell for a relatively light sentence, the 56-year-old businessman walked outside the federal courthouse, leaned into reporters’ microphones and blasted prosecutors, the press and former President Ronald Reagan.

Hakim described himself as an ordinary businessman who was caught up in a political dispute between the Republican White House and the Democratic Congress. He complained that his business and reputation had been ruined.

“I have been abused by two presidents,” he added, mentioning first Reagan and then “President Walsh,” a reference to independent counsel Lawrence E. Walsh, who supervised the three-year Iran-Contra prosecution.

“I’m not an arms dealer,” he said. Instead, he described himself as an international trader in high-technology products who worked out of Northern California and got involved in the weapons business at the behest of the Reagan White House.

Like Richard V. Secord, the retired Air Force major general who last week also received a two-year probation, Hakim blamed Reagan for allowing operatives in the Iran-Contra scheme to be the “fall guys” for the failed White House effort.

Hakim and his attorneys also criticized Walsh for pursuing the investigation and prosecution of the Iran-Contra defendants, even after the main criminal charges were dropped. “This case never belonged in the criminal justice system,” Hakim’s attorney N. Richard Janis said outside the courthouse.

Hakim was the seventh defendant sentenced for his part in the Iran-Contra scandal. None has been sent to prison. The only remaining defendant, former National Security Adviser John M. Poindexter, is still awaiting trial.

In a brief courtroom session Thursday, Judge Gesell praised Hakim for helping prosecutors, “in sharp contrast” to other defendants in the arms scandal.

“You’re also the only one who at some stage of the matter was not an officer or a former officer of the U.S. government,” Gesell continued. “Indeed, you were brought into the situation you find yourself in by the U.S. government.”

Gesell also lauded Hakim for negotiating the release of American hostage David P. Jacobsen from Lebanon in October, 1986. Just a few weeks before the U.S. arms shipments to Iran were revealed, North, Secord and Hakim met with Iranian officials in Frankfurt, West Germany, and sought the release of American hostages held in Lebanon. Frustrated by the slow pace of the negotiations, North and Secord left, but Hakim stayed on to complete a deal that resulted in Jacobsen’s release by his Shiite Muslim captors in Beirut.

Jacobsen’s release “was the result of your conduct,” Gesell told Hakim, “not the result of others who have taken credit for it.”

Interviewed on Cable News Network, Jacobsen said he felt both joy and sadness at Hakim’s sentencing: “ . . . joy that the judge treated him very leniently. The real sadness that he was ever indicted and brought up on some minor, trivial charges.”

Hakim could have been sentenced to one year in prison and fined up to $100,000. Gesell ordered Hakim, who lives in Los Gatos, to report to a probation officer in nearby San Jose. He may not leave the country without getting permission 48 hours in advance.

Under an agreement announced Thursday by Walsh’s office, the U.S. government can now lay claim to the $7.3 million from Swiss authorities.

The frozen bank deposits have grown with interest to $9 million. Until Thursday, Hakim had contended all of this money was his because it was profit from arms sales he arranged. Since the weapons came from U.S. arsenals, U.S. officials said the profits should be returned to the Treasury. Two of Hakim’s associates--Swiss businessman Willard I. Zucker and Swiss lawyer Philippe Neyroud--also laid claim to a smaller part of the funds.

“We are getting back the money that can be traced to Iranian arms sales,” Mary Belcher, a spokeswoman for Walsh, said of the $7.3 million. “This simplifies things 1000%.”

Hakim, Zucker and Neyroud will continue to fight over the remaining $1.7 million from interest, she said. Since Swiss government authorities ordered the accounts frozen, the agreement must be submitted to Swiss officials before any money can be released, Belcher added.

In papers filed with the court last week, Walsh’s office said Hakim’s cooperation could lead to “further prosecutions,” but officials have refused to discuss new directions in the investigation.

Although Walsh and his staff had nothing but kind words for Hakim Thursday, the businessman and his lawyers were harsh in denouncing the prosecution.

Attorney Janis said Walsh’s operation is “a paradigm of everything that is wrong with the independent counsel statute and the all-powerful, unrestrained prosecutions. After three years and $100 million of taxpayers’ money spent in an unprecedented investigation, we have the U.S. government now claiming that Mr. Hakim is a misdemeanant because he did not stop Gen. Secord from spending $13,000 to build a security fence for Lt. Col. North and his family,” he said.

In response, Walsh’s office said it had spent $18.5 million, not $100 million, since the investigation began three years ago.

BACKGROUND

Albert A. Hakim and his business partner, retired Air Force Maj. Gen. Richard V. Secord, became involved in the Iran-Contra operation in 1984. They helped Oliver L. North set up a private financial network of offshore companies to secretly sell U.S. arms to Iran, and used the profits to provide military assistance to the Nicaraguan Contras. Secord received two years’ probation when he was sentenced last week.