Former CIA Agent to Face Trial on Iran-Contra Tax Charges

A federal judge refused to dismiss tax charges brought against a former CIA agent, saying that Iran-Contra independent counsel Lawrence E. Walsh has the jurisdiction to try the case, officials said Friday.

As a result, the trial of Thomas G. Clines on the four-count indictment will begin as scheduled on Sept. 4 in Baltimore, said Mary Belcher, spokeswoman for Walsh’s office.

Clines assisted the Nicaraguan Contra arms resupply network run by Richard V. Secord and Albert A. Hakim and overseen by then-White House aide Oliver L. North. He helped find a European arms dealer as a source of weapons, helped arrange for shipping and lined up crews to transport the supplies to the rebels.

Clines, accused of hiding arms sales profits from the government, was indicted Feb. 22 on charges of under-reporting his income to the Internal Revenue Service and failing to report foreign financial accounts to the Treasury Department. If convicted on all counts, he could face a maximum of 21 years in prison and $950,000 in fines.

U.S. District Judge Norman P. Ramsey in Baltimore rejected Clines’ requests to dismiss the charges and to suppress financial records obtained through the use of a U.S.-Swiss treaty.

Clines’ attorney, Paula Junghans, said the tax case was outside the Iran-Contra prosecutor’s jurisdiction because “Mr. Clines has not been charged with committing any crime by virtue of his participation in the purchase, sale or transfer of arms . . . nor has he been charged with any crime relating to . . . support to the Contras.”

But Walsh’s office argued that “crimes involving the attempt to hide arms sale profits” are within Walsh’s purview. The independent counsel said Clines “illegally misrepresented . . . on his tax returns the full amount of his arms sales profits and that he illegally hid from the United States government the existence of the foreign financial accounts.