Ex-CIA Official’s Indictment to Be Sought, Sources Say : Spying: Prosecutors are expected to tie Clair George to the cover-up of the Iran-Contra affair. He managed overseas intelligence networks.

Iran-Contra prosecutors plan to ask a grand jury today to issue an indictment against retired CIA official Clair E. George that will accuse him of trying to cover up the CIA’s role in the Iran-Contra scandal, three sources close to the case said Thursday night.

If such an indictment is approved, it likely will say that George concealed his knowledge of the diversion of Iran arms sale profits to the rebels of Nicaragua and hid former White House aide Oliver L. North’s secret Contra aid network from Congress in October, 1986, the sources said.

The three non-government sources, who spoke on condition of anonymity, said they could not say what sections of federal law would be alleged to have been violated.

Mary Belcher, a spokeswoman for the office of independent counsel Lawrence E. Walsh, the chief prosecutor, declined to comment. George’s lawyer, Richard Hibey, could not be reached for comment. Several messages left for him were not immediately acknowledged.

An indictment now of a former CIA official would come at a particularly difficult time for the agency and for the Bush Administration.

Robert M. Gates, President Bush’s nominee to be CIA director, will undergo confirmation hearings starting Sept. 16 before the Senate Intelligence Committee. He is expected to face tough questioning about his role in the Iran-Contra scandal. Gates served as the CIA’s deputy director for intelligence in 1985 and was elevated to the No. 2 slot of deputy director in 1986.

Walsh’s 4 1/2-year criminal investigation began picking up speed this summer when Alan D. Fiers, the ex-chief of the CIA’s Central American Task Force, pleaded guilty to two counts in the scandal and began cooperating with prosecutors.

George’s legal troubles began when Fiers implicated him in the scandal in July.

Walsh has said that he is investigating a “cover-up in the CIA.” Fiers has spent several days in recent weeks with the federal grand jury answering prosecutors’ questions about his former CIA colleagues.

George, as deputy director for CIA operations during the Iran-Contra affair, was in charge of all the agency’s overseas spy networks.

Fiers told prosecutors that George orchestrated a cover-up in which CIA officials hid North’s role in the Contra resupply network from Congress, according to a court document released in July when Fiers pleaded guilty. The alleged cover-up took place after one of the planes in the operation was shot down over Nicaragua on Oct. 5, 1986.

Congress had barred the CIA from assisting the Contras militarily in 1984 and North, a member of the National Security Council staff, secretly stepped in to fill the gap. North later testified that he did so at the direction of the CIA’s then chief, the late William J. Casey.

Fiers said George told him to avoid giving Congress any detail about how a congressionally authorized effort to supply the Contras with medicine and other humanitarian supplies turned into an arms-shipping operation.

George told Fiers that giving Congress any details would “put the spotlight” on the Ronald Reagan Administration and reveal North’s involvement in the operation, said a court document outlining Fiers’ statements to prosecutors.

Fiers also said he told George in late summer of 1986 about the diversion of Iran arms sale money to the Contras, the most politically explosive aspect of the Iran-Contra affair.

Fiers said that George already knew about the diversion when Fiers told him about it.

“Now you (Fiers) are one of a handful of people who know this,” Fiers said George told him.

George testified to Congress in 1987 that he did not learn of the diversion until about the time Atty. Gen. Edwin Meese III disclosed it on Nov. 25, 1986.