Poindexter Verdict Is Overturned in Iran-Contra Case : Convictions: U.S. appeals court says immunized testimony tainted witnesses at ex-Reagan aide's trial. Also, Elliott Abrams gets probation for his role in affair.

TIMES STAFF WRITER

The conviction of John M. Poindexter on five felony charges in the Iran-Contra scandal was overturned Friday by an appellate court on the same grounds on which it had thrown out the conviction of Oliver L. North, who worked for Poindexter in the Ronald Reagan White House.

In a 2-1 ruling, the U.S. Circuit Court of Appeals for the District of Columbia said that Poindexter was wrongly convicted in April, 1990, because several witnesses--including North, who testified against him--were tainted by their familiarity with Poindexter's immunized testimony before Congress in 1987.

Federal law provides that when a person receives immunity from prosecution for whatever he tells Congress, that person's testimony cannot be used against him even indirectly, the court declared--for example, to refresh the memory of prosecution witnesses at a later trial.

The decision represented another setback for independent counsel Lawrence E. Walsh, whose five-year investigation of the foreign policy scandal has seen reversals of the only two major convictions he obtained based on trials. Poindexter had been the highest-ranking former Reagan aide to be found guilty.

In a related action Friday, a judge in another federal court sentenced former Assistant Secretary of State Elliott Abrams to two years of probation for his confessed role in the scandal. Prosecutors told U.S. District Judge Aubrey E. Robinson that Abrams is cooperating in an ongoing grand jury investigation.

Abrams pleaded guilty last month to two misdemeanors. He admitted concealing from Congress North's involvement with a secret network to supply arms to the Nicaraguan rebel forces, known as Contras. He also admitted withholding information that he sought a $10-million donation for the Contras from the sultan of Brunei.

At the time these efforts took place in the mid-1980s, Congress had forbidden any direct government aid to the Contras. Walsh was appointed to investigate possible criminal actions after disclosures in late 1986 that profits from secret arms sales to Iran had been diverted to support the Contras.

Poindexter was sentenced in June, 1990, to six months in prison, but had been granted a stay pending the outcome of his appeal. All of the charges against him were based on his alleged cover-up of the scandal.

So far, the only unchallenged convictions in Iran-Contra have been guilty pleas from Abrams and three other former government officials, as well as pleas from three private citizens. In addition, a former CIA operative was convicted on income tax charges growing out of profits he received in the operation.

At least one former CIA official, Clair E. George, is yet to be tried.

Walsh told reporters that he will study the appellate court ruling before deciding whether to appeal it to the Supreme Court. Richard W. Beckler, Poindexter's trial lawyer, said he cannot predict if Walsh will attempt to retry the former official.

"That's up to Mr. Walsh," Beckler said. "It would be very difficult for him to get (untainted) witnesses. I think he should drop the case and get it over with."

Senate Minority Leader Bob Dole (R-Kan.), a frequent critic of Walsh, again called for the independent counsel to close up shop.

"Lawrence Walsh's bungling Iran-Contra operation has struck out again," Dole said in a statement. "Unfortunately, the American taxpayers continue to be the real losers, watching their tax dollars going down the drain to maintain Mr. Walsh's exercise in futility."

As in the North decision last year, the appellate court panel split along political lines in favor of reversing Poindexter's convictions. Both Reagan appointees on the three-judge panel, David H. Ginsburg and Daniel Sentelle, voted for reversal. Dissenting was Chief Judge Abner Mikva, a Democratic appointee.

In addition to the principal issue of immunized testimony, the court majority held that two of Poindexter's five felony convictions--for obstruction of Congress--must also be overturned on grounds that the law used by prosecutors is "unconstitutionally vague."

Walsh had based these charges on a federal law that prohibits "corruptly influencing" Congress. But this law "does not at all clearly encompass lying to the Congress," the judges said.

Mikva disputed the majority's interpretation of this statute, saying his colleagues had taken "a very peculiar" view of the law.

"It seems obvious to me that Poindexter 'corruptly' obstructed the congressional investigation when he lied to Congress," Mikva wrote.

Voicing a broader complaint, Mikva said the court majority seemed to be writing tougher standards for a special prosecutor to meet than first enunciated last year in the North decision.

"The decision to prosecute belongs to the prosecutor, and the decision to dismiss belongs to the trial judge, and today this court usurps their authority by denying them the chance to exercise it," he said.

Mikva was referring to the fact that the appellate court, in its North ruling, ordered the case returned to the trial judge for his determination as to whether the case might be salvaged through a witness-by-witness inquiry into tainted testimony. In its decision Friday, the court majority seemed to be saying that the taint of witnesses was beyond repair.

"All of the witnesses at Poindexter's trial had previously been exposed to the defendant's immunized testimony," the court said.

In North's case, U.S. District Judge Gerhard A. Gesell dismissed all charges in September after he had held two hearings required by the appellate court.

Times staff writer Ronald J. Ostrow contributed to this story.

The Iran-Contra Cases

The decision to overturn the conviction of former National Security Adviser John M. Poindexter and the sentencing of former Assistant Secretary of State Elliott Abrams are the latest steps in the five-year-old Iran-Contra scandal. A summary of the major cases: JOHN M. POINDEXTER, a retired rear admiral and Oliver L. North's boss at the National Security Council, was convicted April 7, 1990, of two counts of lying to Congress, two counts of obstructing congressional investigators and one count of conspiring to cover up secret sales of U.S. arms to Iran and the diversion of profits to Nicaragua's Contras. He was sentenced to six months in prison; the Court of Appeals reversed his conviction Friday. The case could go back to the trial judge. ELLIOTT ABRAMS pleaded guilty Oct. 7, 1991, to twice withholding information from Congress during its investigation. He was sentenced Friday to two years' probation and 100 hours community service. CLAIR E. GEORGE, former deputy director of operations at the Central Intelligence Agency, was indicted Sept. 6, 1991, on 10 counts of perjury and obstructing inquiries into the Iran-Contra scandal. He has pleaded not guilty and a trial has not yet been set. OLIVER L. NORTH, a member of President Ronald Reagan's National Security Council staff, was convicted May 4, 1989, of obstructing Congress, destroying government documents and accepting an illegal gratuity. He was sentenced July 5, 1989, to two years' probation, a $150,000 fine and 1,200 hours of community service. All of North's convictions were set aside on appeal in July, 1990. ROBERT C. McFARLANE, Poindexter's predecessor as national security adviser, pleaded guilty March 11, 1988, to four cover-up misdemeanors. He was sentenced March 3, 1989, to two years' probation, $20,000 in fines and 200 hours of community service. RICHARD V. SECORD, a retired Air Force major general and a key figure in North's Iran-Contra gun-running and money-funneling network, pleaded guilty Nov. 8, 1989, to lying to congressional investigators. He was sentenced last Jan. 24, 1990, to two years' probation. ALBERT A. HAKIM, a businessman who managed the finances of North's network, pleaded guilty Nov. 21, 1989, to providing an illegal gratuity by paying for a security fence at North's home, a misdemeanor. He was sentenced to two years' probation and fined $5,000 and agreed to relinquish his claim to $7.3 million from the arms sale. ALAN D. FIERS, former chief of the CIA's Central American task force, pleaded guilty July 9, 1991, to two misdemeanor charges as part of deal in which he agreed to cooperate with the Iran-Contra special prosecutor's continuing criminal investigation.

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