PENTAGON LINKING SECRET ARMY UNIT TO CONTRA MONEY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000302300001-6
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: October 2, 2012
• Sequence Number: 1
• Publication Date: April 22, 1987
• Content Type: OPEN SOURCE

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Declassified in Part - Sanitized Copy Approved for Release 2012/10/02 : CIA-RDP90-00965R000302300001-6
ARTICLE APPEAT NEW YORK TIMES
ON PAGE 22 April 1987
PENTAGON LINKING
SECRET ARMY UNIT
TO CONTRA MONEY
?7.- By JEFF GERTH
Special to The New York Times
WASHINGTON, April 21? The Pen-
tagon said today that it recently discov-
ered that a secret Army unit disbanded
in 1983 had set up a Swiss bank account
that may later have been used illegally
to finance arms for the Nicaraguan
I rebels.
A senior Pentagon official said an in-
ternal investigation had produced in-
formation suggesting that Lieut. Col.
Oliver L. North, the dismissed National
Security Council, aide, and Maj. Gen.
Richard V. Secord, who retired from
the Air Force in April 1983, were
among those who had access to the un-
authorized Army account.
They are both under investigation on
suspicion of providing military aid to
the rebels, known as contras, when
Congress had made it illegal for United
States Government agencies to do so.
Letting Them Use Account
The Pentagon official said the evi-
dence suggested that Colonel North
and General Secord may have some-
how persuaded some members of the
Army unit to let them use the account
for covert aid purposes after the unit
had disbanded. He did not say who
those people might be.
It is not known if any United States
Government funds were deposited in
the account and later used to aid the
contras, or whether the Army account
was used as a conduit for non-Goverfit '
ment funds.
The Pentagon's chief spokesmaig
Robert Sims, said in a statement read
to reporters this afternoon that the De.
fense Department was looking into the
matter. He did not go into details in his
statement, but the briefing continued
on a background basis with an official
who refused to be identified by name.
$2.5 Million Withdrawn in Day
CBS News reported Monday night
that bank records showed that $2.5 mil-
lion was withdrawn froze the account
In one day in 1985 and that $75,000 of
that was used to charter a freighter
that carried arms to the contras. The.
transaction took place at a time when
United States officials were prohibited
from providing military assistance to
the rebels.
But the CBS report did not indicate
whether the money withdrawn from
the Swiss bank account came from
United States funds or from other de-
posits made to the account.
The secret Army unit, nicknamed
Yellow Fruit, was headed by Lieut. Col.
Dale E. Duncan, who was convicted in
1986 of submitting fraudulent expense
claims in connection with activities ap-
parently unrelated to aid to the con-
tras. He is serving a 10-year sentence
at Fort Leavenworth, Kan.
The Pentagon official who spoke
about the case said the Army, which in-
vestigated the finances of the secret
unit for two years, still could not ac-
count for all .of the unit's money and
does not know whether United States
Government funds went into the ac-
count. He said the Army did not even
know about the existence of the,Swiss
bank account until the CBS NeWS re-
Port.
The Pentagon confirmed the exist-
ence of the account and has referred
the matter to Lawrence E. Walsh, the,
independent counsel investigating the
Iran-contra affair, the official said;
The official also said that top Penta-
gon officials, including Secretary of De-
fense Caspar W. Weinberger, had no
knowledge of the Swiss account and
, that the Pentagon had no records con-
cerning the account, which was at the
Credit Suisse Bank in Geneva.
A Puzzling Aspect
The activities and finances of the
Yellow Fruit unit are not clear, despite
all the investigations. One puzzling
aspect,is that the man who uncovered
the relatively minor expense account
irregularities involving Colonel Dun-
can was a person who had access to the
Swiss account. But he did not tell any
officials about the account until very
recently.
According to the Pentagon official,
the man, Warrant Officer William T.
Golden, retired, has told investigators
that he was one of the people who
signed for the Swiss bank account and
that General Secord and Colonel North
also had access to the account. War-
rant Officer Golden, who was attached
to Yellow Fruit, had first raised ques-
tions about Colonel Duncan's expenses.
Warrant Officer Golden is now an
Army civilian working at Fort Huachu-
ca, near Tuscon, Ariz.
Company Set Up in Virginia
To aid its secret operations, Yellow
Fruit set up a company in 1983 in An-
nandale, Va., called Business Security
International and headed by Colonel ,
Duncan. Yellow Fruit was one of sev-
eral secret Pentagon units involved in
"special operations," including intelli-
gence gathering and support for covert
activities.
Yellow Fruit was disbanded in
December 1983, a year after it was or-
ganized, the official said. The only ac-
tivity in Central America to which it
has been publicly linked was the trans-
portation of a satellite dish to some un-
named country, according to an associ-
ate of Colonel Duncan.
Although Yellow Fruit is defunct, the
Swiss bank account used by Mr. Golden
and other unit members still exists, ac-
cording to the Pentagon official, and
the account was not frozen until recent-
ly. The official declined to discuss the
finances of Yellow Fruit, except to say
that most but not all of the money used
by the unit had been accounted for. He
declined to say whether the money not
accounted for could cover the $2.5 mil-
lion withdrawal cited by CBS News.
In a related Army case in 1985, an
Army judge, Cpl. James E. Noble, said,
"The Army chose this extraordinary
means to circumvent accountability
for money, and it did it for a reason:
specifically, to cut off the ability to find
the money."
At that time, Colonel Noble acquitted
Master Sgt. Ramon Barron on charges
that he had misspent money deriving
from an Army covert operation. Two
other Army officers were court-mar-
tialed in. separate. cases for financial
activities involving Yellow Fruit.
Colonel Duncan is serving a 10-year
sentence at Fort Leavenworth after
conviction in 1986 on various charges in
an Army court-martial.
An associate of Colonel Duncan said
today that the officer had no knowledge
of the Swiss bank account.
Mr. Golden could not be reached for
comment. A former Army warrant
officer attached to Yellow Fruit, Joel
M. Patterson, denied any knowledge of
the Swiss account in an interview with
CBS News, although the network said
Mr. Patterson's name also appeared on
the account.
Mr. Patterson could not be reached
for comment today.
Declassified in Part - Sanitized Copy Approved for Release 2012/10/02 : CIA-RDP90-00965R000302300001-6