THE CONTRAPRENEURS: SKIRTING CONGRESS AND THE LAW FOR YEARS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000403040007-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: January 26, 2012
• Sequence Number: 7
• Publication Date: December 7, 1986
• Content Type: OPEN SOURCE

Declassified and Approved For Release 2012/01/26: CIA-RDP90-00965R000403040007-7
4
L:ASIIINGTnN POST
7 December 1986
The Contrapreneurs:
Skirting Congress
And the Law for Years
Central America and proposed an unusual
interpretation of the law.
North argued that the ban on direct or in-
direct support of the contras by any "agency
or entity of the United States involved in in-
telligence activities" didn't apply t_o mgm-
bers of the National Security Council staff.
The NSC was exempt North is said to have
claimed, because it wasn't an intPIiiegPn -
agency.
71-521 him I wasn't sure that was legal,"
the senior official-recalled Iasi week. But
North apparently ignored the warning and
went ahead with secret un -raising
schemes for the Nicaraguan counterrevo-
lutionaries, or contras.
Money soon eaan flowing to the contras
but nobody in the U.S. government seemed
to know (or want to know) where the mon-
ey was coming from, When Elliot Abrams
became assistant secretary of -tate for
[at-in America in July 1985, for example he
was told _ y a CIA official that the contras
were receiving substantial sums of money
from unknown sources. The CIA official
explained to Abrams that the agency had
trace the money aC to secret bank ac.
counts overseas, but couldn't discover whc
controlled t e accounts. accor mQ o n e
administration official. (A story in The Los
Angeles Imes yesterday alleged tat
fams u sequen y o ain from Nortli the
number o one such secret bank account
an prove to t e u tan o rupee who
ZCT
By David Ignatius
S HORTLY AFTER the House of Rep-
resentatives voted in August 1984 to
cut off U.S. military aid for the con-
tras, Lt. Col. Oliver North approached a
senior member of the interagency group
that had been running the secret war in
looking back at its checkered history, isn't'
that it finally erupted into a full-blown scan-
dal 12 days ago with the revelation that
profits from the sale of weapons to Iran
were diverted via a secret Swiss bank ac-
count to the Nicaraguan rebels. The real
wonder is that Congress, the Reagan ad-
ministration and the public took so long to
become concerned about the questionable
activities and possible violations of law in
contra funding that have been evident for
several years.
Since its ince tion in 1981, the contras
program has consistently skirted the legal
The wonder of the contras program
limits established b Congress. The House
and Senate rote igence committees, w is
never a com o a a wi t o pro am,
have as e a series o re i s urin t o
past five years a eagan administ
pushed by CIA director William Casey and
Lt. Col. North, has consistentl driven
t roug those re lights. The a ministra-
fion pushe the limits of the b u t gress let them get away with i .
"Legality was viewed as an obstacle that
11 had to be gotten around," said one official
who helped supervise the secret war. "That
was the spirit of the program."
A White House official explained last
week that the contra funding arrangement
bypassed even the NSC's own procedures
for covert action. "All of this was handled
off line," the official explained. "There is a
normal process to handle covert operations.
That process wasn't used in this case. It
was all bypassed."
The contras themselves have paid the
price for the overzealousness of North and
his colleagues. In pushing covert action be-
yond the limits that Congress was ready to
accept, the administration repeatedly un-
dermined the fragile consensus of support
for the contras on Capitol Hill. The mining
of Nicaraguan harbors doomed the first
phase of the program, which lasted from
1981 to Aprit 1984. The revelation of the
Iranian connection will probably doom the
second phase, which began in October when
Congress approved $100 million in new
U.S. military aid. The contras, at each
stage, have been left hanging.
"If you look at what's happened, it goes
back to a fundamental disconnect between
Congress and the administration over how
to formulate policy for Central America,"
said Langhorne A. (Tony) Motley, a former
assistant secretary of state for Latin Amer-
ica.
The disconnect began in 1982, when
ongress got nervous a out t e ex
pan ing covert war. he CIA had
sold the contras program to Congress in
1981 as a way to interdict t e ow of weap-
ons from Nicaragua to P ear rP`~p~~ pl
Salvador. But when CIA officers dealt with
the contra leadership they talked of a far
more ambitious goal: overthrowing the San-
mis~ to R me m anagua
"The excuse for the program was inter-
diction of arms," said one intelligence
source who reviewed the program. "But I
can be certain that wasn't the real aim. The
real aim was to overthrow the Sandinistas.
There was no point otherwise."
Congress wasn't ready for an all-out co-
vert war against Nicaragua in 1982. So the
House, at the urging of Rep. Edward Boland
(D-Mass.), the chairman of the House In-
telligence Committee, passed an amend-
ment-at first secretly and then publicly,
Declassified and Approved For Release 2012/01/26: CIA-RDP90-00965R000403040007-7
ON PG; In I.-
 Declassified and Approved For Release 2012/01/26: CIA-RDP90-00965R000403040007-7
on Dec. 8, 1982 prroniioiti c Several officials who were involved in the post at the State Department
actions
actions "for the purpose overthrowing contras program recall "hrainatnrm;.... ee ,that the con-
anvarnmant nf? " Irk_ 1,
overwhelmingly endorsed the amendment,
Avila Lnac LOOK place In mid-1984 to dis- accounts, accor mg to an administration f.
411-0, and it subsequently became law. cuss alternative sources vv~~ financial support 1
The CIA program continued unchanged. for the program. Israel is discussed as a trolled the accounts and nobody demanded
[n Anril 10121 land told the House that - Possible source of money, the sources said. answ ra
he believed the a So was Taiwan. "It was obvious to anyone coming into
the a ie ffthe a who were involved in the (The Israelis did, indeed, contribute to this job that somebody was
re ent
the law. admit now the t nv ina the contras a shipment of weapons the had itary equipment," y said i them
nave hopes of "snowball effect" that u,nrl`I P
? ca tuged in South Lebanon in 1982, worth interview. He said that he was also aware in
topple the Sandinistas and that they scour about $2 million, according to one informed July 1985, when he took office, that the
aged the contras' dream of seizing power. source. But four officials with first-hand contras had developed an air-resupply ca-
But
to stay within the law, the agency came knowledge of the program say they weren't pability. (The contras' air-resupply effort
up with a bizarre e a rationalization: The
aware of other direct Israeli support for the expanded this
program didn t violate the congression 1 contras in the initial aftermath of the Boland knowledge in Octyear and became public
ober when the cargo plane
ban against overthrowing the Sandinistas, amendment.) carrying Eugene Hasenfus crashed in Nic-
t e CIA argue , cause t e re a arm . By all accounts, Oliver North was the aragua. It now appears that this private air
wasp t strong enoug to win, man who worried most about how to keep force was financed, in recent months, by
To support this legal argument, the agen- the contras afloat after the cutoff of U.S. profits from the Iranian arms deal.)
cy could point to studies by an en- funds. As the NSC representative on the in. Abrams added: "When I got here, no one
tagon intelligence analysts and to a report teragency group that managed the pro- said: 'Here's the system.' What everybody
b the CIAs inspector general-all arguing gram, North had travelled often to the con- said to me was: 'We don't know where this
that the contras cou n win. acne one tras' training camps in Central America and is coming from'
Intelligence source last week: "The rebels developed an especially close bond with pened Abrams after won; het took took discuss over as details of assistant what sec hap-
ac didn't have the capacity to overthrow them. One former chief of CIA operations in -
m the inistas. They were weak on olit- Latin America argued last week that North retary of state. Specifically, he won't com-
ical organization within Nicaragua, and they may ave ma e e c assic mists e o a 1 ment on a report yesterday by The Los An-
11 1
ha nothing in the cities." i~ i ove 1 as ages s. geles Times that he urged the State De-
e contras' weakness led the MA to Explained another official who helped di- partment to solicit a contribution of several
rush -things-in ways that disas - rect the program, "Ollie was so committed million dollars to the contras from the Sul-
trous. First, the CIA entered the war di- to the contras' cause it affected his judg- tan of Brunei last summer and that he
rectly, by sending teams of what it called. ment. It led him to advocate things that Passed along to the Sultan the number of a
'unilaterally controlled Latin assets" to were in the short-term interests of the con- secret Swiss bank account that North had
mine Nicaraguan harbors. And to encour- tras, but not in the long-term interests of given to him.
age the contras to o more political work the United States." Such a solicitation would seem to violate
among the Nicaraguan peasantry, the a en- North's first answer to the money prob- at least the spirit of the Boland amendment.
cy prepared a roe om i tors minus " lem was to help develop a network of pri- But a senior State Department official cr-
one section of which advocated the use of , vate contributions. "That Ollie wanted to gued yesterday that a loophole in the
assassination. get involved in private funding, I know," Boland amendment would have
The mining and the assassination manual said one source who discussed contra fund- the State Department to approach ~other
shattered congressional sunnort for the pro- ins with him in 1984. To skirt the congres- governments and solicit humanitarian aid
gram. In May 1984, a month after the rev- sional ban on direct involvement, North ini- for the contras. It isn't clear, however, why
elation that the a been mining __i, tially helped contra leader Adolfo Calero so- such humanitarian aid would be funneled
caraguan harbors, the House rejected a $21 licit contributions from donors in the United through a secret Swiss bank account.
m1 ion sup ementa appropriation for the States and overseas. According to a source Several administration officials said they
contras program. And in August 1984, the who knew the details of this fund-raising op- aren't surprised that the details of the se-
House approved a new Boland amendment eration, North would make the introduc- cret funding operation were so closely held,
that 1 tions for Calero, leaving the contra leader or that they involved such circuitous finan-
1984 from "supporting, directly or indirect- to actually deliver the pitch for funds. cial arrangements. Said one White House
ly, military or paramilitary_Ql~ra,.,,,____. in Rumors and press reports about North's official: "If you're going to funnel funds to
Nicaragua by any nation, group. orianiza- privIlte fund-raising operation began to cir- the contras, you can't use the bureaucra-
tion or individual." The Senate accepted the culate in Washington last year. Robert Par- cies. They are prohibited by Congress from
on mi itarv ai an It e press ent accepted the ry of The Associated Press, for example, getting involved. They all have reporting
it into law, reported North's role in "a secret plan to systems that would generate paper."
- mining also created an awkward le- replace CIA funds with assistance from This official added, in a comment that
gal problem. When Nicaragua protested the Ame
But
rican citizens and U.S, allies." sums up the legal problem that has plagued agan mining to the World Court, the Reagan ad- to dent thatethere werleianaUon continued the contras program from the beginning:
ministration-fearing that it might lose the Robert C. McFarlane, national security irregularities.
cud_ to fund p og ams for which there l seno con-
r sdictionf ad boycotted court's visor at the time, declared in a Sept. 5, gressional authorization."
ycotted proceedings. 1985 letter to Rep. Lee Hamilton, chairman
pursuing the covert war, U.S. and interns- of the House Intelligence Committee: "I can David Ignatius, an associate editor of The
tional law seemed to be expendable. state with deep personal conviction that at Washington Post, is editor of the Outlook
he Boland amendment set the stage no time did I or any member of my staff vi- section.
T for the latest chapter of the contras olate the letter or spirit of the law."
saga. For even as Congress was Some warning signs were already ev-
drafting the new ban on U.S. support, the ident last year, but the administration
architects of the program were discussing ignorerd them. The CIA told Abrams how to get around it. July 1985, when he Look a
Declassified and Approved For Release 2012/01/26: CIA-RDP90-00965R000403040007-7