THE CONTRAPRENEURS: SKIRTING CONGRESS AND THE LAW FOR YEARS

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CIA-RDP90-00965R000403040007-7
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RIFPUB
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K
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2
Document Creation Date: 
December 22, 2016
Document Release Date: 
January 26, 2012
Sequence Number: 
7
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Publication Date: 
December 7, 1986
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OPEN SOURCE
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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