CONTRAS MAY HAVE GOT $30 MILLION FROM SAUDI ARABIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000504130013-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: February 9, 2012
• Sequence Number: 13
• Publication Date: January 15, 1987
• Content Type: OPEN SOURCE

Declassified in Part -Sanitized Copy Approved for Release 2012/02/09 :CIA-RDP90-009658000504130013-8 ;TAT
Contras May Dave
Got $30 Million
From Saudi Arabia
By DOYLE McMANUS,
Timis Staf f Writer
WASHINGTON -Congressional
investigators believe that Saudi
Arabia contributed at least i30
million to the Nicaraguan contras
during a ban on U.S. military aid to
the rebels after CIA Director Wil-
liam J. Casey app o e ,
urco~'!es familiaz with the inquiry
said Wednesday.
The Saudi donation, along with
reported contributions from Brunei
and other countries, would increase
the amount of aid collected for the
contras during the ban to at least
S50 million, although officials said
some of that money apparently
never reached the rebels.
"I suspect that, when this is all
through, you are going to find an
awful lot of money was solicited,
both directly and in kind," a source
involved in investigations of the aid
said_ - _ -- _
He said evidence was building of
;'a concerted effort on the part of
~tIle Administration" to solicit mon-
ey for the contras abroad, even
though Administration officials had
told Congress that they were not
soliciting aid.
Congress banned U.S. military
aid to the rebels, who are fighting
to overthrow Nicaragua's leftist
regime, from mid-1984 until last
October. Late last year. Congress
reversed itself and approved $100
million in new funding for the
contras.
The Times has already reported
that Saudi Arabia was the largest
single source of military aid for the
rebels and that some Saudi dona-
tions helped finance a secret weap-
ons airlift operated by associates of
former White House aide Oliver L.
North.
However, the extent of the Saudi
aid was not known until Congress
began investigating the Adminis-
tration's secret arms sales to Iran
and the diversion of profits from
that deal to the contras. Those
inquiries are now expanding into a
general investigation of the ways
the Administration found private
and foreign support for the contras
from 1984 through 1986, members
of Congress' intelligence commit-
teessaid.
LOS ANGELES TIMES
15 January 1987
Members of Congress and Ad-
ministration officials disagree on
whether it was legal to ask other
countries to contribute military aid
to the contras during the ban. A
1985 law prohibited giving U.S. aid
to other countries on the under-
standing that they would pass it on
to the contras. But Congress did not
pass a specific prohibition against
soliciting aid.
In the case of the Saudi contribu-
tion, aknowledgeable source said
that Casey and other senior Ad-
ministration officials had asked the
Arab kingdom to help support the
contras at least as early as 1984.
The Saudi government officially
denies providing any aid to the
rebels. But, soon after Congress cut
off the contras' CIA funding, con-
gressional sources said, the rebels
began to receive aid from Saudi
citizens, who are believed to have
been acting on behalf of the royal
family.
At least some of the money is
believed to have been deposited in
Swiss bank accounts controlled by
retired Air Force Maj. Gen. Richard
V. Second, who helped organize
both the secret airlift of arms to the
contras and the secret shipments of
U.S. weapons to Iran.
A spokesman for the Saudi Em-
bassy, Habib Shaheen, repeated his
government's denials this week.
"Saudi Arabia has provided no aid,
direct or indirect," he said. When
asked whether Saudi citizens had
aided the contras, he said: "I can't
speak for them."
A draft report prepared by the
staff of the Senate Intelligence
Committee last month disclosed
that former National Security Ad-
viser Robert C. McFazlane had told
Secretary of State George P. Shultz
last summer that Saudi Arabia had.
contributed t31 million Eo a contra
group, according to sources who
have read the paper.
The contras received also a i10-
million gift from the sultan of
Brunei, an oil-rich country in
Southeast Asia. In addition, con-
gressional sources believe that t8.5
:pillion was diverted to the contras
from the proceeds of U.S. arms
sales to the Iranians. Several mil-
lion dollars were contributed by
other countries, sources said.
The draft report says President
Reagan, Shultz, Casey and then-
National Security Adviser John M.
Poindexter discussed asking Saudi
Arabia to give non-military aid to
the contras in May. 1986. the
sources said.
Congressional sources said they
believe McFarlane called Shultz to
warn him that Saudi Arabia had
already secretly donated funds and
should not be solicited again,
McFazlane refused to comment
on that account, which was first
reported by "NBC News." Shultz,
who was traveling in Africa this
week, said he did not specifically
know of any Saudi contributions to
the contras.
"I don't want to continent on
that," he told reporters, "I testified
[in Congress) as to my information
about funds to the freedom fighters
in Nicaragua. My knowledge is
limited to one third-country con_
tribution that we solicited legally."
Officials said the one coetribu-
tion 91Sultz was referring to was the
Gift from the sultan of Brunei. The
money from Brunei appears never
to have reached the contras, they
said.
The congressional investigators
have been unable to find any
accounting for the Saudi contribu-
tions either, sources said, but have
not concluded that the money went
astray.
"We don't know where the mon-
ey went because we haven't had
access to any of the bank records,"
one congressional source said.
"There is evidence that a lot of i
assistance did reach the contras.
But we don't know where it came
from, and we don't know where
specific pieces of aid went. There i
was a lot of commingling of funds.
McFazlane and Reagan Admin -
istration officials have repeatedly
said that they did not specifically
solicit military aid for the contras
during the congressional ban on
assistance.
The Senate Intelligence Com-
mittee asked McFarlane last month
whether he still maintained that
officials had not solicited aid, and
he said he did. ~
Administration officials told
Congress during the ban that the
rebels were receiving virtually no
militazy aid.
But Elliott Abrams, assistant
secretazq of state for Latin Ameri-
can affairs, has told the Senate
Intelligence Committee that the
contras received from 32 million to
S3 million a month from private
sources during the two-year
ban-a total of roughly $24 million
to t36 million.
Stall writers Sera Fritz anc~
Karen Tumultp contributed to this
article.
Declassified in Part -Sanitized Copy Approved for Release 2012/02/09 :CIA-RDP90-009658000504130013-8