CONTRA LEADERS DENY RECEIVING FUNDS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000605210010-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: May 2, 2012
• Sequence Number: 10
• Publication Date: November 26, 1986
• Content Type: OPEN SOURCE

Declassified and Approved For Release 2012/05/02 : CIA-RDP90-00965R000605210010-0
ARTICLE A
ON PAG1E
WASHINGTON POST
26 November 1986
Contra Leaders Deny Receiving Funds
No Swiss Accounts, Says Cruz; Link Suggested to Money for Rebel Air-Drop Operation
C, By Jtilii Preston` '}
W.NuuMioii-Pa+i fnreigv Service
MIAMI, Nov. 25-Top leaders
of the U.S.-backed Nicaraguan reb-
els denied today that they had re-
ceived the $10 million or more in
funds from arms sales to Iran de-
scribed in Washington by Attorney
General Edwin Meese III.
"We have not been party to any
such transactions," said Adolfo
Calero, the head of the largest rebel
force, addressing a press confer-
ence several hours after the appear-
ances by Meese and President Rea-
gan. "I am denying that we have
received or used this money that's
being talked about."
The leaders did not, however,
rule out the possibility that the reb-
els, known as contras, could have
benefitted from aid handled entirely
by persons outside their organiza-
tion and without their knowledge.
They denied having held or used
any Swiss bank accounts to receive
funds.
"We have not been party to any
such transactions," said Arturo
Cruz, a member along with Calero
of a triumvirate that heads the main
contra alliance, the United Ni-
caraguan Opposition (UNO).
Calero said the contras have of-
ten received anonymous donations,
in cash and equipment from sup-
porters he believed were private.
But he said the donations did not
amount to more than $1 million in
1986. He said the bulk of the assist-
ance the contras received this year
came from $27 million State De-
partment humanitarian aid.
"I don't know anything about the
Iranian thing," Calero said. "We
weren't mixed up in it."
However, in response to a ques-
tion about a secret air resupply op-
eration run this year from El Sal-
vador for the contras. Calero said,
"That was a secret operation, and I
don't know all the secrets."
A diplomatic source in San Jose,
Costa Rica, said revelation of the
Iranian funding arrangement may
have provided an answer to ques-
tions about financing of that oper-
ation, which was disclosed last
month when a C123K cargo plane
was shot down during a weapons
drop over Nicaragua.
A survivor of the flight, Eugene
Hasenfus of Marinette, Wis., said
he assumed the program was or-
ganized under the aegis of the Cen-
tral Intelligence Agency, because
most of those involved were former
CIA employes. The Reagan admin-
istration, however, declared it had
no connection with the supply
flights and refused to reveal how
they were financed.
Calero, when asked whether the
contras had ever received any funds
from Israel, responded. "Not that I
know of."
"We have no idea how we have
become involved in this," said
Calero, who returned this morning
from Honduras. He was to have
attended a meeting in San Jose of
UNO but was refused a visa by the
Costa Rican government.
Revelation of the clandestine
funding arrangement put the insur-
gency under a cloud of doubts and
dismay, Washington Post corre-
spondent Edward Cody reported
from San Jose. The news from
Washington swiftly eclipsed political
discussions at the UNO meeting
and focused attention instead on
prospects for further support in
Congress for the four-year-old
guerrilla war.
Calero, the principal fund-raiser
for the contras, did say of the sums
in question, "With a money transfer,
you don't necessarily know who
makes it." He acknowledged know-
ing retired major general Richard
V. Secord, who has been named as a
possible link between the arms
funds and the contras, but said Se-
cord "had no role in my operation
whatsoever."
Calero spoke warmly of Marine
Lt. Col. Oliver North, the National
Security Council staff member who
was fired today, calling him "a good
American, a patriot, a very efficient
man." But Calero denied that North
had been "running our war" or was
the contras' main contact in Wash-
ington.
Cruz said he does not have a reg-
istered signature in any foreign
bank on behalf of the United Ni-
caraguan Opposition. Of the time
when the funds supposedly were
made available, he said: "Our situ-
ation then was one of extreme pov-
erty. Nothing came in of any size
that I can remember."
Cody, reporting from the UNO
meeting in San Jose, added:
An envoy observing the session
said of the impact of the funds rev-
elations, "This is another factor that
reduces people's faith and credibil-
ity in the administration and the
program. "It certainly makes for a
very shadowy future for the pro-
gram next year."
The discovery of a back-door fund-
ing operation came just as the rebel
movement was entering what its
leaders and U.S. backers hoped
would be a decisive escalation of
fighting in Nicaragua because of
$100 million in recently renewed
open U.S. aid. The two days of dis-
cussions here, by the UNO were de-
signed to elaborate a political plat-
form that would increase the move-
ment's legitimacy as the war grew.
The sense of momentum
stemmed mainly from the $100 mil-
lion voted openly by Congress. The
new aid, rebel officials had said, was
ending two years during which Con-
gress barred U.S. government
funding for the guerrillas' military
activities and approved only $27
million for what was described as
nonlethal assistance.
The cutoff was widely cited as
the main reason the guerrillas, es-
timated to number about 10,000,
have been unable to maintain a sig-
nificant presence inside Nicaragua.
Alfonso Robelo. the third UNO
director. said two months ago that
the rebel forces, often called con-
tras, were suffering severely in
their Honduran bases from short-
age of military supplies because the
new U.S. aid had yet to arrive.
Calero complained two weeks ago
in Washington that the Reagan ad-
ministration was being too slow in
getting the new aid to the camps.
Announcement now that between
$10 million and $30 million had
gone to rebel accounts from the
Iranian arms purchases, therefore,
raised a number of questions about
how the money was spent and who
handled it.
Professions of ignorance similar
to Calero's in Miami came from
leaders of the rebel movement who
were gathered here for the UNO
assembly.
"I don't know anything about it,"
said Indalecio Rodriguez. a director
of the main U.S.-funded guerrilla
group, the Nicaraguan Democratic
Front. I have no comment on this. It
would only be a lie."
Enrique Sanchez and Edmundo
Tefel, two prominent civilian back-
ers of the Honduras-based forces of
the front, also said they knew noth-
ing of the Iranian funding arrange-
ment. Leonardo Somarriba, who
heads the UNO office in Washing-
ton, declared, "To my knowledge,
there have been no deposits in UNO
accounts from these funds."
But Donald Lacayo, the Demo-
cratic Front's representative in
Costa Rica, said rebel leaders often
spend money without knowing
where it comes from. "There are
different resources, for political ac-
tivities. for military activities," he
said. "We don't necessarily have to
know the sources."
Administration officials previously
had acknowledged encouraging what
they described as private fund-rais-
ing of the kind often referred to by
Calero. Reports in Washington de-
scribed North, the National Security
Council official, as a coordinator for
these fund-raising efforts.
Sandinista officials in Nicaragua
frequently dismissed these ac-
counts. They maintained money for
the rebels was coming from the CIA
or some other U.S. government
agency through subterfuges that
clouded the source. No Sandinista
had suggested, however, that U.S.
arms sales to Iran were providing
the money.
[In Managua, President Daniel
Ortega told visiting European leg-
islators the action was "totally ille-
gal." Reagan "knew what was hap-
pening, so he is deceiving the ...
Congress and is violating American
and international laws," The Asso-
ciated Press quoted him as saying.]
Declassified and Approved For Release 2012/05/02 : CIA-RDP90-00965R000605210010-0