CIA'S PURCHASE OF SMUGGLED ARMS FROM NORTH AIDES PROBED BY PANELS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000807490007-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: January 18, 2012
• Sequence Number: 7
• Publication Date: March 31, 1987
• Content Type: OPEN SOURCE

STAT
Declassified in Part - Sanitized Copy Approved for Release 2012/01/18: CIA-RDP90-00965R000807490007-0
ARTICLE APPEARED LOS ANGELES TIMES
ON PAC 31 March 1987
CIA's Purchase of Smuggled Arms
From North Aides Probed by Panels
WASHINGTON- Independent
counsel Lawrence E. Walsh and a
Senate committee are investigating
the CIA's purchase last fall of $1.2
million in smuggled weapons from
Lt. Col. Oliver L. North's two top
aides in the Iran-contra affair, U.S.
and European sources said Monday.
Working separately, the two of-
fices are questioning whether the
CIA made the unusual purchase
last September as a financial re-
ward for former Air Force Maj.
Gen. Richard V. Secord and Cali-
fornia businessman Albert A. Ha-
kim, North's key associates in the
secret Iran arms sales.
They are also seeking to learn
whether North or his White House
boss, former National Security Ad-
viser John M. Poindexter, steered
the CIA to the arms deal, the
sources said.
By MICHAEL WINES'rnd WILLIAM C. REMPEL, Times Staff Writers
P
New Evidence Possible
Officials reportedly believe that
the little-noticed weapons sale
could yield new evidence of the
financial and personal ties linking
the CIA, North and his army of
private operatives in the Iran-con-
tra scandal.
Last September, White House
computer records show, Poindexter
ordered North to pressure then-
CIA Director William J. C "to
make things i for ecord,"
apparently by awarding Secord a
contract to sell or transport arms in
return for his supporting role in the
Iran-contra operation.
A month later, a Danish freighter
chartered by Secord and Hakim
unloaded most of a 358-ton cache of
Polish AK-47 rifles and Portuguese
mines and ammunition at the Pen-
tagon's munitions depot in Sunny
Point, N.C. The arms cargo was
reported to the U.S. Customs Ser-
vice as oil drilling equipment, ac-
cording to customs records re-
leased last month.
CIA officials admit privately that
the agency purchased the weapons
but contend that the CIA did
nothing wrong. An internal CIA
inquiry has concluded that the
agency was una'?
buying the 358
ortuguese arms from Secord and
Hakim, one intelligence source
said.
Two other knowledgeable U.S.
government sources call that ex-
planation "implausible," however.
One source said that one-time CIA
purchases of smuggled arms almost
never occur because the agency
uses well-established secret chan-
nels for buying and selling foreign
weapons.
"That sort of thing happens once
in a blue moon. It's highly irregu-
lar," that source said.
Investigators for Walsh and the
Senate select committee on the
Iran-contra scandal went to Den-
mark this month to interview fig-
ures in both the arms deal and
North's purchase of a Danish
freighter, the Erria, that carried
the weapons, European sources
said.
While there, FBI agents inter-
viewed Arne Herup, captain of the
Erria during the time that it was
controlled by North, and officials of
Queen Shipping, a Copenhagen
firm that acted as a front for North
and Secord in the arms deal and the
operation of the freighter.
Herup said in an interview that
FBI agents showed him pictures of
Hakim and Thomas C Clines, a
former seniors official w}to-left
the agency under pressure in 1978
and since has become an interna-
tional arms dealer.
Clines, another North associate,
made several trips to Portugal arms
factories last year at the apparent
behest of North and Secord, sourc-
es have said. He also was present
last April with Hakim during nego-
tiations that led to the purchase of
the Erria, apparently with money
from a Swiss bank account 'con-
trolled by North.
Tom Parlow, a Queen Shipping
executive, confirmed that he had
been interviewed by Senate and
FBI investigators but declined fla-
`her comment. Details of what
either man told the U.S. officials
could not be learned elsewhere.
Their testimony could shed light
-t4nn that it was
dollar weapons deal with Secord
and Hakim even as Casey and
others worked with the two men on
the U.S. sale of arms to Iran.
The agency's internal Inquiry,
portions of which have been re-
leased to other government offi-
cials, contends that two unnamed
middlemen approached the CIA
last summer with offers to sell the
358 tons of weapons but were
rejected because the price was too
high.
The agency said it flnaft struck
a deal last fall to buy the arms at.
discount after lengthy talks with
the second middleman and sold an
unwanted cache of ammunition to a
private dealer who helped arrange
the sale.
U.S. CiwtomarsoadL released in
response to a Freedom at Informa-
tion Act request, show that the ship
involved in the arms trade unload-
ed "8,920 cases [all machine parts
and drilling equipment" at the
Sunny Point munitions depot. last
October.
The same Customs Service re-
cords show that 3 million rands d
7.62-millimeter ammunition, the
size used in AX-47 rifles, were
unloaded from the ship in nearby
Wilmington, N.C., and transferred
to Merest Corp., at a private address
in Savannah, Ga.
No record of a Merex Corp. could
be found. However, the Savannah
address is occupied by several
companies, including Combat Mili-
tary Ordnances Ltd., a firm appar-
ently controlled by retired military
officer James P. Atwood.
Federal sources describe Atwood
as a retired colonel and longtime
Georgia resident involved in "lots
of major arms trades" with interna-
tional buyers. Atwood refused to
return repeated telephone calls
seeking details of the arms deal.
Michael Wines reported from
Waal i gton and WNiiem C. Rempe
from Los Angs
Declassified in Part - Sanitized Copy Approved for Release 2012/01/18: CIA-RDP90-00965R000807490007-0