'WHAT DID THEY KNOW; WHEN DID THEY KNOW IT?'

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00587R000100240001-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: February 24, 2011
• Sequence Number: 1
• Publication Date: December 1, 1986
• Content Type: OPEN SOURCE

Approved For Release 2011/02/24: CIA-RDP91-00587R000100240001-6
). LOS ANGELES TIMES
1 December 1986
Crisis Envelops Administration Officials
`What Did They Know;
When Did They Know It?'
By MICHAEL WINES and DOYLE McMANUS, Times Staff Writers
WASHINGTON-Like the stain
of an oil spill, the Iranian arms-
and-hostages deal and the diver-
sion of profits from it to help the
Nicaraguan rebels has spread
across the Reagan Administration
until-directly or indirectly-it
now touches almost every senior
government official concerned
with national security and foreign
policy.
And once again the painfully
familiar questions are being asked
by FBI and congressional investi-
gators: "What did they know, and
when did they know it?"
Those questions, etched in
America's psyche by Watergate
more than a decade ago, now are
being asked about men who hold
some of the most critical positions
of trust in the nation: top Whft
House officials, the secretaries of
state and defense, the attorney
general, the President's national
security adviser, the director of the
CIA-even President Reagan and
Vice President George Bush them-
selves.
The questions already have fig-
ured prominently in the presiden-
tially ordered inquiry by Atty. Gen.
Edwin Meese III, an investigation
that led last week to the resigna-
tion of Vice Adm. John M. Poindex-
ter as Reagan's national security
adviser and the firing of Lt. Col.
Oliver L. North from the National
Security Council staff.
In the nearly four weeks since
the Iranian arms affair began un-
riveling, and in the week since Meese disclosed that
proceeds from arms deals had been funneled to the
Nicaraguan contras, some answers have begun to
emerge. Here is an account of what has become known
about the involvement of key officials, their roles in
tie growing controversy and the questions that
remain.
Edwin Meese III
At last Tuesday's White House briefing, Meese was
asked about legal opinions he had given on the Iran
arms shipments. "The only legal opinion that was
involved had to do with the routine concurrence, with
the (President's national security) finding of January
1986," Meese replied. "That's the only legal advice that
was asked for or that was given."
A Justice Department official said Sunda X that what
Meese, who is also a member of the NSC, concurred in
was actually -ecal advice from the CIA's gene_ml
counsel that a delay in-notifying Congress was
emitted because lives were at stake. "He first
learned of it (arms ship.
ments to Iran) at that (Jan-
uary) meeting," said the
Justice Department spokes-
man, Patrick S. Korten, who
said he did not know the
exact date.
A Justice Department of-
ficial said Meese discovered
that Iranian arms proceeds
had been funneled to the
contras only three days be-
fore he announced it on
national television. On Nov.
20, Meese and Asst. Atty.
Gen. Charles J. Cooper were
reviewing legal issues in-
volved in congressional tes-
timony by Administration Pno
officials the Iran situation. Edwin Meese
When they discovered gaps in the information held
by various White House officials, Meese won Reagan's
approval to assemble a small team of about four trusted
Justice Department officials-all highly conservative
political appointees with little or no experience in
criminal law-to make inquiries. Working through the
weekend, the investigators "discussed" the matter
with, among others, the President, Shultz, Weinberg-
er, Regan, Casey, Poindexter, North and McFarlane,
according to the Justice Department official.
The team, reviewing records of the Iranian arms
sale, came upon the link to the contras on Saturday.
Meese presented that information to Reagan on
Monday, one day before Poindexter resigned and
North was fired.
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 Approved For Release 2011/02/24: CIA-RDP91-00587R000100240001-6
n William J. Case
Casey and the CIA were in the thick of the secret
operation to sell arms to Iran. Meese described the CIA
as "the agent" for the U.S. government in most of the
deal.. The CIA bought the weapons from the Pentagon,
arranged to ship them to Iran and took payment
through its own Swiss bank accounts.
Casey and his agency have flatly and repeatedly
denied taking part in-or even knowing about-the
other part of the scheme, skimming arms profits for the
contras. And Meese said last week that "to the best of
our knowledge, no one in the CIA knew about it."
Two issues are involved: How could the CIA have
been so intimately involved in the arms transfers
without noticing that Iran was paying far more for the
weapons than the United States was receiving? And
why did the agency fail to investigate fully the source
of the contras' new fund-
ing-which Administration
sources say CIA operatives
discovered but did not in-
vestigate when a substan-
tially expanded air cargo
system was put in place at a
time when Congress had
halted U.S. military aid?
Casey briefed the House
and Senate intelligence
committees on these issues
Nov. 21 and told them the
CIA had set up Swiss bank
accounts to receive the
about $12 million that the
United States
charged Iran ~uoeYee t~
for the weapons. But he told William Casey
the committees that he was
unable to give them a full accounting of the money
trail. The House Intelligence Committee demanded a
full accounting, and four days later Meese announced
that he had discovered where the profits went.
Casey also told the committees that a retired CIA
officer, Georie Cave. was recalled by the agency to
oversee the arms-and-hostages operation and was
aboard the aircraft that took McFarlane to Tehran in
May. And Casey said the CIA directly managed five
arms shipments to Iran: one in 1985, before President
Reagan authorized the deal, and four in 1986, after
Reagan approved the plan. But he insisted that neither
he nor anyone else in the agency knew where the
money had gone.
Sources say the CIA held back from pursuing the
money trail for two reasons: A full inquiry might
violate restrictions against CIA surveillance of U.S.
citizens, and there was little enthusiasm for investigat-
ing an effort so closely in accord with the President's
expressed feelings.
Times staff writers Norman Kampala, Ronald J.
Ostrow and Gaylord Show also contributed to this .
article.
oL,
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