LEGISLATOR SAYS CASEY CALLED NORTH OVER CRASH

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00587R000201060003-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: August 12, 2010
• Sequence Number: 3
• Publication Date: December 17, 1986
• Content Type: OPEN SOURCE

Sanitized Copy Approved for Release 2010/08/12 : CIA-RDP91-00587ROO0201060003-2
ARTICLE P
ON PAGE
legislator Says Casey
Called North Over Crash
By FOX BUTTERFIELD
WASHINGTON, Dec. 16- William J.
Casey, the Director of Central Intelli-
gence, telephoned Lieut. Col. Oliver L.
North shortly after an American cargo
plane carrying arms to the rebels in
Nicaragua was shot down last fall to
ask if any C.I.A. personnel or equip-
ment were involved, according to an
unnamed member of the House of Rep-
resentatives familiar with Mr. Casey's
testimony.
The telephone call is one of a number
of developments that raise new ques-
tions about Mr. Casey's role in the Ad-
ministration's secret Iran arms deal
and the diversion of funds for the con-
tras, as the Nicaraguan rebels are
"called.
The call is significant because at the
time Colonel North was the National
Security Council aide running both the
Iranian arms deal and the aerial resup-
ply operation for the contras, and it
suggests Mr. Casey had knowledge of
Colonel North's secret activities.
It also suggests that Mr. Casey con-
sidered it possible that Colonel North
was using C.I.A. resources for some of
his covert missions and feared his
agency would be tarred by the disclo-
sure of the supply program for the con-
tras.
Denied Advance Knowledge
The 73-year-old Mr. Casey was hospi-
talized Monday for what was described
as a minor cerebral seizure on the day
before he. was scheduled to testify be-
fore the Senate Intelligence Commit-.
tee.
Mr. Casey has sought to play down
his participation in the secret sale of
weapons to Iran and has denied he had
advance knowledge of funds being di-
verted to the aerial resupply operation
for the Contras. But a review of Mr.
Casey's activities over the last two
years shows that, among other things,
he helped keep the Iranian arms deal
secret from Congress, that he used the
analytical resources of the C.I.A. to
provide justification for the talks with
Iran and that he had some early warn-
ings about the diversion of funds to the
Contras. .
According to the House member
familiar with Mr. Casey's testimony
last week, Mr. Casey said Colonel
North had assured him in their phone
conversation that no C.I.A. officials or
equipment were used in the supply
operation for the Contras. Administra-
tion officials have insisted that only
Colonel North had full knowledge of the
complex deal in which $10 to $30 mil-
lion in profits from the arms sales to
Iran were-funneled to the contras.
Telephone Calls by Casey
But the source added that in late Oc-
tober, several weeks after Mr. Casey's
first call to Colonel North, he called
Colonel North again to inquire it any
funds from the weapons sales to Iran
had been diverted to the resupply pro-
gram in Nicaragua. Once again, Colo-
nel North answered in the negative,
reassuring Mr. Casey that no funds had
been diverted, Mr. Casey is said to
have testified.
Mr. Casey's second call may have
been prompted by a five-page memo
prepared- for him by two C.I.A. aides
whom he had instructed to follow uD in-
formation supplied to him Oct. 7 by a
friend, Roy Furmark, about troubles
with the financing of the Iranian arms
sales. Mr. Furmark, an oil trader and
former law client of Mr. Casey, had
warned Mr. Casey that some Canadian
investors who had. lent money to fi-
nance the Iranian arms purchases had
not been paid and were threatening to
expose the secret transaction.
In checking out Mr. Furmark's tip,
the C.I.A. officials apparently came
across some information about the di-
version of funds to the contras and
mentioned it in their memo to Mr.
Casey, Mr. Casey has told friends. But
Mr. Casey was not clear about the date
he had received the memo or how
much information his aides had found
out about the diversion. Instead, Mr.
Casey insisted to-the friends, he had not
really learned about the diverted pro-
ceeds until he was told about it Nov. 24
by Attorney General Edwin Meese 3d,
the day before Mr. Meese announced
his discovery publicly.
Mr. Casey's apparent involvement in
the Iranian arms deal dates to early
1985 when the C.I.A.'s top intelligence
officer for the Middle East, Graham
Fuller, wrote an extensive paper sug-
gesting that there were moderates in
the regime of Ayatollah Ruhollah Kho-
meini whom Washington might con-
tact, an Administration official said.
Then, in the summer of 1985, when
Robert C. McFarlane, President Rea-
gan's National Security Adviser, had
begun meeting with an Iranian middle-
man to discuss a possible opening to
Teheran, Mr. Casey encouraged the se-
cret initiative by producing a detailed
C.I.A. assessment that contended the
time was indeed ripe for talks with Ira-
nian moderates, the official said.
Another important indication of the
C.I.A's role in the Iran deal came in
November 1985, when Colonel North
contacted an agency official to ask for
help in shipping what he said were oil-
drilling parts to Iran.
The official, whom the Administra-
tion official identified as Duane Clar-
ridge, a personal friend of Mr. Casey,
cleared the way for Colonel North to
use a plane in Europe that belonged to
Southern Air Transport, a former
C.I.A. proprietary. When the equip-
ment was being loaded, the handlers
noticed the cargo was really Hawk
missile parts. Mr. Casey was in China
at the time and his role in approving
the shipment is unclear.
Inaccuracy Is Raised -
But the episode has become a critical
one for another reason. Last month,
two days after President Reagan's
press conference on Iran when Mr.
Casey was due to testify before the Sen-
ate intelligence committee, senior offi-
cials from other Government agencies
who saw an advance copy of Mr.
Casey's prepared text were alarmed
that it contained an inaccuracy about
the November 1985 shipment, the offi-
cial said.
In his prepared testimony' Mr. Casey
intended to assert that the C.I.A. had no
knowledge of the shipment, the official
said. This clearly appeared to be an
error that could compound the then al-
ready spreading affair, and it was after
discovering this niscrepancy that Mr.
Meese was called in to begin an investi-
gation. Over the course of his inquiry,
during the next two days, Mr. Meese
then stumbled on the diversion of funds
to the contras, the official said.
In January 1986, Mr. Casey's role in
the affair had deepened when Presi-
dent Reagan issued his finding author-
izing direct and secret United States
arms sales to Iran that would be
shipped by the C.I.A. Some United
States officials involved in the opera-
tion had begun to have doubts about the
arms sales to Iran because of the tardi-
ness of the Iranians in gaining the re-
lease of the American hostages in
Lebanon, but Mr. Casey argued that
ficials said.
I Moreover, several officials said,
was Stanley Sporkin, then the C.I.A.
keeping the operation secret from Cod
gress, meaning that parts of the opera-
tion would have to be run outside nor-
mal Government channels.
In May, when Mr. McFarlane made a
secret trip to Iran with a planeload of
military spare parts and tried to gain
the release of the remaining hostages,
he was accompanied by George Cave, a
retired C.I.A. expert on the Middle East
as well as two C.I.A. communicators.
Colonel North was also aboard the
plane. An Administration official said
this development would have put Mr.
Casey in a good position to learn about
the intricacies of the Iranian side of the
scheme.
Sanitized Copy Approved for Release 2010/08/12 : CIA-RDP91-00587ROO0201060003-2