NORTH SAID HE MENTIONED DIVERSION TO REAGAN, SECORD SAYS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000605090012-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 23, 2016
• Document Release Date: February 21, 2013
• Sequence Number: 12
• Publication Date: May 7, 1987
• Content Type: OPEN SOURCE

Declassified in Part - Sanitized Copy Approved for Release 2013/02/21 : CIA-RDP90-00965R000605090012-2 STAT
WASHINGTON POST 11/
ARTICLE APPEARED 7 May 1987
ON PAGE -/
North Said He Mentioned Diversion to Reagan, Secord Says
contra affair. Nothing that related to the . A Bush spokesman confirmed
Iranian operation," Secord said. Yesterday that the vice president
He bitterly attacked Reagan's top aides had called North that day and
for not standing up for the program after it "wished him well" in a brief conver-
was exposed. And he described his dramatic sation. Another Bush aide said it
last-minute effort Nov. 25 to persuade Poin- was done because North was "down
dexter "not to quit, to stand in there and and discouraged."
fight and let's get this thing Many of the facts presented by
straightened out." Secord in response to three hours
By then, however, Poindexter of querying by House Majority
had handed in his resignation. When Counsel John W. Nields Jr. called
Secord "demanded" to talk to the into question statements made last
president, he said he was told it was November by top Reagan admin-
too late. "They'd already built a wall istration officials, including the
around the president," Secord said a president, concerning their role in
White House aide told him. Shortly and ? knowledge of the Iran-contra
after Secord's brief conversation Wail'.
with Poindexter, Attorney General , At his news conference last Nov.
Edwin Meese III announced at a 25, Meese asserted that the pricing
news conference that the adminis- of the U.S. weapons that went to
dation had just learned of an unau- Iran was not handled by Americans
thorized diversion of funds, which and that the funds generated by the
he called an "aberration from the sales were transferred "to repre-
policy." Meese added that the Jus- sentatives, as best we know, that
tice Department was looking into can be described as representatives
"whether there's any criminal acts of Israel."
involved." "So far as we know at this stage
Secord said Meese's remarks no American person actually han-
"betrayed all of us, and it's unfor- died any of the funds that went to
givable." the forces in Central America,"
' "I was stunned," he said. Meese said then.
Secord said that later in the af- In an interview with Time mag-
ternoon he met North at a hotel and azine last November, Reagan said
observed as the just-fired White "another country" was "overcharg-
House aide received two phone ing . . . apparently putting the mon-
calls, one from Reagan and another ey into bank accounts of the leaders
from Bush. of the contras. It wasn't us funnel-
"I didn't realize it was the pres- ing money to them. This was anoth-
ident until I saw him stand up at er country."
attention as a good Marine, you But under Nields' questioning,
know. And, he said, 'Yes, Mr. Pres- Secord outlined a totally different
ident. Yes, Mr. President. Thank story, in which Secord and North
you very much, Mr. President,' " set the prices and the Iranian funds
Secord said. were put into the Lake Resources
Secord added that North con- account in Switzerland controlled
cluded the phone call by saying, by Secord. Nields also entered into
"I'm just sorry it had to end this the record Secord's running tabu-
way. I was trying to serve you the lation of the Swiss account that
best way I knew how, Mr. Presi- showed payments directly to mu-
dent." nition suppliers and companies in-
Secord, who had desperately volved in the contra airlift that
been trying to reach the president North helped initiate and later di-
to "try to bring some rationality rected.
back into this matter," told the corn- In addition, it showed regular
mittees that he tried to get the contributions to contra leaders.
phone. "Let me have the phone," he Those records showed that in
said he told North. "But it was too October 1985 Secord made three
late, he hung up. I wasn't fast payments in cash to North: $3,000
enough." on Oct. 5; $5,000 on Oct. 15 and
_ .
_ By Walter Pincus and Dan Morgan
7 1-- WashirritiTii-PosiStaff Writers
Retired major general Richard V. Secord
testified yesterday that former White
House aide Oliver L. North Jr. said several
times that he had mentioned to President
Reagan that it was "very ironic" that "some
of the ayatollah's money was being used to
support the contras."
"Whether he actually said this to the
president, or whether he was joking with
me, I'm not sure," Secord said. But Secord
added that it was "not said to me in a way
that [took it as a joke."
Secord, the principal operator in both the
private airlift that resupplied the Ni-
caraguan contras with military equipment
and the U.S.-Iran arms shipments, testified
for the second day before a joint session of
the House and Senate select committees
investigating the Iran-contra affair.
Secord said he had no "direct, first-hand
knowledge about what the president knew
or didn't know." But he said he thought that
the diversion of arms-sales profits was "per-
fectly legitimate in this enterprise" and that
"we would really be applauded in the end."
In one of his few displays of emotion, Se-
cord listed top Reagan administration offi-
cials he had spoken to or met with, some of
whom told him that the president was
aware of what he was doing with the con-
tras and was pleased with the work. In ad-
dition to North, he mentioned the late CIA
director WJjjjamJ..neand former nation-
al securi y advisers Robert C. McFarlane
and John M. Poindexter.
Secord also said North received separate
condolence phone calls from the president
and Vice President Bush after the Marine
lieutenant colonel was fired from his job at
the National Security Council in late No-
vember.
Reagan has repeatedly denied any knowl-
edge of the diversion of funds to aid the con-
tras. White House spokesman Marlin Fitz-
water said yesterday that the president
stands by his statement and added, "We
think we are aware of all [the president's]
contacts with 011ie [North]."
Secord said he had shredded some of his
records of the contra operation in the first
days after public exposure of the secret Iran
operations early last November. He said he
was afraid they might be stolen.
"I had some telephone logs shredded and
some telexes shredded that related to the
Continued
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$3,000 on Oct. 28. Secord testified
Tuesday that North had sought
cash to pay for a hostage-release
operation involving agents of the
Drug Enforcement Agency. The
records also showed a $30.000 cash
payment on May 15, 1986 to
"DEA."
Secord testified that in May
1986?at the time an American
delegation was secretly visiting
Tehran on an arms-for-hostages
mission?North was using DEA
agents operating from Cyprus for a
different hostage-release effort.
Prior to this testimony, Nields
had been leading Secord through a
chronological account of his involve-
ment in the arms-for-hostages op-
eration. Under that questioning,
Secord contradicted statements
from high officials about their ac-
tivities.
For example, Casey and Poindex-
ter told Congress last November
that the Central Intelligence Agen-
cy helped facilitate a 1985 Israeli
shipment of U.S.-made Hawk mis-
siles to Iran, believing that it was
"oil drilling equipment." But Secord
said yesterday that he had informed
the CIA station chief in Portugal as
the shipments were being arranged
that the cargo was missiles, and he
said that the information was
passed back to CIA headquarters.
Secord also testified about the
controversy over when the presi-
dent first authorized the initial sale
of Israeli-owned U.S. equipment in
August and September 1985. He
said McFarlane told him on an air-
plane returning from London to
Washington that the president had
authorized the sale in July. Reagan
gave varying statements to the
? Tower commission, stating finally
that he could not remember the
date.
As initially conceived, Secord
said that during a January 1986
meeting in the White House Situ-
ation Room, the U.S. arms sales
were structured so that, if exposed,
the "Israelis would take the hit." By
that he meant that if there were
publicity, the Reagan administra-
tion could plausibly deny any role.
Secord gave another illustration
of a White House attempt last No-
vember to change what he under-
stood to be the facts surrounding
the operation and the president's
role in the early shipment. He de-
.. . .
scribed being called to the White
House to help prepare Casey's tes-
timony to Congress. On the second
of two visits, he found that a change
had been made about whether the
president had acquiesced in the Is-
raeli arms sale.
The second version, unlike the
first, "had been changed to indicate
that the president had not ap-
proved, which was not consistent
with my understanding of the
facts," Secord said.
He testified that he told North,
"There's something wrong here.
This is 'expletive deleted.'"
North told him McFarlane had
drafted the change, Secord said.
The only real tension in two days
of questions-and-answers between
Nields and Secord came over who
controlled the $8 million left over
from the 1986 U.S.-Iran arms sales.
Nields attempted to get Secord
to say that the funds, now in Swiss
banks, are to be considered as
quasi-governmental monies that can
be used for U.S. government-
authorized activities. Under ques-
tioning, Secord said that all the ex-
penditures out of the surplus were
ordered by North and were used for
projects that the White House aide
was directing.
However, Secord insisted that
the profits were not government
funds and belonged to "the enter-
prise," and that, hypothetically, he
could spend them as he wished.
"So you could have gone off and
bought an island in the Mediterra-
nean?" Nields asked.
"Yes, Mr: Nields, but I did not go
to Bimini," said Secord, drawing
laughter in his reference to the con-
troversy involving Democratic
presidential candidate Gary Hart.
The question of who controls the
funds is crucial because the Reagan
administration at times has insisted
that the profits generated by the
arms sales to Iran were private and
that, therefore, their use in support
of the contras did not violate the
congressional ban on U.S. military
aid.
Another question is whether
weapons were priced high by North
and Secord in order to generate
funds for covert operations, possi-
bly including ones other than the
contra-support effort.
Secord credited North with pro-
posing what apparently was the
first diversion of arms-sales funds
to the contras in December 1985.
The previous month, as part of an
Israeli shipment of U.S.-made Hawk
missiles to Iran, $1 million had been
deposited in Secord's Lake Re-
sources account in Switzerland.
Because the operation was shut
down prematurely, Secord said, his
costs were only about $200,000,
leaving $800,000 of Israeli money
in the Swiss account.
"I assumed they [the Israelis)
would ask for their money back, but
they didn't. I discussed this with
North and later?I believe late De-
cember?he told me they were not
going to ask for it back and we
could use it for whatever purpose
we wanted. We actually expended it
on the contra project," Secord tes-
tified.
Secord added he thought the idea
was North's.
The three major 1986 shipments
of U.S. arms to Iran generated a
surplus, after expenses, of some
$14 million. In each case, Secord
said, North was instrumental. In the
case of one of the sales?$15 mil-
lion of Hawk missile spare parts in
May?the pricing was worked out
by him and North, he said.
"I take it it's fair to say that the
price that you eventually decided to
charge [Irani was substantially in
excess of the amount paid to the
U.S. Treasury," Nields asked.
"Yes."
"Did you and North talk about the
reason for the difference?"
"Yes, of course we did," Secord
said. "And there were a number of
reasons and the contra was one of
them. . . . The contra requirement
was much on our mind."
Some $3.5 million eventually
went to the contras from the 1986
arms sales, Secord testified Tues-
day.
One surprising element of Se-
cord's testimony was his assertion
that in early 1986 the Iranians nev-
er explicitly agreed to arrange the
release of all?or any?of the four
remaining American hostages held
in Lebanon by pro-Iranian extrem-
ists.
According to NSC documents and
previous testimony by McFarlane,
the White House expected that all
four hostages would be freed?ini-
tially in return for 1,000 TOW mis-
siles to be shipped in February
blood
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1986 and then, at the time of
McFarlane's secret trip to Tehran,
in May. But Secord said that he had
never been told of any Iranian com-
mitment to free the hostages.
George Van Cleve, chief minority
counsel, followed Nields with ques-
tions aimed at establishing that the
officials?other than North?that
Secord said Tuesday gave him sup-
port were acting within the law.
These officials included the two
U.S. ambassadors, various CIA op-
eratives and Casey.
Secord told Van Cleve that he did
not know whether former CIA
agent and Bay of Pigs veteran Felix
Rodriguez discussed contra oper-
ations with Bush when he met with
him last year. Bush has denied hav-
ing such a discussion, but on Tues-
day Secord testified he believed the
two discussed the contra operation.
Secord described himself as a
"private person trying to help my
government."
However, he testified that he of-
ten performed various services for
the government that went well be-
yond purely business.
Secord said that while acting as a
"commercial cutout" for the U.S.
government in the arms sales to
Iran last year, he attended a meet-
ing in Frankfurt at which he and the
chief of the CIA's Near East section
gave an intelligence briefing to two
Iranian military officials. The brief-
ingmas based on a U.S. intelligence
"sample" of a small section of the
Iran-Iraq border, with high-altitude
photography and military symbols.
At this meeting, Secord's busi-
ness partner, Albert A. Hakim,
served as the Farsi language trans-
lator.
Hakim came disguised in a gray
wig and glasses, calling himself
"Ibrahim Ibrahim," a man of Tur-
kish descent working for the U.S.
government. The ruse was devised
to keep Hakim's identity from Iran-
ian arms dealer Manucher Ghor-
banifar, who objected that Hakim,
who did business in Iran during the
reign of the shah, was an "enemy of
the state," Secord said.
Ghorbanifar, who attended the
Frankfurt meeting, never caught
on, Secord said.
? Secord said after their meeting in
December 1985, McFarlane called
Ghorbanifar "the most despicable
character' he had ever met.
"I found that kind of an interest-
ing comment, because he was far
from the most despicable character
I've ever met," Secord said. He
added, however, that "the argumen-
tation he was advancing [concern-
ing trading state-of-the-art U.S.
weapons for U.S. hostages] was re-
pulsive to all of us."
"In January 1986, Mr. Ghorbani-
far had been invited to come to
Washington. . . . and he was given
a polygraph exam which, as usual,
he busted," Secord said.
At one point, after the Iranian
businessman gave him a check that
bounced when deposited in Secord's
account at Credit Suisse Bank, Se-
cord said he became so angry that
he said he was going to recommejad
that Ghorbanifar be "terminated,
"He took it the wrong way am:the
told Mr. 1Arnirnam] Nir that I *as
trying to have him killed. I think it
was said later, it's not a bad ides?
but it's not what I had in mind,"Se-
cord said.
Staff writer David Hoffman and 1;:
staff researcher Michelle Hall ?
contributed to this report
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