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Indictment: Conspiracy Developed from Reagan’s Arms-For Hostages Deals

March 17, 1988

WASHINGTON (AP) _ President Reagan’s arms-for-hostages deals became the springboard for an elaborate, illegal conspiracy to aid the Nicaraguan Contras and enrich two private businessmen, according to the indictment of four key Iran-Contra figures.

It is this conspiracy that forms the backbone of the 23-count indictment against former National Security Adviser John M. Poindexter; his aide, Oliver L. North; and the two businessmen: retired Air Force Maj. Gen. Richard Secord and his business partner, Albert Hakim.

Arms sales to Iran were formally authorized by Reagan on Jan. 17, 1986 when he signed an official finding.

But the indictment charged that the defendants ranged far beyond the president’s initiative into the zone of illegality.

They did it by deceiving the Justice Department, Congress, and even the Central Intelligence Agency, the indictment said. Official documents were destroyed and transactions were concealed through use of foreign corporations and untraceable Swiss bank accounts, the grand jurors said.

The aid to the Contras came while such assistance was banned by Congress.

The indictment accused the defendants of repeating the same deceptive scheme to make a profit for what Secord and Hakim called ″The Enterprise″ - and to arm and supply the Contras.

For instance in early 1986, the indictment said, the defendants told the CIA that Iran paid $3.7 million for 1,000 TOW anti-tank missiles when the Iranians actually paid $10 million.

The difference went for the Contras and to Swiss investment accounts ″under the control of the defendants Secord and Hakim for their personal benefit,″ the indictment said.

In May 1986, the indictment went on, $16.4 million was deposited for the Enterprise, including $15 million from Iran for Hawk anti-aircraft missile parts, and TOWs for Israel. The TOWs for Israel were to replenish that nation’s supply for its prior transfer of TOWs to Iran.

The conspirators ″caused only $6.5 million to be transmitted to the United States through the CIA ... thus leaving a remainder of almost $10 million in the bank accounts of the Enterprise,″ the indictment said. The arms sales profits again went for the Contras and the Hakim-Secord profits.

And in October and November 1986, the conspirators shipped 500 TOWs to Iran and were paid $3.6 million by the Iranians. Only slightly more than $2 million went to the U.S. government through the CIA, with the remaining $1.5 million going to the businessmen, the indictment said.

Part of the conspiracy involved North’s fund-raising for the Contras and the Secord-Hakim enterprise.

″In the spring and early summer of 1985, in order to fund the Enterprise, the defendant Oliver L. North began raising money through the National Endowment for the Preservation of Liberty by, among other things, arranging meetings with officers of and potential contributors to NEPL, and others participating in soliciting contributions for ... the Contras,″ the indictment said.

″From the fall of 1985 to December 1986, the defendant Oliver L. North controlled the disposition of funds raised for the Contras through NEPL.″

Last spring, two conservative fund-raisers, Carl R. ″Spitz″ Channell and Richard Miller, pleaded guilty to felony charges that they conspired with North to illegally use a tax-exempt foundation for the purpose of raising money for the Contras, a non-exempt purpose. Both are cooperating with Walsh’s investigation.

And in June 1986, the indictment said, North came up with a new scheme. He attempted to divert to the Enterprise a $10 million contribution from Brunei intended for humanitarian aid to the Contras.

He did so ″by undertaking to supply an official of the Department of State (Elliott Abrams) with the bank account number of Lake Resources (an enterprise account) instead of the number of a Contra bank account, which the official had requested.″

Another part of the conspiracy was to deceive Congress, the indictment said. North and Poindexter made ″false, fictitious, fraudulent and misleading statements and representations, concerning, among other things, the involvement of officials of the United States ... in support of the military and paramilitary operations in Nicaragua.″ Such assistance was banned by the Boland Amendment passed by Congress.

And in November 1986, as a Justice Department inquiry of the Contra effort closed in on North and Poindexter, they ″altered, destroyed, removed official and other documents and records, including classified documents and records of the NSC and the staff of the NSC,″ the indictment said.

It said North further tried to cover up his activities in late November 1986 by making ″false and misleading statements to the attorney general″ who was conducting an inquiry for the president.

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