Arms sold to free hostages, says report

Press, 10 January 1987, Page 8

Arms sold to free hostages, says report

NZPA-Reuter Washington A secret United States Senate report on the Iran arms scandal concludes that President Ronald Reagan approved it as an arms-for-hostages deal from the start, a television network reported yesterday.

N.B.C. television, displaying what it said was a copy of the report, also said a memorandum found in the safe of Lieutenant Colonel Oliver North, a former member of the National Security Council (N.S.C.), outlined a plan to divert SUSI2 million ($22.6 million) in Iran arms profits to Nicaraguan contra rebels. The report, whose publication has been sought by the White House, concluded that the Central Intelligence Agency director, William Casey, knew more than he has publicly acknowledged about the diversion of Iran arms money, and that White House officials lied about the affair, the network said. But the Intelligence Committee’s report does back Mr Reagan’s statements that he had no advance knowledge of the diversion of funds, concluding that the President was surprised to learn of it, N.B.C. said. A Senate Intelligence Committee spokesman said the leak could force the panel to revise its strategy and possibly release. details before planned. . t -■ N.B.C. said the Seriate report did not back Mr Reagan’s repeated denial that he approved the arms sales to Iran in order to win release of American hostages in Lebanon. It said Mr Reagan’s order of January 6, 1986, approving the sales, specified that they were being approved with the understanding that all the hostages would be freed. Mr Reagan had said the main aim of the sales was

to improve relations with Iran, and that release of the American hostages was secondary. The Senate report also describes the memorandum that turned the controversial Iran arms sales into a scandal, describing a plan to divert Iran funds to Nicaraguan rebels. a N.B.C. said the memorandum, found in Colonel North’s safe and dated April 4, 1986, outlined; a plan to divert ‘ SUSI2 million to the rebels. Discovery of the memo by Justice Department investigators prompted the Attorney General, Edwin Meese, to publicly announce that SUSIO-$3O million might have gone to the contras. 1 At the same time, Mr Reagan fired Colonel North from his N.S.C. job and announced that his boss, the National Security Adviser, Admiral John Poindexter, had resigned. However, the report said the Senate committee was unable to learn how much money actually went to the contras,, if any. The Senate report ajso said Mr Casey was told at a briefing last October 7 by a C.I.A. officer, Charles Allen, that he suspected Iran arms money was being diverted to the contras, N.B.C. said. It quoted the report as saying that Mr Casey confronted Colonel North two days .- later, but Colonel North denied that fuhds were being diverted. ' Mr Casey has 1 said publicly that a New York businessman, Roy Furmark, told him in October of the possible diversion. The Senate report also said that Mr Casey suggested last November', 16 that Admiral Poindexter have the White Hoyse counsel’s office investigate the possible diversion, but Admiral Poindexter replied that ,he could not trust that office to keep what it learned secret. , »