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IRAN-CONTRA HEARINGS; Day 2: The President's Knowledge and the Ayatollah's Money


New York Times/
July 9, 1987

LEAD: At the Iran-Contra hearings in Washington, Lieut. Col. Oliver L. North was questioned for a second day yesterday, beginning with the issue of President Reagan's knowledge of his activities. Here are excerpts from the testimony, as recorded by The New York Times:

At the Iran-Contra hearings in Washington, Lieut. Col. Oliver L. North was questioned for a second day yesterday, beginning with the issue of President Reagan's knowledge of his activities. Here are excerpts from the testimony, as recorded by The New York Times:

JOHN W. NIELDS JR., chief counsel for the House. Good morning, Colonel North.

COLONEL NORTH. Good morning, counsel.

Q. Yesterday you testified about a conversation which you had with the President of the United States on Nov. 25, 1986, and I believe you said that he told you, ''I just didn't know.''

A. Or words to that effect, yes, sir.

Q. Now following your conversation with the President, did you happen to run into Robert Earl later that day?

A. I'm sure that I did. I went back to my office later in the evening and I'm - I'm sure that I did see him there.

Q. And you mentioned, did you not, the conversation that you had had with the President?

A. Yes. I recall that Lieutenant Colonel Earl was in the office and he had known that the President had called. * * *

Q. My question is this, and I need to ask it of you, sir. Did you say to him, in words or substance, that the President had said to you, ''It's important that I not know.''

A. Counsel, I don't recall the conversation that way. I'm sure that what I said was basically what I told you yesterday, and that is that the President had told me, ''I just didn't know.'' And it may be that the President said it's important that I, Lieutenant Colonel North, understand that he did not know. * * *

Q. Who made the decision to structure the transaction in such a way that there was $17 million left for these purposes that you've described?

A. You keep coming back to $17 million. I've just told you that I got approval to structure the transaction in such a way that there would be residuals remaining from the transaction for the purposes I just told you.

Q. Whose idea was it?

A. I'm going to ask you for the latitude to make a longer discourse than 10 words. * * *

In fact I suggested a number of people and I'm sure you've seen it in my messages to my superiors, a number of people who could meet with senior Iranian officials and various ways in which that could happen.

In that January meeting I told him that I was not confident that we were headed in the right direction.. . .Mr. Ghorbanifar by then was aware of my role in support for the Nicaraguan resistance. He had seen my name in the newspapers. He is a very well-read individual. I had been told by the Central Intelligence Agency, by Director Casey himself and by others in the C.I.A., that they believed Mr. Ghorbanifar to be an Israeli intelligence agent. * * *

Mr. Ghorbanifar took me into the bathroom and Mr. Ghorbanifar suggested several incentives to make that February transaction work. And the attractive incentive for me was the one he made that residuals could flow to support the Nicaraguan resistance. * * *

I must confess to you that I thought using the Ayatollah's money to support the Nicaraguan resistance was a right idea. And I must confess to you that I advocated that. * * *

And I saw that idea of using the Ayatollah Khomeini's money to support the Nicaraguan freedom fighters as a good one. I still do. I don't think it was wrong. I think it was a neat idea. And I came back and I advocated that and we did it. We did it on three occasions. Those three occasions were February, May and October.

And in each one of those occasions as a consequence of that whole process we got three Americans back. And there was no terrorism, while we were engaged in it, against Americans. For almost 18 months there was no action against Americans until it started to come unraveled.

I believed then and I believe now that we had a chance to achieve a strategic opening and right up until the last minute that I left the N.S.C. I was in communication with the Israelis and others who were working on the second channel to achieve that end.

The fact is that whether it was Mr. Ghorbanifar himself who originated the idea or Mr. Nir or others within the Israeli Government, it was a good idea. It was a good idea because we weren't using the taxpayers' money, we were using the Ayatollah's money. And it went indeed to support the Nicaraguan resistance.

Q. When you say you were using the Ayatollah's money, at another time you said you were using Mr. Ghorbanifar's money.

A. Mr. Ghorbanifar was ultimately getting the money from the Ayatollah - I don't know that the Ayatollah signed the checks. I know it was Iranian money. We watched the transfers through intelligence.

Q. But the fact of the matter is Mr. Ghorbanifar was willing to pay that money for those missiles regardless of how the money was used by the United States Government. Isn't that true?

A. I'm not, I don't understand the question, counsel.

Q. Well, let me try it this way: You already knew before that meeting with Mr. Ghorbanifar - well first maybe we better fix the date of the meeting. I take it the meeting followed the finding?

A. I'd have to refresh my memory, but I think it did. I'm not positive.

Q. Well, prior to the time of the finding, Mr. Secord was not going to be the cutout, the Israelis were.

A. Well, at least someone else would be a third party, that's true.

Q. But in any event, I take it the best of your recollection is that this conversation occurred in January after the finding?

A. I don't want to commit myself fully to that until I look at my travel schedule, which you by now know was intensive, and I will be glad to do so if you've got something that will refresh me. But I think it was, yes. The first meeting with Mr. Nir I recall vividly was immediately after Christmas and was either very late December of '85 or early January of '86. * * *

Q. I don't want to belabor the point but let me see if I can ask the question simply once, and see if you can answer this one way or the other. Whose decision was it, whether the monies would be used for the contras or not, someone in the U.S. Government or General Secord?

A. The decision was made that residuals from those transactions would be applied to support the Nicaraguan resistance, with the authority that I got from my superiors, Admiral Poindexter with the concurrence of William J. Casey and, I thought at the time, the President of the United States. I later learned that the President was unaware of that aspect of these transactions.

Q. And if the United States Government had decided that the $10 million, less expenses, should all be paid into the United States Treasury, then that's what would've happened, isn't it? * * *

A. The United States Government charged X-thousands of dollars for a commodity. If I were to buy a piece of land from the United States Park Service for $10,000 and then a year later, or a week later, go out and sell it for $20,000, would the Government of the United States lay claim to my $10,000 profit? I know I'm not supposed to ask the questions but I just asked -

Q. That did not answer my question. The counsel said you'd already answered it. I would like an answer. * * *

Q. The question was, if those higher-ups in the United States Government from whom you sought approval decided that the $10 million should not, any part of it, be sent to the contras but should all come back to the United States Treasury, that's what would've happened, isn't it?

A. Yes.

Q. So it was our money that was going to the contras, wasn't it?

A. I disagree with your conclusion, counsel. I'm sorry, Mr. Chairman. I disagree with your conclusion. If my boss had told me: Ollie, every penny that comes from this thing goes right back into the Treasury of the United States of America, that's exactly what I would've asked General Secord to do. And I am confident that is exactly what he would've done, O.K. I was never asked to do that.

I got approval to do what I did and I didn't do anything without approval. And I'm not trying to pass it all off on somebody else. I was a part of the decision-making process and that I strongly advocated positions, as you have seen in my notes, as you have seen in the voluminous pile of documents. I was a part of a process. I took strong positions that I believed in. I tried to define the risks and the benefits and to lay before my superiors what I thought the advantages of doing it, or pursuing a certain course of action

And I believed that they carried them out with the full authority that they had. And I still, to this day, counsel, don't see anything wrong with taking the Ayatollah's money and sending it to support the Nicaraguan freedom fighters. * * *

Q. I think you testified earlier that the thing that made this project truly appealing to you, for the first time, was when you learned, in January, from Ghorbanifar, that the money could be used to support the contras?

A. No, the way I put it was Mr. Ghorbanifar was trying to encourage us to proceed with the initiative. I had, in accord with my instructions, carried to that meeting very strong reservations, on our part, that what he was doing in this transaction, or the transaction which was first proposed in January, was going to lead to accomplishing our objectives.

And so I went in there and I said look, these things aren't going to work. It's not going to get us from where we are today to where we want to be tomorrow. And he started offering incentives to make it more palatable. And that's when he suggested, well look, we'll just use some of that money to support the Nicaraguan resistance. I've read about you, you've been in the papers.

In fact, by then I think I'd even been in Izvestia. And I know what you really do in your spare time. You support the Nicaraguan resistance, don't you, among other things? And he said, why don't you use some of this money for that purpose?

And as I described to you before we took recess, I thought it was a right good idea. And I came back and advocated it. And we did it.

Q. Even Ghorbanifar knew that you were supporting the contras?

A. Yes he did. Izvestia knew it. The name had been in the papers in Moscow. It'd been all over Danny Ortega's newscast, Radio Havana was broadcasting it. It was in every newspaper in the land.

Q. All our enemies knew it and you wanted to conceal it from the United States Congress?

A. We wanted to be able to deny a covert operation for the very purposes that I described to you yesterday, counsel. * * *

Q. You testified about Admiral Poindexter and the President. Who else, if anyone - and I don't mean to imply anything in the question. But leaving those two people aside, who else in the Government was aware of either the plan or the fact of using proceeds of arms sales to Iran for the contras?

A. Well I, if I may clarify what I testified to yesterday, it is my assumption the President knew and then I subsequently testified that I was told he did not know. I know that Admiral Poindexter knew. I know that Mr. McFarlane knew at a point in time when he was no longer in the Government. And Director Casey knew.

Aside from that, I can't speak with certainty as to who else, inside the government, knew for sure.. . .But the only ones that I know for sure, who I confirmed it with, were those three. * * *

Q. When did Director Casey first learn of it?

A. Actually, I - my recollection is Director Casey learned about it before the fact. Since I'm confessing to things, I may have raised it with him before I raised it with Admiral Poindexter. Probably when I returned from the February - from the January discussions.

Q. You're referring now to the discussions, the trip, during which you had the discussion with Mr. Ghorbanifar in the bathroom?

A. Yes, I don't recall raising the bathroom, specifically, with the Director, but I do recall talking with the Director and I don't remember whether it was before or after I talked to Admiral Poindexter about it. But I - I was not the only one who was enthusiastic about this idea. And I - Director Casey used several words to describe how he felt about it, all of which were effusive.

He referred to it as the ultimate irony, the ultimate covert operation kind of thing, and was very enthusiastic about it. He also recognized that there were potential liabilities. And that there was risk involved. * * *

Q. What kinds of risks did he identify to you?

A. This very political risk that we see being portrayed out here now; that it could indeed be dangerous, or not dangerous so much as politically damaging.

Q. Do you have any reason to believe that Director Casey, given the political risk, ever discussed the matter with the President?

A. I have no reason to believe that he did because he never addressed that to me. I never, as I indicated yesterday, no one ever told me that they had discussed it with the President. * * *

Q. Did you have other discussions with Director Casey on the subject of use of these arms sales proceeds for the contras?

A. Yes we did. * * *

Director Casey and I talked at length on a variety of occasions about the use of those monies to support other operations besides the Nicaraguan operation. And you, no doubt, have seen records of my accounting of other activities that were planned beyond the Nicaraguan resistance. * * *

Q. Did you ever tell Director Casey that the funds had actually been used to support the contras - that is, funds arising out of Iranian arm sales?

A. Oh yes.

Q. And I take it on more than one occasion?

A. Yes. * * *

Q. My question was, you knew that the residuals had gone into accounts controlled by General Secord - not accounts controlled by the contras?

A. That is correct.

Q. And do you recall the Attorney General saying they had gone directly from Israeli accounts into accounts controlled by the contras?

A. I do not recall that specific wording, but I don't dispute that he said it. I'm sure if it's on the transcript, he did.

Q. My question is, did he get that from you?

A. He may well have.

Q. But you knew at the time that that was not true? * * *

A. Well, again, Mr. Nields, what I told the Attorney General that afternoon was the truth as I knew it, and that's what I always did, and that's what I'm doing now. * * *

Q. Among other things, you directed those who were operating the resupply operation down in Central America with respect to when they should make drops, how they should make them, where they should make them, and so on? * * *

A. I don't think that directed is the right term, and I'm not trying to back away from any of the things that I did. It is hard to direct a war from a desk in Washington, and I wasn't trying to direct a war from a desk in Washington. I provided as much support for those activities as I was physically able.. . .And so directing, I don't think, is quite the right phrase to use. * * *

Q. And I take it, among other things that you did was direct monies to various contra leaders and other persons in Central America?

A. I did, as I testified this morning.

Q. And some of those were carried down by Mr. Owen?

A. Yes, they were.

Q. And some of them were taken there by General Secord or people working under his direction?

A. Yes. And others.

Q. And I take it that Mr. Owen did a number of things in furtherance of the support of the contras?

A. Yes he did.

Q. Indeed, you had a name for him - I take it it was The Courier?

A. I don't recall giving him that name, but I do recall that his documents would come in marked TC.

Q. And that stood for The Courier?

A. Yes.

Q. And as you've already said, he would carry money down from your office to various contra leaders?

A. Yes.

Q. And he scouted the airstrip?

A. I guess he did, yes. I'm not too sure. Yeah, I guess that was prior to Olmstead.

Q. And he would bring you lists of weapons from the contras that they wanted?

A. That's right, among other things.

Q. And he carried intelligence from you down to the contras for particular operations?

A. That's correct. * * *

Q. I take it that you contacted other people for the purpose of having them do or talk to the contras about doing special operations.

A. I did, among other things, yes.. . .We also worked very hard to unify this resistance movement. And I would point out, without taking undue credit or having undue credit given to those with whom we worked, that this is the only anti-Communist resistance movement that ever unified. We haven't succeeded in doing that in Afghanistan, we didn't succeed in doing that in Angola or Ethiopia, Guinea-Bissau, Mozambique or other places where resistance movements have grown up to fight Communism. It happened here.

It happened here because, I think, there were so many people working so hard for a unified purpose. And that was a lot of what we did. We also delivered food and clothing and medical supplies and provided prosthetic limbs for people with their arms and hands blown off, and their legs. And tried to look after the families of those people who had been killed or badly wounded and were no longer productive wage earners. And so there was a lot done.

In a word, Director Casey said it was a ''full service'' covert operation, and I'm not too sure that's a bad description. It was a lot of people who cared. * * *

Q. Did you obtain from Mr. Dutton a book of photographs?

A. From who? Oh, yes, I did.

Q. And did you tell him that you wanted that book of - and this was, I take it, a book of photographs of various aspects of the resupply operation?

A. That's correct. * * *

Q. And did you tell him that you wanted that book so that you would have something to show the President about the good work that they were doing?

A. I - I'm not sure that I put it that way.. . .I think what I wanted to do was to, if I said something to that effect, I think the President ought to see this.. . .Because the President ought to be aware of what a handful of people did to keep the Nicaraguan resistance alive, at a time when nobody in this Congress seemed to care. * * *

I would like to correct something I just said, Mr. Chairman. And I apologize to those who did care. Because there were many members of this body who cared a lot. And eventually a majority cared again and chose to appropriate $100 million to support that resistance. And I apologize to those of you who have backed them all the way. And I pray to God you will not stop because what I have done or what I have failed to do.

I desperately believe that if nothing else comes of these hearings, that you will have sufficient reason to vote again to appropriate monies to that cause.

Q. Go back again now to the summer of 1986. Exhibit 122 is a resolution of inquiry. It relates to you and it seeks information about funding concerning the contras, military advice and asks specific questions about Robert Owen, General Singlaub and a man named John Hull?

A. Right.

Q. And there came a time, did there not, when you had an interview with members of the House Intelligence Committee?

A. I did. * * *

Q. And they were interested in finding out the answers to the questions raised by the resolution of inquiry?

A. Exactly.

Q. Your fund-raising activities, military support for the contras?

A. That's right. * * *

Q. But I take it you did considerably more which you did not tell the committee about?

A. I have admitted that here before you today.. . .I will tell you right now, counsel, and all the members here gathered, that I misled the Congress. * * *

Q. You made false statements to them about your activities in support of the contras?

A. I did. Furthermore, I did so with a purpose. And I did so with the purpose of hopefully avoiding the very kind of thing that we have before us now, and avoiding a shut-off of help for the Nicaraguan resistance, and avoiding an elimination of the resistance facilities in three Central American countries, wherein we had promised those heads of state on my specific orders - on specific orders to me I had gone down there and assured them of our absolute and total discretion.

And I am admitting to you that I participated in the preparation of documents to the Congress that were erroneous, misleading, evasive and wrong. And I did it again here when I appeared before that committee convened in the White House Situation Room. And I make no excuses for what I did. I will tell you now that I am under oath and I was not then.

Q. We do live in a democracy, don't we?

A. We do sir, thank God.

Q. In which it is the people not one marine lieutenant colonel that get to decide the important policy decisions for the nation?

A. Yes, and I would point out that part of that answer is that this marine lieutenant colonel was not making all of those decisions on his own. As I indicated yesterday in my testimony, Mr. Nields, I sought approval for everything that I did.

Q. But you denied Congress the facts?

A. I did.

Q. You denied the elected representatives of our people the facts, upon which, which they needed -

A. I did.

Q. - to make a very important decision for this nation?

A. I did, because of what I have just described to you as our concerns. And I did it because we have had incredible leaks from discussions with closed committees of the Congress.

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