TIME: Almanac 1993/TIME Almanac 1993.iso/time/caps/86/86capts.15

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                ++                                                          ╚December 29, 1986

IRAN-CONTRA

Not Much Wiser Than Before


Now it is the turn of Walsh and the next Congress to sort out
the scandal


The meeting, according to Robert McFarlane, occurred on Aug. 6
or 7, 1985, upstairs in the White House living quarters, where
Ronald Reagan was recuperating from his operation for colon
cancer. Among the others present were Secretary of State George
Shultz, Defense Secretary Caspar Weinberger and John Poindexter,
who would later replace McFarlane as National Security Adviser.
The question: Would the President approve shipment by Israel
of American-made arms to Iran as part of a shaky scheme to free
U.S. hostages in Lebanon? Reagan was aware of the dangers,
McFarlane told a congressional committee last week, but in the
end gave his go-ahead. "If Israel choose to do that and then
seeks to replace [the arms] with weapons from us," he quoted the
President as saying, "then we will sell them."

By conveying that decision to Israel, McFarlane began
Washington's official involvement in the dubious
arms-for-hostages initiative that has evolved into the biggest
scandal since Watergate. "It is not reasonable to believe that
I would convey an approval against the President's wishes,"
McFarlane told TIME. But White House Chief of Staff Donald
Regan testified last week that the President gave no such
approval. Shultz checked his own notes and says he does not
recall Reagan's doing so, nor does Weinberger, though McFarlane
says he discussed the President's approval with both men. The
President seems unable or unwilling to recall exactly what he
ordered. The dispute is merely one of the many surrounding the
Iran-contra connection. But it is emblematic of the
difficulties involved in getting to the bottom of the affair.

The gaol of the past few weeks, repeatedly professed by
President Reagan and almost everyone else, was to get all the
facts out as quickly as possible. But it didn't happen. As
congressional committees wrapped up their extraordinary series
of post-adjournment hearings, the lingering questions about
Iranscam ranged from how it started to where all the skimmed
profits intended for the contras ended up. Now it is the turn
of Lawrence Walsh, the newly appointed independent counsel, and
the select committees formed by the House and Senate to begin
the task of sorting through a scandal that has taken on a life
of its own.

After hearing 91 hours of secret testimony from 36 witnesses
over three weeks, the Senate Intelligence Committee starkly
conveyed the pervasive confusion. Republican Chairman David
Durenberger concluded that the entire scheme to divert funds to
the contras was handled by Oliver North, the fired National
Security Council staffer who still refuses to testify. "There's
no clear evidence in my mind," said Durenberger, "that North
operated under anybody's authority." But ranking Democrat
Patrick Leahy disagreed. "My firm thought right now is that he
did not act alone." The two Senators concurred, however, that
they had not yet discovered what money, if any, actually made
it to the contras. "All the money could be sitting in a Swiss
bank account as far as we know," said Durenberger.

The committee had hoped to get some of these missing pieces from
CIA Director William Casey, who was scheduled to testify on
Tuesday. But the day before, he suffered a seizure in his
office and was taken by ambulance to Georgetown University
Hospital. He underwent more than five hours of neurological
surgery, during which doctors removed an apparently cancerous
brain tumor. It is unlikely that Casey will soon be able to
testify or return to work; his wife, who believes the problems
were partly due to stress, wants him to resign. Casey's deputy
director, Robert Gates has taken over his duties for the moment.

Because of Casey's sudden illness, Regan ended up testifying
sooner than expected. After more than five hours of
questioning, Regan emerged. "I didn't duck any question, I
didn't take any Fifth Amendment, I didn't invoke Executive
privilege," he told reporters. Senator Dennis DeConcini, an
Arizona Democrat, said Regan had told an "unbelievable story in
a very believable way."

Poindexter and North remained unforthcoming; both have invoked
their Fifth Amendment right not to testify about matters that
could incriminate them. In order to show his eagerness to get
their testimony out, Reagan issued a statement urging that the
G.O.P.-controlled Senate committee grant the two former NSC
officials limited immunity from prosecution. But his request
was rebuffed as premature by members of both parties. "No point
in it," said Republican Leader Bob Dole. Congressman Lee
Hamilton, the Indiana Democrat who chairs the House Intelligence
Committee and has been chosen to head the House select committee
next year, said in an interview, "Whatever we do should be done
after consultation with the independent counsel and after we
have a better understanding f what the basic facts are."

Some Reagan supporters, including Vice President George Bush,
urged that North and Poindexter should put their country ahead
of their personal plight and testify voluntarily. Said Nancy
Reagan: "If we could just get North and Poindexter to talk.
Now it is up to them." But Reagan refused to make the request,
as North pointed out. "The President hasn't asked me to give
up my individual rights," the Marine colonel said. He added,
"Men have died facedown in the mud all over the world to protect
those individual rights." North also issued what sounded to man
like a possible warning to the Administration to lay off: "I
have over the last 23 days found myself abandoned and rejected
by many of my so-called friends and former colleagues." A
devout Catholic, he referred reporters to Psalms 7:1 of the
Bible: "O Lord my God, in Thee do I take refuge; save me from
all my pursuers, and deliver me."

Attorney General Edwin Meese, meanwhile, faced questions about
a request he made in late October to FBI Director William
Webster for a ten-day delay in an investigation into the role
played by Southern Air Transport in supplying the contras.
Webster agreed. Meese had linked the request to "sensitive
hostage negotiations." Some on Capitol Hill have charged that
the content of Meese's request suggests that he had some idea
of the connection between the Iran deals and the contras almost
a month before he revealed it publicly. But Meese says he made
his appeal at the behest of Poindexter, who told him that
Southern Air was involved in carrying out a secret U.S. mission
in the Middle East but who did not mention the diversion of
funds to the contras.

The expanding investigation into such matters will inevitably
dredge up revelations about the links that North and others had
with the private effort to help the Nicaraguan rebels. During
much of the past two years, there was a congressional ban on
direct or indirect U.S. military assistance to the contras.
Eugene Hasenfus, the American mercenary who was released last
week, is expected to be among those called by Congress to
testify next year. When asked if he would do so, Hasenfus
replied, "Why not?"

In selecting a special prosecutor (now called an independent
counsel) to probe the affair, a three-judge panel in Washington
provided a broad mandate to investigate five areas, including
the "provision or coordination of support for persons or
entities engaged as military insurgents in armed conflict with
the government of Nicaragua since 1984." The man they picked
is Lawrence ("Ed") Walsh, 74, a former federal judge and Viet
Nam peace negotiator. Born in Canada, he became a naturalized
U.S. citizen in 1922 and spent much of his private career with
the Wall Street law firm of Davis Polk & Wardwell. He is
currently an attorney in Oklahoma City.

The Senate and House also picked the members of separate select
committees that will launch Iranscam investigations when
Congress convenes next month. The eleven members chosen for the
Senate panel are generally cautious, low-keyed and relatively
conservative. All have a background in law. The chairman:
Democrat Daniel Inouye of Hawaii, who served on the Senate
Watergate panel 13 years ago. The ranking Republican is Warren
Rudman, a former New Hampshire attorney general and one of the
Senate's most independent-minded members. The 15-member House
committee will be chaired by Hamilton, with Richard Cheney of
Wyoming, White House chief of staff under President Ford, as the
ranking Republican. When asked last week whether he thought
Reagan knew about the diversion of funds to the contras,
Hamilton said, "The President says he doesn't know, and I assume
he is telling the truth. The fact is that after weeks of
investigation, we know relatively little about that diversion."
He added that his committee hopes to hear from foreign
participants, including Israeli officials and Saudi Arms
Merchant Adnan Khashoggi.

With its murky connections to the private contra supply network
in danger of trickling exposure, along with virtually all of its
other covert activities, the Administration seems destined to
be debilitated for months to come. The realization that the
scandal has a life of its own added new urgency to the
maneuverings of Reagan's old California cronies (and of his
wife) to prompt a housecleaning. Yet Reagan continues to resist.
"If anything," said Senator Paul Laxalt, a longtime friend,
after seeing Reagan early last week, "his heels are dug in even
deeper than before." Don Regan, annoyed with someone who again
raised the subject of his resigning, reportedly responded, "You
[expletive deleted] resign!"

Still, something has to give. The Administration has lost
control of events: it has yet to get the facts out, and by
omission the President has become a silent participant in the
scandal, as past and present aides flounder about contradicting
one another or refusing to divulge what they know. As a result,
there are still as many unanswered questions as there were seven
weeks ago. As the crisis festers, a vacuum is developing within
the Administration. A replacement may have to be found for
Casey. Spokesman Larry Speakes and Cabinet Secretary Al Kingon
are leaving. Domestic Policy Adviser Jack Svahn has departed.
If Regan goes, so will most of his assistants. Staffers are
wondering who will replace these men, but a more compelling
question is, Who can help make those selections?

A lot of the President's old friends are willing to offer their
advice. Stuart Spencer, who helped manage most of his
campaigns, came from California and met privately with the
Reagans last week. Michael Deaver, still under investigation for
his lobbying activities, will have Christmas dinner with the
First Family. There is talk of Paul Laxalt coming into the
White House as a counselor and of Drew Lewis, the former
Transportation Secretary, being tapped as chief of staff. In
the past, Reagan has acted on difficult matters during his
year-end holidays in California. And that is where he was
heading this week, for a few days of reflection and socializing
before Round 2 of the Iranscam investigations begin.

--By Amy Wilentz. Reported by Barrett Seaman and Bruce van
Voorst/Washington


---------------------------------------------------------------
Thunder to the Right

The speeches were dramatically illustrated with slides and maps
of Central America. The case for Nicaragua's contra rebels was
presented starkly, with powerful emotion. "All we offer [them]
is a chance to die for a cause they believe in," Lieut. Colonel
Oliver North told a rapt audience in Nashville. "If we fail to
provide the support that is so necessary for these people, this
country, which last year had 23 of its citizens killed by
terrorism around the world, will very soon find its citizens
being gunned down on its own streets."

North, it became clearer last week, was not only the point man
in a clandestine effort to support the contras; he was also a
hot speaker on the private contra fund-raising circuit. The
National Security Council aide began briefing private groups on
Central America in 1983 at weekly sessions organized by the
White House Office of Public Liaison, and he was soon in demand
among conservative groups nationwide. His remarks in nashville,
quoted from a tape obtained by the Washington Post, were to the
Council for National Policy, a group of about 500 influential
conservatives including Colorado Brewer Joseph Coors, Texas
Millionaire Nelson Bunker Hunt and the Rev. Jerry Falwell.
"Ollie let you know what is really going on in Central America,"
says Bradley Keena, political director of the Leadership
Foundation, another conservative lobby. "Nobody really knew
like Ollie knew."

Some suggest that North may have done more than just rally the
right to the contra camp. The Lowell (Mass.) Sun charged last
week that $5 million from the sales of U.S. arms to Iran, which
North had helped engineer, had been funneled to right-wing
groups that included the relatively unknown National Endowment
for the Preservation of Liberty. The money, said the Sun, was
used "to boost conservative candidates in the U.S. and to oppose
critics of the Reagan Administration's Central American policy."
No other news organization has confirmed the story, which the
endowment's director, Carl ("Spitz") Channell, denounced as
"outrageous, libelous lies."

Channell, 41, runs a total of nine foundations and
political-action committees for right-wing causes. He has
raised money from such well-known conservative donors as Ellen
Garwood of Austin, who once gave a helicopter to the contras.
At a dinner in Washington's Willard Hotel on Nov. 11, North
presented Channell with a thank-you letter from Ronald Reagan,
expressing the President's appreciation for Channell's
pro-contra efforts. When Congress was debating a resumption of
military aid to the contras, earlier this year, Channell's
Liberty endowment boasted that it would spend more than $2.5
million "in support of our President' accurately reasoned
policies regarding the threat that Communist Nicaragua now
poses." Last week Channell declared that all of his
organizations' funds were "solicited from patriotic American
citizens."

Few White House staffers believe North would have involved
himself in specific political campaigns. His expenses on the
speech circuit were usually paid for by his private hosts.
Members of these organizations say North would leave before the
fund-raising pitches began. The White House aide seemed careful
to keep within legal limits. "I can't tell you what you should
do" was how he frequently prefaced his remarks. "You know
what's out there, what the contras face."

L. Francis Bouchey, a Council for National Policy member, says
North was a "very effective speaker" but not the master
strategist for coordinating the private contra-aid efforts. "I
would call Ollie and bounce ideas off him," says Bouchey, "but
he was very busy and not really that helpful."