The Man Who Ran the Show

By GEORGE J. CHURCH

For months the story had been coming out in fragments, pieced together by investigators from closed-door testimony and messages; the public saw the major players only as disembodied words on paper. But last week the Iran- contra affair finally put on flesh and acquired a breathing presence. A stocky, round-faced figure appeared on the TV screen to state in effect: I was there, it really happened, and this is what I did.

That was perhaps the major impact of Richard Secord's testimony, which occupied the entire first week of public hearings by the joint congressional committee investigating the most explosive political scandal in a decade. Testifying primarily in the unemotional tones of a math professor but occasionally displaying flashes of deadpan wit and, under cross-examination, an acerbic temper, the retired Air Force major general described for four days how he organized and ran a private network that at the Government's behest secretly supplied arms to the contras in Nicaragua and later to Iran. Much of the story had been told before, most notably in the scathing February report of the Tower commission. But for the first time, the public was hearing it as a consecutive narrative from the lips of a major player -- a very self- confident participant who testified voluntarily, without immunity from prosecution, on the frequently stated conviction that he had done nothing wrong.

In detailing the elaborate private network that was set up by Oliver North to funnel arms to the contras and initiate the failed weapons-for-hostages deals with Iran, Secord painted a picture that was far more horrifying than he seemed to realize. It showed the scope of the Administration's deceit in circumventing the congressional ban on military aid to the contras and the depths of its hypocrisy in violating the Government's proclaimed policy against dealing with terrorists. Secord also showed, again with little awareness of its significance, how dangerous it can be when the Government seeks to avoid constitutional constraints by allowing a group of freewheeling private operatives to conduct a secret foreign policy with American weapons and funds.

Among the most important of his revelations:

-- Secord heard from North that Ronald Reagan knew about the diversion of profits from the Iranian arms sales to the contras. North told Secord that "in some conversations" he had mused to the President about the irony of having the Ayatullah Ruhollah Khomeini unwittingly finance the Nicaraguan guerrillas. But given North's reputation for embellishing or even inventing conversations between the President and himself, should what he told Secord be believed? "I did not take it as a joke," said Secord. Nonetheless, he said he was "skeptical" about North's report of the conversations, because "it did not sound like the kind of conversation you would have in the office of the Commander in Chief." Reagan, questioned by reporters at a ceremony in the White House Rose Garden, growled, "I did not know about" the possibly illegal diversion.

-- Secord described his contra supply operation to William Casey, then director of the CIA, at three meetings during the period when any Government assistance to the Nicaraguan rebels was forbidden by Congress. One of those meetings was held in the White House. Casey approved of the supposedly private arms operation. In an interview with TIME last December, which turned out to be his final public comment on the affair before he was hospitalized for a brain tumor, Casey insisted, "We were barred from being involved with the contras, and we kept away from that." Secord said he doubted Casey knew about the diversion of profits from Iranian arms sales to the contras. But his testimony about his meetings with Casey and about the assistance that CIA operatives in Central America gave to the contra supply operation indicates that the agency, contrary to Casey's denials, was deeply involved in the illegal supply activities. Casey will never get the chance to clarify his role: he died last Wednesday, on the second day of Secord's testimony.

-- Only about $3.5 million of the $30 million that Iran paid for U.S. weapons was spent to assist the contras. Another $1 million was spent on other covert activities that Secord would not fully describe, and $2 million is still unaccounted for. Nearly $8 million is sitting in frozen Swiss bank accounts controlled by Secord's business partner, the Iranian-born Albert Hakim. What will eventually happen to this money is uncertain.

-- When the story of the arms sales to Iran began breaking last November and Reagan had to say something publicly, Secord took it upon himself to draft a speech for the President, unapologetically laying out most of the facts about the supply of arms to both Iran and the contras (though not the money connection between the two). Secord sent the draft to North. But North told him someone in the White House -- he did not say who -- had rejected the draft as "too hard." Reagan's eventual speech, delivered last Nov. 13, was unconvincingly vague about the Iran deals and did not mention the contras at all.

-- On Nov. 25, the day Attorney General Edwin Meese made public the Iran- contra connection and North was fired from the National Security Council staff, North and Secord met in a Virginia hotel room that Secord had rented to talk things over. North received two phone calls: the first from Vice President George Bush, the second from the President who had just dismissed him. (North, a Marine lieutenant colonel, stood at attention to receive the call from Reagan.) So far as Secord could tell, both expressed regret and thanked North for his efforts.

These and other portions of Secord's tale remain to be confirmed, challenged or expanded by subsequent witnesses, prominently including former National Security Adviser Robert McFarlane, who will testify this week; Hakim, who has the most detailed records of the maze of Swiss bank accounts through which Iranian and contra arms money flowed; and eventually North. But only one or two of these witnesses will be in a position to give testimony as detailed and sweeping as Secord's.

The procedure followed by the House and Senate select committees, which are sitting as a joint body, resembled a good-cop-tough-cop routine. Secord was first questioned for two days by John Nields, counsel for the House panel, who for the most part tried simply to elicit the former general's basic story by posing questions of the please-describe-that-meeting variety. Secord related that North had asked him in the summer of 1985 to put together a private network to take over the delivery of arms to the contras after Congress had $ passed its ban. Just as he was getting his group of ex-military officers and CIA men together, Secord asserted, North called on him in November 1985 to rescue a shipment by Israel of U.S.-made arms to Iran that had run into snags in Portugal. That led to some quasi-diplomatic assignments, meeting with Iranian Middleman Manucher Ghorbanifar to hear his proposals for the exchange of U.S. weapons for American hostages (or "boxes," as Ghorbanifar termed them in a particularly repulsive code word) held in Lebanon. In early 1986 Secord was designated, in his words, as "the commercial cutout" to arrange the secret delivery of more weapons from U.S. stockpiles to Iran.

In his matter-of-fact tones, Secord added some intriguing touches of cloak- and-daggery to this recital. At one point, he brought his partner Hakim to a meeting with Ghorbanifar as a translator, but since Ghorbanifar already knew Hakim and considered him an "enemy of the ((Iranian)) state," Secord dressed up the bald Hakim in a wig and glasses and passed him off as a Turk. "It flew," said Secord laconically. At another point, Secord considered Ghorbanifar so untrustworthy that he told the Iranian middleman he would recommend to the U.S. Government that Ghorbanifar be "terminated." Recounted Secord, with the barest ghost of a smile: "He misinterpreted that." The Senate Caucus Room broke up in laughter.

After Nields' basic questioning, Senate Committee Counsel Arthur Liman conducted what amounted to a withering cross-examination, speaking in deceptively mild tones but homing in repeatedly on sticky issues. Secord rapidly lost his composure, once snapping at Liman, "Let's get off the subject!" in the voice of a general barking at a lieutenant. "You making the rulings?" Liman inquired mildly. "No, sir," replied Secord. "But I did not come here to be badgered."

Liman, and legislators who took over the questioning Thursday afternoon and Friday, pursued three main lines of inquiry:

1) Was Secord, as he claimed, a disinterested patriot acting at Government request to attain what he thought were worthy foreign policy goals? Or was he out for profit? Secord repeatedly insisted that from mid-1985 on he "forswore" any profit. Liman pressed Secord about closed-door testimony taken previously from Robert Dutton, an associate in the contra supply network. Dutton had said Secord considered selling the network's assets, which eventually included five aircraft and facilities in El Salvador and Costa Rica, to the CIA for $4 million. Wrong, said Secord: he intended, once Congress permitted a resumption of open Government military aid to the contras, as it did last October, to donate the assets to the CIA free.

Another bone of contention was the $7.9 million paid by Iran for U.S. weapons and left in Swiss accounts. Legislators contended that it is Government property, since it derives from the sale of federal assets. Secord insisted that it properly belonged to the "enterprise," meaning essentially Hakim and him. Under that interpretation, observed House Counsel Nields, "you could have gone off and bought an island in the Mediterranean." Yes, said Secord, "but I did not go to Bimini." The allusion to Gary Hart's troubles set off a gale of laughter. Secord eventually asserted that he intended to donate his share of any money that might be left after paying bills to a fund being established in memory of Casey to aid the contras. In response, Republican Senator Warren Rudman of New Hampshire sternly warned the erstwhile covert operator that he did not have a "right to send that money anywhere. That money belongs to the people of the United States." A G.O.P. Senate colleague, Paul Trible of Virginia, told Secord later, "I think you're both patriot and profiteer."

2) Did Secord's activities, and those of Government officials who assisted him, violate the law? The principal statute at issue is the Boland amendment, which from October 1984 to October 1986 banned direct or indirect Government military aid to the contras. Secord insisted that the Boland amendment did not apply to private citizens like him unless those citizens used money appropriated by Congress, which Secord said they did not do. He testified, however, that his network had received extensive help from Government officials; in addition to North, who oversaw the whole operation, these included several CIA agents and former Ambassador to Costa Rica Lewis Tambs. Democratic Congressman Louis Stokes of Ohio pointed out that all drew Government salaries paid out of appropriated funds. Committee members appeared to be trying to build a record that Independent Counsel Lawrence Walsh might use to indict Secord for conspiracy to violate the Boland amendment.

3) Legality aside, was it proper for the Government to pursue important foreign policy goals by enlisting private citizens who operated with no accountability to Congress or the public? This all-important question did not ! get the attention it deserved, but testimony did bring out that Secord operated what amounted to his own air force, with its own sources of funding and its own communications network, a set of encryption devices supplied by North. Democratic Senator David Boren of Oklahoma pressed Secord hard to admit he was in effect running his own foreign policy. Secord conceded that his role was "very strange" but insisted that he had operated with the full knowledge and approval of Government officials, primarily North but also Casey and National Security Advisers McFarlane and John Poindexter. In fact, Secord earlier in the hearings said, "I was told by Admiral Poindexter in January of '86 that not only was he pleased with the work that I had been doing, but the President was as well." The former general admitted, however, that he had once defied Government policy. Last August, North's deputy, Lieut. Colonel Robert Earl, directed him to shut down the portion of his contra-supply operation run out of El Salvador because that country's government was getting nervous about it. Secord refused on the ground that El Salvador was vital to the whole operation, and continued to have planes take off from there to drop arms by parachute to the contras in Nicaragua.

As television theater, the first week of hearings was marred by endless haggling over the whereabouts of small sums of money, some inconclusive legal wrangling and some regrettable oratorical grandstanding by committee members. Nonetheless, the story is riveting, the conduct of the committee on the whole serious and dignified, and the essential subject one of the most vital imaginable: nothing less than the accountability of the Government to its citizens under its own laws. After months of rumor, surmise and agonized mystery, the nation is at last starting to hear the full Iran-contra story from the participants. As further witnesses testify about the remaining puzzles of the linked arms operations, the hearings should be an absorbing, occasionally dry and legalistic, but always vital show right through the summer.

CHART: Text not available.

CREDIT: TIME Chart by Cynthia Davis

CAPTION: MONEY TRAILS

How the Iranian money was spent, according to Secord's testimony

DESCRIPTION: Color illustrations.

With reporting by Michael Duffy and Hays Gorey/Washington