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U.S. Arms-to-iran Disclosures to Change Case Against 4 Israelis

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The Justice Department will review the case of four Israelis charged here with conspiracy to sell American weapons to Iran to determine if their action was part of a covert operation by the U.S. government, a spokesman said.

The Department, which is prosecuting the case, will prepare arguments that will incorporate the recent revelations about the U.S. government’s role in arms sales to Iran, according to John Russell, a Justice Department spokesman.

Meanwhile, a federal judge in Manhattan is scheduled to hear motions Monday to dismiss the charges against the Israelis and their 13 co-defendants on grounds of entrapment, prejudicial pretrial publicity and lack of jurisdiction for the case in New York.

The 17 were indicted in April on charges of conspiracy to resell to Iran some $2.5 billion worth of surplus American military hardware, part of which was already in Israel.

Defense attorneys in the case have made numerous counterclaims in which they contend top U.S. officials including Vice President George Bush, Marine Corps Commandant General P.X. Kelley and Defense Secretary Caspar Weinberger approved the arms deal under dispute in this case.

All the government parties have denied their involvement, and the U.S. attorney’s office has filed papers claiming the U.S. government has not sold arms to Iran in recent years. But Wednesday, President Reagan acknowledged that such sales took place within the past year.

NEW LIGHT SHED

The recently disclosed evidence that the American government cooperated with Israel and international arms dealers such as the defendants in the case shed new light on the attorneys’ counterclaims.

In yet another related development, Elliot Richardson, former U.S. Attorney General, told the press Wednesday that he arranged a contact between American officials and an “influential Iranian expatriate” named Cyrus Hashemi last year in efforts to free American hostages in Lebanon.

Hashemi, who died in July, was the government’s key witness in the case against the Israeli arms dealers. Hashemi posed as an arms procurement agent for the Iranian government but actually was recording phone conversations and meetings with the defendants to help the U.S. Customs Service and the U.S. Attorney’s office gather evidence for their April indictment.

A defense attorney said that Richardson, who served as Attorney General during the Nixon Administration, represented Hashemi during 1983-84 after he was indicted in the U.S. for selling American weapons to Iran.

In an earlier series (Oct. 21, 22 and 23), JTA reported that Hashemi was brought from London to meet then-President Jimmy Carter and his aides in 1980 after claiming he could help free the hostages held in Teheran following the seizure of the American embassy there.

But an FBI surveillance of his room uncovered that he was expediting the sale of millions of dollars of American arms to Iran, thus the indictment.

ISRAELIS SAID TO HAVE SOUGHT EXCHANGE

Arms in exchange for hostages also played a role in this case. According to defense papers, the Israeli defendants presented Hashemi with names of three Israeli prisoners of war being held in Lebanon and tried to negotiate an arms-for hostages trade.

“This just shows that the Israeli authorities were thinking along the same lines as the Americans,” one defense attorney said.

Among the Israelis arrested in Bermuda, where they thought they were going to sign a contract for the arms deal, was Brig. Gen. Avraham Bar-Am, a retired senior IDF officer who carried a letter authorizing him to negotiate arms sales. The other three defendants, Israel and son Guri Eisenberg and William Northrop reportedly worked with Bar-Am.

Prosecuting U.S. Attorney in the case, Loma Schofield had no comment on how the recent developments would affect her case.

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