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‘representatives of Israel’ Said to Have Deposited Some of the Money Iran Paid for U.S. Arms into Sw

Some $10-$30 million of the money Iran paid for arms received from the United States were deposited by “representatives of Israel” in Swiss bank accounts set up by the Contras, the forces fighting the Sandinista government in Nicaragua, Attorney General Edwin Meese revealed Tuesday.

Meese said the money was the amount Iran paid over the $12 million cost of the weapons which were transferred from the Department of Defense.

His revelation was made at the White House after President Reagan announced that Vice Admiral John Poindexter, his National Security Advisor, asked that he be allowed to return to the Navy and that Marine Corps Lt. Col. Oliver North has been fired from the National Security Council staff.

Meese said that North, who was involved in the secret negotiations with Iran, knew of the funds transfer from the beginning and that Poindexter knew of it “generally” but not its details.

The President did not know anything about it until Monday morning when he was informed by Meese, according to the Attorney General. He said it was discovered when the Justice Department went over the documents of the Iranian negotiations and found some discrepancies.

He said no other U.S. official knew about the fund transfer, although Robert McFarland, the former National Security Advisor who conducted the secret negotiations with Iran, found out about it last spring.

Meese said the situation is still being investigated and he did not know whether the Israeli government officially knew about the deposits. He said the negotiations on the cost of the arms were conducted by representatives of Israel and Iran with no Americans present.

ISRAELI SHIPMENTS DESCRIBED BY MEESE

During the course of his briefing, Meese confirmed for the first time publicly Israel’s participation in the negotiations with Iran. He said the negotiations were suggested by Israel and “all the shipments in which the United States was involved were made through Israel.” He maintained this did not violate any U.S. law.

Meese said Israel made two shipments of arms to Iran on its own, one in August or September 1985 and one in November 1985. The second shipment was sent back by Iran. The U.S. “condoned” both shipments after the fact, Meese said.

There was no immediate comment from the Israel Embassy here. (See related story for reaction in Jerusalem.)

Reagan stressed that, as he has repeatedly said “I believe our policy goals toward Iran were well-founded. However, the information brought to my attention yesterday (Monday) convinced me that in one aspect, implementation of that policy was seriously flawed.”

The President left before Meese explained what the flaw was. The Attorney General said that the transfer of funds took place this year before the current fiscal year began October 1 at a time when Congress had not authorized any funds for the Contras to be used for military supplies. Meese said his investigation is continuing as to whether any laws were violated.

Reagan also said he plans to appoint a special review board to study the role and procedures of the National Security Council. No successor to Poindexter has been named. His deputy, H. Alton Keele, will serve as acting director of the National Security Council.

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