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Israeli Leaders Insist That Israel Did Not Transfer Funds to the Contras

Israeli leaders voiced strong assurances Tuesday that Israel had nothing to do with the transfer of funds from American arms sales to Iran to the Contra rebels in Nicaragua. But some Knesset members persisted in their charges that Israel was involved and assailed Israeli arms sales abroad in general. The sales were defended by Defense Minister Yitzhak Rabin.

Premier Yitzhak Shamir told reporters here that Israel has informed the U.S. government and hopefully American public opinion that there was no link between the government of Israel and the Contras.

“Israel has never helped or assisted the Contras in Central America,” he said. He hoped that the investigations to be carried out in the U.S. will reach the same conclusion and lay the matter to rest.

Vice Premier and Foreign Minister Shimon Peres categorically denied that Israel reaped financial gains from the re-sale of American weapons to Iran with the specific approval and at the request of the Reagan Administration. He insisted, at a gathering in Pardes Hanna, that if any money paid by Iran reached the Contras, it was without Israel’s Knowledge.

“Representatives of Israel” were alleged by U.S. Attorney General Edwin Meese at a White House press conference last week to have transferred $10-$30 million of the money paid by Iran for the arms to a Swiss bank account maintained by the Contras, the Reagan Administration-backed rebels trying to overthrow the Sandinista government of Nicaragua.

President Reagan, who claims he was not informed that Iranian money was going to the Contras, said in an interview with Time magazine November 26 that “Another country was facilitating those sales of weapons systems” and “They then were overcharging and were apparently putting the money into bank accounts of the leaders of the Contras.”

Reagan did not name the other country, white House Press secretary Larry Speakes said Monday that Reagan was not implicating Israel because he Knows nothing about the secret bank account set up for the Contras in Switzerland.

TWO KNESSET MOTIONS STRUCK DOWN

MK Chaika Grossman of Mapam charged Tuesday that Israeli instructors were helping the Contras and Israeli arms dealers were supplying them with weapons. She said she based her information on a recent visit to Nicaragua where she met with Sandinista officials.

The Knesset struck from its agenda Tuesday two motions to debate the sale of arms by Israel to Third World countries. MK Matityahu Peled of the Progressive List for Peace said Israel was ashamed of its arms customers and they were ashamed of Israel, a reference to the virulently anti-Israel regime of the Ayatollah Ruhollah Khomeini in Teheran.

Peled said that was why the arms deals were kept secret until they leaked out abroad. He said the Israeli arms industry was overgrown and therefore hungry for new markets.

Rabin, speaking for the government, conceded that the defense industry had to export to survive but he noted that the proportion of Israeli weapons being used in the Iran-Iraq war was insignificant compared to those of the Soviet Union and other powers.

Rabin also vigorously denied that Israel was providing military aid to the Contras. Israel supplies neither arms, money nor know-how and has not authorized anyone else to supply arms, money or know-how or any other aid to the Contras, he said. He reiterated that all Israel has done was to deliver American weapons to Iran and the request of the American administration.

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