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Full text of "Report of the congressional committees investigating the Iran- Contra Affair : with supplemental, minority, and additional views"

Y l.l/2:Serial 13757 

United States Congressional... 



Government 
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100th Congress — 1st Session • January 6-December 22, 1987 



Senate Report 

No. 216 




IRAN-CONTRA INVESTIGATION 

APPENDIX B, VOLUME 16 
DEPOSITIONS 



United States Congressional Serial Set 

Serial Number 13757 



United States Government Printing Office 
Washington : 1989 



Union Calendar No. 277 
100th Congress, 1st Session 
S. Rept. No. 100-216 H. Rept. No. 100-433 



Report of the Congressional Committees Investigating the 

Iran-Contra Affair 

Appendix B: Volume 16 
Depositions 



Daniel K. Inouye, Chairman, 
Senate Select Committee 

Lee H. Hamilton, Chairman, 
House Select Committee 



U.S. Senate Select Committee U.S. House of Representatives 

On Secret Military Assistance to Iran Select Committee to Investigate 

And the Nicaraguan Opposition Covert Arms Transactions with Iran 

November 13, 1987. - Committed to the Committee of the Whole House 

on the State of the Union and ordered to be printed. 

November 17, 1987. -Ordered to be printed. 



Washington : 1988 



BnitEd 3tatE5 Senate 

SELECT COMMITTEE ON SECRET MILITARY 

ASSISTANCE TO IRAN AND THE NICARAGUAN OPPOSITION 

WASHINGTON. DC 20510-6480 



March 1, 1988 

Honorable John C. Stennis 
President pro tempore 
United States Senate 
Washington, D.C. 

Dear Mr. President: 

We have the pleasure to transmit herewith, pursuant to 
Senate Resolution 23, Appendix B to the final Report of the 
Senate Select Committee on Secret Military Assistance to Iran 
and the Nicaraguan Opposition. We will submit such other volumes 
of Appendices to the Report as are authorized and as they become 
available. 



Sincerely, 




Warren B. Rudman 
Vice Chairman 




III 



U.S. HOUSE OF REPRESENTATIVES 

SELECT COMMITTEE TO INVESTIGATE 

COVERT ARMS TRANSACTIONS WITH IRAN 

UNITED STATES CAPITOL 

WASHINGTON. DC 20515 

(202) 22S-7902 

March 1, 1988 



The Honorable Jim Wright 
Speaker of the House 
U. S. Capitol 
Washington, D. C. 20515 

Dear Mr . Speaker : 

Pursuant to the provisions of House Resolutions 12 and 
330 and House Concurrent Resolution 195, 100th Congress, 1st 
Session, I transmit herewith Appendix B to the Report of the 
Congressional Committees Investigating the Iran-Contra Affair , 
House Report No. 100-433, 100th Congress, 1st Session. 

Appendix B consists of the depositions taken by the 
Select Committees during the investigation. The contents of 
Appendix B have been declassified fqj-vrelease to the public. 




Lee H. Hamilton 
Chairman 



United States Senate 

Select Committee on Secret Military Assistance 
To Iran and the Nicaraguan Opposition 

Daniel K. Inouye, Hawaii, Chairman 
Warren Rudman, New Hampshire, Vice Chairman 

George J. Mitchell, Maine 

Sam Nunn, Georgia 
Paul S. Sarbanes, Maryland 
Howell T. Heflin, Alabama 
David L. Boren, Oklahoma 

James A. McClure, Idaho 

Orrin G. Hatch, Utah 

William S. Cohen, Maine 

Paul S. Trible, Jr., Virginia 



Arthur L. Liman 
Chief Counsel 

Mark A. Belnick Paul Barbadoro 

Executive Assistant Deputy Chief Counsel 

To the Chief Counsel 

Mary Jane Checchi 
Executive Director 

Lance I. Morgan 
Press Officer 



VI 



United States House of Representatives 

Select Committee to Investigate Covert Arms 
Transactions with Iran 

Lee H. Hamilton, Indiana, Chairman 
Dante B. Fascell, Florida, Vice Chairman 

Thomas S. Foley, Washington 

Peter W. Rodino, Jr., New Jersey 

Jack Brooks, Texas 

Louis Stokes, Ohio 

Les Aspin, Wisconsin 

Edward P. Boland, Massachusetts 

Ed Jenkins, Georgia 

Dick Cheney, Wyoming, Ranking Republican 

Wm. S. Broomfield, Michigan 

Henry J. Hyde, Illinois 

Jim Courier, New Jersey 

Bill McCollum, Florida 

Michael DeWine, Ohio 



John W. Nields, Jr. 
Chief Counsel 

W. Neil Eggleston 
Deputy Chief Counsel 

Kevin C. Miller 
Staff Director 



Thomas R. Smeeton 
Minority Staff Director 

George W. Van Cleve 
Chief Minority Counsel 

Richard J. Leon 
Deputy Chief Minority Counsel 



VII 



United States Senate 



Select Committee on Secret Military Assistance to 
Iran and the Nicaraguan Opposition 



Arthur L. Liman 
Chief Counsel 
Mark A. Belnick Paul Barbadoro 

Executive Assistant Deputy Chief Counsel 

to the Chief Counsel 

Mary Jane Checchi 
Executive Director 

Lance I. Morgan 
Press Officer 

Associate Counsels 



C. H. Albright, Jr. 
Daniel Finn 
C. H. Holmes 
James E. Kaplan 
Charles M. Kerr 
Joel P. Lisker 



W. T. McGough, Jr. 
Richard D. Parry 
John D. Saxon 
Terry A. Smiljanich 
Timothy C. Woodcock 



Committee Staff 



Assistant Counsels 



Legal Counsel 
Intelligence/Foreign 

Policy Analysts 
Investigators 



Press Assistant 
General Accounting 
Office Detailees 



Security Officer 
Security Assistants 



Chief Clerk 
Deputy Chief Clerk 



Steven D. Arkin* 
Isabel K. McGinty 
John R. Monsky 
Victoria F. Nourse 
Philip Bobbitt 
Rand H. Fishbein 
Thomas Polgar 
Lawrence R. 

Embrey, Sr. 
David E. Faulkner 
Henry J. Flynn 
Samuel Hirsch 
John J. Cronin 
Olga E. Johnson 
John C. Martin 
Melinda Suddes* 
Robert Wagner 
Louis H. Zanardi 
Benjamin C. 

Marshall 
Georgiana 

Badovinac 
David Carty 
Kim Lasater 
Scott R. Thompson 
Judith M. Keating* 
Scott R. Ferguson 



Staff Assistants 



Administrative Staff 



Secretaries 



Receptionist 
Computer Center 
Detailee 



John K. Appleby 
Ruth Balin 
Robert E. Esler 
Ken Foster* 
Martin H. Garvey 
Rachel D. Kaganoff* 
Craig L. Keller 
Hawley K. 

Manwarring 
Stephen G. Miller 
Jennie L. Pickford* 
Michael A. Ray nor 
Joseph D. 

Small wood* 
Kristin K. Trenholm 
Thomas E. Tremble 
Bruce Vaughn 
Laura J. Ison 
Hilary Phillips 
Winifred A. Williams* 
Nancy S. Durflinger 
Shari D. Jenifer 
Kathryn A. Momot 
Cindy Pearson 
Debra S. Sheffield* 
Ramona H. Green 
Preston Sweet 



VIII 



Committee Members' Designated Liaison 



Senator Inouye 
Senator Rudman 

Senator Mitchell 

Senator Nunn 

Senator Sarbanes 
Senator Heflin 



Peter Simons 
William V. Cowan 
Thomas C. Polgar 
Richard H. 
Arenberg 
Eleanore Hill 
Jeffrey H. Smith 
Frederick Millhiser 
Thomas J. Young 



Senator Boren 

Senator McClure 
Senator Hatch 

Senator Cohen 

Senator Trible 



Sven Holmes 
Blythe Thomas 
Jack Gerard 
Dee V. Benson 
James G. Phillips 
James Dykstra 
L. Britt Snider 
Richard Cullen 



Part Time* 



Assistant Counsel 
Hearings Coordinator 
Staff Assistants 



Interns 



Peter V. Letsou 
Joan M. Ansheles 
Edward P. 

Flaherty, Jr. 
Barbara H. Hummell 
David G. Wiencek 
Nona Balaban 
Edward E. 

Eldridge, III 
Elizabeth J. Glennie 
Stephen A. Higginson 
Laura T. Kunian 
Julia F. Kogan 
Catherine L. Udell 



Document Analyst 

Historian 

Volunteers 



Lyndal L. Shaneyfelt 
Edward L. Keenan 
Lewis Liman 
Catherine Roe 
Susan Walsh 



*The staff member was not with the Select Committee when the Report was filed but had, during 
the life of the Committee, provided services. 



IX 



United States House of Representatives 



Select Committee to Investigate 
Covert Arms Transactions with Iran 



Majority Staff 



Special Deputy 

Chief Counsel 
Staff Counsels 



Press Liaison 
Chief Clerk 
Assistant Clerk 
Research Director 
Research Assistants 



John W. Nields, Jr. 
Chief Counsel 

W. Neil Eggleston 
Deputy Chief Counsel 

Kevin C. Miller 
Staff Director 



Charles Tiefer 

Kenneth M. Ballen 
Patrick J. Carome 
V. Thomas 

Fryman, Jr. 
Pamela J. 

Naughton 
Joseph P. Saba 
Robert J. Havel 
Ellen P. Rayner 
Debra M. Cabral 
Louis Fisher 
Christine C. 

Birmann 
Julius M. 

Genachowski 
Ruth D. Harvey 
James E. Rosenthal 



Systems 

Administrator 
Systems 

Programmer/ 

Analysts 
Executive Assistant 
Staff Assistants 



Catherine L. 

Zimmer 
Charles G. Ratcliff 
Stephen M. 

Rosenthal 
Elizabeth S. Wright 
Bonnie J. Brown 
Christina Kalbouss 
Sandra L. Koehler 
Jan L. Suter 
Katherine E. Urban 
Kristine Willie 
Mary K. Yount 



Minority Staff 



Associate Minority 

Counsel 
Assistant Minority 

Counsel 
Minority Research 

Director 



Thomas R. Smeeton 
Minority Staff Director 

George W. Van Cleve 
Chief Minority Counsel 

Richard J. Leon 
Deputy Chief Minority Counsel 



Robert W. 
Genzman 
Kenneth R. Buck 

Bruce E. Fein 



Minority Staff 
Editor/Writer 

Minority Executive 
Assistant 

Minority Staff 
Assistant 



Michael J. Malbin 

Molly W. Tully 

Margaret A. 
Diilenburg 



Committee Staff 



Investigators 



Director of Security 



Robert A. 

Bermingham 
James J. Black 
Thomas N. 

Ciehanski 
William A. Davis, 

m 

Clark B. Hall 
Allan E. Hobron 
Roger L. Kreuzer 
Donald Remstein 
Jack W. Taylor 
Timothy E. Traylor 
Bobby E. Pope 



Security Officers 



Editor 

Deputy Editor 
Associate Editor 
Production Editor 
Hearing Editors 

Printing Clerk 



Rafael Luna, Jr. 
Theresa M. Martin 
Mi'agros Martinez 
Clayton C. Miller 
Angel R. Torres 
Joseph Foote 
Lisa L. Berger 
Nina Graybill 
Mary J. Scroggins 
David L. White 
Stephen G. Regan 
G. R. Beckett 



Associate Staff 



Representative 
Hamilton 

Representative 
Fascell 

Representative 

Foley 
Representative 

Rodino 

Representative 

Brooks 
Representative 

Stokes 
Representative 

Aspin 



Michael H. 

Van Dusen 
Christopher Kojm 
R. Spencer Oliver 
Bert D. Hammond 
Victor Zangla 
Heather S. Foley 
Werner W. Brandt 
M. Elaine Mielke 
James J. 

Schweitzer 
William M. Jones 

Michael J. O'Neil 
Richard M. Giza 
Richard E. Clark 
Warren L. Nelson 



Representative 

Boland 
Representative 

Jenkins 
Representative 

Broomfield 
Representative 

Hyde 
Representative 

Courter 
Representative 

McCollum 
Representative 

DeWine 
General Counsel to 

the Clerk 



Michael W. Sheehy 

Robert H. Brink 

Steven K. Berry 
David S. Addington 
Diane S. Doman 

Dennis E. Teti 

Tina L. Westby 

Nicholas P. Wise 

Steven R. Ross 



XI 



Contents 

Volume 16 



Preface XXI 

Leiwant, David O I 

Lilac, Robert H 77 

Lincoln, Col. James B 273 

Littledale, Krishna S 337 

McDonald, John William 551 

McFarlane, Robert C 609 

McKay, Lt. Col. John C 747 

McLaughlin, Jane E 775 



XIII 



Depositions 



Volume 1 



Airline Proprietary Project Officer. 
Alvarez, Francisco J. 
Allen, Charles. 
Arcos, Cresencio. 



Volume 2 



Volume 3 



Armitage, Richard. 
Artiano, Martin L. 
Associate DDO (CIA). 
Baker, James A., HI. 
Barbules, Lt. Gen. Peter. 
Bamett, Ana. 
Bartlett, Linda June. 
Bastian, James H. 
Brady, Nicholas F. 
Brown, Arthur E., Jr. 



Byrne, Phyllis M. 
Calero, Adolfo. 
Castillo, Tomas ("W"). 
Cave, George W. 
C/CATF. 



Volume 4 

Channell, Carl R. 

Chapman, John R. (With Billy Ray Reyer). 

Chatham, Benjamin P. 

CIA Air Branch Chief. 

CIA Air Branch Deputy Chief. 

CIA Air Branch Subordinate. 

CIA Chief. 

CIA Conmiunicator. 

CIA Identity "A". 



XV 



Volume 5 

CIA Officer. 

Clagett, C. Thomas, Jr. 

Clark, Alfred (With Gregory Zink). 

Clarke, George. 

Clar ridge, Dewey R. 

Cline, Ray S. 

C/NE. 

Cohen, Harold G. 

Volume 6 

Collier, George E. 

Cole, Gary. 

Communications Officer Headquarters, CIA. 

Conrad, Daniel L. 



Volume 7 



Cooper, Charles J. 
Coors, Joseph. 
Corbin, Joan. 
Corr, Edwin G. 
Coward, John C. 
Coy, Craig R 
Crawford, Iain T.R. 



Crawford, Susan. 
Crowe, Adm. William J. 
Currier, Kevin W. 
DCM, Country 15. 
DEA Agent 1. 
DEA Agent 2. 
DEA Agent 3. 
deGraffenreid, Kenneth, 
de la Torre, Hugo. 
Deputy Chief "DC". 



Duemling, Robert W. 
DIA Major. 
Dietel, J. Edwin. 
Dowling, Father Thomas. 
Dutton, Robert C. 
Earl, Robert. 



Volume 8 



Volume 9 



XVI 



Volume 10 



Farber, Jacob. 
Feldman, Jeffrey. 
Fischer, David C. 
Floor, Emanuel A. 
Former CIA Officer. 
Fraser, Donald. 
Fraser, Edie. 
Fuller, Craig L. 



Volume 11 



Furmark, Roy. 

Gadd, Richard. 

Gaffney, Henry. 

Gaffney, Henry (With Glenn A. Rudd). 

Galvin, Gen. John R. 

Gantt, Florence. 

Garwood, Ellen Clayton. 

Gast, Lt. Gen. Philip C. 

Gates, Robert M. 

Glanz, Anne. 



Volume 12 



George, Clair. 
Godard, Ronald D. 
Godson, Roy S. 
Golden, William. 
Gomez, Francis D. 
Goodman, Adam. 
Gorman, Paul F. 
Graham, Daniel O. 
Gregg, Donald P. 
Gregorie, Richard D. 
Guillen, Adriana. 



Hakim, Albert. 



Hall, Wilma. 
Hasenfus, Eugene. 
Hirtle, Jonathan J. 
Hooper, Bruce. 



Volume 13 



Volume 14 



XVII 



Hunt, Nelson Bunker. 
Ikle, Fred C. 
Jensen, D. Lowell. 
Juchniewicz, Edward S. 
Kagan, Robert W. 
Keel, Alton G. 
Kellner, Leon B. 
Kelly, John H. 
Kiszynski, George. 



Koch, Noel C. 
Kuykendall, Dan H. 
Langton, William G. 
Lawn, John C. 
Leachman, Chris J., 
Ledeen, Michael A. 



Jr. 



Volume 15 



Volume 16 



Lei want, David O. 
Lilac, Robert H. 
Lincoln, Col. James B. 
Littledale, Krishna S. 
McDonald, John William. 
McFarlane, Robert C. 
McKay, Lt. Col. John C. 
McLaughlin, Jane E. 



McMahon, John N. 
McMahon, Stephen. 
McNeil, Frank. 
Makowka, Bernard. 
Marostica, Don. 
Marsh, John. 
Mason, Robert H. 



Meese, Edwin IIL 
Melton, Richard H. 
Merchant, Brian T. 
Meo, Philip H. 
Miller, Arthur J. 
Miller, Henry S. 
Miller, Johnathan. 



Volume 17 



Volume 18 



XVIII 



Miller, Richard R. 



Motley, Langhome A. 
Mulligan, David R 
Nagy, Alex G. 
Napier, Shirley A. 
Newington, Barbara. 
North, Oliver L. 
O'Boyle, William B. 
Osborne, Duncan. 
Owen, Robert W. 
Pena, Richard. 
Pickering, Thomas. 
Poindexter, John M. 



Posey, Thomas V. 
Powell, Gen. Colin L. 
Price, Charles H., II. 
Proprietary Manager. 
Proprietary Pilot. 
Radzimski, James R. 
Ramsey, John W. 
Ransom, David M. 



Volume 19 



Volume 20 



Volume 21 



Volume 22 



Raymond, Walter, Jr. 

Regan, Donald T. 

Reich, Otto J. 

Revell, Oliver B. 

Reyer, Billy Ray (See John Chapman). 

Reynolds, William B. 



Volume 23 



Richard, Mark M. 
Richardson, John, Jr. 
Robelo, Alfonso. 
Robinette, Glenn A. 
Rodriguez, Felix I. 
Roseman, David. 



XIX 



Rosenblatt, William. 
Royer, Larry. 
Rudd, Glenn A. 
Rudd, Glenn A. 



(See Henry Gaffney). 



Volume 24 



Rugg, John J. 
Russo, Vincent M. 
Sanchez, Nestor. 
Scharf, Lawrence. 
Schweitzer, Robert L. 
Sciaroni, Bretton G. 
Secord, Richard V. 



Shackley, Theodore G. 
Sigur, Gaston J. 
Simpson, Major C. 
Sinclair, Thomas C. 
Singlaub, John K. 



Slease, Clyde H., IIL 
Smith, Clifton. 
Sofaer, Abraham D. 
Steele, Col. James J. 
Taft, William H., IV. 
Tashiro, Jack T. 
Teicher, Howard. 
Thompson, Paul. 
Tillman, Jacqueline. 



Volume 25 



Volume 26 



Volume 27 



Thurman, Gen. Maxwell. 

Trott, Stephen S. 

Tull, James L. 

Vessey, John. 

Walker, William G. 

Watson, Samuel J., IIL 

Weinberger, Caspar. 

Weld, William. 

Wickham, John. 

Zink, Gregory (See Alfred Clark). 



XX 



Preface 



The House Select Committee to Investigate Covert Arms Transactions with Iran 
and the Senate Select Committee on Secret Military Assistance to Iran and the 
Nicaraguan Opposition, under authority contained in the resolutions establishing 
them (H. Res. 12 and S. Res. 23, respectively), deposed approximately 290 
individuals over the course of their 10-month joint investigation. 

The use of depositions enabled the Select Committees to take sworn responses 
to specific interrogatories, and thereby to obtain information under oath for the 
written record and develop lines of inquiry for the public hearings. 

Select Committees Members and staff counsel, including House minority 
counsel, determined who would be deposed, then sought subpoenas from the 
Chairmen of the Select Committees, when appropriate, to compel the individuals 
to appear in nonpublic sessions for questioning under oath. Many deponents 
received separate subpoenas ordering them to produce certain written documents. 

Members and staff traveled throughout the United States and abroad to meet 
with deponents. All depositions were stenographically reported or tape-recorded 
and later transcribed and duly authenticated. Deponents had the right to review 
their statements after transcription and to suggest factual and technical correc- 
tions to the Select Committees. 

At the depositions, deponents could assert their fifth amendment privilege 
to avoid self-incrimination by refusing to answer specific questions. They were 
also entitled to legal representation. Most Federal Government deponents were 
represented by lawyers from their agency; the majority of private individuals 
retained their own counsel. 

The Select Committees, after obtaining the requisite court orders, granted 
limited or "use" immunity to about 20 deponents. Such immunity means that, 
while a deposed individual could no longer invoke the fifth amendment to avoid 
answering a question, his or her compelled responses— or leads or collateral 
evidence based on those responses— could not be used in any subsequent criminal 
prosecution of that individual, except a prosecution for perjury, giving a false 
statement, or otherwise failing to comply with the court order. 

An executive branch Declassification Committee, located in the White House, 
assisted the Committee by reviewing each page of deposition transcript and some 
exhibits and identifying classified matter relating to national security. Some 
depositions were not reviewed or could not be declassified for security reasons. 

In addition, members of the House Select Committee staff corrected obvious 
typographical errors by hand and deleted personal and proprietary information 
not considered germane to the investigation. 

In these Depositions volumes, some of the deposition transcripts are follow- 
ed by exhibits. The exhibits— documentary evidence— were developed by Select 
Conmiittees' staff in the course of the Select Committees' investigation or were 
provided by the deponent in response to a subpoena. In some cases, where the 
number of exhibits was very large, the House Select Committee staff chose for 
inclusion in the Depositions volumes selected documents. All of the original 



XXI 



exhibits are stored with the rest of the Select Committees' documents with the 
National Archives and Records Administration and are available for public in- 
spection subject to the respective rules of the House and Senate. 

The 27 volumes of the Depositions appendix, totalling more than 30,000 pages, 
consist of photocopies of declassified, hand-corrected typewritten transcripts 
and declassified exhibits. Deponents appear in alphabetical order. 



XXII 



Publications of the Senate and House 
Select Committees 



Report of the Congressional Committees Investigating the Iran-Contra Affair, 
1 volume, 1987. 

Appendix A: Source Documents, 2 volumes, 1988. 
Appendix B: Depositions, 27 volumes, 1988. 
Appendix C: Chronology of Events, 1 volume, 1988. 
Appendix D: Testimonial Chronology, 3 volumes, 1988. 

All publications of the Select Committees are available from the U.S. 
Government Printing Office. 



XXIII 



ffRNOGKAPmC MINOTIS 

Not far OwtiHoM or 



UNCussra 




Cmuntttee Hcarlnfi 
VJB, HOUSB OF REPBESENTAHyBS 

UNClASSra 



cwnci or THB CLm 

OfBn of Ofllctal Bapoftan 



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under provUom of E.0. 12356 
kjr a SMw, hOattoMl Security Council 



82-718 0-88-2 



HXm- HIR1S3002' PACK 1 



RPTS STWM 
DCHN BANNXN 
2 I 00 



UNCUSSIFIED 



DEPOSITION or DAVID 0. LZIHANT 

Tuesday, Jun* 2, 1987 

U.S. Housa oi Rapr*s«ntatlvaa> 

SalAct Coaaltt** to Invastlgat* Covazt 

AZBS Transactions Mith Iran, 
Hashington, D.C. 

Tha CoMMlttaa sat, pursuant to call, at 2<00 p.m., in 
RooB B-352. Rayburn Mousa Of ilea Building, with Thomas 
HcGough praslding. 

On bahali oi tha Housa Salaet Comalttaa ■ Kan Buck, 
Pamala Naughton. 

On bahali oi tha Sanata Salaet Cowilttaa > Thomas 
HcGough, Hank Flynn. 

On bahali oi tha Hitnasss Hr. Parkins oi tha 
Dapartmant oi Justlea. 



untmsro 



NkHE: 
23 
31 
25 
26 
27 
28 
29 
30 
31 
32 
33 
3i« 
35 
36 
37 
38 
39 
>I0 
41 
42 
143 
I4>4 
45 
46 
47 



tIR1S3002 



UNCLASSIFIED 



PAGE 



(Hitn«ss sworn. 1 

nit. HcGOUGH: On tha r^ooxd. 

Hz. Parkins, I aa Tob HcGough izom th« S«n«t« 
Salaet Coaaltt**. Pan Kaughton iroa th* Housa Coaaltt** and 
Kan Buck froa tha Housa Coaaittaa ara also hara. 

So tha raoord is claar, Hr . Parkins, oould you 
stata for tha raoord who you raprasant and who you work for? 

HR. PERKINS: I work ioz tha Dapartaant of Justica 
and I rapzasant Itr . LaiMant. 

MR. HcGOUGH: In his parsonal capacity? 

HR. PERKINS: I raprasant hia in ralation to his 
official acts for tha Dapartaant. 

HR. HcGOUGH' I guass Ma hava had discussions 
bafora with tha Dapartaant of Justica. and our position has 
baan that if you ara raptasanting Kz . LaiMant, if tha 
Dapartaant attornay is raprasanting Hr . LaiMant in his 
parsonal capacity, thay aay pazticipata> but if thay aza 
haza as zapzasantativas of tha Oapaztaant of Justica, than 
undaz tha Mousa zulas, Mhich aza soaaHhat strictar than tha 
Sanata zulas. Ma hava takan a position that zapzasantation 
is not appzopziata, oz attandanea at tha daposition is not 
appzopziata . 

So that tha zacozd is claaz, did anyona alazt you 
that Ma hava baan dzaMing that distinction? 

HR. PERKINS: Yas. 



Plfllalr DadMrifle<i/Releas4l on -^><- '', '^- 
under provhjons ci !i.O. 
;^fcy D. SMo, National Security Council 



MCLASSIFIED 

3.12356 



HIR153002 



UNCLASSIFIED 



PAGE 



NAME 

(48 MR. HcGOUGH: Hhich position ar« you in? 

149 MR. PERKIKS: I aa tapxasanting hla in his parsonal 

50 capacity. 

51 HR. HcGOUGHs Is that accaptabla to you, Hx . 

52 Leiuant? 

53 THE WITNESS: Yas . 

5t( . ns. NAUGHTON: Did you wish that tha contants of 

55 tha daposltlon xamaln confldantlal ox Hill you ualva that 

56 pxlvilaga and allow tha contants oi tha daposltlon to ba 

57 dlsclosad? 

58 THE WITNESS : I will walva pxlvllaga. 

59 EXAniNATION ON BEHALf OF THE SENATE SELECT COHHITTEE 

60 BY HR. ncGOUGH: 

61 fi Mould you stata youx full naaa. plaasa, and spall 

62 It fox tha xacoxd? 

63 A David Owan Laiwant, L-a-1-ti-a-n-t . 

6>4 e Hx. Lalwant. what Is youx data oi bixth? 

65 A rabxuaxy 9. 1955. 

66 fi And how axa you amployad? 

67 A I aM Assistant Unltad Statas Attoxnay In tha 

68 Southaxn Dlstxlot oi Floxlda, locatad In Hlaal . 

69 fi Staxtlng Mlth collaga. could you giva aa youx 

70 aduoatlonal bacKgxound? 

71 A I hava a Bachalox oi Axts ixom Yala Collaga '77, 

72 Juxis Doctox fxoM tha Unlvaxslty oi Callioxnla at BaxKalay, 



DNClASSIfe 



KAME: 

73 
7i» 
7S 
76 
11 
78 
l<i 
80 
81 
82 
83 
8(4 
85 
86 
87 
88 
89 
90 
91 
92 
93 
9M 
95 
96 
97 



HIR153002 



1981 



UNCUSSiFIED 



5 Did you take any tins off btttua«n collAga and law 
school? 

A Yas, I did. 

2 Hhan was that and what did you do? 

A I took tha '77- '78 yaat off. I spant a faw months 
as a ptofassional frisbea playax and I also spant sona tima 
teaching public school in Elizabath, Hew Jatsay. 

6 Starting with your graduation fron law school in 
'81, could you tall ma your employmant history? 

A I was aaployad with tha law firs of Saibar, 
Schlesingar, Satz £ Goldstein in Newark, New Jersey. 

e Nhere in New Jersey? 

A In Newark, New Jersey. And that was from September 
of '81 through July of '83. 

e Has your position there as an associate? 

A Yes, I was an associate. 

S Here you a member of any bar? 

A I was and I am. 

e Hhy did you leave Salbex, Schlealngex. Satz £ 
Goldstein? 

A I didn't like the way the firm was run and didn't 
faal I was getting enough responsibility and court time. 

S Hhere did you go at that point? 

A I took about five — I was traveling, traveled fox 



midssm 



KANE 

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UNCLASSin[D -. 



HIR153002 IIIVIil U.l.^BI II II PAGE 5 
ioui 01 fiva months and I was intftxviawing with U.S. 
Attoznays' Oiiicas and othat prosacutozlal agancxas and 
started work ior tha U.S. Attorney's Oiilca in Hiaai in 
February of '8H. 

fi Who was the U.S. Attorney when you began your 
employnent ? 

A Stanley Marcus . 

S Did you at that tine becone a aambar of the Florida 
Bar? 

A I was already a meaber of the Florida Bar. I 
became a member of the Florida Bar in June of '83. 

e You left Saiber Schlesingar whan in '83? 

A In July. 

2 So there was approximately on* year between tha 
time you left the law firm until you — 

A No. There was approximately seven months. I spent 
three of those months traveling in Europe and one month 
traveling in tha Far East. 

fi And I presume that you have bean with tha U.S. 
Attorney's Office as an Assistant U.S. Attorney since that 
time? 

A Yes. 

fi What was tha position you took with tha U.S. 
Attorney's Office, if it had a title, when you first went to 
the U.S. Attorney's Office? What section ware you in or 



uNCussra 



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lUO 

mi 
m2 

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HIR153002 



UNCLASSIFIED 



what division? 

A I Mas in tha Appaals Division. I was originally 
supposad to ba tampotarily in tha Appaals Division and than 
going into tha Crininal Division, but I stayad in tha 
Appeals Division, of which I an still a aambaz . 

fi You say you wata originally — it was supposad to ba 
tanporary. Was that by agraamant with Hr . Marcus? 

A Yas . Hhan I had baan hirad, I was told I would go 
diractly into a naw trials unit. Hhan I got to Hiani, thay 
said that thay had changad thaiz policy and wara now 
rotating all naw attornays through tha Appaals Division. 

I found that I anjoyad appaals and was good at it, 
and thay likad my work, so I stayad in appaals. 

2 Do you handla both civil and criminal appaals? 

A Yas. but primarily criminal. 

fi Do you do any trial work in addition to your 
appallata work? 

A Occasionally, but vary raraly. 

fi Undar what eircumstancas would you do trial work? 

A Hhan I somatimas do motions for othar paopla who 
hava big casas. or if thara is a lagal issua. 

I am doing a Saction 2255 motion in tha District 
Court right now which was assignad to ma bacausa tha 
undarlying casa had oceurrad fiftaan yaars ago and tha ~r j,j 
attornay was — ha wa s n o- l o n g aB -^rtr-fc h a « i it€m. 



j/^: ^ 



UNCUSSIFIED 



UNCLASSIFIED 



KANE: HIR153002 U | f VLflUU I ■ l%mW PAGE 7 

1>48 . So I sonAtimas pick up things, orphan casas and 

m9 things lika that. 

150 fi Hava you avai baan involvad as an Assistant U.S. 

15 1 Attornay in an ongoing criminal invastigatlon? 

152 A How aKactly do you maan that? 

153 S Hava you avar had rasponslbillty within tha U.S. 
15M Attornay's Oifica ior an ongoing oriainal invastigatlon? 

155 A I hava navar had primary rasponslbillty. I hava 

156 Horkad with othars who do hava primary rasponslbillty. 

157 fi Hho Is your Immadlata suparvisor? 

158 A Linda Collins Hartz is tha Chlai oi tha Appaals 

159 Division. 

160 fi Has sha your suparvisor in Fabruary of '8*( whan you 

161 jolnad — 

162 A Yas. sha was. 

163 fi Doas sha raport dlraotly to tha U.S. Attornay? 

16>t A I baliava so. Z am not axaotly sura hoM It works. 

165 fi Thara oama a tima> did thara not> whan Kr . Harous 

166 lait tha oiilca and Kr . Kallnar w«s appolntad acting U.S. 

167 Attornay? 

168 A Xas. 

169 fi Do you ramambar approximataly whan that was? 

170 A Approximataly August of '85, I baliava, but I could 

171 ba wrong. 

172 fi Prior to that tlaa had you woxkad at all undar Mr. 



UNCUSSIFIED 



10 



UNCUSSIFIED 



NAnE= HIR153002 

173 Kalln«z? 
1714 k Not zaally. Ha u«s the Ex«outlv« tssistant and as 

175 such didn't raally hava any casa zasponsiblllty that I was 

176 awaxa of. I don't ballava I wozkad undar hla. 

177 S kitaz Hz. Kallnat baoaaa U.S. kttoznay oz acting 

178 U.S. Attoznay, did youz zasponslbilltlas oz dutlas in tha 

179 oifica changa in any way? 

180 A No. 

181 fi You know, of oouzsa. an Assistant U.S. Attornay by 

182 tha naaa of Jaffzay faldaan? 

183 A Yas, I do. 

18U fi Mava you avaz wozkad Mlth Hz. Faldaan on any 

185 aattaz? 

186 A Hhan Hz. faldaan antazad tha offlca> ha zotatad 

187 thzough tha Appaals Division and I supazvisad hia on soma 

188 appaals, and Z hava answazad trial quastions ha has had 

189 sinca ha has aovad into tha Tzial Division. I think that is 

190 pratty auoh it. 

191 fi Did thaza ooaa a tiaa in — X baliava it was aarly 

192 '86 — whan you had contact with a oasa that — lat's call it tha 

193 Garcia casa> Nz. Gazcia baing tha oziginal infozaant who 
19<4 ZAlsad allagations of an assassination plot and gun-running 

195 that zasultad in an ultimata invastlgation? Old thaza ooaa 

196 a tiaa in aazly '86 whan you had soaa contact with that 

197 easa? 



UNCUSSIFIED 



11 



Hint 

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HIR1S3002 



UNCLASSIFIED 



PAGE 



A U«ll, I did not know it as tha Gatcia casa . 

fi But you know tha casa to which I rafat? 

A Yas. 

I had paripharal contact with tha invastigatlon. 

fi Mom do you rafar to tha casa. if at all? 

A I zaally hava navaz had a nana for it. 

C Calling it. just for lack of a battaz tara, tha 
Gazcia casa, can you tall aa what your iizst contact was 
with it, whan it iizst caaa to youz attantion? 

A Yas. I baliava it was Friday. April M. 1986. I was 
working, praparing for an oral arguaant in tha library at 
tha U.S. Attornay's Offica. It was dafinltaly aftar S'OO — it 
might havk baan around 6:00--and Ana Barnatt oaaa into tha 
library and saw aa working at tha juris ooaputar. 

e Hho is Ana Barnatt? 

A Exacutiva Assistant at tha U.S. Attornay's Offica. 
Sha said that Hr . Kallnar naadad to saa a copy of 
tha Boland aaandaant. sha didn't know how to find it and 
could I find it for har. 

fi Did sha tall you why ha naadad to saa it at that 
tiaa? 

A I don't baliava sha did. 

S Hhat did you do? 

A Sinca I was alraady on tha ooaputar. Z think I 
startad to look on tha coaputar. Sha startad to look in tha 



UNcussm 



12 



NAnz = 

223 
22M 
22S 
226 
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230 
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23M 
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2*40 
2m 
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2143 
2U4 
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2M6 
2147 



WMM 



HIR153002 ggit^Slal }>l(a&Jil| ii_|J PAGE 10 
U.S. Coda, AdBlnistrativA News. I baliav* I avantually 
found at laast ona oi tha Boland aaandaants on tha coaputar 
and printad it out and wa brought it Into Hz. Kallnaz's 
oiiica . 

fi Hho was In Hz. Kallnaz's offica whan you dalivarad 
tha Boland aaandmant? 

A Hz. Kallnaz. Jaii Paldaan. and I don't zamaabaz 
uhathaz Hs . Baznatt was alzaady thaza oz uhathaz sha caiia in 
with ma. 

fi So it would hava baan at tha tiaa you dalivazad tha 
copy, Hz. Kallnaz, Hz. Faldnan, Hs . Baznatt and youzsali — 

A Haza tha only fouz paopla in tha oiiioa, that's 
cozzact. 

e Mhat happanad? 

A I caaa in tha oifica with tha pzintout. Hz. 
Kallnaz was on tha talaphona. 

S As you cana in? 

A As I oama in. 

And I want ovaz to tha and oi tha tabla and just 
gava tha pzintout to Ana Baznatt without saying anything, 
bacausa I didn't want to Intazzupt tha phona call. It 
appaazad that Hz. Kallnaz was talking to soaaona izoa tha 
Justloa Dapaztaant in Mashington. 

fi It appaazad ha was talking to soaaona izom tha 
Justica Dapaztnant in Washington. Can you zalata to us, as 



UNMSIFIH 



13 



UNCUSSIFIED 



NAME: HIR153002 |||1||| nilBlll 1 1 IJ PkGE H 

2148 best you can, what you hsard o£ the talcphon* conv«rsation? 
2U9 A I haard things that Hr . Kallnar said and things 

250 that soundad Ilka ha uas capaatlng. Tha nana of Louall 

25 1 Jansen cana up onca or tulca . 

252 Q You say his nana cama up onca ox twica — in tha 

253 context of it was Lowall Jansan on tha othax and of tha 
2514 phona ot thay waxa speaking of Lowall Jansen? 

255 A I ca«e to tha conclusion it was Lowell Jensen at 

256 the othex end of the phone. I thought it sight be Steve 

257 Txott at the othex end of the phone, since in the past when 

258 Hx . Kellnex spoke to the Justice Depaxtment, he had been 

259 speaking to Hx . Txott. 

260 S But xefexences to llx . Jensen suggested to you that 

261 it was nx . Jensen on the othex end of the line? 

262 A That is what I thought at that time. 

263 fi Hhat else can you xecall about the convexsation? 
26U A I xeaeabex Hx . Kellnex — it sounded like he was 

265 xepeating things, soxt of like — I don't xemembex any exact 

266 woxds, but to tha effect of, so you want us to keep it 

267 quiet, ox of oouxse we will Keep it quiet, something to that 

268 effect, and something about going slow on the investigation. 

269 At some point — Z don't know whethex Ana Baxnatt was 

270 Mhlspexlng this to ma while Hx . Kellnex was on the phone ox 

271 whethex she told me this in the libxaxy — but Z had been 

272 infoxmed that Jeff feldman had come back fxom Costa Rica and 



UNtUSSffl 



14 



NAME: 
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UNCUSSlflED .... 



HIR153002 IIIWI.I U.^.lll II 11 PAGE 12 
had b«an invMStigating chargas that th*r* was gun-running to 
th« contraSf possibl« violations oi tha Azms Export Control 
Act and tha Kautrality Act. 

And th«n--nr. Kallnar was only on tha phona in ay 
prasenca ior a iaw mlnutas and than ha got ofi tha phona and 
lookad at us and said somathing lika, Hashington--thay want 
us to go slow on this. 

But ha had a look on his faca which I had saan 
baiora, sort oi a vlHB», which gava aa tha imprassion that 
ha wasn't going to pay any attantion to thaa. 

Ha also said somathing llka> wanting us to aaka 
sura that nothing caaa out, nothing caaa out about tha 
invastigation/ with tha sa»a look on his iaca. baoausa wa 
had pzaviously baan tha victias of laaks from Hashington on 
ongoing invastlgatlons . 

So ay iaaadiata iaprassion was that ha was tailing 
us what thay wantad but wasn't going to pay too auch 
attantion to it. 

I think at that point I said somathing about that I 
thought thaxa might ba soma oonnaotion batwaan that and tha 
upooming vota on tha contra aid. I don't think anyona said 
anything in zasponsa. It was just a throw-away commant. 

fi Has thara any iurthar discussion oi tha talaphona 
convarsatlon that you can raoall, aitar Hr . Kallnaz 
tarminatad it? 



UNCUSSIFIED 



15 



NAME 
298 
299 
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30M 
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HIR153002 



UNClASSra 



PAGE 13 



A No. Ait*t h* taiainatsd it and got off th* phon* 
'and nad* thos* btiaf statamants. I didn't haax any 
discussion of tha talaphona convarsation at all. 

e Can you tacall anything alsa about tha talaphona 
call or anything Hx . Kallnat said out loud that you 
ovaxhaard. othax than what you hava told us? 

A I cannot. 

S Do you know how long that talaphona call lastad. as 
you witnassad it? 

A No> I don't. It was »y inptasaion ha was not on 
fox moxa than fiva minutas whila I was in tha xooa. I was 
listaning to it with half an aax, and I was pulling statuta 
books out -of tha bookcasa on tha othaz and of tha tabla. to 
gat tha woxdings of tha Nautxality Act and othax casas whila 
ha was on tha phona . 

fi Thasa statuta books waxa in his offica? 

A Axa in his offica . 

fi How did you know about tha upcoaing vota on tha — 

A I hava baan xaading about it in tha nawspapaxs . 

fi Was thaza any discussion in that gxoup of nawspapaz 
axticlas ox publicity assooiatad with aid to tha contxas 
that you can xaoall? 

A Not that I can xacall. 

fi How long waxa you in Hz. Kallnaz's offica that 
avaning? 



UNCLASSIHED 



16 



UNCLASSIFIED 



KAME: HZR153002 ||If ||] Hlll^ll IK II PIGE ll 

323 A I taally don't lamaabcr, but Z think It was about 

3211 Kali an hour, parhapt US Blnutaa. 

325 S Mow. wa hava talKad about poitxons oi a talaphona 

326 convazsation you ovarhaaxd. Ha hava talkad about yout 

327 ranatk oi Mhat Hz. Kallnar said about kaaplng It qulat and 

328 going slow aitaz ha got oii tha phona. Ha hava talkad about 

329 a sida convazsation or soaa convazsation you had with Its. 

330 Barnatt about tha invastigation itsali. 

331 A Yas. 

332 fi And you hava aantlonad tha ona raaazk you aada that 

333 zafarzad to tha upooaing vota. 

33U Is thaza anything alsa you oan zaoall about that 

335 aaating. that hali-houz oz US-alnuta aaatlng that avaning? 

336 A Yas. Jaii Faldaan was vaxy axoitad about Mhat ha 

337 had found out in Costa Kica. as appazantly thay had baan 

338 discussing this ioz <iuita soaa tiaa. I just caaa in lata. 

339 But it saaaad lika Hz. Kallnar was oi tha opinion that tha 
3*10 only zaal solid avidanoa Ma had at tha tiaa Mas tha 

SMI possibility of thaza had baan lllagal azas shipaants iroa 
Laudardala Airport ^^^^^^^^^^^^^^^^^^^^^^^H and 

3143 tha possibility oi paopla having baan involvad in that. 
311 Than Ma discussad ganarally Mhat Jaii's idaas Mara 

3M5 and Mhat possibla violations oi Fadazal statuta thay 

3116 involvad. Ha disoussad tha possibility oi violating tha 

3i«7 Arms Expozt Contzol Act and tha quastion oi Mhathaz thaza 



UNCUSSIFO 



17 



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HIR153002 



UNCLASSIHED 



PAGE 15 



would b« a violation of such an act if paopla Axpoitftd guns 
without a licans* but with tha approval of tha EKacutiva 
Branch and the Prasidant. 

Ha discussad tha Nautrality Act. tha Nautrality Act 
conspiiaclas and its possible application to what Jaff had 
found out, to tha leads ha had gained, and we also discussad 
the Boland amendment — I think we only had one of them; I 
later found out that there ware two--and since the Boland 
amendment contains no criminal penalties for its violation, 
what would be — if there was any criminal penalty for 
violating the Boland amendment. 

He talked about tha possibility of contempt of 
Congress, 'as well as the vague possibility of a conspliacy 
against the United States. 

e Let's back up for a momant. 

You said in the context of the Arms Export Control 
Act, that you explored whether it could be violated where 
there was Executive Branch approval or approval by the 
President. Hhat facts or allegations had come to your 
attention at that point that raised the possibility of 
Executive Branch involvement in that? 

A Hall, there was — Jeff was excited over what he had 
found. Hr. Kellner thought that we ware lacking hard 
evidence as to just about everything except tha arms export. 
Nevertheless, speculating that It is possible that the CIA 



UNCLASSIFI 



18 



NAHE: 
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UNCLASSIFIED 



HIR153002 IIIVIll Hllllll li-LI P&GK 16 
was involvsd, oe that tha National Sacuxlty Council uaa 
Involvad — 

fi Has thara any aantlon aada oi aithaz tha CIA oz tha 
HSC? 

A - I baliava wa spaciflcally aantionad tha NSC. I aa 
not suza li wa spaciilcally aantlonad tha CIA. 

fi Whan you say ''wa,'* do you zaaaabaz Mho? 

A I don't taaaabaz who aantlonad it ozlglnally. 
Appazantly thaza waza soma laads back to paopla who uaza 
possibly idantifiad with tha NSC. I am not suza if Owan's 
nana cana in. 

Jafi did aantion — I aa not suza axactly who 
■antionad 'it, but it saaaad lika thay had alzaady talkad 
about it and that thay thought thaza was a possibility that ' 
tha National Saouzity Council and/oz tha CIA waza sonahow 
involvad in appzoving oi this. 

Ha didn't zaally invastigata — I didn't zaally do any 
zasaazch at that tiaa as to whathaz you could violata tha 
Azas Expozt Contzol Act if you had Exacutiva appzoval, but 
wa just kickad it azound a littla. 

ft Did Colonal Ollvaz Nozth's naaa coaa up? 

A I don't zaaaabaz. I knaw that I was awaza of it at 
that tiaa, of his naaa. and I had zaad azticlas about him. 
But I don't know if his naaa caaa up. 

I do baliava — foz soaa zaason I baliava that tha 



UNCUSSIHED 



19 



UHCLASSIFIED 



KAHE: HIR153002 I ||lllL.niJlJI I ILU PA6K . 17 



398 
399 
(400 
>401 
402 



nama o± Oucn had comft up. 

fi li Colonel North's na«« had bft*n mantlonad, would 
it havA rung a ball with you? You say you had raad-- 

A It night hava baan. I don't xaaambar aithaz way. 
I cannot say with any suraty. 



UNCUSSIFIED 



20 



Hint- 

>403 
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U06 
UO? 
•408 
■409 

mo 
mi 

U12 

ula 
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me 

U17 

ms 

1419 
•420 
•421 
422 
423 
42<4 
•425 
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1427 



HIR153002 



RPTS BOYUn 



UNCUSSIFIED 



DCHN BANMAM 
2 = 30 

fi Has it tha «llttg«d invelv*ii«nt of tha Exacutiv* 
Branch that brought about this discussion of tha Boland 
amandmant as a possibla basis for a criminal violation? 

A I was askad to — I was askad to bring tha Boland 
aaandmant in and it saaaad obvious--Hall > thay uara talking 
about tha possibility of tha National Sacurity Council. CIA. 
and who knows alsa in tha Govarnmant baing involvad with 
this, which wa thought would claarly ba a violation of tha 
Boland amandmant. 

Tha only quastion is what wa would ba abla to do, 
what chargas wa would ba abla to bring if wa wara abla to--if 
wa could prova a violation of tha Boland amandmant. 

e Do you racall any discussion of tha Grand Jury 
invastigation at that point? 

A Yas. 

fi Hhat do you racall about it? 

A X racall that Jaff was aagaz to go to a 
Grand — mantionad baing aagar to go to a Grand Jury. Nothing 
spacific was said, whathar it would or would not ba an 
laaadiata Grand Jury invastigation. that I haard. 

But Hr. Kallnar did point out that tha only hard 
avidanca wa had at tha momant was raally tha avidanca of tha 



UNCUSSIFIED 



21 



KAHE: 
M28 
K29 
430 
U31 
<t32 
U33 
>43U 
K35 
U36 
1437 
t|38 
Il39 
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^^3 

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141(5 
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nua 

it<«9 
USO 
MSI 
452 



HIR1S3002 



gun shipnant. 



UNCLASSinEO 



PAGE 19 



2 Did Hr . K«lln*r tak« a position on whathaz ot not 
it was an opportuna momant to 90 to tha Grand Juzy? 

A I don't zaally racall. I just raiiaiibar hint--! guass 
it is just an inprassion of him sort of calalng Jaff doun. 
Jeff was vary raady to do anything to go ahaad inmadiataly . 
He thought ha had pretty much all ha needed to go ahead. 
But I don't reneaber any discussion being Bade or announced 
on whether there would be a Grand Jury or when or whether 
4-Viara would not be a Grand Jurv 

2 Can you recaii anything else about that maetlhg? 

A Not really. 

fi Do you recall how the aeetlng closed? Hhat. If 
anything, was the outcome or next step after the meeting? 

A No, I don't renenber. I may have even left before 
the meeting--before everyone else left, because I was not 
part of tha investigation. 

I had simply — I was simply in there initially 
because I could find the amendment, which was not that easy 
to find, and, secondly, to give my opinions as someone from 
the Appeals Division on the applicability of certain 
statutes to the facts we had or thought wa might develop. 
And seeing as it was a Friday night and after 6=00, by then 
I was quite eager to go home. 

8 Again I just want, before I bring up another point. 



UNCUSSIHED 



22 



UNCUSSIFIED 



KAHE: HIR153002 llllll|_mJUII 1 1_ LI PAGE 20 

1453 X want to aak« suz*--hav« you t«lay*d to us all youz 

||5<4 zacollactions oi that maating? 
M55 A I baliava so. 

MS6 fi Lat aa pzoba on tha quastlon, go back to tha phona 

>457 call with Hr . Kallnaz> oz with Hz. Kallnaz on tha phona. 

1458 Hhat was it about tha phona call oz subsaquant convazsations 

*459 izoB Mhich you concludad that ha was spaaking to sonaona at 

160 main Justica and/oz Hz. Jansan oz Hz. Tzott? 
1(6 1 A Hall, it could hava baan that whan I cana into tha 

<(62 zoom. Ana whispazad to ma, ''Ha is talking to Justica.*' It 

■463 could hava baan. I don't zamambaz. 
14614 fi You say Ana? 
465 A fls. Baznatt, Ana. 

1466 Oz it could hava baan just izom haazing tha 

•467 convazsation, and I don't zamambaz vazy much spacifically 

>468 about tha convazsation but haazing tha namas I was haazing, 

■469 and I was vazy accustomad to ba in Hz. Kallnaz 's oifica 

1470 whila ha was talking to tha Dapaztmant. 

•471 S On tha possibility that Ana might hava mantionad it 

■472 to you, you don't zaoall, oz do you, whathaz sha accompaniad 

<473 you, stayad with you in tha libzazy and than accompaniad you 

>47>4 back into Hz. Kallnaz 's oiiica, oz whathaz sha pzacadad you 

U75 back to tha oifica? 

•476 A I don't zaally zamambaz. I think sha pzacadad ma 

<477 back in thaza. Wa did not — I don't think wa found it in tha 



UNCLASSIFIEO 



23 



UNCLASSIFIED 



KAHE: HIR153002 lllll.l U.A.Airiril PAGE 21 



1478 
1*79 
480 
481 
>«a2 
it83 
I48<4 
•485 
M86 
1*87 
•488 
•489 
■490 
U91 
M92 
493 
49U 
<495 
496 
497 
498 
499 
500 
501 
502 



U.S. Code, Congittssional N«us, so I was HOiKing on th« 
computar to gat it out of tha data basa . 

S Did you considar Mr. Kallnar's statamant. that 
Justica wants us to go slow and Justica wants us to kaap it 
quiet, unusual and noteworthy? 

A Hall, I thought it was noteworthy in tha sense of I 
thought this was semi-politically sensitive, but not--I nean« 
Justice, as iar as I knew, gave us direction, suggestions on 
all sorts oi ongoing investigations. 

2 Here you asked to do any iurther research on that 
case? 

A About two iionths--a month or two later, either in 
Hay or June, I think, Richard Gregorie, who was the Chief of 
the Criminal Division at the time, asked me to keep myself 
available to give Jeff any assistance he needed on the case, 
and soon after that I was in the library and Jeff was 
researching something on the Neutrality Act and he asked me 
to look something up or find something, and I did. But that 
was really the extent of my work. 

Every so often I would run Into Jeff In the office 
and ask him how it was going. In fact, I was actually kind 
of surprised that I was not asked to do any more research on 
It after the time in Hay, and then I didn't really do 
anything. 

e Did you ever discuss that case with Hr . Kellnez 



\1WVJS** 



24 



NAHE: XIX153002 |IR|I"I AV VlLiLII P*GZ 22 



503 
50>4 
505 
506 
507 
508 
509 
510 
511 
512 
513 
51U 
515 
516 
517 
518 
519 
520 
521 
522 
523 
524 
525 
526 
527 



UNCUSSIFIED 



again? 

A Ko. N«vax did. 

fi Did you avaz discuss it with Ks . Barnatt again? 

A Mo. Wall. I--lat aa put it this way. I didn't 
discuss tha casa as an invastigation . I discussad, in Hazch 
of this yaar, what ny zacollactions oi tha naating uaza . 

S I undazstand. Wa will talK about that in a ainuta . 
Let's taKa it up to January 1 of this yaat . 

A Ko , naver. I spoka to Hx . faldatan occasionally. 

e Did you avaz> othaz than that bziaf contact with 
Hr. Gzagozia, discuss it--tha casa — with hla again? 

A No. I don't think so. 

S dust so wa can closa this sat than, othaz than Hz. 
Faldaan and bayond. batwaan that Apzll 2 aaating and Januazy 
1 of this yaar, did you avaz discuss that casa with anyona 
alsa in tha offica? 

A In tha ofilca? 

fi Yas . 

A I may hava mantionad It to Linda Hazta at soaa 
point, but this was — this would ba Ilka aitaz Novaabar. aftaz 
tha zavalations. and I think I had zaad soaa artiola and I 
had mantlonad to haz that I had baan at this maating and I 
didn't think that this was tha way It had happanad. 

Z don't zaaaabaz . I told haz I thought soaathing 
was wzong about it. That Is tha only othaz pazson in tha 



llNttASSm 



25 



528 
529 
530 
531 
532 
533 
53(4 
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550 
551 
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HIR153002 



UNCLASSIFIED 



PAGE 23 



office I discussad this with. 

fi Recall foz me/ if you will, the discussions you had 
with Mr. Feldnan. if you can put them in some Kind of order. 

A Hell, Z don't know if I can put them in some kind 
of order . 

I know that one day in the late spring or early 
summer, I was coming into the building or coming out of the 
building and he was standing on niami Avenue with his jacket 
off and I asked him how the case was going. He said he had 
just gotten back from Costa Rica again. But that is really 
all we said. 

Then when I would run into him in the halls 
occasionally, I would ask him, if I remember--and I guess in 
September or October I asked what was going on and he said 
something about going to the Grand Jury and he showed me, he 
had a legal pad and he had a name--like three pages with 
names of witnesses, and he was happy that it was finally 
going to the Grand Jury. I really can't swear to the date, 
though . 

e Kow, your first meeting on this case was around 
April 2; is that right? 

A I believe it was Friday, April 4. 

fi Friday, April 4. Sorry. 

And you believe that that was after Hr . Feldman 
returned from Costa Rica. 



UNCLASSIFIED 



26 



iiNtiAssra 



NAnE= HIR153002 |||llll_niJiJ II ■■■■' PAGE 2M 

553 A Yes. That was mantionad at th« masting. I had not 

55>4 Avan known he had gona to Costa Rica. 

555 Q And than you baliava thaza was a sacond trip to 

556 Costa Rica bacausa Hz. Faldman told you ha had just ratuznad 

557 from Costa Rica at a latar data? 

558 A Yes. 

559 S Can you put a time izana on that convazsation you 

560 had with him, the one about the sacond tzip? 

56 1 A I zeally hava a pzoblaa doing that. Z mean, it was 

562 aitez--it was pazhaps between late Hay and August 1 . He had 

563 a vezy hot sumnez. so it was not unusual ioz someone to be 
56>4 standing outside with his jacket ofi. It was just a vezy 

565 peziphezai meeting. 

566 S And the comment about being ready to go to the 

567 Grand Juzy and showing you a legal pad, can you put a time 

568 frame on that? 

569 A Could have been anywheze izom September through 

570 November. I am not really sure. 

57 1 fi Did you ever discuss this case with representatives 

572 oi the FBI? 

573 A Oi the fBI? 
57i| fi Yes. 

575 A Ko. 

576 S Up to January 1 of this year? 

577 A No, I did not. 



\mtms«it9 



27 



KAHE 
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HIR153002 



«NCIAS»D 



PAGE 25 



2 How about anyone at naln Justice? 
A No, no one at the Justice Department. 
2 Have you ever seen any written reports or records, 
other than the yellow pad that Hr . Feldman showed you-- 



No , I have not. 

--relating to this case? 

No. 

Did you ever ask to see any written reports on the 



No. 



Did you ever discuss this case with anyone outside 
the Department oi Justice? 

A 7es. 

2 When and with whom? 

A I believe it was in August of 1986 > John Hattes 
from the Public Defender's Office and myself were both in 
Atlanta. He had oral arguments the following day. He were 
friends and we ware members of the same gym and, in fact, I 
believe that Mr. Hattes had mentioned something about 
Garcia, his client Garcia, back in January or February. 

He were working out at the gym and I didn't even 
listen. It sounded to me like another defendant's story. 
He get people all the time who are convicted of one thing-- 
charged with one thing or another and they say they worked 
for the CIA or DEA or somethlnq 



UNCLASSra 



28 



KAME: 
603 
eOM 
605 
606 
607 
608 
609 
610 
61 1 
612 
613 
61>t 
615 
616 
617 
618 
619 
620 
621 
622 
623 
62it 
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626 
627 



HIR1S3002 



UNCUSSIFIED 



PAGE 26 



2 Whan uas that conversation? 

A I bsliftVA it was in January or Fabruary. 

2 Befoia th« April >4 naating. 

A Baiora, yas . I didn't avan raaaabar tha naaa 
pretty much until it uas mentioned at the April meeting. 

John and I were having a drink the night beiore--He 
were booked in the same hotel in Atlanta — and he uas talking 
about he had gone doun to Costa Rica and this is uhat he had 
found and there uas this and that going on. And there had 
bean an article in the Miami Herald, I guess, right around 
that time, in uhich the article claimed that Mattes and his 
investigator had gone to Costa Xlea and come back and had 
been threatened by Feldman and two FBI agents. 

And so John was telling me about, you know, what 
really happened, what he said really happened and how he 
thought the newspaper article had misrepresented uhat had 
happened, and he was asking me li I knew if anything had 
ever happened with the case. I said that — not as far as I 
knew. 

I may have — it is very tough to remember--! may have 
mentioned to him. at some point between April and that time, 
that I knew or had had something to do with the case, but it 
was in August that I told him that Z had heard, you know, 
that it didn't seem like much oi anything was happening, I 
uas surprised It wasn't happening, and about what I had 



UNELkSSlfitii 



29 



KAHE' 

628 
629 
630 
631 
632 
633 
631* 
635 
636 
637 
638 
639 
6U0 
6141 
6U2 
6U3 
6i((4 
6145 
6146 
6147 
6148 
6149 
650 
651 
652 



HIR153002 



UNCUSSIFIEO 



PAGE 27 



heaid and sa«n at tha m««ting. 

S You calat«d to him th« incident oi what you had 
sean at tha maating on April <4 ? 

A Yas . In vary ganaral tarns. 

2 Tell us, as bast you can, exactly what you told 
him. 

A I thinR I told him that it was my impression that 
there was political pressure being put on from main Justice 
ior us to not do the investigation and, as iar as I Knew, 
the investigation was still proceeding but I couldn't 
understand why nothing further had happened, to my 
knowledge . 

3ohn was interested in that and I told him about — I 
tried to tell him what I had heard in the phone call more 
specifically . 

2 Did you discuss any other aspects of the case with 
him? 

A I don't think so, because I really didn't know too 
much about the other aspects of the case. Ha was — it was 
more ha was telling me what had happened to him and what 
Garcia had said and what was going on. I really didn't know 
anything about the case. 

e Had you been drinking at the time you made this 
statement to him? 

A I think — he was having a beer and I was having a 



UNCUSSIFIED 



HAHE 
6S3 
65<4 

655 
656 
657 
658 
659 
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661 
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66tt 
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667 
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669 
670 
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676 
677 



HIR153002 



UNCLASSIFIED 



PAGE 28 



glass of ulna. 



fi Was that your fitst glass oi Hlna> as you zacall? 

A y«s. ay first glass of ulna. 

e Did you hava any further discussions with Hr . 
Mattes about this casa? 

A Ha askad aa soma questions about it. Ha would 
bring it up once in a while and then in Kovenber he asked ne 
to meet with him--have lunch with hia, and I did. And when I 
got there > there were three people or — two or three people 
there. I think one of then was John's investigator and two — 
the other two were froa the Senate foreign Relations 
Coaaittee . 

fi Do you reaeaber their naaes? 

A X believe one of thea was Dick HcCall. 

fi Do you reaeaber the other one? 

A Mo, I don't reaeaber the other one. 

fi Did Mr. Hattes tell you in advance that there were 
going to be other people at the lunch? 

A No, I don't think he did. 

e Did he tell you — did you have any indication prior 
to going there that the Garcia case was going to be a topic 
oi discussion? 

A I don't think so. I aa not really sure. He aay 
have given ae the iapression that he wanted to talk about it 
with ae soae aore . But I can't really reaeaber. 



UNClASSm 



31 



UNCUSSIFIED 



HXnt- HIR1S3002 U I lV*»< •*'*'■ ' ■■■■' PAGE 29 

678 S What happ*n*d at tha lunch? 

679 " A Hall, basically John told aa who thasa paopla weta 

680 and thay introducad thaasalvas and said that ha had told 

681 tha* what I had told hia and thay just uantad to haat it 

682 from ma. And I basically just coniiraad, you know, told 

683 thaa what I had haaxd, which laaadiataly thazaaftax I 
6814 thought was a aistaka, but I had alzaady dona it. 

685 S Hhy did you think it was a aistaka? 

686 A Hall, I had a iaaling that, as I was walking back 

687 to tha offica and thinking about it. that I didn't baliava I 

688 was supposad to talk to paopla izoa Congzass oz anothaz 

689 agancy without zagulaz appzoval. I think thaza aza 

690 zagulations about gatting tha appzoval oi tha Uustica 
69 1 Dapaztaant. 

692 e Had thosa ooouzzad to you pzioz to tha 

693 convazsation? 

69U A Ko. It just happanad. It was zathaz suddan. It 

695 just ooouzzad to aa whan I was walking baok. 

696 a Had it ooouzzad to you aitaz tha iizst convazsation 

697 you had with Hz. Hattas that pazhaps that was a convazsation 

698 you shouldn't hava had? 

699 A Mo. not until this convazsation. You know. I had 

700 assu«ad Hz. Hattas would Kaap this in oonfldanoa. I raally 

701 had no zaason to baliava ha was going to tall anyona about 

702 it. It was aoza in tha — aoza lika tzadlng waz stozias. John 



wmim 



32 



mmm 



NAHE: HIR1S3002 ||llUl.riWII ■b"' PAGE 30 



703 
70i» 
705 
706 
707 
708 
709 
710 
711 
712 
713 
71U 
715 
716 
717 
718 
719 
720 
721 
722 
723 
72M 
725 
726 
727 



saying, ''I went to Costa Rica and I thought they ware going 
to kidnap aa . I got thraats on ay lifa,*' and all, and na 
saying, ''Wall, you know, I think thara is ptassura on ay 
oiiica not to invastigata this thing too thoroughly.*' 
fi What happanad naxt? 

A I think this occurrad in NovaBbaz--! aa not 
suza--soBa Friday in Novaabaz . 

A faM Maaks lataz John said that Sanator Katry was 
down, was in Hiaai, and would lika to spaak to aa, and I 
uant--you know, I basically conilzaad what Z — John had alraady 
told him, appazantly tha othar paopla had told hia alzaady, 
as wall, what I had said. And ha askad aa soaa quastlons 
and I told hia what I had said and ha didn't saaa axaotly 
happy with what Z was saying, baoaus* ha and a lot oi othaz 
paopla wara appazantly undar tha iapzassion that Hz. Kallnaz 
had said^ that Z had haazd Hr . Kallnaz say to Hz. faldaan to 
taka it aasy oz soaathlng Ilka that, which was not tha casa. 
Z had haazd Hz. Kallnaz say that Washington wantad us to 
taka it aasy. oz go slow, oz whatavaz tha axact wozds wara. 
and it was ay iapzassion, as Z told tha Sanatoz than and Z 
hava told you aazllaz. that Hz. Kallnaz was not going to 
follow that pzassuza izoa Uashlngton. 

So wa had a bziai talk and that was it. 

nt. rLYNK> Would you zapaat what you thought ha 
said? Z aaan what tha Sanatoz said. 



UNtlASSIFIED 



33 



NAHE 
728 
729 
730 
731 
732 
733 
734 
735 
736 
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738 
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743 
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UNCIASSIFIED ... 



HIR1S3002 |JI1tJl_nUUI| li.1^ PAGE 31 

THE WITNESS: The Senator seemed to be undei the 
impression that I had heard Hr . Kellner tell Mr. Feldman to 
go slow on the case, and I did not hear that. 
HR. FLYKN: Okay. 
BY MR. ncGOUGH- 
C Has anyone other than Senator Kerry present when 
you spoke with hin? 

A John Hattes was also present. 

fi Now, you had advance notice oi that meeting; is 
that right? 

A Not really. Maybe fifteen minutes. 

S What time of day was it? 

A I think it was in the afternoon, early afternoon, 

1 : 00 . 

fi Did you have any reservations about meeting that 
commitment — 

A Yes, I did. 

2 --or attending that meeting? 

A Yes, I did. 

Q Did you disouss the meeting ot your reservations 
with anyone in the U.S. Attorney's Office? 

A Ko. I did not. 

fi Up until or up through the meeting with Senator 
Kerry, did you let anyone in the U.S. Attorney's Office Know 
that you Mere speaking to someone else? 



UNCUSSIFIED 



34 



HAHE: 
753 
75M 
755 
756 
757 
758 
759 
760 
761 
762 
763 
764 
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766 
767 
768 
769 
770 
771 
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HIR153002 



UNCUSSIHED 



PAGE 32 



.A I don't think so, no. I don't think I did. 

e You hasitatad for a momant. 

A Hall, I spoka to Linda Hertz about it, but I think 
afterwards . I have spoken to her a few uaaks after or--she 
knew at soma point, but I am pretty sure it wasn't 
beforehand. In fact, I am sure it was not beforehand. 

fi After the Kerry meeting, what happened next? 

A Kot really a lot. You know, I had run into John. 
He would tell me what was going on. I would read things in 
the newspaper . 

Then I guess it was March I received a telephone 
call from — well, actually what happened was I had read some 
article somewhere where my — where I was mentioned, not by 
name but what I had heard was mentioned, like word-for-word, 
and I was very upset with this and I told John that I was 
very upset with it and I wanted to know how that had 
happened, and he said that apparently he had told someone 
who is a plalntiii in a lawsuit and that they had given it 
to the newspapez person. 

And then when — I guess it was in Harch, it might 
have been April, I received a phone call at my home from 
Imyden Gregory, who was, I guess, an investigator with the 
House Judiciary Committee, who wanted to speak with me. 

Hhen that happened, I decided that I should go to — Z 
went to Ana Barnett and I told her what basically had 



UNCLASSIFIED 



35 



UNCUSSIFIED 



NAHE: HIR153002 IIIUI.I U.AAiriril PAGE 33 



778 
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781 
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788 
789 
790 
791 
792 
793 
794 
795 
796 
797 
798 
799 
800 
801 
802 



happened, who I had spokan to, that Gragoiy called and 
wanted to speak to me and that I had heard the conversation, 
I uas at the meeting. And I told her and Hr . Gregory--they 
were together. 

They were actually quite happy to hear that it was 
I who had been the leak, as they said. They said they had 
been very worried about who was the leak. They thought it 
might be an agent, an FBI agent or something. They were 
happy it was me, who was very peripheral, and Ms. Barnett 
said she had not even remembered that I was at the meeting. 

And they said they would tell Mr. Kellner, who was 
in a meeting at the time, that I told them and that he came — 
that a couple days later Hr . Kellner came in and told them 
that he had notified the special prosecutor — I also told Hs . 
Barnett that I had received a phone call from the Washington 
Post reporter who wanted to interview me for a story and I 
had not talked to him about it. 

That was the other thing. Z had received a call 
from a reporter. Now. the way that came about was back in 
April of 1986, when I had heard this originally. I had 
thought of speaking to a friend on the Washington Post about 
this, the fact that we were basically supposed to keep it 
quiet, that there was actually an investigation going on. 

And I even called this friend in a round-about way 
and I told her that I might know something about the 



wmm 



36 



NAIfZ: 

803 
80M 
805 
806 
807 
808 
809 
810 
811 
812 
813 
81M 
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816 
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820 
821 
822 
823 
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826 
827 



UNClASSiFiED ■■.- 



MIR153002 limial Halilll II II PAGE 3t 
contxas. and sh* didn't taally sound vary Intaxastad. And 
tha naxt waak, I guass it was Hadnasday or so, tha story 
bxoka in tha--that thara was an invastigatlon going on, in 
tha Kaw York Tiaas, I think it was Hadnasday or Thursday. 
And with that happaning, I ialt thara was raally no naad for 
ma to say anything. 

fi Whan did you call this raportar? 

A I think it — I think I callad har — it could hava baan 
probably tha waakand or aayba avan a Tuasday ox Hadnasday. 
I was in Atlanta on Monday and Tuasday. I nay hava callad 
har on tha Hadnasday and tha story aay hava coaa out aithar 
that Hadnasday or Thursday in tha papars. 

fi This was Hadnasday or Thursday aitar — 

A Right. 

fi — aftar tha April M aaating? 

A Right, aitar tha aaating. 

fi Hhy did you — why did you avan broach that subjact 
with har. with a raportar? 

A I thought oi broaching it baoausa thara had baan. 
and wara continuing to ba, danlals ixoa tha Adalnlstxation 
in tha nawspapaxs that thara waxa any Invastigations going 
on, that thara was any inioraation about this — dallbaxata 
■Isstataaants, not just tha usual tanding to oonfixa or dany 
thara is an invastigation going on. Thara wara spacific 
details. That worriad aa . 



UNCLASSIFIED 






37 



UNCLASSIFIED 



Hktlf KIR1S3002 UlllAl Hllllll iril ^'^^^ 35 



828 
829 

830 
831 
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833 
83H 
835 
836 
837 
838 
839 
8*10 
8i«1 
8ll2 

sua 

8K5 
846 
8>l7 
8*48 
8149 
850 
851 
852 



5 Hhat Horrlad you? 

A Hhat Hoiiiad •• m»s tha iaot that paopla In 
Washington uaia dallbaxataly lying, that thay knaw thata was 
an Invastigation going on, that thay had told us to kaap it 
qulat, and thay had told us to not do lt> to sIom doiin tha 
invastigation. tnd that wozrlad aa. 

e Hhat axaotly did you tall tha zapoztaz? 

6 I Has vary round-about. I told haz that I aight 
know soaathing about tha contsas and Nieazagua. I aa not 
avan axaotly suza what I told haz about It. But sha didn't 
sound vazy Intazastad. Raz husband Mas also a zapoztaz on 
tha Post, who was actually doing Cantzal Aaazioan stuii, and 
I spoka to hia ioz a ainuta and ha didn't sound vazy 
Intazastad althaz. 

a Hho was tha zapoztaz, by tha way? 

I Hazgazat Shaplzo. 

e Haza you pzapazad to answaz fuastlons li Hs . 
Shaplzo did. in iact, ask thaa? 

A I don't know what I was pzapazad to do at that 
tiaa. Z aa not avan suza what day I spoka to haz. 

Hhan tha stozy oaaa out in tha papazs, in tha Naw 
Tozk Tlaas and Z aa not suza whaza alsa, by that tiaa I was 
not pzapazad to say anything iuzthaz. Basically Z thought 
avazything Z had to say had alzaady ooaa out. I ialt that 
soaaona had baatan aa to It. 



mussw 



38 



miASSM 



HiHE: HIR153002 |||l||a| Hllllll ILU PACE 36 

853 RPTS STEIN 

SSU ^CHN BkNNlN 

855 3:00 

856 C Othax than Ns . Shapiro, hava you discussed this 

857 case with any aeabexs oi the press or the nedia? 

858 A Well, I didn't really discuss it with her. And, as 

859 I say, I think I spoke briefly to her husband, fred Hyatt. 

860 e At the saae ti»e? 

861 A It could have been. I think I called her at home. 

862 Q Here there one or two calls? 

863 A I aa not sure. It could have been--I only seen to 
861* renember one. But I didn't really say anything, and nothing 

865 really cane oi it. 

866 e Why would you speak to both Ms. Shapiro and Hr . 

867 Hyatt? 

868 A Because if I call her at hone and her beat was 

869 Congressional and his was Central America, and I knew him as 

870 well, since we all knew each other socially, and I think she 

871 just said Fred would probably be mote interested. 

872 Q Are they in the niaml Bureau of the Hashlngton 

873 Post? 

8711 A No. 

875 e These are Washington, D.C., people? 

876 A They were Washington, D.C., people. I think they 

877 are going to be Southeast Asian correspondents. 



UNCIASSIRED 



39 



KAHE 
878 
879 
880 
881 
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883 
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89>t 
895 
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HIR1S3002 llllljLnOvil ••-■' PAGE 37 

2 Hava you discussttd--oth«£ than with Ms. Shapiro and 
Hx . Hyatt, hava you discussad this casa with any taportats? 
A No. 

ns . Shapiro called ma and asked ma ii I was willing 
to spaak to tha Washington Post zaportar this April, I guass 
it was, whanavar ha was doing tha story — Harch or April — and I 
said I was not willing to do that. 

I hava also racaivad calls — I was recently away from 
tha office for two weeks and I received a telephone call 
from a rapoxtaz from tha Hlami Herald on Hay 22nd, and a 
story ran on Hay 25th. I did not speak to him either. 

2 Have you, on any other occasions, discussad 
Department of Justice business with reporters?' 

A No . I have not. I am not even sure that the 
conversations I had were specific enough to be described as 
discussing Department of Justice business with a reporter. 

2 With that qualif ication--did you ever have similar 
conversations with a reporter that couldn't be considered 
specific enough? 

A No, I did not. 

2 Did you at any time provide anyone outside the U.S. 
Attorney's Office with copies of doouments — 

A No, I did not. 

2 — or the original documents in this case? 

A No, I did not. 



UNCLASSIRED 



40 



UNCLASSIFIED 



MAHE: HIR153002 |||l|JI_rilJii 1 1 ll-V PAGE 38 



903 
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90S 
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920 
921 
922 
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92U 
925 
926 
927 



fi You thexeior« dany baing tha souzca oi tha Faldnan 
■•■ozandim that has baen quotad-- 

A I hava navez even seen tha Faldnan mamozandun . I 
certainly didn't give it to anyone. 

MR. ncGOUGR: I don't know that we hava to itazK 
this as a deposition exhibit. 
BY HR. HcGOUGH: 

& You provided no nenozanda to anyone? 

A I pzovided no iteiioranda. All I provided Mas a 
printout izon the computez with the text of the Boland 
anendmant . 

C You pzovided that to whoik? 

A I think X gave it to Ana Barnett that day and I 
haven't seen it since. 

2 That is the only piece oi paper that you handled-- 

A That X generated, yes. 

e When you first went to ns . Baznett and Hr . Gregorie 
and told thea that you had been the source of this zepozt in 
the newspapez — 

A That I felt X had been the source. 

fi That you felt you had been the source. All right. 
— did you discuss with thea what you had told Hr . 
Kattes and Senator Kezzy? 

A Yes. 

S Did you discuss, in the oouzse of that. Hz. 



UNClASSIflED 



41 



KAME 
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Kellner's conversation that you had ovarheazd? 

A I did. 

2 Did ns . Baznett acknowledge that that convetsation 
had taken place? 

A Fizst she said that she had forgotten I was even at 
the meeting and that no one remeabezed either. But now she 
remembered . 

She also acknowledged that there had been a 
conversation, but that she did not reaeaber that being said, 
and that she thought Hr . Kellner was talking to a aan named 
nark Richard/ who apparently works with Hr . Jensen. 

S Just so the record is clear, so that we can ioous 
on what It's . Baznett acknowledged oz didn't acknowledge, she 
acknowledged that theze was, in fact, a conversation that 
took place at that tiae? 

A yes, that Hz. Kellner was pzobably on the telephone 
when I caae in and it was pzobably with this Riohazd pezson, 
of whoa I had nevez heazd. 

Q But she did not zecall eithez a zefezence to going 
slow or a reference to keeping It quiet? 

A Right. She said she had no real recollection of 
what had been said duzing the telephone call. 

Q Did Hr . Gzegozie have anything to add along those 
lines? 

A No. He at fizst thought he was in the aeetlng and 



miAssm 



42 



iiNtiASsro ., 



NAME: HIR153002 lllvlll nUUII ll**'' PAGE MO 



953 
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972 
973 
9714 
975 
976 
977 



then utt talkad about it a littl* fuxthar and ha taalizad ha 
hadn't baan involved in that maating. 

Q Hhat sparkad that racollaetion, ii you know? 

A I don't ranaabaz. It was talking in aoza detail, 
exactly whan it happened, what happened, because--the fact 
that there weze only four people in the toon and Dick wasn't 
one of than. 

S Has Hz. Sharf in the zoom? 

A Ha was not. 

fi Hho is Hz. Shazf, foz the raoozd? 

A Lazzy Shazf is an attoznay in my office. I think 
ha is special counsel. 

fi Vid you evez discuss this oasa with Hz. Shazf? 

A No. 

fi Let's zun thzough the same axazoisa with Hz. 
Kellnez, that is, you want to Hz. Kallnaz oz ha came to you 
and discussed the fact that you had thought you might be the 
souzca foz this stozy. 

A No. Hhat ha did was — ha was in a meeting whan I was 
speaking to Ana Baznatt and Dick Gzagozia. X ballava a few 
days lataz ha oama to Appeals — Z was in an opan azaa — and ha 
asked ma to go to my office. 

Ha said ha had notified the spaolal pzosaoutoz's 
office of the Infozmation Z had and that thay waza pzobably 
going to want to intazviaw ma. Ha said ha spaoliloally 



UNCLASSIHED 



43 



978 
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UNCLASSIFIED ■■■. 



HIR153002 IIIUBil H.lil^lH Kl II PAGE M1 
Eftmambarad navat having said anything lika that about going 
slow and ha saamad vary upsat. 

And I triad to tell him that I had baan aisquotad 
in tha papaxs bacausa I had navat haaxd him tall Faldman to 
go slow. 

S But you did tall him that you tacallad him relating 
that as tha dasira oi tha Justice Department? 

A Yes. And he said he didn't — speoiiically no one 
ever said that to me , I never heard that. 

fi Did he make any xeiezenoe to uhethaz or not tha 
phone call had occurred at all? 

A I don't thinK so. He didn't mention that. It was 
very brief, no mora than tMO minutes in my office. 

fi Have you had any further discussions Mith Hz. 
Kellner about this — 

A No, I have not. 

fi --about this incident? 

A No. 

fi Rom about with Hs . Barnett? 

A Not really. She is sort of the contact person for 
travel and things, so — for Instance, yesterday I tient in and 
asked her what the procedure — li she knew what the procedure 
u«s like. Z spoke to her when I originally got the request-- 
I had received the call from Hashington — trying to keep her 
up to date. 



UNCUSSIRED 



44 



NAME: 
1003 
lOOM 
1005 
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Oli ^^*^ p] 



HIR153002 llllULnVWl* •■-— ' PAGE M2 

Q Hav« you discussAd tha aattar with Hx . Gtegoria 
sinca than? 
A Ko. 

fi Hith nr. Shari? 

A No. 

fi Slnca tha discussion about going to tha Grand Jury 
way back in '85, hava you discussad this mattar at all with 
Hr . Faldnan? 

A No. I spoka to Mr. raldnan briaily about tha 
proceduxas oi this, of tha conmittaa, and that's all. And 
wa didn't avan raally hava nuch oi a convarsation on that, 
as naithat of us iaals it is vary appzopxiata fox us to ba 
talking. 

fi Do you know who xalaasad tha faldaian aaaoxandua to 
tha pxass? 

A No, I do not. 

S Do you hava any idaa who laakad tha Faldnan 
manoxanduB? 

A I hava no baliai that is basad on anything factual. 

e Do you hava any suspicions? 

A I hava — it is my undaxstanding that it appaaxad 
oziglnally in tha Washington Tlaas last suaaax, and it has 
baan ay suspicion, fzoa things I hava xaad in tha madia ovax 
tha past two yaaxs , that it could possibly ba somaona 
involvad in tha Dapaxtaant of Justioa or with tha 



UNCLASSIFIED 



45 



NAHE: 
1028 
1029 
1030 
1031 
1032 
1033 
103>l 
1035 
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1037 
1038 
1039 
lOUO 

lom 

10112 
10M3 
lOUM 

ions 
ions 

10«l7 
1048 
1049 
1050 
1051 
1052 



""="" UNtliSSifitB »« « 

AdninistratiSC. But I hava no facts upon which to basa 
that. It Is simply a supposition. 

fi Did you lavlaw any documants In ptaparatlon for 
coalng hara? 

A No . I lookad through ay oalandax to aaka sura I 
didn't hava any docunants, and I iound that I did not. 

e Othaz than Ht . Pazklns> hava you spokan to anyona 
at tha Oapaztnant of Justlea about this aattac? 

A In what sansa? I hava spokan to two othaz paopla 
In tha Oiflca of Laglslatlva--! guass It Is Laglslatlva 
Affalzs, about ay appaazanoa haza. But I hava not spokan to 
anyona about tha spaclflos of ay tastlaony. 
e Vho In OLA? 

Carolina Haval and Hz. Boyd. Z ballava his naaa Is. 

Hava you baan Intazvlawad by Indapandant counsal? 

Yas. I hava. 

Hava you appaazad bafoza tha Qzand Juzy? 

I hava not. 

Lat aa just taJca a aoaant to zavlaw a eoupla of 



A 
fi 
A 

e 

A 

fi 

things . 



Lat aa go back to youz eonvazsatlon with lis. 
Shaplzo and Kz. Hyatt. So you zacall whathaz you told 
aithaz of thaa oz aantlonad to althaz of thaa tha talaphona 
call In paztloulaz? 

A I don't think I did. 



UNCUSSIHED 



46 



NAME: 
1053 
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1055 
1056 
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1063 
106(4 
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107<4 
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1077 



HIR153002 



UNCUSSIFIED 



PAGE Ut« 



2 Do you know uhathar you nada any other sani- 
eontampozanaous statamants to anyona ralating to that phona 
call--dld you nantion tha phona call, tha instructions to 30 
slow or tha instructions to kaap it quiat, to anyona alsa at 
or about tha tina it occurzad? 

A Not as far as I can ranambar. 

Q Hhan was tha first tina you racall discussing that 
telephone call and the instructions that the Department 
allegedly gave Hr . Kellner, with anyona? 

A I think it was August when Z was talking to Hz. 
Mattes. 

2 And that would have been the first time? 

A I think so. 

2 At the time any of this occuzzed, at the time tha 
telephone call occuzzed. did you zaise with Hz. Kellner or 
Ms. Hertz or any of your supeziozs the pzopziety of going 
slow oz keeping this investigation c^uiet? Did you say, wait 
a second, that is not what we aze supposed to be doing? 

A Ko, Z did not, because it was my impzesslon that ue 
weze not going to be going slow on tha investigation. And. 
as to the pzopziety of keeping tha investigation quiet, it 
is quite pzopez to keep a pending investigation quiet. Zn 
faot. the most Z was willing to tell anyona. would have been 
willing to tell anyone, was that oontzazy to the denials, 
that such an investigation did exist, and — see. this was on a 



UNCLASSIFIED 



47 



UNCLASSIFIED 



HXm HIR153002 ||ll|lll Hllllll ll_U PAGE MS 



1078 
1079 
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1 100 
1101 
1102 



Friday. On Monday I went to Atlanta. I got back Tuesday 
night. 

I guass it was Wadnesday or Thursday--Hadnasday 
morning or Thursday, probably Wadnesday, Thursday, Friday, I 
am not sure on the date--it was sometime that week it came 
out in the paper. 

I didn't really have a chance to do anything. I 
think all I did was call Ms. Shapiro. That didn't go 
anywhere. It came out in the papers and I ielt, well, we 
are investigating this, it is known that there is an 
investigation going on, that is all that needs to be done. 

2 So other than the call to Ms. Shapiro, you didn't 
take any steps to counteract or repeal this thing until you 
spoke to Mr. Mattes? 

A Right, as far as I can remember. 
MR. HcGOUGH' That is all I have. 
EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MS. NAUGHTON: 

e Is Mr . Mattes related to anyone on Senator Kerry's 
staff, do you know? 

A I do not know that as a fact, but I have been told 
that his sister has something to do with Senator Kerry. 

2 Did you learn that befoxa you spoke to him about 
the substance of this case? 

A Well after. 



UNCUSSIHED 



48 



Hxnz- 

1103 
IIOM 
1 105 
1 106 
1 107 
1 108 
1 109 
1 1 10 
1111 
1 1 12 
1 1 13 
1 1 IM 
1115 
1116 
1117 
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1119 
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1121 
1122 
1123 
112M 
1125 
1126 
1127 



MmM -■ 



HIR153002 mill. I U.'i.,kk< ai II PAGE U6 

2 So you didn't Know, whan you wara spaaklng with hin 
in August, that ha perhaps had a zaiativa on tha staii? 

A I did not. 

2 Did Sanator Kazry maka this ttip aspaciaily for 
this puzposa oz was ha in tha azaa foz anothaz zaason? 

A I hava no idaa. 

fi But ha was alona at tha saating with Hattas? 

A Thaza was sonaona alsa with hin who was in and out, 
but ha was bozzowing tha ofiica oi a Sada County 
conmissionaz, ha was using that ofiica. I don't know what 
alsa ha was doing thaza. 

Q Was it in a county govarnnant building? 

A Yas, tha Hatro Dada Building. 

S Tha Apzll Mth maating. tha talaphona oall. whan you 
say that Lowall Jansan's nana caaa up oz was zaiazzad to, 
was it as ii Hz. Kallnaz was saying. ''Oh. Lowall Jansan, ' ' 
oz was ha saying. ''I will do that. Lowall.'' oz. ''That 
Hill happan, Hz. Jansan'*? 

A I don't zanaabar . I do know that Hr . Jansan's nana 
caita up . 

fi Do you zananbaz which pazt--iizst nana, last nana? 

A I think tha iizst nana noza thtin tha full na*a, but 
I think both pazts cama up. 

e Hhan ha zaiazzad to Lowall. did it sound lika ha 
was zaiazzing to a thizd pazson, in othaz words. ''Lowall 



UNCLASSIFIED 



49 



NAME: 

1128 
1 129 
1 130 
1131 
1 132 
1 133 
1 134 
1 135 
1 136 
1 137 
1 138 
1139 

1 mo 

1 1U1 
11142 

1 m3 
1 m>4 

1 1i45 
1 1(46 

1 m? 

1 148 
1 149 
1 150 
1151 
1152 



■;::::• JNGLASSIRED 



PAGE 47 



A Hh*n h« was on th« phona? 

S Y«s. 

A I don't remember. I really don't. 

2 When you say that, you had a sense he was talking 
to main Justice from other experience when you have been in 
his presence when he was talking to main Justice? 

A I have been in his office a number of times, 
waiting to talk to him, when he was talking to main Justice 
about a case, and usually it is just a feeling that I get. 
Either he has gotten off the phone and said he was talking 
to Steve Trott or, knowing that he talks to Steve Trott 
frequently, he will say Steve and talks about a case In a 
way--I guess the attitude he would have in talking to someone 
from Justice, as opposed to talking to a special agent in 
charge from the DEA or FBI. It is a way he would talk to 
these people . 

C Can you describe it? 

A I got the feeling he is more deferential to people 
from main Justice than he would be to people who were sort 
of his equals. That's all. 

S Hhen you spoke to Hs . Barnatt and Hz. Gregorie 
ooncerning youz discussions with Senator Kerry, were they 
together? 

A Yes. 



ttUtU^^tt® 



50 



KANE: 

1153 
115M 
1155 
1 156 
1 157 
1158 
1159 
1 160 
1 161 
1162 
1163 
1 16i( 
1165 
1166 
1167 
1168 
1169 
1170 
1171 
1172 
1173 
11714 
1 175 
1176 
1177 



HIR153002 



UNCUSSIFIED 



PA6K US 



e And with nz. Kallnaz? 



A No. nz . KAllnaz was In his oiiio* . This was in 
Hz. Gzagozia's oiflca. Nz . Kallnaz was in a aaating oz on 
tha talaphona oz sonathing, and couldn't ba intazzuptad. 

e Z ait coniusad now. Than Hz. Kallnaz did not haaz 
youz antiza varsion until a coupla days lataz — 

A . Ha ^avaz haazd ay antiza vazsion. Vazy bziaily ha 
cana in and said that ha navaz haazd this — navaz said this to 
anyona. and I said I navaz said you said this to anyona . 

That was a iaw days aitaz that, and Z havan't 
zaally spokan to hia sinca. 

e Hhan you mat with Hs . Baznatt and Hz. Gzagozia. did 
nz . Gzagotia say ha had attandad any pazt oi that Apzil i( 
naating? 

A Z got tha impzassion that thaza had baan maatings 
going on nuch of tha day and that Hz. Gzagozia was involvad. 
in some oi tham, and Hz. Shazi was involvad in soma of tham. 
Z was only involvad in this ona naaz tha and of my day. So 
Z got tha impzassion ha had baan involvad in maatings on 
this subjaot. 

e Ha did not zacall a phona call? 

A Aftaz wa talKad about tha maating a littla. Ana and 
Dlok zaalizad that DioK had not baan thaza whan Z was thaza 
and naithaz had Lazzy Shazf. 

fi Aftaz Hz. Kallnaz hung up tha phona and told to tha 



HNtlASSifP 



51 



UNClASSIRbi) 



KAHE: HIK153002 IJIllJLflUlll I IIbI/ PAGE (|9 



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1181 
1182 
1183 

1 leu 

1185 
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1 194 
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1196 
1197 
1 198 
1199 
1200 
1201 
1202 



peoplA in tha roon what had baan said, did Hr . Faldnan hava 
a spaciiio zaactlon to that? 

A I don't think so. It was — I don't think anyona 
zaally had much of a zaactioni I was thinking that main 
Justica had a lot of nazva tailing us not to laak a casa 
whan thay hava laakad two big ongoing invastigations of ouzs 
sinca I had baan in tha offica and whan wa still had paopla 
undazcovaz . 

But I don't think anybody said anything. It wasn't 
lika anyona was maant to say anything. It was itoza lika 
that is what thay want, lat's gat back to what wa waza 
talking about. 

fi Did aithaz of thosa two laaks to which you zafazzad 
hava to do with avidanca against anyona participating in tha 
Sandinista novamant or part of tha Nicaraguan govarnaant? 

A Tha first ona happanad in '8<4, July '8M, and it 
involvad tha Nicaraguan connaotion whara oocaina was baing 
flown up from Colombia allagadly through Nicaragua with tha 
cooparation of tha Sandinistas and than into tha Unitad 
Statas. and that had baan — that oparation had baan blown in 
Hashington bafora wa wara raady. 

fi And that was a DEA oparation? 

A Yas. it was. 

S Do you know who laakad that story? 

A I hava no — I don't know. Tha story did laak right 



UNCUSSIFP 



52 



UNCLASSIHED 



XXni MIR153002 UllULllUUll ih*U '*'*'' ^° 

1203 azound th* tiaa oi th« Oaaoczatlo Conv«ntion> though. So I 

1204 hava ay idaas, as did othats. 

1205 fi To youz knowladga. waza thaza photogzaphs takan oi 

1206 tha Sandlnlsta tzoops actually loading tha oooalna onto tha 

1207 plana? 

1208 A Oi tha Sandlnlsta tzoops — I wouldn't — no. I don't 

1209 think thaza Maza any photogzaphs oi tha Sandlnlsta tzoops. 

1210 Thaza was a photogzaph oi a pazson Mho Is allagadly a 

1211 Sandlnlsta oiilolal loading cooalna. 

1212 fi Did this stozy appaaz in tha Hlaai lazaldT 

1213 X That stozy? 
12m fi Yas. 

1215 A 'Yas, it did, as wall as aany othaz nawspapaza. 

1216 fi Tha othaz laak to whioh you zaiazzad. doas that 

1217 hava anything to do with Cantzal Aaazica? 

1218 A Nothing at all. 

1219 fi Izan? 

1220 A No. It was tha lastazn Alzllnas baggaga handling 

1221 easas. 

122 2 fi Duzlng tha aaatlng oi Apzll Mth. did you taka any 

1223 notas whila you waza in tha aaatlng? 

122>l A No, I did not. 

1225 ft Did Hz. Kallnaz? 

1226 A Z didn't notlea li anyona alsa did. 

1227 ft Oz Hz. raldaan? 



UNCLASSIHED 



53 



NAME: 
1228 
1229 
1230 
1231 
1232 
1233 
123>4 
1235 
1236 
1237 
1238 
1239 
1240 
12m 
^2U^ 

. 12(43 
UUM 
12K5 
12M6 
12i«7 
12U8 
12>«9 
1250 
1251 
1252 



HIR153002 



UNClASSiriED 



PAGE 51 



A I don't know. 

fi Do you know Hh«th«r or not this was a phona call 
that was lacaivad by Hz. Kallnaz's off lea oz dialad by Hz. 
Kallnaz's offica? 

A I don't knoH. Whan I caita In, Hz. Kallnaz was on 
tha phona . 

a Do you know whathaz oz not tha Oiiica of 
Pzofassional Rasponsibllity has any sozt of Invastigation on 
this casa? 

A I hava no knowladga of that. 

8 Hhan you told Hz. HcGough that you parlodioally had 
chackad with Jaff Faldnan on tha casa, what was his ganazal 
attltuda I'n tazns of Its prograss? Has ha happy with its 
pzogzass. was ha dlssatlsf lad? 

A It wasn't avan that nuch of a zasponsa. I would 
zun Into him In tha hall and say, ''Jaff, how Is tha Grand 
•Juzy thing going?'* Ha would say, ''Wall, no Grand Jury 
yat,'' oz. "Still working on it." or, "Working on 
somathlng alsa at tha Bonant.'' 

This would just ba passing, nayba ona santanca aach 
way. 

e Has thara avar an occasion whan you avaz zatziavad 
any wzlttan aatarials from Hz. Faldman's offica? 

A Ko. 

Q For any zaason? 



UNCUSSIFIED 



54 



UNCLASSIHED 



KAHE: HIR153002 VllVkflVl/ll ILU ^^^^ ^2 

1253 A No, I don't think so. 

125M fi Tha investigator you spok* to Hx . n«tt«s about, is 

1255 that Ralph Maastri. H-a-a-s-t-t-i? 

1256 A Yas. 

1257 Q Did Hz. Faldaan avaz indicata to you that ha had 

1258 dona his own zasaazch on tha Boland aaandmant aitaz youzs? 

1259 A I knaw ha had baan doing rasaarch. Ha didn't 

1260 spaciiically say, ''I am looking at tha Boland aitandaant. ' ' 

1261 but I knaw ha had baan doing zasaazch on tha Kautzality Act. 

1262 fi Hhan you said Hz. Hattas discussad his tzip to 

1263 Cantral Amarica, can you tall us what it is ha told you? 
126t4 A Ha said, *'I hava baan down in Cantzal Amazica, ' ' 

1265 and ha had baan idantiiying himsali as an Assistant Fadazal 

1266 Public Dafandaz and that thaza was soaa kind oi tzanslation 

1267 mistaka so tha wozd got up haza that ha was zapzasanting 

1268 hinsali as an Assistant Unitad Statas Attoznay, and ha tziad 

1269 to talk to paopla and caztain paopla had thzaatanad hiB — I 

1270 don't zaaaabaz tha naaas — and ha ialt that ha had dona wall 

1271 to gat out oi tha oountzy. 

1272 e Ra was thzaatanad in Costa Xica? 

1273 A Yas. Ma ialt that ha had baan thzaatanad. 

12714 e Did ha say it was by Aaazicans in Costa Rica oz by 

1275 tha Costa Kioan paopla7 

1276 A I think ha did say, but I don't zamanbaz axactly 

1277 what ha said. And ha was talking about John Hull and ha was 



2* 




55 



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talking about stuff h« had xaad in tha papars and stuff he 
knaw and stuff ha thought ha knaw and speculating on who was 
involved in what. 

Ha told ma a little mora about what his client had 
originally said> because I didn't know any of that. 

2 Can you tell me what he said regarding the 
allegation that Mr. Feldman or the FBI had threaten«d him? 

A He said that it wasn't really like that, that he 
had not felt as threatened as the newspaper article made it 
out to be. Because I had noticed when I read the newspaper 
article that they were talking about both John and Ralph 
Haestri, but they only quoted Ralph. 

Ke said it was sort of not a real threat, but he 
definitely got the impression — I said that I didn't think 
Feldman would do that sort of thing. He said that wasn't 
the way it was in the paper, and soma of the stuff had 
happened when the agents were there and Feldman wasn't. 

Q So Mr . Hattes was in Costa Rica at the same time 
the FBI was? 

A No, tha FBI stuff happened in Hlaal. 

a I sea. Okay. 

Tha other person from tha Senate Foreign Relations 
Committee. Is that a man named Rosenblatt? 



UNCLASSIFIED 



56 



NAni- 

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HIR153002 PAGE 54 

RPTS BOYUH " 
DCHN BANNAN 
3:30 

A I r«ally don't remember his name. 

2 Do you recall if that uas a particular subcommittee 
of the Foreign Relations Committee? 

A Could have been, but I don't really remember. 

Q Did you get any kind of cards from them? 

A No, I don't think so. I did remember Mr. HcCall's 
name . 

S Have you read any material from Senator Kerry's 
study of the Central American situation? 

A Ko, I haven't. 

2 Did Senator Kerry give you any particular guidance 
or instructions or ask you to get more information or 
anything along those lines? 

A No. He just told me that if it came to discussing 
this at any time, I should just tell the truth and be 
forthright. 

fi You said after you had considered or, I guess, had 
contacted a reporter in April of '86, there was a New York 
Times article that came out. 

A Yes. 

fi Can you recall what the New York Times article 
said? 



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A Just generally that the U.S. Attorney's Office in 
hiani was investigating possible violations oi federal 
criminal law by the contras and I think they specifically 
mentioned the gun shipment. They had some detail, I think. 

e Did it appear as though the detail came from people 
who had been interviewed, or their attorneys, as opposed to 
an internal thing? 

A I didn't--! don't know. 

S Was there any mention in that article of the case 
slowing down or being told to keep it quiet or anything like 
that? 

A Ko, there was no mention of that, but that was just 
a mention- that the investigation was indeed — that there was 
an investigation or an investigation had begun. So Z didn't 
really expect to see anything about that. 

2 Has there any discussion in your office after the 
Hew York Times article appeared? 

A Not that I heard. 

Q In terms of whom you spoke to at the main 
Department of Justice, you said you spoke to Hr . Boyd. What 
did he tell you? 

A He just basically told me what the procedure was 
here. I don't think we really talked about much of 
anything. He didn't talk about anything substantive. 

Q Did you discuss youz appearance here today with 



uNCUSsra 



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anyone, othar than Ms. Barnett, Mc . Feldman ox tha paopl« at 
main Justice? 

A Well, I mean, I told my family about it, in case my 
name came out, which it already did in the Washington Times 
last Friday somehow. 

5 There was an article in the Washington Times? 
A Yes. 

6 On Friday? 
A Yes. 

2 Can you recall what it said? 
A Well, I have only--I just got a copy oi it this 

morning. I took a brief glimpse at it. Basically laying 
out my name and what I was going to say, that I was going — 
that I was called here. But aside from talking to my family 
and a friend or two, just telling them that, you know, if 
they saw my name in the paper, you know, not to worry--just a 
little warning — I don't think I have discussed it with anyone 
else. 

Well, Mr. rtattes knows that I was going to be 
talking here. 

fi The article in the Washington Times, was there 
anything in terms of what you were going to say that was 
incorrect? 

A I didn't read it closely enough. I just skimmed 
it. I just got a copy of it this morning. Z haven't had a 



UNCUSSIHED 



59 



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chance . 



UNCUSHD 



PAGE 57 



e Do you know who might have told the Hashington 
Times about your deposition? 
A Ko, I don't know. 

ns. NAUGHTOM: I think those are all ny questions. 
HR. BUCK: X guess I will start up, then. 
EXAHIHATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY HR. BUCK: 
(2 Hhat does a professional irisbee player do? 
A At the time I was running irisbee contests and 
participating in frisbee golf tournaments and other kinds of 
frisbee enterprises for minor amounts of money, doing 
frisbee demonstrations like at shopping centers, for a 
pittance . 

S You are the first professional athlete I have 
deposed and I wanted to be sure I had that straight. 
At this April Uth meeting you mentioned the 
phrases, ''Of course we will keep it quiet,'* and, ''go slow 
on the investigation,'* or something to that effect. 
A Yes. 

e Hhy did you think that the main Justice was telling 
Hr. Kellner that? 

A Hall, I thought that the — that since there had been 
reports in the newspapers of denials from the Justice 
Department there was any investigation, that it could 



UNCIASSIRED 



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UNCIASSIRED 



PAGE 58 



b«--night want it to ba k«pt quiat d«ilnit*ly so it wouldn't 
possibly aiiact th* vot* on the aid, and thay wantad it to 
ba kept quiat and go slow so it wouldn't ba a political 
liability basically. 

e For political zaasons. than? 

A Yas. 

S And you had alzaady raad danials in tha nawspapazs — 

A I baliava that I had. I had raad danials. 

S Lat ma finish tha quastion. 

You had raad danials in tha nawspapazs about an 
invastigation oi tha oontras? 

A Yas, I baliava that Z had. 

B knd at that point in tiaa that you zaad tha 
danials. you didn't know oi any invastlgatlon. 

A Right. I knaw of nona. 

e Did it ozoss youz Bind that thaza may hava baan a 
national sacuzity puzposa bahind main Justioa asking Hz. 
Kallnaz to kaap it quiat oz go slow on tha invastigation? 

A National sacuzity puzposa? Z am not sura Z can 
dafina that tazm adaquataly in tha sansa in which it might 
hava baan usad by tha Dapaztmant. 

Z thought thay might hava. yas. oonsidazad it a 
national sacuzity puzposa. Yat I had haazd nothing, you 
know, aithar in what Hz. Kallnaz mantionad aitaz tha 
convarsation, knowing what Z had haazd of tha oonvazsation. 



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UNClASSiriED 



PAGE 59 



were there any indications of that. 



2 And let me get this straight about what you heard 
of the conversation. You were listening to it with half an 
ear while you were pulling some books. 

A Or one ear> yes. 

2 Half of your set of ears. 

And, based on that, you determined that it was for 
political reasons that main Justice was asking Hr . Kellner 
to go slow? 

A ny surmise was that it was for political reasons. 

2 Okay. Here there any--was there any other evidence, 
besides just the conversation that you overheard, that you 
surmised 'that? 

A Hell, the subject matter of the investigation 
itself, naturally, that led to that surmise. 

2 You have also mentioned that Mr. Feldman was 
excited about what he found in Costa Rica. 

A Yes, he was. 

2 Do you remember what he found in Costa Rica that he 
was excited about? 

A He thought he had, you know, evidence of all sorts 
of — he thought he had leads on all sorts of things involving 
CIA, I think, and I definitely know — I know the Kational 
Security Council was mentioned, and guns were coming in and 
the possibility of drugs and the possibility of 



UNClASSlflED 



62 



yNCiASsra 



NAnE= HZRI53002 | ||l|||_niJLI 1 1 lUV PAGE 60 

11451 assassination plots and all soits of cloak and daggat 

1MS2 things. 

1>«53 H« was very axcitad about it all. 

mSM S Okay. 

lUSS Waza you prasant at a sort of a presentation of 

IttSS evidence to Mr. Kallnaz? 

1M57 A MO/ I was not. I was just gattlng bziaf rafaxancas 

mss to things that apparently everyone had already talked about 

m59 in detail earlier. So I didn't know the details of any of 

1(460 this stuff. 

1M6 1 I just knew--the only speoifio thing, I knew that Ma 

1>(62 had pretty good evidence there had bean a shipment of 

1163 weapons from rort Laudardalel 

1>46M fi What do you know abolTi tlx. Hattas' client, Hx. 

1<465 Garcia? 

1(466 A I know absolutely nothing about nr . Garcia. aKcapt 

1(467 apparently it was his statement that started the entire 

1(468 investigation. 

1(469 2 Oo you know of any previous cases involving Hx . 

1170 Garcia? 

m7 1 A No, Z don't know of any. I believe there have bean 

1*472 soma, but I don't know of any. 

m73 e Oo you know if Hr . Gaxcla Is in jail now ox has 

1M7(4 evex been in jail? 

1>475 A I know his conviction is on appeal, but Z don't 




UNCUSSfl 



f^ 



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HIR153002 



UNCLASSra 



PAGE 61 



know whether he is in jail. I assume he is in jail. 

2 So you know he was convicted of a crime? 

A Yes. 

2 What crime was he convicted of? 

A I don't know. I think it was something to do with 
weapons, illegal possession of weapons, because the Bureau 
of Alcohol, Tobacco and Firearms was involved. ny office is 
right now responding to his appeal, but I am not working on 
the response . 

2 Mr. Garcia is the--strike that. 

Did you find it unusual that Mr. Garcia may have 
encouraged Mr. nattes to look into this? 

A 1 don't find that unusual at all. It's been my 
experience in the Southern District of Florida that we have 
lots of defendants who claim that they were working for the 
agency and, more surprisingly, occasionally it is true. 

So it is not surprising to him to look into it. it 
is more surprising if it turned out to be true. 

2 And what agency did Mr. Garcia say he was working 
for? 

A I don't Know. 

2 Mr. Mattes didn't tell you that? 

A He may have, but I don't really know. 

2 What was Hz. Mattes' puzpose. then, in talking to 
you initially, or do you knoM? 



llHtUiSSW 



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HIR153002 



UNCLASSra 



PAGE 62 



A I don't know. It could have been just a war stoiy 
again. Ue tiade a lot oi them. 

2 And he followed it up? 

A I think he originally spoke to me about this guy 
who was getting railroaded because he was working, really 
working ior somebody--! think this was in January or 
February. Ue were like riding exercise bicycles next to 
each other and I wasn't even listening. 

2 You said something about Mr. Garcia working for a 
Government agency? 

A Or working with, you know--yes. And I filed it in a 
category with so many others I had heard and didn't think 
about it at all. 

S I think you also mentioned previously that you 
believed Uashington--this was in reference to main Justice — 
was lyiag because there was an investigation going on of the 
contras, something to that effect. 
This is a later denial. 

A There was a denial, yes. I reB«mber reading a 
denial--it may have been in early nay--where they either 
denied the investigation was going on or they said the 
investigation was closed--! am not sure which--neither of 
which would have been true. 

C Hhat was the investigation of, if you remember? 
What investigation were they referring to or not referring 



\lHt\A^SW 



65 



HXR1S3002 



to? 



UNCLASSIFIED 



PAGE 63 



A I belittve that they vara icietiing to an 
invastlgation oi violations of gun--tha Arns Export Control 
Act, allegations that tha contras uara running drugs, 
allegations that tha Govarnnant personnel ware improperly 
involved in all oi this stuff. 

I think it was just like a one-inch thing in the 
New York Times that I read. 

S Hare these investigations of the contras, the 
investigations that your office was performing, or were they 
related to American activities? 

A I believe they involved both. I believe that there 
were cont'ras involved with violating the Arms Export Control 
Act and also violating the Neutxallty Act, and there was 
also the question of whether Government personnel were 
involved in violation of the Neutrality Act and the Boland 
amendment. 

e So there were actually contras In America Involved 
in these; Is that correct? 

A Yes. In niaml. yas. 

ft In the April >i meeting you aantloned two things, 
one going slow on the Investigation and the other about 
keeping it quiet. 

Did you have a problem with both of those 
statements or was It mora that you had a problem with going 



UNCLASSIHED 



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PAGE 6H 



slow on an invastigation? 

" . A I had a ptoblen--! had no i«ason to baliava that u* 
uera going slou on tha invastigation. In fact, it was my 
impiassion that wa uara not. So I had no problan with that. 

2 Did you hava a ptoblam with baing told to go slow, 
I guass? 

A . I di,dn't think it was right. And than, you know, 
they can tall us whatavar thay want, but navarthalass it 
doasn't maan wa ata going to do it. I had mora oi a problam 
being told to kaap it quiat, though oi course I thought we 
would in general, when they were telling us to keep--lt was 
my impression we had been told to keep it quiet so as to not 
catch them in false denials. 

So that is why, once the fact that the 
investigation existed came out, I had no real problem with 
what was going on and I didn't really even think about it 
for a number of months. 

S Hhat was the basis for your suspecting that main 
Justice leaked the DEA operation? 

A That main Justice leaked the SEA operation? I am 
not sura it was main Justice necessarily. In fact, people 
suspected that it was the Vice President's Task Force 
because apparently the Vice President himself had made tha 
announcement which was the actual leak. 

fi Hhy did you believe that that was the case? 



UNCLASSIFIED 



67 



\i\ 







HIR153002 lll^UkltWW- p;iGE 65 

A Hall, Hhftn the Vica Pi«sid*nt — I b«li«va th« Vica 
Prasidant was quotad as saying that tha Nicaxaguan — tha 
Sandinistas waza running cocaina into tha Unitad Statas. 
And whan ha said that tha investigation wasn't iinishad and 
we still had people undezcovez, in fact, and ue were not 
zeady to close the invastigation-'So natuzally I assumed that 
it had been, you know, leaked. That is what I call a leak. 
S You saw the stozy? 

A I saw the stozy. We Heze--the stozy cane out. My 
division was told to stazt wozking on the extzaditlon ioz 
Jorge Ochoa and, in doing that, I stazted heazing from the 
people, talking to the people who were conducting the 
investiga'tion, what had happened, and what they ielt had 
happened, getting their affidavits pzapazad for tha 
extradition. 

MR. BUCK: X have no mora questions. 

HR. McGOUGH: I have a few more. 
FURTHER EXAHIKATION ON BEHALF OF THE SENATE SELECT COKHITTEE 

BY MR. ncGOUGH: 
S Could you distinguish for ma a little bit bettez 
between tha January-Fabzuazy discussion you had about this 
with Nz . Nattas , about tha Gazcia case, and youz August 
discussion? 

At tha time in Januazy-Fabzuazy you had no 
independent knowledge of that case: is that zight? 



UNCLASSIFIED 



68 



UNClASSinED 



HAMC: HIR153002 lJI^U|.flLlUI I ILU ^'^°' ^^ 

16011 A In January-Fftbiuaty w« w«ra lik« just in tha gym 

1602 and he uas tailing na about soma casa ha had, soma daiandant 

1603 who was getting zailtoadad, ha was raally working ioz soma 
160U agancy. And I mean it is just a dim--I haar this sort of 

1605 thing all tha tima from paopla. 

1606 Q Do you zacall whathar ha mentioned any HSC 

1607 involvement? 

1608 A Kot leally. I turned it off. I remembez him 

1609 mentioning it. 

1610 S And you didn't have any input into the conversation 
16 11 because you had no information about it. 

1612 A Ko. I was just riding. 

1613 e Between the April tth meeting and — I just want the 
161>« record claar--batween the April Uth meeting and January 1-- 
16 15 January 1 of '87, do you recall any conversations with 
1616 Kellner. Barnett or Oregorla about tha Garcia casa? 

16 17 A Between January •*-- 

16 18 e Between the April Uth meeting and January 1. I am 

16 19 picking January 1 arbitrarily to cut off before tha — 

1620 A I don't think so. I mean. Gregoria did mention to 

162 1 me, * ' Be available to help Feldman if ha needs legal 

1622 research done,'' but nothing beyond that. 

1623 I may have asked Gregorie the same question I would 
162M ask Feldman every so often, ''How is the investigation 
1625 going?'' And ha would say, ''It is going.'' or this and 



mussra 



69 



UNCLASSIFIED 

that--nevar anything substantiva. 



HIR153002 



PAGE 67 



S L*t's go back to your telephona call to Hs . Shapiro 
and Mr. Hyatt. 

I bftlieve you said at that tin* that you were 
worried that the paopla in Washington ware lying in saying 
that there was no investigation. 

A Right. 

2 And that that sparked your call. Is that right? 

A Yes. 

S But that during that call you didn't make any 
mention of this telephona call you had overheard; is that 
right? 

A Ho, I didn't. 

2 li you were going to be offering charges or 
intimations against the people at main Justice, uhy didn't 
you mention the telephone call that you had overheard? 

A Because I was deliberately being vague to start 
with, to see if- anyone was interested. For all I knew, this 
information uas already floating around. As it turned out. 
it uas. So I just wanted to-- 

2 But a piece of information that clearly wasn't 
floating around was this telephone call that you had 
overheard . 

A Right. I dldn* t--which I didn't know. I might have 
told them about it had I gone further. But it just didn't 



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go any further. 



iGUSSIflEO 



PAGE 68 



e And you didn't push it further or attsmpt to push 
that out into the conversation? 

A Mo. because what really bothered me at the tine was 
the iact that it was being kept quiet. I didn't think that 
we were--that my office was going to be delaying the 
investigation in any way. As we sit here, I have no reason 
to believe that we have delayed the investigation in any 
way. 

S But just so we are clear on this, you were 
disturbed by the Department of Justice supposedly making 
this request of your office? 

A Right. 

B And a few days later you were speaking to a 
reporter with an idea, at least, of offering information 
about that case? 

A Right. 

2 That was less than flattering about the Department 
of Justice. 

A Right. 

S Yet you didn't volunteer anything about this 
telephone call that you had overheard? 

A Hell, that was all — you know, that would be 
everything I had to volunteer really. 

fi You didn't mention that to thea? 



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PAGE 69 



i Ho? 

A Ho, I don't think I did. 

Q Prior to joining the Fadeial Government, were you 
politically active at all? 

A Not really. I worked in a canpaign in 1972--'76, 
excuse me . 

S What campaign? 

A The Fred Harris Democratic primary in New 
Hampshire . 

Q Here there any other formal political activities 
that you can recall? 

A Formal political activities? 

2 As iar as connections with campaigns. 

A In 1972 I did work ior a minor party Congressional 
campaign in New Jersey. 

2 Hhat was the minor party? 

A I think it was the Peoples Party, a guy named Jim 
C lama!>Ky or something. 

2 Okay. 

A That is about as iar as I did go. I haven't really 
been that active. 

e Let me finish up and then go back to the key 
meeting, which is the April t meeting. 

Obviously what you made is a fairly serious charge 



UNCLASSIFIED 



72 



UNCUSSIFieB 



NAME: HIR153002 llllllLnUtJII ll-LI PAGE 70 

170 1 about iniotnation that was convayed iron main Justictt to 

1702 youi oiiica. I want to kind of run down just a seiies oi 

1703 aspects of it. 

170'4 You said you wera listaning to it with just ona 

1705 ear-- 

1706 A Right. 

1707 2 --as you wara doing other things, and that you only 

1708 heard one side of the conversation and than you heard what 

1709 Mr. Kellner said-- 

1710 A Definitely. 

1711 S --afterwards. 

1712 A Yes. 

17 13 2 You wara awara that Mr. Kallnar denies that there 

17 1(4 were any such requests made to him by the Departnent of 

1715 Justice? 

1716 A Yes. 

17 17 fi Is it possible that what you overheard was a 

17 18 request by the Department of Justice to keep them posted, as 

1719 opposed to a request to go slow? 

1720 A No. I don't recall that at all. 

172 1 fi In other words, you are confidant enough with what 

1722 you heard and saw that you would, in your mind — it is not 

1723 consistent with what you heard and saw that the Department 

1721 of Justice could have said keep us posted on what is going 
1725 on. as opposed to go slow. 



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PAGE 71 



A Th«y could have said that as wall, but that is not 
an ' ' instead oi . ' ' 

S I realize they aie not inconsistent, but I am 
suggesting that in your own nind you are sure that it uas 
''go slow'' and not as a substitute, ''keep us posted''? 

A '*Go slow'' is a paraphrase, but something to that 



•iiect 
Q 
A 
S 



But it wasn't just to ''Keep us posted'*? 
Ho. 

One other question. Hhen you--what is the procedure 
in your office as fat as checking In and checking out? Do 
you sign in in the morning, does someone sign you out at 
night? 

A No. 

fi Is there any control — do receptionists keep track of 
who is in or out? 
A Ko. 

fi Any log book ox anything? 

A Not in my division. I don't think In any division, 
fi Mom about In the division that would have Hx . 
reldman, Hs. Baxnett, Hx . Gxegorle. Hx. Shaxf? 

A Not as fax as I know. I think Feldman was in Major 
Cxlaes then, and in fact X don't think in any division of 
the offloa do people sign In ox sign out. 
HK. HcGOUGH: That Is all I hav* . 



minssro 



74 



NAME: 
1751 
1752 
1753 
1754 
1755 
1756 
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176 1 
1762 
1763 
17614 
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HIR153002 



UNCLASSIFIED 



PAGE 72 



nS . NAUGHTOK: I hava a couple more. 
FURTHER EXAMINATION ON BEHALF OF THE HOUSE SELECT COHHITTEE 
BY MS. NAUGHTON: 

2 Ace you still in the appellate section? 

A Yes, I am. 

2 Do you still enjoy it? 

A Yes. vexy much. 

2 Do you have any plans to leave in the immediate 
future or near future? J 

A No. 1 

2 So ue can get ahold of you for post-questioning at 
the U.S. Attorney's Office? 

A Yes. I just bought a ticket to the NBA team that 
is coming in in October of '88, so I should be there at 
least until the end of the season. 

2 Okay. 

I have one more question regarding the civil suit 
that was referred to as the Honey civil suit, who was the 
plaintiff in the matter that Mr. Mattes spoke about. Hava 
you read anything about that suit? 

A I think soma paopla ara suing a lot of folks in 
Miami like because they say that the CIA triad to blow up 
Eden Pastora, but I don't really know much about it. I do 
know it just survived a motion for dismissal within the last 
month or two in Miami District Court. 



UNCLASSIFIED 



75 



HIR153002 



UNCUSSiRED 



PAGE 73 



NAME 

1776 fi Uh«n were you iirst made aware oi this suit? 

1777 A Z think when I spoke to John Mattes about why my 

1778 nane--not ny name, but why what I had said appeared in some 

1779 article, and he--I am not sure whether these people were 

1780 mentioned in the article or John said, well, you know, I had 

1781 told someone who told them, or I told them and they had said 

1782 they wouldn't tell anybody but they did. 

1783 2 Okay. 

178U A I don't really know anything about the suit. 

1785 S Have you ever met any oi the plaintiffs? 

1786 A I don't know who--not to my knowledge, I don't know 

1787 who the plaintiffs are. 

1788 Q Have you ever spoken to any reporters from Time 

1789 magazine? 

1790 A Reporters from Time magazine? 

1791 Q Yes. 

1792 A No, I haven't. 

1793 fi Newsweek? 
179U A No. 

1795 e U.S. News £ World Report? 

1796 A No. 

1797 e And I gather you have never spoken to any reporters 

1798 from the Washington Tines? 

1799 A Never. 

1800 ns. NAUGHTON: That is all. 



76 



DHtUSW 



HAHE: HIR153002 1 1 ll|jl_nW W ■ ■ ■ ■" "^ pAGE 7t4 



1801 
1802 
1803 
18014 
180S 



HR. McGOUGH: Thank you. 

ns. NAUGHTON: That concludes the deposition. 
Thank you very much. 

[Uheieupon, at 3=55 p.m. the deposition uas 
concluded . ] 



uNcussra 



77 



BtKSOGRAPmC MDdJTKS 
UnrcTisad ud Unadlted 
Not for QoBtatiMi «r 
Dnpiicatlaa 



USSIFIED 




Committee Hearlnci 

tiitm 
UJ3. HOUSE OF REPRESENTATIVES 



w 



Partially Declassified/Released on /-P'^ 'H 
under provisions of E.O. 12356 
by N. Menu, National Security Council 



OFnCI OF THK CLEBK 
OOm af OOdal B«wta 



UNCLASSIHED 




OQFf IW 



jOOPIQ 




79 



NAHC: HIROmOOO 



UNCLASSIFIED ... 



RPTS BOYUn 
DCHN SPRADLIKG 

DEPOSITIOM or ROBERT H. LILAC 

Tuttsday. Fabzuaxy 10, 1987 

Housa of Raprasantativas, 
Selact Connittaa to Invastlgata 
Covart Azns Transactions with 
Izan, 
Washington, D.C. 



Tha salact comnittaa sat, puzsuant to call, at 11=00 a.m. 
in Room B-336, Raybuzn Housa Oifioa Building, Charlas 
Tiaiaz, Spacial Daputy Chiai Counsal to tha Salact 
Committaa, pzasiding. 



Partially Declassified/Released on /•f'lRjdJ- 



under provisions of E.O. 12356 
by N. Wsnan, National Security Council 




ii" 



80 



ur 



HAHE: KIROmOOO w--w— --ww-- -— — p^g^ ^ 



Hharaupon, ROBERT H. LILAC, after having baen first 
duly sworn, was called as a witness and testified as 
follows ■■ 

EXAHINATIOK 
BY HR. TIEFER: 

S My name is Charles Tiefer, I an Special Deputy 
Chief Counsel to the House Select Coaaittee to Investigate 
Covert Aras Transactions with Iran. 

Hr . Lilac, you have been sworn. You understand the 
significance of the oath you have taken? 

A I do. 

e You understand that your testlaony is under penalty 
of perjury? 

A I do. 

e Could you give a suaaary stateaent of your 
background, where you went after you graduated and what you 
did, the various jobs without bogging down early on here, 
but to get up to your Air force career and ultiaately to the 
NSC. 

A Okay . 

I graduated froa a college and entered the Air 
Force in October 1958 and went into pilot training shortly 
a<ter that. I was an Air Force pilot for 20-plus years in 
the United States Air Force, test pilot, and did soae--had 
various asslgnaents around the world, Vietnaa, as well as 



KlASSm 



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NAME: 

>4X 
HS 
46 
47 
(48 
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HIR041000 



OlLASSinED ,... 



England, and in 1975 in Saudi Arabia which ara ny overs«as 
assignmants . 

I came to thtt Pantagon in 1979 as the Chief of the 
Saudi Managemant Division managing foreign military sales 
programs of the U.S. Air Force with Saudi Arabia. 

I stayed there until early 1982, and moved over to 
the National Security Council working the area of foreign 
assistance budget and security assistance programs. 

I retired, my last day at the KSC was the last day 
of 1983 and my retirement from the Air Force effective 1 
January 1984. At that time I went in the private sector and 
formed my consulting company. Lilac Associates, a business 
with major U.S. aerospace companies doing business in the 
Middle East and some other places around the world, as well 
as doing consulting work in aviation and communications 
matters for the Saudi Embassy. 

fi You brought a number of documents here pursuant to 
subpoena. 

A I did. 

NX. TIEFERt Let's have them marked as exhibits. I 
will show them to you one by one and if you would identify 
them briefly. I don't think we will dwell at any great 
length on any of them in paztloular. 

X show you a document that appears to be a Xerox of 
a passport and I ask you if you can identify it. 



W 



ICLASSIHED 



82 



BNCUSSm 



HAHE: HIR0U1000 -'— "■^r%#i| |(.U PAGE 4 



THE WITNESS: Yas , this is my passport t«qu«stttd in 
accoxdancA with th« subpoana. 

nit. TIEFER: If you would maka this as Exhibit 1. 
I Tha iollowing docunant was iiaikad as Exhibit RHL- 
1 ior idantif ication: ] 

xxxxxxxx INSERT 1-1 xxxxxxxx 



UNCLASSIFIED 



83 



NAME: 
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mb 



HIR041000 -w^H Ifc,^ PAGE 5 

MR. TIEFER: Actually to maka a us«ful record, if 
nr . Gala is agraaabla. I would not want to taka his copy o£ 
tha deposition subpoana auay from you. I will later on 
attach a copy of tha subpoena at a certain point. 
MR. GALE: Ko problen. 
BY HR. TIEFER: 
e But can you identify this docunent which has the 
word ''Subpoena for Deposition'' in the upper right corner? 

A Yes> this is the subpoena that was given to me 
requesting my appearance and bringing some documents here 
today. 

2 You have examined this subpoena. 
A Yes, I have. 

e You have provided all the documents covered by it? 
A Yes, sir, in consonance with counsel's discussion 
with you. 

HR. TIEFER: He will obtain a Xerox copy of that 
subpoena and it will be marked as RHL-2. 

[The following document was marked as Exhibit RHL- 
2 for identification: ] 

xxxxxxxx conniTTEE INSERT xxxxxxxx 



ONOLASSIRED 



84 



UNCLASSED 



MAHE= HIR041000 w • ■ w«» i^T ^r ■ ■ ■ fcl# pjlGE 



98 
99 

100 
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108 



BY HR. TIEFER: 
Q I show you a lattar datsd F«bzuary 6th, signad by 
Jaaas Gala, and ask you ii you can idantify that. 

A Yas, this is a lattaz ^ignad by Hz. Gala to you, 
idantiiying tha docuaants providad in naking a requast on 
coniidantiality oi zacotds . 

HK. TIEfER: Ha will attach this as RHL-3. 
(Tha following docujtant was iiazkad as Exhibit RHL- 
3 iot idantiiication: ] 

MMMXMMMM XNSERZ 1-2 *****»*M 



mmm 



85 



MAKE: 
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1 12 
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1 m 
ns 

1 16 
1 17 
1 18 
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HIROmOOO 



UNCLASSIFIED 



PAGE 



BY HR. TIEFER: 

fi I show you six docunsnts, aach of which consists oi 
a largs nunbar oi pages staplad together that appear to be 
calendars and ask if you could briefly describe each one. 

We will identify then all collectively as one 
exhibit. Froii top to bottom. 

A The first one is my appointment calendar for 198U. 
The second one is my pocket appointment calendar for 1985. 
The third is my pocket calendar for 1986. The next three 
are 198>4, 1985, and 1986, my desk calendars. 

fi Z see you have rearranged them somewhat but will it 
be possible to identify from the years on the calendar what 
years they are for? 

A I think that they — they will, yes, if not I will be 
glad to make an annotation on here. I have them in 1985, 
1986. and this is-- 

fi Let's stop there. If you would write the year on 
each one. 

A Yes, let's clarify that. I had that I thought but 
on this one it appears to be missing. This is 1985, 1986, 
198i<. 

e Rather than explain, I see the year is written in 
•aoh of the ones that you are putting aside. 

A Now, yes, sir, they are identified in the proper 
order with the years. 



UHCUSSIRED 



86 



Hkni- HXR0t«1000 




AGE 



8 



13U 
135 
136 
137 
138 



nS. TIEFEK: Lat's nark them all as RHL-U. 
[ Th« follouing docunsnts wer« mark«d as Exhibits 
RHL-I fox idsntiiication: ] 

xxxxxxxx IKSERT 1-3 xxxxxxxx 



mmB 



87 



UNCLASSIFIED 



KAHE: 
139 

mo 

mi 

1U2 
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ISO 
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HIR041000 



PAGE 



HR. TIEFER: Off the record for a second. 

(Discussion off the record.] 

riR. TIEFER: Let's go back on the record. 

BY MR. TIEFER: 
2 I show you a stack of short documents, each of 
uhich consists of several pages stapled together. The top 
one appears to be a Senate subpoena and I ask you if you can 
identify this stack of documents. 

A Yes, the top documents is the subpoena from the 
Senate Intelligence Committee requesting documents. The 
remaining pieces of paper, one a letter that ue responded ie 
the Senate with, identifying the documents. The remainder 
are the documents that we presented in response to the 
Senate subpoena. 

2 And if I can ask you about the bottom document in 
the stack — in fact why don't we take the stack of all the 
documents except for the bottom one and mark that as 
exhibit, collectively as Exhibit 5. 

[The following documents were marked as Exhibit 
RHL-5 for identification: ] 

xxxxxxxx XNSERT 1-4 *»»»»»»* 



IJNCLASSIFIED 



88 



llfUSSIflEB 



hahe: hirouiooo ■ ■"■'^ page io 



161 
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17U 
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BY HR. TIEFER: 
2 And I shou you th« docua«nt which was at the bottom 
oi tha ptavious stack which was produced as you say pursuant 
to tha subpoena iron tha Senate which has the words 
''Promissory Note'' on it and ask you if you can identify 
that document? 

A Yes. Tha previous documents were all related to 
purchase of a Haule miroxaft. This document is in fact the 
note that myself and three other individuals took out to pay 
for the aircraft. This is a *60,000 note that was paid off 
in August of 1985. The remainder that was paid out. 
nR. TIErER: Let's mark this as Exhibit 6. 
[Tha following document was marked as Exhibit RHL- 
6 for Idantification- ] 

*»***»** INSERT 1-5 xxxxxxxx 



uNcussra 



I 



89 



MAKE: KIROmOOO 



UNCLASSIHED 



PAGE 1 1 



177 
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BY HR. TIEFER: 

e I shoM you another s«t of documents, each 
consisting oi several pages stapled together, the top one of 
which is addressed to Mr. Robert Lilac, and it is on 
stationary uith the letters STTGI at the top and ask you if 
you can identify this stack of docunents . 

A Yes. These documents are as requested by the 
subpoena, any association I had with Stanford Technology or 
Richard Secord, and this is a letter contract, contract and 
three invoices for trips that I made in relation to a 
consulting contract I had with Stanford Technology Trading 
Group International. 

HR. TIEFER! Let's mark this as Exhibit 7. 
[The following documents were marked as Exhibit 
RHL-7 for identification: 1 

xxxxxxxx IHSERT 1-6 xxxxxxxx 




90 



NAHE: 

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2m 

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HIROmOOO 



UNCLASSIRED 



PAGE 12 



BY HR. TIEFER: 

8 Is ny understanding coxrect that if ha take 
Exhibits 1 through 7 and put aside the subpoena iron the 
House itself and the letter of your counsel, that all the 
other documents, all the other exhibits that have been 
identified consist of all the docunents you are producing in 
response to the subpoena? 

A Yes, in response to the subpoena as clarified "^ 
between you and ny counsel. 

Q And the clarification you are referring to is the 
letter from Mr. Gale? 

A The letter as well as the fact that you just wanted 
my telephone numbers and bank accounts. 

2 Good point. 

I show you a document that says at the top 
''Subpoena Dated January 20, 1 987-Attachment A'' and ask if 
you can identify that? 

A Yes, this is in response to your paragraph >4 of 
Attachment A to the subpoena in which it asks for my bank 
accounts, and telephone numbers used by me and in 
clarification, that was clarified both with myself and 
personally and my company. Lilac Associates. 
-, HR. TIEFER: Let's mark that as Exhibit 8. 

(The following documents were marked as Exhibit 
RHL-8 for identification: 1 



UNCLASSIFIED 



91 



UNCUSSIRED 



NAME: HIROmOOO WIIVLriUUII ILU PAGE 13 

219 
220 XJicxxxxxx INSERT 1-7 «**«**** 



UNCLASSIFIED 



92 



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- 23U 
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2>4M 
2U5 



HIROUIOOO 



UNCLASSIFIED 



PAGE 1(4 



BY HR. TIEFER: 
Q And to ask the quastion again that I asked beiore, 
now that we take Exhibits 1 through 8 collectively leaving 
aside the House subpoena itseli and Hr . Gale's letter 
itself, do they represent all the documents that you have 
produced in response to the subpoena? 

A Yes, as I stated, in clariiication to the--basically 
in response to the subpoena as clariiied between my 
discussions with yourseli and you asked for copies of all 
the documents we provided to the Senate Intelligence 
Committee. Can we take a break? 

HR . GALE: Can we go off the record a second? 
MR. TIErZR: Off the record. 
[Discussion off the record.] 
BY MR. TIEFER: 
S I show you a document with the heading ''Articles 
of Incorporation'' at the top and ask you if you can 
identify it. 

A Yes, this is a copy that I have of the Articles of 
Incorporation of American Marketing and Consulting, which 
was the company that the individuals and I had bought the 
naule aircraft from to put the airplane in. 
-t HR. TIEFER: This will be marked as Exhibit 9. 

(The following document was marked as Exhibit RHL- 
9 for identification: ] 



ONCUSSIHED 



93 



UNcmssinED 



NAHE: HIROmOOO w - - .^^ PAGE IS 

2(46 
2(47 «xxxxxxx INSERT 1-8 xxxxxxxnc 



uNcussra 



94 



UNCUSSIHED 



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HIROUIOOO PAGE 16 

BY HR. TIEFER: 
S Do Exhibits 1 through 9, putting asid« th« House 
subpoena and Mr. Gale's letter, represent all the docunents 
you are producing in response to the subpoena? 
A Yes. 

Q And they satisfy everything in the subpoena with 
the clariiications of Hr . Gale's letter, is that correct? 
A Yes. as I understand it. 

Mr. Gale and the--the only one that--yes, as 
clarified about the bank accounts and telephone nunbers that 
you wanted ny personal and business, yes. It does. 

fi I show you a letter, I show you a docunent the top 
page of which appears to be a letter of January 29, 1987 to 
Robert H. Lilac and ask if you can identify this document, 
the second page appears to be a subpoena addressed to Robert 
H. Lilac. 

A Yes, this is a letter to me from the Office of 
Independent Counsel, Judge Walsh, signed by Randy Bellows, 
that is in fact a subpoena for documents in relation to the 
natter we are talking about. 

HR. TIEFER: Let's mark this as Exhibit 10. 
(The following document was marked as Exhibit RHL- 
1« for identification: ] 

xxxxxxxx IKSERT 1-9 xxxxxxxx 



mimm 



95 



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KNCUSXIflfO 



PAGE 17 



BY HR. TIEFER: 

2 And I Show you a sinilac letter and the second page 
of which also appears to be a subpoena, except it seens to 
be a subpoena addressed to Robert H. Lilac on behalf of 
American Marketing and Consulting Company and Lilac 
Associates, and ask you if you can identify that? 

A Yes, this is again a letter from the independent 
counsel. Judge Walsh, signed by Randy Bellows asking for the 
same materials but in relation to American Marketing 
Consulting, the company that he formed that bought that 
Haule aircraft that ue talked about previously and Lilac 
Associates, just my own company, consulting company. 
MR. TIErSR: Let's mark that as Exhibit 11. 
(The following document was marked as Exhibit RHL- 
11 for identification:] 

xxxxxxxx INSERT 1-10 xxkxxxxx 



UNCLASSIFIED 



96 



UNCUSSIFIED 



Kknt- HiRomooo page is 



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3m 



BY HR. TIEFER: 

fi Ml. Lilac, you hava stated that at a caztain point 
you Hozkad ioz th« NSC. Did you know Olivar North beiora 
you workad for th« NSC? 

A Yas, I did. I nat him in 1981. I am not sura of 
tha axact data, uhan Olivar North was at tha NSC and in 
ralation to tha briafings that wa waza providing associated 
with tha sala oi tha AHACs to Saudi Arabia. Olivar North 
Mas an NSC staifaz Mho had rasponsibllltias ior scheduling 
our brieiings. That Mas my knoMladga with him at that tima . 

e 

S Baiora you H»nt on to tha NSC, did you knoM Olivar 
North in any context other than in connection Mith the AHACs 
sale? 

A No. I did not. 

fi Once you went to the NSC did you knoH Oliver North 
there? 

A Yes, I did. 

S And in whet context? 

A He were oolleegues. Me Mere steii members oi the 
NSC staii at the same time. Initially mo didn't Mork in the 
same organisation, but in a subsequent reorganisation mo 
Norked in the same division, the political-military division 
o* tha NSC. 

fi And Hhat Mere the pxojeots that you might have 
Morked together on in one May or another? 



UNCUSSIHED 



97 



KAHE: HIROmOOO 



iiNcussife 



PAGE 19 



A Wa really didn't have any projects per se that we 
worked on. I had responsibilities for the foreign aid 
budget, so as I was coordinating NSC staff members' inputs 
associated with pieces of the budget as it applied to 
regions around the world, associated with Central America, I 
particularly recall on El Salvador, foreign aid for El 
Salvador interface with Oliver North on that. Really no 
other interface with him that I recall. 

THE WITNESS: Kith the staff I had since I was a 
senior ranking military officer to Oliver North, my boss 
sometimes had me responsible for administrative management 
of the NSC. 

HK. TIZFER: Let's go off the record. 

(Discussion off the xecoxd.] 



UNCLASSra 



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liNCUSSIFIED ,. 



GE 20 



DCMH SPRADLING 

MR. TIEFER: Back on tha record. 
BY HR. TIEFER: 

2 I will note for the record that because of the 
ringing of the telephone we occasionally go on and off the 
record here . 

Go ahead . 

A For administrative natters such as personnel 
administration, secretarial, overtime and office equipment, 
things like that, the administrative things I had interface 
with Ollie in that regard, and we wera colleagues on a day- 
to-day basis, we were there in the offices, my office wasn't 
in the same physical location as his but I saw him not quite 
daily but I saw him quits often. 

2 And without getting into a lot of details about who 
did what, did you know what secretaries or other clerical 
people assisted Oliver Korth? 

A Yes. The primary secretary working with Oliver 
Horth was Fawn Hall. Hhan Fawn wasn't available there were 
three secretaries located in the same physical office and 
handled phones and sometimes some paperwork. 

2 Who were tha others? 
-. A I don't recall those names. 

2 And do you know professional people who worked, non- 
clerical people who worked with Oliver Horth? 



a 



mma 



99 




m 



HIROmOOO PAGE 21 

A Yes, thet« weza saveraj. peopla who workad with 
Olivar North and othar parts oi tha NSC staff. 

S Can you nama sona of then? 

A The only ones that I recall were Roger Fountain, 
who was at the NSC at that tine; and then at a later time 
Constantine Mnkiis . Those are the only two that I recall. 
There were approximately, roughly lO people on the HSC, 
professional members on the NSC at that time and I don't 
recall all those names . 

There is one additional nama, of course, and that 
was Oliver North's direct supervisor, Don fortier. 

2 As I have informed you we may come back at a later 
point and ask you further questions about the NSC period. 

After you left the NSC you formed Lilac Associates? 

A That is correct. 

Q And what was tha purpose of Lilac Associates? 

A After I retired I wanted to iorm--wanted to go into 
the consulting business and formed Lilac Associates as a 
management consulting firm, and doing consulting work with 
firms primarily doing business in the Middle East because tf 
my experience was primarily in Saudi Arabia and the Middle 
East in security assistance. 

T C Do you still do consulting work through Lilac 
Associates ? 

A Yes, I do. It is my only company. 



iiMsm 



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UNCLASSIFIED 



PAGE 22 



2 Did you know Richard Sttcoxd when you w«ta in th« 
Air Foxca? 

A Yas, I first nat Richard Secord in 1979 whan I cana 
to tha Pantagon and ha was my diract supervisor. Ha managad 
Aiz Forca International programs. 

2 Lat ma varify that> you did not know him in 
Southeast Asia? 

A I did not know him any tima previous to that. 

fi Plaasa go ahead . 

A I iirst met him in 1979 and came to work ior him 
managing Saudi programs with the United States Air Force and 
I have known him since 1979. 

2 Zi we could go through the vai:ious steps oi Richard 
Seoord's career from 1979 on, and how at each point you 
either knew him and worked with him or didn't know him and 
didn't work with him starting in 1979. I gather that you 
started knowing him aitez he left Iran? Had you known he 
had been in Iran prior to your knowing,? 

A Prior to knowing him, no, I didn't. After I went 
to work for him In 1979 I knew that a previous assignment he 
had was in Iran. 

2 Okay, but you had not known him while he was in 
Iran. 

A Ko, sir, I did not. 

2 The work he was doing when you first knew him was. 



UNCUSSIHED 



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Hxnz- 

ttO<4 

405 

•406 
407 

toe 

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i<10 
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412 
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419 
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HIR041000 



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PAGE 23 



li you could Zftcai.1. 

A H« was Diractoz of Aiz Fozca Intaznational 
programs , which meant primarily responsibility for foreign 
military sales programs around the world for the United 
States Air Force. 

S And your relation to him while he was doing that 
was what? 

A I was a division chief underneath him. He was my 
direct boss and I managed foreign military sales programs to 
Saudi Arabia. 

e Do you know what he did after he left that post? 

A Yes, while I still was in that job in the, not 
exactly sure when he moved but either the end of 1980 or 
beginning of 1981 he moved into the office of Secretary of 
Defense, International Security Affairs, to be Deputy 
Assistant Secretary for Near East and South Asia. 

fi Did you deal with him while he was in that post? 

A Yes, I did. During 1981 I had a lot of interface 
with him in relation to the sale of the AHACs to Saudi 
Arabia. 

e And where did he go 0:0- the Office of the Secretary 
oi Defense? 

T A I am not sure whan ha retired but Z believe that he 
retired in 1983 from that job. 

fi After the sale of the AWACs, and you had moved into 



UlUSSIRED 



102 



MAME: HIROmOOO 



CUSSIflED 



PAGE 2U 



U29 

(430 

431 

M32 

U33 

14314 

435 

1436 

1437 

1438 

1439 

MMO 

MUl 

(4U2 

443 

UUU 

■4145 

(4146 

UM? 

14(481 

(4U9 

(450 

451 

452 

453 



the NSC so that there was a period oi tine when you were at 
the NSC and he continued to be in the Office of the 
Secretary of Defense, did you have any interaction with him 
while you were in that post and he was in that post? 

A Uhile he was in that post we had sone interface 
associated with the foreign military sales cases that were 
discussed in the interagency arena associated with the part 
of the world that he was responsible for. 

He also had some interface with he and his staff in 
relation to the buildup of the foreign aid budget that the 
President submitted to the Congress each year. 

Q And what were the parts of the world that you had 
as you put it interface on in connection with foreign 
military sales, arms sales? 

A I was the integration point at the HSC. When there 
were foreign military sales that were going to be notified 
to the Congress in accordance with the Arms Export Control 
Act, in most cases those notifications came to me and just 
as a coordinator of the interagency process and I would take 
them to the regional people on the KSC staff and coordinate 
with them associated with the papers that were submitted in 
accordance with the pending notification to Congress. 

- But these were arms export control notifications, 
things like 36Bs and 36Cs, under the Export Control Act. 

2 Which of them did you deal with Richard Secord on? 



wmsm 



103 



HIROmOOO 



UNCLASSIFIED 



PAGE 25 



A It is hard to racall the specifics. I do recall 
one was F-16 sale to Israel and there were two or three 
notifications associated with Saudi Arabia and Egypt, but I 
cannot recall anything more specific than that. 

2 How, who left--do you know who left the government 
first, you or Secord? 

A General Secord retired in 1983 in the middle 
sometime. I left at the end of 1983. 

2 During the period while you were still in the NSC 
and Secord had left the government, did you have any 
interaction with him? 

A No. I may have seen him once or twice socially but 
I had no substantive interaction with him. 

2 When you would see him socially, either at that 
point or at a later point, was it among a circle of friends 
or just you and him alone? 

A No, in most cases it was with a circle of friends. 
He came to my house one time for a party that X had. 

2 Can you name any of the people involved who would 
have been friends of his--I am not interested in the people 
who were friends of yours who I have no reason to believe 
Knew him. 

T A Well, there axe several friends of his that are 
mutual friends of ours. Mould you be interested in those? 

2 Yes. 









iFIED 



104 



NAME : 
479 
(480 
1481 
U82 
1483 
14814 

1485 
i486 
U87 
1488 
1489 
1490 

1491 

1492 
493 
494 
495 
496 
497 
498 
499 
500 
501 
502 
503 



HIR041000 



Mmsm 



PAGE 26 



A vlim Aumin. retired Air Force General now works for 
Morthrop Corporation. He is the only one that pops into my 
mind immediately. 

2 That is your only mutual friend. 

A Well/ I think that we have several other mutual 
friends. I am trying to think if we ever got together 
socially with other mutual friends. 

S Apart from those you would have gotten together 
with, you cannot remember the names of any of your other 
mutual friends. 

A You mean that we got together. 

e Yes. 

A Mutual friends that we have, yes, Howard Fish; Dave 
Burney; Keith Phillips; that is basically it. I could 
probably--taking more time I could probably think of more 
mutual friends that we have but those are the only ones that 
pop into my mind right now. 

S Can you name any people who you know of who would 
be friends of Richard Secord's but might not be friends of 
yours? 

A I don't know. It is hard to speculate. There are 
some people that over the years he has probably known in the 
Air Force that I know that I would guess would be friends of 
his like a couple of his former bosses at the KSC, not the 
NSC, OSD, like Richard Armltage, now Assistant Secretary, of 



liriiFIED 



mh 



105 



HIR0U1000 
course . 
S 



NWSSIflEO 



PAGE 27 

Noel mmmi. it is just difficult to — 
Any others? 



A Not that I can recall right now. It is hard to 
pull nanes out of the nemory bank. 

2 To go back, you nentioned a Hr . Awn at Northrop, 

what is his first nane? 

A Jin. 

2 Do you know geographically what city he is in? 

A Yes, he lives in HcLean, He is here in Washington. 

fi Do you know what city Howard Fish is in? 

A No, he is in the Washington area but I don't Know 
what city he is in. 

fi And what coapany does he work for? 

A Fish works for LTV. 

fi Do you know what city Dave Burney is in? 

A Dave lives in Virginia, in Fairfax. 

fi And what coapany he works for? 

A He has his own consulting ooapany. 

fi Hhat is the na»« of that? 

A I am not sure. I think it is Burney Associates. 

Dave is on* oi the gentlemen who bought the airplane with 
us. 

S Hhat olty is Keith Phillips in cuxxantly? 

A Keith lives in Saudi Arabia. 

ft He is an Aaezioan? 



iiKt^SSlFIED 



106 



NAHE: 
529 
530 
531 
532 
533 
5314 
535 
536 
537 
538 
539 
5M0 
51*1 
SH2 
5U3 

suit 

SU5 
5U6 
517 
5i|8 
5*19 
550 
551 
552 
553 



HlXOmOOO 



nmmm 



PAGE 28 



A Amailcan, y«s . 

fi Doas ha hav* an Anarlcan tasldanca that you know 
of? 

A Ko, I cannot ramaitkar whathei his resldanca is in 
rioxida oz in Vizginia? 

2 If you vara going to try to zeach hiii in this 
countzy> is thaza a way you would do it oz would you gat in 
touch with him in Saudi Azabia? 

A Ko. I would gat in touch with him in Saudi Azabia. 

S Can you say how? Pazhaps you hava an addzess book 
with you oz do you zamenbaz off tha top of youz haad how you 
would gat in touch with him? 

A I hava a phona numbaz, I hava his phona numbaz in 
Riad just lika thaza ara hundzads of U.S. businassman in 
Saudi Azabia and Kalth is ona of tham. 

8 You don't hava his phona numbaz in Riad with you? 

A Yas, I do. Hould you lika tha phona numbaz. 

S If you would. 

A In Riad it is] 

e And what city is Noal Osax in? 

A I don't know. Ha usad to wozk at OSD so I assuma 
ha is in tha Washington azaa. 

fi So you know whathaz ha still wozks foz tha 
govaznmant? 

A Ho. I don't think ha doas. I think that ha--I zaad 



!M 



OmSSIFIED 



107 



HIROmOOO 



ONCUSSIflED 



PAGE 29 



somewhere in the paper that he leit the government within 
the last iew months. I don't know exactly when. He was the 
Deputy Assistant Secretary under Armitage. 

2 Picking up your recounting of Richard Secord, after 
he had left the government in 1983 and after you had left 
the government in 1983, did you have any inter ivg e n a yT with 



him? 

A Yes, I retired January 1, 198>4 and after I retired 
General Secord approached me and asked me to, if X would 
consider doing some consulting work with his company, 
Stanford Technology Trading Group, Inc., or International, 
and associated with a shelter project and building shelter 
doors for hardened aircraft shelters. He was pursuing with 
a company called Harwais Steel. He was pursuing, trying to 
bid on a contract in Abu Dhabi and also a project in Saudi 
Arabia. He asked me to assist him. 

In mid-198'< I signed a consulting contract with Secord and 
I made one trip to Abu Dhabi and several trips to Saudi 
Arabia associated with that. If was in conjunction with 
other trips that I made for other clients, but while there I 
attended briefings and assisted him in giving briefings to 
people in Saudi Arabia. He were going to do the same thing 
in Abu Dhabi, we went to Abu Dhabi and the briefing was 
cancelled. So that was my business relationship with 
General Secord in 198>4. 



UNCLASSIFIED 



108 



NAHE: 
579 
580 
581 
582 
583 
58U 
585 
586 
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589 
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591 
592 
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595 
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597 
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601 
602 
603 



HXROUIOOO 



"WUSJIf/fD 



PAGE 30 



The contract ended at the end of 198<4. General Secord 
asked ne ii I could continue to perhaps while I nade trips 
to Saudi Arabia on other business, continue to assist him 
and i£ we were able to achieve a contract as far as the 
company he was working with, narwais, I would receive a 
success fee for assisting him in that project as a 
consultant . 

S And you agreed. 

A X agreed, yes. And that--he gave me a letter 
stating that in 1985 and that expired, didn't do any work on 
it in 1986 at all but the letter itself just expired. It 
was from Hay of 1985 to Hay of 1986. 

Q While you were working with Richard Secord on this, 
did he have any partner in the matter? 

A Yes, he did. Albert Hakim. I met Albert Hakim 
with General Secord and I met him on two or three instances, 
net him once when we were on our trip to Abu Dhabi when we 
were preparing to give a briefing about the shelter 
capability that the company he was working with offered. I 
probably saw Albert, as I said, two or three times 
associated with that. I don't think I have seen Albert in 
the last year. 

fi Hhere were the tMO ox three times that you met 
Albert Hakim in association with the project you just 
described? 



ilNOLASSIFIED 



109 



"wussm 



HIROmOOO '^Vlf |l If PAGE 31 

A Once in 19814 in Albert's offices in California, 
Stanford Technology; once in Abu Dhabi associated with the 
briefings we were going to give the shelter project, and 
then on one occasion, perhaps two, I am not sure, in General 
Secord's offices here in Virginia. 

2 Uhen you met with Hakin in California, was it in 
San Francisco or San Jose? 

A I believe it was San Jose. I don't recall the 
address. San Jose or San Hatao, I am not exactly sure of 
the address. But it was at his offices in that part--it was 
not in San Francisco. 

S Did you understand the relationship between 
Stanford Technology Corporation and Stanford Technology 
Trading Group International? 

A No, I don't. I mean I don't understand the basics. 
Hhen General Secord asked me to do some work with STTGI, he 
sort of described it that Stanford Teohnology was a basic 
systems house and STTGI was a subset of that, of which he 
was the President, that he formed with Hakim in order to 
explore other opportunities such as the hardened shelter 
project that I worked with him on. 

fi Did you know any other companies related to 
Stanford Technology Corporation oz STTGI? 

A No. I do not. 

e Did you know anyone working with or for Secord on 



UNCUSSIFIED 



no 



NAHE- 
629 
630 
631 
632 
633 
63>4 
635 
636 
637 
638 
639 
6140 
6(41 
6142 
6U3 

614 14 

6U5 
6146 
647 
6148 
6149 
650 
651 
652 
653 



HIROmOOO 



ICUSSIflED 



PAGE 32 



Stanford Technology-related natters other than Hakim? 

A Other than two secretaries, I only recall the first 
nane on one, Shirley, the other one I don't renenber. And 
that was it. 

One time I was asked recently, as a matter of fact 
by the Senate Intelligence Committee if I knew Robert 
Button, and I don't know--! met Robert Dutton when he was a 
Colonel in the Air Force and one time when I called General 
Secord's office sometime within the last year, last fall 
sometime, Robert Dutton answered the phone and I didn't know 
that he was working with him but after the fact his name has 
been in the newspapers and stuff, and he answered the phone ' 
as General Secord's office. 

I have never seen him since that time--I|| never seen 
him since I saw him one time in the United States Air Force 
several years ago. 

2 What was the context in the Air Force in which you 
saw Robert Dutton? 

A I net him in General Secord's office one time when 
X was running Saudi Division, General Secord had Air Force 
International Programs. He was just visiting General 
Sacord's office. As X recall, :SBS^A since someone else 
asKad Be the question, at that tine X believe he was 
assigned to Military Airlift Comnand in Illinois, Scott Air 
Force Base. 



M^mm 



Ill 




HIR0U1000 PAGE 33 

You nentioned Dutton. 

MR. TIEFER: Let's go oii tha xecord. 
[Discussion oii tha lacoxd.] 
MR. TIEFER: Back on tha record. 
BY HR. TIEFER: 
2 In what Air Force context did you know Robert 
Dutton? 

A I met Robert Dutton one tine in General Secord's 
office whan he was visiting the Pentagon. At that tine I 
believe he was assigned to Hilitary Airlift Connand at Scott 
Air Force Base. 

S What was his relation to Sacord? 

A He was just a friend of his. I don't know whether 
ha had aver worked for hin before or not. But he just 
introduced hin, here's Robert Dutton, an old friend of nine. 
That is all. 

2 Do you know of military air contracts called Log 
Trans and fiuick Trans? Do those names mean anything to you? 
A No. 

2 Do you know anything about Southern Air Transport 
other than what you read in tha press? 
A Ko. 
T 2 As you understood Richard Sacord 's 
responsibilities, did they have anything to do with the 
Hilitazy Air Connand, HAC, tha office that you said Robert 



\mn\^ ,«if^n 



\^ f 



112 



vfitmim 



Hknz HiRomooo page 34 

679 Dutton was working with? 

680 A The only intariaca with Military Airlift Comnand 

681 might have been as an ancillary thing. The nilitary Airlift 

682 Comnand sometimes was used to effect deliveries of the 

683 foreign military sales products, but General Secord would 

684 not have had direct responsibilities for that. That would 

685 have been through the Air Force Logistics Command or Air 

686 Force Systems Command, the procuring agencies. 

687 . No, General Secord just introduced Dutton to me as 

688 a friend and I believe that he had known him prior to that 

689 time. I don't think ha was there in an official capacity. 

690 Q You mentioned in addition that there were two 

69 1 secretaries that might have worked for Secord that you knew? 

692 A I knew them only because they answered the phone 

693 and I saw them when I walked in. 

69(t e And you recall the names of either? 

695 A I just recall the first name of one of them, 

696 Shirley. The other one, I don't recall. 

697 2 If I told you that there is a person in the world 

698 named Shirley Hapier, M-a-p-i-e-r. does that refresh your 

699 recollection in any way? 

700 X No. I don't recognize the last name. 

701 - e Did you have any sense as to what the two 

702 secretaries did in Secord's office other than answer the 

703 phone? 






113 



NAME: HIROM1000 
70l4| 



iimsim 



PAGE 35 



A Other than ansuex the phone and probably pay the 

io^> invoices tkat 1 sew! 4o -them for the trips that I made, 

706' three trips 1 made, I +kl/\jk Were were iour, three invoices 

707 though, but no, I would have no Knowledge of what they did. 

708 S And apart from those two secretaries, the mention 

709 you have made of Robert Dutton and Albert Hakim, you know no 

710 one else who worked for or with Richard Secord? 

711 A There was one other gentleman that was in his 

712 office when I went there on a couple of occasions, but he--I 
7 13 don't recall his name and he wasn't — X don't think he worked 
71'4 for Stanford Technology. Seems like he had some other 

7 15 association with the waste-steel company they were working 

716 with on the shelter project. But I don't recall his name. 
7 17 B Is that an American company? 

718 A narwais, yes> narwals Steel is an American company 

719 and I don't have any — they are in the San Francisco area and 

720 they have a factory in Luxemburg for building steel 
72 1 specifically for shelters. 

722 S Do you Know anyone in that particular company who 

723 was the contact with Richard Secord? 

72>4 A Yes, Marshall Wais Jr. because I met him in 

725 association with the shelter projects on two occasions. 

726 T fi Oo you know which city Marshall Wais is in? 

727 A I met him in Paris. He had an apartment in Paris. 

728 S Is he an American? 



? "■ *' J f^ 



mm 



114 



KANE 
729 
730 
731 
732 
733 
731 
735 
736 
737 
738 
739 
71*0 

7m 

742 
743 
744 
745 
746 
747 
748 
749 
750 
751 
752 
753 



HIK041000 



sfeUSSIfO 



PAGE 36 



A YeSf as I recall ha is an Anerican. 

2 Do you havtt any idea where in the United States he 
could be found? 

A Probably through narwais Conpany in the San 
Francisco area. 

Q You don't have a phone nunber or address ior him? 

A Ho, I don't think I do. 

Ho, I don't. Sorry. Wait a minute. Yes, I show a 
phone number listed here ior Wais but I don't know where it 
is at, I don't know whether it is in Paris or San Francisco. 

S Uhat is the phone number? 

A Office phone number is 723-5533. 

2 You described briefly the people, some of the 
people you knew at the KSC staff. While you were working 
for the KSC staff, did you know any people on the Vice 
President's national Security staff? 

A While I was on the HSC staff I knew Don Gregg was 
a--a colleague, a fellow staff member, and while I was there 
at the HSC staff, Don moved over to the Vice President's 
staff. While I later worked at the HSC. we have very little 
interface with the Vice President's staff. On probably one 

ox two occasions a gentleman by the name of Hughs, I think 

^ t 

it was Phillip Hughs would have attended one of the foreign 

aid budget meetings that we had or we may have had a meeting 

and talked to him about the foreign aid budget we were 



iKllSSffl 



115 



MAKE: 

7SU 
755 
756 
757 
758 
759 
760 
761 
762 
763 
76U 
765 
766 
767 
768 
769 
770 
771 
772 
773 
774 
775 
776 
777 
778 



HIK0I41000 



IINStilSMfl 



PAGX 37 



subaittlng. That is th* only oth*z on* that I racall whlla 
I was on tha NSC staff. 

Q And hava you avaz sat a Douglas nanazchgk? 
A Manarchfk/ yas> I mat hln at a social occasion I 
went tO/ a movia that tha Vlca Prasldant Invltad savatal 
paopla to, >40-i45 paopla, and HanarchfK was thara. I think X 
had praviously mat him but I don't zacall whara. It would 
hava still been associated with tha Vice President's staff. 




iCLASSIFO 



117 



iOUJSIfJfO 



p/»<^^5 ^% ^^ vo,^^^^/ 



^aJ/BV /J 



/c) /4Z- 



UNCLASSIFIED 



118 



NAHK: HIROmOOO 
87 1 
872 
873 
87U 
875 
876 
877 
878 
879 
880 
881 
882 
883 
88U 
885 
886 
887 
888 
88^ 
890 
891 
892 
893 
89M 
895 



lINtUSSIflEO .... 



K2 




e Kow. rath«r than ay asking soma vary naxroH 
quastions, can you dascriba your knowladga on tha subjact oi 

naKinSf giving assistanca to tha contras 
>r baing askad to giva assistanca to tha contras? 

A Sura. I hava no knowladga at all oil 



UNCUSSIFIED 



I 

I 



I 



119 



KAHK> 
896 

897 
898 

899 

900 

901 

902 

903 

904 

90S 

906 

907 

908 

909 

910 

911 

91 

91 

9114 

915 

916 

917 

918 

919 

920 



KIKOmOOO 



finmsim 



PAGE U3 



giving any asslstanca to th« conttas . Bsing ask«d to glva 
assistance to th« contras, I hav* no knowledge o^^^^^^^^l 
being asked to give assistance. 

One tiffle in 1985, I think it was, General Secord 
to ne that he would like to talk ^<^^HHiiHI^| ^'^ 
see if ^^H^^^^^l night recognize the plight o± the contras 
and provide them some assistance and I at that time said, 
well, gees, you know, I don't see where that is in { 
interests at all, 
But he said, well, I just need to talV 
So some time later on aiter time passed, I tolc 

that General Secord wanted to talk to hli 
Hhat about? 

^^^^ told me in no uncertain terms 
that that was ridiculous. 





UNCLASSIFIED 



120 



921 
922 
923 
92U 
925 
926 
927 
928 
929 
930 
931 
932 
933 
934 
935 
936 
937 
938 
939 
940 
941 
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943 
944 
945 



MZI041000 



ONCUSSIFIED 



PAGE 44 




And to my knouladgc 
e Z thank you. 

Do you know anything als* about Richard Sacozd 
sacking assistance ioz the oonttas othaz than that 
paztlculaz episoda? 

A Ko, I don't. 

e By tha way, whan did you ilzst know that thaza had 
baan Aaazlcan daallngs with Zzan ooncaznlng azas? Did you 
ilzst laazn about It fzoa tha pzass oz had you known about 
it in any contaxt pzavlously? 

A I had not Known about it in any oontaxt. Z laaznad 
about it whan it was announcad and Z don't zaoall axaotly 
tha prass saquanca oi things, but Z navaz knaw about it 
baioza than. 

fi And what you aza saying it whan it eaaa out in tha 
pzass, it caaa as a eoplata suzprisa to you? 

A Zt oaaa as a ooaplata suzpzisa to u». and Z was 
pazsonally shookad. 

fi And you had had no idaa that liohazd Saeord alght 
ba involvad in any Aaazioan azas daalings with Zzan? 
A Not at all. 

HI. XZXrit' Lat's 90 off tha zaoozd haza. 
(Oiseussion off tha zaoord. 1 
Ml. TZEFI1< Back on tha zaoozd. 



UNCUSSIFIED 



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NAHE: 

9461 

947 

9U8 

9M9 

950 

951 

952 

953 

9SM 

955 

956 

957 

958 

959 

960 

96 1 

962 

9| 

961 

96i 

9661 

967 

968 

969 

970 



HIR0U1000 



ONClASSIflED .... 



BY HR. TIEFER> 




A Only thft Kind oi things that pop up in tha press 
and stuii. Ha Is Infornally In a social session. Ha has 
saan ny nana In tha papat a coupla tiaas and wa hava chatted 
about that. Wa chatted about that situation. In those 



UNClASSm 



122 



971 
972 
973 
97U 
975 
976 
977 
978 
979 
980 
981 
982 
983 
984 
985 
986 
987 
988 
989 
990 
991 
992 
993 
994 
995 




HIROKIOOO V*WL.IltJILIIB 11 11 PAGE M6 
chats h« appears to b* of tha sama opinion that I aa that 
thara is no^^^^^ involvamant, cartainly no] 
involvemant in tha Iran thing and no^^^^Hinvolvaaant ha 
knew of, at laast ha axpzassed this to aa , in tha contra 
situation . 

e That is a usaful way for aa to ask. What is your 
opinion of the^^^^H involveaant or lack of involveaant in 
tha Iranian aras dealings with his country? 

A This is noH ay personal opinion and I will s^ive you 




UNOUSSiFiED 



I 



123 



Hxnt - 

99 
99 
99ii 
99' 
100C 
1001 
1002 
1003 
lOOU 
1005 
1006 
1007 
1008 
1009 
1010 
101 1 
1012 
1013 
101U 
1015 
1016 
1017 
1018 
1019 
1020 



HIROmOOO 



Mmm 



PAGE 147 




2 Hava you evai met Adnan Khashoggi? 

A No, I have not. 

fi And do you have any knowledge concerning his 
possible involvement in the Iran arms sales? 

A Only what has been in the press and interviews that 
he has had on T.V. with Barbara Halters. That is the only 
time I have seen him. 

2 Other than what you have found out from the press 
or television/ you have no knowledge of Adnan Khashoggi's 
possible involvement in the Iran arms sale? 

A That is correct. I have no knowledge. 

2 Do you know what Khashoggi's relation is to King 
Fahd? 

A No. I do not. 
' 2 If I could run quickly through a list of names that 
you have previously seen because they were on the attachment 
to the subpoena to you, and ask you whether apart from what 



IJNOiASSIFIED 



124 



MAKE: 
1021 
1022 
1023 
102>4 
1025 
1026 
1027 
1028 
1029 
1030 
1031 
1032 
1033 
103tt 
1035 
1036 
1037 
1038 
1039 
10^0 

lom 

10U2 
1043 
10UU 
1045 



iv£L*l3SlFiE0 .... 



HIR041000 LSi«&ri_lf aUUIS ILII PAGE MS 
you hava read in the press or otherwise heard ihjJjt the 
nedia, whether you know these people. 

I an not going to go into a lot of depth. Some o£ 
them you quite obviously will have known because of where 
you worked; some of them you may never have heard of, 
however . 

A Sure . 

fi Do you know of Robert KcFarlane? 

A Yes, Bud was the Deputy and then the National 
Security Advisor. So while I was at KSC, yes, I do. 

fi You worked with him. 

A Yes. 

S Since you have left the NSC, have you dealt with 
hin? 

A Z have not had any dealings with him. I have seen 
him probably on two occasions socially. That is all. 

fi John Poindexter. 

A Yes. Again, the same. Admiral Poindexter was 
Bud's Deputy. Then he moved up to the Deputy and then he 
was Deputy when I left. 

fi And since you have left, have you had any dealings 
with him? 

A No. I have seen him twice at — again, the same kind 
of going away parties for staff members . That is the only 
time I have seen John. 



UNCLASSIFIEO 



125 



NAHE: 
10M6 
10(47 
10(48 
10(49 
1050 
1051 
1052 
1053 
105(4 
1055 
1056 
10S7 
1058 
1059 
1060 
1061 
1062 
1063 
106^ 
1065 
1066 
1067 
1068 
1069 
1070 



HIR0<41000 



IINCUiSSiflED 



PAGE (49 



a Olivar North? 

k Yes. 

2 Okay. 

A San« situation. I hava uoxk«d--ua talkad about my 
work with Olivax North b«fora> and X hav« s««n him only on a 
couplA social occasions. I hava not seen him probably in 18 
months or so. 

Q Do you know of any mutual friends you have with 
yourself and Oliver North? 

A Mutual friends? 

Other than fellow NSC colleagues and staff members > 
that would be about it. Oliver North knew General Secord, 
as I said, so General Secord would be one. Other than that, 
none . 

fi No one other than NSC people? 

A No one other than NSC people, Secord, no, no one 
outside. I never--! didn't have a circle of friends that 
included 01iveK,North so I wasn't in his circle of friends. 

fi Charles Tyson? 

A Tyson was on the NSC staff when I was there and I 
have not seen Tyson since he left the NSC staff. He called 
■e up one time at/< Paris air show. He were going to get 
together, but we never did. 

e Do you have any knowledge of his relationship with 
Saudis? 



UNCUSSIHED 



126 



NAHE : 
1071 
1072 
1073 
1074 
1075 
1076 
1077 
1078 
1079 
1080 
1081 
1082 
1083 
10814 
1085 
1086 
1087 
1088 
1089 
1090 
1091 
1092 
1093 
1094 
1095 



Mmsim 



HIROmOOO "■■•# PAGE 50 

A Only that when he called ne up he said he went to 

work for Adnan Khashoggi's staii in rtadiid and that uas it. 

No other knowledge of it. I don't know what he did. I 
haven't even talked to hin since then. 

2 Do you know anyone else who works with or for 
Khashoggi ? 

A No, I do not. 

C Adnan Khashoggi, you have said, you don't know? 

A That is correct. 

2 Donald Fraser? 

A Ho. 

2 Ernest Miller? 

A No. 

2 Vertex Finance? 

A No . 

2 Euxocomnercial Finances? 

A No. 

2 nanucher Ghorbanifar? 

A No. 

Q Yaakov Nimrodi? 

A Ho. 

2 Al Schwiamftr? 

A Ho. 

2 Aitiram Hir? 

A Ho. 



UNCLASSIFIED 



127 



iiNcussm 



KAHE: HIKOUIOOO PAGE 51 

1096 2 David Kiiich«? 

1097 A No. 

1098 2 Mike — 

1099 A Stop on David Kimche . I net David Kimche when I 

1100 made a trip to Israel as part of Secretary Haig's iirst 

110 1 suing through the Middle East in April of 1981. Kinche was 

1102 there along with Shamir and Began, the whole hierarchy in 

1103 Israel. He briefed about the sale, the pending sale, 
110U possible sale of the AHACs to Saudi Arabia. 

1105 But I just met him in that group and never saw him 

1106 since . 

1107 e Have you had any contacts with the people you 

1108 referred to as the hierarchy in Israel since that trip? 

1109 A Ko , not with the hierarchy at all. The only other 

1110 person that I really knew were Israeli embassy staff who had 

1111 interface with us when we were on the NSC staff that made a 

1112 call on us once or twice. 

1113 Denny Halperin is one guy's name that I remember. 
1 1 1 <4 The other couple guys, I don't know, I don't remember. 

1115 2 Did you become familiar with others on Secretary 

1116 Haig's staff at that time. 

1117 A I made the trip with him so I met people that were 

1118 on that trip, Ambassadoc Halters, Bud ncFarlane, Rick Bert. 

1119 Those people on that trip. 

1120 That is where I met most of those folks. 



UNCUSSIFIED 



128 



Kknz 

1121 
1 122 
1 123 
1 12(( 
1 125 
1 126 
1 127 
1128 
1129 
1130 
1131 
1 132 
1133 
113U 
1135 
1136 
1137 
1138 
1139 
11M0 
IIUI 
11M2 
11U3 
11MU 
1145 



HiRomooo 



UNCLASSIFIED 



PAGE 52 



Q Have you continued since you have left the 
governnent to have contacts with any of those people' 
A No. No , I have not. 

Do you know a Robert Owen? 

No. 

Higcha^ Ledeen? 



No. 

Do you Know ledeen was a consultant to the White 



e 

A 

fi 

A 

fi 
House? 

A No, I didn't. X reaeMbex his name, I think 
associated with CSIg. but I nevex set the guy to ay 
xecollection and have nevex, you knoH> the only xeason Z 
know he was NSC ox Hhite House consultant was because it has 
been in the papexs xecently. 

ft By CSIS> you Bean Oeoxgetoun Centex? 

A Yes. I think that is whexe he was. Z aay be 
xecalling that wxong . 

S Cyxus Hashemi? 

A No. 

e Hillard Zuokex? 

A No. 

S CoBpagnie de Sexvioes Fiduciaxies? 

A No. 

ft John Singlaub? 

A No. 



mmm 



129 



UNCLASSIFIED 



NAME: 

1 1M6 


HiRouiooo **• ■ vUif IVUII ILL 


PAGE 


53 


1 m? 


A 


No. 






1 Its 


2 


Thomas Clines? 






1 1t«9 


A 


No. 






1 ISO 


2 


Raphaal 2uint«ro? 






1 151 


A 


No. 






1 152 


fi 


Ramon Hadiira? 






1 153 


A 


No. 






1 15U 


e 


Corzalas? 






1155 


A 


No. 






1156 


fi 


Max Gomez? 






1157 


A 


No. 






1 158 


2 


Falix Rodtlgusz? 






1159 


A 


No. 






1160 


2 


D«Gazay? 






1 161 


A 


No. 






1 162 


2 


LaKft Rasouzcas? 






1 163 


A 


No. 






1164 


2 


Alzmach? 






1165 


A 


No. 






1 166 


S 


Southarn Air Transport, Inc.? 






1 167 


A 


No. 






1168 


- a 


Hilllan Langton? 






1 169 


A 


No. 






1 170 


2 


Richard Gadd? 







UNCIASHD 



130 



1 171 
1172 
1 173 
1 1714 
1 175 
1 176 
1 177 
1 178 
1 179 
1180 
1181 
1 182 
1 183 
118X 
1185 
1186 
1 187 
1188 
1189 
1190 
1191 
1192 
1193 
119it 
1195 



*usxm 



NAHE: HIR0U100O Lll I III Zl \ \ I !■ I L 1 1 PAGE SU 



1 No. 
e How, to briefly review two of the exhibits. Do you 

know oi a conpany called Anerican Harketing and Consulting? 
A Yes. 

2 Can you describe your relationship with that 
company, what it was, how you related to it and how Secord 
was related to it? 

A In 198<4 when we, when Secord, General Secord and 
three others and I decided that we were going to buy an 
aircraft and we settled on buying a Maule aircraft, we 
decided to form a corporation to put the aircraft in for 
liaited liability and we formed a company called American 
Marketing and Consulting. 

12 At the time that the company was formed, had you 
any idea that it might be used in any way to help or provide 
anything to the contzas? 

A No. 

fi Did you ever have any Knowledge that the aircraft 
you have dascrlbed went to the oontzas? 

A Only since in my discussion with the Senate 
Xntelliganea Commlttaa. thay showed ma a bill of sale that 
said that it was sold to a company called NKA or something 
Ilk* that, that was zaglstazad In Panama and supposedly 
wound up in londuzas. 

ft Apazt izom being sheira that bill of sale by the 



UNCLASSIFIEO 



131 



KAHE: 
1196 
1197 
1 198 
1 199 
1200 
1201 
1202 
1203 
120U 
1205 
1206 
1207 
1208 
1209 
1210 
121 1 
1212 
1213 
12m 
1215 
1216 
1217 
1218 
1219 
1220 



HIR0M1O00 



DNCUSSIfe 



PAGE 55 



Sanata Intalligenca staff, you hava no knouladga Of the sale 
oi that plana to tha contias? 

A No, no knowledge of tha sale of tha plane to tha 
contias, no, sir. 

2 Do you hava any knowledge of how that sale was 
financed even if you don't know who it was sold to? 

A Ko, I don't. Whan he bought the airplane, four of 
us took out a note and we paid down some on the note and at 
the tine the airplane was sold there was «U8,000 left on the 
airplane and General Secord says, said to ne, and I believe 
he talked to the rest of tha folks as well, saying we are 
going to sell the airplane, we can get tha note paid off. 
That was basically it. «i(8,000. 

& I show you — 

A But I don't know where it cana from. 

fi I understand. I show you the document we have 
narked Exhibit 6, which is tha promissory note. It has 
''promissory note'' on it. I ask if you can explain the 
relationship of this document to what you ware just 
recounting . 

A Yas . This pronissory note in ny nane , David 
Barnie's, Richard Sacord and Carl Kaufnan was tha note that 
Z-sald that wa took out to pay for tha airplane which was 
«60,000. 

This document, a copy of it was sent to ne by the 



UNCLASSIFIED 



132 



KAHE: 

1221 
1222 
1223 
122>4 
1225 
1226 
1227 
1228 
1229 
1230 
1231 
1232 
1233 
12314 
1235 
1236 
1237 
1238 
1239 
12>40 
12(11 
12(42 
12(43 
12(4(4 
12U5 



HZXOUIOOO 



ONWIFIED 



PAGE 56 



bank becaustt I asked thaa for a copy of tha paid off note, 
and it was a paid staap on it. paid 8-30-85. That was sent 
to me by the National Bank of Washington. 

e Who is Carl Kaufman? 

A Carl Kaufman is a car dealer in the Washington area 
and he is just another individual who was interested in 
owning an airplane that we flew around. We flew this 
airplane around fox about 200 hours of flying time on it, 
six months or something like that. 

S Is he a friend of Richard Secord's? 

A He met Richard Secord, but I think he met him 
through me. I don't think he is a friend of his. Carl 
Kaufman I met through Keith Phillips. The reason Keith 
Phillips' name is not on here is Keith came back to the 
country, he came and flew the airplane, but he was not on 
the note because he wasn't a local guy. 

He wasn't here. So the four of us took the no-te 
out. I think that Keith may have introduced me to Carl. X 
am not sure. I don't recall exactly. 

But I don't think that Carl knew Secord before 
then. I think either Keith or I introduced him to Secord. 

fi Why was this note taken out from the National Bank 
oi Washington? Do you have any idea? 

A Yes, because that was the bank where I had my 
business and that is where Dave Bernie had his business, so 



UNCLASSIFIED 



133 



KNCUSSm 



NAHZ: H1R0U1000 ' ^■■' •wl/I| |LIJ f»GI 57 

12<<6 wa took It out In th» National Bank of Hashington. 
12il7 S And has. to youz knowladga, thaza baan any othaz 

12(»8 aotlvity by tha Aaaziean Hazkating and Consulting? 

1249 A Ko. 

1250 e Othaz than tha plana that you dasezibad? 

1251 A That is oozzaot. No othaz activity and to tha host 

1252 of ay knoHladga> othaz than thosa ineozpozation papazs that 

1253 Ma — that X pzovidad to you, on tha company, tha coapany 
12511 hasn't dona anything alsa. It had a bank account at NBH. 

1255 Ganazal Saeozd handlad that. la aada tha payaants. Ha paid 

1256 hia ouz — wall, it was •60.000. It want down to >ia, so thaza 

1257 Mas •12.000 that Has paid against tha neta. 

1S59 Ganazal Saeozd aada thosa daposits to tha bank aeeount. 

1259 S Do you knoM anyona Mho avan pzovidad olazical 

1260 assistanca in connaction Mith tha Aaazican Razkating and 

1261 Consulting activity? 

1262 A Hall, Cazl Kauiaan filad tha ineozpozation papazs. 

1263 At laast that is Mhat tha docuaant indieatas. 

1261 Xt Mas basically a non-opazativa coapany. Ha 

1265 iozaad it to hava tha aizplana. It aavaz zaally did 

1266 anything. 

1267 To ay knoMladga, tha coapany navaz did anything 

1268 othaz than buy that aizplana. And it hasn't dona anything 

1269 sinoa and X think tha coapany goas aMay ii it hasn't had any 

1270 activity in it. 



UNClASSra 



134 



NAHE: 

1271 
1272 
1273 
127M 
1275 
1276 
1277 
1278 
1279 
1280 
1281 
1282 
1283 
128U 
1285 
1286 
1287 
1288 
1289 
1290 
1291 
1292 
1293 
129M 
1295 



HIKOUIOOO 



UNCUSSIFIED 



PAGE 58 



e You Know oi no person who typad or did any othar 
olsilcal work in connaction with Aaarican Harkating and 
Consulting? 

A No. Hy wiia, who is in Lilac Associatas, typed up 
tha coupla of ads whan wa put tha airplana up for sala. 
Basically that> and that was about tha only thing. 

Tha bank account for KBH, Inc., I can't reBeabar 
whathaz it cama to ma or I gava it to Sacord, but Secord 
took all tha corporate racords basically, and thera raally 
wazan't any othar than tha bank account that wa had. 

fi At savaral tiiias, as I hava indicated , thara nay ba 
subjects that we will cone back to you on, but that 
conpletes my questioning for today. 

Under our usual fomat/ George Van Clave aay ask 
questions in addition for his part. 

A Okay. 

EXAnZNATIOK 

BY HK. VAN CLEVE: 

e Hz. Lilac, for the record, I am George Van Cleve, 
tha Deputy Republican Counsel for the House Select 
Committee. He have bean previously introduced. 

Can you please estimate for ae the fraction of your 
Inooae over the last three years on average that has come 
from work that you have done ' 

A You want to know the gross amount into the company 



UNCLASSIFIED 



135 



NAME: 
1296 
1297 
1298 
1299 
1300 
1301 
1302 
1303 
130M 
1305 
1306 
1307 
1308 
1309 
1310 
1 3 1 1 i 
1312* 
1313 

niM 

1315 
1316 
1317 
1318 
1319 
1320 



HIROmOOO 



or my salary? 



"wijissife 



PAGE 59 



2 Take it first as a parcentaga of our coapany. 

A As a p«rcentage of the conpany it is. tha best I 
can estimate is a little under 20 percent, about 20 percent, 
roughly 20 percent. 

Q And based on the type of work that you have been 
doing over the past couple of years, would you expect that 
relationship to continue at that level or increase? 

A I uould--it hasn't increased. It has stayed stable. 
It hasn't increased at all. 

I would expect it to stay the same as long a I can 
provide services to them in the aviation and communications 
areas they have asked me to. 

e Are you presently seeking some sort of a long-term 
contractual relationship with them for these services or do 
you currently have one, some sort of long term contractual 
relationship? 

A No, not a long term. It is a year-by-year thing. 

fi I sea . 

You, I believe, stated previously that your other 
clients in your consulting business are principally American 
aerospace companies ; is that correct? 

A That is correct. 

fi And are these companies that have extensive 
operations in Saudi Arabia? 



UNCUSSIFIED 



136 



lMpih<l! 



KAHE: 
1321 
1322 
1323 
132U 
1325 
1326 
1327 
1328 
1329 
1330 
1331 
1332 
1333 
133U 
1335 
1336 
1337 
1338 
1339 
1340 
13tt1 
13M2 
13U3 
13>t<( 
13M5 



MIROmOOO 



IFiED 



PAGE 



60 



1 Yes> they ace. 

e And can you describe in general terns for the 
coBBittee the nature o£ the uork you do ior these conpanles, 
is it connected also to Saudi Arabia? 

A Yes, I have nany years oi experience in dealing 
with the Royal Saudi Air Force and in those roughly 15 years 
of working I have established kind of a trusted relationship 
with aenbers of the Air Force and large conpanies that are 
going into Saudi Arabia in support of the prograns that they 
have in country service prograas or potential new sales of 
equipaent/ iteas^ services and equipaent to Saudi Arabia they 
want to go in and articulate those capabilities to the Royal 
Saudi Air Force both based on ay relationship over the aany 
years with the Royal Saudi Air Force plus the strengths that 
I have as a fozaex test pilot and prograia aanager. 

They have hired ae as a consultant to go in and 
help articulate those arguaents in nearly all cases to the 
Royal Saudi Air Force. 

e So would it be fair to say in broad general terns 
that a considezabla part of your total coapany business 
turns on mozK connected with Saudi Arabia? 

A Mith the Saudi — 

e With Saudi Arabia? 

A Yes, with Saudi Arabia as a geographic location. 
It is aostly thera. 




137 



NAME 

uue 

1348 
13U9 
1350 
1351 
1352 
1353 
135U 
1355 
1356 
1357 
1358 
1359 
1360 
1361 
1362 
1363 
136>4 
1365 
1366 
1367 
1368 
1369 
1370 



HIR0U1000 



iiNCUssm 



PAGE 61 



I hav« also been doing work with Bahrain and 
potentially othar countrias in the Middle East as well as 
perhaps even Japan. But the majority is Saudi Arabia, yes. 

S I appreciate that. Just a couple of brief 
questions if X night, about your personal background and 
some of the work you did in the government. 

If I understood you correctly, you testified previously 
that you had bean involved in the technical review in 
connection with the AHACs sale. 

A That is correct. 

2 And did you use that terainology to describe your 
role in the process? That is, did you mean to distinguish 
between a technical knowledge of the equipment and personnel 
requirements and so on on the ona hand, and the sort of 
strategic or military policy issues that might be involved 
with the sale on the other? 

Did your role either at the Pentagon or at NSC have 
anything to do with strategic and policy considerations that 
were involved in the AHACs sale? 

A I would like to make a distinction. Hhile I was at 
the NSC, the AHACs sale had already been approved and was on 
the road. 
- B I understand. 

A So we had very little residual work to do with the 
AHACs at NSC. But the technical — I said that X was the 



UNCLASSIFIED 



138 



^mssim ... 



HAHE: HIR0U1000 "^^^IIILIJ PAGE 62 



137 1 
1372 
1373 
137U 
1375 
1376 
1377 
1378 
1379 
1380 
1381 
1382 
1383 

nsu 

1385 
1386 
1387 
1388 
1389 
1390 
1391 
1392 
1393 
13911 
1395 



tachnical brief «r. Uh«n the Adainistration was presenting 
the case to the Congress I acconpanied the briefers, in most 
cases it was national security advisor, and he would place 
things In the geopolitical context and I would brief on 
capabilities . 

I was also responsible for progran nanagement of 
all prograns to Saudi Arabia so putting together the letter 
of offer for the sale and why it was needed, somewhat 
involved with analyzing the threat that Saudi Arabia was 
trying to defend against, I was involved in that as well. 

So both from a threat to the oil resources in the 
eastern province of the Kingdom of Saudi Arabia I was quite 
deeply involved In explaining that, as well as explaining 
the capabilities of the equipment to the Congress while we 
worked on that. 

The terms and conditions of the letter of offer, I 
was involved in that as well as the program manager, chief 
program manager for the U.S. Aiz Force for Saudi foreign 
military sales. 

S Does that mean you were involved in negotiating the 
actual terms of the sales agreement with the Saudi 
governmant? 

A Yes . 

S Including the pricing of the equipment? 

A Yes, including the pricing of the equipment. 



UNCIASSIHED 



139 



NAHE 

1396 
1397 
1398 
1399 
1400 
1M01 
1U02 
11403 
IMOU 
1(405 
1(406 
1«407 
1(408 
1(409 

imo 

1(411 
1(412 
1(413 
1(41(4 
1(415 
1(416 

mi? 

1(418 
1(419 
1(420 



HIR0(41000 



DNWSSIflED , 



AGE 63 



8 Going back to what you said about your knowladgs 
about tha thraat that sarved as tha justification for tha 
sala, would that hava baan somathing that you would hava 
baan rasponsibla ior putting togathei, an analysis 
indepandantly , or did you simply laly on work that was dona? 
A It was pzovidad by othaz paopla in tha Pentagon and 
in tha Dapaztmant of Dafansa. Tha Pzogtait Managenant Oiiica 
that I had zasponsibllity for taally was basically an 
inplanentar < gatting salas/ working tha contracts, working 
with tha othar agendas and tha U.S. Aiz Force. 

But in a proposed sale, especially one that was as 
contentious as that was, we had a lot of inputs from other 
agencies inside tha Depaztmant of Defense, from the 
intelligence agencies, putting together thraat analysis, Aiz 
Fozca intelligence people did work. Defense Intelligence 
Agency did some work. 

So these inputs came in and as it turned out in 
expressing those azguaents up heze I was tha zapzesentativa 
of tha U.S. Air Fozca on that sale so in most cases when 
theze waza questions in tha Congzass about those thzeats, I 
aztlculatad them oz went back to those expezts and got the 
answezs and pzovidad them back thzough the Depaztmant of 
Dafansa organization that was managing ouz intazfaca. 

Than lataz on it tzansitioned over to the KSC, so 
wa moved undaz tha dlzaotlon pzlmazlly of tha Katlonal 



UNCLASSinEO 



140 



WM 



NAME: 
11421 
11422 
11423 

1l42t4 

1425 
1i426 
m27 
1(428 
11429 
1U30 
1(431 
1(432 
1(433 
m3(4 




HIR0(41000 VI?UI_mj|||| II II PAGE 6(4 

Sacuxity Advisor at that tima, Richard Allen. 

MR. VAK CLEVE: Z hava no further questions. 

Thank you very much for your cooperation. 

HR. XIEFER: That concludes this deposition for the 
tine being. It may be resumed at another date concerning 
the subjects we have discussed that were unnecessary to go 
into detail at this time. 

Off the record now. 

[Discussion off the record. ] 

HR. TIEFER: Back on the record. 

Subject to resumption for the reasons stated, the 
witness is for now excused. 

[Whereupon, at 12=35 p.m. the deposition was 
recessed . I 



mw 



SiFIED 



142 









JJ^aJ/^d j^ 



ToT^L- 



?TO 



143 



TRANSCRIPT «.c£f^^ 
OF PROCEEDINGS 



CONFIDENTIAL 

UNITED STATES SENATE 

SELECT COMMITTEE ON 

SECRET MILITARY ASSISTANCE TO 

IRAN AND THE NICARAGUAN OPPOSITION 



DEPOSITION OF ROBERT H. LILAC 



CONFIDENTIAL 



Partially Declassified/Released on j^-?'^^' 7 

under provisions of E.O. 12356 

by N. Menan, National Security Council 

Fairfax, Virginia 



Friday, April 17, 1987 

Ace-Federal Reporters, Inc. /o / <7o 

Stenotype Reporters ( *7^Y^ 



Washington, DC. 20001 



444 North Captol Street 

lington, DC. 

(202) 347-3700 

Nationwide Coverage 

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UNITED STATES SENATE 
SELECT COMMITTEE ON 
SECRET MILITARY ASSISTANCE TO 
IRAN AND THE NICARAGUAN OPPOSITION 
DEPOSITION OF ROBERT H. LILAC 
Fairfax, Virginia 
Friday, April 17, 1987 
Deposition o£ ROBERT H. LILAC, called for 
examination, pursuant to subpoena, in the offices of Odin, 
Feldman & Pittleman, 10505 Judicial Drive, Fairfax, 
Virginia, beginning at 2:33 p.m., before Mary C. Simons, a 
Notary Public for the Commonwealth of Virginia, when were 
present on behalf of the respective parties: 
On Behalf of the Deponent: 
JAMES H. GALE, ESQ. 
Odin, Feldman & Pittleman 
10505 Judicial Drive 
Fairfax, Virginia 22030 



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On Behalf of the United States Government: 
CAMERON HOLMES, ESQ. 
PHILIP BOBBITT, ESQ. 
DAVID FAULKNER, Investigator 
United States Senate 
Select Committee on Secret Military Assistance 

to Iran and the Nicaraguan Opposition 
901 Hart Senate Office Building 
Washington, D.C. 20501 



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WITNESS 

Robert H. Lilac 



CONTENTS 

EXAMINATION BY page 

By Mr. Holmes 4 

By Mr. Bobbitt 113 

By Mr. Faulkner 122 

By Mr. Holmes 125 
EXHIBITS 
LILAC DEPOSITION EXHIBIT: IDENTIFIED AND SUBMITTED 



Exhibit No. 1 
Exhibit No. 2 
Exhibit No. 3 
Exhibit No. 4 
Exhibit No. 5 
Exhibit No. 6 
Exhibit No. 7 
Exhibit No. 8 
Exhibit No. 9 
Exhibit No. 10 
Exhibit No. 11 



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PROCEEDINGS 
Whereupon, 

ROBERT H. LILAC 
the deponent, was called for examination by the Select 
Committee on Secret Military Assistance to Iran and the 
Nicaraguan Opposition and, having been first duly sworn by 
the Notary Public, was examined and testified as follows: 

EXAMINATION 
BY MR. HOLMES I 
Would you please state your name? 
A Robert H. Lilac. 

I gather that you have been previously deposed; 
is that right? 

A Yes. I was deposed, I don't recall the date, 
but by the House Special Committee on the Iran 
Investigation. 

Have you had other depositions than that? 
A No. 

Do you feel familiar with the format of a 
deposition? 

A Yes, and my attorney is with me. 

HR. HOLHESt If at any time you feel that you 



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don't understand the question, be sure to stop and have me 
rephrase the question or ask it again. 

THE WITNESS: Okay. 

MR. HOLMES: If you don't stop me, I'll assume 
that you understand the question. Is that fair? 

THE WITNESS: That's fair. 

MR. HOLMES: Let's go ahead and start with this 
letter from Mr. Gale. I would like to have it on the 
record in order to place the reader on notice of its 
existence at the beginning. 

Let's just have this marked as Exhibit No. 1 to 
this deposition. 

(Lilac Deoosition Exhibit 
No. 1 was marked for identi- 
fication and submitted for 
the record.) 

MR. HOLMES: Mr. Lilac, you understand that by 
this letter and by the rules of the Senate Select Committee 
this deposition is within certain confidentiality 
protections. 

THE WITNESS: Yes, I understand. 

MR. HOLMES: I want you to feel free to divulge 



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whatever information it is that I ask of you unless it's 
covered by a privilege that you would like to talk over 
with your attorney. If you think a certain answer is 
covered by any privilege, whether it be an Executive 
privilege or some kind of a secrecy privilege or even a 
Fifth Amendment privilege, please alert me to that fact and 
we can allow you to talk to your lawyer at that time. AH 
right? 

THE WITNESS: Okay. 

MR. HOLMES: I anticipate that we are going to 
get into some information that you may feel is sensitive in 
a national diplomacy sense and I want to be able to have 
that on the record. 

THE WITNESS: My primary concern, and the reason 
we wron# this letter, is just because of the protection of 
business records, my business records. 

MR. HOLMES: I understand that. 

BY MR. HOLMES: 
Mr. Lilac, I understand that you have been in 
the Air Force; is that correct? 

A Yes. I retired from the Air Force at the end of 
1983. 



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- -rysimons 1 Q You had been in the Air Force since about 

2 October of 1958? 

3 A That's correct. 

4 Had you ever been stationed in Iran? 

5 A No. I have never been stationed in Iran. 

6 Have you been stationed in Saudi Arabia? 

7 A Yes. I was stationed in Saudi Arabia. 

8 Was it more than one occasion? 

9 A No. I made trips to Saudi Arabia on more than 

10 one occasion, but I was only stationed there once. 

11 Q When was that? 

12 A June of '75 to about June of '76, approximately 

13 one year. 

14 After you were stationed there, did you. further 

15 dealings with Saudi military interests? 

16 A Yes. As a U.S. Air Force officer in 1979 I was 

17 assigned to the Pentagon to head up the Saudi Management 

18 Office which was responsible for overseeing for the U.S. 

19 Air Force foreign military sales programs between the 

20 United States Government and Saudi Arabian Government. 

21 How long did you hold that position? 

22 A Until the end of 1981. 



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- -rysimons 1 What was your title at that time? 

2 A I was called Chief of the Saudi Management 

3 Office for the U.S. Air Force Directorate of International 

4 Programs. 

5 Was the Directorate of International Programs 

6 during that period of time under General Secord? 

7 A Yes, it was for a portion of that period. In 
"8 approximately the beginning of '81 he moved to become 

9 Deputy Assistant Secretary of Defense and a new Director 

10 took over. So General Secord is the gentleman who I wfnt 

11 to work for initially when I went to the Pentagon, and then 

12 he left to a different job in the Pentagon and I stayed on 

13 there until the end of '81. 

14 Who replaced General Secord? 

15 A A Brigadier General by the name of Robert 

16 Delligatti. 

17 After you left that post at the Pentagon 

18 A Excuse me, that is not correct. In between 

19 there was another office in there, Henry J. Sechler, 

20 Brigadier General Hank Sechler. Delligatti I think 

21 replaced Sechler. 

22 When you left that position in the Pentagon, 



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•-■•rysimons 1 where were you next assigned? 

2 A For a short period of time I was assigned as a 

3 Deputy to General Sechler for policy for international 

4 programs, and then in the spring of 1982 I went to work as 

5 a military officer attached to the National Security 

6 Council at the White House. 

7 During this period of time from '79 through your 

8 beginning of employment at the NSC, was that primarily in 

9 relation to the AWACS program? 

10 A From '79 to '81? 

11 Yes. 

12 A No. I was responsible for all of our foreign 

13 military sales programs between the United States and Saudi 

14 Arabia. The AWACS was just one of those programs. We had 

15 I other programs that were ongoing and the AWACS actually 

16 started during that period. 

17 Q When did the AWACS start? 

18 A There were studies going on about the air 

19 defense requirements in Saudi Arabia from late mid-1979 

20 through late 1979. They were actually ongoing when I 

21 arrived. And throughout 1980 we had a series of studies of 

22 these air defense requirements and the Saudis were wanting 



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'-rysimons 1 to buy an AWACS or at least an air surveillance platform 

2 and the Administration was reviewing that requirement. 

3 Then in the beginning of 1981 when the Reagan 

4 Administration came onboard, they made the determination 

5 that they would go forward with a notification that they 

6 were going to make the sale to Saudi Arabia, and it was a 

7 Congressional notification that took place in early 1981. 

8 So throughout the period of 1981 most of my 

9 activities were in support of the Administration's efforts 

10 to sell the AWACS to Saudi Arabia. 

11 You were a technical briefer? 

12 A During that period I still ran the Saudi 

13 Management Division at the Pentagon, but since our office 

14 was responsible for this AWACS request and deal with the 

15 Air Force agencies that were responsible for putting 

16 together material associated with the sale, I became 

17 essentially the point man for the U.S. Air Force and 

18 provided technical briefings to anyone that the 

19 Administration needed to brief* both within the 

20 Administration, outside the Administration and to the 

21 Congress. So I was a technical briefer with the 

22 Administration's efforts to sell the AWACS to Saudi Arabia, 



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rysimons 1 to gain approval from the Congress for the sale. 

2 Did your involvement with the AWACS program 

3 continue at the NSC? 

4 A No, it did not, not really. There were a few 

5 residual things left over that were associated after the 

6 sale was approved and the things that were being done 

7 between the United States Government and Saudi Arabia prior 

8 to the sale, and in some cases I provided answers to 

9 questions just because I had spent a year or almost two 

10 years involved in AWACS in general, but I did not have 

11 responsibilities per se for the AWACS sale. They stayed 

12 with the U.S. Air Force when I left and went over to the 

13 NSC. 

14 What was your tenure at the NSC? 

15 A How long? From the spring of '82 until I 

16 retired from the Air Force at the very first of December of 

17 1983, or at the end of the year. 

18 What were your duties at the NSC? 

19 A My primary duties were having NSC 

20 responsibilities for the security assistance budget which 

21 was worldwide foreign aid as well as the portions of those 

22 foreign military sales that needed to have some interface 



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-^rysimons 1 with the NSC or the White House staff, but the great 

2 majority of my time was spent in working with the 

3 interagency process with primarily the State Department and 

4 the Defense Department and somewhat with ONB in develoolng 

5 the budget for the foreign aid account around the world and 

6 ensuring that the President's priorities for foreign aid 

7 were met in that interagency process. 

8 Was there an account at NSC in which the 

9 Nicaraguan opposition would have fallen during the period 

10 of time you were there? 

11 K During the time that I was there I don't recall 

12 anything at all associated with the Nicaraguan account. To 

13 the best of my recollection, we didn't have any foreign aid 

14 per se. The security assistance budget in foreign aid, as 

15 I define it, was what is called in the foreign aid system, 

16 in the appropriations system as the ISO Account. ISO is in 

17 fact that nilitary aids and grants and loan program that we 

18 provide the countries around the world. 

19 That ISO Account did not have any, nor did I 

20 have; any responsibilities in intelligence accounts. So we 

21 didn't have anything to do with covert activities or covert 

22 fundings and, to the best of my recollection, there was no 



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- -rysimons 1 Nicaraguan funding associated with that 150 Account during 

2 those years. 

3 Was there any Central American 

4 A Yes, there was. I don't recall the details 

5 because my responsibilities were quite goneral. There were 

6 regional specialists within the NSC who dealt in the 

7 details, but one that I do recall specifically is the El 

8 Salvador account. 

9 During those not quite two years that I was 

10 there El Salvador and funding for the El Salvador 

11 Government was a priority in the Central America portion of 

12 that 150 Account. 

13 MR. HOLMES: I'm going to pass on to something 

14 else and come back to the dealings of the NSC. 

15 I would like to ask you about your various 

16 relationships with General Secord. 

17 MR. HOLMES: 

18 He is U.S. Air Force retired also, is he not? 

19 A Yes. He retired. He was a two-star General in 

20 the U.S. Air Force. 

21 When did you first meet him? 

22 A I first met him when I came to work for him in 



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- -rysimons 1 1979 at the Pentagon. 

2 Q Had you known of him prior to that? 

3 A The only reason that I knew of him was that 

4 another General who I did know recommended to General 

5 Secord that I would be an officer who had the kind of 

6 background that General Secord might need to run his Saudi 

7 office. This other General mentioned my name to General 

8 Secord and told him of my background and also called me and 

9 said that you might want to consider going to work for 

10 General Secord. He needs someone with your depth of 

11 experience in Saudi Arabia. 

12 Q Who is this General? 

13 A That's General Jim Ahmann. He is also a retired 

14 Air Force General now. 

15 Q . And you worked directly under General Secord 

16 while you were there at the Pentagon? 

17 A Yes. During the time that he was there, yes. 

18 Q I understand that you have some mutual friends 

19 including, for example, Keith Phillips and Mr. Burney? 

20 k Yes, that's correct. 

21 How did you know Keith Phillips? Was that 

22 independent of General Secord? 



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- 'ry Simons 1 A Yes, it was independent of General Secord. 

2 How did you know him? 

3 A Well, he was a fighter pilot in the Air Force 

4 and I'm not sure or don't really recall whether I met him 

5 before this time, but my friendship with him became closer 

6 when I met him in 1974 when I went to Saudi Arabia. 

7 So you became closer friends with him 

8 A Closer friends at that time because he was 

9 working as an adviser in Saudi Arabia and I had delivered 

10 airplanes to Saudi Arabia in 1974. 

11 Would you characterize yourself as a fairly 

12 close friend of Phillips now? 

13 A Yes. 

14 Q Do yourfamilies get together sometimes? 

15 A Yes. Mr. Phillips lives in Saudi Arabia, and 

16 when he comes back and when he comes through Washington^ we 

17 get together and usually go out to dinner. 

18 1 assume you visit him when you go to Saudi 

19 Arabia? 

20 A Yes, I do. 

21 When was your last contact with General Secord? 

22 A The last contact with him? 



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A Do you mean speaking with him or 

For example, speaking with him. 

A I talked to him a couple of weeks ago, 

And where did that occur? 

A Here in Washington. 

Was anybody else present? 

A No. I just talked to him on the telephone. 

What was the conversation you had? 

A I asked him how he was doing, and he said that 
he was busy naturally with the current investigation. And 
I asked him how he was making out, and he said that he was 
doing okay. He said he had a lot of legal bills that were 
building up. Basically that was the gist of the 
conversation. 

Did he ask you whether you were going to be 
deposed at any time? 

A No, he did not. 

Did you discuss any of the facts of the current 
investigation? 

A Not really. We talked about it a little bit, as 
I said, associated with his legal bills. I asked him how 



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■rysimons 1 i he was doing, and he said that he thought he was doing 

2 ; okay. He said if he could pay his legal bills, and he 

3 didn't think that he had done anything illegal, he thought 

4 I he was going to be doing okay. He seemed to be quite 

5 concerned about the stack of legal bills he was building 

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6 i up. 

7 I Did the topic of| 

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8 j come up at all? 

9 A Yes, sort of generally. He said that he was 

10 surprised at what Bud McFarlane was reported to have been 

11 saying in the newspapers. 

12 Could you recreate for me the conversation in 

13 ; that regard? 

14 A I don't know. I think it would be difficult to 

! 

15 ! remember. I think he called me up at about the time that 

16 this story came out in the Washington Post. 

17 I He called you and you didn't call him? 

18 I A I think he called me at that time, yes, or I may 

19 have been returning his call. 

20 And what was said about that subject? 

21 A Excuse me? 

22 Q What was said about the subject? 



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— rysimons 1 ! A Well, just that he was surprised, that he was 

2 ! wondering if there might be something wrong with Bud 

3 McFarlane, and he was surprised at what he was saying and 

4 j he was sort of wondering how^^^^^Hwas taking it, the 

getting^^^^^^^^^^^^^^^^H involved the 

6 story. 

7 I What did you tell him about that? 

8 . A At that time I really didn't know anything about 

what^^^^^^^^Ha thought about So don't 

10 said anything to him. I don't recall saying anything fo 
him about^^^^^^^H comments. 

12 When you say at that time you didn't know, I 

13 i gather at some other time you knew? 

14 A Well, yes, know^^^^^^^^^H pretty well, and 

15 I I believe it was at a later time than that. 

16 just said that he was surprised and disappointed at Bud 

17 i McFarlane' 3 comments. 

18 At a later time than two weeks ago? 

19 A I think it was, yes. I can't remember exactly. 

20 To be honest with you, my memory on that is a little hazy. 

21 I don't know if I can correlate them exactly. I say a 

22 couple of weeks ago, but that's a rough couple of weeks. I 



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don't know if it's two weeks or three weeks. 

All right. Has there been more than one 
conversation with^^^^^^^^^^^l since the conversation with 
General Secord? 

see^^^^^^^^^H pretty regularly. 

How often is regularly? 

A Oh, I probably see him when he's in town, and I 
probably see him once or twice a week. 

And how many conversations have you had with him 
since the conversation with General Secord in which the 
topic of^^^^^^^^^^^Khe contras came up? 

A I would just be guessing to give you an answer 
to that. =^ 

Well, this is a two or three-week period. Am I 
to gather that it comes up on a fairly tegular basis? 

A Oh, the subject? 

Yes, the subject. 

A Oh, no, the subject doesn't come up on a fairly 
regular basis. You said how many conversations have I had 
wlth^^^^^^^^^^^l I had a lot of conversations with him. 

The conversations in which this subject came up. 

A Oh, I think just two, two or three maybe, one 



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-rysimons 1 I when the story first came up and then again — I can't 

2 ; remember exactly — I guess it was a week or so later. 

3 ; Yes, probably a week or so after that. 

4 ' And then the third conversation would have been 

5 ; this most recent one that occurred since the phone call 

6 with General Secord? 

7 A I'm loosing my place in the book. I have a lot 

8 of conversations with^^^^^^^^^^^l but I don't know if 

9 I've had -- I've had more than one conversation with] 

10 ^^^^^1 about that subject since I had a phone call witji 

11 General Secord. 

12 j Oh, I see. 

13 ' A But the gist of them, and they kind of run 

14 ' together and it's hard to specifically pull them out as 

15 I individual times. 

16 Okay. Let's work backwards on ^^^^^^^^^^| and 

17 ' then maybe we can reconcile it. 

18 1 When was the last time you spoke with| 
I ^^^^^Hi^'^ which the subject of^^^^^^^^^^H the contras 

20 came up? 

21 A Let me see. Probably about, and again I'm just 

22 guessing, but it's probably about — I know that it's more 



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<-030 01 01 

"rysimons 1 than a week. It's probably 10 days ago. 

2 I think it's worth clarifying that point. When 

3 there is a story in the paper and it comes up, he and I are 

4 fairly close friends when we have a dinner or we're sitting 

5 together watching television or it's on the news, the 

6 subject comes up just by the fact of it being there. 

7 I understand and it seems perfectly normal to me 

8 that that would be the case. And the last time that that 

9 happened, it would have been sometime within the last week 

10 or 10 days? 

11 A Well, I know it's longer than a week ago because 

12 he has been out of town for about a week. So, you know, 

13 it's before that. It's a few days before that. 

14 Do you recall the circumstances of it coming up 

15 on that occasion? 

16 A I think it was associated with something that 

17 popped up on the news about Secord and the committee's 

18 trying to get Secord' s business records because that was a 

19 topic that was on the news. I believe that's what it was. 

20 All right. And you were sitting watching the 

21 news with him then? 

22 A Yes, and I do that fairly often. Jt- 



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And where would that have occurred? 

A At] 

Q And what was said? 

A Excuse me? 

Q What was said between he and you? 

A He just wondered how Secord is going to make out 



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what, you know, just a comment akx^lt tHat. So that's when 
the subject of Secord and contra comes up, you know, when 
you're watching that on the news. 

I don't recall the gist of that particular 
conversation. I said, yes, you know, Secord had called me 
up. I told him that he had called me up. And he says, 
well how's he doing? I said, well, he seems to be doing 
all right. He doesn't think he's done anything wrong and 
is complaining about his legal bills, you know, again, the 
same thing played back again. But I haven't really 
discussed with him the specific subject in those last 
conversations of supposedly 

Q Let me review with you for a second what I 
thought I heard you say a little while ago so we can get 
together on this. 



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A Okay, sure. 

Q I thought you told that after you spoke with 
Secord you had later learned again f rom^^^^^^^^^^^H that 
he was surprised and disappointed about the allegations or 
story thatj 
contras. Is that what I heard you say; 

A Yes, that's right. 

So at the time when you're sitting with! 
^^^^Hl istening to the news most -recently in the last, 
let's say, 7 or 10 days ago, what did he say specifically 
about the subject of the contra aid that led you to believe 
that he was surprised and disappointed? 

A 01^ nothing. Oh, no, not at that time. When 

said that he was surprised and disappointed, 
it was some period of time after that story had come out in 
the Washington Post, I think ife-was-lth^rWashington Post,, 




within t hfc iM t^ 

But, as I say, we spend a lot of time together 
and without looking at a calendar and seeing when the 
stories were written, I would have a lot of trouble 
creating the exact time sequence of the sequence of the 
conversations. I have to admit I wouldn't be able to 



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create that for you accurately. 

MR. GALE: As I recall what he said, he said 
that he was surprised and disappointed at what McFarlane 
said. That's what I recall hearing him say. 
THE WITNESS: No, I did say that. 
MR. GALE: Yes, and not anything about the 
contras as you just finished articulating. 
BY MR. HOLMES: 
Didn't you mean about what McFarlane said about 
the contras? 

A What he specifically said, and I think this is 
what I said since we are going back over again to make sure 

t h a t ^^^^^|^|^m^|^mH| wa s 
surprised and disappointed at what McFarlane had said about 
^^^^^^^^^^^I^^^^I^^^I^^^^^^^^^H yes , 
correct. 

And was this conversation since your last 
conversation with General Secord? 

A I think it was, yes. I think it was. 
Okay. And is this the same conversation that 
we've been talking about with you and him watching TV 
together or is this a different conversation? 



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A No, this is a previous conversation to that, 

because I spend 

When did the surprised and disappointed remark 

4 ! get made, to the best of your recollection? 

! 

5 I A After the Post article carae you, I think it was 

6 I the Post article tha 

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And do you know approximately when that was? 

A I would have to look in the newspapers to find 

Within the last month was it? 

A Well, let's see, I think it wasi 



Q Did he say anything else other than that he was 
surprised and disappointed? Did he elabocftte on j gij^ t he 
was surprised or disappointed about? 

A No, he did not. 

Now you've had other conversations withl 
^^^^1 about the same subject; is that right? 

A Yes, in general terms about the Iran contra 
thing, yes. 



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6030 01 01 I 

rysimons 1 > All right. Now working our way back from the 

2 surprised and disappointed conversation, I would J.ike to 

3 hear about, and I recognize that you may some difficulty 

4 ; with the exact dates, but I would like to hear about each 

5 conversation you had w i t h ^^^^^^^^^^H about that subject 

6 I back to the beginning of time. Go ahead. 

7 I A I think it would be impossible to recreate 

8 , that. I sit and I watch the news ^ i- ^ ^^^^^^HH^H 3 lot, 

9 and every time it comes on the news there is a general 

10 conversation or a comment about it, and especially from the 

11 '. time that it was big news last fall through the 

12 ■ December/January time frame. Every time there was a story 

13 j and it's something on the news and we're sitting there, I 

14 1 would be sitting there and we naturally talked about what 

15 i was on the news, just like we talked about the other topics 

16 : that were on the news. 

17 [ So I would really be hard pressed to recreate 

18 ] it. 

19 Have you ever had a conversation with him in 

20 which it was discussed with any detail? 

21 A No, not to the best of my recollection because 

22 when the various stories first came out 



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Icomments have been, and I would 
have to lump them together and average them out because I 
can't recreate a specific quote, and this is trying to be 
as helpful as I can in responding to your question, but he 
has said that he didn't understand the stories, tf 




wasn't going to talk about it. And from that time 
previously in history there was never any detailed 
conversations with me about 
except in general terms. 

If I trace it back all the way through history, 
as close to a conversation as I can come tol 

relates back again to a question that 
General Secord asked me sometime in, to the best of my 
recollection, in early, or the spring of 1985, and I can 
remember it because it was a very specific comment. 

General Secord at that time asked him, because I know 
well, he said. Bob, he said I would 
like to see^^^^^^^^^^^H and he says, I need to talk to 
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When and where did this conversation take place? 

A When? 

Right. Is the spring of '85 as close as you can 

4 I get to it? 

6 i 

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A Yes, it is. Yes, the spring of 1985. I can't 

recall 

Q Was this before or afterj 



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A Well, spring would be after, but pinpointing it 

it was 

around that time. It might have been before. In my mind I 
haven't specifically related it to that, but the question 
that General Secord asked was that he said he wanted to see 
and I said well, what do you want to talk to 
him about, is there something I can elaborate to see if we 
can get him to talk to you, and he says, well, he says I 
think that it would be ir 




Where did this conversation take place? 

A I don't recall. I don't recall if it was in 
person or on the telephone, but it took place here tn the 
Washington area. 

Do you recall whether anybody else would have 



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been privy to the conversation? 

A No. I think it was just he and I. 

Go ahead. 

A And I said, well, just in reacting, and 

5 j paraphrasing my comments back to General Secord, I said I 
I 

6 don't know it would be in their best interests to do this, 

7 but I said I'll be glad to pass your message on | 

8 ^^^^^M that you want to talk to him. ~ 

went ^^^^^^^^^^^^H and 

10 said General Secord would like to see you. He said, ^hat 

11 does he want? Well, he wants to talk to you about this 

12 : subject of, or he thinks it might be useful if you guys 

14 uncertain terms in reaction to that, and he used some 

15 I expletives 

16 As you have kindly quoted to the House? 

17 I A Yes, that's correct. 

I 

18 i Q Go ahead. 

19 A But he told my in no uncertain terms that I had 

20 to be crazy and that no, he wasn't going to talk to Dick 

21 Secord about that and, to the best of my knowledge, he 

22 didn't. But from that time on, and that's as close to a 



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about^^^^^^^^^^^^^^^^^^^^^^B as can 
come up until stories came out in the newspaper. 

Did you say to the best of your knowledge he 
never spoke to Secord about it? 

A To the best of my knowledge, he never sooke to 

6 I Secord about it, only because when he told me that I had to 

7 I be crazy and that he wasn't going to meet with him, I told 

8 j that back to General Secord, and I don't know of them 

9 I meeting on that subject at any time after that. I was 
10 never present when they did. 

And you've never spoken to General Secord again 
about that subject? 

A related back to him what^^^^^^^^^^^Hsa id . 

And when and where did that take place? 

A I don't recall when it took place, but usually 
when something like that happens, 



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In a phone conversation or was it in person? 



A I don't recaU^^^ 

And you told him fairly closely quoti 



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Exactly quoting him, yes. 

And what was General Secord's reaction to that 



A 


rebuff? 

A He said he didn't understand it. He said he 
thought that it made sense, and he just dropped it. I 
don't know what he did with it after that. 

And you are saying that you have never again 
spoken to General Secord about his approach] 
Ion behalf of the contras? 
A Never again spoken to him, yes, that's true. He 
never raised that subject and he never asked me again. He 
never asked me again that he wanted to go talk^^^^^H 
ibout that subject. ^^^^^^ 

MR. HOLMES: Could we go off the record for a 




second. 



(Discussion off the record.) 

(Brief recess taken.) 

MR. HOLMES: Let's go back on the record. 

EXAMINATION (Resumed) 
BY MR. HOLMES: 
Mr. Lilac, prior to the time that you spoke with 



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cf^lO 01 01 

-■•rysimons 1 Mr. Secord last, this phone conversation that we discussed 

2 earlier, when was the last time you talked with Mr. Secord 

3 before that? 

4 I A It was probably a week or two before that. 

5 So we ' re talking about roughly a month or so 

6 ago? 

7 I A Probably a month. Yes, roughly a month ago plus 

8 or minus a little bit. 

9 Q And how did that conversation occur? Was that 

10 also by telephone? 

11 I A No, he called up and then he said he wanted to 

12 stop by and see me. So he stopped by at my house in 

13 Washington. 

14 Was anybody else present when he arrived? 

15 j A No. 

16 Did anybody else see hire there? 

17 A See him at my house? 

18 Q Yes. 

19 A My wife may have been there, but I'm not sure. 

20 Was he with anybody? 

21 A No, he was alone. 

22 What did he say when he arrived? 



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A Well, I don't recall exactly what he said when 
he arrived, but the gist of the conversation was that he 
wanted to stop by and see me, and what he was doin-:; was 
explaining to me the plight situation he was in with his 
legal fees. I think very honestly he was lobbying me that 
if anybody that I knew wanted to help him with contributing 
to his legal fees that he would sure be appreciative of 
it. He was a friend of mine and I listened to his story. 

What did he say? 

A He just said that his legal fees had used up all 
his money and that he had about another S100,000 of legal 
fees in addition to that that he hadn't paid yet. 

He was in pretty good spirits I would have to 
say. I asked him how he was doing, and he still said that 
he thought he was going to do okay if he could keep his 
lawyers employed because he didn't think he had done 
anything illegal. 

Did he ask you for any possible sources of money 
that you might have access to? 

A He asked me if I might speak tol 
to see if they might be willing to help him, and he said 
anybody else who might assist. 



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Did he name any particula 




sa id^^^^^^^^^^^^^^^^^^^^^H but 
there was no doubt in my mind that he was referring to 
perhapsi 




I ask him, I said, you know, that I personally 
see^^^^^^^^^^^^^^^^^^^^^^^H you 

have any other sources? I even specifically asked him, I 
said couldn't Albert Hakim help you, and he said, well, all 
of Albert's funds were tied up as well. 

Did you ask him about any other possible sources 
that he might have? 

A That he might have? No, I did not ask him. He 
said that Albert's funds were all tied. He said, just like 
everybody else's funds were all tied up. He even made the 
comment at that time that Khashoggi's funds were tied up. 

When he said that, as a part of that 
conversation we talked a little bit about Khashoggi, not in 
detail, but I said that I was surprised^^^^^^^^Hfunds 
were alleged to have been involved. And he said that he 
didn't know ^^^^^^^^^^Hf unds involved, but by deduction 



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he thought that perhaps there was a source^^^^^^^Hf jnds 
of S15 million, but he didn't have any firsthand knowledge 
of that. And he was fairly specific about that because 



4 I that was about the time that some of the stories were 

5 j coming out about the fact that there was alleged to have 

been ^^^^^^^^^^^^^^^^H to was 

7 I course after the Khashoggi stories about where Khashoggi 
was involved in financing. 

Did he refer to any source of this information 
or deduction that there was an amount of $15 million?. 

A No, he didn't. He just said that by his 
knowledge of what was going on that he deduced that there 
might be $15 mil 1 ion ^^^^^^Hmoney involved. 

What was your reaction to that? 

A I was surprised. I said that I had read about 
Khashoggi' 3 things, but I didn't know ol 




So I was surprised that 
he thought that there might possibly be $15 millionj 
(funds, and I don't know whether those were! 

^^^^^^^ In the conversation he didn't 
delineate the two. 





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Was he talking in the conversati 
funds for the contras, or was he talkinqi 
in the context of Khashoqgi 



A It was in connection with — well, he didn't tie 
Khashoggi^^^^^^^^^^^^^^H he was was 
about funds in general, and he talked about funds being 
tied up, and when he was talking about Khashoggi funds 
being tied up, that was within the conversation. So it was 
in the context of Khashoggi rather than| 
funds. 

So you're saying, if I'm getting you right, 
you're saying that this was not $15 million that went to 
the contras. It was S15 million that was involved in the 
Iranian missile sales in some way? 

A No, we didn't talk about Iranian missile sales 
or we didn't talk about contras. We were just talking 
about funds and he talked about Khashoggi 's funds being 
involved, Khashoggi 's funds being tied up. So we weren't 
talking about Iranian missiles or contras. Really we 
weren't talking toward one piece of it or the other piece 
of it. 



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So it was a general reference then? 

A It was a general reference, yes, sir. 

Did he tell you from what he deduced this, fro-n 



4 I what information he was able to deduce the 



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A No. The only thing he said was from his 
knowledge of what was going on, and he didn't elaborate 
about the details of what was going on, but in the context 
of his investigation I guess that he assumed that I knew 
that he was involved, but we didn't talk about any of the 
details of his involvement either on Iran or on contra or 
on the combination. 

Now other than this conversation, have you ever 
discussed the possibility^^^^^^^^Hmoney was involved in 
either the Iranian or the contra end of these events with 
General Secord? 

A No, other than the one I told you about a couple 
of years ago where he asked me that he wanted to seel 

Beyond that, no, we never. As a matter of fact, 
we never had any other discussions at all on that subject, 
and we never had any discussion on the subject of contras, 
to the best of ray recollection, in that time, although I 
had seen General Secord on, not a frequent basis, but saw 



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- ^rysimons 1 him quite a few times in that period. 

2 How did your conversation end there at your 

3 home, what was the upshot, the conversation we've been 

4 talking about with General Secord? 

5 A Hbw did it end? 

6 Right. Or maybe a better question is how did it 

7 go from where we were and finish out? 

8 A You mean on the conversation? 

9 yes. 

10 A Well, the only place that he went was that I 

11 wished him good luck on what he was doing and asked him to 

12 hopefully hang in there. I don't think I made the comment 

13 at that time to him, but I did not make any contributions 

14 to him. I wish I could have for his legal fund. But he 

15 did said on the specifics, he did say that he did have a 

16 friend of his who had a legal fund established for him if 

17 anybody wanted to contact him. 

18 So in case you came up with some money you would 

19 know who to call? 

20 A In case I either did or wanted to pass it on to 

21 somebody else who was a mutual friend of Secord' s that 

22 wanted to contribute. 



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Who was that? 

A Who was the person that had the fund? 

Right. 

A His name was Sandy Martin. 

Q While we're on that subject, is STTGI paying 
your legal fees? 

A STTGI? 

Or any other corporation? 

A Paying my legal fees? 

Right. 

A No. I'm paying them myself. No, STTGI and I 
have no relationship now. 

All right. Let me get into that now. 

I understand that you were at one time a 
consultant with STTGI; is that correct? 

A Yes. In mid-1984 General Secord asked me to do 
some consulting for hira on the subject of a shelter project 
primarily in Saudi Arabia and then in another country in 
the Middle East, and I agreed to do that. I consulted with 
them for seven months and then had another contingency 
agreement with them for about another year in which I 
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No. 2. 



This began June 1st, 1984? 

Yes. June 1984, yes. 

MR. HOLMES: Can we have this marked as Exhibit 



(Lilac Deposition Exhibit 
No. 2 was marked for identi- 
fication and submitted for 
the record.) 
BY MR. HOLMES: 

You were to be $2,500 a month from June 1st 
through the next seven months; is that right? 

A That's correct. 

Were you in fact paid those amounts? 

A Yes, I was. 

How were you paid? 

A By check. 

From STTGI? 

A From STTGI, right. 

What did you do in relation to that money? 

A Do you mean what were my consultant services? 

Yes. What services did you perform? 

A Primarily it was providing briefings, meetings 



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6030 01 01 

-rysimons 1 and discussions with people in Saudi Arabia in the Royal 

2 Saudi Air Force associated with STTGI and the steel company 

3 that they were working with, the steel and construction 

4 company that they were working with to provide shelter 

5 doors. 

6 This is Marwais Steel? 

7 A Marwais Steel; that's correct. And as a part of 

8 that we provided various briefings to people at the 

9 Headquarters of the Royal Saudi Air Force and a couple of 

10 their bases about the capabilities that the Marwais she_lter 

11 doors could provide for the shelters that were being built 

12 in Saudi Arabia to protect their aircraft. 

13 In addition to that, I also was assisting them, 

14 although to a lesser degree, for a larger contract that 

15 they were competing for in Abu Dhabi, and that was not just 

16 for shelter. doors, that was aircraft shelters, the entire 

17 shelter, the complex they were competing on to build. 

18 Q That was during the same time period? 

19 A Yes, although the only thing that I really did 

20 on the Abu Dhabi one was make one trip to Abu Dhabi. I 

21 believe it was in the early spring of '85 I think it was to 

22 Abu Dhabi to present a briefing about the testing of 



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'Tysimons 1 shelters to officials in Abu Dhabi, but the briefing never 

2 came off although I did make the trip. 

3 1 I would like you to now verify that what is now 

4 marked as Exhibit No. 2 is in fact a copy of the agreement 

5 which you signed at that time. 

6 A That is correct. 

7 How were you originally approached for this 

8 relationship with STTGI? 

9 A Well, General Secord was in business, had 

10 retired and was in this business, and he called me up and 

11 said that they were working with Marwais Steel and he asked 

12 me if I would be willing to be help them. I think we had 

13 talked about it a couple of times earlier in 1984, and then 

14 in June we came up with this agreement and signed it. 

15 On several trips that I made to Saudi Arabia I 

16 was trying to carry the message of the shelter doors to 

17 people in the Saudi Air Force that I dealt with. General 

18 Secord approached me I guess is the short answer to your 

19 question. 

20 Did you travel on behalf of STTGI during the 

21 seven-month course of this agreement? 

22 A Well, I traveled several times for STTGI, and it 



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-^rysimons 1 went from the seven-month agreement to the time in which we 

2 had sort of a follow-up letter contingency, sort of a 

3 contingency contract that followed on to that basic 

4 agreement. And the answer is yes, I made — I'm not 

5 exactly sure of the number. I think it might have been 

6 twice to Saudi Arabia and once to Abu Dhabi. 

7 My trips when I made them usually were for more 

8 than a single purpose. So I maybe didn't make the trip 

9 only for STTGI. I made it on behalf of perhaps two 

10 clients. I can't recall the specifics of when I billed 

11 them. 

12 (Lilac Deposition Exhibit 

13 No. 3 was marked for identi- 

14 fication and submitted for 

15 the record.) 

16 BY MR. HOLMES: 

17 I'm handing you what has been marked as Exhibit 

18 3. Is that the replacement agreement that you're referring 

19 to? 

20 A Yes, it is. 

21 And this is a contingency agreement, is it not? 

22 A That is what I refer to as a contingency 



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agreement. 

That you are going to get $300,000 if, and only 
if, a large sale is made? 

A It wasn't $300,000. It was a contingency that 
we would sign up for a follow-on, continuing consulting 
agreement for a period of 18 months in which they would pay 
me at the rate of $200,000 annually for that consulting 
agreement if they received a large contract in that area. 

Q And $200,000 a year tiroes 18 months would be 
$300,000, right? 

A For those consulting services, yes. 

Right, for those additional services to be 
provided. 

A For the additional 18 months of services, right. 

Prior to this replacement agreement in May of 
1985 you hadn't done any traveling for STTGI ; is that 
accurate? 

A Hell, I traveled once to Saudi Arabia in 1984 I 
think. I would have to look at my records to specifically 
give it to you, but I think during the period when this 
ended and this one picked up, I don't think I traveled for 
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Tysimons 1 and they would have just picked up expenses. 

2 Basically, the summary of it is is I had seven 

3 months in which they paid me $2,500 a month, and then they 

4 paid me nothing else except my expenses for the one or two 

5 trips that I made for them after the first agreement was 

6 completed. 

7 Other than the Marwais effort and the related 

8 effort of whole shelters in Abu Dhabi, did you perform any 

9 j services at all for General Secord in any business context? 

- 

10 A No, I did not. 

11 There was nothing in relation to electronics or 

12 any other exports or anything like that? 

13 A No other services for exports or electronics. 

14 At one time sort of separate from the agreement General 

15 Secord talked to me about a company that he was dealing 

16 with that was having difficulty getting paid in Saudi 

17 Arabia. It happened to be with a saline water contract, 

18 and he showed it to me and said do you think you can be of 

19 any help, and I told him that I didn't, but that was the 

20 only other item of discussion we had that could be related 

21 to business. 

22 When was that? 



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• Tysimons 1 A Somewhere during this period. I don't recall. 

2 The middle of '84 through the middle of '85, is 

3 that what you mean by this period? 

4 A I think it was during that period. I don't have 

5 any records on it. So I'm not sure. 

6 Did you ever meet a Mr. Perry in connection with 

7 Marwais? 

8 A Perry. There was a gentleman in General 

9 Secord's office who worked with Marwais and I think his 

10 name was Perry. 

11 That's the one I'm talking about. 

12 A Yes, I did meet him. 

13 What was his first name? 

14 A I don't know. 

15 Q And your work with Marwais related only to Saudi 

16 Arabia then, the Abu Dhabi contract being separate, or was 

17 Marwais involved in that also? 

18 A No, Marwais was involved in that also. STTGI is 

19 who I worked with and they worked with Marwais, and I was 

20 assisting General Secord in STTGI. 

21 Are you familiar with the name IDG? 

22 A IDG? 



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-rysimons 1 IDG, right. 

2 A It doesn't sound familiar. What does it mean 

3 and I might know. 

4 MR. FAULKNER: International Development Group. 

5 THE WITNESS: It sounds familiar, but I'm not 

6 sure. Is that the company that is based in Rosslyn? 

7 MR. FAULKNER: There is an office here, yes. 

8 THE WITNESS: Okay. Then I may be familiar with 

9 them. Is that the company that's associated with Sam 

10 Baraieh? 

11 BY MR. HOLMES: 

12 Go ahead. What do you know about it, assuming 

13 that's the one we're talking about? 

14 A Well, if it is, I know Sam Bamieh. IDG is just 

15 familiar only because — it just rang a bell. I met Sam 

16 Bamieh with General Secord and Mr. Hakim when they were 

17 talking about trying to find someone to work with in Saudi 

18 Arabia on the shelter project. 

19 Let's see if we can fix a date and a place for 

20 this meeting. 

21 A Okay. I think it was early — well, it was in 

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-•^rysimons 1 San Jose, California area. I was in California and General 

2 Secord wanted me to visit STTGI , and this was before I 

3 signed the agreement, to see if I would be willing to work 

4 with them. 

5 So I went to visit STTGI at their office in San 

X. 

6 Jose, and General Secord asked me if would accompany he and 

7 Albert to a discussion with Sam Bamieh about their 

8 potential for doing business with Bamieh because Sam Bamieh 

9 was an established businessman that had done business in 

10 Saudi Arabia because they were looking for a partner to 

11 joint venture with to help do their business in Saudi 

12 Arabia. 

13 You and Secord and Hakim met with Bamieh? 

14 A Yes. 

15 Was anybody else present? 

16 A I don't recall if there was anyone else from Mr. 

17 Bamieh' s office there or not. 

18 Q Was this in a residence or was it in a business? 

19 A No, it was at Bamieh' s office in that area of 

20 San Jose/San Mateo. 

21 He had a business office there? 

22 A Yes, he did. 



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6030 01 01 

'rysimons 1 Was there any paperwork displayed or discussed 

2 at all at that meeting? 

3 A I don't recall, 

4 There were no contracts or no agreement or 

5 anything like that? 

6 A I don't recall paperwork being displayed, but 

7 there was discussion about an agreement because they were 

8 trying to come to an agreement between STTGI and Sam Bamieh 

9 about the kind of business relationship that they would 

10 have. 

11 All right. And what was your understanding of 

12 the positions of the two sides? What did STTGI hope to 

13 bring to the agreement and what did they hope to get from 

14 I the agreement and likewise Mr. Bamieh' s side? 

15 A Well, I had just been to STTGI the first time 

16 and I don't really know what they expected to bring to the 

17 table in the agreement. The only thing I do recall is 

18 after that General Secord telling me that they could not 

19 come to an agreement because Sam Bamieh wanted to sort of 

20 take over STTGI and they weren't willing to come to an 

21 agreement. So they parted ways. 

22 Okay. While you were there at the meeting what 



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was discussed about the potential mutuality that they might 
be able to reach? 

A It's three years ago or so, and I just can't 
recall. I know that they talked about some of the 
substance of the fact that they wanted to work on projects 
in Saudi Arabia, and I do believe that the specific of the 
shelter project was discussed at least in general terms, 
but beyond that I don't recall anything because that was 
the only thing I was involved in or was potentially 
involved in with General Secord. 

Q You certainly would have become involved in 
anything in Saudi Arabia though, wouldn't you, considering 
your close ties with Saudi Arabial 
and with the business community there? 

A I guess that's a logical assumption, but I don't 
know exactly what you mean. The meeting that I attended 
was, as I recall it, was not a very long meeting. They 
were talking about the fact that they would like to be 
working together, but the only thing that I really recall 
is that afterwards General Secord told me they parted 
directions, and I do remember this specifically because he 
said Sam Bamieh wanted, their agreement that they wanted to 



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-irysimons 1 write, wanted essentially to take over STTGI. 

2 I don't recall any other specifics, but it would 

3 have been logical to assume that if we talked about Saudi 

4 Arabian stuff, if it was Saudi Arabian stuff associated 

5 with the Saudi Air Force that, yes, I would have been part 

6 of that conversation. 

7 Q Was it your impression that you just happened to 

8 be in California at the time of that meeting and it was a 

9 coincidence, or were you brought out there specifically to 

10 see Bamieh? 

11 A No, no. I was in Los Angeles with my wife. We 

12 were visiting our family, and General Secord asked me to 

13 come up to San Jose from the Los Angeles area. 

14 For this specific meeting with Bamieh? 

15 A Yes, and I guess that it probably would be 

16 logical to assume that since I knew Saudi Arabia that that 

17 would be an asset that I would bring to the discussion and 

18 the meeting. 

19 Sure, here we are, we're looking at Saudi Arabia 

20 and let's do business; is that pretty much the way it went? 

21 A I'm sorry, say that again? 

22 Would that be pretty much the logic of having 



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-Tysimons 1 you there? 

2 I A Well, I'm not exactly sure of that. The logic 

3 1 of me being there is that with me being there with General 

4 Secord it would strengthen General Secord's credibility 

5 about being able to carry arguments with the Saudi Air 

6 Force. 

7 I Other than the steel shelter project, you don't 

8 recall any other specific projects that they wanted to do 

9 in Saudi Arabia? 

10 A I know that in general terras before I worked 

11 with them that General Secord was interested in doing 

12 security systems projects as well, perimeter security 

13 systems, but I don't recall whether that was discussed at 

14 that meeting or not. I never worked with General Secord on 

15 security system projects. 

16 The reason I remember it is when they took me 

17 through STTGI they talked to me about some of the projects 

18 that they had done elsewhere, and they were perimeter 

19 security kind of systems, but I don't recall whether we 

20 discussed that at that meeting oc not. — 

21 MR. FAULKNER: Can we pin down that date of that 
' ' 22 meeting a little bit better? 



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--•rysimons 1 BY MR. HOLMES: 

2 1 wonder if we could pin down the date of that 

3 meeting a little bit better. We were talking about a trip 

4 that you took with youi* family. That's going to have to 

5 create some memory in your personal finances or whatever. 

6 A Well, I guess if I could take a look at the 

7 calendar. 

8 MR. HOLMES: Absolutely. Take your time. In 

9 I fact, we can go off the record while you do that. 

10 (Discussion off the record.) 

11 MR. HOLMES: Let's go back on the record. 

12 BY MR. HOLMES: 

13 Mr. Lilac, since what you've just said was not 

14 on the record, I would like to kind of go over it and 

15 summarize it. 

16 ""^li • v^Tiad an opportunity to look at these 

17 calendars; is that right? 

18 A Yes. 

19 MR. HOLMES: Since we're going to discuss them 

20 on the record, maybe we should make them part of the 

21 record. 

22 (Discussion off the record.) 



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-rysimons 1 MR. HOLMES: Let's call this gxhiblt No. 4, it 

2 being a calendar of the year 1984. 

3 (Lilac Deposition Exhibit 

4 No. 4 was marked for identi- 

5 fication and submitted for 

6 the record. ) 

7 BY MR. HOLMES: 

3 Now, Mr. Lilac, having referred to Exhibit No. 

9 4, you have located in it a notation that you were in Los 

10 Angeles in early January of 1984; is that right? 

11 A That's correct. 

12 And would that have been, to the best of your 

13 recollection, the trip to Los Angeles from which you joined 

14 Secord and Hakim in the Bay area? 

15 A That's correct. 

16 After that meeting with Mr. Bamieh did you have 

17 occasion to speak with him again? 

18 A Yes, I saw Mr. Bamieh one other time in his 

19 office in Rosslyn and again, according to my calendar, I 

20 have a notation that I meant, or at least I had an 

21 appointment with him, and I know I did meet with him on — 

22 my appointment says it was on the 17th of January. I did 



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meet with him in his office. I'm not exactly sure if we 
actually made that meeting or not, but I did meet with him 



3 I once in his office in Rosslyn. 



4 

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And that for sure was after the time that you 
first met him in San Mateo? 

A To the best of my recollection, it was, because 
as I recall, I met Mr. Bamieh in San Mateo and not here. 

What was the conversation you had with Mr. 
Bamieh here in the Washington area approximately on the 
17th of January '84? 

A What I can recall 'Of it was that Mr. Bamieh 
knowing that I had a lot of experience in Saudi Arabia and 
very well thought by the Saudis^^^^^^^^^^^^^H 
he thought that I might be able to provide some 
assistance to him. To the best of my recollection, right 
then I don't know exactly I told him about my other 
activities and things I was doing, but I told him that I 
didn't think I would be able to do that. 

Did he provide any specific projects or ideas 
that he thought you might be of use? 

A No, he did not. 

Have you ever spoken to Mr. Bamieh since that 



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■rysimons 1 time? 

2 A No, I haven't. No, I don't believe I have ever 

3 spoken to him since that time. 

4 Have you ever spoken to Mr. Secord or Mr. Hakim 

5 about Mr. Bamieh since the post-meeting discussion that 

6 you've told us about? 

7 A Again, to the best of my recollection, the only 

8 time I ever talked to him after Mr. Secord told me that he 

9 and Sam could not come to an agreement, the only time it's 

10 popped up since that time is when there has been a story in 

11 the newspaper about Mr. Bamieh and General Secord, and even 

12 one of those stories had ray name in it. We talked about 

13 that. 

14 You and General Secord did? 

15 A General Secord and I talked about it. 

16 Q About when did that conversation take place? 

17 Was it contemporaneous with the time when Mr. Bamieh hit 

18 the press? 

19 A Yes, it was. It was associated with that and it 

20 was essentially after one or two of those stories came out 

21 in which Mr. Bamieh' s name was in the paper and General 

22 Secord' s and then at least on one occasion and maybe more 



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in which my name was also mentioned associated with that. 

Do you recall where the conversation took place 
recapping those news stories? 

A No, I don't, but most likely it was on the 
telephone . 

And what was the conversation? 

A Only that he wondered. General Secord was 
wondering where Sam was coming from. He thought that he 
was a little bit crazy because he was saying 

had solicited Sam to help General Secord in projects 
when, to the best of my recollection, it went the other 
direction. General Secord asked ^^^^^^^^^^| if Sam 
Bamieh was a reasonable enough guy to do business with in 
Saudi Arabia, and General Secord said that what he knew of 
Sam Bamieh was that he was a reasonable businessman. 

So he encouraged them to talk to each other, but 
then he reported back later that they couldn't come to an 
agreement so they parted ways. 

So you had some understanding that it was Secord 
who approachec 



That's correct, about Sam Bamieh, just getting a 




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6030 01 01 j 

Tysimons 1 I check on the kind of businessman Sara Bamieh was. 

I 

2 I What was your source of information on that? 

3 Was that from Secord , ^^^^^^^^^Bor from both? 

4 : A Since it has come out in the newspapers, I know 

5 that we've both talked about it. So, to the best of my 

6 recollection, I would have to say that it probably was 

7 i both. 

8 ^ All right. So you've talked to both Secord and 

^^^^^^Habout how Secord i^^^^^^^^^lBamieh together? 

10 ; A Yes, sir. 

11 Taking Secord first, and for the sake of brevity 

12 ! let's lump any multiple conversations together, what's his 

13 version of how that happened speaking to you? 

14 ; A Speaking to| 

15 '- No, no. What is Secord' s version to you about 

16 < how he, ^^^^^^^^H Bamieh got together? 

17 i A Oh. Secord' s version is that he — I don't know 

18 I how Secord met Sam Bamieh. Secord says that 

19 did not introduce him to him. But after he was approaching 

20 and was in discussions with Sam Bamieh about agreements on 

21 whether they could or couldn't do business together in 

22 Saudi Arabia, General Secord asked, and I think he may have 



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even me ^^^^^^^^^^^^^^^^^^^^1 what he 

2 ! thought of Sam Bamieh. 
I 

3 I don't know whether that conversation was 

4 between Secord^^^^^^^^H or between me^^^^^^^^^B about 

5 I Bamieh, but the message was that Secord wanted to get a 
I 

6 ; check on Sam Bamieh as a potential business partner, and 

"! I ^^^^^^^^^^^^H message back to Secord was that Sam an 

8 okay guy to do business with. 

9 ; So this would have occurred prior to the Los 

10 ■ Angeles trip at this point in time? 

11 A No. This happened after the Los Angeles trip. 

12 '■ We had no conversations, to the best of my knowledge, 

13 i before the Los Angeles trip about Bamieh because I don't 

14 I think I knew Bamieh before that and I think that's when the 

I 

15 1 subject came up. So it would have been in the January '84 

16 '■ time frame in which most of those conversations, whatever 

17 ; conversations there were, would have taken place. 

18 ; I don't know how long it was before Secord and 

19 I Bamieh parted ways. 

20 So this Secord meeting with Bamieh, the original 

21 first meeting of Secord and Bamieh is something that you 

22 didn't know anything about until you got the call in Los 



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I 

I £- 

Tysimons 1 Angels to come on to San Mateo and meet this guy that we 

1 

2 ; want you to meet? 

3 A Yes, that's correct. 

4 : Now the same 

5 A Let me clarify something. That's the first 

6 meeting and the only meeting that I had with Secord and 

7 Bamieh. I don't know if they met before that or not. 

8 Q I understand, and that much you weren't a party 

9 to. 

10 A No. 

Now ^s^^^^^^^^^^^^H what has he you 

12 about his first dealings with Secord on the Bamieh subject? 

13 ^^^^^^^^^^^^^H and have 

14 ' recalls it the same way, that Secord wanted to check on Sam 

15 I Bamieh about potentialWdoing business with him in Saudi 

16 Arabia and that he recalls that he said to Secord, yes, to 

17 ! the best of his knowledge, Sam Bamieh was a reasonable 

18 ! businessman to work with in Saudi Arabia. 

19 Q you talk^^^^^^^l^^^^l about 

20 accuracy of what was reported in the press about Bamieh or 

21 by Bamieh? 

22 A We talked once or twice about the stories that 



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'rysimons 1 were in the press about Sam Bamieh and, to the best of my 

2 j recol lect ion ,^^^^^^^^^^H thought that a lot of those 

3 stories were inaccurate, that they were filled with 

4 j inaccuracies, especially when it came down to the 

5 ' connection, specifically the connection where it had 

6 Secord's name Secord|HH|HH^^mH asking 

7 I Bamieh to work with Secord. He said it was not that way, 

8 : that it was the other way. So it would have been in that 

9 ■ context that it was inaccurate. To the best of my 

10 j recollection on the entire story, he thought it was fraught 

11 I with inaccuracies. There were various stories though that 

12 I were in the paper about Bamieh. 

i 

13 Not all of which were consistent among 

14 { themselves. 

15 I A That is correct. 

16 j Are you familiar with a company by the name of 

17 AOG, Arab Development Group? 

18 A No, it doesn't sound familiar to me. 

19 Are you familiar with any network of consultants 

20 that Mr. Hakim is involved with other than STTGI? 

21 A No. 

22 When was your earliest association with Albert 



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Hakim? 

A To the best of my recollection, I met him on 

that trip to San Jose that I referred to before in early 
1984. 

Had you ever heard of him before that time? 

A No, I had not. 

In your dealings in the Middle East you had 
never heard of him before? 



A 
Q 
A 

Turpil? 
A 

A 




No, I had not. 

Do you know an individual named Gene Wheaton? 

I don't recall that name? 

Have you at any time met a man named Frank 



No, I have not. 
Do you know of him? 
Yes. 

Do you know whether or not he has ever been 
associated with Stanford Technology Corporation? 
A I don't know. 

If he had been, would that have been of 
significance to you when you went to work with Hakim? 

A Well, because of the notoriety with Frank Turpil 



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Tysimons 1 and his name, yes, I guess I probably would have asked 

2 General Secord what was going on if I knew he was around. 

3 From your dealings with Hakim in the STTGI 

4 context — well, let me ask this question first. 

5 Have you had any dealings with Hakim other than 

6 as a consultant in the Marwais projects with STTGI? 

7 A No. 

8 Have you ever discussed any potential business 

9 relationships with him other than that? For example, I 

10 would have included in this category the conversation with 

11 Bamieh. Any other conversations with Hakim about any 

12 business deal that didn't go through? 

13 A No, I don't think so, but the question is a 

14 little bit confusing. 

15 Let me ask it again because I don't want to 

16 leave you in the awkward position of answering that 

17 question. 

18 I want to know if you have had any discussions 

19 with Hakim about any business opportunity, whether or not 

20 the business opportunity ever came to fruition? 

21 A Only shelters and shelter projects, and as a 

22 part of the shelter project, and this included a 



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■-rysiraons 1 conversation with General Secord , was that if the shelter 

2 I project came to fruition in Saudi Arabia they might put a 

3 small steel fabrication facility in Saudi Arabia, but that 

4 again was related to the shelter project. But beyond that, 

5 I don't recall any other conversations on any other 

6 business opportunities. 

7 Q Now apart from conversations in which it was 

8 contemplated that you might have had a role, I want to ask 

9 you about conversations in which you simply heard about 

10 business that Hakim was involved in through any source. 

11 Do you understand now what I'm getting at? 

12 A Yes. 

13 Q What knowledge do you have of Hakim's business 

14 from any source? 

15 A Apart from that, when I visited Abu Dhabi I knew 

16 that he was interested in establishing a broader base of 

17 his STTGI capabilities in Abu Dhabi, but that was only 

18 because we spent a day and a half at the hotel, and as a 

19 part of that where we went to the office to work on the 

20 briefing he was talking about just in general terms about 

21 the fact that the people he was dealing with in Abu Dhabi 

22 that he was looking for broadening his base in Abu Dhabi. 



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"rysimons 1 Q He was there with you in Abu Dhabi? 

2 A Yes. I went to Abu Dhabi and he was already 

3 there as was General Secord. 

4 Q Did you ever become privy to conversations about 

5 any business he had in Korea? 

6 A Not in specific terms. I was aware from the 

7 visit I made to STTGI in January '84 that they had done 

8 perimeter defense systems and, as he related to me, they 

9 did perimeter defense systems for nuclear power plants in 

10 Korea. 

11 Q Do you recall any conversations with him or 

12 General Secord about business opportunities in relation to. 

13 weapons of any kind? 

14 A To weapons? No. 

15 The same question with regard to surveillance 

16 devices of any kind? 

17 A No. Only surveillance devices are associated 

18 with those security systems. So those would be cameras 

19 associated with perimeter systems, but not surveillance. 

20 To the best of my recollection, no. 

21 Have you ever met a man named Robiriette? 

22 A Robinette? 



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"Ty Simons 1 Yes. 

2 A No, I don't think I've met Robinette. Robinette 

3 is familiar. There is a gentleman by the name of Glen 

4 Robinette, I think it is, whose name I've heard, but I 

5 don't think I've ever met him. 

6 What was your understanding of his relationship 

7 with STTGI, if any? 

8 A I think that I heard his name from General 

9 Secord, but I don't know the nature of his relationship 

10 with STTGI. 

11 MR. HOLMES: I want to change the topic of 

12 conversation to a Maule aircraft. 

13 MR. GALE: Pardon me — off the record. 

14 (Short recess taken.) 

15 (Lilac Deposition Exhibits 

16 Nos. 5 through 10 inclusive 

17 were marked for identifi- 

18 cation and submitted for 

19 the record.) 

20 MR. HOLMES: Back on the record. 

21 BY MR. HOLMES: (Resuming.) 

22 Q Mr. Lilac, I'm handing you Exhibit No. 5, a 



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■ -rysimons 1 check for $2,500 on your personal account to Maule Air, 

2 Inc., dated 26 June 1984. Do you recognize your signature 

3 on that? 

4 A Yes, that's my signature on my check. 

5 How did you come to write this check? 

6 A There was myself and four other gentlemen who 

7 decided to buy an airplane and we went to — I think three 

8 of us went down to Maule Aircraft in Moultrie, Georgia in 

9 which we placed the order for the aircraft, and the $2,500 

10 check was down payment on the order. 

11 As it turned out, I was the only one of the 

12 three of us that had a check with me and I wrote the check 

13 for it to be reimbursed by the group that was buying the 

14 airplane later on. 

15 Who was it that was down in Moultrie? 

16 A General Secord and I believe Keith Phillips was 

17 with us as well. 

18 Q So the search party was you, Phillips and 

19 Secord? 

20 A We were the ones that actually made the trip 

21 down to the airplane. We had decided before that that 

22 there were five of us who wanted to go in on buying the 



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airplane. 

who were the other two? 

A In addition to those two, there was navid Purney 
and Karl Kaufmann. 

Now this is a check for S2,500. Had there been 
a deposit into your account at any time shortly before this 
check in order to assure that it would clear? 

A No. I think I just wrote the check on my 
account knowing that I had enough money in there to cover 
it. Threre was no deposit made specifically to cover that 
particular check for the down payment on the airplane. 

This is a down payment on an airplane that was 
at that time going to cost S77,500> Is that right? 

A Our purchase price on the airplane was iust a 
little over $60,000. 

Did you have a sticker price of S77,000 and then 
it got knocked down at a later date? 

A No. At that time when we bought the airplane, 
we bought the airplane for $60,000. It's kind of like 
buying a car. There was a list price and we negotiated a 
price and we got a little bit knocked off the sticker 
price, but our base price on the airplane was a little over 



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n-rysimons 1 360,000. 

2 So you know when you went in that it was poinq 

3 to be a 560,000 plane? 

4 A Yes, I did. 

5 The hiqher orice was just the askina price? 

6 A That's correct. 

7 I'm showing you what has been marked as Exhibit 

8 6. Do you recognize that document? 

9 A Yes. This is a promissory from the National 

10 Bank ofr Washington which the the four of us took out a >iote 

11 for $60,000 to pay for the airplane. 

12 Why is there only four of you on this note 

13 instead of five? 

14 A Well, we took it out as a personal note and the 

15 four of us were here and Keith Phillips was in Saudi 

16 Arabia. So he wasn't available and he was just going to 

17 pay for it. The four of us that were local that had local 

18 credit and could get a note here, we just made that 

19 decision that the four us would take out the note. 

20 1 notice on this note that it's a $60,000 loan 

21 at one percent over the prime; is that right? 

22 A That's correct. 



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.0 01 01 
niarysimons 1 And there is no collateral; is that right? 

2 A That's correct. 

3 Were there any representations made to the bank 

4 in order to assure them of repayment of this note, for 

5 example, a pledge of a balance in an an account or a pledoe 

6 of any other documentary thing of value or anything like 

7 that? 

8 A No. To the best of my knowledge, there was 

9 none. We called up the banker that we had been dealing 

10 with and Mr. Burney and I had our accounts in the Natioftal 

11 Bank of Washington, and based on the fact that we were aood 

12 customers they gave us basically an unsecured note for 

13 S60,000. 

14 Did they know that the purpose of the note was 

15 to purchase an airplane? 

16 A yes. We told them that. 

17 And they didn't insist on taking a security 

18 interest in the plane? 

19 A • No. 

20 What was the balance that you and David Burney 

21 had in your accounts at that time? 

22 A I don't recall. I would have to check my bank 



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niarysimons 1 account to find out. 

2 It was not $60,000 or more? 

3 A Oh, I think it was because both of us had our 

4 business accounts and our checking accounts in the bank and 

5 I believe that there was more than 360,000 in those 

6 I accounts. 

7 Was that an unusually high balance for a bank 

8 account for you? 

9 A No. No, it was not. Again, I would have to 

10 check how much I had in my account, but we also had, as' a 

11 part of our corporation, we have a retirement plan, we had 

12 our retirement accounts with NBW as well. So that was not 

13 an abnormal amount and the discussion of it being an 

14 unsecured note was never a major issue. We called up the 

15 gentleman at the bank and we didn't have any trouble 

16 getting the note. 

17 Now when this $60,000 was loaned to you, you 

18 caused a wire transfer to be made to Maule? 

19 A That's correct. I don't recall if I did it or 

20 if one of the other gentlemen did it, but we did do a wire 

21 transfer down to Maule. 

22 And when they received the wire transfer that 



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n.-rysimons 1 brought their balance to an aipount over the purchase price; 

2 is that right, and you got a check back for a refund? 

3 A Yes, I guess I did. I don't recall that, but 

4 now that you show me that I think that I did get the 

5 payment above the deposit because the note that we sent 

6 down just covered the total price of the airplane and I 

7 I didn't recall it until this moment that I had received a 

8 check back of the amount over. 

9 Does this refresh your recollection on this, and 

10 for the- record this is Exhibit No. 7. 

11 A Yes, that's correct. 

12 And that is a Maule Air, Inc. check for 

13 $2,424.95? 

14 A That's what refreshes my memory, yes, sir. 

15 Now at the time you took title to the aircraft 

16 it was in the name of Lilac and Associates, Inc., is that 

17 right? 

18 A Yes, but that was in error. 

19 I'm showing you Exhibit No. 8. This is a copy 

20 of the Articles of Incorporation of an Corporation named 

21 American Marketing and Consulting, Inc. ; is that right? 

22 A That's correct. 



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n.arysimons 1 Now American Marketing and Consulting, Inc. was 

2 incorporated by Karl Kaufmann and it's resident aaent was 

3 Elicia Wagner; is that right? 

4 A Yes, that's correct. 

5 Elicia Wagner was one of Karl Kaufmann' s 

6 employees at his car business? 

7 A Yes. To the best of my recollection she worked 

8 for Karl. 

9 What was your understanding at the time that. 

10 this corporation was incorporated as to the purpose and" the 

11 function of this corporation? 

12 A To the best of my understanding, the corporation 

13 was formed to have a limited liability. We formed the 

14 corporation to put the aircraft in the name of the 

15 corporation and that was the sole function of the 

16 corporation. 

17 Now the corporation was incorporated on the 3rd 

18 of January 1985, some five months after the purchase of the 

19 aircraft; is that right? 

20 A That's correct. 

21 Why was it that there was a five-month delay? 

22 A Slow paperwork is the only answer that I can 



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n.-rysiinons 1 give for it. We talked about that, that it should have 

2 been done before and if we ever had any problems with the 

3 liability on ity it could have been a problem for the 

4 airplane, and it just took them that amount of time to get 

5 around to doing it because we had a meeting in which we 

6 talked about the slowness of the paperwork and getting the 

7 paperwork done for the airplane. 
why was only Karl Kaufmann's name of the people 

9 on the note on the corporate papers? 

10 A ■ I don't recall. I think it was simply becauSe 

11 Karl had somebody that could draw up articles of 

12 incorporation and could do it. It was a very loose knit 

13 corporation. As I said, it was just strictly to put the 

14 airplane in and limit the liability on the airplane. 

15 Was there ever a sale of the airplane from Lilac 

16 Associates, Inc. to American Marketing and Consulting, 

17 Inc.? 

18 A To my knowledge, there was never a need to have 

19 a sale of the airplane to Lilac because Lilac Associates 

20 never really owned the airplane. Lilac Associates just 

21 filled in the deposit on the airplane and from day one it 

22 was to go into this corporation that we were forming for 



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n.^^rysimons 1 the airplane. 

2 Is that sort of a long "no" that there was never 

3 a sale? 

4 A Well, there was never a sale because we never 

5 thought that there needed to be a sale. I don't think I 

6 ever owned the airplane. 

7 Meaning you as Lilac Associates. 

8 A Yes, as the President and principal owner of 

9 Lilac Associates. 

10 0- I guess you never owned it at all, did you, 

11 because you are not in any part of American Marketing and 

12 Consulting, Inc. either? 

13 A Well, I'm not a part of it in that I didn't sign 

14 the Articles of Incorporation, no, but the five 

15 Your are not an officer or a director or an 

16 employee or anything else either, or are you? 

17 A Well, American Marketing and Consulting, to the 

18 best of my knowledge, doesn't exist any more. It bought 

19 the airplane, registered the airplane in its name and then 

20 did nothing else, and when the airplane went away then the 

21 corporation went away. 

22 We didn't really have time to sit down and form. 



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n.w.rysimons 1 you know, to have minutes of board meetings, we loosely 

2 signed, and I think we designated sort of by verbal consent 

3 that there were officers in the corporation and, to the 

4 best of my recollection, I was voted by the people that 

5 formed the corporation as a vice president of the 

6 corporation. 

7 HR. GALE: About 90 percent of all closed 

8 corporations operate that way. 

9 BY MS. HOLMES: 

10 • In any event, Mr. Lilac, the way you 

11 accomplished the registration of the aircraft was Exhibit 

12 No. 9, a letter to Maule; is that right? 

13 A That is correct. 

14 And that was just telling them that they should 

15 reregister it in the name of American Marketing and 

16 Consulting, the Secretary of which is Karl Kaufmann and the 

17 President of which is Keith Phillips, right? 

18 A That's correct. 

19 A clarification on this though. The paperwork 

20 on the registration was filled out at Lilac Associates. It 

21 was never signed. So the aircraft therefore was never 

22 registered with the FAA, to the best of my knowledge, with 



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n.-rysimons 1 Lilac Associates. They clarified it with this letter, and 

2 then we signed that registration form that then became a 

3 bona fide registration with the FAA with the aircraft in 

4 the name of American ^'arketing and Consulting. 

5 All right. To complete this series of exhibits, 

6 Exhibit No. 10 is the Maule invoice on that same plane; is 

7 that right? 

8 A Yes, that's correct, but I haven't seen this 

9 invoice — I don't recall seeing this invoice before. 

10 0. All right. How did the plane in your words go 

11 away? 

12 A We flew the airplane from the time we got it 

13 until 1984, or from 1984. For several months the group of 

14 us flew the airplane, that is everybody that owned the 

15 airplane, except for David Burney. He didn't have his 

16 license and he was pretty busy and he never even got to see 

17 the airplane, to the best of my knowledge. 

18 Did he ever put any money into the deal? 

19 A David? 

20 Right? 

21 A I think David put in $2,000 at the front end, 

22 but I don't think he put in any more money. 



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Did he ever get that back or did he just lose 



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A No, he lost that as a part of the investment. 
We were hoping that he was going to fly. After David 
decided that he was busy and wasn't able to fly, I don't 
think that Mr. Burney put any more money into it. He 
decided that since he wasn't going to fly that we put the 
rest of the money, that we pay off or continue to pick up 
the payments on the note. That's to the best of my 
recollection. 

Who actually paid on the note? 

A In addition to that initial, Karl Kaufmann, 
Keith Phillips, John Dixicord and myself. 

Did you divide it into eaual auarters and pay it 
that way by personal checks or how? 

A Oh, no. As American Marketing and Consulting we 
took out an account at the National Bank of Washington. We 
had an account and we paid — in all cases General Secord 
kept the financial records on it. We paid General Secord 
and he paid the payments that we paid. I don't recall the 
exact numbers. We paid a couple of payments. 

After flying the airplane for four or five 



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ii._cysitnons 1 months, I had trouble handling the airplane one time and 

2 dinged the prop on it. I sort of lost a little bit of 

3 interest in it and Keith Phillips was in Saudi Arabia. 

4 General Secord felt that the airplane wasn't suiting his 

5 needs to fly from point "A" to point "B" and iust wasn't 

6 j fast enough. So we decided that we would sell the 

7 airplane. 

8 We put an ad in the paper 

9 Let me slow you down just a little bit. 

10 A. Sure. 

11 It was your understanding that each of you with 

12 the exception of Burney was paying a prorata share or was 

13 it based on air time? 

14 A It was going to be a prorata share. 

15 One Quarter each after Burney dropped out? 

16 A Well> it was one Quarter minus the amount that 

17 Dave Burney paid, and I think he only paid the $2,000. He 

18 may have made one other payment after that. 

19 All right, but you for yourself paid your 

20 Quarter 

21 A I paid my share of whatever was left. 

22 each time one of these Quarterly payments of 



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S3, 000 plus interest came due you would kick in to Secord 
or to the bank? 

A I don't think we sent anything to the bank. I 
think we had the account set up for American Marketing and 
Consulting at that time, and I think we paid it through 
American Marketing and Consulting. 

And Secord had that account? 

A Yes, Secord had the paperwork on that account. 

Did you ever discuss with Secord the receipt by 
Ainericaii Marketing and Consulting of wire transfers from a 
Swiss bank? 

A No, I did not. 

Would it be fair to say from your expression 
that that surprises you if that did occur? 

A Yes, it surprises me. The only wire transfer 
that I'm aware of that was made to this bank account was 
the wire transfer when General Secord sold the airplane and 
a wire transfer was made to pay the remainder of the note 
off which was about JSASrOOO. 

Okay. Let me put that to the aide right now. 
Are you aware from any source, Secord or 
anybody, of any wire transfers to the American Marketing 



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and Consulting account from any other source other than 
this one that you've just mentioned? 

A Other than that one, no, I'm not. 

You've spoken with Secord about how the sale of 
the plane was eventually done? 

A Yes, in general terms. 

And he discussed with you the fact that there 
was S48,000 plus interest left on the note and that that 
was what the four of you were going to get was the note 
paid off? 

A That's correct, it evolved to that point. We 
had the airplane listed for a higher amount and we were all 
seeking to try to sell it just by word of mouth, we 
actually put an advertisement in a trade-a-plane newspaper 
to see if it could be sold and we didn't get any serious 
takers on the advertisement. So we just said well let's 
keep trying to sell it, and a couple of people called us 
that wanted to trade it. Basically we just wanted to aet 
rid of the airplane. 

General Secord had called up one time and said, 
hey, I thiok^fd^it^foi^d a buyer, but I think all I could 
get for it is what we've got left on the note, and we all 



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n.^rysimons 1 just said fine, go ahead and sell it. 

2 Just to pay off the note and let go of the 

3 plane? 

4 A That's right, which meant the note was about 

5 S48,000 and we paid $60,000. So on the airplane itself we 

6 lost about S12,000, plus insurance. Of course, we got the 

7 use of the airplane. 

8 You referred to a wire transfer that accounted 

9 for that $48,000 plus interest. 

10 A- Yes. 

11 What did Secord tell you about that? 

12 A He just said that the note would be paid off by 

13 wire transfer. We had a couple of conversations about when 

14 that was going to happen because, to the best of my 

15 recollection, we had another interest payment coming due 

16 and we wanted to pay the note before we had to kick in. So 

17 we wanted the note paid off. Then he called me up. 

18 As a matter of fact, since it was my bank that 

19 he was dealing with, I called my bank and asked when it got 

20 paid off, I asked for a copy of the note, and the copy that 

21 you showed me as an exhibit does have the paid stamp on it. 

22 And that is dated August 30th, 1985? 



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ti._rysiinons 1 A In August of 85, yes, sir. 

2 Now you had put the plane up for sale for just 

3 over $77,000; is that right? 

4 A We put an ad in the paper saying that the 

5 airplane's list price was $77,000. We actually put the 

6 airplane up for sale, to the best of my recollection, for 

7 S59j900, which is basically $60,000. What we wanted to oet 

8 out of it was what we had put into the airplane. We never 

9 did put it up — I don't think that we ever put it up for 

10 sale for $77,000. 

11 Did you ever discuss with Secord who purchased 

12 the airplane? 

13 A No. No, I did not. He said that he had sold it 

14 and that he was working with Payinond Maule to arrange 

15 delivery of the airplane but, no, we never discussed 

16 specifically who he sold it to. 

17 But the plane was at Raymond Maule' s place at 

18 that time when it was getting sold? 

19 A I think that General Secord took it down there. 

20 Subsequent to that time in one of the discussions I've had 

21 with one of the committees they told me that it was sold to 

22 a company called NPAF and asked me if I knew that company. 



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n.-rysimons 1 I hadn't except for seeing it in a newspaper story sometime 

2 subseauent to the sale of the airplane. 

3 Didn't you have a conversation with David Burney 

4 after the news came out that the plane had gone to the 

5 contras? Did he call you up and ask you if you knew 

6 anything about that? 

7 A Well, I think we probably had several 

8 conversations about that, yes. 

9 Did you have a conversation with General Secprd 

10 after B,urney had called to ask you? Did you call Secord 

11 and say, hey, what's up, Dick, and where did this plane go? 

12 A I don't recall that I did. To the best of my 

13 knowledge, I didn't in response to a conversation with 

14 Dave. 

15 Did you ever confirm to Burney that in fact you 

16 had checked into it and found out that the plane had been 

17 sold to the contras? 

18 A No. The only thing that I recall telling David 

19 was that General Secord had sold the airplane and, yes, 

20 that Raymond Maule had delivered it out of the country into 

21 Central America, but I don't think we ever discussed 

22 specifically that it had gone to the contras. 



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r._rysimons 1 Did you ever talk to Keith Phillips about his 

2 I delivery of another Maule airplane 

3 A What, Keith Phillips' delivery of another Maule 

4 airplane? 
I 

5 I Right. 

6 ! A No. I don't know that Keith Phillips delivered 

7 i another airplane, but I did talk to Keith Phillips about 
I 

8 another airplane because there were stories of about three 

9 or four more airplanes being sold and being delivered. I 

10 was not involved in them in any way. 

11 I did ask Keith about them and had he heard that 

12 the same company that had bought our airplane was buying a 

13 couple or three more airplanes from Maule Aircraft. 

14 This being M»AF? - ^^~ 

15 A TTiill . iTitmupLi ijgj. T w«« told th«t ,^^ ^bugiit : 

16 : our air^^e. ^ I au^^ggi th itJCug Sastld TRn>i^^^wre^h#^r 

17 same comptai^,iSf9a, ^'- _ /^»^2:^ ^i*' 

18 You've never spoken wfEh Phillips "Ibout a-*rip^ 
that he took^^^^^^^U In a 

20 A .That Phillips took| 

21 Pight. 

22 A NO. The only person that I thought was Paymond 



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Maule who delivered the airplane in Central America, and I 
don't know where he delivered it to, but I didn't know that 
Keith Phillips — there are surprises all over the place. 
I know Keith very well, and I would be surprised if he made 
a trip like that and I didn't know. 

Who used the airplane while it was in the United 
States. 

A While we owned this airplane? 

Right. 

A. Well, I used it, Secord used it, Kaufmann u^ed 
it and Keith Phillips used it. 

who besides the four of you were in the airplane 
at the time that it was being it was being used? 

A Flying it, Raymond ^'aule flew with me checking 
me out a couple of times. General Secord, my wife, a couple 
of my kids, and I don't know who else- General Secord may 
have flown in the airplane. 

One time General Secord and I flew it here 
locally and we flew a friend of ours from Saudi Arabia from 
one field to another here inside the Washington area. He 
name ^^^^^^^^^^^^1 but that was flight. Other 

than that I don't recall anybody else that few in the 



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ii-rysimons 1 airplane. 

2 It's a two»place plane, isn't it? 

3 A No, it's essentially a four-place. It's not too 

4 dissimilar from a Cessna 172, a small airplane, but there 

5 is a small jump seat behind where the passengers sit where 

6 you could put — theoretically you could put two kids. 

7 I've never had more than five people in the airplane, but 

8 it's weight limited when you do that and you can't put full 

9 fuel in it when you try to use that extra jump seat. You 

10 could tly four people reasonably comfortably. 
i 

11 Was there a log book that would have recorded 

12 the flights and who was present? 

13 A We had a lot book in the airplane that I don't 

14 have. Each pilot keeps their own log book and normally 

15 keeps track of their own flying. I had my own. There was 

16 a lot book in the airplane that we kept with the airplane 

17 just to keep track of how flying it did and the maintenance 

18 or fuel that people put in the airplane, but those log 

19 books would not indicate who flew in the airplane. It's 

20 not a reguirement and not normally done. 

21 1 notice in the documents that you produced to 

22 the House that there was a sheet that appeared to 



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01 01 

ni-rysimons 1 meinoralize all of the hours that each of you had flown in 

2 it. 

3 A Yes. 

4 (Lilac Deposition Exhibit 

5 No. 11 was marked for identi- 

6 fication and submitted for 

7 the record.) 

8 " BY MR. HOLMES: 

9 And there are several lengthy trips noted out on 

10 that shieet. Do you have any knowledge of where those trips 

11 were taken and for what purpose? I'm showing you what has 

12 been marked as Exhibit No. 11. 

13 A Yes. This is a handwritten accounting that I 

14 did, it's in my handwriting of the flying hours on the 

15 airplane. I would know by cross-checking specifically 

16 against my log book where I flew the airplane to. In some 

17 cases these are composits of flying hours because the 

18 airplane doesn't -- for instance there is a log here of 

19 13.3, and the airplane doesn't fly 13.3 hours. It only 

20 flies about — well, I remember flying it a little over 

21 five hours one time, 5.7, something in that range. So it 

22 doesn't fly too long. But I would know where the aircraft 



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flew for me when I was flying it, and the airplane flies at 
about 120 to 125 knots. 

To the best of my knowledge, all of these 
flights are either in the local area or such places I went 
to, Atlanta, George where my daughter was going through 
training, the Atlanta area. So I flew it on a fairly long -- 
out and back from here from here down to Georgia and back. 

Where did you get these figures from? Are these 
from a log book? 

A. These are from the log book on the airplane;" 

\»/ 
thatYs correct. 

where is the log book now? 

A I don't know the answer to that. It was with 
the airplane and that is where it was kept. It was always 
kept in the airplane. Pilots keep their own personal log 
book which I had mine back at home. 

Do you have any knowledge from discussions with 
any of these people or any other source who they may have 
been carrying around in that airplane? 

A Yes, in a couple of Instances with Keith 
Phillips, his son and his wife flew in the airplane. 
General Secord, a couple of times I flew with him locally. 



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I flew with Karl Kaufmann once or twice, but beyond that I 
couldn't specifically say who was in the airplane when they 
flew it. 

Was the airplane ever used for entertaining 
businessmen or auasi-comnerc ial reasons like that? 

A Well, I think it was used for a business trip, 
that was one of the purposes we bought the airplane. Karl 
Kaufmann, who happens to be a car dealer, told me he flew 
the airplane a couple of times to a car show. Secord flew 
the airplane a couple of times down to Florida where Ire 
said he had to go down to give a talk. So it went down and 
back there. In my case I don't think I flew in a business 
purpose on any of those. 




And since your retirement you've sort of 



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n.w.rysiinons 1 specialized in Saudi Arabian business opportunities? 

2 A Oh, yes, even before my retirement when I worked 

3 in the Pentagon I was specialized in Saudi Arabia. Since 

4 my retirement I've formed a consulting business and I 

5 consult with several major U.S. firms in focusing on Saudi 

6 Arabia and the Middle East. 

7 Did you ever consult with anybody in Saudi 
Arabia in regard to an aircraft in the United States? 

9 A Yes, I do consulting work with the Saudi Arabian 

10 Embassy, and part of that effort in consulting with the- 

11 Saudi Embassy has been in conjunction with aircraft that 

12 the Saudi Government has had in the States and doing 

13 modification work on them, yes. 

14 Did any of those deals have anything to do with 

15 Mr. Bamieh? 

16 A No. 

17 Were you connected in any way with Mr. Phillips' 

18 current employment at Litton? 

19 A With his employment at Litton? 

20 Right. 

21 A When they hired him I made a recommendation that 

22 he would be a person to hire. They asked me about him. 




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Are you a registered agent? 

A For Saudi Arabia? 

Yes. 

A No. 

Why is that? I'm not familiar with those 
regulations. Is there some reason for that? 

A My work for the Saudi Arabian Government is 
primarily in the aviation and communications areas, and by 
the rules and on the advice of my corporate counsel here I 
didn't ihink it was necessary. I didn't think it was 
necessary at the time, and I looked at it recently and they 
said we think that your decision was right. 

You were first familiar with — well, perhaps I 
should ask you when you first became familiar with the 
contra issues? 

A I don't recall — when I was working at the 
White House on the 150 account I don't recall the contras 
being a topic that came into my realm of responsibilities. 
I never really bounced up against the contras. 

I would say El Salvador and the rebel situation 
in El Salvador was the only real thing we focused on in my 
area while I was at the White House. I would say it was 



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much after I left then the subject became much more 
publicly known. 

Perhaps we could broaden the subject matter to 
anti-communist concerns in Central America. Would that 

make you feel comfortable about 

A Well, I guess that then it would back me up into 
the time from the time I came to the White House, when I 
started working the 150 account and we were concerned about 
rebels in El Salvador and supporting the government in El 
Salvador. 

So the portions of that worldwide budget that I 
dealt with that had to deal with El Salvador, I would 
attend meetings in the budget process and the interagency 
process and either would attend with another regional 
expert from the NSC or if there were some issues that I 
thought were germane I would come back to the NSC from a 
general meeting and I would go and talk to the regional 
guys and focus in on what I thought might be an issue that 
they ought to be aware of or be involved in. 

Did there come a time when you were in contact 
with Bud McFarlane over these general concerns? 

A Not with Bud McFarlane, no. Mostly, if you're 



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n._rysimons 1 talking again about coiranunist efforts in Central America it 

2 would have been the regional guys, and by the regional 

3 guys, Poger Fontaine and Ollie North. 

4 Did you ever discuss anti-communist efforts in 

5 Central America with Bud McFarlane? 

6 A To the best of my knowledge, no. 

7 Have you ever discussed with Bud McFarlane any 

8 financial assistance to anti-communist efforts in Central 

9 America? 

10 A . No. 

11 Have you ever discussed with him any financial 

12 assistance to any anti-communist efforts anywhere in the 

13 world? 

14 A No. 

15 You mentioned Ollie North, when did you first 

16 meet him? Is that when you first arrived at NSC? 

17 A No. I met Ollie in 1981 during the debates on 

18 the AWACS sale to Saudi Arabia. 

19 And his involvement in that was through the NSC? 

20 A That's correct. He was assigned to the NSC. I 

21 was not assigned to the NSC at that time, but yes. 

22 Have you ever discussed any financial assistance 



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n.^rysimons 1 to Central American anti-conununist efforts with Ollie 

2 North? 

3 A Only as a part of the process when I was at the 

4 NSC on the security assistance budget. 

5 What were the concerns that you and he discussed 

6 at that time? 

7 A It's hard to recall specifics, but in general 

8 terms it requires sort of a more detailed discussion of the 

9 budget process. Basically Ollie was concerned that El 

10 Salvador got their share of the piece of pie. Now thet>e is 

11 a pie that's the security assistance budget, the 150 

12 Account around the world, and as other competing priorities 

13 around the world get more attention and the Congress only 

14 allows us to have a certain amount of money and they always 

15 seem to saueeze it down, then everybody gets squeezed. 

16 So Ollie was just concerned that his piece of 

17 the pie could be as big as our priorities would allow it to 

18 be. 

19 Did you ever discuss with North or anybody else 

to 

20 a contingency plan for continuing aid anti-communist causes 

A 

21 in Central America in the event that Congress squeezed the 

22 Central American Budget too much? 




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n.-rysimons 1 A No, we did not. Are you talking about while I 

2 was at the NSC or since that time or any time? 

3 The question was any time. 

4 A No. 

5 Have you ever transported or possessed any 

6 amount of cash over 55,000? 

7 A No. 

8 Have you ever discussed any such activity as it 

9 might have related to Oliver North? 

10 A No. 

11 You never talked about that subject with 

12 anybody, moving cash? 

13 A No. 

14 Have you ever discussed the movement of cash 

15 specifically to or from or between the United States and 

16 Central America? 

17 A No. 

18 Have you ever discussed any Swiss bank accounts 

19 with Oliver North? 

20 A No. 

21 Any other bank accounts other than in the United 

22 States? 



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The same Question with regard to Richard Secord. 
No. 

Albert Hakim. 
No. 

When Secord told you that there was going to be 
a wire transfer to cover the $48,000 plus left on the 
Maule, did he tell you where it was coming from? 

A No, he didn't. He just said that the company 
that was buying it would be wire transferring to pay o6f 
the account. 

He didn't tell you from what country or from 
what bank account it was coming from? 
A No, he did not. 
And you didn't ask him? 
A No, I did not. 

Have you ever heard from any source about a 
transfer of cash over S5,000 to or from a public official 
in the United States? 

A No, I have not. 

Have you ever been with Secord and North at the 
same time? 



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niary Simons 1 A Yes. 

2 On how many occasions? 

3 A Once. Well, more than that. That's not true. 

4 Once since I left the White House, since I left the Air 

5 Force. Before that I was probably with North and Secord 

6 perhaps during the AWACS debates on perhaps a couple of 

7 occasions because we used to have group meetings in which 

8 we were discussing briefings and things. 

9 The three of you were fairly heavily involved in 

10 the AWACS project from different angles; is that fair to 

11 say? 

12 A From different angles, but Ollie North was 

13 really a minor player. Ollie North and two other officers 

14 assigned to the NSC were essentially what I called the 

15 command post for scheduling. We had to give many briefings 

16 and they may have gone into more than a hundred. Ollie 

17 North and two other officers kept track of who we briefed, 

18 what the feedback and what the follow-up actions were, but 

19 Ollie was not — he was not the primary point of contact 

20 for us at the NSC. 

21 They were sort of your dispatchers and they 

22 would send you here and there and make sure you got knew 



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n.-rysimons 1 where you needed to be? 

2 A In a wayr yes. Ollie North might call my office 

3 or me and say would you meet Dick Allen at Senator So and 

4 So's office this afternoon at 4 o'clock for a briefing, but 

5 that was in a much minor fashion. 

6 As a matter of fact, I don't recall specifically 

7 that Secord would have gotten to know Ollie North at that 

8 session, but the odds are that in one of the general 

9 j meetings that we were at that Ollie and the other two 

10 officers would have been there just reviewing what our next 

11 actions were. 

12 So yours and Secord 's were the major roles and 

13 NSC's role was a smaller one? 

14 A No. Secord and I, as were many other players, 

15 were part of that process. General Secord as the Deputy 

16 Assistant Secretary of Defense had higher responsibilities 

17 than I did, but during the summer of 1981 we divided up 

18 into basically three teams to e«(»«r'^*it the reguirements 

19 that we had for briefings. I was the technical briefer 

20 with one team and Secord was the technical briefer with- 

21 anol^er ttaaT^^ . ^.~?lS 

22 The President had assigned Dick Allen to be the 



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n.-rysimons 1 senior point man on the AWACS issue and we all worked 

2 basically under his guidance. I attended briefings with 

3 Dick Allen and I also worked with other people from the 

4 State Department, ^o I wouldn't want to say that Secord 

5 and I were major players, but we were in fact primary 

6 technical briefers for the entire effort. 

7 Other than in relation to the AWACS project, 

8 while you were employedJby^he government you've only been 

9 with North and Secord once? «*» 

10 A . Yes, that's correct. 

11 All right, and- when and wh«re dt4s*h»% occur? 

12 A As I said, that was after I left the 

13 government. It was not while 

14 That was my question^, after you left the 

15 government. 

16 A After I left the government, okay, yes, one 

17 time. --- ^- ^^ 

18 ^- Tii»t^r» -U0 ! ^w om w 6 down to one and when was it? 

19 A That was in early 1985, probably January or 

20 February, January probably. 

21 Where did that occur? 

22 A At the NSC, in Ollie North's office at the NSC. 



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n.^rysimons 1 Who else was present? 

2 A No one was present when we were having a chat. 

3 It was more of a social kind of thing, but no one else was 

4 present at that time. We went to the NSC. I was there for 

5 ! two reasons. I was talking with another officer at the NSC 
i 

6 I and Secord asked me to join he and Ollie North for a 

7 [ discussion. 

8 I And who were you talking with? 

9 1 A I was talking with Jim Stark. -. 

10 0. What W4S tliaE-feoo^ just very briafly? j .. • 

11 A I'm not sure. I think it was something 

12 associated with — well, I had spoken with Jim several 

13 times and also Don Fortier. I get calls from them now and 

14 then just asking me about things associated with what I had 

15 done before, sort of OJT and new people, training new 

16 people. 

17 AWACS residual —*- ' - 

18 A Security assistance budget residual stuff 

19 primarily and some AWACS residual stuff, yes. 

20 What was the subject that Secord wanted you to 

21 discuss with Norttt and him? ' 31[^\ .W ^£i= 

22 A It %i4H&sst^ciated with Ollie' s career pattern. 



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n.-rysimons 1 Ollie North was at that time being considered to be sent 

2 off to the Navy War College in Newport, and since I had 

3 left the NSC a year before and had gone from the NSC and 

4 the Air Force had wanted to send me off to another 

5 assignment and I didn't do that. I elected to retire. 

6 Secbrd thought that at my career pattern and 

7 time in life I could provide some sort of informal 

8 professional counseling to Ollie about the pros and cons of 

9 him going off to a school that would take him out of the 

10 Washington area when he was heavily involved in projects 

11 that he thought ware lmport«nt for him to stay fTr» 

12 Washinnlton. 

13 And how did the discussion go when you joined 

14 it? 

15 A Well, in general terms it was that the Navy 

16 wanted him to go off to War College and he was wondering, 

17 in his own mind wondering whether it would hurt his career 

18 if he attempt to resist that assignment and stay in 

19 Washington and he talked about whether he really needed to 

20 go on to further professional military education or whether 

21 he could get into the National War College which would keep 

22 him in the Washington H|A*^^^^ther he could just say 



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that he didn't think he needed to go to the War College at 
all because when he finished his 20 years he was probably 
going to retire anyway and maybe- he didn't need to worry 
about his career progression steps professionally. 

He at that time was very heavily involved in 
Central American efforts and thought that his presence in 
the process was important and he didn't *ant^o leave 
something half undone. 

Did he describe that involvement to you? 

A . No, he didn't really describe it. You know • 
about it in general terms because it was more in the papers 
at that time, but he did give us, or at least he gave me, 
which was news to me, a little bit of a briefing on the 
situation with the situation that the contras were finding 
themselves in in Central America. 

Particularly their financial straights? 

A No, it was more their military situation and it 
related to the financial support that they could get from 
the United States, but it was more specific. Really the 
pictures in his office, he had a bunch of photographs and 
stuff of wounded contras, and I remember specifically the 
story told to me about a Miami doctor that was giving up 



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long weekends to go down and serve as a doctor in the 
hospitals ^^^^^^^^H when the rebels were brought back 
wounded . 

But it was basically sort of, like Ollie does 
very well when he's going out and giving talks, as I 
understand. It was sort of ginger and sympathy and Ollie 
was very enthusiastic about his support and his need for 
the United States' support for that. But the main purpose 
of it was this professional discussion. We sat there and 
chewed it over a little bit. We had a couple of beers and 
chatted about it and decided that Ollie would make an 
attempt. 

I gave him my advice that said I didn't think 
that in the long run it would really hurt his professional 
career if he did try to fight the system and avoid an 
assignment to Newport. 

Did you ever discuss with ollie North at that 
time or any other time! 

A No, I did not. 

Did you ever discuss with Ollie NorthI 



With — 



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Q Did you ever discuss with Ollie North 




A No, I did not. Only in the past] 
I ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H but never 
5 ! connection with financing or anything like that. 



The same questions with relation to Pud 



7 McFarlane. Did you ever talk with Bud ^«cFarlane about 



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talked about 
and things lik 



no. We 
th Bud McFarlane in general -terms 
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during my time at the NSC Bud McFarlane and other people on 

the NSC staff because they knew I knev 

interested in, where' ^^^^^^^^^^^H do you know? It was 

just sort of from a personal nature, but we never discussed 

funding. 

Did you ever discus] 

[with McFarlane? 

A No, I never did. 

Now a long time ago we said we were going to get 
back to this original approach that Secord made to you 
about the contras and we're back there. 



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A Okay. 

Could you lay it out to me in as much detail as 

3 you can recall, this original approach that Secord made? 

4 A Well I think I stated it all before as much as I 

5 I recall about it. 
I 

6 1 We kind of creeped into it, didn't we. 

7 I A Well, we did, but the specifics, to the best of 

8 I my recollection, Secord said that he wanted to talk to 




11 He prefaced that 

12 ^^^^^^^^ Then we talked about what he wanted to see him 

13 I about, and then he told me that. 

14 I Then I took that and after some time, and I don't 

15 remember exactly how much time, but it probably was within 

16 a few days probably, probably the next time I sawl 
j^^^^^^ and mentioned ^^^^^^^^^^^H that 

18 would like to see you. 

19 ; What does he want to see me about? And I said 

20 he would like to see if it wouldn't be in your best 

21 interests 

22 ^^^^^^^^^^^^^^^^ftiold me in no uncertain terms that that 




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was ridiculous and he wasn't interested in seeing him. 

Ifou placed that conversation in early '85? 

A Yes . 

And also the conversation with North and Secord 
in North's office in early '85. Can you tell me which of 

6 I those took place first? 

7 I A I think the session with, the counseling session 



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as I call it, the professional counseling session with 
Ollie I think took place before this conversation. 

. And can you tell me if you had any discussiens 
at all withl 

during that same general time period? 

A If I had any? 

Yes. 

A No, I didn't. 

Did you have any discussions with him while he 
was here? 

A No, I did not. 

After he was here? 

A No, I did not. 

So your contact with him was limited during that 
period to contact 



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i,_rysimons 1 ] A That's correct. The only time ll 

2 ; was at a dinner that he gave and I shook his hand going 

3 I through a reception line. 

4 Have you told us every conversation that you've 

5 had with Secord about contra aid, and I don't mean to ask a 

6 difficult Question, I'm making a very broad auestion now, 

7 broader than contra a i d^^^^^^^^^^^^^B to 

8 find out if you've talked to him about any form of contra 

9 aid in a conversation you haven't already talked about? 

10 A No. Only that in the last several months since 

11 this Iran contra affair got started, I've had a couple of 
1 

12 I conversations with him no} the telephone. 

13 One I recall specifically was him calling up and 

14 I saying, hey, I'm sorry your name got dragged into this 
I 

15 thing with that dumb airplane that we owned which was the 

16 original tie that get my name tied to his and the 

17 situation. But we've had several conversations over the 

18 phone in general terms about how are you doing, but I've 

19 only seen him that one time that we talked about before. 

20 In any of these phone conversations did he 

21 discuss or explain to you his Involvement in aid to the 

22 contras in any way, financial, physical, military or 



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otherwise? 

A well, he spoke about it generally a couple of 
times. When I asked him how he was doing, he said yes, he 
says I've helped, and he says I helped because I was asked 
to help and I haven't done anything illegal and he repeated 
that several times to me, but generally that's the crux of 
any conversation I've had with him has been along those 
lines. 

Let me ask you the same Question with regard to 
his involvement in the Iranian arms deals. Has he ever- 
explained to you anything about the facts of his 
involvement? 

A No. 

Do you know or know of a person named Theodore 



Shakley? 
A 

A 



Yes, I do know him. 

How do you know him? 

I met him about — well, sometime while I was in 
the Air Force he was working with a company called KACI, 
and I don't know what the acronym stands for, and it was 
associated with some services that KACI was providing. I 
don't recall if it was for Saudi Arabia or Egypt, but I met 




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n.^rysiinons 1 him on one occasion. 

2 What was the occasion? 

3 A I don't recall exactly when it was. I thir;k it 

4 was while I was at the NSC but it might have been while I 

5 was still with the Air Force. More than likely it was 

6 while I was still at NSC if he was talking in general terms 

7 about something that KACI might have been doing for Egypt, 

8 but it was a short meeting and I only met him on one 

9 occasion. 

10 , What was KACI doing? 

11 A They were providing, let's see -- through 

12 another gentlemen I know that they did some analytical 

13 studies for Egypt, but beyond that I don't know. 

14 You said through another gentleman or with 

15 another gentleman? 

16 A Yes. I said KACI, the only recollection I have 

17 of what they do is that another gentleman that I knew who 

18 worked with KACI, and they were doing analytical studies 

19 for Egypt in the area of command and control. 

20 Who is this other gentleman you know? 

21 A Joe Vecchio, but he's not related with Shakley. 

22 I didn't meet him with Shakley. He doesn't even work with 



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them any more. He doesn't work with KACI. 

Have you ever spoken to Shakley since? 

A No. 

You've had no other dealings with him since? 

A No. 

Do you know of a person named Tom -MMHb? 

A I've never met him. I've read his name 
recently. But I don't know. I've never met the guy. 

Did Secord ever discuss him? 

A . No, he did not? 

Did Hakim? 

A No, he did not. 

Did either Secord or Hakim ever mention anything 
about the procurement of arms in Europe for the contras? 

A No, they did not. 

Have you ever been to Central America? 

A I've been to Panama in 1970 I think it was doing 
tests on a A-7 as a pilot for the Air Force. 

Is that your only trip to Central America? 

A I went to Panama to a SouthCom, Southern Command 
conference, and I can't recall exactly whether I was still 
at the Pentagon or whether it was when I went over to the 



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NSC, there was a conference in which they brought all their 



country people together to discuss security assistance 
needs. So it was either as the Deputy General dOBk' 



■f-or 



Policy on Security Assistance or it was after I went to the 
NSC. More than likely it was after I went to the NSC and 
it would have been in the '82 time frame. 

What was your purpose in being at the 
conference? 

A Just to attend the conference and to hear the 
briefings that people gave from Central and South America 
about the situation in the region. 

Have you ever had a bank account in Panama? 

A No, I have not. 

Have you ever had any bank account in any 
country other than the United States? 

A No. 

When I say "have" I mean have any control over 
or access to. 

A No. 

Nothing like that. 

A No. 

Do you know Richard Miller? 



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A No, I do not. 
Spitz Channell? 
A No. 

Carl Channell? 

A No. I've read the name in the paper, but I 
don't know them. 

Naturally I mean other than what you read in the 
newspaper. 

A No. 

MP. HOLMES: Would you like to ask some 
Questions? 

MP. BOBBITT: Yes. I have just a couple of 
things to go over material you have already been over. 
EXAMINATION 

Ill ■iiTliiiiii 1 1 

Were you at the NSC when the Political Military 
Section was set up? 

A Yes, I was. 

Can you tell me what was behind that? Was 

Fortier the driving designer behiaid pul^lig • .P»C»ectlon in 
the NSC7-iJfc -^ 

A I don't know the motivation really behind it. I 



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n.-rysimons 1 was working with a gentleman by the name of Bob Kimmitt and 

2 there were sort of several things that were going on. 

3 There was security assistance and the arms transfer process 

4 and then there were the guys that were attached to the 

5 regional folks but they were military officers, and Don 

6 Fortier was working in another section, and I think it was 

7 primarily Bud McFarlane and Don Fortier perhaps along with 

8 this other reorganization that was going on where Bob 

9 Kimmitt moved up to Executive Secretary that sort of ju«t 

10 lumped us all in together, but the real motivation behiod 

11 it, I don't know. 

12 So after the reorganization foreign assistance 

13 became part of PM? 

14 A Yes. I worked essentially for Don Fortier. 

15 When did North become part of Political 

16 Military? 

17 A At that same time. It just kind of came 

18 together. 

19 It pulled all four, then^ of the military people 

20 in? 

21 A It pulled all four of the military people 

22 together. I was called a Director. I was the senior 



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01 01 115 

n.urysimons 1 ranking of the group, and the other guys were called Deputy 

2 Directors because they were Lt. Colonels batftally and one 

3 was a junior Colonel, but I wasn't their bossir We all had 

4 our own accounts. It was just four different kinds of 

5 things that were — it was more than four, but we all had 

6 our separate things that we did and we all reported 

7 directly in a single line to Don Fortier. 

8 I sometimes sat in for Don Fortier when it came 

9 to administrative budgets and secretariaL-Overtii^jfciftnd 

10 things. like that.,, * S 

11 I>ld North's role «feaa9# irtien you-drg*BlEed PM? 

12 A To my knowledge, it didn't. He had the 

13 counterterrorism accounts and the Central America Political 

14 Military stuff and from my observation it didn't change. 

15 But it's important to know that in the NSC it's a thin 

16 staff. 

17 So I wenF%S and tfSdtMBCurity a9sis(3fflc«^||^fe=pM9'~n* w*nt 

18 off anddid his stuff just like everyitoe • Jjupt^ 'iaa-ltn ^lot 

19 of cases the worst p«rson to-Jfe»tk to about »TOtt^ the guys-Jla^^ 

20 the NSC did was one of tha ir c^ llMgves. - -^, 

21 ^;.^IM£I^ what pu3irl«i nT U^^^i^NorSb «>«& from^ ; 

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01 01 

lu-rysimons 1 almost say an easel carrier in the AWACS period when he's 

2 detailed to NSC to taking on the Central American 

3 counterterrorism accounts under the reorganization, and 

4 that occurs at a time when you're also at the NSC and I 

5 I just thought you might help me understand that change in 

6 I role. 

7 A Well but you've got a break in there. Remember 

8 the AWACS work for the NSC ended on the 28th of October 

9 1981. We we're talking at least, and I don't remember 

10 exactly when the Political Military Sector was formed, but 

11 there was an evolution of a period of one year and Ollie 

12 North and the other people who were spending a lot of time 

13 on AWACS went to other things. So their responsibilities 

14 seemed to grow during that period. So I don't think it's a 

15 step jump from an easel carrier to a major responsibility. 

16 1 see, or at least I see it more clearly. 

17 Would you describe your relationship to Mr. 

18 McFarlane? 

19 A ' I met Mr. McFarlane in early 1981 when he was 

20 working at the State Department as a counselor to Secretary 

21 Haig. It was again associated with the AWACS that I met 

22 Mr. McFarlane. We went through the entire AWACS issue. He 



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n.-ry Simons 1 was still at the State Department. 

2 Over the period from the end of 1981 when he 

3 went over to the NSC as a Deputy to Judge Clark, he and — 

4 well, more specifically Bob Kimmitt is the one who asked me 

5 if I would be interested in interviewing for a position at 

6 the NSC, that they were interested in finding someone who 

7 knew security assistance and foreign military sales. So I 

8 came over, and I guess that McParlane would have been one 

9 of the guys who would h'Ave endorsed me because of the — 

10 experience that b]; had with me during the AWACS. 

11 So Kimmitt and McFarlane I say are the guys that 

12 asked me to come over J^ tSie- NSC, but I dftn'€^!eally know 

13 Bud on a social basis. I knew him on a more formal basis 

14 in working at the NSC. 

15 Did you report to him? 

16 A No. I reported initially to Bob Kimmitt and 

17 then after that to Don Fortier. 

18 1 gather that you don't recall a great many 

19 corridor discussions or anything about contra funding in A- 

20 3. You were about to leave anyway. 

21 A I think there was very little going on at that 

22 time, and if it was going on, it was going on perhaps in 



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the covert area, and I had no responsibilities in covert or 
any of the CIA budget work. Mine was strictly the State 
Department 150 Account. 

(Counsel Gale gets up and stands behind his 
chair. ) 

MP. BOBBITT: Would you like to break? 

Ml^. GALE: No, that's okay. Go ahead. I'm 
taking a break. 

MR. BOBBITT: All right. I haven't got but 
about five more minutes in going through this. 

BY MR. BOBBITT: 
It seems from what I've heard and read that a 
lot of people seemed to have approached you when they want 




So it wouldn't have been odd, I take it, for 
Secord to approach you as it did in the spring of '85? 

A No, that wouldn't have been at all abnormal. 
Yes, you're right, people do call me up now and then when 
they like to try to ^^^^^^^^^^^^^^^^^^^^^1 



Secord has, however, a relationship! 



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MR. BOBBITT: you=*a'W*h'fc^ad a^^trtnce -to get in 

EXAMINATION 
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On another subject, I'm reminded by my notes 
that there may have been a business opportunity that Keith 
Phillips was developing in relation to hangars or steel 
buildings. So you know anything about that? 

A Other than discussions that we've had about the 
general terms about the shelters because 

Did Phillips have any role in the shelters? 

A Well, when we went to Saudi Arabia and on a 
couple of occasions when we were there we were talking 
about the people that we were talking with and, yes, he 



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01 01 128 

n.^rysiirons 1 knew about General Secord's efforts to try to sell 

2 shelters, and as a part of that one time when we were in 

3 Saudi Arabia and went to Daharan he went with us on a tour 

4 of the existing shelters. So, yes, he was aware of what we 

5 were doing and he was involved to that extent. 

6 Did he have any competitive role or possible 

7 opportunity of his own in that regard? 

8 A Not in regard to shelters, no, I don't think 

9 so. To the best of my knowledge, he didn't. 

10 Is there anything, knowing as you do from tf\,e 

11 press at least what we are investigating, that would be 

12 helpful for us to know that you know of indirectly? 

13 MP. GALE: I kind of object to that Question. 

14 We don't want to get involved in any speculation, and I 

15 don't think that's a fair thing to inauire into, 

16 speculation. 

17 MR. HOLMES: I don't mean to ask you to 

18 speculate. I mean to ask you to take this opportunity to 

19 help us in our inquiry if you have other things that we 

20 simply haven't touched on that you know of. 

21 THE WITNESS: No, I really don't. I can't think 

22 of any areas that you've left unturned. 



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I've got my own opinions of course about a lot 
of things, but nothing 

MR. HOLMES: Well, I appreciate your cooperation 
with us, and I have no further Questions. 

Is there anything that you would like to make a 
record on 

MR. GALE: No, I have nothing. 

MR. BOBBITT: I would like to get one thing 
clear in my mind. You have never had a discussion with 
McFarlane regardiTic 




THE WITNESS: I never have. As a part of my 
security assistance responsibilities in the past there have 
been in the interagency process general discussions about 




That was while I was in the government and as a 
part of my responsibilities, but since that time we have 
never had any discussions nor even then did we have any 



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discussions about 

MR. BOBBITT: And no discussions with^ecord on 
a similar topic save for one approach in the spring of '85? 

THE WITNESS: That's correct, in the one 
approach and then my reporting back to him that he wasn't 
interested in talking to him. To the best of my knowledge, 
unless we replayed that same conversation back again, we 
never talked about it in any other terms except for that 
approach that he wanted to make, 

MR. BOBBITT: And no discussions with 
except the reaction to the Secord approach which you've 
accounted for usi 





THE WITNESS: That's correct, and in general 
terms reaction tc 




I, but we've talked about the Iran contra 
thing just as a matter of being together when we were 
watching the news together. 

MR. BOBBITT: But really only after it hit the 
press. 

THE WITNESS: That's correct. 



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MR. BOBBITT: Thank you. 

MR. HOLMES: Thank you very much for coining. 

THE WITNESS: You're welcome. 

(Discussion off the record on the reading and 
signing of the deposition to be done in the offices of the 
Select Committee due to the sensitive nature of the 
materials discussed.) 

(Whereupon, at 5:40 p.m., the Deposition of 

ROBERT H. LILAC concluded.) 

* • * * • , 

I have read the foregoing pages 

through , inclusive, which 
contain a correct transcript of 
the answers made by me to the 
questions therein recorded. 
Signature is subject to 
corrections. 
ROBERT H. LILAC 

• * * • « 



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1 CERTIFICATE OF NOTARY PUBLIC 

2 COMMONWEALTH OF VIRGINIA ) 

) SS.: 

3 COUNTY OF FAIRFAX ) 

4 I, MARY C. SIMONS, the officer before Mhos the 

5 foregoing deposition was taken, do hereby certify that the 

6 witness whose testlaony appears In the foregoing deposition 

7 was duly sworn by me; that the testimony of said witness 

8 was taken by ae In stenoaask to the best of ay ability and 

9 thereafter reduced to word processing by ae, that said 

10 deposition Is a true record of the testimony given by said 

11 witness; that I aa neither counsel for, related to, nor 

12 eaployed by any of the parties to the action In which this 

13 deposition was taken; and further that I aa not a relative 

14 or eaployee of any attorney or counsel eaployed by the 

15 parties thereto, nor financially or otherwise Interested In 

16 the outcoae of the action. « ^ 

17 "^ C^^ ( ^-A^^^^ft^-. 

18 Hary C. Slaons 

19 Notary Public In and for the 

20 Coaaonwealth of Virginia 

21 My Coaalssion expires 

22 August 19, 1968 



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DEPOSITION OF COL. JAMES B. LINCOLN 

Tuesday, July 21, 1987 

United States Senate 
Select Committee on Secret 
Military Assistance to Iran 
and the Nicaraguan Opposition 
Washington, D. c. 
Deposition of COL JAMES B. LINCOLN, called as 
a witness by counsel for the Select Committee, at the 
offices of the Select Committee, Room SH-901, Hart Senate 
Office Building, Washington, D. C, commencing at 1:35 
p.m., the witness having been first duly sworn by JANE w. 
BEACH, a Notary Public in and for the District of 
Columbia, and the testimony being taken down by Stenomask 
by JANE W. BEACH and transcribed under her direction. 



Pailbly OedMrifiMt/ Released on 



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^ D. SMe, NtfioMi Secwity Council 



COPY NO- 



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1 APPEARANCES : 

2 On behalf of th« S«nat« Select Committee on Secret 

3 Military Assistance to Iran and the Nlcaraguan 

4 Opposition: 

5 JOHN SAXON, Esquire 

6 Senate Select Connlttee 

7 9th Floor, Hart Building 

8 Washington , . C . 

9 On behalf of the House Select Committee to 

10 Investigate Covert Arms Transactions with Iran: 

11 ROBERT H. GENZMAN, Esquire 

12 Associate Minority Counsel 

13 House Select Committee 

14 115 Annex 1, The Capitol 

15 House of Representatives 

16 Washington, D.C. 20515 
17 

18 ROGER LEE KREUZER, Esquire 

19 Investigator ^.^^^ ^ 
20 

21 R-419 The Capitol 

22 Washington, D.C. 20515 



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1 

2 On behalf of the witness: 

3 ROBERT J. WINCHESTER, Esquire 

4 Office of the Secretary 

5 United States Army 

6 Special Assistant to the Secretary of 

7 the Army for Legislative Affairs 

8 The Pentagon 

9 and 

10 COL. JOHN WALLACE 

11 Washington, D.C. 
12 

13 






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CONTENTS 

EXAMINATION ON BEHALF OF 
WITNESS SENATE HOUSE 

Col. Jaa«s B. Lincoln 
By Mr. Saxon 
By Mr. Kr«uz«r 



Th« 



EXHIBITS 
no axhlblts mark«d In this daposition. 



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1 PROCEEDINGS 

2 Whareupon, 

3 COL. JAMES B. LINCOUI, 

4 called as a witness by counsel on behalf of the Senate 

5 Select Committee In the above-entitled matter and, having 

6 been first duly sworn by the Notary Public, was examined 

7 and testified as follows: 

8 EXAMINATION ON BEHALF OF THE SENATE COMMITTEE 

9 BY MR. SAXON: 

10 Q If you would, sir, give us your name and rank. 

11 A James B. Lincoln, Colonel, U.S. Army. 

12 Q What Is your current assignment. Col. Lincoln? 

13 A I was just recently reassigned as the Chief of 

14 the Office of Project Management in the Army Materiel 

15 Command Headquarters in Alexandria, Virginia. 

16 Q And iBBedlately prior to that, what was your 

17 position? 

18 A I was the TOW Project Manager in Red Stone 

19 Arsenal, Alabama. 

20 Q And I believe It was in that capacity in which 

21 you were involved In the matters of investigation by our 

22 two Committees. Is that correct? 

23 A That's correct. 

24 Q Colonel, If you would, let's go 

25 chronologically through your involvement with what became 



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1 Project Snowball. That is, the requirement that the Army 

2 provide to the CIA TOW missiles, and simply tell us when 

3 that involvement began. 

4 Q My first involvement and the involvement of my 

5 office in the Army Missile Command, as far as I know, 

6 started with a phone call to me in about the mid-January 

7 1986 time frame from Ma j . Simpson, Department of the 

8 Army, DCSLOG, Deputy Chief of Staff for Logistics Office, 

9 and he alerted me to a rather unusual mission involving 

10 preparing and shipping a quantity of TOW missiles for a 

11 customer that was not mentioned by him. 

12 He further stated that there would be no 

13 paperwork. This would be handled with phone calls, and 

14 that he would be my only point of contact. We just 

15 started to work the details from that very first phone 

16 call. 

17 Q And that would be Ma j . Christopher Simpson. 

18 For tha racord, h« was the Army Action Officer on this 

19 project. Is that right? 

20 A That's correct. 

21 Q You said that ha gave you a rather unusual 

22 request. You may hava answered already with what 

23 followed, but for what reason would you characterize it 

24 as unusual? 

25 A Wall, first of all, getting a call at home at 



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1 night; and getting a description of a Bilitaxy 

2 r«quir«a«nt, or a mission that h« wantsd m« and sy offic* 

3 to perform. I don't think thsrs had svsr bssn anything 

4 quits liks that bsfors, sithsr for mysslf or for ths 

5 Command, or certainly for any requirement for the TOW 

6 project to perform it in that way. 

7 And some of the questions that Z asksd he 

8 wasn't able to answer — such things as when? where? How? 

9 The normal kind of questions you might ask. He said, 

10 those details are still uncertain. 

11 Such things as informing the chain of command 

12 such as my boss. Z was specifically told that was not 

13 permitted; that I was to involve the absolute minimum 

14 niimber of people necessary to do the mission, and that I 

15 specifically could not tell my boss what was going on. 

16 Q Had you ever been involved with a mission in 

17 which you had those kind of constraints and conditions? 

18 A Not directly, but we did have a previous 

19 mission involving anj 

21 found out later, but it was not anywhere near as 

22 sensitive or close-hold as this particular mission was. 

23 Q What was the number of TOWs you were initially 

24 told you would be shipping? 

25 A The number varied greatly. Initially, he said 

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1 as many as 4500. Hell, h« didn't us* th« words "as 

2 many." H« said, ths quantity has b««n stated by "his 

3 customer," and h« kspt rsfsrrlng to "his customer" as 

4 4500. 

5 And in fact, for ths first faw days as vm 

6 bagan to look Into axscutlng ths mission, that was the 

7 number. Then shortly thereafter, perhaps within three or 

8 four days after that, the number was changed dramatically 

9 and went dotm to about 2500. 

10 Q' The first shipment was to be 1000 TOHs? Is 

XI that correct? 

12 A I don't recall If right during the initial 

13 conversations that a first shipment, or a quantity of 

14 1000 was mentioned. I don't believe it was. It wasn't 

15 determined at that time yet. 

16 Q Did Naj. Simpson ask you what the status of 

17 our stockpiles was of TOW missiles? 

18 A Z don't believe that ha did. Z told him that 

19 this was going to have an obvious impact on our 

20 stockpile, which really even though these were so-called 

21 "basic TON missiles" which are not our better or our best 

22 missiles by far, they still are part of our war reserve 

23 and they would have an impact. But Z don't recall that 

24 he ever asked that, or that Z was asked to express an~or 

25 comment on what would happen, or would be the impact on 



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1 our stockpile. 

2 Q I wasn't asking you specifically on the 

3 question of readiness, per se, but simply whether he 

4 wanted to know from the very outset with his first 

5 question what our stockpiles were— in other words, could 

6 we meet the requirement? 

7 A Oh, yes. He did ask in that context, do you 

8 have sufficient stocks to satisfy this mission? And I 

9 said, I don't know; I'll have to check. 

10 Q I want to say for the record that if Z make 

11 reference to the fact that you told us previously, or 

12 that when we discussed these matters previously, what I 

13 have in mind is the fact that on April 7th there were 

14 three of us from the Senate Committee, myself included, 

15 who met with you. 

16 I believe you told us that you received a 

17 second phone call from Maj . Simpson shortly after the 

18 first one In which he specified a specific model number. 

19 Is that correct? 

20 A Yes. He had apparently looked in the Army 

21 catalog — 

22 Q That would be the Army Master Data File, or 

23 AMDF? 

24 A Right. AMDF, Army Master Data File. And 

2 5 there are many versions of TOW missiles listed in there, 



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1 and h« had apparently plckad th« on* out that h« wanted. 

2 H« gav* n« a vary spaclflc modal nimbar. 

3 Ha further told ne what the price was, the 

4 price that he took out of the Army catalog. He told me 

5 that was what his customer wanted. 

6 Q He specified Basic TOW? 

7 A Yes. 

8 Q And was the price he gave you $3,169? 

9 A Yes, the price that he had looked up. And I 

10 made a comment that we'd like to go verify that, which we 

11 did. And ha had looked it up correctly; it was the 

12 correct model number, correct price, and in a later 

13 conversation we confirmed that with each other. 

14 Q And did he indicate what condition the 

15 missiles should be in? 

16 A Not at that time. In a later conversation he 

17 made the comment that the missiles must be in Condition 

18 Code A. 

19 Q What does that mean? 

20 A That means that the missiles have no 

21 restrictions of any kind. They can be fired under any 

22 conditions, fired in training, and there's no 

23 restrictions at all. 

24 I told him that the missile that he had 

25 specified to me was not in Condition Code A; it was in a 



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1 condition code that really prohibited it from being fired 

2 in training. 

3 Q That would be "Condition Code N"? 

4 A Condition Code N, November. And I didn't know 

5 for what purpose he wanted these; maybe that was no 

6 problem. But he immediately came back and said, the 

7 missiles must be in Condition Code A. And I said, well, 

8 then, we're going to have to look at a different model, 

9 or a different missile, because the ones you specified 

10 are not ' in Condition Code At 

11 Q And what did you do then to either come up 

12 with a different missile or to make that missile in 

13 Condition Code A? 

14 A We checked the stocks again and there were a 

15 couple of options. We could convert that missile to 

16 Condition Code A by installing a safety device, or 

17 finding a stock of missiles that had the safety device 

18 installed. The safety device is called a "missile 

19 ordnance inhibit circuit," "MOIC." 

20 But we had to determine that we had enough 

21 NOZCs on hand, and that we could in fact install them on 

22 an assembly-line-type operation. We determined that we 

23 did not have adequate MOIC* on hand. 

24 So we looked for another option. That was, 

25 missiles that met the recpiirement by either being in 



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1 Condition Code A or already having MOICs Installed. We 

2 detemined that ve could not neet this requirement of 

3 2500, or certainly 4500, amd that ve would have to do 

4 some kind of conversion. 

5 And ve relayed that to hia, that we didn't 

6 have adequate stoclcs. 

7 Q Before ve get to the conversion, I assume 

8 you're talking about the ITOW downgrade for that 

9 conversion. Is that correct? 

10 A Yes. 

11 Q Before we get to that, I assume yOu 

12 communicated back to hln that you could take the MOIC and 

13 put it on the basic TOW and that would bring it up to 

14 Condition Code A. Is that right? 

15 A That's correct. 

16 Q And did you get authorization from Maj . 

17 Simpson to do that? 

18 A Well, the first part of the conversation got 

19 to the price. 

20 Q The price of the MOIC? 

21 A The price of the MOIC, and the impact or the 

22 effect on the price of the missile. We said, or I said, 

23 or somebody said — and this was a combination of not just 

24 me, but other people in my office — that in order to get a 



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1 missile with a MOIC, or to put the MOIC in, there is 

2 going to be a delta. There is going to be an increase in 

3 the price. 

4 And he said, well, how much? We said that 

5 MOIC cost about $300, roughly, including installation. 

6 So he said, okay, let's take the price that we agreed 

7 upon, $3169, and we'll add $300 to it. And he and I just 

8 agreed to that. That sounds reasonable. 

9 My people more or less agreed with that. Once 

10 again, this being a very unusual mission, and this was a 

11 rather unusual way to get into the price, but we just did 

12 what seemed logical at the time. So we agreed that the 

13 price of a Condition Code A missile would be the $3169 

14 plus $300, and that's how we arrived at the price that 

15 went throughout the entire operation, the per missile 

16 price of $3469. 

17 Q Has Maj . Simpson the only person that you 

18 dealt with outside of MICOM? 

19 A That's correct, up until the time he departed 

20 the job and another individual replaced him. 

21 Q That would be Lt. Col. Armbright? 

22 A That's right. 

23 Q To go back, when Maj. Simpson said that this 

24 was to be a close-hold, or no notes, or few people 

25 involved, exactly how did he put that? And did he tell 



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1 you why that was necessary? 

2 A He said that it was a very sensitive mission, 

3 very few people in the Department of Defense and in the 

4 Government were involved in this mission, and that I was 

5 to involve only the minimum number of people that were 

6 absolutely necessary to execute the mission. And 

7 basically the fact that it was a very sensitive mission. 

8 g Did he tell you who had given him the mission? 

9 A No, he did not. 

10 Q Did you ever )cnow that the missiles were going 

11 to the CIA? 

12 A No, I did not. 

13 Q And, just for the record — although I think it 

14 is understood — you also never )cnew that they were 

15 ultimately intended for Iran. Is that correct? 

16 A I did not know that. 

17 Q And it's safe to say that no one at MICOM knew 

18 that they were intended for the CIA or Iran? 

19 A Not that I know of. I would be very surprised 

20 if anybody knew that. 

21 Q Again for the record, the TOW missiles you 

22 were looking at were located at Anniston Army Depot in 

23 Anniston, Alabama. Correct? 

24 A That's correct. 

25 Q Now what happened next? You called him. You 



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1 said va'ra going to hav« to put a MOIC on to gat than to 

2 Condition Coda A. Ha mora or lass says, okay, wa'ra 

3 talking $300. You gat tha prlca to $3469. 

4 What happans? 

5 A At this point, in looking at tha availability 

6 of stocks and tha availability of MOZCs, wa datarainad 

7 that tha battar coursa of action would ba to provlda an 

8 ITOW nisslla, an improvad TOW nissila, that was sitting 

9 thara in tha stockpila. 

10 ' So I callad him back— 

11 Q Thasa wara physically sitting whara? 

12 A Thasa wara in tha stockpila at Anniston Amy 

13 Oapot.* And I in affact said, how about ITOHa? They're 

14 sitting thara. Ha do not have enough basic TOHs in the 

15 configuration that you want, that your customer wants. I 

16 think prob«ibly a day, or part of a day want by and ha 

17 callad back and said, no, I must have basic TOW missiles. 

18 At that point I informad him that that would 

19 mean that in order to satisfy tha requirement, we were 

20 going to have to disassemble the ITOW missiles, remove 

21 tha ITOW warhead and put on basic TOW warhaada to come up 

22 with tha proper number of basic TOW missiles. And he 

23 ended up telling ma, fine, do it. 

24 And I said, there's going to ba a charge. He 

25 said, fine, tall me what tha charge is. We gave him 



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1 AstliDatas, and h* said, just k««p track of your bills. 

2 Q And what happ«na next? Do v« g«t to th« first 

3 shipment? 

4 AW* continued to prepare the Bission, prepare 

5 Anniston, and there vaa one critical point in here where 

6 I did some soul-searching about this mission and I 

7 finally told hia right before w* began to Bake crucial 

8 actions at our place and at Anniston, that Z really felt 

9 that his General was going to have to call By General and 

10 tell hia what was going on. 

11 Q And his General would be General Vincent 

12 Russo? 

13 A I believe so; right. And be argued with ae 

14 about that and said that wasn't proper, and people 

15 weren't supposed to be involved. And I said, well, I 

16 have enough concern about this aission that I just don't 

17 feel I can execute it without ay boss being inforaed. 

18 He eventually conceded. Gen. Russo called the 

19 Coaaander of the Missile Coaaand, Gen. Burbules, 

20 discussed the aission, and we proceeded on to execute it. 

21 At first we were preparing for an air shipaent 

22 which was rather coaplicatad. The aissiles were to be 

23 transported up to the Red Stone Aray Air Field, prepared 

24 for air shipaent to be picked up by soae special aircraft 

25 that Maj . Siapson was arranging, and we had to aake soae 



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special arrangements for that. 

It turned out that the aircraft pickup, part 
of it changed, and we were told to be prepared for 
trucks. And in the meantime, the missiles had departed 
Anniston, the 1000 missiles, come up to Red Stone by 
truck, and had been downloaded and sat there at a certain 
location at the airfield with 24-hour security for which 
there was a charge, and eventually picked up by trucks 
provided by Ma j . Simpson as far as I know in the early 
part of February, and they departed the area. 

Q And did Ma j . Simpson himself come do%m for 
that operation? 

A Yes, he did. 




When Gen. Burbules talked to Gen. Russo, did 



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1 th«y discuss the issue of replacement costs? 

2 A The initial conversation, I was not in on. At 

3 a later time when I personally became concerned about the 

4 price, basically that it was too low, I went back to Gen. 

5 Burbules and tried to make a case with him that the price 

6 that we were locked in on was too low, and we were very 

7 concerned about replacing these missiles and replacing 

8 them with the current missiles, which was a TOH-2, 

9 although a much more expensive missile; nonetheless, we 

10 could buy a number of replacements. 

11 I relayed this to him, and I suggested that he 

12 call Gen. Russo and try to get the price changed, which 

13 he did, and I was present in the room when he called. 

14 And Gen. Russo, I found out later, went to the Amy 

15 General Counsel to check on the validity/legality of the 

16 ANDF price that we had used as a basis, and the word came 

17 back down that the price waa legitimate. He don't want 

18 to hear any acre about the price. That's it, 

19 •■•entially. 

20 Q So we have clarity in the record, you weren't 

21 arguing that the appropriate price for the baaic TOW waa 

22 higher than $3469; you were arguing that in the proceas 

23 of selling the baaic TON out of the inventory it waa 

24 going to have to be replaced; and aince the baaic TOW had 

25 ceaaed production in 1975, the alaaile you were currently 



291 



^"msm 



19 



1 buying would b« mora axpcnslv*. 

2 So wh«n you talked about th« higher price, 

3 that's the price you were using. Is that correct? 

4 A Hell, I would really say that we were arguing 

5 for both. The price, the so-called AMDF price, was based 

6 on a 1974-75 manufacturing. There had been a 

7 considerable Increase in aanufacturing costs, inflation, 

8 and so forth. But because of the aechanics of the way 

9 the Amy catalog works, the price was never updated, 

10 because that was the last buy, and it just stayed in 

11 there. 

12 We said that even though that's the rule, we 

13 thought that to get reiabursed at that rate was not 

14 acceptable. And furthermore, we'te going to have to buy 

15 these more expensive replacement missiles. So v« 

16 characterized it both ways. 

17 Q The replacement cost for TOH-2 would have been 

18 what? 

19 A Roughly $11,000. Now that's a full-up 

20 missile, including the warhead. There's been a lot of 

21 confusion because the contractor, Hughes Aircraft, only 

22 makes the back end of a missile, if you will, excluding 

23 the warhead. 

24 He gets the warhead as government-furnished 

25 equipment, but some people have seen the Hughes price and 



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UNCUSSIFIED 



20 



1 it's much lover than th« full-up olssll* pric*. So there 

2 Is room for confusion there. But a full-up TOW-2 goes 

3 for about $11,000-U.S. price. Now if it's FMS — 

4 Q Foreign Military Sales? 

5 A —Foreign Military Sales, or sons other 

6 special category, the price can change. But the basic 

7 cost to the U.S. is about $11,000 to about $11,500. 

8 Q So if we're referring to replacement costs for 

9 a full-up TOW-2, for our purposes it is okay to say 

10 $11,000^ 

11 A Approximately $11,000; right. 

12 Q All right. Now what was the second figure you 

13 were seeking? That is, you said it would not be fair to 

14 be stuck with the early price, the outdated price for the 

15 basic TOH. Was there a figure between $3469 and $11,000 

16 that NZCOM was seeking? 

17 A Unfortunately, we were not — I was not specific 

18 with Gen. Burbules, which might have been a lot better 

19 way to justify what I was trying to do — but I just said 

20 w« need more money, and here's the rationale. But Z did 

21 not giv« hia a figure, and he did not give Gen. Russo a 

22 figure. 

23 Q When we talked with you before, you indicated 

24 that you had told Gen. Burbules something to the effect 

25 that "we're getting screwed," meaning that the Army was 



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ONiASSIFIED 



21 



1 going to hav* to go out and buy mlssilas that cost aora, 

2 and that thay would althar pay mora monay for tha saaa 

3 nxuttbar of nlssllas, or pay laas nonay — or pay tha saaa 

4 aaount of aonay for favar Blsallas. 

5 Oo you racall sonathlng to that affact? 

6 A Yaa. That's assantlally part of tha 

7 convarsatlon. 

8 Q And aftar Can. Burbulas talkad to Can. Russo, 

9 Is it fair to say that ha caaa back with tha word that 

10 for MICOM's purposas, you would not gat raplacamant 

11 costs, and tharafora coat froa that point on was no 

12 longar a factor? 

13 A That's assantlally corract, yas. 

14 Q wa now ]cnow that this transaction was ona that 

15 was conductad undar tha Econoay Act, aaaning that tha 

16 Dapartaant of tha Aray transfarrad tha aissilas to tha 

17 CIA, and tha Econoay Act govamad tha transfar. Whila 

18 you wouldn't nacassarily know this, tha raquiraaants that 

19 Sacratary Wainbargar iaposad wara that tha Aray ba paid 

20 in full and not loss aonay on tha daal, and that it ba an 

21 Sconoay Act transfar. 

22 Prior to thasa aattars bacoalng public, did 

23 you undarstand this to ba an Econoay Act transfar? 

24 A I navar haard of tha Econoay Act until this 

25 whola affair was publicixad. Z think virtually no ona at 



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uNwm 



22 



1 the Army Missile Command ever heard of the Economy Act. 

2 There had been virtually no transactions ever made, or if 

3 there ever were, nobody ever said this was done under the 

4 "Economy Act." And It was never stated to me by Ma j . 

5 Simpson or anyone else that this was going to be done 

6 under the so-called Economy Act. 

7 Q Did you have occasion frequently to use the 

8 AMDF? 

9 A Me personally, never. My office, to a very 

10 United extent because at all Amy Commodity Commands, at 

11 least, there are people called "Item Managers" and 

12 logistics people who deal In that on a dally basis. 

13 He deal with national stock numbers, KSNs, as 

14 opposed to such things as the AMDF price, and we would 

15 just call them up and refer to that type of thing — 

16 although we did have access to the Army Catalog on 

17 microfiche where we could loolc up line Items such as the 

18 TOW missile. 

19 Q Nov once the first shipment went forward In 

20 February, when was the next triggering event In terms of 

21 your involvement, or MZCOM's Involvement? 

22 A Several months went by where there was very 

23 little activity. In the late-April time frame, I believe 

24 It was, we were alerted to another mission and another 

25 shipment. 



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C^MSIFIB 



23 



1 Q Of TOWS? 

2 A Of TOWs. So we began the same type 

3 preparation. This time the number was $508. 

4 Q In other respects It was the same? You were 

5 to get the missiles from Annlston Army Depot, move them 

6 to Red Stone for further shipment? 

7 A Yes. And this time It was stated from the 

8 outset that It would all be by truck. It would move out 

9 of Annlston by truck. They would be brought up to Red 

10 Stone arid transloaded onto some other trucks for shipment 

11 out of there. 

12 Q These are commercial trucks? I believe 

13 Baggett Transportation was used. Is that correct? 

14 A I didn't know who it was. The trucks didn't 

15 have very much of a marking on them, but I found out 

16 later it was Baggett. 

17 Q And for the second shipment, I believe you 

18 told us in April that you were TDY. So Ma j . Simpson 

19 dealt with your then-deputy Mr. Williams. Is that 

20 correct? 

21 A That's correct. 

22 Q Is it safe to say that you had no involvement 

23 with or knowledge of that shipment until you got back 

24 from TDY? 

25 A That's correct. I was informed in very 



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24 



1 general terms through some careful words over the phone 

2 that we're doing another mission, and that was about all 

3 I needed to hear, because I relied on them to go ahead 

4 and take care of it. 

5 Q Now had you been paid for the first shipment 

6 yet by the time the second one rolled around? 

7 A He had submitted vouchers and so forth, but 

8 no, I don't believe we'd received any money yet, any of 

9 the reimbursement. 

10 Q And were there any transfer documents that 

11 were signed when these changed hands from you to Maj . 

12 Simpson? 

13 A Yes. There was a standard typed document that 

14 would be signed by the losing and the gaining individual 

15 for this type of equipment that was signed off between 

16 the Amy and the transportation people, the outside 

17 transportation people. 

18 Q Do you recall whether those documents had any 

19 prices on them? 

20 A I did not see the documonts. I saw them 

21 later, and although I can't remember what the prices were 

22 shown, I noticed — I recall that they did have some prices 

23 on thea. 

24 Q He'll come to that a little later. Let me 

25 move on in the chronology. 




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10 



Hi 






1 From the time that shipment went forward in 

2 May, vrtiat happened next? What was the next triggering 

3 event in terms of your involvement? 

4 A The first thing that happened was Ma j . Simpson 

5 departed, and Lt. Col. Annbright came on the scene and we 

6 started dealing with him. He was kind of building up 

7 some information about the missiles that were remaining 

8 that had been prepared, getting such things as lot 

9 numbers. And as we moved toward the third shipment, it 
turned out that he specifically requested log numbers, 

11 which we thought was rather unusual. 

12 Q This would have been when? Toward the end of 

13 October? 

14 A Yes. Sometime in the October time frame. He 

15 said, we're going to do another mission of 500 missiles, 

16 and here are the lot numbers that the customer wants. He 

17 very specifically asXed for the lot numbers, and they 

18 happened to be — 

19 Q Did he also specify the year of manufacture? 

20 A No. He did not. But he had in alnd newer 

21 missiles because, by specifying the lot numbers, he was 

22 really specifying newer missiles, and he )cnew that 

23 because he had gotten all the information previously. 

24 Naturally we were trying to get rid of the 

25 older missiles, if possible. 



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UNCUSSiFO 



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1 Q And did he specifically want converted ITOWs 

2 manufactured in 1979? 

3 A Those were—that's correct. The lot numbers 

4 that he specified were in that category. 

5 Q And were any MOICs required for that shipment? 

6 A No, they were not. 

7 Q And why was that? 

8 A Because the missiles were at least thought to 

9 be already in Condition Code A, so they did not need the 

10 safety device. 

11 Q Here they in Condition Code A? 

12 A As it turns out, they were not. There was 

13 some problem that occurred at the depot, or perhaps in 

14 the statement of the material release order which is sent 

15 out from MICOM about specific directions on which lots 

16 were to be converted back in the earlier months of the 

17 mission, and there vers two piles of ITONs there. 

18 . One pile was Condition Code A, and one was 

19 Code N, and somehow they picked the vronq stockpile and 

20 converted Code N missiles. In other words, removed and 

21 replaced the warheads. So we had what turned out to be 

22 Code N missiles that ve did not realize were Code N until 

23 after the second shipment. 

24 At the time it was discovered, I so informed 
29 Maj. Simpson that we have a problem. You insisted on 



UNCb!S3iFIED 



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^msim 



27 



1 Code N, or Code A missiles. We inadvertently converted 

2 these Code N missiles, and they're still Code N. 

3 KR. KREUZER: Was this at Anniston? 

4 THE WITNESS: Yes. Anniston does the 

5 conversion, or prepares the missiles for shipment. 

6 He said, well, okay, we'll have to face that 

7 problem when we get another shipment requirement. And in 

8 the meantime, he left. 

9 Col. Armbright came in. There was no 

10 restatement of the requirement for Code A. I suppose we 

11 could of or should have assumed that there was still a 

12 requirement for Code A, but in the rush of executing the 

13 mission and the passage of time between all this 

14 happening, we just went aihead. 

15 Furthermore, they specified the lot numbers. 

16 BY MR. SAXON: (Resuming) 

17 Q So if Z can understand what you're saying, 

18 they were provided with missiles in Condition Code N. Is 

19 that correct? 

20 K That's correct. 

21 Q And MOICs were not provided. 

22 A The MOICs were not installed. We shipped 

23 exactly what they specified, although we didn't clarify 

24 that those were Code N. 

25 Q And was the CIA charged for the MOIC on the 



mmmB 



300 



UNCUSSifiED 



28 



1 third shipment? 

2 A They were. 

3 Q And has any adjustment ever been made in that 

4 bill that went forward? 

5 A No. And in fact it could have been adjusted 

6 the other direction, because they were much newer 

7 manufacture, and you could make a case that this was yet 

8 a different catalog number, certainly with a lot higher 

9 price than the one we set originally. 

10 MR. KREUZER: But you haven't been paid for 

11 these missiles? 

12 THE WITNESS: We have now been paid for 

13 everything. The second or third major payment happened 

14 fairly recently. There was some administrative hangup, 

15 but as far as I*ve been informed— and I've checked this 

16 since I've changed jobs — I can't absolutely confirm it, 

17 but I've just been told telephonically that all payments 

18 have been sent and received by the Army Missile Command. 

19 MR. KREUZER: But was there in fact an 

20 occurrence at one time where you issued an authorization 

21 for funds which in fact was useless to your command? Do 

22 you recall anything like that? 

23 THE WITNESS: Let me see how I could say this. 

24 BY MR. SAXON: (Resuming) 

25 Q It can't be any less confusing than the rest 



mmim 



301 



fsiimsm 



29 



1 Of It, so just go ahead. 

2 A Th« r«imburs«m«nt, vh«n it cam* down through 

3 funding channels, dua to sons tschnlcalitlss In ths typ« 

4 of money it was and In which category, it turned out that 

5 it could not be applied directly to the TOW line, which 

6 would allow us to in effect pay ourselves back. And it 

7 ended up going into some general fund. 

8 So the taxpayers didn't lose, but the TOW 

9 project lost because of sobs technicality about the way 

10 the funds — and it involved Congressional language — the 

11 TON line in the Congressional language says. You are 

12 authorized to buy X nuober of Blssiles for this Buch 

13 Boney. 

14 So soBsone aade a case that this would be a 

15 delta, this would be an add-on to that, and therefore it 

16 was illegal. It turns out that later on whan they 

17 analyzed it, that really wasn't necessarily so; but 

18 nonetheless, the Boney for the Bissiles — now there was 

19 SOBS other Bonay there, too, such as the transportation 

20 costs, the conversion costs at Anniston— but the direct 

21 payaant for the Bissiles did not end up going back into 

22 our line, for which we all griped about severely but to 

23 no avail. 

24 MR. TSXazZR: Hell, whose responsibility was 

25 it to acquire the funds for — I presuBS the understanding 



^^'^SlflED 



302 




30 

1 was that the MICOM would get appropriate funds to 

2 replenish its supply of TOWs with improved TOHs. So was 

3 that the original understanding that MICOM would get 

4 the— 

5 THE WITNESS: Well, not necessarily, or not 

6 quite. We were simply under the understanding that we 

7 would be reimbursed for all our costs, one of which was 

8 having taken 1000 of these basic TOW missiles out of our 

9 inventory at a price of X; not necessarily that we would 

10 be able to buy back replacement items. 

11 We were just under the understanding that we 

12 would get a certain amount of money back, and presumably 

13 that could be used to buy replacement missiles. 

14 MR. KREUZER: And who arranged for you to 

15 receive the funds? Do you know? 

16 THE WITNESS: I do not know that. We simply 

17 sent in our vouchers in the normal system, and hoped that 

18 the system would work to get the money back to us. 

19 MR. KREUZER: Who was the source of the 

20 funding? How sent you the funds' cites that authorized 

21 you a certain amount of money for those missiles? Do you 

22 know? 

23 THE WITNESS: Well, ttoey came back through the 

24 normal channels through the Department of the Army and 

25 AMC. I'm not familiar with exactly what the fund cite 



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U^mSSIRED 



31 



1 was, but It^ was the so-called normal fund cites that 

2 could be used for this type of a transaction. 

3 MR. KREUZER: But would It have been an AMC 

4 action? Was AMC the body that authorized the funds? 

5 THE WITNESS: Not directly. It was Department 

6 of the Army, and AMC was merely an accounting pass- 

7 through point. They took no decision action or 

8 significant action on the money. 

9 MR. KREUZER: Just a processing point? 

10 THE WITNESS: A processing or accounting 

11 headquarters . 

12 MR. KREUZER: And you don't know who In the 

13 Department of the Army specified or authorized the funds? 

14 THE WITNESS: Not by name, but It originated 

15 In the DCSLOG office and probably was accounted through 

16 the Amy Comptroller's office. But specifically who 

17 there, I never knew that and don't know It now. 

18 There Is an Individual who has been deeply 

19 Involved in this type of question In the Army Materiel 

20 Command Headquarters that I've mentioned before, who has 

21 looked Into many of these questions. His name Is Mike 

22 Sandusky. He's a Senior Executive Service Individual who 

23 is — and this is his business, and he has done a lot of 

24 research on this, answering these types of questions on 

25 behalf of the former Commander General Thompson, and 



UNet^SIFIED 



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UNIMSSra 



32 



1 various Individuals at tha Dapartaant of tha Aray, also. 

2 BY MR. SAXON: (Rasumlng) 

3 Q And vhara Is ha? Rad Stona? 

4 A No. Ha Is at Amy Matarial Command 

5 Headquarters, In the same building I work in. 

6 Q I believe that you mentioned a moment ago that 

7 in addition to the costs for tha TOHs themselves there 

8 were some ancillary and transportation modification 

9 charges, et cetera. Did that figure come to about 

10 $350,000? 

11 A Approximately, yes. 

12 Q And did you have to take that out of your 

13 operating budget, your TOW Project operating budget until 

14 reimbursement? 

15 A Well, most of those costs were Anniston costs. 

16 So they simply charged their accounts and sent us the 

17 bill. So most of that didn't coma out of any MICOM or 

18 TOW fund. It simply was charged at Anniston and they 

19 sent tha bills to us, aQsuming they'd gat reimbursed, 

20 which they did. 

21 Q To go back to tha issue of tha Congressional 

22 language that had technical restrictions, if I understand 

23 that, it says that tha Amy can purchase a certain number 

24 of TOWs in a calendar year. Is that correct? 

25 A That's basically — each year that's what it 




IHJ 



305 



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33 



1 specifies. 

2 Q And so you were just bumping up against that 

3 ceiling on the number of TOWs that could be purchased in 

4 calendar year 1986 — 

5 A In a given fiscal year. 

6 Q —or fiscal 1986, or 1987? VThich 

7 A In a given fiscal year. Now that's what I was 

8 told the problem was with the funds. Not that that's 

9 necessarily the case, or that it would in fact restrict 

10 us, but' that's what I recall the reason we were given why 

11 we could not take this money and somebody, perhaps a 

12 somewhat low-level program analyst type — just took the 

13 money and said it can't go there, so they stuck it in 

14 another account. And it was lost, and in fact it was 

15 irretrievable. We tried to get it back. 

16 Q Did anyone within the Department of the Army 

17 or MICON know at the time you were meeting the 

18 requirements — that is, in February of '86 with the first 

19 shipment, and so forth — did you know that there was a 

20 ceiling imposed by the language of Congress as a line in 

21 the Appropriations bill that would prohibit you from 

22 replacing these once funds were immediately provided? 

23 A Yes. We were all familiar with that, but I 

24 guess we didn't think there would be any problem, or 

25 maybe that we might even want to buy the missile that was 



UNE!IS3inE0 



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UNObASSIREDi 



34 



1 shipped, or maybe an ITOW. So we weren't really thinking 

2 that there would be a problem, even though we were well 

3 aware that there is in fact a restriction based on the 

4 language. 

5 Q Well, you couldn't buy the missile that was 

6 shipped, because they were no longer in production. 

7 Right? 

8 A Well, essentially the production line is shut 

9 down for them, although probetbly 70 or 80 percent of the 

10 basic TOW missile is the same as the TOW-2 missile. 

11 There's just a few differences that are plugged in there 

12 by module, such as the flight motor is different, and the 

13 back end of the missile has a couple of differences. 

14 Q As far as you know, did anyone raise at levels 

15 above you — either you raise it for it to surface up the 

16 chain, or anyone above you raise the issue that you would 

17 bump up against that ceiling and not be able to 

18 immediately replace the TOHs? 

19 A Ko. No one ever raised that until such time 

20 as it was determined to be a problem. 

21 Q When did you actually get the money in the 

22 proper account for purposes of replacing TOW missiles for 

23 TOW missiles? 

24 AT can't recall. 

25 Q It would be sometime in the Spring of '87? 



(INemSSIFIED 



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ONCussra 



35 



1 A It would b« In that tlm* fran*. But va had 

2 soma of thasa administratlva issuas that hald on for 

3 awhila, avan aftar tha monay waa aant. I can't racall 

4 spaclflcally whan it waa brokan looaa. 

5 Q And do you ]cnow whathar any TOW nissllas have 

6 actually baan purchaaad yat? 

7 A No, thay hava not. 

8 Q How doaa that cycla work? la that auxprlalng 

9 in any way? Or doaa It juat taka tlaa for a particular 

10 procuramant cycla to cona around? 

11 A Wall, it doaan't aurpriaa aa in thia caaa, 

12 bacauaa wa'ra talking about a aaall nuabar that would be 

13 an add-on in a rathar unuaual way, and wa alao hava tha 

14 nomal laad timaa involvad. Tha atandard laad tiaa from 

15 tha data you notify tha contractor and tha othar 

16 individuala aa adain and procuraaant laad tiaa is 15 

17 Bontha or so. 

18 But to atart tha action to buy tha aiaailaa, I 

19 don't ballava that 'a avan happanad. 

20 Q Now to go to tha raadinaaa quaation that you 

21 aora or laaa anawarad aarliar, but it wasn't raally 

22 apacifically tha ona I aa kad at tha tiaa, if I understand 

23 it, w« hava approxiaataly^^^^BroWs in otir inventory. 

24 Is that about right? 

25 A There's been about 430,000 produced. About 



ypftftr* '^oiqrn 



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36 



ar« In th« atocKs of our Allies, or thos* 
that wa'va sold th«a to. So it would probably b« roughly 
that, parhaps a llttla aora than that, that ara in tha 
U.S. ateckpilaa. 

Nov if you include tha foreign stoc)qpilaa, 
it's considerably aora than that. 

Q And it take it that there would have been both 
at the tiae and now, you could look at the readiness 
question and see that there would have been no adverse 
iapaet ion readiness, providing either 2S0S TOWs or 4508 
TOWS to a custoaer? 

A A very ainor iapaet, even though they are not 
only basic TOW aissiles and a fairly saall nuaber. If 
you were in a war situation, they aight aake a 
difference, but it would be ainer. So X would say a very 
ainor iapaet, or virtually no iapaet. 

Q You said earlier that you didn't know where 
the aissiles were headed. Did you ever inquire, or aake 
L9 an effort to find out? 
to A Kot really. A few offhand, joking 

conversations pertiaps, with Naj. Siapson. We had fun 
guessing. But beyond that, no, X never really aade any 
serious inquiry. 

Q Did you have a guess, or did you speculate on 
any particular countries? 



DNDDSSIflEO 



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37 



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 




Th« top guess was^^^^^^^^^H After that, 
was^^^^^^^H There were a few things going on other 
there. Beyond that, we couldn't even guess. 

Q Was that In part because they both had TOW 
launchers? ^^^^^^^^^ . 

A Well,^|^^^|^^Vi8 a c[uestlon. We tried to 
kind of just thinJc kind of casually. The olssile does 
you no good unless you have a launcher. We couldn't 
really determine at the time if they l^ad^f^^^p 
SOBS TOW launchers. 

Q I believe you told us in April that there are 
;ountries that currently have TOW launchers. Is that 
correct? 

A ^^^^^^^^^Hcountries , and plus or 
or two, have had TOWs. Soae countries are what we call 
"inactive." 

Q And Iran would be one of those? 

A Iran would be in that category. 

Q I asked you in April a question or two about 
thi^^^^^^^^fsysten. Let ae ask again for the record, 
heve you ever heard, prior to my asking tha t questi on in 
April, had you ever head of the| 

A No, I have not. 

Q And you wouldn't have known, then, whether 
this transfer did or did not bypass the 



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38 



1 System. 

2 A That's correct. I would not have )cnown. 

3 Q You also told us, though, that you did have 

4 existing procedures, did you not, for authorizing, 

5 ordering, and releasing shipments starting with the 

6 Department of the Army, down to Anniston Army Depot, and 

7 then MICON would execute a material release order as 

8 authority to prepare and ship; and that each step there's 

9 a series of paperwork. Is that a fair assessment? 

10 A' That's correct. 

11 Q And were those procedures and steps and stages 

12 followed in these cases? 

13 A For the most part, no. But in fact there was 

14 a material release order that was accomplished out of 

15 MICOH and sent to Anniston. They insisted on it. So 

16 there was a portion of the proper paperwork that was 

17 done, although it was done in a highly unusual manner 

18 without all the noraal people interacting on the 

19 paperwork, and so forth. 

20 Q You told us In April that between the second 

21 and third shipments that MICOM had gotten complaints 

22 regarding the transfer of aaaunition items. If you 

23 would, tell us a little bit about that, if you recall 

24 what I'm referring to. 

25 A Come 




311 



10 




39 



1 Q There was a strong DA nsssag* to stop dealing 

2 with aniino items by telephone calls and other than the 

3 normal paperwork. I think you said that was unrelated to 

4 these matters, but tell us, if you would, what that was 

5 all about. 

6 A After the incident that happened down here 

7 involving an individual in a van in a gas station, and 

8 perhaps some other incidents where there was a perception 

9 that the Department of the Army ammunition type items had 
been obtained surreptitiously or illegally or without any 

11 paperwork, a message came out of Department of the Army 

12 stating that henceforth there will be no transactions 

13 involving any ammxinition items, explosives, or related 

14 items without the proper paperwork, and specifically with 

15 just phone calls. Phone call authorization was 

16 unacceptable. 

l'^ Since ve were beginning to look like we were 

18 proceeding to another shipment — 

19 Q That would be the third shipment? 

20 A --the third shipment, I went to my boss. Gen. 

21 Burbules, showed him this message, and said, Z don't 

22 think v« should execute any more of these until we square 

23 it with this message. 

24 He agreed. He apparently made some phone 

25 calls, or took some jictioi^ <in^w&.|ctually got a hard 



calls, or took some action, jini 




312 



UraSSIRED 



40 



1 copy message saying that we could in effect disregard 

2 that message for the Snowball exercise. 

3 Q Now let's talk about price, and MOICs, and 

4 changing the National Stock Numbers, and those issues. 

5 You have testified that the basic TOW which 

6 was provided for $3169, and the MOIC you estimated was 

7 $300. I think the 0AI6 ultimately determined it to be 

8 $352, but that's close enough; so let's just assume that 

9 that's correct, giving us $3469. 

10 And, that that was what everybody agreed was 

11 the appropriate price. 

12 We know now that there came a time when Hughes 

13 attempted to remedy the problem of the flyback with the 

14 TOW that had taken place that necessitated the MOIC by 

15 building the MOIC into the missile. Is that correct? 

16 A Well, Hughes was not involved as far as 

17 designing or installing the MOIC. It was all done by the 

18 Government. We realized we had a so-called "flyback** 

19 problem that involved the late ignition of the flight 

20 motor, and that we needed some kind of safety device to 

21 cut off the igniting of the flight motor if the missile 

22 did not go through the proper timing sequence. 

2 3 So in about the 1982 time freune, the Army, not 

24 Hughes, came up with this MOIC and, after appropriate 

25 tests, we started installation of the MOIC. And during 



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41 

br 

1 that period, there was a suspension of firings for 

2 certain types of missiles until the safety device was 

3 validated. 

4 Then we started Installing it in missiles. At 

5 that time, the firing restriction in training was 

6 eliminated by missiles that had this MOZC installed. So 

7 it was done essentially by the Government at Anniston. 

8 Q You're talking about the assembly line process 

9 of taking the completed MOIC and putting— I'm sorry, the 

10 completed TOW and putting the MOIC on it — 

11 A Right. 

12 Q — on an assembly line in Anniston. 

13 A Right. 

14 Q What I'm saying is, contemporaneous with that, 

15 Hughes concluded that it could build a MOIC into the TOW 

16 missile. Did that not take place? 

17 A Mot that I'm aware of. Perhaps there was some 

18 proposal by Hughes at the time that they could correct 

19 the situation by changing some internal electrical 

20 circuitry, or something on the flight motor, but that 

21 never can* up that I ever heard. 

22 I don't know that that was ever proposed 

23 seriously, that I heard about. 

24 Q Tell me then what explains the AMDF price that 

25 shows a basic TOW missile with MOIC of $8435? 



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T||\V!L3L!f 42 

1 A Okay, it essentially relates to the year of 

2 manufacture. The way the AMDF rules work, you look at 

3 the latest manufacturing cost, however old it is, and if 

4 it is very current then you take the actual manufacturing 

5 cost with some other possible add-ons — in this case the 

6 government-furnished equipment such as the warhead. 

7 The reason for the major difference in the 

8 prices was caused by the fact that at the time the MOIC 

9 became another version of TOW, they looked at the current 

10 manufacturing cost of the basic missile at that time. 

11 So now we have jumped from 1974 to 1983-84. 

12 Ten years have gone by with a very high inflation and 

13 other changes that occurred at the time during the number 

14 of years there, and the manufacturing costs made that 

15 rather dramatic increase. 

16 So taking what was almost the seuse missile, 

17 although some manufacturing stuff had been improved and 

18 added — there had been some minor changes to the missile — 

19 it had gon« from a 3000 meter missile to a 3750 meter 

20 Biasile, which was simply winding another 750 meters of 

21 wire on two spools on the back, so that wasn't a dramatic 

22 part of the Increase, but it was a small part. So the 

23 real part of the Increase came from the fact that we are 

24 10 years later in time with the increased manufacturing 

25 costs. 



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1 And the way the AMDF price rules work, they 

2 simply looked at those costs at the time, plugged that 

3 into the Army Catalog, and said that's the price of this 

4 version of the TOW missile, which happened to be a basic 

5 missile with a MOIC on it. 

6 Q And they also gave it a new National Stock 

7 Number, didn't they? 

8 A That's right. 

9 MR. KREUZER: Can I? 

10 MR. SAXON: Sure. 

11 EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 

12 BY MR. KREUZER: 

13 Q In other words, the first missiles we were 

14 talking about, which were the basic TOWs, they didn't 

15 have the extra 700 yards of wire — 

16 A 750 meters of wire. 

17 Q 750 meters of wire. 

18 A Right. 

19 Q But they were built In — 

20 A In the early 19708. 

21 Q Maybe they were built like with 1972 or 1973 

22 dollars, huh? 

23 A That's right. 

24 Q And then In this later lot number we were 

25 looking at, 79, J^MJajiUt- with 1979 dollars. 



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1 A In fact, into th« 'SOs. 

2 Q So la thla what drov* th« ANDF? In othar 

3 words, it 'a whatavar dollara par flacal yaar built that 

4 waapon, thoaa ara tha dollara that you charga? Is that 

5 what drova It? 

6 A That 'a aaaantlally corract. So It would 

7 Includa tha inflation and othar Incraaaaa, but it also 

8 Includaa aoma aaount of Incraaaad nanufacturlng coats, 

9 which it'a difficult to piaca that out of thara. But it 

10 doaa includa aoma of that. 

11 Q Now is that— but that is tha basis upon which 

12 pricas ara aatabliahad for TOHs? 

13 A And all itams in tha Aray Maatar Data Fila. 

14 Q So in othar worda, that $8435 for a latar 

15 modal of tha TOW miaaila was in fact a corract prica? 

16 A It was a corract prica for that National Stock 

17 Nuabar aissila. 

18 Q And is that Bathod of pricing aatabliahad, 

19 accaptad, and varifiad by tha Aray today? 

20 A Yaa. Excapt that bacauaa of this incidant, 

21 tha Dapartaant of tha Any aaid that aayba wa'ra going ta 

22 taka a look at tha way AMDF pricaa ara datarminad, or 

23 this particular rula that says you go back to tha last 

24 tins you procurad it or bought it, howavar long ago that 

25 was, and that is tha prica that 'a in tha catalog. Thara 



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1 is no change for inflation, or any other factor. 

2 Q What is in place now as far as rules go about 

3 determination of price? 

4 A As far as I know, nothing has changed yet. A 

5 lot of these are under review, though, by the Department 

6 of the Army. 

7 Q So the price for the later version of this TOW 

8 missile that was stated as 8435 is still officially 

9 $84 3 5, as far as the rules and regulations of the Army go 

10 right now today. 

11 A Not right now, today. Because of the intense 

12 scrutiny on these particular lines in the AMDF, there 

13 have been some changes. In fact, they can change every 

14 month, or every time some part of the pricing formula 

15 changes. So I can't state. But I know in fact that this 

16 $8435 number which was valid at the time of all of the 

17 inquiries on this back in the spring, and in fact in the 

18 January-February-March time freune, those numbers have now 

19 been updated to more correct, current prices. 

20 Q And how did they — Who arrived at more correct, 

21 current prices? And what do those constitute? Do you 

22 know? 

23 A It's a somewhat complicated procedure where 

24 you have a long sheet that has different lines on it that 

25 starts out with the contract manufacturing cost. Then 



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1 there are numerous add-ons to that. Then there's a 

2 bottom number. And that number we would pass to the 

3 individual called the "item manager" in the Logistics 

4 Center who may or may not make some change to it. 

5 Then he sends it to the catalog facility and 

6 it's physically entered into the catalog. 

7 Q And how long has this policy been in effect? 

8 A Many, many years. It goes back to the 1970s 

9 when the prices froze. I think the AMDF came into being 

10 In the ekrly 1970s. 

11 Q Well, what pricing procedure and philosophy 

12 has changed as a result of this business with Project 

13 Snowball? And where did that philosophy change? 

14 A The best individual to answer that, once 

15 again, is this Mr. Mike Sandusky. There was 

16 correspondence and inquiry sent to all Army Commodity 

17 Commands as a result of this AMOF problem or issue, and 

18 suggestions were made about changing the way things were 

19 priced. 

20 But I cannot confirm what changes were made, 

21 but there were some made, and some are still under review 

22 as far as I know to change the pricing. 

23 Q Has there a suggestion— was one of the 

24 suggestions that the costs of the particular fiscal year 

25 would no longer be considered as a basis for calculating 



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1 the price of a TOW missile? 

2 A Well, if you're referring to going back to 

3 then-year dollars without any account for inflation, as 

4 far as I know they have not considered that. They simply 

5 look at the manufacturing cost of whenever the last time 

6 it was manufactured, without regard to what are the then- 

7 year dollars, or what are the current-year dollars that 

8 we pay for that now. 

9 That was a controversial point. Why don't we 

10 update this catalog with current-year dollars? But the 

11 policy that is stated in the Aray regulation on this says 

12 that, no, you don't do that. 

13 When this was reviewed by the senior people in 

14 the Department of the Any, they said, we're going to 

15 take a look at that. That was many months ago, and I'm 

16 not sure what they've done about the policies that are in 

17 the Aray regulations. 

18 FUK T Hm BXAKDIATIOM ON BEHAIf OF THE SENATE SELECT 

19 BY MR. SAXON: (Resualng) 

20 Q Nhen did you first learn that if you put a 

21 MOZC on a basic TOW missile, it changes the National 

22 Stock NxiBber, and therefore the price? 

23 A Not until the incident became public in 

24 November. 

25 Q And is it safe to say that that was the same 



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48 

1 time you first learned that there was a price out there 

2 in the universe of $84 3 5 which could be called the right 

3 price for a basic TOW with MOIC? 

4 A I never heard the number $8435 until after 

5 some of the inquiry started. Perhaps even the December- 

6 January time frame. 

7 Q Are you aware that all of the shipping 

8 documents that came from Anniston Army Depot on the TOW 

9 missiles to Red Stone which had prices on them — some of 

10 them didn't — but that all of the documents that had 

11 prices had $8435 in it? 

12 A I found that out, once again, later. Z did 

13 not see any of those documents during the mission 

14 execution, but I saw them and took note of that later. 

15 Q Who did see the docviments during the execution 

16 phase? 

17 [Pause.] 

18 A I believe it would have been my Deputy at the 

19 time, George Williams, and my head Logistician at the 

20 time, Mr. Chris Leachman, who is now the Deputy. Those 

21 two Individuals, and perhaps one other In the Logistics 

22 Office that was involved with the Anniston operation. 

23 But I can't confirm that any of them actually 

24 saw the documents. I did not, and there wasn't the 

25 exchange of documents, as I mentioned. I believe that 



321 




1 one or more of them saw the documents. 

2 Q You didn't sign any of the transfer documents 

3 yourself? 

4 A No, I did not. 

5 Q Tell me about the computer system that MICOM 

6 has and operates for purposes of giving you data and 

7 stock numbers. If you were back in your office at Red 

8 Stone, or wherever the computer was, or the data base, 

9 whatever you had at your disposal, and you went to punch 

10 in a particular stock nuiabcr for a basic TOW missile, 

11 with or without MOIC, however you would do it, what steps 

12 would you go through, and what would it spit out to you? 

13 A Hell, I didn't have any such system with that 

14 kind of data directly in ay office. Now the Logistics 

15 Office had certainly a microfiche reader where they 

16 could-- the Amy Catalog was on microfiche, and they could 

17 pull up a card and stick it in this reader, and read the 

18 line numbers for any type of TOW missile that they 

19 wanted. 

20 Q That would be Mr. Leachman's office? 

21 A Right. His old office. 

22 Q There was no computer connecting the Anniston 

23 Army Depot and Red Stone? 

24 A With the Missile Logistics Center, but not the 

25 Tow Project. They had a direct connection, some kind of 



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1 transceiver where they could transceive the materiel 

2 release orders on-line between Annlston and the Missile 

3 Logistics Center Office, the Item Manager's office. 

4 Q And would they have shared the same data base? 

5 A To some extent. I don't know whether it would 

6 be fully, but they have access to certain parts of it. 

7 Certainly the catalog information. 

8 Q Let me tell you why I'm asking you. We are 

9 not attempting to point the finger at anybody or making 

10 any accusations. We are simply trying to understand what 

11 happened. 

12 Our understanding is that the people at 

13 Annlston Army Depot from the early stages when they were 

14 required to come up with the price for a basic TOW with 

15 MOIC consistently came up with $8435, and no one at Red 

16 Stone came up with that price. 

17 We are trying to figure out why, or how. Do 

18 « you have any hypothesis, or any explanation for that one? 

19 A I can speculate. There may have been an 

20 inquiry by someone at Annlston saying, how in the world 

21 did you guys come up with this other price, to somebody. 

22 I never heard that such a thing happened. 

23 Q The "other price" being the $3169? 

24 A Right. If they would have — if somebody would 

25 have called me, I would have said the price was 






I 

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1 detemlnsd under very special condition*. You can put 

2 anything you want to on the paperwork. I would have been 

3 not really surprised if they had said, there's going to 

4 be no paperwork. Just go get the missiles and ship then. 

5 So the paperwork was rather inconsequential . 

6 Now Anniston, being good troopers following good 

7 procedures, somewhere along the line looked up the very 

8 specific missile that we ended up shipping in the AMOF 

9 and said, oh, here's the price, so that's what goes on 

10 the paperwork, and got it that way. 

11 We, not being in that business of entering 

12 such things on the specific documents, didn't take that 

13 step. Perhaps If we would have, we might have questioned 

14 the price, because, oh, here's a different AMDF price. 

15 But we never took that apparently crucial step. 

16 Anybody in my office that I know of, or of 

17 raising the issue, that there Is a different AMDF price. 

18 Maybe somebody called and made a comment about what we're 

19 going to have to put on this paperwork. I never heard of 

20 any such call. But I think they just simply looked up 

21 the actual missile and said, well, that's what we're 

22 putting on the paperwork, and they may not have even 

23 thought anything of it. 

24 Q When we met with you in April, you told us 

25 that Mr. Leachman subsequently discovered in his notes a 



MTrnm 



324 




52 

1 piece of paper apparently In his handwriting with the 

2 number $8435 on It. Is that correct? 

3 A That's correct. 

4 Q What do you )cnow about that piece of paper? 

5 Or what did you and he conclude that It was with 

6 reference to? 

7 A He really couldn't recall why and under what 

8 conditions he wrote that down, but he definitely said It 

9 was his handwriting and he could surmise that someone had 

10 obviously looked In the AMDF and found this price, and in 

11 some way communicated it to him, and he wrote it on this 

12 piece of paper. What the circumstances were, he really 

13 didn't recall except that it was obviously this other 

14 AMDF price that had a direct relationship to the type of 

15 missiles that we ended up with. 

16 But beyond that, he couldn't recall. And 

17 that's just about what he told me when we were talking 

18 about this. 

19 Q If he did get that price contemporaneous with 

20 the pricing and the shipping that took place on these 

21 missiles, is it safe to say he never communicated it to 

22 you? Is that correct? 

23 A He may have — in fact, he did communicate 

24 probably with George Williams about the general fact that 

25 the price was too low. That was part of the whole effort 



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1 to get the price raised. So it was combined together 

2 with convincing me to finally go see the General about 

3 the price. So he did in fact complain about the price, 

4 and it could have started with that $8435. 

5 But he doesn't ever remember that somebody 

6 said, this is the correct AMDF price. Go tell Col. 

7 Lincoln to go bitch about this price, or something like 

8 that. But it was part of a kind of a total effort by 

9 several people to make sure that I knew that the price 

10 wasn't right, that it was too low, and that we needed to 

11 do something about it. 

12 But no one ever went to the magic comment 

13 about the AMDF price, apparently. 

14 Q Let me ask you for the record, I believe I 

15 know your answer, but is it safe to say that no one above 

16 you in the Army chain of command or elsewhere ever put 

17 any pressure on you to intentionally come up with a low 

18 price? Is that correct? 

19 A That's correct. Ko pressure at all. 

2 Q Here you ever told that the customer— you said 

21 you didn't know who that was, the ultimate customer, or 

22 even the intermediate customer — were you ever told that 

23 the customer had a set ceiling, or a set amount of money 

24 that they were working with? 

25 A No, but I got a mild impression from Ma j . 



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1 Simpson that perhaps from the point of view of getting 

2 the items as cheap as possible, that after we went 

3 through the MOIC exercise and he agreed and he came back 

4 and said the customer did agree to a $300 add-on, that 

5 "don't give me any more increases in the price," because 

6 the customer isn't going to like it, or some impression 

7 along that general line. 

8 Q You clearly understood you weren't dealing 

9 with big spenders? 

10 A That's the impression I got; right. 

11 Q Did Maj . Simpson or anyone else ever tell you 

12 that the customer had to go back to a source of funds and 

13 present each increase, and justify it, and get additional 

14 money? 

15 A There was one occasion when Maj . Simpson 

16 alluded to the fact that his customer was having to go 

17 somewhere, or to do some justification step concerning 

18 the money, and that made it more complicated, and 

19 therefore don't keep coming back with these price 

20 increases. There was an alluding to that, as I recall. 

21 Q Did he ever tell you that the ''somewhere else" 

22 they were having to go to was the white House? 

23 A No. 

24 Q Did you ever discern from anybody that the CIA 

25 was involved in-tMf^" *"y w* v. «• » " intermediary, as a 



•W-#^^n any wa y, as a n : 



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1 brokar, a transferring agent, a consumer? 

2 A In no way. And I never even suspected It. 

3 Q Did you know where the missiles were going 

4 once they left Red Stone? 

5 A No, I did not. 

6 MR. SAXON: I think that is all I've got. Let 

7 me see what my colleagues have here. 

8 MR. GENZMAN: I have nothing. Thank you, sir. 

9 yURTHEK EXAMINATION ON BEHALF OF THE 

10 HOUSE SELECT COMMITTEE 

11 BY MR. KREUZER: 

12 Q Col. Lincoln, earlier you mentioned that the 

13 Army requested certain TOHs the second time around by 

14 specific lot number. Col. Armbright, I guess, gave you 

15 that information. 

16 And that lot number was a TOW that was built 

17 in 1979. Did I understand you to say that that was an 

18 improved motor, a newer motor and a longer, 750 meter 

19 wire on that? In other words, instead of being 3000 

20 maters, it was 3750? So it was a different item. 

21 Armbright didn't specify why he wanted it, 

22 other than ha just wanted that particular lot number? 

23 A Ha knew that the lot numbers that ha was 

24 specifying were not only the never missiles, they were 
2 5 the converted ITOWs, and there was no other major 



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1 difference In the missile except the warhead, and the 

2 fact that they had this 750 meters of additional wire, 

3 which made them have that additional range. But the key 

4 thing was that they were of much newer manufacture than 

5 the previous ones we were dealing with. 

6 It was not a single lot number that he 

7 specified. In other to come up with the total of 500 

8 missiles, he picked out, as I recall, three lot numbers 

9 that added up to 500. 

10 Q ' And they all just happened to be these 

11 improved TOWs. 

12 A Yes. 

13 Q But those improved TOWs were ones that you had 

14 to convert and go back to the basic heat warhead in order 

15 to come up with the basic TOW? 

16 A That's correct. 

17 Q And that particular — those particular lot 

18 numbers Included Code Ns, unbeknownst to Anniston? Those 

19 were Code N TOWs? 

20 A Hell, Anniston claims that they — well, at this 

21 time we knew they were Code Ns, and we had so informed 

22 Maj. Simpson back earlier before the third shipment. But 

23 in the passage of time, it had been overlooked that these 

24 missiles that were specified by lot number were in fact 

25 Code Ns, but that wae what was ■Jgftcified, so those were 




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1 what w«r« prepared and eventually shipped. 

2 Q Now did Anniston come back and bring it to 

3 your attention that, hey, these things that were 

4 specified by you folks are Code Ns, and you requested 

5 Code A? 

6 A No, they did not. 

7 Q They did not. 

8 A But I would presuae that it is nonetheless 

9 reflected on their paperwork. I didn't see the paperwork 

10 for that third transaction. 

11 Q So what they did was respond to the latest 

12 order— this is what we want—and presuaably, whether they 

13 knew it was Code N or Code A, they went by the latest 

14 order which superceded in their minds the requirement for 

15 a Code A missile? 

16 A Hell, they didn't have any — they responded on 

17 a shipBent -by-shipment, or individual basis, and this was 

18 the third shipment. So we started with, in effect, a 

19 clean piece of paper. 

20 Okay, what do you want? And we said, we want 

21 these lot numbers. And they said, oh, okay, we have 

22 those precise missiles, and we will ship those. And so 

23 they filled out the paperwork that corresponded to those 

24 lot numbers, whatever type they were, and those were what 

25 were shipped. 



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1 Q Now were all of those Code N? 

2 A Yes. 

3 Q Would Annlston have known that this was part 

4 of Project Snowball? 

5 A Yes. 

. 6 Q Then would It be unusual, Icnowing that, that 

7 somebody at Annlston didn't say, wait a minute, this is 

8 part of the previous project, you asked for Code A 

9 missiles, you should know these are Code N missiles? 

10 A Perhaps that might have gone through 

11 somebody's mind — not that I know of— but when we were 

12 very precise and said, we want these lot numbers, 

13 probably the thought process that they went through was, 

14 oh, okay, they know all about these lot numbers, because 

15 they had previously provided all the details of the lots 

16 on the converted missiles, the ones that we took the ITOW 

17 warheads off. 

18 And so they said, I guess they know what 

19 they're getting, is what they were thinking, and there 

20 was no reiteration of this Code A/ Code N thing. 

21 MR. KREUZER: Okay. 

22 MR. SAXON: I've got a couple more quick 

23 questions. 

24 niRTHKH EXAMINATION ON BEHALF OP THE 

25 SENATE SELECT OMMITTEE 



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59 



1 BY MK. SAXON: (Resuming) 

2 Q Am I correct that you have never had occasion 

3 in the past to put a MOIC on a TOW missile? 

4 A Before? 

5 Q Before Snowball. 

6 A 1981 or '82? Oh, no. We had started 

7 installing HOICs in 1983, I believe. 

8 Q But I mean you personally had had no 

9 involvement with, if I understood you in April, with 

10 putting MOICs on the TOWs. Is that Incorrect? 

11 A Oh, you mean for this, to support this 

12 mission? 

13 Q No. 

14 A Any one of the three shipments? 

15 Q Prior to Snowball, had you personally been 

16 involved in any project or tasking requirement that 

17 required you to get involved in the safety modification 

18 of the basic TOWs by putting MOICs on them? 

19 A Mot other than the fact that we always — almost 

20 always have a MOIC assembly line going at Anniston just 

21 for our own training purposes. In other words, the 

22 routine conversion that's always going on. Other than 

23 that, no, I had no other either personal or orders that 

24 had gone out on that. 

25 Q When you've been involved in the previous 



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1 instances where you take TOW missiles from Anniston to 

2 transfer somewhere, would it have been normal for you to 

3 look at the paperwork that caune from Anniston Army Depot? 

4 A No. It would be very unusual. 

5 Q Someone at a lower level would have done that? 

6 A That's right. And perhaps not even anybody in 

7 my office. He would merely send a piece of paper over to 

8 the Logistics Center, the Item Manager, who would then 

9 crank out the appropriate paperwork based on perhaps a 

10 DF, or ijust a piece of plain paper that we send over 

11 there and we say, here are the requirements, do these. 

12 And then they transfer it to the appropriate 

13 materiel lease-order paperwork. 

14 Q Did you ever recoi&mend to Maj . Simpson that 

15 the basic TOW be upgraded and that the customer be 

16 provided either with ITOW or TOW-2? 

17 A As I previously stated, at the time we 

18 discovered that we did not have enough stockpiled basic 

19 TOHs to meet the requirement, I suggested to hia that we 

20 have these ITOWs, why don't you take them instead of some 

21 other alternative. We'll just simply change the mission 

22 to these ITOWs. 

23 And he came back in a few hours, or a day or 

24 so, and said, no, the customer does not accept those, or 

25 doesn't want those. In fact, we even made — maybe I even 



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1 made soma comment about the price, where they could get 

2 some kind of a good deal on them or something, but that 

3 may have been just an idle comment. 

4 Q Did you couch that to Maj . Simpson in the 

5 context, though, of solely we don't have enough basic 

6 TOWs in Condition Code A; we're going to have to do 

7 something different? Or was it a different level of 

8 conversation where you said, you know, if we really want 

9 to provide a good missile to our customer, we should give 

10 them a better missile, and that's ZTOW? 

11 A Well, probably in the course of several 

12 conversations, I said both. Not only do we not have 

13 enough Code A basics, but we have this better missile 

14 that if you could get the requirement changed, we can 

15 give you them. So probably I said both. 

16 Q And did you at any point say that the ITOW 

17 would cost more? 

18 A Maybe not directly, but Z think we would both 

19 presume, both me and Maj. Simpson would presume that it 

20 would obviously cost nor*. 

21 Q And I know you weren't there when he had 

22 whatever conversation he had with the customer, which we 

23 now know to be the CIA. But is it your understanding 

24 that he took to the customer the proposal that the basic 

25 TOW be upgraded, that they buy ITOW instead, and that the 






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1 customer didn't want to, and the reason had anything to 

2 do with the higher price? 

3 A I don't know what he did; but I would presume, 

4 since he took a matter of a half a day, or a day or so to 

5 get back with me after I suggested the ITOWs, to take the 

6 ITOWs as is, that he went to somebody, and he came back 

7 and said, no, the customer insists on basic TOW missiles. 

8 Q Who did you deal with at Anniston Army Depot? 

9 A I didn't deal with anybody directly, and I 

10 don't recall the names of the people there. 

11 Q Who would have? Mr. Williams, first, and then 

12 Mr . Leachman? 

13 A Mr. Williams, Mr. Leachman, and the Items 

14 Managers at the Logistics Center all dealt with the 

15 individuals at Anniston. 

16 Q In terms of selling old basic TOWs out of our 

17 stocks, there are at least two ways you can look at that 

18 in terms of whether the Army wins or loses, or whether 

19 it's a draw, or a rain delay, or whatever. One is we're 

20 ■•lling old TOWs at a cheap price, but we're going to 

21 have to go and replace thea with admittedly a better TOW, 

22 but it's going to cost more, and we'll either wind up 

23 paying more, or getting fewer missiles. 

24 By that means of logic, the Army loses. 

25 The other way to look at it is that the Army 




mi 



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UNGLASSIFIED 



63 



1 has these old TOWs, they are not in Condition Code A. We 

2 can get rid of them. We can get them out of the 

3 inventory. And, while we won't get as many, we will get 

4 a heck of a lot better missile, so we come out better. 

5 ' As the person who was the TOW Project Manager, 

6 how did you view this transaction in terms of whether the 

7 Army won or lost, separate and apart from whether you got 

8 paid what you were supposed to be paid? 

9 A Hell, the basics, whether they are Code A or 

10 Code N, thinking about them as a part of our war reserve 

11 or our stockpile, are very close to being ineffective 

12 against any of the current threat tanks. So I would have 

13 been pleased to get rid of them under any conditions, 

14 even if we get this low or partial reimbursement, to 

15 allow us to buy even a much lesser number of the T0W-2s, 

16 any way we could get rid of them. 

17 That is why v« kind of pressed when they said, 

18 we want these newer ones with these individual lot 

19 nuBbers. We all kind of pressed to say, are you sure you 

20 don't want those old basics that we've been kind of 

21 setting aside there? 

22 And Col. Armbright said no, the customer very 

23 specifically wants these lot number missiles. So we 

24 said, okay. 

25 Q For the record, you had no involvement with 




LH 



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|lhi|Cf£ll\\IM|-|| 64 

1 the HAWK repair parts' Project Focus? 

2 A No, I did not. I knew nothing about it. 

3 MR. SAXON: I think that's all I've got. 

4 Gentlemen, do you have anything else? 

5 MR. GENZMAN: Thank you, again. 

6 MR. KRZUZER: Thank you. 

7 MR. SAXON: Colonel, on behalf of the Senate 

8 Committee, and I guess I can say this for the House 

9 Committee, we thank you for your time. You have spent a 

10 lot of iime with us on two occasions. You have 

11 voluntarily come forward, and you have been very helpful. 

12 THE WITNESS: Glad to do it. Glad to help. I 

13 would like to review and sign my deposition. 



15 SIGNATURE OF THE WITNESS 

16 SUBSCRIBED AND SWORN to before me this day 

17 of , 1987. 

18 



19 NOTARY PUBLIC 

20 My Cooaission Expires: 

21 



o^&nssim 



337 



NAME: HIR251020 



L 



fed W aM^I »f)^ 



RPTS CANTCR 
DCHN GLASSHAP 

DEPOSITIOH or KRISHNA STEPHAN LITTLEDALE 

Tuesday, September 8/ 1987 

House of Representatives, 
Select Committee to Investigata 
Covert Arms Transactions with 
Iran. 
Washington, D.C. 

The select committee met, pursuant to call, at 2:30 p.m. 
in B-3S2, Rayburn House Office Building, Tom Fryman (Staff 
Counsel) presiding. 

Present: Tom Fryman, Staff Counsel; Ken Buck, Assistant 
Minority Counsel; W. Thomas HcGough, Jr., Associ».te Counsel. 
Senate Committee. 



L 



Partially Dedassified/Peleased on ,/-<g- ^f 
under provisions of E.O. 12356 
by N. Menan, National Security CouncH 



mUiSSKB 



//fir 



:?<^ 4d- 




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HZR251020 IIIVIll M.1.1S9 B3 SB PAGE 2 

nit. FRYnAN- On the rscotd. 

Tha leporter has inioimad counsal that ha is a 
notary public in the Stata of Hazyland and not a notary 
public in the District of Colunbia. Counsel have stipulated 
that It IS acceptable to have the witness sworn by the 
reporter today in the capacity that he has disclosed to 
counsel . 

MR. TOURISM: That is correct. 

HR. FRYMAN: if the reporter would now swear the 
witness . 

Whereupon, 

KRISHNA STEPHAN LITTLEDALE 
was called ior as a witness and, having bean duly sworn, was 
examined and testified as follows' 

EXAMINATION BY COUNSEL FOR THE SELECT COHnZTTEE 

BY MR. FRYMANi 
2 On the record. Would you stata your full nana for 
the record please. 

A Krishna Stephan Llttladala. I •■ going to trust 
that the fact that the House has alsspallad ny nana and that 
the Senate has abbreviated iiy nana doesn't aaKa any 
drfference regarding my immunity order. 
J e In what city do you reside, Mr. Littladala? 
A ^^^^^^^^^^^B which a subdivision 
Frederick, Maryland. 







QXf'^* " 



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<48 

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HIR251020 



llNCUSSIFi[9 




fi By whom ar* you aaployad? 

A HysAli. 

fl What do you do? 

A I am a iund-zalsar . 

Q Hhat do you ralsa funds iot? 

A To support Boz* aid for tha fraadoa /ightars in 
Nicaragua. 

fi Hhara vara you born? 

A Harwich Port. Hassachusatts . 

fi What was your data oi birth? 

A July 2, 1957. 

fi Hhara did you attand collaga? 

A I attandad collaga at Buoknall Univarsity in 
Lawisburg. Pannsylvania. and Gaorga Hashlngton Univarsity in 
Washington. D.C. 

9 Did you obtain a dagraa? 

A No. 

fi Hhat yaaz did you attand Buoknall and Gaorga 
HCahlngton? 
J, k Saptaabar. 197S to Z guass althaz Hay or Juna of 
1986 at Buoknall Univarsity. 

fi 1975 to 19867 



M\^^»S 



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Hint: HIR2S1020 yj)|(jL/\j5lHLy "" ' 

70 Xm O^e^^y^ '75 to '76. That would b« • long ti»«, 

71 wouldn't it? And Georga Washington was fxoa January oi 1977 

72 to. I think. Hay or Juna of 1979, I think. 

73 fi And Z taka it you hav« not attandad any graduata 
714 school, is that corract? 

7 5 A Ho. 

76 2 Have you servad in tha military? 

77 . A In tha Unitad Statas Aray Kational Guard, and also 

78 during basic and advancad training in tha Ragular Army at 

79 Fort Banning, Gaorgia. 

80 2 Ara you now a mambar of tha National Guard? 

81 A I am. 

82 2 What is your rank? 

83 A Corporal. 

8<4 2 What is your social sacurity nuabar? 

85 A 

86 2 Am I corract in understanding from your answer that 

87 the last time you ware enrolled in any educational 

88 institution was in or around June of 1979? 

89 . A I wouldn't really say that. Z attended the Army 

90 Chemical Uatfare School. 

91 .~ fi Apart from military training. 

92 ^ A Yes. apart from military training, that is correct. 

93 fl Did there come a time whan you were employed by an 
9>4 individual named Carl Channell ox an organization with which 



^Lriv*v-'-.^ 



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NAME 

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HIR2S 1020 



UNCUSSIFIED 



he was associated? 

A Yes, there did. 

e Uhen were you first employed by Hr . Channell or one 
of his organizations? 

A On or about August 19 of 1985. 

Q Between June of 1979, when you ended your studies 
at George Washington, and August of 1985, when you became 
employed by Hr . Channell, would you briefly describe the 
jobs that you held in that period. 

A Until approximately December. 1979, computer 
operator, Connaught Corporation, U200 Hlsconsin Avenue, 
Northwest, Washington, D.C.; December, 1979 until early — wait 
a minute, now X am getting confused. Haybe I made a mistake 
here. Excuse me, I made a mistake there. I got out of GW 
in May or June of '78. not '79, and Connaught Corporation 
was nay or June of '78 until December of '78, and then I was 
employed--this is going to be tricky figuring it all out. I 
was unemployed for a period of about a month. In early 
'79--I am going to get it right here — I worked for about a 
month at the Herman's Sporting Goods down here, lower 
Northwest Hashington. Then after that fox about — oh. yes, 
tlTen for about two months in the spring of '79 X worked as a 
tflephone salesman up here in Bethesda, and then the summer 
of 1979 I worked as a legal clerk at Shannon and Horley, 
which is over here at the corner of 17th and K, which is now 



\lHa^s« 



342 



UNCUSSIflED 



NAME: HIR251020 U 1 1 ULniJIJ 1 1 II. U PAGE 

120 Known as Morlcy. Caskin £ GcnAtally. 

121 . In October of 1979, I aovad to Sharon, Connecticut. 

122 where I worked as an estinating manager, and also attended 

123 courses to receive a real estate license. On October 31 
12it oi--I did that for a year, there we go, which brings us to 

125 1980. On October 31, Halloween evening of 1980, I guess it 

126 was 31, maybe it is 30, however many days, I moved back to a 

127 house that I rented with ny wife in South Arlington. X 

128 worked for Arlington Times Telemarketing Corporation for a 

129 couple of months, I guess November and December of 1980. 

130 In February of 1981, I went to work for the Haley 

131 Corporation, Caribbean Holidays over here at the corner of 

132 15th and L, worked there until July of 1985. In July of 

133 1985. the company closed down several of Its regional 
13U offices, including Washington, and that put me back on the 

135 unemployment lines. 

136 So I went to Bermuda for two weeks' vacation and 

137 then came back here to go to work for Spitz. 

138 S Hhat had you done with the Haley Corporation? 

139 A Oh, I started off as a reservationlst and worked my 
mo way up to regional manager. 

im .' fi And what sort of organization was that? 

ma ^ A Selling package tours to travel agents. 

1U3 fi So you know how you obtained the job with Hz. 

ItU Channell in August of 1985? 




ir 



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KAHI= HIR251020 



UNCLASSIFIED 



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A Sura. In Hatch, I gusss it was, oi 1985, my wifa's 
public ralations firm was doing soma work on tha Nlcaraguan 
rafugaa fund dinnar, and sha was going to work lata thara 
ona night, bacausa thay had to gat out this blastad mailing, 
and so sha askad ma i± I would coma ovar and halp, and I 
alludad as to how ii sha would provida a frash pack oi 
cigarattes and a bottla oi wina , I would probably ba willing 
to assist them, and I wandazad on ovaz thara. and in my 
usual chaariul iashion, I said ''Okay, you can all quit 
working now, tha savior is hara'*, or words to that aiiact. 
at which point Dan Conrad, who was working thara, startad 
talking with ma. 

Ha was imprassad by my cocky attituda, and ha and I 
spant tha naxt coupla oi months talking sporadically about 
myself and perhaps soma oi my employees at Caribbean 
Holidays coming over to work for Ne^ . and we negotiated 
back and forth and never came up with an arrangement that 
made me terribly happy; and after Haley Caribbean closed. I 
went trotting on up to Kaw York to interview some iolks . and 
Dan Conrad called my home and said. ''Gee whiz, where is 
Kris, we can't reach him at his office. Hhat is going on? 
Bt^h, blah, blah, so my wife called me in Kew Jersey, where 
I.Mas staying at a hotel, because my car had broken down on 
the Jersey Turnpike, and she said. ''Conrad is looking for 
you. call him. * ' 



KlASSm 



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HIR251020^| ji^ej pin^?L5i;y i^-^'^Jf P»GK 8 

So 1 callad up Conrad, and ha said, ''Hhat tha hall 
ara you doing going up thaxa to intaxviaw in Naw York? Ha 
want you to coita uorX for us.'* And I said soaathing along 
tha linas oi> ''Hall, you know, you havan't aada ma an ofiar 
I am happy enough with.'* Ha said, ''6at tha hall out oi 
thara and cona on back hara, and wa will iiaka you an oiiar 
you ara happy uith'', or words to that aiiaet. 

And so I finlshad my businass in Kaw York and cama 
back hara and had a sort oi informal intarviaw with him. Ha 
chatted a little bit. Ha said tha long and short oi it is, 
''Hou much money do you want?'' And I told him and ha said, 

''Okay, iina, you ara hired.'' I said, ''Hall. I am not 

e 
hired until Z taka two weeks' vacation in Barmuda.'* Ha 

said, 'Tina, come to work ior us aiter you get baok from 

Bermuda'', which I did. 

fi How much money did you tell him you wanted? 

A *28,000. 

e And that is what ha agreed to pay you? 

A Yes. 

fi And ware you to reoelva any compensation other than 
a base salary oi *28,000? 

A Nothing that I can think oi. 
.__ fi You weren't expecting to receive any sort oi 
commission — 

A No. 




SB BtUg^ 



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NAME' 
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HIR251020 



UNCLASSIFIED 



PAGE 



fi --in addition to th* basa salary? 

A Absolutaly not. 

C KoH you mantionad that youz uifa workad for a 
public ralations iizn that was involvad in I taka it tha 
Nicazaguan refugaa fund dinnar> is that corract? 

A That is corzact. 

fi Which firm is that? 

A ninor and Frasar Public Affairs. 

2 What is youz uifa's position thara? 

A Sha is Vica Prasidant. Sha is now anyway. 

fi Sha is still with that firm? 

A Sha is. although its nana is changed now. It is 
now Hinoz, Fzasar and Gabzial Public Affairs. 

2 Does sha hava rasponsibilitias in any particular 
area as a Vica Prasidant of that firm? 

A Hell> it has changed a lot. because she has just 
coma back from having our first child, and they aze sczewin; 
with her responsibilities an awful lot. and she is 
alternating any negotiating with them and threatening them 
with a lawsuit foz disczinination. so at present her 
responsibilities are kind of up in the air. 

2 Until she left to have the child, what was the area 
of her zasponsiblllties? 

A She was sozt of in chazga of suppozt staff and 
bookkeeping and stuff like that. 



UNCUSSIF 



346 



UNCUSSlREi 



NAHE: HIR251020 lllllll milJII I^^LI P&GE 10 

220 e By what nam» has sh* ba*n •mploy«d at ninoz and 

221 Frasar? Doas she usa your last nana? 

222 A Yes, Hazgatet Littledale. 

223 2 You eventually comitenced youz employaent with Hz. 
22(4 Channell on August 19, 1985. 

225 A I believe it was August 19, yes. 

226 e And how long did you continue to be enployed by Hz. 

227 Channell oz one of his ozganizations ? 

228 A Until the end of Hay of this yeaz . 

229 2 During youz peziod of eaployaent, did youz duties 

230 vary or did they basically remain the sane? 

231 A Pretty much the sane, as a fund-raisez. 

232 2 Would you briefly describe what was involved In 

233 that? 

234 A Call people on the telephone, tell then what you 

235 are doing and ask them to give money. 

236 2 And that was basically youz job zesponsibility 

237 thzough the peziod of time you wozked foz Hz. Channell? 

238 A Yes. 

239 2 Was one of the pzogzams that Hz. Channell was 
2>t0 involved in when you went to wozK theze in 1985 the zaising 
24 1 of" funds foz the I^esistance in Nicazagua? 

242 A Mould you specify what you mean by '*foz the 

243 llesistance' ' ? 

244 2 Did you understand that Hz. Channell 's ozganlzatlon 



UNCLASSIFIED 



I 



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HMlAS»ii , 



HIR251020 IIBIBIII nUlJil •li*'"' PAGE 11 

was raising iunds to b« tiansferrad to rApcesantativas o£ 
tha--ior fighting ot opposad to tha Sandinista eovarnnant in 
Nicaragua? 

A There was a tima during my amploymant theza when I 
came to understand that cartain funds ware being raised for 
the specific purpose of transferring monay^ to the 
Itfesistance for the purpose of purchasing food and other 
humanitarian itens. 

e When did you coma to understand that? 

A The food project took place, X guess, in tha summer 
of 1986. That was > I mean, that was specifically going to 
be transferred directly to the Resistance for the purpose of 
purchasing food. You all have all my documents. There are 
probably some letters in there regarding food and that sort 
of thing, also some of my fund-raising records will indicate 
that. 

2 And you mentioned you understood funds were being 
raised for certain purposes beyond the purchase of food? 

A Oh, yes. 

2 What were those purposes? 

A Hall, whan I first want to work there — but these are 
nv± funds that were being transferred directly to tha 
xaslstance. Are we still on funds that are being given to 
us and thence directly to the Resistance, or are we moving 
to funds that are used to support tha Aasistanoa in one way 



DNtUiSSlFIF 



348 



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UNCUSSIRED 



HIR251020 mill I II ^ X IRx^^ II PAGE 12 
or another but which are^ riot bei~rig~transi«rred directly to 
then? 

S I think it is important we are comnunicating on the 
sane terns > Mr. Littledale. Let ne approach it another way. 
Did you understand that sone of the funds that you 
were involved in raising were being used to pay for a public 
education canpaign? 

A Absolutely. 

fi Related to Nicaragua? 

A That was certainly what a portion of the funds we 
raised were being used for. 

2 And was that both in 1985 and 1986? 

A Yes. 

fi And in addition to the public education eanpaignf 
did you understand that you were also raising funds for 
lobbying activities in connection with aid for the contras? 

A Yes. 

2 Or the Resistance in Nicaragua? 

A Yes. 

8 Apart from the funds that you were raising for 
public education and for lobbying, was It your understanding 
tlTat you were raising other funds? 
^ A Absolutely. 

S for other purposes involving Nloatagua? 

A Absolutely. 



UNtlASW 



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HIR2S1020 



UNCUS 



it 



PAGE 13 



S What were the othar purposes that you undttrstood 
you were raising funds for? 

A When I first got thara, we ware asking people to 
come to Meetings in the Hhita House complex where they would 
be addressed by members of the administration, and the 
stated purpose of those funds was to support an airlift of 
the supplies purchased with the *27 million in nonlethal aid 
that Congress had appropriated in April of 1985, I believe, 
to support an airlift of those supplies from storehouses 
generally in Honduras to actual Resistance forces in the 
field. That program was carried on fox quite a while. 

I came to understand in. Z believe it was October 
of 1985, but X can't be certain it was October, it might 
have been November, that funds ware also being raised for 
the purchase of lethal aid, lethal equipment for the /Freedom 
/ighters . 

Let's see, what else did we raise money for? He 
also raised some money in the summer of 1986. spring I guess 
of 1986. to support the President's aim regarding the 
Strategic Defense Initiative. 

fi Ky question is directed to Nicaragua. 

A Strictly Nicaragua. In the summer of 1986. we also 
raised money that was for the specific purpose of purchasing 
food for the /reedom fighters. If I could see some of my 
records, it might help refresh my memory, but X believe we 



«U»- 



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nx 



HIR251020 llllULallW"* »»-' PAGE 1M 

also raisad sone money for food, I thlnk--I can't sw«ar to 
it--in tha faJ.1 of 1986, October mostly I believe, maybe 
September as well. 

He raised in the spring of 1986 some money for the 
purpose of purchasing a number of Haule aircraft, which uere 
to be used for medevac and resupply missions. That is all I 
can think of right now regarding fund-raising that relates 
to the Hicaraguan Resistance. 

S So to make sure I understand your answer, Mr. 
Littledale, apart from funds raised for public education and 
lobbying, you recall funds were raised for, one, an airlift 
of supplies; two, lethal equipment* three, food) and, four. 
Haule aircraft? 

A Oh, and some medicine too. I just remembered that> 
some medicine in March and April of 1986. 

S And fifth, medicine. Can you recall anything else? 

A Kot at the moment. It may come to me the way the 
medicine did, and if so, I will sing out. 

2 I want to return for a moment to the areas of 
public education and lobbying that I mentioned at the 
beginning, and you said that you reoalled raising funds in 
tlTose areas. Other than fund-raising, did you have any role 
lO the program of the Channell organizations with respect to 
the public education program or the lobbying activities? 

A Hell. I sat in on a number of meetings regarding 



mx 



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\miM 



PAGE IS 



stcategy and that sort of thing for th« aducatlon campaign, 
lobbying campaign. When ue are looking at drafts of 
television ads that were going to be produced, you know, we 
would all sort of talk about maybe we should change this, 
maybe we should change that, and if Spitz came up with a 
television ad| or the wording for a television ad, he would 
have rae read it while he timed it to see if it took more or 
less than 30 seconds, but I wouldn't really call that a role 
in it. That is just sort of-- 

2 Other than meetings where you read the copy for the 
advertisements with Hr . Channell, what strategy meetings do 
you recall participating in? 

A It happened almost every day. I mean. Spitz Mould 
have sort of staff meetings several times a week over lunch, 
in which the whole program would be discussed, and we would 
all put our little input in, and generally after a little 
bit of talk on that subject, the conversation would come 
around to the main issue, which is how are we going to pay 
for this? How much money are you going to raise today? 
That is what Z mean by strategy sessions. 

S Did you participate in any meetings with Dan 
Kuykendall? 
^ A Sure . 

Q What were those aeetlngs about? 

A Oh, several times we had lunch, and he would 



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^m 



PAGE 



16 



discuss what he was doing with rsgaxd to lobbying and that 

sort of thing. Ha sat in whil« Spitz and I and ha workad on 

ralwoxding soma draft ads to ba dona by Santinal, tha 

y 
lobbying group. That was raally mainly it. This is prior 

to Noverabar of 1986? 

S Yas . I will coma back to post-Kovambar > 1986. 

A Good. 

Q But for tha momant, yas. bafora Kovambar, 1986. 

A Kovambar 2 1 I guass> or was it 25, somawhara in 



there . 



Cook? 



Did you participate in any meetings with Stave 



A Tha last name doesn't ring a bell. 

fi Of the Edelman Organization. 

A Not that I recall. Hy association with the stuff 
that Edelman did for us was, as I remember it, almost 
strictly limited to my being at press conferences that 
Edelman set up. I don't recall having anything to do with 
any of the Edelman crowd aside from those press conferences. 

2 Did you participate in any meetings with Penn 



Kimble? 



.' A I have a recollection of meeting him, but I don't 
recall specifically when I met him. and I don't recall 
anything more than the most casual of contact with him. 
fi Did you participate in any meetings with Bruce 






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:::::::: uNULAbMniu - - 

A Pretty much th« sana as--who Is the guy we just did? 
Pretty nuch the same as K^ble. I think I probably met him 
at some point> but I don't recall the circumstances, and I 
don't recall having anything more than extremely casual 
contact with him. 

Q Did you participate in any meetings with Jack 
Lichtenstein? 

A I don't even think I ever met him. See. you guys 
have got a real small little gold^ilsh here. 

2 Old you participate in any meetings with Haztin 
Artiano? 

A I don't even know who he is. 

fi So that, to the best oi your recollection, the 
answer is no. 

A That is correct, to the best of my recollection, I 
don't recall ever having even met the gentleman. 

& Did you participate in any meetings with David 
Fischer? 

A Hell, oi course, in January of 1986, we had a 
meeting in the Roosevelt Room at the Hhite House, and he was 
tKere . I don't believe I said a word to him then. The only 
time I remember having any conversation with Hz. Fischer was 
in a meeting that took place sometime in 1986. I think it 
was the latter half of 1986. and it wasn't so much I was in 



«NCUSS!Fe 



354 



MANE: 
1420 
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(425 
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(4(40 
•4(41 
(442 
14143 
(4MM 



MIR2S1020 



UNCUSSItitii 



PAGE 18 



a meeting with him. oz anything lik« that, as Spitz wanted 
a* to be there for a moment to sort of make a point of 
reminding him that ue were trying to set up a meeting 
between Don Regan and one of our contributors, but aside 
from my saying. ''Gee whiz, what is happening with that 
meeting*', I don't recall having any conversation or 
anything else with David Fischer. 

2 Here you aware that tlr . Channell had retained Minor 
and Fraser to provide services in connection with the 
lobbying campaign in 1986 with respect to Nicaragua? 

A I knew that their services had been retained with 
respect to the overall program of support for the Nlcazaguan 
Resistance. Specifically whether it was with regard to the 
lobbying campaign or the public education campaign, I don't 
remember . 

fi Did you participate in any meetings with any 
representatives of ninoz and frasez with regard to that 
program oz their assistance to Hz. Channel's ozganlzatlons? 

A Hy wife asked me to make suze that a bill foz the 
second half of the contzaot got paid as soon as possible 
please, because ''He need to make payzoll.'' That is the 
suk of ay Interaction between the two. 

L ft So you zeoall. Hz. Littledale, paztlclpatins in any 
meeting in connection with the publlo education oz lobbying 
campaign Hheze theze was a discussion oi tazgeting 



UNCLASSIHEO 



355 



NAHE 

MU5 
UI46 
Ut47 
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>«56 
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MIX251020 



Congr«ss«*n? 



UNCUSSIRED 



PkGZ 19 



A Ih*x* wera lots oi discussions Mlth xagard to 
tatgating Congrassncn. but you az* asking sort oi an 
unzaalistlc quastlon Inasmuch as Spitz was haad oi both tha 
lobbying organization and tha National Kndownant ioz tha 
Prasazvation oi Libarty. which was oi oouzsa tha aduoatlonal 
organization* how do you say whan you aza discussing 
tazgating Congzassman as part oi on* group or tha othar? 

Tha way I always lookad at it was this way. Hall, 
ii wa ara talking about public aducation, than wa ara having 
a National Endowmant ior tha Prasazvation oi Libarty 
Beating. Spitz Channall. Prasidant. and pzasidlng, whazaas 
ii ha stazts talking about tazgating Congzassman. than 
obviously wa aza now having a Santinal maatlng. Spitz 
Channall. Pzasldant. pzasidlng. 

fi I think Mz. Littladala. you may hava misundarstood 
my question. My question was simply, did you participate in 
any meeting wheza the subject was the tazgating oi 
Congzessmen? 

A Oh. yes. absolutely. 

S So you did pazticlpate In a number oi those? 

A Absolutely. I can't zemembez how many, but thaze 
Maze plenty oi them. 

a And were those meetings that Included Hr . Channall? 



A Yes. 



BNcmssra 



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HIR251020 



UNCLASSIREO 



PAGE 20 



2 Did thay include Hr . Kuykandall? 

A The meating that I xscall is whaxa w* sat down and 
Hz. Channall and mysali, Mr. Kuykandall, wata taviawing soma 
draft talavision ads. and Mr. Kuykandall was giving us his 
advice on hou to change the wording so as not to oifand 
certain Congressmen and hopefully — as opposed to just pissing 
them off and getting their bowels in an uproar--hopef ully 
getting them to come around to our way of thinking, and sure 
I was at one meeting in which we sort of went over these 
television ads. I can't say for sure if during the course 
of that meeting the word ''target such and such a 
Congressman'* came up. I don't know if the specific wording 
''targeting'' came up during that meeting. 

S What do you understand the phrase ''targeting 
Congressmen' ' to mean? 

A Well, we have a message that we want to affect a 
certain Congressman with, and so we target him with the 
message . 

fi What does that mean in terms of implementation of 
your program? 

A It means you run the talavision ads in his 
dfstrict. 

S And that was the purpose of thasa maatlngs that you 
hava dasozlbad, to select districts or select areas where 
you ran television ads? 



UNCLASSIFiF 



357 



UllULHOdll iCO 



NAnE= HIIt251020 UllVkllWII Ikl^ PtGX 21 

<495 k Suza. although I didn't partiolpata in tha 

ti96 salactlon. 

K97 fi Hho did? 

<t98 A Oh. h«ll, Z don't KnoM who did. Z was navaz at a 

<t99 maating In which thay actually sat down and said, ''til 

500 tight, wa aza going to do ao and so and so and so and so and 

501 so and so and so.'' but It saaas to ma that — wall, no. 

502 Kuykandall and IBC. as an antlty. waza tha paopla that aad* 

503 tha spaciiic salactlons. although, oi oouzsa, thaza Is an 
50ii aKcaptlon to that, which is tha Hlohaal Baznas ads that waza 

505 zun by Santinal. Ha all. oi couzsa. wantad to nail Baxna^' 

506 ass. and thosa waza zun ioz tha puzposa of spaciiloally— I 

507 will hava to axplaln tha whola thing to you. 

508 Tha ads that waza zun about Baznas waza zathaz 

509 nasty. Thay said spaeiiioally ha is not suppoztlng tha 

510 Pzasidant. whazaas tha ads that waza zun on othaz 

511 Congzassaan said ''hasn't aada up his Bind yat.'* Tha idaa 

512 was that by zunning thaa on Baznas haza on Washington 

513 talavision. all thasa good Congzassaan. all thasa othaz 

514 Congzassaan would saa tha ads and say **0h> hew nioa. thay 

515 aza not balng ^uita so nasty to »*■' \>J and that sozt o< 

516 driiazanea. 

517 ^ s Hho aada tha daeisions about tha Baznas oaBpaign? 

518 I Hho aada what daeisions about lt7 

519 fi About tha typa of ads to put aonay into tha Baznas 



lINCUSSinED 



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SH>4 



UNCUSSIHE 



campaign . 

\ In other words > who chose the wording? 

2 Let me start with the more basic question. Who 
made the decision that you would participate in the Barnes 
campaign? Was that Kr . Channell's decision? 

A Yes . We are not speaking now about the--are we 
speaking now about the ads run by Sentinel that were 
lobbying ads, or are we speaking now about the ads run by 
the Antiterrorism American Committee which were political 
campaign ads? We are using the word * ' caBpaign/* '/>/ and I am 



'(/ 



being careful here. 

S My question is a follow-up on your answer that 
referred to the Barnes — 

A The ads I was referring to were the Sentinel ads, 
which were telling people to call Michael Barnes and tell 
him to support the President on Nicaragua. Those were run 
by the Sentinel, and they are totally unrelated to ads run 
by the Antiterrorism American Committee, and specifically 
the ads run — it is kind of funny, nobody ever caught onlto 
this. We ran an add. Antiterrorism American Committee ran 
an ad comparing Barbara nikulskl and Linda Chavez. The 
purpose of those ads was not to have anything to do with 
Bmrbara Hlkulskl. It was to damage Michael Barnes. 

fi These ware ads run by the Antiterrorism American 
Committee? 



UNCLASSiFit 






359 



sus 
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5H7 
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UNClASSIFiED 



KAHE. HIR251020 l|!\ll I UWirBril P»GE 23 



X COtlACt. 

a And how would th«y damag* Hx . Baznas? 

A W«ll> they w«z« zun in tha last two waaks baioza 
tha Damoezatlo Pzlmary, and, of coursa, Baznas was 
frantically tzying to zaisa monay ioz a last-nlnuta TV 
blitz, and by zunning ads that say in Novanbaz you ara going 
to gat to vota for ona of thasa two, Hikulski and Chavaz, 
and haza is what thay stand for, you giva tha Damocratio 
primary votars the impression that Baznas is alzaady out of 
it, and thereby you hurt his fund-raising efforts for his 
last-ninuta television blitz and make everybody think, ''Ah- 
ah, wa will fozgat abut Baznas.'' That was the purpose of 
those . 

e Has this stzategy discussed aiiong employees of Hz. 
Channell's ozganization? 

A Yes. 

2 With whom did you discuss this stzategy? 

A I an having tzouble remembezlng the specific 
meeting, but there were a number of times while we were 
raising money for it, in which we discussed the stzategy so 
that we could explain it to contzibutozs and potential 
cAtzibutozs, so that they would want to giva money. 
L e Did you discuss this with Hz. Cliff Smith? 

A Pzobably. I don't zecall specliloally when, but I 
am suze that the stzategy came up at a time when Mz. Smith 



UNCLASSiB 



360 



OilCLASSIRED 



KANE: HIR251020 U | f ULniJlJ 1 1 ■■ ■■ ^^^^ '" 

570 and I war« in the san* zoon. 

571 e Old you discuss this stzatagy with Hz. Channall? 

572 A Suze> in the sane way as I desczibed it with Hz. 

573 Smith. 

S7«« 2 Hith Mz. Conzad. Dan Conzad? 

575 A Yes, I am suze. He was ceztainly in the zoom at 

576 the tine. 

577 fi Did you discuss this stzategy with Hz. Kuykendall? 

578 A I don't zecall doing so. but it is entizely 

579 possible that it took place. 

580 e Did you discuss this stzategy with Rich Hillez? 

581 A It is possible that we did so. but Z don't zecall a 

582 specific tine . 

583 e Do you know Olivez Nozth? 

58t4 A Z wouldn't say that I know hin. Z have net the 

585 man. a gzeat pleasuze too. 

586 2 Did you evez discuss the Baznes campaign in any way 

587 with Colonel Hozth? 

588 A Absolutely not. 

589 2 You distinguish between the Antitezzozisn Anezican 

590 Campaign adveztisenents ioz Congzessnan Baznes. which Z 
59 1 believe you indicated zan in the fall of 1986, is that 

592 c^zzect? 

593 A That is cozzect, well, late August oz eazly 

S9U Septenbez. because if I zenenbez cozzeetly. one of you all 



UNCmSW 



361 



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6m 

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HIR251020 



UNCLASSIFIED 



PAGE 



25 



probably r«m*i>b*xs the Oeaocratic Pximaxy In '86 was right 
at tha baglnnlng of Saptaabar In Haryland In '86, wasn't it? 

S Apart from the exact data, your raeollaction. 

A Lata suitmer-early fall. 

fi In August or September of 1986? 

A Yes. 

Q You distinguished those advertisements from the 
Sentinel advertisements which ran earlier in tha spring of 
1986. 

A Correct. 

e Involving Congressman Barnes, is that correct? 

A Correct. 

fi And it was your understanding that the Sentinel 
advertisements focused more on the Nicaraguan aid vote 
issue? 

A They focused strictly on the issue of aid to the 
contras . 

e And what was the strategy with respect to those 
ads? 

A I thought I eKplainad It eaxllar. Tha idea was the 
wording, the Sentinel, the lobbying organization ran ads in 
a 'number of Congressmen's districts, specifically talking 
akout specific Congressmen's stands on the issue of aid to 
the Freedom /fighters , and tha wording — I don't recall the 
exact wording, you probably have all got copies of the 



UNCUSSIFIE 



362 



UNCLASSinED .... 



Hint- HIR251020 IIIVIll nilllll IB-LI PtGE 26 



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tap«s> but th« gist of th* ads that waxa run on all tha 
Congxassaan axcapt Batnas was so and so. Congxassaan. 
whatavax, hasn't yet dacidad. ox soaathing Ilka that. 
Hhathex to suppoxt tha Pxasidant. call hi« and tall hla to> 
whereas tha Barnes ads. which waxa xathax aoxa haxsh in 
tone, said * 'Isn't suppoxting tha Pxasidant.'' Notica tha 
dif iexanca? 

Hasn't Bade up his mind, and isn't — call hia. wake 
him up. knd tha idea was that Baxnas. of couxsa. being one 
of the foraaost cxitics of aid to tha ^xaadoa ^ightaxs. and 
being vexy conveniently located xight haxa in tha Hashington 
{(etxopolitan Region. Congxassaan would saa tha ads about 
Barnes, take note of tha diffaxanea batiiaan tha ads that 
waxe xunning about thaa and tha ads that waxa xunnlng about 
Baxnas and would be aoxa disposed to help us on tha thaoxy. 
wall, these people could gat xaally nasty if thay wanted to. 
but they axe not being nasty. Thay axa just saying ''Hay. 
guys, coaa on* w and that was tha stxatagy thaxa. 

S With whoa did you discuss this stxatagy? 

k Kuykandall and Spltx and aysali dlseussad It a 
nuabax of tlaas . because Z zaaaabax Kuykandall saying that 
ha was going to be bxinging copies of tha ads to show to 
sfiaa of tha Congxassaan that ware having thaa z\in on thaa. 
You know, gaa whis, this is running la tha dlstziet right 
now. Wouldn't you like this to go away? 



uNcussra 



363 



UNCLASSIFIED 



NAME: HIR251020 lJllUI«nwWll IkV PAGE 27 



6XS 
6M6 
61*7 
6M8 
6>49 
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669 



Hall, then, just go ah*ad and say you ata going to 
support aid to tha ^taadom Flghtars. 

Q But tha ad that was balng run in tha Congrassman's 
district with uhon Mr. Kuykandall was ooniarting. I taka it 
that was tha ralativaly soit ad? 

A Yas. axactly. 

fi And not tha hard ad? 

A Exactly. 

fi Was Mr. Kuykandall also to indicata that if thay 
didn't changa that tha hard ad would start running in thair 
district as wall? 

A I don't racall hia avar — it avar baing discussad 
that ha was going to thraatan thaa in that way. Tha idaa 
was you don't naad to say that to a Congxassman. If ha is 
saaing tha Barnas ads, ha knows what can happan. You don't 
naad to say it. 

e Sid you discuss this stratagy with anyona iron tha 
Goodman agancy? 

A I nay hava givan soaabody izom tha Goodaan agancy 
soma instructions ovar tha phona on how to changa soma oi 
tha ads, oz soaathing lika that, but I don't racall 
drsoussing thaa in any graat datail with anybody iroa 
Oeodaan. 

a What was tha relationship . ii any, Mr. Littladala, 
batwaan tha ads that war* sponsored by Santinal and tha 



tt\itU^^SW 



364 



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HIR251020 



UNCUSSiFlEO 



PAGE 28 



other public education advertisements that were sponsored by 
the National Endowment for the Preservation of Liberty or 
NEPL? 

A Spitz was head of both organizations, and Cliff and 

s 

myself and spitz and Jane HcL^ughlin raised the money to 
finance both. 

S But was there a coordinated strategy in using the 
NEPL ads together with the Sentinel ads to try to achieve a 
favorable vote in the Congress? 

A I don't think it was a mistake that many of the 
educational ads ran in the same areas as the lobbying ads 
did. If you are trying to describe a 1-2 punch or something 
like that. I don't recall ever sitting down and discussing 
it as such. 

fi Uhat was the objective of the educational ads. as 
you understood it? 

A To make people more favorable to the idea of the 
Nicaraguan s'esistance. to make people dislike the Sandinista 
government and like the centres, to educate them in such a 
way that they understood why the President wanted aid for 
the /reedom fighters . 

2 What was the criteria for selecting media markets 
for running the educational ads? 

A Areas of the country where you have people that are 

1 ^ 

generally pro4defense. antifpommunist. and thereby an 







365 



... OKCLftSSf-' 



NAHZ: RIR2S1020 UllULflUUll I lU ^*^' '' 

695 audianc* that Is going to ba listening and llKaly to eoaa 

696 around to your point oi viaw. 

697 fi Has tha pxasanca oi a potantlal swing vota anothax 

698 ozitaxla iox salaeting a aadia aazkat, a suing Congzassional 

699 vota? 

700 ft Inasmuch as X navaz sat doiin and had anything to do 

701 with halping to salact tha azaas Mhaza thay ran in. Z ean't 

702 say absolutely positively ona nay oz tha othaz. Z don't 

703 think it would ba uniair to say that, but Z can't giva you 
70it an absolutely deiinitiva answez. baeausa Z was not in a 

705 position to be aaking decisions like that, and ay advice was 

706 not sought on decisions like that. Z was a iund-raisar and 

707 not a stzategist. 

708 S Going back to a question Z asked you a iaw ainutes 

709 ago about youz eenvezsations oz aeetings with llr. 

710 Kuykendall. we agzeed that youz initial answez would be 

711 liaited to meetings up to a ceztain data in Novembez, 1986. 

712 Bave you been involved in meetings with Hz. Kuykendall since 

713 appzoximately Novembez 20, 1986? 
7111 A Yes. 

715 ft Hhat has been the subject mattez oi those meetings? 

716 .' k Pzepazing some kind oi deiense against the wild and 

717 zidiculous chazgas printed in the lovell, Hassachuaetts Sun 

718 to the eiiact that proceeds irom arms sales to Zzan had been 

719 iunneled to NEPL oz othez Channall entitles, and had thence 



HEUiSsm 



366 



DhOUSSirit 



NAHE' HIR2S1020 U | 1 ViLiI ■ W W I ■ ti^^ VlGt 30 



720 
721 
722 



been used ioz the 1986 political caspaign. Those charges, 
if you renenber, were nade in December oi 1985 and were 
totally groundless. 



I 



UNCLASSIHED 



367 



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HIR2S1020 
RPTS nCGIKN 
DCMH SPRkDLZNG 
(3 = 30 p.m. 1 




' '"SiflEy 



e You maan in 0«c*mb*x of 1986? 

A '86. I'm sorry. Yas. H«r* mada in D«c«mbttr oi 
1986 and wera totally groundless and wa had at laast ona 
specific meeting that I recall in which wa wara going over a 
strategy for trying to make Congrassman hare on the Hill 
aware that that was a bunch of BS and, thereby, try to help 
diffuse some of the investigations of us that wara taking 
place . 

e How do you know those changes wara groundless? 

A How do I know they wera groundless? 

e Yes. 

A Because I saw the book that was prepared of all the 
monies received by the National Endowment and if you will 
look at those books, you will sea that thay ain't no money 
there from Iran. 

e And that's the basis for youx belief that the 
charges are groundless, the book that you reviewed? 

A Yes . 
^ e Mho prapaxad that book? 

A The staff in general. I don't ramembax exactly 
who. I think it was pxepaxed by our accountants, but I'm 



UNCLASSIFiE 



368 



NAME: 

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HIR251020 
not sure. 



\> 



[WLt\\)Oit IL 



PAGE 32 



Q Has Rich Hiller involved in preparing that book? 

A Probably. 

2 Hhat other neetings have you been involved ire with 
Mr. KuyKendall since Kovember, 1986? 

A The only other one I recall — can you excuse me for 
just a noaent? 

2 Sure. 

A Okay. The only other meeting that I recall was in 
April oi this year and Mr. Channell had made a proifer to 
Judge Walsh's office essentially whereby he would plead 
guilty to one count of something or other--! have forgotten 
the specific terms--and Hr . Conrad > Hr . Smith and myself 
would receive immunity from Judge Welsh's office. Shortly 
after he made his proffer Judge Walsh's office contacted me 
or contacted my attorney and through my attorney, 
essentially offered me immunity if I would come in and 
testify against Mr. Channell, Hr . Conrad and Hr . Smith, and 
anybody else they could think of, thereby giving them. I 
suppose, enough ammunition to put a little bit more pressure 
on Spitz to plead guilty to more than just one oount. 

I discussed that with my attorney and my family at 
some length and came to the conclusion that we should tell 
Hr. Walsh's office to sit on a hot rod and rotate and we did 
so. I had lunch shortly after my attorney provided ay 



t 



UNCUSSKI 



369 



iifii 



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HIR2S1020 ^I^VkllW^I" •■-— ' PAGE 33 
response to Judge Walsh's office and at that lunch present 
Hera Mr. Kuykendall, I believe Hrs . Kuykendall, Spitz 
Channell and I think some other people, but I don't reneraber 
uhora and Ilr . Channell said to me at some point during the 
course of the lunch--he had learned from his attorney that I 
had rejected this offer from the prosecutor's office and he 
said to me I understand we have something to thank you for. 
And I smiled and said something like what the hell. And 
there was really no further discussion of it there but Mr. 
Kuykendall was there and it related to all this kind of 
stuff. 

Q Other than the meeting with Hx . Kuykendall to 
discuss the strategy for dealing with the Lowell Sun 
allegation and the luncheon that you have just described, 
have you had any further conferences with Mr. Kuykendall 
since November, 1986? 

A Yes, as a matter of fact. I just remembered it. 




HR. BUCK: Can we go off the record for a second 
please? 

(Discussion off the record.] 

THE WITNESS' Shortly after Ms. McL)[(ughlin had told 
her story to ABC naws I got a call early in the morning from 
Dan Kuykendall. He asked me to come over to his office and 




370 



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HIR251020 



UNClASSIFltD 



PAGE 34 



[i^ghliir^ 



I went ovar to his oiiice. U« dlscussad in soiia d«tail 
cftxtain knowladga that wa had ragaxding Mrs. Hol^ 

and he discussad with aa tha possibility oi ny 
meeting with a raportaz. I believe haz nana was Rita 
Beamish, but I'm not sura, and discussing what I knew about 
Hzs ncLj^ughlina^^^^^^^^^^^^lB^^^^^^^^^^^HHB in an 
attempt to discredit Hs . McLaughlin soaauhat. 

I discussad that with him. 'I was vary enthusiastic 
about tha proposal and I said of course Hz . Kuykandall. that 
I would have to discuss this with ay attorney ilzst and I 
called my attorney and he strongly discouzaged aa izoa doing 
so. So I infozmed Hz. Kuykendall that auch to ay regret, on 
tha advice oi counsel, I would have to decline the 
opportunity . 

BY HR. FRYMAN" 

8 But Mr. Kuykendall was urging you to have such a 
meeting with this zepoztezt is that correct? 

41 Hell, he didn't say juap up and down and say do it, 
do i^ do it, but it was quite oleaz he was In favor of the 
idea. 

e Rave you had any other coniezencas with Mr. 
Kuykendall since Kovaabar of 1986? 

A Probably, but none that I recall specifically. 

e Old you have any discussions with Hr . Kuykendall 
about the strategy for dealing with the congressional 



UNCIASSIFIE 



371 



NAnE = 
823 
82i( 
825 
826 
827 
828 
829 
830 
831 
832 
833 
83U 
835 
836 
837 
838 
839 
8(40 
8U1 
8M2 
8(43 
8(|'4 
8X5 
846 
8it7 



HIR251020 



UNySSiFIEiJ 



PkGE 



35 



investigations? 

A Th« only thing that I would say xalatad to that was 
what I alxaady described relating to the Lowell, 
nassachusetts Sun report. 

fi Kow, iron August of 1985 through 1986 you 
functioned as a fund raiser for Mr. Channell; is that 
correct? 

A That's correct. 

8 Hhat was the total amount of money that you were 
responsible for raising during that period as best you 
recall? 

A I have never added it up dollars and cents, but up 
until the end of 1986, thereby leaving out funds Z raised In 
1987. I believe the total was somewhere in the vicinity of 
«850,000. 

S how much of that was for programs related In some 
way to Nicaragua? 

A The vast majority. 

fi Uould you estimate? 

A Over 90 percent. 

fi Is It your judgment that your experience was 
typical of the fund::^ralsln9 activities of the other fund 
xklsers in that a similarly large majority of the funds that 
they raised during that period also related to programs 
involving Nicaragua? 



UNCLASSIFIED 



372 



fcLKSinED 



Nine HIR251020 |jllllLiltUUl ■ *^*^ "^^^ ^^ 

818 A Ragaxding — possibly Z and aayba probably Mlth Cllii 

8U9 Smith but Spitz xaisad a lot oi aonay ior an aMiul lot of 

850 difiaxant things. But Z Mould say that daiinitaly mysali. 

851 Hr. Channall, Hx . Saith and Hs . HeLfughlin eaxtainly ovax SO 

852 paxcant was xalatad to Nicaxagua. oaxtainly tha majority. 

853 fi Bayond that you axa not sura? 

85U A No. Z didn't kaap tarribly olosa tabs. Saa. I 

855 know that Clifi raisad a bunoh oi monay ior — Z'll kaap this 

856 to '86. Ha raisad a bunoh oi monay ior political campaigns. 

857 ha raisad a bunoh oi monay ior tha S9Z pzejaet and Z don't 

858 know how much ha raisad all told. So it's hard to say but 

859 in my astimation, eartainly tha majority oi iunds raisad by 

860 tha iund raisars Z hava namad wara raisad ior programs 

861 ralatad to Nicaragua. 

862 8 And in 1985 and 1986 you raisad approNimataly 

863 •850. 000 > oi which mora than 90 parcant ralatad to 

864 Nicaragua? 

865 A Yaah. 

866 fi Did you hava particularly asslgnad contributors 

867 that you wara to contact? 

868 A Mall, avary nama Z avar got just about was assignad 

869 to' ma by Mr. Channall. 

870 u 8 Row larga a group oi namas did you hava? 

871 A Vail, oi prospacts hundrads. hundrads and hundrads 

872 and hundrads and hundrads and hundrads. 



BHWssro 



373 



KAMEi 
873 
87i( 
875 
876 
877 
878 
879 
880 
881 
882 
883 
88U 
885 
886 
887 
888 
889 
890 
89 1 
892 
893 
89t| 
895 
896 
897 



UNCLASSIFIED 



HIR251020 llllKJLnUIJII Ibt^ PAGE 37 

S And would you contact th«m by t«l*phon« oe by 

l«tt«E? 

A Y*s . By telephona. 

fi And then onca you devalopad a contributor through a 
telephona contact, would that contributor ramain as somaona 
to ba contacted by you ior iurthar prograas? 

A Yas. Ha rafarrad to than as our contributors. 
Ha's my contributor. 

C How larga was tha group of your contributors? And 
by that, I maan tha individuals who actually nada 
contributions that totaled tha «850,000. 

A Again, you all have my records and without looking 
at them I couldn't tell you anywhere near spaciiieally , but 
I would say the total number of people that gave me money at 
one point or another probably numbered less than MO, but 
more than 25. But without looking at them X really can't 
tall you speciiically . 

S So you recall your iiva largest contributors? 

A Probably. 

S Mould you name them? 

A Yes. I can't promise you that these will actually 
turn out to be the iive largest, but according to my 
zaeolleotlon Bill O'Keil, Ken and Zelma Glddens, Tom 
Clagett, Hel Salwasser. Probably the ilith would be Henry 
Salvatori . 



imtmsiHB 



374 



NkHE: 
898 
899 
900 
901 
902 
903 
90<4 
905 
906 
907 
908 
909 
910 
911 
912 
913 
91M 
915 
916 
917 
918 
919 
920 
921 
922 



HIX251020 



uNcussra 



PtGE 



38 



fi Kow> you mentlonad ••tllar that on* of th* 
objttctivtts oi tha iund Raising actlvltltts waa to taisa funds 
to puxchasa lathal aquipmant. Whan was tha ilzst tiaa that 
tha subjact oi fund taising foz lathal aqulpnant eama up in 
discussions with you? 

A I ballava it was in Octobaz of 1985. 

Hith whOB did you hava this discussion? 

Hz. Channall. 

Just tha two of you? 

Yas . 

What did ha say? 

Spacific wozds I don't zaoall, of oouzsa> but as I 
taaambaz it. wa had had lunch at La Bzassazia on Capitol 
Hill and I than aceoapanlad hia in his oaz. I ballava ha 
had to go to tha bank oz soaathlng Ilka that but as Z 
zamambaz it. I aocoapanlad hia in his caz to soaawhaza and 
ha was bzinging aa back to tha offioa and wa sat in his caz 
foz a faw aoaants and Z don't zaoall how tha oonvazsatlon 
caaa up, but ha assantlally said soaathlng Ilka yas. wa aza 
going to zalsa aonay to buy alssllas to shoot down tha 
S«ndlnltt« hallcoptazs. which plaasad aa no and baoausa I 
had baan hoping alaost fzoa tha vazy stazt that was what wa 
waza using soaa of ouz aonay foz. 

fi Hhat did ha ask you to do. If anything? 

A I don't think ha spaelfloally said oall so and to 



MNCussra 



375 



NAME' 
923 
92*4 
925 
926 
927 
928 
929 
930 
931 
932 
933 
9314 
935 
936 
937 
938 
939 
9<tO 
9il1 
942 
903 
9*4 1( 
9ilS 
916 
9«»7 




HIX2S1020 IIIVIII nUWII ■•-' PAGE 39 

and get him to glvs money to my missiles, but es Z remember 
it> the gist oi the convetsation was certainly one of 
encouraging me to solicit select people for the purpose of 
obtaining money to purchase surface-to-air missiles. 

S Did he mention Colonel North in this initial 
conversation? 

A Whether he mentioned Colonel Korth at that moment, 
I don't really know. But I was aware that Colonel Korth was 
having private meetings from time to time with contributors 
and prospective contributors and that — my chronology may be a 
little bit messed up here, but I was aware certainly at that 
point that he was having private conversations with these 
contributors and I became aware at some point that the topic 
of conversation at these meetings was lethal aid to the 
freedom fighters. 

nx. TOURISH' Hay Z speak with my client just a 
moment please? 

(Discussion off the record.] 
BY m. TtYniHi 

e Do you wish to add anything further to your answer? 

A Kot that Z can think of. 

ft Xow. following this initial discussion with Kr. 
C^annell in October of 1985 about raising aoney fox 
missiles, what was the next conversation that you 
participated in regarding raising funds for lethal 



DNtmsro 



376 



NAME: 

918 
9t(9 
950 
951 
952 
953 
954 
955 
956 
957 
958 
959 
960 
961 
962 
963 
96(4 
965 
966 
967 
968 
969 
970 
971 
972 



HIR251020 



UNCUSSIHE 



PAGE UO 



equipment? 



A The next tine that I specifically recall it was 
aitez a meeting between Colonel North, myseli, Hr . Conzad. 
most of the NEPL staff and a aumber of contributors and 
prospective contributors. It happened I guess the day after 
that meeting and Mr. Channell had bzought Tom Clagett over 
to see Colonel North in the morning. 

2 Can you fix a month on this meeting? 

A November. 

2 November of 1986? 

A '85. 

2 Okay. 

A And I came to understand that at the meeting 
between Hr . Channell, Hr . Clagett and Colonel North, that 
the topic had been lethal aid and that Mr. Channell had 
specifically asked Hr . Clagett to give money for the purpose 
of purchasing lethal aid. 

2 Now. you did not attend this meeting? 

A I did not. 

2 And you say you came to understand these events 
that ocouzzed . How did you come to understand that? 

A Well, as we were walking out of the old Executive 
Office Building, when the meeting between the NEPL staff, a 
number of contributors and prospective contributors and 
Colonel North had taken place. Tom Clagett said to me 



uNCUssra 



377 



KAHE: 
973 
9714 
975 
976 
977 
978 
979 
980 
981 
982 
■ 983 
98M 
985 
986 
987 
988 
989 
990 
99 1 
992 
993 
99M 
99S 
996 
997 







ii 



HIX251020 ■IlllJI.ItWI" •*■■' PAGE U1 
something to the effect of well — that's his words, said 
something to me to the effect of expletive deleted, we have 
got to get some guns to these people. And I looked at him a 
little bit taken aback and said to him, not now. There's a 
place and time to discuss this. 

And we adjourned to the Hay-Adams and had cocktails 
before dinner and I went over to him and I said something to 
him to the effect of you know, I understand you wish to 
provide some concrete support to the freedom fighters and he 
said^yes, that's what we need to do. And I said, well, the 
biggest problem they have got right now is the Sandinista 
helicopters. They really don't have any means of defending 
themselves against these helicopters and we are working to 
try and provide them with those means and if you would be 
receptive to making a fairly large grant, something in the 
region of 20 to 30 thousand dollars, then you should discuss 
this more privately with Colonel Horth tomorrow morning. 

And he allowed as how he would be very receptive to 
this. So I informed Mr. Channell of the same and he 
arranged for himself and Hr . Clagett to go over and see 
Colonel Korth in the morning. 

2 And how did you learn about what occurred during 
that meeting the next morning? 

A Hell, I never learned the specifics but Hr . 
Channell informed me that Mr. Clagett was going to be 



UNCUSSIFIE 



378 



MAKE' 
998 
999 
1000 
1001 
1002 
1003 
lOOU 
1005 
1006 
1007 
1008 
1009 
1010 
101 1 
1012 
1013 
1014 
1015 
1016 
1017 
1018 
1019 
1020 
1021 
1022 




HIR2S1020 Pi&E M2 

helping us with a grant of about •20,000 and putting two and 
two togathaX' givan tha fact that tha purchasa pxiea wa wars 
bandying about of surf aca-to-air missilas was 422,000, I 
cama to tha conclusion that what was discussad at that 
meeting was surf aca-to-air aissilas, and that Hr . Clagatt 
had bean prevailed upon to provide a grant to help with tha 
purchase of surface-to-air missiles. 

e But what more did Hr . Channall tall you about tha 
meeting other than the fact that Hr . Clagatt had decided to 
make a grant of approximately «20,000? 

A I don't recall him going into much mora detail than 
that. I was fairly new with tha company at that time and Z 
think I was still being kept pretty much at arm~i length in 
that my reliability was not yat fully known. 

2 What was tha next occasion that you recall where 
you participated in a conversation relating to lethal aid? 

A On or about tha same day. Mr. O'Nail had also been 
at tha meeting in tha evening between tha KEPL staff and a 
number of contributors and prospective contributors and I 
had discussad our public education campaign with him in soma 
detail and ha saamad vary positive about it. Ha also--let me 
pick my words here — ha also didn't seem to me Ilka tha sort 
oi. ohap that was going to ba terribly receptive to being 
solicited for tha purpose of purchasing lethal aid, and Z 
made that feeling well known to Mr. Channell. 



MSSIFIt 



379 



NAHE 
1023 
102tt 
1025 
1026 
1027 
1028 
1029 
1030 
1031 
1032 
1033 
10314 
1035 
1036 
1037 
1038 
1039 
10U0 
lOitl 
10(42 
10>43 
lOUU 
10(45 
10(46 
10H7 



HIR251020 



UNCUSS 



« 



But Mr. O'Neil was very much in support oi tha 

J 
fr«edom iighters cause and I had bean iniornad by Mr. 

Channell that Mr. O'Heil was an exceptionally wealthy man 

and so I asKed Mr. Channell to arrange for Hr . O'Heil to 

meet privately with Colonel North in the morning and 

stressed to Mr. Channell repeatedly that the topic oi 

conversation should not be lethal aid; it should be the 

program of public education. 

Tha next day after tha private meeting had taken 

place, probably in the same conversation that Mr. Channell 

informed ma of Mr. Clagatt's decision to make a grant of 

*20,000, he informed me that Mr. O'Keil was going to ba 

making a grant of «20,000 and ha made a comment to tha 

effect of Ollia bleu it. And I took that to mean — he said a 

couple of other things like he got carried away or ha got 

confused or something like that, but X took that to mean 

that Colonel North had discussed lethal aid with Mr. O'Nail. 

I don't know that for an absolute fact, but given the fact 
that the grant was the same siza and Hx . Channell 's 
statement Ollia blew it. that's what I took it to mean. 

e Hall, had you suspected a larger contribution from 
Mr. O'Kail? 

_ A No. not at that time. 

2 It was your understanding after these reports from 
Mr. Channell that Mr. Clagatt's grant was to ba to purchase 



UNCLASSIFIE! 



380 



UNCLASSIFIED 



KAHE' HXK251020 l||ll|| nilllli 11 21 PAGI HH 



10U8 
1049 
1050 
1051 
1052 
1053 
105M 
1055 
1056 
1057 
1058 
1059 
1060 
1061 
1062 
1063 
106U 
1065 
1066 
1067 
1068 
1069 
1070 
1071 
1072 



lAthal aid and Hi. 0*N*il's gzant was iox tha public 
•dueation eaapalgn; is that oorxaot? 

X No. 

fl What was youz undazstanding? 

\ Ify undazstanding was that Colonal Kozth had 
discussad lathal aid with Hz. O'Nail at tha tiaa of tha 
pzivata aaating and that that was tha puzposa foz which ha 
was making tha gzant. But as Z said, nobody avaz statad 
that to ma in so aany wozds . That was tha conclusion so 
that I dzaw izoa Hz. Channall's stataaants at tha tiaa. 

fi What was tha naxt occasion whaxa you pazticipatad 
in a convazsation coneazning lathal aid? 

\ Oh. Lozdy. A ooupla oi days aitaz that aaating I 
was on tha phona with Hz. Clagatt and assantially tha 
puzposa oi tha call was to aneeuzaga hia to aaka his 
contzibution with all possibla alaozity and ha aada a 
coaaant to tha aifaot oi, and alaost a fuota is on ona of ay 
cazds which Z baliava ona oi you all pzobably has> but ha 
aada a coaaant to tha aiiact oi Z'd suza lika to gat a piaoa 
oi that choppaz Z gat. And that's tha nant instanoa Z 
zaeall in Mhioh tha subjaot oi lathal aid caaa up. 

S Hhat is tha naxt instanea you zaeall T 
^ l Can you all axcusa aa iez a aoaantT Thank you. 
(Shozt zaeass. ] 
BY MX. rkYHAN' 



I 



UNCUSSIHED 



381 



KAIIE: 
1073 
1074 
107S 
1076 
1077 
1078 
1079 
1080 
1081 
1082 
1083 
10814 
1085 
1086 
1087 
1088 
1089 
1090 
1091 
1092 
1093 
1094 
1095 
1096 
1097 



HIR251020 



UNCUSSIFIED 



PAGE 45 



2 X think thertt was a pending quastlon. 

A Ytts. If I remembez correctly you asked me the next 
time after my phone conversation with Tom Clagett that 
lethal aid to the freedom fighters cane up. 

e Yes. 

A Hay I ask you a question? I suppose this can be on 
the record. You asked me a couple of moments ago the next 
tine it cane up and I described to you my conversation on 
the telephone with Ton Clagett. No specifics were discussed 
there, as you can see. Do you want me to try and recall 
every instance where even that passing a reference was nade? 

2 Yes, yes. Let's identify all of these Instances. 

A Okay, fine. I alnost assuredly will not be able to 
recall every single tine that it came up but I'll do ny 
best. 

S To the best of your recollection. 

A Yes. Well, about four days after that meeting 
Spitz told me to call O'Keil and to sort of again to 
encourage him to get his contribution to us with all 
possible alacrity and he said something to the effect of 
tell hin Green needs your help. Green being sort of I 
suppose you could call it a code nane for Oliver North. 
And — to tell him Green needs youz help; he's waiting for your 
help, which I did. And Hr . O'Nell Informed me he would be 
sending a check within the next day oz two. 



llLKSIFiE! 



382 



1098 
1099 
1 100 
1101 
1 102 
1103 
1 10U 
1 105 
1 106 
1 107 
1 108 
1 109 
1 1 10 
1111 
1 1 12 
1113 
1 1 1*4 
1115 
1 1 16 
1 1 17 
1 1 18 
1 1 19 
1 120 
1 121 
1122 




np 



HIR251020 IliVIIS nallSlI ll_&J PAGE U6 

2 Did you undsrstand this to b* a follow up to th« 
coanitnant to contxibuta «20,000 that you zaiaztad to 
eazliet ? 

k Yas, I did. 

2 What was tha naxt occasion aitaz this convazsation? 

A As I zamanbaz it, in lata Oacambaz oz aazly 
Januazy--lata Dacaabaz of '85 oz aazly Januazy of '86, for 
soma zaason sonabody askad ma what is this chack foz? And I 
said toys . And pzatty much avaz af taz that Z usad tha wozd 
''toys'' to zafaz to lathal assistanea. 

fi Lat's go back than a ninuta, Hz. Littladala, and 
clazify a coupla of things that you zafazzad to. You 
mentionad that Colonal Kozth was zafazzad to as Gzaan. Has 
that tha standazd pzocaduza in tha NEPL offlca to zafaz to 
him as Gzaan? 

A Caztainly in '85 it was. As '86 prograssad--and Dan 
and Hz. Channall would also occasionally zafaz to him as 
Ollia oz Colonal Kozth but ganarally tha pzactlca was to 
zafaz to him as Gzaan, although as '86 passad tha tazm 
''Gzaan'' baeama lass and lass common and wa would zafaz 
moza commonly to Colonal Kozth oz Ollia. 

fi Do you know how that pzactica ozlginatad? 
._ A I hava no idaa. 

fi Hho told you to zafaz to him as Gzaan? 

A I can't ba suza. Z zaally can't ba suza. 



llNCUSSIF![i) 



383 



NAME 

1133 
1124 
1125 
1 126 
1 127 
1128 
1129 
1130 
1131 
1132 
1 133 
1 13(4 
1 135 
1 136 
1 137 
1138 
1139 

imo 
imi 

11U2 
111*3 
11UI4 
IIUS 
1 1(t6 
1UI7 



HIR251020 



UNCLASSIF 



e All tight. You also teiatred to a toys account. 

A Mo. I didn't usa th« word ''account/'./ 

Q Wall, did you understand there was an account that 
was identified as the toys account? 

A No . I never understood there to be an actual 
specific account that was the toys account. 

fi By account, are you referring to a bank account? 

A Yes. Yes. 

2 Or are you referring to a ledger account? 

A I'b referring to a bank account. And I didn't know 
anything about ledger accounts unless you want to talk about 
the little book that we recorded checks coming in on a daily 
basis. Ledger sounds like an aoeounting^type term to ■• so 
I'lt trying to be careful. When it comes to the specif lo 
accounting ledgers, I had no idea what the devil was going 
on with them at that time. flueh later on I became a tiny 
bit more aware. 

fi Ate you familiar with basio bookkeeping principles? 

A Absolutely not. I'm terrible at math. I got 
matElad so that somebody oould keep my books straight. 
Shall I tail you what Z do knoM? 

ft Zn January of 1986, Mr. Llttledale. when you use 
th« phEms* "toys" m the context of military aid, what did 
you undazstand you were referring to? 

A nilitary aid. 



ONCUSSIRE 



384 



UNCIASSIR 



NAME: HIR251020 II | ^ y (.riU U I I I^V PAGE U8 
1118 Q And did you und«rstand that toys was some sort of 

1149 an identification for military aid? 

1150 A It was a name I gave to military aid. As I recall 

1151 it, I'm the one that came up with that phrase. 

1152 2 It's your recollection you were the originator of 

1 153 the phrase? 
115<4 A Yes. 

1155 2 Had you been aware that there was an account that 

1156 had been identified previously as the toys account that was 

1157 being used to identify funds collected for a Christmas fund 

1 158 for Mr . Calero? 

1159 A I knew that we had done some fund raising in 

1160 December of 1985 for a short period, just a couple of weeks 

1161 in December for the specific purpose of putting together 

1162 some small things that the freedom fighters could carry in 

1163 to their families. They are pretty strongly Catholic, a lot 
116(4 of the Kicaraguans, and Christmas, of course, is a fairly 

1165 important time to them. It was my understanding that we 

1166 raised some money in December to enable them to bring some 

1167 small things home at Christmas time. I was never aware that 

1168 those monies had specifically been referred to as toys or 

1169 tfiat an account had been set up with the name ''toys'' for 

y 

1170 tlxsse funds to be used for. 

1171 ny recollection is that that story of what toys was 

1172 was something that developed after Jane HcLarughlin went 



I 



ONCUSSIRED 



385 



UNCLASSIFIED 



H»HE: HIR251020 ** ■ * W^" -^^ ^^ ■ ■ -— — - fkGZ U9 

1173 public. that's ny recollaction oi tha iunds w* raised in 

117>4 D*cenb«r oi 1985 bsing us«d--b«ing called ''toys''. 

1175 2 Youz Zftcollaction is you az« tha pazson who 

1176 originated the phzasa toys? 

1177 A That's correct. 

1178 fi Why did you select the word toys to refer to 

1179 military or lethal equipment? 

1180 A Well, because I like guns and there's an old saying 

1181 little boys don't grow up, they just got more expensive 

1182 toys. And I don't reier to the guns I own as toys, but in a 

1183 fashion. They aze what Z use for pleasure. I get my 

1 18U enjoyment in my leisure time from shooting and so It seemed 

1185 an appropriate name. 

1186 I mean a common phrase oi mine when people ask me 

1187 what I do in the National Guard is to say I get to play with 

1188 all kinds of good toys, N-16s, n-203 grenade launchers, H-11 

1189 Bradley personnel carriers, all kinds of fun toys. So it 

1190 was sort of natural for me to call money raised for lethal 

1191 assistance money for toys. 

1192 fi And you say In January, 1986, you remember a 

1193 specific discussion — 

119'( .' A December or January of '86 somebody asking me what 

1195 la. this check for and my saying toys. 

1196 fi And you don't recall who that person was? 

1197 A No, no. 



UNCUSSIFIED 



386 



NAME : 
1 198 
1 199 
1200 
120 1 
1202 
1203 
1204 
1205 
1206 
1207 
1208 
1209 
1210 
1211 
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1213 
1214 
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1216 
1217 
1218 
1219 
1220 
1221 
1222 



DiiiiLASSIritiJ 



HIR251020 -»■-■- w—.—. w .- ... ' p^Qj 5Q 

2 After that occasion did you hav« a nui»b«r of othar 
discussions where you told other persons that toys meant 
contributions for military equipment? 

A I think Jane KcL/^ughlin may at one point have asked 
me what toys meant and I may have said lethal assistance. 
But I'm not absolutely positive and I don't recall anybody 
asking me what toys meant. 

2 Did you ever tell Steve McMahon that toys was a 
name for lethal aid? 

A I don't recall my ever telling him so. I think I 
recall in late December or early January, late December '85 
or early January '86 Steve HcHahon asking Spitz what it was 
for and Spitz saying it's for arms and ammunition fox the 
freedom fighters. That's my recollection. 

2 You recall McHahon at this time asking Channell 
what toys represented? 

A Yes. That's my recollection. 

2 How was he aware of the phrase ''toys''? 

A Well, he being the accountant, when a check came in 
it was Xeroxed. 

2 Right. 

A Two copies actually, I think. And it would be 
stamped with the date it came in, the name of the fund 
raiser who had raised the money would be written on each 
Xerox and the purpose for the money would be written on it. 



UNCIASSI 



387 



UNCLASSIFIED 



KAHE: HIK251020 U I 1 ULiflUU 1 1 ILU PACE 51 



1223 
122>4 
1225 
1226 
1227 
1228 
1229 
1230 
1231 
1232 
1233 
123U 
1235 
1236 
1237 
1238 
1239 
12U0 
12(41 
12t«2 
12U3 
12I4M 
12U5 
12M6 
1247 



One of tha copies ojE the checks would go to McHahon so that 
he could enter it into the accounting ledgers and all that 
kind of good stuff, and as I recall it. he saw a copy of a 
check with toys written on it and went to Spitz and after 
seeing it a couple of times said Spitz> what is toys? 

S So on that occasion is it your reoolleotion that 
you had written toys on the check? 

A Either I had written--not on the check but on the 
XeroK of it. 

S On the copy of the check. 

A Yes . Either I had written it on there or the 
person that had asked ne what is this check for and I had 
said toys, had written it on there. Probably wasn't mm 
actually writing it on the copy of the check. It was 
probably the person that asked ae what's the check for that 
wrote it on the copy of the check. 

8 And then you told tfr . Channell that you were using 
toys as a code name or synony* for contributions? 

A Ko. I don't recall ever telling him that I was 
using that phrase. 

e Well, you had a recollection of Hr . HcHahon asking 
nr~. Channell what does toys stand for and Hr . Channell 
enplaining to Hr . HcHahon that it stood for or it was a 
contribution for military equipment. 

A Kight, right. 



UNCLASSIFIED 



388 



12U8 
12M9 
1250 
1251 
1252 
1253 
1254 
1255 
1256 
1257 
1258 
1259 
1260 
1261 
1262 
1263 
1264 
1265 
1266 
1267 
1268 
1269 
1270 
1271 
1272 




flED .... 



HIK251020 IJIlUkllWII ••mU^ pkGZ 52 

fi Do you know hou Mr. Channall had laarned what this 
word stood for? 

A Ko > I don't know how. I would assuaa that h« was 
able to deduce what it was fox or judging by who the check 
came from he was able to deduce. Certainly if he sees--he 
solicited Ton Clagett, right? He brought Tom Clagett over 
to see Ollie Korth. He did the solicitation of Tom Clagett. 
He sees toys written on Tom Clagett's *20,000 check. Okay 
now, I know what it is. That's the way I remember it. I 
don't have a concrete explanation as to why he would know 
what toys meant. 

fi And you don't recall explaining it to Hr . Channell? 

A No, I don't. 

fi But you do recall hearing Hx . Channell explain to 
Mr. ncllahon that toys meant a contribution for military 
equipment? 

A Yes, yes. I know that sounds kind of strange, but 
it's the way I remember It. 

L 

e And you recall telling Jane HoLvughlln that 
contributions for military eciulpment were to be identified 
by the oode name toys? 

.' A Z don't specifically recall telling hex that. It's 
la. my h«md that Z probably did. Tha zaason that Z would 
think that I pxobably did Is because she wasn't texxlbly 
close with Spitz ox Cliff and she talkad to me fulte a bit 



UNCLASSIFIED 



389 



UNCLASSIFi 



PAGE 53 



NAME: HIR251020 

1273 regarding fund raising and projacts and stuii lik« that. 

127*4 And so ii she ever asked, she almost assuredly would have 

1275 asked ne In that ue talked quite a bit. So I have this 

1276 ieeling that I probably did, but I don't specifically recall 

1277 her asking ne one day and my telling her. 

1278 2 All right. 

1279 KoH by this point in January of 1986 did you 

1280 believe that Mr. Channell had become confident enough with 

1281 you that he could discuss openly with you solicitation of 

1282 contributions for military aid? 

1283 A Hell, you can never tell how much Spitz trusts you 
128U but I feel comfortable in saying he trusted me more than he 

1285 had two months earlier. 

1286 Q Certainly by January, 1986, according to youz 

1287 recollection, he was comfortal>le enough with you that ha 

1288 would explain to Hr . Nctlahon in youz presence that a 

1289 reference to toys meant a reference to contributions for 

1290 military aid? 

129 1 A I don't recall — at the time when I recall him 

1292 explaining that to He. HoHahon Z don't recall whether Z was 

1293 actually in the room or just outside the door. Z don't know 
129M i.£ you have seen or seen a layout of the offices that Mr. 

1295 Channell 's organization were housed in at the time, but the 

1296 top floor of it was an office like this which was where Hz. 

1297 Channell's desk was and wheze Z also wozked izom. Then 



UNCLASS! 



390 



KAnc = 

1298 
1299 
1300 
1301 
1302 
1303 
130U 
1305 
1306 
1307 
1308 
1309 
1310 
131 1 
1312 
1313 
13m 
1315 
1316 
1317 
1318 
1319 
1320 
1321 
1322 




0!n 



lEfl 



HIR2S1020 UllUL nililli ii SI PAGE SU 
there was a large sort of comnon public area out here where 
his secretary and the files were housed, and I recall that 
it was in the evening in that it was dark outside and Spitz 
was in the office later than was usual for hin . And Mr. 
Mcriahon came from where accounting was housed, which was 
over here, came through-- 

e Mr. Littledale, you'll have to recognize in giving 
your answer that the reporter cannot reflect any indications 
you are making with your hand. 

A Mr. HcHahon went into Hr . Channell's office and 
asked him that and I don't recall whether I was in the room 
at my desk or whether I was just outside the room in th* 
public area and able to overhear it. 

e All right. Than returning to the discussions that 
you participated in about contributions for lethal 
equipment, what was the next conversation that you recall? 

A I can't swear this was the next time but the next 
time I remember was towards the end of January I was making 
a trip out to California and I had arranged or was arranging 
to see a gentleman in California, name of Hel Salwasser, and 
Hx . Salwasser Is a wonderful gentleman, very strong anti- 
communist and felt very strongly about the Kloaraguan issue 
and it was my belief that he would be Interested in . 
providing support for lethal equipment. As a matter of faot 
I had had a conversation with him on that subject in 



UNCUSSIF 



d li^y 



391 



HJR251020 



UNCUSSI 



PAGE 55 



Novembar but why don't I gat back to that saalng as how I'm 
in tha nlddla of this. 

And I called Spitz on tha phona and said gaa whiz. 
I'm going to saa Hal. I think I'll ask him to giva us 
«20,000 for a nissila . This was on tha phona, this 
conversation. Mt . Channall said somathing along tha lines 
that would be wonderful, that would be fabulous if you could 
get hin to give 420,000. Saa if you can get him to give 
two. That's «(<(«, 000. That was that conversation. 

To go back to what I mentioned earlier, in early 
November Ilr . Channell had noted that on one of my cards 
regarding Hr . Salwasser I had stated my belief that he would 
give large sums of money for tha purchase of lethal 
assistance and Mr. Channell had instructed me to solicit him 
for the purchase of one or more suf aca-to-air missiles or 
for the purchase of radio equipment. And I did so. I 
solicited him for that and he, as a result of that 
solicitation, gave *5,000. 

8 This was for radio equipment? 

A Hell. no. It's hard to say. I described both 
surface-to-air missiles to the gentleman on the phone, also 
described the radio equipment and described the cost of 
e&ph. and ha interrupted me with something along the lines 
of well gee whiz. I'm not Bunker Hunt. I don't have that 
kind of money, but I'll give you 45000 . I said thank you 



mmm 



392 




NAHZ: HIR251020 |i||||'l A &" l^ § 3 Q T il PAGE 56 

13148 veiy much. 



DNCUSSIFe 



393 



KAHE: 
13U9 
1350 
1351 
1352 
1353 
135M 
1355 
1356 
1357 
1358 
1359 
1360 
1361 
1362 
1363 
136M 
1365 
1366 
1367 
1368 
1369 
1370 
1371 
1372 
1373 



HIR251020 
RPTS CAKTOR 
DCHN PARKER 



ONCUSSlflEO 



(t«:30 p. a. ] 

e And than you w*t* xaturnlng to January, you wars 
traveling to California to aaat with hln in January, and 
what did you say to hin in January? 

A You maan whan I sat with hin? 

S Yas. 

A It was kind oi iunny. Z was going to California to 
saa anothar gantlaman as wall ragarding sosathing alsa, not 
lathal assistanoa, and Z was going to, whlla in California, 
saa Hr. Salwassar, as wall, and as things woxkad out, Z 
wasn't abla to »•• Hr . Salwassar bacausa ha was at tha ti*a 
in Pannsylvania on businass, and was datainad thara and was 
unabla to saat with aa in California. 

Aftar Z laarnad this a day or so latar whila still 
in California, ha oallad Mr. Salwassar in Pannsylvania and 
spoka with hia in soaa datail about tha naad for surfaoa-to^ 
air Bissilas, and statad our dasira that ha should giva us 
tha aonay for tha purchasa prioa of two of thaa, to which ha 
agraad, and Z furthar allowad as how Z would lika to aaat, 
ffy froB California back up to Pannsylvania, aaat with hia 
in. Pannsylvania to dasoxiba it in soaawhat aora datail and 
in parson, which ha agraad to. 

Z daseribad tha situation to hia, dasoxibad all of 



IINMSIREl) 



394 



KkHEi 
1374 
1375 
1376 
1377 
1378 
1379 
1380 
1381 
. 1382 
1383 
138'4 
1385 
1386 
1387 
1388 
1389 
1390 
1391 
1392 
1393 
139i| 
1395 
1396 
1397 
1398 



HIR251020 W--W—.WW-- •^■^ ?KSt 58 

tha ireadon ilghtars' naads iron boots to AK'3, amnunition 
for tha abova> and suxf aca^to<f air mlssllas. and again statad 
out daslra that ha should give us tha puxchasa ptica oi two, 
to which ha said that ha £alt ha could do that, and as soon 
as ha retutnad to California ha would ohack tha books and 
tall us just axactly how far ha could go to halp us. 

fi Did you hava furthar conversations with him about 
this proposed contribution? 

X Several. 

fi And did he make a contribution? 

A He did eventually. It took three aonths . but he 
did eventually itake the contribution of *20,000. 

Q Has that to purchase one missile? 

A That is my belief. I mean when I called him fairly 
regularly during tha course of two to three months, and kept 
stressing the immediate need for his help and support, and 
he did eventually send a check for *20,000. 

I did not upon receiving the check call him up and 
say now, Hr . Salwasser, is this for one missile. 

e Up to this point, Hr. Littledale, I just want to 
summarize for the record what you understood had been 
oontrlbutions by your group of contributors for lethal aid. 
Hhmt was the first one? 

A The first one received or the first one solicited? 

fi Say the first one solicited. 



UNCLASSIRE 



395 



KANE: 
1399 
1*400 
1101 
11*02 
1403 
lUOU 
11*05 
1U06 
m07 
1(408 
1(409 
1U10 

1(41 1 
1(412 

1(*13 
1(414 
1(415 
1(416 
1(417 
1(418 

mi9 

1>420 
1(421 
1(422 
m23 



HIR251020 



UNCLASSIFIED 



PAGE 59 



A Tom Clagtttt. 

fi And that «nded up In a contribution oi how auch? 

A «20,000. 

fi And tha naxt solicited? 

A Bill O'Nail on tha Sana day as Ton Clagatt. 

S And that again was *20.000? 

A That's corzact. 

2 And aitaz that? 

A Aitez that--no wait. Actually tha iizst ona may 
have been •5,000 izom Hal Salwasser. That pzobably was as a 
mattez oi iact. Again, if Z had my cards in fzont of me> I 
could be moze helpful as to specifically which was first, 
but X believe the first was ^,000 fzom Hal Salwasser. Then 
the neKt one solicited would be Tom Clagett and Bill O'Keil, 
both on the same day, the next one after that being Hel 
Salwasser . 

fi Which eventually led to anothez •20.000. 

A Twenty thousand dollaz contzibution. 

2 HozKing fozwazd, I guess we were in January of 
1986. 

A Late January, early February. 

2 And your conversations with Hr . Salwasser--f ollowing 
those conversations, what was the next discussion you had 
that involved lethal aid? 

A I am not absolutely positive this was the next time 



UNOLASSIF! 



396 



c^snr 



kiClASSifl 



NAME: HIR251020 1 1 lllll_niJU 1 1 %lmV PAGE 60 

1i42>4 the subject came up, but I think It was the next tiae of any 

1U25 substance that it came up. I am quite sure that passing 

1ii26 references were made, but I don't remember them. The next 

1427 time that I remember was I believe in tpril of 1986. I had 

m28 solicited a Mrs. Zalma Giddens on the telephone for the 

11429 purchase price of one Haule Aircraft, which was to be used 

11430 for immediate evacuation and resupply purposes, and also for 
1U31 intelligence gathering, and she had agreed to make the 

1U32 contribution, and was going to come up to Washington with 

1t433 her husband to talk briefly on the subject with Colonel 

14314 Morth. 

1>435 And I said to Mr. Conrad, I guess about a day or so 

1M36 before that meeting took place. I said something along the 

11437 lines of, ''Gee, Dan, wouldn't it be great if on top of 

IMSS getting 465,000 for this aircraft we could get maybe another 

1>439 420,000 or so for a missile? How do I get the subject of 

1<mO missiles to come up in conversation while the meeting 

mm between Mr. Giddens, Hzs. Giddens and another gentleman who 

1(4<42 was coming there,'' whose name was Imperatore. ''How do I 

1(4<43 get it to come up in conversation? ' ' 

1i4Ut4 And he said, "Hell, while we are all sitting 

1<4t45 there, you can say to Colonel North something along the 

m>i6 lines of, 'Gee, Colonel North, what is the biggest pzoblea 

1i4'47 the freedom fighters have?' And he will say the helicopters 

1*4>48 that the Sandinistas have, and you can then say, 'Well, what 



SIFI 



397 



NAHE: 

1UU9 

mso 

1451 
11*52 
1>t53 
ItiSU 
1U5S 
1456 
1457 
1458 
1459 
1460 
1461 
1462 
1463 
1464 
1465 
1466 
1467 
1468 
1469 
1470 
147 1 
1472 
1473 



llNCUSSIflE! 



HIR251020 IIIVIil Malllll |L.fi^ PAGE 61 
can ue do about that?' And he will than discuss suziactt^to;; 
aiz missiles.'' And that convezsatlon took place. 

S Appzoximately when was that? 

A ApproMlnately April oi 1986, and I renember two 
other instances where the subject oi lethal aid cane up. 

2 Between January and April? 

A It may have been probably earlier than January. I 
don't recall at all. 

e Let's just iinish the questioning about this April 
conversation. This meeting with Colonel Korth was at his 
office? 

A Mo. It took place at the H«y|-Adaas Hotel. 

C And was the result of this meeting that Hrs . 
Giddens made an additional contribution to purchase a 
missile ? 

A No. it was not. 

S It was not. 

A No. 

fi So it was unsuccessful. 

A Correct. 

fi But she did make the contribution to purchase a 
Haule aircraft? 

^ A She made a contribution of ^32, 500. She had brought 
this other chap. Imperatore, along on the theory that he 
would pay half of it, and she would pay half it. However, I 



398 



HAHE: 
1l47t* 
1U75 
1476 
1i«77 
1478 
1479 
1480 
1481 
1482 
1483 
1484 
1485 
1486 
1487 
1488 
1489 
1490 
1491 
1492 
1493 
1494 
1495 
1496 
1497 
1498 



HIR251020 



UNCLASSIFIED 



PAGE 62 



think w« scazad Kt . Imp«ratore considerably with the 
discussion at the table and what not, and he did not make a 
contribution . 

e You were going to go back to relate a couple of 
additional conversations. 

A Yes. Sonetine, Z think it was probably Decenber 
1985, I called a chap named Jim Landrum, and my recollection 
is that I didn't get really specific with reference to 
missiles. As I recall it, I explained the danger that the 
Soviet-supplied helicopters posed to the freedom fighters, 
and explained that we were putting together some money to 
provide the means for the freedom fighters to protect 
themselves from these helicopters, and would he please help 
us . 

And I believe he made a contribution of «500 or 
«1J000 as a result of that. I also called at the instruction 
of rtr . Channel a gentleman named of Somers . I think his 
name was Somers. Again, I would have to see some of my 
records you all have to be sure, but I believe his name was 
Somers and he was somewhere in the Dallas area, and Hr . 
Channel had met him and instructed me to call him, and the 
fr'eedom fighters had just succeeded in shooting down one of 
th« Soviet^supplied helicopters, and Mr. Channel instructed 
me to call him and say something like, ''Hell, did you know? 
Isn't it wonderful? You see how effective we are being. He 



■»?-ry 




\jfii 11 



399 



HAHE: 

m99 

1500 
1501 
1502 
1503 
150U 
1505 
1506 
1507 
1508 
1509 
1510 
1511 
1512 
1513 
1514 
1515 
1516 
1517 
1518 
1519 
1520 
1521 
1522 
1523 



HIK251020 



ONCUSSIRED 



PACE 63 



need you to help us.'' 

And I said soaething along those lines, and he 
said, ''Oh. well, yes. Say hi to Spitz for me. I have been 
thinking about this for a while now, and I had already 
decided to give you a thousand dollars. Hhere do I send 
it?' • 

And also in, I believe late January of 1986, there 
had been some talk floating around the office that we were 
going to receive a shopping list from Colonel Korth, and I 
called, while Mr. Channel was in the room, Mr. Landrum from 
the Dallas area, and he is also from Dallas, both the guy 
who--I think his name is Somers, and Hr . Landrum both from 
the Dallas area, and Z called Hr . Landrum and explained that 
we had a shopping list sent to us from the Hhite House, and 
that we needed him to provide us with «10,000, and could I, 
when we received the shopping list, come and see him and 
count on him for support of about 10,000. And he allowed as 
how he could probably do that. 

However, we never got the shopping list, and so 
that meeting never took place. 

fi In the chronology we were up to the discussion 
between Colonel North and Hrs . Giddens in April of 1986. 
Hhat was the next conversation you recall involving lethal 
aid? 

A I may remember some more, but the next one that has 



wukssro 



400 



MAKE: 

1S2M 
1525 
1526 
1527 
1528 
1529 
1530 
1531 
1532 
1533 
15314 
1535 
1536 
1537 
1538 
1539 
1SU0 

ism 

15142 
15M3 
ISUU 
15U5 
15*46 
15U7 
ISMS 



HIR251020 



yNCUSSIFIM 



PAGE 6U 



coma to ny mind uas in July, I bali*v«, o± 1986. I was 
callin9--ua w«ra raising soma monay ioc food for tha iraadom 
fighters, and X called a gantlaaan named of Hercz, who is 
from, I believe, Michigan. 

Q How do you spell that? 

A H-E-R-C-Z, and in the course of conversation with 
him, ha said, ''Hell, gee whiz, I understand this is some 
group you can sand money to to buy guns for the freedom 
fighters." And I said, "Hell, gee whiz, I know a little 
bit about that. Perhaps wa can get together at some point 
and talk privately about it. If you want to do that, there 
is somebody here in Hashlngton you should meet.'* And he 
said, ''Gee whiz, that would be a great idea.'* 

Than X continued my solicitation for money fox 
food, and ha did eventually send a check for «501 to buy 
food for the freedom fighters and nothing further on tha 
subject of lethal aid ever came up with him. 

e Hhat was tha next convazsatlon that involved lethal 
aid? 

A This Is not an answer to that, but to a much 
earlier question you asked, topios that we had raised money 
for — lethal aid, public education, etcetera, Haule aircraft. 
Tbera was one other which was air fields to be built in 
Costa Rica. 

fi All right. 



mmm 



401 



UNClASSiFIED 



H\nZ- HIX251020 U I 1 UlarlwU i I ll«l# PAGE 65 



1549 
1550 
1551 
1552 
1553 
155M 
1555 
1556 
1557 
1558 
1559 
1560 
1561 
1562 
1563 
15614 
1565 
1566 
1567 
1568 
1569 
1570 
1571 
1572 
1573 



A And whan you uant to ask ma a quastion about that, 
just hollar/ but that just poppad Into my haad, so I thought 
I should tall you. 

Tha naxt situation aitax July in which lathal aid 
cane up, the next one that I recall was I believe in 
September. It must have been October of 1986. Mr. 
Salwasser was again in Pennsylvania, and with Spitz' 
approval I talked to him about coming hare to Washington to 
meet with Colonel North on tha subject of these airfields, 
and the night before that meeting was to take place, Mr. 
Channel instructed ma to call Colonel North and sort of give 
him a brief idea of what we wanted him to talk about whan ha 
talked with Hr . Salwasser, and I called Colonel North's 
office . 

Colonel North was otherwise occupied, and I spoke 
to his secretary. Fawn Hall, and Pawn said — she answered the 
phone. I said, ''May I speak to Colonel North?'' She asked 
ma who I was. I said who I was. She said, ''Gee, he is 
tied up.'' Can I leave a massage, and I said, ''Oh, well, I 
wanted to talk to him about tha meeting with Hr. Salwasser 
tomorrow, and what wa intend to solicit him for.'' And she 
said, as I recall it — I mean they are tha words I recall her 
u&Xng. Z can't be sura those ware tha words she used. I 
recall her saying, ''Oh, wall, how much should he ask for?'' 

And I said, "Hell, what we want him to talk about. 



w&ism 



402 



KAnE = 
1S7U 
1S7S 
1576 
1577 
1578 
1579 
1580 
1581 
1582 
1583 
158i4 
1585 
1586 
1587 
1588 
1589 
1590 
1591 
1592 
1593 
159^ 
1595 
1596 
1597 
1598 



HIR251020 UnbLHvlOll IL^ p^GE 66 

we were initially going to ask Hx . Salwassaz ior «100,000. 
We now ate thinking about asking him ioz «250,000, and we 
want him to talk about the radar sites around Nicaragua and 
how the freedom fighters are going to use small arms and 
demolitions to destroy them, and how this airfield that is 
being built in Costa Rica is going to be used to fly 
supplies to the freedom fighters inside the country, and how 
the freedom fighters are going to destroy the radar sites so 
the planes coming in won't be detected, and that was what we 
want to do . ' ' 

And she said, ''Okay, good. Thank you.'' 

2 Did Hz. Salwasser meet with Colonel North the next 
day? 

k 

e 

A 

A 

things . 

S Did he ask for money? 

A He never asked for any money, no. He never 

specifically asked anybody to give any money in my presence. 

2 Did he talk about the need for missiles? 

A No, he did not. 

2 Did he talk about the need to construct an air^ 



He did. 

Did you attend? 

I did. 

What did Colonel North say? 

Oh, he talked about a whole doggone bunch of 



wmm 



403 



HARE: 
1599 
1600 
1601 
1602 
1603 
16014 
1605 
1606 
1607 
1608 
1609 
1610 
161 1 
1612 
1613 
161(4 
1615 
1616 
1617 
1618 
1619 
1620 
1621 
1622 
1623 



HIR251020 



yNWSsra 



PAGE 67 



iield in Costa Rica? 

A He did. 

fi Did ha talk about any oth«r l*thal aquipmant oz tha 
need ior any lethal equipment other than missiles? 

A He didn't talk about missiles at all in that 
conversation. He may have briefly mentioned some oi the 
types of small arms that the freedom fighters used, but the 
specific think ha was talking about tha freedom fighters 
needing now was an air field in Costa Rica. 

Q Did Mr. Salwasser make a contribution after this 
meeting? 

A He did. 

fi How much? 

A *20,000. 

fi And did you understand that was for tha 
construction of tha airfield? 

A I did. 

fi Staying on tha subject of lethal equipment, do you 
recall any discussions about raising funds for lethal 
equipment after these conversations you have just described 
In September or October in 1986? 

A Not after then. I know that at soma point Z 
briefly discussed the subject with Jana HcLjqriighlln, because 
she had soma contributor coming in to town to sea Colonel 



UNCLASSIFIED 



404 



UNCLASSIFIED 



KAMI: HIR251020 vllUL»nUwll llail ^'^''^ ^® 

162U fi Is that Mr. Hooper/ Bruc* Hooper? 

1625 k Yas> I beJliev* It was i and I know sha askad n* a 

1626 coupla oi questions about solicitations taking place 

1627 directly after sonebody had had a private meeting uith 

1628 Colonel Morth. and that related to non-|humanitarian items. 

1629 and I talked to her a little bit about it, and told her how 

1630 I handled things. 

1631 fi So again to summarize, Kr . Littledale, am I correct 

1632 that the contributions that you solicited that you 

1633 understand directly involved funds for lethal aid were 

1634 *S.000 from Hr . Salwasser in the fall of 1985, «20,000 from 

1635 Mr. O'Neil in early 1986, and another 420,000 from Hz. 

1636 Salwasser later in 1986, and possibly a small «mount oi *(00 

1637 to UOOO dollars from Hr . Landrum and Hr . Somezs. 

y 

1638 i A thousand dollars from Somers. I know the 

1639 specific amount with him. With specific regard to lethal 
16<(0 aid, those are the only ones that I recall right now. He 
16>(1 should note, however, that solicitation oi Hz. O'Neil and 
16U2 Hr. Clagett took place in November of 1985, that Hr. 

16M3 O'Keil's contribution did oome in in late November or early 

16U>i December oi 1985, but that Hz. Clagett's oontzlbutiens did 

16itS not come in until January oi 1986. 

16(46 ^ fi Here all of these oontzibutlons to the National 

16>(7 Endowment ioz the Preservation oi Liberty? 

16M8 A Yes, they were. 



ONCUSSIFIEO 



405 



:i\ 



iiii AC'O 



1 



16U9 
1650 
1651 
1652 
1653 
165>4 
1655 
1656 
1657 
1658 
1659 
1660 
1661 
1662 
1663 
166U 
1665 
1666 
1667 
1668 
1669 
1670 
1671 
1672 
1673 




HIR251020 UI1U1_||UWII IftaV PAGE 69 

fi Did you hava discussions with any oi thss* 
individuals about th« contributions baing tax daductibla? 

A Probably. 

e Was it your understanding that tha contributions 
would ba tax deductible? 

A Yes. I can't swear that I aver say sonathing to 
the eiiact oi give me money for weapons, it is tax 
deductible. You see, something you should keep in mind in 
the fund-raising aspect of it is that if somebody gives you 
one or two contributions to an organization, the Kational 
Endowment for the Preservation of Liberty, and ha has been 
told those contributions are tax deductible, when you make 
future solicitations you don't naad to say this contribution 
is tax deductible. 

The person in question will pretty much assume it. 

Q Let me turn to two other subjects quickly. You 
mentioned that one of the objectives of fund-raising was to 
raise funds for Maule aircraft. 

A Yes. 

2 Old you raise contributions for the purchase of 
Haule aircraft? 

A Yes, I did. 

B Hhioh ones? 

A The ^2,500 from Hrs . Glddent . 

& Any others? 



«\AS«« 



406 



uNCUSsra 



K»HE: HIR251020 V ■ « W*"" ■■» "^ " ?XGt 70 



16714 
167S 
1676 
1677 
1678 
1679 
1680 
1681 
1682 
1683 
168U 
1685 
1686 
1687 
1688 
1689 
1690 
1691 
1692 
1693 
16914 
1695 
1696 
1697 
1698 



A Kon* that I recall. It jLs easy to xamttmbaz ths 
large contributions. It is not easy to reneitber small ones. 

Q And you mentioned raising iunds iox construction of 
air fields in Costa Rica? 

A Correct. 

Q What iunds did you raise for that purpose? 

A Twenty thousand dollars from Mel Saluasser, and I 
don't recall receiving any other contributions for that 
purpose, but I do know that Mr. O'Neil, in response to a 
solicitation made by Spitz, made a contribution in the 
amount of *85,000 that I believe was for the purchase of a 
Maula aircraft, but that was not by solicitation, 
nz . Channel made that solicitation. 

HR. TOURISM: nay I speak with my client a moment? 
BY HR. fRYHAK: 

fi Other than the conversation with Mr. Salwasser, are 
you aware of Colonel North discussing the need for funds to 
construct aiij^ields in Costa Rica with any other 
individuals? 

A Yes. I was instructed by Hz. Channel to call Hz. 
O'Neil in the fall of 1986, and ask him to give us soma 
money foz that puzpose . I did so. Hz. O'Neil essentially 
smid> ''Hell, I have got the money and I could give it to 
you.'' But, gee whiz, by now of couzse the House had passed 
in June of 1986 a bill authozizing assistance to the freedom 



UHOUSSlfllO 



407 



NAME! 

1699 
1700 
1701 
1702 
1703 
1704 
170S 
1706 
1707 
1708 
1709 
1710 
171 1 
1712 
1713 
17114 
171S 
1716 
1717 
1718 
1719 
1720 
1721 
1722 
1723 



UNCLASSIFIED 



HIX251020 lllllll niliSii il II PAGE 71 

fighters, both l«thal and nonflathal, and ha ialt that, gaa 
whiz, mayba it hasn't gottan to tha Prasldant's daak to ba 
signed yet, but pzivata individuals shouldn't ba footing tha 
bill for this anymore. 

It is the government's business, now that they have 
gone and passed the blasted legislation, and tha 
conversation sort of ended there after I discussed this 
matter with him in some detail as to why it needed to be 
funded by private individuals. I reported this result to 
Mr. Channel. Mr. Channel instructed me to call Hr . O'Keil 
back and ask Mr. O'Neil if he could receive a phone call on 
the subject from Colonel North tha next day. 

I did so, and Hr . O'Keil said. ''Certainly." I 
reported that back to Hr . Channel. Hr. Channel called me 
the next day and said. ''Call Bill O'Neil and ask him if ha 
can call Colonel North. Colonel North can't make any 
outgoing calls right now.'' 

I did so and Hr . O'Neil agreed that ha would make 
the phone call to Colonel North, and it was my understanding 
that they did eventually speak on tha telephone together on 
the subject of air^^ields in Costa Rica, and that they had 
tKe conversation, but that no contribution took place as a 
roult of it. 

e Do you know Bill O'Boyla? 

A I do. Well, again, I wouldn't say I know him. but 



WUSSiFiEO 



408 



UNCIASSIHED 



KAIfZ' HZR251020 ^llVknwVII f*mV rxaz 72 

172M Z havA Bttt hi*. 

1725 e Did you hav* any discussions with Hx. O'Boyla about 

1726 a contribution iox nllltaxy aid? 

1727 & y«s. I did. Thank you ior xaalndlng ■• . 

1728 fi Whan was that convarsatlon? 

1729 A It was whlla wa waxa still In oux old oiiloas up 

1730 hara on Caplt&l Rill. 

1731 e Has it so»a tlaa in tha spxing oi 1986? 

1732 A It would hava althax baan — no, it had to ba aitax — I 

1733 would say. yas> tha spxing oi 1986. 

173*1 fi Hould you dasoxlba what you xacall about tha 

1735 eonvaxsatlon with Hx. O'Boyla? 

1736 A Caxtalnly. Ha again had a maating in tha old 

1737 aKacutlva of ilea ^ulldlng in which Colonal North addxassad a 

1738 gxoup oi contxlbutors and prospaotiva contributors, and I 

1739 did not hava any contributors or prospaotiva contributors at 
MHO that avant. but Ks. mrifiiiTrii^itd had iour. Four is an awiul 
17ii1 lot for ona parson to handla. so I sort oi aitar wa zatuxnad 
17*t2 to tha Hay-Adaas iroB tha old axacutiva of flea building. I 
17U3 sort of attachad aysalf to Hr. O'Boyla whlla wa wara having 
17U4 cocktails, and talkad to hla about Nicaragua, and what did 
17M5 h£ think of Colonal North's prasantation. 

171*6 ^ And ha said, or said soaathing to tha affaet, 

1747 "Hall. gaa. this is taxxibla. Ha xaally naad to do 

17118 soaathing about It. Hhat can I do to halp?" And I said to 



UNCUSSIFIED 



409 



UNClliSSinED 



HknZ- HIR2S1020 VI'W*»"»^^'" P»GE 73 



17149 
1750 
1751 
1752 
1753 
1754 
1755 
1756 
1757 
1758 
1759 
1760 
1761 
1762 
1763 
176U 
1765 
1766 
1767 
1768 
1769 
1770 
1771 
1772 



him somathlng along th« llnss oi,'''H*ll, th« biggast 
pzoblaa tha fzaadoa ilghtazi hava right now la tha HIND 
hallooptazs> attack haliooptazs. Thay hava taally no naans 
Hhatsoavaz o£ daiandlng thaasalvas against thaa. You oan 
fiza small arms against tham and It has no afiaot, and wa 
raally naad to pzovlda tham with tha maans o£ daiandlng 
thamsalvas against thasa hallcoptars. And li you would Ilka 
to halp us with a grant oi, say, %B^o •SO, 000, than what I 
raally naad to do Is arranga for you to maat tomorrow 
prlvataly with Colonal North." 

And ha allowad as how ha would ba dallghtad to 
halp, and aspaclally dallghtad to saa Colonal North again In 
tha morning prlvataly, so I raportad this to tlz . Channal, 
who Immadlataly arrangad ioz fir. O'Boyla to maat with 
Colonal North tha naxt morning, and It Is my undarstandlng 
that nr. Channal aooompanlad Nr . O'Boyla to tha old 
axaoutlva oiiioa building tha naxt morning ior a maatlng 
with Colonal North. 

It is also my undarstandlng, although again I 
wasn't thara, so I don't know, that tha subjaot that oama up 
at that point that Colonal North talkad about at that point 
w<k Naula aircraft, and that Nr. O'Boyla subsaquantly gava a 
oqntrlbution oi 4130,000 for tha purchasa oi two Haula 
airorait. 



untmsffl 



410 



KinZ: 

1773 
17711 
1775 
1776 
1777 
1778 
1779 
1780 
1781 
1782 
1783 
17814 
1785 
1786 
1787 
1788 
1789 
1790 
1791 
1792 
1793 
179U 
1795 
1796 
1797 



HIR251020 



RPTS nCGZNN 



DCHN SPRkOLING 



(5 = 00 p.m. ] 



UNCLASSIFIED 



Hh*n you say It's youz undazstandlng. what Is th« 
basis ioz youz undazstandlng? 

A Wall, I knaw that ha cama — ha saw Hz. — Colonal Kozth 
in tha mozning and than I guass It Mas tha naxt day ha 
assantially just appaazad in ouz oiilcas and gava Spitz a 
chack ioz 4130,000 uhich--and than subsaquantly had dzinks oz 
dinnaz oz soaathing lika that with Hz. Channall and In tha 
couzsa of convazsations that took plaoa aitaz Kovaabaz oi 
1986 whan all oi this was gatting Into tha pzass and what 
not, Hz. Channall and I dlscussad what Individual paopla had 
baan solicitad foz bacausa wa waza tzylng to zaconstzuct who 
had bean solicitad foz lathal aid and who had baan solicitad 
foz othaz things, and ha said wall. O'Boyla gava 4130,000. 
That's twlca 65, thazafoza that aust hava baan foz two Haula 
aizczaf t. 

e Haza you awaza of tzansiars of funds batwaan tha 
dlffazant Channall ozganizatlons? 

I Not until aftaz things staztad appaazlng In tha 
P&ass. 

fi So spacifically you waza not awaza of a sazlas of 
substantial tzansfazs of funds fzoa NKPL to Santlnal in 




F 



411 



ONCLASSIRED 



KAME: HIR251020 ij|V|Bl HiIeiII II 11 PAGE 75 

1798 March of 1986? 

1799 i Oh, u*ll, thara's sort oi a baokwards way that that 

1800 took placa. Ha wara raising monay for Santinal to put on 
180 1 tha lobbying advartisamants and Mr. Channall callad two of 

1802 his contributors, Z baliava Elian Garwood and Barbara 

1803 Mewington, and in his words, said guass what, I'm going to 
18014 send you «UO,000 or a cartain amount. It was a cartain 

1805 amount with aach ona and I don't ramambar tha spaoifio 

1806 amounts. I'm going to sand you x nuabar of thousand dollars 

1807 back from N£PL. I'm going to giva it back to you and than 

1808 you ara going to turn around and giva ma k, a substantially 

1809 largar figura in tha form of a ohack to Santinal. I was 

1810 awara that that took plaoa. 

1811 e I'm not asking about that. I'm talking about 

1812 whathar you wara awara of dlract transfars from KEPL to 

1813 Santinal in March of 1986? 

18 1U A Okay. Aftar all this startad coming out in tha 

1815 prass in tha ooursa of ona or mora convazsatlons about this 

1816 whola mass, Mr. Channall mada rafaranca to tha fact that 

1817 NEPL had usad soma monay for tha Santinal lobbying campaign, 

1818 that soma NEPL monay had baan usad for that and that it was 

1819 avar so fortunata bacausa it was pura ooincidanoa that an 

1820 aduoational organization was allowad to usa up to a cartain 

1821 parcantaga of Its ^ a mli for lobbying purposas . 

1822 So I was sort of offhandadly awara that soma NEPL 



wmsw 



412 



KAKE ■■ 
1823 
182(4 
1825 
1826 
1827 
1828 
1829 
1830 
1831 
1832 
1833 
183U 
1835 
1836 
1837 
1838 
1839 
18M0 
18t«1 
18U2 
181(3 
18>«l« 
18i45 
18>46 
181*7 



HIR251020 



UNCLASSIFIED 



PAGE 76 



monay had been used for lobbying purposes, but the nuts and 
bolts speciiics oi how It had taXen place, I was not auaxe 
of. 

S When was this discussion with Hx. Channell? 

A I can't say specifically but Z can say it was--! 
believe Jane McLaughlin's story first appeared on ABC in nid- 
February. So I would have to say it took place between nid- 
Febiuary and the beginning of April. But I'm only 
reconstructing this from ny memory. I mean after December 
when the first story in the Lowell, Massachusetts Sun came 
out there were hundreds of situations In which Hr . Channell 
and I and others would discuss the ongoing catastrophe and 
to try and put a finger on when a specific conversation took 
place is at best very difficult. 

S X ask the reporter to mark as Littledale Deposition 
Exhibit 1 for identification a group of documents which have 
been selected from the documents produced by counsel for the 
Channel organization. The first page is a list Indicating 
the date of each document and the control number on the 
document, which was put on the document by counsel for Hr . 
Channell's organization. 

[Littledale Deposition ZMhlblt No. 1 was marked for 
identification. ] 

BY MR. FRYnAN' 

Q Hr. Littledale, if you would look at Exhibit 1 and 




413 



HAHt 
18148 
18U9 
1850 
1851 
1852 
1853 
18514 
1855 
1856 
1857 
1858 
1859 
1860 
1861 
1862 
1863 
186<4 
1865 
1866 
1867 
1868 
1869 
1870 
1871 
1872 



HIR251020 



UNCUSSIFIED 



PIGE 77 



particularly tha first documant in that axhibit, actually 
thtt first and sftcond docun«nts. which arc pages 29985 and 
29986. Is 29986 in your handwriting or your printing? 

A Yas. 

e And that is th« draft of tha lattar that appaars in 
typewritten version at 29985) is it not? 

A Yes, I would say that's what it is. 

e Is this--the recipient of this letter. James 
Landrum, is this the Mr. Landrun that you referred to 
earlier as a contributor? 

A Yes, it is. 

Q On the last paragraph of this letter you referred 
to looking forward to seeing hint in the next two weeks to go 
over our shopping list. Hhat does that refer to? 

A It refers to the shopping list that I mentioned to 
you earlier that I had spoken to him about whan I called him 
in January. It was a list that word in the office had wa 
ware going to receive eventually which was going to list the 
military needs of the freedom fighters. 

S Who had told you about this shopping list? 

A I don't know for sure if anybody had actually told 
ma we are going to get a shopping list. I believe that I 
had just sort of picked it up around the office. The 
offices we were in on Capitol Hill were very small and you 
learned pretty much anything that was going on pretty 



wit^ssw 



414 



NAME: 
1873 
187i» 
1875 
1876 
1877 
1878 
1879 
1880 
1881 
1882 
1883 
188U 
1885 
1886 
1887 
1888 
1889 
1890 
1891 
1892 
1893 
189M 
1895 
1896 
1897 



HIR251020 



quickly . 



UNCIASSIFIE 



PAGE 78 



2 Was this to be th« first shopping list of that typa 
that had baen provided to NEPL or had thar* bean an earlier 
shopping list? 

A To the best of my Knowledge, there had never been a 
shopping list per se as I see it. 

2 Turning to the next group of documents which are 
numbered 36710 through 3671U, these documents relate to a 
fund raiser'^ meeting and the date indicated is Hay 23, 
1986. The text at 36710 and 36711 appears to be basically 
the same text as in the next three pages except it has been 
edited slightly and paragraphs have been inserted. Have you 
seen these pages before? 

A I'm familiar with this general document. Which of 
the two versions I have seen, I'm not really sure. I think 
it's probably the second. I'm not enormously familiar with 
it, but I have seen it before. 



Did you attend a fund ralser/*W/ meeting on Hay 23 



^' 



1986? 



A Probably. 

fi Would you review pages 3671U? 

A I'm familiar with the contents of this document, 
fi Kow are you familiar with the contents of this 
document? 

A Mumber one, because I have glanced as I said before 



UNCUSS!F!EB 



415 



MAHE' 
1898 
1899 
1900 
1901 
1902 
1903 
190(4 
190S 
1906 
1907 
1908 
1909 
1910 
1911 
1912 
1913 

19114 

1915 
1916 
1917 
1918 
1919 
1920 
1921 
1922 



HIK251020 



miftssife 



PAGI 79 



at this documant in the past and nuitbax two, bacausa I 
ramanbar bain? at a maating that took placa in which this 
was assantially tha topio of discussion. Khan you askad ma 
if I was at a fund xaisar{\a maating on nay 23 and I said 
probably, tha xaason I say that is bacausa Z'n not 
absolutely positive that tha maating that X was at in which 
this conversation took placa. took place on Hay 23. 

2 But you recall being at a fund raisar/'W maating 
where subjects ware discussed similar to tha subjects 
described in pages 36712 through 3671>i> is that correct? 

A Yes . I recall being at a maating in which that was 
tha topic of conversation. 

S Who participated in that meeting? 

A I can't say for sure who all was there, but I would 
assume-- 

e Who do you recall being there? 

A Absolutely positively? 

e Has nr. Channell there? 

A Hr . Channell. 

S Has Hz. Conrad there? 

A Z can't say for absolutely positive but almost 
assuredly. 

fi Has nz. Smith there? 

A Again almost assuredly. 

2 Hho else do you recall was there? 



UNCUSSIFIED 



416 



UNCUSSIHED 



HXnt- HIR251020 UllUi>nVwll WI/ PAGE 80 



1923 
192M 
1925 
1926 
1927 
1928 
1929 
1930 
1931 
1932 
1933 
193'* 
1935 
1936 
1937 
1938 
1939 
1940 
19m 
19M2 
19M3 
19i|i| 
19X5 
1916 
19U7 



A As absolutely positively being there? Jane 
ncLVughlin, Fred Fried. 

2 On page 36712, Mr. Littledale, toward the middle of 
the page there is a statement that reads so when these 
people give us *30,000 and our ads cost 435,000 a day around 
the country, they are in many districts literally giving a 
political contribution to support President Reagan's 
congressional candidates. Do you see that statement? 

A I see it. 

S Do you recall anyone at the fund falser f)^ meeting 
making a statement similar to that? 

A I'm pretty sure that was Hr. Channell's statement. 
yes. 

fi Mow, this statement was made in the context oi a 
meeting to raise iunds ior the Strategic Defense Initiative 
project; was it not? 

A Yes, sir. 

fi Do you recall Hr . Channell makins similar 
statements in connection with fund raising ioz the Central 
American freedom program? 

A No, six. Ha didn't. 

fi Nhy are you certain that he did not? 

A Hell, because the logic that makes that statement 
that you read a moment ago possible precludes it from being 
possible with the Central Amezioan Issue. The reason you 



mussra 



417 



NAME: 
19U8 
19149 
1950 
1951 
1952 
1953 
1954 
1955 
1956 
19S7 
1958 
1959 
1960 
1961 
1962 
1963 
1961* 
1965 
1966 
1967 
1968 
1969 
1970 
1971 
1972 



HIR251020 



UNCUSSIFIED 



PAGE 81 



can naXe that statemant here is becausa tha SDI issua Is 
enoimously popular. Polls conslstantly show ovai 60 parcant 
of the population supports a deiensa against nuclaar 
missiles, thereiora, ii you are using nonay to, during the 
time that an election is taking place, to harp on the SDI 
issue and the Republican candidate is harping on the SDI 
issue and the American public is in iavor of the SDI issue, 
then it stands to reason that the aore you advertise about 
SDI, the nore you make people think about It, the aora they 
are going to support tha candidate who tays yes, I favor 
SOI. You don't have that advantage with Micaragua because 
polls have consistently shown that very iaw paopla support 
the idea of aid to tha rebels in Klcaragua, or anyway that's. 
the logic we were following. 

2 Well, was it not your understanding in connection 
with the Central American freedom program that tha 
advertisements sponsored by KEPL In support of contra aid 
would have a carry-over effect on the following 
Congressional races where contra aid would be an Issue in 
tha race? 

A I personally never felt that was the case, and I 
don't recall that ever being a toplo of conversation. That 
is not to say that it wasn't at some point or another. 

e Have you discussed this fund^raisez*^ meeting with 
anyone in the last week? 



UNtUSSffl 



418 



KAMZ: 

1973 
197U 
1975 
1976 
1977 
1978 
1979 
1980 
1981 
1982 
1983 
198(4 
1985, 
1986 
1987 
1988 
1989 
1990 
1991 
1992 
1993 
1994 
1995 
1996 
1997 



HIR251020 



yrlClASSiFIED 



PACK 82 



A No, sir. 

S When was tha last time you talked to Hr . Channall 
about it? 

A About this f und~ raiser/'Wj aecting? 

fi Yes. 

A Probably at the tine it took place. 

8 Have you discussed this docuaent relating to this 
meeting with anyone in the last week? 

A Absolutely not. I haven't spoken to Mr. Channell 
since the very end of Hay or the beginning oi June oi this 
year, and this specific document has never been a topic oi 
conversation between me and anyone else unless it was In the 
days or weeks or two immediately following when it took 
place, and I don't specifically recall it ever taking place. 

S I believe you said you believed you had seen this 
document before? 

A Oh, yes. 

8 Hhen was the last time you think you saw it? 

A Probably in collecting ay stuff to turn it over to 
counsel . 

8 So you had a copy of this? 

A Oh yes. This document was provided to everybody. 
That's why it was typed up. This was typed up from a tape. 

ft Right. 

A Essentially what you have here is Hz. Channell 



mmm 



419 



1998 
1999 
2000 
2001 
2002 
2003 
2004 
200S 
2006 
2007 
2008 
2009 
2010 
201 1 
2012 
2013 
20114 
2015 
2016 
2017 
2018 
2019 
2020 
2021 
2022 



HIR251020 



UNCLASSra 



PAGE 83 



talking, it btting tapad and than tha tapa baing turnad ovar 
to a sacrataiy to ba typad and thanca distcibutad to tha 
iund xaisars. 

S All right. 

lutning to tha naxt documant which is docunant 
3600>4 which is a talagxan to Colonal Kocth datad Saptamber 
9, 1986. and at tha bottom has tha namas of Hr . Channall. 
Kz . Smith and youtsalf. do you racall that--first oi all, do 
you racall this mailgram? 

A I hava saan it baiora. 

fi Uaza you awaza that it was baing sant at tha tima 
it was sant? 

A No, sir. 

fi Hhan did you ilzst laarn it was baing sant? 

A Within a iaw days aitar it baing sant wa racaivad a 
copy of it in tha offica and I aithaz raad a copy sitting on 
the seczatary's dask or alsa I racaivad a copy of it. I 
probably racaivad a copy of it. 

Q What was tha zaason that you undazstand this 
mailgram had baan sant to Colonal North? 

A Hall, if you Hill racall. aazliar on Z dasorlbad an 
ad run by tha Anti^arrorlss Aaarloan Committaa that 
discussad tha political laanings of Linda Chavaz and Barbara 
Hikulski and I aKplalnad that whlla avarybody thought, 
including Chavaz and Hikulski. that tha purposa of tha ad 



UNClASSra 



420 



mm>m 



HXnt- HIR251020 tJ J 1ULMWII ■■■*' P&GE SU 

2023 was to do daaage politically to tls . nikulski, th* actual in 

202U fact purposa oi it was to do damaga to Hlchaal Baxnas. Wa 

2025 all hatad Hichael Batnas . Caztainly Colonal Korth was 

2026 unlikaly to ba taztibly iond of Congzassnan Baznas and as I 

2027 undazstand it, Hz. Siiith and Hz. Channall waza watching tha 

2028 zetuzns coiia in fzom tha pzimazy zaca and whan it bacana 

2029 quita claaz that Hz. Baznas was going to losa. Hz. Channall 

2030 and Hz. Saith waza vazy plaasad and sant a talagzaa to 

2031 Colonal Nozth saying essantially what it says thaza. 

2032 Ua aza dalightad to infoza you that nichaal Baznas 

2033 is not going to ba a thozn in youz sida anynoza. oz wozds to 
20314 that affact. 

2035 e Hho told you about this ozigin of tha aailgzaa? 

2036 X Eithaz Hz. Smith oz Hz. Channall. I don't zacall 

2037 whon. Z just zenambaz that aftaz I saw it I askad sonabody 

2038 about it and thay said oh gaa, wall yas , wa sant it whan wa 

2039 saw that Baznas had dafinitaly lost. 

20140 2 Do you know why thay sant a mailgzam instaad of 

20*11 just talaphoning Colonal Nozth? 

20112 A Z havan't tha foggiast. Although Z can giva you an 

20M3 axplanation as to a likaly zaason thay would. 

20UI4 .' fi What would that axplanation ba? 

20*45 L A So that you hava a oopy of it that you can sand to 

20*46 contzibutozs. 

20*47 fi Aza you awaza of any discussions involving Colonal 



miiissro 



421 



NAME: 
20t48 
20149 
2050 
2051 
2052 
2053 
205U 
2055 
2056 
2057 
2058 
2059 
2060 
2061 
2062 
2063 
206M 
2065 
2066 
2067 
2068 
2069 
2070 
2071 
2072 



^INCLASSIFIED 



HIX251020IB2UI.I U 'V '^.inril PAGE 85 

Notth concerning the defeat of Congressnan Barnes? 

A None that I'n aware of/ no, sir. 

2 So you haven't heard of any such conversation? 

A Not that I can recall. I never got the impression 
that Congressman Barnes was A, very aware politically. When 
I say politically, I mean electorally, or that he really 
cared much. 

S That Congressman Baxnes-- 

A Colonel North. I'm sorry. I misspoke. 

r 

fi This mailgram states that we at the Anti^-t^erroxism 
American Committee feel proud to have participated in a 
campaign to ensure Congressman Barnes' defeat. Now, you 
have described, Hr . Littledale, the advertisement that the 
committee sponsored that featured Linda Chavez and Barbara 
nikulski. 

A Yes. 

fi Other than that advertisement what participation 
did the committee have to ensure the Barnes defeat? 

A None that I'm aware of. 

e That's the only aotlvlty you aze awaze of? 

A Yes. sir. 

fi Did you consider the earlier Sentinel ads that we 
h%ve desozlbed that were very negative on Congressman Barnes 
to be a part of a long-range plan to ensure his defeat in 
this election? 



HNOussra 



422 



Hktlt' 
2073 
207U 
2075 
2076 
2077 
2078 
2079 
2080 
2081 
2082 
2083 
208U 
2085 
2086 
2087 
2088 
2089 
2090 
2091 
2092 
2093 
209<4 
2095 
2096 
2097 



HIR251020 



UNClASSiFIED 



PAGE 86 



A I would say that at th«--s«e< I'm not avan sura 
tight now uhethar at tha tlma tha Santinal ads uaxa running 
Batnes was evan a candidata, official or unofficial for tha 
Denocratic nonination for tha Sanata . In tha avant that ha 
was an official or unofficial candidata for tha Denocratic 
nomination for the Senate at tha tha time Sentinel ads took 
place, I wouldn't doubt that wa ware all thinking about ways 
to encourage Hr . Barnes' defeat. Kona of us thought that 
tha Sentinel ads regarding Nicaragua would have any real 
effect or anyway I didn't--and I don't think anybody else 
did--that the Sentinel ads would have any real effect on his 
chances of receiving the Democratic nomination because 
Maryland is a fairly liberal state, where tha popularity of 
aid to tha freedom fighters is probably evan considerably 
lower than it is nationwide. 

And when you are dealing with a figure that seems 
to hover, as aid to tha freedom fighters does, somewhere in 
the 30s, you get much loMttz than that, ada regarding tha 
subject caztainly aren't going to make a lot of difference. 
The only people that war* likely to be afiactad by tha 
Sentinel ads against Hr . Barnes are people that are probably 
A.- Republicans , and B, rather conservative. So no. I think 
it's very, vary far-fetched to suggest that tha Sentinel ads 
run regarding Hr . Barnes were part of an effort to defeat 
him. 



UNCLASSIFIED 



423 



KANE: 
2098 
2099 
2100 
2101 
2102 
2103 
21014 
2105 
2106 
2107 
2108 
2109 
21 10 
2111 
21 12 
2113 
21 1(4 
2115 
21 16 
21 17 
21 18 
21 19 
2120 
2121 
2122 



HIR251020 



UNCLASSIFIED 



PAGE 87 



fi Turning to tha last two pages In this axhlblt, 
nunbars 33331 and 33330, doas youz handwriting appaaz on 
thosa pagas? 

A It doas. 

S Is it all in your handwriting or just part? 

A Just part. 

8 Would you idantiiy your handwriting? 

A All of 'it aKcapt tha data in tha uppar laft hand 
corner, ay nama with a box around it and at tha vary bottom 
it says Grean, October, November, Haroh, April. Everything 
except those things that I have identified are in my 
handwriting . 

e And was in prepared in response to a request by Dan 
Conrad for information concerning your fund;>raising 
activities? 

A Yes, sir. 

MR. rRYMAN: I ask the reporter to mark this 
document as Llttledale Deposition Exhibit 2 for 
identification. 

[Littledale Deposition Exhibit No. 2 was marked for 
identification. 1 

BY HR. PRYMAN' 
. e Hr. Littledale. would you look at Deposition 
Exhibit 2 for identification which is a document produced by 
counsel for the Channell organizations. It's a page of 



liMtussra 



424 



Kinz 

2123 
212M 
2125 
2126 
2127 
2128 
2129 
2130 
2131 
2132 
2133 
21314 
2135 
2136 
2137 
2138 
2139 
2140 
21>(1 
21(42 
21*43 



HZR251020 



UNClASSra 



PAGE 88 



handurlttan notas and it has tha idantlilcation numbax 
37851. I> your handwriting containad in that paga? 

i Yas. sir. 

S Is it all in yout handwriting? 

A Hith tha axcaption of tha lowar right-hand cornar 
uhara it says Littladala Daposition Exhibit 2. 

2 What was tha occasion whan you aada thasa notas? 

A This was April or parhaps aarly Hay, but probably 
April o£ 1986. It was just whan tha Anti^yarroxisa Anarican 
Comnittaa was baing iornad and it was soma notas I aada on 
what kinds o£ things to say ragarding whan raising aonay. 
It was notas ior making solicitations. 

fi Has this nota you mada oi a convarsation with 
somaona alsa or ara thasa your own idaas that you wara 
putting down hara? 

A Thasa ara notas from a convarsation with somabody 
alsa . 

2 Hho is tha othar parson? 

A I baliava it's a compilation oi a convarsation that 
took placa with Hr . Channall and soma notas that Hr . Smith 
showad ma irom a convarsation ha had with Hr . Channall. 



UNCLASSIRED 



425 



NAME: 

2m>4 

2145 
21M6 
2147 
21>48 
21i<9 
2150 
2151 
2152 
2153 
215(4 
2155 
2156 
2157 
2 158 
2159 
2160 
2161 
2162 
2163 
216U 
2165 
2166 
2167 
2168 



HIR251020 






RPTS CAMTOR 



DCnX KOEHLER 



ICLASSIRED 



PAGE 89 



fi Toward th* bottom of tha paga tha nama Giddans 
appears, do you saa that? 

A Yas. 

fi What ara tha notas that ralata to tha Giddans? 

A Tha Giddans knaw Colonal Korth baiora thay cama in 
contact with him through us > and thay wara vary^ vary iond oi 
him. nrs. Giddans was a iairly olosa parsonal irland oi 
both Colonal North and Colonal North's wifa, Batsy> and 
tharaiora, it saamad that baing as how ona of tha primary 
purposas oi tha formation oi tha Antltarrorism Amarloan 
Committaa was to saa to tha dafaat oi Itlchaal Barnaa. X^ 
mada pariactly good sansa to solicit tha Giddans for monay 
for tha Antitarrorism Amarican Committaa. and it says 
"Giddans tJ"\J Hhat that maans is talk to Giddans ra. 

2 And than you hava aftar that CZ&> Nicaragua and 
ambassy saourity? 

A Corxact. 

e Hhat doas tha CIA hava to do with this? 

A Ona of tha linaa that wa wara going to usa in 
solicitations was that tha Antltaxzorlim Amarican Committaa, 
as its nama would suggast. its purposa is antitarrorism, 
baing against Congrassman that ara not supporting tha 



UNCUSSIHED 



426 



HIR2S1020 



IINCIASSIFIED 



PAGE . 90 



KAHE: 

2169 Prasident in his dssiras to a) i&s tha CIA to conduct mora 

2 170 covart antitarzorist oparations. b) his polieias against 

2171 Kicacagua. c) tha Prasidant's zacant zaquast, or racant at 

2 172 that tiita> ioz nora monay to baai up ambassy sacurity. 
2 173 He wara going to usa tha Antitarrorisa Amarican 

2 17U Committea to try to daiaat candidatas who opposad giving tha 

2175 CIA mora of a fraa hand, opposad aid to tha iraadom 

2 176 fightars. and wara not supporting tha Pzasidant in his 

2 177 request for mora aid to help beef up ambassy sacurity. 
2 178 fi The reason for tha focus on Congressman Barnes, 

2 179 however, was his role in leading tha opposition to aid to 

2180 the Kicazaguan resistance, was it not? 

2181 A Certainly was. 

2 182 e And that was discussed with Hr. Channall? 

2 183 A Ue discussed it many times. 

218tt fi And with Mr. Smith? 

2 185 A And with Hz. Smith, ceztalnly. 

2186 fi Hhat does tha line at tha bottom of tha page mean, 

2187 ''R.R. iniozmad on his zatuzn.'*? 

2188 A I can't remember for certain, but it pzobably means 

2189 that President Reagan was out of town at the time in a 

2190 foreign country or wherever, and that ha was going to be 

2191 ioiormad of tha formation of this new political action 

2192 commlttaa whan ha zatuzned fzom whazavaz ha was. 

2193 fi Hhat was youz basis foz believing that ha would be 



mussra 



427 



NAHE: 

219U 
2195 
2196 
2 197 
2198 
2199 
2200 
2201 
2202 
2203 
22014 
2205 
2206 
2207 
2208 
2209 
2210 
221 1 
2212 
2213 
221U 
2215 
2216 
2217 
2218 



HIR251020 



so inform«d7 



UNCIASSIHED 



PAGE 91 



A Hz. Channall would tall a* that. Mz . Channall was 
constantly tailing contributors and tailing us to tall 
contributors, Ronald Raagan is going to haar about this 
right away. 

fi Do you hava any knowladga of nz . Channall's basis 
ior believing that President Raagan would be inioraad about 
the formation of this committee? 

A It is fluff, it is fund^aising fluff. 

Q So you have no knowledge? 

A Absolutely not. I mean, there is a vezy easy way 
that you make that a tzue statement. You send President 
Reagan a letter in the mail saying, by the way, we are the 
Antiterrorism American Committee and we have just been 
formed to defeat your political enemies. There, you have 
informed President Reagan. 

fi In late 1986, Hr . Llttledale, are you aware of any 
revisions that weze made in the KEPL financial records to 
remove the word, ''toys'*? 

A I was aware that took place. 

e Hhat do you know about that? 

A Vezy little. Only that it took plaoe. 

S So it's youz undezstandlng that by late 1986, the 
wozd ''toys'' was a pazt of the KEPL financial zecozds? 



A Yes. 



wmsw 



428 



NAME: 
2219 
2220 
2221 
2222 
2223 
222M 
2225 
2226 
2227 
2228 
2229 
2230 
2231 
2232 
2233 
223M 
2235 
2236 
2237 
2238 
2239 
22U0 
22t«1 
22U2 
22X3 



HIR2S1020 



UNCUSSiFIED 



PAGE 92 



2 Do you know who ordered the removal of the word? 

A I don't know. I would assume Mr. Channell ordered 
it, but that is merely an assumption not based on any 
concrete knowledge, and I am not really sure that the 
removal took place in late 1986. X thought it had taken 
place in early 1987. 

2 Do you know the reason why the changes were ordered 
to be made? 

A I think it had to do with the fact that Jane 
McLaughlin had gone public. That is why I believe that it 
took place in 1987 rather than 1986. 

HR. rRYHAN' Mr. Littledale. I have no fuxthaz 
questions . 

BY MR. HcGOUGH: 

fi Hr. Littledale, you indicated to Hr . Fryman that 
you are currently engaged in solicitation of funds for the 
contras, is that correct? 

A Absolutely not. I will never again solicit money 
for the purpose of giving it to the oontras . Thank you very 
much . 

e I misunderstood that. What is your current line of 
employment? 

^ A I am soliciting funds for a foundation whose 
purpose is to run eduoatlonml ads on various and sundry 
foreign policy issues, one of which Is the Nicaragua 



ttHtUSSW 



429 



NAME' 

22Ut4 
22t(5 
22U6 
22<47 
22U8 
^2^9 
2250 
2251 
2252 
2253 
225>« 
2255 
2256 
2257 
2258 
2259 
2260 
2261 
2262 
2263 
226U 
2265 
2266 
2267 
2268 



HIR251020 



subject. 



UNCUSSIHED 



PAGE 93 



fi X misundatstood and I an glad wa claxliiad that. 
Hhat is tha foundation that is doing this? 

A Unitad Statas Fraadom Foundation. 

2 And who is tha pxincipal in that foundation? 

A Tha ptasident of tha foundation is Cliff Snith. 

fi Ara thara any othat formar ikaabars of Mr. 
Channall's organization involved in that foundation? 

A Hz. Raphael Floras is also a fozaat staff menbat. 

fi Ara you an officer in that foundation? 

A I an. 

fi Hhat is your position? 

A Vice||president. 

fi And Z believe your fundraislng efforts are directed 
toward educational programs, public education prograns? 

A Yes. 

fi On foreign policy Issues, is that fair to say? 

A That's correct. 

fi And you are not currently engaged in any 
solicitation for direct support. If Z oould call it that, of 
the centres? 

A Not in any way. shape or form. Z have only been 
rid of Itr. Halsh for a few months, and Z/^thls horrible 
suspicion Z am not totally rid of him. and Z don't want to 
see him or anybody like him again. 



UNCLASSIHED 



430 



UNCUSSIHED 



HAHE: HIR251020 U I 1 VW l^^' ■ ■ ■•"■^ PkGZ 9i4 

2269 2 Is thtt foundation with which you ar« currantly 

2270 aiiiliatftd a 501 C 3 organization? 

227 1 A It has applied for that status. 

2272 fi Are you aware of any gifts, money, or any other 

2273 thing of value that Oliver Horth or any aenber of his 
22714 immediate family may have received from Hr . Channell or 

2275 anyone associated with his organizations or the 

2276 organizations themselves? 

2277 A I am not aware of any such gifts he may have 

2278 received from anybody who was in the employ of Hr . Channell. 

2279 I have the impression that a woman who gave numerous 

2280 contributions to the National Endowment and other Channell 

2281 entities did give Colonel North a couple of gifts at one 

2282 point or another. 

2283 Specifically, I believe she gave a pony to one of 
228(4 Colonel North's daughters, and I believe that she gave 

2285 Colonel North two T-shirts. 

2286 2 And which contributor is that? 

2287 A Barbara Ghri e ti a n . 

2288 2 Other than the pony and the T-shirts, are you aware 

2289 of any other gifts or items of value? 

2290 .' A No. 

2291 ^ 2 That Colonel North might have received. 

2292 A None whatsoever. 

2293 2 Earlier in your deposition, you indicated that you 



UNCUSSIHED 



431 



KAHE 

229U 
2295 
2296 
2297 
2298 
2299 
2300 
2301 
2302 
2303 
230(4 
2305 
2306 
2307 
2308 
2309 
2310 
2311 
2312 
2313 
231U 
2315 
2316 
2317 
2318 



HIR251020 



UNCLASSIFIED 



PAGE 95 



ware auara oi allagations that Ms. McLaughlin had nada to 
various alaitants ^^^amk. oi tha nadia in aarly 1987, and 
you impliad, although I don't know whathar you axpxassly 
statad it, but you inpliad that soma of thosa allagations 
you believad to ba falsa. Raally that is my quastion. Has 
theia anything that Hs . McLaughlin allagad. oe was raportad 
to hava allagad, that you baliava was in fact falsa? 

A Ko, I didn't maan to giva that imprassion. 

S nayba I am xaading too much into your tastimony, 
but I raad into something you said aarliaz implicit 
disapproval of what sha had dona? 

A Oh. absolutely. 

2 And from what did that disapproval stam? 

A Sha is a traitor. 

fi But you hava no quarral with any of tha allagations 
that hava baan attributed to her in tha madia, as far as tha 
truth of those allegations go? 

A I haven't read most of them. 

fi But the ones you hava read, let's limit it to that. 

A Tha one that I am enormously familiar with is the 
allegation regarding raising money for weapons, and no, that 
i.f absolutely true. 

^ fi At the time you were raising money for weapons, 
were you concerned about the legality of those activities? 

A Z wasn't concerned about it. I was pretty damn 



UNCLASSIFIED 



432 



2319 
2320 
2321 
2322 
2323 
23211 
232S 
2326 
2327 
2328 
2329 
2330 
2331 
2332 
2333 
233M 
2335 
2336 
2337 
2338 
2339 
23>40 
2341 
23>42 
23t43 



HIR251020 



IINCUSSIflEO 



PAGE 96 



sura it was illagal. 

Q And on what did you basa that conolualon? 

A As it tuzns out, tha lagality oi it had nothing to 
do with uhara I thought tha lagal pzoblams waza. I thought 
the legal ptoblams wara ptobably with tha Hautzality Act and 
tha Boland Amendmant, which shows you how much I knaw about 
the various and sundry Boland amanditants , but no, I fait 
sura u» had to ba violating ona oi both oi tha nautrality 
aetl and Boland amanditants. 

Q Did you discuss your impzassions as to tha lagality 
of your efforts with Mr. Channall or Hr . Conrad. 

A No. 

fi Did you discuss it with anyona alsa in nr. 
Channall 's organizations? 

A Ko. 

fi Lat ma ask you what is obviously tha follow-up 
questions. Hhy did you oontinua to do it if you thought it 
was illegal? 

A Because it was tha right thing to do. 

fi In what sense? 

A Hall, there is an old saying If that is what the 
lev says, then the law, sir, is a — expletive deleted. And I 
am in firm belief that in this oasa that is true, and I was 
brought up believing that If something is absolutely 
positively wrong, then you right it as best you can. You 



UNCUSSIFIED 



433 



UNCLASSIHED 



NAHE: HIR251020 lilllll Kllllll II II PAGE 97 

23>4M don't uotry too doggontt much about tha lagal raaif ications . 

23>45 & When you ilxst joined Hr . Chann«ll's organization, 

2316 you weren't aware oi that aspect oi the f undlcaising, were 

23U7 you? 

23>48 A That money was being raised ior--? 

23U9 S For lethal assistance. 

2350 A No, I wasn't. 

2351 2 Did you discuss the propriety oi tax deductions ior 

2352 contributions ior lethal assistance with anyone in Mr. 

2353 Channell's organization? 

23514 A Ko . I never did, because I assumed that it was 

2355 periectly all right. As I said earlier, the only laws I 

2356 thought we were having problems with were the Keutxallty Act 

2357 and the Boland amendments; and to show you what I know oi 

2358 tax law, it was my assumption that, ii you made a 

2359 contribution to an organization that was a taK^eductible 

2360 organization, then the contribution was tax deductible, and 

2361 the people that potentially had problems were the ioundation 

2362 itseli. I would have thought an awiul lot harder and longer 

2363 about what I was doing, had I known that, potentially, I was 
236t creating legal problems ior the contributors themselves. 

2365 .~ Q Let me iollow up on the other side oi that coin. 

2366 How did you understand the mechanism to work as iar as 

2367 converting the contributions into the items that the 

2368 contributions were given ior? 



UNCLASSIHED 



434 



NAME: 
2369 
2370 
2371 
2372 
2373 
237U 
2375 
2376 
2377 
2378 
2379 
2380 
2381 
2382 
2383 
238<4 
2385 
2386 
2387 
2388 
2389 
2390 
2391 
2392 
2393 



HIK251020 



UNCUSSIHED 



PAGE 98 



A I had no knoulAdgs of how that was taking placa . Z 
had supposition only, and it was totally uneducated 
supposition. 

fi What was your supposition? 

A That in one way ox another the money was being 
turned over to Colonel North for his disposal for the 
purchase of weapons. 

& On what did you base that supposition? 

A Made it up out of ny own head. I sean. Colonel 
North obviously knew what we were doing. He was certainly 
taking steps to nake it easier for us. and^ therefore, it was 
ny assumption that the money was being made available to him 
to be spent to help the freedom fighters. 

fi To youz knowledge was anyone else in the United 
States Government, other than Colonel North, aware of your 
efforts, and I am speaking of you collectively, as the 
general organization's efforts to raise lethal assistance 
for the contras? 

A No, I don't know of anybody else that was aware of 
our efforts. 

fi Did Hz. Channel. Hr . Conrad, or Colonel North ever 
speak of someone else in the United States Government being 
ayare of those efforts? 

A No, he did not. 

fi Did a contributor ever ask you how he. the 



UNCLASSfRE 



435 



HAHE: 
239>4 
2395 
2396 
2>97 
2398 
2399 
2M00 
2U01 
2it02 
2403 
2(40U 
2U05 
2X06 
2M07 
2U08 
21409 
2(410 
241 1 

2m2 

2X13 
2U1U 
2U15 
2<416 
21417 
2U18 



HIR251020 



UNCUSHD 



PAGK 99 



contributor, could ba sura that his monay in iaot would 90 
to purchasa surface to air itissilas or a Haula airplana? 

A Ko. 

e Did you avar axplain to a contributor how that 
might coma about? 

A The spaciiic nachanics? 

fi Did you aver make any assurance to a contributor as 
to how it might ba dona? 

A No . I may, at some point or another, have said 
something like. well, you can see from Colonel North's 
helping us that it is going where It should be. something 
like that, but specific assurances about well, we take the 
money from here, we put it here, it goes over there. It goes 
over there, and then it goes over there. X wouldn't have 
known what to say. 

2 Here you aware of any deductions being made from 
contributions for the centres prior to that money being 
passed on for the purchase of whatever the object was? 

A Certainly. I was aware that we took our overhead 
out of contributions made. yes. 

e Here you aware of what percentage of that overhead 
usually was? 

. A I was assured throughout my stay there that it ran 
between 18 and 22 percent. 

2 Assured by whom? 



uNcussra 



436 



„. liNCUSSffl 



HknZ' HIR2S1020 IJ|^\|l«rlW V ■ " ■■-■^ pXQj jgO 

2m 9 A nx. Conrad, Hx . Channall, Hx . ncHahon. 

2>i20 e You didn't »aK« your pitch iox lathal asslstanc* to 

2421 all youx contributors, did you? 

2M22 A Ko. 

2U23 e Mow did you salact tha contxibutoxs to whoa you 

2U2U madft that pitch? 

2>i25 A From my raadings oi thaix paxsonalltias , iron 

2M26 convarsations with thaa. 

2427 a Hhat did you look iox? 

2428 A Soaabody that was axcaptionally vahaaant in thaix 

2429 anti4coaaunisa. 

y 

2430 fi Did you mvz xaiax to thaa as bloody typas? 

2431 A Oh, yas. 

2432 fi You said that with soa* anthusiasa. Hhat did you 

2433 aaan by that taxa? 

2434 A I aaant it was soaabody that Mould ba Intaxastad in 

2435 pxoviding aonay iox tha puxohasa of lathal assistanca. 

2436 fi Did you avax xaiax to thaa as political cxasias? 

2437 A I aight hava . 1 don't xaeall spaoiiioally doing 

2438 so, but it is oaxtainly tha kind oi thing Z aight say, but 

2439 political cxasias Z wouldn't ba xaiaxring. if Z usad that 

2440 taxa, it wouldn't ba xaiaxxing to soaabody that was a likaly 

2441 osndidata iox a solicitation iox ailltazy aquipaant. That 

2442 would ba a phxasa Z would usa to dasoxlba soaabody that was 

2443 vaxy vary intaxastad in alaotiva application, and thaxaioxa. 



UNGlASSra 



437 



HHtinssro 



NAHE! HIR251020 yi^V*"""^'^ PAGE 101 



2>4UU 
aUMS 
2(4 ((6 
2M147 
2U>48 
2>|it9 
2(450 
2(451 
2(452 
2(453 
2U5(4 
2455 
2456 
2(457 
2458 
2(459 
2(460 
2461 
2462 
2463 
2464 
2465 
2466 
2467 
2468 



would ba a likAly candldata for a solicitation for a 
political action comnittaa, at laast takan out oi contaxt. 

2 In tha coursa of youz quastionlng by Hz. rtynan, 
did you discuss aach of tha contributors whom you tacall 
soliciting for lathal aid? 

A Yas, anybody that I racall asking for monay for 
guns, I brought up with hia^ if I don't, I think I am 
probably braaking law, or cartainly making my immunity 
agraamant with you all null and void. 

Q I just wantad to maka sura wa elosad this out. 

A Yas. I maan it is antlraly possibla that I askad 
somabody somawhara for soma vary small amount of monay for 
lathal aid that I havan't mantlonad. but I castainly don't 
recall it. 

C When you solicltad monay for a surf aoa^to^air 
missila, for axampla, did you spacify that monay to ba usad 
for a surf aca ^to^ air missila? 

A Yas. 

fi Did you avar bacoma awara of a situation whara, in 
fact, that monay was not usad for its intandad purposa? 

A No. although thara hava baan planty of allagations 
to~ that affaot in tha last savazal months, and Z hava baan 
atimza ganarally of thosa allagations. 

m. HcGOUGH' Z think that is all Z hava. 



mm^^ 



438 



NAME 
2i469 
2U70 
21471 
2K72 
2M73 

znm 

2M75 
2U76 
2H77 
2U78 
2U79 
2(480 
2<481 
2>482 
2M83 
2(484 
2(485 
2(486 
2(487 
2(488 
2(489 
2H90 
2M91 
2(492 
2(493 



HIR2S1020 



RPTS nCGIKK 



DCHN SPR&DLXNG 



[6:00 p.B. ] 



PAGE 102 



y^lOUSSIHED 



BY MR. OLIVER' 

fi Hr. LittledalA, you Indicated •mrli«r that Ht . 
Korth navaz asKad foz nonay from anyona to your Knowladga; 
is that cozraot? 

A Kot in ny pzasanca. no. 

fi Did you avaz discuss with hia — 

A Hith? 

fi Colonal Korth. subsaquant to tha contributions 
having baan mada that tha paopla that ha had aat with had 
contributad monay for tha causa? 

A Ko . As a Battar oi fact, tha only two 
convarsations I avar had with Colonal North in which wa had 
an aKchanga oi words as opposad to aa simply listaning to 
hia giving his littla schpifal that ha usa to giva was at tha 
tabla that I dasoribad with tha guidanoa in which I said was 
tha worst problaa tha iraadoa flghtars hava. and ha said 
halicoptazs. and I said what do wa do about it. and ha 
dasoribad suriaca-to-air aissilas. that was ona 
osnvarsatlon. 

Tha only othar convazsatlon Z had was ha oaaa to a 
littla party wa had ovar at tha — what's tha naw hotal> tha 



UNCUSSIFIED 



439 



MAKE: 
2>49U 
2M95 
2>496 
2197 
2U98 
2>499 
2500 
2501 
2502 
2503 
250(4 
2505 
2506 
2507 
2508 
2509 
2510 
251 1 
2512 
2513 
251>l 
2515 
2516 
2517 
2518 



HIR251020 



yMSLASSiriEO 



PAGE 103 



Willatd, the littla party we had over at the Hillard on 
election evening in '86 and he aztived very, very late. I 
uent tzotting on over to hin because I admired him quite a 
bit and I said--ior some reason or another I heard he had 
been over in^^^^^Hor something like that. I said gee 
uhiz, hou uas your trip to wherever it was and he said oh> 
well we are not supposed to talk about that and I said oh, 
sorry about that. Colonel. Have a nice evening and that was 
the sum total of my conversations with him. 

I didn't really feel in a position to talk to hla 
very often. He very clearly was iar and away my superior. 

2 Did you provide the names of your contributors to 
someone in order for them to receive a thank you letter from 
Colonel Korth?' 

A Uh-huh. On occasions when. Colonel Korth was going 
to send a number of thank you letters Spitz would say 
there's a list on Angela's desk of people that are getting 
thank you letters. Look at it and add anybody you feel 
should be added. 

C So you added to that list the people who had 
contributed? 

A Right. For anything, not just for military 
purposes. 

C Did you supply names for letters that were to be 
sent by President Reagan to any of these individuals? 



UNCUSSIFIED 



440 



UNClASSinED 



Kktif MZX251020 1 1 |ll]l_niJlJ 1 1 ILU riGK lOU 

2519 k Not to ay t*coll«ctlon. I wasn't avan, that I 

2520 lacall, awaia that Prasidant Raagan had aant any lattars to 

2521 any individual paopla. 

2522 S Did you discuss thasa. thank^you lattars with any of 

2523 youx contzibutozs aitar thay had raoalvad thaa? 

252*4 A I think ona ot two oi thaa aay hava vary bzlaily 

2525 mantionad it in passing, but that's about it. 

2526 fi Uaza thasa paopla who had eontzlbutad aonay ioz 

2527 lathal aid? 

2528 A I don't zaoall. Tha oonvazsatiens that took plaoa 

2529 zagazdins thosa lattars was so llaltad that Z don't avan 

2530 zaeall tha spacliio instanoas Mhan thay happanad. Z just 

2531 hava a ganaral raeollaotlon oi tha subjaot having ooaa up 

2532 Mith soaa contzibutoz oz othat. 

2533 e You aantionad aarliaz that Ifr. Kuykandall had 
253U callad you aitaz tha Jana HcL^shlln story bzoka in tha 

2535 nauspapazs and askad you to eoaa to his oiiloa? 

2536 k Uh-huh. 

2537 8 And you Indlcatad that ha suggastad that you alght 

2538 wish to talX to tlta Baaalsh about Hs. Hoi^shllnT^m^^P 

2539 jHH| 

2540 .' A tight. 

25)<1 ^ e And you daolinad that invitation aitar oonsultatlon 

2542 with youx attoznay? 

2543 A That's oorraot. 



UNCUSSIFIfD 



441 



K\nt< 

25U(« 
25U5 
2SM6 
2SU7 

25<4e 

25U9 
2550 
2551 
2552 
2553 
25514 
2555 
2556 
2557 
2558 
2559 
2560 
2561 
2562 
2563 
256<4 
2565 
2566 
2567 
2568 



HIX2S1020 



UNCLASSIFIED 



PAGE 105 



e Old ha indicata to you that ha had disoussad this 
Idaa with anybody alsa? 

X Hall. I think I raaaabar hla saying that ha had 
altaady aantlonad It to Xlta Baaalsh and that sha was vazy 
anxious for such an intazviaw. 




k I raally don't knoM. 

fi Did ha indicata to you that ha had dlscussad it 
with Hz. Channall? 

\ I don't zacall hla doing ao. no. 

fi Hhy do you think ha oallad you? 

A Ha may hava haazd izoa Hz. Channall ay initial 
zaaction to Jana ncLwdghlin's quitting, haz actions 
iaaadiataly following haz zasignation. and aay also hava 
haard ay zaaetions to haz going publio with haz stozy. To 
say that ay zaaetions wara aKcaptionally nagativa would 
pazhaps ba a bit of an undazstataaant and X think ha aay 
hava lit on aa as baing a good pazson siaply bacausa of how 
stzongly Z fait on tha subjaet. Also tha faot sha was not 
tazzibly olosa with Cliff in tha of float and so I was sozt 
o£ a good candidata . 

fi Has ha disappointad whan you daolinad to do this? 

t Yas. 

fi Hhat did ha say? 



UNCUSSIHED 



442 



UNClftSSIFlED 



NAME: HIR251020 |ii1Ul«nWII Ikft/ riGt .106 

2569 k Ha said gae whiz, that's a shaaa. Ha could hava 

2570 laally dona somathing with this but if that's what your 
257 1 attotnay tails you to do. wa just don't hava any choica 

2572 about it. And I said yaah, I'm raally sorry. I was looking 

2573 forward to it. 

257(4 fi Did you suggast thara night ba anybody alsa who 

2575 might ba abla to fill that rola? 

2576 A I may hava suggastad that ha talk to Hr . Floras on 

2577 the subject, I may hava. I don't recall doing It but trying 

2578 to put myself back in the situation, Z might wall hava 

2579 suggested that. 

2580 2 Did he talk to Hr . Floras about the subjaot? 

2581 A I don't know. Despite the fact that I'm in 

2582 business with Hr . Floras and Hr . Smith, wa don't discuss 

2583 this whole thing very often simply because our various and 
258U sundry respective attorneys have told us not to. Any time 

2585 we discuss it, some fancy prosecutor somewhere might try and 

2586 construe it as obstruction of justice, and having faced the 

2587 possibility of a trial and a lengthy prison term, we are all 

2588 kind of anxious to avoid that. 

2589 fi Hhat do you know about the services that were 

2590 parfoxmed for Hr . Channell's organization by IBC? 

2591 ^ A Kow, do you want ma to include what I hava read 

2592 about in the newspapers? 

2593 fi Ko. I would like to know what you know from your 



UNCLASSIFIED 



443 



KANE: 

2S9<4 
2595 
2596 
2597 
2598 
2599 
2600 
2601 
2602 
2603 
260>4 
2605 
2606 
2607 
2608 
2609 
2610 
261 1 
2612 
2613 
261(4 
2615 
2616 
2617 
2618 



HIR251020 



UNCLASSIFIED 



PAGE 107 



own personal knowledge and eKpazlence while you were working 
in Hr. Channell's organizations. 

A Okay. All kinds of logistical support for the 
Central American freedom program. They ran the Speaker's 
tour program for us. They helped us out with fund raising. 
They helped with political aspects, where to put ads, where 
to target our campaign. 

2 You mean which congressional districts to run the 
ads? 

A Yes. or as we use to call them, media markets to 
run the ads in. I sort of learned that they were involved 
with getting the money that was foz lethal assistance to the 
contras in one way or another in that in April or Hay. in 
the spring or early summer of 1986 Hrs. Garwood made an 
exceptionally large contribution, somewhere in the region, 
once you added it all up. of about %2 million. And Dan 
Conrad, shortly after that contribution, showed me a check 
made out to IBC in the amount of *1. 250, 000. and I put two 
and two together and said well, Hrs. Garwood gives *2 
million. It's for weapons. A million and a quarter goes to 
IBC. Hakes sense that IBC's got something to do with 
getting money that's for weapons to the oontzas. But that's 
not absolute positive hard knowledge. That was, as I 
described it, a process of putting things together. 

S Did you ask Dan Conrad why they had given the money 



UNCUSSIFIED 



444 



2619 
2620 
2621 
2622 
2623 
262(4 
2625 



l>»CUSSiFIEu 



MAKE: HIR251020 ll&vi.l UAAU llll PIGZ 108 



to IBC? 

A No . I don't know how you would oparata. I suppos* 
being a lawyer you would think diiiaxantly than I did, but 
when you aze working in the kind oi environment we were 
working in, in which you pretty much assume you are in one 
way or another breaking one law or another, I don't ask 
questions . 



UNCIASSIHED 



445 



KANE: 

2626 
2627 
2628 
2629 
2630 
2631 
2632 
2633 
263U 
2635 
2636 
2637 
2638 
2639 
26U0 
26m 
26142 
26(43 

261414 

26U5 
2646 
26147 
26148 

26U9 
2650 



mp 



IFic 



HIR251020 PAGE 109 

R?TS MCGINN ■"■•-^« - ^ ^ - — — ~. 

DCHN PARKER 

S Did th«r« com« a time when you traveled to Peris 
with Spitz Channel and Cliii Smith? 

A I traveled to Paris with Cliff Smith and Raphael 
Flore)^ and met up in Paris with Mr. Channel, who arrived, I 
think, a couple of days later. 

2 What was the purpose of that trip? 

A To attend a conference on terrorism. 

Q Here there any meetings while you were in Europe 
that were related to fund-raising? 

A The subject of f und*traising almost assuredly came 

up, and I do know that shortly before we left--we left and 

I 
few back, I think, the day before or the day that the House 

/> 

voted for the second time on more aid to the freedom 
fighters, and I do know that we talked about raising some 
money from Paris on the subject. 

Specifically, I believe that Hr . Smith made a phone 
call from Paris to a contributor in Delaware. I think, to 
try and raise some money from her and I attempted to make a 
call from the airplane returning to the United States, but 
the line was so scratchy you couldn't make a solicitation on 
it. 

fi Has there any suggestion of raising any money from 
any European entities or individuals? 



UNCUSSinED 



446 



NAME: 
26S1 
2652 
2653 
265<4 
2655 
2656 
2657 
2658 
2659 
2660 
2661 
2662 
2663 
266t4 
2665 
2666 
2667 
2668 
2669 
2670 
2671 
2672 
2673 
267M 
2675 



HIR2S1020 



UNCLASSIFIED 



PAGE 110 



A I don't recall any discussions during th* Paris 
trip about raising money iron Europeans. 

2 Uhen do you recall any discussions about raising 
noney izom Europeans? 

A In Novenber oi 1986 ue flew over there and were 
over there for about a week before returning on the day that 
Colonel North was relieved of .is post and-- 

2 When you say ue . who do you men? 

A Myself, Hr . Channel, tlr . Conrad, Hr . Flannery, Ms. 
ouaW 
ncLMBIlin and I don't remember if Cliff was there ox not. 

S What uas the purpose of that trip? 

A Many purposes. Number one. we were working on^ 
through another one of Hr . Channel's entities. Western Goals 
Foundation. We working on — I didn't really understand the 
mechanics of it — buying a portion of some radio stations in 
Germany and we were going over there to iron out the details 
and sort of organize it and learn more about the project, so 
that ue could come back and raise more money for it. 

5 Were there any aspects of that trip that were 
related to fund-raising for the Nlcaxaguan resistance? 

A Ko, not that I recall, 

fi Did you ever meet Hr . Roy Godson? 

^ A Roy Godson? 

6 yes. 

A Sure don't recall meeting anybody by that name. 



UNCUSSIFIED 



447 



NAME: 
2676 
2677 
2678 
2679 
2680 
2681 
2682 
2683 
268'4 
2685 
2686 
2687 
2688 
2689 
2690 
2691 
2692 
2693 
269M 
2695 
2696 
2697 
2698 
2699 
2700 



iNCLASSlRED 



P»GK 111 



HIR251020 
Who is he? 

2 If you don't know hlm> it is not ralevant. 
A Don't ask questions, tight? 

HK. OLIVER: I would like to enter into the record 
at this point and ask the reporter to mark Littledale 
Exhibit Kunber 3 a packet of documents which contains the 
House identification numbers on the front page, the 
Identification numbers which have been placed there by rir . 
Channel's ftomxift -. 

A 

(The document referred to was marked as Littledale 
Exhibit Kumber 3 for identification. 1 
BY HR. OLIVER: 

2 Z would like to ask you to examine the second page 
of that, the page after the numbers, identification number 
37766. and tell me whether or not that Is your handwriting? 

A It most certainly is. 

2 Hhat is that document. Mr. Littledale? 

A It is a file card we keep on contacts made with 
contributors and potential contributors. 

2 Hhen you say we. all of the fundf raisers kept cards 
like this? 

A All of the fundilfxalsezs were supposed to keep cards 
like that. 

2 This document seems to indicate that the first 
contact with the subject of this card. Hz. nelvln Salwasser. 



uNcussra 



448 



NAHZ: 
2701 
2702 
2703 
270M 
2705 
2706 
2707 
2708 
2709 
2710 
271 1 
2712 
2713 
27111 
2715 
2716 
2717 
2718 
2719 
2720 
2721 
2722 
2723 
272U 
2725 



HIR251020 



ONCUSSIFIED 



PAGE 112 



was on August 5th, 1985; is that ooxraet? 

A SaptenbAZ 5th, 1985. 

2 Saptember 5th, 1985, that is cortaet. How did you 
gat Mr. Salwassar's nana? 

A It was given to ma by Ht . Channal. 

8 And whan you callad Hz. Salwassar, doas this card 
reflect the first conversation or a series of conversations? 

A Hall, the entire card reflects a series of 
conversations. What it really reflects is my inprassions of 
conversations, but as you can see on line one, September 5, 
some impressions, then you can note that on it looks like 
the eighth or ninth line says that on September 17, which 
means I called him on September 17 and that had him using 
lines to the effect of ''your money already being used. 
Wish to discuss this at meeting.'* 

This was an attempt to get him to come to a meeting 
September 30--Z can't make it — spoke to him again. He can't 
make it on October 17. ''Call me in a week about meeting 
out there.'' In other words, call ma later about the 
possibility of coming to see me. Ha brought up the subject 
of Afghanistan, Indicating concern about that. 

Novambar 1 I contacted him again. Ha alluded that 
a« how ha has got — I obviously solloltad him and ha aKplalned 
that ha was having soma financial problems at the moment. 
He knew that at a meeting wa had had three raprasantatlvas 



UNCLASSIFIED 



449 



NAME: 
2726 
2727 
2728 
2729 
2730 
2731 
2732 
2733 
2734 
2735 
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2739 
27t«0 
271*1 
27M2 
27143 
27I4U 
2745 
27>46 
27U7 
27M8 
27U9 
2750 



HIR251020 



UNCLASSIFIED 



PAGE 113 



fiom the contxasS had been there, suggested we should kill 
some liberal congressnan. 

He had been at a dinner with Bunker Hunt. He 
mentioned something about something called CIS. I don't knou 
what that is, and Friends of the Americas. July 22, he gave 
S10,000 for iood . A notation that his son's name was Brent, 
another notation that sometime in 198i« he gave «200 to 
Western Goals. There. 

2 What did he tell you about the dinner he had had 
with Bunker Hunt? 

A He didn't tell me anything about it, just that he 
had been there. 

fi On the first line of the card that is in your 
writing after the address, it says, ''RABID antif communist . 
He should invade Nicaragua. The media is not misguided. 
They are communists and the same with Congress.'* 
Is that your first conversation with hia? 

A Uh-huh. 

e Did that make you think he was a good prospect? 

A Oh, yes. 

fi Then did you arrange to go out and meet with him in 
California at a later time? 

A At a later time. 

fi Uho went with you? 

A Hell, as I mentioned eazllez, I want out to see him 



>mmim 



450 



KAHE: 
2751 
2752 
2753 
27SU 
2755 
2756 
2757 
2758 
2759 
2760 
2761 
2762 
2763 
276M 
2765 
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2770 
2771 
2772 
2773 
277«l 
2775 



HIR251020 



yscussifito 



PACE im 



in January, but that aeeting nsvAc took placa bttcausa ha was 
In Pennsylvania, and I wound up flying from California back 
to Pennsylvania and seeing him in Pennsylvania. 

Q Is this one of the individuals Mho later act with 
President Reagan? 

A No . He never net with President Reagan. 

fi He met with Colonel North? 

A He met with Colonel North in September or October 
of 1986. 

e And how much money did he eventually contribute? 
Do you know? 

A I can't give you a down to the last dollar and 
cent, but I would say all totaled it was probably about 
five, six and 30 — 76, 82 — I would say somawhere between 80.000 
and «95,000 to all the various and sundry Channel entities 
between September 5, 1985 and February or so of 1987. 

fi Hhen you said that he said he wanted to kill some 
liberal congressmen, was he being faoetlous? 

A Hell, he said something along the lines of. '*Oamn. 
we should kill some of these damn liberal congressmen.*' He 
was not suggesting that we arrange a hit team. no. 

a In other words, he was being facetious. 

& Yes . 

ft Z would like you to turn the page to document 
81797. Is that your handwriting? 



MUSSW 



451 



UNCLASSIFIED 



HXni- HIK251020 U f 1 lil_niJlJI I IL.U P&GK 115 



2776 
2777 
2778 
2779 
2780 
2781 
2782 
2783 
278X 
2785 
2786 
2787 
2788 
2789 
2790 
2791 
2792 
2793 
279U 
2795 
2796 
2797 
2798 
2799 
2800 



A It is. 

fi Doas that card icflact youx discussions with Mrs. 
Emily Hoodruii? 

A Y*s, it dotts. 

C On tha third and last lina on 10/28, it says--uould 
you raad that baginning with tha third to tha last lina 
thara? 

A Cartainly. "Ootobar 28. Ill-Spaaking with 
ragazding Nicaragua. Kursa junpad on phona . you hava 
listanad long anough, Kaily. This is ridiculous. You hang 
up right now. E»ily Hoodzuii, E.H. Apologlsad, said sha 
was ill and would hava to hang up or nuzsa would gat 
angry . • ' 

S Did you avaz call har back? 

A I triad to oall har a coupla of timas aftar that. 
I navaz again did spaak to har again aftar that. 

fi Do you know what har lllnass was? 

A No, I don't. 

fi Hould you turn to tha naxt paga to docusant 81799? 
Is that your handwriting? 

A It is. 

fi On tha third lina in this doouaant. which I assuma 
zaiazs to Hz. Kannath Giddans or on tha saoond Una oi tha 
taKt, It says ha is part oi Cazibbaan Intaznatlonal 
foundation. Do you know what that Is? 



UNCLASSIRED 



452 



UNCUSSIFIED 



KXni' HIR251020 LI 1 1 ljl_ni 111 i I II II PAGE 116 



2801 
2802 
2803 
280M 
2805 
2806 
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2811 
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2819 
2820 
2821 
2822 
2823 
282tt 
2825 



A No, I don't. 

fi Do you know how iiuch noncy Hr . Glddans Avantually 
gav* at youz zsquast? 

k Hzs . Giddans actually gava tha aonay and tha total 

A 
was «<42,500. Two contributions, ona o£ «10,000> ona of 

«2,500. 

fi Hhat vara thay for? 

A Tan thousand dollars was for tha aducatlonal 
canpaign. Thirty-thousand dollars was intandad as half tha 
purchasa of a Haula aircraft. 

2 Mould you turn to tha naMt paga, docuaant 81800? 
Is that your handwriting? 

A It is, sir. 

e On tha sixth from tha bottom lina it says, and 
corract na if I raad this wrong, ''wants to spaak or 
Goodnan, ' ' is that corract? 

A That is corract, sir. 

e Hhat did ha want to spaak to Spitz or Goodman 
about? 

A This i>, again, Itrs . Giddans. not Mr. Giddans. I 
don't know. Sha just said, ''Gaa whizi I hava got 
soaathlng I want to talk with aithar Spitz or tha Goodman 
bsothaxs about.*' 

e Row did sha know about tha Goodman bzothars? 

A Sha had mat tham at tha dinnar following tha 



UNCLASSIFIED 



453 



NAME: 
2826 
2827 
2828 
2829 
2830 
2831 
2832 
2833 
283M 
2835 
2836 
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2838 
2839 
28itO 
28111 
28*t2 
28il3 
28itK 
28*15 
2846 
28)47 
2848 
2849 
2850 



UNCLASSIHED 



HIK2S1020 liillil Malalll II II P&GZ 117 
■••ting with th« Pi^sid«nt in January oi 1986. 

fi Do you know whath^z oz not what sha Mantad to talk 
to thaa about zalatad to tha talavlsion ads which waza baing 
run? 

I It almost assuzadly did. 

S But you don't know what tha substanea oi what sha 
wantad to say than was? 

k Tha spaoiiics oi it, no. It zalatad to tha 
caapaign. tha public aducation oaapalgn wa waza zunning. X 
can say that iairly coaiortably. 

fi Did you arranga ioz haz to talk to Sfits oz tha 
Goodaan bzothazs oz tha Goodmans? 

i Not that I zaoall doing, ae. 

fi Would you tuzn to tha naxt deeuaant, doeuaant 
81776. Is that youz handwziting? 

k It is, siz. 

fi Is that a cazd ioz Hz. Manzy Salvatoza? 

A It is, siz. 

fi On tha last Una it says. "Saytaabaz 23 SK." I 
assuaa that is •5.000. 

A Cezzaet. siz. 

ft roz South Aizica. 

A Tas. siz. 

fi Hhat was that pzejaot? 

A Ha zan a ooupla of ads aitaz tha Pzasidant vatoad 



UNCUSSIRED 



454 



NAHE - 
2851 
2852 
2853 
285'4 
2855 
2856 
2857 
2858 
2859 
2860 
2861 
2862 
2863 
286>4 
2865 
2866 
2867 
2868 
2869 
2870 
2871 
2872 
2873 
28714 
2875 



UNClASSra 



HIR251020 IIIVIJI noun IkV !''^(>E ^^8 
the South African sanctions measure and before the veto was 
overridden. Sentinel ran a couple of ads saying support the 
President. Don't override the veto. 

2 On the third line of the text it says, ''6/16.'' 
which I assume is June 16. ''10K for Barnes ads.'* 

A Uh-huh. 

C Could you tall me what that refers to? 

A That refers to the Sentinel lobbying ads. There 
was a whole body of ads. one on Michael Barnes that was 
exceptionally tough and a number that were similar, but 
softer in tone and those ads collectively were referred by 
him in the office, too. as the Barnes ads. 

fi Weren't the votes for assistance to the Kicaraguan 
freedom fighters held in the spring and summer of 1986? 

A The first vote took place in Harch of 1986. The 
second vote took place on June 26 or 25 of 1986. This 
solicitation took place approximately ten days before the 
final and successful vote in the House. 

e Was this during Hr. Barnes campaign for the Senate i 

A As I said eaxliez. I don't know whether Hr . Barnes 
was an aotlv* candidate at that time yet. a declared 
candidate. At that time he probably was almost assuredly. 
li not a declared candidate, then everybody knew he was 
going to run. !• think given that It was only three months 
before the vote, he was probably a declared candidate by 



UNCLASSIFIED 



455 



KAHE: HIR251020 llfyi"! A V V | L I L 1 1 PA6Z 119 



2876 
2877 
2878 
2879 
2880 
2881 
2882 
2883 
288U 
288S 
2886 
2887 
2888 
2889 
2890 
2891 
2892 
2893 
289U 
2895 
2896 
2897 
2898 
2899 
2900 



UNCLASSIFIED 



then. 

But tha ads don't raiat to polJitloal advartlsanants 
dona by a political action comaittaa. That lina> Juna 16 > 
spacifically raiars to a «10,000 contribution ha aada to 
Sentinel for the lobbying ads. 

e Ware those ads run in the Washington madia market? 

A The ones relating to Hichaal Barnes Mere. The ones 
relating to othar congressmen were run in their home 
districts . 

2 If the Barnes ads were run in the Washington madia 
market while Mr. Barnes was a candidate ior U.S. Senate in 
this jurisdiction, wouldn't thay be covered by the 
independent expenditures laws? 

A Kot if thay don't mention election, they won't. Hy 
understanding is if they don't mention election, they have 
got absolutely nothing whatsoever to do with campaigns. 
These ads didn't tell anybody to vote JEor or against a 
congressional candidate. They told congressmen to support 
President Reagan and vote ior aid to the iraedom fighters . 
Z don't see what that has to do with an election. 

fi Hould you turn to the next page to document 8177*4? 
Is that your handwriting? 

A It is, sir. 

Q It indicates on the next to the last line "6/16 
*500 for Barnes ads.'* Has that for the same purpose you 



UNCUSSIFIEO 



456 



HAKE: 
2901 
2902 
2903 
290M 
2905 
2906 
2907 
2908 
2909 
2910 
291 1 
2912 
2913 
291>( 
291S 
2916 
2917 
2918 



UNCLASSIFIED " 



HIR251020 lliyi.l U.A.MI iril PAGE 120 
described for previous contributors? 

A It certainly was. 

fi Hould you turn to the next page to document 81851? 
Is that your handwriting? 

A It is. 

8 In the middle of the page it says these are the 
same congressmen that in most cases voted against aid ior 
the freedom fighters, and then it lists Hike Barnes, Senator 
Cranston. Dellums. Chris Dodd, Solarez — I assume that is 
Solarz; is that correct? 

A Yes. 

S Hel Levine, Gus Savage, Hike Fowler and Garcia. 
What was the purpose of this listing, and what does this 
note refer to? 

A This specifically is notes made pursuant to the 
formation of the Anti4^errorism American Committee, and this 
discusses some of the candidates that — or congressmen that 
the Antitjferrorism Committee intends to target for defeat. 



UNCUSSIHED 



457 



NAME: 

2919 
2920 
2921 
2922 
2923 
29214 
2925 
2926 
2927 
2928 
2929 
2930 
2931 
2932 
2933 
2934 
2935 
2936 
2937 
2938 
2939 
291)0 
29M1 
29i«2 
2943 



HIR251020 



RPTS CANTOR 



OCHN HILTON 



PACK 121 



UNCLASSIFIED 



[6:30] 



2 Th« Antltarroilsm Anarlcan Comnlttc* was daslgnad 
to dttittat congiassmen who voted against aid for th« ire«dom 
fightar in Nicaragua? 

A It was dasignad to daiaat congrassitan who did not 
support tha Prasidant's antitarrorisn policias. As I 
mentioned earlier in tha document that one oi you all showed 
me. it specifically was iormed to defeat candidates that did 
not favor President Reagan's policy of giving the CIA sore 
authority to conduct covert antiterrorism policies. It 
wanted to target candidates that by not supporting the 
President on Nicaragua were supporting terrorism and hurting 
his antiterrorism policies and it wanted to target 
candidates that ware not voting for mote money for embassy 
security. It was to target candidates that ware not 
supporting all aspects of President Reagan's antiterrorism 
policies . 

fi There are stars besides the names of Hike Barnes, 
Senator Cranston, Gus Savage and Hy^ch/fowler . Do you Know 
why you put stars there? 

A I can't remember now. 

fi Would you turn to the next page, document 760M0. 



UNCLASSIFIED 



458 



Kxnz- 

29*45 
2946 
29147 
29>48 
29U9 
2950 
2951 
2952 
2953 
295<4 
29SS 
2956 
2957 
2958 
2959 
2960 
2961 
2962 
2963 
296U 
2965 
2966 
2967 
296S 



(INCLffiSinEO •■ 



HIR2S1020 IllVlil «-*-^'-Mjj~§r|J '*''' ^22 
Is that your handwriting? 

k It nost certainly is not. 

fi And tha naxt paga. docuaant 760*4 1, that is also not 
your handwriting? 

X That is not my handwriting aithax. 

2 Do you know whosa handwriting it is? 

A I won't swear to it. but I baliava it's tha 
handwriting oi a chap that quit. Uhat was his nana? Hike 
Icaballis. I baliava that is his handwriting. I'a not 
sura . 

e Why did ha quit? 

A Ha got another job. I think tha pressure oi all 
this craziness in the winter and spring of 1987 was getting 
a little bit heavy ior hi*, so he decided to go elsewhere. 

fi Do you know anything about an appointaent with Lyn 
Mofl'iger ior any oi the oiiiclals oi Kr. Channell's 
organizations? 

k X Know that at soae point Spits set with Lyn 
Noiiigez about something, but I really don't know what. 
Didn't we pay h±u some money ioz something? Has it 
MeiiigezT 

ft Do you remember? 

^ i I know there was soma fmlloii who used to be an 

administration oiiioial who wa retained ioz X think this 

winter ior a while, but Z don't zamambaz ior sure who it 



4 

I 



UNCLASSIFIED 



459 



UNCUSSIFItO 



KkHC: HIR251020 VllVkllWH I to K/ PAGE 123 

2969 was. SoB*body w* wcr* paying 420,000 a nonth to thalr ilxa, 

2970 but I don't ranambat. 

297 1 fi Do you ramambat what It was iox? 

2972 X Public ralations tagatding this whola mass. 

2973 2 Would you tuxn to tha naxt doouaant. docuaant 
297M 378t43. Is that your handwriting? 

2975 A Yas, it is. 

2976 & On tha top antry it says. ''20K ohacK." and than 

2977 basida that Hal Salwassar, and I assuna that is his phona 

2978 numbar, and than it says, *'Hin struggla within 

2979 administration." Hhat doas that raiar to? 

2980 A Tha Amarican Consarvativa Foundation was going to 

2981 sponsor a coniaranea on tha support oi tha Insurgant 

2982 wariara, and tha logic bahind this coniaranca on insurgant 

2983 wariara or ona of tha logics bahind it was that thara ara a 
298>4 certain amount of paopla within tha administration that 

2985 support tha idaa oi tha so-callad Raagan doctrina arming 

2986 antif communist guarrillas around tha world, and thara ara 

2987 cartain that ara not tarribly in iavox oi it. and ona oi tha 

2988 thaorias bahind this oonfazanoa was that it was to halp our 

2989 slda of that, if you will. 

2990 .' a ind Kr . Salwassar was contributing ior that 

2991 purposa? 

2992 A Ha was going to glva monay ioz that. yas. In tha 

2993 and, ha navar did. 



HHoussra 



460 



Nine 

29914 

299S 
2996 
2997 
2998 
2999 
3000 
3001 
3002 
3003 
300<4 
3005 
3006 
3007 
3008 
3009 
3010 
301 1 
3012 
3013 
301U 
3015 
3016 
3017 
3018 



UNCUSSIFIED 



HIR2S1020 llllUl_niJIJII ILLI PAGE 12U 

2 On the last line it says, ''Ollia idea.'* Has this 
conierenca Oliver North's idea, on the last two words of the 
third line? 

k So Spitz told ne . 

2 Spitz also told you that Ollie was terribly 
worried ? 

A Yes. 

S What are the last two words on the second line, the 
word before ''report'*? 

A ' ' Bring . ' ' 

e Uhat report were you referring to? 

A The report that the conference would produce. 

fi And that that report was supposed to be brought to 
president Keagan? 

A Correct. 

e Did the conference ever take place? 

A No, it did not. 

2 The next entry is under Barbara Newlngton. Would 
you read that entry after Barbara Kewington, please? 

''Phone Numbei^^^^^^^^^^H' ' 
''All now. Green set this up before he disappeared. Green 
to be there. Getting money for grant for him. Private. 
Her have dinner with. Very little left. Some used by Hz. 
Green before Thanksgiving.*' 

e Could you tell me what that refers to? 



\ 



uNWSsra 



461 



NAME: 
3019 
3020 
3021 
3022 
3023 
302(1 
3025 
3026 
3027 
3028 
3029 
3030 
3031 
3032 
3033 
303*1 
3035 
3036 
3037 
3038 
3039 
30>lO 

3om 

30*t2 
30U3 



HZR251020 VllVkllWII IImI/ PAGE 125 

A Hhsn th« An*xlcan Consaxvfttlv* Foundation iizst 
baeaatt activtt and staztad soliciting funds. Ma solicited 
SOB* aonay fzoii--ot Spitz solicitad so«a aonay fzoa Hzs. 
Nawington that want into tha ACF account, and that was to ba 
usad ioz. shall wa say. oii-tha-zaeozd tzaval to Cantzal 
Aaazica by Colonal Nozth. oz at laast that is what I was 
told it was to ba usad ioz. That axplains tha ''vazy llttla 
lait. Soaa usad by Itz . Gzaan baioza Thanksgiving.'* ''Maz 
hava dlnnaz with him.*' haz hava dlnnat with, that is faizly 
stzaightiozwazd. Wa want haz to coma and hava dlnnaz with 
hia. 

fi Sid Hz. Channall tall you that this aenay that had 
eoaa izoa Hzs. Nawlngton had baan usad ioz oii-tha-zaoozd 
tzaval by Colonal Nozth to Cantzal Aaazioa? 

A Ko. ha didn't tall aa that, la told aa to say 
that. 

e Ra told you to say that to Hzs. Nawlngton? 

A That's eozzaot. Hall. no. axeusa aa. Ha told aa 
to say that soaa of tha aonay — that thaza was vazy llttla of 
tha aonay sha had glvan iM^i «nd that soaa o< it had baan 
usad by Hz. Szaan. i.a.. Colonal Nozth. baioza Thanksgiving, 
and Insoaueh as tha statad puzposa oi tha aonay had baan off- 
tha-zaoozd tzaval. ha was In assanca tailing aa to say that 
is what it had baan usad ioz. 

e But you knaw it hadn't baan usad ioz that? 



BNtUSSIFIED 



462 



NAME: 
30Ut4 
3045 
30U6 
30U7 
30(48 
3049 
3050 
3051 
3052 
3053 
3054 
3055 
3056 
3057 
3058 
3059 
3060 
3061 
3062 
3063 
3064 
3065 
3066 
3067 
3068 



HIR251020 



UNCLASSIFIED 



PAGE 126 



A I had no idea hou it had been us«d . I nevar 
figured out where it went, unless I saw it in the iom of a 
television ad or something like that. 

fi The next entry is ''Ellen Garwood.'' The first 
line says, ''Hew tax-deductible statenent . ' ' 

A Right. 

S What does that refer to? 

A It refers to the fact that ACF was a full-fomed 
organization that had just recently received its initial 
ruling fron the IRS. 

2 And then it says, ''This was Green's big deal.'' 
What does that mean? 

A It means that this was something that Colonel North 
wanted very much. 

S Then the next line says, ''This to be his 
legacy--permanent support for covert war. Green wants her to 
come have dinner with him.'' What does that refer to? 

A It means that the idea of permanent support fox 
covert warfare, support to the guerrillas, the Reagan 
doctrine, so-called, is to be Ollie North's permanent legacy 
getting it firmly entrenched and established, and that 
Colonel North wants her to come and have dinner with him. 

fi Has this what this money was supposed to be used 
for? 

A It was to be used for the conference which was 



UNClASSinED 



463 



HIR251020 



lii^OLASSIFIED 



PAGE 127 



going to h*lp firmly entrench the idea oi the so-called 
Reagan doctrine. 

Q Pernanent support for covert war? 

A Yes. 

8 But the money itself was not to be used? 

A Ho, not for buying guns. It is to be making that 
policy a permanent policy that does not end with the Reagan 
administration . 

2 On the last entry on that page it's under the 
heading of ''Barbara Chrastian.'' 

A Christian. 

2 Could you read the first two lines? 

A Certainly. 

2 And explain what they mean? 

A ''Get her tape on world polo. When is Tambo 
coming. Strategic irregular warfare. Jack Hheeler.'' 

She had taped a news broadcast on a VMS tape that 
also happened to have a tape she had made of a world polo 
game she had taped on television. She sent the tape to 
Spitz and she now wanted it back because she wanted the tape 
of the polo match. She was always sending Spitz or other 
pe'ople in the organization tapes. VHS tapes, tape 
recordings, whatnot. Tambo was coming to Washington 
regarding something, and she was very anxious to make sure 
that there was a demonstration against him when he got here. 



yNClASSlFIED 



464 



KAHE: 
309(« 
3095 

3096 
3097 
3098 
3099 
3100 
310 1 
3102 
3103 
3101* 
3105 
3106 
3107 
3108 
3109 
3110 
3111 
3112 
3113 
31 m 
31 15 
31 16 
31 17 
3118 



UNCUSSIFIED 



HIR251020 IllUOal U.l.lll II II PAGE 128 
and she wanted me to find out when h* was going to b* here, 
and she suggested I read something called ''Strategic 
Irregular Warfare,'' by Jack Wheeler. 

Q And who is Tambo? 

A He is one oi the communist leaders of the African 
National Congress. 

S Why did she want to know when Tanbo was coming? 

A I guess she wanted a demonstration against him to 
take place. He was going to be meeting with Sjihultz, and 
she wanted a big demonstration outside the State Department. 

2 Were you to have something to do with arranging 
that? 

A No. I was to find out the specific date he was 
going to be here. 

2 And do you know what she was going to do about 
arranging a demonstration? 

A There was some group of black Republicans down in 
Louisville that was going to try and bus a bunch of black 
people up here to demonstrate against him* far more 
effective having a bunch of black people demonstrating 
against an African communist than a bunch of white people. 

2 Did she find such a group to do that? 
^ A I don't know. I heard such a demonstration took 
place, but I don't know that she had anything to do with it. 

2 Would you turn to the next page, document No. 



UNCLASSIFIED 



465 



HAKE: 
31 19 
3120 
3121 
3122 
3123 
31214 
3125 
3126 
3127 
3128 
3129 
3130 
3131 
3132 
3133 
3131* 
3135 
3136 
3 137 
3138 
3139 
31>40 
31>4l 
31>42 
31143 



HIR251020 



UNCLASSIFIE 



PAGE 129 



3781414. Is that your handwriting? 

A It is. 

2 It says on the first lin«> ''Hel ♦15,000.*' Is 
that Mel Saluassttr? 

A It is. 

2 Then it says--would you read the next paragraph for 
ne , please? 

A I would be delighted to. ''He are going to have 
the meeting, either give the money to Ollie or pay him to 
speak. Heed you to be one of five sponsors. Need you to 
come see Ollie and go to dinner with him.'' 

2 What does that refer to? 

A What it refers to is the conference that ACT was 
going to sponsor. He were going to figure out some way to 
give a grant to Colonel North for his speaking there, to 
help him out with his legal fees and whatnot. This, of 
course, was after Colonel North had been relieved of his 
post . 

Did you do that? 

Did we do what? 

Did you arrange to give a grant to Colonel North? 

No. The conference never took place, as I said 



e 

A 

S 
A 

before . 

2 Do you know of any grants or spea*:ing fees that 
were ever given to Colonel North? 



UNCUSSinED 



466 



HIR2S1020 



UNCLASSIFIED 



PAGE 130 



A Absolutaly not. 

2 Does th« last part oi that docunftnt xaier also to 
the conference which never took place? 

A It does. 

2 So the line that says. ''R.R. meets with us 
Thursday ' ' -- 

A ''Given hin with document on covert war.*' Bad 
grammar on my part. 

8 That never took place? 

A That's correct, sir. 

Q Mould you turn to the neKt page, docunent No. 
378M6. The handwriting in the margin is mine, and that is 
my question. Hhy were you interested in a foundation of 
this nature? 

A I'm going to have to take a moment to read it, if 
you don't mind. 

2 Could you read it out loud? I can't make it out. 

A The entire page? 

2 If you would start. ''If complaints,'* or whatever 
that is. 

A ''If complaints, this was Green's big deal. He is 
getting part of this. He wants to go out to dinner with 
you. Go to Hhite House with product. Seven sponsors. So 
important future of country. Green suggests we suggested we 
start this. Can use this foundation in future to help Green 



UNCUSSIFIED 



467 



KIASSIFIEO 



NAHE: HIR251020 || B Y Ui-Flvj' V ■ ■ 1^*^ PAGE 131 

3169 in variety of ways. Barbara Nawington, *30,000, O'Haill, 

3170 «30,000. Ha is only parson to get reporter there.'* 

3171 2 Hhat caused you to nake these notes? 

3172 A These were notations--notations I nada while 

3173 listening to Spitz giving ne the logic for the solicitation. 
3 17(4 & And did you make the solicitation? 

3175 A Yes. I believe I did. I know that I nade it with 

3176 Barbara Newington and I'n pretty sure I nade it of Ellen 

3177 Garwood. 

3 178 S Did they contribute money for this foundation? 

3179 A Barbara Newington did. Ellen Garwood did not. 

3180 2 Hhat happened to the money? 

3181 A It was deposited in the American Cons-ervative 

3182 Foundation bank account, and what happened to it from there, 

3183 I couldn't tell you. It probably went to pay legal fees. 
318<4 fi Has the purpose of the foundation to your knowledge 

3185 to help Green in a variety of ways? 

3186 A To help his policies/ sure, to help his whole idea 

3187 of support for insurgent warfare against communist 

3 188 countries . 

3189 fi So you know whether he ever used any of the money 

3190 oi any of the money was ever used for him? 

3191 ^ A X haven't the foggiest. 

3192 fi Hould you turn to the next page, document No. 

3193 378U7. Is the handwriting on that page yours, with the 



UNCLASSIFIED 



468 



HIIt251020 



UNCLASSra 



riGt 132 



NAHZ 

319<4 •xcaption o£ tha handuxitlns In tha low«x xlght-hand oornat? 

3195 I It Is. 

3196 e In laxga lattaxs that* It says, *'Hho li Jana's 

3197 lawyax?" 

3198 k Right. 

3199 S Uhat wai that In xafaxanea to? 

3200 k An instruction ixom Spitz Channali iox ma to iind 

3201 out who Jana's lawyax was. 

3202 fi Hhy did ha ask you to do that? 

3203 k X couldn't tall you. 
320(1 S Did you iind out? 

3205 k No. 

3206 8 On nuaaxal III thara on that pas* It says. "Sxaan 

3207 phona iox" — 

3208 k "Hal." Milllaas and Sullivan. 

3209 ft What doas that xaiax to? 

3210 k It aaans gat tha phona nuabax ixoa HilliaMS and 

3211 Sullivan iox Hal Salwassax so ha can oall Olivax Kexth. 

3212 fi Sid ha do that? 

3213 k Ha did. 

32m ft Did ha call Olivax Noxth? 

3215 .' k To ay knowladga. ha did not. 

3216 < fi Hould you tuxn to tha naxt doeuMant. docuBant No. 

3217 37818. Is tha handwxiting on that paga yeux handwxiting 

3218 with tha ancaption oi tha handwxiting in tha lowax xight- 






UNCLASSIHED 



469 



KAnE = 

3219 
3220 
3221 
3222 
3223 
322<4 
3225 
3226 
3227 
3228 
3229 
3230 
3231 
3232 
3233 
323(4 
3235 
3236 
3237 
3238 
3239 
32>40 
32141 
32t42 
3243 



T 




hand corner? 

A It is. 

Q Does any of the writing on that page refer in any 
uay to Nicaragua or assistance to the Kicaraguan resistance? 

A It does not. 

e Would you turn to the next page, docunent No. 
37853. Is that your handwriting? 

A It is. 

e The top of the page says, ''Ask Rich.'* What does 
that refer to? 

A Ask Rich Hiller. 

2 And would you read the next two lines and tell me 
what it refers to? 

A ''>4>4,000 Libyans and Iranians in U.S. Who was it 
threatened Ronald Reagan, Heritage foundation, Oliver North 
and Singlaub . * * 

This was a piece of paper I put together 
preparatory to raising funds fox the Antiterrorism American 
Committee. It was notes I made to myself for a fund-raising 
letter that we were going to send out to try and raise some 
money fox the Antiterrorism American Committee. And number 
one. I was to ask Rich Hillex some questions xelating to how 
■any Libyans and Ixanians thexe are living in the United 
States, and who it was that had in an Intarvlaw with ABC 
News threatened the life of Ronald Reagan, threatened to 




iSi-i 



vv\ 



470 



Kknc = 

3245 
32146 
32U7 
32U8 
32149 
3250 
3251 
3252 
3253 
325X 
3255 
3256 
3257 
3258 
3259 
3260 
3261 
3262 
3263 
326U 
3265 
3266 
3267 
3268 



'iF 



r^ 




HIR251020 VI«WWI1WW»" -— — pjig£ ,34 
blow up thtt Hcritag* roundatlon, thxaatanad th« Hi* o£ 
Oliver Nozth and thzaat«n«d th* lii* of G*n*ral Singlaub. 

fi Would you turn to th* n*xt pag*. documant Ko . 
3779 1. Is that youE handwziting? 

A It is > siE . 

fi What do«s tha sacond lina Hith ''TAX 
DEDUCTIBILITY*' undazlinad in all caps zaiaz to? 

A What it zafazs to is tha fact that Mhan I callad 
him and fizst staztad soliciting his, ha Mas assantially not 
paying much attention to ma, and than I got down to tha 
actual solicitation part and said wa naad you to glva ^ 
amount of money, and all of a sudden ha started talXlng to 
ma, and in the solicitation, I had spaoiflcally said that 
your help is tax deductible, and as soon as he heard that, 
you will see it says, ''tax deductible made his ears perk 
right up.'' He wasn't interested until he heard that the 
donation was tax deductible. 

fi And did he ultimately make a tax-deduotlble 
contribution? 

A He made two. 

fi And to which entity did those — 

A The national Endowment for the Preservation of 
Liberty. 

fi When it says in there, the references in thosa 
notes to public diplomaoy, what does that refer to? 



UNCLASSinED 



471 



KAME: HIR251020 



UNCLASSIFIED 



PACK 135 



3269 
3270 
3271 
3272 
3273 
3274 
327S 
3276 
3277 
3278 
3279 
3280 
3281 
3282 
3283 
328i( 
3285 
3286 
3287 
3288 
3289 
3290 
3291 
3292 
3293 



A Pafor« th« Cantxal Amsrican iracdom ptogran baoama 
known as tha Cantral Anacican izaadom pzograa. It was 
tafarzad to as the public diplomacy progzaa. 

& Of tha National Endowmant ior tha Prasazvatlon of 
Liberty? 

A That's cozract. It was tha educational canpaign. 

S Hould you tuzn to tha next page. No. 37800. Next 
to the parson's nana, tha top of tha page, it has on there 
''ATAC.'' Is that tha Antltarrozlsa American Committee? 

A Yes, ATAC is the Antiterrorism American Committee. 

e Then on the first line dated 9-25, it says, ''How 
can this be tax deductible?" Hhat does that refer to? 

A It refers to the fact whan Z solloitad him fox 
money for the airlift that I mentioned aarliaz. ha said, 
''Gee, how can this project be tax daduotlbla?" 

e Hhy do you have ATAC on tha top of that card? 

A Because after the Antltatrozism American Committee 
was formed, I flipped through my little file box with all 
these file cards in it and pulled out people that seemed 
like a good prospect to call for the Antiterrorism American 
Committee. 

S Would you turn to the next page, document No. 
37802. and tell me if that is your handMzltlng. 

A It most certainly is. Boy, I wrote a lot, didn't 
I? 



UNCUSSIRED 



472 



K»ni HIR25,020 y|^|||^rt^)Oii 1^-^ "" " 

329U 2 Is this another xaittr*nc« to anothar contxlbutoz? 

3295 A Anothaz prosp«ot. 

3296 S Did this person give money? 

3297 A Not to my knowledge. 

3298 a Why do you have 15K written in the middle oi the 

3299 card? 

3300 A A suggestion to myself as to how much I should ask 

3301 him for. 

3302 2 Mould you turn to the next page, document Ko . 

3303 3780>4. Is that your handwriting? 
330M A Yes, it is. 

3305 e Does that card reflect your conversations with Hr . 

3306 Tom Claggett, Jr.? 

3307 A It most certainly does, and at least one 

3308 conversation with his secretary. 

3309 fi How much money did Mr. Giddens ultimately give? 

3310 A Hr . Giddens? firs. Giddens was the one that made — 

3311 . e I mean Hz. Claggett. I'm sorry. 

3312 A The total amount of his contributions I believe 

3313 amount to, and I can't swear to this, but I believe his 
3311 total contributions were «25.000 to the National Endowment 

3315 for the Preservation of Liberty, and «1|000 to the American 

3316 Conservative Trust. 

3317 Q Was one of those contributions for a helicopter? 

3318 A Host certainly was. Not for a helicopter. It was 



UNCLASSinED 



473 



NAME: 
3319 
3320 
3321 
3322 
3323 
332t4 
3325 
3326 
3327 
3328 
3329 
3330 
3331 
3332 
3333 
333>4 
3335 
3336 
3337 
3338 
3339 
33it0 
33141 
3342 
3343 



HIR251020 



UNCLASSIFIED 



PAGE 137 



for a nissile to shoot a helicoptaz down with. 

2 So when you zefez in thar* to--I assuma you ara 
rafezzing to what he said. ''X would zaally lova a piece of 
the helicoptez. I got. I want to get me anothez of those 
helicoptezs , ' ' that zefezs to the helicoptezs that weze 
going to be shot down with the missiles that he pzovided the 
money foz? 

A Yes. 

2 Did you tzy to get him a piece of one of those 
helicoptezs? 

A I mentioned to Spitz that if we could obtain a 
piece of twisted zubble. it would be wondezful, and be vezy 
good foz fund zaising. To the best of my knowledge, we weze 
unsuccessful . 

2 Would you tuzn to the next page, doeument Ho. 
37805. Is that youz handwziting? 

A It is . yes . 

2 Hhat does--could you zead the fizst two lines theze 
and tell me what they zefez to? 

A "Means Johnston. Jz . . bizth date 11-19-1>t. Ed 
Heisel to call.'' Those aze actually two sepazate things. 
TlTe Means Johnston. Jz., is somebody that Ed Ueisel told ae 
to get in touch with, and I have made a not to myself, 
''call this Mean Johnston. Jz.. chazaotez and tell him Ed 
Weisel said to call. 



HNKiftssro 



474 



KAHE: HIR2S1020 







PAGE '138 



33(4M 
3314S 
33M6 
33U7 
33>(8 
33U9 
3350 
3351 
3352 
3353 
335U 
3355 
3356 
3357 
3358 
3359 
3360 
3361 
3362 
3363 
33614 
3365 
3366 
3367 
3368 



»■ 



Th« birth dat« 11-19-1U, social sacurity Ko .i 
cefars to Hi. Tom Claggett's birth date and social 
security nunber. which is required ior getting into the Old 
Executive Oiiice Building. 

2 That was ior the purpose oi meeting with Colonel 
Horth? 

A For one oi the meetings with Colonel North, yes. 

2 Could you turn to the next page, document Ko . 
378U2. Is that your handwriting? 

A It most certainly is . 

e What does that document reier to? 

A It reiers to notes I have made ior myseli ior a 
solicitation ior a meeting to take place with President 
Reagan. 

C And did you use the solicitation? 

A A variation on it. I sincerely doubt I ever used 
those exact words. 

fi What meeting was this in preparation ior? 

A I really couldn't tell you whether that was the 
meeting that took place in January oi 1986 or whether it was 
the one that was supposed to take place in Hay oi 1986, but 
wITlch never happened. 

^ fi Hould you turn to the next page, document No. 
37787. Is that your handwriting? 

A It is. 



mmssm 



475 



KAME 
3369 
3370 
3371 
3372 
3373 
337U 
3375 
3376 
3377 
3378 
3379 
3380 
3381 
3382 
3383 
338>4 
338S 
3386 
3387 
3388 
3389 
3390 
3391 
3392 
3393 



HIR251020 



imm 



PAGE 139 



fi I think ue have discussed this gentleman before. 

A Possibly. 

2 Would you turn to the next page, document No. 
37767. Is that your handwriting? 

A It is. 

2 Could you tell me what that is in reference to? 

A Certainly. These are notes I made to myself 
regarding telephone calls to and plans to travel to 
Lancaster. Pennsylvania, to see Hel Salwasser. 

2 What was he doing in Lancaster, Pennsylvania? 

A There on a business trip. 

2 Circled on there is a telephone number, 395-33><5, 
and the word ''Green.'' Does that refer to Colonel Koxth? 

A That refers to Colonel North's phone number in the 
Old Executive Office Building. 

2 Why did you have this on this particular piece of 
paper ? 

A Because Spitz at some point had instructed me to 
call him and so I had written down the phone number. 

2 Sid you call him? 

A I called his office on either two or three 
occasions . 

2 And did you talk with him? 

A I did not speak with Colonel North himself, no. 

2 Who did you speak with? 



IJNCLASSin 



476 



NkHE: 

33914 

3395 
3396 
3397 
3398 
3399 
3U00 
3401 
3K02 
3X03 
3X04 
3M05 
3lt06 
3407 
3408 
3409 
3410 
3411 
3412 
3413 
3414 
3415 
3416 
3417 
3418 



MIR251020 



UNCLASSIFIED 



PftGE 140 



\ lis sacxatsxy. raun Mall. 

S Hhat was tha puxposa oi tha phena call? 

ft llall> thaxa waxa a nuabax oi dliiaxant phona calls. 
Tha ona that I xaeall vaxy spaeiiioally is tha ona in Mhich 
I callad and gava sosa inioxsation to Faun to glva to Ollia 
xagaxding a maating to taka placa tha naxt Moxnlng with Hal 
Salwassax. Tha aithax ona ox two occasions on which Z 
callad Colonal Noxth's oiiica. Z don't xaeall tha spaciiic 
puxposa iox tha call. 

fi Mould you tuxn to tha naxt pa9«> deeuaant No. 
37770. Zs that youx handuxiting? 

ft Zt Bost eaxtainly is. 

e Ha hava — 

ft Oisoussad that gantlaaan alxaady. 

e Hould you tuxn to tha naxt paga in youx axhibit. 
docuaant No. 76033. Zs that youx handwxiting? 

ft Zt is not. 

S Mould you tuxn to tha naxt paga* docuaant No. 
78783. Zs that youx handwxitingr 

ft No, that is net. 

ft Zs youx handwxiting on that paga anywhaxa? 

ft Zt aost caxtainly is net. 
X 8 Mould you tuxn to tha naxt paga, docuaant No.. 
81864. Zs that youx handwxiting? 

ft Zt aost caxtainly is. 






477 



UNCUSSIFIED 



NAME: HIR251020 UllUlariWvll Ikl/ pAGE 1 U 1 



3419 
3U20 
3U21 



2 At the top of that paga it says. 'TV help alert 
and nobillze volunteers fox the grass-roots organizers.*' 
What does that refer to? 



mtmsro 



478 



3>422 
3(423 
3it2M 
31425 
31426 
3427 
3>428 
3(429 
3(430 
3(431 
3(432 
3U33 
3(43(4 
3(435 
3(436 
3M37 
3(438 
3(439 
3UU0 
3(4m 
3UI42 
3(4143 
3U(4U 
3(4(45 
3UU6 



"":■".■■ ONCiASSiFia ■■•■ ■•■ 

DCMN PARKER 

A You really ne«d to s«parat« that paga In hali . Tha 
first astari.sk, okay, everything above that is one thing, 
and everything from that asterisk down is something else. 

e Mould you tell us about the upper hali of the page 
first? 

A Okay. I am kind of foggy on when it is because 
they must--the first half and the second half of the page 
must have been written at totally different times, 
because--no. Wait a minute. Now, I am remembering this. 
What this was is January of 1987 we were starting to figure 
out what our program would be for the next aid request for 
aid to the freedom fighters and this was me starting to make 
some notes from Spitz talking to me about things that would 
be part of our next campaign for aid to tha freedom fighters 
in Nicaragua. 

& It says on there the major focus is to get 
prominent local leaders to besiege congressmen. 

A correct. 

fi Has that campaign ever carried out? 

A Ko . 

e Why not? 

A A number of reasons, probably the most Important 
being that you folks and Walsh's office and tha IRS came 



Mussro 



479 



NAHE 

3MU7 
3>4i48 
3UI49 
31*50 
3US1 
3>452 
31453 
3U5I4 
3US5 
31456 
31457 
31458 
31459 
3146O 
31461 
31462 
31463 
3M6it 
31(65 
31466 
31467 
31468 
3469 
31170 
31471 



HIR2S1020 



UNCL/lSSiFIED 



PAGE 1143 



down on us like a ton oi bricks before we got a chance to 
get it in operation. 

e Would you explain to us the bottom half of the 
page ? 

A Sure. We raised some money to produce a report on 
the various and sundry left-wing organizations that have 
been supporting the S andinistas, the communist guerrillas in 

land the other communist 
organizations in Central America. There are a number of 
organizations I wish you all would get around to 
investigating that have been supplying arms and others to 
communist rebels which has to be a violation of 27 million 
different laws, and we were starting to prepare a report on 
these organizations. 

2 Who was preparing the report? 

A Richard Miller's firm, IBC, was preparing it for 
us . 

fi Did they ever coaplete the report? 

A They never completed it. They completed, I 
believe, three drafts. 

fi Do you know who was doing the work at IBC? 

A Z do not. 

e Hhat does the zeferenoe to '*1S00 must be at Plaza 
of Amezicat Tuesday'* refer to? 

A Hhat It refers to is that tieh Hillez had a list, a 



IIRSWSSW 



480 



HAHE ■■ 
3472 
31(73 
31474 
31475 
31476 
3477 
31*78 
3U79 
31480 
3U81 
31482 
31483 
3t48U 
31485 
31486 
31487 
31488 
31489 
31490 
31491 
31492 
3U93 
314914 
31495 
3*496 



HIR251020 



WlASSIFe 



PkGE 114U 



Xerox bunch of pagss that listed nor* than 1500 groups that 
u«re doing thesa kinds of activities, and u« war* at tha 
Plaza of the Americas Hotel in Dallas. I guess it was. and 
he was to get it telefaxed to us at the Plaza of the 
Americas Hotel . 

2 And the purpose of that was to use it for fund^ 
raising ? 

A That is correct. 

2 And the persons who are referred to on that not* 
were going to be there at tha Plaza of th* Amaricas Hotal? 

A Ho. These people are people that were to be 
solicited for this project eventually. 

C Were they ever solicited? 

A Some of them were. 

Q Did they contribute? 

A Some of them did. 

Q To this project? 

A Some of them did. 

fi Did you tell them that--dld you describe the project 
to them? 

A I did. 

Q And did you tell them that IBC was going to be 
cgmpiling a report? 

A No. 

fi Did you tell them who was going to be compiling a 



UNCUSSIHED 



481 



NAHE: 
3U97 
3U98 
3U99 
3500 
3501 
3502 
3503 
350i( 
3505 
3506 
3507 
3508 
3509 
3510 
3511 
3512 
3513 
351U 
3515 
3516 
3517 
3518 
3519 
3520 
3521 



":::::; UHCUSSIFIEB 



PAGE ms 



A People we uete hiring to do it. 

2 Would you turn to the next page, document 81863? 
Is that your handwriting? 

A It is. 

C What does that refer to? 

A I couldn't tell you. I mean there is a number of 
states listed. Something about a democratic vote in Kew 
York and a democratic vote in Californiat and that is about 
the only sense I can make out of it. I could probably tell 
you more if I had the pages on either side that iuiedlately 
preceded it. and all but totally out of conteKt like this, 
it is very difficult to tell what it was. 

Q Would you turn to the next page, document number 
81862? Is that your handwriting? 

A It most certainly is. 

fi Could you run down that list on« by one and tell me 
what those references axe to? 

There are numbers, I believe, one through seven? 

A Just start with Numbez one? 

fi Yes. 

A Okay. All right. "Call and beat Hel silly." 
This zefezence to calling him and making a very serious and 
heavy-handed solicitation. 

Two, "0'Nell~Hheze stay." Call Bill O'Neil and 



UNCLASSIFIED 



482 



NAME 
3522 
3523 
352(4 
3525 
3526 
3527 
3528 
3529 
3530 
3531 
3532 
3533 
353(4 
3535 
3536 
3537 
3538 
3539 
35(40 
35U1 
35(42 
35(43 
35(4(4 
35(45 
35(46 



HIR251020 



UNCLASSIFIED 



PAGE 1(46 



find out uheia to stay In Caliiornia. 



Three. ''Call Salvatore.'' 

Four, "Call Libby oz Dan Ki^kttat^ a. Get list 



oi 



congressmen on Select Connjittee who are liberals.'* 

e What was the purpose' of that? Did the Seleot 
Committee reier to this committee? 

A I don't know. I am trying to recall that ii you 
just give me a moment. The only way I am going to be able 
to recall that for you is to sit here and literally remember 
when I wrote this down, so it is going to take me a second. 
Yes, okay. It refers to this committee. 

2 Why did you want that list? 

A Ue wanted that list because were goins to run an ad 
that we never got around to running, which was going to 
essentially--! believe it was a 30-second ad that was going 
to be about 20 seconds or so taking advantage of the 
public's opinion of this whole investigation, which is that 
it is a big fat waste of time, effort and money, and it was 
going to expound on what a waste of time, effort and money 
it was and then tell me to call up their congressmen, in 
whose district it would be running, and say, ''Get off the 
President's back.*' 



K^wiO^ 



And we were to call Libby oz Dan KiwUeH . to get 

A 

the congressmen on this committee who would be a likely 
candidate for such an ad in their distzlct. 



UNCussm 



I 



483 



NAHE: 
3SU7 
3Sit8 
35t(9 
3550 
3551 
3552 
3553 
355M 
3555 
3556 
3557 
3558 
3559 
3560 
3561 
3562 
3563 
356U 
3565 
3566 
3567 
3568 
3569 
3570 
357 1 



Sh« works ioz Dan l UwUal fa- 



HIR251020 yil vLnOOiriLiU ^'^'^^ ^'^'^ 

Q Who is Libby? 
A 

Q Did you nake that call? 

A I don't knou. 

8 Did you svez get th* list? 

A Kot that I know oi, but it wouldn't hava cona to 
me. It would have gone to Spitz. 

2 Do the zefetencas in Nunbar 5 to Garwood, Kumber 
six to Ramsey and Number seven to Anderson refer to 
prospective contributions for those ads to be run by 
Sentinel? 

A That is correct. 

S Did you solicit those people for that purpose? 

A Solicited Mrs. Anderson for that purpose. Z 
believe I solicited Ramsey for that purpose, and I don't 
think I solicited Mrs. Garwood, but I am not sure. 

e What do the capital letters A.D.D., refer to in 
each instance? 

A The fact that they are to be solicited for the ad I 
briefed you on a moment ago. 

fi Were those ads ever produead? 
r A I don't think so. Z think we ran them in a 
iiAwspapar, but Z don't believe we ever actually produced 
them in a television form. 

2 So Sentinel ran newspaper ads directed at this 



UNCLASSIFIED 



484 



3S72 
3S73 
35714 
3575 
3576 
3577 
3578 
3579 
3580 
3581 
3582 
3583 
358M 
3585 
3586 
3587 
3588 
3589 
3590 
3591 
3592 
3593 
359>« 
3595 
3596 



HIR251020 



UNCLASSIFIED 



PAGE 1148 



committefti is that correct? 



A I believe so, yes. Xt is called self-defense. 

2 Could you read the last two entries on that page 
and tell ne what they refer to? 

A ''Annie getting car. Cash.'* Annie was Bill 
O'Heil's secretary. She was arranging for a rental car for 
us to pick up at the Merinar Sheraton and cash refers to the 
fact I am to go and get some money froii the bank for our 
trip . 

Q Hhat trip was that? 

T 
A phe trip we took in January to California. 

2 And what was the purpose of that trip? 

A To raise money. 

2 Has the purpose of that trip? To raise money for 
these Sentinel ads? 

A Ko. The purpose of that trip was to raise money 
for the study of leftTtiing groups that I mentioned to you a 
moment ago. 

2 And did you raise any money for that study on that 
trip? 

A Yes. we did. 

2 Who did you raise money from? 
^ A X raised «30.000 from Hel Salwasser. 

2 And was that money given to XBC for the purpose of 
compiling that report. 



UNCLASSIRED 



I 



48S 



MAME. HIR2S1020 y pJl|Lf\00l ■ I L U '*" ^"^ 

3597 A Honey was paid to IBC for th« puiposa of compiling 

3598 that lepott. 

3599 2 Did you ever see that report? 

3600 A I did, yes. Well. I saw one of the drafts of that 

360 1 report . 

3602 S What was the report used for? 

3603 A It never got used for anything in the end because 
360U by the tine the thing was ready we were so busy fighting 

3605 Ualsh and his thugs and you guys off our backs, we couldn't 

3606 do anything. Vie were paralyzed. 

3607 S Would you turn to the next page, document Kumber 

3608 81860 and tell me whether that is your handwriting on that 

3609 page? 

3610 A It is. 

3611 S Would you turn to the next page, document 81859, 

3612 and tell me whether or not that is your handwriting? 

3613 A It is. 

36 111 S Do you recall when this page, when the notes on 

36 15 this page were written? 

3616 A January of 1987, while at a hotel In Dallas. 

3617 e Could you read the last two lines on that page and 
36 18 tell me what they refer to? 

3619 . A ''Trent Lott, Henry Hydi. Bob Livingston, 

3620 California, Bob Michel, Richard Ray. Georgia.'' Now let me 

3621 try and figure out what they refer to. I can't say this for 



UNCLASSIHED 



486 



NAME: 
3622 
3623 
362U 
3625 
3626 
3627 
3628 
3629 
3630 
3631 
3632 
3633 
363(4 
3635 
3636 
3637 
3638 
3639 
36140 
3641 
36U2 
36U3 
36>4<4 
36145 
36>46 




HIR2S1020 wi'i'^— ""- PAGE 150 

absolutely positive, but my guess is that these axe people 
on this committee that we figure are likely to be reasonably 
iriendly toward us, but I am guessing. I don't recall the 
situation in which X wrote it. 

2 In the middle bottom part of that page there is the 
name. ''Perot,'' underlined. 

A Right. 

2 Can you tell me why that entry was there? 

A I was to try and get in contact with Ross Perot and 
try to raise some money from him. 

2 For what purpose? 

A For any one of a half dozen projects that were 
muttering about at that time. The study, Nicaragua, 
Sentinel get off the President's back, possibly the 
Constitution project, any one of a number, just so long as X 
could raise some money from him. 

2 Could you turn to the next page, document 81855, 
and tell me whether or not that is your handwriting? 

A Xt most certainly is. 

2 Hhat do the entries on that page refer to? 

A The first things that have the little sort of 
carets next to them refer to important points in a 
solicitation for the Anti^xerrorism American Committee. 

y 

2 The last entry on that page says, ''Dan call David 
Fisjher,'' and then ''Thursday p.m. brochures done. Get date 



m^^ 



487 



NAME: 
36"47 
36U8 
36<49 
3650 
3651 
3652 
3653 
365>4 
3655 
3656 
3657 
3658 
3659 
3660 
3661 
3662 
3663 
366>4 
3665 
3666 
3667 
3668 
3669 
3670 
3671 



wussra 



HIR251020 Il!l«||| nilllll IE.I/ PAGE 151 
by Friday so we can start calling. uh*n is h* coning to 
D.C.'* Hhat doas that rftier to? 

A That I an to t«ll Dan to call David riS|h*r Thursday 
evening and get the data for the neeting that was to take 
place with the President in May that never did, so that we 
could start calling people to cone to it. ''When is he 
coning to D.C.,'' I don't knou what that refers to. It nay 
have--no, no. I don't know what that refers to. And, ''Get 
date,'' refers-- '' brochures done,'* refers to sone brochures 
that we were putting together for our strategic defense 
initiative progran. 

S Would you turn to the next page, document 18852 and 
tell ne whether or not that is your handwriting? 

A It most certainly is. 

8 Could you tell ne what those entries refer to? 

A They are notes for a solicitation. I can't tall 
you what they are a solicitation for because there is 
nothing to indicate that. But they are notes of the types 
of things that I an to say. 

e Would you turn to the next page, document 81803 and 
tell ne whether or not that is your handwriting? 

A It most certainly is. 

fi What does the entry, ''Calero Christmas.'* 
underlined refer to? 

A It refers to the fund-raising letter and the fund- 



UNCLASSIFIED 



488 



NAHE: 
3672 
3673 
367U 
3675 
3676 
3677 
3678 
3679 
3680 
3681 
3682 
3683 
368it 
3685 
3686 
3687 
3688 
3689 
3690 
3691 
3692 
3693 
369<l 
3695 
3696 



HIK2S1020 



^ — ^5 A>- '.^rii 



PkGE 152 



raising t*lephqjia calls w« iiad« in Dttc*mb«r of 1985 to zais* 
soma Bonay to buy soma littla things ior tha iraadoa 
fightars to bring at Christnas tina to thaiz faaillas. 

e Did this Individual contributa ultiaataly? 

A No, ha didn't. 

Q Turn to tha next paga, doouaant numbaz 37792. Is 
that your handwriting? 

A It most certainly is . 

e There appears to be a list of diiiarant 
contributions there from this particular individual. Does 
this reflect the usual practice of soliciting a contributor 
for a variety of purposes associated with Hz. Channel's 
organizations? 

A What that is is tha note card that I usually keep. 
The note cards you have seen on other people that have 
written lines about conversations, for soma reason I lost my 
original card on Hr . Heisal and so I sat down and sort of 
recreated it by simply listing the dates and contributions 
made . 

Q On tha second line in substance there it says, 

r 

'■Yes to 9/16 briefing,'' *11000. What does that mean? 

A Ha came to a meeting conducted by Colonel North in 
the evening in which Colonel North would stand up and give a 
slide presentation and as a result of that meeting he gave 
us a contribution of 41 1 000. 



UNCIASSIRED 



489 



3697 
3698 
3699 
3700 
3701 
3702 
3703 
3701 
3705 
3706 
3707 
3708 
3709 
3710 

371 1 
3712 
3713 
371U 
371S 
37 16 
3717 
3718 
3719 
3720 

372 1 



UNCLASSIFIED 



HIR251020 llllljlnijijll ILU ff^GI 153 

fi Ther* is anoth«x •ntzy on th« naxt Una oi ''i|/25 
IK KEPI, IK ATAC.'* What do«s that zafaz to? 

A It rafars to tha iact on April 25, I oallad him 
again and convincad him to giva a contribution oi additional 
«1l000 to tha National Endoumant and «1(000 to halp form tha 
Anti-^Tazrorism Amarican Committaa. 

fi Did ha maka thosa contributions? 

A Ha mada tha thousand-dollar contribution! ^^ ATAC. 
I am not sura ii ha mada tha thousand-dollar contribution^ 
to tha NEPL. 

fi Ihara is a lina in thara that says, ''Also is 
calling Patar Rosanblatt. So I can ask him ior dollars.'' 
Did you call Patar Rosanblatt? 

A Ko, sir. 

fi Hhy not? 

A Bacausa I don't think ha avar oallad him. It was 
ona oi thosa things ha said ha was going to do it. and it 
sort oi just got — it want by tha wayslda. It was probably my 
iault, baoausa I probably didn't call him up tha naxt day. 
and say. ''Gaa. did you call Rosanblatt? Hava you told him 
Z am going to ba calling him? What is his phona numbar?'' 
r I probably didn't push it hard anough. It is ona 
oi my major iailings as a iund^ralsar. I don't push hard 
anough. 

fi Tha naxt lina says, "e/ie ior Barnas ads." Ara 



UNCUSSIFIED 



490 



NAM. HIR2S1020 ypHjLnUUli iLU ''*<'' ^^U 

3722 thosa tha ads ralating to th* vot* which took plac* lata 

3723 Juna? 

372>4 A That Is corract. sir. Thay waza zun by Santinal 

3725 ragazding tha vota on AID to tha fzaadoa f ightars . 

3726 Q Can you maka out what tha naKt lina says? 

3727 A It looks lika «1<000 ioz ATAC. Thaza wa go. That 

3728 is IK, ATAC, KIK, meaning Hikulski/CHAV , meaning Chavaz ads. 

3729 fi What was tha puzposa o£ thosa ads? 

3730 A Hall, as I explained earliez, those ads ueze zun by 

3731 the Antif^erzozism American Committee shoztly before the 

3732 democratic primary, and they were to give tha impression 

3733 that Hikulski and Chavez were the only two viable candidates 
373tt and thereby help destroy Hichael Barnes. 

3735 2 On October 27 and October 30 there are two 

3736 contributions — IK for ACT and 3K for ACT. What were the 

3737 purposes of those contributions? 

3738 A Political contributions. 

3739 C Why did you solicit him twice in three days? 
37ii0 A Because I didn't get enough money from him the 
37ti1 first time. 

37142 e Tha next entry on there is "12/12. IK for Green." 

37U3 tfhat does that refer to? 

37>«>t ^ A He ware trying to raise some money for Colonel 

37>«5 North's legal defense fund, and he had said he would give 

37(t6 some money for that. He never did get around to it. 



icussinEO 



491 



NAME: 
3747 
37M8 
3749 
3750 
3751 
3752 
3753 
3754 
3755 
3756 
3757 
3758 
3759 
3760 
3761 
3762 
3763 
3764 
3765 
3766 
3767 
3768 
3769 
3770 
3771 



HIR251020 



UNClASSinED 



PAGE 155 



fi Would you turn to tha naxt documttnt, Nuiib«z 3780 1? 
Is that your handwriting? 

A It most cartainly is. 

e Could you tall ma what tha last two Unas in that 
document raier to? 

A Sura. You avar heard oi a computer system you can 
lease in this city called Washington Line? 

2 No. 

A Hell, if you will talk to any of these fine 
congressmen, they will tell you what it is. But what it is 
is it is a computerized record of all FEC acoountakle 
contributions. So you can look a person up on that thing on 
your handy-dandy little home computer, and it will tell you 
all the contributions that person has made since 1983 to 
PACs and political candidates and that is real handy for a 
f undlfraiser . 

2 And those references are to-- 

A To somebody that I looked up. 

Q To somebody you looked up on tha computer. 

A Right. 

2 Could you turn to the next document which is 
document number 37845? 

A Uh-huh. 

2 Tell ma is that your handwriting? 

A It is. 



UNCLASSIFIED 



492 



3772 
3773 
37714 
377S 
3776 
3777 
3778 
3779 
3780 
3781 
3782 
3783 
378*4 
378S 
3786 
3787 
3788 
3789 
3790 
3791 
3792 
3793 
37914 
3795 
3796 



HIR2S1020 



UNEUSSIfe 



PAGE 156 



2 Could you tell ma what th« sacxet coniarenca that 
is listed there xeiets to? 

A The ACF conference that X have described to you in 
some detail earlier to help build support within the Hhite 
House for the President's policy of aid to antifcommunist 
guerrillas around the world. 

Q Why was it secret? 

A Oh, my. Wall, you know, the contributors we had 
are all kind of double seven, cloak-^and.^ dagger types, and 
if you tall them you are going to have a nice public 
conference, they are not going to give you much money, but 
if you talk very quietly and tall them they can't tell 
anybody about this confaranca, thay will give you a lot mora 
money. 

2 The second lina says, ''meat Luttvak on Monday.'* 
Who is that? 

A It is a misspelling. It is l-U-T-T-V-A-K. I 
believe that is the correct spelling anyway. Ha is the 
fellow that has written a couple of books on the subject of 
supporting anti+communist^ insurgents around the world. 

e Did you meet with him? 
.' A I didn't. I believe Spitz may have at soma point, 
but I am not sura. 

e The next few entries have iiguzas which seam to 
refer to dollars and names beside them. Did those 



UNCUSSinED 



493 



NAHE' 
3797 
3798 
3799 
3800 

380 1 
3802 
3803 
380(4 
3805 
3806 
3807 
3808 
3809 
3810 

381 1 
3812 
3813 
381<4 
3815 
3816 
3817 
3818 
3819 
3820 

382 1 



IffJiSSIFlES 



HIR251020 yl^JjS^JiOOH it-ii ''*" ^" 
individuals contribut« that amount oi aonay ior this 
conieienca? 

A Mo. Thesa wera suggestions to mysalf on how much 
money I should ask each of them for. 

Q And did you ask each of them fox that amount of 
money? 

A Uell, I asked Hel for «20,000. Hrs . Anderson. I 
don't even think I ever got around to soliciting her for 
this. I didn't solicit O'Neil for it. I solicited 
Salvatore> but he didn't give, and I solicited Barbara 
Christian and she gave five. 

2 On the reasons of that upper part, it says. 
''Conference gives Ollle 10K.*' What does that refer to? 

A This is of course after Colonel North has been 
relieved of his post, and we were going to arrange to give 
him a speakers fee for speaking at the conference or 
something like that. 

e Did he know you were going to give him a fee for 
speaking at this conference. 

A I haven't the foggiest. Z don't arrange that sort 
of thing. Spitz does. 

S Who told you to put this reference in there to 
giving Ollle 10K? 

A Spitz. 

C He told you to use that as part of the pitch? 



UNCLASSIFIED 



494 



NAHE: 
3822 
3823 
382(4 
3825 
3826 
3827 
3828 
3829 
3830 
3831 
3832 
3833 
38314 
3835 
3836 
3837 
3838 
3839 
38U0 
38(4 1 
38(42 
38(43 
38(4(4 
38(45 
38(46 



HXR251020 



mmm 



PAGE 158 



A That is cotteet. 

e Tha next line says, ''T«ll — what at* those? 

A 'Tell Dan meet with Luttvak Monday with David 
Fishez. Tell Dan to neet with Luttvak, start arranging the 
conference. Monday Fixker, Carl Russell, Channel and KSL tc 



S Did you neet? 

A No . 

fi What does the next-- 

A At least I don't recall neeting Mith hia. 

2 What does the next entry, ''95 by Thursday.'* reier 

A Not positive, but it probably is — neans I need to 



to? 



As I am sura you are aware, Fiajher was on the 



have commitments oi *95,000 by Thursday. 

C 
2 The next entry says, ''Hire Flslh*z to bring us all 

over to the White House to meet with R.R.'' Could you tell 

me what that refers to? 

A 

payroll as a consultant to the National Endowment, and one 

of the services he would provide was to arrange meetings 

that the President would pop J^ii]_iiij and say hi to the 

contributors and get his picture taken with them and we were 

ts tell David Fiaher, David, arrange this meeting and pay 

him to do so. 



It says. 



'Mire ritthez. ' ' 



■(hi 



UNCLASSIFIED 



495 



NAHE: 
38<47 
38U8 
38U9 
3850 
3851 
3852 
3853 
38514 
3855 
3856 
3857 
3858 
3859 
3860 
386 1 
3862 
3863 
386(4 
3865 
3866 
3867 
3868 
3869 
3870 
3871 




HIR251020 LJ^lUL.flVWI> ■— — pjiGZ 159 

A Right. 

Q But you are indicating h« had alrsady baen hired. 
Is that correct? 

A Oh> ha had been on the payroll ior a long tiita . I 
think at this point he nay have been off the payroll ior a 
while, and we were to put him back on> but I an not really 
sure . 

2 Was he hired ior the purpose of arranging meetings 
with the President to your knowledge? 

A That was one of the things ha was to do ior us. 
yes . 

S Do you know what he was paid to do that? 

A I have heard a lot oi diiferent iigures bandied 
about, and I don't know ior sura which oi them are accurate. 

e Did Spitz or Dan Conrad avar tall you what he was 
being paid to do this? 

A I believe in the instance oi the meeting that was 
to take place regarding the ACF coniaxanea, I believe that 
Spitz said to me someHW along the lines oi, ''Hall, you 
are going to have to raise an extra 420,000 so that 
Fisher — so that David Fiahar can arrange a meeting with the 
President. ' ' 

2 And did you respond to that? 

A Oi course. I said could, "Okay, Spitz.'' 
Actually I probably said yes. six. 



UNCUSSIFIED 



496 



NAHE' 
3872 
3873 
387U 
3875 
3876 
3877 
3878 
3879 
3880 
3881 
3882 
3883 
388U 
3885 
3886 
3887 
3888 
3889 
3890 
3891 
3892 
3893 
389>4 
3895 
3896 



HIR251020 



UNCLASSIFIED , 



HGE 160 



Q Could you read th« last tour ox iiv* Unas whaza it 
starts with Barbara — I guass that raiaxs to Barbara 
Newington . 

A Barbara Newington, her phone number, ''call her on 
Thursday, Green set up before he disppeared. Green will show 
up. He will get money for grant for him. We need her to 
give 30,000 to make possible. Private.'' 

2 What does that refer to? 

A Okay, this was Green's idea, and he started to get 
the ball rolling before he was relieved of is post. ''Green 
will show up.'' That is self-explanatory. We will get some 
money for a grant for him. you Know, or speaking there or 
something like that. 

''He need her to give 30,000 to make this thing 
possible.'' It is a private meeting. 

e You indicated earlier in response to a question by 
nr . Fryman that the document that ha was discussing was a 
transcript of a tape that was made at the fund-raisers 
meeting . 

A Uh-huh. 

Q Were all the fund-raiser^ meetings taped? 

A No. 

fi How many of them were taped? 

A You have got to remember a fund-raisers' meeting 
usually consisted of lunch and there were anywhere between 



UNCLASSIFIED 



497 



NAHE: 
3897 
3898 
3899 
3900 
3901 
3902 
3903 
390M 
3905 
3906 
3907 
3908 
3909 
3910 
391 1 
3912 
3913 
3914 
3915 
3916 
3917 
3918 
3919 
3920 
3921 



HIK251020 



UNCUSSIFiE 



PAGE 161 



one and five of then every week. I was there for 19 months. 

I couldn't begin to even estimate how many were taped. 
Lots of them were taped, and lots of them weren't. 

fi Do you know what happened to the tapes? 

A I haven't the foggiest. What probably happened to 
them is they are on those little minX^^apes that come with 
tape recorders that big. They probably, after they were 
transcribed, got reused. That is what I did with all my 
tapes . 

Q Do you know whether any of the tapes were destroyed 
after this investigation began? 

A The only documents, the only thing that I know 
anything about being destroyed was some documents I brought 
home with me in December of 1986 that I put in the middle of 
the yard, dowsed with gasoline and burned. 

2 Why did you do that? 

A Because by December of 1986 it was becoming quite 
clear to me that things were starting to unravel and I 
figured it would be a good time to start cleaning up. 

2 What were those documents? 

A They were probably file cards and basically what I 

did was I just sort of ri£led through my contributor book, 

P 
rl£led through my index cards and my desk and anything that 

looked unpleasant, X burned. 

2 Were you ever aware of any funds being transferred 



UNCLASSIFIED 



498 



i^Sttei"^^ 



KAHE: HIR251020 \«ltV*-'"~ PAGE 162 

3922 by ISC to Lake Resources or the Caynan Islands? 

3923 A Kot until after it becane public. 

392<4 e During the period in 1987 when you all were 

3925 discussing how to deal with what you referred to as this 

3926 catastrophe earlier, were there any discussions in those 

3927 meetings about noney being transferred to Lake Resources or 

3928 the Cayman Islands? 

3929 A A couple of times, yes. As a matter of fact, 

3930 after--I will try to remember a couple of Instances. After 

3931 Spitz was first deposed by the FBI, which was I guess in 

3932 January of 1987, we talked a little bit about a check that 

3933 had been — about the fact that money that was going to the 
393>4 freedom fighters had been sent through IBC and talked a 

3935 little bit about one check in the amount of *1.25 million 

3936 that had been made out to an IBC corporation or an Intel 

3937 corporation or something like that, and some mention was 

3938 made of the fact that it was in the Caymans. 

3939 I also heard the accountants talking about the fact 
39140 they were a little bit concerned because a couple of checks, 
39M1 canceled checks that had come back to us had come back with 
39U2 markings on them from banks in the Cayman Islands. I mean 
39M3 tKere were a number of instances where that came up. 



IINGIASSIRED 



499 



HAnE= HZR251020 PAGE 163 



39>4(| 

39^5 

3946 
3947 
3948 
3949 
3950 
3951 
3952 
3953 
3954 
3955 
3956 
3957 
3958 
3959 
3960 
3961 
3962 
3963 
3964 
3965 
3966 
3967 
3968 



RPTS CANTOR 
DCHN HILTON 
[7:30] 



UNCLASSIFIED 



2 Who pattlcipatad in th«s« aaatlngs to talk about 
how you daalt uith what you zaiazrad to as this catastzophe? 

A Mostly Spitz and aysali and sonatinas with othaz 
paopla pzasant. 

2 Hho waza tha othaz paopla pzasant? 

A I don't zacall spaciiic naatings. but pzobably Dan, 
pzobably Cliff, although Cliff might not hava baan thaza, 
because he was--by tha tiaa wa got zolling into Fabzuazy and 
aftaz Jane went public and all, ha was stazting to coma 
apazt at the seans. 

2 Did you evaz meat with any anployeas of tha State 
Department duzing youz activities on behalf of Hz. Channell? 

A Tha only one that I specifically know that I met 
with was an employee of the Agency foz Intaznational 
Development, which has its offices ovez theze. He is an old 
college buddy of mine, and I got togethaz with him a numbez 
of times in a numbez of instances to dzink and czy and tell 
him how soazed I was. 

S But you had no maatlngs with any officials at the 
State Depaztmant that related to youz fund-zaising 
activities? 



UNCLASSIFIED 



500 



NAnc: 

3969 
3970 
3971 
3972 
3973 
397U 
3975 
3976 
3977 
3978 
3979 
3980 
3981 
3982 
3983 
398>4 
3985 
3986 
3987 
3988 
3989 
3990 
3991 
3992 
3993 



liNClASSlFI 



PAGE 16U 



HIR251020 

A Ho. not that I racall, no. 

HR. OLIVER: I don't hav* any fuzthar quastions. 
Hz. Littladala. Thank you for youz patlanca. 

HR. TOURISM: I'm in a dllamna. My auto is in a 
gazaga that closas at 8:00. Hy wifa is in tha hospital. 
BY HR. BUCK: 

S rizst I want to thank you vazy Buch foz coming. 

A Did I hava a oholca? 

S It has baan ona of tha most antaztainlng 
dapositions I hava attandad. 

A I had iun whila it was happanlng too. 

fi Do you know of anything, any laws that would 
pzavant an Amazican citizan fzoa giving monay to an 
ozganization to puzchasa waapons? 

A Uall, I hava laaznad sinea all this took placa that 
thaza is pzobably a pzoblam with that if it's tax-daduotibla 
monay thay giva. If you ask foz it and say it's tax 
daductibla. but to tha bast of my knowladga, and Spitz said 
this zapaatadly duzing tha oouzsa of this mass, that if only 
wa had baan a good, old fashionad, foz-pzofit oozpozation wa 
could hava zaisad all tha monay in tha wozld and iSA tha 
blastad waapons ouzsalvas, so, no, I don't know of any laws 
that pzohibit somabody giving monay to an ozganization foz 
tha puzchasa of waapons so long as tha IRS pzoblams don't 
gat involvad. 




".t 



lljLril^^Jri 5ii. 



[D 



501 



NAH£: 

399U 
3995 
3996 
3997 
3998 
3999 
4000 
14001 
(4002 
4003 
14004 
4005 
4006 
4007 
4008 
4009 
4010 
401 1 
4012 
4013 
4014 
4015 
4016 
4017 
4018 



HIR251020 



yHCUSSlFIED 



PAGE 165 



Q Hava you avar raad any oi tha BoJland Amandnants? 

A Yas> I hava raad than racantly. sura. 

S Did you aver read the Neutrality Aot? 

A Ho, never did. I have read portions oi it, and I 
do know that what the Neutrality Act talks about is 
preparing an invasion or hostilities against a foreign power 
with which the United States is not at war from tha United 
States, which essentially means to me that ii somebody wants 
to give me *10 million to overthrow the government of Haiti, 
there is no problem with that so long as I don't hire 
anybody in this country, buy any arms in this country, or 
run the operation from this country. 

2 Are you aware of other groups giving money to 
organizations in Central America, other groups in this 
country? 

A Hall, you know, old General Singlaub supposedly has 
bean doing quite a bit oi that kind of stuff. 

fi I was wondering about groups in this oountry that 
are giving money to countries or left-wing groups in Central 
America? 

A Certainly. If you will be kind enough to subpoena 

thit report that IBC prepared and sit down and raad it as 

cloaaly as you have read tha 10 million pages that wa all 

gave you, you will find plenty of good examples in that. 

nK. BUCK' Z have no further questions. 







502 



"^*'^i 




KAHE' HIR2S1020 -w" - - -" Pjqj ,66 

40191 [Mh«r«upon. at 7:35 p.m., th« deposition was 

(4020 adjouxnad. ] 



UNClASSra 



503 



C H 05215^ 



January 15, 1986 




It was good speaking with you yesterday about the 
assignment we've been given for the next 100 days. 

Today's paper says the White House has revised upward 
the amount they plan to request from Congress. This makes 
our success In filling the needs of the next 3 months even 
more critical. If we can sustain the resistance until 
U.S. aid arrives, victory will be ours. 

I've enclosed the newspaper article for you to see 
Just how close we are. 

I'm looking forward to seeing you in the next two 

weeks to go over our "shopping list" and discussing your 

participation in making this great victory over communism 
a real 1 ty . 

Sincerely , 



Kris Littledale 



Enclosure 
KSL/rw 



504 




^ H J32133 
CJ*^ n.o<-<i_ <iru«_, O^ . "X"^ "^*- <^*~' Co%-V-.vi ~V 



^< 



ir>»«- C~>Jlo->-e_A TU- K)c*^»-^/s, 






•o TO 



J , ^ ko^O C^^O,! 






TaT5\c.4v "kr^-rA tTJ 









S".. 



\ 



A :i...;oo5. 



505 



C H 041499 



Fund Raisers Meeting-May 23, 1986 

Ronald Reagan received over sixty percent of the vote. 
But we are to do is use that as one of the keys. Don't 
forget this Is not a election campaign. This is an 
influence campaign. You are seeking to Influence people 
to support the President's full funding needs and a key 
element of this influence is education. As to the threat 
the Communist pose if is not funded correctly. We may 
have an opportunity to move a lot of this into an election 
position. For instance we are in the process right now of 
finding out what are the contested races in those 
districts where the President got over sixty percent of 
the vote. What the position of the incumbent is as well 
as the challenger. If the incumbent is week on SDI and 
the challenger la strong on SDI and the voting population 
strong on SDI our saturation educational ads cannot but 
help Republican challenge. So when these people give us 
$30,080.88 and our ads cost $35,000.00 day around the 
country thej are in many districts literally giving a 
political contribution to support President Reagan's 
congressional candidates. They are giving us $30,000.00 
to support a challenger candidate in these districts. 
That is an incredible incentive for these people to give. 
Because we are picking the issue that Is popular with the 
population, an issue that is popular with the President in 
an area where the congressman may not be supporting the 
President as much as the people want, being that it is an 
election year by hyping this Issue and bringing it up and 
highlighting the fact by implication that the challenger 
supports this Issue. We are really going to be giving a 
$30,000.00 plus contribution to these challenger 
candidates. Now, you might say that to someone who is a 
political freak and they'll go hm, never thought you could 
do that and the answer to that is look Mr. Jones this 
woman is trying to sell cookies In Reno she doesn't to 
many people she can't get her message out. If you put a 
message on television talking about how good chocolate 
chip cookies are general and saturate it, these people are 
going to start connecting her, the person who makes them 
with the desire to have them and you are definitely going 
to help her business. This is an incredibly subtle 
political benefit to every single Republican challenger 
and I don't know how you say this without getting burned 
on the telephone, but you can Just say I want to tell you 
what another way to look at this whole campaign. We are 
taking an Issue that the American people support. We are 
advancing this Issue in congressional districts where the 
American people strongly support the President and 
encouraging that incumbent to support the President. If 
that incumbent doesnot support the President, what is 
actually going to happen is the challenger candidate is 
going to benefit Imeasurely from our activities because 
the challenger position and the population position are 
become well known to each other through the medium of our 
television message. On the other hand the fact that we 



506 



C H 



041500 



^re hyping this Issue and the Incumbent doeenot euppon 
•the President will definitely highlight the difference 
between the incumbent and his constituents. This Is an 
incredible political benefit to every single Republican 
running for office. It is essentially a $30,000.00 
contribution to these challengers' campaign with the 
finest Issue that Ronald Reagan has in the country today. 
So there are many people who love politics and this is a 
very good way to appeal to them. It is also tax 
deductible and they don't have to stop. There are four 
districts in the state of Texas where there are four media 
markets where we want this. These people can give 
$120,000.00 if they want to hype this issue in those 
districts. We have a fabulous election opportunity In 
Louisiana. I don't know what the position of the two 
people is, your book should tell you. But we have an 
incredible opportunity because the people of Louisiana aie 
extremely supportive of the President. We might want to 
spend a million dollars on education in Louisiana. Then 
get the challenger to come after the primary is over in 
September whenever It is and say that one the reasons why 
he won is because of the vast strong support of President 
Reagan's SDI and that will make the Democratic Party go 
wild. It will strength the President's SDI tremedously. 
so there are Inumerable benefits from this program and 
people can understand that they are getting politically on 
the strongest Issue the President has in areas where the 
people support his to expose incumbents positions against 
their constituents. You have got a very strong political 
ad right here and you have not mentioned meeting with tne 
President of the U.S. once. You are virtually insuring 
that SDI is going to become a ma;]or issue In the campaign. 
Which is the strongest of the President's suits, strongest 
of the Republican Party's suit, it Is security, it is 
famllj. It is national defense. 

(You Just can't call them up and say you are going to give 
this money and this going to be a political contribution. 
You don't start that way. You know there are two sides to 
every person, you can look in the front or the back, the 
same person. But the impac t of saying to someone like 

or inumerable political crazys is 
Ing to give you an opportunity to give 

deductible political contribution and we 
ou how to do it. I mean they may say oh I 
o do that, but they will listen. They will 
s and then when you talk about the fact that 
the President's residual strength is, this 
attles are, this Is where we have the 
tunlty to win and this amounts to a 
Itlcal contribution. You don't have to stop 

carry our messages right on through the 
ou can deduct every penny you pay for It.) 



that we are go 
$30,000.00 tax 
want to tell y 
am not going t 
be very curlou 
this Is where 
Is where the b 
greatest oppor 
$30,000.00 pol 
there . We can 
election and y 



0o2><c 



507 



C H 



041501 



FUNDRAISERS MEETING - MAY ?3 . 1 9S6 

Ronald Reagan received over sixty percent of the voto. 
We must use this as one of the keys. Don't forget this iv 
not an election campaign. This Is an influence campaign. 

You are seeking to influence people to support for t.y,, 
President's full funding needs and a key element of this 
Influence is education as to the threat the Communists ;;..>■ 
if it Is not funded correctly. 

We may have an opportunity to move a lot of this imo 
an election position. For Instance, we are in the procei-s 
right now of finding out what are the contested races i r. 
those districts where the President got over sixty percent 
of the vote, what the position of the Incumbent is. as v-ei: 
as the challenger. 

If the incumbent is weak on SDI and the challenger is 
strong on SDI and the voting population strong on SDI our 
saturation educational ads cannot but help the Republican 
chal lenger . 

So when these people give us $30,000.00 and our ads 
cost $35,000.00 a day around the country they are in tr.auy 
districts literally giving a political contribution to 
support President Reagan's congressional candidates. 

They are giving us $30,000.00 to support a challenger 
candidate In these districts. This Is an incredible 
incentive for people to give. 

We are picking an issue that is popular with the 
population. An issue that Is popular with the President ir 
an area where the congressman may not be supporting the 
President as much as the people want. 

And being that it is an election year, we can hype th 
Issue and it will become known (implied) who is supporting 
this issue - the incumbent or the challenger. We are rccil 
going to be giving a $30,000.00+ contribution to the 
challenger candidates. 

Now, you might say this to someone who is a politii-ai 
freak and they'll never have thought you could do that. A: 
the answer to that is, "Look Mr. Jones, there is a woi:iari 
trying to sell cookies in Reno but she isn't getting her 
message out to many people. If you put a message on 
television talking about how good chocolate chip roru i < .m 
in general and saturate it, people are going to start 
connecting her, the person who makes them, with the d( ^ i i i- 
have them and you are definitely going to help hri 
business . " 



508 



C H 041502 



So there are Innumerable benefits from this program ar.:; 
people can understand that they are getting politically on 
the strongest Issue the President has in areas where the 
people support him to expose Incumbents positions against 
their constituents. 

You have got a very strong political ad right here and 
you have not mentioned meeting with the President of the 
U.S. once. You are virtually insuring that SDI Is going to 
become a major Issue In the campaign, which Is the strongest 
of the President's suits, strongest of the Republican 
Party's suit. It Is security. It is family. It is national 
defense . 

You Just can't call them up and say they are going to 
give this money and It Is going to be a political 
contribution. You don't start that way. You know there are 
two sides to every person, you can look in the front or the 
back, the same person. 

Using this approach on someone like 



or Innumerable political crazies will have an incredible 
Impact . 

We are going to give them an opportunity to give a 
$30,000.00 tax deductible political contribution and we wan: 
to tell them how to do it. I mean they may say, '•Oh. I an-, 
not going to do that", but they will listen. They will be 
very cur ious . 

Then you talk about the fact that this is where the 
President's residual strength is. this is where the battles 
are, this is where we have the greatest opportunity to win 
and this amounts to a $30,000.00 political contribution. 

And they don't have to stop there. We can carry our 
messages right on through the election and they can deduct 
every penny along the way. 

Now there Is something else you want to look at when 
you call people, especially in the new South. Check your 
map to see if we have congressional districts in their 
state, Texas as an example. 

But you can see we don't call them congressional 
districts, we call them media markets, where Interestingly 
enough your congressman will hear all this media. This is 
the political component to this issue, which if you sa> ii 
correctly is absolutely dynamite. 



509 



C H 041503 



I'll tell you something, you're not going to get much 
success with this regretably before the meeting with the 
President . 

But If you call about the first of October and start 
talking about these ads staying on to support these 
candidates, amounts to a $30,000.00 political expenditure. 
We may make ten million dollars In October. We may be doir 
this whole Issue at the wrong time. 



RESPONSE TO "I GET CALLED SO OFTEN FOR CONTRIBUTIONS" 

There are 230 million people In this country. 103 million 
of these people are potential voters. (Eighteen years and 
older). Roughly 3,000 of those 103 million people give 
$5,000 or more to bring about political change in one way or 
another. That's about three thousandth of a percent. 

That makes you a rare commodity, Mr. Jones. You are in 
demand becuase you're one of few needles In a sky high 
haystack . 

You are part of that three thousandth percent who 
care enough about the future of American democracy and the 
policies of our government to be generous and contribute to 
the direction of our nation. This Is why you're called so 
frequently . 

People look for other people to help solve a problem. 
People search you out seeking your support to help solve 
problems. The American political system is no different. 
It is very natural that your support would be sought to help 
solve political problems. 

You are a very blessed individual that you do have the 
sense enough to participate and that you have been blessed 
with the finances to be able to participate. 



510 



"MUG"*" SCHVICC CC>*Te« 

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OF The FREEOOh FIGHTER hovEmENT, ADVERSARY OF RREBIDBNT RIACANiS 
FOREIGN POLICY COALS ANO ORFOnCNT OF THE PRESIDENT'S VISION FDR 
AMERICAN SECURITY IN THE FUTURE HAS BEEN SOUNDLY DEFEATED IN HIS BIO 
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FOR The ANTI-TERRORISM AMERICAN COHHITTEE 

SPITZ CHiNNELL, PRESIDENT, CLIFF SMITH, DIRECTOR, KRIS LITTLEDALE, 

DIRECTOR 

1331 PENNSYLVANIA AVE NH SUITE 350 SOUTH 

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TOP »%E«ORD 

Stenographic TranscniJf or 

HEARINGS Hsrrs — LiL. /g? 



Before the 



SELECT COMMITTEE ON SECRET MILITARY ASSISTANCE 
TO IRAN AND THE NICARAGUAN OPPOSITION 



UNITED STATES SENATE 



DEPOSITION OF JOHN WILLIAM McDONALD 
Friday, August Ik, 1987 



mussro 




Partially Declassified/Released on lo>l/A- lOQ 8 
under provisions ol E 12356 
by K Jofmson, Natonal Sscurity Council 



Washington. D.C. 



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1 DEPOSITION OF JOHN WILLIAM MCDONALD 

2 Friday, August 14, 1987 

3 United States Senate 

4 Select Connlttee on Secret 

5 Military Assistance to Iran 

6 and the Nlcaraguan Opposition 

7 Washington, D. C. 

8 Deposition of JOHN WILLIAM McDONALD, called as 

9 a witness by counsel for the Select Committee, at the 

10 offices of the Select Committee, Room SH-901, Hart Senate 

11 Office Building, Washington, D. C, commencing at 1:38 

12 p.m., the witness having been duly sworn by MICHAL ANN 

13 SCHAFER, a Notary Public In and for the District of 

14 Columbia, and the testimony being taken down by Stenomask 

15 by MICHAL ANN SCHAFER and transcribed under her 

16 direction. 



Partially Oeclassided/fleleaseO on ^ •1/A' 09R 
under provisions o' E 12356 
by K Johnson, National Sacunly Council 



«Nct*ssra 



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UNtlASSIHiD 



1 APPEARANCES ; 

2 On b«half of th« Sanat* S«l«ct CoBmltta* on Secrat 

3 MllltaxY Assistance to Iran and th« Klcaraguan 

4 Opposition: 

5 JOHN SAXON, ESQ. 

6 On bshalf of th« Housa Salact Connlttaa to 

7 Invastlgata Covart Arms Transactions with Iran: 

8 ROBERT GENZHAN, ESQ. 

9 ROGER KREUZER 

10 On bahalf of tha Dapartaant of tha ArBy: 

11 COLONEL JOHN WALLACE 



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1 


(CONTENTS 


2 


^JfAMTNATION ON BEHALF OF 


3 


WITNESS SEMIE H0V5S 


4 


John William McDonald 


5 


By Mr. Saxon 


6 . 


EXHIBITS 


7 


M.;pOM&tD EXHIBIT NUMBER FOR IDENTIFICATION 


8 


1 47 



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1 PROCBEDIMGS 

2 Whereupon, 

3 JOHN WILLIAM MCDONALD, 

4 called aa a vitnasa by counael on behalf of the Senate 

5 Select Committee and having been duly svorn by the Notary 

6 Public, was examined and testified as follows: 

7 EXAMINATION 

8 BY MR. SAXON: 

9 Q Sir, would you state your name for the record? 

10 A John William McDonald. 

11 Q And what is your occupation? 

12 A I'm a Colonel in the United States Army. 
1^ Q And can you tell us what your present 

14 assignment is? 

15 A I'm an instructor at the National War College. 

16 Q And when did you commence that assignment? 

17 A I started that assignment on the fifth of June 

18 of this year. 

19 Q And prior to that what were you doing? 

20 A The year before this I was a student at the 

21 National War College, and prior to that I was Chief of 
22 
23 

24 Q And how long were you chief 

as A I was chief ^^^^Hfrom September 4, 1984, 





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until th« first of July, 1986. 
Q 




A 

Q If you would, Colonal, tall us in your words 
at whatever langth you want to go into th« forces that 
led to the creation of J 

systan.^ Describe, if you would, the background, 
the considerations, the dynaaics and a bit of the ■ 
chronology of how that all caae to be. 

A Okay. 




Q And who was Chief of Staff at that tine? 

A General Wickhaa at the time, had just assumed 
the position of Chief after being the Vice Chief for a 
year. During that time there were a series of incidents 
involving ^^^^^^^^^^^^^^^Hof which much has 
made in the press — YELLOW FRUIT and the whole gamut of 
activities surrounding gaining better control 



Cfxicfj 



General Wickhaa at the time, in his role as 



Vice^ ha(i seen that the Army had more black programs than 
he had seen before, and based on the fact that each 
progrzui was compartmented there appeared to be no one 
centrally in control of the whole operation. 



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|[|||^^H^^H^ dlre< 



Consequently, ^^^^^^^^^H^H directed the Vice Chief of 
Staff to establish what he called an architecture for 
controlling nanagement of Amy black prograns. 

Subsequently that was given to the Army 
Director of Management, and the Army staff spen^ about 
eight or nine months studying the problem, looking at 
different solutions, and finally, in the summer of 1984, 
c»nm up with a recommendation that an office be created 
for central management vithin the Office of the Chief of 
Staff of the Army. 

That office subsequently became known as I 




Q Prior to^^^^^^^^^^^^^^^Hif you 
briefly tell us how requests for transfers to the CZA 
came about. He understand that all of the Army's support 
to agencies is not confined to the CIA, but for our 
purposes that's what we're primarily interested in. 

Prior to the time^^^^^^^^^^^^B the 

■office, that is, the office that dealt 
directly with requests from the CIA, was located! 




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Th«y had created an orgemlzatlon that was 
black In nature. That la, the paopl* war* not officially 
on tha Army records, their records were aan aged off-line, 
and they had a streanlined reporting systea^^^^^^^^H 
^^^^Hto the Vice Chief of Staff of the Amy for 
approval of very sensitive requests coning out of the 
CIA. 

Basically that office was headed by an Any 0- 




Basically that's how the system worked. The 
approval system went up on varying 




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Q All right. If you would, tak. a fw minutes 
to tell u. how the .ystea works now fro. the point of 
entry with a request - where it goes, how it worlcs. it. 
way through the syste. to ultiaate approval^ 




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Q What's th« d«gr«« of specif iclty for th« 
rsqusst? Ooss it Includs stock nuabsr, nomsnclaturs, 
pries, St cstsra? 

A Normally ths agsncy doss not havs a pries. In 
SOBS casss thsy'll havs what's callsd ths AMDF, which is 
a Bicrofichsd copy of Army pricss lists for parts, and in 
soms casss snd itsms. 

Q And that's ths Army Nastsr Data Fils? 

A That's corrsct. In all casss, ths CIA doss 
not havs a currant copy of that. Thsss ars primarily for 
sstimatss of what it's going to cost thsm. Thsy rsly 
upon ths Army to provids thsm sxact pricing data at a 
subssqusnt dats to ths rsqusst. Ones ths rsqusst comss 
to ths Army, ws ascsrtain that all of ths data is thsrs. 
^^^^^^■goss to ths Vies Chisf 

ths ^^'^yJ^^I^^^^^^^^^^^^^^H^^^^^^^^^^^^^A 

That is, ws havs loolced at it from a lagal, fiscal and 



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operational raapact. Ha'v* oatchad thaa against tha 
critarla for approval of such raquasts, and v« naka a 
racommandatlon to tha Vlca Chiaf vhathar or not tha Army 
ought to avan consldar tha raguast bafora va go Into 
formal staffing of tha raquast. 




Q Do any of tha raquasts avar gat killad at that 
aarly staga on a concapt basis? 

A Yas, thay do. At tha concapt basis thara ara 
raquasts . 




thara ara othar casas 
as wall. If supply of an itaa or parts would impact upon 
tha raadinass of tha Army, wa may turn it down at tha 
concapt staga. Normally, howavar, that's datarminad 
through tha formal staffing procass In coordination with 
tha DCS/LOG and tha Army Matarial Conaand. 

Than, onca tha raquast has baan distributed 
for formal action by tha Army staff, tha action is 
davalopad. Tha action officers kaap in contact wit 
to ansura that thara hava baan no changes and that they 



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arc proceeding down th« right lln«. 




Q At what point Is thar* a readiness assessment 
made in this process? 

A The readiness assessaent Is nade at 
essentially two different points. The action office that 
has the formal action^^^^^Hmakes an impact assessment 
based upon their view of parts or end item status within 
the Army. by ^^^^^^^^^^^^^^^^^^H 

the chain of commemd, who makes his own independent 
assessment. 




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/:) K^L- 



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Q We'll COB* to th« apaclflcs of what happ«n«d 
chronologically with SNOWBALL and CROCUS in a tmv 
minutaa, but I'm asking for opinion hara, so I want to 
raally danominat* it as such. But, in your opinion, is 
thara any raason why SNOWBALL and CROCUS could not hava 
bsan procassad quickly and appropriately through tha 
f oraal ^^^^^^^H sy s t aa? j 

A Both raquasts could have baan procassad 
quickly and afficiantly through the formal systaa, 
acknowledging that there would hava been a greater degree 
of risk of disclosure because of the larger numbers of 
people involved in the staffing process. However, those 
numbers are still relatively small. You are talking in 
the neighborhood of^^^^^^^people total who would have 



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1 5 as 




IS 



15 



1 knowledge. 

2 Q And th«s« ar* peopl* who ar« th« Secretary of 

3 the Amy, the Vice Chief of Staff, the Judge Advocate 

4 General, the General Coxineel? 

5 A That's right. These are principal senior 

6 people in the Aray structure. 

7 Q All proper clearance, all handle sensitive 

8 things as a Batter of course? 

9 A That's correct. 
LO , Q Has the record against leaks | 

^^^^^^^^^^^^^^ueen good? 
L2 A Very good. 

L3 Q Let ■• ask the question that we have been 

L4 asked and that we should exaaine appropriately as we 

L5 prepare to write a report. What difference would it have 

16 Bade with SMONBALL and CSOCDS — either together or 

L7 answer separately — if we had gone through the fozval 
^^^^^^^K>rocess^^^^^^^^^^^^^^^^ would 

L9 have Bade any difference? 

10 A The^^Hprocess is built upon a nuaber of 

il principals being involved in order to provide appropriate 

t2 checks and balances. Where one senior official say feel 

23 it's appropriate, another Bay not. The systsB is built 

I* upon balance between the silitary side of the house and 

tS the Secretariat side of the house in order to ensure that 



mmm 



568 



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no on« ov«r«t«ps th« bounds of propriety or authority. 
^^^^JHJI^I^^^^HHH^ tha 

f act ^^^^^^^^^^^^^^^^^B 
^^^^Htold, that th« action had b««n approved by tha 
Prasldant, may wall hava baan tha saoa. Hovavar, thara 
probably would hava baan a oora sarlous challanga as wa 
axacutad that particular action. 

Q On what basis? 

A Tha fact^^^^^Hdldnotlcnow tha daatlnatlon 
was a crucial Indlcator^^^^^^^^^Vconcam was two 
dlffarant things. Ona was inadvartant provision of 
supplies to tha contras In violation of tha Boland 
Amandaant. Tha second Issue was inadvertent supply to 
countries that ware on the terrorist list and therefore 
precluded from receiving U.S. eras. 

Q Let Be follow on this line of questioning in 
terns of the difference. It seeas that part of what 
you're saying is there say not have been a substantive 
difference in terns of the decision, but that you didn't 
use this word, and I don't nean to testify for you, and 
so tell ne if it's not a word you would use, but you 
seened to be saying people would have felt nore 
confortable about the decision if they had Icnown it was a 
fully-infomed decision in terns of going through this 



process? 



UHWSIilED 



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Q Hav* th«r« bean Inatancaa In th« past whara 
laid vm will not or tha racoBuaandatlon ofl 
and, tharafora, of tha Sacratary of tha Amy hava baan 
that va would not provida a particular Itaa? 




Q Okay. Your answar is appropriate basad upon 
what ay question was, but my question was really sort of 
destination ioBateriai. Rave there been instances in the 
past when, based on the evaluation 

racoBsendation to tha Amy leadership and subsequently 
their recomnendation to the Agency was^m^^Hdo not 
want to provide the requested material? 



lEWW 



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ONCUSHD 



18 



A In t«nu of logistics and supply, no. In 
tsiBs of operations, yss. 

Q What happsns than, in a ganaral sansa? 

A At that point tha Agancy has tha prarogativa 




Q Hava thara baan instancas In tha past prior to 
or othar than SNOWBALL and CROCUS whara this procass has 
sarvad to in assanca kill raquasts that hava cona from 
tha Agancy? 

A Yas. . 




Q So in pravious instancas it would ba vhara tha 
Sacratary of tha Army says that tha racoaaandation — 
rasponsa would ba nagativa and tha Agancy has aecaptad 
that? 

A That's right. 

Q Hava thara baan instancas, than, whan that 
arguaant has baan put forward to tha Agancy and than thay 
hava gona through tha procass of appaal 



No. 



ittssstm 



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1 
2 

3 A To thtt b«st of ny knowledge there have been no 

4 cases of that. In essence ve have pretty much gotten our 
5' way. He are more than willing to support the Agency, but 

6 within the bounds of understanding what we're doing in 

7 providing that support. Consequently, the Agency has not 

8 chosen to try to override an Any decision in the past. 

9 They had expressed at the tiae concern with 

10 our process, and we were in a bureaucratic argument at 

11 the time just preceding this era where, because of 

12 compartment at ion, sometimes even the legist icians in the 

13 Agency don't Icnow where things are going because the 

14 operational people won't tell them. So, consequently, to 

15 fulfill an Army request the logistician will have to go 

16 through the operator and get the answer in order to come 

17 back to us. 

18 And there were problems with that within the 

19 Agency itself which sometimes caused consternation. 

20 These two instances on our part, and part of our anxiety 

21 about the two, were the fact that they appeared to go 

22 around the system in order to preclude ^^Hfrom 

23 challenging a request that would come through. Our 

24 concern primarily was that they would become a precedent 

25 for future actions. 



gemED 



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Q Don't Bisund«rstand this next quaatlon b«c«us« 
I'm not accusing you of bsing unobj«ctiv«, but you h«v«^ 
and understandably rsflsct, an Army psrspsctivs. In your 
opinion, has ths CIA svsr bssn disadvantagsd fro« an 
intelligsncs or opsrational standpoint or, for that 
natter, has ths govsmnsnt bssn disadvantagsd bscauss ths 
Army bursaucracy had to work its way? 

A Ons incidsnt only that I can think ol 




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UNCUSSSIQI 



\«fh- 



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one? Ooea It work? 

A Z think tha systaa is a good ona. Z ballava 
it worlca. I acknowladga tha fact that aoaatinaa tha 



UNeUSWED 



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myisffD 



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r«qu«sts taka longer to fulfill than th« Agancy would 
Ilk*. Sonatinas that's not always bad. 






thara any 

raquasts for support to tha A gancy 'othar t han SNOWBALL 
and CROCUS which bypassad tha ^^^^^^^Hsysten? 
A Nona that I know of. 

Q In your opinion, did SNOWBALL and CROCUS 
jsystan?^ 
On a thaoratical basis you could say that th* 
Isysten was usadj 

[but at tha saaa tlna it want outsida 
systan as wall bacausc 
chacks and balancas was bypassad. 

Q Now, wa hava had tastiaony from two particular 
individuals who have told us that tha purposa of tha 
^^^^^^^Hsystaa, is siaply to guaranta* that tha 
laadarship of tha Dapartaant and, in this casa, th* 
Dapartnant of Dafansa know that a particular action is 
balng workad. 

Would you shara that opinion as to tha purposa 
of^^^^^^ 

A Wall, our rasponsibilitias claarly go bayond 
that. In tha support plan for tha Agancy as wall as tha 



HNWStftED 



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iiNa*s«i) 



23 



1 DOO docuaanta th«r« !• clearly a raaponalblllty to aaaaaa 

2 proprlaty of tha raquaat in vlaw of tha Oapartaant of 
Dafansa providing whatavar la raquaatad. Thara ia a 
raaponaibility to judga tha lagality of tha raquaat. 
Thara ia a raaponaibility to datamina vhathar or not 
proviaion of aupport aa raquaatad aight craata an 
anbarraaaaant to tha Oapartaant of Dafanaa or tha Aray or 
tha country. 

Thara ia elaarly a raaponaibility to judga tha 
natura of tha raquaat and irtiathar it 'a contrary to tha 
intaraata of tha aarvicaa and tha Oapartaant of Dafanaa 
to provida auch aupport, and I think on that baaia it* a 
aora than aaraly an accounting tool, aa you aaaaad to 
iaply froa tha coaaant. 

Q Okay. X'a juat convaying tha opinion of othar 
paopla. I think that's probably all that I'va got right 
now on tha functioning and oparation of ^^^^^^^H but 
lat aa ask you to jusp to what aay ba tha and ~ it saaas 
to flow hara — and ask you if you hava any thoughta that 
tha Comittaa ahould antartain in taras of 
racosBondations %ffaich wa alght aaka in our raport about 
ways this whola systaa could ba iaprovad, and by irtiola 
systaa hara I aaan soaathing largar than aiaplyl 



Pantagon conducta covart oparations or providaa 



mmssm 



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24 



assistanc* to th« Agancy for tha conduct of Intalllganc* 
or oparatlona. 

Do you hava any thoughta aa to what va ahould 
racoaaand? 

Ona tha thlnga^^^^^^^^^^^^^froa lata 
'84/aarly '85-on waa tha raaponalblllty to notify tha 
Congraaa In accordanca with tha Zntalllganca Act of 
algnlflcant Intalllganca actlvltlaa, and claarly what 
thoaa In 1984^^H^HHm|^^^^^^^^^^| tha 
daflnltion of "algnlflcant Intalllganca activity" and 
raaponalblllty for raportlng that changad aoaavhat froa 
tha 1985 Intalllganca Act, whan dollar aaounta vara 
craatad that claarly daflnad^^^Kraaponalblllty^^^^^H 
for raportlng lavala of aupport. 

An laaua that tha Aray haa h ad — and I 
ballava aupporta ^*^^^^^^^^^^|^|^^^^^^^L 
]|^|HHU^^^^^^^^^^^B la in raportlng to tha 
coaalttaaa, both th« HPSCI and th« SSCZ, vhichavar 
aarvica providaa aupport at tha tlaa of notification of 
that aupport ahould hava ita o%m aquitlaa protactad in 
tha provision of that aupport by balng prasant at tha 
notification. 

In othar vorda, if va provida a significant 
laval of support and tha CIA coaas ovar to notify tha 
SSCI or tha HPSCI of that aupport, that tha Aray 



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r«pr«s«ntatlv« or r«pr«s«ntatlva« should accompany for 
notification in ordar to aay hara'a what wa'ra providing 
and ansvar c[uastions, yas or no, thara is an impact. Wa 
faal that that's tha bast way to ansura that avarybody is 
proparly notifiad. 

Q What good would that sarva? What raal purpose 
would — what do tha intalliganca conmittaes gat from 
that procass that thay wouldn't gat from tha Agancy baing 
thara alona? 

A It's ay viaw that tha Coanittaas wara not 
always fully notifiad of tha axtant of support or sarvica 
participation in cartain activitias. Ona coanittaa at 



ona 


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told 


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subsaquantly found out about it and quariad us, at which 
point va told thaa axactly what was happaning and causad 
SOB* friction batwaan tha Army and tha Agancy as wall as 
batvaan tha Agancy and tha coaaittaa. 

Q Any othar racoaaandations you can think o f? 
Should wa institutionalizJHjj^^Htha^^^^^^Hsystaa 
with lagislation or should wa raplicata that aodal in tha 



othar sarvicas? 



HNetASSIflED 



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UHGUi^ffi 



26 



1 A Each service and the DOD Is significantly 

2 different and the personality of the control activities 

3 would vary by service. It's my view that if legislation 

4 were produced it should set a standard and require the 

5 services and DOD to adhere to the standard as opposed to 

6 describing how the function should work. 

7 Q Do you think the services are sufficiently 

8 similar that the sane model could work for all three? 

9 A I'm less familiar with the Navy system than I 

10 probably ought to be to speak to that, and I believe the 

11 Air Force has a relatively responsive system, although 

12 it's not exactly like ours. 

13 Q What about the issue of Congressional 

14 notification? Do you think that there are operations or 

15 intelligence activities of a covert nature which have 

16 sufficient sensitivities to thea that we could ever 

17 justify not notifying Congress at all? 

18 A Ny belief is that the current procedures for 

19 notifying the senior members of each Cosaittee in very 

20 sensitive matters, as opposed to the entire Committee or 

21 the staff, are adequate for even the most sensitive of 

22 operations. 

23 Q Nhat about the issue trtiich we've heard 

24 discussed of late to have a single Intelligence 

25 Committee, reduced in number as to both members and staff 



WBtmm 



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HASSIEIED 



27 



1 froB th« two Comnltt*** which exist now? 

2 k I'm not really conpatant to talk on that. 

3 Q It's rars whsn somsons says thoss words. 

4 Bsfora wa go back to go through tha 

5 chronology, lat na sinply ask Bob and Rogar if on thasa 

6 ganaral subjects they've got anything to ask. 

7 MR. KREUZER: Not a thing. 

8 MR. GENZMAN: No, thanlcs. 

9 BY MR. SAXON: (Resuaing) 

10 Q Anything else we ought to talk about of a 

11 generic nature? 

12 A I don't think so. 

13 Q All right. Let's go back, then, and just have 

14 you walk us through, at whatever level of detail you 

15 want, SNOWBALL and CROCUS — when you first found out 

16 about SNOWBALL, how, who said what, what you did, what 

17 happened next, et cetera? 

18 A Tha first issue involving transfer of the TOWs 
19 

20 
21 
22 

^^^^^^^^^^^^^^^^^^^^^^^H General Thurman 

24 instructions ^^^^^^Ht^S^repared to ship up to 

25 1,000 basic TOW nissiles — and he used the word "vanilla 




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w&issm 



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TOW". ^^^^^^^^^^^Ato B«an basic TOW — for 
transfer to an unknown party through ths CIA, 
Ion six to 12 -hour standby! 




And by ths and 

of ths wssksnd Gsnsral Thuraan vantsd It sst up. At that 
tins hs was dsparting to go TOY; ths Chlsf was rstumlng 
from South Ansrlca, I bsllsvs, that aftsmoon. 




clarify that ths action had bssn 
approvsd by ths Prssldsnt and that hs had rscslvsd 
notification through ths Military Bxsc to ths Sscrstary 
of Dsfsnss. 




581 



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Q Is it your understanding that G«n«ral Colin 
Povall, %Aio at tha tlma was th« Military Assistant to tha 
Sacratary, trtxo mada Ganaral Thurman avara of this 
raqairaaant, is it your undarstanding Ganaral Powall want 
to Ganaral Thuman bacausa Ganaral Thuman, as tha vica, 
sat at tha top of th^^^^^^^Bprocass^ or did ha go 
to hi» bacausa tha Chlaf of Staff was out of town that 



waakand? 



wmmm 



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A It's By vlaw h« vent to General Thurman aa the 
Acting Chief. 

Q When you Indicated that you did not know the 
destination, prior to these matters becoming public did 
you ever )cnow that these were going to Iran? 

A Ko. 

Q Would you tell us what your reaction would 
have been had in January of '86 you been told these 
missiles were going to Iran? 

A I would have told General Thurman at the time . 
that I would believe that the action was illegal and that 
Iran was clearly identified as one of the nations on the 
terrorist list for whom we could not transfer weapons, 
and that we would have to reconsider that and go back 
through the Secretary of Defense with a legal opinion 
before we would provide the material. 

Q All right. What happened next? 

G ^neral Register^^^^^^^^^^^^^^^^^^B 
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Hcalled in 
Major Simpson, who was the DCS/LOG ac tion offic er on most 
of the sensitive trans fers^^^^^^^^^^^^^H He 
instructed Major Simpson on what he wanted done and the 
fact that it had to be done by aircraft if he could not 
do it over secure telephone. 

Major Simpson understood all that. 



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called Davison Army Air Field and llnad up a C-12 in case 
he naaded to us* it. H« also discussed the fact that in 
order to cover the transfer we would probably use a 
comnerclal bill of lading as opposed to a govemoent bill 
of lading to transfer the items by groxind to the 
departure airfield, wherever that would be, and we didn't 
know where that would be at the time. 

General Register at that time told us to take 
care of it. We left. Simpson knew what he had to do. 
He went to his office and I went to my office and made an 




I guess it was probably about 1600, somewhere 
in that area, Simpson came down, said basically things 
were on track. He had contacted the TOW FM. They would 
get the stuff together. They would arrange the 
transportation and ensure we were appropriately covered 
and they would keep me informed. 

Sunday afternoon early he called me, told me 
everything was lined up and in place, 
ready to execute on 




UlllSSlFKD 



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32 



got J no order to go for 
quit* a tlm* after that. So on Tuesday everything was 

ready to go. t^^^^^^^^^^^^^^^^^^M The 
had been Informed on Saturday afternoon by the Vice on 
his way out of town as part of the debrief, and it just 
became a wait-and-see action. 

Q As you are waiting and seeing, what happened 
next? 

A I guess it was about the 14th of Februai 
got the order to transfer the first shipment. As I 
remember, it was only 500 and not the initial 1,000, but 
I could be %rrong on that. 

Q The first shipment was 1,000. 

A ^^^gtransf erred those. Th e Chief and the vice 
were in l m iiml^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^W 
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Hwere on 
provide up to 3,000 more, although I understand that 
number is really 3,508 or 3,509. 




Iconcemed upon the 
execute order ,'^^^^^^Bdidn't Icnov where they were 
going, that they exceeded the Congressional threshold of 
$1 million, that whoever was going to notify the 



UMISStFIED 



585 



UHCLASmUD 



33 



1 Congressional committees of the transfer in excess of $1 

2 million needed to proceed with that. 

3 Again, this had been a contentious issue in 

4 the past. We in the Army felt that we should do that. 

5 The DOD position was that that was the responsibility of 

6 the recipient and so consequently I wrote a memo to, I 

7 believe, General Brown claiming that I thought we had a 

8 problem there, that we needed to confirm that that was 

9 still the understanding of the DOD and that whoever was 

10 going to do it took care of it. 

11 And our concern was you can't ship 1,000 

12 missiles somewhere and not expect them to show up, and 

13 when they showed up we needed to make sure that everybody 

14 was above-board and understood it wasn't something we 

15 going to keep covert for very long if you plan to use 

16 1,000 TOW missiles. 

17 Based on the sensitivity, General Brown 

18 recommended I go up and talk to General Powell. I did, 

19 and again he reiterated the DOD policy is the 

20 responsibility of the recipient and that the Army did not 

21 have responsibility to do that. 

22 Q Did General Powell indicate to you in any way 

23 that the responsible party, and in this case it would 

24 have been the Agency, was going to notify the Congress, 

25 or was it simply we hear what you're saying and it's 



DNKMSlfffi!) 



586 



\iHa*ss»B 



34 



1 thair rasponslblllty? 

2 A Th* lattar. W« hear what you'r* saying. It's 

3 not our rasponslbillty. 

4 Q As far as you know, did anyone sake further 

5 Inquiry of General Powell or anyone else through 

6 subsequent shipments as to whether the Congress had ever 

7 been notified? 

8 A General Russo was concerned and later wrote a 

9 ■ oeao and discussed It with General Powell, and Z 

10 understand — Z did not know It at the tine — General 

11 Powell sent that aeao over to the NSC saying we had some 

12 concerns that proper notification be made and that he was 

13 reiterating the policy that it wasn't our responsibility 

14 but that the Agency, as recipient, needed to do that. 

15 Q For the record. General Russo 's memo was 

16 prepared and he verbally briefed General Powell on it. 

17 The memo you've got reference to is one that General 

18 Brown prepared and sent to General Powell, who then put a 

19 cover on and sent it to Admiral Poindexter? 

20 A That's right. 

21 Q Nhat happens next in the chronology? 

22 A At I guess this is about mid-April now, 

23 General Russo called me do«m to his office and told me 

24 that ha had been directed by the Chief to get together 

25 with the Agency on a list of HANK repair parts and that 



OIHCiraFIED 



587 



um^siFe 



35 



1 h« had directed Simpson to take the action, that again on 

2 a close-hold basis, without knowing the destination we 

3 would be prepared to fulfill this list of parts. 

4 Q Did you understand that to be a follow-on to 

5 the previous requirement? 

6 A No. As a matter of fact, we looked at It as a 

7 separate action and did not see them as two linked 

8 actions. 

9 Q Zn your mind did they Involve the same 

10 customer, whoever that was? 

11 A No. We had some questions eibout that. Again, 

12 as you have probably seen In my notes on the TOHs, we 

13 didn't quite know where they were going, but at the time 

14 there were tensions between Libya and Egypt, and we were 

15 of the opinion that perhaps we were covertly transferring 

16 1,000 TOW missiles to Egypt In preparation for some kind 

17 of operation. 

18 Again, when you are transferring that quantity 

19 you have to look at who has the systems, and in the HAWK 

20 case, Jordan in the Middle East was the one who had HAWK 

21 systems, and Iran certainly didn't cross our mind. 

22 That's kind of not even in the ball game. 

23 Q Before we fully leave TOWs, I take it that you 

24 had no involvement with any of the pricing problems that 

25 arose over the TOWs. 



llN6t*S«0 



588 



^ 



^^ 



^aJ/BD j^ 



/o /^l^ 



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?^' 



37 






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y 






J^aJ/SV J^ 



////4/- 



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p/f^^ 



3? 






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uNuno 



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BY MR. SAXON: (Rasualng) 

Q Returning to the r«quirein«nt in April on 
HAWKS, what happanad of not* that you recall? 

A Ganeral Russo informed me that we had the 
requirement. 




General 

Russo at the time, even though we didn't have the AMDF 
out and hadn't assessed it, was absolutely certain it was 
going to exceed the $1 nlllion threshold for transfer, 
and again he expressed his concern at the second incident 
in six months or in a couple of months of bypassing the 
formal system in order to expedite and keep 
knowledgeability to an extraordinarily few people, which 
then precluded^^^^^^^Hformal review. 

He had some problems with that, expressed 
those to General Brown. He and Z, General Brown, talked 
about 




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UNGLne 



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MR. KREUZER: In other words, th«r« vara 
requests coning In that were deemed 
to be inappropriate and they were turned down? 

THE WITNESS: 




And in large part it was our view it was the 
CIA's own bureaucratic systea that required such speed. 




' And it was our 
view if they planned ahead like the rest of us, in most 
cases they could do it reasonably well, and there they 
had a true emergency we had a systea to deal with that 
and could do it effectively. 

MR. KREUZER: We call and you haul. 
BY MR. SAXON: (Resuaing) 
Q Did any of what some of us now view as the 
readiness problems with the KAWKs, did any of that ever 
surface to you? 

A It sure did. Major Siapson briefed oeJ 




ifflccraiD 



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UNCLASSMD 



43 




il r«n«Bb«r tailing him, you know, If that's th« case, 
you'vs got to sak* sur« ths vies a nd thm Chisf know 
before they approve this 




Q Do you remember any of the specifics about 

what the impact was or what any of the items were or how 
many? 

A Ho. 




Q Do you remember any discussion about a 
particular ^^^^^^^^^^^^^^^^^^^^^^^^^f^^^^^H 
^^^^H in the radar of the HAWK system? 

A Z sure don't. 

Q Do you remember discussing — even if you 
don't remember now what the specific part is, do you 
remember discussing specific parts, or was it simply X 

number ^^*'^*VH^^^H|H? 

A It was primarily X number of items] 
^^^^^^1 Then, at a later date, we got a request for 
end items, in effect the radars as major units, and then 
again it hit us as really strange, and we were a little 



wwm.\i 



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uncertain how to deal with that. 

Q To your knowledge did Major Siapson ever raise 
with the Chief or the vice this readiness issue? 

A I'm not sure. I believe General Russo 
discussed it at least with General Brown, that it would 
cause problems, and I don't know where it went from 
there. 

Q Did Major Simpson ever tell you of any 
discussions he had with the Agency on this issue? 

A NO. 

Q Whether he had been overruled? 

A NO. 




Q Were you around when what we call the follow- 
on request for HAWK parts came around? 

A No. I left on — I think my official 



UNCDtSSIFIED 



597 



UNCLASSiED 



45 



1 departur* dat« was 3 July of '86. 

2 Q But th« radar Issue had been addressed prior 

3 to your leaving? 

4 A The initial investigation of the availability 

5 of the radars had become a topic of discussion, although 

6 a formal request had not yet been placed with the Army. 

7 Q Were you aware that it was determined that we 

8 did in fact have the two radars requested, but they were 

9 part of the Iranian frozen assets? 

10 A Yes. 

11 Q Did that ring a bell with anybody as to what 

12 the destination might have been for these HAWK parts? 

13 A If it raised anything at all, it was in a mode 

14 of levity — screw the Iranians; we'll take the radars 

15 and ship them someplace where we can use them. 

16 Q And in terms of a chronological walk-through 

17 these two matters, does that end your involvement? 

18 A That is my involvement, until the FBI called 

19 me in January. 

20 Q Here you interviewed by the Department of the 

21 Axsy Inspector General? 

22 A Yes, I was. 

23 Q I think that's probably all I've got. Let me 

24 look through some notes and see if Bob's got anything. 

25 MR. GENZMAN: I have nothing at this point. 



mmsm 



598 



UNClASSm 



46 



1 BY MR. SAXON: (Resuming) 

2 Q Bafor* w« l«t you go, than, let a* taka a 

3 quick look. 

4 (A discussion vas hald off tha racord.) 

5 MR. SAXON: Lat's go back on tha racord. 

6 BY MR. SAXON: (Rasuaing) 

7 Q Colonal, I want to covar a coupla of things In 

8 a llttla mora datall that va touchad on bafora. Tha 

9 first has to do with Iran balng on tha tarrorlst list. 

10 Now you nada that stataaant aarllar and said for which 

11 raason you thought thasa transfers might hava baan 

12 illagal. Tall us a llttla mora in datail what you maant 

13 by balng on tha list of tarrorlst nations and whathar 

14 that was a fact that was widaly known and accaptad within 

15 tha Pentagon. 

16 A Thara is — Congress had directed in a law, 

17 and Z can't cite the law exactly — I believe it's the 

18 Anas Export Control Act — that U.S. arms not be 

19 transferred either directly or through third parties to 

20 any nation involved in terrorist activities. Iran is 

21 currently on the list. It states that it is involved in 

22 terrorist activities and cannot be a recipient of U.S. 

23 military arms, either directly or through third parties. 

24 Consequently — and that, to my knowledge, is 

25 common knowledge of the people who dealt in this 



UNCHSHED 



599 



wmmm 



47 



buslnass. 

Q All right. On a saparat* subject, va'va 
tal]c«d about whether other transfers to the Agency had 
bypassed^^^^^Hwhile ve were just off the record we 
discovered that in a technical sense there is a transfer 
that did go through ^^^^^| naybe as a pro forma action 
after the Any was presented with a fait accoapl i^^^^^f 
So what I'd like to do is have you talk about that for a 
minute and simply offer as Exhibit 1 what we call the 
Vuono memo and give you a moment to look at that. 

(The document referred to was 
marked McDonald Exhibit Number 
1 for identification.) 
I believe you told us that this is an action 
memorandum which, while it bears General Vuono 's 
signature, you authored; is that correct? 

A That's correct. 

Q Nov, this is the declassified version, and you 
can see that there are certain words redacted by the 
Nhite House, and X think in just about every case they 
are the words ^^^^^^^Hsy stem", qiv 
minute to refresh yourself on that. 
(Pause.) 

A Okay. 

Q That went from General Vuono on 18 April 86 to 



vtmmn 



600 



UNiM$m 



48 



1 th« Director of th« Joint Staff. Now I assum* h« would 

2 be writing the Director of the Joint Staff becaus^^A 
^^^^^^^^■reguests the Amy 'ron^^^H !■ that 

4 correct? 

5 A Froo^^^Has well as General Vuono, as the 

6 Deputy Chief of Staff for Operations and Plans of the 

7 Amy, is a member of the Ops Deps, which are all of the 

8 service Deputy Chiefs of Staff for operations and plans, 

9 who meet with the Director and initial on just below the 

10 Chiefs to resolve issues. 

11 And so General Vuono sent it to the Director 

12 of the Joint Staff as the head of the body called the Ops 

13 Deps. 

14 Q And we should note for the record that within 

15 the last month to six weeks General Vuono has become the 

16 new Chief of Staff of the Army; is that correct? 

17 A That's correct. 

18 Q All right. Colonel McDonald, tell us, if you 

19 would, what generated or drove the creation of the Vuono 

20 meao. 

21 A Okay. In the background of having provided 

22 the TOWS on a streamlined basis J and I believe at this 

23 time^^^^Bslso had the first request for HAVnc parts to 

24 consider, the issue 

25 came up. 




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Q Was that a unanimous racoBinandatlon? 
A I have no idea. 




At a subsequent date Mr. Ikle cane back to the 
Joint Chiefs and stated that we In fact were going to 
provide them. I believe the Chief at the time felt that 
he had the opportunity to rebut that; however, he left 
town and we got the order to execute while he was gone. 
When he came back, it was one of the things I debriefed 
him on, and he was, to say the least, unhappy. 

Q So in General wlckham's absence the hard copy 
request from the Agency ^^HHto the Army came li^H 



A That's correct. And we staffed that request 
through the formal system. However, in General wlckham's 
absence we were unaware that he expected to have an 
opportunity to veto that. It was our impression that the 



IINCIIItSSIFIED 



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[with th« Secretary of D«f«n8«'s 
approval, had diractad axacution of that, that our 
staffing waa maraly to datarmina propriaty and lagality, 
which wa did through tha formal system, and on that 

ba8iJ_^ 

recommended to tha Secretary of tha Army, who 
subsequently approved tha execution of that particular 
transfer. 




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Q Now, In light of th« Cosmitt««'s Intarest In 
whether tha^^^^^^^^^systea was followed on th« Iran 
ama Initiative and whether it wor]cs, you've ainply 
described for us a case in which we followed the process 
and ^^^^ with the perspective that they have, overruled 
the Army. Is that a fair way to put it? 

A That's a fair way to put it. And Z would say 
that's not necessarily bad. The Army has its own 
perspective amd has its own equities to protect. 
Obviously the Department of Defense and the Executive 
Branch of government have other equities to look out for. 

Q Is it your sense that the decision ^^^^^ 
kthat we're talking about right now had the 
benefit of that full airing 

ind they were able to kick it 
around and debate it and ultimately vote it down. 



UNCHSSIFIED 



605 



mmm 



53 



1 although th«y war* ovarrlddan? 

2 A I ballev* that^^^^^^^Bhad th« opportunity 

3 to air their vlava and that thos* vlaws war* Boat likely 

4 considered at higher levels, and other aspects determined 
to be domlnant^^^^H^I^H^I^^^^^^^^^^^^^^^H 

6 Q And, to juxtapose the two cases, while we're 

7 working TOHs and HAWKs on one side and ^^^^^^^^^on the 

8 other. Is It fair to say that SNOWBALL and CROCUS did not 

9 have the benefit of the same airing of views? Would that 

10 be one difference? 

11 A That's clearly true. 

12 Q Were you ever made aware on the TOWs that the 

13 Army had sought to get replacement price for the basic 

14 TOW? 

15 A No, I was not aware of that. Z baceuae aware 

16 of it during the IG investigation but was not aware of it 

17 during the transfer process. 

18 MR. SAXON: Colonel, I've got nothing else. 

19 Roger? Bob? 

20 MR. GENZMAN: I have nothing. Thank you for 

21 your time. 

22 MR. KREUZER: Thanks very much. 

23 MR. SAXON: Let me say on the record that we 

24 appreciate very much your testimony. It's been very 

25 helpful and I think as we write a report it will be very 



mtmm 



606 



UNClJmED 



54 



1 halpful in trying to sort out how th« systaa that you 

2 adoinist*r«d vorlca. This has b««n helpful and v« 

3 appraciat* your tin* on ssvsral occasions. 

4 (Nhsrsupon, at 2:52 p.m., th« taking of th« 

5 instant deposition csassd.) 

6 



7 Signature of ths Witness 

8 Subscribed and sworn to before ae this day of 

9 , 1987. 

10 



11 Notary Public 

12 Hy Connission Expires: 



oos':6 



mtwm 



607 



UNCLASSinED 

CERTIFICATE OF REPORTER 

I, MICHAL ANN SCHAFER, th« officar before whom the foregoing 
deposition was taken, to hereby certify that the witness 
whose testimony appears in the foregoing deposition was duly 
sworn by me; that the testimony of said witness was taken by 
me to the best of my ability and thereafter reduced to 
typewriting under my direction; that said deposition is a 
true record of the testimony given by said witness; that I am 
neither counsel for, related to, nor employed by any of the 
parties to the action in which this deposition was taken, and 
further that I am not a relative or employee of any attorney 
or counsel employed by the parties thereto, nor financially 
or otharvis* interested in the outcome of the action. 



Notary Public ^ 
in and for the District of Columbia 



My Coaailasion Expires: February 28, 1990 



UNCIASSIHED 



608 




mmm 

lOARTMINT Of THC AWMY 



/^/)P/^U 



OOAftTMl 

wMMiMcroM. ee a*** 



OAHO-SA ■' 

HSMOMMOUN FOK OXReCTOR, JOINT STAFF 
SUtJICT: ^^^^^^^■Systaa (0) 




18 APR 1968 




1. (S) Th«^^^^^^HHSyst«a previd«s • cinfl* aiana«i for 
r«qu«sta fe^Mpport^Tea tA« Oantrsl Zat«lli9«ae« A««ncy to Ui« 
0«p«ruMnt of 0«f«ns«. tD« tyttca pret«et« •3itr«a«ly Mn«ltlv« 
IsferMtiea frea both ia«dv«rt«iit ud 4alib«rat« dlaclosur*, 
•llew« tot cev«rt support to Kqoacy ep«rAtions werl4wid«, «n4 
ia«ur«s adaquat* S«rvie« r«vi«w of tb* ra^iMtta. 

3. (S) lt«e«atly, • auab«r of roquoata lavolvlof tranafar of'hifh 
taebaole^y ««apoaa, Urga quaatitloa of Uaitad, aophiatleatad 
Laall98,.jAd/or aparaa for low doaaity wa«poas b«v« bypaaaod cho 

^jsyataa. Ihoaa roqnoata havo booa aada by aaabara of 

■^ho Qt fLc^^t tho Socrata rr of Dofanao diro e t ly to Sorviea offl- 

tieipac^^rhaa doao ao aftar th« fact. 

3. (S) Roquoata wtileh bypaaa thi|H^|H Syataa raeolva 
Sorviea aad no Joiat Staff aer«cny, y«t aay iapoet oa tha 
Sorviea'a wacfiflitlaf capabilltioa. Tho SoerotAry of Oofaaaa 
ahould bo aado awaxo that aaiaf ad boc 'aiaaaola to aappert tha CZ 
■ay doqrado aocvrlty ovorall aad iapoir aatioa«l aocurity. 



b'j S. StiK '^iBoSaf filSd«^ CW.XII 



CAUL t. ymm 

Lioutanant Ganaral, CS 
Ooputy Chiof of Staff for 
Oporationa and flana 



006:8 



5 Hcl>r]a\(L 



traezii 



>XM or ms Boeoan is 

■ UB C A WH MMM NOUnM. 

tfnaununvi oistuionM 
wuaAwnumn.. 



UNCIMFIFD 




curi 






609 



STEIN/ bap 



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DEPOSITION OF ROBERT C. MCFARLANE 

Thursday, July 2, 1987 

U.S. House of Representatives, 

Select Committee to Investigate Covert 

Arms Transactions with Iran, 
Washington, D.C. 

yhe Committee met, pursuant to call, at 5:30 p.m., 
in Room B-352, Rayburn House Office Building, with Pamela J. 
Naughton, House Select Committee, presiding. 

Present: On behalf of the House Select Committee: 
Pam Naughton, Ken Buck, and Richard Leon. 

On behalf of the Senate Select Committee: Mark Belnick 
and Victoria Nourse. 

On behalf of the witness: Leonard Garment and 
Peter W. Morgan, Dickstein, Shapiro & Morin; 2101 L Street, 
N.W., Washington, D. C. 20037. 



a|o3S 









iHiH 



T?T 



610 



lIli,^®T 



1 Whereupon, 

2 ROBERT C. MCFARLANE 

3 having been first duly sworn, was called as a witness herein, 

4 and was examined and testified as follows: 

5 MS. NAUGHTON: For the record, my name is Pamela J. 

6 Naughton, Staff Counsel to the House Select Committee to 

7 Investigate Covert Arras Transactions with Iran. 

8 Will the others present please introduce 

9 themselves? 

10 ' MR. BUCK: Ken Buck, Assistant Minority Counsel, 

11 House Select Committee. 

12 MS. NOURSE: Victoria Nourse, Staff Counsel, 

13 Senate Committee. 

14 MR. BELNICK: Mark Belnick, Executive Assistant 

15 to the Chief Counsel, Senate Committee. 

16 MR, MORGAN: Peter Morgan, Counsel for Mr. 

17 McFarlane. 

18 MR. GARMENT: Leonard Garment, same. 

19 MS. NAUGHTON: For the record, Mr. McFarlane is 

20 being deposed today. 

21 Mr. McFarlane, we appreciate your cooperation in 

22 coming at this strange hour to wrap up a few details that 

23 have come up in the hearings since you testified publicly 

24 a while ago. I want to try to short-circuit some things, 

25 but don't let me cut you off. If* there are some things that 

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1 you feel necessary to explain, feel free to go ahead and put 

2 whatever you want to on the record. We don't mean to limit 

3 you, but we do have specific questions to ask you. 

4 I would ask if Mr. Belnick can ask his questions 

5 first, since he has to leave. 

6 EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 

7 MR. BELNICK: I join Pam in thanking you for 

8 making yourself available after you have testified so 

9 extensively to the committees previously. I would like to 

10 ask that this document be marked as McFarlane Exhibit 1. 

11 (The document referred to was marked for 

12 identification as McFarlane Exhibit 1.) 

13 MR. BELNICK: For the record, McFarlane Exhibit 1 

14 consists of a memo dated March 8, 1985 from Oliver North 

15 to Robert C. McFarlane, and attached thereto is another 

16 memo prepared apparently for Mr. McFarlane to send to 

17 Max L. Friedersdorf . The exhibit bears our Bates stamp 

18 numbers N-40599 through N-40603. 

19 BY MR. BELNICK: 

20 Q Mr. McFarlane, have you seen these documents 

21 before? Recognizing that I have showed them to you in a 

22 private interview session, do you recall seeing the matter 

23 about the time indicated, March 1985? 

24 A No, I don't^ 

25 Q You will notice that page N-40600, which is the 



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first page of the memorandum prepared for you by, 
apparently Colonel North, describes a meeting with members 
of the House Permanent Select Committee on Intelligence 
held on March 4, 1985. 

Looking at that memorandum, do you recall any of 
the — first of all, do you recall that meeting? 

A I don't really. I think we have checked on my 
schedule, and it did occur. I eim confident that we did. 

Q You don't recall the meeting at all, though, 
independently? 

A No, I really don't. . , 

Q Does looking at this document refresh your 
recollection as to any of the discussion at the meeting and ii 
particular any discussions at the meeting, including private 
sector and, third country assistance for the resistance? 

A No. I am surprised by that, especially the 
reference that is attributed to Congressman Hyde, which 
I would think is the kind of thing I would remember, but I 
don ' t. 

Q Why are you surprised by the reference? 

A Well, it implies that he believed at the time 
that we ought to be trying to get money from! 
^^^^^^^^^^fand it is cast in a way that should expand as 
if he were witnessing of the fact that we, at the time, were 



already receiving money fro; 






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If he knew that I am surprised, and even if he 
did not know that, for him to be suggesting something which 
by that time would have been illegal, is implausible to me, 
and I think that would stand out in my mind if it happened. 

Q If Mr. Hyde was aware of the existence of third 
country assistance, it was not from you? 

A No. 

Q And you have no information that Mr. Hyde was 
aware of that fact, do you? 

A^ No , I don ' t . 

Q One more question on this matter. I take it, 
Mr. McFarlane, that you have no recollection of Mr. Hyde 
either at this meeting on March 4, 1985, or at any other 
time discussing in your presence obtaining third country 
assistance for the contras? 

A No, I do not. 

Q No recollection of that at all, correct? 

A No. 

Q And no knowledge or information that he ever had 
such a discussion? 

A No. 

MR. GARMENT: Do you mind if I look at the two 
annexes? 

MR. BELNICK: Not at all. Feel free. 



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1 MR. BELNICK: Could you mark this next document 

2 as McFarlane Exhibit 2? 

3 MR. LEON: I note for the record that Exhibit 1 

4 starts off with a Bates stamp 40599 and consecutive 

5 numbering up to the last page. It appears to be consecutive 

6 numbering up to N-4060, although there is a stamp that 

7 marks, whether it is 02 or not — the last page is headed 

8 with a number 12 on it. It does not have a Bates stamp on it 

9 The first line reads, "Mr. — 

10 MR. BELNICK: It looks like a document that got 

11 attached by a Xeroxing mishap. 

12 MR. LEON: If it is an accidental thing, I ask 

13 that it be removed now from the deposition. 

14 MR. BELNICK: I can't believe that it is part of 

15 this exhibit, so we will remove page 12. 

16 MR. GARMENT: Agreed. 

17 (The document referred to was marked for 

18 .identification as McFarlane Exhibit 2.) 

19 BY MR. BELNICK: 

20 Q Mr. McFarlane, McFarlane Exhibit 2 is a copy of 

21 a cable that we believe was sent by you to the Secretary of 

22 State on or about July 13, 1985, bearing our stamps, N-42447 

23 through N-42452. I will ask you to look at it and confirm 

24 whether it is a copy of a cable you sent to Secretary Shultz 

25 on or about that date 





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MR. BELNICK: Would you mark that as Exhibit 3? 
(The document referred to was marked for 
identification as McFarlane Exhibit 3.) 
BY MR. BELNICK: 
Q Is the answer to my question, yes? 
A Yes. 

Q I would like to now show you a document marked 
as McFarlane Exhibit 3. It is a State Department cable 
bearing our Bates numbers S-000038 through 40. 

I believe, Mr. McFarlane, that this document, 
McFarlane Exhibit 3, is the response you received from 
Secretary Shultz to your cable, McFarlane Exhibit 2, and 
would ask you simply so to confirm. 
A Yes. 

Q Now, Mr. McFarlane, you recall in your testimony 
at the public hearing in this matter you testified concerning 
meeting with Oliver North about the congressional query in 
the summer of '85, and in the course of your discussions 
with Colonel North, you brought to his attention certain 
documents that you had pulled from the files that he had 
written, which you said contained language that concerned 
you. 

Do you recall that testimony generally? 
A Yes, I do. 
Q Again, generally you testified that you said to 



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1 Colonel North that the disturbing language in those memos was 

2 at the least ambiguous and could be construed by some 

3 persons to indicate that he had not lived within the 

4 confines of the Boland amendment generally speaking? 

5 A That is correct. 

6 Q Colonel North gave you answers concerning those 

7 documents, and you testified on May 11, 1987, at page 189 

8 to 190 of the transcript that at some point Colonel North 

9 came to your office with two single pages, quoting from 

10 page 18^9, "One of them was the same text or close to it 

11 of the first page of a memorandum. The second piece of 

12 paper was the last page of a memorandum. I say that 

13 because the format was from and to on the first page, and 

14 the signature page on the last page, so it wasn't an 

15 intervening page. He pointed out to me on the single sheet 

16 the first page what had been altered to reflect with 

17 greater clarity what his intention had been, and it 

18 didn't seem to me substantial," and so forth. 

19 Since that testimony of yours, we have had a 

20 document produced to us that we did not have when you 

21 testified the last time. And I will ask the reporter to 

22 mark this document as the next McFarlane Exhibit. 

23 (The document referred to was marked for 

24 identification as McFarlane Exhibit 4.) 

25 MR. BELNICK: And you would you mark this one as 

iMUftCfiicicn 



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UIKSIFEPT 



McFarlane Exhibit 4-A. 

(The document referred to was marked for 
identification as McFarlane Exhibit 4-A.) 

MR. BELNICK: For the record, McFarlane Exhibit 
4 consists of pages Bates stamped numbered N-42468 through 
474. The first four pages or five pages are cover sheets. 
The last two pages consist of a memorandum dated December 4 
1984 from Oliver North to Robert McFarlane. Subject: 
Confusion in the Nicaraguan Resistance. 

Next to it. Exhibit 4-A, bears our Bates stamp 
numbers N-32858 and 59. It is a two-page document also 
dated December 4, 1984 -- 

MR. GARMENT: Which one is that? 

MR. BELNICK: Also dated December 4, 1984 from 
Oliver L. North to Robert C. McFarlane, Confusion in 
Nicaraguan Resistance. The first two pages of Exhibit 4, 
the first page of Exhibit 4 and the first page of Exhibit 
4-A from our review seem to be identical in content, but 
if you will turn to the next page of the memorandum — 
the underlining, by the way on Exhibit 4, is ours — 
Exhibit 4 on the second page -- if you look at the next 
to the last sentence of the first of the carry-over paragraph 
on Exhibit 4, it reads as follows: 

"While I may not have been fully open with him on 
this matter, it did not seem to me to be relevant to his 

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1 other important tasks given current funding arrangements." 

2 Do you see that? 

3 THE WITNESS: Yes. 

4 BY MR. BELNICK: 

5 Q Now if you look at the same place on Exhibit 4-A, 

6 current funding arrangements has been changed to current 

7 funding problems. And the word, "his," given his current 

8 funding problems as opposed to given current funding 

9 arrangements. Those two pages, then, are different. 

10 Looking at that, Mr. McFarlane, do you recall 

11 whether this page or these pages were the pages that North 

12 brought to you at the time you were discussing problem 

13 documents in the late August or early September of 13 85? 

14 A Well, I remember receiving at the time of origin, 

15 I would guess, December of '84, a memo concerning 

16 a contra meeting with other staff members, which Colonel 

17 North was upset about, so I expect it was this memorandum. 

18 As to your question, I am afraid that I do remember 

19 that one of the two pages I got was a final page, as I 

20 testified. I couldn't be certain that it was this final 

21 page. The substance of this change doesn't stand out to me 

22 as one that I have seen when he brought those two pages 

23 to me. So I can only say that it is very possible. I 

24 am not certain that it was. 

25 Q Apart from whether it must have been one of the 



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two pages that Colonel North brought to you at the time, do 
you have any other recollection of this document being 
changed at any time? 

A No , I don ' t . 

Q Thank you, Mr. McFarlane. I have just one or 
two more questions. And excuse me for jumping around. 
November 21, 1986, the day you met with the 
Attorney General, do you have any recollection of tele- 
phoning Lieutenant Colonel North that evening after you 
spoke to the Attorney General? 

A Yes, I did. 

Q Could you please tell us the substance of that 
conversation? 

A Well, I went outside and at curb side at the 
driveway entrance to the Justice Department on the 
western side is a telephone. I say that because it was 
outdoors. This was November and it was very cold. 

I called Colonel North, probably through the 
|[^^^^B, number and they connected to him, the White House 
switch board, and as I recall, I gave him a summary account 
of what I had said; that I had given the Attorney General 
a summary record of my recollections concerning the 
Iranian initiative; how it started; how it was conducted 
and without very much detail, but said that it seemed to 
me to have gone without incident and it had been very 






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1 straightforward. I expect that was all. 

2 Q Did you tell Colonel North on the phone that the 

3 Attorney General had indicated to you in your private 

4 discussion with him that if the President had made an oral 

5 or what you would call in a professional note, mental 

6 finding, to support the shipments in 1985, that would have 

7 satisfied the requirements of the finding law? 

8 A Well, I don't remember saying that he especially, 

9 but I do recall that when the Attorney General told me 

10 that, that it seemed to stand out in my mind as important, 

11 and so legally I think--! have no specific recollection. 

12 I imagine that I would have passed that along because it 

13 seemed to me at the time to be an important part of the 

14 conversation. 

15 Q Did Colonel North say anything to you in that 

16 conversation? 

17 A Whatever he said, I don't recall. It was 

18 "acknowledging what I had told him and little else. 

19 Q Thank you, Mr. McFarlane. These will be my last 

20 questions and they will refer to an article which appears 

21 in the current issue, the July 1987 issue of the 

22 "Washingtonian, " an article entitled, "The Ollie We Knew," 

23 by David Halevy and Neil Livingstone. 

24 I just want to ask you about a couple of assertions 

25 in this article, Mr. McFarlane, that I think you may have 



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knowledge of. In 1982 at the time of the Israeli move into 
Lebanon, what was your position? 

A I was the deputy to the assistant to the President, 
at the time Judge Cxark. 

Q And Colonel North would typically report to Judge 
Clark through you at that time? 

A Yes. 

Q According to this article at the time of the 
Israeli move into Lebanon — I am now paraphrasing from 
the article — Colonel North was in Israel with Philip Habib. 
Do you recall whether that was so or not? 

A I don't. I would be surprised if he were. I 
usually did track who went from our staff anywhere, and he 
would not have been the person of choice to go over 
there at the time. It would have been Jeff Kemp or Bob 
Kinimet or one or two others. 

Q Continuing the article says that while Colonel 
North was there he was invited to the desert residence of 
Ariel Sharon the night that Israel moved into Lebanon; 
that Sharon showed Colonel North certain secret plans of 
Israel relating to the invasion and relating to an effort 
to get the U.S. to intervene on behalf of Syria in order to 
make Syria beholden to the U.S.; that North rushed back to 
the embassy in Tel Aviv and bypassing diplomatic channels 
sent a report of this alleged Sharon secret war plan to 

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1 National Security Advisor Clark, who was with the 

2 President then at Versailles. 

3 , The article then says that no one in the 

4 government took time to give any attention to the Sharon 

5 proposal. Is any of that true to your knowledge? 

6 A I don't think any of it is true. 

7 Q Have you ever heard of any such secret war plan 

8 prior to reading about it in this article? 

9 A Never in that context. There has been another, 

10 I thinK, fictitious assertion that such an exchange took 

11 place between General Sharon and Secretary Haig, and 

12 I don't think that is true either. 

13 Q So you are not aware of any such report from 

14 Colonel North back to Washington? 

15 A I am not. 

15 Q So the best of your knowledge, this story is 

17 false? 

18 A I believe it is false. I say that also because 

19 Ariel Sharon is not the kind of person who deals with 

20 subordinates. He talks only to Adcims , and they to God. 

21 Q And from there it is a local call. The other 

22 aspect of this article that I want -- the other aspect of 

23 this article that I wanted to ask you about, Mr. McFarlane, 

24 same article, relates to stories concerning Colonel North's 

25 alleged role in the American military action in Grenada in 



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1 October '83. 

2 First the article asserts, and I quote, "North 

3 coordinated military and policy planning groups in 

4 preparation for the invasion and fought a losing battle to 

5 persuade Pentagon brass to use only Americans." It says 

6 also that Colonel North was responsible for traveling to 

7 Caribbean nations to get their support and that he put 

8 together the regional multinational force that never went to 

9 shore; that it was he who was dispatched by you — 

10 what was your position in October '83? 

11 A I had become the assistant to the President on . 

12 October 17th, about two weeks previous. 

13 Q You were the President's national security adviser 

14 at that time? 

15 A Yes. 

16 Q The article says it was North who was dispatched 

17 by you to get the President's signature on the order 

18 authorizing deployment of the American amphibious units so 

19 the invasion could proceed. Is any of that true so far as you 

20 know? 

21 A Not in its apparent intent. He was a junior staff 

22 officer who did participate in policy planning, but the 

23 substance of the account is wrong. He would not have been 

24 in a position, for example, to recommend to the joint chiefs 

25 the composition of the force. That was between Army and 



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1 Marines. That was not his role. 

2 Q Was it his role to coordinate the military and 

3 policy groups? 

4 A To participate on a group, but he was not the 

5 chairman of it. 

6 Q Was he in charge of putting together the multi- 

7 national force in the Caribbean? 

8 A I don't think there was such a group. 

9 Q Could you describe what Colonel North's role was 

10 with raspect to the Grenada action? 

11 A Well, he was one of two NSC staff representatives 

12 that participated on interdepartmental planning that led up 

13 to it. That doesn't imply participation in the military 

14 planning though. That was the role of the Joint Chiefs. 

15 His job was to make sure that the President's directions 

16 were simply communicated to the others in the community 

17 accurately, and then to report back any problems that were 

18 surfaced in this group, with carrying out the President's 

19 instructions, but essentially a communicator, not a 

20 policy role. 

21 Q And not a Commander-in-Chief. 

22 A Oh, no. 

23 Q Lastly, the article alleges that Colonel North 

24 was able to pop in on President Reagan by entering the Oval 

25 Of f ice, "through the side door, and his meetings were not 



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1 logged in. " 

2 Based on your years in the White House and your 

3 knowledge of the Oval Office, your knowledge of 

4 the President, your knowledge of Colonel North, how do you 

5 react to that assertion that Colonel North could enter 

6 the Oval Office through a side door without his meetings 

7 being logged in? 

8 A That is impossible. There are two side doors. 

9 There is a Secret Service guy next to one and the other 

10 one is -Mr. Deaver's office, and it was locked, and he 

11 couldn't get through that way. 

12 Q And if he tried to come in through the Rose 

13 Garden, when would the funeral be? 

14 A That was not feasible. 

15 MR. BELNICK: Thank you, Pam. Thank you for 

16 permitting me to lead off. I have no further questions. 

17 EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 

18 BY MS. NAUGHTON: 

19 Q Mr. McFarlane, you mentioned Judge Clark. You were 

20 working for him during a certain period of time. After 

21 Judge Clark left government service, did you stay in 

22 contact with him? 

23 A Occasionally. Usually, however, at his initiative. 

24 I suppose he might have called, oh, once a month or I would 

25 see him while he served as Secretary of Interior and he 






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would come to Cabinet meetings, and I attended Cabinet 
meetings. But periodic, a dozen times a year maybe. 

Q To your knowledge, was he aware of any of 
Colonel North's activities regarding contra re-supply 
operations? 

A Not to my knowledge. 
.Q I have here a prof note from March 28, 1986, 
which I will show you, but I first would like to read it 
into the record, because it is very hard to read. It nay 
help. ^It is a note. It says, "From: Robert McFarlane; 
Subject:" and then that is blacked out. "Promotion. David 
Fisher called this morning. I believe he has also 
called Florence to discuss the wish of a private group of 
well-meaning and well-heeled conservatives to help promote -- 
it is blacked out -- on T.V. This group has put together about 
$3 million worth of ads on the contra issue in the last six 
months and is very supportive, and by all accounts, 
responsible. " 

The remainder is blacked out. The last sentence 
says, "At any rate, if you want to follow up on it you might 
call Dave." And it gives a number. "For what it is worth, 
these folks care less about being stroked; they want to 
help." Do you recognize those words? 

A This sounds very plausible because those events 
occurred. I recall Mr. Fisher contacted me about people who 



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1 wanted to promote, thought it was ^^^^^^^^^^^^^^^ actually, 

2 on television. 

3 Q Do you know who these people were? 

4 A No, 

5 Q For the record, Mr. Fisher is -- 

6 A David Fisher had been the President's personal 

7 assistant until leaving the White House in early '85, I think 

8 and at the time was a private attorney whom I had -- who 

9 I believe was living in Salt Lake City, visiting Washington. 

10 Q I would like to ask you about a couple of these 

11 deletions here. In the second sentence, conservatives 

12 to help promote — what is that word? It is partially 

13 blocked out. 

14 A This is a guess. I bet that it i^^^^H 

15 Q Then the blackened out portion towards the end 

16 of the paragraph after the word, "responsible," do you 

17 recall what that discussion was about? 

18 MR. LEON: Let me ask this: Is that an 

19 unclassified document now? 

20 MS. NAUGHTON: No. 

21 MR. LEON: Who blackened it out? 

22 MS . NAUGHTON : I don ' t know . 

23 MR. LEON: Is this a code word deposition? 

24 MS. NAUGHTON: Yes. It has been swept. 

25 MR. I|^^| ^Vh^ a|r^^ vm. «n^oduce it as an exhibit 



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1 into the record? 

2 MS. NAUGHTON: This is my only copy, and I don't 

3 want to have it go out. 

4 THE WITNESS: I don't know. I assume it is 

5 talking about the same thing, about this group of people. 

6 All I recall about what Mr. Fisher told me was that he had 

7 met a group of people who were responsible, law-abiding 

8 supporters of the President who had asked his help in 

9 trying to prepare supportive advertising, television — not 

10 commelrcials, but it is supportive material — and that they hac, 

11 already been doing the same kind of work on urging American 

12 support for the President's policies in Central America, 

13 and — it is probable — I am trying to think why he would 

14 have asked me in the first place -- it is probable that 

15 they would be volunteering, but needing some help in getting 

16 current positions from the administration on just what it 

17 wanted stressed, what is your policy ^^^^^Hand how can 

18 we help. 

19 So I cun guessing that that seems likely. 

20 BY MS. NAUGHTON: 

21 Q Do you know what would have been — is there 

22 anything Mr. Fisher said to you in that conversation or 

23 that you later related about that conversation that would 

24 have been classified above top secret? 

25 A I don't think so. 

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1 Q Was there any discussion of this group of people 

2 contribution to the political campaigns? 

3 A I don't think so. No. 

4 Q What was done about this information that Mr. 

5 Fisher related to you? 

6 A Well, if Admiral Poindexter even acknowledged the 

7 note, I guess it would be in the file, but I don't believe 

8 that he did, and that this was the last that I had to do 

9 with it. It was a matter of passing along information from 

10 Mr. Fisher, and assuming that the matter was closed -- I 

11 guess I said in the message that if Admiral Poindexter 

12 wanted to follow-up, he could call David, and I never 

13 heard anything more about it. 

14 Q Now turning your attention to the events surround- 

15 ing, first of all, the shipment of Hawk missiles in 

16 November of 1985, and then as it related to the Attorney 

17 general's investigation beginning the third week in November, 

18 why don't you start out and tell us what your understanding 

19 was in November of 198 5 regarding the shipment, the 

20 Israeli shipment to Iran to begin with, and as your 

21 knowledge evolved about the shipment. 

22 A Well, I think I testified to it and I don't know 

23 of anything new that has come to my mind, but in sum, this 

24 was a matter that I learned of while in the course of the 

25 summit meetings in Geneva. There hadn't been any forewarning 



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1 from Israel to me or to the staff that I know of, of an 

2 intention to do this before we left for Geneva, and I had 

3 had a meeting from or a visit from the Israeli Defense 

4 Minister Rabin at the time, who ccune in on November 15th 

5 to see me, and I think that his purpose was basically to 

6 reconfirm for his government that the U.S. Government still 

7 agreed with their negotiating the sale of Israeli weapons 

8 and being able to come to the U.S. if they did to replenish 

9 them. 

10 ' And he came to my office for a very short time, 

11 10 minutes, and asked about that. I think personally that 

12 he had some misgivings about continuing to go on with 

13 it. I told him I had some myself, but that it was the 

14 President's policy to continue to authorize them to do so. 

15 And he left and the next morning I went on to Geneva with 

16 the President. 

17 MR. GARMENT: Do you mind if I have the record 

18 show that since he previously testified on the matter we 

19 have undertaken, both discussed the matter with Mr. McFarlane 

20 and others who have provided independent information that 

21 results in some small, but nevertheless significant changes 

22 in the focus of his recollection -- that had been discussed 

23 with you previously and with Mr. McFarlane, and are contained 

24 in certain notes which we furnished you and which we would 

25 appreciate havi_n2_ma^e part^ of_ the_record 



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MR. LEON: Do you have those notes with you? 

MR. GARMENT: Do it any way you want, either now or 
at the end of the testimony. 

MR. MORGAN: What Mr. Garment is referring to, 
the first document is entitled, "Background to Events of 
November and December 1985 Relating to Robert McFarlane." 
This was prepared by our office in consultation with Mr. 
McFarlane. Since he last testified, we have gone back 
through the records and in detail, it has some details that 
we didn't have before, for example, the duration of the 
meeting with Mr. Kimche and Mr. Rabin and so forth. 

MR. LEON: Do you have a date when that was 
prepared, Peter? 

MR. MORGAN: Today. 

MS. NAUGHTON: If we can make this exhibit next 
in order, I believe 5 or 6. 

(The document referred to was marked for 
identification as McFarlane Exhibit 5.) 

MR. LEON: I would move the admission of the 
document that Mr. McFarlane was questioned about, the 
prof note, even though Ms. Naughton doesn't have an extra 
copy with her. I would suggest that she make an extra copy 
and I will have it delivered to the reporter's office, but 
that it be deemed to be Exhibit 5 and that this exhibit here 
be deemed to be Exhibit 6. 



632 



Wtmrn 



r 



24 



1 MS. NAUGHTON: Fine, if Mr. Leon will take it upon 

2 himself to do that. 

3 MR. LEON: Absolutely. 

4 (The document referred to was marked for 

5 identification as McFarlane Exhibit 6.) 

6 MS. NAUGHTON: I don't want to go into all the 

7 details on the November shipment. If you wish to elaborate 

8 or correct anything, please do. As to the replenishment, 

9 had you or Colonel North or anyone at the NSC checked with 

10 the Department of Defense regarding the possibility of 

11 replenishment and what that procedure would entail? 

12 THE WITNESS: I had not and I didn't task anyone 

13 else on my staff to do so. Since testifying, I have 

14 learned that others have confirmed that the Defense 

15 Department was tasked to identify how quickly and at what 

16 cost Hawks could be replenished to Israel. But I am 

17 afraid I do not know who tasked them for what the result 

18 was. 

19 BY MS. NAUGHTON: 

20 Q What was your understanding, then, when you 

21 spoke to the Israelis about replenishment — what was 

22 your understanding regarding the ease with which this could 

23 be done or the difficulty that that would present? Did 

24 you have any sense of what it would take to replenish those? 

25 MR. MORGAN: You are taUcina about replenishment 



jiM^n^'^lMW 



633 



imSWtrr 



25 



1 MS. NAUGHTON: Yes. 

2 THE WITNESS: Well, I didn't have any idea. As I 

3 recall, the only time to me that I got into a discussion 

4 on replenishment occurred back in August when Mr. Kimche 

5 came from Israel, and we talked about how Israel might make 

6 the sales instead of the U.S. , because I had conveyed to 

7 him that the President had disapproved our selling arms 

8 to the Iranians directly, and he said, well, he believed 

9 that his government could do it, but that the key concern 

10 for thfem would be being able to buy replacements. 

11 And he said that he believed that it would have, to 

12 be on a pretty timely basis, soon, not a matter of years, 

13 for example, and I said at the time, well, it seems to me 

14 that what you ought to do, though, is to send in, to find a 

15 way for you all to request as part of your annual request, 

16 whatever additional arms you may need so that it won't 

17 stand out as something that is unusual. 

18 And he said, well, yes, that makes sense. And I 

19 put it out of my mind at that time and expected that 

20 probably they would be coming in with an expanded request 

21 for in this case TOWs in December, which was the normal time 

22 for Israeli submission to come in. 

23 In fact right now, at this very day. Defense 

24 Minister Rabin is here in town doing that very thing. He 

25 actually is following up on what he asked for this past 

iiMDi Aoonnrn 



634 



URSEA^REt^T 



26 



1 MS. NAUGHTON: Did you hear anymore about this in 

2 terras of the mechanics of ordering the replacements? 

3 THE WITNESS: I never did, no. 

4 BY MS. NAUGHTON: 

5 Q Did you ever have any conversations with Secretary 

6 Weinberger about the issue of replenishment? 

7 A Well, I expect there were conversations at the 

8 outset back in August just confirming for him when the 

9 President made the decision that, yes, replenishment was 

10 authori'zed. At the time of the transaction in November, I 

11 don't remember any. At the same time I did have a habit - 

12 each day in the context of the summit of calling 

13 Secretary Weinberger at the end of each day and reporting 

14 to him here is what Ghorbachev talked about, and going 

15 through the record of the talks — and I am kind of drawing 

16 this from logic -- because I had learned about this 

17 Israeli sale while in Geneva. It is likely that I passed 

18 that along, too, but I have no concrete recollection of it. 

19 Q Getting back specifically to the November shipment, 

20 as of November 15th, did you know that the Israelis were 

21 planning on a shipment? 

22 A No. 

23 Q When is the first you learned of the shipment? 

24 A Well, again, it is based on what I think is likely, 

25 and that is that because the Defense Minister didn't 



IIMPI ACCP nrn 



635 



WBOTHI 



27 



1 

2 

3 

4 

5 

6 

7 

8 

9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 



mention it to me, and Mr. Kimche had not mentioned it to me, 
there was no other communication to me from Israel, it is 
likely that after he called, he, the Defense Minister, 
called me from New York on Sunday or Monday; that he 
said there was a problem. 

He didn't mention any arms or weapons, and I 
passed the problem on to Admiral Poindexter and to Colonel 
North by phone asking that they be in touch with Defense 
Minister Rabin in New York, and help solve the problem, 
whatever it was. 

Well, finally to answer your question, I think that 
having contacted Rabin, North then reported back to me 
again Monday or Tuesday, and told me what the nature of the 
problem was; that Israel was indeed transferring Hawks. 
So it is probably Monday the 18th of November when I first 
learned of it. And I passed that along to the Secretary of 
State and to the President. 

Q Did Colonel North tell you how many Hawks 
were being shipped? 

A Well, I have a faint memory of the number 80 and 81 
And I am not sure which one it was. I have learned since 
from the Tower Report, I believe, that actually 18 were 
sent, but I don't know if I knew that at the time. 

Q You said that you then passed this information 
on to whom? 



lINCUiSlFiEO 



636 



iR^saB*' 



1 A To the President and to the Secretary of State. 

2 Q And did you tell the President that they were 

3 Hawk missiles that were being shipped? 

4 A Yes. 

5 Q Did he have any reaction to that? 

6 A Oh, I believe that he was hopeful as he always 

7 was that this would lead to the release of hostages. 

8 Q And did you explain to the President that they 

9 were coming from Israeli stocks? 

10 A' I don't know. I doubt it. This was something 

11 I would have covered in a matter of seconds and gone on to 

12 summit agenda. 

13 Q And you also informed Secretary Shultz of this? 

14 A Yes, I did. 

15 Q Do you recall what his reaction was? 

16 A Well, I don't know. I am prodded, I guess, by 

17 having read what his purported reaction was in his own 

18 notes, and I don't have any memory of that either, but I 

19 take it that he, as recorded, that he was dismayed at 

20 learning about it so late, although he certainly knew about 

21 it as soon as I did. 

22 Q But here and now on your own accord you can't 

23 recall his reaction? 

24 A No . 

25 Q When you informed Secretary Shultz, was he alone 

men 



637 



llNtUBSW 



29 



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

It 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



or in the company of anyone else? 

A He was alone. I believe that I went to his hotel 
suite and we went into the private office, and we were alone. 

Q Did he take notes of your conversation? 

A I don't remember him ever taking notes of our 
conversations, but I was aware that his habit was to tell his 
assistant, Charlie Hill, about whatever he had discussed 
so as to take any follow-up action that might be necessary. 

Q Did you take any notes of either what Colonel 
North Ijad told you or of your briefing sessions with the 
President or with Secretary Shultz? 

A No, I did not. 

Q Moving, then, from that time frame to the third week 
in November of 1986 — 

A Would you mind if I just gratuitously added a 
comment that I think seems to be important, but thus far is 
not on the record? 

Q Sure. 

A I guess the issue here understandably is what did 
I know and the extent to which it was an important matter of 
consequence to me. This was a time after I had been 
National Security Adviser for about two years, and from 
the time I entered the job it seemed to me that there might 
still be an opportunity to do one or two significant things 
in foreign affairs, and for me talking with the President 
and the Secretary |lhUt| ,|l.K^<l4plr«r that that was to 



638 




1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

II 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



30 

try to forge some framework for doing business with the 
Soviet Union. And working with the President and the 
Secretary, we laid out a strategy of how to do that. And 
the opening part of it was the President's speech in 
January '84, which is rather remarkably different from the 
tone he had had for the Russians in the past. I don't 
say this to bore you, but the point was we began a train 
of events that were very purposeful and designed to engage 
the Russians in a discussion along the whole spectrum 
to arms- control, trade and cult(ryQ^l matters, et cetera. 

It played out in the course of '84 and in '85 
with the change in Soviet leadership for the third time in 
a four-year period we got a rather significant change in 
their side of things when Ghorbechev, on April 1st, committed 
to come to a meeting in Geneva in the fall and that 
absorbed, from that moment on, all of our attention. 

I say virtually all of our attention. That isn't 
to say anything else didn't come up, it did, the hijacking. 
But the President's agenda and mine was very much oriented 
toward doing everything we could with the three con- 
stituencies you must muster whenever you undertake a big 
initiative -- Congress, the American people and the allies, 
understand what you want and to support it. Because the 
important part of going to a summit is to arrive there with 
the adversaries seeing that you are supported by allies. 



JlMai5£lPCIl 



639 



ll«[!EIBSIfll& 



ET 



31 



1 your body politic and the U.S. Congress. So you develop 

2 a strategy for laying out your agenda in speeches, m 

3 meetings with the leadership of Congress, in visits to 

4 the United Nations, in a dozen ways, and in your travel and 

5 so forth. 

6 This is what we were doing in the summer of '85 and 

7 in the fall. It picked up in the fall because you began 

8 to get into the concrete business of what change will we 

9 make in our arms control position, what kinds of resolution 

10 of boundary disputes and other things that you can sign at 

11 the summit to demonstrate progress. 

12 The Foreign Ministers began to get together and 

13 their Foreign Minister came to our country and you must 

14 prepare quite a lot for these things. September was the time 

15 of the Foreign Minister Shevardnadze's visit, and between 

16 that time and eight weeks later when we arrived in Geneva 

17 the President made four major speeches to give an explana- 

18 tion to the Americans about four objectives he had for the 

19 summit, arms control, regional disagreements like Afghanistan 

20 human rights and the bilateral agenda. 

21 One of these was given at the United Nations, 

22 and that included visits with 37 heads of State and you had to 

23 prepare for those, too. Then I went to Moscow with the 

24 Secretary of State to try to shave some of the disagreements 

25 off in a few of the problem areas for five days, and then 

iiMPi ftccincn 



640 



llfflSBRBF 



32 



1 would spend probably half of my time on a given day in 

2 background sessions with the press, calling in journalists 

3 and telling them here is what we are trying to do and to get 

4 their expectations not over-inflated, but conscious of what 

5 might be feasible. 

6 And then the Achille Lauro was seized. We 

7 didn't plan that, but it took some time. My point in 

8 this rhetoric is not to try to give you some sense of 

9 grand strategy, it is to say I didn't give a damn about 

10 this thing. This was not important. This was not 

11 going to lend one whit to whether the President of the U.S. 

12 succeeded in his central responsibility m bringing stability 

13 to East/West relations. 

14 I should have, I think. I think if you had been 

15 more on top of these things then it wouldn't have gotten 

16 off course, but if someone had come in and told me on 

17 November 15th they are going to ship Hawk missiles, I would 

18 have said, "I am late for a backgrounder." This wouldn't 

19 have been something of great consequence to me, and it 

20 wasn't. 

21 The other point I would make that is kind of 

22 gratuitious is that things were working well, and I could 

23 see that I was going to leave the government and the 

24 President would have achieved something worthwhile. But 

25 I was going to leave and was pleased to leave because what 

imniiccmtn 



641 



^^0^ 



33 



1 it had taken to get this community of people into this 

2 summit was an enormous task and the prospect of having to worl< 

3 under these conditions with a Cabinet that was in very sharp 

4 disagreement was intolerable. So I decided to leave the 

5 government. 

6 Part of that decision, too, was wanting to clean 

7 up some loose ends and this was one of the loose ends. 

8 There was -- and we will perhaps get later to the London 

9 meeting where I thought I had closed it down. But in 

10 the period in question, November 15 to December the second, 

11 I was in Washington D.C. for a total period of perhaps 

12 six hours, and otherwise with the President in Geneva or 

13 in California and out of communication with my colleagues 

14 and staff, and pleased to be so. 

15 BY MS. NAUGHTON: 

16 Q Mr. McFarlane, I understand what you are telling 

17 us and I appreciate your comments. Please, I want you to knov 

18 what we wanted to do today is simply to piece the puzzle 

19 together in terms of the facts that you know. We are not in 

20 any way trying to prove what you knew or when you knew it. 

21 I am trying to piece the puzzle together in front 

22 of us. 

23 I want to move then to November of 1986, and let's 

24 take it from approximately — let's take it from November 

25 7th actually. I noticed in the chronology that you and your 

ii&iAi lAAirirn 



642 



MSPBP 



34 



1 attorneys have prepared, and perhaps we should mark this as a: 

2 exhibit now — if this could be marked the exhibit next 

3 in order, it is entitled, "Overview of Events of November 3 

4 through 21." 

5 MR. GARMENT: Prepared by Mr. McFarlane's counsel. 

6 (The document referred to was marked for 

7 identification as McFarlane Exhibit 7.) 

8 MS. NAUGHTON: Since we have made this an 

9 exhibit, Mr. McFarlane, I don't want to go through it. 

10 Again, if there are any comments you want to make as 

11 we skip over things, please feel free to do so. 

12 BY MS. NAUGHTON: 

13 Q When were you first made aware that the Department 

14 of Justice was now looking into the legality surrounding 

15 the Iranian arms sale? 

15 A I think it was when I was called by the Attorney 

17 General on the 21st of November. And he told me that — 

18 he said he had been asked by the President to put together an 

19 accurate record of events, and he would like to talk to me. 

20 Q If I can back up to that point, prior to 

21 January of 1986, did you discuss any of the Iranian 

22 initiative with the Attorney General or was he present at 

23 any meetings in which either the August shipment or the 

24 November '98 shipment was discus^^?^ 

25 i 



I don't think 

iiKin 



cinrn 



643 



mmm 



35 



1 Q Do you ever recall discussing with him prior to 

2 November of 1986 the legalities surrounding the pre-finding 

3 shipments; that is, the 19 85 shipments? 

4 A No, I don't think he was party to any of the 198 5 

5 meetings, to my knowledge. 

6 Q Was there ever any discussion of perhaps running 

7 this by the Attorney General prior to January of 1986 to 

8 look into the legalities of it? 

9 A Well, the legal considerations were discussed at 

10 considerable length actually in the meetings held by the 

11 President with the Secretary of State and Defense and the 

12 Director of Central Intelligence, where the Secretary of 

13 Defense made a very vigorous statement about -- of 

14 opposition based on legal considerations, and as I recall, 

15 he did mention the Arras Export Control Act, and reporting 

16 requirements under it to the Congress, and while he was not 

17 certain of the concrete elements of law, he believed that 

18 it was an important consideration. 

19 And the Secretary of State echoed his concerns. 

20 The Director of Central Intelligence said that, well, if 

21 the President decides that he wants to undertake this kind 

22 of covert action, let's remember two things. First of all 

23 that it isn't the U.S. Government that is acting here. It 

24 is our support of an Israeli action, and it is Israel that 

25 is undertaking the actions. 



IINCU&SMll.. 



644 



hMSIFB 



ET 



36 



1 He also said as a separate matter, if the 

2 President determines that this is his policy and it is 

3 a covert action, according to the '47 Act, that it was his 

4 opinion, as I recall, that he could -- he nad the authority 

5 in law to do that. That doesn't really answer your question, 

6 but that is the extent of conversations on the legal 

7 aspects of this. 

8 Q There are really two things involved, and I gather 

9 that you saw Mr. Cooper's testimony publicly? 

10 A^ Yes, I saw the record. 

11 Q So hopefully we can short-cut some of this. 

12 There are two statutes we discussed in that testimony. 

13 One is arms export control, which would apply to Israeli 

14 shipments if they were U.S. weapons. The other is the 

15 issue of a covert action under the National Security Act. 

16 A Yes. 

17 Q From what you have described, it sounds like Mr. 

18 Casey was talking about the National Security Act. 

19 A Yes. 

20 Q Therefore, was it discussed then prior to January 

21 of 1986 that that needed a finding? 

22 A Only in the terms that I have mentioned here, that 

23 the Director said if the President determines or finds that 

24 this is what he wants to do, then that can overcome the -- 

25 he thought -- the other restrictions of law. But it was 



iiMOi accini:n 



645 



bap- 



UiftSSRW^ 



37 



1 never translated to a written finding, nor was the 

2 Attorney General brought in to examine whether the DCI was 

3 right or wrong. 

4 Q Did Mr. Casey ever mention whether or not he had 

5 run this by Attorney General Meese? 

6 A If he did, I don't know about it. 

7 Q Was this discussion that you have just related, 

8 was that before the November Hawk shipment or after? 

9 A Before. 

10 Q Let's go then to the 21st of November. When the 

11 Attorney General called you, what did he say to the best 

12 of your recollection? 

13 A He said that the President had directed him to put 

14 together an accurate record of events and he would like to 

15 start right away, and could I come to his office. And I 

16 said I could, and I went directly from my home there, I 

17 think, arriving mid afternoon, 3 o'clock, and met in his 

18 private office with himself and Mr. Cooper, who took notes, 

19 and the Attorney General posed questions for about two 

20 hours, I would guess, on the Iranian initiative. 

21 At the time he didn't raise any questions about 

22 contra support. That had not at that point become an issue. 

23 Q When the Attorney General spoke to you on the 

24 telephone to set up the meeting, did he discuss with you 

25 the discrepancy in the drafting session of Mr. Casey's 



iiMpi miPM 



646 



llttW 



ET 



1 testimony? In other words, did he say that there was 

2 a discrepancy as to who in the flovermnent knew it was 

3 Hawks in the November '85 shipment? 

4 A No , he did not. I was not aware there had been a 

5 meeting about Mr. Casey's testimony. 

6 Q Did you find that at all unusual that the Attorney 

7 General would have been involved in this, in the fact- 

8 finding? 

9 A I suppose not. Ed Meese is beyond being Attorney 

10 General, probably the President's closest counselor, and 

11 I would think it quite natural, actually. 

12 Q By the way, for the record, Mr. Cooper testified 

13 that there occurred in the afternoon of November 20th 

14 a session in Mr. Poindexter's office with Mr. Casey and 

15 Oliver North and Mr. Cooper and the Attorney General, 

16 in which Oliver North inserted the statement no one in the 

17 U.S. Government knew they were Hawks until January of '86. 

18 " You were not at that meeting; is that correct? 

19 A I was not. 

20 Q Were you aware prior to the weekend of November 21sl 

21 that Colonel North was making that assertion in Mr. Casey's 

22 testimony before Congress? 

23 o I was not, but I should say that my only exposure 

24 to these accounts or chronologies that were prepared was 

25 on November 18th, when I went to Colonel North's office 



uMPiACQsnpn 



647 



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



mmm 



39 



at Admiral Poindexter's request, and in the course of 
about three hours there I worked on two things. One was the 
President's opening statement that they were going to use 
at a press conference the next night, and spent most of my 
time on that. And then I got up to leave and Colonel North 
said, "Can you help us on the chronology," and there were 
many pieces of paper on the table, and a couple of versions 
of a chronology of events thereto, and he and I standing 
there began to go through the chronology, and I picked out 
right 'away two or three things that I thought were erroneous 
and occasionally he pointed something out, and he said 
he thought this was wrong, too. 

He asked me because he hadn't been the action 
officer, and I didn't recall, and I offered my own version. 
We came to the page of the master chronology that I think 
the CIA prepared, to the part where the November shipment 
had taken place, and he said concerning this shipment, 
as far as I knew — I, North, in the beginning it was oil 
drilling parts or oil equipment. And I said, "Frankly, 
the shipment entirely doesn't ring any bells with me, but 
what are you talking about?" 

He said, "Well, this is a shipment that Israel 
made through ^^^^^^^| and we called you in Geneva to get 
you to make a call tc^^^^^^^^^^^^^authorities to help get 



it released through 




Airport." North said, 

cinrn 



648 



liSPSBBft' 



40 



1 "I thought in the beginning that it was oil drilling 

2 equipment, but later on found out that it was Hawk 

3 missiles and in fact Iran returned them to Israel because 

4 they were not what they wanted." 

5 In going through this together, the two of us, 

6 I was making a notation in the margin, and finally sat down 

7 to write for Admiral Poindexter an account of what I could 

8 of the most egregious problems that I saw with it -- I 

9 think that is in the record some place -- regarding how to 

10 portray the November shipment. As I say, it, to me, was a 

11 matter that I just didn't recall when I first wrote 

12 Admiral Poindexter on November 7th. I gave what was a 

13 summary version of what I remembered of what the whole 

14 thing was, and I didn't mention anything about it because I 

15 didn't recall it. 

16 On the 18th Colonel North was telling me, "Well, 

17 this is a matter that involved oil drilling equipment." 

18 Well, that wasn't, to me, familiar in terms of a year before, 

19 but the whole event was rather remote in my mind, and I 

20 wasn't willing to write down there that according to him 

21 the shipment had been oil drilling equipment, because I 

22 really didn't buy that. 

23 So I wrote in my version that it was equipment, 

24 equipment — arms I had used interchangeably in other 

25 correspondence before, but I wrote down that in November 

llimi RAAirirrk 



649 



UflSHi^glft^T 



41 



1 a shipment of equipment took place which was ultimately 

2 returned to Israel and didn't give it any other thought. 

3 I left town the next morning 'to go down to our cabin in 

4 Virginia to spend time working on some new policy ideas that 

5 Admiral Poindexter asked me to develop that the President 

6 could perhaps undertake some new ideas and have it in the 

7 agenda out front, but I didn't know about this meeting 

8 that was to be held about Director Casey's testimony. 

9 That is not surprising. I was not in government. 

10 Q, When was it finally, then, that you were called 

11 that you knew in November that it was Hawks? 

12 A Well, I should say that when Ollie told me these 

13 things, he said -- I, North, thought it was originally oil 

14 parts, and I, North, didn't learn until January, I think, 

15 he said that it was Hawks. 

16 As I say, I didn't remember it in any fashion and 

17 when I got to the Attorney General's office, I did go through 

18 the whole thing. I didn't mention the entire eposide because 

19 it had not made an impression on me, but he raised it and 

20 I said, well, as I recall — I recalled for him what 

21 Colonel North had told me was his own recollection, because 

22 I hadn't been in Washington. I went from Geneva to London 

23 to San Francisco, and I said apparently we didn't learn about 

24 it being Hawks until the following year. 

25 For me that, wouldn^t- •h^w^Jaeen until May, because 



iiKini JLOOsrirn 



650 



1 

2 

3 

4 

S 

6 

7 

8 

9 
10 
11 
12 
13 
14 
IS 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 



\lNtt«SSWB8ET 



42 



I wasn't involved with the Government on any particular 
mission until May. That was by logic or kind of deduction 
on ray part, but not based upon recollection, because I 
still didn't recall. 

Q If I can back up for a minute, in November of 
•85, when you informed the President and Secretary Shultz, 
when you informed the President, was anyone with him? 

A Probably Mr. Regan, I think, because he was always 
with the President whenever I was. 

Q Do you recall any response that Mr. Regan might hav< 
made? 

A I don't, no. 



llNHlASSra 



651 



MMIW 



43 



1 MR. GARMENT: Could you go back before that 

2 interjection took place about 1985, where Mr. McFarlane 

3 testified about 1986? 

4 (Whereupon, the reporter read the record.) 

5 THE WITNESS: But I was prompted by the Attorney 

6 General and he said at that time George Shultz believes that 

7 you told him about it in Geneva in November of 1985. I said 

8 if the Secretary of State said that, I am sure he is right, 

9 but I simply don't remember, but I agree that he is probably 

10 right. 

11 BY MS. NAUGHTON: 

12 Q You no doubt have heard Mr. Cooper's testimony 

13 and seen, I believe, his notes of your interview? 

14 A Yes. 

15 Q In your exhibit book, which does not state that. 

16 Is his recollection then incorrect? 

17 MR. MORGAN: Excuse me. I don't think that is 

18 correct. You are saying that Cooper's notes don't 

19 reflect that Mr. McFarlane had a conversation with the 

20 Attorney General about Mr. Shultz? 

21 MS. NAUGHTON: The sum and substance of 

22 Mr. Cooper's testimony is that Mr. McFarlane, his response to 

23 the November 1985 question was that he first learned of it in 

24 the spring of 1986. 

25 THE WITNESS: Then he goes on to say that, I believe 



iium Aooinrn 



652 



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44 



CAS-2 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



the Secretary of State made a note to the effect that you 
talked to him about the Hawk shipment in November of 1985, 
and I said I am sure he is right. 

MR. LEON: Is that the third page of the notes? 
MR. GARMENT: The third page of the notes — the 
fourth page of the notes. 

MS. NAUGHTON: The number on the top right-hand 
corner of the page is 3096. 
BY MS. NAUGHTON: 
Q , Mr. McFarlane, that reads "McFarlane didn't 
know...", if you could read that into the record and tell 
me if that comports with your recollection. 

A Mr. Cooper's notes attributes to me that I didn't 
know that this (Hawk shipment) involved procuring a 
plane; doesn't remember chat with G.S., George Shultz, but 
probably had one. 

Q Now, that comports then with your recollection? 
A Yes, it does. 

MR. GAI^ENT: You might describe the next event 
was an effort to confirm this information. 

MS. NAUGHTON: We will get to that. 
MR. GARMENT: Okay. Fine. 
BY MS. NAUGHTON: 
Q When did you first learn that Secretary of State 
Shultz had notes taken of your conversation in November of 



luiAi Aooinrn 



653 




45 



1 1985? 

2 A I think when the Attorney General told me. 

3 Q And when was that? 

4 A In that session. 

5 Q Now, was this at the end of the session when 

6 Mr. Cooper had left the room or was it when Mr. Cooper was 

7 present? 

8 A I think it must have been when Mr. Cooper was 

9 present, because he has an abbreviated account of it here. 

10 Q If you could point that out. 

11 A At the part in the notes that I have just read into 

12 the record, it deals with this matter of my having talked 

13 to the Secretary of State in response to Mr. Meese's 

14 question. 

15 Q Well, I understand that, but my particular question 
15 concerns the notes that ultimately Mr. Hill wrote for 

17 Secretary of State Shultz. When did you learn that there was 

13 an- actual note reflecting your conversation in November of 

19 1985? 

20 A I understand. I believe that the question from 

21 the Attorney General, which prompted this answer, was, 

22 Bud, we understand that the Secretary of State has 

23 contemporaneous notes that include that you, McFarlane, 

24 told him about the Havrfcs in November of 1985. And I 

25 answered, part "' " _' JlJ Z^ 1 " J I— 111 _ £flr>BOfc.' " notes here, I am 




654 



MffiaSOTfT 



46 



1 sure he is correct. I don't remember it, but I am sure he is 

2 right. 

3 Q Was this the first you had heard then that there 

4 were notes of that conversation? 

5 A Yes, it is. 

6 Q The evening prior to that, on the 20th, Mr. Cooper 

7 testified publicly that many calls were made in trying to 

8 straighten out this discrepancy. He called Paul Thompson, 

9 he talked to Admiral Poindexter, who supposedly got in 

10 touch with Colonel North, who supposedly got in touch with 

11 you. 

12 Were you called by anybody on November 20, 1986 

13 regarding this issue? 

14 A I don't recall that I was called by anybody. 

15 MR. MORGAN: My understanding is that Mr. Cooper 

16 said that he had contacted Mr. Poindexter and Mr. Poindexter 

17 he heard that Mr. Poindexter could not get Mr. McFarlane but 

18 that he contacted Thompson or supposedly contacted North who 

19 may or may not have contacted McFarlane. 

20 MS. NAUGHTON: That is not the sequence, though. 

21 MR. GARMENT: The answer will cover any version. 

22 BY MS. NAUGHTON: 

23 Q You did not hear from anyone on November 20 in the 

24 United States Government regarding this issue? 

25 A I don't believe I did. I say that because I was 



iiMPiAWiPiFn 



655 



IRffiftSSBBkT 



47 



1 

2 

3 

4 

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7 

8 

9 

10 

11 

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13 

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15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



out of the city, but my secretary kept very good records of whc 
called my office trying to reach me and so forth. I don't 
have any personal recollection of receiving any calls from 
Colonel North while I was at the cabin in New Market. I came 
back on the 20th. However at about this time, about four 
o'clock, I drove for two hours and got back to my home at 
6:30, and had to be at a speech in Gaithersburg that an old 
friend had asked me to give at 6:30, so I was hustling 
and got there late. 

I don't believe I got calls from anybody. My wife 
would have told me if Ollie or anyone had called and she 
didn't. I don't believe anybody tried to reach me about this. 

Q During the session with the Attorney General while 
Mr. Cooper was present, did you discuss with the Attorney 
General or Mr. Cooper the status of a finding, whether there 
could be an oral finding or a mental finding -- did that issue 
arise in Mr. Cooper's presence? 

A No. 

Q By the way, is there anything in Mr. Cooper's 
notes, now that you have been able to review them, that does 
not comport with your recollection of what you told him? 

A They are very cryptic. They don't give the full 
flavor of what was discussed in any respect. For example, 
in the portion I have read into the record, it doesn't 
reflect that I certainly acknowledged that I was confident 



iiMm^^Eim,^ 



656 





1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

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13 

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15 

16 

17 

18 

19 

20 

21 

22 

23 

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25 



48 

the Secretary of State was right, and that is clear. Nor 
does it talk about whether I talked about Hawks with the 
Secretary of State, and I did. 

MR. GARMENT: If I may interject, there is an 
example of that on the second page of the exhibit which is 
more than cryptic, it is incomplete and if it were complete, 
it would be of some relevance because it says McFarlane 
acknowledged that Israel would later be able -- blank. If 
only he had finished that, because I am sure it says 
"replenish", an issue which has haunted everybody from the 
very start. 

That is anything but a complete set of notes. 
BY MS. NAUGHTON: 

Q You have just mentioned that you did speak with the 
Secretary of Defense regarding Hawks. Could you elaborate 
on that? 

A Well, I said it is very possible. I spoke to 
the Secretary of Defense at the end of each day's sessions 
in Geneva, and it was ]ust a kind of a habit of keeping him 
informed of what the President had said and done and whatever 
had occurred in national security affairs that day. And so 
I don't have a specific recollection of saying, Cap, 
this is new information on the Israeli/Iran connection or 
anything like that, but as I had earlier in the day with 
Secretary Shultz, I aun sure I would. 



imnf Aooinrn 



657 



CAS-7 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19. 

20 

21 

22 

23 

24 

25 



lEissstfir 



It is a matter of deducing it by logic with the 
Secretary of Defense. I don't personally recall it, but I 
imagine I did. 

Q In November of 1985, were you told by Colonel 
North or anyone else that the CIA was going to be involved in 
this shipment? 

A Never. 

Q When did you first learn of the CIA involvement? 

A I think that it was likely when I reached 
California or when I arrived back in Washington and that it 
was from Admiral Poindexter, and if I had to guess, I would 
say It was on a secured telephone in California, because my 
habit was to call him each morning and talk about what is 
going on today and what is new and so forth, and I have a 
very faint recollection that at some point while out there 
over the Thanksgiving holiday he called and said that the 
CIA, who Ollie had had to get involved in resolving this 
shipment while you were in Geneva -- his concern about having 
had to play a role in this with no authority. 

And he said don't worry about it, I will straighten 
It out or something like that. But I recall when I got 
back that -- frankly, I was delighted to put it out of my 
mind -- but I got back to Washington and I didn't ask it 
but I think he told me, he would come into my office each 
morning and explain what was going on. Bear in mind, I had 



658 



mwrn" 



50 



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

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13 

14 

15 

16 

17 

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19 

20 

21 

22 

23 

24 

25 



told him that I was going to resign when it came back and 
that dominated most of our conversations but I think he made 
another passing reference once I was back in Washington, the 
third or fourth of December, to the effect that CIA is still 
upset about having been brought into this Iranian connection. 

I do not recall ever having seen any finding nor 
being alerted to interest in there being one. 

Q So you did not see the November 1985 finding 
prepared by Judge Sporkin? 

A ^ I don't think so. 

Q Jumping back now again to November of 1986, after 
the interview portion was over and Mr. Cooper had left, you 
had a short discussion with the Attorney General; is that 
correct? 

A Yes. 

Q What was your purpose in going back to speak to the 
Attorney General? 

A Well, perhaps it was just the accumulated impression 
that, sitting in the office of the chief law enforcement 
officer for two hours brings to one, but I had in the speech 
out in Gaithersburg the night before taken a public position 
that whatever mistakes were made were my own, that I had 
given the Attorney General the same account basically that I 
had given in public, and that is is that here are the 
President's motives, why he did it and_ it was a mistake and 



iiMoi m\m\ 



659 



■pHI^Wr' 



51 



CAS-9 1 It was bad judgment. 

2 I wanted him to make sure, however, that since this 

3 was different, this was someone not dealing in a political 

^ matter, it was clear that here was a law enforcement matter, 

5 the Attorney General had to know what the truth of the 

6 matter was. 

7 And so when the Secretary came in and said that my 

8 wife had called and he said, fine, use my office, and 

9 Mr. Cooper went out then, I said to him, wait a minute, 

10 Ed, and he came back inside a couple of steps. 

11 I said to him I think you know that I feel 

12 like I am responsible and I am willing to take all of this oh 
K3 my shoulders that is feasible, but I want you to know that the 

14 President was foursquare behind this from the very beginning. 

15 There was never a moment's hesitation. He 

16 approved this the first time I pitched it to him. It was 

17 all right with him whatever the Israelis wanted to do. 

18 He said I know that, Bud, I know very well how he 

19 feels about the hostages and, in fact, I am glad you told me 

20 that because from his legal points of view he is better off 

21 the sooner that he made the decision to authorize these 

22 sales, because that justifies all of the acts which followed 

23 it. 

24 That didn't make much of an impression on me at 

25 the time, but then he said that this is a determination that 



UWflllMI£lFn 



660 





CAS- 10 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



52 



was made by my predecessor, and I said, well -- Attorney 
General Smith — and I said, well, I don't take any particular 
points from that, but it is important that you know it. And 
he said, fine, thank you. 

And he left and I called home and that was the 
extent of it. 

Q Did you tell the Attorney General either while 
Mr. Cooper was there or later on regarding the diversion of 
some of those funds to the contras? 

A ^ No, I did not. 

Q Is there a reason why you did not? 

A Well, I think looking back that I probably should 
have, but I had been sitting responding to his questions 
there, and he was in charge, and he had, I guess, deliberately 
oriented all of his questions toward Iran because that was 
the subject of the issue, and neither I nor as far as I knew 
anybody else had raised the matter of support for the 
contras at all since May of that year. 

So to have raised it, it would have been to hark 
back to having learned something four or five months before- 
hand. 

In short, he didn't mention it and it didn't occur 
to me to mention it. 

Q Did Colonel North ever tell you prior to November 
23rd of 1986 that the Attorney iJenfifiALii^d ever told him or 



; the Attorney GenfiTf^iiac 

iiNP.! a^Mfl 



661 





CAS-ll 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

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53 

suggested to him that he should obtain counsel? 

A Earlier today we were talking about what I called 
him about or what I said in that conversation — 

Q On November 21st? 

A On November 21st, yes, and it occurs to me that he 
probably commented to me, after I had given him a short 
summary of the fact that I had laid out my recollections 
about the Iranian initiative, he said, well, I have been 
urged to get counsel, and he said one of my friends inside 
the -- I' don't know what he called it. I had the impression 
he was talking about the Bureau -- told me that my phones 
are likely to be surveilled. 

I think he said, and maybe yours. And then that 
was it. 

Q When he said he had been urged to get counsel, did 
he say who had urged him? 

A If he did I don't remember who. 

Q Did he ever mention to you during this time frame 
that the Attorney General had told him there was a problem 
with the Hawk shipment, the 1985 Hawk shipment? 

A I don't think so. 

Q Did Colonel North mention to you on the 21st when 
you called him — did he mention that he already knew of the 
Attorney General's investigation or inquiry that had begun 
or was this news to him,. yau^vtf^^FW^^t ^^^ something new? 



».\TOW 



662 



iRRB^SSilftT 



54 



CAS-12 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



A I don't think he mentioned whether it was news or 
whether he knew about it. I had seen him earlier that day at 
Mr. Ledeen ' s house and had driven him back downtown and 
dropped him off, but I don't think he mentioned any 
awareness of any efforts by the Attorney General's inquiry 
then either. 

Q When did you see him when you dropped him off that 
day on the 21st? 

A It must have been at about noon on the 21st. 

Q Is this when he mentioned to you any intention of 
altering or shredding some documents? 

A Well, in my own testimony I think that I said that 
in driving downtown that four or five things were mentioned, 
his suspicion that Mr. Ledeen had made some monetary gain 
from all these things and then we talked about family, 
and I think I said, and I think it now, that either then 
or in my office on Sunday he said that I am going to have 
to have a shredding party. 

It could very well have been in that car ride going 
downtown. Whenever he mentioned it, my own answer, assuming 
that his point was to say that I am going to make sure that you 
McFarlane, are never vulnerable in this situation, was simply 
to say to him, listen, don't worry about me, tell the truth and 
I will back you up. 

Q Well, at this point -- excuse me — go back. Do you 



\\m mmii 



663 



CAS- 13 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



mmm 



55 



recall what time of day you got the call from the Attorney 
General to come over to his office? 

A Well, I remember that I got the call from Ledeen 
with the request to come to his house, I think, at eleven, 
and that I was there at eleven, and Ledeen was there, and he 
was babysitting the kids, and there was a lot of turmoil 
and the dog got out and a repairman came to do something, 
and he came back finally and put some water on for tea, 
and North wasn't there. 

- He told me that he was coming or he, Ledeen, told 
me North was coming and sat down in the den and said I am givin<i 
you an account of how I recall my, Ledeen, role and he went on 
with this and it may have taken 20 or 30 minutes. At the end 
of it, I said that sounds to me like an accurate record 
according to what I remember. 

And North at that point came up in a taxi outside and 
came on it, seemed a little bit pressed and he said I am sorry 
I am late and I can't stay, words that that effect. 

Michael, I do, however, need to arrange to meet you, 
Ledeen, later on this afternoon, but I have got to go back 
downtown now. 

Bud, can you give me a ride? I wasn't going 
downtown, but I agreed to do it because he looked like he was 
in some distress. I left at that point. 

He stayed with Ledeen and I went across the 



664 



Mmsr 



56 



CAS-14 1 street, got my car, backed it around front, and after 

2 five minutes North got in the car and we drove off down 

3 Western Avenue. 

4 He was kind of pensive for a while, and then made 

5 this comment to the effect that he was afraid that Michael 

6 may have made some money on this whole deal. 

7 I said what do you mean by that, and then he 

8 passed it off, and changed the subject and we talked about 

9 children, a horse show, Tate, his daughter. At some point, 

10 and I am' inclinded to think it was on that ride he said 

11 I am going to have to have a shredding party this weekend. . 

12 I said, Ollie, don't do anything for me, tell the truth 

13 and I will back you up. 

14 I don't think he mentioned the Attorney General. 

15 Q Did you get a call from the Attorney General prior 

16 to this? 

17 A No. 

18 Q So you did not know that there was an inquiry 

19 by the Attorney General when you drove in the car with 

20 Colonel North? 

21 A No. 

22 Q When you said tell the truth — 

23 A I told Admiral Poindexter, John, this is going 

24 to result in a very careful, thorough congressional inquiry 

25 into development of this and everything else and I told him 



665 



fliffiftssraT 



1 the same thing in notes in November periodically and there 

2 was never any doubt in my mind that this had all the makings 

3 of a very significant inquiry. 

4 Q So you obviously in that ride in the car did not 

5 tell Colonel North that you were going to speak to the Attorney 

6 General, because you had not yet received a call from him? 

7 A No, I had not. 

8 Q When you finally called Colonel North after your 

9 interview with the Attorney General, did he seem surprised 

10 that you, had been interviewed by the Attorney General? 

11 A No. I had the impression that he was aware of that. 

12 I don't know how. 

13 Q Again, after your intervew with the Attorney General, 

14 I believe that you contacted the State Department to find out 

15 if Secretary Shultz knew about the November shipment. Could 

16 you tell us what you did? 

•|7 A Yes. Judge Sofaer's comments reflect my call because 

•)8 when I left I called his office and very straightforwardly 

■)9 said. Judge, I have just come from an interview with the 

20 Attorney General and I understand that the Secretary has 

21 a record of events concerning the Iran initiative and I ]ust 

22 wanted to ask is it proper and authorized for me to have 

23 access to those. 

24 He said, well, I don't know, but I will be glad to 

25 pass your request along. 

iiMnikOOlClCD 



666 



n 



MvOiTirp 




58 



ooiriLU 



CAS-16 1 I said, fine, thanks very much, good-bye, and that 

2 is all. 

3 Q Did you try to talk to Secretary of State Shultz 

4 directly? 

5 A I don't know. If you had asked me, I wouldn't 

6 remember calling anybody else either, but I have seen a record 

7 someplace that I must have called Charlie Hill and put in the 

8 same request and noted that I had called Judge Sofaer. 

9 I don't think I heard back from either one. 

10 Q ' Did you ever see the note? 

11 A No, I haven't. 

12 Q Is it in the Tower Report? 

13 MR. LEON: There is a public exhibit, Mr. McFarlane, 

14 when the transcript of Abe Sofaer 's deposition was released 

15 last Thursday, there were certain exhibits that he was 

16 questioned about among which was a memorandum that Sofaer 

17 wrote to the Secretary of State advising him not to contact 

18 you. 

19 MR. GARMENT: Were there notes involved, Shultz 's 

20 notes, or Charlie Hill's notes in Geneva? 

21 MR. MORGAN: I don't think they are an exhibit to 

22 that. 

23 MR. GARMENT: There is such a document that you 

24 people have. 

25 MR. LEON: There is an exhibit in Cooper's testimony 

iiuAiiooirirn. 



667 



MMW' 



59 



CAS-17 1 the Hill note with certain redactions, was produced as an 

2 exhibit to the Hill testimony. 

3 A portion of Hill's notes in which he recounts the 

4 Secretary's recollection of his conversation with Hill. 

5 MR. MORGAN: We haven't seen those. 

6 (Discussion off the record.) 

7 BY MS. NAUGHTON: 

8 Q Did Colonel North tell you either in the car or when 

9 you spoke to him from the pay phone after your interview with 

10 the Attorney General that he had consulted with an attorney? 

11 AX don't think so. I think the first time he mentionec: 

12 to me having engaged counsel was Sunday morning when he 

13 called me at home asking that I meet with him and his counsel 

14 that day. 

15 Q Did Colonel North ever say during that weekened, 

16 including Friday through Sunday, that he had been designated 

17 the fall guy or a scapegoat, anything to that effect? 

18 A I don't think he did. I think probably when he came 

19 to my office on that Sunday morning he may have made a 

20 passing reference to the fact that he was willing to take the 

21 fall or be the responsible person about it, and I don't think 

22 he ever implied that somebody else was intentionally making 

23 ^^^ ^ fall guy for it. 

24 Q When he mentioned that there would be — that he 

25 would have to have a shredding party, did he mention the kind 



668 



CAS-18 



iiRsa^p®' 



60 



1 of time frame he was dealing with? In other words, did he 

2 mention I have X number of hours to do it or X number of 

3 days to do it, anything like that? 

4 A Well, I think he said I am going to have to have a 

5 shredding party this weakened. That is as much as I remember 

6 about it. 

7 Q Now, on Saturday, the 22nd of November, did you 

8 speak to anyone in the United States Government pertaining to 

9 the topics we are discussing? 

10 A , I don't think so. 

11 Q So you didn't speak to Colonel North on Saturday 

12 the 22nd? 

13 A I don't think I did. 

14 Q On Sunday morning then, you heard from Colonel 

15 North? 

16 A Yes . 

17 Q Approximately what time was that? 

18 A Well, I would guess about 9:15 because we were 

19 getting ready to leave for church, and I was kind of pressed, 

20 so I didn't stay on the phone long. 

21 Q Did you agree to meet with Colonel North after 

22 church? 

23 A Yes. He asked when he get together and I said we 

24 are going out the door but I suppose we could meet at noon in 

25 my office. He had said, well, I don't know where, maybe in a 

IIMPI AQQIPirn 



669 



TIfl8UOT& 



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CAS-19 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



hotel room someplace. 

I said, come to my office at noon. He mentioned 
that he was going to have his lawyer with him. I said, 
fine, I will see you at noon. 

So we went to church, came home and I went on downtown 
and got there about noon and put some coffee on, nobody else 
was there. 

I called the security guard and told him to expect 
North. I wasn't sure who his lawyer was, so I didn't give 
him any name for him. And went on upstairs, put the coffee on 
and was waiting for him. 12:30, half an hour later, he came 
in and seemed a little harried as before. 

Came into my inner office, and remained standing, 
I think. 

I remember standing there with him for five or 
ten minutes. I said, hi, how are you, and pleasantries, 
and then he said, well, it is not great, we are -- we have 
gotten into an enormous problem here, and he said so far I 
think everything is on track, but he said there is one 
thing that is going to be a problem, and that is the shifting 
the use, the channelling of some profits from the Iran money to 
the contras. 

And I said, well, that was approved, wasn't it? 

He said, yes, you know I wouldn't do anything that 
wasn't approved. I said, we will just lay it out and it will 



670 



umeis^fifiT 



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CAS-20 1 

2 

3 

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9 

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21 

22 

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24 

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be all right. 

And the only other thing he said was, I believe, 
well, it is a matter of record. I put it in a memo to the 
Admiral -- I thought he said in February or March -- but I 
said, well, let it out. It isn't you, it is whoever approved 
it. 

Q Did he say who had approved it? 

A No, he didn't. 

Q Did he say how he knew that that would be a problem, 
in other words, had anybody alerted him to that problem or 
did he just — 

A I think it was his own conclusion that he had drawn 
on his own that surely using this money to use for another 
program wasn't right. But I had -- I was surprised a little 
at the time that — well, more disappointed than surprised, 
but it was clear that my own assumption that this had been a 
coherent program really wasn't so. 

But it was clear at that point because he said 
that he thought it was going to be a problem. Well, at 
about that time his lawyer came in and he introduced him 
and we all sat down in my inner office, and Mr. -- 

MR. MORGAN: May I interrupt for a second? 
I think you previously testified that you did have 
one other conversation at the White House a few days before 
that when you did mention diversion was a problem, I don't 



]IN(lLA!^SIF!Fn 



671 



CAS-21 1 
2 
3 
4 
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6 
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know what you used as the term for diversion, had discussed it 
on one occasion at least as being a problem. 

THE WITNESS: Where I raised it, this is either the 
night of the 18th or when I went by to pick up a copy of the 
opening statement on the 19th, I went to Admiral Poindexter's 
office and broke in on a meeting that was breaking up on the 
morning of the 19th, and the meeting had included Mr. Keil, 
Admiral Poindexter's Deputy, Mr. Howard Teicher and 
Colonel North, and I went in, everyone stood and started to 
leave, and Colonel North made a comment to the effect that in 
that session they were concluding that I think we have 
everything tied up and I don't see any problems. 

And gratuitously I said, well, I think you have a 
problem on the channelling of money to contras. And 
Colonel North kind of winced. He and Mr. Teicher 
continued on out of the office, and Colonel North came back 
in and said Howard doesn't know anything about that. And 
I. said to John and to Keil and to him that, well, don't 
kid yourself, that is a problem. 
BY MS. NAUGHTON: 

Q But he didn't mention at the time he had memorialized 
it in writing? 

A No. 

Q Did you assume then that Mr. Keil knew about it? 

A Well, if he hadn't, he did then. I don't know. 



11MC14SS1FIEIL 



672 



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■:»•) ii: 



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CAS-22 1 Q When Colonel North was in your office around 12:30 

2 on Sunday, did he mention whether or not the Department of 

3 Justice team was at the NSC the day before reviewing NSC 

4 documents? 

5 A I don't recall that he did, no. 

6 Q Did he mention whether or not he had spoken to 

7 Director Casey on Saturday or Sunday morning? 

8 A No, I don't think so. 

9 Q Did he discuss whether or not he had spoken to 

10 Attorney, General Meese on Saturday or early Sunday? 

11 A No. 

12 MR. GARMENT: Wasn't he going to see Meese that 

13 afternoon? 

14 THE WITNESS: Well, he was, but I am not sure he told 

15 me that. The only other thing that I haven't already 

16 recounted here in that meeting was that when his attorney 

17 came in we all sat down. His attorney, Mr. Green, I think 

18 by way of introduction, just kind of said autobiographical 

19 things, that he had been Assistant U.S. Attorney and he had 

20 been associated with I guess he said problems of this kind, 

21 but that he went on to say that he had always found it best 

22 in proceedings like this that you just simply told your 

23 story truthfully and let the chips fall where they may or 

24 something like that, which didn't make any particular 

25 impression, and about that time General Secord or somebody 



llKini Aooinrn 



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65 

1 knocked at the door, it turned out to be General Secord, 

2 I had not expected him, but by that time it was a quarter of on 

3 or so, and I had made an appointment with a journalist for 

4 one o'clock at the Jefferson, and I said that I had to leave 

5 and I excused myself and left the three of them in my office 

6 at about 12:45 on the 23rd. 

7 When I reached the Jefferson I called back and reached 

8 somebody, probably Mr. Green in my office, and asked him to 

9 turn the coffee off if they left. It burns up. 

10 , BY MS. NAUGHTON: 

11 Q Who did you understand Mr. Green to represent, 

12 just Colonel North or did you understand him to represent 

13 General Secord or anyone else, was that made clear to you? 

14 A At the time I would say he was just Colonel North's 

15 counsel. I really didn't stay long enough, however, to 

16 learn what his relationship was, if any, to Mr. Secord. 

17 Q Did Mr. Green tell you what he was doing there, what 
13 the purpose of he and Colonel North and General Secord was 

19 to meet? 

20 A He didn't say anything about going, for example, to 

21 the Attorney General that day or any other time. He said 

22 that he was going to represent Ollie in proceedings or 

23 whatever lies ahead. I didn't leave there knowing that he 

24 was going anywhere, I don't think. 

25 Q Did you know that Colonel North was going to speak 



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1 to the Attorney General that afternoon? 

2 A I don't think I did. 

3 Q Did Mr. Green make any references to Albert Hakim 

4 on Sunday? 

5 A No , he didn't. 

6 Q And Mr. Hakim was not part of that meeting, to your 

7 knowledge, was he? 

8 A He was never present when I was there. 

9 Q Did Colonel North call you any time after his inter- 

10 view with the Attorney General? 

11 A I don't believe he did, no. The next time I talked 

12 to Colonel North, I believe, was very late Tuesday night when 

13 I was in London, but this was after everything had all changed 

14 quite a lot. 

15 Q Did he say whose idea it was or whose decision it 

16 was to dismiss him from the National Security Council? 

17 A Well, I learned that on Tuesday after it occurred. 

18 Should I go beforehand through the Monday interview with the 

19 A.G. — 

20 Q Yes, why don't you? 

21 A The next day on Monday, after this Sunday session 

22 with North, I was at home preparing a speech on the computer 

23 that I had to give the next day in London and I received a 

24 call from my office, I think, that the Attorney General was 

25 trying to reach me so I called him and he said that in the course 

iiMoi Kcoincn 



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of his interviews that he had turned up some other 
details he would like to talk about and could I come down 
right away and I did. I got there and he said that he had 
learned that there had been a channelling of money from the 
Iran funds that were paid to the contras and did I know about 
that. 

I said, yes, I did, that 1 had been told by 
North in connection with a trip that I had made in May to 
Iran, that they had applied or we had applied or the U.S. 
Government had applied some of the monies to Central America, 
and I recited for him this recollection. 

I asked him, it was approved, wasn't it, when I 
first heard it, and he said, yes, I wouldn't do anything that 
wasn't approved. 

He asked, did I tell anyone? I said, no, I took it 
to be a matter that was part of the Iran enterprise and 
didn't mention it to anybody. 

It was a short meeting. I think that was about the 
size of it. 

At the end I said, Ed, I told John three weeks ago 
that I think it is in everybody's interest that you ought to 
get two things done, first, get all the truth out, as I take 
it you are doing right now, but second, you have to have the 
President able to lead again in international affairs, and I 
recommend that you develop several initiatives in foreign 



676 





68 

1 policy and perhaps in domestic policy that he can promote 

2 as a new agenda and if you like I will be glad to work on some 

3 of those, in fact, I already have been. 

4 He said, fine, would you drop it off at my house. I said 

5 I would be glad to. 

6 So I went home and began working on these things that 

7 I had been working on at the cabin. I had to catch a plane 

8 at Dulles so didn't quite finish, but wrote them out and 

9 put them through the door of Mr. Meese's house and then went to 

10 the airpert and arrived in London the next morning and went 

11 directly to my hotel, which I think was the Grosvenor, and 

12 then put this business out of my mind for several hours and 

13 walked around Hyde Park and bought something for the kids, 

14 I think, and came back at about twilight or six o'clock or 

15 so, turned on the BBC and heard that there had been that day, 

16 Tuesday, in Washington an announcement at a press conference 

17 by the Attorney General, and that as a consequence 

18 Admiral Poindexter had been reassigned and Colonel North had 

19 resigned. 

20 So I called back to Washington to -- I want to 

21 say North, but it may have been Wilma, my former secretary -- 

22 just to get what the lowdown was, and I don't think I got 

23 it. But my hosts there in London came to my suite at that 

24 point and after sitting down and having a cocktail we went 

25 off to this evening function that I was speaking at and it 

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was quite a long thing and I got back to the room at about 
11:30 that night, turned on the BBC, heard basically the 
same report again, and so I could tell, because I think in 
this report it said that there had been this diversion and that 
Mr. Meese had said in the course of the press conference that 
Mr. McFarlane was aware of it and no one else -- so it was 
apparent and, in fact, I had had reporters kind of beseige 
the car when it arrived at the speaking site, so I knew I was 
going to have to comment and say something about it so I sat 
down and' I wrote a one paragraph statement of how I had become 
aware of the diversion, and it was my own recollection, but. 
I thought that if it wasn't true, I shouldn't say it. 

So I called back to North at that point and I reached 
him in his office and I said, Ollie, I have heard what has 
happened here, tell me about it. He had been fired and I 
said what is the story, and he said, I don't know. 

I went to work this morning and I was prepared to 
resign and so forth and we had a big session with the 
Attorney General and Don Regan and I left it thinking I was 
going to be allowed to resign and then I learned on the 
television that I am fired. 

I don't know whether that is true or not, but that 
is what he said. I said I was sorry, that he had always 
acted as a subordinate taking orders and I was confident 
that he would be okay. He said that he had heard the news 

iiKiN Aocicicn — 



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and was getting a lot of questions in London and I had 
written out a statement and was going to read it, if it is not 
accurate, say so. 

I read it to him and he said that is accurate. The 
last part of the statement said at the time I took it to be a 
matter of approved policy. I said is that right, Ollie, wasn't 
it approved? He said, yes, it was, I wouldn't do anything 
that wasn ' t. 

I said, well, I am sorry, take care, I will be 
back tomorrow, good-bye. 

Then I called AP and UPI in Washington to get the 
statement on the record and that was all. 

Q So Colonel North said that he actually heard about 
his firing on television; is that correct? 

A That was his account, on the telephone call, yes. 

Q If I can go back on Monday in your conversation 
with the Attorney General, did he ask you if there was 
anything memorialized in writing, anything else other than 
the memo that they had found? 

A I think he probably- did. And I said, well, I didn't 
know of any of the paper in question. I think he told me, 
he said we found a memorandum that Ollie sent to 
Admiral Poindexter, and he said what do you know about this, 
and I said, well, I know about it, what I learned on the trip 



in May. And tha 



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Q Did he ask you if there was a cover memo? Did 
you discuss a cover memo at all with him? 

A He may have asked me that. I said I don't know 
anything about it. What I know is what I have told you about 
MR. GARMENT: You hadn't seen it before? 
THE WITNESS: No, Ollie told me about it on the 
tarmac . 

MR. GARMENT: Told you about the transaction? 
THE WITNESS: Yes. 
' BY MS. NAUGHTON: 
Q When you met with the Attorney General on Monday 
morning, was anyone with him? 

A If you had asked me, I would have said 
Mr. Cooper and that is why I am surprised there weren't any 
notes. I thought he was there. 

Q Do you recall anything that he might have done or 
said or was wearing or anything, waiting for him to show 
up in the room or him being there when you got there? 

MR. MORGAN: I don't know if it will help refresh 
his recollection, but didn't Mr. Cooper testify that he was 
not there? 

MR. GARMENT: And nobody else was there, there 
are no notes -- was your recollection? 

THE WITNESS: Well, I do have a pretty solid 
recollection of his being there obviously on Friday. I don't 

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have the same vivid recall of his having a chair here and 
Meese there and me here on Monday, so it isn't hard and fast. 
But if you had asked me a week ago was he there, I would have 
said, yes, he was there, I thought he was. 

MR. GARMENT: The records show that he was at the 
State Department at that time? 

MR. LEON: The records indicate that he testified 
that he was at the State Department at that time meeting with 
Hill and Sofaer and his chronology simply indicates the same 
thing. ' 

BY MS. NAUGHTON: i 

Q Was anyone else there that you may have mistaken 
for Cooper in your recollection? 

A I think I would remember being introduced to 
somebody different and I wasn't. 

Q Do you know whether or not the Attorney General 
took any notes of your conversation? 

A Well, I think he had a legal pad, but I don't -- 
it was a very short meeting and he never paused to write some- 
thing down. He may have written something down afterward. 

Q You didn't take any notes in this meeting? 

A No, I didn't. 

Q Is that the last time you spoke with the Attorney 
General regarding this topic? 

A Yes, it is. 



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Q When you left his office that morning, Monday 
morning, what was your sense of what was going to happen, if 
anything? 

A I better amend my last answer. It wasn't the last 
time that day, because after I left his office, went home, 
worked more on those four ideas, went to his house, dropped 
them off, I wasn't sure that I got it in the right house 
because it is a very kind of a muse, the way you get to 
Mr. Meese's house, and it didn't have a number on it. 

' So I got out to the airport and had to wait about a 
half-hour and I called and I think I got him and I said I 
have dropped it off at your house, this letter. 

He said, I got it, and that was all. That is the 
last communication we had and he didn't discuss the issues. 

Q Did he ever — I will repeat my last question, 
which was when you left the meeting with him on Monday 
morning, did you get a sense of what was going to happen, if 
anything? 

A I didn't. He didn't say what was going to happen. 
He may have said that he was going to report to the President 
and he would stay in touch, but — 

Q In other words, he didn't tell you he was planning a 
press conference? 

A No. 

Q Did he -- was there any discussion of whether or not 



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this information should be closely held? 

A No. 

Q Was it sort of understood that you would hold it 
close or did you have any sense of that? 

A Well, I suppose I always operated under a 
presumption that national security matters are closed guarded 
and I considered this in that context. 

Q You said that you saw Mr. Cooper's public testimony 
on television. Is there anything that he said in his testimony 
that struck you as inaccurate or contrary to your recollection? 

A Well, I believe what I said is that I saw the 
transcript, and I did, and I was quite upset not by any kind of 
concrete error or contradiction, but by the accumulative 
inference, really, that in November of 1986 that I had been 
portrayed as kind of a working member of the team that was 
organizing a cover-up for a conspiracy, and I knew in point of 
fact that my total physical presence in this city had only 
been a matter of hours in the whole week. 

I was in Mexico and Chicago and Las Vegas and at 
my cabin in Virginia for two days. So I was concerned about 
it, but actually at about the time or within a day I had a 
call from counsel, who had separately seen another-- well, 
a journalist picking up on that account that implied that I 
had been in the meeting with Mr. Casey and Mr. Wallison and 
others on the 20th of November. 

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I wasn't there, but it was being repeated based upon 
impressions gained by journalists from that testimony so I 
was concerned and asked Len to request that we have a 
chance to correct the record because I wasn't even in the city, 
much less party to any of those meetings. 

Q I think we have corrected that at least for our 
purposes today. 

Was there anything else in Mr. Cooper's testimony 
going over it that you didn't agree with or thought was 
inaccurate? 

A One part I could credit as a fair statement, but 
I was dismayed about it. There was a statement in his 
testimony that I had appeared to be ill at ease -- 

MR. GARMENT: Less than forthright. You were not 
forthcoming. 

BY MS. NAUGHTON: 

-Q He said both. He said he seemed ill at ease at 
one point ahd at another less than forthcoming. 

A The part about being ill at ease, I think I could 
credit that as being a reasonable impression because I 
thought in coming from my exposure to the White House's view 
of this matter on November 18th, that I was being fed a 
little bit of information that I had no personal recall of, 
for example, the original view, according to Colonel North, 
that he had thought this was oil drilling equipmer^^rfhen he 



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began to help the Defense Minister on the ISth back in 1985. 
Well, I didn't know that, and yet here I was telling the 
Attorney General that here by hearsay is an account of it, 
that we collectively, but including myself, we believe that thii; 
was a matter of oil drilling parts from the beginning, and I 
was taking somebody's word for it. 

I never had reason not to, but still it wasn't my 
first-hand recall that that was the fact. I couldn't blame 
that on Mr. Cooper, that was probably a reasonable 
impression, but I tell you, I think that that testimony was 
of a loyal aid, but it wasn't fair. 

You can make your own judgments about it, but to 
imply in rather loosely drawn language that what now 
seems to me to have been a cabal of people that had very 
purposeful intentions to cover this thing up, and that I was 
party to that, it is not a reasonable picture to draw of 
Mr. Cooper or anybody else. 

MR. GARMENT: By Mr. Cooper? 

THE WITNESS: Yes. 

MR. MORGAN: I don't know if you have read all of 
his testimony, but you r»ad selected portions of it? 

THE WITNESS: Right. 

BY MS. NAUGHTON: 
Q Thank you for clarifying that. 

There was a story that appeared in the Los Angeles 



685 






1 Times the following weekend around November 28 or 29 that there 

2 had been some shredding at the NSC. 

3 Are you aware of the source of that story, who that 

4 would have been? 

5 A I am not. I might be able to speculate. Who was 

6 the author of the story? 

7 Q Jack Nelson. 

8 A I can't stand him, so I wouldn't know about it. 

9 I guess I don't. The bureau chief, his beat is not 

10 specific to the CIA or Defense or the White House. He 

11 covers all of them. 

12 Q Do you know what |>ls relationship was with Mr. Regan? 

13 A It was good, I believe. 

14 Q To your knowledge, did the Attorney General have 

15 any knowledge of Colonel North's involvement in the 

16 contra resupply operation? 

17 A I don't know that first-hand. I imagine he did. 

18 That is pure guesswork. 

19 Q What would lead you to speculate on that? 

20 A Well, I have learned in the last six months that 

21 Colonel North worked more closely with the Attorney General 

22 than I believed when I was in Government. I did know that 

23 one of the occasions for that was the use of Drug Enforcement 

24 Agency agents in trying to establish a channel to the captors 

25 of the American hostages in Lebanon, and I had referred 



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■"AS-BS 1 Colonel North to the Attorney General, and so was aware that 

2 he went to him to get his authority and his guidance. I was 

3 not aware that that then led to fairly frequent meetings 

4 between the two of them, and if that is the case, and I am 

5 told that the evidence is that it is, then I imagine that 

6 Ollie shared with the Attorney General some of the efforts he 

7 was making to support the contras. 

8 Now, that is a very speculative thing to say, but -- 

9 Q When you say it is your understanding that the -- 

10 they were in contact more frequently than you had supposed, 

11 where is the source of this information? 

12 A Just public accounts I have seen and I may be in 

13 error, but I have seen reports that he had a number of meetings 

14 with him. 

15 Q Do you know whether or not the Attorney General had 

16 ever directed potential contributors to the private resupply 

17 effort to Colonel North? 

18 A I have never heard of any such reference. 

■|9 Q To back up on the DEA point, do you know whether or 

20 r^ot as a matter of fact that Colonel North had briefed the 

21 Attorney General on the DEA operation? 

22 A I am sure that he did, because on one occasion -- 

23 MR. LEON: Is that the DEA operation in Iran, 

24 Mr. McFarlane? ^ . 

25 THE WITNESS: Was there one of those 



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MR. LEON: To get hostages out? 
MR. GARMENT: That was in Lebanon. 
THE WITNESS: I know that that was briefed to 
Colonel North because of a subsequent encounter between myself 
and Mr. Meese he said, yes, Ollie has brought me up-to-speed 
on that and I am keeping an eye on it. 
BY MS. NAUGHTON: 

Q Were there any specifics discussed with the 
Attorney General and yourself? 

A , No. If it didn't involve Russians, I didn't want to 
know about it. . 

Q Did Colonel North write you any memoranda or 
PROF note on his briefing with the Attorney General on the 
DEA operation confirming that he had done so and what the 
Attorney General's response was? 

A I bet you there is a memo on it. That is the kind 
of thing that Colonel North would have memorialized in a 
memorandum. I am saying that based on logic and habit, but I 
imagine that that is in the file rather than a PROF note. 
It could have been the latter. Periodically he did send me 
PROF notes on the status of the operation and what was going 
on. 

Q So you were aware of private monies being used to hel 
this operation along? 

A No. In fact, the note that I am recalling was one -- 



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CAS-38 1 it wasn't even a note -- it was a memorandum that I have 

2 seen in these proceedings, I think with the Tower Board, that 

3 made a passing reference at a memorandum giving the status of 

4 his efforts to DEA to the fact that part of the payments 

be to^^^^^^^^^^^^^^^^^^^H ^'^<^ so 

6 would take inter alia $60,000, which would come from funds 

7 normally available to the contras, and that didn't make an 

8 impression on me at the time. 

9 Q This was a memo that I believe was in your 

10 exhibif book when you testified publicly? 

11 A Yes. 

12 Q Were you -- I guess I will ask the question in a 

13 different way. 

14 Were you ever aware that private monies were being 

15 solicited by Colonel North for this effort in which the DEA 
15 agents were involved? 

17 A Well, I did know at one point of the intention by 

18 Colonel North with the Attorney General's approval to have 

19 monies for bribing^^^^^Hpaid by Mr. Perot, yes, I did. 

20 Q And how do you know that the Attorney General 

21 approved that? 

22 A Colonel North said that he had. And explained to 

23 me the Attorney General's reasoning and it is hearsay from 

24 Colonel North, but he said that because we could not use 

25 U.S. Government funds for bribing ^^^^^^^^^^^^^^^^^H I 



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guess the criminal^ct or something -- that it was different 
if a private citizen provided the money and the Attorney 
General had approved it, and that was good enough for me. 

Q Do you recall -- this may be unfair, do you recall 
approximately when this would have been? 

It may help you if I add that we believe from 
documents that there were operational activities and Perot 
money exchanged somewhere around May or June of 1985. 
Would that be approximately the correct time frame? 

A That sounds right, yes. 

Q Do you know whether or not indeed money was given by 
Mr. Perot for this operation? 

A I don't know for sure that it was. For what it is 
worth, a year later I was out of the government and on this 
mission to Tehran, and I think I have testified that when I 
got back J!»f Iran into Israel and was on the airstrip and 
reporting back by radio to Washington here, that Colonel 
North had told me this cryptic comment about the diversion, 
but then I learned either from him or from Mr. Teicher that 
he had gone off somewhere at Ben Gurion Airport to try to make 
contact with his man^^^^^^Hto determine whether or not the 
other channel to the captors had materialized or developed, 
that if the Iran operation had not worked that he had another 
possibility that involved a contact^^^^^^^^H and that he 
was going off to research that. 



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End of encounter. I came home, debriefed the 
President a day or so, went back to private Life. I got a 
call from Ollie within a week -- you sparked me to remember 
this, I haven't remembered it before -- he said, remember 
wher^ we were out there and I was trying to check up on this 

s'ell, it fell through and it is a long story 
that isn't worth repeating, he said, but he said I got in 
trouble with Ross because I had his money, and I think he said 
a million dollars out of the bank for a week, and he lost a 
lot of interest. 

And he said, do you mind calling Ross and explaining 
to him that I wasn't trying to embezzle his money, that he has 
it all back, and that I am sorry tr.at I didn't stay in better 
touch with him. 

He implied that Perot had said to him in a call that, 
you know, you have lost me X thousands of dollars on this money 
but the point was really that Ollie hadn'^f-kept in touch with 
him, and so this was a little much. 

I mean, I was not in the operation, I didn't know 
about it, I didn't know anything regarding this money 
transaction. 

I was trying to be a private citizen, and I said, 
well, if I see Ross, I will mention it to him. I don't know 
why he didn't ask Admiral Poindexter. 

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'Via'' «# a t \i\ 

did see Ross, and I went up to him and said, look, don't be 
too hard on Ollie. He said I have calmed down about that, 
don't worry about it. 

Q Did Colonel North ever brief you on his encounters 
with the phony Saudi prince Masudy? 

A I never heard about that at all, no. 



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Q Do you know whether or not Colonel North or 
anyone at the National Security Council had ever contacted 
anybody at Departmeilt of Justice or FBI regarding any ongoing 
criminal investigations into the private contra supply 
operation? 

A I never heard of any inquiry in that context at 
all. 

Q Thank you very much for your patience. I think 
that is all I have. 

(Discussion off the record) 
BY MS. NAUGHTON: 

Q We are back on the record. 

We would just like to call attention to a minor 
correction in Exhibit No. 7. On page 9, Mr. McFarlane 
stated that he arrived at his home about 6 p.m. that 
evening and the exhibit read 5 p.m. So we have made that 
correction in the deposition exhibit. 
BY MR. LEON: 

Q Mr. McFarlane, I am going to try to be very 
brief and very quick about this. I will be the first to 
tell you that I would be a lot better prepared had I known 
what was going to be covered by the Senate and covered by 
the House. I don't think, and I hope that upon reviewing 
these documents after the fact, I won't have any new 
questions that I have to trouble you with down the road. 



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Let me start with the first document that was 
introduced as an exhibit. I believe you testified you don't 
have any recollection of this being drafted of this meeting, 
is that accurate? That is Exhibit 1, I believe it is. It 
is a memorandum dated March 8, 1985, prepared by North for 
McFarlane to Max Friedersdorf , which beings on page N. 40600. 

A Yes, I believe I testified that I have no 
recollection of having seen the memorandum, although I have 
confirmed that the meeting it summarizes did in fact occur. 

Q And it was prepared by Colonel North, right, so 
it appears. The cover sheet makes reference to an attachment 
of a self-explanatory memo from you to Max Friederdorf? 

A Well, normally it would have Colonel North's 
initial on it, and I take your word for it though that it is. 

Q I don^t know, frankly. I guess neither of us know^ 
who prepared the darn thing. Let me clarify a few things abou 
i.t. There is a Representative Robert McCollum, R. , Florida 
referred, -o on there. Do you have reason to think that that 
is an error, that it is referring to Wiliam McCollum? 

A It probably refers to William McCollum. 

Q Was there a Robert McCollum also from Florida? 

A Not to my knowledge. 

Q Do you have any recollection of William McCollum 
being at this meeting? 

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Q I don't recall the meeting at all. As i say, I 
am sure it occurred, yet I don't recall any of these partici- 
pants saying anything in particular. 

A I think you commented that it was shocking to 
read that reference with regard to Mr. Hyde because you 
thought it would be shocking for him to suggest something 
illegal. I think that was your testimony? 

A Yes. 

Q Let me just comment on one point in the regard. 
As I read this memorandum, the operative sentence regarding 
Mr. Hydes reads 35 follows: 

"Henry Hyde felt that we should expand private 
sector and third country assistance, such a 

|in the effort to support the resistance. " 

I don't see any other reference to what Henry 
Hyde said or felt, or anything along those lines. Is that 
right? 

A Yes. 

Q In this memorandum? 

A In my earlier comment, I said that it stood out to 
me because of two things: 

First, that it suggested a prior awareness on 
Congressman Hyde's part when it says expand -- you have got 
to expand from something that he knew, and if he knew, I would 
be surprised, but something he did, which I doubt, that he 



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would suggest furtherance of an illegal act is outrageous and 
I don't believe it. 

Q I agree with that, but I ]ust want to cause you 
to pause if I could, on the word "illegal." Even assuming 
that this sentence is an accurate statement, am I not correct 
to state that it doesn't necessarily call for anything illegal 
in that it doesn't talk about military support as opposed to 
humanitarian support, and on top of that, prior to the date of 
this memorandum of February 23, 1985, is it not a fact that at 
least one of those two countries had in fact made a contribu- 
tion to the U.S. -- I mean, to the contra effort after 
discussions with you? 

A I think your statement is accurate. I suppose I 
was putting a different inteipretation or stress on this 
same thing Henry Hyde felt that we should expand private 
sector — we being if not Hyde and North and McFarlane, the 
U.S. Government should expand^^^^^^^^^^^^support , and 
while I suppose Boland II did not foreclose third country 
assistance, if it did not support military or paramilitary 
activities, my own interpretation on what role we, my staff, 
the U.S. Government, could take was that we could not solicit 
anything for anything. 

Q Well, I guess I was just troubled by your use of 
the word illegality, and I must say that since Boland applied 
to the use of appropriated funds, and since this sentence 
doesn't even sug^^i-tJ^ e||E||T|k|fuJ|"J^ appropriated funds. 



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I am just wondering whether you really intend to use the word 
illegality that might be suggested here? 

A Well, I am not qualified to make a judgment on 
the lawfulness of any actions which may have flowed from that. 

Q But the bottom line is you have no recollection of 
that ever taking place? 

A No, nor of ever seeing the memo. 

Q Shultz's reaction to your informing him, according 
to Cooper's testimony the other day, was that he told the 
Attorney General that he was upset that you were informing 
him of an upcoming shipment of Hawk missiles from Israel to 
Iran. Do you recall him registering being upset to you? 

A No. 

Q Do you recall him stating or threatening anything 
that he was going to go to the President about the matter at 
that time? 

A No. 

Q I was just wondering if that happened? 

A No. 

Q Do you have any knowledge as to whether he, after 
that fact, ever complained to the President about the shipment 
of Hawks in the discussions you had with him? 

A I doubt it. I do not know for certain -- 

Q You have never been informed that he did? 

A I seriously doubt it. I have not. And he always 



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told me if he had a problem. He didn't. 

Q With regard to the proposed finding, I think you 
will recall in your testimony that there was an exhibit of 
a proposed finding of November 26th that Director Casey sent 
over to you with a cover memo, and I believe your testimony 
was it went to Admiral Poindexter. You were out of town and 
Admiral Poindexter received it. Do you recall that generally: 

A I did. I guess I would make one minor point, and 
that is that it was not addressed to me. It was addressed 
to Admi-ral Poindexter and I don't believe that I ever saw it. 

Q Okay. Did Admiral Poindexter ever indicate ta 
you that he had had it signed by the President? 

A No. And as a kind of a logistics issue, the 
President was physically in California, and so the Admiral 
could not have gotten it signed except by having me do it, 
and I know that didn't happen until the President got back 
on 3 December. 

Q Did he ever indicate to you at a later time that 
as to that particular proposed finding he had gotten it 
signed? 

A I don't think so. 

Q I believe you testified with regard to the -- 
your reason why you didn't tell the Attorney General on 
Friday evening about the diversion, so I am not going to go 
back into that. 



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The focus is on Monday morning the 24th. When -/ou 
met with the Attorney General, and he informed you that he 
had found out about a diversion memo from Colonel North the 
preceding evening, you testified that you confirmed that you 
were aware of that? 
A Yes. 

Q What, if any, action did the Attorney General have 
if you recall, to your confirming that you had known about 
it? 

A Well, he said tell me about it, how you learned of 
it, and what you did, and so forth, and he just let me talk 
and summarize this exchange. 

I think when he asked me that it wasn't as 
concrete as to be able to tell him it happened on the tarmac 
late in the day the next time, but I told him that some time 
on the trip I had learned about this. I couldn't pin it 
down. 

He said, what happened when you got back? 

And I told him about the debriefing. 

He said, did you tell anybody else? I think he 
said didn't this bother you? 

I said, it seemed to me at the time that it was 
part of actions that were approved collectively, but I did 
urge Admiral Pgindexter to have Colonel North reassigned, 
based on my own judgment that he was operating at a point of 



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91 



exhaustion and in very high risk areas. 

Q When the Attorney General said to you, didn't it 
bother you when you learned about the diversion, was he calm 
when he said that or did he register any emotion in terms of 
being upset? 

A Well, he never seemed upset to me, but that is his 
normal condition. He is a composed person. 

Q Would you describe him as being unflappable? 

A Taciturn, yes. 

MR. GARMENT: A "taciturney general!" 
BY MR. LEON: 

Q From your experience in dealing with him over 
many years, would you say that it is uncommon for him to 
register if he is upset, to register it in bursts of emotion? 

A Yes. I have never seen him that he wasn't fully 
composed and fully calm. 

Q So even when he gets bad news or news that could 
be bad news about — politically bad news, or sensitive news - 
it doesn't cause him to fly off the handle or to register 
emotion? 

A No sir. 

Q Did he ask you if you had checked with Admiral 
Poindexter to see if he had approved the diversion plan? 
If you recall? 

A I think it is likely he did and I said that I 

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WDOTfflF 



92 



did not. 

Q Let me ask you about one of these exhibits here. 
These notes that Charles Cooper took of your interview with 
the Attorney General were already exhibits in your testimony, 
exhibits 67, and I will ask that they be incorporated by 
reference into the exhibits for this particular deposition. 
When Cooper went over his notes in his testimony the other 
day, he acknowledged that he had left the word "not" out of 
his notes and I will point out to you where he testified that 
he wan€ed the word "not" inserted. 

I will direct your attention here to a copy of the 
notes, the fourth page of notes, marked in the upper right 

corner with a number, the origin of which I am not certain, 
but it is 3096. Directing your attention to the December 
7th line, Assistant Attorney General Cooper testified that 
upon his recollection, the word "not" should have been 
included after the word "should" on the December 7th line 
such as it read: 

"M" — standing for McFarlane — "said we should 
not provide arms" — I can't read the next word, I don't know 
if you can -- McFarlane — 

A "No talks re problem with arms already given 
by Israel. " 

Q Would the insertion of the word not there he 
consistent with what you told the Attorney General on that 



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93 



Friday afternoon interview with Mr. Cooper present? 
A Yes, it would. 

MR. GARMENT: Anybody ever figure out the last 
line that doesn't appear — there must be an original. Do 
you know which line I am referring to? 

MR. MORGAN: Why don't we go off the record for 
a second? 

(Discussion off the record) 
MR. LEON: With regard to November 23rd, I believe 
it was,' you have testified that — excuse me -- November 21st 
-- I believe you testified from your recollection that in 
your conversation with Colonel North after you had met with 
the Attorney General, you got the impression from him to the 
effect that perhaps one of his friends inside the Bureau -- 
referring to the FBI, I believe — had suggested that his 
phones were likely to be surveyed as well as yours. Is that 
consistent with your recollection? 
A Yes. 

Q And you also I believe, testified that he might 
have commented on that same occasion to the effect that "I 
have been urged to get counsel" That was part and parcel of 
it without identifying who it was that urged him to get 
counsel? 

A Yes. 

Q Would it be possible it was the same person in 



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94 



the same conversation who suggested both things, that he get 
counsel and your lines and his might be bugged? 

A It is possible. 

Q Did he ever mention a person named Buck Revel 1 at 
the FBI as a friend of his? 

A Yes. 

Q Did you know about their working relationship on 
terrorist actions at the Bureau? 

A Yes. 

Q , Might it be possible that he was the friend he was 

referring to at the Bureau — at least theoretically possible? 

A It is possible. 

Q With respect to the Attorney General, I believe 
that Ms. Naughton asked you if you had any knowledge whether 
or not Colonel North had ever informed the Attorney General 
about Colonel North's activities vis-a-vis contras and contra 
resupplies, and that you said you didn't have any knowledge, 
but that you could speculate in that area? 

A It is purely speculation on my part. I am 
inclined to think that he probably did. 

Q But that is based upon your understanding -- your 
speculation, as I understood it, was based upon your under- 
standing that they had had a meeting with regard to the 
release;^ of hostages in the Middle East? 

A Yes. And I should not speculate. It seems 



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95- 



natural to me in the context of the discussion of where 
the money was coming from, and that may not be the case. 

Q But then experience has indicated, has it not, th 
a lot of things that Colonel North would naturally bring to 
the attention of people, he had not. For example, as I recall 
your testimony, when you appeared before the committee in 
public hearings, there were events, for example, a meeting 
in Miami at a hotel that Colonel North met with a number of 
contra leaders, while you were still National Security Advisor 
his supervisor, and he never informed you of that — during 
testifying to that -- that he never informed you of that event 
and you were his boss? 

A There may have been a r-eeting he didn't tell me 
about. His meeting there, the San Jose declaration, he 
informed me of. 

Q Then, of course, there were the missions that he 
sent Gaston Sigur on that you were questioned about in your 
■public testimony as to whether he had informed you that he 
had taken it upon himself to ask Gaston Sigur, who was a 
advisor to the NSC, to visit with certain countries? 

A Yes. 

Q As I recall your testimony. North had not told 
you that he had sent Gaston Sigur to two separate countries 
to solicit funds? 



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96 



Q At the time that that occurred, you were his boss 
and the National Security Advisor to the President? 

A Yes. 

Q It would have been logical for all people working 
at the NSC to have thought he would have told you about that, 
too? 

A Yes. I think the compatability in those statement^ 
lie in the different kinds of reception he would have. Mr. 
Meese was connected to the conservative constituency, so he 
might a-xpect a different reception. I don't know that. 

Q When the Attorney General found out about the 
diversion memo he went to the President of the United States 
about it forthwith, after confronting North with it? 

A Yes. 

Q So we do know that for certain? 

A Yes. 

Q One might speculate that if the Attorney General 
was aware of anything going on by North, that was unlawful 
in Central America, he would have done the same thing, is that 
not a reasonable inference? 

A Certainly. The point is that he may not have 
believed that there was illegal activity. 

MR. LEON: I don't think I have any other 
questions, Mr. McFarlane. I, too, want to join in the comment 
of Ms. Naughton that we very much appreciate your coming out 

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Mimir 



97 



here at this late hour of the day and sitting here so patientl 
and working so hard to recall the events. It is appreciated 
very much. 

Thank you, Mr. McFarlane. 

MR. MORTON: Two quick questions, just to clear up 
the record. 

Mr. McFarlane, Ms. Naughton asked you if you had 
heard after November '85 about any further discussions about 
the managers of replenishment of TOW missiles and I believe 
you said you didn't recall. Since then, I spoke with you at 
the break about a PROF note you received in '86. Did that 
xefresh your recollection? 

A Yes. I should have noted that after I left the 
government a question arose in Colonel North's mind about 
whether or not the Secretary of State was witnessing — excuse 
me -- he asked whether or not when the original decision was 
made by the President to allow Israel to sell arms and then 
to come to us for replacements, was it clear that Israel had 
to pay us for the replaced arms. And I informed them yes, 
that indeed is the case. Israel always understood that they 
had to pay for whatever they bought and that is the only 
change. _ 

MR. MORTON: The second point is you stated 
that in response to questions from Ms. Naughton that Oliver 
North told you in November ' 86 that you — that he hoped you 



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98 



would not be harmed by anything that happened. I think 
previously, you testified that the "you" was plural and 
included the President of the United States and Admiral 
Poindexter and yourself. Is that still your recollection? 

THE WITNESS: Yes. 

MS. NAUGHTON: Was there any issue of replenish- 
ment being a higher grade TOW missile than what the Israelis 
had sent? In other words, they were sending cheaper missiles, 
they were obviously going to be replaced with more expensive 
missiles. Was there ever a complaint on the part of the 
Israelis that they would have to eat that additional cost? 

THE WITNESS: I am not aware of the details of it, 
but I recall Colonel North saying to me, a cryptic comment, 
that we have had all kinds of problems with the model, where 
they shipped one version of Hawks and they wanted I-Hawks or 
Improved Hawks, and I won't bore you with it, and he didn't, 
and I don't think you want to be bored with it. 

I am afraid I don't know anything more about it. 

MR. GARMENT: I request how much or how little 
you use of this deposition, that you make available for the 
public record the documents that we have prepared and 
furnished you as exhibits to Mr. McFarlane's further 
deposition. 

(Whereupon, at 8:40 p.m., the deposition was adjourned.) 



iiKiw hmim 



707 



NATIONAL SECURITY COUNCIL 



UliC^lfiWD 



16S2 

14x4 





March 8, 


1985 


03/S5 
oa/B5 


ACTION 



MEMORANDUM FOR ROBERT C. MCFARLaJiE 

FROM: OLIVER L. NORTHJ- 

SUBJECT: Meeting with House Permanent Select Committee on 
Intelligence (HPSCI) 

Attached at Tab I is a self-explanatory memo from you to Max 
Friedersdorf responding to his memo at Tab II. 

RECOMMENDATION ^ 

That you initial and forward -your memo to Max Friedersdorf. 

Approve Disapprove 



Attachments 

Tab I - McFarlane Memo to Friedersdorf 

Tab II - Friedersdorf Memo to McFarlane of February 28, 1985 




Partially DecLssifip.-^.'Kc-ieasfu on Oa^^.^j^jj^i'j 

'-'i^e' pre;!' : ii? ot E ;' p-^% -4, 



>\' 



CONFIDEN'TIAL 

Declassify: OADR 



y;-cMM[g ^"^1 



708 



MtM' "v \N,. \1 




WASHIMCTOK 



MEMORANDUM FOR MAX L. FRIEDERSDORT 

FROM: BUD MCFARLANE 

SUBJECT: Meeting with Members of the House Permanent Select 
Committee on Intelligence (HPSCI) 

Per you memo of February 28, 1985, I met with the following 
members of the HPSCI on March 4, 1985: 

Representative Robert Stump (R-AZ) 
Representative Robert Livingston (R-LA) 
Representative Henry Hyde (R-IL) 
Representative Robert McCollu m (R-FL) 

Bob McCollum expressed belief that|^^^^^^|P^ound U.S. aid 
essential to the success of the Nicara^a^resTstance and need 
for increased lobbying on the Hill 

Henry Hyde felt that we shoul^expandprivat^j*ctor and third 
country assistance, '"^j^HIHHiUflHHi ^" ^^* 
effort to support the resistanc^^^^explaine^Jn^these are just 
not tenable alternatives — for the freedom fighters or for us. 

Bob Stump indicated that we needed to get on with some "hard 
bargaining* if we plan to win the vote. 

Bob Livingston had obviously done the most thinking about the 
problem and made a strong case for a well orchestrated 
effort. He noted that we had great need of a vote count before 
we go too much further and start disipating our energies. 

In short, it was a good session. They were all emphatic that it 
will take a well executed plan to get the votes that we need. We 
committed to help get as much as possible declassifed and to set 
up a series of briefings both here and on the Hill. I also 
stressed the need to get as many members as possible down to the 
region to meet with Duarte, Suazo, Monge and the resistance. 

If you feel that this kind of session helps, keep 'em comingl. 



■ €O MF IDE MTI AL- 
Declassify: OAOR 




RMlffljfJ 



709 



i^^oLrjuirltl) 





THE WHITC HOUSC 


• - 


WASH 1 NSTON 




February 28, 198S 


TO: 


BUD MCFARLANE 


FROM: 


MAX L. FRIEDERSDORF 


SUBJECT: 


Meeting with Republ: 




1652 



^ 4060 



#f 



of House Select Cononittee on 
Intelligence 



Bud, could you meet with this group? 



UNf l^''^"E!l 



710 



yNCLASSpED 

THE WHITC MOUS^C 



WASH I NCTON 



February 22, 1965 



MEMORANDUM FOR ROBERT MCFARLANE 



THRU: 
FROM: 



MAX FRIEDERSDORF 
M.B. OGLESBY, J 



W. DENiyp TH 



THOMAS 



:^7 fdf^ 



^ 40 6 




J _. 




Republican Members of the House Permanent Select Committee on 
Intelligence, in anticipation of marking up the Intelligence 
Authorization bill (which includes restrictions on aid to 
Nicaraguan Contras) want to meet with an appropriate 
Administration policy official. They are seeking guidance on 
this issue and the best strategy to pursue. The legislative 
process is underway, with the schedule calling for mark-up by the 
1st week in Aprils- — -^.^ 



Would you D^ease advise w>io the appropriate Administration 
official sVuiy^d be? I recommend Jhie meeting be arranged in the 
near future.^ ~- 



cc : Chris Lehman 



y ^ 



fc . -. 









['HI 



Mmmid 



711 

7//3yS5 

• TOP-&i;€ficWS^NSIVIV^ ll'^ji/ JlWJf'JUl "J^ily 13, 1985 ' 



liSLiSSiFlEO 

1-7 



H 42A4 



FROM: The White House 

TO: The. Secretary of State's Aircraft 

Please deliver the following message from Bud McFarlane to 

Secretary Shultz personally and to no other for him. it must 

repeat nust be opened by the Secretary only. If it is not 

posible to do so, then so advise this station. 

SUBJiJCT: Israeli-Iranian Contact 

1. Top Secret Entire Text. f f^. 

2. This message is for you only and untJL^ i0' can exchange '^ 
thoughts on it, I would request that it not be shared with ^ 
anyone. Tt'concerns a proposal by an Iranian official endorsed 
by the Government of Israel. It' has a short terra and a long teftn 
dimension to it. The short term dimeBsion concerns the leven 
hostages; the long term dimension involves the establishment of a 
private dialogue with Iranian officials on the broader relationship. 

3. It may perhaps first be useful to provide some background on 
how this natter came to my attention. Today, I received a 
private emissary who asked to convey a message from Prime Minister 
Peres. Reduced to its essentials, the oral message expressed the 
Israeli position that their access to Iranian officials (which it 
became clear has involved extensive dialogue for some time) had 
surfaced serious interest among authoritative persons in the 
Iranian hierarchy in opening a dialogue with the west. A month 

or so ago, the Israelis surfaced this interest in a Peres session 

with Michael Ledeen who reported it to me. Separately, Rabin 

- T OP a r i crriT V sensitive; • ^_^____^ AsY ,v,->,^ 

Pjifialli DeclaaifiecT/Released onilSWiffllJI ; H ' ., v^OinLTI /\\4lJ^ cW'^u 

.. ffnd»pnMsionSofLD.Sjt^i|i, |Lt\!h5"i| ( I ' ^ ^^ \S-^ aV ^ 
• liy 3. Regjf. Hsticrjal Security Council U!-V*-.«UW.ii ii^^J V_--::s^ j^^ '_ 



712 



TOP a ^e x^ ^/s'iNS rTiv»: 



PH! \mm 



PAGP 



reported the contact to Sam Lewii and he to you. Ledeen had been 
in Israel on hit own and without any sponsorship from me but h« 
did report the contact. I was awaiting a chance to rep>ort it to 
you when Saa't report reached you and following your stated 
disinclination, I told Ledeen to state tersely to whomeveii hA 2 ^ ^ 
dealt with that we did not favor such a process. He did so. 
4. Last week, during David Kimche's visit, he asked for 10 
minutes with me following a larger meeting. Kimche flHH|D^F 
^H|^m|^m[^B|^^HBm^^HH||, they by 

our disinclination and that he was instructed to determine its 
accuracy. I stated flatly that we could not undertake such a 
dialogue (or trialogue) at this time. David did not amplify in 
any degree as to what they intended but clearly understood my . 
flat turndown. He asked again (m^m^^HSBBV^^^^ ' raise 
it with appropriate authorities and reconfirm it. I committed to 
do so but frankly thought it could wait until your trip and some 
of our more pressing business was behind us. My lone thought at 
the time was that it was interesting that Kimchel 




5. Then came today's emissary who again, 

He stated that Israel has for some ti.-ne 
boen conducting meetings with high level persons in Iran. At a 
recent meeting in Germany attended by Kimche, a iran named Al 
Schwimmer (Father of the Israeli aircraft industry), and on the 
TOP Sncnr T/SPMSITIV^ 



\m\ h%m^ 



713 

side im^Hm^Hm^l^mm^^^^^H and an 
advisor to th« Print* Minister named Gorbanifar, the Iranians 
presented a picture of contemporary Iran that was extremely 
pessimistic; continued economic decline, stalemate oh the war 
front; no improvement even assuming Khomeini's passing without .q 
having "an option." Their hope and that of v/hat they portrayed 
as a significant cadre of the hierarchy was to develop a dialogue 
with the west. At this point and often throughout the conversation, 
Kimch«fWc«aiAded them that they were talking to Israelis who 
aren't the "west" per se and what did they have in mind? The 
interlocutors stated emphatically that they sought a dialogue 
with the United States. The Israelis pressed (in the interest of 
vetting the bona fides of the Iranians with the real power in . 
Iran) for some tangible show of their ability "to deliver" in 
such a dialogue. The Iranians stated that they were very confident 
that they could in the short term, achieve the release of the 
Sftven Americans held hostage in Lebanon. But in exchange they 
would need to show some gain. They sought specifically the 
delivery from Israel of 100 TOW missiles. But they stated that 
the larger purpos^^oiftd be tKe openiflf of a private dialogue 
with a high level Aaierfcair of ficial and a sustained discussion of 
L;S-IranI«» relations. 

6, The concept raises a number of imponderable questions. 
First, there is yburvery reasonable concern raised a month ago 
when the issue was just intelligence sharing .^HH^BIBflH^K 
HmmUH^Hl " That is very real and one has to consider how 
such a "trialogue" would be affected over time by sustained 

T e r c g.cni« -/SF>'siTiv^ llSilOl '*0P5''tCI 




mm 



714 



I»ra«li involv€m«nt. Surely w^<^9hf to •x^etthit Israil'g 
fears over any Arab (at opposed to Iranian) fallout would not 
always necessarily coincide with our own, 



PAGE 4 




7. On the short term aspect, there is a family of questions 
related to our terrorism policy against negotiating with terrorists 
(notwithstanding the thin veil provided by Israel as the cutout 

on this specific matter) . As a footnote I have chec)ced and 
determined that Iran had TOW missiles before the Shah's fall and, 
consequently, their using TOWs now would not necessarily raise 
too many eyebrows. 

8. Then one has to consider where this might lead in terms of 
our being asJced to up the ante on more and more arms and where 
that could conceivably lead, not just in the compromise of our 
position, but to the possible eventuality of the Iranians "winning" 
and where that would put the security of the neighboring Gulf 
States. Clearly that is a loser. But I would thin)c that, 

given the vulnerability of the Iranian interlocutor to our 
discrete blowing of his cover with Khomeini, ought to enable us 
to control that. 

9. At the end of the day, our long term interest remains in 
maintaining an ability to renew ties with Iran under some more 
sensible successor regime. Whether or not this contact is 

yp T flGGPcy ysewsiTivi: 



vm^mi 



715 



TOP S'JCPnT /S'lNSITl'W 



yNysiiiFiED 



PAG: 



connected to viable, stable parties In Iran remains to be seen. 
It could be that these people are no more than self-serving, 
self -promoters who se<>)c to curry favor with an clenut of the 
military --those who happen to want TOWs right now. But I would 
think their risk of exposure again, provides Boete insurance 



against that. And" Israel is not noted for detli^'^wlth fools 
charlatans. "'^^ 



10. George, I cannot judge tj)e equities on this. We need to 
think about it. But I don't think we should tarry. 




On balance my 

instincts are to see our larger interest in establishing an 
entree to someone in Iran and the check provided by the Iranian 
interlocutor's vulnerability to being "blovn" as giving us some 
insurance against perfidy. We could make a tentative show of 
interest without commitment and see what happens. Or we could 
walk away. On balance I tend to favor gcing ahead. 
10. As a final note, and please understand that I intend no 
comment on the N^A bureau for which I have profound respect, I 
don't believe this should go beyond you and Charlie Hill. It 
isn't at all that others lack judgment. It is simply a matter of 
the potential for compromise as the circle widens which is 
axiomatic. 
■*0P SFCPC'i:/S^NSITI\^ 



m\.JS.im 



716 



11. Th« emissary will return to Israel on TuelKy. He should 
give him some signal by then, preferably on Monday Washington 
time. T will await and abide fully by your decision. 

12. Finally, the President has been in the operating room for 3 
hours. I v/ill keep you advised. 

Warm Regards, Bud 

N 42452 



P.S. - I have just received word from Don Regan that the operation 
has been completed and was entirely successful, 




RCM 



mmwB 



TOP sricnST /SENSITIV^ 




5 - i 3 :• I - Z ? ! i Z • 7 . 



14:3JJZ JUL S5 ZFF-4 
Hi FM USOEL SECRETARY \H CANBERRA 

ro S ECS TATE WA!HOC IMMEDIATE 3:95 



SEcro 



FOR S/S PLAIT FROM HI LL 




i^ngl SsCurtty Countll 



E 123SS OECL OAOR 

TAGS: OVIP SHUL U. GEORGE P. ) 

SUBJECT REPLY TO BACKCHANNEL NO 3 FROU SUO 



2. PLEASE HAVE FOLLOWIHC MESSAGES TYPED ON PLAIN BOND 
AND HAND-CARRIED E. 0. TO BUD. ENVELOPE ^UST BE G l YEN 
DIRECTLY TO HIM AND ^QPENED ST HIM AND NO ONE ELSE) 



3 



DEAR BUD. 



IT 



THANH YOU FOR YOUR MESSAGE ON THE ISRAEL-IRAN CONTACT. 
I AGREE WITH YOU THAT WE SHOULD MAKE A TENTATIVE SHOW 
OF INTEREST WITHOUT COMMITMENT I 00 NOT THINK WE COULO 
JUSTIFY TURNING OUR BACKS ON THE PROSPECT OF GAINING 
THE RELEASE OF THE OTHER SEVEN HOSTAGES AND PERHAPS 
DEVELOPING AN ABILITY TO RENEW TIES WITH IRAN JNOER A 
MORE SENSIBLE REGIME -- ESPECI4LL' WHEN PRE3E.NTED to 
US THROUGH THE PRIME MINISTER OF ISRAEL 



UNCIASSIHED 




% 



^^ 



718 



Dopnrtnu'Ui of ^tute 




hi j 
OR 




TIONS 
HIP 
t 



If 



PJCE j; OF 3< 

4 fha: eeiNG said i fjrthiR agree •viirt lOj that t 

SITUATION IS LOAOEO WITH IMPONOERASLES' 'HAT CALL f 
GREAT CAUTION ON OUR PART i THINK rOU -i;vE COVERED 
THEM ALL IN rOUR "HESSAGE I •'OULO CNL f J'lOE^SCORE * 
COUPLE OF THEM: THE FRAUD THAT SEEVIS TO iCCDMPANY S 
MANY DEALS INVOLVING ARMS AND IRiN A.'JO THE COMPLICA 
ARISING FROM OUR -8LESSI.SG" AN ISRAEL-IRAN RELATIONS 
'.VHEHE ISRAEL'S INTERESTS AND OURS ARE NOT NECESSARIL 

THE s;me. 



5. I SUGGEST -- AND TOUR MESSAGE INDICATES fOU LEAN 
THIS WAY TOO •- THAT «E GIVE THE EMISSARY A 'OSITIYE 
BUT PASSIVE REPLY. THAT IS TELL HIM THAT HE MAY CONVEY 
TO HIS IRANIAN CONTACTS THAT THE U.S. HAS BEEN INFORMED 
OF THE IRANIAN PROPOSAL AND IS RECEPTIVE TO THE IDEA OF 
A PRIVATE DIALOGUE INVOLVING A SUSTAINED DISCUSSION OF 
U.S. -IRANIAN RELATIONS. IN OTHER WORDS iVE iRE WILLING 
TO LISTEN AND SERIOUSLY CONSIDER ANY STATEMENT ON THIS 
TOP IC THEY MAY *l SH TO INITIATE. 

6. GIVEN THE NATURE OF THIS MATTER I AM INCLINED TO 
THINK IT SHOULD BE MAIAGEO BY YOU PERSONALLY ITS 
SENSITIVITY REOUIRES KICH-LEVEL MANAGEMENT: BUT THAT 
IN TURN RAISES THE LIIELIHOOO OF DISCLOSURE. BUT THIS 
IS SOMETHING THAT WE CAN GO OVER MORE CAREFULLY AFTER 

I GET. BACK. I DO THUR IT IMPORTANT THAT Y.OU MAKE 
CLEAR TO THE EMISSARY THAT YOU AND I ARE IN CLOSE 
CONTACT AND FULL AGREEMENT EVERY STEP OF THE WAY 
THIS IS ALL THE MORE IMPORTANT IR VIEW OF THE PRESENT 
LACK OF UNITY AND FULL COORDINATION ON THE ISRAELI 
SI OE. 

7 THANK YOO AGAIN FOR YOUR MESSAGE. I CAN ONLY 



REITERATE HOf MUCH I VALUE OUR CLOSE CONSULTATION 
AND FRIENDSHIP ----^. _ ^ ^ , „. 



ONCLASSIFIED 



^ 






' iGE 94 OF fl* 
• GiORGE. 
3HULTZ 



719 



Doparinh^nt of >fule 



S/S-o 




IT 



UNCLASSIFIED 



720 



UNCLASSIFIED 



1^ Occ ^^ 



N 42468 



THE WHITE HOUSE 
WASHINGTON 



■fl'^P'^'' 




Partially Dscl.issilied/Released on /O^f Q 8 d /" ^ 

under provisions o( e t'356 
byK Johnson. NaimalSscun^ Council 



l£2A 



l-//J./f^ 






■Z, -iyrv 7""*"*^ 



UNCLASSIFIED 



\>. 



.-/ ---w^.j-- 









721 




722 




723 




^NcussiFm 



National Stcurity Council 
Th« Whitt Houst 

Syittm* ^iM- 



Padtag*^ 



A/ic/ieJ V«<"'* 



SEQUiNa TO HAS SUN MSMSITION 



13NCLASS!F"ED 




COMMINTS 



724 







^0.- 




z 






io ' Nam« and Address Oat* lioitialtj 


1 


Robert McFarlanej 




2 


.- 1 


3 




! 


4 






5 


- 




6 


1 
1 




}( 


ACTION 




FILE 




APPROVAL 




INFORMATION 




COMMENT 




PREPARE REPLY 




CONCURRENCE 




RECOMMENDATION 




DIRECT REPtV 




RETURN 




DISPATCH 




SIGNATURE 


REMARKS 

cc: Oliver North (#2 and 3) 
Jim Radzimski (*4) 



UNClASSIFfffi 



YES ONLY 



SECRET 



N 42472 

NSC/ICS CONTROL NO ^°2006 



COPY NO 



J-0,ji 



HANDLE VIA SYSTEM IV CHANNEL ONLY 



NSC INTELLIGENCE 
DOCUMENT 



A 



Warning Notice 
Intvlligtnct Sourcti and Mtthodt involved 

NATIONAL SECURITY INFORMATION 
Unauthonitd Onclomrt Subjtt to Criminal Sanctiont 



(Sftlfi^FiE D 



SECRET EYES ONLY 



725 



MEMORANDUM 



NAT I 





SYSTEM IV 
NSC/ICS-402006 



ECURITY COUNCIL 



SECRET 
ACTION 



December 4, 1984 



N 42473 



MEMORANDUM FOR ROBERT C. MCFARLAJE 

FROM: OLIVER L. NORTHJ 

SUBJECT: Confusion in the Nicaraguan Resistance 



IlLAfI 



Adolfo Calero advises that this weekend a three hour meeting with 
held among Bosco Matamoros (local FDN representative), 
Constantine Menges, Jackie Tillman, and Bob Reilly. According to 
Calero, the purpose of the meeting was to address the strategy 
for Congressional and public diplomacy action for a resumption of 
USG support to the Resistance. Calero reports that as a result 
of this meeting: 



Matamoros sent 
headquarters! 



_a 2 2 page telegram (hopefully encoded) to FDN 



The telegram specified that North was no longer involved in 
this endeavor and that a more forceful effort would be made 
to reinitiate funding between now and February. 

Congressional contacts were being worked out and a detailed 
strategy would be forthcoming. 

It was obvious that the State Department was opposed to any 
resumption of assistance, but that Kirkpatrick, Casey, and 
Weinberger would ensure that the program obtained renewed 

support. 

Calero was pulled from the field in Nicaragua to receive this 
message. He was, to say the least, distr essed^amL-aflOf used . Not 
only was he placed at risk in moving back fl^^^^^^Pl^f he feels 
that the mixed signals he is receiving portenS^Terious problems 
within th« Administration. 




receives no advice, intelligence, or support. Now he is being 
"told of discord" about the "worthiness" of the FDN and the 
possibility that the Administration may not ask the Congress 
renew support. 



SECRET 
Declassify: 



OADR 



IdKtA^FlED 



726 



^fiOBSSIFIED 



SECRET * _ 2 

" N 42474 



Up to this point, Calero has been told that we had every 
intention of making another try at the Congress. He is fully 
aware of the constraints imposed in the Continuing Resolution, 
but has never been apprised of any internal debate on the merits 
of whether or not we would pursue a further attempt to obtain 
funds for the Resistance movement. While I may not have been 
fully open with him on this matter, it did not seem to be 
relevant to his other important tasks given current funding 
arrangements. Yesterday's missive from Matamoras has now sown 
doubt which did not need to exist. 

Calero has too much on his mind to be burdened with our internal 
differences. It is unfortunate that we now seem to have so many 
voices speaking for our intentions. Before this goes any 
further, it would seem appropriate to clarify the roles various 
people will be playing in the days ahead. 

RECOMMENDATION 

That you review the points above and indicate your direction on 
who should be saying what to whom. 

Approve Disapprove 



SECRET 



UNa^JSSfFTED 



727 



MtMCr.ANDLM 



NA 




CIL 



i^l Ccci-^/ 



i2/v/?y 



NSC/ICS-402006 



ACTION 



Dacember 4, 1984 



// 



^^c5, 



MEMORANDUM FOR ROBERT C. MCFARLAlB 

FROM: OLIVER L. NORTHJ-/ 

SUBJECT: Confusion in the Nicaraguan Resistance 



Adolfo Calero advises that this weekend a three hour meeting with 
held among Bosco Matamoros (local FDN representative), 
Constantine Menges, Jackie Tillman, and Bob Reilly. According to 
Calero, the purpose of the meeting was to address the strategy 
for Congressional and public diplomacy action for a resumption of 
USG support to the Resistance. Calero reports that as a result 
of this meeting: 



Matamoros sent a 
headquarter! 



?age telegram (hopefully encoded) to FDN 



The telegram specified that North was no longer involved in 
this endeavor and that a more forceful effort would be made 
to reinitiate funding between now and February. 

Congressional contacts were being worked out and a detailed 
strategy would be forthcoming. 

It^ was obviou* that the State Department was opposed to any 
resumption of assistance, but that Kirkpatrick, Casey, and 
Weinberger would ensure that the program obtained renewed 
support. 

Calero was pulled from the field in Nicaragua to receive this 
message. Be was, to say the least, distresse^an^confused . Not 
only was he placed at risk in stoving b*ck^|H||mB, he feels 
that the mixed signals he is reee^ ^ p^ porteno^serious p roblems 
within thm Administration. 




receives no advice , inte 1 1 igence , or support. Now h«rTs 
"told of discord* about the "worthiness* of the FOM and the 
possibility that the Administration may not ask the Congress 
renew s\ 




Declassify: OAOR 



wsmm 






728 



\immmi 



Up to this point, Calero has been told that we had every 
intention of making another try at renewed support from Congress. 
He is fully aware of the constraints imposed in the Continuing 
Resolution, but has never been apprised of any internal debate on 
the merits of whether or not we would pursue a further attempt to 
obtain funds for the Resistance movement, while I may not have 
been fully open with him on this matter, it did not seem to be 
relevant to his other important tasks given his current funding 
problems. Yesterday's missive from Matamoras has now sown doubt 
which did not need to exist. 

Calero h^s too much on his mind to be burdened with our internal 
differences. It is unfortunate that we now seem to have so many 
voices speaking for our intentions. Before this goes any 
further, it would seem appropriate to clarify the roles various 
people will be playing the days ahead. 

RECOMMENDATION 

That you review the points above and indicate your direction on 
who should be saying what to whom. 

Approve Disapprove 



mwmm 



1 



729 



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731 



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736 

UNCLASSIFSED 



BACKGROUND TO EVENTS OF NOVEMBER AND 
" DECEMBER 198 5 RELATING TO ROBERT McFARLANE 

In his role as National Security Advisor, Mr. McFarlane 
was responsible for the coordination of all decision-making 
within the Administration on national security matters. In 
addition, because the President had transferred responsibility 
for arms control policy from the State Department to the National 
Security Council in the summer of 1983, Mr. McFarlane had 
principal responsibility for arms control. His overriding 
concern during November 1985 was therefore quite naturally the 
long-planned November summit between President Reagan and Soviet 
leader Mikhail Gorbachev. Mr. McFarlane had determined some time 
prior to the summit that he would resign after its conclusion, 
and was especially hopeful that the summit would succeed and he 
could leave government on a positive note. 

At the beginning of November, he traveled with Secretary 
Shultz to Moscow for pre-summit talks with General Secretary 
Gorbachev. On November 8, shortly after his return and in the 
. § midst of his preparations for the Geneva summit, Mr. McFarlane 

rn met m his office with David Kimche, who tried to persuade Mr. 

j» 

^ McFarlane not to resign. Mr. McFarlane does not recall whether 

s 

^ Mr. Kimche mentioned at this meeting the possibility of Israel's 

again shipping arms to Iran, but does recall -- and has so 
testified -- that Defense Minister Rabin sought reaffirmation of 
the U.S. commitment to replenish Israeli arms when he met with 
Mr. McFarlane at the White House one week later, on November 15. 




UNCLASSIFSED 



738 



UNCLASSIFIED 



Although Mr. McFarlane has testified that Defense 
Minister Pabir. "may have" mentioned on November 15 an Israeli 
intenti;.'. to ship HAWK missiles [5/11/87 Test., pp. 126-271, we 
understand that this was not the case and that Mr. McFarlane c:d 
not learn about HAWK missiles until a few days later, when he was 
in Geneva, probably from either Admiral Poindexter or Lt. Colonel 
North. 

In any event, Mr. McFarlane's daily schedule shows that 
his November 15 meeting with Mr. Rabin lasted only ten minutes 
and was interrupted by a two-minute telephone conversation.—' 
The meeting occurred on a day when some officials in the West 
Wing were attacking Mr. McFarlane for softening the language in a 
pre-summit speech delivered by the President on the Soviet Union 
the previous night [11/16/85 New York Times , p. 61, and follcwe; 
on the heels of a pre-summit briefing. 

The next day, Saturday, November 16, at approximately 
8:00 a.m., Mr. McFarlane departed from the South Lawn for the 
trip to Geneva. Mr. McFarlane met for three minutes in his 
office with Secretary Weinberger before leaving. Secretary 
Weinberger stopped by to apologize for a Defense Department leak 
of a three-page private letter from Mr. Weinberger to the 
President on the purported dangers of continued U.S. adherence to 
the SALT II Treaty. The New York Times had printed a copy of the 



1/ Mr. McFarlane also may have spoken to Mr. Rabin later 

the afternoon by telephone. 



UNCLASSIF9ED 



739 



UNCLASSIFIED 



letter m full in that morning's edition.- The two men did r.c-. 
discuss Iran. 

On Sunday, November 17, Mr. -VcFarlane appeared on NEC's 
"Meet the Press" from Geneva. For the remainder of the day he 
was completely absorbed by press briefings and final preparations 
for the scheduled Tuesday talks. Mr. McFarlane has testified 
repeatedly that he recalls receiving a telephone call at about 
this time from Mr. Rabin, who was in New York, and that Mr. Rabin 
requested assistance in connection with a shipment. The 
telephone call was on an open line, and arms were not discussed. 
Mr. McFarlane has testified, however, that he understood Mr. 
Rabin was referring to arms. 

General Powell has testified that he did not receive a 
request to obtain information on HAWKs until at least Monday, 
November 18, after Mr. Rabin had telephoned Mr. McFarlane in 
Geneva and after Mr. McFarlane had placed Mr. Rabin in contact 
with either Admiral Poindexter or Lt. Colonel North, one of whom 
probably reported information about HAWKs back to Mr. McFarlane, 
apparently for the first time. General Powell has testified that 
either Admiral Poindexter, Colonel North, or Secretary Weinberger 
made the request to him for information about HAWKs. Mr. 



2_l The Washington Post reported the next day that the leak 

was thought by some to have been designed to sabotage the summit, 
and in any event "brought into the open the bitter differences 
that have afflicted arms control policy throughout the Reagan 
administration." (11/17/85 Washington Post , p. Ai) 



- 3 - 



IjN3BSS«F'P9 



740 



iiNcLAss.;:.:D 



McFarlane h_as testified that he briefed both the President and 
Secretary Shuitz on the transfer of HAWKs while they were in 
Geneva. 

Secretary Shuitz has contemporaneous notes of a November 
18 conversation in Geneva with Mr. KcFarlane about HAWKs. 
Apparently, neither Secretary Shuitz nor the President had 
independent recollections in November 1986 of their discussions 
in Geneva about HAWK missiles; the Secretary's recollection seems 
to have been refreshed by the notes that were discovered in a 
review of his files. In any case, on that day, November 18, all 
three men were preoccupied with the next day's talks between 
President Reagan and Mr. Gorbachev. Mr. McFarlane also held a 
press briefing that day. 



The talks began as scheduled on Tuesday, November 19, 
with a morning session onl 

The Gorbachevs hosted a dinner that 
evening for thp Reagans , to which Mr. McFarlane accompanied the 
President.— Wednesday morning (November 20) was devoted to 





and the evening, to a reception by the Swiss President, 

4/ 
which was followed by another dinner.— 



2/ The same day North wrote the letter seeking General 
Secord's assistance. 

£/ Colonel North was corresponding with Admiral Poindexter 
during this time in Washington about logistical problems with the 
Israeli shipment. 



UNCLASSIFEED 



741 



ONCLASSIRED 



A ioint U.S. -Soviet statement was released on Thursday, 
November 21. Both Secretary Shultz and Mr. McFariane held news 
conferences, after which Mr. McFariane accompanied the President 
to a meeting with NATO leaders m Brussels. Mr. McFariane 
returned to Geneva that evening, and after giving a speech in 
Geneva the following morning, proceeded to Rome to debrief t.he 
Pope and then Italian Prime Minister Craxi, Defense Minister 
Spadolini, and Foreign Minister Andreotti. At 5:30 p.m. on 
Friday, November 22 [ see Tower at B-331 , at Colonel North's 
request, Mr. McFariane contacted the Foreign Minister of a third 
country to ask him to permit an Israeli transshipment of 
equipment to Iran through the third country. Mr. McFariane was 
not "pulled out of a meeting" with the Pope to assist Colonel 
North as some have reported; Mr. McFariane did not meet the Pope 
until Saturday, November 23. (See 11/24/85 New York Times , 
p. 361 



Mr. McFariane traveled that weekend to Paris to debrief 
President Mitterand, and held a press briefing. On Monday, 
November 25, the day the aircraft carrying the HAWKs departed the 
European country, Mr. McFariane arrived in London and went 
directly to a meeting with Prime Minister Thatcher. A dinner 
with Lord Carrington followed the meeting. Mr. McFariane 
returned to the United States from London on November 26, but 
stopped only briefly in Washington; he continued to San Francisco 
the same day (where he attended a birthday party for Secretary 
Shultz) and then flew to Santa Barbara the following day to ~oin 
the President. Mr. McFariane was obviously aware that no 



742 



unclassif;ed 



hostages h<ad been released, and he wrote Colonel North during his 
brief stopover in Washington on November 26 that he was inclined 
to thir.k Ledeen should be excluded from the initiative. [Tower 
at B-33 n . 23 I 

Mr. McFarlane remained in Santa Barbara over Thanksgiving 
with the Presidential party. On Saturday, November 30, he drove 
to the President's ranch and delivered his letter of resignation 
to one of the President's military aides. On Sunday, December 1, 
Mr. McFarlane discussed his resignation personally with the 
President. Mr. McFarlane also expressed his concerns about the 
Iran initiative, and the President directed him to convene a 
meeting in Washington upon their return to evaluate whether the 
initiative should go forward. 

The following day, Monday, December 2, Mr. McFarlane 
accompanied the President to Washington, D.C. via Seattle; they 
arrived together at the White House at about 9:00 p.m. 

It became quickly known on December 3 that the President 
had accepted Mr. McFarlane 's resignation. [See 12/4/85 
Washington Post , p. Al ) The Washington Post further reported 
that "McFarlane did not attend the National Security Council or 
the White House senior staff meeting. As an official put it, he 
simply 'disappeared' from policy discussions." On Wednesday, 
December 4, the President, Mr. McFarlane, and Admiral Poindexter 
held a ^oint press conference, formally announcing Mr. 
McFarlane 's resignation and Admiral Poindexter 's appointment as 
his successor. Colonel North sent a PROF message that afternoon 

- 6 - 



unclassif:l3 



743 



UNCLASSIFSED 



to Admiral. Eoindexter on a private channel (without copying Mr. 
McFarlane) outlining a new proposed arms-for-hostages deal. ( RCM 
Ex. 45 1 

On December 5, Admiral Poindexter scheduled a meeting on 
Iran. The meeting was held m the morning of December 7 at the 
Residence. The President, Secretary Weinberger, Admiral 
Poindexter, Secretary Shultz, John McMahon, Donald Regan, and Mr. 
McFarlane attended. The history of the Iran program was 
reviewed, and at Mr. McFarlane 's recommendation it was decided 
that he should go to London to advise the Iranians that the U.S. 
would not agree to any plan involving the shipment of arms for 
hostages. Mr. McFarlane has testified repeatedly about his trip 
to London on Sunday, December 8. The discussions with Mr. 
Ghorbanifar were heated and wide-ranging. Mr. Ghorbanifar 
apparently complained about a lot of things, including the HAWKs 
the Iranians had received; however, the discussions were supposed 
to be prospective from Mr. McFarlane 's point of view, and many cf 
the things about which Mr. Ghorbanifar complained were foreign to 
Mr. McFarlane. 

Mr. McFarlane returned to Washington that Sunday night. 
He flew to New York City from Washington the following morning on 
personal business. He arrived back in Washington later in the 
afternoon the same day to give an early evening address to the 
World Affairs Council. Mr. McFarlane does not believe he saw 
Colonel North's December 9 memorandum to Admiral Poindexter and 
himself [RCM Ex. 45A], in which North argued for continued arms 



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transactions in an effort to save the hostages. Mr. McFarlane 
believes he would have recalled the memo i f he had seen it 
because its proposals ran counter to his strong conclusion at the 
end of the London meeting. But Mr. McFarlane does recall Colonel 
North's warning that the hostages would die if the Iranian 
proposal were terminated. 

At 10:30 a.m. on December 10, the President convened a 
meeting with Secretary Weinberger, Director Casey, admiral 
Poindexter, Mr. Regan, and Mr. McFarlane. (Secretary Shultz was 
at a NATO meeting in Brussels.) Mr. McFarlane debriefed on the 
London trip. President Reagan later told the Tower Board that, 
at the December 10 meeting, Mr. McFarlane expressed no confidence 
in Ghorbanifar and recommended rejection of the latest Iranian 
plan. "The President said he agreed. 'I had to.'" [Tower at 
B-50I The possibility of the Administration's pursuing purely 
political discussions through other channels was ostensibly left 
open . [_Id . ) 



In the following days, Mr. McFarlane began focusing more 
upon what he would do when he left government. He does recall 
that at some point Mr. Ledeen was pushing to have the CIA give 
Ghorbanifar another lie detector test, and recalls also 
discussing transition matters with Admiral Poindexter. But Mr. 
McFarlane's attention was clearly shifting. On December 16, he 
moved his office from the West Wing to the Old Executive Office 
Building. On December 20, he left for a skiing vacation in Utah. 
Although he remained on the payroll for another two weeks, he did 



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not return to his OEB office except to clear out his personal 
effects. Mr. McFarlane was not involved in any late December or 
January discussions about findings, nor in the decision taken m 
January to begin shipping arms directly to Iran. 



UNCLASSIF8ED 



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TRANSCRIPT h.c^.. 
OF PROCEEDINGS 



CONFIDENTIAL 

UNITED STATES SENATE 

SELECT COMMITTEE ON 

SECRET MILITARY ASSISTANCE TO 

IRAN AND THE NICARAGUAN OPPOSITION 



DEPOSITION OF LT. COL. JOHN C. McKAY 



inssmEB 



Partially Declassified/Released on /^--^l -^"J 
under provisions of E.O. 12356 

by N, Vl»nan, National Security Council 



Washington, D. C. 
Monday, April 6, 1987 



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SELECT COMMITTEE ON 

SECRET MILITARY ASSISTANCE TO 

IRAN AND THE NICARAGUAN OPPOSITION 

DEPOSITION OF LT. COL. JOHN C. McKAY 

Washington, D. C. 
Monday, April 6, 1987 

Deposition of LT. COL. JOHU C. McKAY, called for exam- 
ination pursuant to notice of deposition, at the offices of 
the Senate Select Committee, Suite 901, the Hart Senate Office 
Building, at 9:20 a.m. before WENDY S. COX, a Notary Public 
within and for the District of Columbia, when were present: 



PAUL BARBADORO, ESQ. 
Deputy Chief Counsel 
Senate Select Committee 

on Secret Military Assistance 
to Iran and the Nicaraguan 
Opposition 

HENRY J. FLYNN 
Investigator 

ALSO PRESENT: KATRIN McKAY 



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1 ' CONTENTS 

2 WITNESS EXAMINATION 

3 Lt. Col. John C. McKay 

, by Mr . Barbadoro 3 



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PROCEEDINGS 
Whereupon, — 

.^, JOHN C. MC KAY 
was called as a witness anil, having first been duly sworn, 
was examined and testified as follows: 
EXAMINATION 
BY MR. HARBADORO: * - 
Q Colonel, my name is Paul Barbadoro. I am deputy 
chief counsel to the Senate Select Committee. I hope my 
questions will be clear to you. If they aren't, please let 
me know. If I ask you something that you can't answer, ^ust 
tell me. 

Why don't we begin by having you state your Lul J 
name, please. 

A My name is John Cameron McKay. 
Q Where do you work? 

A I work at Headquarters, Marine Corpa^ Wash i ng ton, 
O.C. _ ■ ,..- z. --' 

iQ(j..^ leu are a lieutenant colonel? 

A I am a lieutenant colonel in the Marine Corps, 
yes, sir. ■--:S3^ ^^^ ^ 

Q Could you briefly describe the naturfe c^your 



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work? - 

A Yes, sir. 1 an ai^:^ction officer in the plans 
division, and I work primarily with elements o£ the defense 
guidance joint strategic planning documents, speciaJ 
operations forces, low-intensity conflict. 

Q When did you first meet Lieutenant Colonel North? 

\ Sir, I don't know the exact date, but it was while 

we were classmates at the Naval Academy. I would say it was 
probably 1966. 

Q I know you have already described to our 
investigators some of the contacts you had with him over Kha 
years. I want to focus on those contacts since January 1, 
1984. Can you tell ae, when did you see him first after that 

-m- 

date? 

A Sir, to the best ^o£ iggsltnowledgLg;~^fe.»<m hia^in M<iy 

of 1985, saw him personally May of^ 1985, aCter that date. 

Q Let ne go back. Did you sea him in December- of 
1984? 

A No, sir. X talked to him on the phone, I believe, 
in December of 1984. 

Q What prompted that phone call? 

A Classmates from the Academy, it was more of" a 



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1 s<3cial call, just say hello. I hadn't: talked to him sinre 1. 

7 had come out ot F] Salvador in 1983. 

3 Q Did you call him? 

4 AT believe I did, yes, sir. In Cact, I will say I 
5| definitely calleil him. He never called me, 

6 Q During that call, did you discuss Colonel North's 

7 activities in support of the Contra movement? 

8 A To the best of my recollection, no, sir. 

9 Q It was just personal matters? 

10 A It was about our families. My comment to him to 

11 the effect that if he ever came back to the Marine Corps, 

12 that having been in such a high-priced environment, or such d 

13 -- being exposed as much as he had been, he would find comln>7 

14 back to the Marine Corps a real letdown. That was basically 

15 the gist of the conversation. 

16 Q Let's move ahead to May of 1985. Where did you 

17 see him? 

18 A I had called him, sir. When we physically met, we 

19 met in his office in the Old Executive Office Building. 

20 Q Where were you working at that time? 

21 A At that time, I was a regimental executive 

22 officer. First Marine Regiment at Camp Pendleton, 



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I ' Ca I i £orn ia . 

?. , Q What brought you to Washington? 

Ji A I wad to Eiil a quota or fill a billet for the 

4 commander's drug and alcohol orientation course that was 

5 being held in Washington at that time. 

6 ' Q What caused you to go see Colonel North? 

I 

7 A Again, I had made a phone call, a mutual friend o: 

a c] ("ssmate,^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^! 

9 ^^^^^^^1 Terry Murray, who is presently with the Senate 

10; iiaiscr. We had talked about that, and he said he reaJly 

11 I ..anted to see me, and we would have to get together, talked 

12 about going out out together and getting diunk. I think, if 
13' I recall correctly, it was within 24 hours that I went over 
14 to see hiai. The appointment was Cor 8:00 in the evening, am 
IS ! I met hia in his office, and the whole conversation took 

16 I ' place in his office. 

17 I Q Could you describe that conversation to me? 

18 A Just parts of it. I came away with the impress ioi 

19 that for the first time since I had known hia, that I was 

20 dealing with a zealot here. His office looked like a combat 

21 operations center in the sense that he had maps oC Nicaragua 

22 had a nap of Managua, normal nonsense of broad -based arrows, 

( 




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ijrade attacks, that sort at thim;. He dhoued me some 
photographs of himself, mostly with various Contra leaders, 
rtermudez was one of them, Colonel Sermude:? . With N icdraquan 
kids, with refugees, but mostly with Nicaraquan soldiers. 
His statement, which I believe he reiterated a couple ot 
times, was that we were going to be in Managua by Christmas. 

But he was very much caught up with the Contra 
thing. I made some comments that I had some problem with the 
Contras, that they didn't have an ideological base, I thoughi: 
they were a paper tiger, and he proceeded to try to persuade 
me otherwise. 

Q Now, you had been assigned to El Salvador in 1981V 

A Yes, sir. 

Q What was your assignaent there? 

A I was the naval attache, sir, from 1981 to 
December of 1982. 

Q Could you describe what a naval attache in El 
Salvador does? 

A 




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the Navy. The Salvadorin Navy is extremely small 




Within three months of arriving in the country, 
the ambasaador was dealimj directly and only with me on all 
military intelligence matters in the country. 




Q Who was the ambassador? 
A Ambassador Dean Hinton. 

MR. QARBADORO: Hay we go off the record for a 
second; he is present. 

(Discussion off the record.) 
BY MR. BARBADORO: 
Q Let's go back on the record. Colonel McKay, you 
were describing your contacts with Ambassador Hinton. Ple-is* 
continue. 
A 




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So I was doing a little bit different than what 
must naval attaches do. 

Q Did you have any contact with any of the Contra 
leaders? 

A No, sir, I did not. 

Q Were you involved in any way in supporting or 
reporting on the Contras when you were in El Salvador? 

A Not when I was in El Salvador then, sir. None of 
my reporting had to do with^^^^^^^^^^^^l except wher 

I wa: 

just very, very superficially aware of the Contra program at 
that time,! 





Q Going back to your conversation with Colonel North 
in May of 1985, did you discuss your activities in El 
Salvador with him during that conversation? 

A I don't recall doing so, no, sir. I had on a 
previous meeting with Colonel North in January of 1982, but [ 



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1 I was very much lefii: with the impression in May ot 1985, 

2 1 wfiatever information that I couJd have provided CoJoneJ 

J: North, he was less than interested to listen to it. 

I 

4 I Q L)id Colonel North tell you anything si>ecific about 

5' his support for the Contra movement during that conversation 

6 I in May? 
71 A Specific only in that I recall having seen it in 

8 1 the press. He was talking about getting money for a 

9 I helicopter. He said that they were raising money from 

10 private individuals and private organizations to support the 

11 Contras . And, if I recall correctly, he specificaJiy said 
IP. I for non-military purposes. 

13; Q Did he say what he was doing to raise funds? 

14 A No, sir. He had mentioned that he had given .some 

15 talks, and that was all ^^iilMatp^M -specif i cally his 

16 saying. 

17 Q Did lie say anything to you about raising funds 

18 from third countries? 

19 A No, sir, I do not recall anything of that natuie 

20 being discussed. 

21 Q How long did this meeting in Colonel North's 

22 office go on? 



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Ij A To the best ot my recollection, sir, it was ^bout 

2 I an hour and a half. 

3 I Q What happened after thaf 

! 

4 1 A He said that he had an important meeting with some 

5 people and that he had to go, and I just -- he walked me 

6 down, and I left. 

7 Q When did you next speak with Colonel North? 

8 A Again, to the best of my recollection, it would 

9 have been in May of 1986 when he came over to lecture at the 

10 National War College, person to person. I may have talked to 

11 him on the phone during my time at the National War CoJJeqe. 

12 Q When were you at the National War College? 

13 j A I started in August of 1985 and graduated i ri Junp 

14 of 1986. 

15 Q How many tiffles would you have spoken with him on 

16 the phone between May of 1985 and your next meeting with him? 

17 A Once or twice. In fact, I am not sure that I did, 

18 because that was at the time -- this was when Dewey 

19 Clarridge's name had come up. This is when the mining of the 

20 harbors had taken place, the handbook had been published. I 

21 remember at the time saying what an amateurish operation the 

22 whole thing was. I had expressed to my wife and to some 



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1 other people concerns ^bout North's role in this. Ai;diii, 

2 knowing him. If I -- I am not .<!ure that I talked to him on 

3 1 the phone between May of '85 and June of '86. I think the 

4 only time that we talked is when he came over to lecture at 
i 

5J the National War College. 

6 Q You say that Dewey Cjarridge's name came up. Came 

7 up where.' 

8 A It was the -- the first time I saw jt was in an 

9 article in the Hall Street Journal. 

10 Q You are talking about coming up in the press? 

Ill A In the press, yea, sir. 

12! Q Describe your meeting with Lieutenant Colonel 

13 North in June oE '86. 

14 A It was just mere chitchat. He was with the 

15 Comfflandant of the War College. He had finished his locturo, 

16 came out, and put on the facade of old friends and slapped 

17 the shoulder:}, how are you doing. We have got to get 

18 together for a drink or dinner. I will give you a call, that 

19 type of thing. That was all. He went on. 

20 Q There was no substance of discussion about the 

21 Contras? 

2?. A About the Contras or his lecture, which I thouciht 




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1 was very controversial. Hut, no, nothinij substantive. 

2 1 Q What was fiis lecture about? 

3 I \ Combat and terrorism. I Eeit he had i;otten ini-.o 
I 

4 I some extremely sensitive areas in an audience that shouldn't 

5 I have known about them. 

6 Q When did you next meet with him? 

7 A Next time I saw him was after lie had been Cired 
I 

8 from the NSC, and he came over, and he works in ray office at 

9 Headquarters, or he has a desk in my office in Headquarters, 

10 Marine Corps. 

11 Q What does he do there? 

12 A Occupies a desk when he is not seeing his 

13 I counselor or seeing Mr. Walsh or some other people. 
I 

14 Q He doesn't have a specific assignment? 

15 A He is doing some very, what I thiTik are 

16 . insignificant things. He is playing around with some 

17 things. The purpose being, all of our projects are fairly 

18 long-term, and to put somebody on them and have them yankfd 

19 out, for whatever reason, would not be very beneficial. So 

20 he is just doing little clean-up chores for us. 

21 Q Has Colonel North ever said anything to you about 

22 the events which led to his removal fr^m the NSC Staff? 



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1 A Only in very oblique terms, sir, in the sense th^f. 

2 they don't understand, you know, emotional terms, how many 

3: thousands ot people are yoimj to die because tlie program is 

j 

4! going down the tubes. He has never talked about specifics. 

Si Comments about the reporters being outside his house all the 

! 

6 I time. He is sick and tired of the reporters, how he is beiric; 

I 
I 

7j sold down the river by the White House, comments like, guys 

81 that he said were real close friends are really trying to 

9 1 stii:k it to me now, things of that nature. 

10 1 Q Did he ever tell you anything specific about his 

111 activities on behalf of the Contras? 

I 

I 
12 i A I cannot remember him saying anything about 

131 spe<:ific things that he had done on behalf of the Contras. 

14 It was always in sort of the general, generic, "we serit," "we 

15 were supporting then," "we were doing so well," this type of 

16 thing. I don't recall hitn ever coming up and saying, "I did 

17 this," or "I was trying to do that," or something like that. 

18 Q Has he said anything about whether he was acting 

19 on his own or whether he had approval for his actions by one 

20 of his superiors? 

21 A Again, only ^n very a*»liqu#^-%«r«8 . He said, -^'^eai t 

22 until I talk, and so*e h«*d3 are.^Bftlly g<si*»g to roll. Wait 



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I until I talk, and they will see how it really was." 

? Q Did he say anything to you about his involvement 

3 in the Iran arms initiative? 

4 A No, sir. I think that I probabJy sort oC pissed 

5 him off because, again, we are talking about an article in 

6 the paper. This would have been back in January. Agajn, 

7 about the amateurishness of it. I made the comment to him, 

8 something to the effect that, you know, when did you become a 

9 Middle East expert. He took it personally, as I suppose I 

10 meant it to be taken. 

11 At any rate, he has never -- he has never talked 

12 about that. He knows about my familiarity with the Central 

13 American region, when he has talked, again, in very generaJ 

14 terms about that. But he has never talked about his trips to 

the businessj^^^^^^^^l^H the 

16 coB«ent was when Kir's picture appeared in the newspaper. 

17 MR. FLYNN: Nir? 

18 THE WITNESS: N-i, I am sorry, N-i-r. He said 

19 look at this joker, he has got his own press agent. Maybe 

20 that's what I ought to do. Again, he made sort ot macabre 

21 remarks about maybe I ought to go have to me what Casey had 

22 done, take my brain out, and leave me alone. But, no. 



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1 nothing spftcific about Iran, in the Middle East. 

2 BY MR. BARBADORO: 

3 Q Has he ever said anything to yt)u about his 

4 relationship with former Director of Central Intelligence 

5 Casey? 

6 A Only aga'-in in oblique terms. He has made the 

7 comment a couple of times that "if they only knew what old 
fl Casey knew." I think those are almost his exact words. 

9 Q What was the context in which he said that? 

10 A Both times it was in regard to a newspaper 

11 article. One of them -- now I remember. One of them was the 

12 confirmation hearings or the beginning of the confirmation 

13 hearings for Gates. 

14 Q The other — 

15 A I can't recall what the article dealt with. Oh, I 

16 . remember now. It was the article on Klliot Abrams. 

17 Q What article was that? 

18 A The one in the Washington Post that said Klliot 

19 Abrams had met with North and another individual that was nor 

20 identil:ied in order to brief the then new ambassador of Costa 

21 Rica about the opening of the southern front. 

ZZ Q What prompted him to mention Casey when referring 



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1 t-o that drticie? 

2 A I had made the comment that the third individual, 

3 who was not identified, I said, I know who that is. Oh, [ 

1 think I am pretty sure I know who that is, and did Casey ?end 

Sl it. And that's when he came up with "it only they knew whai. 

i 

6 j o] d Casey knew. " 

7 Q Did he say anything else about Casey? 

8 A He would not confirm or deny my suspicions oc who 

9 it was, the third unnamed official at those meetings. But he 

10 did not say anything more about Casey, no. 

11 Q What prompted him to refer to C:asey when reviewing 

12 the article about the Gates confirmation hearings? 

13 A Because the article, that I had made -- the 

M comment was that the article speculated Gates's involvement 

15 and knowledge of the Iranian/Nicaraguan affair, and how much 

16 he may or may not know and how much Casey may have told him. 

17 I can't recall the exact words of the thing, but it was -- of 

18 the exchange. It was something to the effect that, y'^u know, 

19 I bet Gates knew a lot more than they are indicating and was 

20 probably in Casey's hip pocket or something to that efter.i.. 

21 Then he came out, "if they only knew what Casey knew." 

22 Q In that conversation, did he say anything else to 



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you about Casey or what the Central Intelligence Agency may 
have known? 

A No, sir. If I recall, he went on and made some 
less than complimentary comments about Gates, about being a 
bureaucrat, not an operator, that sort of thing. 

Q Has he ever talked to you about his reiat itjnship 
with Bud McFarlane? 

A Only in very glowing terms. Again, general 
terms. "He was like a father Uo me." He talked to me after 
he visited McFarJane in the hospital, after the attempted 
suicide attempt, and said how bad it had hurt him, and 
obviously it hurt McFarlane's family. 

But as far as specifics about operations -- lot me 
go back, if I may, on the Casey thing. He claims to have 
visited Casey twice in Georgetown Hospital. And the comment 
there was simply that, you know, the old man's a vegetable. 
Nothing that -- except on McFarlane. Again, I had known 
McFarlane while he was in the Marine Corps, so the 
conversation has been somebody of a mutual acquaintance 
rather than any specific relationship while he was at the 
NSC. 

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knew about his activities on behalE oC the Contras or his 
involvement in the Iran arms initiative? 

A IE anything had been said, it would have been more 
with the Contras, because the Iran thing, until it broke in 
the press, I wasn't aware how much North was Involved. The 
Contras I suspected because of the visit in May of '85. In 
fact, I believe I queried him at that time in May of '85, you 
know, who the hell is letting you do all of this, how much of 
this is is McFarlane aware of. Neither question did he 
answer to my satisfaction. 

Q Has he answered that question since that time? 

A No, si r . 

Q What has he told you about his relationship with 
John Poindexter? 

A He really hasn't. He has implied that it was less 
than cordial, as it was with McFarlane, although he has never 
said anything outright derogatory about Poindexter, except 
that he is a very private nan and that he may not have been 
-- he did not say may not, that he was not aware of 
everything that was involved. 




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Q Have you ever met RicharJ Secord? 

A No, si r, I haven ' t . 

Q Have you ever met or spoken with Albert Hakim? 

A No, sir, I have not. 

Q Have you ever met or spoken with Thomas Clines? 

A " I don't believe I have, sir. I may have met him 
once, but I aa not sure. 

Q When would that have been? 

A It was while I was in El Salvador, sir. It would 
have been here in Washington when I came out for 
consultation, but I am not sure. 

Q Have you ever been to Copenhagen? 

A Yea, sir, I have. 

Q When were you in Copenhagen? 

A 1968, sir. 

Q Have you been there since 1968? 



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1 A tio , sir , I haven • t. 

2 ■: Q Have you been to Costa Rica? 
3. A Ye3,3ir,Ihave. 

- 4 Q When were you in Costa Rica? 

5 A The last time I was in Costa Rica, sir, was Ln 

6 February of 1986. 

7 Q What prompted you to be in Costa Rica in February 

8 oC 1986? 

9 A I was -- that was the tiae, during the time I was 

10 a student at the National War Colleije, and I had been 

11 requested by the honorable Mr. Araitage to do a paper on the 

12 impact of U.S. Military Maneuvers in Central America. Costa 

13 Rica was one of the countries that I visited in the course of. 

14 doing the research for that paper. 

15 Q Do you know Robert Owens? 

16 A No, sir, except froM the press. 

17 Q Never met hiM? 

18 A No, air, I don't believe so. 

19 Q Have you ever Met or spoken with former ambassador 

20 Tambs, the former afflbassador to Costa Rica? 

21 A No, sir, I have not. 

22 Q Have you ever Met the former] 



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1 ^^^^^^^^^H who had been referred to in the press da Thomas 

2 CastilJo? 

3 I A No, sir, I have not. Not by that name, anyway. I 

4 have been told that he is sonebody else, and if that is 

5 indeed who he is, then I have met him. 

6 Q We will cjo into that later. Have you ever 

7 negotiated with anybody to purchase or lease land in Costa 

8 Rica? 

9 A No, sir. 

10 Q Have you been involved in any way in the 

11 construction of an airstrip in Costa Rica? 

12 A No, sir, I have not. 

13 Q Have you ever aet or spoken with Thomas Parlow, 

14 the owner of the Danish ship, the Erria? 

15 A Not to ay knowledge, no, sir. 

16 Q Have you ever been involved in any way in the 

17 negotiation for the purchase or leasing of a ship in Denmark? 

18 A No, sir, I have not. 

19 Q Have you ever referred to yourself as "Rob 

20 Olastead"? 

21 A No, sir, I have not. 

22 Q Have you ever referred to yourself as 




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1 "Mr. Olmstead"? 

2 A No, Sir, X have not. 

3 Q ilave you ever held yourseit out to be a 

4 representative of Olnstead Associates? 

5 \ No, sir. 

6 Q Has anyone ever referred to you as any of those 

7 people or as an associate of Olmstead Associates in your 

8 presence? 

9 A No, sir, they have not. 

10 MR. BARBADORO: We will <jo off the record a 

11 second. 

12 (Discussion off the record.) 

13 BY MR. BARBADORO: 

14 Q Ue can go back on. Do you know Robert Earl? 

15 A Yea, sir, I do. 

16 Q Where did you meet him? 

17 A The first time I met him was when we were 

18 classmates at Marine Corps Commandant Staff College, 

19 Quantico, Virginia. 1980. 

20 Q Have you had any contact with him since he was 

21 assigned to the NSC Staff? 

22 A Not while he was on the NSC Staff, no, sir. 



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Q Have you seen him since he left the NSC StafE^ 

A Yes, sir, I see him on a regular basis. 

Q Why is that? 

A He is stationed at Headquarters, Marine Corps. 

Q Doinij the same kind o£ thinij that Lieutenant 
Colonel North is doing? 

A Yes , sir. 

Q Have you talked uith him about his -- strike 
that. Have you talked with him about the events that led to 
his removal from the NSC Staff? 

A No, sir. He has informed me that he won't talk 
about it at all. He is even more taciturn than North. 

MR. 8ARBAD0R0: That's all I have. Thank you. 
(Whereupon, at 9:55 a.m., the deposition was 
concluded. ) 



JOHN C. MC KAY 




AcETEDERAL"REroTfrERS. Inc 

202-147-1700 Nanonwide CoveraK S0t)-nfr(l(l4ft 



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CERTUgcJraf i»riM1ig*J wmitc s reporter 

26 

I, WENDY S. COX j_ the officer before 

whom the foregoing deposition was taken, do hereby 
certify that the witness whose testimony appeeurs in the 
foregoing deposition was dtily sworn by rae; that the 
testimony of said witness was taken in shorthand auid 
thereafter reduced to typewriting by ae or under my 
direction; that said deposition is a true record of the 
testimony given by said witness; that I am neither counsel 
for, related to, nor employed by any of tho parties to 
the action in which this deposition was taken; and, further, 
that I am not a relative or employee of any attorney or 
counsel employed by the parties hereto, nor financially 
or otherwise interested in the outcome of the action. 



Notary Publi^ in and for the 
DISTRICT OF COLUMBIA 



My Conmission Expires 
November 14, 19 87 



UNCLASSIFIED 



775 



TRANSCRIPT 
OF PROCB 




UNITED STATES SENATE 

SELECT COMMITTEE ON 

SECRET MILITARY ASSISTANCE TO 

IRAN AND THE NICARAGUAN OPPOSITION 



0Z-VDOS/^ 



DEPOSITION OF JANE E. MCLAUGHLIN 



DNtlh^P 




Washington, D. C. 
Thursday, April 16, 1987 



Ace-Federal R eport ers, Inc. 

Sttnotvpt Kfporttn 
444 North Capitoi Street ^^M 
Washington, DC. 20001**** 

(202) 347-37D0 
Nationwidt CowTJigt 

800-336-6646 



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UNITED STATES SENATE 

SELECT COHHITTEF ON 

SECPET f'lLITAPY ASSISTANCE TO 

IPAN AND THE NICAPAGUAN OPPOSITION 

PEPOSITION OF JANE E. MCLAUGHLIN 

Washinaton, D.C. 
Thursday, Aoril 16, 1987 
Deposition of JANE E. MCLAUGHLIN, called for 
examination pursuant to subpoena, at the Hart Senate Office 
Puildino, Suite 901, at 9:55 a.m., before Michael G. 
Paulus, a notary public in and for the District of 
Columbia, when were present on behalf of the respective 
parties: 

TIMOTHY WOODCOCK, ESQ. 
W. THOMAS McGOUGH, JP . , ESO. 
Associate Special Counsel 
United States Senate Select 
Connittae on Iran and the 
Nicaraguan Opposition 

- continued - 



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UNCLASSIFIED 

THOMAS FRYMAN, ESQ. 

Assistant Majority Counsel 

KENNETH P. PUCK, ESO. 

Assistant Minority Counsel 

United States House o£ Representatives 
Select CoiBinittee to Investigate 
Covert Arms Transactions with Iran 

HARVEY p. COHEN, ESO. 

FRANK W. DUNHAM, ESO. 

1400 N. UMe Street 

Arlington, Virginia 22201 



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WITNESS 

Jane E. f'cLauohlin 
Py ^"r. Woodcock 

NUF«PEP 
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CONTENTS 
EXAMINATION 



EXHIBITS 
IDENTIFIED 
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M 01 01 
irikepaulus 1 PROCEEDINGS 

2 Wheceupon, 

3 JANE E. f^cLAUGHLIN 

4 was called as a witness and, havina been first duly sworn, 

5 was examined and testified as follows: 

6 EXAMINATION 

7 BY HP. WOODCOCK: 

8 Would you state your name for the record and 

9 spell your name, please? 

10 A Jane Esther f«cLauqhlin, W-c-L-a-u-q-h-l-i-n. 

11 ^'s. f*cLauqhlin, I am Tim Woodcock, and I am here 

12 I representina the Senate Select Committee, with me is Tom 
I 

13 McGouQh, who also represents that Committee. We are here 

14 in our official capacities as associate counsel for the 

15 Committee. The Connlttee is engaged in an inquiry in which 

16 your testimony has been deemed helpful and material. 

17 Therefore your testimony may well become a part of the 

18 inquiry of this Committee and you should be aware of that. 

19 Also here, on behalf of the House, are Tom 

20 Fryman and Ken Buck. They are also here pursuina their 

21 Committee's mandate, and this an official inquiry from 

22 their perspective as well. 



UNCLASSIFIED 



ArF-FFPFRAi Rfpc 



781 



Kussra 



1 01 01 
mikeoaulus 1 Ms. McLaughlin, let me start out by takinq you 

2 bacl« in time and have you describe for the record the 

3 circumstances under which you joined the Channel 1 aroup. 

4 A Do you want me to start at the beoinnino? 

5 Yes. 

6 A When I was first interviewed, which was around 

7 December 19, by Dan Conrad in the Hay-Adams Hotel, I had 

8 learned about the American Conservative Trust from Steve 

9 whitener of the Leadership Institute. I was told that the 

10 American Conservative Trust was looking for fund-raisers 

11 and that they had another organization that did a lot of 

12 work of Nicaragua and SDI. Being that these were my two 

13 areas of major Interest and concern, I pursued it. 

14 I was interviewed by Dan Conrad, the executive 

15 director. He was very impressed with my background. Put 

16 he did tell n« in no uncertain terms that Spitz did not 

17 b«liev« women could raise money; he would have to work on 

18 that; and he would get back to me. 

19 I kept after him, and I was finally hired on 

20 about January 10 and told to start January 15, which I did. 

21 When you started, Ms. McLaughlin, what was your 

22 title and what were your responsibilities? 



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A My title was project director, which is just a 
fancy name for a fund-raiser, and my responsibilities were 
to raise as much money as possible for a proaram about to 
be launched called the Central American Freedom project. 

Having received these responsibilities, what did 
you do? 

A I was given a list of names, supplied to me by 
Dan Conrad. I worked from what was called the senatorial 
trust list. 



Do you know where that list came from? 

I never asked. 

What did the list consist of? 

The names of all the members of the senatorial 





A 



A 
trust. 

C Th«8« were prospective donors; is that correct? 

A Yes. We were looking at them as prospective 
contributors to our projects. I would call these people. 
Initially I was told that the Central American Freedom 
program would be launched by the Prssidsnt at a private 
meeting in the White House, and we were looking for a 
select group of people to finance the project and to come 
to Washington to participate in this meetina. 



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Were you given a date for the meetino? 
- A No. We were told it was going to be the end of 
January. We were waiting for confirmation of the date by 
the White House. 

Then what happened? 

A I called people and I raised money. Lots of it. 

Were you given any particular figures to ask for 
in soliciting people for this January meeting? 

A Yes. A minimum of $30,000. We were told to 
explain to these people that this project was going to 
involve a S2.5 million budget and that we wanted to have 
raised the first million so that we could launch the 
campaign in all the key media markets across the country. 
This involved television advertising and a speakers tour. 
That the vote was coming up in March, and that it was 
imperative to launch this educational and informational 
coipaign to rally the support of the American people for 
the President's policies in Central America. 

Let me ask you to expand on a couple of things 
you said. 

Could you describe generally the purpose of the 
Central American Freedom program for the record? 



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81 01 01 

mikepaulus 1 A Would you llk« me to describe what were the set 

2 forih objectives or what I believe the objectives of the 

3 program were? 

4 Why don't we start off with what you were told 

5 the objectives were? 

6 A You have a copy of the objectives in the 

I 

7 documents. It was basically to educate and inform the 

8 American people on the threat of communism in Central 

9 America and to rally their support for the President's 
i 

10 1 policy to aid the freedom fighters of Nicaragua. It was 

11 done with television, spot messages that were placed in key 

12 I media markets. We were told to tell the people that they 

1 

13 were key media markets. What they were were congressional 

14 opposition districts. 

15 Can you describe what you mean by a 

16 congressional opposition district? 

17 A A district where a Congressman or a Senator is 

18 opposed to the President's policy In Central America. 

19 You also mentioned that this program involved a 

20 speakers tour, what was that? 

21 A The speakers tour consisted of people who worked 

22 very closely with UNO and could speak on behalf of the 

I 




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United Nlcaraguan Opposition. 
- That is UNO? 
A Yes. 

They were sent around the country to some of 
these opposition congressional districts to address local 
auxiliary groups, reliaious groups, civic groups, and be 
interviewed by the local newspapers and radio stations, to 
generate editorial support. 

You also referred to the vote coming up. will 
you state for the record what vote that was as you 
understood it? 

A The vote on the President's military aid 
package, SlOO million to the freedom fighters of 
Nicaragua. It was scheduled for March 20. 

This is all 1986? is that correct? 
A Yea. I started in January 1986. 
MP. WOODCOCK: Off the record. 
(Discussion off the record.) 
MP. WOODCOCK: On the record. 
BY MP. WOODCOCK! 
Did this meeting in January that you referred to 
earlier actually take place? ||i|A| AOdClCn 

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A Yes, it did. January 30th. 
- What happened at that meeting? 

A We went into the Pooaevelt Room of the white 
House with approximately 15 to 20 contributors. i will 
tell you everyone that was present to the best of my 
recollection. David Fisher; Plch Miller; Ken Oilman, who 
was Dan Conrad's friend; Eric Olson, who was Spitz' friend; 
Elleanor McManus, Spitz' aunt; Spitz, Cliff, Dan, Jane, and 
Kris. 

When you refer to these names, could you aive 
the entire name for the record? 

A Spitz Channell, Dan Conrad, Cliff Smith, Jane 
McLaughlin, and Kris Littledale. None of the support staff 
was present. 

To put each person in his own category. Spitz 
Channell, Dan Conrad, Cliff Smith, Kris Littledale, and 
Jane McLaughlin all worked for the Channell group; is that 
correct? 

A Yet. 



David Fisher is associated with IBC; is that 



right? 



UNCLASSIFIED 



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H 01 01 
mikepaulus 1 Are Pichard Miller and Frank Gomez also 

2 associated with IBC? 

3 A Yes, but Frank Gomez was not present at this 

4 meetina. 

5 j Who do you recall from the Administration was 

6 present at this? 

7 A Linas Kojelis, special assistant to the 

8 President; Linda Chavez; Elliott Abrams, under secretary of 

9 State for Latin American Affairs; Donald Peqan, chief of 
10 staff; Lieutenant Colonel Oliver North of the National 

,, 11 1 Security Council; and the President. That's it. 

12 Could you describe how the meeting proceeded? 

13 A It started with some opening comments by Linas 

14 Kojelis. He welcomed the group and applauded our efforts, 

15 and Linda Chavez said a few words. Elliott Abrams said a 

16 f«w things. Lieutenant Colonel Oliver North spoke for 

17 mayb* 15 or 20 minutes and showed some slides. Then the 

18 President came in and addressed us for about a half an 

19 hour, applauding this organization's work. It was 

20 basically a pep rally. 

21 When you say this organization, which 

22 organization? 



UNCUSSiFIED 



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81 01 01 -IT" » vi-f iWVII fUU 12 

mikepaulus 1 A The National Endowment for the Preservation of 

2 Liberty. 

3 Then we had our photograph taken with him. 

4 Did the Administration figures describe what 

5 they felt the National Endowment for the Preservation of 

6 I Liberty was doing? 

7 A Educating and informing the American people on 

8 the threat of communism in Central America. 

9 Were they all saying this, or were just some of 

10 them saying this? 

11 A For the most part they were all saying this. 

12 There was no deviation from that basis. 

13 Following the meeting in the Roosevelt Poon what 

14 happened? 

15 A we went back to the Hay-Adams Hotel where our 

16 contributors were staying. 

17 Let me back up. I have got a guestion from Tom 

18 Fryman. 

19 While these presentations were going on by the 

20 Administration figures were the 15 to 20 contributors you 

21 described also present? 

22 A Yes. They sat at a very long table. I don't 



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mikepaulus 1 know if you have ever been in the Roosevelt Room, but it is 

2 a v«ry Intimate room. Long table with leather chairs. 

! 

3 It's very comfortable.' And they all sat around the table, 

4 the contributors. 

5 Were they present throughout? 

6 A Oh, yes. The purpose of the meetina was to have 

7 them there. 

8 Let's return to the period immediately following 

9 the tneeting at the Roosevelt Room, what happened then? 

10 A We returned to the Hay-Adams Hotel and we had a 

11 brief period for the contributors to return to their roons 

12 and freshen up, because we would be having a very lavish 

13 private dinner. 

14 When you say we returned to the Hay-Adams, who 

15 returned to the Hay-Adams? 

16 A The contributors and the staff. 

17 Th« staff of the National Endo%<nient? 

18 A All the staff members that were present at the 

19 meeting. We all returned to the Hay-Adan»« Hotel. 

20 Do you want me to name those people? 

21 The National Endowment for the Preservation of 

22 Liberty staff all returned: is that correct? 



ONfliSSlEIED... ,. 



790 



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u 01 01 Uliui-nuuii ikft/ 14 

mikeoaulus 1 A Yes. 

2 - How about people like Pichard ^'lller? 

3 A I don't think they caine back to the hotel, but 

4 they came to the dinner afterwards. 

5 So this group adjourns to the Hay-Adams and 

6 there is a period when they fresh up. What happens next? 
?! A We have dinner. There was a cocktail time prior 

8 to the dinner. The guest list was very long. There were 

9 people there that I didn't even know, but I was asked to 

10 recognize them later on from photographs that had been 

11 taken. There was a photographer milling about throughout 

12 the dinner and cocktail party. 

13 IBC was present: Rich Miller, Frank Gomez, Steve 

14 Schwartz; I think Jackie Clemens was there; and Jeff 

15 Keffer; and all of IPC. 

16 Penn Kemball was there; Bruce Cameron was there; 

17 Bob Goodaan and Adam Goodman of the Goodman Agency, who 
16 produced our television messages. 

19 There were a couple of ambassadors there. 

20 Ambassador Sorzano of the Cuban American National 

21 Foundation was a guest of mine; The Costa Pican 

22 ambassador. I can't remember his name. And two other 



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mikepaulus 1 ambassadors. Just people that we invited. We invited a 

2 lot-of congressional people. That was the niaht, I think, 

3 of the CPAC dinner. So everybody was over at that. 

4 Congressional types were over at that, so they didn't core 

5 to our dinner, unfortunately. 

6 Ollie North was there and addressed us, just to 

7 pretty much reiterate what had already been said but to 

8 really rally the support of the people in this room to give 

9 as much as possible to really see this program through to 

10 its success. 

11 Mario Calero was there. I think he said a few 

12 words. 

13 No references whatsoever to direct military 

14 support. Afterwards things got a little different, but 

15 during the dinner it was very much on the up and up. 

16 You recall Lieutenant Colonel North making a 

17 statement and perhaps Mario Calero right? 

18 A I think he said a few words. I think he said 

19 hello or thanks for all your help. 

20 Did anyone else make a presentation? 

21 A Pich Miller, Adam Goodman and Pob Goodman. 

22 Elliott Abrams was there. He and Ollie both came over. I 



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don't think Elliott stayed for dinner, and I am positive 
Ollle didn't stay for dinner. But they spoke. And Spitz, 
of course. Fawn was there. 

Fawn Hall? 

A Yes. 

Who was present amona the 15 or 20 donors at 
this dinner at the Hay-Adams? 

A You want to know the contributors' names? 

Yes, as you can recall. 

A Tom Clagett, Hooper, ^^^^^^^^^^Hl 
Mr. and Mrs. John Pamsey. 

Do you want to know where these people are from? 

That's not necessary. 

A Ellen Garwood; 
the late 
How many do we have? 




|Fr..;i<: 




I am placing them around the table in my mind. 
I will keep thinking about It. I think there is somebody 



missing. 




I just remembered that. 



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All these people that you just named were also 
present in the Poosevelt Poom; is that correct? 

A Yes. 

I have photographs of the meetinq, I am waitina 
for them to be returned to me. They were borrowed by ABC 
when I did an interview with them. 

Did you have any responsibilities or obligations 
during this follow-up dinner? 

A Yes. 

Were there any particular people you were 
supposed to seek out? 

A My two contributors were Palph Hooper and| 

What did you do with respect to those two 
people? 

A My reaponsiblllty was to extract as much money 



from them aa possible. 



presented me with a 



check as w« were leaving the White House. Palph Hooper 

was pretty much taken 
from me at the meeting as far as further solicitations. 
Because Dan had done a check in ^H^^^^^^| on Washington 
On-Line and found out that he is very politically active 



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with the conservative side of politics and reported that to 
Spitz, and Spitz then took ^H||from me and talked to him 
hlmsel f . 

So you were left with Mr. Hooper? Is that riaht? 

A Yes. 

After ^^^^^^^^H gave you the check did you 

take a look at It and see how much he gave? 

A S30,000. 

How much did Palph Hooper aive when he sent his 
in? 

A S30,000. 

Following the dinner at the Hay-Adams was there 
any activity, or did that close the evening? 

A That pretty much closed the evening for me. 

Oh, I forgot about ^^^^^^^^^H I think he was 




He was definitely 



at the dinner. Yes, 

there. He was at the meeting and the dinner. 

You said that the close of the dinner closed the 
evening for you. Did it continue for others? 

A 



I believe so. I think it continued ^o^^HH 
and Kris Littledale and Spitz, because I'm positive 



the following day 



met with Ollie crivately 




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one on on« 



- That would be Lieutenant Colonel North? 

A Yes. 

How did the meeting following the dinner with 
Kris Littledale, Spitz Channel and U^mm come to 
your attention? 

A I think Kris told me. It was ouite obvious what 
Spitz was trying to accomplish after the dinner. He tried 
to w i t h I^^^^^^^^^^H but ^^^^^^^^^^H had 

to leave that evening. He didn't even stay for the entire 
dinner. 

when I say trying to accomplish, I will explain 
that. Spitz would go for the jugular. He would determine 
that a contributor had a lot of money and could give a lot 
of money to our cause, and he would just beeline for them 
and find out whether they were potential Toys contributors, 
find out their level of interest in direct assistance to 
the freedom fighters. Often times he didn't even go that 
far. He would just encourage then to meet with Lieutenant 
Colonel Oliver North to discuss the needs of the freedom 
fighters. That would lend the credibility that he would 
need to get money. 

You've covered a lot of ground. Let me back you 



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up and parse that a littl« bit. 

You had described Spitz Channell's approach to 
individual contributors. You are speaking now aenerally; 
is that correct? 

A Yes. 

That was based on your association with Spitz 
Channell over the course of a year; is that correct? 

A It became very obvious to me after a few weeks. 
What exactly is your Question? p 

Let me aet down to the Question of ^m|^^^| 
I am taking you back In time just to that evenino; you 
haven't had your future experience with the Channel 
organization. 

How did you know at that time what Spitz 
was doing ^KhH^^^^^m 

A I wag told by Dan and Cliff and Kris that this 
la how Spitz operated. I was told this from day one, that 
w« would baalcally find the fish and bring them to him and 
then he would take over, because he had the ability to 
extract much larger sums of money than we would, and that 
he would be meeting privately with the contributor and 
Colonel North; it would never be the fund-raiser. But 



UNClASSlFifJ 



797 



UNCLASSIFIED 



21 



Jl 01 01 

mikepaulus 1 th«re was an exception made to that, as you will learn 

' ■ 2 I lat-er on. , • 
i 

3 After the dinner I can see it in my mind as 

4 clear as day. Everyone had pretty much left the dining 

5 room and had gone home or gone to their rooms and Spitz was 

6 continuing to talk to ^^^^^^^^^^1 privately , and Kris 

7 I Littledale. I am 99 percent positive that the following 

8 day^^^^^Hmet with Colonel North privately. 

9 Now I am going to ask you step back even further 
' " 5 10 I in time. 

11 ! Before the dinner at the Hay-Adams and before 

12 I the Poosevelt meeting, you just said that you were given a 

I 

13 I description of Spitz Channell's modus operandi by Cliff and 

14 : Dan Conrad and Kris Littledale. That followed, I gather, 

15 I shortly upon your coming on boardj Is that right? 

16 A Y«s. 

17 So before you even got to this dinner at the 

18 Hay-Adaaa you already had a prior understanding as to how 

19 Mr. Channell operated; Is that right? 

20 A Yes. 

21 Did they also describe this relationship between 

22 Spitz Channell and Lieutenant Colonel North? 



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A No. It was never described to me. I was never 
toUl how it came about. To this day I don't know when they 
met or how they met. .. - ^ 

I am not talking about that. I am talking about 
that there was a relationship. Not how it evolved, but 
that there was a relationship. 

A In fact, I probably learned that my second day 
on the job, because we have a tape of a conversation I had 
with Ralph Hooper. I was in the process of inviting him to 



PrW 



this dinner and he — it wasn't Ralph Hooper. It was ^^H 
f^^^f. This contributor who didn't come and didn't really 
contribute anything asked who was behind this, and I didn't 
know. I kept saying we're working very closely with the 
President, because this is what I was told. You can tell 
on the tap* that I don't know. 

I put the man on hold. I'm in the same room 
with Kris Littledale, because we raise money toaether. You 
can barely hear Kris, but you hear me asking, well, what am 
I supposed to tell him? who are we working with? What 
names am I supposed to give him? Kris told me to say 01 lie 
North, Colonel North at the NSC. And I get back on the 
phone and I say this to this man. Then I was later told 



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never to do that again, that that was not to be discussed, 
ever. 

Was that your first understanding that there was 
a relationship between the Channell group and Oliver North? 

A Yes. 

And that is within two or three days of your 
coming on board? 

A It would have been like the second day. 

Another ten days or so goes by before the 
meeting on January 30; right? 

A Right. 

Did you then in that interim period get more 
information about the Channell group's relationship with 
North? 

A No. Not really. There are comments made, 
refer«nc«« mad*, but I don't put It into perspective until 
February when we set the stage for a private meeting with 
Colonel North. It is really not until February that I 
become familiar with the Toys project. 

On the subject of your phone call with 

I, you placed him on hold and you turned to 
Littledale for some guidance and he gave you the 



!!i'f)iii<:<:iF!Fn 



800 



UNCIiSSIR 



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31 01 01 

mikepaulus 1 information on North. You then testified that you were 

2 told subseauently never to do that again. 

3 A Yes. Because we relayed the conversation back 

4 I to Spitz. ' ■ 

5 I wasn't certain that Kris really knew that this 

6 is what was to be said, because he hesitated. But this man 

i 

7 I was pushing me for names and I didn't know what to tell 

8 I him. Spitz said if they want to know have them call me but 

9 do not discuss our relationship with Ollie North to any 

10 prospective contributors and never talk about him over the 

11 phone. 

12 Then, a couple weeks later I learned ~- I can't 

13 remember exactly when, but it would have been after the 

14 meeting — I would have heard reference to Green prior to 

15 the meeting, in the two weeks that I was there. Reference 

16 to Green was made from day one. I didn't really come to 

17 fully understand who Green was or what Green was until 

18 about February. - ' ^^'■■ 

19 We'll get into that In just a minute. 

20 MP. COHENS I don't think you have established 

21 for the record what or who Green is. ^-: 

22 MP. WCX3DC0CK: We haven't, but we will. 



JlllA.'jjaFiFn 



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UNCUSSIFIED 



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.81 01 01 

mikepaulus 1 | BY MR. WOODCOCK: 

2 I - Green was a code name for North; right? 

3 j A ■ Yes. 

4 I I gather this conversation on whether you were 

5 supposed to use the reference of North or not was with 

6 Spitz Channell himself. 

7 I A Yes. 

8 I Was that between you and Kris and Spitz 

9 i Channell? 

10 A It might have been just between Spitz and ire. 

11 Returning to the matter of Mr. Channell's 

12 solicitation of ^^^^^^^^|, in watching that go forward 

13 j you had in your mind, I gather, this prior information that 

14 you were told by Dan, Cliff and Kris. 

15 A Yes. 

16 Then you also testified that you are 99 percent 

17 sure that ^^^^H had a meeting with Colonel North the 

18 following day. Could you tell us on what you base that 

19 assumption? 

20 A I an pretty sure Kris told me. Kris Littledale 

21 and I were pretty close. In the beginning we were the only 

22 fund-raisers. Cliff and Spitz raised money, but Cliff had 



DIMCin rn 



802 



ONCUlSSIflEa 



)1 01 01 ' "--' 26 

mikepaulus 1 a orivate office and Spitz was never in the office. He 

2 worked out of his home. So it was just Kris and I working 

3 together. 

4 Let me back up now to the subject of Lieutenant 

5 Colonel North and the use of the code name Green, when did 

6 you first come across the use of the term "Green"? 

7 A Reference was made to it from day one. I can 

8 recall references being made to the Toys project and 

9 Green. I may have even asked in January. I don't recall 

10 really knowing until February. 

11 Let's proceed to that point. In February you 

12 begin to get a greater understanding of the meaning of the 

13 term "Green." How does that come about? 

14 A We are in the process in early February of 

15 setting up a meeting with Colonel Morth, who was code named 

16 Green, a private military briefing, and we would be sending 

17 out MallgraBS, which were subseauently sent on the 10th of 

18 February. Kris pretty much explained it all to me. I 

19 remember being told by Kris that we were the organization 

20 working directly on behalf of the President and his 

21 policies in Central America, providing direct military 

22 support to the freedom fighters until Congress made up 



UNCLASSIFIED 



803 



UNCLASSIFIED 



27 



1 01 01 

mikepaulus 1 their mind. 

2 - That conversation occurred some time in 

3 February; is that right? 

4 A I am going to go with February. There is only 

5 j one thing that makes me think that maybe something was said 

6 but that it wasn't fully explained to me prior to February, 

7 and that is a telephone conversation that I had with Ralph 

8 Hooper in inviting him to the white House meeting on the 

9 30th. We have a tape of the conversation. He makes a 

10 conunent: "Is this money to buy arms?" I said, "No, 

11 absolutely not," and he said, "Because I'm not against that 

12 either." 

13 I remember when we had to send the tape over to 

14 Spitz' house, because it was my first score. I got 30 

15 grand. My third phone call. Kris said, "I can't believe 

16 he said that. That's really good that he said that. 

17 That's going to be important later on." 

18 I think I later learned what he was referring 

19 to. So some reference was made, but it was not fully 

20 explained. I didn't come to terms with what it was all 

21 about until February. 

22 So the Hooper conversation takes place some titr^e 



UNCLASSIFIED 



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before the meeting on January 30; correct? 
- A Yes. 

Then some time after the meeting on January 30 
you and Kris Littledale have this discussion about how the 
Channell network interacts with Lieutenant Colonel North; 
is that correct? 

A Yes. 

That conversation would have taken place no 
later than February; is that correct? 

A Absolutely no later than February. 

Let's go back to that conversation. How did it 
happen that that conversation came about with Kris 
Littledale? 

A I think we had been told that we were going to 
be having a briefing, and since Kris and I spent so much 
time together Kris talked to me about it. He had been to 
previous briefings in late 1985. Because Kris had been 
there since August 1985. So he told n«« what it was all 
about. 

Recount that conversation. If you would, please. 

A He would tell me that we were working directly - 



He did tell you? 



UNCLASSIFIED 



805 



UNCLASSIFIED 



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n 01 01 

mikepaulus 1 A Yes. 

2 I - Do you want me to repeat what I just said? 
I 

3 Yes. 

4 A That we were the organization working directly 

5 on behalf of the President and his policies in Central 

6 ! America to provide direct military assistance to the 

7 j freedom fighters until Congress made up their mind, and it 

8 ' was crucial to keep this very ouiet: if the liberals were 

9 to find out about the Toys project it would destroy the 

10 policy all together; it was up to private citizens to pick 

11 up the slack until Congress came to terms with the arowth 

12 of coiranunism in Central America. 

13 Kris told you that it was important to keep this 

14 auiet and explained that if the liberals found out about 

15 the Toys project they would destroy it; is that right? 

16 A Kris said it. Cliff said it. Spitz said it. 

17 I an concentrating on Kris right now. 

18 Did he explain to you at the same time what Toys 

19 meant, or did you already know what Toys meant? 

20 A The Toys referred to the project to provide 

21 direct military assistance to the freedom fighters. 

22 I am asking a little different Question. Did he 



JINCUSSIFIED 



806 



WUSSIf/fD 



30 



il 01 01 

mikepaulus 1 tell you what Toys meant during that conversation? 

2 - A Yes. 

3 Could you then qo on and describe how he 

4 described his understanding of the Toys project? 

5 A A project working directly on behalf of the 

6 , President and his policies in Central America to provide 

7 j direct military assistance to the freedom fighters of 

8 Nicaragua until Congress made up their mind. 

9 That was his description of Toys; correct? 

10 I A Yes. 

I 
I 

11 In that conversation did that explain to you his 

12 earlier reaction to your description of Hooper's 

13 willingness to give money for arms, or did you already have 

14 an understanding before that? 

15 A This explained more. 

16 Did he bring up the Hooper conversation? 

17 A I don't recall. I'm sure we talked about it. 

18 He may have suggested that I send Palph a Mailgram. 

19 1 gather that at the sane time he fully 

20 explained to you the use of the term "Green"; is that 

21 right? Or did he have to at this point? 

22 A He didn't have to. I understood all of it by 



yNClASSIRED 



807 



UNCLASSIFIED 



31 



Jl 01 01 
mikepaulus 1 then. The way this office worked -- you may not fully 

2 i understand this, because you didn't work there. Everything 

3 that we came to know was often implied. I would tell you 

4 something but I would not tell you in very specific terms, 

5 1 but you would come to understand by the intonation in my 

6 I voice, etc., etc. Oftentimes things would be said through 

7 I Dan or through Cliff that were actually the words of 

8 Spitz. Cliff was Spitz' appendage. If Cliff said 

9 something, it was coming directly from Spitz, and Dan and 

10 Kris pretty much worked the same way. 

11 Let me back you up to your discussion with Kris 

12 Littledale. 

13 Did Kris himself, notwithstanding that you may 

14 have already understood this, explain to you during that 

15 conversation how Green related to Lieutenant Colonel North 

16 and how North related to the Channell organization? 

17 A It was explained to me that Green was the code 

18 nam* we used for Colonel North in conversations among 

19 ourselves, on the phone, in the office. We were never to 

20 refer to Colonel North as Colonel North over the phone; it 

21 was imperative that we keep this relationship very auiet; 

22 if it were to be found out by every Tom, Dick and Harry, it 



ONCUSSinED 



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11 01 01 
mikepaulus 1 
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UNCmflED 



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could really g«t in the way of the objectives of the Toys 
project and our work on behalf of the President. 

From that day forward I referred to Ollie as 
Green. 

f*9. DUNHAM: Jane, did you understand that 
^»r. Woodcock was asking you whether or not this explanation 
of the need to refer to Colonel North as Green, that he 
wanted to find out whether or not that explanation occurred 
during the same conversation when Littledale was explaining 
the Toys project to you? 

THE WITNESS: How can you expect me to remember 
the complete conversation of a year ago? 

MR. DUNHAM: We understand that. If you don't 
recall, just say you're not sure. 

THE WITNESS: I learned these things from Kris. 
I don't renember if they were in the same conversation. 

MR. WOODCOCK: Let's go off the record for a 



minute. 



(Recess. ) 

MR. WOODCOCK: Back on the record. 

BY MR. WOODCOCK: 

Let's turn now to Dan Conrad. You said earlier 



Inc 




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: 1 01 01 

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UNCLASSIFIE 



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that Dan Conrad also gave you information on Toys and on 
the -Green relationship. Could you tell us how that came 
about? 

A I don't know what you mean by that. Do you mean 
when did he talk with me? 

What is your earliest recollection of Dan Conrad 
bringing this to your attention? 

A In the beginning of the year, in February, when 
we were preparing for our military briefing with Colonel 
North. 

How did that happen? 

A How did my conversations with Dan happen? 

Right. 

A He would address me on what we were preparing to 
do. 

What would he say? 

A Den didn't say nuch at all in reference to the 
Toys project or Green. He would ask me how things were 
going in getting people here for the briefing. He did not 
go into detail about Green or the Toys project. Kris for 
the most part did, with me. I spent most of my time with 
Kris discussing the Toys project, what we were trying to 



UiMSSIFIED 



810 



uNtmsro 



34 



n 01 01 

mikepaulus 1 do, how w« w«re to screen potential contributors. Soitz 

2 wouid sometimes sit down with me and helo me to develop a 

3 strong solicitation in screening contributors. Sometimes 

4 Cliff would talk to me about how to do so. 

5 1 want you to go back to the Question of Dan 

6 Conrad. Did Dan Conrad every talk to you in specific terms 

7 about Toys or Green? 

8 A Yes, he did. I don't recall when. I don't 

9 recall exactly what he said, but among the five of us we 

10 all discussed the Toys project and Green. Sometimes in 

11 very general terms, sometimes in very specific terms. 

12 So it is your testimony with respect to Dan 

13 Conrad that you remember that he mentioned these topics to 

14 you but you do not remember the substance of his 

15 conversation beyond the topic; is that correct? 

16 A Yes. 

17 You also mentioned Cliff Smith as somebody who 

18 would raise the auettion of Green or Toys. What is your 

19 earliest recollection of having such a conversation with 

20 Cliff Smith? 

21 A I don't recall. I didn't spend a lot of time 

" ™'-- UNCLASSIFIED 



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What do you recall at all about your 
corwersations with Cliff Smith on the subject of Green and 
Toys? 

A I remember him congratulating me when I 
succeeded in getting Bill O'Boyle here and Bill O'Boyle in 
turn gave 5130,000 and had met with Ollie privately. He 
asked how it was going with other contributors, was I 
having a difficult time screening them, was I finding 
contributors who were responsive to what we were trying to 
accomplish. 

Did Smith himself specifically refer to Toys 
during these conversations? 

A Sometimes he would, sometimes he wouldn't. 

Did he explain to you what he meant by Toys? 

A No. 

MR. WOODCCXTKs Off the record. 
(Discussion off the record.) 
MR. WOODCOCK: Back on the record. 
BY MR. WOODCOCK: 

Ma. McLaughlin, what kind of Instructions were 
you given with respect to the Toys project and soliciting 



contributors? 



ONCLASSIFIED 



812 



UNCLASSIREO 



36 



<J1 01 01 
mikepaulus 1 A I was instructed to contact prospective 

2 corrtributors to the Central American Freedom Program and 

3 that would act as the front, I guess, in some ways to the 

4 Toys project; I would talk to these contributors and I 

5 would be able to determine just in the course of the 

6 conversation whether they were really angry that Congress 

I 

7 I was not taking a positive stand and supporting the 

8 President; you could just determine by the things that they 

9 would say that this person was definitely a potential 

10 contributor to the Toys project or not; and if they would 

11 make comments that would refer to sending the 82nd Airborne 

12 down there and cleaning out the cancer and killing the 

13 commies or something along those lines, that was to let a 

14 little green light go off in our head, and we would 

15 continue to move them in the direction of that conversation 

16 and really find out whether this person is the kind of 

17 person that would be able to support a project that is 

18 providing direct military assistance to the freedom 

19 fighters in a very secretive sort of way. 

20 Hy two Toys contributors were bill O'Boyle and 

21 Bruce Hooper. 

22 You say you were instructed to go through this 



m mm 



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31 01 01 ^■•*'^flUUII II it 37 

mikepaulus 1 process with these contributors. Do you recall how it was 

2 that you received these Instructions? 

3 A The instructions with regard to the screening 

4 process were provided me by Spitz, Kris, and Cliff. 

5 was this all in a general meeting? Is that how 

6 this comes out? 

7 A No. Kris and I worked in the same area of the 

8 town house together. He would make a call and then I would 

9 make one, and we would help each other make the 

10 solicitations and determine whether people were hot for 

11 this project or not hot for this project. 

12 Usually, the way it worked is Spitz would come 

13 in late in the afternoon and we would all go for drinks, or 

14 he would sit in the office upstairs and we would all come 

15 into the office upstairs and sit around his desk and he 

16 would talk with us about how things went that day, and he 

17 would write notes on a board where you wipe things off. 

18 It's not chalk. And we would receive more instruction from 

19 him at that time. Sometimes I would be uncertain of how to 

20 proceed and I would go back and talk with Kris in his 

21 office and get some instruction from him. 

22 Does that answer your ouestion? 




Cor>0TC05 Lt 



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Jl 01 01 
mikepaulus 1 Up to a point. 

2 ' Before you picked up the phone and called your 

3 first prospective Toys contributor you had received some 

4 instructions on what to do; Is that correct? 

5 A Yes. 

6 From whom did you receive those Instructions? 

I 

7 A The initial Instructions? 

8 Right. 

9 A From Spitr. 

10 Was that done at a group meeting or personally? 

11 A I would have to say it was a group meeting. 

12 Because Spitz and I didn't spend a whole lot of time one on 

13 one until Bill O'Boyle came. 

14 In the pre-0' Boyle era you have a group meeting 

15 with several other Channell employees and Spitz; Is that 

16 right? 

17 A It was always just Spitz and Cliff and Kris and 

18 I, since we were the fund-raisers. 

19 In giving you these instructions on screening 

20 did he also tell you what the Toys project was all about at 

21 that time? 

22 A He never really had to. He would discuss It. 



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He would talk about it in terms of we were the organization 
wording directly — there was a lot of reiteration of that 
— working directly on behalf of the President, working 
very closely with Ollie North to find those very select and 
highly patriotic Americans who would stand up in defense of 
freedom and democracy and provide the financial assistance 
to the Toys project in order to provide the direct military 
support of the freedom fighters? 

Did he use the phrase "direct military support"? 

A Yes. 

Wait. This is the problem that I have had. I 
cannot remember Spitz ever using the term "military." I 
can remember him saying nonhumanitarian assistance, direct 
support. It was Kris and only Kris in the course of the 
year I spent with them who cam* out and referred to this as 
guns and mortars. Kris would use very specific military 
terms. 

So your recollection of what Spitz Channell 
would have said, he would have used terms like 
'nonhumanitarian assistance" or "direct support"; is that 



correct? 



Yes. 



yNCUSsra 



816 



UNCLASSIFIED 



1 01 01 40 

mikepaulus 1 Did ha at the same time direct you towards 

2 people whom you just described as wanting to kill commies 

3 or bring in the 82nd Airborne or whatever the case may be? 

4 Was that done In this presentation as well, in your 

5 instructions? 

6 A Do you mean directing us to specific people? 

7 Before you picked up the phone and called your 

8 first prospective Toys contributor you had this 

9 presentation by Spitz Channell. In that presentation you 

10 recall he might have used terms like 'nonhunanitarian aid* 

11 or "direct support.' 

12 A Okay. There is something missing here. We 

13 would call always to discuss the Central American freedom 

14 program. It was ongoing from January until, I think, June, 

15 because the vote took place and passed in the House June 

16 2Sth. So It was ongoing until that time. So it is as if 

17 Mm would b« calling always on the Central American freedom 

18 program with in the back of our mind reserving the green 

19 light that we should take the opportunity to discuss how 

20 people really feel about this issue and where they stand in 

21 support of the freedom fighters and how strong their 

22 position is, etc. And if we would learn that, we would 



817 



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81 01 01 '— 41 

mikepaulus 1 th«n take them in the direction of determining whether this 

2 I is a person who should be sent a Mailgram or talk to them 

3 about an upcoming private military briefing with a high 

4 level national security official: "would you be interested 

5 in coming?" That's the way it worked. 

6 Have I explained that? 

7 1 understand that. But how does that relate to 

8 Toys? Did you have a connection In your mind between that 

9 kind of screening process and the Toye project? 

10 A Most definitely. In determining whether these 

11 people were kill the commie types, these were also the 

12 people that would be sent a Mailgram to be Invited to this 

13 private military briefing, and the purpose for coming to 

14 the private military briefing was to find people for the 

15 Toys project. 

16 Before you called your first Toys contributors 

17 you were faalliar with the tern "Toys"; Is that right? 

18 A Yes. 

19 Was that partly based on the briefing by Spitz 

20 Channell that you described? 

21 A It wasn't calling my first Toys contributor. 

22 That is not the way it worked. They weren't set aside 



UNCUSSIFIED 



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iiNCUSsra 



1 01 01 42 

mikepaulus 1 initially from any other prospective contributor to our 

2 Central American freedom program. It was just taking them 

3 one step further. 

4 Let me stop you right there. Presumably you 

5 were given some instructions on at least determining that 

6 kind of information from a prospective contributor; right? 

7 A Yes. 

8 Was that done at a briefing with Channell? How 

9 did you get the information that led you to seek that kind 

10 of information from a prospective contributor? 

11 A We, the fund-raisers, were given this 

12 information. Kris and Cliff were already familiar with 

13 this, because they had already attended Green briefings. 

14 We were in the process of setting up a private military 

15 briefing. I think it was scheduled to be r<arch 10, and we 

16 were sending out Mailgrama that started being sent out 

17 February 10. So I was given specific instructions, we 

18 didn't want people coning to this briefing who were not 

19 kill the commie types. We were only to invite people that 

20 we really believed would be potential contributors to the 

21 Toys project. 

22 Focusing on the kill the commie types as part of 



ilflSUSSIFIED 



819 



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43 



31 01 01 
mikei5aulus 1 your screening, where did you come by that? was that at a 

2 I meeting or did you pick that up by osmosis? How did that 

3 happen? 

4 A I was told how to screen contributors by Spitz. 

5 Is this the meeting that you described earlier 

6 j in your testimony where these words of implication 

7 "nonhumanitar ian assistance* were used? 

8 1 A We met with him every day. He came into the 

t 

9 j office in the afternoon just about every day. This was all 

10 that we were working on. So he would either be focusing in 

11 on contributors for the placement of the ads, getting money 

12 for the placement for the ads. He would talk about that. 

13 Or he would talk about getting money for the 

14 Toys project and how much was needed. And he had just met 

15 with 0111« this morning and this is what he had learned. 

16 And we need to have a briefing and we're going to have a 

17 briefing in March, so we are going to send out Mailgrams -- 

18 "how are you doing with that?" "You have to remember, 

19 Jane, Kris and Cliff, that in talking to your contributors, 

20 talking to these potential contributors, you don't want to 

21 discuss openly what we are doing, because you don't know 

22 where these people really stand. You don't know if they 



iiNHi A^Qiripn 



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. -1 01 01 

mikepaulus 1 hava an ability to kaep this auiet. we have to be very 

2 careful. 

3 He would just be very specific: "when you talk 

4 to these people you will know if this person is truly a 

5 patriotic American. You will know if this person is truly 

6 ant i communist and wants to stop the war in the Central 

7 America and having Central America be established as a 

8 communist beachhead.' 

9 This is how he would talk to us. And we would 

10 learn from things that he would say how we were to go about 

11 our solicitation. 

12 Rather than focusing on any particular meetings, 

13 you had daily meetings with Channell or nearly daily 

14 meetings. In these meetings collectively was Channell 

15 using the terns 'direct support' and 'nonhumanitarian aid*? 

16 A Yes. 

17 rroa your recollection collectively from these 

18 meetings, was he also connecting this notion of direct 

19 support and nonhumanitarian aid to the Toys project? 

20 A Yes. 

21 1 gather from what you are telling me that this 

22 particular set of meetings that you are referring to were 



llNCLASSIFIFn 



821 



UNCLASSIFIED 



a 01 01 45 

mikepaulus 1 to prepare you to solicit people for the March 10 meeting: 

2 Is Chat right? 

3 A Yes. And then there were subseguent lunches and 

4 dinners and drink times. Because we had another briefing. 

5 There were two briefings held in the spring, April 16 and 

6 March 27. 

7 Ms. McLaughlin, are you familiar with the term 

8 "Santa's list"? 

9 A Yes, I am. It's funny that you should ask 

10 that. I remember Cliff — I'm positive that he was 

11 standing by Angela's desk and he said something to -- 

12 Angela Davis? 

13 A Angela Davis. This was at our town house on 

14 Capitol Hill. 

15 la that the headouartert for the National 

16 Endowment for the Preservation of Liberty? 

17 A Has. 30S 4th Street, N.E. All the 

18 organizations were In the sane building, same office. 

19 This would have been probably even before the 

20 January 30 meeting. I remember Cliff giving instructions. 

21 It's very vague, but I remember him saying something about 

22 Santa's list. But certainly in the entire time that I was 



_jmiissiEi£n 



822 



HHtmsro 



,81 01 01 46 

mikepaulus I th«r« th«re was nevar any r«ferenc« to Santa's list being 

2 for" toys for th« r«b«ls' families and their children, we 

3 never worked on anything like that. The only program that 

4 we had that that would have been even remotely similar 

5 would have been our Food for Freedom project in August, 

6 when we were raising money for food. 

7 In this event that you just described with Cliff 

8 Smith and Angela Davis, do you recall Cliff going beyond 

9 the use of the term 'Santa's list* and saying what Santa's 

10 I list was? 

11 A No. I didn't ask him. I just remember the tern 

12 being used. I think he was giving Instructions to Steve 

13 McMahon> because Steve was sitting In the kitchen. That 

14 was our accounting office. He was giving Instructions for 

15 Steve to prepare something, a printout for Santa's list. 

16 That was tha only time that it came up. I remember that 

17 one reference — actually I remember two. I take that 

18 back. Spits said at soma time In the very beginning that 

19 Santa's list was being abolished; %fe weren't going to be 

20 working on Santa's list anymore. And I never asked. 

21 Because we weren't working on It, I never bothered to ask 

22 what Santa's list referred to, but I certainly do not 



liNr!iii.<;sfnpn 



823 



uNtussm 



<81 01 01 47 

mikepaulus 1 recall ever hearing that Santa's list referred to toys for 

2 chil.dren, and I never heard the Toys project referred to as 

3 that by anyone. Never, ever. 

4 On the phone calls that you made with respect to 

5 this meeting which was at that time scheduled for March 10, 

6 who did you call? 

7 A It was scheduled for March 10, but it wasn't 

8 j held on March 10. 

9 we sent Mailgrams out the 28th of February, and 

10 it was to be held March 10, but it wasn't, because the vote 

11 was coming up and I think we wanted to wait until after the 

12 vote. 

13 I was continuing to call. This was to be sort 

14 of a secondary project, while it had tremendous 

15 importance, the purpose for our calls was to raise money 

16 for the Central American freedom program, and we were to 

17 also use thst as an opportunity to determine where oeople 

18 stood. We wouldn't have called somebody up and said "do 

19 you feel like killing commies in Central America?" we 

20 would have to have some basis from which to work, and that 

21 basis was establishing our credibility with the Central 

22 American freedom progi 



' •" 1!;USSIFIE0 



824 



wmm 



48 



81 01 01 

mikepaulus 1 | I talked to a lot of people. I know that I sent 

2 I a Ipt of Mailgrama out to people that I didn't talk to,p.,_. 

3 that I couldn't get through to. For instance,! 

4 ' is Hispanic. I focused on a lot of Hispanic wealth in this 

5 country, because I expected that Hispanics would be one of 

6 the first people to respond to something like this, because 

7 ' it is literally saving their own people in many cases. I 
3 ; went after a lot of Cubans, because they had already been 
9 1 through it. 

10 ' Do you recall anyone that you solicited who 

11 responded to your effort to find out whether they would 

12 I support something like sending in the 82nd Airborne? 
I 

13 ' A Yes. Bill O'Boyle. I would have spoken to him 

I 

14 ! on March 26. 

I 

15 March rather than February? 

16 A Yet. 

17 What did that conversation consist of, as you 

18 recall? 

19 A He was a referral froai a contributor in Texas. 

20 I always made it a practice to ask people if they knew of 

21 others who would be interested in the work that we do. I 

22 called Bill and finally got to talk with him the day before 



UMH 



l»' 



mm 



s. Inc 



825 



UNCLASSIFIED 



.81 01 01 49 

mxkepaulus 1 our meeting. I was talking to him about th« Central 

2 American freedom program and he was telling me all about 

3 himself and his position, etc. Actually, he offered money 

4 without me even soliciting him. He offered 510,000 just 

5 out of the blue, and I thought, my Lord, I've got a live 

6 one here. I guess I'd better follow this up. 

7 I could tell just by things he was saying that 

8 he was very concerned with the spreading of communism in 

9 Central America and didn't feel that we were addressing the 

10 issue adeauately. I said, "It just so happens we're having 

11 a military briefing with members of the National Security 

12 Council. Perhaps you would be Interested In coming." 

13 He was very Interested. He flew down the next 

14 day. I picked him up at the airport. 

15 I think there were only three potential 

16 contributors at this briefing, and I think they were my 

17 three potential contributors. I don't remember any other 

18 contributors but my own. 

19 We went to the OEOB. I got his clearance 

20 information. I had gotten it the previous day. we went to 

21 the OEOB and we got cleared. And then we went to a 

22 conference room. For some reason I remember the Indian 



fimi^ 



DCA. 



826 



81 01 01 

mikepaulus 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 



UNCLASSIFIED 



50 



Treaty Room. There was a slide projector and a screen set 
up.. One of Ollie's assistants, a young marine, brought in 
the slides. The executive staff was present. 

The executive staff of NEPL7 

A Dan, Spitz, Cliff, Kris and myself, any my three 
contributors, wait a second. There were two other 
contributors there. I know why I didn't remember, because 
they couldn't come to the dinner. That's what it was. 

I can't remember his 



frr.- 



name. They're local. It was a husband and wife. 

I'm positive they were at that 
briefing. 

Do you recall the other contributors who were 
present? Bill O'Boyle would be one. 
O'Boyle. ^^^^^H 



I and he is the 



chairman of 



here in Washington. 



^and he is an Hispanic consultant. 

The briefing itself was the only important thina 
that I recall being said. Ollle himself never said 
anything that referred to direct military assistance. One 
comment that he did make, and he made it at this briefing 
and he made it at the subseouent briefing. One of the 



mmifn 



827 



UNCLASSIFIED 



81 01 01 51 

iflikepaulus 1 contributors would ask a auestion, something referring tc 

2 their needs, something that would be more specific. I 

3 don't remember exactly who the contributor or what the 

4 guestlon was. I just remember very distinctly Ollie's 

5 response, and that was in a very casual way he would say, 

6 "Well, there are a lot of things that I cannot discuss on 

7 this side of Pennsylvania Avenue but that will be addressed 

8 by my friend Spitz later on." Meaning the other side of 

9 Pennsylvania Avenue in the Hay-Adans Hotel, biBcause after 

10 these briefings we would always go back and have dinner in 

11 a private suite in the hotel. 

12 Let me ask you a couple Questions to clarify 

13 this meeting. The briefing was conducted by Lieutenant 

14 Colonel North? is that correct? 

1 5 A Yes . 

16 Your reference to the auestion coining from one 

17 of the contributors as to what their needs were referred to 

18 the needs of the Nicaraguan opposition; is that correct? 

19 A Yes, the freedon fighters. Yes. I think in one 

20 case the auestion was specific to money. I can remember 

21 Ollie just sort of smiling and then casually saying, "well, 

22 there are a lot of things I can't discuss on this side of 



\K 




■:£. 



NC. 



828 



minssm 



91 01 01 52 

mikepaulua 1 Pennsylvania Avanue.' I remambar that as clear as day. 

2 It'j strange how things just stand out so perfectly. 

3 That's what he said, verbatim. 

4 MR. DUNHAM: Jane, was it clear the Question 

5 related to money for weapons? was it in the context of a 

6 part of the briefing where North was talking about the 

7 tremendous advantage that the Nlcaraguans had over the 

8 contras with regard to Russian eauipment? 

9 THE WITNESS: Yes. Because he would really go 

10 into detail about the Soviet military power in Central 

11 America. It was natural progression that one of these 

12 contributors would ask something about, well, how in the 

13 heck are the freedom fighters going to combat communism in 

14 Central America? It was almost as if he was setting the 

15 stage for what we would then be doing after the briefing at 

16 the Ray-Adams. 

17 BY MR. WOODCOCK: 

18 Let me ask the same kind of auestion in a 

19 different way. Would he in his briefings for prospective 

20 Toys contributors get into the help that was being provided 

21 by NEPL by virtue of humanitarian assistance or TV ads or 

22 that sort of thing? 



829 



41 01 01 
mikepaulus 1 
2 
3 
4 
5 
6 
7 
8 
9 
10 

n 

12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 



«m«B 



53 



A No. H* would refer to what a great job we were 
doLnq and how Important what we were doing was to the 
President and to the freedom fighters. He never defined 
what it was. 

(Exhibit No. 1 marked 
for identification.) 
(Document handed to witness.) 
BY MR. WOODCOCK: 

US. McLaughlin, do you recognize that document? 
Yes, I do. 
What is it? 



It's a Mailgram that I sent out toi 



inviting him to a 
private meeting on Nicaragua here in Washington. 

Was that a reference to the meeting that you 
juat described? 

A Yet. 

was this meeting that you juat deacribed where 
Lieutenant Colonel North provided a briefing of the 
Nicaraguan situation known as a Green meeting? 

A Yes. In fact, you will probably see it written 
as Green meeting In Angela's book. 



JlNllli.<L<MA 



830 



UNCUSSIFIE 



U 



54 



81 01 01 

mikepaulus 1 Are you referring to her scheduling book? 

2 I - A Yes. 
i 

3 j what happened following the briefing? 

4 ; A We left the OEOB and went back to the 

5 Hay-Adams. We went to a private suite with a beautiful 

6 view of the White House. The television screen was set up 

7 and there were promotional packets on everybody's chair for 

8 the National Endowment. It would include story boards for 

9 the television ads that we placed, and it would include a 

10 bio of sorts on Spitz and a bio on the National Endowment 

11 1 and copies of all the letters that we had received from the 

12 ! President; a tax deductibility statement. That's about it. 

13 j Rich rtiller and Frank Gomez were at the dinner. 

14 Jeff Keffer may have been there. 

i 

15 Were all the contributors there? 

16 A Yes. It was just three. It was my three 

17 contributors. 

^^^^^^^^^^^^Hwere 

19 A No. And I'm not real positive on the ^^^H 

20 attending this briefing, but it seems to me that they did 

21 I remember they definitely didn't come to the dinner, and 

22 I'm pretty sure it was this briefing. 



fv--.-jac-{ 



iiNniiif^f^iPirn 



831 



UNCLASSIRED 



81 01 01 55 

mikepaulus 1 You do recall th«m coming to some briefing; is 

2 that right? 

3 A There were only two. So it was either the f^arch 

4 27th or April 16th. 

5 Was there a presentation made at this dinner? 

6 A Spitz spoke, but it wasn't the kind of 

7 presentation where he would be behind a podium or anything 

8 I like that. He did stand up, and maybe Dan stood up, and 

9 said we would like to show you some of the ads that we have 

10 recently prepared that are going to be run in the key media 

11 markets, etc. 

12 The interesting thing that transpired prior to 

13 our actually sitting down to dinner was we had an 

14 opportunity to have son* drinks and mill about. The whole 

15 staff was there. To fill up the room, if nothing else. 

16 Kria Littledale had an opportunity to chat with Bill 

17 O'Boyle. Re comes over to m« and discretely says, 'well, 

18 Bill O'Boyle just offered another 20 grand. I think you've 

19 got a live one here. You'd better tell Spiti. I think 

20 he's good for the Toys project. He's good for Toys." 

21 So I went over and told Spitz and Spitz then 

22 arranged for Angela to change the seating assignment so 



IINCIAfiSIFIPn 



832 



UNCIASSIHED 



56 



-1 01 01 
mikepaulus 1 that he would b« seated next to Bill O'Boyle. We had these 

2 really nice name cards that had our names and the 

3 j contributors' names in calligraphy on one side and then a 

4 quote by the President on the other side: "You can 

5 accomplish much if you don't care who gets the credit." 

6 The cards were changed so Spitz was seated at e>' 
the same table me, ^^^^^^^^^^^^^^| 

8 ^^^^^^^H and it was either Kris or Cliff, one of the 

9 two. It might have been both. I think it was just Cliff. 

10 ! He had dinner and we saw some of the ads. 

11 These are the TV ads that NEPL prepared but 

12 which hadn't aired yet? 

13 i A Yes. Son* hadn't aired. Some had just been 

14 I produced. 

15 I I can reaenber Spitz chatting with Bill, and I 

16 am supposed to be chatting with ^^^^^^^^^^^K who 

17 responding to anything I was saying. So I was more in tune 

18 to what Spitz was doing with Bill O'Boyle, because he was 

19 literally taking ny contributor and I wanted to know what 

20 was going on. He sat there. 

21 After we went through dinner Spitz said some • 

22 things that led the conversation in the direction of how 



m flQQinrn 



833 



UNCLASSIFIED 



1 01 01 57 

mikepaulus 1 can w« expect these young men and women to — I think r 

2 remember. We had shown one of the ads that focused on the 

3 HIND Mi24 helicopters. 

4 Those are the Soviet helicopters? 

5 A Yes. The most powerful gunships in the world 

6 flying about Nicaragua. He then made reference to "how in 

7 God's name can we expect these young men and women to 

8 combat communism when they have got to deal with this kind 

9 of military power?" So he would say things that would lead 

10 the conversation in this direction. 

11 Did O'Boyle respond to this? 

12 A Yes, he did. He was angry. Spitz knew 

13 immediately. It was just so obvious. He leaned over -- X 

14 had one ear glued to their conversation — and he said, 

15 "Perhaps you'd be Interested in meeting with Colonel North 

16 privately and diecusaing this more in detail." Bill said, 

17 •!••, I would." 

18 So it was arranged and the very next day they 

19 met. 

20 Did Channell pretty well concentrate that 

21 evening on O'Boyle and no one else? 

22 A Yea. 




834 



«ussm 



31 01 01 58 

mikepaulus 1 You just said the following day there was a 

2 meeting involving Lieutenant Colonel North. How did that 

3 come to your attention? 

4 A I think they met in the morning. Dan came back 

5 to the office and I asked if he had heard anything yet, 

6 because I hadn't gotten a call from Spitz, and Dan said to 

7 me, 'I think it went real well. You should be proud of 

8 yourself. Congratulations. I think it went real well.' 

9 You understood that to be a reference to the 

10 meeting with Lieutenant Colonel North; is that correct? 

11 A Yes. 

12 Did you ever receive any confirmation that that 

13 had occurred beyond what Dan Conrad said? 

14 A Yes. Bill O'Boyle popped up at our offices 

15 three days later. 

16 Could you tell us what happened when Mr. O'Boyle 

17 reappeared? 

18 A He came to the office. I answered the door. 

19 And I was shocked. He caoe totally unannounced. It was 

20 literally three days later, the 3l8t of March. It was a 

21 Monday morning, and there he was. I was just shocked. He 

22 seemed very nervous. He said, "I have something for you 



'IMfliiiQQirirn 



835 



miftssm 



59 



<J1 01 01 

mikepaulus 1 and I wantsd to hand deliver it.' So I asked him to come 

2 in and he hands me a check in the amount of $130,000 made 

3 out to the National Endowment for the Preservation of 

4 Liberty. I called Spitz immediately at home. Spitz tells 

5 me to give the check to Steve and have it deposited in the 

6 Toys account. 

7 Steve McMahon? 

8 A Yes. Little did he know that Steve was not in 

9 the office. He didn't really know that Steve had a helper, 

10 who was Phil Meo. So I gave the check to Phil Meo. 

11 Spitz told me to ask Bill if he would have lunch 

12 with Spitz, meet him at the Hay-Adams, and that I should 

13 take him over to the Hay-Adans and stay there with him 
M until Spitz arrived, and not to. discuss anything, to have a 

15 casual conversation. 

16 So I followed his Instructions and took Bill to 

17 th« Hay-Adaas. Spitz was late, as usual. Bill ordered 

18 lunch. A very odd thing for him to order after just giving 

19 us $130,000 for what I believed and what he believed was 

20 direct military assistance. He ordered steak tartar. I'll 

21 never forget that. Raw meat. 

22 Then Spitz came and that was my cue to leave. 



JiNCii.<iSifjfj) 



836 



V 



mm^^ 



U 01 01 '^ ' - 60 

mikepaulus 1 So you were not present beyond the initial 

2 intcoduction or reintroduction? 

3 A ■ I stayed with him there for maybe a half an 

4 hour, because Spitz was late. I remember ordering a salad 

5 and just waited until he got there. All he did was talk 

6 about the work that he does and his family. Nothing with 

7 regard to his meeting with Ollle or anything like that. 

8 Let me back up on a separate point just to make 

9 it clear on the record. Were Steve McMahon and Phil Meo 

10 both accountants for Channell? 

11 A No. Steve McMahon was the accountant for 

12 Channell, and his affiliated organization. Phil Meo was a 

13 friend of Steve's who was hired just to do some 

14 bookkeeping. Phil is not an accountant, does not have any 

15 accounting background whatsoever. He just needed a job and 

16 Steve needed son* help. 

17 So he was functioning as a bookkeeper? 

18 A Yes. 

19 And that is why you took the check to Phil Meo? 

20 A Yes. Steve wasn't in the office. Phil was, in 

21 a reasonable facsimile thereof of an accounting department. 

22 Did you discuss with Channell after he returned 



llWniiCCJnrn 



837 



UNCUSSIFIED 



61 



91 01 01 
iTiiKepaulus 1 from lunch or at any time subaeauent to this lunch what 

2 i happened with O'Boyle? 

3 I A No, I did not. He thanked me, and I was given 

4 . credit for the S130,000. It was really Dan who told ne 

5 ' that things went real well and they were going up to New 

6 York to meet with Bill. 

7 i This Is following the lunch? 

8 A Yes. This was that week. I think they went up 

9 to meet with him In New York. Because then some strange 

10 things happened. I remember that afternoon I wrote Bill a 

11 really nice letter and sent him a copy of Shirley 

12 I Christian's book Nicaragua, and he wrote me a letter back 

13 ' thanking me for the book and looking forward to seeing me 

14 in the near future and working with us. The next thing you 

I 

15 I know he sends a Mallgram to Spitz saying 'I can't have 

16 anything to do with your organization anymore. I've done 

17 all the fund-raising I can do. I've helped all that I 

18 can." 

19 When I asked Dan about this, I said, 'well, 

20 obviously Spitz went for the jugular and it backfired." 
w 1 1 hp^^^^^H^a s 

22 "Well, he's the kind of contributor that is hot and cold. 



IINSIilWinrn 



838 



UNCUSSIFIED 



31 01 01 

mikepaulus 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 



62 



and he's cold right now, but he'll be hot again soon." 

- Did you have another briefing with Lieutenant 
Colonel North in April? 

A Yes. April 16th. 

When were you first given a notice that that was 
in the works? 

A After the March 27th briefing we were to prepare 
for the April 16th briefing. 

were you given similar instructions to try and 
screen people for this briefing? 

A Just to continue doing what we had already been 
doing. Spitz had been encouraging me to get Ralph and 
Bruce Hooper down to one of these briefings. Ralph wasn't 
interested. Even after saying that he wasn't against 
buying ams, I guess we learned that he didn't want to put 
his money where his mouth was. But his brother certainly 
was intarestedf who later came to a briefing one on one 
that I took him to. 

I gather that Bruce Hooper and Ralph Hooper were 
both contacted with respect to this April 16 meeting; is 



that right? 



Yes. 



DNWSSIflEO 



839 



81 01 01 

mikepaulus 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 



\m&\^^ 



63 



And yet neither could make It; is that right? 

A Neither could make it. Both were sent a 
letter. We gave them an option actually, because we were 
going to have two briefings in April, one on April 16th and 
one on the 23rd, and the 23rd was canceled. 

Did you solicit anybody who showed up at this 
April 16 meeting? 

A Yes. I solicited a referral that I had gotten^ 
from 



and the referral was 



He is a big businessman on Long Island. He has all kinds 



fr-.. 



Ihad told me that he thought 



of different businesses. | 
■^^^Hjwould be very interested in the work we were doing. 
I invited him through a Mallgrani, because I was never able 
to speak with him, and he came down to Washington for that. 

who 



Who else did I have here? 
had already given us S5,000 toward the Central American 
freedom program. Spitz wanted me to cultivate him as a 
Toys contributors and get him here, because he's a very 
wealthy Texan. He did come, finally. fr, a- j 

Had you already Identified H|^^^|H^|^^ 
potential Toys contributor or were you directed to him by 
Channell? 



wmm 



840 



81 01 01 
mikepaulus 1 
2 
3 
4 
5 
6 

7 ! 
8 
9 
10 
1 
l: 
1 
1. 
r 

16 
17 
18 
19 
20 
21 
22 



ONCLASSIFIED 



64 



A H« was very supportive of the President's 
poHcies and a hard-line conservative and felt that the 
freedom fighters needed a lot more than they were getting. 



Iwould have wanted to do everything 




I think thatH 
legally. 

Did you know that or were you directed to him by 
Channell, or was it a combination? 



I knew that, because I had been talking to 



for Quite a while. He was the contributor that 



referred me to Bill O'Boyle. I think I tried to even cet 
^^^^Hto come to the March 27th briefing, but his schedule 
wouldn't permit. So I finally got him to come to the April 
16th. Spitz had definitely told me that he wanted me to 
cultivate him, to get money f rom ^^^^Hand get him to be a 
contributors to the Toys project. 

Was this based on what you told Channell? Did 
you share with him your insights into ^^^^^H 

^■prior to this time. In 



A No. He knew of^H 
fact, I think they tried to get him to come aboard as a 
contributor and they weren't successful. So when I got him 
to come aboard it was then — there were a couple of other 
contributors like that that they had trouble with that I 



iiNr.1 &^!;iFiFn 



841 



UNEUSSIFIED 



,81 01 01 
mik«paulus 1 
2 

3 I 
4 
5 
6 

7 i 

8 

9 

10 

11 

i: 
i: 
I* 

1! 

II 

1" 

18 
19 
20 
21 
22 



65 



brought aboard, and then Spitz wanted me to get more from 
them. 

I gather this briefing on April 16 actually 
occurred; is that right? 

A Yes. 

Do you recall who was present at the briefing? 
Were you present at the briefing? 

A Yes. It was very similar to the March 27th 
briefing. It was held, I'm pretty sure, in the same room. 
I don't recall the other contributors that were present. I 
my contributors present :^H|^^^^^HH 

There were other contributors of the 
other fund-raisers. I don't remember their names. Nobody 
gave any significant money. Nobody met the following day 
with Ollie, because I would have heard about it. 

I gather that, as with the prior briefing. 
Lieutenant Colonel North provided the slide show and maybe 
narration* la that correct? 

A Yea. It waa almoat Identical. He even made the 
same comments. 

That being the one "there are things I can't 



talk about"? 



UNCLASSIFIED 



842 



UNCLASSIFIED 



81 01 01 6« 

mikepaulus 1 A Yes. 

2 ' It was Kris Littledale's contributor who asked 

3 the auestion. What the heck is his name? He asked a very 

4 specific auestion. He's a Washington guy. I can picture 

5 him. It will come to me. But he was the contributor who 

6 asked the auestion, because it was very pointed. It was 

7 almost as if he was playing devil's advocate. All of us 

8 got that impression. You could see the strain in Dan's 

9 face and Cliff's face, because this question just seemed so 

10 out of context. 

11 Do you recall how the question was framed? 

12 A No, I don't. I just remember that the auestion 

13 was very specific as to raising money for direct military 

14 support. It was just asked In a way that seemed more in 

15 opposition to that than proposing it. 

16 MR. DUNHAM t What was the answer? 

17 THE WITNESS: The answer was, "Well, there are a 

18 lot of things that I can't discuss on this side of 

19 Pennsylvania Avenue." 

20 BY MR. WOODCOCK! 

21 Do you recall what stage of the briefing 

22 Lieutenant Colonel North was at? Was there anything in 



Lonel North was at? was 

ONCLASSIFIED 



843 



UNCUSSIFIED 



31 01 01 67 

mikepaulus 1 particular that prompted this Question? 

2 - A I don't recall. 1 would have to say it was 

3 probably about the time that he was really discussing in 

4 detail Soviet military power, the amounts of money coming 

5 in through the Soviet Union via Cuban and the Eastern Bloc 

6 nations, the amounts of money funneled in through terrorist 

7 groups, Ghadafi and through Libya. He was discussing all 

8 that in very specific terms. I am pretty sure that is when 

9 the Question was posed. 

10 Let me run a couple of names by you and see if 

11 you recall whether these people were present at the 

12 meeting. 

13 Ellen Garwood. 

14 A No. 

15 How about Thonas Clagett? 

16 A No. They were only present at the meeting on 

17 January 30th. 

18 Pollowlng this briefing was there again the 

19 usual dinnar at the Hay-Adams? 

20 A Yes. This waa the dinner where Spitz was 

21 discussing in very specific terms transport planes. He 

22 didn't say what.tox,- . He lust said there had been a recent 




844 




11 01 01 

mikepaulus 1 Invasion by the Sandinistas of| 

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^■and th«y 

3 chink, two transport planes as a rasult of that invasion. 

4 So that was discussed by Spitz very openly. 

5 There must have been six contributors there. 

6 For the life of me I can only remember my two and then Kris 

7 Littledale's contributors. So there were three more, and I 

8 don't remember who they were. But I remember Spitz saying 

9 'we need $600,000 to buy these transport planes and there 
10 are six of you here, so I hope that you all be able to help 

accordingly.' ^^^^^^^^^^^^looked at me and he said 

12 Spanish, 'That's 5100,000 each. That will be no problem." 

13 Of course I was ecstatic, but that never materialized. He 

14 disappeared the following morning and we never heard from 

15 him again. 

16 Did he ever make a contribution? 

17 A No. Smart man. 

18 Pollowing this briefing on April 16, I gather 

19 that you began to develop a relationship with Bruce Hooper. 

20 A No. It happened prior to that. 1 had developed 

21 a relationship with the Hooper brothers. Much more so with 

22 Bruce. I had gone back to Ralph for more money for the 



llNilASSffi 



845 



UNCLASSIFIED 



Jl 01 01 , 59 

mikepaulus 1 Central American Freedom program, because we were really 

2 beefing up the advertising prior to the March 20th vote, 

3 and Ralph said, "Well, I can't help anymore, but why don't 

4 you call my brother?" That's when I started talking with 

5 Bruce. Bruce subseauently sent S15,000 for the Central 

6 American Freedom program, and then I just started talking 

7 with him. Bruce and I hit it off. He's a really neat man. 

8 So following the briefing on April 16 you 

9 continued to have contact with Bruce Hooper; is that right? 

10 A Yes. I wanted to try to get the two of them. 

11 And then there were two other brothers. They have a family 

12 foundation. Spitz really wanted the family brought on 

13 board because he wanted access to this foundation, and the 

14 only way that you could get a lot of money from the 

15 foundation was if there was consent by all four of them. 

16 Bruce and Ralph were the only politicos of the 

17 four brothers, Ralph being much more closely tied to the 

18 Republican Party and Bruce being much more closely tied to 

19 the issues. I wanted then to cone to these briefings, and 

20 they weren't able to. But I talked with Bruce maybe once a 

21 week, once every two weeks. Pretty freauently. 

22 Did there come a point when you did succeed in 



iiNr.1 hmm 



846 



UNCUSSIHED 



n 01 01 70 

mikepaulus 1 interesting him in coming to Washington? 

2 - A Well, he called me to say that he was coming 

3 down. When I told Spitz this, he said, 'well, fine, we're 

4 going to arrange for him to meet with Ollle." I told Bruce 

5 this. That was probably one of the only times that I 

6 actually said Colonel North. I was given permission to let 

7 him know that we were arranging for him to meet privately 
. 8 with Colonel North. 

9 Who gave you pemission? 

10 A Spitz. 

11 Therefore you used North's name on the phone in 

12 your discussion with Hooper; is that correct? 

13 A Yes. 

14 He came do%m to Washington April 29. 

15 Whan ha arrived in Washington you met him at 

16 Union Statloni is that right? 

17 A Yas. He always takes the train from 

18 Philadalphla. 

19 What happened than? 

20 A It's what happened even prior to his arrival. 

21 Spitz called me very early in the morning and told me that 

22 he would not be able to take Bruce to ^ee Ollie, that I 



ilNCUSSIFIED 



847 



ONCUISSinED 



71 



11 01 01 

mikepaulus 1 would have to do it, and I was to call Fawn inonadiately and 

2 giv« her the clearance information. I, of course, was 

3 ecstatic, because none of the fund-raisers was ever given 

4 that opportunity, and I, being his only female fund-raiser, 

5 considered it a great honor that I was being allowed to dc 

6 this before any of the guys. 

7 So what happened? 

8 I A I picked him up at the train station, we went 

9 to the OEOB and we met with Ollie in his office. 

10 1 gather you were present throughout this 

11 meeting. 

12 A Yes. I sat on the couch. 

13 Could you describe what happened at the meeting? 

14 A They hit it off instantly. Bruce is a former 

15 marine. Th«y talked about where Bruce had been stationed 

16 and what battles he fought in, or whatever. The beginning 

17 of the meeting was marine talk. Ollie talked with Bruce 

18 ouite a bit about the Soviet military power, the advantages 

19 that the Sandinistas had had as a result, and he went over 

20 a lot of thing* and would make reference to 'a lot of this 

21 information, unfortunately, is critical, but you never read 

22 about it in the press; you only read about the other side." 



UNCliSSlFe 



848 



UNCUSMO 



11 01 01 72 

mikepaulus 1 This Is North speaking? 

2 - A Yes. 

3 He had like half of a stenographer's notebook, 

4 spiral note pad, and there was all kind of pencil writings 

5 in this note pad, and he was leafing through it, talking 

6 about how the humanitarian aid had run out, how the last 

7 aid ran out the end of March, and that even if this vote 

8 does go through, which he anticipated would but he didn't 

9 know when, they were really going to be without a lot of 

10 what they needed. 

11 He made reference to specific needs with regard 

12 to what would be considered humanitarian, boots and 

13 clothing and soap and food, to sustain them. I don't 

14 recall Ollie making any reference to what they needed 

15 militarily. Certainly not in specific terms, but most 

16 definitely in general terms with regard to how in God's 

17 naae can w« expect these young men and women to fight 

18 against conBunim when this is what they're up against. 

19 Did Hooper react to this presentation. 

20 A It was very euotional. Ollie is very 

21 emotional. He would sometimes cry, and he would bring you 

22 into his delivery. He definitely had that effect on 




849 



""nuissim 



73 



11 01 01 

inikepaulus 1 Bruce. Bruce, of course, is a highly patriotic American 

2 and -believes in standing very tall and very proud and very 

3 firm in defense of freedom and democracy. 

4 What happened after the meeting? 

5 A After the meeting, which lasted about 45 minutes 

6 or so, Bruce and I walked across Lafayette Plaza to the 

7 Hay-Adams where I took him for lunch. As we were 

8 approaching the Hay-Adams Bruce asked me, 'How does this 

9 work? How does this all get through? How do you 

10 accomplish this? How are you able to help them?* 

11 You took him to be referring to NEPL; is that 

12 right? 

13 A Yes. 

14 Old you respond to that? 

15 A I did, to the best of my knowledge. I wasn't 

16 really sure, but I told him what I believed was the way it 

17 worked, and that was to say, "Bruce, Ollie has a liaison in 

18 Central Anerica who let's him know what the freedom 

19 fighters need, and he in turn lets us know how much money 

20 we need to raise, we raise the money. It then goes 

21 through an intermediary and the needs are ret.* 

22 Did you at some later point seek confirmation as 



UNCLASSIFIED 



850 



^liiussm 



81 01 01 74 

mikepaulus 1 to whether what you told Hooper was accurate? 

2 - A Yes. I had to report everything back to Spitz 

3 that afternoon after I left Bruce, after lunch, and I told 

4 him verbatim what I said, and he said, 'That was very 

5 good. That's what you should have said.* 

6 And Spitz had told me that I should get a 

7 minimum of $100,000 from him. 

8 Then what happened? Did you hear from Hooper 

9 again? 

10 A Yes. Spitz wanted to know if he responded, and 

11 I said, 'Well, he's going to get back to us within the next 

12 ten days.' I felt very positive about him helping us. He 

13 wrote Spitz a letter actually saying that he had a very 

14 stimulating morning in the company of Colonel North and 

15 Jane McLaughlin. 

16 That was a reference to the meeting you just 

17 described? 

18 A Yes. 

19 Then he called me, or I called him, I guess, to 

20 find out what he was up to, and he told me that he was in 

21 the process of gathering the support that I requested, that 

22 we, the organization, reauested, and that he would be able 



UNCIASSIFIED 



851 



UNCLASSIFIED 



81 01 01 

mikepaulus 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 



75 
to send m« something within ten days. Then he sent a 
letter with the money, $100,000, and asked that Ollie 
contact him to let him know what he was going to do with 
it. 

Let me ask you to concentrate for a minute on 
the S100,000. Was that a check? 

A A check made out to NEPL. 

How did he know to make it out to NEPL? was 
that from talking to you? 

A Yes. 



uNtussra 



852 



'81 02 02 

kepaulus 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 



UNCUSSIFIED 



76 



(Exhibit No. 2 marked 
for identification.) 
(Document handed to witness.) 
BY MR. WOODCOCK: 
Do you recognize this? 
yes, I do. This is the letter I just talked 



about. 



That Is the letter that Mr. Hooper sent to you 
that accompanied the $100,000 check; is that correct? 

A Yes. 

In that letter Mr. Hooper asks you to have Ollie 
contact him to let him know what Ollie is going to do wicl^ 
the money. What did you do with that request? 

A I told Spitz and Dan. 

Do you know whether there was any contact made? 

A No, I don't. I know that a letter went out to 
Bruce Cron Ollie, which was a standard letter that was sent 
to the Toys contributors and to others that were ardent 
supporters, or that we wanted to encourage to be suoportive 
of this. I don't know if he was ever called. I just was 
told that it was taken care of, and I was told that by Dan 
Conrad. In fact, he makes note of it in here? 



uNcussro 



853 



liNMsife 



77 



5881 02 02 

kepaulua 1 In ^i-3 notes? 

2 A Yes. "Call Bruce Hooper re S100,000 and how it 

3 will be used." 

4 (Exhibit No. 3 marked 

5 for identification.) 

6 (Document handed to witness.) 

7 BY MR. WOODCOCK: 

a Is this the document that you just referred to 

9 when you were saying Dan made reference to this? 

10 A Yes. 

U You take that to be Dan Conrad following up on 

12 the information you gave him about Hooper's interest in 

13 having a call from Oliver North; is that right? 

14 j A Right. 

15 The $100,000 that you received with the letter, 

16 you took that to Phil M«oj Is that correct? 

17 A Yes. 

18 Did you tell him to put it in any particular 

19 account? 

20 A The Toys account. 

21 (Recess.) 

22 MR. WOODCOCKS Baclt on the record. 



UNCLASSIFIED 



854 



UNCLASSIFIED 



5881 02 02 78 

kepaulus 1 BY MR. WOODCOCK: 

2 Ms. McLaughlin, on the subject of Mr. Hooper, 

3 let me take you back to your telephone conversations with 

4 him and your other contacts with him. What was it in your 

5 contacts with Bruce Hooper that led you to believe he would 

6 be a likely contributor to the Toys account? 

7 A His strong, strong support of the President's 

8 policy of military support for the freedom fighters, of 

9 providing the freedom fighters with what they need to 

10 combat communism; they can't fight against the Sandinistas 

11 with Band-Aids and butter; they need something a little 

12 stronger than that. 

13 Did he respond in kind with any kind of remarks 

14 like the ones you described earlier about people who would 

15 say send in the 82nd Airborne or that sort of thing? 

16 A Similar comments. He had a very strong position 

17 on supporting the freedom fighters. 

18 Do you remember any particular remarks that he 

19 made In that vein? 

20 A Not that I remember a comment having originating 

21 from something he said. He just went along with things 

22 that had been said by basically my other Toys type 



UNCLASSIFIED 



A ^.- C . . r>- 



855 



UNcussife 



79 



5881 02 02 

kepaulus 1 contributors. 

2 Does that also apply to your meeting with him 

3 foUowimg the briefing by Lieutenant Colonel North? 

4 A Yes. 

5 Was the conversation continuing in the same vein 

6 j of the inability of the opposition to fight with Band-Aids 

7 j and butter? 

8 A Yes. 

9 Do you have any soecific recollection of 

10 anything he said at that time? 

11 I A Just that he believed that Congress was hemming 
I 

12 and hawing around and that they were not taking this as 

13 seriously as they should be; this involved a threat to our 

14 national security; it was so much closer than anything else 

15 that involved a threat to our national security; it was 

16 something in our backyard. He was upset with all of the 

17 comraents mad* trying to compare Nicaragua with Vietnam, 
13 versus Ralph, for instance, being more interested in 

19 waiting to see what Congress would do. It was obvious to 

20 me that Bruce perhaps would be the kind of patriotic 

21 American who would support this privately. 

22 Congress was providing humanitarian aid. 



UNCLASSIFIED 



856 



UNCLASSIFIED 



80 



5881 02 02 

kepaulus 1 A It had run out. 

2 To the extent Congress was orovidinq anything, 

3 it was humanitarian aid. When you say Ralph Hooper was 

4 waiting for Congress to do something, that was more than 

5 just humanitarian aid; is that right? Is that what you 

6 understood? 

7 A Waiting for Congress to pass the President's 

8 request for SlOO million in military and humanitarian 

9 assistance. 

10 Bruce 's position, as opposed to Ralph, was that 

11 he was not content to wait until Congress did that; is that 

12 correct? 

13 A I sensed that he was not content, and the money 

14 that he provided us with verified that. 

15 Let me move you ahead in time a bit, 

16 Ms. McLaughlin, to August of 1986. Do you recall at that 

17 tiow being notified in your office that ties between the 

18 Channell group and International Business Communication had 

19 terminated? 

20 A Yes. A memorandum was put on each of our 

21 desks. I didn't see that in your package of documents. 

22 But you do recall seeing such an item? 



UNCUSSIFIED 



857 



UNCLASSIFIED 



•=881 02 02 
kepaulvjs I 
2 
3 
4 
5 
6 
7 

8 ! 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 



II 



A Yes. 

Was that termination o£ relationshio explained 
to you at all? 

A No, not really, and as far as I'm concerned it 
was cosmetic. Things were getting very, very sticky about 
that time in August, because the aid package had been 
passed and Congressman Michael Barnes of Maryland was a 
leading ooponent to the President's aid package and was 
instrumental in subseguent investigations into Ollie's 
activities. So it was a really sticky time. 

How did that relate to IBC? 

A IBC was the conduit for the money that we raised 
for the freedom fighters. There were investigations going 
on into Ollie's activities and we worked closely with 
Ollie, and the money was disbursed through IBC. 

So you are at this point putting two and two 
together. Did anybody at this point tell you that this was 
what was going on? 

A No. The ties weren't broken, though. 

(Exhibit No. 4 marked 



for identification.) 



(Document handed to witness.) 

UNCLASSIFIED 



858 



ONCLASSIFIED 



82 



■^881 02 02 

kepaulus 1 BY MR. WOODCOCK: 

2 Do you recognize Exhibit No. 4? 

3 j A Yes. 

4 What do you recognize it to be? 

5 A Part of an analysis that I did on my 

6 contributors. 

i 

7 Do you recall approximately when you might have 

8 put that together? 

9 A In November. 

10 Of 1986? 

11 A Yes. 

12 You have a reference at the top of the page co 

13 contributions after green meeting. I take it that refers 

14 to meetings with Colonel North. 

15 A Thes* were five questions that Dan Conrad asked 

16 me to answer, five categories he asked me to address in 

17 this analysis, and this is the first page, I think. 

18 Do you have the other pages? 

19 Let me just concentrate on this page. 

20 The terminology that is used in these five 

21 lines, does this come from you or from Conrad? 

22 A It's from Dan. He wrote them down on a piece of 



UNCLASSIFIED 



859 



UNCUSSIFIED 



i81 02 02 - 83 

kepaulus 1 paper and then I copied them and then gave him the original 

2 and kept a copy of my analysis. To the best of my 

3 knowledge, he asked Kris to do the same thing. I don't 

4 know if Kris ever did. 

5 Dan was trying to determine how we were able to 

6 I bring in X amount of dollars from so many contributors and 

7 not from other contributors, and the analysis proved and he 

8 later made comments that we obviously were able to bring in 

9 the most amount of money after Green briefings, and so 

10 therefore we would be having another briefing on December 

11 10th on terrorism in Central America. Of course Ollie was 

12 unable to attend because he had been fired. So that never 

13 got off the ground. 

14 Before we get to that, let me keep you in 

15 August, if I may. 

16 Do you recall also in August of 1986 having an 

17 encounter or a meeting with Alfonso Robelo? 

18 A It was either the end of August or the beginning 

19 of September. 

20 What do you recall about that? 

21 A Alfonso and I are very good friends. I was not 

22 happy with the organization; I was not happy with the work 



UNCLASSIFIED 



860 



DNCUSSIFIED 



"^81 02 02 84 

kepaulus 1 that we vers doing, because we were now starting to focus 

2 on political ads and I wasn't in agreement with the kinds 

3 of political ads they j^ere going to be running, and I had a 

4 lot of questions as to the activities of the organization. 

5 I wanted to be working more on Nicaragua and more closely 

6 with UNO, and specifically the Robelo faction of UNO. 

7 Alfonso and I had talked about this and he agreed that it 

8 would be very helpful for me to be working more directly 

9 with UNO as a liaison of sorts. 

10 Liaison between UNO and what? 

11 A The UNO leaders would come in contact with 

12 people in their travels who wanted to help them, wanted to 

13 support them in various and sundry ways, and they didn't 

14 have an organization fashion of keeping in touch with these 

15 people. Alfonso felt that I would be excellent for this. 

16 I speak the language fluently. I'm talking about fellow 

17 Nicaraguans, fellow Central Americans, Mexicans that they 

18 would come in contact with. 

19 This would be outside of your employment with 

20 NEPL; is that right? 

21 A We were going to try and work it that it would 

22 not be outside my employment. It would be more like on a 



UNCUSSIf'lED 



861 



UNCmSSIHED 



381 02 02 

kepaulus 1 

2 

3 

4 

5 

6 

7 

3 

9 

10 

11 

12 

13 

14 i 

15 

16 

17 

18 

19 

20 

21 

22 



85 



consulting basis. He knew that Spitz would never give the 
okay, because Calero wouldn't want to upset Spitz in any 
way. It never got off the ground. Calero would never want 
to do anything that would upset Spitz, and it would have 
upset Spitz, so it never materialized. 

I had dinner with Alfonso and we were talking 
about how we were going to discuss this with Dan and try 
and get this materialized. I remember asking Alfonso point 
blank: "Are we the organization providing the most direct 
assistance to the freedom fighters?" He said, "Do you mean 
like Singlaub?" and I said, "Yes" and he said, "No." He 
said, "Absolutely not." He said, "You people help us a lot 
with the ads and some of the lobbying that you do." 

I was stymied by that response. I did not bring 
up to him w« had been working on this Toys project. I 
didn't sp«ak of it with him. But I then started to do some 
very serious investigating. 

That was incoosistent with your understanding 
that the money was to be ussd for military assistance; is 
that correct? 

A Totally inconsistent. Yes. 

Let me move you forward in time now to election 



UNCLASSIFIED 



862 



UNCUSSIFIED 



81 02 02 86 

kepaulus 1 eve at the Wlllard Hotel. Do you recall going to the 

2 Wlllard Hotel on that day? 

3 A Yes, I do. 

4 What happened there? 

5 A It was supposed to be a party to celebrate the 

6 return of the Reagan revolution. It didr.'t quite happen 

7 ■ that way, unfortunately. It was in a couple orivate suites 

8 in the Willard. A lavish party. They had televisions set 

9 up to monitor the election results, and maps and all kinds 

10 of paraphernalia, and booze and alcohol. They spent a lot 

11 on that. 

12 This is NEPL? 

13 A Yes. I think it was probably jointly. Probably 

14 NEPL participated financially. Attack and Sentinel. 

15 « Those are also Channel organizations? 

16 A Yes. I raised money for all of the 

17 organizations. 

13 Do you recall who was present at this gathering? 

19 A Yes. The entire staff. 

20 Of NEPL? 

21 A Yes. When I say staff, I mean anybody that 

22 worked for Spitz. I raised money for NEPL, I raised money 




863 



81 02 02 

kepaulus 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 



"iniissm 



87 



Cor Western Goals. There was no breakdown in who worked 
for whom. 

Do you also^ include people like Angela Davis 
when you say the whole staff was there? 

A Yes. Support staff as well as executive staff. 
Angela Davis was Channell's secretary; is that 
right? 

A Yes. 

Elleanor, his aunt; Eric Olson, his friend. 
Channell's friend? 
A Yes. 

And then a whole clan of their friends. 
Channell and Olson's friends? 
A Yes. There were maybe six or seven of them. 
Pawn Hall and her parents; Ollie's wife and 
their eldest daughter; Rich Miller and his wife. 
I don't think Frank Gomez was there. 
Was David Fisher there? 
A No, David Fisher wasn't there. 

Jackie Clemens was there; Jeff Keffer was there; 
Raphael Flores, Ernesto Palatsio. 

Do you recall any Toys contributors being 



UNCUSSiriED 



864 



ONCMFIED 



81 02 02 

kepaulus 1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 



38 



present? 
A 

A 


A 



No. 



Were any contributors present? 
There were a few. 
Any of yours? 
No. 

Ollie came over. 
Did North address the crowd when he came over? 
A Yes, he did. He came over and he told everybody 
to be quiet and he proceeds to read this letter that is 
addressed to Spitz from the President. It was applauding 
Spitz and his affiliated organizations for all the work 
that they had done, and blah-blah-blah. He presents the 
letter to hin. A very emotional letter. I think Ollie 
stayed for a little whll* and then he left. 

Q How long did the gathering continue? 
A I think it went until about 11:00. 
I gather there was no presentation on the 
freedom fighters at this meeting. 
A No. 

Who else was there? It seems we are leaving 
some important people out. Maybe I will remember. 



uNcussm 



865 



UNCUSSIFIED 



81 02 02 89 

kepaulus 1 Ms. McLaughlin, there came a time, I gather, 

2 that you went into the Channell offices and copied certain 

3 documents; is that correct? 

4 A Yes. 

5 Q That was on November 15; is that correct? 

6 A The ISth or 16th. I can't remember if it was 

7 Saturday or Sunday. I'm inclined to think that it was 

8 Sunday evening only because the chances of somebody being 

9 in the office on a Sunday evening were much less than 

10 Saturday evening. 

11 Q You have through your attorneys turned over a 

12 number of documents to us. Those documents are for the 

13 most part derived from the day you went in and copied 

14 documents in the Channell offices; is that correct? 

15 A Yea. 

16 Son* of the documents you have reviewed here 

17 today you produced through that copying effort. I 2un 

18 showing you Exhibits 1 through 4. 

19 A exhibit 3 I did not provide you. Exhibits I, 2 

20 and 4 were in my records. I didn't have to go to the 

21 accounting office for these. This was in my notebook. You 

22 can see the perforations. This is correspondence that 



UNCUSSIFIED 



866 



UNClASSinED 



90 



81 02 02 

kepaulus 1 involves ma, and this (witness pointing to Exhibit 4) was 

2 an analysis that I had done. Anything that I would have 

3 copied that day would have involved financial records of 

4 any kind. 

5 Did you take your notebook with you when you 

6 left the Channell organization? 

7 A I took the documents out of the notebook and 

8 then put papers in the notebook to make it look like the 

9 notebook was full. 

10 Then you took the contents of the notebook with 

11 you; is that correct? 

12 A Yes. They had been long taken. I couldn't have 

13 it look like I was leaving. 

14 1 gather you didn't leave copies of what you had 

15 in your noteboolc but left blanks for what you had in your 

16 notebook; Is that correct? 

17 A Yes. 

18 Was that done at some later time than the 

19 November IS copying? 

20 A No. That was done earlier. 

21 How much earlier? Do you recall? 

22 A I started removing things from my office in 



UNCUSSIRED 



867 



UNCLASSIFIED 



81 02 02 91 

kepaulus 1 October. Little by little. I had a lot in my office, a 

2 lot of books, a lot of files. I didn't take anything that 

3 was out in the open, because I didn't want it to look like 

4 I was leaving. I would just take everything from my 

5 drawers, because I could lock them and I had the 

6 combination. Nobody else did, so they couldn't get in and 

7 see that everything was gone. 

8 Do you recall making contact some time in 

9 November with Bruce Hooper? 

10 MR. COHEN: I don't think you nailed down the 

11 date of the Sunday evening that the copying took place. I 

12 may have missed it. 

13 MR. WOODCOCK: I think she said it was either 

14 November 15th or 16th. 

15 THE WITNESS: Yes. I had learned the week prior 

16 to that that I was supposed to be going to Germany with 

17 Spitz and company, and I worked it out that I would take my 

18 two^week vacation imnediately following this and then would 

19 probably leave altogether, but I waa being encouraged by 

20 some friends to stay until the end of December so that I 

21 could get my final paycheck and that we would probably be 

22 getting a lengthy Christmas^ Ijp^^li^^^ftyway. So I wanted to 



jetting a lengthy Christmas hPltlll^^ftyw* 

UNCUSSW 



ONCUSSIFIED 



92 



881 02 02 

kepaulus 1 make sure that I had everything that I felt I needed in 

2 j terns of answers to ray questions. 

3 BY MR. WOODCOCK: 

4 And that caused you to do the copying on the 

5 15th or 16th of November? 

6 A Yes. 

7 j Did you return to the matter of Bruce Hooper in 

8 November? 

9 A No. I didn't returned to it. Spitz returned to 

10 it. In late October he told me that he had been asked and 

11 designated by Ollie to be responsible for the funding of 

12 Ollie's off-duty trips to Central America, acting as direct 

13 liaison for President Reagan. Off-duty meaning off the 

14 White House schedule and off the White House payment of his 

15 trips. 

16 Did Channell give you any idea why North would 

17 b« traveling off the government payroll to Central America? 
13 A Because he couldn't jeopardize the ongoing 

19 investigations into his activities. He had to keep a very 

20 low profile, and that these trips would require about 

21 $91,000 a month. Spitz had started a new organization 

22 specifically for this purpose called the American 



UNCIASSIFIEP 



869 



UNCLASSIFIED 



81 02 02 93 

kepaulus 1 Cons«rvativa Poundation. He said, *We started a new 

2 organization, because we won't have to report anything to 

3 the IRS for a while, so nobody will have to know what this 

4 is all about." 

5 This is Channell talking? 

6 A Yes. 

7 You referred to investigations pending. Were 
3 these investigations of North himself? What were these 
9 investigations? 

10 A Congressional investigations into North's 

11 activities started in August. 

12 Is this Congressman Barnes' investigation that 

13 you are speaking of? 

14 A Yes. X don't know who else was involved in it. 

15 I just know that Congressman Barnes started it, I believe, 

16 or was instrumental in its beginning. 

17 Old Channell describe to you what it was about 

18 this mod* of travel that would assist Colonel North in 

19 circumventing or avoiding these investigations? 

20 A I am not following the way you have asked that. 

21 Q There are investigations pending against North 

22 and the investigations cause Channell to try to set up a 



UNCLASSIHED 



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UNCLASSIFIED 



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kepaulus 1 

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fund to help North travel to Central America; is that 
right? 

A I wouldn't say caused. I was just told that the 
reason he was going to be making off-duty trips was because 
he didn't want to give these Congressmen who were looking 
into his activities any more food for thought. 

Q How did the fund help him in avoiding giving the 

Congressmen more food for thought? 

A They wouldn't know about it, because it would be 
off duty. 

Is this what Channell was telling you? 

A Yes. 

After Channell gave you this information about 
the travel fund, the American Conservative Foundation, did 
you receive any Instructions about Hooper? 

A No. Bruce had called me to let me know he was 
coming (^own to Washington to attend this Heritage 
foundation dinner. 

What did you do with that information? 

A I told Spitz and Spitz said, "Terrific. I want 
to have lunch with him." Bruce hadn't met Spitz at this 
point. And he said, "I want you to get money from Bruce 



UNCLASSIFIEO 



871 



UNCUSSIHED 



95 



.881 02 02 

kepaulus 1 for Ollie's off-duty trips. I want you to get a minimum o£ 

2 S45,000 so that we can get Ollie taken care of for a 

3 while." 

4 Q Did you try and get Hooper and Channel 1 

5 together? 

6 I A We had lunch on November 17th. 

7 What happened. 

8 A We had lunch in the Hay-Adams. Spitz was very 

9 open about this project, which came as a surprise to me. 

10 This is the travel project? 

11 A Yes. 

12 And he was almost a little too loud. There were 

13 three other people in the dining room at the time. One of 

14 I them was very obviously a marine with an older woman and an 

15 older man, and he was very interested in what we were 

16 saying. 

17 Q You say that Channel 1 was very open about this 

18 fund. How did he do that? Vfhy do you say that? 

19 A He wasn't talking in implications; he was 

20 talking pretty straightforward, and he was referring to 

21 Bruce as a member of this very select group of very special 

22 people who were the financiers of these projects to help 



UNCI A.<;!;iFiFn 



872 



UNCUSSIFIED 



96 



881 02 02 

kepaulus I Ollie and to help the freedom fighters. 

2 In your experience it was unusual for Channell 

3 to speak not by implication? is that correct? 

4 A Right. It was very unusual. 

5 Do you recall what he said in particular to 

6 I Hooper? 

7 A He talked about how Ollie had asked him to be 
3 responsible for the financing of his off-duty trips, and 
9 Bruce agreed that Ollie would have to be really careful 

10 with how he proceeded with things because of these ongoing 

11 investigations. Spitz knew the on and off buttons for 

I 

12 Bruce. Bruce is extremely supportive of Ollie North. He 

13 thinks the world of him. 

14 Ifou know that from your conversations with Bruce 

15 Hooper; Is that correct? 

16 A Yes. 

17 Old Channell also openly describe the ongoing 
13 congressional investigations? 

19 A No, he didn't. He just referred to them. 

20 How did he refer to them? Do you recall? 

21 A He didn't have to explain much to Bruce. I'll 

22 backtrack for a second. When the investigations began 




873 



UNCIASSIHED 



,81 02 02 97 

kepaulus 1 Bruca called me and said he wanted Ollie's address, that he 

2 wanted to write him a note and tell him that things would 

3 work out all right for* him because he believed in what he 

4 was doing. I remember relaying that to Spitz, and Spitz 

5 said, "well, have him send a note to us and we will give it 

6 to Ollie." But I had already given Bruce Ollie's address. 

7 I remember calling Bruce and saying be very careful with 

8 what you say. He said, "Don't worry. I'm just going to 

9 make it seem like I am somebody off the street and don't 

10 know him or never met him and just wish him the very best, 

11 and wish him semper fi." That's all he did. 

12 So Bruce was very well aware of the 

13 inveatigatlon* and they didn't have to explain anything to 

14 each other because they both knew what they were talking 

15 about. 

IC Q But there was a reference to investigations 

17 without further definition; is that right? 

18 A That Ollle had to be very careful about what he 

19 did from here on out. 

20 Q But WAS there reference to the tern 

21 "investigations"? 

22 A I don't remember if the word "investigation* 



iiNHi h^m^ii 



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81 02 02 

kepaulus 1 was used. There was definite reference made to looking 

2 into Ollie's activities. 

3 Q That that was occurring? 

4 A Yes. That was well underway at that point. 

5 Q Old Channell say that? 

6 A Spitz said it. 

7 Did Channell link the secret fund or the private 

8 fund for Ollie's trips with the looking into Ollie's 

9 activities? 

10 A Which private fund? 

11 The American Conservative Foundation, the travel 

12 fund. 

13 A No. He didn't link it. I'm confused. 

14 MR. OUNHAMt What he means is did he discuss 

15 them together, in the same context with each other. In 

16 other words, 'we need to have this fund because of Ollie's 

17 trip*.- 

18 THE WITNESS! Yes. 

19 MR. DUNHAMS I think she said that on the 

20 record. 

21 MR. WOODCOCKt I just wanted to make sure. 

22 THE WITNESS: Yes. Definitely. He talked about 



IINRI A!s!;iFiED 



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uNCUissra 



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181 02 02 

kepaulus I how Ollis had asked him to b« responsible for this. The 

2 reason that he was giving was because Ollie had to be very 

3 careful with how he proceeded. And the President needed 

4 him. I remember that. The President needed him to act as 

5 a direct liaison on his behalf in Central America, and it 

6 had to be kept very confidential, very quiet, because of 

7 I all the controversy surrounding Ollie' s activities. 

8 BY MR. WOODCOCK: 

9 What was Hooper's reaction to all this? 

10 A He was very interested and seemed very 

11 supportive. Then Spitz asked him if he would stay an extra 

12 day. Spitz said, "I'm having dinner with the President." 

13 I'm positive that's how he said it — "we're going to a 

14 dinner with the President, and I have an opportunity to 

15 invite you and I would like you to come with us." 

16 The way he worded it it sounded as if we were 

17 having dinner with President Reagan privately. Of course 

18 he didn't tell Bruce that there *»ere going to be 2,900 

19 other people there. He did this a lot. He really gave 

20 people the impression that he was very closely tied to the 

21 President, and I don't believe that for a moment. 

22 Q You are referring to Channell? 



UNCLASSIFIED 



876 



UNCLASSiFIE! 



-81 02 02 100 

kepaulus 1 A Yes, I'm referring to Spitz. 

2 I Did Hooper stay over for that dinner? 

3 A Yes. First he said, "I can't. I've got to get 

4 back to Philadelphia." Then Spitz made a few other 

5 j comments that lured him in, and he said, "Well, you know, 

6 ' maybe I will stay. Maybe I can arrange to stay." That 

7 would have been Tuesday night, the 18th, the Ethics in 
I 

8 I Public Policy Center dinner was held at which the President 

9 I came and spoke for a few moments. There had to have been 

10 I 3,000 people at the dinner. It was huge. 

11 { Do you recall any Channell contributors other 

12 ! than Hooper being present? 

13 I A Ellen Garwood,! 

14 I ^H^^^^l And Pawn Hall cane to the dinner. 

15 Spitz always liked It to be boy, girl, boy, 

16 girl. It helped to have women around, for some very 

17 obvious reasons. 

18 This is at the table? 

19 A Yes. 

20 I can tell you the seating arrangement. We had 

was ^^^^^^^m^^H and 

22 marine, who I was later told is one of Ollie's pilots. His 



vad.v' 



llNCIAf;.^iFIFn 



877 



UNCLASSIFIED 



381 02 02 101 

kepaulus 1 nam* is Major Gil Macklln, Eugen* Gilbert Macklin. He's 

2 stationed In Hawaii. He was the same guy sitting in the 

3 Hay-Adams with this older woman and this older man 

4 listening very Intently to what we were saying. And even 

5 Bruce recognized it, because we both sort of said "I think 

6 we have an audience.' That's when the three of us would 

7 have sort of brought our heads In closer at lunch to 

8 discuss what Spitz was discussing. 

9 At that point you are referring to the lunch 

10 that was earlier had between Channell and Hooper and 

11 yourself? 

12 A The previous day. 

13 Who told you that Gil Macklln was one of Colonel 

14 North's pilots? 

15 A Spits did. Bruce recognized him as well I 

16 recognized him. Re came as Pawn's date. Bruce recognized 

17 him froa having been at lunch the previous day and went 

18 over to say something to him. A marine knows a fellow 

19 marine. 

20 Who did you sit beside at this dinner? 

21 A Bruce Hooper sat next to me. to my left; Spitz 

22 sat next to me, to my rlghtj Ellen Garwood sat next to 



IINRI ftRf^lFlFH 



878 



UNCLASSIFIED 



81 02 02 

kepaulus 1 

2 

3 

4 

5 

6 

7 

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9 

10 

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12 

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Bruce; Dan Conrad sat n«xt to Elian Garwood; Virginia 
Anderson sat next to Dan; Kris Littledale sat next to 
Virginia Anderson; Barbara Christian sat next to Kris 
Littledale; Gil Macklin sat next to Barbara Christian; Fawn 
Hall sat next to Gil Macklin. We're missing a boy. There 
wasn't a boy to separate Angela and Fawn. Angela Davis sat 
next to Fawn. 

Let me ask you a couple of questions about these 
contributors who were present. Was this the first time you 
had seen Ellen Garwood? 

A No. 

When was the first time you saw her? 

A At the January 30th meeting. 

Did you see her after that? 

A No. I don't think I did. She came to 
Washington a couple of times> but I didn't see her. She 
vaan't ray contributor. I didn't work with her at all. 

Let me ask you tha same series of questions with 
respect to ^^^^^^^^^^^^H Was the 




Anderson. I'd seen 



couple of times. 

UNCLASSIFIED 



879 



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kepaulus I 
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8 
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HNCIASSM 



103 



Do you recall when? 

A She came to some functions that we had. I don't 
remember which ones. I don't recall — yes, I do. We had 
some kind of a reception to thank members of Congress for 
supporting the President's aid package. I have it written 
down in a calendar somewhere when this reception was. It 
would have been after June 25th. In fact, it was probably 
in late July. And she came. 

This isl 

A Yes. And^^^^^^^^^Vwas there. 

Was that the first time you had met 



No. I can't remember the first time I met 
Maybe she was at the January 30th meeting — 




Pr,7.-,- 




was at the January 30th meeting, 



Did you meet her 



How about 
at that July function? 

A I think that was the first time that I met 



Had you met her between that time and the dinner 
in November? 

A No. 




^ip^ni 



WB 



880 



yNCUSSIFlEO 



81 02 02 104 

kepaulus 1 Do you want to gat back to Gil Macklin and how I 

2 learned that he is pilot for Ollie? 

3 Channell told you? 

4 A Yes. I didn't answer that yet. 

5 You told me that Channell told you. 

6 A Yes, but you asked me how did it happen that 

7 Channell told me that. 

8 How did it happen that Channell told you that? 

9 A Bruce stood up and went over and started talking 

10 with Gil. I was concerned, because Gil had been listening 

11 very intently to our conversation and I didn't know who he 

12 was and whether it was all right for Bruce to be talking to 

13 him. I asked Spitz who this guy was, that Bruce recognized 

14 him from lunch yesterday and he was the one listening very 

15 intently to our conversation. He said, 'Well, he doesn't 

16 know the work that we do, but he flies for Ollie." He 

17 said, 'Hb'a okay." That was all that was said about that. 

18 1 gather that shortly after the dinner the NEPL 

19 staff went to Germany} is that right? 

20 A The following day. 

21 What was the purpose of that trip? 

22 A The stated purpose was to meet with wealthy 



iiNCU<;^!^!rn 



881 



WlftSSlHB 



,81 02 02 105 

kepaulus Gamana and^^^^^^^^^^^^Hto discuss tha torch oC 

2 freadora projact. wa ware going to ba doing radio 

3 actualities on German radio stations and television ads on 

4 German television. There was absolutely no necessity 

5 whatsoever in the six of us going. 

6 Was there also a question at that point about 

7 possibly buying interests in German radio stations? 

8 A Oh, yes. That is what wa ware doing. That's 

9 what 1 was told to raise money for prior to even going. i 

10 I had stopped raising money altogether for NCPL. 

11 I Getting back to the dinner with Bruce Hooper, 

12 I Dan is over here and Spitz is sitting right next to me and 

I 

13 I he is going like this (witness gesturing with elbow) — 
I 

14 j 'did you ask Bruca yat? Is ha going to help Ollie? Is he 

15 going to halp Ollla?' Ha kept doing that all through 

16 dinner, and it was extremely annoying. 

17 I had told Spitz prior to tha lunch tha day 

18 previous that I didn't want to talk to Bruca about this 

19 projact, that I wanted Spitz to do it. I wanted nothing to 

20 do with thair private efforts. But to get him to stop 

21 jabbing me in tha side, I leaned over and I said to Bruce, 

22 'Are you going to help Ollie?* and he said, "I'm giving it 



iimi^fjiFiFn 



882 



mussro 



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.81 02 02 

kepaulus 1 serious thought.' I relayed that to Spitz later on, and he 

2 said, 'Fine.' Bruce was supposed to get back to me when we 

3 got back from Germany. 

4 But I had stopped raising money for any of the 

5 organizations with the exception of Western Goals. 

6 You had, I gather, raised at least some money 

7 before leaving on this West Germany trip; is that correct? 

8 A Yes. 

9 What was the purpose of raising that money? 

10 A For the radio actualities. Buying into these 

11 radio stations. There are going to be seven to ten private 

12 radio stations coming into existence some time soon in 

13 Germany. There aren't any. We were going to buy 5 percent 

14 ownership in three different radio stations. One was in 

15 Frankfurt, one was in Stuttgart, and one was in Berlin. 

16 What was the purpose of the acquisition? 

17 A To have an opportunity to put on very pro 

18 freedom, pro conservative radio programs in support of the 

19 conservative party of Germany, in support of western goals, 

20 western ideals. I didn't know anything about this torch 

21 project until we were over there. 

22 That is the project to build a torch in West 



IINCliWIFlfn 



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WNcwssife 



107 



981 02 02 

kepaulus 1 B«rlln; Is that correct? 

2 A Yas. 

3 You didn't 3tay with the entourage throughout 

4 its entire tour of Germany; is that right? 

5 A I left a day early. It probably wasn't even a 

6 I day early. 

7 Where did you go? 

8 A I took a train to Frankfurt from Cologne and 

9 then flew to Dallas, because I had an opportunity to meet 

10 up with a contributor in Dallas who was very interested in 

11 this Western Goals Germany project. I had decided that I 

12 j would go to Dallas, because it was cheaper to fly to Dallas 

13 I directly than to fly back to Washington with everybody else 

14 and then fly to Dallas. And I would be able to meet with 

15 ^^^^^|the day before Thanksgiving and then just come back 

16 and go on my vacation. 

17 Q ^^^^^V-' *^^* '^"°* °^ ^^* prospective 

18 contributor? 

19 A Yea. He was a contributor to Western Goals 

20 already, and I waa planning on going to see him In Dallas 

21 to discuss all that had transpired In Germany. 1 had all 

22 I this paraphernalia from Berlin. He had never been to tne 



iiNfiiiWiFn 



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kepaulua 1 

2 

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II 

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UNCLASSIFIED 



108 



Hail. It was a very amotional experience for me. 
To go the Wall? 
A It's just incredible.- 




(Whereupon at 12:50 p.m. the deposition was 



adjourned. ) 



UNCUSSIFIES 



885 



UNCLASSIFIED 



109 



CERTIFICATE OF NOTAI^Y P'J3LIC .". REPORTER 
I, 'lichael G. Paulus, the officer before whom the 
foregoing deposition was taken, do hereby certify that the 
witness whose testimony appears in the foregoing deposition 
was duly sworn by me; that the testimony of said witness was 
taken in shorthand and thereafter reduced to typewriting by 
me or under my direction; that said deposition is a true 
record of the testimony given by said witness; that I am 
neither counsel for, related to, nor employed by any of the 
parties to the action in which this deposition was taken; 
and further, that I am not a relative or employee of any 
attorney or counsel employed by the parties hereto, nor 
financially or otherwise interested in the outcome of the 



action. 



My ConBlsalon Expires 
February 29, 1992 




^gj*-^^*^ 



Notary Public in and for the 
District of Columbia 



M\)S^\^® 



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UNCUSSIREO 



110 



UNITED STATES SENATE 

SELECT COMMITTEE ON 

SECRET MILITARY ASSISTANCE TO 

IRAN AND THE NICARAGUAN OPPOSITION 

DEPOSITION OF JANE E. MCLAUGHLIN (CONTINUED) 

Washington, D.C. 
Wednesday, April 22, 1987 
Deposition of JANE E. McLAUGHLIN, recalled for 
examination pursuant to adjournment, at the Hart Senate 
Office Building, Suite 220, at 10:00 a.m., before Michael 
G. Paulus, a notary public in and for the District of 
Columbia, when were present on behalf of the respective 
parties : 

TIMOTHY WOODCOCK, ESQ. 
Associate Special Counsel 
Unltsd States Senate Select 
Comittee on Iran and the 
Nlcaraguan Opposition 

- continued - 




\imSMF 



^TO«Wom o( LO. 121S6 



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UNCLASSIFIED 



111 



THOMAS FRYMAN, ESQ. 

Assistant Majority Counsel 

KENNETH R. BUCK, ESQ. 

Assistant Minority Counsel 

United States House of Representatives 
Select Committee to Investigate 
Covert Arms Transactions with Iran 

HARVEY B. COHEN, ESQ. 

FRANK W. DUNHAM, ESQ. 

1400 N. Uhle Street 

Arlington, Virginia 22201 



UNCLASSIFIED 



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...ikepaulus 1 

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DHbUSSSflE 



112 



WITNESS 

Jane C. -McLaughlin 

( resumed) 

By Mr. Woodcock 

NUMBER 
5 



CONTENTS 
EXAMINATION 

113 

EXHIBITS 
IDENTIFIED 
129 



:i?.^r^ 



ussro 



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icmsife 



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PROCEEDINGS 
Whereupon, 

JANE E. Mclaughlin 

was recalled as a witness and, having been first duly 
sworn, was examined and testified further as follows: 
EXAMINATION (continued) 

BY MR. WOODCOCK: 
p Ms. McLaughlin, thank you for returning again 
and continuing this deposition. This is a continuation of 
the deposition that we began last week, April 15. The 
purpose for this continuation of the deposition is the sane 
that brought it to its beginning last week, and that is 
that this is part of an official Senate conunittee 
investigation. 

Thar* are also representatives from the House 
conniitte* here who are also here in their official 
capacities as representatives of the House Select Committee 
investigating the Iran-contra matter. 

I think w« Isft off with your trip to Dallas in 
November 1986. Could you begin with your arrival in 
Dallas? 

A I arrived in Dallas. When I got off the plane I 



890 



IINCIASSIREO 



114 



6600 01 01 

...i.kepaulu3 1 t called the office and spoke with Angela Davis just to let 

2 I her know that I had arrived safely and if anything was 

3 j going on that I needed to know about. 

4 ! She said, "Have you heard the news." Of course 

5 ! I hadn'tf because I had just been on a plane for several 

6 ; hours. She proceeded to tell me that Ollie had been 

7 I fired. "Green has been fired." She said both Ollie and 

8 Green. 

9 i I was stymied by that, although I was expecting 

10 1 something like this. 

11 ! I was immediately very concerned about the 

12 ' welfare of my parents and the documents which were in -ny 

13 house not locked up in any way. And there was only one 

14 1 copy of everything. 

13 I Ar« you referring to the documents that you 

16 I copied on November IS? 

17 - A Yes. The bank statements showing the Toys 

18 project funds, miscellaneous credits and debits, etc. 

19 Then my friend Linda Guell picked me up at the 

20 airport. We went to a hotel. That evening we went to a 

21 barbecue at Bunker Hunt's home, which was something she was 

22 involved in. She knew that I was going to be in Dallas, sd 

iiiiAi inoirirrt 



891 



mmvm 



6600 01 01 115 

...ikepaulas 1 I she invited me to this function, which was that night. In 

2 I fao-t, some of Spitz' contributors were there. It was for 

i 

3 I the Bothelezi tour. 

4 1 That afternoon when I got in I was to have 

5 I confirmed my appointment with a contributor that I was ta 

6 j see the following day for the Western Goals Torch project, 

7 j which is what we had worked on in Germany. I didn't call 

8 j him. I did not want to do anything, not even with Western 

9 i Goals. I was pretty much panicked. I had no idea what was 
10 j going to happen, and I didn't want to do anything. So I 

H didn't even call Jim Garvey. 

12 ; The next day I flew back to Washingto.., and that 

13 I is the day before Thanksgiving. 

14 I Did you go back to th« office at any time before 
I 

15 the end of Novaraber. 

16 " A Yes, I did. On Thanksgiving Day my parents and 

17 I w«nt to th« offices so I could take more of my 

18 belongings, more of my personal files, etc. I had already 

19 gotten most everything, but I wanted to take as much as I 

20 could without it being obvious that I was not there. 

21 My reasons for going by the office were 

22 twofold. I wanted to make coplbs. a4 bWi^ documents that I 



I wanted to make copies, ^gW^i 



892 



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II 

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19 

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UNCLASSIFIED 



116 



had copied already, since I only had one copy, one set, and 
I wanted to place the spare set in a safety deposit box in 
a bank for safekeeping. But I was too nervous. I was 
afraid to stay there for any extended period of tine. It 
took me several hours to copy everything that I had copied 
initially. So I just didn't want to stay that long. They 
don't have one of those copiers where you can just feed 
things through. 

You did, however, take some additional 
belongings of yours out of the office on that day? 

A Yes. Some books and some things off my desk 
that wouldn't make it appear obvious that I was not there. 

Q Did you have any further contact with the office 
in November? 

A I talked with Angela and I talked with Cliff. 
Because Cliff wanted my contributor book. They were going 
Co be doing som* kind of a mailing and they wanted my 
contributor book. Unfortunately, I had left it behind. I 
believe that copies of checks were taken out of that book. 
It was a loose-leaf notebook, and I had all my 
correspondence in it. If they took the checks, I am 
surprised they didn't take some of the letters from the 



893 



uNa^sslfe 



117 



6600 01 01 

.ikepaulus 1 likes of Bruce Hooper. I had copies of every check that I 

2 j had- ever solicited and gotten as a contribution, and all 

3 I those checks were missing. 

4 I Q You discovered that some time in January; is 

5 ! that right? 

6 A Yes. I discovered it after coming forward, 

7 because I couldn't find them. I still can't find them. I 

8 I am inclined to think that that was the book that was left 

9 I behind that Cliff wanted to look at. The checks are gone. 

10 i I don't know where they went. 
I 

11 1 They all thought I was in Miami vacationing with 
i 

12 i my former roommate. 

13 Q Your colleagues in the office thought this? 

14 A Y«s. 

15 I kept in touch with Angela pretty frequently so 
I ■ 

16 t'hat there wouldn't be any suspicion. It was decided that 

17 since 011i« had been fired we wouldn't be having our 

18 meeting on December 10 and that I could take the 10th 

19 through the 15th off and come back December 15. 

20 Q This reference to December 10, I gather that 

21 there had been a meeting scheduled with Oliver North that 

22 you were going to participate in; is that correct? 



894 



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7 ! 
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Do you know what the subject matter would have 



been? 



A Terrorism in Central America. 

Was that a contributor effort? 

A Yes. It was going to be. In fact, another 
purpose in my meeting with this contributor in Dallas was 
to talk to him about this. He is a very wealthy man and 
Spitz really wanted me to bring him aboard. They had tried 
to get him as a contributor and they never could, and then 
I was able to for Western Goals projects. I think he gave- 
for one of the PACs. 

This is Mr. Garvey? 

A Yes. 

Spitz wanted me to talk with him about this 
upcoming December 10 meeting and get him to come to that. 

I gather that with North's firing the December 
10 meeting was no longer on the schedule. 

A Right. 

With North having been fired and the meeting off 
the schedule, you were able to take a longer vacation; is 



that right? 



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A In the beginning I was told that I should come 
back for December 10. This was relayed to me by Angela. 
That they were still planning to have a meeting with 
another NSC official. I wasn't told with whom. I was just 
told that they were still planning on this. Several days 
later when I called in again and asked if I still had to be 
back for the 10th, they said, "No. It looks like we're not 
going to be having anything after all." 

When did you return to the Channell offices? 

A December ISth. Monday. 

Can you describe when you came to the Channell 
offices how it appeared and how that was different than it 
usually appeared? 

A When you come up to the third floor and get off 
the elevators there is a lobby. There are two very heavy 
wooden doors that were always open. But there is a code 
system. At night the doors have to be kept shut because 
anybody could just get off the elevators and come into the 
offices. These doors were always kept open during the 
day. All of a sudden they wore locked. There was this 
4-digit code that you had to punch in in order for the door 
to open, and it was changed. The receptionist had to have 



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UNCLASSIFIED 



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somebody buzz me in. Once I got in there, I think Kris 
gava rae the code. Kris or Fred. One of the fund-raisers 
gave me the code. There was a piece of paper on the door 
that said "No Unauthorized Personnel Beyond this Point." 
Which I just though^was bizarre. 

Then I got into the office and Beckie is 
carrying all of the ledgers, accounting books, etc., from 
the accounting office into the stockroom where there is 
huge safe that they had acquired from Western Goals in the 
acquisition of Western Goals. 

Q Beckie is Beckie Pritchett? 
A Yes. 

I asked her what she was doing, and she said, 
"I'm told to put everything in the safe." She was all 
upset because she didn't know how to get the safe open and 
rt was just a real pain for her. 

So I go into my office and there is a copy of 
this piece of pap«r that was on the front door that says 
"No Unauthorized Personnel Beyond this Point." 

Then there was a copy of the statement that 
Spitz had made denying the Knight Ridder News allegations. 
It was a press release, and it was given to me by Raphael. 



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UNCUSSIFIEO 



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.ikepaulus 1 It said "For your information." 

2 - Raphael's office was all the way down the hall, 

3 I completely away from all of us. His office locked. It 

4 I always locked. But Spitz' office. Cliff's office and Dan's 

5 office did not have locks on the doors. There was a 

I 

6 locksmith there putting a lock on Spitz' door, and I heard 

7 the same was going to be done for Cliff and Dan, and sure 

8 i enough, when I returned on January 5th, it was. 

9 Q You noticed locks on their doors as well? 

10 A Yes. 

11 Those were the major changes. 

12 Oh, there was something else. After Cliff had 

13 called us in and told us that because of all the turmoil, 

14 etc., etc.. Spitz would like to give us all an extended 

15 j holiday, Krl* came Into my little cubbyhole. Because I 

16 asked hla, I said, "Kris, my Godl what's going on?" 

17 Bscause I hadn't been there when all the reporters were 

18 coming and going. I wasn't subject to that. Of course I 

19 knew It was going on, but I wanted to see what he would 

20 say. 

21 He said, "Well, there's a disk missing from the 

22 Ann's desk." Ann was the receptionist. "These reporters 



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UNCUSSiFlEO 



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have been coming and going and you never know if some of 
them will get into the offices. You might want to take 
home anything that pertains to Toys." He said that to -ne . 
He said, "Any correspondence, any of your cards." Because 
they all kept cue cards. Salesmen often do that. They 
keep records of every prospect and what is said in every 
conversation. I never did that. I have a good memory. He 
said, "You might want to take your cards home. Anything 
that might be questionable or might lead somebody to think 
something." And he said, "Because I did." 

Did he specifically refer to Toys as being one 
of the categories you might want to take home? 



Yes, he did. He said, "Anything referring to 



Toys.' 



Q Did he explain why he was saying this to you? 

A No, he didn't. He really didn't have to. 

I gather that on this day that you returned, 
December IS, there was a meeting that Cliff Smith called; 
is that correct? 

A Yes. He told everybody to come into the 
conference room, all the fund-raisers. 



Q Do you recall who was present? 



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UNCUSSIRED 



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A Kris Littledale, Fred Fried, Liam Flannery, John 
Luti, myself, Cliff. I think some of the support staff was 
there. I think Mike lacobelis was in the room. Angela 
wasn't. I don't think Roger was. Raphael might have been. 

Cliff proceeded to say, setting the stage for 
Spitz denying the allegations, that this is absurd, that 
the liberals are out to destroy us. They always blamed 
everything on the liberals. And that the reporters are 
just having a heyday with this, and it will all blow over; 
it will all come out that we have not done anything that 
any patriotic organization wouldn't have done; they're 
searching for ghosts in closets where there aren't any 
ghosts. 

He just went on and on and said Spitz has 
decided that because of all this it would be best for as 
all to have an extended holiday until this blows over. 

Did Mr. Smith take any time to describe how he 
perceived those allegations, what precisely the allegations 
were? 

A No. He just referred to the allegations in 
Knight Ridder News. I hadn't even read it at that point. 
I knew about it. I mean I had learned about it from other 



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UNCLASSiREO 



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people, but I hadn't actually read it. And I didn't ask. 

Q Was this meeting with Mr. Smith followed up by a 
meeting with Channell? 

A Yes. We learned that Spitz was coming in 
shortly. So we were told to wait. The vacation was to 
start actually the following day, but I was going to go 
home. Dan actually told me to go home, because I was sick 
as a dog. I had a fever. I looked like death warmed over 
and had a very bad strep throat. But Dan said, 'Spitz is 
coming in. So just wait." 

When he came in he called us all in his office 
and proceeded to deny these allegations. He referenced 
that UNO was behind all of this; that it was Bosco 
Matamoros; they were all upset because they weren't getting 
what they thought they were going to get from us. 

UNO was upset? 

A Yes. 

Old he explain what it was that UNO thought it 
was going to get from the Channell organization? 

A They didn't get the kind of money that they 
expected to get from us. 

Do you mean amounts of money? 



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...ikepaulus 1 A Yes. 

2 I - He said, "God only knows what they would have 

3 I done with it if we had given it to them directly." 

4 I UNO? 

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5 ] A Yes. It was as if he was saying that they 

6 i weren't given the funds directly and that they were all 

7 I upset about this. 

8 I Q Did he make any statement about whether any of 

9 I the monies had gone for lethal aid? 

10 A No. When he said "God only knows what they 

11 would have done with it" Kris piped up and said, "Well, you 

12 know how the Latins are. You know how they run drugs and 

13 use women." Which didn't seem to make any sense. It 

14 I totally contradicted Kris' position and all our position, 

15 j because all along w« set out to refute these allegations, 

16 1 the disinformation that the contras are a bunch of drug 

17 runners. W« had set out to prove that this was not the 

1