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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:SeriaI 13765 

United States Congressional... 



Government 
Documents 



L3\Ji.. i leweENiFNOENT OF fCCUMENTS 

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



Senate Report 

No. 216 




IRAN-CONTRA INVESTIGATION 

APPENDIX B, VOLUME 24 
DEPOSITIONS 

United States Congressional Serial Set 

Serial Number 13765 



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 24 
Depositions 



Daniel K. Inouye, Chainnan, 
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 



lanited Starts Senate 

SELECT COMMITTEE ON SECRET MILITARY 

ASSISTANCE TO IRAN AND THE NICARAGUAN OPPOSITION 

WASHINGTON. DC 20510-6480 



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) 225-7902 



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 
Seiision, 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 foF->release to the public. 




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 Courter, 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. Raynor 
Joseph D. 

Smallwood* 
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 



John W. Nields, Jr. 
Chief Counsel 

W. Neil Eggleston 
Deputy Chief Counsel 

Kevin C. Miller 
Staff Director 



Special Deputy 

Chief Counsel 
Staff Counsels 



Press Liaison 
Chief Clerk 
Assistant Clerk 
Research Director 
Research Assistants 



Charles Tiefer 

Kenneth M. Balien 
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. Maibin 

Molly W. Tally 

Margaret A. 
Dillenburg 



Committee Staff 



Investigators 



Director of Security 



Robert A. 

Bermingham 
James J. Black 
Thomas N. 

Ciehanskj 
William A. Davis, 

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



Security Officers 



Editor 

Deputy Editor 
Associate Editor 
Production Editor 
Hearing Editors 

Printing Clerk 



Rafael Luna, Jr. 
Theresa M. Martin 
Milagros 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 24 



Preface XXI 

Rugg, John J 1 

Russo, Vincent M 33 

Sanchez, Nestor 124 

Scharf, Lawrence 241 

Schweitzer, Robert L 319 

Sciaroni, Bretton G 889 

Secord, Richard V 983 



Depositions 



Volume 1 



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



Volume 2 



Armitage, Richard. 
Artiano, Martin L. 
Associate DDO (CIA). 
Baker, James A., III. 
Barbules, Lt. Gen. Peter. 
Qarnett, 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 3 



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 Communicator. 

CIA Identity "A". 



XV 



Volume 5 

CIA Officer. 

Clagett, C. Thomas, Jr. 

Clark, Alfred (With Gregory Zink). 

Clarke, George. 

Clarridge, 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 



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



Volume 10 



Volume 11 



Furmark, Roy. 

Gadd, Richard. 

Gaffney, Henry. 

Gaffney, Henry (With Glenn A. 

Galvin, Gen. John R. 

Gantt, Florence. 

Garwood, Ellen Clayton. 

Gast, Lt. Gen. Philip C. 

Gates, Robert M. 

Glanz, Anne. 



Rudd). 



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., Jr. 
Ledeen, Michael A. 



Leiwant, 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 15 



Volume 16 



Volume 17 



Volume 18 



XVIII 



Miller, Richard R. 



Motley, Langhorne 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 m.eet 
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 v/ith 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 exliibits- documentary evidence -were developed by Select 
Committees' 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 



TRANSCRIPT '"' 
OF PROCEEDINGS 

UNITED STATES SENATE 

SELECT COMMITTEE ON 

SECRET MILITARY ASSISTANCE TO 

IRAN AND THE NICARAGUAN OPPOSITION 



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AL 



DEPOSITION OF JOHN J. RUGG 



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Washington, D. C. 
Wednesday, May 13, 1987 




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UNITED STATES SENATE 

SELECT COMMITTEE ON 

SECRET MILITARY ASSISTANCE TO 

IRAN AND THE NICARAGUAN OPPOSITION 

DEPOSITION OF JOHN J. RUGG 

Washington, D. C. 
Wednesday, May 13, 1987 

Deposition of JOHN J. RUGG, called for examination 
pursuant to notice of deposition, at the offices of the 
Senate Select Committee, Suite 901, Hart Senate Office 
Building, at 10:30 a.m. before WENDY S. COX, a Notary Public 
within and for the Distirct of Columbia, when, were present: 



TIMOTHY WOODCOCK, ESQ. 

Associate Counsel 

United States Senate Select 
Committee on Secret Military 
Assistance to Iran and The 
Nicaraguan Opposiition 






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2 ! WITNESS EXAMINATION 

3 ; John J. Rugg 

! by Mr. Woodcoclc 3 

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6 ^ 

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8 ; 

9 ! 

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PROCEEDINGS 
Whereupon, 

JOHN J. RUGG 
was called as a witness and, having first been duly sworn, 
was examined and testified as follows: 
EXAMINATION 
BY MR. WOODCOCK: 
Q Mr. Rugg, why don't we begin by having you state 
9 j your name and spell your last name for the record, please. 

10 -A John J. Rugg, R-u-g-g. 

11 i Q Mr. Rugg, what is your date of birth? 

12 i A April 6, 1935. 

13 I Q Could you, if you would, just give us a brief 

14 , background on your education and professional life? 

15 I A Well, professional life, I was a policeman — 

16 I first, okay, I was in the Vermont National Guard, I was on 

17 the local sheriff's department, I was a deputy; then I was on 

18 the city police in St. Albans, Vermont. Then I was chief of 

19 police in Vergennes, Vermont. 

20 Q V-e-r — 

21 A g-e-n-n-e-s. Then I went back to St. Albans on 

22 the police department and started working part-time for 






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UNCUSSIFIED 



Century Axms as a gunsmith. 

Q About when would that have been? 

A '60s, early '60s. In approximately '62 or '63 I 
went to work for them full-time. 

Q When you first went to work for Century Arms, who 
was the owner and president of Century Arms? 

A The owner at the time was Mr. William Sucher. 
Mr. Weigensberg was president, but the real owner was 
Sucher. 

■Q That's Emanuel Weigensberg; is that correct? 

A Right. He is brother-in-law to William Sucher. 
His wife and Mrs. Sucher are sisters. i^^-~^rrr 

Q- Did you at some point become a full-time employee 
of Century Arms? 

A In the early '60s, well, middle '60s, I became 
full-time. Then I took over as m^||[pir, I forget, around 
1970 — '69, '68, '69. '69. 

Q Now, when you took over as manager, what were your 
duties with Cmljiii iiijg Arms? 

A I run the St. Albans operation. They import the 
material into bonded warehouses, U.S. Customs warehouses. 
Then we remove them and sell them to Woolworth stores, K-Mart 



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1 ■] stores, things like that, and dealers all over the United 

2 I States. 

3 Q Did you have any inspection duties with respect to 

4 ! these duties? 

5 I A Pardon me? 

6 Q Did you have any in»E«ction duties with respect to 

7 these materials? 

8 i A Most- 4«tiititely. 

9 i Q What did that ca||8iiSt o£? 

10 • A Identifying them, sorting them*- making sure you 

11 ! get a good rifle, you are getting a good rifle. If you are 

12 i buying obsolete material, it's usually broken, unsafe to 

13 I use. 

14 Q How long did you remain in this management 

15 j position? 

16 j A Until April i9 of this year. 

17 Q Until April TO of this year, 1987? 

18 A Yes, sir. I also traveled foe- them in the last, 

19 about 12 years, 13 years, I have been traveling for them, 

20 involved in the purchasing from different countries of all 

21 the material. 

22 Q What was the headquarters of Century Arms? 



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A United States division was St. Albans, Vermont. 
It's a Vermont corporation. In Canada, I was manager of 
that. Canadian operation is separate. It was Century Arms 
Limited, Century International Arms. Mr-: Weigensberg, he was 
president of both. 

Q So there was Century Arms, Incorporated, is an 
American — 

A Is an American company, yes. Now it's called CIA 
now. Century International Arras. 

- Q Then there are two, I gather, Canadian divisions 
of this, or Century Arms Limited and Century International? 

A Limited, right. There is also -- I guess Crcwn is 
closed off, used to be an equipment outfit or corporation. 

Q Crown Equipment was associated with the arms 
field? 

A No, that was in machines, business machines, 
typewriters . 

Q And also a Canadian company? 

A All located at the same address. 

Q Now, did there come a point when Mr. Weigensberg 
left Century Arms? 

A Yes, about approximately two years ago, 2-1/2 



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1 : years ago, something around that time. He was bought out by 

2 ;j them as president. In other words, he owns no shares of 

3 I Century International now. 

4 I Q Up to that point, he did have a percentage of the 

5 ' Century International? 

6 I A Yes. 

7 ' MR. WOODCOCK: Let me stop just a minute. 

8 j (Discussion off the record.) 

9 BY MR. WOODCOCK: 

10 j ■ Q I think where we stopped was you were describing 

11 I about two years ago, Weigensberg left Century International? 

12 i A No, he was bought out, in other words. 

13 ; Q Okay, he was bought out. Now, after 

14 Mr. Weigensberg 's interest was purchased by the Sucher 

;l 

15 i family, I gather — 

16 i A Yes. 

17 i Q What did he do? 

13 A He stayed on, probably advising them at the time, 

19 you know, working with them at the time. 

20 Q Did there come a point where he set up another 

21 corporation involved in arms deals? 

22 A Yes. 



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1 ! Q When was that? 

2 i A Date, I cannot tell you. 

3 Q Approximate? 

4 ! A It must have been within six months to a year 

5 ' after. Had to have been for that time. All of a sudden he 

6 I came up with this new name, TWA. 

7 : Q TWA stands for what? 

8 : A Trans World Arms. 

9 Q To your knowledge, is Trans World Arms involved in 

10 ' anything other than arms? 

11 I A Other than arms, no. 

12 , Q Are there any subsidiary companies associated with 

13 Trans World Arms, to your knowledge? 

14 A I have no idea. 

15 i Q Do you know whether there is any relationship 

16 I between Century Arms and Trans World Arms? 

17 I A The only connection would be their telex was used, 

18 their office was used, telephones used. 

19 Q When you say "their, " who are you referring to? 

20 A Century International Arms. They are all in the 

21 same building. 

22 I Q Let me make sure I understand this. What you are 



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saying is that TWA and Century International are in the same 
building; is that right? 

A Yes, they share — well, Mr. Weigensberg' s office 
is still where it always was when he was president of Century 
Arms. 

Q Therefore, TWA has access to telexes and other 
equipment of Century International? 

A Yes, correct. 

Q Now, Mr. Rugg, let me direct your attention, if I 
might, to an arms transaction that developed in the early 
part of 1985, late part of 1984. Are you familiar with an 
effort by TWA to purchase arms| 
^^^■Iduring that period? 

A Yes. 

Q How are you familiar with that? 

A I was on a trip^^^^^^Hto purchase small arms, 
old pistols and rifles, things like that. It was brought up. 
questions were asked of people at that tir 

[about the possibility of buying SAM-7s, th»[ 
prices, 7.62 -- 

MR. WOODCOCK: Off the record. 
(Discussion off the record.) 



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1 I THE WITNESS: 7.62, ammunition. 

2 I BY MR. WOODCOCK: 

3 Q All right, now, who is it that is giving you this 

4 ■ information? 

5 A This was the manager at the time of 
6 

7 I Q That was who? 

8 I A ^^^^^^^H I guess, I can't pronounce it. All 

9 spelled the same way,^^^^^^|l think, I am not positive. 

10 They all came out witftSM^ SAme name,^^^^^^^^^land — 

11 never mind. 



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Q You were receiving this -Information on the weapons 



13 , order from^^^^^K is that correct? 

14 . A Just the prices, prices, and work — where they 
could ship it to. 

Q That is 

A Ye8,^^^^^|What were^^^hey end users for. 
Q Who was inquiring o^^^^^^^Babout this 
information, was it you? 

A Mr. Suchet^' -st&'k ^ 

Q That is Mr. Michael Sucher; is that correct; 




A Michael„S.uqhert right. 



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Q On whose behalf is he inquiring, do you know? 

A Mr. Weigensberg, TWA. 

Q All right, now, at this time, did you receive any 
information from Mr. Sucher or^^^^^^^Vas to who it was 
Mr. Weigensberg was placing this order for? 

A No name was mentioned. 

Q Not at that time — 

A No . --«i«iiS= • •^- _ ■ 

Q — is that correct? Did you later learn of a name 
that' was associated with this arms transaction? 

A Not for sometime ittife. It was probably about the 
time that I gave the report that Secord's name popped up in 
that spring, spring of '85, March of '85. His name started 
to appear. 

Q That is Richard Secord; is that correct? 

A They called him Dick Secord. 

Q You knew the name as S-e-c-o-r; is that correct? 

A No, S-e-c-o-r-d. 

Q You knew it had a "d" on there? j 

A Yes . 

Q Now, did at any point you learn from either 

Mr. Sucher or others where this ammunition was intended to 

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A I found out later, much about the same time,abou- 
March, that it was going to^^^^^^H They finally got end 
users ^'^^^^^^^^H- 

Q Let me back up a minute. Do you recall from whom 
it was where you leaijned these arms were going? 

A It was rumor in the company. 

Q Is that also true of the name of Mr. Secord? Was 
that a rumor within the company or dl fufc || i t b ody^ell you? 

■ A No, that was — calls were made to Secord, 
Weigensberg would come down to St. Albans, he would make 
calls from my office or Secord would call him at different 
times . 

Q How did you know he was calling Secord? 

A He told me. 

Q That is, Mr. Weigensberg told you? 

A Right. 

Q Did you receive any information from 
Mr. Weigensberg as to whether Secord was ever in the U.S. 
armed forces? 

A No. 

Q Did you have an understanding as to whether he had 



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ever been in the Army or the Air Force? 

A I learned after .they called him -- he was an Air I 
Force general. I 

Q Where did you learn that from? | 

A I can't remember how I found out. 

Q Did you have an understanding as to whether Secord 
had any affiliation with the CIA or any other U.S. government 
agency at the time? 

A This never came ov^^ this l»^fi. it was '«uppo8ed 
to have beehr^Mr. Weig«hsbrt^sai<r-1# was working #th tTie 
big people in Washington. 

Q That is he or Secord was or both? 
A But he was working with the people in Washington. 
He met Secord through Mr. Thomas Green. 

Q Thomas Green is an attorney for TWA? 
A Well, he was also an attorney for Mr. Weigensberg 
back when he owned Century in a customs case we had here in 
Washington. He was hired to be the lawyer for us at that 
time. That's how Mr. Weigensberg got to know Green. 

Q I see. Did you ever hear from Mr. Weigensberg how 
it was that he came to know General Secord? 
A Through Tom Green. ■ 






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1 '■ Q Did he tell you when that introduction occurred? 

2 ; A No. I know he made a trip down here to meet him, 

3 apparently, in Washington. Meet somebody in Washington. I 

4 I don't know who. Big secret, according to them. 

5 Q Do you remember when that would have been? 

6 A Can't offhand. He was down here once last year to 

7 see him. 

'a Q 

9 i A 

10 i ' Q 

11 ■ A 

12 Q 

13 ; A 

14 . Q 

15 Mr. Secord. 

16 I A Earlier. 

17 Q Earlier? 

18 A Oh, definitely. He was down here — he flew down 

19 directly from Montreal, but I knew of him, where he was. 

20 Q Now, did you receive any information on whether 

21 there was a problem in this effort to acquire arms, 
^^^^^^^^^^^^^^^^^^^H regarding user 

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In 1986? 

Yes. 

Had he visited Washington before March of '85? 

yes. 

Is that what you were referring to earlier? 

Yes, earlier. 

He said perhaps he thought he was introduced to 



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A Yes, because they were — at that time, they were 
asked whether they would accept the end users from. 

Q At that time you are talking about 

Yes ,^^^^^^^^^^^^Ht well, they b( 

all right, then it wouldn't be all right. Then they didn't 
want to ship to Central American countries. They didn't wan' 
to get involved there whatsoever. Then we spoke ol 
for end users, then they spoke o^^^^^^Hfor end users. 

Q This ij^^^lall the time, right? 
. A Yes .^^^^^^^^^^H were going crazy by that time, 
they didn't know what the hell was going on. Excuse that. 
Then they finally accepts 

Q Where were you while you were going through these 
gymnastics? 

A I was there. 

Q This is taking us back to 1984? 

A Right. Finally^^^^^^Hwas accepted after. We 
did that by telex apparently. 

Q You have shown me your passport showing that you 
were into^^^^^^^^^^^^^^^^^^^^^Hin 
November of '86 and stayed there until December 6, 1984; is 
that correct? , . ^ .. a- - ; 

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is that correct' 



A Yes, it is. 

Q It would have been during that period when you 
would have heard this conversation; is that right? 

A Right, meeting the people fron 

Q That would include 

A Correct. 

Q I gather then that it was your understanding that 
ultimately the 
people, ended up agreeing that they would — 
■ A Accept. 

Q Accept^^^^^^^^^l^Pend user 

A Apparently. 

Q Do you recall any delay in the actual shipment of 
these materials that Mr. Weigensberg was trying to acquire? 

A Yes. 

Q What do you recall about that? 

A Well, he was -- they were on his back getting 
delivery, the Secord people, and he was trying to get moving, 
and letter of credits, according to the banks, weren't right 
Then the shipment couldn't get there to the piers, 
and it took quite a while. 

Q Do you have any idea when these arms might have 



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arrived' 
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No. 

Or might have been shipped? 

(Witness nodded head.) 

Now, Mr. Rugg, do you recall a shipment of arms 



coming mto^^^^^H 
A I don't. 



by air, possibly in late January, '85' 



Q You don't? 

have been^^^^^^^^^^^H||. 
■ Q Why don't we take a moment and talk about that. 
A One thing I want to bring up to you. 
Q Yes. 

A In the Soldier of Fortune magazine, the crackpot 
magazine, I call it — 

MR. WOODCOCK: Off the record. 
(Discussion off the record.) 
BY MR. WOODCOCK: 
Q I will ask you to recount that story. From there 
we will go to — I want to ask you questions about the 
Bahamas and Cajprafiff^slands. 

Mr. Rugg, do you recall hearing a story from an 
associate in the arms industry about a photograph appearing 



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in Soldier of Fortune magaiine? 

A Yes . 

Q What do you recall about that? 

A It was an issue last sununer, came out last sununer, 
comes out once a month or two months, whatever it may be. In 
there was a story about the Contras, the problems and their 
squabbling down there. In there was a picture of a soldier 
putting his boot on, stuck in a case of ammunition, empty 
case of ajnmunitioni 




Q How do you know that? 

A Because of the color of case, type of case it was, 
it was small arms ammunitions case, 7.62 millimeter ammo 
case. On the side of the case was printed in big letters, 
"CIA, Montreal, Canada.' 

Q What did that mean to you? 

A Century International Anns, Montreal, Canada. 

Q Do you remember any controversy being generated by 
this photograph? 

A Yes. The Canadian government, when they found 
that, were quite upset. They did come in and question some 
people at Century. Now, whether it was Weigensberg or not, I 






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1 , don't know. Usually they throw Prokos to the dogs. 

2 . Q Why, in your opinion, would the Canadian 

3 government been upset by the photograph? 
I 

4 I A Apparently because of the nonintervention bill 

5 ■' they passed up there in Canada. 

6 : Q What was your understanding of what that 

7 ' nonintervention bill did? 

8 A No Canadian is supposed to play around in anything 

9 I down in Central America. 

I 

10 I ■ Q Do you recall Mr. Weigensberg being questioned at 

11 ; all about this photograph? 

12 I A I knew that they were questioned. Now, whether hi 

13 j was questioned or Mr. Prokos, usually, is the man that does 
I 

14 the talking for him, they throw him to the dogs. 

15 ' Q When you say question, that would be Canadian law 

16 I enforcement officials? 

I 

17 A Prokos told me Canadian security. Department of 

18 Security. What that is, I don't know, in Canada. 

19 Q I gather that your information on the Canadian 

20 security investigation comes from Mr. Prokos; is that 

21 correct? 

22 A Yes. 



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Q That is Theo Prokos, T-h-e-o? 

A Yes. He is their commercial director. At Century- 
Arms -- Century International Arms, excuse me. 

Q Did these inquiries coming from Canadian security 
people follow shortly upon the appearance of this picture? 

A Yes. '^^■ 

Q This would have betfB^gainr, H:ho summer of '86? 

A " 



Q Now, Mr. Rugg, did you receive any information on 
funds for arms purchases coming either through the Bahamas or 
the Cayman Islands? 

A Yes. This information came to me through, again, 
through Prokos . 

Q How did he happen to tell you about it? 

A Well, because I was discussing with him on the 
telephone, saying, you are playing around with a bunch of 
fruit toots, never see any money^ qnt^-of anything anyway. I 
didn't know what he was doing. 

Q Who are you referring to? 

A Weigen«b«rg and referring to the people working 
with him, at that time, really trying to figure out who is 
who. And Theo said no, there is no problem, they put up 400 



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and some odd thousand dollars in cash in the Islands, 
somewheres, either Bahamas or Cayman. It was transferred to 
Montreal and back to Canada. 

Q Did you understand that money to be associated 
with the Secord group? 

A Yes. 

Q Was that through Mr. Prokos that you understood 
that? 

A Yes. 
• Q Now, I gather you also received information that 
arms were coming to the Secord group from Portugal; is that 
correct? 

A One shipment that Weigensberg made through 
Portugal . 

Q Do you recall about when that would have been? 

A Offhand, I can't. In the fall, that was either 
probably the fall of '85 — I remember it was wet, rainy 
weather, we got soaked. 

Q So it would be either the fall of '85, possibly 
fall of '86? 

A Could be, might have been. 

Q Do you recall who you would have received that 



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information from? 

A Prokos . 

Q Did Mr. Prokos tell you what that shipment 
consisted of? 

A Just that — grenades and rockets and so forth. 
He didn't say what kind. 

Q Did he indicate whether there were any middlemen 
involved in that transaction other than Century Arms or TWA? 

A I don't know how you are referring to that, same 
peqplA^ere purchasing^he-dnaterials before ,^^^^^^^B in 
other words, the same group. 

Q These materials that are coming through Portugal 
are ^^^^H materials; is that your understanding? 

A No, as far as I can believe, they were Romanian. 

Q Other than TWA, is there any other arms merchant 
that is involved in this transaction, to your knowledge? 

A Not that I know of, sir, except Secord, I believe 
that's where it was going. 

Q You also understood from Mr. Prokos that it was 
going ^°^^^H^H is 

Right. The plane was transferring material in 



A 

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Q Now, Mr. Rugg, I am going to ask you a couple of 

names to see whether you have heard of these individuals. If 
you have not, simply say so. 

Have you ever heard of Albert Hakim? 

A No. I have heard of him in the paper, just since 

this has started. Before that, no. 

Q How abou- a Mr. Willard Zucker? 

A No. 

Q Have you ever heard of Thomas Clines? 
' A Only through the papers and the recent 
investigations. 

Q Through your position with Century Arms, ever hear 
of an attempt of General Secord's group to sell East Block 
arms in the summer of 1986 into the early fall of 1986? 

A All I know is what was going on in 1986 is that we 
were looking for material, radar equipment and so forth, and 
Weigensberg was still looking for prices on missiles, rockets 
and so forth. I presume that's who he was working with then, 
but nothing ever materialized. 

Q Let me back you up onto that subject, then. You 
say that you were aware that Mr. Weigensberg was looking for 
radar materials? 



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1 I A Russian-made radar equipment. 

2 : Q In 1986; is that right? 

3 ^1 A Yes. 

4 ; Q Was it your understanding that that was at the 

5 1 behest of Secord's group again? 

6 1 A I presume so. I wasn't told it was. I wasn't 

7 S told it wasn't. 

si Q So no one affirmed one way or the other who the 

9 I inquiring party was; is that correct? 

10 I 'A I took it for granted, but that's all -- I could 

11 ■ take for granted who it was going to. I am not positive, 

12 though, no names were mentioned at the time. 

13 i Q Are you familiar with a Portuguese company by the 

14 name of Defex? 

15 I A I have seen the name before, yes. 

16 I Q What do you know about Defex? 

17 i A Nothing. 

18 Q Other than having seen the name? 

19 A Just saw the name, that's it. 

20 I Q Are you aware that it's in the arms market? 

21 1 A Defex, no, I am not aware. I would imagine, 

22 I because in Portugal, any of those companies that are involved 



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in arms, they want to be. Like you hire an agent there. C 
of them is Soeteo; if you are going to work for the 
government there to buy old surplus material, you have to 
have an agent. You can't work direct. So it could be any 
one of those companies. 




Q Mr. Rugg, you are familiar, are you not, with the 
purpose of end user certificates in the international arms 
market? 

A Yes, I certainly am. 

Q End user certificate is indispensable to 
completing certain arms transactions; is that correct? 

A Yes, definitely. 

Q Did you ever hear, either directly or by rumor, of 
end user certificates from^^^^^^^H being on the market 
that would authorize -- 

A No. 

Q --^^^^^^^Has a final destination for British 
blowpipes? 

A No. ^ ... _ ; ^^ 



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Q Have you ever heard of General John Singlaub? 

A I have heard of him in the papers, yes, that's 

Q But not through your professional work? 

A No , no . 

Q How about Barbara Studley? 

A No. 

Q Or Geomilitech? 

A No. 

Q Have you ever heard of a Ron Martin? 

A Yes. 

Q Have you heard of him in your professional 

capacity -- 

A Yes. 

Q — associated with an arms dealer? 

A Yea. 

Q What do you know of Ron Martin? 

A Well, he was involved with the partner, with 
Tamiami Gunshop in Miami. 

Q Do you know whether Century Arms or TWA had any 

business with him? 

A I am not sure. 

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theirs? 

A I would believe so. 

Q Did you receive any information with respect to 
Mr. Martin's involvement in the movement of arms to Central 
America? 

A Just nimors. 

Q What were the rumors? 

A Material, he bought material from other countries, 
^^^^^^^^^^^^^^^^^^^^1 because he a there 
the Army, colonel, major, colonel. 

Q What was the value of routing it 
j^^^^^H to your understanding? 

A Apparently end user there, it could go anywhere 
else, that's going by rumor. 

Q I understand. 

A Then he got in trouble with the U.S. government. 

Q That is Martin? 

A Pardon me. 

Q Martin got in trouble with the U.S. government? 

A He was, that's right. 

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what was called an arms supermarket^^^^^^^^B* 
A NO, I didn't. Off the record. 
(Discussion off the record.) 
BY MR. WOODCOCK: 
Q Mr. Rugg, have you ever heard the name of a 
Mr. Olmstead? 
A No. 

Q You never heard that in connection with the Secord 
group; is that right? 

- A No, never heard that name, sir. 

Q Now, Mr. Rugg, to your knowledge, during your 
period of employment with Century Arms, did Century Arms have 
an affiliation with the CIA? 

A Not that I Icnow of. 

Q Did you ever know Mr. Weigensberg to go by any 
name other than Weigensberg? 
A No. 

Q Did you ever know him to go by the name Wiggins? 
A Yes, I have heard that. 

Q Why would he go by a name other than Weigensberg? 
A Doesn't sound Jewish, I guess. I have no reason. 



I have no idea. 



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18 
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20 
21 
22 



iisiisffl 



29 



Q How about Weisenberg, have you ever heard him go 
by that name? 

A Yes, people called him Weisenberg by mistake. 

Q But you, I gather, have never known him to 
deliberately use a name other than his own; is that correct? 

A No, right. 

Q Other than Wiggins? 

A Right . 

Q At least to your knowledge, the use of the name 
Wiggins was not used for business purposes; is that correct? 

A No , no. 

Q It wasn't used to obscure his identity, in other 
words ? . 

A Unless I didn't know about it. If I did, I would 
tell you. 

Q You don't know of him trying to obscure his 
identity; is that correct? 

A No. 

Q Let me ask you a catch-all question. Can you 
think of anything relating to these arms transactions that I 
have not asked you that you would like to tell me? 

A N^tStifcg'ji *((»*lly tin t6ll you, except what you 



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asked. 

Q You are no longer affiliated with — 

A Century Arras . 

Q Century Arms? 

A Century Arms, no. 

Q Are you in retirement now? 

A I wish I could say that, yes. No, I am working 
for another company, Springfield Sporters in Pennsylvania. 

Q What does that company do? 
' A They buy old surplus guns and parts and we sell 
them in the United States here. 

Q They are not affiliated with Century International 
or TWA; is that correct? 

A In fact. Century is threatening to sue me for 
antitrust laws. Maybe I will hire you as an attorney. 

Q Then you will know the meaning of the word 
trouble, I guess. That's all I have. 

(Whereupon, at 11:10 a.m., the deposition was 
concluded . ) 



JOHN J. RUGG 



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»J¥ffciXTE OP NOTAilY PUBLIC S REPORTER 



I, WENDY S. COX , 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 
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or otherwise interested in the outcome of this action. 



Notary PubliQ in and for the 
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My Commission Expires NOVEMBER 14, 1987 



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CONSERVE PAPER • REUSE THIS LABEL 

UNCLASSIFSED 

THIS IS A COVER SHEET 
FOR 
INFORMATION SUBJECT TO 
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INFORMATION SECURITY PROGRAM REGULATION 
DOD 5200. 1R AS SUPPLEMENTED BY COMPONENT 
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THE UNAUTHORIZED DISCLOSURE OF THE INFOR- 
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t.aliy 0t::5;^i:';^/Selsase.i nn Ji-l3>€C^' J 
I'mJer ^w.^r.n'. of E.O. ;2:W 
byBHB National .^ecurit/ Courts 




UNCLASSIFJED 1^°^' 

(TKU cover •h«M u lUielaui/Ud wfccR $tpamUdfrom Mauifiad iocumumtt) 




nHvioM comoHS or tms um am owoitn 



34 



UNCLASSIFIED 



BEFORE THE CONGRESS 
OF THE UNITED STATES OF AMERICA 



-------------------X 

In the Matter of: 

THE SENATE SELECT COMMITTEE ON 
SECRET MILITARY ASSISTANCE TO 
IRAN AND THE NICARAGUAN OPPOSITION 

AND, 

THE HOUSE SELECT COMMITTEE TO 
INVESTIGATE COVERT ARMS TRANSACTIONS 
WITH IRAN 

-------------------X 



TRANSCRIPT OF ORAL DEPOSITION 



Deposition of LIEUTENANT GENERAL VINCENT M. RUSSO, 
US Army, a witness of lawful age, taken on behalf of the 
United States Senate and House of Representatives Select 
committees in the above-entitled matter, pursuant to agreement, 
before Colonel John K. Wallace, III, US Army, an officer 
authorized to administer oaths under the provisions of the 
Uniform Code of Military Justice, at 901 Hart Senate Office 
Building, Washington, D.C., 20510, at 1:30 p.m., on Tuesday, 
16 June 1987. «■-.,,> - j .,- , ^ ^/a/Tc^"? 

* * * amUf pfOYisiDn-; of E.O. 12:56 



UNCLASSIFIED 



h B^V' Nationai ^ecurlt/ Council 

" OHfOSOnO 



35 



UNCLASSIFSED 



APPEARANCES : 

JOHN SAXON, Attorney-at-Law 

901 Hart Senate Office Building 
Washington, D.C., 20510 
Associate Counsel for the 
Senate Select Committee 

ROBERT W, GENZMAN, Attorney-at-Law 
115 Annex I, The U.S. Capitol 
Washington, D.C., 20515 
Associate Minority Counsel for the 
House Select Committee 

SosTl. kreuzer, Av*^•^J^'^ 

JOSEPH P. SABA, Attorney-at-Law 
419 Annex H, The U.S. Capitol 
Washington, D.C. , 20515 
Associate Counsel for the 

House Select Committee -• ^?~-' -^ 

ROBERT J. WINCHESTER, Attorney-at-Law 
Room 2C631, The Pentagon 
Washington, D.C, 20310-1600 
Special Assistant to the_ ^^ 

Secretary of the Pi.rmvr^sS3at6Mon . John Marsh, Jr. 



COLONEL JOHN K. WALLACE, III, Attorney-at-Law 
Room 2C6 34, The Pentagon 
Washington, D.C, 20310-1600 

Chief, Investigations and Legislative Division 
Office of the Secretary of the Army 

ALSO PRESENT: 

ROBERT S. KASS, Verbatim Reporter 
Room 1E744, The Pentagon 
Washington, D.C, 20310-1722 
Investigations Division, U.S. Army 
Inspector General Agency 



UNCLASSIHED 



UNCLASSIFIED 

3 

CONTENTS 

WITNESS ; PAGE 

LIEUTENANT GENERAL VINCENT M. RUSSO, US Army 

EXAMINATION BY ; 

Attorney Saxon 4 

Attorney Kreuzer 20 

Attorney Saxon 22 

Attorney Kreuzer 23 

Attorney Saxon 23 

Attorney Kreuzer 35 

Attorney Saxon 36 

~^ Attorney Kreuzer 69 

Attorney Saxon 70 

Attorney Saba 82 

DEPOSITION EXHIBITS; IDENTIFIED 



No. 1 (page 1) 
(page 2) 



No. 1 



No. 2 (S) 



No. 3 (S) 



No. 4 (TS) 



Note from Tom Tavlor to 45 

MG Russo, dated 13 Feb 

Memorandum for the Secretary of 45 
the Army from Susan J. Crawford, 
General Counsel, dated 13 Feb 86 

Memorandum for Record, sub j ; 49 
Support for Intelligence Activities 
by Vincent M. Russo, dated 25 Feb 86 

Memorandum for Record, sub j ; 76 
ODCSLOG Support for Project CROCUS, 
by Vincent M. Russo, dated 24 Sep 86 



* * * Memo for Record dated 1 Dec 



79 



NOTE; Due to the sensitive nature of Deposition Exhibit No. 4 
above, this document has remained in the possession of counsel 
who possess the requisite security clearance. 



UNCLASSIF:La 



37 



UNCLASSIFIED 



PHOCBgPIMGS 

(1:30 p.B.i 
Whereupon, 

LTG VINCENT M. ROSSO 
was called as a witness and, after being first duly 
sworn, was examined and testified, as follows: 
EXAMINATION BY COUNSEL: 
BY MR. SAXON: 

Q. 411 right, sir; If you would state your naae 
for the record? 

A. Vincent M. Russo. 

Q. And what Is your occupation, sir? 

A. I'b a U.S. Army officer. 

Q. What Is your rank? 

A. Lieutenant General. 

Q. And what is your current assignment? 

A. Director of the Defense Logistics Agency. 

Q. And when did you assume that position? 

A. 9 July 1986. 

Q. And Immediately prior to that assignment what 
were you doing? 

A. I was the Assistant Deputy Chief of Staff for 
Logistics at the headquarters. Department of the Army. 

Q. And would I be correct In saying that all of 



IJNCLASSIFIED 



5 
the period that we should be concerned with would 
Involve your time In that asslgnoentf 
A. Until 9 July, yes. 

MR. SAXON: All right, sir, let me say f rom - 
the outset, first of all: That when I refer to the 
fact, that we nay have met before or that you have told 
us certain things In the Interview, I have In mind the 
fact that three members of the Senate staff met with 
you on April 8th, 1987 In your office at DLA. So for 
subsequent readers of this record, if I say you told us 
on such and such a date, sir, that's what I have 
reference to. 

WITNESS: Okay. 

BY MR. SAXON: 
Q. Before having you walk through the chronology 
of your involvement with what became project Snowball 
and project Crocus; I want to ask you some specific 
questions to try to get on the record your knowledge, 
your understanding and what may have passed from you to 
certain people or from them to you. 

Let me ask you first of all: 

General Russo, at any time when you were 
Involved with TOWs and Hawk missile repair parts, did 
you know the ultimate destination was going to be Iran? 
A. No, no. 
Q. You did know the destination was to be the 



UNCLASSIFIED 



39 



GNCLASSiFED 



CIA; 13 that correct, sir? 

A. Absolutely. 

Q. If you had known that the destination was to 
be Iran; would that have affected In anyway what you 
did? 

A. I don't believe so. 

Q. And why would that be, sir? 

A. Well, I guess it was the faith and confidence 
that I had for General Thurman. 

Q. That would be General Maxwell Thurman, the 
Vice Chief of Staff of the Army? 

A. Yes, and if I might Just elaborate on that 
for a moment. In the connection of the overall 
intelligence/black community or black work, in my 
position as the Assistant Deputy Chief of Staff for 
Logistics, I had been aware of and had participated in 
a number of meetings, stretching back . . . oh, I would 
say, into the early 1965 period. 

And during that period of time. General 
Thurman, through his actions and directions, had 
indicated to me a very strong sense of commitment to 
doing what was right in this area -- which heretofore, 
perhaps, the Army had not the best record in the world 
of doing it that way. 

And so he laid the things into existence to 
tighten up that whole process of doing what was 



UNCLASSIFIED 



40 



^fiOUSSlFiEQ 



correot; what was proper from not only a Departaent of 
Defanse, but from a nation's standpoint. So It's fron 
that perspective. 

Q. And Just for the record, would you have In 
Bind the fact that the lellow Prult scandal had broken 
and that General Thurnan was overseeing the 
Investigation, more or less into Yellow Fruit? 

A. Yes, and without knowing the details of 
Yellow Fruit. 

Q. And that the/ 
created in September 19817 

A. Yes. 

Q. And the Army'sj 
up? 

A. Yes, absoultely. 

Q. I should ask by the way General Russo, In 
your position as Assistant Deputy Chief of Staff for 
Logisitics, to whom did you report? 

A. General Register. 

Q. General Benjamin F. Register? 

A. Yes, the Deputy Chief of Staff for Logistics 
of the Army. 

Q. Returning to the questions which I indicated 
from the outset I would ask you. To your knowledge was 
the legality of Snowball or Crocus ever questioned? 



System tightened 



unclassif;ed 



41 



UHCLASSIFIED 



A. No, It was not. The notification process was 
questioned fron an Aray perspective, but whether that 
Implied with It the legal question or not; I really 
can't answer. 

Q. General, I believe we've got a pretty good 
explanation on the record fron several witnesses thus 
far, of the Army ' s ^^^^^^^^BlSysteo so I'm not going 
to ask you to walk us through that in great detail. 

But let me simply ask you, would I be correct 
in saying that the TOW missile shipments to Iran and 
the Hawk repair parts shipments to Iran bypassed the 
Army ' s ^^^^^^^^Vsys tern? 

A. les, they did. 

Q. In your capacity as the Assistant Deputy 
Chief of Staff for Logistics are you aware of any other 
transfers which have bypassed the^^^^^^^^Hf System, 
other than Snowball and Crocus? 

A. No. 

Q. As you well know, sir, there's been a lot of 
controversy about the price of a TOH missile, and we'll 
get into some of that later and the mlnutia of It; and 
I imagine, you're probably tired of being asked about 
that. But let me go to sort of the bottom line 
question and ask you, sir: 

Were you ever in a situation where you felt 
pressure was being put on you to reduce the price that 



UNCLASSIFIED 



42 



UNCLASSIFIED 



9 
the Army should otherwise have charged? or In anyway 
come up with a low price, that In anyway would have 
been inappropriate or unjustifiable? 

A. Not at all. As a matter of fact, the 
pressure, if any, would have been to increase the 
price. 

Q. And how would that be, sir? 

A. Through indications that Simpson would tell 
me from time to time. 

Q. That would be Major Christopher Simpson, the 
action officer on this? 

A. Yes. That there was concern, particularly, 
in the Missile Command about the replacement costs for 
the TOW, which would run up to $8,000 - $11,000; and so 
the pressure was in that direction as opposed to 
keeping it low or reduce it. 

Q. But, sir, that would have been the pressure 
that came up the chain from MICOM? 

A. Yes. 

Q. It was to get a replacement cost, which was 
higher than the cost the missiles had been purchased 
for? 

A. Yes. 

Q. My question really would have been: Was 
there any pressure from the top, whether it be from 
General Powell, from the NSC, from the CIA or any other 



UNCLASSfFSED 



43 



«nci4ssif;eo 



point of origin, on you not to go with whatever price 
should have been charged? 

A. Yea. No, there was absolutely no pressure, 
and I would say also, that the only real guy that 1 
dealt with above ae was Colin Powell. 

Q. General Russo, did you ever tell General 
Powell that there was a way to get these missiles 
cheaper. If the Army wanted to do that? Do you recall 
any statement to that effect? 

A. We had some discussion about that, and It got 
Into the discussion with regard to the basic missile, 
and what the basic missile represented. And I think, I 
mentioned to him that there was a more expensive 
missile, but that we were not using that more expensive 
missile. We were using the basic missile. 

Q. So any statements you might have made would 
have been in that context? 

A. Yes. 

Q. Sir, do you know who first came up with the 
price of »3,169 for a basic TOW? 

A. I believe it was Chris Simpson, Major 
Simpson. 

Q. All right, sir, and do you know when you 
first learned that a basic TOW with MOIC -- M-O-I-C, 
the Missile Ordnance Inhibitor Circuit, was carried in 
the Army Master Data File, the A-M-D-F, at a price of 



UNCLASSIFIED 



44 



UNCLASSIFBED 



11 

♦8,U35.00? 

A. I believe, that was after the Investigations 
began. 

A. Did you ever see any transfer documents goln^ 
from Annlston Army Depot with the TOW missiles, the 
basic TOWs with MOIC, to Redstone which reflected a 
price of $8,435.00? 

A. I did after the Investigations began. Excuse 
me. I don't remember the price being on those docu- 
ments though, very frankly. I Just don't remember but 
I did see the documents. 

MR. SAXON: It was not on some of them, and 
on others It was. 

WITNESS: Okay. 

MR. SAXON: And I believe, my Army colleagues 
will substantiate that for me. 
BY MR. SAXON: 

Q. General Russo, was there ever any discussion 
in the early days of these transactions or later — but 
I don't have in mind after these matters became public 
-- about these shipments being pursuant to a presiden- 
tial finding? 

A. Not to my recollection ... or excuse me. 
Let me Just clarify that: I don't remember the dis- 
cussion on finding coming up or not coming up. It was 
Just a blank. I Just didn't hear it mentioned in 



UNCLASSIFIED 



45 



UNCLASSIFIED 



12 
either direction. 

Q. ill right, sir. On ^he issue of Congressional 
notification and, the Army was quite sensitive of this 
issue. It arose a number of times. And we will go 
through some of the particulars of your involvement on 
that issue, but let me Just ask you from your personal 
standpoint: With whom did you raise the issue of 
Congressional notification beyond the people, -who were 
below you at the Department of the Army? 

A. Well, let me see... I must tell you that I 
did not initiate that issue. As 1 recall it, Tom 
Taylor, and, I don't know if he's a "mister" or a 
military guy; but he's in the Office of General Counsel 
of the Army. I believe -- was probably, the guy that 
started the question of notification going. 

And he discussed it, I believe with Major 
Simpson but, significantly, he discussed it with Miss 
Crawford. Miss Crawford then sent a memo -- may have 
followed up on some verbal discussion she had with 
Secretary Marsh which raised this issue. 

And as a consequence of that, the Secretary 
had a meeting in his office, and which I attended, and 
at which time he told me to assure that I advised 
General Powell that he, the Secretary, was very 
concerned with regard to the Congressional notification 
requirement. 



UNCLASSIFIED 



46 



IJNCLASSiFlED 



Sue, Miss Crawford, the General Counsel of 
the Army, had told me that In her opinion the reqaire- 
nent for that notification, was one from the agency to 
whom we gave the items to as opposed to the Army, 
directly. 

So I did mention that to General Powell, and 
he assured me that the people that were concerned and 
responsible for that notification were aware of their 
responsibilities. 

Q. And, sir, did he tell you who those people 
were? 

A. No, he did not. 

Q. And did he ever tell you, anyone in parti- 
cular, with whom he raised the notification issue? 

A. No, he did not. 

Q. And did he ever communicate back to you, 
other than these people were appropriately aware, that 
anything affirmative or pro-active wa^hawaening on the 

—mm 

issue of notification? 

A. No, he did not. 

MR. SAXON: Let me go now to the topic of the 
replenishment of Israeli TOWs. As we now know, the 
second shipment of 508 TOW missiles was apparently 
intended to replenish Israeli stocks from an earlier 
shipment they had provided to Iran. 
BY MR. SAXON: 



UNCLASSIFIED 



47 



UNCLASSIFIED 



Q. When did you first beoone aware of the Issue 
of Israeli TOW replenishment? 

A. While I was asked the question by several of 
the folks that were interviewing ne. 

Q. So It would be after these matters became 
public? 

A. It was after it was published. 

Q. Ao I correct in saying, that at no time In 
your involvement with Snowball and Crocus, did you ever 
deal with the Israelis? 

A. That's correct. 

Q. At any time in your Involvement with Snowball 
and Crocus, were you aware that the Israeli government 
was involved in anyway? 

A. No. 

Q. Did you ever have any contact with Noel Koch, 
K-o-c-h, about pricing of TOW missiles? 

A. I would say a flat-no, on pricing; and 
secondly, I don't even think I know Koch. 

Q. Did you ever have any involvement with or 
dealings with Mr. Glen Rudd, the Deputy Director of 
DSAA with regard to TOW pricing? 

A. No. 

Q. Did you ever have any dealings with Dp. Henry 
Gafrney, the Director of Planning for DSAA on TOW 
pricing? 



48 



ONCLASSIFIED 



A. No. 

Q. And did you over have any dealings Mlth 
Richard Araltage, the Assistant Secretary of Defense 
for International Security Affairs on TOW pricing? 

A. No. 

Q. Did anyone ever make you aware of the fact, 
that with regard to Foreign Military Sales, under FMS 
sales, the cheapest we had ever sold a basic TOW 
ffllsslle to anyone was $6,8007 

A. No. 

Q. .Did you ever have any dealings yourself with 
of the CIA? 

A. Tes. 

Q. We will go through that later in whatever way 
It cooes up, as we walk through this chronologically. 
But for now dld^^^^^^^^Vever you he had 
been at a neetlng at the White House on January l8th, 

1986 with Admiral Polndoxter, Colonel North, Cla're 

</ ^ 

George and Stanley SporkjTn of the CIA to talk about 

these matters? 

A. Not to my recollection. 

Q. Did he ever Indicate to you that his contact 
on the National Security Council staff was Colonel 
Oliver North? 

A. No. 

Q. Did he ever tell you that the price of $6,000 



UNCLASSIFSED 



49 



UNCLASSIFIED 



16 
for a baslo TOW nlsaila waa too high? 
A. Not that I recall. 

Q. Did he ever tell you to find the oldest TOW3 
that existed In the warehouse for ahlpnent? 

A. Not that I recall. And you know, I gotta say 
that there's been a distinction In my testimony so far, 
between "no" and "not that I recall." 

The reason that I'm sort of hedging that, if 
that's the way to say it, ia -- one, my mind is getting 
faulty but I don't think It's that faulty. But because 
of the many interviews I got there, obviously, must be 
another side of the coin. And I would say to you, that 
I as sort of the other guy: get us both in the sane 
room and let's talk about the same subject at the same 
time. But, I Just can say "not that I recall." 

MR. SAXON: For what it's worth, general: 
There are, perhaps, more than one other side to this 
coin as we're all finding out. 

And second, we all have the benefit of asking 
these questions, after the fact, and it is quite 
difficult to recall in great detail, things which 
happened a year — a year-and-a-half ago, particularly, 
when you had no reason at the time to know you would 
ever be called to account for every detail. 

WITNESS: Yeah. 

MR. SAXON: So we understand that problem. 



UNCLASSIFIED 



50 



UNCLASSIFIED 



17 




BY MR. SAXON: 

Dld^H^^^^^Hflver you 
NortTi had checked with the Marines on the TOW prices? 

A. No. 

Q. Old you ever have any dealings wlthH^^H 
^^^^■wlth 

A. Tea. 

Q. Did I^^^^H ever tell you that| 
instructed hin, expressly, to avoid th« 
Systen? 

A. No. 

Did l^^^^^^l ever you the price 
of $6,000 for a basic TOW missile was too high? 

A. No. 

Q. Did he ever tell you that you should drop the 
price from whatever level you were looking at, roughly, 
$6,000 to $3,400.00? 

A. No. 

Q. Did he ever tell you anything that would have 
caused you to -- yourself, adjust the price from $6,000 
down to $3, too? 

A. No. 

Q. Were you ever told that the CIA was operating 
with a set amount of money or that there was a ceiling 
on how much money they had? 

A. I believe so. I believe If I recall, the 



51 



UNCLASSIFIED 



number was $25 ■llllon. Now where that number cooes 
froa, I Just don't remember ... I Just don't remember. 

Q. Would It be safe to say that It came from one 
of the Individuals at the the agency, with whom you hajj 
contact? 

A. It either was they or Colin Powell. 

Q. But you -- to the best of your recollection, 
recall the figure $25 million? 

A. That's the number that Just sticks up in my 
mind. 

Q. .Has that the total amount of money for TOW 
missiles? for Snowball? 

A. Teah, because that's the only project we were 
working at the time. 

Q. Did you have involvement yourself on the Hawk 
missile repair parts? 

A. Yes. 

you ever t e 1 ](^^m^^^H o f 
concern, of any Army concern, about the readiness 
impact of providing all of the repair parts which were 
requested? 

A. I don't think I mentioned that to^^^^^^ I 
may have, but I had . . . I'm trying to remember when I 
even met wltt^j^^^HH on the spare parts. I met 
^^^^H remember whether ^^^^^I^B^I 

But I don't know that I would have mentioned to him. 



UNCLASSIFIED 



52 



UNCLASSIPEO 



19 
axoept In passing. I might have said, that we've got 
soae problena with soae of these. We're below the 
fifty percent mark on It — or something like that, but 
I Just don't remember talking to^^^^^^Aon that. 

Q. Do you recall whether you talked with anyone 
at the CIA to Indicate that there were certain of the 
Items on the list of 23'< repair parts requested, which 
the Army did not want to provide because of the 
readiness Impact? 

A. I don't think I did that directly. 

Q. Do you have any recollection of someone from 
the Army making that statement? perhaps, It was Major 
Simpson to his counterpart at the agency? And then the 
agency, more. or less, overruling the Army and rein- 
stating some Items that you didn't want to provide? 

A. I think that Major Simpson may have told them 
about our concern and our problem. I don't remember 
them overruling him, In that context. 

Q. Were you ever Informed by anyone that the 
decision to delete the Hawk radars was made by Colonel 
North? 

A. No. The decision to delete them? 

Q. Tea, sir. 

A. Well, we really didn't have them as a 
requirement. They were outside the ZSt, If I remember 
correctly. 



unclass:f:£d 



53 



UNCLASSIFiED 



20 



And I remember, either me telling H^^HI. . 
Yeah, I think I told^HHHHdlrectly , that — that 
waa off the list and, since It was a major Item, that 
they had to come through with some paper on that one - 
because that sort of bothered me a little bit. 

MR. SAXON: Let me see at this point, before 
we start on the chronology. If Bob or Roger have any 
points? — direct follow-up on these questions, and 
then, If not, we can go forward. And If you do, we 
might as well get them now. 

-MR. GENZMAN: Not for me. 
BI MR. KREUZBR: 
Q. Sir, at some point In time, did you have a 
discussion with the MICOM commander? 
A. Yes. 

Q. About the cost of these TOWs? 
A. Yes, General Burbules. 
Q. And what did he say to you during that 
discussion? 

A. Pete, General Burbules mentioned to me his 
concern -- and now as I recall it — but he mentioned 
his concern with regard to the price; that he felt we 
might be -- or that he might be getting reimbursed for 
these weapons. And the context of his comment was, 
that we're selling, if you will, a weapon, and we're 
having to pay, significantly, more money for its 



UNCLASSiF;ED 



54 



UNCLASSIFIED 



replacement. 

And my recollection was that: "Pete, I 
understand that. However, we're dealing with something 
called the Economy Act here, where a replacement cost . 
simply isn't reachable." So I said, "And it's for that 
reason, that we're using this price for a basic TOW 
missile. " 

And that's sort of the extent of my recollec- 
tion of that discussion. It was a little back and 
forth, but that's the frame that we were talking in and 
he was concerned about it. -^^ ■- --■ 

He said, "Geez, we're giving away one item 

9' 

and having to buy it back — it's replacement — at a 

rather higher and, more significantly, higher cost." 
And I was aware at the time -- again, as a 
function of my position, that the Army had made a 
decision to buy TOW II missiles and, very frankly, 
having said that, and the knowledge about what the 
Economy Act said or didn't say, it was what I relayed 
to General Burbules and that was the only conversation 



we had 



Q. Is it true then, that there was no provision 
In the Economy Act made for replacement costs for any 
kinds of items sold? 

A. That's my understanding and I confirmed that 
(a) with General Powell that replacement 



UNCLASSIFSED 



55 



UNCLASSIFSltD 



22 
costs were not In the equation; and 

(2) with Tom Taylor of the General Counsel's 
Office. 

I asked hla If the Economy Act, In fact, dld- 
apply? And he said 'yeah' as far as he could tell. It 
did apply. So based on that, that's why I said that 
the replacement costs were out. 
BY MR. SAXON: 
Q. Do I understand your testimony then, general, 
to be that you understood, initially, that you were 
using the Economy Act from your discussions with Mr. 
Taylor in the General Counsel's Office? 

A. It's very fuzzy, timing-wise. General Powell 
may have told me first, and, it's all in that first 
week. So , I don't remember. It may have been Powell, 
because he -- he . . . this is sort of an extension but 
I might as well say it here. General Powell had told 
me a couple of things: 

(1) He told me that the Secretary, 
Secretary Weinberger, wanted to be sure that the Army 
was whole; that the Army didn't lose anything as a 
function of this project; 

(2) He said that the Secretary wanted to do 
things consistent with law; 

(3) He told me about the Economy Act; and 

(4) He told mT about the replacement costs. 



UNCLASSIFSE9 



UNCLdSSIFe 



23 

Now when that happened in tine, that first 
week with the discussion with Taylor, I Just don't 
remember. 

Q. All right, but it's very clear you understood 
this to be an Economy Act transfer? 

A. Yes, indeed. 

Q. All right, let us go then to that first 
discussion — 

MR. KREUZER: I'm through with that, except 
for one other point, and that is: 

Was any other avenue, or any other 
possibility, or acquisition of these missiles 
discussed? And by that, I mean did they talk about 
anything other than an Economy Act transfer? Was that 
at all brought up? like Foreign Military Sales? 

A. No, no one mentioned Foreign Military Sales 
at all. And, normally, you know -- again, going back 
to my position. We had a number of actions with the 
agency and they were all Economy Act types of things, 
and so It didn't cone as a surprise that we weren't 
using FMS because of the way we normally did it was 
was through the Economy Act. 
BY MR SAXON: 

Q. General Russo, if you wouilld, now begin at 
the beginning, and walk us through in terms of your 
involvement with project Snowball; what happened first? 



UNCLASSiFSED 



57 



UNCLASSIFIED 



24 
when It happened? who said what? et cetera, what you 
did? 

A. Now on the 20th of January 1986, when I got 
In that Bornlng, General Register told ffle that over 
weekend, Saturday the I8th, he had been advised by 
General Thurnan, that we had a project ongoing that we 
were to execute. 

The project Involved some 1,000 basic, 
vanilla, TOW missiles that were to be transferred to 
the agency, to the CIA; and that, we would do so on a 
very closerhold basis -- a mlnlaum of paper and minimum 
of people Involved. He told me that he had been 
working that with Major Simpson over the weekend, and 
that he would be moving around the next couple of weeks 
and he said, "You might as well take that under your 
wing. " 

He said that we anticipate a pretty quick 
transfer of those, so we need to get down the very 
detail of how long It would take us to move things 
around. So with that, I called Major Simpson In and 
got a debrief as to what he had done so far. I laid 
out on the chart, what steps needed to be taken to go 
from the site at Annlston to wherever It was that they 
would be going to, to Include an airlift out of the 
Redstone Army Airfield. 

Q. Had Major Simpson already Identified that the 



UNCLASSIFIED 



58 



UNCLASSIFIED 



TOWa u«r« at Annlston Aray Depot? 

A. At Annlaton, yeah. And so we -- he then 
coopartfflented that Into how auoh tine it would take to 
take things out of bunkers, and how nuch tiae it woul(t' 
take to load trucks and transport it to Redstone, off 
load It and on load it on to soae aircraft. 

At the tine we were thinking about soae kind 
of an airlift. And so we started aoving along in that 
role, and during that first week is when -- that first 
day, really, I called General Powell to tell hia I was 
the contaot for the Aray on the project. I called^^H 
^^^^^^Kwho Powell gave ae as being the guy at the 
agency that was the contnt and we established secure 
numbers and all that sort of stuff. 

And at this point in time, Siapson was 
working the action having to do with who, what, when, 
where, how and why. 

Q. All right, let us stop here and have you go 
through, as carefully as you can reconstruct it, your 
conversation with General Powell. Has this on the 
phone or in soaeone's office? 

A. The first contact siaply was on the phone. I 
told hia I would like to coae down and see hia. And 
since I hadn't talked to Colin before that job. He 
said, "Well, what's this all about?" Anit^aaid, 
"About sone project." 



WNCIASSIREO 



59 



^NCLASSIHED 



26 



1 

2 

3 

4 

S 

6 

7 

8 

9 
10 
11 
12 
13 
14 
15 
16 
17 
18 

19 
20 

21 

22 

23 

24 

25 

26 



Q. And I don't believe we've said for the 
record, at the time, be waa Major General Colin Powell, 
and he was the sllltary aaalatant to Secretary 
Weinberger; la that correct, air? 

A. Yes. 

Q. All right, continue. 

A. So I went down to aee Colin, and told him I 
was the contact point on the transfer of the TOW 
missiles. And that'a -- as 1 recall, the time at which 
he told me about the four polnta that I had menti oned ^ 
before. And to^^^^H and toldl^^^P^ 

that 1 understood the taak, but that I would expect 
that before we transferred anything that there would be 
the normal fund citation aaaoclated with the project. 

Q. Did you ask General Powell if this was a 
project, or a tasking, or a requirement passed down 
from Secretary Weinberger? 

A. No, I did not. 

Q. Did he tell you that? 

A. He mentioned that the Secretary was Involved 
and gave me the Instructions that he had received from 
the Secretary, with regard to the Army being kept whole 
and doing things In accordance with applicable laws. 

Q. At that point or any other, did General 
Powell tell you that Secretary Weinberger had 
reservations about this project? 



yNCLASSIFIED 



60 



bNCLASSinEO 



27 
A. No. 

Q. Did he ever say that Secretary Weinberger 
thought It was Illegal? 

A. No. 

Q. Did he ever say that Secretary Weinberger 
thought sooe people could go to Jail because of this 
project? 

A. No. 

Q. Nothing along those lines ever cane up? 

A. No. He Just gave oe the two Issues that I 
mentioned^ 

Q. And what happened next? 

A. Then the ball started to flow, and the 
telephone lines working between Major Simpson and 
MICOM, the Missile Conmand. And it was during the 
course of the first few days, that we heard about the 
need to include this MOIC, that we talked about 
earlier. And the question came up: "What's the cost?" 
And the answer was $300, and so that seemed to be 
reasonable so we went ahead with that. 

Q. When you say "we went ahead with that." Who? 

A. I authorized them doing that. 

Q. Did you contact the CIA to tell them that 
this was going to -- 

A. I told|^mBthat what was 
happening, and he didn't raise any reservation about 



UNCLASSIFIED 



61 



UNCLASSIFIED 



28 

the ooat at that time. 

Q. And Mhat was the coat being discussed at that 
point? 

A. $3, teg -- $3,169 for the basic TOW alsslle , 
and $300 for this MOIC. 

Q. And had there been a period, which we might 
have skipped over, before you get to the basic TOW at 
13,169 plus the MOIC, in which you had given anyone a 
ball park figure of $6,0007 

A. Kot that I can recall. I may have done that, 
I doubt It. But in the discussions with Major Simpson, 
the question came up about the ancillary costs -- the 
unloading from the bunkers and all of those kinds of 
things to get it to the airfield, and the loading of 
the aircraft. And there was some question nark as to 
how much those would amount to? And we may have come 
up with some number. It could have been $6,000, I 
don't recall now, but that's how we could have gotten 
to that. 

Q. What do you recall being the first figure 
that you gave, either to General Powell or to anyone at 
the CIA? 

A. I would have said $3,169 because it was a day 
or two after that, that the HOIC issue came up. And 
the discussion withH^^^Hwas that one of us -- 
probably me -- said something. "I understand there's 



UNCLASSIFIED 



62 



UNCLASSIFSED 



29 
some urgency associated with this," and you know — 
"When do you think you night be able to tell us to 
ship?" or "When do you want It shipped?" 

And his reaction, generally was, "Well, I'm _ 
not sure. It's gonna be very soon." 

And somewhere in there crept the issue of 
having to do with, "I'm waiting for the money to be 
releasea." Released by whom didn't come up, just 
"released." 

Q. Did anyone at the agency ever tell you that 
they were- getting the money from the White House for 
this project? 
A. No. 

Q. And when any of the issues arose of the MOIC 
would cost more, or MICOM only had been more for the I- 
TOW downgrade, et cetera, any time when you were asked 
to go back to the agency for possibly more money; were 
you ever told that they would have to go to the White 
House or the NSC for that decision to be made? 
A. No. 

Q. It never came up? 

A. Never came up. So we continued on that week 
in that dialogue with MICOH. I said "we" — primarily, 
Major Simpson; my contact with fll^^^^^B having to do 
with the fund certification and the date of shipment; 
some dialogue that I know Simpson had with the Air 



(JNCLASSIFilO 



^^OUSSIFIEB 



30 



Force with regard to whether requests had coae through 
for allltapy airlift. In general, getting prepared to 
fflake the ahlpaent whenever It was called for. 

As I recall the first tine that we had a 
shlpnent and, I'll refer to these notes here, was the 
13th. I think It was of — excuse me — the 29th of 
January and we nade all the preparatory noves to do 
that, to Include moving the TOUs over to Redstone. 

Simpson physically went down there because 
the agency wanted to have a transfer action, and it was 
In our Interest to get a piece of paper signed by then 
at the point of transfer. And so Simpson went down 
there believe, ^^^^^^^^^Bwent down there... 
^^^H did go -- 

Q. Someone from the agency? 

A. Someone from the agency went, and at the last 
minute that was canceled. Why was it canceled? "Well, 
we don't have the aircraft." So from there we went 
into some further discussions with the agency as to -- 
you know, "Okay, now what?" We kept the missiles there 
at Redstone, and so we gotta add security guards to 
them, and we Just didn't know when we were going to 
move them. We thought it was going to be momentarily. 
It didn't happen, and we finally had to ship them from 
Anniston «s I recall, by truck toj^^^^^^^^H on the 
13th of February. 



UNCLASSIFiED 



64 



UNCLASSIFSED 



The arrangeaenta for that was aads by the 
folks at^^^^^^^^^B who the transportation 
contacts thaT we have used before. As Z recall, It was 
.that Bade the aove. So that occurred, a. 
thousand alsslles moved. 

And now during those couple weeks, the 
question caoe up that they didn't have enough HOICs to 
meet the requirement of the agency. 

Q. Which was that the missiles be conditioned 
code "A" Is that correct, sir? 

A. ' I frankly^^did not get into the discussion on 
is it condition code "A" with it, or without, or what 
the hell. All I knew was that — that Simpson reported 
to me, that they did not have the HOICs that we thought 
they had. 

And so a result of that, they came up with a 
solution which had — taking off a warhead off another 
missile, using the missile part of it together with the 
warheads off of the basic — the other basic TOM, marry 
them together, and using those. 

Q. Did the launcher that was going to come from 
another missile, as I understand it, was to come from 
the I-IOW; is that correct, sir? 

A. That's the way it ended up being. 

COL WALLACE: But not "launcher." Rocket 



motor. 



UNCLASSIHEB 



65 



(JNCLASSIFSED 



32 
MH. SAXON: I'm sorry, "rocket notor." Thank 



you. 



BY MR. SAXON: 

Q. That had come from the I-TOH; Is that 
correct, sir? 

A. I-TOW. But I need to explain that because 
that gets Into the pricing area a little bit. 

I couldn't distinguish between what was the 
difference -- and that's very fundamental. Because we 
were talking about a basic TOW missile which consisted 
to two parts, the motor and the warhead. 

And I couldn't get anyone to really describe 
for me, what was different in that TOW motor, and the 
different kinds of things that we now understand to be 
the basic TOW and the I-TOW, with the exception of the 
MOIC which was $300, we were told, and the extended 
distance, which later on I found to bu'JUITl worth. 

So I said -- and that was where the 
fundamental issue came up, and, since I haven't seen 
too many other authenticated documents about this 
hummer ... I still don't know today what the right 
cost was of the missile. So it was during that period 
of time, however, that the question came up. We can't 
can't meet the requirement unless we take this part of 
the missile, take the warhead off, substitute the older 
warhead, and use that to meet the requirement. 



UNCLASSIFfED 



66 



UNCLASSIFBED 



33 

Q. Let me aak you about the pricing question. 
Did MICOM put forwapd the argument that since the 1-TOW 
motor was being used, rocket motor, and that that's 
carried in the Army Master Data File at a higher price, 
because the I-TOW costs more than the basic TOW, that 
they should, therefore, be reimbursed an additional 
cost for that amount? 

A. They may have, but that argument didn't come 
to me. 

Q. It didn't come to you? 

A. It did not come to me. And I would say that 
the MDF, would not segment that rocket separately. It 
was complete with the warhead. Very frankly, I thought 
there was something peculiar about the warhead, that 
was what was giving it the extra cost because in the 
other piece of it, there seemed to be no difference 
except the range and MOIC; the MOIC was $300 and the 
wire was 120. 



Q« At what point were you made aware that there 
was a different national stock number for a basic TOW, 
if it had a MOIC? 

A. Well-after I left the agency, well-after. I 
would say, it was September or October, or whenever it 
was that all of this began to bubble up in the DoD. 

Q. So if I understand your testimony, while you 
were the point of contact for General Powell and for 



UNCLASSfF^ED 



67 



UNCLASSIFBED 



3H 
the Aray on 9Bl this project, no one ever nade you 
aware of the fact, that If you took a basic TOH and put 
a MOIC on It, that according to MICOM, that changed the 
national stock number? 

A. Yes, that's correct. 

Q. And the price went from $3,169 to -- 
A. Somebody may have said that. Somebody may 
have said that and I asked them, "Show me how?" "Are 
we talking about the same item?" 
Answer: "Yes." 

^lOkay. What do we do with it?" 
"We put a MOIC on it." 

I said, "Well, you just told me it cost 
$300." 

"Yeah, that's right." 
And I said, "Well, what else have you 
incurred, that caused you to go to that kind of a 
number?" 

I couldn't get any good answers. 
Q. Did you have a conversation or did you say 
you might have? 

A. I believe, I did have that conversation. 
Q. And with whom would you have had it? 
A. I'm not clear. I'm not clear on that. I 
know I had it with Simpson, and I don't remember who 
else I may have had that coversation with. 



UNCLASSIFIED 



68 



liHmsm 



35 



Q. Do you recall ever raising that Issue with 
anyone In the agency, CIA? 

A. No, no. But that was oy ... I raised the 
question, because I know MICOM was raising it through - 
Simpson, that there was an additional cost associated 
with what you now call 'I-TOW.' 

Q. Did you raise that with General Powell? 

A. No, I did not. I Just felt it was something 
that I was looking at, and it was within my cognizance 
to make a Judgment on it. 

MR. KREOZER (TO MR. SAXON): You stole most 
of the thunder, but I do have one remnant left. 
BY MR. KREUZER: 

Q. And the remnant being, sir, did anybody ever 
suggest that, perhaps, in addition to the fact that a 
new national stock number was created that, perhaps, 
the improved TOM motor portion was built at a later 
date? at a time when, per unit costs of hours, manpower 
and materials were higher? 

A. No, and that's a good point. First, no one 
ever mentioned the different stock number which -- you 
know -- I guess, I fault myself but what the hell, 
that's mine, clearly. But having said that, we didn't 
go into that distinction about the later productions. 
As a matter of fact, I'm pretty sure I recalled asking, 
"Is this thing still in production?" The answer was 



UNCLASSIFIED 



69 



UNCLASSIFIED 



36 



But again we were talking about a basic TOU, 
and I was under the Impression that, we were talking a 
"basic TOW" without the varieties that I later found - 
out -- we got, virtually, ten different types of almost 
basic TOW. So may be It was semantic at that time but 
I didn't know the difference. 

I had understood those as a basic TOW. I 
thought we were talking about one and I found out later 
that we weren't talking about one. 

.MR. SAXON: All right, for clarity of the 
record, let me indicate that when I talk about the 
change In the national stock number, I'm confining that 
discussion to the basic TOW itself; and the fact that 
if you take a basic TOW, 71A, 71-Alpha and then put a 
MOIC on it, in the MDF, it apparently becomes a 7 1 A2 
with a higher price. 

WITNESS: Yes. 

MR. SAXON: And that the I-TOW downgrade is a 
separate issue and I guess, in fact, there would be a 
different national stock number for a basic TOW and a 
I-TOW, but that's not what I mean when I say, the 
change in the stock numbers there. 

BY MR. SAXON: 
Q. General Russo, were you ever made aware or 
did you ever have any discussions with anyone, and I 



UNCLASSIFIED 



70 



WNCTOFIED 



37 



guess, particularly, this would hav« been either 
General Burbulea or Major Slnpson, about the eonputer 
syaten that governs pricing and Inventory nuabers at 
MICOH, at Redstone, at Annlston Aray Depot? 

A. Hot during the course of — 

Q. It never came up? 

A. No, sir. 

Q. All right, sir. Where are we In the 
chronology? 

A. Well, I guess, we Just aade that first 
shipment a-nd that was the 13th of February, and, I 
guess the next thing on the TOWs was the the continu- 
ation of moving some of those new or different rocket 
launchers, down to Annlston so that they could switch 
the warheads around. 

And I authorized HICOH to spend the money on 
that with the understanding froml^^^^^H I told 
^^^^^|that we had to do this. In order to come up 
with the missile that was workable. And so I 
authorized HICOM. I think we sent them a message that 
said -- you know, "Go ahead and do this and here's the 
fund cite to use." And they went ahead and began to 
build the balance of the shipment that we had been 
asked to make. 

And the next part of that, as they were 
working that, was a requirement for an additional 500, 



UNCIASSIFIE8 



71 



UNCLASSIFIED 



3( 
the second shipment and, I nust say that during this 
period, I must have called ^^^^^f probably once a week 
-- I don't know -- asking him, you know, "Uhere are 
we?" "What the hell happened to all the furor that we. 
were working this hummer at?" 

And^^^mH says, "^*^^> y°" know, I'm 
waiting for the dollars; I'm waiting for the money." 
And I said, "Well, when are you gonna get it?" He says 
you know, "Any day now." 

Q. Had you ever been Involved in your capacity 
at DCSLOO- with transfers to the CIA before? 

A. Yes. 

Q. Had you ever had an incidence in which they 
were waiting on the money? 

A. No. 

Q. So you found that unusual? 

A. Yeah. 

Q. Did you ever ask anybody?]! 
what was going on? 
No. I guess, I felt comfortable, that if I 
asked them they were gonna give me the -- you know, 
"Don't worry about it; we don't have it" or something 
like that. 

Q. Did you ever tell them that you wouldn't ship 
any TOWs, or go forward unless the certification of 
funds was there? 



UNCLASSIFiE 



72 



UNCLASSIFIED 



39 



A. Absolutely, absolutely. I think that waa 
clear froa the outset. That while we were talking 
«««*t about ffliniouB pap*r, I told hia, essentially. I 
used the words "no tlcky, no shirty." If they didn't- 
cone through with the certification, they weren't going 
to get the alsslles and I needed another piece of paper 
that said, that they were taking accountability on the 
transfer. 

Q. Were you nade aware by Major Slapson of the 
reasons for the calling off of the MAC airlift with 
regard to the first shipaent? 

A. No. 

Q. You knew that it was initially going to go by 
air to 

A. That was ay understanding. I was a little 
concerned when — initially, Chris had aentioned to ae 
that he had called his counterpart on the Air Staff 
that worked those kinds of actions, and he had no --as 
I recall -- the guy on the Air Staff had no knowledge 
about the requireaent. So that was a concern to me, 
because tiae is short, even to support the agency. But 
I never knew why the aircraft had been called off. 

Q. Did Major Slapson ever tell you that it took 
soae shuffling by MAC to be able to lay on that airlift 
capability, the first tiae? 

A. I don't recall. 



UNCLASSIFIED 



73 



UNCLASSIFIED 



Q. And did he tell you that they were quite 
upaet, that after they did that, and had an opportunity 
of costs that then the airlift was called off? 

A. I don't recall. 

Q. Did he ever tell you that for the second 
shipment, Initially, he — Slnpson was told, that they 
would use the airlift capability and he went to MAC and 
they, In essence, told him they weren't going to do It? 

A. I don't recall that. 

Q. All right. Where next In the chronology? 

A. Well, I guess, the next was the designation 
to ship on the 19th of May and this came up with 508 
and I don't know how the hell, the "508" came up but 
I've been asked that before. 

Q. Did you ever ask anyone why that odd number? 

A. No. Sounded screwy, but I didn't ask 
somebody -- you know, how the hell did you come up with 
that number? Excuse me. 

There was some initial discussion when we 
were talking about different kinds of air configura- 
tions. There was some discussion about topping off the 
top of the airplane — of the pallets -- to fit inside 
of the envelope of the aircraft. 

Q. And who made those comments to you? 

A. I believe, it was Chris -- Major Simpson, I 



believe. 



UNCLASSIFIED 



74 



UNClASSm 



Q. In the beginning, you were told that the 
shlpoent would be for 4,000 TOWs; Is that correct? 

A. Tee. 

Q. Did there cone a tine shortly thereafter, 
when It Increased to 4,500? 

A. Yes, and 4,506. 

Q. So If we're ready then, walk us through the 
second shipment? 

A. The second shipment, we were given the 
notification that on the 13th of May It would move by 
truck ^0 ^^^^^^^^^H &nd we ahead made the 
same kind of arrangements we had made before through 
Simpson's contacts to move by truck. 

And at this point In time, we had a new 
player In the game, a Lieutenant Colonel Armbrlght, who 
was scheduled to replace Simpson within the month. So 
he came In and he went down to observe the transfer. 

Q. For the record, that was a normal change In 
assignment for Major Simpson; Is that correct, sir? 

A. Tes, yes. Armbrlght went down to Redstone to 
observe the transfer and, however, there was no agency 
contact there. So it was not until he returned to 
Washington, that he received the "John Henry" on it. 
Frankly, had X been aware of that, I would 
have Insisted that the agency send somebody down there, 
because had something happened to anybody, we would 



UNCLASSIFIED 



75 



DNCUSSIfe 



H2 

have been left holding the bag. 

Q. And by "John Henry" you have reference to a 
transfer document, transferring control and ownership 
from the Army -- 

A. Absolutely and signature, from the Aroy to 
the agency, yes. So that shipment was made and that 
pretty muchf^wound-up my involvement in the project. 

Q On Snowball? 

A. On Snowball. 

Q. Because you left DCSLOG, I believe, on 8 
July? 

A. The 9th of July. 

Q. So you were not around for the third 
shipment? 

A. I was not around for the third shipment. 

MR. SAXON: Now before we get to Hawk repair 
parts, we need to go back then and visit the policy 
level discussions about Congressional notification and 
some of those Issues. 

Any of you gentlemen have any other questions 
about TOWs, other than the meetings with Secretary 
Marsh, Mrs. Crawford, et cetera? 

MR. GENZMAN: No thanks. 
MR. KREUZER: No. 
BY MR. SAXON: 

Q. All right, if you would, General Russo, tell 



UNCLASSIFIED 



76 



uNtussro 



43 
us when any Issues first arised, that concerned any 
requirements of law to notify the Congress? who talked 
to who? what discussions were held? what was going on? 
et cetera? 

A, I think, I mentioned earlier something — and 
as I'm beginning to use "Brlc Bradford's time top" 
(sic) here -- It seems to me, that Simpson In his 
discussion with Taylor of the General Counsel's Office, 
Simpson got wind of a new law that was passed, that 
required different thresholds of notification for the 
Congress. ' 

Q. Would that be the InTelllgence Authorization 
Act of 1986? 

A. I believe that's what It was. And as a 
result of that there was an Increased tension beginning 
to grow on the part of the General Counsel. And as I 
recall, I asked Simpson to go walk down and check with 
General Suter -- General Suter being my counterpart on 
the Army Judge Advocate staff. 

And the Judge came down to see me -- Suter 
came down to see me, and said he was quite concerned 
with regard to the Issue. 

Q. Let me backup a second. Now how had Major 
Simpson been made aware of this new law? 

A. I think. It must have been In discussions 
with Taylor because he had -- 



UNCUSSIFIED 



77 



ONCUSSIFIEO 



Q. Toa Taylor? 

A. ToB Taylor -- either with Toa Taylor or 
perhaps, wlth^^^^^^H has a legal guy In that shop -- 
Q. Would that be Major Ed Frothinghao? 
A. Teah, that's the guy that I couldn't 
remenber, but -- yeah, that guy, and so it may have 
been during those discussions. 

And it wasn't until later, frankly, that I 
knew theJ^Hwas even knowledgeable about this case. 
It actually occurred when I was with Colonel MacDonald, 
who was the Chief of^^Hat the tiae. Ve had a 
subsequent aeeting, but I'll get to that... 

The bubbling of that concern on the part of 
both Suter and Taylor, led to Miss Crawford preparing a 
memo for the Secretary in which she voiced her concern, 
and, I wish I had that memo. Because it caused me to 
call her and I called her. 

I said, "Sue, you know, there's a suggestion 
in this aeao that we have the responsibility for 
notification." I think that's along the lines I said, 
and she said, "No." She said, "We think it's whoever 
is the reoelving activity." 

And aa a result of that, I think I inked in 
at the bottoB of that huaaer... 

MR. SAXON: Before you go further with this 
document that I've given you, general, was there a 



UNCUSSIFIED 



78 



UNCLASSIRED 



45 



meeting that you had with Toa Taylor? A discussion 
about the Intelligence Authorization Act and any 
requirement for Congressional notification? 

A. I believe so, but I Just don't recall the 
specifics. 

MR. SAXON: All right, let me see If this 
document can help refresh your recollecton, and, I 
would ask that this be marked as Depostlon Exhibit No. 
1. 

(Whereupon, Deposition Exhibit No. 1, 

was marked for Identification.) 

MR. SAXON: And it consists of two pages; the 
first page Is dated 13 February, and I would believe 
that would be 1986, In the context of things, and It's 
addressed to Major General Russo from Tom Taylor and It 
says : 

"Concerning our conversation last 
we decided to ensure that Secretary 
Marsh was aware of the provision 
you and 1 discussed. Hence, the 
attached was delivered today." 

BY MR. SAXON: 
Q. Do you recall getting a note like this? 
A. Yes, I do. 



79 



UNCIi;>o.ritO 



"I 



Q. And th« attachment to which it refers la, I 
believe, the meaorandun from Susan Crawford the General 
Counsel of the Amy to Secretary Marsh dated 13 
February; Is that correct, sir? 

A. That's correct. 

Q. Now there's a handwritten notation on Ton 
Taylor's oeno; Is that In your handwriting? 

A. Yes. 

Q. And what can you tell us that that says? 

A. That's a notation. In which I'm noting that I 
have shown' that to General Register, and I havdprovided 
a copy of that -- of these two pages -- to Major 
Simpson. 

Q. So "DCSLOG" that would be General Register 
who was the DCSLOG and he had seen It, and you provided 
this to Major Simpson? 

A. Yes. 

Q. All right, sir. If you go then to the next 

page of the exhibit, Mrs. Crawford's memorandum. You 

said a moment ago, you thought you had written 

something on her memorandum and would that, in fact, be 

the notation we see? The handwritten notation at the 

bottom? 

A. Yes. 

read 

Q. And what does that say, sir, if you'd it to 

A 



UNCLASSIFIED 



80 



«NCUS«D 



A. "Nota bene" In Italian -- it's Latin but In 
any case -- 

Q. Which oeana what? 

A. "Note well," at least, In my lingo; probably-; 
In no one else's. "In discussion" and the note reads 
at the bottom, the annotation reads, as follows: 

"In discussion with Mrs. Crawford today, 
she advised, that where we support 
another agency, they -- not we -- 
are responsible to make the necessary 
notifications." 

It has my signature, dated 13 February '86. 

Q. And do you recall seeing that memorandum and 
making that notation? 

A. Yes. 

Q. And as you understood the Issue of 
Congressional notification based on this memorandum, 
tell us what you thought that meant, In terms of who 
should notify the Congress? 

A. I was under the Impression that based on what 
the memo said and my discussion with her, that the 
agency, the CIA, had the responsibility to provide 
notification to the Congress. But this says, and In 
the context then of the notification process, this 



UNCUSSIFIED 



81 



ONCUSSIFIED 



oemo, I believe, Is what stimulated a subsequent 
meeting In Secretary Marsh's office. 

Q. All right, tell us about that meeting If you 
would? 

A. I was told by Miss Crawford, that I was 
Invited to attend a meeting In the Secretary's office, 
and that general nature being notification to the 
Congress. 

Q. Who do you recall as having been present? 

A. The Secretary -- Secretary Marsh, Miss 
Crawford, General Suter -- that's S-u-t-e-r; he is the 
Deputy Judge Advocate General of the Army, Colonel 
MacDonald, who was the Chief of the TMO; General 
Cavezza, C-a-v-e-z-z-a , who was the executive to the 
Secretary of the Army and I. 

Q. Do you recall when that meeting took place? 

,1. — W^l, I don't have my notes on when that 
occurred, but it's in the chronology someplace as to 
when we held that meeting. It was maybe a week or two 
after this — maybe a couple of weeks after this meauo. 

And the Secretary sort of kicked It off by 
asking me to recount what had occurred with regard to 
the project, and so I did. 

Ai^ gaBr'^ ncluslon of my recounting where we 
were in that project, he mentioned to me that he wante( 
me to -- and there was some peripheral discussion by 



UNCUSSIFIED 



82 



UNClASSm 



«»9 



Colonel MacDonald who I found out -- I waa aurpriaed to 
aee him there, becauae I didn't know he knew anything 
about It -- but anyway, Colonel MacDonald mentioned 
that he had been in on the dlscusslona about thla 
project fairly early on In the Inception. 

But In any caae, the Secretary told me to do 
two thinga: 

(1) "Develop a chronology of all the actlona 
that you and the DCSLOG have taken alnce thla began," 
and ; 

(2), "Tell General Powell of my concern with 
regard to adequate notification being given to the 
Congreaa." 

So I did that a day or two later, if not the 
same day. 1 did that with General Powell and on aome 
document, I believe, which la over here 1 noted the day 
that I had apecifically paaaed on to him the 
Secretary'a concerna. 

MR. SAXON: All right. General Ruaao, let me 
aak you then to take a look at thia next exhibit, which 
I would aaked be marked Depoaition Exhibit No. 2. 

(Whereupon, Depoaition Exhibit No. 2 waa 
marked for identification.) 



BY MR. SAXON: 



mmm 



UNCUSSIFIED 



1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
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25 
26 



Q. And .3k you If th.t would be the ...orandun. 
for record d.ted 25 February .86. that you did at the 
request of Secretary Marsh that grew out of this 
meeting you Just referenced? 
A. Yes. 

Q. And there is a handwritten notation at the 
bottom; is that In your handwriting, sir? 
A. Yes. 

Q. And what does that say? 

A. "Coord" (coordinated). It's truncated to 
read "coord." but that «eant "coordinated with General 
Powell on 5 March .86- with my Initials on It. dated 5 
March. 

Q. And when you talked to General Powell what 
did you tell him? 

A. I told hla that the Secretary was very 
concerned with regard to the meeting to notify the 
Congress In accordance with the new law - yeah, there 
it Is - the Intelligence Authorization Act for Fy.86. 
And that he understood, that he - the Secretary, 
understood that we were not responsible for that 
notification but he was concerned that somehow, that 
requirement be accommodated. 

General Powell assured me that he understood 
the requirement and that the people responsible for 
that notification understood their responsibility. I 



82 734 



63 



84 



yNCUSSIrlED 



accepted that, returned, and reported back to General 
Cavezza, that response from General Powell and that's 
about It. 

Q. Has it your understanding in reporting back - 
to General Cavezza, that he was to transmit that to 
Secretary Marsh? 

k. Had passed the instruction, absolutely. 

Q. And to your knowledge did you provide General 
Powell with a copy of your MFR of 25 February? 

A. 1 believe I did... Well, this nay be leading 
a witch hujit but I'll mention it, anyway — unless, I 
dreamt it. But I was of the impression, that following 
this discussion that went on in the Secretary's office 
that General Art Brown, the Director of the Army Staff, 
sent a memo to Powell addressing the very same issue. 

However, when I was later asked about this, I 
said there's a copy down in oy office. And my recol- 
lection is that Powell is the guy that showed me the 
memo, and I recall saying to him, "General Brown didn't 
mention this to me," but nobody seems to be able to 
find that memo. 

MR. SAXON: Hell, sir, you are correct. You 
didn't dream that, and General Brown did write such a 
memorandum, and it went to General P6«#ll and we have a 
copy of it. General Brown now has a copy; it was used 
as an exhibit in his deposition last week. 



ilNCl/i,<J.<:inFn 



85 



ONCUSSIFIED 



52 

WITNESS: Okay. 

MR. SAXON: So you aren't Imagining things. 
Let me say since you brought that up, I do not Intend 
to use that as an exhibit, so I don't have It In front, 
of me, although, it's here In the office. 
Br MB. SAXON: 
Q. Did General Powell ever tell you what he did 
with that memoranduB from General Brown? 
A. No. 

Q. So you had no knowledge that he put a cover 
nemo on It and gave It to Admiral Polndexter? 
A. No. 

Q. All right, sir. Were you ever apprised at 
any point, subsequent to this discussion with General 
Powell, and, possibly providing him with your memoran- 
dum of record on 25 February; did General Powell ever 
get back with you and tell you, that the Congress had 
been notified? 
A. No. 

Q. Did he ever tell you that the agency was In 
the process of making notification? 
A. No. 

Q. Were there any other discussions to which you 
were a party on the Issue of Congressional 
notification? 

A. Yes, General Powell was also In the course of 



UNCUSSIRED 



86 



UNCUSSIFIED 



53 



transition in th« May tine frame and I forget the — 

Q. To leave his position as the nllitary 
assistant? 

A. To leave his position, and being replaced by. 
Vice Admiral Jones. And I recall mentioning to Admiral 
Jones the Army's concerns with regard to the notifi- 
cation -- not clear in my mind whether it was shortly 
after he came on board, which at that time, we were 
starting to work the spare parts issue for the Hawk. 
And I took that occasion to mention the notification 
requirement either on the Hawk, specifically, or on 
both — the TOW, to give him some background on the 
Secretary's personal concerns with regard to th* whole 
issue of notification, but I recall mentioning that to 
Admiral Jones, specifically. 

Q. Now you said earlier you were dealing with 
Parage of about once a week; is 
that correct? 

A. Yeah, I think -- 

Q. And you had some dealings with 

^^^^^^H not to the 

with regard to the spare parts. 

Q. And did you ever have any dealings yourself 
with] 

A. Yes, I met him personally once, and at that 
time, come to find out that we had served together when 



liNCIAIsfllFiFn 



87 



1 

2 
3 

4 
5 
6 
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8 
9 
10 
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12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 



yNCUSSIFIED 



he waa on active duty sooe years ago when I was In 
Germany, the time frame '76-78. 

Q. Did you ever have occasion to mention to 
either or any of those three gentlemen the Issue of 
Congressional notification? 
A. No. 

Q. You never asked them, "Hey, are you guys 
telling the Congress about this?" 
A. No. 

Q. Did you ever reference In anyway the 
discussions that you had, or the memos that had gone 
forward to General Powell on this Issue? 
A. I don't believe so. 

Q. Did they ever say anything to you that would 
indicate that they had been aware that the Army had 
been pushing upward on this Issue, and that you were 
creating any problems for them or "get out of their 
hair, " or whatever? 

A. I don't believe so. 

Q. They never said anything like that to you? 

A. I don't believe so. 

MR. SAXON: Anybody have anything further on 
Congressional notification? 

MR. GENZMAN: Not I. 
MR. KREUZER: No. 
BY MR. SAXON: 



5k 



UNCUSSIFIED 



wussm 



Q. All right, if you would then, general, pick 
up with project Crocus and tell us about the Hawk 
repair parts? 

A. Let's see... Yeah, on the 9th of April, I - 
got a call from General Peay -- that's spelled P-e-a-y. 

Q. Who was he, sir? 

A. He's the executive to the Chief of Staff of 
the Army, General Wiekham. Benny left word for me that 
the Chief wanted to see me and as soon as I returned to 
get with the Chief. And so when I returned to the 
office I had the message "Call General Peay," and he 
asked me to come down and meet with him to go see the 
Chief. So I did that. We went to meet the Chief and 
he was then in the -- I don't know what the room is 
called -- but it's the tank portion of the Joint Chiefs 
of Staff area, and attendance at that meeting was 
General Wiekham, General Peay and I. 

General Wiekham told me that — he asked me 
how the TOW project was going and I told him. "You 
know, it's on again, off again. We're not getting the 
money," and so on. But the first shipment was made, 
there was a thousand missiles, and we were waiting for 
further notification. 

He says, "Well, I got another project for 
you, the same kind of a project with the agency. 
Secretary Taft has advised me that we are to provide 



UNCLASSIFIED 



HNCUSSIflED 



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 
26 



spar, parts — Hawk aiasile spare parta. 

Q. That would be Deputy Defense Secretary 
William H. Taft, IV? 

A- res. That w. were to provide spare parts for 
the Haw. to the agency, and that I was to .,.e contact 
With the agency and work the project the sa»e way we 
worked It before. 

Q. Did he indicate that It was a foUow-on or 
connected to the the first one? 

A. No. He did say to handle It the sane way we 
handled It before - that was to say. .im.u. ,,,,,,,. 
-ent of people .„d »i„i.u« paper, but not necessarily 
connected to the previous action. 

Q- Did he give you the naoe of anyone In 
particular as your point of co ntact with t he agency? 
c a 1 1 e d H^^^^^H 
Q- And how did you know to call hla? 
A. Well, he's the guy 1 worked with on the TOW. 
and so since we were doing It the sa.e way we did the 
other one. 1 guess. I just stumbled Intof 
Q' And did you call hln? 
A- Tes, I did. And he told me that a l 

would be over to ... and .^I thi nk he said -today 

-- later today." "^Ibelleve. |H| actually showed 
up the next day. ^^Icame over and had with hi. a 
listing of Items. 1 believe, there were 234 items on 



56 



UNCLASSIFIED 



90 



iiREO 



57 



that Hat of apara parta that ware naadad for tha Hawk. 
And ha aakad ua if wa could run that out for 
hia In taraa of our balng abla to provide that aupport. 
I had Slnpaon cone up and Introduced thaa to each 
other. I don't believe Slapson knew^^^^f^ and told 
Slnpaon, "Let'a get on with the project." So Slnpaon 
did — 

Q. Before you go further, did thla Hat have 
prlcea on it? 

A. I'n not aure. I think they did, but I'n not 
aure... I Juat don't renember. 

Q. Were you told that you were ualng the Economy 
Act on thla tranafer or waa that Juat aaaumed? 

A. No, I Juat aaaumed we would be doing it the 
aame way. 

Q. All right, what doea Major Slnpaon then go 
forward and do? 

A. He then got together with AHC and uaed them 
becauae there aeamed to be multiple ceotara involved 
and DLA, I night add, and ao he uaed AHC headquartera 
to aort of coordinate what the availability waa on the 
itena, and I remenbared getting one cut at that and it 
a'howed that wa were in trouble on aevaral of the itena. 
It ahowed that we had aome difficulty in identifying 
aevaral of tha itema. 

And 30 Z aaked Slnpaon -- I don't believe he 



KUSSIflfB 



91 



2 
3 

4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
U 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 



UNCUSSIFIEO 



h.d it on th. first out - .„d I „w.d hi. wh.fs 



58 



usago of the Iteas? and what 



was the prooureaent for 



the ite.s7 and. of oourse. several of th. ite.s were at 
zero balance. 

Q. Do you recall how many i„ particular? 
*. No, but I'B sure I got thea in ay notes 
3o«eplace and I think Ifs in the chronology, but I 
don't reaember. 

But in any case, he caae back and showed ae 
the Shred-out of each one of those iteas. and the 
condition and posture that we were in. The ones that 
w were not able to identify we asked through hia. the 
agency - I believe, he was dealing ''lth|gH|at the 
tiae - if they <ould better identify the iteas. 

And I believe, be or 1 asked the question - 
he probably did because I don't think I talked the 
specifics to^B 



m-- asked about the kind of aissile 
we were talking about; because the Hawk was in an 
upgraded posture - that is, the iaproved Hawk. So it 
was relevant to try and find out what kind of a Hawk 
-issue we were talking about so that we aight be able 
to help in the identification process. 

And ay recollection says that we were told, 
-Don't worry about it. Just pay attention to the iteas 
that we've asked you to provide." So we did that. 

In looking at the list AMC did take soae 



iinmsim 



92 



ONcussife 



•otions and, I remeob«r one, that had to do with soae 
kind of brushes on a generator. The generators vere 
tied up for deadline — for maintenance. They weren't 
going to be upgraded through maintenance for some tlmei 
there were procurements that would bring the brushes 
Into the Inventory In time, when they did the mainte- 
nance. So those brushes were taken off the generators. 
Of course, they were good brushes, and brushes were on 
that list of repair parts in order to meet the 
requirement. 

So ... looked at all of that stuff and 
disallowed some. I don't remember how many and the 
rest, we provided to them. 

Q. Let me go back to something I asked you early 
on and that is, you've Just used the language you 
"disallowed some." That would mean, there were certain 
items you Identified as being in critically short 
supply and, therefore for readiness reasons, the Army 
would not provide them to the CIA? 
A. Yes. 

Q. Do you recall any subsequent discussion at 
all from the agency Indicating they wanted them anyway? 
A. No, I don't remember, at least, not with me. 
Q. Let me give you a couple of specific figures 
and see if you recall these figures in terms of 
readiness Impact: That of the 234 repair parts there 



liNCUSMD 



93 



UNCLASSIFIED 



9 
10 
U 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 



would h.v. b.an i.3 U.-a that would have been i„ ,o„e 
-tate or ,l«„iric.„t depletion. Ooea that ring . bell7 

A. The number -43- doean-t. But I would aay. 
t'^at It's in that range, that I would have recalled - 
t>etween thoae that were below the firty percent «ar.er; 
thoae that were at zero balance - yeah. I would aay - 
Q. I'm aorry. ii6 would be the figure? 
*• 1f«ah. that's a ballpark. 

Q. And that would breakdown this way: That 
there would have been 15 Ite.a for which there would 
have been one hundred percent depletion, 11 itea.a for 
Which there would have been greater than fifty percent 

been leaa than fifty percent, but atUl „ot be 
categorized aa algnifieant depletion? 

A. The number, aeem to be about the right frame. 
Q- And you had in front of you. I gueaa. data 
Which indicated what? other than thla. I understand 
that a readiness decision has a lot of other factors. 
What went Into your decision? 

A. What the usage factor was - that is. how 
-any have we used In the past year? If „, got five, 
and we only used one - you know, no big deal, even' 
though, that's below the level that we'd like to have 
on the Shelf. How „any do we have in from procurement? 
When are they due in? 



60 



BNCUSSIfe 



94 



UNCLASSIFIE 



61 



Q. In the pipeline? 

A. In the pipeline, egalnat the uaage and the 
atockage ao thoae were the faotora. Really, the uaage; 
the on-hand quantity and how nuch waa due In from 
procurement and when It was due In, that aort of pushed 
the Judgnenta that I aade with regard for the odds -- 
okay, to let It go or, no, we can't let it go. 

Q. All right, general, let ne ask you this for 
the record because I think people will want to know: 

In your beat professional Judgment as a 
career Army officer and as a logistics man, was there 
any significant, adverae readlneas Impact from the 
Army's stand-point to transfer those parta to the CIA? 

A. No. 

Q. Okay, sir. Were you Involved In the 
decisions with regard to the Hawk radars? the two Hawk 
radars? 

A. I was Involved In discussions with them. One 
-- the subject came up, I believe, through Major 
Simpson and I remember -- I'm pretty sure, I talked to 
^^^^^1 about this In which, I told him that those were 
major items. 

Q. Bnd-user Items aa opposed to parts? 

A. Teah. They were not In the same context as 
spare parts are, and I was concerned that we didn't 
have aome paper on this one. 



ONCLASSIFie 



95 



9 
10 

a 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 



WWSffO 

Now whether I was ««„^4»4 

was conditioned by the 

to ...„„„ .„, ., .., ^. ^^^^^^^^^ ^^^ 

""" ""' "" .» . PI... ,r p„„. 

'»•■• "..-. ..u .». .,„ .„„ „, ,^ ^,^^^^^^^ ^^ 

•ny »..., t». .v.ll.biutv ■h,.» 

'""• """" "" not .„ „„„,„„ 

" °' ""■"' -- ••■ii.».ut, .„, .„,. 

■ ". ^.u» „.t .»... .„. ,„ .,^^^, 
"" ".t .., ,., „,„ ,„^ „^ ^, ^^^^^^^^^^^^ ^^^ _- 
— -r, or .,. „„,.„„ ,, ^^^^^ ^^ ^^^ ^^^^ 

" • ''°''""' "" "" -" ".» op .n . .o,., . 

It Bu3t have been an pmc 

an FMS case with Iran going back 
several years. 

'■ '" " »" »' "• '-•".„ r.o„„ „„„, 

*• Yes. 

«• •»<. t», ..o „„ u„.., „„ „^^ ,^ ^^^^^_^_ 

'• «-y ».p.t. ,.,. .„, „ ,„.^,^ ^^^^^ ^^^ 

::i:r: ■"" - "- "• —- - - - -- .. 



62 



UNCLASSIFIED 



96 



UNCLASSIFSED 



63 

would coat thea a few dollars. 

Q. Did they eome up with the noney for testing? 

A. They come up with the money. 

Q. And were they tested? 

A. The number around $24,000 or 130,000, 
something like that. We tested them and found out 
that, essentially, they couldn't be either usable or 
put Into a usable condition. 

However, in the course of doing that, Simpson 
who was an aggressive guy, went to find out how in the 
hell do we release? — or get a release from the 
freeze? And I guess he talked to God and everybody 
else and, that sort of got back to the agency, and I 
got a call saying, "Hey, what the hell's going on?" 

"Well, you guys asked us to find out the 
condition and availability, and pursuant to that, 
knowing that we're not going to give them to you until 
we get something from you in writing, we still wanted 
to tell you whether they were going to be available or 
not. So we've been making these contacts — Simpson 
told me that. 

Q. For the record. Major Simpson understood this 
Was sort of a close-hold, no^notes kind of operation; 
is that correct, sir? 

A. Yes, absolutely. 

Q. But he went — if I understand his testimony 



UNCLASSIFED 



I 

2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 



97 



UNCLASSIFIED 

64 
and thl3 issue -- he went to various people because he 
was told, that if these were to be released there is a 
process, an interagency process — that you have to get 
approval from various agencies like State and Treasury- 
and so forth; is that correct? 
A. Yes. 

Q. So he went to various representatives of 
those agencies as a means of finding out if, in fact, 
these radars could be released as part of the assets? 

A. Yeah, I don't know whether he dealt on the 
specifics of the radars or Just how do we get release 
on frozen- assets. That's a specific I'm not clear on. 
But in any case, the agency - and I forget who the 
hell It was that called me - called me to sort of say, 
you know, -enough of that; are they in good shape?" 
and so on. "If anything else, we'll take care of 
that." So we gave them the results of the test and 
that's where it stopped as far as my recollection. 
Q. With the radars? 
A. Yes. 

Q. General Russo, what happened next in terms of 
the Hawk repair parts? 

A. Then we received the... Well, I should 
mention that long about and shortly after we got 
through the list, because we were, again, in an on 
again, off again kind of situation, Simpson thought it 



UNCLASSIF'ED 



98 



UNCLASSIF3ED 



65 
a good Idea, to consolidate all of the Army Items 
because they were coming from multiple locations, at 
one place. 

Q. Pre-posltlon? 

A. Pre-posltlon them. So we staged them at Red 
River Army Depot which Is near Texarkana In Texas. As 
I recall, that consolidated that stuff out of five 
depots, Army depots, and we left alone one group of 
Items that were coming as I recall from the Tinker Air 
Base, and one group from DLA because we felt those were 
one origin so we didn't have to really pre-posltlon 
those. We could move them quickly enough. 

And so we did tell AMC, the Army Materiel 
Command to stage those Items at Red River. We sent out 
a message to that effect and they made that happen. 
And then around the 8th of May Is when I 
spoke to Admiral Jones. 

Q. Was that your first Involvement with him 
after General Powell had left? 

A. I believe so. But I remember Powell telling 
me Jones was coming In -- but the timing on It, whether 
I talked to him before the 8th of May or not, I'm not 
clear on. But I know that I did talk to him on the 8th 
of May. I told him what we were doing on the Hawk; 
told him what we were doing, and what we had done, and 
doing on the TOW missiles, and told him about the 



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66 

notlflettlon requlrenent. 

And shortly thereafter, on the 16th of May we 
got the release froa. the agency to ship the items to 
the Kelly Air Force Base. And our understanding was . 
'''*' '""^ wouldgotoJCelly, and then be transhipped 

"^'^^y^WB^M •"*>• »8>ln where our 
visibility or destination sort of dropped. 

Q. Did there cone a ti»e when Major Simpson told 
you he had tried to find out where the TOWs and the 
Hawks were going? 

A. I believe he may have said something like 
that and his answer was, continuously, he wasn't 
finding out anything. 



14 I ^- °^<1 yo" •^e'" aat him to try to find out? 
A. I don't recall that. 

Q. And as best you know, in terms of the 
chronology and your involvement, does that complete it 
on TOWs and Hawks? 

A. Yeah, as far as direct involvement, yes. 
MR. SAXON: Okay. I've got some general 
questions, but I don't think I've got anything specific 
^^ that flows from the chronology. Anybody else? 
2 Co responses from counsel.) 

BY MR. SAXON: 
Q. All right. General Russo, I asked you from 
the outset, if knowing the destination would have 



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o.used you to do anything differently. Would th.r. 
ha., been .ny aet of clreu.atancea In the,, tr.n,- 
•ctlona that would have oaua.d you to aort of .top and 
»tep back and aay, -Hey. what-, going on here7- 

A- Well, you know, I gueaa ... that's 
-peculation. I would aay, firat. you asked «e about 
the legality early on. and I told you, a, f.r as I knew 
there was nothing illegal, other than the notification 
Issue. 

Had I known It was Illegal, I think, I would 
have gone back and told Thur.an that - but I don't 
.enow that- because again, I had a great deal of confl- 
dence In his wanting to support how to do things right. 

And having said that. I'b reminded of what 
Powell told Be: -That Weinberger said. 'Do It In 
accordance with the law.'" 

So I guess if I knew that It was illegal. I 
think I would have gone back to Thurnan and said. 'Do 
you know thatT. But that's, again... I didn't know If 
it was legal or illegal; we raised the notification to 
what appeared to be the right levels. So I guess, 
that's as much as I can... 

Q- Okay, the next question deals with the 
distinction between a requirement imposed on the Army. 
and a request to the Army. We've heard in the course 
of many interviews and discussions and depositions. 



UNCUSSIF^'EO 



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68 
that certain folks at the Army, viewed thla as a 
-requirement- being imposed on thea or a mission given 
to the. from on high, in the Secretary of Defense's 
office, as opposed to a -request- that sort of comes - 
laterally into the Army from the CIA; is that the way 
you would have viewed this? 

A. Clearly, on the TOW I viewed that as a 
requirement. The spare parts I would view that as a 
requirement, minus, or a request, plus. 

And. I guess, only because they sort of asked 
U3 - you know, -What's the availability?- kind of a 
thing. 

The other one was not a question of, -Is it 
or isn't it? Can you or can't you.- It was you know, 
-Go do it- - at least that's how I interpreted it. 

Q. But on the Hawk repair parts the order came 
not from an Army aide to the Secretary of Defense, but 
the Deputy Secretary and. it came not to you. not from 
General Register, but from the Chief of Staff of the 
Army? 



21 *• ^"''••' ^"' if I "'re to draw the an^ogy: 
When Powell told me that the Secretary said, 
you know. -Do It within the law and keep the Army 
whole.- that said to me. implicit or explicitly, 



Weinberger had authorized the transaction. I 



25 **"'■' ""'' >-ranaacnon. I mean so. 

26 



If anything. Taft is one step down. 

UNCLASSIFIED 



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Q. Ok.y. 13 this - or either of these trans- 
actions. TOWS or Haw. repair parts, a .atter over which 
you relt the Army had discretion, as to whether you 
■ade it or not? 
A. No. 

BY MR. KREOZER: 
Q- Sir. when General Powell said, "Secretary 
Weinberger said, 'do it within the law.- What law did 
you take that to mean? 
A. Ahh... 

Q- Anything in particular? 

A. ■ Nothing particular. Just, specifically, 
<lon.t do something illegal. And that goes back to the 
comment that I made earlier with regard to the - if i 
-Ight us. -Yellow Fruit- without knowing, really, the 
3pecifics of Yellow Fruit; but the whole notion that I 
had been working with for about a year-and-a-half that, 
we. apparently, we were on the throes of doing things 
" if we didn't do thing, illegally - they sure as 
hell were pretty close to being illegal. 

So it was against that backdrop that the 
caution that Powell was giving me from the Secretary 
was the context in which I was placing this. 

Q. So would you say that, possibly, that General 
Powell was implying that you should go to your General 
Counsel or your general counsels in the Army to make 



69 



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.»" t».t t.U ... . l.,.i ,,.„..„„ „., ^^^ ^^^^ 
following? 

*• I gueas you could lapiy that. 

<5- Did you get that iBpreaalon? 

*• Not speoifically - non-apeclflc fra.3. at 
le"t I didn't read Into It that. Aa they aay. 

at the tine. I did not. 

But in the course cf event, with the General 
Counael.a orrice having heen Involved with that, within 

— ic - «hen we were talking about the Econo-y Act. I 
8-»3, I really didn't penetrate that very f.r. 
Br MR. SAXON: 
Q General, did you ever have any dealings 
yourself with Chrl, Leach.an at Redstone? 
A. No. 

Q- No discussions with hi. on pricing Issues? 
A. No. 

A question about thej^pfsyste.. As 

you understood It. whenff^s created and. ^ 

-as tightened up m late '8. under the direction of 
aeneral Thur.an. which you-ve already addressed; was It 
your understanding that It was to he the exclusive 
-ans for handling sensitive transfers to other 
agencies from the Army? 



UNCLASSIFIED 



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• procedures governing 
Systea contea- 



A. Tea. 

Q. Did you know whether th 
the adalnlstratlon of the 
plated any exceptions to it? 

A. I did not know that. 

Q. But I'B not suggesting there are, in fact, as 
1 understand it there are not. So would you -- 

A. I would say that there were not going to be 
exceptions. 

Q. In any of your dealings on Snowball or Crocus 
did you ever have occasion to deal with, personally, 
directly; with anyone on the National Security Council 
staff? 

A. No. 

Q. That would include Colonel North? 
A. No. 

Q. That would include Adairal Poindexter? 
A. No. 

Q. Let ae ask you a question or two about the 
Departaent of Aray 10 after these aatters becaae public 
and then the subsequent GAG report. The DAIG identi- 
fied three areas on a discrete pricing decisions that 
the Aray aade, in which the decision aade by the Aray 
was lower than later deterained it should have been, 
and the GAG agreed with those three, and added one acre 
and, in fact, the GAG report said that the pricing 



UNCLASSIFIED 



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UNCLASSIFIED 

decision on tha I-TOW. for the I-TOW downgrade; the 
b.3ic TOW price; the cost of the MOIC and the shipping 
and handling cost, were all too low. 1, there anything 
you find unusual about that? or coincidental? or is . 
that Just the way it came out? 

A- Well, firstly, I don't know what the IG 
report said. 

Q. You've not seen that? 

A- No. I have access to ay testimony but that's 
all I have access to. 

Now With regard to the GAG report as I recall 
I saw that, and one thing that impressed me was that, 
there were varying opinions. And so all I can say is, 
8uys - as I think, I may have mentioned to you before, 
I probably screwed up on this one. 

Now, but at the time that we were working it. 
there weren't too many smart guys around, and. several 
»onths later, that didn't increase by very much... 

So yeah, I probably screwed up. I would hope 
that - going back to Powell's comments from the 
Secretary - i would hope that the Army would send the 
right kind Of a bill over to the agency. Whether they 
^^ pay it or not? It's another matter. 

Q- Do you have any knowledge yourself of whether 
the Army - „IC0M. ha, in fact been made whole in the 
3ense, that it has been paid and reimbursed? and monies 



UNCLASSiFED 



106 



A T ^-- . . . 



73 



*• I don't .now. I Know that now th.t L. i„ 

the Ar.y a, part of the total billing. 

And I .now that they were pushing the hell 

«>"' I. on. t. now Whether any hin,„,,,„.._^^^^^ 
that MICOM ha3 been reimbursed. 

"" '"'''' '""« ">*' - ■'ad the .oney f.o-n 
-agency .0. the .l.,t Shipment. X. now p.etty _ 
that we did that. 

»" ro. t», „„„, „,„.„, .„^ ^^_ ^^^ ^^^^^ 

— .^ .n p„„.„, ,„ ..„ ,, ^„, ,^^^^^^^ ^^^^^^^^ 
.- t». ....,„..„.o, =„...„ ,„, „ ,„^ , ^^^^ ^^^^ 
no mowUdg. wn.re tii.t I,. 

«. ""■. rou ...n ..<,..„„„ „„ 

t«. TOW r.,......„, ,,., .,^^„^„ ^^^ .pp„,,u...„ 

""'" ""• '**"'" "' • "' -«.. or TO.. ,».o. 

"; "■" '" "" '" ' — ^ or ,0... »„:,, 

"". it ,h,pp„ .„ ,„, .,,„^^, 

»• I "o,.t „„.. u. .p.cric. but, u.u.u,. ,„ 



UNCLASSIFIED 



107 



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"""""'"• °' ■'"""• ""■-"»,«.„...._, 

r.progr,. .„,thl„g .!,„,. t„,t „„.j,^_ 

»" gl,„ th, r,l,.„. „„, „, ,„,^ ^^ _^^^ 

""" "" "-'<■ ""• '" y rr.„«,. 

«• But ,ou d„,.t r.o.u .M, l„„. ,.„ ,.^,^ 
addressed? 

*• No, absolutely not. 

«• ".r. you l„.,a,„ ., .1, ,, ,„^ <„„„,i„. 
•bout ,»„„ „„^ .,„,j„ ,^_ j^_^^^ ^^ ^^^_^^ 

'• No, Ur „.u».r pUc 8.o..„ ,, „,„^ 
''"" "out a <,.,f„,t.o„. : .„„ „, „„„^„^ ^^^^ ^ 
-" 1» th, P„t„on fro. „80 to -82 .„„, r„. ,„ .. 
'.t. •«. to .t, .... I .„ .„, „^^.^^^^ ^^ ^^^^^^ ^^_^ 

""""""• =° ' ""'- »••• ^" t», ,0. or t.l»„, 
.'out t..„ .,„<,, ,, „„,„, ,,^^ ^^^ ^^^^^^ ^^^ ^ 

aon't r....b„ u during th.t p.nlod. 

I" a aub„,„,„, ,.„, .. ^,,, ^^^ ^^^_ ,^^ ^^ 

'" "• '" "°"" ""' ">"0"«» ... 30 r .ou.d »a,. 
".» F„3 oa,„ .. ,„„, „^ ^^ j^^^^^ ^^^ ^ ^^^^^^^ 

""" "° """"■'"• =" ""• oou.d .a., ...„ . .,„ 
-." .».t .app,„« t. ., t.„„„ ..„. ,.,„..^ ..^ ^^,^ 



UNCLASSiFfED 



108 



UNCUSSIHEB 



that one. 

0. Wh.n you a.ld -Egypt- ,,, ,,, „.„ ^^^^^ _ 
*• Yeah, I neant Iran. 
Q. to go praola.ly to the late ,985 tl.e fra-e 
-ere you ..... or .„y ...ou.aion. .hout .hipp.ng H... 
»l33lle3 to Israel or to Iran? 
A* No. 

« An. in late ,985. .erore you .ere app.oachea 
^y Oener.l Hegl.ter an. ha. a .l.cua.lon with General 
Lowell around January ,8th of .86. i„ i.te -85 were 
there any .l.ousslon, you „r. a pa.ty to. .Uh regard 
to TOW .13311.. to either I.rael or Iran? 

*• ^or 3ure. Iran. „o. I,r„l. I .on't recall. 
I -i«ht .ay that thl. i. .„oth.r ,u..tlon that L. ,.y 
-let', g.t together l„ the ..«. roo..- 

«• I believe, .hen w. Interviewed you before, .t 
l"3t .y not., reflect that you told u, at on. point. 

♦ 6.000 to^mpa. . price that would have Included 
the ba.lc TOW. piu. „oic upgrade and ancillary co.t.. 
Do., that .ound correct? 

*• reah. It .ay well have been. I j„3t don't 
-e.ber the -16.000- but It .ay have been. And the 



75 



yWCUSSIFlEO 



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109 

wiivknooirei.u 

UNCLASSIFIED 

of What the anolUary coat, were going to be. and, 
certainly it waa going to be above the $3,500 for the 
«l33lle Itself. I Just don't recall the »6.000. 

Q. General Russo. to the best of your recollect 
tlon did you give anyone - anyone with the agency, 
General Powell, or anyone else the figure of $6,000? 
And If so, do you have any idea where you «lght have 
gotten It? 

A. The only way I can come up with that Is: 

(a) I may have given that figure. I don't 
recall it, but I ^ay have given the figure. 

• Certainly, we were asked to come up with a 
figure, and we were trying to determine what the 
-I33lle costs were that seemed to be about $3,500 and 
the question was: What were the additional ancillary 
costs that needed to be added to that? 

And there was a good deal of uncertainty 
about how much that would amount to. And so we may 
have come up with a $6,000 figure and I may have given 
that, but I don't recall. 

MR. SAXON: 1 would like to Introduce two 
n.ore exhibits into the deposition. The first one I'll 
ask be marked Deposition Exhibit No. 3. and I'll give 
you a copy of this and give you a moment to look at it. 
sir. 

(Whereupon, Deposition Exhibit No. 3 was 



ONCLASSIFJED 



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110 

UNCLASSIFIED 

77 

narked for identification.) 

Br MR. SAXON: 



Q- Have you had a chance to look at that, sir? - 
A. Yea. 

Q. Do you recall having aeen this before? 
A. Yea. 

Q. And it purports to be a meaorandua. for record 
dated 2<. September '86 by Vincent M. Ruaso. la that 
your signature at the bottom, air? 
A. Yes, It is. 

Q. And what can you tell us about the oircum- 
atanees of this memorandum? 

A. It's a little hazy but, I guess, it came 
up... 1 was on a visit down in Fort Eustls and I 
happened to be talking to the DCSLOG's office, and 
aomebody mentioned in passing, that they were trying to 
get in touch with Major Simpson. And I said. -What the 
hell's that all about?" 

"Well, there's some things going on with 
regard to his involvement here." 

And I said, -Well, geez. he's out at- - what 
th. hell's that place? out in Colorad^f - -Fltzsimona 
Army Hospital." I said. "Surely, you can get In 



"Well, we're having a problem." 

ONCLASSIFSEa 



Ill 



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liNCLASS!F."tD 



ran hla down for ae. 

" " •"" ""' <""■ .".^ I ..t t.cv fro. 
going on?" 

"•11. it ,ee.3 to .e that, that was the 
course that aald: (a) v» n— ^ 

U; Ve need you to tie down who you 

talked to with regard to thla project. 
«•• -This project" being Crocus? 
*• Crocus. And so as . .„„u of that. I .ade 
up this piece of paper. 

And Where It came up to the 9th of April, it 

-" in the tank and. ,o«ehow we reconstructed the 9 
April d.t e^; and I knew that next day was when I had 
talked tog^ „, ,,,^ ^.^ ^^_^ ^^^^_^^^^ ^^^^ ^^ 

^"LOC. and I think it wa. Sl.pson-s handwritten notes 
t'^at gave .e the further detail to put m here. 

I couldn't figure out - the reason I have 
-on or .hout 21 April" on General Thur.an was he was 

t'^at 1 oould.ve gotten to hi.. i „„.her talking to 
hi. in the hallway on that project. 



78 



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112 



Q- So 



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10 

11 

12 

13 

14 

15 

16 

17 

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19 



•^hls l3 basically « 

* ' you a moment to i«.u .. .. 



79 



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21 
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23 

24 



^"<^ ''-e thl3 marked a, D 

' " I'epoaltion Exhibit Ko. i, . 



— upon, oepoaltlon E.,i,,, ,,. , ^^^ 
--- - -entl.ieatlon b. CO. .llaoe 
" = ^"- - -' — a„ .,_.ioatlonO 
Sy MR. SAXON: 



^er seen this before? 



Yes. 

Q- Have you e 

*. Mo. 

^* *11 '•Ight, it 1, , 



and It' 



3 bee 



record 
"--• ^t is dated 1 necember ,986 



" P''«Pared by Colonel Joh 



1 W. MacDonald, I 



ONCIASSIREO 



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*• reah. 

^' ^t appears to be, , bl^ . 
Colonel MacDonalc,., st. . chronology f.^^ 

» standpoint about Crr.. 
"'•• two point, I «3„, , '"°°"' «"'' there, 

""t to aek you about: 

'^-^onald I'ate!: ^^^ '"' ''"'"'" *""^ ^^^^-^ 

: - — -" o. Con..e33 o. ...J^, 
:;-" -^ -- -t .e,po„3ibiii, 

' : °" "' ^^^""'- ----^ o. the 

°^ the materiel." 



80 



*"^ i» that an accurate stat 
y°" understand? »taten,e„t as far as 

*• ^•"' '•eally not sure of that 
'""y '•elt that way „,,,, ' °''''^^^"^/. the 

"ay- Whether DoD feu th,. 
'•««lly can't say. ' "^^ ' ^ 

''• «"t as I understand u c„, 
"''"l^ not hlaself h "'' MacDonald. 

'--"•-"""-r::::r;:::;-"" 

I guess, While Tt» 

'" " ».r„ ,,„ ,,, • "' ■"'"' '- to .0.0. 

""" or .....„,,.•'■ '^"». .o ,» 

'»" ". cu ,»„„,, ,. ^^/ ""• '•"" ". ».. 

"' °"« to „ot.r, co„,..„, ., 



WWCMSSIFfED 



114 



UNCLASSlFStO 



" - g. 

there was any difference between the Army and thr ' S 

Department of Defense on this issue? 

A. I don 'rVelleve there was a difference. I 
Just can't tie that down, but I believe we were in 
agreement as to who had the responsibility. 

Q. All right, sir. In the second paragraph. 
Colonel MacDonald Indicates that you had informed him 
of the tasking on Crocus and sought out his views. He 
makes a statement: 

"Major General Russo expressed concern 
then and throughout the transaction 
with the legal ramifications of the 
transfer." 



And he goes on to say who you might have discussed that 
with. What can you tell us about that? 

A. I think that it was more a question on, who 
has the responsibility to go do the notification. Are 
we still on the same — you know -- on the same 
guidelines. 

22 '^' °^^^' ^ wanted to make sure that, that's what 

23 your sense was you conveyed to Colonel MacDonald; that 
2^ whether the law required notice to the Congress as 
2j opposed to whether tflr'ls "action "^as in7gal,^nd you 
2^ were saying it would be the former? 



iJKCtA^F'ir 



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*• Abaolutelj 

"»• "X0«: ..„„.!, , ,.,,,,^ ^^_^,^ _^^ 

""• '"'■■ '""''■ '■• "".. . ,U .... , 
record. 

By MR. SABA: 

^"t - ... . .»„„.,.„ ,, ,.,,,„, ln...tU.tlo„, „. 
•"... . r.„r., ...... ...„ ,„^ „,^,^^ ^^^^ ^^^^^ 

PM.. ..t..„.„ .„, ...,,.„„^^ if you =.„ „..U. 
«■ C.rt.lnl,, th. I>,p.rt..„t of th. ,r., 10 

representatives. 

"• And that included a deposition.- did it not? 
*• '". wan ... waita.inute. I don't .now 

--t co.e .ac. and «et ., .ohn Hen., on a„.t.i„« that 
' '••can. ir that's What a deposition is? 
Q' It was a sworn statenent? 
*• It was a sworn statement, yes. 
Q- Apart fron, the DAIG's report have you 
provided sworn statements - or have you been 



how 



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"ny people have you actually - ju,t an.r. . 

/ just apart fron the 
DAIG7 

A- Wen. iet.e,ee ... i thin., there were 

-.en, orthePBX, xthln. there.e.e.e^hereorthe- 
House A.„e. service, Co.^Utee; .e ha. a .iscuss.on; 
OAO oa.e over. I thin, that's it. those four. 

^' In addition to the OAIG report to what othe. 
«ove.n„e„t orrioials have you p.ovi.e. eithe. testimony 
or information in connection with these matters^ 

A. The Federal Bureau of Investigation; the 
House Armed Services Committee; and the General 
Accounting Office. 

""• '""" '=•»•'■•'. "t .. Ju.t ,„ .„ ,,. 
"CO.. „„ ,,,.., „, ,,,, ,,,.^^^ ^^^^^ ^^^ ^^^ 

3t.fr or t», S.„.t, co..ut.., „„..„„,,. ,,„,,. 

very helpful. 

WITNESS: Thank you, sir. 



83 



(Whe 



reupon. at 3:55 p.m.. Tuesday. 



^— 16. 1987. the taking of the instant 
deposition was concluded.) 



UNCL/ISSinED 



117 



Wt/ISSIfa 



84 



3 
4 
5 
6 
7 
8 
9 
10 




12 
13 
U 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 



I. VINCENT M. BUSSO - 

» ' ". ,„.,,:::.: --- •«— >.„ , 

^"«l"»lve. Of the t. ""^ - 

• °i the transcript of «« -4 

' »y Oepoaltlon and that: 

.Check appropriate box.: 



(Date) 



^^om%mB 



118 



2 
3 

4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
U 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 



yNCLASSIFlEO 



WP0HT8H.S CBRTIFIC1T8 



I. "obert S. Kass, verbati™ 
""^ted States Ar« r '"eporter for the 

" A'-oy Inspector General A». 
''-"fy. that this 13 a , ' "''' '° ''«'-«'>y 

^"tl«o„, or the aror '" "^ """'' ""^^""^ "' '''^ 

— . testi..; a r"'^°"-^ ^'— - -- - 

"ny was reported bv n. k 
-- -' ^eeo.atlo„ .s the. t tV''"^""^'- ^ 
--^ -3 prepared by .e to th ''^'^''^"^^^^ ^y .e 

^--e.. that X p/ ^ '"' °^ -^ -^^^'- -d. 

" I process the requlslt. . 
'^-tlon .ith .egard to th "' ''""'• 

^o the exhibits contained herein. 




ROBERT S. KASS 



DAIG-IN 



eporters Section 



iooB iE7i*r p:„r» 



(Date) 



UNCUSSIFiED 



119 



/ 



UNCLASSIMED 



► Deciassifiedmeleased on Zfeii rt-»0 8g, 
under provisions of E.O 12356 
Johnson. National Security Council 



.Si?62^ 



D 2915 



li%(i 



OCPAWTMENT Of THt ARMY 

oFFici or mc ctiiiu ceuijii 

WASMmaTON 






UNCLASSIFIEO 



DEPOSITION EXHIBIT No. 1 
(page 1 of 2 pages) 
WITNESS: LTG V.M. RUSSO 




110 

D 2916 



wmmm 



13 FEB 1986 



.MEMOBAHDOMJOR THB _SECRETARr_OP THE AKMY^ 
SUBJECT: Support to Intelligence Operations 



During a recent review of an issue in our office, 
we noted a significant provision in the Intelligence 
Authorization Act for Fiscal Year 1986 that we wanted 
to call to your attention. 

During Fiscal Tear 1986, the transfer of defense 
articles or services exceeding one million dollars by 
an intelligence agency to a recipient outside that 
agency is considered a significant anticipated intelli- 
gence activity for the purpose of reporting to Congres- 
sional intelligence oversight committees. In addition, 
an intelligence agency may not transfer any defense ar- 
ticles or services outside the agency in conjunction 
with any intelligence or intelligence-related activity 
for which funds were denied by the Congress. 

These provisions appear to reinforce our view of 
the importance of Congressional notifications in con- 
nection with support to intelligence operations. 



^^^vi \J. (Z^\.<y/jhIL^ 



■^fleclassilied/Released on.2^JrtjO<98 
under provisions of E,0 12356 
by K Johnson, Naiional Security Council , , 

Susan J. Crawford ^y 
I \*yy } General Counsel 

'^ ' >^A,.^i^^,'^^J^-tl*^:..^'^■■ 






■ mill iix'vinrii 



wmm 



<-- . DEPOSITION EXHIBIT No. 1 

ti=-^f^ / (pe<^e 2 of 2 pages) 

(lr*^'l^ ^-) WITNESS: LTG V.M. RUSSO 



121 




'mm 






DALO-ZB 



MEMORANDUM FOR RECORD 
SUBJECT 



-JujnsofEO 12356 
^ilIlonal Secunly CouncI 



Support for Intelligence Activities PWwHy Deciasaiiej/Reieased on ^^Oo^h SQ 

under provisions o( E 12356 
by K Johnson. National Secufity Council 



1. (S) On 18 January 1986, The Army was tasked to provide support 
in terms of 3S04 (later increased to 4509) missiles. The task was 
to turn these items over to the receiver at Re^s4Qnfi_Airf ield. Use 
and destination was unknown. The task would be executed upon 
receipt of certification of funds by the receiving agency. 

2. (S) The first phase of the task, delivering 1000 missiles, was 
not executed until 13-14 Feb 86, due to initial delay in cer- 
tification of funds by the receiving agency. 

3. (C) During the course of coordination with OSD (MG Powell) and 
OSAGC, questions were asked as to the responsibility for end item 
usage. This was identified as a responsibility of the receiver. 

4. (C) On 7 Feb 86, the new law (The Intelligence Authorization 
Act for Fiscal Year 1986) which required Congressional notification, 
in certain circumstances, became known. Coordination was accom- 
plished with the Office of the Array General Counsel (OSAGC) as to 
the Secretary of the Army's responsibility. This was determined to 
be a responsibility of the receiver, not the Secretary of the Army. 
This position was later confirmed by the Army General Counsel. 

5. (S) The notification requirement, while clearly to be satisfied 
by the receiver, places the Army In a difficult position, we 
believe the notification must occur, and as the provider, believe 
the receiver must b« advised that notification is the respon- 
sibility of the receiver, and must be accomplished. I have 
discussed this with the Office of the Secretary of Defense; they 
have assured me — and asked that the Secretary of the Army be assured- 
that the receiver Is fully aware of Its reporting responsibility. 






VINCENT M. RUSSO ^ 









Major General, GS 
Assistant Deputy Chief of 
Staff for Logistics 



mmm 



DEPOSITION EXHIBIT No. 2 
(1 page) 

WITNESS: LTG V.M. RUSSO 



122 







iTON. C. 2031005 



DALO-SMS -LA/ 1 9 J CRU . MFR 



24 Sep 86 



MEMORANDUM FOR RECORD 



ODCSLOG Support for Project CROCUS (u) Pamally Decl3ss,t,edmele3sedon^:^8Q. 
'^'^ ■' under provisions ot E 123o6 

by K JoHnson. National Securi^ Council 



1. (S) This MFR is Intended to record ODCSLOG and my involvement 
in the subject Project. The project is in support of the Central 
Intelligence Agency. 

2. (S) On 9 April 1986 I was called to meet General WicVhara (CSA)' 
in the "tank" at OJCS. I did so at 1440 hours. He informed me that 
the Dep Sec Def (Mr. Taft) had advised him of a requirement to sup- 
port the Agency. This requirement involved some 240 spare parts for 
the Hawk missile system. The CSA requested I pick up the action 
with^h^Agencv. Accordingly, at 1520 hours I made initial contact 
with^^^^^^HI (Agency) . 

3. (S) On 10 April, at 1000 hours,^|^mH(AaencvWl8ited with 
MAJ Simpson (ODCSLOG Action Of f icer)^n^myse^7■QHHm^pro- 
vided a list of 238 items. The chronology of event^suDseauent to 
this point, are as outlined in MFR, file cite: DAL0-SMS-LA/18:ME.7Auo, 
dated 7 August 1986, subject as above, with the following excep- 
tions: 



Advised BG Peay of status. 

Advised LTG Brown (DAS) of actions and 



(U) 11 April 1986. 
(U) 16 April 1986. 

status. 
(U) 18 April 1986. Advised CSA on status. 
(U) 18 April 1986. Advised BG Cavezza of status. 
(U) o/a 21 April 1986. Advised GEN Thurman that we had an 

action on Hawk spare parts similar to the action on TOWs. 






. :-" :T^"'I3 07 THIS DCCIT'SNT IS 

KOR;...-.. -:-...- ■ ir.u:ioa 

CH'.KrT.c .- • :•"-■. '-■ •■' - ^ a::::.33 
lOiKisro:. •■-'-! -.: :r2L::" :z)TO 
SHOSE v.nc .""J-i i-jo.; T.iz i.:ro::niioH 

EXHIBIT R-2 



i 




j^^dlcj-y^. 



VINCENT M. RUSSO 
Lieutenant General, GS 

DEPOSITION EXHIBIT No. 3 
(1 page) 

WITNESS: LTG V.M. RUSSO 



m^m 



CLASSIFIED HY: CASP (U) 



123 



UNCLASSIFIED 



******************** 

THIS DOCUMENT IS CLASSIFIED TOP SECRET, 
AND THEREFORE, REMAINS IN THE POSSESSION 
OF COUNSEL IVHO POSSESS THE REQUISITE 
SECURITY CLEARANCES. 




Sij 



fltlKS«fi 



DEPOSITION EXHIBIT No. 4 

(1 page) 

WITNESS: LTG V.M. RUSSO 



124 



UNKSIMD 



^.M-" 



DEPOSITION OF 
MR. NESTOR SANCHEZ *"— * ""^ ' T 



cowwrr I. I m '^ mwa 



The deposition hearing convened at 1000 hours, 28 August 
1987, in room 3E988, The Pentagon, District of Columbia. 

PERSONS PRESENT 

MR. NESTOR D. SANCHEZ, DEPONENT 
MR. EDWARD J. SHAPIRO, COUNSEL FOR DEPARTMENT OF DEFENSE 
MR. JOHN SAXON, ASSOCIATE COUNSEL, 
UNITED STATES SENATE SELECT COMMITTEE 
ON SECRET MILITARY ASSISTANCE TO IRAN 
AND THE NICARAGUAN OPPOSITION 
MR. JOSEPH SABO, ASSOCIATE COUNSEL, SELECT COMMITTEE 
MR. ROGER LEE KREUZER, INVESTIGATOR 
SELECT COMMITTEE TO INVESTIGATE 
COVERT ARMS TRANSACTIONS WITH IRAN 



UNUSED 



Partially Oeclassified/ReteaMd onl^JflO ( 

under provisions of E.O 12356 

by K Johnson. National Sscurity Council 



NO iAoF- 



-ocn 



125 



UNCLASSIFIED 



1 MR. SAXON. Mr. Sanchez, what are your time constraints? 

2 When should you get away frcin here: 

MR. SANCHEZ. I should get away from here a little bit before 

5 twelve. I have a twelve-thirty luncheon, and by the time I get 

6 out and get there, so if we could break up about ten of. 
7 

8 MR. SAXON. Then let's get rolling. Before we go on, let me 

9 just say we're going to cover pretty much the same territory we 

^ covered when Mr. Kreuzer and I and one of the other Senate lawyers 
interviewed you back in April, whenever it was. Mr. Sabo was not 
with us at that point. There are a few things that we have 
learned or documents that we have collected since then and so 
forth, but that is basically what we're going to be doing. 
Would you swear the witness. 

REPORTER. Do you swear that the testimony you are about to 
give in this hearing shall be the truth, the whole truth and 
nothing but th« truth, so help you God? 

21 MR. SANCHEZ. I do. 

22 

23 MR. SAXON. Would you state your full namfe for the record, 

k-. please, sir? 

25 

26 1 



mmm 



126 



#msw 



1 MR. SANCHEZ. Nestor D. Sanchez. 
2 

5 MR. SAXON. And what is your current employment, Mr. 
Sanchez? 

5 

6 MR. SANCHEZ. I'm retired. 
7 

8 MR. SAXON. And what date did you retire from the 

9 Government? 
10 

? MR. SANCHEZ. On 28 February 1987. 

'2 

i MR. SAXON. At the time of your retirement, what was your 

14 position? 
15 

16 MR. SANCHEZ. I was the Deputy Assistant Secretary of Defense 

17 for Inter American affairs. 
IS 

19 MR. SAXON. And you had been in that position since 1981. Is 

:;0 that correct? 

21 

22 MR. SANCHEZ. Yes. 

23 

i, MR. SANCHEZ. And prior to that, you worked with the Central 

25 Intelligence Agency for approximately thirty years' 

26 



UNCLASSm 



127 



UNCUSSiFIED 



1 MR. SANCHEZ. Yes. 

2 

MR. SAXON. If you would, tell us what some of your 
assignment si 




1 MR. SANCHEZ. I retired from the Agency in 1981, when I 

8 accepted the position at the Department of Defense. I was at that 

9 time the Chief of an area divisior 




i MR. SAXON. When you were the Area Division Chief at the 

-4 Agency, who was your superior? 
15 

16 MR. SANCHEZ. The Director: the Chief of Operations. The 

17 DDO. 



19 MR. SAXON. Mr. Sanchez, do you know a gentleman by the name 

3 of Rob Owen? 
21 

22 MR. SANCHEZ. I don't know him well: I've met him. 
23 

2-. MR. SAXON. And what were the circumstances under which you 
25 met him? 
?6 3 



UNCLASSIFIED 



128 



uNcussro 



1 MR. SANCHEZ. Official. I'm trying to think. I don't 

2 believe that there was any time when I attended any meetings with 
- him, so the appointment was really rather casual. 

4 

MR. SAXON. Do you recall a time in 1983 when he introduced 
to you a gentleman named John Hull? 

8 MR. SANCHEZ. Would you elaborate a little on your question? 

9 

10 MR. SAXON. Mr. Hull is a native of Indiana who currently 

1' lives in Costa Rica and has a very large ranch there. 
12 

3 MR. SANCHEZ. In '83. No, I do not recall having been 
-• introduced to Mr. Hull. 

15 

16 MR. SAXON. Do you know John Hull? 
17 

18 MR. SANCHEZ. Mo. 
I? 

20 MR. SAXON. And your best recollection is you never met Mr. 

1 Hull? 



MR. SANCHEZ. That's right. 



uNtmssm 



129 



UNCUSSinEO 



I MR. SAXON. Let me go to the subject of Felix Rodriguez and 

"> ask ypu if you know Felix Rodriguez by that name or by the name of 

Max Gomez? 
4 

5 MR. SANCHEZ. Yes. I know Felix Rodriguez. 
6 

7 MR. SAXON. And what can you tell us about when you first met 

8 him and how you first met him? 
9 

MR. SANCHEZ. I met him when I was still with the Agency. 

.2 MR. SAXON. Approximately when? 

13 

14 MR. SANCHEZ. Ten years ago: a very rough approximation. 

15 

16 MR. SAXON. When was the last time that you saw »lr. 

17 Rodriguez? 
18 

19 MR. SANCHEZ. I'd have to look up the date, but probably 

g around the time that he went to El Salvador. 

^2 MR. SAXON. So, it was approximately February of 1985. Does 

23 that sound about right? 



UNCUSSlflED 



130 



UNCIASSIHED 



j^ MR. SANCHEZ. That sounds about right. 

2 

MR. SAXON. Did you see him up here before he went down? 
"n. 

5 MR. SANCHEZ. Yes. 
6 

7 MR. SAXON. Did he tell you what he was going down to do? 
8 

9 MR. SANCHEZ. Yes, to advise the Salvadoran Air Force on some 

10 helicopter operations against insurgency strong holds. 

^ MR. SAXON. Did he tell you of any of the contra support 

.3 activities he was planning on engaging in? 

14 

15 MR. SANCHEZ. No, we never discussed that. 

16 

17 MR. SAXON. Did you ever have such a discussion with anyone 

le else, such that at the time he was going you would have been aware 

19 that that was part of the reason he was going? 

■>0 

21 MR. SANCHEZ. No. 

22 

23 MR. SAXON. Did you ever have occasion subsequently to learn 

^._ that that was the nature of his primary mission there? 

25 



UNCLASSIFIED 



131 



UNCUSSIFIED 



1 MR. SANCHEZ. After we all found out about it, yea. 

2 

3 MR. SAXON. After these matters became public? 



5 MR. SANCHEZ. Yes, that's right. Before that, no. 

MR. SAXON. Did you ever have a discussion with General 
Gorman about Mr. Rodriguez and what his activities were going to 
9 be? 
3 

MR. SANCHEZ. Only when I found out that Mr. Rodriguez wanted 
to go down there to help, I advised General Gorman that this was 
-3 taking place. 
14 

15 MR. SAXON. Did General Gorman At that point if this was 

16 contemporaneous with Mr. Rodriguez going down there, that would 

^ have been at a time when General Gorman knew that Mr. Rodriguez's 
18 primary mission was to pay the FDN. Did he ever make that known 
"-9 to you? 

MR. SANCHEZ. No. 
-2 
23 MR. SAXON. Before I go to some documents, let me go back and 



UNCLASSIFIED 



132 



UNCUSsra 



1 ask you if Rob Owen ever made you aware of the activities he was 

2 engaged in at the request and support of Colonel North to aid the 
^ Contra private resupply operation at that point? 

5 MR. SANCHEZ. No. 
6 

7 MR. SAXON. Let me ask that these first documents be marked 

8 as Sanchez Exhibit 1. Here is a copy for you, and I'll let you 

9 take a few minutes to read that. 
IB 

Have you had a chance to read this? 
12 

13 MR. SANCHEZ. I have not seen it before. 
14 

15 MR. SAXON. No, I'm sorry, have you had a chance to read it 

16 now? 
17 

18 MR. SANCHEZ. Yea. 
^9 
MR. SAXON. The cover sheet is a memorandum to Ambassador 

21 Pickering from Colonel Jim Steele, head of the Mil Group in Bl 

22 Salvador, dated 1 February 1985, and it contains a cable, back- 

23 channel cable from Ambassador Pickering to General Gorman, which 
t.-. simply talks about the understanding for Mr. Rodriguez to come to 



UNCLASSIHED 



133 



25 



UNCLASSIFIED 



1 El Salvador. It indicates, at numbered paragraph 3, and I quote, 

2 "Mr. Rodriguez has high level contacts at the White House, DOS and 

3 DOD, some of whom are strongly supporting his use in El Salvador." 
Unquote. Would you have any reason to believe that you would be 

5 deemed one of Mr. Sanchez's contacts at DOD. 
6 

7 MR. SHAPIRO. Excuse me, Counsel, I think you meant Mr. 

8 Rodriguez. You said, "Mr. Sanchez's contacts." I think you meant 

9 Mr. Rodriguez's contacts. 
10 

MR. SAXON. I'm sorry, Mr. Rodriguez's contacts. Would you 
have been in the category of someone who supported his use in El 
Salvador? 
-4 

15 MR. SANCHEZ. Well/ I don't know if I could be considered 

16 as high level, but yes, I supported his use. 
17 

18 MR. SAXON. To whom did you make that known? 
19 

20 MR. SANCHEZ. To Don Greg* when he wanted to recommend him to 

21 the Salavadorans and to General Blandon.' I had never worked with 

22 Mr. Rodriguez, but I had heard of his expertise in this type of 

23 operation, which is something that we had been discussing as 

2 useful in Salvador and here was the opportunity to have somebody 



. UNCUSSIRED 



134 



DNMWfl 



1 advise and train the Salvadorans. 
2 

3 MR. SAXON. And did you talk with General Blandon 

4 personally? 
5 

6 MR. SANCHEZ. Yes. 

7 

8 MR. SAXON. At that time did you in any way discuss whether 

".r . Rodriguez would have other duties, meaning helping the Contras 

in any way? 

2 MR. SANCHEZ. No. ..;. 
13 

14 MR. SAXON. That General Blandon would raise that issue with 

15 him? 
16 

17 MR. SANCHE2. No. 

18 

19 MR. SAXON. Let me have you look at the next exhibit. This 

~0 is a cable from Ambassador Pickering for Craig Johnstone, February 

1985. 
22 

23 MR. SHAPIRO. Excuse me, Counsel, are you going to have these 
k exhibits numbered, "Sanchez, 1, 2," etcetera? 
25 



UNCLASSIFIED 



135 



UNCUSffO 



MR. SAXON. Yes, this will be Sanchez Number 2. 



MR. SANCHEZ. Do you see a date on this' 



MR. SAXON. Yes, sir, it's 12 February 85, 

MR. SANCHEZ. February '85. 

MR. SAXON. If you read the text, within the text from 
Pickering, it's actually a cable that Ambassador Pickering 
received from General Gorman on February 8th, '85, which says, and 
the subject there above is Felix Rodriguez. It says, and I quote, 

"Subject has been put into play by Ollie North Ollie assures 

me that he will pass word to Rodriguez to get in touch with me 
before he goes any further." Dnquote. Further down, in the 
second paragraph, and I quote, "But Ollie assures me that his 
intent was to tocus Rodriguez on forces operating elsewhere in 
Central America and that nothing more than consulting with," and 
the word is redacted from another copy of this is 
"Blandon, " . . . "was contemplated." Then below that, "Opining that 
we really had enough advice for the El Salvador Air Force on the 
NET at the moment, Ollie rogered, and said that Rodriguez can be 
much more useful in other places where aid and advice is much 



UNCiissra 



136 



10 



25 



yNClASSiHED 



1 scarcer." Did you ever have any discussions with General Gorman 

2 or Colonel North, or anyone that Mr. Rodriguez aiding the El 
Salvadorans was simply a cover for his engaging in activities to 
aid the Contras? 

5 

6 MR. SANCHEZ. No. 

7 

8 MR. SAXON. Let me show you then, and have this marked as 

9 Sanchez Exhibit 3, a cable that is from General Gorman for 
Ambassador Pickerir.9 and Colonel Jim Steele, and it's dated 14 
February 85, and it references discussions that Gorman has just 
had with Mr. Rodriguez after he arrived in Panama. I'll give you 

-3 a moment to read that. 
14 

15 MR. SHAPIRO. Counsel, while Mr. Sanchez is doing that, let 

16 me ask you for the record, something just to clarify what I think 
1'^ is your intention. I take it that you don't by juxtaposing these 
18 documents with your questions seek to have the witness adopt some 

5 characterization that the documents are related in some way to the 
3 questions, other than as might be expressly described In the terms 
21 of the question? 



MR. SAXON. The documents are very definitely related to the 
questions, as evident by the questions, and he can state what his 



UNCUSSIFIED 



137 



UNCLASSIFIED 



knowledge was or what it wasn't. 

MR. SHAPIRO. Well, the reason I asked was that your last 
question had no reference to the document. It seemed to be a free 
standing question. 

MR. SAXON. Well, it definitely had reference to the document 
because that document shows that in the conversations between 
General Gorman and Colonel North, Mr. Rodriguez was not really 
going to assist the El Salvadorans: 




MR. SHAPIRO: Then I guess it is appropriate for us to be 
having this discussion. What I 

MR. SAXON. Well> not necessarily« if you want to be 

technical, Mr^ Shapiro, since Mr. Sanchez is not a government 
employee, and you are an agency lawyer, but we will have the 
courtesy to entertain any objection you want to make. 



MR. SHAPIRO. I really am not trying to be contentious, 
.i Counsel, I'm just trying to clarify something. I don't think it 
23 is your intention to ask the witness to agree with or even comment 
2^ on your characterization of the document except insofar as you may 
?5 
26 ,3 



UNCUSSIFIED 



138 



25 



UNCLASSIHED 



I directly ask him in your question. Is that correct? 

2 

5 MR. SAXON. That's correct. He can accept, embrace or 
4 disagree with any characterization I put on the document. 

5 

6 MR. SHAPIRO. But what I want to make clear is your questions 

7 are your questions and he can respond to those and if there is 

8 some inferential characterization of the document that is not 

9 explicit in the question, he need not address it. Is that a fair 
statement? 

^2 MR. SAXON. That's your question, he can address it, as 

13 he... 

14 

15 MR. SHAPIRO. Is it a fair statement? 

16 

17 MR. SAXON.- Sure. 

18 

19 MR. SHAPIRO. Okay. 

20 

21 MR. SAXON. Mr. Sanchezi thia cable from General Gorman from 

22 Ambassador Pickerinq^ and Colonel Steele, 14 February 85, which you 
■>■> just had a chance to read, records a meeting which General Gorman 
24 has had with Mr. Rodriguez, in which he says in numbered paragraph 



UNCLASSIFIED 



139 



UHCUSSlflEO 



2, and I quote, "Rodriguez' primary commitment to the region is! 
ito assist the FDN. I told him that the 
FDN deserved his priority." Unquote. First question: did 
General Gorman ever tell you in any conversation that you had 
subsequent that he had indicated to Hr. Rodrig uez that his 
commitment was assisting the FON^^^^^^^^^^Iand not the Gl 
Salvordan Air Force? 

MR. SANCHEZ. No. 



MR. SAXON. Did Mr. Rodriguez ever indicate to you that that 
was his priority in going to El Salvador? 



MR. SANCHEZ. No. 



3 
14 
15 

16 MR. SAXON. Did anyone else ever Indicate to you/ Colonel 

17 North, Ambassador Pickering, or anyone with whom you would have 

18 had conversation, that that is what Mr. Rodriguez was doing in El 
'9 Salvador? 



21 MR. SANCHEZ. No. Because he was also advising the 

22 Salvadorans. He went down there for the purpose that I was 

23 involved in sending him down there for and he was doing that, 



UNCLASSIRED 



140 



uNimsra 



1 MR. SAXON, I understand that your testimony is that that is 

2 your understanding of why he had been there. But when he 

3 testified in public session before our Committees earlier this 

4 year, that that was more or less his cover for going down there, 

5 and that his primary mission was to assist the FDN, and he 

^ confirmed in his public testimony, in essence, the statements that 
are in this cable traffic. But I understand that you are saying 
your understanding at the time was that he was going down there to 
assist the El Salvadoran Air Force. 

MR. SANCHEZ. And strictly for that. Not to provide cover 
12 for anything else. 
13 

14 MR. SAXON. Do you know Lou Rodriguez? 
15 

16 MR. SANCHEZ. No. I may have met him, but I don't know him. 
17 

18 MR, SAXON. Did you ever have occasion to discuss Feliz 

19 Rodriguez with Colonel Jim Steele? 
20 

1 MR. SANCHEZ. Yea. 

^i 

23 MR. SAXON. Did he tell you that Mr. Rodriguez was doing 
«. anything other than aiding the El Salvadoran Air Force? 
25 
26 16 



vmsmd 



141 



UNCLASSIFIED 



1 MR. SANCHEZ. No. He was very complimentary though of the 

2 advice that Feliz Rodriguez was giving the Salvadoran Air «"orce, 

3 in the PRAL operations. 
4 

MR. SAXON. Did Colonel Steele ever indicate to you that he 
had been given the assignment of monitoring Mr. Rodriguez 

7 activities? 

8 

9 MR. SANCHEZ. No. I don't recall that I was ever told to do 

10 thatf but as the NIL Group Commander in El Salvador, Colonel 

^ Steele certainly would be overseeing what Mr. Rodriguez was doing 

"2 with the Salvadoran Air Force. I see nothing....! would believe 

that to monitor what he was doing would be part of his work. 
.4 

15 MR. SAXON. Did you have any questions? 
16 

-^ MR. SABO. . Just one or two. What did you understand Mr. 

J9 Rodriguez' task to be in El Salvador? 
19 

"0 MR. SANCHEZ. What we have stated before. To go down to PA 

-1 Salvador to advise and help train the Salvadoran Air Force and a 

22 special unit in the Air Force in PRAL operations in the airborne 

23 mobile operations. 



UNCUSSIFIEO 



142 



UNCIASSIHED 



1 MR. SABO. At whose direction? 
2 

3 MR. SANCHEZ. At General Bustillo's: at the Salvadoran 

4 direction. They were the ones who.... 
5 

6 MR. SABO. So General Bustillo would command Felix 

7 Rodriguez? 



9 MR. SANCHEZ. He's in charge of the Air Force. He is the 

10 Chief of Staff of the Salvadoran Air Force/ so Rodriguez would be 

in effect* advising him and the units under him. 
.2 

13 MR. SABO. Why would Steele then be ir. a position to monitor 

14 or supervise his task? 
IS 

16 MR. SANCHEZ. Well, I didn't say he would be in a position to 

17 monitor or to atipervise his task, I would say that he would 
13 certainly be, aince he is involved in the security assistance 

19 that's being provided to the Air Force and to the Salvadoran Army, 

20 that he certainly has no reason not — this is not a covert 

21 operation of any kind. There is no reason why he should not 

22 discuss these operations along with those operations that he was 

23 also trying to train Salvadoran units and provide training for 
It-. Salvadoran units. 



Mmim 



143 



UNCLASSIHED 



1 MR. SABO. Did you obtain further communications from General 

2 Gorman, or his successor, General Galvin, as to Felix's 

3 activities? 

4 

5 MR. SANCHEZ. Only in the area of his advice to the 

6 Salvadorans in the PRAL operations, the PRAL operations, and those 

7 were very... I must say people were pleasantly pleased, I would 
S say, that it was going very well. 

10 MR. SABO. What I'm trying to understand is we have Felix 
going down to Central America and General Gorman basically 
complaining that he's there on a private basis, and suggesting 
that he be sent off to worV with the anti-Sandinista forces. He 
then does provide assistance to the El Salvadoran Air Force. I'm 
trying to understand how that relationship with the United States 
military forces works, in view of General Gorman's initial 
opposition to his presence on that program. 

MR. SANCHEZ. When 1 talked to General Gorman about Felix 
Rodriguez coming down there, he said he wanted to make sure that 
it was a coordinated effort and that it was up to the Salvadorans, 
if they wanted his advice, to take him on. But we had nothing to 
do... I want to correct your question there a little bit when you 
said "then." During the time that I was involved in this, it was 



ONCLASSra 



144 



UNCIASSIHED 



for the purpose and purpose only of advising the Salvadorans in 

their air mobile operations. I had nothing I had no 

discussions about any other duties that Gorman may have had. This 
is the first time I've seen this cable here on, that General 
Gorman thought he would be better used in other operations. I had 
not seen that before. 

MR. SABO. Were you aware that Felix was involved in 
operations, other than assisting the El Salvordan Air Force? 



12 
13 

•-4 
■5 
16 
1" 
IS 
13 
^0 

22 
2? 
24 
25 
26 



MR. SANCHEZ. Not in the early part of it. I was aware of it 
after it became public, and. ...but, I'm just trying to thinV if I 
had seen any intelligence that I had focused on. It would have 
been through intelligence available to us, but not through any 
briefings that I may have received from anybody. 

MR. SABO. 'Do you recall if Colonel Steele told you or 
appointed at any time that Felix was involved in activities on 
behalf of the anti-Sandinista forces? 

MR. SANCHEZ. No, he did not. 

MR. SABO. Were you aware that Colonel Steele and/or Felix 
had in their possession a KL-43? 



UNClASSinED 



145 



25 



UNCLASSIFIED 



1 MR. SANCHEZ. No, I did not. 

2 

-> MR. SABO. John, did you have more? 

4 

5 MR. SAXON. I'm ready to go to another topic. 
6 

7 MR. SABO. Fine. 
8 

9 MR. SAXON. Mr. Sanchez, let me ask you what your knowledge 

^0 was of the private air strip in Costa Rica, which we have received 
much testimony about this summer. When did you first become aware 
that a private air strip had been constructed with the assistance 

3 of and funding of the Central Intelligence Agency in Central 

14 American for purposes of aiding the private resupply operations of 

15 the Contras? 
16 

17 MR. SANCHEZ. The fact that an air strip was there was 

18 indicted in intelligence available to us. The fact that the 

19 Central Intelligence Agency assisted in this, I became aware of 

20 that when that became public. 
21 

22 MR. SAXON. Did the intelligence which you saw give any 

2'* indication of what the air strip was being used for? 



UNtlASSra 



146 



25 



ussm 



1 MR. SANCHEZ. In general, to supply the Southern Front, but I 

2 can't remember or specifically tell you, "I remember this report 
or that report." 

5 MR. SAXON. I understand that, sir. Did you ever inquire of 

6 anyone as to how that air strip got there, or who built it, who 

7 requested it be built, or did the Costa Rican government know that 

8 it was there, etcetera? 
9 

^0 MR. SANCHEZ. I never looked into the details as to who 

specifically did it or who approved it or who didn't approve it. 
We all knew that there were^ private individuals, Americans, 

^ involved in supporting and helping the Democratic Forces. 

14 

15 MR. SAXON. Did you know that there was any US government 

16 direction going to those individuals, or assistance, or efforts 

17 that would facij.itate those private activities? 
19 

19 MR. SANCHEZ. No. 

20 

1 MR. SAXON. When did you learn that these things were taking 

- place? When the matters became public? 



UNCLASSIHED 



147 



UNCIASSIHED 



1 MR. SANCHEZ. When the matters became public? 
2 

3 MR. SAXON. Did General Galvin ever indicate to you the 

4 extent of his knowledge of the air strip in Costa Rica? 
5 

6 MR. SANCHEZ. Not beyond the intelligence that I referred to 

7 before that was also available to General Galvin. 

MR. SAXON. Do you recall ever having had a specific 
discussion with him in which this was a topic? 

12 MR. SANCHEZ. No. 

13 

14 MR. SAXON. What about the.... 

15 

16 MR. SANCHEZ. It could have been a topic in the many, many 

17 meetings that ve had, but it was not a specific topic for which a 

18 meeting was called. 
19 

MR. SAXON. That wasn't the question.:- I understand your 

answer, but the question was simply whether it was a topic of any 
discussion you had with him? 

23 

t. MR. SANCHEZ. Not any American support for, no. I mean 

25 government support, that is. 

26 23 



148 



UNCLASSIFIED 



1 MR. SAXON. In terms of the use of the air facilities 

2 ^^^^^^^^for private resupply operation, did you have any 
^ knowledge that those activities were going on? 

5 MR. SANCHEZ. Again, only from the intelligence that we had 

6 that certain flights were flying out of there. 



MR. SAXON. And like the previous questions regarding the air 
strip in Costa Rica, did you have any knowledge that American 
government officials being in the military were in any way aiding 
or facilitating those resupply operations going in and out of 



MR. SANCHEZ. No. 

MR. SAXON. Did you ever discuss that topic with General 
Galvin? 

MR. SANCHEZ. No. 



MR. SAXON. Let me have this marked as Exhibit 4. I'll give 
you a chance to read it, sir, and let you know what you are 
looking at. It's a memorandum from Colonel North to Admiral 
Poindexter on January 15th of 1986, and while you can certainly 



UNCLASSinm 



149 



UNCLASSinED 



look at the entire memorandum, the only thing really of relevance 
to us i3 the final paragraph. 

All right, Mr. Sanchez, let me say for the record 
that. ..well, first let me cite the paragraph I'm looking at. In 
this memorandum, Exhibit 4, Colonel North tells Admiral 
?oindexter, and I quote: 

"You should be aware that General Galvin is cognizant of the 
activities underway 

lin support of the DRF. General Galvin is 
enthusiastic about both endeavors." 

Unquote. 1 should say for the record, that in his sworn testimony 
to the Committee, General Galvin confirms in essence what Colonel 
North says. He says that he was knowledgeable about those and 
that in a general way, he was supportive of the efforts that took 
place. Let me simply ask you whether he. General Galvin, ever 
mentioned either of those activities to you in terms of his 
knowledge of their use in aiding the Contra resupply operation? 



MR. SANCHEZ. No. Let me ask you to clarify your question 
.i bit. You're talking about US Government involvement in those 



26 



operations' 



UNCUSSIHED 



150 



"nnussm 



1 MR. SAXON. Yes, sir. Yes, sir, as opposed to simply the... 

? 

MR. SANCHEZ. That's right, that the operations are taking 

4 place out of there. 

5 

6 MR. SAXON. Yes, sir. 

7 

MR. SANCHEZ, Which is the way you can also interpret this. 
This does not, the statement here in the memorandum does not state 

-0 that it is being supported by the US Government in any way, but 

1 that the activity is taking place. General Galvin and I never 

12 discussed, to my recollection, that these operations which 

i3 intelligence indicted were taking place out of both of these 

-5 places, were supported by the US Government. 
15 

16 MR. SAXON. Did you ever have occasion to have such a 

17 discussion with-Colonel North that would have included him telling 

18 you of any US Government activities, particularly his activities, 
.3 in this regard? 

20 t 

21 MR. SANCHEZ. None that I recollect where he specifically 

22 stated that the US Government was supporting these operations. 
2"' You know, we supported anything that the private sector could do 
24 for the Democratic Forces, but not government involvement. 



HNcussm 



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iiNnussm 



1 MR. SAXON. Yes, sir, I understand. Let me ask you some 

2 questions about the Hasenf us* shoot down. When did you become 
aware that there was US Government involvement in that particular 
air activity? 

5 

6 MR. SANCHEZ. After it became public. 

7 

8 MR. SAXON. Have you read any of the press reports which 

9 suggests that you bore some responsibility for helping plan a 
10 story that there was no government connection at the time this 

took place? 
2 

MR. SANCHEZ. I have, and I vehemently denied the fact that I 
•i had any role in a cover up for those operations. What the press 

15 was told from Defense was the truth. We did not know that there 

16 was any US involvement. 
17 

18 MR. SAXON. The truth is you knew it at the time? 
19 

20 MR. SANCHEZ. Yes, I knew it at the time. 
21 

.2 MR. SAXON. It's important to get your statement on the 
23 record. If there is anything else you want to say in that regard, 
you are certainly welcome to. 



UNGUSSIHED 



152 



UNCUSSIHED 



1 MR. SANCHEZ. No. I took issue with the story from the New 

2 York Times, and so made it known to that publication. 
3 

4 MR. SAXON. Do you recall any discussions in which Elliot 

Abrams indicated that he was going to ask General Singlaub to take 
responsibility for this operation as a means of diverting 
attention from any other US Government involvement? 

8 

9 MR. SANCHEZ. No. 

•0 

MR. SAXON. Now during the time when the ©•••« Amendment, 
which went into effect in October of 1984 and lasted roughly for a 

3 year and cut off all US Government funds to the Contras, I guess 

14 it is reasonable to assume that intelligence indicated that the 

15 Contras were still in the field and were still fighting and that 

16 you had knowledge that they had not packed up and gone home. Is 

17 that a fair statement? 
18 

19 MR. SANCHEZ. Yes. 

20 

MR. SAXON. What was your understanding, sir, about where 
2 they were continuing to get their arms, their ammunition and 
23 anything that we would characterize, or that you would use to 
characterize as lethal equipment? 



UNCLASSIFIED 



153 



UNCLASSIFIED 



1 MR. SANCHEZ. At that time the intelligence that I had access 

2 to indicated that they were receiving support. I Mo not recall, 

3 and therefore, I had no knowledge at the time as to the source or 

4 how it was being paid for. 
5 

6 MR. SAXON. Do you recall ever asking any of our intelligence 

7 agencies to provide you with any detailed analysis of their 
logistics pipeline and where they were getting material and how it 
-as being provided to them? 

: MR. SANCHEZ. I don't recall ever having sent a memorandum 

12 over specifically requesting that information, but certainly this 

13 was topics of discussions at meetings. The private funding that 

14 they were getting at that time was no secret, so it was assumed 

15 that that's where they were getting it. 
16 

17 MR. SAXON.. We've had testimony from various people, which 

18 would suggest they all knew that in some rough way that Colonel 

19 North was sort of the point of contact for the private fund- 

20 raising activities, and simply making that statement is not to 

21 suggest that the people who themselves would have said that, knew 

22 the full extent of what Colonel North was doing. Is it a fair 

23 statement that you would have thought of Colonel North as the 

4.. point man or the one individual in the Government who would have 



UNCLASSra 



154 



wussm 



1 been the linlc to any private fund-raising activities on behalf of 

2 the Contras? 
3 

4 MR. SANCHEZ. My answer, if I understand your question 

5 correctly/ any private, or any official support of the Contras 

6 during that period of time, I did not know that that was taking 
place, so it would be speculation for me to speculate on who was. 

3 doing it or who wasn't doing it. The fact that Colonel North was 
9 one of the liaisons with the Democratic Resistance Leadership was 

10 no secret during the whole period of time. From the beginning, 
from when this whole thing started and when Colonel North first 

12 became involved in it. 

•:3 

x4 MR. SAXON. That answer is helpful. Let me see if I can 

15 better rephrase my question. You indicated that you were 

16 knowledgeable that he had maintained continuous liaison with the 

17 Democratic Resistance Leadership. Would you also have thought of 

18 him as being a central figure to serve in a liaison capacity to 

19 private fund-raisers: people who were involved in raising money 

20 for the Contras? 
:>1 



ii^mim 



155 



UNCLASSra 



MR. SHAPIRO. You mean hla knowledqe at the time? 



MR. SAXON. That's correct. 



5 MR. SANCHEZ. My knowledge at the time was what was on the 

g public record, and depending on when, what restriction was 

7 operative, it was no secret that this administration and the White 

T House supported the Democratic Forces, and there is public record 
on that of speeches, of briefings that were given at the White 
House, of briefings that all of us in the administration 
participated in, in briefing the public sector, shall we say, on 

"2 what the policy was in Central America. 

13 

^4 MR. SAXON. If a private donor had come to you and said, "I'd 

^5 like to get some money to the Contras to help out," and there was 

15 certainly nothing improper or Illegal about that and I don't think 

l-t at any point woyld there have been, would you have referred them 

^Q to Colonel North, or to whom would you have referred such an 

'9 individual? 

20 

21 MR. SANCHEZ. Well, nobody ever did, so I can't tell you what 

-2 it would have been to do that, because at that time I don't think 

• , I would have referred them to Colonel North during the 

24 period Depending on what period you are talking about. If It's 

25 one of those periods in which we were providing humanitarian aid, 



UNCLASSIFIED 



156 



UNCLASSIFIED 



naturally, I wonld have/ if one would have come to me, which they 
didn't, I would have referred them to the Department of St^te who 
was responsible for running that program. 



MR. SAXON. Let me show you another exhibit, and ask that 
this be marked as Deposition Exhibit 5. I'll give you a moment to 
look at it. It's not important that you, for my purposes at 
least, that you read every word in it. This is a Central 
Intelligence Agency document dated 8 July 1985, that is an 
intelligence summary of the Contra logistics pipeline. 



Mr. Sanchez, if, as it appears that you have read the 
summary, that really will suffice for the purposes of my 
questions. If you look on page 1, at the footnote, it says "This 
memorandum was requested by the Deputy Assistant Secretary for 
Inter-American Affairs, International Security Affairs, Department 
of Defense," which on 8 July 1985 would have been you. Do you 
recall asking the Agency for this document? 



MR. SANCHEZ. Yes, I requested this document, this is a 
memorandum, to give us an idea aa to what was happeni ng because of 
the problems that we were at that time havin^^^^^^^^^^^^n^i th 
their very uncomfortable position in this whole affair. So we had 
this memorandum prepared. 



UNCLASSIHED 



157 



23 



UNClASSinEO 



, MR. SAXON. So you recall receiving it? 

2 

3 MR. SANCHEZ. Yes. 

5 MR. SAXON. Do you recall what you did yourself in terms of 

6 the distribution, and I realize this is asking you to go back two 

7 years and you probably saw many documents and distributed many 

8 documents, but do you recall what you did when you received this? 

9 

10 MR. SANCHEZ. Well, it was an official memorandum, so I'm 
just looking for the distribution here. 

, MR. SAXON. It's on the last page. 

14 

15 MR. SANCHEZ. The Agency would have distributed this. This 
15 was something that was discussed at meetings: in Agency meetings 
17 that we had, and during this period of time as you notice, this 

was in Jul y of '85, during the period of the cut-off and it was a 
time^^^^^^^^^^^Hwas very, very concerned about this whole 



10 
19 
20 thing 



22 MR. SAXON. This document which you recall having requested 



and received is a very detailed document that talks about how the 
2^ Contras were being supplied during that operation, so I would 

25 guess in ^ technical sense, your earlier statement of a few 

26 33 



IINfilMSIEIFn 



158 



UNClASSra 



minutes ago that you had no knowledge of the source, would be that 
you had no direct personal knowledge of it. 



MR. SHAPIRO. Do you want him to read it before he answers 



MR. SANCHEZ. I'd better read the whole document because as I 
recall this document again did not say where or who was financing 
the deliveries. What I told you and what this document provided 
for me, and if you want to go into more detailed questions, I'll 
have to read it to refresh my memory. This is a compilation, as I 
recall it, of the intelligence that I told you before that we were 
all reading that we knew was taking place, so we asked the Agency, 
DDI, the Directorate of Intelligence, to put that together for us. 
So, it's a memorandum pulling together all the intelligence that 
we had been reading and receiving during this period of time. 

MR. SAXON. I don't want to be unfair, so take the tins JJiat 
you wis!) to read it. In the interest of time, fahi'ch is vnot our 
constraint, but one that we're having to operate under. 



^2 MR* SANCHEZ. Let me ask this question: I do not recall, and 

23 correct my memory if it's wrong, that this document tells us where 

^, or who was providing the source of the arms or ammunition. As the 

25 summary indicates, it indicates the problems that they were 

26 __ 34 



\mmm 



159 



UNCLASSIHED 



1 having: it turned to a variety of sponsors, but I don't believe 

2 that it. ...Let me go over it. As I recall, it... 
3 

4 MR. SAXON. I think maybe you should take the time to read 

5 it, because I think you'll find that it's quite specific in many 

6 respects. 

MR. SANCHEZ. To answer that question, I don't think I have 
to go any further than the second paragraph. Best estimates, 

J which is what I knew and what they state here, and I auote from 

l' the document: 
12 
_3 "Best estimates are that FDN leaders have used their 

14 extensive private business contacts to garner most of the 

15 funds from US corporations and conservative action groups, 
Ig but,' and I underline this, 'Information on identities of 
17 donors or amounts provided is unavailable." 

18 

19 That's the point that I'm trying to make with you. 



HR. SAXON. And the point I'm trying to make, if you'll read 
the very next sentence, It says, and I quote: 



UNCUSSIFIED 



160 



UNCLASSIFIED 




As you go through the document, you find specifics on it. I'm not 
trying to argue that you had precise knowledge of specific donors 
or whatever: I'm simply trying to understand if it was a little 
more specific than your earlier statement that you had no 
knowledge of... 

MR. SANCHEZ. Within my earlier statement, let me correct 
that. I said that I had knowledge of the intelligence that we 
were receiving, and I specifically stated and if I was not clear 
on that point, I want to make that very/ very clear, that what I 
did not know was the identities of the donors and the amounts 
provided. The fact that they were receiving this, yes, I was 
reading the iatelligence and I read this document, which I 
requested. 

MR. SAXON. Let me ask a c ouple of questions th is way; did 
you have any kno wledge that any ^^^^^^^^^^^^^^^^^^^^^^^^^^^l 
^^^^^^^^^^^^^^^^^^^^^^^^^^^Hcoun tries were 
false end user certificates to the Contras? 



mmm 



161 



UNCLASSIHED 



MR. SANCHEZ. I don't recall that I had any specific 
knowledge of this, but this is the common practice on how this is 
done, how to get, in a covert operation of any kind, this is 
commonly used. Do you want me to go ahead and continue to read 
this whole thing? 

MR. SAXON. I don't think it's necessary. Let me have you 
look at the next exhibit, which I'll ask be marked as Sanchez 
Exhibit 6. Mr. Sanchez, on Exhibit 6, which is a memorandum dated 
September 13th, 1984, from Colonel North to Mr. McFarlane 
regarding hearings which had just been held on US private citizen 
support to the Contras. I ask you look at page 2, in the middle 
of the page, the full paragraph which begins with the word "Note." 




Let me stop there and ask 
first if these matters ever came to your attention contemporaneous 
with their occurrence? 



2 MR. SANCHEZ. I don't recall that tWey specifically did, and 
23 I don't recall that .. .again, I would have to go back to Exhibit 5 

and read it over again to refresh my memory if this type of 
25 information was specifically mentioned in that. Generally 
26 



UNCLASSIFIED 



162 



UNCLASSIFIED 



1 speaking, I can't recall that any intelligence was available to me 

2 that specifically mentioned this. 




MR. SAXON. The next few sentences in the paragraph indicate 
that 1r. Calero was also providinc 

^^^^^^^^^^^^^ 1 n 
return for end user certificates which they were providing for the 
Contras throug^^^^^^^^^^Hl recognize that there is nothing on 
this document which would suggest you have ever seen it, and so 
there is no intent to hold you responsible for information Colonel 
North might have had, but what I'm asking is there was a fair 
amount of specific information provided to some people in the 
government, and I simply wonder if you ever knew that these kinds 
of quid pro quo arrangements were worked out with the Contras 

Ispecif ically in this 
case ,^^^^^^^^^ for their end user certificates. 

MR. SANCHEZ. No, I did not, but this, even this memorandum 
in reading it, does not indicate that the US Government in any way 
did this. 




UNCUSSIFIED 



163 



UNCLASSIFIED 



MR. SAXON. I understand that, 



MR. SANCHEZ. This would be Calero doing it 

ithe private groups involved doing it 





MR. SAXON. I understand that, and if I left the impression 
8 in my question that there was government involvement in that, OS 
^ government involvement, I did not intend to. 



MR. SANCHEZ. Let rae be clear with this. Your line of 

12 questioning on all of thisj I can assure you that there was no DOD 

13 involvement of which I was responsible specifically. 
;4 

15 MR. SAXON. All right, sir. 

16 

1'' MR. SANCHEZ. You may have evidence to the contrary. I don't 

i^ know of any. To my knowledge, there wasn't any. 

19 

20 MR. SAXON. Did you have occasion to deal regularly with 



22 

23 MR. SANCHEZ. I knew^^^^^^^^ 

^^^^^^^^^and I dealt with him during 

25 that full length of time. I know him fairly well and on 

26 39 



UNCLASSiFiEn 



164 



«Ncussm 



occasions, I have talked to him after he moved to the United 
States. 



4 MR. SAXON. When we interviewed you back in April and we 

a number abou^^^^^^^^^^^^^^^Hand in 

the interest of time, I don't think I'm going to walk through all 
of that. Let me simply ask you if you have any knowledge that 
anyone in the United States Government sought to take any action 
9 to intervene in the US Criminal Justice System on behalf of 
10 ^^^^^^^^^^^^^^^^K as an to keep him from 

1' any Contra support activities that would have been embarrassing to 
12 the United States Government? 
13 

14 MR. SANCHEZ. Not that I'm aware of. As I mentioned to you 

15 before, and certainly you have that inf ormation, POD did not 

in any way directl^_on__the_cas^^^^^^^^^^^^^^^^^J. 
knew him.^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Brhe 

18 case was strictly between the Department of Justice and the 

19 Department of State, and^^^^^^^^^Hgovernment. 



MR. SAXON. Yes, sir. 
-2 

23 MR. SANCHEZ. And as the cases showed, there were many 
2s individuals who were sympathetic to^^^^^^^^^^^^^^B' including 
25 the present President of this country. 



26 



40 



ilNCIAI^filFIFn 



165 



UNCussife 



1 MR, SAXON. Certainly, what we've been told that he is a very 

■» impressive, very professional man with a very broad world view. 

Let me ask you about a topic we discussed in April dealing wit^ an 

4 allegation which was made by an informant to the Senate 

5 Intelligence Committee, and 1*11 give you an opportunity to get 

6 your response on the record, that on or about the time of the 

7 Attorney General's press conference, which would be November 25th, 

8 1986, that you and possibly one other associate or colleague made 

9 a trip to Geneva, Switzerland. Is there any truth to that 
allegation? 

MR. SANCHEZ. Absolutely not. As I categorically denied it 

i to you the last time, I will do it again on the record. 
.4 

15 MR. SAXON. All right, sir, when was the last time that you 

16 were in Geneva, to your recollection? 
17 

18 MR. SANCHEZ. Four weeks aco. 

19 

20 MR. SAXON. All right. Touche. Prior to these matters 

1 becoming public, when was the last time you were in Geneva, to the 

22 best of your recollection? 
2' 

24 MR. SANCHEZ. To the best of my recollection, it probably 

25 goes back flights that were diverted from Orley for bad weather 



26 



UNtuissra 



166 



26 



UNCUSSIFIED 



2 and landed in Geneva> and that must have been back in the '6^s or 

2 '70s. '70s maybe: early '70s. 

3 

4 MR. SAXON. In any of your official duties here at nepartment 

5 of Defense, and the time you were Deputy Assistant Secretary, had 

6 you ever had occasion to use Swiss bank accounts? 



MR. SANCHEZ. No. 



X0 MR. SAXON. Do you know an individual by the name of David 
Duncan who is an arms merchant in Miami, Florida? 

13 MR. SANCHEZ. I had the occasion to be introduced to Mr. 

14 Duncan at one time, but I know nothing about him, other than what 

15 we all know of what he was involved in, what has become pretty 

16 much public knowledge. 

17 

19 MR. SAXON. And what did he tell you that he was involved in, 

19 when you met hin? 

20 

-•1 MR. SANCHEZ. He was a. ...he wanted to become a source of 

^2 military equipment for the governments in Latin America. He sold 

23 military equipment. He was an arms merchant, and I told him I 

couldn't help him, that we dealt strictly with official security 

25 assistance to these governments. 



42 



UNCLASSIFIED 



167 



UNCUSSIFIED 



MR. SAXON. Would I be correct in saying that the occasion 
which you met him would have been in April or May of 1986? Does 
that sound about right? 

MR. SANCHEZ. I'd have to check, but it, yes, it could be 
about that time. I don't recall the exact date. I only met him 
once. 

MR. SAXON. Let me have you look at this document that I'll 
ask be marked as Exhibit 7, a memorandum from David Laux to 
Colonel North, dated August 29th, 1986, and it's a memorandum in 
which he discusses his contact with David Duncan and he references 
A meeting you would have had with Mr. Duncan, the last paragraph 
on the first page. 

MR. SANCHEZ. Let me read it. 

(Pause. ) 

MR. SAXON. All right, sir, Mr. Sanchez, you are looking at, 
as I indicated, a memorandum froB Mr. Laux to Colonel North, dated 
August 29, 1986, and he mentions on page 1 of this exhibit, that 
David Duncan was an arms merchant from Nianl, Florida, who had 
done some arms business in Switzerland, and that Mr. Duncan 
indicated to the author of the memorandum that he had talked in 



43 



UNCLASSIFIED 



168 



UNCLASSIFIED 



1 April or May of 1986 to you. Does that help in any way to refresh 

2 your recollection as to the dates? 
3 

4 MR. SANCHEZ. It would certainly have to be before August 2<*, 

5 1986, but again I don't don't recall the dates specifically. 

MR. SAXON. Let me ask that you look at the bottom of page 2 

3 of the memorandum, the last final of the paragraph on that page, 
5 it indicates, and I quote: 

10 

- "Duncan said he also had some information on an attempt to 

12 purchase TOW missiles by Iran. He said Iran had 76 million 

dollars in a Belgian bank to be used in the purchase of four 

-4 thousand TOW missiles. Duncan said they really only cost 

15 seven-k each, that the going price was twelve-k each, but 

16 they would probably be sold to Iran at nineteen-k each, and 

17 that the difference, totaling twenty-eight million would be 

18 pocketed by the intermediaries." Unquote. 
19 

23 When you met with Mr. Duncan yourself, whenever it was, did he 

21 mention this particular item to you? 

22 

23 MR. SANCHEZ. I do not recall that Mr. Duncan mentioned this 

4.. particular item to me. I have not seen this memorandum before, 

25 but I had talked to Dave Laux about this, and when he called me, I 

26 44 



tlNClASSIFIED 



mentioned to him that I thought Duncan was somebody that we should 
not get involved with, that he had impressed me as a bag of hot 
air. 

MR. SAXON. And if I understand your testimony, Mr. Duncan 
simply wanted to meet you, I take it, because of your position and 
wanted to try to develop a relationship with the US Government so 
that he could be an arms broker or intermediary on behalf of 
countries in Central America? 

MR. SANCHEZ. Probably so, to see if I could put him in 
contact with anybody who was buying arms at the time. 

MR. SAXON. And as best you recall, that was the extent of 
your conversation. Right? 

MR. SANCHEZ. To the best of my recollection, I didn't give 
him much reason for desiring to see me again, or much 
encouragement. 

MR. SAXON. Let me have you look at the next exhibit, which 
I'll ask be marked as Exhibit 8, which on its face doesn't bear 
any notation, but it is a further document of Mr. Laux's, dated 2 
September 1986, in which he talks about his meeting with a 
gentleman named "Patrice* in Geneva in July, and he also talks 

45 



170 



UNCUSSIFIED 



1 about Mr. Duncan making reference to you. I'll give you a moment 

2 to read this. This is a document we received from the National 
^ Security Council. 



(Pause while reading the exhibit.) 

MR. SAXON. Mr. Sanchez, I'm going to walk through a few of 
ihe statements in this document and ask you about your knowledge 
of it. First, let me ask you in a general sense what you know 
about the arms shipment aboard the pia Vsste, which General 
Noriega seized in Panama. 

MR. SANCHEZ. I became aware of that when the shipment was 
seized, and naturally at that time we were interested, as a 
community in Washington. Washington was interested in where these 
arms were going: who they were intended for: were they really 
intended for P»ru: were they being diverted any place else, and 
where the arma were going. So, yes, we became very interested 
when the incident broke down there. We had no prior knowledge, as 
I recall, that the shipment was underway. 

MR, SAXON. Did you have knowledg e at the time thai 

Imay have been involved in 



UNCUSSIFIFfl 



171 



UNCLASSIFIED 



MR. SANCHEZ. Prior. ..No, prior knowle 




-0 MS. SAX ON. It also states that the suspicion of "Patrice* 
that^^^^^^^^^^^^^^had ordered the arms on behalf someone 
else. Was DOD able to ascertain who placed this order and for 
whom they were intended? 

.4 

^5 MR. SANCHEZ. I do not recall that even afterwards we were 
16 able to determine that. I c ertainl y don't recall a ny information 
1'^ that these arms were orderec 




19 MR. SAXON. Do the gentleman referenced in here as beinq 
2Z named 'Patrice'/ whose full name appears on page one of this 



UNCLASSIFIED 



172 



uNcuiSsra 



1 MR. SANCHEZ. I don't remember Patricei no. 
2 

3 MR. SAXON. Are you familiar with Star Productions in 
Geneva? 

^ MR. SANCHEZ. I may have heard the name/ but no, I'm not 
■^ familiar with it. 
8 

9 MR. SAXON. At the top of what would be page three, bearing 
^0 the committee's document number "N 32087" Mr. Laux discusses his 

conversation with David Duncan on 29 August 1986, in which he says 
that Mr. Duncan stated, and I quote, "First discussed the 
•5 possibility of shipment with Nester Sanchez in February of 1986. 



14 Sanchez had no objections. Duncan has continued to brief 

15 Sanchez." Unquote. First question. Do you recall Mr. Duncan 

16 ever discussing this shipment with you prior to it having actually 
1*7 gone forward and been sized by General Noriega? 

18 

19 f.R. SANCHEZ. No. And again, how can Duncan I'm puzzled 

^ here as to how, except recognizing the source of the statement, 
but since I only saw Duncan one time by his own admission, how he 

^2 could continue to brief me on that. 



wmm 



173 



iinimim 



MR. SAXON. Well, that could be one by phone. I understand 
you said you only saw him once. 

MR. SANCHEZ. I didn't talk to him after that. 

MR. SAXON. Okay/ but the question of your having any advance 
knowledge in February 1986, that there would be such a shipment 
and you approved.... 



MR. SANCHEZ. No. 

MR. SAXON. Is that an incorrect statement? 

MR. SANCHEZ. And it doesn't say that I approved. He himself 
says I have no objection. What does that mean? I don't recall 
that he even mentioned this subject. I do not recall anything 
being stated at that time that th ere was a shipment of arms 
destined, for what? 




MR. SAXON. And in terms of continuing to be briefed by 
Duncan, while you have testified that you only met him once, did 
you have other conversations with him, perhaps by telephone? 



UNCLASSIFIED 



174 



ONCUSSIFIED 



1 MR. SANCHEZ. No. 
2 

3 MR. SAXON. So to the best of your recollection, you only 
talked with him once, and that was the time when you met him? 

o MR, SANCHEZ. That's right. I did notice in here, on the 

7 first page, it mentions Dan Cummings. 
8 

9 MR. SAXON. Yes, sir. 

10 

MR. SANCHEZ. Cummings worked for me in my office and retired 

2 from. . . 



4 MR. SAXON. As a consultant? 

15 

16 MR. SANCHEZ. No, he was not a consultant, assianed to me as 

17 an Army Colonel 

19 

20 MR. SAXON. All right. Mr. Sabo will have some questions for 

21 ' you about Mr. Cummings, but let me finish wit h this document . 
2 

23 





UNCLASSIHED 



176 



UNCLASSra 



MR. SANCHEZ. Not that I can recall, no. 



MR. SAXON. And finally, if you would look at the last page 
of this exhibit, there is reference to Felix Rodriguez. It 
•tatcs, and I quote: "Max Gomez," paren (Felix), "was placed in 
El Salvador by Nestor Sanchez and Dan Gregg," meaning, I assume 
Don Gregg, "Vice President's office. Max brags that he has daily 
-ontact with the office of the Vice President." Unquote. Now you 
nave already covered Mr. Rodriguez, but let me simply ask you 
whether it's a fair statement to say that, forgetting about Contra 
activities and focusing just on what you have testified you 
understood to be Felix Rodriguez's activities to assist the El 
Salvadoran government, is it fair for anyone to say that you had a 
role in placing him in El Salvador? 



MR. SANCHEZ. Well, I wouldn't characterize it as a role, but 
in the fact that I introduced him, yes: the fact that Mr. Duncan, 
or whoever wrote the memo here, give s me c redit for placing him 
there, I can't take credit for thatj 

land to mention him then to, as you are well awarei 
to General Gorman and to Steele. 



-3 MR. SABO. Mr. Sanchez, we had an interview in June of this 
2«« year with Dan Cummings. Among other things, we discussed the Pia 



UNCLASSIFIED 



176 



«l\'* '.-J 



Veste. Mr. Cummings told us he retired December 31, '81, as a 
Colonel in the Army, and he had been.... 

MR, SANCHEZ. '81? 

MR. SABO. Yes. 

MR. SANCHEZ. December of '81. Wait a minute. No, I don't 
recall when he retired. I thought it was later than that. 



MR. SABO. What he said was that he had retired then and that 

-2 his assignment upon retirement had been in Inter-American Affairs. 

13 He then told us that he worked as a consultant for one year after 

14 that retirement for you. Do you recall that relationship? 
15 

16 MR. SANCHEZ. Yes, he could have. I don't recall, but this 

17 is easy to check. You know, it has to be an official — if he 

18 was he stayed in contact with us, naturally, with us in the 

19 office and with me. That he had an official consultant contract, 
T I don't recall, but that can be easily checked. 

1 MR. SABO. Is it your recollection that you continued contact 

23 with Mr. Cummings following his retirement? 



26 



UNCUSSIHED 



177 



UNCLASSIFIED 



1 MR. SANCHEZ. Off and on; not on a regula.r basis. 
2 

MR. SABO. Would that be until the present? 

5 MR. SANCHEZ. I haven't talked to Dan in, over a year. 
6 

1 MR. SABO. Do you know of a company called North American 

8 Auto Parts International, NAAPCO? 
9 

"3 MR. SANCHEZ. I've heard of the company because I believe 

Dan, correct me if I'm wrong here, is a representative of NAAPCO. 
Is that right? 

-4 MR. SABO. That's correct. Also a company called Star of the 

15 Seas? 

16 

1" MR. SANCHEZ. That, I don't recall having heard. 

1? MR. SABO. And do you know of a company called Cummings 

C Facilitators International, Inc., which I believe, Mr. Cummings 

21 told us is a New Jersey Company. 
22 

23 MR. SANCHEZ. I don't remember the name of it, but I do know 

i that Mr. Cummings incorporated himself. 
25 



UNCLASSIFIED 



178 



23 



ifilkSSl© 



1 MR. SABO. Do you know what the business activities of NAAPCO 

2 would be? This is the North American Auto Parts, International. 
3 

^ MR. SANCHEZ. Generally speaking, what I recall about it is, 
they are providers of a variety of equipment. In fact, I vaguely 

^ recollect that... but we could go back and check this; this is a 

^ matter of record. .. that some rebuilt trucks for one of the 

^ countries in Central America, were bought from NAAPCO. 



MR. SABO. Do you recall if that would be El Salvador? 



^■^ MR. SANCHEZ. It had to b« either El Salvador or Honduras. 

This happened later on though, this was '84 or '85 — Salvador, 
'^ probably. 



16 MR. SABO. Do you know if NAAPCO, during the period from igsi 

1^ until the present, has been engaged in the sale of arms or the 

^^ facilitation of the sale of arms in Central America? 

19 

20 MR. SANCHEZ. I don't recall any specifics that they have. I 

-1 do recall the trucks that they had rebuilt. I think these were 

-2 rebuilt trucks that were sold through NAAPCO. 



UNGIASSIFIED 



179 



UNCUSSIFIED 



1 MR. SABO. Do you recall » were these rebuilt American 

2 trucks? 
3 

4 MR. SANCHEZ. Military equipment .. .yes , military equipment. 
5 

MR. SABO. So these were rebuilt US military trucks? 

MR. SANCHEZ. That's all public you know, and if you want 

9 any details on that, just go to DSAA, and you can get the full 

10 details of it. 

r 

12 MR. SABO. Did Mr. Cummings have occasion to contact you 

3 during this period, '81 to your retirement, concerning the 
-4 possible sale of arms into Central America? 

15 

16 MR. SANCHEZ. He didn't, any time officially approach me on 

17 such a thing, such a subject. I know that he and his interest in 

18 Duncan was probably Lo.... after all, he was in the business of 

19 providing military equipment too, and I wouldn't have discounted 
'Z that arms were part of it. 

-2 MR. SABO. Let me show you a document, of which I don't have 

23 extra copies. It's a letter to you, and it will be marked as 

i. Exhibit Number 9, I believe. 
25 



UNCUSSinED 



180 



10 



25 



UNCLASSIFIED 



1 MR. SANCHEZ. Yes, I remember this conversation with 

2 Cummings/ and I told him to put it writing, because as you will 
^ note there, this is already April of '86. We were already 

discussing the renewed military assistance with the Congress. 

5 There were indicatWthat we were going to be able to get that 

^ assistance, and I don't recall, I probably passed this on to the 

^ CIA. We wouldn't be interested in it, certain information that if 

8 this kind of equipment was available, somebody would be interested 

9 in it. 



MR. SABO. Was this a 



MR. SANCHEZ. Let me make this clear. Defense was not 
^ interested in this equipment; in purchasing this equipment, at 
5 least I wasn't. 



l"" MR. SABO. - Do you recall if you did pass it on to another 

^- agency? 
15 

2C MR. SANCHEZ. 1 don't recall, but 1 would have no reason why 

21 I shouldn't have passed it on to, probably CIA. 
22 

23 MR. SABO. Was this the kind of request Mr. Cummings made of 
you on other occasions? 



5C 



mtssm 



181 



UNCUkSSIFIED 



, MR, SANCHEZ. No... No, this was not a request from Colonel 
2 Cummings. When he mentioned this to me, that he had access to 

this bulk equipment, I told him we had no direct interest in it in 
_^ DOD but to send it on, and I would pass it on; but he did not 

5 request me to do that. 



7 MR. SABO. Cummings told us that what happened here is that 

3 just before this letter, Duncan called him and said he had access 

9 to certain number of weapons and he asked Cummings to find out if 

10 someone in the US Government would be interested in buying them 

for the US Government or otherwise, and Cummings said that he then 
spoke to you about it. You- asked him to put it in writing and 
that's what was put in writing. 

14 

15 

16 

17 

18 

^9 MR. SABO. No, no, it's quite consistent, but just so you 

20 understand what was going on. Apparently nothing came. . .Cummings 

21 told us that nothing came of this. 



MR. SANCHEZ. That's what 1 recall, but I don't recall that 
he... He must know. I mean, I'm not disputing that, as to who his 
source was. 



inmim 



182 



UNCUSSIFIED 



1 MR. SANCHEZ. No. 

2 

MR. SABO. He told US that these items in fact were put on 
-• the ship which became the Pia Veste, and continued, some of these 
5 itemS/ that was intended for Peru and ultimately Duncan claimed 
^ that General Noriega was going to buy those items. Of course, we 
1 know that this ship was ultimately seized in Panama. But my 
8 questions were whether or not subsequent to that letter, Mr. 
Cummings informed you of any of those facts, or anything else 
concerning those weapons or their subsequent disposition? 



-2 MR, SANCHEZ. I do not recall talking to Mr. Cummings, or 

'3 Colonel Cummings about these weapons being connected with the Pia 

-4 Veste in any way. And certainly not before the whole incident of 

15 the Pia Veste took place, but there were a lot of statements being 

16 made, as you are well aware just from the documents that you have 

17 shown me today, by the Duncans of this world in their own 

18 interests, but I think that the final...! don't know if you have 

19 it or not, roundup of what happened is, to my knowledge, the best 
intelligence that we have as to what happened on that thing. I 

haven't seen anything else. 

23 MR. SABO. By any chance did you refer Mr. Cummings at any 

'< time to Barbara Studley? 



25 



UNCLASSIFIED 



183 



CNCUSSIflfD 



1 MR. SANCHEZ. No. 

2 

3 MR. SABO. As a person who might be interested. 

4 

MR. SANCHEZ. No, because I don't know Barbara Studley. I 

know her name, but 1 don't know her personally. 

3 MR. SAXON. Do you know her firm, Geomilitech? 

9 

10 MR. SANCHEZ. Well, I've heard of it, but I don't know it. 

^ you know, I've never had any occasion to visit them or anything 

12 like that. ,-.. 
3 

MR. SAXON. Did you have occasion to deal with General 

i5 Schweitzer after he joined Geomilitech? 

16 

17 MR. SANCHEZ. General Schweitzer would come by in the 

1? Pentagon and I've known General Schweitzer for some time and he 

19 would stop in and he would tell me that he was now a consultant 

20 for that firm, but that's about the extent of it. 

n 

MR. SAXON. Did he ever tell you that they had any role in 
i3 getting arms to the Contras? 



UNCUSSIRED 



184 



wm^^^ 



1 MR, SANCHEZ. No. No, he did not tell me of any role that 

2 they were playing in that, that I can recall specifically. That 

3 they were interested in helping them, yes, that was no secret. 



MR. SABO. Did he inform yo u of his contacts with Colonel 
North in connection with contactsl 




MR. SANCHEZ. I don't recall ever having discussed that with 
General Schweitzer, no. 



.4 
15 

16 

:7 

-S 
19 
20 
21 

:2 

23 
2-. 

25 

26 



MR. SABO. Just SO I can finish up this letter, and Exhibit 
Number 9. Cummings told us that subsequent to providing a letter 
to you, he did provide it at the suggestion of someone in the 
Government to Mrs. Studley, and I just want to make sure that I 
understand your testimony is that you were not the person who 
recommended Cummings, or provide the list, or information about 
these weapons -to Mrs. Studley or to her company? 

MR. SANCHEZ. No, I don't recall specifically recommending to 
Cummings that he do that. It is possible that we could have said, 
"Look for other people in town that are interested in these, in 
buying these weapons that are helping the Democratic Resistance 
Forces, but I do not recall specifically that I sent him over to 



Studley, because I don't know. 



UNCLASSIFIED 



185 



ONWSIFIED 



I MR. SABO. Okay, and my last question: Did you have any 

information or did you know that Mr. Cuirmings was involved in any 
way in procuring weapons for the ant i-Sandinista forces? 



5 MR. SANCHEZ. No. I do not recall that we ever discussed 

6 procurement for the Sandinista forces. 
7 
8 
9 

10 

12 

3 

MR. SAXON. Mr. Sanchez, let me show you one more document 

J and ask that this be marked as Exhibit 10. This is a CIA cable, 
16 and I really don't know that yo u need to tak e the time to r ead it 
l"" w e'l l see if 
IS 
1? 
20 

:i 





25 for the Contras" 
25 



s providing false end-user certificates 

UNCLASSIFIED 



186 



UNCLASSiilED 



1 MR. SANCHEZ. I do n't specifically recall that I Icnew th at 

2 this was happeninc 

3 




MR. SAXON. It doesn't shock your conscience" 



MR. SANCHEZ. No, no. 



MR. SAXON. Now on a different subject, let me ask that you 
take a look at this exhibit, and let this be marked as Number 11. 
You may recall that we showed you this document in a previous 
interview with you. It bears the heading of National Security 
Council. It comes from the documents provided by Mr. Richard 
Miller of IBC It appears to be a sign-up sheet at some kind of 
meeting, and underneath the signature of Colonel North is what 
appears to be your signature, and then under Representation, it 
says "DOD" and a phone number. Let me simply ask you if you 
recall ever having been at a meeting with Colonel North and Mr. 
Gomez and Mr. Miller of IBC, among others, at which any private 
fund raising for the Contras was discussed? 



UNCLASSIREO 



187 



10 



26 



UNCUSSIFIED 



1 MR. SANCHEZ. As I told you before, no, I do not. And I do 

2 not recall this kind of a meeting with these players ever taking 

3 place to discuss that subject. These players would not have been 
involved in that type of discussion. Since you did raise this 
with me before and since I did mention to you that, yes, that 

° certainly appears to be my writing and it is certainly my 

^ telephone number. What this appears to be is probably some 

8 meeting that took place on the subject of public diplomacy. The 

^ reason I mention that is because of the presence there, of Otto 

Reich, who as you recall was the Representative for Public 
' Diplomacy at one time, and we don't have a date there: and Walt 

Raymond, who was also involved in Public Diplomacy, and that's how 

3 Frank Gomez and Miller and Jeff Bell would have been at some 

4 meeting like that, and not on the subject that you raised. 



lo MR. SAXON. All right, sir. Let me ask you about any 

'' discussion which you might have had with your immediate superior 
during the time you, at least your latter years here at DOD, and 

^9 that's Mr. Arnitage. Did Mr. Armitage ever make you aware, prior 

20 to these matters becoming public, about the Iran arms initiative? 
21 

22 MR. SANCHEZ. No. 

23 

• MR. SAXON. Did he ever tell you about any discussions that 

25 he had had, perhaps in December of 1985, with representatives of 



UNCIASSIHED 



188 



UNCLASSIHED 



-T0\A/5 

1 the Israeli government on the subject of replenishment of TffFBS and 

2 HAWKS, which in 1985 might have gone to the Iranians, directly 

3 from Israel. 
4 

5 MR. SANCHEZ. None that I can recall. Do you have any more 
detail? Maybe I can. ..Just a question, I mean. 

MR. SAXON. That's the general question. I could be more 
9 specific and say, did he ever tell you that on December 2nd, he 
w i t ^^^^^^^^^^^^^^^^^^|o f the Israeljf'^government , 
to^^^^^^^^^Haccount, to discuss the subjects that I just 
12 referenced? 
■3 

-; MR. SANCHEZ. No, I don't recall that Mr. Armitage ever 
•t 5 mentioned that to me. 
16 

i7 MR. SABO.. Did he discuss with you the revision by Israel for 
18 arms or money for arms in any connection with Central America? 
19 
20 MR. SANCHEZ. No. 

1 

- MR. SAXON. Did you ever have any discussions with Mr. 

23 Armitage, or for that matter with General Collin or Powell, Noel 
4. Cook, Glenn Rudd or Doctor Hank Gaffney, during the time period of 

25 late November/early December '85 about any arms the United States 



26 



64 



IIMCli^lElL 



189 



UNCIASSIHED 



1 would have either been involved in directly sending to Iran or 

3 sending through Israel? 

4 MR. SANCHEZ. No. 
5 

6 MR. SAXON. The reason I ask is we've had public testimony 

7 and everyone is consistent that at that time Mr. Rudd and Doctor 

8 Gaffney prepared some talking points or talking papers about HAWKS 

9 and TOWS, which went up the chain to Mr. Armitage. 
10 

MR. SANCHEZ. Well, see, again since at that time we did not 
know of any connection with Nicaragua or Central America, my 
region. Today I can see no reason why something like that would 

-4 have been discussed with me. 

15 

16 MR. SAXON. And you are saying that it was not? 

17 

18 MR. SANCHEZ. It was not. 

19 

20 MR. SAXON. Let me ask you about the efforts last spring for 

21 the President to ask the Congress to invoke emergency provisions 

22 under Section 506(a) of the Foreign Assistance Act, for Honduras 

23 for up to twenty million dollars in emergency military assistance. 
2. What do you recall about the events which triggered that request? 



UNCUSSinED 



190 



UNdASHD 



X MR. SANCHEZ. That was for Honduras. The Sandinista activity 

2 on the border, they had/ as you recall... Let me go back and get 

3 the dates, but it was prior to that that there had been Sandinista 

4 insurgence in to Honduras. The Hondurans were very concerned that 

5 they had no air defense, for example, to protect themselves. The 

6 only thing they had was their air and their aircraft were falling 
apart, so this was high concern on the part of the Hondurans as to 
what could be how they could protect themselves if the 

9 insurgents continued or if they expanded: if they came more than 

10 just a border type of insurgence. That was the general atmosphere 

1 down there. 
12 
•3 MR. SAXON. Mr. Sanchez, there is a fair amount of 

4 documentary evidence which would suggest that the, perhaps like 

15 Mr. Kennedy's missile gap, the threat to the Hondurans was over- 

16 stated at the time and we've had public testimony to that effect. 

17 At the time, did you have any knowledge that this was perhaps 

18 being overstated as a reason to get the Hondurans some emergency 

19 military assistance which they didn't realize at the time that 

20 they needed? 

:i 

^2 MR. SANCHEZ. No, I can't say that I had any knowledge that 

23 it was being overstated. I think that certainly the memorandums 

i that we presented from Defense, and I believe the ones that I saw 



UNCUSSIFIED 



191 



UNCUSSIFIED 



a 

9 

10 
11 

12 

4 
15 
16 
17 

18 
19 
20 



that had interagency clearance on it, clearly stated the facts as 
we saw them at that time. 

MR. SAXON. On a different subject, are you aware of any 
direct linkage between efforts by the Pentagon to provide the 

.n order to replace the deteriorating 
in exchange for any efforts on their part to help the Contras? 

MR. SANCHEZ. No, because ... and the reason I say no, is that 

and many people have interpreted it that way is because all 

of this starte d way before that. The fact that we have been 
d i s c u s s i n g^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H p r e d a t e s 
the later development. This is something that is almost 
historical in Central Americ 




provided Director Casey when he returned from a visit 
r.x JiUujt» a ig ar 



there, along with M 



ind others in October of 1986 was 



that perhaps we should accelerate those efforts that were already 



\\m t^mm 



192 



UNCIASSIHED 



under way in th^ interest of gett inij^^^^^^^^^^^^to agree to our 
Central American proposal was we were putting it forward on that 
trip. Mr. Abratns was also on the trip. Is that a fair statementi 
that while these things had a history to them, they were efforts 
to accelerate our response? 

MR. SANCHEZ. Well, o ur efforts to accellerate our response, 
and I recall briefings fron^^^^^^^Hlthinlc after his trip 
there, that^^^^^^^^^^^^^^^^^^^^^^^^^^B^were becoming 
very, very concerned about happen ing^^^^^^^^^^^^^^^| 

The insurgents into^^^^^^^Bby Sandinista troops, and therefore, 
their two primary concerns »t that time , be cause of what was 
happening on the ground, was theirl 




MR. SAXON. Along the same subject, a more generic question. 
Are you aware 5f any efforts in your tenure at the Pentagon to 
link security assistance generally to efforts by the recipient 
countries to aid the Contras, particularly during the time when US 
Government funds were cut off for such purposes? 

MR. SANCHEZ. I don't recall that that was ever discussed 
specifically or in generic terms. The fact remains that with the 
build up in Nicaragua that was taking place, we didn't have to go 
through that machination to reach the conclusion that the other 

6i 



UNCLASSIFIED 



193 



UNCLASSIFIED 



2 countries, friendly countries, the democratic countries in Central 
2 America needed help. That's what brought about the assistance to 
Honduras and Salvador. With both countries, especially Salvador, 

4 as you are well aware, having their own insurgency problem, they 

5 need support from Nicaragua. 
6 

7 
8 
9 
10 



MR. SAXON. Two final questions from me, sir. One, when did 
you first learn that any of the monies derived from the arms sales 
to Iran had been or were intended to be delivered to the Contras? 

MR. SANCHEZ. When it was publicly announced in November. 



4 
15 
16 
17 
18 
19 
20 
21 
22 
-3 



MR. SAXON. And the final question for the record. Is there 
any connection between the timing of your retirement and any of 
the matters that our committees are looking at? 

MR. SANCHEZ. A lot of people have speculated on it, and.... 

MR. SAXON. That's the reason I asked, to give you the chance 
to set the record straight. 

MR. SANCHEZ. And continue to speculate on it, and I can tell 

you that it is sheer speculation on other people's part. I had 

retired, as you know, already once in 1981, and I was planning to 

retire a year to two years after I came to the Defeivpe. iiftB4rJL!''ent , 

69 



194 




1 so the fact that I retired at this time had nothing to do with, 



and I think as those who have speculated on my role, I think the 
record clearly indicates that there is no basis for me having 
decided to retire at this time. 

MR. SAXON. And what are you doing now? 

MR. SANCHEZ. I'm retired. I'm still consulting. I'm still 
a consultant for the Defense, and doing some consulting for other 
firms. 



MR. SAXON. That's all I've got. We're about out of time. 
-3 Let me see if my colleagues have anything further. 
14 

15 MR. SABO. I do. Let's see if I can ask a few things very 
1^ quickly. Mr. Sanchez, who are you consulting for at Defense since 
1^ your retirement? 



19 



MR. SANCHEZ. For ISA. 



MR. SABO. So, that's under Mr. Armitage? 



-3 MR. SANCHEZ. For Mr. Armitage and for Doctor Ikle and for 
the Secretary. You don't consult for one, I mean. 



UNCLASSIHED 



195 



UNtUSSlFlED 



1 MR. SABO. I understand. So it would be DOD? 
2 

MR. SANCHEZ. Yes. 

3 MR. SABO. Are you consulting currently for any other 

6 government agency? 

7 

8 MR. SANCHEZ. No. You know, consulting, when you say 

9 "consulting," I am not getting paid by any other government agency 
10 for consulting work. 

MR. SABO. I understand. There has been a matter which has 
intrigued some of the committees and some of the people on the 
Hill. At the time of your retirement. Central America, Latin 
America, particularly Central America was becoming a high priority 
issue with the Administration and the Hill and various agencies. 
It would certainly become a matter of considerable attention and 
focus, CIA and Interior Defense: you had a long and prominent 
career in that area and by qualifications, knew more than many; 
some would say knew a lot more than those who succeeded you. Why 
would you have left CIA at precisely that time? 



UNCLASSIFIED 



196 



ONCUSSIFiEy 



1 MR. SHAPIRO. Do you mean CIA or defense? 

2 

3 MR. SABO. CIA, 1981. 

5 MR. SANCHEZ. No particular reason other than... There has 

6 been again a lot of speculation on the subject, and I don't even 

7 care to comment on the speculation because there would be no end 

8 to the comments. It is no secret that I have some very definite 

9 views on the conduct of covert operations; on how I thought 
10 operations should be conducted and the pre-requisites for 

V conducting a covert operation. This, I have stated and you can 
read a New York Times article, an interview that I gave the New 

.3 York Times before on what I considered essential for covert 

14 operations: and I'm saying this, not that I saw this thing coming 

15 down or going down that line as it has taken place. But this has 

16 been, again used, which is on the record; I have stated it 

17 publicly that this was a difference that I had with the Director 

18 and therefore that this is why, well some people even say he fired 

19 me. That is not correct. In fact, I think the DDO at that time, 

20 he can be asked, but he was rather strong in his request that I 

21 stay; that I continue: that I not leave CIA at that time. 

22 Defense, as you recall, when I came over here, this was in August 

23 of 1981, had still not found anybody for this position and they 
felt that I was qualified for it, so they offered me the job and 

25 it was a chance to do something more than what I had been doing in 

26 72 



imCli^lED 



197 



\iHim\m 



i CIA, 30 I took it with the idea at that time that it would be foi 
^ a year or two. 

7 

MR. SABO. So you left in '81 because you had a basic 
difference with the Director? 

6 

7 

8 

9 
10 
1' 

2 

3 
14 
15 
16 
17 
18 
19 



MR. SANCHEZ. No, no, no, please, please. 



MR. SABO. No basic differences? 



MR. SANCHEZ. No basic differences.... 



MR. SABO. Was there strong opinion? 



MR. SHAPIRO. Please, please. Mr. Sanchez, had you finished 
your answer? 



MR. SANCHEZ. Well, no, what you. ..I was talking about the 
speculation that has taken place and this is part of the 
20 speculation that I had strong differences with Bill Casey and all 
-1 the rest of them. The way it turns out/ certainly some of my 

22 basic philosophy on how to run covert operations did not agree 

23 with what we saw unroll six years later, but that doesn't mean 
that Bill Casey and I had any serious disagreements about it at 

25 



UNCLASSIFIED 



198 



UNCUSSiFlEO 



1 that time/ although we certainly talked about it. The basic 

2 points.... 

4 MR. SABO. So, then... 
5 

* MR. SANCHEZ. Let me finish. The basic points that I made 
^ then: that I have made publicly, is that a covert operation in my 

way of looking at it, should never be engaged in as a substitute 
' for stated policy: in support of policy, yes. A very basic point. 
Secondly, that when one gets involved in a covert operation in 
this country of ours, especially in this day, that there had 
better be some kind of understanding with the Congress: not a vote 
or anything: but an understanding with the Congress that this is 
^^ what is intended because you do not turn a spigot like that on and 
^' off the way we have been doing it in the past six years, and 
1* expect it to have any kind of impact. So, therefore, there has to 
1^ be an understanxJing . But this follows with what T have stated 

18 publicly many many times: in fact, in just about every public 

19 speech that I have made, and I've made many of them during my six 
"0 years in Defense, that what is required is long term policy and a 

■^ bi-partisan support for our foreign policy to make our foreign 

22 policy effective. I believe that, and I have been called a 

23 Pollyanna because I insist this is what, I feel at least and I 
i*» continue to feel, that this is what is essential if we are going 
25 to have an effective foreign policy, that we have to have in its 

74 



26 



iiN!:iA.<:.<;inpn 



199 



UNCUSSIFIED 



1 broad terms, I'm not talking about its specifics, but in its broad 

2 terms, we have to have a clearly enunciated policy for an area, 

3 long term: and we have to have broad bi-partisan support for that 

4 policy regardless of who is in the White House. 
5 

MR. SABO. Now based on your position, is that the reason you 
came from CIA to this position here in 1981? 
8 

9 MR. SANCHEZ. No, because if it would have been an issue, it 

10 would have been an issue with the Administration, not only with 

I' CIA. So if I had strong objections to working with this 

12 Administration because of that and the CIA, it would have applied 

equally as well or even more so in a position that I came to in 

.4 Defense, so therefore, that's why I go back to this speculation on 

15 why I retired. I frankly am a little baffled myself as to why so 

16 many people are so interested in it. 
17 

18 MR. SABO. I did want to give you a chance to comment. 

19 Because I know your time is short, I'd like to ask you a couole of 

20 very specific questions. Do you have any knowledge of a David 
^1 Walker? He's a citizen of the United Kingdom. 

23 MR. SANCHEZ. What is he involved in? What's he engaged in? 



UNCLASSIFIED 



75 



200 



IINMSm 



MR. SABO. He has been engaged in a covert operation in 
Nicaragua, 1985. .,'84, '5 and '6, perhaps. 

MR. SANCHEZ. No, the only Walker that I know of who was 
engaged in operations in Nicaragua is strictly historical. 

MR. SABO. Right. I move to another subject. I'm interested 
in, in particular, in the role of DOD in activities in Central 

werica. I distinguish between activities and support of the 
Contras, and activities directed against the Sandinista government 
apartment from those activities which may or may not be in support 
of the Contras. Very specifically, 1 want to unde rstand what was 
the role ol 




MR. SANCHEZ. I can only answer from my role, from my office 



as to what. . . . 



MR. SABO. To you knowledge. 



UNCLASSIFIED 



201 



UNCLASSIFIED 




do not recall anv specific 
support that we gave them in this operation, but that doesn't mean 
that we didn't. 



MR. SABO. So, am I correct that you were not involved in 
that operation, either the planning of it, or.... 



15 
16 
17 
18 
19 
20 

:i 

22 

23 

25 
26 



MR, SANCHEZ, No . ^^^^^^^^^^^^^^^^^^^^^^^^ 

IDOD was 
not specifically, directly, as far as I know, involved in the 

operation. 

MR, SABO. How abouti 

MR. SANCHEZ. Never heard of it. 



MR. SABO. We have often heard involved a list of munitions 
provided by the CIA to the DOD just prior to a particular cut-off 
as a result of the^ jOja P t w amendment. It was a list of arms by the 
DOD which DOD was to provide the CIA for the anti-Sandinista 



UNCUSSiFlEO 



202 



UNCLASSIHED 



1 forces and we are continuing to investigate this, but a certain 

2 quantity of arms was provided, 
3 

^ MR. SAXON. It was a tasking to all the service 




4 
15 
16 

1 5 
19 
20 
21 
22 
23 

25 
26 



MB. SANCHEZ. I don't specifically recall that, but again, 
this kind of an operation does not go through the Office of the 
Deputy Assistant Secr etary. In other words , this is something 
that done through^^^^^^^^^^^^^^^^^f through the other 
areas in the Department. It's not one that requires policy 
decision. 

MR. SABO. Let me show you a collection of documents which 
will be my final exhibit, which I believe now is Exhibit 12. In 
it is a memorajidum dated September 2nd, 1983, for the Secretary 
from a General Counsel, and there are certain other memoranda 
attached. I ask you if you have knowledge of the subject matter 
pertained in that? 

MR. SANCHEZ. No, this goes back to 1983. 



MR. SABO. Right, 



UNCUSSIFIED 



203 



UNCLASSIHED 



MR. SANCHEZ. Do you have any specific question on it? 

MR. SABO. I wanted to know if you were familiar with it and 
to what extent the attached list of arms grew out of..,. or was 
perhaps opposed to a DOD policy. I'm trying to understand DOD's 
policy during that period in respect to the Contras. 



MR. SANCHEZ. Well, I'm certainly ... .you know, the general 
subject, this is something that is. ...this is certainly something 
that could come out of my office or if not out of my office, then 

out of the well, in fact it states here that the Office of the 

Deputy Under Secretary of Defense for Policy requested the leaal 
views on this. So it's something that came to us in Policy, and 
we requested, our contact at that time, as you recall, was the 
General Counsel to give us an opinion on it. 

MR. SABO. And I believe the first document is the opinion? 

MR. SANCHEZ. Yes. 

MR. SABO. Okay, the second document attached to that 
opinion, I believe is a list of armaments which was requested from 
the CIA. 



MR. SANCHEZ. By the CIA. 



UNCLASSIFIEO 



204 



ONCIASSIFIED 



MR. SABO. By the CIA, and the third document I believe 13 a 
letter from a Congressman requesting.... 



MR. SANCHEZ. Addabbo. 

MR. SABO. Yes, Congressman Addabbo, requesting information 
about DOD's involvement in support of the CIA. My question is 
really what was DOD's involvement in support of operations to 
assist the anti-Sandinista forces at that time? 

MR. SANCHEZ. Well, again I'll have to go ba ck and look at 
the calendar as to when,! 

^^^B^e were allowed by law to support, or provide arms reauested 
by CIA, during those period of times when this was permitted, we 
provided them, provided they could reimburse us for the costs. 
During the times when we were not supposed to be supporting the 
Contras because of the limitations placed on us on various 
occasions by the Congress, I do not recall that at any time during 
those periods of time did we provide anything to the CIA. I don't 
know that. 

MR. SABO. You notice in the request from the C IA, an iten 
about two thirds down the oaoe is a requesti 




80 



205 



UNCLASSIHEO 



1 MR. SANCHEZ. I don't specifically recall that request, but 

2 that wouldn't be out of the ordinary. We, have.... 




MR. SABO. My question is whether you recall if DOD had 
5 providec 
6 
7 

8 MR. SANCHEZ^. No , I do not recall and I do not know of any 
9 
13 




UNCLASSIFIED 



206 



UNCUSSinED 



MR. SABO. It could have been accomplished in many ways. 

.^^^^^^^^^^^^^^^^^^H no. It was 
nothing like that, that I am aware of. You see, I think that 
Congressman Addabbo's concern was precisely that - about "US 
covert involvement in and against the Sandinista government in 
Nicaragua is the subject of a continuing debate," and the Question 
that was being asked at that time was "has the DOD been involved 

in this," and I don't know the answer 1 don't see the answer 

here, but I think the answer went back that we weren't. 



MR. SABO. Without regard. ..and this will be my last question 
on the subject. Without regard to the various restrictions of the 
Bowen amendment and from a policy point of view, would it have 
been DOD's preference to have continued with support of CIA, or 
what was DOD's policy during that period? 

MR. SANCHEZ. It depends on who you ask in DOD. 

MR. SABO. I'm asking you, sir. 



-2 MR. SANCHEZ. It depends on how you want to do the operation 

23 from a policy point of view. DOD involvement is a very high 

2. profile US involvement. .There is a certain amount of deniability, 

25 if you may, for the countries of Central America, if you do it 

26 8 2 



i!Kr.ii<;!;inFD 



207 



through other channels/ i.e., CIA. So it all comes down to: are 
we interested in that high visibility, direct involvement by the 
United States Government, or are we trying to give those countries 
who are also interested in helping, some kind of cover, if you 
may, some kind of deniability that they are not directly involved 
with the United States in support of, in this case, the Democratic 
Forces in Nicaragua. 



MR. SABO. For the record, has it been your view that the 
anti-Sandinista forces would require additional training by the 
United States in order to be a viable fighting force? 

MR. SANCHEZ. Any group which gets more training is going to 
be more effective, so I. ...What specifically do you... 

MR. SABO. Should this training be provided by DOD? 

MR. SANCHEZ. Well, again it goes back to how high a profile 
do you want? How do you want to do it? Who is selected in the 
process to do it? Who the Congress limits from doing it? 



UNCUSSIRED 



208 



UNCLASSIFIED 



1 MR. SABO. Let me interject.... 

2 

3 MR. SHAPIRO. Counsel, I.... 

4 

5 MR. SABO. I'm going to give you an opportunity to express 

6 your view, if you wish on how best to deal with the Contra force, 
^ and what kind of assistance we might or should provide.... 

8 

9 MR. SANCHEZ. The best way... Look, the best way as far as I'm 

10 concerned, without getting in any way into the inter-agency 

discussions and disputes that always take place, from my point of 
view, you do it with the best people that you have regardless of 

^3 what agency they are in, those people who have the expertise in 

i4 what you are trying to train the other force in. That's my 

1-5 position, and I don't care where he comes from or anything else as 

16 far as who controls it. Those are the people on the ground, the 

1^7 requested people with that kind of expertise, are obviously going 

is to give the best training and this is what our objective should 

19 be. 
2G 

21 MR. SABO. Last question. Do you know Juan Costillero? He 

22 is an attorney in Panama with the law firm of, excuse my 

23 pronunciation, Quijan Asociados. He is known to Mr. Stone in a 
casual way. Colonel Stone. 



25 



.. UNCUSSIFIED 



209 



UNCLASSIFIED 



C 

i MR. SANCHEZ. ChiXo Stone? 

2 

3 MR. SAXON. Chi^^o Stone. 
4 

5 MR. SANCHEZ. Chi^^p knows a lot of people in Panama. 
6 

7 MR. SABO. I know, but I'm asking you if you know Mr. 
Costillero? 

10 MR. SANCHEZ. No, I don't. I may have met him. I know 

11 several people down there, but I don't. ...In what way? I mean, is 

12 there anything else... I mean, why the question? 
13 

2 4 MR. SABO. The reason for the question is that Juan 

15 Costillero is reputed to be Noriaga's attorney and has arranged a 

16 number of things for him. He is also the attorney which formed 

17 the Lake Resources and other Panamanian companies which were used 

18 both in the resupply effort to the Contras, as well as 

19 depositories or profits. He appears to be a key functionary and 

20 he is known to certain persons in the community and I wanted to 
i know if you knew him and could provide information about him? 



UNCLASSIFIED 



210 



UNCLASSinED 



1 MR. SANCHEZ. No, I don't know him. 

2 

3 MR. SHAPIRO. Are we done? 

4 

5 MR. KREUZER. I have one last question. Until the 2nd of 

6 February of this year, you were the Deputy Assistant Secretary of 
^ Defense for Inter American Affairs? 

8 

9 MR. SANCHEZ. Yes. 

10 

11 MR. KREUZER. And who succeeded you now in that position? 

12 Who fills that position now? 
13 

4 MR. SANCHEZ. Bob Pasterino, a Foreign Service Officer, who 
-5 was the Deputy Chief of Mission in Honduras. 
16 

17 MR, KREUZER. Okay, thank you. 
18 

19 MR. SANCHB2. Okay. 

20 

21 MR. SAXON. Thank you, sir. 

22 
23 The deposition terminated at 1226 hours, 28 August 1987. 



ONOUSSWD 



211 



UNCLASSinED 



AUTHENTICATION 



I, NESTOR D. SANCHEZ, do hereby solemnly swear that I have read 
the attached deposition, consisting of 86 typewritten pages, and 
it is true and complete to the best of my knowledge and belief. 



NESTOR D. SANCHEZ 



UNCUSSJFiEO 



212 



UNCLASSIHED 



CERTIFICATE 

I, Kathryn J. Whitty, do solemnly swear the deposition of Nestor 
D. Sanchez/ was given under the following conditions: 

1. The deponent, Mr. Nestor D. Sanchez was duly sworn by me 
prior to the commencement of any testimony given. 

2. The transcript is a true record of the testimony given by the 
witness. 

3. The testimony was recorded by me, by use of the closed 
microphone and thereafter transcribed by me into the typed 86 
pages. 

4. The deposition was given in my presence and in the presence 
of all parties named therein. 

5. The deposition took place in Room 3E988, The Pentagon, 
District of Columbia, and began at 1000 hours, 28 August 1987 
and terminated at 1226 hours, 28 August 1987. 

6. I am not, disqualified under Section 1.674. 

Kathryn J./whiJjty ^7 

me \i\ 
987. 

ilk, t l ^^^. , , 

Notary Public, District of Columbia 
*- »- l£^^-_,_, .. 1 



Subscribed and sworn to before me by Kathryn J. Whitty, this 
/f)Wl d ay of September 1987. 



UNCLASSIFIED 



213 




UNCUSW 






U.S. MILIT.XRY CROUP EL SMVADOR 

APO MIAMI 3»023 1 ^^^ ^5 



SUBJECT Felix Rodriguez 

THRU: DCM 

TO: AMB PICKERING 

per your guidance, attached is a drafi 
backcSannll to Gen Gorman on our 
"no pay" mercenary. 



:^u. 



STEELE 




5-675^ 



Partially Declassified/Released on. J ^^ 83> 
under provisions ol E 12356 
by K Johnson, National Secunty Council 



UHWW 






h-^ 




SANCHEZ EXHIBIT « /_ 

page _J. °f ^1- 



214 



CONFIDENTIAL 



TO SSO PANAMA 



m'.z\m 



If 
III 



SSO PANAMA PASS TO GENERAL GORMAN FROM AMB PICKERING 

PERSONAL FOR GEN GORMAN FROM AMB PICKERING 

1. C**- DURING BLANDON'S OFFICIAL VISIT TO THE U.S. DURING THE 

PERIOD 22-27 JANUARY 1985, HE EFFECTED LIAISON WITH A MR FELIX 

RODRIGUEZ, WHO I AM TOLD HAS EXTENSIVE EXPERIENCE IN LATIN AMERICAN 




2. frer AS A RESULT OF THE MEETING, 8LAN00N EXTENDED AN INVITATION 
FOR MR RODRIGUEZ TO WORK FOR THE GOES (ON A NO SALARY BASIS) 
WHEREBY MR RODRIGUEZ WOULD CONCEIVABLY BE EMPLOYED INDEPENDENTLY 
TO TRAIN, ADVISE, AND EVEN ACCOMPANY SPECIAL SALVADORAN UNITS INTO 
COMBAT. 




3. MR RODRIGUEZ HAS HIGH LEVEL CONTACTS AT THE WHITE HOUSE, DOS 
AND DOD, SOME OF WHOM ARE STRONGLY SUPPORTING HIS USE IN EL 
SALVADOR. 

4. IT II MY CONSIDERED OPINION THAT IT WOULD BE IN OUR BEST 
INTERESTS THAT MR RODRIGUEZ CONFER WITH YOU PERSONALLY PRIOR 

TO HIS COMING TO EL SALVADOR. I HAVE SOME OBVIOUS CONCERNS ABOUT 
THIS ARRANGEMENT AND WOULD LIKE YOUR VIEWS. I BELIEVE A MEETING W 
YOU WOULD SERVE TO CLARIFY OUR APPROACH IN EL SALVADOR AND WOULD 
ALSO PROVIDE YOU WITH SOME INSIGHT INTO HIS PROPOSED METHODS OF 
OPERATION. I WOULD APPRECIATE ANY USEFUL INFORMATION BE PASSED 
TO ME SO THAT I COULD BE READY TO SUPPORT OR DISCOURAGE HIS 

fNCHEZ EXHIBIT * / 



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'^"aiiy Declassified/Released on J/t^ PP 

under provisions of E 12356 
*••« -"""'Son, NatranalSecunty Council 



^6;J 



SANCHEZ EXHIBIT « 
page / of - 






IMSSIflID 



216 








IpENSlOSn 













-.NNN 



Paflijily Oe9lassiti?d/Rel8ase(l on^ ;rv-^^ 
■ • under ptUViSiofis o* E 12356 
by K Johnson. National Socuiiiy Council 



J I 



1. National bocumy i-ouni,ii . u T T D 

UNCLASSIFIEB 



J 1 D5 U T 1 M 



'sANCHEZ EXHIBIT^* 
Page _ J. 



217 




iiKtFiHi '^Iw 



NATIONAL StCURnrV eOUNCIL 
wACMiNOTON. oc aaiM 




307 



ACTIOW January 15, 198C 

NEMORAMDOM FOK JOBH M. POZMDEXTIl 

FROM: OLZVn L. NORTRK V\ 

SUBJECTS HMtiag with GttiMral Jack Galvia, USSOOTCHOM 

You ara schadulad to maat with Ganaral Jack Galvia on Thursday, 
January 16 from I0t30-ll:00 a.a. Ganaral Calvin haa soaa spaeific 
raceonandationa on futura plans for mora affactiva support to tha 
Oaancratle Rasistanca Forcas (CRT) in Nicaragua. In this ^agard, 
Elliott Abrahms advisad today that Sanator Oolo is drafting a 
bill which will provida ovart military support for tha DRT. Ba 
raportadly has Sanators Lugar, Bompars, and Boran as ee^sponsors 
and Sanator Sam Nunn is considaring whathar or not to "sign-on." 

Ganaral Gorman was and is an activa proponant of a graatar rola 
for tha Spacial Forcas in training/advising both tha Salvadbran 
military tha DBF. Ganaral Galvia sharas this baliaf. Botli . 
ramain eonvincad that tha CZA lacks tha military axparti««>. ^ 
naeasaary to adaquataly train and advisa tha DBF la as .'Mi^ropfriata 
stratagy or avan tha propar tactics. Thair concam is net 
unfoondad. To this data, tha CZA has baan unabla to pcod«ea a 
coharant military stratagy, tha tactics to s^^port suefea"^ ' 
stratagy, or to adaquataly train tha ferea to accosplish aithar. 
Admittadly, sobm of tha problaa is baeansa of our "on again- 
off again" Congrassional rastrictions. But, no small part of tha 
problam ia a lack of axpartisa in tha paramilitary sida of tha 
CIA oparationa diracorata. 




t of 



Finallf r Hiiral Galvia has askad that yeo agraa to pariodic 
(about oM» • month) Motinga with yoo to discuss sanaitivo 
issuas. ^Toa should bo awara that Ganaral Galvin i8eeoni|^ 
tha activitia s undarway in both Coata tica and AtVHHH , 

in support of tha OBT. Ganaral Galvis iS antausiastic 
laavors. Z will ba flying with Ganaral GalTia^to 
Costa Rica aftar tha maating with a ratura Tuaaday morning^ 



RECOMMETOATIOW (SUfi^ 

That you raviaw tha points abova prior to your maatingV ^ 
Approva 




,<V 



218 



Mtssm 



DIRECTORATB OF INTBLLIGERCB 

8 July 1985 



^ Jules- 
N 7053 




IMSORGOrr LOGISTICS PIPELINE (C) 



Summary 
«t« ■ A- - - 

Ttie anci-Sandinlsta guerrillas hav« doKnatrated oonsiderable 
r^nuroefuIneBS in ooping with chrenic ai^fily pcofaleas sinoe C6 Ge w e iiiaai t 
finSlng oded in 1984. ttay have cumed to a variety of sponsors tor 

fvnds to mderwrite purchases of ailitary sifiplieB on ths international 
market ard to oover local operating mtfffv xfn in their effort to sustain a 
■nirary presenoe inside Nicaragua. ^ 




This aeaorandua was requested by the Deputy Assistant 
Secretary for Inter-A«erican 




P'fially Declassifiea/Releasetf on ^FSs 

unaer provisions o( E 12356 

K/K Johnson. N„ional Security Council 



CL BY I 

UBCL OXI 

DRV PROM SISR VOL. I 



mmwB 



SANCHEZ EXHIBIT « 
Page / of 



^ 

?= 



"Pages 






219 



UNCLASSIRED 






\m\ mm 



/) 



esc estimates are that FIK leaders have used their extensive private 
business onrn^ts rn garner most of the funds fraw yg r-nrp^^an ons and 
ooo servacive action ^roups ^ but information on identities of donors or 
awunts provided is unavailable. There has been little evid eooe of dire ct 
foreiG 




Seoondftf y Rebel Groups 

The FID shares scd 
Indian 
south 



with the Mi8ur»— a Miskito 




221 



Sfm^s 



mtUSSIFIED 

1)^aJ/bV jJ 



UNCUSSIFIEO 



222 



m 



6 



N 7066 



SUBJECT: Nicaragua: The Insurgenc Logistics Pipeline (C) 



DISTRIBOTION: 

1 - Mr. Ni 



lestor Sanchez 




July 1985) 



yNClAS&IHED 



SANCHEZ EXHIBIT t . ^ 

Page <? of Q Pages 



223 




S<Y>S^ 



9 iS .i.. . . 

NSC/:CS-4CC36' 



S«pt«mb«r 13, 1984 

N 32553 



se?:s:t:v£ 



y.EXOBANDCM FOR ROBERT C. HCFARIANE 
FROM: OLIVER L. NORTH 



SC3JECT: 



HPSCI/SSCI Hearings on U.S. Private Citizer.s 
Support to the Micaraguan Resistance Forces 



Iff 

III 

iff 



This is in response to your note on the packj 

(SYSTE.M :: 9C962). On Tuesday, September l^J^^Hi^^^ ^^'-^^ 
Johnstone (State) , and Sanchez (DOD) appeared before the SSCI to 
respond to their questions on the Santa Clara incident. On 
Wednesday, September 12, Motley (State), Clarridge (CIA), a.-.d • 
Commodore Darby (DOD) appeared before the HSPCI on the same 
issue. 

Today the SSCI conducted its world-wide covert action review. . 
Clarridge appeared Cor the Latin America region. There were to 
significant questions about the two Americans Itilled on the 
September 1 air raid at Santa Clara. There were, however, 
several detailed questions/comments about other activities in the 
region. The summary below reflects input received from each of 
the Administration participants. 



Suxmar*. 



Congressman HcCurdy questioned Motley in detail regarding 
"what the SSPG had decided to do about the^^HI?" Motley 
resoonded that NSPG meetings were not the purview of the 
Committee, but that the Committee should be aware, since 
receive the intelligence, that we were watching the 
and that we are concerned about them. 

Congressman Fowler, in questioning Clarridge, delivered a 
lengthy exposition onhowth^dj^Jiistration was using the 
delay deployin<j^^^^^^^^Bas a 
embarrassing the DenlsJWW. He noted that there was no 
reason for delay and that there "had better not be' an 
offensive just because the Administration failed to act. 
Clarridge -responded that w^ nrfti*f<1 J^"* *•'"• to ensur- ' 



Declassify: OADR 



VNCUSSIFIED 




224 




si2isnr£E 



^j,^e that th 
obvious tr.a 



, J i * it was 
^^^""^V^rld our control: ^^tatrido. 



Zinai- 

^^^^^^^^^^■^^ jiiati har'e s^'j"- — ,. .^d that '^« 
i!WWt»^^^'^ftnited our control; ^J^^^r^dct 
— -;;. SaTthis i^f-'^'^^i'titlcomir.g t;f ^^iS such 
^^P?tf;\nct where the s^^||||J^|^^^i^yg| ^,.d <:hat 

llrgess, ■i?a^!WBff^^^?^^r!!^ >_?^cau se of 
the 9^FP°^-.Ho 'eel stror.qly /bcu-^^jy|^„^,^jir 
,,.orld-w3.ie ^>^° * Jitlevncte^JlJ] 
anti-coirir.unisir.. >-o ..i^^^^H 

_2rovid^^ 

■■^■■pnPk.ded some a^si.s^« 
roiVb^att.stin. the FOS 




regard tobotW 



Indian units, 



., currentlv se providing ^^ ^p 

^«^^^^ Jtl carbine ^^.^f .rSJTs 

I ^^^Lr-or'tn:%^-^* 

'provided -T^jMrcufl^^^ 



■ rt acj 



Clarr 



b^^tn trouble 
replied^ 



Tl^l^^l^^^ "-' ".J "lSlfS!?« 







225 



RECOMMENDATION 



3 ;v 32555 -^''"'^^^^ 



That you retain this summary with th« document at Tab I in the 
event you receive further queries. 



Approve 



i/ Disapprove 



Attachment 

Tab I - North Memo to McFarlane (90962) of Sep 10, 1984 



UNCLASSIFIED 

TOP GCOnCT 



226 



wmm 






asaygf ^ 



Aucpist 29, 1966 




MEMORANDUM FOR OLIVER L. NORTH 

FROM: DAVID N. LAUX 

SUBJECT: My Contacts with David Duncan 



N 42221 



On July 28, Carl Ford, NIO for Asia at CIA, asked me if I would 
take a call fron Ted Rogers of Senator Glenn's staff about 
talking to David Duncan — an arms merchant from Miami, Florida, 
who had some information on illicit arms shipments in several 
areas of the world — to see if Duncan should be talking to 
someone on the NSC or at DOD or CIA about the information he had. 
On July 29 or 30 I took a call from Rogers who asked if I could 
see Duncan on July 31, when he would be in Washington. Rogers 
accompanied Duncan to OEOB and introduced him but did not stay 
for the discussions. 



Duncan said h« had other information he wanted to pass on to the 
U.S. goveriifflftnt. I told him he was in the wrong department, that 
the National Security Council was not an operational agency 
equipped to deal with this kind of information, and that he 
should be talking to CIA or to DOD. I also told him I dealt with 
East Asian matters but I would try and put him in touch with the 
right people to talk to. Duncan mentioned that he had once 
talked — in April or May — to Nestor Sanchez, DAS/ISA for Latin 
America at Defense. I suggested he go back to Nestor but he said 
Nestor was out of town (I checked and this was true) . 

3 fees 



Declassify: OADR 



mmm 



by K Jonnson, Njlional Secunly Council 



SANCHEZ EXHIBIT # 
Page I of 




Page 



227 



Sfl€yC» 



iifimm 



i\C 



I asked Phil Ringdahl to come in to hear the South African 
portion of -the story and then tooJc Duncan to meet with Vince 
Cannistraro to hear the whole thing and put him in touch with CIA 
if that seemed appro priate. Vince talke d to him at some length. 




Duncan said he also had some information on an attempt to purchase 
TOW misstlsa by Iran. He said Iran had $76 million in a Belgian 
bank to bs used in the purchase of 4,000 TOW missiles. Duncan 
said they really only cost S7-k each, that the gomy price was 
$12-k each, but that they would probably be sold to Iran at $19-k 
each and that the difference, totaling $28 million would be 
pocketed by the intermediaries. Duncan said the Belgian bank was 
amenable to a deal involving a "sting", i.e., the sale of the 
missiles would go through but empty crates rather than the 
missiles would actually be delivered. Duncan said he was in a 
position to arrange this if the U.S. government wanted but it 
would have to be done pretty soon. 



UNClASSIfil 



SANCHEZ EXHIBIT t _7 
Page ^ of ^ 



Page 



228 



UNCLASSIFIED 



Vince Cannistraro was on leave so I was unable to find out what 
had transpired in their talk and whether Vince had discussed 
Duncan with CIA and made arrangen«nts for them to dnlt^t^tt 



So 



wau wi^a ^^^ ana maae arrangen«nts for them to contact him 
I telepnoned Nestor Sanchez, who gave me the s 



torv 



Chxn''nrr?2.''\^^ ^^'"- Sanchez suggested I talk ^-' 
Chief of CIA's Latin Axnerican division/ DDO, and lethi^^Sfllio 
the matter of dealing with Duncan. Since I diSn't knSiUiiif I 
telephonec Clair Georoe CIA's nnn t , u j i, • '^^°^^^^^ I 

wa, a wild man, unr.Uable, that they dilj~".^; t"?llk^o Si. 

idvnn's:^?,''i;t:j=LijMJ"Li"t^^" ""''°° ^°« -- '^' 

unable to get to any one who could deal adequately with his 



SANCHEZ EXHIBIT f "7 

Page -3 of J? Pages 



m\mm 



229 



UNCIASSIHED 



278 



2S«ptiefrb«r1986 



Meeting wth *P«lric»' in Geneva on 1 July 1 996 

•Patnce' conftmed he was the owner of the amis shpniert stezed by General Noriega 
In Panama. 

'Palhce' stated: 

1 . The ship's desdnatton vas Peru • El Salvador. 

2. Peru had ordered the trucks, but denied the ship pemiission to dock due Id the 
amf« aboard. 

3. The ship proceeded en route to El Salvador. 




4. -Palrice' had a "Letter al Irten 
RPQ-1 8s and the AKMS rftes. 




6. "Palrice- beiieY< 



permission to dock, 
had ordered the amis on behar of someone else. 



7 -Palrice' has a partner i n Miami. David. Duncan, and a represenbative in DC, 
Elaon 'Dan' Cirrmings mim^ a retred Cotonel. USA. 

CocTvnent 

'Patrice is working from an office bearing the name 'Stv ^oducfions* in Geneva. 



*Pabice*'s fuii name and a^vss is as follows: 



PaftlMQarl^de lasagne 
22Al|pduC*n01tr 

lAfttvt.! 



1201 



, Swtzerland 



PO Box 248 

1211 Geneva, Swberland 
Telephone ; (022) 31 SI 3S 
Telex : 28322 STARP-CH 



Partially Oeclassitied/Released on ^ ^6"^ 68 
under provisions ol E 12356 
by K Johnson, National Security Council 



UNClASSra 



SANCHEZ EXHIBIT * 
Page / 



yf 

^-'"U 



ot^^ 



Pages 



230 



UNCLASSIHED 



■20. 



Conv«rsabons wiA Dan Cimmings 

1. ConftrrnedinforTmbongivenby'PatKe'tobecorrKt 

2. SbM ttat David Duncan had b««n to th* Whl» Hous* a 
mat Qen«Ql Noriega vroutd r*teas« mt shp(mrt 



Several phone cans win David Duncan corAmed: 

1 . Duncan had been to (he WM» House 

2. Duncan had met Yvth Yince (NS C) 

3. General Noriega has agreed to release the shipment 



uNcussra 



SANCHEZ EXHIBIT I S 

Page c^ of V 



Pages 



231 



IMASSIFIED 



MMtingwthDtYid Duncan, 29 August 1966, Washington DC. 
Duncan; 



^2C3 



37 



I 1 Frsl discussed Ow possbiliy of shipment wth Nerstor Sanchez in Fetfuwy oT 
1986 Sanchez had no ob)«ct)ons. Duncan has conbnued to bnef Sanchez. 

2. The shp left E.Gefman port headed for Africa. Wonned mat A/hca cannot pay 
the balance due, Che shf) tunns around. 

3. The Penjvan Navy ajees to ptrchase. 

4. Peru refuses pefmssjon to dock. 

5 ^^^^^H^Ba^-ees to accept shp, then refuses to allow shf) in pod 

6. ^^^^^^Ms ipset about the presstre if ising from this. Duncan spoke 
to^^^^PlHliliHH^H^^^^Duncan stated: 
Jj^^lpinks he is getting pressire no^» hasnt seen anything yet f 
^mSoes not bring Dunan tne pirchas« orders trot Duncan is expecting, 
Duncan is going to the press and really tell them a story .* 

'People down the sireeT (Whi» House) on Duncan's back becai 
pirchase orders are not coming in nist enough. 

Duncan said that the NSC vas an^ry thaf^H|had not bought more am« »om 
Duncan, as Duncan can finance 1 0CX ^^^^ 

Duncan descrtws money as "Black Money' placed in Swiss Banks can finance 1 0OX 
tor a 1 5-year loan, wth the fist payment delayed 1 2 morths. 

Duncan tha(!|^^HIII^HHHHI^^^^^H^^H2S^ 

bragged Mit he had bought them tor 20 million dollars and »old ttwm^^p 
-SO to 60 million doliafs^ 



He also ttld mat he had conirads| 
miltary-runraflnefy and port. Allcoi 



build a miitary hosplai and a 

>n financed wth 'Black Money*. 




IINCIASSIFIED 



SANCHEZ EXHIBIT I 
Page 3 of _ 



232 



«NCUSSIflEO 




'Patrice's partner in Geneva .'George', vas a 
' "George' Mad been responstie ror l Ocoi 
ceoTPalhce' in Genera s under securty protection 



Commenis and Conclusion: 



Ron Martin and Mario Del Amico 




Mario Del AmicoJ 

a close personal D-iend oCMax Gomez (Felix Rodriguez), also former CIA. 

Max Gomez, civilian, lives on a miliary bai 




Max Gomez (Felix) vas placed in El Salvador by Nestor Sanchez and Dan Gregg 

(Vice-President's office). Max bQgs that he has daily conbct with the office ofthe Vice 
PreswenL 

-Duncan b nat ttat through all of the above. Duncan has conlroij 
■Hl^vli povi«r Ifom the Whte House, ^NSC, Vice-Presider 
Sanchez. 

Duncan believed to be a very dangerous man 

Inromration Duncan willingly gave in boastful nnnner could; 

1 Damage President Reagan and the Reoublican 

2. Damage Vice-President Bush 

3. Damage NSC and Sanchez. 

4. Disciosireor covert 'Blade Money could have untold ramncatlons. 




UNCLASSIFIEO 



2^ R(?i^e(. 



CUMMIN GS FACILITATORS INTERNAT IONAL 
McLean, VA 22102 




April 24, 1986 



Nestor D. Sanchez 

Deputy Assistant Secretary of Defense 

for Interamerican Affairs 
Office of the Assistant Secretary 

of International Security Affairs 
Room 4C800, The Pentagon 
Washington. D. C. 20301-2400 

Dear Nestor: 



Based on our conversation of April 22, the following is information 
on the Soviet made equipment which is available for delivery in 
4-6 weeks. All is direct from Soviet factory. 



Quantity 



Price (U.S. Dollars) 



1140 


RPG-18 


500 each 


ISOO 


AKM-S 


170 each 


30 


4x4 Trucks 


15.000 each 



The addition of 1\ of cost shown should cover freight and insurance to 
transport it anywhere desired. 

The material is available from: 



General Equipment Company 

Wellington House 

17 Union Street 

St. H«11«r 

Jersey. Channel Islands 

The addrtss In Switzerland 1s: 

P. 0. Box 248 

1211 Geneva 1. Switzerland 
Telephone 022/31 51 35 
Telex 28 322 




Partially fiwIaMtM/Released on ^ ^6 I 

""*"' H'" i I u( CO, lUUte 

by K Johnson. National Sscuriiy Council 



Sincerely yours. 




Idon c<^CuiTTTnngs 
Colonel USA (ret.) 
President 



lINCUSSiFlEO 



SANCHEZ EXHIBIT # 7 

Page / of / Pages 



234 



mmzma 



; >J'/^/vf> 



r^/),i.;/' /'' 



■ i-i/:- 'hr^ 



^ :.''i¥'i- 







UNCLASSIFIED 




a* 
uiuokasdvu 






Q-r-re ft^f'C** 




'ti^ yJiS W >^ M4f'> f ks- 



unfler pro»,sK)ns o( E 123« 



JSIflj 




SANCHEZ EXHIBIT • // 

Page / of / Pages 



236 







mmm 



Sept.aber 2, 1983 ^at^hez-ti^ 
Ex- 



MEMORANDUM FOR THE SECRETARY OF DEFENSE 



SUBJECT: 



CIA Request for DoD Support of Covert Activities in 
Nicaragua (TS) 



(TS) Recently Judge Clark sent a aeaorandua to you askina that 
the Department, in coordination with 0MB and State, ensure 
that sufficient resources are avail able to s upport democratic 
resistance forces within Nicaragua. ' " ^'^ 




(S) Following this, the Office of the Deputy Under Secretary 
of Defense (Policy) requested our views on DoD's legal authority 
to provide the requested support. A review of the natter con- 
ducted by this office indicates that DoD has no separate appro- 
priations or any other legal authority under which the 
requested support could be provided on a non-rei«bursable 
basis, as the CIA had requested. 

-^^L^**? ^^^ **** ****" disappointed with our pointing out this 
difficulty; it has suggested that it hti insufficient funds 
to support such activities on its 



(C) Section 403 transfers require as a aatter of law that 
0MB give its approval to such transfers. In addition, as a 
matter of practice, six comaittees of Congress are also 
informed of such transfers: the two Armed Services Committees^ 
the two Appropriations Committees; and the two Intelligence 
Committees. Although as a matter of law it would be possible 
to avoid involving these comaittees in the process, such a 

Declassify: OADR "*=' • '"'i-'i? '■ E.'J 12356 

. : ■ •,:•:..- --i!-i«v Cu;fr;rli 



mmma 




237 



UNCLASSIFIED 



course of action would appear- to be most unwise, inasmuch as 
this statutory authority to transfer funds is intended to 
conceal the precise amount of the CIA budget from the public, 
not to permit augmentation of that budget as it has been 
approved by Congress. An attempt to avoid Congressional 
involvement in the transfer process could jeopardize the 
entirety of the CIA legislative authority to receive funds 
from other governmental agencies. 

(S) Despite our desire to support CIA initiatives within 
Central Arierica, we are nonetheless constrained in the method 
of this support by statutory restrictions. Moreover, we have 
recently received a letter from Chairman Addabbo questioning 
the Department's involvement in precisely those activities for 
which the CIA now seeks support (copy attached). 

(U) Director Casey may raise this subject with you. 

William H. Taft. IV 
Attachments (2) 



ym^^ 



7 hf hrC - 9 7l*C^ ^M- 



238 






j)0C6l>^^^i^ 









dObR, 



239 



P €onByNliLAS8it&.atc, 



C^mmina n 2ppropruriofii tr/^'^"" 

Wiihlnjion, D.C. 20515 rr r f- Sii^r ^■' 

July 27. 1983 ^^'^ szr^:r" 

TOP SEC«T •2:^S'n. 



Honorable Caspar V. Weinberger 
Secretary of Defense 
Washington. D. C. 20301 

Dear Mr. Secretary: 

As you are aware, the Issue of U. S. "covert" Involvement In and 
against the Sandlnlsta government of Nicaragua is the subject of a con« 
tinuing debate In the country and the Congress, loth the House and the 
Senate have held extraordinary secret sessions on this Issue and the 
House has scheduled a vote on H.R. 27(0. the Intent of which is to cut 
off the funding for U. S. "covert" actlvltUs In Central Amcrlc*. 

The Conrilttee has recently learned that the Department of Defense 
has been Instructed by the President to provide assistance to the Central 
Intelligence Agency (CIA) to facilitate the conduct of 'Covert" action 

'activities In Central America, and tucJi assistance \* to be on • non- 
reimbursable basis. The Comlttte has also learned that the CIA has_ 

jubmitled to POD a list of| 

__^ ^^^^^^^^^^^^^^^^^^^^^Ithat It would like to have 

OOP provide. 




Executive Order No. 12333 states: '%o agency except the CIA (or 
the Anned Forces of the United States In time of war declared by Congress 
under the War Powers Resolution (8? Stat. 85S)}My conduct any special 
activity unless the President detcrvlnes that another agency Is more likely 
to achieve a particular objective." There Is no Presidential Finding ^ 
authorliing DOO to conduct or assist In the Central American special 
activity. 



Mr. Secretary. I request that you expeditiously provide the 
ttee with the folloMing Information regarding OOO's a 
CIA In the conduct of "covert" actions In Central America: 



Conmlttee with the folloMing Information regarding OOO's assistance to f '^^/V^^/ 



s^ONCUSMO i«f// 



... ■" . ..';'■;: „n,, Council X2 64 9'2 



240 




~«. .ni/., .,h., ,r.!p.',„c'.;i;:;'^jf.;°'' " '"■"" *-""» »■>«""• 
.»••.....■•']«u;::^nr..^X;s.:"::.-:r,::.'?':^,^;.^t'~"^ 

Slnccrtl]^ 

/(fieph /. Addtbbo ^ 
.^ftMlnnan 
£ ' '■ D*'*nie Subconwittee 



UNCLASSIFIED 



•2- 



241 



mssro 



^<^5S,fl 



•/£D' 



Deposition of: Lawrence Scharf, 
Special Assistant United Statns 
Attorney 



Friday, July 17, 1987 



U.S. House oC Representatives, Select Com«ittee to 
Investigate Covert Arms Transactions with Iran, 
Washington, D.C. 




Appearances : 
H. Thoaas McGough, Jr., 
Associate Counsel, Senate 
Select Coaaittee. 

Robert N. Genzaan, 
Associate Minority Counsel 

Jack Perkins, 
Departaent o£ Justice, 
Legislative Affairs. 



Partially Declassified/Released on i. 



4''Bl 



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



T> Ma? I- 



JACK BESONER & ASSOCIATES, INC. 
T\,r::r=T qtropf. M^,inii. FT. T> 11 ( ■( S ^ "t 7 1 - 1 s v 



242 



MlffiSll 



Deposition of: Lawrence Scharf, 
Special Assistant Unitnd Statns 
A t torney 



Friday, July 17, 1987 



U.S. House oC Representatives, Select Committee to 
Investigate Covert Arms Transactions with Iran, 
Washington, D.C. 



Appearances : 
H. Thomas McGough, Jr., 
Associate Counsel, Senate 
Select Committee. 

Robert H. Genzman, 
Associate Minority Counsel. 



Jack Perkins, 
Department of Justice, 
Legislative Affairs. 

Partially Declassified/Released on /~^"^ ^ 

under provisions of E.O. 12356 
by N. Msnan, National Security .foy^cil .,„ . ■ 



JACK BESONER & ASSOCIATES, INC. 



243 




1 MR. MCGOUGH: Mr. Scharf, my name is Tom 

2 McGough, Associate Counsel with the Senate Select 

3 Committee. Sitting to my left is Bob Genzman, who 

4 is Associate Minority Counsel for the House 

5 Committee. Jack-- 

6 MR. PERKINS: Jack Perkins, Department 

7 of Justice, Legislative Affairs. 

8 BY MR. MCGOUGH: 

9 Q. State your name. 

10 A. Lawrence A. Scharf, S-c-h-a-r-f. 

11 Q. What is your position? 

12 A. Special counsel in the appellate 

13 division of the United States Attorney's Office, 

14 Southern District of Florida. 

15 Q. What are your duties here? 

16 A, I work with the United States Attorney 

17 overseeing all appeals for the office. 

IB I do some administrative work. 

19 That is my primary responsibility. 

20 In that connection, I interview all 

21 applicants for the office to the extent I am ablu 

22 to do so. 

23 My primary responsibility is to get 

24 involved in a supervisory capacity, and if I can, 

25 get involved in or help in difficult, sensitive 



n or neip in axtcicuj 

UUSSiffi 



JACK VffiVWESkOaUUttlHBM, INCr- 
172 West Flagler Street, Miami, FL 33130 (305) 371-153' 



244 



ii ii A S sm 



1 and complex investigations and prosecutions that 

2 the office is conducting, so I will be assigned to 

3 either work with another attorney, or work with 

4 you, as those other attorneys are doing, in those 

5 kinds of matters, review what they are doing, to 

6 see that all proper investigative steps have been 

7 taken, that the prosecution is being-- if 

8 prosecution is being proposed, if there is a 

9 prosecutable case that the defense has not 

1 overlooked . 

11 I also get involved in handling 

12 appellate matters, particularly-- a particular 

13 difficult nature. 

14 I have had extensive appellate 

15 experience before I came to the office, and I will 

16 periodically handle some government appeals, which 

17 always are more difficult than being on the 

18 winning aide in the District Court, and also 

19 available as a resource person for the office, 

20 that anyone can feel free to come to for advice as 

21 the need arises . 

22 Q. Do you review all indictments that are 

23 handed up by grand juries here? 

24 A. I do not review all indictments. 

25 I am someone who is authorized to sign 






^m 



ES, INC, 



245 



mmm 



1 documents in the absence of the U.S. Attorney, or 

2 his unavailability. 

3 I will review indictments in complex, 

4 sensitive cases. 

5 Most of the public corruption and fraud 

6 indictments, and many of the major narcotics 

7 indictments pass through me before they go on to 

8 the United States Attorney for his approval. 

9 Q. Do you carry any case load, yourself, 

10 or is your contact with the cases, as you 

11 described, mostly or exclusively supervisory? 

12 A. At the present time, I am carrying no 

13 case load, myself, except for some appellate 

14 ma tters . 

15 Q. When you say at the present time, are 

16 there periods of time when you do carry case 

17 loads? 

18 A. Well there was a period of time where I 

19 worked for an extended period of time with another 

20 attorney on a fraud matter. 

21 Q. How long ago was that? 

22 A. That was in '85 to '86. 

23 Q. Can you tell me what your commercial 

24 phone number is and FTS? 

25 A. Commercial is 305 -5jg^%%l 7 , 



JACK B 
172 West Flagler 




I 



'ATF5, INC. 
AT, Miami, FL 33130 (305) 371-153 



246 



O NCLA SSI FIED 



1 FTS is 350-4917. 

2 Q. Could you-- let's start with law 

3 school, if you could, and trace your career up to 

4 the present time. 

5 Where did you go to law school, and 

6 when were you graduated? 

7 A. I went to Harvard Law School. 

8 I graduated in 1970. 

9 Q. Where did you go after Harvard? 

10 A.. I was a law clerk to then Chief Judge 

11 Lombard of the United States Court of Appeals for 

12 the Second Circuit. 

13 Q. Was that a one year or two year 

1 4 clerkship? 

15 A. One year. 

16 Q. Where did you go after clerking for the 

17 judge? 

18 A. I went to the Criminal Appeals Bureau 

19 of the Legal Aid Society, New York City. 

20 Q. And was that just as a staff attorney? 

21 A. I started as a staff attorney. 

22 After approximately a year and-a-half, 

23 I was made a senior supervisory attorney. 

24 Q. How long were you with Legal Aid? 

25 A. Until 1976, 



JACK BE^^HM •»■«»•(» PJITE'S', INC. 
79 u«.sf Plaaler <;treet, Miami. FL 33130 f305) 371-15^- 



247 



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 



wmmm 



Q. Where did you go after Legal Aid? 

Excuse me. At the time you left Legal 
Aid, what was your position? 

A. Senior supervisory attorney. 

Q. Where did you go in 1976? 

A- In 1976, I took a period off, and then 
in, I believe it was, February of 1977, I 
interviewed for the Justice Department's Organized 
Crime Strike Force in New York, Eastern District 
of New York, and they wanted to hire me, and at 
that time-- there ensued a period of delay before 
I could start, for things like budget, 
bureaucracy, what have you, so I took a temporary 
position with the National Center for State 
Courts . 

Q. Is that organization in Williamsburg, 
Virginia? 

A. I • m not sure . 

Q. It was in New York at the time? 

A. That wasn't where it was headquartered, 
but I was in New York. 

They were doing a study of the various 
aspects of the court system in New York, so we had 
an office in Manhattan. 

Q. How long were you enq^g^d in this 



HOW long were you engaaea 

mMB. 



NC. 
172 West Flagler Street, Miami, FL 33130 (305) 371-I5r 



248 



study? 



UNCUSSIFIED 



That was for a period of perhaps four 



to five months . 

It was with the understanding that I 
would be firee to leave when the Justice Department 
was in a position to have me on board, and when 
that came through in November of 1977, I started 
with the Strike Force. 

Q. And again, was that as a staff attorney 
with the Strike Force? 

A. I came as special counsel, same title 
that I have in this office. 

Q. Special counsel to whom? 

A. The U.S. Department of Justice, 
Organized Crime Strike Force, the Eastern District 
of New York. 

Q. Has that a supervisory capacity? 

A. Yes, it was. 

Q. How long were you special counsel to 
the Strike Force? 

A. Until I came down here, which was in 
February of 1984. 

Q. And when you ca«e here, what position 
did you take? 

A. It was special iQll***l at that time. 




JACiJjaf^jmiivi%*B5(TcnrrES, inc. 
172 West Flagler Street, Miami, FL 33130 (305) 371-1537 



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At that time, it was special counsel to 
the criminal division. 

Q. And who was in charge of the criminal 
division at that point? 

A. Joseph McSorley. 

Q. Has that when Judge Marcus was U.S. 
Attorney? 

A. Yes . 

Q. When did you assume your present 
posit ion? 

A. I think it was approximately May of 
1986 that I was moved from in the criminal 
division to the executive division. 

Q. Uas there any difference in the way you 
served, between the special counsel in the 
criminal division and special counsel to the U.S. 
Attorney? 

A . I don ' t think so . 

Q. How long have you known Leon Kcllner? 

A. 20 years. 

We were classmates at Harvard Law 
School . 

Q. I took Mr. Kellner through his career, 
but 1 don't recall whether there were any common 
positions that you had held 



72 West FlaaleVsrr^et . Miami. FT. ."» "» i ^ n nOS^ ^ 7 i - i "^ "* 



250 



UNCL ASSi nED 



1 Has he with Strike Force or-- 

2 A. No. He was in private practice until 

3 he came down to the U.S. Attorney's Office here. 

4 Q. Did you come down at the same time he 

5 did? 

6 A. No . 

7 I came down right after Judge Marcus 

8 became U.S. Attorney, whereas he did not come down 

9 until February of 1984. 

10 Q. All right . 

11 A. Let me just add that in law school, I 

12 was a roommate of I.eon Kellner and Judge Marcus. 

13 Q. I'm sure you Icnow we're down here to 

14 talk about what you understand has been designated 

15 as the Costa case? 

16 A. Yes. 

17 Q, You're faailiar with the case which I'm 

18 referring? 

19 A. Yes. 

20 Q. It's been called by so many different 

21 nanes. At least up in Washington, I wanted to make 

22 sure we had the vocabulary straight. 

23 Can you recall your first contact with 

24 that case or that investigation? 

25 A. The first time that I recall, was 

.>c. mm ACT jfn .kc 

172 West Flaaler S*1il4w!^ni*lU8.l iL.Ul3 (305^ 371-1' 



251 



mmxm 



participating in a meeting aCter Jeff Feldman came 
back fro« interviewing someone named Jack Terrell. 

Q. IE I could punctuate that-- was that 

before he went to Costa Rica, but after he 
interviewed Mr. Terrell? 

A . That ' s correct . 

Q. Hho was present at that meeting? 

A. I just recall myself, Jeff Feldman and 
Leon Kellner, but I'm not certain of that. 

Q, Uhat was discussed? 

A. Hell, he went through the things he had 
learned, from, you know. Jack Terrell, and there 
were many details about trying to put down-- 
trying to put together a group of people to train 
and fight Nicaraguan-- the Nicaraguan government 
from Honduras and from Costa Rica, and that was 
as-- during that meeting, or right before when I 
was being called in. 

I learned that there had been these 
allegations of a plot to assassinate Ambassador 
Tamma and to blow up embassies, and as I recall, 
Jeff was asked about what Terrell said about the 
plot to assasinate Tamms, and he said he had 
neglected to ask him, because he had to spend so 
much time talking about these parami 1 i tary 




jAcl^l^pfl^nUUTKtlkVs, INC. 

• <77 Hest Flagler Street, Miami, FL 33130 (305) 371-1537 



252 



..„.,.,.. UNCLASSIFIED 

Q. I notice you have in front of you what 
appears to be-- is that the chronology that Mr. 
Feldraan prepared? 

A. This is the chronology that Mr. Feldman 
prepared, which reflects many events of which I 
have no knowledge. 

Q. Do you have any of your own notes 
written on that chronology? 

A. Very few. 

Q. At soae point, we would like to just 
take a look at the chronology with your notes on 
it . 

I don't think that's important at this 
point . 

With reference to that chronology, can 
you tell me when that aeeting with Mr. Kellner and 
Mr. Feldaan took place? 

A. Bell, I suppose it would have to be 
either March 27th or March 28th. 

Q. That would be 1986? 

A. ' 1986. 

I do not recall which date it is, from 
my own recollection. 

I certainly don't recall a six hour 



, INC. 
33130 (305) 371-1537 



jACK|||n|iRl 

17 2 aes-fc, Flagle "IrrVfl, Wi"! 



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meeting , 



IttOTH): 



Q. That was going to be ray next question. 
How long was the meeting, or how long 
were you in the meeting, if you remember? 

A. I don't remember exactly how long the 
meeting was . 

My best recollection would be-- I would 
be surprised it would be a little more than two 
hours . 

Q. Do you recall what the decision or 
resolution of the meeting was? 

A. Yes. 

There was a decision not to just 
believe what Terrell said, but because of all of 
the information that was available at that point-- 
that Jeff Feldman and the FBI agents should go to 
Costa Rica and interview these mercenaries, or 
so-called mercenaries who are in jail in Costa 
Hica, and anyone else down there who might be able 
to shed light on the allegations that Jesus Garcia 
had been aalcing. 

Q' Do you recall in that meeting whether 
there was any discussion of the CIA or the NSC, 
National Security Council? 

A. The only thing I recall is that Terrell 

72 West Fla:?^yiQ^nVUtn|.ll 33130^(305) 371-1537 



254 



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1 claimed that the CIA had recruited him to help the 

2 CIA, which I have heard at times called CMA, as 

3 Civilian Military Assistance, but anyone-- to help 

4 the CMA to model a fighting force, and as I 

5 recall, that Terrell was asked who in the CIA 

6 recruited him, and he refused to say. 

7 I don-t really recall anything else 

8 about the CIA being mentioned in that meeting, 

9 although it may very well have been. 
10 q. How about the NSC? 

XX Do you recall any reference to the NSC? 

X2 A. I don't recall any reference to the NSC 

13 at that time. 

14 Q. Any reference at that point to Oliver 

15 North or Robert Owen? 

16 A. Not then, that 1 recall. 

17 Q, Do you recall any discussion of whether 

18 a grand jury should be employed at that point, or 

19 at some point in the investigation? 

20 A. Not then, no. 

21 Q. Do you recall any discussion about the 

22 Boland Amendment? 

23 A. Not at that time. 

24 Q. Do you recall any discussion at that 

25 meeting of any-- about any potential political 



.„ .. .^j^Ll«iS&ffl 



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14 



impact or ptobleras with the case? 

A. No. 

Q. Did you take any notes at that meeting? 

A. No. 

Q. Now, after that meeting concluded, 
and-- what was your next contact with the-- this 
case, if you recall? 

A. The next contact I recall was the 
meeting that we had when Jeff Feldman returned 
from Costa Rica. 

Q. And that would have been on April 4th? 

A. That's correct. 

Q. Do you recall-- were there any 
communications from Mr. Feldman to you, during the 
time he was in Costa Rica? 

A. Not to me. 

Q. Are you aware of any communications 
with anyone else? 

A. I seem to recall, and this is very 
hazy, that he may have called Leon Kellner once 
while he was down there, and I'm not certain about 
that, and I don't recall if he did, what he nay 
have conveyed. 

Q. What do you remember-- first of all, " 
let's turn to the April 4th meeting. 



m&mm 



JACK EV90IVknW>fVi1£W INC. 
172 West Flagler S tree t , ,, Hi.a»i . FL 33130 (305) 371-1537 



256 



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15 



Who was there, to the best of your 
recol lection? 

A. Richard Gregorie, Ana Barnett, myself, 
Jeff Feldman, Leon Kellner. 

Q. Has Mr. Leiwant there for any period of 
time, that you know? 

A. Let me explain what I remember on that. 
I recall-- and obviously, I'm not 
entering this with a blank slate-- 

I recall the discussions we were having 
about the Neutrality Act and the Boland AaendBent, 
and then we wanted to try to find the Boland 
Amendment and the various incarnations. 

We were having trouble finding it in 
the books, and I remember Ana Barnett going out to 
see if she could get it off the machine, and 
coming back and saying someone is going to get it 
for her. 

I remember very vividly someone coming 
in with the computer printout, and us sitting 
there with the computer printout and discussing 
the Boland Amendment. 

I do not remember who it was that 
brought the Boland Amendment into the room. 

I know now it was David Leiwant, but 

„::;;,-iill!lA8Wr;... 



5) 37 1-153 



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16 



from ay independent recollection, I don't recall 
that he was there. 

Q. Were you present for the entire 
meeting? 

A. To the best of my recollection, I was. 

Q. But beginning to end, with-- I 
understand that there-- were there any 
interruptions, or did you have to leave the room 
for any reason? 

A.. I don't recall any interruptions. 
I was definitely there during the 
period where the computer printout was brought in 
and where we discussed-- where we all read it, and 
we discussed it and discussed the Boland 
Amendment . 

Q. All right. 

A. So I just don't see any-- in my on mind 
at least, it's clear that we had to be in the room 
at the same time, and it's just that David Leiwant 
had such a brief appearance in this case, that I 
simply don't remember it. 

Q. Do you recall any phone calls being 
made or being received during the course of that 
meeting? 

A. I don't recall any that would be-- it 

..c. MilSStflKfl .c 

7 ■> u»,«* P1-./T1-1- Ci--rmm* iti^mi'' pt'-^i^n ^^OS^ "^ 7 1 - 1 «; ' 



258 



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17 I 



1 would be very common for Leon Kellner to take 

2 calls during meetings. 

3 He was always getting calls, and often 

4 we would take them, or we would sit there and have 

5 to wait for him, so the mere fact he would get a 

6 call, would just not be a memorable event. 

7 What would be a memorable event, would 

8 be if he got a call from the Attorney General or 

9 anyone else in Washington telling him to slow down 
10 or stop an investigation, and that I could have 

H never forgotten. 

12 That juat did not happen. 

13 Q. Do you recall any telephone calls at 

14 all coming in or going out relating to the Costa 

15 case? 

16 I understand there may have been other 

17 calls, but do you recall Mr. Kellner speaking on 

18 the phone to anyone regarding the Costa case? 

19 A. No. 

20 Q. Let me expand it beyond that meeting. I 

21 know the first question was limited to that 

22 meeting, but let me expand it now. 

23 Do you recall ever being present when 

24 Mr. Kellner ever spoke to anyone on the telephone, 

" I -' '-' '" "'" UNCLASSIFIED 

JACK BESONER & ASSOCIATES, INC. 
172 West Flaol*.-- 'iti-nmt. Mia«? PI. ■» ■» i "> n ? "> n c: n n i _ i c; ■ 



Yes 



IINCHSSm 



18 1 



I recall him speaking to Mark Richard I 
believe on two occasions. 

Q. And can you fix those in time at all? 

A. Just in the April, May, 1986 period. 

Q. Were they in the context of larger 
meetings, that is where other people other than 
yourself and Mr. Kellner were present, or were 
situations just with you and Mr. Kellner? 

A'. I really can't recall, and I don't want 
to gues 3 . 

Q. Let's take the first one you recall 
first. 

Do you remenber what the discussion was 
between Mr. Kellner and Mr. Richard, or what you 
could hear of it, or what he might have told you 
about it? 

A. All right. The first one that I 
recall, was where he called up to find out if the 
naae Oliver North was a real person. 

Q. This was Mr. Kellner calling? 

A. Yes, either that, or Mark Richard had 
called him, and during the-- and he used that 
opportunity to ask him, but that's what I recall. 



Now, can you put that in context. 



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any meeting or any poiWt'^rrr Iftts^^inves ligation at 
all? 

A. Well, I-- 

Q. Do you remember, for example, when Mr. 
North's name first arose, or Colonel North's name 
first arose? 

h. Well, his name first arose close to ray 

recollection, upon Jeff Feldman's return from 
Costa Rica. 

That's the first time I heard it. 
Q. Sort of on April 4th? 
A. It would have been, yes. 
Q. Is it a fair inference, this telephone 
discussion would have taken place not long after 
the April 4th meeting? 

A. That's probably fair, yes. 
Excuse me a second. 
I just thought of something. 
There was a newspaper article which 
talked about Colonel North. 

Q. Has it a Miami Herald article? 
A. Yes, and that call would have been 
unnecessary after that Miami Herald article, so it 
had to take place before the Miami Herald article. 
Q. Let me show you-- we've had it marked 



JAC 



Alls, INC. 



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IT] 



EA, 



as d deposition exhibit, but the exhibit- 
which stands for Elliott Abrams, 33. 

It's an article Crora the Miami Herald 
dated April 30, 1986, which I believe refers in 
the second paragraph to Colonel North 
(indicating) . 

My question is, is that the article 
that you're looking for, if you know, and if not, 
whether that article will do-- will help you place 
any of, this in context (indicating). 

A. I don't think this was the article. 

Q. All right. 

A. It's certainly — would have to be 
before that article. 

Q. That is your-- 

A. But I think there aay have been an 
article that preceeded it. 

Q- So at any rate, at sone point between 
April 4th, when you first heard of Oliver North, 
and April 30th, when the article appeared in the-- 
when an article appeared in the Miami Herald, you 
were present when Mr. Kellner spoke to Mark 
Richard and asked hi« whether Oliver North was a 



real person? 



UNCUSSIFIED 



JACK BESONEH & ASSOCIATES, INC. 
72 West Flaaler Street, Miami. FL 33130 f305^ 371-153 



262 



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13 

14 

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17 

18 

19 

20 

21 

22 

23 

24 

25 



Q, Let me ask you, could that call have 
taken place during the April 4th meeting? 

A. I guess it could have, but I don't 
recall it happening. 

Q. It was just a suggestion. I am not 
trying to Corce you into any conclusion. 

All I'm asking you for is £or your best 
recollection. 

A. I guess one thing I should clarify, is 
I was aware at the time that there had been an 
earlier call from Mark Richard, in which I can 
place this chronology as having taken place on 
March 14th, and which Mark Richard asked, "Do you 
have some investigation going on about a plot to 
assassinate Ambassador Tamras," and asking Leon 
Kellner to look into it. 

Q. But you learned of it at that time? You 
weren't aware of the March 14th conversation, 
until later on in the investigation? 

A. That's correct. 

I have an article which appeared in the 
Miami News on April 11, 1986. 

This is the newspaper article that I 
had in mind. 

It mak.es reference to Colonel North 



USSB 



JACK BE^riln<V9at^|10«RMrlV&CNC. 
172 west Flagler Street, Miami, FL 33130 nos^ I7i-isi7 



(indicating) 



ONCUSS I FIEO 



Q. All right, and that article is headed 
on the first page, "U.S. Probes Reports of 
Smuggling for Nicaraguan Rebels"? 

A. Yes, and it's the Miami News, not the 
Miami Herald. 

MR. MCGOUGH: I would like to get a copy 
of that, if we could. 
BY MR. MCGOUGH: 

Q". Do you recall anything else-- we're 
back talking about the phone calls with Mark 
Richard . 

Do you recall anything else about that 
first phone call, other than asking Mr. Kellner, 
whether Oliver North was a real person? 

A. I don't recall anything else in that 
conversation . 

Q. Do you recall what the response was 
fro« Mr. Richard? 

A. I didn't hear it. 

Hell, I shouldn't say that. 
After Mr. Kellner got off the phone, he 
said that Oliver North is a real person in the 
White House. 

Q. Was that information significant to 



metiisKB^ 



264 



mwM 



23 



you, and if you know, significant to Mr. Kellner? 

K. It indicated that at least the stories 

that were-- whatever rumors were circula t ing-- 
that they were at least based on a real person, 
and not some fictitious name. 

I don't think it had any other 
significance to us at the time, except to indicate 
that I was-- the information should not be 
discarded out of hand. 

Q.. You mentioned that there was a second 
telephone conversation with Mark Richard at which 
you were present, which you were aware. 

I believe you were present-- can you 
tell me what that one was? 

A. As best I can recall, that was only 
letting Richard know that the aeao was on its way, 
and that it, you know, would be sent down soon, 
and this would be the memo that Jeff Feldman had 
prepared, which had gone through the various 
drafts. 

Q. The memo actually went to the 
Department of Justice on June 3rd of 1986; is that 
correct? 

A. Yes. 

Q. So the telephone call obviously would 



JACK BESO 



m&mm 



mmsm 



have been some time before that; is that right? 

A. Yes. It would be, yes. 

Before the day it was actually sent 
out , yes . 

I remember him saying that it would be 
sent soon. 

I also remember that he said he was 
sending this complaint that had been filed by 
Attorney Abregon, the Southern District of 
Florida . 

Q. This is the suit that was-- 

A. Yes. 

Q. And was that suit-- 

A. It was in May of 1986. 

I can't give you the exact date. 

Q. Did you look at the memo that-- and 
refresh you recollection from that memorandum? 

A. Yes. The memo does give the exact date 
(indicating) . 

May 30, 1986. 

Q. So it would have been between May 30th 
and June 3rd when this conversation took place? 

A. Yes, it would. 

Q. Do you recall if anyone else was 
present? 



MNCUSSIFIED 



JACK BESONER & ASSOCIATES, INC. 



266 



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25 



1 A. I don't believe so. 

2 Q. Do you recall anything else about that 

3 telephone conversation? 

4 A. No. 

5 Q. We've kind of gotten off on telephone 

6 conversations . 

7 Let's go back on the April 4th meeting, 

8 if we could, and I want to ask questions about 

9 what topics were discussed. 

10 ■ Do you recall whether Oliver North's 

11 name came up at the April 4th meeting? 

12 A. Oliver North's name came up, yes. 

13 Q. Do you recall in what context? 

14 A. It came up in the context of Jeff 

15 Feldman describing some things that he had heard 

16 said. 

17 I remember asking him, "Well, have any 

18 of the people that have been interviewed said 

19 anything about Oliver North," and his reply was 

20 no. 

21 I think I asked him, "Where did you get 

22 this from," and I don't think he-- as best I 

23 recall, he wasn't certain. 

24 Q. Did he discuss his meeting with 

25 Ambassador Tamms . in .Cos ta Hica a t tha t time? 



::;:MfflM 



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267 



26 

A. He describes that he had met with 
Aabassador TaRna and had told hia what he was 
there Cor. 

I have no recollection that he told us 
then, what I have read in the last few aonths, 
naaely that he pulled out a chart that said Oliver 
North, Robert Owens, and then others, and showed 
it to hia. 

I-- as best I can recall, the first 
tiae I heard that was when I heard about it in the 
newspapers since these hearings have begun. 

Q. Did he indicate to you anything any of 
the eabassy personnel aight have said about Oliver 
North? 

A. No. 

Q. Did he indicate that there was anything 
Unusual or reaarkable about his aeeting with 
Aabassador Taaas? 

A. The only thing I recall hia saying 
«bout Aabassador Taaas, as opposed to soae other 
People in the eabassy, was that he seeaed somewhat 
iuspicious . 

Q. Did he indicate that he had act the CIA 

R. ... UNCLASSIFIED 



JACK BESONER S. ASSOCIATES, INC. 
17J Hest Flagler Street, Miaai, FL 33130 (305) 371-15 



268 



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Q. Old he indicate how that aeeting took 
CIA ^^^^^^^^^^^^^H i n ? 

A. I can't say that I have an independent 
recollection froa the aceting in April of 1986 
that he said then that the aabassador had brought 
in the CIaI 

I have been reading about that the last 
few Bonths, but I can't say I independently recall 
that. 

q. Has there any discussion at that point, 
at that aeeting on April 4th, of the efficacy of 
going to a grand jury, or issuing grand jury 
subpeonas? 

A. I don't recall that discussion on April 
4th. 

Q. Has there any discussion on April 4th | 
of the political iaplications of the case? 

A. Mo. I don't ever recall a discussion 
like that. 

What I do recall, whether it was April 
4th or soae other tiae in April or Hay, was 
occasionally jokes being aade. 

I was probably the priaary jokester. 

Q. Can you give ae an exaaple? 

A. Oh, I would say-- I would say, "Oh, 



jiiissifsiEa. 



'ES, INC. 

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Washington is really going to love this," you 
know, that kind of thing. 

There was never any discussion in a 
serious vein of political implications. 

We just aren't concerned with that. 
Q. Do you recall any discussion of 
impending votes on Contra assistance? 



A. 

papers . 



that 



I was aware of it, because I read the 



I don't recall any discussion like 



Q. You don't recall any discussion of the 
Contra assistance votes, in-- in relation to the 
Contra investigation, or in relation to the vote 
or-- 

A. Yea. 

Well, let ue make one exception to 
that, because there was a matter that occurred 
around-- well, it was May 7th, I believe, an 
article appeared in the New York Times. 

Q. Has this the article, by the way, that 
said there was no outstanding investigation? 

A. That's right, that it couldn't be 
called an investigation, it's just an inquiry. 

it. 



K 



1i C K B ES N ER 6 A S S &¥l A T E S , TWc~. 
172 West PlAQler Street. Miam' =■' •> •> i ■» n /im;' 



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I was very disturbed about that 
article. I discussed it with Ana Barnett and Leon 
Kellner. 

They were disturbed by it, also, and I 
am sure somewhere in the middle oE that 
discussion, one of us must have said, "It looks 
like they are trying to play games here, because 
of the vote coming up." 

That must have been said. 

Q.. Did Mr. Kellner-- do you ever recall 
Mr. Kellner making any jokes like the one you 
indicated, "Washington is really going to love 
this," something like that? 

A. No. 

Q. Do you recall at any meeting or any 
time, any discussion oC-- with anyone, over the 
potential impact of the stress upon Mr. Kellner's 
pending nomination? 

A. I don • t . 

If it was said, it would have been 
another one of those joking references. 

Q. But you don't remember specifically 
anyone even making a joking reference to it? 

A . I don • t recall . 

Since we did joke occasionally, it's 

....£ !S !JmM:.c 



271 



. UNCUSSIHtU 



30 



P033ibl( 

Q. What was the resolution of the meeting, 
if any, on April 4th? 

What was to be done? 

A. Jeff Feldnan was asked to prepare a 
memorandum, setting forth the results of the 
investigation to date, and his view of whether we 
should go forward, and at that time, the reason we 
did that was because we had a very hard time, all 
of us, completely following Jeff Feldman. 

He had come back from Costa Rica, and 
he was very excited, and he was throwing out a lot 
of names, and we had never heard about, and 
organizations, and many of them were relating 
names . 

None of us were really able to keep 
straight everything that he was trying to tell us, 
and we wanted it down on paper. 

Q. And so the decision was made that he 
would do a memorandum summarizing the case? 

A . That '3 righ t . 

Q. Was he to include in that memorandum, 
if you recall, a recommendation as to the next 



step in the case? 

A . If es , he was 



UNcussm 



JACK BESONER & ASSOCIATES, INC. 
172 West Flagler Street, Miami, FL 33130 (305) 371-1537 



272 



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1 Q. Do you recall any discussion of what 

2 that next step would be, at the April 4th meeting? 

3 A. I don't recall any discussion like 

4 that. 

5 I certainly do recall his feeling as to 

6 the various aspects. 

7 He felt that the story about the plot 

8 to assassinate Ambassador Tamas and to blow up 

9 embassies, was complete nonsense, something no one 

10 would do . 

11 I found no reason to disagree with him 

12 on that. 

13 Q. What about the gun running side of the 

14 case? 

15 A. The gun running-- at that time? 

16 A. He thought he had a case there, and to 

17 some extent, we were handicapped. We were-- we 

18 were handicapped in trying to pool everything and 

19 keep it in our heads, but it certainly occurred to 

20 me that it could be an unprovable case, and had to 

21 be carefully studied, and he was off with all of 

22 the paramilitary things and the neutrality 

23 violations, and I was really having a hard time 

24 figuring what was doing what to whom on that 

25 aspect . 



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Q. Do you recall another meeting with Mr. 
Feldnan and Mr. Kellner, on or about the day of 
the FBI shooting on April 11th? 

A. No . I don • t recall it . 

Q. What is your next recollection of 
contact with the case, after April 4th? 

A. Well, my next recollection was getting 
a copy of Jeff Feldman's first draft, and 
reviewing it. 

q; Let me ask you, in that interrim 
period, do you recall any discussion, either at 
the April 4th meeting or prior to getting Mr. 
Feldman's first draft of the memo, in his office, 
to bring a prosecution under the Boland Amendment? 

You mentioned that they had the 
computer printout brought in, but was there any 
seriouis discussion about this office's 
jurisdiction about the Boland Statute, or how it 
■ight fit into the investigation? 

A. There was a serious discussion of the 
potential criminal statutes applicable. 

I do not recall a discussion in terms 
of the jurisdiction of this office as opposed to 
some other office, but I do remember a discussion 
about-- well, what happened or-- in Miami, or it 



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came from Miami as opposed to California, 
wherever, or it was just initiated in Honduras or 
in Costa Rica. 

We only have venue to prosecute 
offenses committed here. 

Q. Do you recall a decision ever being 
reached that the Boland Statute would not be a 
plausible basis for a prosecution here? 

A . (No response . ) 

Q. Either because the facts didn't support 
it, or the venue lay elsewhere? 

A. He had a bit of a discussion, that was 
in many ways, off the top of the head, that-- in 
which I explained how even though the fact that 
the Boland Amendment was a statute without 
criminal penalties that is was conceivable, upon 
further analysis, that it would be the basis of 
some prosecution on some general statute. 

For example, conspiracy to defraud the 
United States, or trick, scheme or device to 
defraud, in a matter within the juris idict ion of 
the United States, or any of these general 
statutes . 

I gave some examples of where I was 
aware of, how statutes without criminal penalties 



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had been used to support a criminal prosecution 
under these general kinds of statutes, such as the 
prosecution of Congressman Dix. 

Q. Has there ever a point where the 
Boland-- analysis for a potential Boland violation 
was dropped out of the case, where there was a 
decision made at that time to look elsewhere, as 
opposed to concentrating on Boland? 

A. In my own mind, no. 

Q.' You're hesitating as you say that. 

A. Because I guess I don't want to get too 
far afield in terms of spreading out my own 
thinking, in terms of statutes in a pending 
investigation, but let me just indicate that I 
have always and still have reservations about the 
applicability of the Neutrality Act to the conduct 
that we were looking at at the time. 

I think there are serious problems, and 
I think we necessarily have to get into the Boland 
Amendment in analyzing whether you do have a 
viable case under the Neutrality Act. 

I have had from the beginning and I 
still have now, a certain difficulty with the 
language of the Neutrality Act, concerning a 
nation with which we are at peace, and what does 



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that really mean, particularly in this context. 



when I well knew from reading the newspapers, that I 
the President of the United States was ultimately 
claiming his hope that people would support the 
resistance to the Nicaraguan government. 

Q. So to your nind, the Boland possibility 
was also in the case, in one form or the other? 

A. Yes . 

Q. All right. 

A. I an aware that ay own view differs 
from Jeff Feldman's thinking, and no doubt what he 
told you . 

Q, About the aspect of the Boland-- 

A. The relevance of the Boland Amendment. 

Q. I believe you can refer to Mr. 
Feldman's chronology, if you like, where he 
indicated in the first draft of his meao, it was 
set up on or about April 28th. 
Is that about right? 

A. Yes. 

Q. Now, prior to that time and in the 
context of the FBI shooting, the Attorney General 
visited Miami . 

Do you recall that? 

A. Yes . 



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Q. And you are also aware, are you not, ' 
that Mr. Kellner accompanied the Attorney General i 
to various places in Miami? I 

A. Yes. ! 

Q. Were you part of the enterrage at al? 

A. No . 

Q. Did you discuss with Mr. Kellner after 
the event, any conversations he had with the 
Attorney General? 

A>. No. 

Q. Did Mr. Kellner mention to you that the 
Attorney General had spoken to him about the Costa 
investigation? 

A. Not at that time. 

For the past few months, he has 
mentioned that to me. 

Q. Not outside the context of the inquiry 
that is being conducted at this point? 

A. In connection with this inquiry, but at 
that time, he did not tell me about it, as best as 
I can recall . 

Q. Hhen you got Mr. Feldman's first draft, 
I assume you read it? 

A. Yes. 

Q. What did you conclude about it, iC 



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1 anything? 

2 A. Well, I agreed that the investigation 

3 would go forward. 

4 I had some problems with what he had 

5 written, and some things that I thought he should 

6 bring out more. 

7 Q. Now, do you have a copy of the draft 

8 that you're referring to as his first draft, with 

9 you? 

10 K. No, I don't. 

11 Q. As compared to the May 14th draft that 

12 I think I see at the top of your-- 

13 How did you--what do you call it--thc 

14 first draft? 

15 Here they approx iaatel y the same? 

16 A. Yes. 

17 Q. The reason I asked that, we understand 

18 that there was an additional draft that was 

19 considerably shorter, perhaps a five page draft 

20 that was submitted to Nr. Kellner, and my not have 

21 been submitted to you on or about April 28th, and 

22 Mr. Feldman was then charged to go back and do a 

23 more comprehensive draft, and that may be 

24 ultimately what you saw, and that may be 

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Is that possible' 



A. No. I 

He was asked to add things, and he did I 

add things, but that may have added a few pages. I 

We're certainly not talking about a 
five page draft, a 20 plus page draft. 

Q. Well, the draft you ultimately did see 
recommended that the matter go to a grand jury, 
or, I'm sorry, that grand jury subpeonas should be 
issued; is that correct? 

A. Yes. 

As I reacBber the first draft, it 
didn't say anything about a grand jury. 

Q. We may be talking about the-- not about 
the saae draft. 

Was that a problem for you, that the 
first draft didn't have a specific recommendation 
about a grand jury? 

A. It wasn't for mc, but as I recall, Leon 
Kellner asked that there be a specific 
recommendation. 

Q. Did you review a draft with a 
recommendation that there be a grand jury-- that 
grand jury subpeonas be issued? 

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172 West Flaaler qi-,-***- Kiami. FL 33130 f305^ "« 7 1 - 1 5 3 



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There is something I would like to 
point out to you. 

There were a few notes that I made on 
my review of the first draft. 

This was something that certainly would 
have been in the package that was sent here when 
the production-- several months ago. 

It has no title or heading or anything, 
but it's just obvious from what it is, that it's 
things that I had seen in looking at the first 
draft . 

Q. I'm locking at a yellow sheet of paper 
that says at the top, Corbo, C-o-r-b-o, and the 
next line is another statment, and the next line 
begins with the word confusing. 

Are those your notes with regard to the 
first draft you say (indicating)? 
A. Yes. 

Q. Is it fair to say that you found the 
first draft unsatisfactory? 

A. I found that the bulk of it, in terms 
of its description of who said what was perfectly 
fine, but there was a number of inadequacies about 



For one thing, it just dove right in, 




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It didn't say who these people were, what the 
organizations were, so on, which nade it 
difficult, very difficult to follow. 

It also didn't give any indication of 
how the FBI got to the case, how we got into the 
case, and what had been done since that time. 

It did not really give an indication of 
all of the people that had been interviewed. 

It did not have things that I had heard 
on April 4th or before. 

We were hearing things about the 
National Security Council and the CIA, and where 
is it in the aeno, so, you know, Leon said to put 
it in, not to keep anything out of it that is 
relevenat or aay be relevant. "Put it in the 
me«o . " 

Q. For whoa did you see this aeno being 
written? 

A. At that point, I saw it as being 
written only for us, so we would have, for our own 
purposes, everything that happened. 

Q. Did that perception change at some 
point? 

A. Yes, it did. 

Q. Can you put an approximate time on that 



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2 A. Yes, I can. 

3 It was when we saw the saae New York 

4 Times article that I referred to earlier. 

5 Q. That was May 7th or so? 

6 A. That's correct. 

7 Q. And why did the perception change? 

8 A. The perception changed because we were 

9 reading stateiients made to the New York Tiaes by 

10 the Public Inforaation Office of the department, 

11 that, in our view, did not accurately reflect what 

12 we were doing or what we thought about the aatter. 

13 Q. All right. 

14 A. And we wanted to be very sure that the 

15 people in Washington knew what we had, so that 

16 there could be no Misunderstanding on that score, 

17 and knew that we were treating this as a serious 

18 investigation, which is not to say that by any 

19 aeana we had decided that there were cases here, 

20 but we were seriously handling it as an 

21 investigation, and to say that it wasn't an 

22 investigation, was siaply not right. 

23 Q. Is it fair to say that the decision was 

24 then wade to send the finished product to the 

. I ...... ........ ..... iiNCUSSIFIED 

JACK BESONER & ASSOCIATES, INC. 



UNCLASsi n a 



42 



A . Tha t ' 3 correct . 

Q. Was Mr. Feldman advised of that 
decision at any time prior to the meao going to 
the Justice Department? 

K. I don • t recall . 

Q. Now, there was a meeting, was there 
not, on or about May 20th, at which one of the 
topics of discussion was whether or not the matter 
should go forward to a grand jury? 

A. Yes. 

Q. At any time up to that meeting-- well, 
let me back up. 

I think we're still one draft short. 
The first draft you saw didn't make any 
recommendation as far as a grand jury went? 

A. That's correct. 

Q. Did you then see another draft that 
actually recoaaended that grand jury subpconas be 
issued? 

A. Yes. 

Q. Did you aake any coaaents on that 
draft, or give to Mr. Feldaan any feedback on that 
draft, prior to the aeeting on April 20th? 

A. Not that I recall. 

My recollection is we reviewed 



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everything together during the meeting on May 
20th. 

Q. You are aware, are you not, that Mr. 
Feldfflan at some point got a copy oC that memo with 
a concurrence on it from Mr. Kellner? 

A. I'm aware o£ it now. 

Q. My next question was going to be, were 
you aware of that at that time? 

A . I ' m not sure . 

Q. You don't know if he discussed his 
concurrence with you? 

A. My best recollection is I was in his 
office, and he said something like, "We should go 
forward," and I said, "Well, let's discuss it. I 
don't know if we should be running to the grand 
jury so quick. Let's all discuss it together." 
That's my best recollection. 

Q. But he did not tell you that he wrote 
something on the memo and sent it back to Jeff? 

A. No. 

Q. Let's go back to the meeting on May 
10th. 

Do you recall who was present? 

A. Myself, Jeff Feldman, Leon Kellner, 
Dick Gregorie 



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Q. What was the discussion at that 
meeting? 

A. Except for perhaps a few technical 
things of a minor nature on the memorandum, the 
primary subject of discussion was whether we 
should open a grand jury now, or do further 
investigative field work and hold a grand jury. 

Q. When you say open a grand jury, what do 
you mean by that? 

What do you mean by open a grand jury? 

A. Start to subpeona witnesses to the 
grand jury, designate a grand jury to hear this 
case . 

Q. Correct me if I'm wrong, but there is 
or are grand juries sitting regularly hero? 

A. Yes. 

Q. And it's not a aatter of eapaneling a 
new grand jury for this case? 

A. There have been cases where a grand 
jury was eapaneled specifically for a case that 
was expected to be a lengthy investigation, with a 
lot of witnesses, but there are grand juries 
sitting in this district. 

It's a very busy district. 

Q. Let me ask you a few different 



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questions 



irotssmr 



If an assistant has a case and feels 
that he needs bank records in the course of the 
investigation, and let's just take a garden 
variety drug case of some kind-- 

The assistant concludes that he wants 
bank records . 

To whoB does he speak, or with whom 
does he clear the issuance of a grand jury 
subpoena? 

A. Noraally with no one. 

Q. AH right. 

A. Normally, he would just have the grand 
jury subpoena prepared, or have a return date, 
when, in fact, a grand jury was sitting, and then 
issue the subpoena. Is that right? 

A. That's correct. 

Q. And as far as the subpeonaing of actual 
witnesses, that is testimony as opposed to 
records, would that same process be a normal one 
in a garden variety case? 

A. Well, I-- in a garden variety case, a 
grand jury investigation doesn't amount to much. 

It amounts to maybe puttingan agent 
on, one witness 



UNCIASSIFIED 



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172 West Flagler Street, Miami, FL 33130 (305) 371-153 



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IE it's just one agent, he talks about 
hearsay-- "Yes, I have learned from this other 
agent that he met with the defendant and he bought 
drugs from him, and then an arrest was made, and 
we tested the drugs and it's pure cocaine," so on 
and so forth . 

So any case in which there's more than 
that, is not a routine case, and the fact that 
such an investigation is being held and conducted, 
is sonething that is subject to supervisory 
approval . 

An attorney here does not have the 
power and-- in a non-reactive case, we don't start 
with an arrest, he doesn't have the right to start 
on his own-- investigation on his own, decide he's 
going to investigate something and use the grand 
jury. 

Q. Has this perceived-- this being the 
Costa case-- the type of case that required a 
special grand jury to be empaneled? 

A. I don't recall any consideration being 
given along those lines. 

It was just-- not of its own grand jury 
or-- but it certainly was a Batter that was 
considered would take extensive grand jury work. 



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in which every grand jury-- we-- any grand jury 
that would here it, would have to be selected to 
■ake sure it's a grand jury with a long life, that 
wouldn't be inundated with other natters. 

That was certainly something that was-- 
that we were cognizant of. 

I don't recall any discussion as to 
whether a new grand jury would or would not be 
inclined to hear that case. 

Q. As a Batter of practice, there were 
really two types of grand juries being discussed; 
records subpoenas and testiaony subpoenas? 

A. Yes. 

Q. And it is normal-- it's normal to get 
your records subpoenaed fairly early in the 
investigation because of the usual delays that 
might be encountered in getting records back? 

A. Often. 

Q. In that time frame, can you really 
create for some of the discussions-- some of the 
pros and cons that were considered, as to whether 
records subpoenas and/or witness subpoenas ought 
to be issued in this investigation? 

A. The real focus of discussion, as I 
remember it, really had nothing to do with 



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It was really a question of are we 
ready to go to a grand jury. 
Q. All right. 

A- Are we ready to bring in witnesses, 
thinking about records-- it was purely incidental 
to that. 

The biggest concern that we had and 
that we discussed, was the fact we really didn't 
know what we had, what we were dealing with, what 
we were doing. 

I had all kinds of pieces, Jeff had all 
kinds of pieces, but they were flying off in all 
different directions, and it was, like, entered 
into the middle of the play, and had not even-- by 
the interview process, really established just 
what the place was all about, where it had begun, 
where it went afterwards, who were the key 
players, who were the people that we should be 
looking to target, who are the people we should be 
looking to as witnesses, who are the people that 
we should give inmunity to if they don't want to 
cooperate. 

We just knew so little, to be ab]e to 
answer those questions 



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There was also a consideration that the 
law needed more analysis, certainly something that 
wa 3 mentioned. 

The FBI was saying the Neutrality Act, 
and I was saying, "I don't know. I don't know." 

I asked, "Is this a country that we're 
at peace with," and even if it is, it might 
violate the Neutrality Act. 

Do we really want to start prosecuting 
a bunc'h of people because they heeded the call of 
the President of the United States, and they aight 
not like it, and say the President of the United 
States has publically said these things, when the 
Congress said we are not going to support them-- 

The fact is, the President of the 
United States said that, so I was troubled on the 
legal level as well. 

Q. Is it fair to say that you spoke out 
in-- against issuing grand jury subpoenas at that 
stage? 

A. Yes, I did. 

I was certainly one of the leaders in 
that, and Dick Gregorie joined me in that. 

Q. Can you characterize the positions of 
the-- any of the other people. Ana Barnett, Mr. 



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Feldman or Mr. Kellner, either 




nal matter 



I 

2 or-- 

3 A. As a final matter, we all did, 

4 including JeCf Feldman-- we concluded they should 

5 all go out and do work, gather information, before 

6 we went to a grand jury, or revisit the issue, or 

7 look like we had a case that we could present to a 
grand jury . 

9 Jeff obviously came into the meeting, 

10 as hii memo indicated, with a belief that we 

11 should start the grand jury, but at the end of the 

12 meeting, he agreed with us. 

13 Leon Kellner, for a good part of the 

14 meeting, as I recall, sat and listened, as me, 

15 Dick and Jeff did most of the talking, and it was 

16 only toward the end-- that's when he started 

17 asking general questions about what do we need the 

18 grand jury for, that we can't do-- we can do 

19 without it, and that kind of thing, or can we do 

20 without it. 

21 I recall Ana Barnett didn't say much, 

22 except for the-- at the end, to express her 

23 agreement that there's no reason to go to a grand 

24 jury now . 

25 I'm sure you're aware of her background 



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is mainly in civil, and it's comnon for her to 
listen to-- when people like myself and Dick 
Gregorie are in the room, rather than take the 
initiative. 

Q. At that meeting, was there any 
discussion about the political sensitivity of the 
case, either as a local matter, that is in the 
Miami community, or as a national matter, 
vis-a-vis, the Contra issue? 

A. Nothing I recall. 

Only-- the only thing I recall, is some 
discussion about that one sentence in the 
memorandum that had to deal with the FBI's reasons 
for opening a grand jury, and it was set Eorth-- 
were one of the reasons they gave was as put in 
the memo, first it would dispell claims that the 
Department of Justice has not aggressively pursued 
this matter. 

Q. What was the discussion on that point? 

A. I believe the discussion consisted of 
one sentence from Leon Kellner, to the effect 
that, "I'm not going to open a grand jury, because 
it might look better to someone. That is not what 
we open grand juries for." 

Q. Is there anything else significant 



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about that meeting that you can recall? 

A. Well, at the end of the meeting, we 
were all in agreement, and JeEf was going to make 
changes in the memo accordingly, and whatever 
other minor changes they may have discussed during 



Q. Do you recall receiving a re-draft from 
Mr. Feldman in which he did, in fact, changes the 
conclusion? 

A'. Yes. 

Q. Do you recall approximately when you 
used that? 

A. Well, using the Jeff Feldman chronology 
to refresh my recollection, it had to be sometime 
at or after May 22nd. 

Q. Did you receive it, if you recall, 
directly from Mr. Feldman, or from Mr. Kellner? 

A. I received it from Mr. Kellner. 

Q. Did you have any discussion with him or 
did he indicate to you anything at the time he 
gave you that memorandum? 

A. I don't know if it was either right 
then or after I had had a chance to look at it. 

We had a discussion that we don't have 
enough-- the ^^^^r^ j<5^ iji^x..<Uaf "s sed , and 



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1 briefly why we disagree with the FBI. 

2 We just said, "Well, we're not going to 

3 do it now," and they said we ought to, and they 

4 were giving their reasons, and we thought whether 

5 he ought to give them our reasons £or saying not 

6 now . 

7 Q. Did you discuss with Mr. Kellner that 

8 or around that time, how the conclusion was going 

9 to be modified, or who would go about modifying 

10 the conclusion? 

11 A. He asked me to set forth the reasons. 

12 Q. Was there any reason expressed or any 

13 reason, for giving Mr. Feldman the memo again and 

14 letting him do that? 

15 A. I don't recall a discussion of it. 

16 In my own mind, the reason was obvious. 

17 Q. Why was that? 

18 A. That most of the reasons that had been 

19 advanced, which ultimately led to agreement in the 

20 meeting, were the ones advanced by myself and Dick 

21 Gregorie, and so one oC us would be in the best 

22 position to easily set it forth, whereas if it was 

23 given back to Jeff Feldman, he probably would have 

24 to cone back to us again to discuss it. 

25 Q. Now, as I understand it, this document 

' -»jissm;r 



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was done in a word processing pool of some kind. 
A. Yes. 

Q. And does each of the assistants or each 
of the attorneys in the office, have their own 
word processing file, and by file, I don't mean 
paper in the hard sense, but in the computer 
sense? 

A. Can you repeat that question? 
Q. Yes. 

My question is-- really what I'« 
getting at, is how one goes about changing a 
document that another person has drafted or 
submitting to the word processing pool. 

A. Give it back to that person's 
secretary . 

She would have the disk or-- excuse me, 
or the secretary to bring the disk down to your 
secretary . 

Q. Now, the question is, do you recall 
which of those you did in this case? 
A. I don ' t . 

I know from-- from having heard Jeff 
Feldman say it in the past few months, that it 
apparently went back to his secretary, but I have 
no independent recollection o^-i^*-- 



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Q, Did you do the modifications-- did you j 
run your changes by Jeff Feldman at any time? | 

A. From my independent recollection, I 
don't know . 

Apparently, from having heard from Jeff 
Feldman, again, for the past few months, I did 
not . 

Q. Has that a conscious decision on your 

part? 

A. No. 

I assumed I would give the changes back 
to him or gave them to Leon Kellner, first, that 
before it went out, Jeff Feldman would look at 
it. 

Q. But you knew-- you, yourself, didn't 
take any steps to present it to Jeff before 
presenting it back to Mr. Kellner? 
A. No. 

Q. Let's look at the changes that actually 
were made in the memorandum. 

The first one of consequence that I 
noticed is a reference to the Crista suit and its 
filing. 

A. Yes. 

Q. That was added as a footnote? 



172 West Flag 



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A. yes. 

That had come up, and the memo hadn't 
come up, and it was relevant, so I figured just to 
put it in . 

Q- By this time, you didn't-- you didn't 
change the date of the memo, so you're referring 
to a memo that was dated May 14th, related to an 
event that took place on May 30th? 

A. Obviously, I see that (indicating). 
Anyone worried about-- I read about 
that in some publications, trying to make 
significance over the fact the date wasn't 
changed, but when you try to put in it may 30th, 
you're not trying to conceal the fact the 
memorandum was finalized May 14th. 

Q. My question is, the allegations have 
been made in some of the press, that the memo was 
intentionally backdated. 

A. No. 

Q- So it was originally back dated the 
14th, and it changed? 

A. Hhen it went through some of-- when it 
went through some of the drafts? 

A. As we discussed earlier, there was the 
first memorandum, I believe of April I8th, and the 



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1 second draft was dated May 14th, and it's 

2 subsequent revisions-- the date just wasn't 

3 c ha nged . 

4 Q. But there was the May 14th draft that 

5 came out on May 14th; is that correct? 

6 A. Yes . 

7 Q. And that recommended a grand jury be 

8 convened or-- 

9 A. Right, 

10 Q. And the meeting on Hay 20th, there was 

11 another memo that was also dated the 14th, which 

12 Mr. Feldman wrote, "He didn't have a 

13 s traighf orward enough conclusion or complete 

14 enough conclusion from Mr. Kellner's standpoint." 

15 Is that correct? 

16 A. Correct. 

17 Q. And then there is a third version dated 

18 May 14th, which had your conclusion, and it had 

19 your reference to the CristK^- 

20 A. Correct. 

21 Q. To your knowledge, was the date on the 

22 cover sheet ever brought up to date and then 

23 changed back, or was it just an oversight in not 

24 updating the cover sheet? 

25 A. No. It's clearly an oversight. 



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JACK B^ftyifiiyibnUI^Ff'IISViNC. 

172 West Flaaler Street. Miami. FL 33130 Mn«5i 371-153 



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Q- Let's go to the conclusion, if we 
could, where you set forth a number of reasons for 
not opening a grand jury, as you have called it. 

On the first-- do you have your 
version? 

A- Yes. The first says, "Opening a grand 
jury at this point would be a fishing expedition". 
Is that correct? 

A. Yes. 

Q.. What did you mean by a fishing 
expeditious? 

A. What I meant by that, in a very 
shorthand fashion-- it was all that we had talked 
about in terms of why we didn't really know where 
we were going yet. 

It wasn't focused yet, we didn't know 
who we were looking at, in terms of agents and who 
were witnesses, and so on and so forth. 

At that time I didn't feel and Dick 
Gregorie didn't feel that we should open up an 
investigation, a grand jury investigation yet. 

Q. Now, that was one of the reasons that 
were discussed at the May 20th meetirfg? 

A. That was discussed, and I know that 
Jeff Feldman is unhai 



mmm " 



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language, but the concept I was trying to convey 
was one which we al] agreed upon. 

Q. Now, the second reason, I believe, or 
the second notable reason I saw, was that grand 
jury subpoenas aren't needed for records of gun 
sales, because ATF can obtain those; is that 
correct? 

A. Right. 

Q. Was there any discussion of postponing 
the AXF requests, or was that soaething to be done 
immediately in lieu of a grand jury subpoena? 

A. No. 

The discussion was in terms of, "Well, 
we can go out and get that right now." 

Q. There was no intention or discussion of 
postponing that as well? 

A. Not at all. 

Q, The next reason I noted was that bank 
records subpeonas might sweep within their ambit, 
innocent contributors. 

Is that a correct paraphrasing of one 
of the reasons you had for-- 

A. One of the reasons, yes. 

Q. What do you mean by that? 

A. Well, my understanding was that the 



JACK 



...yticussiFmc 



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Cuban organizations made public appeals, held Eund 
raisers, and that all these patriotic 
anti-Communist Cubans in the community, were 
very-- who are very sympathetic to such appeals, 
would come and give their 510, S25, and that 
seemed to be what we were going to get by looking 
for the contributors, a list of a large number of 
people who made small contributions. 

I didn't see what we needed with that, 
why we wanted i t . 

I must say sitting here a year later, 
we also never had, then-- we never had then, and 
as far as I know, don't have now, any information 
that they received funds from the U.S. Government 
or any of those private organizations that were 
acting for the U.S. Governnent, channeling funds, 
so that possibility never entered into our 
discussions, and certainly never crossed my mind 
at the time. 

Q. Has this factor that we've been talking 
about, that is the innocent contributors factor, 
one of the things discussed at the May 20th 
meeting? 

A. Yes, it was, in terms of both innocent 
contributors and in terms of what was it going to 



JACK 



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show us . What for? 

We didn't want to know Corbo's 
associates in some academic sense, but we wanted 
to know who are the people who made up the 
conspirators, if what Corbo is doing is a crime, 
and just knowing who responded to those funds 
rates raising appeals, wasn't going to advance 
that inquiry at all. 

I thought it was looking down the wrong 
pa thwa-y . 

My suggestion was that we want to try 
to identification people that may be conspiring 
with Corbo, go out and interview the people that, 
you know, are associated with Corbo, and ask them 
who is associated in this circle, and take it that 
way . 

Q. You also indicated that once subpoenas 
are issued, that the governaent can expect delays, 
quote, unquote, in getting the records back. 

That is, in fact, an argument for 
issuing the subpoenas early, as opposed to-- 
A. Yes , it is . 

My thinking was when I wrote that-- 
'This is our chance to pursue Corbo's associates. 
Are we going to be sitting on our hands for two 



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INC. 



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months, at least, and then we'll get a whole pile 
of bank records with all of these names and have 
to sift through it to see if-- who we should be 
focusing." 

It didn't make sense to be sitting back 
and pursuing it this way, but pursuing who Corbo's 
associate are, by bank records-- I didn't think 
that was the way. 

That's what I meant by the sentence. 

0. You are also aware that if and when the 
point came that-- when records were needed, that 
there would be additional delays in obtaining 
those records? 

A. What you say is true. 

I can't say that I really thought in 
those terms at the time. 

I was really focusing on the fact that 
I didn't see what those particular bank records 
would do for us . 

Q. You took those memorandum, had the 
changes made, and then you submitted them to Mr. 
Kellner? 

A. Yes. 

Q. You did not, at the same time, submit a 
copy to Mr. Feldraan, as best you can recall; is 



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that right. - 

A . That's correct . 

Q. Were you surprised to find out that Mr. 
Kellner sent the meiBorandum into Justice, without 
running it by Mr. Feldman? 

A. Yes. 

Q. It was your expectation that in the 
normal course of events, he would run this by Mr. 
Feldman? 

A.. It certainly was my assumption that he 
would do that. 

Q. Has he aware-- when you gave them the 
memorandum, that you had not yet run this by 
Jeff-- is that fair? 

A. I don't recall whether I did or did not 
say that. 

As best I can recall, I just took this 
copy with my-- the changes I had made, and said, 
"How is this," and I took it and then I later 
learned that he had sent it out. 

Q. How much later? Do you recall? 

A. I believe he must have done it either 
the day-- must have done it either the day he sent 
it out or a few-- within a day or two that he had 
it . 



UNCLASSIFIED 



JACK BESONER & ASSOCIATES, INC. 



305 



64 I 
Q. Now ."^a ll^nri 1^%!^ V#i*l*a V e receded 
into insignificance, had the memo ultimately not 
leaked . 

Do you now have any idea how the 
memorandum made its way into the public domain? 
A . I don ' t know . 

At. various times I have heard rumors 
that it was in different peoples' hands. 

I don't know whether that's true, or 
what is true or what isn't true. 

Q. In whose hands are you referring to? 
A. I heard at one time that some of the-- 
Senator Kerry had the memo. 

I heard that another time, that Senator 
Luger had the memo. 

I heard one time the Washington Times 
had the memorandum. 

Q. Has this before the publishing of the 
leaks or the story? 
A, Well, I-- 

Q. Was this before the memo appeared in 
the press or was this retrospect! vely-- 

A. It was well before the memo appeared in 
the pres s . 

Q. From whom did you hear that those 



JACK BE 



TUNC. 



306 



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65 



people had gotten this memo? 

A. Or may have them? 

Q. Or may have them. 

A. Generally, if not always, it was Ana 
Barnett relating something she had heard. 

Q. Do you know what her source for that 
was? 

A. No. No, but now, just to repeat it, 
many months after I had heard this, I heard that 
there t>ad been a mass mailing to newspapers all 
over the country, and that was when we saw the 
whole memo coming out in the press, and everything 
like that, but that was many months after the 
three that we told you about. 

Q. After you redrafted the memo, what was 
your next contact with the case? 

A. Well, pulled aside, perhaps, occasional 
word here or there about what's going on, things 
of no particular significance. 

The next thing that stands out in my 
mind was that some time in August-- and I don't 
remember when in August-- hearing from Leon 
Kellner that he had received a package from John 
Hull, and that it was making all kind of 
allegations against Senator Kerry, and it looked 



^. ..-if^-ilCUSSIHa 



NC . 

n r -^ns ^ ^71- 



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M N ClA SS ro 



66 



like John Hull was on his counterattack, and why 
is he sending it to me, what does he think I'm 
going to do with it. 

Q. What did Mr. Kellner decide to do with 
that material ? 

A. Hell, I know he was planning to make 
sure the Justice Department in Washington had a 
full set, and was fully aware of this. 

In terras of investigating Senator Kerry 
or anything like that, that was just dismissed out 
of hand. 

We weren't going to get involved in 
that. 

Q. Did you have any discussion with Mr. 
Kellner at that point about the political 
implications of the affidavits, or investigating 
those affidavits? 

A. I don't recall anything nore than what 
I just indicated. 

Q. At or about that tiwe, I believe, the 
chronology will reflect that Mr. Feldman gave Mr. 
Kellner a copy of the prosecution meaorandum that 
came over froa the FBI. 

Did you ever see that prosecution 
memorandum? 



JACK BES 



r^Mc 



308 



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I saw it sitting on Kelincr's desk. 

Q. Was it ever given to you to read? 

A . No . 

Q. Those are often two different 
questions, whether it has been given to you or-- 

A. No. It was never given to me to read, 
and I never read it. 

Q. After the late August incident with the 
affidavits, what was your next contact with the 
case? 

A. There may have been just occasional 
discussions with Ana Barnett, and Leon Kellner, 
and as articles would start to appear in the 
press, presenting us in an unfavorable light or 
suggesting things, but putting that aside, I don't 
recall any further involvement in the case until 
this meeting that is indicated on the Feldman 
chronology of December 2nd of 1986. 

Q. Let's back up a little bit. 

Do you recall a spate of publicity 
around the time of Mr. Garcia's sentencing, about 
alleged procrastination or delay in the handling 
of the case? 

A. I guess the best way I can answer that. 



JACK BESO 
172 West Flaaler Str^ 



Mnt; \ ->-i 




m, 



68 



is I recall a spate oC unflattering articles about 

us over a period of time, and continuing on up to 

the present . 

I don't particularly associate a flurry 

of activity around the Garcia sentencing. 

Q. Do you remember when the C-123 carrying | 

Mr. Hasenfuss was shot down? i 

A. Yes. i 

Q. That was in early October of 1986. I 
Did you discuss with anyone in this 

office, the Hasenfuss crash, in the context of the 

Costa investigation? 

I 
A. No. ! 

In those discussions-- if those 
discussions took place, I was not a part of it. '■ 

In early October, I was extremely busy 
on other matters, and I had nothing to do with the ' 
Costa case at that point. j 

Q> Mr. Feldraan indicates in his i 

chronology-- may indicate in his chronology, and ! 
if not, the record does, that Mr. Gregorie signed 
off on the prosecution memo in early November, and i 
Mr. Feldman began-- he gave Mr. Feldman the 
go-ahead to go ahead with the grand jury in early 



November . 



UNCUSSIFIFn 



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Were you involved in those discussions 
at all? 

A. No. 

After I had handled those matters that 
I was working on full-time in the last of 
September, early October period, I left for an 
extended vacation, from mid-October to 
mid-November, and although I called in to the 
office on many occasions, there was no discussion 
about 'the Costa investigation. 

Q. Let me ask you a series of general 
ques t ions . 

First, have you had any contact with 
anyone out there in the department. Main Justice, 
in the Department of Justice, about the Costa 
investigation, any direct contact? 

A. No. 

Q. That would include Mark Richard or 
Steve Trot tJy^, or Jensen-- 

A. No. No-- no, with the exception of the 
people from the Office of Professional 
Responsibility who came down here maybe in March 
of 1987 to review some of the allegations that had 
been made against this office. 

Q. Did you ever have any contact with Mr. 

mini AnniffM|-|| 



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Mathis concerning the Costa case, concerning Mr. 
Garcia? 

A. No. 

Q. Did you ever have any discussions about 

this Costa investigation, with reporters or 

journalists, which is a better term? 

A. I don't believe I have. I 

I 
Q . All right . j 

A. Everyone else has, but not me. ; 

Q. How about a fellow named Murray Mass, 
W-a-s-s? 

Have you ever had any contacts with 
him? ; 

f^ No-- well, yes. He called me last week 

to take a n^ssage, and I never returned the call. 
He may have tried to reach roe earlier, 
but to the best of my recollection, I have never 
spoken to Mr. Wass. 

Q. Let me ask you in a way, what is one of ! 
the ultimate questions here. 

Did anyone in the Department of Justice 
give or receive instructions to go slow or to 
conduct this investigation in any way, other than 
in the normal course? 
A. No 



UNClASSra 



jAtK BESONEF & ASSOCIATES, iwi.. 



312 



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Q. Did anyone ever make that suggestion, 

to your knowledge? 

A. No. No, and if it happened, I would 
remember that. 

It just did not happen. 

Q. Have you spoken to Mr. Leiwant about 
the Costa matter? 

A. No, with one exception, and that was 
the-- when Mr. Liewant came back from testifying 
before' your committee, I was in Ana Barnett's 
office and he walked in and just started telling 
me what he had testified to. 

Before that, I had never discussed this 
matter with him, and the only other time I have 
talked to him about this matter was in this past 
few days, and that was because the both of us 
having been subpoened by Congressman Hughes' 
sub-co««ittee of the House. 

The committee went over the same 
subject natter as we're covering today, and I told 
the marshall, rather than him having to find three 
busy attorneys, I'll just accept service for all 
three of us, and make sure that Jeff Feldman and 
Dave Leiwant get their copies, and so I gave 
Leiwant that subpoena, and b^j^f^ha t , I had told 



JACK 



rubpoena, a nd_ before^ ha 

ymssMB) . 



NC, 



313 



larshall ■ 



Mmm 



had heard from the marshall that 



had received a subpeona for that date and time, 
and then he asked me in the later conversation, 
was this going to be public testimony or 
deposition. 

I'm not sure, was my answer, and who 
pays, and how does it get paid, and I said we just 
put in our travel authorizations like we ordinar^^y 
do, and that's been the extent of the discussion. 

Q. You know I'm sure that Mr. Leiwant's 
recollectioin of the April 4th meeting, differs at 
least in one significant degree from yours, and 
that is the allegation that there was a telephone 
communication or suggestion or instruction from 
someone at Main Justice to go slow in the 
investigation . 

A. My understanding is that what Dave 
Leiwant actually told you, is quite different, 
froB what I was reading about in the press, what 
he allegedly said. 

Q. I understand, and I'm not asking you to 
vouch for other people or really even characterize 
his tes t imony . 

What I really wanted-- wanted to make 
that statement a predicate for my next question. 



JllASSn 



JACK BVIiVUm^VII'^Ffi^ ^N<=- 
1^7 2_ Wes^,,.»riagler Street, Miami. FL 33130 f305> 371-1537 



314 



[iNcussm 



Are you aware of any motivation that Mr 
Leiwant might have to misrepresent anything that 
occurred at that meeting, be it political 
motivation, a personal motivation, anything in 
that category at all? 

A. I don't know of anything. 

That's all I can say, that I'm 
convinced that he's mistaken, and-- and it has to 
be an honest mistake, that he-- having walked into 
the middle of something and not being familiar 
with the case, misunderstood something that was 
going on, something that was being said, or else 
there is some motivation that I have no knowledge 
of . 

MR. MCGOUGH: That covers my questions. 
BY MR. GENZMAN: 

Q. I have just a few. 

Regarding that meeting on April 4, 
1986, do you recall how long the meeting lasted? 

A. It was a fairly long meeting, and a-- I 
would say it had to be several hours. 
How many, I couldn't say. 
Q. And you do not recall Mr. Leiwant's 



presence at that meetin 



iCUSSlFIED 



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315 



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Q. There was someone who came in with a 
computer printout; is that correct? 

A. That's right. 

I do remember that, but I-- I know 
for-- I know now that it was Leiwant, but I just 
don't remember of my own, independent 
recollection . 

Q. Do you recall how long this person was 
present? 

Ai. No. I don't have the same recollection 
that other people have of the 20 minutes or 
whatever . 

I just doesn't recall that. 

Q. I believe you said that you recall no 
telephone calls relating to the Costa case during 
this meeting . 

A. That's correct. 

Q. If you had had-- if there had been 
received a telephone call regarding the Costa case 
during this meeting regarding the case, would you 
have remembered that, do you think? 

A. I certainly would. 

Q. I believe you said you spoke to Mr. 
Leiwant once after he was deposed. 

Could you briefly relate what 



JACK l]|llf' 



I|fEE| INC. 



316 



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statements he made 

A. As best I recall, he said, "I don't 
know uhy everyone is making a big deal about this. 
That's all that I said, was that Kellner received 
a call, and it looked like an important call, and 
after he got off the phone, he said they want him 
to go slow, but that he said it with such an 
expression on his face, that it was clear to me 
that he had no intention of paying any attention 
to that," and then he said something that struck 
me as really curious. 

He said, "I thought the call came from 
Jensen, but apparently I was mistaken." 

Despite my temptation, I resisted it, 
and didn't ask him what he meant by that, and then 
I says to him, "Dave, you know, I was in the room 
that day, and it just didn't happen," and I said, 
"I don't remember you being there. Do you 
remember me being there," and I said, "I don't 
remember you being there, but I remember being 
there when the events that we're talking about 
were happening, when the Boland Amendment was 
brought in, and we sat there discussing the Boland 
Amendment and discussing the Neutrality Act." 

That was all I can recall of the 



IIMfiK^ r ^Pffft. 



JACK 
=■ 1 an 1 A 



INC . 

30 (30 5 ) 37 1-15 3 



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conversation. 

MR. GENZMAN: Thank you very much. I 
appreciate your time. 
BY MR. MCGOUGH: 

Q. One other question. 

Do you have a date set for your 
appearance before the Hughes Committee? 
A. Yes, I do. 

It's next Thursday, the 23rd, I 
be] iev« . 

MR. MCGOUGH: Thanks. 
(Thereupon the deposition was concluded.) 



UNcussife 



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CERTIFICATE 



STATE OF FLORIDA 
COUNTY OF DADE 



I, Stan Seplin, being a Certified 
Shorthand Reporter and Notary Public in and for 
the State of Florida at Large, do hereby certify 
that I reported in shorthand the deposition of 
Lawrence Scharf; that the deponent was first duly 
sworn by me; that reading and signing of the 
deposition were waived by the deponent, and that 
the foregoing pages, numbered from 1 through 76, 
inclusive, constitute a true and correct 
transcription of ray shorthand notes of the 
depos i t ion . 

I further certify that I am not of 
counsel, I am not related to nor employed by an 
attorney to this suit, nor interested in the 
outcome thereof. 

The foregoing certification does not 
apply to any reproduction of this transcript by 
any means unless under the direct control and/or 
direction of the certifying shorthand reporter. 

IN WITNESS WHEREOF I have hereunto 
affixed my hand this 27th day ^f July, 1987. 



Stan SejUin, CSR, NOTARY 
PUBLIC AT LARGE. MY 
COMMISSION EXPIRES: 
12-25-89. 



mm m^m 



JACK BESONER & ASSOCIATES, INC. 
172 West Flagler Street, Miami, FL 33130 (305) 371-153 



319 



CR30219.0 
BRT/s jg 



UNCIASSIREO 



tj'^^ rx:~ >K7 



10 

11 

12 
13 

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CONFIDENTIAL 

SENATE SELECT COflMITTEE 

ON SECRET MILITARY ASSISTANCE TO 

IRAN AND THE NICARAGUAN OPPOSITION 

Milt M0>, ■ 



uau 



DEPOSITION OF LT. GENERAL ROBERT L. SCHWEITZER 

Washington, D. C. 
Tuesday, March 17, 1987 

Deposition of LT. GENERAL ROBERT L. SCHWEITZER, called 
for examination by the Senate Select Committee on Secret 
Military Assistance to Iran and the Nicaraguan Opposition, at 
the Senate Hart Office Building, Suite 901, at 11:00 a.m. beforf 
JOEL BREITNER, a Notary Public within and for the District of 
Columbia, when were present: 

CLARENCE H. ALBRIGHT, JR. 
MARK BELNICK 
JOHN SAXON 
CRAIG KELLOR 
LARRY EMBRY 




h:k(^0 



PiftianyDedKsffiad/RelMsedon l-^'-?2 
under previsions of E.0. 12356 
by N. Menan. NatioiMi S«wity Councfl ^-■- ^^ 



MioiMiS«wityCc 




Ace-Feder.'\ 

:u:j.i" 3-To 



RS, L\c. 



320 



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CONTENTS 

EXAMINATION 



Lt. General Robert L. Schweitzer 



by Mr. Belnick 4 

by Mr. Albright 11 

by Mr. Saxon 48 

5 ]l by Mr. Albright 52 

by Mr. Saxon 85 

6 

7 



1.1 



X H I B I T S 



NUMBER IDENTIFIED 

I Exhibit 1 3 

I: 






AceTeder.^lT<eporters, Inc. 



Nation'' Mle Co>cra<t 



321 



UNCIASSIHED 



MR. RHLNrcK: Wc Ain here to trike Lustimoiiy Crnm 
UeneidJ Robert I.. S<:hwei t^^er , and X would like the lecord to 
reflect that aithomjh a subpoena was issut^d by this 
Committee, und rmtjce of deposition, to Genera] Schweitzer, 
asking tor lUs appnar.ince at 9:00 a.m. on March 20, General 
Schwejt7;er has appeared here voJuntariJy this morning to give 
testimony and, in cons icier. ition of that voluntary appearance, 
the Committee win bf; pJeasrd to withdraw the subpoena and 
notice oC depcjsition. 

Is that ricceptabJe to you, sir? 

(3KNERAL '3CHWEETZER: Tli.mk you. 

MR. BELNICK: For the lecord, let me mark as 
Exhibit 1 the subpoena and notice ot deposition to General 
Schweitzer, which we are withdrawing in consideration of his 
voluntary appearance here this morjiing. 
(Exhibit 1 identified.) 

GENERAL SCHWEITZER: I would like the record to 
reflect that had anybody asked lae to come in I would have 
been glad to do so. 



Mussra. 



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Whereupon, 

GKNKRAL ROBERT L. SCHWEITZER 
Was calliid as d witness ami, having Cirst been duly swoiii, 
was exaini neci and testified as follows: 
EXAMINATION 
BY MR. flKI.NICK: 

Q (Jenera] , it: [ cm just refer for informat i(3n 
purposes to the document request which the Committee has made 
oC you, .13 it was attached to the subpoena which has now beei\ 
witfidrawn. Exhibit 1, I understand that you were -- that you 
looked tor the documents of the type requested in the 
Committee's subpoena. Did you find any such documents? 

A Well, I knew I had nono. 

Q So you have not found -- 

A I have no documents that pertain either to your 
charter or what you are asking for, nor have I disposed of 
any, nor did I ever have any such documents in my possession. 

Q Yes, sir. You had mentioned to me when we spoke 
on the phone that you were planning to be in touch with 
Geomilitech, if possible, to see if they had certain 
documents that you believed could be helpful to the 
Committee's investigation. Do you recall that? 




Ace-Federal Reporters, Inc. 

202-347-3700 Naiionwide Coverage 800-336-6646 



UNCUSSIflED 



A Yes. 

Q Were you in touch with Georai ] i tech? 

A I dill, and thc^y h.ivfi obviously declined to provide 
them to me or to you, voJ untari .1 y . Because I made tht; c<i]J 
Saturday, immediately speakimj to you and (^ettiiicj y'^ur 
request torm, because I do think they are relevant and I 
think there are other tilings they have that would be relevant j 
or in the personal possession of Rarbara StudJey, and/or her 
son, Michael Marks. Hut they obviously declined because they | 
did not call mc back at any time, Saturday, Sunday, Monday, | 
or today. We have had .somebody in the house almost eveiy ' 
single hour, and I didn't renew the request. 

Q To whom did you speak? 

A Michael Marks, who is a graduate of a Florida law 
school and, I thought, was the best person to approach on it 
since he would appreciate both the legal propriety, 
requirements, and reasonableness of your request. 

Q Yes, sir. Marks, for the record is spelled 
M-a-r -- 

A k-s. 

Q What aie the documents. Genera], that you had in 
mind that you were seeking from Geomil i tech? 



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A Well, yod hd<l askeil me - 

Q yes. 

A -- what -- I think you have to put a fi< 



f we 



may, Eor i.his. 

Q Sviro. 

A You fidd asked ae about Georai litec.h ' s deaJlngs with 
L.itin America, arising out of the newspaper interview that 
Barbara ijtudley gave to the president of Geomilitech -- gave 
to the Washington Post, Ren Vicer and Joe Picarillo; an 
interview that appeared, 1 think, about a week ago. It was 
in that context thaL I told you th.iL during the time I was 
there at Georai li tech, fro» 1 September to 20 February, 1 
September '86, 20 February '87, th.it nothing w.»s sold, 
bartered, exchanged or provided to anybody down in Latin 
America. Not only nobody in Central America, but nobody in 
Latin America or the Caribbean Basin. In other words, there 
was no business conducted. 

I mentioned, I said, to the contrary, there were 
at least two letters that I authored, and I thi nk there ar e 
more than two, but at least two: One to peopJ e^^^^^^^^^and 
one to General Hjistillo, l:he chief of the Salvadoran Air 
Forcft, which politely deflected their interests in pur.'iuitig. 



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iiKl in the 

case of GeneraJ ni^stiJlo, to get some ddvanced jfct aircraft, 
My IrtLter-j politely deClectetl them Crom dedling with 
Geciini J j t«!ch . The reasons were -- 

Q WhtMi was this, sir? 

A The letters were last fall. Again, T was just 

there I September to 20 February, '87. 

Q Kail of "86. 




In the case of General HJSstillo, following the 
aircraft — the earthquake, I'a sorry, correction -- I 
authored a letter which X signed, saying that it was, that 
they would probably wish to use whatever scarce resources 



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they had to Lake caro ol: their earthquake vidiims and the 
earthquake needs •-- the earthquake had undoubtedly given thmn 
othm- priorities. The airciatt that GMT was otfEering to 
them, at an earJier request of GeneraJ B^stJlJo, wasn't 
scimethinq that we had -•■ that Geomiiitech had initiated iniot 
to joining them -- was a Fougamagi ster-type aircraft. That 
is also not a combat aircraft, although it could be armed. 
It is a tiainer, jet trainer. It is the ieast expensive jet 
trainer that they could possibly buy that I know oC. 

However, when I was ask<;d to follow this, I had 
two concerns. One was was it in Hie national interest of; the 
United States to do that. Tn the case of Kl Salvador, tljeir 
economy is a shambles because oC the insurgency that they 
have been fighting successfully, and their banker, really, 
certainly to all military matters, is the Defense Security 
Assistance Agency and the Assistant Secretary — Deputy 
Assistant Secretary of Defense for Latin America. At that 
time, Nestor Sanchez. 

I went over to see Nest^ Sanchez and told him 
about the initiative and asked what was the security 
interests of the United States in fit? And he told me, quite 
properly, that he could not direct 4 businessman or a 



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business company to pursue or noL to pursue anythiny, but 
they really — really, it was very clear, they rea lly wished 
we wouldr 




I think we would all wish that the world of 
Central America were such that all oL= the resources could be 
applied to meet political reforms, the economic renovation of 
the whole reyion, and social justice concerns. That 
certainly would be my personal aqt tida it 1 could ever cany 
it out. aut there is a real Communist threat down there that 
was a short time ago eating them alive, and there is still a 
continuing need for certain military items with which to 
defend themselves. In my opinion, these did not include 
further advanced jet aircraft. 

~ They h&d some Fougamagister, that's a French 

aircraft, which were being retrotritted, upgraded, repaired, 
renovated, refurbished, wh atever you wish to call it, under a 
government contract, 




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quite pi-oCrtSsion.il for Genoral aystillo to ask tor the most 
advrinrpd jet aircraft he couJd get; he's a prof essi oria J aii 
man. You want to Cly the fastest ami the hii;heat. Thai:'s .i 
professional or parochiaJ desideratum, but the objective 
realU.y is not necessarily the same. 

So we wrote that letter, and I offered those to 
you to show you -- 

Q Yes, sir. 

A -- because on another point you asked me something 
about rieomilitech — 

Q Right. 

A To show that this was not a corporation that was 
out there to make a dollar at the expense of U.S. national 
priorities, or the priorities of the country, or the 
sensitive concerns of law and ethics. 




Q General, X appreciate that. 

A That's why that is relevant. 

Q All right, sir. I appreciate that. 

I'm going to turn the examination over to 
Messrs. Albright and Saxon. Before I go I just wanted to 
note for the record that the Committee is aware of your 



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dist inguishftii career in the milil-arY dnd 



yc 



ire grdtel;uL tor 



coojieidti on and your appearance here today. (3uci , John.-" 
TdP. WITNESS: Thank you, sir. 
(Messrs. HeJnick and Embiy JeTt the depcis i t i cui . ) 

RXAMINATION 
ny MR. ALBRIGHT: 
Q (General, let's go back a little bit. I'm 
geneirtJJy f ami liar with your background, would you give us a 
bit of your --• give us your military assignment history, it' 
you wtiuld. 

A How far back do you want me to go? 
A Oh, back to 1978? 

A I think that's probably a pretty good place to 
begin, because it shows the Lack ot <!onl-.a<;t with L.itin 
America. At that time I was the chief o£ the policy bianf.h 
at SHAPE Headquarters, in Belgium, a NATO assignmei>t which I. 
held for approximately five years, serving CienciaJ Haig, who 
was then the Supreme Allied Commander tor Europe as well as 
the commander in chief for all U.S. Forces, Array, Navy, and 
Air Force, Marines, in the European Theatre. 

I left that assignment and, in 1979, became the 
director of strategy, plans, and policy in the OCfice ot the 



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Deputy ChieC ot Staff tor Operations, the OCSOPi?, it's 
crtlleci, D-C-S-O- P-S, on the Army staff, and that meant that I 

3 h.id an interfice on all joint actions. About 90 percent of 

4 the joint artJoTi;; on the Mmy staff originate in the office 

5 of the rtiieclor, strategy plans and policy, and they run, Lo 
f. use the Pentaqon term, the other 10 percent through the; joint 

sys tern . 

8 r left that assignment as a major generaJ in the 

9 December- January -- December "80, January of '81, to go to 

10 the White House as a volunteer, to serve on the National 

11 Security Council staff. I very mii<:h did not want to <jo. In 

12 fact, I came back from the initial interview to teJ 1 the 

13 Chicif of nt.iff of the Army that I would probably not be 

14 selected because I expressed the desire not to serve there, 

15 and he told me very pointedly that he would decide where I 

16 served -- where I would best serve the Army. 

17 It turned (5Ut that that was exactly the wrong 
thing to say over there. If I had expressed a salivating 

19 desire to serve on the NSC, I might have escaped the 

20 assignment. The fact I made clear I didn't want to be there 

21 turned out to be exactly what they were looking for. 

22 Q Why was it you did not want to servt; there? 

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A T wanted l;(i be with troop:?. I want.oil to sorvi» 

? with soldiers and T thought 1 had paid my dues, in oider to 

.1 do that, by my stint on the Army atal;f Eroiii ' /9 to '80, Lato 

4 '80, and that, hopefuJJy, I wouJd be given a division comindnd 

5 rather than another statf asaignmeiit in the Whitii House. I 

6 fiud worked in the Wtiit« House before as an ad hoc assignment 

7 as a lieutenant roLonoL and r had no desire to go back 

8 there. 
4 But I was the, in 1981, senior miJitaiy officer on 

LO active duty serving the President of the United States in the 

11 White House system. I was Uirectnr of the Defense Group, was 

U the title. 
l^ Tn that context, I had responsibility for all of 

14 the Department of Detense program, all of arms control, .ili 

15 of the veterans programs, the entire defense budget, and, of 

16 course, the area -- the interface with all the area 

17 problems: The Middle East, the Fa; East, Latin America were 

18 included in those. 

19 At that time there was nobody, when I first 
?.0 joined, we were waiting the arriv.il of Dr. Roger Font.iino, a 

very brilliant, good NSC Staff member who had not come aboard 
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to call i I. nxpertise -- f.»ini 1 iarity wit-.h f.atin America, hail 
primary rpspons i bi 1 i t y Cor about a month, month and a haJf 

3 toi' the Catin Ametican concerns or issues. 

4 In, I guess, about December '01, January 'flZ, f 

5 rol-.uineil to the White House - ft-oni the White House to the 

6 Department of Defense and became, at this time, again, the 

7 directof ot strate<jy plans and policy. And, as an additional 
duty, the deputy assistant to the Chief of Staff of 

9 Operations for Joint Affairs. Responsibilities were, in 

10 effect, doubled, and so was the span of control of people 

11 with whom I worked. 

12 MR. SAXON: General, ii I can ask you-- 

13 TUG WITNESS: I went tnere to become the chairman 
11 of the General Defense Hoard, just to finish the chronology, 

15 in 1983, a position I held until the summer of "86. I 

16 retired on 1 September of '06. That's the relevant points. 

17 BY MR. SAXON: 

18 Q Unless there's a typogrrtphical error, there 

19 appears to be a gap on your resumo of career service from 

20 November of "81, when you left the |^C, to January of '02. 

21 Was there a months or two there where you — 

22 A I was a special assistant to the Chief of Staff 



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1 fof Operations. Actually a gooil part at that time I was 

2 supposed to have left the Wfiite House, but the president did 

3 niDt want me to leave. I remaineii assigned there, continuing 
1 to perform duties and tasks. Nothing, incidentally, that 

5 would in any way resemble wh.it you are looking into now. 

6 Just normal staCf duties and assignments. 

7 The reason for my departure was I was asked to 

8 give a speech which had previously been cleared and used, 

9 which -- before an audience at which there were to be no 

10 journalists. I gave the speech, the journalists reported it, 

11 and in the rather Byzantine way in which decisions were made 

12 in the White House, I was told it would be better if I left. 

13 Which I was very happy to do. 

14 The secretary of state, now Mr. Alexander Haig, 

15 went to see the president to protest this. The president, he 

16 said, he had tears in his eyes but said it's too late. They 

17 have already announced it. 

18 I was nonetheless very happy to have that 

19 opportunity to leave a job I didn't want in the first place. 

20 Q you should have given that speech earlier. 

21 (Laughter.) 

22 A All the speech was, incidentally, was a projection 



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1 of the various t-.hreaLs, all of which I piojecti:d -- I'd 

2 rather say that than predicted, because there was nothing 

3 mystical about it, you just took trends, evidence, laid it 

4 out and projected what was going to happen -- a] ] of those 

5 threats actuated. My thesis was, it was not, therefore we 

6 need a bigger defense budget or we need this or we need that, 
but rather if you do something about these threats, even 
i ncompJetely, they will not occur. 

9 I used the analogy of Heisenberg' s Law, subatomic 

10 physics, might be useful for this Committee. The law of 

11 variables. When ycu study the field, you alter it, and then 

12 predicted events do not occur. The law of variables. 

13 I think you might take some comfort in that as you 

14 struggle through this, as you described earlier to me as a 

15 "mess." And that's what I was doing. I was showing you have 

16 all these events, but if you attack them with economic, 

17 political, social reforms, apply resources modestly, you 

18 don't have to apply them totally to do it, then these — all 

19 these different threats, if they don't go away, will at least 

20 not come and eat you alive. You can defer them, stop them, 

21 prevent them. You can turn them around. 

22 It was a good talk from the standpoint of 



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intellectual content, and there was nothing unreasonable or 
hysterical or wrongful about it but they chose, because it 
got media attention which was deemed that morning In the 
White House moss to be unfavorable by the troika that then 
decided everything, it was decided I should go. 

As I said, I was happy to receive that judgment, 
hut they didn't want me to leave, so that explains most o£ 
the gap, although I think a portion of that, late December 
and early January, I served as a special assistant to the 
chief of staff, and worked and wrote the paper which is now 
the reform o£ the joint chiefs of staff, that whole new 
system that you on the Hill and the Pentagon are bringing 
forward. 

Q During your tenure in the NSC Staff, who was the 
National Security Adviser? 

A Richard Allen. 

Q And who was the military assistant to the NSC 
Adviser? 

A Initially we didn't have one. It was John 
Poindexter and they were going to bring hia — he wasi 
nominee, designee. They were going to bring him forward 
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whatever it is you want him to <lo additional that I'm iloimj, 

2 but don't mnke him come forward nciw. He had children in 

3 school, he was in Florida, I think in Pensacola if T have it 
1 right. I said there's nothing more brutaJ, cruel or 

5 unreasonable than to bring a guy forward unless you really 

6 have to have him. Since he's never done this work before, I 

7 am going to suggest to you wo cin wait until the kids aro (Siit 
of school. That was done. 

9 So I did a number of those things or they went 

10 undone. Rut Captain, I think he was Frochtis, a rear 

11 admiral, sort of a brevet promotion, John Poindexter came by 

12 my recollection May or June of '81. 

13 Q Was there .i period of overlap when Admiral 

14 Poindexter was there as military assistant and you were 

15 likewise on the NSC Staff? 

16 A Yes. He didn't replace me at all. He began doing 

17 very noainal duties. I think, in some ways, you could 

18 d«acrib« what he did as more appropriate for what an 

19 operations sergeant in one of our command and control centers 

20 would do: You know, posting maps, taking messages. He 

21 started as many people do. 

22 In fact, if you go back in history, when, I 



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I believe, he was a lieutenant colonel, ftl Haig filltnl a 

7 simiJar position iindor Henry Kissinger. He was brought in tci 

3 post maps and explain what a LP was or an OP, and what an 

\ ambush meant. He had just come back Lrom commanding in 

5 Vietnam. And they wanted more o£ a technical help, but 

6 because he was so good -- the job that, he f i IJ ed giew, the 

7 responsibilities grew to where he finally became the 

8 Assistant to the President for National Security. Somewhat 

9 as has happened to John Poindexter. 

10 Q Could you render for the Committee an opinion as 

11 to the professional competence and patriotism of Admiral 

12 Poindexter? 

13 A Right. I would like to, 

14 I found him, and it's almost humorous in the 

15 context of what I'm reading and seeing — hearing about today 

16 -- to be the most prudent of men, the most honorable ot men, 

17 and the man most unlikely to undertake any of the initiatives 

18 which he is said, in the media, to have undertaken in concert 

19 with Lieutenant Colonel Oliver North. 

20 You know, his patriotism, his dedication, his 

21 rectitude, his moral sense of propriety, of right and wrong, 

22 what you can and can't do under the law, were exti-aordinartly 




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high. I would say all ot the same Lhin<js about I.inu tonan c 
CoJone] North, and I will say more when you ask me about 

3 him. But Admiial Poindexter, there was, with respect to 

4 Admiral Poindexter, there was in my judgment, and it's a 

5 humble one and I'll show you how that judgment would change 

6 over time, I would not have ever taken as the APNS, or had I 
been the one to ask -- to recommend who this person should 

8 be, ever have given the number one graduate of Annapolis -- I 

9 didn't even know he was the number one graduate, a very 

10 humble man, he didn't put that word out to anybody -- who had 

11 a Phd in hard science -- that is not the kind of person that 

12 you need on the NSC Staff. 

13 You need somebody with expertise in broad policy, 

14 and we'll come to that when we talk about Colonel North. 

15 Q Is it your sense that Admiral Poindexter was a man 

16 who followed the chain of command and sought approval or had 

17 approval before he acted? 

18 A Yes. And 1 think that that, is one of the reasoTis 

19 that he was selected. 

20 This i .t opinion, but it's informed opinion because 

21 with the context that I have, I've heard a lot of things, 

22 that they wanted somebody who would not be threatening. 



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1 If. you look at the succession of M'N3s from 

2 Richard Allen forward, with tho one who had tht; most access 

3 to the president, was the most powerful and the most 

4 effective, in my judgment, was the second on«!, the judge, 

5 coming from State as he did and with access to tlie president, 

6 he had the ability to go in to sigh the president and did. 

7 Q You mean Judge Clark? 

8 A Judge Clark. Judge Clark not only could go in, 

9 but he would say to the president, Michael Deaver has 

10 misinformed you concerning the facts on that situation. Here 

11 are the correct facts. 

12 And he could do that without acrimony or venom or 

13 vitriol. They just had a relationship whero he could say you 

14 have not been correctly informed. Here are the correct 

15 facts. 

16 Further, Judge Clark did not consider himse}f to 

17 be a foreign policy expert. I think he was a very great 

18 one. But he always brought in the area expert and he would 

19 have the area expert make the presentation to the president 

20 so when he left — which was over contentious matters on who 

21 was responsible for what and who was going to work in the 

22 national security area and who was not, as I understand it -- 



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remember I'm not there so this is not direct knowleilije, but 

2 again informed -- Bud McFarlane, whom he brought Crom stat< 

3 to be his deputy, became the APNS. 
^ Bud McFarlane is another man whom \ have known for 

5 many years, outstanding integrity. I could nevei' believo, 

6 would never be] i eve he would ever say anything that was 

7 untrue. Incidentally I would say the same about John 

8 Pojndexter. 

9 But he was viewed, because he was not a political 

10 appointee, as nonthrea tening to the people in the White 

11 House. Therefore — 

12 Q "He," to whom are you referring now? 

13 A McFarlane. Therefore somebody you could trust. 

14 So there was aiwaya from that time forward a 

15 tendency to get somebody in there who would, as you described 

16 it, would follow the chain of command, would make 

17 recommendations, would take orders, and not be an initiator 

18 of adversarial actions in the White House system. 

19 g Let me follow, then, if I could — 

20 A I'm giving you all of this, incidentally, under my 

21 oath to the best of my knowledge and belief. I can be wrong 

22 on this, but you have asked me what I know and what I think. 



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1 With thrt cdvedL that I can be wron<3, I'm present in<j it to you 

2 as I kriow oi ufiders tand or beJieve the situation to be. 
.1 Q We undftrstand that and appreciate it. 

4 Let mc follow, jf I could, for a moment about 

5 Admiral Poindnxter. I read what you are sayiix; to suggest 

6 that he. would have difficulty telling the President of the 

7 United States ba<l news. 

8 A No. I don't think so. Not at all. I think — 

9 you know, he's a very straightforward man, and I believe — 

10 and I thank you for the question because it gives me the 

11 opportunity to show tl\e change. 

12 People have asked me to, and invited me and given 

13 me opportunities to, criticize Admiral Poindexter because of: 

14 his lack of policy expertise and background, prioi to coming 

15 to the White House. But I would tell you that's nonsense, 

16 that anybody who served there as long as he did, seven days a 

17 week, he had the benefit of a 

18 Harvard-Yale-Princeton-Berkeley-University of Chicago PhD in 

19 international relations at the behavioral level because of 

20 what he was doing, and the way he moved fron step to step, 

21 starting with humble tasks and to answering — returning 

22 phone calls, and then working the substance of the papers. I 



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I believo that l^e would present Dad news, just as I wcjuld. And 

? 1 think that he would not have hesitated to do that. 

3 Q You juxtaposed a description of Judije Claik to 

4 your description of Admiral Hoindexter and said that Judge 

5 Clark rould go into the president and say: Mike De.iviM- is 

6 giving you bad advice. Would Admiral Poindexter go in and 

7 say: As you know, we are doing X to carry out your wishes, 

8 but you should know that the secretary of defense does not 

9 agree, or the secretary of state does not agree, or whatever.' 

10 A I believe he would. I know that when I was theie, 

11 I took -- and this will become, I think, very relevant as we 
i;> go forward because I would imagine one of your questions is 
13 going to be: How could all of this happen if it did happen? 
11 And I would tell you I don't know, because it could not have 

15 happened in I9fll, both the way Mr. Allen operated and I 

16 operated. Nobody on the NSC Staff could have called over to 

17 the Pentagon or anywhere else in the government and put into 

18 operation the things that are alleged to have been put into 

19 operation by NSC staffers. 

20 The way I operated was, I made sure that if there 

21 was an issue that I was writing on or recommending on, that 

22 the departments knew that I was working that action so there 




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were no secret initiatives. Thoy had d copy of my papef. r 

7. invitod them to tjjve me their commonts, pither 

3 telHphonioal Ly, it thei'G wasn't time -- oTten there wasn't, 

you get tasked lo do sometfii ng in literally five minutes. 

5 But, if; there was time I wcjuld get their paper and attach it 

6 to mine. 

7 Similarly, if they initiated the action and I took 
issue with it, I would give them a copy oC my cover memo that 
9 went in so tfiey would see that there was somebody on the NSC 

10 Staff who was disagreeing with it. 

11 I believe, as I think has been brought out 

12 beautifully in the Tower Report, exactly, and articul.ited it 

13 the same way, what the function of the NSC Staff is, to 
M generate options, make sure — I would express it a little 

15 differently than they did — to make sure that all hobby 

16 horses that the different agencieis and departments are 

17 determined to ride through the halls of the White House are 

18 identified as hobby horses; the advantages and disadvantages 

19 of all the options are there. Any suppressed options, 

20 because some department doesn't want a certain option to get 

21 surfaced — be surfaced together with the risks as well as 

22 the opportunities* ■ So you bring the downside and 



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opportunihiRS as well as the downside on every actlDn. 

And, as a major general in 1981, theie is no way T 
could have called over to any department and put in train the 
things that the media says Lieutenant Colonel North did. So, 
iC you ask me how could he have done it, as Mr. Belnick did 
in an informal conversation before, my answer under oath is: 
I don't know. I c.m't even inagine hoe he could have done 
it. 

Q Let me return to Admiral Poindexter. I assume you 
sat in meetings with John Poindexter while you were at the 
NSC? 



Yes. 

Was he a frequent note taker? 

Yes. 

Did he often take notes? 

Yes, yes, he did. And that was — 

Did he take lots of notes? 

That was, I would call, his learning phase. 
Remember he came in with this rather special, very 
distinguished but specialized background, and had not brought 
him into the policy arena, to my kTiowledge, and he was always 
very quiet in the meetings but he took careful notes, he 



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listened, and he was very reflective, a very retLective 
thinker, arid that was obvious in the discussions that I wcniJfl 
have with him. Clearly he was a very thought(:ul man. 

Q Do you have any information as to what his 
practice was, his personal practice, fur the care and use .ind 
treatment of his notes? 

A No. And I'm sure that it evolved over tjme. 

I had recommended, along with a Dr. Norman Bailey, 
that they install the computers. If you wish, I can talk to 
you about how I think the computers were the nail in this -- 

(2 My understanding is that came after your tenure — 

A That's right. They didn't arrive until after Bud 
MacFarland's tenure. But I tried to get them in early 
because we were doing, you know, rather, to me, in an unusual 
way, we were working with stubby pencils on taskings. And we 
needed some way to communicate back and forth more quickly j 



and to be able to get that up. But there's some 
disadvantages to that system. 

Q Can you tell us anything about the staffing of the 
NSC under Richard Allen as the Reagan Administration came 
into office? What the philosophy was, as you observed it, 
for staffing the NSC, and the kinds of people that Dick Allen 




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selected? 

A Well, I think he tried to bring in the best 
possible people lie could <jet. I think there were a certain 
amount of people from the campaiyii who they tried to find a 
place for. N(5t all oC them stayed. But who had legitimati^ 
credentials to be there, for the most part. I think there 
were some junior staECers who should not have been assigned 
there but put elsewhere in the government. And they are all, 
now, gone. 

The staff structure was to have different groups. 
I had the Defense Group. There was a foreign policy group. 
There was an economic group, an intelligence group and, I 
believe, I recall the long range planning group was formed. 

The gioups, then, reported to Richard Allen 
through two deputies. One very capable woman, Janet Colesun, 
who had been associated with Richard Allen before and with 
the caapaign; and the other, a tremendous man with great 
basic instincts and tremendous integrity and a very good man 
to work with. Admiral Nance, Rear Admiral Nance, retired. 

The way that people worked the different groups 
varied with the individuals. The man who headed, now 
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called all the people in the Foreign Policy Croup Logei.her. 
I think it was February, said this is the first meeting of 
the Foreign Policy Group. It is going to be the last. I'm 
not interested in things I don't know anything about. You do 
your own l:hing. I'm supposed to be in charge of you. T l; 
there's anything administrative, I'll pass it down, but you 
deal directly with Dick, that's Richard Mien. 

The Defense Group, I worked in a way where I said 
I need to know what you are doing. It should come through 
me. And, in no way will I stop any paper that you wish to 
send forward, you have total freedom of expression because 
you are all professionals, civilians, but I want to see what 
you are doing; and I did run the Defense Group in what I 
would consider a rational way for the types of activity we 
were in. 

We can't all be on different sheets of music and 
know that I will, if I think you are wrong, attempt to 
dissuade you. If I can't, dissuade you I'll put a covei 
memorandum on top of your paper. And I did all of those 

things. .. 

Q You said Mr. Allen chose to select people who were 

the best. There are allegations that his criteria for 




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deteiitiining "best" tended to be less in the substantive ateas 
as prevjousJy NSC advisers and numerous admi ni ntrat i ons wouJd 
have selected, ,and rather, tended to be inoro ideo loqira I . 

Did you, from your obsprvati oris , form that, 
opinion? 

A No. No. You know, I think there's a lot of 
silliness been written about that. 

Obviously everybody has some ideology. You do or 
you wouldn't be in this room. Then, you know, the caricature 
is to say ideologue. Ideologue ia bad; having a ideology or 
philosophical tramework with which you conduct your actions, 
that presumably is good because everybody has to have that. 

I think that they did have people with some very 
strong views who came in, with the hobby horse approach. But 
when they were identified, Richard Allen was the first to 
downweight their papers and assess the thinness o£ the 
action. You know, if you got too emotionally involved 
because you had some private agenda of your own or extreme 
position on a paper, he would be the first to disabuse the 
person of that idea; and* downgrade the paper from having any 
significant input. 

1 think what you have to understand about Richard 



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1 Allen is l-h.iU when he came in, you have to have, in a 

2 National Security Council, a purpose, a cJearly defined 

3 purpose. 

1 X would fee] that, in the 40-year history, there 

5 was always a clearly defined purpose for the National 

6 Security Council, until we came to that first year of the 

7 Reacjan Administration and the clearly defined purpose did not 

8 exist. Not because Richard Allen didn't know what it was or 

9 want to define it in the traditional sense, as Scowcroft and 
10 Senator Tower and former Senator Muskie do in their very good 
U report -- but the way the government was being run was by a 

12 troika, the way the White House was being run was a troika 

13 and the way the government was being run was through a 

14 cabinet system. Everybody wanted to do that and nobody 

15 really knew whether it was going to work or not. It didn't. 

16 Particularly it didn't in the handling of National 

17 Security Council affairs. But Richard Allen was loyal to the 

18 concept. He believed, and you should bring him in and let 

19 hia testify for himself on this, he believed, in my 

20 discussions with him, that eventually all this would work its 

21 way out and we would come back to the traditional way of 

22 doing things in the National Security Council staff. And I 



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1 think that now has hdppened. 

2 Q I.«;t us ask you about Colone] North. 

3 A But you can't blame it on Richard Mlon. I think 

4 it wouJd be an injvistice to him, and I'm not here as his 

5 defense counsel or eviin a personal friend. It's just an 
f) objective fact that he was givon a situation that he rcaJly 
7 didn't agree with <jr like or know, and knew was not in the 

best interests of the NSC, the president, or the national 

9 security of the — system of the United States. And he 

10 sought to change it. 

11 y Let us ask you about Colonel North. I assume he 

12 worked for you? 

13 A Yes, he did. From August until I left. 

14 Q Can you give us an informed opinion about him? 

15 A Again, here is a man who would — knew the 

16 difference between right and wrong on matters large and 

17 saall. He had a very finely developed moral sense and 

18 conscience, was very respectful of law, national law, 

19 legislative law. He had discussions on different issues on 

20 that where this cane out, who would not knowingly do, I would 

21 say. Colonel North that I knew would be incapable of doing 

22 anything that he believed was wrong, let alone anything that 



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1 he knew was wrong or in vi(5l<ition oE law. 

2 Now, if he did, then that's a different Colonel 

3 North frcjfli the one that t knew intimately durimj the time I 

4 worked with him, and continued to know in periodic contacts 

5 Crom the time I left until the time all this occurred. I 

6 have not met with him since all this began to happen. 

7 Q In your opinion, was he, .is a career military 

8 officer, was he the type of individual who would have sought 

9 and acted with approval? 

10 A Absolutely. I think, you know, he was — all the 

11 good tilings that have appeared about him, I saw. The 

12 hard-working, dedicated, patriotic, willing to exert any 

13 effort, very loyal to the president, and he understood what 

14 the president wanted to do. And he, as I, was appalled by 

15 the way the president had people working for him in the other 

16 departments who were determined to subvert his policies, to 

17 sabotage then, to leak them, to break down or work against 

18 them. 

19 For Colonel North and myself, and I think every 

20 military man that I have ever known, this is anathema. He 

21 cannot comprehend it. 

22 I worked in very close contact with the White 



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House ata£f on many items, but especially T-atin America at 
the erid of: the Carter Administration. I did not agree with 

J many of; their positions. But it never occurred to me that r 

4 wouJd oppose, other than in argument in meetings in the wells 

5 - - the situation room --- what they were doing. And once the 

6 decision was made, I loyally went out and executed it even 

7 though I thought it wasn't what we ought to be doing. 
I think the interesting thing was at the end of 

9 the Carter Administration, those people, David Aaron, Bob 

10 Pastor, moved to the right oC ae as to what we should be 

11 doing in Latin America. They became so exasperated with 

12 Fidel Castro and the betrayal of their very good, noble 
1.3 aspirations and their idealism and their efforts to achieve 

14 peace and stability and economic development in the area that 

15 they wanted to do a lot more than I thought was doable or 

16 reasonable. 

17 Rut the point is that, if you are a serving civil 

18 servant or military officer assigned to the White House or 

19 anywhere in the government, you argue your case, the decision 

20 is made and then you loyally carry out those orders, unless 

21 you know that it is in contravention of law, the law of 

22 Congress, or there is something morally wrong. At which time 



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you either resi(jn or you appeal throuijh tlie system to an 
inspector genera], to a orabudsraan, and now we have all kinds 
oC ways to do that. You know, you can appeal -- you write 
your Congressman. 

Q General, you have got a long and distinguished 
military career. You have seen a lot olf senior officers and 
a Jot of junior officers, do you consider yourself a pretty 
good judge of people in the military? 

A I think so. 

Q In light of that, and in light of what you've said 
about Colonel North, as we read the Tower Commission report, 
as we read and hear and observe things that have unfoJded in 
the last few months, we see descriptions of Colonel North as 
a loose cannon, a free agent, a national security 
entrepreneur; how does that fit with your impression of him? 

A That's not the Colonel North I knew. He could 
have metamcrphosized into that, but if he did, he did it 
without my knowledge and, as I would tell you at some point 
in these proceedings — maybe now is as good a time as any. 
Although I had infrequent but sustained contact with him from 
the time I left to the 5th of October, I never once huard him 
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these things that dre bein<; revealed. 

There couJd have been a number of reasons. One, 
that he would know I would oppose all of this. I certainly 
would have if, indeed, it happened. Two, it -- if it was 
close hold, then he shouldn't discuss it with tne and he 
didn't. And, three, it may never have happened, or at Joast 
happened the way it is being laid out. 

Rut I wouJd not beJieve that he was any of those; 
things. In tact, I have one evaluation that I would 
respectfully offer on the Tower Report, which I think is an 
outstanding document by three very great men. 

I disagree with only two things in it. One, I 
think they were too hard on Secretary Shultz and Secretary 
Weinberger. I know a great deal about the Defense side oC 
it. Less about the State. But I know in the Defense 
Department, that once the Holand Amendment was passed — 
footnote to that, everybody talks about the Boland Amendment, 
there's bicameral legislation that went beyond the Boland 
Amendment and really replaced it, about what you could and 
couldn't do in Central America. And, in the Defense 
Department, the two driving motives were to make sure we 
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1 anything that would involvu us in any way in contiaven ti(5n qF 

2 that law. 

3 So when they talk of Secretary Weinberger 

4 ilistancing himselE — and I can't believe that he didn't 

5 represent himself very strongly, as being opposed to some oC 

6 those thinga -- that's what he had to do to comply with the 

7 law. Because if he kept being involved in it, then he 
wouldn't be in compliance with the law. 

9| I know the Pentagon would not allow discussions on 

10 the Contras or what they were doing, except in the 

11 intelligence community, the reporting of it. So I think they 

12 were unfairly hard on Secretary Weinberger and Secretary 

13 Shultz, with all due respect to a great report by three great 

14 men. 

l^i But on the other point, which is more relevant to 

16 your line of questioning, I believe they are wrong 

17 fundamentally when they say the system didn't fail, the 

18 people did. 

1*> No. The system failed. It didn't fail, and I 

20 think this was the point of Brent Scowcroft, because I can 

21 see his pen throughout that paper, I admire him very much. 

22 The point he was trying to make was we don't need new 




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1 leg^3la^.ion. And I helievH that very deeply. We dc5n ' t need 

2 a new law. Wo don't noed Congressional direction of how to 

3 run White House staEfi or the NSC. We did need laws initially 

4 and they are adequate, effective and they work. 

5 Where the system broke down, if it did break down, 

6 was within the White House system itself. And it can be 

7 refined or corrected, as I believe the newest APNS, 

8 Mr. Carlucci, is doing. I know hin very well. 

9 I think that's a very important point in my humble 

10 but still professional judgment. The system did fail. 

11 BY MR. ALBRIGHT: 

12 Q You stated earlier that Colonel North had 

13 identified, and that you had identified, agencies that were 

14 trying to contravene the president's -- specifically 

15 President Reagan's foreign policy initiatives. What agencies 
Ifi or what particular people were those? 

17 K Well, I really would like not to have to 

18 identify. I will if you insist. 

19 Q Well, let's identify agencies first. 

20 A Well, I think that, if I can just speak to it 

21 generally, there were people in the government who, out of 

22 conscience, but I think wrongfully formed, took a great deal 



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ol: pride, a (jreat deal <5f pleasure in subs t i tutintj their 
judgment for the president's judgment in order to subvert fiis 
policies. Where I never ran into a military man who would do 
triis, tind perhaps tfiere are some, I found some of the 
civilians would do this because they felt that they were 
morally justified in doing it. 

What that is for me is that's substituting ray 
judgment for the judgment of a system and the president whom 
I'm supposed to be loyally serving. And I'm saying that 
because I'm right and he's wrong, I can now reveal very 
sensitive classilried information, which happened time after 
time. I can ambush programs before they are developed by 
going to the New York Times or the Washington Post with the 
outline of a very sensitive classified proposal that is in 
embryonic fashion, in order to get it out in the press so 
everybody will throw stones at it and kill it before it can 
ever get off the ground, get legs, move around or be fleshed 
out to be a meaningCuJ program. 

I think this is unconscionable. It's wrong. It's 
in violation of law because it always involved, in my area, 
national security policy, not talking about other departments 
or agencies, would involve very sensitive classified 



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1 ineormation. So, not only is it disloyal but it's against 

2 the law. 

3 I don't, know if your Committee is going to go into 

4 it, but I think somehow some committee ot Congress has got to 
b find a solution. to the fact that we are, as a government — 

6 I've now watched it over four administration^ — incapable of 

7 making effective foreign policy because of this growing 

8 tendency to take sensitive information, because you oppose 

9 the policy that's being proposed, even before it is decided 

10 on, and reveal it to somebody in the press in order to kill 

11 the idea in the pass. 

12 I think we've really got a serious problem. You 

13 can't make effective foreign policy in public. It's a 

14 contradiction in terms. 

15 MR. ALHRIGHT: F.et's go off the record. 

16 (Recess . ) 

17 BY MR. ALBRIGHT: 

18 Q Let's move to General Singlaub. When did you 

19 first meet him? 

20 A He's a legendary guy, you know. World War II, 

21 seceded to the Central Intelligence Agency about probably 20 

22 years ago, hasn't worked with them since, but is really a 



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Homeric Eiyure in the sense of all Uhis coun ter insuryoncy 
stuff; former president of the WorJd Anti -Coromuni st League, 
just turned it over, dnd chair oE the Council for Freedom. 
You are going to see him tomorrow or somebody here is, 
bec.iustt he thinks he's coining here to talk to you. 

Q Where is he now, do you know? 

A In Denver doing his income tax, which I shall do 
when I leave here. Then he's going back to the Philippines, 
where he is working on a project that has nothing to do with 
counterinsurgency . Can we go off the record? 
MR. ALBRIGHT: Yes. 
(Discussion off the record.) 
BY MR. ALBRIGHT: 

Q Just give us a brief background, if you will, on 
what we've just discussed, your association, historical 
association with General Singlaub? 

A I net hin in Vietnaa when he worked on special 
operations. I had many tours over there. Only in the 
context of professional military work, but briefly I saw him 
at least twice on my two Pentagon tours, maybe three times, 
and heard his appeal that we be alert and resourceful and do 
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ootnmun i sm . Tliere is ri ;jubv«rsive warbrting Couijhi. In m.iny 
countries and the free world is Josing that war, that's 
rt3S»!nti4lly his niessagR, because we die not doing the right 
things . 

T happen to agree with that. ( listened to him, 
and r saw there were two meetings in the White H(juse that 
Rirhard Allen asked me to receive him. He also met with 
Richard Allen and <3thor people over there, maybe Ed Meese, I 
don't remember. I think it was Ed Meese, on other 
occasions. Perhaps three or four in '81. I don't know what 
was discussed at those meetings. I would assume it was the 
same thing. 

He told me we needed desperately a strategy for 
Latin America. I told him in January, February oC '81 that 
one was being developed. Indeed we had put one forward, 
first draft, 16th of February. And I've had no -- I have had 
a great deal of contact with him in this venture that he is 
engaged in in the Philippines, which has nothing to do with 
making coups, as the disinformation program has said, 
counterinsurgency programs to help the Philippine Army; but 
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1 Q fou say that (Jeneral Singlaub is piesently in 

2 Denver. Is he qoiny to be here tomorrow? 

1 A Yes. To come to this Committer, he thinks. 

A Q AJ ] right. Dci you know where he's pJanninq on 

5 staying in Washington? 

6 A No. Hilt if you wi 1 ] give me your phone number, I 

7 know he'll be in contact with me as soon a.s he comes in, anii 

8 I'lJ tell him how to get hold of you. He will probably stay 

9 at Wainwright Hall, at Fort Myers, it: there's an available 

10 room because it's secure and convenient. 

11 Q All right. I'll get you my number as soon as we 

12 finish here. 

13 A Yes. I gathered from our earlier conversation you 

14 weren't expecting him. He's certainly expecting to c<jme 

15 here. That's why he's coming into town. 

16 Q A lot of us are handling different areas. 

17 A I understand. 

18 Q Let's talk about Geomilitech just a bit. What is 

19 your present relationship with Geomilitech? 

20 A None. I resigned — 

21 Q What is the historical? 

22 A On the 20th of February. 




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I Q Why did you resign? 

7. A Ts it necessary to go into thcit? 

3 Q Personal? 

4 AT would f;ay matters of principle, integrity. Not 

5 mine. Theirs. And I left them for that reason. Rut not 

6 anything that involves your Committee or your investigation. 

7 IC it were (*ven remotely connected to it I would tell you. 

8 Q All right. Give us some — 

9 A It's not a personality conflict. 

10 Q Give us some historical background. You joined 

11 Geomilitech as an adviser? 

12 A No. I was supposed to be the executive vice 

13 president, and I really did not think that I was. I think 

14 that was a title I was given, but I didn't function as an 

15 executive vice president. That was one of the reasons that t 

16 resigned. Rut I did learn while I was there, and it was 

17 stated — whether it's true or not, you would have to obtain 

18 from Barbara Studley, not acting as Geomilitech but as 

19 Barbara Studley, that she gave $100,000 in services, air 

20 fares, her personal travel, but contributed at least that 

21 much, and General Singlaub told me that's true, she did, to 

22 arranging for a shipment of arms, which she has revealed in a 



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l| prpss intfirviow <iboiit a week or two ago in the Washington 

I 

?l Post. 

3 That wdS during thf time that thir legislation unr. 

^\ in effect. Go that would put it back about 'ns, but it 

si preceded 1 he time I was with the company. And 1 never snw or 

6 found any rec<3rds in Ciles that pertained to that action, bur 

7 I know she has them at the house. 

Bi Q \in you discussing now the ' H5 shipment — 

9 A Yes. 

10 Q — that went — 

11 A Offshore. 

,2 Q -- offshore, into a Honduran corporation there? 

13 A Right. 

14 Q And to a Swiss bank account? 

15 A Right. 

16 Q I wanted to talk about that. 

17 A I really don't know anything except little 

18 snatches of conversation. What I could give you could be 

19 misleading. 

20 Q But she would know — 

21 A There's one very relevant point which I hope she 

22 has the perspicacity to tell you about 



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the shipper, I i.hink i t ' s ^^^^^^^^^^^ I rouLd be wrong 
the namf-!, when he wds asked to undertake this sfiipment -- ht 
was thi; former -- did the right thing. 

Q I,et nic ask you, how do you spe 




He went to see -- this is his story, but I believF 
him because he's, again, a high integrity guy -- went to see 
the tJnii.ed States District Attorney in Washington and said: 
X have been asked to undertake this shipment. Is it legal? 

The (J.'o. District Attorney researched the law, at 
that time it was the Roland Amendment, we didn't have, as T 
understand it, the bicameral legislation -- and said I see 
nothing illegal in this. I have been told that this 
particular man, whose name I never heard, stepped down, 

transferred or left -- T believe he left the government, went 

I 
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1 shipment, say a month ayo, six weeks a<jo, and lo ami behold, 

2 the man remembered. 90 percent of the time he wouldn't or 
^ would say he didn't, because it wouldn't be convenient to aay 

4 T remember you coming in and talking about it. Fle'd say I 

5 remember we t.ilked, but I wouldn't remember telling yo\i it 

6 was okay. He said I do remember telling you it was all 

7 right. 
Then this man, former district attorney, went into 

9 his office and researched the files and found a MFR he wrote 

10 that recounted his conversation, said there was nothing 

11 Illegal in the shipment. 

12 If that's true, all of these things I have just 

13 told you are true, and I have no direct knowledge that they 

14 are, then I would think that's a very powerful defense for 

15 General Singlaub and Barbara Studley, whatever they do, 

16 offshore to offshore, without anything coming to the United 

17 States. 

18 I know that Barbara Studley has repeatedly 

19 asserted that she never made a dime, indeed donated money, 

20 and I believe that. I believe that. 

21 (Discussion off the record.) 
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BY MR. SAXON: 
Q Wduld her involvement in that sliipmcnt have been 
at the request ol;, direction ot, instruction of: (5enor.il 
Singlaub? 

A c:ei tai 111 y not direction or instruction. f'ossibJy 
the req<jest, but R^rhara St;uiiley ran a radicj talk show in 
Miami, and her background in this was, in the way she met 
General Singlaub, is I undorstanil it, she made a trip to 
Central America, to KJ Salvador. She was appalled at the 
plight of the retugees, not Contras, ruEugees. 

She came back and collected -- put out a radio 
appeal and medical ijO(5ds poured into her house. She; .ind her 
son and others sorted them out, clicicked dates to be sure they 
were .still valid and gocjd things, and then said now what do i: 
do with this? 

And called I.ucy Taft, who was in the Depart ment ol 
Defense then. She's now running AID. Lucy said, "Contact 
General Singlaub." So Barbara Studley contacted Geno/al 
Singlaub, whom she didn't know, I think talked to him Eor 
months over the telephone before she ever saw him, and 
arranged this humanitarian shipment, totally legal, to 
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association wiLli General Sinijlaub. 
?. That's before — that haul took place before she 

3 eo fined CiMT. 

4 HY MR. ALBRIGHT: 

5 Q '."ihe formed GMT herself; is that correct? 

6 A Yes. She had a vision to form it. 

7 Q Mhon you say a vision, what do you mean? 

8 A Sir, I leave that to you. 

9 Q But those are her words? 

10 A I talk an awful lot to God and I go to mass every 

11 day. I havi; received no direct communications back. SO 

1/ yeais of talking to God. Hut I believe that anybody who says 

13 they did, believes, at least, they did. And had some kind of 

lA an experience. You would have to get from her why she formed 

15 GMT — divine mission. 

16 Q Other than as being a Miami talk show host and 

17 what you have related so tar, what other qualifications did 

18 she have, other than the vision, to form it and run this 

19 operation? 

20 A Well, she had a background in business management, 

21 she said, involving real estate development. But narrowly 

22 speaking, she didn't have any qualifications to undertake 



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I this work. And I. (3 l-.he bpst o£ my knowledge, she haj nuf. Jiinde 

p! (Uic dol)r)/ (loiny Lhi.i work. Partly because she wi ) I not de,i 1 

3 with [ran or f.ibya or any oC the countries that the linitiid 

1! States dors (uit .<;\ippc)rt with foreign policy. And sfii' has 

'i; turned ilown what would be very lut:rative cjEfers to do ih,it. 

6| Never would enter hei head. 
7| I have too. T was on a trip out in tlie Pacific 

81 nnd I was approached by some good people. Orientals who -- 

i 

9 businessmen -- who were under no laws or strictures, who g.ive 

10| me a list of pcigt? after page after page, starting with 
^^^^^^^^^^^^^^H:; o who 

12 be. The client's name was blank, but they said they'd tirll 

13 me, and I handed i.he thing back. 

14 They said there's millions of dollars of profit in 

15 it. T saiil I wouldn't rate if there are hundreds of 

16 millions, I can tell who the client is, and it turned out it 

17 was Iran. Take it back, we wouldn't touch it with .i barge 

18 pole. 

19 Barbara did not engage in any of those activitifs 

20 and never would. 

21 Q This approach was in your capacity with 

22 Ceomilitech? 



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\ With GMT. The only time thai .inybody ever came up 

to rnt- and asked me to do it and it was a business -■ 
businessmen who were jiiat -- just approached me in a hotel 
and asked me, T don't think they even knew if T was with 
Geomi li tech, but knew who I was, and aaked iC I could obtain 
aJJ these arms. They had an immediate customer for them. 

Q You were with Geomilii.ech Erom September I oC "86 
to February ?0 of 'O'/; is that correct? 



^ 

Q 

you do? 



Yea, sir. 

What did you do? What was your title and what did 



A Executive vice president, I testified. 

Q What did you do as exe<:utive vice president? 

A Well, T did the business of the company, which was 
essentially bringing together parties who wanted things and 
with people who could supply things, kind of a broker. And 
offering consulting. 

I think probably most of what I did in time was 
broad range consulting on policy and other issues. 

Q Was this a salaried position? 

A Yes. No commissions or dividends, althougli maybe 
that wotild have happened. 



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1 R¥ MR. SAXON: 

?. Q What kijid of things were we talking about? 

3 ^ Kssentidily military technology, but not all .itms 

4 by any mtrans . We would certainly consider arras, the company 

5 would certainly have considered arms shipments. Rut, ag.iin, 

6 you know, with very strict parameters. Is it JegaiV And T 

7 added, is it in the policy interests ot the receiving 

8 country, to the other parameter, which was is it iji the 

9 policy interests oC the IJnitucl States to do it? 

10 So, if they were asked to undertake something they 

11 would have done so, but only iC H seemeil to meet legal .ind 

12 ethical standards, so they didn't do any bu.<?iness. Bticause 

13 nothing that they were asked to d(j did or nothing that w.is 
il proposed could be fitted in the parameters. 

15 BY MR. ALBRIGHT: 

16 Q How would you go about determining -- 

17 A This was not a sloazy arms merchant. 

18 Q How would you go about determining whether or not 

19 an action was legal? 

20 A That's a good question. Because you can corrfctly 

21 say to any former ofticial oC the United States government 
2?. that you don't know what tho national security policy is of 



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the United States, what T did Wds I worked on my b^r kground 
of what T knt'W was the policy. The academic backqrourid T 
have had in in tern.i tiona I relations, which included teaching 
the subject at the university level, and in the declared 
public policy oP the United States. 

So, tiad we been approached by somebody i n the 
White House or elsewliere in the government to undertake arras 
to Iran, even though they said, whoever they were, speaking 
speculatively now, would have said, this is in the national 
interests of the United States, I would have turned it down. 
And iC the company had taken it, t would have left the 
company at that point. I don't think they would have. 

Q Hut you didn't seek counsel oC attorneys, did you? 

A Oh, yen. See, I said earlier in my testimony, if 
you will recall, on the very Cirst questions from 
Mr. Relnick, that my first approach to any proposition at 
all, whether it was an initiative that I thought of or one 
that was suggested to us or an old case that they had that I 
was asked to pick up and see it T could revivify it or carry 
it on -- was to make the rounds of the government. United 
States government at the policy level, to determine if thi:.- 
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had any objertiond to it. 

So in two cases C cited, the Department of Defense: 
otficiala said we r.an't ask you not to do it. W<i can't tell 
you not to do it. And we don't. Bvit we sure hope you don't, 

5 because it's ijoiiuj to ijive us a lot oC problems. 

6 Q Undeir stood. 

7 A You have every right to do that. 
And once I knew that it wasn't in their interests, 

9 as they perceived it, or wasn't good lior the country as they 
10 perceived it, I put the thing either on a back burner or 
U killed it. 

12 you can see what a yre.it businessman I was. 

13 Q John Carbaugh was associated with GMT? 

14 A Not to my knowledge, ever. If he was, that's 

15 unknown to me. I have heard of his name. I may even have 

16 spoken to hi« once or twice years ago, but he never appeared 

17 in the offices. His name was nevor mentioned. T never saw 

18 it in any of the company papers, so that's a new one on me. 

19 John Carbaugh, I think even he wouldn't object to 

20 my saying he i s a strong conservative, an ideological 

21 ccjnservative. He would take pleasure in the title. But ho 

22 didn't have any input to the company while I was with it oi , 




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\ Cor that matl.er, any previcjus period. If he did it's unknown 

2 to 

3 Generrti fonglauh was not an officer or an official 

4 o1; the company. r think he gave Barbara advice early on, 
free. He didn't t<»ke money for it. 

6 Q (5oiiiy, now, to the summer of 1985 shipment of arms 

7 whicfi we were discuss: ny earlier, do you know the name of tlic 

8 Panamanian corporation 
A No. 

10 Q Do yo>i know the Swiss bank account name or nvimber? 

1 A No. r may have heard it. 

12 Q Do you know the bank? 

13 A I may have heard it ami I might have even have 

14 seen i t on a piece of paper there, but I don't -- do not 

15 honestly remember seeing it or hearing it, and in any case I 

16 don't know. 

17 Q Including the name of the bank? 

18 K No. But there was a bank, there was a Panamanian 

19 company. That I know. 

20 BY MR. SAXON; 

21 Q And you do not have in your possession any 
22 



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\ No, sit, t tlon.'t. Nor are th«re in t\\c. riLf*s, 

becdiise I se<irc:hed them at GMT. See -- any such aocuiiicnts. 

r was called by Tom Kds«H I rom the Waihin<;con 
Post back i ri Deccmbtr arul denied this vehemently. Then he 
said, but. is It possible it was done before you came? 

So T wc-nt through aJ J ttie tiles and theie was no 
evidence ot such -in action. And it would be consistent with 
Barbdia's statement: I did this as Barbara Studley, not as 
GMT. 

RY MR. ALBRIGHT: 
Q The arms were shipped un a Greek Creiyhter. Is 
that the freighter owned byl 

\ I would think so, but 1 don't know so. I really 

have no good knowledge of any of this. 

Q What do you know about the shipment being met by c 
Delia Miko? 

A There is a memo which I did see, which she turned 
over, I believe, to Colonel North before I came, which laid 
out the nefarious dealings of Delia Miko. 

Delia Miko, everything that I know about him, 
a^^^^^^^^^^^Hperson who -- 
Q Let's stop there so I can get everything 



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straight. "She" heiiuj Qaibara .Shudley? 

A Rfirbara Studley. 

Q Turiiftil over this memo to North, you i.hink? 

A I think there was a memo that, she turned over to 
OLiver North. 

Q Why did she turn that over? 

A Because it spoke of corruption, at least 
circumstantially, of wrongdoing, of overpricing, of selling 
to the freedom fighters or the Contras, as some call them, 
goods that had been donated; of selling poor equipment at 
over prices and so on. She had a sense of moral 
riqhteoiisTie.ss that I think honestly would be supported by the 
facts. 

Q How did she happen to contact North? Or did North 
contact her? 

A No, no, she would have made the contact. Well , I 
don't know. I have to correct that. T don't know. I would 
think that the contacts would have come from her or through, 
you know, from her to General Singlaub and then (Jeneral 
Singlaub to North. I do know that General Singlaub, back to 
an earlier question also relevant here, complained to me that 
he had been barred from the White House because of thi.«! 



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leyisidtion. 

T kriciw he told me on one occasion thdt he was 
ralkiny to the liiirtctor ov. i.h« Centtal In te) I i^encH A(jen(:y, 
o(. whom much ill will lias been written on this subjfrct , Lh.it 
stiVHi-al timers he ;5aiil: .Idi:t<, if you inenLlon Nic.iraqiM one 
morf time I'm goint) to pul you out -- throw you out of this 
office. 

So there was evidence, you know, spontaneously 
(jiven to me before any of these events, that the director of 
the CentJdl TnteJ 1 i cjence Agency was trying very scrupulously 
to avoid any involvement in supplying arms to the Coiitras, 
and I can't juxtapose those statements to you -- to his old 
fiiend. General Singlaub, he was iL one time! 




Q You were told this by General Singlaub? 

A By General Singlaub, but it was a spontaneous 
exclanation, and General Singlaub, as you aie going to find, 
is the most honest man you will ever talk to. He wouldn't 
have told me that if it wasn't true. He wouldn't have told 
me that he couldn't go into the White Houae to talk to Ollif 
North. And why, because of the law? 

See, (General Singlaub was very overt and veiy 



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open. He was makiny :jp«ec:hes, that he was ;;einiing 
humani t di ian things. Arcording to Harbaia StudU-y, I nRvei 
saw it., hfi i>veii made speeches about thi; arm shipments i.o 
groups. He didn't do anything secretly. Ho was very open 
about raising money i.o lielp the Creedom Highters, and yet lif 
was told by Case 




ind whenever he 
would mention Nicaragua, General Singlaub told ne in 
exasperation, he told me: Jack, if you bring that up one 
more time, I'll throw you out oC this oCfice. 

Q Implicit in that was that there was something 
being discu.-ssed that was, it not illegal, improper? 

A No. No. He just wanted to talk about Nicaragua. 
Say, Hill, we've got to do something about Nicaragua, I don't 
want to hear about that. We are not going to talk about 
that. If you do I'll throw you out oE here. And the reason 
was the law. And I know that it was because oC the law that 
Colonel North wouldn't see him Cor, I think, a very 
protracted period, maybe a year. Nobody in the White House 
would talk to him. Recause he was the proponent Cor direct 
aid to the Contras . 



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How yoii tit that in with all of: these levelations, 
I can't explain it. I cari't do it. I can't help you. 

Q The next question is -- 

A Hut X believe it's true. 

Q It Harbara Studley knew to go directly to Coloiiel 
North regarding matter.s -- 

A I don't think she's ever been in the White House. 
So, you know, I want to be very careful. I would believe 
that her memo was transmitted through General Singlaub. And 
I took, T think the first day I was there, took an envelope 
or a letter to the White House which may have contained that 
memo. 

Q My question is do you know how everything sot-med 

to instantly go to Colonel North when it dealt with arms to 
Central America? 

A Well, he was the officer who was most attentive to 
working the problem in Central America. I think that waa 
known throughout the interagency arena. But I don't think 
there was anything from my point of view, there was nothing 
sinister or wrong or we are going to North because he's 
managing the effort. I didn't think that when I went over 
there in September. T went to see him. 



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Ml of: my conf^ci: wi t-.h Colonoi Nori:h ya-j , hptn'n 
normal NSC StrtfTiT doing normal NSC S-ta;f/ work. You monitor 
the .ireas oC your rospons ibi 1 Uy , he; had all hhe <:ovei(-. 
actions, you write l.hp memos, propose the .irtions, keep 
everybody i. nFotiiied ai\d I'oord i na ted . I had no idoa th.iL l\e 
had money, funds, Swiss bank accounts, was manayi ny 
operations or actin<j .is an operator. And T would say Eor th(= 
record, if he was, that was a mistake in the White House, 
bec.mse nol)o<iy in the NSC Staff on my watch, when T was therf 
working part-time as a .lieutenant colonel, or today, has tht- 
cap.ibility to run operations. Nor- ij the NSC Staff or any 
place in the White House the correct locus for national 
security or other types of oper.itvons -- cjven intelligence 
operations. 

There is always a pJace. It's always an 
appropriate situation -- there always can be an appropti.i t<; 
situation when somebody from the White House; should be 
■issioned to go out and talk to somebody because thoy won't 
listen to the State Department people. 

(jenerai Walters and I were far more effective in 

tel lingl 




han anybody inside the 



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state DepaiLincnt, which he wouidn't listen to or talk to. 
f. In areas of the world where you have people on the 

3 NSC fitatf who have special connections or relationships with 

4 the people (rom prior service, such as Jeff Kemp did in the 

5 Middle Kast, the best p<>rs(5n to put on a plane to send a 

6 message from the president would be the NSC Staffer. Hut 

7 when r was there we always did that in coordination with thi^ 
affected agencies, always with State, and I can't think of a 

9 time when a trip was undertaken without a State Department 

10 representative going. 

11 Hut some countries evorybody, in every 
.2 bureaucracy, wants to hear it from the top. Tn somo 
IJ countries they will only take it i:rom the top or they won't 
.4 believe the message that is being communicated, or you won't 

15 have the effect you want. 

16 So, I distinguish between missions like this, 

17 which should be secret as opposed to covert. Covert sugge.sts 

18 you are operating. But secret because you can't conduct 

19 successful diplomacy publicly, in most cases. 

20 Q I guess ray question more is, everyone, whene-ver 

21 anything camft up inside the White House, outside tho White 

22 House, everyone knew that the matter should go directly to 




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Colonel North. 

A Well, thdf s not t r\ie in my case because- f nlwrjys 
-- I contacted a complex of peopU». I contactecl i hi: p<>opU> 
who were the assislants for Latin America, so that wouU) bo 
Ray nurkghi^r*- . Jack F.ifelman, and a thiid assi 
name T've now Corqotten, as weJ I asl 
Cornier C.l^ otVici-.c who was on the NSC Staff, and Colonel 
North. 

In other woids, you touched all the bases, you do 
it here all the time, normal statrf coordination. You <jo to 
evpry committee that is working your problem. 

Q All riyht. f.et ' s move on, then, tol 

A That's the one that I can't fathom where you have 
an interest in him. I'd love for somebody in this building 
to take an interest in this case, but he has nothing to do 
with this situation. I'll tell you all I know about him. 

Q Let me just ask some questions. 

How did you get to know him,^^^^^^^^^^H 



A T first met liira on my first trip to Latin Americ;: 



1979-I9fl0,l 



.saw it as the linclipin of a 



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strategy, it w.is Lhf> Carter Admi nis tr.i t i on , .md they had a 
very yuoii hun<in rights rerorrt. There wan not a singJp pi-rson 
in jdi I Cor what Amnesty or anybody else would have said w.is 
a hujnan ciijhtr violation. 

Thi;y had a military regime, but the military 
regime hrid pledged free arid democratic elections, which did 
in Fact take place and led to the election later on oE 
Roberto Swa/o, the president. 

;^o I met^^^^^^^^^^^^at that time. I think he 




i 



a t(uly great man who thought regionally, and a lot 
o£ people do down in Central America. And both ol! these men 
understood that, to have peace, stability and fieedoin in the 
region, you had to have a good relationship with the United 
States. Whereas many^^^^^^^^^^^ for a whole oC 
reasons we won't go into here, hart become ariti-ll.S., mostly 
because of broken promises and failed commitments and the 
fact that they thought, after being encouraged in the John 
Kennedy period to build up counter insurgency forces and fight 
communism, they were now being criticized for having done so. 



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and very unjusf.ly, unfairly. 

^understood the larqcr issi 
realize<l l.ho United States had made a lot of; policy mistakes, 
and indeed we had down there, but were -- knew that the 
interests ofr^^^^^^fand all the re<ji<in lay with the United 
States, and wanted tci cooperate with us and did. In a tr\ily 
remarkable 




We sfiould be carefuJ about putting all this out 
into the public sector. 

Q I have to tell you, too, that our reporto/ is not 
cleared on secret or top secret stiifC. 

A I don't know if you guys are. 

Q We are. If. you are discussing code word items -- 

A I'm not going to. I'm going to do this in a 
general way, because I'm going to show you, I hope, th.it he 
isn't relevant to your investigation. 

Q Hut I am interested in the intelligence aspect. 

A Right. 

Q If theie are things that are -- any Tf.C mattc-is, 
if you will identify thera and we can discuss those later. 



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A I would havR to gcL b^ck on and r couldn't teU 
you what I remember, and uouJdri't want to i f I could, nor do 
T. think it id rR<iLly nfiireHsary to ijfit to wh.it I thint< you may 
be driving to. The riyht man to ask is General fMuJ Clorm.iri, 
who i."5 .ivailable in thn area, fcjtmer CINC Soutl\ Cour atar, i 
friend and a colleaciue who knows everything about what 

would know, and whose knowledye would exceed 
line. 

There's a CoJone.ll 




you have his name, you are probably going to cali him. He 
could give you those details and you should have a special 
session for that. 

Q Why do you identify Gorman as — 

A He was the CTNC. He was the one who put a lot of 
those programs in there and who worked so successfully with 




y Do you have any specific information about the 
intelligence role ocl 



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I ttiouaht it 



but he left 



A Is that wher 
was later -- I know it was later. 

Q It was later wher 
i-.o be assigned as 

MR. KELI.OR: 

THF, WITNESS: Sol 



He was extradited, as you know, by very fiine U.S. 
Assistant District Attorney, 





judijment, was a man who was in i.lie 
»#rong place at the wrong time. Others have said this, 
including people in the government who knew him. People in 
the State nepartment. He's incapable of committing a crime, 
let alone an assassination of a president. 




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fhat he had takf-n 



yreal: risks a I: Ll>e iiactitlcp ol. his itareer, because ihete was 
<i )i)t of opposition lo his ui.Niiigness to coopt^ra Le with I tie 
Unitftd SLdlies, and I felt thai, the United States owed him 
something for that. Not interfprence in the case, in the 
criminal case, but once it h.id run its course, to show him 
clemc^ncy oi put in some m.itters of mitigation or 
exteiiii.i tion. ) did that in my te:; i. imony . 

The Judge was impressed, asked if I was speaking 
tor the executive branch. I said absolutely not, I'm 
speaking for myself. 

The Judge was indignant. He f eJ t that the 
executive branch sliould step forward and bring in these 
natters, and he gave a sentence which he told us,^^^^^^^^H 
^^^|and myself, was designed to give the executive branch an 
opportunity to intervene. 

He delayed when he had a report for confinement 
and he toJd us he set it up so he could go in one day in the 
morning and come out in the afternoon if somebody in the 



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United StaLe^s would I i t: t a hdnti. 

<antfed him cind wanted to debrief him u nd 
uited 1.0 work wil.h him hecause he knew so murli,| 




o I: his <;! 



il knowledge of the tlucal.. 

district attcirney, came up here in 
search, like .i Diogenes, in search of somebody who said this 
man is important, .ind the people at State said he wasn't. r 
think that was wrong. I think it was unconscionable. They 
were so afraid that we'd get tarnished by standing up for 
this guy after the fact that nobody would C(5me Coiwatd to say 
he'.': really a good man, which people at State Department 
privately told me he was, people who workoii with him daily 




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Everybody agreed that he was worthy. In fact, 1 
was told after I testiPiRd l.hrtL .1 lot ot people who admired 
your moral courage bcrcause they thought bad things would 
happen to you if. you went down thtMe and did that, including 
officials in the government. But nobody would come fo/waid 
institutionally and take a stand. And I think partly, and 
I'm sympathetic to this, partly it's the heinous c.rSnn: of 
assassinatlon^^^^^^^H We've a 
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in recent, memory, i-and ida l:es dm! one prpsiilenh, who wt^re 
complptf'ly t.iken out by dSSussins. So nobody w<-ints (o st.ini 
up IS d i-h-irai; t-.er wilnpss Lor somebody accused -- wlio pl(!d 
yuilty U) dD risjrissi n.it i on plot. 

Hut you have to <jo beyond ttiat to look at the m.in 
the degree of ma] ice that he- h.id and didn't have, and more 
importantly, his lelationship to the rinited States. 

Tn no case did Colonel North direct th*t that be 
done. r think he wa.s one o(: those, like Ray n>iAo.h i i r t ' 5 
office, who were properJy working to get somt; kind oC an 
intervention. ^nd again T want I" stress a proper 
i nt ervt-nt ion. 

Nobody proposed that we keep him from being tried 
Q Did you talk tc^^^^Hbelfore or after the 
sentencing? 

A I spoke to him after, at the time. 
Q What was his Feeling? Did he think he was going 
to spend any time in jail? 

A Oh, t don't know. I tlUnk he was very shaken by 
everything that was happening. 

Q Did he tell you that there l>ad been any offers on 
behalf of anyone in I he government to -- 



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I A No, ait. No, sir. I l.hmk h<; ihonqht. he- w.ij 

P (joino to (JO t(i jrti). That WdS 1 he impression Ihrtt T uoL. Ht- 

1| was a very l-Hrirtul, sU-iken man beFo[<.> and aflfir. I ilon'n 

41 think ho ,it jny time mi(iimi/:e<i the seiiousneiis of hit; 

Sj situaLion ami at no l.ime did he l.hink t.hah thi:i was -- in 

61 fart, thdt's why T wont down there. I had jii;:t b«:en operatcii 

on. They sawed ofC I. his wrist bone, removed a pieco nt metal 
8| .ind romo -- 1 think Lhey removed metaJiic fragments but tfiey 

9| -- the seejuelae from Vietnam wounds, the day aftiir I had come 

10 out of the hospital, T was in aqony, had a fower, had to kt:ep 

my arm up to keep the pain trom kiioc:kin(i me to my knei's, and 
2 T went down there because I reali od the ;;ituation was 

li desperate. So ilid he. And there war^n't - was nothinc; beinij 

14 done for him. 

15 flo, far -- my understand! ny is that 
in the situation, far from anyb<5dy m.ikincj any pi 
offers, nobody was doing anything. Wt; wont down at our own 
expense. 

Q This incident or this ma tt er , ^^^^^^^H raised a 
70 lot of hackles in both the Department ot Justice, State -- 

21 A I'm unaware of it if it did. 

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going ilown to feut-. lEy? 
?\ A Oh, yes. Bf^caiise I reported -- I w.i;; on .ictivc 

II duly. I reported thai. I was. And I. here was i l.iwyci from 

tho Deprtrtment of nrfensc who accompanied us down there. 
S Q Who wdJ fhrif.^ 

61 A ^;c)ine yovititj captain ovrf there. But he's assicinfl 

71 to Dep.irtment oL DeCense. So t.diry (Barrett, who 

coi nci dentd 1 ly was my lawyer when I was in NSC, wovi]d be the 
one who c(juld te L t you who he was. Hut I would deny, it it 
lOl raised hackles, nobody -- it sfiouldn't fiave. We do this all 
II; the lime, it" .somebody ij -- 

12' Q X don't mean necessarily your testifying. The 

l3i^^^^^^Hincidei\t, hi;5 arrest and whiM.her or not people "came t. 
L4| hxa rescue" tor lack of a better phrase -- 

15 \ It .should have raised harkles. T aaw no 

16 indication of anything but apathy and indifference to him. 

17 Q Who did you talk to before going down to lesi.ity.^ 
A The people in the Department of Defense, the -- 

19 you know, the officials I contacted, I don't lecall i hem aU 

20 to make sure that everybody knew T was going. T contact rd 

21 prejs people -- ' 

22 Q People do you recall in DOD? 



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A IL would iust be the routine dopd i" I mt^n I s , pcopl" 
in public fiffdira, bc-cdusc- there oouJd be unfa vor.ib 1 p prers 
i:(jverai;e on iL. ThR people in t-.ho d.isisr.ant. 3c<:rpi.4tY ■>£ 
1! defense's officp tar latin America, arid roost i itipor t.jn t 1 y iru- 
51 General Counsel 'j ortice. And jnybody ordeied nio noL lo ao, 
6i T would have obeyed that order, even though I would hnve 

thouijht it w.is un teasondble and unfair. Out it would have 
8[ certdinly been a lawful order. And the same tfiinq was tr\ie 
9| of! Colonel Pino, who has an exchange offrirei- at State. 
10| Nobody told us we couldn't go. Nobody ericouraged us to yo 

II and nobody toid us wh.it to say th'te; we went, and nobody 
121 criticized us there we came back. 
Jl I think the whole aftan -■- but see, that's why ii 

14! is not even relevant to your Committee, or your 
IS| investigation, as I understand it. The wliole aEfair reelect:! 

16 very badly cm the United States, .ind there are some very bad 

17 consequences because the lesson we have taught to, no t only 
la th« 

19 throughout the region, and fui'ther scjuth, is: Oo not 

20 cooperate with the United States. Tf you do they will not 

21 only abandon you, but they will throw y(ju into jail in the 

22 United States, even aftc 




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Q Why dte you Sdying iliat? Thai. \ .-, gHlfiiiy to t-hi- 
pcii nt . 

Why do you s^y cooperaLion with the Unitert '." t ■» 1 1 

A HeiMu:;ft ihai. 's whal. he had rlono. 

() Yc>M ine.jri c-ciopcrtt t i on y 

A III whdL respect -- but what (lo.-!S l.his h.ive i .) rt< 

with Itdn, tJie ConLrrts s nd dU of that? [ know of no 

coimecLiun wi th i t. 

Q 




(niscussion off the record.) 
ny MR. AI. BRIGHT: 
Q Let 'a qo t)ack on the rocord and let me svin 




)u were not inferrinij or 
referring to any governinent , U.S. cjovernrtiont involvement ir 
the matters to which he pied guilty? 

A Oh, no, sir. Theie was absolutely none. None. 

Q r just wanted to clarify that. 

A Rverybody in the United States Government wovild 
dbhof and condemn, and nohody would in any way condoi\f> any 



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eftort to remove?, by -in^ ine^n;- 
prorr-ss, rt sitting president cifJ 

Q 'I'tiere have Ijeen sper u la I: i Dn;; , and i.hiii 1 .; lujihim, 

secret, tti.it t hi" U.S. governinerit wds bctii nd prirt of Lfiis 
plot, ttidl. it WAJ not a pli)L to kill tti«?l 

|, it wrtS A plot set up by Ihe fjC)V(?r rimen t tci s.ive the 
'rom aijUciss in.i t ion , ttiereby maklny the U.S. 
cjovernment look qooti . 

A Thrtt's too ny^.antine for even me nnd I took five 

years ot Greek. 

y So Ltiis is one of the ;ress reports. 

\ No. 

Q Let me go down the 3 i j: 1 <ind let ine see if you 

talked to any ot these people pritjr to testifyim; on behaK: 

Colonel North? 

A Yes, I did. Rut onJy to to teJJ him I was qoinq. 

I didn't discuss -- well, I told him, I jaid someljoily ha.-; iiot 

to step up to save this guy from going to jail, because ttie 

poli>;y conseiiuences are going to be extreme. 

Q What was Colonel North's response? 

\ Me aijreed. 



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Q Dili you aak liim why he wa;! nol. rloiiKj .loineihinq? 

rt Nci . Recause I i rnp 1 ic i tj y knew. You know, since 
nobody in l.hs (government waa c;ointj to :i tep fotw-iril, in .in 
orricial wi-iy, iL w.is left to people who were in the 
qovernment to (jo ilown as i ndi v idua is it" they choje to do so. 
and I wouldn't have recommended that to anybody, because you 
would be saci i F ic: i nq yout" career, maybe your pension. 

Q Was tfiere any discussion with Colonel North about 
any intervention -- 

A I couldn't have slept with myself if I didn't go 
-- any ili scusj i on with Ccslonel Notih? 

Q About intervention t h<i I he had taken prior to the 
time you spoke with him or i.hat hi- would take later? 

A T asked him to try to intervene, try to gt;t the 
system to interveiie. We always stressed to do it in a 
proper, legal way. 

Q Understood. And when T say intervene, I mean in ; 
legal way. 

A T want you to understand that. We did not want 
the charges to go away. We di dn't wan t^^^^^Bto be 
exonerated from anything that^^^^^^^^^H coul d prove he 
diii. We wanteil justice i.o run i t;i cours* 



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•eve L\ii 
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ ihen he 
"T5 ijood m.iii wiih no prior rorurd, when he did no L ini.end tr 
dsscissi n.iLe wi Lh d bullet or otherwise thi 
And r neod i.o insei I. somel.h i nc; i 

Yoii hrtve to understand the peculiar mt^nlaliiy of 
Ipeople and I. he way Lhey have r.oupj ; it's violeni 
plan, lots ut bold talk, and almost no execution. For 
example -- por i>xempl<5 -- there was a coup down theie called 
"coup con musica." All day long ttie loudspeakers played 
inusii:, classical and popular music, ajid n<jt a shot was finvi 
and trie whole goverment fell, everybody went in exile, wont 
away, not a shot was fired. It's t he^^^^^^Happroach . 
They are a very pacific people. They are not a violent- 
people. Almost the opposite oE El Salvador. 

In this thing you had a man, you know, wlio covild 
attend meetii)<;s to do what Cor us would bii just absolutely 
heinous, terrible, violent. You would put the guy in jail 
right away. R<it ilown there it's just not the same thing at 
all and T tried -- I knew that, and I knew that abciut^^^^^H 
and knew that about^^^^^^^^^^Hpeople, and tried to convey 
that. I think I did in my testimony. 



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Q Wh.il. ibniif. Ailmir^l iJcj i ndex ter, iii<l you spe.ik wi.h 

h i in before cjoi ny f 

A Absolutely not. And I had no knowledge, then or 
MOW, l.hdt he (-;ven knew -jbouL it or cated. 

Q Whrt t dtxut General Giirman? 

A Yi?n, [ ;ipoke i-.o Ceiierdl Horman and put Geiiuial 
Gorman i ti touch wi th^^^^^^^^^H. And General Gorman talked 
to the district ai.tornfiy. The district attorney came to 
Washington to t/ y to find somebody who would give him a 
rea;5on not even to try the m.iii or, y(ju know, to not press tor 
confinement. I think he was willing, even willing to not 
pre.ss tlie case. And none ot us w.ini.ed to go that f.ir but he 
couldn't find anybody who would speak up for him. 

Gener.il Germ. in spoke to him. I think what it w.is, 
Icame to my quarters at Fort McNair, arranged a 
jshone call and then tcj allow the privilege ot the 
communicatiun T left the whi ch^^^^^^^^^^Hspoke to 
General Gorman. So I don't know -what passed ber^Jeen the two 
men. T do know that General Gorman felt very strongly tfial. 
he shouldn't go to jail, you know. Cor all the right 
reasons . 

Jvist as we take one of our soldiers and not 



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li exeiMjtrt rhe coiuinemenL bec-tuse of I. he initigai:ion or 

I 
?\ extern 

31 Q Did ilfMierctl Gorman LelJ you cinythinu cibciut 

\\ -- let me chdrxje i.hai.. Did General (ioiman neil ^o\i Hnyi.hin.j 

iboiiL intervention -- 

\ No. 

() -- on his part? 

h No. 

Q For 

101 A No, noneT In fact, I didn't think he madC' any. ! 

Ill Lhink that -- he was 'in<3l-.her o(: I iioje who di^plored the r.)i:t 

21 it was happf ni no but did not do rinything. 

IJl Now, maybe he did, but [ don ' L know. ^lld he did 

w h y^^^^^^^^^l s h o u I d 

Ibi reasons tor mitigation and extenu.iLion were. r think rhert> 

J61 _was a tacit understanding, among all of us who fact 

different things, of what this man had done to assist thi- 

18 United States. 

19 And, remember, because this may appear in a publ 

20 record, and you have to always watch that secondary and 

21 tertiary audience out there 
2?. of the (Inited States. He wa.-^n't a puppet. He wasn' 



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somebody who :;old out. his counKry to help hhe Unil.ed '.t I.Ai;e:5 . 
Not at all. 

He was, rather, a man of vision who undorstood 
Lhat the only w.iy you are (joinij to have peare ami st.ibiHi.y 
in Centra J America was in a cooperative process with I he 
rinited Stales. And a lot of people down there don't 
understand that today. 

Q What about Claridge? Did you speak with Claridge? 

A Never. T know him well. Never spoke with him at 
all about any of this, about anything involving the Contras. 

Q At Department of: Ju;jti<;?, did you speak to anyone? 

A No. 

Q You didn't speak to Ti c. t or RaveA? 

A No, sir, I didn' t. 

Q At Department of State did you speak to anybody? 

A I think Colonel North did. I think he spoke to 
Trott^or — either spoke or wrote to Trotfc And T think he 
told me this later. 

Q In what context did he tell you this? 

A Whether we depUsred everything that happeiieil, I 

think -- T do iera(;mber. Somebody in tlie system, some; ribbon 
clerk, had the authority to assign him to a specific plac« nt 



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incdrceraLiDM. And I. his Imli vidii.i I , [ ' ve h<-;aiil the name, w.i.; 
very v i iirt i c I i ve Tor whdtpver his rprtsons, drul was picking ihi 
■ii wncnL poiiiihle prison Lo snnd^^^^H who diiln-|-. f-v«n .ipp.ik 

Ij FntjJ i sh . 

Sii And the jiuldc had spiikfn frdrn the bench .iboiit 

sr^nilimj him \.o one ol I. he more fdvor^ible pl.iCRS. There .it(! 
nti country clubs in the fcde-rrtl prison system. R\it this wa.': 
.) t ItMSt .i more hum.ine ,ind teasoiidble place, esper.ially with 
an cTfo/t. bfiiicj in.idf; to cjct tiim a parole. And it was on thj£ 
isa-ue th.il. Colonel Norl.h told me he liad to go to see Trot to 
l<(-fp him I roiii being st-nt to this very difficult pl.irf. 

Hut I know that Colonel Ninth .ind Mr. Raymond 
\^\ nu) 1(tM>\iir t were honorably and proptrly working to .see that t^i 

M| mi ticjatioii and exLen\iation matters be brought forward for 

15i consideration. X never asked them what they were doing oi 

Ibj how they were doing it. 

17 I only asked him, I said: Here aie ttie facts as 

18 know them. It you agree, would you please assist. That w.is 

19 the extent of my interventions with him at all timtrs. 
?.Q Q Did you speak to Abram.s at State? 

21 A No. 

22 Q You never spoke to him about this at a 11 :> 



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\ A No. Rut r did npedk l.o Jim Michael:! and Walker 

2 about it, just auking that something please be done properly 

3 and Uigally. Mways putting l.h<it in l:hex-e. 

4 Not, you know, as a genuflection, but because r 

5 believed that 'a th<; only w.iy l:o do it. 

6 Q What Walkc-r was that? 

7 A Hill. He' -.5, T think, another one of: the two 

8 deputy assistant secretaries to FJiiot. 

9 Q What about Ambassador McNeil. Did you ever speak 

10 to him about i t? 

11 A McNeil? No. 

12 Q Anyone at liOU that we fiaven'l discussed that you 
11 spoke with? 

14 A No. And I'm not -- I'm pretty sure that I spoke 

15 to Nester Sanchez, but iC he were to deny it I wouldn't 

16 contradict him on it. I just went through in a lequJar way 

17 like you would when you coordinate here. 

18 Q Sure. What about at the White House? Anyone that 

19 you have not — 

20 A Only the ones I mentioned. Kay Btii KeliaiT, Jack 

21 EiCelman, and Oliver North. And the.se were very short 

22 interventions on my part. They were busy and X knew thciy 



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knew t-.lie ba<M<r;rniiiid . 

MR. ilAXON: I've got a few more questinris. 

TriK WFTNKSS: nof.3 i.li^r-. t,ike rare ofi 
ir C l<ri»-w m(i[fc! I'd tx! hdppy Lu LeiJ you. 

MR. Af.HRlGHT: I uiirler J f and . Thcise are the 
nnswexE; Ltuit I Lhtuicjht I wouJd get. 

THR WTTNR.SS: Okay. I i.hink we cjot a man who 
should not be in j.iiJ in jail, and T think there are some 
very seriouj policy coii3equ«nci;s that art! goinij to haunt us 
( cir a lotiq Mme, bcrcause he is in jail and it just doesn't 
make any seii.s* 




BY MR. SAXON: 

Q You indicated you met fienera.l SingJaub when he wd 
ingaged in special operations. Whal: kind ot special 
)perations was he involved in? 

\ He had the spi^cial operations group and they <lid 



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every t-.himj . They did rill I- he i-<jilf; wotkl 

ul rtll of I hdt, rt.l 1 of 
those rjc I- i V i I. ies . He woiilil be (■.he best one It) 'lei>(:ril)e thii. 
for you, with (hie (iefeiHrice to what might still be 
r Uss liieil. 

Q Yciu know Dewey Cldiidqe. 
\ Very well. 

Q Whdt's the ridtvire of your relationship? When did 

yoii meet himV What was youf working relationship? 

A First, when he was working witti Secretary Haig. 
Do you all know him? 

MK. Ar.BHTGFlT: Not perionaUy, no. 
THR WTTNRSS: You have i.o meet him. You have to 
briny him in. Because overy time; T saw him, all 1 needed was 
the little black and white flickering ot the screen ami tho 
overhead fan and Sidney Greens tree I walking down the room, 
because he wore the big bioad Pan.ima hat, the big 
handkerchief flowing out of his pocket, and a very 
extraordinary human being, Dewey Claridge. A very .ible guy. 

So to meet him once is never to forget him. And 
he worked at State and then he went to the Agency. Of i:ours«= 
you know the position he held there, an<l T had some interface 



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with him in l.hat position wh«n I was Eirst at the Whitp Hous^ 
and then later in the Pentagon. Hut I did not ever trtlk to 
him about any nf. the matters that are now before thia 
Committee. Kver . T never siigtjested anything, nevt:r s.iw <iny 
documents, nevet heard l\ira discuss any of theso things. 
HY MR. SAXON: 

C> Do you have any personal knowledge, subsequent to 
these matters having become publi«:, of Claridge's 
i nvoJ vement? 

A None. None. In fact, that's the first time I 
heard his name. I got - don't know about you, but I've 
gotten sick of reading the media on this. I've also gotten 
to the point where even my capability for being appalled has 
been exceeded. I keep thinking, nothing worse can come out. 
The next day there is something worse. I have just stopped 
reading it. 

Then if he has been mentioned, I haven't seen it. 

Q I asked if you would answer: What was the nature 
of your working relationship with him in did you have one? 

A Only professional. In either at Nf.C, when he was 
at State, or in the Pentagon, you know, institutionally. No 
personal relationship. I didn't work any actions with him. 



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1 Q WhaL .ibout Nesl:rtr Sdnche^? 

2 A Well, I hdd a close relationship with him on 

3 .sevfMal couiiL;;. Anyl-.liiiiq that I rii<l an the dlrtM:f.or of 

■1 strategy plans and pcilicy, the deputy as:;istant ctiief- of 

5| staff for operations and joint affairs that touclied on r,.i t i n 

ft Amejica would coordinate with him. 

7l Then, when T waa the chairman of the 

H Tnt er - Amer i can r)eCense Hoard, of cou/se T had many occasions 

9 to coordinate with him. He was one of the many masters that: 

10 T had, because it's an international appointment, you don't. 

IL answer to your U.S. authorities iione^, you \\avti to answer to 

12 everybody. But T tjave very careful attention to anythiiiy he 

13 said. And I talked to him ii\ the jame way I talked l.o all 

14 the others. 

15 Q And what was the nature of this position at that 

16 time? 

17 A Deputy assistant secretary for Latin American -- 

18 Cor Latin American in DOD. 

19 When I first met him, he wasl 

P.O ^^^^^^^^^1^'^ ^-^^ Carter Administration, working with the 

?) Central Intelligence Agency. That was my first contact wi tt 

22 him. That is when T was saying in the White House, in the 



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1 situation room coming trom the Pfintagon, the places is in 

2 fJames, w<- don't even c-.are about it, we are going to lose tht* 

3 whole region, whole area, whole hemispl>erii to communism ami 

4 we are going to have: the war that's starting -- this was '79, 

5 '80, starting in Central America, we are going l.o have it on 

6 our doorstep on a 1900-ini.le border on the Rio Orandt;, because 

7 we don't evon caie. We are not even paying any attention to 

8 it. 

9 He attendtid that meeting and T outlined, I said 

10 the first step is to build up an intelligence collection 

11 effort because that will at least tell us what's going on. 
I?. He don't even know that. 

13 It had been deliberately destroyed earlier in the 

M Carter Administration. T said it will take Cive yeais to <jet 

15 a return, you know, get it completely restored. But for a 

16 year not much will happen, but at the end oC a year you'll 

17 atart to get some return. We need to do that. 

18 (Discussion oft the record.) 

19 HY MR. SAXON: 

20 Q What could you tell us about any knowledge you 

21 have of Nesl^r Sanchez's involvement in the Iran-Contra 

22 affair? 



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A My direch knowledge is he had no iiwoLvement and 

only the knciwledcje tfiaL you would get through i ntel I i qcncc 
channels or reporting. But my trlrsthand would be limited. I 

4 think more significant is the fact that the peopJ e who worUid 

5 with him, when I would ask them, i:? — after all this lifoko 



6 -- aie there going to be any problems with Nest^xV ( was 

always told none. He's clean. 
R These are the men who work with him, and I would 

9 judge that, telling me that privately, I would give that more 

10 weight than if we were in a hearing room, and maybe you heard 

n th.it. 

]? So T would believe that maybe he wasn't involved. 

3 I would also believe that he knew i gieat deal, because he 

14 should know a great deal through the reporting channels. 

Ill What he knew, as to what was being done or not done, I d<5n't 

16| know. 

17 Q In the normal course of bvisiness in doing his job 

18 would he have any reason to go to Switzerland? 

19 A To ski. r don't know why he would go to 

20 Switzerland, no. That's not the normal chartered area fen- 

21 the deputy assistant. In fact, it isn't for anybody unless 

22 you are in arms control working with one of the commissions 



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l that are in Geneva. I Jon ' I. know of any 000 peopln who ever 

'/. wt^nt tci "Jwi t vierl and , except Tor arms control, on business. 

3 Hut I know a lot of people who went there, iiicltidimj myself:, 

4 on vacation, who I h(;n didn't do any business there or any 

5 banking. 

6 Q What can you teJ V us, if: anythiny -- 

7 A You are usually broke when you go through that 

8 Jittle coin exchange. You get all those little tiny coins 

9 that are so valuable, take so many oE your dollars. 

10 Q What if anything can you tell us about Michael 

11 Timpani? 

}2 A He is an employee at -- with GMT, and he, prior to 

13 coming (:o GMT Clew missions. He':; a very skilled, 

14 accomplished and sophisticated helicopter pilot who at one 

15 time had been with the special forces support. He flew 

16 missions in Latin America as a civilian, not in the 

17 ailitary. And not for or with the United States Government. 

18 But for — in support of Kden Pastora, and a very valuable 

19 resource because he knows all those airfields, knows 

20 everything that happened down there during the time he was 

21 flying those missions. And I don't know when he started and 

22 whether he stopped. He never did anything of that natvire 



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after he cam« f-.o GMT, which would have be«n ab(jut. Auijusi. . 

Q Ho WrtS an employee of GMT at the t.iitio you wi^re 
I, here? 

A Yes. Ho WrtS there before T cajne Ihoro and ht; ' s 
still thf!re now. \ ver-y IMiie man. I think it you call him 
here, you'll bv vc:ry impressed with him, with his honesty arul 
knowledge. Just a straight arrow. 

Q Do you have any knowledge of any role he has had 
in private supply operations to the Contras? 

A What T just said. He knows — would know, I would 
l.hink, a great deal about it and would -- and did par t ic i p.i te 
in some of those missions, but I'm very sure that he was not 
dying or operating Cor the CIA, nor did he think he was. iio 
it would have been private efforts. He was certainly not 
doing it Cor Barbara Studioy or Cor GMT beEc)re ho came l.o 
work for them. 

Q no you have any knowledge of his having flown aims 
to the Contras? 

A No. Hut he may have. Hut I don't have .iny 
knowledge. I would assume that it you were flying support, 
you would have flown everything. 

Q Is there anything we have not asked you today 



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which you -- which was in the request for infiorma timi which 
you think we should know. 

A Thank you for the question. 

No, sir. T really don't, now that you b/ouciht out. 
the Michael rimpani thing. That would have been the only 

6 thing that would have worried rac* if wt; hadn't gotten ttiat 

7 covered. Other th.ii\ Michael Timpani, Barbara Studley and 
General Sinqlaub -- and I only know bits and pieces of 

9 conversations on that — I don't know of anybody who has done 

10 any of ttie things that are in point 7, is providing 

11 assistance or support of any kind nnd I have not done any of 
1?. that, either before — wtien I was on active duty, during the 
.3 Lime I was at TMT, or subsequently. 

14 And I might say that I feel a little guilty that X 

15 haven't provided some support for the freedom fighters, 

16 because I think in an it's not an exaggeration to say the 

17 survival of the United States is at stake in the events that 

18 are unfolding in Central America. I would like to put this 

19 on record for the Committee. I think it would be a terrible 

20 mistake if what comes out of all of this, all these six 

21 investigative bodies that are at work, that wn end up 

22 punishing the freodora fighters instead of whoever it is that 



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1 did whatever iL was that somebody micjht fiiidlly adju(i(je was 

2 wrong. T think we wj ] 1 have addressed the wrong probJem. 

J And I honestly believe, tliia Is one thing I did 

4 want to say, was that the problem originated with the 

5 Congress. Tt Colonel Nortit and Admiral Poindexter and othcrj 

6 went into unprecedented and unusual activities to support it, 

7 It was because of the legislation, with the ambiguities tl\at 
H were believed to have been deliberately left in it. And you 
9 have Lo trace, ycju know, step by step, as I have done, the 

10 va/ious Roland amendments and the bicameral legislation. In 

11 fact, they said we are not satisfied with it. We are going 

12 to turn it over to our intelligence committees, let them work 

13 the language, and they .Taid not to preclude providing advice 

14 or intelligence information. 

15 If you are going to provide advice and 

16 intelligence information, how can you do that w.ithovit 

17 radios? So you can argue, not with casuistry but with simple 

18 logic, and you know the rule of the normal -- the reasonable 

19 prudent man, the standard of law, that that would allow the 

20 provision of communications equipment. 

21 There were a lot of ambiguities in the legislation 

22 and there's a lot of conflicting legislation. I think I 



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1 would invite you Lo look at and tn make a mal. tei op rorora 

2 for this Committee, the preamble. I sougfit -- T was rilrncist. 
^ late getting here trying Lo look for it. IC I find it, ["11 
4 send it to you. The preamble in the Foreign Security 

Assistance A<;t of 1 "^fi I . We amend that every year, somel.imes 

6 every two years, t>\\t almost every year, and we have never 

7 taken out ot it the core language that says what everybody in 
the United States government is supposed to do is with a 

") great deal of vigor, pursiie the Eight against communism in 

10 the hemisphere on every front, military, economic, political, 

11 social, and use the OAS to organixi^ under the Rio Treaty to 

12 stop communism in the theatre. Thtre's a Cuban resolution, 

13 8333, I think it ia, still on the hooks. 

14 For rae, when you pass a specific amendment like 

15 the Boland amendment, that takes precedence. I observe the 

16 spirit even more than I had to, as well as the letter of the 

17 law. But if people wanted to argue that there were other 

18 things that could and should be done, I think they might be 

19 justified, with lawyers helping them and arguing the 
?.0 contrary. 

21 My own position was that all this was wrong, and I 

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Rut when hhK amendment was passed, I said what we ishould do 
is (JO brtck tci the Congress and yo all out to qet this rhan<)fd 
and make l.he rase, you know, head-on in tlicj main. I said 
whatever you do, don't try to go aiouiid it oi undeineath it. 
That would be a big mistakw. And I personally believe this 
is why T was cut out, because my position was take it 
head-on, make a tight for it on the merits and get the 
legislation changed because o£ what Is at stake, and get the 
president and the media behind you by making the case. 

Q Let me ask you if you brought with you any 
d(5cuments oi- supporting evidence you wish to leave with us. 

A I have not, sir. No, L;ir. I have none;. t did yo 
through all of ray files and I have destroyed nothing. I did 
tell you that when I Jeft active duty, I deslroycid 1/ boxes 
of classified documents fKirn the Pentagon and from the White 
House which I had been holding in rase there were any 
investigations or questions on anything. But I no longer liad 
a repository for them when I came off of active duty. So T 
destroyed them, not by myself but by turning them back Into 
the Pentagon to be shred after bringing in all kinds of. 
people to look at them and say, is there anything heie that's 
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setting up the ant.ecedeii ts to I. his, but noiie of them involve 
the Contrrts oi any of the things thdt you are looking at 
nc)w. I never hrid <iny of those documents in my possession. 

MK. SAXON: T guess T shouJd say on bt^half of the 
Committee we appreciate your appearing, your iloing so 
voluntarily, and your taking the time to share these thoughtr: 
with us. 

THK WTTNFSS: Okay. I'm willing to come back it 
you have another witness that brings something up that you 
think changes or contradicts what said. I will be out o£ the 
country, in the Philippines I think. Cor an indefinite 
peri od . 

(Whereupon, at 2:0?) p.m., the deposition was 
concluded. ) 



GENERAL ROflERT L. SCHWF.TTZER 



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CERTIFICATE OP NOTARY PUBLIC & REPORTER 



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I, JOEL BREITNER , the officer before whom 

the foracfoing 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 this action. 




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(lliSUSSIfJED. 

UNITED STATES SENATE 

SELECT COMMITTEE ON 

SECRET MILITARY ASSISTANCE TO 

IRAN AND THE NICARAGUAN OPPOSITION 

DEPOSITION OF ROBERT L. SCHWEITZER 

Washington, D. c. 
Monday, April 27, 1987 

Deposition of ROBERT L. SCHWEITZER, called for further 
examination pursuant to agreement, at the offices of the 
Senate Select Committee, Suite 901, Hart Senate Office 
Building, at 4:20 p.m. before LOUIS P. WAIBEL, Court Reporter, 
when were present: 



CLARENCE H. ALBRIGHT, JR., ESQ. 

Associate Counsel 

CHARLES KERR, ESQ. 

Associate Counsel 

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



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copy No- 



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: inder provisions of E.O. 12356 
by ll . Menan, National Security Council 



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CONTENTS 

WITNESS 

Robert L. Schweitzer (Resumed) 

by Mr. Albright 
by Mr. Kerr 

EXHIBITS 
SCHWEITZER DEPOSITION NUMBER 
Exhibit 1 
Exhibit 2 
Exhibit 3 
Exhibit 4 
Exhibit 5 
Exhibit 6 
Exhibit 7 
Exhibit 8 
Exhibit 9 



EXAMINATION 



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PPOCEEDINGS 
MP. KEPP: Would you swear the witness, please? 
Whereupon, 

POBERT L. SCHWEITZER 
was called as a witness and, havinq been first duly sworn, 
was examined and testified as followst 
EXAMINATION 
BY MR. ALBRIGHT! 
I will just ask you some Questions about Yellow 
Fruit, General. 

You are familiar generally with the Yellow Fruit 
operations, is that correct? 

A Yes. Only after it came under investigation 
under that name. I did not know, to the best of my 
knowledge and belief, that they were designated Yellow Fruit 
until after all the investigation started. 

I have testified before several investigations on 
th« event* that came out of that operation and alleged 
wrongdoing that occurred over the use of funds, and I would 
defer to my better recollection at earlier dates, but I am 
telling you now under oath that my beat recollection is I 



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never heard Yellow Fruit until they were being 
investigatiaB*, although I knew of the operation without that 
name. 

Did you know of any Swiss bank accounts or any 
other foreign bank accounts in which Ollie North was 
involved? 

A No, absolutely not. Nor did I know of any 
connection of any Army bank accounts that were put at his 
disposal, nor did I know that the Army had any Swiss bank 
account or any agency of the Array. 

HOW did you identify Yellow Fruit? when you knew 
of its existence, how was it identified to you? 

A Only as an intelligence gathering operation, and 
in that respect the Army would be only deserving 
accomfflodatlon for it. They were collecting what I 
understood at the time from the intelligence community was 
about 80 or 90 percent of all of the intelligence that was 
being collected in Central America with respect to the 
activities of communist guerrillas both inside Nicaragua — 
the Sandinlsta government and the revolution they were 
exporting to their neighbors, notably El Salvador and also 



Honduras and Costa Pica. 



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The Army was collectina -- and we shouldn't, I 
don't think, qo into any details on this as to how they were 
doing it — sophisticated means, intelligence that pertained 
to the activity of these coiranunist auerrillas. 

I know of no other activity in which anybody 
connected with the Army was involved at the time other than 
simply the collection and analysis of intelligence. 

How would you distinguish Yellow Fruit operations 
from other operations? How did you know when someone talked 
to you that they were talking about Yellow Fruit? 

A I am sure I didn't at all times and places 
because I never knew that the operation was designated 
Yellow Fruit, to the best of my knowledge and belief today. 

what I am asking is how would it be designated to 
you that you were discussing the operation that you later 
came to know was Yellow Fruit? 

A Generally through the information that I was 
given in briefings from the people in the Special Operations 
Division of the Operations Directorate under the Assistant 
Chief of Staff or the ADSCOPS of the United States Army or 
Lieutenant General P*ahaffey, now dead, predecessor 
Pichardson, now General Officer, Retired, I think with a 



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stroke or some other disability. Those two men had 
responsibility for a number of directorates, one of which 
was mine. Strategy Plans and Policy, so I was Assistant 
Chief of Staff. The Arroy described me as the senior war 
planner for the Army. 

And the other directorate was the Operations 
Directorate. They would do the day-to-day operations. It 
was headed by a Major General. There were three — at the 
time I was there — different men. There would be an 
obvious interface between the operators and the planners, 
the strateqists, which my directorate encompassed. 

when these people from the Operations Directorate 
would come up to get, using the Army parlance, a "chop," a 
coordination on one of their proposals or to seek assistance 
or to brief, that is when I would know what they were doina. 
Everything that I knew — this was 1981-1982 and into the 
spring of '83 — was very proper. I knew of no operational 
activities in which the Army staff or any Army agency was 
engaged. 

So the aspects of Yellow Fruit that were later 
prosecuted or aspects that were investigated, you had no 
knowledge of until the investigation began, is that correct? 



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A Yes. Put, Dlease, let's not have a misconceot icn 
here. 

As far as I know — and I didn't see all the 
charge sheets or read the investigations -- what they were 
investigating was a misuse of funds and a misuse of 
authorities. I am unaware if they were engaged in 
operational activities as opposed to intelligence collection 
activities. 

Let me ask you a few names, if I may. 

Do you know Charles Odorizzi? 
A Say again? 

Charles Odorizzi. I believe he was a Colonel 
Odorizzi. 

A I have heard of him. 
Known as Jack? 

A Only heard of him, and I really know of him in 
conn ection with matters I have testified to you before on 
situation. 

So you know of Colonel Odorizzi only through the 
involvement with — 

A In a totally unfavorable light. I know of no 
favorable words about him. He is retired, incidentally. 



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Are you familiar with the Intelliaence Suooort 
Activity Group within the United States Amy? 

A Again only after the fact, and I an not sure 
exactly what it was they were doina. If that was the 
umbrella name or the ^^ 

then I would know more about 
it. But I don't recognize it under that name. 

Do you know the name Lieutenant General Sam 
Wilson? 

A Very well. Yes, I know him. I know him very 
well, but I have had no contact with him, I would say, since 
1979, was probably the last time I saw him. 

Do you know Major Richard Meadows? 

A Only what I h«ve read of him in the newspaper. I 
have no conscious knowledge of him. 

Have you read anything recently in the newspaper 
about Major Meadows? 

A Not that I recall. I have a tendency to elide 
him or transpose any knowledge of him with Colonel Gadd, 
whom I also don't know of. 




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So that is your knowledge about it? 

A That was my knowledge of what ISA was all about. 
I did not know of more undertaking and would tend to 
disbelieve that they were undertaking operational 
responsibilities J 




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1 Director of Central Intelligence is the CINC, the Commander 

2 i in Chief of the covert war which is being fought against the 



United States, and if he asks through the liaison system 
which has been properly and necessarily set up to be the 
agency and the Pentagon for support and it was determined 
that the support was proper, then they could and should 
provide it to them, if that meant people or activities. 

If it came under the oversight of the 
Congressional intelligence community and was authorized by 
the Secretary of the Service and the Secretary of Defense, 
in my judgment it would be proper and a necessary thing to 
do. 

I have no knowledge of any such tasking reauests 
or activities, however. 




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4 MR. ALBPIGHT: I don't have anything else. 

5 I THE WITNESS: I would like the record to reflect 

6 i this, to get this on the record, that I had knowledge of 
of the people who were involved in it, specifically 




I did not know Lieutenant Colonel Duncan or even 
meet him until after he was responding to charges, and I 
think he was at the center of the administration of this 
thing. 

But I wanted to get it out on the record so I 
don't get called back from the Philippines by somebody who 
then discovers that I had some contact or knowledge and 
therefore, because of all these other contacts, I might have 
some special knowledge. 

I wish I did, to help you. I don't, and I would 
tend to disbelieve, Mr. Albright and Mr. Kerr, that anybody 
in the United States Army either had a Swiss bank account or 



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made it available to Colonel North for some illegal purpose 
such as financing either arms to Iran or arms to the contras 
where that would have been a violation of the correct 
Congressional law as we knew it. 

All the time that I was on active duty, the 
Pentagon as an institution and the Services, especially to 
include my own, were absolutely scrupulous about — I would 
say to a fault — about noninvolvement in the contras. 

In other words, I think you could fairly have 
looked to the Services to do contingency planning In case 
the law was rescinded. To the best of my knowledge, no such 
planning was done in order to make sure that there was a 
complete wall and a very careful obedience of what was first 
called — was the »rtMHt amendment and continued to be 
called that when it really bicameral legislation by both 
houses of the Congress. 

I knew of nobody in the Pentagon who would even 
entertain discussion on the subject of the contras while 
that law was in force. I know of no activities that 
emanated from the Pentagon in support of the contras because 
of that legislation. 

I know of nobody who thought that was good 



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legislation, but I know of nobody who violated it in spirit 
or letter while it was in effect. 
BY MR. ALBRIGHT: 

well, while we are on this, I might as well ask, 
do you know William Golden? 

A No, except, you know, where he has been mentioned 
in the press. 

You have no information of his activities? 

A No, sir, I don't, and I can't even — other than 
the name — and I may recall the association I had with the 
name — I can't even connect Meadows. 

May I ask so I don't have a later recollection 
that draws me back, was he part of the Special Operations 
Division? would you tell me? 

I an just getting up to line speed on Major 
Meadows in the last hour myself. 

A I have an idea he was a former Special Forces 
officer who was involved in the Special Operations Division, 
and in that case I may well have met him. 

He had a company called Paragrine or Peregrine - 
- P-e-r-e-g-r-i-n-e. 

A I have never heard of that name. 



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He was involved in the ISA activities or alleaecJ 
to have been involved in some ISA activities. 

A All right. Let me put out some further testimony 
in that regard. 

If Major Meadows was in any way associated with 
t^ 




I would hope that this, 
if it turns out to be classified, gets properly marked and 
handled. 

MR. KERPt This deposition will be confidential 
in any event. 

THE WITNESS: It may be more, if the operation is 
still in effect. I think it has also been tenninated. 

But if you were going to collect intelligence 
|and you were going to do it with 
sophisticated means, you would need a cover, and the cover 
would bel 




There was such an organization. My understanding 
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intelligence community, especially to include the Director 
of Central Intelligence and certainly the Army Chief of 
Staff and the Secretary of the Army. 

I would disbelieve, because of the hierarchical 
nature of the Army, that you would have anything like a 
rogue or an independent operation of this kind taking place. 

I was briefed on the results of it. I do know 
that at least on one occasion — and I don't think that it 
was this company — but the Army had such a cover company 
and they were very much embarrassed because it was making 
money and they had to turn in and account for the monies 
that were being made, and this created a great bookkeeping 
problem. 

Funds had been appropriated for a cover company. 
The company sets up business, and it is all disbursing. But 
the company starts making money, what do you do with the 
money? And I know again they were turning in the profits, 
and what on earth do you do with all these profits, because 
the system wasn't geared to receive profits. 

But I know scrupulous regard extended to that 
turning in the money, and it may have been the same company. 



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BY MR. ALBRIGHT: 

It may be again, as I said earlier, I am iust 
getting up to line speed on this, but I think I remember in 
this article somewhere a discussion of some problems because 
profits were generated and what to do with them. 

A But it was an honest effort and nobody wanted to 
pocket the profits. They wanted to turn them in in a system 
which was geared to providing your appropriations. It 
wasn't geared to the company that was set up making money. 

The main thing I would be interested in at this 
moment would be any connection between Major Meadows and the 
Peregrine, or Paragrine, operation the Yellow Fruit 
operation that you know of. 

A It may be that I was briefed on Peregrine — you 
call it? 

Peregrine. 

A Peregrine? 

MR. KERR: As in the falcon. 

TRB WITNESS! It may be that I was briefed on 
that two or three or four years ago. The man you really 
need to bring in here is Lieutenant General William Odom, 
0-d-o-m, because he was the one who set up ISA, and he and I 



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had a debate as to the feasibility of doing that. 

I was the operator, the strategy, plans and 
policy guy, and General Bill Odom was a close friend of 
mine. In fact, when he was out of favor because of his 
service as a Colonel with a forced issue promotion to 
Brigadier from *4r. Brzezinski, that didn't go over very 
well in some circles of the Amy. 

They were going to put hire into exile. Into 
oblivion out at Port Huachuca, when the Carter 
Administration wound down, and I said this is the smartest 
man in town. He is the best Brigadier General you have got. 
You need to bring him over into the building and use him 
because he could do anything. He could be, as I said then, 
as a Brigadier, a three-star OCSOPS man, the operator, not 
intelligence but an operator, in Operations. He could be 
the OESOPS, but certainly a future ACSI, A-C-S-I, Assistant 
Chief of Staff for Intelligence. 

They canceled his orders to Huachuca and brought 
him back. I was in the White House when I made those 
recommendations. They assigned him to the building, and he 
did become the Assistant Chief of Staff for Intelligence. 

I now return from the White House, and he and I 



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had a debate over the proper locus for an organization that 
I thought might get into Operations. I said to him, "Bill, 
as long as you are the ACSI, I would have no problem because 
you are as competent as the DCSOPS, the Deputy Chief of 
Staff for Operations, to run such an activity, but I 
wouldn't be that confident with some of your predecessors or 
some of your likely successors." 

So as I testify now to you with this recall, 
obviously there was going to be an operational context of 
this, or I wouldn't have raised that objection. But I knew 
of none, Mr. Albright. I knew of no — that part of my 
testimony I come down firmly on that I knew of no proposed 
plan or carried out operational activities, although it 
would not be wrong for the Services to do this provided it 
was properly and legally directed by the Director of Central 
Intelligence and all fit into some kind of master plan with 
the Congressional oversight committees having knowledge and 
then providing the holy water for it. 
BY MR. ALBRIGHT: 

Where is Lieutenant General Odom now? 

A He is your very esteemed Director of NSA. So he 
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1 lieadows was doing this. 

2 ■ All this, if it existed at all, had to exist 

3 ' under his aegis. He would have been the one who chartered 
J 

4 it, commissioned those guys, sent there out, and took their 

5 I reports. 
I know at one time when I took one of their 

briefings he was in the room. In fact, he invited me down 
for it. 




MR. ALBRIGHT: All right. I think — unless 
something else comes up, I think that covers what I have. 

THE WITNESS: And I thank you for your additional 
questions because It gave me that additional recall. Odom 
is the best man to bring in here to answer questions on ISA 

also^^^^^^^^Hthe activities 
people, and Meadows if he was connected in any way with 
that. 

^^^^^^^^^■[^^|is the one to you 
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truthfully/ the good and the bad that went on down there, 
the good and the bad policies and the good and bad people. 
He knows them all. 

MR. ALBRIGHT: Thank you. General. 

EXAMINATION 
BY MR. KERR: 
General, the primary thing I want to go through 
with you this afternoon is more detail on the work you did 
for GeoMiliTech, or GMT from here on. 

A Before you ask many questions, because we are at 
a transitional bridge here, let me pick up on Mr. Albright 
and come right to your point, and I will respond to your 
questions. 

When I was asked to come here before, I had a 
subpoena to bring in every single piece of paper from 
January 1981 to date, and I told Mr. Albright very 
truthfully I had none but I would continue to search my 
files. 

After I spoke with you on the telephone, I found 
a piece of paper that I believe is relevant under the 
original subpoena of Mr. Albright, and specifically relevant 
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I will testify under oath that I have not read 
this document and didn't even know I had it. It had been 
given to me by General Singlaub before I went to work for 
GeoMiliTech, while I was convalescing from surgery on both 
wrists from Vietnam wounds, and the document I think will 
speak for itself. 

I will read it for the record if you want. 

HR. KERR: We will just make it an exhibit. 

Let me take a look at it first. 

THE WITNESS: I think you will be very interested 
in it. I think it is a harmless document, but it is 
potentially very incriminating, and if I had known I had it, 
I would have brought it with me. It just wasn't in any of 
my files. It was just in a personal file of odds and ends, 
papers that I got right around the time I was in the 
hospital. 

It is addressed to Mr. Casey. It is marked 
"Personal Confidential," General Singlaub. 

(Pause.) 

THE WITNESS: What disturbs me about the 
document, Mr. Kerr and Mr. Albright, is it is written on 
GeoMiliTech stationery. It has General Singlaub talking as 



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an officer of GeoMiliTech when in all the time I was with 
the company Barbara Studley always told me he was not an 
employee or an officer of the company or even a consultant 
for the company. 

BY MR. KERR: 

Let me just ask you a couple of questions. 

In terms of trying to place this in time, this 
document does not have a date. 

A It is undated. 

What is your guesstimate of when the document — 

A August. 

August of 1986? 

A Right, and the reason I can help you date that — 
and it may have been June or July. It wouldn't be later 
than August — the reason I can tell you that is there is a 
time line in the document that says something to the effect 
that they need — due to the fact funds from Congress will 
not be available until after September — I don't think they 
are available yet — and then he implies that the opposition 
will fail. 

And I don't remember his giving me the document. 



and I certainly didn't read it, but I do 



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telling me -- this is General John K. Singlaub, whom you are 
going to be taking testimony from shortly — I do remember 
him proposing an idea to me when I was still on active duty, 
that we try to get the government to establish some sort of 
letter of credit as a way of — not getting around, but 
solving a problem of nonavailability of funds. 

I told him that I didn't think it would be leaal, 
and I said, "You would need to communicate that not to me 
but to the Director of Central Intelligence, and his General 
Counsel should look at it and see if you could legally do 
this." 

You know, the idea of taking a letter of credit 
and using that letter of credit to obtain the arms for the 
freedom fighters, or the contras as they are called. Their 
needs were desperate. In my judgment, they weren't for 
weapons. They were for other things. But they had many 
desperate needs, and indeed they were going to run out if 
this process of releasing the funds that had been approved 
in the summer continued to go on, the delay continued to go 
on. 

So General Singlaub' s idea of a letter of credit 
was innovative and worthy of consideration, but I suggested 



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I didn't think it would be legal and it would need a lawyer 
to opine on it. 

I later asked him if he had sent this letter to 
Mr. Casey or gone to Mr. Casey, and he said he had, and I 
said, "What did they tell you?" 

That it wouldn't be legal, is my recollection, 
and I said, "Well, that is what I thought." 

So I never went back to the idea at all. X don't 
know when he gave me this or how. 

MR. KERR: I would like to have the document 
marked as Exhibit 1 to this deposition. 

(Schweitzer Deposition 
Exhibit 1 identified.) 

THE WITNESS: I cannot explain the three holes in 
the top. That is not ray filing system. 



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BY MR. KERR: 

Let me ask you a couple of questions about it. 
General. 

The letter makes reference to an enclosed list of 
hardware that is available for immediate delivery at the 
prices indicated, suggesting that there was an enclosure 
with this letter. 

A I have never seen the enclosure. As I say, I 
have never seen the letter, and the letter file I had from 
the hospital, which had the letter didn't have any enclosure 
to it, or I would be turning that over to 4fit^ 

Q In terras of trying to put your best date on when 

you would receive this letter, it would have been the summer 
of '86? 

A Oh, absolutely, the summer of 1986, and it would 
be soraetim* between June and 1 September, because it was 
definitely a document I received before I came to work for 
GMT. 



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Do you recollect why it was that General Singlaub 
gave you this document? 

A Well, he was asking me to try to get this idea 
put across. General Singlaub, as you know — those of you 
who have talked to him, as you will see if you have not yet, 
Mr. Kerr — 

MR. KERR: I spent a long time with General 

8 Singlaub. 

9 THE WITNESS: General Singlaub is a very 

10 passionate advocate. He believes deeply, as I think we all 

11 should, of the dangers of communism and the need to resist 

12 it, and he really lives, eats and breathes this philosophy. 

13 He'll make any sacrifice, undergo any privation or pain in 

14 order to be involved in this cause, so he would buttonhole 

15 anybody that he thought would help. I believe he wanted me 

16 to intervene with people at the White House or with Casey. 

17 It always helps. Casey refused to see him at this time, 

18 because, as I testified to Mr. Albright, Mr. Casey was, to 

19 my belief, scrupulously observing what we came to call the 

20 Boland Amendment. 

21 And I think I testified to you that I had no 

22 knowledge that he was doing anything to the contrary at the 



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times that I met with him. 
BY MR. KERR: 

Let me just ask you a few more Questions. 

The normal way of acauiring covert arms either by 
the CIA or anyone is by way of a letter of credit, a payment 
of a letter of credit for the covert arms. The only unusual 
wrinkle about this letter appears to be combining a letter 
of credit with what amounts to a loan of several weeks to a 
month. 

A That's right. 

Am I correct that what General Singlaub is trying 
to persuade you to do was to intervene to persuade the 
Director of the Central Intelligence Agency to approve a 
loan arrangement? 

Is that what he's looking for? 

A That's certainly the way I interpreted it, and 
that's why I said I didn't think it was legal, and because I 
didn't think it was legal, I made no effort to talk to 
anybody in the United States Government about it. I told 
General Singlaub — he said, "I don't agree with you." I 
said, 'Hell, then, you're free to go, you know, if Casey 
won't see you, why don't you write a letter to him?" So I 



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think the letter probably followed the oral proposal,. 

I do remember that he told me later that they 
said it couldn't be done legally, and then General Singlaub 
— and I'd like to get this on the record — then dropped 
it. You know, once you tell him that you can't do it 
because it's not legal, he is not going to continue to 
pursue it. He's a very honorable man. One of the most 
honorable men I have ever met. 
9 ' The bank that's referred to in this letter as 

10 j "our bank,' do you know which bank that was? 

11 I A Yes. 

12 I was it the Banoue National du Paris? 

13 I A No. The reason I'm smiling as I answer your 

14 I question is, very obviously, from the context of the letter, 

15 the bank is the bank of GMT, and as the executive vice 

16 president, I was absolutely walled off from knowing or 

17 having any contact with the bank or the banking activities. 

18 I do not even know the last nan* of their banker. I heard 

19 the name 'Lou' mentioned, but I don't know his last name, 

20 and I don't know the names of the people in Switzerland. 

21 I never went on any of Barbara's several trips. 

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was on a business trip having nothing to do with this, to 
join her in Switzerland. I was very uncomfortable with the 
notion of meeting a woman in a hotel in Switzerland, and 
when I could see no possible business connection for the 
trip. So to her great annoyance, I didn't join her. Had I 
done so, I probably would have learned a great deal about 
the banking activities, but I did not go. 

But you did not know at the time you received 
this letter, and you do not know now the bank in Switzerland 
that's being referred to in this letter? 

A No, I don't. 

And you have had no occasion to discuss that bank 
with General Singlaub? 

A No. 

Nor did you discuss it with Ms. Studley; is that 
correct? 

A Never. Now I suspect that at some time in my 
association of several months at GMT, I may have seen a 
place of pap«r with the name of the bank on it. In fact, I 
may, as later Questions will reveal, have given the name of 
the bank on a piece of paper to^^^^^^^Hat the Central 
Intelligence Agency, but I cannot recall the name of the 



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I absolutely know that they did. 

Do you know in whose name the Swiss bank account 



bank nor do I recall seeing such a paper. 

One of the things that's a curiosity to me is 
that this suggest that GMT had a Swiss bank account. As 
you're aware from your testimony, it has been the position 
of GMT that it was not involved with the 1985 transaction 
that went by way of Swiss bank accounts. 

Do you know whether or not GMT maintained a Swiss 
account? 

A 


was? 

A Well, this is the problem. Whenever I asked 
Barbara Studley for a picture of the company's business, she 
took great offense and said, on one occasion, "I don't ask 
you for your personal bank statement, and you shouldn't ask 
me.' 

One of the reasons I left GMT is, you could not 
divide GHT as a corporate entity from Barbara Studley, 
personally. So Barbara Studley did maintain at least one, 
maybe more, Swiss bank accounts, and I know that as a fact. 
I do not know that those Swiss bank accounts were in any way 
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absolutely don't know about that, so ray earlier testimony to 
Mr. Albright today stands. 

you don't know today whether or not those were 
accounts of GMT or accounts of Ms. Dudley; is that correct? 

A No, sir, I don't. I would tend to believe, 
because of the secretive way in which she handled all that 
and the way that she warned me off from that, that they were 
her o%m accounts in her own name. 

You never became privy to any Information 
suggesting that these were reported in tax returns for GMT? 

A Pardon? 

You have no knowledge of these accounts being 
reported or activities in these accounts being reported in 
tax returns of GMT, do you? 

A No. That's one of the things that bothers me 
about that whole operation. 

Q You have never seen the tax returns for GMT? 

A Never. 

And you have never seen the financial statements 
for GMT? 

A One time. I was shown it for about two seconds, 
and it was a single sheet of paper about half a page, which 



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showed maybe a dozen lines, and the bottom line showed $15 
million. 

General, let me take you back. We'll go through 
this chronologically, if it's agreeable to you. 

A Yes, certainly. I'm sorry to introduce that, but 
I felt it was necessary to put me even with the board with 
Mr. Albright from our last interview. 

You began working for GeoMlliTech in September of 
1986? 

A 1 September 1986, while still convalescing from 
surgery at Walter Reed. 

And you started with the position of executive 
vice president? 

A That was the name, but I'm afraid it was a title 
in name only, and that I really was not a true executive 
vice, president. 

Your compensation was what at that point? 

A $60,000 a year, to go to $100,000 on the first of 
January. 

And from your testimony, the last you were here 
on March 17, I gather there was no agreement on commissions 
or bonuses at the outset? is that right? 




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1 A No, I did not want one. I felt the salary was 

2 i adeauata and Barbara Studley had mentioned once or twice, 

3 i with respect to possible transactions, I think two different 

4 j times, that there would be some sharing of the profits, and 

5 I I always put that off, because I wasn't — I had a much 

6 ' different approach to what the profit should be than I think 

7 she did, and since we hadn't concluded any of the deals, I 

8 ' thought we would cross those bridges when we came to them. 

9 I But I sought no profit sharing at all nor expected it. 

10 I YOU own no stock in the corporation? 

I 

11 I A None. 

12 Did you have any agreement that you would be able 

13 I to purchase stock at some point? 

14 I A None. Nor did I want to. 

15 I With regard to the board of directors of 

16 I GeoMillTech, who were the directors, if you know, at the 

17 time you joined the firm? 

18 A Barbara Studley always made It very clear that 

19 I she was GMT, and that was one of the difficulties of working 

20 there. There was no board of directors that I knew of, and 

21 I was unabls to learn much of anything about the company or 

22 its antecedents, how it came into being, except what she 



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told me orally. 

I gather from your testimony last time, it was 
your impression that GMT had been formed within a short time 
before you joined the company; is that correct? 

A Well, if I left that impression, I'm sorry for 
that. I think it had been in business a year, a year and a 
half before I joined. 

The reason I got that impression is because, with 
regard to the discussion of the July 198S arms shipment ^^^M 

iyou had indicated in your testimony that that took 
place before GMT was formed; is that correct? 

A I testified to that, because that's what Rarbara 
had told me, that this thing had been conceived or while she 
was starting GMT. 

You were not aware that GMT Corporation was 
formed in 1983; is that right? 

A I absolutely was not. I have never been given 
any of the charter documents on it. In fact, I can tell you 
under oath that I was told it was started in 1985, I think, 
within a year or a year and a half ago. That's what I was 
told when I was there. I was also told that it was a vision 
from God to form it and that GMT stood for "God's Mighty 




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7210 03 04 

OUbw 1 T«am." 

2 If I had be«n told that b«for« I )oln«<l It, I 

3 don't think I would h«v« joined It. I think I told Mr. 

4 Albright that I send a lot of d««p«rat« m^tiag^a to Tie 

5 Almighty. I hav« n«v«r r«c«lv«<J a direct response with 

6 lights on the wall, being woken up In the night with a 

7 vlalon. Barbara said, and I think she believes, that she 

8 I had received a commission frora dod to form this company. 

9 In terms of how you becaae an officer of this 

10 company, could you describe In some detail, with dates, how 

11 you were approached to join the management of GMT? 

12 A By General Slnglaub. He explained to me that 

13 Barbara was a very good woman, a born-agaln Christian, who 

14 wanted to do good, that she was very supportive of 'J. 3. 

15 foreign policy and would never do anything to violate 

16 foreign policy, but she was desperately In need of someone 

17 to act «■ a chief of staff and executive vice president, who 

18 would th«n bccoite the CEO of the company, that 

19 sh« wanted to relinquish control and turn the key over to 

20 other hands, and that It was a very good opportunity, and It 

21 would fit my skills, which are management, and since It was 

22 going to be a company that sought to get programs started In 



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other countries, to bring technologies and assistance to 
other parts of the world, that fitted in with my background 
and also my persona-l desires, which was kind of make the 
world a little better place to live. 

I was told that Parbara was totally disinterested 
in money, had no desire for any profit at all. Barbara 
reinforced that in the initial meetings with her, and, 
indeed, she would tell you that. She told me that the last 
week I was there. 

When were you approached by General Singlaub. 

A I think as early as maybe July. 

July 1986? 

A I think when I was in the hospital at Walter 
Reed. I would have retired earlier, if it had not been for 
the hospitalization, so his asking me was certainly proper 
and my listening to him wa,s certainly proper, but I made no 
decision until I was out of the hospital. I know you can 
legally do that, but I chose not to. I didn't go around to 
any other companies, although several had asked me if I 
would b« interested in caning to work for them. But I 
refused to even entertain any ideas or conversations. 

The first approach would have been by General 



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Singlaub to you while you were in the hospital? 

A That's my recollection. Conceivably, it could 
have come before. If it did, I just turned it off. I just 
turned it aside. 

Was anybody else present when you had this first 
conversation with General Singlaub? 

A No. I think it was telephonic in all instances. 

What did General Singlaub tell you his role was 
vis-a-vis GMT? 

A He never did describe a role in GMT, and I 
thought he was just a friend of Barbara Studley, who was 
interested in seeing her succeed and that she helped manage 
causes privately by making donations or assisting him. 

He did not indicate to you then or at any other 
time that he had acted as the authorized representative for 
GMT with regard to, for example, the sale of Israeli 
niiitary hardware? 

A No. But I came to learn, after I was with the 
company, that he had traveled with Barbara in enterprises 
like that, apparently as a nonpaid consultant. I don't 
think he was ever paid any money. I looked through the 
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that he was on the books as an employee or paid consultant 
or officer of the company, salaried or unsalaried. 

After the first conversation with General 
Sinlaub, you indicated an interest, is that correct, in 

A 

joining GMT? You told him you would be interested in 
pursuing it? 

A Well, he, at that time, had offered me a position 
out in the Philippines with the work that I an now doing, 
and I weighed both, and he said, 'The most urgent need is 
that Barbara desperately needs help,* that she was totally 
disorganized and she needed assistance in the Washington 
office. Since I was still recovering from the surgery, that 
seemed, for personal reasons, the correct thing, you know — 
what should I say? Not correct, but the most logical thing 
to do. 

As of that time, had you met Ms. Studley? 

A I'd seen her once, but barely remembered her, at 
the Tomb of the Unknown Soldiers, when a wreath was laid by 
the Bay of Pigs Association — 2506 Brigade. And he had 
b««n there, and so had Barbara Studley. In fact, when he 
approached me, he said, "You remember the tall blonde, who 
was out at the wreath laying at the Tomb of the Unknown 



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Soldier?" And I said I did, vaguely, and he said, "Well, 
she's a multimillionairess, and she's very interested in 
supporting good causes and in helping people, and she would 
like you to go to work for her." And there was the empathy, 
you know, it touched a chord with me, when you said that 
there's a person who wants to help needy people and needy 
causes. 

Now after the telephone conversation with General 

f' 
Sinlaub, did there come a time when you had an interview 

A 

with Ms. Studley? 

A Yes. 

And that would have been approximately when in 
time? 

A I think right around the end of August, because I 
was still very much bandaged up. It could have been at the 
end of July. I just don't clearly recall. And I didn't 
give her an answer. 

Where did the interview take place? 

A In her office at Pennsylvania Avenue. 

And was there anyone else present beside you and 
her? 

A At approximately the same time and maybe even at 



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the same day> General Bob Kingston and General Gordon Sumner 
and General Slnglaub were all present, to the best of my 
recollection, and at that time, she discussed different 
activities that the company was doing in a very positive, 
enthusiastic and optimistic way. 

What was your understanding of why Generals 
Kingston, Sumner and Singlaub were present? 

A It was vague. I think General Kingston was a 

consultant who would be paid when he was activated, given 

consultancy, and I don't know whether General Sumner also 

fell under that rubric, because I never saw the books, or 

was there as a personal friend, which he certainly was. 

o 
And General Singlaub was present for what purpse? 

A In the same capacity. Personal friend and 
supporter. The review was a very incomplete and 
disorganized review of the files or cases, as they called 
them. 

Let me stop you. What they were doing was 
outlining for you in an incomplete way, the nature of the 
business of GMT? 

A Right. 

What was your impression of the business of GMT 



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at that point? 

A What it's purported to be was that it was 
certainly not solely an arms brokering agency, although it 
would do that, if the cause were right, meaning legally 
correct to engage in within the constructs of declared U.S. 
foreign policy — public foreign policy. But that it was 
also engaged in interfacing other technologies with 
different countries for the betterment of the peoples of 
those countries. 

Was anything said about the relationship between 
GMT and either the State of Israel or Israeli arms 
manufacturers? 

A The wall of her office was filled with Israeli 
plaaues and she held herself out to be a very strong 
supporter of the State of Israel, with a lot of connections 
at the highest level, heads of state, ministers of defense, 
and she had an office which I only bit by bit came to learn 
about and still don't know all of it, which was maintained 
in Tel Aviv, which she then closed, when she suspected the 
■an who was running It of corruption and possible Illegal 
dealings. 

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What is his name? 

A' I'm sorry. With the jet lag, I can't recall, but 
he was an Israeli Air Force officer. I never met him — who 
had retired and who was — if he did anything wrong — I'm 
very sure about this from all the conversations that took 
place, private and otherwise, in the office, and the obvious 
pain with which Barbara spoRe of him, that he was 
moonlighting. He was doing free lancing, using her expense 
account, telephone, salary and office fees, in order to do 
that. There was a great deal of — I think I testified this 
to you, and I probably even remembered then his name. I 
believe his first name was Ron. There was a great deal of 
activity, but there was never any production. Hundreds and 
hundred of phone calls, lots and lots of air travel, and I 
would just tell you , if the three of us wanted to go to the 
Nagev Desert and export oranges to Florida, if we put that 
■uch energy into it, we could successfully do that. You 
wouldn't fall to sell some oranges in Florida with the 
amount of activity and energy and the ability that this man 
obviously had. 

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generating and all the expense accounts and running up in 
travel he was conducting with never a consummated deal of 
any kind — arms or other technologies — she became very 
suspicious of him. There was a story in the German press, r 
believe "Der Spiegel," but I'm not sure if that was the one, 
that linked him to the illegal sale of arms to Iran, 
at the same time or roughly the same period that he would 
have been with GMT. I can absolutely tell you that Barbara 
knew nothing at all about that and was shocked, dismayed, 
and that when this surfaced, that was subseguent to her 
firing him by possibly a year. 

The "Washington Post" relentlessly pursued this 
story with a view to exposing Barbara and GMT as being part 
of the arms to Iran thing. I'm pretty sure they weren't. 
When was the Tel Aviv office closed? 

I don't know. You'd have to get that from 



A 

Barbara 

A 



But it is closed? 

It predated my service there, I would say, a good 
year and maybe more. It may have been closed in the summer 
of '85. I would defer to Barbara's testimony and her 



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In terms of what you know about why that 
operation was closed, it's based upon what Studley told you 
long after the fact; is that correct? 

A That's correct. But I will tell you, Mr. Kerr, 
because she deserves her due on this one, I certainly wasn't 
suspicious of what she was doing in the past or what she was 
even doing at the time I was with her. I took issue with 
her on her concept of a just profit, but I didn't have any 
difficulty in believing, from the context, the particulars 
and the general thrust of the conversations and her 
philosophy, that she would never engage in any transactions 
of arms to Iran. I don't personally believe she would ever 
have done it, if she had been asked to do so by the white 
House. 

In terras of the meeting with the three generals 
and Mrs. Studley, were you given an outline of their 
expectations of you, if you were to take a position with 
GMT? 

A No. Very strange. I wasn't. In fact, it didn't 
•••■ to be that kind of a meeting at all. 

Old there ever come a time prior to you actually 
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expected of you, given an outline of what it was you were 
susposed to accomplish? 

A No. Except it was to run the company. So let me 
amend that. I was told to take over and run everything. 
Then I found out I couldn't run anything. I couldn't run 
administration; I wasn't privy to the finances, and I began 
to get the impression that my real purpose there was sort of 
a cardboard cutout, a person who, at least in Barbara's 
eyes, was influential, who trauld then be presented In an 
officer form, and on the basis of that, on her part, 
perceived influence, would then be able to put a transaction 
through. And I think it was painful for her to learn that a 
lot of the things that she would have liked me to do, I 
could not do, because of the conflict of interest and the 
ethics laws or that I %»ouldn't care to involve myself in. 

Let rae pursue that a bit further. Did there ever 
come a time before you actually became an employee of GMT 
that there was anything in writing setting forth your duties 
— a contractual letter of understandng? 

A No. 

And offer? Anything of that kind? 

A No, never anything like that. She said she had a 



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very attractive contract for me. It was never proffered, 
and I really> you know, took the job on trial. I wasn't 
sure I was going to like it. It turned out, I didn't. In 
fact, I would like to say I would have left sooner, except 
she was struggling so desperately, trying to make ends meet. 
One month — I believe it was January — it could have been 
the first of February — I received a bad check from her 
marked "Insufficient funds," and it was several days before 
she raised the subject with m« at all, and only because I 
forced the issue. And I think the reason she did it was her 
embarrassment. She couldn't bring me in and say, I got a 
bad check and we can't make good on it. It turned out it 
was a bank error, but the bank error came about because her 
funding was so thin, that the wire transfers would come the 
day the checks were due out. 

I put it to you that any banking system is going 
to let you down if you play it that close to the line. 

Where would the wire transfers come from? 

A I don't know. But she spent most of her time — 
•he would tell me she worked night and day for GMT. I saw 
very little evidence of that. She put In, I think, about 
three useful hours a day that I could detect. But she spent 



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an awful lot of time worrying about the financing, calling 
bankers in Florida and Switzerland, always with me walled 
out of that, on very secretive transactions to bring money 
in, and it all had to do with her own personal financial 
structure. 

That's what she told you? 

Do you have any personal knowledge? 

A Yes. She told me that, and I also was able — I 
will tell you, Mr. Kerr — to conclude that realistically, 
from all the bits and pieces of the evidence that I picked 
up. 

Q Do you, today, have knowledge of where she 
actually got the financing for this operation? 

A No, I have no knowledge of where she ever got any 
of her financing. I know she had many different efforts 
that she would conceive in her mind. She went to many 
different people to seek money, and it was on a month-to- 
month basis. It all had to do with a trust fund she had, 
which she had created sometime ago and was an irrevocable 
trust. I believe it's in favor of her son, but I really 
don't know. Irrevocable on his part, breakable on her part, 
but only at enormous cost. It would cost her millions of 



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dollars to break the trust, and she was always trying to 
borrow money on that trust. 

Do you have any knowledge of the identities of 
people that she was trying to borrow money from? 

A I don't, well, let me correct that. From time 
to time, she would introduce me to people that she said she 
was trying to borrow money from and give me their names, 
but, you know, they didn't stay with me. They were 
businessmen, always friends of hers, who would be introduced 
to me in the office and then would leave, and I would never 
see them again. 



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Do you know of any lending relationship between 
her and Werner Glatt? 

A No, I don't. But I came to know a great deal 
about Mr. Glatt. 

We'll come to that at another time. You don't 
know of him being a financial source for Ms. Studley? 

A No, no. She never revealed that to me, although 
I suspect Mr. Glatt, if he wished to do so, could erect two 
or three of these buildings that we're in right now. 

Well, let me focus again on this letter. 

were you aware at 'any time that Ms. Studley's 
bank in Geneva, Switzerland was also the bank of Werner 
Glatt? 

A No, I was not, but it would not surprise me that 
that was the case. 

But I was not aware of that. 

Cooing back to the company, at the time you 
joined the company, how many employees did it have and can 
you identify them for us? 

A Yes. I think I have already done that for Mr. 
Albright. 

You did in terms of her son. 



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A When I joined the company, the total employee 
structure as known to me consisted solely of Barbara jtudley 
as president, Robert Schweitzer as executive vice president, 
»1ichael Timpani, who had joined the company about a week or 
a month, plus or minus, before I did and who I think you 
should talk to. 

Q He's a former member of the 

A I wouldn't say he 




I don't know, but he flew missions in 
Latin America for Eden Pastora and perhaps for other of the 
contras. 

I don't know who he flew for, but I knew he was 
down there flying missions as a private person. I don't 
know who financed him or who directed him to do that, but I 
reported that when I was here before under the subpoena and 
under the questioning that I received. 

So I'm clear, Mr. Timpani had joined the staff 
shortly before you did? 

A Shortly before, on the recommendation of General 
Singlaub. I had the impression he was a protege' of General 
Singlaub. But he and Barbara had done business before while 



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he was with an organization called Falcon wings, which I 
know a little bit about. A very honorable and good aviation 

company out in the southwest. 

I 
In terms of the business that Tympani had done 

with either Ms. Studley or General Singlaub, do you know 

what business it was? 

A It was to try to, you know, broker airplanes — 
noncombat aircraft from a seller to a buyer. 

Was he doing that on behalf of General Singlaub 
and Ms. Studley? 

A I think one of the aircraft that he had an 
interest in — this is long before I came there — was to 
get an airplane for the contras or for El Salvador, a gift. 
I think he may have been the man who flew the Lady Ellen 
down there. 

A helicopter? 

A Yes. It's been in all the media reports. I'm 
juat not sure of what his connection was because it never 
came to light when we were there, except he had flown either 
at General Singlaub' s behest or reconnendation, or perhaps 
even directly for General Singlaub, and I suspect he wasn't 
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He may have been reimbursed as a pilot when he 
was flying for Eden Pastora. And I think that connecting 
him with Barbara Studley at a salary perhaps of about 40,000 
a year was a way to get him some compensation for the 
patriotic — and I put that in quotes — work he had been 
doing before. A very honorable young men. 

Do you have any knowledge of the role he had 
played in the trip that General Singlaub and Ms. Studley 
9 made to Costa Rica to meet with Eden Pastora on March 23, 
.0 1986? 

A None. And I knew nothing of that trip at the 
time they made it or immediately thereafter. I only came to 
learn of it in bits and pieces. 

There's a picture of Barbara Studley and Eden 
Pastora and General Singlaub obviously down in that area on 
the wall of her office. 

What was Timpani' s function at GMT at the time 
you joined GHT? 

A He's a very capable aviation expert. He handled 

20 aviation matters. That was another one of the problems. He 

21 was supposed to be, along with Michael Marks, one of my 



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But, Barbara Studley repeatedly broke that chain 
of authority of command and went directly to them. 

I would see little notes that would be on the 
General Secretary's desk asking him, quote, "Here's an 
aviation conference. Do you think we should go to it?* 
Right up to the week that I left. 

But, Barbara Studley tended to regard him as a 
son and told me that, and I tried to get her to work, you 
know, through a system, so if she wanted to task them, she'd 
task me and I would task them or at least be knowledgeable. 

I didn't Intend to be a bottleneck. And I 
explained to her if I was going to be an effective vice 
president, I had to be in charge of these two people. I was 
never in charge of her son. 

Timpani was still in the employ of GMT at the 
time you left* is that correct? 

A That's correct. And I don't know if he's still 
there now. I would think he is. 

So we have gone through Ms. Studley, yourself, 
Mr. Timpani. What other employees were there? 

A There was a girl who she has discharged, I'm 
told, fired within the last week, by the name of Cynthia 



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Brein ~ B-r-e-i-n — I guess it's i-n-g — went with her to 
Tel Aviv when she shut the office down. 

So that would have been back in 1985? 

A Right. Cynthia could tell you all about whoever 
ran that office and what her beliefs were with respect to 
the honesty and integrity of that individual and why Barbara 
shut it down. 

You'll get the same information from Barbara, but 
if you want an independent source who is no longer 
associated with GMT, Cynthia would tell you the truth, and I 
believe she would tell you what I'm telling you. 

Barbara shut it down, not because she thought he 
was doing any business with Iran, but because she thought he 
was up to something and couldn't figure out what it was and 
got rid of him. 

Q What was her function In the office at the time 
you were th«r«7 

A She was general secretary and the accountant, so 
she would know a great deal about the bank accounts and the 
personal affairs. And because Barbara was always 
dissatisfied — 

You said she has been discharged. Do you know 



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why she was discharged? 

A NO, I don't. But it happened recently. Barbara 
wanted to discharge her earlier and I pled for her 
retention. 

why did Mrs. Studley say she wanted to discharge 
Ms. Breining? 

A I think the reasons were fair and I don't think 
we should go into that because it has nothing to do with 
your investigation. 

Well, it may. 

A But it doesn't. 

You're not going to tell me what Mrs. Studley 
told you; is that right? 



^1^10 She was just unhappy with her. 

I would offer to you that I don't think any 
employee would be acceptable to Barbara Studley over a long 
period of time. She's capricious, willful, emotional and 



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Let me put the Question to you this way. in 
terms of what Mrs. Studley was unhappy about Ms. Breininci 
for, did it have anything to do with a refusal to alter 
books or anything to do with the books? 

A Oh, I don't know. I think it was more personal 
habits, that she found shortcomings, as you will in any 
secretary. 

But there were also great strengths that were 
present. 

You know of nothing relating to her accounting 
duties that caused Mrs. Studley to — 

A NO, other than that she felt she didn't do the 
accounting properly. Let's see. I can give you one thing. 
That she transferred money to the trrong account. 

I was never told which were the two accounts, the 
wrong and the right one. I was told she had left sensitive 
flies out. Piles, incidentally, which Barbara said I 
wouldn't even want you to see. 

Do you have any idea what those files relate to? 

A No, I don't. And now you can see all the things 
that led up to my wanting to resign. 

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A There came, a very good woman whom you should call 
in, a young girl, I would guess about 28, in her mid- 
twenties, Fran. I think her last name was Hovey or Povey — 
H-o-v-e-y or P-o-v-e-y. 

You can get her name from GMT. She became the 
accountant and one of my concerns that I expressed to 
Barbara was Fran knew all the details ot the banking 
arrangements and I knew none of there. 

I said, 'Here we've got a person supposedly as an 
assistant secretary," which is what I was told, to assist 
Cynthia because of Cynthia's alleged shortcomings in the 
secretarial area — to do the accounting, do the secretarial 
work and the accounting. 

But it turned out that Fran, who was quite 
cooperative when I asked her to do anything, regarded 
herself as Barbara's personal and private accountant. 

Now you see the running together of the person of 
Barbara Studley and her financial transactions with the 
company. If you need a source who is totally knowledgeable 
in a way that I never was, even a fraction of all the 
financial transactions, this would be Fran. 



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She came from a bank. In fact, I think Barbara 
met her through the banking connections. She was a friend 
of Cynthia's and was the person at Virginia National or 
First Virginia, whatever the bank was — please don't pin me 
to that — that they were dealing with here in Washington. 

So Barbara recruited her from the bank to do what 
she was doing in part for her in the bank. 

When did Ms. Hovey join GMT? 

A I would say right around the first of November. 

And at the time you left, she was still an 
employee of GMT? 

A Yes. Still very much there. 

And at the present time? 

A Very much so. I had occasion to talk to her this 
morning to say that I wanted to notify then that I was 
coning over to respond to your subpoena. And I also wanted 
to get sone kind of a financial accounting for the salary I 
received and how they had disbursed that. 

I never received a check voucher that showed what 
went to the State of Virginia and what went to the federal 
government. And I frankly had doubts because of the sloppy 
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affairs, whether these payments had actually been made, and 
I wanted to at least have a check voucher. I repeatedly 
asked for one. 

You did not ge* a W2 form for 1986? 

A They refused to give me one as of this morning. 
They said they couldn't and I shouldn't have one. So I 
asked for a statement on company stationary, signed by at 
least Pran as the accountant but attested to by an Arthur 
Sullivan — there's another name for you — their auditor. 
And Fran, with almost hostility, told me that I 
had no right to ask for it — she implied I had no right to 
ask for it. 

Just out of curiosity, how did you report your 
1986 taxes? 

A I did get a W2 for '86. 

So you don't have one for 1987? 

A I didn't have one and I requested one or at 
least son* kind of voucher. Before I came in the Army, I 
worked at a series of Jobs and positions in journalism and 
labor unions and humble occupations. You know, when you're 
working as a waiter and a bus boy and things like that, 
working as a mechanic, doing all kinds of odd jobs. 



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And even in those ancient days, when you weren't 
computerized and had staff to do it, any time you left 
employment, you were given a W2 form, once you said that's 
it, I'm not going to trark here any more, they always gave 
you a W2. 

It could be July, they gave you a W2. And your 
problem is to save those so you didn't have to rereguest 
them when the time came. 

And I was very surprised. But it was more than 
just not getting them. They didn't want to give me one and 
didn't want to give me any real accounting, so by pressing 
Fran to the point of annoyance in March, I finally got an 
unsigned, typewritten list of what was paid. 

But there was no signature on it and I didn't 
have a comfortable feeling that these payments had been 
made, and I think with some testiness, Fran said they had 
when I asked her very politely if the payments had been made 
and said, 'Could I please have some showing of this?" 

So you would have had this conversation with Mrs. 
Hovey in March, after we served you with a subpoena? 

A Oh, I have asked her every month since she came, 
starting in December — December, January, February, March 



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and April, this morning. And there was always resistance. 

when did you actually get the statement? 

A I haven't. 

You have not gotten the statement? 

A No. I got, as I say, with much pressuring of 
Fran, a typewritten sheet with no signature on it that just 
said, you know, so much for federal income tax. 

Q You got that when? 

A In March. 

Late March? 

A I would say yes, but I'm not sure. I would not 
want to throw a rock at them. 

Did you get it by going over to their office? 

A I didn't want to do that, but I think I fi.ially 
had to. Barbara did not pay m« when I resigned. The 
February pay. 

And I didn't receive it until the 12th of March, 
although everybody else in the company had been paid on the 
1st. And I finally had to talk to Barbara and said, 'l 
really should have been paid when I left. 

I was ouite willing to wait until the 1st of the 
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been paid at the same time everybody else was paid." 

And she explained it was part of financial 
difficulties. I said, "Well, I shouldn't be bearing the 
brunt of those, but I'm willing to do it." 

So she asked me or Fran to hold the check and I 
did for a couple of days, all of which is very strange, very 
unprofessional, very unbuslness-like. 

And when I got the check, I couldn't comprehend 
it because it didn't make any sense. I asked for statements 
and I think I got one in pencil. And then I finally got a 
typewritten one which didn't make a lot of sense. And I 
finally got it telephonically, so the statement I'm holding 
right now in my 1987 estimated tax is a handwritten 
statement which is the most comprehensible one. And I'm 
going to believe that they made all the payments. 

Fran is very insistent that they have and I'll 
accept that. But I'd still like to have a voucher or a 
piece of paper or a check stub or something that shows this, 
you know, with a name on it, and that's what I asked for 
this morning. 

Were you in the office of GMT on March 27, the 
day Ms. Studley was served with a subpoena from the House of 



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A NO. And I didn't know that that was th« data. 

All right. I'll coma back to that. 

A Yas, you should bacausa wa hava to talk about 
GMT. I did Intarfaca with than aftar that. 

Lat ma coma back. You talkad about Fran Hovey. 
Any othar employaaa at tha tima you can* on board or 
thareaftar of GMT? 

A No. Ona of tha day* that aha f irad Cynthia — 
and I think aha firad har savaral tlmaa or attamptad to — 
thara was a Rally Girl who caaa in, but sha was a total 
ciphar and didn't contributa or laarn anything, I'm sura. 

NO othar full tin* anployaaa? 

A NO, sir. 

In taras of har son, har son's last nama is Marks 
— M-a-r-k-s? 

A Michaal Marks. 

His position, frankly, wasn't all that claar to 



20 A I would say ha was tha raal axacutiva vica 

21 prasidant, but ha was not prasantad that way at all. Ha did 

22 all tha intarfacing with his mothar, usually bahlnd closed 



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doors, sometimes not. 

A very fine young nan. He has a law degree from 
University of Florida, or the university of Miami, from 
Holland Law School. I think it's the University of Miami. 
Don't hold me to that if it turns out to be the University 
of Florida. 

But a guy who is totally overwhelmed and totally 
dominated by his mother. He will do anything sh« tells him 

to do, ^^■^^H^BHU^^IB^^^HI^^^^^B^H^^^ 



But, a fine young man. I don't want to — here': 
a young man. I think his mother has been through two 
marriages. I think he is the son of the first marriage. I 
think his father is Jewish. That may explain some of the 
affinity for Israel that Barbara has, which she has. 

It's a very real and commendable liking for the 
Stat* of Israel and a desire to be supportive of them. 

Q Are you familiar with specific officials of the 
government of Israel that dealt with Hs. Studley at the tim 
you worked with GMT? 

A Only! 

Can you spell that? 



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was a former attache who is now in business. 
And as you may know, the traditional practice in the State 
of Israel, as in many countries, is once you leave 
government service, either in the Foreign Office or the 
Ministry of Defense, you enter into one of these state- 
owned industries. 

For example, FIAT of Italy, Whitehead, the 
torpedo entity, which is one of their companies under the 
Fiat multi-national, is staffed almost totally by former 
Italian admirals and captains. 

I'm trying to show here that there's nothing 
wrong. In the United States, there would be difficulties 
because of the conflict of interest laws in military 
officers doing this, and in almost every other country, 
certainly to include England, where members of Parliament 
run busineaaes which do business with the government. 

At least one of them was in the business of 
brokering arms to us. And then sell to whomever the Central 
Intelligence Agency or whomever we were going to get them for 

The other countries don't consider that as a 
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the fact to emerge there's something wrong with Israel doing 
this. 

Q In terms of ^^^^^^^^^Hand his relationship 
with GMT, what was the relationship? 

A He was very close to Barbara and 
involved transactions that I'm not familiar with. 

You did not have occasion to work on deals 
involving] 

A We talked a couple of proposals. One was a small 
piloted aircraft which would be for intelligence collection 
which would be sold to another country, and we went in a 
very proper way. 

Had I stayed there, I would be arranging that 
interface and, for all I know, it Is taking place. I don't 
think we should name the other country because it's a good 
ally of the United States. 

Q No problem. 

A There's everything proper with this deal and it 
never matured while I was there. 

And then there was I think a proposal, another 
business f rom^^^^^^^^^finvolving automobiles that may 
still be alive and well in GMT. 



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1 you never had any involvement with an Israeli 

2 I attempt to sell torpedoes to any country. Is that correct? 



A No, I did not, but I know about that. I don't 
think it's germane to this investigation. 

Well, there I differ with you, but in terms of 
that transaction, that would have preceded your involvement 
with GMT? 

A It definitely did. But General Singlaub and 
Barbara and^^^^^^^^H were very much involved in that. 
It went nowhere because the State Department would not, as I 
understand it, allow an export license — a reexport 
license. 

These were foreign military sales. I think they 
were World War II torpedo models. 

Your understanding of when the torpedo 
transaction took place would be scnetime in 1985? 

A Yes, sir. 

Old you ever have occasion to talk with Ms. 
Studley or General singlaub about a proposal to utilize that 
transaction In conjunction wlth^^^^^^^^^H to generate 
funds for the centres? 

A No. I did learn of that — and I wish Mr. 



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Albright were back in the room — subseauent to that by an 
admission of General Singlaub, since I testified here on the 
17th of March, that he had gone to^^^^^Hon that cause. 

I have written on that subject while I was in GMT 
in a letter that Barbara saw and approved that said i 
thought any notion of this would be very much against the 
best interests of any of the countries involved: Israel, 
^^^^^^■the United States or the 

And, therefore, because it %«ould be in nobody's 
interest, nobody should think that GMT in any way espoused 
that. 

When I wrote those words, I believed that they 
were true. And I did not know how, incidentally — to 
clarify this part — that General Singlaub was acting on 
behalf of GMT. I thought he wai doing sonething on his own. 

So let me clarify that. I did not know that he 
was proposing that the money that would cone — now let me 
get this right ~ 

Let me give you another auestlon. 
A If I could just put the transition I tried to get 
on the record. I'm working very hard to answer these 
Questions very honestly. What's making it difficult is chat 




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you're asking me Questions about things that took place 
before I came, that I only came to have incomplete and 
incremental knowledge in little bits of pieces over a long 
period of time. 

Let me try to go back to this first Question and 
give you my best recollection on it. 

Sequentially, I first believed and was led to 
believe by Barbara studley, who was very indignant with 
General Singlaub at this point, that there was any 
connection between the early effort to sell World war II 
torpedoes in the hands of 




I then came to learn that General Singlaub had 
gone to^^^^Hwith a proposal of his which was presented to 
me as his idea to sell weaponry or things and to use the 
profit froa that, which would be generated, to give to the 
contra* as a gift, a donation by the buying country. 

I finally learned — and would say this would 
have to be in the latter part of March — that General 
Singlaub had some kind of a charter from colonel North to do 
this, to go to^^^^H or General Singlaub thought that he 
did. And you should ask General Singlaub about that. 



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Q I have spoken to him at great length about this 
point. 

A I may be bringing water to the mill because I'm 
giving you my recollection of what General Singlaub said to 
me, often over a long distance telephone call and, 
therefore, elliptically, because he's trying to preserve 
some type of operational security. 

I personally thought this was a bad idea. As I 
said, I stated so in writing. In fact, there's a document 
in GMT that will show that I said this, and addressed It to 
t h e ^^^^^^^^^^^^^^^^^^^^^^^H a u t ho r i t i e s , 
that it was a bad idea to do this. 

And that if there was to be any business that GMT 
was to be a part of, th« goal should be to procure whatever 
their legitisMt* needs w«re at the lowest possible cost to 



Lst me interrupt you. when would you have 
written this docunent? 

A In November. In some iteration in December, and 
in February, just before I left. 

So it would have been a series of documents? 



Yes. 



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And what wer« they? 

A All to that effect. 

Letters? Memoranda? 

A Letters. 

And they were addressed to whom? 

A Can we go off the record and come back on? 

MR. ALBRIGHT: Sure. 

(Discussion off the record.) 



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EVENIMG SESSro^J 

(6:00 p.m. ) 
BY MR. KERR: 
Let me take you to October-November 1986. At 
that time, in conjunction with a possible business deal 
between GMT and^^^^^H you had concerns, I take it, about 
General Singlaub being involved in a trip! 

Could you explain that to us, please? 
A Yes. H* made a trip I believe in October. It 
certainly wouldn't have been earlier than the end of 
September, ^^^^^^^1 in which ha insisted on going over 
there to use his influence and good offices to assist in 
this business deal. 

I believe, and Barbara Studley believed that 
because of his very legitimate philosophical and ideological 
orientations on other causes, that his activities or 
representations would be counter-productive since, based on 
discussions between Barbara and myself, these other causes 
that General Singlaub supported had nothing whatsoever to do 
with GMT or its business, especially in relation to^H 



Despite strong urgings and to the extent that we 



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could direct him, he went anyway. He did not tell us what 
he did on his other causes, but I knew he would be unable to 
separate himself from his larger interests, especially in a 
group of very staunch anti^-communists — ideological anti- 
communists^ 

So it was because of that that I entered on my 
to^^^^^^^^^^^^^^^with a 
knowing that despite General Singlaub's sincere best 
efforts, that assent had now been made more difficult. 

And I would like to tell you who accompanied me 
on that trip. 

Q That was my next question. 




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A Exactly in November. I think we left here on 
Election Day. So, the second Tuesday in November, so we 
could both vote, and then we went first tc 




We 1«{ 





And you returned when? 

A I would say about the second weeli of November. 
The firs t week, I would say, was spent inj 

I believe it was a Sunday morning, 

I remember I went to 
church lata in the evening downtown and then we left the 
following Saturday. 

And did there come a time in February of 1987 
when it came to your attention that there had been a 
proposal by General Singlaub to utilize profits from GMT 
transactions in -tiilicary -joods for the benefit of the contra 



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"Dovement? 

A That's correct. He told T>e that a year earlier 
and, again, I don't think he gave me the dates. I certainly 
don't recall them. If he did — and I don't believe he 
did — but, in an earlier effort to transact some business 

w i th^^^^^^^^H^H^^^H^^^^^^^^H^^^I^^^^^^^HI 

^^^^^^^|that he had proposed that some of the profits of 
such a transaction be given to th« contras on the basis that 
they were very anti-comraunlst. 

Barbara Studley was very anti-communist and so 
were the contras and that this would b« a way to send money 
to the contras through a business transaction which would 
not identify public] 




in Europe, would 
eftable thma to make a contribution to the war ~ I'm not 
using John Singlaub's words — the war against communism, 
without bearing any of th« onus or odium of making such a 
contribution. 

So that I understand what was being proposed. 
General Singlaub was essentially proposing that the^^^^^H 



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^^^^^Hagree to pay GMT more than the fair market value of 
certain goods, with the understanding that GMT would take 
that excess value and pass it to the contras. 
Is that correct? 
A Yes. And I'm glad you asked the question that 

6 way because when I learned this, which I would tell you was 

7 early in February, and if somebody with better knowledge says 

8 it was late in January, I'll accept it. But that's my 

9 : recollection of when I learned this. 

10 I I went to Barbara Studley and I said, "Barbara, 

11 this is a crazy idea. Old you agree to this? Did you know 

12 about it?" 

13 ■ And she denied emphatically, you know, with 

14 ; emotional, almost a tantrum that she knew anything about it 

15 [ or ever would consider it or condone it. 

16 I And I would tell you under oath that in all of 
I 

17 the conversations I had with Barbara Studley, there was 

13 never the slightest glimmer that she was going to take any 

19 profit from any business deal and donate it to the contras 

20 or anybody else. 

21 She was going to put it to a kind of operational 

22 fund to run the company. She always used the figure of 



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about S3 million so she wouldn't have to worry about the 
company financial structure, which she had been doing on a 
daily basis to the point where she would becoine violently 
ill. 

She wouldn't have to worry Cor I think she said 
two years and then she would use the money to give to me or 
to other employees, she said, on your recommendation. And r 
always pushed that aside. 

Mow, you learned this Information from General 
Singlaub? 

A Prom General Singlaub. I have no reason to 
believe that he wasn't telling me the truth. 

Was there anyone else present when he told you 
this? 

A No. He made a lot of trips in and out of 
Washington at that time and It may have been in a personal 
conversation with him in Washington, but I believe it was on 
a telephone call. I believe that It was even a long 
distance call. But It may have taken place in Washington. 

Old you make any note, memoranda, record or I 
recording of this conversation? 

A No, I didn't because it was such a bad idea and 



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Barbara Studley denied any knowledge of it. 

YOU did, however, write a letter in February to 
^H^^^^^^^^^^^^^H is that 

\ That's correct. And the reason I wrote the 

letter was threefold: One was when the Hasenfuss plane went 
down on the 5th of October and the Ollie Sorth revelations 
came out, whether there's any merit to there or not, it was 
clear that the authorities^^^^^^Hwould be very leery 
about entering into any business deal that would in any way 
connect them with any of these activities. 

I was always at pains initially on a speculative 
basis that they would just have these fears, and there was 
no basis for them to have the fears and to allay them. 

Then, in February, when I learned that General 
Slnglaub had Indeed proposed to them a linkage with GMT and 
with donations to the cause of the contras, I was horrified 
that h« had made such a proposal, which to me, entirely 
apart from balng bad business, was in the manifest 
dlslntarast of the united States govern ment, any U.S. 
company, the authorities ^^^^^^^^lany 
that you would be buying or selling from In order to assist 



them, and the contras. 



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I could sea that everybody was going to lose from 
such a proposal. So, armed with Barbara's very etiotional 
outrage that this was never considered by her or by GMT at 
one time and my own strong belief that it was a bad idea and 
the other convictions, since I was the negotiator and oeople 

■would not deal with her at all ever again, that I 
could control this thing, I wrote the letter that said we do 
not believe that this is in your interest or the interest of 
any of the other parties. We have never considered this. 

I took Barbara's word, mainly because of the 
enormous emotion that carae up, the vitriol against General 
Singlaub, how could he have ever done this, you know, that 
kind of thing, as the absolute truth. 

So I wrote what to me was a very truthful and 
accurate letter saying w« do not propose to ever use any 
profits; instead, what we propose to do is sell you whatever 
it is we're ever going to sell you at the lowest possible 
price. 

And I, Incidentally, was determined that when the 
transaction was finally concluded that that's exactly what 
would happen. 

Do you recall the name of the person to whom t^iat 



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letter was addressed? 
A 




He would be mortified if you did. 
The letter went out under your signature? 
A Yes. 

And the approximate date was when? 
A The 16th of February. And let me give you for 
the record so it doesn't appear there's anything 
Machiavellian or subterfuge. When I wrote the letter I was 
employed by GNT and I signed it and It was delivered to^B 

[because, remember, at this 
time, they said red light, break off all negotiations, we're 
not going to do this. 

And I knew they didn't understand how good — 
really good the field was for them and some favorable 
developments that had taken place. 

I'm going to guess my original letter was on the 
16th. I then left GMT and as I left I learned about three 



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more very favorable developments, including — let me just 
say very favorable developments that would cause any buyer 
to want to go ahead with the transaction. 

Now, I had a conscience problem. I learned this 
as r was leaving GMT, while I was still salaried by them. 
But, my letter, which was previously delivered, because of 
the decision to leave on the 20th, was taken quite swiftly 
and I offered to stay later and Barbara said no, let's just 
do it all today, and I said, "That's fine with ma. I just 
would like to, you know, I'm resigning on integrity reasons, 
but I'm willing to stay until the end of the month if you 
need me." 

She said. No, no, it's better we do it today. So 
now I go home and I think about the fact that letter — had 
I stayed one more day, even more than cleared out my desk, I 
would have rewritten the letter and changed a copy putting 
in more favorable infomation but leaving the preamble the 
same, which was this business of we never considered, we're 
not considering now and we never, ever would; wild horses 
couldn't make us take one penny. 

I think maybe that word is even there, not one 
dollar would ever go to any other country. I said that 



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despite ideas which were advanced in some quarters, knowing 
that General Singlaub now is the one who is advancing them, 
and putting that in there because if they knew it, they wou] 
understand that General Singlaub is speaking for himself, 
not GMT, which is the way I believe the transaction to be at 
that time. 

So I offered to rewrite the letter. Barbara was 
out of town on one of her frequent banking transactions. 
This one was down in Miami. Her son thought that was an 
excellent idea, so I redrafted the letter to put in these 
more favorable considerations in Ray Cline's office. 

I might add at this point that] 




So it was proper for m« to talk to him about 
this. H« was now following on behind me and he thought it 
was a good idea to rewrite the letter and I rewrote the 
letter. 

I was told by her son that Barbara was very 
pleased at the way I had rewritten it because it was a 
better selling letter, and I said, "I don't want to come 



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I back to GMT, but I will go to Dr. Cline's office to sign tne 

letter if you ever type it up in final and present it for 
I resignature. ■ 

And they sent it over with the date of the 28th 
of February and I said, "So, I won't sign anything after I 
left." I would sign any letter or revision, since I did iiy 
own revisions. I wrote every word of the letter, 
incidentally. Nobody helped me on it, every word of the 
revision, but nothing that would be post-dated after the 
20th, because that would not be honest. 

And nothing ever came of that. I had marked up 
the original letter of the 16th, the original signed, to 
redo it to make it factually correct with these better, more 
recent developments, and it actually transpired on the 
weekend of the 13th, 14th, 15th — I think you're going to 
find the 13th is a Friday — so there you are. 
That's how it happened. 
Do you know if the separate letter ever got 
delivered tc 

A No. And I think Barbara's approach was that Dr. 
Cline should sign the letter, and I told him, you know, be 
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JU/bc I I to all the things that I'm attesting to that have taken 

2 I place. 

3 But, however you want to do it, it's up to you. 

4 i All I'm trying to do is in conscience not leave them with a 

5 I less-effective letter than I would have written the day of 

6 the 20th if all the problems of the 20th hadn't occurred. 

7 Is that clear? 
That's fine. With regard to what occurred in 

9 : March, you personally learned in March additional 

10 information from General Singlaub about his authority to 

11 make this approach tol 

12 ^ Yes. And, again, this has to post-date my 

13 ; meeting with Mr. Albright, unless I don't recall what's in 

14 that transcript, unless I told you about this then. 

15 I No, sir, you did not. 

16 I A So I will tell you after the 17th of March I 

17 learned froB General Singlaub again, and again it was on 
13 raising the question with him, because I was reading the 

19 stories in the newspaper or getting insinuations from 

20 journalists who were calling me to develop a story, which I 

21 was denying. 

22 ! I asked General Singlaub — and remember, I was 



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the one who Initiated it — "Did you have a charter?" See, 
I thought this was just General Singlaub, the activist, the 
conservative, the true believer and the need to resist 
communism doing this on his own, free-lancing, which he 
does. And there's nothing wrong with that but if we ever go 
to World War lit, we'll wish we had some more General 
Singlaubs around before the fact. 

And I asked him if he did this on his own or he 
had some charter at the time. He told me to my horror that 
he had a charter to go from. Colonel North, but he believed 
that it was from the President, because he said Colonel 
North had told him it was the President who wanted him to do 
it and he needed to be able to tell — he needed that 
because either the people ^^^^^^| had previously asked hiit 
or he knew he needed to tell them. 

I think it was the eomer« they had previously 
asked him. "Are you saying this on your own authority or is 
this froa the President of the United States?' And he 
assured them It was from the President of the United states 
because — third hand, fourth hand for you — he told me 
that Ollle North told hlra it was. 

Now, you had this conversation with General 



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Singlaub over the telephone or face to face? 

A r think that one, because it was — that one took 
place here in a hotel room, the Wlllard Hotel, I'm going to 
tell you. Please note, Mr. Kerr, that if I'm wrong on the 
dates, t'm trying to struggle out when all this happened. 

Just do the best you can. That's all we ask. 

A I know one thing for sure. Because of the long 
session, the detailed questions, ray attempts to even over- 
answer the questions to be sure nothing got left out with 
Mr. Albright and his colleagues. If I had known this then, i 
would have told him. 

Q I have no doubt about that. 

Was there anyone else present when you had this 
conversation with General Singlaub? 

A No. 

Just you and General Singlaub? 

A Just General Singlaub and I. Whether it was 
telephone or in person. 

Old you make any notes, recordings or any other 
documentation? 

A No, sir, I didn't. See, he was in town to 
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There's no way he's going to tell a lie or dissemble. And 
if he's asked, the one thing that he would do that is 
perhaps different from me, he'll answer only the question 
that's addressed. 

He won't perhaps help or over-help the counsel 
the way I tried to do, and I don't know that you always 
appreciate it. 

Your deposition was taken March 17. 

A Right. 

General Singlaub was interviewed by me and other 
attorneys on the I9th and 20th of March here in Washington, 
0. C. 

A Right. 

Is that the right period of tine? 

A No, I think It was later because — do we know 
when he left? 

Me left the States or left Washington, D. C? 

A I'll tell you why I know it was later. He left 
Washington, D. C. So that may have been on the telephone, 
the conversation, because I called Mr. Albright to tell him 
one or two more things and I know that if I had had this 
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I can tell you on the I8th and I9th he was 
totally preoccupied with his lawyers and the committee. r 
think it was after he was all through, at the end, and t 
assumed that this had come out in his testimony to you. 
May I ask, did it? 
In a sense, it came out. 
A Okay. That relieves me. 

With regard to the description of the charter 
from Colonel North, did he give you any more detail on the 
nature — 

A My Impression — remember the parsing of this — 
my Impression was that his Impression was that whatever 
Colonel North told him had corae from the President. In 
fact, I think he told me. If my memory comes back, he told 
me he pressed Colonel North on this. 

He said, "I'll have to tell him that this comes 
from the President. Does It?" 

And Colonel North said, "Yes, It does." 
I think his question was, "Is the President aware 
of this and does the President personally want this?" 

He said to me Colonel North told him — look at 
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Did he place this event in time for you? Did he 
say when this occurred? 

A No. And I have no idea except it was in the 
ancient past. Again, I'm giving you my best recollection. 

That's all we're asking for. 

A It may be, Mr. Kerr, that he had this mission in 
connection with the September trip and he may even have told 
me that, but I can't recall that now. If you ask him, he 
will tell you. 

October 1986? 

A This year. 

This past year, 1986? 

A See, now, this would explain why h« persisted in 
going when, at that time, he did not tell us that he had a 
White House mission, it he did, and why he just sloughed ofC 
our concerns and was just Impervious to our pleas not to go. 
If he felt he had a mission froa the White House, 
no power on earth could have kept hire from going. 

Apart from this March conversation you had with 
General Slnglaub, had you ever discussed this matter with 
General Slnglaub on any other occasion? 

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ago, more than six -nonths, and I don't recall when, that he 
had raised this as an idea, that countries should buy 
-nilitary goods that they need from U.S. companies that were 
"right companies" who would then give part of that profit to 
aid the contras and other resistance groups. 
It wasn't just the coni 




General Singlaub has a lot of causes. 
I understand. Do you recall hire having raised 
this to you sometime in the fall of 1986? 

A Let me bring out something I was going to show 
you. This exists only as a fragment. This is a paper that 
Barbara Studley gave me before I went to work for her as an 
idea that was intended to demonstrate her own intellectual 
depth and ability to understand international relations and 
cone up with innovative, creative ideas. 

She insisted this was her ovm idea and always 
has. She asked me what I thought. I didn't work for her. 
I wasn't too sure I was going to and I just made a polite 
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She told me that General Haig thought it was a 



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Tiarvelous idea; he thought it was the greatest idea he ever 
heard of, Barbara Studley told me, when she went to see hin 
about it. It is a proposal of which I only have two pages — 
3 diagram and a paragraph four, which says, "Results". 




[would deliver 

arms to be channeled through a trading company — guess who 
that would b«? 

you understand it to be GMT? 

A That was Barbara's idea, of course. But in the 
model. It's just a trading company. To| 

Ifor freedom fighters, arms to be 
disbursed as per U.S. instructions. 

And now that is not a cosmetic. She is very 



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sincare when she says that. So she saw herself being at t-.e 
apex or the linchpin of a huge international relations 
trilateral or really more -han trilateral — a multilateral 
deal because it would involve resistance movements, and 
these were just notional in at least four countries. 

I think it isn't to be vain to say I am an expert 
in international relations. This is a crazy idea. This is 
an idea that a secretary of state and all his assistant 
secretaries would have a terrible time over several years 
putting together because look at the complexity of it, all 
the agreements you need, and you certainly have difficulties 
with^^^^^H^^^^^^^^^^^^^^^^^^^^^^^B the 
States and the private companies involved, each wanting to 
maximize the profit motive. 

As gently as I could, I pointed that out to her. 
She gave this to rae as my first project to bring to 
fruition, and the kindest thing I ever did to her with the 
idea was never mentioned it again. 
But here it is. 

Does it continue to be — 

A And the reason I bring it out now is I was going 
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pap«rs. It doesn't have anything to do with your 
investigation. 9ut I don't personally believe that Barbara 
Studley was capable of conceiving this on her own and now 
putting three things together, you know, the ancient 7\emory 



5 I of an earlier idea — > maybe it was a year ago when I was on 

6 active duty and General Singlaub proposed this to me — I 

7 thought it was such a bad idea. 

8 I just wanted it out of ay head. I told him it 

9 would never work and forgot it. Then you put it together 

10 i with these earlier questions you asked me, either 

11 i consciously or unconsciously, this probably came from 

12 ; General Singlaub' s proposal. 

13 I Now, it has nothing to do with this 

14 I investigation. I mean, this paper here. 

15 I Let -me put it more precisely. Do you have any 
I 

16 knowledge of consultations Mrs. Studley had with 

17 oCeiclals about this proposal? 

13 A None, because all I ever did was throw cold water 

19 on it. Too complex, too apt to go astray and too apt to 

20 involve anybody who got involved in it with subsequent 

21 I investigations, not by your committee but by other 

22 I committees. psei^a . ^^ 

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I think that thing is just fraught with the 
potential for kickbacks, for conflicts of interest, for 
gouging, for price ripping and of course you would need — 
if you wanted me to bring this whole thing to fruition, you 
would need at least a good bureau in the Department of State 
and full interagency cooperation, which is what she wanted. 

She wanted the United States government to put 
this deal together and then she would be the trading company 
that would profit from the whole thing. 

Did it ever come to your attention that General 
Singlaub, working in conjunction with GMTt had approached 
t ha^^^^^^^^^^^^l to arms 

transactions on behalf of the contras? 

A No, sir. And I would have recommended against it 
retroactively while I was there. I don't think these 
proposals — sincerely, I think they're in the worst 
interest of all the parties. 

^^^^^■needs our support. They don't need to be 
tarred with other controversial causes in the U.S. Congress. 

Bear with me now. You were not aware of an 
effort by General Singlaub to get^^^^Hto provide anti- 
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A I never heard of chat. 

were you aware of an effort engaged in by Colonel 
Sorth, amongst others, to getl 
September and October of 1986 to donate AK-473 to the 
Nicaraguan contras? 

A Sever. Now, I did know that General Singlaub and 
Colonel North had an interest in getting surface to ground 
handheld weapons into the hands of the contras, but I never 
knew that GMT had anything to do with that. 

You were not privy to a transaction that was 

to t^^^^^^^HII^H^^^^^^H *^° AK-473 to 
the contras in October of 1986? 

A No, sir. And I would think that would be very 
against^^^^^Hbest interests. 

MR. KERRt Can you mark this document as Exhibit 
2? 

(Schweitzer Deposition Exhibit 2 identified.) 
HR. KERR: If you don't mind, I will take a break 
for a few minutes. 

(Recess. ) 
BY MR. KERR: 
General, I'm going to take you back to August of 



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1986. I want to ask you about some of this that took plac« 
in 1986. In August of 1986, a vessel known as the PIA 
VESTA — V-E-S-T-A — was being held by the Government of 
Panama and there was considerable controversey in Latin 
America over that vessel and its relationship or what people 
thought was its relationship to the Nicaraguan contras. 
Do you have any knowledge of the PIA VESTA? 

A No, none whatsoever. However, I offer it to you 
because it sounds from your question like you think there 
may be a connection with GMT. 

The first three weeks that I was at GMT, that's 
all Barbara Studley talked about. 

The PIA VESTA? 

A Yes. And I could never understand why we were 
wasting so much time talking about this. A nan by the nan* 
of Duncan — 

Yes, sir. 

A — whom I never met, who came through her office 
and she felt herself — 

Let me stop you. This is David Duncan. Were you 
present when he cane through the office? 

A No. I never knew him, spoke to him or anything 



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Q Was it your understanding he came to the office 
before you had joined GMT? 

A Yes. And whatever it was, she felt herself 
charged to write a memo and deliver it to Ollie North, she 
then was going to give that memo to a newspaper man. I 
cautioned her against that because I said, 'You can make 
yourself civilly liable in this regard." 

And I could never — in fact, after a while, 
after I had been there longer, because it kept coming up — 
the subject never really went away — I asked her why are we 
always going through the Washington Post news story? 

I said my greatest curse when I worked in the 
White House was we would spend a whole morning answering the 
Washington Post, Instead of getting down with the business 
of government, when the stories had no relevance to reality 
or what V were doing or what we knew about it. 

I said, "It seems to me you're falling into the 
same trap that people in government do. The higher you are, 
the deeper you're in the trap." 

I never got an answer from that. So, if you're 
going to suggest to me, you know, that somehow that was her 



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ship or she was involved ia it, I never knew that. But it 
would make some sense why we had all of these incessant 
conversations, but nowhere did she say that's Tiy ship. 

I'll give you a series of questions. Ifou do not 
know David Duncan, is that right? 

A No. 

Did she ever describe to you Mr. Duncan's 

relationship with a Miami arms broker by the name of Ronald 
Martin? 

A Yea. 

And what did she tell you in that regard? 

A Just that he was an associate with them. 

Incidentally, that's one thing for you, Mr. 
Albright. When I was here, I was always tempted to call you 
back -- may b< I did. The world's living, breathing expert, 
next to^^^^^^^^^^^H in ^^^^ i' " 

this building of Senator Helms. It's Deborah DeMosa, the 
brother of Mark DeMoss, now trying to defend the poor PTL. 
Deborah knows every bit of dirt that exists on 
Ron Martin, the Tainiami gunshot, David Duncan and ewery 
other crook in ~ and I want to distinguish that. I'm not 



saying he' s a crook. 



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I 3hould say every crook in Latin America, 
especially in Central America. She and ^|||^^^^^Pare c'le 
two best sources in Washington, and I believe that Deborah 
DeMoss forms Barbara Studley's thinking on a lot of these 
issues. 

Q Why do you believe that? 
A Because they are in constant telephone 
communication. They are from the same part of the country. 
Barbara Studley would have learned that she's a Born Again 
Christian. Can we go off the record just for a second? 

MR. KERR: Certainly. 

(Discussion off the record.) 

THE WITNESS: Whenever she and Debbie, who t 
initially thought was an ideologue, when I was on active 
duty in the Army, who was so conservative that she was way 
to the right of me and didn't see reality properly, I came 
while on active duty to develop a tremendous respect Cor 
h«r. 

I thought that she was just a young girl, you 
know, romantic, seeing some of these dashing counter- 
insurgency, anti-comraunist people like Roberto D'Aubbison 
and become enamored of them philosophically. 



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Debbie DeMoss is one of the sharpest, moat 
intelligent and certainly has got the greatest depth and 
greatest knowledge of any civilian that I have run into in 
Washington. And if you want information on Ron Martin, the 
Tamiami gunshot David Duncan, she's the best one to go to 
and I feel from, again, the bits and pieces that she's 
formed a lot of Barbara Studley's attitudes and thinking, 
because I found Barbara Studley kind of misquoting what 
would turn out to be very accurate quotes from Debbie 
DeNoss. 

I think, with Debbie, you have to discount some 
of her very legitimate conservative bias that you may not 
share in order to appreciate her factual data bank and the 
basis of her information. 

Old you ever learn of a relationship to General 
Singlaub by Mr. Martin? 

A No. And I'd be amazed if he had one because 
everything that I have heard of Hr. Martin would make him 
the absolute antithesis of General Singlaub, who is kind of 
an archetype of honor and duty and country and honesty and 
almost all the last century codes of ethics. 

You very rarely meet a man who has a sense of 



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what It Is to b« a gantlaman. 

Old It ever come to your attention that General 
Slnglaub was trying to encourage the Central Intelligence 
Agency to buy what is known as the Ams Warehouse^^^^H 



A No. But I think it would be a good idea if they 
had one. 

Do you know who owned that warehouse? 

A No. 

Mr. Martin. With regard to PI A VESTA — 

A Wait, let me correct that. I think I had learned 
again since I came to GMT that Martin was in the warehouse, 
and I believe t may have testified to you — I certainly 
have to some other cooaittee — that at a time %rhen the 
Soldier of Fortune magazine people were do%m there, there 
was an attack on the eaap, and in order to get ammunition. 

This is a Debbie DeMoss story. They had to call 
Ron Martin, and before he would open the doors to allow 
ammunition to resupply the defenders, he had to get a 
voucher that they %rould pay for it. 

In other words, he sold them the ammunition they 
needed to save their lives during the height of the attack. 




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And if that's true, that's all you need to know about Mr. 
Martin. 

Q Did Mrs. Studley ever relate to you what 
transpired in her meeting with David Duncan? 

A Yes. She talked endlessly about it, but it just 
didn't fit in, it wasn't relevant. She was very 
antipathetical. 

To Mr. Duncan? 

A To Duncan. Showed no warmth or relationship or 
anything else. Very antipathetical towards Ron Martin, 
again reflecting I think a lot of Debbie DeNoss what I would 
believe to be accurate judgment. 

With regard to the July '85 arms shipments which 
Mrs. Studley was Involved in, did she ever tell you who took 
delivery of that shipment? 

A I think she did. 

Did she mention the name of Mr. Delamico? 

A Yes. I think her version of that is he came down 
and kind of Interfered and took charge when he shouldn't 
have. 

Did she tell you who Mr. Delamico' s associate 



was? 



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A No, but I know. 

Who would that b«7 

A Ron Martin and another ^BIB person or two 
down there. 

Did she tell you where the arms that she caused 
to be shipped ^^^^H^^ ultimately ended up? 

A t4o. Well, le she did, I don't remember it. 

You don't recall her telling you the arms ended 
up in Mr. Martin's arms warehouse? 

A Yes. With that refresher, she did tell me that 
and she subsequently told me he sold them after she had 
noted them or the ship was prepaid for, that he resold them 
to the freedom fighters, and I think she said she got this 
from Adolpho Calero. 

Whether any of this is true, I don't know. You 
hear all kinds of stories. 

When did she have this conversation with you? 

A Oh, I think several times in the fall of 1986. 

Was there anyone else present when she had these 
conversations with you? 



Oh, yes. 
Who else? 



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A Michael Timpani would have been there at some 
versions of it. Michael Marks had some. Some with me. 

Did you ever see anything in writing about that 
aspect of this transaction? 

A Not that I can recall. 

With regard to the Duncan conversation, can you 
remember any more particulars about what she told you about 
her meeting with David Duncan? 
9 A No, because the whole thing just sounded so 

10 bizarre. I could never understand why she was so upset by 

11 the conversation, why she felt a mission to send a report of 

12 it to Ollie North, why she was even concerned or why she 

13 even received Duncan. 

14 She received him after he was in the newspapers, 

15 you know, telling wild stories, which Barbara said were wild 

16 stories. 

17 And I asked her, "Well, why on earth would you 

18 ever have hlra in here?" And I never got a satisfactory answer 

19 to that. 

20 Q Did Mrs. Studley ever tell you of a meeting she 

21 had with Robert Owen with regard to the PIA VESTA? 

22 A Never. And I didn't know she knew him at all. 



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She never told you an assignment she got Crorn 
Robert Owen to go to Geneva, Switzerland to meet with 
someone known as Patrice about the PIA VESTA? 

A Never. This all is supposed to be happening in 
the fall of '86? 

Q I believe it would have happened August 1986 and 
a bit before. Then the trip to Switzerland would have been 
the August-September period. 

A Well, again, then this would be justifiable for 
not telling me because It was not on my watch. See, when I 
came In, if I could add this now to reinforce what I said 
earlier, without holding school for her, I made very clear 
what my standards were and what my understanding of public 
policy law and the way the company was going to conduct 
Itself. 

And I may have had an unintended suppressing 
effect of all of these earlier stories because It would be 
clear from the most Inattentive hearing of what I had to say 
about all this, that I would be opposed to the point of 
quitting the company If anybody proposed or said they were 
doing It In the past. 

And, Indeed, I would have left right then. 



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At no point did Mrs. studley ever tell you she 
had received an assignment from Colonel North by way of Mr. 
Owen to go to Switzerland to gather intelligence on the PIA 
VESTA? Is that correct? 

A I would frankly doubt that Colonel North would 
have ever given her such an assignment. 

Did you ever read the August 29, 1986 memorandum 
she prepared for Colonel North? 

A I have no recollection of it. 

Do you know that It relates to the PIA VESTA? 

A I think I was used as a courier for that 
memorandum, but it was in a sealed envelope and I would tell 
you I didn't see it. 

Now, if Barbara says that it was shown to me, it 
certainly didn't register on me at all. And if it was on 
the PIA VESTA, it would have registered. So that would have 
explained why it was in a sealed envelop. 

In fact, I was told, if I recall correctly, that 
it was the report of her meeting with Duncan, and I was 
asked to — it was the first thing I was asked to do on the 
1st of September. 

Do you know that her meeting with Duncan 



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concerned th« PIA VESTA? 

A Absolutaly not. Sh« n«v«r mentioned It. 

Old you know that Duncan was th« owner of tha 
cargo of tha PIA VESTA? 

A Now, that she told ma. Sha cama In with this wlli 
story of how tha cargo — just so wild, I can't avan 
ramambar It because It was so patently untrue, and I had 
difficulty remembering things that are absolutely false. 

But his account as relayed by Barbara to me was 
so patently false that probably at the end of the day I 
didn't even remember It. I just dismissed It because It waai 
false. 

And Barbara said It was a crasy story. 

What were you told about the cargo of tha PIA 
VESTA? 

A X really can't recall with any accuracy other 
than It contained arms. And I think what I divined from th* 
story was here was a man who had a cargo of arms? he tried 
to blaae It on to — blamed the responsibility — assigned 
the responsibility to H|^H^^^^^^^^^^^^^^^mPwho 
was denying It; and I divined he hadn't been paid for it and 
didn't have the cargo, so now he couldn't go back to his 




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boss^^^^^^^^H bacaus* h* didn't hav* tha cargo to 
raasalgn or aaaign sinca It waa baing tiald in Panama ^^^ 
^^^^^^^^^^^^^^^^^^^^^^- hava tha 

monay. 

ha falsaly blamad^^^^^^^^^^^^^^^^^^f 
l(now.^^^^^^^^^^Hvary- 
imagina^^^^^^^^^HKould hava anything to do 
with an oparation lika thia, froa ay knowladga of hla. Ha 
danlad that ha did. " I 

Do you lutow tha ralationship batwaan thia cargo 
and an attamptad coup in] 

A Abaolutaly not. But I think thara waa a 
suspicion of a coup. tf« all did at that tima. And, in 
fact, Z waa activaly involvad in cautioning t^ 
Anaad Porcaa, including a sassion with^^^^^^^^^Qup 
hara, to aupport tha Constitutional authoritias, much aa t 
did with ^3^^^^|H^^^^H|H|^^^B in Novaabar, 
tmdar no circuastancas should anybody in tha Amad Forcas^f 
lo anything that could avan raaotaly ba 
aa a aova against ^^^^^^^^^^^| that 
did that, all tha aupport against tha eomaunist guarrillas, 
who wara than rampaging^^^^^^^B would ba lost. 




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And I said you shouldn't do It on th« high 
ground* that It's wrong; your constitutional oath has to b« t 
th« Prssldsntf In those days o£ yors and hav* to b« of yora. 
And, secondly. If you or anybody in tha Amad Forces does, 
they will move — the Congress will move to cut off very 
necessary support at a time when it's very vitally needed 
and we're about to see a whole new phase where the guerrillas 
are on the decline and the governaent is on the upgrade. 

When did you have this conversation with^^^^^H" 




conversation with hia and with! 

^^^^^■on several occasions in the summer and I would 
guess I was still on active duty, so it would have to be the 
spring and summer of 1986. 

And I would tell you, especially since this can't 
get into the public record, it fell on very, very receptive 
ears. I 6«d no resistance to it at all. 

And I always talked to him in concert with other 
key officers. 

This shipment of arms arrived off the coast of 
Panama on June 11, 19 



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A W«ll, it had a Strang* peregrination, it ttartad 
up In Peru. 

Wall, it want a number of placet, but it waa in 
Che area of Panama on June Uth. It was detained on 
June Uth. 

With regard to your conversation! 
|would that have been in that tiae period? 
I think so. 
Did you ever learn what the cargo o« that vessel 



was? 

K Pardon? 

Do you know what the cargo of the vessel was? 

A I didn't know at that time. I didn't know the 
vessel was there. I never associated it with a coup. 

Did you ever learn the nature of the cargo of the 
PI A VESTA? 

A Weapons . 

Q Old you learn that it contained 32 Bast G«rBan 
troop carriers, large nuttbers of AK-47s and self -contained 
anti-tank rocket launchers? 

A I think I did. 

Who did you learn that from? 



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A I don't know. Probably in GMT, or the press. 
Did the press carry those stories? 

They did in Latin America. I'm not sure how it 
was covered up here. 

A Well, I read the Latin American press. I'm just 
not sure where I got it. I don't know the number was 32. 
That's why I thought it was consistent, you know, with going 
to Peru. I believe it was headed for Peru. 

It's not the type of equipment that would be used 
by the contras, is it? 

A No, nor for making a coup. 

It would be totally useless for that. 
To tell you this, to help you with your insight 
on it, in the armed services of Latin America — and it's 
changing now as democracies come in — each of those armed 
forces ends up as its own amy, navy and air force. They 
have authorities, budgets and powers that are unknown here 
in the United States. We have trouble understanding that. 
So it's quite possible and I believe then and I 
do now that the shipment was originally destined for Peru. 
I think that the Navy had some agenda for the use of that 
stuff and that the President of Peru, Alan Garcia Perez, who 



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w« know very well, my wife and I, opposed this, found out 
about it, blew the whistle on it and stopped it, and that's 
what set the ship like this barge of garbage that's floating 
around without a home, sent the ship adrift. 

And at that time, a good ams dealer like Ron 
Martin would have then tried to find another customer or buy 
and that might have started the diversion. 

But I really don't believe that the] 
armed forces was going to use any part of that ship or have 
anything to do with it or was going to aake • coup. 

I think with a fragile deaocracy and where there 
are disagreements with the course of the President — I 
happen to agree what^^^^^^^^^^^^^^loing — Debbie 
DeNoss would not. 

I think he's on exactly the right course. I told 
hia that when I was there. And I told the generals that 
everytine I saw them and the coanandantes. And, eventually, 
he had to stand election before the people] 
and they would decide his fate. 

Nobody in the amed forces should. But, in a 
country — and I think I got this across to you before — X 
have before other Congressional Connittees. There's 



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something we don't understand. 

These armies down there have embedded in their 
constitutions that they're supposed to be the saviour of the 
constitutions. 

So, when we see them making coups, we say how 
terrible; they are doing that constitutionally. Now, that's 
changing as the democracies come in and they revise the 
constitutions. 

But what looks like a stupid, dumb power grab to 
us, is often in their part a very sincere we've got to go in 
and save the country from moving to communism, when you get 
a left to center president who starts to bring in things 
that Franklin D. Roosevelt did or Lyndon Johnson did. 

Some of these hard-line conservatives, that's a 
mortal sin and they feel obliged to remove him. 

Sometimes, as in the case of Allende in Chile, 
the man actually was on a path to make a Marxist-Leninst 
regime out of his country under the guise of democracy. 

So some of these interventions have been correct. 
The one against Peron certainly was. That was a 
dictatorship of the proletariat to the right. Some of them 
have been very misguided. None of them should be taking 



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place today* 

And that was always my counsel toi 
and thay headed it, and I'm sure they got It Crca others. 
But they took it more Crom me because they know I had been 
wounded many times by the communists. 

They knew I suffered for them and I espoused 
their cause of getting military assistance to fight their 
battles. 

I helped them with tactics and strategy. They 
knew I was in their comer and the State Departaent and the 
White House knew that when I gave them their messages, the 
message was more welcome than if they sent the ambassador 
in. 

Q You do or do not know the identity of a man named 
Patrice with whoa Ms. Studley met? 

A I never heard of him other than, you know. 
In the order of battle intelligence, that name coaws up. 

But I don't know him and don't know that Barbara 
Studley had any contact with hia. 

You don't know a meeting she had with Patrice in 



Geneva, Switzerland? 



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That p«rlod o£ tima. 

So it would b« fair for har not to tall ma about 



A No, sir, I don't. That would hava baan in 

August? 



A 
it. 

Do you know of any trip that sha took to 
Swi tzar land in tha fall of 1986, aftar you cana on board? 

A yas. 

Whan did aha go to Ganava? 

A That was a vary mystarious trip to Switsarland. 
I think thara wara a coupla, but thara was ona in Novambar 
whara nothing would do but that I laava^^^^^|to join har 
thara. And I damurrad to har graat annoyanca and I didn't go. 

Sha actually ordarad ma to go and I could saa it 
was ostansibly — it nay hava baan to culninata an 
arrangaaant wa wara working with^^^^^^^^^^^^^^^H 

fhat transaction was not maturing and I thought 
it probably a wasta of company monay to go to Switzarland. 
I fait uncomfortabla about going alona to maat with har in a 
hotal, avan though it was a total profassional business 
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want to do It. 

When was she in Switzerland? 

the sane time wae ^"^^^^^H 

So that would be the first week of June? 

A That would be in November. In fact, I think I 
got a long distance call froa her Importuning me to join 
her. 

Do you know who else was with her on that trip to 
Switzerland? 

A Yes. It trould have removed one of my constraints 
about going. Graham Lowe. Let me correct an earlier record 
when I finish this. Graham Lowe, a South African trader who 
deals in things I really don't understand or know a great 
deal about — commodities — joined us in December — 
January. Let's see. It would have been — no, it would 
have been November. In November — October-November — as 
executive vice president, as an aside in the office, she 
•aid that Graham Lowe had been coming in and out of the 
office, always u Ing her office and desk and is now a member 
of GMT. 

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told at the same time the secretaries were being told that 
he was a member of GMT. 

I reproached her Cor that and never got a 
satisfactory explanation. She said, "I only decided it when 
we were in Switzerland together.' 

So that would have been, to fix the date — and 
I'm doing this now piecemeal for you — would have been the 
middle of November. And it was after she and Graham came 
back from Switzerland. 

Had I known ha was with her, as I started to say 
earlier, that would have removed one constraint about going 
to Switzerland; but it wouldn't have removed the other, that 
there was no business purpose for me going to Switzerland. 

But she spent, she said, the whole time, night 
and day, working with the bankers there, and Werner Glatt, 
who was there. 

Do you know what business she was conducting in 
Switzerland at that time? 

K No. I was told it was to arrange financing and 

that there was soma very nebulous transaction that 
Graham — I never could get clear why Graham went with her. 

There was no professional reason that I could see 



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except something about a sugar deal. It never materialized 
or any details ever came clear. 

Do you have any knowledge of any other trips to 
Switzerland she made in 1986? 

A I didn't keep track of her, but she was 
constantly going to different places on banking trips, or 
saying she was going and then changing and cancelling. 

So my whole recollection is that she was 
constantly going away on banking trips. 

This memorandum to Colonel North that you 
delivered, who did you deliver It to? 
A To Colonel North. 
Himself? 
A Himself. 

Did you get any reaction from Colonel North to 
the memo? 

A I don't think he opened it when I was there. I 
accompanied General slnglaub. Remember, It's the first day 
of the job and I was still In a great deal of pain from the 
surgery on my wrist. 

Barbara asked me if I had any objections to going 
over to the White House to see Colonel North with General 



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Singlaub. I went with General Singlaub. He had written out 
on a card an agenda and he went through the agenda point by 
point by point. 

Mone of it had anything to do with shipping arns, 
and none of it seemed very important. In fact, I thought it 
was a waste of Colonel North's time. 

We spent most of the time talking about Colonel 
North's diminished position of authority and influence 
within the National Security Council. 

And that may be relevant to all of this because 
here, on the 1st of September, you have Colonel North 
telling me and General Singlaub in great detail how he is no 
longer handling these accounts and has no authority and has 
no ability really to change anything. 

Could you give us your best and fullest 
recollection of what Colonel North told you at that meeting, 
which would have been about the 1st of September? 
A I think I just told you. 

You told me in general terras. Tell me what he 
told you he was no longer handling. 

A I really can't. I think that's the best 
recollection I have. He deplored the way the State 



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Department was handling things, the way the Central 
Intelligence Agency was handling things; that he was cut out 
of everything, the way the Pentagon was handling things. It 
was not a diatribe but a jeremiad of lamentation on how 
badly everything was going and how — remember, the 
legislation had been passed by the House on the 25th of 
June, by the Senate — my note here is the I3th of August. 

The conference bill was in October, the thing was 
signed, I recall, by the President on the 30th of Oc^ber 
and nothing was moving later in the fall, and nothing 
appeared to be going to move and it all seemed to be hung 
up. 

I'd like to put on the record — you don't 
particularly want it — that I have credible knowledge that 
the liberal side — the Democratic side of the House — 
the people who for very good reasons opposed the aid to 
Nicaragua, were being fed information by the Sandinistas to 
slow this thing down until after the rainy season so the 
contras couldn't use the rainy season to get ready, and 
would have to use the dry season to get their logistics and 
their training and all that in place. 

And, therefore, you'd interdict them. If that's 



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true — and I think that people in the Democratic side of 
the House, who lent their office on the floor to that, did 
the United States a shameful disservice, and I couldn't 
think of strong enough language to use to describe that kind 
of almost, however unconscious, treasonable activity. 

Q Who else was present? 

A Putting that into the record, I'll let that go. 

Who else was present at this meeting? 

A General Singlaub and nobody else. 

Q Just General Singlaub and Colonel North? 

A Yes. As I said, I felt we were wasting Colonel 
Morth's time. I just sat there politely because the first 
thing the new boss asks you to do, there was no reason. 

I didn't know what General Singlaub was going to 
bring up. He may have rehearsed it with me by just giving 
me the headlines o£ the points, but what I can tell you — 
I don't have any memory, but I'm being honest with you on 
it — is that there ia not one thing that General Singlaub 
said that Colonel North responded substantively to with a 
yes or a no or fed the conversation. 

He just said I'm not handling any of those things 
any more on each point that General Singlaub brought up. I 



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don't remember the points because they weren't significant 
points. 

Was there any GMT business discussed? 

A Negative. That's why I couldn't figure out why 
we were over there. I had the impression that here's 
somebody who wanted to be part of the political scene, just 
sort of participating in the Washington Post editorial page, 
because we weren't over there on GMT business. 

Oh, he did asic — let's see. He asked about the 
list, and what list this was I don't Icnow. we'll get Into 
this later with the CIA questions. There was, as you know, 
an earlier, prior contact with Mr. Casey, and your questions 
will lead us to that. 

But there were questions about the list and what 
was on the list. What It said, I don't know. And the 
answer was I don't know, I'm just not handling any of that 
any more. 

So, le that had anything to do with GHT ~ 

A It didn't. 

Who asked about the list? 

A Singlaub. 

And he asked that of Colonel North? 



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A Of Colonel North and he got a nonresponse. 

What was your understanding what the list 
referred to? 

A weapons for the contras. 

And Colonel North said he was not handling that 
matter any longer? 

A He wasn't handling that. 

Q During the course of that — 

A And, incidentally, that whole conversation would 
have edified all the people who are now investigating this 
because there was a shared series of frustrations by General 
Singlaub and Colonel North on the restrictions imposed in 
the past by the Boland Amendment. 

There was not one scintilla, one scrap of word 
that I as an auditor to that thing for the first time would 
draw fron it that there was stuff moving anywhere, if you 
cam accept that. 

The conversation was how terrible it was because 
of all of this bad legislation passed, we haven't been able 
to do anything. 

Now, the legislation has been lifted, June and 
August, but nothing is moving, and nothing is going to move. 



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there's paralysis 

And the Democrats are trying to, despite the fact 
they passed it. Tip O'Neill and all those recriminations 
about what Tip was doing — and I think he was, very 
shamefully working to obstruct what the Congress had just 
passed. 

With regard to that discussion, was there any 
discussion between General Singlaub and Colonel North with 
regard to efforts to sell the assets of Project Democracy to 
the United States government? 

A Yes. 

And what were you told in that regard? 

A Again, it was a nonresponse. But that was one of 
the things on the agenda. I'm telling you I can't remember. 
If we hit one and I do, I'll come up on it. 

Do you remember the assets that were discussed 
belwaan G«n«ral Singlaub and Colonel North? 

A Airplanes and I think Infrastructure. A landing 
field or something like that. Now, that I thought would be 
a very good thing If the government would take them over 
rather than to go In and Invent the wheel all over again. 

If you had assets In place, it was better to buy 



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then from th« peopl* down there than to start all over again 
by procuring and shipping, because I have had a lot ot 
experience In that. And the transportation costs alone can 
wipe you out. 

In that regard, was there any discussion in your 
presence at this meeting about an endeavor to sell the arms 
in the arms warehouse ^^^^^^^H to the United States 
government? 

k That was never mentioned, I would say. Or, le It 

was mentioned. It was mentioned In such a way that It didn't 
register on me at all. 

There was no connection in that conversation that 
showed General Slnglaub had any connection with that 
warehouse, as I remember It. And I think there are certain 
things that would put me out of the chair, and that would be 
one ot them. 

During the course of that conversation was there 
any discussion of another of the assets of Project 
Democracy, the ship, the N.V. BRRIA? 

A Never heard of the ship and no such discussion 
that I can recall. 

And, again, I think I would have recalled that. 



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You do aot have a recollection of a discussioa of 
a cargo of lethal goods — Soviet bloc weapons on a ship 
that Colonel North was interested in selling? 

A Oh, no. You know, anything like that, every bell 
would have rung. As I say, the conversation that took place 
that I was present for was all of a nature to deplore the 
Boland — what started with the Boland legislation — and 
the position that put the whole effort to stop and stem the 
tide of conuBunisra in Central America. 

There was nothing that would indicate that 
Colonel North was involved in anything. Quite the contrary. 
He said he wasn't even handling the accounts. When he meant 
the accounts, I understood that to be intelligence and — 
what would you say? The semi-operational thing of putting 
agents in, again, to gather intelligence. 

I had no idea until the newspaper stories 
occurred that came out that Colonel North was doing anything 
of an oparational nature. As I told Mr. Albright, I would 
be opposed to that. 

Who did you think owned the aircraft and the 
landing facility and the like that were discussed at this 



meeting? 



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A I understood from General Singlaub and fr m 
Barbara that these were private donated things that t ■■en 
passed title, chapter and verse, to Adolpho Calero anc the 
contra movement. 

I had no idea that they were owned and don't -.o 
this hour, that they were owned by the United States or Ty 
agency of the United States. 

Q :f they were in fact donated goods to the contri 
movement, why should or would the United States government 
purchase them? 

A I don't know. 

Q Was that discussed at all in this meeting? 

A I do recill that General Singlaub advanced the 
idea to Colonel North that if he were paid for what he had 
donated to the contras, since the government was now going 
to take that over, and fie United States government, in 
effect, you know, pick up the tab for that stuff, he would 
then use that money to hel..< other resistance movements in 
Afghanistan or elsewhere. 

That's my recollection of that. 

Do you recall him representing to Colonel North 
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A The airplane was the only thing that I recall. 
In fact, when you mentioned the air strip, that wasn't 
mentioned and nowhere else was mentioned. Just the 
airplane. Just the Lady Ellen. 

That's the only thing you recall? 

A That's the only thing I recall. He said, "Assets 
like", you know. It was a general term, assets like the 
Lady Ellen and the assets then were enumerated in the 
conversation. 

Did you understand that as being a mechanism that 
would take monies appropriated by the Congress for the 
assistance of the contras and turning it into money to be 
used by a private benefactor network for activities not 
approved by the Congress? 

A No. What I understood would happen was that the 
United States government would in a totally legal way buy 
that equipment and then reimburse the private donors for 
their earlier donations. 

And the private donors would then use that for 
other insurgencies that had not been authorized by the 



United states government? 



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.OU/bc 1 A I didn't reason it through that way. You recall 

2 what I described for you. I went over there with a great 

3 deal of pain and fever from the infection. I didn't know 

4 what the conversation was going to be about and I just was 

5 sort of listening to it. And I didn't reason it or analyze 

6 it, as you have just done. 

7 I would applaud that if that were the purpose of 
3 it. But, how General Singlaub presented it didn't have any 
9 sinister or evil or illegal connotation at all. It was just 

10 reimburse the private donors so they would generate more 

11 funds. 

12 Remember, at this time, I'm believing that 

13 everything they're doing is legal, and I don't know that it 

14 isn't legal. You're taking a very fine point of U.S. law, 

15 you know. I£ the Central Intelligence Agency or any other 

16 agency buys something from a private donor that saves it 

17 money, that's a good thing. 

18 If those people then use that money to do 

19 something else, that's a fine point of law that would escape 

20 my analysis. 

21 Was there mention made of assets owned by others 

22 that might be acquired in this fashion, such as assets owned 






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by entitles owned by General Secord? 

A Oh, his name was never mentioned. And I had no 
idea, again, until the media stories that he was connected 
with it. General Slnglaub never has mentioned his name to 
me before, during or after In any context. 

Do you recall any other assets of interest to 
General Slnglaub which were mentioned to Colonel North as 
possible Items to be purchased by the United States. 
government? 

A I do not. 

And with regard to th« BRRIA and its cargo, your 
testimony is you had no knowledge that] 




A Never heard of this idea until now. 
you did not know of the BRRIA, you did not know 
the cargo was owned by General Secord and Mr. Hakim? 

A This is my first minute of even suggestion. I 



don't know that that's true 



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Do you r*eall dlseuaaing that tranaaetion with 



Navar. But I think I hava haard Barbara nantion 
juat tha naaa of tha eoapany and I think it waa in a good 
contaxt. Sha would aay Namar Glatt, and aha aantionad a 
coupla of othara. And than thara wara othar^H^IB paopla 
liica Ron Martin, tha Tamiami gunahot. 



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g Do you have any knowledge of an arms b iker by 
the name of Emanuel Weigensburg operating out of M T-real, 
Canada? 

A Never heard the name before. 

Trading as Transworld Anns, Transworld 
Communications, a variety of other names. 

A Never heard any of those names. Some of them t 
think have appeared in the media. I have seen it there, . ut 
I don't know. I never heard none of those names ever 
discussed in GMT. 



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Now I'm going to turn your attention to the 
Central Intelligence Agency. 

One of the jobs or one of the responsibilities 
that you had when you became Executive Vice President of GMT 
was to assist GMT in obtaining procurement contracts with 
the CIA; is that correct? 

A Well, I don't think I'd put it that way. What 
she asked me to do was to follow up on a prior arrangement 
that she had or thought she had with Mr. Casey himaelf, 
which was to take a list.- And this was the list that I 
thought we were always talking about, which she had 
presented to Mr. Casey at some ancient date in 1985, which 
Mr. Casey said, "Barbara, these are the lowest prices I have 
ever seen.' This is Barbara relating this to me. "If you 
can get these weapons at these prices, that beats anything 
we can ever do, and we should be doing business with you, 
and 1*11 tell my people to do that; that they should contact 
you, if you can get weapons at these prices." 

And that was what I always understood to be the 
famous list. 

For one reason or another, in the months that 
passed, because I have an impression this was a 1985 



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The meeting I know about took place in December 



conversation, at one time I led Barbara Studley into going 
through her calendar with her secretary to find out when 
this Graham/Casey meeting took place. 

Q This was a meeting with retired General Daniel o. 
Graham? 

A Yes. 


of 1985. 

A All right. 

That doesn't mean there wasn't another meeting. 

A All right. I asked her to trace — I think there 
was only one. I think she met him twice. Once was at a 
dinner, and then that led to a private meeting with him that 
General Graham arranged, and at that time, and all the time 
that I was — the initial months I was with GMT, I thought 
that GMT was on the side of the angels. An American company 
that could bring in bottom dollar prices and avoid the 
ripping off of the U.S. Government by foreign traders and 
brokers, and that attracted me, because it had very little 
money available for these causes. Very little money 
available, if anything was ever going to go to the contras, 
and you'd want to maximize the dollar value. You would want 



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to procur* locally rather than buy from outsid* wh«r«vflr you 
could and you certainly want to get from brokers who would 
sell you at the bottom. And that's what Z believe we were 
doing. 

So when she asked me if I would go out to the 
agency and arrange this meeting, and I demurred, and after 
she met Ray Cline, and this would be right around the 
setting up what became^^^^^^^^^^^^^H after 
introduced her to a meeting with Dr. Cline. 

This would be late October? 

A No. It could even have been September, because 
we tried to get the meeting earlier. Because of Dr. Cline 's 

schedule ^'^^^^^^^^^^^^^^^^^1 ^* 

never able to put It together. But in the context of that 
arrangement, she had a private meting with him. I think it 
w«f a luncheon or a dinner meeting 

A private meeting with Dr. Cline? 

A Dr. Cline. And asked him ~ I would not have 
recommended this — asked hla to make the interface with the 
agency. Be made a phone call to, I think, the Director's 
Office, and spoke to a special assistant and that produced a 
phone number that I was to call, and the knowledge that 



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whoevtr I would call would ba expecting my call, i was a 
little uncomfortable with this, and I waited for about a 
couple of weeks, to Barbara's annoyance, to be sure the law 
— remember we were going through all these legislative 
steps. I wanted to be — not all of it was clear, because I 
am now out of the government and no longer getting the cable 
traffic and the official documents that show, and I wanted 
to be sure we were letter perfect in going to the agency, 
that there ws no conflict of interest, no impropriety; that 
we weren't asking to do anything. Barbara never said that 
you're going out there to get a contract to go get arms for 
the Contras, and I didn't think we were, because I knew 
everything was frozen. But I know or believed we had bottom 
dollar prices, so we were going to offer our services, and 
in the first meeting, which took place around the 12th of 
October ^^^^^^^^Hia id, yes, he knew who was, he 
would receive me, and out then I went, somewhere around the 
middle oC October. I told him who we were, what we were, 
and he gave ■• certain guidelines. 

Re asked me, like you're doing, if I knew a 
series of people. Some I knew and some I didn't, and what 
he was leading me to was these were all terrible people, 



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because they had gotten publicity. 

He said, "If there is any publicity, we won't do 
business," and I said, "Well, I think you can count on us to 
do this in a discreet manner, because we don't want 
publicity. We have other clients, and if anybody were to 
learn" — this is why this is such a painful thing to relate 
all this to you — "If anybody were to know we were seeking 
to do business with the Central Intelligence Agency, they 
would not want to be a client, and hopefully, if you decide 
that Barbara is not guilty of anything, as I believe, that 
none of this will see the light of day, because it will have 
that effect." 

We then had a long discussion on how terrible the 
people in the business were. He said to me, "You think you 
really want to be in this business?" And I said, "I don't 
know. If they are all despicable people, I can deal with 
despicable people. I have had to do that before. If you 
have to be partners with them, then I don't want to be 
partners in the business." 

And he smiled and said, "Well, you make your own 
judgments as you go, but there are not a lot of good people 
in the business." And I said, "That's why we want to get 



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into it. We think we are good people, and we b«. ieve we can 
do this honorably,* and I explained to him we did not want 
to violate a single law, any law in any transactio ■ that we 
didn't want to n»ove any arms to Iran or send anythi. i to the 
contras while there was any prohibitive legislation. He was 
nodding, approvingly, to all of my conversation, star ing 
with the first one, whenever it took place — 

Let me stop you. who else was present for < lat 
first conversation? 

A He and I alone. There was never anybody ela< 
there. 

Your understanding of his position was what? 

A 




And he wmt with you without anyone else present? 

A Always. But I don't think that's unusual. 






A Never. 

Did he introduce you to the people who had that 
responsibility? 

A Never. In fact, I asked why we were trying to 



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n«gotiat« this, b«caus« it v«s so woodsn 




And I kn«w all of this ituCf, and tM'd go ov«r it 
with him over and over again* and h« proCaasad to hava 
datailad axpartisa on it. Ra saamad to, but ha could navar 
answar my quastions. So I aaid,^^^^^lin ordar £or ma to 
giva you tha lowast posaibla priea, I naad to know axactly 
what tha itaa is, bacausa, in soas casas, I could maka a 
ba'ttar racoaaandation, or you could gat a chaapar Itam that 
will do tha saaa or avan ba an iaprovaaant Cron a fira powar 
capability of tha waapon. Won't you plaasa lat ma talk to 
your paopla who praparad this list?" 

And ha said, 'No, Z don't want you to." 

So ha wallad ma off. I triad savaral time. I 



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said, "I don't want to intarfara with tha way you do your 
businass, but I think wa would gat along a lot Castar, if i 
could talk to your axparts." 

MR. KERRs All right. 

Lat ma taka it stap by stap. Lat's start with 
tha itam markad Dacambar 30, 1986. That will ba Exhibit 3. 
(Schwaitsar Daposition Exhibit 3 
idantlfiad.) 
BY MR. KERRi 
Lat ma show you what's baan markad as Exhibit 3. 
This, fron what you hava praviously told us, is 
tha othar list that you got Crom^^^^^^^^land wara askad 
to prica; is that corract? 

A Right. And it was probably right around tha 30th 
o£ Dacambar. 

Now, this would hava baan at tha sacond or third 
aaating wl th^^^^^^^^^H 

A Oh, at laast that. 

BaCora wa gat to that than, I want you to taka ma 
through tha maatlngs that pracadad tha maating that you got 
this itam. 

A Wall, unfortunataly, 1 don't hava my files here. 



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I really shouldn't even have these. I didn't know I did, 
but in the haste of leaving on the 20th, this came with me. 
It should go back to GMT. I don't want it. When I went 
through that careful sort of papers, you know, because 
you're asking different questions than Mr. Albright did, I 
found this, which didn't relate to his subpoena, but 
certainly relates to yours, so I bring it in. But there 
were phone calls and meetings, all of which went nowhere, 
you know. Nothing is happening, we're in a state of 
paralysis. 

One time he said, much later than this, but it 
was descriptive of all the things he said, "We're like a 
ship with the sails all fitted out and there's no wind. 
We're just dead in the water." 

And that, Mr. Kerr, described every meeting we 
ever had with him until January, when he called me up and 
asked me to come out and said, "You're not going to like 
what I have to say." 

I said, "Fine> but I'll hear anything you have to 
say." 

He says, "Your prices are too high." 

And I said, "Well, I thought they were bottom 



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dollar. I want to know if th«y'r« not, so I can go back to 
the supplier," who was then Werner Glatt. ^^^^^^ 

Let's go back to the meetings with^^^^^H The 
first meeting you place at around October 12 or thereabouts, 
1986? 

A The reason I gave you that date is, I called GMT 
this morning and told then I was under subpoena, in effect, 
to come here, and that I would be testifying. The only 
thing I wanted to get from thea — I didn't want any advice, 
and I didn't want to talk to Barbara, because I would be 
coming over here to testify. I didn't want to be coaching 
or any interface with her, but Z did want to know what the 
records reflected as the date of my first meeting with^^^ 
^^^^^Hand they didn't know. They said there was a 
document in there that would indicate the date of the list. 
That was the notional list that I took out to him to show. 

Here are some of the things that we could get at 
some of these prices, and I date It as of six months ago or 
whenever. 

Dated as of October? 

A Whenever the date was. You can ask for this 
document, if you think it's relevant. 

It.... 

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MR. KERR: I have asked for it. I haven't gotten 
it yet. 

THE WITNESS: That document, Michael Marks told 
me was dated the I2th of October. So I said, "Well, then, r 
shall assuree that my meeting with^^^^^^^^^Hwas on 
about that date, on or after that date." 

BY MR. KERRt 
Now, let me make sure X understand the meeting. 
This meeting had been set up by w»y of Mr. Cline. 

Who to^^^^^^^Vbut 

only gotten his phone number, and somebo dy in Mr. Casey's 
office called^^^^^^^^^^^Hboss to 
I'd be coming out and would he receive me. This was not a 
new approach, but rather a follow up to Casey's, according 
to Barbara, stated, "X want to do business with you. We 
should be buying fro« you, not our other supplisrs." 

Now, months or a year — almost a year later, or 
whenever, because I don't know the date of the Casey-Studley 
meeting. 

With regard to the first meeting, you and! 
met, you told him a little bit about GMT, showed him 
something about prices; is that right? 



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A A notional list of pricts, with th« lat«, 
wh«n«v«r th«y w«r« affactlv*, which I imagine w< uld b« 60, 
90 days, something liks that. 

An<^^^^^Htold you what? Old ha ta I you your 
pricea war* compatitiva or whaj? 

A Ha lookad at than. 




Wall, ha didn't gat back in touch with ma, so I 
callad him, you know, aftar a dacant interval of a coupla of 
waaks, and ha invitad ma to coo* out again. And that went 
on for a couple of times, either by phone or in person. And 
finally on the 30th of December, if that data correctly 
reflects when he gave it to me, he gave me that list to 
price. We priced it, I think, in 48 hours and aent it back 
to him. 

IXiring the periods October 12 and December 30 you 
had a couple of sMetings or telephone conversations? 

A I don't have a record of them. GMT should, and 
they may not. 

The only person with whom you communi :ated was 




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A Y«s- I told you that, and pleas*, no matter how 
many times you ask me^ the only person I only met with at 
the Agency wasi 

And In terms of giving you work to price or bid 
on, you didn't get any of that until December 30, 1986; is 
that right? 

A I'm giving you that as my best recollection, 
triggered by my dating with my pen at the top. It was a day 
earlier, and then I dated the day later, maybe. 

As of December 30, 1986, what had you told 
^^^^B about the source of GMT's arms that it proposed to 
sell to the CIA? 

A I said, ^Barbara Studley's principal source, the 
one she would like to deal with, is Werner Glatt.' 

^^^■then delivered himself a lot 
invidious cooMnts about Werner Glatt. 

Spscifically, what did he say about him? 

A That he had been on television, that he was 
sloppy, unprofessional, a lot of things that I then cane to 
learn about. That he's indiscreet. I don't think he said 
he charged too much, but that, you know, he said, "I'm not 
sure we would want to deal with him, even if he were the low 



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And I said, 'Well, l«t's s«« how It go«s; h« will 
not be our only sourca." I wa« d«t«rmin«d — I sens* 
Barbara had this kind of sw«eth«art arrangement with Werner 
Glatt, and I was determined* If I was going to be her 
negotiator, I was going to do competitive bidding. 

When did you first raise Glatt ^°^^^^^m Was 
It in the first meeting? The second meeting? 

A I would think the first meeting. Maybe it was 
the second. 

Just so I understand where you are coming from, 
why is It that you thought the agency would be willing to 
deal through an intermediary to do business with Glatt 
rather than deal with Glatt himself? 

A You see, that's the very thing I questioned 
myself, and I wanted to put all the cards up. I told him we 
didn't have no warehouses* we don't make this stuff i none of 
it will be procured in the United Statesi it will all be 
off-shore procurement. I knew, from my military background, 
that for many reasons, including good policy reasons, we 
prefer to supply the resistance fighters with — the causes 
we are supporting with Soviet bloc stuff, and they, the 



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Soviet Union and Cuba, prefer to supply it with M-16s. 
We'd probably save each other a lot of money, if we used our 
own natural source and lines of communication, something 
General Lee taught General Grant and the Union Army in the 
Civil War. 

I'm still having difficulty, "nu were not 
planning to do this deal without some markup; ia that right? 

A That's correct. 

So why would the Agency, which could deal with 
Glatt, be prepared to pay you a premium? 

A That's why I suspected Glatt from the very 
beginning, because I questioned whether — I had a question 
in my own mind whether this would be economically functional 
for the Agency or for us, you know, whether we could ever 
compete. And it ia a question I had throughout the whole 
series of transactions. 

What was true of Glatt would have been true of 
any supplier you relied oni Is that right? 

A That's correct. 

So at all points, you would be operating with an 
itermediary -- 

A Remember, this guy does — I'm interrupting you. 



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so I will tak« your question first. 

Hy point simply is that you-all would hava baan 
in an intarmadiary rola with an add on to tha suppliar, no 
mattar who tha suppliar is? 

A That's corract. And I pointad this out to 
Barbara, and I said, 'I don't saa how this is avar going to 
gat anywhara.* But aha assurad ■• thara wara lots of paopla 
lika us out thara, including this fallow In Alaxandria — 
Sam Cumaings. 

Rava you callad hla in? I think ha's involvad in 
this. 

I know Mr. Cunmlnga. 

A Who ara in pracisaly tha saaa rola wa ara. 
Thay'ra O.S. eitisans with off leas hara, and thay hava to go 
off-ahor* to g«ti£u£f_£odaal with othar auppllars. 




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And I agr«« with th«m. 

Did you diseuaa th« fact It 'a chaapar to daal 
with aomeona without going through Intarmadlarlaa? 

A I brought that up, and again ranwmbar what w« ara 
daallng with. Tha Imaga — tha plctura that Barbara 
praaantad to ma waa that thaaa foralgnara who can gat tha 
atuCf chaapar rip off tha Unltad Stataa and eharga allllona 
and mllllona of dollara mora than tha Itama coat. But 
Barbara Studlay was going to coaa In with • 5 parcant 
markup, with amotional, on* or two tlnaa, tantrums typ«» 
banging har flngarnalls on tha tabia — long artificial 
flngarnalla. "Nobody sails at 5 parcant. Wa'r* going to 
sail at 5 psrcant. Nobody can possibly sail as low w* ara 
ara going to ssll." 

I bsliava that. 

Q Baar with ma, Ganaral. 

A I'm tailing tha truth. 

You don't know what Glatt's markup was, did you? 
You don't know If It was 10 psrcant, 20 parcant or 50 
parcant. You wara adding 5 psrcant on top of that. 

A I ralaad that point with har, but you know, what 
you're doing la, you'ra gattlng Into why I laft GMT. I was 



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not dealing with a reasonabla woman. 

What I'm really trying to gat at is why was it 
'was willing to talk to you at all? 

A I do not know. In fact, ay frustration, because 
I want out thara under terrible traCeie conditions. It 
always rained or snowed, and they used to kid me st the 
Agency on that, that I created dreadful rains and dreadful 
snowstorms. But every single time we made an appointment, 
one or the other would happen. And if you're at all 
familiar with that Tysons Comer out in Vienna, traffic 
coning out is worse than the traffic going in. You a: ways 
arrange these appointments at the end of the day. So : 
caught two rush hours, and it would take me three hours to 
get home. 

One time, three hours to get home from Tysons 
Comer to my home in Springfield. Sometimes because of tha 
burden of what I brought, I would go back to the office, so 
X would ge«t four trips. And my frustration was, it seemed 
to me that^^^^^^^^B f or whatever his reasons, was 
playing us along. Whether he had been told by the front 
office to be nice to us, and he, as a bureaucrat in the 
middle, was not goin? to give a contract, but didn't want 



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Incur any wrath from on high, I don't know. But nothing 
0v«r happened. w« never concluded anything, and I Icept 
going back out there. Coming a great deal of affection for 

I liked him — and forming a great deal of 
admiration for his tough negotiating to get the lowest 
possible dollar, which was my goal too. 

And the point you're making is the point I kept 
bringing up at GMTs how can we be competitive? Well, the 
answer was, "We're going to force Warner Glatt down to a 
lower price.* And I think we did. Soae of the iterations 
with Warner Glatt, he came down quite • bit. 

Did anybody ever suggest to you that Mr. Glatt 




Let me take you to the meeting on December 30. 
Again, it's a meeting only with you and! 

A A very brief meeting. He said, 'Your prices 



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ar« too high." I said, "Thank you for tilling m* that. L«t 
m« go back." 

You got thifl ll«t on December 30? 

A No. I'm sorry) I'm gstting tirad. 

Y«s, I understand that. 

A The 30 December list 
first list. 

And you took this list and took it to be priced i 
is that correct? 

A Right. 

And it was to be priced by Mr. Glatt) correct? 

A That was the initial one we went through. But 
then I went to somebody else right away too in. London. 

How was it priced to Hr. Glatt? Did someone take 
this to Glatt? W it mailed? Was it on the telephone? 

asked^^^^^^^H— • please me 
•gain, as you just did a minute ago, was he the only one 
present. Yes, he was, at all meetings. I'm beginning to 
think you don't believe me. 

Just checking. 

A Yes. But no matter how many times you ask me — 

— it's going to come out the same way. 



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As a maetsr of fact, in the pricing on this that 
w« got on a good dsal of it, th« sources ^^^^^^Hthought 
it was a Middle Bastsm country, and that's why thsy wars so 
antsy, bseauss thsy dsalt with ths Niddls Bast b«for«, and I 
think that's why ths prices w«r* so high. 



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Let me follow It step by step. It was mailed to 
Glatt for him to price? 

A No. He told us we could do it by an open phone, 
but Barbara had a device — an encrypting device, with 
Glatt having another piece of it and General Singlaub having 
another piece of it where like you're doing right now with 
your transcript, you punch in the text and the numbers; you 
attach it to a telephone and you hear on the phone — you 
cannot speak while this is happening the room — it just 
goes bzzzz. 

You hear a rushing sound and the whole message 
goes in a burst and then it prints out at the other end when 
you uncouple it from your telephone and you're reading the 
price and any commenta. 

You can say good morning. There's room for 
words. 

Is this a connercially available device? 

A Yes. It wasn't supplied by the U.S. government, 
that I know of. 

BY MR. ALBRIGBTt 

Do you know the manufacturer. 

A No. 




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JU/bc 1 MR. ALBRIGHT: Excuse me for jumping in. 

2 MR. KERR: No. that's all right. 

3 BY MR. ALBRIGHT: 

4 Q Do you know if it was TRW? 

5 A It's a lot of sensitive stuff that passed from 

6 the office to the home. 

7 Do you know if it was TRW? 

8 A I didn't. You know, I have seen the device. I 

9 didn't look at the manufacturer. I undoubtedly did and it 

10 just left my mind. 

11 Could you describe it for me? 

12 A It's black, it's heavy, it's about three times 

13 the size of that tape recorder. It has another piece to it. 

14 So I can jot it down, it would be about three 

15 times — 

16 A It may be shaped like an L, you know, when you're 

17 decrypting, so the tape portion, there's a transmission and 

18 a reception portion. You're locking on — you punch up what 

19 you've got and then you've got to have it in the L-shape or 

20 T-shape configuration. 

21 Then you take it off and put a piece like this on 

22 your telephone and couple it on your telephone, and 




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everybody has to be real quiet. 

YOU put your call through and say "Here it 
comes." And then just a couple of seconds, a very long 
message and tape goes across. 

The whole device would be about the size of a 
toaster oven? 

A Smaller. 

I don't want to get into a bread box discussion. 
A Pretty heavy. But you could put it in an attache 
case and carry it because it's two pieces that make tRe L or 
the T decouple. 

Did they ever say — did any of them ever say 
where they got the device? 

A If they did — I would say they didn't. 
NR. ALBRIGHT: Okay. Thank you. 
THE WITNESS: But I'm sure they are commercially 
available. 

BY MR. KERR: 
In any event — 

A Maybe they came from Mr. Glatt; maybe they came 
from Israel. This is the kind of secure gear you can — 
there are companies in the United States that sell it. 



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Q Barbara Studlay transmittad this matarlal you got 

on Dacembar 30 to Glatt by way of this davica? 

A Right. 

And than within 48 hours sha got a rasponsa back 
from Glatt? 

A Right. 

In addition to Glatt, you want to anothar sourca; 
is that corract? 

A That's right, in Bngland. 

Who alsa did you go to? 

A You'd h«va to ask Michaal Narks that, it was 
anothar Barbara Studlay connaction, but it was a young man, 
a Cormar sarving British Am y ofticar, who was in a fim 
that was connaetad with tha 

Thay gava us prlcas which in soaa casas wara 
lowar and, in aost casas, wara highar. 

This transnission, how was it dona? 

A By talaphona. 

Opan lina? 

A yas. But it was aasily dona bacausa thay had 
approachad Barbara Studlay in London in Saptambar and given 
her a list and thay wara abla to, bacausa Hichaal Narks knew 



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this man personally. 

I told him to call fron his apartment, which was 
nsithsr ths house nor the office, and simply reference that 
original list because about 90 percent of the items were on 
it, and the couple that weren't, going back to what^^^H 
said, you could call anybody anywhere in the world and asic 
them for a quote on this. 

You got the quote firoa the English firm also by 
telephone? 

A It would have come beck the saae w y. All they 
would have said, "line item 5, so muchi 90«, si much,' and 
then in two or three instances where there were items not on 
the list, where we would have given the item, w^ would have 
given it a line item number, so when it came bacic it would 
have just been the dollar aaount. 




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To th« bast of your knowledge > GMT still has a 
copy of that document? 

A Oh, yes. We vent through ■ number of Iterations 
and they would have every one. But, again* how is this 
germane? None of this is for arms to Iran or arms to the 
contras. 

We're coming to that 




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MR. KERRt Let's mark th« January 8 annotation as 
our next exhibit, which will be Exhibit 4. 

(Schweitzer Deposition Exhibit 4 identified.) 
THE WITNESS t Let me give you one between. Prior 
to the Johannsen meeting I went back to Werner Glatt And 
this is an example of that machine. That's what came 
back from the very bitter, angry Werner Glatt throwing a 
tantrum on the phone and saying he wasn't going to subrit 
anything, but that's what he finally submitted. 
BY MR. KERRt 
. And this represented somewhat reduced prices? 
A Somewhat reduced prices. And I think there are 
sea* acid conments in there, aren't there? Doesn't he 
say ~ 

Re says, "Against my personal Judgment in 
relationship to this matter, I have again contacted 



suppliers," et cetera, et 



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A But I think somewher* down th«r« h« says, 
"Ridiculous." Or, "Mo such thing." Or somsthing Ilk* that. 

MR. KERRt Well, let's mark this Exhibit 5. 
(Schweitzer Deposition Exhibit 5 identified.) 

THE WITNESS: That gives us an exanple o£ the 
machine. 

MR. KERR] That's helpful. 

THE WITNESS I As far as I know, this would be a 
reasonably secure means of encryption; decryption, with no 
obligation to do it based on what^^^^^^^Hhad told oe. 




'For example, Mr. Glatt's style was to go to 
a public phone booth In Germany and drop in the pfennigs and 
then call collect to Barbara and Barbara would call him at a 
phone booth. 

So» with that, he'd give her a tine. And so with 
that kind of system, you have it reasonably secure because, 
remember, this Is a first transmission. 

Now, just to pursue it a step further, that same 
day, January 11, that you get this back from Mr. Glatt, 
contact was made with General Wilmot. 




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Is that correct? 

A Again, Barbara did this; I didn't. 

And in tarns o£ how sha knaw to gat in touch with 
Ganaral Wllmot, what do you know? 

A I hava no idaa. 

What wars you told in that ragard; that sha was 
going to gat hold of Ganaral Nllaot or what? 

A I think sha had m talk to hla on tha phona and 
tha naxt thing wa knaw, sha said Mr. Johannsan was asking a 
spacial trip to fly in to Washington just to saa har to gat 
our prica list. I frankly didn't baliav that. 




Q Do you hava any knowladga of any raprasantations 
baing mada to aithar Nilaot or Johannsan that pricing was 
baing dona in conjunction with Ganaral Sacord? 

A Abaolutaly not. 

Do you hava any knowladga of Mrs. Studlay bai- 



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referred to General wilmot and Mr. Johannaen by way of 
General Secord? 

A No. You l(now> to the best of my knowledge and 
belief, based on all her statements to me. General Secord 
was unknown to Barbara Studley until all this happened. 

She denied to me that she ever knew him or spoke 
with him, met him, heard about him or anything else. 

Do you have any knowledge of either General 
wilmot or Mr. Johannsen being told by Mrs. Studley that she 
was interested in purchasing $30 million worth of arms for 
the contras? 

A Ask that again? The answer is no, but I would 
like to hear the question again. 

Do you have any knowledge of either General 
Wilmot or Mr. Johannsen being told by Mrs. Studley that she 
was interested in purchasing $30 million worth of arms for 
the contras? 

A No. But that may be, you know, the genesis of 
Istatemsnts to me circa late January that it was out 
on the street that Barbara Studley was going around buying 
arms, wanting to buy arms for the contras. I went to her on 
that and said 'If we did this, we deserve to be cut off. 



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The agency should have nothing to do with this." And she 
denied doing it. 

You were at the meeting on — 

A But she's so indiscreet, I don't know if that 
would be true or not. 

Are you aware that Mr. Johannsen came to Ms. 
Studley's office on the 12th of January to meet with her on 
this pricing matter? Is that correct? 

A I told you before. I don't know how many times 
we have to go over it. I was party to the second part of 
the meeting. I was not party to the first part. 

You told me when we were off the record. We're 
back on the record now. 

A Oh, I'm sorry. I thought we had that on the 
record. 

With regard to the way the meeting went, Mrs. 
Studley wanted to handle the first part of the meeting 
herself? 

A Right. 

And then call you in? 

Right. 

Mr. Johannsen was there by himself or with 




A 


General 



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Wilmot? 



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A No, by himself. 

So the only people in the room when you were 
there were Studley, yourself and General wilmot? 

A Now, to give Barbara her due, she said I was 
supposed to be in the first part of the meeting. But I 
didn't understand that the way she structured it. 

This man was brought in unannonced. She told me 
he would be coming later during the day. Didn't tell me at 
what time. And she took him Into her office and that was 
her style and General Haig does the same thing. It's a one 
on one meeting and then you bring in the staff or the guy 
whose going to work the thing out for you. 

So I assumed that since she knew him before and I 
didn't, that she wanted personal reaffirmation time or 
courtesy call, and I received some long distance calls that 
had to do with some business transactions involving 
airplanes, noncombat, and I was working my way through those 
and she asked me to please come into the office and talk to 
Mr. Johannsen. 

So, maybe 15 or 20 minutes might have gone by, 
which I thought she wanted privately. 



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Was Mr. Johannsen giv«n a prlca list at that 
meeting? 

A H« waa givan two. Pirat ha waa glvan ona without 
tha — tha ona you'ra holding. It waa a ratypad list. Than 
ha waa glvan ona by larbara Studlay that did not show har - 
our prlvata agraamant, tha Hat of prlcaa thati 
said wa had to baat, th' lowast prlcaa that ha had. 

Than, fn raap naa to hia guaatlon to aa, coming 
In lata in tha maatlng, 'l ? you know what prlcaa you hava to 
baat?" 

And I aald, 'Y9» and It would b« my Intantlon to 
give you a copy." 

And Barbara mada a faca bacauae I didn't know sh« 
had dona that and I aaid, 'Wall, Barbara, vhy wouldn't wa 
want to giva him a copy, bacausa ha 'a got t? go back to 
London?" 

Ha waa than laavlng on a plana. 'Wa'ra going to 
go through a lot of phonacalla, poaalbla conp'onlaa or 
unnacaaaary airing of Information. Why don't wa juat lat 
him know what tha lowaat prlca la, bacauaa It doasn't do any 
good If ha comaa In hlghar." 

So, vary reluctantly and very unhappily, sie th«»- 



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took out from her desk the second list, the one which I had 
prepared the day before to give to Mr. Johannsen, whoever he 
was when he came, which would show it. 

I didn't know she had gone through this change of 
signals. 

Was that list with the prices on it actually 
given to Mr. Johannsen? 
A Yes. 

MR. KERRt Let n« show you what I would lilc* to 
have marked Exhibit 6. 

THE WITNESS: That's not Werner Glatt's list. 
You understand that? 

MR. KERR: Yes, I understand that. I'm going to 
have it marked and show it to you. 

(Schweitzer Deposition Exhibit 6 identified.) 
BY MR. KERRt 
Would you look at Exhibit 6 and tell me if you 
have ever seen this document before? 
A No, I haven't. 

If you were to ignore the fact that it has CIA on 
it, would you recognize that document? 

A Well, it's very similar to our list and, again. 



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it was my style to number the items so you could refer to 
them, so it may well be that's what we gave him. 

The ball looks like our ball. That this was a 
list that we gave Mr. Johannsen to price, and we would 
have — let's see — we might have straightened out some of the 
garbled syntax, so it could be the list that we gave him 
because I'm the one who always insists on numbering the line 
item. 

I'm going to tell you he got two lists. One had 
prices on it and one didn't. 

. Did there come a time when he returned a list of 
prices to you all — Mr. Johannsen? 

A Not to my knowledge. 

Do you have any idea why he did not? 

A No. I thought that it might have been because of 
the disorderly nature, the amateurish nature of the meeting 
that Barbara had given him a lot of Information that was 
erroneous, cross signals with me, without telling me, and 
then I go in and kind of blunder into the meeting and in 
response to his question tell him about, you know, we'll 
give you the list with the prices we have to beat. 

Did there come a time when you provided further 



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A ^^^^^^1 I knew that nothing was happening 
because of my own knowledge of the way the government works. 
I would know all the revelations, and if you remembered, 
they were just going off like bo«bs. 

Each day would bring something and you would say 
it can't possibly get worse and the next day it would, with 
new revelations. 

So I knew that absolutely nothing was happening, 
and I knew froa my other contact and knowledge of the 
government that everything trould be frozen. 

And I indeed was told there were programs in the 
Department of Agriculture that didn't have anything remotely 
to do with this, that people were afraid to move forward. 

every bureaucrat in town went into a deep fox 
ho^e and built sandbags on the top. So, if there was 
anything innovative or creative, new or different, 
regardless of how necessary it was, those ideas weren't 
being advanced, or if they were, they were being turned back 
by some supervisor and put in a hold box. 

Future years are only going to show us how much 
damage we suffered and are still suffering because of thi- 



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It hat tr«m«ndous significant cffacts on th« cr«ativicy anc 
th« courag« of action officers and paopla lika that to brin 
forward nacassary naw idaas or prograna. 

Evary consarvativa approach is only ra in f oread 
and, you know, tha ona law of govarnmant is, if you don't dc 
anything, you can't gat in troubla. 

So I think, daspieabla as that law la, it's ona 
that I navar followad. Thar* vara a lot of papara that 
navar want anywhara and wara navar writtan, and I had 
frlanda In tha govamaant tall <ia that was happaning — 
tha Pantagon, tha Stata Dapartaant and avan in tha 
Dapartaant of Agrlcultura. 




And finally, bae^y |a I still had tha 'aaling that 
whila wa wara daaling^^^^^Hvary profassionali ', I wasn't 



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b«ing d«alt with th« sam* way. And thar* was althar 
confualon or paopla wara sattlng aaida our papars. 

So tha last tlnw I want out thara was a mastar 
list ot our vary bast pricas that wa had gottan, and I think 
wa listad suppliars A, B and C, and that do cunant is 
availabla at 




And than what I did was I circlad with a pan tha 
lowast prica in aaeh of thoaa eoluans and X sald> 'At laast 
that provas to you wa wara abla to cona in undar it.' 

Now, ramanbar, this maans you'll hava to go to 
diCfarant suppliars and that aaans that thara will ba 
shipping problaos, but parhaps wa can nova sons of it 
togathar. 




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deal with Barbara Studley. 

MR. KERR: Let me show you what I would like 
marked as Exhibit 7. 

(Schweitzer Deposition Exhibit 7 identified.) 

BY MR. KERR: 
Let me show you, General Schweitzer, what's been 
marked as Exhibit 7, which is a categorically organized list 
dated March 4, 1987, and I'd like you to take a couple of 
minutes to review it and tell me if you have ever seen this 
document before. 
A (Pause.) 

I think what it is, it's a review of what I did 
submit. It isn't exactly the way I submitted it and the 
date is maybe a correct date on the document within the 
Central Intelligence Agency, if that's where it comes from, 
but that's not the date of any meeting that I had with hire 
or any presentation of any docv^ent to him. 

The notes are similar. My list had more than one 
source. See, this one says Source A. 

Yes. There are actually several sources. The 
first source is Source A and then there are other sources 



listed succeeding that one. 



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A I think this has been retyped and that might 
explain why I didn't immediately recognize the other 
documents. It may be a retype. 

All the balls are somewhat similar on these 
computer typewriters. These statements — you want me to 
review them and comment on them? 

fs. 

A This Is true. 

For the record, would you state what you refer 
to? 




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A I think that would h«v« come from^^^^ w«m«c 
Glatt would have b««n tha ona who could hava dalivared that. 
I think 1 was askad — I don' t know whathar it was in the 

Pentagon °^^^^^^^^^m ^ ^° 

him. I think that came from elsewhere. 



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Now you'rs throwing m«, "Source A has also 
confirmed his ability to delivarj 
I deny that. 
You didn't know about that? 
A I did know about that. "BPS*. Barbara P. 
Studley recently met in England.* I don't know anything at 
all about that. 

Now, maybe I'm hallucinating, but I don't think 
so. I don't know anything at all about that one. I can't 
explain it. 

^^^^^^^^ 

^^^^^^^^^H " Source 
reliable, conaiitent, precision execution.* 
Now, that Z told them. 
You told them about Glatt as Source A? 
A No, I told them that her one shipment — you see, 
the first meeting I had with them ~ 1 want to get this on 
the record. For two reasons, I told them about Barbara 




Studley' s shipment. 



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I wan tad him to know about that, if ha didn't 
previously. 

MR. ALBRIGHTt Can w« go ott for two minutss? 

MR. KERRi Sura. 

(Racass.) 

HR. KERRt Cat's go back on. 

THE WITNESS: Tha 'catagorically raorganizad 
list* is not my haading for it, so it's a diffarant 
documant, although a lot of tha footnotas ara mlna. I was 
spaaking aarliar to you for tha racord Sourea A as though X 
wara Sourea K. 

Raading tha whola thing in contaxt, I think 
Sourea A must rafar to Glatt, and than that would axplain 

[and also comas out particularly claar on paga S 
whara it says, 'Sourea A has astablishad a history of 
raliability, consistancy and praeision axaeution," and all 
thosa glowing words that follow. 

Soma of thosa I said would ba trua of us, that we 
could, you know, dalivar within tha hour and all of that. 
And I did tall tham that if thay didn't hava tha cash flow, 
if thay gava us a latter of credit, we would arrange the 



financing and so forth. 






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But it's claar ttan reading that that thay'ra 
tallrlng not about GMT but about Glatt, and that comas 
through, "Sourca A is coaplataly trustad by GMT.' 

^^^^^^^^^^^^^^^^^^^^^^^Hthat ha 
was complataly trustad? 

A I said Barbara doas, but I hava a lot of trouble 
axcapt told^^^^^^^P I think I can 
troop laad him through this transaction in a propar way. I'm 
going to hava to sit on him and fore* his pricas down, but I 
think I can do it.* 

But I told him, 'Barbara Studlay thinks tha world 
rsportad to^^^^^^Hsha 
baan— that Ganaral tfainstain and Ganaral Soystar hava 
racoimaandad him to har and spoka vary highly of him. 
Ganaral Soystar is spallad S-o-y-s-t-a-r? 
A Right. But tha Intarasting thing about this — 




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cora«s across the sams way to m«, but Barbara thinks ths 
world of hlih and Soystsr and W«lnst*ln, Brigadiar Ganaral, 
mayba Hajor Ganaral Soystar now, and Major Ganaral Wainstein 
told Barbara personally, Barbara says to n«, was an 
outstanding guy, our most raliabla suppliai 
thas* tfords that ara now appearing in the CIA document about 

.words that Barbara gave to me as coming from 
Weinstein and Soyster. 

Now the interesting thing is that all o£ this is 
180 degrees out from all the maledictions that^^^^^Vis 
pouring on this guy's head. 

Don't misunderstand me. This document came from 
GMT and went to the CIA. This is a GMT document. 

A Are you sure? 

Tes, sir. 

A Nell, I don't know how it got there. It's after 
■y watch and I wouldn't say any of those things. 

That was my next question. You did not compose 
that language? 

A I didn't compose it and I disagree with it. 

Vfhat knowledge, if any, do you have of — 

A And I don't know how it got there. 



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Do /ou have any knowledge of the role ola/ed by 
Ray Cllne delivering this document to the Central 
Intelligence Agency? 

A No, I don't. \nd I'd be ashamed of hli if he 
did. 

Have you ever discussed with Mr. Cline his 
playing such a role with the Central Intelligence Acancy? 

A Yes. As I now Icnow, after or about the time of 
the subpoena date, I had transitions of certain accounts to 
Ray. He's a friend and he's taking over my account. 

He said that he was not going to wor< for Barbara 
unless she paid him and that she hadn't come up with any 
offer of any money,. and I said, 'Be careful' beciuse the 
last time he worked for her he went out ^^^^^^H and it 
took two weeks of strenuous daily effort on my part to get 
him paid and I personally don't think it would haV'S happened 
if I hadn't stayed on it on a daily basis. 

I think it would have been deferred unti after 
the transaction had gone through, if it ever went th ough 
and it didn't. 

So I said, 'I think you're wise. I think 'ou 
ought to have a firm contract and money coming in.' 



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H« did not reveal to ne — the last word I got 
from him, which would have been well after this date, was 
that he — in fact, he told me 'I've done nothing to contact 
anybody out there.* And I accepted that as the truth, and 
that may be. 

Has he ever told you that he provided this 
material to the Central Intelligence Agency? 

A No. I remember when I left, X left the phone 
numbers of ^^^^^^^H and the description of how to get 
there, and she may have sent Michael Narks out there with 
this, but I disagree strongly with this characterization of 
Source A as Werner Glatt. 

Do you have any knowledge of a person by the name 
of Gorlitx — C-o-r-l-l-t-i? 

A Never heard the name. 

Rave you ever told Mr. Cline that the reason you 
severed your relationship with GMT was because of publicity 
and because you had been served with a subpoena by the 
Senate Select Coomittee, my coonittee? 

A Because of what? 

Have you ever told Mr. Cline the reason you left 
the employ of Ms. Studley and GMT was because of publicity 



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that had been directed towards you and because you had been 
served a subpoena by the Senate Committee? 

A No. That's an untrue statement. That's not why 
I left and, as a matter of fact, at that time, as we all 
know, the 20th of February, there was no subpoena or request 
or any knowledge that I was going to cone over here. 

As o£ March 19th, March 20, approximately? 

A I thought that the Tower Coomisslon would have 
called me, and probably should have, since I was an official 
in the NSC. And I thought, had they done so, that certainly 
would have led to visits here. And I also believe, if any 
of those journalists ever got around to writing a story 
about GMT, that this certainly would have led to an informal 
or subpoena request to cone over here, which I would have 
been happy to conply with. 

Mere you knowledgeable after March 19th or about 
March 19, two days after you were deposed fron Mr. Albright, 
that Mr. Cline was being asked by Ms. Studley and GMT to 
present this naterlal to the Central Intelligence Agency? 

A No. The only thing that I was told and only by 
Or. Cline was that Barbara had asked him to take over my 

involving ^^^^^^^^^^^^^^^Hand the 




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Central intelligence Agency. 

And I cautioned hire to be careful on that one 
because it was his old agency. I'm not sure what the rules 
are for people who retired when Or. Cline did. The rules 
change. 

If you retired other than the last couple of 
years, you had a lot more latitude than you do now. But I 
mentioned that and I mentioned the uncertainty of payment 
and, in fact, come to think of it — let me correct it — he 
brought that up. 

He said, 'Because I have asked her, I have told 
her I need a retainer, and she's been very vague about it, 
that I have done nothing for her." He said, "For a number 
of reasons, all the stories that were in the press, and I 
don't intend to do anything at present anyway, just on 
general principles and certainly not until she comes to some 
satisfactory terns." 

And those conversations took place 1-2 April 
because Or. Cline is an expert on the Philippines, so I told 
him that what I was going to be doing, as I had been talking 
to him all along about this project over there and 
interfacing with him on that, you know, to get his advice 



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and understanding. 

S««, I'm in a vary personally dangsrous situation 
ovar thara. I may wall ba killad or kidnappad and probably 
cama closa to tha lattar juat in tha last coupla of waaks 
and I don't hava a good faallng about doing it bacausa I 
hava no dasira for any personal gain Cor mysalC at all. 

I discussed all these concerns with Or. Cline and 
he gave ne five conditions that I should have, including a 
personal body guard, an escort frooi the Aray, and a 
satisfactory contract froa the coapany, none of which have 
been met, I might add. 

But that's why I want you to know why I was 
talking to him and why I was talking to him I think right to 
the morning I left or the day before I left. 

So I would tell you right to the 2nd of April and 
at no tia* did he tell me in any way that he had sent or 
taken or h*d any diaeussion. 

In fact, quite the contrary. Be denied — I 
didn't ask hia, but he proffered to ae that he had not gone 
to the Central Intelligence Agency and didn't intend to. 

Did he ever tell you that he had told] 
and company that^^^^^^^Hdid not accept this] 



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quotation, that Mr. Clin* trauld complain to the acting 
director of the Central Intelligence Agency, Gates? 

A No. But your question, you know, follows from 
the first, so I deny the first and I clearly deny the 
second. 

However, you're doing your job as the counsel and 
I'm going to help you do it because your question is a good 
one. It reminds me of another one. When I went out to see 
— when would this — there was a meeting with 
[after I left GMT which, when you asked me 
earlier, I had forgotten about, that's when I went out there 
to talk to him to tell him that I was no longer with GMT and 
as briefly as I could and as kindly as I could, why I had 
left. 

And I did that very tersely, with far less detail 
by a hundredfold than you have been able to get out of me. 
At that tlae, I said, 'Or. Cline will be picking up my 
accounts." 

He got up out of the chair, which he never had 
done, and he said, "X will not deal with Dr. Cline. I will 
not even talk to him." And I said, "Well, not even talk to 
him?" He said, "Oh, I'll say hello to him on the phone, but 




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that's all." 



So I went back to Dr. Cllna by phone and told him 
that I went out to decouple myself because I felt that of 
all the people I was dealing with, the one I owed a 
debriefing with was J 
because I had the sense ~ in fact, I think he said at one 
point he wouldn't be dealing with Barbara Studley, but he 
was willing to deal with me because of my bona fides, being 
in the Service and having worked in the government so long, 
held the clearances and had the record, some words to that 
effect. 

So I felt I owed him a debrief to let him know, 
never the^^^^^^^^^^^^f that was no 

longer in the picture or any of the other customers. I just 
left and I didn't make any more phone calls. I got a couple 
and I would tell the people I left. 

But I felt I owed him one particularly because of 
the overpricing and my other concerns, and he was very 
vehement about not dealing with Dr. Cline, so I told Dr. 
Cline that and Dr. Cline said, 'Hell, I would never go to 
him anyway. I would go up on top and come in as I did 
before through the headquarters, you know, somebody at the 



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In fact, who was th« man who took Bill Casay'a 



tall you why h« would not deal with 



place? 

Gates. 

A He said, 'I' 11 go to Gates." 

And I didn't comaent on that. I just left that 
there. 

Oid^l 
Cline? 

A No. And I didn't ask hin and I didn't think it 
was proper to. In fact, I think Dr. Cline asked me. 'He 
said that?" And, "I wonder why." And I said, "I don't 
know. He didn't tell me and I didn't ask. I just want you 
to know he said that." 

And Or. Cline said, "Well, I haven't done 
anything and I don't intend to anyway. Never mind what you 
just told me, I'm not going to anyway," and that's when he 
gave me because of the general situation it's clear nothing 
is going to happen, so it's not a useful time to go out and, 
secondly, "I don't have any contract or any assurance that 
Barbara will pay me." 

So with that, I felt convinced, because you have 



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to get dates from. 

took piece. I told Ray 

anybody at GMT what 



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299 

that last conversation 
lately and I did not tell 
had said about Dr. Cllne. 



With regard to Dr. Cline, do you know what Dr. 
Cline's position was at the time he retired from CIA 

A Yes. 

What was that> to your understanding? 

A The DDO. 

DDO? 

A DOI. 

Q Deputy Director of Intelligence? 

A Right. 

And he retired when? 

A A long time ago. A number of years under 
different laws than obtain now. 

With regard to where Dr. Cllne can be found — 

A I know from me, with the Amy, even if the 
legislation were different, I would never go back to my own 
Service to vend a contract. I would just never do it. No 
power on earth could make me. 

Where is Dr. Cline located these days? Where is 



his office? 



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A I think it's the International Building on — 
right at K and I'm going to say 18th, and he has the United 
States Global Strategy Council as well, and I think he's a 
fellow at that Center that's there, the Georgetown Center, 
and he even teaches at Georgetown University. 

6 He's a very dear friend and I hope I'm not with 

7 my testimony bringing any pain or disservice. 

8 Q Well, let me pursue some other things. Did he 

9 ever tell you that he was present the day that Ms. Studley 

10 and GeoMiliTech were served with a subpoena issued by the 

11 United States House of Represtatives? 

12 A No. He told me when I talked to him about the 

13 transfer of the business. I think it was from him I learned 

14 she had been subpoenaed. And he said, "Even though she 

15 isn't paying m«, I'm advising her anyway for free. I'm just 

16 helping her." 

17 I said, "Very well. One of the things you might 

18 help her on that I found useful when I went to see Mr. 

19 Albright was that my subpoena said bring every paper that 

20 you own, if you read the subpoena narrowly, from the Ist of 

21 January 1981, and you would need a van to bring everything 

22 in the house from that day forward — bank statements, 



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everything that was in there." 

But I said, "When I read the rest f the subpoena 
it said at the bottom 'in connection with this charter.' 
And then /ou read the charter, which was a separate 
enclosure which was all on Iran and the contras " 

Since I didn't have any papers and as I testified 
earlier under oath I didn't know that I had that stray 
letter from Singlaub to Casey in my file until about 2 
o'clock this afternoon, I brought nothing. 

And I said to Mr. Albright and the othe 
interrogators — the small man with the green tie ci St. 
Patrick's Day — 

MR. ALBRIGHT: John Saxon. 

THE WITNESS! Yes. Nice guy. He asked me, "Do 
you have any documents you want to turn over?" And I said, 
"No. But if you really want me to go back and bri-ig 
everything, the van, I'll go back and got everythiri." 

He said, "No, no. If you don't have any 
documents that pertain to what we're investigating, /ou are 
right, you didn't have to bring them." 

And when I called Bud up the following day to say 
if I find anything at any point in time I'll bring it in. 



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BY MR. KERR! 
Mr. Cline has never told you he was present at 
GeoMiliTech when the subpoena was served, correct? 

A I am going to say no. You know, he could have. 
He is a very droll guy. He could have said, you know, "As 
fate would have it, I was there when the subpoena was 
served," but I don't remember him saying that. 

Has it ever come to your attention or did you 
ever acquire knowledge that Dr. Cline told Michael Marks 
that he should tell Ms. Studley in response to the subpoena 
that she should say she had not been in contact with Central 
Intelligence Agency, that she had only been in touch with 
Cline, and that there was nothing but tentative matters that 
had gone on between the Central Intelligence Agency and GMT? 

A No. If that was true, I think it would be bad 
advice because I was directed and instructed by Barbara 
Studley. Every time I went back out there, I gave her a 
very faithful, accurate, detailed report. 

The only thing I spared her was some of ^^^^^H 
■comments about not wanting to deal with Barbara. 
You know, some of his concerns about people who weren't 
discreet or professional. 



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Had it ever con* to your attantion that Mr. Cllne 
had advised Ms. Studlay and G«oHillTech not to comply fully 
and faithfully with the subpoena? 

A No, and I would b« very disappointed if he said 
that, and Z would really find it hard to believe that 
because Dr. Cline is an extreaely honorable guy. He is a 
straight arrow. I just don't believe he would say that, and 
I did not know that he did. 

Excuse me for asking the questions, but I have 
to. • 

A No, you have got to. This is heavy stuff. 

Have you yourself ever advised Ms. Studley or 



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GeoMiliTech they should not comply fully and faithfully with 
the House of Representatives subpoena? 

A Absolutely not. There was one document — can we 
go off the record? 

MR. KERR: Sure. 

(Discussion off the record.) 

MR. KERR: Let's go back on the record. 

BY MR. KERR: 

General, off the record you advised us of a 
document about which you have concern which was in the 
possession of GMT, and basically you told us that you 
considered this document to be a personal memorandum. 

A Right. 

And that you expressed to GMT the concern that it 
not be produced unless they were required legally to do so. 

A Right, and to consult with their lawyers. 

Ap«rt from that document, is there anything else 
that you ever told Ms. Studley that she should or should not 
do in term* of complying with the subpoena that was issued 
by the House of Representatives? 

A No — yes, I did tell them something. What I 
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subpoena — in fact, even before or after I testified, I 
called them up on the 17th of March and said I had been over 
there and I was asked questions about GMT, do not burn 
anything. I said even formal documents, don't destroy 
anything. And when any of you go over to testify, tell the 
truth. 

Do you have any knowledge of activities that Ms. 
Studley or GMT is engaged in to support Afghan resistance? 
A No. 

THE WITNESS: May I ask you a question? 

MR. KERR: Sure. 

THE WITNESS: Did anybody at GMT tell you that? 
Did Barbara tell you when she was here that I advised her to 
withhold information? 

MR. KERR: That is not our concern. We have a 
report that advice was given to Ms. Studley not to comply. 

THE WITNESS: Not by me. 

MR. KERR: That is what I am trying to find out. 

THE WITNESS: I did just the opposite, and I also 
told Mike Timpani that is something you want to hold till 
later because of something Mike Timpani said to me. But I 
told him when he went over there to be sure and tell the 




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whole truth. 



He said, "Well, vhat about protecting the people 
across the street?" I don't know what "across the s reet" 
meant. 

BY MR. KERR: 

The offices of Ms. Studley were located 
relatively close to the White House, is that right? 

A Right. But normally we said "up the street" as 
our parlance for the White House. And I didn't ask him what 
he meant by that. I said, "Michael, I don't know who you 
are referring to, but if it is any of the people under 
investigation, they are very well-represented with the best 
lawyers in town. They will take care of themselves. You 
take care of Michael Timpani. The way you do that is by 
telling the truth and take care of your country, and t e way 
you do that is by telling the truth and withholding 
nothing." 

When did you have this conversation with Timpani? 

A 18 or 19 March at the latest. 

And why was it that Timpani was raising this wi-h 
you? 

A Because he has flown missions down in Central 



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jUbur 1 America, bringing arms and other things to the contras. Not 

2 arms necessarily, but flown missions for them. 

3 He had concerns he would be asked to testify? 

4 A No. I wanted him to know. I put him in effect 

5 on report because under oath and under the subpoena I was 

6 asked to tell everything I knew, and the last question was: 

7 "Do you know anything that we weren't smart enough to ask?" 

8 And that is when I told him about Timpani. 

9 So having done that, I wanted to give him a 

10 heads-up, and I didn't tell him what I said. I just said, 

11 "I told them I knew about you and that you have flown 

12 missions down there and you may very well be called over, 

13 and if you are, tell the truth." 

14 Do you have any knowledge of a packet of 

15 information that was given to Mr. Marks by an Israeli-born 

16 arms dealer working out of Brussels, Belgium relating to 

17 U.S. residents, Parvis Lavi, L-a-v-i, of United Air Systems 

18 of Paradise Valley, Nevada, and his brother, Hooshang Lavi, 

19 L-a-v-i? 

20 A The tendency is to say at this hour of the night, 

21 are you for real? The answer is no, and I have never heard 

22 of either of those names anywhere in the world. 



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Mr. Cline has never spoken to you about a package 
of documents he received relating to those people? 

A Never. 

Do you have any knowledge of an Israeli-born arms 
dealer working out of Brussels, Belgium connected to Ms. 
Studley or her son, Michael Marks? 

A No. But you are raising with your line of 
questions the possibility that there was another operation 
that was taking place behind all those closed doors, and all 
those frequent and, to me, seemingly inexplicable trips to 
Switzerland and elsewhere for banking. So I have to say, 
would it be impossible or did I know everything, and the 
answer is I absolutely didn't, and it is possible something 
like that was going on. 

But then you would have had a totally 
compartmentalized operation where I was just shut off, and I 
would kind of doubt that I would never pick up a piece or 
two of It. 

In terms of the sources that you went to, that 
would have been Mr. Glatt, Mr. Fred Fox, is that right? 

A Right. Colonel Retired Fred Fox. 

And Colonel Fox now lives in Indiana, is that 



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A Indianapoll9> Indiana. 

What do«a ha trad* undar? Do you know? 

A Well, I think ha wants to stay with arms because 
he is an ordnance officer. 

What name or company does he trade under? 

A I think it is ACP, and in that connection he is 
associated with — you would have to ask him. Lucy — ' 
somebody who is the multi-millionaire daughter of the guy 
that owns big blocks of property. If you can imagine a man 
who is so wealthy that he gives his daughter hotels — and 
it is like Monopoly — you get Broad Street, you get all 
these properties. 

Sounds like a nice guy to know. 

A She is the woman behind the Dallas Trade Center. 

Apart froa Colonal Fox, you also dealt with 
Loftia Johansen, correct? 

A Only — 

for o ne mee ting? 

A Onlv 




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And there was also an English arws merchant you 
11 did business with? 

A That I don't. know. A Richard — he is a friend 
of Michael and Barbara's, and they could give you the name. 
General, apart from these people, are there any 
other arras brokers or arms merchants that you dealt with 
during the course of your tenure with GMT? 

A I called one or two people for quotes and 
immediately discarded them because they either weren't well 
enough connected or their quotes were too high or it seemed 
disorganized. 

Who was the source of information for you on 
people from whom you could get quotes? 
A Barbara Studley. 
Anybody besides Ms. Studley? 

A I would pick up names that she had. I didn't go 
to a single person that I didn't get from her because I knew 
nobody in this business. I was never in this business. I 
am not in it .ow, and I am not going to get back in it. 

Did you ever have any conversations with General 
Graham about arras merchants? 



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A Never. I know him very well. I had had a lot of 
conversations with him on a number of subjects, but never 
one turned on arms. 

To what extent, to your knowledge, was General 
Graham involved in Ms. Studley's business operation? 

A I would say not at all. I think he was a friend 
of hers professionally, who helped her get started in 
Washington without any remuneration. There certainly was no 
record of any remuneration in the files that I saw. 

Did it ever come to your attention when you were 
with GMT that General Singlaub was given a list of 20 to 25 
items by Colonel North which Colonel North asked that Ms. 
Studley price for him — military items? 

A I have a vague recollection that something like 
that might have happened, but I honestly can't say yes or no 
to that. 

Do you have any knowledge of this list being — 

A Walt. We started much earlier about the list. • 
That was one of the questions, and then that list kept 
coming back, and I always thought it was the outgrowth of 
Barbara Studley showing Casey a list in his office of things 
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"Barbara, I have never see such low prices. We should be 
doing business with you." 

That is Barbara's quote to me. I always thought 
that was the list. But when ou say that, ask the question 
again. 

Let me come at it a other way. 

Did it come to your attention in -.he late fall of 
1986, after Colonel North lost his position . ith the 
National Security Council, that General Singl lub and Ms. 
Studley had met with Colonel North at the Sheriton and 
showed him a list of prices that they had obtained and got a 
reaction of concern — in fact. Colonel North beir. : 
distraught — that these were very low prices Ms. £ udley 
could obtain? 

A Yes. That does refresh my memory. There was 
such a list. 

What can you tell me about that? 

A It is hard because I an pulling something out n 
the late fall of '86 — or '85? 

I was told the fall of '86, but I will take 
whatever you know about that. 

A I know of no contacts with Colonel North, General 



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Singlaub, or Ms. Studley after I came there other than the 
meeting that I have testified in extensc^on 1 September 
1986. I would disbelieve there were any subsequent 
meetings. 

You don't know of any meeting at the Sheraton 
with Singlaub, Studley, Colonel North in the late fall of 
1986? 

A No. But I have a recollection that Barbara 
Studley — remember, this was not for the contrasj this was 
just for arms for resistance movements — had a list of 
prices, and Barbara Studley saying what you just said, being 
that North was very distraught. I don't remember that that 
meeting took place with General Singlaub. Very distraught 
about the prices being so low and we are paying too much. 

You know, that would have rung a bell when I was 
called in for Bud and would have rung a lot of bells if I 
had any association of that with arms for the contras. 

One more shot. In another context, do you recall 
ever being told either by Ms. Studley or General Singlaub of 
a meeting at the Sheraton in the late fall of 1986, after 
Colonel North has lost his position, in which Colonel North 
says something to the effect that the people that he had 



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been getting prices from for goods to the contras were 
crooks and they were out to get his President? 

A No. And Ollie worked for me. I was very pained 
and very disbelieving. I am not sure what I believe today, 
but very disbelieving that he had anything to do with 
anything. 

As a matter of fact, I still think he will be 
exonerated when everything is known. But I just didn't even 
believe then that he was involved in any of this or that it 
even existed. So I was quite concerned, and I offered 
through his lawyer and others to be somebody he could come 
to if he wanted to. He never came to me. He stayed out of 
sight, and I think that was on the advice of his lawyer, 
because I know that Is what I would tell him and what you 
would tell him. 

I am an amateur defense counsel, but I did it 
many times in the military. The first thing you tell the 
guy, the accused or respondent, "Don't talk about this even 
to your friends and family because it is going to distort 
your honest recollection, and I don't want you giving any 
versions at all. Just talk to me, and I will tell you when 
you talk or what to say to the investigating officer. 



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Whether you say anything at all, just take your rights under 
Article 31 or the Fifth Amendment." 

THE WITNESS: Off the record. 

(Discussion off the record.) 

MR. KERR: Let's go back. 

BY MR. KERR: 
You know that he met with Dr. Fontaine around 
Christmas Eve. 

How do you know that? 
A Dr. Fontaine told me. 

What did he tell you that North told him? 
A That he wasn't guilty of anything, that he didn't 
have any Swiss bank accounts, that he wasn't manipulating. 
Everything that I would believe, and Roger said he believed 
him. He said, "Remember, we are all colleagues on the 
National Security Council.' 

And Roger, now a journalist, wasn't doing it as a 
journalist. He was doing it as a friend to whom Ollie was 
willing to turn. He said he went through the whole thing 
and was absolutely convinced that Ollie hadn't done anything 
wrong . 

I said, "Fine, I am glad to hear it." 



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When was the last time you spoke to Colonel 
North? 

A Probably in October, after Hasenfuss, but not 
since all these things began. Not since the Iran thing 
occurred. 

So if I spoke to him at all, it would have been 
in October. 

When was the last time you spoke to Ms. Studley? 

A On the 20th of February. Well, no. There was 
one subsequent phone conversation about the 21st or 22nd of 
February, but it had to do with GMT and when she was going 
to pay me. That would have been in March. 

When the end of February passed and she hadn't 
paid me, I called this friend, Hovey or Povey, the 
accountant, to aak when they were going to get around to 
paying me, and she said, "Barbara wants to talk to you.' 

She came on the phone and wanted to talk 
business, and I said, 'Barbara, the only thing I called on 
was to find out why my check hasn't come. I understand you 
paid everybody else on the first of the month, and I am 
quite willing to be patient and wait if you don't have the 
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And she then got very apologetic and said, "You 
will have your money at the end of the week, but don't cash 
the check." One of those things. 

And at the end of the week, when it was too late 
to do anything, I was told at the close of business Friday I 
could pick up the check and, very unhappily, I went down to 
GMT, got the check, and this little informal scribble that 
said how the monies were disbursed to the different state 
and federal agencies, the IRS and Social Security people. 
And I left without really talking to anybody. I didn't want 
to. I thought the whole thing was disgraceful. 

Have you ever been questioned by counsel for Ms. 
Studley? 

A No. 

So you have not talked to Mr. Parlto or anyone in 
his office? 

A No. I didn't know that was the counsel. Now, 
General Slnglaub, I appreciate the relationship I have had 
with him. He was quite curious, and of course he is CEO and 
the Chairman of the Board, and I am the President, and so I 
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it to me again. I have to come bad- again because of my 
association with you, I assume, and Barbara Studley.' 

He said he had talked to fie lawyers. He 
immediately called the lawyers because he has be >n working 
very closely with Barbara Studley's la-o'ers. why, I don't 
know. She despises him and says so at -he drop of a hat. 

But he has a great deal of Ic 'alty to her and a 
great deal of professional supportive fe« lings for her and 
has spent a great deal of time working wi h her lawyers — 
you can ask him about that ~ and advising '■.■em and talking 
to them. 

He told me by long distance phone ik m I was in 
Manila that he talked to her lawyers and there w. . nothing 
in her testimony that would cause any questions £ r me. So 
then I assumed you were going to ask me about Yell w Fruit 
or, you know, some of the earlier questions that Mr 
Albright and hia people had asked about. I was qult<:> 
surprised. 

Did ypu in fact ever get reports on what 
transpired In our interview with Ms. Studley? 

A No. And I don't want it, other than the qut tion 
I asked you, did she say anything about me that I would .ant 



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to address in a more careful and studied way? 

Has General Singlaub — 

A And I made a point not to talk to anybody at GMT. 
I told them this morning I was going over and I was going to 
tell the truth, and I hope it would be supportive because at 
that time I felt — I am not sure of that now because of 
what your line of questioning portends — but at that time I 
felt she was as pure as the driven snow pertaining to Iran 
and any arms dealings with the contras or dealings with the 
Agency. 

I don't have that same comfortable feeling now. 

with regard to General Singlaub, did you ever 
discuss with General Singlaub what transpired in the two 
days we interviewed him? 

A No. I asked him how w* felt it had come out, and 
he said, fine, and he was prepared to tell me more. In 
fact, he started to, and I said I didn't want to hear it. I 
said, "I may go back." And I guess because of that trial 
and defense work I had a pretty strong feeling that I don't 
want to be involved. 

In fact, I suggested to Mr. Albright when I was 
here that you ask the witnesses — you can't command them. 



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but I suggested that you ask the witnesses that you call in 
not to talk to other witnesses about the matters that they 
were testifying. I felt 90 percent of them would comply. 

I haven't talked to Dr. Cline. I wanted to very 
much. 

We have now reached the last question with regard 
to Dr. Cline. 

When was the last time you spoke with him? 
A Before I went to Manila when you told me when we 
spoke, in my great unhappinesa the way I was summoned here, 
that I wanted very much to talk to him about Manila, you 
know, what was going on over there and ray concerns about 
what was happening both in the city, the government, and the 
operation of his company, because he has been a great 
bulwark, a good, sound, prudent, moral, legal adviser, like 
he has on every situation I have ever seen him. 

So I would disbelieve that these reports that you 
have got can be laid back at his door. Certainly not at 
mine. 

But because of wanting to respect your inquiry 
and not muddy the waters, you know, talk to Dr. Cline and he 
says or suggests something that might color it, I haven't 



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gone back to my dear friend. I would like to be able to do 
so, but now when I do, I won't reveal any of this. 

Did you ever tell him about your first interview 
with this committee — your first deposition? 

A No, other than I said it started out with an 
outrageous subpoena, but we quickly removed that, and I felt 
that Mr. Albright and his colleagues were people who were 
trying very sincerely to confine the investigation to a 
proper sphere, narrow when it should be narrow and broad 
when it should be broad, get to all the facts but not go 
through a fishing expedition or a muckraking, and I admired 
their professionalism and felt very comfortable with them in 
that I had told the truth, and the only thing that I gave to 
Dr. Cline was what I testified to previously, that you don't 
really have to bring a truckload of documents; only those 
documents that pertain to this thing. 

But I told GMT, I said, "I would suspect you will 
have to bring everything, and you should. You don't destroy 
anything or hold anything back." That is all. 

And I told Dr. Cline, and he said, "That is a 
good point." And he said, "I shall advise Barbara, and that 
is what I am advising her on, anyway." 




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Did you ever receive direction or Instruction 
from anyone to minimize the relationship between the Central 
Intelligence Agency and Ms. Studley or GMT? 




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Again, General, bear with me. 
You are not pursuing any agreement you had with 
anyone or telling me anything other than the whole truth of 
what you know about these matters? 

A Oh, absolutely not, and even iC I were, I would 
consider that a Congressional investigation would transcend 
any secrecy agreement with any government agency. Do you 
think I have a higher — 

That is our perspective. There are those who 
differ with us from time to time. 

A Pardon? 

That is certainly our perspective. 

A No, no. I think that is fundamental. I would 
disagree with any interpretations by any government officer, 
civil or military, that some kind of secrecy agreement would 
prevent you from talking in here. 



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Now, it is different if you are talking 
classified material, and I think we have gotten into some of 
that — I know we have. Your stenographer says he has a 
clearance. I don't have any. But I know that what we have 
discussed is higher than confidential; whereas, with your 
meeting. Bud, I would say it was properly classified at 
confidential. 



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Let me just hit one other point. Have you ever 
had a discussion with General Singlaub about how he came to 
take the role he did with regard to the contras? 

A Never. But I know, you know, he is a Homeric 
figure. Some day, somebody will write a book about him. 
He's fought this war since World War II. 

Has he ever described a meeting he had with Or. 
Casey and Colonel North in which his responsibilities were 
outlined for him by Director Casey and Colonel North? 
Has he ever told you about such a meeting? 

A No. To the contrary. He told me — I think I 
testified to that to Mr. Albright, at least to another 
committee, that when he was in talking to Casey, he 
mentioned, because he's an inveterate — will give you a 
tour of the world and all the insurgency hot spots around 
the world — he had twice mentioned Nicaragua and Bill, who 
was a friend of mine, told him, "Jack, you say that one more 
time. Just mention the word Nicaragua one more time and I'm 
going to throw you out of this office.' 

When Jack told me that — and that was in 
September, the day we went over to the meeting. 

September of 1986? 



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A 1 September. He was complaining that he couldn't 
get in to see North, that North wouldn't see him, and I 
think he'll tell you that under oath, and that he couldn't 
see Casey. Casey wouldn't see him. 

And when he did go to see Casey, he couldn't 
mention contras or Nicaragua. And that's why I thought, 
this simple layman, that Casey was dutifully following the 
law. 

.0 Did you become aware in 1985 that General 
Singlaub hired a public relations firm for himself? 

A After the fact. That's Carter-Clewes? 

Yes. How did you become aware of that? 

A Well, when I was working at GMT, they rode into 
town, right after the Hasenfussthing, and we were now 
getting all the calls because Carter-Clewes had given them 
GMT's phone number. 

I could have killed Carter-Clewes people. I 
guess it was Carter himself. Furthermore, Carter-Clewes saw 
this as a magnificent opportunity to put General Singlaub on 
a soap box and talk, and I thought this was the worst 
possible thing that could happen for Singlaub, for the 
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So I counseled no press conference or nothing. 
In the meantime, somebody in the Administration — I think 
you asKed me about that — had put out the story that 
General Singlaub was behind the plane that went down. 

I knew that wasn't true because he was deep in 
Manila, and I said that, but I called him in Manila and 
asked him, and that was before GMT had any relationship of 

8 consulting with the Manila operation, "Extract for gold." 

9 I asked him straight out, I said, "Jack, did you 

10 have anything to do with that plane? You don't have to 

11 answer me if you don't want to, but don't tell me no if the 

12 reverse is true." 

13 So he said, "Bob, I didn't have anything to do 

14 with it. I didn't even know about it. I didn't have any 

15 idea that that operation was taking place." 

16 And I said, "Fine," and that fitted in because if 

17 I was running that thing, it wouldn't have been running in 

18 the amateurish way, and the same thing would be true of 

19 General Singlaub. We both know how to run operations like 

20 that. 

21 So now you have a disinformation story put out by 

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to this day don't know. I think I told you that. Bud. I 
have no idea who put the word out. 

But we had to deal with that. So what I had done 
was I went to the White House and asked — I knew there was 
a rat in the woodwork somewhere and I said, "Find out who 
the rat is and get him to recant the story." 

The rat was identified. The rat wasn't 
identified to me. 

THE WITNESS: Off the record. 

(Discussion off the record.) 

MR. KERR: Let's go back on the record. 

BY MR. KERR: 
You went to the White House about the Hasenfus/ 
story. Did you ever reach a conclusion as to who was the 
source of that story? 

A I thought I knew, but I didn't want to find out. 
I didn't press it because I didn't. 

Q Can you tell me the identity of the person you 
thought it was? 

A I would do an injustice because the person I 
think at least publicly would deny it, and I'm not sure, so 
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,OU/bc 1 government, not in the White House, not in the Pentagon, 

2 although some evidence points it could be somebody in the 

3 Pentagon. 

4 All these are good friends. I didn't really want 

5 to find out. What I wanted was to get the story retracted. 

6 The arrangement we worked out with the White House National 

7 Security Council Staff people was they knew who it was and 

8 they were being kind of Delphic in giving me hints that I 

9 didn't even want. And that's why the hints would be 

10 ambiguous and misleading if I formed a conclusion now. 

11 They said that they had identified the person, he 

12 knows who is, he's admitted he's done it, he's admitted it's 

13 wrong and It's done. 

14 He had very good motives, I was told, but it's 

15 all wrong and he's going to fix it providing General 

16 Singlaub doesn't have a press conference until it's 

17 retracted. 

18 I made the arrangements with all the different 

19 press officers and the Pentagon, the State Department, the 

20 White House in that there would be no General Singlaub press 

21 conference, and I told General Singlaub not to do it. 

22 In the meantime, Carter-Clewes told him to do it 



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DU/bc 1 and now Singlaub, being told by Carter-Clewes to do it, 

2 ! being told by me not to do it, called some ~ pardon the 

3 I expression — weenie in the press system over at the White 

4 House who hadn't been aware of this very sensitive thing, 

5 becaue I was trying to protect the reputation of Mr. X so 

6 that he didn't get hurt. 

7 If he had good motives and he made a mistake and 

8 I acknowledged it as such, let him correct it. The weenie, 

9 who didn't know about this very sensitive thing, said, "No, 

10 it would probably be a good thing." 

11 So off we went, even though I had told Carter- 

12 Clewes not to do it, that it would destroy some very 

13 sensitive things. I told them the disinformation story is 

14 going to be walked back, we can't have a press conference. 

15 Carter-Clewes didn't want that because his fee 

16 was dependent on getting Singlaub up on a soap box and 

17 getting 250 journalists in the room, so he just rolled over 

18 iM, ignored me and got Singlaub to call this guy, gave him 

19 the guy who would know the answer — that guy in the white 

20 House and he said, yes, it probably would do some good, go 

21 ahead and tell the press. 

22 So we were off to the races and we never got to 



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the recanting, although the New York Times ran the story, 
knows it's a false story and promised me and so did its 
editor from the New York Times, they'd fix it. 

So shame on the New York Times. They haven't 
fixed it. 

Who is the weenie? What is his name? 

A Oh, I forget his name. I don't even know. 
Remember now. Jack Singlaub told me this. It was some good 
person in the White House press office, but not the people 
we were dealing with at the top. 

Who were you dealing with at the NSC? 

A Richard Childress, who was just using good 
offices to contact Vlnce Cannistraro and the people over in 
what I'm going to call the^«tt»e^few^gency, the source 
agency. 

Who at the affected agency did you get in touch 
with? 

A I talked to assistants, but again because I'm not 
sure, you know, I can't honestly tell you. 

All I want to know Is who did you talk to over 
there? 

A Jim Michaels, and I forget the other man's name 



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now, but he's the other assistant. 

And what agency is this? 

A The State Department. To Elliott Abrams, who I 
think is a superb Assistant Secretary of State for Latin 
America. Elliott denied to me that he's the one who did it, 
so let's leave it there. 

Do you know the role Colonel North played in that 
false story? 

A No. Somebody put it out. 

With regard to Carter-Clewes, do you know when 
they were hired by General Singlaub? 

A No. But I recommended to Jack that he get rid of 
them because they weren't doing him any favors. They were 
the marvelous people who twice got Jack on 60 Minutes, where 



»r — what is his name? Th« worst of the crew. 

MR. ALBRIGHT: Nike Wallace? 

THE WITNESS! Mike Wallace interviewed him for 
countless hours — hundreds of hours of television time. 
You know, throwing it all in the can and got him in stuff 
that was so out of context, it was a lie, and that's the one 
thing that he did to him twice. That was Carter-Clewes. 

I said, "If those are the guys setting up all 



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these marvelous interviews, you don't need them," and Jack 
got rid of them. 

BY MR. KERR: 
with regard to Carter-Clewes, you knew, did you 
not, that Carter-Clewes was the public relations agency for 
General Singlaub throughout 1985? 



No. 

You did not know? 

I didn't. 

Do you know who paid the bills? 

No, I don't. 

Did General Singlaub ever tell you who paid the 



A 



A 



A 


bills? 

A Whoever paid the bills ought to get their money 
back. No, he never did. I assumed it was his foundation. 
He always had money to call anywhere in the world and did. 
Long, lengthy long-distance phone calls, and I just assumed 
it all came out of the foundation. 

And you do not have knowledge of any 
conversations that General Singlaub had with regard to Casey 
or North which related to Carter-Clewes; is that correct? 

A No. And I think we'd be up on Mars if you ever 



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got evidence that shows North or Casey had any connection 
with Carter-Clewes or was paying the bills. Then you ought 
to broaden your investigation rather than narrow it. 

Have you ever had any conversation with Ms. 
Studley about General Singlaub's publicity? 

A Yes. She had the same dim view that I did of 
Carter-Clewes and how stupid it was for Jack to be giving 
all these interviews and how counter-productive they all 
were. She was very upset. 

Did she ever relate to you what he had told her 
about why he was holding all these interviews? 

A Never. In fact, she would say, "You've told him, 
I've told him and he keeps doing it." She never once gave a 
reason and he's never given her a reason. 

I admire General Singlaub's dedication to his 
cause. I think we all ought to have it to a different kind 
of degree and my own feeling is that the best way to Eight 
communism is to co-op them with the social justice programs, 
make the political reforms and economic reforms, create jobs 
and the honest, decent society which so many of those 
countries like the Philippines are so bereft of and then 
that's the way you do it. 



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Fighting communism isn't creating death squads 
and it isn't sending arras and guns and machine guns on to 
the battlefield. That's the poorest way is to kill 
comminists. What you want to do is a lot of these people, 
the MPA that I'm seeing, who may even be doing away with me 
before we're through, are just hungry people who feel 
terribly deprived and disadvantaged and indeed they are. 

I'd like to make their cause mine, but not under 
a Marxist-Leninist banner. 

Are there any other documents that you have that 
have not been produced to us? 

A I would tell you no. I'll take another look. 
This is just a 5 January iteration. I think it's mine. 31 
December. 31 December is our first readback on items, so it 
doesn't really give you anything at all. I would say no. 

This is an outgoing message to Werner Glatt. I 
don't think it's really germane other than a demonstration 
of the system. 

Who is Barb? 

A Barbara. 

Barbara Studley. 

A Right. I don't think it does anything for the 



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record. If you want it, you can have it. 

MR. KERR: It might help establish the time. 
January 9, 1987, so I'd like to make it our next exhibit, 
which is 8. 

(Schweitzer Deposition Exhibit 8 identified.) 
MR. KERR: For the record. Deposition Exhibit 3 
is a "Memo to Werner" dated January 9, 1987, from Barb. And 
we have identified that as Mrs. Studley. 
BY MR. KERR! 
Any other documents that you have? 
A Well, this is a sample of a list that you get all 
over the world that I suspect came out °'^^^|^HAn effort 
by somebody to get weaponry for Iran. I've gotten a number 
of those lists. I think I've thrown then all away or handed 
them back to the people who gave them to me. 

I think I saved that one because with lots of 
crossing of the heart and there are some items in there on 
blank rounds and things like that that indicate that that 
was a bona fide list. 

Do you know who issued this list? 

A No, I don't remember. Let me take another look 



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(Pause. ) 

I'm going to tell you that's a bona fide because 
o£ the items on here. Practice tracer, subcaliber tracer. 
It's marked^^^^^somewhere in here, I think, yes. 

would take that as ^^^^^p I think it 
came from Graham Lowe. Did we identify him sufficiently? 
We probably should do that. 

A I think we started to. You asked me to name all 
the people who work for GMT. I told you Graham Lowe, a 
South African by birth, who came to work and then started to 
travel around with Barbara Studley. 

I couldn't begin to describe what it was he does 
except he's a trader in commodities and occasionally will 
get a lead on something like this. 

Barbara always described him as a babe in the 
woods, don't let him know what we're doing and, you know, 
anything sensitive, and I didn't. 

But he knew an awful lot and he's a very fine 
man. A British citizen, bom In South Africa, so not a 
South African national, who had served with his father who 
was a textile engineer or manufacturer all over Latin 



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so he speaks fluent Portuguese^ fluent Spanish, knows how 
the system works, which is mainly a corrupt system. I was 
always having to troop lead him into the way we do business 
here under the ethical and legal standards that, you know< 
he was still accustomed to doing and to accepting as part of 
life down there and you couldn't do here. You had to turn a 
lot of deals down if it meant any kind of kickback, so he 
did. 

What did you plan to do with this document? 

A He gave it to me, you know, as could we get this 
stuff and then sell it. And it ended up right toward the 
end, when I was leaving. 

You could get it from whom to sell it to whom? 

A Get it from whomever would supply it. If you're 
not a military man, the items tell you the source. If it's 
19 millimeter, it's the United States; if it's 4.5 it's 
material that belongs to the United States. 

So most of it was U.S. and I said we didn't have 
U.S. sources. We did our business off shore. So I said it 
would be an awful lot of work to get this, and I think I 
turned it back to him. 

Here it says , ^^^^^^^^^^^^H So 




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by GMT? 



probably where it cane from. 

This was going to be sold toH 

A No. 

Sold to whom? 

A It would have come in from^^^^^^s a list of 
price from^^^^^^^^ like said,^^^^H| was 
presented to me by Graham, what did I think of it, not much. 

But if, you know, we wanted to follow up, it's 
something they could take on and I left before tre ever did 
anything further with it. 

Who did you understand the purchaser to be? 

A The purchaser would be somebody ^"^^^^H ^Y 
suspicion when I first looked at the list was that it might 
be somebody trying to acquire equipment for Iran. I said. 
We won't touch that with a barge pole. When I looked at the 
list more carefully, the amount of training, ammunition and 
the types of stuff on here suggested to me that that was not 
what it was. 

But, still, I felt uncomfortable with it and the 
real reason I felt uncomfortable beyond what I just stated, 
the suspicion some of it might go to Iran, was this would be 
another one of these kickback things. 



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If the Govsrnment °'^^^^H — '"^ >^1 this is 
military ammunition — wants to buy what assantially is U.S. 
ammunition Cron the United States, all they have to do is 

in to the Chief the NAG group^^^^^^^Hand 
a heartbeat because it's a good country — democratic and we 
have a lot of interests — it's big and we have a lot of 
strategic interests and a lot of programs — in a heartbeat, 
the united States government would sell them at rock bottom 
prices, with no brokers, no intermediaries, the equipment 
they want or the ammunition they want at the lowest possible 
cost and because we've got regular runs back and forth might 
even waive the transportation charges by saying the airplane 
has got to go there anyway, we're putting it on their C-130s 
that come up anyway. 

Whereas, when Graham Lowe through his happy 
friends would come in with these, it's because somebody in 

was looking for a kickback. And 

that's how it's done. 

And I don't want to lay it on^^^^H All of 
these countries. In fact, all of the countries throughout 
a ^^^^^^^^^^^^^^H who to 
get in an offer. He said, 'You know, who are some of the 



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people who it went out to." 

Graham a^^^^^^^^^^^^^^Hhe knew 

calling him to see if he could take some of this articles 
list that he heard about maybe from Johannsen and bid on it. 

I said absolutely not. But it's not against 
their laws and I said, 'Well, it's against mine. We're not 
to a^^^^^^^^^^^^^^Hwho is then going 

to get arms that are going to go to the Central Intelligence 
Agency." 

MR. KERRt I'd like to mark that document as 
Exhibit 9, if I could. 

THE WITNESS: Again, I went through this with Mr. 
Albright. I don't want to trash^^^^^H 

MR. KERR: I'm not going to go to^^^^^^with it. 
I may aak Mrs. Studley about it. 

(Schweitzer Deposition Exhibit 9 identified.) 

THE WITNESS: Off the record. 

(Discussion off the record.) 

MR. KERR: Let's go back on the record with a 
couple of closing questions. 

BY MR. KERR: 
At no time, I take it. General, did you ever hear 



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3U/bc 1 from Ms. Studley or anyone else that a commitment had been 

2 made by Director Casey or Colonel North that contracts from 

-r 

3 the CIA would be let to GN^? 

4 A No. The only way you can even tenuously do that 

5 was out of Barbara Studley' s repeated recountings to me of 

6 her famous meeting, whenever — December '85 or whenever — 

7 that had been arranged by General Graham, "These are the 

3 lowest prices I have ever seen. We should be doing business 

9 with you. I'll send this list." 

10 The list she submitted to hira — "down to ray 

11 people and we shall be in touch with you," and then I think 

12 it was a relentless pursuit to this day to get that 

13 business. 

14 MR. KERRi General, we are going to be deposing 

15 General Singlaub on Wednesday and I would be grateful if you 

16 would not discuss these matters with hira. 

17 THE WITNESS s I guarantee you I won't. He wanted 

18 to talk to rae about it and I said, "Jacic, we shouldn't do 

19 this." I said, "It's not right and I'm not going to." 

20 He wanted to know the nan* of the one guy I 

21 thought that was so favorably disposed — that would be Bud 

22 Albright — to running a narrow inquiry as far as, you know. 



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1 I the Privacy Act and the fishing expedition. 

2 ; I said, "He's a very good man and I'm very 

3 pleased with my session with him." I said, "As I am with 

4 I this one with you. But I don't think it's proper for me to 
j 

5 I give you that name or to characterize anybody over there. 

6 And I don't think we should talk about this at all," and I 

7 j said, "When I finish, I'm not going to be telling you 

8 I anything about it, and I'd appreciate it if you didn't ask 

I 

9 j me any questions on it. I'm going to be telling the truth." 
I 

10 And I think he respected that. He did not tell 

11 me anything about his session. 

12 MR. KERR: I do want to express on behalf of the 

13 committee our appreciation for your going through a very 

14 long night with us. We will make this transcript available 

15 for you to review if you'd like. 

16 THE WITNESS: I would. 

17 MR. KERR: But, for obvious reasons, I'd rather 

18 not have it out of the building. 

19 THE WITNESS: I would hope that the testimony I 

20 have given you, unless it's deemed material to some 

21 investigation of charges against somebody, would not see the 

22 light of day, because I have answered all of your questions 




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as cooperatively as I could and certainly as truthfully as 
my memory would allow me to do. 

But, on those parts where it touches on 
personalities, the characterization of people, their 
business thoughts, their concepts of profit motives, I do so 
unwillingly because I think that should remain as private 
differences of opinion between me and those people and not 
to be shared with the American public, unless we're going to 
do it with every single company that's operating. 

MR. KERR: Yes, I appreciate that. General, and 
as I say, the document is a confidential document of the 
committee and it will not be made available for others to 
look at. 

THE WITNESS: Depending on how much the 
Washington Post knows. 

MR. KERR: And that's the truth. 

THE WITNESS: One of the people — at this late 
hour, I cannot recall his name — one of the most 
distinguished reporters called me and said, "I have been 
told thus and so." 

I said, "Where on earth did you get that?" He 
said, "From the Senate Intelligence Committee, from Senator 



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Carey's staff told me to call you on GMT to see if you were 
doing something you were absolutely not doing." 

I said, "It is not true, we're not doing it and 
it's outrageous that Senator Carey's staff would tell you, 
the Washington Post, to investigate. Why don't they call us 
over and I'll testify under oath to them?" 

MR. KERR: I understand and appreciate your 
concern and we will do our best — 

THE WITNESS: And I believe the General was told 
that. But this is really outrageous, that you got a 
Congressional staffer whos« too lazy or unwilling or doesn't 
want to chase it, who called some Washington Post reporter 
that there's a lead here, why don't you run it down, then 
when you write a story we'll have some information and call 
the people. 

Come on. 

MR. ALBRIGHT: We hope our committee is running 
better than that. We try hard. 

MR. KERR: And I have nothing else. 

THE WITNESS: I would just like to register for 
the record my strong protest to the way I was asked to come 
over here and really I think it's a disgraceful performance 



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of the two — my neighbor says it was three — people who 
came out and terrorized — at least two of them — and 
devastated my wife and left me with a very shattered 
reputation in the neighborhood, when you've got a neighbor 
asking my wife, "Your husband doesn't have anything to do 
with drugs, does he?" 

I think you guys have done me an awful lot of 
damage and I don't know how to fix it. 

MR. KERR: General, I can't imagine what caused 
that to happen but you certainly have our regret for any 
inconveniences . 

THE WITNESS: I think when you tell me, as you 
did, that this is the nature of process servers and 
shouldn't be disturbed, then you guys ought to get your 
process servers in here and tell them because I would come 
in in response to a phone call. 

I told Mr. Albright that I would come back and I 
made one or two phone calls that he was obviously too busy 
to receive to say how, if you think of anything further, to 
make sure, you know, 1 really meant it. 

MR. KERR: So you know what happened. General, we 
tried to reach you and had difficulty, as you know, doing 



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it, getting hold of your home. I did reach what I now know 
to be your wife. I regret I didn't know I was speaking to 
your wife at the time I spoke with her. 

When I spoke to her the first time, she indicated 
you were in the Philippines and that she did not know how to 
reach you. 

THE WITNESS: At that moment because I was up 
country. 

MR. KERR: And, subsequently, she did call me 
with a telephone number which I called and could not reach 
you at. 

THE WITNESS: In the Philippines? 

MR. KERR: Yes, sir. 

THE WITNESS: When I got word through somebody 
else over there that you were able to reach, that you had 
called, I called her back immediately and said, "Call them, 
whoever he la," because I couldn't remember whether it was 
one of the people who was here with Nr. Albright, 'and give 
him the phone number." 

So she gave you an accurate phone number over 
there. 

MR. KERR: Our concern was our inability to reach 






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1 you and what we were trying to deliver was a very short, 

2 simple letter that basically asked you to call us. 

3 THE WITNESS: It finally arrived several days 

4 later and it was a wonderful letter. 

5 MR. KERR: That was all that was being delivered. 

6 THE WITNESS: Why they didn't put it in the mail 

7 box or call again to my wife and say, you know, when can you 

8 get hold of him, would you please tell him. 

9 MR. KERR: General, bear with me. We were having 

10 difficulty reaching you by telephone and I think it's 

11 probably in large part because your wife works during the 

12 day. 

13 THE WITNESS: That's correct. Look how late you 

14 guys work at night. You could have got her early in the 

15 morning or late at night. You could have called General 

16 Singlaub because it's on the record that I was working for 

17 him. 

18 MR. KERR: General Singlaub has also been 

19 somewhat difficult to reach from time to time. 

20 THE WITNESS: One of the things that bothers me 

21 is when I told him that I was coming in here, he knew you 

22 were looking for me 



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MR. ALBRIGHT: Let me make a record. 

THE WITNESS: That didn't make things any better 
in the neighborhood, you know, to make my wife, who was 
seriously ill, feel any better. 

To give you a little vignette as to where she 
comes at, on the 1st of January, New Year's Day, 1959, her 
uncle was the Ambassador from Cuba to Mexico City. 

The Mexicans led into the chancery and the 
residence the Castroites. The communists who took over, 
ransacked the embassy and literally threw them out on the 
street and stole all their clothes and personal possessions. 

Sone of her family has been killed by Castro and 
her father was the Ambassador from Cuba to Holland, when 
France and Belgium, unilaterally declared war without 
instructions on Nazi Germany and she worked in the 
Resistanc* Movement in Belgium as a young schoolgirl, which 
attracted ths attention of the Gestapo and they burned down 
the school and convent she was in. 

So this is a woman who has seen this kind of 
terrorism, sort of police terrorism firsthand in her family 
in Cuba and in occupied Belgium. 

So if she was moved by what happened out there. 



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she has good cause to have felt the way she did. 

MR. ALBRIGHT: Let me say for the record that r 
had no reason to doubt when you told me you would come in 
with a phone call or letter, and I passed that on to Chuck 
and I think he did make an effort to get in touch with you. 

Although regrettable what has happened, I think 
an effort was made In good faith on our part because I 
did believe — 

THE WITNESS: Why knock on doors and ask 
neighbors what did he do with the car? They began to think 
I ran away from my wife. 

MR. ALBRIGHT: The other thing I want to make 
clear on the record is that no one in this room, neither 
Chuck nor I, went out there, nor did anyone %»ho went out 
there do what was done on our instructions, other than 
try and serve a subpoena. 

THE WITNESS: No, no, it wasn't even a subpoena. 

MR. KERR: It was a letter. We were trying to 
deliver a letter. We should have relied on the U.S. Postal 
Service. 

THE WITNESS: Or a phone call to her. As I 



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explained to Bud, we are very used to hav i : people from the 
government, from the Central Intelligence A? ncy, from the 
State Department, from the Pentagon come to i. 4 at all hours 
of the day and night, when I was on active dut . and 
particularly in the last three years. And cert nly when I 
was at the White House, knock us up as we say in 'iet Nam, 
at odd hours of the day and night and rush out of ed and 
hold close conversations with you. 

We had all kinds of strange people in the house 
when I was on active duty. The Hondurans, the Salva srans 
and in their turn, the Argentines to counsel them aga '-t 
making coups, to support the democratic process, so, y - 
know, if they had just said we're on government busine 
from the Senate Select Committee, very important, ma'am su 
break down the wires and get to your husband and tell hi' 
he's got to call Mr. Kerr in the next 24 hours, that woul 
have happened. 

But that message was never really delivered. 

HR. KERRj All right. General. Thank you very 
much. 

(Whereupon, at lit OS p.m., the deposition was 



concluded.) 



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UNITED STATES SENATE 



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SELECT COMMITTEE ON 

SECRET MILITARY ASSISTANCE TO 

IRAN AND THE NICARAGUAN OPPOSITION 

CONFIDENTlAc 



DEPOSITION OF ROBERT L. SCHWEITZER (Continued) 



(^^ 



CONFIDENTIAL 

Pi(«ally D«cl<ssified/Relfl<sed on 1-^-^^ 

under provisions of E.O. 12356 

by N. Menan, Nationil Security Council 

Washington, D. C. 
Friday, May 1, 1987 



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UNCUSSIHED 



UNITED STATES SENATE 

SELECT COMMITTEE ON 

SECRET MILITARY ASSISTANCE TO 

IRAN AND THE NICARAGUAN OPPOSITION 

DEPOSITION OF ROBERT L. SCHWEITZER 

Washington, D. C. 
Friday, May 1, 1987 

Deposition of ROBERT L. SCHWEITZER, called for further 
examination pursuant to agreement, at the offices of the 
Senate Selcet Committee, Suite 901, Hart Senate Office 
Building, at 10:30 a.m. before LOUIS P. WAIBEL, Court Reporter 
when were present: 



CHARLES KERR, ESQ. 

Associate Counsel 

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



Partially Declassified/Released on I- ^^- 



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

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PROCEEDINGS 
Whereupon, 

ROBERT L. SCHWEITZER 
resumed the stand and, having been previously duly sworn, 
was examined and testified further as follows: 
EXAMINATION 
BY MR. KERR: 
General, you remain under oath. 
A Yes. 
And we are just going to continue where we left 



off, 



I have received since we last talked a variety of 
documents which you may be able to help me out with, and so 
I am going to kind of show them to you more or less in 
chronological sequence. 

Let me begin with a letter that must have been 
written sometime after July 28, 1986. It was written by 
General Singlaub, acting on behalf of GMT, and has attached 
to it a price list dated July 28, 1986. 

THE WITNESS: Is that the same letter I gave you? 

MR. KERR: It is, except it now has the 



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Jbur 1 THE WITNESS: And to the best of my knowledge, I 

2 have never seen the enclosure. 

3 MR. KERR: Okay, that was my question. 

4 (Schweitzer Deposition 

5 Exhibit 10 identified.) 

6 THE WITNESS: No, I have never seen that 

7 enclosure. 

8 BY MR. KERR: 

9 Do you have any further or better recollection on 

10 how this came into your possession or why it was in your 

11 possession? 

12 A My best recollection is that General Singlaub 

13 gave that to me before X came to work for GMT. Now, he may 

14 1 have gotten it out of the GMT files. Remember, it had those 

15 three ACCO fastener holds at the top. 

16 You are not referring to Schweitzer Exhibit 1? 

17 . A The one I turned In to you. 

18 But to the best of my knowledge, it did not come 

19 from the GMT files into my possession, but came to me from 

20 General Singlaub. But it was before I worked for GMT and, 

21 as I told you, I still have no recollection of reading it 

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The context of the letter puts General Singlaub, 
an officer, an employee of GMT, and while I knew he had a 
very good professional and friendly relationship with 
Barbara Studley based on common philosophical grounds, the 
relationship between General Singlaub and Barbara Studley 
was always described to me by both of them as I help her and 
she helps me. 

But there wasn't any subordinate relationship 
within GMT. This letter suggests something different. 
Now, there is another relationship that is 
suggested in the letter, which you may or may not be able to 
help me on. Perhaps you can figure out what was going on. 

You will note in the second sentence it says: 

"The list was developed in 

conjxjnction with a member 

of the NSC who is knowledgeable 

of the urgent need of the 

united Nicaraguan opposition 

with which the U.S. has a 

continuing interest." 

And if you flip the page and look at the list, 
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A Not all of it. 

I understand. 

A The 60 millimeter mortar Commando would not be a 
Soviet item. 

Who is the manufacturer of that item? 

A It is a U.S. manufacturer, to the best of my 
knowledge. 

Is it carried in the U.S. inventory? 

A It is a small, hand-held mortar for use in 
Special Operations. It is the lightest weight mortar you 
could have. 

When I was in the U.S. Army, we didn't have 
anything like that. 

A Well, when you were — you may recall if you went 
through Fort Banning a demonstration where they put the 60 
millimeter mortar in a steel helmet full of sand and said, 
if you are ever without your bipod or you are stripped down 
and you have to bring some fire support forward, here is the 
way to do it. And then you would, holding the mortar in the 
sand of the helmet — you could do it in the ground, too, of 
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mortar or lowering it, actually get fire support. 

So the Commando mortar is a mortar of that kind. 
It probably has a bipod that goes with it, but the idea is 
it is a hand-held mortar. It is very small, very light, and 
would be U.S. manufactured. 

And the remaining items? 

A It could come from the United Kingdom. I would 
have to check that, but it is a Special Forces piece of 
equipment, and the rest is also, except C-4, of course.. 

It could be made by anybody? 

A_ . Now, the prices here are reasonable, although^^H 
«ould say he could get some of these less 
expensively, but these are not high prices. 

When I talked to you, you questioned me on the 
various conversations with Colonel North, the one 
particularly that I was present for with General Slnglaub on 
the 1st of September. Re talked about a list. It was 
undoubtedly this list he was talking about, but I didn't see 
it, nor was there any detailed discussion on it, nor was 
there any implication that this list was for the contras 
that I can recall. 

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disturbed. There wouldn't have been any flags coming up 
because, remember, we are months after decision on the part 
of the Congress to provide aid again to the contras, and the 
United States had, under Congressional authorization, 
provided aid for the contras for a period prior to the two- 
year moratorium. 

Actually, there was no Constitutional 
authorization for the acquisition by the American government 
until October of 1986? 

A Right, but the Congress had expressed its will in 
June and August, and what you would now see happening is 
people leaning forward, which in itself isn't improper. 

No. 

If you look at the context of the letter, what is 
intriguing is that General Singlaub is basically suggesting 
a lending arrangement to allow the CIA to get a faster start 
than it might otherwise get in buying weapons. 

That would have created some legal problems. 
General? 

A Right. 

But I testified to that when I presented the 
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had never really looked at the letter was that General 
Singlaub, as I recall — it is now further intimation to 
your first question, how it came into my possession — he 
gave it to me with an explanation of this idea. 

But I had already dismissed the idea as, in my 
judgment, not one that would be held legally sufficient to 
act on and told General Singlaub that he should write a 
letter when he first proposed this to me orally to Mr. 
Casey, the Director of the Central Intelligence Agency, and 
propose the idea and let their lawyers take a look at it. 

And I think that is why I got the letter later, 
was that it was given to me General Singlaub to show that he 
had acted. He is a very meticulous man, as you have noticed 
from your contacts with him, I am sure, very attentive and 
careful with details. So he follows through and, since I 
told him — if it was me that caused him to write the letter 
— I told him to go write a letter to Casey, that I didn't 
think it was a good idea or was a legal idea or was legally 
correct, but it was certainly innovative and worth looking 
at to let the Central Intelligence people look at. 

And then, as I told you. General Singlaub, when I 
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1 "They told me that it wouldn't be legally correct and 

2 therefore couldn't be done." And General Singlaub just 

3 dropped the idea. 

4 This was the only conversation that I can recall 

5 at this moment that he ever had with me about providing arms 

6 for the contras. 

7 Always both the context, the detail, the 

8 connotation and also denotation was why we need to support 

9 the contras. I never had any conversation with Colonel 

10 North that would suggest there was something going on under 

11 the table or around the will of Congress. It was on why we 

12 need to turn the legislation around and why we need to start 

13 supplying aid to the contras. 

14 If you will allow me at this point to interject 

15 something, my own belief, conviction, in light of current 

16 developments, I would deplore the death of this poor young 

17 man who was killed in Nicaragua. 

18 On the other hand, I think it is equally 

19 deplorable that we have got 3000 Americans down there, 

20 painting their houses either symbolically or, in the case of 

21 Mr. Linder, actually, with the colors of a brutal 

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them, and I would hope that when we get through 
investigating this situation, which does deserve 
investigation if wrongdoing has occurred, that people should 
be held accountable for it, made to account for any 
wrongdoing. 

I would hope, though, the same six committees 
that desire to investigate this situation would investigate 
the people who are sending $100 million worth of supplies to 
the communist government that is exporting revolution to its 
neighbors and will threaten us. 

It is not exaggeration to say that. They do 
threaten the national interests of the United States 
narrowly and broadly. 

And would also investigate those 3000 people who 
are down there. I think it is the same thing. If you have 
people on the right providing sustenance to resistance 
fighters and the committee thinks that is wrong, then that 
should be investigated. But then you should also look at 
people who are of a liberal persuasion, who are so liberal 
that they want to support and expand a very nasty communist 
government in Nicaragua. 

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Bravo have a much different view of that government, and 
these are men who are liberals and ought to be listened to. 

Let me just come back and focus on the 
chronology. 

A If I may, it wasn't a totally irrelevant obiter- 
dicta here. You had asked me early on in our last meeting 
where I gave a deposition if I thought it was right for the 
people who had provided assistance to the contras to now 
take that money back if the United States Government, the 
Central Intelligence Agency or some other agency obtained 
those assets and used it for other resistance movements, and 
it is in the context of that question. 

And I had not really considered that when you 
asked me prior to when you asked me it. My response then 
was I said it looked like a very fine point of law, but I 
think my comment in the context of the death of this poor 
man, this poor young man, whom I deplore because he was 
obviously a very sincere, idealistic guy, are appropriate 
because they tie back to that question. 

I did not know, when you asked me, anything at 
all about Project Democracy, with one exception that I will 
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didn't know that Project Democracy was the organization that 
was providing this assistance, and I still don't. 

Project Democracy was not mentioned by either 
Colonel North or General Singlaub on the 1st of September, 
to the best of my knowledge. 

When I responded to your questions, which you 
asked as appropriate leading questions, about Project 
Democracy, what I did was make a transposition to what was 
discussed, which was the buyback of that equipment that had 
been provided, those assets, and the name that the media 
subsequently had given to it. 

But I had never heard General Singlaub discuss 
Project Democracy. 

Indeed, when it came out all in the press, I told 
him I had never heard of that and asked him if he had, and 
he said, "No, I never heard of it before in my life." 

In fact, I was his first source because he was in 
the Philippines and the news media had not caught up to him 
and I just told him on the telephone what was being printed 
and that he was, I thought, being connected with this and 
asked him if he was, and he said, "I never heard of it." 

Now, I have testified to at least two different 



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1 committees that I had never heard of it. I now remember, 

2 since I last spoke to you, in conversation with Colonel 

3 North while I was in uniform, and therefore on active duty, 

4 circa May or June of 1986, but not later than early June, in 

5 which he made a single statement to the effect, "And then" - 

6 - the only words I can recall — "And then there is, of 

7 course, my Project Democracy," and his sentence then trailed 

8 off with a series of visible ~ almost visible ellipses, and 

9 he didn't finish the thought. 

10 I didn't ask him about it because it did not fit 

11 in with the discussion we were having. 

12 What was the context? 

13 A As I recall, all my discussions with him were on 

14 ! the insurgency in Central America. It was not a 

15 conversation about contras because I had steered totally 

16 clear of them during the time the legislation was in effect. 

17 What it was on very likely was on what the Sandinista 

18 government was doing to expand the revolution into Costa 

19 Rica, El Salvador, and Honduras. 

20 In other words, it was a professional discussion 

21 that was entirely appropriate, entirely correct between the 

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staffers who was charged with responsibility. 
But again he didn't elaborate? 

A No, he didn't, and as you know, our reporter here 
has smiled several times throughout all of this as we come 
up with these acronyms and names. 

The government is full of these, and we give 
names to all sorts of ideas and projects. 

So I thought that if Colonel North was referring 
to a project, you know, a concept, not an organization, that 
would promote democracy in Central America. 

I could readily recall my continuous efforts over 
the years to advise military juntas in Central and South 
America to respect all constitutional authorities, to go 
back to the barracks, to accelerate elections if the country 
did not have free elections and, once they had them, to 
respect the results even if they didn't like them. I would 
have called that Project Democracy. 

So Colonel North's use of the term didn't raise 
any flags or bells. I didn't get the context or connotation 
that there was a vast or small organization out there that 
was disciplined, that was providing money to do anything. I 
just thought that it was a name perhaps that didn't even 



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1 have any reality other than, you might say, an NSC staffer 

2 could call — I have got a project for peace in the Middle 

3 East, and I would call it Middle East Peace, everything you 

4 could do that was designed to bring a just peace in the 

5 Middle East. 

6 Where would this conversation have taken place? 

7 A I don't know. I can't tell you. It could have 

8 been a social setting, you know, as most social settings in 

9 Washington are designed to get business conducted. So it 

10 could have been there. 

11 He was a guest at my house for a couple of 

12 dinners or functions involving the Latin American officials, 

13 as were other NSC staffers and other people from the State 

14 Department and the Pentagon. That was part of my job, to 

15 ensure that you brought all these people and always tried to 

16 invite somebody from the White House, somebody from the 

17 State Department, somebody from the Pentagon, so there 

18 wouldn't be any private bilaterals. 

19 Do you recall anybody else participating in this 

20 conversation? 

21 A No. There may have been somebody else present, 

22 but I don't recall who it was and, as I say, the reference 



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Jbur 1 to Project Democracy did not fit what preceded. His 

2 sentence trailed off in almost visible ellipses, the four 

3 dots, and then he picked up on another idea and he didn't 

4 come back to it. 

5 The words I remember are "And then, of course, 

6 there is my Project Democracy," and there was voice emphasis 

7 on the word "my," but it didn't fit in with any idea that 

8 there is a group of people out there that are providing arms 

9 for the contras. 

10 I might add, if he had said that, you know, 

11 expanded on it at that point and had not dated it, that 

12 would not have caused me any great concern because we were 

13 now at a point where it was no longer illegal to do it. 

14 There was no dating of the remark or the organization, and I 

15 certainly did not know anything at all about an 

16 organization. 

17 I had never known anything about Mr. Channell or 

18 the name before, which is not a dissimilar name, a somewhat 

19 like name to Project Democracy, the organization that he 

20 fronted for. I had never heard of him before and never 

21 heard of Channell at all. 

22 Let me come back to this letter. 



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1 Your first conversation with General Singlaub, 

2 which you think resulted in this letter, would have been in 

3 the summer of 1986? 

4 A It could not have been before that because I had 

5 no contact with General Singlaub other than seeing him 

6 somewhere in April, a very cold day, at the Tomb of the 

7 Unknown Soldier. 

8 So it could have taken place in July of 1986? 

9 A Right. June, July. 

10 Again, my recollection is it would have preceded 

11 the letter because I told him — 

12 I am just trying to figure out how much it 

13 preceded it. It could have been a matter of weeks; is that 

14 ! what you are telling me? 

15 AX would think it would be, yes. 

16 With regard to the price list itself, you say — 

17 A Incidentally, the letter, if I could take a look 

18 at it, looks — well, you can't really tell where it is 

19 written from. 

20 The other copy we have — 

21 A It could be a ball from GMT, and obviously it is 

22 because, you know, he is referring to GMT. 



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The other copy of Exhibit 1 we have is on GMT 
stationery. 

A The one I turned in was? 

Yes. 

A Oh, yes. It is interesting this one doesn't 
have. 

This one clearly was a copy. It is a copy that 
came, as you may know, from records we recently obtained 
from Ms. Studley, so this would be the GMT file copy of this 
letter? 

A Right. So somebody has removed that. 

That is correct. 

With regard to the list Itself, your testimony is 
you have never seen this list, correct? 

A 




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In the United States that would be unthinkable 
unless you had a traitor or a really scurrilous arms dealer 
of the lowest, sleaziest class. 

There are two explanations at least. One is — 
and I think it is the one I am inclined to accept — that 
they are so concerned to obtain hard currency that they 
don't care how they get it, and part of the communist 
philosophy, as you know, is that the end does justify the 
means, and so their efforts to hard currency and gold, they 
would be willing to sacrifice some Soviet materiel — 
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Soviet citizens, Soviet, patriotic young soldiers and 
officers who are serving their country in what they would 
regard as a patriotic war, at least at the beginning of 
their service. 

I think a lot of them became very disaffected in 
Afghanistan. But Mr. Gorbachev realizes that, and that may 
be one of the reasons he may be sincere about trying to 
disengage from there. 

The other explanation is that — and we never 
explored this outline, but I certainly thought of it — that 




Re has enormous wealth. I told you that I was 
informed by people at GMT who had visited his properties 
that he owns — and this was not an exaggeration, apparently 
— a county down in northern Virginia, and he has developed 
farms there to a very extraordinary degree of self- 
sufficiency and modern farming technology. All the fowl are 
on one farm, all the cattle are on another, and he moves 
them back and forth for grazing. 



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Let me — 

A But I am not sure — I think that there is 
another aspect of Mr. Glatt that would indeed causei 




Let me pursue that. 

During your tenure on active duty with the United 
States Army, did It come to your attention that Werner Glatt 
was a supplier of the Defense Department and, specifically, 
the United States Army? 

A No. 

He also said that I had signed off on some of his 
procurements. To the best of my knowledge, that is not 
true. 

I, as the strategist and the planner, don't even 
recall getting into any actions of this kind. The man who 
can testify to that is General Odora and his predecessor and 
perhaps General Soyster, the Operations people, who would 
have coordinated it, and it is conceivable that there would 
have been some minor acts that would have come to me or we 



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would have coordinated from a policy standpoint. 

But I don't recall it, and I certainly never met 
Mr. Glatt before, and, quite frankly, I am dismayed at the 
closeness of the relationship that he has, as reported to me 
by Barbara Studley. So it may not be true. She has told me 
a lot of things that turn out not to be true, and whether 
she believed them or not I won't say. 

But just from a factual standpoint, she related 
to me a great many things which just turned out to be 
untrue, that she knew or heard or had experience, which just 
wasn't the case. 

That is why I didn't pay a great deal of 
attention to her when she would be talking about things that 
didn't have anything to do with the business of GMT and why 
my memory, when you ask me about some of these things, is 
not always precise or as accurate as I would like it to be 
in what you are going into. 

But 1 never did any business with Mr. Glatt, 
never knew he existed. I recall, after I met him, that he 
was the man I had seen on television with an Army colonel 
whom I knew of and may have met, who fell into disfavor 
because their operation got blown, and Glatt had been 



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Jbur 1 approached by the television people, and I recall it was a 

2 public television documentary. 

3 The Cable News Network did a shot of Werner 

4 Glatt, isn't that right? Do you remember them doing that? 

5 A Yes, right. 

6 Let me pursue that just a step further. 

7 Do you have any knowledge of the relationship, 

8 past or present, between General Daniel 0. Graham and Werner 

9 Glatt? 

10 A No. I never knew there was a relationship. I 

11 never heard General Graham mention Mr. Glatt, and 1 don't 

12 recall Glatt ever mentioning Graham. 

13 Ms. Studley never told you it was General Graham 

14 who introduced her to Werner Glatt? 

15 A Not that I recall, but she may have. I am not 

16 going to say that it could not have happened. But I don't 

17 know how she did meet him. 

18 To your knowledge, did Mr. Glatt ever use the 

19 alias "Klotz," K-1-o-t-z, Werner Klotz? 

20 A No, but that would be an apt alias for him 

21 because it would describe him perfectly. 

22 Did you ever discuss with General Singlaub his 



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many meetings with the man that he identified to you as 
Werner Klotz as opposed to Werner Glatt? 

A No. I never knew General Singlaub had ever met 
him, but in retrospect, because of what Barbara told me just 
shortly before I left GMT, that she had arranged meetings 
and conducted the travel that brought in all these parties 
together and made the shipment of arms of 1985 possible. I 
didn't know that before I went to work for her. 

Her story was she had donated $100,000, and I saw 
the check that she had given to this cause, and that was the 
end of it. 

It turned out she had never written the check. 
What she had done was paid for the dinners, paid for the 
meetings, conducted travel, and I did talk to — because 
again so many of the things were exaggerated or untrue — I 
asked General Singlaub in February, I believe, did Barbara 
actually contribute $100,000, and he said, "Oh, yes, it was 
at least that and her expenses that she incurred for that 
shipment." 

But he never mentioned to me that he had ever met 
with Glatt or had any discussions. However, I would assume 
that if he were one of the principals at the meeting — and 



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I think likely he was — Glatt was a supplier, that they 
would have met, but I haven't thought of that until this 
hour. 

And with regard to the meeting you had with 
Colonel North on or about the 1st of September with General 
Singlaub — 

A I would say it was the 1st of September precisely 
because my first day on the job I was asked by Barbara if I 
minded accompanying General Singlaub to see Colonel North. 

Again, in retrospect, I think that the reason 
they wanted me to go was that I was the one who was making 
the appointment possible. That was not explained to me, but 
General Singlaub later told me he had been unable to see 
Colonel North for a very long period of time, and I think it 
was by having me go that it was the willingness to see me 
that Colonel North acceded to the meeting and all. 

. The only people present at the meeting were 
yourself. General Singlaub — 

A And Colonel North. I am very sure of that. 
There were other people in the area, to include Fawn Hall, 
but the meeting took place behind closed doors in his 



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Jbur 1 In the Executive Office Building? 

2 A In the Old Executive Office Building. 

3 And I was intent on concluding the meeting 

4 because, as I told you before, I thought it was a waste of 

5 Colonel North's time. General Singlaub wasn't raising 

6 points that seemed to me to be useful to the work that I 

7 then knew Colonel North to be responsible for. 

8 There was discussion of a list at that time, is 

9 that correct? 

10 A That was one of the items he asked about, the 

11 list. 

12 Did you actually see a list at that time? 

13 A No. He just asked. I believe it was a five by 

14 eight or three by five card with points on it, and I noticed 

15 that because I think it is unusual for a principal to write 

16 things out like that, and I guess I thought that was 

17 probiibly a good thing to do. 

18 I have never really done that unless it was a 

19 very long and complicated agenda. You know what you want to 

20 -iscuss and you live it, and you go in to the principal and 

21 you go over the points, and if you need a reminder you have 

22 a paper like a list and you bring that out and say, now. 



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what about this list? 

That is more the kind of approach that you see 
with the junior officer, you know, a lieutenant or captain 
or major who wants to be sure he doesn't miss any of the 
points. 

And I think I may have asked General Singlaub, 
"Why did you have a list of points in there?" because I said 
something to him that caused him to tell me after the 
meeting that he hadn't been allowed to meet with Colonel 
North for almost — I think he said — two years. It was 
certainly over a year. 

Do you remember any description of what was being 
done with the list, what was on the list? 

A You recall my description of my physical 
condition at the time? 

Yes. 

A It was sort of a blur. 

I was hoping that looking at this may refresh 
your recollection. 

A No, it doesn't. I recall the conversation — and 
I could be wrong because the events of that day for me 
personally — that one of his items was what about the list. 



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and that was a charge that Barbara had thrown out, "Don't 
forget to ask about the list." 

General Singlaub asked about the list, just that 
way, "What about the list?" And the answer was, "I don't 
have anything to do with that any more, and that is all up 
with Casey and the CIA," and a series of complaints about 
the CIA. 

Bear with me. Insofar as you have a 
recollection, I want to get a fix on it. It appears, from 
what we have, that this list would have been submitted to 
Casey at the CIA prior to the meeting. 

A Well, prior to it. 

Q Is it your understanding that what Singlaub was 
asking North is essentially, "What is the status of the list 
in terms of whether the CIA is going to buy from us?" Is 
that what he was basically asking? 

A No. It wasn't raised in that context at all, and 
I assume that what they were talking about was the Central 
Intelligence Agency's interest in obtaining at the lowest 
possible price — let me withdraw that — it wasn't even a 
question of price or economy, and there wasn't any role for 
GMT that I saw at that time or perceived at that time. It 



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was rather the needs of the various resistance movements 
which were being supported, I assume properly, by the 
Central Intelligence Agency and the United States 
Government, and that would not be overtly. 

So you did not connect up this discussion of the 
list with the price list that GMT had submitted to the CIA? 

A No, absolutely not. My participation in the 
meeting would have been different. I would have asked many 
more questions. 

But it was not raised that way at all, and it was 
immediately dismissed by North, "You know, I don't know 
anything about it; I can't do anything about it" — that 
kind of tone. 

What kind of complaints, if any, did he express 
about the CIA at that point, that you can recall? If you 
don't recall, you don't recall. 

A They were very critical — that they were working 
with amateurs and — 

"They" being NSC? 

A No. The Central Intelligence Agency. The wrong 
people were handling Central America. 

And I might add, since we are getting into this 



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1 on what could conceivably be a record, there was some truth 

2 to that. When you dismantled the operational end of the 

3 Central Intelligence Agency under the Carter Administration 

4 and you are now — 

5 Under Admiral Turner? 

6 A Yes. 

7 — and you are now putting it back together, 
which we need to do — please make no mistake. My bias is 

9 that you need a strong Central Intelligence Agency, and it 

10 should be comprised of two houses — intelligence collecting 

11 and analytical capability. It should be the best of the 

12 world, and the operational capability, which should proceed 

13 always with the permission of Congress, with the over-watch 

14 committees, and with the elected — and through the elected 

15 officials, constitutionally appointed civilian authorities. 

16 It should not become actions that are undertaken by 

17 lieutenant colonels, colonels, or generals or admiral 

18 anywhere in the world on their own. They might propose 

19 that. They very rarely do. 

20 Incidentally, all of this does stream down on the 

21 civilian side of the house, and I think it should. 

22 We are in a covert war. We have been in one for 

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a number of years, at least two decades, and often we are 
losing that war. So to say because we don't like that kind 
of operation and should turn our backs on reality and not do 
anything about it, I think that is wrong. 

But at the same time, those situations are 
fraught with dangers for human rights, for constitutional 
law, for all the things that the United States really stands 
for, which is the democratic system, because when you get 
into what has often been called dirty warfare, you or your 
surrogates can get involved in the dirtiness of it. 

It is very, very difficult to walk that line. 
But I think you have to try. I don't think that you can 
afford yourself as a nation or an agency or an individual, 
if you are involved in those policy responsibilities, the 
luxury of saying, well, I don't want to get into this 
because it Is going to get too nasty or too difficult. You 
have to face up to it and insist it be done properly. 

So to go back to the point, we had gotten rid of 
that operational capability and now we were trying to 
reconstitute it, which I would argue was proper and correct 
on the part of this Administration or any Administration. 

I don't think you will find any responsible 



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1 successor Administration, even a Democratic one, who will 

2 again dismantle all of that capability. 

3 You now have to take people who are essentially 

4 intelligence specialists and put them on the operational 

5 side of the house, and, to be sure, I felt that some of the 

6 people whom I like — and I will avoid mentioning any names 

7 because it could be invidious — who were assembled in the 
Intelligence Agency to run this task force with it, I 

9 thought were largely inexperienced in Central America. They 

10 were taken out of other assignments in Africa and the Middle 

11 East to go and work on Central America, and that bothered me 

12 because you really need to have area expertise. 

13 Did Colonel North identify any particular person 

14 that he was concerned with? 

15 A He did. 

16 Who was he concerned about? 

17 A I do not honestly recall, and that is one of the 

18 reasons I am holding back on this because I might come up 

19 with the wrong name. 

20 That is fine. I appreciate that. 

21 A The people I knew and I interfaced with, some of 

22 these people were very decent, working very long and hard 



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1 hours. I think they made some mistakes in what they were 

2 doing down there. 

3 If you go back and look at the history of it, 

4 there clearly were a lot of mistakes made with cherry bomb 

5 mines in the harbor. That was a terrible mistake, both 

6 tactically, morally, and from an international law 

7 standpoint. They were ineffective from a pragmatic 

8 standpoint and should never have been done. 

9 There were other mistakes that were made. The 

10 Psychological Operations book, which incidentally has been 

11 caricatured. You really need to look at that. It is not 

12 that bad a book. What was a mistake, it was a mistake 

13 because it talked to the presumed readers as though they 

14 were college seminar students instead of people who had not 

15 finished the primary grades, which was in many cases the 

16 situation, and very young boys and not the sophisticated 

17 level that the book is pitched on. 

18 But the book, I think, has been unfairly 

19 lampooned. On the other hand. It was a mistake. Any 

20 psychological operator In the Army who would have brought u? 

21 a book like that and offered It as a manuscript, we would 

22 have removed him from his assignment and from any further 



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duties with psychological operations beca .e we would have 
concluded that he had not understood one thing of what we 
teach in the Psy Ops School, which I attended. You don't do 
those things. There are some things proposed in the book or 
held out for adoption by indigenous people. 

So my only point is that Colonel North's 
criticisms would be in part there and in part understandable 
because he was suffering. He was trying to get a program 
together. 

Never in my presence in any way was there any 
suggestion of an illegal program. 

Do you recall any specific complaints he had 
about the CIA at the meeting you attended? 

A No. I think they were general complaints. There 
were probably some specifics to flesh out the generics and, 
you know, they are doing this, for example; they are doing 
this, or not doing that. But I don't recall what the 
specifics were. 



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,U/bc 1 Q Do you have any further recall of any other 

2 topics that were discussed at that meeting? 

3 A No. In fact, the only ones I recall are from 

4 your questions. Oh, there was one. It was the first one 

5 asked. A million dollar bounty on a HIND helicopter. That 

6 was the first one. 

7 Tell me what you recall about that. 

8 A I recall a great deal about that because I got 

9 involved in that. 

10 I'll come to how you got involved in a moment, 

11 but tell me what you recall about the conversation in 

12 September. 

13 A Just it was very short. It was the shortest — 

14 in fact, all of the questions that were asked got very short 

15 answers. That one, the answer was yes. "Is there still $1 

16 million available for a HIND helicopter?" 

17 .Q And he said yes? 

18 A He said yes. 

19 Who was proposing the million dollar bounty? 

20 A He never made that clear. I had known, and you 

21 probably do, too, because you can see them occasionally in 

22 7/Elevens, the poster that "Soldier of Fortune" magazine put 



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J/bc 1 out, 

2 But he said the bounty was still in effect and he 

3 still would like to see a HIND? 

4 A Right. 

5 And the intention was — was there a programmatic 

6 j discussion with North at that point about how you all might 

7 I go about acquiring a HIND? 
A No, not at all. 

9 You did in fact ultimately become involved in at 

10 least thinking through ways a HIND could be acquired. 

11 Is that right? 

12 A Yes, very carefully and we can go into that when 

13 t you wish. 

14 i I think it may make sense to do that now, so 

15 let's take a break from September and I'd like you to give 

16 me your best recollection of how you became involved in that 

17 matter and what you did. 

18 A Well, I think I have a fairly clear recollection 

19 of that. First of all, when I left the meeting with Colonel 

20 North I didn't .we with any intention of getting involved 

21 on the recovery of a HIND helicopter from Nicaragua. 

22 At a subsequent date in September, Dr. Ray Cline 



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asked me to come over to assist in some translation with a 
man that he thought was a very valuable resource and had 
introduced this man to the Director personally, the Director 
of the Central Intelligence Agency. 

Dr. Cline thought that the individual, whose name 
I cannot at this moment recall — you perhaps can help me — 
had extraordinary information about everything that was 
happening in Central America. 

Q What was the person's background? 

He was a citizen of another country. 

Spanish-speaking? 

Oh, yes. 

Andreas Alonzo? 

No. Do you have another name that you can help 



A 



A 



A 
me with? 

Of course, there may be aliases, too. 

A No, no. I don't believe — there is a lawyer. 
It seems the lawyer was Alonzo. 

Guy Pierson? 

A Guy Pierson is the name. I forgot what his 
original country of birth is or was, and it may have been it 
was Nicaragua. But I have an idea it was from somewhere 



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1 else and he had gone to Nicaragua and settled. And he had 

2 gone to school with some of the commandantes, particularly 

3 the man who headed the Air Force, and he knew others. 

4 But, as a trader, a business man, he had entre to 

5 all these countries, and that's why Dr. Cline thought he was 
I 

6 I a remarkable resource. 

7 I So, with Dr. Cline prevailing on me to come over 

8 I and assist and asking Barbara if I could do this as a favor 

9 for Dr. Cline, during, you know, our normal duty hours, she 

10 said, "Yes, absolutely. Go over there and it may be 

11 interesting. You may learn a lot of things. He's a 

I 

12 1 business man and he's going to all these capitals." 

13 I went over and talked to him. 

14 j To Pierson? 

15 A Right. I found him to be utterly worthless aa a 

16 source, and that was my personal evaluation — a name 

17 dropper who would produce cards for everybody — the son of 

18 the President of Mexico, this foreign minister, that person. 

19 As you may know, throughout Latin America, one of 

20 the greatest things you do is exchange cards, so you can go 

21 through a receiving line and collect calling cards. 

22 You go to any social function and collect calling 

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cards. The possession of calling cards doesn't demonstrate 
to me close, personal contacts. They're useful and they may 
lead to something. They may suggest something, but they're 
not prima facie evidence that you have all this detailed 
knowledge. 

Always at Dr. Cline's insistence, never at my own 
volition, I went to maybe to other meetings with — 

Let me stop you there. 

A But, on this first meeting — 

When was it? 

A It was before October 5th because there was no 
plane that had gone down in Honduras. I'm going to guess it 
was in September and I'm going to guess it was shortly after 
Colonel North. 

This man — 

Were you present when Pierson was present, when 
Cline was present? Was anybody else? 

A There may have been Colonel Bill Bode, who was 
then working for Undersecretary Schneider, because this 
man claimed to have a great deal of technical data and 
information, andl 

Who was the other man? 

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A ^^^^^^^^^^^^^^^H whom have given you 
before. I asked them to join the conversation because of 
Dr. Cline, you know, the former DCI, very respected 
representation that this man was a tremendously important 
source and nobody was paying attention to him. 

What I got from him was a diatribe on why the 
United States wasn't doing anything that it should be doing 
in Central America and should go down and overthrow all this 
communist regime in Nicaragua and do a lot of very positive, 
substantive things, all of which I disagreed with. And I 
told him that. 

I said. That's the worst thing the United States 
can do. I had seen my role in the last three years working 
to prevent any unilateral U.S. intervention in Central 
America or anywhere else in Latin America. 

In my judgment, it would be bad short, mid and 
long-tern and increasingly bad as you kept going out in the 
more distant time periods. 

And it was, you know, to waste my time, because 
it was a total waste of time to hear what I heard from 
Presidents in Latin America, from Foreign Ministers, from 
Defense Ministers, from heads of Amed Forces in private. 



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but particularly when you hear this from civilian Presidents 
who tell you what you need to do is come down here and 
invade with the 82nd Airborne Division and the lOlst. 




-- gave me the names of the 
units we should bring in, and then that same person, when he 
speaks to the press or the media or publicly would denounce 
the U.S. policy to provide support for the Salvadoran armed 
forces, to resist that country being taken over by communist 
insurgency, or to do anything with respect to the contras. 

So you're getting, you know, the hypocrisy, the 
double standard, what they say for public consumption and 
not what they tell you privately. 

And I think, if you get Elliott Abrams over here, 
that at a very high level, he and the White House people 
hear this all the time. They go around and they're told 
what you need to do is come down here and invade, but 
publicly they denounce every alpha to omega of the present 
U.S. policy, which is one short fingernail of that kind of a 
concept that's being urged on us privately by the Latin 



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Yet, the more liberal the leader as he appears to 
his public, the stronger the advice you get to come down 
there and do something decisive to get rid of these 
communists. 

In Nicaragua, they're going to destroy us, 
they'll tell you, 

Let me take you back to Pierson — 
A Just to finish this point. So Guy Pierson was 
giving me this speech that I have heard from so many Latin 
American leaders and it was annoying. It was a waste of 
time. 

So, I, with some asperity, told him he was 
wasting my time to tell me this, that we weren't going to do 
anything like that; nobody in the United States government 
should listen to that kind of proposal. 

What you need to do, I told him, is go down and 
get the business community, the church community and the 
government officials to say to their people what you're 
saying here, how dangerous this insurgency is, how bad 
communism is, and what needs to be done is to take a strong 
stand by Latin American officials in the Latin American 
sector. 



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They have to come up against it. And then I said 
it's possible that the United States could fall in behind 
and provide support, first of all, on the economic level and 
certain political support and, possibly, if there were ever 
any concerted action under the Rio Treaty that were led by 
the Latin Americans, then the United States, if the Rio 
Treaty is invoked, since they are signatory of it, could 
participate. 

But they should have a minor role. And if we did 
it, I said, the way 1 was proposing to them, you wouldn't 
need a military intervention; you could do this thing with 
the resources that were down there. So why don't you do 
that? 

And I said, if you go around and you travel, 
there's an advertisement from "Soldier of Fortune" magazine 
for SI million for a HIND helicopter. Why don't you tell 
your friends to go produce a HIND helicopter? 

Because I knew that that would be very valuable. 




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It would be extremely valuable from an 
intelligence standpoint and would save lives in the future, 
unhoped for and, hopefully, defer future conflicts. 

But, if they're not deferred, we should know all 
there is to know about the HIND because that's the bird 
that's going to eat us up. 

So I threw that out to him and he said, "I can 
get that," and I was very skeptical about that. But he then 
followed up with a lawyer in California, whose name I have 
forgotten, who seemed to be even less professional and less 
likable than Mr. Pierson, and on Dr. Cline's importunings I 
got back into this on several more occasions. 

And in the course of doing it 




that they did seem — if you could believe 
them — to have the contacts that could produce a HIND, I 
said, "I don't want to be involved in this, but here is the 
information." 

And I passed it on. It came to my attention that 
there was no plan. Now, you had this thing out. It wasn't 
7-Elevens, it was all over Central America. And there was 



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at least a possibility that somebody was going to get in a 
helicopter and fly out with it. And there were no 
provisions anywhere along the line to receive this 
helicopter, to give it any directions or to sequester it 
once it got in. 




So, aware now, as an American citizen who had the 
technical and professional qualifications to develop a plan, 
I put together with the assistance of Nike Timpani a plan 
that if anybody were to fly out an aircraft, which way would 
you go to avoid, you know, the dangers or get shot down on 
the way out; number two, get shot down on the way in, 
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didn't know it was coming and there was nothing set up — 
radio frequencies, an alert provision or any contingency 
planning — they would shoot down or destroy the helicopter 
on the ground. 

Further, what do you do with the ordinance a 
board? You bring in a HIND helicopter with all the 
sophisticated ordinance it carries, where can you land it? 
How could you make sure the people who brought it out were 
properly treated? 

If a defector did come out and If it were, as was 
suggested at one time — this would be very sensitive 
information. I got it as unclassified, but it's very 
sensitive information. If it's true. And I was told it was 
true. 




and the pilot, which I don't think he 
could really do, but he would force the pilot to take it 
out, then you had to make provisions that he was properly 
received and if he brought his family out that they were 
properly received, that you didn't have people shot on the 
ground or mistreated on the ground. 

So I developed a plan which took all of these 



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things Into consideration and I turned it over to the 
Pentagon, to the Joint Staff, the JCS — when I say the 
Pentagon, the Secretary of Defense's Office of Latin 
American Affairs and specifically to Dr. Ikle ~ l-k-l-e~ 
who^^^^^^^^^^^H^^^^^^^^^^^^^^^Hand other programs 
a nd^^^^^^^^^^^^^^^^^^^^^^^^^^^H 

Who at JCS? 

A I turned it in to the Joint Chiefs of Staff, to 
somebody there, to a Colonel in Arroy Intelligence who works 
on Central America, with the admonition, "Please get this 
into the system, because I don't want to be involved in 
this.- 

These contacts were in effect pushed on me. They 
seemed like they could produce fruit, but it should not be 
done by anybody in the private sector. If it's going to be 
done at all, it should be done with the U.S. government. 
And I believe j 




and hand over copies or make sure that they had received 
copies of the entire report. 

In other words, I made a memorandum of all these 
contacts with Mr. Pierson and this despicable lawyer who was 



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going to be hla partner, who Immediately wanted three or 
four million out of patriotism. And that bothered me a 
great deal because I had lost an eye, the function of my 
lungs, a kidney and I have all kinds of orthopedic Injuries 
that I'm really totally disabled, serving my country, and 
for these people who profess to be patriots and were going 
to do, as Mr. Plerson said, with nothing in it for me and 
now, all of a sudden, everybody wants a million dollars, 
including the lawyer in California. 

I said, "I don't want to have anything to do with 
you if that's your concept of your wanting to serve your 
country, Nicaragua." 

The lawyer was from Cuba, "And if this is your 
concept of patriotism, I don't even want to deal with people 
like that; even if you produced the HIND. I wouldn't want 
to be associated with you." 

I pretty much washed my hands of it. But, in the 
discovery of the fact that we had this information out, 
whether we wanted it to be done or not, and that there was a 
real possibility that 
might come out with the bird, or that some other pilot might 
bring it out, and there was no plan to receive it or no 



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U/bc 1 plan to tell the pilots where to fly or how to fly so that 

2 they would be below the radar coverage — and there are 

3 places where you can do that and places where you can't, and 

4 also places where you can land for refueling, and a 

5 provision to jettison the ordinance at some point, you know, 

6 because I can't imagine coming in to El Salvador to land at 

7 any particular place where you — or Honduras — where 

8 you're coming in with live ordinance support, you wouldn't 

9 run the risk of being shot down. 

10 So, one of the first things you should do is get 

11 rid of the ordinance. Then I looked into the possibility if 

\ 

12 the United States government ever wanted to support this thing 

13 of a ship that could come — there is a private vessel that 

14 does work for the government, that has a landing deck on it, 

15 that could land the ship. 

16 And all of this was part of the plan, which I 

17 have no copy of. I turned all this in to the various 

18 government agencies and said, "I'm out of It." I didn't 

19 want to get into It In the first place. 

20 I heard about it because of General Singlaub's 

21 question to Ollle North. I used it really as, you know, 

22 don't give me any more sermons on how the United States 

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J/bc 1 should intervene; why don't you people do something. 

2 I really used it as an example that I didn't 

3 think he was going to come up on. But Dr. Cline is an 

4 expert in this and thought that they had a real capability 

5 to bring it out. 

6 So I'm now reporting all of this. And of course 

7 one of the people that I gave a copy of the plans to — and 

8 all the reporting memorandum on it was Colonel North — and 

9 I told the Pentagon and the agency that I had done this, 

10 that Colonel North had a copy of it because that was his 

11 proper responsibility. 

12 How did you give it to Colonel North? 

13 I A Personally. 

14 ! Handed? 

15 A Yes. 

16 Q Did you meet with him and discuss it? 

17 A No. Well, I don't want to say I didn't, but my 

18 recollection is I met him briefly and gave him it and said, 

19 "You don't need to look at this now because it's a 

20 contingency plan." 

21 In any case, I had no idea Colonel North was 

22 personally involved in any kind of operation. That is not 



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J/bc 1 my idea of the appropriate role for anybody on the NSC staff 

2 at any time in any kind of operation. 

3 And because of that I said, "You don't need to 
look at this now. Put this into the system so that there is 

5 i a plan. There's a lot of useful information in it. For 

6 example, if we ever had occasion, with Congressional 

7 resolutions and White House decisions, the State Department, 

8 the Pentagon, where we had to take in concert with other 

9 allies some positive action forced on us because the 

10 Sandinistas invade Honduras or Costa Rica." 

11 I pointed out to him that the reciprocals of all 

12 these legs, these courses plotted, and the information would 

13 be useful in that context. 

14 But that's not why I did it. I was not planning 

15 any kind of military operation. I was simply offering a way 

16 to properly receive the crew, the people defecting, so they 

17 wouldn't be mistreated, killed or the bird destroyed or 

18 given back within a couple of hours. 

19 You met then with Colonel North and gave it to 

20 him where? 

21 A In his office. 

22 Q And was there anybody else present when you did 



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A No. I just handed it over to him. So those 
documents should be in his office unless he put them into 
the system. And they should be over in the Pentagon and 




They said, "We don't have anything like this and 
we're very grateful you did it, but we don't think — ■ 
Now, this was the man I met with. Maybe^^| 



Now, that's my next question. Who did you meet 
with? ^^^^^^^ 

wa s^^^^^^H bu t 
met with two people and I really have to search my memory on 
that because I wasn't interested in getting a connection. 

I was interested in getting out of the business 
of working on this helicopter. 

What was the position represented to be of these 
people that you met? 

A They were part of the task force on the 
intelligence side and one of them may have been an operator 
and I suspect probably was, and it would have been 



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Identified to me as such. 

Did you meet with thel 




A Yes. That would have been one. And I handed it 
over and they told me they had already gotten it through my 
earlier efforts to turn this in, had received it and thought 
it was very professional, thanked me for it and I said, 
"That's the end of it." 

r said, "Now, I've got great doubts on this guy 
Pierson and even more on this Alonzo. And anything that 
they would do. So I'm offering this in case anybody ever 
brings it out, here's a way to do it." 

And they said very good, thank you. We agreed — 
Alonzo was the California lawyer? 
A He was the California lawyer, the Cuban. 
I'm sorry. You agreed what? 

A We agreed that these people were unlikely, based 
upon my impressions of theml 

that they were unlikely to produce 

anything. 

They were unhappy that Dr. Cline had introduced 



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Alonzo directly to the DCI. And they'll tell you that if 
you bring them in on it, if it's somehow relevant. 

I don't really think it is, any of this, by the 
way, but Dr. Cline and I did agree on one thing; that often 
in this business, you know, intelligence, you don't deal 
with very lovely people and sometimes some very unlikely 
people can do some very unlikely things. 

The fact that this man was a trader, that he had 
in fact been to school there, there was no doubt about that. 
He had been a classmate of two or three other commandantes, 
knew the Air Force Chief personally and had access to the 
families and, in Latin America, things can be done that way 
that you can't do any other way at all. 

People will respond through family connections 
that will transcend everything. The fact that he did have 
these contacts, which had been verified, and the 
connections, made it at least a possibility that he could do 
it. 

Then, when the aircraft went down on 5 October, 
my only further contact was to first — 
5 October or 5 November? 
A S October. 

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Your plan was dated October 16, 1986; is that 
right? 

A There nay be various iterations of it, but the 
concept, you know, from 5 October on, I was telling Mr. 
Pierson not to do anything or to put everything on hold, and 
Dr. Cline agreed and I agreed to that because the aircraft 
went down. 

Now there were policy ramifications that to have 
any person, even a private citizen, even appearing to be 
encouraging this, could be very counterproductive. 

Not because the Congress would be critical but 
because it would hurt the interests of the United States. 
And my concern was always to protect the interests of the 
United States. 

As I say, I got into this and I would not ever 
have proposed offering this reward. But there are 
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Was it Cline that had arranged for your meeting 

at the CIA? 

A No. 1 did that myself. 

And how did you do it? 
I called. 
Who did you call? 




A 

A 

And you knev 
A Well, because of my past work in the military. 
Remember, I had responsibility for Latin America. 






know, there was this effort 
being pushed very strongly by 'Soldier of Fortune" magazine, 
I didn't know about any of this prior to 1 September. 

I didn't know that anything like this was going 
on and would have opposed it if I had known. 

When would you have calleo^^^^fcbout this 



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A 



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So it was sometime in September? 
A Right. It could have been early October 
sometime, you know. In other words, after I met and did 
this and got it into the system, and there were different 
iterations of the plan, because the more I thought about it, 
the more it became apparent that there were different parts 
that needed to be done. 

For example, what about an East Coast or West 
Coast or Pacific or Atlantic departure? They needed to have 
more than one route. They could have gone south, could have 
gone north. 

Could they take the Atlantic approach or the 
Pacific approach? So all of these were put together and I 
don't know which one you're looking at. 

And, finally, refined and consolidated and turned 
in, but strictly at the standpoint of dropping my 
association. 





But, if I may ask you something, why does this 



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have anything to do with Iran or arms for the contras? This 
is another whole thing, a whole subject entirely. 

Essentially, what we're trying to track is the 
nature of what Dr. Cline was doing 



A I think Dr. Cline was totally professional and 
proper on this. I may be wrong. 

I'm not suggesting — 

A I want to go on record as saying under oath that 
I think Dr. Cline, whether he was right or not, I'm not 
prepared to say. And in this evaluation of Alonzo, because 
he's really an experienced and he told me, informed me in 
another context, a very sophisticated man. 

Indeed he Is. He's an Intelligence professional 
of the highest order. He's written books, practiced it and 
he's achieved some really great feats in intelligence and 
operations for the United States over 40 years. 

So, for Dr. Cline to think this was worthy and 
interesting, and I think it was his suggestion to me that 
there's no plan — Immediate plan to get this out — that 
caused me to sit down and start putting something together. 
And then I turned It In and when I turned It In, 




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I said, "I wash my hands of this. I don't want to be 
involved in this in any way. I don't want my company to be 
involved in it." 

And we never were. 

Timingwise, however, you have a recollection of 
submitting more than one version of the plan? 

A Yes, because he refined it and made it better. 
Then, after the plane went down, I met witt^^^^^^^Hind we 
both agreed any further pursuit of this could be very, 
dangerous, you know, in the sense it could actually do ham. 
Further,! 




Do you remember who was there? 

A Probably the same people or maybe just one person 
at that time. 

And who set up the meeting? 

A I would have done it. 



A Well, somebody in his office. I never met with 
him because I always said, you know, this is a peripheral 
thing. It's a contingency plan. It's not something you're 



going to do. 



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In fact, when I turned It in — and I want this 
on the record — I didn't put it in with a reconmendation 
that we pursue it. I said that if anybody in the United 
States government thinks it's worth pursuing, here are the 
contacts and here is a way to do it. I don't want to be 
involved in it. 

And it shouldn't be done unless there is 
government involvement. See, this time I didn't know that 
there were private sources and organizations or activities 
going on, and I really deplored the idea that "Soldier of 
Fortune" magazine would put out a reward like this because 
you could stimulate somebody to doing it without the 
government being involved to receive the bird. 





A Yes. Now we're processing water back and forth 
from the mill. I told them that I didn't think they were 
very good people, that Dr. Cline did, but my own evaluation 
would be that they weren't the right kind of people to be 
dealing wlthl 




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And I shared that view with them. That's not 
what should have happened. But the guy was a lightweight as 
he appeared to me, but there, again, you have to defer to 
Dr. Cline's judgment. 





A Yes, that's true. 

Do you remember who was telling you these things? 

A Can you help me? Lead me? 

Were you told of 
^^^^^^H>y either Pierson or Alonzo in connection with this 
proposal to remove the HIND helicopter? 

A A general? 
A wealthy! 




Right. 

What were you told about 



I don't remember except I told him not to deal 

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U/bc 1 with hira because in Miami and because the more people that 

2 knew about this and the more machinations, the less likely 

3 it was to succeed. 

4 What Mr. Alonzo had said to me was that he had a 

5 personal connection with the man who was going to bring out 

6 the helicopter and he would go down there as a trader and 

7 tell him, you know, how to get it out and where to go with 

8 it and assured him — see, this is a family connection now, 

9 somebody who is closely tied with the family, and Alonzo 

10 said he was related to this man on his wife's side and could 

11 assure him that the million dollars would be paid. 

12 The problem was, according to Alonzo, after he 

13 looked into all of this, was that, yes, everybody knew about 

14 this, but nobody believed it, and that's what I learned, 

15 too. 

16 Everybody in Nicaragua knew about the posters and 

17 award but nobody believed it was for real. That it was 

18 just» you know, a Psy-OPS ploy on the part of the Americans to 

19 stir up discussion and trouble in the Sandinlsta Air Force, 

20 but nobody would really be paid a million dollars. 

21 So, if you were going to get the plane, you had 

22 to convince whoever was going to bring it out — the 



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J/bc 1 aircraft out — that there really was a million dollars and 

2 it really would be paid provided the aircraft was safely 

3 delivered. 

4 If it got shot down or was destroyed on the 

5 ground, then we wouldn't pay for it, or crashed when you 

6 landed. 

7 Was a Miami business man by the name of Tomas 

8 Borga ever mentioned to you? 

9 A I don't recall that name. But I told him, you 

10 know, "You proposed that you were going to do this and you 

11 shouldn't involve a whole lot of other people in it." 

12 And as you understand it, there was never any 

13 suggestion this was a GMT project? 

14 A No, of course not. What I did on this, I did on 

15 my own time. However, the typing was done at GMT of the 

16 plan with Barbara's permission. And I can tell you for the 

17 record that she did not look on this as a way to win favor 

18 with the CIA. 

19 1 have another document to give you. General. 

20 You recollect when we spoke last time, we looked at what was 

21 Exhibit 2, which was two pages of what I now know to be a 

22 more extensive document. 



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J/bc 1 A Yes, I told you it was. I just didn't have the 

2 rest of it. These were the two pages I submitted, and I'll 

3 continue to look for the others. 

4 1 think I have located them. Do you know how 

5 this document and its more expansive version got into the 

6 possession of Colonel North? 

7 A I didn't know that it did. 

8 So you don't know how it got there? 

9 A No. That's the first I've known it went to 

10 Colonel North. All I knew is that it was Barbara's idea, 

11 which I did not believe, that she in her own development of 

12 the idea had asked me to look at and, as far as I knew, the 

13 document didn't have any circulation outside of me, and I 

14 didn't do anything with it because I didn't think it was a 

15 good idea. 

16 It certainly wasn't a workable idea, not by a 

17 company, and I don't think it would be in the interest, as I 

18 testified before, of the United States to propose such a 

19 thing. 

20 Let me show you what I believe to be the entire 

21 memorandum. 

22 A I have seen the entire memorandum before. 




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420 
MR. KERR: It has Senate numbers N, as in 
Nicholas, 5118 through N-5521. It was obtained from the 
files of Colonel North at the National Security Council. 
I'd like it to be marked Exhibit 11. 

(Schweitzer Deposition Exhibit 11 identified.) 
BY MR. KERR: 
Would you look at Exhibit 11 and tell me if you 
have seen this document before? 
A This is the document. 

And this would appear to be the document in its 
entirety? 

A Yes. It was about four pages. That's what you 
have here. 

If you look at the objective problem and proposed 
aspects of the first page, I'd like to explore this document 
a bit further with you. 

As I read it, the perceptive of the objective 
problem and proposal, the proposal appears to be quite 
candidly designed to permit support of covert wars outside 
of what is characterized as an increasingly predictable and 
uncooperative Congress. 
A Yes. 




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Q Okay. Did you discuss with Mrs. Studley her 
proposal to set up a way of conducting American foreign 
policy de hors the United States Congress? 

A What I told her was that the document — the 
proposal was exactly that, it was a foreign policy proposal 
and it was not the proper role of a private company to be 
involved in and that the idea really was not a very good 
idea because it wasn't workable. 

Did you ever discuss this proposal with General 
Singlaub? 

A No. 

Do you have any knowledge of his knowledge of 
this proposal? 

A No. But he, as I told you when I testified 
before to you, he expressed this concept before in a much 
vaguer, more general way to me, and I had not recalled that 
when I earlier talked to Mr. Albright. 

I didn't think it was a good idea when General 
Singlaub proposed it and we, therefore, didn't have a 
discussion on it. I never had a real discussion with 
Barbara because I thought It was a paper she had given me 
that had no other circulation and it, therefore, died with 

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She asked me once or twice if I had the paper and 
if I had done anything on it and I responded affirmatively 
to the former, negatively to the latter and, you know, would 
give it as tactfully as I could because she was obviously 
very proud of this idea, but it was a bad idea. 

I didn't have a confrontation with her over the 
paper. I don't like anything at all about it. 
9 The reason I'm curious about one aspect of it is 
10 that, again, you recall it makes reference to using the 

IS a conduit for part of this 

transaction. 

A Right. 

General Singlaub has traditionally been somewhat 
concerned about assisting! 

Do you have any knowledge of how he would have reacted to a 
proposal that would suggest upgrading the armanents of the 





A This would be one of my own concern s, too, you 
know, to get in bed with! 

21 which is a communist regime, to support insurgencies - 

22 which they are doing — against communist regimes for 

0! 

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monetary gain. 

There's something that's just so distasteful to 
this Cor me. Fi rst of all, why do you want to bring money 

ind why do you want to 
join them in one of the most charitable interpretations of 
what they would be doing would be hypocrisy. 

And, again, you have no knowledge of how this 
document got into Colonel North's possession? 

A No. 

What he did with it? 

A No. 

Who he discussed it with? 

A No. 

And Mrs. Studley never told you anything about 
it? 

A No. She never told m« she gave it to him nor 
that it was in his possession through any means. She was 
very proud of the document and of the idea and she told me 
she had discussed it with General Haig, and that General 
Haig, according to her, said it was brilliant. 

I doubt if General Haig said that to her. And if 
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1 this point, what she's proposing here is not that anything 

2 be done surreptitiously, but it be done as a conscious part 

3 of U.S. policy, and the way I would read what she's saying 

4 here with each passing year, Congress has been 

5 uncooperative, that has to do with the funding. 

6 I think you will have to agree, whether you want 

7 to on the record or not, that Congress' sad legacy, 

8 particularly with respect to Latin America, is that the 

9 rhetoric has always outstripped their behavior. 

10 In fact, the rhetoric of what we are going to do 

11 starting with the Alliance for Progress with each President 

12 has been outrageous. We have never done one fraction of 

13 what we said we were going to do, and this is the real 

14 source of so much of the antipathy, hatred and anti-U.S. 

15 feelings that exist down in Latin America. 

16 We promised them everything and we've done almost 

17 nothing for them. What Barbara I think is saying here is 
13 that the United States government, not in a clandestine way 

19 at all, would adopt this as a policy and overcome the 

20 Congressional unwillingness to fund foreign military 

21 assistance by making a business out of it. 

22 Let me address you to item number 4, paragraph 3, 



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where it says, "The United States then has at its disposal a 
large and continuous supply of^^^^^^Rechnology and weapons 
to channel to the Freedom Fighters worldwide mandating 
neither the consent or awareness of the Department of State 
or Congress." 

A That's a bad part of the paper and that's why I 
never associated myself. I never showed this to anybody. I 
never advanced this idea to anybody and I threw cold water 
on it and did nothing with it in GMT. It never became an 
active program of GMT and I'm probably responsible for that. 
I'm sure to Barbara's dismay. 

You had no further or additional knowledge about 
this proposal or attempts to implement it or anything else? 

A No. I would say it's never meant to be 
implemented. It's nonimplementable, to use a Haigisra. 

Q Well, with regard to what General Secord and Mr. 
Hakim were doing, which may have resulted in a situation 
where millions of dollars were kept in such a way that they 
could be used to support various insurgencies, do you know 
of any relationship between Mrs. Studley's proposal here and 
what General Secord and Albert Hakim were in fact doing? 

A No, I do not. But if the paper got circulation 



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1 within the White House, then it could provide the 

2 intellectual basis or the theory for what was being done. 

3 That's why I don't believe it's Barbara's paper. 

4 I don't think she has — and I mean her no 

5 disrespect, but I don't think she has the background to 

6 formulate a complex international relations proposal like 

7 this. 

8 As I told you before, this would take a State 

9 Department to implement and would take an interagency 

10 arena — the State Department couldn't do it alone. 

11 You know, there are at least four or five 

12 agencies that would have to be involved in this besides the 

13 obvious ones; the Pentagon, the White House and the Central 

14 Intelligence Agency. 

15 You would need the State; you would need 

16 Treasury; you would need Commerce. 

17 MR. KERR: General, bear with me. I need another 

18 batch of documents marked. 

19 THE WITNESS: It's a bad idea and I never allowed 

20 it to get any legs. If Barbara, independently of me or 

21 prior to my joining GMT, had surfaced or advanced it, she 

22 never made that known to me. 



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MR. KERR: Give me a second to get organized and 
if you want to take a break for a minute, we can come back 
and I'll give you another series of documents. 

(Recess. ) 



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MR. KERR: On the record. 
BY MR. KERR: 
General, I want to take you to a different area 
now. 

You and I spoke briefly about the vessel, the PIA 
VESTA, and whatever you knew about that when we last were 
here. We have now obtained some documents from GMT, which I 
would like you to look at and tell me if you have ever seen 
them before, if they give you any further recollection. 

Let me identify them for the record. These are 
House Number G00315, 316, 254, 255, 252, 253, 276, 277, 278 
and 272, all of which will be Exhibit 12. 

(Schweitzer Deposition Exhibit 12 
identified. ) 
BY MR. KERR: 
If you would just take a moment to read the 
consents and tell me, first, whether you have seen any of 
them before. 

A I have never seen the first page, which is about 
Patrice. I have never seen the second page, which pertains 
to Dan Cummings. 

Let me tell you of the association with Dan 



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Cummings. He is out in Manila, working on this project. I 
don't want you to think that's because he was a GMT 
contract. 

Q You did not know Mr. Cummings at the time he was 
apparently in contact with Mrs. Studley, which would have 
been August? 

A Yes. He was one of the sources that I told you 
— peripheral sources that I checked for one or two items 
to get a quote from. But his quotes were way out of the 
ballpark, high, and I dropped him. 

As you will see, Mr. Cummings is an employee of 
Patrice. 

A I didn't know that. 

Q You had no contract with him on the PIA VESTA? 

A And I don't know who Patrice is. 

Q His identity is on the last page of that 
collection of documents. 

A I have never seen these documents, and I think 
that's interesting. If they came from GMT — you said they 
did 

Q Yes. 

A Then why didn't GMT show them to me, and 
especially if they are dated the 2nd of September? 

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Yes, sir. 

A After I was there. I have never heard of this 



man . 



Q This man being? 

A Patrice. Patrice Genty de la Sagne. And the 
second thing is a memo from me. 

Q It's a handwritten memo? 

A A handwritten memo dated 18 September. And the 
reason I say "David Duncan called Barbara 17 September 
twice?", I didn't take the calls. I have never spoken to or 
met with David Duncan. This was a message the secretary had 
given me and was going to give to Barbara, and Barbara 
tended to kind of, with knee-jerk regularity, to react 
positively to anything that hit her desk. So I had seen 
this, and I thought it was a terrible idei^that she had 
anything to do with Duncan. And I said that in my memo. 
A bad idea. Bad for Barbara and bad for GMT, underlining 
the "and." Neither honest nor prudent. Duncan is a bomb- 
thrower. GMT has no connection with him. That's what I was 
told. Never did. I was told that. To see him is to 
suggest a connection or give him more names to use in his 
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2 Then i gave her an appraisal of David Duncan, 

3 very conservative. 
Q Where did you get this information on Duncan? 

5 A Let's see. I haven't looked at this in months. 

6 Oh, from Barbara. There seems to be something missing. 

7 There has to be, because I don't write like that, so 

8 something is missing. "Not all well going." 

9 Do you know whose handwriting it is? 

10 A That's mine. You know, I can't do anything but 

11 help you on the last part of that. It just doesn't make any 

12 sense to me. It doesn't seem to be part of this at all. 

13 Do you have any further recollection of the 

14 knowledge you would have had? These documents all relate to 

15 the PIA VESTA and cargo. 

16 A No. I don't know anything at all about the PIA 

17 VISTA nor the cargo nor Patrice nor was ever told anything 

18 at all about that. I can't handle the second thing at all. 

19 What I can relate to is the — what I testified to you 

20 before is that Barbara said she had a call from David Duncan 

21 before I came to GMT, and that he had met with her, that she 

22 had then written up a memo, which we sent to Ollie North, 



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1 and she talked for weeks about David Duncan. And I could 

2 never understand why she was so preoccupied with David 

3 Duncan, because her story to me was that David Duncan wanted 

4 to be a supplier or a broker or, you know, a source for 

5 Barbara, and I said, "You don't want to deal with a guy like 

6 this. He's dishonest; he's imprudent, you know, he's 

1 telling things that aren't true to the press. And we don't 

8 want to be associated with him in any way." 

9 And Barbara agreed with me. Barbara never said 

10 "But I have dealt with him in the past" or " I know something 

11 about a ship." 

12 The way she presented the story to me, it was 

13 just David Duncan had come in out of the cold, told her all 

14 about the ship. It didn't have anything to do with her or 

15 GMT, and he was proposing that they establish a business 

16 relationship, and I was telling her, "You don't want to be 

17 associated with David Duncan." And she agreed with me. 
13 At no time was this ship mentioned by name. 

19 Now, it may be, because I told you I never heard 

20 of the ship, that the press stories at the time mentioned 

21 this ship, and I saw the name, but the name of that ship, I 

22 would swear was never uttered in GMT. 



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1 Q The last handwritten page which says, "Prices 

2 from Dan Curamings," whose handwriting is that? 

3 A Barbara's. 

4 Have you ever seen that document before? 

5 A No. Let's take a look, though. 

6 The items listed are the cargo of the PIA VESTA. 

7 A I have never seen it, nor was that ever discussed 

8 in my presence that I can recall. And I would have 

9 recalled, I think. 

10 All right. To help me with your handwriting and 

11 in terms of pages 277, could you just read the items — the 

12 one you can relate? 

13 A You know, the top part is "David Duncan, very 

14 conservative." I don't know what context that's in. And I 

15 can't relate to that, because he's a very imprudent — you 

16 know, not a conservative person at all. It may have had to 

17 do with — see, he was in the NSC, and I knew of him, 

18 although I did never meet with him personally. I knew of 

19 him when he was in the NSC, I think in the Carter 

20 Administration, and I think he was then — I guess that's 

21 the context. He was a conservative person, who took very 

22 strong anticommunist views in the Carter White House. That, 

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1 I take it, is what that refers to in conversations with 

2 Barb. "Not in Polish equipment." I just don't know, in 

3 conversations with Barbara, he's got a source on Polish 

4 equipment, to get any type of Polish equipment provided at 

5 competitive prices. And then the rest just doesn't make any 

6 sense. 

7 Insofar as you can read it, could you read it? 

8 A "Not all well going. Index or independent 

9 times." I don't know what that means. 

10 "Maurice Bishop," obviously with some word left 

11 out. "September 20. Concerns military complex for Grenada. 

12 Mike Ruiz, a U.S. war veteran. Colonel Elbert Cumraings." It 

13 is Rice or Ruiz, phonetically. I can't relate to any of 

14 this. I don't remember. It is obviously some notes I made, 

15 but see, this is early in the game at GMT, and sometimes 

16 Barbara would say things. 

17 You've dealt with her, haven't you? 

18 Yes, I have. 

19 A She speaks very rapidly, very volubly, and I 

20 never could quite understand everything she was saying. 

21 Either she didn't tell me the whole story, which you're 

22 suggesting, or she told me a different story, which you are 



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also suggesting by your questions, and I might have made 
some notes just trying to sort out what Barbara told me. 
But I certainly didn't deal with Maurice Bishop or with any 
of these people, and I have never spoken to Cummings. So 
the bottom of this page looks like some notes that I made. 

Does it refresh your recollection of knowledge 
that you had that the cargo of the PIA VESTA was Polish arras 
and trucks? 

A No, it doesn't. And the only thing that I know 
about that is from what was in the newspapers, and I would 
have believed to this day it was destined for Peru, for the 
Navy and then got diverted, and it was never destined for 
use by the armed forces of El Salvador. And that was 
something David Duncan tried to blame on^^^^^^^^^^^^V^in 
order to get the cargo released] 

The initial part of the note of September 18 says 
that he, Duncan, and Alberto Coppo — do you know the 
Alberto Coppo that you're referring to here from Peru? 

No, don't. ^^^^^^^^^^^V 3 well-known to 
could have gone tc^^^^^^^^^^^^Hand asked to 
release the ship. I never did, and nobody ever suggested to 
me that I should, nor would I have done that. 




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1 With regard to the reference in the August 29, 

2 1986 memo of the meeting between Ms. Studley and David 

3 Duncan, there are some strange things said. If they give 

4 any recollection, please tell me about it. 

5 A Sure. 

6 I'd like you to read it. Numbers 254, 255, and I 

7 am particularly interested in the references to "Black money 

8 in Swiss banks that could be used to buy various types of 

9 goods." 

10 (A pause. ) 

11 A This strikes me as a series of untruths. Now, 

12 just from my knowledge of the way the United States 

13 Government and the system operates, perhaps if it turns out 

14 that all these things that have been in the media are true, 

15 I might have a different impression of how the government 

16 operates. But the government that I know and the NSC that I 

17 knew wouldn't operate this way and wouldn't deal with a guy 
13 like Duncan. 

19 And Duncan, as I suggested to you, and it is my 

20 speculation, is a man who was stuck with an order, and he 

21 didn't have either the money or the goods, and he had to go 

22 and explain to his partner or his boss that he had lost the 

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shipment and the money, and you see you a man lashing out 
wildly trying to involve other people. And I speculated on 
this to Barbara, because I knew she had this obsession with 
him. I was new. And you want to be polite to your boss, 
wasting time, instead of working on business deals. 

Of course, there would be a different explanation 
if there was some sort of business connection between 
Barbara and these people, because then all of that would 
have been very relevant. At the time, it just seemed to me 
to be totally irrelevant. And I don't know that she did 
have a connection with him. I certainly learned of none 
when I was there. 

I don't know Nunez — N-u-n-e-z M-o-n-t-e-z — a 
colonel. But Duncan stated that Colonel Nunez Montez' 
partner is the former G-2. I think that's correct. I think 
he is. I think that may be true. 

Do you know Vincent Castero? 

A Oh, yes, very well. He's an NSC staffer. 

He was on the NSC staff at this period of time; 
was he not? 

A Yes. Right. 

Q Do you have any knowledge of a meeting that 

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1 Duncan had with Mr. Castero? 

2 A No. Wait. I think, yes. 

3 When Duncan was getting all this publicity and 

4 giving it. North told me he was going to sue Duncan, because 

5 Duncan said he had been to see Colonel North — and please, 

6 I'm very inexact on the quote here — had been to see 

7 Colonel North, and Colonel North had blessed or approved or 

8 disapproved or something. But he quoted a meeting with 

9 Colonel North that never took place. And I said to North, 

10 "was he ever even in the building?" North said, "Yes, he 

11 had been to see several people." And he said, "Thank God I 

12 wasn't here the day he was supposed to see me, but somebody 

13 had sent him to see me." Then my recollection is, it was 

14 Vincent Castero, a very good man. 

15 When did you have this conversation with Colonel 

16 North? 

17 A Well, it must have been in September. What you 

18 see is a braggart and a liar to me, transparently, and then 

19 Barbara apparently has written Duncan, "Duncan believed to 

20 be a very dangerous man." That's certainly what I would 

21 tell her. Is this supposed to have been written after I 

22 spoke to her? No, before. If she says this. "Information. 

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1 Duncan willingly gave, in a boastful manner." 

2 So I think what she is doing is providing a 

3 useful service. When you read the latter part of it, common 

4 sense conclusions, she's reporting a conversation and 

5 sending it over to the NSC. I think that's the responsible 

6 thing to do. But I didn't know then, I didn't see this 

7 document then. I did not know before covert black money 
could have on TOW ramifications. It sounds like Barbara 

9 did. But I don't. She never revealed that to me. 

10 Do you know if this material was, in fact, in 

11 whole or in part, provided to Colonel North? 

12 A I was told that the document that was taken over 

13 by General Singlaub, when I went on the first of September, 

14 was a copy of the Duncan memorandum, which I had not seen, 

15 in a sealed envelope. 

16 All of these documents, you will note, are dated 

17 September 2. Does that give you any additional recollection 
that you would have taken this material on September 2, as 

19 opposed to September 1? 

20 A That could be. 

21 MR. KERR: Of course, I don't have an '86 

22 calendar, so I don't know when September 2 was. We'll check 

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1 that. 

2 THE WITNESS: In fact, if we were to go back, we 

3 might find that September 1 was a Sunday and September 2 was 

4 a Monday or something. I just remember I went to see him 

5 the first thing on the job, or maybe I had to go back out to 

6 the hospital on the first. 

7 BY MR. KERR: 

8 Q In any event, the contents of the package yu 

9 delivered to Colonel North, you did not peruse; is that 

10 correct? 

11 A No. 

12 Q And there is no additional information that your 

13 memory had been refreshed on in connection with this 

14 transaction, that you haven't testified to; is that right? 

15 There's nothing further you know about this 

16 transaction? 

17 . A No. If I could, I would, but I'm telling you 

18 that if I had known that GMT ~ and I don't know that they 

19 were — but if I had known it were true that GMT were 

20 involved in supplying Illegally arms to the contras or were, 

21 you know, working with black programs, I would not have gone 

22 to work for GMT. They were not held out to me to be that 

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kind of a company, and I do not know that they are or were. 

Everything that I know, which i3 from Barbara, 
would be to the contrary of that, would be that her one 
involvement was as a private citizen outside of GMT and 
before she told me GMT existed. 

You have different information for me on that 
that you gave me the last time we spoke. 

MR. KERRs What I want to do now Is show you a 
series of documents relating to your contacts 




THE WITNESS: Off the record. 
MR. KERR: Sure. 
(Discussion off the record.) 



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1 PROCEEDINGS 

?. Whereupon, 

3 ROBERT L. SCHWEITZER 

1 resumed the dtaiid 'ind, having been previously July sw(jrii, was 

5 examined and testified further as follows: 

6 EXAMINATION (Continued) 

7 BY MR. KERR: 

8 Q G<!n<iral, what I'm going to do is I am going to 

9 dhow you a series of docuaents relating to your contacts 

w i t h^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^l 

11 and the main focus is just to identify the documents. 

12 A Sure. 

13 g Let ■« show you a letter date October 30, 19H(i 
addressed to^^^^^^^^^^K<hich will be Exhibit 

15 (Exhibit 12 identified.) 

16 THE WITNESS: When I testified before I told you 

17 there was one item, a noncoabatant helicopter, that I hoped 

18 would eventually go to the resistance down there. These wure 

19 Medical evacuation ships, and this was one that I was very 

20 much in favor of seeing them get, noniethai equipment, 

21 MedEvac, and -- but you could use it for anything. It would 

22 enable thea to a9ve people around and it was a very favorabU 



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price. 

It you have all the documents, this was a 
negotiating piict;, we wete negotiating with the supplier, the 
GMT markup I think was fairJy reasonable here and I was going 
to bring it down and did, and you are going to see that price 
goes down froB $/!.9 aiJlion, if you have all the documents. 
I don't remember what the bottom line was but it 
went down considerably. 
HY HR. KERR: 

This letter would have been addressed by you to 
^^^^Iright? 
A That's right. 

Q Hould thia j^ve been the f irst written 
communication you had 

A No. Because the £irst one we guessud was 
somewhere around 12 October. GMT told me that they had on 
file the letter that I took out there which was dated the 
12th. That's why I guessed when I testified to you before 
that my visit would have been around 12, or shortly al:ter 
that, October. They should have given you that letter if you 
subpoenaed it because it is in their tile and the day I came 
over here they told me in the morning that it was there. 




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1 Q For one r«dson or jnothei we don't have iL. 

2 A That would have bt:en a notional Jist. And thon 

3 you might compare that list with the one that was .ittai:hrtd i.o 

4 the back of General Singlaub's letter, by ay recoJ lt:c;t ion . 

5 Without it, I can't t«ll. 

6 See, this talks --it suggests to you Lht:ie uah tin 

7 eai'Iier meeting which apparently there was, apparently the 

8 day bc:fore; and an earlier correspondence. Because you 

9 wouldn't normally begin a letter, Eirst letter, by saying 

10 "reference". 

11 Q Do you recall if this was a request the CIA made 
IZ to locate this type n£ material? 

13 A No. That was -- this is. Chuck, truly a 

11 remarkable buy for anybody. These aircraft were owned by the 
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^V I been 

16 out and visiting thea at their bases and their ships. 

17 _ When they do maintenance they will even put 
181 replacing a screw that holds the leatherette upholstry in the 
19| cockpit — they will put that in the logbook. It's the most 

20 meticulous maintenance, probably, conducted anywhere in the 

21 world. They aie just as you would expect,! 
■everything is very neat and clean and 

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orderly. They are very prcjEessional in their training oC 
their people and they didn't do much in the way of 
operations. These were air-sea rescue helicopters. 

They were then sold as a IJeet with an enormous 
quantity of spare parts to a man in CaliJornia who had theoi 
in a hermetically sealed warehouse in cocoons. 

The aircraft were inspected by GMT, I think 
Barbara, Michael Marks and Mike Tiapani went out there and 
looked at the* before I case on board and it was just a 
remarkable buy. They were going to be very price -- the 
price would go down, as I stated. It did go down. 

As a unit, with the spares, you would want to buy 
the* that way. The spare parts, there aight be, what was it 
seven aircraft? 
U Yes. 

A There sight be five transaissions and there night 
be so aany of these and so many of that. It was the Aray 
original basic load list for a buy of seven helicopters that 
went to^^^^^^^^nd then was turned back over to the next 
buyer afte^^^^^^^^Bwere through with the aircraft. 

So you would want all seven to go at once and it 
would be an adainistrative nightaare to try to sort out thos' 



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spares, let alone break the« equitably. You wouldn't, 
f.oaebody would end up shoit tilters or trans»iasions . And I 
t.hink the owner wanted to sell the* as a unit -ind i.h« 
exception condition that I underlined was true. 




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Oeceaber 23, 19Q6 Croa your»el£^^^^^^^^^^B'eUting to 

land the seven helicoptezs ag*in and now 
TTlG-Zls, which wiU be Exhibit 13. 



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(Exhibit 13 identified.) 
THE WITNESS: Okay. Yes, this ia my aemo wiitten 
to him and that would be the date. And what I did here wa:^ 
incorporate the helicopters, they are still the same .seven. 
The price has now ilropped. There is a little difCerent 
arrangement on repairs and transportation -- all more 
tavorable the! 

I had talked to hia on the phone, by saying: Do 
you recall that itea you asked ■« about? Yes, I can^ 
And, now I'm confiraing that in writing. 
BY MR. KERR: 

Let me stop you,| 

^^^[is that right? 

A Well, wherever they could be obtained. Mr. Glatt 

was the one who had khe^^^^^^Hand as it turned out he had 

thea there because of what he said was an earlier suggestion 

or query. It wasn't an order to buy or anything. 





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And then the developers would go out to the 
suppliers and say does .inybody know -- evun without telling 
you who the client was even if it was transparent.! 




But I believe I brought that one forward because 
we had someone who cane in and tried to sell thea to us^^^^ 
^^^^^^^^^^^^^^H Grahan 

Q Grahaa Lowe? 

A Grahaa Lowe. He would be the one to bi i ng in and 
talk to and tind out all about th.it if that's of interest, 
but I think that was a straightforward good proposal. 

Q You had no contact with Helaut Mertens or Overseas 
Trading Coapany with regard to MIG-21, is that right? 

A No. No. And this aan purported to ba an 
individual who was connected with' 



Q That is Mr. Lowe was? 

A No. Mr. Lowe was the rapporteur for this 
individual. The aan who's naae I can't remeaber - Little 



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1 Hill -- I'd hdve to have ail my files to aee -- wad an 

2 African citizen, a Ethiopian, who caae in and said he had 

3 this information and do we have a buyer? 
1 So I said I wili go and see if there is a buyer. 

5 He went through a long desultory exchange with this 

6 individual, where he wouldn't provide the information that 

7 was wanted. 
You know: Do you have an export license? Do you 

9 have authorization to sell? Can we inspect the aircraft? 

10 And he would never — which is the country? You know, we'd 

11 have to know the source because we wanted -- I wanted to know 

12 who the source was. 

13 Similarly, if I was asked to obtain anything I 

14 always insisted that the p erson level with me, whether -- iC 
lb the buyer was going to b«^^^^^^Hwhether they were going to 
lb be the real end user. There couldn't be any games here, no 

17 reexporting. He have to satisfy ourselves that the person 

18 who is the buyer is the ultimate buyer; unless you tell us 

19 who the ultimate buyer is and then we'll decide. Because we 

20 absolutely didn't want — and I know this Included Barbara — 

21 any arms to move to Iran or to Libya or to some Soviet regint 

22 or some Marxist insurgency. 

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He told ■« that, by coincidence, they were having 
their annual Chridtaas party. Coaaendably he didn't invite 
me to it, and I liked that, that I wasn't invited. Where he 
had all the servicesi and the people, the processionals that 
he dealt within the governaent agencies attending the 
Chris taas parties. But not contractors. That was clear, 
although he didn't say that. 




but because oC all that was happening, now you can see this 
is post-Ollie's Follies and post the downing oC the HasenCuss 
airplane; so it was clear even i£ it was a good thing to do 
nobody was going to do it. 

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I thought the buy was rema tkab Lt* tor reasons thai. 
I testified earlier and T thought that it uas in oui interest 
Lo make sine that this stutE went to us at .1 Low prico ivithei- 
than to, say, Cuba or I'eru; where supposedly there were 

5 buyers. 

6 I was toJd there was a Latin American buyer. r 

7 said tliere can only be three. Oi>e would be Cuba, we don't 

8 want them to go there, the other would be Nicaragua, we 

9 absolutely don't want them to be there because that aight 
LO cause a threshold to be reached and might even cause the Rio 
n treaty to be invoked and I didn't want to see that happen at 
12 this time, and the third possibility was Peru, and Peru was 
IJ desperately broke, absolutely didn't need any more ordnance 

14 from anybody, certainly not any Bore Soviet ordnance. They 

15 needed to go help their people and Man Garcia Perex who I 

16 talked to, the president of Peru, and I were of one accord. 

17 You needed to work your people programs and not buy any more 

18 hardware. In fact, what I wanted to do which I supported him 

19 on was to get a consortium of nations in Latin America to 

20 agree to a certain arms level so you didn't have the Andean 

21 nations competing with each other. 

22 One of the great nonsenses down there has been 



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buying airctalt carriers beciuse one country hail one, then 
the other country t«lt it had to have one, too. The tiuth 
is, nobody needed them. 

MR. KERR: I'Jl show you another document. This 
is document 0000046. It's a list with a receipt date of 

6 December 29, 1986. That will be Exhibit 14. 

7 THE WITNESS: That's the one I already <jave you. 

8 That's the one I dated the 30th. 

9 (Exhibit U identieied.) 

10 BY MR. KERR: 

11 Q This document cones from GMT's files? 

12 A It's the one that I dated for you on my copy the 

13 JOth. That was an original date. I didn't do it 

14 subsequent. With a couple of corrections. 

some for the^^^^^^^^^^H 

^^^^^^^^^^^^^^^^^^^^^^^^^^^B was 

17 th«y had tangled up some nomenclature. 

18 If I can show you something about the list, you 

19 are not, I guess you once were but you are not an active 

20 working military man. That second item doesn't read -- let 

21 me read it for the recordi 




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Q Exhibit 14 l« the list 
you? 

A The Sitae — it's the Sdae as ay list is that I 
gave you oC the date oC the 30th. 




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MR. KERR: Now let me show you a collection of 
documents all dated December 31, 1906. This will be Rxhibin 
IS. 

The first three pages i believe are part of: the 
:iamc nemo but I may be wroncj. The last pa<je appoars to be a 
list of prices. Let me show you the document after it's 
marked and maybe you can tell me if they do in fact go 
together. 

(Exhibit 15 identified.) 
THE WITNESS: I authored the document. 
BY HR. KERR: 
Q Okay. 
A This now, again, diplomatically as I characterize 



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ai.1 these technical problesia that we have -- 

Q is this the list as it was supplied to you? 
A That's the list as supplied to us. Ue are 

responding now, you can see on the 31st of [)(>ceinber. 




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oriyin? 

A This was my effort to Barbara's dislike to get 

competitive prices, Lo <jo to more than one soiircu. H^rbaii 

wanted me to work with Werner Glatt, 




jn't know any other way to do it. 
T'n not cjoing to go to Herner Glatt because he's a 
yood friend of Barbara's unless Werner Glatt is the low 
bidder or theie are other circuastances . 

IE he'll provide the shipping or pay for the 
insurance or offer credit or he can get it delivered faster 
or his equipment is newer or better, then you would be abL<! 
to accept a higher differential. But you want to know all 
these things and you can only know thea by going out 
competitively. Barbara didn't like that. She resisted it, 
really, very strongly. But because it was so logical and 
such an obvious good businesslike thing tu do, she couldn't 
and didn't tell me not to do it, but she was unhappy I was. 

Q Who were you going to go to for the Chinese arms 
quotes? 

A That was, I think I reaeeber the naee now, Richard 

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Hartley, I'm c;olng f.o sugyost, <3nly that: may may be wrong. 
Incidentally, tor the record I re«ember the name 

3 of. the Isi-aeii vice president that I'an the Tel Aviv oCtice, 

1 it was Ron Hairell, H-a-r-r-e-l -1 , I believe, although 1 hcive 

5 nevur seen it written out anywhere. 

6 Q Does Hartley trade under any particular name? 

7 A He was as I explained to you under oath before a 

8 tormer, young, in his 208 or very early 30s, a former Royal 

9 Army officer — 

10 Q Right, 

11 A -- who had gone into business with other 

12 partners, 
He wasn't with Johannesen, J -o-h-a-n-n-e-s- c- 

M and I don't remenber now who he was with. Rut it was a prior 

lb contact with Barbara. 

16 In fact, we went over for the International Air 

17 Show that took place in England. And .she met him in the 

18 hotel on arms business, which she didn't go into with me. 

19 Then there was to be a further meeting in 

20 Washington, which took place. At that time rie presented, 

21 either in London or later, the list that I have already 

22 testified to which we then used to, on a telephone, to give 



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1 quantities. 

2 You know, your list, item number 16, please update 
J your prii:e anU the quantity will be SCO. That kind ol; way od 

4 putting the ideas across. I 

5 Q The prices that are indicated in Exhibit If), these 

6 are the prices, t he origin.il pxices on the list that you gave 
^^^^^^^^^^Ks 

8 K Say that again? 

9 Q The prices on I guess it is the last page o£ the 

10 exhibit -- 

11 A Yes. ^erything, every time I got a price, I gav( 
W. ^^ 

13 Q This is the tirst set of prices you gave him? 

14 A Yes. Because -- notice how quickly we are 

15 responding, too. 

16 Q Is it your recollection that he told you the day 

17 you gave hia this material that your prices were too high? 

18 A No, no. Quite the contrary. He said that's Cine 

19 thanic you, appreciate the quick response. I'll get answers 

20 to your questions and I'll send thea to ay technicians to 

21 look at the prices. 

22 He made no coanent the prices are too high or 



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1 -these look out of line or rtiiyl.hiny else. In tact, he 

2 appeared to be quite impressed with the responsiveness. 

3 Now, compare this list with what we were gottiny 

4 back from him on the 9th; you know, that scrawl . 

5 Q What I want to do is now show you a dociiment '-- 

6 A I would hitve thought what would have happened is 
we would have ijotten this one back annotated. 

MR. KEKR: I want to show you a document which hai 

9 at the bottom "presented OS January '86," and what you are 

10 going to note. General, is there are prices on the 

11 right-hand column whic:h are then apparently modified as to 

12 certain line items on December 31, 1986 with a downward 

13 adjustment. I need you to tell me what that implies. That 

14 will be Exhibit 16. 

15 (Exhibit 16 identified.) 

16 THE WITNESS: What's the date oC this? 

17 BY MR. KERR: 

18 Q The date indicated on the bottom left-hand cornoi 

19 is a presentation of some kind made on, what, the eigl\tth of 

20 January? 

21 K 5th. 
Q 5th of January. I'm sorry. 



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1 A Well,4iii can say is th.it they .ire lowei' 

2 prices. How does this fit in with the document you have that 

3 I turneii ovRr from Mr. Glatt that says, "against my better 
judgment"? It may be -- may integrate with that document but 
it was obviously an eCtort to get better prices than we had 
turned in on tfie 30th. 

^i His document is dated January 11, so it would have 

fl been a succeeding document. (Indicating.) 
9 A r.ee, I don't see that they are better prices. 

10 Q See the three bullets here? What you'll »ee, it 

11 was a price quotation on December 31. That, apparently, you 

12 called someone on that date and got lower prices. The prices 

13 drop? 
H A Or I persuaded Harbara that we should reduce our 

15 prot:it. 

16 Q That's really my question. What's going on? Were 
.7 you in touch with somebody on the 3l3t? 

18 A I don't remember. It may just have been me. 

19 Well, it looks like I was also in touch. I'd suggest it was 

20 a beginning of all three because I've got Chinese 

21 alternatives. I've g<5t a lowering o£ price. And you'd liave 

22 to look and see if that was Mr. Glatt 's willingness to come 



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1 

2 

J 

5 

6 

7 

8 

9 

10 

II 

12 

13 

11 

15 

16 

17 

18 

19 

20 

21 



down. 

You had asked Me a question earlier, you knuw, why 
wouldn't th« agency go directly to Clatt? Well, maybe you 
couJd do better brokering hin down, leveraging fiiis down by 
using a broker. And .xm long as the agency operated that way 
I believe they'd be on the side of the angels. Their 
interest is what's the lowest price we can get there Cor the 
American taxpayers. I£ you use three brokers, it doesn't 
matter if it's the lowest price they can go except, t have 




Snd 1 think these 
are good, reasonable stateaents or criteria that the agency 
should and apparently does follow. 

Q Just so I can follow what is going on here, it 

appears to me there was « aeeting on January eightth, 
regarding pricing. 

A My effort, throughout ay entire ti«e, and this 
negotiation, was to bring the price down tor the agency, 
c 1 ea r 1 y^^^^^^^^^^Be f f or t . 

And there were nuaerous phone calls and meetings. 
I can't track thea all for you, but the goal was to bring 

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1 prices down, not bring them up. 

> Q Just to puxsue the paper flow here, what was 

J previously marked as Schweitzer 1 is the January 8 

^^^^^^^^^^^^ 

5 came Cron^^^^^^^^^^H I you have 

6 two copies o£ it. You wei e qoiny to cjive me one back. 

7 Q I have yet a third copy I'm going to show you. 
A Can I have one back? 

9 Q Sure. Take the botto* one if you want. 

10 MR. KERR: Let me show you what will be Exhibit 

11 17; is that right? 

12 THE WITNESS: They all say the same thing, don't 

13 they? 

14 MR. KERR: This one confirms the date. That's 

15 all. 

16 (Exhibit 17 identified.) 

17 BY MR. KERR: 

18 Q Exhibit 17 has a receipt stamp which appea rs to be 

19 the GMT receipt stamp and has a handwritten note Erom^^^^H 

20 and a handwritten note the the bottom "actual 08 January — 

21 quotations? Quote sheet?" ^^^^^^^ 

22 So you would have taken this f rom^^^^^^Hand 



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would have brcjught it back Lo GMT; is that correct? 

A Right. 

Q And what this reflects is what you previously 
testified to? 

A Exactly. 

Q This is your meeting with »>im on pricing? 

A Wheie he told me we were too high and this 
left-hand column was the price we had to beat. Here were our' 
prices. 

Q Okay. 

A Too high. Here is the ones that we can get them 
tor, soe? And you can see the di H terences . 

Q Okay. Now let me show you -- 

A On some of these I still react with inciodulity . 
On others I knew it was too high and should come down. 

Q Let me show you a memorandum that's marked "notes 
from R.L.S's call," dated January 8, 1987, which will bt: 
Exhibit 18. 

(Exhibit 18 identified.) 
□Y MR. KERR: 

Q I would like you to look at that document and telll 
me if you have seen it before. 



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1 A NO. 

2 Q Do you recollect what this was aboutV 

3 A Yes. This would have been a late ni<jht i:aU in 
1 bad weather and I would havt; called back to GMT and given 

Lhem -- just, you know, no dollars, just numbers. That would 
be Michael Mark's handwriting. 
Q Okay. 

A So this document comes before this one. In other 
9 words, this would have been what was on the phone call and 

10 then, because it was so late at night rather than go all the 

11 way back in I would have brought this paper in. So the order 

12 would be like thi.s. 

13 Q So Exhibit 17 got into the hands of GMT the day 
.4 after Kxhibit 18 was created? 

15 A I would think so. Right, because this would have 

16 been the phone call. 

17 Q All right. 

18 A And then Michael Marks, as I recall, told mt: 

19 because he had to pass it on his way home, went out to see 

20 his mother in this great big mansion she lives in Great Falls 

21 ont the George Washington Parkway and the interchange — not 

22 George Washington -- oft of the Beltway, 197, 1 think it is. 



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Would have ijoiie and <lisou3sea i U with h«r. 
Q ¥ou would hdve discussed it with hex on t fie 9th v 
.Idniidiy, I. he next day? 

A Oh, yes. Sure. Hut I nedn her son would h<iv« 
disiMiSHAd it wil.h her that night. 

0. That iiitjht. AH riyht. You remembei that you 

prepared a www oraiiduw on January 9 on the ■eeting with 
lor do you remeaber that? 
MR. KF.RR: Let ae show you what will be exhibit 
19. 

(Kxhibit 19 identified.) 
THE WITNESS: There aro soae notes on here that; 
also caae froa ae, MG is Herner Cilatt; "client is nut who he 
thinks it is. Glatt was on the phone denouncing these 
prices, it's outrageous. Central Intelligence Agency knows 
better than that." 

I was aayi ngi Tell hia t hat the client is not whi 
he thinks it 




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BY MR. KERR: 

Q Let me follow what, you are telling m«; . c;iatt even 
had been told or was assuming that you were operat.im; on 
covert procurement tor the CIA? 

h Well, what happened was -- you know, he's a very 

sophisticated arms dealer, so he got the list. He priced 
it. And (.hen when the explosion started -- and all that was 
very norma] . He was saying then apparently to Barbara, I 
learned later, this is the Central Intelligence Agency's 
account. This if; the one I have been wanting to get. And 
Barbara was, I think, unfortunately, agreeing with him. And 
probably thinking she was doing it elliptically by u»ing 
double talk. 

If it happened, and I think it did from all the 
pieces of information that came to ne, that would be in 
contravention with any kind of agreement we had or 
commonsense would tell you, dealing with any agency. You 
shouldn't reveal who youi client is. When you are going to 
soae source or broker Cor a source; especially if the souice 
is in the Soviet Union's sphere of influence oi control. 
Poland is both. 

So, that was bad enough. But when the rejection 



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came and w« were told that oiii- prices were too low and hmc'd 
the prices to beat, that's when Werner Glatt began throwing 
t.intiums and denouncing the Central Intelligence Ai;on<:y >ji» 
the phone. The one cir two tiaes I spoke with hin, I stopped 
hiia, even rudely, to get hi* to dtop talking about that. \i\d 
1 - each tiae X spoke to hi« I kept telling hi« you got the 
wrong idua who the client in. 
I know who it is. 




Then there's another "Dune" is either the real 
name or pseudonya tor the London connection. It seems to n 
it was just a pseudonya that we used, not to aake it cloak 
and daggerish, but it's just more convenient to talk that 
way. 

Q An alias naae of some sort? 

k It may have been a real name oC a man, tiio — 

Richard — the guy who was taking over from this Richard 
Hartley person. I'm not sure it wasn't Hartley. 

Then I'm saying here it's not a game of 



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one-upsaannhip. Because Barbara wad raying nhat. 

I was saying no, I believe these aie really the 
Low price:! and we have to beak the*. This is the beginning 
o£ ny argument with her on conpetitive bidding. 

I'm saying I'd be home atter 6: 30, with 
traffic. I didn't qet home until later. 




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always assumed there was — what I'a trying to 
do here is wolli fy Barbara . She wanted to go to Casey with a 
complaint againn^^^^^^^H I was trying to tell her don't do 
that, that's dumb. 

Indeed if she had it would have been the end of 
the whole thing right there. 

These are all fair comments. What I'm hdping to 
find is a memo where I said there has to be competitive 
bidding. He don't want it otherwise. 

Q Take your time. 

A I'm telling you, nothing supports the complaint. 
And, oh, she was convinced that somebody else was going to 
get this deal, this tzansaction on a sweetheart aira ^gement 
and I was saying you could always check thu price that's 
ultimately paid for the 21 line items. It you believe you 



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who owns 



happened. 

Ana I don't know. When you've got a guy 

a county, nine tar.s, I suggested to Barbara i:hat that «ight 

be why we had the high prices. That w« would do b.tter goinc 



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9 

10 

n 

12 

ij 
11 

lb 
16 
17 
18 
19 
20 
21 
22 



in with an ordinary supplier. But if you've <;ot a (;iiy who is 
paying off ^t the top, Wtirner Glatt could be facpd with very 
heavy prices because his own appr<}ac:h is wroni^. Vou know 
he's going in at the top and paying everybody down tht- litiK. 

Whexeas in the Coomunist syste*, it's very 
capitalistic in practice, but because they don't admit it, 
the systea is very ineefiicient, it you went in at the botto* 
and asked the factory manager who has all these quotas and he 
has to produce goods and sell or he's in trouble with the 
central coamittee with his country, you'd probably get a 
better price than it" you started at the top and had to pay 
everybody o££ all the way down. 

I said it could be that Werner Glatt who rips you 
off for hisself, he didn't get those nine Lams for nothing, 
would be going at it in such a poapous way as a nAme dropper 
wanting to get associated and getting the psychic return of 
aU these ofCicials would have a lot nore oCticials to pay 
off and therefore his price would be higher than others'. 




I didn't tell hia yet because I didn't know where 



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we would end up, whether we couJd get Werner lUdtt to <:oin« 
down. But the order ship line would be 120 days. And then C 
Sdy because oC all the earlior bureaucratic days, one ot i.h« 
other supplier!! would probably get the contract even it our 
prices were competitive or lower because you couldn't atfoid 
to waj 




ilt's aissiny is a aeno where I talked to her 
about coapetitive bidding. But I can absolutely attest to 
you under oath that he Itad repeated conversations with her ir 
which I defended, not only the propriety but the 
desirability. In fact I told her you and he, Barbara, as 
taxpayers, want the* to have competitive bidding. 

Q Just to follow th« sequence, we have already 
looked at a cable on January 9, 1987, by way o£ that machine 
which you describe where Ns . Studley tells Werner Glatt that 
she wants hia to cone back with better prices -- 

A That's the one I just gave you. I think that's 



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the one you have to Cit in, but apparently it i:ame atter. 
Q It would have come after your meeting with 

A See, this is a new one, isn't it? 

Q It has an exhibit number on it? 

A Yes. It would come after. I think you can 
believe the date chronology on these and !'■ sure there were 
more interchanges by phone and by cryptic Message. 

Q Again based on what we had yesterday. Exhibit S 
appears to be Glatt's responxe to Exhibit 8. 

A Right. That's the one T gave you. 

Q Okay. Then we have a series cif documents dated — 
apparently sent on January M. 

A What Glatt told me was, in one conversation I had 
with him, that the suppliers told him that it those prlci:s 
were true, they would like to have the identity of the 
supplier because they were cheaper than they could produce 
them at and they would like to buy from them. 

Q Now let me show you what appears to be a 
subsequent response. On January 14, 1987, you appare ntly 

the latter to show you^^^^^^^^^^^Hand 

included a aeries of quotations with a January 13, 1987 date. 



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A Okay. 

MK. KERR: This will be Exhibit 20. 

(Exhibit ?.0 identiCied.) 
THE WITNEr.S: 




BY MR. KERR: 
(] This is d letter you sent to says ^^^^^^■■ailed 
it or hand-dAlivered it.'" 

A Hctnd-delivered. I never Mailed hi* anything. 
Ridiculous to not — that's Hitrner Glatt. But others said 
the saae thing. 

Then, you know, I'm discussing soae technical 
things. 

Then, again I still recall, this is now the 14th 
o£ January and I'a still unable to get cldriClcation to the 
garbles in this particular list so, there again, I'm asking 
hia Cor claritications . And It Is slowing up the process ut 
obtaining lower quotes. 

Then -- yes, this is fine. Here is ay cirrled 
list. 

Q What you are circling is iteas where you were 



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1 beating the price that you quoted? 

2 A Right. And were beating the price - all the 

3 circles, certainly all that say "China" would be -- these 

4 would be Fred Fox. 

5 The -- Poland new, was the PKM submachine gun. 

6 That would probably be Giatt. So that's exactly the way t 

7 gave him the list and I was showing him where we are beating 
H the price. 

9 Q Okay. Let tne now show you what will be marked as 

10 Exhibit ;! 1 . 

11 (Exhibit 21 identified.) 

12 Blf MR. KERR: 

13 Q Exhibit 21 is a document which appears to be dattid 
11 at or about January id, 19B7, which includes a list oC 

15 Chinese quotations. 

16 A Okay. Now you are starting to get the spread 
1/ sheet. 

18 Q So you were now going to a second or third sourcte 

19 to try to get quotes? 

20 A Right. One would be Werner Glatt. One would be 

21 Fied Fox. And one would be Dune. And "Dune", I think now, 

22 is a real name as I go back through it. In fact, C will tell 




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1 you it was. 

2 What I was doiny was discarding other people that 
J t had gone out to who Cdwe in higher or couldn't s-upply ur 

4 appeared to bt; confused as to whether they had valid, 

5 accurate pricing data. 

6 Q How did you get access to rjunc c? How did ycm 
eind out about him? 

8 A It was Barbara Studley. 

9 1 Q Studley again. 

10 A Richard, the young Man, cane in and I think Dune c. 

11 was the one who took over the account. 

12 MR. KRRR: Now let me show you a January 2] 

13 quotaticjn, which will be Exhibit 22. 

14 (Exhibit 22 identified.) 
lb □¥ MR. KERR: 
16 Q Here you supplying these quotations to| 

"17 they caae in? For example, did you supply — 

18 A If there were minor changes, I wouldn't go in. 

19 I'd wait until I could consolidate a list. I wasn't going to 

20 him with real time. My objective, as I have testified — and 

21 it was -- actually my operating principle throughout, was to 
22 



bring the price down. So all of these are going 

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5 
6 
7 
B 
9 

10 

II 

12 

13 

14 

15 

16 

17 

18 

19 

20 

2] 



downward tieml. 

Q Rut in terms of what^^^^^^^^^recei vod, yc. 
or do not recall that he <j<)t these 16 January quota t ions V 
This quotation, which is Exhibit 21V 

A Oh, he would have gotten -- well, he would have 
gotten it somewhere on one oC the spread sheets. 
Q Ml right. 

A I didn't withhold anything froa him that showed a 
lower price. 

_ If the price went up, I would not go in with a 
higher price, it we had a lower bidder and the price -- I 
don't think any price actually did go up. 

Me had people who came in with higher prices, dnd 
of course, I didn't bring those to him because I'd be wasting 
his time. He had already told me what we had to beat. 
Q Exhibit 22, do you recognize that list? 
K Yes. 

Q Okay. 

A That probably went to him. 
Q All right. 
A It says so. 
Q Right. Now, with regard to — what 

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1 
2 
3 
4 

SI 
6 
7 
8 
9 

10 

11 

1/ 

13 

M 

15 

16 

17 

If 

19 

20 

21 

22 



telling you when you were (jiviiig hi« these suci:e3siveiy lower 
prices? Keep at it? Or don't bother Be? Or what? 

A you know, because I was looking for signs, because 
we weren't getting anywhere to where I can go back and report 
this deal isn't going to go anywhere, let's drop it. 




MR. KERRt All right. Now let ae show you • 
version oC the quotation ot January 29, 1987, which will be 
Exhibit 23. 

(Exhibit 23 identified.) 
Bt MR. KERR: 
Q Do you recognize Exhibit 23? 

A Yea. Thi« la the list that I waa h oping you'd 
Thia ia where tc^^^^^^^^Hto show 

our spread aheet. You know, to ahow hia we were going to 
different sources, and to identify for hia, in a geneiic way, 
who the different sgurcua were. 

I told hia orally who they were. A, X said is 
obvioualy Glatt; R, I gave a different one. 



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1 Q You'vrt (jot t-.wo Chinnse souroes lifted there. Who 

7 ars they? 

3 A One is Dune c and the other is Fred Fox. 

4 Q I'll ask you about f:hat. Maybe !'• just not 
tolJ owing what is happening. It looks to ae like you've yot 
Mr. Fox's quotations on the far light side by the carei.s? 

A I can't tell you right now. I'd have to study 
these at great length, but I'm going to give you sosAthing 
that's going to sort all that out Cor — 

10 Q Ml right. Fine. As to the European source; do 

11 you know who that was, 0? 

12 A I can't remember right now. 1 just don't recall. 

13 Probably, like everything else, it will cone back to me 

14 later. It was ay eftort to get coMpetitive bidding. 

15 Hhat will help you sort this out is here is a GMT 

16 document that was not given tc^^^^^^^^Hand shouldn't 

17 have been becaune it shows the prices, the diCEerent source 

18 and our aarkups as proposed. 

19 For ne it was still a negotiating tool and you'll 

20 see one or two where the prices are high. Had wc gone in, wt 

21 would have lowered those or done something about them. 

22 But it. was an effort by ae to get together, 

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because this was startim; to i;et conlius iixj -- difterent 
suppliers, different quotes. 

So r listed — we established a list ot all the 
suppliers and all their piices, includiny when GJatt backed 
down and this would, therefore, be an internal GMT document 
which shouldn't really see the light of day. 

If you are satisfied she's done no wronij, this 
would be the one document to pull out of there. 

I would like to cjut a copy of that. 
Q Sure. I'll have a copy made for you. 

MR. KERR: Let's have this marked as Exhibit Zl. 

THE WITNESS: And the list: G.latt, Fox, Fox -- 
because Fox ijave us different quotes -- and maybe RMW is this 
Hartley outfits - RWW. Maybe the — no, it's Europe. I 
think maybe they had access to Europe. I just have 
forgotten . 

HR. KERR: Let's mark it. 

(Exhibit 24 identified.) 

BY MR. KERR: 
Q With regard to Exhibit ?A , Exhibit 21 is the 
internal working document of GMT that you used to keep track 
oC what actually was -- 



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1 A I credi.ed it with Michael Mai-ka to show what all 

2 these difterent prices were and what our profit was. 

3 That represents a decrease t:rom where we were 

4 earlier. 

5 Q Just so I can £oJ low who these people are, WG is 

6 Werner Clatt": 

7 A Right, 
a Q Dune c is the supplier? 

9 A The flritish supplier who was not the young man, 

10 but took over Lrom the young man in the same company. 

11 Q Fox? 

12 A Fred Fox, who I've testitied to you about. 

13 Q From Indiana? 

14 A Right. ECP, associated with the woman who is the 

15 Dallas Trade Center. 

16 Q And RHH is a person whostt name you can't 

17 recollect? 

18 A Can't recall right now, but another source that w« 

19 generated. 

20 Q And you had gotten RWWs identity, again, from 

21 Studley? 

22 A I'm sure. Because it is not anybody I knew. I 



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1 had never dealt in this aiea beforft. 

2 Q Okay. Thank you. 

3 Now let me show you what is >lescribed as t\\e 
1 "categorically reorganized list." 

5 A That's the one I disavow. Dncaiise you see what 

6 that has done is made the best efforts go away, which wen- 

7 mine, to — these two dooiments in particular. 

8 Exhibit 23 and exhibit 24, it you present them to 

9 ^^^^^^^^^^Hthey are going to lead you the bottom — the 
10 low bidder. 

U Q Right. 

12 A When you go to that document which 1 have not 

13 seen, it uses some of my footnotes and some of ray data, but 

14 it manipulates that data to put only Werner Glatt forward anc 

15 it puts stateaents forward, some of whi<:h are true and some 

16 of which are either untrue or which I would not advance 

17 concerning Mr. Glatt. It certainly doesn't put the negatives 

18 about Mr. Glatt forward, which should go forward. 

19 So to me it's a dishonest dooiment, a selling 

20 document to go buy this Edsel, don't look at any other car. 

21 Q Bear with me, the March 4 document that we had 

22 shown to you at your previous deposition had been supplied bv 

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6 
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10 

II 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 



the CIA. That waa Exhibit 7. 

I'm showincj you an identical docum«:nt which was 
supplied t-.o us by GMT. Ml I need tor you is to tell me if: 
they appear to be the same document. 

A They appear to be the same document and I have no 
connection with either one, although some of the basic data, 
which is then manipulated here, was mine. The manipulation 
was not mine. 

Q Okay. And the text? 

A See, some of the text comes from my ideas or my 
statements in the past, but the tuxt — I didn't write the 
text, so it 's a mixture o f some oC my earlier memos, the new 
on ^^^^^^^^^^^^^^^^^^^^^H and a poem 

about Werner Glatt that I had nothing to do with. 

See, they bring you some other sources here. They 
do throw that in. I didn't see that the first time. 1 
Q Yes. There is an alternative? 
A H, C, and D, but they are suppressed. 
Q All right. It's restructured in such a way that A. 
is prominent and B, C, and D is less prominent? 

A Hight. And I wouldn't have done it this way. 
MR. KERR: Let me show you one other document. 



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(}0in(j to Dr. Ciine and it's basiodily an attempt to -- it you 
have any further recollection as to the role he played after 
you left with regard 




it will be Exhibit 25. 
(Exhibit 25 identified.) 
BY MR. KERR: 
C! My first question to you is have you ever seen 
that document before? 

A No. Soae comaents on it. 
Q Okay. 

A 




I've given the 92.7 ail lion, in fact I gave him a 
lower figure than 92.7. I gave hia 92.4, orally. 

There was no buyer's query on this, in that sense 
of the word. So this repeats the saae data, but thn price 



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now is hi(;her 1:han I had yiven him bet'ore Chria tmas . He weie 
clown around $2.4 million, .is T recall. $2.4 million. 

The price, incidentally, is good ah any one of 
these figures. Hut I had gotten the buyer to give up -- the 
owner to give up some ot their price and we were going to 
give up some of: ours. Now we are back up to $2.7. 

Q Tt does not give you any further recollection or 
knowledge that you would have had o£ rjr. Cline's role in 
trying to sell these items.'' 

A Let me say something to you on the record under 
oath that I have given to you on the telephone. 

I talked to Dr. Cline before he left for his 
overseas trip to South Africa, I believe two days ago. And I 
told you that I had cautioned him, I said without in any way 
trying to interfere with Barbara's practice of her business, 
but just you be very careful about dealing with your alma 
mater, so that you are not led down a primrose path. 

Dr. Cline said; Thank you. But I have had very 
little to do. He said, I've done nothing. The only thing 
I've done is relayed, using a different channel than you were 
using, at a higher level, as information. I have 
communicated her desires -- relayed - communicated her 



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1 dedlrea to the 4i;ency. And I have unilertakci) no otlier 

2 negotiations or approaches to them. 

J Q Did Or. Clino ever I. ell you that he .ippio.iched 

4 Acting Director Gates on this raatttir? 

5 ^ No. He told me when I -- as I testitiod Lo you 
6 1 late at night, the last time we were here — that, when t 

t-epoi-ted to Dr. whal^^^^^^^^Hhad said, that he 

8 would not deal with Dr. Cline, he would not even talk to him 

9 other than to say hello on the phone and he had to amend his 
10 remarks to allow for that, Ur. Cline said: Hell, I wouldn't 
U go to him anyway. I'd go in higher up. I'd go to Gates. 

12 But it was subjunctive: "I would." He didn't sa^ 

13 he had or he was goii\g to. It wa:i conditional. IE I was 
H going to, I would go to Gates. 

15 So he never told me who he went to or whether he 

16 relayed any paper. The term I communicated, quoting 

17 Dr. Cline, "her desires" — as information. Not as a 

18 lobbying effort. 

19 Q Dr. Cline has or has not revealed what his 
201 remuneration would be trom GMT i£ this sale were made: 
211 A No. 
22 1 Q tie has not revealed that? 



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1 A No. 

2 MR. KKRR: Let Of show you d meinordiidum (Jcite(J 

3 December 17, l'*B6, or reCerrim; l.o a inemoranJuiii - si.rike 

4 that. 

5 A memoranduB that refers to a raeetifig of Decembei 
19Q6^^^^^H^^^^^^^Hwhich I yoti to 

review and tell ne it you have you have ever seen it. 

THE WITNESS: Wait, go back. I believe he told 

9 me, but this is a tenuous recollection, that Barbara had 

10 o£eered to split the proEits 50:50 with him and that Barbara 

11 told hia that he would be the tront for her because she 

12 aensed that with the publicity she was receivinij through the 

13 Washington Post and my leaving, that they would not want to 
M deal with her. So, therefore, she went to Dr. Cline and 

15 asked Dr. Cline to set himself up as a front. That was 

16 Dr. Cline's words, quoting Barbara, to him. 

17 I said: Ray, you don't want to get involved in 

18 anything like that. You would have to notify the agency who 

19 you were really representing. You couldn't, you know, 

20 pretend to be Or. Hay Cline doing this with no connection to 

21 GMT which in reality GMT and Werner Glatt were the ultimate. 

22 I don't know if the agency would make you say that, they 



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1 always told mo Lhey didn'L care what hhe sources were, but l 

2 always told them so they couJd come in with their tank 

3 commander's override so, to speak, and say we ilon't want Lo 
deal with that mai) because he's too sloppy or he; ' s burned us 

5 before or he ' j too close to the KGB or whatever, doesn't 

6 have to give me the reason. 
I told that to Ray and he readily agreed to that. 

8 At that point my recoJ lection is that he told me that Barbara 

9 said that the protita would be split 50:50. I thought that 

10 was a far cry from where we had started out. 

11 I remember, the reason I'm so sure ot this Cor the 

12 record, is that I reflected, you know, here I've spent all 

13 this time arguing witli this woman about bringing prices down 

14 and she really got very angry with me. Now she's giving away 

15 50 percent of her profit which, if we had done that as I 

16 wanted to do, I wanted to come in with a 3 percent or 2 
1/ percent profit on a $40 million deal that would be, I 

18 thought, sufficient. And I was just blown out of her office 

19 in anger when I proposed any such notions. 

20 Now I brought, through negotiating, her profit 

21 down as you'll see on that spread sheet to 5 or 10 percent, 

22 2-1/2 on some; and now she's going to give half of that away 



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1 to Dr. Cline. I rnt^iectftii t<3 myself wheie we would have bueu 

2 if, on the 31st of Dticembrr, wo had gone in with a.sking SO 

3 percent less of a much lower set of prices? 

1 Til other words, if you could have gotten to wh«?re 

■5 she was :>omewhere early in M.irch cjr the end of February, she 

6 might have had a contract from them or the promise of one or 

7 the real hope of getting one. 

8 HY MR. KERR: 

9 Q Okay. I appreciate that. This is Exhibit 26. 

10 A I have, because oU that, the irony, all the pain t 

11 had been through with her and now she's giving away 50 

12 percent ot her profit, that's what gives me the clear 

13 recollection that Dr. Cline had said it was a 50:50 
11 arrangement. 

15 I was surprised to hear that because to the best 

16 of my knowledge he has never done that before. His wotk has 

17 been scholarly, consulting in the surest sense of the word. 

18 And not been in the -- in this business. 

19 (Exhibit 26 identified.) 

20 THE WITNESS: Certainly from my experience, ray 

21 advice to him would be get out of it beCoxe you get into it. 

22 (Discussion off the record.) 



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1 THE WITNESS: 'ii'.s , l.his is my memo. 

2 MH. KERH: While he's doing that I would like you 

3 to maik the March 1, 1987 list which the fienerai obtained 
from GMT rts Exhibit 27, just to keep a record o£ it, 

5 (Exhibit 2/ ideii tiCiod. ) 

6 THE WITNESS: This is my mt^mo and with this taemo I 
yo back and cotTrtct something I said perhaps unintentionally, 

6 unkindly, about the seven helicopters, 

9 This is Exhibit 26. I'll go through it in order. 

10 It reports a 17 December meeting so it should go 

11 back, I think, in a different ordur in your ohron file. 

12 BY MH. KEKR: 

13 Q It clearly precedes much of what 
H talking about, 

15 A Right. And it's very helpful. One thing, whore I 

16 refer to Graham's eight items, this is something I would use 

17 on telephone bi^cause they came trom him. That's the MIGs, 
Q Graham is who? 

19 A Graham Lowe, so Giaham's eight items would be the 

20 eight Mia-21s which went away. 

21 Werner Glatt, incidentally, continued to say he 
iZ could provide MIGs. Not as many spare parts and l.ho pric:e 



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1 wda hiijhef. Sio that's -• and th«n Wei-nei's two to tiiyht 

Lhe^^^^^^^^^^^^l another 

J shorthand to ush on the telephone. Okay? So if r were 

s p e a k i n (j^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^B I ' d 

51 back and say with leterence to Werner's two to eiyht items 

6 theip's some interest -- leal interest, real desiie. And I'm 

'/ proposing that, because this is the one that Werner Glatt was 

B having -- thiciwiiig a tantrum over, that we should pin him 

9 down to get a price so we could say, well, everybody 

10 understood that if you bought all eight, each unit price 

11 would be cheaper it you could give us a price, you know, two 
1? Cor so much; tive for so much, and eight f:or so much. 

13 Then the Burbank seven items are the seven 

14 helicopters and they were in Burbank, California, 
lb Q Okay. 

16 A Now here I'm saying "great desire," underlined. 

17 Real thirst; money is the sole problem. 

18 So, where I unkindly said, and unintentionally, 

19 that Barbara was stretching the language to say client had 

20 expressed a real interest, clearly he did or ( wouldn't have 

21 written this. 

22 Q And "he" would have beer 



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A W.jald h.ive be 

You know, he (iidfi't t^ver -- he never said t fid t 
i I. hey wete tor Lhe iToii t. tas , be<:au3e i.o qc.K d p.ii:kdye o(. suv 

1 helicopters with si>atc parts, you could use tliein a nywheie . 
5 IC. you had the mousy. Chuck, LL would be very 'jo 

leave them cocooned out in 
Burbaiik and then use them at any time ovei- the next two to 10 
8' years. 
9i Q Okay. 

10 i A You could use them — once the government -- 

how wotks. ^^^^^^^^^^^^^^^^^^^^^ftand 
17: suddenly need them tin (amine relief in Ethiopia^^^^^^^^^^ 
13 can provide l.hem Eof that, too. [ just wanted to see them go 
11 into the yoveinraent inventory. 

Q Let me <jo throuijh some items here I don't 
16; understand. Yov^ould have had this meeting wit 
you and^^^^^^^lcorrect? 

18 A Always. No matter how many times you ask me that 

19 question we can't get anybody else in that room. 

20 Q Cot to make; sure, though, on each of these 

21 meetings. 

22 This meeting would have been set up by you 




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6 

7 

sl 

'I 

loj 
u! 

U' 
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ii; 

Ibi 

16i 

I 

w! 
I 

18 
19 
20 
21 
22 




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con tact ing^^^^^^^^^^^^^^^H''^'^''^'^'-^''"'^ y^u? How would 
have gotten arranged; do ytiu know? 

A 11: varied. Most ot the times were it my 
initiative, carefulJy tryiiui to sense thp waters ro [ w<ii;nr 
botheiing a busy man who was plagued with invf'.T r ii;,i t i ons . 
Although I was yet to go through that, I had an anticipatory 
sensitivity toi it, which was not misplaced. 

Sometimes he would call me and ask me to come 
down . 

Q Do you remember on the 17th of FJecember which it 
was .•■ 

A Let me look at the memo. I think that's when he 

asked me to come in because they were supposed to have had i 
meeting ot the board. 

Q Okay. 

A But it may -- I wouldn't want 
has, perhaps, a good chron tile or his secietaiy does, ot 
when I caae oi how I came, I would accept whatever he said. 
Most of the time it was at ray initiativn that I went down 
there. 

Q Item 1 says, "no action, physical condition of ont 
individual and paiaiysis ot system are causes." 



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A That waa Casoy'is ilinftss and the paralysis ot the 
system is because o£ all the newspaper stories. I testi(:ied 
umler oath, both to Mr. Albright ami to you, eaiiier, that 
the government was not doing, even, things it should be doing 
while all these bombshells weie going oft. 

Q Okay. The; "no action" is no action as to what? 

A On tho list. 

Q On the list to be produced to you to price; is 
that right? 

A No. It had already been produced to us and we 
priced it and we had come back in. There was no action. 

Rtiraember, this is be£ore we were told youx prices 
are too high. 

C! I thought you got your list after that, but I'll 
go bat:k. 

A You are right. Let me straighten that out. You 
are correct. 

What this is — X had gone to him in October and 
then gone back or ho had come to me to tell me nothing was 
happening. So, this is kind of a "John the Baptist 
precursor." It seta the list when you get it, to prict;, will 
certainly include. And then he had these items bocause r was 



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asking for -i noUionai list. T said it would help us -- 
because [ was i nt ctps ted sincerely in getting the lowest 
pricti - I said if you could tell me tliat you wanted ^K 
litles, the ftimiJy of AKs, I could go out and start -- [ 
could pick '1 notional number, like 1000. Because you would 
know you wouldn't buy lUO of those, or 10,000 or SOOO, I'll 
make up a number and start getting some prices so we have a 
basis and car. stimulate the sources into being competitive so 
9 we <;et a lower price. 
10 He said 1 can't tell you until the board of 

directors meets. It's something like an ordnance bcaard, the 

12 military ordnance -- although he said they didn't call it 

13 that, that meets, that determines what the requirements are 

14 from the operators or requesters, whoever they are in the 

15 agency. And then works it all together to see it. it makos 

16 sense that people should have these. 

17 For example, you could have an operator or intell 

18 guy out there saying let's get a bunch of these and maybe you 

19 don't need thea or they are obsolescent. 

20 On the other hand, you might have the same person 

21 asking tor very modern equipment, and you wouldn't want to 

22 give it to him person because it would either put a signature 



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1 oC the U.S. on it tliat you wouldn't: want cjr l;he people hddii ' L 

2 been trained on that. 

3 You'd want thtrtn to stay with the more archfiir, 
obscjiesceii t tainiiy ot weapons because their training and the 
support sy.«;tt:in. 

6 What you don't want to do is; briny in a mix of 

7 weapons, difterent families, ditforent c:ountries, different 
generations. Because then that complicates your training and 
your supply and your maintenance problem. So it's better to 

10 work with Mauser rifles. 

11 Q Let's come back t(3 the notion of "no action.' 

12 Would it be correct that what he was telling you 

13 there had been 

14 A No movement. 

15 Q -- no movement to create the shopping list? 

16 A That's what it was, 
Q Because of Casey's incapacity? 

18 A Right. 

19 Q And because ot the publicity 

20 A Inner paralysis of the system. 

21 Q And that wad because of the publicity ovei the 
22 



Iran-contra matter? 



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\ Eveiy thing had a topped 41\<J nobody w-inteil t» <"- 

think about roininq up with a list. 

Q Okay. Then you say he said, in paraijrapli two, 
there was goitiy to be the meeting of the board of dirrct:: 
ind that'o what you jua't described? 




Q And it says that that meeting will result in 

approval oC a list and that "we", meaning GMT, I a<!Sumo, havt- 
a promise that "we", meaning GMT, will be given a list i.u 
obtain prices about 1:00 p.a. on December 23rd? 

h Right. Now you can see the competitive nature or: 




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Q Quantities, he told you, were unknown at Lli.iU 
point . 

A Correct. And I was askitig Cor notional items ana 
rioti<jnal quantities just so I could start the pricing. 




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Q £,ct's; qc) to the next ite«. "Money is goiny ,tc> 'be 

d problem. This comes .is a surprise to our oiienLs." What 
was he ttOlinq you? 

A He said that money was a problem; that always in 
■the past it had nat been a problem. You know, once the item 
h>td been approved there was adequctte money to do it. And 
i;hey had not expected that money was (joing to be a problem 
but money was. 

In other words, I take it, they were aCfected by 
Gramm-Rudman and by the budgetary constraints. And I think 
that's good. He didn't think it was bad either, from a value 
judgment standpoint. It's just it came as -i surprise i.o i.heiu 
that money was going to be a problem this year. 

Q And it would be a problem Eor the CIA, is what you 
are telling me? 

A Right. In other words, they would have to be -- 



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and I wad very tjlad i:o get (-.l-nL inrorrn.i ^.ilJll bei^aasK it-. lacanL 
we woiiJd have lo be very competitive on the prices. It wcjuL-i 
mean you'd have to make very judicious buys and you would 
want to make sure you got the most tor the dollar; rfiar you 
didn't buy junk. 

Barbara's thesis, and we should get it on the 
record, was that the other suppliers S(jld old, rusty junk. 
That is not what -•- and I believe that because she had a 
great deal or knowledge. She knew all these people, meeting 
talking with them, traveling around to the different 
countries, looking at warehouses that I had never seen. 

So, when she told me this I believed her .ind I 
believe that she said we can come in -- we'll do it at, and 
.«!he would give certain quotes. And nobody -- she'd bang her- 
fingernail on the table. Nobody can supply those weapons for 




Q you say that money is a major problem. You 
underline "major". And then you say "my guess," combination 
of scarce funds coupled with deliberate desire by senior 
officials to interdict virtually all initiatives until lociL 






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dust settles? 

A Right. 

J J 0. What does that me-in? 

4'! A The scarce Cunds, from Gt amm-Rudintin and funding 

1 

5 I stream uliich was arteci.inc; aiL gcavernmcnt agenci.is and I 

6 beJ ieve then .ind nciu that the senior officials in the White 

7' (louse, in the interagency arena that would be responsible lioi, 

8i giving the green ligfit, and certainly the Congress, the 

9' overudtch and oversight i:omini tteea , were just not wanting to ' 

lOi unJeash any more initiatives when they had an absolute 

I 

111 confusion of facts and data and who Jhot John and who did 

12; what to whom over the Iran, and then as we learned the Ciontra 

13' business. 

14^ Go I think it was reasonable that the high 

i 

151 officials would do that. I certainly would, if I were in hei 

16 1 position. 

17 1 I would say well, wait, don't start anything else 

la until we find out what we've got hi;ro. That's not always the 

19 best thing from a foreign policy or national security policy. 

20 but certainly what I would do if I were a senior official, 

21 I again, and I assume that it is what they were doing. And X 
221 had been told that, too: I think inaybt^^^^HJ^^Haod I 




822 



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a mutual aijreein<»nt f.h.iL that was iL, on sp#>cii Li i. ion . Oi- 
maybe he told me. 

nut I was hearing that from others rfrul I knew htiu 
the government works. 
Q Now -- 

A The first thing, if you don't know what's goiny 
on, is don't do any moio ot: it or don't do any analog 
programs in other areas until you sort out the mess you've 
got in the one that you know went wrong or think went wrong. 

Q That passage goes on to say, "however, we are 
still promised tlie 44 million to ^17 million package which 
stands apart from other inertia." What did you mean by tfiatJ 

A Well, you can see I've mixed the metaphor 
beautifully there. I don't know how inertia stands a£iart or 
how something stands apart fro* inertia, but it you'll 
forgive ■« that rhetorical blunder — what we are saying 
there is that we are still promised a list to price^^^^^^H 

^^ We are not promised a single source 
procureaent 

Q You had not been proaised b^^^^^^^I that th« 
>ntract would go to you.' 

A No, no. Of course not. what he promised us is 



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1 he'd sjive us a list i;u piic:e. 

2 Remember I'm wiiting in shorthand. Yoxi are having 

3 Urouble reading it because it is s<] telegi aphic . 

4 Q I just don't want anybody to misunderstand what is 

5 (joincj <jn. 

6 A This isn't even a memo tor Barbara. This is just 

7 a memo tor the Eile, more ot a memo Cor me than anything 

8 else. 

9 Then I'm saying, what I'm telling myself and the 

10 entity, corporate entity ot GMT, is that we aie going to get 

11 the package to price and that that will happen, apart from 

12 all the paralysis. Once -- even it there is no action on the 

13 list to approve the list, we'll get a list to price. That's 

14 what that is saying in shorthand. 

15 You may never get it approved, but you'll get it 

16 to price. 

1/ Q There are a couple ot others. The Graham matter 

18 you have described? 

19 A The MIG-21S. 

20 Q I — 

21 A Burbank seven I described. 

22 Q Yes. You say "some skepticism shared by us on 



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whether we lidv« the bottom price." 
A Right. ^^^^^ 

Q WhAt did^^^^^Htel I you on that scoie? That you 
looked high? Or how much I -it was there? HhaL was li« raikiin; 
about? 

A No, no, I think he just wondered. We were told i.i 
glowing detail by Graham that this was the absolute rock 
bottom price. I questioned this. 

you know, any time somebody starts out by telling 
you this is the bottom pi ice and the one thing that isn't 
negotiable is this price, that's the first price they give 
you, it has got to be negotiable. So X explained all thm tc 




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couldn't manage the aiii:ralt, they weie i(j soph is t Lea ttid . 
just kind of sat on tfic rvinway. C): it had been that countr; 
they would have been in very good i-ondi i. ion . 
1: Then it was very t; igni £ icant to mc; bec-ai 

5' told: It they aro cjoincj to a country in Latin Amerii 
6; they've got a good prospect in Latin America. I told yc 

beCore there crouid only be i.hr-ee, Cuba, Nicaragua or Peru, 
not in our interest to suv. them go to any one of the three, 
91 '.5o I questioned whether 

10 i country that was unloading MIGs on the .so-called bottom pries 
11' couldn't go lower it you otCered cash. flecause I knew it 
.2\ they sold them anywhere in Latin America it would be yome 

111 kind ot: barter, Cinancing, credit .arrangement that would be 
14 : very tenuous . 

15 1 If you would pay cash, which this client would, 

16! you know, through a letter of credit, it would be instant 
17| if you could come in and say: Never mind the price. We 

18 willing to give you what you are asking, whatever you ha\ 

19 Bind, how you are going to be paid, sugar cane or cigars or 
P.O turn or textiles — we will give you so much in hard curren<:y, 

21 I think you would have had a de^al right away. 

22 Q Werner's two to eight items are the two to eight 

UljCLA^SIFlEi) 

Ace-Federal Reporters, inc. 

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A Hight. 

Q The Burbank seven aie Ihe fielicopt er s' 

A Ricjht. 

Q And ^3 I understand your notes, yt 




Q My problem is -- 

A I don't want to go on record before the <.:ciminitt«! 
as sayinij Bob Scliweitzer thinks 3<3inething over '9^.5 jnillion 
is cheap but relativtjly speaking, for aircraCt, those would 
go in the Amy today, brand new Cor a million a copy. 

Q You say "money is sole problem. Competing needs 
are Eo<3d and Cootwear." 

What is being talked about here? The CIA doesn' 
need food and footwear? 

A No. No. That would be the unnamed client rind : 
w<5uld have deduced then it was the Contras because, lemembi 



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I uad trying to advance i.hese niv i.ho Contr^s. C think 

id I, without ever mtrntioning it, would tidve 
shared tacitly a view, that tn<» Contris didn't netrd nioie guns 
or even more bujlets. What they ncedt-d was footwear ana t cicu 
and people programs tor their own tamilies and iraining. I 
would add communications and certaifily a mobility 
di Ef erential . 

Q Essentially, he told you that your price range of. 
5) million plus or minus looked reasonable to hin; correct? 

A Oh, yes. See at that time I was giving, quoting 
him a price, I think, ot -- this an earliur document <is you 
noted -- I think we were right aiound 3.1 or .1.2, and I told 
him it would go down and then we took it down to 2.9, 2. 7, 
and I took it oially, with Barbara's permission to 2.5 or 
2.4; I forget which. I hate to put something on the record 
which would then make her wince -- 




also the !5b5,000 would get 
transportation of the spares. First of all, I didn't want to 
tell Irim where it was, in Burbank, California, but it would 
have been zero for a California delivery or nearly •/.(•lo and 






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I' 5b to Miami. That was what we tigurod it on. 

?■ : That's qviite a bit. IC you aie in any kind of 

transportation, even it it's Sateway supplies, an awful loi 

ot your ( ood price is in moving 




Q How were you planning to transport it Cor 
Sp?>f),000? Ship or air? What did you have in mind? 

A Probably by ship. You had the watei- right thucH, 
but it could havt- gone by -- broken down by big commercial 
vans . 

Q Did you have a speci Tic mode of. deliveiy in mind 
Eor the $55,000 Eiguie? 

A No, because the buyer was going to do that Eor 
us. 

Let's see, as T think about it that would put it 
through the Panama canal. I would doubt you couLd do that 

{> The buyer or seller? 



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A ;;elier. The s-eLim- would move it i.o Miami - 

probably by truck, Vrtn. 

Q I 'm with ytju. 

A It is diddZirig how choapiy you can mnvc stuCf 
^cc'iss the country. 

Q Anythiiiy eJse you recollect about that meeting 

witl>^^^" 

A No. Except t think that it bears out his efforts 
and mine to ijo 1<jw and what some ot the constraints were. 

The one document I wish were here were some 
■jraphic representation ot my insistence on the propriety oC 
competitive bidding and the fact that if we didn't win out on 
competitive bidding, we didn't deserve to win. 

Q But you, in any event, communicated that to Ms. -- 

A Yes. Many times. 

Q She felt she ought to get the benefit of the sole 
source contract? 

A Yes, because she Wcis BArbara Studley and had all 
these oontai:t3 and had done this and she kept biinging up the 
§100,000 shipment. I told her, in the United States 
Government, there aren't any rewards tor past favors. It's 
what have you done lor us lately and what she had to do tor 



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us lately is same thiny any airborne company does. Each 
morning they have start out, each maneuver, each exercise, 

3 everything starts trom scratch. You can't rest on any 

4 laureli 

5 Besides 1 pointed out to her there was rio 

6 obligation on the United States Government's part Lo 
underwrite or lepay her for what had been done supposedly as 

8 a private venture which she had told me originally was 

9 altruistically done with no hope of gain and it became 
LO increasingly clear that there was nothing but a hope of gain 

11 trom undertaking that. There's nothing wrong with that. 

12 MR. KERR: General, on behalf of the committee, I 

13 do want to thank you. You have been through some long 

14 sessions with we and I appreciate your patience and your 

15 help. 

16 THE HITNESS: I would put on the record that I 
admire and appreciate your professionalism and the honest an 

18 fair and objective way that I believe you have attempted to 

19 get to the bottom of a very difficult story. 

20 I do think that, although I did not want to get 

21 into answering some of your questions and had my assessment 

22 of you been different from what it was, I might not have 



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9 
10 
11 
12 
13 
11 
15 
16 
17 
10 
19 
20 
21 
22 



answered them — r have been very candid and very complete in 
answering everything to the point where we have put d yreat 
deal oC intormation that rould be very derogat.ny to (JMT and 
Barbara Studley. If they have done no wrong,' T would like to 
see all of this sealed. 

MR. KERR: The Committee's program on this is 
these depositions are shown to no one but the statf. 
Obviously, in terms of. facts that come out that have to be 
brought to the attention ot witnesses for their comment; tliat 
will have to be done. 

THE WITNESS: I understand. I think I also would 
like to add that I don't know of anything in Dr. Cline's 
character or past service to the qovernment, or since he has 
left the government, that would indicate that he would do 
anything that was improper, let alone dishonest or illegal. 
And I would believe because r know him so well, I believe 
that the voluntary statements he made to you are true a.i to 
how little he has had to do with the agency on this matter. 
And -- 

MR. KERR: I don't mean to sviggest any conclusion 
in that regard. 

THE WITNESS: But if you want to put that on as a 



ill 



ACE-FEDERALKEPORTERSnNC. 

202-347-3700 Nadonwide Coverage 800-336-6646 



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,! 

loi 
11 

12 
13j 
Mi 

:: 

17 
18 
19 
20 
21 
22 



character witness fox- him; I don't believe he would d<j 
anything wron<;. 

As a last comnent I would say Barbara has a profit 
motive that's high and liiyher than, purhaps, you or I would 
like to see in a person who is brokering these deals. The 
tart remains she h.is been in business for a longer peri<jd o£ 
time, you tell mv , than T thought she had and she has made nc 
money. Go her efforts to make up tor past business failures, 
or the inability to complete a transaction, is not 
unreasonable and I think that other sources are certainly 
higher. We found -- I found that out in dealing with them. 

t o^^^^^^^^^^H f o 1 1 r 
where I came out was whoever had the lowest bid should get 
the contract. Niibody should get it because they knew 
somebody or were friends with sciwebody in the White House or 
the agency. And I don't believe Mr. Casey would operate any 
differently, either. 

you know, what you say to somebody in an 
interview: I shall have my people look into this -- means 
exactly that. If you have low prices, which T believe ttie 
quoted conversation was an accurate rendition of it, that 
that's wfiat Mr. Casey believed. He would send it out. If 



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his people came back diid said they are twi<;e as mud; as our 

2 1 present suppliers: are, hi', would tell them torget about it. 1 

J. don't believe Mr. iTasey operated on a pergonal tavors basis 

4: with anybody, in the dealings I had with riim starting l<»f)l, 

5 he impressed rae as a very solid man who restored morale is 

6 well as integrity in operational effectiveness to the agency, 
7; in Intel ligence-ijathering effectiveness that it unhappily 

8! lost without making any judgments about those who were 

9i responsible tor the diminution of it. 

10| MR. KERR: Let me do one thing on the record. 

Ill It's always case with these things, we now havo two exhibits 

12 12. The f.iist Exhibit 12 was the Soptembctr 2, 1986 material 

IJj relating to Patrice. 12-A will bo tl\e October .30, 1986 

11\ letter from Mr. -- from General Schweit>!er t< 

I 
15i (Exhibit 12 was remarked as 12-A.) 

16 1 THF WITNESS: I guess my last comment is what does 

17 disturb me and I mentioned this to you there we were off the 

18 record is the amount of material that you have; reveaJed to me 

19 that OMT was involved in that I never knew anything about, 

20 and that bothers me because it would seem to me that if it 

21 were all straightforward, innocent, I would have betMi Cold 

22 about it or brought into it in somo way. 



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MR. KRRH: I appreoidte that. Let's go oi:e Lh« 
record . 

(Discussion off the record.) 

(Whereupon, at 2:40 p.m., the deposition was 
concluded at 2:i0 p.m.) 



ROBERT L. SCHWEITZER 



ACE-rEbtRAL KEPOftTERS. INC. 

2O2-347-370O Nationwide Coverage 800-336-6646 



835 



UNCUSSiREI 



^C CATi 



PERSONAL AND CONFIDENTIAL 

Mr. William Casey 

Director, Central Intelligence Agency 

Langley, Virginia 

Dear Bill. 



The enclosed list of hardware is available for immediate delivery at the prices 
indicated. The list was developed in conjunction with a member of the NSC who is 
knowledgeable of the urgent needs of the United Nicaraguan Opposition with which 
the US has a continuing interest. The items can be at dockside, ready for shipment 
within two weeks from the date of a Letter of Credit or the deposit of actual funds. ? 



(r, our 



Due to the fact the funds from Congress will not be available until after September 
bank in Switzerland, will accept a Letter of Credit from your bank and issue a loan for 
six to twelve months, or as needed. Our bank will fund immediately for the purchase of 
the listed items, thus providing the equipment that is so desperately needed now while 
allowing for payment at a later date. i 

Our banker is prepared to fly to Washington and take care of the Letter of Credit directly 
with your designated bank. This eliminates all bank tested telexes or paper trails. The 
loan can be in the name of a corporation of your choice. It is not necessary for our bank 
to know your identity, only your banker. 



Our bank has been exceptionally discreet in processing our transactions in the past. At 
the close of the transactions, the bank file will only show corporations, numbered items 
and amounts. No reference will be made of the specific items involved in the 
transaction, nor of the individuals or actual organizations involved. 

Please let me know as soon as possible your desires for our future actions on this 
matter. 



Yours truly, 



<::;~;JohJi K. Singlaub 
^-fTtafor General. U.S. Army (RET) 
Consultant 




■■ly-Declassilied/Released on ^'''-' ^'"^ 

under provisions ot E.O 12356 
by K Jot«ison, National Secunty Council 



UNCUSSIHEG 



DC. U S.A. 20006 • (202) 887-05W Telex 904278 GMT W4sn DC. 



836 



uNcmssra 



^ YYAY TRADE 



Al^ OaTl- 



l 0236 



equipment t^H^H 




^^Hio receive credit 
^S!!ards the purchase of 
High Technology from the U b 



10 deliver arms, to 
^anneled through a 
Trading Company. 




Partially Declassltied/Rdeased on. ^'"*-'^- 

undei r/uvisans o( E 12356 

by K Johnson. tJaticnal Secuniy Council 



UNCLASSIFIED 




837 



UNCIASSIFIED 



4. RESULTS 
^^^^pells equipment, which in many cases sits stockpiled at present, '^^^^^H 
In return^^^Breceives from the United States equipment and technology that it 
could not otherwise afford to purchase. 

^^^Kreceives much-needed modernization for its forces, thereby presenting a 
stronger threat to the Soviet Union. In returr^^^Hbxports an ongoing supply of 
domestically manufactured arms, as per directions from the United States. 

The United States then has at its disposal a large and continuous supply of Soviet 
technology and weapons to channel to Freedom Fighters worldwide, mandating 
neither the consent or awareness of the Department of State or Congress. 

The United States would be in a position to dispense these shipments through a 
neutral Foreign Trading Company, established solely for this purpose. 

^^^■wo'jld only be aware of the fact that it is to ship to the Trading Company such 
specified goods as requested, comparable in USD value to the equipment 
received fron^^^^^^^HA/ould not be aware of the final destinations of any of 
the exported arms. 

^^Hwould o/ily be aware of the buying power extended by the United States for 
US technology, again m comparable USD value to the equipment sent '°^^^^^| 



ONCLASSIFIED 



838 



UNtlASSra 



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UNCLASSIFIED 



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JE -HUE Pf ICES OUT O^mM'uriT COTE 
CuDSE TO iOHE OF -HESE PRICES. CLIENT 

:." »Emov tj p-juze cohplete ■yK' ^od 
:: :te"s- sut ohlv ip »icEi *e 

PIGhl. -"C '***T TO OO ei.iJI'lE'S WITH 
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UNCLASSIFIED ^ """^ 



KDS l^iawM COMBPT QEC MODEL Fl W/QU/F2 1 3eo 

RDS liaSMM SMK BURSTING - liUlZHa 

RDS 105MM HE FUSED *17ia 

RDS 1 l^l5tnn he pluged &0121121 

RDS 105MM ILLUMINftTING 301210 
RDS liSSMM T/INDICOTING RED; &0c- YELL0W;6£9. 

RDS 10&Mt1 HEAP HE 300 

RDS li2i&nn HEAT '(80 

RDS 2i^iMM HE/ 1 TYPE SSB/K £0000 

RDS i.0MM OERLIKON flPI/T K0« 547i 

RDS ^'OMM OERLIKON HE I T Kfi« .. 5«7£ 

RDS £0MM OERLIKON SfiPHEl/T Kft« S'.yi. 

RDS J:0l<1t<l OERLIKON TP/T FOR GUN I YPE KflO 50000 

RDS .i0t>1M OERLIKON TP/T KOft £840 

RDS 30MM HE/T £600 

RDS 30MM PROCTICE TRfiCER ^ £3000 

RDS 30Mr<1 SAP/HE I 3000 

RDS AklMM 70 COL HE FZD D« 10000 

RDS 't0MM 70 CflL SHORT BREfiK UP 30000 

RDS 5. SfcMM TRACER - 400000 

RDS 50MM TRfiCER SPOTTER 13496 

RDS 57MM 70 CflL HE FUSE PROXIMITY A000 

RDS 57MM 70 COL PRACTICE 3£50 
RDS 7.6£MM MIXED BELT FOR 4 BALL 1 TRACER , £0000000 

RDS 7. 6£MM SUB CAL TRACER 5379£ 

RDS SAMM HE £1154 

RDS 84MM HEAT ' 4000 

RDS 90MM CANISTER COCKER ILL v' £8 

RDS 90MM HEAT TP/T 7108 

RDS 90MM HEAT/T COCKERILL £680 

RDS 90MM HESH/T COCKERILL 48£4 

RDS 90MM SMOKE UP COCKERILL 56 
RDS SUB CALIBRE 81MM"60MM MOR CHG 0"CHG l'£"£/ 30000 EACH 

SHELL 4.5 INCH APP SMOKE/FLASH FUSE 100 

SHELL 4,5 INCH MARKER 50 

SHELL 4.5 INCH REI/J '. 132 

SHELL 4.5 INCH STAR 7£0 

TUBE VENT ELETRICS 0.5 INCH ' 7£0 
■SIGHT (-.RATICULE TYPE FOR VAX B0£ FOR OERLIKON GAM-B01 AND C0l £0MM 
NAVAL bUNS. AN OPEN SIGHT WITH HEAD REST, GRATICULE, ANTI-GLARE 
riLTER «ND RANGE BARS FOR TRGET3 UP TO £000ME I ERS IT INDICATES 
DEFLECTIONS FOR AIR SURFACE TAGETS, BOTH CROSSING AND APROACHING. 
BEST REGARDS 
ARE YOU RECEVER' 

RDS SUB CAL. FOR 81MM"60MM MOR CHG SHEL. BE 0"1"£'3 
GGGr. 

TO REP'LY FROM TCLEX I OR 1 I (TWX) DIAL 100 FROM tASYUNK USE /WUW. 
EST 16c0 FEB/05/ 19b/ 



DI-XDNNrCTED - FEB 5, '87 5: ££.31 PM 



Pamally Oeciassitied/Released on O ^ C^ Sc 
unOei pfovitions ol E 12356 





UNCUSSIFIED 



845 



UNCUSSiFIED 



0^4. 



WDS lOiSMM COMBfiT QEC MODEL Fl W/OU/FZ ize,id 

RDS liZiSMM SMK BURSTING ~ lieiO* 

RDS liaSMM HE FUSED 41718 

RDS l*5riM HE PLUGED 6000 

RDS 105Hn ILLUMINATING 3000 
RDS 1*5MM T/INDICOTING RED; 60£ YELL0W;6£9. 

RDS 10E,MM HEAP HE 300 

RDS 1I2I&MM HEAT 480 

RDS iUMM HE/ I TYPE SSB/K £0000 

RDS iOMM OERLIKON API/T KAA 5472 

RDS J.OMM OERLIKQN HE IT KAA ^ 5472 

RDS iOMM OERLIKON SAPHEI/T KAA 547£ 

RDS iOMM OERLIKON TP/T FOR GUN TYPE KAA 50000 

HDS i0MM OERLIKON TP/T KAA 6840 

RDS 30MM HE/T £600 

RDS 3«IMM PRACTICE TRACER ^ 23000 

RDS 30MM SAP/HEI 3000 

RDS 4i*MM 70 CAL HE FZD DA 10000 

RDS ".aMM 70 CAL SHORT BREAK UP 30000 

RUS Z. 56MM TRACER ^ 400000 

HDS 50MM TRACER SPOTTER 13496 

RDS 57MM 70 CAL HE FUSE PROXIMITY 4000 

RDS 57MM 70 CAL PRACTICE 3250 
RDS 7. 6£MM MIXED BELT FOR 4 BALL 1 TRACER . 20000000 

RDS 7. 62MM SUB CAL TRACER 53792 

RDS 84nM HE 21134 

RDS 84MM HEAT ' *000 

RDS 30MM CANISTER COCKERILL ' 28 

RDS ■90MM HEAT TP/T 7108 

RDS 90MM HEAT/T COCKERILL 2680 

RDS 30MM HESH/T COCKERILL 4824 

RDS 90MM SMOKE MP COCKERILL 56 
RDS SUB CALIBRE 81MM"60MM MOR CHG 0"CHG 1 "£"£ X 30000 EACH 

SHELL 4.5 INCH APP SMOKE/FLASH FUSE 100 

SHELL 4.5 INCH MARKER S0 

SHELL 4.5 INCH REI/J '. 132 

SHELL 4. 5 INCH STAR 720 

TUBE VENT ELETRICS 0.5 INCH 720 
-SIGHT CRATICULE TYPE FOR VAX B02 FOR OERLIKON GAM-B01 AND C01 20MM 
NAVAL bUNS. AN OPEN SIGHT WITH HEAD REST, GRATICULE, ANTI-GLARE 
FILTER «ND RANGE BARS FOR TAGETS UP TO 2000MEieRS IT INDICATES 
DEFLECTIONS FOR AIR SURFACE TAGETS, BOTH CROSSING AND APROACHING. 
BEST REGARDS 
ARE YOU RECEVER? 

RDS sue CAL. FOR aiMI1"60nM MOR CHG SHEL. BE 0"1"£"3 
GGGR 

TO REI-LY FROM TELEX I OR 1 1 (TWX) DIAL 100 FROM EASYLINK USE /WUW, 
EST It^i^ FEB/0S/1987 



DITCONNFCTED - FEB 5, '87 5i22. 31 PM 



UNCLASSIFIED 



846 



COLE 



ONCLASSIFIED 




1 360 -J 

li.000 \ 



TO GROHflM LOWE 

DESCRIPTON . QTY 

' OOPPTUR SCARE CHARGE 1000 

CARTRIDGES ONTI SUBMARINE PROJECTILE IIOZ « 6R fli-0 y 

CORr . BLANK 103MH- iO«0 '^ 0^4 

CART BLANK 5. S6«M' 

CART CLARING 4eMM 70CALL . 

CART ILLMINATING 1 INCH/i6. 5MM ' 

CART IRRITANT CS l.S INCH A/RIAT 

CART PRIMARY SIMM MORTAR y 

CART SIGNAL I INCH/i6.5MM GREEN 17000 AND RED' 

DETONATOR DEMOLION ELECT SCARE CHARGE NO 70NK 

DET. DEMO SCARE CHG. NO. 80 

DET. PERCUSSION SCARE CHG. NO. 5 

FUSE DM-ME TYPE 6> LR lOOFl ^ 

FUSE NOSE PERCUSSION DA AND DELAY V13PA- 

FUSE PROXIMITY TYPE MODEL Fi - 

GRENADE HAD SMOKE BLUE/RED/YELLOM . 

GRENADE DISCHARGER 7eMM SMOKE y 

MARKERS SMOKE WHITE ANT I SUBMARINE NO. 3 

MINE DISPOSAL BOMB . 

PROJECTILE ANTI SUBMARINE HE • £5 

ROCKETS FLARE 57MM CPMPLETED 2000 

ROUNDS ^£ INCH BALL 4000000 

RDS lOOMM COMBAT QEC MODEL Fl W/OU/FZ 

RDS 105MM SMK BURSTING ■ 

RDS 105MM HE FUSED 

RDS 105MM HE PLUGED &0OO 

RDS 105MM ILLUMINATING 2000 

RDS 105MM T/ INDICATING RED; fcOi: YELLOW ;e£9. 

RDS lOeMM HEAP HE 300 

RDS 106MM HEAT 480 

RDS J:OMM HE/ 1 TYPE SSB/K £0000 

RDS i:OMM OERLIKON API/T KAA 547£ 

RbS ^OMM OERLIKON HE I T KAA ^. 547£ 

RDS iOMM OERLIKON SAPHEI/T KAA 547i 

RDS iOMM OERLIKON TP/T FOR GUN TYPE KAA , 50000 

RDS iOMM OERLIKON TP/T KAA 6840 

RDS 30MM HE/T £600 

RDS 30MM PRACTICE TRACER £3000 

RDS 30MM SAP /HE I 3000 

RDS 40MM 70 COL HE FZD DO lOOOO 

RDS 40MM 70 COL SHORT BREAK UP SOOOO 

RDS 5. 56MM TROCER ^ 400000 

RDS 50MM TRACER SPOTTER 13496 

RDS 57MM 70 COL HE FUSE PROXIMITY 4000 

RDS 57MM 70 COL PRACTICE 3£50 

RDS 7.6i.MM MIXED BELT FOR 4 BALL 1 TRACER , 

RDS 7.6£MM SUB COL TRACER 

RDS a4MM HE 

RDS a4MM HEAT 

RDS 30MM CANISTER COCKERILL ' 

RDS 90MM HEAT TP/T 

RDS 'J0MM HEAT/T COCKERILL 

RDS 30MM HESH/T COCKERILL 

RDS 90MM SMOKE WP COCKERILL 

RDS SUB CALIBRE aiMM"G0MM MOR CHG 0"CHG 1"£" 

SHELL 4.5 INCH OPP SMOKE/FLASH FUSE 

SHELL 4.5 INCH MARKER 

SHELL 4.5 INCH REI/J 

SHtLL 4.5 INCH STAR 

TUBE VENT ELETRICS 0.5 INCH 

•SIGHT (JROTICULE T/PE FOR VAX BOi FOR OERLIKON GAM-B01 AND C01 £0MM 
NAVAL bUNS. AN OPEN SIGHT WITH HEAD REST, GRATICULE, ANT I -GLARE 
."ILTER t^ND RANGE BARS FOR TAGETS UP TO £0O0ME 1 ERS IT INDICATES 
DEFLECTIONS FOR AIR SURFACE TAGETS, BOJH CROSSING AND APROACHING. 
BEST REOARDS 
ARE YOU RECEVER'' 

RDS SUB CAL. FOR aiMM"e0MM MOR CHG SHEL. BE 0''l"i''3 
GGGIS 

TO RE^■LY FROM TELEX I OR 1 I (TWX) DIAL 100 FROM EASYLINK USE /WUW. 
EST It^O FE&/05/13a7 



DI'^CCNNFCTED - FEB 



UNCLASSIFIED 



847 



UNCLASSIFIED 



coRr 

CfiRT 

CORT 

CPRT 

LHRf 

DETONOTOR 

DET. 

DET. 




TO GRfiHOM LOWE 
DESCRIPTON 
WDOPTOR '^C«RE CH«R6E 
"CORTRIDGES ONTI SUBM«RINE PROJECTILE IIOZ 

rnwr blank hb3mm - 

CPRT bLONK 5. StMM- 

CLORING 4(ai>ll<1 7l?C0LL^ 
ILLMINfiTING 1 INCH/i6. 5MM - 
IRRIT«NT CS 1.5 INCH ft/RIOT 
PRIMORY 81MM MORTAR^ 

SIGNAL I INCH/iE,. SMM GREEN 1700^9 AND RED 
DEMOLION ELECT SCARE CHARGE NO 70NK 
DEMO SCARE CHG. NO. SO 
PERCUSSION SCARE CHG. NO. 5 
FU'JE DM-ME TYPE 61 LR laOFl y 
("USE NOSE PERCUSSION DA AND DELAY V13Pfl- 
K'unE PROXIMITY TYPE MODEL f S. - 
liRENADE HAD SMOKE BLUE/RED/YELLOW ^ 
GRENADE DISCHARGER 76MM SMOKE y 
MARKERS SMOKE WHITE ANTI SUBMARINE tJO. 3 
.mini: DISPOSAL BOMB . 
PROJECTILE ANTI SUBMARINE HE 
HOCKCrS FLARE 57MM CPMPLETED 
ROUNDS .li INCH BALL 

HDS li*i?MM COMBAT QEC MODEL Fl W/OU/FZ 
RDS li?5MM SMK BURSTING ■ 

liJSMM HE FUSED 

105MM HE PLUGED 

ll?5MM ILLUMINATING 

li?5MM T/ INDICATING RED! £«£ YELL0W;e;.3 

li^ifcMM HEAP HE 

li?6MM HEAT 

iOMM HE/ I TYPE SSB/K 

il?MM OERLIKON API/T KAA 

.iiiMM OERLIKON HE IT KAA 

i0MM OERLIKON SAPHEI/T KAA 

^OMM OERLIKON TP/T FOR GUN lYPE KAA 

ilJMM OERLIKON TP/T KAA 

30MM HE/T 

2i?MM PRACTICE TRACtR , 

30MM SAP /HE I 

4viMM 70 CAL HE FZO DA 

4I2IMM 7ia CAL SHORT BREAK UP 

5. 56MM TRACER - 

SaMM TRftCER SPOTTER 

57MM 7ia COL HE FUSE PROXIMITY 

57MM 7(8 CAL PRACTICE 

7. EiMM MIXED BELT FOR * BALL 1 TRACER . 

7.6iMM SUB CflL TRACER 

a4MM HE 

e^>MM HEAT 
RDS 3iaMM CANISTER COCKERILL ' 
HDS gOMM HEAT TP/T 
HDS '30MM HEAT/T COCKERILL 
HDS 30MM HESH/T COCKERILL 
RDS SOMM SMOKE WP COCKERILL 

HDS SUB CALIBRE 81MM"Gi»MM MOR CHG O'CHG l"i". 
SHELL 'i.S INCH APP SMOKE /FLASH FUSE 1 «< 

SHELL 't. 5 INCH MARKER 5> 

SMELL '..S INCH REI/J '. !-• 

bHE^^ «..5 INCH STAR 7i:i 

lUE-E VENT ELETRICS 0.5 INCH 7£l 

SIGHT I'lHATICULE TYPE FOR VAX BOJ.- FOR OERLIKON GAM-BOl AND COl il 
NAVAL bUNS. ON OPEN SIGHT WITH HEAD REST, GRATICULE, ANTI-GLARE 
r ILTLR hlND RANGE BARS FOR TAGETS UP TO iOOOMElERS IT INDICATES 
DEFLECTIONS FOR AIR SURFACE TAGETS, BOTH CROSSING AND APROACHINQ 
bEiT REGARDS 
HRE VUU HECEVER-' 
RDS sue CAL. FOR aiMM"£OMM MOR CHG SHEL. BE a"r'i:"3 

GGCili 

rO ftCt'LY FROM TCLEX I OR 11 (TWX) DIfil 
EiiT lt,^0 FE&/0ti/1387 



RDS 
RDS 
HDS 
HDS 
RDS 
HDS 
RDG 
RDS 
HDS 
RDS 
RUS 
HDS 
RDS 
HDS 
RDS 
RDS 
HDG 
RDS 
RDS 
HDS 
RDS 
RDS 
HDS 
RDS 
RDS 



31210 

480 

I'OOOO 

54 73 

547i 

54 7d 

50000 

6840 

^eoo 

^3(2100 
3000 

10000 

30000 
40OOOO 

13496 
4000 



4000 
£■8 
7108 
2680 
48i4 



30000 EACH 



FROM tfiSYLINK USE /UUW. 



"CCNNfCTED - FEB 5, 



5:23.31 PM 



ONCLASSIFJED 



848 



COLBfiH WSH 



UNCLASSIFIED 



TO GRAHOM LOWE 

DESCRIPTON QTV 

ODOPTOR SCORE CHARGE lOiBO 

CttRTRIDGES «NTI SUBMARINE PROJECTILE UOZ <* GR 1 ii? 

Cnwr BLANK 105MM- iiaiBia 

CHRT BLANK 5. SfcMM- 1 6iai?0i?i?li!i 

CART CLARING 40MM 7UCALL . iSO* 

CART ILLMINATING 1 INCH/ifc. 5MM ' iOUUO 

CART IRRITANT CS 1.5 INCH A/RIAT SOiZHJ 

CART PRIMARY 8IMM MORTAR^ 35a(?«i 

CART SIGNAL I INCH/iG. 5MM GREEN 17000 AND RED- I-jOOO 

DETONATOR DEMOLION ELECT SCARE CHARGE NO VONK 1000 

OET. DEMO SCARE CHG. NO. 80 1000 

DET. PERCUSSION SCARE CHG. NO. 5 Et't 

FU'JE DM-ME TYPE 61 LR lOOFl ^ lia«0 

ruSE NOSE PERCUSSION DA AND DELAY V19PA • 35800 

FUSE PROXIMITY TYPE MODEL Fi ^ 540 
GRENADE HAD SMOKE BLUE /RED/ YELLOW , 30000 OF EACH 

GRENADE DISCHARGER 7eMM SMOKE / 37i: 

MARKERS SMOKE WHITE ANT I SUBMARINE NO. 3 1000 

mini; DISPOSAL BOMB . 16 

PROJECTILE ANTI SUBMARINE HE iS 

ROCKETS FLARE 57MM CPMPLETED 300O 

ROUNDS ^^ INCH BALL 4000000 

KDS lOOMM COMBAT QEC MODEL Fl W/OU/FZ 1360 

RDS 105MM SMK BURSTING ' liOOO 

RDS 105MM HE FUSED 41710 

RDS 105MM HE PLUGED 6000 

RDS 105MM ILLUMINATING 3000 
RDS 105MM T/INDICATIN6 RED; 60c: YELL0Wi6i3. 

RDS lOGMM HEAP HE 300 

RDS 106MM HEAT *a« 

RDS .iOMM HE/ 1 TYPE SSB/K £0000 

RDS iOMM OERLIKON API/T KAA 5472 

HLS ^OMM OERLIKON HE IT KAA ^ S47£ 

RDS dOMM OERLIKON SAPHEI/T KAA S*7c 

RDS COMM OERLIKON TP/T FOR GUN TYPE KAA 50000 

RDS iOMM OERLIKON TP/T KAA 6840 

RDS 30MM HE/T f^** 
RDS 30MM PRACTICE TRACER 
RDS 30MM SAP/HE I 
RDS 4i^MM 70 CAL HE FZD DA 
RDS 40MM 70 CAL SHORT BREAK UP 
RDS 5. 56MM TRACER ^ 

RDS 50MM TRfiCER SPOTTER 13496 

RDS 57MM 70 CAL HE FUSE PROXIMITY ««»« 

RDS 57MM 70 CAL PRACTICE 3i:50 
RDS 7.6iMM MIXED BELT FOR 4 BALL 1 TRACER . £0000000 

RDS 7.6cMM SUB CAL TRACER 5379i: 

RDS 84MM HE £1134 

RDS 84MM HEAT " 'HMO 

RDS 90MM CANISTER COCKERILL .' £8 

RDS '90MM HEAT TP/T 7108 

HUS gOMM HEAT/T COCKERILL £680 

RDS '90MM HESH/T COCKERILL '»e^'» 

RDS 30MM SMOKE WP COCKERILL 56 
RDS SUB CALIBRE 81MM"G0MM MOR CHG 0"CHG l'£"£/ 30000 EACH 

SHELL 4.5 INCH APP SMOKE/FLASH FUSE 100 

SHELL 4.5 INCH MARKER 50 

iHELL 4.5 INCH REI/J '. I 3i 

SHtLL 4.5 liN^H STAR 7£0 

lUBE VENT ELETRICS 0.5 INCH 7£0 
•fjIGHT CHATICULE TYPE FOR V«X BOJ.' FOR OERLIKON GAM-BOl AND COl £OMM 
NAVAL bUNS. AN OPEN SIGHT WITH HEAD REST, GRATICULE, ANTI-GLARE 
riLTLR AND RANGE BARS FOR TAGETS UP TO iOOOMEIERS IT INDICATES 
DEFLECTIONS FOR AIR SURFACE TAGETS, BOTH CROSSING AND APROACHING. 
BEST REGARDS 
(^RE you RECEVER'' 

RDS SUB CAL. FOR aiMM"60MM MOR CHG SHEL. BE 0''X"£"3 
GGGii 

TO RttLY FROM TCLEX I OR I I (TWX) DIAL 100 FROM tASYLINK USE /WUW. 
E^T lt,.^0 FEB/05/1387 



DITCNNrCTED - FEB 5, '87 5!££. 31 PM 



UNCLASSIFIED 



849 



uNCUssra 







UNCLASSIFIED 



850 



UNCLASSIFIED 






UNCLASSIFIED 



851 



UNCLASSIFIED 



31 Dec 86 




ITEM* 


PRICE 


1. 


209 


4. 


16.500 


6. 


41 .800 


7. 


209 


8. 


451 


10. 


2.035 


11. 


1,980 


12. 


203 


13. 


169.900 


16. 


2.145* 


18. 


8.415 


la. 


6.600 


20. 


6.600 



Items 2. 3. 5. 9. 14, 15 and 17 need clarification or additional discussion. 

FOB POLAND 

NEW : FACTORY DIRECT TO DOCK. 

TWO WEEK DELIVERY FROM DATE OF FUNDS IN THE BANK. 



Price on Item 16 includes Tripod. 



6-000047 



UNCLASSIFIED 



852 



Exhibit Ifc ^^O ^^ 2^9 



JJ^aJ/bv /J 




UNCUSSiriED 



853 



UNCIASSIHED 



e:x 29c 



77 7^ L- 




-^h 



UNCLASSIFIED 



854 



UNGLMED 






UNCLASSIFIED 



855 



UNCIASSIRED 







UNCUSSIFIED 



856 



UNCUSSIFIED 

HX 2»Ol — EX iO£ 







UNCUSSIHED 



857 



UHtlASSm 






To 7^1^ 




UNCUSSIRED 



858 



UNCLASSIHED 






JJ^aJ/£D /J 



.^*: 



ONCLASSIFIED 



UNCLASSIFIED 



EX 307 - EX30^ 







M 



UNtHASSIRED 



860 



BNCUSSM 



£X 3lZ - EX3I9 







^■>i^ 



ONCLASSIFIED 



861 



UNCUSSIHED 



2& CJk(. 
E I 




PERSONAL AND CONFIDENTIAL 

Mr. William Casey 

Director, Central Intelligence Agency 

Langley, Virginia 

Dear Bill. 

The enclosed list of hardware is available for immediate delivery at the prices 
indicated. The list was developed in conjunction with a member of the NSC who is 
knowledgeable of the urgent needs of the United Nicaraguan Opposition with which 
the US has a continuing interest. The items can be at docKside. ready for shipment 
within two weeks from the date of a Letter of Credit or the deposit of actual funds. 

Due to the fact the funds from Congress will not be available until after Septembef, our 
bank in Switzerland, will accept a Letter of Credit from your bank and issue a ((^n for 
six to twelve months, or as needed. Our bank will fund immediately for the purcnse of 
the listed items, thus providing the equipment that is so desperately needed novmhiis 
allowing for payment at a later date. 

Our banker is prepared to f)y to Washington and take cars of the Letter of Credit directly 
with your designated bank. This eliminates all bank tested telexes or paper trails. The 
loan can be In the name of a corporation of your choice, it Is not necessary for our bank 
to know your Identity, only your banker. 

Our bank has been exceptionally discreet in processing our transactions In the past. At 
the close of the transactions, the bank fi!e will only show corporations, numbered items 
and amounts. No reference will be made of the specific items involved in the 
transaction, nor of the individuals or actual organizations Involved. 

Please M nw know as soon as possible your desires for our future actions on this 
matter. 

Yours truly. Paffally Declassifisd/ReleaseO nn 8<-c<^'£ ^ 

uraJet Ofovisicns of E 12356 
by K Johnson. National Security Council 

John K. Singlaub _ ^T>00365 

Major General, U.S. Army (RET) 

Consultant 



1 Inci: a/s 



UNCIASSIFIED 




862 



GeoMiiiTec.i Corsu^.. .s Ceo 
1919 Pennsyivanra Ave NW Suite 300| 
Washington DC 20006 



ONCLASSIHED 



Quoted 28 July 1986 




E X 


* !IEM 


QTV 


UNIT PRICE 


1 SA-7 


50sets(i*3) 


159.600 per set 


2. 12.7mm MachineGun 
12.7mm Ammo 


60 

3 Million Rounels 


9.350each 
2.940 per M 


3. 14.5mm MacMncGun 
14 5mm Ammo 


20 Twin Version 
1 Million Rounds 


34.0OOeach 
3.570 per M 


4. RPK Riflt 

7 6?X.19mm Amrrw 


300 

15 Million Rounds 


i.980each 
129 per M 


60mmSh«lla 


200 
600.000 


6.500 each 
84 each 


6. 82mm Mortar 
82mm Shells 


50 
150.000 


7.150 each 
105 each 


7. flPG.7 Launcher 
Pa-7vm Pockets 


200 
10.000 


i.8i5each 
194 each 


8. C4 Plastic HE* 






9. AKMS Rifles 


10.000 


155 each 


PRICE ^^^fl 
FOB :^^BP 







lavilabBiy. 
dodcsidt. 

OomnwcW shipptr wi delivar to port you designatt at normal competitive rates. 



271 



Availabie. Source wil not quote wnlhout bona Me offer 
Item under control of separate part of 
Source guarantees price wil be as oorrpeiilive 



as the other items on tttia bL 



NO EUC REQUIRED. 

SOURCE SUPP1.IES Aa REOOIRED DOCUMENTS AT NO ADOmONAL CHARGE. 



IINCLASSIHED 



863 



• — UNCLASSIFIED " °-« 

To create a conduit tor maintaining a continuous flow of Soviet weapons and 
technology, to be utilized by the United States m its support of Freedom Fighters m 
Nicaragua. Afghanistan. Angola. Cambodia. Ethiopia, etc. 

2. PROBLEM 

With each passing year. Congress has become increasingly unpredictable and 
uncooperative regarding the President's desire to support the cause of the 
Freedom Fighters, despite growing Soviet oppression. The funds have not been 
forthcoming to supply sufficient arms necessary for the Freedom Rghters to win. 
Therefor, in leiu of the necessary funding to support this goal, the following 3-Way 
Trade is proposed: 1 

i 

3. PROPOSAL 

CQUNTRV _IAl^^^^^^^^Wis capable of producing an ongoing supply of 
Soviet-compatible arms. I^^B'S at the same time trying desparateiy to 
upgrade their own military forces and equipment. They would like to purchase from 
Israel a wide range of military equipment. 

CPUNTRY •B'j^jmBLouid to sen to^^Hbut^^Kconomy 
is not capabi* of supporting long-term credit or barter agreements. As such, the 
United StatM it tha kay in the succassful 3-Way Trade. 



COUNTRY -C- UNiTFn STATPS The United States is able to prov 

desired High Technology equipment and information. Based on this commodity. ^ 

the Trade would operate as follows: 

fiU*eiCy^J> TO 235 7 



"artially Oeciaisilred/Reieaseo on Si'-CHfi y 
uiMef provBKlra 01 E 12356 




: DtPOWTION 1 
i CXMIBIT // I 



UNCLASSIFIED 



UNCLASSIFIED. 



864 



WAY TRADE 



N 5519 




UNCLASSIFIED 



865 

UNCLASSIFIED 



^■^^ells equipment, which m many cases sits stockpiled at present. to^^^^B 
In r0turn|^^B'eceives from the United States equipment and technology that it 
could not otherwise attord to purchase. 

^^^Hreceives much-needed modernization for its forces, thereby presenting a 
stronger threat to the Soviet Union. In rtturn^^^Hexports an ongoing supply of 
domestically manufactured arms, as per directions from the United States. 

The United States then has at its disposal a large and continuous supply of Soviet 
technology and weapons to channel to Freedom Fighters worldwide, mandating 
neither the consent or awareness of the Department of State or Congress. < 

The United States would be In a position to dispense these shipments through a 
neutral Foreign Trading Company, established solely for this purpose. 

I^^Kvould only be aware of the faa that it is to ship to the Trading Company such 
specified goods as requested, comparable in USD value to the equipment 
recaived frorr^^^^^^Hwould not be aware of the final destinations of any of 



^^■would only be aware of the buying power extended by the United States for 
US technology, again in comparable USD value to the equipment sent to^^^^H 



UNCLASSIFIED 



CO 
CO 



The United Slates at present holds to a policy of providing assistance to^^^^|a 
goal which would be (on^^arded through this transaction. Likewise, the United States is 
commined to extending financial and technological assistance <°^^^^^^|^^B 
This too would be accomplished. There are many avenues available regarding the 
forms of credit which could be extended to Israel. 

We have received confirmation from ^HHHand^^^Rhat they are most 
interested m pursuing their role in this trade arrangement. Upon your encouragement 
and belief that the United States could perform its role, we will proceed with^Hand 
^^^^Hdefining their respective roles and the equipment they are willing to trade. 
~-iis will serve to establish our initial parameters of equipment quantities, and the 
proportionate amount of credit required. 



UNCUSSIFIED 



867 



UNClliSSlFIED 



2 Septefrtwf i < 



272 



Meefng w«, "fW ,n Or»va on IJuty 1 986 

■Pamce- corrtTT*d r» was me owner ol the ams shpmert siezed by General Nonega 

in Panama. 

•Patnce" sated: 

1 TTieshpscJesonattonivasPefu-EISarrador 

2 Peoj had ordered the Inxks, but denied the shp permission to do* due to Che 
amsat»ard 

3 The shp proceeded en route to El Sahradof 

4 •Palnce" had a "Letter ot irterT f 
RPQ-l 8s and the AKMS rfles. 

5 ||m||^^^«^u5«<' permssion to dock. 

6 -Pamce-beiievedi^B^d ordered the amis on behar of someone else 

7 -Patrice- has a partner in Miami, David D uncan, and a representative m DC, 
Eldon 'Dan' CuTimings^m|^|a retred Colonel, USA. 

Comment . ^ 

•Patncesv^fking from an office bearing the rame "Star Producfions in Geneva 

•Palnce"s rull name and a<*ws is as follows: 

Palnce Qenlyde lasagne 

22ARu»<«jC*n(J1er 

i201Q»otv».Swteer1and 



PO Box 248 

1211 Geneva, Swtzertond 
Telephone (022) 31 SI 35 
Telex 28322 STARP-CH 



(r0003l5 



Paffiaily Declassiliej/ReieiBea „„ Fri:^ j.. p 




UNCLASSIFIED 



868 



UNCLASSIFIED 



L .. L 2jL4_. 



Meeting wtn OavKl Duncan. 29 August 1 986. Washington DC. 
Duncan stated 

1 Frst discussed tneposst>il*y<ysh?)mentwthNerstor Sanchez in February of 
1986 Sanchez had no objections Duncan has continued to brief Sanchez 

2 The shp left E. Gemian port headed for Altica. nformed that Afficaannot pay 
the balance due. the sh^ tims around. 

3 The Peruvan Navy ag-ees to pirchase 

4 Peru refuses pemiBSion to dock. 

5 ^^^^^^^^^^■'- to accept shp. then refuses to allow shf) in port 

str^ansing from the Duncan spoke 

'^ Duncan stated 

I ttwras he s getting pressure now, he hasn^ seen anything yet ft 
; not bring Duncan the purchase orders that Duncan ts etpecting, 
Duncan s going to the press and realty tell thetn a story " 

"People down the slreeT (Whte House) on Duncan s back becau 
pirchase ordefs are not coming m fast enough. 



Duncan said mat the NSC vas angry that| 
Duncan, as Ouncan can finance 1 00% 



■had not bought more amis from 



Duncan d«w*« money as "Black Money" placed in Swbs Banks can finance 1009S 
for a 1 5-year loan, wtfi the first payment delayed 1 2 months. 




He also said that he had con(racts|^HH^Bto build a miliary nosptai ano a 
miilary-run refinety and port. All consmction financed w*h "Black Money" 



Duncan is able to worfcall of these mnsactwi 




^000254 



UNCLASSIFIED 



IJNOIASSIFIEO 



-21^. 




Duncan stated "Palnce's partner in Geneva .'George: was a merrber l 

"George" nad teen responstie for l Ocoips inAftxa. andt 
=atnce' m Geneva is 'jnder securty protectior 



Commene and Conclusion. 



Ron Martjn and Mariu Del Amico 




Mar» Del Amico 

a Close personal iriendoflvttxOonrwz (Felal 

^teJiGornei^civilan, lives on a miltory bas 



Mai Gofn« (F*lti) vas plac«d in El Salvador by Nwtcr Sanchez and Dan Qregg 
(Vice-Presidenrs office) Max brags tfat he nas daily cortact wth Uie c^e of the /ice 
President 

Dungi^rags that trrough all of the at>ove, Duncan nas coniroimiB^^| 
■^^|via pov*r from the White House, ,NSC, Vice- President) and Nestor 
iarcnez 

Duncan believed to be a very dangerous man 

inTomiation Duncan willmgfy gave in boastful manner could; 

1 Damage Presoent Reagan and the BepiDiican Party 

2 Damage Vice-President Busn. 

3 Damage NSC and Sanchez. 

4 DsciosLreo^ covert •Black Money' could nave untold ramncations 



^0025: 



UNCLASSIFIED 



870 



UNCLASSIFIED 



2 76 



2 Septernber 1 986 



Meeting w*fi "Palnce" in Geneva on 1 July 1 986. 

■Palnce" confmed he was t^e ownef of the aims sh^mentsiezed by General Nonega 
in Pa nana 

"Palnce" stated 

1 TTw snp s oescnaoon was Peru - El Savada 

2 Peru nad ordered tne micks. but denied the snp pemission to docK aue to cr* 
arms aboard 



3 The snp proceeded en route to El Salvador 



4 "Patrice" fad a "Letter of irtenT fro 
PPG- 1 3s and the AKMS rries. 




perm BS ion to dock 

In ad ordered the arms on benar of someone else 

7 'Pafcie** has a partner ir^am^^vt^uncan, and a represencaove in DC, 
Eklon'Oan' Cumingsmmjj^Blk retred Colonel, USA 

CommenC 

PaoTce s vicrving from an office bearing the name "Star Productions" m Geneva 

■Palnce"s full name and adress s as follows: 

Patnce Genty de la Sagne 
22A Rue du Cendrier 
1 201 Geneva, Svrtzerland 



PO Box 248 

1211 Geneva, Swteertand 
Telephone (022) 31 SI 35 
Telex 28322 STARP-CH 



UNClASSinED """' 



871 



wmm 



277 



Conversations wtfi Dan Curmings 

1 Confirmed irfomiation given &y "Palnce' to be corect 

2. Slated tfat David Duncan had been to the WTite House and rad been 
, a&sued that General Nonega vicuW release the sh^imer 



Several phone caiS wtn David Duncan confrned: 

1 Duncan had been to the Whte House 

2 Duncan had met wthYince (NSC) 

3 General Nofiega has ayeed to release the shpnwnt 



^000253 



UNCUSSIFIEO 



872 



UNCLASSIFIED 



UNCLASSIFIED 



(^-oooavfi 



873 



IINCLASSIFIED 

- — E X Z25. 



5U^ >t* 







^000277 

UNCLASSIFIED 



874 



UNCLASSIFIED 

E X 280 






>S'<2 


^X^ /^ c ^^ 


y^', fV'c £=•. 


/'/yc- 


^V^r /i- 


>src:> cT.^ 


yiTcc 


^/t: ^^? S 


/^^ ^.. 



(5^000278 

UNCUSSIFIED 



875 



UNCLASSIFIED 



281 



Patrice Genty de la Sagne 




star Production Geneva 
22ABueduCendner 
1201 Geneva 


Phone 
TU 


022 31 SI iS 
28322 STARPCH 


POB 248 
1211 Geneva 






Ennptoyees 
Oavid Duncan 


305 
305 


661 - 5999 
898-7753 


Dan Cianmings 


202 


232-5722 



<^100272 



yNCU55ihtO 



876 



wmm 



' IgA 



E X 282 



30 October 1986 



Reference the GMT offer, dated 29 October 1996, of seven (7( AB UH-IB 
helicopters for $2.9 million and an accompanying handwritten memo. 

1 would like to confirm and extend what the 5155,000 would cover: 

100 hour inspection of all aircraft 



aircraft assembly (at the moment 
broken down for shipment) 



and blades 



for smooth 



- aircraft track of main rotor and tail 
synchronization after assembly. 

- check of all seals, hoses and connectors; replace 
as re(]uired 

inventoty of ^I'dreb 

transportation of spares to Florida 

- avionics chock 

While all repairs uncovered by the inspection would be extra, we 
expect them to be minimal. However, the usually expensive work of 
placing back on line seven birds that have been cacooned for years is 
covered by the S155 K. Incidentu 1 ly , we would pass this figure on to 
you at cost. Recognize, too, that if any defect is uncovered, the 
spares are on hand; hence cost of uiiy requireH" repair would be 



(tre 



(ly 



low. 



Because this fleet of seven is in sucti exceptional condition they 
will not be in the market for very long once the seven year U.S. 
Customs hold is lifted. It is pi«r<.isely because all seven are in such 
good condition, that the authorized services and repair center gave us 
such a low quote. 



Robert L. Schweit2e^ ' 



Partially Oeciassified/ReieasM on yfe^p f, 
under qrovistcns or E 12556 




t-^ (^000044 



r:00 9i9Pcnr, 



GeoMiliTecn Consulianis Corporation 



UNCLASSIFIED 



877 



in Oeo^6 



UNCLASSIFIED 

f ^ 309 



Bob's meeting with^^^Hbf 17 December 1986 



No action : Physical condition of one individual and 
paralysis of system are causes. 

Meeting of Board of Directors next Tuesday. They will 
approve list, we have promise that we will be given 
list on which to obtain prices about 4 p.m. 23 December. 

No way now to know quantities or even dollar value of 
package. Quantities are a complete unknown; Dollar value 
expressed in wide range from $4M to S17M, more likely 
higher side. 



1 



Infatttry items - nothing exotic or especially heavy. 
Almost certainly list will include; 



"sTaiiy OeciaBitieomeleasea on J'/V'S^fi 
■■"-- orovMns o( E ilii 



5. Money is going to be a problem - This comes as suprise to 

our clients. They thought money was one thing 

that would not be a problem. For the time, at least, 

it IS a ma:or problem. My guess: combination of scarce 




UNCLASSIFIED 0Z1 



6-000063 



878 

ONCLASSIFIED 



SlQ 



funds coupled with deliberate desire by senior officials 
to interdict virtually all initiatives until local dust 
settles. How best to be sure? Withhold money, then 
no one can do anything. However, we are still promised the 
$4M to $17M package which stands apart from other inertia. 

■Graham's Eight Items* 

o Client has real desire to obtain. 

o Money a problem; client has to reprogram and 

this will take time as well as a will to give 

up something else, 
o Policy paralysis continues for obvious reasons. 

No one wants to move this soon on anything even 

• slightly different, unusual. 
Son* scepticism (shared by us) on whether 
We have bottom price. 'How low really 
is the Limbo Pole." 

Werner's 2 to 8 items" 

Again, real interest, real desire, but this will be a 
longer time coming because of bureacratics. I understand 
the problems, as does client, in asking for a price, but 
it would speed things if we could say unequivocally: 

o Two for S 

o Five for S 

o Eight for S 

"The Burbank Seven Items* Great desire. Real Thirst 

^00064 



UNCLASSIFIED 



879 



UNCLASSIFIED 






money is sol* problen. Conpating needs are food and 
footwear. Hard to argue. *We would love to acquire.* 
Agreement $3N plua or minus is reasonable price. Great 
attraction for what additional $SSK buys in transportation 
of spares. 



^000065 

UNCLASSIFIED 



880 



ONCLASSIFIED 

E X 28 3 



MEMORANDUM 



sert L. Schweitzer 
2 3 December 198 6 



Military Technology and Material 



UHIB Helicopters We have seven OHIB helicopters in prime condition. 
Large inventory of spares (original Army packaged PLL for the seven 
birds plus nore) . Price is S2.8 Million. 110 Hour inspection and 
probable repairs estimated about $20,000. Transportation of 
helicopters and spares to Florida available for about $50,000. 



MIG 21'S 
Package 1 

Package 2 

Package 3 



8 with ammo and many spares, used but in good 
condition. $28 Million 

4 "older version", used; good condition (overh 
10% lifetime spares. $5.5 Million 

6 "latest version", like new condition. 
No spares but could obtain from another 
source at additional cost. $24 Million 



Robert L. Schweitftwr 



Panially DeclasaliBd/ReleaseO m.Bf£^^ 
uilDer provisions 01 E.O 1?3S6 





tfVW 



^000045 



CeoMiliTech Consultants Corporation 

MMO '919 Pennsvivaria Avenue NW <Vasnirqton OC JSa 20006 •'2021887 0516 Teiei 90*278 OMT <vasn OC 



UNCLASSIFIED 






881 



UNCLASSIFIED 



i < ^^5 



Subjea : Comments 



All Soviet Bloc Items will be available at the port within approximately two and 
one-halt weeks from the time the funds are deposited in the designated Swiss 
Bank. Any items o( Chinese ongin will be available at the port in about three and 
one-half weeks. 



We will obtain separate quotes on the items of Chinese ongin. 



Pnces (Incl. 1 ) reflect the sharp decline of the dollar over the past several weeks. 
($ 1 87 against the German Mark as of today), but will not increase for the next 
30 days. They could go lower and almost cenamiy will drop some once the hard 
negotiating begins with the Letter of Credit. 



IV. All pnces will be FOB from either Polish orl 



Line Items 2. 3. 5, 9, 14, 15, and 17 were not pnced pending either clarification of 
following questions (keyed to line items), or price availability. 



Partially Deciassified/Releasea on brchf^ p, 

under pcovisrons ol E 12356 

by K JoHnson. Naiionai Secunty Council 




llfeaJ^ ^000043 

UNi;LA55lhtU '\-< r 



wmm 



882 

f X 291 



5JA^i E.\Jc 



i 

1- 132. 

2. ^^^ 

3 12-r 

^. l0,60O ,sicr A 6ykM£ o'^ 

^. 14,000 

„. -700 ixM* «^ S?</i?D i^'^ ^.j^>^^_^ 

1 5 8H,0CO 3*1 Piftially DedasafieO/RfHeasa) on^^B.S9 

^ 2.SOO 



12356 




ID ^,800 









Nor ^.10 



^000053 



UNCLASSIFIED - A^. 



/r^/^/ 



wmm 



292 



09 January 1987 

Memo for BFS 

S: Meeting witli 



8 Jan 



!• Attached is annotated list given to me yesterday by^|^^H 
Concerned ove^^GMT ' s "significantly higher prices" the peo^^ 
worlcing ^.Of ^^HBI '^^ "^^^ ^^ ^^^ three requesting groups) ^sked 
that the four old suppliers be queried. Up until early January, 
none of the four had been given a copy of the list or asked to 
provide pricing and availablility information. Two of the four 
were out of country; the annotated figures in the left margin are 
the lower of the two who responded. At this point the two long 
time suppliers (15 years; 20 years) were not given copies of the 
list or even specific quantities. Instead they were asked to price 
single items in each line. As a consequence. ^^|^^|^H|||0their 
final bids will be lower for items where there are large 
quantities; e.g., line items 1-5, as well as possibly for some 
other lines. 

2. There can be no real question that the prices supplied are 
honest quotes with which the supplier is prepared to live. The 
alternative would mean that a high government official is lying; 
involved in wrongful activity. If this were true he would be fired 
on the spot and almost certainly subjected to criminal 
proceedings. What we have instead is an honest professional who 
quite properly is seeking to protect his agency and the U.S. 
taxpayer from being overcharged. 

3. If we lose the bid and later wish to do so, we can 



There was no reaction to our October submission which 
by coincidence carried four of the items which 
ultimately were given to us to price m December. 
three of those were higher in our December quote; one 
was significantly lower. Point is that if there was 
It should have been expressed in October 
said his people were scrubbing our input. 



We were not told until yesterday t 
competitive bidding for any arms 
particular government agency 
a recent memo to Casey assuring 



hat 



there must te 
rcha sed by this 
^had written 
tha^ there was. 



More reasonably we should have been told this at the 
outset in accordance with normal government practice. 

Agency was unreasonably slow in coming back to us with 
requested clarifications because they were going out 
for other quotes. Arguably (either way) they should 
have told us sooner that there was a price problem. 

Agency's 8 Jan. feedback to our neat and complete 
submission of 30 Dec, 5 Jan. and 3 Jan. was a 
scrabbled page of annotation (Incl.) 

^00054 

r — ^—^^^^ v ^ni / A 

; 'uiimrrs oewsitww , 
1 1 " """ I ^-^ / ^ 



UNCLASSIFIED 



884 



mmvm 



4. None of the foregoing would have probably changed 
significantly our initial — or even our revised pricing of 5 and 
8 January. We could always go in with a complaint to the Agency's 
Inspector General (IG) but nothing now would really support such a 
complaint. We certainly can check out the price ultimately jpaid 
for all 21 line items if we are not awarded the contract arid at 
this point make a decision on any complaint. Were we <io be 
excluded improperly we would have recourse within both government 
and legal channels. 




6. He believes that our agent or agents are simply charging 
us too much; that "the ultimate source is probably the same for 
your materiel as it is for j.fe other four s uppliers". In ti 
^eq^d, I told him our <:ontactmH^ 
^|HB Response: *I don't believe that could have happene 



* 



■ stated two additional points of relevance: (i- f^QOO'^' 

All Items are brand new neatly and beautifully 



ONCLASSIFIED 



885 



UNCLASSIFIED 



294 



Availability is the same as we have stated: about 
two weeks for Soviet Bl oc material; about three for 



toTdfcH^Bthat If we were to procu?5 the much tess 
expensive Chinese ordnance from Hartley, the order- 
ship time (OSTT would be 120 days. My guess is that 
because of all the earlier bureaucratic delays 
a further 120 day lag would cause the Agency to go to 
one of their old suppliers, even if our prices were 
competitive or a bit lower for Chinese items. 






UNCLASSIFIED 



^000056 



UNCUSSIFIED 



/Vv^A''<f9 



295 



"^ 



14 January 1987 

Oear^mm 

Congratulations on your award I 

Attached is our latest effort. Please do not take it 
as our last. We are working for lower prices — as 
promised and believe we can get them . Be patient, 
please. 

I have circled those items where we are already 
under your quotes to me of 8 January. 

Our sources were astounded at your quotes: 
'ridiculous to nuts'. In some cases they assert that 
your quotes are below factory prices for brand new 
production. We have a real question as to whether 
your old suppliers are truly o^er_^^ 
equipment. For example, in case of m^^^|please 
see our range of quotes. 




Our suppliers, with seeming sincerity, point 
weapon — which they handle all the time — 
as an example where the "competition can't be right*. 

Incidentially , our sources believe we are obtaining 
these weapons from your list for Arab nations; hence 
secur-K-y 's being raaintain«»rt, as you would wish. 



Partially Ceclaisiliea/Relessed onjE_tc£i'8 

unoec provisions ol E 12355 

by K Johnson, National Security Council 



ONCLaSSIFIEO 




887 



UNCLASSIFIED 



E X 296 



"^ 



In the case ofj^H^^of Chinese origin. Defen se and 
Foreign. Af fairs^^ ^ts " t he pric e _ at S260 £or| 
$230 £or| 

With regard to the three clarifications still sought: 




UNCLASSiHtO 



6-000058 



wwssw 



E X 297 



"^ 




Please help u« clarify these. It is slowing up 
process of obtaining lower quotes. 

Warm regards 



Note for GHT File: Incl. w/ pictures and text of 
three items. 



6-000059 



UNCLASSIFIED 



889 



UnrcTlMd ud Unedited ^ 

" " Quotetlonor J^^""» 



8TKNOGRAPHIC MDOJTES 

UnrcTla 

Not for 




^-mmiEB 



Hsrrs JiO^jL- /IT 




Committee Hearings 

of the 

U^. HOUSE OF REPRESENTATIVES 



W 



Declassified/Released en ■ ^'" " 

uid'T provisions of E.O. 12355 
by N.'Menan, National Security Council 



OFFICE OF THE CLBKK 
Office of Official Beporten 



UNCI^IED 



890 



LDD 1 /dot son 



5 

6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 



im«sF 



Declassified/Released on 



('11-^^ 



under provisions of £.0. 12356 
by N. Menan, National Security Council 



DEPOSITION OF BRETT SCIARONI 
Monday, June 1, 1987 

House of Representatives, 

Select Committee to Investigate Covert 
Arms Transactions with Iran, 

Washington, D.C. 

The committee met, pursuant to call, at 5:45 p.m., in 
Room H-139, The Capitol, John W. Nields, Jr. (chief counsel 
of the House Select Committee) presiding. 

Present: John W. Nields, Jr., Chief Counsel; Richard 
L. Leon, Deputy Chief Minority Counsel, Bruce Fein, Research 
Director, and Heather Foley, Administrative Assistant, on 
behalf of the House Select Committee on Covert Arms 
Transactions with Iran; Mike O'Neil and James E. Kaplan, 
Associate Counsel, on behalf of the Senate Select Committee 
on Secret Military Assistance to Iran and the Nicaraguan 
Opposition. 

Also present: Kenneth D. Patrich, Esq., and Leon T. 
Knauer, Esq., on behalf of the witness. 



ilNfiKRIUflFfi 



PT 



891 



UfilffiOTlEF 



EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. NIELDS: 
Q Will you state your name, please? 
A Brett Sciaroni. 
Q How are you employed? 

A Counselor to the President's Intelligence Oversight 
Board. 

Q How long have you been the counsel of that board? 
A Three years. 
Q Starting? 
A • July 1984. 

That's right; July 1984. 
Q Could you just give us a brief, and I mean just 
very summary statement of your education and career history. 
A Sure . 

Bachelor's Degree from Carmen Men's College; 
UCLA graduate, associate with a number of think-tanks where 
I did work in national security studies, including the 
Hoover Institution, the American Enterprise Institute and 
Heritage Foundation. 

I moved to Washington and this is my third 
Administration job. Previously employed at the United 
States Arms Control Disarmament Agency, at the International 
Trade Commission, Department of Commerce. 



1 1 ivKiv AzMvliUL'! 1 1 



892 



mussm^ 



^ — Q You went almost too fast and too briefly for me. 

2 You graduated from UCLA in 1978. Then what job did you take 

3 A 1979; I took a postgraduate fellowship, a public 
^ affairs fellow at the Hoover Institute. 

5 Q How long did that last? 

6 A That was a year. Then I moved on to the American 
' Enterprise Institute to continue postgraduate work, another 

8 fellowship at AEI in Washington, D.C. , in 1980 to 1981. 

9 In 1981, I went over to the Arms Control Disarma- 

10 ment Agency; two years there. 

11 Q ■ What kind of work did you do as a fellow at the 

12 Hoover Institute? 

13 A Studies in international relations, international 

14 securities affairs. 

15 Q How about at AEI? 

16 A The same. 

17 Q How cQiOut at the Arms Control — 

18 A I was associated with the strategic — I was 

19 Special Assistant to the Director, but specialized in strate 

20 gic weapons. 

21 Q I think maybe you answered this and I didn't get 

22 it down in my notes. You started in 1981 with the Arms 

23 Control — 

24 A Right. I was there two years, and two years at 

25 Commerce. That was prior to my going to the White House. 



BNttHSSIPieT 



Q When you say two years at AEI, that is from -- 
can you be a little more specific? 

A I arrived in Washington in 1980 and I was there 
some period through 1981. I don't recall exactly offhand 
when it was. There might have been some overlap with ACDA, 
because at ACDA, I was a consultant initially. 

Q When did you stop working for the Arms Control 
Institute? 

A Arms Control — when did I stop working for AEI? 
What is your question? 

Q • I think AEI, you said, was 1980 through 1981; 
is that correct? 

A Into 1981. There was some overlap with ACDA 
there. 

Q All right. 

When did you stop working for ACDA? 

A Sometime in 1982, and I would have to go back 
and check. 

Q Do you recall the season? 

MR. KNAUER: If you don't recall, just say so. 
THE WITNESS: I don't recall. 
BY MR. NIELDS: 

Q After you left ACDA, you went to Commerce? 

A Yes. 

Q That was from sometime in. 1982 until when? 



l«MilQfi)CKI\:«in 



894 



mmm 



1 - A I think 198 3 or it might have been even up to 

2 1984. I left the Administration, did some writing, and that 

3 was when I did writing for Heritage , and then I took the 

4 job at the White House . 

5 Q You are saying you worked at Commerce from some- 

6 time in 1982 to probably sometime in 198 3? 

7 A Yes. 

8 Q Then you left Commerce and started doing some 

9 independent writing? 

10 A Sure. 

11 Q ■ It was after you had been doing some independent 

12 writing for a time that you eventually worked for the White 

13 House? 

14 A Right. I think it was about six months later. 

15 Q When you say the White House, that is the 

16 Intelligence Oversight Board? 

17 A Sure. Right. 

18 MR. LEON: July 1984? 

19 THE WITNESS: Yes. 

20 BY MR. NIELDS: 

21 Q In these various jobs at the Hoover Institute, 

22 AEI, ACDA and Commerce, did you function as a lawyer or were 

23 these more in the nature of foreign policy kinds of 

24 positions? 

25 A More in the nature of in that category. Although 

1 1 riiSiiSRiHriTOt »p 



895 



mmm 



--when I was in Commerce, I did help write a decision for an 
administrative law judge there on an international trade 
issue, an anti-boycott issue. They needed somebody indepen- 
dent to do the work and so they came to an attorney I was 
working for, John Paul, and I did legal research and so on 
for him. 

Q How about bar memberships? 

A I took the Pennsylvania Bar in July of 1984 and 
waived immediately into D.C. 

Q In other words, you took the Pennsylvania Bar and 
were admitted in Pennsylvania in 1984? 

A And also — 

Q — and you were waived into D.C. as a result of 
your admission in Pennsylvania? 

A Right . 

Q And did you take that bar and become admitted 
as a condition to — 

A Condition of employment at the Board, sure. 

Q At the Intelligence Oversight Board? 

A Right . 

Q You have been with the Intelligence Oversight 
Board as counsel ever since? 

A Ever since, right. 

Q Can you — I guess, first of all, I would like to 
ask what the function of the President's Intelligence 



Hmi^SfilflFflT 



896 



Tmmm 



1 -Oversight Board is? 

2 A Created in the mid-1970s in the wake of allega- 

3 tions about wrongdoing in the intelligence commiinity, it 

4 was a recommendation from the Rockefeller Commission Report 

5 to create a board, an oversight board at the White House, 

6 and it was created to look into matters of legality of 

7 intelligence activities in the intelligence community. 

8 Q Is it fair to say the Intelligence Oversight 

9 Board was supposed to in some sense or another police the 

10 intelligence coramvmity from within the Executive Branch? 

11 A ■ Well, police is a strong word to use there. It 

12 sits on top of the Inspector General and the General Counsel 

13 system, and the way the system does work is that problems 

14 that occur in the community of illegality, impropriety, are 

15 reported up the system and we are the apex of that system, 

16 although clearly we have investigatory powers as well. 

17 Q I am going to put a book of exhibits in front of 

18 you, and I will ask you to turn to the first exhibit in the 

19 book, which is marked BGS-1. 

20 MR. KNAUER: Can we go off the record. 

21 MR. NIELDS: Sure. 

22 [Discussion off the record.] 

23 MR. NIELDS: Let's go back on the record. 

24 Counsel for Mr. Sciaroni has given me a document 

25 marked "Statement of Counsel," and I ask that the reporter 



897 



OTI^<f*®r 



-mark it as BGS Exhibit 22. 

[The document marked BGS Exhibit No. 22 follows:] 
******** COMMITTEE INSERT ******** 

MR. NIELDS: Just briefly, the document which has 
just been marked BGS-22 is a "Statement of Counsel" for 
Mr. Sciaroni. He indicates that he has not had a very long 
time to be able to consult with and prepare his client and 
if we run into any problems where you feel the length of time 
is prejudicing you in some way, why, let's simply discuss it 
and see if we can't resolve it to our mutual satisfaction. 

You have also asked for a copy of the transcript. 
It has been our practice as a committee, as I understand it, 
to make transcripts available in the sense counsel can come 
in and read them, but it has not been our practice to actualljy 
release the transcript, but you have now made a formal 
request for it, and I will take it up in the appropriate way 
and get back to you as soon as I can. 
MR. KNAUER: Thank you. 
BY MR. NIELDS: 
Q Mr. Sciaroni, I had just asked you to turn to 
BGS Exhibit 1, and I will ask you what that is. 

A That is the Executive Order that creates the 
President's Intelligence Oversight Board. 

Q Is it also the document that essentially provides 
for the charter of the board? 



lUdfiUfiW4KD.m 



•»5SW 



' -- A Yes, It does. 

2 Q Tells the board what its responsibilities are, 

3 duties and functions and so on? 
^ A Right. 

5 Q Can you describe what the Board consists of? 

6 A It consists of three board members and a counsel. 

7 Q Any secretarial — 

8 A And a secretary. 

9 Q Are the three board members full time; part time? 
"•0 A They serve at the pleasure of the President, and 
1'' they are not paid and they come in to town for meetings as 

12 required. 

13 Q So these are three people appointed by the Presi- 

14 dent who have other full-time jobs? 

15 A They are distinguished citizens from private life 

16 that volunteer their time to come in and provide an over- 

17 sight function for the intelligence community. 

18 Q How frequently do they meet? 

19 A That depends upon events. We have six regularly 

20 scheduled board meetings a year, one every other month, and 

21 then we will lay on additional means as required. 

22 For example, since November, when the Iran arms 

23 initiative blew up, we have met numerous times and I would 

24 have to go back and check to see how many times, but 

25 probably every couple weeks we have had a board meeting. 



899 



wmm 



Q But in the normal course of things, the board 

would meet six times a year, I take it? 

A Well, only there is never a normal year. There 
is always problems that come up and special board meetings 
will be laid on for those extraordinary events that come 
along. But we do have six regularly scheduled board meeting: 
in addition to which we will have additional meetings. 

Q Now, do you in the course of your fxinctioning as 
Counsel for the Intelligence Oversight Board from time to 
time write opinions on legal issues? 

A ■ I write opinions at the direction of the board. 

Q How do these opinions get initiated? 

A Any number of ways. Somebody will make a 
suggestion about what a likely topic will be. 1 might have 
something reported from one of the intelligence agencies, a 
matter about which I think more attention should be placed 
on it, and that would be in the ordinary reports that come 
in from members of the intelligence community. 

Newspaper articles provide another source. I 
mean, there is just no standard or typical. There is a 
variety of methods used to initiate an inquiry, however 
extensive. 

Q Just very approximately, how many legal opinions 
do you write for the board per year? 

A Well, again, I don't know that I could quantify 



iiijm!^Hen^ 



900 



mmm 



-them, 

2 We write opinions that go directly to the President 

3 We do write opinions that go to the National Security 

4 Adviser as the Adviser to the President for National Security 

5 Affairs. 

6 Occasionally, very rarely, I will write something 

7 for, let's say, a counterpart on the National Security 

8 Council Staff. We have two such, and those are the only 

9 two I can think of I have ever done that has been forwarded 

10 to a member of the National Security Council Staff. And then 

11 there are numerous things that I will write for the board 

12 meetings for our own internal use . 

13 There is no way to quantify. 

14 Q Well, addressing only the ones that actually leave 

15 the board that the board issues letters to the President 

16 or to the National Security Adviser or to someone on the 

17 National Security Council Staff, approximately how many a 

18 year are we talking? Five, ten, twenty, a hundred? What 

19 is the order of magnitude? 

20 A It will actually physically leave our office — 

21 maybe ten, I guess. 

22 Q Per year? 

23 A Per year. 

24 Q Are the majority of those self-generated, self- 

25 initiated, or are the majority written at the request of the 



iUddU&mL 



901 



mmm 



person or entity to whom they are sent? 

A In that sense, they are self -generated. i mean, 
I can't think of a time — I think my predecessor could 
recall a time when the President asked for us to do, asked 
for the board to do something, but I don't recall the 
National Security Adviser or President asking us to produce 
a report. 

Q So in your experience, there has never been — 

A Or to Rafferty, is the only other person we have 
sent an opinion to. 

Q • So there has never been a person you have written 
a request for someone outside the board? 

A For whom that is intended. 

Q And that means that in each case in which you 
have written an opinion for the board and delivered it to 
the President or National Security Advisor or someone on the 
staff, it has been at your initiation? 

A Right, the board's initiation. 

Q Do you know someone named Oliver North? 

A Yes, I do. 

Q Can you tell us how you got to know Mr. North? 

A I had been on the job three months in 1984, 
approximately three months, when in October, an allegation 
surfaced that the CIA had produced a manual on psychological 
operations which advocated assassination which, of course. 



ll^mSSiHELm 



902 



BReinw 



1 „if true, would be a violation of Executive Order. And in 

2 the context of my investigation, I got to know North because 

3 he was the action officer for Central America. 

4 Q And did you — let me ask you this: Where did 

5 Mr. North work? 

6 A He worked at the National Security Council, staff. 

7 Q What building is that in? 

8 A The Old Executive Office Building. 

9 Q is that where your offices are? 

10 A Precisely. 

11 Q ■ How far away was his office from your office? 

12 A Down the corridor. 

13 Q Did you get to know Mr. North thereafter? 

14 A Yes. I had conversations with him from time to 

15 time, and I would see him in the corridor naturally. 

16 Q How frequently, for example, would you go to his 

17 office and chat with him? 

18 A To have a substantive discussion with him, I would 

19 guess I might have seen him once a month. 

20 Q Was this on business or non-business matters? 

21 A Business. 

22 Q And did those meetings occur always at his office 

23 or sometimes elsewhere? 

24 A I can't think of a time it didn't occur in his 
office. 



On^Mrnnvinf 1 Ui-'i 



903 



MfiSIIW 



Q And were these substantive discussions at your 
initiation or his? 

A Always at my initiation. 

Q For what purposes? 

A To get information about subjects that he dealt 
with. 

Q For what reason? 

A The board has always taken a particular interest 
in covert action because of a propensity for covert action 
programs to be problems, and in trying to head off problems ^ 
historically the board has looked at those, and in this 
Administration, the covert action program regarding Central 
America was the most contentious and controversial. 

Therefore, I felt it was important to touch base 
with him from time to time just to find out what was happen- 
ing either on the Hill or in Central America. 

Q I take it that Oliver North was the NSC staffer 
who was principally responsible for the Central American 
part? 

A Right . 

Q By Central America, I take it you are referring 
to all of Central America, but especially to Nicaragua and 
the contras? 

A Primarily, yes. 

Q Can you just describe — I know you have done this 

UilALADiltCUrA^ 



904 



mmm 



1 ..in interviews that have not been on the record, but can you 

2 just describe Mr. North's working habits and any ease or 

3 difficulty you had in getting information or having conver- 
sations with him? 

A I think that I have told you in informal sessions 
that he probably worked longer hours than anybody at the 
office, and the only time I could typically get irjto see 
him, because his days were so full, was in the evening, 
9 perhaps 8:00 or 9:00 o'clock at night, when his schedule 

10 started to wind down. 

11 Q ■ Were there times you endeavored to see him and 

12 weren't able to do so? 

13 A Sure; plenty of times. 

14 Q For every substantive conversation you actually 

15 had with him in his office, would there be a number of times 

16 you would walk down there and — 

17 A I would drop in and see if he was available and 

18 his secretary would tell me he was tied up and to come back 

19 later. Almost invariably when I would come back, he was 

20 still tied up. 

21 Q How about his office physically? Do you recall 

22 whether there were documents in his office or papers that 

23 were either kept out on tables, or can you describe 

24 physically his office? 

25 A He always had a lot of paperwork in his office. 






905 



10 



25 



um^sst^EiT 



^ "' Q °i«^ there come a time when some questions were 

2 raised publicly about the possibility that North was involvec 

3 in fundraising or operational activities on behalf of the 

4 contras? 

5 A Yes. 

6 I became aware in August of 1985 of a number of 

7 newspaper accounts that accounted congressional concern 

8 about his activities. 

9 Q I take it this was during a time when the 
so-called Boland amendment was in effect? 

"'"' A That is right. 

^^ Q ^ ^^^^ it that was the subject of these newspaper 

13 articles and about congressional concern? 

^^ ^ That was in part what the newspaper articles were 

15 about. 

^^ Q That Oliver North's activities may have been in 

17 violation of the Boland amendment? 

18 A Right. 

"•^ Q I would like you to turn to Exhibit No. 2 and ask 

20 you if you can identify that? 

^^ ^ It appears to be a letter to McFarlane from Michael 

22 Barnes, in August, also accounting press reports about what 

23 Colonel North was doing. 

^^ Q °^^ you obtain a copy of that letter at or about 
the time of these press reports? 



906 



IMASStffir 



1 .. A I think that is likely. I have a copy in my 

2 file and I assume' that is when I secured that. I think that 

have. 

3 the press reports that I saw may hage quoted from this 

4 letter. I may have initiated an inquiry as to getting a 

5 copy of the letter. 

6 Q In any event, you did have a copy of this letter 

7 in your files? 

8 A Yes, I did. 

9 Q You also collected a number of newspaper articles 

10 on this subject? 

11 A ■ Yes. I collect a great number of newspaper 

12 articles and I don't specifically remember asking NSC for 

13 that, but that would be the logical place I would have pro- 

14 cured that. 

15 Q When you say that, you are referring to Exhibit 2? 

16 A Right . 

17 Q Now, as a result of Exhibit 2 and the newspaper 

18 publicity, did you decide, first, to conduct an inquiry into 

19 Mr. North's conduct? 

20 A I decided to look into the allegations that an 

21 intelligence law had been violated. I am not — I think the 

22 way I approached it was to first analyze the legislation and 

23 then to do a factual inquiry. 

24 Q I take it before you sat down and actually wrote 

25 an opinion on this subject, you did a factual inquiry? 



[i^iA<»»ncn.. 



907 



mmm 



A That is not my recollection. My recollection 
is I did the legal analytical work first and then did the 
factual inquiry. At least at the tail end of my analytical 
work, that is when I did the factual work. 

Q We will come to this in a moment, but the opinion 
you wrote on this subject makes reference to your factual 
inquiry as having been completed and makes reference to the 
conclusions that you reached as a result of your factual 
inquiry. 

My question is: At least prior to the time that 
you actually wrote the opinion, had you not also done a 
factual inquiry? 

A Oh, you mean by the time the board reviewed and 
approved of the memo, had I done — I had done both by that 
time, sure. 

Q By the time you actually wrote the final draft 
of the opinion? 

A I had done both, that is right. 

Q I would like to ask you first, if I may, about 
the factual inquiry that you did. What exactly did you do? 

A I, and I don't recall the sequence, I did two 
things. I went to Colonel North and to the NSC General 
Counsel. "^ 

Q NSC General Counsel is Commander Thompson? 

A Yes. 



•IwiirtifanddfMfe tpi 



908 



Wkims 



1 _ Q Paul Thompson? 

2 A Yes. 
Q Can you describe for us first how your meeting 

4 with Mr. Thompson was arranged and, secondly, what happened 

5 at it? 

6 A Because Commander Thompson is in the West wing 

7 of the White House, it is not a matter of dropping in to 

8 see him. I drop in to see NSC colleagues in the OEOB, but 

9 not in the West Wing. 

10 I phoned and made an appointment to see him. 

11 Again, I don't recall if this was prior to or after the 

12 meeting with North, but in any case, I went in and made 

13 reference to the fact that there had been allegations raised 

14 about Colonel North's activities and I said that I was doing 

15 an inquiry on that, and I believe by that time, the news- 

16 papers had also recounted the Congress had gotten involved 

17 more than just a letter from Barnes, and I asked to see 

18 anything he might have that would give me an idea as to what 

19 Colonel North's activities were with regard to this matter 

20 Q And what did he do? 

21 A He produced a stack of memoranda for me to 

22 examine. 

23 Q Did you, in fact, examine them? 

24 A I did so. 

25 Q Now, can you recall in general what they showed? 



'i i PlMniaNaUll P UL'rp 



909 



mmF 



20 



1 -- A Well — 

2 Q Let me withdraw that question. 
^ "o'^ thick a stack of documents was this? 

4 A My recollection is about an inch thick. 

5 Q Did you make any remarks to Mr. Thompson about 
the quantity of documents he made available to you? 

A I may have. i was aware that Colonel North kept 
extensive files in his office. m any case, the subject 
came up and the distinction was made between Colonel North's 
personal papers and NSC documents, that is, documents 
that had left his office and were part of his NSC documents 

12 system, i suppose. 

"••^ Q Who made that distinction? 

"I* A Commander Thompson. 

^^ Q Do I understand you correctly to say that 

16 Commander Thompson told you that he was showing you the 

17 official NSC system documents, but not the documents that 

18 would have been in North's office? 
■•9 A That is right. 

^° ^- KNAUER: Excuse me, i thought you said 

21 personally. Weren't you distinguishing between personal 

22 documents — 

^^ T«2 WITNESS: I think that is what you stated. 

^^ ^- KNAUER: You said his office. I don't know 

25 If that is as specific as you wanted to be 



910 



mmsm 



1 - MR. NIELDS: I asked the question just the way 

2 I wanted to because he has been over this with us before. 

3 MR. KNAUER: I thought there might be some confu- 
^ sion. 

5 THE WITNESS: Maybe you ought to restate the 

6 question. 

7 BY MR. NIELDS: 

8 Q I take it what Mr. Thompson told you was that he 

9 was showing you documents that come from the NSC official 
''0 files, but was not showing you the documents that had been 

11 in Colonel North's office that had not go|ne into the files? 

12 A That is correct. The distinction maybe between 

13 his personal working papers and documents, whatever, and 

14 NSC documents. 

15 Q I take it he was not telling you that the so-callec. 

16 personal documents were unrelated to the contras, simply 

17 that they were not official documents? 

18 A Right, and that this is what they had shown the 

19 Hill when their inquiry came in. 

20 Q That is, the Hill had been shown the Scune stack 

21 of official documents that you had? 

22 A That is correct. 

23 Q Were you told that you were shown all the 

24 documents that the Hill was shown? 

25 A That is my recollection. 



iAUSSincji. 



911 



yiasaiw 



Q Now, did you — okay, returning to my earlier 
question, can you describe just generically what information 
was contained in these documents? 

A Well, there were a variety of documents about 
legislative strategy with regard to getting renewed funding 
for the contras, what North had been involved in politically. 
I think we have some notes I created at the time that showed 
what kinds of things were in there. 

Q Let's turn to them. They have been marked as 
Exhibit 3. Rather than me testifying, will you identify 
Exhibit 3? 

A Yes. It is two pages of handwritten notes, it is 
my handwriting. These are — the third page does not consti 
tute notes I made in Thompson's office, only the first two 
pages. And I sat there with the documents and flipped 
through them and jotted down some notes which I then put in 
the file. 

Q Now, I guess I want to state this on the record. 
I don't think we have any copy of these notes that is per- 
fectly legible in all respects. We would be very apprecia- 
tive if your counsel could get us a copy of the original 
notes which Xeroxes all of them so that you can read them. 

A Okay. If you will make a note of that, I will 
endeavor to do so. 

Q We would like it as soon as possible. I think you 



liims^Hcii. 



912 



i}Reii^iFir 



1 ..might have shown them to us in your office. 

2 A I did. 

3 MR. NIELDS: None of our copies is as readable 

4 as the original and I think part of the problem is the 

5 Xeroxing. 

6 MR. KNAUER: Sure. 

7 BY MR. NIELDS: 

8 Q Now, looking at these notes, I guess I would like 
g to ask you first, in the upper left-hand corner, it 

■JO says, "NSC involvement, one, moral support while funds, 

11 and then there is an arrow coming down; 2, influence, re: 

C 

12 atrocities; three, encourage political program, march on 

13 San Jose declaration." 

14 Are those notes of the documents or are those 

15 notes of a conversation that you had with Mr. Thompson? 

16 A I don't specifically remember, but the 

17 implication is that that would be from a conversation and 

18 not from the documents themselves. 

19 Q When you say implication, you are saying your best 

20 recollection and inference from reading these notes? 

21 A The best recollection and knowing how I do things. 

22 I think that you can see halfway down the page, when I am 

23 jotting down notes about specific memos, there are specific 

24 dates to identify it in case I would ever want to go back 

25 and locate that memo again . 



i nnn vl ■in 1 1/ lii mw^i 



913 



ONIXimEST 



24 



1 -There are dates. The upper half of that page, there are no 

2 dates and that probably reflects the fact that was from a 

3 conversation I had with Coiranander Thompson. 

4 Q Are these things Commander Thompson is telling 

5 you based on his prior review of documents and familiarity 
with this issue? 

A I don't know that he made that assertion, but I 
think that these things, these particular items would 

9 certainly reflect what was being said by the Administration 

10 at the time. 

11 Q ■ And this was being told to you by Thompson? 

12 A I assume that that is what these notes indicate. 

13 Q And then down below it says — is that "no 

14 military support?" 

15 A Yes. 

16 Q And to the best of your recollection and under- 

17 standing, that was also said by Mr. Thompson in substance? 

18 A That is the implication of my writing. 

19 Q Information gathering, that was also said by — 

20 A Yes, that would be standard. I mean, the Boland 

21 amendment did not talk on information gathering. 

22 Q Then it says below that "North's knowledge of 

23 military activity is due to reports received from CIA. " 

24 A Right . 

25 Q That was also said to you by Commander Thompson? 



lUim^ElEJl, 



914 



mmm 



1 -' A I assume it was. 

2 Q Then it says "Various documents, constraints 

3 imposed by law during time of ban," what does that mean? 

4 A I assume that is starting to reflect what I am 

5 writing down as I review the documents. 

6 Q You are making your note from the review of the 

7 documents, that they reflect the fact the law imposed certaii 

8 constraints? 

9 A Right. 

10 Q Would I be correct in assuming this is a point in 

11 Mr. North's favor, that was recognizing the validity and 

12 importance of the law? 

13 A That is true. 

14 Q Then there is a one, it looks like January 15, 

15 1985, memo from North to McFarlane on Nicaragua options. 

16 A Yes. 

17 Q I take it that is a reference to a particular 

18 document bearing that date and that title? 

19 A Right. 

20 Q Then there is two, it says March 7 memo 

21 restructured Nicaraguan PRO, standing for program? 

22 A I would assume. 

23 Q That is a reference to another particular document 

24 A That is right. 

25 Q Then it says "DIA reports, listed Soviet military 



915 



miMw 



1 -equipment shipped to — 

2 A Nicaragua. 

3 Q — Nicaragua. 

4 A Right. 

5 Q And I take it that comes from some other document 

6 or some document? 

7 A Yes, or maybe a series of documents; I don't know 

8 Q And below that it says all of these options are 

9 currently being pursued except for the — 

10 A I think it is aid to the armed opposition. 

11 Q ■ That also comes out of a document that you are 

12 reading in Thompson's office? 

13 A I believe those are quotation marks there. 

14 Q On the next page, it says March 7, 198 5 meetings 

15 between NVF military and congressional leaders. 

16 A Slash editors, et cetera. 

17 Q And that is a reference to information in another 

18 document dated March 7? 

19 A Yes. 

20 Q Then it says May 31, 1985 memo. 

21 A Right. 

22 Q Plans are — 

23 A It looks like underway. 

24 Q — underway to transition from current arrangement 

25 to a — 



llil^lASSIBEL 



916 



mimm 



1 

2 
3 

4 

5 

6 

7 

8 

Idd ends/#l 9 

Dat fls /#2 10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



A What appear to be consultative, I think, capacity, 
but I am not sure. 

Q Consultative capacity — can you read the word 
below that? 

A Once congressional approval granted in lifting 
Section 8806 of restrictions. 



iJOLJtSSEIEL 



917 



mmm 



Q That is a reference to a document dated May 31, 
which you are summarizing. 

A Right. 

Q Then below that it says March 30, 1985. 

A I believe that when we examined the original — 

Q Could you read those words into the record for us? 

A "I believe the original would indicate a Washington 
Post letter from"--I think that it is cut off here, but I 
think it is Bernheim. 

Q Post is the word paren letter from Bernheim? 

A Right. 

Q That is a document dated that date that relates 
to the Washington Post letter? 

A Right. 

Q Then below that it says March 1, 1985. 

A I assume that is San Jose declaration. 

Q That means memo that date that relates to the 
San Jose declaration? 

A Right. 

Q Now, what I would like you to do next is turn and 
take whatever time you need. I would like you to look at 
Exhibit 4, 5, 6 and 7, and 8 and read them. I think 'one or 
two I showed you in your office earlier. 

A This has all been redacted so this is unclassified. 

Q They are unclassified. Your lawyer can read them. 



iimji&anca,„ 



918 



bap-2-2 



iea^HBF 



26 



1 i would like you to read them and tell us whether those 

2 were amongst the documents that you were shown in Mr. 

3 Thompson's office. Maybe we should take them one at a time. 

4 A That would be a good idea. 

5 Q Let's take BGS-4 first. 

6 MR. KNAUER: That is Exhibit 4. 

7 THE WITNESS: We are on four. 

8 BY MR. NIELDS: 

9 Q I should say that what has been blanked out of 

10 Exhibit 4, BCS--! are the names of foreign countries and 

11 officials of foreign countries. 

12 A All right. I am sorry — I can tell that that 

13 document was not included in the stack of documents that 

14 I reviewed. 

15 Q Would it be fair to assume that you would have 

16 regarded it as inconsistent with what you were being told 

17 by Mr. Thompson had you read it? 

18 In other words, it is something that would have 

19 stuck in your minds. 

20 A Yes. Let me rephrase that. This would clearly 

21 have made an impact on me. There is no way I would have 

22 missed a document like that. 

23 Q Okay, I would like you to turn to Exhibit 5. 

24 A I can tell you that document was not in the stack 
25 



that I examined. 



!(nrabnon4Hfcir*T» 



919 



wmm 



27 



Q That also would have made an impact on you had you 
read it at that time. 

A Absolutely. 

Q Turn to Exhibit BGS-6. Again I should tell you 
that what has been deleted from this document is the name of 
the foreign country and officials of that country. 

A I can tell you that that document was not in the 
stack that I examined. 

Q I take it this also would have made an impact 
on you at the time. 

A It would have jumped out at me. 

Q I would like you to look at Exhibit 7. You 
don't need to look at the end user certificates. I would like 
to take adHMfr another exhibit. Number 7. 

MR. KNAUER: I think for clarification, with respect 
to Exhibit 6, Mr. Sciaroni was responding to the first memo; 
is that right, because he skipped some others. 

MR. NIELDS: He read the first cover memo which 
is the pages or page and a half. He read the letter 
from Mr. McFarlane. He did not read the end user certificates 
which are attached to the letter, and is not testifying 
with respect to those. 

THE WITNESS: We are on 7. 

MR. NIELDS: Yes. 

THE WITNESS: That memo was not in the stack which 



ii&iGij&ccioca,,^ 



920 



mmm 



was shown to me. 

BY MR. NIELDS: 

Q I take it that contains information that — 

A Would have been relevant to my query. 

Q I would like you to look at a document that 
has been marked BGS-8 and ask you to read that and ask you 
what is that among the dociaments that was shown to you? 

A That memo was not in the stack that was shown to 



me. 



), referring now to BGS Exhibit 8. 



Q That n 

A -Right. 

Q Okay. I take it that document would also have 
jumped out at you had you seen it at that time. 

A Yes, it would have. 

Q Okay, I would like you to turn to the next 
document, which is BGS-9. Now, this is, I take it, the 
opinion on the applicability of the Boland amendment to the 
National Security Council, which you wrote as a result 
of the newspaper publicity and the letter from Congressman 
Barnes. 

A That is right. 

Q I take it this opinion does two things. It 
addresses the legal question of whether the Boland amendment 
applies to the NSC. 



Right. 



\mmB 



921 



BNIItmiW 



29 



1 - Q And it addresses the factual question of what Mr. 

2 North had done. 

3 A Correct. 

4 Q And I would like to take this opinion backwards, 

5 if I may. The last portion of it, which is headed 

6 Arabic numj^eral 2, what activities were undertaken by 

' — ^ 

7 ^ NSC? You say in the first paragraph, after 

8 reviewing NSC documents — I am sorry, I have neglected 

9 to ask something — I would like to, before addressing this 

10 opinion, I want to ask you after you had reviewed the 

11 documents in Mr. Thompson's office, did you see any 

12 documents that raised problems so far as you were concerned? 

13 A You mean subsequent? 

14 Q No, while you were in Mr. Thompson's office 

15 reviewing this inch thick stack of documents, you took 

16 notes — we have been over your notes. Did you see any 

17 documents that raised any problems? 

18 A No . 

19 Q And did you either thereafter or before do 

20 something else in order to investigate the allegations that 

21 had been made by Mr. North? 

22 A Yes, I dropped by Colonel North's office one 

23 evening and asked him about the newspaper accounts. 

24 Q And to the best of your recollection, what did you 
25 



ask him? 



oim&sim. 



922 



IMASSfFIEf 



30 



- A I asked him--it was a very short conversation 

that we had, at least that aspect of it was very short. 

The newspaper article had raised general allegations about his 

activities. I asked him if there was any truth to 

them, and he issued a blanket denial. 

Q And about how long did this conversation last? 

A It might have been five minutes, might have been 
even less than that. There was no specificity to the 
charges, and there would have been very little for me to 
pursue once he said he was not involved in those 
activities', fund-raising and giving military advice and so 
on. 

Q Okay. Did you do anything else in furtherance of 
your investigating the charges that were being made in the 
press and by Congress? 

A No, those were the two things that I did. 

Q Okay, now returning to BGS-9, which is your 
opinion, it says under Arabic Numeral 2, what activities 
were undertaken by NSC, and then you write after reviewing 
NSC documents and interviewing North, "The board can report 
the following:" 

I take it that refers to the document review in 
Paul Thompson's office you just testified about, and 
your conversation with North that you just testified about. 

A That is right. 



iMi&^MA 



ffiwuraw 



31 



' " Q And then you record in this document, in effect, 

2 that you have concluded, based on that review, an interview, 

3 that Colonel North was not involved in any problematic 

4 or possible illegal activities, 

5 A That is right. 

6 Q Now, referring back to the legal portion of this 

7 document, I take it you came up with several different 

8 reasons for the conclusion that NSC was not covered by the 

9 Bo land amendment. 

10 A Yes. 

11 Q And the Boland eunendraent, as I understand it, 

12 prohibited any agency or entity involved in intelligence 

13 activities from supporting either directly or indirectly 

14 the contrast. 

15 A Right. 

16 Q And you concluded that that statute did not 

17 apply to the NSC, and your reasons are listed under 

18 letters A, B, and C in this opinion. 

19 A Right. 

20 Q Now C says the NSC does not function as a member 

21 of the intelligence community. 

22 A Right. 

23 Q And in effect, what you say is that it doesn't 

24 engage in operational intelligence activities and therefore 

25 is not an agency involved in intelligence activities. 



ilMCiiflSimu^ 



924 



l!MiOTi?F 



32 



1 - A Typically, it does not engage in operational 

2 intelligence activities and I can only suppose that that 

3 is the reason it has never been chosen by just executive 

4 order or statute to be a member of the intelligence 

5 community . 

6 Q That is in effect what you said in Section 1-C of 

7 this opinion. 

8 A Right. 

9 Q That the statute does not apply to the NSC caut e 

10 the NSC does not typically function as an operational 

11 intelligence entity. 

12 A Right. 

13 Q Now, here is the question I want to ask you. I 

14 take it your conclusion in that respect had been confirmed 

15 by the results of your investigation in this particular 

16 instance. 

17 MR, KNAUER: I am a little confused. Are you 

18 talking about the factual investigation? 

19 MR. NIELDS: Factual investigation. 

20 MR. KNAUER: Thank you. 

21 THE WITNESS: I don't think, as I said before, I 

22 believe that that section was written before I did the 

23 factual investigation. 

24 BY MR. NIELDS: 

25 Q That is what I say. It was confirmed by it. 



IIAI£]J!»Un£Jl.rp 



925 



U16l$$lfl!F 



33 



1 In other words, you investigated the question of whether or a/o+ 

2 North was involved in some operational covert activity in 

3 Nicaragua, and had concluded that he was not. 

4 A Yes, and that means that, as I stated before, 

5 typically, NSC is not involved in those operations and 

6 Colonel North's activities fell within that judgment that 

7 it is not something typically NSC does, and it seemed 

8 at the end of that factual investigation Colonel North 

9 wasn't involved. 

10 I would like to add a caveat, which is that I 

11 had a footnote, which also pertains to the second section, 

12 and that that conditions the second section. Footnote 5, 

13 5 andb, I guess would be the two. It would be two caveats 

14 I had attached. 

15 Q I take it what you are referring to is the 

16 fact that Colonel North might be covered by the Boland 

17 amendment by reason of the fact that he was a military man. 

18 A If he was being paid out of DOD funds, he would 

19 be covered, right. 

20 Q But as to the NSC generally, you conclude that it 

21 was not covered. 

22 A That is right. 

23 Q One of the reasons you conclude it was not covered 

24 is that the NSC does not engage in operational intelligence 
25 



activities. 



iJL'PJ ACCinrn 



926 



ums^flfiT 



1 -- A I don't consider that the hard law. That is 

2 not the primary function. That is a rationale. 

3 Q I will get to what you call the hard law. Since 

4 you had three different bases for your opinion, I want to 

5 get at this one first. 

6 I take it it is correct to say that one of the 

7 underpinnings for your conclusion was that the NSC does ti©+" 

8 engage in operational intelligence activities. 

9 A Does not particularly get involved in operational 

10 activities. 

11 Q Now, if the NSC, if you had concluded that HCS 

12 was engaged in an operational intelligence activity; namely, 

13 covertly supporting the arming of the contras, for example, 

14 would that have changed your conclusion. 

15 A Let me say that the President may choose to use 

16 the NSC from time to time in operational capabilities. That 

17 is not typically a function of the NSC. But, the 

18 President may, for a variety of reasons, choose to do so. 

19 Q My question is, if the President were to choose to 

20 use the NSC to run a covert support for the armed resistance 

21 by the contras, would that have changed your conclusion 

22 about when the Boland amendment applies to the NSC. 

23 A Well, it would — the point of this memo was 

24 whether the Boland amendment, whether the NCS was affected 

25 by the Boland amendment, and I concluded that it was not 



im&$lSlfJFJL 



927 



yRets»?F 



35 



within the purview of the Boland amendment. 

Q I understand, but my question is if you had 
concluded that the NSC was in fact being used to covertly 
support the war in Nicaragua, would that have changed 
your conclusion? 

A It depended upon the circumstance. If it was 
just pure NSC, I don't think so. Without support from 
members of the intelligence community, without support 
from people that were prohibited by the Boland amendment, 

cWoose 

then the President could cho a c to use the NSC, for example, 
for fund-raising. 

Q How about for running a covert war in Nicaragua? 

A Well, it seems to me that without the support of 
the rest of the U.S. Government, there is no way you 
could run a covert war from the NSC. 

Q Well, okay, I understand that, but I guess I 
still would like to press the question. If you had concluded 
that the NSC was running a covert war in Nicaragua, would 
that have changed your conclusion about whether the Boland 
amendment applied to the NSC? 

A No, 

MR. KNAUER: That is the third time around. I 
think what he said — 

MR. NIELDS: He has now said it. 

MR. KNAUER: I think what he said is what his 



i!MaiJiCGicica.r. 



928 



mmw 



1 concern was, and the hypothetical question you laid out 

2 to him was where the funding came from and his determination, 

3 as I understand it, was that the Boland restrictions did 

4 not apply to the NSC unless there was some linkage with 

5 the organizations that received the funding. 

6 I think that is what he said. If you are 

7 satisfied with his answer, so am I . 

8 MR. NIELDS: Now, I would like you to turn to 

9 Exhibit 11. If you would look at the second page of 

10 Exhibit 11, these are excerpts from a statute. Some 

11 pages have been removed because it is a very thick 

12 statute. I would direct you to the middle of the 

13 second page of the statute, which reads, "Section 8066-A." 

14 And my first question is whether that is the Boland 

15 amendment. 

16 THE WITNESS: That is. 

17 BY MR. NIELDS: 

18 Q Now the language reads, and I am going to skip 

19 some words here, "No funds available to the Central 

20 Intelligence Agency, the Department of Defense, or any 

21 other agency or entity of the United States, involved in 

22 intelligence activities, may be obligated or expended for 

23 the purpose which would have the effect of supporting, 

24 directly or indirectly, military or paramilitary operations 

25 in Nicaragua, by any nation, group, organization, movement 



i^l/L^[£U:A,. 



929 



mmm 



37 



or individual." 

My question is, if the NSC is actually involved 
in a covert war in Nicaragua, how do you reach the 
conclusion that it is not an agency or entity of the 
United States involved in intelligence activities? 

A I laid that out in the memo. 

Q I would like you to say it orally. 

A Okay, that section is attached to the legislation, 
Department of Defense legislation and intelligence 
community legislation. Intelligence Authorization Act. 
Both of those organizations lay out what funds are 
conditioned by that and I think if you look in those two 
places you will find out that NSC does not appear in 
either place. 

Q Are you saying that NSC is not covered by the 
statute which has been marked Exhibit 11? 

A That is right. 

Q That is an appropriation statute; is that 
correct? 

A And that is a continuing resolution that was 
later attached to the Intelligence Authorization Act and 
to the Defense Department Act, whatever that was. It is in 
my memo, and that conditions what organizations are subject 
to the Bo land amendment. 

Q Well, I just want to make sure I understand. 



U^iJlJ»E&n 



mms 



38 



1 " Exhibit 11 is an appropriation statute. It is 

2 Public Law 98-473; is that correct? 

3 A That is right. 

4 Q Are you saying that Public Law 98-473, this 

5 appropriation statute, has no application to the NSC? 

6 A I will have to go back and check, but NSC was 

7 covered under different appropriations. 

8 Q Are you certain of that? Let me ask this: is 

9 that an important ingredient to your conclusion? 

10 MR. KNAUER: I believe you are confused. I know 

11 I am. Maybe you can start again with the question. 

12 MR. NIELDS: Let's organize ourselves a little 

13 bit here. I don't want to keep anything from you. 

14 Exhibit Number 10 is Public Law 98-618. 

15 THE WITNESS: That is correct. 
ie BY MR. NIELDS: 

17 Q That is the Intelligence Authorization Act for 

18 fiscal year 1984. 

19 A Right. 

20 Q And I have attached what I believe to be the 

21 relevant pages of it. If you will digress, please let me 

22 know. It says in its first section, Section 101, "Funds 

23 are authorized to be appropriated for the following 

24 agencies..." and it lists 10 agencies. 
25 



Right. 



ilMCUCSJUUl^ 



931 



Bi 




39 



Q Which are intelligence agencies that do not 
include the NSC. 

A That is right. 

Q Then there is a second statute which is 
Exhibit 11, which is Public Law 98-373, and it is an 
appropriation statute. 

A Right. 

Q And it contains in the language which you have 
identified as the Boland amendment. 

A Yes. 

Q Now, Exhibit 10 on its face, has no application 
to the NSC. It authorizes monies for 10 agencies, which do 
not include the NSC. 

A That is right. 

Q Then it has a provision that says no money 
authorized under this statute can be used to support the 
contras. 

A Right. 

Q My question to you is whether Exhibit 11, which is 
Public Law 98-473, whether you are saying that that has no 
application to the NSC. 

A If you will notice the Exhibit 10, the Authorization 
Act, supersedes it. It is later in time, November 8, 1984, 
and that encompasses the Boland amendment. The earlier 
one is a continuing resolution, one of a series of 



iiiiOJissiaEii^ 



932 



mmms' 



40 



continuing resolutions in October. 

Q Well, now, I think you indicated that Section 8066-A 
of Public Law 98-47 3 was the Boland amendment. 

A Yes. 

Q Is that correct? 

A That is right. 

Q Now, are you saying that that 8066-A was superseded 
or amended later? 

A No, that was taken into the Intelligence 
Authorization Act, which passed in November that dictates 
what agencies are affected by that amendment, the Boland 
amendment. 

Q Well, let's move back just for a moment. This 
Public Law 98-473, which is Exhibit 11, I guess I am not 
sure I have had an answer to my question on that statute. 
Does that law, that appropriation statute, cover the NSC? 

A It is my understanding it does not. 

Q Or if it did, that was in the context of, I would 
have to go back and check. It is my understanding that it 
was in the context of the continuing resolution. 

Q Why does that matter? 

A Well, it was superseded. It was a series of 
continuing resolutions, which funded it day to day, but I would 
have to go and check. NSC comes under a different funding 



bill. 



f^Mi^miRDn^ 



WKMSW 



41 



Q Treasury-Postal. 
A Right. 

Q Well, I have omitted a section here, but I 
don't want to deceive you. The Treasury-Postal authorization 
is included in Public Law 98-473. 

A I would say it is different. I believe it is a 
different title. 

Q It is included within. I have omitted the pages 
and I will put them in this exhibit. 

MR. KNAUER: We would like to see them. It would 
make it a little easier on, I think, Mr. Sciaroni. 

MR. NIELDS: But what is it you are saying 
happened to the Public Law 98-473 later on? 

THE WITNESS: What happened is the Intelligence 
Authorization Act, which took in the Boland amendment 
dictated which organization that applied to. 

MR. NIELDS: Did it repeal Public Law 98-473? 
MR. KNAUER: I think what he said is it restated it 
in Section 801. 

BY MR. NIELDS: 
Q My question is did it repeal Public Law 9 8-473 
or did that still stay as the existing statute on the 
books? 

A I will have to go back and check, but this 



law defines what -- 



lUddUSlMQ,. 



934 



1 

2 

end bap 3 
md flos 

4 

5 

6 

7 
8 



mmm 



Q This law referring to which one? 
A The intelligence authorization defines what 
organization it applies to. 



iiM£ii<tima,. 



935 



^mmns 



43 



Q What organization, what applies to? 
A The Boland amendment, section 801. 

MR. KNAUER: Of Exhibit 10 is what he is referring 
to now. 

MR. NIELDS: You are talking about the 
authorization statute? 

MR, KNAUER: Section 801 of the authorization statute, 
the second page. 

THE WITNESS: Right. 
BY MR. NIELDS: 
Q And you are saying that this authorization statute, 
which authorizes money for 10 specific agencies — 
A Defines. 

Q Somehow changes the earlier appropriations statute. 
A It defines what organizations are prohibited from 
doing the prescribed activity. 

Q Are you saying that it defines the agencies covered 
by the appropriations statute? 

A Defines the agencies covered by the Boland amendment 
and encompassed in the intelligence authorization. I don't know 
how else to put it. 

Q Let me ask you this: Is it possible for any agency 
of the government to spend money without an appropriations 
statute? 

A No, everybody has to have an appropriation. 



iiNniifyoFiEU 



936 



mmm 



Q You have to have an appropriations statute? 

A Yes. 

Q And the appropriation statute is the one which is 
Exhibit 11; is that correct? 

A That is an appropriation statute. 

Q Now, I think you have said that unless you have an 
appropriation, you can't spend the money? 

A Yes. 

Q My question to you, what is it that you are saying 
modifies the language in the appropriation statute that says 
no agency or entities of the United States involved in an 
intelligence activity may be obligated or expended for the 
contras? 

A What I am saying is that the intelligence authorizatioti 
defines what organization funds are affected. 

Q I don't want to argue about it, but doesn't the 
authorization statute tell you what agencies are affected by 
the authorization statute? 

MR. KNAUER: He said now, Mr. Nields, I appreciate 
what you are driving at, is that his understanding of the law 
was that that act occurred on November 8, 1984, which had to do 
with the intelligence activities. He enumerated the 
agencies that it referred to'^the Boland amendment. 

The continuing resolution you are referring to 
occurred on October 12, 1984, and certainly has much more 



um&^<^!£yii 



937 



^mmm 



45 



general language, and as I understand what he said about, he 
said that the subsequent legislation refined, further refined 
the applicability of the amendment. That was his conclusion, 
his conclusion referred in on September 12, 1985. 

I may not agree with it, but I think he has been 
reasonably consistent in responding and you may not accept 
his answer, but I don't think he can give you any more 
information. 

BY MR. NIELDS: 

Q Let me ask it this way, I guess. How can an 
authorization statute change the meaning of an appropriation 
statute? 

A My understanding of the previous statute that you 
referred to, the subsequent Exhibit from October is a funding 
mechanism that covers a wide number of organizations, and if it 
was meant, if the Boland amendment was meant to apply to the 
entire U.S. Government, that is what it should have stated, 
that the Agriculture Department should not have been included, 
that the Commerce Department should not have been included, 
and so on and so forth. 

The subsequent Intelligence Authorization Act, which 
incorporated the Boland amendment, defined the members of the 
intelligence community, that is, agencies or entities that are 
involved in intelligence activities. 

Q Okay. I would like to turn to Exhibit 14. That is 
Executive Order 12333. 



938 



wmm 



46 



A 
Q 
12333? 
A 
Q 
A 
Q 



Right. 

I take it you are familiar with Executive Order 



Yes. 

That is still in effect? 
Yes. 

I would like you to turn to provision 1.8(e). 
MR. KNAUER: What page? 
MR. NIELDS: That is on B-107. 
MR. KNAUER: Thank you. 
BY MR. NIELDS: 
Q Are you familiar with that provision? 
A Yes. 

Q It refers to special activities. I take it that wou; 
include covert intelligence operations? 
A Sure. 

Q And it says that no agency except the CIA may 
conduct any special activity unless the President determines 
that another agency is more likely to achieve a particular 
objective. 

A Yes. 

Q I take it that would mean that, for example, the NSC 
could not perform a covert operation unless the President has 
determined that it was more likely to achieve a particular 
objective than the CIA? 



Would you restate that again? 

luiouRaGJOEH. 



mmm 



47 



" Q I take it that this section means that NSC could not 
perform a covert intelligence operation unless the President 
had made a determination that the NSC would be better at it 
than the CIA? 

A That is not a topic that was covered in the memo. 
Q No, I am just asking that question. 

A If the President chose to use the NSC for a particular 
mission, he could do so. 

Q But unless he chose that agency to do that mission, 
the agency could not do it, isn't that correct? 

A That is right, the President would have to make 
a decision. 

Q Do you know if the President ever made a decision 
that the NSC should conduct a special covert operation in 
Nicaragua? 

A I have no knowledge of that. 

Q Now, I would like you to turn to section 3.1. 
A Where are we? 

Q We are on the same document, page B-144. 
MR. KNAUER: B-14 4? B-what? 
MR. NIELDS: I am sorry, 114. 114. 
THE WITNESS: What section was that? 
BY MR. NIELDS: 
Q That is section 3.1. 



Yes. 



IIKIPI Accicicn 



940 



mmm 



Q It says that at the bottom of section 3.1, it says, 
the requirement of section 662 of the Foreign Assistance Act 
of 1961, and section 501 of the National Security Act of 
1947, shall apply to all special activities as defined in this 
order. 

A Yes. 

Q Again, special activities would include covert 
operations,! take it? 

A Right. 

Q That would include covert operations done by an 
agency other than the CIA, pursuant to Presidential 
authorization? Is that correct? 

MR. KNAUER: If you are able to render an opinion. 
THE WITNESS: I would want to — I think I would want 
to consider that more to — I would not prefer to make a 
judgment about that at this time. I think I would like to 
take a look at how special activities are further defined. 
MR. NIELDS: Okay. 
BY MR. NIELDS: 

Q If you can, turn to page B-116, in the middle of the 
page there is a section headed (h) special activities, means 
activities conducted in support of national foreign policy 
objectives abroad, which are planned and executed so that the 
role of the United States Government is not apparent or 
acknowledged publicly, and function and supports of such 



tiAiniAgginr j 



941 



end THOMAS 



DOTSON fls 
at 7:15 10 

It 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 



mmm 



activities, but which are not intended to influence United 
States political processes, public opinion policies or media 
and so on. 

I think you already testified, and I take this 
definition confirms your testimony, that special activities 
includes covert intelligence operations abroad? 
A I am not denying that. 



lIMPJiQQlTlEIL 



942 



Dotson/drg 
Take #3 



imSfflMF 



50 



THE WITNESS: What is the question? 
BY MR. NIELDS: 

Q The question is, again, just to remind you, I think 
we earlier went over section 3.1 of this Executive Order which 
said the President could designate an agency other than CIA 
to do a special activity. 

A All right. 

Q I cuo sorry, that was 1.8 that said that. Then I am 
directing your attention to section 3.1, which says that 
section 662 of the Foreign Assistance Act of 1961 and 501 
of the National Security Act of 1947 shall apply to all 
special activities as defined in this order. 

I take it that would include special activities 
done by agencies other than CIA. 

A VVhat was the section? 141? You are referring 
to the reporting requirement. 

Q The one headed "Congressional Oversight". 

A Right. 

Q And then has general language about the duties and 
responsibilities of the Director of Central Intelligence and 
heads of other departments and agencies, and then it says 
that these two statutes shall apply to all special activities 
as defined in this order. 

My question is, I take it that applies to special 
activities that are done by agencies other than the CIA. 



iiKini AQ^Of a 



943 



URSfflSSWP' 



51 



A That would seem to be the logical conclusion from 
that, right. 

Q And these statutes, 662 of the Foreign Assistance 
Act of 1961 and 501 of the National Security Act of 1947, 
require that covert intelligence activities be supported by 
Presidential findings and notify the Congress. 

A True. That is correct. 

Q So that if the President were to designate the NSC 
to do a covert support of the war in Nicaragua, it would be 
required that Congress be notified and supported by a finding? 

A If the President designated the NSC to do an 
intelligence activity, special activity, this statute would 
come into effect subject to any interpretations of the 
reporting requirement which have — well, there are conditions 
of timeliness, et cetera, which would also come into effect 
as well. I am not prepared to discuss that today. I know 
there is an issue there. 

Q Leaving aside the issue of timeliness for a moment, 
there would have to be a finding. 

A There would have to be a finding. 

Q And there would have to be timely notice, whatever 
that means, to Congress. 

A Right. 

Q Now, referring to classified — 

A Is it referring to a classified document we have 



IlimUCClClIIL. 



944 



OlWStfKiT 



to discuss? 

Q Yes. 

We will try to make it short. 
(Witness' attorneys leave room.) 
THE WITNESS: Which exhibit are we looking at? 
BY MR. NIELDS: 

Q We are looking at Exhibit Number 15. First of 
all, are you familiar with NSDD 159? 

A Not intimately. It has only recently been made 
available to me. 

Q You are aware of it? 

A I am aware of it. 

Q And this is it? 

A This is it. 

Q I would like you to refer to page — well, it is 
the fourth page of the exhibit, it is the second page of 
NSDD 159. 

A I am sorry, I don't have the page numbers. 

Q It is the fourth page of the exhibit. Just leaf 
down from the top of the exhibit. There, you got it. 

A All right. 

Q I direct your attention to approval procedures for 
intelligence. 

A Right. 

Q First of all, what is NSDD? What is NSDD? 



UMfikAjCfilCl£&. 



945 



UNffiW^ 



53 



A National Security Decision Directive. 

Q NSDDs are issued by whom? 

A I assume the National Security Council. 

Q This one is signed by Ronald Reagan. 

A It was prepared — I am not in that process, so I 
don't typically review these things. 

Q I take it NSDD 159 relates to covert action policy 
approval and coordination procedures. 

A Right. 

Q And, again, referring to the page of the exhibit 
that is in front of you, there is a section headed "Approval 
Procedures for Intelligence". 

A Yes. 

Q And it says at 1, "Presidential Findings", and it 
says, "The President shall approve all covert action", I 
believe that is findings, "in writing". 

A Yes. 

Q I take it that requires covert action findings to be 
approved in writing. 

A That would be the implication. 

Q Then there is a section, a sentence later on that 
says "EO 12333" — that is Executive Order 12333 you just 
testified about. 

A Right. 

Q This directive established covert actions undertaken 



8iwiujoi>irjLcn.^ 



946 



tINfitlW&Br 



54 



by components other than CIA also require a Presidential 
finding. 

A Okay. 

Q That is what I think you already testified to. 

A Right. 

Q Then it says each covert action is already considered 
a significant anticipated intelligence activity under section 
501 of the National Security Act and subject to certain 
Congressional reporting procedures, and that is what you also 
just testified to? 

A Right. 

Q Then again it says in section 2, subsection 2, "In 
accordance with Executive Order 12333, the Central Intelligence 
Agency shall conduct covert actions unless the President 
specifically designates another agency of the government." 
Again, I think that simply repeats what you have 
testified to under Executive Order 12333? 

A Right. 

Q I would like to go back to your opinion. You had 
testified, I think you started to testify that there was a — 
MR. LEON: Can his counsel come back? 
MR. NIELDS: Sure. 
(Recess.) 
BY MR. NILLDS: 

Q Back on the record. 



i I wi^m VJSuiJ*ff^lfrrn 



947 



UflKISSSIRfflET 



55 



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 



I want to return to your opinion, which is Exhibit 
9. I think you started to say earlier that the hard legal 
basis for your opinion was that the NSC was not listed as 
one of the 10 intelligence agencies. 

A That is correct. 

Q I thought you were going to say a softer basis for 
your opinion was that the NSC did not engage, as a general 
matter, in operational intelligence matters. 

A I assume that is the rationale for why it has never 
been listed in any of the authorization acts. 

Q That was one of the rationales for your opinion as 
to why it wasn't covered? 

A With the caveat that it is typically not involved in 
operations. 

Q But I am saying that that was one of the — another 
basis for your opinion, that the NSC does not function as a 
member of the intelligence community? 

A Does not typically function as a member of the 
intelligence community. 

Q And that was one of the bases of your opinion the 
Boland Amendment didn't apply? 

A Yes. 

Q I think you have said in interviews you regarded 
that as a softer basis for your opinion. 

A That is true. 



>itiAi inoiTirD 



948 



yH6^^i»:lklT 



56 



1 " Q You also said in your opinion, that section of your 

2 opinion, you said if the letter of the law does not include 

3 the NSC as a member of the intelligence community, neither 

4 does the spirit of the law. 

5 I take it your point there is that if the NSC 

6 does not do intelligence activities, then it is consistent 

7 with the spirit of the law it wouldn't be covered? 

8 A I think I was referring there to the spirit of the 

9 Boland Amendment. 

10 Q That is what I was referring to as well. My questior 

11 is the following, and I think you have answered this in 

12 interviews that we have had informally with you before, that 

13 if it turned out that the NSC was in fact conducting a covert 

14 intelligence activity in support of the contras, that although 

15 that may not violate the letter of the law, it would have 

16 given you some concerns about whether it was violating the 

17 spirit of the law. 

f3 A I wouldn't go that far. I think that there may 

19 have been Congressional people who thought it violated the 

20 spirit of the law, 

21 Q Well, did you understand it to be the intent of 

22 Congress, in enacting the Boland Amendment, that the President 

23 could go find some other agency of government, EPA or any 

24 other agency of government, and use its funds to support the 

25 



war in Nicaragua; 



umiiSSIl 



949 



im^BUT 



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

II 

12 

13 

14 

15 

16 

17 

18 

1» 

20 

21 

22 

23 

24 

25 



" A I believe Congress intended for the members of the 
intelligence community not to be involved in operations in 
Nicaragua in support of the Democratic Resistance. 

Q Did you think it was the converse, that U.S. money 
should not be spent in support of intelligence activities in 
Nicaragua? 

A It is my understanding that no funds allocated to the 
members of the intelligence community have been used to support 
directly or indirectly, military or paramilitary operations in 
Nicaragua. 

Q I think you have answered my question, but I want 
to make sure. 

MR. KNAUER: I will object after the third time. 

MR. NIELDS: I am going to ask it one more time. I 
think I can ask it in a yes or no form. 

BY MR. NIELDS: 
Q Do you believe it would have violated the spirit of 
the Boland Amendment for the NSC to be used to give covert 
support to the war in Nicaragua? 

A Congress indicated, when it attached the Boland 
Amendment to the Intelligence Authorization Act, that no 
members of the intelligence community should be engaged in 
supporting the Nicaraguan Democratic Resistance. 

MR. KNAUER: What he is talking about — the language 
might help. It says the letter of the law, and I am quoting 



uipiAQCinrn 



950 



DKStliSSIHifir 



2 

3 

4 

5 

6 

7 

8 

9 

10 

It 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



from the Language you are discussing, the letter of the law 
does not include the NSC as a member of the intelligence 
community, neither does the spirit of the law. 

And what he is talking 4)out is whether or not the 
NSC comes within or without the restriction, either as a 
matter of law, a matter of spirit or a matter of Congressional 
intent. He is not talking about the spirit with respect to 
covert actions by agencies, such as the Department of 
Agriculture, for example. 

MR. LEON: Let me ask. Was it your feeling at that 
time if Congress intended to cover the NSC it would have 
so stated? 

THE WITNESS: That is exactly my point. 

BY MR. NIELDS: 
Q Well, but you have also made the point Congress 
didn't think of the NSC as an agency that was likely to 
engage in this kind of conduct. 

A I think I went over several times last time, 
Mr. Nields, a comment made by a member of rfiS*I, in which he 
said the law was ambiguous — 

MR. LEON: What member? 

THE WITNESS: George Brown was quoted in the newspapi 
to that effect. Other things that occurred at that time 
reflected the fact there was an ambiguity there, and I state 
in this memo if Congressman Boland had wanted them to be 



I WTWSirtl ^pwjifltolt'^™ 



951 



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 



nmssiMiT 



covered by it, he had ample opportunity. There was legisla- 
tion for, you know, any number of opportunities he could have 
had if he had wanted to bring that in. It wasn't as if the 
issue wasn't clear at that point. The issue of the ambiguity 
of the NSC was in the newspaper, it was stated by colleagues 
of his, and if he had wanted to do it, he could have done it. 

MR. LEON: If he could have gotten the votes? 

THE WITNESS: If he could have gotten the votes, 
that is right. 

BY MR. NIELDS: 

When was this statement made by Mr. Brown? 



I will have to reBa»aeh that. 



Was it contemporaneous? 

It was August of 1985. 

So following the enactment of the statute? 

That is right. I have a number of citations to that 
effect as well. The ambiguity, it was clear at the time. 
Why that wasn't fixed or attempted ~ I don't even think an 
attempt to fix that was made. 

Q I think it would be helpful if you could produce 
to the committee, maybe before the end of the week, whatever 
documents you are referring to that demonstrated the ambiguity 
was clear at the time. I am sorry, I don't — 

MR. KNAUER: There was a reference made to a state- 
ment, we will try to seek that out and collect whatever others 



iikitn Axioinm^ 



952 



inm^B^T 



60 



we can. 

MR. NIELDS: That would be very helpful. 

MR. KNAUER: Is that all right with you? 

THE WITNESS: Sure. 

MR. NIELDS: Or later on. I think a statement by 
Mr. Brown would be — if you could — 

THE WITNESS: I thought I had made plenty of references 
last time. But obviously I didn't. 

MR. KAPLAN: Could I ask some questions? 

MR. LEON: Usually with House witnesses, we will 
let the House Counsel go first. 

MS. FOLEY: Can we ask if you had any help in 
preparing this opinion? 

THE WITNESS: This? 

MS. FOLEY: Yes. 

THE WITNESS: The board, as a matter of course, 
will go over any work product prior to it leaving our office. 

MS. FOLEY: Did you talk to anybody on the Hill? 

THE WITNESS: I talked to some people, and I don't 
recall who. I talked to some people, I did. 

BY MS. FOLEY: 
Q Like whom? 

A Gary Schmidt, a colleague of mine at the White 
House, who used to be with the Senate Select Committee. 
Q Anybody else? 



1MCUI^£1£]£IX- 



uNeasMBiET 



61 



- A I don't think so. I would have to think about it. 
I don't recall offhand. 

MR. KAPLAN: I am James Kaplan. I am Associate 
Counsel with the Senate Select Committee. We have met a 
couple times before. I just have a few questions, and I will 
be brief. 

BY MR. KAPLAN: 

Q You testified earlier this evening that there were 
a number of exhibits, I believe they are Exhibits 4 through 
8, if I am not mistaken, that if you had seen — that if you 
had seen those exhibits, they would have jumped out at you. 

A Yes. 

Q They would have made an impact on you. 

A They would have. 

Q Can you tell me — and that they were relevant to 
your inquiry? 

A Indeed they were relevant. 

Q Can you tell me for what purpose these would have 
been relevant and for what purpose they would have jumped 
out at you? 

A The allegations had to do with the military advice 
to the Nicaraguan Resistance and fund-raising. I would have 
wanted to have examined them, those kinds of documents, a 
lot more closely if they had been presented to me. 

Q And would they have affected any conclusions in 



llMfLACSJElCa. 



954 



im^flEiT 



62 



the memorandum that has been marked as Exhibit Number 9? 

A You mean the Boland Amendment? 

Q Right. 

A I would -- I mean, clearly it would have affected 
the fact-finding portion, and if I had made a determination, 
and I don't want to make a snap judgment about documents I 
haven't had a chance to properly review, but with regard to 
the footnotes about whether Colonel North was on a reimbursed 
detail or on a regular detail, that clearly would have been 
more important than making a determination about what his 
status was. 

Q And what kind of effect would these documents have 
had on the memorandum? I am taking into account you haven't 
had an opportunity to review them thoroughly. 

A I really don't want to comment dispositively on 
documents I haven't had a case to analyze. 

Q Would they have related solely to Roman Numeral Two 
in section 2 of the memorandum? 

A Section 2 is the fact-finding — 

MR. KNAUER: You are referring to section 2? 
Pardon me. 

THE WITNESS: Yes, it would have been related to 
that, but also footnote 5 would have also been important. 
BY MR. KAPLAN: 

Q Footnote 5 is tacked onto part 1(c) of the 



I nVnEU \cfQFfBm''Ti 



955 



URtttSSffipT 



memorandum? 



A Well ~ 

Q Is that correct? 

A A. 

MR. KNAUER: 1(a) . 
BY MR. KAPLAN: 

Q Is it possible the substance of these memoranda 
would have affected your conclusions throughout the memorandum: 

A Well, not on the bulk of the first section, certain- 
ly not, because, again, that had to do with whether the 
Boland Amendment applied to the NSC in general, not with 
regard to the particulars of Colonel North's status there. 

Q As I read the conclusion of part 2 of the memorandum 
you conclude none of Lieutenant Colonel North's activities in 
the past year constitute a violation of the Boland Amendment, 
even if the amendment applies to the NSC. Is that correct? 
I didn't employ a creative use of the ellipsis. 

A That is right. 

Q I take it the memoranda which have been marked as 
Exhibit 4 through 8 might have affected the portion of the 
conclusion that I just read. 

A Certainly. 

Q All right. Is it also possible that the memoranda 
which have been marked as Exhibits 4 through 8 might have 
affected part 1(c) of the memorandum which relates to 



ililQUQMUUL 



956 



mmm 



64 



whether or not the NSC functions as an operational intelligence 
agency? 

A In this way, it would have had a caveat it 
typically doesn't operate in that function, but the President 
from time to time may choose to use the NSC for activities 
that are not simply coordinating policy, and so on and so 
forth. 

Q You testified earlier with respect to Executive 
Order 12333, if the President so chose, it likely would have 
had to have been supported at the time with Congressional 
notification . 

A That is true. 

Q And you also testified earlier you are not aware 
that any such findings for Congressional notification was 
done. 

A That is right, that is right. 

Q Can you describe the nature of the legal research 
that was done to prepare this September 12 memorandum? 

A What do you mean? I don't understand. 

Q What did you do? You described earlier, in response 
to Mr. Nields' questions, what you did with respect to the 
factual inquiry. 

A Right. You go to the law library and dig out the 
pieces of legislation. It is straightforward legal research. 

Q What I want to know is precisely, to the best of 



IIUAU0>A1B»<^ 



957 



IINSHSfflW' 



65 



1 your recollection, what did you do? 

2 A There is no way I could — you look at the indexes 

3 and look up — I don't understand what you are — 

4 Q Do you recall having read the legislative history? 

5 A Yes. 

6 Q Do you recall having read prior Boland Amendment 

7 legislation? 

8 A Our office has done some work with that, yes. 

9 Q Had you done any in connection with this memorandum? 

10 A No. My predecessor had done analysis of the, I 

11 think the '83 Boland — that's been provided. 

12 Q How much time would you say you have spent doing 

13 legal research? 

14 A I would have no idea, recalling two years later. 

15 Q Do you recall it being a lengthy task or something, 

16 because of your familiarity with the subject area, you probabli 

17 didn't spend a whole lot of time on? 

18 A I spent as much time as required to do the legal 

19 research, and I can't characterize how many hours it was. 

20 Q I am not trying to be coy, I am trying to get an idea 

21 as to how much time you spent in preparation in this memoran 

22 clum. 

23 A I suspect, if you went back and looked at the memo 

24 produced two years ago, you could not recall how much time 

25 you spent. 



958 



UffiMSSMS^ 



66 



Q That may or may not be true. It would depend, 
personally, on the memorandum and the impact it had on me at 
the time. 

Did you circulate this memorandum draft to anyone 
before it was presented to the board? 

A I don't recall having circulated it. 

Q But you do have a practice from time to time of 
circulating the draft? 

A I occasionally will. It depends on the memorandum 
in question. 

Q ' And who normally would you choose as a resource to 
circulate a classified memorandum such as this one? 

A There is no normal — oh, if you are asking 
specifically about this one, I don't recall having circulated 
that. It would depend on a case-by-case basis, who I think 
might lend some helpful criticism. 

Q You indicate a copy of this memorandum without the 
letterhead and so forth was found in Colonel North's safe. 

A I am aware of that. 

MR. LEON: Is it Exhibit 9(a)? 
THE WITNESS: Yes. 
BY MR. KAPLAN: 

Q You have told us during the course of the interviews 
that Exhibit 9(a) is identical to Exhibit 9 but for omission 
of the letterhead and date and whatever else that would 



fffMnm llcVn JfifvKVn 



959 



1 

2 
3 
4 
5 
6 
7 
8 
9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

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20 

21 

22 

23 

24 

25 



imsstHiiT 



normally go at the top of a memorandum. 
A Yes. 

Did you give a copy of this memorandum to Colonel 



I don't recall having done so. 

Is it possible this may have happened? 

It is possible. 

How else would he have gotten a copy of the 



Q 
North? 
A 
Q 
A 
Q 
memorandum? 

A From NSC, from McFarlane's office, I suppose. 
Q Mr, McFarlane testified, I believe, at public 
hearings that he did not recall ever having seen that 
memorandum. 

A I noted his testimony with a great deal of interest. 
Q Why would North, to your knowledge, have cut off 
the letterhead and routing information? 

A I don't know, to be absolutely honest with you. 
Q Were there memoranda that you did circulate to 
Colonel North, either in draft stage or final form? 

A I don't recall ever giving him a final form, but 
you came up with two different memoranda in his files which 
I did provide for any input he may have wanted to give me on 
that. I did not recall those until you ccime up with those. 
Q Did you ever hear from anyone in the NSC or West 
Wing in response to memoranda circulated? 



UMALAWUatlL 



960 



im^»T 



68 



A Typically, when we sent something to the National 
Security Advisor, we never heard back anything. That was the 
most typical, I can't recall ever having heard back. Once 
it goes, I can't recall an instance of ever having heard back. 
MR. KAPLAN: I have no further questions. 
BY MR. FEIN: 

Q Do you recall there being any statutes enacted 
since creation of the National Security Council of 1947 that 
attempted to restrict the President's use -- what I am asking 
is if the Boland Amendment applied to the NSC, would that 
be the first time, to your knowledge, in the history of the 
NSC Congress attempted to restrict — 

A I cannot think of a prior occasion. 

Q Are you aware of the general rule of statutory 
construction that a statute that proves to have a loophole 
is not to be amended by the Judiciary unilaterally, that if 
a statute proves to have flaws in it, it takes an amendment 
to the statute in order to cover activity? 

A I am generally aware of that, yes. 

Q Look at the Executive Order in Exhibit 14, the last 
page, 3.5, I believe it is B-116 is the numeration of the 
page number. It says "This order is intended to provide 
guidance and direction to the intelligence community", 
referring to Executive Order 12333. Isn't it true, in the 
definitional section of this Executive Order, the NSC is not 



1 iuUrllDi NaBvtiu eTT^ 



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UNCH^tlii^ 



69 



1 

2 
3 

4 
5 
6 
7 
8 
9 
10 

n 

12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 



aeemed within the intelligence community? 
A That is correct. 

Q So that, for instance, the special activities 
provisions would not apply to the NSC since the order only 
reaches entities within the intelligence conununity, as so 
defined? 

MR. KNAUER: Where is the intelligence community 
defined? 

MR. FEIN: In 3.4, subsection F on page B-115. It 
is the penultimate page of the Executive Order. Look at 3.4, 
the definitional section, and then you see subsection F, 
which defines intelligence community. 

THE WITNESS: What was the question again? 
BY MR. FEIN: 
Q Wouldn't it be true, the order, insofar as it 
controls special activities of the intelligence community, 
would have no effect at all insofar as the NSC is concerned 
because it is simply not a member of the intelligence 
community as defined in the order? 

A That would certainly be an interpretation, yes. 
Q Is there any ambiguity to that? It is pretty 
specific when it defines intelligence community, isn't it? 
A Right. 
Q It enumerates seven specific entities, none of which 



includes the NSC. 



il&inUC£lClCD_ 



962 



\mmw 



70 



A Right. Actually, more than seven entities since it 
has a service organization. 

Q Are you aware of interpretations of the statutory 
requirements that compel the President to report to Congress 
on certain covert activities, that the requirements would not 
apply if the President is exercising inherent Constitutional 
power to implement national security? 

A Right. 

Q And, lastly, are you aware of a rule of statutory 
construction that statutes should be interpreted whether or not 
one statute repeals another so that an intelligence oversight 
act providing for an authorization, although it is not, may 
not repeal an appropriations bill, if it deals with and 
addresses the same subject under the rule of interpreting 
statutes, one would provide a loss on the other? 

A I am aware of that. 

MR. FEIN: That is all I have. 

MR. LEON: Let me just ask a few questions. 

BY MR. LEON: 

Q At the time you wrote this opinion, who were the 
members of the President's Intelligence Oversight Board? 

A Dr. W. Lynn Campbell and the two members are 
Charles Myer and Charles Tyroller, the second. 

Q You said Charles Myer, is that right? 



Right, 



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963 



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 



smm 



71 



Q Wasn't he the Dean of Stanford Law School? 

A Former Dean of Stanford Law School, and accomplished 
scholar, legal scholar. 

Q What is his field of scholarship, if you know? 

A I don't know. He is in private practice now. 

Did you submit this opinion when you wrote to him? 
Yes, I did. 

Do you know if he wrote it? 

We invariably sflt around the table and went through 
drafts before they leave our office. He did indeed read it. 
He asked questions, comments, or whatever. I don't specifi- 
cally remember what was said, but he certainly would have 
read it and approved it. 

Q And the other gentleman's name, again? 

A Charles Tyroller and Dr. W. Lynn Campbell. 

Q With regard to Tyroller, what is his background? 

A Director of the Committee on Present Danger 
Bipartisan Group, here in Washington, of National Security 
Council. 

Q Is he a lawyer? 

A No, he is not. 

Q How about the other gentleman? 

A He is an economist. He is the Director of the 
Hoover Institution at Stanford University and scholar of some 
note. 



IIMfiUC^QJnUU 



964 



msmw 



72 



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 



Q Your opinion is dated September 12, and, to the 
best of your recollection, how far in advance of that opinion 
September 12, did you meet with Mr. North? 

A I would think — again, I don't have it in my 
calendar, and I don't recall — but it was late August or 
early September, I just don't know. 

Q And before you met with Mr. North, I believe you 
testified you never met Mr. Thompson? 

A I don't recall the sequence I met with. 

Q Would it have been the approximate time, the two 
meetings? 

A I think, approximately. 

Q When you met with Mr. Thompson, did Mr. Thompson 
indicate to you the documents he was presenting you to review wa; 
the same stack of documents that had been presented to the 
White House Counsel's office, in particular Mr. Fielding*? 

A Fielding's* name did not come up, neither did the 
White House Counsel's office. 

Q Did not come up. So as of the time when you wrote 
your opinion, you have no knowledge as to whether or not any 
of the documents you have reviewed were looked at by White 
House Counsel. 

A That is true. 

Q If they had been looked at by the White House 
Counsel's office — let's put it this way. If you had been 



UMPiA^SIClFn_ 



965 



drg-24 

1 

2 

3 

4 

5 

6 

3otson/drg 7 

end 
Thomas fols. 8 

9 

10 

It 

12 

13 

14 

15 

16 

17 

18 



um^ffi^ 



73 



told they had been looked at by White House Counsel's office, 
would you have talked to them about it? What would you have 
done? 

A The exhibits in here? 

Q Yes. 

A It is possible I would have gone and talked to him. 



iiiim<uupm» 



966 






74 



Q Did you happen to hear Mr, McFarlane's testimony 
when he was on the stand? 

A Yes, I heard some of it. 

Q Mr. McFarlane, I believe it is my recollection, 
testified that he did meet at one point with Mr. Fieldingf 
personally? 

A Yes. 

Q And presented him a stack of documents, which 
included, according to his testimony, the very documents 
here that were not, to the best of your recollection, not 
shown? 

A Right. 

Q And that he testified that while he didn't pull 
them out separately and present them to Mr. Fieldinoi, he 
did have them in that pile and made reference to them just 
in general terms. Now, was there ever brought to your 
attention back at, in the time frame 

A No. And I wasn't fauniliar with that testimony 

by McFarlane, 

Q What is the relationship, if any, with the White 
House Counsel's office and your office, your role? 

A Well, we have an independent status at the White 
House. We report directly to the President on matters 
of intelligence, and if Fielding wanted to offer up an 
opinion of his own on a matter that he thought was important 



lUJTiAiCAlClCa,. 



967 



jm 2 



u 



lil^S^tilikT 



75 



to have input on, he certainly could, just like the NSC 
General Counsel could issue an opinion on the same subject 
matter. 

Q In the time you have been there, almost three 
years now 

A Yes. 

Q Has there ever been an occasion when either the 
White House Counsel himself, or one of his staff lawyers, 
called you up, your office, to try to get you to help them 
with a problem relating to anf intelligence oversight? 

A I can never recall any instance. 

Q How about the other way around, are there instances 
since you have been there, where you in the process of either 
investigating a problem or in the process of writing an 
opinion based on your investigation, turned to them for 
help? 

A I can't recall an instance. 

Q For insight and assistance? 

A No. 

Q In the writing of your opinion, I believe you 
testified that it was based on your research and investiga- 
tion; is that right? 

A That is right, 

Q Did you at any time, either prior to writing it or 
after writing it, suggest to anybody over at the White House, 
that they may want to aet the ooinion on this very issue. 



968 



ttNtUSStPEST 



the applicability of Boland, that they might want to get 
the opinion of the White House Counsel's Office, or the 
Office of Legal Counsel, Department of Justice? 

A I did not imagine a suggestion like that. 

Q Did anybody tell you that they were going to seek 
such an opinion from either the White House Counsel's 
Office of the Office of Legal Counsel at the Department 
of Justice? 

A No. 

Q Does that strike you as strange? 

A It does strike me a little bit strange that in the 
course of the investigation I have seen little else 
written on the applicability of the Boland Amendment to the 
NSC? 

Q The NSC isn't specif ically mentioned in the Boland 
Amendment, as we have pointed out? 

A I think we have established that. 

Q And 1 think you have commented to the effect and 
testified that had it been specifically mentioned there might 
have been some problem with getting enough votes perhaps? 

A That is one inference you can draw. 

Q To pass the amendment — let me ask you this, if 
it has been included, if it had gotten enough votes to 
pass, do you think there would have been some kind of 
a constitutional challenge or question raised as to whether 



UftUljJi£«u:u:A, 



969 



imjttsssffifeT 



Congress could have extended its powers in this arena 
in that manner? 

A Although my memo obviously did not address that 
issue, it would have been of questionable constitutionality. 

Q Do you think that would have been pursued and 
challenged? 

A I can't speak for the White House as a whole, or 
NSC; I would think so. 

Q Let me put it to you another way. Had it been 
included specifically, do you think, in essence, Congress by 
doing so would have been, in essence, creating the. likelihood 
of some kind of constitutional challenge in the courts? 

A Sure, I think so. 

Q Perhaps, even in the United States Supreme Court? 

A I think it would have to go up to that level. 

Q Do you have any reason to think that by not 
including it, Congress wanted to avoid ^i^KUiim^ that kind of 
constitutional challenge in the United States Supreme 
Court? 

A That is a possibility, I can't look into the 
minds of Congress, and I didn't seek out a referendum on the 
Hill before I wrote the memo, as to why they put it one way 
as opposed to another. 



iibim.^EiEJi. 



970 



UNttRSSfflSET 



EXAMINATION ON BEHALF OF THE HOUSE SELECT COtllllTTEE 
BY MR. FEIN: 
Q Certainly any ambiguity in the statutes should be 
interpreted to avoid constitutional inclinations of the 
type that would be implicated if there was explicit including 
of the NSC in the Boland Amendment? 
A That is right. 
EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 
BY MR. LEON 
Q Now, you have been presented with those documents - 
that were not included to you. Do you have any knowledge 
as to whether or not those were purposely not presented to 
you. 

A I have no knowledge about that. You would have 
to ask the people at the NSC. 



Mr. Thompson? 

That is correct. 

Admiral Poindexter? 

That is right. 

Do you have any evidence to indicate that they 
were purposefully kept from you? 

A I don't have any evidence one way or the other. 
Q So it could have been negligence or it could 
have been purposefully? 
A That is true. 



UmH^SlEiEfi. 



971 



tm$siei»T 



Q With respect to Colonel North and your discussion 
with him, certainly Colonel North didn't volunteer 
when he talked with you, if I understand your conversation 
with him, any of the information contained in those documents 
did he? 

A No, he didn't. 

Q Did you feel that your questioning of him was such 
that he should have been expected to volunteer things along 
these lines? 

A I would have to review the documents to see if he -• 
I can't look into the mind of Colonel North. 

Q I guess what I am getting to, Mr. Sciaroni, 
do you feel in hindsight, having reviewed those documents, 
that Colonel North offered, and was familiar with clearly, 
do you feel that he did deceive you, if you have an opinion? 
I don't know if you have an opinion. 

A Well, I don't think I would want to address the 
issue. It is better put to Colonel North as to why he 
didn't draw my attention to certain things that he was 
doing, whether he thought that, I just don't know what he 
thought ahout that. 

Q Do you have any knowledge of Colonel North, 
subsequent t