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

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Y l.l/2:Serial 13756 

United States Congression... 






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



Senate Report 

No. 216 




IRAN-CONTRA INVESTIGATION 

APPENDIX B, VOLUME 15 
DEPOSITIONS 



United States Congressional Serial Set 

Serial Number 13756 



United States Government Printing Office 
Washington : 1989 



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



Report of the Congressional Committees Investigating the 

Iran-Contra Affair 



Appendix B: Volume 15 
Depositions 



Daniel K. Inouye, Chairman, 
Senate Select Committee 

Lee H. Hamilton, Chairman, 
House Select Committee 



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

On Secret Military Assistance to Iran Select Committee to Investigate 

And the Nicaraguan Opposition Covert Arms Transactions with Iran 

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

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

November 17. 1987. -Ordered to be printed. 



Washington : 1988 



DANItl It INOVT^E HAWAII CMAJRMAN 



SAU NOtaN GIOnC'A 
^AUl 1 SAMtANtS MAMTLAMD 
xOWtll t H<ri'N ALAIAUA 
DAVID L lOWN OKLAHOMA 



*^SHi«t vic( Chairman 

JAMIS* M<CLU«U IDAHO 
OOOlN C HATCH UIAH 
WHUAMS COHIN MAINE 
^AUi S tPieiE J« VIRGINIA 



MARR A IIINICI »A0l BARtADOnO 

IXICUTIVI ASSISTANT Dt^uTY Cm£» COuNStL 

TO tH( CHiff COUNStl 



CH AIBMiChT ja 
OANItL MNN 

JAMIS t UnAN 



ASSOCIATE COUNSELS 

JOH P KSKER 
RiCHAAO PARRT 

john d sax on 
terrt a smiljanicm 
Timothy c woodcock 



United States 3oiate 

SELECT COMMITTEE ON SECRET MILITARY 

ASSISTANCE TO IRAN AND THE NICARAGUAN OPPOSITION 

WASHINGTON. DC 20510-6480 



March 1, 1988 

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

Dear Mr. President: 

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



Sincerely, 




i/cui^ 



Warren B. Rudman V^^ 
Vice Chairman 



III 



Lfl H hamhtdm iiiicuana chairman 

OAMTI • lASCill llOKOA Vict 
THOMAS S 'out WASMINCrON 
rftfMW KOOINO 11 Nfwjtnsiv 
MCs laoocs TIUS 
lOuit Sro«(S Ohio 
lis AS^N WISCONSIN 
lOAAROf eOLANO UASSACNUSETIS 
10 JtNKiNS C£OIW,tA 



JOHN W NrtlDS jn CHItf COUNSEL 

W Nlll fCClfSTON OEfUTT CHIlf COUNSEL 

CASir WillER ST*« WRECTOIt 



U.S. HOUSE OF REPRESENTATIVES 

SELECT COMMITTEE TO INVESTIGATE 

COVERT ARMS TRANSACTIONS WITH IRAN 

UNITED STATES CAPITOL 

WASHINGTON. DC 20515 

(202) 225-7902 



Diet cmsfy SVTOMING 
WM S BROOMflflO MICHIGAN 
HENflT J H»OI aiiNOIS 
JIM COuntER NEW .JERSEr 

eui McCoiiuM Florida 

M'CHAEl DlWINE OHIO 

THOMAS n SMEETQN MINORITY STA'I OIRECTOK 

GEORGE VAN CI Eve CHItF MINOR'TY COUNSEL 
MCHARD lEON OfPUTT CHIEF MINORITY COUNSEL 



March 1, 1988 



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

Dear Mr . Speaker : 



Pursuant to the provisions of House Resolutions 12 and 
330 and House Concurrent Resolution 195, 100th Congress, 1st 
Session, I transmit herewith Appendix B to the Report of the 
Conqressional 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 fq,p-^f elease to the public. 

yours , 




Lee H. Hamilton 
Chairman 



United States Senate 

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

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

George J. Mitchell, Maine 

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

James A. McClure, Idaho 

Orrin G. Hatch, Utah 

William S. Cohen, Maine 

Paul S. Trible, Jr., Virginia 



Arthur L. Liman 
Chief Counsel 

Mark A. Belnick Paul Barbadoro 

Executive Assistant Deputy Chief Counsel 

To the Chief Counsel 

Mary Jane Checchi 
Executive Director 

Lance I. Morgan 
Press Officer 



VI 



United States House of Representatives 

Select Committee to Investigate Covert Arms 
Transactions with Iran 

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

Thomas S. Foley, Washington 

Peter W. Rodino, Jr., New Jersey 

Jack Brooks, Texas 

Louis Stokes, Ohio 

Les Aspin, Wisconsin 

Edward P. Boland, Massachusetts 

Ed Jenkins, Georgia 

Dick Cheney, Wyoming, Ranking Republican 

Wm. S. Broomfield, Michigan 

Henry J. Hyde, Illinois 

Jim 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. Ken- 
Joel P. Lisker 



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



Committee Staff 



Assistant Counsels 



Legal Counsel 
Intelligence /Foreign 

Policy Analysts 
Investigators 



Press Assistant 
General Accounting 
Office Detailees 



Security Officer 
Security Assistants 



Chief Clerk 
Deputy Chief Clerk 



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

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

Marshall 
Georgiana 

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



Staff Assistants 



Administrative Staff 



Secretaries 



Receptionist 
Computer Center 
Detailee 



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

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

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 
Eieanore Hill 
Jeffrey H. Smith 
Frederick Millhiser 
Thomas J. Young 



Senator Boren 

Senator McClure 
Senator Hatch 

Senator Cohen 

Senator Trible 



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



Part Time* 



Assistant Counsel 
Hearings Coordinator 
Staff Assistants 



Interns 



Peter V. Letsou 
Joan M. Ansheles 
Edward P. 

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

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



Document Analyst 

Historian 

Volunteers 



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



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



IX 



United States House of Representatives 



Select Committee to Investigate 
Covert Arms Transactions with Iran 



Majority Staff 



Special Deputy 

Chief Counsel 
Staff Counsels 



Press Liaison 
Chief Clerk 
Assistant Clerk 
Research Director 
Research Assistants 



John W. Nields, Jr. 
Chief Counsel 

W. Neil Eggleston 
Deputy Chief Counsel 

Kevin C. Miller 
Staff Director 



Charles Tiefer 

Kenneth M. Ballen 
Patrick J. Carome 
V. Thomas 

Fryman, Jr. 
Pamela J. 

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

Birmann 
Julius M. 

Genachowski 
Ruth D. Harvey 
James E. Rosenthal 



Systems 

Administrator 
Systems 

Programmer/ 

Analysts 
Executive Assistant 
Staff Assistants 



Catherine L. 

Zimmer 
Charles G. Ratcliff 
Stephen M. 

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



Minority Staff 



Associate Minority 

Counsel 
Assistant Minority 

Counsel 
Minority Research 

Director 



Thomas R. Smeeton 
Minority Staff Director 

George W. Van Cleve 
Chief Minority Counsel 

Richard J. Leon 
Deputy Chief Minority Counsel 



Robert W. 
Genzman 
Kenneth R. Buck 

Bruce E. Fein 



Minority Staff 
Editor/Writer 

Minority Executive 
Assistant 

Minority Staff 
Assistant 



Michael J. Malbin 

Molly W. Tully 

Margaret A. 
Dillenburg 



Committee Staff 



Investigators 



Director of Security 



Robert A. 

Bermingham 
James J. Black 
Thomas N. 

Ciehanski 
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 15 



Preface XXI 

Koch, Noel C 1 

Kuykendall, Dan H 239 

Langton, William G 479 

Lawn, John C 731 

Leachman, Chris J., Jr 871 

Ledeen, Michael A 941 



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. 
Bamett, Ana. 
Bartlett, Linda June. 
Bastian, James H. 
Brady, Nicholas F. 
Brown, Arthur E., Jr. 



Volume 3 



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



Volume 4 



Channell, Carl R. 

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

Chatham, Benjamin P. 

CIA Air Branch Chief. 

CIA Air Branch Deputy Chief. 

CIA Air Branch Subordinate. 

CIA Chief. 

CIA 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. 

Cast, 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. 



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



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



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



Volume 15 



Volume 16 



Volume 17 



Volume 18 



XVIII 



Volume 19 



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 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). 



Rugg, John J. 
Russo, Vincent M. 
Sanchez, Nestor. 
Scharf, Lawrence. 
Schweitzer, Robert : 
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 24 



Volume 25 



Volume 26 



Volume 27 



Thurman, Gen. Maxwell. 

Trott, Stephen S. 

Tull, James L. 

Vessey, John. 

Walker, William G. 

Watson, Samuel J., IIL 

Weinberger, Caspar. 

Weld, William. 

Wickham, John. 

Zink, Gregory (See Alfred Clark). 



XX 



Preface 



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

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

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

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

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

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

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

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

In these Depositions volumes, some of the deposition transcripts are follow- 
ed by exhibits. The exhibits -documentary evidence- were developed by Select 
Committees' staff in the course of the Select Conmiittees' 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 



1 



JiNCLAS SIFiED __ 

Stenographic Transcript of ^^ 
HEARINGS 
Before the 



SELECT COMMITTEE ON SECRET MILITARY ASSISTANCE 
TO IRAN AND THE NIGARAGUAN OPPOSITION 



UNITED STATES SENATE 

TESTIMONY OF NOEL C. KOCH 
Wednesday, May 20, 198T 



Partially Declassified/Released on l±Jf_^-, 
under provisions of E 0. 12356 
by N. Menan, National Security Council 



UNCLASSIFIED (SOiX; 



Washington. D.C. 




AR 



ALD£=SCN -EPCPiriG ^^ ^~~~-l':^:zX , rowFy 



(202) 623-9300 
20 F STREET, N.W. 



82-716 0-88-2 



UNei^SStRED 



1 TESTIMONY OF NOEL C. KOCH 

2 Wednesday, May 20, 1987 

3 United States Senate 

4 Select Committee on Secret 

5 Military Assistance to Iran 

6 and the Nicaraguan Opposition 

7 Washington, D. C. 

8 Deposition of NOEL C. KOCH, called as a 

9 witness by counsel for the Select Committee, at the 

10 offices of the Select Committee, Room SH-901, Hart Senate 

11 Office Building, Washington, D. C. , commencing at 1:30 

12 p.m., the witness having been duly sworn by RAYMOND R. 

13 HEER, III, a Notary Public in and for the District of 

14 Columbia, and the testimony being taken down by Stenomask 

15 by RAYMOND R. HEER, III and transcribed under his 

16 direction. 
17 



UMCOSSIf^ED 



UN(^ASStFSED 



1 APPEARANCES: 

2 On behalf of the Senate Select Committee on Secret 

3 Military Assistance to Iran and the Nicaraguan 

4 Opposition: 

5 JOHN SAXOM, ESQ. 

6 On behalf of the House Select Committee to 

7 Investigate Covert Arms Transactions with Iran: 

8 ROBERT W. GENZMAN 

9 ROGER L. KREUTZER 

10 ' JOSEPH SABA 

11 On behalf of the witness: 

12 ROBERT M. ADLER, ESQ. 

13 Ninth Floor 

14 1667 K Street, N.W. 

15 Washington, D. C. 20006 
16 



UNCLASSIFiED 



UNCi^SmED 



1 








C 





N 


T 


E 


NTS 


2 


















EXAMINATION ON BEHALF OF 


3 


WITNESS 














SENATE HOUSE 


4 


Noel 


C. Koch 
















5 




By Mr. 


Saxon 












4 


6 




By Mr. 


Saba 












79 


7 




By Mr. 


Kreuzer 












97 


8 




By Mr. 


Saxon 












102 


9 




By Mr. 


Saba 












124 


10 




.- 




E 


X 


H 


I 


B 


ITS. 


11 


KOCH 


EXHIBIT 


NUMBER 












FOR IDENTIFICATION 


12 




1 














9 


13 




2 














26 


14 




3 














59 


15 




4 














65 


16 




5 














70 


17 




6 














118 


18 




7 














120 



UMOlASSlflED 



liNOLA^SIffED 



1 PROCEEDINGS 

2 Whereupon, 

3 NOEL C. KOCH, 

4 called as a witness by counsel on behalf of the Senate 

5 Select Committee and having been duly sworn, was examined 

6 and testified as follows: 

7 EXAMINATION ON BEHALF OF THE SENATE COMMITTEE 

8 BY MR. SAXON: 

9 Q If you would, sir, please state your name. 

10 ■ A My name is Noel Koch. 

11 Q And what is your current employment? 

12 A I'm the president of International Security 

13 Management. 

14 Q And what is the nature of that business? 

15 A That deals with security for international 

16 corporations, private families and people who may be 

17 subjected to terrorist and other kinds of threats. 

18 Q And where is that located? 

19 A It's located in Arlington, Virginia. It has 

20 offices in Europe and the Middle East. 

21 Q What were you doing previous to this position? 

22 A I was the Principal Deputy Assistant Secretary 

23 of Defense for International Security Affairs. 

24 Q That would have been March of 1981 until May 

25 30, 1986? 



UNCtftSStflfD 



ON^ASSfFlfD 



1 A That is correct. 

2 Q And did you have other positions co-extensive 

3 with that one? 

4 A That is right. I had also the position of 

5 Deputy Assistant Secretary for Africa Region, and I was 

6 the Director for Special Planning. 

7 Q And to whom did you report in those positions? 

8 A As the principal Deputy and the Deputy 

9 Assistant Secretary I reported to the Assistant Secretary 

10 of De'fense for International Security Affairs. As the 

11 Director for Special Planning I reported to the Under 

12 Secretary for Policy and frequently to the Secretary. 

13 Q And who was the Assistant Secretary for 

14 International Security Affairs? 

15 A Richard Armitage. 

16 Q During that entire period? 

17 A No, not during that entire period. He came 

18 in, I think, in '83, probably, late '82- '83. 

19 Q He was preceded by Mr. West? 
2 A Preceded by Mr. West. 

21 Q That is Bing West? 

22 A That is Francis something or another West. 

2 3 Q And who was the Deputy Under Secretary to whom 

2 4 you reported? 

25 A I misspoke. It's the under Secretary. 



UKCkASSt^^D 



UNCkftSSmED 



1 • Q That would be Dr. Fred Ikle? 

2 A Fred Ikle, right. 

3 Q And to whom did you report with regard to your 

4 terrorism duties? 

5 A To Dr. Ikle. 

6 Q And tell us a bit about what that portion of 

7 the job entailed. 

8 A I had responsibility for policy related to 

9 counterterrorism capabilities, which addresses 

10 essentially reaction to a terrorist event and rescue of 

11 victims, and finding other ways to make life inconvenient 

12 for terrorists. At the same time I did that umbrella was 

13 antiterrorism activities which we construed to mean 

14 defensive actions, which can be hardware, anything from 

15 fences to training people to what things to look for, 

16 what things to try to avoid to keep themselves from 

17 becoming victims of terrorist events. 

18 In addition, I also had responsibility for the 

19 restoration of our special operations forces. 

20 Q Who was your principal point of contact at the 

21 White House for your terrorism activities? 

22 A Well, it varied. In fact, it was the subject 

23 of a great deal of controversy within the Administration. 

24 There was an issue — I guess it changed over time, John. 

25 When Mr. Clark was there, I guess I would have said it 



UNglftSSIFSED 



8 



{illOmSMD 



1 would have been John Poindexter. It seems to me John was 

2 there at the time. 

3 Q When Judge Clark was the National Security 

4 Advisor his military assistant was Admiral Poindexter? 

5 A That's my recollection because I recall 

6 Poindexter being there from the time we began to have any 

7 controversy about the necessity of putting the capability 

8 in the white House, that Admiral Poindexter was involved 

9 in that. 

10 ' Q Did there come a point at which your principal 

11 point of contact would have been Colonel North? 

12 A That came about later. 

13 Q Okay. If you would, start at the beginning of 

14 the story in terms of your involvement with the Iran arms 

15 shipment side of these matters and walk us through that, 

16 if you would. 

17 A My involvement with the arms shipments to Iran 

18 began in early November, as best I can reconstruct it. 

19 Q November of? 

20 A November 1985. 

21 Q And how did they begin? 

22 A They began with a call from the military 

23 assistant to the Secretary of Defense, General Powell. 

24 He asked me to find out how many HAWKs we had in 

25 inventory and where they were. 



UN6Lil&SlfiED 



i/WCt#SSfF?EO 



8 



1 Q That's HAWK missiles? 

2 A Yes, sir. And where they were. And my 

3 recollection is not clear whether I was asked about the 

4 cost or not, but the concern was the number. 

5 Q At that point did General Powell tell you 

6 their ultimate destination? 

7 A He did not. 

8 Q And did you ask? 

9 A I did not. 

10 Q Was Israel mentioned as a possible go-between? 

11 A There was no mention of a go-between because 

12 there was no discussion of where they were going. It was 

13 just a simple question. It could have been related to 

14 anything. 

15 Q And wh3it did you do then after General Powell 

16 gave you that requirement? 

17 A I called someone in the Defense Security 

18 Assistance Agency, Dr. Hank Gaffney, and asked him how 

19 many HAWKs we had, and I got the answer and I relayed it 

20 to General Powell. 

21 Q Do you recall what that answer was? 

22 A It was, as I recall, it was a fairly gross 

23 answer, but I think it was something in the vicinity of 

24 ^^^^1 that were on hand, and then we had so many in depot 

25 and so many in t.he pipeline. 



imetftSstF^D 



10 



UJiCLASS(FJ£0 



1 Q I believe you told us before it was something 

2 in the neighborhood °1^^^^^^| Does that sound about 

3 right? 

4 A It would have added up, once you took what was 

5 being repaired and it would go in excess of that if you 

6 considered what was in the pipeline. Do you understand 

7 what I'm talking about? 

8 Q Yes. And did Dr. Gaffney give you that in the 

9 form of a verbal response or something that was written? 

10 ' A I think the initial response was verbal and 

11 then there was a follow-up. 

12 Q Do you recall whether you and Dr. Gaffney 

13 speculated about why this requirement was being imposed 

14 or where they might be going? 

15 A No, we had no speculation initially. 

16 Q Was there a point at which your best 

17 recollection is that Dr. Gaffney gave you something in 

18 writing? 

19 A Yes. It was a refined assessment of this and 

20 it would have been within a reasonably short period of 

21 time, but I don't know exactly when it was. 

22 Q Let me show you what I would like marked as 

23 Deposition Exhibit 1. 

24 (The document referred to was 

25 marked Koch Exhibit Number 1 



yWCmSTFlED 



11 




T/CODEWORD 10 



1 for T.9feWif ication. ) 

2 Take a moment, if you would, to look at that. 

3 (Pause.) 

4 A His own notes I wouldn't have seen in any 

5 event, I'm sure, and I don't remember this document. It 

6 doesn't have adding on it. 

7 Q The heading is slightly obscured due to 

8 numerous instances of photocopying, but it says at the 

9 top Point Paper, right up above, HAWK missiles for Iran. 

10 .A There is no addressee, no signature on it. 

11 Q That is correct. Do you recall having seen 

12 the point paper itself prior to today? 

13 A I know that Hank brought back a paper. 

14 Whether it was this one or not, I don't recall. 

15 Q Let me walk you through, if I can, some of the 

16 statements in it, and while I understand you are saying 

17 that you may not have seen this particular document 

18 before today I would really like to have you comment on 

19 some of the statements which he makes. 

20 This is, as he says in his cover note, written 

21 on Defense Security Assistance Agency letterhead and 

22 dated 12 December 86, he recalls that the talking points 

23 were prepared by him on or after 19 November 85, at the 

24 request of either you or at the request of you and 

25 General Colin Powell, and he says they were furnished to 



UltCLASSIF?ED 



12 



UN£lASSIEe) 



11 



1 you to take to General Powell. 

2 A Right. 

3 Q On page one of the point paper, with the 

4 heading HAWK Missiles for Iran, he says the missiles at 

5 Red River Arsenal cost $300,000 apiece and replacements 

6 could cost as much as $437,000. Does that roughly 

7 comport with what you know to be -the price of a HAWK? 

8 A Yes, I thought, my recollection was it was 

9 somewhere in the area of $440,000 and change, so that 

10 would be right. 

11 Q About halfway down the page he mentions 

12 modality is for sale to Iran, and he says that Iran is 

13 not currently certified for sales, including indirectly 

14 as a third country, per section 3 of the AECA, which 

15 would be the Arms Export Control Act. Would that be 

16 consistent with your understanding of the law and policy 

17 at the time? 

18 A Yes, it would be. 

19 Q The next paragraph, the paper states: 

20 "Congress must be notified of all sales of $14 million or 

21 more, whether it is a direct sale or indirect to a third 

22 country, and the sale cannot take place until 30 days 

23 after the notice." Does that seem to be a correct 

24 statement of the Arms Export Control Act and the 

25 reporting requirements? 



bKCIlASStfi^ 



13 



UN0ki^lil£O 



12 



1 A That is my understanding. 

2 Q Below that he says "even if the missiles were 

3 laundered through Israel Congress would have to be 

4 notified." Does that seem to be correct, as best you 

5 recall? 

6 A I would not know that. 

7 Q He says "it is conceivable that the sale could 

8 be broken into three or four packages in order to evade 

9 Congressional notice", and then he goes on to say "while 

10 there 'is no explicit injunction against splitting up such 

11 a sale, the spirit and the practice of the law is against 

12 that." Do you have any knowledge yourself of whether 

13 that statement is a fair statement of the practice as you 

14 knew it? 

15 A That is my understanding. 

16 MR. ADLER: Are you asking for his legal views 

17 at the time? 

18 MR. SAXON: Just his best understanding as an 

19 administrator who had DSAA under him, whether this seems 

20 to be -- I'm not asking for a precise legal -- 

21 BY MR. SAXON: (Resuming) 

22 Q I understand the question. I'm not asking for 

23 that, just whether this generally is consistent with what 

24 you understood at the time. 

25 A That was my understanding. 



(iNe^lASStF?ED 



14 



UN€LASStFI£D 



13 



1 Q The next page he talks about some of the 

2 political drawbacks to such a policy initiative, and he 

3 says "If Iraq ever found out, they would be greatly 

4 irritated" — and these are his opinions. Is that a 

5 statement with which you would probably agree? 

6 A Certainly. 

7 Q He says that Saudi Arabia and the other Gulf 

8 states would also be irritated and alarmed. Does that 

9 seem to be a fair statement? 

10 • A That's a fair statement. 

11 Q He says "If Israel were used as the laundering 

12 country they would be greatly encouraged to continue 

13 selling to Iran." Would you agree with that opinion? 

14 MR. ADLER: Is the question, is that his view 

15 now or was that his view at or about the time the memo 

16 was written? 

17 MR. SAXON: Mainly the latter, yes, 

18 THE WITNESS: I would not have agreed with 

19 that. I think the substance of these objections are to 

20 try to dissuade, to mount as many objections as possible. 

21 I think that is probably one of the lighter ones, that 

22 they wouldn't have needed any encouragement to do it if 

23 they felt they could or they felt like it. 

24 BY MR. SAXON: (Resuming) 

25 Q In his next statement he says: "If the sale 



^HCtftSStHtD 



15 



U1tCLASSI(i£D 



14 



1 became known that bars would be removed from sales by 

2 such countries as Spain, Portugal, Greece, the U.K., 

3 Italy, Germany." This has reference to our policy called 

4 OPERATION STAUNCH or our program to try to get our allies 

5 to cease sales to Iran. Would you more or less agree 

6 with that statement? 

7 A Absolutely. 

8 Q And then he says: "In short, the risk is that 

9 of prolonging and intensifying the Iran-Iraq war." What 

10 would be your sense? What would have been your sense at 

11 the time? 

12 A Well, I would have thought that that reflected 

13 his understanding of the correlation of forces, and it 

14 wouldn't necessarily prolong it unless you thought Iraq 

15 was strong enough to fight forever, that it might have 

16 the effect of shortening it. 

17 Q Do you recall having given him any 

18 instructions when you talked with him to prepare a 

19 document, a talking point paper, with the express 

20 intention of coming out on the negative side, to try to 

21 shoot down the initiative? Do you have any recollection 

22 of that? 

23 A I don't have a recollection of it. I 

24 disapproved as much as I understood it with what was 

25 going on and I was preaching to Jt^g^hoir, as it 




16 



UNCLASSISiED 



15 



1 happened, within the Pentagon, because everybody 

2 disagreed with it. But I don't remember that I told Hank 

3 to prepare a document. I could have done this as well as 

4 Hank. If I were going to, I would have, but I may have 

5 said -- you know, I just don't have a recollection that I 

6 did that, but that wouldn't be unusual. 

7 Q Okay. At the point at which Dr. Gaffney got 

8 back to you with his initial assessment of the numbers 

9 and the inventory, et cetera, did you then go back to 

10 General Powell with that information? 

11 A I'm sure I did. 

12 Q And do you recall anything about that 

13 conversation — what you would have said, what he would 

14 have said? 

15 A Well, to try to go back a little bit here, I 

16 mean, there was the initial request and then I would have 

17 gone back, and I don't recall that I asked him questions 

18 or that he proffered any explanations at that point. As 

19 I said, some document came back. Whether it was this one 

20 or another one, I don't know. I'm sure it's this one. 

21 But at some point not too deep into this 

22 procedure he did tell me what it was about, and the 

23 reason I am a little nonplussed is that I was not aware 

24 that at what point Hank became witting of the objective. 

25 Q My understanding is that when you got back 



UNCLtSStFtED 



17 



lJNe4ASSIfl£9 



16 



1 with General Powell for the second conversation, at least 

2 the second one we've discussed this afternoon, after 

3 having gotten a response from Dr. Gaffney, that whether 

4 you asked or he volunteered, in any event he told you 

5 that these were going to Iran. Is that your best 

6 recollection? 

7 A That is correct. 

8 Q Do you recall any reaction? 

9 A Yes. I said it was insane and we needed to 

10 stop it. 

11 Q Do you recall what his feelings were, whether 

12 they were consistent with yours? 

13 A They were consistent with mine. 

14 Q So he likewise would have been outraged, 

15 upset, disturbed, bothered? 

16 A Correct, yes. 

17 Q Do you recall whether you asked if Secretary 

18 Weinberger knew about this? 

19 A In fact, I did, yes. 

20 Q And what was his answer? 

21 A I think he said yes and that he was equally 

22 disturbed about it. 

23 Q And that he likewise opposed it? 

24 A That is correct. 

25 Q At that point was it your understanding that 



uNcrrar^ED 



18 



UNCl/tSSfFSED 



17 



1 these arms were to be sold to Iran or were they to be 

2 given? 

3 A Well, my understanding was fairly spotty at 

4 the beginning, and it may have accounted for my initial 

5 outrage about this, but I thought that they were to be 

6 given. 

7 Q So you would have viewed it as a ransom? 

8 A I would have viewed it as a ransom, correct, 

9 with virtually no redeeming virtues. 

10 'q Would you have gotten back with General Powell 

11 after getting the information from Dr. Gaffney, the same 

12 day, the next day, closely thereafter? 

13 A That would be a guess. I don't know. 

14 Q If you were asked to detail your objections at 

15 that time to this initiative, what would you have said 

16 they were? 

17 A That it completely undercut our position vis- 

18 a-vis our allies, who we had been beating on regularly 

19 about arms sales to Iran, that it would probably 

20 stimulate additional hostage-taking, that it was totally 

21 inconsistent with this minimal remnant of any policy that 

22 we had with regard to terrorism, which was a policy, by 

23 the way, with which I was not necessarily in agreement — 

24 this question of not making concessions. My sense would 

25 have been it might be useful to as a practical thing not 



i 



mci'JiSlEo 



19 



1 

2 
3 

4 
5 
6 
7 
8 
9 

10 

11 

12 

13 

14 

15 

16 

17 

18 
19 
20 
21 
22 
23 
24 
25 



HHCmsWRo 



18 



make concessions, but not make a big issue of this as a 
public matter. 

Our experience were statements of that sort 
had gotten our hostages killed in the past, but 
nevertheless this was our general position. It was the 
only little shred of cover we had of any pretense at a 
policy toward dealing with terrorism. It was what was 
left of swift and effective retribution, if you like. 

Q So, to make sure the record is clear, you are 
saying our stated policy was that we did not make 
concessions? 

A That is correct. 

Q Any other thoughts or objections? 

A No. We did not pay ransom, which is more to 
the point. The question of concessions gets to be 
semantical. You can differ on what that means. 

Q So you would have thought that it generally 
would have been counter to our terrorism policy? 

A Absolutely. 

Q Would it have been impolitic? 

A It would have been impolitic, yes. I want to 
be clear as we go on here that as this evolved I did not 
remain in the same position of obdurate opposition to 



this. 



I understand. But at the time I'm trying to 



UNiIlBSfnEO 



20 



UNCbASSifO 



19 



1 get a sense. 

2 A At the time my understanding was we were going 

3 to give these missiles to Iran to ransom hostages which 

4 Iran didn't even hold to begin with. 

5 Q Was it your understanding at the time, 

6 November of '85, that we had tried as best we could to 

7 make life difficult for the Iranians? 

8 A That is correct. 

9 Q And that we had tried as best we could to make 

10 it difficult for them to get arms? 

11 A That is correct. 

12 Q What would have been your understanding at the 

13 time in terms of U.S. policy toward trade with Iran in 

14 general? 

15 A My understanding was that we had no exchange 

16 in the area of lethal hardware, lethal materiel. I was 

17 not sufficiently familiar with our trade position to know 

18 whether there was any sort of non-lethal exchanges 

19 between us, and that we were also putting as much 

20 pressure as we possibly could on our friends, on anybody 

21 that was susceptible to our pressure, to not provide 

22 these things to Iran. 

23 Q In terms of arms, lethal materials, is it safe 

24 to say there was an embargo in effect at the time vis-a- 

25 vis Iran? 



UN€kASSIFiiD 



21 



liN€i4$SfFI€D 



20 



1 A That is correct. 

2 Q What would have been your view at the time if 

3 somebody asked you whether it was "legal" to sell arms to 

4 Iran? Here I'm not asking you for a legal opinion, but 

5 as an administrative official at the Pentagon what would 

6 have been your best sense? 

7 A I would not have known. I would have had to 

8 inquire. 

9 Q At what point do you recall Israel being 

10 mentioned in all of this? 

11 A I don't believe — I'm not sure I recall 

12 Israel being mentioned within the context of the 

13 discussion over the HAWKs. 

14 Q Do you recall there being any discussion with 

15 General Powell with regard to the HAWKs of a Presidential 

16 Finding pursuant to which the HAWKs might be delivered? 

17 A I don't remember that. 

18 Q What would you say, then, in chronological 

19 sequence came next? You have spoken to Dr. Gaffney. 

20 You've gotten some input. You've transmitted that to 

21 General Powell. What happens? 

22 A The matter of the HAWKs just went away and I 

23 don't recall at what precise point that happened. But my 

24 practice was not to try to be overly curious about what 

25 was going on. I assumed if people wanted me to know 



wwei/rssrfrj£o 



22 



UNCbASSll4ED 



21 



1 something they would tell me. The things I needed to 

2 know I would ask about, but this was not one of them. 

3 And so I didn't dig around to try to find out 

4 what had happened to the HAWK deal, why I wasn't being 

5 consulted further or anything else. It just went away. 

6 Q In terms of the HAWKs, is it fair to say that 

7 at this point there was no discussion of modalities of 

8 transfer, no discussion of FMS sales versus the Economy 

9 Act transfers from the CIA, et cetera? 

10 -A I have no recollections of those kinds or of 

11 that kind in relation to the HAWKs. 

12 Q Do you recall in relation to the HAWKs telling 

13 Dr. Gaffney that they were destined for Iran after you 

14 learned that from General Powell? 

15 A I do not recall that. 

16 Q Do you recall what numbers were being 

17 discussed, how many HAWKs to Iran? 

18 MR. ADLER: Discussed between himself and 

19 Powell? 

20 MR. SAXON: Yes. 

21 THE WITNESS: I guess — let's see. The 

22 information tended to dribble in. I don't know initially 

23 what I thought. what I have in my mind is that we were 

24 looking at something that totalled out to a quarter of a 

25 billion dollars and I don't know why I had that. But in 



GflCtllSStFtED 



23 



UNCtftSSIftED 



22 



1 the end, as I recall, we were looking at something on the 

2 order of 500, I think. 

3 BY MR. SAXON: (Resuming) 

4 Q Do you recall discussing in November '85 vis- 

5 a-vis the HAWKs the issue of Congressional notification 

6 with General Powell? 

7 A I do not, no. I may have. I don't remember. 

8 Q And I believe you stated with reference to 

9 Exhibit 1, Dr. Gaffney's point paper, that you did 

10 understand that any sales in excess of $14 million would 

11 require notification of Congress; is that correct? 

12 A That's right. 

13 MR. ADLER: Just so that the record is clear, 

14 it is my understanding from his testimony that that 

15 Exhibit 1 was not a document that he could identify as 

16 having seen but it was the point within the document 

17 which he has confirmed as being his understanding at the 

18 time. 

19 MR. SAXON: Sure. And, to make it clear for 

20 the record, from our standpoint I am not asking you to 

21 verify the accuracy of any representations Dr. Gaffney 

22 made, simply to ask you if it seemed consistent with what 

23 you knew or understood at the time. 

24 THE WITNESS: Sure. 

25 BY MR. SAXON: (Resuming) 



OflCtASStFlED 



24 



\JN(H.ftSSJE;£0 



23 



1 Q What do you recall being the nature of your 

2 first discussion with Colonel North about any of these 

3 matters as opposed to strictly your discussions on 

4 terrorism matters and when might such a discussion have 

5 taken place? 

6 A This is the best I can reconstruct. I think 

7 it was in December. 

8 Q Of '85? 

9 A Of '85, and I think that it came in a secure 

10 call from, probably from Ollie to myself -- it could have 

11 been the other way. And there was a discussion of what 

12 this was all about. 

13 Q Let me interrupt for one second and see if I 

14 can help clean this up. Is it safe to say you had no 

15 discussions with Colonel North about the HAWKs? 

16 A I don't recall having one. I mean — well, up 

17 until this conversation that I'm discussing with you 

18 right now, I don't recall anything. 

19 Q Continue. 

20 A But when we finally talked — and again my 

21 recollection would be it would be December, and this 

22 seems to be borne out by this document here for reasons 

23 which I can explain — without trying to give a verbatim 

24 recounting of the conversation I can give you elements of 
2 5 it. 



U#CLA^ift£D 



25 



UNCLASSHO 



24 



1 It was to the effect I was very concerned 

2 about this, and said so. I saw it as purely a ransom 

3 deal. Now we are discussing the HAWKs for the first 

4 time, to my knowledge, and we're sort of discussing 

5 what's going on. 

6 Q Excuse me. You mean HAWKs or TOWs? 

7 A The HAWKs. And you would have to take these 

8 building blocks and reconstruct them and you get a 

9 conversation out of this thing, I guess. But one of the 

10 points that Ollie wanted to make I had myself and had had 

11 for many, many months -- more than a year or two years, I 

12 guess -- a great concern about the absence of any 

13 sensible policy toward the Gulf, toward Iran most 

14 particularly, and I felt that it was extremely dangerous 

15 and it was going to be extremely costly to us at some 

16 point down the road. 

17 I thought it was a luxury to effectively 

18 . improvise our way through anything as important as this. 

19 I thought that of the nations in the region that Iran was 

20 by far the most important from the purely geostrategic 

21 standpoint and that we needed to find some way to 

22 reconstruct our relationship. And furthermore I felt 

23 that it would be necessary to do that while Khomeini was 

24 still living. 

25 And this wasn't something I went out preaching 



UNOtftSSfflED 



26 



UfiObASSfflED 



25 



1 in the churches across the land, but it was internally my 

2 views, and it was shared by other people. There was 

3 objection to that at higher levels, but nevertheless that 

4 was known. And when we had this conversation it was to 

5 the effect of what the hell is going on. And Ollie 

6 agreed himself with this problem that we had in the Gulf 

7 and having no policy to deal with it and presented his 

8 view of the legitimacy of what we were trying to do, and 
9- it was this. 

10 .. It was obviously these hostages, insofar as 

11 they seemed to be either within the reach of Iran, they 

12 are or they are not. They are there. That's an 

13 impediment. That is an impediment on our side that has 

14 got to be resolved. There are people in Iran who have to 

15 be strengthened, obviously, but we think there are people 

16 we can deal with in there. 

17 And this whole thing Bud coughed it up 

18 somehow. 

19 Q Bud McFarlane? 

20 A Bud McFarlane and then shuffled it off to me 

21 and he went off to make a living. 

22 MR. ADLER: "Me" being North? 

23 THE WITNESS: Me, being North. And this would 

24 not be unusual for the simple reason that Ollie was one 

25 of those peculiar people who would work, and so we all 



UNClISmfcO 



27 



UN€Li^Si;^D 



26 



1 know how bureaucracies run and you find somebody that's 

2 willing to work and there's a hell of a lot of work to 

3 do. 

4 And so Ollie -- it was plausible, I mean, his 

5 explanation that this was one more thing that devolved 

6 upon me. Now having some way or some point in this 

7 sloppy reconstruction of this thing disposed of the 

8 question of the HAWKs, we get into what I think was the 

9 point of the telephone call, or before it was all over it 

10 was the point of it, and that was the TOWS. 

11 BY MR. SAXON: (Resuming) 

12 Q And in your best recollection when would that 

13 call have taken place? 

14 A I can only give you an estimate of that, and 

15 the estimate is based on a personal note that I made to 

16 myself which says the TOWs were discussed separately with 

17 Rudd and Gaffney in December. 

18 Q Let me ask that this personal note be marked 

19 as Deposition Exhibit Number 2. 

20 (The document referred to was 

21 marked Koch Exhibit Number 2 

22 for identification.) 

23 This bears the letterhead on memo paper of 

24 Office of the Assistant Secretary of Defense for 

25 International Security Affairs, Africa Region. Is that 



UN€tftSS#tiD 



28 



UNCimH^EO 



27 



1 the memo to which you referred? 

2 A That is correct. 

3 Q And Item 1 says TOW discussed separately with 

4 Rudd and Gaffney in December, and that is the item you 

5 were using to refresh your recollection? 

6 A That is correct. 

7 Q And the understanding being you would have 

8 only discussed TOW after having gotten a call from 

9 Colonel North with him discussing TOW? 

10 A ThaC^ould be my -- what would seem to me to 

11 be the most plausible construction to place on it. 

12 Q Now if you would then continue with the 

13 conversation and tell us what Colonel North told you. 

14 A Okay. So now we got into he said -- the 

15 discussion about Bud's role in this thing was not — it 

16 was one of those things that was said with a sigh, kind 

17 of resignation — I've got another hot potato. But then 

18 the people that McFarlane had working with him, chiefly 

19 Michael Ledeen, he was not quite as kind about that. 
2 Q He, North? 

21 A He, North. 

22 Q What did he say in that regard? 

23 A He indicated that Michael had had, for 

24 whatever reason, which he found puzzling, responsibility 

25 for dealing with this thing, and that he had — 



UlfCLASSIF'ED 



29 



8 



10 



UN@l^^^l^>) 



26 



1 Q Meaning negotiating with the Israelis? 

2 A Negotiating with the Iranians. He was in the 

3 Iranian deal. Ollie couldn't find out why he had been 

4 put in it, and then he said that it was screwed up, that 

5 he attributed its being screwed up to Michael Ledeen. 

6 Q Anyone else? 

7 A No. It was Mike. But then he went on to say 
— and I believe it was in that conversation — he 

9 indicated that he thought Mike was making money on the 
deal." And when that came up, then the question then 

11 Schwimmer was the other name that was associated with 

12 that and that there was money in this thing I think was 

13 what he indicated. 

14 Q And I understand that you're not making that 

15 as your statement and attesting to that, but you're 

16 saying Colonel North thought there was some skimming or 

17 something? 

18 A That is what he said to me. And part of the 

19 problem was that in addition to other things he couldn't 

20 imagine why Ledeen was in it, was that Ledeen literally 

21 did not know anything about most of the things that he 

22 was involved in, least of all weapons. 

23 Q Or weapons pricing? 

24 A Or weapons pricing or terrorism or anything 

UN(^*SStRED 



30 



UttOLA^rF^D 



29 



1 Q Now What do you understand Ledeen to have done 

2 in terms of negotiating the price for U.S. Army TOW 

3 missiles? 

4 A My understanding from Colonel North was that 

5 he had negotiated a price that was laughably low. I 

6 mean, it was simply that there would be no way that you 

7 could put a construction on that price that would make it 

8 defensible under the most benign efforts to rationalize 

9 this. 

10 - Q And in a ballpark way what do you recall that 

11 figure having been? 

12 A I thought it was something on the order of 

13 $2,500. And so he said that you have got to meet with a 

14 man, an Israeli, and renegotiate the price and get back 

15 to me with this. 

16 Q And did he give you the name of the Israeli? 

17 A The Israeli was a man named Ben Vosef. They 

18 had a code name, the Bookkeeper. I don't know why, but 

19 at that point I was given a code name or asked to adopt 
2 one. 

21 Q Do you know what that was? 

22 A That was Aaron. 

23 Q Aaron? 

24 A Yes. 

25 Q A-a-r-o-n? 



UNtJt1ISS!F?ED 



31 



WNettS^ED 



30 



1 
2 

3 

4 
5 
6 

7 
8 
9 

10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 



A Right. 

Q And did you ask Colonel North exactly what you 
were supposed to do when you met with Ben Yosef? 

A Just to make that price better and get back to 
him. 

Q And at this point were you talking about TOWs 
to Iran or backfilling the Israeli previous shipment of 
TOWs to Iran? 

A My understanding at that point was we were 
backfilling a delivery and, I think the number was 508. 
We have always had this eight here. I mean, it always 
prompted the inevitable question and of course the answer 
is always simpler, but it turned out to be that is how 
many would fit on an airplane or something. 



Did you ask Colonel North that question 



yourself? 
A 
Q 
A 
Q 



I don't believe I did. 

Do you recall him addressing that number? 

No. 

Tell us then about your meeting with Ben Yosef 
and would there have been anything else that intervened 
in the interim between Colonel North saying you were to 
meet with him and then you met with him? 

A I would have had a discussion with DSAA to get 
a sense of the pricing here and what made sense. 



UNCllSSmED 



32 



UMG4ASS{Kk:D 



31 



1 Q And who would you have spoken with at DSAA? 

2 A I think I probably would have spoken with Glen 

3 Rudd. It would have been natural for me to try to 

4 compartment my discussions. And then I talked to Hank 

5 about availability. I would probably have gone looking 

S very innocent to Glen Rudd and said, suppose, you know — 

7 what's a TOW cost? If you sold it, how much could you 

8 sell it for? 

9 Q And is it your best recollection you had that 

10 discussion in December of '85? 

11 A If you had asked me prior to my finding this 

12 in my diary, I would have said it would have to have been 

13 probably in January. I just don't know. All I know is, 

14 as I see that it says it, we had the conversation in 

15 December. I'm sure I was looking to Gaffney to know 

16 where these things might be to pick them up, if 

17 necessary. That would be the kind of information that 

18 . would have to be passed on. 

19 And then I would have spoken separately to 

20 Rudd about the pricing and other modalities, and I don't 

21 mean in terms of how you move them but are there any 

22 constraints on those and how do you do it. 

23 Q Before we get into that conversation, first 

24 what is your best recollection of when Exhibit 2 was made 

25 — that is, your handwritten memorandum — at some point 



UNCLASSIflED 



33 



(JMClASSJ^tD 



32 



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 




later? 

A That is my handwritten memorandum and you 
cannot tell from the copy but from the original you will 
see that some of this is in pencil. Some of it is in 
ink. The order of points on here -- you know, it goes 
one, two, three, four, and then it goes back to the top 
of the page, five. That is blanked out, but I think I 
can safely tell you that the reference there is tc 

_^^^^^^^^^^^^^^^^^^^^^^J and 
that would be a point. I can't recall the precise date 
of that, whether it was December of '85 or what. 

But there were circumstances pursuant to that 
which I recorded there. But then there is point four, 
which says the TOW paper is locked in Armitage's safe and 
he wouldn't let Rudd keep a copy. And there again I have 
— my best recollection was that Armitage was not in the 
box until pretty late in this game. 

Q By in the box what do you mean? 

A That he was aware of what had gone on. In 
other words, the Secretary had not shared it with him. 
The Military Assistant had not shared it with him. And 
he did not know it. So that may mean that I made this 
note to myself sometime in February or March, whenever he 
did know it. 

Q So your best reconstruction would be February 



uiiCtass?f^.o 



34 



UKCtl^StFtED 



33 



1 or March of 1986? 

2 A That's right. 

3 Q For the record, what was Glen Rudd ' s position? 

4 A He was Deputy Director of DSAA. 

5 Q The Defense Security Assistance Agency? 

6 A Yes, sir. 

7 Q Now if you would recount for us what you 

8 recall of your conversation with Rudd in December of '85. 

9 A Well, the only part of it I can recall, 

10 whenever it was held -- and I can't be firm on that -- 

11 would have been -- I'm extrapolating from that as much as 

12 I can recall, and that would have been I was saying 

13 something about this won't work. We have to have a 

14 different pricing theory or something to that effect. 

15 Now, as I said, as I extrapolate from that, 

16 what I am saying here is Glen is telling me this is what 

17 these things cost, this is what we are really selling 

18 them for, and I'm in my mind not confident that that 

19 price is one which the guy I was going to negotiate with 

20 could live with. I wanted to know how much room I've 

21 got. I know the floor has got to be somewhere higher 

22 than S2,500. I mean, that much we don't know, what the 

23 Israelis are reselling them and what's happening. That I 

24 don't know until later, and I never did know and still 

25 don't know to this day. 



UNCLASSIFffiD 



35 



UNCtJ^SIflfD 



34 



1 But that that is a question I think is 

2 probably not something that entered into this. 

3 Q Do you recall Rudd giving you a price of the 

4 least we had ever charged for a TOW missile when we sold 

5 it through FMS sales, foreign military sales? 

6 A I don't recall, but I'm sure he did, and I'm 

7 sure that that was a higher price than I felt confident I 

8 could negotiate. 

9 Q If I told you his recollection is he gave you 

10 a price of, on checking the records, of $6,800 as the 

11 cheapest price we'd ever sold it before, does that 

12 refresh you at all or not? 

13 A That doesn't ring a bell. 

14 Q Do you recall this discussion centering around 

15 4,000 TOWs in terms of number for $12 million in terms of 

16 price? 

17 A Four thousand TOWs for $12 million? 

18 Q Which would work out to $3,000 per TOW? 

19 A I remember the number $12 million. 

20 Q Where do you think that number came from? 

21 A I don't know. I don't know. I mean, one sees 

22 where it might have come from, but I don't know. 

23 Q Might it have come from Colonel North? 

24 A Well, in terms of sources I couldn't speculate 

25 on that. I mean, the point of $12 million is clearly 



UNCMSSTRED 



36 



UN€USSKI£D 



35 



1 below the threshold for notification, it seems to me, if 

2 you were trying to stay under the threshold. What I find 

3 illogical about this is that you link a number that is 

4 under the threshold with a specific number of TOWs so 

5 that if it was your object to stay under the threshold 

6 and still negotiate a price that was reasonable, that 

7 would go through the system without raising eyebrows, 

8 that you would say you would divide that reasonable price 

9 into $12 million or $13,999,999.99 and come up with this 

10 will 'buy you 2,116 TOWs. 

11 But you wouldn't try to squeeze these things. 

12 You've got one constraint and that's hard enough to live 

13 with, so why you would put two constraints together and 

14 make it an N-squared problem, I don't know. That is what 

15 I find difficult. 

16 Q When you went to see Glen Rudd did you go to 

17 him for any particular reason? In particular, did you go 

18 to him because General Cast, his boss and the Director of 

19 DSAA, was out of town and he was the acting director, or 

20 would there have been another reason to go to him? 

21 A I don't remember where Phil was. I would have 

22 gone to Glen as a matter of course because what I would 

23 have gotten from Glen is on the one hand a very 

24 comprehensive -- a very comprehensive answer -- and yet a 

25 short one. He was very knowledgeable and very 



I 



UN(H.ftSStFEd 



37 



UNCl^SlFoltO 



36 



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 



professional -- bing, bing, bing -- and wouldn't have 
asked any questions and I assume would not call around 
saying what does Noel want. 

Q Do you recall at that time telling Mr. Rudd | 
where these TOWs were destined for? 

A I don't recall that. I may have, but I don't 
recall that. 

Q And do you think that your discussions, your 
discussion or discussions, with Glen Rudd would have been 
preparatory to your discussion with Ben Yosef? 

A Yes, I think so. 

Q Do you recall discussing with Mr. Rudd the 
issue of Congressional notification? 

A I don't recall him discussing it, but I would 
be virtually certain that it would be one of those things 
that he would have raised with me. It wouldn't have been 
a concern of my own. I would have had other concerns. 

Q Do you recall him saying something to you like 
the Israelis can manufacture the basic TOW themselves and 
are now purchasing from us improved TOWs or I-TOWs and 
TOW-IIs and therefore if we sell enough of these to 
exceed the reporting threshold and have to report to 
Congress it will appear transparent because the folks up 
there are pretty savvy and they will know these are not 
ultimately intended for Israel but are destined to be 



TOP SECRET/CPDEWO 




38 



UNMSSJifJID 



37 



1 transferred somewhere else? 

2 A I don't remember that. And let me say is 

3 resonates, but I can't recapture it. 

4 MR. SAXON: Let's go off the record a second. 

5 (A discussion was held off the record.) 

6 MR. SAXON: Let's go back on the record. 

7 BY MR. SAXON: (Resuming) 

8 Q Do you recall any discussion whatsoever with 

9 Mr. Rudd about notifying the Congress? 

10 ' A I am sure that he brought that up with me, 

11 that this is one of the things that had to happen in 

12 order to get it done, but I don't think it was brought up 

13 in the sense that this is how you would avoid it, avoid 

14 notifying the Congress. 

15 Q Do you recall any discussion about the need to 

16 m.ake this a covert operation, perhaps transfer the 

17 missiles from the Army to the CIA as a means of avoiding 

18 notifying the Congress? This is with Glen Rudd in 

19 December. 

20 A No. I don't have a recollection, but I do 

21 have my notes and I have a note here that said "Cast said 

22 the best possibility of cover was do it black." 

23 Q By "do it black" that means what? 

24 A It would have been through some covert means, 

25 and it would most likely be under the Agency. 



UN€LASSfft£D 



39 



liJlQUSMiti) 



38 



1 ■ MR. ADLER: Would it be helpful — I don't 

2 mean to interrupt your examination, but his handwriting 

3 is only slightly better than mine and mine is the worst 

4 that anyone has ever seen. Would it be helpful to have 

5 him just read this memo into the record? 

6 BY MR. SAXON: (Resuming) 

7 Q Sure. If you would then read everything after 

8 the letterhead and the memo, read Deposition Exhibit 2 

9 into the record. 

10 'A All right. Point one is "TOW discussed 

11 separately with Rudd and Gaffney in December." We go to 

12 point four, which says "TOW paper locked in RLA's safe, 

13 wouldn't let Rudd keep copy." 

14 Q Let me interrupt and ask who RLA is. 

15 A That's Richard Armitage. 

16 Q Let me also say for the record that the House 

17 and Senate counsel understand that the items that are 

18 blacked out have no relevance to these proceedings and we 

19 have agreed to this arrangement. Continue. 

20 A There is a line and then there are notes which 

21 appear to pertain to these two above points. The first 

22 says: "Original was 3,000. Definitely this much in 

23 stock." The next line says: "No way to keep transfer 

24 secret." The next line says: "Cast said best 

25 possibility of cover was do it black." The next says: 



uNctAs^re 



40 



\| ri^ ""^^/^O DEWORD 



39 



1 "Through Israelis would attract notice — even if we try 

2 to waive section 36(b) (notice to Hill)." 

3 Q And that would be section 36(b) of the Arms 

4 Export Control Act? 

5 A That is correct. The last line says: "CIA 

6 purchase (through ACSI?j and transfer which is 

7 contracted." 

8 Q And what would ACSI be? 

9 A I can never remember -- the Assistant Chief of 

10 Staff for Intelligence. 

11 Q And what are those last? 

12 A The last squiggle at the bottom says: 

13 "Replace with TOW-II." There's a word which could be 

14 "completion of sale" or it could be "condition of sale." 

15 There is a number, which is S45 million. And then 

16 there's another word under that which appears to be 

17 "scattered". And then there is a note which is a 

18 calculation that says "four C-130s equals 500", which 

19 would mean that you could put 150 TOWs on each C-130, or 

20 125, I guess. 

21 Q Do you recall going away from your discussion 

22 with Mr. Rudd in December of '85 with the sense that the 

23 best way to proceed was for this to become a covert 

24 operation? 

25 A No, I don' t. iracili^at precisely. I will 



\. No, I don't reciliJJ-iat 



41 



UN€LASSIfJ€D 



40 



1 tell you -- and again I tend to telescope dates and 

2 discussions and so forth -- but I have a recollection 

3 that as part of my conversation with Glen, whenever -- I 

4 mean, at some point obviously the question of Israel's 

5 involvement in this thing was there and that we were 

6 talking about how to make it simple, and the question was 

7 why is it not possible to simply, you know, whatever the 

8 Israelis are doing, they are doing, and they purchase 

9 this thing in a straight FMS buy and then they make the 

10 transfer and we can write that off to TOWs are 

11 consumables in a place like Israel. They use them up in 

12 Lebanon or in training and so forth and so on. 

13 So this is just a replenishment. Now one can 

14 see how that might have prompted Glen to say well, we're 

15 going to replace them with basic or whatever the intent 

16 is to replace them with basic and then you run into the 

17 fact that people the^ are manufacturing their own basic. 

18 I have on this note, as you see, replace with 

19 TOW-II. That could mean a number of things. It could 

20 mean likely, meaning that it was necessary for us to 

21 replace in our own inventories the basic TOW with the 

22 TOW-II. Again, I don't know. Or it could mean, I guess, 

23 that we would have replaced the basic TOW that they were 

24 selling to Iran with TOW-II. I just don't know. 

25 Q Were you ever made aware or do you know that 



UlfCtfSSnKED 



42 



UN€L4SStRiD 



41 



1 the 508 TOWS the Israelis transferred to the Iranians in 

2 1985 were TOWs that they had received from the United 

3 States under FMS sales? 

4 A It was always my understanding that the 

5 initial transfer, and in fact it was not even clear to me 

6 but what they had not gone ahead and done that deal prior 

7 to any of this discussion. 

8 Q That gets to the point I want to ask you 

9 about. What would have been your understanding at the 

10 time, if in fact it differs from your understanding now, 

11 of any kind of preclearance that would have been required 

12 on the part of the United States to give a go-ahead to 

13 the Israelis to make that transfer, if they had received 

14 those TOWs under FMS sales? Are there any requirements 

15 that they get approval from the United States to transfer 

16 them to a third country? 

17 A Well, if we had an embargo they would have, I 

18 am pretty confident, at a minimum be required by national 

19 disclosure policy to let us know. I mean, we had to 

20 disclose and anybody that we provided to who provides to 

21 a third country it seems to me has this disclosure 

22 obligation, and so there would have been that. And there 

23 would have been, of course, the existing policy of an 

24 embargo against Iran that would have to be circumvented 

25 in some fashion. 



UNGLASSiftB 



43 



ii^tASSmtB 



42 



1 But let's be clear in all these things in what 

2 we're dealing with so far. We were still in an 

3 informational mode. I mean, I'm asking for information 

4 and I get information. The first time I go outside that 

5 is in this discussion with the Bookkeeper. 

6 Q Before we get to that -- and I do want to get 

7 to that -- if I told you that the law that governs FMS 

8 sales requires prior approval by the United States for a 

9 recipient country to transfer to any third country, would 

10 that Seem to -- 

11 A No, no. 

12 Q That's correct? 

13 A That's correct. 

14 Q And has the President not delegated that 

15 authority by Executive Order to the Secretary of State? 

16 A That is correct. 

17 Q And as far as you know did Secretary Shultz 

18 ever give approval to the Israelis to transfer these TOWs 

19 to Iran? 

20 A I have no way of knowing that. 

21 Q And in fact isn't the contract that a country 

22 actually signs for FMS sales, the letter of acceptance 

23 and contractual document with the DSAA, doesn't that 

24 contract actually require the approval in writing? 
2 5 A Yes. 



mctnmm 



44 



UNOLASS{FI€D 



43 



1 Q And you don't know whether -- 

2 A And there's a time delay here in which you 

3 have to notify and then there's time, I think, for the 

4 Congress to make its feelings known. 

5 Q A 50-day period, with 20-day advance notice? 

6 A And thirty days, yes. 

7 Q And your statement is you don't know whether 

8 those provisions were compiled with? 

9 A No, I don't know. I mean, to have raised the 

10 question is to have suggested your government is going to 

11 break the law, and so I would assume whatever things you 

12 required in terms of compliance that at some point it 

13 would be taken care of. 

14 Q Let us go then to the discussion with Ben 

15 Yosef. You apparently would have gotten the necessary 

16 factual information from Mr. Rudd as prefatory to that 

17 meeting. 

18 A Right. 

19 Q How did this meeting then come about? Did you 

20 place a call or did he call you? 

21 A I think I called him. I don't remember 

22 because Ollie worked both sides of the link. But, at any 

23 rate, we spoke. 

24 Q Walk us through this, if you would. 

25 A We talked. The conversation on the telephone 



I 



i^NeUJSff/Eg 



45 



MCiASSJflED 



44 



1 would have been rather cryptic. There's a question 

2 whether I should go to New York or he would come to 

3 Washington. 

4 Q Was he operating out of New York? 

5 A He was in New York. And the circumstances 

6 were such at the time — I mean, clearly this was not 

7 something that I could go down to travel and say I am 

8 going to New York. I mean, I could have done that. I 

9 could have covered or I could have flown up on my own, 

10 hut r just didn't feel like going to the inconvenience, 

11 and I suggested he come to Washington, which he did. 

12 We met at the passengers' lounge, the first- 

13 class lounge, the TWA lounge at National Airport. 

14 Q Were you able at all to date this meeting? 

15 A No. 

16 Q Can you give us a ball park? 

17 A Well, I'm going back to my note here which 

18 says I discussed this with Rudd and Gaffney in December. 

19 I'm sure that part of that discussion was pursuant to — 

20 I mean, I shouldn't say I'm sure. I don't want to be 

21 that categorical about this, but it seems to me very 

22 probable. 

23 Now if I could take a look here, and let's 

24 look in there as well, but let me quickly go through. 

25 Q And, for the record, you are looking right at 



UNCWSSfF'FJ 



46 



UNa^S^FI^D 



45 



1 this moment at what? 

2 A At my daily logs, my appointment book. These 

3 were kept by my secretary. They are complete except with 

4 circumstances where I would walk out of my office and not 

5 tell her where I was going or if I did something on a 

6 weekend. 

7 Q Your meeting with Mr. Yosef was on a weekend; 

8 is that correct? 

9 A That is my recollection, yes. Now I am 

10 through November and I am sure there are places in here 

11 that I could recognize the beginnings of all of this. 

12 MR. SABA: Could we go off the record for a 

13 moment? 

14 (A discussion was held off the record.) 

15 MR. SAXON: Let's go back on the record. 

16 THE WITNESS: I have a meeting on January 7 at 

17 2:00 with Hank Gaffney, which is briefly interrupted by 

18 . one of my Africans, and then we go back to this meeting 

19 with Hank Gaffney. At 2:44 I meet with Glen Rudd and I 

20 would suspect that these were two separate meetings. And 

21 I would be reasonably certain that the TOW were the 

22 subject of these because I don't remember in that period 

23 of time that we had anything. I mean, as a matter -- I 

24 didn't deal with DSAA on a regular basis. It wasn't a 

25 daily thing. 



uwceh^sDUd 



47 



liiteti^sifi^D 



46 



1 It was at one point. 

2 BY MR. SAXON: (Resuming) 

3 Q So as I infer from what you are saying, your 

4 best sense is you would have had no reason to meet with 

5 both Gaffney and Rudd together or back to back other than 

6 this topic? 

7 A I think so, yes, particularly Gaffney. 

8 Q And that date was January 7? 

9 A January 7. 

10 ■• Q And, for the record, I'm not sure if we said 

11 what was Dr. Gaffney 's position at that time. 

12 A I'm not sure. Was he head of operations? Can 

13 you tell me, help me out? 

14 Q Would he have been Director of Plans for DSAA? 

15 A Yes. Okay. 

16 Q Continue. 

17 A On Wednesday, January 8, this is the day after 

18 the meeting with these two guys, I have a meeting with 

19 General Powell at 11:00 and my secretary has a notation 

20 here that I've gone with a paper. That may have related 

21 to this. On the 9th, at 1:00 in the afternoon I go down 

22 to see Glen Rudd. Usually that wouldn't have been 

23 scheduled. I would have just walked down and said I was 

24 going to see Rudd. So there's a lot of ad hoeing in 

25 here, which would be consistent again with discussions. 



UWCLHSSIFHED 



48 



UNOLASSIEIED 



47 



1 On the 10th at 10:35 I meet with Colin Powell 

2 again. 

3 Q What day of the week was the 10th? 

4 A The 10th I think was a Wednesday. No, it was 

5 a Friday. I'm sorry. 

6 (Pause. ) 

7 You see, in this period of time it's a little 

8 confusing because I was putting on a conference at Ft. 

.9 McNair on the 15th. There was a dinner on the 14th and I 

10 had written the Secretary's speech for that and this was 

11 a fairly big deal for us. This was a special 

12 operations/low intensity conflict conference, the first 

13 one we'd had, and I had him and Shultz and people like 

14 Ted Koppel and others come to this thing. And so I have 

15 a notation here at 9:50 to SecDef, but she has a question 

16 mark next to it, and I don't know whether I saw him then 

17 or not. I saw him certainly at 3:30 the same day. 

18 I only raise that because there's the 

19 possibility that after the series of meetings with 

20 Gaffney and Rudd and Powell through the week of the 6th 

21 of January that I may have met with Ben Yosef on the 

22 weekend, either the 11th or the 12th of January. That's 

23 possible. But if I did, then of course I don't have 

24 phone logs and it may not be in the log anyway, and there 

25 is no indication on the 13th that I talked to anybody 



UN€t^Slf^D 



49 



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 



WVettS^£0 



48 



about that. 



The first time would have been on the 14th. 
Now we go forward to wherever we were and I'm out of 
town, and there is a considerable hiatus in here now 
until Friday the 24th. I go to see Colin Powell and that 
could have been anything. 

Q So your best sense is that you very likely met 
with Ben Yosef the weekend of January 11 or 12? 



I would say that would be likely. 

Do you recall if it was? 

Not absolutely. --•■: " ' "' ' 

Do you recall if it was a Saturday or a 



A 
• Q 

A 

Q 
Sunday? 

A I don't recall that. It might well have been. 
I'm sure it would have been a Sunday. I would guess a 
Sunday. 

Q If you could then tell us what transpired in 
that meeting. 

A Well, there wasn't much preliminary discussion 
because we both knew why we were there and that it 
involved coming up with a different price than had been 
previously negotiated by Ledeen or, to my knowledge. And 
so I said whatever the floor was. I knew what it was. I 
think it was $2,500. And I had a bargaining position in 
my mind and I had an absolutely irrevocable floor, one 



IIN11»ED 



50 



UN^ASMED 



49 



1 that I would not go past, and that was — I think that 

2 was $4,000. 

3 Q And what do you recall is your goal that you 

4 were shooting for? what was your upper price you were 

5 trying to get it up to? 

6 A Well, I wanted to get as much as I could, but 

7 I'm sure that I didn't go over $6,000 and it may not have 

8 gone that high. 

9 Q Now tell us why it was necessary to get the 

10 price up. What was Colonel North telling you in terms of 

11 the need to get the price up? 

12 A He never said anything about the need to get 

13 the price up. The price had to get up to the point where 

14 it wouldn't raise eyebrows, the eyebrows of the people 

15 from whom we were taking the TOW. 

16 Q So basically you had to get it up high enough 

17 to get the missiles out of the Pentagon? 

18 A Yes, pretty much, or at least to have a 

19 defensible position or defensible price on these things. 
2 You couldn't give them away, you see. 

21 Q I believe you put it before that it had to be 

22 high enough for the person to have a credible argument to 

23 work with when he went to Secretary Weinberger to sell 

24 him on the idea. Does that sound about right? 

25 A That is a reasonable construction. But as far 



U1tCtfl^tF1£D 



51 



uwctassrED 



50 



1 as the Israelis were concerned, I mean, I don't know. I 

2 didn't know what their value was -- whether they were 

3 reselling them or what or how much for and the rest of 

4 it. 

5 Q Did you in fact ask Yosef if they were making 

6 money on this deal, what they were selling them for, et 

7 cetera? 

8 A Yes. 

9 Q And what was his reaction? 

10 ' A He was noncommittal and I did not ask the 

11 question in a very severe way. I mean, I assumed -- at 

12 least I think I assumed, and I'm not even sure yet 

13 whether it was clear that these were being sold rather 

14 than given and exactly what all the details were, but I 

15 believe it was they were being resold. Colin certainly 

16 thought they were being resold. In fact, for sure that 

17 was a part of the discussion. 

18 And he and I both said yes, they probably are 

19 making a killing on this thing. 

20 Q Do you recall him telling you that Secretary 

21 Weinberger also believed they were making a killing? 
2 2 A Yes. 

23 Q Do you recall when that conversation would 

24 have been? 

25 A Well, it would have been preparatory to my 



UNCtHiSSTFfED 



52 



^N^^SSirlci) 



51 



1 meeting with Ben Yosef, whenever that was, and so in the 

2 conversations with Ben Yosef he is trying to keep the 

3 price down where it was. I don't know whether there's 

4 any reference to the previous negotiation, and the 

5 authority of that negotiation. I don't recall that. But 

6 at length we caroe up with the number that I could take 

7 back and that he felt he could take back. 

8 Q Do you recall him making a comment or do you 

9 know whether Ben Yosef was involved in the earlier 

10 negotiations with Ledeen? 

11 A I don't know. I'm not sure whether he was or 

12 not. I had the sense that he was. At any rate, he was 

13 in the loop. He was in the loop clearly before I was. 

14 Q And what price do you recall agreeing upon? 

15 A $4,500. 

16 Q And was anything put in writing in that 

17 regard? 

18 A No. No. I mean, I had no absolute authority. 

19 We weren't there to cut a deal. We were there to prepare 
2 the ground for one. 

21 Q And I believe you made a statement something 

22 like "and I assume you guys are making a profit". 

23 A Well, in the course of the negotiation I said, 

24 Christ, you know, we don't know what you guys are making 

25 on this thing. I can't believe you're doing it for 



unccissmed 



53 



^|:p|\ffcra^ OT CTTO R D 



52 



1 nothing, or something like that. And he didn't say. I 

2 mean, he may have said I don't know, and he may not have 

3 known. 

4 Q Had you told General Powell before this 

5 meeting that you were going to be meeting with Ben Yosef? 

6 A I don't remember that. I had a couple of 

7 meetings with Colin or had at least one meeting with 

8 Colin at his house. I may have met with him at his house 

9 after I met with Ben Yosef, for all I know. 

10 'Q Did there come a time, though, shortly after 

11 this meeting when you thought you might should tell 

12 General Powell in case you hadn't and maybe even — 

13 A I'm sure I did, yes. 

14 Q Did he suggest maybe you ought to inform 

15 Secretary Weinberger? 

16 A I'm sure he did that, too, and I mean I can't 

17 put it all together very well, but what would be strange 

18 about it — I mean, I would have figured I will tell 

19 Colin. Colin will tell the Secretary. But in this case 

20 I know I carried this back to Colin and he said we'd 

21 better go tell the Secretary. And so I went in with him. 

22 Q And that would have been the three of you. 

23 Was anyone else at that meeting? 

24 A Taft was in there, and I guess he was afraid 

25 he was goina to_miss 5.oaetiliJUI— SC J^e couldn't get him 



ijii}M^iri£0° 



54 



UN€L^aSH^SED 



53 



1 out of there. We waited for a while and he didn't take 

2 the point. 

3 Q That would be the Deputy Secretary of Defense, 

4 William Taft? 

5 A Yes. 

6 Q And did you immediately jump into the topic? 

7 A Well, we sidled into it in a way that would 

8 have suggested to somebody of normal sensitivity that 

9 maybe their presence was not required. But that didn't 

10 work, so finally we said we talked to the Israelis and 

11 this was the price we came up with. 

12 Q And did Taft at that point seem to be witting 

13 of the topic you were discussing? 

14 A Well, you never can tell with Taft. 

15 Q Tell us what you recall from that discussion 

16 with Secretary Weinberger. Would this have been in his 

17 office? 

18 A Yes. My recollection is — I have a 

19 recollection there were at least two meetings with 

20 Weinberger in his office. Now it may have been at this 

21 one or it may have been at another one. I don't remember 

22 anything ^distinctive about either of these, except that I 

23 do know that there were at least two, and that this one-- 

24 I believe it was this one -- the Secretary was extremely 

25 agitated about this. 



UN&LAS$II.'ED 



55 



UN&LASSIFSED 



54 



1 And, as I indicated, my concern always had 

2 been that the political dimensions of this thing and what 

3 it was going to do to our position with our allies and 

4 what it was going to do to our position in terms of 

5 dealing with this problem of terrorism, and I thought 

6 those were his concerns. I mean, he made it clear he 

7 didn't like Iran and he hated the Ayatollah. He wanted 

8 to discuss the question of any efforts at a 

9 rapprochement. That was one of the impediments, was 

10 Weinberger's views on this thing. 

11 And so only because I had been through 

12 Watergate and I guess he had, and there was kind of an 

13 understanding because we had had, in the very little bit 

14 of chat we had ever had previously, things related to 

15 Watergate came up. And so for no reason other than that 

16 I said, I mean, he said this is a disaster and it should 

17 be stopped and so forth. 

18 And I said -- 

19 Q Did he say something along the lines of it 

20 would be terrible for the country? 

21 A Yes. Well, yes, he did. And again I thought 

22 this was all related to our credibility on the 

23 international scene. But I said not in any awfully 

24 serious way, but sort of semi-jocular way, are we apt to 

25 go to jail over this. And I don't know whether he looked 



mtft^SfflED 



56 



A 



UN^AS^RED 



55 



1 at me or there wasn't an immediate follow-up and one of 

2 us or the other sort of said, you know, like what does 

3 this mean? Is there a legal problem with this? And he 

4 said yes. 

5 And then I think he said something like, yes, 

6 we could go to jail, or somebody could. 

7 Q At that point was there any discussion about 

8 whether this had been blessed at the White House by a 

9 Presidential Finding or by a legal opinion from anyone? 

10 A My recollection is the Secretary did say that 

11 the President wants to do this because I felt that I was 

12 in an awkward position. I wasn't making it any easier. 

13 Weinberger, as nearly as anyone could discern, clung to 

14 this question of the pricing of these missiles and the 

15 necessity for us getting a replacement price, which could 

16 range up to something on the order of $13,000. 

17 And that was one of the things that he saw as 

18 a possible impediment. I don't know. I don't know what 

19 was in his mind, but it was clearly understood by me 

2 through whatever means that this was what they were going 

21 to have to pay us for these missiles, and so I had 

22 undercut that by negotiating this price of $4,500, which, 

23 whatever it was, was defensible. It paid for the 

24 missiles. It was more than we had paid for the missiles. 

25 And so I probably would have had a certain 



I 



uwctftssif^^ 



57 



uNettssinED 



56 



1 amount of sensitivity to his feeling that I had undercut 

2 this, so I said it was my understanding that the 

3 President wants this and he confirmed that, yes, he does, 

4 but it's wrong. He said that this is crazy. 

5 Q You don't recall, though, a mention of a 

6 Presidential Finding? 

7 A No. 

8 Q And you don't recall mention of the Attorney 

9 General has looked at it and he said it's legally kosher? 

10 'A I don't remember that being discussed. 

11 Q When you said you knew the price of $4,500 was 

12 more than we paid for them, what do you mean by that? 

13 A Well, that harkened back to the discussion 

14 that I had with Rudd and what I was looking for was some 

15 way. I mean, what you were dealing with in a certain 

16 sense there are aspects of this which are somewhat 

17 arbitrary. The question of paying replacement costs in 

18 my mind, you know, I could do this a lot better than you 

19 guys, was a theory. 

20 And it seems to me that your point of 

21 departure would be what did we pay for these things. Are 

22 we losing money on the deal? I mean, are we giving them 

23 away? Are you going to have a problem with that? And so 

24 what we paid for them, as I understood, was something 

25 53,300, $3,500, something like that. But after you put 



UNClftS^fifcO 



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UNCUSmP 



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1 the bells and whistles on them they peaked out around 

2 $3,800, $3,900. 

3 Q So when you say that you got reference to the 

4 price we actually paid for the basic TOWs that were in 

5 the Army inventory at the Army depot -- 

6 A And that is what we were going to sell or 

7 divest ourselves of in some fashion. 

8 Q And if I gave you a price of $3,469 for those, 

9 that sounds about consistent with what you recall? 

10 A Yes. 

11 Q Do you recall in that session with Secretary 

12 Weinberger at which Mr. Taft and General Powell were 

13 present Secretary Weinberger making any comment about the 

14 arms exceed the Economy Act and that we would transfer 

15 these to the CIA under the Economy Act and any hope on 

16 his part that that might in some way be an impediment to 

17 this? 

18 A I do not recall that. There might have been 

19 some conversation between Colin and myself. Again, it 

20 would have involved modalities, I mean, sort of in the 

21 sense that if you are going to do it, how is it going to 

22 be done. But I don't recall that. 

23 Q When were you made aware that there had been a 

24 meeting at the White House in early December of '85 with 

25 the President, Secretary Weinberger, Secretary Shultz, 



i 



\imMmB 



59 



UWCtftSStflED 

1 Colonel North, Mr. McMahon, the Deputy Director of 

2 Central Intelligence, to talk about this? You were not 

3 aware at the time? 

"* A I was not aware at the time, and I don't know. 

5 It was so long after the fact that it was totally out of 

6 the calendar context of this thing that I guess I was 

7 6u«pprised, when I heard that such a meeting had been held. 

8 Q And when you had this meeting we have just 

9 been talking about with Secretary Weinberger, were you 

10 aware that a meeting had been held in early January with 

11 more or less the same principals -- Mr. Casey was there 
^^ ^" ^^is meeting in place of his deputy -- and they had 

13 agreed to and blessed the project and a Presidential 

14 Finding resulted? 

■"•^ A I think I knew at the time that there were ^-^ 

16 meetings on this thing and that Weinberger had tried to 

17 murder this whole thing and had not succeeded. But the 

18 timing, who the players were, and the outcome, the rest 

15 of it, I didn't know. i mean, I just had a general sense 

20 that part of the Secretary's agitation related to losing 

21 the battle. 

22 Q And when you left that meeting with Secretary 

23 Weinberger, General Powell and Secretary Taft, was there 

24 a disposition of things? Were you given some action 

25 items to go forvard and work? Where were things left? 



liNdllSSmED 



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(iNmSSJFIID 



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1 A I don't know. i didn't have an action in this 

2 thing other than, as I said, I did that negotiation. 

3 Then what were the next steps? I don't know, and I 

4 didn't know. I think Colin then enlisted the Army in 

5 this thing and whether that deal went through and if it 

6 went through at that price, these are things that I don't 

7 know. 

8 Q Let me have you mark as the next deposition 

9 exhibit a document which we have obtained from the 

10 National Security Council that bears the number at the 

11 top N-1331. That is the Senate Select Committee's 

12 notation for NSC documents. 

13 (The document referred to was 

14 marked Koch Exhibit Number 3 

15 for identification.) 

16 You've seen this before last week. It, we 

17 believe, is a document prepared in the handwriting of 
IS Colonel North. Let me ask you for the record do you 

19 ^ recall having seen it prior to last week when we showed 

20 it to you? 

21 A I do not. 

22 Q Now you'll see, a third of the way down the 

23 page, there is a heading in what we believe to be Colonel 

24 North's handwriting that says "people who know", and then 

25 there are a dozen or so names, and I will read them: 



UNULlSSmfD 



61 



liNCLASSlEiED 



60 



1 Shultz, Weinberger, Powell, Koch, Casey^^^^^^^^H 

2 McMahon, Allen, Gates, RR, JMP, Don R., Don F., VP, Peter 

3 and Howard. Now where you see Weinberger, it is broken 

4 out separately with two names under it. What would you 

5 take that to mean in terms of those two names? 

6 A Well, without a date on this thing I wouldn't 

7 know. It could be that we were the only ones who knew 

8 about the President's surprise birthday party. 

9 MR. ADLER: I would interpose an objection. 

10 You are asking him to speculate about a document that he 

11 didn't write and he has had no connection with. 

12 MR. SAXON: Fine. I withdraw that. 

13 BY MR. SAXON: (Resuming) 

14 Q Let me ask you in the time frame of early 

15 1986, do you have knowledge that any of these individuals 

16 knew about the arms shipments to Iran? 

17 A I knew that the Secretary did, that General 

18 Powell did. I knew that I did. And I believed that the 

19 President did and Admiral Poindexter did. 

20 Q From your own personal knowledge were you 

21 aware that any of these other individuals would have 

22 known about the arms shipments? 

23 A I'm not sure, Mr. Saxon. I mean, there were 

24 occasions in this whole thing when Colonel North would 

25 make reference to Mr. Casey, but those things kind of 



UNULIiSWSlD 



62 



UNCI#SSPED 



61 



1 float around in the cosmos here. I don't know that I 

2 could nail them down. I mean, at some point I had a very 

3 strong certainty that Mr. Casey did know, but in the 

4 framework of what you're asking me — I didn't mean to be 

5 flippant, but I can see from the context, this rationale, 

6 you see, there's never any reference to hostages here, 

7 and Ollie in his thinking, or at least his thinking when 

8 he wrote this, had to do with what we hoped to accomplish 

9 if this thing went through and hostages were very much a 

10 second order of consideration. 

11 Q Let me ask you a few questions about your 

12 relationship with Colonel North and some things he may or 

13 may not have said to you. Do you recall a conversation 

14 in December of 1985 in which he talked to you about how 

15 the issue of the hostages might have been weighing on the 

16 President? 

17 A Yes. And thAt;gjg j»"|^a illli] '^ ^^'I^U ~ ^^^^ ^^V 3<^<^ 
18- . weight to my fnnl J rtg^ that this discussion about the TOWs 

19 did occur in December, but it is important to know that 

20 on a very consistent or a regular basis you can see from 

21 my logs here, and if you read my phone logs you would 

22 see, that Colonel North and I talked a lot. We met a lot 

23 on circumstances that surrounded a lot of these things. 

24 Q So it may very well be that you are saying 

25 that statement he made to you was not in connection with 



imetftssfnED 



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l^i^Sff^ED 



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1 the conversation about TOWs? 

2 A It may not have had anything to do with TOWs, 

3 but that's one possibility. The other possibility is 

4 that was just a general comment. You know, Ollie was 

5 always -- I mean, he worked himself. He just worked 

6 very, very hard and one always had a sense that you just 

7 sympathized with the guy never getting any rest and not 

8 seeing much of his family, and having to carry the load 

9 that everybody shoveled off on him. 

10 , So that I said at some point how are you doing 

11 or how do you feel or whatever, and whatever it was, he 

12 said that the hostages, that it's driving the President 

13 nuts, and words to that effect. And he's on me all the 

14 time and he's driving me nuts. And he said he wants them 

15 back by Christmas. 

16 Q Meaning the President wants the hostages back 

17 in the U.S. by Christmas? 

18 A That's right. 

19 Q And that would be late '85? 

20 A That would have been late '85. And '^ said, 

21 you know, can we do it? And when I said "we" I don't 

22 know whether I made that collective, but I said can we do 

23 it, and he said I think so. 

24 Q At any point when you were talking with 

25 Colonel North about TOWs, HAWKs, things that specifically 



UMCtUfSSTPED 



64 



UNi^ASSfRED 



63 



1 pertained to arms shipments to Iran, whether direct or 

2 indirectly through Israel, do you recall any statements 

3 he made about the President's role, the President's 

4 desire that this happen, the President's having mandated 

5 that it be done, et cetera? 

6 A No, I don't recall that. I don't recall him 

7 telling the President the specifics of this thing other 

8 than he wants the hostages back. 

9 Q Do you recall any statements he may have made 

10 to you, more or less the same question, with regard to 

11 Admiral Poindexter and the arms shipments? 

12 A About John knowing about the shipments? 

13 Q Yes. 

14 A I don't recall him saying anything about that. 

15 Q And did he ever make any statement that would 

16 indicate he knew you might be in an awkward position in 

17 that you worked for Secretary Weinberger and worked at 

18 the Pentagon but that the Secretary was fairly adamantly 

19 opposed, I think it would be fair to say? 

20 A No. But as time went on, once Armitage got in 

21 the box on this thing, of course, he was always very 

22 diligent about ingratiating himself with the Secretary, 

23 and so he immediately decided this was all crazy and it 

24 was all nonsense and whatever bad words Cap had for it, 

25 Rich always squared them all. So that obviously injected 



UNCLASSIFIED 



65 



16 
17 
18 
19 
20 



24 
25 



IrNei^^rSk^D 



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1 a certain amount of tension into this thing, because 

2 Armitage's manner of dealing with this was not simply to 

3 criticize what was being done but to criticize the people 

4 who were doing it, and that meant saying that Ollie was 

5 crazy and everybody knew it, and it was part of his 

6 service record and that Jim Wick could tell you, and that 
1 all his decorations were fraudulent and things to that 

8 effect. 

9 So it introduced a degree of tension into this 
10 thing, 

H Q What is your understanding of when Mr. 

12 Armitage came in the box, as you say? 

^^ A Well, I don't know. I don't have -- the best 

^* ^ '=3" deduce from reading^ from reading the footnote in 

15 the Tower Commission report he wasn't in it in '85. I 

don't want to get too much into speculation, but I think 
that what I do recall is that there was a point where I 
was away, I was TDY and Colin said — he and I had a 
conversation on the phone about this, and it was an open 
line. It was a very cryptic conversation. And he said 

21 I'™ going to have to tell Rich. I need to get something 

22 done. I'm going to have to tell Rich because you can't 

23 do it your way. 

And as I look at my book here and I see the 

one place that I was TDY for a long time was — 



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1 • Q Your recollection is it might have been about 

2 the second week in February of '86? 

3 A No. My recollection now, having gone back and 

4 looked at these -- let me just look at this thing 

5 quickly. 

6 (A discussion was held off the record.) 

7 THE WITNESS: I go away to Europe on the 28th 

8 of February, and then I had to go to Berlin on a matter, 

9 and so I was stuck there and I didn't come back until the 

10 11th of March. And now I'm coming back on short rations 

11 and I'm tired, and I get in to Dulles at 1710, and my 

12 home is closer to Dulles than the Pentagon is, I can 

13 assure you, but rather than go home I am met there by a 

14 Pentagon driver and I go to see Colin Powell at 6:45. 

15 BY MR. SAXON: (Resuming) 

16 Q And your best recollection is that during that 

17 period when you were in Europe — 

18 A I think that is when Armitage got in the box. 

19 Q And did you actually work with him on any of 

20 this, coordinate with him? 

21 A No. 

22 Q Let me ask you to take a look at what I will 

23 have marked as the next exhibit, Exhibit 4. 

24 (The document referred to was 

25 marked Koch Exhibit Number 4 



UNrCLA^SIFIED 



67 



yNSlftSSfF?ED 



66 



1 for identification.) 

2 This is a draft of the testimony to be 

3 provided by Director Casey, who you see in the upper 

4 righthand corner, DCI, 20 November 86. It says Iran 

5 Testimony to be delivered 21 November. I am not giving 

6 you the full text because it is not relevant, but I have 

7 given you the cover page and then a page which bears the 

8 Senate Select Committee number C-5210, which means CIA 

9 document, page 5210. 

10 If you will look at the first full paragraph 

11 on the second page, it says "using these procedures" — 

12 which were described above -- "funds were deposited in 

13 the CIA account in Geneva on 11 February 1986 and on 14 

14 February 1,000 TOWs were transported to Israel for 

15 prepositioning. These TOWs were transferred by CIA from 

16 DOD U.S. Arroy stocks in Anniston, Alabama, and 

through ^^^^^^^^^^^^^^^H^us ing 

18 ' CIA/OOD^^^^^^^Hviogistics arrangements. Policy level 

19 coordination for these arrangement was effected by NSC 

20 (North) with DOD (Armitage and Koch) and CIA (Clair 

21 George) . " 

22 I'm not asking you to vouch for the accuracy 

23 of that, but this is reflected in Director Casey's 

24 testimony and it strikes me as a bit curious because -- 

25 what do you think could have been any involvement you and 



UftCtft^iF^B 



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1 Mr. Armitage had? Was it none? 

2 A We had no joint involvement with this. I did 

3 not include him in anything that involved terrorism or 

4 special operations all the way to the end. He wanted 

5 very much to be a part of this and where he could collect 

6 information that related to something that I might be 

7 doing he could come by my office and wanted to create the 

8 impression of being knowledgeable and want to talk about 

9 it, and of course we were friends, and he would see if he 

10 could. peter that out. 

11 Q And is it possible he could actually 

12 independently have had a piece of this? 

13 A It is possible. I'm a little surprised at the 

14 date, although it's possible. I mean, there were other 

15 periods in which I was TDY. There was never one that was 

16 as long as that. That concludes with this great 

17 punctuation mark of my coming back and going right to see 

18 Colin Powell and Colin Powell being in the building 

19 waiting to see me. That is what makes me think that it 

20 was that one, that is in March, and this could be wrong. 

21 I don't know. I don't have to accept this. As a matter 

22 of fact, it isn't made clear. 

23 Well, okay. This is on Valentine's day. I 

24 don't know that he had it right. I think in some cases 

25 there was a lack of awareness of how this special 



imCtfl^SfFllED 



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ei^tflSl^fFlED 



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1 planning system work-ed and since I was the principal 

2 deputy in ISA, that may have been in some quarters and we 

3 left it that way because it suited me to have them think, 

4 to be wrong about it, to suppose that it was under ISA 

5 but it was not ever under ISA. And I was very specific 

6 at the beginning, when we set this up, that it was not be 

7 under the Assistant Secretary of Defense, and that was 

8 agreed to. 

9 And so I don't know -- 

10 MR. ADLER: What was the question? 

11 THE WITNESS: The question was were we working 

12 on this thing together at this time and the answer is no. 

13 BY MR. SAXON: (Resuming) 

14 Q Let me make clear that I'm not vouching for 

15 the accuracy of that and I'm not trying to impeach your 

16 statement by showing that you did. I'm simply saying 

17 that one particular account says that the two DOD people 

18 who may have worked t2ti» weri you and_Ann"itaq*, and that 

19 maybe you did that with no coordination between the two 

20 of you. I simply wanted to know if you recall any 

21 coordinated effort with Armitage, and your statement is 

22 no, and that is acceptable. 

23 A It is a wrong construction utterly, because 

24 this whole notion of policy level coordination, we didn't 

25 really coordinate, you know. The Secretary didn't want 



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1 to do this, so our position was de minimis from the 

2 beginning and it was a question of finding out where are 

3 and then figuring out how much you have to charge for 

4 them. 

5 And then actually a decision moved then. That 

6 I didn't get involved in and I didn't think — Armitage 

7 may at this time may have known something about it, but 

8 I'd be surprised. My understanding was the guy who 

9 pulled the levers was Colin. 

10 Q Let me ask you to reflect on a meeting you 

11 attended in early February of 1986 at the White House, I 

12 believe on the 8th or 9th of February 1986, and we have 

13 talked about that before. What do you recall about that 

14 meeting on this topic? 

15 A I think as a result of having my memory 

16 refreshed on this I recall that General Secord was there 

17 and there was a representative from the Agency there who 

18 was not normally part of these meetings, and this wasi 

19 ^^^^^^^Vand that^^^^^^Hwas the expediter on the Agency 

20 side, and Secord I had only somewhere in that period of 

21 time come to know that he was involved in this at all. 

22 And there was a discussion of sorts about 

23 where things were and how things were proceeding. 

24 Q Let me offer as Deposition Exhibit 5 a 

25 document that is a CIA document. In the upper right 



ONetlBStBED 



71 



UN^RSSIFIfO 



70 



1 corner of page one it bears the number C-4531, which 

2 means that it is part of the Senate Select Committee's 

3 files received from the CIA, and this particular page is 

4 numbered 4531. 

5 (The document referred to was 

6 marked Koch Exhibit Number 5 

7 for identification.) 

8 It bears the title of Working Draft and it is 

9 dated 3 December 86 and purports to be a chronology of 

10 CIA involvement in the Iran-contra affair. I have not 

11 included the entire document because it is not relevant, 

12 but if you will look at what is page two for you you will 

13 see a paragraph with the date notation 8-9 February 86. 

14 Let me give you a moment to read that. 

15 (Pause. ) 

16 Have you had a chance to read that? 

17 A Yes. 

18 Q Does this seem to refer to the meeting I just 

19 asked about? 

20 A Yes. 

21 Q As far as you recall, is this statement an 

22 accurate reflection of what transpired? 
2 3 A Yes. 

24 Q Is there anything else you can recall about 

25 that meeting? 



Utl€tftSSif4tD 



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UH€iiiW^u:*»^>^ 



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1 A No. I'm trying to remember the details. As I 

2 recall, Ollie had a very precise timetable which he had 

3 related to me on a secure phone. 

4 Q Meaning shipments this day and release this 

5 day? 

6 A Yes. They get so much and we get so much. 

7 And, if I'm not mistaken, all of this was to conclude 

8 with -- it was to conclude with us getting Bill's body 

9 back. 

10 . Q Bill meaning Mr. Buckley? 

11 A Mr. Buckley, yes. But it would be concluded 

12 with some kind of a meeting between ourselves and 

13 representatives of Iran. And again we were not -- at 

14 least I. was not, and my sense was that the others were 

15 all looking towards advancing of rapprochement with Iran, 

16 and I don't know whether that was discussed in that 

17 meeting or not. But when Ollie would talk about the 

18 timetable that is where it eventuated. 

19 Q As I understand what you are saying, then, 

20 your testimony is that it would have culminated in some 

21 meeting with some of f iciallysanctioned government 

22 delegation meeting with a government delegation? 

23 A Yes. 

24 Q Was that given any kind of date? Was there an 

25 end time frame to what you recall about these 



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1 transactions? 

2 A Yes. Eventually there was. In fact, I have 

3 some difficulty now with the timing on this thing. I 

4 just don't recall when this was discussed, but I do know 

5 that it was all supposed to stop with some kind of a 

6 restoration of relations. 

7 Q Do you recall being made aware of why General 

8 Secord was at that meeting? 

9 A No. 

10 -Q Do you remember if it was mentioned at the 

11 meeting? 

12 A No, I don't. It was a part of it that — I 

13 mean, most of it I wasn't paying a hell of a lot of 

14 attention because it seems to me it involved logistical 

15 questions. I'm not sure. When do you move this stuff, 

16 how do you move it, and what's going on at the other end? 

17 Q Do you recall if you were aware prior to that 

18 meering that General Secord had some role in this? 

19 A Ollie told me, not in the first conversation, 

20 I think, but in some subsequent conversation that we had, 

21 that the guy who was running it was Dick, because I said 
2 2 do we have somebody who knows what the hell they are 

2 3 doing, and he said yes, somebody you would have 

24 confidence in. I said who, and he said Dick Secord. 

25 Q When he said he was running it or whatever the 



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1 statement was which came out along those lines, do you 

2 recall what, if anything, else he said? 

3 A I don't remember very well. I mean, it should 

4 be clear that there are big gaps in my knowledge of this 

5 thing. Ollie had this thing rigorously compartmented and 

6 this is the way this work is done. If you do this work, 

7 you know if somebody's not telling you something then you 

8 don't need to know and you don't ask. I mean, it 

9 requires a suppression of curiosity. So I didn't know 

10 exactly what Dick was doing and I didn't ask him either. 

11 Q But it is your sense that at the time this 

12 meeting took place m February of '86 that you would have 

13 known he had some role in it and therefore it was 

14 legitimate and appropriate for him to have been there? 

15 A Yes. I knew before he was there that he was a 

16 player. 

17 Q you referred, I believe, to this meeting 

as ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H Is 

19 correct? I don't mean today, but earlier. And your 

20 sense is that that was the group that was meeting on this 

21 particular occasion? 

22 A I think we expected to meet, that that is what 
2 3 I thought I was going over there for. It wouldn't have 
24 been unusual to be invited, I guess, to a meeting that 

2 5 you thought -- you know, that you were mistaken about 



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1 what its purpose was. 

2 Q The^^^Blater became what? It became a 

3 different group by a different name? 

4 A Well, let me just point out to you, Mr. Saxon, 

5 before we go any further that this -- wait a second. 

6 This is '86, right? Or is it '85? 

7 Q '86. 

8 A It IS '36. And this book is '86, and the 

9 reference here is to a meeting held the 8th and 9th of 

10 Februat-y, this meeting was held, but the dates are wrong. 

11 The 8th and 9th is a Saturday and Sunday. I don't recall 

12 having any meetings in the EOB on this subject on a 

13 weekend. I -may have done it, but I would be surprised 

14 about that. 

15 The question on ^^^^^^| anyway, and this 

16 doesn't have to detain us, but we had a number of 

17 meetings at the White House in the aftermath of the Vice 

18 President's Task Force. 

19 Q On Terrorism? 

20 A On Terrorism, and this had to do with a 

21 protracted disagreement within the Administration on 

22 where was the necessary site from which you would plan, 

23 manage, direct, guide your whole terrorism program. And 

24 this had always been cause for terrible turf battles. 

25 The short of it is that anybody with any expertise 



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1 whatsoever concluded very early on that it needed to be 

2 in the White House and time and time and time again we 

3 had had incidents where we lost people and so forth, 

4 which demonstrated that the way we were structured was 

5 totally wrong, but it didn't matter. 

6 We were going to proceed with the luxury of 

7 keeping it wrong in order to gratify the sensibilities of 

8 various bureaucrats and political appointees at the top 

9 of those bureaucracies. And so in the afterroath of the 

10 Vice President's Task Force, when we agreed at the 

11 conclusion of the task force to leave it the way it was, 

12 again in the face of all evidence and so forth to the 

13 contrary -- that it needed to be moved -- it was quietly 

14 moved. It did go to the White House. 

15 But it was under a kind of cover name and 

16 again it was just one more collateral duty for Ollie. 

17 Q Was that the TIWG, the Terrorist Incident 

18 Working Group? 

19 A No. This is not the TIWG. This is this 

20 and it has a meaning, but it's totally beside the point. 

21 And that eventually metamorphosed into what became to be 

22 called the OSG, the Operations Subgroup, and that didn't 
2 3 mean much either. 

2 4 Q When you left the Pentagon, who took your 

25 place on the OSG? 




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1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 



A My understanding was that it was Armitage. 

Q And when did you leave the White House -- 
excuse me. When did you leave the Pentagon? 

A I left the Pentagon -- I resigned the 30th of 
May. I remained, at the request of Armitage and Ikle and 
the Secretary, for that matter, until this fellow Ropka 
was brought in, and that was the first of August, and 
that's when I left. 

Q And he was your replacement? 

'A He was my replacement, but he didn't do any of 
the things that I did, as near as I could tell. 

Q And his name is what? 

A Ropka. 

Q' R-o-p-k-a? 

A Right. 

Q First name? 

A Larry. 

MR. SAXON: Let's go off the record. 
(A discussion was held off the record.) 
MR. SAXON: Back on the record. 
BY MR. SAXON: (Resuming) 

Q What can you tell us as to your reasons, Mr. 
Koch, for leaving the Pentagon? 

A As I indicated earlier, part of my 
responsibility was for the restoration of special 




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1 operations forces, and this had been a running battle 

2 within the Pentagon. Initially the Secretary supported 

3 it completely. Once it became not merely problematical 

4 but publicly problematical, then one had a sense of a 

5 certain softening there and it was passed over to Taft to 

6 handle it and Taft's handling of it was such that 

7 eventually it created a situation that I thought was 

8 untenable in that he would make one decision this week 

9 and another decision the next week and it looked an awful 

10 lot like the Congress' position on the contras or maybe 

11 even a little worse than that. 

12 And so finally this thing came to a head over 

13 the question of airlift and the Congress had required 

14 that certain things be done by the Pentagon. The 

15 Pentagon, under Taft, acted in a way that circumvented 

16 and totally violated the spirit of the Congressional 

17 decision and I thought did it dishonestly. And finally 

18 it came to a head on that point. I felt that my situation 

19 was one -- and I can submit letters for the record, if 

20 you want — that I could not stay there in the building 

21 and be loyal to the Secretary any longer, because we had 

22 a clear division on this question of special operations. 

23 And so I submitted my resignation over the 

24 objections of Armitage and Ikle and the Secretary called 

25 me within a matter of less than an hour and effectively 



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1 refused my resignation. he said he wanted me to stay. 

2 He needed me there and so forth and would I think about 

3 it. And I thought about it for a couple of days and then 

4 I sent him a letter that explained why I was leaving, 

5 that said that I thought that the management of some of 

6 these issues, particularly the airlift issue, had been 

7 duplicitous and it had violated the intent and the spirit 

8 of Congress and that I didn't feel that I could stay 

9 under those circumstances. 

10 ■' And I must say also this question of my 

11 loyalty in the building, I had always been open, direct 

12 and public about my views on this thing, as I think 

13 generally is known, and the Secretary, that had never 

14 seemed to trouble him. But I felt that it was going to 

15 be necessary to take steps that he would have objected to 

16 ultimately, including in legislation, to oblige the 

17 building to solve these problems everybody recognized we 

18 had. 

19 Q And just to make sure the record is clear, is 

20 it safe to say, then, that your resignation had nothing 

21 to do with any of the matters that our two Committees are 

22 investigating? 

23 A No, not really. Only insofar as I must say 

24 that the management of this whole terrorism business has 

25 been a consistent, I felt, was a disgrace. But it wasn't 



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1 in and of itself sufficient to make me decide it was 

2 necessary to leave. 

3 EXAMINATION ON BEHALF OF THE HOUSE COMMITTEE 

4 BY MR. SABA: 

5 Q Mr. Koch, if you don't mind, I want to go back 

6 over a few things that we have already covered so that we 

7 can understand a little bit better. Going back to early 

8 November 1985, when General Powell called you concerning 

9 the HAWK missiles, why v/ould he have called you as 

10 opposed to anyone else in the building on this subject? 

11 A I have wondered about that myself, and my best 

12 guess -- and you would have to ask Colin -- but this was 

13 sort of my line. I dealt with, even though in a policy 

14 sense, generally an involvement with people who did 

15 covert work, who were not on the intelligence side but 

16 special operations, and this was, I think in Colin's view 

17 at least in the earlier part of this thing, pursuant to a 

18 situation that had been created by terrorism and was 

19 associated in our minds with terrorism. 

20 Q So could we say that the request to you 

21 implied an unusual request or implied that the request 

22 had some involvement with terrorism? 

23 A You could say that. I mean, as I say, you are 

24 asking me to look into Colin's mind, and I can't. 

25 MR. ADLER: Is your question as to what was 



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1 his state of mind when he received the call or 

2 reconstruction? 

3 MR. SABA: Yes, it is what is his state of 

4 mind unless the answer is institutionally that's who he 

5 would always go to. 

6 THE WITNESS: No, no. Institutionally he 

7 could just as well have called Phil Cast or he could have 

8 been very rigorous about the chain of command and called 

9 Fred and Fred could have called Rich, and Rich could have 

10 called Cast or me. 

11 BY MR. SABA: (Resuming) 

12 Q But you would say then that the call to you 

13 was not in the rigorous chain of command? 

14 A It was not rigorous at all. Colin and I had a 

15 good informal, friendly relationship and I was in and out 

16 on issues that were a little bit strange, if you like, 

17 and so I didn't see anything peculiar about this. And 

L 

18 when we asked me, of course, just to be clear about this, 

19 in the initial exchange there was no discussion of these 

20 going to Iran, Israel or for hostages or anything else. 

21 It was just how many HAWKs are there. 

22 And the manner in which it was asked me I knew 

23 that he was trying to hide something initially for his 

24 own, whatever reasons. 

25 BY MR. SAXON: (Resuming) 



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1 • Q Perhaps I was remiss in the beginning by not 

2 asking you to detail specifically what your duties were. 

3 As I understand it, though, one of your duties as the 

4 Principal Deputy Assistant Secretary was that DSAA was 

5 under you in terms of reporting channeltlsj is that 

6 correct? 

7 A That's right. That is right. That is what 

8 the papers which delineate my responsibilities say, and 

9 in fact that is true. But each Assistant Secretary works 

10 a little differently. When I was Principal Deputy under 

11 Bing West, I had a very close and intimate relationship 

12 with DSAA, to the point of replacing its director at one 

13 point. Then, when Armitage took over, he wanted to play 

14 with this and could we go off the record on this? 

15 (A discussion was held off the record.) 

16 MR. SABA: Let's go back on the record. 

17 BY MR. SABA: (Resuming) 

18 Q Just to establish where we are, in your first 

19 request to Gaffney you did not indicate where the HAWKs 

20 would be sent or mention any other countries? 

21 A In my first conversation with Gaffney? I 

22 don't think that in my first conversation that I knew. 

23 Q When you asked him how many HAWKs were 

24 available, did that include HAWKs in the pipeline to 

25 other countries? 



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1 A Yes, it probably did. I don't know if I was 

2 explicit about that. But I just wanted to know how many 

3 HAWKs we had. I think I probably did ask him that. 

4 Q Did you intend in your question? 

5 A It may have been asked to -e that way. You 

6 see, what I said was I think that the way the question 

7 was put was that there was an initial effort to cover 

8 this thing. I mean, let's remember that. Colin Powell 

9 is a creature of the Secretary of Defense in this world, 

10 and the Secretary of Defense doesn't want to do this, and 

11 so at each step there would have been a certain amount of 

12 keep it as minimal as possible. 

13 And so he asked the question because somebody 

14 else needed the answer, but why tell me what it's for if 

15 there's a possibility if they would never have to go 

16 through it anyway. So initially the question was posed 

17 m such a way that it would be so all-encompassing to get 

18 the answer that he wanted, but it wouldn't tell me what 

19 the answer was for. You see what I'm saying? 

20 Q I think I understand. Were you aware at the 

21 time that there were HAWKs being processed for shipment 

22 for transit to Israel? 

23 A No, I was not. 

24 Q Were you aware that there was an outstanding 

25 letter of offer and acceptance for 100 HAWK missiles for 




84 




TOP SECRET/ CODEWORD 83 

1 Israel? 

2 A Not to my recollection, no. 

3 Q Were you aware that on approximately between 

4 the 19th and the 21st of November HAWK missiles were 

5 being loaded on a ship in New Jersey for shipment to 

6 Israel? 

7 A I was not. I don't think I was. 

8 Q Did Gaffney provide you information as to that 

9 shipment of HAWKs either after your first request or at 

10 any time thereafter? 

11 . A I don't know that I ever knew that they were 

12 loading up HAWKs. 

13 Q " Did Gaffney provide you any information about 

14 that 100 HAWK shipment to Israel at any point? 

15 A I don't think he did. I mean, when the 

16 question of Israel came up he must have thought it was 

17 strange, as I reflect on it, that we were sending these 

18 things over there for whatever reason, and we already had 

19 1,000 going. I don't remember that he told me that. He 

20 may have known more than I knew about this. I don't 

2 1 know . 

22 Q In regards to your last answer, how would 

23 Gaffney have known that your question was in respect to 

24 HAWKs destined for Israel? 

25 A I didn't say that. What I said was I didn't 



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1 think -- I asked him the question in as generic a manner 

2 as possible, and I don't remember that my first question 

3 that I knew what the destination was, so I couldn't have 

4 conveyed it to him. And then as the thing went forward 

5 and it was refined and it came back on paper then there 

6 were subsequent discussions and obviously — I mean, 

7 that's why I was a little puzzled by this document. 

8 Q In your subsequent discussions with Gaffney 

9 following your first request to him as to how many and 

10 where; was there mention of HAWKs in relation to Israel 

11 in any way? 

12 A I'm sorry? 

13 Q After that first question to Gaffney, did you 

14 then have a conversation with Gaffney in which Israel was 

15 mentioned in relation to this request concerning HAWKs? 

16 A I don't know. I would assume that I did, but 

17 I don't recall that. The HAWK things were curious. It 

18 started out and then it stopped insofar as my 

19 involvement. 

20 Q In your reporting the information you had to 

21 General Powell did you relate to him the information that 

22 Dr. Gaffney had provided you? 

23 A Yes, sure. 

24 Q In your request to Gaffney did you request any 

25 legal advice? 



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1 A No. 

2 Q Was any request made of you to seek legal 

3 advice concerning HAWKs? 

4 A Mo, not that I can recall, anything like that. 

5 Q When Gaffney provided you with the point paper 

6 or discussed it with you, was there any in-depth 

7 discussion of the legalities of a hypothetical transfer 

8 to Israel and then to Iran? 

9 A I don't recall that. There certainly weren't 

10 in the early discussions. I would guess when he came 

11 back with the paper and I see this is the paper he came 

12 back with that if there were others that he would have, 

13 just in the interest of thoroughness, he would have sort 

14 of given me a comprehensive answer. But I'm still trying 

15 to get clear in my mind that there was an understanding 

16 of what it was we were doing when that understanding 

17 came, and then if there was a discussion of legalities it 

18 would have been -- and again I'm sure that Hank would 

19 have looked at this the same way I looked at it -- it was 

20 not that we were setting out to break the law and we 

21 wanted to find out which law it was we could break it 

22 better or figure out how best to get around it. 

23 But that for the sake of people who don't work 

24 with this thing on an hourly basis, so to speak, they 

25 would give you this is what you are doing so you know. 



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S6 



1 Q Do you know if -- did you ask or make any 

2 legal inquiry of Silber, the General Counsel for DSAA, as 

3 to the legalities of the transfer? 

4 A No. You see, keep m mind whatever else was 

5 clear from this, it was that this was a secret operation 

6 and of necessity and it was secret not for any reasons 

7 involving legality. 

8 Q Just so I understand, do you draw the 

9 conclusion that it was secret because the question was 

10 put to you by Powell or did he tell you that this 

11 involved a secret operation? 

12 A • Christ, I was smart enough to figure that out. 

13 I didn't need to be told that. I mean, for all these 

14 reasons that Hank has laid out it's pretty rudimentary. 

15 I mean, we understood, or I understood, having 

16 responsibility for this terrorism business, what would be 

17 the effect of this or the probable effect of it would be. 

18 And since I had been concerned for as long as I had about 

19 the question of the absence of any policy in the Gulf 

20 toward Iran or anybody, the fact that that would be a 

21 destabilizing, have destabilizing consequences there, all 

22 of these things, you know, made it very clear that if you 

23 began with the assumption that this was the dumbest 

24 goddam thing you ever heard of it, and then work from 

25 there to the very short conclusion that you are going to 



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1 do it anyway, then there is a tendency to want to keep 

2 the dumbest things you've ever heard of, if you are going 

3 to do them, do them secretly and not do them out in 

4 public. 

5 Q But it was your state of mind, then, rather 

6 than anything General Powell said to you that led you to 

7 believe that this somehow involved Iran and Israel? 

8 A You know, it was part of the environment. It 

9 was the atmosphere. It was come on, I've got to see you, 

10 come on down. 

11 MR. ADLER: Wait a minute. I don't think you 

12 heard his question. Would you repeat the question? 

13 BY MR. SABA: (Resuming) 

14 Q So it was your state of mind then, rather than 

15 anything General Powell said to you, which led you to 

16 believe that this was a secret operation, that the 

17 request was in relation to a secret operation involving 

18 somehow Israel and Iran? 

19 ■ A I wouldn't try to get into my state of mind. 

20 The point was simply that I was asked to come down there 

21 and so immediately it was clear that he wants to talk to 

22 me about something that he doesn't want to talk to me 

23 about on an open line. True, he could have called me 

24 secure, but you don't get the same sort of intimacy on a 

25 secure line. Therefore, this is something that is 



I 



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14 
15 



18 

19 
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1 sensitive, extremely sensitive. 

2 And what that sensitivity is you don't know at 

3 that point. Just how many of these things are there? 
Where are they? That kind of thing. And then as it went 

5 forward in our discussions it was clear that this was a 

6 secret operation. 
"7 Q As it went forward was it discussion between 

8 you and General Powell about Israel and Iran in 

9 connection with HAWKs? 
A I don't remember when the question of Israel 

11 presented itself. I mean, I think it was presented in a 

12 very gross way at first, and that was that we were giving 

13 them to Iran and giving them to Iran for the hostages, 
and whatever the number was -- I don't remember what I 
have -- and it was just the two of us, in effect, not 

16 kibitzing but sort of trying to figure out what does all 
1"^ of this mean, working with numbers the best we knew at 

that moment, and we estimated that what we were doing was 
paying a quarter of a billion dollar ransom for these 
people and I just thought it was crazy. 

21 So then there was the question of Israel. How 

22 was it being done? And it turns out that we were deep 

23 into this thing before I realized it was not a giveaway 

24 but it was a sale that we were talking about. 

25 Q At that time, focusing on HAWK discussions. 



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1 did General Powell indicate from where the request came 

2 as to HAWKS? 

3 A No. 

4 Q What caused him to originate his question to 

5 you? 

6 A No. 

7 Q Did he indicate in any way that he was 

8 involved in conversations with Colonel North on the 

9 subject of HAWKS? 

10 -A Not in our early discussions. 

11 Q In what discussions then would he have been 

12 involved with Colonel North and HAWKs? 

13 A Subsequent discussions. 

14 Q When would they have taken place? 

15 A Well, we're talking about an event that is 

16 somewhat compressed anyway. It begins in maybe the first 

17 or second week of November and by December I'm into TOWs 

18 here. As I said, this thing just went away. And when 

19 Ollie was discussed in conjunction, or even if he was, I 

20 don't know. I mean, I just can't recall how we made the 

21 transition from the general to the specific, from fairly 

22 close hold to it is Iran, Israel's in it, Ollie's in it 

23 and so forth. 

24 Q In this compressed conversation over those 

25 several weeks in November was there any discussion of 



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1 HAWKs in the pipeline in connection with any of these 

2 people or matters? 

3 A I don't remember that there was. 

4 Q I'm about to begin another area. Roger, if 

5 you have a question on the pipeline, I'm going to move to 

6 another area. 

7 MR. KREUZER: I have a different area. 

8 MR. SABA: Do you want to wait until we get 

9 there? 

10 • MR. KREUZER: All right. 

11 BY MR. SABA: (Resuming) 

12 Q Moving down to the matters concerning your 

13 meeting with Ben Yosef, how did you understand it to be 

14 that Ledeen had negotiated a price for U.S. TOWs with 

15 Israel? 

16 A I didn't understand it all. All I knew was 

17 what Ollie had told me, was that Bud had started this 

18 thing and Ledeen had been the operator in it and had 

19 screwed it up, as he said. But why Ledeen would be in it 
2 I couldn't figure that out. Ledeen had worked for me for 

21 a while and was on my payroll as a consultant and 

22 eventually I squeezed him out of there because he didn't 

23 know anything about terrorism, when he was supposed to be 

24 an expert on terrorism. 

25 So how he got into this I didn't know except 



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1 he tended to float from department to department, from 

2 State to Defense to the White House and then he tried to 

3 come back to Defense. 

4 Q Why does Ollie tell you to negotiate with Ben 

5 Yosef, and I'm asking again in an institutional sense? 

6 A No reason. This is -- what Ollie is trying to 

7 do is to keep to an absolute minimum the number of people 

8 who are knowledgeable about this, for whatever reason, 

9 which had to do with Colin or something else, I don't 

10 know, but I'm in the box now, and so you suddenly, once 

11 you make that departure from bureaucratic norms, you're 

12 in a state of willy-nilly. 

13 And so he says I need this done, and this 

14 becomes this little band of brothers that are functioning 

15 in effect. Why me? Because suddenly, as nearly as I 

16 could make sense of what Ollie was telling me, was that 

17 here was another hot potato that had been handed to him 

18 and it was alive and cooking, whether anybody liked it or 

19 not, and so -- I mean, there may be a certain amount of 

20 improvisation in this thing where it started out to get 

21 the hostages but I think there's no question in my mind 

22 it started out to get the hostages back. 

23 I mean, I could almost go back to little 

24 signals I got from the Israelis and so forth, but it 

25 began there and then as Ollie took it over he began to 



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1 think in terms of the larger purposes of what values 

2 might be served by this. 

3 But however this was, he had it and what he 

4 was doing was compartmenting this thing and limiting it 

5 to people he could depend upon. 

6 Q When he asked you to speak with Ben Yosef, did 

7 you report that fact to Powell? 

8 A I'm sure I did. 

9 Q In preparing for your conversation with Yosef 

10 you mentioned that you had a floor on a price for the 

11 TOWs. Did you indicate that you knew of a ceiling on the 

12 price? 

13 A No. I don't remember that there was a ceiling 

14 on the price. The ceiling on the price was just like if 

15 you've ever been to Rasuk's to buy a rug, you know. The 

16 ceiling of the price is what he is willing to pay. 

17 Q So you weren't informed there was a number 

18 above which you couldn't go other than what's 

19 ■ commercially reasonable, of course? 

20 A I don't understand. Well, the answer is no. 

21 MR. SAXON: Make sure there's no confusion 

22 here. In your question, Joe, you are talking about per 

23 TOW, a ceiling -- whether it's $5,000 or $6,000 or 

24 $8,000. 

25 THE WITNESS: Do you mean the numbers of TOWs? 



94 



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1 MR. ADLER: You are talking dollars, price? 

2 MR. SABA: I'm talking about price. 

3 BY MR. SABA: (Resuming) 

4 Q I asked the question because I understood you 

5 to say earlier that Rudd gave a higher price than you 

6 were willing to negotiate. 

7 A No, no. I think what was said was that he 

8 said the lowest they had ever sold one before was $6,800 

9 and I didn't -- nobody else put a restriction on me. But 

10 as I sort of doped out or calculated the negotiation in 

11 my mind I was pretty confident that they wouldn't go that 

12 high, particularly if you are beginning at $2,500, which . 

13 has no absolute authority. But it is there. It has been 

14 negotiated once by an agent of the U.S. Government, 

15 legitimate or not. 

16 And to drag them up there to almost three 

17 times what had been negotiated -- 

18 Q Was there any discussion between you and Ben 

19 • Yosef as to the price of HAWKs? 

20 A I don't remember that ever being discussed. 

21 Q Was there any discussion of the price of any 

22 weapons other than TOWs? 

23 A I don't remember that either. I think it was 

24 just TOWs. 

25 Q Was your discussion with Ben Yosef limited to 



UMtl/iSWlID 



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1 those TOWs which Israel had already transferred? That 

2 is, was it a retroactive negotiation or was it also 

3 prospective as to possible future transfers? 

4 A I think it was both. I think it was both. I 

5 don't remember. Even to this day it is not clear that 

6 they recovered the initial tranche that went in. I just 

7 don't know. But I think I don't have a good recollection 
3 of that. I mean, it seems to me we were talking about 

9 dollars and it wasn't like Major Major's eggs where you 

10 can make it up on volume. If you bought one TOW it was 

11 whatever we came up with. If we bought 5,000 it was the 

12 same thing. 

13 Q Turning your attention to the meeting at 

14 roughly somewhere in the first ten days of February '86 

15 at the White House where General Secord took part in the 

16 meeting, you indicated that you were aware prior to the 

17 meeting that he was involved. How were you aware? 

18 A Because Ollie had mentioned that in one of our 

19 conversations. That was something along the lines of 

20 who's running this thing. Who do we have doing it? And 

21 he said somebody that you have confidence in. 

22 Q Did Ollie mention in particular why Secord was 
2 3 involved? 

24 A No. 

25 Q wj's there any discussion as to — 



yNCLBSlHED 



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1 A No. As soon as he mentioned, it would have 

2 been self-evident. 

3 Q Was there any discussion or questioning as to 

4 the need for a commercial cutout? 

5 A No, never. 

6 Q Was the discussion at this February meeting at 

7 the White House concerning a transfer of TOWs which the 

8 CIA would shortly make? 

■ 9 A Yes, I guess so. I think so. 

10 Q And was there any discussion in that meeting 

11 as to the role Secord would play? 

12 A I don't remember exactly. Secord was — let 

13 me try to elaborate this for you a little bit here, for 

14 what it's worth, just as an explanatory footnote. You 

15 say was there any discussion of why you had to go private 

16 and the answer was no, and that may sound a little 

17 strange to you because why would you do that when you've 

18 got this vcist panoiily of stu£f .that the taxpayers had 

19 bought to do things i.i^ that. '"■ -^- 

20 =4pd if you 1?ent tht» «oute you. amst.ije trying 

21 to circwHCBnt ttt^S^^ST. ^^Bqtt^vfiac^^A iiMl'-«xperJ:ence 

22 after «acper^picji^^^t^ jBtggrian^fe^i^g^wrth^j^gaverrim^ft — 



2 3 to ^ry to get j|K^ y >vegfta«ntr to "^a thtngpt i4 ought to do , 

2 4 to try to get^tha Central I^»lli^nc« Ager^ to take 

25 certain m^p s or^tJt- leaiW' to corwider tb^^posslbility ot^^ 



mtm^rmi 



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UNCLASSIFIED 



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1 certain steps to deal with^ agong other things, th« 

2 problem of terrorism. '-- _ -- 

3 We had had instances in which we needed to get 

4 the military to respond and almost invariably they would 

5 screw it up somehow. There was one event where we had 

6 three airplanes broken trying to get them off the ground 

7 in the Middle East to take a survey team over there to 

8 work on an incident that was live at the time. And so it 

9 was -- and then, of course, you had the differences of 

10 opinion, you know, between the services. 

11 The Army has no confidence in the Air Force. 

12 The Air Force doesn't care whether the Army has any 

13 confidence in it or not. It is going to go its own way 

14 and do its own thing regardless. And so the Army then 

15 goes out and hires its own airplanes in the private 

16 sector. I mean, you've got this kind of stuff. So when 

17 you live in this environment after a while you decide 

18 that if you're going to do anything in furtherance of 

19 your country's interests then you're not going to do it 

20 through this damn bureaucracy. 

21 And it doesn't have anything to do with 

22 circumventing the law. It has to do with circumventing 

23 the absence of leadership and people's willingness to 

24 make the goddam thing work. So if you can't get it to 

25 work, you go and you find people that do know how to do 



viiiciisstf*^^ 



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1 it, and if they are willing to do it you hire them and 

2 get them to do it. 

3 Q Was there any discussion in the meeting 

4 concerning the financial arrangements? 

5 A Not that I know of. There may have been. 

6 MR. ADLER: With Secord? 

7 MR. SABA: With Secord. 

8 THE WITNESS: For how they were being paid on 

9 this thing? No, I don't know anything about that. 

10 ■' BY MR. SABA: (Resuming) 

11 Q That was my first question. The second one 

12 were financial arrangements concerning the sale of the 

13 TOWs, first the procurement by CIA from DOD and, second, 

14 the price of CIA to Israel. 

15 A I don't remember. You would have thought I 

16 would have taken a proprietary interest in that, but I 

17 don't remember. 

18 BY MR. KREUZER: 

19 Q Sir, you mentioned earlier that one or perhaps 

20 a primary consideration for your resigning and you were 

21 asked to think over a couple of days and you thought it 

22 over, and I put in my resignation, and one of the things 

23 you mentioned was you didn't like the management of the 

24 airlift issue. 

25 And lait week we were discussing airlift 



UNCLftSSif?€0 



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UNC44SStRED 



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1 contracts and I believe we were discussing the fact that 

2 Richard Gadd had an airlift contract with Army and that 

3 Air Force took exception to the fact that he had that 

4 contract. And you said that in spite of the fact the Air 

5 Force could not provide the service, they didn't like the 

6 fact that Gadd had this contract. 

7 A The Army had the contract. 

8 Q The Army had the contract with Gadd and 

9 therefore they wanted the Army to kill this contract with 

10 Richard Gadd and they wanted to have the contract in 

11 spite of the fact they couldn't provide the services. 

12 A That is not exactly the way I stated it. 

13 That's not the point. I mean, it's so bizarre that maybe 

14 it's difficult to get the point. But the thing is the 

15 Air Force position was anything that has wings on it is 

16 our domain. Now helicopters don't have wings on them. 

17 They don't give a damn about them. 

18 They wanted the Army to have the contract for" 

19 fixed wing aircraft. They also wanted to contract 

20 themselves so they would administer the contract. That 

21 may not sound bizarre to you, but it does to me. Once 

22 you've got to go down to Acme to hire your own air force, 

23 what the hell difference does it make who does the 

24 hiring? 

25 Q Now was this what you were referring to just a 



umH^^SIFlt^ 



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1 few minutes earlier when you said this was a 

2 consideration that drove me to resign? 

3 A It was that sort of thing, yes. That was only 

4 one. That would almost be one of the acuter symptoms of 

5 the problem. 

6 Q Now when you left or maybe just prior to the 

7 time you left you mentioned that you were offered a 

8 position by Mr. Gadd with I don't know what firm. 

9 A No, no, no. I don't want to overload that, 

10 Roger. What I said was that Dick had talked to me about 

11 either would I like to ^ome with him or, barring that, 

12 could he be helpful to me in any way in setting up a 

13 company. And it was really just a good faith offer. 

14 I've spent a lot of time in the last six years doing 

15 things that have not ingratiated me with the Pentagon and 

16 therefore with all of the defense contractors and 

17 everybody else — the sort of thing usually go to the 

18 Pentagon to get rich. 

19 You know, you spend a year and so many weeks 

20 and days there and then you go out and take a job as a 

21 Vice President for Rockwell or someone like that. And so 

22 I sort of had done things that this small community, the 

23 special operations people appreciated, and so it was not 

24 unusual for them to be helpful to me where they could be, 

25 purely out of, as much as anything, gratitude. 



UNCtlKSWO 



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18 
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20 
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22 
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24 
25 



Q Would Gadd qualify as a member of that small 
community of special operations types? 

A Sure. 

Q Did you maybe perhaps -- you, I believe, last 
week said you started your own operation. You were in 
the antiterrorist business. Was that perhaps a reason 
why you didn't go m to work for Gadd? I mean, he is not 
exactly in the same kind of business as you are. 

A Well, I don't know if there is any particular 
reasoh why. I just didn't want to do it. I just wanted 
to do what I wanted to do. 

Q Did you maybe subsequently strike any 
contracts with him? 

A No. So there's no confusion, so this doesn't 
come up out of the blue anywhere -- and I don't care 
whether you take it off the record or not -- there was an 
effort on my part while I was still in government to 
design a computerized exercise for purposes of training, 




UlfCLA^SIFTED 



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UHClASSJflED 



101 




1 

2 

3 
4 

5 talked to some people who were smarter than I about 

6 computers and tried to, in as innocuous a way as 

7 possible, without divulging anything, to devise a game 

B that a person could play against a personal computer that 

9 he could carry with him on a plane or whatever and that 

10 was a- terrorist game. It was a terrorist exercise in 

11 effect. 

12 And so Dick had the kind of people that could 

13 do this. Some of these guys who come out of these deals. 

14 And so for a long time we played with it and eventually 

15 we came up with a proposal, or they did, which sounded 

16 sensible and it went to -- it was a sole source deal. It 

17 was wired and American National Management had it. Then 

18 apparently there was some kind of — some sort of a 

19 disagreement within the company and there was an 

20 allegation that the follow-on contract for the computer 

21 or the implementation of this thing had been bid and it 

22 just was such that it began to look like there would be 

23 not any illegality or wrongdoing but the appearance of 

24 it. 

25 And I didn't want to be involved with any 



UftCLA^tPED 



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UNGLASSt^D 



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1 appearances or realities, and so I immediately told the 

2 people who administered these contracts that I wanted 

3 this thing stopped. I want a complete investigation run 

4 to see whether I or anybody else had done this. And that 

5 was stopped and the investigation was run and it was 

6 discovered, as we all knew, that everybody was totally 

7 clean. By that time I had left. Ropka was there and I 

8 think it was his decision not to resume this. 

9 Q Now was this all more or less in the 

10 compartment of special operations? 

11 A Special plans. 

12 Q And in your special plans role did you get 

13 involved with any kind of planning with the contra 

14 effort? 

15 A Ko. 

16 Q Nothing about that? 

17 A No. 

18 Q In your discussions with Mr. Gadd did he ever 

19 discuss contra operations? 

20 A I don't recall that he did, no. I don't think 

21 he did. 

22 BY MR. SAXON: (Resuming) 

23 Q Let me see if we can cover a good bit of 

24 ground in the 30 minutes or so we have remaining. Mr. 

25 Koch, you were involved in November of '85, late '85, in 



UNCM^IB 



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1 discussing HAWK missiles but you were not involved, were 

2 you, with the later April '36 HAWK missile repair parts 

3 issue; is that correct? 

4 A I know nothing about that. 

5 Q Were you involved at any point in looking at 

6 the HAWK systems in late '85 or the TOWs in early '86 in 

7 looking at the issue of readiness and whether there would 

8 be an adverse impact on our readiness to make these 

9 transfers? 

10 -A No. I wouldn't be in a position to make that 

11 call anyway. That would be kind of the sort of baggage 

12 that would sort of come back to you just like the laws 

13 that govern and the rest of it, and that would be one of 

14 the things that they would automatically tell you when 

15 you got into one of these things and you could ask the 

16 question pursuant to your kid's homework that night, you 

17 know. I mean, that would be one of those things that 

18 they would tell you automatically. 

19 Q I believe you told us before that readiness 

20 was sort of the battle cry of a lot of people at the 

21 Pentagon. 

22 A Well, readiness was always an excuse for not 

23 doing anything. You could always say they are saving 

24 themselves for the prom. 

25 Q At what point did you fill in Dr. Ikle on the 



UNtLASSIft£9 



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UI«)tftSStf*ED 



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1 issue of TOWs to Iran? 

2 A I don't remember. I didn't say anything to 

3 him initially, and then I began to be concerned because 

4 it put me in a position where I was going around him. 

5 Now it didn't bother me to go around Armitage, because 

6 Armitage wasn't in this loop to begin with. I mean, I 

7 saw myself dealing with this thing with my special 

8 planning hat on, and in that regard it seemed to me it 

9 was all right to be working directly with the third 

10 floor. 

11 But I did not want somewhere down the road for 

12 this to come o'lt and to have Fred, purely on the basis of 

13 personal relationships, to have Fred feel that I had 

14 colluded and gone around him. And I suspect that I 

15 probably did it -- I may have even done it after I 

16 realized Armitage was in the box. I may have done it 

17 then because I was afraid he wouldn't tell Fred, and so I 

18 thought Fred should not be in a vulnerable position. 

19 ■ Q Do you recall what his reaction was when you 

20 told him? 

21 A I don't know what you know about the Swiss, 

22 but they are not awfully demonstrative. 

23 Q But it was clear, I believe you said earlier, 

24 that when you told him it was clear to you that he had 

25 not known. 



U^fOtlWfD 



106 






SECREj/gcjDEMok>=^ 105 

1 A No, he didn't know. And I think he just asked 

2 a few casual questions. I mean, if I said that to you 

3 out of the blue, it is sort of w/i/afrd anyway and you 

4 wouldn't know. I mean, one might ask the penetrating 

5 questions, but you don't have them available. 

6 Q Let me ask you a question or two about this, 

7 and I don't want to be misunderstood. I'm not trying to 

8 prejudge and we certainly have the benefit in asking 

9 these questions of hindsight and all of this. But you 

10 have indicated fairly strongly that you thought there 

11 were some policy problems at least in the early stages 

12 with this as to how we dealt with our allies and stated 

13 policy on terrorism and a different policy and practice, 

14 et cetera. 

15 And Dr. Ikle was the Deputy Under Secretary 

16 for Policy. Did you not at least ask General Powell at 

17 some point does Fred know about this? Should we clue him 

18 in? What does he say? Et cetera? 

19 A No. 

20 Q Compartmented operations just don't work that 

21 way? 

22 A Well, that would be one excuse for not doing 

23 it, sure. I mean, I would just leave it at that. I 

24 didn't ask him and I didn't expect him to tell Fred. 

25 Q What was the point at which you first learned 



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9 

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14 

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24 

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m\ 



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^/ 



that some funds from the arms sales to Iran might be 
diverted to the contras? 
A November 25. 

With the Attorney General's press conference? 

Yes. 

So Colonel North never told you prior to that? 

No. 

And General Secord never told you prior to 



Q 
A 
Q 
A 
Q 



that? 



No. 



,A 

Q Is it clear to you that when you were talking 
about TOWs in early '86 and you were negotiating with Mr. 
Yosef on the TOWs that you had a ceiling of $12 million 
with which to work? 

A I have somewhere in my mind that $12 million. 
You didn't put it there. You sort of called it back to 
life, I think. I don't remember how it got there. 

Q And I don't want to put words in your mouth 
either, but do you recall that wherever that figure came 
from that it was fixed and that that is what we had to 
work with? And if not, fine. 

A I don't know. I don't know. I'm just 
fascinated by the way the thing jumps around. I don't 
think the point of that $12 million was to elude the $14 
million threshold, and I can't reconstruct enough of it 




e 




108 



y 




107 



1 in my mind to know where it came from, whether it came 

2 from Ollie, was there some fund that was fixed that they 

3 were going to pay for it with, or what. I don't know. I 

4 don't remember. 

5 I do remember $12 million. 

6 Q Do you recall Mr. Rudd saying to you that in 

7 his best judgment there was no way 4,000 TOWs could be 

8 provided for less than about $25 million? 

9 A Yes. I mean, I can see that in the 

10 conversation which involved pricing numbers. 

11 Q And that some of the TOWs were old and maybe 

12 there could be some discounting here and there in terms 

13 of shelf life, but by no means would it get down even 

14 below $14 million? 

15 A Well, again, I mean, I don't put these things 

16 together — the threshold and the $12 million. 

17 Q Can you recall any other statements that 

18 Colonel North may have made to you during this time 

19 period, any of these time periods, about the President's 

20 statements to him or the President's state of mind on 

21 these matters? 

22 A Just what I told you. You see, it may have 

23 been that somebody told me that. I mean it may have been 

24 in conjunction with -- well, I don't know. I don't want 

25 to speculate too far, but if somebody else had in mind to 




109 



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<i\-sU\ 



stay under tTiaT notification threshold, I may have been 
told whatever you do, don't go over $12 million. 

And it would be like the initial request of 
tell us where all the TOWs in the world are, where all 
the HAWKs in the world are. It's intended to cover 
intent, and so if you asked, you know, stay under S12 
million, one could see that that might have been intended 
to cover the intent. 

Q If you had been told that, is it fair to say 
that likely there are only two people who would have told 
you that -- either Colonel North or General Powell? 

A Yes, I would say sure. 

Q And you think one of them might have said 
that? 

MR. ADLER: Said? 

MR. SAXON: Might have said you've got $12 
million and that's all we've got to work with? 

THE WITNESS: Yes. It would have had to have 
been. 

BY MR. SAXON: (Resuming) 

Q Do you know which one it might have been? 

A I would have to flip a coin. You know, I 
understand the point, but if Ollie is the daddy rabbit in 
this thing, either I got it directly from Ollie or I got 
it from Colin and he got it from Ollie. 



IMISSMD 



110 



IIWUSSiBED 



109 

1 Q What can you tell us about Colonel North's 

2 relationship to Director Casey? 

3 A Only that he wasn't invoking the name or name- 

4 dropping or anything like that, but in context Mr. 

5 Casey's name would fit periodically in discussions that 

6 we were having. 

7 Q Do you specifically recall Casey's name coming 

8 up in the context of HAWKs to Iran in late '85 or TOWs to 

9 Iran? 

10 A No, I don't. I mean, I know that Casey's name 

11 came up a lot, and it came up, and I'm not being snide or 

12 anything but we're dealing with a hell of a lot more 

13 things than this, and so even these players were dealing 

14 with more things than this on a regular basis. So there 

15 were a lot of things that we were doing in which the 

16 DCI's position and thoughts or Ollie's relationship with 

17 him would have been a natural part of the thing. So 

18 inevitably that would get mixed up in my mind. 

19 Q You said you told us earlier you thought you 

20 had two meetings with Secretary Weinberger about TOWs. 

21 You've talked about one of them. Are you able to recall 

22 anything about the second one or why you even thought 

23 there was a second one? 

24 A Occasionally I would be in there talking to 

25 Colin and the Secretary would come into the office. I 





Ill 




110 



1 mean, this was in the air. It was very much between us. 

2 But I do have a recollection of two meetings in the 

3 office, but I can't give you any more information, I 

4 mean, what was the other one like or not. 

5 Q Did you ever see Secretary one-on-one on this 

6 topic? 

7 A Never. 

8 Q Was there any particular reason you wouldn't 

9 have done that? 

10 . A I would have preferred to have somebody there 

11 so there would have been no question about what was said, 

12 and I think Cap would for the same reason. The only 

13 times we ever spent any time together would be in the car 

14 driving back and forth to the White House. 

15 Q But you say that in the context of a covert 

16 operation and the fact that with things being covert 

17 there is a good likelihood of misunderstandings? 

18 A Well, in the context of something that the 

19 ' players find distasteful, and one of them is in the 

20 position of authority and he doesn't have any way on this 

21 thing and doesn't necessarily want it to happen in the 

22 first place. I mean, in some measure it would have to do 

23 with keeping people's hands on top of the table. I don't 

24 mean there's a lack of trust or anything like that, but 

25 you know how these things play themselves back later on. 



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2 

3 

4 

5 

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11 

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So I would just have preferred to have Colin 
there and I think he would have, too, and I think Colin 
would have preferred to be there, because you want to 
minimize in anything this delicate the opportunities for 
misunderstanding or miscarriage. 

Q Are you familiar with the^^^^^^^^H system? 

A Yes. 

Q To your understanding did the shipment of Army 
TOW missiles to the CIA with the destination of Iran go 
the ^^^^^^^^Bsy stem? 

A My understanding would be that would bg the 
normal procedure, that they would go throughj 

Q That would be the normal procedure? 

A I think so. 

Q Do you understand that that happened in this 
case? 

A My understanding from being told, I think, by 
yourself was that it didn't happen. 

Q But that really came later in your involvement 
in this? 

A Yes. I didn't know how it was done. As I 
said, I didn't know. Any time anything moved, I didn't 
know anything about it. 

Q At the point at which you left the Pentagon or 
subsequent to having left the Pentagon but prior to all 




\3W S 







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tHCttSS^^FJ 



112 



1 of this breaking within the November '86 time frame, the 

2 Attorney General's press conference and the weeks 

3 preceding, did you ever ask any of your former colleagues 

4 whatever happened on the arms to Iran initiative, if they 

5 had gone forward or whatever? 

6 A I would have occasional -- understand I didn't 

7 leave the Pentagon until August and this thing went tits- 

8 up in November and so I was on a fairly regular basis 

9 apprised of what was happening from within. 

10 .Q Who would have kept you apprised? 

11 A There was a long period of time in which 

12 nothing happened. There would have been times in which 

13 Rich would come over and say sort of where things were 

14 and I can't give you chapter and verse, but there were 

15 other times when I knew from talking to Dick. 

16 Q And so when you talked to General Secord did 

17 he tell you about his full role in all of the arms 

18 shipment end of it? 

19 A No, he never did. And my interest, of course, 

20 my most profound interest was in what was going to happen 

21 to eventually get this relationship with Iran on track, 

22 since there was no way to defend it. I mean, it was a 

23 mess militarily. And the other thing was, in a more 

24 casual way, was getting this hostage things straightened 

25 out. And, of course, in the meantime more hostages had 



mia^STFJED 



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113 

X been taken. 

2 And so from time to time he and I had 

3 conversations about that. 

4 Q Were you ever party to any discussions at the 

5 Pentagon or with your former Pentagon colleagues after 

6 you left the Pentagon that the taking of additional 

7 hostages was in any way related to our willingness to 

8 swap arms for hostages? 

9 A I'm sorry. Say that again, please. 

10 Q Were you ever in any discussions in which 

11 Pentagon officials linked, speculatively linked, the 

12 taking of additional hostages to our apparent willingness 

13 to make concessions or swap arms for hostages? 

14 A I don't remember. The Secretary made the 

15 point, that was one of his arguments, that that would 

16 happen, and it did. But I don't remember that. 

17 Q In your conversations with General Secord did 

18 he ever mention to you his contra side of all this? 

19 A No. We had one conversation which was 

20 prompted by, again going back to my earlier comments 

21 about this community being fairly small and people 

22 talking to each other, and at some point in this there 

23 came up, maybe through General Singlaub or whatever it 

24 was, that some complaint that Dick had made a lot of 

25 money on some aircraft that he had sold to the contras. 



UNffiHSStflEO 



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lift; 




114 

1 And so X asked him. One night we were having 

2 a drink. I said I understand that, you know, some people 

3 are upset with you and they said that you have made a 

4 killing on some Maules, and he said how can you make a 

5 killing on an airplane that cost $65,000 or whatever it 

6 cost? I mean, he totally dismissed and denied it and I 

7 believe his denial. 

8 MR. ADLER: Let me ipterpose something. Your 

9 question about conversations with General Secord, I think 

10 we sitting here had a time reference but could you give 

11 us a time reference in terms of up until what date and 

12 make certain then that his answer was responsive to that 

13 date? 

14 MR. SAXON: Sure. 

15 BY MR. SAXON: (Resuming) 

16 Q Prior to the Attorney General's press 

17 conference — and let's say from November 24- backward, 

18 with the AG's press conference taking place on the 25th, 

19 prior to that period with anybody who knew anything about 

20 contras in any conversations you had with General Secord, 

21 did he ever mention that in addition to working some 

22 deliveries, whatever, on the Iran side I've been doing 

23 some things for Ollie on the contra side? 

24 A No. 

25 MR. ADLER: Let me get one other thing on the 



UNCLISMO 



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115 

1 record. That rather lengthy answer you gave, what time 

2 period was that responsive to in your own mind? 

3 THE WITNESS: What lengthy answer? 

4 MR. ADLER: About your conversations with 

5 Secord about the Maules and so forth. 

6 THE WITNESS: It would have been sometime in 

7 the summer of '86 probably, maybe even earlier. 

8 MR. ADLER: Okay. 

9 BY MR. SAXON: (Resuming) 

10 ■ Q Since the time you left the Pentagon have you 

11 — let me retract that. Let me ask you more generally 

12 what is the nature of your relationship with General 

13 Secord? 

14 A I consider him a close friend of mine. 

15 Q And how long have you known him? 

16 A Since 1981. 

17 Q You met him when you first went to the 

18 Pentagon? 

19 A Right, and presently I am a trustee for a 

20 legal assistance fund for him. 

21 Q When you left the Pentagon did you continue to 

22 have conversations with him, see him periodically, et 

23 cetera? 

24 A Yes, regularly. 

25 Q Have any of those discussions or conversations 



imctissififD 



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UHttmiF4iD 



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1 involved doing business together? 

2 A Yes. 

3 Q And are you currently in business with General 

4 Secord in any commercial enterprise? 

5 A I don't know how you define that, but the 

6 answer, I guess, is no. 

7 Q Excepting the legal defense fund are you doing 

8 business with General Secord? 

9 A No. 

10 .Q But you have had some discussions along those 

11 lines? 

12 A Yes. 

13 Q This would be in terms of your security kinds 

14 of things that you are currently doing? 

15 A Yes. I mean, it would all be tied together, 

16 sure. 

17 Q When you were at the Pentagon was General 

18 Secord a consultant to ISA after he left? 

19 A I guess he was. I mean, he left under pretty 

20 outrageous circumstances and I think they did him a 

21 consultancy just to salve their own consciences. I don't 

22 remember that he ever did anything. 

23 Q Can you tell us what the SOPAG is? 

24 A The SOPAG is a unit that I set up back in 

25 probably '82- '83 which is the Special Operations Policy 




ui^jf iLU 



118 




IjLHCrJ'^^^^ 



mm 

117 



1 Advisoiry Group. 

2 Q And after you left the Pentagon was there a 

3 point at which General Secord became a member of the 

4 SOPAG? 

5 A He was on the SOPAG before he left the 

6 Pentagon, I think. I'm not sure when he came on. I 

7 mean, I think I asked him when I immediately formed it, 

8 and I don't remember whether I formed it before he left 

9 or not. 

10 • Q Do you recall were you a party to discussions, 

11 decisions or just know generally the circumstances under 

12 which he left the SOPAG? 

13 A He didn't leave. He was taken off it by Rich 

14 Armitage. 

15 Q And why would that have been? 

16 A Well, I don't know. I mean, ostensibly the 

17 reason was because he hadn't submitted a financial 

18 disclosure statement, but Dick would have seen the delay 

19 in that submission as related to the legal situation in 

20 which he found himself, in which he had, through some 

21 chain of legal causation, had to do with his Fifth 

22 Amendment rights. And so that was taken as an 

23 opportunity to put him off the SOPAG. 

24 Q Let me have you mark as Exhibit 6 these 

25 documents, the cover of which is a letter from 



mmm 



119 



mH hQ^'vlVi 



lis 

1 Congressman Lee Hamilton as Chairman of the Permanent 

2 Select Committee on Intelligence to Secretary Weinberger 

3 bearing the date of November 25, 1986. The cover letter 

4 simply says that enclosed is a transcript of some 

5 testimony the Secretary provided and then also some 

6 questions for the record. 

7 (The document referred to was 

8 marked Koch Exhibit Number 6 

9 for identification.) 

10 • If you would look in this letter, by the way, 

11 it bears the numbers D-51, and that is the Senate Select 

12 Committee's document number D-51. The next page has D-83 

13 on it, and it says the subject is Questions and Answers 

14 for the Record from the Secretary of Defense. 

15 If you look down at number four, it asks did 

16 General Secord have any kind of consultant contract, et 

17 cetera, and it goes /^nto basically tell us what you just 

18 told us. The next page, D-84, numbered paragraph five: 

19 Was General Secord dropped from one of our committees for 

20 failing to execute a financial statement? 

21 And further down the paragraph it says in 

22 Secretary Weinberger's answer: Major General Secord' s 

23 membership on the SOPAG was terminated effective 4 August 

24 1986 based upon his failure to provide the Department 

25 with financial information as required in form SF-1555. 



WMMS 



120 




Dgi 119 



1 A So that would be before all this came up, 

2 right. 

3 Q It would be before it all broke, yes, in terms 

4 of the press in November. And then Secretary Weinberger 

5 references, he says amplifying information is enclosed at 

6 Tab C, and if you look at the last page, D-101, is that 

7 attachment, that Tab. And under the date of appointment 

8 column it says "termination based on Secord's refusal to 

9 provide SF-1555." 

10 A But this was, it says, forwarded. 

11 Q Forwarded to Personnel on 10/23/86, with the 

12 effective date of 8/5/86. That is correct. 

13 A The 23rd of October, then. Well, so what's 

14 the question? Let me point out some things that are 

15 interesting here. Dick is the only one that I know who 

16 never took, who was never paid. He was on this SOPAG. 

17 He did come to meetings and he never put in for payment. 

18 It's his understanding, and it is mine, that 

19 ■ the failure to provide the financial information which 

20 was essentially a spurious reason for putting him off — 

21 why he didn't provide it, I don't know — but I thought 

22 it was benign, and I will until I hear a better 

23 explanation. 

24 Q That's fine. We're simply showing you this to 

25 see what, if anything, you can say to shed light on the 



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Why would they have - well, okay. Never 



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situation. 
A 

mind. 

Let me ask you now about and let me have 
:^arked as Deposition Exhibit Number 7 a newspaper article 
that appeared in the Philadelphia Inquirer on 



1987. 



March 24, 



(The document referred to was 
marked Koch Exhibit Number 7 
for identification.) 
For our purposes really the first few 
paragraphs are the ones that are relevant. it talks 
about General Secord's problems and says: Retired Air 
Force Major General Richard E. secord, a key figure in 
the Iran-contra affair, acted "at the bidding of the 
highest levels of the U.S. Government" according to a 
fundraising appeal by Noel C. Koch, fonner Director of 
special operations at the Pentagon. And that would be 
you. 

First of all, do you recall making such a 
statement? 

A^ I don't j-emember ever s^i^ 4Car^|=ie, iut 

youjiainfca «opy of that letter? "^ '" ' ' "^ 

Q We do not. 



ItNCLISSPPO 



122 






121 

1 A I guess you need one, right? I don't happen 

2 to have one with me, but I'll get one ^d send it for the 

3 record. But that comes out of there. sTfd what you're 

4 asking me about specifically, "acting at the bidding of 

5 the highest levels of the U.S. Government" comes from, is 

6 a quote. I mean, I'm quoting here_fron a newspaper 

7 article which may have been the New York Times magazine. 

8 I'm not sure. 

9 Q You have anticipated the question. I'm simply 

10 trying to find out what the basis was for the 

11 representation that he acted at the bidding. 

12 A I don't know. I wasn't there when the 

13 President said go forth. 

14 Q Let me just ask then, for the record, did 

15 General Secord ever tell you at any point before or after 

16 these matters broke that he was acting at the behest of 

17 the President, at the specific request or instruction of 

18 the President, et cetera? 

19 A No. I don't think he ever did. 

20 Q Let me ask you -- 

21 A I'm sure he never did. He wouldn't have. 

22 Q Let me ask you about a phone conversation or 

23 two conversations that I think took place on the morning 

24 of the Attorney General's press conference, which would 

25 have been November 25, 1986. Do you recall having placed 



mm. 




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a call to General Secord or trying to contact him? 

A On the morning of the press conference? 

Q That is correct. 

A Yes, I do recall, 

Q And do you recall that the first time you 
called you spoke to him personally or whether you spoke 
to someone else? 

A I think I talked to Bob Dutton. 

Q And Mr. Dutton worked with or for General 
Secord? 

A Yes. 

Q So you placed a call to Stanford Technology? 

A Well, I placed the call to Dick, as I recall, 
and he wasn't available. Then I talked to Bob, and then 
I talked to Dick later. 

Q Do you remember what, if anything, you said to 
Mr. Dutton? 

A I don't really remember. I don't have a good 
recollection. It seems to me that we were -- I mean, 
Iran was cooking along and getting more and more 
interesting and I don't know if I knew that there was 
going to be a press conference, whether it had been 
announced in advance or what that day. 

Q Do you recall Mr. Dutton saying something to 
you along the lines of yeah, something's going on and 



UNCtftSSIfifD 



124 



UMdWiEB 



123 



1 Dick will know? 

2 A I don't remember what he said to me. 

3 Q So you had a short conversation with him and 

4 then what happened? Did General Secord get on the phone, 

5 or you placed a second call, or what? 

6 A I guess I called him again. 

7 Q And do you remember anything about that 

8 conversation? 

9 (A discussion was held off the record.) 

10 MR. SABA: I have a few questions, so I can 

11 continue until he returns. 

12 (A discussion was held off the record.) 

13 BY MR. SAXON: (Resuming) 

14 Q What do you recall, if anything, about your 

15 conversation that morning of the AG's press conference 

16 with General Secord? 

17 A I have no recollection about the substance of 

18 that conversation. 

19 Q Do you remember him railing against Secretary 

20 Shultz and Don Regan for not being supportive of the 

21 President and protecting the President? 

22 A I don't remember it, but he probably did. 

23 Q Do you remember him saying that he himself 
2 4 would go public with what he knows except he was 

25 concerned about our hostages and the compromise of any 



I 



yirasrtro 



125 




124 

1 Iranian intermediaries? 

2 A Yes, I think I do remember that. 

3 Q Do you recall him saying that he had already 

4 notified these agents, these Iranian intermediaries, that 

5 something was about to break? 

6 A I don't remember that exactly. 

7 Q Do you recall him saying that he had spoken 

8 the previous evening to Admiral Poindexter for about ten 

9 minutes? 

10 . A I remember him saying he had a conversation 

11 with John, but I may be telescoping whether that 

12 conversation occurred the previous evening or that day. 

13 MR. SAXON: Do you have a quick one? 

14 MR. SABA: Are you finished entirely? 

15 MR. SAXON: Enough. 

16 MR. SABA: Are we going to resume or if I can 

17 finish quickly. 

18 MR. SAXON: Take two minutes or whatever and 

19 see what you can do and then we will regroup later to see 

20 if we need to convene again. 

21 BY MR. SABA: (Resuming) 

22 Q Do you know Albert Hakim? 

23 A Yes. 

24 Q How do you know him? 

25 A I met him through Dick. 

JEgRjffZCQDEWORD 







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PfiSfiR 





Q At what time? 

A It would be after Dick left and after he went 
with Albert in Stanford Technology, or whatever it's 
called, Trade Group International. 

Q Could it be as early as the summer of '83? 

A It could be. I don't remember exactly when 
Dick left, but it could be, sure. 

Q And what was the occasion for your meeting and 
relationship since? 

A Well, as you see, Dick and I were close 
friends and he had started this business, and he brought 
Albert around and I don't know exactly why but it was 
like a courtesy call, which wouldn't have been unusual. 
I mean, a lot of people, business people, do come by, and 
it was in that nature. And we simply got acquainted. 

Q In your official duties, one of your duties 
was to be concerned with Africa. 

A That's right. 

Q Did you coordinate your activities with Ollie 
North on Africa? 

A No. I don'trec 




Q Did you have any connection with any special 
operations in Africa? 

:Rftrfttf*|«j 




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5 

6 

7 

8 

9 

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18 

19 



UNKP'W 



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A No, I don't think there were any that 1 can 



recall 




The special operations? 

Generally. 

No. 

MR. SABA: Let's go off the record. 

(A discussion was held off the record.) 

MR. SAXON: Back on the record. Let me say, 
first of all, for the record, Mr. Koch, we should 
acknowledge that you have appeared here voluntarily and 
without any effort to seek any immunity or without even 
being subpoenaed. We appreciate that, we appreciate 
your candor and your frankness and your time in trying to 
help us piece this all together. 



l)N»«F(En 



128 



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ft.U 127 

I do have a few more questions and so it looks to 
me like we will have to convene at an another time, but 
let me say for today we thank you and we will be back in 
touch. 

(Whereupon, at 4:50 p.m., the taking of the 
instant deposition recessed, to reconvene at a future 
date.) 



Signature of the Witness 

Subscribed and sworn to before me this day of 

, 1987. 



Notary Public 



My Commission Expires: 



\smmm 



129 



UJWSS! 



CERTIFICATE OF REPORTER 



Ravnond R. Heer III 



Che officer before -jhom the 



::;regoing deposition was ca<en, do hereby certify that the witness 
whose testimony appears in the foregoing deposition was dulv sworn 

b y i^* ; that tne testimony of said witness was 

taken by ae to the best of my ability and thereafter reduced to typewriting 
uader ny direction; that said deposition is a true record of tr.e testimony 
given by said witness; that I am neither counsel for, related to, nor 
employed by any of the parties to the action in which this deposition 
was taken, and further that I am not a relative or employee of any 
attorney or counsel employed by the parties thereto, nor financially 
or otherwise interested in the outcome of the action. 



JJs^^^uU 






NOTARY PUBLIC 
DISTRICT OF C0L;>1BIA 



My Commission expires : ^V 3^' ^^^^ 



"NWXS/f/ffl 



131 



Stenographic Traiflscript of 



o^{iW°' ' 




I i.J » 



HEARINGS '''^' 



Before the 



^'^CUSS/F/£D 



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



UNITED STATES SENATE 



TESTIMONY OF NOEL C. KOCH - Continued 
Friday, May 29, 198? 



Pirtally Declassified/Released on 



J-'f-^r 



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



UNCLASSIFIED 



Washingron. D.C. 




meSiREDUNIilliSIFIED 

^fe^^l V cop^ NO. IC^tw — I — copies 

ALD6=SCN ^EPCRTNG 



(202) 628-9300 
20 F STREET, N.W. 
WASHINGTON, D. C. 20001 



133 



UNMSHD 



12 S 



1 TESTIMONY OF NOEL C. KOCH - Continued 

2 Friday, May 29, 1987 

3 United States Senate 

4 Select Committee on Secret 

5 Military Assistance to Iran 

6 and the Nicaraguan Opposition 

7 Washington, D. C. 

8 Continued deposition of NOEL C. KOCH, called 

9 as a witness by counsel for the Select Committee, at the 

10 offices of the Select Committee, Room SH-901, Hart Senate 

11 Office Building, Washington, D. C. , commencing at 10:21 

12 a.m., the witness having been previously duly sworn, and 

13 the testimony being taken down by Stenomask by MICHAL ANN 

14 SCHAFER and transcribed under her direction. 
15 



Partially Declassified/Released on ' ' " " 



under provisions of E.O- 12355 
by N. Menan, National Security Council 



wmm\i 



134 



UHttASSlEe 



129 



1 APPEARANCES : 

2 On behalf of the Senate Select Committee on Secret 

3 Military Assistance to Iran and the Nicaraguan 

4 Opposition: 

5 JOHN D. SAXON, ESQ. 

6 On behalf of the House Select Committee to 

7 Investigate Covert Arms Transactions with Iran: 

8 JOSEPH SABA, ESQ. 

9 On behalf of the witness: 

10 ROBERT M. ADLER, ESQ. 

11 Ninth Floor 

12 1667 K Street, N.W. 

13 Washington, D. C. 20006 



mtfts^^D 



135 



uNci^sra 



130 



1 CONTENTS 

2 EXAMINATION ON BEHALF OF 

3 WITNESS SENATE "' HOUSE 

4 Noel C. Koch 

5 By Mr. Saxon 4 

6 By Mr. Saba 

1 EXHIBITS 

8 KOCH EXHIBIT NUMBER FOR IDENTIFICATION 

9 1 

10 2 

11 3 

12 



UNCtftSMD 



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\mty\sssj» 



131 



1 PROCEEDINGS 

2 Whereupon, 

3 NOEL C. KOCH, 

4 called as a witness by counsel on behalf of the Senate 

5 Select Committee and having been previously duly sworn, 

6 was further examined and testified as follows: 

7 EXAMINATION ON BEHALF OF THE SENATE COMMITTEE - Resumed 

8 BY MR. SAXON: 

9 Q . Mr. Koch, I want to remind you that since this 

10 is a continuation of your deposition you are still under 

11 oath. 

12 I'd like to start by covering a few points we 

13 didn't cover before. In your meeting with Ben Yosef to 

14 negotiate the price on the TOWs, to negotiate it up from 

15 the lower price that apparently Mr. Ledeen had fixed, I 

16 believe you told us, as best you are able to date, that 

17 meeting took place around January 11; is that correct? 

18 A The dating is related to the meetings that 

19 were held then in the Pentagon, so we're fixing it as 

20 exactly as possible. I don't consider it a very exact 

21 procedure. 

22 Q And your best recollection is that the meeting 

23 was on a Sunday? 

24 A That's correct. 

25 Q Let me have marked as Deposition Exhibit 1 of 



UNlIlSStREO 



137 



UNa 





132 

1 the continuation -- I don't know the exact number from 

2 the previous exhibits -- some appropriate and relevant 

3 dates from your calendar for 1985 and 1986, your desk 

4 calendar or desk diary, and ask that you would look at it 

5 and walk us through it quickly and tell us why you think 

6 you are able to date this on the 11th. 

7 (The document referred to was 

8 marked Koch Exhibit Number 1 

9 for identification.) 

10 A January 2 is a Thursday. I have nothing in 

11 the morning, and it doesn't look like the kind of day 

12 something like this would have happened on. It was 

13 during the day. 

14 Q All I know is that their records show, their 

15 report shows January 2 of '86. I don't know time of day. 

16 I don't know place. 

17 MR. ADLER: You were at work? You were at the 

18 Pentagon? 

19 THE WITNESS: Yes. I was at work. It was a 

20 Thursday and I had meetings and there's no reflection of 

21 my doing anything that morning, and it would be on here. 

22 If there was a meeting with these people on that day, 

23 there would at least be some notation by my secretary 

24 that I'm at the White House, that I'm somewhere. I feel 

25 much more comfortable with my interpretation. 



UHttMS 




138 



uHcussm 



133 



1 Okay. Let me, if I can, just walk through 

2 from the beginning without trying to fix precisely. 

3 BY MR. SAXON: (Resuming) 

4 Q What I'd like you to do is on the dates that 

5 you have provided to us from your desk diary, if you 

6 would, for example, on 19 November 85 tell us what it is 

7 that's of relevance there and why you are providing that 

8 to us. 

9 A 19 November is the first time within this time 

10 frame that the thing is happening that there is an 

11 indication that I have had a meeting with someone who 

12 would have been involved in the sale of missiles, whether 

13 HAWKs or TOWs, and we can take it all around. On the 

14 19th at somewhere between 12:00 and 12:30 I go to see 

15 Colin Powell with Hank Gaffney. That tells me that I 

16 have had a meeting with Gaffney prior to this. I mean, I 

17 wouldn't have gone directly to him because I know that 

18 the request came from Colin sometime before this. 

19 It was just for information. I relayed the 
2 information and then I think there was a refinement of 

21 the process and my sense — and it would have been 

22 consistent with my normal operating procedures — there 

23 wasn't any point in me being a pipeline. If Gaffney had 
2 4 the information, then he ought to convey it directly. 

25 But I didn't completely take myself out of it, but 



DNClftSSIfe 



139 




134 

1 Gaffney went with me on the 12th. 

2 Q Is there anything else of relevance on the 

3 19th of November? 

4 A I have an interview with a reporter at 2:00, 

5 and that's interrupted for me to talk to Gaffney, and 

6 then there's no further indication. 

7 Q The next date, then, is January 7, 1986. 

8 A Excuse me. There's a time here that I haven't 

9 given you that I didn't notice when we went through this, 

10 and that's the 20th. 

11 Q Of November? 

12 A Of November. And it indicates that after the 

13 SecDef staff meeting that I talked with General Powell. 

14 That could have been on this subject, could have been on 

15 1,000 subjects since I was Acting Assistant Secretary at 

16 the time. 

17 Okay. Now we go then to 1986 and you asked 

18 me, I think, the first date that I find here of interest 

19 is the 7th. 

20 Q So, for the record, let's look at January 2 

21 and clean that up. I believe your statement is that on 

22 January 2, according to your records, there was no 

23 meeting with anyone which would appear to have any 

24 relevance to our inquiry; is that correct? 
2 5 A That's what the diary shows. 

lEC 





140 



UNEIISSW 



135 



1 Q And in particular there is no meeting with 

2 Richard Secord, Oliver North, General Meron? 

3 A There's no indication. 

4 MR. ADLER: Let him put his question on the 

5 record and then answer. 

6 BY MR. SAXON: (Resuming) 

7 Q So, for the record, on January 2, 1986, your 

8 records show there was no meeting at which you were 

9 present with General Manacham Meron of Israel, Colonel 

10 Oliver North, General Richard Secord, and Abraham Ben 

11 Yosef; is that correct? 

12 A That's correct. 

13 Q Okay. Well, on that point do you recall ever 

14 having been in a meeting with those individuals on 

15 whatever date, if it was not precisely January 2, within 

16 that late '85 or early '86 time frame? 

17 A I don't recall that, no. 

18 MR. ADLER: Was it your secretary's practice 

19 to have noted on your calendar such a meeting, had such a 
2 meeting taken place? 

21 THE WITNESS: Absolutely. She's very diligent 

2 2 about that. 

23 BY MR. SAXON: (Resuming) 

24 Q So you feel reasonably safe, then, in assuming 

25 that if it wasn't on there it didn't take place? 



URCtltSStft!!) 



141 




136 

1 A That's right. 

2 Q Now let us look, then, at your entries on your 

3 calendar for January 7, 1986, if that's the next date 

4 that you think has relevance. 

5 A On the 7th, at 2:00 I meet with Hank Gaffney. 

6 Then I'm interrupted by one of my Africans, and I spent 

7 some time with him and resumed the meeting with Gaffney, 

8 and then at 2:44 I have a meeting with Glen Rudd. 

9 Q Can you think of any other reason you would 

10 have met with those two particular individuals other than 

11 to talk about TOW missiles, TOW prices, TOW availability, 

12 et cetera? 

13 A Well, there was a range of possible issues, 

14 but I can't imagine the proximity in time to what was the 

15 central issue here, it seems to me. I didn't meet with 

16 these people on a regular basis. When I met with them it 

17 was usually an unusual situation. If I had a question 

18 that would be one that I would normally have with them, 

19 it could be covered in a staff meeting that I would have 

20 in the morning or I could call them on the phone. I 

21 could even call on secure. 

22 I would work it through another staff member, 

23 very likely, so there would be very, very few things. It 

24 would be unusual for me to meet particularly with Hank 

25 Gaffney with any regularity at all, and so this suggests 



142 



UNEtkSSlfllB' 



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4 

5 

6 

7 

8 

9 

10 

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25 



to me that that's what that meeting was about. 

Q Is there anything else on January 7? Is there 
a 4:30 meeting with Rudd? 

A That says returned. 
On the 8th — 

Q That's January 8 of '86? 

A Correct. 

Q Go ahead. 

A There's a meeting — not a meeting 
necessarily, but I go to see Colin Powell at 1100 with 
paper. 

Q That says "to General" -- , 

A Powell. 

Q With paper. 

A Correct. 

Q And "with paper" , what do you take that to 
mean? 

A Well, I have no idea. I can only speculate 
that I had to give him the sequence of events that were 
occurring in this time, that it was related to that, but 
I don't know. It could have been an invitation to my 
birthday party, but that's in March. 

Q Now there is a 12:30 entry with regard to 
Ollie Korth. what does that say? 

A It says lunch sponsored by National Defense 



UNCLfiSStfttt 



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Council, s 
Club. 

Q 

A 

Q 

A 



iium 



138 



erhaps — Capitol Hill 



On low intensity warfare. But below that — 
Ollie and I went to that together. 
Anything else of relevance on 8 January? 
No. I don't think any of the subsequent 
meetings are relevant. 

Q The next entry we have is 9 January. What can 
you tell, us there? 

A At 1:00 I go to see Glen Rudd. The fact that 
I went to see him is not necessarily unusual, but if it 
was something that was on my mind that I wanted taken 
care of right away I would just go do it rather than call 
him to come to me or do it on the phone. So I suspect 
that again this was something that I preferred to discuss 
in private and expeditiously. 

Q Any other relevant entry on 9 January? 

A None that I think are relevant, no. 

Q The next entry you provided is 10 January. 
What can you tell us about that? 

A Well, again I have a meeting at 10:35 with 
General Powell. Again I want to remind you that I was 
Acting at the time and so it could have been on a whole 
range of issues. 

Q And then you have an entry at 2:40 p.m. 



m&mm 



144 



UHEtftSSSa 



139 



1 A But I should point out that we had a SecDef 

2 staff meeting that morning and anything that would have 

3 been germane probably would have been discussed there, 

4 unless it was unusual, and that might be the reason I 

5 went back to see General Powell, and this thing would 

6 have been unusual. 

7 Q And then at 2:40 p.m.? 

8 A Oh, yeah. Okay. Well, that was a meeting 

9 with Glen Rudd. 

10 Q So at a minimum, if we look at those dates and 

11 the next day, on 14 January, another meeting, there was 

12 clearly some activity, some project, some issue you were 

13 working with Mr. Rudd? 

14 A Yes, that's true. 

15 Q On 14 January, then, the next entry, Tuesday, 

16 what is of relevant there for us? 

17 A I have a meeting at 10:52 with Glen Rudd. 

18 Q Anything else? 

19 A No. 

2 Q And the next to the last date you have 

21 provided us is 24 January. What can you tell us about 

22 that? 

23 A I go at 10:40 or 11:00 to meet with General 

2 4 Powell and now Rich Armitage is back and I have meetings 

25 with him that day. In fact, I have a meeting with him at 



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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 



140 

10:40, but then I go to see Powell at 11:00. It would be 
unusual for both of us to go see General Powell together. 
I assume that I went to see him. I'm certain I went to 
see him by myself or, if I went to see him by myself it 
was probably on that subject. 

Q And then the last entry you provided us is 11 
March. 

A Right. 

Q What is of relevance there? 

A Well, I'm not sure what's relevant, but what's 
interesting to me about it is that I had been out of the 
country now. I went over to Europe on business on the 
28th for a conference, and then I had to go to Berlin, 
and so my trip was extended and it was a long trip and I 
didn't return until the 11th, which was a Tuesday. 

I got into Dulles at 1710 and rather than 
going home I went to the Pentagon and met with Colin 
Powell at 1845. Normally coming back from a trip like 
that I would have gone home. The subject of the trip 
would not have been anything that I would have been apt 
to discuss with anybody in the Pentagon. 

Q Now you mentioned this meeting to us before. 
Do you recall what it was about? 

A I do not recall. I have no idea. 

Q Anything else? 



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\)HM5^^ 



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1 A I think at some point in this thing Colin 

2 Powell said to me -- it was a period when I was out of 

3 the country and up until then Rich Armitage was not in 

4 the box, and then he said to me at a meeting while you 

5 were away I needed this and that and the other thing 

6 done, and he did say to me at one other point, I think, 

7 that he felt Rich not knowing about this, and so I think 

8 when I got back, it may have been to tell me that he had 

9 cut Rich in on it. I'm not sure, but at some point he 

10 did tell me that. 

11 He told me that face to face. The only thing, 

12 again, that I find curious is that I went from Dulles 

13 downtown when it would have been much closer to go home. 

14 But then I have meetings at 7:00 and again at 7:30 with 

15 my special operations staff and I have a meeting also 

16 with Armitage that night. So I can't really figure out 

17 what was going on. 

18 Q So to the best of your knowledge and 

19 recollection we've covered the relevant entries for these 

20 dates? 

21 A That's correct, yes. 

22 Q Let me go back then to your meeting with Ben 

23 Yosef to negotiate the price for the TOWs and ask a 

24 couple of follow-up questions there. For the record, was 

25 anyone else in attendance at that meeting other than you 



lEttSStfttD 



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1 and Mr. Vosef? 

2 A No, there was not. 

3 Q And to the best of your recollection how many 

4 meetings did you have with him? 

5 A To the best of my recollection I had one 

6 meeting. 

7 Q Do you have any knowledge which would go 

8 toward the confirmation of the fact that there may have 

9 been a meeting on 2 January 1986 between General Meron 

10 and Mr. Armitage to discuss replacement or replenishment 

11 of Israeli TOWs? 

12 A ■ No. My sense is that would have been early in 

13 the game for Armitage 's involvement, but I have no 

14 knowledge. 

15 Q In terms of your negotiations with Mr. Yosef 

16 on price what was said by either of you regarding the 

17 need for that meeting, the need to be there to 

18 renegotiate price at all? 

19 A I don't believe that anything was said between 

20 us on that. I mean, you know, we had a specific point to 

21 this meeting. We had talked on the telephone prior to 

22 the meeting mostly about the modalities for the meeting 

23 and when we got together we got together with a full 

24 understanding that it was to revise the price to be paid 

25 for the TOW, and there was really very little extraneous 



!1NS^^*![0 



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2 We went through the subject and we concluded 

3 it. 

4 Q Let me see then if I can just clear up one 

5 thing that may be odd in the record to anyone reading 

6 this subsequently. The previous price that Mr. Ledeen, 

7 possibly with the assistance of Mr. Schwimmer, had 

8 negotiated with the Israelis was either $2,500 or $3,000 

9 per TOW; is that correct? 

10 A My understanding was it was $2,500. 

11 Q And normally most people would think that the 

12 buyer of an item would prefer a low price and would not 

13 willingly submit to a renegotiation of a higher price 

14 after they had fixed on a lower price. That's what 

15 normal commercial practices would tell us. 

16 Is it fair to say then that the Israelis, from 

17 what you were able to gather, viewed this as also being 

18 in their interest and they wanted to help the deal go 

19 forward so they were willing to negotiate the price up? 

20 A Well, it would be a reasonable assumption. I 

21 don't think they went into it — I mean, they weren't 

22 looking for an opportunity to have the price negotiated 

23 up. They were going to do the deal or not, and I think 

24 that Ledeen 's authority was so sketchy, in addition to 



25 which his understanding of the pricing was to limited 



naerscanaing or zne pric 



149 



UHttP&SW 



144 



1 that nobody could reasonably have held that this number 

2 that he had worked out had any weight. 

3 So as I understood the situation it was either 

4 get the price up or forget it. 

5 Q I believe you told us that you took away from 

6 this negotiation nothing in writing; is that correct? 

7 A My recollection is I did not. 

8 Q Did you have any working papers in front of 

9 you, any papers with figures, notations as to price, 

10 numbers, et cetera? 

11 A I do not recall that I did. If I did, they 

12 would have been very cryptic and I would have thrown them 

13 away afterwards. I think I went in, as you would into a 

14 negotiation, with my own parameters and with an estimate 

15 of what I thought the other fellow's parameters were. 

16 Q Is it your best recollection that you did not 

17 keep any notes, records, documents of any sort pertaining 

18 to this meeting? 

19 A That's my recollection. 

20 Q Once you left that meeting having agreed on 

21 the price I think you told us before of $4,500, how was 

22 that communicated by you and to whom was it communicated? 

23 A It was communicated to General Powell 

24 • certainly, and I'm quite certain that I also communicated 
2 5 to Oliver Nc 



wmmM 



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B 



145 

1 Q ^dUI(^rT"fi'ave~been by means of a phone call? 

2 A I probably would have told General Powell face 

3 to face, and I probably would have told Ollie on secure. 

4 Q While I don't want to put any words in your 

5 mouth, do you think it would have been a fairly brief 

6 conversation in which you simply said we had the meeting 

7 and here's the price? 

8 A Yeah. I couldn't reconstruct that. It seems 

9 to me that I have a recollection that the discussion with 

10 General Powell then moved into the Secretary's office. 1 

11 mean, certainly more than one of them did on this 

12 subject, and it seems to me that this question of the 

13 price, of having gotten the price into what could be 

14 swallowed, you know, was a hurdle for the Pentagon, and 

15 I'm not sure that the Secretary was delighted to manage 

16 to clear that hurdle. 

17 But I did it, and I think we went in and told 

18 him that. And General Powell wanted me to do that rather 

19 than doing it himself. And my recollection is that he 
2 was rather agitated about the whole thing. 

21 Q Now is your thinking that that was the meeting 

22 that you and General Powell had with Secretary Weinberger 
2 3 at which Secretary Taft was present and wouldn't absent 

24 himself? 

25 A I think it was. That gets a little stretched 

I .^*:«t'^t:5DDEWOFp' j 






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1 out, but I think it probably was. 

2 Q Is it your recollection or perhaps your sense 

3 that Secretary Weinberger knew there was an earlier price 

4 that was not one that the Pentagon could swallow? Do you 

5 think he knew the Ledeen-negotiated price of $2,500? 

6 A I don't know. I would have to — I mean, the 

7 price was not a minor issue in this, clearly. It would 

8 be pure speculation to say that he did, but it seems to 

9 me a fairly sensible speculation. 

10 Q All right. It's clear after that session with 

11 Secretary Weinberger you fairly well know his views on 

12 all of this. Do you think you knew that he was rather 

13 negative to the idea before you had your negotiation 

14 session with Ben Yosef? 

15 A Oh, yes, of course. We knew that going in. I 

16 knew what my own feelings were and I know what General 

17 Powell's feelings were, and I knew that reflected the 

18 Secretary's feeling. So that awareness of the attitude 

19 of the leadership came immediately with knowing what 

20 these items were for. And that much preceded the 

21 question of the price of the TOWs. 

22 Q Had you met Ben Yosef prior to that meeting? 

23 A I do not have a recollection of having met 

24 him. 

25 Q Have you met him or spoken with him since that 






152 





UNbLttdOiriLu 

1 meeting? 

2 A I have not. 

3 Q What do you sense was Colonel North's 

4 understanding of TOW pricing that would lead him to 

5 believe, when you communicated this price back to him, 

6 the $4,500, that it was reasonable enough a basis to get 

7 the TOWs from the Pentagon? 

8 A I'm sorry? Just to explain, there was no 

9 enthHsia^m in the building for doing it. Some of that, 

10 of course, some of that lack of enthusiasm, to put it 

11 euphemistically, reflected on Ollie. You know, they were 

12 not happy. Ollie was in the middle of this thing, 

13 running it, not that he had dreamed it up but that he had 

14 it handed to him and he had been dealing with it and 

15 finding solutions to these problems. 

16 So the idea that it was possible to get an 

17 acceptable price, a defensible price, as I said before, 

18 was not a happy situation. And, of course, there was a 

19 consensus, a very small consensus in a very small group 

20 of people within our building that there was money being 

21 made somewhere in this thing. Certainly somebody was 

22 getting screwed and the Israelis were not passing these 

23 things on for what they were paying for them. 

24 And what that price was, we didn't know. That 

25 of course is what complicated the negotiation. But 



UNfilfflftEB 



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10 






148 

1 Ollie, I think, you know -- I don't know that Ollie had 

2 an idea in mind what the price should be. It had to be 

3 something that could get those birds out of the Pentagon. 

4 Q Okay. I understand that, and maybe I didn't 

5 ask my question precisely enough. But as we now know, it 

6 is possible to make a case and justify selling a TOW for 

7 less than 54,500 if one looks at the AMDF price for a 

8 basic TOW of 33,169, adds a MOIC for roughly $300, and 

9 gets a price of 53,469. If you add some money for 
crating, shipping, handling, et cetera, you are clearly 

11 within the ball park of 54,500. 

^2 People at the Pentagon, as we know, later in 

13 - January, from roughly January 13 through the next week or 

1* two, as this began to be worked by the Army, began to 

15 come up with that price. It began to surface. There had 

IS to be some time at which that information, either that 

17 precise information or something in that nature in terms 

18 of price, was communicated to Colonel North to let him 

19 know that 54,500 was not only the price you had come up 

20 with but that it was workable. 

21 A Um-hum. 

22 Q Now you may not know the answer to this, but 

23 my question is do you have any information, were you 

24 provided any information by Colonel North or General 

25 Powell or anyone else that would lead you to believe 






154 




149 

1 somehow this basic TOW price information had been 

2 communicated to Colonel North so he would understand 

3 $4,500 was good enough to pry the TOWs out of the 

4 Pentagon? 

5 A I don't know that. I know that, as I 

6 indicated in previous testimony, that he knew that the 

7 price that had been negotiated by Ledeen wouldn't fly and 

8 therefore it had to come up, and we were dealing with 

9 sets of theories in this thing, basically, as you would 

10 in a negotiation. It had to come up to where, you know, 

11 you could plausibly peel Weinberger off the ceiling. 

12 That was sort of — and that's what we tried to shoot 

13 for. 

14 I don't think there was any magic in the 

15 numbers that we were dealing with. We just knew that he 

16 had a number that was so low that it couldn't be used. 

17 It was not a useful number. 

18 Q On that point, do you have any idea of why he 

19 knew $2,500 was too low? I mean, if we look at the data 

20 w« now know in terms of the $3,500 roughly clearly $2,500 

21 i3 too low. Did he tell you he had checked and that that 

22 was too low? 

23 A I don't know that he told me he had checked. 

24 He knew it. It was clear to me both from my discussions 

25 with him and J^pm my discussions with General Powell that 






155 




"d 150 



1 h« had ha3 prior discussions with General Powell, so I 

2 wasn't present at the creation of this, and who he found 

3 out from that $2,500 was an unacceptable price, I don't 

4 know, but he did know it. And it seemed to me that he 

5 was knowledgeable on the matter. 

6 Q Okay. It's clear from what you've told us 

7 that you played a pretty important role in this early 

8 pricing stage, but that you pretty much phased out of 

9 things from that point on. But were you ever provided 

10 sort of updates or status reports by General Powell or 

11 Colonel North or anyone else through the time you 

12 remained at the Pentagon on where all this stood, whether 

13 it had gone forward, whether it was succeeding, et 

14 cetera? 

15 MH. ADLER: Let me object here. I mean, he 

16 has testified that there were meetings and discussions 

17 and there's been a fair amount of testimony along those 

18 lines. 

19 BY MR. SAXON: (Resuming) 

20 Q I guess what I'm getting at, beyond one 

21 session for sure with Secretary Weinberger and possibly a 

22 second one, and beyond a February 8-9 meeting that 

23 involved ^I^^^Hand Secord, which we've already gone 

24 into, I don't believe there are any other specific 

25 matters in teras of lieetiRgs 'oF"'dl'«^ssions. 



156 



ums?w 



151 



1 And I guess what I'm asking is, as you may 

2 have been talking with General Powell about something 

3 else or you may have been talking with Colonel North 

4 about something else, did anybody ever tell you where 

5 things stood on all this? 

6 A No. I mean, I can't believe that nobody did. 

7 It seems to me my recollection is that after that 

8 negotiation and then after the information was conveyed 

9 and so forth then, as it had done with the HAWKs, this 

10 issue died as far as I was concerned, and I was involved 

11 in a number of other things totally unrelated to this. 

12 If I can recapture as a way to do this thing, 

13 I know it may sound very strange to you but I didn't know 

14 who else knew about this. I knew Ollie knew it, and I 

15 knew that Colin Powell and the Secretary knew it. I 

16 didn't know whether Bob Oakley knew it. I didn't know 

17 whether Dewey Clarridge knew it or any of the other 

18 people involved. And we had other actions going on 

19 related to the hostages. 

2 We could sit in a meeting in the sit room and 

21 be discussing these other activities, and fall into 

22 almost a kind of, you know, warp in which you wouldn't 

23 know whether you were talking — I mean, the use of 

24 shorthand and so forth in the discussions, you couldn't 

25 tell whether we'd suddenly slipped into this question of 






Us^V 



157 




152 

1 selling arms to get them back this way or whether we were 

2 still discussing the other thing. 

3 And it was the most intricate interweaving of 

4 subjects and half meanings and innuendos and so forth, 

5 and it was like something out of a Parandello play. 

6 Q I understand that you were, and you testified 

7 earlier, that you were not clear. Vou did not know 

8 exactly who was in the box, as you put it. But of those 

9 people who you knew were in the box -- and that would be 

10 Colonel North, General Powell and Secretary Weinberger 

11 and possibly General Secord — if in fact there was an 

12 early February meeting did you ever have occasion, given 

13 that you had been involved in negotiating with the 

14 Israelis on TOW missile prices, which is not your normal 

15 duty, did you ever simply say, by the way, did we ever 

16 get the TOWs, did we ever sell them, did the Iranians 

17 ever get them of any of those people you did know had 

18 knowledge? 

19 A I would, I'm sure, on occasion say where's 

20 thing stand or how is it going, and I would get some kind 

21 of a progress report because, you see, again there are 

22 other actions proceeding on separate tracks, so the fact 

23 that they are proceeding tells you that this thing hasn't 

24 been brought to fruition, if you see what I mean. 

25 So from time to time this came up, as I said, 






158 



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153 

1 and, you know, it might be after a meeting at the White 

2 House and I would have an aside with Ollie and say where 

3 does this thing stand? And I don't remember what the 

4 curve looked like on this. It would be like a fever 

5 chart. There were peaks and valleys and periods when we 

6 were for sure we were going to have it, and then it would 

7 fall apart. But I was not a player in this. 

8 It was just because I was working the 

9 terrorism stuff and I was involved in all the other 

10 things these people did. There would be occasional 

11 casual references as would pass between knowledgeable 

12 colleagues, but I didn't consider that I had a particular 

13 need to know in any detail and I didn't try to be 

14 informed in any detail. 

15 Q Now normally I believe Lynn Rylander would 

16 have staffed you on certain matters, either terrorism 

17 matters or special operations matters; is that correct? 

18 A That's correct — not terrorism matters. I 

19 kept that compartmented and kept him away from that. 

20 Q Special operations? 

21 A That's right. 

22 Q I don't know if Rylander is a he or a she. 

23 A There is some question. 

24 Q I don't know whether the name Lynn is a male 
2 5 Lynn or a female Lynn. 






159 




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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 



•A It's a male. 

Q Did you ever have occasion to task Mr. 
Rylander to do anything in terms of these matters you 
were working on on TOWs -- pricing, price issues, price 
data, et cetera? 

A I don't think so. That would be extremely 
unusual. If I did, he wouldn't have known what he was 
doing. 

Q Let me ask you a couple of general questions 
regarding your dealings with the South Koreans in your 
job at the Pentagon. Did you hav* occasion to deal 
regularly with the South Koreans? 

A Ves, I did. 

Q And to meet with people or to deal with people 
at the South Korean Embassy? 

A Correct. 




Q And did you ever have occasion to use their 
embassy facility if you were there to make a phone call 
or whatever? 

A I would have occasional meetings. I think 
while I was in the government the normal procedure would 
have been for them to come to me. That would have been 
the nature of that relationship. When I left I 



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1 maintained the relationship and still do with the Korean 

2 Government in a private capacity, and the man who was 

3 their defe nse attache 

4 ^^^^^^^^H And so that relationship has continued. 

5 And if I was there to meet with him and had to 

6 call my office or call a colleague or something on a 

7 subject it would not be unusual for me to use the phone. 

3 Q Just as you and Mr. Adler used our phones here 

9 this morning, since that's where you were and you needed 

10 to make calls? 

11 A That's right. 

12 Q Did you share with Colonel North Secretary 

13 Weinberger's concerns about the legality of the TOW 

14 missile transfer? 

15 A Did I share Secretary Weinberger's concerns? 

16 Did I share them with Ollie North? 

17 Q Vca, and I don't mean to characterize them in 

18 any way particular way, but you did indicate there was 

19 some discussion. 

2 A He knew that the Pentagon was damned unhappy 

21 about this and specifically that the Secretary of Defense 

22 was. 

2 3 MR. SABA: How did he )cnow that or how did you 

24 know he knew that? 

2 5 THE WITNESS: You know, I don't know. I mean, 



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Mj^ie 



156 



1 I just know. I don't remember that at a certain point 

2 somebody said, by the way, how does the Pentagon feel 

3 about this. To most of us this came as a shock in the 

4 beginning. It began with the assumption that what you 

5 were doing was outrageous and then you worked back from 

6 there. You know, how was this being done and, if so, 

7 damned outrageous. 

8 But the point of departure was that this thing 

9 is screwy. 

10 BY MR. SAXON: (Resuming) 

11 Q Let me separate out, if I can, general 

12 Pentagon concerns or even the Secretary's concerns about 

13 the wisdom of the policy and simply go to the fact that 

14 there was at least some question about the legality of 

15 the action. Was that ever conununicated back to Colonel 

16 North? 

17 A That I don't know. 

18 Q It was not communicated by you at least? 

19 A It was not communicated by me. I never 

20 thought that that was a concern, frankly. 

21 Q As best as you know — 

22 MR. SABA: I'm sorry. So that's clear, you 

23 never thought that was a concern? 

24 THE WITNESS: I never thought there was a 

25 question about the legality. I would have thought it was 






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1 dumb for other reasons, but I didn't know whether it was 

2 illegal. But it didn't occur to me that it was until a 

3 point at which it almost sent me -- in a jocular way I 

4 asked the Secretary, you know, do we have a legal problem 

5 here. Could somebody go to jail over this? And he said 

6 yes. 

7 BY MR. SAXON: (Resuming) 

8 Q As best as you know, were there ever any 

9 discussions or meetings which you had with Colonel North, 

10 General Powell, General Secord, Secretary Weinberger, Ben 

11 Yosef, Glen Rudd, Dr. Gaffney, anybody to whom you might 

12 have spoken or dealt with in these matters, which were 

13 electronically recorded? 

14 A Well, you don't know, do you? 

15 Q But to your knowledge none of these sessions 

16 or discussions were recorded? 

17 A I didn't record any of them, and that's the 

18 only thing I can sign up to. 

19 MR. ADLER: Let me ask a question. Going back 

20 to your question to the Secretary about could anybody go 

21 to jail about these activities, did you have in mind when 

22 you asked that question any particular statute which 
2 3 might have been involved, or were you focused on a 

24 particular law? 

25 THE WITNESS: No, n^..^-^ It was just that — I 

;, ■ f.XO>^S£CI^'r%CG 

■ I.i'^' t ."i ;. • ' a i « M 




163 



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1 mean, there was, as I said, a consensus among us that 

2 this was dumb. Now obviously some of us might have come 

3 to that conclusion for different reasons then others. I 

4 worked terrorism. I understand this business and I 

5 understood that what we were doing was going to produce 

6 more of what we had, more of the problem that we already 

7 had, and I assumed that this was the Secretary's concern, 

8 in addition to which he had sort of a visceral apparent 

9 dislike ior Iran anyway, at least for the regime. 

10 And I thought that these were the reasons. 

11 But it didn't seam to me that any of those in and of 

12 themselves justified what appeared to me to be a very 

13 substantial degree of agitation. And so in looking for 

14 the additional reason I said, have we got a legal 

15 problem. Is somebody going to go to jail over this? I 

16 didn't say it in any serious way. I didn't think the 

17 answer was yes. It was just almost a sort of to cut the 

18 tension a little bit. But he said yes. 

19 But he was concerned not so much, it seemed to 

20 me, and he said — I mean, it wasn't that he sort of 

21 ranked his concerns and my sense of it was that the very 

22 top of it was that this was going to be a political 

23 disaster for the President, a domestic political concern. 
2 4 And that seemed to me was what was before everything 

25 else. I don't think he thought that the legal dimensions 



' -; T6p^ sl;cR£'iy'<?(|Ei|«toJ 



164 





159 

1 of this were that important eitKer, and I felt that if he 

2 did feel that way, and the reason I didn't take it very 

3 seriously, to be perfectly blunt about it, was that he 

4 was clearly not prepared to resign over it. 

5 And if what we were doing was illegal, it 

6 seemed to me that -- and it had all the attendant dangers 

7 of doing something illegal, that he would have said I'm 

8 sorry, I can't be a part of this any mor« and he would 

9 have left. I would have thought I would have done that. 

10 BY MR. SAXON: (Resuming) 

11 Q In your tenure at the Pentagon had you ever 

12 seen him express views which would suggest that he was 

13 ready to resign over a particular matter if it didn't go 

14 the way he wanted? 

15 A No. I never did see him do that. But I was 

16 not exactly an intimate of the Secretary's. 

17 Q Let me ask you about some of your hostage 

18 dealings. We understand that some things you were 

19 involved with are not relevant to our inquiry so we don't 

20 intend to get into those matters. But, as you probably 

21 Icnow from testimony that the Committees have heard thus 
2 2 far, there is the DEA, Drug Enforcement Agency angle on 
2 3 some of this. So let me ask you a few questions about 

24 that. 

25 First, did you have any involvement yourself 

TOP. SECSET'/aDdBWORD' 






165 



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160 



1 in the recruiting that apparently went on by General 

2 Secord of DEA agents to be used for certain portions of 

3 these operations? 

4 A No. 

5 Q Were you aware of General Secord 's involvement 

6 in the DEA portion of the hostage rescue operations? 

7 A Was I aware of General Secord 'a involvement? 

8 Q Yes. 

9 ^ A. I don't think I was. I don't think I was. 
10 Q Were you aware that there was a plan to 

provide cash payments for^^^^^^^^^^^^^f as they 

12 have been characterized, in the Middle East for 

13 information as part of this DEA operation? 

14 A My recollection is yes, that I was, but you 

15 had a number of — I mean this was sort of amorphous 

16 information or ambiguous because — and I think the 

17 question that confronts us today is when does a payoff 

18 become a ransom. I mean, if I'm paying you and you're a 

19 bounty hunter and I say if you can get these guys back 

20 it's worth $50,000 or for information or for anything 

21 else, it seems to me that's a very legitimate. 

22 If it gets up high enough to where you can 

2 3 make money and you can buy, you can do that too. I never 

2 4 thought that money was going to get this deal done no 

2 5 matter how high the numbers got. In my judgment, we were 






166 



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1 not going to be able to buy these people back. 

2 So no matter what sums of money were disbursed 

3 I would have assumed that it was for information, for 

4 setup. It costs a lot of money to run a rescue. We had 

5 limited assets there. 

6 MR. ADLER: His question had at the end of it 

7 were you aware of that knowledge in connection with the 

8 DEA operation? Were you aware of what you testified to 

9 in connection with the DEA? 

10 THE WITNESS: Well, I knew, and while I was 

11 not directly involved in it, I knew from discussions that 

12 we had some drug people who were helping us there, and 

13 whether the money was for them or what money or where it 

14 went, that I didn't know. 

15 BY MR. SAXON: (Resuming) 

16 Q Let me make clear, too, that when I say cash 

17 payments I guess that's a bit loaded and has a pejorative 

18 connotation. But I simply mean that in the sense of it 

19 being wholly appropriate and proper in this context. I 

20 don't mean to make fine distinctions of what's expense 

21 money and walking around money and payoff and ransom and 

22 so forth but as a shorthand way to ask the question. 

23 Were you aware that there was a desire or a 
plan to wor^^^^^^^^^^^Lnd that 

25 agents vent^^^^^^^Mtpit'.t^nmv (Hat was given to them by 

y : <^ -^^^oi^/^q QE waaCM 



167 




162 

1 Hakim, Mr. Albert Hakim, to be used in this operation? 

2 A No. 

3 Q As far as you know, at the time that this was 

4 going on were you aware that Mr. Hakim had any 

5 involvement at all? 

6 A No. I was not aware of it. I mean, you know, 

7 Albert was a fixture, but I didn't know that he was 

8 involved in this. 

9 Q Were you aware that any Swiss bank accounts 

10 were being used in this operation? 

11 A No. 

12 Q For the record, in your tenure at the Pentagon 

13 have you ever had occasion in official capacities to use 

14 Swiss bank accounts? 

15 A No, I have not. 

16 Q To your knowledge does your name appear 

17 anywhere as a signatory to a Swiss bank account? 

18 A I don't think I want to answer that in front 

19 of my lawyer. 

2 (Laughter.) 

21 I have to pay my bills. The answer is no. 

22 Q For the record I thought we ought to ask that 
2 3 one. Were you aware on the DEA operation that there was 

24 a plan to use a ship purchased by General Secord and Mr. 

25 Hakim? 

; J MB '^CRET/CODEWtjftoS , 



168 



IINI!l4SSIfe 



163 



1 A No. 

2 Q Were you aware generally that the DEA agents 

3 in this operation, more or less reporting to Colonel 
North, had developed various^^^^^^^^^^^^^hat were 

5 going to be used? 

6 A Again, no, I don't think so, not specifically. 

7 Q Is there anything about this particular 

3 portion of the hostage rescue plans, of which there were 

9 apparently many -- the DEA angle — anything that you 

10 know that we should know that I have not asked about, 

11 particularly as it involves Colonel North, General 

12 Secord, Mr. Hakim and the things that have been made 

13 public thus far in these hearings? 

14 MR. ADLER: Off the record. 

15 (A discussion was held off the record.) 

16 THE WITNESS: The plans for a rescue were 

17 perfectly legitimate. The procedure was legitimate and I 

18 don't know how much you know about that or how deeply you 

19 want to get into it, but it was a straight-out, honest 

20 deal that wouldn't have required Swiss bank accounts. It 

21 certainly wouldn't have required anything that couldn't 

22 be sold to a court. 

23 BY MR. SAXON: (Resuming) 

24 Q Was Project SNOWBIRD the code name for all of 

25 the rescue operations for the hostages or some particular 



■:XOP ^CaET/COfcEWpilDl I 



169 



uHtiftsaaEi) 



164 



1 one? 

2 A Probably some particular one. It sounds like 

3 it would have involved drugs, so maybe it was part of the 

4 DEA thing. 

5 Q Does that ring a bell to you? 

6 A It doesn't, but these code names, we had so 

7 damn many of them, they changed with some frequency, so, 

8 you knew, when you were talking privately you tended to 

9 talk generically. I mean, are we getting the sons of 

10 bitches or not? And of course since you were the only 

11 g^ys who were talking to each other, the whole question 

12 of code words seemed in and of themselves silly. 

13 Q For the record, let me have introduced and 

14 marked as Deposition Exhibit 2 the two letters you have 

15 provided us which reference and further explain some 

16 things we went into earlier in the first session of the 

17 deposition, and that is simply your resignation letter to 

18 Secretary Weinberger dated 5 May 86. 

19 (The document referred to was 
2 marked Koch Exhibit Number 2 

21 for identification.) 

22 As you have explained it to us, after the 

23 Secretary received this letter he asked you not to 

24 resign, and then after some consideration you followed 

25 that with a letter dated 7 May 1986 in which at greater 



UNfMSSIFfED 



170 




165 

1 length you explain some matters. Let me simply note we 

2 are receiving these and will make them part of the 

3 deposition and part of the formal record. 

4 Is there anything that's of great relevance 

5 that you want to say with regard to these letters? 

6 A Only that the question has been raised, and 

7 I'm aware of that question having been raised, about why 

8 I left the Pentagon, and that seems to be related to was 

9 there some wrongdoing. And then there is another 

10 question of whether I was forced out because of my 

11 activities in trying to restore a special operations 

12 force. And neither of those are true and not only wasn't 

13 I forced out, but the Secretary was very vociferous in 

14 requesting that I not leave. 

15 And so I wanted it made clear exactly why I 

16 did leave, and I think that second letter does make it 

17 pretty clear. 

18 Q One final question before Mr. Saba for the 

19 House has some further questions. Have you spoken with 

20 the Independent Counsel in these matters? 

21 A No, I have not. 

22 Q And other than the sessions you have had with 

23 myself and other members of the House and Senate Select 

24 Committees, have you talked with any investigative or 

25 governmental authorities or bodies about these matters? 



mmmn 



ONCLASSm 



RO 166 

1 A I had yesterday my former military assistant 

2 received an award at the Pentagon and I went to the 

3 Pentagon for that praising. The award was held in Rich 

4 Annitage's office and he asked me if I would stay. He 

5 told me that the reason that he had been calling me -- 

6 and I had not returned his calls — was because he wanted 

7 to tell me what he was hearing. 

8 He said, I don't want you to tell me what 

9 you're doing or anything like that, you know. One had a 

10 sense it was an overture of friendship, really. 

11 Q Your impression, for the record, was that 

12 there was nothing improper or unhealthy about his wanting 

13 to talk with you? 

14 A Well, he's pretty prudent and conservative. I 

15 assumed that whatever he was doing, you know, was all 

16 right. I didn't say too much. He told me generally — 

17 as much as anything he was talking about what the press 

18 was questioning him about. 

19 Q Did he tell you what he had been hearing? 

20 A Yeah. 

21 . Q Are you at liberty to tell us? 

22 A In general ways. I don't think the question 

23 of, you know, what was my involvement. He said they 

24 deposed me for about three hours. You occupied about 15 

25 minutes of that. There was a question of our 



UNCMFIED 



172 





167 

1 relationship. He said I told there that I considered Noel 

2 to be a friend, but I don't think he considers himself to 

3 be my friend. And I had a sense he was fishing for some, 

4 you know, like oh, well, you know, when it's all over 

5 things will be fine. 

6 And he brought this up again later in the 

7 conversation and I said, I just made it clear that we 

8 were very close friends and it was a problematical 

9 relationship and it could not be characterized to say we 

10 were enemies. So that was part of it. It really was a 

11 kind of an effort to clear the air as much as anything 

12 else. I don't think he told me much that was 

13 particularly useful to know so that I could avoid getting 

14 in trouble or anything like that. 

15 Q Did you tell him that you had been deposed? 

16 A I'm not sure I did. I was fairly 

17 unforthcoming, as a matter of fact. I told him that I'd 

18 been interviewed. I did tell him, in fact. I told him 

19 that I had been — that's right, I did. 

20 MR. SAXON: I believe that's all I've got. 

21 THE WITNESS: Before we finish this portion of 

22 things, I want to go back on the question of subsequent 

23 discussions on the disposition of this effort — you 

24 know, what's happening. There was, I think — I'm not 

25 even sure I was still in the government. There was one 

|EiiOi 




173 



OHCUSSlEe 



168 



1 delivery that I was aware of, and I can't recall now. 

2 I remember I was supposed to have lunch with 

3 Dick Secord and he had to cancel it or something, but the 

4 point was that he had something else to do and rather 

5 than cancel it I came along. And I was told that I would 

6 not be introduced. 

7 BY MR. SAXON: (Resuming) 

8 Q You accompanied General Secord to a meeting? 

9 A To lunch. But they would not introduce me at 

10 the lunch because they didn't want the people they were 

11 having lunch with to know who I was. It seems to me I 

12 was still in the Pentagon during this period. 

13 Q So it would have been prior to when? 

14 A Well, it could have been, because even though 

15 I officially resigned the 30th of May I stayed on in 

16 accordance with a commitment that I had made until they 

17 brought Ropka in, and that was in August, so there was 

18 this period and it could have been in that period. 

19 Q Who was present at the luncheon meeting you 

20 attended? 

21 A There was Secord and Dick Gadd and two or 

22 three other people who were the crew of the plane that 

23 was going to take this stuff down. 

24 Q The TOW missiles or the HAWK parts as opposed 

25 to the contra side of thir 



ntra side of thina=L?^_^ 



174 



UNCli^lfB^ 



169 



1 A Oh, yeah, it was Iran. It wasn't contras. 

2 Q And did they discuss the mission itself and 

3 delivery at the meeting? 

4 A No. I think I had a sense that they were 

5 going to later on or something. They were getting 

6 together. Either this was just a work break, that they 

7 had had a discussion and were going to continue it, or 

8 something like that, but the discussions at the table 

9 were pretty innocuous. 

10 Q Was Colonel North there? 

11 A No. 

12 Q These were Secord's people and Stanford 

13 Technology people, the best you know? 

14 A The crew? 

15 Q Yes. 

16 A I think they were probably SAT people. 

17 Q Southern Air Transport? 

18 A Right. And then the last tine was, of course, 

19 when this thing went down once and for all was in 

20 November, and it happened that Dick and I were in London 

21 at the same time and I guess I knew, you know, that we 

22 thought they were going to close it and so I suggested as 

23 a reason for being there that he accompany a conference, 

24 accompany me to a conference where I was speaking, and he 

25 thought that was a good idea. 



ItHEtftSHED 



175 




i5C«"« 





(EVfRt: 



170 



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 



And as it happened the afternoon ha was 
supposed to speak he had to disappear, so I mean they 
were working this thing actively. 

Q Roughly when would that have been? 

A That would have been November 1, 2, 3, 4, 
something like that. 

Q Early November 1986? 

A Yes. And then I also invited him for dinner 
with friends of ours in London that evening and ha joined 
us for that. And, of course, we were talking about this 
at the time. 

Q At that point had the news story from the 
Lebanese paper about the McFarlane Tehran trip broken? 

A No. 

Q But was there a sense things were winding down 
in terms of the activities or about to break in terms of 
public? 

A No, no. The idea was we were going to get our 
people and he was confident. And we had all been up and 
down on this thing, but he thought that they'd got it 
now. And so there was a sense of tension. He had other 
people there. Albert was there. I did not meet with 
Albert or see him, but I knew where he was and we were 
staying in different hotels. 

Then whether it was pursuant to this dinner 




176 



llNELftSSUP 



171 



1 that I was hosting or what, I don't remember, but I 

2 called him. We had -- was it Jacobson that was the last 

3 one we got out? I guess that's who came out. 

4 Q I'm not sure. I think that's right. 

5 A Anyway, my sense was we were going to get a 

6 package — 

7 (A discussion was held off the record.) 

8 A I think my sense was that this was a package 

9 deal and , then it started to unravel. And so I was 

10 talking to him. I called him on the phone and I probably 

11 said something about who would be attending dinner that 

12 evening and I could tell. I said how's it going. He 

13 said, we got one, and I could just tell by the tone of 

14 his voice that this thing had just gone to hell in a 

15 handbasket. 

16 I said you're upset, aren't you? And he said, 

17 yes. And I said, what's the matter? He said, there's a 

18 delay. I said, can you fix it? And he said, I don't 

19 know. I'm trying. 

20 Q Is it your statement, then, that in those 

21 first discussions, I guess earlier in the day at the 

22 conference, that if it was Jacobson he had not been 

23 released and the expectation was to get either more or 

24 all? 

25 A He had not_ 





177 




172 

1 Q And then later the day you had the 

2 conversation that Jacobson had been released and he was 

3 the only one? 

4 A Yeah. 

5 Q At any point in those discussions was General 

6 Secord -- and I think we asked you this before, but let 

7 me ask it for the record -- did he ever in any way 

8 mention or allude to or expressly tell you about his 

9 involvement on the contra side of these matters? 

10 A Never. 

11 EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 

12 BY MR. SABA: 

13 Q I'd like to change the subject for a few 

14 moments. Mr. Koch, could you tell us when you first met 

15 Mr. Michael Ledeen and just briefly review your 

16 relationship with him? 

17 A I think the first time I met him was probably 

18 at a Young Presidents organization meeting in Las Vegas. 

19 This gets racy, doesn't it? And I don't know when that 

20 was — '82 probably. Let me see. Yes, it would be '81, 

21 I guess, because, come to think of it, Ledeen was just 

22 around, in a sense. 

23 He seemed kind of ubiquitous, you know. He 

24 did some writing and he did seem to be on Ikle's calendar 

25 and he was over at the State Department. And the reason 



WtMi 




178 



mm^m 



173 



1 I can date -- we seemed to know each other casually and 

2 this meeting in Las Vegas may have been in '81. But by 

3 the time of the kidnapping of Jim Dozier Ledeen was 

4 trying to play some sort of a role in this. 

5 Q How do you mean? 

6 A How do I mean? What kind of a role? 

7 Q Yes, 

8 A Well, he would call me, you know, at the 

9 Pentagon -- how are things going and so forth. And I 

10 wouldn't say too much because it wasn't too much to say. 

11 And I remember at one point he indicated that he was 

12 trying to make sense out of a communique that had come 

13 alleging to be a statement by Dozier. It wasn't clear 

14 what we had at first because it hadn't been translated. 

15 It wasn't clear whether it was a statement by the Red 

16 Brigades, the people that were holding him, or whether it 

17 was by him. 

18 But Ledeen speaks Italian and he was going 

19 through this, and the sense was I'm trying to help you to 

20 see if there is a coded message in here somewhere. It 

21 was all sort of very amateurish. 

22 Q What did Mr. Ledeen indicate was his interest 

23 in such matters? 

24 A Well, he was supposed to be an expert on 

25 terrorism and, of course, he had spent a fair amount of 




179 




174 

1 time in Italy, and that was one thing that he did seem to 

2 know. He was acquainted with Claire Sterling and so 

3 forth. But one had a sense that he was legitimate. He 

4 was around. He was in and out of the building and he was 

5 working for Haig, and so I thought he was okay. 

6 But he just didn't come into my work because 

7 he didn't seem to know too much about it. But he was 

8 pegged as a terrorist expert. 

9 MR. SAXON: Let's go off for a second. 

10 (A discussion was held off the record.) 

11 BY MR. SABA: (Resuming) 

12 Q All right. Continue. 

13 A So then, as I said, you know, we were just 

14 preoccupied with this thing. There wasn't much time to 

15 deal with Ledeen on it because he wasn't somebody who 

16 played, who seemed to know much about it. So he wasn't 

17 useful. And on that account, you know, I didn't have 

18 much to do with him, but he did call a few times and I 

19 thought it was just in the interest of being helpful. 

20 And I had no indication. I mean, I had no 

21 convictions about his understanding of his business. But 

22 in the specific instance in which we were working, there 

23 was no use for him. and he wasn't part of my operation so 

24 I didn't pay much attention to him. He was very 

25 friendly. 



UNKSW 



180 



\imM 



175 



1 And as things went on, I don't know, I think 

2 probably in '82, at some point, General Haig left and 

3 then somehow or other as a consequence of that Ledeen was 

4 out at State, as near as one could determine. All this 

5 was always very vague. Again, as I say, he was part of 

6 the group of people that one had a sense knew people. 

7 Again, he knew Ikle. He knew others, and he always 

8 represented himself as somehow part of the family. He 

9 knew Perle. Perle and he were pals. 

10 Q This is Richard Perle? 

11 A Yes. And Bryan, Steve Bryan. So, you know, 

12 it wasn't one of those things where you asked to see his 

13 credentials. Why are you in the building? 

14 And at length he asked if he could come over, 

15 you know, that he couldn't stay at the State Department, 

16 I think, or something like that. And so one way or 

17 another — and I don't know whether it was directly with 

18 me or whether it was through Ikle, whether he was already 

19 a consultant and I used him or whether I put him on my 
2 books — but in one fashion or another we had a 

21 consultant relationship. 

22 And there are others also. I mean, Bob 

2 3 Kupperman, it seems to me, was another one who was in 

24 this position. It was just sort of a list of people that 

25 are there. JLf you don't use them, you don't pay them. 




■ - -i * 1 ■ I 



a v^v 



I (_-/ 



181 



UNCinssife 



176 



1 But Ledeen would come around with some frequency to read 

2 the classified, and we'd chat. How are you doing? What 

3 do you think about what's going on? And it was casual. 

4 It became somewhat social. We had them over 

5 for dinner once or twice with others, and we visited them 

6 the same way -- nothing intense. We didn't do a lot of 

7 visiting back and forth. It was a very casual 

8 relationship. And this is stretched out over an extended 

9 period of time, by the way. 

10 Then somewhere in the late '83 time frame I 

11 took Ledeen on a trip with me. I was going to Italy. I 

12 thought it might be useful for me if he knew people in 

13 Italy that I didn't know, that that might be helpful to 

14 us. And the itinerary of the trip, in no particular 

15 order, involved Italy, Turkey, Israel and Germany, I 

16 think. When we got to Italy there was problems right 

17 away because evidently there was a great deal of distress 

18 in the embassy that I had brought him, that ha was in- 

19 country. 

20 And so that was the first time that I 

21 discovered that he had had problems with the embassy and 

22 with the Italian government, evidently. 

23 Q Could you very briefly outline what that 
2 4 concern was? 

25 A Well, I never really quite understood. It 

\\Juii la-i* 





182 



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 



lEtAS«D 



177 



dribbled out over a period of time that he claimed that 
they had hired him to do work as a consultant and that 
they had never paid him. Their story was that he had 
never done the work. 

Q By way of a contract dispute, then? 

A Apparently. But there was more than — then, 
at that time, or a later trip, the people in the embassy 
told me that he had started rumors in Itali 




Then again I don't recall the time sequencing, 
but he came to see me one day and was upset about 
something, and what it was was there was a story that ran 
in L'espress or whatever their Time magazine is 
indicating that the new director of SISMI, which is their 
external intelligence — S-I-S-M-I — Admiral Martini, 
and I'm paraphrasing this, that h« had gone before 
Parliament shortly after his accession to this job and 
among other things had been asked what are you doing for 
your country. And, as Michael put it, he said well, the 
first thing I've done is PNG Michael Ledeen, on which 
account Michael was suing, he said, suing this magazine. 

He couldn't figure out why Martini didn't like 
him. He said I4v^iaiiW2w A Aniwni^mf^his, and it turned 



liftssiffl" 



183 




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 



178 

out he said he wasn't a friend of his. The whole damn 
thing was like a soap opera. And so ha went off, you 
know, to sue either Martini or the magazine, or whatever. 
Anyway, so you know, these kind of vexations 

in the middle of a professional relationship are not_ 

particularly useful. 




know, it wasn't something I was 
working or that I thought I cared about awfully much. 




184 



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 asked him to join with Kapperman m 



ONCtSSMD 



185 



llN«lM8IBiO 



180 



1 producing a white paper on terrorism or trying to drive 

2 the State Department, which wasn't doing very well in 

3 this business of terrorism. 

4 MR. SAXON: That's Bob Kupperrnan at CSIS? 

5 THE WITNESS: Yes. I thinJc Kupperrnan made his 

6 contribution to that. To the best of my knowledge, 

7 Ledeen never did, and that dropped. But Ledeen, you 

8 know, came around and he would read the classified on a 

9 fairly regular basis, and that bothered me because, first 

10 of all, it occurred to me it was finally obvious that he 

11 didn't know anything about terrorism, except possibly 

12 what he gleaned in Italy from people he knew there. 

13 And second I was concerned that he wrote and 

14 that he clearly rolled this information over, even if it 

15 was only in the building or within the Administration. 

16 He was of no use to me, so I told my military assistant 

17 not to show him the classified any more. 

18 BY MR. SABA: (Resuming) 

19 Q When did you cut him off from the classified? 

20 Do you recall? 

21 A I can't be real positive, Joe. It would have 

22 been late, probably sometime in '84, mid to late '84. 

23 The cause and effect of this was immediate and he stopped 

24 coming around. After about two weeks we didn't see 

25 Michael around. 



m\mn 



186 




1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

13 

19 

20 

21 

22 

23 

24 

25 



181 

There was one other thing that I considered 
strange, and that was that he gave me -- he asked me if I 
could get two documents. 




187 



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 




3«8n't know 

anytnrr^ Em's be«n reading the classified. He's asking 
for stuff that he can't get. You know, those pieces 
didn't fall together in any sequential way. 

And then the next thing I knew was, of course, 
we were in the middle of the Iran deal. But the other 
thing that I thought might possibly be germane was the 
fact that in most of the places we went, except for 
Italy, the people who dealt with terrorism he was meeting 




S 




188 



:ir^ time in a rather goggle-eyed wa 



183 



1 for the first time in a rather goggle-eyed way. These 

2 were all great names. He didn't know any of these 

3 people. I found that surprising a little bit. 

4 And I can't recall very well, but it seems to 

5 me that if I was there, whenever I was there, I would 

6 have met with Rafie Eitan, so for sure if I met with 

7 Rafie, if I was there, I would have met with Rafie, that 

8 Ledeen would have been with me. On one of those 

9 occasions, and it may have been one when he was with me, 

10 there was the possibility of an Iranian link floated. I 

11 had a sense that it was just a trial balloon and I didn't 

12 follow up on it. 

13 MR. SAXON: When would you date that? 

14 THE WITNESS: September of '83. And so, you 

15 know, afterwards it occurred to me that Michael may have. 

16 BY MR. SABA: (Resuming) 

17 Q Would you say that at that time Ledeen had on 

18 that trip met Eitan? 

19 A Yes. I think he did. 

20 Q You do not think he had known him previously 

21 to that trip? 

22 A No, no. 

23 MR. SAXON: When you say there was an Iranian 

24 link discussed you mean in the context of — 

25 THE WITNESS: The discussion with Rafie. You 



UNffCSW 



189 



2 

3 

4 

5 

6 

7 

8 

9 



10 
11 
12 
13 
14 
15 



1 know, I had been -- who f«l^ o,r-i„ 

"no felt early on we needed to get 

straightened out w.th Iran anyway, and although the 
hostages were a .ajor part o. thxs question it was „ore 
the difficult.es that we were having in Lebanon as .t 
related to Iran, and xt was also, you know, being able to 

deal in Lebanon. And this foTi^^ k.^ 

i-nis reiiow had a man who had a 

background that could do that. 

So anyway I thought that that was the first 
time he met a number of the people had been on that. And 
then, as l said, i .new he was involved when this thing 
cranked up again. When he left me or when I basically 
cut the Classified off, then he just disappeared and he 
reappears at the White House. 

BY MR. SABA: (Resuming) 
Q This is in what time period? 



A Well, it's probably now we're into mid- '84, 
17 somewhere in there, up through -85. Then McFarlane 



18 

19 

20 
21 
22 
23 



leaves and it's not Mike so much. I mean, Mike would 
come around once in a while and pay a social call, and 
the thrust of his - i .ean, he was telling me he was at 
the White House and what was going on over there and that 
Poindexter was a great impediment to all the things that 
needed to be done, and he didn't get along with 
2* Poindexter. 

^^*" ^° ^"<^ behold Poindexter becomes National 



UlfCKSSlFIED 



190 



UNBlftSfffl 



185 



1 Security Advisor, and it was not him but, I think, 

2 probably his wife who I saw in the hall and she said, you 

3 know, Michael will have to leave the White House and 

4 you'll have to take him back. And it was said about that 

5 way, like we're all friends in the family and you'll do 

6 that, won't you. And I just was non-committal. 

7 Q Do I understand his wife worked for Steve 

8 Byron? 

9 A Bryan, right. 

10 Q What was her title, do you recall? 

11 A I don't know. 

12 • So then, as I indicated in earlier testimony, 

13 I think, Ollie, in our first discussions on this thing, 

14 affected a certain amount of exasperation that this had 

15 been Bud's thing that had been handed off on him and that 

16 Bud had used Mike. Somewhere Mike came into it and Mike 

17 didn't know anything, and Mike screwed it up, and they 

18 think he took money. So he was that way about Ledeen. 

19 Ledeen, as far as I was concerned at that 

20 point, was out of it and yet as it progressed it became 

21 clear that he was playing some separate game. He was in 

22 it, but I didn't know why and Ollie seemed to be worried 
2 3 about it. 

24 MR. SAXON: Were you aware that in roughly 

25 September of 1986 Ledeen went to Rich Annitage to get 



iimissififD 



191 



wmm 



186 



1 Armitage to open the door for him with Secretary 

2 Weinberger and that in fact Ledeen went in to see 

3 Secretary Weinberger to talk about these matters? 

4 THE WITNESS: Yes. We talked about that 

5 yesterday, by the way, because Rich and I talked about 

6 that when that first happened. I said, you know -- he 

7 said to me. Rich said, once he was knowledgeable and we 

8 both knew that the other was, he made it clear that this 

9 was stupid, in his view it was stupid. We could all 

10 stipulate that; it wasn't a problem because somebody's 

11 going to do it and if the President wants it done, you're 

12 going to do it or you leave. 

13 And so the question in the course of that 

14 discussion came up with Ledeen, and I knew Ledeen was 

15 coming in to see him, and I said, you know, Ollie was 

16 worried about this guy. Is he dirty? And he said no. 

17 And I said are you sure? And he said no, I took him 

18 right down to the Secretary and he told the Secretary a 

19 very plausible story about his involvement. 

20 He also told me that much more recently Ledeen 

21 had tried to strike up a relationship and calls him up 
2 2 and says, you know, why don't we get together with our 

23 families and go to the movies and things like that. And 

24 so Rich totally ceased any relations with him because, 

25 you know. Rich is not social that way. He's very private 



ONCtitSSIFe 



192 




187 

1 in that sans*. H« wouldn't do it with soreabody that ha 

2 didn't much know and who was sort oi sailing his body in 

3 that case. 

4 MR. SAXON: And you say ha talked about it 

5 yesterday? 

6 THE WITNESS: Ha talked about it yesterday, 

7 yeah, but the point was that Mike has been trying to 

8 somehow get back in this thing or what. I don't know — 

9 to cover himself or explain his side of the story or just 

10 what is not clear. But what's always been puzzling is 

11 that h* didn't get out of it when they wanted him out of 

12 it. 

13 And the question, of course, is why ha didn't. 

14 BY MR. SABA: (Resuming) 

15 Q During your acquaintanceship with him did he 

16 have occasion to mention to you Schwimmer or Nimrodi? 

17 A No. 

18 Q Did you know those gentlemen? 

19 A I think I might have heard Schwimmer 'a name at 

20 on* point, and Nimrodi is just one of these names, you 

21 know, another merchant of death. Nimrodi may have been 

22 one of the guys that Rafia had in mind for ma to deal 

23 with, but I never let it go to that point. And the only 

24 name — in fact, the guy that was there is a guy named 

2 5 ^^^^^^I^H who was the only one I knew for sure that he 




ONCffiSra 



193 




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 



188 

had in mind to try to put me together with. 

And this came up again. Rafie again tried to 
rope me into this thing much later. 

Q Other than Colonel North, did anyone else tell 
you that Ledeen was making money off of this deal? 

A My recollection was that Meron told me that 
and I don't know to a dead certainty if Mindy said 
himself that he thought he was or if he said that he knew 
others thought he was. 

Q What was the context of that provision of 
information? 

A It was a casual meeting. Mindy's a friend of 
mine and I was in Israel on business and stopped by to 
see him, and it was at a period when this thing was 
exploding, and it was in the early days, and it was a 
question of who knew it, of course. I don't know who 
knew it. 

MR. SAXON: So this would be late '86 when the 
matters were becoming public? 

THE WITNESS: Yes. I guess it would be late 
'86. It seems to me that's about right, or early '87. 
It had to be late '86. And, as I said, it was as we were 
speaking, it was popping. And a lot of people were 
saying I didn't -- remember, this is in the early days of 
who hit John, and Shultz was saying I didn't know and 



UNeiASSfftED 



194 




|E«2Y*P})|'«D|| 189 

1 Other people were saying oh, yes, he did. Bud said I 

2 told him all the time. And nobody had their fibs 

3 straight yet. 

4 So we were just sort of wondering. 

5 BY MR. SABA: (Resuming) 

6 Q Did Meron say that he knew for certain that 

7 Ledeen was taking money or did you take it to be 

8 speculation? 

9 AX don't remember exactly. It seemed to ne 

10 that there was speculation in the air, that's all, and it 

11 turned up somehow in the Tower Commission report and 

12 Ledeen was going to sue the Tower Commission or 

13 something. 

14 MR. SABA: I don't have any further questions 

15 on the Ledeen line. 

16 MR. SAXON: Do you have something else? 

17 MR. SABA: I do. 

18 MR. SAXON: Let me do a couple of quick 

19 things. 

2 BY MR. SAXON: (Resuming) 

21 Q One, for the record, your involvement with 

22 this negotiating with the Israelis TOW missile pricing, 
2 3 et cetera, did you ever discuss that with Admiral 

24 Poindexter? 

25 A I don't think so. 

TOP SECRET/CODEWORD 




195 



UNfiklfflffl 



190 



1 Q Did you ever discuss it with the President? 

2 A Never. 

3 Q Let me offer as a final deposition exhibit a 

4 photocopy of your entry in your desk calendar or diary of 

5 2 January 86, which simply reflects that there was no 

6 meeting, as we have discussed a short while ago, with 

7 General Meron, General Secord, Colonel North, Mr. Ben 

8 Yosef to discuss TOW missiles. That will be Exhibit 3. 

9 (The document referred to was 

10 marked Koch Exhibit Number 3 

11 for identification.) 

12 ■ And this is what is purports to be? 

13 A That is correct. 

14 MR. SAXON: That's all I hava. Joe? 

15 BY MR. SABA: (Resuming) 

16 Q Mr. Koch, in view of the time and the 

17 constraints I know you are under I'd like to ask a few 

18 questions concerning your role in special operations in 

19 the Pentagon. You have given us some of your background. 

20 Could you tell us briefly how your office relates, if at 

21 all, to the operational components at the Pentagon that 

22 were being established at that time in the Army and the 

23 Air Force? 

24 A Well, there were no operational components 

25 being established. My office related in the largest 




tJ 



;- J 



s 




196 



yNCiRSStfe 



191 



1 sense to trying to restore the capability to conduct 

2 special operations. That meant restoring those forces 

3 and driving the system toward some kind of policy as to 

4 what it was going to do with them. 

5 MR. SABA: Can we go off the record a moment? 

6 (A discussion was held off the record.) 

7 BY MR. SABA: (Resuming) 

8 Q All I want to do is I am trying to understand 

9 the connection, if any connection between you and the Air 

10 Force XOXP and the ODSO group over at the Army. You 

11 know, they had a number of programs called SEA SPRAY and 

12 those I would view as operational programs. They 

13 acquired assets; they did things. 

14 A I understand. The answer is I wasn't involved 

15 in that. 

16 Q You were not involved? 

17 A In many cases I had no knowledge of it. I 

18 mean, one of the units was one that got itself thrust 

19 into the public eye rather forcefully, which was the so- 

20 called Intelligence Support Activity, which I felt we 

21 needed and I tried to salvage, and we had some success 

22 there, although not we but General Stilwell was the one 

23 that had to deal with that. 

24 But the activities, I didn't feel that it was 

25 my charter to be involved in these things. I was not an 

PRET/TQPEWORD 




197 



UlttASSIIiED 



192 



1 operator. It was a policy matter and the opportunities 

2 that might be available to dabble in these things it 

3 seemed to me it would be presumptuous to do it. I did 

4 attend exercises. I did try to keep track of what people 

5 were doing, mostly in terms of being able to assist them 

6 with their needs and to get a sense of their problems, 

7 but not to get involved. 

8 And so things like SEA SPRAY, a lot of people 

9 would drop references in a casual way on the assumption 

10 that I knew what they ware talking about, and there was 

11 just a certain amount of by accretion I began to get a 

12 sense of what was going on where, but I was never in any 

13 of those boxes. 

14 Q Was it your duty to establish the means 

15 whereby such special operations would be contained 

16 entirely within the Department of Defense? 

17 A I construed my duty not to do these 

18 establishings, if you like, but just to drive the 

19 military. As I say, here's what is necessary. Here's 

20 the problem. This is what the world looks like. This is 

21 the geostrategic situation in the 1980s and in the future 

22 these are the kinds of wars we are going to fight. And 

23 you don't have what to fight them with now. I want you 

24 to get what to fight them with, and that's basically it. 

25 You guys decide what you need. It's not for 



198 




TOP SECRET/CODEWORD 193 

1 me to tell you what we need, but they would never — I 

2 mean, they didn't want to acknowledge that the world 

3 looked like this. 

4 Q So is it correct to say you did not recommend 

5 specific programs of implementation? 

6 A I did not, no. I recommended. As 

7 circumstances revealed themselves, as it became clear, 

8 first of all, that we had institutional shortcomings, you 

9 know, that we weren't structured to make the kind of 

10 progress that needed to be made in this thing, that there 

11 needed to be some structure, we again said to the 

12 military do you see this, and they said yea, and we said, 

13 well, you fix it. 

14 You come up with your own solution. Any 

15 solution would have advanced the cause of special 

16 operations. So they didn't want that. So we began 

17 little by li ttle to pus t^or^hinqs like the creation of 

was the^^^^^^^^^^^^^^^^^^^^^Hp That was 

19 done because there was a vacuum, because the military 

20 refused to fix it. So we said, okay, this is what this 

21 thing should look like, so that was how that was created. 

22 And each step along the way, whenever it was 

23 can you do this, will we do this, how many of these 

24 airplanes do we need, do we have enough, you'd get crap, 

25 and so at efcSa ■ ttf B ^u got more and more deeply involved 



fdn PfCB zpv^got more ar 



199 



U<^"" SECRET/ CODEWOI 



194 



1 in trying to force the solution. 

2 Q Did you get involved in making recommendations 

3 for or implementing any program for funding these 

4 operations? 

5 A No. 

6 Q Did you get involved in structuring procedures 

7 whereby these operations would become effective -- that 

8 is, what would the command structure be and what would 

9 the reporting obligations be? 

10 A No, not really. I got involved on sort of the 

11 philosophical side of that, but I wasn't directly 

12 involved in saying this is what the wiring diagram is 

13 supposed to look like, let's do it. 

14 Q Was it your understanding that such programs 

15 would follow a structure similar to that of th« 
^^^^^A system? 

17 A No, it was not. 

18 Q Did you coordinate your duties in a close way 

19 with any other agency outside the Department of Defense? 

20 A Well, not on the special operations side. On 

21 the terrorism side, of course, there was a close 

22 collaboration with others, but on the special operations 
2 3 thing that was an in-house problem and that's where we 
24 did it. The only place I looked to for help really was 
2 5 the White House, and the only source of help over there 




IJfV 



in 



200 



(INI^^SIHED 



195 



1 ultimately came to be Ollie North. Prior to that we had 

2 gotten an endorsement, you know, the Good Housekeeping 

3 seal of approval from McFarlane, but that's about what it 

4 was worth, you know. We never got any overt support from 

5 over there because nobody over there really had any 

6 strength to get anything done. 

7 Q What type of help would you have asked the 

8 White House and specifically Mr. North for? 

9 A Well, I mean, the bureaucratic game would have 

10 been I need leverage here. I need all the help I can 

11 get, and the Secretary is supportive but he's not 

12 supportive beyond the point where things get noisy, where 

13 he has to prevail on the Chiefs to do what they don't 

14 want to do. And he's not going to tell them what to do. 

15 So at that point, when you have no leadership 

16 in the Pentagon, at least on this issue, I mean, you can 

17 discover on something else, that's true. But on this 

18 issue, you know, increasingly it was a tradeoff between 

19 Koch, you know, going out and making the quotation of the 

20 day in the New York Times, like we've got bands at a 

21 higher state of readiness than our special operations 

22 force. I mean, they just didn't need that. 

23 And if that was the cost of the restoration 

24 period, then there wasn't going to be a restoration, and 

25 I didn't think after three or four years of dealing with 



I 




201 



UNeMRED 



196 



1 this it was realistic to assuTue it could be done any 

2 other way, and the only way you get movement with the 

3 services is you inconvenience them or you embarrass them. 

4 But to think you can reason with them is very naive. You 

5 shouldn't be in the building if you think that. 

6 Q What type of help would Mr. North have given 

7 you? 

8 A Well, he wasn't in a position to give me any 

9 help. That was mostly moral support. McFarlane could 

10 have, but North was too low-ranking and once North 

11 stepped outside the magic circle at the White House to a 

12 large extent he was trading on illusion and rainmaking, 

13 but when he walked in the Pentagon and he got anywhere 

14 near close to the military he was just one more 

15 Lieutenant Colonel and one they didn't particularly like 

16 a lot because he was at the White House. 

17 You know, that's not a place to get your 

18 ticket punched if you are serious about a military 

19 career. 

20 Q Would you have sought similar help from 

21 McFarlane and then Poindexter? 

22 A What we got from McFarlane was about as much 

23 as I thought McFarlane was capable of giving, which was a 

24 letter saying the President wants this done, which was 

25 fine, but Poindexter, I saw Poindexter as too closely 

Isl 





202 




1 allied with that part of the power structure in the JCS 

2 that was deathly opposed to this whole initiative. I had 

3 enough problems with John just on terrorism without 

4 getting into the special operations. 

5 The difficulty with this was always that the 

6 animosity that was generated by the special operations 

7 initiative would from time to time spill over, you know, 

8 when we had a real time terrorist operation. 

9 MR. SAXON: Did you have any input into the 

10 decisions about the services' own records retention and 

11 records destruction for these kinds of operations? 

12 THE WITNESS: No. I'd be amazed if they ever 

13 destroyed anything. 

14 MR. SABA: I have nothing further. 

15 MR. ADLER: Off the record. 

16 (A discussion was held off the record.) 

17 BY MR. SABA: (Resuming) 

18 Q Subsequent to your discussions in 1983 with 

19 various Israeli officials did you have any subsequent 

20 discussions or meetings related in any way to the 

21 provision of weapons or money to any third parties in 

22 return for release of one or more hostages? 

23 A You know, we dealt very closely with the 

24 Israelis on a regular basis but specifically there was 

25 never any discussion with them about arms for hostages. 




203 



KUSSD 



198 



1 That last discussion, to my best recollection, was held 

2 with Ben Yosef at the airport and that was that. But 

3 there was a discussion with Rafie Eitan. 

4 BY MR. SAXON: (Resuming) 

5 Q At the time you had that discussion who was 

6 he? 

7 A Well, he wasn't anybody at that point as far 

8 as I knew. I think he had become the head of their 

9 chemical company or whatever. I don't think he acceded 

10 to that job yet. Rafie Eitan was the Prime Minister's 

11 advisor on terrorism and well qualified for that job, and 

12 a protege of General Sharon, who obviously was a heavy 

13 breather. He was the one that I would deal with on these 

14 matters. 

15 Now when the coalition government came in and 

16 Peres — it was his turn on top -- he got rid of Rafie 

17 and brought in a man named Amiram Nir, who was the son- 

18 in-law of one of his major supporters, who is a publisher 

19 of a major newspaper. And that transition was pretty 

20 smooth. We sort of missed Rafie because just 

21 establishing a relationship with him and the screaming 

22 and shouting that that required, once you'd done that you 

23 didn't want to see it wasted. 

24 But Rafie went away and then, you know, the 

25 Israelis would come over here. You know, there would be 



ONttffilFfO 



204 





)Q£MR 



199 



1 

2 

3 

4 

5 

6 

7 

8 

9 
10 
11 
12 
13 
14 
15 
16 
17 
13 
19 
20 
21 
22 
23 
24 
25 



a message Rafie said hello or this sort of thing. And 
the word was that Rafie was taking this thing hard. 
Rafie wasn't very well. Rafie had cataracts and he was 
going to have an operation. It was kind of family, you 
know, this sort of thing and the way you get in this 
business after a while, it's very personal. 




205 



aqe 



^m 





ifO 




206 



•■taMk 



UNIIASU 



1 

2 

3 

4 

5 

6 

7 

8 

9 

iO 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 




iBA: I Tiav* nothing further. 
MR. SAXON: Let me simply say for the record, 
Mr. Koch, we appreciate your having inconvenienced 
yourself to come bac)c a second time because we weren't 
able, for our reasons, to finish the first time and it 
should be noted you appeared here voluntarily. You have 
been very open with us and on behalf of our two 
committees I want to thank you very much. You have been 




MSffEB 



207 



1 

2 
3 
4 

5 
6 

7 
8 

9 
10 
11 





202 

very helpful. 

MR. SABA: Thank you. 

(Whereupon, at 12:15 p.m., the taking of the 
instant deposition ceased.) 



Signature of the Witness 

Subscribed and sworn to before me this day of 

, 1987. 



Notary Public 



My Commission Expires: 



IINWMD 



208 



mm 



f^c^iri 




Michal A. jc'.-.afer 



REPORTER 



che officer before whom :h( 



foregoiag deposicion vas taken, do hereby certify that the witness 
whose tastiaony appears in the foregoing deposition was duly sworn 

by ; that the testimony of said witness was 

taken by ae to the best of ay ability and thereafter reduced to typewritin, 
under ay direction; that said deposition is a true record of tne 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 •mployed by the parties thereto, nor financially 
or otherwise interested in the outcome of the action. 



.^ 



NOTARY PUBLIC L 



Hv Coam 



ission expires: ^•loA^/^L' 



UNCLASSIRED 



209 



lilLASSiFlEO 

DEFENSE SECURITY ASSISTANCE AGE-^CV 



^emo For .£^^^^£22^^ 



'3^^^ Oar). Colir-s Pi?vo<iJl (3Wy 




^ 










90 



:e- 



aided \R: . 



5e replaced, 



liable difficulties • 

sales, incLudin? 
ec. 3 of the ^ECA. 

es "of Hi million 

or indirect to a 
nc lass if led (except 
ot take place until 
ys can be waived for 
transfer has no such 
given in any case. 

dered through Israel. 



ken into 3 or ^ 
tice . 

n against splitting 
, the spirit and the 
and all Administ rat icr.s 



cj ^ -■: 



It is conceivable that, upon satisfactory consultation Kith 
Chairmen Lugar and Fascell and their minority counterparts, 
they might agree to splitting the sale into smaller 
packages . 



, - ■ J . •. 



The custorer countries ''J;E and Korea) would have to be 
their deliveries had been rescheduled, but we would not h3\e 



/ 



tell ther wh> 
deliveries . 



We would not uant 



charge 



■ere 



Mimm 



210 




o 91 



..-.ere 

'J ^ E a • 
but :^ 



'^3--3r.e r:;"". r. ox, sjitarl? 
":5 3:les at .Red .Ri\er Arse- a! 
• : r e a . S e \ e -. of : - e s e are : 
:i~ -e fere;:-. e. 



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ai S-'",""; ar 



■.a . 



c : ; r .■ .■ 
rerlace'f-' 



_^ ^ ;^ 



l<b 
a> 

00 



Thus, the t:tal nil fcr 110 .-.issiles v,ould be Sl-j-s:.: -:ll;:- 
To thi; . aprl.caole cTarjes would have to be added SRI ccst. 
adr.i.iis: rat .0.-. c.-^ar^e, packing and transport c.-.arjes , plus 
storage ' . 

The missiles for Korea and 'J,\E would have to be replaced, so 
DSAA will need the money to replace them. 

The modalities for sale to Iran present formidable difficulties: 

-- Iran is not currently certified for soles, including 
indirectly as a third country, per Sec. 3 of the AEIA. 

-- Congress must be notified of all sales of S14 million 
or more, whether it is a direct sale or indirect to a 
third country. The notice must be unc lassif led (except 
for some details), and the sale cannot take place until 
50 days after the notice. The 30 days can be waived for 
direct sales, but the third country transfer has no such 
provision, and notice must still be given in any case. 

-- Thus, even if the missiles were laundered through Israel, 
Congress would have to be notified. 



It is conceivable that the sale could be broken into 
packages, in order to evade Congressional notice. 



3 or J 




i3S5 



While there is no explicit injunction against splitting 
up such a sale (subiect to check...), the spirit and the 
practice of the law is against that, and all .Administ rat ic?.; 
have observed this scrupulously. 

It IS conceivable that, upon satisfactory consultation with 
Chairmen Lugar and Fascell and their minority counterparts, 
they might agree to splitting the sale into smaller 
packages . 



The customer countries (UAE and Korea) would have to be told tha: 
their deliveries had been rescheduled, but we would not have : : 



tell 



'. er w.-.^ 



Ke would not uant to c> 



. u._ _, 



r.cre 



deliveries 




211 



UNCLASSIFIED 



H F 



92 



:^aj 



aq e\er frund c 
3 , . h D .> e \ e r 



. - r ; : . 3 a -. ; : .- e : 
: a: ec a-.: alar-ei 



r a e . ■> e r e j ? e : a • 
te crea: I- e-.::uracei 
exrar.i :-.e ir ja les . 



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u-.Tl are -ore rea^.. 3-, = ;5.7 
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,e laur.derir.g cou: 
c:r.:ir.-e sell.-; 



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I: r-.e sale reca-e n-.:--., all bars would be reTo\ed fro- 
sales b\ s jc'r. cc-ir.tries as 5pa:n, Portugal, Greece, '-'k, 
Iralv, and FRG, countries who are only barely restrained 
from overt, large sale; to Iran now. 

In short, the risk is that of prolonging and intensifying 
the Iran-Iraq war, while seriously compromising US influence 
over Israel and other countries to restrain sales to Iran. 



mmm 



r. 



DEFENSE SECURITY ASSISTANCE AGENCY 



Mtmo For. 



H F 



93 



^^■'y Oeciassiliea/Reieaseo oo 

unaer crov«,r,s Of E liST 
C /^K' ^°''"'°" '^"""''> Security Cou//l 



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UNCLASSIFIEI 



M L.-^C 



OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE 

INTERNATIONAL SECURITY AFFAIRS 
FRICA REGION 







"(^voi J --^V ■^*'*' 



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^rv>— v^ V^'-^ v..^^^ -^V--^ -'-^•^ 



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UNCLASSIFIED 



Partially Deciassifiea/Re'easefl on .1 fjil t -- ^ _ 

undef provisions 01 f '.''356 ■* I \ 




by K Jonnson Naticai Security Council Mm^WtB-^T^/ I ^^ 



218 




Inn TesHmony 
21 Noveflbcr 1986 



OCI '^ 
20 Nov 86. 1200 

C 52.05 




Administration, both the natic-al security comunity 
and ^^^KelHgence community have been keenly aware anc constantly concerned 
about^^^MopoHtica^B|Ution and the strategic signifi:ance of Iran. Much 
(hQugl^^^Hw^^H^^^^n devoted to how we night deve^. :p contacts and 
relation^rH^^^^^^)*] provide a better understa'cin; :' what is happening 
there and establish contacts and relationships which migh*. lead to improved 
relationships later on, 
I recall speaking t 




In the fall of 1985, Bud McFarlane, after a weekly mtiting which he and 
his deputy had with me and my deputy, asked me to stay be'^nd. He told me 
about discussions he had had at the highest levels in Isri^l ur 
desirability of discussions with officials in Iran ard of^^rij 
access. 1 distinctly recall McFarlane emphasizing that tr= 
discussions would be the future relationships with Iran ar-: 

in the East-West and Kiddle East-Persian Gulf equation. 

to put us in touch with an Iranian expatriate. The IsraJ 




Irei 



checked out this man's background and contacts exhau;: W^^nd had high--| J 

.in t-e ciuility of his relationship with t-cr l-:-ian of f ici a1 s H*^ "-^^^ ^^ 



conf idence 



:onf Idence ..m :!-e ciu 



LUkC SS 



fcjumEii 



;4 6L 



219 



UNCIJfSSIFIED 



C 5210 



//y 




^would trjnsfer funds to a sterile U.S.-controllee 
^verseas bank, 
fusing these funds, the CIA would covertly obtain materiel 
jauthoriz ed for t ransfer from U.S. isilltary $tocits,*aa_irAaipa£t 
■for onward movement to Iran. 
Usi'n'^^^^^^B^res, funos were deposited In the CIA account i:, 
Geneva on 11 February 1986 and on 14 February 1,000 TOWs were transported 
to Israel for pre-positioning. These TOWs were transferred by CIA fron OoD 
(U.S. Army stocks 1n Anniston, Alabama) and transported througl^^^^lH 
^using standard CIA-0oD^^^^^^Hlog1st1cs arrangements. Policy- 
level coordination for these arrangen^^^Bs effected by NSC (North] with 



OoO (Analtage and Koch) and CIA (Claf 
covert Israeli facility awaiting onwa 
On 19-21 February, U.S. and Ira 
In Germany to discuss problems in ar 




). Ttit TOWs were place<j In a 

lent. 

Iclals (NSC and CIA) met again 
a meeting among higher-level 



officials. At this meeting, the U.S. side agreed to provide 1,000 TOWs to 
Iran as a clear signal of U.S. sincerity. This delivery was canmenceo on the 
morning of 20 February and conpleted In two transits to Tehran on 21 February. 
Transportation from Israel to Iran was aboard a false flag Israeli aircraft. 

On 7 March, U.S. (CIA and NSC) and Israeli representati 
Iranian intermediary in Paris to determine whether any furth 
possible in arranging for a hiyh-level meeting with U.S. a 
During these meetings, the intermediary emphasized the d 
situation in Iran and Iranian anxieties regarding Increa 



effectiveness. 



d IJ^ «LI 1/ 5 



RCVIEWEO FOA KClCASC 

6 
^rrcf 




DO 



67::. 



UNCUMim 



220 



I 






.\t'\ 



WMmm 



\ 



7 



NTRACT/ORCON 



_ MORKINC DRAFT (3 0«cti)&«r 1986) 
(This drtft rtflicts facts tvtHtblt tMt aornlng. 



4531 



TMi 



Rtvlslons My bt ntcisstry <s «(jdUlon«1 facts surface) 



\ 



US-IranUn Contacts and tht Anarlcan Hostagts 
Chronology of CIA InvolvtMnt 



9 Stottuber 1985 : LTC OMvtr North calls Charlts E. AHtn. National 
Inttlltgtnct Offlctr for Counttrttrrorlsa (NIO/CT) on sicuri tiltphont. North 
statts that ht is worliing a Mttir of hightst laportanct and str«ssts th* ntcd 

r 

to hold th« InforMtlon hi has to Imrt on a strict nttd-to-kno« basis. 

t 

Rtqutsts Allan. In NIO rolt. to task InttlHgtnct C o — unity to tncrtasf 
colltctlon on Iran and Ltbanon. Assirts that an Aatrlcan hostagt. possibly 
Nllllaa Bucklty, sight bt rtltastd 111 ntit stvtral days. Provldts a garblfd 
surnaM of an alltgtd stnlor Iranian official who was said to bt Involvtd In 
tht rtltast. Alltn rtstarchts na~* ■' 




Alltn rtqutsts Nhitt Houst guldanct on 
should bt dlssTmlnattd. LTC North, afttr consulting with N«t1ona1 Stcurlty 
Advisor MacFarlant. dirtcts that dlsstnlnatlon bt llalttd to Stcrttary 



diJN /?Zt 





325)^ 



221 



f 



mmm 



RACT/MCOH 




T-^ ^tbrur 



Lie- North rtqutstsi 



«nd Alltn to coiw to 



tht Eucutiv* OfftCf luHdtng for « mtttlng on futurt Actions rtUtlnq to tht 
IrtnUn InltUtlvt. Also tn «ttindtnct it this Mttlng «rt Stcord ind No«1 
Koch. LTC North pnstnts « dttiHid schtdult rtUtInf to shipntnt of tms to 
Iran.Wch co1nc1d)A9 «Uh tht rt)i«si of «n Aatrlctn hosttgi tnd, ultlatttly. 
tht rttJrn of tttt body of A«trtc«n dtplo««t Minttn Bucklty. 



n ftbrutry 1986 : Irjnltn tip«trUtt irringtd ftntncing for 1.000 US TOM 

■Issllts: $3.7 alinon aovts Into « CIA account. Tht total ucunt of funds 

which aty havt bttn Involvtd In tht optrttlonal trtnstctlons Is not known to 

CIA btcaust tht financing and all otter transactions art handltd by privatt 

Invtstors and inttratdlarlts. Thost 'transactions of which wt art awart art 

stt out in stqutnct btlow. | 

I 
I 

13 Ftbruary 1986 : CIA obtains 1.000 JOMt fron OOO's Ar«y Logistics Connand. 

Thtst TONS art transftrrtd by CIA froa 000 (US Aray stocks In Annlston. 



Alabaaa) and transporttd throug| 

logistics arrangtatnts. 



jsing standard 000-CIA 



15 Ftbruary 19>6 : CIA dtllvtrs TOMs to Ktlly Air Forct Bast., NSC arrangts 
for privatt transport to Isratl by Southtrn Air Transport, a foratr Agtncy 
proprlttary. / ^ 

I \ 

19 Ftbruary 1986 : OOO/OC/NE and LTC North attt in Frankfurt with Iranian 

tipatrlatt. 




ci//vqi 



13 



^".^^ 



222 




UNDbA^ED 

U.S. HOUSE OF REPRESENTATIVES 

pfMUMMT teicr coMMrrm 

WASHmOTON. OC MtK 






Ciff-/ /C, 



51 



ftovmber 2S. 1986 



Honorable Caspar W. Weinberger 
Secretary of Defense 
Washington, O.C. 20301-1000 

Dear Mr. Secretary: 

Enclosed is a transcript of a briefing before the Permanent Select 
Coratittee on Intelligence of Noveaber 21, 1986. This transcript contains 
Covert Action oaterial and aust be protected accordingly. Pursuant to Rule 4 
of the Rules of the Cooaittee, it is requested that appropriate corrections be 
oade and oorapleted transcripts returned within five days following receipt. 
This sane rule provides that "Corrections shall be liititad to grannar and 
tiinor editing, and nay not be made to change the substance of the testimony." 

Pursuant to its procedures to protect transcripts of executive sessions, 
the Connittee is transmitting the enclosed transcript with the understanding 
that it is provided on teaporary loan and that no copies will be made thereof. 

Also enclosed are questions for the record. It is requested that your 
responses to these questions and the edited transcript reach the CoRnittee by 
Oecenber S, 1986. 



With best wishes, I aa 



SincW^ 



y yours. 



Lee H. Huailton 
Ouinan 




Enclosures 




223 



MfmM 



• 83 



tUBJICTi Ou«ttlon« and Answer* for tha Kaeord frea ••eratary 
of "Dafanaa Taatiaony lafora tha Houaa Parmaaant 
lalact Coaalttaa oa Intalli^aaca, it Dacaabar 198« (U) 

1. Tha Co««lttaa raquaata a copy of tha Ktmy laapactor Oanaral/ 
Caaaral Couaaal raport oa thalr invaati9«tioa of tha pricia9 of 
TOW fld.asilaa tranafarrad to tha CIA. 

Ai (U) Upoa eoaplatloa of tha raport, a copy will ba provldad 
to tha Coaalttaa. 

2. Tha Coaadttaa raquaata a copy of tha Sacratary of Dafaaaa 
BMaorandua and margiaal notaa on tha Draft MSDO of Juaa 198S 

At (U) Thaaa ara provldad at TAB A. 

3. Was tha baaic TOW aold to any othar country in tha laat 
two or thraa yaara? 

Ai (C) Yaa. Froa rt 1903 to FY 19t<, basic TOW waa aold to 

tha following couatriaa (quaatitiaa la paraathasaa) t Jap«n 

^^^|, Kanya ^^f, Koraa^^l' Morocco ^^^|, Somalia | 

and Thailand 



f 



4. Did Canaral Sacord hava any kind of Consultant contract, 
or othar ralatioaahip or poat, with tha 0•par^aaat of Oaf ansa 
aftar his ratiraaaat? 



At (O) Tm. rellowiag his ratiraaaat oa 1 May 19a3, HO 
Sacord was approvad as a conaultaat appoiataa for tha 
Offica of tha Assist«at 8aerat«ry of D«fanaa ( Xntaraational 
Sacurity Affairs), spaeifleally for tha Haar Bastara aad 
South Asiaa Affairs Raqloa. Effactiva 11 July 1983. HO 
Sacord was authorisod 130 days at a rata of 1342.00 p«r 
day, but ha did aot aarva any days la a pay statua. On 11 
July 1984, no Sacord waa aqain approvad as a consultant 
appointaa and authorisad 90 days at a rata of $242.00 par 
day. but ha did net sarva any days in a pay status. MO 



Partially DeciassiMed/Reitased on j-^ ^W* ff^ 
undei Dfovisions ol E 12356 
by K Johnson National Securiiy Council 



-VN^illFm 



VIA COMIMT CHANVELS 



224 



mms0 



84 



Sccord'a appolntacnt w«s t«rminat«d on 10 July 198S. On 5 
August 198S MG S«cord w«a appolntad aa a conaultant without 
coBpanaation for up to tan days. Thla appclntaant waa 
tarminatad on 4 Auguat 1986, and tha Oapartaant haa no 
racord of hla having b«an on a duty atatua on thla appolntmant, 
with tha following axcaptlon. On S Auguat 1985, MO Sacord 
was appolntad as a conaultant, without co^anaatlon, to 
tha Sp«clal 0p«ratlon8 Policy Advlaory Group (SOPAO). His 
tara on tha SOPAG azplrad affactlva 4 August 1986. During 
thla ona-yaar tarn. HG Sacord partlclpatad In ona aaatlng 
of tha SOPAG, on IS Novambar 1985. Ha has not p«rtlclpatad 
slnca, and thla is tha laat conaultlng activity In which 
ha partlclpatad, according to Oapartaant racorda. Partlnant 
documantatlon is anclosad at TAB B. 

5. Haa Ganaral Sacord droppad fro* ona of our coaimlttaas for 
falling to azacuta a financial stataaant? 

At (U) MO Sacord sarvad on tha Spaclal Oparatlons Policy 

Advisory Group (SOPAG) froa January 1984 to August 1986, 

although ha last partlclpatad In Bovaabar 1985. ^W Sacord 's 

aaabarship on tha •OPAfl was taralnatad, affactlva 4 August 

1986, baaad upon his failura to provlda tha Oapartaant 

with financial Inforaatlon (as raqulrad In fora sr 1555). 

Aapllfylng Inforaatlon Is ancloaad at TAB C. 

6. Hava any TMS or othar aras aalas by tha Oapartaant baan 
aada to any 'aganta or alddlaaan' as opposad dlractly to a 
raclplant country? 

A I (U) No FMS or othar aras aalaa to foralgn countrlaa 

hava baan aada by tha Oapartaant through a prlvata agant 




Ti- 



i»fn 



225 




UNCUSSIFIED 



nCHAXO V. SICORO CONSULTANT HISTORY OSO ■ ^OUCY 





101 



Oatt of Appointment 


Office 


Days 
Approved 


Salary 
ptrOay 


Initial Appt -07. 11-«3 


ISA/10/NESA 


130 


S242.00 


R«n«wiltff-07-n-«4 


ISA/10/NESA 


90 


S242.00 


Tannlnatlon tff -07.10-« 


ISA/lO/NESA 






Appt to SOPAC tff -t-S-iS 


ISA/SP 


10 


woe 


Appointment txpirtd 1-4-M - 
RMutst to r«n«w app fwdtd 
toNrsonnalJ-ll-M 








Tamynation 52 fwdtd to 
^nonnti 10-23-46 
«w^rM|utsttd tff data of »-S- 
M, based on S«<ords refusal 
to provide SriSSS 









'Spedal Operations Poliq^ Advisory Group 




226 



19 November C^rO ^^i^ 



324/4: 



ffi^^p 



2 >-/ 



8 30 A 



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230 



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ininn 



ii:ii^jr^T^iii!ii 



730 



230 



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830 



l^'^^ I )lKh •^£i-cf 



230 Z^ b>^^~ 






<;^30 



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March 1 




234 




ttC\jmiT V A r ' A,tm% 



THE ASSISTANT SECRETARY OF DEFENSE 

WASHINGTON, D C 20301-2400 

UNCUSSIFIED 



fell &^" 1 



5 May 1986 



Honorable Caspar W. Weinberger 
The Secretary of Defense 
Wash ing tor. . DC 

Dear Mr. Secretary, 

I request that you accept my resignation as Principal Deputy 
Assistant Secretary of Defense for International Security Affairs 
effective 31 May 1986. 

I leave with a good heart, inspired by your own example of 
tenacity in the service of those objectives and values to which 
you are committed. I am gratified to have been able to serve in 
the Department of Defense under your leadership, and most thankful 
for the support you provided to the efforts in which I was engaged. 

It has been a special privilege to serve, however remotely, 
a grand and gifted President in a time in our history exalted by 
his own skills and character. He may yet redeem the 20th Century. 

If I can render any service to the Department or to yourself 
at any time, I shall be honored to be asked, and quick to respond. 

Thank you, and God bless you and all your efforts. 

Respectfully yours. 




^ 



Noel C. Koch 

Principal Deputy Assistant Secretary 

International Security Affairs 





UNCIASSIFI[' 




235 




THE ASSISTANT SECRETARY OF DEFENSE 



WASHINGTON. D C 20301-2400 



■ ■WTlaMATlOX) AC 



\mtm»B 



7 May 1986 



Honorable Caspar W. Weinberger 
The Secretary of Defense 
Wasfiinqtor, DC 

Dear Mr. Secretary, 

I have thought carefully on your request that I withdraw my 
resignation. It Is always agreeable to be needed, or at least 
told that one is needed. 

It is important to understand that my decision to resign 
much preceded the recisslon of the 3 October 1983 memo. To the 
extent that internal events were determinant, it was far more 
the management of the SOF lift issue, and the report to Congress, 
than any other single factor that convinced me I should proceed 
with plans to leave. I have no great difficulty supporting a 
decision with which I disagree, but I do have trouble supporting 
one that I can't even understand, which is arguably no decision 
at all and which, in any case, is indefensible in light of the 
Department's own pr i or i t i es--economy not least. In addition, to 
put it plainly, I don't believe the matter was managed honestly, 
in good faith. It stinks of duplicity. Now it's finished — or 
my part in it is, and I Intend to be silent on It. 

There is the matter of my replacement, and I have to say 
the following on this point. The Special Planning operation was 
jury-rigged from the outset and, among other problems, plagued 
with nanpower shortages. Half my small staff are borrowed from 
the Services and other agencies. There are nine people in all, 
with one secretary, crammed Into a miniscule space. These few 
people do what OJCS does with 60 plus people, what our State 
counterpart — the Office for Combatting Terrorism — does with 
nearly 40 people. In spite of repeated efforts, I am ashamed to 
say I have not succeeded In correcting this situation. In spite 
of all this, these people have done exemplary work, unrewarded. 
Even now, I would not advise a large Increase in the staff, but 
there should be adequate secretarial assistance and suitable 
space. I have not the slightest doubt that we break every 
record in the Department for insufficiency in both areas. All 
of this, compounded by the need to keep terrorisn issues com- 
partmented even within Special Planning, has made It Inpossible 
to bring up a replacement for myself. This deficiency has also 
been pointed out to me, and complicates my efforts to leave. 



nu ii mm DLUUJj i l i u i;Reie;)se(i on j) fiSi 

'jnae' provisions oi E !_' '55 

by K jonnsun National S;; . :, j.-oncil 



UNCUSSiFIED 



236 



iifimim 



Along with yourself, both Dr. Ikle and Rich Armltage have 
urged me to reconsider my decision to resign. There are personal 
reasons for me to proceed. I want to spend time with my children 
and my wife, and I would like to try to provide for them a little 
better than I can now. To do this, and still to meet my obliga- 
tion to my duties In the Department, I propose to continue as a 
full-time consultant beyond 31 May 1986, and Rich Armltage Is In 
accord with this approach. I believe this will assure an orderly 
transition, and I hope tt will be acceptable to you. 

Respectfully yours. 



0>i^ 



Noel C. Koch 

Principal Deputy Assistant Secretary 

International Security Affairs 



ttSWSStt® 



iCxr.^- 



7) 

2^nuary 



_ J ■ 



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238 



239 



STENOGRAPHIC MINTJTES 
Unr«Tij«d m/id I'ncdltcd 
Not for QuoUtion or 
Duplication 



UNCLASSIFIED 




r 



''"'^^^%£D' 



Committee Hearings 

oftlM 

U.S. HOUSE OF REPRESENTATIVES 



w (^ 



PM«My DKilHified/ Released on ^-^^ ^^- ^^<f^ 

under provitloni of LO. 1235* OFFICE OF THE CLERK 
, . • b)f O. SWu>, NUUonil Security CouKQfnce of Omcl«l Reporten 



UNCLASSIHED 



oopr nOu 



240 



I 

2 
3 

U 
5 
6 
7 
8 
9 
10 

1 1 
12 
13 

m 

15 
16 
17 
18 
19 
20 

2 1 



UNCLASSIFIED 



NAME HIR22U000 llllll I H V V I L I L 1 1 PAGE 1 



RPTS MCGIMK 
DCHN DANIELS 

DEPOSITION or DAN H. KUYKENDALL 

Wednesday. August 12, 1987 

U.S. House of Representatives, 

Select Conitittee to Investigate Covert 

Arns Transactions with Iran, 
Uashington. D.C. 



The conmittee net, pursuant to call, at 900 a.m., 

in Roon 2203, Rayburn House Office Building, with Spencer 

I 

Oliver presiding. 

Present: r. spencer Oliver, Chief Staff Counsel to ' 

the Foreign Affairs Coimittee; Thonas Frynan, Staff Counsel; 

and Kenneth Buck, Assistant Minority Counsel. | 

I 
Also present: Uilliaa Coston, on behalf of the I 

I 

witness . 



UNClASSinED 



241 



NAME 
22 
23 
24 
25 
26 
27 
28 
29 
30 
3 1 
32 
33 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 



HIR224000 



UNCUSSIFIED 



PAGE 



> DKlMifled/ReWaiMl on 

unde 



MR. MALLON: I ara Charlie Mallon from the Sergeant 
at Arms' Office. I am a notary and I am going to suear you 
in . 

t Ui tnass sworn . ] 

BY MR. OLIVER- 
2 Mr. Kuykendall. ua are going to try to make this as 
brief as ue can, although our experience is that these 
things have run on much longer than wa anticipated. But if 
ue could start, sir, I wonder if you cold give us a little 
background about yourself for the record, education and so 
on. your activities leading up to your election to Congress, 
and so forth . 

A I was raised on a ranch in Cherokee, Texas. I 
graduated from Texas ACM after nilitaiy service. ny college 
education was interrupted by military service. I was a B-29 
pilot in Uorld War II and came back to college and finishe'^. 
a year and a half and graduated in 1947; went to work for 
the Procter C Gamble Company immediately. 

I was with the Ptoctat £ Gamble Company in Houston, 
Dallas. Corpus Christi. Louisvilla. and Kamphis. 

I arrived in Memphis in lata 1955. so effectively I 
bagan work there in early 1956. as Regional Manager for the 
Hidsouth States in tha Food Products Division, where X 
stayed until 1965, where I resigned. 

I became active in politics as a volunteer in 1960 



i)/, J/, /f,jr7 



er provWoni of LO. 12356 
by O. Stio, NUtionaJ Security Council 



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NAME: HIR22>4000 U I ■ IJL^a !■ Ill II il PAGE 

U7 and ended up being a candidate for office in 1964. I uas 

48 defeated. 

U9 I went in the insurance business for a short time 

50 and uas elected to Congress m 1966. 

51 I stayed in Congress four terras representing the 

52 city district of Memphis, Tennessee. I uas defeated m 

53 1974. I opened my oun business, at that time called D.K. 

54 Consultants. Ua still have the same business. The name uas 

55 changed about four years ago to the Kuykendall Company. 

56 Neither ray wife nor my partner ever liked D.K. 

57 Consultants, so we changed it in about 1981, I believe. 

58 . I am not certain what that date uas. Ue have 

59 represented a cross section of primarily pr ivatelylouned 

60 businesses. I did represent one trade association at one 

6 1 time. Furniture Manufacturing Association because of my 

62 connection with the Broyhill family in Congress. But I did 

63 that only for about two years. I have had a pr ivately.itouned 

64 consulting firm involved primarily with pr ivatelyfouned 

65 businesses or closalyMhald corporations. 

66 S You mentioned that you had a partner. Who is your 

67 partner? 

68 A Elizabeth Powell who was my eKacutive assistant on 

69 tha Hill and has been with ma for actually 20-1/2 years. 

70 She is still my partner. 

7 1 2 Uhat committees did you serve on? 



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A I served on Interstate and Foreign Commerce and I 
was ranking on Aviation and Transportation when all of that 
uas over in Commerce Remember that uas split up about 
1974, but It all us4' to be over m Commerce, all 
transportation which I uas ranking on that subcommittee. 

2 Hou many eraployeas doas your company have? 

A Tuo besides myself. 

2 That is Elizabeth Powell and another? 

A Richard Marino. Ha has 3ust left us. We will be 
getting another legislative assistant before long. 

2 Does your company have a PAC? 

A Ho. I hava administered two different PACs 
through the years, but wa do not hava a PAC. 

2 Are those PACs connactad? Are you still the 
administrator of those PACs? 

A No. Neither of than exists. 

2 Did they exist in 1986? 

A Yes. 

2 What PACs ware those? 

A Tha Broyhill Furnitura Conpany's PAC and there was 
a PAC that was in existence for only a year called Venture 
PAC. which was an offshoot of the sane PAC. It was 
connactad with tha Broyhili Furnitura Company only. 

2 Mow, in addition to tha Kuykandall Company, are you 
an officer or director of any other companies that are 



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related to the work that you do? I think in particular Gulf 
and Caribbean Foundation. 

A I thought you were going on a different path here. 
I was nanager. I was never an officer of Gulf and Caribbean, 
but I did manage their affairs on the Washington level. 

2 Uho were the officers of the Gulf and Caribbean 
Foundation? 

A The President was Uillian Blakemore, front Mid- 
Atlantic. Texas; and General Counsel and Treasurer is David 
Witts fron Dallas. Texas. 

2 Are there any other menbers of the board of that or 
officers of the Gulf and Caribbean Foundation? 

A Ko . They were the active menbers of the board and 
the directors also. Elizabeth Powell was Assistant 
Treasurer, so she could also write the routine checks. 

2 When was the Gulf and Caribbean Foundation formed? 

A I will have to tell you within a month or so 
because it was founded clear back in 1983 in approximately 
June, X would say, of 1983. 

2 The purpose for the founding of the Gulf and 
Caxibbean Foundation was? 

A To begin somehow to get a flow of unbiased 
Iniornatlon ixoa Central America to both the media and to 
the Congress and the technique that was decided upon was the 
use of independent scholars and people of impeccable 



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NAME: HIR22MO00 III «tJL.n%#«#l I l^ar PAGE 

122 credentials that would be accepted by the media and by the 

123 Congiass as having information that didn't have a label on 

124 It from Central America and other areas. 

125 2 What gave you that impulse to set up this 
1 2 6 foundation? 

127 A One of my clients and several of ray friends clear 

128 back to college days, some of ray friends, have properties 

129 uithin the immediate proximity of the Rio Grande River and 

130 remember, this was the Salvador days. This did not have 

131 anything to do with Nicaragua at all at that time. JWk^^'^is 

132 flow of innigrants had begun to really start hitting that 

133 border and they had begun to get worried about it and 
13U wondered if a group of independent citizens could do 

135 something to have an intelligent approach to the situation 

136 m Central America. And we sought out ways to do this. 

137 The thing that seemed to be lacking most was a flow 

138 of non-ftainted information Every so-called expert was 

139 either pro-Reagan or anti-Reagan, Denocrat or Republican, 
1U0 anti-Chuzch or pro-Church, consazvative or liberal, 
mi Everything we looked at was slanted one way or the 
1'42 other and the whole idea was to get scholars that simply 
1U3 war* not pazt--that were of such prestige that you knew that 
lUU thay couldn't ba bought with a retainer or sonething like 
ms that. 
1U6 Q You set this up as a 501(c)C3) foundation? 



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A That IS correct. Absolutely. 

2 When did you get your 501(c)C3) tax exemption? 

A I think we got it somewhere along about September, 
October of 1983. 

Q And how was the Gulf and Caribbean Foundation 
funded at the outset? 

A By contributions from about, I would say, a maximum 
of about 30, 35 people. 

2 And what was the general order of magnitude of the 
contributions? 

A The entire amount of money spent during the entire 
life of Gulf and Caribbean Foundation was only S225,000. 

2 Is It still m existence? 

A It IS still in existence. It is not functioning 

now, but It IS still in existence. 

p 
2 How would you break down that *225,0a, say, in 

1984--1983, 19814, 1985, 1986? 

A 1983, 19814, my recollection is a large majority of 
the money was spent in 1983, 19814, at least 60 percent of it 
on some oiiicial projects that we administered all the way 
through. 1985, 1986, the expenditures were quite small. 

2 Was your association with this foundation youx 
first real interest and involvement in Central America? 

A Oh, yes. I never have been involved in a committee 
or anything on this subject here on the Hill. 



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This carae through your friends in Texas? 



A Absolutely. 

2 You were concerned about the refugee problem' 

A Uell. the whole impact of the--uell, one of the 
things that I remember specifically, Mr. Oliver, during some 
elections that took place in Mexico in either 1982 or early 
1983, there was a very prominent communist influence and you 
could go across the river at Matamoros or some place and 
find the communist signs on the telephone poles and it 
distressed a lot of people. 

That was one of the things that caused them to get 
worried and then the walking of those refugees thai w a^iA be 
"" 1 V VUI across the countryside . 

You could be out deer hunting on one of the ranches 
and see them walking across the countryside going north. So 
It worried a lot of good people down there. 

2 In an interview earlier with some of my colleagues, 
you indicated that you called Lyn Noiziger for his advice 
about what to do about this problem? 

A Uell, I called Lyn Nofzigei to ask him to find out 
from Judge Clark, who was then head of the NSC, if there was 
anything--this was the caquest I got from two or three people 
in Texas--is there anything a voluntary group can do to help. 

Remember now, that was a specific thing, the 
question I asked. I called Lyn. I said, ''Do you have a 



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PAGE 



way to get to Bill Clark and ask hira this simple question: 
'What can a volunteer group do to help?''* 

He said, ''I ara having dinner with him tonight. I 
uill come back to you.'' 

And Clark said, ' 'If you can figure out any uay to 
get information that is not tainted back from down there, it 
uill be the greatest service you can do to your country,'' 
and that was where that came from. 

2 Uhat did information that was not tainted have to 
do with the refugee flow problem? 

A Well, the people were going a whole lot deeper into 
the root cause. Remember, these refugees waaw beginning ^«> 
b« Salvadorans. They weren't just Mexican workers. They 
were beginning to be Salvadorans coming across down there 
and they wanted to know the root cause of it, the root cause 
of why this Xyou know, UiteLi! 'li* people coming across th^ 



the Rio Grande Rivei to work m Texas is not new to 
Texas . 

It is who the new people were and lUti l.lie^ ume and 
where thay wttre coming from. 

You will remember the early days of the Salvadoran 
crisis. This is when it was. There had been no elections 
down thai* yat. 

e So this is when Lyn Hofziger suggested if you could 
get some factual, unbiased information? 



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wmvm 



KAHE HIR22U000 lJlllJL.riW W ■■ ■■■■^ PAGE 10 

222 A No. That was Judge Clark's suggestion. Lyn 

223 Nofziger was only an intermediary. 

224 2 And that was uhat caused you to set up the Gulf and 

225 Caribbean Foundation' 

226 A That was the thing that caused us to have the 

227 challenge to set it up. The idea of using the scholar 

228 approach-- two iniormal meetings took place before that uas 

229 arrived at, is the only uay we knew of and could work with. 

230 Ue had a meeting at the University of Texas LBJ 

231 Library to discuss this. 

232 Dr. fi »n was our host to discuss how you could do 

233 something like this and still stay absolutely intellectually 
231 and scholas tically pure in that sense. 

235 Thl = — UA» xhe final decision to set this up was made 

236 at the LBJ Library in about Hay or June of 1983 and then the 

237 actual organizational meeting took place at Trinity 

238 University about six weeks later, something like that. 

239 fi So you began to involve scholars m this? 
2*40 A We recruited a group of scholars in the late summer 
2U1 and early fall of 1983. I renenber we had Dr. John Silber. 
2^2 "* ^'^ *i 1 a "' top of our list and Henry Kissinger beat us to 
2(43 hia. 

2i4>4 This is when the Kissinger Commission was created. 

2145 So we ended up with two other scholars from Boston 

2U6 University, Dr. Joachim Itaitra and Or. Peter Berger. 



UNCLASSIFIED 



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It IS very interesting that Speaker O'Keill used 
Dr. Maitre also as a briefing scholar for his people, as a 
result of the same trips. 

2 You sent Peter Berger? 

A Berger did not go to Central America. He did a 
study for us and it was published in the ■j-riHi'-*"*" Revieu. 
Maitre went to Central America at least five times in 1983, 
1984 clear into 1985. 

2 Old you send anyone else? 

A Dr. Elie Ueisel went with Maitre one tine. That is 
when he discovered the i^sC^^k. of the Miskito Indians. He 
was on a trip in a dug-'-out canoe when he discovered that, 



2 Did you go with then on this trip? 

A No. I have never been to Central America. 

2 When ha returned from these trips. Dr. Maitre to 
Central America, did he write reports, write articles? 

A The first trip Dr. Maitre, Dr. Max Singer went down 
and they, in conjunction with soma other people, wrote a 
book called ''The Democratic Revolution in Central 
Anarica.'* This was the first tina that our side, Mr. 
Oliver, uaza ever called the democratic revolution. 

I think all tha connittaas have copies of that book 
that was published in 1984. 

2 I an sura wa do . 



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PAGE 12 



'The Futuia of the Democratic Revolution in 



Central America. '" I think, is the 



name . I am not 



sure what the exact name is. but the use of the term 
''democratic revolution'' came out of the use of that book 
that was published and distributed. 

In fact, copies of it went all over the world. 

2 You also employed the services of Michael Ledeen? 

A Ha was the person who actually edited the book 
Itself. He never took a trip for us. Ha edited and got the 
book published. He is a very talented author and he was the 
one that debriefed our scholars and wrote the book. 

fi In what capacity did he dabriaf them? How did he 
come into this? 

A I don't know. I was not there. 

2 Well, was it your understanding he was a Central 
American expert? 

A No. It was our understanding that he was a very 
fine scholar. I had never met hin before he was actually-- 

S So it was Dr . Maitra or Dr . Singer or Elie Ueisel 
or someontt else who made this contact? 

A I don't remember. My recollection is maybe it was 
soaabody at Georgetown University that did it for us . X 
don't laaambar who made the initial contact with Michael 
Ledeen. 

2 You paid him to edit? 



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HAME: HIR2214000 



UNCUSSinED 



PAGE 13 



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A We paid him to actually write the book and then he 
also, because of some contacts, arranged for a publisher. 

2 Other than those people, did you involve any other 
scholars or any others m trips or study tours of any kind 
to Central America? 

A Well, ue continued to employ Dr. Kaitre. I say 
•'employ.'' In many cases, the only thing ue covered uere 
simply his expenses. In some cases, ue didn't even do that 
because he uas working with someone else and he would simply 
come back by and report^to us. 

He becaroe/1 in the production of op-ed pieces and 
also as an adviser to several congressional committees that 
he talked to--not testified. 4u^ he would simply go and visit 
with them on both sides of the aisle. 
/rrir. ' /.^t * '^^ »»*y close friend .a^clh Congressman Murtha, Plaitre 
he used nim as an adviser. 
Uhen we began to get into the Nicaraguan thing, 
which didn't take place really until late 1984, people began 
to come into the country from other parts of the world and 
our treatment of the scholar approach and the fact that when 
we took someone to Capitol Hill, number one, the neraber knew 
that I was going to introduce them and lease. They could 
talk to then as they saw fit and th« Hember knew there would 
be no publicity. So-- 

2 Why did you do that? 



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PAGE H4 



NAHE 

322 A So that tha Member of Congress uould have a chance 

323 to talk to a person from another country who uas--l had 

324 generally screened to see if they had an ax to grind ^hat I 

325 thought uould not be interesting to a Member of Congress and 

326 a Member of Congress likes to feel that he can talk to 

327 someone and not have a reporter sitting out the door with a 

328 microphone in his faca that says, ''Did he talk you into 

329 changing your position?'' You know hou important that is. 

330 2 Yes. 

331 . Did you decide which Congressmen to call upon or to 

332 have these peopla-- 

333 A Yes. Sometimes I would get requests. 

33U 2 Did the Gulf and Caribbean Foundation fund tha 

335 travel of the people who cane up from Central America? 

336 A Ue had many different variations of that. He did 

337 everything from pay part of a plane ticket for a person that 

338 uas described to me. In soma cases, all we uould do uould 

339 be to escort a parson who was already m the country. 

340 Ha did quite a bit of that. Simply sitting down 
3U1 and talking to the parson ahead of time and seeing if the 

342 picture that was attempting to be filled out over on the 

343 Hill hara, if thay added anything to it. 

3'4'« S These ware primarily rafugaas? I am talking about 

SUS Hicaragua now. 

3U6 A One way or the other, yes. 



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PAGE 15 



But they might be people living m exile in Costa 



Rica? 

A He had a Salvadoran guerrilla defector that proved 
to be an excellent asset to several flerabers of Congress in 
finding out relative costs of an insurgency. 

2 When you didn't pay all of their expenses, who paid 
the rest of them? Did you share them with other 
organizations or individuals? 

A No. There were nany, raany organizations around 
town that Knew these people were coming to town and there 
uas Kind of a clearinghouse group that met over at the 
American Security Council every Tuesday morning. I uas 
there about every other week. 

The American Security Council had kind of a think- 
tank group and this seemed to be kind of a clearinghouse of 
people that were in town that might be of interest. 

S Hh«n did you start to attend these meetings of this 
c JMiii pmijft JtoxxsmT 

A Oh, 1985, thereabouts. 

S Hho else sat in on this clearinghouse? 

A Twenty people. 

S Do you remember uho some of then uere? 

A Virtually none of them uere Hill activists. These 
uere think-tank people, various and sundry think-tanks 
around Yyiiii"' There would be members of congressional staff 



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uho would show up occasionally. But these uere mostly 
paoplo that uara involved in think-tank organizations. 
There uere very ieu activists in this iield. 

8 Do you reraeraber which think-tanks? 

A I really can't at this stage of the game. It's 
been a uhile. They floated around on different ones. I 
really don ' t . 

2 Is this the group you told my colleagues earlier 
you were sort of the chaiman of this informal group? 

A No , no . no . 

2 This is a different group? 

A The only thing I ever did with this group was give 
then a Hill briefing if they asked me for it as to what the 
status of the legislation was. 

2 The American Security Council? 

A Yes. The whole group, if they wanted to know what 
the status of legislation was. they would call on me. 

2 Well, let me see if I can refresh your memory a 
little bit about who night have been involved in this. The 
American Security Council is chaired by whom? 

A John Fisher . 

2 Did he host these meetings? 

A Mo. 

2 Uho hosted them? 

A Colonel Sam Deacons. 



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Colonel S'ara Deacons? 



A Mho is a full-time employee, a retired Array 
colonel. West Point-type. 

2 And were there people frora the Heritage Foundation 
there ? 

A Sometimes . 

2 From CSIC, Gaocgetown Center ior Strategic and 
International Studies? 

A Not regularly. Occasionally and that person would 
usually be a guest of somebody's. 

2 The American Enterprise Institute? 

A I never saw anybody there irom there. 

2 Brookings? 

A No. 

2 PRODEHCA? 

A Yes . 

2 Who would be there from PRODEHCA? 

A Oh, several diiietent people. I don't remember 
anyone that was particularly regular there. 

2 What about the National Strategy Information 
Center? 

A That doesn't ring a bell. 

e But it would be about 20 people and it would be a 
shifting cast of characters? 

A Yes. 



I 



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UNCLASSIHED 

This began in early 1985? 



PAGE 



18 



A No. I don't know when the group began. I do not 
know when the group began. I know uhen I began to attend it 
fairly regularly. 

Q Uere there people iiom the Citizens ior America 
there ' 

A Yes. 

2 Jack Abramoii? 

A Yes . 

Q Was he there on a regular basis? 

A They uere kind of latecoi»ers . Yes. He was there 
fairly regularly. 

2 Peter Flaherty? 

A Sone times . 

2 He was with the Citizens for Aaerica? 

A No. Peter Flaherty was Citizens for Reagan. 

2 Citizens for Reagan. 
Penn Kenble? 

A He is PRODEHCA. He was seldom there. 

2 Danise O'Leary? 

A The PRODEMCA group were not regular. I have 
probably seen all these people there at one time or anotj.^r. 

I couldn't tell you with any certainty when they uere 
there. They uere not regular. 

2 Jim Denton? 



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DNtUSSIFIED 

Earliex. yes . 



PAGE 19 



2 He was uith what organization? 

A I can't think. If you mentioned a name, I might 
remember it, but I can't remember. 

2 Glenn Bouchez . 

A Yes. 

2 And what group did he represent? 

A I never did know the name of his group. 

2 This group would meet on Tuesday morning and 
discuss uhat uas going on in Nicaragua? 

A Oh, no. All over the world. We had people there 
from all over the world from Afghanistan to Mozambique. 
This was a broad-guaged group. they were literally people 
from every hot spot in the world. 

2 Sort of freedom fighter-type people you are talking 
about ? 

A This was a late thing, the presence of the actual 
freedom fighter people. This was more of a strategic group 
to discuss an ovei{all situation. We have had ambassadors 
from the countries to here and back and forth to come to 
that meeting. This was a strategic group, very, very little 
knowledge of or relationship to Capitol Hill. 

2 Did Oliver North ever attend any of those meetings? 

A I was never there when he attended one of them. 

2 To your knowledge, did he ever attend any of them? 



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PAGE 20 



A Not to ray knowledge. To my knowledge, no. But I 
in no way want to say he didn't. 

2 I can only ask you about your knowledge . 

A But to ray knowledge, no. 

2 Did anyone from the White House attend any of those 
raeetings to your knowledge? 

A I recall that the Office of Public Liaison had 
people there frora time to time. I don't even remember who 
it was, but I think that office from tirae to time had people 
there . 

2 Do you remember whether or not Linda Chavez ever 
attended 7 

A Not when X was there. 

2 Bob Riley? 

A I think so. 

2 Nanes CoDalis? -' 

A No, not when I was thaxe. I never met him but once 
and X didn't aaet hin there. 

2 Anyone from the State Depaitaant? 

A As a guest a couple of tiit«s> we had State 
Department people. 

2 Do you remember who they were? 

A No. X never did know. 

2 Otto Reich? 

A Yes. Otto Reich had been there. 



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PAGE 21 



2 Jonathan .Miller ? 



A Not that I know. I have never met Jonathan Miller 
He could have been there. I wouldn't have known hira. 

e Ifou have never met Jonathan Miller? 

A No. Not that I knew who I was meeting. 

2 Did Elliot Abrams ever attend any oi those 
meetings ? 

A Not in ny presence. 

2 Were you ever told that he attended any oi those 
meetings? 

A Yes. 

2 Who told you that he attended? 

A Just a meeting that I missed and I think he was 
there. I was told that he had been a guest at the meeting 
when I was not there. 

2 Do you remember who told you? 

A No. 

2 Here you ever told Oliver North had attended a 
meeting ? 

A Ko. 

2 This gtoup you said began to mat in lata 1984. 
•atly 1985? 

A I don't know. I only know when I began to meet 
with tham. 

2 Has in? 



UNciAssra 



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HIR224000 



ICIASSIHED 

Late~g8i4. early 1985, 



PAGE ?. 2 



2 And you said you sort of gave them advice on 
legis lative--uhat was going on on the Hill? 

A Status. 

2 You told them what you thought about what the 
situation was ? 

A Right. 

2 Did they ever act on any of your status reports, to 
your knowledge? 

A I ara sure they did. 

2 I don't want to ranga too far afield, but 
originally you indicated soma of the people who mat with 
various Congressmen came to your attention through your 
meetings with this group. 

A Yes. 

2 That you would find out these peopla were in town. 

A Right. 

2 And these paopla would ba refugees or exiles or 
even in soma cases, I assume, people who were still in 
Nicaragua, but ware out of tha country at that tima? 

A In soma cases, yes. 

2 And youz organization, tha Gulf and Caribbean 
Foundation, had paid soma of tha expanses for soma of tha 
people who came to town and mat with various Congressmen. 

A Occasionally. This was a very, vary small thing. 



UNCLASSIFIED 



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SU9 
550 

55 1 
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555 
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56 1 
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563 
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569 
570 

57 1 



UNCIASSIRED 



HIR2214000 IllWIal U.l.lll II II PAGE 23 

2 Did any ,of the other organizations or individuals 
who were at the American Security Council share the expenses 
with the Gulf and Caribbean Foundation for the travels of 
any of these individuals? 

A Not on a known basis. 

2 You mean not to your knowledge? 

A Not to my knowledge. 

2 Did you discuss at those meetings when someone was 
m town--let's take, for exanple, Unta El Salvador^def ector . 
When this gentleman was in town, did someone there at the 
meeting say this man will be in town and he has a real story 
to tell and those of you who may wish--how did it work? 

A That particular person did not come to me through 
that meeting. That particular person did not come to me 
through that meeting. 

2 How did he coma to you? 

A Frank Gomez of IBC knew of the man. Frank Gomez is 
bilingual, of course, and could discuss it with him and the 
IBC was our PK firm up until mid- 1985 and because of his 
relationship with these people and with the State Department 
in the past and so forth and being bilingual, Gomez was ray 
primary person that we dealt with with^IBC, «mls — Fnnlr Oumu^ 
during virtually the entire period after the formation of 
the organization and when Frank Gomez left the State 
Department and cane with IBC, we dealt almost entirely with 



UNCUSSIHED 



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HIR22M000 



hira . 



ONUSIFIED 



PAGE 24 



2 How did you come to know Frank Goraez? 

A I didn't. Ue had retained IBC in the very 
beginning of the creation of Gulf and Caribbean to do our PR 
work. Ue couldn't afford Lyn Nofziger. 

2 In late 1983? 

A Ko . Early autumn 1983, thereabouts, ue retained 
them. They did our PR work almost entirely as far as 
straight PR uas concerned, never lobbying, never the Hill. 
They didn't go near the Hill. »n lii^ ■* J <^e!J. 

2 Hou did IBC come to your attention? 

A Through Lyn Nofziger. 

2 Did you ask him at the time you asked him to ask 
Judge Clark about what a private group could do, is that 
uhen he suggested to you IBC? 

A Later than that. I had thought to retain Lyn at 
first and uhen he got through going over his rates uith me, 
ue couldn't even come close to affording him, so I said 
''Who is young, going into the business, and is 
knowledgeable?'' and he lecomnended Richard Killer, who had 
]ust created IBC. 

2 Do you remember uhen that uas 

A This would have been in late summer of 1983. 

2 Was Rich Miller uorking out of Lyn Nofziger's 
offices at that time? 



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HIR22M00O 



UNCLASSIFIED 



PAGE 25 



A Would ypu explain the question a little iurther? 

2 I asked whether Rich riiller was working out cf Lyn 
Nofziger's offices at that time when you retained him? 

A He was in the same building, but had his own 
offices . 

2 He wasn't in the suite of offices? 

A Oh, no, sir. " ' i rf 1 r ' That is why I asked you to 
restate the question. It was definitely not in the same 
offices . 

C How many employees did IBC have at that time? 

A Very snail. I don't remember. 

2 They were just starting out? 

A Yes . 

2 So you hired IBC to do what? 

A To do normal PR work, to arrange for things like 
trips to Salvador, to arrange press conferences, to do the 
type things that PR firms do. 

2 So you paid then how nuch to do that? 

Jl It is a natter of record. We had then on a 
retainer for about a year at »2,500 a month to do all of our 
PR work. During that tine, I did not nanage any of that. 
During that tine, ny' VariM fron Gulf and Caribbean was zero. 

2 But you ware the one that arranged meetings on 
Capitol Hill? 

A Yes. PR did not include Capitol Hill. That was ray 



iifimsim 



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HIR224000 



turf totally. 



fifimsim 



PAGE 26 



2 I understand. But uhat did they do? 

A Op-ed pieces, a great many of them, particularly 
during 1984. This was a very large number of op-ed pieces. 
They continued op-ed pieces, Maitre continued clear on into 
1986. The meetings with editorial boards, the trips around. 
speaking tours for the visitors of one kind or another 

2 This uas primarily Rich Miller? 

A No . 

2 In 1983 and 1984? 

A I don't know whan Frank cam* back, but you see, 
when I began to have any relationship whatsoever with 
Spanash-speaking people, it becana necessary that I have an 
inteipreter. Frank Gomez uas tha logical person. He is a 
simultaneous interpreter. So almost my total relationship 
with IBC for about a year uas Frank Gomez. 

2 Do you know uhen Frank Gomez :oined IBC? 

A No, I do not. It has to have been m maybe late 
1984 or early 1985. It has to have been late 1984. 

2 But you retained IBC in late 1983. 

A That is right. 

2 So it uas about a year later? 

A I an not certain. 

2 Frank Gomez uas introducad to you by Rich Hiller? 

A Oh, certainly. 



BNMsm 



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6M8 
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tfNcuxjm 



HIR224000 WUL/1lJlllf~iril ^'^^^ ^'^ 

2 So it was whenever Rich Miller and Frank Gomez got 
together is when you uere introduced to Gomez, when Gomez 
became part of IBC? 

A Yes. 

2 Were you aware that IBC was about to obtain a State 
Department consulting contract? 

A No, I was not. 

2 Did you ever know that they obtained a State 
Department contract? 

A Yes. 

2 When did you learn that? 

A I don't remember. Shortly after they obtained it, 
whenever it was. 

2 That would have been late 1984? 

A I don't know. 

2 Did you ever discuss their State Department 
relationship with Miller or Gomez? 

A Ho. 

2 Did you know that the State Department contract 
that they had called for then to do many of the same things 
that they were doing for you? 

A Ho. I did not know that. 

2 So you were not aware of what they were doing for 
the State Department? 

A Ho. 



UNCUISSIFIED 



267 



NAME; HIR22'4000 



UNCLASSIRED 



PAGE 



28 



672 

673 

6714 

675 

676 

677 

678 

679 

680 

681 

682 

683 

68U 

685 

686 

687 

688 

689 

690 

69 1 

692 

693 

694 

695 

696 



When did you first meet Oliver North? 

In approxiraately--it must have been Hay or June of 



1985 



2 Do you knoH what was the occasion? 

A Oh , yes . 

2 What was the occasion? 

A Dr. naitre, on a trip to Salvador, had come back 4a~ 
and visited uith m-^afi^ pointed out that at that time there 
was a freak part of the law of selling materials to another 
country that caused the American Defense Department to have 
to grossly overcharge the Salvadorans for things like 
helicopters . 

And he said, "'I have been led to understand that 
there is some freak clause in tha law that makes it 
necessary that our Pentagon charge these people those 
exorbitant prices, '' and he happened to have the price on a 
world market of a Huey helicopter and it was about 2-1/2 
times what they were charging them. 

he came to sea me and told ma about it *frt it 



sounded aJ 



^^.-.4. 



It sounds bad , 



•m%^^M- President of Gulf and Caribbean happened to be in 
town at that time. He and I uant to see Congressman Duncan 
Huntax. Duncan Hunter said, "'This is too ridiculous to be 



true . 



I can't believe it. 



]a^ picked up tha phona at his desk and called Bill 



"Ncussm 



268 



NAME : 

697 
698 
699 
700 
701 
702 
703 
70U 
705 
706 
707 
708 
709 
7 10 
7 1 1 
7 12 
7 1 3 
7 1U 
715 
7 16 
7 17 
718 
7 19 
720 
721 



HIR22M000 



Casey and sa 



unmssHQ 



PAGE 29 



? • • 



2 Duncan Hunter picked up the phone and got Bill 
Casey on the phone :ust like that? 

A Just like that and said, ' ' Is this true?'' He 
said, ''I don't know. I have heard a ruraor that it was. 
There is a fellow over at the American National Security 
Council named Ollie North. You should call him and he will 
know . ' ' 

And I immediately turned to Duncan Hunter and said, 
'•Who is this guy?'' And he said, ''Well, he is a real 
comer over at the National Security Council. So a couple 
hours later, the President of Gulf and Caribbean, Blakemore 
and I, went to see Ollia North and he immediately confirmed 
mil illijiiii I li I letter of the law and said, i ip i u« t , if you 
wanted to have a little further information on the effect of 
this on the situation in Salvador, General Gorman is going 
to be in town, I think, the next day or whenever. 

So wa visited with General Gorman. He confirmed 
It. I don't remember the exact time span, but I know that 
Congressman Stratton and Congresswonan Holt introduced an 
amendment and got it fixed vary shortly after that. 

So that IS the episode. That is what ixmt happened 
is ona thing^wa are vary proud of at Gulf and 
Cazibbaan'that wa ware able to bring this thing to a 
conclusion almost immediately. It was very important. 



A-r 



^nmsim 



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NAME ■■ 
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111 
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74 1 
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HIR224000 



UNCUSSIHED 



PAGE 30 



So that was in the summer of 1984? 



A That was in the summer of 1984. 

HR. COSTON: Uait a second; 1985, I thought. 
THE WITNESS; 1985. I am sorry. I an sorry. 
Thank you. Counsel. 1985. 
MR. OLIVER: Uell, I had the notes-- 
MR. COSTON: His testimony earlier uas tlay or June 
of 1985. 

THE WITNESS: It IS 1985. 

MR. OLIVER: I had in a raeraorandun done by someone 
uho had interviewed you earlier the spring of 1984. 

THE WITNESS: No. It was 1985. It is 1985. 
BY rtR. OLIVER: 
2 Let ma--you think it uas in the summer or the spring 
of 1985? 

A I an — 

2 That uas the first time you met Oliver North? 
A Yes. Wait a minute. Just a minute. Just a 
minute. It uas 1984. It uas 1984. 
2 And after you-- 

A Because it uas still Salvador. It uas still 
Salvador. It wasn't Nicaragua. It was still Salvador. It 
had to b« 1984. It uas El Salvador. 

2 After your meeting with North and the passage of 
this legislation, did you work uith North during this period 



WNcussm 



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7U7 
7M8 
71*9 
750 
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HIR22'4000 



ONCUssm 



PAGE 31 



of passage of thi-s legislation: 



A Oh, no. 

2 You sau hira one time? 

A Actually, somebody m the Executive Branch notified 
the Armed Services Committee. We had nothing to do with 
lobbying that passage. They took it and handled it 
immediately. Me didn't have to inform thera . It uas done 

C No. I uas asking you what North's involvement uas. 

A I don't know. 

2 So after this meeting that you had with North in 
the spring or summer of 1984, when uas th« ne^ time that you 
had any contact with him? Do you remember or can you 
approximate ? 

A I think there was probably one instance maybe in 
late 1984 that I may have had lunch with him--11r . Blakeraore 
and I had lunch with him, I believe, sometime in that 
period . 

2 Uhat was the purpose of that lunch? 

A Just friendship. 

2 It wasn't any discussion of Nicaragua? 

A Ho, not at that time. 

2 When did you see him again, to your knowledge, 
after that luncheon in late 1984? 

A I don't recall. I really don't. The whole issue 
began to heat put on the possibility of getting the 



CNCUXSIflEO 



271 



UNCUSSIFIED 



MAKE: HIR2214000 U I 1 Ul-fllJlJ 1 1 II II ^^^^ 32 



772 
773 

77U 
775 
776 
777 



humanitarian aid in late 1984. You remerabei that. 

2 Yes. 

A And the possibility of achieving this began to heat 
up in late 19814. began to become a real possibility m early 
1985 and then that lasted clear on through the spring and 
early summer, is uhan it finally passed^ thA mi!a»4ire . 



UNCIASSIHED 



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MAHE ■■ 
7781 
779 
780 
781 
782 
783 
784 
785 
786 
787 
788 
789 
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79 1 
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795 
796 
797 
798 
799 
800 

80 1 
802 



HIR22U000 



RPTS MCGINN 



UNCLASSIFIED 



PAGE 33 



DCHN PARKER 

2 You became involved in early 1985 in the efforts to 
achieve that goal of humanitarian aid? 

A That is correct. That is correct. 

2 Were you paid to do that? 

A No, I was not. 

2 It was 3ust a voluntary thing? 

A Yes. It was totally voluntary on my part. I 
happened to have good enough clients. I could afford to 
volunteer and my efforts on this effort clear through that 
whole episode in 1985 was voluntary. I was registered to 
lobby for my own company. I was registered to lobby for the 
Kuykendall Company or D.jtJ. Consultants. 

2 Here you involved in the Nicaraguan Refugee Fund 
dinner which took place in April of 1985? 

A No . 

2 Here you asked to be involved in it? 

A Yes . 

2 Who asked you to become involved? 

A Edie Fraser . 

2 Did you turn her down? 

A Ho. I faded away. 

2 In other words, you went to some of the meetings-- 

A I did not go to any of the meetings. 



HNCussro 



273 



UNCLASSIFIED 



NAriE^ HIR22t4000 IflltfbfflWH Ik^ PAGE 34 

803 2 Why did you fade auay? 

SOU A I wasn't interested. 

805 2 Uhy were you not interested? You were interested 

806 in the subject. You had been involved in it. 

807 A This was not our thing. Fundf raising and this type 

808 of thing we were simply not involved in. Ue never were 

809 involved m fundf raising . We did not get involved m fund/ 
8 10 r ais ing . 

811 2 So you were asked by Edie Traser and you :ust sort 

812 of stopped returning phone calls or told her you were not 

813 interested or didn't do it? 
Sm A I just didn't do it. 

815 2 Did any of the people that ware involved with you 

816 such as Rich Miller, who is retained as your (R • P •; firm, were 

817 they involved in the Micaraguan dinner? 

818 A I do not know that they were. 

819 2 lijinm uaia, you don't know? 

820 A If they were, I don't know it. 
82 1 2 So you were conplataly separate from that in terms 

822 of your activities? 

823 A Absolutely. 

824 2 And your activities related to humanitarian aid? 

825 A That legislation at that tine was the total 

826 lobbying goal of the lobbying part of my business. 

827 2 Do you remember how you got involved m the 



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UNCLASSIHED 



HIR2214000 IIIVIbI U.^.'^ I T I I~ 1 1 PAGE 35 
lobbying business in 1985 on behalf of humanitarian aid? 

A Yes. A group of the people that met at the 
American Security Council asked me to take kind of the -' 
informal chairmanship of the group "f jaf r 1 f that those 
names, most of the ones you read to me < ^rn^ it uas a loose 
coalition. My history of Capitol Hill uork, going clear 
back to 1980 and even before, uas involved very much m 
creating coalition, coalition founding. This has always 
been ray thing, working with coalitions and coordinating 
coalitions . 

'^C^Jthere is such a limited number of active 
lobbying organizations even involved m this issue on Llia L 
side that tS&f met at least three times a month to compare 
notes . 

2 And this is what you told ray colleagues earlier in 
k an interview, that you sort of became chairraan of this 
mforraal coalition? 

A Right. They asked me in the beginning to be the 
informal chairman of it. 

2 Who asked you? 

A Th« group did. They had obviously had phone calls 
or something because they decided to ask me . 

2 And when did they ask you? 

A I would say this was in early 1985. 

2 In January? 



UNCLASSIHED 



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MAHE 
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85M 
855 
856 
857 
858 
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86 1 
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86U 
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867 
868 
869 
870 

87 1 
872 
873 
874 
875 
876 
877 



HIR2214000 



UNCLASSIHED 



PAGE 36 



A I don't know. Ther^ abouts . 

2 Shortly after they asked you, did you all have a 
meeting with Oliver North? 

A He attended one of our meetings, yes. 

2 Where did that meeting take place? 

A In ray own town house . 

2 Was that a luncheon? 

A I doubt it. I don't recall the group ever having 
lunch in ray town house as far as a working session. 

2 How raany people were at the meeting at your town 
house ? 

A There were usually around six or seven. This was 
about the usual group. 

2 Do you reraeraber who was there at that first meeting 
with Oliver North? 

A Oh, no, I wouldn't renenber, but I think you can 
assune the whole group would have been there. 

2 Uas Sam Dickens there? 

A He was a raerabar of the group. 

2 Jin D«nton? 



A Yes . 

2 Us^ 

A Yes . 



"IS/k^H^ 



2 Frank Gonez? 

A Probably. I don't know. 



uNCUSsra 



276 



HiRaauooo 



UNCUSSIHED 



PAGE 37 



Rich Miller? 



A Mo. 

2 Why would Frank Gomez be there and Rich fliller not 
be there? 

A It is just that during this period ue did most of 
our work with Frank Gomez. 

2 What did you discuss at that meeting? 

A Usually the status of the individual vote count. 
This was always a subject of all discussions as to who is on 
the undecided list, where are they, what is the status of 
the people on the undecided list and so forth. 

2 According to Colonel North's calendar that was a 
luncheon which took place at your town house on February the 
11, 1985. Would that be correct? Does that refresh your 
memory ? 

A That would not have been the same group. I just 
don't remember this group ever having lunch at ray place. 

2 What time of day did the meetings take place? 

A Usually in the early morning or late afternoon. 

2 Do you remember what month or what date that first 
meeting took place with Oliver North? 

A This meeting with Oliver North was not related to 
this particular effort at all. This is a luncheon group 
that I am a member of that we rotate hosting of guest 
speakers and he was the speaker at the group at the 



UNCLASSIHED 



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NAHE ■ 

903 
904 
905 
906 
907 
908 
909 
9 10 
9 1 1 
9 12 
9 13 
9 lU 
9 15 
9 16 
9 17 
9 18 
9 19 
920 
92 1 
922 
923 
92U 
925 
926 
927 



HIR22M000 



UNcussra 



PAGE 38 



At ray town house. KaiFr'^n' have board rooms and 
r f II f f iaii n fhilt "i 1 1 over town, but this us 



particular monthly meeting. 

2 At your town house? 

A 

^-^i:* t all over town, but this was a private 
luncheon group that we invite guest speakers in and Oliver 
North was the guest speaker at this particular group. 

2 On February 1 1 ? 

A li that IS what his calendar says--that is what my 
calendar would say, I an sura. Has nothing whatsoever to do 
with a lobby group because this group is not a lobby group. 

2 Now the meeting that you had with Oliver North, to 
your recollection it would have been early in the morning or 
late aiternoon at your town house sometime in early 1985. 
Generally, the people who I mentioned a feu moments ago 
would probably have been there or were there to the best of 
your recollection. 

A Yes. 

2 At that point you discussed vote counts and what 
the situation was? 

A Any tim* Ollie North cane to a meeting it was for 
tha purpos* of his giving us a situation briefing. 

2 On? 

A On his famous slide show if nothing else. Ollie 
North was never part of a lobbying effort because he simply 
was not part of our lobbying strategy. I neverAdiscussed 



UNCIASSIHED 



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HAME : 
928 
929 
930 
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943 
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945 
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949 
950 
951 
952 



HIR224000 



UNCUSSIFIED 



PAGE 39 



vote counts with OlTie Morth. He never suggested strategy 
uith rae on actual lobbying on the hill. But he gave 
briefings. I have never called Ollie North to attend a 
meeting for any purpose other than a briefing. 

2 How many times did you see his slide shou? 

A Several . 

S Well, according to what ^our staff has put together 
from Ollie North's calendar, you met with hira some 28 times 
at least on his calendar and most of those meetings took 
place in your town house . 

A No, sir. Absolutely not. 

Q Do you remember how many times Oliver North 
attended meetings at your town house? 

A He never attended meetings in my town house more 
than over a period, now, of three years we are talking 
about, two and a half years. 

2 Me are talking about 1985 and 1986. 

A Okay. That period? I don't think there is any way 
he was in my town house to meetings more than four or five 
times . 

fi You remember him being there at a lunch on February 
the 11th? 

A That date I do not remember. He was guest to give 
his briefing at a luncheon at ay toHn"house with a group of 
my friends that were not connected with this effort at all. 



UNcussm 



279 



NAME 

953 

95<4 

955 

956 

957 

958 

959 

960 

96 1 

962 

963 

96(« 

965 

966 

967 

968 

969 

970 

971 

972 

973 

974 

975 

976 

977 



HIR22H000 




PAGE UO 




2 Let me ask you about a meeting which is indicated 

on his c alendar on March the 1st at U o'c lock Your town 

house 1 si 

A Yes. Probably one of those meetings. 

C You we re there ' 

A I don't have ray calendar. I can't say. If he was 

there, I was there. 

2 And Mr. Jack Abraraoff would have been there' 

A A group would have been there. There is no way I 
can tell you now eKactly which of the group might have been 

absent that meeting. 

2 Let rae ask you about the people we thmk-- 

A The circle. This group was never-- 

2 There was a man named Blair there, part of the 
group ? 

A The name is not familiar. 

2 And San Dickens was part of the group. 

A Yes . 

2 And Jilt Denton was part of the group. 

A Yes . 

2 And r/nn iwMThSrVas part of the group. 

A Yes . 

2 And Walt Raynond was pact of the group? 

A No, sir. 

2 Did he ever attend meetings? 



\ 



BNWsm 



280 




HXnZ- HIR22U000 Ulllll M.VMriMP'' ^ 

978 A Not ct my toun house he didn'T"."" My recollection is 

979 Halt Raynond--! can't recall Walt Raymond ever coming to my 

980 town house. I have met with Halt Raymond, but I don't 

981 recall ever doing it in my town house. 

982 2 What about Otto Reich' 

983 A I can't recall. I cannot reneraber whether I met 

984 Otto Reich in ray town house. 

985 2 Jonathan Hiller . 

986 A No, sir. 

987 2 You never net Jonathan Hiller? 

988 A I told you that before. 

989 2 How nany times did this group--how often did this 

990 group that net early in the norning and late afternoon get 
99 1 together ? 

992 A And/or. 

993 2 And/or late in the afternoon. Has it a weekly, bi- 

994 weekly, semi-fweekly ? 

995 A Hell, let's see. He are talking about a three- 

996 month period just about. 

997 2 In 1985? 

998 A 1985. I would say we net at one place or 

999 anoth«r--all neetings are not in the town house. 
1000 fi Hhare else did the meetings tak* place? 

100 1 A I remember we met over Jim Denton's place one time 

1002 He had several different placas . Each of them had their 



VNCUSsm 



281 



KAME 
1003 
lOOU 
lOOS 
1006 
1007 
1008 
1009 
10 10 
10 11 
10 12 
10 13 
10 14 
10 15 
10 16 
10 17 
10 18 
10 19 
1020 
102 1 
1022 
1023 
102U 
1025 
1026 
1027 



HIR224000 



UNCLASSIFIED 



PAGE U2 



own meeting at one time and when ue say meetings in my town 
house. I ara really talking about the meetings period. I 
can't remember which of them was in the town house 

The group met probably a dozen times during that 
period. :ust about once a week. 

2 And you talked about legislative strategy? 

A Ves. 

2 And your goal was to acquir«--to get congressional 
approval for humanitarian aid? 

A Yes, 27 million. 

2 for the contr as . 

A Right. 

2 You were successful in that endeavor ultimately. 

A That is light. 

2 When did the vote take place? 

A Remember we had two votes. The first vote was lost 
by two votes . 

2 In 1985. 

A 1985. That was tha vote that Ortega went to Moscow 
the next day. 

2 R«n«nbar that. 

A £v«rybody remembers that. Then about six or eight 
w*«ks later ue had the second vote that was fairly heavy pro 
111 rail'lion. 

2 That would have been in-- 



UNCLASSIRED 



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NAME 

1028 
1029 
1030 
103 1 
1032 
1033 
1034 
103S 
1036 
1037 
1038 
1039 
1 OUO 

10141 
10U2 
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1044 
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1046 
1047 
1048 
1049 
1050 
105 1 
1052 



HIR224000 



UNCLASSIFIED 

In about June 1, thereabouts. 



PAGE 43 



2 Early June, 1985. 

2 Could you sort of recollect or reconstruct uhat 
would happen at these meetings? How long did they last and 
did you have a check list of votes? 

A Uell, the undecided lists were all over town 



T^o— 



always. Everybody had their own undecided list»that was 
the business at all/' fand ' the soft center, it is always the 
same on any legislative issue, is where the targeting of any 
legislative activism takes place, and we would discuss the 
status of the individual people as thay would come off of 
the undecided list, whether they went off of it against us 
or whether thay went off of it for us. 

So tha flux of the undecided list was always the 
first thing to be discussed> »a=:tD 64f4\ere are the people, 
where are the votes, how do we put together the 219 votes. 
inH <j >^ 3^-fMa^^hai- was pretty wall-viewed on a week-to-week 
basis, who has moved, each of these people had their own 
grass roots organization. Renamber we did not have a grass 
roots organization. Ua had no organization. I was strictly 
the coordinator. 

2 Now which people are grass roots organizations? 
Who ware the people? 

A I think all those people did except San Dickens. I 
think all tha paopla that mat with us one way or another had 



UNClASSra 



283 



UNCLASSIHED 



MAKE HIR22'4000 LI 11 U&_I l^JtJ 1 1 IkV PAGE UU 

1053 a membership organization around the country that uas fairly 

lOSU large, 
loss 2 You indicated m your earlier interviews of some of 

1056 our colleagues that some of the people who had participated 

1057 in that and in addition to L i nn »» u »>< tc , Sam Dickens-- 

1058 A Sam Dickens had no organization. 

1059 2 Jack Abramoff. 

1060 A Had the Citizens for America, fairly large and very 

1061 attractive organization. 

1062 2 And Peter Fla^herty. 

1063 A Had Citizens for Reagan, fairly large, highly 
10614 active organization. 

1065 2 And PRODEHCA? 

1066 A PRODEHCA. yes. 

1067 2 Who attended these meetings from PRODEMCA? 

1068 A Penn Kemble or Denisj^ . Leary . In those early days 

1069 It uas usually Penn Kembla . 

1070 2 In these meetings when you discussed legislative 

1071 strategy, did you give assignments to people or did people 

1072 volunteer? 

1073 A Ho. People would say I will handle--remember now, 
10714 these organizations are not Capitol Hill arm twisters. They 

1075 are basically grass roots organizations. Several of these 

1076 people had their own radio programs, their own newspaper 

1077 ads, their own--I guess some oi them, I think--I don't know 



UNCIASSIRED 



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NAI1E : 

1078 
1079 
1080 

108 1 
1082 
1083 
108U 
1085 
1086 
1087 
1088 
1089 
1090 

109 1 
1092 
1093 
1094 
1095 
1096 
1097 
1098 
1099 
1 100 

110 1 
1 102 



HIR224000 



ik^L 



UNCLASSIFIED 



PAGE US 



whether -«ft was any. TV run in 1985 or not. I can't remember. 
This was very early. So the targeting of their publicity, 
oi their intensive grass-roots activity would be based on 
where the need was, certainly. 

They did their own thing. I never got involved at 
all in the inner activity of any of the organizations . I 
wouldn't have presumed to give them advice on how to run 
their show. 

2 But was there sort of a coordinating plan that 
was--that the group was involved in related to that vote? 

A Uell, the plan, of course. The list was the same 
for everybody in town. Remember, the other side had the 
same list. Everyone has the same list because you have to 
assume that there is equal intelligence on all sides of 
every issue. So everybody in town had the same list and so 
they were targeting both the pro and con. 

Contra aid people were targeting these same 
individual areas, beca\tse there wasn't any coordination to 

The only coordination was a&. to 4«i^% waste money on 



It. The only coordination was a&. to 

people that are decided. That is about the only 

coordination there is to it. 

fi Did you discuss this legislative strategy with 
Oliver North? 

A No, not that I renenber. I don't have any 
recollection of discussing that. 



UNCLASSIHED 



285 



UNCIASSIHED 



KAHE: HIR22U000 LIIIIJLnVwII IkV PAGE U6 

1103 MR. COSTON- Fine . 

1104 I Recess . 1 

1105 MR. OLIVER: Mr. KuyKendall, I would like to shou 

1106 you a docunent and have it entered as an exhibit and natked 

1107 as Exhibit Nunber 1. 

1108 [The docunent refected to. was marked as Exhibit 1 

1109 for identification. 1 

1110 BY MR . OLIVER: 

1111 2 I would like to shou you that document and ask you 

1112 li you have ever seen that document or a similar document 

1113 before? 

111U A Yes. I have seen this document. 

1115 2 Where did you see that document? 

1116 A I was laid on ny desk by a reporter when it should 

1117 not have been. 

1118 2 And when? 

1119 A About siK weeks ago. 

1120 2 Uell. that was the first time you had ever seen 
112 1 that docuaent? 

1122 A Yes . 

1123 2 I would like to ask you to look at that document 
112U and you will see your name in there. The highlighting was 

1125 done by our staff in preparation for this deposition. 

1126 A Yes . 

1127 2 It appears from that document that you were 



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NAME : 
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1 1 29 
1 130 
113 1 
1 132 
1 133 
1 134 
1 1 35 
1 1 36 
1 137 
1 1 38 
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1 140 
1141 
1 142 

1 m3 

1 lUM 

1 145 

1 146 

1 1U7 

1 ma 

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1 150 
1151 
1 152 




PAGE 47 
pie an the legislative effort 



HIR224000 
involved with' 
in 1985. 

A Right. Now, well, counsel, would you define 
legislative effort? 

2 Well, It was the effort to try to obtain 
congressional approval for aid for the contras in 1985. 

A So you put the broad definition. 

S Yes. I assume it is a broad definition. 

A So you have given a broad definition. 

2 Well I am ^ust stating it was a legislative effort. 

A Okay. The first group, the FDH coremanders , uere up 
here to testify before the House Intelligence Coranittee. The 
people that were testifying, only Bernudaz could speak 
English at all. Tigrillo, Lina and there was another one, 
could speak no English. They were terribly nervous, very 
concerned. X was asked by Frank Gonez to cone and meet uith 
them on a Sunday evening before they were going to testify 
the next day to give them assurances that these members of 
Congress ware nice people and that all they had to do was 
answer the questions and so forth. 

So Frank Gomez and I stroked these people, these 
three men, and there may have been another one. I am not 
sure. These were field commanders--in a briefing session and 
the next day I escorted them up to the outside office of the 
House Intelligence Committee in the Capitol. After that 



UNCLASSIFIED 



287 



NAME : 

1 153 
1 15U 
1 ISS 
1 156 
1 157 
1 158 
1 159 
1160 

116 1 
1 162 
1 163 
1 16<4 
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1 166 
1 167 
1 168 
1 169 
1 170 

117 1 
1 172 
1 173 
1 174 
1 175 
1 176 
1 177 



UNCLASSIFIED 



HIR22>4000 llllll.l U.A.Iiril II PAGE US 
theie was a piess conferance uhera these people ueie present 
and a fairly large press conference dountoun. I believe it 
uas at the press club. I are not certain where it was. This 
was work we did. press relations. PR. using Frank Gomez. 

2 Vou said that Frank Gomez did this P.R. for you. 

A For Gulf and Caribbean. 

2 For Gulf and Caribbean. 

A Yes . 

2 So why did ha call you about these people? 
Wouldn't it have been you calling him if he was working for 
you? 

A No. He was doing--I do not know who had told hin 
that they uaza appaazing bafora the House Intalliganca 
Conmittaa. but some parson, soma acquaintance of is told him 
these people wara hara and they ware terribly nervous, 
terribly concerned about appearing before this committee. 

How. incidentally. I am a former member of 
Congress. I was a vary obvious parson to call to give then 
assurances as to the kind of recaption they were going to 
get; that thay uara meeting nice people. They wara going to 
gat a good zacaption. They had nothing to worry about. This 
was the basis of our whole meeting. 

fi Mho was at this meeting besides the FDN coirmander" 
and you and Prank Gomez? 

A Probably Bosco Hatanozos was there and I don't 



UNCIASSIFIEO 



288 



NAME 
1 178 
1 179 
1 180 
1 181 
1 182 
1 183 
1 184 
1 185 
1 186 
1 187 
1 188 
1 189 
1 190 
119 1 
1 192 
1 193 
1 19U 
1 195 
1 196 

I 197 

II 98 
1 199 
1200 
1201 
1202 



HIR224000 



lemerabec . 



msimm 



PAGE 49 



2 Was Oliver North there? 
A No. He was not there. 
2 Was Otto Reich there? 

A No . 

t 
2 Uas Bob Kag-an there? 

A No. 

2 To your knowledge there was nobody else there 
except Bosco Hatanoros? 

A There very well could have been sone other people 
there. You were naning nanes and I have a specific 
recollection of people who were not there. 

2 But you don't renenber who others night have been? 

A No. 

2 Uas Rich Miller there? 

A I don't think so. 

2 You had indicated earlier, at least according to 
our colleague's recollection of your interview in March that 
Oliver North had called you and asked you to-- 

A This was a aistake that I corrected later. It was 
Frank Goaez that called ne . 

2 It was not Oliver North? 

A It uas not Oliver North. I corrected that later on 
on the records. I corrected it at the special counsel's 
office; isn't that correct, counsel? 



wu^ssro 



289 



NAME : 
1203 
12014 
1205 
1206 
1207 
1208 
1209 
12 10 
12 11 
1212 
1213 
12 1U 
12 15 
12 16 
12 17 
1218 
12 19 
1220 
122 1 
1222 
1223 
12214 
1225 
1226 
1227 



HIR22<4000 



UNCUSSIHED 



PAGE 50 



HR. COSTOK: Yes 



THE WITNESS: I chacked ray own records, and that 
was not true. It uas Frank Gomez. 
BY MR. OLIVER: 

2 Hell, did you discuss with Oliver North this 
meeting either prior or after the meeting? 

A I don't think so. 

2 Did you ever discuss the FDN commander's activities 
in Washington with Oliver North? 

A Certainly. 

fi Why would you have dona that? 

A I really can't think of anything else I would 
discuss with Oliver North aMcept things like that. 

2 What did you say to him and what did he say to you 
about their activities in Washington? 

A Thaia being here was to support the effort. His 
inquiries of me would be always on the sub^act of 
effectiveness to support the aiiort. Is it affective, is it 
being well dona. 

S Othaz than their appaazance before the Intelligence 
Comaittea, did you arrange or cause to be arranged any other 
■aatlngs with members of Congress for these individuals 
whlla thay uaza in Washington? 

A With these individuals? 

2 With these FDH commandazs we ara referring to on 



uNcukssra 



290 



UNCLASSIHED 



NAME: HIR22U000 Ul 1 lH-T^UlJI I ||_U PAGE 51 

1228 that particular occasion. 

1229 A My neraory says that there was one raeeting, maybe 

1230 tuo, in the Capitol with a group or two. I don't 

1231 specifically remember who it was, but my bell rings and says 

1232 that they did meet with some congressmen. I can't quite--! 

1233 am reasonably sure they met with some Congressmen. 
12314 e And these meetings were arranged by you? 

1235 A rtay I define a word here? 

1236 2 Please. 

1237 A This was a two-way street. Whether the initiative 

1238 was taken by me to ask the group do you want to hear these 

1239 people or whether a group had heard about then and said will 

12140 you arrange for us to have then, that happened both ways. I 

12141 have no recollection in any single event as to which way it 
1 2<42 happened . 

12U3 An I making nyselx clear? 

121414 2 I think what you are saying is sonetimes they asked 

12>4S you to arrange meetings for then. 

1246 A Right. 

1247 2 Sonetines you asked them to visit. 

1248 A If they wanted these people. 

1249 nx. COSTON: I think we have a problem with the 

1250 ''they.'' By "'they,'' you are referring to congressmen? 
125 1 THE HITMESS: Always X an talking about nembers of 
1 252 Congress . 



UNCLASSIFIED 



291 



UNClASSiriED 



NAKE: HIR22U000 1JI1U&.I1WII ai***^ PAGE 52 
1253 MR. OLIVER: I see. I see. 

125U HR. COSTON: That is the members of Congress 

1255 occasionally asked you? 

1256 THE UITNESS: Yes. 

1257 BY MR. OLIVER^ 

1258 2 Did you meet with the group aiter they had appeared 

1259 before the Intelligence Connittee? 

1260 A To meet uith then substantively, no. To meet with 

1261 them to escort them, yes. 

1262 fi Well, did you attend any of the meetings that they 

1263 had with any members of Congress? 

126'4 A I recall hearing congressmen request these 

1265 commanders. Of course, it had to be done through an 

1266 interpreter. I can't even recall where it was. There were 

1267 several meetings. Sometimes these groups meet in a member's 

1268 office. Sometimes they meet in meeting rooms, and I simply 

1269 cannot remember where these meetings took place. 

1270 2 When you discussed uith Colonel North the 

127 1 effectiveness of these people, what was the discussion based 

1272 on? If you didn't attend the meetings and didn't talk to 

1273 them after they appeared before the Intelligence Committee 

1274 and Colonel North wasn't there, how could you evaluate the 

1275 eiiectiveness? 

1276 A I don't evaluate. Congressmen do. 

1277 2 You said you discussed the effectiveness uith 



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NAME : 
1278 
1279 
1280 
1281 
1282 
1283 
128<4 
1285 
1286 
1287 
1288 
1289 
1290 

129 1 
1292 
1293 
1294 
1295 
1296 
1297 
1298 
1299 
1300 

130 1 
1302 



HIR22U000 



Oliver North 



yNtiASsra 



PAGE S3 



A I would have found out what happened in the 
neetings as far as the effect is concerned. If a 
congressman either agrees to or wants an appearance at a 
briefing of some kind or another, I don't go to the person 
that gave the briefing and say, ''Were you any good?'' I go 
to the congressman and say, ' ' Uas he effective?'' 

2 Did you go to congressmen after these people 
appeared ? 

A X always did that. 

Q Uhich congressman did you talk to after thaix 
appearance ? 

A Uhoevax was there. 

fi You talked to mambars of tha Intalligance 
Committee ? 

A Mo. I didn't ever do that. I considered that 
privileged, and I never questioned a member of the 
Intelligence Conaittaa about testimony before the committee. 

2 So you don't know whether they were effective 
before tha Intalligance Committaa? 

A Not in tha Intelligence Committaa, no. 

Q Uhich congressman did you talk to after they mat 
with tham? 

A Hhoavar thay mat with at that time that were 
individual members. I do not remember who they met with. 



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293 



NAHE : 
1 303 
1 SOU 
1 305 
1306 
1307 
1308 
1309 
13 10 
13 11 
1312 
1313 
1314 
13 15 
1316 
1317 
13 18 
1319 
1320 
1 32 1 
1322 
1323 
1 324 
1325 
1326 
1 327 



UNCussm 



HIR22'4000 UllllLHl llliril II Pl<^^ 514 

After all, there uere scores of congressmen and there were 
scores of meetings. 

2 But there was a targeted list. You said everybody 
kneu-- 

A I would not ask a target if it uas effective. I 
would ask a person that was not a target sitting there and 
ask if the performance was effective. You don't go ask a 
target if the work I was doing on you was effective. You 
don ' t do that . 

2 But why would they meet with congressmen who were 
not on the targeted list. If their minds uere already made 
up one way or the other, why would they bother to meet with 
them? 

A Because they probably put the meeting together, the 
individual member of Congress. 

2 If they are talking to members of Congress who are 
already for or against contra aid and their mind is made up-- 

A The groups are always mixed. The groups uere 
always mixed . 

2 Haybe I am not making myself clear, but I am trying 
to find out how you determined their effectiveness and-- 

k Ultimately their effectiveness about whether or not 
they come off the undecided list. That is what you 
ultimately do and if those that don't ever come off the 
undecided list, you find out the day they vote. That is the 



UNCLASSIFIED 



294 



NAME ■ 
1328 
1329 
1330 
1 33 1 
1332 
1333 
1 334 
133S 
1336 
1337 
1338 
1339 
1340 
1 3"4l 
13142 
1343 
1 344 
1345 
1346 
1347 
1348 
1349 
1350 
1351 
1352 



HIR224000 



UNCUSSIHED 



PAGE 55 



ultimate. You find out ultimately on the day the vote takes 
place whether you were eiiective or not. 

It IS kind of a sudden death proposition. You 
can't vote naybe on that final vote. All right? A group of 
people meet with a visiting expert of one kind or another. 
Let's consider these people m then own field are visiting 
experts . 

Now> there are ^mbers of Congress Ln both sides of 
the aisle, on both sides of every issue, who are also, 
remember, working the sane undecided list in the various 
UHl^ organizations. Mow. these people will say. all right, 
there is a group called the ninety something group that is a 
group of moderate Republicans and about half of then axtt 
invariably on undecided lists. 

They invariably ask for expert witnesses to corae 
in. They almost always do ask for expert witnesses to come 
in. I don't ever attend those meetings. They are usually 
in private offices with a group of 15 people in an office. 
After It is over I will usually ask the host how did he do. 
How did ha perform. Did he do well; that particular witness 
or that particular presenter. So on effectiveness 
immediately the question is did he perform well. 

Then later on you find out did it have any 
substantive effect on that person. 

fi But you don't remember who you asked whether or not 



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295 



NAME 

1353 
1354 
1355 
1356 
1357 
1 358 
1359 
1360 
1 36 1 
1362 
1 363 
1364 
1365 
1366 
1367 
1368 
1369 
1 370 
137 1 
1372 
1 373 
1 3714 
1375 
1 376 
1377 



HIR22M000 



UNCLASSIRED 



PAGE 56 



they perform well 



A No, no. I asked somebody at each meeting whether 
these people were effective. 

e But do you recall any of the names? 

A No. no. I asked somebody at each meeting whether 
these people were effective. 

2 But do you recall any of the names? 

A No, no, no. I don't recall. Because the meetings 
were always all different. 

2 In this, m Exhibit 1 on this confidential check 

list which I have shown you, it says, ''State LPD,'" and 

j 
then in parentheses ,'' Gomez and Ku^Kendall . ' ' 

A I don't know what LPD means. Do you know? 

2 That is the Office of Latin Diplomacy at the State 

Department. You don't know what that is? 

A I have heard of the Latin American. Public 



Diplomacy, yes. This is a town of 



s . If you will 



pardon me, counsel, a lot of times I don't remember 

2 H«ll, that was-- 
A Hhat is the question? 

2 The question was why were you and Gomez listed 
under State and LPD on Oliver North's check list? 
A I don't know. 
2 Here you familiar at the time with the Latin 



"WJUSS/fe 



296 



UHCIASSW 



HXnZ HIR22'4000 Ul llJbl V^' ^^ " "^ PAGE 57 

1378 American Office of Diplomacy? 

1379 A I never worked uith them knowingly. That doesn't 

1380 mean I didn't uork--I didn't talk to somebody from that 

1381 office because I didn't even know who they were with. 

1382 2 Did you know Otto Reich? 

1383 A Certainly. 

1384 2 Did you know he was the head of the Office of Latin 

1385 American Public Diplomacy? 

1386 A I knew he carried a title of ambassador at large 

1387 when he was over there and that was his title. 

1388 2 Did you know that Frank Gomez and Rich Miller had a 

1389 contract with the Office of Latin American Public Diplomacy 

1390 at the State Department? 

139 1 A I knew uh«* they got the contract. I do not know 

1392 anything further about it. 

1393 2 Well, they had several contracts which ran from 

1394 October 1st of 1984 until October 1st of 1986 and it was 

1395 during this period of time in 1985 when this check list was 

1396 compiled that they were under contract to the State 

1397 Department. 

1398 A I was very, very, very much not involved in the 

1399 private workings of IBC. I did not know where their 
luoo business was, whera it cama from ot how much they had. I 
1U01 retained them up until July 1st or thereabouts of 1985 to do 
1U02 a :ob for us and I worked with Frank Gomez doing these 



"NMWD 



297 



NAME 
1U03 

mou 

1405 
1U06 
1U07 
1U08 
1409 
1U10 

mil 

1412 

mi3 

mm 

lU 15 
1416 
1417 
14 18 
14 19 
1420 
142 1 
1422 
1423 
1 424 
1425 
1426 
1427 



HIR224000 



UNCLASSIFIED 



PAGE 58 



specific projects like these right here. These are very 
typical of sorae of the things ue did 

2 But you didn't know uho the other clients uere' 

A I knew they had a :ob with the State Department. I 
kneu that. They were very proud of it. I knew nothing 
else. I really didn't know uho their other clients uere. I 
can't say that. I kneu a couple of commercial clients they 
had that had nothing to do with the government. 

fi But you did not know the contract with the State 
Department they had during this period of time that they 
also uere enployed by the Gulf and Caribbean Foundation for 
Public Relations. You did not know that that contract 
related directly to refugees in Central America and 
Hicaragua? 

A Yes, I knew that, that they uere working with sorae 
of the same people ue were working with. 

2 Did you regard that or did you ever think there 
might be a conflict of interest there? 

A No. I thought our interests were identical. There 
was no conflict. After all, I was doing my uork 
voluntarily. 

2 You ware paying them to do the sane kind of work 
that th«y w«ra being paid by the State Department to do at 
the sane time. 

A Correct. Right. I did not know which of the 



wmssm 



298 



NAME • 
1428 
1429 
1430 

143 1 
1432 
1433 
1434 
1435 
1436 
1437 
1438 
1439 
1440 

144 1 
1442 
1443 
1444 
1445 
1446 
1447 
1448 
1449 
1450 
145 1 
1452 



HIR224000 



wiAssro 



PAGE 59 



different things that ue did together that they were 
involved with the State Department on a concurrent basis or 
not I had no idea. 

e Later on m this check list there is a reference to 
Joachira tlaitre State/LPD, ''congressional meetings, 
speeches, and OPEC pieces.*' 



A 

2 
list? 
A 
2 
A 
Maitre 



That IS the same description I gave you earlier. 
Uhy would your name appear on Oliver North's check 



On that? 

On that particular subject. 

Because he knew of my relationship with Joachim 

I think we were the very first people to sponsor 
Haitre in his trips to Central America. 

HR. COSTON- Is your question why did Oliver North 
put Hr . Kuykendall's name down? I think he testified he 
didn't see this document until six weeks ago. 

MR. OLIVER: I am asking why your name would have 
been on Oliver North's check list. 

HR. COSTON: You are asking him to speculate on 
that. 

HR. OLIVER: I am asking how Oliver North came to 
know Joachin Haltta was involved in congressional meetings, 
speeches and OP^D pieces. 

THE WITNESS: I can't imagine his not knowing it. 



nmma 



299 



NAHE: 

1453 

msu 

1455 
1456 
1457 
11458 
11459 
1<460 
1146 1 
m62 
11463 
m6i4 
1465 
1U66 
11467 
11468 
1U69 
1 1470 
147 1 
1472 
11473 
1U714 
1475 
11476 
11477 



HIR2214000 



UNCUSSIHED 



PAGE 60 



BY MR. OLIVEI: ~* 

2 Did you tell him? 

A I ai» certain I told hii». 

2 Did you tell hira in connection uith this, uith the 
efforts to influence the vote in the Congress? 

A I couldn't answer that question at all. I wouldn't 
know how to separate then, counsel. 

2 Let the record show I was referring to the 
reference on page UV document paga number 137 1 in our 
documentation. "T- _^ i 

A Let me clarify something. I don't want to make it 
appear at all that I did not discuss this with Oliver Morth. 
I do not remember, and I don't remember the context. 

2 On page five, document number 1372, there is a 
reference to Reverend Valardo Antonio Santeliz, Pentacostal 
minister, an atrocity victim, congressional media meetings, 
March 22, 23 and under the column headed, 
' 'Responsibility, • • it says, ''State LPD,'' and then in 
parenthesis, ''Kuykendall and Gomez.'' Did you arrange 
congressional and media meetings for Reverend Santeliz? 

A Congressional meetings? 

2 Who did you arrange meetings with? Which members 
of Congress? Do you recall? 

A It was at least one group. I did not arrange any 
individual meetings for him. There were at least one, maybe 



UNCUSSIHED 



300 



NAHE ■ 

1478 
1479 
1 480 
148 I 
1482 
1483 
1484 
1485 
1486 
1487 
1488 
1489 
1490 
1 49 1 
1492 
1493 
1 494 
1495 
1496 
1497 
1498 
1499 
1500 
150 1 
1502 



HIR224000 



UNCUSSIFIED 



PAGE 6 1 



two groups of the , diif erent study groups and the 90 some odd 
group. Those were generally a couple of groups that met 
uith people and this type thing. I do not remember at that 
time . It would not--there is no way I could have a 
recollection exactly which groups they met with. I do 
remember specifically that they did meet with groups and no 
individual congressman. 

2 Further down on the same page there is a reference 
to--I will read from the document. 

''Invite President Ouarte, Monge. Suazo and 
Barletta to a very private meeting in Texas with key 
congressional leaders so that CODEL can here unvarnished 
concerns for Sandanistas and Democratic leaders' support for 
the FDN.'' And under the responsibility column, it has in 
parentheses, ' ' Kuykendall , ' ' and then below that, ''NSC 
(North. ) • • 

My question to you, rtr . Kuykendall, is did that 
meeting ever take place? 

A No . J[ never heard of that meeting. I don't know 
where that caae from. 

2 Did anyone ever discuss that meeting with you? 

A No. I don't have any idea where that came from. I 
think you know by now if I did, I would tell you. 

2 I would like to ask you about the names of some of 
the other people that are on this check list on which list 



#6\>safta 



301 



NAHE 

1503 
1 SOU 
150S 
1 S06 
1507 
1 508 
1509 
15 10 
15 11 
15 12 
15 13 
15m 
1515 
15 16 
151- 
15 18 
15 19 
1520 
152 1 
1522 
1 523 
1 52U 
1525 
1526 
1527 



HIR22M0OO 



your name appe 



mssiFIB 



PAGE 62 



k Sure 

2 I have already asked you about Jonathan Miller and 
you indicated you had never met hii» to your knouledge 

A To my knouledge . 

e And Halt Raymond. You indicated earlier you had 
met uith Walt Raymond. 

A Yes 

2 Uhen did you meet Halt Raymond? 

A I think I met Halt Raymond m about February of 
1985 or thereabouts. 

2 And what uas the occasion? 

A He introduced me to] 

[who uas in this country on private 
business and Halt Raymond introduced me to the man. That 
man. since then, and I have become close friends and our 
uives are friends even. 

2 But that uas the first occasion you met Hr . 
Raymond ? 

A Yes. 

2 Hho introduced you to Hr . Raymond? 

A At that time he uas right across the hall from 
Ollie North's office, but it is not my recollection--! 
believe I got this call from Halt Raymond, but uhen I uent 
up to meet Raymond. Ollie crossed the hall and introduced 





UNCLASSIFIED 



302 



NAME ■ 
1528 
1529 
1530 
153 1 
1 532 
1S33 
153U 
1535 
1536 
1537 
1538 
1539 
15U0 

ism 

1542 
15U3 
15UU 
ISUS 
15146 
15U7 
1548 
1549 
1550 
1551 
1552 



HIR224000 
US . 

Q 
A 
2 
A 
call . 



UNCLASSIFIED 



PAGE 63 



So Ollie North introduced you to Ualt Raymond? 
But Ollie uas not part of--it was a introduction 
He introduced you when he uas across the hall? 
I don't think Ollie North instigated the phone 



2 When Hr . Raymond called you, what did he say he 
wanted to talk to you about or wanted to meet with you 
about? 

A He said, ''There is a man m this country on 
private business that I think for you all's cause of 
information, world-wide strategic information, that you 
would find extremely interesting. Would you like to have 
breakfast with him or meet with him and find out if he would 
be useful, would be of interest?'' 

2 When you talk about the cause, are you talking 
about the contras or a broader cause? 

A Much broader in this case. 

2 There was the cause you referred to earlier that 
was the subject of many of the meetings at the American 
Security Council. 

A Absolutely. Absolutely. To give you an example, 
we did have breakfast together. I did escort the Count to 
Capitol Hill. The second place he went was to meet Chairman 
Hamilton . 



HHtmsw 



303 



NAME 

15S3 
155U 
1 SS5 
1 S56 
1557 
1558 
1 559 
1 560 

156 1 
1 562 
1 563 
156M 
1 565 
1566 
1567 
1 568 
1 569 
1570 

157 1 
1572 
1573 
1 574 
1 575 
1576 
1577 



HIR22U000 



UNCLASSIFIED 

What was this gentleman's name' 



PAGE 614 



A The Count AleKander de tlarenches 




2 Uhat does he do nou' 

A He is a retired private citizen. 

2 Does he live in France or the United States? 

A He lives in France and Suitzetland both. He lives 
in South of France and Viviers, Switzerland and Pans His 
mother uas American and his English is perfect. 

2 Vou met him in Walt Raymond's office? 

A No , no . I did no t . 

2 Where did you meet him? 

A I met hira at the Madison Hotel m the lobby. I 
have never seen him and Walt Raymond together. 

2 Halt Raymond did not accompany you to this meeting? 

A No , he did not . 

2 You met with Halt Raymond. He indicated he thought 
this gentleman might be helpful, and he arranged for you to 
meet him at the Hadison Hotel. 

A That IS correct. 

2 And the two of you met alone? 

A Yes. 

2 Has Nicaragua discussed at this-- 

A No, s.ir . I have never heard the Count mention 
Nicaragua^' It was always a broader picture than that. But" 



Kussro 



304 



NAHE 
1578 
1579 
1580 
1 581 
1582 
1583 
15814 
1585 
1586 
1587 
1588 
1589 
1590 

159 1 
1592 
1593 
1594 
1595 
1596 
1597 
1598 
1599 
1600 

160 1 
1602 



HIR22'4000 



mssro 



PAGE 65 




because o f ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^B I him 
to meet Chairman Durenberger. I always excused myself 
because it was classified. I took him to meet Chairman 
Hamilton. I excused myself, because it uas classified He 
met the staff of the Senate Intelligence Committee on a 
private meeting. 

I think he met the staff of the House Intelligence 
Committee. I can't remember for certain whether he did or 
no t . ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 

'l left because 

thought it was proper that I do so. And by the way. each of 
the people that met with hin were most impressed about the 
breadth of this knowledge. 

2 Did he speak to your luncheon group? 

A Yes, he did, much after the fact. He spoke to our 
luncheon group in January or February of this year or maybe 
December of last year. He was over here on his own private 
business early, I think it was December And he came m as 
a guest and spoke to us. 

2 Did you ever have any business or financial 
ralationship with the Count subsequent to your first meeting 
with hii»? 

A Othar than paying his expenses for a second trip' 

2 The Gulf and Caribbean Foundation paid his 
expenses ? 



UNCLASSIFIED 



305 



HIR2214000 



WIHS«B 



PAGE 66 



HAHE 

1603 A No, no. This was done thiough--wi th ray own piivate 

ISOM funds and reimbursed by Ollie North. 

1605 2 Why uould Ollie North reimburse you ior the Count's 

1606 trip? 

1607 A Now that whole matter is a matter of record. I 

1608 will go over it. I just want to tell you it is a matter of 

1609 record, both here and downtown. 

1610 MR. COSTON: In fact by way of background, ue spent 

1611 several hours with Mr. Woodcock identifying travelers'/^ 

1612 checks that were used for the reimbursement. 

1613 THE WITNESS- We, m 1985, a couple of months 
16114 after, whatever, after the Count had been here the first 

1615 time, m a discussion about who was quite effective with the 

1616 moderate elements in Congress that would look at the big 

1617 picture, this name came up. And Ollie North asked rae . ''Can 

1618 you bring him back over^'* He had volunteered to come, bu': 

1619 he said I will never charge you anything, but I do have to 

1620 have my expenses paid. 

1621 BY MR. OLIVER: 

1622 2 Hou did his nana corea up? Did you raise his name? 

1623 A Yes, as being a tremendous asset to us. 

162U 2 Did Oliver North know him? He met him before? 

1625 A I don't think so. Not this trip. He met hira 

1626 later, but ha did not meet him on this first trip. 

1627 2 You discussed tha names of people who could be 



UNCUSSIFIED 



306 



UNCLASSIFIED 



NAME: HIP.22'4000 lllllll_r^^mi IkV PAGE 67 

1628 effective with Congress. 

1629 A Right. 

1630 e And you indicated that this fellow was impressive, 

1631 and you thought he would be effective. 

1632 A Right. 

1633 2 North asked you if he could come back over. 
163U A Right. I said we didn't have the money, and he 

1635 said, ''If I can get some of our friends to pay for it, will 

1636 you or can you underwrite it on the front end?'' And I 

1637 said, ''Yes, I can do it that way.'' So that is what we 

1638 did. And I wrote a check after the Count got back. He rode 

1639 the Concord, by the way. 

16U0 He is partly crippled and it travels very fast, and 

1641 so the total bill for the trip, the entire trip, was $6,100 

1642 and some odd dollars, which I wrote hire a personal check for 

1643 that, and I was reimbursed with those traveler's checks in 

1644 three, two thousand increments to reimburse me for that. 

1645 2 And those traveler checks were given to you by 

1646 Oliver North? 

1647 A Yes. 

1648 2 War* they blank when they were given to you? 

1649 A Yes. 

1650 2 Where did Oliver North tell you he had gotten those 

1651 traveler's checks? 

1652 A He did not. 



UNCIASSIRED 



307 



NAME 
1653 
165U 
16S5 
1656 
1657 
16S8 
1659 
1660 
1661 
1662 
1663 
16614 
1665 
1666 
1667 
1668 
1669 
1670 
167 1 



HIR22U000 



uHtussra 



PAGE 68 



2 Did he explain to you why they were on a Central 
American Bank or Cayman Islands Bank? You noticed what kind 
of traveler's checks they were, I assume. 

A The first time he gave me checks, he made notes on 
his notebook of the numbers and said be sure and sign those 
things. They are cash. I don't have any recollection of 
having noticed what kind of traveler.'fe checks they uere, 
what kind of--I am not sure they weren't Barclay's Bank or 
traveler's checks. 

I don't know what they were. I don't have any 
recollection of that really. They were reimbursing me for 
money I had already spent, the traveler's checks. I had 
already spent the money and paid for everything and simply 
they were reimbursing rea for money already spent. 

2 Sorry to put you through this again. This is my 
first awareness of this, and this is for the record. 

A Frankly, it is relevant. They were Visa traveler's 
checks. I knew they had some familiar thing on the front. 
They were Visa. 



UNCLASSIFIED 



308 



NAHE 
1672 
1673 
16714 
1675 
1676 
1677 
1678 
1679 
1680 
1681 
1682 
1683 
168M 
1685 
1686 
1687 
1688 
1689 
1690 
169 1 
1692 
1693 
169U 
1695 
1696 



HIR2214000 



RPTS HCGIHN 



DCHK LYHCH 



UNCUSSIHED 



PAGE 69 



MR. Oliver :' Would like to enter copies of these 
traveler's checks. Hark thera as Exhibit 2 and ask you to 
look at these photocopies of travelei;*s checks. 

(Exhibit 2 was narked for identification) 
BY MR. OLIVER: 

2 I would like to -isk you if those are copies of the 
traveler's checks you received from Oliver North and uhether 
or not that is your signature on those checks? 

A Oh yes . Yes . 

Q You will note that those traveler's checks cone 
from two different banks . One is the AC Bank and one is the 
Banco Del Pichmcha, I believe. 

Did you ask Oliver North why these checks came from 
two different banks? 

A No, I did not. 

2 Did ha tell you what the source of these traveler's 
checks were? 

A No. No. he did not. 

fi Did ha give you these checks in his office? 

A Yes . 

S Did ha remove them from a safe in his office? 

A Mot that I remember. There was a safe there but I 
do not remember his removing than from it. Ha had a book in 



\iHtm»B 



309 



HIR22U000 



UNcussm 



PAGE 70 



NAME 

1697 uhich he noted the numbers and there were several sequences 

1698 there. These were three different transactions of «2.000 

1699 each. 

1700 2 Were you concerned about taking cash from a White 

1701 House official? 

1702 A No, because of the fact he had indicated in the 

1703 beginning that this was money of friends of his. of course 

1704 he said, and he had indicated that it was a nongovernmental 

1705 source by saying friends of ours, when he made the request 

1706 m the first place. 

1707 2 But you never inquired as to the source of the 

1708 funds? 

1709 . A No , no . 

17 10 2 Did the Count ever inqulra? 

1711 A He never saw it. He got a check from me. 

1712 2 Did you tell him who had paid for his trip? 
17 13 A No, I did not. 

1714 2 And when did that trip taka place? 

1715 A Soneuhera lika March, April of '85. 

1716 By tha way, tha datas on ona whole batch of those 

1717 traveler's checks is wrong by ona month. When I said a 

17 18 whole stack of than I put tha wrong data on them by exactly 

1719 ona aonth. It should have bean U-S instead of 3-5. We 

1720 discovered that by tha fact my bank racords didn't give with 

1721 the date on the check and then wa realized that. 



UNCUSSIFIED 



310 



HAME ■■ 
1722 
1723 
1724 
1725 
1726 
1727 
1728 
1729 
1730 
1731 
1732 
1733 
1734 
1735 
1736 
1737 
1738 
1739 
1740 
1741 
1742 
1743 
1744 
1745 
1746 



HIR224000 



UNCLASSIFIED 



AGE 7 1 



2 Some of there indicate March 5, 1985? 

A That was April 5th. 

2 April 5, 1985? 

A It is :ust the fact I simply sat down and signed 
them with the wrong date on then. 

2 And then you deposited thera 

A Directly into ray personal bank account and then 
transferred it to ray company account. 

2 It was April 12? 

A Ves . That was cash. I had to get those out of ray 
hands . 

2 This was after the Count had come to the United 
States and returned to Europe? 

A Yes, yes. I had already written the check. 

2 So the trip took place in 

A Say narch. 

2 (larch of 1985. How long was the Count in the 
United States? 

A Under ny umbrella, five days. 

2 And what did ha do during those five days that he 
was under your unbrella? 

A Ha spent three full days on the Hill. 

S What did you do and who did you sea? 

A Visiting again with soma of the sane people. The 
Intelliganca Committaa staff I believe was on the second 



UNCUSSIHED 



311 



UNCLASSIFIED 



PAGE 72 



NAHE HIR2214000 

171*7 trip. I rcraeraber Durenberger sau hira again. 
1748 2 On the Senate side? 
17U9 A On the Senate side, I can't remember whether Lee 

1750 Hamilton sau him a second time or not. I do not remember. 

1751 ny recollection is that ue sau the ranking member of 

1752 Intelligence. Hho was it at that time? I have forgotten. 

1753 on this side. Would that have been the guy from Arizona. 

1754 Congressman 

1755 2 Bob Stump' 

1756 A Yes, Stump. I remember one of the moderate to 

1757 liberal groups of Republicans asked him to come in and 

1758 visit. He specifically remembered that meeting because he 

1759 considered it a very constructive meeting. 

1760 2 Did you attend these meetings? 

1761 A No. Uell, I did one of them, but these, this is 

1762 Private Study Group stuff and I could have sat in, but I 

1763 just thought it better if I didn't. And so ue spent three 

1764 full days on the Hill and when I asked him to come over 

1765 here, he said you are not going to work me for a full ueek, 

1766 are you? 

1767 I said no. I will tall you what I can do. I uill 

1768 taka you to Texas and let you sea a ranch. So some of the 

1769 Gulf and Caribbean paopla mat with hia as tha primary guest 

1770 at a summer place outside San Antonio at Hunt, Texas, for 

1771 kind of a picnic at noon tina on a Thursday, on that 



uNtussm 



312 



NAHE ■ 
1772 
1773 
1774 
1775 
1776 
1777 
1778 
1779 
1780 
1781 
1782 
1783 
178H 
1785 
1786 
1787 
1788 
1789 
1790 
1791 
1792 
1793 
1794 
1795 
1796 



uNcussra 



HIR22U000 limill Malllll It-U PAGE 73 
Thursday And that trip--and it is necessary that you knou 
this because it is my record in both other places. I don't 
want you finding things you are going to have to come back 
in here for. It is on the record m the other places. 

2 Thank you. 

A Mr. Blakeraore. who is President of Gulf and 
Caribbean, sent his own airplane up here and Ollie North, 
the Count--this is the first time Ollie had met the Count--and 
I and a member of Gulf and Caribbean, by the way--that 
happened to be in town, a r ancher--f lew back to San Antonio, 
drove privately to Hunt, Texas where the Count was the 
guest, honored guest. 

S Flew from Washington to San Antonio? 

A On a private plane that belong to Mr. Blakemore , 
President of Gulf and Caribbean, okay? And nr . Blakemore 
was not on the airplane because he knew it was going to be 
full. I think it was a Lear. I forget what kind of 
airplane it was. He gave--011ie North gave z. portion of his 
brief in9--remeiiber it was outdoors at a picnic. He had no 
slide projactozs or anything. It was mostly ^ust a short 
verbal briaiing . He was not the guest of honor. 

Then the Count gave his overview of the whole 
strategic situation uotlduid«--actually , insofar as he called 
It the Soviet Enpira. 

Ollia had to return imnediately , so one of the 



wmm 



313 



NAME 
1797 
1798 
1799 
1800 

180 1 
1802 
1803 
1804 
1805 
1806 
1807 
1808 
1809 
1810 

181 1 
1812 
1813 
ISIK 
1815 
1816 
1817 
1818 
18 19 
1820 

182 1 



UNCLASSIfe 



HIR22M000 Ul VllLn|ll]l| iril ^kGE 1^ 

guests uas from San Antonio. Ollie drove back over to San 
Antonio in an automobile -••d lA^smaller private plane then 
fleu the Count and me and fit. Blakemoie out to a ranch 
fairly close to the Rio Grande, :ust north of Big Bend Park. 

One of the things that the Count wanted to do 
actually uas to fly up and down the Rio Grande River some 
He wanted to actually see the terrain. I remember asking 
hira why are you doing this? Why do you want to do that? He 
specifically asked Mr. Blakemoie if the plane could fly hira 
up and down the river. 

He said, when I return to Pans I want to be able 
to tell my friends I have seen the place that the American- 
NATO Army will be if Central America ever falls. -*«al ^hat 
was his specific comment and I have got a good memory for 
that. 

Then we went back to Midland, spent the evening, 
and he flew back to New York on Friday, directly back to New 
York from Midland. 

Ollie fleu directly back to Washington from San 
Antonio and the only transactions that Gulf and Caribbean 
ever had with Oliver North, we purchased that ticket--and it 
is a matter of tacord--fot Olivet North, a one way ticket 
from San Antonio back to Washington, and that is a matter of 
record that wa have turned over. 

2 He gave you these traveler's checks on two separate 



UNCLASSIRED 



314 



NAHE : 
1822 
1823 
1824 
1825 
1826 
1827 
1828 
1829 
1830 
1831 
1832 
1833 
1834 
1835 
1836 
1837 
1838 
1839 
1840 
1841 
1842 
1843 
1844 
1845 
1846 



HIR224000 



UNCUSSIFO 



PAGE 75 



occasions, three separate occasions' 



A Correct. 

2 Why did it happen on three separate occasions' 

A I have no idea. 

2 Did you tell hira hou much the expenses were' 

A Yes. 

2 Did you give him any receipt for the expenses? 

A No sir. 

2 You :ust indicated to him that this uas the amount? 
Did you give him any kind of letter or anything for his 
records ? 

A No. I did not. 

2 Why, uhen he gave you the first batch of checks, 
did he indicate to you that he would reimburse you for the 
balance at a later time? 

A There was never any certainty until all the money 
came m, that there would be any more. There uas never any 
absolute guarantee on the front end that I would get any 
money. He said if you will do it, I will get our friends to 
help us on it. There was no written guarantee from him that 
I would evai get any of the money. There was no written 
guarantee any mote than our discussion. So I had assumed. 
frankly, ii I got as much as S4,000 back I would be lucky. 
I never expected to get all of it back, the S6,000, or *6 1 
something . 



WIKSSW 



315 



UNCLASSIFIED 



NANE HIR22(4000 1 1 1 lULrilJlJ ■ I Ikf PAGE 76 

18U7 2 Why did you give some of the traveler's checks to 

18U8 Elizabeth Pouell? 

18149 A Elizabeth Pouell? I don't knou. This uas--in the 

1850 sense of giving then to her. She picked ree up out m front 

1851 of the Old EJOfJon the uay to the airport. This particular 

1852 envelope of checks I had never opened. When I got m the 

1853 car. she uas going to the airport. I handed her the 

18SU envelope. I said get th ■^e things in the bank and I didn't 

1855 even think about the fact that they weren't signed. She had 

1856 to sign them to put then in the bank. 

1857 2 This uas the last batch of checks? 

1858 A The last batch. And ue had forgotten about the 

1859 fact that it happenad this uay until she realized it quite a 

1860 uhile later when ua couldn't find *2.000 worth of those 

1861 checks, and it turns out that she had put them in her 

1862 account and then moved them over the same uay we did the 

1863 other. They showed up in her bank account, but the transfer 
186U over to the company accounts happened in the sane way? 

1865 2 At the sana time? 

1866 A Mo. Well 

1867 2 Uhan did she reimburse the company from hei 

1868 accuont? 

1869 A Hithin a day or two latar. 

1870 2 Within a day or two? 

187 1 A That is in all tha bank records. They have all the 



BNCUSSW 



316 



UNCUSSIHED 



NAME- HIR22U000 ^^ • ■ w — PkGl. 77 

1872 bank records here about that order of events. 

1873 HR. COSTON: The Senate I think does, and the FBI 
18714 does. 

1875 THE WITNESS: The Senate does and the FBI does, as 

1876 far as those sequences of events were concerned. Hou 

1877 remember, it uas our money, period. I told the FBI guy I 

1878 don't uant any snou tire story. This uas reimbursed money 

1879 for money ue had already spent as far as the way she handled 

1880 it IS concerned. But ue did make a complete record here. 

1881 The bank records are total. It all moved into the account 

1882 that I wrote the check on in the first place. 

1883 BY MR. OLIVER^ 

188U C Hou, when you made the arrangements on Capitol 

1885 Hill 

1886 MR. COSTON: For the record, I uant to make sure 
18871 you have got--ue also turned over Elizabeth Powell's bank 

1888 records showing a document captioned K-8 and K-9, the 

1889 transfer of money from her personal account to the 

1890 Kuykendall Company account. 

1891 BY MR. OLIVER: 

1892 S When were those dated? 

1893 A nay of '85. 
189<4 S Uhan you made the arrangements fot the Count visit 

1895 with people on Capitol Hill, uhat did you tell the people he 

1896 uas going to talk about? What did you tell them the purpose 



UNCUSSIHED 



317 



KAHE 
1897 
1898 
1899 
1900 
190 1 
1 902 
1903 
190U 
190S 
1906 
1907 
1908 
1909 
19 10 
19 11 
19 12 
19 13 
1 9 1 U 
19 15 
19 16 
19 17 
19 18 
19 19 
1920 
192 1 



HIR22M000 



of the meeting 



lEUSsra 



PAGE 78 



A My recollection is the Count's entire presentation 
was to describe the uay the Central American-Cuba initiative 
fit into the worldwide Soviet strategy This was always his 
agenda This was one of the reasons it was so interesting 
to the members of Congress is because of the breadth of 
knowledge of it . 

S When you say the Cuba strategy 

A As Cuba relates to Central America and as it 
relates to us. This was his presentation. 

2 So ha discussed the dangers of Cuban influence in 
Nicaragua and in Central America in general? 

A As I told you earlier, counsel, I have never heard 
hira even discuss Nicaragua. H« looked at Central America as 
an entity, one whole entity. He looked at HeKico as a 
different entity. He called it that powder keg--nexico He 
considered it indefensible. In other words, we would ^ust 
have to pull back and draw the lino, because he said that 
country is not defensible at all. This was his comment. 

S Wall, did ha regard tha establishment of a Cuban- 
Soviat basa in Nicaragua as a danger to all of Central 
Aaarica and to tha United States? 

A Absolutely. 

S And ha articulated that vary well? 

A Yas. 



UNCLASSIFIED 



318 



UNCUSSIflfi) 



PAGE 79 



NAME: HIR22I4000 

1922 2 I assume fhat vias the raam reason that you and 

1923 Oliver North wanted him to come back to the United States' 

1924 A That is right. He uas not provincial in his 

1925 picture. In other words, he did not discuss the contras or 

1926 anything like that. 

1927 2 Did he discuss the need for United States 

1928 assistance to the contras? Did he discuss the importance of 

1929 It? 

1930 A In the specific discussion of legislation, no. In 

1931 the necessity of the United States somehow preventing the 

1932 establishment of a well established Havana-Soviet base on 

1933 the mainland of North America and Central America, yes. He 

1934 considered the prevention of that as essential to the 

1935 overall strategy. 

1936 2 Can you remember the names of some of the 

1937 Congressmen and Senators with whom he met besides Senator 

1938 Durenberger and Lee Hamilton and Bob Stump, whom you have 

1939 mentioned? 

19U0 A Yes. Congressman Bob McEwen of Ohio had a private 

1941 luncheon in his office for I think eight or ten 

1942 Con9EessBen--buf f et there. I don't remember who was at the 

1943 masting even. The Congressman from Pennsylvania, Bill 

1944 dinger. Congressman Clingei, who was the head of that, what 

1945 IS It, the 92 Group. 93 Group. I don't remember the name of 

1946 It, 90 something Group. Congressman dinger was chairman of 



uNcussra 



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NAHE 
19U7 
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19U9 
1950 
1951 
1952 
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19SU 
1955 
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196 1 
1962 
1963 
196'* 
1965 
1966 
1967 
1968 
1969 
1970 

197 1 



miASsm 



HIR22U000 |H^||I r^VJ yil •■■— ' PAGE 80 
that group and he hosted the group in his office also where 
the Count attended. 

2 Do you remember any others? 

A Ho , I don' t . 

C Did you arrange any media events for hira? 

A No, absolutely not. 

2 Why not? 

A Again, because I did not \ant the media descending 
upon the Congressmen, because, after all. this is right in 
the midst of a political vote situation and if a person in 
ray position is to maintain the trust of the members of 
Congress and say I have a very important guest that wants to 
visit uith you. if the Congressman thinks that there is 
going to be a reporter standing right outside the door 
saying well, did he change your mind, did he put pressure on 
you, all those questions. If I allowed that to happen, I 
would have no credibility with the members of Congress in 
our Gulf and Caribbean attempt to give them a position 
without any pressure. 

S To give them a position on Central America? 

A Right, or anything else. If I were conducting 
another issue on another lobbying job. This is a level of 
trust that I have built up personally on Capitol Hill and ^ 
will keep that level of trust. 

S But this particular lobbying job related to an 



UNCUSSIHED 



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ifimim 



NAME HIR22U000 -^ ^^ H f£.tj PAGE 81 

1972 effort to obtain huraanitarian aid for the contras? 

1973 A That is right. Absolutely right. In this case it 

1974 was. It uould be no different than any other lobbying job. 

1975 If a person is to be able to listen to an established expert 

1976 and he is undecided on an issue, he simply doesn't uant the 

1977 flack of saying have you made up your mind yet. 

1978 Q You were doing all this as a volunteer? 

1979 A Yes. At this time, yes I was, at this time. There 

1980 came a time that I did receive some lobbying money, but not 

1981 at this time. 

1982 Q Uhen did you receive lobbying money? Uhen did that 

1983 time come? 

198U A The first time? June of '86. 

1985 2 Where did that money come from? 

1986 A Sentinel. 

1987 2 We will come to that in a minute, but I would like 

1988 to go through this chronology if we could, and I would like 

1989 to ask you about some meetings that are indicated in 1985 on 

1990 Colonel North's calendar. We have already talked about the 
199 1 luncheon at your town ^ouse, this luncheon group that Oliver 

1992 Horth appeared before. 

1993 We talked about the meeting on March 1st late in 
19914 the afternoon at your town_housa . 

1995 Do you remember a meeting which took place in the 

1996 White House between 12^30 and 1^30 on March the 27th with 



«usa«® 



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KAHE 

1997 
1998 

1999 
2000 
200 1 
2002 
2003 
2004 
2005 
2006 
2007 
2008 
2009 
20 10 
20 1 1 
20 12 
20 1 3 
20 14 
20 15 
20 16 
20 17 
2018 
20 19 
2020 
2021 



HIR22U000 



UNCUSSIFIED 



PAGE 82 



Ml. Calero, nr . Cruz and Mr. Robelo m Oliver Morth's 
office ? 

A In the White House' No sit. I have never been to 
such a meeting. 

2 Were you ever at a meeting in Mr. North's office 
with Robert Owen? 

A No sit, not that I remember. 

2 You don't recall ever being at a meeting with 
Oliver North and the Triple A, as they were called? 

A In the White House? 

2 Well, do you remember being in a meeting with 
Oliver North and a Triple A anywhere? 

A Oh I am sure I have, but not in the White Housa . 

2 Where would those meetings have taken place? 

A Either in ray town house or at possibly receptions 
of one kind or another. There were several leceptions 
around that those people were there and I attended. 

2 There were several meetings in your town house? 

A No, not with Oliver North, maybe one. I don't have 
any specific recollection of any naating including them 
other than a reception, which I had after one of the votes 
to that the people that had worked with us, where the Triple 
A were guests and I am reasonably suia Ollie came. 

2 That was in June or July of '85, tight after the 
final vote? 



UNCLASSIFIED 



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NAHE: 
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2023 
2024 
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203 1 
2032 
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20314 
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2040 

204 1 
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HIR224000 



UNCLASSIHED 



PAGE 83 



About that time, yes. 



2 But you don't evei cemember being in a meeting uith 
Robert Owen and the Triple A' 

A Counsel. I didn't know who Rob Ouen was for a year. 
I would see him standing on the wall and I wasn't even 
aware he existed. I didn't Know who he was or what he did 
or anything bout him. There was. sometimes there was a guy 
standing over there in ' ^ corner. I didn't Know his name. 

2 When did you find out who he was? 

A Probably well into '86 and even then I wasn't sure 
who he was. He never said anything, never did anything as 
far as I was concerned. Never opened his mouth. I have 
never had a conversation with him. 

2 Do you remember a meeting on March 28, 1985 with 
Oliver Korth. probably a breakfast at 7^30 m the morning' 

A Who besides me? 

2 Just you . 

A Does it say where? 

2 Well, it doesn't indicate where. It might have 
been in his office because it doesn't have a place. 

A I have never had even a coke in his office, much 
less breakfast. 

2 Did you ever have breakfast with him in the White 
House mess? 

A Not that I remember. 



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HIR22H000 



CNCUSSIflfD 



PAGE 84 



Well, did you ever have breakfast with hire just the 



two of you? 

A I could have, but I have no recollection of it. 

C Do you remember meeting on April 1st with Oliver 
North and the Triple A at 5 30 in the afternoon? 

A Where' 

2 I don't know. Do you remember such a meeting' 

A I don't know. The only thing I can tell you for 
sure. Counsel, is I have never mat with him in the White 
House. Other than that--becausa of the fact that I was with 
the leadership many times--and so I really don't know. 

2 At 5:30 in the afternoon. Would that probably have 
been at your town house? 

A It could have been. 

2 Because that was usually the time of this meeting? 

A Yes. could very well have been. 



UNCUSSIFIED 



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HIR22U000 



RPTS HCGINN 



ONCUssm 



PAGE 85 



DCHK LYNCH 

2 And the Triple A would come to these meetings? 

A Uhat is the date on that again? 

2 April 1st, 1985. 

A No, no. I uas thinking about the possibility of a 
reception but anything in the way oi a reception would have 
been after a vote and there was no vote there. 

2 When did the first vote occur in 1985? 

A Somewhere in April, because I remember specifically 
the conservative and moderate Democrats asked the Speaker to 
give them another vote and about six to seven weeks later he 
gave them another vote, and that vote took place in June. 
So we had to back off from that, so it had to be around mid- 
April . 

2 Do you remember a meeting on April 2nd or 3rd at U 
o'clock at your town house where there was a steering group 
meeting and a head count and Oliver North attended? 

A Not specifically. I don't remember Ollie ever 
attending but about maybe two of those. 

2 Hera those prior to the first vote? 

A Yes. That would have been prior to the first vote. 
Halt a minute. I am sorry. Strike that. I got my--when 
you say first vote, you mean first vote in 

2 1985? 



minssw 



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2 103 
2 lOU 
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2108 
2 109 
2 110 
2 111 
2 112 



HIR22'4000 



UNCLASSIHED 



PAGE 86 



A Let's go back and strike. 

2 Ue are still in 1985. 

A We are still in 1985. That is uhy I stuttered 
here. The Triple A leadership? 

2 No. This uas a steering group and head count 
meeting that I believe took place on April 2nd at U o'clock 
in the afternoon? 

A That very uell could have been a steering committee 
meeting and a head count, yes. 

2 And Oliver North attended? 

A He very uell could have. 

2 Uhat happened at these meetings when you went over 
the head count? You chaired the neeting, is that right? 

A Yes. The first thing ua did uas report any 
movement. Ollie North sat there and listened. I don't 
recall hm ever participating because he sat there and 
listened to the status of the situation. He really had 
nothing to add here, because ue were supposedly the experts, 
he uasn't. So each of the people had talked to staff, had 
talked to naiibers, had had their eaz to the ground, and hey 
would zepott, well, so and so has come over or so and so has 
decided against us. The first thing you do is correct the 
list. You do that every time you meet. 

S Did you keep the master list as the chairman of the 
group as the thing fluctuated? 



UNCIASHD 



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HIR22I4000 llllll.l II X XlfclLM PAGE 87 

A There was no masFer"li?!. I kept a list and 
virtually every one of those people had lists also. They 
uere almost identical. 

2 But basically it was a list you worked off that 
changed ? 

A It was a floating list we worked on and each time 
when a person cane back to the meeting each list would be a 
little different. So ue would combine the list again. 

2 At these meetings did any of these people report on 
the grass roots activities of their organizations that were 
designed to influence? 

A Occasionally, but very, very little, because this 
IS a tough town, remember. Everybody had his own turf and 
one of the reasons that I have always been a good 
coordinator of coalitions is that I don't have a grass roots 
organization, so I don't get on anybody's turf. Ue didn't 
presume to tell anyone how to run his own show. 

2 Uhy was Ollie Korth there? 

A He just wanted to know what was going on. He 
wanted to know the status, I am sure. 

S Of the head count? 

A Right. After--ny recollection is that after one or 
two such meetings that Ollie did not come to those meetings 
any more because there was nothing there for him. 

2 Did anybody from the legislative office in the 



UNCUSSIHED 



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2 mo 

2 1 14 1 
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2151 
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216 1 
2162 



HIR22U000 



uNCUSsra 



PAGE 88 



White House attend those meetings? 

2 No sii They were never at those meetings. They 
were not alloued to. There uas sorae lau or something. 

2 Ollie North uas allowed to but the Legislative 
Office uas not ? 

A I don't knou that. I an ^ust telling you I uas 
told by the Legislative Office, uho I uas very close to, 
very good friends uith, ue cannot come to your meetings 
because of some law. 

2 But you discussed the head count uith them 
yourself. I mean, separately from these meetings? 

A In the hallways they were there, I was there. 
Sure, we discussed individuals, what is the status, and so 
on. After all, there were three or four of those people- 
around the chamber all the way around all the time, as you 
well knou. I knou them, sure. 

£ When the House wasn't in session 

A I never mat with them then. 

2 Never talked to them on the phone? 

A Seldom, if ever. 

2 Here those the White House legislative people oiz^i 
th« State Department legislative people? 

A White House. White House. 

2 You never met with the State Department? 

A Only time I ever saw them uas the day of a vote* and 



uNWSsro 



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NAME ■■ 
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2 172 
2 173 
2 17i« 
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2177 
2178 
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2 181 
2 182 
2183 
2 1814 
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2 186 
2187 



HIR224000 



UNCUSSIFIED 



PAGE 89 



I never was sure who they were. 

2 Do you remember a meeting on April 17, 1985 uith 
Oliver North, yourself, Rob Ouen, Frank Gomez and Rich 
Hiller at 1^30 m the morning? 

A No. I don't have any recollection. 

2 Why would such a meeting be indicated on Oliver 
North's calendar? 

A Probably because it took place. I said I have no 
recollection of it. I don't swear it didn't take place. I 
3ust don't have any recollection of it. 

2 If a meeting took place between Oliver North and 
yourself, Rob Owen, Frank Gomez and Rich miller m the White 
House ? 

A In th« White House? 

2 Yes. 

A No. 

2. Would such a meeting have taken place somewhere 
else ? 

A It could hava . 

2 Whar« would it have taken place? 

A It could have taken place in my town house. It 
could have taken place in Rich Hiller's office. But it did 
not take place in the White House. 

2 You don't remember such a meeting ever occurring? 

A No. And I think I would have. I think I would 



UNCLASSinED 



329 



NAME 
2188 
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2 190 
2 19 1 
2 192 
2193 
2194 
219S 
2196 
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2198 
2 199 
2200 

220 1 
2202 
2203 
220U 
2205 
2206 
2207 
2208 
2209 
2210 

221 1 
2212 



HIR22'4000 



have remembered that. 



UNCLASSIFIED 



PAGE 90 



2 Do you remember a meeting on May 30 at U o'clock-- 
A Are we still in '85? 

2 Ue are still in •8S--with Trent Lott and Pat 
Buchanan and yourself uith Oliver North' 
A No. In '85? 

2 In 1985, May the 30th. Do you remember a meeting 
with Trent Lott and Pat ichanan? 

A Yes, but not until '86. This doesn't ring a bill 
at all Later on, yes. but not in '85. 
2 Ue may have the year mixed up. 

A Excuse me a minute. I an not going to talk to 
anybody. I will be right back. 
(A short recess was taken. ) 

MR. OLIVER: Let's go back on the record. 
BY MR, OLIVER: 
2 You don't recall a meeting in May of 1985 with 
Trent Lott and Pat Buchanan and yourself? 
A Ho , I do not . 

HR. COSTON: And Oliver North? 
MR. OLIVER: And Oliver Horth? 
THE WITNESS: No. 
BY MR. OLIVER: 
2 Or without Oliver North? 
A No. 



UNCLASSIFIED 



330 



NAME ■■ 
22 13 
22114 
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22 16 
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2222 
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2234 
2235 
2236 
2237 



HIR22U000 



mm\m 



AGE 9 1 



2 You said that you had receptions at your toun house 
in 1985 after the vote? 

A I think I did. I had one in '86 after the vote. 

2 Do you remember, uould June 19th have been an 
approximate time? 

A Yes. it sure would have. 

2 In 1985? 

A My recollection is the members of that team and 
some others, of that coalition team, that I had a reception 
and invited the contra leadership and invited some 
Congressmen. That is my recollection. I don't have a 
record of it. but that is my recollection that that is what 
ue did and it would have been a natural thing to do. 

2 Do you remember meeting a Father Tom Oowling at 
that reception? 

A At that reception? No. I seem to remember meeting 
him later than that. 

2 You don't remember whether he came to that 
reception? 

A No . 

S Aft«r the vote in 1985 did this coalition that you 
had built, sort of then disburse and there was no other 
activity for a period of tine? 

A I wouldn't use the word disburse, counsel. 

2 They still stayed m town? 



MNOussra 



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226 1 
2262 



HIR22'*000 



UNCLASSIFIED 



PAGE 92 



It ceased to be active. Ue felt like for a short 



time there we could get back to other business. 

2 So you didn't have any raore strategic meetings? 

A No . 

2 When did you begin to think in terras of the vote in 
1986? 

A In late '85, then business. 

S Did you have--did any neetings take place to discuss 
the strategy for 1986? 

A The sessions for breakfast continued, renerober, 
because they were not contingent upon Central America. 

2 That was the American Security Council breakfasts? 

A That was about the only brainstorming place that ue 
would generally meet and discuss movement. I don't remember 
any formal planning sessions during that five month period 
in there. It could have happened, but I don't remember 
them . 

2 So do you remember coming back together late in 
1985 with this coalition to start to put it back together 
again? 

A I cannot put a finger on the date at all. I 

remember that we began to coma back together for obvious 

t 
reasons, ^o seek further aid and the possibility of actually 

being able to achieve military aid began to become viable in 

late '85. 



uNWssro 



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2287 



inmsim 



HIR22U000 ^* '^^'"lUlJIf f PIf P*'^^ '2 

2 Were there any new additions to your group m 1985, 
late '85, early '86. who hadn't been involved in '85? 

A PRODEKCA began to play a more active role and they 
began to become a separate center group. We called them the 
missionaries to the Democrats because it was kind of an 
assumed thing. PRODEHCA had a great many good contacts on 
the Democratic side. Some of the PRODEHCA people were quite 
close to HcCurdy and his group, so PRODEHCA began to emerge 
as a more important player than they had been before, and 
during that period, from then on, when it came to working 
With anyone eKcept the Boll Weevil type Democrats, and we 
considered them virtually all on the decided list anyway, 
that became more and more the role separately of PRODEHCA. 

2 I would like to go back for just a moment to 1985. 
You indicated in 1985 IBC, you had hired IBC as your public 
relations firm? 

A Right. 

KR . COSTOK: By you you are referring to Gulf and 
Caribbean? 

HR. OLIVER: Gulf and Caribbean Foundation? 
MR. COSTON: Yes. 

HR. OLIVER: Our records indicate that in 1985 Gulf 
and Caribbean Foundation received just under SIM. 000 from 
IBC. Why would Gulf and Caribbean Foundation receive 
payments from IBC. 



llNCUSSintB 



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2310 

231 1 
2312 



HIR22U000 



iiNcussra 



PAGE 9U 



THE WITNESS: Here ue go. counsel. 

MR. COSTON: The frustrating thing about this 
eKercise is to have to say it tuice, one to the Senate and 
once to the House . 

THE WITNESS: Your figure is not correct, and 
♦14,000 is not correct, and I have ended up with a lousy 
neuspaper article that ue have had to call the lawyers and 
' Wi» e — »*-t-e** , almost sue there because of that. 

BY MR. OLIVER: 

2 Could you eKplam to ne why these ? 

A Counsel, let ree vent my spleen for :ust a moment, 
all right? In 1986--by the way, the committee voluntarily 
has the entire file even including pictures of what I am 
fixing to tell you. 

MR. COSTON; You will find it in document CH-050t3. 
CH-0S36U . 

THE WITNESS: When I mention the name of the case 
you are going to remember it. The prosthesis case. You 
probably heard of it now that I say it. 

BY HR. OLIVER: 
S All right , yes . 

A What you have there is very incomplete. That is 
only one of the two checks. We had guaranteed a prosthesis 
manufacturer m Miami, working with a Dr. Gonzalez. Ue had 
guaranteed there being able to complete the manufacturing of 



UNCLASSIFIED 



334 



NAME ■■ 
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231U 
231S 
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2318 
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HIR224000 



UNCLASSIFIED 



PAGE 95 



prostheses for some contra uho were in the hospital in El 

V 

Salvador. The prostheses were manufactured in riiami and the 
doctor was a Cuban- American doctor, uho was supervising this 
and donating his time. The money was to come from an 
overseas source and we guaranteed it in personal phone calls 
with Dr . Gonzalez . 

By the way, the whole file is on record, even 
including the pictures of the amputations and all that 
business . 

So over a period of appcoKinately four or five 
months, we paid a bill for *1U,000 some odd dollars. That 
was about «13,000 of that was around prostheses, some of it 
was for travel . 

In eaily fall, we paid another bill for «6 or 
«7,000, a total of ♦2 1 some odd thousand. In each case, ue 
were reimbursed with a cashier's check from a Cayman Islands 
account to pay invoices that we had guaranteed so that they 
could be finished with a Dr. Gonzalez in Miami. This was 
the Prosthesis case. 

2 So you received «21,000 from IC , Inc. in the Cayman 
Islands? 

A I did, yes. I didn't know until months later who 
it came from because the first check I got did not have an 
acknowledgement. It was simply on Barkley's Bank and it 
said nothing about I.C.. The second payment, which we had 



UNCUSSIHED 



335 



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2362 



HIR224000 



UNtLASSra 



PAGE 96 



made, was put into ray file by Pis. Powell and again paid, and 

until this whole thing came out in I think February 

MR. COSTON: February of '87. 

THE WITNESS: Yes. We had all of our records and 
there was a little note on the end of the second check that 
said I.e., that we have been instructed by I.C. or NOINTEL. 

MR. COSTON: You have a copy of that document in 
the materials and the Senate has had it for months. 

MR. OLIVER: I see that. I wasn't really asking 
about the payments from I.e., Inc. I was asking about 
payments from IBe to the Gulf and eaiibbean Foundation. 
THE WITNESS: ibc to Gulf and earibbean? 
BY HR. OLIVER: 
S Yes. Fifteen hundreo' dollars on January 23, 1985, 
a thousand dollars on February 12, 1986. 
A IBC? 
2 Yes. 

A That is not correct. 

2 You never received--would they have been reimbursing 
you for rent ot expanses of some kind, oi telephone bills? 
A He paid them money. They didn't pay us any money. 

It has got to be either 

2 Hayb* it is a typo. Maybe it should be to IBC then 
m '85. 

A It has to. Oh yes. 



UNCLASSIFIED 



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236S 
2366 
2367 
2368 
2369 
2370 
2371 
2372 
2373 
2374 
2375 
2376 
2377 
2378 
2379 
2380 
2381 
2382 
2383 
2384 
2385 
2386 
2387 



HIR224000 



UNCUSSIHED 



PAGE 97 



2 How rauch did you pay them in 1985, do you remember? 

A Oh, probbly «1S,000 or thereabouts. I am :ust 
guessing . 

2 Then this might be, should be to instead of irora? 

A I thought you uere 

2 This IS a reconstruction. I am glad you cleared 
that up . 

X would lik« tc isk you abut soma indications 
from--that are based on excerpts from Oliver North's 
notebooks about meetings with you. 

A All right. 

2 Do you remember a meeting on Harch 31, 1984 with 
General Gorman and you and Oliver North? 

A Yes. That is what I mentioned to you before. 

2 That was the first meeting? 

A Okay, within two days before that would have been 
the first time I ever met Oliver North. That is the ' 



Gorman meeting. That is the date. Now I know exactly when 
I met Oliver North. 

8 That was based on the Salvador pricing thing? 
A On the Salvadoran weapons thing. That is the first 
time I have known exactly when X met Oliver North. 

MR. COSTON: Assuming his notebook is accurate. 
THE WITNESS' Assuming his notebook is accurate and 
X am not sura soma parts of his notebook are accurate. 



ifumssiFiB 



337 



NAME ■• 
2388 
2389 
2390 

239 I 
2392 
2393 
2394 
2395 
2396 
2397 
2398 
2399 
2400 

240 1 
2402 
2403 
2404 
2405 
2406 
2407 
2408 
2409 
24 10 
24 1 1 
2412 



HIR224000 



UNCUSSIHED 



PAGE 98 



BY riR. OLIVER: 



2 On the 24th of May did you receiva a phone call 
from Oliver North about a trip involving an air fare of 
about «2S00 in 1984' Do you recall that? 

A You say about a trip? 

2 Yes, a tup to someplace for S2S00f, an air fare 
was «2500. A discussion with you? 

A No . 

HR. COSTON: In 1984' 
MR. OLIVER: 1984. 
BY HR. OLIVER: 

e Do you renembet discussing with him any 
humanitarian organization or changing the name of any 
organization for any purposes? 

A I am try ing--counsel , I an trying to put this m 
context m my mind of that date, and that time, and uhat uas 
going on at that time and I am having a little difficulty 
even putting it into context. But can you go on down your 
list a little bit and let me see if I can bring it into 
focus ? 

2 SOBtt of these are v6ry--his notes are not always 
coapleta sentences . 

A I can understand part oi it. 

2 That is why I am trying to reconstruct f^om some of 
these notes, but you don't recall that at the moment? 



KIASSW 



338 



MAHE : 

2U13 

2mu 

2U 1 S 
24 1 6 
2417 
2U 18 
2419 
21420 
2U21 
2>422 
2>423 
2t42>« 
2U25 
2U26 
2U27 
21428 
2U29 
2(430 
2131 
21432 
21433 
2U314 
21435 
21436 
2437 



HIR2214000 



No . 



UNCLASSIFIED 



PAGE 99 



2 All right. Do you recall a meeting, Oliver North 

calling you or you calling hire and someone named Vaughn 
arranging help for a foundation m July of 1985? 

A Vaughn? Ho. 

2 Uould that have been Vaughn Forrest? 

A I don't know hin . Doesn't ring a bell even. 

2 You don't know Vaughn Forrest. 

A No sir. 

2 Did you ever discuss a freedom ball or liberty ball 

in 198U with Oliver North? 

A No sir. 

2 Did you ever discuss in July of 1985 any assistance 
for Eden P^ora, expenses for Eden Pastora with Oliver 



North? 
A 
2 



Ho sir. What year are you in? 

I an in July of 1984. 

HR. COSTOH: You said '85. 

HR. OLIVER: I am sorry. I meant "84. 

THE UITHESS: Goodness no. 

BY HR. OLIVER: 
Q Do you recall a man named Montenegro, Montenegro? 
Was that the Salvadoran defector? 
A I think so. 
2 And Frank Gomez? 1984? 



UNCLASSIFIED 



4 



339 



HIR22U000 



UNCUSSIFIED 



PAGE 100 



NAME 

2438 A It IS too early. 
21439 2 All right. 

2<440 A The name Montenegro rings a bell, but that is all. 

2441 and it is too early to have had anything to do with the 

2<4'42 o ther issue . 

2'»U3 C Now, did you--you remember a meeting with Oliver 

2141414 North on the 5th of Februry 1985 about bringing together 

2'4itS these 15 groups for the Central American Coalition? 
2'4U6 A I remember such a meeting. I have no idea who was 

2'4i47 there, but I remember that we certainly had such a meeting 

2U'48 to discuss the coalition. This was about the time that I 

2U149 mentioned to you earlier. I have no idea whether Oliver 

2U50 North was at that meeting. 

2U51 S Do you remember where the meeting took place? 
2452 A I think that meeting took place at PRODEHCA . 
2U53 2 Do you remember establishing some subcommittees 

auSM related to this coalition? 
21455 A No, I do not. 
2t456 2 Do you know a man named Lou Lattarman? 

2457 A No. 

2458 2 Do you know Chris Hanion? 

2459 A I mat him several different times where he would be 

2460 an obsarvaz ovat at tha American Sacurity Council. I don't 

2461 remember being with him in any other meetings. 

2462 2 Ha wasn't involved in any of your coalition 



iiNcussiro 



340 



NAME 
2463 
2464 
2465 
2466 
2467 
2468 
2469 
2470 
247 1 
2472 
2473 
2474 
2475 
2476 
2477 
2478 
2479 
2480 
2481 
2482 
2483 
2484 
2485 
2486 
2487 



HIR224000 



activities ? 



llNKUSSro 



PAGE 1 1 



A Mo. He was over on the Senate side you remember, 
and virtually everything ue did uas on the House side. 

Q You worked only on the House side^ 

A Primarily, because of the circumstances. 

2 Do you remember discussing with Oliver North an 
interview that had taken place with Senator Lugar? 

A No. 

S Do you remenber discussing Senator Lugar or Senator 
Lugar 's position with Oliver Nortji, on contra aid m 1985? 

A Sir, I don't remember^enator Lugar's position on 
contra aid was avttr m question at any time. 

2 Did you aver meet with Hax Friedeisdorf related to 
the 1985 contra aid? 

A No sir. 

2 On the 4th of March in 1985 there was an occasion 
of a call from you to Oliver North that had to do with going 
to see Lugar's staff and something about Hamilton's staff 
canceled. Would that have been related to the council 
meeting ? 

A Yes. Lugaz, we did not get to see Lugar on that 
visit. 

2 And Hamilton's staff counsel had canceled? 

A No. We saw Hamilton. Hamilton's Intelligence 
Committee staff had had to cancel. We did not get to see 



UNCLASSIRED 



341 



NAME 
2U88 
2489 
2U90 

249 1 
2492 
2493 
24914 
2495 
2496 
2497 
2498 
2499 
2500 

250 1 
2502 
2503 
2504 
2505 
2506 
2507 
2508 
2509 
25 10 

251 1 
2512 



HIR224000 



UNCUSSIFIED 



PAGE 102 



them Renieraber a while ago I said I wasn't quite sure about 
that' Hamilton's committee staff had to cancel, but 
Hamilton did see hira. 

e And you called Oliver North to tell hira these 
things ? 

A Probably. 

2 Did you have any discussion with any discussion 
with Oliver North in early 198S about private funding for 
the contr as ? 

A No sir . 

2 Uare you aware of any solicitation of assistance 
from Third Countries? 

A No sir . 

Q During that period of tina? 

A Never . 

2 Do you reraanber a meeting on the l&th of April, a 
short meeting with Oliver North, yourself, Jonathan Miller. 
Rich Miller and Rob Owen? 

A No sir. 

2 You don't recall such a meeting taking place? 

A I an sure such a meeting with those characters, 
that set of characters, never took place. 

2 Did you ever discuss with Oliver North a protest at 
the Nicaiaguan Embassy? 

A No sir. 



UNCUSSIHED 



342 



NAME 
2513 
25 114 
25 1 5 
25 16 
25 17 
2518 
25 19 
2520 
2521 
2522 
2523 
252U 
2525 
2526 
2527 
2528 
2529 
2530 
2531 
2532 
2533 
2531* 
2535 
2536 
2537 



HIR22U000 



UNCUSSIFIED 



PAGE 103 



2 Did you euer discuss with Oliver North an Op Ed 
piece signed by all the leaders, the Triple A, as they are 
referred to, all the leaders of the Democratic Resistance' 

A I could have discussed such an Op Ed piece after 
the fact, not before the fact. 

2 Did you ever discuss with Oliver North a plan ItiaC 
from Robelo that involved the firing of Enrique Berraudez? 

A No sir. 

L 

2 Did you ever meet Bob Kagifn? 
Yes . 



In what context did you meet Bob Kag;ui' 

He would sit in on sone of the larger meetings. 



That meeting over at PRdTEHCA that I mentioned, he was at 
that meeting speciiically , and ha would sit in on some 
meetings to kind of comment on the State Department point of 
view . 

2 These ware the strategy naatings, coalitions? 

A In '86 when wa got into the larger group. See, 
the small group of about seven, seven or eight, was a 1985 
phenomenon only. That group expanded and we began. 
Eenaabai. a kind of joint operation between the PRO^EnCA 

group for the Democrats and so forth, and at those meetings 

t 
at least onca ot twice, Kag'^n was dafinitaly there. 

2 And thasa maatings whan you ware discussing the 

vote m 1986, not 1985. 



UNCUkSSIHED 



343 



NAME 
2538 

2539 
2SU0 
25U 1 
2542 
2543 
2544 
25US 
2546 
25147 
2548 
2549 
2550 
2551 
2552 
2553 
255U 
2555 
2556 
2557 
2558 
2559 
2560 
256 I 
2562 



HIR22U000 



UNCLASSIFIED 



PAGE loy 



A That IS correct 

Q Uhen you say the larger meetings, this uas a 
separate group from the one that met at your town house' 

A That IS right. See, the town house meetings were a 
1985 event only. That group became a much larger group uith 
a lot more dimensions and ray toun house wasn't big enough to 
have such meetings in my toun house in '85. I don't recall 
ue ever had a meeting of 'hat group in the toun house. 

2 Did you chair the larger group too? 

A No, I did not. And I don't remember uho did. 

2 Would it have been Richard Miller? 

A Oh no. Ha uas not a player on this scene. 

2 Who uere the players in the legislative evaluation 
strategy? 

A I uould think that--my recollection is that whoever 
uas hosting kind of acted as a moderator more than a 
chairman. I continued to report to the group primarily on 
the movement of the Republicans and conservative Democrats. 
The PROT^EHCA Group were almost totally responsible for the 
quota ' ' tha HcCurdy Group and company.'' You uell knou uhat 
I am talking abut. 

2 Yas , yes sir . 

A It is my tacollaction ua pratty much had parallel 
cooperating joint reports. I don't remember one person 
actually being tha king of the group. 



\mtmsw 



344 



NARE 
2563 

256U 
2565 
2566 
2567 
2568 
2569 
2570 
2571 
2572 
2573 
25714 
2575 
2576 
2577 
2578 
2579 
2580 



HIR22M000 



UNCLASSIFIED 



PAGE 105 



2 Well, hou.raany people participated in the larger 
group ' 

A I remember that it uas as many as 15 people. 

2 And Rich Miller uas one of the people uho attended 
those meetings? 

A He uould attend but I don't recall his ever 
participating . 

2 And Spitz Channell? 

A Once or tuice . fty earlier recollection of meeting 
Spitz Channell uas at such a group. 

2 Dan Conrad? 

A I don't remember hin aver being at one of those. 

2 Bruce Cameron? 

A Yes, Bruce uas there. 

2 And uhat uas Bruce's 

A Bruce uas the missionary to the Democrats. He uas 
the Democrat that reported on--uell, he just had very good 
intelligence, Bruce did. 



UNCUSSIRED 



345 



NAME 
2581 
2582 
2583 
25814 
2585 
2586 
2587 
2588 
2589 
2590 

259 1 
2592 
2593 
2594 
2595 
2596 
2597 
2598 
2599 
2600 

260 1 
2602 
2603 
26014 
2605 



HIR22U000 



DCHN STEVENS 



#t\>ss^^* 



PAGE 106 



fi Were you aware that he uas being paid by Spitz 
Channell ? 

A No , I uas not . 

2 Uere you auaie that PRODEMCA uas receiving money 
from Spitz Channell? 

A No . I uas not . 

2 Uas Peter Flaherty involved in these groups? 

A Yes. , 

Q And you have already mentioned Bob OM^en uas 
participating . 

A Yes. 

C Did Elliott Abrans ever attend any of those 
meetings ? 

A Not in my presence . 

2 Did you ever hear of him attending any of those 
meetings ? j J 

A Not those meetings. Bob ri^tftyn was there in his 
stead. I cannot swaar that some tine, some place, a meeting 
took place that I was not there but I think I would have 
heard it. 

2 Did Oliver North attend any of those meetings? 

A Kot that I recall. 

2 Did anyone from the White House attend any of those 
meetings ? 



iifimim 



346 



NAME 
2606 
2607 
2608 
2609 
26 10 
26 1 1 
26 12 
26 1 3 
26 lU 
26 15 
26 16 
26 17 
26 18 
26 19 
2620 
262 1 
2622 
2623 
262U 
2625 
2626 
2627 
2628 
2629 
2630 



HIR224000 



uNtussra 



PAGE 107 



A There could aluays have been somebody there from 
the Office of Public Liaison. That could have been there 
and I wouldn't even have known who they were so I cannot say 
there was not a presence there, but there was not an active 
presence the re . 

2 Lynn &o- uohef ^Mar ticipatad in 1986? 

A Yes. 

2 And Sara Dickens? 

A Sara Dickens was not a part of this group because, 
reraeraber, Sara Dickens is not part of any lobbying 
organization . 

2 In late 1985, did you neet or becorae aware of the 
involvement of David Fischer and Martin Artiano in the 
Central Araerican freedom plan? 

A No . 

2 Did you ever raeat David Fischer or-- 

A I met David Fischer probably for the first time 
probably in lata spring of 1986. 

2 What was the occasion? 

A X just met him over at IBC . 

S Uh«n was the first meeting in 1986 that you recall? 

A I think it was the date that you mentioned, the 
maetlng I said I thought was at PRODEKCA. Check back on 
that date. I balieva that is it. You have better accurate 
records than I have in my mind. 



uNcussm 



347 



UNliLAb^iritU 



NAnE : 

2631 
2632 
2633 
263M 
2635 
2636 
2637 
2638 
2639 
26>40 
264 1 
26U2 
26U3 
26UU 
2645 
26146 
2647 
2648 
2649 
2650 
2651 
2652 
2653 
2654 
2655 



HIR224000 PAGE 108 

2 The date is on the record. 

A That would have been pretty much the kick off of 
the I986-- 

a Eabruary of 1 985 . 

A 1986. 

e 1986. 

Now, did Bob or Adan Goodman ever attend any of 
those meetings? 

A No, sir. 

2 Were you auara of the fact that Spitz Channell had 
retained the Goodman agency to do television ads? 

A I became aware of it a little later than that. 

2 When did you become aware of it? 

A Probably lata February or March. 

2 Did you discuss with Rich Miller or Spitz Channell 
the districts in which those ads should be run m order to 
influence the vote? 

A At a later date, yes. I first started my 
discussion with them on basic semantics and content of their 
ads the previous year. The coalition had had some serious 
problems with badly constructed and badly run commercials 
that actually did more harm than good. 

e These were also run by Spitz Channell? 

A No, no. I don't know anything about what Spitz 
Channell did in 1985. I hadn't met the man. I don't know 



mUkSSW 



348 



NAME 

2656 
2657 
2658 
2659 
2660 

266 1 
2662 
2663 
26614 
2665 
2666 
2667 
2668 
2669 
2670 

267 1 
2672 
2673 
2674 
2675 
2676 
2677 
2678 
2679 
2680 



HIR22U000 



"Ncussm 



PAGE 109 



he even existed . 

2 Who ran the ads in 1984? 

A I can't remembec uhich group it was. I remember 
specifically that there was a Congressman in Ohio that uas 
turned off so badly I had to go see him. Now, because of 
that and because of my discussions on that. I uas asked 
strictly as a volunteer to look at some language and some 
ads to give my opinion of the semantics, which I did. 

Q Uho asked you to do that? 

A Rich Miller asked ne to do that for the ads that 
Goodman uas doing for Channell . So I went over story boards 
and went over actual language for him ]ust sitting there m 
the office. I said, look-- 

S Who uas present at that meeting? 

A It uould have been Channell and Miller and probably 
one of the Goodmans. 

Q And that uould have been in-- 

A This uould have been as early as March. 

fi Of 1986. 

A Right. This uas the first time that I had ever had 
any sort oi relationship uith any of the Channell 
organization . 

S Did Channell mention to you hou much money they 
intended to spend on these ads? 

A I think he probably did. They were big numbers, I 



UNCLASSra 



349 



NAME 
2681 
2682 
2683 
268U 
2685 
2686 
2687 
2688 
2689 
2690 

269 1 
2692 
2693 
269U 
2695 
2696 
2697 
2698 
2699 
2700 

270 1 
2702 
2703 
2704 
2705 



HIR22<4000 



UNCUSSIFIEU 



AGE 1 10 



reraenbet. lots of money being spent on advertising at the 
time. The earliest advertising I saw, of course, did not 
mention specific legislation. They were what I would almost 
call institutional type ads. They mentioned the cause, but 
there was never mention of a vote and things like that. 

But my whole mission with these people was to be 
sure that they were not counter '-productive with the very 
people I was trying to help sail. 

2 Do you remember Spitz Channell holding a press 
conference in early 1986 indicating that they were going to 
spend several million dollars to run television ads to try 
to influence the vote on contra aid? 

A Yes , sir . 

fi That was prior to th« time that you met with him; 
is that correct ? 

A That is correct. 

S Did you aver inquire as to what source of funds 
were for these ads? 

A I don't recall. 

2 You never said to Rich niller or Spitz Channell who 
is going to pay for all this? 

A Well, I knew the name the National Endowment for 
the Preservation and Liberty and they were a fund raising 
organization. I knew they were running ads. This was not 



ray concern. 



*MMte 



350 



UNCLASSIHED 



NAME' HIR22U000 UllULnUUII IkV PAGE \\^ 

2706 I hav« never been in the iund-. raising business and 

2707 my nam concarn from day one was to be sure that the ads did 

2708 the job that they hoped they would do and not just the 

2709 opposite . 

2710 2 When you discussed with Spitz Channell and Rich 
27 11 Hiller and Adam or Bob Goodman the districts in which the 
27 12 ads should be run, did you suggest that these ads be run in 
2713 the districts where the/ uould have some affect on the vote? 
27114 A Certainly. 

2715 C Did you provide^ them with a list? 

27 16 A Wall, remember everybody in town has got the same 

2717 undecided list. Remember also that there are certain things 

2718 that are vary obvious that you do and don't do. For 

2719 instance, thara is not a single undecided vote in the LA 

2720 area. Why run ads in the L.A. area? 

2721 There hasn't been an undecided vote there for 

2722 years. So I said you are wasting money to run ads there. 

2723 Where are the undecided votes? Okay. Can you make a good 
272'4 media buy in those towns? Can you cover that district with 

2725 any sort of madia? I± you are going to do this, put it 

2726 Hhaia it is supposed to ba dona. 

2727 2 So you indicated which Congressman ware in that 

2728 mazginal suing area? 

2729 A Everybody knew that. I had my undecided list, but 

2730 Rich Hiller also had one ha got from somewhere. Everybody 



Mussiro 



351 



NAME 
2731 
2732 
2733 
273U 
2735 
2736 
2737 
2738 
2739 
27140 
27U 1 
2742 
27143 
271414 
2745 
2746 
27U7 
2748 
2749 
2750 
2751 
2752 
2753 
2754 
2755 



onmsim 



HIR224C00 ^' * VL/1|J|1I| iril ?tiOt 112 

in toun has one, an undecided list. There are no secrets 
there . 

As I say, the other side uses exactly the same list 
that--each side uses the same list. So the targetting of 
individual d is tr ic ts- - f or instance, when I first started 
looking at somebody's list they uould have Hiarai in there 
I said uhy in the world are you running an ad in Miami? 
There is not an undecided vote in the area. Again, this 
type thing . 

2 Did you review the story boards on the ads that 
were going to be run against Hike Barnes? 

A Mo, I did not. I saw them, but I did not review 
them. I had nothing to do with them. 

2 But you saw the ads? 

A Yes, I saw them. 

2 Here you aware that the choice of Mike Barnes as a 
target for these ads was related to the fact that he was in 
the Washington area and that these ads would be seen in 
effect by all 535 Members of Congress? 

A Yes. 

2 Did you discuss that strategy with Channell and 
Miller or Goodman? 

A I didn't discuss it. I said it was probably a good 
idea. 

2 Because you could get them all at one sitting? 



UNCIASSIHED 



352 



MAME ■■ 
2756 
2757 
2758 
2759 
2760 
2761 
2762 
2763 
276U 
2765 
2766 
2767 
2768 
2769 
2770 
277 1 
2772 
2773 
27714 
2775 
2776 
2777 
2778 
2779 
2780 



UNCIASSIHED 



HIR22'4000 IIIUI_I II^Xini"ll PAGE 113 

A You could let everybody knovT uhat the ads look 
like. This is a common practice, by the way. in any sort of 
emotional, philosophical- type issue, to run ads here so 
everybody can see them. 

2 So It was not Dust Mike Barnes that was targetted . 
It was the whole Congress and Hike Barnes just happened to 
be the fellow in the adjacent district who was against 
contra aid? 

A That IS exactly correct. 

2 So It was an effort to sort of make an example of 
Hike Barnes in terms of what kind of-- 

A Mot to make an example of Hike Barnes m that 
sense. Why do people run ads in the Washington Post? 
Because they want the entire Congress to see the ad. not 
because they are targetting six Congressmen in this area. 
Because they want the entire Congress to see the ad. A full- 
page ad in the Washington Post is run for exactly the same 
reason . 

2 So you are aware that they were running the Hike 
Barnes ad to have an impact on the whole Congress. 

A Right. 

2 And that they selected 10, 11 other Congressmen in 
particular districts to have the ads run who were m effect 
swing votes . 

A Yes. 



iiNtmsro 



353 



HIR22>4000 



UNCLASSIFIED 



PAGE 1 1 4 



KAME 

2781 2 And that list uas agreed upon by you and Rich 

2782 Miller and Channell and Goodman? 

2783 A There were two different, entirely different story 
278U boards for those ads. I considered the Mike Barnes ad--and 

2785 this uas my advice to thera--as being counterproductive other 

2786 than right here. My advice to there uas don't run that ad 

2787 against any Congressman if you ever expect to get his vote 

2788 because you uon't. 

2789 That uas ray advice. By the uay , they did not take 

2790 ray advice on some of those and they did not get a single 
279 1 vote uhere they ran that ad. 

2792 Nou, there uas a diffeiant type ad uhich did not 

2793 have the strong language, did not have the heavy language 

2794 that uas run in some districts that, if you can judge by the 

2795 vote, proved to be productive. 

2796 2 A different kind of ad? 

2797 A Yes. It named the Congressman but it uas not 

2798 something to raise the emotion. 

2799 2 Uas this the ad that said ua aia m search of tuo 

2800 votes? 

2801 A Ho, no. That uas in 1985. 

2802 Q That uas the 1985 vote. 

2803 A I know nothing about what they did in 1985. I know 
280U zero. I didn't know they even ran ads in 1985. I heard 
2805 that much later. 



UNCUSSIFIED 



354 



HIR224000 



UNCLASSIFIED 



PAGE 1 1 5 



NAME 

2806 2 Was there a discussion in addition to the 

2807 television campaign of other campaign style activities that 

2808 uere designed to influence the vote? 

2809 A No. 

2810 e Do you know a man named Jack Lichens tein? 

2811 A I have met Jack Lichenstein. He came to ray office 
2312 once, maybe twice, with a program that I never considered 
2813 even looking at. 

28114 2 What was the program? 

2815 A Sir, it was very easy to forget. 

2816 2 Was it a directmail program? 

2817 A I don't think so. 

2818 2 Uas it a grass roots organizing program? 

2819 A Not in the sense that I consider grass roots. I 

2820 simply don't remember the details of his program. I 

2821 remember I was not interested enough in it to ever take part 

2822 m It or even advise him on it. I don't remember that his 

2823 program, if I may be so presumptuous, uas worth my 
282U attention. 

2825 2 What about Edie Fraser? Were you aware of Edie 

2826 Fraser's activities a part of this effort m 1986? 

2827 A Mo. 

2828 2 Do you know Steve Cook? 

2829 A No. 

2830 2 I would like to enter this as Exhibit number 3 and 



UNCUSSIFIED 



355 



NAME ■■ 
2831 
2832 
2833 
2834 
283S 
2836 
2837 
2838 
2839 
2840 
2814 1 
28U2 
2843 
28UU 
2845 
2846 
2847 
2848 
2849 
2850 
2851 
2852 
2853 
2854 
2855 



UNCUSSIFIED 



HIR224000 lllMlal H.l.lll II II PAGE 116 
ask you to mark this exhibit and ask you to look at this 
latter, which is from Spitz Channell to Rich Pliller, dated 
April IS, 1986. 

[Exhibit No. 3 was marked for identification. 1 
BY HR. OLIVER: 

2 Have you had a chance to eKanine this letter? 

A Yes. Certainly I have never seen the letter 
before. My impression is-- 

2 My question is that letter indicates that there was 
some kind of financial arrangement between Spitz Channell 
and the people who are listed on page 2 and there seems to 
be an instruction from Channell to Miller to tell these 
people, these subcontractors, that there will be no more 
financial assistance forthcoming bacause the vote will have 
taken place on this particular day. 

My question to you is had you been receiving or had 
you received any financial assistance from Rich Miller or 
Spitz Channell during that pariod of tine? 

A No. You will notice that this really is a two-part 
latter. Ha says, plaasa convey my smcara thanks to 
avaryona. I had given the story board advice earlier and 
tha first actually contract that I aver had with any 
Channell organization was not until June. I received a 
payment of 45,000 from Sentinel voluntarily. They called 
and asked us to bill then and I specifically asked that it 



UNCUSSIHED 



356 



BNCUSSIfe 



NAME: HIR22'4000 ^'VVkniJIJII II II PAGE 117 

2856 be done through S«ntinel because even any presumption of 

2857 possible lobbying with the money. That uas their lobbying 

2858 organization, but that uas without a contract and that was 

2859 not until June. 

2860 2 The letter says, ''please call the following 

286 1 business and individuals and notify then that the program 

2862 has ended and retstate that all financial arrangements 

2863 between the National Endowment for the Preservation of 
286U Liberty and them are terminated as of tonight.'' 

2865 A He had no financial arrangements. 

2866 2 Do you know of the financial arrangements that any 

2867 of the other individuals on this list had? 

2868 A Let me sea the list. 

2869 2 --with the National Endowment for the Preservation 

2870 of Liberty or the National American Trust? 

287 1 A I don't know who Artiano and Cook are. At that 

2872 time I knew nothing about David Fischer. I know who Edie 

2873 Fraser is. I never knew he had a relationship with Edie 
287U Fraser. I know who Bob and Adam Goodman are. I knew Jack 

2875 Lichenstain. I never knew he had a relationship with him or 

2876 Penn Keable or the UNO office until it was revealed in the 

2877 hearings. 

2878 2 Your testimony was you had no financial arrangement 

2879 with Spitz Channell until June of 1986? 

2880 A Arrangement two different times, once with Gulf and 



UNCLASSIRED 



357 



NAHE ■ 
2881 
2882 
2883 
28814 
2885 
2886 
2887 
2888 
2889 
2890 

289 1 
2892 
2893 
289U 
2895 
2896 
2897 
2898 
2899 
2900 

290 1 
2902 
2903 
2904 
290S 



HIR22H000 



"immu 



PAGE 118 



Caribbean and one with rae direct. They called and said ue 
want to make a contribution after the fact of services 
already rendered without any discussion whatsoever that I 
was going to get paid for it. 

They called rae up somewhere around like April and 
said we want to make a contribution to the cause. Do you 
want it to come to you or do you want it to come to Gulf and 
Caribbean ? 

I said send it to Gulf and Caribbean. They need 
the money, which they did. It went from 501(c)(3) group to 
another. This was some time in the spring of 1985. 

I don't remember the exact date. At that time the 
only thing we had dona was give advice on things like the 
story boards. Kow. because of my presence on the Hill on 
the issue, I lust felt like that I better be squeaky clean 
and get some lobbying money from then if they were going to 
give us money. So they offered to give us, to pay us some 
more money. 

I said let's call it lobbying. I will register to 
lobby for your lobbying organization. Sentinel. They gave 
us S5,000. 

After the vote was over, for the first time ever I 
had a one-to-one meeting with Spitz Channel; we met and 
discussed a personal consulting axrangenent between Spitz 
Channell and ne which ue completed and it was simply a 



wmsw 



358 



NAME ■■ 
2906 
2907 
2908 
2909 
29 10 
291 1 
2912 
2913 
29 14 
2915 
2916 
2917 
2918 
2919 
2920 
2921 
2922 
2923 
2924 
2925 
2926 
2927 
2928 
2929 
2930 




HIR22U000 IIIUI.I ll\.XILILII PAGE 119 
political consulting aFrangeraSiWVetueen Spitz Channell and 
mo uhich took place some time around June. 

2 And there was a contract? 

A Right, there was a contract. In late fall or early 
winter that contract was expanded. 

MR. OLIVER: I would like to have this document 
entered as exhibit M and ask you to look at that. Would you 
please let the reporter mark the exhibit. 

[Exhibit No. 4 was marked for identification. 1 
THE HITMESS: That is the June contract. Now, that 
was after the vote, totally after the vote on contra aid 
took place . • 

BY HR. OLIVER: 

2 For the record, this exhibit U is a memorandum to 
Spitz Channel for the National Endowment for the 
Preservation of Liberty from Dan Kuykendall, re 
confirmation of consulting arrangements between Spitz 
Channel and Dan Kuykendall dated June 10, 1986, signed by 
Carl Russell Channell and Dan Kuykendall. Were you aware at 
the time that the National Endowment for the Preservation of 
Liberty was a 501(c)(3) organization? 

A Yes. 

Q And did you feel that it was proper for a lobbying 
company such as yours to have a contract with a 501(c)(3) 
for political consulting? 



UNCLASSIFIED 



359 



MAKE : 

293 I 
2932 
2933 
29314 
293S 
2936 
2937 
2938 
2939 
2940 

294 1 
29U2 
2943 
29U14 
29U5 
2946 
2947 
2948 
2949 
2950 
2951 
2952 
2953 
2954 
2955 



HIR224000 



ONCUSSIFIED 



PAGE 120 



Sir, 75 percent of ray business is done on 



consulting, not lobbying. I ara a consulting as uell as a 
lobbying firm. This is not for lobbying. Later on in the 
year when lobbying began I specifically asked that money 
that carae to rae come from Sentinel and it is a matter of 
record. I took the initiative each ^«« — that I thought it 
uas appropriate . 

2 What kind of consulting did you do based on this 
particular contract for the National Endowment for the 
Preservation of Liberty? 

A This uas at the beginning of a planned SDI program. 
I think the vary first thing we did on this program was sit 
down and go over with Finkalstein th« make-up of the poll, a 
very great, in-depth survey that they ran for SDI, which 
proved to be a very fine document that Finkelstein r'^n I 
helped him put that together. 

I helped hm select I think 36 congressional 
districts that I thought would be typical of the entire 
United States to give a true picture of the entire Nation 
with 36 districts. 

I helped him select those. Now, counsel, that is 
what I consider to be consulting. The selection of these 
districts had nothing to do with lobbying. 

It had to do with their feel on an issue to get a 
good picture of the Nation. 



UNCLASSIFIED 



360 



NAME : 
2956 
2957 
2958 
2959 
2960 

296 1 
2962 
2963 
2964 
2965 
2966 
2967 
2968 
2969 
2970 

297 1 
2972 
2973 
29714 
2975 
2976 
2977 
2978 
2979 
2980 



HIR22'4000 



UNCLASSinED 



PAGE 121 
So the fj.tst project that ue got into--reraerabe r . the 



contra issue had gone by than. It uas over with as far as 
ue were concerned. , and tor the next three months our entire 
attention was on SDI. 

flR. OLIVER: I would like to enter this document 
dated May 5th, 1986 as Exhibit nunber 5. 

(Exhibit no. 5 was marked for identification. ! 
BY MR. OLIVER: 

2 This is a letter dated May 5, 1986 from Dan 
Kuykendall to nr . Dan Conrad regarding an agreement for 
consulting, research and resource information from the Gulf 
and Caribbean Foundation. I would like to ask you to 
examine that. 

A This was the first agreement that we made until I 
decided that it was not proper and I changed this request to 
Sentinel from the Kuykendall Company and that is the way it 
came out and that is a matter of record. 

2 you received a »5,000 contribution? 

A Gulf and Caribbean did not receive it and it did 
not come from the Kational Endowment. It came to the 
Kuykendall Company from Sentinel. 

2 A *5,000 check was given to you? 

A Yes. 

2 And your letter says this sum covers our advisory 
and consulting contribution to the contra aid effort for the 



UNCLASSffl 



361 



NAME 
2981 
2982 
2983 
298U 
2985 
2986 
2987 
2988 
2989 
2990 

299 1 
2992 
2993 
299U 
2995 
2996 
2997 
2998 
2999 
3000 

300 1 
3002 
3003 
30014 
300S 



HIR224000 



remainder of 1986 



liNcussro 



E 1 22 



A That IS right. I reviewed that, decided it was not 
proper, decided I didn't uant to do it that way and I asked 
for a different approach. 

HR. COSTON: For the record, we provided a document 
dated June 2, 1986, which was an invoice that superseded the 
document you just identified. 

MR. OLIVER: Thank you, counsel. 

I would like to enter as exhibit number 6, this is 
a raemorandun to Spitz Channel from Dan Kuykendall dated June 
10, 1986. It contains a monthly budget for the Gulf and 
Caribbean Foundation. 

[Exhibit no. 6 was narked for identification. 1 

BY HR. OLIVER: 
2 I would like you to look at that document and tell 
rae what that was all about. I ask you to tell me what that 
was about . 

A Spitz Channel at one tiiia had requested rae to see 
if there was any possibility of his having a relationship 
With the a^¥»i Gul± and Caribbean Foundation. He asked me 
for a budget of the Gulf and Caribbean Foundation^ which I 
gav« to hill. Shortly after this he approached rae about the 
id«a of virtually--and I say '• virtually ' ' because we never 
allowed it to go far enough to know what it really 
raaant--acquiring the Gulf and Caribbean Foundation. 



unuLhooii ii^u 



362 



NAME : 
3006 
3007 
3008 
3009 
30 10 
30 1 1 
30 12 
30 1 3 
30 lU 
30 IS 
30 16 
30 17 
30 18 
30 19 
3020 
302 1 
3022 
3023 
30214 
3025 
3026 
3027 
3028 
3029 
3030 



HrR22i4000 



UNCLASSIFIED 



AGE 1 23 



He wanted our list of members for one thing. Ue 
turned hini down completely and did not even consider any 
sort of merger, formal or informal. So this went no further 
and was not even considered by the board. 

2 You indicated that your agreement uith the National 
Endowment for the Preservation of Liberty was expanded m 
the late fall or early winter of 1986. 

A It was not early winter. I think it was late fall. 
S What was the purpose of the expansion of that 
agreement ' 

A He wanted more of my tine. 

2 In December of 1986? 

A Earlier than that. I think it was. 

HR. OLIVER: I would like to ask the reporter to 
mark this as Exhibit number 7 and indicate for the record 
that this is a communication from the Kuykendall Company to 
fir Spitz Channell dated December 22, 1986, for a fee due 
for services rendered for December 1986, in the amount of 
»12,000 and ask you to look at that document. 

[Exhibit no. 7a was marked for identification. I 
THE WITNESS: That is correct. 
BY HR. OLIVER: 

C What were the services that you rendered to the 
National Endowment for the Preservation of Liberty in 
December of 19867 



miASsra 



363 



NAHE 
3031 
3032 
3033 
303U 
3035 
3036 
3037 
3038 
3039 
30U0 
3014 1 
3042 
3043 
3044 
30U5 
3046 
3047 
3048 
3049 
3050 
3051 
3052 
3053 
3054 
3055 



HIR224000 



UNCUSSIFIED 



PAGE 124 



A You have somewhere in your records, I assume, a 
contractual breakdown on our array of services itemized 
Now that list uould--here it is. 

Counsel, would you like to review this yourself 

HR. OLIVER: Let the record indicate that Mr. 
Kuykendall has supplied us with a document which I would 
like to have marked as Exhibit number 8. 

MR. COSTOH: You have a copy of this. 

MR. OLIVER: Maybe I have a copy. Let's see if I 
can find one here. 

HR . COSTOM: Let's go off the record. 

I would like to have this marked as Exhibit number 
8. 

MR. COSTOH: For th« record, the last one was 
Exhibit 8; is that correct? 

Could we have this one marked 7b so the two 
exhibits are considered together, 7a and 7b rather than 7 
and 8? 

MR. OLIVER: That is fine. 

[Exhibit no. 7b was marked for identification. 1 

HR. OLIVER: The document which was dated March 6. 
1987, is termed the final arrangement between the Kuykendall 
Coapany, Dan Kuykendall, and Spitz Channall and his various 
organizations . 

THE WITNESS: That is the same arrangement that we 



mukssro 



364 



UNCLASSIFIED 



Hkni: HIR22I4000 Ul llJL.ri%#WII *i^*^PAGE 125 

3056 had arrived at virtually and maybe nothing but a verbal 

3057 agreement as early as around December 1. 

3058 Bi HR. OLIVER; 

3059 2 I would like to ask you, Hr . Kuykendall. why that 

3060 arrangement was not put m uriting until March the 6, 1987' 

3061 . A Sir, I think that arrangement is in writing in 

3062 other documents. I believe you have this m other 

3063 documents. This was a r fineraent of it, but I think ue have 

3064 that m other documents. 

3065 Q Why was a refinement made in March of 1987? 

3066 A I don't remember why it was rewritten at that time. 

3067 Hy recollection is that his counsel asked for it because 

3068 there was an arrangement on record with exactly the sane 

3069 amounts of money. 

3070 2 Was this the amount of money that had been paid to 

3071 you by the Spitz Channell organization? 

3072 A Yes. Since I believe there was a November figure 

3073 at that level. I am not certain. But now sometimes we got 
30714 more than one check from the Channell organization, 

3075 depending on whether X felt like that I was exposed to 

3076 lobbying restrictions during that period. 

3077 If I felt like I had dona anything that could be 

3078 construed under the law as lobbying during the mc n e y , I 

3079 would ask them for a separate check from Sentinel. 

3080 2 When did this arrangement, what period of time did 



UNCUSSIFIED 



365 



NAME ■ 
3081 
3082 
3083 
308U 
3085 
3086 
3087 
3088 
3089 
3090 
309 1 
3092 
3093 
3094 
3095 
3096 
3097 
3098 
3099 
3100 
3 10 1 
3102 
3103 
310<4 
3105 



HIR22U000 



this arrangement covet? 



UNCLASSIFIED 



PAGE 126 



A The ♦12.000 a month arrangement uith vaiious 

i 

configurations of the 12,000 lasted for appr oKiraate 1 y six 



Beginning when? 

Beginning either November 1st or December 1st. 

1986? 

1986. Tha 3500 a month iigura preceded that up to 



months . 

2 

A 

2 

A 
that time . 

2 Did you receive monthly fees of «12,000 m 
November, December of 1986, January, February and March of 
1987? 

A Well, tha checks uere seldom ;ust for «12,000. 
They uere sometimes I would get a check for half that from 
Sentinel. Sometimes I would get no money form Sentinel 

So tha 12,000 total was tha same, counsel, each 
month. Who it cama from varied according to my instructions 
based on uhathar or not I detarnined that I had done 
anything that could be construed as lobbying under the House 
rules . 

2 Hou much money did you receive from tha Channell 
organization based on this arrangement total? 
Under tha total life of it figura-- 

A Have you got something to write with? Write this 
down and add it up. You have got a law degree, not a math 



UNCUSSIHED 



366 



NAME 
3 1 06 
3107 
3 108 
3 109 
3 110 
3111 
3 112 
3 113 
3 114 
3115 
3116 
3 117 
31 18 
3119 
3 120 
312 1 
3 122 
3123 
3 124 
3 125 
3126 
3 127 
3128 
3129 
3 130 



HIR22U000 



degree . 



UNCLASSIflEO 



PAGE 127 



2 I ais willing to do anything to move this along. 
A Do four months at 3500 and eight months at 12.000 
That ought to be it. 

2 That IS «1 10 , 000 . 
A That IS about right. 

2 You received »1 10,000 from the various Channell 
organizations ? 

A Correct . 

Beginning in November of 1986? 

No. Beginning June. 

June of 1986. 



With that first contract you sawf 



And running through when? When did you receive 
your last payment? 

A We terminated I think Hay. 

2 May of this year? 

A Yes. Nou, let me remind you that this was not a 
normal consulting arrangement in the fact that I billed in 
arrears. I normally bill in advance for consulting. In this 
particular client, I billed in arrears instead of in 
advance . 

It is the only client I have ever had that I did 
that, but I did this. 

2 You billed in arrears for what period of time? 



ONCUSSIFIED 



367 



NAME ■ 
3131 
3132 
3 133 
3 1 34 
3 1 35 
3 136 
3137 
3 138 
3 1 39 
3 lUO 
3 lU 1 
3 142 
3143 

3 mu 
3 ms 

3 146 
3 147 
3 148 
3 149 
3150 
3 15 1 
3 152 
3153 
3154 
3155 



HIR224000 



iinmsim 



AGE 128 



The whole time , 



2 Beginning in June of 1986 until May of 1987? 
A Correct . 

2 And could you break down how much money you got 
from each of these different entities? How much came from 
Sentinel, how much came from NEPL and whether any came from 
any of the other Channell organizations? 

A Counsel, if you wished us to do a separate 
accounting on that, I can furnish it for you. I can't do it 
at the time . 

tlR. COSTON: Let me make a couple of record 
observations first. You had asked first for the prior 
agreement. Ue have located a document turned over to you 
dated Movember 7, 8, document CH0S47U, which is the $12,000 
retainer and should be in your pile of material. 

And, second, as far as a breakdown of Sentinel 
versus NEPL payment we have already provided documents 
showing bank receipts from June of 1986 through April of 
1987 that break down the NEPL contribution and the Sentinel 
contribution and that breakdown is found on the deposit 
slips . 

HR. OLIVER: Could we go off the record for Dust a 
minute? 

[Discussion off the record. ] 

MR. OLIVER: Back on the record now, I would like 



wmM 



368 



NAME • 
3156 
3157 
3 1 58 
3159 
3160 
316 1 
3 162 
3163 
316U 
3165 
3166 
3167 
3 168 
3169 
3170 
3 17 1 
3172 
3 173 
3 1714 
3 175 
3176 
3177 
3 178 
3179 
3 180 




HIR22U000 ^'vuL/iooir/r// '*''' '" 

this set of documents marked as c>nribit number 8 Let the 
record indicate this series of documents contains details of 
the arrangements between the Kuykendall Company and 
Kuykendall and Spitz Channell and his various organizations, 
a letter dated September 29, 1986, to Spitz from Dan 
Kuykendall related to^ SDI initiative, a letter dated 
September 15, 1986, to Spitz Channel from Dan Kuykendall 
also related to the SDI initiative, a letter dated July 23, 
1986 from Dan Kuykendall to Spitz Channell related to the 
effort m the spring of 1985 to obtain military aid to the 
contras, and the effort m 1986 to obtain military aid to 
the contras. It also contains another copy of the June 10, 
1986 memorandum which was marked as an earlier exhibit. 
[Exhibit no. 8 was marked for identification.] 
BY HR. OLIVER: 

2 May I ask you, Hr . Kuykendall, to tell us what you 
did for Spitz Channell that was not related to the 
legislative efforts to obtain aid for the contras or support 
for the SDI program? 

A Hhen you are considered a consultant on a personal 
basis with Spitz Channell that means literally you are on 
call all the time. The first time Spitz Channell ever asked 
me to consider being a consultant to him, I specifically 
said what do you expect of me? He said I want the right to 
talk to you and ask your advice on issues constantly; and 



UNCLASSIFIED 



369 



KAHE HIR224000 



DNCUSSIflEO 



PAGE 130 



3 181 

3182 

3 183 

31814 

318S 

3186 

3187 

3 188 

3 189 

3190 

3 19 1 

3192 

3193 

319U 

3195 

3196 

3 197 

3 198 

3 199 

3200 

320 1 

3202 

3203 

3204 

3205 



that IS literally what it amounted to. day and night, seven 
days a weak, a phone call saying can ue meat or what do you 
think of this particular approach to public relations, what 
do you think oi this particular approach to an idea, uhat do 
you think about this particular approach to a newspaper or 
television program. 

I never took part in actually - m#» a i ng the 
material. He would invariably consult me. He considered me 
a pure consultant on ray opinions on virtually everything he 
did that had to do with these programs in the sense of the 
response that I thought that he could causa with the 
Congress in the sense of is it good language, is it bad 
language. Do I think it will be productive or 
counterproductive and this type thing. 

But we went into great depth in many cases of 
programs that most of them never surfaced. Most of them 
never became a program. But when ha said a personal 
consulting contract that is what it really meant, just that. 

Now, when the tima cama to expand upon it, we get 
into tha area of legislative status reports. We get into 
tha area of information retrieval and certainly you 
gantleman know what that means in tha sense hare, the normal 
ssrvicas givan by a full sarvica consulting firm. If they 
wanted to call up and say what is the status of such and 
such a bill, where is it, can you gat us tha record on the. 



UNCUSSIFIED 



370 



KAHE 
3206 
3207 
3208 
3209 
32 10 

321 1 
32 12 
32 1 3 

32 m 

32 1 5 
32 16 
32 17 
32 18 
32 19 
3220 

322 1 
3222 
3223 
3224 
3225 
3226 
3227 
3228 
3229 
3230 



HIR22'4000 



UNCUSSIRED 



PAGE 131 



debate on such and-such sometimes months or years ago, 
obviously we know how to do that. That is uhy the 
separation of these particular things here. The only part 
of this that I felt like must of course be very meticulously 
adhered to m the sense ue must always have enough money to 
cover It IS lobbying because the mix of the rest of it is 
irrelevant if you are giving a total service but the 
lobbying is the only one that is covered by law and it is 
the only one that is covered by a statute or legislation 
inside the House of Representativas . 

So the only one you know we varied from month to 
month is when I felt like that I could even possibly be 
criticized for not having dona that money with lobbying 
money . 

2 Did you bill Mr. Channell on a monthly basis' 

A Not on that. I don't bill anyone on an hourly 
basis . 

2 How did you communicate to him what account you 
wished to ba paid from? 

A Hall, tha only account I aver designated was 
Santinal because the rest of it is irrelevant to me because 
tha rest of it could hava coma from any one of the accounts. 
I didn't raally cara as long as it was not lobbying because 
everything alsa I did was straight consulting or things like 
information retrieval and this type thing was the services 



CNCUSX/Fe 



371 



KAHE : 
3231 
3232 
3233 
3234 
3235 
3236 
3237 
3238 
3239 
32140 
32U1 
32(42 
32143 
3214U 
3245 
32U6 
3247 
3248 
3249 
3250 
3251 
3252 
3253 
3254 
3255 



HIR2214000 



UNCUSSIFIED 



PAGE 132 



of an normal consulting firm. The only thing I felt like 
that I was concerned about and legally bound to be 
meticulous about was lobbying. For that reason, I separated 
out lobbying money on any month that I had done anything 
that could be construed with any definition of lobbying. 

2 Mr. Kuykendall, in being meticulous in order to 
avoid taking money from the wrong pot-- 

A Right. 

2 --did you maintain records of this separation of 
activities, lobbying and consulting? 

A Remember, redundancy is okay. In other words, if I 
collect too much money for lobbying, there is nothing wrong 
with that. As long a I am under a lid for the entire 
organization for the month. I knew any money I had been 
this active or this active or this active, a little bit, 
medium or a whole lot, and I simply used a matter of 
judgment to be sure it was covered. 

My normal billing, if I were working by the hour, 
would probably be around ^00 to «125 an hour. I 3ust was 
certain that anybody checking back on me would find that I 
had collected enough money to cover my activities regardless 
of what they were. So, no, I didn't keep books. 

I was always redundant because I was on an agreed- 
upon total and everything I billed had to be within that 
total. So that was not important. 



KNCUSSm 



372 



MAHE ■ 
3256 
3257 
3258 
3259 
3260 
326 1 
3262 
3263 
326U 
3265 
3266 
3267 
3268 
3269 
3270 
3271 
3272 
3273 
3274 
3275 
3276 
3277 
3278 
3279 
3280 



HIR22'4000 



UNCUSSIFIED 



PAGE 133 



2 But you didn't bill on a monthly basis. 

A Yes, I billed on a monthly basis. 

2 You did bill on a monthly basis? 

A Oh, yes . Yes . 

2 Did you bill separate organizations, one time you 
would bill Sentinel, another time you would bill National 
Endowment for the Preservation of Liberty? 

A Yes. No, no. I called the bookkeeper at the end 
of every month. 

2 Uho was the bookkeeper? 

A Dan Conrad, and told him how I wanted the checks 
issued . 

2 Were the checks issued sometimes, would there be 
two checks, one from Sentinel-- 

A Yes. Many times. It is all in there. I suppose 
half the time I got two checks. 

2 Well, if a check came from KEPL in 1986 that was 
related to lobbying, how did you deal with that knowing that 
they were a 501(c)(3)? 

A I did not get any checks from NEPL relating to 
lobbying in 1986. I was careful not to do that. 

2 On July 23, 1986, there was a letter to Spitz 
Channell, attention to Steven HcHann. a consulting fee for 
July of 1986, and in the amount of »3800 and then there is a 
note saying that charges for mailgrams will appear on the 



uHCUSsro 



373 



NAHE 
3281 
3282 
3283 
32814 
3285 
3286 
3287 
3288 
3289 
3290 
329 1 
3292 
3293 
329(4 
3295 
3296 
3297 
3298 
3299 
3300 
3301 
3302 
3303 
33014 
3305 



HIR22M000 



UNCUSSIFIED 



PAGE 134 



August bill. What were the raailgraras that were referred to 
in that letter? 

A Those were invitations to a reception. 

2 For? 

A The celebration of the victory in June. 

2 Wouldn't you consider that as related to lobbying' 

A That was a rainbuzsement for expenses I didn't 
get any money. That was not ray money. That was 
instructions from Spitz Channall for me to ask if I would 
send the mailgram and I sent them and billed hira for it. 

And, by the nay, it was after the fact on a piece 
of legislation anyway. The legislation was over with. So I 
am giving you two separata answers here. I think either one 
of them are adequate. In tha first place, you can't lobby 
an issue that is already passed. 

2 But you can be billed m arrears? 

A No, no. This was for an event that took place well 
after the vote . 

2 ^o calabrata tha victory? 

A Right. 

2 You don't consider that part of the lobbying 
effort? 

A Ko, sir. That is my first answer. 

Tha second answer that was a reimbursement for 



money I had spent. 



miAssra 



NAME ■■ 
3306 
3307 
3308 
3309 
3310 

331 1 
3312 
33 13 
33 m 
3315 
3316 
3317 
3318 
3319 
3320 

332 1 
3322 
3323 
3324 
3325 
3326 
3327 
3328 
3329 
3330 



HIR224000 



liNCUSSIflEO 



PAGE 135 



2 When did you receive your first check from 
Sentinel ? 

A Around June 5th or something like that of 1986. 
That IS a pretty good guess. It was June Sth, 1986. 

2 The checks that you received from NEPL were not 
related m any way to that lobbying effort? Is that your 
testimony ? 

A No . 

2 Could I ask you other than the charges related to 
the prosthesis matter that ue talked about earlier, you 
received no other checks from I.e. Inc.? 

A It would have had to be a correction of a 
bookkeeping error or something like that which I am assuming 
you are not covering. Never would I.C. have had any reason 
to pay us any money and never did they pay us any money. 

2 Our records indicate that in 1986 the Kuykendall 
Company received S20,113 from NEPL. The Gulf and Caribbean 
Foundation received «10.000 from NEPL. 

A I told you that was a contribution. 

2 That was a contribution? 

A To Gulf and Caribbean from NEPL that was made in 
1986 as a voluntary contribution. 

2 What was the puipos« of it? 

A Remember my going over with you, counsel, earlier, 
that I had been asked to give them some services on 



UNCLASSinED 



375 



Hknt HIR22'4000 



ONcussra 



PAGE 136 



3331 

3332 

3333 

333U 

3335 

3336 

3337 

3338 

3339 

33U0 

3341 

3342 

3343 

33U14 

33U5 

33U6 

3347 

3348 

33U9 

3350 

3351 

3352 

3353 

33514 

3355 



consulting on their story boards and everything uhich I did. 
voluntary with no bill and no remuneration. Somewhat later, 
I don't remember the dates that you have there, ue received 
a phone call. We uish to compensate you for services for 
what I had previously done. They said who do you want it to 
go to . 

B Who did you receive a phone call form? 

A I think Dan Conrad. I am not certain, but that is 
probably who it was. He said who, and I said make the check 
out to Gulf and Caribbean. 

2 There was no written solicitation of a 
contribution? 

A No , Sir . 

8 Was thara an indication on the check that it uas a 
contribution? 

A I don't remember. 

2 Your checks from Sentinel in 1986 were dated--this 
is to Kuykendall, dated July 21, September the 10th and 
December the 12th, 1986, in the amounts of »3500, »1803 and 
»6000 respectively for a total of »1 1,303, according to our 
records . 

A From Sentinel. 

Q rtoB Sentinel. Sentinel was the lobbying 
organization; is that correct? 
A Right. Correct. 



UNtUSSW 



376 



KANE ■■ 
3356 
3357 
3358 
3359 
3360 

336 1 
3362 
3363 
33614 
3365 
3366 
3367 
3368 
3369 
3370 

337 1 
3372 
3373 
3374 
3375 
3376 
3377 
3378 
3379 
3380 




PAGE 137 
etueen July 21, 1986, 



HIR22U000 

2 What were -you lobbyinc 
and December the 12th, 1986? 

A I visited with various Members oi Congress to 
discuss the SDI program. If someone had been uatchmg me or 
listening to rae , they could have construed that as lobbying 
because there was possible SDI legislation coming up. 

2 Was there any SDI legislation pending during that 
period? 

A It never did come up. Some votes that would have 
possibly taken fs^ce never took place. I don't remember 
specifically what it was, but there was a continuing 
resolution that there was going to be some SDI money in it. 
It didn't ever happen. 

2 Do you remember any particular Congressman you 
talked to about SDI? 

A Sure. But I was on the Hill and I was active. 
This IS a matter of ray own conscious and my own sense of the 
legal, and if I wished to be redundant on that, that is a 
hell of a lot better than being deficient. 

2 Did you register as a lobbyist for Sentinel at the 
time that you received or prior to the time you received 
payments ? 

A Shortly after. I registered as lobbyist for 
Sentinel. I believe, in January. 

2 Of? 



UNCLASSIFIED 



377 



NAME HIR22L1000 



OiiASSIflED 



3381 
3382 
3383 
338U 
3385 
3386 
3387 
3388 
3389 
3390 

339 1 
3392 
3393 
339U 
3395 
3396 
3397 
3398 
3399 
3400 

340 1 
3402 
3403 
3404 
3405 



PAGE 138 
I think It was the first quarter after, I 



A Of 1987 
am not sure 

2 You first payment uas in July of 1986' 

A I registered to register to lobby for thera a little 
bit later . 

2 And your second payment uas m September? 

A Right. 

2 Those uere both in the third quarter? 

A Yes . 

2 You did not register until the first quarter of the 
following year? 

A That is correct. 

2 Did you register as a lobbyist for any of the 
activities that you were involved m on the contra aid vote' 

A Well, I was registered to lobby for the Kuykendall 
Company, that is me . I was registered to lobby for the 
Kuykendall Company on n-***9«r- Kational Security. 

You will see Kuykendall Company has Dan Kuykendall 
listed as a lobbyist and even if it is my own company, I 
registered to lobby for that in other issues, too. 

2 But you did not lobby for contra aid. You did not 
register as representing any other organization, even at 
this tiiia or individual or othar than the Kuykendall Company 
during the period of time in 1986 that you were lobbying for 



contra aid 



UNCLASSIFIED 



378 



NAHE : 
3406 
3U07 
3408 
3409 
34 10 
34 1 1 
3412 
34 1 3 
34 14 
341S 
34 16 
34 17 
34 18 
34 19 
3420 
342 1 
3422 
3423 
3424 
3425 
3426 
3427 
3428 
3429 
3430 



HIR224000 



ONCL/iSSIFlEO 



PAGE 1 39 



A I registered to lobby for the Gulf and Caribbean, 
but as far as actual physical lobbying is concerned, in 1986 
uould have been the only period that I could have been under 
them because I drew no money from Gulf and Caribbean until 
the first of June or July of 1985. That uas after the 1985 
program uas over . 

So I registered to lobby for Gulf and Caribbean 
back m 1985. 

I routinely register to lobby for all my clients, 
whether I lobby or not. For instance, I represented the 
"Jir^fi " T 1 1 n jir-mrTny I never went on the Hill, but I 
registered for them. 

2 You were registered to lobby for the Gulf and 
Caribbean in 1985 and 1986? 

A Right. fly partner those. That is the reason I 
have to look at then. 

e Isn't the Gulf and Caribbean Foundation a 
501(c)(3)? 

A Yes . 

2 Aren't 501(cJ(3) organizations prohibited from 
lobbying ? 

A No, they are not. 

2 Hhat were you lobbying for on behalf of the Gulf 
and Caribbean Foundation? 

A As far as I know, I did no legal lobbying for the 



BNMSm 



379 



wume 



NAHE: HIR22U000 ^'■^•Wvll ILIJ P*GE 140 



3U3 1 
31432 
3433 



Gulf And Caribbean Foundation. But I could have spent ten 
percent of their total gross for lobbying under the 
regulation . 



m.m\m 



380 



NAHE 

3143U 
3U3S 
3436 
3437 
3438 
3439 
3440 
344 1 
3442 
3443 
3444 
3445 
3446 
3447 
3448 
3449 
3450 
3451 
3452 
3453 
3454 
3455 
3456 
3457 
3458 



UNCLASSinED 



HIR224000 mill. I ilAAiririi PAGE 141 
DCHN KOEHLER 

2 But you didn't? 

A I did not. But I could have. 

2 You were registered as a lobbyist but didn't. 

A Yes. 

2 You were not registered to lobby for any of the 
activities related to the contra aid vote in 1986? 

A Yes, I uas for Gulf and Caribbean foundation and I 
was registered to lobby--and I could have, but did not, but I 
uas registered to lobby for the Kuykendall Company. 

2 But the Gulf and Caribbean Foundation is a 501 C 3 
and IS It your statement they axe permitted to lobby for 
contra aid as a 50 1 C 3? 

A Yes, sir. The ao-1 
that out. 

2 What IS the stated purpose in the charter of the 
Gulf and Caribbean Foundation of that corporation? 

A Education. 

2 On what subject? 

A Hatters of national security. I can't--I'ra not 
certain . 

2 Did you report any expenditures during that period 
of time related to lobbying on behalf of the Gulf and 



___ j_tj.£AX. hearings clearly spell 



UNCUSSIRED 



381 



NAHE 
3U59 
3460 
3U6 1 
3U62 
31463 
3464 
3U6S 
3U66 
3467 
3U68 
3U69 
3U70 
3U7 1 
3472 
3473 
3474 
3475 
3476 
3477 
3478 
3479 
3480 
3481 
3482 
3483 



HIR224000 



wmsim 



PAGE 142 



Caribbean Foundation? 

A Ho. As far as I was concerned. I did nothing that 
uould be considered as lobbying for the Gulf and Caribbean 
Found a tion . 

2 So ray question again is. then you did not report 
any expenditures or register to lobby on behalf of contra 
aid in 1986; is that correct? 

A That's right for the Gulf and Caribbean Foundation. 
I registered for the Kuykendall Company. 

Q Was the Kuykendall Conpany reirabursed for lobbying 
in 1986? 

A No . I own the Kuykendall Company. I could have 
3ust as well done it as a private citizen and not registered 
at all. 

2 Did you report any expenditures by the Kuykendall 
Company on behalf of lobbying for contra aid? 

A I would have to look at my records. I don't know. 
I'm a sole owner of the company, so and it's not a 
corporation. It's an individual ownership. 

2 I would like to ask you, if I might, about the 
differences in the amounts of these checks and why they 
differed from time to time. The first check from NEPL to 
the Kuykendall Company was for »5f000 and you have testified 
that It was for general consulting for Spitz Channell; is 
that correct. 



UNCUSSIHED 



382 



NAHE ■■ 
3U8U 
3485 
3486 
3U87 
3U88 
3489 
3490 
349 1 
3492 
3493 
3494 
3495 
3496 
3497 
3498 
3499 
3500 
3501 
3502 
3503 
3504 
3505 
3506 
3507 
3508 



HIR224000 



UNCLASSIFIED 



PAGE 143 



A The first check? 

£ In June of 1986. 

A It was from Sentinel for *5i000. You are looking 
at the bills, not the checks. That's the bill I told you I 
changed entirely. 

2 Originally you received a check from NEPL? 

A I never received the check. I changed the entire 
billing . 

2 Your testimony is that that »5^000 check was from 
Sentinel and not from NEPL and that was for lobbying? 

A Right. 

2 In June of 1986 you received that check. You uere 
lobbying at that time on behalf of contra aid for Sentinel? 

A I had previously-remember this was all retroactive 
billing, okay? This was retroactive. I had previously done 
some things that, depending on whose definition of lobbying 
you use, and as you know, sir, there are several around, 
that could have been construed as active lobbying. For that 
reason, I asked that that check come from Sentinel. 

2 Did it originally come from NEPL? 

A No, it did not. 

2 It originally came from Sentinel. That was one 

A That is correct. 

2 That was for lobbying for a period of covering what 



check . 



UNCLASSIFIED 



383 



NAHE : 

3509 

35 10 

35 1 1 

35 12 

35 13 

35 lU 

3515 

35 16 

3517 

35 18 

3519 

3520 

3521 

3522 

3523 

352U 

3525 

3526 

3527 

3528 

3529 

3530 

3531 

3S32 

3533 



HIR22UOO0 



liNmsm 



PAGE 1 HU 



period of time? You said it was retroactive. 

A Advice for consulting everyone and resource 
information. That was what I put in the Gulf and Caribbean 
thing . 

2 I'm talking now about the »5)000 check. 

A Right. 

2 Wasn't that check to the Kuykendall Company or to 
the Gulf and Caribbean? 

A That check went to the Kuykendall Company from 
Sentinel . 

2 For lobbying. 

A For lobbying. 

2 On behalf of contra aid. 

A Yes. That was all-- 

2 For what period of time was that, did that check 
cover you lobbying activity? 

A Ue had no contract. This was an offer from the 
Channell organization to pay my company for services that I 
had given them voluntarily of »SaOOO. They voluntarily 
offered to give us that much money for services previously 
rendered . 

2 So previously rendered would go back to beginning 
February 1986 period? 

e 

A Whatever, yes. So I thXn determined after having 
changed my mind that I should get that check from Sentinel. 



m&mm 



384 



HIRZa^OOO 



UNCUSSIFIED 



PAGE IMS 



NAHE : 

353U 2 So this oheck covered lobbying for the first half 

3535 of 1986? 

3536 A Not formally, no. 

3537 2 For what period of time? 

3538 A There was no period. 

3539 2 The check was received in June of 1986. 
3SU0 A Right. 

35U1 2 That was the second quarter. 

35142 A Counsel let me make something clear here. I could 

35'43 as easily have gotten no check at all. This was voluntary, 

351414 all right? If I got a check at all from them, then I ceased 

35145 to be voluntary and. for that reason, I got it from their 

3546 lobbying company. 

35U7 2 I understand. My question, what's confused me here 

3548 He. Kuykendall-- 

35149 A I have no billing, I have no records, I have no 

3550 books. I thought the most honest and stiaight-tf oiwar d way 

355 1 to take it was to take it for lobbying instead of the 

3552 possible charge that I might have done some lobbying and not 

3553 gotten it--and have gotten it from the other organization. 
35514 2 I understand that concern. My question is, if that 

3555 was your concern at the time, why did you not register as a 

3556 lobbyist on behalf of Sentinel until the following year? 

3557 A It was an oversight. Ifr ■ .iS ~ an u w aLaig li k , 

3558 2 And the same thing would apply to all the checks 



MNtussra 



385 



NAME : 
3559 
3560 
356 1 
3562 
3563 
356U 
3565 
3566 
3567 
3568 
3569 
3570 
3571 
3572 
3573 
35714 
3575 
3576 
3577 
3578 
3579 
3580 
3581 
3582 
3583 



HIR22M00O 



UNCLASSIHED 



PAGE m6 



froi» Sentinel in 1986. All the reimbursements. 

A Right. But the checks that were received from 
Sentinel do not m anyway say that that much time on a 
billing basis was used iot lobbying. 
[Recess ior lunch at 130 p.m.) 
BY HR. OLIVER: 

2 Ml. Kuykendall, we were talking earlier about the 
money that you received ^rom Spitz Channell's entities m 
1986 . 

A Yes. 

2 You had indicated earlier, and I :ust want to be 
sure that I have this absolutely straight, you received a 
check from KEPL for «10,000 in March of 1986? 

A Gulf and Caribbean did. 

S And you sent the check back in December of 1986 

A Right. Right. 

2 Why did you wait so long to do that? 

A In the first place let me remind you, let .»c> give 
you a little preface and answer your question. Remember I 
had a choice where the check went in the first place. They 
asked me, do you want it to go direct or do you want it to 
go to Gulf and Caribbean. The 15th of December or 
thereabouts, our attorney called us and said you are a few 
dollars over on the allowable on major contributions on your 
501 C 3 status, okay? 



UNCLASSIFIED 



386 



NAHE ■ 
3S8U 
3585 
3586 
3587 
3588 
3589 
3590 
3591 
3592 
3593 
3594 
3595 
3596 
3597 
3598 
3599 
3600 
3601 
3602 
3603 
36014 
3605 
3606 
3607 
3608 




HIR22>4000 IllWItl U \ ^lf>IL II PAGE 1<47 

2 I'm not' clear about that.""Trs there a limit on-- 
A Yes. There's a formula uhich, by the uay, had 
changed and we didn't know it. 

MR. COSTON: You are not a lawyer, so you shouldn't 
offer a legal opinion. There isn't a limit. There is a 
difference between a private foundation and a public 
foundation. It turns in part on how many tax contributors 
you have and you should not disclose the advice of 
counsel--and it wasn't me, by the way--but you can indicate 
why the check was returned without getting into the detailed 
advice of counsel. 

THE WITNESS: All right. So I Simply returned the 
check and got a--let me get the order of things. I returned 
the check and af ter--inmediately they wrote checks to myself 
and two of my employees for the same amount of money exactly 
which we accepted as ordinary income and in turn, gave it 
back to Gulf and Caribbean. 
BY HR. OLIVER: 
Q Where did the checks come from to your employees? 
A MEPL. 

fi So HEPL wrote checks to you and to-- 
A And to two other people totalling «10,000. 
fi That was to Ric Marino. 

A And Elizabeth Powell and Dan Kuykendall. We were 
simply, in the spirit of the original intent of the 



UNCUSSIFIEP . 



387 



UNCIASSIFIED 



PAGE 1L|8 



NAME- HIR22M000 

3609 contribution, taking auay what would hava been a artificial 

3610 major contribution to be sure that ue were under the 

3611 percentage allowed, and it is not an official percentage. 

3612 It's kind of an administrative percentage. This happened in 

3613 the last five days of the year of ]ust adjusting that. 
36114 2 Contribution m March from NEPL to Gulf and 
36 15 Caribbean foundation was not related m anyway to the 

3616 lobbying activities? 

3617 A Ho, sir. Remember that was whan I told you they 

3618 called us and said you have been a help to us and talking to 

3619 us about all this media, and giving advice and so forth. Ue 

3620 want to make a contribution. Do you want it to come to your 

3621 company or do you want it to come to Gulf and Caribbean? 

3622 I had no idea at all at that time that this other 

3623 thing might have been a problem with the percentage of major 
36211 contributors. If I had known that, I woul<^ have taken it in 

3625 the first place and I didn't learn that until about late 

3626 December that that was a mistake to have taken it. 

3627 Q Did they believe or did they ever lead you to 

3628 believe at any time that they thought it was related in some 

3629 way to th« sacvices that you had rendered on behalf of 

3630 contra aid? 

3631 A Again counsel, let's all understand that oui only 

3632 reason for being on the Hill, and their only reason for even 

3633 existing at that moment, was contra aid, because that was 



UNCIASSIFIED 



388 



NAME 
363U 
3635 
3636 
3637 
3638 
3639 
36U0 
3614 1 
36M2 
36143 
36>4>4 
36(tS 
36146 
3647 
36148 
3649 
3650 
3651 
3652 
3653 
3654 
3655 
3656 
3657 
3658 



HIR224000 



UNCLASSIFIED 



PAGE 149 



the only issue before us. The question is not whether ue 
were trying to push contra aid. The question is whether ue 
were legally lobbying. Goodness sake, let's remember here 
that the United States Hous^ of Representatives voted for 
contra aid, ^ cast o^^Ml^ na^or ity of £hA vote for contra 
aid. and we have to assume every one of them made an 
intelligent decision based on his own information. •m^A.o go 
talk to a person hadr^wtt or to go through grassroots and try 
to tuist him, is my definition of lobbying. 

But to--for your information that does not either 
refer to a piece of legislation or a member of Congress or 
tell him hou to vote, I don't consider that lobbying. So, 
in the sense of what KEPL and I did together, we do not 
consider it was lobbying before the *10,000. See this was 
before any directed advertising had been done. 

2 If I may, I would like to submit two documents and 
have them marked as exhibits 9 and 10. 

[Kuykendall Deposition Exhibits 9 and 10 marked for 
identification. 1 

BY HR. OLIVER: 

e Th*s« exhibits are a bank statement from the Gulf 
and Caribbean Foundation on Republic Bank, Dallas, Texas, 
dated March 31st, 1986, and an accompanying letter, March 
12th, 1986 to Dan Conrad from Dan Kuykandall related to a 
«10.000 contribution to the Gulf and Caribbean Foundation. 



UNCLASSIFIED 



389 



NAME 
36S9 
3660 

366 1 
3662 
3663 
36614 
3665 
3666 
3667 
3668 
3669 
3670 

367 1 
3672 
3673 
367U 
3675 
3676 
3677 
3678 
3679 
3680 
3681 
3682 
3683 



HIR22U000 



nmssm 



PUCE 150 



The second exhibit is a check from the Gulf and Caribbean 
Foundation dated 29th of December, 1986 for «10,000 and a 
deposit m the Palmer National Bank is reflected on the 
back . 

I show you this letter, Mr. Kuykendall, and ask you 
to look at it. I would like to read the notation on the 
bottom of the page that says. ''This sura covers our advisory 
and consultation contribution to the contra aid effort for 
the remainder of 1986.'' My question to you is. what does 
that notation reaan and is that in your handwriting? 

A No, that's not my handwriting -aai^jthat's not ray 
handwriting . 

2 Do you know whose handwriting it is? 

A I think it's Elizabeth Powell's. After the 
contribution was nade to us. for their records Dan Conrad 
asked roe to write this letter in the area of consulting, 
research, and resource work, which is what I did. What it 
very caraiully lixtiliBi j lus is it is not lobbying. 

2 What was the contra aid effort in 1986 that was not 
related to lobbying that you ware involved in? 

A All of the HEPL institutional type advertising that 
does not qualify as lobbying is where I lead thera. This is 
all that w« got into up to this data. Tha lobbying ads were 
run later . 

2 In 1986 tha contra aid effort was pxinaxily 



UNCLASSIFIED 



390 



NAHE : 
368U 
3685 
3686 
3687 
3688 
3689 
3690 

369 1 
3692 
3693 
369U 
3695 
3696 
3697 
3698 
3699 
3700 

370 1 
3702 
3703 
370U 
3705 
3706 
3707 
3708 



iiNCussm 



A Counsel, I really wish you had read the testimony 
: r o ra the poi 



HIR22U000 Ulllll M.l.linr II PAGE 151 

directed at the votes uhich took place in Congress, isn't 
that correct? 

from the po^^mi*^! hearings. I'm sincere about this. 

2 I uill certainly go back and take a look at them 
after this deposition. 

A Please do. Because for something to be lobbying, 
there has to be a direct appeal for a vote on a given piece 
of legislation. There was no appeal for a vote on a given 
piece of legislation on any of the NEPL advertising. 

S This contribution was in narch of 1986. 

A Right. 

Q Prior to that time that any ads were run. 

A They ware institutional ads that had been going on 
for SIX months . 

2 Related to contra aid? 

A Yes 
contra aid. 

Q I understand that but I had thought that in our 
earlier discussion that you had indicated that these meeting^ 
related to contra aid started in January or early February 
oi 1986, and that your discussions with Richard riiller and 
Goodman and Channall came in Match of 1986. 

A Th« obsatvation and discussion of tha advertisement 
that had been praviously run. thay btoka off somewhere 



Aiding to contras may be duiibe i JlUd from 



mmm 



391 



KANE 
3709 
3710 
37 1 1 
37 12 
37 13 
37 m 
37 1 5 
37 16 
37 17 
37 18 
37 19 
3720 
372 1 
3722 
3723 
372U 
3725 
3726 
3727 
3728 
3729 
3730 
3731 
3732 
3733 



HIR22U000 




PAGE 152 



around, I would say, the 15th of of March, thereabouts, and 
started running directfuf advertising. In other words, they 
broke off and went from NEPL to the Sentinel on actually who 
paid for th« ads. This is clear in here that at that time 
It broke off . 

Raraeniber my telling you that m re tros pect--and 
everything on here is done in retrospect-- that that's the 
reason I asked for that Sentinel check was because there was 
a point there that thay started running lobbying ads. And 
even though all I did was advise there, it could have been 
construed as lobbying on ray part, and I chose to construe it 
as possibly lobbying on ray part, and that's the reason I 
asked for the Sentinal check. 

S Which you rec«ived in June of 1986? 
A Right. Renember everything I did for thera was 
previous, I mean, was billing after the fact. Even later, 
that's tha way it operated. At this time there wasn't any 
billing to it because thay volunteered m each case. But ray 
pattern throughout with then was knowing after the fact 
whether I did lobbying or not. 

8 This letter is to be considered an invoice at your 
raquast, tha text of at. 

A Thay asked me for it, for their records. 
2 But it is your testiaony that it is not related to 
the contra aid lobbying effort in 1986? 



iiNCUSsro 



392 



UNCLASSIFIED 



HAKE HIR22'4000 Iflllll HllllIB 31 IfAGE 153 

3734 A The »10,tlOO is not related to contra aid lobbying. 

3735 The «5l000, yes. That's the reason I separated them. 

3736 e I would like at this time if I may, Mr. Kuykendall. 

3737 to ask you some questions about one of the great puzzles of 

3738 our time and I would like to mark this as exhibit 11 and ask 

3739 the reporter to mark it. 

3740 [Kuykendall Deposition Exhibit 11 marked for 

3741 idenif ication . ] 

3742 BY HR. OLIVER: 

3743 Q I would like to identify exhibit 1 1 as the chart 

3744 with various boxes and designations that was found in Oliver 

3745 Korth's safe by the Tower Comnission and published as part 

3746 of the Tower Commission report. 

3747 I would like you to look at that chart, Mr. 

3748 Kuykendall, if you would. 

3749 it You have a copy in front of you? 

3750 -^' Yes. 

3751 A Uould you just like to ask me questions about it? 

3752 I know so little about the total chart I would remember, if 

3753 possible, if you would simply question ne about the chart. 

3754 fi Very well. Hr . Kuykendall, on the top line of that 

3755 chart I which contains six boxes there is a fourth box from 

3756 the left which indicates G and C Foundation. Is that Gulf 

3757 and Caribbean Foundation. 

3758 A I would assume it is, sir. 



UNCLASSIHED 



393 



mmiB 



KAHE HIR22U000 ---■—■■■■ iW */ 1 1 II Iff PAGE 15U 

3759 2 And why would that be on Oliver North's chart' 

3760 A First, you uould know it has no lines leading to or 
376t from it in any way. 

3762 MR. COSTON: Let me just interject something. I 

3763 assume you do not want Mr. Kuykendall to speculate and you 

3764 are asking hire for factual knowledge. The purpose of this 

3765 inquiry is to gather facts, not to gather speculation. Is 

3766 that a fair assumption? 

3767 MR. OLIVER: That certainly is a fair assumption 

3768 MR. COSTON: Your question is what does he knou 

3769 about the chart and does he knou why it was prepared. I 

3770 think that's a good place to start. 

3771 MR. OLIVER: That was my quastion. 

3772 BY MR. OLIVER: 

3773 A I do not know about tha chart. I do not knou why 

3774 It was prepared. 

3775 2 May I ask you about some of tha other organizations 

3776 on here. Going across from left to right, the first 

3777 organization is MEPL. 

3778 A Right. 

3779 2 You are familiar with that organization. 

3780 A Yes, sir, I an. 

3781 2 Wara you familiar with any of tha activities that 

3782 NEPL was engaged in other than those that ware directly 

3783 related to tha Gulf and Caribbaan Foundation, tha Kuykendall 



UNCLASSIFIED 



394 



NAME ■■ 
378U 
378S 
3786 
3787 
3788 
3789 
3790 

379 1 
3792 
3793 
3794 
3795 
3796 
3797 
3798 
3799 
3800 

380 1 
3802 
3803 
380<4 
3805 
3806 
3807 
3808 



HIR2214000 



DNCUSSIflffl 



PAGE 155 



Company, and to you personally? 

A The answer first, sir, is no and at this time I 
knew nothing about any of those organization^. 

2 Did you know that NEPL was paying substantial 
amounts of money to IBC, to Richard Miller and Frank Gomez? 

A At a much later date. yes. 

2 You did not know it at the time that IBC was on 
retainer to your company? 

A Oh, certainly not. 

2 Richard Miller or Frank Gomez never told you of 
their relationship with Spitz Channall? 

A No, sir. I knew they had a relationship. I did 
not know to what extent it was. I kneu that they had a 
relationship but it was strictly a public relations 
relationship working with Goodnan on advertising and things 
like that. That's the only relationship I was aware of. 

2 Were you aware of the next organization on that top 
line, which is ACT, which I assume it the American 
Conservative Trust. Here you familiar with then? 

A At that time. no. I later found out it was a 

2 Hhan did you find that out? 

A When I got that book. 

HK. COSTON: Uhich is when, about November of 80-- 



v'^ 



'^ 



THE WITNESS: This book, I got it in February of 



1987 , 



UNCLASSinED 



395 



HIR22U000 



UNCUSSIFIED 



PAGE 156 



NAHE 

3809 BY MR. OLIVER: 

3810 . 2 This IS the book that was prepaied for you by Spitz 
38 1 1 Channell ? 

3812 A Right. 

3813 2 --In early 1987? 
381U A Right. 

3815 2 The next box on there is the Institute for North 

3816 South Issues, I assume. It looks like NC . Uere you 

3817 familiar uith that organization? 

3818 A No. sir. 

3819 2 Did you knou that the principals in that 

3820 organization uere Frank Gomez and Richard Miller? 

3821 A I did not. 

3822 2 Uhen did you learn that Frank Gomez and Richard 

3823 Miller uere the principals m IC, Inc. in the Cayman 

3824 Islands? 

3825 A In probably January. 

3826 2 Of? 

3827 A 87. 

3828 2 1987? 

3829 A Yes. 

3830 2 Had you not received checks from IC , Inc. in 1986 

3831 related to the prosthesis matter that ue discussed earlier? 

3832 A Sir, remember my telling you in the testimony that 

3833 the first check I received did not have any mention of IC . 



UNCLASSIFIED 



396 



KAME : 
3834 
3835 
3836 
3837 
3838 
3839 
3840 
384 1 
3842 
3843 
3844 
3845 
3846 
3847 
3848 
3849 
3850 
3851 
3852 
3853 
3854 
3855 
3856 
3857 
3858 



HIR224000 



UNCLASSIFIED 



PAGE 157 



The second check 1 leceived was put m the bank by ray 
sacretaiy and I never had even seen the accompanying letter 
that went with it until January, and I uas not aware of who 
IC uas until later in January. 

2 With whom did you make arrangements for-- 

MR. COSTON: Could I also, the document, in fact, 
that you are referring to says Intel in any event not IC . 
THE WITNESS: You are right. 
BY riR. OLIVER: 

2 It was Intel Corp. later changed to IC or vice 
versa. I think. 

A That's right. Vice versa. You kept saying IC . 

S Were you aware Frank Gomez and Richard Miller were 
principals in Intel Corp.? 

A No . I was not. 

Q With whom did you make arrangements for those 
payments ? 

A Kith Dr. Gonzalez in niami. 

fi And Dr. Gonzalez, you asked Dr. Gonzalez-- 

A To tall me how much money was going to be required 
and when. 

2 Hy question is how did you make arrangements to get 
th« payments? 

A I called Richard Hiller and told him how much money 
I needed . 



UNCLASSIFIED 



397 



UNCLASSIFIED 



NAHE^ HIR2214000 " - PAGE 158 

3859 e And what did he tell your? 

3860 A Ha didn't tell rae anything In a feu days the 
386 1 check would come in. Actually it uas only two. reraeraber 

3862 One of then cane in a blank envelope The other one had an 

3863 announcement with it from Intel which I didn't see until 
386'4 probably February. 

3865 2 Did you inquire of Richard Miller after these 

3866 checks came in as to where or what their origin was? 

3867 A No. I did not. 

3868 2 Doesn't a 50 1 C 3 corporation have to report on its 

3869 990 forms the source of its contributions? 

3870 A That uas a pass -through . It uas a simple pass- 

3871 through. We guaranteed a bill and simply passed the money 

3872 right on through. 

3873 2 Did you put the money into your bank account? 
387U A Yes. 

3875 2 And then a check uas uritten? 

3876 A Right immediately. To keep from having any 

3877 overhead cost added to it like long distance fee and 

3878 everything; ua charged them a tuo percent fee for doing this 

3879 for then and that's m the figures. So this uas a fee paid 

3880 to do a ]ob, not a contribution^^ them. 

3881 HR. COSTOM: You ought to clarify as uell too, you 

3882 do not file the 990's nor are you a corporate officer and 

3883 you don't knou hou G and C handled that. 



miAssiFe 



398 



NAME : 
388U 
3885 
3886 
3887 
3888 
3889 
3890 

389 1 
3892 
3893 
3894 
3895 
3896 
3897 
3898 
3899 
3900 

390 1 
3902 
3903 
3904 
3905 
3906 
3907 
3908 



HIR224000 



yNCUSSIFIED 

THE UlfNESS^ That's right. 



PAGE 159 



BY HR. OLIVER: 

2 Did the corporate officers ever ask you what source 
this money was that went into the bank account? 

A No. I called the corporate officers before I ever 
did It and told them, said I have investigated, found 
out--one thing I uanted to know if it was clean money 
Remember this happened at the time that the contras were 
being accused of dope running and things like that and that 
uas my only question, is this clean iioney. 

2 And that uas your question to Richard Miller? 

A Yes. 

2 And did ha tell you it uas clean money? 

A Yes. That's all I uanted to knou . 

2 Did ha tell you uhere it came from? 

A No. I didn't ask hira. As long as the money uas 
clean, counsel, and tha cause uas uhat I kneu it to be, 
there uasn't any question about what the causa uas--there 
uasn't any uay I could see anything urong uith it. 

2 Did you aver lecaiva any other checks from any 
offshore bank accounts or ftoii any entities outside the 
Unitad Statas? 

A Ho, sir. Wall, not unless you consider tha 
travelers checks. 

2 Tha travalais checks which you got from Oliver 



wim\m 



399 



NAME ■ 
3909 
39 10 
39 1 1 
39 12 
39 1 3 
39 lU 
39 15 
39 16 
39 17 
39 18 
39 19 
3920 
392 1 
3922 
3923 
3924 
3925 
3926 
3927 
3928 
3929 
3930 
3931 
3932 
3933 



HIR22UO0O 



North' 



IINCUSSIFIEO 



PAGE 160 



A Yes. 

2 Did you ever get any other travelers checks from 
Adolf o Calero ? 

A No . 

2 Are you aware of anyone else getting any traveler 
checks frora Adolfo Calaro? 

A Everything I lf>-'rned about Adolfo Calero I learned 
probably about the sane time you did on the source of those 
checks. I never had anything to do uith Calaro. 

2 You never knew Calato had a lot of travelers checks 
he uas passing around to various and sundry people? 

A No. 

2 Old you ever discuss uith Adolfo Calaro where they 
were getting their funds? 

A No, sir. When I first met Adolfo Calaro there were 
no funds coming froa the United States Government so every 
dollars ha was getting was coming from soma private source 
somewhaza . 

2 Uhan was tha first time you mat him? 

A In tha summer of 19814. 

2 Ware you sort of rasponsibla as part of this 
coalition that you ware involved in m setting up 
appointments for Adolfo Calaro on Capitol Hill? 

A Yes. 



UNClASSm 



400 



UNCLASSIFIED 



NAME: HIR22>4000 UllULnWH ■ k tirr pAGE 161 

3934 2 Did you 'accompany him to many of those meetings? 

3935 A To the door. 

3936 2 But you never sat in on any of the meetings? 

3937 A To some group meetings I have sat in on. I never 

3938 sat in on individual meetings. Uell, a feu of them I did. 

3939 Congressman de la Garza, I en:)oyed hearing them talking 

3940 Spanish to each other. But there were very feu. But my 
39U1 practice was to escort them and let the Congressmen do all 

3942 the interviewing with the principal involved, particuJarly 

3943 one of the leaders. I have nothing to add to that. 

39U14 2 Uas Adolfo Calero, in the times you were with him 

39U5 and in the meetings m which you were with him. uas he 

39U6 indicating to groups and to individuals the dire need of 

39'47 financial assistance by the contras? 

39U8 A --yes, certainly. That was his purpose for being 

39U9 here. 

3950 2 Was raising funds? 

3951 A Uell, no. Ue are talking about he was trying to 

3952 get the «27 million and then the hundred million. I have 

3953 never been with Adolfo Calero or Spitz Channell or anyone 
39SU els* raising private money for these sources. 

3955 2 Did Adolfo Calero indicate m any of those meetings 

3956 or to you, the source of the funds that ware keeping them 

3957 alive at that point? 

3958 A Not specifically, no. 



UNCLASSIFIED 



401 



NAUE 
3959 

3960 

396 I 
3962 
3963 
396U 
3965 
3966 
3967 
3968 
3969 
3970 

397 1 
3972 
3973 
397U 
3975 
3976 
3977 
3978 
3979 
3980 
3981 
3982 
3983 



HIR22U000 



UNCIASSIHED 



PAGE 162 



2 Did he indicata that they were getting some funds 
at that point? 

A Sir, that uas so obvious. They didn't have to 
indicate it . 

2 You never asked and he never volunteered. 

A I'm thinking about it. You used the word never 
now. That's a pretty conclusive word. 

2 Do you recall ? 

A I can assure you I never asked. I have no 
recollection of his every volunteering. I can't swear to 
It. I have no recollection. On ny side I will say never. 
On his side, I can't be sure. 

2 Did Oliver North ever indicate to you he knew where 
the funds for the contras were coming from during that 
period of time in 1985 and 1986? 

A No, sir. 

2 Did Oliver North ever tell you the air resupply 
operation m Central America? 

A Mo, sir. 

2 Did he aver mention to you Albert Hakim? 

A No, sir. 

2 Richard Secord? 

A No, sir. 

2 You never met any of those individuals? 



A No, sir. 



UNCLASSIFIED 



402 



NAME - 
3984 
3985 
3986 
3987 
3988 
3989 
3990 

399 1 
3992 
3993 
399U 
3995 
3996 
3997 
3998 
3999 
4000 

400 1 
4002 
4003 
4004 
4005 
4006 
4007 
4008 



HNMSSiro 



HIR224000 iJl^ MIUB IW^' • " PAGE 163 

2 You first learned of thera after this story broke' 
A Same time you did. 

2 Same time the rest of us did. Going back to the 
chart for a minute, next to the Gulf and Caribbean 
Foundation is something called IDEA. Do you know what that 

IS' 

A Mo . 

2 Did you aver heat Oliver North mention it? 

A No. 

2 Next to that is a box which says Intel Youth Cora. 
Do you have any idea what that is? 

A No . 

2 Next to that is the Institute for probably 
Democracies. Do you have any idea what that is? 

A No . 

2 On the next line, of course, you are familiar with 
IBC. They were on retainer to you from early 1985 to-- 

A Mo. They ware on retainer to ma from late summer 
or early fall of 1983 to mid 1985. 

2 To mid-1985. Why did you ceasa to retain them in 
mid-1985? 

A ftostly because wa tan out of money. Ua just, out 
rasourcas uara--wa were always vaty narrow, with out 
commissions to what to do. 

HR. COSTOM: Perhaps you could identify we. 



UNCLASSIFIED 



403 



mimm 



NAME HIR22'4000 ' ■ • ■»■ ^# ■ 1 ■ |Li £/ page 16U 

4009 THE WITNESS- The Gulf and Caribbean, ue . the 

UOIO group. We never raised money for the sake of staying in 

4011 business. We raised money for a project that fit our 

4012 declared intent or we didn't raise money at all. 

4013 BY HR. OLIVER: 

401U 2 How did you inform Richard Hiller and Frank Gomez 

U015 that you could no longer afford their services' 

M016 A It wasn't in the writing, I don't think. Oy 

U017 recollection is I just told him this would be the last 

4018 check. 

•4019 2 Was that-- 

U020 A That's my recollection. 

402 1 2 Did they tell you at that time that they were 

4022 getting substantial funds from other sources? 

4023 A I knew they had the State Department contract The 

4024 size of it, I did not know. I knew they had other business. 

4025 I knew they were prospering but I know none of the details. 

4026 2 How did you know they were prospering? 

4027 A Because of their living quarters, because of their 

4028 activities, the obvious trappings of a prosperous business. 

4029 2 Did you spend time over at their offices? 

4030 A Very little. Haybe two hours a month. 

4031 2 In going on across this chart, we discussed IC , 

4032 Inc. or Intel Cooperation and you did not learn what that 

4033 was until much later, until after this story broke, is that 



UNCUSSIFIED 



404 



HAHE: HIRZaUOOO 



UOay correct? 



*«s;fe 



PAGE 165 



U035 

M036 

14037 

14038 

14039 

UOUO 

UOMI 

140142 

U0143 

1404 4 

4045 

4046 

4047 

4048 

4049 

4050 

405 1 

4052 

4053 

4054 

4055 

4056 

4057 

4058 



A That's correct. 

2 And then there is an ICSA . Did you learn that 
there were two IC • s ? 

A No . 

2 And below that are Lake Resources . Did you know of 
the existence of Lake Resources? 

A I did not . 

2 Or any of the other-- 

A You mean below that? 

2 Yes. 

A Right, I do know about FDM and UNO but nothing 
below IC or any of that lower right-hand corner had I aver 
heard of at the tine or even until I read it at the same 
time this came out. 

2 Have you ever discussed this chart with Oliver 
North? 

A No. 

8 Hav« you ever discussed this chart with Spitz 
Channell ? 

A Yes. 

Q And what was that discussion about? What did Spitz 
Channell tall you about this chart? 

A Ha didn't know anything mora about the chart than I 



did. 



iiNcussm 



405 



NAHE - 
4059 
U060 
406 1 
4062 
4063 
406<4 
I406S 
14066 
U067 
(4068 
14069 
14070 
1407 1 
4072 
4073 
4074 
4075 
4076 
4077 
4078 
4079 
4080 
4081 
4082 
4083 




HIR224000 ^1 MlJl Mm^.\tt»IL.Ii PAGE 166 

2 He knew that he was on^f^n a couple of places 

A He probably learned that the same time I did 

C Did he indicate he kneu what some of these other 
boxes uere? 

A No. He never did. 

2 He didn't indicate that ha kneu about Lake 
Resources ? 

A He did not. 

2 Have you ever discussad this chart with anyone else 
who indicated to you that thay kneu what these other boxes 
stood for? 

A No , sir . 

2 Thank you very auch. Hr . Kuykandall, you 
registered as your clients in 1987 and I'll just list them 
as a matter of public record. Alpha Environmental, Inc , 
Alpha 21 Corporation, First Construction Fund, Guards Mark, 
Inc., Gulf and Caribbean Foundation, National Endowment for 
the Preservation of Liberty, and the Eh vi p ^' Corporation. 
Other than the Gulf and Caribbean Corporation and the 
National Endowment for the Preservation of Liberty, were any 
of those clients involved in any way in Central America or 
aid to the contras? 

A All tight. You used that term any way. The 
president of Alpha 21 Corporation is Hr . William Blakemore. 
He is not involved business-^wisa in any way at all in 



ONCIASSIFIED 



406 



NAME : 
U08U 
4085 
4086 
4087 
4088 
4089 
4090 
409 1 
4092 
4093 
4094 
4095 
4096 
4097 
4098 
4099 
4 100 
4101 
4 102 
4103 

moM 

410S 
4106 
4107 
4108 



HIR224000 



wussm 



PAGE 167 



Central America or Mexico. He was the interested party, he 
and two or three other unrelated people asked us to look 
into creating Gulf and Caribbean. 

C For the record I an looking at a publication 
called, '"1987 Washington Representatives'' published by 
Columbia Books, Inc. This is a 1987 edition. Other than 
Mr. Blakemore, who is the same Mr. Blakemore who is involved 
with the Guli and Caribbean Foundation, did any o± these 
other corporations or officers of these corporations have 
any relationship whatsoever to Nicaragua or aid to the 
contras ? 

A No. Counsel advises na there's a very indirect 
connection that the president and CEO of Alpha Environmental 
was Ambassador-at-Larga , Director of Refugee Affairs for 
President Reagan before ha went to Austin and headed up that 
company . 

e Uho was that? 

A Ambassador Eugene Douglas. You have probably met 
him . 

2 But ha was not involved in any of the activities 
that you waza involved in that related to the Central 
Amarlcan freedom project or tha lobbying effort? 

A That's right. Alpha Environmental is an Austin 
company and ha left tha government and heads that up. 

S What services did you perform for tha National 



tJNClASSIFIED 



407 



KAHE 
14 109 

14 no 

M 11 1 

14 n 2 

4113 

14 1 m 

4 115 
4 116 
"4 117 
U 1 18 
4 119 
4 120 
4 12 1 
4 122 
4 123 
4 124 
4 125 
4 126 
4 127 
4128 
4 129 
4 130 
4 13 1 
4 132 
4 133 



HIR224000 



UNCUSSIFIfD 



PAGE 168 



Endowment for the Preservation of Liverty in 1987' 

A ny 1987 services to the group of organizations, 
probably 75 percent of it, is advice and consulting and 
planning with Spitz Channell himself. 

2 What kind of planning was he doing in 1987? 
A Mr. Oliver, if you knew Spitz Channell, he has a 
new plan every week and there wete--until later in the year 
when the conclusive things happened to him, he cc itmued to 
make plans for projects for the Constitutional celebration, 
for a freedom torch in Berlin, for several other ma:or 
projects. Ha had planned a group of lectures on summitry 
that were all m the planning stage when the end came for 
him . '<' 

2 The book that he prepared for you at your request 
related to where all the money had come from for his 
activities. I believe this was a reaction by you to the 
local Sun article, is that correct? 

A That's correct. 

2 You went to him in December of 1986? 

A Th«raabouts . 

2 Hhat did you say to him? Did you call him on the 
phona or did you go meat with him? 

A I don't remember because I hava done both. I 
simply said I need for my own information, and I need to be 
able to say whan anyone asks ma where your money came from. 



wmsw 



408 



HiRzauooo 



UNCLASSIFIED 



PAGE 169 



NAME 

4134 This charge has bee,n made. I'm your representative and li 

4135 I'll going to be your representative, I must have an answer. 

4136 2 Were you his representative at that time? 

4137 A Yes. Remember I uas on retainer, consulting 

4138 retainer with him in-- 
4 139 2 December . 

4140 A I went to $3,500 a month. That personal retainer 

4141 on, I think, July 1st, thereabouts. Remember it was $3(500 

4142 and then-- 

4143 2 He paid you 43^500 a month from July 1st through 

4144 December? 

4145 A Up to December. I believe. 

4146 2 On a regular basis? 

4147 A Right. 

4148 2 Then it uas changed to «12,000 a month. 

4149 A Correct. 

4150 2 This was after Oliver North had resigned from the 

4151 Uhite House, is that correct? 

4152 A Correct. 

4 153 2 Were you concerned at that time after Oliver North 

4154 had resigned from the Uhite House that you might become 

4155 embroiled somehow in this contretemps? Here you concerned 
4 156 at that time? 

4157 A Ho. Hot after I received the information that I 

4 158 asked for. I was concerned enough to ask for that 



iNcussm 



409 



MAOE 

M 159 
U 160 
4 16 1 
m62 
4163 
4 164 
U165 
U 166 
4 167 
4 168 
4 169 
4 170 
4 17 1 
4172 
4 173 
4174 
4175 
4 176 
4177 
4 178 
4179 
4 180 
4181 
4182 
4183 



HIR224000 



UNCLASSIFIEO 



PAGE 170 



information and receive it A direct charge had been made 
about funds that came to him either illegally or irregularly 
and that uas the reason for asking for the receipts, the 
bookj. 

2 Hou long did it take hire to prepare that book from 
the time that you asked for it and the time you received it? 

A Well, remember that was over Christraar^. I would 
say SIX weeks . 

2 Did you participate in any way in the preparation 
of the book? 

A No . 

2 Were you aware that IBC was participating in the 
preparation of that book? 

MR. COSTOH: Are we referring to the same book, the 
binder we brought with us today? 
HR. OLIVER-- Yes. 

A To the extent that they participated in that book. 
yes. I was famliar with the fact that they contributed to 
that book. I was not familiar with how much or when or how 
because I remember asking Richard Killer Where's the book, 
because I need it. I want it. 

2 He knew that you had asked Spitz Channell for this 
book? 

A Yes. That's the reason the question that you asked 
was a little more appropriate, I think, that you thought. 



UNCLASSIFIEO 



410 



NAHE ■■ 
4 184 
4185 
4 186 
4 187 
4 188 
4 189 
4 190 
4 19 1 
4 192 
4 193 
4 194 
4195 
4 196 
4 197 
4 198 
4 199 
4200 
420 1 
4202 
4203 
4204 
4205 
4206 
4207 
4208 



lihi 



V AOf^jr:?" 




HIR224000 ^r ■ » ^rB»» i^r *r ■■ aMaa^ PAGE 171 
Yes, he knew I had asked for the book and I would imagine I 
know he participated in putting it together. 

2 Uere you aware IBC was retained or was paid in 
early 19*7 to help Spitz Channell reconstruct the flow of 
money that had gone from his organization to IBC? 

A Yes. 

2 How did you learn that? 

A When he called me and asked roe for the books on the 
prothesis file. That's when I first learned about it. 

2 Did he ask you for any other documentation? 

A No, just that one. That's the first time I knew it 
was Spitz Channell's money, the prothesis file. 

2 Did you participate in any meetings with Richard 
Pliller or Spitz Channell in January or February of 1987 that 
were related to the compilation or reconstruction of the 
records of IBC, NEPL, Sentinel, and your companies? 

A Counsel, may i make a fairly broad and absolute 
statement? 

2 Please . 

A Never from that day forward until I have seen that 
hook, have I participated in any event or any discussion or 
any participation with anything that had to do with any 
legal matter with either IBC or any of the Channell 
organizations. I have not discussed, }.n advice of their 
counsel. In advice on my own. 



ONCUSSIflEO 



411 



NAME 

U2 09 
142 10 

"42 1 1 
42 1 2 
42 1 3 

^^ lu 

142 1 5 
142 16 
42 17 
142 18 
42 19 
•4220 
1422 1 
■4222 
14223 
U2214 
U225 
14226 
U227 
U228 
14229 
14230 
4231 
•4232 
•4233 



HIR22U000 



vnmm ■■ 



GE 172 



2 Hy question wasn't related to a legal matter. It 
was a natter of pulling together the records and the 
documentation 

A In all of j^js massive numbers that caree out 
concerning IBC, all of these other organizations, were 
absolute news to me. I was as shocked when I saw that book 
and the invoices of those contributions and the amounts of 
them as you probably were the first time you saw it. I had 
know idea of the total amounts or the individual invoices 
that anyone had given to Spitz Channall because I took no 
part, none, in any fundjraising ever done by Spitz Channell. 

2 In 1987 through May or until some time in May, you 
were retained by Spitz Channell for a fee of «12,000 a month, 
according to the contract that was renegotiated or changed 
in December of 1986? 

A That's right. 

2 And you indicated that you had talked to hin about 
some of the ideas that ha had. Did you discuss with him the 
investigations that were undeijway in the Congress of the 
Iran contra affair? 

A Only as it limited my ability to function up here 
because I simply, I did not get on the subject. If it 
affected him, if it had anything to do with him. In respect 
to a member of Congress, I simply would not discuss it on 



the Hill. 



WUSSW 



412 



NAME ■■ 
U23U 
U23S 
4236 
4237 
14238 
"4239 
U2U0 
U2U 1 
4242 
4243 
4244 
4245 
4246 
4247 
4248 
4249 
4250 
4251 
4252 
4253 
4254 
4255 
4256 
4257 
4258 



HIR224000 



Kussm 



PAGE 173 



2 Hy question was did you discuss it uith hira? 

A No. 

2 So you were being retained-- 

A He discussed other projects. Ue never discussed 
the subject of this investigation or the cases as far as he 
and his organization and Miller and his organization were 
involved, or any relationship with Ollie North. 

2 You didn't discuss that, any of those subjects, the 
subjects of these investigations or the activities of these 
investigations ? 

A Roughly from the time I got the first subpoena, and 
you know about when that was. until this day. 

2 Prior to the time you got the first subpoena did 
you discuss these investigations with Spitz Channell or 
Richard Miller or Frank Gomez? 

A Other than say how are you doing or when are you 
going to get this thing over with, or when are you going to 
get the special prosecutor to give you a clean bill of 
health, and that type of things, which I asked him 
constantly, but never substantively. I kept constantly, I 
said when axe you going to get through with this? When are 
you going to get back in business? When are we going to get 
soae things going here or when are you going to get a clean 
bill of health from the prosecutor? 

2 You had not been called prior to the time you got a 



I 



I 



UNCLASSIFIED 



413 



UNClftSSIFlEO ,. 



HXnE- HIR224000 ^^■^^••■•w — - p^^^. ^^^ 



4259 
U260 
U26 1 
<4262 
4263 
4264 



subpoena from this coraraittee' 

A Right. This was the very first. The Senate 
subpoena . 

e That was in February or March of 1987? 
NR. COSTON: It was dated March. 
THE WITNESS- March. 



BNCUSSIFIED 



414 



NAME 
1(265 
•4266 
4267 
14268 
14269 
4270 
427 1 
4272 
4273 
4274 
4275 
4276 
4277 
4278 
4279 
4280 
4281 
4282 
4283 
4284 
4285 
4286 
4287 
4288 
4289 



HIR224000 



UNCUSSIHED 



PAGE 175 



RPTS MCGINN 
DCMN SPRADLING 

BY MR OLIVER: 

e Have you discussed this investigation and hou it 
relates to you or to Spitz Channell or Rich Miller or IBC or 
NEPL with any of the members of this committee or their 
staffs other than the individuals who participated m this 
deposition and in the interviews with the Senate? 

A Since I got my subpoena? 

S No. Since the exhibits were named. 

A Uould you read the question. 

S I'll repeat the question and try to rephrase it to 
make it a little mora clear. 

A Remember, I still function on Capitol Hill. 

2 I understand that. My question was, and I will 
maybe break it into several parts. Have you discussed this 
matter with any of the members of this committee since the 
time they were named, the individuals were named to this 
committee or just prior to the tim« they were named to this 
committee up until the time you received the first subpoena? 
committee By this matter, what you do mean? 

MR. COSTON: By this matter, what do you mean? 
BY HR. OLIVER: 

2 I mean the investigation that this committee is 



conducting . 



UNCLASSIHED 



415 



NAHE ■■ 
4290 
"429 1 
4292 
U293 
42914 
4295 
4296 
4297 
4298 
4299 
4300 

430 1 
4302 
4303 
4304 
4305 
4306 
4307 
4308 
4309 
4310 

431 1 
4312 
43 13 
4314 



HIR224000 



ONCUSSiFIED 



PAGE 176 



A To ny recollection, no. I have personally called 
on one member of the committee on another matter formally. 
Over on the floor, (cloakroom and so forth I have seen 
probably half of them. But not to discuss or say how are 
you doing or hou long is this thing going to last, stuff 
Ilka that. Substantively, no. I had a discussion- -and you 
remember this--uith Timothy Woodcock when that leak happened 
M ta t" I know ha blew his stack about whan ray subpoena ended 
up in tha hands of the reporter the next day, and M ualked 
in and put it on ray desk. Renenber when that happened or 
raaybe you don't. It was a hall of a shock when I walked in 
and had my own subpoena laid in front of me by a reporter. 
I called Timothy Woodcock and told hin about it and he blew 
his stack and then told Iinwy ^and I^ w y blew his stack and 
that is when ha made his pronouncement. So if that counts 
as a discussion with a member of the committee, yes. that is 
the only actual substantive discussion. 

Than rauch later, just recently. I had a very bad 
article for na run in the Hiani Herald and the Hew Orleans 
paper, which was written by a ni jht """l t^'" reporter. It was 
a total fabrication and we iilHII h1mi -rnliri tha Bureau 
chiaf, askad him to have the rapoitar meat with us and I met 
with counsal and thay issued a totally new article and 
also, that raportai laid that document that you have been 
using on tha front of my desk and said ha got it directly 



UNCLASSIFIED 



416 



UNCLASSIFIED 



NAME ■ 
4315 
U316 
4317 
43 18 
43 19 
4320 

432 1 
4322 
4323 
4324 
4325 
4326 
4327 
4328 
4329 
4330 

433 1 
4332 
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4334 
4335 
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4337 
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4339 



HIR224000 



PAGE 177 



from a member of the congressional staff and this leak is 
supposed to come from that. 

I reported that to Tim Woodcock. 

2 Uhen did this article appear? 

A About five uaeks ago. 

2 Which document were you talking about? 

A The one you had-- 

2 The time line? 

A The log of Ollie North. 

2 The time line document? 

A Yes. 

That IS the reason I said yes. I know about this 
document. I said I wish I hadn't seen it but the Hiami 
Herald, the reporter said even the parson that gave it to 
him admitted it was a false story. 

2 Did you ever--did Spitz Channell ever ask you to 
give him advice about how to deal with this congressional 
investigation while you ware on retainer to him in 1987 or 
in lata 1986? 

A Ha askad na to discuss with him the personalities 
and the attitudes of the different neabers of Congress that 
Z knew. I responded to hin verbally and at lunch one day 
about tha different people that I knew wall and how I 
thought they ware likely to conduct themselves. 

2 Members of tha comnittaa? 



UNCUSSIHED 



417 



'''^'CM^SIF'ff; 



HAME HIR2211000 ■.' J'* ' j • ] i . ' '• '- pftGE 178 

U340 A Herabets of the coraraittee. 
14341 Q On the House side you mean. 

4342 A On the House side, yes. Ue are talking here about 

43143 manner, not content, who is a hard driver, who isn't and so 

4344 forth. Ilka that. 

4345 e When did this conversation take place, this lunch 

4346 that you mentioned' 

4347 A I don't even know that it was a lunch. I said it 

4348 could have been a lunch. Oh, probably three months ago. 

4349 When the Senate committee was first formed. 

4350 2 The House committee you mean. 

4351 A They were both named the same time, weren't they' 

4352 2 They were both named m December, I think of 1986. 

4353 2 It was that far back--whenever that was, was when 

4354 the committee was first formed. 

4355 2 Since that time you haven't had any discussions 

4356 with hira about the conduct of this investigation? 

4357 A Oh, no. His lawyers wouldn't let him discuss it 

4358 with ma. 

4339 2 I would like to go back to something else. I would 

4360 like to hava this marked as Exhibit No. 12. That is a 

436 1 maBOzandua xzon Spitz Channall to Dan Kuykendall dated March 

4362 26, 1986 and I would like for you to look at that document, 

4363 nr . Kuykandall, and tall ma what the purpose of it was and 

4364 what It indicatas. 



ICUSSiFIED 



418 



UNCLASSIFIED 



NAME: HIR2 24000 PAGE 179 

'*365 (Exhibit' No. 12 was marked for identification . 1 

U366 THE WITNESS: My recollection here is that Channell 

U367 uas probably I think considering trying to get a working 

U368 relationship with roe and needed to know something about my 

•4369 contacts and so forth. 

U370 BY MR. OLIVER: 

U371 2 You had already received at that time a $10,000 

4372 contribution. 

4373 A That is correct, a contribution. 

4374 B So he probably kneu-- 

4375 A He never considered retaining me at all. He knew 

4376 practically nothing about uhat I do other than sit there and 

4377 tell hira how he ought to run his TV commercials, his content 

4378 of then. So he really knau very little about ray overall 

4379 function here and he knew very little about who I knew and 

4380 who I knew well and uho I didn't knou uell. 

4381 2 Had ha not been participating with you from time to 

4382 time in the neetings of the larger group which took place in 

4383 Rich rtillax's office? 

4384 A Sea. Spitz Channell knau absolutely nothing about 

4385 Capitol Hill. Ha didn't even relate to it. Even in the 

4386 maatings uhara--I only have a recollection of one or possibly 

4387 two such maatings hara that ha attended. This type work uas 

4388 simply not his thing as far as Channall himself was 

4389 concerned. Ha saw in me the possibility of making contact 



'-A mm 




419 



UNCLASSIFIED 



NAHE HIR22M000 IIIVIII nilllll II IJ PAGE 180 

4390 uith a totally nevi dimension for his whole company and his 

4391 group of companies. It is ray recollection that he asked me 

4392 for an outline of the type performance that ue were capable 

4393 of doing and this was a summary of it. 

4394 Now, on tha last page here--all right. Roughly, 

4395 right here is what you had seen that you asked me about 

4396 earlier. I said the year was wrong. 

4397 2 Yes. 

4398 A See it? 

4399 2 I don't have that document in front of me. I think 

4400 counsel has a copy of it. 

4401 A Right here is what you are referring to. Now does 

4402 that ring your bell about what you asked rae ? 

4403 2 Well, I an not sure that is the same meeting but 

4404 this IS a maeting-- 

4405 A I said I could not recall one m '85. It must have 

4406 been in '86. Okay. X will explain this. 

4407 2 Hall, in looking at this document Item 1 indicates 

4408 that you made three different initiatives, personal escort 

4409 and scheduling for Adorliho Caleio and to a lesser extent 
44 10 Alphonso Rob«lo and others, reorganize guidance and 

44 11 monitoring of volunteer group and personal lobbying and 

4412 congressional coordination by you. 

4413 A Right. 

4414 2 That IS all correct 




420 



NAME ■■ 
44 1 5 
44 16 
44 17 
44 18 
44 19 
4420 

442 1 
4422 
4423 
4424 
4425 
4426 
4427 
4428 
4429 
4430 

443 1 
4432 
4433 
4434 
4435 
4436 
4437 
4438 
4439 



HIR224000 



UNCLASSIFIEO 



PAGE 181 



A Right. , 

2 Then tha next thing on number 2 is the scheduling 
of AdolKho Calero with the Republican Policy Committee, the 
Republican Study Committee, the East Coast group. 
Congressman Jim Courtar's office, uith four Members, and the 
leadership group of Congressman Bob Livingston's office uith 

r / 

four Members. I assume this indicates that you had Adol^o 
Calero meet with each of these groups. 

A Ho, I said scheduling. I don't remember which of 
the four cases I uas tha initiative or they were the 
initiative. It could have been 100 percent either uay. I 
simply do not remember but I do remember that I uas tha 
person that asked for Adolimo Calero's schedule and probably 
escorted him personally to each of tha meetings. 

2 Well, tha top line said that this uas the 
performance of Kuykendall et al for contra aid vote in the 
U.S. House of Representatives so I assume you were taking 
some credit for Adol^o Calaro naating with these groups. 

A Hall, I don't see that I deserve any less or any 
more credit if a Congressman thinks enough of me to ask my 
halp or I offer my help. I know you uouldn't uant to judge 
which would be mora impressive. So there is probably some 
of both Kara. Tha events took place and I uas responsible 
for escorting Hx . Calaro there. 

2 This nanorandum is from you to Spitz. 



UNwssife 



421 



IINCUSSiflfO 



NAME HIRaaUOOO •'*^'*^tt Ig^tJ PkGZ 182 

UUUO A Right. 

MUUl 2 Were you trying to establish a working relationship 

u^^2 with spitz? 

MMMS A I wasn't sure yet. 

^'^UU 2 Why did you write this raeraor andun ? 

^^^S . A He asked tie to :ust in case You know, you build 

U4M6 up a relationship that has to be mutual 

4'4'47 2 Do you mean three indicates under the heading of 

UUUa contra aid volunteer group Point A, that you met together 

MMUg for kickoff and briefing by Pat Buchanan, Ollie North, 

UUSO Congressman Trent Lott, Congressman Dick Cheney, Aldo^aho 

UMSl Calero, Alphonso Robelo and Enrique Bermudez and then under 

4452 that one, parenthesis, 18 of the top business lobbyists 

•4453 attended the meeting. Where did this meeting take place' 

MUSU A Capitol Hill Club. 

MMSS . Q And it was the kickoff of what, the effort for 

UU56 contra aid? 

4M57 . A No, no, no. I will give you the very quick version 

UM58 of this. 

U'459 Hh*n I bacana deeply involved in the 1986 phase of 

4460 this issua> and I had bean heavily involved in all kinds of 

UUbl business lobbying all these years, and in looking at who was 

U>462 lagistaiad to lobby on this issue on tha pro-contra side in 

i4<463 Washington, none of what I considered the best lobbyists in 

>4<46>4 town were even on this issue, none of them. And all of 



UNCLASSIFIED 



422 



NAME : 
4465 
4466 
4467 
4468 
4469 
4470 

447 1 
4472 
4473 
4474 
447S 
4476 
4477 
4478 
4479 
4480 

448 1 
4482 
4483 
4484 
4485 
4486 
4487 
4488 
4489 



HIR224000 



ONCUSSIFIED 



PAGE 183 



these people. I had worked with in coalitions on the budget, 
on the tax bills, on the labor law. on a whole bunch of 
other things. I had worked with all these top lobbyists. 

So I knew that the Office of Public Liaison at the 
White House had an absolute failed policy in trying to 
recruit business help on this kind of issue. They had tried 
to recruit business help, corporations, through the Office 
of Public Liaison, which is their :ob. and businesses, 
corporations, just simply would not do it. 

All right. I knew from ray own personal axperience 
that a lot of the bast lobbyists m town were very much 
interested in this issue. So I conceived of the idea, and 
It took us siK weeks to get it cleared by White House 
counsel, to get a volunteer group on their own time and 
their own initiative, of business lobbyists to volunteer to 
work on this issue on their own time. This is what this 
was . 

Kow, I first asked i£ the White House could ask 
them. They said no. I asked could we have a meeting at the 
White House. No. Than I said wall, if thay go ahead and 
volunteer can Pat Buchanan coma and thank them? They said 
yas . So that is what that was . 

Q But it says that it is a kickoff and briefing. 

A All right. The famous Ollie North briefing is what 



this was 



UNCUSSIFiED 



423 



NAHE : 
4490 
4149 1 
UM92 
4493 
4494 
4495 
4496 
4497 
4498 
4499 
4500 
450 1 
4502 
4503 
4504 
4505 
4506 
4507 
4508 
4509 
45 10 
45 11 
4512 
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4514 



HIR224000 
2 
A 
Q 
aid . 



UNCUSSIFIED 



PAGE 184 



What was the kickoff? 

This was the first time they had met together. 

So this was the kickoff of their efforts for contra 



A Right. 

2 And did you arrange for Pat Buchanan, Ollie North, 
Trent Lott, Dick Chenay and Calero, Robelo and Bermudez to 
be there and to speak? 

A Yes. They all did. Robelo, Calero and Berraudez 
were surprise guests. Ue didn't even know they were in town 
but we were able to get then at the last minute. 

2 And this raaeting took place in February of 1986? 

A Ho. It was probably later than that. It was 
probably not until Hay, April-May. 

2 This nemorandun is dated March 26. 

A Then it was earlier than that. Must have happened 
on that first vote. 

I an really hung on this date. I am surprised it 
was as early as this but anyway, this was the kickoff of the 
effort on both votes I guass. 

2 Hall, you indicatad that these 18 top business 
lobbyists attandad the raaating at your invitation. 

A Yas. 

2 You zaczuitad than. 



Yas . 



UNCLASSIFIED 



424 



HAME 

U515 
4516 
US 17 
145 18 
US 1 9 
4520 

452 1 
4522 
14523 
4524 
M525 
4526 
14527 
4528 
4529 
4530 

453 1 
4532 
4533 
4534 
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45i6 
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HIR224000 



\immw 



PAGE 185 



2 Could you tell us uho those 18 lobbyists were? 

A Frankly. I wouldn't want to give you an incomplete 
list and I don't have a complete list. If I gave you a list 
it uould be an absolute memory on ray part as to uho was 
there and it uould ba inaccurate. 

2 You don't have a list in your file of uho the 
people uere that were invited? 

A If I do have, I will let you have it. 

2 Thank you very much. 

A I don't think I do. I probably have an invitation 
list but I don't think I have an attendance list. 

2 Well, either an invitation or an attendance list 
uould be very helpful if you could produce that. 

A I'll see if I do. I made the calls by phone. I 
did not urite any letters. 

2 Did Spitz Channell attend that meeting? 
No . he did not . 

Did Rich niller attend that meeting? 
Not that I remember. He could have. 
Did Frank Gomez attend that meeting? 
No, not that I remember. I uould suppose either 
niller or Gomez probably did. 

2 Did they help you organize the meeting in any way? 

A No, they didn't. This is not their turf. 

2 Did any of the other people from your coalition 



mmm" 



425 



HAME 

U5U0 
USU 1 
■4542 
45M3 

usuu 

45MS 
4546 
U5147 
U5U8 
14549 
U550 

455 1 
4552 
4553 
4554 
4555 
4556 
4557 
4558 
4559 
4560 

456 1 
4562 
4563 
4564 



HIR224000 



liNcussm 



PAGE 186 



that you had built attend that meeting' 

A No. These uere my contacts. These uere ray 
personal business contacts. 

2 Did anyone frora the State Department attend the 
meeting' 

A No . 

2 Th« next item on that list numbered B says confirm 
calls uere made on the following rienbeis with designated 
results . 

A These uere the reports back to raa on calls made by 
the 18 people, okay? Now, a high level oi influence would 
be ten. In other words, the person that called on Dante 
Eascell didn't claim any credit for Dante Fascell voting for 
contra aid . 

2 You mean it is not the influence level of the 
Congressman. It's the influence level they thought they had 
on that call . 

A On that call. Now for instance, they had pretty 
good reason to believe that some of the calls made on Jim 
Jones war* effective. Down at McKarnan and Grayd^on they 
had reason to balieve that the calls made on those people 
had soma influence. Three is as low as any of them went. 

S Tha naKt number, number 4, says personal nember 
contacts by Dan Kuykendall . Did you call personally on each 
one of those Members on that list? 



UNCLASSIFIED 



426 



NAHE 
456S 
U566 
4567 
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4569 
4570 
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4573 
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HIR224000 



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PAGE 187 



A I said contacts. Those uere virtually all 
Cloakroore hi. how are you doing, and hou are you going to 
vote or out m the hallway. I think probably the only 
person on there who--in fact I uill tell you flatly the only 
person on there I had any discussion uith and he is too good 
a friend for me to ever push hira. is Ed Jones. 

2 The next number 5. the summary says it should be 
recognized that all the contacts referred to in this report 
are uith the actual Member of Congress. Staff contacts are 
not referred to in this report. So this would indicate all 
these people you personally talked to. 

A Yes. Of the 18 people and myself, I am not sure I 
understood the content of your question. 

2 You said some of these were Cloakroom conversations 
but what you are saying is they were real, all face- to- face , 
eyeball to eyeball conversations. 

A Yes. 

2 In the last line of this memorandum you said had it 
not been for the total KEPL effort the Speaker would not 
have had to pionise a secret vote to obtain the temporary 
victory on Harch 20. What did you mean by total HEPL 
effort? 

A I was going back to their institutional advertising 
that had been running for six months before. 

2 Six months before? 



UNCUSSIflED 



427 



NAME 

U590 
US9 1 
U592 
U593 
U591J 
4595 
4S96 
4597 
4598 
4S99 
4600 
460 1 
4602 
4603 
4604 
4605 
4606 
4607 
4608 
4609 
46 10 
46 1 1 
46 12 
46 1 3 
46 14 



HIR224000 



mUSSIFlEO 



PAGE 188 



A At least six months before. 

2 They were running-- 

A None of those--I don't reroembet but it could have 
been those hard hitting ads didn't run until that second 
vote. That is ray memory, that virtually all the ads run 
before March 20 were run on the institutional level by NEPL. 

2 You thought that the institutional effort by HEPL-- 

A It was more effective than the directed effort. 

S These uere the first ads. 

A Right. This was the kind of issue, and you 
remember it uell. counsel, that people didn't want to be 
pushed on. This was the Kind of effort that took deep 
thought, deep consideration, deep thinking and it :ust 
wasn't the kind of issue that a Congressman could or would 
be pushed on. 

2 I would like to ask the reporter to mark this 
document as Exhibit No. 13. 

[Exhibit No. 13 was narked for identification. 1 
BY MR. OLIVER: 

2 This IS a letter dated July 23, 1986 to Spitz 
Channell from Dan Kuykendall and I would like to read some 
portions of it and then give it to you and ask you to 
coBBent on it. 

It said, in paragraph 3, ''Having been retained by 
the Gulf and Caribbean Foundation and private Texas clients, 



UNCLASSIFIED 



428 



NAHE ■ 
46 15 
46 16 
46 17 
46 18 
46 19 
4620 
462 1 
4622 
4623 
4624 
4625 
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4627 
4628 
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4630 
4631 
4632 
4633 
4634 
4635 
4636 
4637 
4638 
4639 



HIR224000 



UNCLASSIFIED 



PAGE 189 



I coordinated the outside Cprivate) lobbying efforts to 
obtain this aid. Ue lost our first shoudoun--nichel I--by tao 
votes but due to an intensive lobbying effort we won 
approval of Michel II by 63 votes.'' 

A That was referring to 1985 effort. 

e It goes on to say in the next paragraph. ''In early 
1986 Gulf and Caribbean received its first direct support 
from NEPL. This support enabled us to intensify our efforts 
to obtain mlitary aid for the contras . ' ' 

Now, I would like to ask you to look at that 
document. I think you have a copy of it in front of you; is 
that right? Counsel has given you a copy? 

A Yes. 

2 is this an accurate reflection of your activities 
on behalf of contra aid in 1985 and up until July 23. 1986? 

A Okay. First let ne point out that the effort that 
is referred to here on the two vote deal, in those cases I 
had not received any money from Gulf and Caribbean 
whatsoever directly to ne . The Gulf and Caribbean effort 
was being done in the escorting the type thing that you saw 
m the first document that you handed me and so forth. Ue 
felt like that this was very effective in helping but it was 
the type educational type effort that was the charter of the 
Gulf and Caribbean Foundation. 

But up until the time this vote took place in '85 



UNCLASSIFIED 



429 



NAME 
U640 

464 1 
4642 
4643 
4644 
4645 
4646 
4647 
4648 
4649 
4650 

465 1 
4652 
4653 
4654 
4655 
4656 
4657 
4658 
4659 
4660 

466 1 
4662 
4663 
4664 



HIR224000 



UNCLASSIFIED 



PAGE 190 

ue had not received any monies during '84 or the first half 
of '85 from the Gulf and Caribbean Foundation even for rent 
or anything else. Ue :ust simply didn't receive any money 
from thera . There uasn't any money there and ue didn't 
receive it. So the coordinating of the private lobbying 
effort is a reputation of that group that I told you about 
that uas formed that I was the acting chairman of. 

This uas the group that m late '84, whenever that 
actually began, and all during that effort in '85, there uas 
none of this big huge coalition. There uas none of the big 
money spent on TV and everything. This uas a very, very 
small effort and uith very feu people involved. The group 
that I spoke to you about earlier uas the group that I 
coordinated. That uas in the '85 effort. I mentioned here 
that I realized in late '85--I became aware of NEPL and their 
TV advertising as a result of both of us using IBC In 
1986, of course, what is that date on that early 
contribution? 

2 March . 

A March, uas obviously the first time that KEPL had 
seen fit to contribute to Gulf and Caribbean because they 
sau there a dimension that we added to the effort that they 
sinply didn't have. 

2 You indicated in the next sentence this support 
enabled you to intensify your efforts to obtain military aid 



UNCIASSIFI[ 



430 



NAME 

4665 
U666 
M667 
U668 
14669 
14670 
U67 I 
14672 
4673 
4674 
4675 
4676 
4677 
4678 
4679 
4680 
4681 
4682 
4683 
4684 
4685 
4686 
4687 
4688 
4689 



HIR224000 



*/issm 



PAGE 191 



for tha contras 

A Right. 

2 That was through lobbying . 

A Mo . 

e What was it' hou did you intensify your efforts to 
obtain military aid for the contras if it uasn't through 
lobbying ? 

A Again ua get down to tha definition of lobbying. 
This IS where obviously you and I have an absolute 
difference of opinion as to what constitutes lobbying and 
what does not constitute lobbying. Lobbying is the material 
and tha type thing that I did in the previous document. 
That IS that type thing and that is calling on those 
individual rtanbars of Congress and asking then to vote a 
certain way on a bill. That is lobbying. That is clearcut 
lobbying and things like that are the reason I obtained 
money for lobbying for that purpose. 

But tha escorting of different people at the 
request of Hambers of Congress to aaatings on Capitol Hill 
for educational purposes for tha purpose of their seeking 
their knoiiladga--le t ' s face something here. One of the 
things that tha White House was severely criticized for in 
tha lacant haaiings has bean keeping paopla in tha dark. My 
whole effort was to try to present a point of view to enough 
Members of Congress to win this vote and 221 of them decided 



iiNWSsife 



431 



liNClASSIflED 



NAME: HIR22I4000 — ■■■^r^tl^^n I L. LJ PAGE 192 

U690 to vote for this issue. It was passed by the United States 

U691 House of Representatives. It passed the Senate and became 

4692 the lau of the land. That was our goal, was to create 

4693 enough information for these people to make up their raind on 
U69M this issue. This uas a very narrow issue. This was an 

4695 issue that had the smallest undecided list month after month 

4696 that I have ever seen. There were never more than about 50 
U697 names on the entire undecided list. 

M698 So the question becomes here about the part ue 

4699 played in it. Very minor part of it uas what I would call 

4700 lobbying. A very major part of it was sheer information 
14701 carried to Members of Congress at either their request or 
U702 their knowledge. 

U703 MR. COSTON: Let's take a short break and rest your 

47011 voice. It's been an hour-and-a-half . 

4705 [ Recess . 1 

4706 BY HR. OLIVER: 

4707 C Me were discussing Exhibit 13 which uas a letter 

4708 from Spitz Channell to you. Is it your testimony that these 

4709 activities that are described in here by you are primarily 

4710 related to educational efforts and not to lobbying? 
47 11 . A Primarily educational, some lobbying. 

4712 Q So it is your testimony that you were lobbying. 

47 13 A I uas doing some lobbying, yes. 

4714 C For HEPL and Spitz Channell. 



UNCLASSIFIED 



432 



NAME 
47 15 
47 16 
U7 17 
47 18 
47 19 
4720 
472 1 
4722 
4723 
4724 
4725 
4726 
4727 
4728 
4729 
4730 
4731 
4732 
4733 
4734 
4735 
4736 
4737 
4738 
4739 



HIR224000 



UNCLASSIFIED 



PAGE 193 



A For Sentinel Spitz Channell. 

2 I might call your attention to the bottom line on 
the first page of that document uhich says the months of 
April, nay and June saw the most intensive educational and 
lobbying efforts by NEPL, Sentinel and Gulf and Caribbean 
that this issue has ever received. 

A Hell, you read the sentence. It's accurate. It's 
lobbying. Sentinel, education, MEPL, and Gulf and Caribbean 

2 I would Ilka to--could ue go off the record? 
[Discussion off the record. 1 
BY MR. OLIVER: 

2 Let's go back on the record. 

I aust want to ask a few questions about some notes 
that the committee obtained from files of Spitz Channell in 
which your name appsazs in several instances. 

On July the 16, 1986, there is handwriting on a 
••to, do'' list from Hiller's files that says, and I will 
read it to you, it says ''Dan Kuykandall to get Congressmen 
to question on the floor of Congress and than sand Kurt 
Hurge analysis to Dan Kuykandall. Do you remember what that 
might hava baan in reference to? 

A At this time I had never meet Kurt Hurge. I didn't 
avan know who ha was. Ha is Spitz' lawyer. He is obviously 
checking out the legal aspect of something. 

2 Did he aver sen^ you an analysis of any kind that 



UNCLASSIFIEO 



433 



NAME 
4740 

it7m 

147U2 
U7U3 
U7UU 
U714S 
47146 
47147 
147148 
147U9 
4750 

475 1 
4752 
4753 
4754 
4755 
4756 
4757 
4758 
4759 
4760 

476 1 
4762 
4763 
4764 



HIR224000 



OlLASSiFiEO 



PAGE 194 



you recall? 

A I'm not sura uhat he is talking about here because 
m spite of uhat you may have heard. Spitz was pretty damn 
careful about running things by his lawyer. I really don't 
knou uhat ue uere talking about hare because at this time I 
did not knou Kurt Hurga 

2 Do you remember Spitz Channall or Dan Conrad ever 
asking you to get some Congressman to ask questions on the 
floor about any subject. SDI or contra aid' 

A Oh, that's fairly common. 

2 Did they particularly in the summer of 1986 ask you 
to get Congressmen to ask questions on the floor about SDI. 
for instance ? 

A I have no recollection of it but I certainly can't 

deny 1 t . 

2 Do you remember Spitz Channell or Dan Conrad 
discussing with you af fort^^ to gat a list of SDI contractors 
for the Strategic Defense Initiative? 

A Oh . yas . 

2 Uhat was the purpose of getting that list of 
contractors ? 

A To compare them to the congressional districts and 
the list of support by Congressmen. 

2 There is an indication on there that says get 
endorsements for SDI program from Congressmen in the 



UNCLASSiFlEO 



434 



HAHE 
4765 
4766 
4767 
4768 
4769 
4770 

477 1 
4772 
4773 
4774 
4775 
4776 
4777 
4778 
4779 
4780 

478 I 
4782 
4783 
4784 
4785 
4786 
4787 
4788 
4789 



HIR224000 



UNCLASSIFIED 



PAGE 195 



Districts of SDI contractors and then beside it, that note, 
it says Dan K, which I assume may be you. 

MR. COSTOH: I'm going to instruct you to not 
ansuer. Tha subpoena uas issued by the Select Committee 
investigating arras sales to Iran and tha contra operations. 
I think ua ara pretty far afield here. Ua are talking about 
SDI. That has nothing to do with tha scope of your 
investigation and unless there is a proffer of relevance, I 
am going to instruct tha witness not to answer and to move 
on . 

MR. OLIVER: Wall. I was, counsel, asking Mr. 
Kuykendall about his relationship|l with Spitz Channall and 
he indicated there ware a number of idaas for which ha uas 
paid by Spitz Channall in 1986 and in 1987. 

MR. COSTON: Is It tha Select Committee's charter 
to examine SDI issues and any lobbying or educational 
efforts on SDI issues? 

MR. OLIVER: I was really trying to determine for 
what services Mr. Kuykandall was paid^by Spitz Channall but 
If you object I will ba happy to withdraw that question. 

HR. COSTON: I do. It IS 4: 15 and wa would like to 
finish up today. 

HR. OLIVER: Fina. 

Tha latter that wa rafaiiad to a few moments ago as 
Exhibit 13, did Spitz Channall or Dan Conrad ask you to send 



UNCIASSIFIEP 



435 



HAHE ■ 
4790 
4791 
4792 
4793 
4794 
4795 
4796 
4797 
4798 
4799 
4800 

480 1 
4802 
4803 
4804 
480S 
4806 
4807 
4808 
4809 
4810 

481 1 
4812 
4813 
4814 



HIR224000 



DtWSSIFlEB 



PAGE 196 



them that letter about perfotraance and analysis of the vote'' 
THE WITNESS: Yes. 
BY MR. OLIVER: 
And you did ' 
Yes . 

There was reference in some notes under a category 
headed by your nane on several occasions to the Southwest 
Cattleman's Association board membac list. Do you knou what 
that was all about? 

A That IS a list that Channell spent six months 
trying to get out of me and never did. 

2 I wondered why it appeared on his to do list for 
such a long period of time. 

A He tried to get ray list too, and never did. 
fi In Exhibit 13 thera was a line that indicated m 
the letter from you to Spitz Channell saying, ' 'Having been 
retained by the Gulf and Caribbean Foundation and private 
Texas clients, I coordinated the outside private lobbying 
effort to obtain this aid.*' 

Who were the private Taxas clients? 
A All of my clients obviously paid me enough money to 
uhara I didn't have to usa all my tima to--and I could afford 
to volunteer. No Taxas client zatainad ma to do this, but 
my Taxas clients allowed ma to do it by the fact that they 
didn't keep ma occupied full time, which most clients don't. 



ONCDISXiFe 



436 



MAME 
M81S 
MSU 
4817 
U818 
14819 
4820 
482 1 
4822 
4823 
4824 
4825 
4826 
4827 
4828 
4829 
4830 
4831 
4832 
4833 
4834 
4835 
4836 
4837 
4838 
4839 



HIR224000 



UNClASSIRfO 



"^ PAGE 197 



2 I would like to ask you about a feu people, :ust 
sone names and ask you if you know thera or knou of there or 
have any relationship with them and if I mention a name, if 
you would describe to me whether or not you knou them and in 
what context you do. 

Clifford Smith. 

A A young man who worked for Spitz Channell as a fund 
raiser. That's about all I know about him. 

2 How did you meet him? 

A he was around Spitz at the office quite a lot. I 
»ny function with him. /I never went onA» trip 



never had any 



t>At A 6t^\ieci 



with him\or a meeting with him^ike that, but I knew him. 

2 Did ha participate in any of the large group 
meetings ? 

A Oh, no . 

2 He did not? 

A Ko. 

2 Chris Littladala? 

A Even less. I mat him and that's all. 

2 Jana ncLioCughlin . 

A No. 

2 You did not knou Jana ncL)^ughlin? 

A X know Jana ncLji|ughlin . I did not participate with 

2 Did ha participate in any of those large group 



her. 



yNCLASSIFIED 



437 



UNCLASSIFIED 



NAME 

4840 

USUI 

14842 
1*843 

U8U5 

U8U7 
U8U8 
48149 
4850 
U8S1 
4852 
14853 

148514 
4855 
14856 
U857 
U858 
14859 
14860 
486 1 
4862 
4863 
4864 



HIR224000 



PAGE 198 



meetings at which you were present? 

A Ko . 

2 Do you retain any bank accounts outside of the 
United States? 

A Ko . 

2 You have indicated that you saw Rob Owen but you 
only met hira. You had no dealing with him? Has that your 
earlier testimony? 

A I didn't even know who he was. 

2 Ed EoK? 

A No . 

2 Bruce Cameron? 

A Yes. 

2 You testified aarlier you mat Bruce Cameron in the 
context of the efforts in 1986. 

A With him working with pro-Democrats on the 
Democratic side, me working on the Republican side. 

2 Did you know that he had a separate entity called, 
I think the Council for Democratic Education and Assistance? 

A Ytts. Ha operated on tha Hill under a separate 
entity. 

2 Did you know that ha was retained or ha was paid by 
a grant from Spitz Channall? 

A Vary late I learned that. 
2 After the vote? 



yNCUSSIFIED 



438 



NAME: 
4865 
U866 
4867 
U868 
4869 
4870 
1487 1 
4872 
4873 
4874 
4875 
4876 
4877 
4878 
4879 
4880 
488 1 
4882 
4883 
4884 
4885 
4886 
4887 
4888 
4889 



HIR224000 



KNCUSSm 



PAGE 199 



A After the vote . 

2 How did you learn that? 

A I think I read it in the paper . 

2 Penn Kemble . 

A I know hire , yes . 

2 What was Penn Kerable's role in the lobbying effort 
for aid to the contras? 

A I don't believe you could say Penn Kemble ever even 
cane close to what you would call lobbying. That wasn't his 
thing . 

2 What was his thing. 

A He pretty nuch operated. Institute for Legislative 
Democracies which is strictly an educational group. Penn 
K^bla IS ^ust not a lobbyist, as far as I am concerned. 

2 He participated in those large strategic meetings, 
either he or Denise O'Leary. 

A Yes. Now Denisa was active in lobbying but I 
never--Penn Kemble could have done some lobbying. I am :ust 
not familiar with it. Denise was definitely a lobbyist, a 
good one . 

Q And she was lobbying at the direction of this 
coalition? 

A Ko. No. Thay handled, the Democxatic side, the 
ncCuidy group, that Demociatic undecided group almost 
entirely. Occasionally thay would work with the moderate to 



yNCLASSIFIEI 



439 



NAME 
1*890 

489 1 
U892 
U893 

uagu 

4895 
4896 
4897 
4898 
4899 
4900 

490 1 
4902 
4903 
4904 
49 5 
4906 
4907 
4908 
4909 
49 10 
49 1 1 
49 12 
49 1 3 
49 14 



HIR224000 



UNClASSIflEB 



PAGE 200 



liberal Republicans, but mostly ue divided out duties in 
1986 as compared to "85. 

2 Were you auate that Penn Kj^mble uas receiving money 
from Spitz Channel? 

A Not at all. 

2 Did you know that Spitz Channell had funded the 
group ads that ProDemca placed in the Washington Post and/or 
the New York Times? 

A No. I did not. 

2 --neat the time of the vote? 

A Ho . 

2 Do you recall the ads? 

A I recall ProDemca ran ads. I do not recall the 



ads . 



2 Steve Cook? 

A No . 

2 You don't know Steve Cook? 

A No. 

2 John Blaken? 

A No. 

2 Otto B^btE? 

A Yes . 

fi How did you know Otto lt^«Jtf 



A I think I first met Otto 



lL 



probably at the 



American Security Council breakfast. He would occasionally 



IINClASSinEO 



440 



NAME ■■ 
14915 
49 16 
49 17 
U9 18 
49 19 
U920 
492 1 
4922 
4923 
4924 
4925 
4926 
4927 
4928 
4929 
4930 
4931 
4932 
4933 
4934 
4935 
4936 
4937 
4938 
4939 



HIR224000 



Mmmi 



S"* PAGE 201 



come to that. 

2 Did he participate in any way m the effort to get 
aid for the contras? 

A Not through me or with me. I have no idea what he 
did on his own. . 



Cxr 



,2 



No. Not at all. 

You know~i*3^ Nofs'iAgar' 

Oh, yes, certainly. 



Did you know frj*"* Nof^mger received funds from IBC 
in the fall of 1986? I believe it was IBC. It may have 
been NEPL. 

A Yes. It was NEPL. 

2 It was NEPL? 

A Yes . 

2 How did you know that? 

A Because I sat in meetings with him and Spitz. 

2 What was the purpose of those meetings? 

A To try to teach Spitz how to get along with the 



d^ 



right wing of the Republican party. 

S And ha was paying. Spitz was paying la i Wn Nof^i^ger 
to give him that advice? 

A Yes. Not very long, but he did. 

2 Was there any discussion in those meetings about 
ads that Spitz Channell was running in the 1986 campaigns? 




'W 



IFI 






441 



NAME HIR22'4000 



yNClASSIflEO 



PAGE 202 



U940 

U9H 1 

49142 

4943 

4944 

4945 

4946 

4947 

4948 

4949 

4950 

495 1 

4952 

4953 

4954 

4955 

4956 

4957 

4958 

4959 

4960 

496 1 

4962 

4963 

4964 



A No 

2 Uere you aware that Spitz Channell was tunning 
television spots in congressional campaigns in 1986' 

A In the elections? 

2 In the elections. 

A He did not. 

2 You did not know of any? 

A He did not run ads in congressional races. He ran 
ads in about four Senate races but he did not run any m any 
congressional ads. 

2 how do you know? 

A Because I know. I talked hin out of running three 
or four because it was a waste of his money. I was an 
adviser to hiio at this time. 

2 You knew of the ads he produced to be run. 

A Right. 

2 But you talked him out of tunning them. 

A Right. 

2 Those were the ads that were going to be run 
against Jim Wright and Ron Coleman? 

A Y«s. I talked him out of wasting his money. 

2 But did you advise him to run the ads against Tim 
Hitth and Bob Graham? 

A Hell, I advised him to run ads for-- 

2 Kan Kramer and Paula Hawkins. These were wide open 



UNCLASSIFIED 



442 



NAHE ■ 
U965 
4966 
U967 
4968 
4969 
4970 
497 1 
4972 
4973 
4974 
4975 
4976 
4977 
4978 
4979 
4980 
4981 
4982 
4983 
4984 
4 985 
4986 
4987 
4988 
4989 



UNWSSIflED 



HIP.224000 lilVIll £4.1.^ I f" I V" I R PAGE 203 
Senate races. We were using a PAC. using PAC money and I 
took part m those without any apology uhatsoevei. But 
there were no ads run, and I ara 99 percent sure they simply 
uere not run in the House races. 

2 I think you are right about that. Uhy did you 
suggest to hin that he run these ads ior Paula Haukms and 
Ken Kramer? 

A Well, he had some money to spend for advertising 
and this was a political campaign and I'm a Republican. 

2 Did anyone ask you, did anyone from the j^aukms 
campaign or the Kramer campaign contact you or Spitz or Ifmm 
Nof^i^ger and say it would be most helpful if you could-- 

A No. Channell would not give money direct to 
candidates hardly at all. Ha insisted upon running his own 
advertising. I did not agree with this. I had long 
experience with PACs . That's the way I believed in running 
a campaign. That is the way I liked it when I was a 
candidate and I did not agree with his strategy of running 
independent campaigns. This was Channell's idea. This was 
the way ha was doing things. I did not make the decision. 
I was against the decision to go independent. 

Once ha made the decision to go independent. I 
said thasa ara the places where ha is needed. 

2 you indicated four Senate races. Can you recall 
what the other two were? 



UNCUSSIFIEO 



443 



UNUlA^vNIMt'l 



NAHE- 

4990 
1499 1 
4992 
4993 
4994 
4995 
4996 
4997 
4998 
4999 
5000 

500 1 
5002 
5003 
5004 
5005 
5006 
5007 
5008 
5009 
50 10 

501 1 
5012 
50 1 3 



HIR224000 PAGE 204 

A We:i. you have got Florida, Korth Carolina, 
Colorado and California. 

Q And did you recommend those four Senate races' 
A Probably. They were obvious as being marginal and 
needing help and so forth that this uas where it was put 
There uere several people that ended up being defeated that 
weren't even considered marginal, so you have to think back 
about six weeks before the election and look at that. 
2 Did you have any contact with the Republican 
Senatoral Campaign Conmittee or the Republican National 
Committee during this period of time about these races and 
Spitz' activities? 

A Not Spitz' activities. I discussed it with them to 
analyze the races. Their information wasn't very good But 
I am well enough knoun I don't have to go somewhere and 
represent Spitz Channall . I can get information on ray own 
because after all. I uas administering a PAC myself at the 
time . 

fi Hr . Kuykendall, I thank you for your patience and I 
have no fuxthez questions. 

HR. rRYHAH: Thank you Hr . Kuykendall, I have no 
questions . 

(Hheteupon, at 420 p . « . , the deposition uas 
concluded . ] 



DNWSsra 



444 



'^ 



c r- ^ r^ 



^ 



UlWI^^SmED 



March 20, 1985 



CHRONOLOGICAL EVENT CHECKLIST 



February 21-28, 1985 (completed) 

Event Responsibility 

Send resource book on the Contadora process State/LPO 
process to congressmen, media outlets, private (Miller) 
organizations and individuals interested in 
Nicaragua. 

FDN to select articulate freedom fighters with NSC (North) 
proven combat records and to na)cc them available 
for contact with U.S. media representatives. 

Assign U.S. intelligence agencies to research, NSC (North) 
report, and clear for public release Sandinista (Raymond) 
military actions violating Geneva Convention/ 
civilized standards of warfare. 

Prepare themes for approaches to Congressmen NSC (North) 
based on overall listed perceptions which will 
directly attacJc the objections listed above. 

Encourage U.S. media reporters to meet NSC (North) 

individual FDN fighters with proven combat State/LPD 
records and media appeal. (Gomez) 

Contact internal eyewitnesses/victims to NSC (North) 

testify before Congress about their abortive 
attempts to deal with the FSLN (deadline 
March 15) . 



J"ij', D"c.3«^:!,ed/Rei.3sed on I0£C^%% V ■> ^ W ^ 
unne. iircvitc-s ot E 3 12356 ^•^,_ -^ 

t)v K jo^?soii Nalio.nal SecuMy Council 



1368 



c asr« > g w¥TAL 



S-/2-n ^T^ 



445 



COt:riDE»JTI Al 



UN€tWSS(FiED 



Karch 1-8, 1965 



Event 

Prepare list of publicly and privately 
expressed Congressional objections to aiding 
resistance and voting record on the issue. 

Provide State/H with a list of Nicaraguan 
emigres and freedom fighters to serve as 
potential witnesses to testify before 
hearings on aid to Nicaraguan fxcedom fighters 
(due March 15) . 

Nicaraguan internal opposition and resistance 
announce unity on goals and principals 
(March 2, San Jose) (completed). 

Request that Zbigniew Brzezins)ii write a 
geopolitical paper which points out 
geopoliticalconsequences of Comnunist 
domination of Nicaragua (paper due March 20) . 

Briefings on Nicaragua for liey Congressional 
members and staffers. North on NU aggression 
and external involvement, Burghardt on 
diplomatic situation. 

Supervise preparation and assignment of 
articles directed to special interest groups at 
rate of one per wee)i beginning March 18 (examples: 
article on Nicaraguan educational system for NEA, 
article by retired military for Retired Officers 
Association, etc.). 

Assign agencies to draft one op-ed piece per 
wee)c for signature by Administration officials. 
Specify themes for the op-eds and retain final 
editorial rights. 

Conduct public opinion poll of America 
attitudes toward Sandinistas, freedom fighters, 

National Press Club news conference for FDN 
comir.anders Bermudez, Tigrillo, Mi)ie Lima 

(March 5) (follow-on Congressional visits 

(March 6) (completed) . 

Martha Lida Murillo (9 yr old atrocity 
victim) visit to Hashington--media interviews. 
Congressional visits, possible photo-op 
with First Lady (March 6-8) (completed) . 



Responsibility 

WH/LA 
State/H 



NSC (North) 
State/ARA 

(Michel) 
State/LPD 

(Reich) 

State/LPD 
(Miller) 
NSC (North) 

NSC (Menges) 



NSC (North) 

(Burghardt) 



State/LPD 



NSC (Menges) 



HH (Rollins) 



State/LPD 

(Gomez) 

llaykandall) 



State/LPD 
(Gomez) 
(VfeyKendall) 
(WH/OPL) 



CONFIDENTIAL 



UNeill^SII«IED 



13G3 



446 



c<^ rite fell A^ 



UNCLI^WIED 



March 9-15, 1965 



Event 



WH/L«9islative Affair*, State/H and ARA 
complete list of key Congressmen interested 
in Nicaragua. 



Intelligence briefing for White House 
Administration and senior staff by CIA 
(Vickers, Room 208, OEOB, 30 minutes). 

Bri«f Presidential meeting with Lew Lehnn«n 
and other leaders of the influence groups 
working on MX and resistance funding. 



Responsibility 

State/H(Ball/rox) 
WH/LA 
State/ARA 
(Michel/Holwill) 

NSC (North) 



NSC (Raymond) 
(North) 



State/LPD and WH Media Relations prepare a 
list of )cey mediaoutlets interested in 
Central American issues, including newspapers, 
radio, and TV stations (including SIN) . Where 
possible identify specific editors, commentators, 
tal)c shows, and columnists. 

NSC update tallying points on aid to Nicaraguan 
freedom fighters. 

Briefings in OEOB for members /Senators: 
Shultz, McFarlane, Gorman, and Shlaudeman to 
brief Lehman (requires General Gorman to b« 
placed on contract) . 

Call/visit newspaper editorial boards and 
give them background on the Nicaraguan 
freedom fighters. 

Brief OAS members in Washington and 
abroad on second term goals in Central 
America. Explore possible OAS action 
against Nicaragua. 

VP at Brazilian inauguration. Discuss 
possible OAS initiative on Nicaragua with 
Core Four, Colombia, Brazil, and Uruguay 
(March 15 and 16) . 

Prepare a 'Dear Colleagues* Itr for signature 
by a responsible Democrat which counsels 
against "negotiating* with the FSLN. 



NSC (North) 
State/LPD 

(Miller) 



NSC (North) 



NSC (North) 
(Lehnan) 



State/LPD (Reich) 
WH/PA 
NSC (North) 

OAS(Middendorf) 
NSC (Menges) 
State/LPD (Reich) 



VP (Hughes) 



NSC (Lehman) 



137(1 



447 



m\'^i 



.^msx,f(%%\M \ 



March li-27, 1985 



Event 

Results due on public opinion survey to see 

what turns Ajneracans against Sandinistas 
(March 20) . 

Joachim Maitre--Congressional meetings, 
speeches, and op-ed pieces. 

Review and restate themes based on results of 
public opinion poll. 



Presidential drop-by at briefing for American 
evangelicals on MX and Nicaraguan resistance. 

Congressional hearings (Foreign Relations/ 
Affairs) and testimony by Nicaraguan emigres 
and atrocity victims. 

Prepare document on Nicaraguan narcotics 
involvement. 

SSCI CODEL Boren^Rockefeller, McConnell, 

Wilson mUlUB^^^^I meetings 
resistance (March II 

VP in Honduras; meeting with Pres Suazo 
(March 16) . 

Argentine state visiti President emphasize 
need for OAS case (March 19) . 

Pastora and Calero meeting with 
Congressional Bispanic Caucus (Jorge Mas) 
(March 20) . 

Production and distribution of La Prensa 
chronology of rSLN harassment. 



Responsibi lity 
NSC (HincXley) 

State/LPD <^ 
(Kuykendall) 

State/LPD 
(Reich) 
NSC (North) 

(Raymond) 

WH/OPL (Reilly) 
NSC (North) 

WH/LA 

NSC (North) 

(Lehman) 

Justice 
(Mullen) 

NSC (North) w^ 
(Lehman) 

VP (Hughes) 

WH (Elliott) 



State/LPD V 
(Reich) 



COST ID 



UiCLASSIEHB)ENTlAL 



13 



/, i 



448 



CONFIDENTIM. 




March 23-31, 1985 



Event 



Re«pon«ibility 

State/LPD 

(Gomez) 

WH/LA 

NSC (Lehman) 
(North) 



State/LPD 
(Miller/Gonez) 



Rev. Vallardo Antonio Santcliz (Pentecostal 
Minister atrocity victin) — Congressional/ 
Kicdia veetings (March 22-23) . 

McFarlane, Friedersdorf meeting with key 
Congressional leadership (Rn 208 or WHSR) to 
brief situation and proposed course of 
action (March 23-2S) . 

Presidential breakfasts, lunches, and WHSR 
meetings with key Congressional leaders 
(March 24 through vote) . 

Pedro Juaquin Chamorro (Editor La Prensa ) 
U.S. media/speaking tour (March 25-April 3) 

President to meet in Roon 450 w/'Spirit of 
Freedom," concerned citizens for Democracy. 
Representatives from 8 countries (180) 
(March 25) . 

Release of DOD/State paper on Soviet/Cuban/ 
Nlcaraguan intentions in the Caribbean; 
possible WH backgrounder. 

Distribute Bernard Nietschmann paper on 
suppression of Indians by FSLN. 

Antonio Farach (Former FSLN Intelligence 
Officer) — media and Congressional meetings 
regarding Sandinista espionage. Intelligence 
activities. 

Invite President's Duarte, Monge, Suazo, 
and Barletta to a very private meeting in 
Texas with key Congressional leaders so that 
CODEL can hear unvarnished concerns re 
Sandinistas and Democratic leaders' support 
for the FDM. 

Release paper on Nlcaraguan media manipulation. State/LPD 



/ 



State/LPD(Reich) 
WH/PA (Sims) 



State/LPD 



Republican 

Study 

Committee 



(Kuykendall) 

NSC (North) 



Publish and distribute as State Department 
document Nicaragua's Development as Marxist- 
Leninist State by Linn Poulsen. 

Declassify Nicaragua's Development as a 
Marxist-Leninist State by Linn Jacobowitz 
Poulsen for publication as State Department 
document (clearance request w/Casey) . 
CONFIDENTIAL 



State/LPD 
(Reich) 



State/LPD 
(Blacken) 



g^BISM\tu 



1372 



449 




U::?fS;bpai^l^--«' 



cc<r:zi 



■:w. 



M»rc 



^ 23-31, 1985 



Event 

Rev. Vallardo Antonio Santelii (Pentecostal 
Minister atrocity victim) --Congressional/ 
media ireetlngs (March 22-23). 



McFarlane, Friedersdorf iTieetinq with Vey 
Congressional leadership ( Rjn 208 or WWSR) 
brief situation and proposed course of 
action (March 23-25) . 



Responsibi lity 

State/LPD 

(Xuykendall) 

(Gomez) 



WH/LA 
to NSC (Lehman) 

(North) 



Presidential brea)^fasts, lunches, and WHSR 
ineetirgs with \ey Congressional leaders 
(Karch 24 through vote) . 



Pedro Juaquin Chajnorro (Editor La Prensa ) 
U.S. media/spea)Qing tour (March 25-April 3) 

President to meet in Fooin 450 w/*Spirit of 
FreedoE,* concerned citizens for Democracy. 
Representatives from 8 countries (180) 
(March 25) . 



State/LPD 
(Miller/Gomez) 



/ 



/ 



Release of DOD/State paper on Soviet/Cuban/ 
Nicaraguan intentions in the Caribbean; 
possible WH backgrounder. 

Distribute Bernard N let schrr.ann paper on 
suppression of Indians by FSLN. 

Antor.io Farach (Former FSLN Intelligence 
Of ficer) --media and Congressional meetings 

regarding Sandinista espionage, intelligence 
activities . 

Invite President's Duarte, Monge , Suato, 
and Barletta to a very private meeting in 
Texas with key Congressional leaders so that 
CODEL can hear unvarnished concerns re 
Sandinistas and Democratic leaders' support 
for the FDN. 



State/LPD (Peich) 
WW/PA (Sims) 



State/LPD 



Republ lean 

Study 

Committee 



(ICuy)^endall) 
NSC (North) 



Release paper on Nicaraguan media manipulation. State/LPD 



Publish and distribute as State Department 
document Nicaragua's Development as Marxist- 
Leninist State by Linn Poulsen. 

Declassify Nicarag\ia's Development as a 
Marxist- Leninist State by Linn Jacobowitz 
Poulsen for publication as State Department 
docurent (clearance request w/Casev). 
CCNFIDENTIAJ, . ,. . .t. ■ (I. AA'T" 




State/LPD 
(Reich) 



State/LPD 
(Blacken) 



137:- 



450 



coNri 



UMCLASSIPSilD^NTI&L 



April 1-7. 1985 

Event 

Request Bernard Nictschmann to uf>d«te prior 
paper on suppression of Indians by FSLN (to 
b« published and distributed by April 1) . 

AXI t Sponsor media events w/print and 
television media for Central America 
resistance leaders (April 1-7) . 

European Parliinentary delegation to 
meet with President Reagan (April 2). 



Visit by Colombian President Betancur 
(April 3-4) ! possible Joint Session speech 
by Betancur. 

Proposed Presidential television address 
on Nicaragua (April 4) . 



Second round of SFRC hearings on Soviet 
build-up in xegion (Helms) (prior to recess) . 

CODEL visits during recess (April 4-14). 
Nicaraguan refugee camps in Honduras and 
Costa Rica (Include visit Ao^rAedom fighter 
base camp and hospital in I 

CODEL visit during recess (April 4-14) with 
regional leaders of Central America. Regional 
leaders convey importance of resistance fighters 
in NU. 

Administration and prominent non-USG 
spo)iesroan on networ)i shows regarding Soviet, 
Cuban, East GenB«n, and Libyan, Iranian 
connection with Sandinistas. 

Publish updated 'Green Booli;* distribute 
personally to Congressmen, media outlets, 
private organizations, and individuals 
interested in Nicaragua. Pass to Lew 
Lehrman and other interested groups. 

Distribute paper on geopolitical consequences 
of Communist domination of Nicaragua. 

Release paper on Nicaraguan drug 
involvement . 



CONFIDi 



^'^t^SSI/lflDENTIAL 



Responsibility 

State/LPD 
(Blac)ien) 



State/LPD 
(Reich) 
WW/OPL (Reilly) 



•y 



National Forum ^ 
Foundation 
WH/OPL (Reilly) 



WHSpeechwr iters 
(Elliott) 
NSC (North) 

State/H 

NSC (North) }/ 
(Lehman) 



NSC (North) 
(Lc^unan) 



HH/PA (Sims) \/ 
WH (Buchanan) 
State/LPD 



State/LPD (Reich) 
Vffl/LA 
State/H (Fox) 



State/LPD 



State/LPD 
(Blac)(en) 
NSC (North) 



451 




COKTIDENTlXl,:. ^ ''-■ 
■'■■ ^ ' 1 T n ;■ .- . 



April 8-14, 1985 (During recea») 



Event 



Reiponsibility 



25 Central American spokesmen arrive in Miami 
for briefing before departing to visit 
Congressional districts. Along with national 
television commercial campaign in 45 nedia 
markets. 

Targeted telephone campaign begins in 120 
Congressional districts. CITIZENS FOR AMERICA 
district activists organize phone-tree to targeted 
Congressional offices encouraging them to vote for 
aid to the freedom fighters in Nicaragua. 

Lew Lehman speaking tour of major U.S. cities. 



CFA (Abramoff) 



CFA (Abramoff) 



CFA 



Telephone campaign. 

Central American spokesmen conduct rallies 
throughout the country in conjunction with 
CITIZENS FOR AMERICA activists (starting 
April 12) . 

Nationally coordinated sermons about aid to 
the freedom fighters are conducted (April 14) 

Naval Institute Seminar in Newport, RI 
(Lugar, McFarlane (April 12]). 



CFA 



1371 



mmmm mmmi\ 



452 




April lS-21, 1985 



Event 



Micaraguan Refugee Fund (NRF) dinner, 
Washington, DC; President as Guest of 
Honor (April 15) . 

Presidential report to Congress on reasons 
for releasing funds to freedom fighters 
(April 15) . 

AAA available to Washington press. 



Central American spokesmen visit Congressional 
offices on Capitol Hill (April 16). 

SFRC Nicaraguan issues, open hearing 
(April 16-17) . 

Washington conference "Central America: 
Resistance or Surrender* (Presidential 
drop-by?) (April 17) . 

Barnes' subcommittee hearing on Nicaragua} 
Motley, public witnesses (April IS) 
(2170 Rayburn, 2i00 p.m.). 

Presidential Radio Address (April 20) . 



Responsibility 



State/LPD 

(Miller 
NSC (Raymond) 


) 


NSC 
State 




State/LPD 
(Gomez) 


■/ 


Abramoff 


/ 



NSC 
Abramoff 



v/' 



WH (Elliott) 




liSSi»ENTIAL 



I37r) 



453 




Xprll 22-29. 1985 



Event 



Ke»pontibility 



House Appropriations (Obey subcoonittee) 
intelligence brief on Central America/ 
Latin Ajnerica (April 23). 

Obey subconmiittee (panel on Central Aaerica) , 
public witnesses (a. v. ) /Administration 
witnesses (p.m.) (April 24). 

Major rally in the Orange Bowl in Miami, 
Florida, attended by President Reagan and 
important Administration figures 
(April 28) . 



Presidential calls to Icey members. 



Cuban American 
National 
Foundation 
State/LPD 

(Reich) 

WH (Friedersdorf) 
NSC (Lehman) 



CONFID 



^KliSSIflipNmL 



137f^ 



454 






t 



April 15, 1986 



Mr . Richard Miller 

1912 Sunderland Place, NW 

Washington, DC 20036 

Dear Rich: 

As promised, the final House votes to decide the fate 
of freedom in Nicaragua are today (April 15) being taken. 

With the House acting on the President's request for 
the last time, the usefulness of our Central American 
Freedom Program comes to an end. The program has 
been tremendously successful. It has made a significant 
national and international impact for good. Most 
Important, it has remained true and steadfast to Ronald 
Reagan's goals to extend freedom wherever possible. 

You, as Program Director, have executed your multiple 
leadership responsibilities with the highest degree of 
professional excellence. You are a gifted and unique 
leader. The team of IBC staff and subcontractors you 
assembled to carry out specific aspects of the Central 
American Freedom Program is also worthy of great 
admiration and appreciation from everyone supportlv jf 
the President's goal. 

Last week I began to notify our subcontractors and 
consultants that all National Endowment for the 
Preservation of Liberty financial arrangements with them 
would be terminated on April 15. Please call the 
following businesses/individuals and notify them that the 
progran has ended and restate that all financial 
arrangements between the National Endowment for the 
Preservation of Liberty and them are terminated as of 
tonight. Your follow-up call will ensure that we have 
contacted everyone. 

Please convey my sincere thanks to everyone. Tell 
them that I will personally contact them about future 
projects. Everyone involved in the Central American 
Freedom Program will shortly receive a heartfelt personal 
thank you from me. 



, .i^~' ^^w^ 



1 



^l-ti 



455 



Please cal 1 : 

Marty Artlano 

Steve Cook 

David Fischer 

Edle Fraser 

Bob and Adam Goodman 

Dan Kuykendal 1 

Jack Lichensteln 

Penn Kemble 

UNO office. 



I cannot express to you my appreciation for the 
incredible contribution you have made in support of 
freedom. Thank you for being instrumental in making this 
program a success 

/ 
Very sii/cereyy, 




Spitz 

President' 

National Endowment for the 

Preservation of Liberty 



456 



SECRETARY -- Active Subcommittee seeks secretary to work for staff 
director and committee counsel. Word processing and dictaphone 
experience helpful but not required. Typing 60 wpm. Salary 
commensurate with experience. Send resume to DSG, Job Referral 
No. 2806. 

STAFF ASSISTANTS -- Progressive office seeks several detail-oriented 
people to work as number crunchers. Interested persons must be 
able to add, subtract, multiply, and divide. Minimum thirty hours 
per week. Send resume to DSG, Job Referral No. 2807. 

STAFF ASSISTANT -- House Committee seeks entry-level staff 
assistant. Word processing experiepce, knowledge of committee 
procedures, and strong interpersonal skills desired. 
Responsibilities include general typing, research, recordkeeping, 
and dissemination of information to Congress and the public. 
Send resume to DSG, Job Referral No. 2808. 

*PRESS SECRETARY -- Active Democratic Senator seeks press secretary 
for competitive media market. Will supervise press department of 
three. Duties include TV, radio, and print inquiries, newsletter, 
cable TV, and radio show production. Op Eds, and occasional speech 
writing. Hill and campaign experience preferred. Salary: Low- 
to mid-forties. Send resume to DSG, Job Referral No. 2810. 

*PRESS SECRETARY -- Northeastern Democrat seeks press secretary 
for busy office. Must possess an enthusiasm for local press 
assignments, as well as excellent writing skills, attention to 
detail, complete follow-through, and good political skills. News- 
letter and cable TV production experience a must. Send resume to 
DSG, Job Referral No. 2811. 

*SECRETARY -- House Subcommittee has immediate opening for full- 
time secretary. Duties include typing, filing, handling mail, 
incoming calls, and document requests, clerical work in preparation 
for Subcommittee hearings, and some legislative correspondence. 
Typing: 60 wpm. Willing to train on word processing equipment. 
Salary: High-teens. Send resume to DSG, Job Referral No. 2812. 

*LEGISLATIVE ASSISTANT -- Moderate Democrat seeks LA/LC with ex- 
perience, especially in labor and business issues. Excellent 
opportunity to advance to LD position in 1988. Salary negotiable. 
Send resume to DSG, Job Referral No. 2813. 

*COMMUNICATIONS ASSISTANT -- Midwestern Democrat seeks individual 
with at least one year comparable experience to handle preparation 
and follow-through on press and other "visibility " -related projects, 
including press releases, newsletters, targeted and mass mailings, 
speeches, and media events. Crisp, concise writing skills, sound 
organizational and political instincts, and mature judgement are 
essential. Familiarity with Upper Midwest a definite advantage. 
Send resume and original cover letter stating interests and salary 
expectations to DSG, Job Referral No. 2814. 

-5- 



457 



*PRESS AIDE -- Democratic Senator seeks well-organized, energetic 
assistant to help press secrfstary manage media operations. Emphasis 
on radio, TV, maintaining local contacts. Hill experience 
mandatory, media experience desirable. Send resume and writing 
sample to DSG, Job Referral No. 2823. 



/ 



/ 



♦LEGISLATIVE ASSISTANT -- Liberal Member of Armed Services Committee 
seeks legislative assistant to handle committee work and foreign 
affairs issues. Previous Hill experience or defense and foreign 
affairs background a plus. Salary: Low- to Mid-twenties. Send 
resume to DSG, Job Referral No. 2824. 

*S1AFF ASSISTANT -- Northeastern Democrat seeks general staff person. 
Position will entail a broad range of duties, including telephone 
and incoming mail routing, computer data entry, and some legislative 
correspondence. Typing ability a plus; good writing skills essen- 
tial. Entry-level position. Salary: $14,000. Send resume to DSG, 
Job Referral No. 2825. 

♦LEGISLATIVE CORRESPONDENT -- Western Democratic Senator seeks 
legislative correspondent to cover labor, health, education, and 
women's issues. Good writing skills necessary. Salary: $18,000. 
Send resume to DSG, Job Referral No. 2826. 

♦LEGISLATIVE ASSISTANT -- Committee Chairman seeks legislative as- 
sistant for congressional office to handle correspondence on a wide 
variety of issues, draft statements, initiate mass mailings, and 
brief Member, etc. Must be efficient and show initiative! Minimum 
one year Hill legislative experience required. Send resume to DSG, 
Job Referral No. 2827. 

♦LEGISLATIVE CORRESPONDENT/RESEARCH ASSISTANT -- Senior Democrat on 
Senate Finance Committee seeks junior staff person to handle tax 
issues. Excellent writing skills essential; some background in tax 
and/or accounting preferred. Salary: $18,000. Send resume to DSG, 
Job Referral No. 2828. 

♦TYPIST -- Democratic Senator seeks good, accurate typist (55 wpm 
minimum) for newsletter and press-related material. Good gram- 
matical and proofreading skills required. Word processing helpful. 
Must work well under pressure and be able to meet tight deadlines. 
Salary: $18,000. Send resume to DSG, Job Referral No. 2829. 

♦COMPUTER OPERATOR -- Democratic Member seeks part-time computer 
operator for three and one-half month assignment. Prior experience 
with computers and typing (50 wpm minimum) required. We're looking 
for someone with a lot of initiative and strong organizational 
skills. Willing to train; hours are negotiable. Send resume to 
DSG, Job Referral No. 2830. 

♦STAFF ASSISTANT -- Legislative service organization seeks mature, 
organized individual for general office management duties, light 
correspondence, and meeting planning. Requires considerable 
telephone work. Should be a self-starter with good writing skills 
and attention to detail. Hours: 9 am to 3 pm. Salary: up to 
$9/hour. Send resume to DSG, Job Referral No. 2831. 



-7- 



458 



KUYKENDALL COMPANY 



June 10, 1986 



MEMORANDUM: SPITZ CHANNELL FOR THE NATIONAL ENDOWMENT FOR 
THE PRESERVATION OF LIBERTY 
FROM: DAN KUYKENDALL 

RE: CONFIRMATION OF CONSULTING ARRANGEMENT BETWEEN 
SPITZ CHANNELL AND DAN KUYKENDALL 



Dan Kuykendall hereby aorees that he will be available to 
Spitz Channell or his specific desianee for consulting in the 
area of politics, public affairs, and government operations 
for twelve (12) months beginning on June 1, 1986. 

It is agreed that Kuykendall will be available for personal 
or phone consulting whenever that service is needed on a 
reasonable basis. 

The Kuykendall Company will bill the "National Endowment for 
the Preservation of Liberty" for §3,500 at the end of each 
month, plus the cost of any travel or entertainment done by 
Kuykendall with pr;'.or approval of Channell. 



Signed this 10th day of June, 1986 , 



■?/'/■ 



, ,^ / ^ - ' ' 

Carl Russell Channell 
National Endowment for the 
PerservatioB of Liberty 

'' : - :/ ' 

Dan Kuykendall 
Kuykendall Company 



IP 






. "-■■-;' 



517 ird 6( reel ^\. • Wa»hinglon DC 20OC^ • 207/546 21% "' 



459 



KUYKENDALL COMPANY 



May 5, 1986 



Mr. Dan Conrad, Executive Director 

National Endowment for the Preservation of Liberty 

305 4th Street, NE 

Washington, D. C. 20002 

Dear Mr. Conrad: 

As per our agreement please consider this letter as an 
invoice for consulting, research, and resource information 
from the Gulf and Caribbean Foundation. Please forward your 
contribution of S5,000 to my attention at the following 
address: 

Gulf & Caribbean Foundation 
P. 0. Box 40841 
Washington, D. C. 20016 

This sum covers our advisory and consulting contribution to 
the CONTRA Aid effort for the remainder of 1986. 

Very truly yours, 




Dan Kuyk 



DK:lp 



'C^h^-J^' ^^f; ^ 



/ I- 5. 



ft 0i:-75?d: 



517 3rd Alrcct. At • Wa»hiii«loii D C 20003 • 201/546-21% 



460 



Dm K..kr.JJI 
Pr...i... 



KUYKENDALL COMPANY 



v! . if 



r -J 



M 



0'- 



\w 



June 10, 1986 



MEMORANDUM TO 

FROM 

RE 



SPITZ CHANNELL 

DAN KUYKENDALL 

YOUR REQUEST CONCERNING MONTHLY COSTS 

OF OPERATING GULF & CARIBBEAN FOUNDATION'S 

PRESENCE IN WASHINGTON 



MONTHLY BUDGET FOP GULF & CARIBBEAN FOUNDATION 



Consultina Services, Dan Kuykendall 
Adininistrat ive Services, Kuykendall Company 
Telephone, Postage, Supplies, Rent, etc. 



Consulting Services, IBC 

TOTAL FIXED BUDGET 
Travel (Monthly average, to be billed.) 

TOTAL INCLUDING VARIABLE 



$1 ,300 
750 
450 

S2,500 

1 ,500 

54,000 

450 

54,450 



IP 






7.'.-- 




sr<- 






M: Vd (S(rccl SI 



*B«hinglon lU' l<X<i^ 






461 



"^ 



'/-' 



KUYKENDALL COMPANY 



December 22, 1986 

Mr. Spitz Channell, President 

National Endowirient for the Preservation of Liberty 
1331 Pennsylvania Avenue, NW - Suite 350 
Washington, D. C. 20002 

Attention: Mr. Dan Conrad 

Fee due for services rendered for December, 1986 $12,000.00 

TOTAL DUE KUYKENDALL COMPANY §12,000.00 



KC:lp 






M7 Ird *lrccl 6t • TMhin^ton D C 20003 • 201/^46 21% 



462 



FINAL ARRANGEMENT BETWEEN THE KUYKENDALL COMPANY, DAN 
KUYKENDALL, AND SPITZ CHANNELL AND HIS VARIOUS ORGANIZATIONS 



Continue the presently existing personal 
consultina contract between Dan Kuykendall 
and Spitz Channell. Monthly Retainer. 

1. Advisor to all Channell organiza- 
tions regarding political and 
legislative matters. Monthly. 

2. Lobbying services. Monthly. 

3. Unlimited information retrieval, 
legislative tracking, legislati'^e 
analysis, social events. Monthly. 

Kuykendall is available to travel out of 
Washington for expenses only and, with 
reasonable notice, to speak to any Channell 
group, including PAC activity in which he 
is a spec lal ist . 

TOTAL MONTHLY FEE 



?3,500 

2,500 
3,500 

2,500 



$1 2,000 



The above includes personal services of Dan Kuykendall, 
Elizabeth Powell, and Ric Marino on a reasonable basis 
which, of course, means a major portion of each person's 
t ime . 



Payment Schedule (to be determined) 

1. Retainer payable monthly, in advance at the first of 
each monthly period: $12,000 monthly. 

2. Retainer payable guarterly, in advance at toe first of 
each quarterly period ( (^ $11,500 per month): 333,500 
Quarterly . 

3. Retainer payable semi-annually, in advance at the 
first of each six month period (3 $11,000 per month): 
$66,000 semi-annually. 



KC: Ip 
3/6/87 






/ 






463 



DETAILS OF ARRANGEMENT RETV.'EEN THE KUYKFNDALL COMPANY, DAN 
KUYKENDALL, AND SPITZ CHANNELL AND HIS VARIOUS ORGANIZATIONS 

A. Continue the presently existina personal 
consultino contract between Dan Kuykendall 

and Spitz Channell. Monthly Retainer. $3,500 

1. Advisor to all Channell oraaniza- 
tions reqardinq political and 

leqlslative matters. Monthly. 1,500 

2. Lobbyinq services. Monthly. 3,000 

3. Unlimited information retrieval, 
legislative trackina, leqislative 

analysis, social events. Monthly. 2,000 

B. Financial and Campaign Financial Services. 

Kuykendall Company owns one of the most up- ^ 

to-date and successful fund raisino systems 0"^ 

in Washington today, includina the services >^ 

of Bic Marino who was responsible for the \, 

staging of Washington events for the 

Broyhill Campaion, raising PAC contributions 

in excess of $1,200,000. Monthly. 2,000 

Kuykendall is available to travel out of 

Washington for expenses only and, with 

reasonable notice, to speak to any Channell 

aroup, includinq PAC activity in which he 

is a specialist. 



TOTAL MONTHLY FEE $12,000 

The above includes personal services of Dan Kuykendall, 
Elizabeth Powell, and Ric fiarino on a reasonable basis 
which, of course, means a major portion of each person's 
t ime. 



KC:lp 
1 1/7/86 






1c^i 



-> ^.»>*v. 



464 



September 29, 1986 



^ os*''^ I 



Mr. Spitz criannell 

SENTINLL 

1331 Pennsylvania Avenue, NW - Suite 3b5 

Washington, D. C. 20004 

Dear Spitz: 

Durinq ny twenty years as a Conaressnian and Consultant in 
Washington, I have participated in scores of worthwhile 
projects. Your SDI initiative is one of the snost excitino 
and essential such efforts in which I tiave been involved. 

The completed book and overlay rrap with which I worked for 
the first time last week rray well be the n^ost coi^plete and 
useful political document I have ever used. 

It is obvious that much expense and iponumental detail work 
went into the preparation of tnese documents. Ty experi- 
ence tells nie that most research projects never succeed in 
relating their work directly tc the political situation in 
a useful way. Your package does that beautifully. 

Congratulations on a job well done; I'm usino it! 

L^incere ly , 



ban i.uykendall 
DK:lp 



465 



Vv'u 



II, „ K, .L.n.L.ll 
' \\..< KllM I 

unglun, I) G, :!0U16 



September 15, 19B6 



C H 



05476 



Mr. Spitz Channell, President 

National Endowment for the Preservation of Liberty 
1331 Pennsylvania Avenue, NW - Suite 350 
Washington, D. C. 20004 

Dear Spitz: 

During my twenty years as a Congressman and Consultant in 
Washington, I have participated in scores of worthwhile 
projects. Your SDI initiative is one of the most exciting 
and essential such efforts in which I have been involved. 

The completed book and overlay map with which I worked for 
the first time last week may well be the most complete and 
useful political document I have ever used. 

It is obvious that much expense and monumental detail work 
went into the preparation of these documents. My experi- 
ence tells me that most research projects never succeed in 
relating their work directly to the political situation in 
a useful way. Your package does that beautifully. 

Congratulations on a 30b well done; I'm using it! 




'■'^y^^ 



DK: Ip 



466 



July 23, 1986 

C H 05477 

Mr. Spitz Channell, President 

The National Endowment for the Preservation of Liberty 

305 4th Street, NE 

Washinoton, D. C. 20002 

Dear Spitz: 

Now that we have aotten a favorable House vote on our first 
cooperative effort, I will take this opportunity to give you 
my analyis of the accompl ishir.ents. 

In the Spring of 1985 the first atteirpt to obtain military 
aid to the Contras was decisively defeated with our receiving 
only 180 votes in the House. 

Due to this very poor showing we were forced to change our 
tactics to seeking only humanitarian aid. Having been 
retained by the Gulf & Caribbean Foundation and private Texas 
clients I coordinated the outside (private) lobbying efforts 
to obtain this aid. We lost our first "showdown" (Michel I) 
by two votes but due to an intensive educational and lobbying 
effort we won approval of Michel II by sixty-three votes. 

In late 1985 I had my first experience workina in a voluntary 
coalition with NEPL and Spitz Channell. This was a result of 
our both using the services of IBC. In early 1986 Gulf & 
Caribbean received its first direct support from NEPL. This 
support enabled us to intensify our efforts to obtain 
military aid for the Contras. 

It became very obvious to ire that NEPL was the only oraan- 
ization with both the ability and the resources to run 
productive advertisina on aid to the Contras. Some other 
groups actually did more harm than good with their 
advert ising. 

On our first try in March we were able to qet 210 votes for 
military aid to the Contras, an improvement of thirty votes 
but still eight votea short. 

The months of April, "ay, and June saw the most intensive 
educational and lobbyino efforts by NEPL, dentinal, and Gulf 
and Caribbean that this issue has ever received. 



467 



Mr. bpitz ('hannfll 
Washinaton, D. C. 
July 23, 1986 



n 



bt/8 



We beoan the campaign with a taroet list of approx irrately 
forty members of Conaress. About ten of them were considered 
"soft" even thouah we Qot their votes in March. The taroet 
list of forty was about one-auarter Republicans and three- 
quarters Democrat. 

The educational type TV plus the various lobbyina efforts 
beqan to shorten the undecided list to the point that two 
weeks before the vote we specifically tarqeted thirteen 
Congressmen for the last push TV effort. Efforts beaan in 
earnest to remove people from the undecided list and, 
therefore, enable us to cancel the TV in their markets. We 
withdrew TV in Louisville and San Antonio before the schedule 
actually began because of commitments from three r;embers. 

Since I was retainer' hy Sentinal as Senior Consultant on June 
1, I became even more involved in media and lobbyino strateay. 

Even thouah we continued to work hard on an additional ten 
undecideds until the very last, our estimated vote count on 
June 23 was 222 votes with a proiection of an additional five 
Republicans and seven Democrats over ana above the March 
total of 210. We actually received all the original 210 plus 
five additional Republican and six Democrats. 

Immediately after our 221-210 victory on the Presiot-nt's 
package vs. the House Democratic leadership packaae, another 
interesting vote took place. A very liberal packaae with no 
military aid was offered against the President's packoqe. 
Twelve to fourteen people, all of whom had been on our 
orioinai undecided list, chanaed anc voted for the 
President's packaqe, includino military aid. 

All these last twelve to fourteen chanoes, plus the eleven 
additional votes we received on the initial vote or. the 
President's packaqe, were the successful tarqets of intensive 
educational and lobbyina efforts. I can say with total 
confidence that our various combined efforts were a major 
factor in more than half of the total. 

I am hopeful that this new relationship with its rultifaced 
capability will bring us many more victories in tlie future. 

Very truly yours. 



Dan Kuykenciall 



DK : 1 p 



468 



June 10, 1986 



0S*19 



MEMORANDUM: SPITZ CHANNELL FOR THE NATIONAL ENDOWMENT FOR 
THE PRESERVATION OF LIBERTY 
FROM: DAN KUYKENDALL 

RE: CONFIRMATION OF CONSULTING ARRANGEMENT BETWEEN 
SPITZ CHANNELL AND DAN KUYKENDALL 



Dan Kuykendall hereby agrees that he will be available to 
Spitz Channell or his specific designee for consulting in the 
area of politics, public affairs, and government operations 
for twelve (12) months beginning on June 1, 1986. 

It is agreed that Kuykendall will be available for personal 
or phone consulting whenever that service is needed on a 
reasonable basis. 

The Kuykendall Company will bill the "National Endowment for 
the Preservation of Liberty" for $3,500 at the end of each 
month, plus the cost of any travel or entertainment done by 
Kuykendall with prior approval of Channell. 



Signed this lOth day of June, 1986 . 

/ 



\ 



i ' -f// > 

Ca<;l_Russell Channell 
National Endowment for the 
P^servationyof Liberty 

V 



yDanKuykerjdSll 

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P BOX 225961 

DALLAS, TEXAS 75265 



DALLAS 



TYPE OF ACCOUNT 


ACCOUNT-NUMBER 


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CHECKING 


DATE: 03-31-86 



PAGE 



GULF S CARIBBEAN FOUNDATION 
P. 0. BOX ^08^1 
WASHINGTON, D C 20016 



SUrttMT OF ACTIVITT FOB THE PERIOO 03/01/86 THRU 0V31/86 TAXPAYER NUMBER 00-0000000 

TOUn BALANCE ON 02/28/86 MAS 163.38 

THERE MERE DEPOSITS AtC OTHER ADDITIONS 32,600.00 NUTCER OF DEPOSIT? MO OTHER ADDITIONS « 

THERE MERE CHECKS AM) OTHER SUBTRACTIONS 7,766.73 NUTBER ({F CHECKS AMI OTHER SUBTPACTIOtS 9 

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470 






March 12, 1966 



Mr. Dan Conrad, Executive Director 

National Endowment for the Preservation of Liberty 

305 4th Street, NE 

Washington, D. C. 20002 

Dear Mr. Conrad: 

As per our agreement please consider this letter as an 
invoice for conaultina, research, and resource information 
from the Gulf and Caribbean Foundation. Please forward your 
contribution of $10,000 to my attention at the followina 
address : 

Gulf and Caribbean Foundation 

P. O. Box 40841 

Washington, D. C. 20016 , 



Very truly yours. 



Dan Kuykendall 



DK:lp 



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C-17 



474 



March 26, 1986 

MEMORANDUM TO: SPITZ CHANNFL 
FROM: DAN KUYKENDALL 



RE: PERFORMANCE OF KUYKENDALL, ET AL , FOR 
CONTRA AID VOTE IN U. S. HOUSE OF 
REPRESENTATIVES 



I. The Kuykendall effort was made up of three different 
init iat ives , 

A. Personal escort and scheduling of Adolpho 
Calero and, to a lesser extent, Alphonso 
Robelo ar^others. 

B. Reorganization, guidance, and monitoring 
of volunteer group. 

C. Personal lobbying and congressional 
coordination by Dan Kuykendall 

II. Scheduling of Adolpho Calero. 

A. Republican Policy Committee - 40 members 

B. Republican Study Committee - 25 members 

C. East Coast Group: Congressman Jim 
Courter's office - 4 members 

D. Leadership Group: Congressman Bob 
Livingston's office - 4 members 

III. Contra Aid Volunteer Group. 

A. Met together for kick off and briefing by 
Pat Buchanan, Ollie North, Congressman 
Trent Lott, Congressman Dick Cheney, 
Adlopho Calero, Alphonso Robelo, and 
Enrique Bermundez. 

(1.) Eighteen of the top business 
lobbyists attended meeting. 

B. Confirmed calls were made on the following 
members with designated results: 



\(^\^a^jJS 



Ljop 



d-\^-wi 'f'^ 



475 



Paae 2. 

Memo To: Spitz Channel 

From: Dan Kuykendall 

Date: March 26, 1986 



NAME 

Daniel, Dan 

Fascell 

Jones 

Robinson 

Tallon 

Biaqgi 

Boner 

Hefner 

Pickle 

McKay 

Stall inas 

Mazzol i 

Whitley 

Coughl in 

McKernan 

Grad ison 

Roukema 

Rinaldo 

Green 

Hor ton 

Rowl and 

Tauke 





INFLUENCE 


VOTE 


LEVEL* 


Y 


3 


Y 


3 


Y 


6 


Y 


3 


Y 


5 


N 




N 




N 




N 




N 




N 




N 




N 




Y 


4 


Y 


6-7 


Y 


7-8 


Y 


5 


Y 


3 


N 




N 




N 




N 





IV. Personal Member Contacts by Dan Kuykendall: 



Mica 


Y 


Jones (Tenn) 


N 


Cooper 


N 


de la Garza 


N 


Daniel, Dan 


Y 


Coughl in 


Y 


Meyers 


Y 


Goodl ina 


Y 


Reaula 


Y 


Schulze 


Y 


Roukema 


Y 


Smith, Denny 


Y 


Smith, R. (Ore) 


Y 


Frenzel 


N 


Wylie 


N 


Tauke 


N 


Hopkins 


N 



(Released ) 



♦Based on a scale of 1 to 10. 



476 



Page 3. 

Memo To: Spitz Channel 

From: Dan Kuykendall 

Date: March 26, 1986 



Summary 



The performance of any group or idividual 
must, of course, be considered in the context 
of the total effort. It should be recoanized 
that all the contacts referred to in this 
report are with the actual Member of Congress . 
Staff contacts are not referred to in this 
report. 

The three "yea" votes that I have rated as 
6 or more are ones where I feel that our 
influence was decisive. The other ratings 
of under 5 are those where I feel we 
contributed to the total effort. 

I strongly feel that we have won the total 
effort since there is little doubt that we 
will prevail on the April 15 vote. Had it 
not been for the total NEPL effort the 
Speaker would not have had to promise a 
second vote to obtain the temporary 
victory on March 20. 



477 



July 23, 1986 



Mr. Spitz Channell, President 

The National Endowment for the Preservation of Liberty 

305 4th Street, NE 

Washinaton, D. C. 20002 

Dear Spitz: 

Now that we have aotten a favorable House vote on our first 
cooperative effort, I will take this opportunity to give you 
my analyis of the accompl ishir.ents. 

If. the Spring of 1985 the first atteirpt to obtain military 
aid to the Contras was decisively defeated with our receiving 
only 180 votes in the House. 

Due to this very poor showing wo were forced to change our 
tactics to seeking only humanitarian aid. Having been 
retained by the Gulf & Caribbean Foundation and private Texas 
clients I coordinated the outside (private) lobbying efforts 
to obtain this aid. We lost our first "showdown" (Michel I) 
by two votes but due to an intensive educational and lobbying 
effort we won approval of Michel 1 1 by sixty-three votes. 

In late 1985 I had my first experience workina in a voluntary 
coalition with NEPL and Spitz Channell. This was a result of 
our both using the services of IBC. In early 1986 Gulf & 
Caribbean received its first direct support from NFPL. This 
support enabled us to intensify our efforts to obtain 
military aid for the Contras. 

It became very obvious to me that NEPL was the only oraan- 
ization with both the ability and the resources to run 
productive advertising on aid to the Contras. Some other 
groups actually did more harm than good with their 
advertising. 

On our first try in March we were able to get 210 votes for 
military aid to the Contras, an improvement of thirty votes 
but 3till eight votes short. 

The months of April, May, and June saw the most intensive 

educational and lobbyino efforts by NtPL, dentinal, and Gulf 

and Caribbean that this issue has «^ver received. r t <^ t-^ 



478 



Pacie I. 

Mr. bpitz Channpll 
Washinaton, D. C. 
July 23, 1986 



We beaan the campaiqn with a taroet list of approximately 
forty irembers of Congress. About ten of them were considered 
"soft" even though we qot their votes in March. The target 
list of forty was about one-quarter Republicans and three- 
quarters Democrat. 

The educational type TV plus the various lobbying efforts 
began to shorten the undecided list to the point that two 
weeks before the vote we specifically targeted thirteen 
Congressmen for the last push TV effort. Efforts began in 
earnest to remove people from the undecided list and, 
therefore, enable us to cancel the TV in their markets. We 
withdrew TV in Louisville ^nd San Antonio before the schedule 
actually began because of commitments from three members. 

Since I was retained by Sentinal as Senior Consultant on June 
1, I became even more involved in media and lobbying strategy. 

Even thouoh we continued to work hard on an additional ten 
undecideds until the very last, our estimated vote count on 
June 23 was 222 votes with a pro;iection of an additional five 
Republicans and seven Democrats over ana above the March 
total of 210. We actually received all the original 210 plus 
five additional Republican and six Democrats. 

Immediately after our 221-210 victory on the President's 
package vs. the House Democratic leadership package, another 
interesting vote took place. A very liberal package with no 
military aid was offered against the President's package. 
Twelve to fourteen people, all of whom had been on our 
original undecided list, changed ano voted for the 
President's package, including military aid. 

All these last twelve to fourteen changes, plus the eleven 
additional votes we received on the initial vote on the 
President's package, were the successful targets of intensive 
educational and lobbying efforts. I can say with total 
confidence that our various combined efforts were a major 
factor in more than half of the total. 

I am hopeful that this new relationship with its multifaced 
capability will bring us many more victories in the future. 

Very truly yours. 



Dan Kuykendall 
DK:lp 



479 



Dotson/drg 



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 



ONCLASSIFIED 



ML. 



1. 



40QHiS 



DEPOSITION OF WILLIAM G. LANGTON 
EXECUTIVE SESSION 
Thursday, March 12, 1987 

House of Representatives, 
Select Committee to Investigate 
Covert Arms Transactions with 
Iran, 
Washington, D.C. 



The select committee met, pursuant to call, at 
in Room B-336, Cannon House Office Building. 



Piftiatly Declassified/Released on J-^f-^'^ 
under provisions of E.O. 12356 
by N. Menan, National Sacurity Councfl 




'"'fl/Uj/f/fn 



480 



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 



iCUSSIFIEI 



MS. NAUGHTON: We are on the record. 

This is the Langton Deposition, it is March 12, 
1987. My name is Pamela Naughton , staff counsel to the House 
Select Committee on Covert Arms Transactions with Iran. And 
if the people in the room will identify themselves. 

MR. LEON: My name is Richard Leon, I am Deputy 
Chief Minority Counsel for the House Select Committee. 

MR. BUCK: My name is Kenneth Buck, and I am Assistant 
Minority Counsel for the same committee. 

MR. BECKMAN: I am Robert M. Beckman, attorney for 
Southern Air Transport, Inc. 

MR. LANGTON: William G. Langton, President of 
Southern Air Transport. 
Whereupon, 

WILLIAM G. LANGTON, 
was called as a witness on behalf of Select Committee and, 
after having been first duly sworn, was exaunined and testified 
as follows: 

MS. NAUGHTON: For the record, you have already 
received a copy of the rules of the committee, is that correct? 

MR. BECKMAN: I have. 

MS. NAUGHTON: And a copy of our House Resolution? 

MR. BECKMAN: Yes, I have. 



UNCLASSIFIED 



481 



UNCIASSIRED 



1 EXAMINATION BY COUNSEL FOR THE SELECT COMMITTEE 

2 BY MS. NAUGHTON: 

3 Q So the record is clear, the information Mr. Langton 

4 will provide is confidential, because it is a business-type 

5 material that will be treated as if it is Executive Session 

6 material. However, it is not classified, and I explained to 

7 the reporter already before this that the deposition- will not 

8 be classified, although we will treat it confidentially. 

9 THE WITNESS: I appreciate that. 

10 BY MS. NAUGHTON: 

11 Q Could you give us your age please? 

12 A I am 40. 

13 MR. BECKMAN: Excuse me, ma'am. You mentioned, 

K when we talked on the telephone, you might want us to put on 

^8 the record why we are not providing the telephone records. 

'8 Would you like us to do that at this time? 

17 MS. NAUGHTON: Sure. 

18 . MR. BECKMAN: We were requested by the Chairman's 

'8 letter, dated February 25, 1987, to provide, among other things 

20 in 'paragraph 6, all telephone tolls and SAT records of long- 

2^ distance telephone calls, together with an explanation of the 

22 code numbers signifying the caller. 

23 The Southern Air long distance calls are made mainly 
2* on Watts lines using a computer that stores the information 
28 on the number called and the c^all^ within Southern Air in- its 



>r called and the caiier 

UNCIASSIHED 



482 



1 

2 

3 

4 

5 

6 

7 

8 

9 

10 
11 
12 
13 
14 
18 
16 
17 
18 
19 
20 
21 
22 
23 
24 
28 



UNCIASSIHED 



memory, and that memory is routinely erased at the end of a 
month so that the period we had agreed to search, January, 
1985 through October, 1986, was all unavailable. 

We did, however, advise you that there were telephone 
records of the MCI calls and AT&T calls. The MCI bills do 
not have information signifying the caller, nor do the ATST 
bills. 

We could provide some identification based on the 
AT6T credit card number. However, each month's bill ran 
between 300 and 400 pages in length, and we indicated to you 
that unless we heard otherwise, we respectfully submitted 
this was more burden than would be justified by the limiting 
information that would become available. 

MS. NAUGHTON: For the record, I agree with that, 
and if we have a specific question for a specific date or 
time or credit card number, we will get back to you and provide 
that specific information. 

MR. BECKMAN: Thank you. 

BY MS. NAUGHTON: 
" Q Mr. Langton, you told us your age is 40. Could you 
give us your address? 

^^^^^^^^^^^^^^^^^^^^^H that 
Q Your home phone number please? 



Your social security number? 



UNCLASSIFIED 



483 



I 

2 
3 

4 
5 

e 

7 
8 
9 
10 
11 



UNCLASSIHED 




A 

Q Is that the only number you have had, social security 
number? 

A Yes. 

Q Tell us what your educational background is please? 

A I have a Bachelor's Degree in Business Administration 
from the University of Washington in Seattle. 

Q Any post graduate work? 

A I did some post graduate work at Pacific Lutheran, 
a few classes at various universities around the country. 

Q Can you give us a rundown of your employment history? 

12 A Upon graduation from the University, I worked for 

13 Flying Tigers Line in Los Angeles, '72 through '75. I 

14 then relocated to Seattle with Alaska Airlines, from '75 

15 to '79, I think it was, Sunstrand Data Control, from '79 — 

16 no, I guess '78 to '79. I left Alaska in '78, and then '79 

17 through '83, Evergreen International Airlines. 

18 Q From what, "78 — 

19 ~ A '79 through '83. And since May of '83, I have been 

20 wirh Southern Air Transport. 

21 Q Let's start with the Flying Tiger employment. You 

22 were with them for how many years? 

23 A Three years. 

24 Q What was your position there? 

25 A I was first an operations analyst, then I later becam 



UNCUSSIFIED 



484 



24 
25 



mussra 



operations and maintenance analyst, and later manager of 
fuel administration. I am sorry, fuel and off-route planning 

3 I think was the proper title. 

4 Q During the time you were with Flying Tigers, did 

5 you know of any either contracts with or association between 

6 Flying Tigers and the Central Intelligence Agency? 

7 A No. 

8 Q Do you maintain any contact with anyone at Flying 

9 Tigers anymore? 

10 A What do you mean by contact? 

11 Q Have you talked to anyone at Flying Tigers in the 

12 past five years? 

13 A Sure. I still have some acquaintances there. 

14 Q Now, are you aware of, either through personal 

15 knowledge or otherwise, of any flights Flying Tigers have 

16 made to Iran? 

17 A No, I ajn not. 

18 Q Now, you mentioned you were with Evergreen for 

19 eibout four years? 

20 "A You mean recently? 

21 Q I mean since 1979. 

22 A No. 

23 Q You mentioned you were with E>/ergreen for four years. 
Again, I will ask you the saime questions. Were you aware of 
then, or are you aware of now any connection between Evergreen 



UNCUSSIFIED 



485 



UNCLASSIFIED 



8 



1 
2 
3 
4 
5 
6 
7 
8 
9 

10 
11 
12 
13 
14 
16 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 



and the Central Intelligence Agency? 

A No, I am not. 

Q Did Evergreen ever perform any contracts of which 
you are aware with the Central Intelligence Agency? 

A Not that I am aware of. 

Q Did Evergreen perform contracts with the Department 
of Defense? 

A Yes, they did. 

Q What was the nature of those contracts? 

A Log Air. 

Q Do you want to explain that? 

A Log Air is a pattern flight for the Department of 
Air Force. It's a re-distribution of general goods from air 
base to air base. It is a routine pattern clause. 

Q Would those be classified necessarily? 

A The — no, I don't believe so. 

Q I had another question for you regarding another 
carrier, Burlington Northern. Do they have an air unit that 
does charter flights? 

' A No, they do not. 

Q They do not? 

A No. 

Q They are simply freight haulers? 

A Yes. 

Q Now, you started with Southern Air Transport in May 



UNCLASSIFIED 



486 



18 
19 



UNCLASSIFIED 



1 of '83, is that correct? 

2 A That IS correct. 

3 Q What is your title? 

4 A I am President/Chief Operating Officer. 

5 Q Do you own any stock in the corporation? 

6 A No, I do not. 

7 Q Do you have any other sources of income other than 

8 your salary from the Corporation? 

9 A No, I do not. I am sorry, yes, I do. We have a 

10 bonus program, which is a source of income. 

11 Q Is that an annual program? 

12 A Yes, it is. 

13 Q Is that paid from the profits of the Company? 

14 A Paid from the profits of the Company, correct. 

15 Q Have you held the same title throughout your employ- 
's ment with Southern Air Transport? 

17 A Yes, I have. I never got promoted. 

- Q Why don't you just describe, in general, your duties 
at Southern Air Transport. 



20 "a I am Chief Operating Officer. I am responsible for 



21 



the daily flight activity and the general running of the 



*2 Company . 



23 



Q Were you aware when you went to work for Southern 



2* Air Transport that it had previously been owned by the CIA? 



25 



A Yes. 



UNCUSSIFIED 



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Q How were you made aware of that? 

A Just common knowledge in the industry. 

Q At the time you went to work for Southern Air, did 
you have to go through any clearance process? 

A Not at the time I went to work for the Company, no. 

Q At a later time? 

A Yes. 

Q For what purpose? 

A For our Log Air contract. A standard of any 
company that flies for Log Air is it must have a facility 
clearance, and its managment receives a Secret clearance 
check. 

Q Is that done through the Department of Defense? 

A I believe so. 

Q Now-, let's go right into the transactions in question 
the committee is concerned about, and I guess we should start 
once you became employed with Southern Air Transport m meeting 
DickGadd. Do you recall when you first met Mr. Gadd? 

A Yes, I do. 

Q When was that? 

A Summer of 1983. 

Q Had you known him prior to this? 

A No, I didn't. 

Q What were you told about him prior to meeting him? 



What do you mean? 



UNCUSSIFIED 



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Q Did he just walk in off the street one day and 
introduce himself? 



A 
Q 
A 

contract 
Q 

firm? 
A 
Q 
A 

Q 
A 



No. I was introduced to him by Mr. Bastian. 
What did Mr. Bastian tell you about Mr. Gadd? 
He was employed by Sumarico with which we had a 

Did Bastian say he was an employee or broker for the 



I don't know. 

He ]ust said Gadd worked for Sumarico? 
He was President of Sumarico. 
What was the nature of that contract? 
We had an agreement for which we provided an air- 
craft and trained flight crews and provided aircraft to 
Sumarico. 

Q For what purpose did Sumarico need this training? 
A The training was for our purposes, to assure the 
crews were of our standards and could be put in our -- 
Q So you leased your aircraft for tl/iler use? 
A That is correct. 
Q For what purpose? 

A They had a contract with, I believe, the Department 
of Defense. 

Q Do you know who their contract was with in the 



Department of Defense? 



UNCLASSIHED 



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UNCLASSIFIED 



12 



\ A I do not. 

2 Q Did you ever meet with Mr. Gadd or any employees 

3 of the Department of Defense? 

4 A No, I didn't. 

5 Q Did he ever tell you what division that contract 
g was with? 

7 A No, he did not. 

8 Q Do you know if it was with Air Force or Navy? 

9 A I do not. 

10 Q Where were these flights to go? 

11 A I don ' t know. 

12 Q Well, when he leased the aircraft from you, did you 

13 ask him where they were going? 

14 A Some of the flights were within the Continental 
16 United States-. 

16 Q Were they all? 

17 A I believe most of them were. I don't know for a 

18 fact that all of them were. 

'9 Q Did they haul anything on the flights? 

20 - A Not at all. 

21 Q Did you get compensated by the hour? 

22 A By the hour, yes. 

23 Q Do you recall how long the contracts were for? 

24 A The contract expired in May of 1986. 
25 



UNCLASSIFIED 



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13 



1 BY MR. LEON: 

2 Q When you say you don't know where the flights were, 

3 does that -- are you saying that you can't recall, or you 

4 didn't know then? 

5 A I can't recall. 

6 Q Is that something you could determine? 

7 A Yes. 

8 Q By looking back in records? 

9 A Sure. 

10 Q So if we were to ask you to look, would you be willing 

11 to look through your records to determine that? 

12 A Yes. 

13 Q Do you believe you still have those records to look 
1* through? 

16 A I believe our flight records, yes. That is all we 

^6 would have. 

'7 MR. BECKMAN: You can get the logs? 

THE WITNESS: I think our flight logs are retained 
for five years, so I am sure they are available. 
BY MS. NAUGHTON: 
Q Mr. Langton, have you heard of the Delta Force? 
A Yes, I have. 

Q Did these flights have anything to do with the 
Delta Force, to your knowledge, whether it be hearsay or direct 



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*' knowledge? 



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MR. BECKMAN: Could we go off the record? 
MS. NAUGHTON: Off the record. 
(Discussion off the record.) 
MS. NAUGHTON: You can go back on. 
BY MS. NAUGHTON: 
Q Do you recall how you received payment for these 
flights from Sumarico? 

A Yes. We were paid by check. 

Q From Sumarico? 

A From Sumarico, correct. 

MR. LEON: Could we have that spelled for the record, 
if you know how to spell it. 

THE WITNESS: S-u-m-a-r-i-c-o. 
BY MS. NAUGHTON: 
Q Was. there any problem in payment? 
A Never . 

Q Now, there came a point — first of all, I am about 
to Etart/|^^^^^^^^^H flights to Central America arranged by 
Mr. Gadd. I want to know, prior to this time, was there any 
otiTer activity with Mr. Gadd other than the flights we have 
just discussed? 
A No. 

So the next enterprise by Mr. Gadd is the] 
Central America flight, is that correct? 
A That is correct. 




UNCLASSIFIED 



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Q Could you tell us how that came about? 

A Which ones? The very first ones? 

Q Well, the first flight occurred, do we agree, in 

January, 1985? 

A We didn't perform a flight then — 

Q Correct. 

A -- but I was contacted by Mr. Gadd and asked if we 
could perform, which we could not, and we arranged for sub- 
service. 

Q Do you recall when you were contacted by Mr. Gadd? 

A December of '84. 

Q What did he say he wanted done? 

A He said he would like to have a charter] 
to, X believe it was^^^^^^^^^^^H/with Class C explosives. 

Q Class C? 

A Yes. 

Q Did he tell you what for? 

- A No. 

Q What kind of equipment did he need, what kind of 
airplane? 

A He needed a jet to carry about 100,000 pounds. 

Q Did he say for whom he was working? 

A No, he did not. 

Q Did you assume it was a government contract? 




A No. 



UNCLASSIFIED 



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UNCUSSIHED 



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Q Did you think it was a private contract? 

A I didn't know. 

Q Do you recall when he had -- excuse me, where you 
were when you had this discussion? ;, 

A I think I was in my office. 

Q He called you on the phone? 

A Yes. 

Q And what did you tell him regarding these flights 
he wanted to do? 

A I told him I would love to do it on a Here. That's 
all we had. 

Q That IS the Hercules aircraft? 

A Yes. 

Q v«/hat was his response? 

A He thought that would be great, but he didn't want 
to pay the price because it would take two Hercs to do the job 
of one jet. So it was very simple. I couldn't help him. 

Q V«rhen he first approached you about this, did he 
ask for just one flight, or was it going to be a series of 
flights? 

A I believe it was just one flight. 

Q And when he rejected the idea about using the 
Hercules aircraft, what did you suggest? 



That he find a jet. 
And what did he say: 



UNCLASSIFIED 



494 



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19 
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UNCUSSIFIED 



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1 A He said, can you help me? 

2 Q And did you? 

3 A Yes. 

4 Q And how did you help? 

5 A Turned it over to the Vice President of Operations, 

6 Dave Mulligan, and he sub-serviced it with Arrow Air. 

7 Q Did your company receive a commission? 

8 A I hope so. I don't know for a fact, but I hope so. 

9 We should have. 

10 Q Why arrange with Arrow Air? Why them and not someone 

11 else? 

12 A No reason. They were ^ust available. I know we 

13 made several phone calls to different carriers to see who had 
availability of aircraft, and they happened to have it. 

15 Q Do you know personally the man who owns Arrow Air? 

16 A Do I know him personally? 
Q Do you know the owner — first of all, do you know 

who the owner of Arrow Air is? 

A George Baskin. 

Q Do you know him personally? 

A Yes. 

Q Are you aware of any other air carriers that he owns? 

A Well, at that time I believe he owned Capitol. 

What else was available? I don't know. That is the only 
one I can remember at the time. They may have been out of 



'."^A 



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business by that time. 

Q Have you ever heard of International Air Leasing? 

A Yes. 

Q Does he own that? 

A I believe he owns it, but I don't know for a fact. 

Q What kind of work do they do? 

A They are a leasing company. 

Q Same as Arrow Air? 

A No. Arrow Air is an operating company. 

Q Could you explain that for us? 

A Which? 

Q The difference. 

A Between a leasing company and an operating company? 

Q What does a leasing company do? 

A They drive leased airplanes. They are a financial 
organization. That is basically all they are. They have 
assets and lease them for a rate of return. 

- Q Do you know whether International Air Leasing has 
done work for the CIA? 

A I do not. 

Q Do you know whether Arrow Air has done leasing? 

A I do not. 

Q Do you know whether or not Arrow Air has flown any 
flights to Iran since 1979? 

A I do not. 



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ONCLASSIFIEO 



19 




Q How about, do you know whether or not Arrow Air 
has flown any flights to the Contras in Nicaragua or around 
Nicaragua since the^^^^^^f lights? 

A I don ' t know . 

Q Now, what was your personal involvement with these 
flights, if any? Could you describe that? 

A The initial one was just simply getting the phone 
call, and they turned it over to Mr. Mulligan. 

Q Did Mr. Mulligan report back to you? 

A Yes. 

Q What did he tell you? 

A He said he had arranged with Arrow to sub-service 
the flight, and it went smoothly. 

Q He told you it went smoothly? 

A Yes, 

Q He didn't tell you there were any problems? 

A Not that I can recall. 

I take that back. There was one. They were late. 

Q Who was late? 
* A Arrow. 

Q With what? 

A They ran a common carriage operation between New 
York and San Juan, and they were delayed almost 12 hours, if 
I recall, coming off of that before they were availeible to 
do the charter. 



UNCLASSIFIED 



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UNCLASSIFIED 





20 

Arriving ^^^^^^^B 

A Late, yes. 

Q Did he mention any other problems in loading? 

A No. 

Q Do you happen to know where ^^^^^^^^h-- now, I am 
speaking about all ^^^^^^^^H flights generically for a minute. 
Do you know where these airplanes were actually loaded | 

In other words, there are several runways at the 
airport; there is civilian, military, there is] 
Do you know which were used? 

A No, I do not. 

Q Who would have that information? 

A Gees, I suppose one of the crew members that were 
there would know where we were loaded. 

Q That doesn't narrow it down too much for us. Can 
you tell us how we should frame our inquiry to your company 
so that we could get that information? 

- A I think if you asked specifically where the aircraft 
was loaded, I will get you the answer. A specific location. 
BY MR. LEON: 

Q Would your flight logs indicate who the pilot was 
that day? 

A Flight logs would indicate it, yes. 

Q Would the flight logs indicate where it was loaded? 

A The flight log would indicate who the pilot was. 



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That would be it. 

Q Perhaps the pilot would recall? 

A That is what I just said. I could check with a few 
of them and see if they recall exactly — I am not familiar 
with the airport, so we would have to get a jet chart out 
and have them point. 

BY MS. NAUGHTON: 

Q Did Mr. Gadd call you after that first flight in 
January to arrange for any more f light s^^^^^^^^^H to Central 
America? 

A Yes. He asked us to do another one, I think it was 
in March of "85. 

Q How did this come about? 

A Phone call. Same thing. He said "I will give 
Dave a call and see what he can do." 

Q How did Mr. Gadd pay for the first flight? 

A Check. 

Q From Sumarico? 

A I believe we got a check. 

Q From Sumarico? 

A I don ' t know . 

Q If you received a check, whose account would you have 
credited? 

A We would have credited Southern Air's account, and 
then we would have charged, written a check for Arrow's account 




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Q What I am saying, when the money would have come in 
from Mr. Gadd, whose account would have been credited for 
receiving that? 

A Mr. Gadd's account. 

Q But he didn't have a personal account with your 
company . 

A It was Sumarico and later beceune East. Whatever 
g company it was at that time is the one that would have gotten 
g charged. 

^Q Q Did you know at this point, in January, 1985, 
^^ whether he was East or whether he was Sumarico? 
^2 A I don't recall. I don't recall which one he was. 

13 I know there was a name change, but I don't know when. 

14 Q When you say there was a name change, is it your 

15 understanding- they are one and the Seune company? 

16 A Yes. Just a name change. 

17 Q Do you know why there was a name change? 

18 To your information, who owns East? 

19 A I don't know. 

20 " Q Do you know who owns Sumarico? 

21 A No, I do not. 

22 Q Now, to your knowledge, did the first flight, that 

23 is the January, '85 flight, land in] 

24 I don't know. 

25 Q Do you know who accepted delivery? 




:now who acceptea aeiiver 

UNCl^SIFIED 



500 



NCLASSIFIED 



23 




y A • I do not. 

2 Q On the subsequent flights that SAT f lew i 

3 to Central America, where would the records be of the landings; 

4 in other words, where did the plane actually land? 

5 A On the flight record. 

g Q Are those completed after the flight is performed? 

7 A Yes, right. 

8 Q So if for some reason, for some emergency, some 

9 reason, the pilot had to sit down in a place other than he had 

10 planned on, that would be recorded in the flight — 

11 A Yes, it would. 

12 Q If you would wait until I finish my question, he can 

13 get the answer down. He can't get it when we are both talking. 

14 A I thought it was a statement. 

15 Q If you wait, the question mark will be at the end. 

16 So the plan that the pilot might file or should file 

17 before the flight actually takes off might be different from 

18 where he indeed flies if there is some emergency or some reason 

19 to put down in another spot, is that right? 

20 A That is correct. 

21 Q Now let's go to the second flight then in March of 

22 '85. You said Mr. Gadd called you again for the same reason, 

23 and you again directed him to Mr. Mulligan, is that correct? 
2* A That is correct. 
28 Q What happened then? 



UNCLASSIFIED 



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UNCUSSIFIED 



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A He flew the charter, sub-service charter by Arrow. 

Q Whose idea was it to call Arrow again? 

A I imagine Mr. Mulligan's, I don't know. 

Q You didn't direct him to call Arrow? 

A No. 

Q Do you know why he called Arrow if he had had less 
than adequate service from him before? 

A I don't know that was the only one he called. I just 
don't know. 

Q Okay. Do you know what sort of plane they used5 

A Yes. They used a DC-8.. 

Q How do you know that? 

A I was told. 

Q By whom? 

A By Mr. Mulligan. 

Q And where did they pick up| 
do you know? 




on this flight. 



- A 

^ Q 
A 

Q 
flight? 
A 



No, I do not. 

Where did they land on this flight? 

I don ' t know . 

And how was your company paid for the March, '85 



The same way as the January flight. 

BY MR. LEON: 

Let me ask you this, Mr. Langton. Would you have 



3 the January tiignt. 

UNCLASSIFIED 



502 



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UNCLASSIFIEI 



25 



1 known — before you asked Mulligan to arrange for the sub- 

2 contract with Arrow, would you have known where they intended 

3 to fly to? Is that the kind of thing Mulligan would have told 

4 you, or Gadd would have told you? 

5 A Sure. 

6 Q If they had told you they were flying to a place 

7 that you don't normally fly to, would you remember that? 

8 A Probably. 

9 Q Were there some places in Central America where you 

10 either didn't normally fly or wouldn't fly to? 

11 A We do charters all the time. 

12 Q Let me give you an example. Back there at that time, 

13 did you have any flights to Nicaragua? 

14 A No, we didn't. 

15 Q If someone had come in asking for you to do a deal 
18 with them where you would fly something to Nicaragua, would 
17 that have caused you to pause? 

1* - A It most certainly would. 

Q Okay. So do you think it is probably safe to say 
this wasn't a flight to Nicarag\ia? 

A That would be a safe assumption. 

Q But you could check this anyway in your records, 
is that right? 

A Well, we don't have the records. We didn't fly the 
flights, so we wouldn't have any records. Arrow would as 



uxVii uiicuA. uiixa anyway xii 

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to what they flew. 

Q How about back at that time, Costa Rica, were you 
doing deals with flights to Costa Rica? 

A I believe so. 

Q So that might not necessarily have caught your 
attention. 

A No. 

Q How about El Salvador back at that time? 

A We did flights there as well. 

Q How about Honduras back at that time? 

A Yes. 

12 Q So you are not recalling today, if it had been a 

13 flight to one of those three countries, Costa Rica, Honduras 

14 or El Salvador, it might be because it wouldn't have been an 
IB uncommon flight at that time. 

16 A No, it was a straightforward charter. We do them ai: 

17 the time. I just don't recall exactly where the destination 

18 waa^ I don't have the records for it, so I am sorry, I can't 

19 help you. 

20 Q But it would have been flagged in your mind and 

2t Mulligan's mind if it was a place you didn't normally go to. 

22 A It would stand out. It sure would. 

23 BY MS. NAUGHTON: 

24 Q After the March, 1985 flight by Arrow Air, when was 
26 your next contact with Mr. Gadd regarding any more/ 



ii. . x^ auxc wuuxu. 

UNCUSSIHED 




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Central America flights? 

A In December of '85. 

Q And what happened in December of '85? 
A He asked for another flight. 

Q To the best of your recollection, tell me what he 
g told you. 
J A He called me and asked if we could perform a flight 

with class C explosives ^^^^^^^^^|to Central America. 
g They said, certainly you have a plane to do the job. 
^Q Q You since acquired an airplane? 
^\ A Since acquired an airplane. 

^2 Q What type of airplane? 
^3 A Boeing 707C. 

t4 Q Would you explain to me the difference between a 
)5 class C explosive and class A explosive? 
fS A I can't. There is all kinds of categories of 

17 explosives, and I really don't know the difference between 

18 the two. 

19 Q Who filled out the hazard materials form? 

20 A The consignee would. 

21 Q That would be Gadd's responsibility? 

22 A No, probably the customer, whoever that was, in 

23 ^^^^|W Whoever the_ shipper was would fill out all the proper 

24 paperwork. 

25 Q Now, Mr. Langton, is it your position, then, that 



the shipper was would fi; 

UNCLASSIFIEO 



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ONCUSSIHED 



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as carrier you had no responsibility to any Federal agency 
to complete any form? 

A Our responsibility is to assure there is proper 
paperwork with all shipments, yes. Then we fill them out. 

Q My question is to you then: Who filled out the 
hazard materials, the Department of Transportation hazard 
materials? 

A This is a foreign flight. 

Q So then — 

A Nothing touched the U.S., so I am not even sure we 
were required to fill out any DOT hazard materials. There 
would have been a notification requirement. I don't know what 
all our requirements are on a foreign flight such as that. 



.. But whatever they were, they would have been filled out properly 



or we couldn't take the trip. 

Q If the customer were to fill them out, who was the 
customer? 

A As I said, I don't know. 
fg Q Well, your statement is then — 
20 A Mr. Gadd is a broker. 
2\ Q Your statement is then that your planes were carrying 

22 hazard materials, it was not your job to fill out the paper- 

23 work, but you don't know whose it was? 

24 A My statement is we had a charter. They constantly 

25 would fill out all the paperwork, and we would fly the charter. 



to lixi out tne paper- 

UNCLASSIFIED 



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We would fill out our portion, and^Wey would fill out theirs. 

Q Would you have a copy of that? 

A No. 

Q You would not keep a copy? 

A We were required to keep that paperwork for 90 
days, and it is routinely destroyed. 

Q Who requires you keep it for 90 days? 

A DOT. 

Q Do you know what sorts of explosives these were? 

A No, I do not. 

Q Were they for commercial or military use? 

A I do not know. 

Q Did you ask? 

A No, I didn't. 

Q Why not? 

A I don't know why I would. 

Q Well, wouldn't it concern you if they were carrying 
daixgerous materials on your aircraft? 

A We routinely carry explosives around the world. 
That is the business we are in. 

Q Do you take special precautions or special safety 
arrangements? 

A Yes, we do, 

Q Do you then not have to know the type of material 
and substances you are carrying? 



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A Yes. Right. 

Q Then I ask you again: Did you know or did you ask 
what type of substances were being carried? 
A I did not. 

Q Who wouid have asked that question? 
A Probably Dave Mulligan. 
Q Anyone else? 
A Bob Parison. 

Q Bob who? • ' ■ . 

A Parison. 

Q Could you spell that? 
A p-a-r-i-s-o-n. Director of Operations. 

BY MR. LEON: 
Q Is that because, Mr. Langton, they would have to 
assure that the packaging was adequate to assure it didn't 
go off in raid air or something like that? 
A That is correct. 
Q That was their responsibility? 
A That IS their responsibility to be sure that everythin 
is done according to our regulations. 

Q Is it common for you to get. involved in the details 
of that kind, of making sure the packaging is proper, or what- 

■■ UNCLASSIFIED . , . 

A I don't normally get involved in those details, no. 
Q Let me ask you this: Since you have been with Souther 



508 



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31 



f Air, going on quite a few years now, at least three years, fou. 

2 years, have you had any occasions where you got involved becaui 

2 of the packaging before they put it on the plane or while they 

4 were putting it on the plant, it was inadequate, and they 

g wanted to abort the mission because -- can you recall that 

g happening? 

■J A No, I can't. 

g BY MS. NAUGHTON: 

g Q Do you know where these came from? 

10 A I do not know. 

tt Q Were they U.S. made? 

^2 A I do not know. 

13 Q Who besides Mr. Gadd would know? 

14 A You would have to ask the crews^^^^^^^|if they saw 
IB anything on it. 

16 MR. BECKMAN: The consignor might know? 

17 THE WITNESS: The consignor or consignee would 

1 8 know . 

19 BY MS. NAUGHTON: 

20 Q But you don't know who those people are, is that 
21 

22 A I don't know for a fact. I was told it was defects 
23 

24 Q Did Mr. Mulligan tell you that or Mr. Gadd? 
2B A Mr. Mulligan told me. that. 




Know ror a. zacz.. x was 

UNCLASSIFIEO 



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UNCLASSIFIEI 



32 



1 Q Did Mr. Mulligan explain to you the difficulties 

2 he had in having to call defects and so forth? 

3 A No. I didn't know we had any difficulties. 

4 Q What do you know about defects? 

5 A Nothing. 

6 Q Well, you just brought up the nautie , so is all you 

7 know about defects what Mr. Mulligan told you? 

8 A Yes. 

9 Q How were you paid by Mr. Gadd for all these flights? 

10 Is it your testimony it was by check? 

11 A No, that is not my testimony. It was by check or 

12 wire transfer. I really don't know how we were paid. I know 

13 we were paid. 

14 Q Were you paid the entire balance? 
IB A Yes. 

18 Q And on time? 

'7 A Yes, 

^* Q Do you know what Trans World Arms, Incorporated, 



is? 



A No, I do not. 
*' Q Have you ever heard of that company? 
*2 A Not to the best of my knowledge. 

23 Q When was — did you fly a flight for Gadd from 

24 ^^^^H to Central America in December of '85? 
28 A Yes. 



UNCLASSIFIED 



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Q That was a SAT plane? 

A That was a SAT plane, yes. 

Q Was a flight plan filed? 

A Yes. 

Q Where did the plane land? 

A I don't know. I don't have it in front of me, 



UNCLASSIFIED 



f 



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eal 1 



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All right. Could you check that this eveQing and 
come back tomorrow and tell us? 
A Sure. 

MR. BECKMAN: How can you check this evening? 

THE WITNESS: I will call the office and tell them 
to pull the flight. 

MR. BECKMAN: Is there going to be somebody there 
this evening? 

THE WITNESS: There is somebody there 24 hours a 
day. 

MR. BECKMAN: What is it we are going to get? 

THE WITNESS: We are going to get the December '85 
flight plan for the Boeing from^^^^^Hto whatever. 

MR. LEON: Whoever the pilot was. 

MR. BECKMAN: Are you sure we haven't provided this? 

THE WITNESS: You did provide it. But I'll call the 
office. 

MS. NAUGHTON: There is a blank in that. I wouldn't 
hav£ asked the questions otherwise. 

MR. BECKMAN: Could you show it to us? 

MS. NAUGHTON: I have stacks of documents. I 
couldn't haul them all over here. 

THE WITNESS: There cannot be a blamk. 

MR. BECKMAN: Cam we go off the record a second? 

MS. NAUGHTON: Yes. 



UNCUSSIHED 



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(Discussion off the record.) 
MS. NAUGHTON: Can we go back on. 
BY MS. NAUGHTON: 
Q Now, after December of '85 did you make any more 
flights for Mr. Gadd ^^^^^^^^^^H to Central America? 
A Yes. 

Q Do you recall when those were? 
A No, I don't, not off the top of my head. 
Q Would that have been February 7th through 9th of 
1986? 

A Could have. 

MR. BECKMAN: What is this? 

THE WITNESS: She is asking me about the next flight. 
BY MS. NAUGHTON: 
Q Mr. Langton, your attorney has provided a chronology 
of these flights. Did you review that with them — 
A Yes, yes. 
. Q Could you wait until I finish the question. 
Did you review that with them prior to them 
submitting it to this Select Committee? 
A I did not, no. 

Q Have you seen it since its submission? 
A Yes, I have. 
Q And is there anything in there that to your 



knowledge is incorrect? 



UNCUSSIFIED 



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A I think I had better see specifically what you are 
referring to. What I have looked at is factual. 
Q Okay. 

MR. BECKMAN: In fact, you told me eibout one thing 
there you couldn't agree with, something I had in there 
happening in January. 

BY MS. NAUGHTON: 
Q I would like to show you -- it has not been numbered, 
but it is a chronology prepared by Mr. Beckman's office, dated 
January 23, 1987. Do you recognize that chronology? 
A Yes, I do. 

Q Now, correct me if I'm wrong, Mr. Langton. My 
information is that on February 7th thro ugh 9th that your 
company performed a flight for Mr. Gadd ^^^^^^^^Hto Central 
America landingf^^^^f^H Is that 
Off the record. 
(Discussion off the record.) 
MS. NAUGHTON: Let's go back on the record. 
BY MS. NAUGHTON: 
Q Mr. Langton, are you aware of a flight on March 2, 
1986 at^^^^^^^^^^^^^^^Hby 

A Yes, 1 am. 

Q Could you tell us about that? 
A It was a routine charter. 
Q For vrtiom? 



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UNCLASSIRED 

For Mr. Gadd. 

Where did it originate? 

I believe! 



37 




A 

Q 

A 

Q So it was part of these flights that we have been 
discussing? 

A Yes, it was one of those flights. 

Q All right. To your knowledge had you landed at 

for any other customer during 19 86? 

A Yes. I believe we have landed there for our MAC 
flights. 

Q Those are Department of Defense flights, and that 
is MAC for the record; is that correct? 

A That's correct. 

Q So the March 2 entry could have been for Department 
of Defense flights; is that correct? 

A No, that's not correct. 

Q All right. How do you know it was a Gadd flight? 
. A It went ^^^^^^^^^H to Central America. We don't 
fl^ international foreign flights for the Department of 
Defense . 

Q Okay. Good. 

Go ahead, did you want to — 

A I mean it is to- foreign locations, we don't do 
it for the Department of Defense. 

Q What would Mr. Gadd or your operations pebpre~need to 



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do to land at a U.S. Air Force Base? 

A We would need to receive clearances. 

Q And when is that accomplished? Prior to the time 
the flight is in the air? 

A Usually, yes. 

Q And could you tell me how that is done? 

A I cannot. The director of operations would have to 

answer that. 

Q Who would obtain the clearance? Would that be your 
company or would it have been Mr. Gadd who made that arranqe- 

ment? 

A It would be our responsibility to assure clearances 
have been received, aind it could have been done by us or 
verified by us. 

MR. BECKMAN: Excuse me. I might be able to be 
helpful here because the witness and you might be on slightly 
different wavelengths. Are you asking more than contact the 
Air- Force Base in advance, telling them you want to land and 
have them tell you you cannot? That much you know yourself. 



right? 



THE WITNESS: Yes, 



UNCUSSIFIEO 



MR. BECKMAN: But you are thinking Ms. Naughton might 
be asking for something more detailed and precise than that. 

THE WITNESS: We would make sure we have landing • 
rights wherever we are going before we depart. That would be 






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UNCLASSIFIED 



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the normal procedure. 

MR. BECKMAN: And these landing rights could be in a 
telex message? 

THE WITNESS: Sure. Normally are. 
BY MS. NAUGHTON: 

Q My question is: Is there anything special that has 
to be done to land at a U.S. Air Force Base? 

A Nothing more special than contacting and asking for 
landing approvals. 

Q All right. Do you have to tell them what the nature 
of your flight is? 

A Yes. 

Q All right. And do you recall for this particular 
flight what the Air Force was told was the nature of the 
flight? 

A No, I do not. 

Q Would Mr. Mulligan know that? 
- A Possibly. . • 

BY MR. LEON: 

Q Let me ask you this, Mr. Langton. Do you fly into 
U.S. Air Force Bases when you are not flying on U.S. 
Department of Defense business? 

A Seldom. 

Q What kind of circumstamces or what kind of situations 
have you done that where it wasn't on Department of Defense 



UNCLASSIFIED 



517 



iiNCUSsra 



40 



1 business? 

2 A A diversion. 

3 Q Could you explain what that means. 

4 A We may have a weather diversion and that may be the 

5 only base, air strip to divert into or there may be — 

6 other than the Department of Defense movement, like the 

7 Department of Interior, State Department, other qovernment 

8 agencies. .,■;-•■. 

9 Q Let's put it this way. Can you recall under what 

10 circumstances, other than a diversion because of weather or 

11 you were on government-related business, where you did land 

12 at a U.S. Government Air Base? 

13 A Repeat that. 

14 Q All right. Other than when you were flying on a U.S. 
'5 Government contract, either for the Department of Defense or 

18 some other agency of the Government, other than that and 

^' other than the circumstances surrounding a weather diversion, 

^^ can. you think of any other situations where your planes have 

19 landed on U.S. Air Force Bases or U.S. Bases other than this 
**^ one here involving — 

2' A I cannot, no. 

22 Q other than this situation here involving Mr. Gadd's 

*■' request. 

2* So, in other words, this was pretty unique? 

25 MR. BECKMAN: Excuse me. You haven't established 



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from the witness whether this was or was not a government 
operation. Are you assuming you have already established 
that Mr. Lemgton knows for whom Mr. Gadd was operating? 

MR. LEONs Oh, I shouldn't assume that, of course. 
MR. BECKMAN: Make the record complete. 
BY MR. LEON: 

Q Do you know or did you know then -- do you know now 
or did you know then on whose behalf Mr. Gadd was operating? 

A No, I do not. 

Q But when you went to the Air Force Base to request 
authorization to land, did you inform them on whose behalf 
you were delivering the materials? 

A Let me clarify one thing. I don't sit down in the 
operations center and arrange for flight clearances, et cetera. 
So I don't know 2my of this. 




I don't know. 

MR. BECKMAN: Is it conceivable Gadd arranged it? 

THE WITNESS: It is very conceivable. Often our 
customers will arrange for clearances and all we need is a 
verification that it has been done- That is enough to 
satisfy us. 

BY MR. LEON: 



ONCIiSSIFIED 



Would you note that somewhere in your records, that 



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you had received the verification? 

A Well, the very fact that we arrived and landed and 
left — 

MR. BECKMAN: Without being shut down. 
THE WITNESS: — would indicate we received the 
clearance . 

BY MR. LEON: 

Q Do you get them usually orally over the phone or 
in writing? 

A Most of them are on a telex copy, but there are 
occasions when we get it orally. • 

Q Do you keep those on the telex copies? 

A We keep it in the flight log and then they are 
routinely destroyed after 90 days. 

Q Is it entered onto the flight log? 

A No. I don't think there is a box there. 
BY MS. NAUGHTON: 

Q Now, by this time, Mr. Langton, you had done 
business with Mr. Gadd for about a year and a half or more ; 
is that correct? 

A That's correct. 

Q And what sort of relationship did you have with 
Mr. Gadd? 

A Define relationship. What do you mean? 

Q Did you have a friendship >LLth_Ml.. Gadd as well as 



iwimm 



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business association? 

A What do you mean by friendship? 

Q All right. Did you ever meet socially with Mr. 
Gadd? 

A No. 

Q Did you ever have dinner with Mr. Gadd? 

A Yes. 

Q All right. But you consider those business dinners? 

A Yes, I do. 

Q All right. Did you ever attend a sporting contest 

with Mr. Gadd? 

A I don't think so. 

Q Did you ever play golf with Mr. Gadd? 

A No. 

Q Did you ever attend a cocktail party with Mr. Gadd? 

A I believe so. 

Q Could you tell me when and where? 

- A It was at Mr. Bastian's house, and I have no idea 
wheQ that was, but it was a business cocktail party we had. 

I cannot recall when it was now. 

Q Is that the only cocktail party you ever attended 

with Mr. Gadd? 

A Yes. 

Q Approximately how often did you speak to Mr. Gadd, 
let's say in a month's period of timell 



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1 A Which month? 

2 Q Well, would it depend then — 

3 A Yes 

4 Q -- are you saying, on the kind of business you 

5 were doing? 

6 A Right 

^ Q How often did you visit his offices? 

8 A Very seldom 

^ Q Could you give me a ballpark figure? 

''0 A Numeric number? 

Q Yes. 

A Five. 

^3 Q Where were his offices? 

'^ A In Vienna 
16 



Q Virginia? 

A Virginia, yes. 
^^ Q Now, did there come a period of time at which Mr. 
Gadd approached you and Mr. Bastian regarding supplying the 
eontras in Nicaragua? 

A What do you mean "supplying"? 

Q Well, doing anything to help the cause of the 
Contras? 

A Yes. 

Q Could you tell us how that came about? 

A Yes. He gave Mr. Gadd a call on the phone, said he 



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UNCLASSIFIED 



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' had an issue which he felt was important and wished to discuss 

2 and wished to come to Miami, and I said please come to Miami. 

3 Q Do you recall approximately when this was? 
* A I believe it was in the mid fall of '85. 

5 Q Where did you meet? 

6 A We met at Mr. Bastian's house, 

7 Q Why 

® A I'm not sure. I think Mr. Bastian was sick that 
9 



day. 

Q Who else was there? 

A Mr. Gadd, Mr. Bastian and myself. 

Q Was Mrs. Bastian at home? 

A She was at home. 

Q What time of day was this meeting? 

A It was in the afternoon, aporoximately two o'clock. 

Q And what did Mr. Gadd tell you? 

A Mr. Gadd explained that there was some private 
investors who were interested in setting up a resupply 
operation in Central America to assist the Contras. He 
wanted to know our interest in participation. 

Q What did he wamt you to do? 

A He asked us if we would set up that operation. 

Q What do you mean, set up the operation? What does 
that mean? 

A That means go down, set up a maintenance base and 



ou mean, set up tne oper; 

UNCLASSIFIED 



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fly aircraft. 



Q Where was this to be set up? 

A He didn't have the location yet. 

Q Where were you going to fly to? 

A To the Contras. 

Q In Nicaragua? 

A Not specifically. 

Q All right. To where were you to fly? 

A Wherever the Contras were . 

Q So if they were in Nicaragua, did he want you to 
fly into Nicaragua? 

A Yes. 

Q What kind of aircraft did he say this would take? 

A He didn't have an aircraft. 

Q All right. So he wanted to lease yours; is that 
correct? 

A No. He wanted us to -- his first -- to put it 
ainply, his request was could we go down and set up this 
-ip^nti rn It would require buying airplanes, it would 
require setting up a maintenance base, it would require 
hiring mechanics, et cetera. We said no. 

Q Now, when you say "we" — 

A Mr. Bastian and myself. 

Q Both of you were in agreement? 

A Yes. 



UNCUSSIHED 



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Q Why did you say no? 

A Because that -- we were in the midst of major growth 
in the company. It would take a tremendous amount of time 
and talent away from our mainstream business to do this, and 
we did not want to divert our attention. 

Q Wouldn't this have been a very lucrative thing for 
Southern Air? 

A I don ' t know . 

Q Did you discuss money? 

A Yes. 

Q What did you discuss about it? 

A We discussed what kind of capitalization they had, 
and Mr. Gadd really had no idea. There was private funding. 
He didn't know how much there was. He knew it was going to 
be very tight. 

Q Did he give you any figures? 

A No.- 

Q None at all? 
- A No. 

Q Now, when he said private funding, did he give you 
any indication specifically where the money was coming from? 



A No. 



Q Did you ask him? 



A No. 



liNCUSSIFlEO 



Q Did he say why he — 



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' A He was asked to. 

2 Q By who? 

3 A I don' t know. 
Q Had you met Mr. Secord at this time? 
A No . 

^ Q Had you heard of Mr. Secord before? 

' A Never heard of him. 

® Did Mr. Gadd indicate who had asked him? Did he 
indicate this was supported by anyone in the government or 
anyone in authority? 

A It was very clear this was a private enterprise 
program. He did indicate the Federal Government was very much 
supportive of it and was hopeful it could be set up and 
quickly assist the Contras survive it. At that time there was 
dire need, they were unable to receive the supplies, the little 
supplies that they did have, and all was not going well for 
them. 

Q Did he expect government monies would soon take 
art? 

A He specifically said — I'm sorry. Yes. He 
expressed that he felt in due time government money would 
take over. This was a bridge. It was purely a bridge to 
keep them alive until the funds started flowing. 

Q You were about to _say he^ spe_c_i_f ideally said something. 
What was that? 



ut to say he specificall 

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1 A I thought you had asked me if he had said government 

2 money would be injected into this operation, and he specifically 

3 said that it was prohibited by the Boland Act, no government 

4 money would be injected, and that's why private enterprise 

5 was stepping forward to try to breach this gap. 

6 Q Did he say that they had already established some 

7 sort of supply network or was this definitely from the icratch 

8 concept? 

9 A It was my impression that it was starting from 
'0 scratch. 

Q Did he ever mention the use of foreign national 
pilots that had been used in 1985 to supply the Contras? 

A No. No. 

Q Did he give you any specifics at that time as to 
what had been going on, who was supplying them at that 
particular time? 

A No, he didn't. 
BY MR. LEON: 
_ Q Did he give you any idea where you would be landing 
your planes? 

A Not yet. Not yet. Not in that conversation. 

Q Were you worried about them being shot down? 

A I wasn't worried about anything. It was a conceptual 
problem and that was to resupply, in-country resupoly. 

Q I don't think I follow you. What do you mean by a 



timk I toiiow you. wnat 

\\m AQ^inrn 



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^ conceptual problem? Could you explain that a little? 

2 A There were no airplanes, there was no ooeration. 

3 What he was asking is could this be set up and could you set 

4 it up. The answer is no, I can't set it up, so I had no 

5 worry about airplanes. 

6 Q You didn't even get to the point of thinking about 

7 the problems of trying to land in a war zone? 

8 A No. 

9 BY MS. NAUGHTON: 

10 Did Mr. Gadd at that meeting indicate how you would 

11 be paid, what mechanism would be used? 

12 A Only that it would be funded with private funding 

13 and that would pay for the operation. 

14 Q So did you discuss whether it would be an hourly 
16 basis or monthly stipend? 

16 A Yes. 

17 Q What was discussed? 

18 A Simply that. How could you structure it? In our 

19 business you can pay by the hour, if you have sufficient 

20 hours, or if you don't know what the hourly activity is, you 

21 would probably go on to a day charge and then an hourly rate. 

22 Q What did he say to that? 

23 A He didn't know. He didn't know what the scope of 

24 it would be. He was trying to find out from us what we would 

25 be willing to do and how we could fit into it. 



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' Q Did he tell you or did you qet the imoression he had 

2 spoken to any other companies about this? 

3 A I didn't. Neither of those was a point of discussion. 
^ Q Did you discuss insurance? 

A No. 

^ Q Now, when you turned him down — 

^ A I think we did discuss insurance, said you got to 
° have insurance. I think we said you have to have landing 

rights, you have to have all -- all of those things have to be 
established or you can't even perform. 

Q Did you discuss under what flag the ships would be 
flying? 

A We did. We said you got to have a flag. 
And what was his response? 
A That would all be taken care of. 
Q By whom? 
A He didn't say. 
■ Q Has Southern Air flown under othe r flags? 
_ A Not that I ctm aware of. 

Q All right. If he had asked you to fly under another 
flag, would that have been xinusual? 
A It would be unusual, yes 
Q Would you do it? 
A I don't know, I would have to — 

MR. BECKMAN: I think, again, you are getting on 



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' different wavelengths because if an airplane is registered 
2 in one country, are you asking whether Southern Air as a 
^ hypothetical would consider falsifying the certification — 
^ MS. NAUGHTON: No. 

5 MR. BECKMAN: I didn't think you were. 

BY MR. NAUGHTON: 



^ Q To your knowledge, during your presidency at Southern 



Air, has the nomenclature ever been taken off any of your 
aircraft? 

A The name? 

Q The name or the number. 

A I know we have taken the name off. I ]ust got 
through doing that and put another name on, which is my 
customer's name. We would do that for a long-term contract. 
If they want the airplane painted in their colors, that's fine 
wi th me . 

Q But what about a blank airplane with no nomenclature 
on "there? 

— MR. BECKMAN: Do you know the N number? Is that 
meaningful to you? 

MS. NAUGHTON: Yes, I understand what you say when 
you say N number. Let's take it one at a time. 
BY MS. NAUGHTON: 

Q Has SAT ever flown an SAT plane with no logo, 
nothing on it but an N number? 



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' A Yes. We flew it for years, 
2 Q When? 
^ A Before I got there, 
'• Q Why? 

^ A Because they didn't want to spend the money to paint 

the airplane. One of the very first things we did was start 



' to paint the airplanes. 



Q When you say "we," who do you mean? 

A The previous managers, Mr. Grundy, Mr. Bastian. 

Q When you first got there the planes had no markings 
on them? 

A They were just as clean as chrome. I mean it was 
just a metal airplane with an N number on it. 

Q My question is: Once you assumed the presidency, 
to your knowledge for any mission was the nomenclature of a 
plane completely taiken off and another substituted for it? 

A Not that I am aware of. 

Q Now, after this meeting, this initial meeting betwee 
Mr,^ Gadd, Mr. Bastian and yourself in Mr. Bastian's home, how 
was the meeting left? In other words, did you tell Mr. Gadd 
absolutely not or did you leave the door open? 

A We left the door open. 

Q And did he come back to you with a counterproposal? 

A He asked us to come to Washington where we could 
talk about what roles we could play, and what it really boiled 

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1 down to was our technical expertise was for hire and we provided 

2 that. 

3 BY MR. LEON: 

4 Q Had he implied to you in any way, Mr. Langton, or 

5 stated directly, either stated directly or implied to you that 
^ if you were to get involved in this kind of a project it would 
^ be favorable or helpful to Southern Air down the road in 

® getting government contracts later on? 

A No. 

BY MS. NAUGHTON: 

Q Now, after he invited you to come to D.C. did you 
go? 

A Yes, we did. 

Q Who went? 

A Mr. Bastian and myself. 

Q Do you recall when this was? 

A No, I don't. 

Q Do you recall how long after the initial meeting 
in Jthe fall of '857 Was it one month later? Was it a year 
later? 

A It was more like a month later; 

Q Okay. Did anyone else go besides you and Mr. 
Bastian? 

A No. 

Q What was discussed then at that meeting? 



ONCUISSIRED 



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UNCUSSIFIED 



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A At that meeting the discussion was how to organize, 
how to set up a resupply operation. We spent several hours 
discussing the mechanisms, you know, how to build the company, 
what operating rights were necessary and that full gamut. 

Q Did Mr. Bastian actively participate in this 
conversation? 

A Yes. 

Q And what was agreed to at that conversation? 

A Nothing was agreed to other than he thanked us for 
the information and that, you know, continue helping from' a 
technical standpoint. He said fihe. 

Q So it was basically a meeting where he asked 
questions of you. Is that a fair assumption? 

A I'm sorry. Who is "he"? 

Q Mr . Gadd . 

A No. We were still on the discussion if a company 
was to be set up to resupply, what would be necessary. Mr. 
Bas-tian is an attorney, an aviation attorney as well as an 
airline executive, and had a great deal of good advice to give 
to this group. 

Q Okay. There were just the three of you at this 



meeting? 



Yes, I believe so. 



UNCLASSIFIED 



Q No one -else was with Mr. Gadd? 

A No, I don't think so. 



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Q Did Mr. Gadd give you any indication at this meeting 
who he represented? 

A No. 

Q Did he tell you anything about government aporoval 
of this project? 

A No. As I said earlier, he indicated right from the 
beginning that the government was very hopeful that this 
project could be put together by private investors, private 
individuals who were very anxious for it to occur. 

Q Did he give you any more indication regarding the 
capital he had or expected to recieive? 

A No. We really still were a long ways from talking 
about what kind of money was in — no aircraft had really been 
acquired or laid out or even the scope of the operation really 
identified. 

Okay. Did Mr. Gadd mention or to your mind was there 
any connection with ^^^^^^^H flights and the Contra resupply 
operation? 
_ A No. 

Q There was never any indication perhaps the cargo 
on that flight was used to supply the Cohtras? 

A No. 

Q Did you suspect that? 

A I would say I suspected it, yes. 

Q Why? 



UNtUSSiriED 



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A It makes complete sense to me. 

Q Did you get the sense that the^^^^^ flights were 
somehow government-sp>on3ored or his client was the government? 

A No. 

Q Did you get the sense it was private? 

A Yes. 

Q What gives you that sense? 

A I don't know except that it was an impression I 
got it was in the end privately funded, and that was my 
impression all along. 

Q But he never had trouble financing 
flights? 

A No. 

Q What happened -then after the meeting in Washington? 
KR. BECKMAN: Do you think we could take a break? 
MS. NAUGHTON: Sure. 
(Recess.) 




UNCLASSIFIED 



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Take IB 
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fols eal 



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BY MS. NAUGHTON: 
Q I was going to ask you about your next contact 
with Mr. Gadd after this meeting occurred in Vienna, Virginia. 
This is on the subject of Contra re-supply. When was your 
next contact with him? 

A It was really within days. 

MR. LEON: Did you go back to Florida? 
THE WITNESS: Yes. 
BY MS. NAUGHTON: 
Q Did he call you? 
A Yes. 

BY MR. LEON: 
Q Who paid for the trip up? 
A He did. 

Q Did you take it as a business expense, like future 
business development, something like that? 

A Just like all of our travel is paid by ourselves, 
except this trip you guys are going to pay for it, right? 
Q I will leave that to Pam to answer. 
A That's part of it. 

BY MS. NAUGHTON: 
Q When Gadd got back to you, what did he say? 
A The conversation really becaroe, can you help me 
identify aircraft that fit in? And I would say, yes, I would 
work on it. I worked on that, and I concluded the Caribou 



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was probably the right airplane for this operation. We had 
STOL aircraft — 

Q What does that mean? Is that STOL? 

A STOL. Short takeoff and landing. 

Q For the record, describe why that is necessary. 

A Well, it IS a characteristic that any time you are 
working m the third world, what we call under-developed 
areas, STOL aircraft has good value? You don't have these 
big international airports where you can go down rambling 
10,000 feet; and in this situation, it was apparent that would 
not be the case. They would not have an international airport 
to run in and out of. 

Q The Caribou, is there a military equivalent for 
that aircraft? 

A No, not that I am award of. I know many were sold 
to the military, but I don't know whether -- it was a commercial 
aircraft. 

Q Why did you determine -- aside from the short take- 
off and landing, why did you determine Caribou would fit 
his needs? 

A Because one of the criterion was an aircraft capable 
of making air drops, and it has a rear door and fit the bill. 
There is not that many aircraft in the world that fit that 
bill. 

Q When you say air drops, equipment was to be 



UNCLASSIFIED 



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parachuted from the aircraft? 
A Yes. 

Q Did he tell you that? 
A Yes. 
Q Did he tell you that they would be parachuting 

weapons? 

A No. 

Q What did he say they were going to be delivering? 

A Supplies. 

Q By supplies, was that limited only to non-lethal 

material? 

A No. 

Q Rather than my saying what he said, why don't you 
tell me what he said? What was he going to drop? 

A Supplies. 

Q Did that include weapons? 

A I don't know. I didn't ask. 

Q So it could have? 

A It could have, yes. Let me offer to you, it's 
logical that some of it would be. 

Q Now, what else did you discuss other than what kind 

of aircraft were purchased? 

A How we. Southern Air, could help this effort. 

Q And what specifically? 

A I said the way we could help the effort would be to 



UNCLASSIFIED 



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UNCLASSIFIED 



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lend our technical expertise in identifying aircraft, looking 
at them, kicking tires, doing some maintenance if required. 
Basically, that was it. 

Q When you discussed doing maintenance, was that to be 
maintenance only m the United States at the site in Central 
America? 

A Well, at that time, at that discussion I was really 
referring to Miami. The idea was to prepare the aircraft. 
The idea was in Micimi to get them ready for service. 

Q At what point was it decided you would send peojsle 




A When they screamed, panicked. 

Q Who screamed? 

A Bill Cooper, specifically. That they had problems 
with the aircraft and they needed somebody down there. I 
should make it clear, we never assigned anybody down there. 
We did send several of our mechanics. We also sent some of -- 
arranged for vendors and mechanics to go down and try to 
repair engines and whatever was required. 

Q Mr. Coopier was not on your payroll? 

A No. 

Q Now, if he didn't disclose to you where he was 
getting the money to do this, why did you agree to help him? 

A Because I thought it was the right thing to do. I 
didn't see any reason not to. The concept itself made perfect 



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sense. 

Q What do you mean? 

A Nicaragua is a Marxist State, the Contras are 

freedom fighters. They are in trouble, they need help. Why 
not help them? 

Q Did Mr. Bastian share this opinion? 

A Yes, yes. 

Q Did anybody in the company object? 

A No. 

Q So as far as you are aware, everybody shared that 

opinion that you havejust expressed? 

A Yes. I didn't go out for a vote. 

Q I understand. Did you ask for -- in terms of the 

mechanics that went |^HHp "**= ^^^^ ^^""^ ^^^ ^""^^ 

or did you get volunteers, or how did that work? 

A Well, there most certainly was volunteers, but the 
aircraft is not the type of aircraft we operated. We needed 
to find somebody who knew something about round engines, 
and we only had a few guys who knew anything about them, and 
we asked if they could go down and help get these engines 

working. 

Q Were they given any kind of bonus for it? 

A No. 

Q Did you charge higher rates than normal for a . 

rather dangerous area? 



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UNCLASSIFIED 



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A ^^^^^^^Hi wouldn't consider a dangerous area. 

Q Was that the only place that you send mechanics? 

A As far as I know. But I will qualify it. It is 
not inconceivable they might have moved over ^^^^^^^^H at 
one time or another. 

Q For the record,] 

A 

MR. LEON: How far would that be from 
Roughly. 

THE WITNESS: 300, 400 miles. 
BY MS. NAUGHTON: 

Q To your knowledge, were you or any of your 
employees at the air strip in Costa Rica that was built? 

A No. 

Q Were you aware of that? 

A Yes. 

Q Who made you aware of it? 

A Mr. Gadd. 

Q What did he tell you about it? 

A He said they were building an airstrip in Costa 
Rica, showed me where on a map. 

Q How did he say this was being financed? 

A Private funding. 

Q What did he say regardir 




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UNCiissm 



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A Nothing. 

Q He 3ust -- did they buy the land? 

A I don't know. As far as his involvement or what he 
told me about it was really the construction end of it. 
BY MR. LEON: 

Q Did it come up in the context, Mr. Langton, of your 
planes being landed there? 

A No. 

Q Did it come up in the context of it might be a 
place we will need your mechanics to do some work on planes? 

A I think what it was was- in the context of what they 
were trying to achieve, and he showed me -- 

Q What do you mean, "they"? 

A They, his operation. By the time this came up, he 
was then directing a flight activity in Central America. Okay? 

Q For this private-funded organization? 

A Yes, right. 

Q Did it have a name, by the way, this private-funded 



KUISSIFIED 



organization? 

A No. 

Q So this was separate from Sumarico? 

A Oh, yes, absolutely. Yes. And what he did is he 
showed me this point in Costa Rica where they^had hoped to 
develop an airstrip. He already hadJ 

In between those two and! 




which is ai 





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UNCLASSIFIEO 



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they felt they could service all of the Contra troops m the 
field. I said, that is interesting. 
Q They had their own pilots? 
A Yes. 

MR. BECKMAN: Excuse me. I don't know if you focuse 
onthe question; it wasn't very precise. You were asked 
separate from Sumarico. 

THE WITNESS: Yes. 

MR. BECKMAN: Which by this time is East, which 
implies East wasn't in any way involved. 
THE WITNESS: Right. 
BY MS. NAUGHTON: 
Q Let's get into that. Do you recall at that point 
you decided to go ahead and do this venture? 

A Well, immediately at the meeting in Mr. Bastian's 
house, we said this is the type of service we could provide. 
It is third-party maintenance. We do it for many customers. 

Q So it was just a matter of working out the logistics 
then? 

A It wasn't a matter of anything. We said that we 
could do, that we could do. 

Q Whose idea, then, was it to open up the account 



A Mr. Gadd asked if we could, if we would do that. I 
thought it was a good idea. 



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IIWSSIFiED 



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A Because I basically wanted to keep thac operation 
totally outside this Southern Air operation, and I felt that 
an offshore account would be, keep it at arms length. 

Q Why did you want to keep it separate? 

A Well, I had several reasons. One, I didn't want 
the diversion of our time and talent within the company wasting 
a lot of time on this; and, secondly, I did not want to raise 
a -- I didn't want to have a bunch of demonstrations in front 
of our building or a political situation occurring. I didn't 
want any of that. 

And, to me, the easiest way to do it is to have an 
offshore company that is a customer and performer of third- 
party maintenance, and that's all there is to it. 

Q So your intention was that your books would reflect 
you were doing this business for ACE? 

A Yea. 

Q And ACE, for the record, is the account in| 

A Yes. 

Q Did you give Mr. Mason instructions to set up the 
account? 

A Yes. 

Q Who gave you the name of the person to contact! 



Mr. Gadd. 



UNCUSSIFiED 



Did Mr. Gadd say he had used this fellow before 




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67 



to set up accounts? 

A No, he did not. 

Q How did he get the name, do you know? 

A I don't know. 

Q When Mr. Mason went down, how much money did he 

deposit in the ACE account to get it started? 

A I don't know. I think it was S3, 000 or $4,000. 

Q Was SAT reimbursed for that? 

A Yes. 

Q By whom? 

A By the ACE account. 

Q To your knowledge, who paid the pilots who were 
flying these missions? 

A I really don't know. 

Q All right. WEre any of these pilots pilots who had 
flown for SAT at some prior time? 

A Yes. Bud Sowers. 

Q By whom was he employed? 
_ A By Gadd . 

Q But you don't know by which company? 

A I am sorry? 

Q Do you know what company? 

A What company what? 

Q Was he personally employed by Dick Gadd, or was he 



employed by — 



UNCLASSIFIED 



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A Oh. By East, by East. He was one of the contrc>ct 
pilots . 

Q When you say contract pilot, what do you mean? 

A That he was under contract to East, and we flight 
trained him and brought him up to our off-spec requirement, 
and we periodically used him for our own flights and paid 
him by the hour. 

Q Were there any other people in that category? 

A There was two complete flight crews. I think we have 
already provided the names. I can't remember. Bonzo Von 
Haven was the other captain, and I can't remember the co- 
pilots . 

Q Would Mr. Kilburn be one of them? 

A Kilburn? 

Q Yes. 

A That name doesn't ring a bell at all. 

Q Now, were these the people, Mr. Von Haven and Mr. 
Sowers, were they among the people who were doing the training 
in the earlier Sumarico contract? 

A Yes. 

Q Now, on occasion, SAT provided cash to the pilots. 



is that correct? 

A That is correct. 
Q For what purpose? 



UNCLASSIFIED 



Well, primarily for the fuel account. At 




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UNCIASSIFIED 



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in order to get fuel for the aircraft, they required cash. 
And we had the same problem in our own flights, our own MAC 
flights that would service^^^^^^B We couldn't use the Air 
Force Carnet and had to take cash with us to get the fuel. 
It is not uncommon around the world. 

Q Why didn't they get this cash from ACE? 
A Usually what happened is it was a -- it got to a 
crisis mode that they just didn't have enough cash down there; 
and they were doing a crew swap, and we would advance them 
some cash, and it was very seldom, I don't know how many times 
that happened, but it was not very many. Most of the time, 
they got their operating expense funds already taken care of. 
Not out of ACE. ACE did not pay any of the operating funds. 
Q By whom were you paid, ACE? 

Yes. 

So ACE was set up simply to pay Southern Air? 

Yes. Yes, I would say that's correct. 

BY MR. LEON: 

Who had the banking records? 

Bob Mason. 



A 
Q 
A 



Q 
A 



For ACE? 



For ACE, yes. 



BY MS. NAUGHTON: 



DNClASSIFiro 



Q When you did provide cash to the crews, do you 
remember what kind of amounts we are talking about? 



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A Probably $9,000. That's the usual. 

Q Nine? 

A Yes. 

Q Did you ever provide more than $10,000 in cash? 

A No, I don't believe so. 

Q Did you ever provide more than $10,000 in cash to 
Mr. Dutton? 

A No, I don't think so. 

Q When that cash was provided, through whom would that 
have to be cleared at SAT? 

A Bob Mason and myself if I was there, and it still 
wouldn't occur without Dutton 's approval. 

Q Dutton 's? 

A Yes. 

Q What about prior to June of '86, who would approve 

it? 

A Gadd . 

Q All right. So Mr. Gadd or Mr. Dutton would come 
to you and ask for the advance? 

A They would call me. 

Q But my question was: At Southern Air, who would 
have to approve such an advance? 

A As I said, either myself or, if I wasn't there. Bob 
Mason would probably go ahead and do it himself. 

Q Mr. Mason had the authority? 



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UNCUSSIRED 



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A Yes. 

Q Was that for up to a certain amount or -- 

A He knew what he could and couldn't do. 

Q To your knowledge, did Southern Air fill out any 
Customs declarations form regarding this money that was being 
taken out of the country? 

A I don't know. 

Q Now, as to the airplanes that were purchased, we 
went through in great detail with Mr. Mason on the financing, 
but I would like to run down with you so I can get it clear in 
my mind as to exactly how many airplanes were purchased by, 
shall we say, Gadd Enterprises during this period of time? 
Why don't you tell us first about the two Caribous. 

A Well, again, I helped acquire those aircraft and 
provided technical and I guess business aspects of it. I 
went to Rouyn, Quebec in the middle of winter, looked at the 
aircraft with one of our technical representatives, looked 
at the records, determined that the aircraft were suitable 
aircraft, spoke to Mr. Provonose, and tried to establish a 
price. Mr. Gadd was with me on that trip. And we did that, 
came to an agreement. 
BY MR. LEON: 

Q Did you negotiate it? 



Yes. 



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UNCLASSIFIED 



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BY MS. NAUGHTON: 
Q That IS for both Caribou? 

A Well, we started with one, but I tried to roll the 
package in and give them the, as usual, give them the 
expectations of their being, we'll take them both and all the 
parts, which we eventually did, and were able to negotiate a 
better deal that way. They did want to sell both. 

Q The person from whom you purchased these planes 
was whom? 

A Luis Provonose. 

MR. BECKMAN: Excuse me. I don't think you listened 
to the question. 

The question was, the person from whom you purchased 
the aircraft was whom? 

THE WITNESS: I didn't purchase the aircraft, number 



/ 



there. 



MS. NAUGHTON: I understand. You negotiated. 

THE WITNESS: I was the liaison. 

BY MS. NAUGHTON: 
Q Was this plane previously registered in Canada? 
A It was currently registered in Canada when I was 

Q And who registered it in the United States? 
A It was never registered in the United States. 
Q What happened with its registration? 



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A I don't know, 

Q Well, then, how do you know it wasn't registered in 
the U.S.? 

A It was never operated in the U.S. 

Q It was flown directly from Canada to where? 

^^^^^^^^^^H the 
Q What about the second one? 
A The second one stopped in Hiami for repairs and went 




Q The second one was never registered in the United 
States either? 

A No. 

BY MR. LEON: 

Q How did you happen to go to Quebec to get those 
planes? 

A It was in the paper. There is a paper called 
"Trader Planes". I went through that and looked for Caribous, 
and there was a broker in Canada, I don't remember his name, 
he_had them, and we talked to them and it sounded like the 
type of aircraft that would fit the bill, and I recommended 
that we go look at them. 

Q Did Gadd pay all of your expenses to fly up there, 
hotels and — 



Yes. 



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< BY MS. NAUGHTON 

2 Q How was the actual <. nancing of those two planes, 

3 those transactions made? 

4 A I don't know. Mr. Mason would have to answer that. 

5 Q All right, but did Mr. Gadd ]ust pull out a check 

6 and write it -- 

7 A No. 

8 Q Was It done through Southern Air? 

9 A No. 

10 Q Then why would Mr. Mason know it? 

11 A Because he was involved m the activity. It is 

12 my understanding that ACE bought the airplanes and then trans- 

13 f erred the title to Udall Corporation immediately. 

14 Q Was that true for all of the airplanes? 

15 A No, no. 

16 Q Let's go to the C-123s. 

17 First of all, is there a civilian equivalent? 

18 A No. 

'9 Q Let's start, first of all, with the C-123 that was 

20 shot down so that we have a point of reference. From whom was 

21 that purchased? 

22 A I think that was the Harry Doan airplane, wasn't it, 

23 the one shot down? 

24 MR. BECKMAN: I don't remember.! 
26 MS. NAUGHTON: Yes, that was the Doan one. 



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THE WITNESS: That was purchased from Harry Doan. 
BY MS. NAUGHTON: 

Q Doan what? 

A Doan Helicopters. 

Q And did you scout that plane as well? 

A We really had nothing to do with that airplane. 
I think I did send a mechanic" to go up and kick tires and 
make sure the flaps were on, and I think that we did, but we 
did not participate in negotiations or anything else on that 
airplane. It was my recommendation to stay away from those 
airplanes. 

Q Why? 

A Because they had no commercial value. 

Q What do you mean? 

A I couldn't use them in any commercial enterprise. 
They were a military airplane. 

Q Well, you knew, didn't you, that Mr. Gadd was using 
them for military -- 

_ A He hadn't used it yet. 

Q What is your point? 

A My point was I didn't recommend buying those airplanes 
I didn't participate in buying those airplanes. 

Q My question is: Why wouldn't you recommend a military 
style aircraft for a military style - 

A I go back to the premise, the idea here, the funds 



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were private funds donated in order to get this operation off 
the ground, to bridge the gap until Federal funds were flowing. 
I thought it would -- the proper thing to do is to buy an 
airplane that youcould re-sell when things were all done, and 
you get part of their investment back. 

Q Obviously Mr. Gadd didn't agree with that. 

A Yes. 

Q Why? 

A Performance of the aircraft is a little inferior 
to the Caribou. 

Q What was his level of sophistication regarding 
these aircraft? Did he have a great deal of experience with 
It, very little? How would you characterize it? 

A Some. Nobody has a great deal anymore. They are 
quite an antiquated airplane. 

Q Now, as to the purchasing of the aircraft from Doan, 
could you tell me how that worked? 

A Our involvement, is that what you are asking? 

Q Yes. 

A Mr. Gadd had struck a deal with Harry Doan for the 
aircraft. I believe that a bank transfer was made to Harry 
Doan. I got a phone call from Mr. Gadd about the transfer, 
they couldn't find it, it was misplaced, could we. Southern 
Air, help get a cashier's check up to Harry so they could fly 
the airplane away. And we said yes. 



UNCLASSIFIED 



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drg-20 



ONCUSSIFIED 



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Q Why? 
A Why not? 

Q Well, isn't that a big risk you are taking? 
A No, I didn't consider it a big risk. We have been 
in business together and we had always been paid promptly, and 
we did have money in our account, advance payments for mainte- 
nance and so forth. 

Q You mean in the ACE account? 

A There were some in the ACE account, but I think we 
also had some in our own account. Southern's account, for 
advance payments on maintenance and so forth, that the 
real risk was rather minimal, maybe S70 , 000, something of 
that nature. And I was assured we would be reimbursed 
immediately, which we were. 

Q How much was the check for? 

A $475,000, I believe. 

Q What did you think in terms of — 

A Is that right? 

MR. BECKMAN: I don't know. What did you say? 
THE WITNESS: 475. 

MR. BECKMAN: That is not what sticks in my mind. 
Is that correct? 

MS. NAUGHTON: I would have to look. 

MR. LEON: I think he previously stated that. 

THE WITNESS: It was somewhat in that area. 



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BY MS. NAUGHTON: 

Q What did you think of the value of that plane? 
Was that paying more than it was worth, less than it was worth 
or about right? 

A Harry was asking, when he first called, for $750,000 
for the airplane. And, again, I'm a commercial operator. I 
think it has no value. So what is the right number? It beats 
me. I don't know. 

Q For instance, what was paid for the other C-123? 

A That one I don't know at all. I wasn't involved in 
the other one at all. 

Q That plane, the one that was shot down, to whom was 
it registered after the sale? 

A I don't know. 

Q You weren't involved in the registration? 

A No. 

Q Do you know if it was registered in the United 
States? 

_ A It was registered in the U.S. at the time of purchase. 

Q Was this registered to Udall? 

A I don't know. You mean before or after? In the 
U.S.? 

Q You told me before - 



UNCIASSIFIED 



A Harry Doan had it registered in the U.S.; it had' 
an N number on it. What happened after that, I have no idea. 



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Q You told me earlier in discussing these planes in 

general that most of them were sold back to Udall. 

A No. I said two of them were. 

Q Which two? 

A The two that were purchased by Ace were immediately 
sold to Udall. 

Q Those are the two Caribous? 

A Yes. And the balance of them -- 
BY MR. LEON: 

Q Where is Udall located? 

A It is a Pancimanian corporation. 

Q Had you dealt with them before? 

A No. 

Q Have you dealt with them since? 

A No. 

Q Had you known of them before? 

A No. 

Q How did you first find out about them? 
_ A As soon as the aircraft were purchased, we were 
instructed to transfer title to Udall. 

Q By? 

A By Gadd. 

BY MS. NAUGHTON: 

Q Was your address mistakenly put on one of the 
registrations? 



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A It wasn't a registration. It was an application for 
registration; and, yes, they put our physical address on it. 

Q Who is "they"? 

A I don't know. I wish I knew. I would kill them. 
I would have a long chat with whoever did it. I don't know. 

Q When did you find out about that? 

A When it hit the newspaper. 

Did you ask Gadd or Secord or anyone about that? 

A Yes. 

Q Whom did you ask? 

A Both. I actually asked Gadd and Dutton, and neither 
of them knew a damn thing about it. 

Q Did they admit it was a mistcike? 

A Of course it was a mistake. 

Q But they didn't know who had made it? 

A Didn't know who had made it. I got a copy of it. 
The signature didn't mean anything to me. But, in any case, 
it was an application that -- the FAA would have never 
processed it. 

Q Why? 

A Because it was signed by an agent. That's what it 
said, "Agent." The FAA doesn't process those things. 

Q It was not signed by the owner? 

A No. So unless — if you want my theory, I would, say 
the press sat down and filled it out iu^ to create a story. 



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Q That's for another lawsuit. 

A Maybe they did. I don't know. It just dawned on 



me. 



Q Do you know a man named Asher Ward? 

A I do not. 

Q How about a guy n-euned Joe Cappa? 

A No. 

Q You don't know from whom the other C-123 was purchased 
is that correct, the one that wasn't shot down? 

A No. . " 

Q What about the Maule aircraft? 

A I don't know anything about the Maule. 

Q Did you know Mr, Gadd had purchased a Maule? 

A I didn't know it was his. 

Q Did you know of a Maule being used? 

A Yes. 

Q What did you know? 

A I knew it flew in and it flew out. 

_ Q Of where? 



A 
Q 
A 

Q 
A 
Q 



Out of Miami. 
Flew into SAT? 
Into SAT, yes. 
Who was in it? 



UNCLASSIFIED 



A bald-headed guy. I don't know his name. 

How did you know that was part of the Contra resupply 



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activity? 



A Because he was talking to Cooper and they seemed to 
have a rapport going. 

Q Could you describe this Maule aircraft? What are we 

talking about? 

A We are talking about a single-engine airplane. It 
is like a little Beechcraft, but it has an over-sized engine 
on it . 

Q What is its purpose? 

A I really don't know much about small airplanes. I 
just don't know. Its purpose was to carry people and goods, 
but not very far or very much. 

Q Is it a passenger aircraft? 

A No, it is a small private — it's two wings and a 
single engine and one pilot. It is not a passenger type of 
aircraft, no. 

BY MR. LEON: 
Q Is it a STOL aircraft? 

A Yes, but when you get down to that size, they are 
all STOL aircraft, with the exception of Lear jets and so 
forth. I mean, any of them will tcike off on 3,000 feet. But 
I do know this was specially — the Maule is a derivative. It 
has a bigger engine, and I think it is a Beech airplane, but it 
is mod. And that's why they call it a Maule. 



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1 BY MS. NAUGHTON: 

2 Q Was this a new aircraft or an older one? 

3 A It looked new to me. It was really nice and clean. 

4 I walked out and looked at it. It looked brand-new to me. 

5 Q Did it have any markings on it? 

6 A No. 

7 Q Just an N number? 

3 A I think. I didn't even see an N number, but I'm sure 

9 there was one on it. 

10 Q Do you know where it was registered? 

11 A I don't know anything about the airplane. 

12 MR. BECKMAN: Then you can't be sure it had an N 

13 number. 

14 THE WITNESS: No, I can't even be sure of that, 

15 that's right. 

16 BY MS. NAUGHTON: 

17 Q Now, Mr. Cooper spent a great deal of time at SAT; 

18 is that correct? 

19 A Yes, 

20 Q What was he doing there? 

21 A When the aircraft were acquired, he was there 

22 overseeing the maintenance work on it. 

23 Q But he was not paid by SAT? 

24 A No, he was not. 

25 Q Do you know who paid him? 



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' A I don't know. 

2 Q Was it a Gadd-related company? 

3 A That I don't even know. I just don't know. 

^ Q What did he say? I mean, did he refer to anyone 

5 as his boss? 

6 A Yes. At first Gadd and then later on Dutton. 

' Q What is Maule Air? Is that the company that makes 
® them or leases them or are you aware? 
3 A What' s what? 
Q Maule Air. 

A I think, and I'm just not an expert in small air- 
planes, but what I understand is that it is a modification, 
and it sounds to me — I don't know what Maule Air is, but 
it sounds to me like they are the ones that bring the airplanes 
in to modify them, put a different engine in them. 

Q What anout the Jet Star; why don't we start that 
story from the beginning. There came a time at which you were 
thinking of purchasing a Jet Star? 
_ A Yes . 

Q For what purpose? 

A We have an extensive system of Boeing 707s and L-lOOs 
that fly around the covmtry daily, and the one thing we found 
was we couldn't rely on getting parts or people to AOG air- 
planes in a timely fashion. So we determined what we needed 



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to do was buy a corporate type jet that had range, very cheao 



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' and could pack a decent load. So we went out and looked, 

2 and the Jet Star was the airplane. It could go 17,000 miles 

3 with 200 pounds on board and only cost a quarter of a million 
dollars. And the idea was the airplane would spend most of 

' its time just sitting on the ramp waiting until we needed to 
° move men and equipment to an airplane. 

Q From whom did you buy it? 

A I can't remember. It was a broker in one of the 
airports, Opa Locka, I believe. 

Q Where is that? 

A It's One of the little airports in Miami. I can't 
remember the guy's name. 

Q To whom was the Jet Star registered? 

A Southern Air. 

Q At your Miami address? 

A Yes. 

Q Now, prior to its purchase, did you allow Mr. Gadd 
to fly in the plane or arrange a flight? 
_ A Yes . 

Q Could you tell me how that came about? 

A When we were looking at the Caribous and we at the 
Scune time were looking for a Jet Star, this airplane fit it 
and so we convinced the owner, I did, why don't you let me take 
it for a little ride, we will buy the fuel and see if you 



will like the airplane. So we flew up to Fort Wayne first and 



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1 dropped some parts off there. We have a major hub there and 

2 dropped some parts off and went on to Rouyn and looked at the 

3 airplane and came back. 
A BY MR. LEON: 

5 Q Do you have to put a bond up when you do something 

6 like that? 

7 A You should, but these are deals that -- we rented 
his crews. It wasn't our crews or anything. We were 

9 satisfied with it "and he wanted to sell the airplane. So this 
'0 was a demonstration flight. It worked out real well. Mr. 
Gadd was on that flight with me. 
BY MS. NAUGHTON: 
Q Were there any other demonstration flights involved 



^* with Mr. Gadd? 



A No. 

Q Did Mr. Gadd contribute at all to the financing 
' and purchasing of the aircraft? 

A Mr. Gadd did not. 

Q Tell me about then the check that was received from 
him for the aircraft. 

A I'm unaware that we received a check from him. 

Q All right. Let's start at the beginning. Did anyone 
other than SAT — 

A Yes. 

Q — purchase aircraft? 



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1 A Yes. 

2 Q Who was that? 

3 A Mr. Secord. 
* Q Mr. Secord? 

5 A Right. 

6 Q Can you tell me how that came about? 

^ A Well, I was in the process of buying the airplane, 
and I had explained to Mr. Gadd our criteria: very little 



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^ use, low capital cost and the high operating cost. The airplane 



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is not cheap to operate. And he said, "Gee, I know some -guys 
that are looking for that type of airplane." 

I said, "Well, I'm looking for a partner." And so 
as it turned out, Mr. Secord wanted to participate in the 
ownership of the aircraft. So he said he had trips that they 
wanted to run periodically. 
BY MR. LEON: 
Q From Washington? 
A Wherever. 
_ Q Didn't Secord live in Washington? 
A Yes. 

BY MS. NAUGHTON: 
Q When did you first speak to _Mr^ Sgj^jyJ^bout 
anything? 

A The first time I met him was in Mr. Gadd's office. 
Q When you and Mr. Bastian went there? 




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A No. This was January of '86. I think it was Dave 
Mulligan and myself. 

Q I want to get into all that later. 

A That was the first time I ever met him. 

Q So you know Mr. Secord at that point was affiliated 
with Mr. Gadd? 

A Yes. 

Q And Mr. Secord was interested in purchasing the 
Jet Star? 

A He was interested in having a jet aircraft available 
for them as well and we were interested in having a partner 
so we shared expenses . . . 

BY MR. LEON: 

Q What did you believe to be his use, their use? 
You said "their use." 

A He said they had wanted to be aible to move people 
once in a while in a very quiet fashion. I said that's great. 

Q Who did you believe he was 'referring to? 

A I didn't.' 

Q What company did you believe he was with? 

A Stanford Technology. 

Q Located in Washington? 

A I think in Washington here 
BY MS. NAUGHTON: 

Q Now, did Mr. Secord send you a check? 



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1 A That's what I don't know. I don't know how we got 

2 paid on that one. 

3 Q What was your understanding in terms of the percen* 

4 of the ownership? 

5 A We'd split it fifty-fifty. It wasn't just the 

6 acquisition costs; we also had spare engine parts, but our 

7 intent was to split it fifty-fifty. 

8 BY MR. LEON: 

9 Q How is he to get access to the plane when he is up 

10 in Washington? 

11 A Just give us a call. We would have our crews sent 

12 out and charge him our out-of-pocket expenses. It would not 

13 be capital costs and so forth. 

1* Q So it would be kept in Florida? 

15 A Yes. 

16 BY MS. NAUGHTON: 

'^ Q To your knowledge — first of all, who owns the 

1* plane now? Did you buy him out? 

'* A Yes. It was ours in our name 100 percent. 

*" Q But did you ever give him back his 50 percent? 

*' A He still owes us money, so we called it square on 



2* that deal. 

2^ BY MR. LEON; 



llNClASSra 



^* Q Did he take depreciation? 

*" A No. You know, that kind of thing — 



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1 Q Did he take tax benefits on it? 

2 A No. 

3 Q Did you? 

4 A I don't think we did. I think we just expensed it. 

5 It was really too small of an cimount of money to try to work 

6 out a depreciation schedule. I'm not sure. Mason may have 

7 done something, but it would surprise me. I would think we 

8 just expensed it. 

9 Q You believe they didn't? 

10 A I believe they did not. 

11 BY MS. NAUGHTON: 

12 Now, let's say from the time of its purchase, which 

13 I believe was in April of '76; isn't that correct? Would you 

14 disagree with that? 

'5 A No, I wouldn't disagree with it. 

Q Until, let's say, November of '86. 

A Okay . 

Q How many times did either Mr. Secord or Mr. Gadd 
or Mr. Dutton request to use the aircraft? 

A I don't know. No more than twice. 

Q Do you remember when the first time was? 

A Gee, I really don't. 

Q Would it have been near the time of purchase? In 
other words, did they take a test run themselves to see -- 

A Yes. We arranged a flight for them prior to the 



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1 purchase of the aircraft. We thought we would get one more 

2 trip out of the owner, and we did. We arranged for a flight 
^ for them. Again, we didn't have any crews. I don't know 
^ exactly what his flight schedule was 

Q All right. These were not your crews? 

A No. 

' Q Whose crews were tiney? 
8 



A Contract crews. Again, there is a lot of pilots 
around the country. Once they get checked out in a certain 
piece of equipment, they hire themselves out by the hour. And 
the crew on this flight was one that the previous owner often 
used to fly the Jet Star. 

Q Who arranged for the crew? 
A The owner, I believe. 

Q And do you know where this flight went? 
A No. But that stack we gave you that is not Gadd 
related, there is — do you have it with you? 

MR. BECKMAN: No, but I have a note of it. 
THE WITNESS: Well, that won't help. 
MR. BECKMAN: It's document 698 through 700 of the 
Jet Star flight. 

THE WITNESS: It is the only one in there. That is 
the flight. It's in that batch we just gave you last night. 
But I said it is not Gadd related. It is not. It is Secord. 
If you have it there, I can show it to you.. 

UNClASklLO 



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MS. NAUGHTON: I do not have it. 

THE WITNESS: To the best of tny recollection, the 
flight left here, went to Washington, went to Dulles, picked 
up Gadd and some other passengers, flew to] 

MR. LEON: Do you know who the other passengers were? 



^ THE WITNESS: No, I don't. Returned to Washington 



and came back to Miami. That I think was the trip. 
BY MS. NAUGHTON: 

Q When they came back to Miami, from, let's say, 

[were there any employees or mechanics or employees 
of SAT on the flight? 

A No. There was one on the other day. I checked. 

Q When you say the owner arranged for the crew, for 
that type of aircraft how mamy people are we talking about? 

A Two. The pilot and co-pilot. I think that would 
have a flight attendant as well. 

Q Who actually arranged this? In other words, was it 
Gadd or Diitton or Secord? 

A I don't remember. I think it was Gadd. I think 
Gadd actually arranged it and Paul Gilcrest. I just put those 
two in touch. I didn't talk to them amymore about it. 

Q And was it your understanding that Mr. Gadd was going 
with these people on this flight? 

A Yes. 

Q And when the flight returned, did you speak to Mr. 



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UNCUSSinED 



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Gadd or Mr. Secord? 
A No. 



You didn't ask them how they liked the plane? 

I don't think so. I asked the crew. 

And what did the crew say? 

They liked the airplane. 

How did they like" 

They thought it was interesting. 

What did they mean by that? 

Well, 





BY MR. LEON: 
Q Who was the pilot? 

A A gentleman by the naone of Phil SobeLman. 
Q Spell his last name. 
A S-0-B-E-L-M-A-N. 

Q Do you know where he is now? Miauni? 
A These people don't work for us now. They are 
corporate type pilots. 



UNCUSSIFe 



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12 

etiun-1 
(4:30) 



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BY MS. NAUGHTON: 

Q We are on the Jet Star flight. When you spoke 
to the crew, did they mention anything about the passengers? 

A No. 

Q They landed in Miami. Let's correct that. From 
where did they go? 

A Back to Dulles, I believe. 
BY MR. LEON: 

Q When a pilot flies a plane from one country to 
another, when it is a private plane like the corporate ]et, 
do they have to check the passports of the people who are 
flying with them. A, to see if they have a passport, and 
B, if they don't? 

A Gee, I don't know. 

MR. BECKMAN: I think what you are thinking of, 
Mr. Leon, is the responsibility put on a common carrier by 
the Immigration Service to be sure that it doesn't bring 
in someone who doesn't have proper travel documents, and can 
be fined $1000 per passenger. You are used to having your 
travel documents checked when you go out. I don't think 
that happens with a private plane. 
BY MR. LEON: 

Q I wanted to know if he knew from experience. 

A I don't travel by small airplane very often. I 
don't know. Somewhere you have got to go through 



ire you have got to go tl 

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Immigration. 

Q You own a Jet Star now, right? 

A Right. 

Q If you were going to fly a group of people to, 
let's say. Central America from Miami, would you or would 
someone in your organization first check to see the passports 
of the people you are flying? 

A There are two parts to that question. One, the 
airplane is not for hire. We can't take passengers. We 
only can carry company personnel. That is the way it is 
certified. And, yes, we would tell everybody to take their 
passport . 

MR. BECKMAN: Just as a courtesy, but do you feel 
there is a need by Government regulations or whatever to 
check. 

BY MR. LEON: 

Q It could be company policy that the pilot, for 
exaunple, checks everyone's passport to make sure they have 
it with theira. 

- A It wasn't my flight, and I 3ust don't travel in 
a small airplane enough to answer your question. 
BY MS. NAUGHTON: 

Q After this flight, then did you receive the check 



from Mr. Secord? 



Yes. 



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Q And do you know on what check, in other words, 
on what company and what account it was written? 
A No , I don ' t . 

MS. NAUGHTON: Mr. Beckman , did you provide us 
with an answer to that question? 

MP. BECKMAN: Which question? 

MS. NAUGHTON: As to on what account Mr. Secord 
wrote the check? 

MR. BECKMAN: Which question was that? 

MS. NAUGHTON: Mr. Kirstein and I discussed the 
check for, I believe $150,000, it was either S115- or 
$150,000. 

THE WITNESS: One fifty. 

MR. BECKMAN. I think that this must be the check 
that I spoke to David on the telephone and he said he asked 
Mason, must have told you he was going to ask Mason and 
Mason was checking, but the answer is, I don't have the 
intormation today. 

MS. NAUGHTON: Fine. We will make a request for 
the record to get a copy of that check. 

THE WITNESS: You are assuming there is a check. 
I am not sure that is even the case. I will find out. 

BY MS. NAUGHTON: 
Q I am assuming that because I was told that by 



Mr. Kirstein. 



iiNtussro 



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A I will find out how it was paid. I don't know what 
vehicle or what. It could very well have been ACE. 

Q But through whom did you conduct these negotiations;; 
In other words, was it your understanding that Secord was 
going to pay for it and so it is through Secord that you 
did the negotiating? 

A Actually it was very simple. I told Gadd what the 
airplane was going to have them costing, and the next thing 
I know he said -- in fact, I knew, it was money transferred 
to ACE; I am sure of that. We will verify that. We will 
look for 100-1/2. 

MR. BECKMAN: I think we gave you all the 
financial records. There weren't that many. 

MS. NAUGHTON: Yes, but I don't recall there being 
one for the Jet Star. It certainly wasn't in Mr. Mason's 
chronology because we sort of focused on flights. 
MR. BECKMAN: What did Mason — 
MS. NAUGHTON: I was not here for most of his 
deposition. 

BY MS. NAUGHTON: 

Q But it was your understanding that this contri- 
bution was for Mr. Secord, not for Mr. Gadd? 

A Right. 

Q Was there another requested flight for either 
Mr. Secord or Mr. Gadd or Mr. Dutton after this one that 



UNCLASSIFIED 



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you have juBt described, the sort of test run? 

A Yes, and I really don't know exactly when it was, 
but we were requested to make a trip from Miami to| 
and return. 

Q Without a stop in Washington? 

A Without a stop in Washington and who got the crews 
for that? 

A We did. It was now Dur airplane. 

Q Was that an SAT crew or contract crew? 

A The SAT crew. 

Q Do you remember who the pilot was? 

A I think it was a combination. I think we had 
one of ours checked out in the right seat and somebody else's 
in the left seat. 

Martin Fernandez was our employee who flew that 



trip . 



Q 
A 

Q 
A 
Q 
A 

Q 



And is he still an employee of yours? 

Yes, he is. 

Do you know who was flown from Miami t 

Yes. 

Who? 




Where is he from? 




IINCLASSIFIEO 



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Who else? 



(jMSllSSm 



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A And Max Gomez. 

Q Had you met Mr. Gomez before? 

A I don't know. I met him twice, I think, once 
this time and one other time in the hall, I don't know. 

Q And who did you understand him to be? 

A I understand he was liaison for 
and working with Bill Coopei 




Q So ^^^^^^^^^^^^^Hwas helping with the logis- 
tical problems 

A Yes, he ran the base. 

Q Did you ever come to learn or was it ever your 
understanding that any of the cash that was used to send 
down there was used to 




A No. 

Q Do you have any reason to believe that? 

A No. 

Q Was there anyone else on the flight besides 
the crew, ^^^^^^^|^^^^^B| and Majc Gomez? 

A We had a flight attendant on that flight as well, 

Q Do you know who that was? 

A No, I don't. 

Q Do you recall approximately when that occurre^^ 




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A I don't know. It was sometime in the summer. 

Q Was It after Mr. Dutton had taken over? 

A Yes, I believe so. 

So It would have to have been July or thereafter? 

A June or thereafter, yes. 

Q Did Mr. Dutton arrange this? 

A I don ' t remember . 

Q Were there any other trips taken with the Jet 
Star by Secord or Dutton? 

A Not that I am aware of. 

Q To your knowledge was Oliver North on any of 
those flights? 

A Not that I am aware of. 

Q Did you ever meet Mr. North? 

A Never have, no. 

Q Do you know whether Mr. Gadd , in supplying the 
contras and conducting this contra resupply, ever paid for 
aircraft parts through his own companies or did he do it all 
through SAT? 

A I have no way of knowing. That was our function. 
I don't know why he would, but I really don't know. 

Q Would it be tinusual for him to have paid a bill 
to an aircraft supplier company for $9000 for such a round 



sum; 



Gee, I don't know. You know Mr. Gadd has many 

UNCLASSIFIED 



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enterprises, and I really couldn't guess what all he pays. 

Q Do you know where these supplies came from that 
were shipped to the contras? 

A Maybe you could be more specific. Which supplies? 
Q Any of them. 
A No. 

Q Did they all come from the same freight forwarder, 
or were they shipped to a central point, or do you know 
where they were picked up? 

A I guess I don't know what the question is. 
Q In the contra resupply operation, supplies were 
sent to the contras? 
A Yes. 
Q Do you know from where they came? 

MR. BECKMAN: I think one of your problems is 
you haven't established, to move the interrogation, what 
Southern Airlines' involvement was with any supplies. 

MS. NAUGHTON: I understand. They claim it was 
purely maintenance. I understand that. I am asking him 
his own personal knowledge, though. 

MR. BECKMAN: They did. They did on a number of 
flights, didn't they? 

MS. NAUGHTON: Yes. 

MR. BECKMAN: You are talking about NHAO. 



UNCLASSIFIED 



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BY MS. NAUGHTON: 

Q When I say contra resupply, I mean this privately 
funded organization. 

A I don't know what all was shipped by that organi- 
zation. If you want to ask my opinion, a good part of it 
had to be what NHAO sent down; it went to^^^^^^^H it went 
to ^^^^^ 

Q Those are separate flights we can get into, but 
now I am talking just about the privately funded portion 
of it. 

Do you know where those supplies came from? 

A No, I don't. 

Q Did Mr. Gadd ever discuss where he was getting 
them or whether he had difficulty getting them or what he 
was getting or anything along those lines? 

A Yes. He said the petrts were what was staged at 
with the relief goods from NHAO. 

Q He told you on or about October of 1985 that he 
was going to put together a privately funded channel to 
supply the contras , correct? 

A A privately funded mechanism to supply, not to 
buy supplies, only to deliver supplies. That is all we 
ever talked about. We never talked about what the supplies 
were or where they came from. It was somebody else's 
problem. This was only for the delivery of those goods. 




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Q So you didn't know if the goods were from 
Government- sponsored programs or where the goods were coming 
from; is that what you are saying? 

A Right, that is what I am saying. 

Q But you know that the NHAO flights were sponsored 
by the Government? And did you think there was a difference 
between those flights and the ones that Mr. Gadd was trying 
to arrange privately? 

A Yes. 

Q As far as the NHAO flights, do you know why it 
is that Mr. Gadd conducted those through Air Mach as opposed 
to through EAST? 

A No, I do not. 

Q Were you paid by EAST? 

A Yes, I believe. 

Q Did you have some difficulty with the State 
Department? 

A Yes, I did. 

Q Could you explain what that was? 

A Let me go back and reconstruct the NHAO flights. 
I was asked by Mr. Gadd if we could work out some pricing. 
He wanted to bid on this NHAO contract, and have us sub 
service. The question to me was, if you flew out of Miami 

what would you charge. So I told them. He 
says. Do you think you have the availability to do this on 




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a routine basis? I said I don't know, but I am sure if 
giving a 72-hour or more window, I could always arrange to 
have an airplane to make that flight, so I gave him my price 
and he went and bid on the contract. Okay, the first trip 
was not from Miami, I don't believe. It was out of New 
Orelans, if I recall, so there is quite a difference in 
flying from Miami to New Or lean/ s^^^^^^^^^^| and back 
to Miami, and I said, Dick, this isn't what we agreed on. 
And he says. Yes, I know, and we are going to have to get 
this straightened out. 

So he did discuss it with the NHAO office, 
you know, if the flights were going to deviate, we had to 
get paid for the additional hours, and an agreement was 
struck that any hour over and above the basic trip would be 
at $3000 an hour. 

Then we were hit with an insuramce problem. 
Immediately we went down there. Any time you go^out of 
country, you notify your insurance company. We said. We 
are going to El Salvador. They wanted a $5000 per transit 
s€bp charge. So that was a problem for us, because that was 
not built in the price either. We have worldwide coverage. 

So I threw that back at him, and it became quite 
a hassle and I met with Mr. Duemling in my office. He was 
going through, and just to show him an insurance bill for 
the flights. I said, I am not making this up; it is a fact 



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of life and we are going to work on it and try and get it 
into a reasonable rate, but right now I have got to add it 
to the bill. 

He said, I understand, and that was it. Well, it 
wasn't it. I think we were paid for the first few flights 
and then it became a debate with the State Department what 
was the proper charge and so forth. 

The other thing is then they wanted us to go to 

and 

you can't fly from there back to the States. You have got 
to go someplace and get fuel, so we had quite a few more 
hours of flying involved tham what the original contract 
was . 

To make a long story short, I guess we made 15 
trips for higi, and came to a settlement on insurance, because 
we were able to get a package insurance rate. We went back 
and adjusted all the billings to accommodate our actual 
insurance charge, and I guess that was the extent of it. 

I told them I really didn't care to ever do 
another flight for these people again. It was too much of 
a hassle. 

Q What was your impression of Dueraling? 
A A quiet guy. 

Q Why did the contract cease? In other words, did 
you refuse to perform any more flights or did the contractors 



UNCLIiSSIHEO 



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run out? 



UNCUSSm 



106 



A I think basically they used much of the money for 
supplies by then. Now, they did fly two more after we did 
with another carrier. 

Q Do you know who that was? 

A Yes, Mark Air. 

Q Where are they located? 

A Alaska, Anchorage, Alaska, but I think it was 
mutual. I think that I was not pleased with the way the 
whole thing was coordinated and I think that they felt that 
maybe we were being unreasonable and they went and looked 
for other carriers to operate it. 

Q Was there anything else you were dissatisfied 
about with the NHAO flights other than the insurance 
problem? 

A Well, we had I think three ourstanding issues. 
One is the extra flying involved, because we did have to 
go back. Actually, we went back to Saui Salvador to get 
fuel. If we went to^^^^^^^H we couldn't go direct out 

[back to the States, so we had a lot of extra flying 
We had a dispute over, I believe, a prepositioning charge. 
We had an aircraft in Dallas that we moved to Dulles and 
charged them for it, and they wanted us to cibsorb that 
charge on our own, and I said that is outrageous. I guess 




that was the extent of it. 



UNCUSSIFIED 



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The gentleman that ran the program was a rather 
unusual man. 

Q Who was that? 

A I guess Phil Buechler . 

BY MR. LEON: 
Q State Department? 
A Yes. 

Q B-u-e-c-h-1-e-r perhaps? 
A It sounds like that, yes. 

BY MS. NAUGHTON: 
Q When you say it was unusual, what do you mean? 
A Irrational. If you have got to fly, why debate 
It? And we don't fly for nothing, and that is what the 
charge was . 

My- contention was that if they had a problem 
with the billings, he should have told us immediately and 
we had a choice then to either fly at the rate they wanted 
or forget it, and it was very clear to me that they wanted 
us to continue to fly, and it was clear to me that we had 
told them what it is going to cost them to fly. 
BY MR. LEON: 
Q How did they get your name? 



How did who get my name? 



Buechler . 



UNCLASSIFIED 



Mr. Gadd . He came down on one of the very first 



585 



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flights. 

BY MS. NAUGHTON: 

Q When did Mr. Gadd ever approach your for doing 
any NHAO flights? 

A I don't recall. It was within a month of when 
we actually did it. 

Q So he approached you for the NHAO flights? 

A Yes. 

Q After or before you had the conversation 
regarding the private resupply network? 

A Probably after. 

Q And what did he tell you about this when he 
approached you about it, the NHAO flights? 

A It was a bid that he would like to bid on. We 
could get some extra trips, just ad hoc charters. 

Q Did he indicate to you in any way how this would 
dovetail into what he was doing with his private supply 

network? 

A The only dovetail was that the s upplies being 
by the L-lOOs to^^^^^^^^^^^^^^^M V^s , 
those were the goods that had to be delivered to the troops, 
boots, canteens, blankets and so forth. That was the whole 
purpose of it. 

Q And he indicated that those would be sent to the 

canteens 



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109 



and so forth? 
A Yes. 

Q Were all the flights to 
A No, that is what I said, they werel 



Q 
A 

A 




So you did go to| 

Yes, we did. 

Any other places in Central America? 

No. 



Q Do you know whether or not the goods supplied 
m the NHAO flights were United States made? In other 
words. United States military surplus? 

A I think most of them were. 

Q And was a single freight forwarder used for 
those, do you know? 

A Mario Calero was the guy who went around buying 
all the stuff, and I don't know what the freight forward 
company he used, but he was the guy buying it. 

Q But you don't know who was buying the stuff that 
was being supplied through the private netowrk, or was Mario 
Calero buying that as well? 

A I don't know. 

Q How did you know Mario was buying it for the 
NHAO flights? 

A I j'fent on a flight and I met him in New Orleans, 



UNCLASSm 



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and watched the load, and he was out there. I don't know 
that he was the only buyer, but he most certainly was on 
that load. It was all surplus goods. 

Did Mario tell you anything about shipping arms? 

A No. 

Q On the NHAO flights, did you pick up at different 
points or was it always the same loading point? 

A The same loading point. 

New Orleans? 

A It was Miami and New Orleans. Most of it was 
outlof New Orleans. 

Q Where m New Orleans? 

A Right at the airport. 

Q Did SAT make any flights in either 1985 or 1986 
to Havana? 

A Sure. 

Q Why do you fly to Havana? 

A For the State Department. 

Q For what purpose. 

A We have a mission there. Gee, we probably 
flew on an average of once a month down there ^ust taking 
goods to the people in the mission. 
Q What kind of goods? 

A Oh, construction material, autos , everything that 
they wanted, whatever they had. At Christmas, booze. 



\m mm 



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turkeys . 

MR. LEON: You don't get those down? 
THE WITNESS: They have got a lot of room. It was 
]ust goods. Most of it was construction material for some 
reason. They were in the Swiss embassy, and they were 
rebuilding . 

BY MR. LEON: 
Q Did you fly into Guantanamo Bay? 
A No, into Havana. 
BY MS. NAUGHTON: 
Q I don't understand. What were you saying about 
the Swiss embassy? 

A That is where our mission is, is in the Swiss 
embassy . 

Q Oh, okay. 

MR. BECKMAN: We don't have relations? 
THE WITNESS: We don't have any. 
BY MS. NAUGHTON: 
Q Do you recall reading a story -- I hate to 
bring up the press, but I want to get it on the record and 
you can flail away — in the Philadelphia Inquirer regarding 
SAT flying parachutes out of the country, supposedly pur- 
chased from a man named Joe Smith? 
A Gee, I — 



UNClASSm 



MR. BECKMAN: This is a load of parachutes we 



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took, IS that It? 



WUSSIflED 



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BY MS. NAUGHTON: 
Q Yes, to supply the contras, that he claims were 
actually flown by SAT. 

MR. BECKKAN: Bought from Joe Smith? 
MS. NAUGHTON: Yes. 

THE WITNESS: I don't know anything about it. 
BY MS . NAUGHTON : 
Q Why don't you supply for us that one flight that 
SAT ended up flying into Nicaragua, not SAT flights into 
Nicaragua, but the April, 1986, incident. 
A That was SAT. 
Q Why don't you describe that? 

A I was asked if we could do an air drop to the 
contras, that they were again in extremely dire need of 
supplies . 

Q Was this by Gadd? 

A Yes. I said, yes, we could. We had already been 
over many times that we could not fly into Nicaragua for 
insurance reasons, but we most certainly could do an air 
drop, was ^^^^^^^^^^^^^^^^R there 

problem with that, and so we did, went down, and made an air 
drop and as far as I knew it was very successful and never 
even heard of it until December. 

Now, that IS my fault, because I didn'Jt ask for 



590 



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any debrief mgs afterwards. I ]ust heard that it was 
successful and I said. Great, that is fine. That is the 
best I can tell you. 

Q Who told you it went fine? 

A Actually Gadd did. I didn't debrief the crew. 

Q And when did you find out that the plane had 
actually flown into Nicaragua? 

A In December . 

Q How did you find out? 

A My chairman called me. 

How did he find out? 

A He read it in the press. 

Q How did they find out? 

A I don't know. They talked to somebody. 

Q Who was aboard the plane? 

A No, I don't think so. I think that by then all 
the people involved there had gone to the winds and they 
had talked to somebody that was involved in the operation, 
and said yes, they flew an air drop into Nicaragua, and then 
as we checked further, said, yes, as a matter of fact we 
did. 

Q Who told you that they had? 

A Who told me that we had? 

Q Yes. 

A I think Paul Gilcrest. I think he was one I asked 



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UNCLASSIFIED 



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to check on it for me. 

BY MR. LEON: 
Q Did he fly? 
A No. ' 

BY MS. NAUGHTON: 
Q Who did? 
A Bonzo Van Haven and Martin Fernandez. 

BY MR. LEON: 
Q Do you have a flight log of that trip? 
A Yes. 

Q Is that something we have? 
A Yes. 

BY MS. NAUGHTON: 
Q At this point were they contract pilots for you 

or what? 

A Bonzo was, yes, but Martin was our chief pilot. 

Q And did they indicate to you that they felt they 
had to have authority to go into Nicaragua? 

A The crew? 

Q Yes . 

A Again, it is another flight. I didn't check 
with the crew. 

Q I mean afterwards when this all hit the paper, 
what did they tell you? 

A They felt that this was ^21lfiUl^"'3 '^^^^ everybody 



jlt that this was somgUii 



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was gung-ho for/ and I aiti sure they were. I am sure they 
got all kinds of -- Colonel Steele was out giving briefings 
before they even departed, so I mean there wasn't any 
question in their mind that this was a well-approved flight. 



What did Colonel Steele tell them? 

I don't know. 

But he gave some kind of briefing? 

Yes. 

Do you know where that was? 



Q 
A 

Q 
A 
Q 

Q What did he tell them if it was gung-ho? 

A Well, you don't have a U.S. Army officer out 
there briefing you if you didn't feel that it was a U.S. 
Government flight, and they just followed their instructions 
explicitly. . They told them what flight quadrants and 
patterns to fly down, what to look for. I am not saying 
Steele did it all, but he was most certainly along there 
with this staff. This is second-hand. This is what I was 
told. 

BY MR. LEON: 

Q Who told you that, Gilcrest? 

A Gilcrest, who in turn heard that from Fernandez. 
BY MS . NAUGHTON : 

Q Do you know what they dropped? 



No, I don't. 



UNCLASSIFIED 



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Q Also m April of 1986, SAT transported a washer and 
dryer to Switzerland for a Willard Zucker. 
A What? 

Q Do you know anything about that? 
A No . A washer and dryer? 
Q Yes. 
A To Switzerland? 

MR. BECKMAN: Who was it for, Willard? 
MS. NAUGHTON: Willard Zucker, Z-u-c-k-e-r. 
MR. BECKMAN: Who is he? 

MS. NAUGHTON: He is a businessman in Switzerland. 
MR. BECKMAN: Have you discussed with this -- 
MS. NAUGHTON: I think I did a couple of weeks 
ago . 

MR. BECKMAN: With me? 

MS. NAUGHTON: No, not with you, I am sure it 
was with David. It was EAST invoice No. 08709. 
MR. BECKMAN: EAST invoice zero — 
MS. NAUGHTON: 8709. 

MR. BECKMAN: What did David tell you, or did he 
say he was checking? 

MS. NAUGHTON: I don't recall. This was several 
weeks ago. We discussed a numberbf things, but I ]ust 
wanted to ask Mr. Langton whether or not you knew anything 



about It. 



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THE WITNESS: It sounds absurd. 
BY MS. NAUGHTON: 
Q Why would that sound absurd? 

A They have washers and dryers m Switzerland. 
Why would we want to send them one, plus I never heard of 
the name before, but it doesn't make any sense to me. 

Q This was a flight from Lisbon to Switzerland. 
Would you have flown to Lisbon for any other purpose? 

A You are really throwing some curves at me. 
I am not aware of any flight from Lisbon to Switzerland. 
Q Is that a route that you would remember? 
A I would think so. It sounds like a charter, but 
I don ' t know why we would -- 

MR. BECKMAN: What airplane was used, do you 
know? 

MS. NAUGHTON: I don't know that it would even 
say that on the EAST invoice, but I could look. 

MR. BECKMAN: This is an invoice to EAST? 
THE WITNESS: I have got a feeling that we have 
got some locational codes all mixed up here. It doesn't 
make sense to fly a washer and dryer from Lisbon to 
Switzerland. 

BY MS . NAUGHTON : 
Q It didn't to me either. 
A Maybe if you can find what it is, where it is 



UNCUSSIFIED 



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1 that you have got. It is an EAST invoice? 

2 Q Yes. 

3 A Maybe we can get some clarification. I know we 

4 bought a washer and dryer as Air ACE did for some of the 

5 people m Central America. 

6 Q While we are on that, can I show this invoice for 

7 a minute? This is another invoice from EAST, Inc., made 

8 in 1986, invoice No. 80782, and it relates to an L-lOO 

9 on a Defense Department contract apparently brokered by 

10 Gadd. 

11 Was this an ongoing contract? 

12 A This contract we have, and this is a service 

13 fee that I approved to pay E.^ST. 

14 Q Is this a separate contract? 

15 A Yes. It has nothing to do with Central America 
18 or Iran. 

17 Q Or Sumarico? 

18 A Or Sumarico. 

19 Q This is a separate contract? 

20 A Right. 

21 MR. BECKMAN: This is not a document we provided 

22 though, is it? 

23 MS. NAUGHTON: No. 

24 BY MS. NAUGHTON: 

25 Q When did this contract come into being? 



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A May 1 



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Q Was it ]ust for one month? 
A No, it went for five months. 
Q And what was it for? 

A For his services, his offices. We have a contract 
which is a classified contract and there are functions that 
he helps us with. It is professional services. 
Q For his personal -- 

A His company's professional services. I hired him. 
Q For a five-month period? 
A Yes. 

Q Can you tell me for what agency this contract 
was? 

MR. BECKMAN: He has already said it is 
classified. 

BY MS. NAUGHTON: 
Q Can you answer that question? 
A No, it is a DoD contract. 
Q Rick, do you want to ask your questions now? 

BY MR. LEON: 
Q Let me ask for a few questions. We are going 
to break at 5:30 and reconvene tomorrow morning. 
THE WITNESS: You mean you have more? 
BY MR. LEON: 
Q Let me just ask a few now and I will have some 



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more tomorrow morning. 

You were in the Coast Guard? 

A Yes. 

Q What years were that? 

A 1965 through 1969. 

Q Was that right out of high school? 

A Yes. 

Q Where were you stationed? 

A The first year I was stationed -- well, the 
first year I was in school in Connecticut, became a radio 
man, and I was stationed in Seattle. 

Q Where is the school in Connecticut, New London? 

A It IS actually in Groton, which is right in New 
London. I don't even think that is a Coast Guard school 
ar.iTTiore. I believe it has turned into a community college 
since then. 

Q Your specialty was radio? 

A Yes. I was stationed in Seattle for two years 
and the last year in Vietnam. 

Q So you were in Vietnam 1968-69? 

A Yes. 

Q Where in Vietnam did you serve? What was your 
unit? 



A It was on the Coast Guard cutter Wachusett, 



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Q Where was that located or stationed? 

A Well, we were part of what was called market 
time operations, so we served from the DMZ all the way 
around to the Gulf of Thailand. 

Q So you were there, what, a ten-month tour? 

A Yes. 

Q Were you on a ship the whole tour? 

A Yes. 

Q What was your job on the ship? 

A I was radio man. 

Q Did you have the sajne commanding officer the 
whole time? 

A Yes. 

Q Who was he? 

A Now he IS Admiral Lucas, L-u-c-a-s. 

Q Where is he stationed? 

A I think he is here. 

Q Coast Guard? 

A I think he is here now in Washington. The last 
I heard he is not commander of the Coast Guard yet but he 
is one of the -- 

Q Pretty high up? 

A Yes. 

Q At that time he was just, what, a Captain? 



He was a Commander. 



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Q As a radio man, do you work with codes? 

A Yes. 

Q Secret codes? 

A Yes. 

Q What was your clearance back then? 

A Secret crypto. 

Q When you got out of the Coast Guard, you went 
to college? _ - 

A Yes, I did. 

Q At the University of Washington? 

A No, first I went to Shoreline Community College, 
and then I went to the University of Washington. 

Q Where is Shoreline located? 

A In Seattle. 

Q Did you ever get a pilot's license? 

A Never did. I am not a pilot. 

Q When you started out with Flying Tiger, what kind 
of work were you doing for Flying Tiger? 

A I was an analyst, numbers. 

Q Did you have an accounting degree? 

A No , I did not. 

Q Business administration? 

A Business administration. 

Q Have you stayed active in ham radios? 



No, I have not. 



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Q Amateur radio? 

A I hated it. 

Q Have you stayed in contact with Admiral Lucas 
over the years? 

A I think I have met him twice since then, once 
m Alaska and he was Chief of Coast Guard Operations m the 
State of Alaska many years ago. In fact, that was the last 
time. I haven't seen him in months. 

Q You were first introduced to Gadd by Bastian, 
IS that correct? 

A Yes . 

Q Was he introduced as a lieutenant colonel? 

A No. 

Q Was he referred to as Colonel Gadd? 

A No. 

Q Did Bastian explain to you then when he intro- 
duced you how he knew Gadd? 

A Yes. 

Q What was it? 

A Mr. Gadd came down with another gentleman who 
I really don't know, and introduced themselves, and explained 
what their needs and requirements were, so they introduced 
themselves. 

Q They introduced themselves to Bastian? 



A Yes. 



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Q Were you present when that happened? 

A No, this was before I joined the company. 

Q You don't know to this day who that other person 
was who came with Gadd? 

A No. 

Q Do you know a description of him? 

A No, I don't. 

C Do you believe Bastian knows who the other person 
is? 

A He may. I don't know. 

Q Have you ever had that person pointed out to you 
as having been the one who came with Gadd? 

A No. r 

Q So you have never met or seen that person? 

A I am starting to get confused. When I met Gadd, 
he was with one otherjindividual , and I don't remember who 
he was, and I haven't seen him since. 

Q Oh , I thought it was Gadd and Bastian, Gadd met 
Bastian, the other person was with him. 

A At that time there was more than one and I don't 
know who they were. 

Q You don't? 

A It was Gadd and several others, and I do not 
know who they were. 

Q But when you met Gadd' the first time with Bastian 



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A Yes, 



Q — there was also another person present? 

A Right. 

Q Were you introduced to that person? 

A Yes, I was. 

Q Do you recall his name? 

A No, I don't. 

Q Can you recall his description? 

A He was maybe 40, five foot, I will say, 11, 
slender . 

Q White male? 

A White male. He was also an attorney. 

Q He IS an attorney? 

A Yes. 

Q You have never seen him since? 

A No. 

Q Can you recall if Gadd has referred to him since 
in your presence, referred to him? 

A No. 

Q Did he have any kind of title or nickname or 

anything like that that sticks in your mind? 

A It would stick in my mind but I don't recall 
any, no. 

Q How about when you first met Secord? 



A Yes. 



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Q Was it Gadd who introduced you? 

A Yes. 

Q And who else was present? 

A I believe Mulligan was with me and Dick Gadd and 
the General. 

Q Was his title brought to your attention? 

A No. 

Q His position? 

A He introduced himself as Mr. Copp . 

Q Mr. Copp? 

A And then the secretary came in in a few minutes 
and said. General Secord, you have a phone call. 

Q Where was that? Where was that meeting? 

A In this conference room, Mr. Gadd ' s conference 
room. 

Q Out in Virginia? 

A Yes, so we didn't call him Mr. Copp anymore. 

Q Would that be Copp, C-o-p? 

A C-o-p-p, I think is the way the Tower Report 
3p>elled it. 

Q Did Mr. Gadd fill you m on General Secord 's 
background? 

A No . 

Q Has anyone ever filled you in on General Secord 's 
background? 



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A Only what I have read in the paper. 

Q Have you ever informed Mr. Gadd of your background 
in the military? 

A Yes, I believe so. 

Q Gadd? 

A Yes. 

Q Do you remember how long it was after you had 
met Gadd that you had done that? 

A No. It IS not a very exciting military back- 



ground . 

Q 

A 

Q 



How about General Secord? 

I doubt that I ever discussed it with him. 
Were you ever paid in cash by Mr. Gadd for any 
of the services that SAT rendered? 

A No- 

Q How about by General Secord? 

A No. 

Q Who if anyone do you know in Arrow Air's 
management? For example, do you know their president? 

A You are asking me who I know over there? 

Q Yes. 

A Oh, I know George Bachelor. 

Q What is his position? 

A He is the owner. 

Q Does he .have a .person under him who runs the 



UNO hmm 



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business on a day-today basis? 

A His son was, John Bachelor, I have talked to him 
on the phone several times but he is no longer president. 

Now there is a new president and I don't remember 
what his name is as of last week. George goes through 
presidents on an annual basis. 

Q Mr. Bachelor, the owner, was he the owner back 



A 
Q 
A 
Q 
A 
Q 
A 
Q 
A 
Q 



Yes , 



When you first did some subcontracting? 

Yes. 

Did you bring Mr. Gadd over to meet him? 

No. 

Do you know if anyone in your company did? 

No. 

No, you don't know or no, they didn't? 

No, they didn't. 

Have you ever had any discussions with Mr. 
Bachelor about Mr. Gadd or General Secord? 

A No, I have not. I doubt that Mr. Bachelor even 
was aware of the sub services flown. That is ]ust something 
that is just a routine piece of business. 

(Whereupon, at 5:30 p.m., the deposition adjourned, 
to reconvene at 9:30 a.m., on Friday, March 13, 1987.) 



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RPTS CANTOR 
DCriN LYNCH 



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COPY Nl>< 



DEPOSITION OF UILLIAFI G. LANGTON (RESUMED) 



1 



JC»«£S 




Select Coraraittee on Investigate Covert 
Arms Transactions with Iran. 
U.S. House of Representatives 
Washington, DC. 

Friday, March U , 1987 



The coraraittee met, at 9^30 a.ra., m room B-336 Rayburn 
House Office Building, the Honorable Lee H Hamilton, 
Chairaan of the Coraraittee, presiding. 

PRESENT: Richard J. Leon, Deputy Chief Counsel for thfc 
Minority; Kenneth Buck. Assistant Minority Counsel. 

ALSO PRESENT: Robert Beckman, Counsel for Southeastern 
Air Transport . 



unaei \)i^ Ceruntv Council 

by N. Menan, National iecuruy v. 



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HS . NAUGHTOH: My name is Paraela Naughton. This 
IS the second day oi the deposition of Mr. William Langton. 
li everybody in the room can identify themselves, give your 
name for the record please. 

Mr. LEON: ny name is Richard Leon, Deputy Chief 
Counsel for the Minority. 

Mr. BUCK: Kenneth Buck, Assistant Minority 
Counsel, same committee. 

Mr BECKMAN: Robert M. Beckman, Counsel for 
Southeastern Air Transport. 

Mr. LANGTON: William G. Langton, President of 
Southeastern Airlines. 

MS. NAUGHTON: To start off, Mr. Beckman wanted to 
put some answers on the record regarding questions that 
arose at yesterday's session. 

Mr. BECKMAN: Yes, Ms. Naughton. You asked us to 
try to get the destination in Central America of a flight 
performed by Southeastern Air Transport with its own 
aircraft in December of 1 985 ^^^^^^^^^^^^car rying Class E. 
explosives, and also the name of the pilot. 

The destination is^^^^^HHand the pilot's nme is John 
nooza . 

You also asked us to identify the bank from which the 
*150,000 was transferred regarding the Jet Star airplane. 
In this document number 1667, that we have produced, which 






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shows that raoney carae from Credit Suiss 
via the Chase Manhattan Bank of New York. 
Ms. NAUGHTON: Thank you. 
BY MS. HAUGHTON: 
2 Mr. Langton, is Mr. Moore still employed with 
SAT? 

A Yes , he is . 

BY MR. LEON: uhat is his first name? 
THE WITNESS : John. 

MS. NAUGHTON: ue were on the subject yesterday 
I think we left off on the subject of contra supply, support 
functions performed by SAT. I only had one other question 
in that area for now. 

a Has there anything unusual that happened during 
that operation from the time you began running it in around 
January of "86 until the time it ceased' Is there anything 
unusual that comes to your mind regarding any particular 
crisis ? 

MR. BECKMAN: Excuse me. Just on the basis that 
one day this transcript may become public, and some official 
of the press will take your question literally, you implied 
that Souther Air Transport was running the contra supply 
effort in your question. 

MS. NAUGHTON: Ho. I said support. 

MR. BECKMAN: Ue weren't running the support 



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NAME: HIR072000I li t lIJ^fAV*"** * ' PAGE U 

75 effort there. I don't mean to pick on you, because uithin 

76 the context of the way we have developed this, we all 

77 understand what ue are talking about. I :ust wanted to ask 

78 you if you might want to clarify it a little. 

79 BY ns . NAUGHTOH: 

80 . 2 In the course of your maintenance functions for 

81 the aircraft that was purchased by Gadd related companies to 

82 supply the contras, was there anything unusual that happened 

83 during that, let's say, nine month period from January 

84 through September of 1986 that you can recall? 

85 A No, I can't. 

86 . 8 It was 3ust routine maintenance services? 

87 A Yes. I mean, the whole function itself was 

88 unusual, so to say something more unusual, nothing I think 

89 stands m ray mind now. 

90 . 2 Can you tell us why Mr. Gadd was replaced by 

91 Mr. Dutton? 

92 A No , I cannot . 

93 8 What were you told when Mi . Gadd was replaced 

94 by Hr . Dutton? 

95 . A I was told by Hr . Gadd that Mr. Dutton, 

96 primarily General Secord, wanted to take a more direct 

97 operational control. 

98 2 Did he say why? 

99 A No, he did not. 



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NAHE 

100 S Uhat uas Mr Gadd's attitude when he told you 

101 that? Has he angry at Mr. Secord? Uas he glad to be rid oi 
t02 It? 

103 A I think a little bit disappointed, but in the 

lOLi same sense, he is a realistic individual. That is uhat they 

105 wanted to do, fine. 

106 . C Had Gadd given you the impression then that Mr. 

107 Secord was the one running the operation? 

108 A Yes. 

109 . e With anybody? 

110 A No . 

111 fi If we can turn now to the subject of the 

112 flights to Tel Aviv and Iran, could you tell us how that all 

113 came about to begin with? 

1 1 ij . A In, I think it was January, 1986, I received a 

115 call from Mr. Gadd asking me if I could come to Uashmgton, 

116 and for raa--which I did. I believe that was the meeting that 

117 I was introduced to General Secord as Mr. Cop, which within 

118 a few moments was clarified, and in that meeting, it uas 

119 proposed, number one. it uas a U.S. Government flight. Uhat 

120 thay wanted to do uas fly out of Kelly to Iran. I took doun 

121 tha infornation and said we had problems for us to perform 

122 and we would get back to him. 

123 2 Uho explained to you this mission? Has it Mr. 

124 Secord or Mr. Gadd? 



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NAME: HIR072000 ^ ' ^ '"^ i-iTl^ v/ J I I I 11 PAGE 

125 A Mr. Secord. 

126 2 And could you tell us as carefully as you can 

127 remember, what exactly he told you about the mission? 

128 A I can give you m general terras uhat it was. 

129 It uas well over a year ago. I can't tell you exactly uhat 

130 uas said, but the gist of the conversation uas that they 

131 uere trying, the U.S. Government uas trying to establish 

132 relations uith some moderates in Iran, and thus far, they 

133 had uorked out an agreement that ue would supply the 
13U Iranians with some Tou missiles. 

135 I will take that back. I am not even sure ue discussed 

136 uhat the cargo uas at that meeting, but that there uas some 

137 cargo to be moved into Iran, uanted to knou if ue could 

138 assist them, and I said, ue had been happy to assist the 

139 government in their endeavor but ue could not fly into Iran. 

140 e Why not? 

14 1 A Insurance. It uas very simply we have a loan 

142 at the bank that one of the very strict covenants is that ue 

143 do not fly where ue don't have insurance coverage and there 

144 IS no insurance coverage flying into Iran. 

145 2 Uho uas at this meeting besides Mr. Secord, Mr. 

146 Gadd and yourself? 

147 A I believe Dave Mulligan came with me on that 
1 48 meeting . 

149 2 Was this in Mr. Gadd's office? 



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A It was in his office, yes. 

2 In Vienna. Virginia? 

A Yes. 

g What did they say about the pickup in Kelly Air 
Force Base specifically? 

A Nothing . 

2 Mho was going to make the arrangement? 

A The arrangements were made by Mr Gadd's 
office . 

e Did they tell you about any prior shipments 

made to Iran? 

A Hot in that meeting. 

2 Later did they tell you? 

A Yes. 

2 Uho told you? 

A I think it was fir. Gadd. 

2 What did he tell you? 

A He told me that some shipments had been made, 

and had not gone well. They needed a reliable carrier. 

That is why we were asked to assist. 

2 What did he mean hadn't gone well? 

A They were unreliable. I am assuming they 

didn't hold to the schedule that was laid out for thera. 

2 Did he say who the carrier was? 

A No, he did not. 



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2 What did Mr. Secord say about whether or not 
this had White House approval or Administration approval? 

A He said It did have Administration approval. 

e Hou did he say it, do you recall? 

A No, I don' t . 

2 Hou did you get that impression? 

A It was very straightforward that this was a 
U.S. Government operation, and had the White House approval. 

2 Hou were you to get paid? 

A We uere paid by General Secord. 

2 But uhen you discussed it at this meeting, when 
you asked hou you uere going to get paid 

A I didn't ask at this meeting. I didn't even 
have a price uorked up or anything. 



Once you did, did you ask hou you were going to 



get paid? 
A 

e 

A 

e 

A 

2 



Yes . 

And what was Mr. Secord's response? 

We would receive a bank transfer. 

Did he say from where? \ 

Ho. 

Did Secord give you the impression that it was 
he who was aizangmg the finances, or someone he looked at, 
to someone else? In other words, would he say like "'I will 
go to the bank'' or ''I will get the bank draft for you'' or 



vm&B 



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'"I will have the funds uired'' or did he say ''My people 
Will, or someone uill. or I uill see to it that someone 
does' • • 

A I don't recall any of those statements. 

2 I am not asking did he say those specific 
things. What I are asking is did you get the impression that 
he controlled the money or someone else did? 

A I got the impression he did. 

B That he personally was sending the wire 
trans f ers ? 

A That he was either personally or instructing. 
He controlled it. That was the impression I got. These 
transfers would not occur without his 

BY MR. LEON: 

2 I was DUSt going to ask st some point, did 
Secord introduce you to, or mention any of his subordinates, 
people who were working for him? 

A Well, I met Mr. Button. 

2 Okay. How about besides Mr. Dutton. 

A Ho, I never met anybody else. 
BY MS. NAUGHTON: 

2 Did you ask either Mr. Secord or Mr. Gadd about 
getting a government bond to fly in? 

A Yes. 

2 And was that at this first meeting? 



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A I don't think so. I really at the first 
meeting it was a conceptual raeeting--is it something you 
could assist m, and what would it take. I then had to go 
back to the office and really discuss it. 

2 Did Mr. Secord or Mr. Gadd tell you that they 
did not want to get a government bond? 

A Yes. 

2 Or couldn't? What did they tell you about 
that? 

A He received a phone call at Mr. Bastian's house 
in which we basically--this is with Mr. Gadd. Me said, look, 
there is only several ways of doing this. He cannot fly our 
airplane in there, unless we go to our insurance company and 
ask for a coverage, or the government can provide us 
indemnity, or buy your own airplane and basically self- 
insure. As far as I could see, that was the only three 
alternatives . 

2 What did he say as far as the possibilities of 
a governnant bond? 

A Mr. Gadd took that information and said thank 
you, and we really never came to a conclusion on that. 
Latar, Mr. Gadd called back to me, said they did have a 
solution for it, and wanted somebody to come up to 
Washington. The discussion was that they didn't want us to 
go to our insurance company. They didn't want a government 



'JNCLASSIFIEO 



617 



mm^^^ 



NAME: HIR07200111^111 rtW^#"" " PAGE 11 

250 mdennity, and they weren't going to buy an airplane, but 

251 they had a solution. So I said, fine, and they sent Mr. 

252 Gilchrist up to meet with thera, lay out the operations. 

253 The reasoning uas they did not want to have a broad 

254 disclosure of the operation. It uas very, very sensitive. 

255 . 2 That is why they didn't want the government 

256 bond? 

257 . A That is why they didn't want a draft, get an 

258 indemnity, nor did they want us to go to our insurance 

259 company. 

260 . 2 And who was it that proposed this solution? 

261 A I believe I did. after discussion with Mr. 

262 Bastian. That uas the only ones ue could come up uith to 

263 get into Iran. 

264 2 And hou did you know you could use Israeli 

265 planes? 

266 . A That uas their solution. 

267 . MR. BECKMAN: No, I think you two missed. You 

268 uere ansuering uho proposed, who thought up the three 

269 alternatives you put up. Ms. Naughton is asking who 

270 proposed the solution that uas actually implemented. 

271 . THE WITNESS: I am sorry, I misunderstood. 

272 . BY MS. HAUGHTOH: 

273 . 2 Whose idea then uas it to use SAT crews but an 
274 



Israeli plane' 



oNcussra 



618 



HIR072000 



UNCUSSIFIED 



PAGE 12 



NAME ■ 

275 A ■ General Secord. 

276 . Q What did he tell you about the Israelis? 

277 A At that point I was not in the meeting, so 

278 nobody told me about it. I was briefed by Gilchrist when he 

279 returned. 

280 B And what did Gilchrist tell you? 

281 A Just siraply that they had some 707s, the 

282 Israelis did, that they were willing to let us use, and they 

283 could not use Israeli crews, and the question was could we 
28U provide crews , and the answer was yes . 

285 2 Did you have the crews file any kind of waivers 

286 or anything? Did you have them especially insured, anything 

287 like that? 

288 A No. I did not. 

289 . Q Did you all for volunteers? 

290 A Yes, I did. 

29 1 . S At what point were you aware of what the cargo 

292 would be? 

293 A I believe after that meeting with Gilchrist, 

294 when he went up, that was when we found out exactly what the 

295 cAxgo was and so forth. That was an operating meeting. 



iiNOHssro 



619 



NAME 

296 
297 
298 
299 
300 

30 1 
302 
303 
304 
305 
306 
307 
308 
309 
310 

31 1 
312 
31 3 
3114 
315 
316 
317 
318 
3 19 
320 



HIR072000 



RPTS CANTO 



DC LYNCH 



PAGE 13 



lINClASSiFIEJ 



BY MR. LEON: 
2 He was going to be the pilot' 

A No, he was not the pilot on the first trip, but 
he was going to organize it. 
BY nS. NAUGHTON: 
2 Were there any special preparations you uould 
have to make to ship Tow missiles? 
A None . 

2 Can you give me an idea of how many Tow 
miss iles--uhat Kind of a plane did you use for this 
operation? 

A A Boeing 707. 

2 And how many Tou missiles can fit m one? 
A Pretty close to 500. 

2 And so for the February flight you used two 
airplanes ? 

A Yes. Ue flew two aircraft into Tel Aviv, right 
A And they were each loaded with 500 Tows? 
A Yes . 

MR. BECKHAM: How do you know that? 

THE WITNESS: My recollection is 

HR. BECKMAN: Based on what? 

THE WITNESS: Based on what I was to do. 



ONtUSSIflEB 



620 



NAME -■ 
321 
322 
323 
324 
32S 
326 
327 
328 
329 
330 
331 
332 
333 
33U 
335 
336 
337 
338 
339 
3U0 

3m 

3142 
343 
3<4>t 
345 



HIR072000 



UNClASSlFitD 



PAGE 14 



HR. BECKMAN: Okay. That is the only point I 
thought should be brought out. I have sat through a lot of 
interviews, and there uere :ust boxes. What is happening? 
Unfortunately. Ms. Naughton. there is so much people read 
subsequently that is being fed m, and I was thinking that 
what you are trying to get is a distillation of what he 
knows, not what he has read in the press. 

MS. NAUGHTON: That question was simply a frame of 
reference question. There uere so many flights I :ust 
wanted to get straight which flights we are talking about. 

MR. BECKMAN: Sure. 

BY MS. NAUGHTON: While you were making 
arrangements with Gadd and Secord to do these flights, did 
you ever get the impression that Secord or Gadd had done 
these kinds of flights before? That is flights into Iran 
from some other point? 
A No . 
2 When you say no, what is the basis for that 



answer ? 

A 
baiore . 

C 
for thei»? 

A 



I didn't get the impression that they had done it 



Did you get the impression this was a new venture 



Well, as I said a little earlier, I was told that 



some flights had gone in there. I don't know that either 



UNClASSiPiEO 



621 



NAME 

346 
347 
3U8 
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350 

35 1 
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354 
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36 1 
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HIR072000 



UNCLASSIilO 



PAGE 15 



Secotd or Gadd were involved in them. In fact, I don't 
think Gadd uas involved in them. Possibly Secord. That it 
had not gone well, and they were looking for a carrier that 
could take care of the problem. Their customer could have 
been the one that uas looking for the solution, so I don't 
knou how involved they uere, I have not idea, but the 
information that at least a flight had been done prior to 
our involvement uas very clear. 

2 Let's say, for instance, m terras of information 
that they gave you about landing in Teheran, hou to do it, 
who uould be there, hou to conduct yourselves or uhatever. 
Uho gave that kind of information to either yourself or Mr. 
Gilchrist? 

A As far as I knou, all of the information for the 
flights into Teheran uas done in Tel Aviv by I believe 
Gilchrist, telling me Israeli intelligence. 

2 When you uere introduced to Mr. Secord, or even 
subsequently, what uas it that you understood that he did 
for a living ? 



Gadd is 
2 
A 
2 



Hy impression uas that he uas a broker, much as 

For uhat company? 

For the governnent. 

Did you associate him uith any particular 



corporation, any 



mmm 



622 



NAME ■ 

37 1 
372 
373 
3714 
375 
376 
377 
378 
379 
380 

38 1 
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38U 
385 
386 
387 
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389 
390 
391 
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39U 
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HIR072000 
A 
2 
A 
Q 
A 
Q 



UNCLASSIFIED 



PAGE 16 



With Stanford Technology. 

Uhy did you associate hira with that? 

That IS uho answered the phone when I called. 

Uhen you called Secord? 

Yes . 

Did you know uhat his position was at Stanford 



Technology? 

A No 



BY MR. LEON: 

Did you check out Stanford Technology in any way? 

No, I didn't. 

You were relying on Gadd's vouching for him in 



e 

2 
es sence ? 

A Yes. 

2 Was it your experience, had it been your 
experience before, Gadd, dealing with Mr. Gadd, that there 
were people, a lot of people out there, who would broker 
deals on behalf of the United States Government? 

A It is like any industry. There are people who 
specialize in certain facets of it, and there is without a 
doubt people who specialize in brokering work for the United 
States Government. 

2 Maybe I an just naive or inexperienced in this 
area, but it would seem to me that if someone were to 
represent to roe that they were representing the United 



UNCLASSIFIED 



'1 



623 



UNCLASSIFIED 



NAME 
396 
397 
398 

399 
400 
40 1 
402 
403 
404 
405 
406 
407 
408 
409 
4 1 
4 1 1 
4 1 2 
4 13 
4 1 4 
415 
4 16 
4 17 
4 18 
419 
420 



HIR072000 PAGE 17 

States Governraent m trying to make a deal. I would want 
some kind of letter or some kind of assurance, something to 
indicate, since they don't work for the governraent. they are 
not members, folks of the Department of Defense, that they 
are actually doing that. Unless I have misunderstood you, 
Secord never gave you or showed to you any type of 
authorization from the United States Government indicating 
that he was acting on their behalf, is that correct? 

A That IS correct. 

2 So basically, you were relying, as I understand 
It. on his word that that is what he was doing? 

A That IS correct. 

2 So I guess ray question would be why would you 
:ust rely on his word? 

A Uhy not' 

2 Since you didn't know hira prior to that first 
meeting with hira . 

A I don't know uhy I would challenge it. I mean, 
Mr. Gadd, Gadd had worked with hira for several years. 
Everything that he had said was done, and in any case, what 
h« Has proposing would not come about without total 
govarnaent involvement. 

2 Gadd--correct me if I am wrong again--uhen you were 
dealing with Gadd, Gadd wasn't brokering on behalf of the 
United States Governraent. He was dealing on behalf of a 



UNCLASSIFIED 



624 



mussra 



HAME- HIR072000 V»'^^ PAGE 18 

421 private fund-raising concern. Isn't that right? 

U22 A Mr. Gadd had DOD contracts, okay? And our 

•423 arrangement with him on Suraer ico--later to become East--uere 

424 involved in DOD contracts. So separate that from Central 

425 American activity. 

426 When I was introduced to General Secord, I was relying on 

427 Mr. Gadd's knowledge and contacts, that he was in fact 

428 representing the United States Government. 

429 2 Did Mr. Bastian, did Mr. Bastian ever ask you to 

430 get some kind of an assurance or some kind of written 

431 confirmation to insure that Secord was in fact acting on 

432 behalf of the United States Government? 

433 A No, he did not. 

434 2 To your knowledge, did Mr. Bastian and either to 

435 you or anyone else, ever ques tion--that is all, just 

436 ques tion--the legitimacy of Secord's representation that he 

437 was acting on behalf of the United States? 

438 A No, we did not. 

439 . BY MS. NAUGHTON: 

440 2 I would like to get back to Kelly Air Force Base 

441 for a moment. Had SAT ever picked up material before at 

442 K«lly Air Force Base for any reason? 

443 A Yes, we fly in and out of there everyday on our 

444 Log Air System. 

445 2 And those are domestic runs? 



UNCUSSIflED 



625 



NAME • 
(4>46 

4U7 
t4M8 
UI49 
450 
USl 
452 
453 
454 
455 
456 
457 
458 
459 
460 
46 1 
462 
463 
464 
465 
466 
467 
468 
469 
470 



HIR072000 
A 
Q 
A 
2 




^ ^ PAGE 19 

Yes 

Is that correct? 
Right. 

Did you ever pick up any material from Kelly and 
go on an international group' 
A I don't believe so. 

2 So there never have been any SAT flights from say 
Kelly to let's say Central America? 
A None . 

2 You seera fairly definite about that. Why is 
that? 

A I would know about them. He have an operations 
meeting every morning, at 9 o'clock, which I attend when I 
am in town, and that would be an unusual run for us. 

2 Do you know whether or not there are foreign 
commercial carriers that pick up at Kelly Air Force Base' 
A No , I do not . 
2 Could there be? 

A I suppose. I have no idea, no way of knowing. 
2 Is there a Fly America policy with DOD contracts? 
In other words, fly American airlines? 

A I think there is a United States Government 
policy m general that says Fly America First. I like to 
think there is . 

2 Have you or any member of your industry that you 



xfnussim 



626 




^r,'^-' :.•> 



KM 



NAME: HIR072000 V ■ 1 Wksl IW ># ■ • ••-I-' PAGE 20 

471 know oi , made any complaints to either the Department of 

472 Transportation or the Department of Defense regarding the 

473 use of foreign carriers as opposed to American carriers? 

474 A In what respect? 

475 2 In respect to Defense Department contracts. 

476 A I don't now of any Defense Department contract 

477 that was lent to a foreign carrier. I have never heard of 

478 such a thing . 

479 2 Do you know whether any of the people working at 

480 SAT had ever seen foreign carriers at Kelly Air Force Base? 

48 1 A None that I have ever heard of. 

482 2 When you pick up at Kelly on a government to 

483 government run, are there any sort of customs procedures 

484 that you have go through? 

485 A I don't know. I don't know. 

486 2 Are those runs logged on your 217s that you file 

487 with the Department of Transportation? 

488 A Which runs? 

489 2 Your Defense Department Log Air runs. 

490 A Mo. 

49 1 2 Hhy not? 

492 A The 217 only calls for commercial charters. 

493 2 So am I right in saying that the only government 

494 agency that would have a record of those actual routes, 

495 actual runs, would be the Department of Defense? 



UNCmSSIFI 



LU 



627 



NAHE 
U96 
M97 
U98 

499 
500 

50 1 
502 
503 
50H 
505 
506 
507 
508 
509 
510 

51 1 
512 
513 

5114 

515 
516 
517 
518 
5 19 
520 



NIX072000 



UNCLASSIFIED 



'* 



PAGE 21 



Y«S. 



2 
k 
S 
A 

e 




A 

fi Gattlng back to th« Iian flights, that* war* son* 
flights nada fiom Kally to Tal Aviv and then from Tal Aviv 
Into Iran in May of 1986. Is that correct? 
A That is correct. 

2 And then In the return flight froa Tel Aviv to 
the United States, there uas a back haul 
that correct? 

A That Is correct. 
What uas hauled 
Class CX eKploslvas. 
And who arranged that baok haul? 
In our company or where? 

Mo, who gave you the instructions to stop and 
pick It up? 

A That was coordinated witli Hr . Gadd's office. 
Gadd personally or soaaone else? 
I think Gadd personally. 
Was it his idea to back haul? 

Ko, I baliava he was requested. The back haul 
H«« a request. 

fi rroK who? 
A Froa General Sacord. 

2 Uas there anything else taken in that back haul 
besides explosives? 



UNCLiSSSIflE! 



628 






ii ir triiitliiiil -Tgnnf-^^ 



mOgUfgUl 



y> 



KAnZ: HIR072000 



UNCIASSIFIEO 



PACK 23 



521 
522 
523 
5214 
525 
526 
527 
528 
529 
530 
531 
532 
533 
534 
535 
536 
537 
538 
539 
540 
541 
542 
543 
544 
545 



A 

fi 
A 
S 
A 
S 



Not that I an awaia oi. 

And whara did it ily? Did it pick up 

Yas . 

Do you know axactly uhaxa 

Ho, I don't. 

And uhara did it fly to 






A I don't have the flight schedule. We gave it to 
you. I don't Know. 

fi Has li 

A I don't know on those flights. 

8 Was it at least Central Aaetlca? 

A Yes. 

fi Were theie any stops in the United States? 

A Ho. 

fi Do you know whether or not these were United 
States nade explosives? 

A I don't know. 

2 Do you know who accepted delivery? 

A Ho, I don't. 

fi When you deliver something, I assuae you nake the 
receiver sign for it, is that correct? 

A That would be a nornal activity, yes. 

fi And do you naintain those records? 

A For 90 days. 

fi And then you destroy thea? 



WWSWD 



629 



HIK072000 



IINCUSSIFIEO 



FAGS 23 



Hkni> 

5146 A ¥•■, wa do. 

5U7 fi Mould that ba tha aanliatt? 

SMS A I would think that would ba on tha nanliast, yas. 

5149 Q Uhat happans though ii a custonor disputas that 

550 ha cacalvad a cartain itaa aftai 90 days. How would you 

551 raconclla that claln? 

552 A I supposa I would tall hlB to iind hinsali a good 

553 lawyai. I hava navai haazd of such a thing. 
55U fi But that nanifast than Is thair only zacord of 

555 tha custonat, tha lecaivar, acKnowladging thay hava lacaivad 

556 whatavar naterials you haulad, is that corzact? 

557 MR. BECKMAK^ Excusa aa . You ara not suza bacausa 

558 thata ara bills of lading, thara ara all sorts of documants? 

559 THE WITNESS: Tha *anifast is tha shipping 

560 docunant. I don't know. 

561 BY HS. MAUGHTOK! 

562 fi Okay. For tha Hay Iranian trip, and tha back 

563 haul, do you know how you wara paid? 

56U A I ballava wa racaivad a bank transfar. 

565 fi And did tha transfar oovar both actlvitias? That 

566 is, tha Iran flight, and tha back haul? 

567 i Yas. 

568 BY HR. LEOK: 

569 Corract na if I am wrong . Has It your iaprassion that the 

570 sacond half of tha j our nay-- tha ^^^^^^^^^^^^^^^^H~ was it 




UNClASSiFlEO 



630 



HIR072000 



UNCUSSIFlEi 



PAGE 



2M 



NAKE 

57 1 your impression that that also was a United States 

572 Government response order activity? 

573 A No, it was not. 

574 2 Then why wouldn't it surprise you that you were 

575 getting paid for two separate acts, two separate missions 

576 from the same United States Government pay? 

577 A You understand the role of a broker? 

578 2 Ho. Go ahead. 

579 A Brokers is a function that goes out and brings 

580 the customers, collects the funds, arranges and pays for the 

58 1 service . 

582 2 ^nd Secord was the broker? 

583 A Right. 

584 2 In that situation? 

585 A Right, and so I would expect that he had gathered 

586 his payment from the government for the first part. From 

587 whoever else on the second part. 

588 2 Let me stop you there. Mho--was it your 

589 impression the others 

590 A Pzivate investigators. 

59 1 2 Private investigators. Did he represent that to 

592 you--General Secord? 

593 A Yes. 

594 2 And did he give you the name of the organization 

595 that these private investigators were in 



ONCLASSlFiEE 



631 



NAME 
596 
597 
598 
599 
600 

60 1 
602 
603 
60M 
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606 
607 
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609 
610 

61 1 
6 12 
613 
61U 
615 
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617 
618 
619 
620 



HIR072000 
A 
2 
A 



Ko . 

A coraraon interest in? 

No . 

Okay , go ahead . 



PAGE 25 



A And then I would get paid from the broker. It is 
3ust as normal as can be. We often try and put tuo packages 
together to give both parties the benefit of not having to 
pay for an return airplane. 

2 And on your books--if you know, ftr . Langton--did 
you record those payments that you received separately, on 
your books? 

A I don't know. 

2 On the other hand, payments for two separate 
transactions ? 

A I don't know. 

2 You don't know. Is that something you can 
determine ? 

HR. BECKHAN: We went into this in great detail 
with Mr. Mason. Every scrap of paper. 

MS. MAUGHTOH: We are not disputing that. 
THE WITNESS: I don't know why I would separate It, 
but if ha did--you know. Bob has his own reasons for keeping 
tha books . 

BY HR. LEON: 

2 Did you direct him to do that? 



UNCLASSIFIED 



632 



621 
622 
623 
62>4 
625 
626 
627 
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629 
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631 
632 
633 
63tt 
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6140 

6<41 

6U2 
6M3 
6Ui) 
645 



HIR072000 



No . 



PAGE 



26 



2 You relied on his judgment in that regard? 

A Yes, I did. 

BY MS. NAUGHTON: 

Did SAT ever participate in the shipnent of Israeli rocket 
propellers to Tel Aviv in the fall of 1986? 

A Israeli what? 

2 Rocket propellers. 

A I don't even know what they are. 

2 Did you do any shipments to Tel Aviv in the fall 
of 1986 that you can recall? 

A Hot that I am auare of. 

2 Do you know whether Evergreen did? 

A I have no idea. What is a rocket propeller? 

2 Does SAT have a C-130? 

A No , we do not . 

2 Uhy don't you explain to us what a C-130 is? 

A It IS a military version of the L-100, which we 
operate . 

S Would it be safe to say that there are many 
carriers that have C-130s or is that an unusual aircraft to 
havA in your inventory? 

A Ho conaercial carriers operate C-130s. It is a 
military airplane, with the exception of TAB. 

2 What is TAB? 



ilCLASSiREll 



633 



yNCLASSIFIED 



PAGE 27 



HKnZ' HIK072000 

b^b . X It Is Bolivian Air foro«. It is a transport of 

6<47 Bolivia. Sosa oountrlas hava a dlifloulty daolding who Is 

6U8 coMsaroial and who Is nilitary, and that is on« of tham. I 

SUg hava coitplainad about it sevaral tinas to tha DOT and no 

650 action has baan taken. 

65 1 2 Why did you complain? 

652 A Bacausa it is a iiilitazy airplana painted in 

653 conaerclal colors. 
65'4 S I sea. 

655 A There are thousands of thea out there. You let 

656 one start it and pretty soon I don't have a aarketplace. 

657 2 Are they tha only ones that do that to youz 

658 knowledge? 

659 A The only ones I have ever seen, yes. 

660 e To your knowledge, does the CIA ever take a 

66 1 military plane, take off and put on coanercial narke^s? 

662 A I don't know. 

663 2 Old you aver, did SAT to your knowledge ever, 
66M let's say since 1985, sii^ you have been with the coapany, 

665 fly any radar tubes either^^^^^^^^V or to Israel? 

666 A Not to ay knowledge. 

667 fi Old you ever do any ilights for Stanford 

668 Technology? 

669 A No, we did not. 

670 2 After the plane went down--was it in Nicaragua 



UNC!-SS';i?![: 



n 



634 



NAHE : 
671 
672 
673 
674 
675 
676 
bll 
678 
679 
680 
681 
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6814 
685 
686 
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689 
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693 
694 
695 



HIR072000 



ONCLASSIFIED 



PAGE 28 



that it actually was shot down, the C-130? 

A Yes, I believe it was. 

2 After it went doun in Kicaragua, could you tell 
me hou it is you heard about that? 

A Well, first I got a call from Bob Dutton, who 
said the airplane was missing. This was the first I heard 
of It. 

2 What did he say about it' What was he going to 
do about it? 

A They were looking for it. It was Dust 
information that he was passing on to us. 

Q What IS the next piece of information you hear? 

A Press out in the front yard. The plane was down. 
I saw it on the news . 

2 Did you call anybody to confirm this? 

A No . 

2 You :ust accepted the press accounts? 

A Yes . 

2 Did you talk to Dutton after that initial phone 
call about tha plane? 

A I an sure I did . 

2 And what was the gist of that conversation? 

A I think I asked him who was the crew, if they new 
who the crew was, and he told me who he thought it was. 

2 Who did he think it was? 



yNCLASSIFIED 



635 



UNCLASSIFIED 



NAME : 
696 
697 
698 

699 
700 
701 
702 
703 
704 
70S 
706 
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708 
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7 10 
7 1 1 
712 
713 

7 m 

7 15 
7 16 
7 17 
718 
7 19 
720 



HIR072000 



PAGE 29 



A He thought it was Bill Cooper and he wasn't sure 
about the co-pilot. 

2 What else did you discuss? 

A That uas all. I had bigger problems at the time. 
Ue just lost our own airplane at Kelly, and that was taking 
all of our time, and so I really didn't spend a lot of time 
discussing that loss. 

2 Hou did that happen at Kelly? 
A At where ? 
At Kelly? 

It was pilot error. 
And it was your crew? 
Our crew. 

Uas It on one of the Log An flights? 
Yes . it was . 
Would you recall what you were hauling at that 



2 
A 

2 
A 

2 
A 

Q 
paint . 

A Just general cargo. 

2 Did you talk to Mr. Gadd about the C-123 going 
down in Nicaragua? 

A I an sure I did . 

2 What was the gist of those conversations? 

A Did ha know who the crew was and does he know 
what happened. I mean, I uas curious. 

2 What did he say? 



UNCIASSIFIEO 



636 



NAHE : 

721 
722 
723 
72M 
725 
726 
727 
728 
729 
730 
731 
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733 
734 
735 
736 
737 
738 
739 
740 
741 
742 
743 
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745 



UNCLASSIFIEI 



HIR072000 MIUI.I- U A MTir H page 30 

A I think by the time I got to hira they did confirm 
that. Buzz Sawyer was also on the aircraft, and they didn't 
know whether it was shot down or just crashed. They weren't 
sure . 

A When you discovered, I assume from the press, 
that they had connected SAT with that plane, first of all, 
did you wonder how they had done that? 

A Host certainly. 

2 And what did you do to discover how? 

A The press very clearly asked us whether it was 
our airplane, and we said no, it is not. 

fi Didn't you wonder how they got your name? 

A Hell, the airplane had been parked on a ramp for 
months. It didn't seem odd that they would ask us. 

2 Did you discuss with either Mr. Dutton or Mr. 
Secord whether or not any documents, any SAT documents, were 
aboard the plane? 

A No. 

2 After the plane went down, which I believe was 
the first week in October, did you have any meetings with 
nt . Dutton or Hr . Secord? 

A Ho, I did not. 

2 Old you have a meeting with Mr. Secord after 
these flights became public knowledge? 

A Yes . 



liNClftSSlFIED 



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Mussro 



NAME : 
746 
7U7 
748 
7^9 
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HIR072000 



PAGE 31 



2 Let me ask the previous question again. Did you 
hava any meetings with Mr. Dutton or Mr. Secord after the 
first week in October of '86? 

A Xes. 

2 Hou many? 

A One . 

2 With whom? 

A With Mr. Secord and Mr. Dutton. 

2 Anybody else? 

A And Mr. Bastian. 

2 Where did this meeting take place? 

A At the Viscount Hotel m Miami. 

2 What happened at this meeting? 

A Well, Mr. Bastian and I asked him to come doun. 
We had :ust spent nearly three weeks of reporters camping at 
our doorstep, climbing over our fences, of just simply being 
around, and we were very tried of it, and then on top of 
that, we had received a subpoena from the U.S. Customs for 
records, et cetera, and we thought it was time to sit down 
and talk, and so they were kind enough to fly down and 
raassura us . 

S What did you say to then? 

A G«t the heat off, and they said there is nothing 
they can do about the press. We knew that, and everyday was 
a new revelation anyhow. What I was finding out is we were 



imssm 



638 



UNCUSSIFlEi 



MAME: HIR072000 IlHU^niJIJII I ft. L/ PAGE 32 

771 a very good host, even better than I thought ue were. 

772 2 What do you mean? 

773 A As they were going through, ue became the 

774 stopping point for most of the crews, and ue were very good 

775 to thera. He helped them get tickets. We didn't need to do 

776 that. We could have turned it over to a travel agent, and 

777 ue were good hosts, but ue uould do that for any customer. 

778 2 You learned that through the press? 

779 A Yes. 

780 2 So you discussed getting the press off our back 

781 and they told--Secord and Dutton told you there is nothing 

782 they could do about that? 

783 A Right. 

784 2 What else did you ask him to do? 

785 A The other thing that was clear, when ue looked at 

786 the subpoena and they uere asking for banking records and--a 

787 very broad subpoena--you know, basically it uould be easier 

788 just to coma in and thumb through all of our files. 

789 One thing was clear to us is if ue turned over those 

790 records, than it uould immediately disclose the Iranian 

791 ofaration, and ue wanted to make them aware of that. At 

792 tikis point it was still a totally sensitive operation. 

793 BY HR. LEON: 

794 2 At this point, you hadn't said anything to the 

795 press about who Dutton or Secord uere or Gadd or anything 



"HWSW 



i 



639 



NAME 
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797 
798 
799 
800 

80 1 
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81 1 
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81 3 
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815 
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819 
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HIR072000 



like that' 



KimiB 



PAGE 33 



A Nothing , no . 

2 Had they m the past, either Button or Secord or 
Gadd, given you any directions with regard to how to keep 
records as to their business dealings uith you? 

A None at all . 

BY MS. NAUGHTON: 

2 When you told there that disclosure of these 
records uould reveal the Iranian operation, uhat was Nr . 
Secord's response? 

A Well, he was distressed, because the project was 
not complete yet. and he felt that they were very close to 
some raa^or successes on it. and he said he uould go back and 
discuss It in Washington and see if there was a way ue could 
focus the investigation, what was the Customs ' --what did they 
want and focus on that. We were hoping they could do that. 
BY MR. LEON: 

B Had he given you the impression that by major 
successes the delivery of arms was linked to the release of 
the hostages in Lebanon? 

A At that point, yes. 

2 At that meeting, at the Viscount? 

A Yes. 

2 Has that the first time? 

A The first time I discussed it with him, yes. 



UNCUSSlFltD 



640 



UNCUSSIFIEO 



NAHE ■ 
821 
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823 
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HIR072000 



PAGE 34 



2 That wasn't going to be ray question. It was 
close. Has that the first time he had given you that 
impression, that there was something between delivering the 
arms to Iran and the releasing of hostages m Lebanon.? 



I had never discussed that with General Secord at 



all 



A 
A 
Q 
A 
2 
A 
2 



Hou about Dutton? 
Dutton I had . 
Hon early on? 

I uould say in the summer. 
Of '86? 
Of '86, yes. 

So after you had already made some 
deliver ies--because the first ones were in May, correct? 
A No, the first one was in February. 
2 February, excuse me. 
A Yes. 

2 How did that corae up? How was that Dutton 
brought that to your attention? 

A Uell, I guess it was just in a general 
conversation. In the very first place, it was an unusual 
r»quest--to fly into Iran, okay--to say the least. 
2 I would say so . 

A The motive seemed right to me. If the government 
wanted to establish relations and there were modernists, we 



UKWSSW 



641 



NAME : 
8U6 
8U7 
848 
8U9 
850 
851 
852 
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85U 
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86 1 
862 
863 
86U 
865 
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HIR072000 



uNCUssm 



PAGE 35 



should do what ue could to assist. It seemed only natural 
if we gave there something they wanted, that we in turn, for 
a show of good faith, they should give us something we 
wanted, and it did seera clear that the Iranian Government 
had some influence in Lebanon, and the only thing--it wasn't 
Padre we wanted, and we had enough rugs from the Shah's 
regime--so the only thing that would make sense that we would 
like to get out and have some influence, would be the 
hostages . 

e So this meeting at the Viscount was the first 
time you had discussed that with Secord? 

A Yes. 

BY US. NAUGHTON: 

Uhat did Mr. Secord tell you about the Customs 
investigation? 

A Just simply that we go back to Washington and 
see, meet with whomever, and try and see if it couldn't be 
focused. He was very clear that there should be no cover- 
up, and it would have appeared to be a cover-up, you know, 
to have a subpoena withdrawn or exert some influence, but he 
fait that there was a bona fide investigation, and that he 
would, at least at this point, try and see if it couldn't be 
narrowed down a little bit. 

2 Did you hear from hire after that? 



Ho . 



HEiKssro 



642 



NAHE : 
87 1 
872 
873 
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875 
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890 
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HIR072000 



UNCUSSIFIED 



PAGE 36 



Q Have Vou spoken to hira since that meeting? 

A No, I haven't. 

2 Has anyone at SAT, to your knowledge? 

A No one has . 

2 What about Mr. Dutton? Have you spoken to Mr. 
Dutton since that meeting? 

A Yes , I have . 

2 Hou many times? 

A I don ' t know . 

2 Five or 500? 

A Maybe five . 

2 And what did you discuss? 

A Of course the first, when the Prime Minister of 
j_ran came on TV, in that portion--Let me go back a step. One 
thing that Secord did want to know is would ue , could we fly 
the final trip? 

The answer is yes. Okay, we flew at the end of October. 
Everything came apart in the newspaper, and I did discuss it 
with Dutton, what was going on, basically what is going on, 
and he didn't know. Basically that was the conversation. 

2 He didn't know what? 

A He didn't know what the hell was going on with 
the press leaks. In ray mind, this should have been and had 
been top national security, and here the press is disclosing 
an international negotiation, and it was obviously just 



yNClASSlrlED 



643 



NAME 
896 
897 
898 
899 
900 
90 1 
902 
903 
904 
905 
906 
907 
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9 1 1 
9 12 
9 1 3 
9 1 4 
9 IS 
9 16 
9 17 
918 
9 19 
920 



HIR072000 



eNCUSSIFIt!) 



PAGE 37 



coming apart at the searas 



2 Uhat did Dutton tell you to do? 

A Nothing . 

2 Told you to do nothing? 

A Right. I didn't asK hira uhat to do. I just 
wanted to know li he knew uhat uas going on. 

2 Did you tell hira to do anything? 

A No . 

2 When did you talk to Dutton again? 

A I don't know. Within days or ueeks . 

2 And what uas the substance oi those 
conversations ? 

A Really, I guess more of the sane. He still had 
never gotten any relief from the press. They uere still 
writing the most outlandish articles in the uorld, and I 
guess all conversations thereafter uas more of consult--not 
consultation, but condolences to one another for the kind of 
pressures that uere being built in both of our companies. 

2 Uho did you understand Dutton to have worked for? 

A General Secord. 

2 What company? Stanford? 

A Stanford Technology. 

2 When is the last time you spoke to Mr. Dutton? 

A I think about two or three ueeks ago. 

2 What did you discuss then? 



yEMFiM 



644 



NAHE: HIR072000 



«msw 



PAGE 38 



92 1 
922 
923 
924 
925 
926 
927 
928 
929 
930 
931 
932 
933 
934 
935 
936 
937 
938 



That he has a new product that he is selling. It 



IS not wax but it is a coating put on aircraft to smooth out 
the air flow, and he wanted to know if we would like to do 
one of the aircraft and see if we could gather some 
statistics on improved fuel burn. 

2 Is he still With Stanford Technology? 

A Yes. 

2 And what was you response to that? 

A I would like to try it. It would interesting to 
see if we could save some money in fuel. 

2 And did you discuss this investigation? 

A No . 

2 Why not? 

A Well, what is to discuss now? 

2 Did you ask hire if he had been interviewed? 

A I don't think. 

2 Did he ask if you had been? 

A I don't think so. 



ONCliSSinEB 



645 



NAME 

939 
9140 
914 1 
9U2 
943 
9414 
945 
9146 
9U7 
948 
9149 
950 
951 
952 
953 
95U 
955 
956 
957 
958 
959 
960 
96 1 
962 
963 



HIR072000 



RPTS THOHAS 



*^«to 



PAGE 39 



DCMN LYNCH 
10 ; 30 A . n. 

BY HS . NAUGHTON: 

2 Okay, ue are back on the record. 

Ue were discussing this meeting at the Viscount Hotel uith 
General Secord, Mr. Button. Could you tell us, aside from 
the issue of the press and the issue of the subpoena from 
the Customs Service, what else was discussed? 

A As I said, they asked us if we uould not get cold 
feet and perform one more flight into Iran with, not a 
flight but provide crews for one more flight. 

S Uhat was to be transported for that last 
shipment? 

A I am not sura . 

2 Did they say that they expected to release over 
all the hostages after that mission? 

A I an not exactly sure. There was an indication 
in the conversation that they were very hopeful of the 
release of the hostages. 

Q Has there indeed another flight--! believe on 
Kovenber 7th--frora Kelly to Tel Aviv, to replace some of the 
missiles that had been sold? Did SAT participate in that? 

A No, we did not. 

2 So, October 28th was your last flight? 



il;i 




646 



NAME : 
964 
965 
966 
967 
968 
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97 1 
972 
973 
97U 
975 
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977 
978 
979 
980 
981 
982 
983 
984 
985 
986 
987 
988 



HIR072000 
A 
2 
A 






m\m 



PAGE 40 



That I's correct. 

The Customs subpoena, was it withdrawn? 

No. it Dust kind of went dormant when I finally 



talked to the agent, and I think he said he had the flu for 
a week and a half and he called rae to see if I gathered all 
the documents, and I said we were in the process of doing 
that, and then I di.dn't hear from him for another week, and 
so it just kind of drug its own feet. 

2 Do you remember his name? 

A Lasata . 

2 Rich? 

A Yes . 

2 And that was an administrative subpoena, is that 
correct ? 

A That is correct. 

2 Mhat happened to it, then? Did you produce all 
of those records? 

A I don't remember. 

Bob? 

HR. BECKMAN; If I may try to give you my best 
racollection . Ue were told to hold the response to the 
ad«inistrativa subpoena because he got a grand jury 
subpoena. We were told then they withdrew the grand jury 
subpoena at the last minute and we had all the documents 



ready for Customs 



? i 



mmm 



647 



NAME 

989 

990 

99 1 

992 

993 

99U 

995 

996 

997 

998 

999 

1000 

100 1 

1002 

1003 

lOOU 

1005 

1006 

1007 

1008 

1 009 

10 10 

10 11 

10 12 

10 13 



HIR072000 



UNCLASSIFIED 



PAGE U 1 



THE WITNESS: I think we did deliver them. 



MR. BECKHAN: I can recall getting a receipt in 
your office . 

THE WITNESS: He came and picked some up. I don't 
knou if it uas all of it. 

BY MS NAUGHTON: 
S Do you recall uas this after the grand :ury 
subpoena had been served? 

MR. BECKHAN: And withdrawn. 
. MS. NAUGHTON And withdrawn' 
. : nR. BECKMAN: Yes. 

BY nS . NAUGHTON: 
2 So, as I recall, you were scheduled to produce it 
before the grand jury or about December 18th? 

MR. BECKMAN: Mo . I think it was about the 9th. 
Let me look at the calendar. I think I have a note. 

THE WITNESS: i think he is right. It couldn't 
have been the 18th. 

MR. BECKMAN: No, I caraa down on Monday night the 
8th 

THE WITNESS: Yes sir. 

MR. BECKMAN: It was originally for the morning of 
th« 9th. 

MS. NAUGHTON: Well, at any rate, you have provided 
for the record the grand :ury subpoenas now and I have 



UNCUSSIFIEl' 



648 



naue 

10 14 
1015 
10 16 
10 17 
10 18 
10 19 
1020 

102 1 
1022 
1023 
1024 
1025 
1026 
1027 
1028 
1029 
1030 

103 1 
1032 
1033 
1034 
1035 
1036 
1037 
1038 



HIR072000 



reviewed thera . 



*%/•© 



PAGE 42 



BY nS . NAUGHTON: 
2 Hou, as I understand it. your appearance before 
the grand jury, your custodian appearance before the grand 
jury was canceled, is that correct? 
A Yes . 

2 Was it ever rescheduled? 
A No . 

2 Have you been interviewed by the FBI? 
A I have been interviewed by FBI agents on 
assignment to the Independent Counsel. 

2 Okay, let's break that down now. Prior to 
December of '86, were you interviewed m Miami by any 
agents ? 

MR. BECKHAN: Of the FBI counsel? 
MS. NAUGHTON: Yes. 
THE WITNESS: I was not, no. 
BY MS. NAUGHTON: 
2 Was anyone at Southern Air, to your knowledge? 
A I believe Charles Carson met with two FBI agents 
in Hovember, I think. I don't recall. We never heard any 
mora from them. 

HR. BECKMAN: I think that they were referred to 
talk to me . 

THE WITNESS: FBI? 



UNCLASSIFIED 



649 



i]HWS»B 



NAHE HIR072000 '-* ■• ■• — — PAGE M3 

1039 MR. BECKMAN- I think it was the same people. 

lOUO THE WITNESS: Hemz is with the Independent 

1 OLi 1 Counsel . 

1042 MR BECKMAN: When we finally actually looked them 

10U3 in the face, he told us that he was with Independent 

lO^Li Counsel, but I believe that he was referred to rae and I said 

10M5 you will have to get in line, I am busy right nou . Are you 

1046 urgent? He said no, I am not urgent, I can wait. Then he 

10U7 finally said okay, now it is ray turn. 

1048 BY MS. NAUGHTOH: 

1049 2 Who IS Charles Carson? 

1050 A Our Senior Vice President of Marketing and 

1051 Administration. 

1052 2 Why did they want to talk to hira? 

1053 A I think he was the only one in the office that 

1054 day. 

1055 2 So, correct me if I am wrong, the next contact 

1056 you had with a FBI agent was after the Independent Counsel 

1057 was appointed, is that correct? 

1058 A That is correct. 

1059 . MR. BECKMAH: Subject to what I have said, that I 

1060 b«li«ve that on our behalf they had talked to rae They were 

1061 ref«iring these calls all up to raa . 

1062 BY MS. NAUGHTOH: 

1063 2 And Mr. Langton, when did you finally speak to an 



yflCUSSIFIED 



650 



NAME : 
106U 
1065 
1066 
1067 
1068 
1069 
1070 
1 07 1 
1072 
1073 
1074 
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1076 
1077 
1078 
1079 
1080 
1081 
1082 
1083 
108>4 
1085 
1086 
1087 
1088 



yiussife 



HIR072000 |i 
FBI agent regarding this matter? 



PAGE UU 



THE WITNESS: Bob. do you have that' It was the 
first oi January. I don't know if it was the 5th or 6th. 
Whatever date that came m. 

MR. BECKMAN: I came on down the 13th, ray calender 
shows I was down there on the 14th, ISth, and 16th. 

THE WITNESS: That is right, middle of January, 
that is right. 

BY MS. NAUGHTON: 
2 Is that the only time you spoke to the FBI? 
A Yes . 

S Hou long did that interview last? 
A My interview with them was three hours , maybe . 
Was it longer than that? 

MR. BECKMAN: A day and the next morning. 
THE WITNESS: It wasn't a whole day. Yes it was. 
It was all day and part of the next morning. That is right. 
BY MS. NAUGHTON: 
2 And what questions did they ask you that we 
haven't asked you so far? 

MR. BECKMAN: I provided a memo of that. 
MS. NAUGHTON: I would like his answer. 
THE WITNESS: I don't know. 
BY MS. NAUGHTON: 
2 Is there any area that they went into that we 



wu»e 



651 



NAME 
1089 
1090 

109 1 
1092 
1093 
109M 
1095 
1096 
1097 
1098 
1099 
1 100 

110 1 
1102 
1103 
1 104 
1 105 
1 106 
1 107 
1 108 
1 109 
1110 
1111 
1112 
1113 



HIR072000 



mmM 



PAGE 45 



haven't gone into so far in this deposition? 

A I don't believe so. 

2 Did you give any answers to thera that are 
different than your answers that you have given to us? 

A I sure hope not . 

2 To your knowledge are there any 

A Not to ray knowledge , no . 

2 Did you want to ask your questions before you 
left' 

MR. LEON: I will ask a few now. 
.^ US. NAUGHTON: I have more. 
BY MR. LEON: 

2 Uhen you first raet nr . Gadd . the first time you 
were introduced to him, ray recollection is it was nr . 
Bastian that introduced you? 

A Yes sir . 

2 From that tirae forward, did fir. Gadd give you any 
specific instruction or directions with regard to secrecy or 
confidentiality of what you were doing? 

A Hall, Mr. Gadd continuously impressed us with the 
sansitivity of his work. 

2 Mould that apply equally to Iran related work' 

A Iran related, we even went so far as to ask all 
the crew members to sign a secrecy oath. 

2 All right. Mho provided that form? 



!INCIJ1,SSIFIED 



652 



MAHE : 
1114 
1115 
1116 
1117 
1118 
1119 
1 120 
112 1 
1 122 
1123 
1 124 
1 125 
1 126 
1 127 
1 128 
1 129 
1 130 
1131 
1 132 
1 1 33 
1 1 34 
1 135 
1 136 
1 137 
1 138 



HIR072000 
A 
2 
A 



WlkSSW 






PAGE 46 



The form came from Mr. Gadd. 
Was it a standard type of form? 
I don't know. It is the only one I have ever 
seen . 

2 Have you turned a copy of that over? 
MR. BECKMAN: Yes. 

THE WITNESS: I ara the only one that didn't sign 
It. 

BY MR. LEON: 
2 Really? 
A I think so. 
2 They didn't ask you to? 
A No. 

2 Hou about with respect to the work you had done 
for Mr. Gadd in Central America? 
A Never . 

e When Gadd came to Southern Air Transport, did he 
ever explain to you either on that occasion when you first 
met hm or afterwards, why he came to Southern Air 
Transport, SAT? 
A Mo. 

2 As opposed to some other air line? 
A No. 

2 Did ha very indicate why he felt he could trust 
and rely upon Southern Air Transport to do these sensitive 






653 



NAHE 

1 139 

1 mo 
1 m 1 

1 1142 

1 11*3 
1 1 44 

1 ms 

1 146 
1 1U7 
1 1 48 
1 1 49 
1 150 

115 1 
1 1 52 
1 153 
1 1 54 
1 155 
1 156 
1 157 
1 1 58 
1 159 
1160 

116 1 
1 162 
1163 



IIR072000 I n ^ , : n 

typethings. •••»."' 



PAGE 47 



A He never told me anything. We never discussed 
that other than the obvious. Ue are a very proiessional 
o r ganizat ion . 

e Did your organization do a lot of uork of this 
nature, those highly confidential that shouldn't become 
publicly known ? 

A No. 

2 What assurance did you think he felt that you 
wouldn't go public with what you were doing? 

A Our company in general keeps all whatever we do 
for our customers propr-ietary other than what we routinely 
report to the United States Government, Department of 
Transportation, we have never felt compelled or any desire 
to discuss with the public what we do for our customers. 
That is a company policy we have and 

2 nr . Bastian agrees with that? 

A He agrees totally with it. It is one that I 
insist upon and you need to understand air freight. In the 
first place, it is based on somebody's mistakes, so you 
normally don't like to talk about it. 

2 What do you mean? I don't think I understand 
that--somebody ' s mistake? 

A Most of your charters are always--if you really 
want to go back and dig into it, it is usually somebody 



UNCLASSIFIED 



654 



UNCLASSIFIED 



KXnZ' HIR072000 PAGE U8 

116U didn't ord«r in tin*, soaabody brok* 8on«thing, or if you 

1165 raally wantad to, you could dig back and find out sonebody 

1166 nakas a mistaka and theiaiora you got to nova it by air now. 

1167 That is why I say it is usually somabody's nistakas. Tiaa 

1168 is of tha assanca. In any casa, wa hava saldon ever 

1169 discussad what wa do in tha public forun. Ko nead to. 

1170 2 All right, but tha idea of transporting 

1171 explosives and othai supplies to tha contras, that must have 

1172 struck you, didn't it, as being something that would be very 

1173 newsworthy, if it should become known? 

11714 A Are you assuming that wa transported supplies to 

1 175 the contras? 

1176 S Well, correct me if I a* wrong, didn't you tall 

1177 us yesterday that you were assisting Hr . Gadd in moving 
1 178 supplies tol 

1179 A No, NHAO flights. Why would that be newsworthy? 

1180 MR. BECKHAM- It was in the news, wasn't it? 

1181 THE HITHESS: Yes, it was a normal part of tha «27 

1182 million donated by United States Government to nova 

1183 humanitarian goods to tha contras. Ha navat tried to keep 
1 18<4 it a secret. 

1185 fi You realized that was the kind of thing news 

1186 Bight ba interested in? 
1 187 A Yas sir. 

1188 2 How about the assistance that you were giving him 



UNCLASSIFIfO 



655 



HIR072000 



UNCLASSIFIED 



PAGE ijq 



NAME 

1189 with the special individuals that uete piivately raising 

1190 funds ? 

119 1 A Yes . 

1192 e That was the kind of thing that 

1193 A Ue uere concerned about it. 

1194 2 Was that something he wanted kept quiet, uas it 

1195 your impression? 

1196 A Without a doubt it is something that for obvious 

1197 reasons you would not want to go public with it. 

1198 2 When you agreed to do it. did you realize that if 

1199 it became public your company would become part of a focus 

1200 of media attention? 

1201 A Not to the degree that it turned out. I can 

1202 guarantee you that. No, there was no question that the 

1203 disclosure of the operation would be of media interest and 

1204 that would be too bad. The degree of which we have been 

1205 turned into the focal point of this was nothing any of us 

1206 ever dreamed of. 

1207 2 When, before you met with Mr. Bastian, and Mr. 

1208 Secord and Mr. Dutton, at the Viscount Hotel, had you and 

1209 Mr. Bastian considered the possibility of explaining to the 

1210 madia what your role was and what you had been doing? 

1211 A We did explain that. 

1212 2 Prior to meeting at the Viscount Hotel? 

1213 A That is right. 




656 




NAME: HIR072000 V '1 » !.'*" • * ^^^ *^ » ■ " » ■»■ PAGE SO 

1214 2 How did you do it. in a forra of interviews? 

1215 A Ue passed out press releases, we did not--we, I 

1216 guess he did several short interviews, but none of that 

1217 information was ever published 

1218 2 The information you gave the press? 

1219 A Right. 

1220 2 Why do you think that was? 

1221 A Because it wasn't a good story. They felt their 

1222 story was more, they sensationa.lized everything, okay, and 

1223 we laid the facts out to not only the press but to our 

122U employees and gave the press a copy of that letter, what our 

1225 total involvement was. 

1226 2 Even with respect to the stuff, the activity that 

1227 related to the secrets? 

1228 A No, no. 

1229 2 Had you been told that you couldn't discuss that 

1230 with the media? 

1231 A Ue signed a secrecy oath, most of the people m 

1232 the company, and I was not about to discuss that with the 

1233 media. It was of national security interest. 

1234 2 You were specifically told that you were not to 

1235 discuss it with the media? 

1236 . A I don't think anybody wasted their time to try to 

1237 tell me not to discuss it with the media. X was not about 

1238 to discuss it with the media. 







657 



UNCLASSIFIED 



NAHE^ HIR072000 UIIUI ^alilll II II PAGE 51 

1239 . 2 When you got those signed by your employees, uho 

1240 did you turn there over to? 

1241 . A I didn't turn them over to anybody, I :ust kept 
12142 there. 

1243 . 2 Dutton had given you the forres? 

12'44 . A No, Gadd had given me the forms. 

1245 . 2 Has Gadd ever asked ior those forms back? 

1246 . A No. 

1247 2 You still have there? 

1248 ' . A Yes. You have a copy of there 

1249 Don't they. Bob? 

1250 HR. BECKMAN- Yes. 

1251 . BY riR. LEON: 

1252 2 With regard to Secord, had he ever reerephasized 

1253 that at any time when you reet with hire? 

1254 A No. 

1255 2 Did you hire Mr. Gilchrist? 

1256 . A Yes. 

1257 2 Was htt already there before you got there? 

1258 . A No, ua hired hire. 

1259 2 Can you tell us a little about his background? 

1260 How old is he, for starters, roughly? 

1261 , A I would say he is in the raid-thirties. 

1262 2 Heisapilot? 

1263 A He is a pilot. I think we have a profile on him 



Kwssife 



658 



ONCLASSIflH 



NAME : 
1264 
1265 
1266 
1267 
1268 
1269 
1270 
127 1 
1272 
1273 
1274 
1275 
1276 
1277 
1278 
1279 
1280 
1281 
1282 
1283 
1284 
1285 
1286 
1287 
1288 



HIR072000 



PAGE 52 



in there but the best I can tell you he is married, has 
three children, he was a corporate pilot until I believe 
1977 or '78, which he was hired on at Air Florida and rose 
rapidly to be their chief pilot before they folded. 

He went to Airborne Express, and in less than a year, we 
had hira ^oin us . 

£ Was he a former military pilot? 

A No. 

2 Had he ever served in the military? 

A Not that I am aware of. I don't believe so. 

2 Do you Know where he got his pilot training then, 
his flight training? 

A Out at the local airport. 

2 When you first hired hira, what was his position 
with you? 

A He was Director of Operations but our Vice 
President of Operations, he was the replacement. He was 
ready to retire and within six months I suppose we promoted 
him to Vice President of Flight Operations. 

2 Who would ha answer to? 

A Dave Mulligan. 

2 In the chain of command? 

A Yes. 

2 In your meetings with Secord, General Secord, did 
the discussion of your record Keeping ever come up? 



UNCLASSIFIED 



659 



MAKE 
1289 
1290 
1 29 t 
1292 
1293 
129U 
1295 
1 296 
1297 
1298 
1299 
1300 
1 30 1 
1302 
1 303 
1 304 
1 305 
1 306 
1 307 
1308 
1 309 
1310 
1311 
13 12 
1313 



HIR072000 



Ko 

How about uith Mr Dutton? 

No . 

Or nx. . Gadd? 

No. 



PAGE S3 



Let rae qualify that. What do you mean by record keeping' 
2 Just the records to the extent that you have any 
records of your uork for thera? 
A No. 

nR. LEON: That is all. 
BY MS. NAUGHTOH: 
2 When is the last tirae you spoke to Mr. Gadd? 
A I think the last time I spoke to him was at 
dinner in December. No, I talked to him since then. Middle 



-f^< * 



* c - 
of January I believe. I t ill — tit** that back February. 

Probably middle of February is the last time I spoke to him. 

2 What did you discuss? 

A I don't recall totally but the basics of the 
discussion DUst was again nou it was his turn in the barrel, 
he was getting a tremendous amount of media interest, and he 
was having some insurance problems as a result of some of 
th« paper reports, and I consoled him. 

2 What did you tell him? 

A I told him I had been at it five months and I 
feel real bad for you. Hopefully it will all go away when 



MLmim 



660 



I 



NAME : 
13 lU 
131S 
1316 
1317 
13 18 
13 19 
1320 
132 1 
1 322 
1323 
132tt 
1325 
1326 
1327 
1328 
1329 
1330 
1331 
1332 
1 333 
1334 
1335 
1336 
1337 
1338 




HIR072000 '•^'^ww IKbI/ PAGE SU 

all the investigations are over. 

2 What kind of insurance problems did he 

A He had some again Department of Defense contracts 
and they called for bonds and his insurance company uas 
raising rates and doing all the normal things that irritate 
one . 

2 For whom was he working now? 

A The same East, as far as I know. 

2 Did he mention that the FBI had interviewed hira? 

A No. 

2 Did he mention if anyone from the Congress had 
interviewed hira? 

A What he told me that he had received some six or 
nine subpoenas in the matter of two days covering various 
companies and as of yet, I don't believe anybody has 
interviewed him. He has, on advice of counsel, I believe he 
IS pleading the Fifth and he is not talking, but he 
apparently has provided company comments of which you 
already receives some. 

2 Okay. Did he express any concern regarding any 
criminal liability? 

A Hone at all. 

S Did he explain why ha wasn't cooperating? 

A On advice of counsel. 

2 So it was his response was in the area of I 



iimsifB 



661 



NAnE 
1339 
1340 
13t1 
13U2 
1 343 

1 3^^ 
UUS 
1 346 
1 347 
1 348 
1349 
1350 
1351 
1352 
1 353 
1 354 
1355 
1356 
1357 
1358 
1359 
1 360 
136 1 
1362 
1363 



HIR072000 



^msim 



PAGE 55 



didn't do anything wrong but ray lawyers told rae not to talk. 

A I guess. I wasn't there. 

2 Did he mention whether or not he had received any 
threats or promises from anyone regarding any cooperation? 

A No . 

2 Did he seem to have been threatened or been 
frightened of anything or anyone? 

A No, only he is concerned about his business. 

2 Had his business been threatened by anyone? 

A No . 

2 I have the same question about fir. Dutton. In 
your conversations with hm did he express that anybody had 
threatened hire or 

A Not at all. 

2 Did he seem frightened or m any way hesitant to 
cooperate with investigators? 

A I think if I recall, both Dutton, as well on 
advice of counsel, was not discussing anything with any 
investigator until they narrowed down what they wanted to 
discuss. I guess, I don't know, that was the advice of 
counsal. 

2 But ha did not appear to be nervous or scared of 
anyona? , ■ 

A No. 
2 Did you tell us that after that meeting at the 



UNCLASSIFIED 



662 



wussm 



NAHE: HIR072000 ~' *^fc'lt/UI| || || PAGE 56 

1364 Viscount Hotel you had not spoken to Mr. Secord since then? 

1365 A That is correct?. 

1366 2 Have you been contacted by anyone on behali oi 

1367 Mr. Secord? 

1368 A Just the last time I talked to Mr. Dutton. 

1369 . e Okay. 

1370 A About the new product. 

1371 2 But with the exception of Dutton and Gadd, has 

1372 anyone from a Secord related company called you? 

1373 . A No. 

13711 2 Now, did you and Mr. Bastian meet with Mr. Gadd 

1375 in December of '86? 

1376 . A Yes. 

1377 2 Was that toward the end of the month? 

1378 A I think it was the 30th, if I recall, it was 

1379 right at the end of the month, yes. 

1380 2 Why was that? 

138 1 A Because Mr. Gadd decided to take a couple of days 

1382 with his wife and get out of Washington and he came down and 

1383 we invited him out for dinner. 

1384 2 Did you discuss the investigation at the dinner? 

1385 . A yes. 

1386 . fi What was said? 

1387 A Very simply his counsel was advising him to go 

1388 the route of the Fifth Amendment, and we said wa were not 



"Ncussm 



663 



NAME 
1389 
1 390 
1 39 1 
1 392 
1 393 
1 394 
1 395 
1 396 
1 397 
1398 
1 399 
1U00 
1 40 1 
1L|02 

mo3 

1 404 
1405 
1406 
1407 
1408 
1409 
14 10 
14 11 
14 12 
14 13 



HIR0720C0 



WUSSffl 



PAGE 57 



going to do that, ue at Southern Air Transport were going to 
be 100 percent totally cooperative with any bona fide 
investigative group. That was our position and that was his 
position. 

2 What did he tell you about your position, was he 
happy with that or upset? 

A Neither. If I recall one comment, I don't 
remember the exact words, but the gist was he wondered why 
his counsel was not giving hira the same advice. 

2 Why? Because he thought he had done nothing 
wrong ? 

A Yes. 

BY MR. LEOM: 

2 Did it turn out by any chance that you and Gadd 
or Button, or Secord, had any acquaintance or friends in 
common from Vietnam, your experience in Vietnam? 

A Mine? 

2 Yes. 

A I was only a liCtle boy. I had no acquaintances 
in Vietnam that they would know. But I do believe that 
Secord and Dutton and possibly Gadd, knew each other in 
Vietnam. That is only from some press article I read 
recently. 

2 Served together? 

A Crossed paths. They were all in the Air Force. 



KNCUXSm 



664 



NAHE ■■ 
14 14 
14 15 
14 16 
14 17 
1418 
14 19 
1420 
142 1 
1422 
1423 
1424 
1425 
1426 
1427 
1428 
1429 
1430 
1431 
1432 
1433 
1434 
1435 
1436 
1437 
1438 



HIR072000 



*u«/fe 



PAGE 58 



BY MS. NAUGHTON: 



2 As a point of information, the invoice I asked 
about regarding the washer and dryer to Switzerland, I will 
give you the information. I don't have the document with rae 
because a colleague of mine has it. But apparently the 
document or the transaction occurred, the flight occurred on 
February 26, 1986. I have as invoice number 087019. Now, I 
have that listed as SAT invoice but I believe it is an East 
invoice . 

MR. BECKMAH: It is not our number. I don't think 
we have produced 8,000. Is that an invoice number or the 
document number? 

MS. MAUGHTOM: Mo, invoice number. 

MR. BECKHAH: Ho. 

MS. NAUGHTON: It did not come from your documents? 

MR. BECKHAN: I see. 

THE WITNESS: Did not? 

MR. BECKHAM: It is an East do 

ns . NAU6HT0M: Yes. However, they received an 
invoice from SAT< that is my point. 

THE WITNESS: For it? 

ns. MAUGHTOM: That uould be invoice 80709. It was 
apparsntly paid on in October of '86. The amount is 
$1,269.54, with their check number 1035. 

THE WITNESS: Southern Air's check number? 



wm,m 



665 



UNClASSIFltD 



KAME' HIR072000 TkGZ 59 

1H39 HS. KiUGHTONi Eait paying Southarn Air Transport. 

1I4C40 THE WITKESS: Okay. 

mm HS . HAUGHTON: for dalivaring this washar and 

II4I42 dryer. 

lUMS . HR. BECKHAH: This is a flight that occurrad on 

1(«M(4 Fabiuary 26, 19867 

lUUS . MS. NAUGHTOM: I balieva so. 

1>4(46 . HR. BECKMAN: It was paid ior in Octobat of '86? 

1I4M7 HS. NAUGHTON: I beliava so. 

14148 HR. BECKMAK: Aia thay that slow in paying? 

1t4>49 THE UITKESS: Tha whola thing bafflas na so. 

1U50 . HR. BECKHAH' What would you lika us to do? 

1U51 HS. HAUGHTOH: What I would lika to do is for tha 

1U52 record--this is an inpoztant araa for us 

msa HR. BECKHAK: Can you tall us why? 

lUSH THE WITNESS: It is iaportant? 

1U55 . ns. NAUGHTON: yas . For tha racozd wa would lika 

1456 to request any information you can giva us about that 

1457 flight. Who azzangad it, why it was dona, perhaps what 
1U58 other cargo was aboard. I doubt that Southern Air Transport 

1459 transported a washer and dryer by itself. 

1460 HR. BECKHAN: Can you give us the points of tha 

1461 flight? 

1462 HS. NAUGHTON: All I know is that there was a 

1463 charter ^^^^^^^Hwith ultimate destination in Switzerland. 



Kmsim 



666 



UNCLASSIFIED 



KANE ' 
1I46U 
1465 
1(466 
1H67 
1>468 
1469 
11470 
1U7 1 
1472 
1473 
1474 
1475 
1476 
1477 
1478 
1479 
1480 
1481 
1482 
1483 
1484 
1485 
1486 
1487 
1488 



not 60 




HIK072000 
I do not know If SAT ilau th« lag ^^^^^^^^| to 
Switzerland . That would ba ona oi tha things I would want 
to know. 

MR. BECKMAH: Excusa na , If SAT Is billing for 
transportation ^^^^^^^^^1 to Switzerland, wouldn't it imply 
that Southern Air Transport flaw batwaan Lisbon and 
Switzerland? 

HS. HAUGHTON: I an not sura. Southern Air aay 
only have flown fron the United States ^^^^^^^^| 

THE WITNESS: What is the total dollar? 

HR. BECKKAK: One thousand two hundred sixty nine 
dollars and fifty-three cents. We are not 

HS. MAUGHTOH: I understand all that. 

THE WITNESS: I will find out whatever I can about 
that. 

MR. BECKMAN: What are you going to ask? 

THK WITNESS: i an going to ask for that check. 

HR. BECKHAN: It is not our oheck. 

THE WITNESS: We got paid for soaething. 

HR. BECKHAN: East's check would go back to East. 
What inforaation do you have that is going to enable you to 
get people to look 

THE WITNESS: I will ask around. 

HS. NAUGHTON: The only thing I have right now, I 
will send you a copy of the East docunent and aaybe that 



I'lLASSIFlEO 



667 



...uASSsm 



NAME 
1'489 
11490 
1 49 1 
1492 
1493 
1 494 
1495 
1496 
1497 
1 498 
1499 
1500 
150 1 
1502 
1S03 
1 504 
1505 
1506 
1507 
1508 
1509 
15 10 
1511 
1512 
15 13 



HIR072000 



PAGE 61 



will help you. but it is SAT invoice number 087079. 

THE WITNESS: That is an SAT invoice. 

US. NAUGHTON: If that reference does not help you, 
then I will send you a copy. 

THE WITNESS: Okay. It blous ray raind anybody would 
send a washer and dryer all the way to where did you say, 
Swi t2e r land ? 

MS. NAUGHTON: Yes. 

MR. BECKHAN: What is the date of the SAT invoice? 

MS. NAUGHTON: 2/26/82. 

HR. BECKMAN: That is the date of our invoice? 

MS. NAUGHTON: Yes, I believe so. I don't know. 
Your invoice, I don't have a copy of the information. 

MR. BECKMAN: You implied the flight was on the 
26th. 

MS. NAUGHTON: I don't know, but that is the date 
on the invoice. I don't know the date of the flight or the 
date of the invoice . 

MR. BECKMAN: All info re washer and dryer. 

BY MS. NAUGHTON: 
2 I am going to ask you a series of questions now 
ragaiding individuals and ask you whether or not you have 
either met them, spoken to them, or know of them. If the 
answer is yes to any of those three questions, then I would 
like you to elaborate what you know about them, or if you 



ittASsra 



668 



KAHZ' 

15114 

1515 

1516 

1517 

1518 

1519 

1520 

1521 

1522 

1523 

152U 

1525 

1526 

1527 

1528 

1529 

1530 

1531 

1532 

1533 

1534 

1535 

1536 

1537 

1538 



HIlt072000 



UNtUSSW 



PAGE 62 



hava B«t th«it, uhan, und«x what clrcunstancas . and so on. I 
won't lapaat all thraa quastions for avazy individual. 

HR. BECKHAM: Mould it ba corract clarification 
that knows than of own knowladga as opposad to having raad 
in the prass? 

ns . HAUGHTON: That is f ina . if you know of thea, 
if someona tol^ you about then, as opposed to reading about 
then in the newspaper or on television. All right? 

THE WITNESS: Yes. I raad a lot in the last few 
nonths . 

KR. BECKHAM: Excluding what you read. It is hard 
to differentiate. 

THE WITNESS: I will do ay best. 

ns . MAUGHTOM: If you have heard of soneone but you 
don't recall where, fine, say that. 
BY HS . MAUGHTOM: 
S Frank Gonaz. 
A Frank? 
2 Yes . 
A Mo. 

e What about Hax? 
A Yes . 

fi Who is Hax Gomez? 

A Hax Gonaz was the liaison batueen| 
land Bill Cooper . 




jHMSlFltD 



I 



669 



»» 



NAME ■ 

1539 
ISLiO 
ISM 1 
1542 
15U3 
1 SMM 
1545 
1546 
1547 
1548 
1549 
1550 
1551 
1552 
1553 
1554 
1555 
1556 
1557 
1558 
1559 
1560 
1561 
1562 
1563 



HIR07200 
2 
A 
2 
liaison' 
A 
2 
A 
2 
A 
2 
A 
2 
A 



.U' 



Slte^\W5 



PAGE 63 



And you met hira twice I believe? 

I believe so . 

Do you know what his function was other than as 



As far as I know, :ust liaison. 

Edward de Garay. 

Yes . 

And have you ever met him? 

Met hira once . 

Edward, did you meet hira? 

Yes, I met him once. 

Under what circumstances. 

I believe it was in Mr. Gadd's office and he was 
explaining to me that he was going to organize the pilots . 
2 Did he say anything? 
A No . 
2 He was silent? 

r 

A I :dt met hira for a moment. I was never in a 
raeeting with him. 

2 And who told you he was going to organize the 
pilots? 

A nr . Gadd. 

2 Did you aver speak to Mr. de Garay other than 
that occasion? 

A No . 



mussm 



670 



HIR072000 



ijHtUiSSW 



PAGE 64 



NAME : 

1564 2 Did y'out mechanics or anyone else ever discuss 

1565 Mr. de Gary's functions with the contra resupply opieration? 

1566 A No. 

1567 2 You never heard about him after that meeting? 

1568 A I heard from one of our technical guys, that ue 
1559 sent to take a look at an airplane that I think he uanted to 

1570 fly auay immediately, or something of that nature, and ue 

1571 said uait a minute, there is a lot of paperwork and a lot of 

1572 thing that have to be done. He was a rather flighty 

1573 individual. Ed Freize told rae that. But I very seldom 

1574 heard any more of him. 

1575 2 What about Raphael 2uintero? 

1576 A Yes. 

1577 2 Have you met him? 

1578 A net hira once, yes. 

1579 2 Under what circumstances? 

1580 A He was with flax just in the lobby I believe, 
158 1 waiting to see Cooper. 

1582 2 The lobby of the SAT? 

1583 A Yes. 

1584 2 And what was his task m the organization? 

1585 A I don't know. 

1586 fi Uhen you were introduced to Kin, how were you 

1587 introduced? 

1588 A That this is Ralph. 



ONCLASSIFIEO 



671 



1589 
1590 

159 1 
1592 
1593 
1594 
1595 
1596 
1597 
1598 
1599 
1600 

160 1 
1602 
1603 
1604 
1605 
1606 
1607 
1608 
1609 
1610 
1611 
1612 
1613 



HIK072000 



UNCUSSlFiED 



Did you spaak to hliiT 



PACK 65 



A No, I just said hi. 

fl Did you aval say anything alsa to hln othaz than 
that naatlng? 

A No. 

Q Do you know whara ha llvas? 

A I ballava he livas In Hlanl . 

2 How do you know that? 

A I don't know. Somabody told na ha had a conpany 
in Miaai . I think I read it in the paper, as a natter of 
fact. 

S Do you know whether or not he is there now? 

A I don't know. 

fi What about Ration Hedlna? 

A Yes . I net him 

2 How many tines do you go 

A Once . 

2 That was on NHAO flight? 

A Yes. 

2 Hhat was Xaaon Medina doing when you net hin? 

A I think he drove na to the hotel. 

fi From the airport? 

A Yes. 

2 Hhat was his task in the contra resupply nission? 

A As far as I could tell he was a gofer. 




UNCLASSIFIED 



672 



NAME ■■ 
161U 
1615 
1616 
16 17 
16 18 
16 19 
1620 
162 1 
1622 
1623 
162<4 
1625 
1626 
1627 
1628 
1629 
1630 
1631 
1632 
1633 
163>4 
1635 
1636 
1637 
1638 



HIR072000 



*t/i»ife 



PAGE 66 



2 For uhora? 



A I think for Cooper. 

2 Did you ever see hin in the Unxted States? 

A No , I never did . 

2 Do you Know where he lives? 

A No. I don't. 

2 What about Luis Posada Carrilles? 

A No. 

2 Uhat about Eelix Rodriguez? 

A Eelix Rodriguez is Max Comez . 

2 How do you know that? 

A I read it in the paper. 

2 So when you were introduced to him. which nane 
was he using? 

A I think it was Max. 

2 Now. Mr. Cooper you knew. I assume, iairly well. 
Better than the others? 

A Yes. 

2 Did he spend a lot oi time in SAT? 

A Yes. he did. 

fi What did he have to tell you about the operation? 
Has ha happy with it. was ha dissatisfied? 

A Mo. I would not say he was happy. He was doing 
the best he could to run the operation. 

2 Uhat did ha say about the financing? Did he ever 



i 



UNCLASSIFIED 



673 



ilNCUSSifitO 



NAME: HIR072000 PAGE 67 

1639 explain about lack of funds? 



UNCLASSIFIED 



674 



NAME 
1640 
16U 1 
16142 
16U3 
1 6U14 
16145 
16146 
1647 
16148 
1649 
1650 
165 1 
1652 
1653 
1654 
1655 
1656 
1657 
1658 
1659 
1660 
1661 
1662 
1663 
16614 



HIR072000 



RPTS THOMAS 



DCMN LYNCH 



MmSlfB 



PAGE 68 



A I think yes, this fuel money was a problem for 
him. He told me once that everybody wanted hira to fly and 
then they go out and couldn't get fuel for airplanes, didn't 
have enough money, enough cash. Everybody wanted cash and 
that was always an ongoing problem for hira. 

e Did he ever express to you the suspicion that 
part of the money might have been siphoned off by any of the 
contra leaders? 

A No. 

2 Did anyone ever express that to you? 

A No . 

2 Did they feel they ware getting all the money 
that was coming in? 

A Who? 

2 Did Mr. Cooper? 

A Mr. Cooper only expressed problems with getting 
the funds that he needed for his daily operation, as I :)ust 
explained. There was nothing beyond that. 

fi Did he ever complain about the behavior of any of 
th« crews? 

A I think so. I think he fired a guy one day. 

2 Do you know what for? 

A No, I don't. 



rnkmii 



675 



OfJCUSSlFO 



NAME HIR072000 ><»•-■ PAGE 69 

1665 2 Was it ever expressed around SAT, either involved 

1666 in the contra resupply operation or involving the Iranian 

1667 flights, uas the National Security Council ever mentioned? 

1668 A No. 

1669 2 Did Mr. Secord ever mention the National Security 

1670 Council? 

167 1 A No . 

1672 2 Did fir. Secord ever mention Oliver North's name? 

1673 A No. 

16714 S Did nr . Gadd every mention Oliver North's name? 

1675 A No. 

1676 2 Did Hr . Dutton? 

1677 A No. 

1678 2 Was Oliver North's name ever mentioned at SAT by 

1679 anyone, to your knowledge? 

1680 A Yes sir. 

1681 2 What? 

1682 A Aiter we flew McFarlane and the crew to Teheran 

1683 in flay, Mr. Gilchrist came back and debriefed me. 

1684 2 Did you know who Oliver North was? 

1685 A No. 

1686 fi Did you ask him? 

1687 A Yes. 

1688 2 What did he say? 

1689 A He said he though-'he was with the National 



mm\m 



676 



NAME : 
1690 
1691 
1692 
1693 
1694 
1695 
1696 
1697 
1698 
1699 
1700 
170 1 
1702 
1703 
170U 
1705 
1706 
1707 
1708 
1709 
1710 
1711 
1712 
1713 
17 14 



PNCUSWD 



HIR072000 



Security Council. 



PAGE 70 



2 What else did he tell you about Mr. North? 

A That was all. Said he carried a Bible. 

2 He carried a Bible? 

A He carried a Bible. 

2 Did you think that was amusing? 

A It was, after reading all the articles. 

2 Did you ever meet Mr . North? 

A No , I never did . 

2 Every speak to him? 

A No . 

2 What about Mr. McFarlane? 

A No . 

2 No to both questions? 

A No to both questions. 

2 What about Poindexter? 

A No. 

2 Was his name ever mentioned at SAT? 

A No. 

2 What about Charles Tyson? 

HR. BECKMAN: I was writing instead of listening 
What was the answer on McFarlane? 

THE WITNESS: No. 

MR. BECKMAN: You said you didn't hear about 
ncFralane? 



I 



i 



ONCLASSIFIED 



677 



ONCLASSIFIED 



NAME: HIR072000 



PAGE 71 



1715 
17 16 
17 17 
17 18 
17 19 
1720 

172 1 
1722 
1723 
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1729 
1730 

173 1 
1732 
1733 
1734 
1735 
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1737 
1738 
1739 



THE WITNESS: she asked me if I ever met him. I 

said no, or spoke to hira. 

BY ns . NAUGHTON: 

2 You obviously herd of him from Mr. Gilchrist. 

A Yes. 

2 At any other point was he mentioned at SAT other 

than the May '86 flight? 
/ 

A No . 

e What about Adnan Khashoggi? 

A No . 

2 What about Donald Fraser? 

A No . 

2 Ernest Miller? 

A No . 

2 Yaacov Nimrodi? 

A No . 

2 Al Schwinmer? 

A No. 

2 Michael Ledeen? 

A Ho. 

2 David Kimche? 

A No . I 

2 Willard Zucker? 

A No, except for you just mentioning it. 

2 Very good . 



wussra 



678 



NAHZ< 

17140 
17i«1 
1742 
171*3 
17K14 
1745 
1746 
1747 
1748 
1749 
1750 
1751 
1752 
1753 
1754 
1755 
1756 
1757 
1758 
1759 
1760 
1761 
1762 
1763 
1764 



HIR072000 
A 
dzy«t . 
e 

A 
2 
A 
fi 
A 
Q 
A 
2 
A 
S 
A 



ICUSSIFIED 



PAGE 



72 



Plzs I hava haazd oi tha guy ha got a uashez and 



Jacqua Mossaz? 

Mo. 

Thonas Cllnas? 

Yas . 

This is C-L-I-M-E-S? 

Right. 

Firstly, have you evaz mat Hz. Clinas? 

No, I havan't. 

Hava you spokan to Hz. Clines? 

I don't knoH. I don't think so. 

What makes you think you hava? 

Uall, as I said yesterday, whan we were iirst 
asked by Mr. Gadd for the^^^^^Htr ip , when we didn't have 
an airplane, he was--once we arranged for the sub-service, 
his nane was given to ^^ ^^^^^^^^H ^ gave it to Dave, but 
I an not--I can't reaamber during that period if I nade a 
call just as part oi the coordination or not. I really 
don't recall. I know Dava talked to hiit several tines. 

fi And who does Hz. Clinas work for, to your 
knowledge? 

A Z don't know. 

S And his nana was given to you by Hr . Gadd? 

A Yes sir. 



HiJ^sw 






679 



Hxnz 

1765 
1766 
1767 
1768 
1769 
1770 
1771 
1772 
1773 
17714 
1775 
1776 
1777 
1778 
1779 
1780 
1781 
1782 
1783 
178U 
1785 
1786 
1787 
1788 
1789 



HII1072000 



yiussiFe 



PIGK 73 






fi What did Mr. Gadd tall you Ht . Cllnas could or 
would do7 

A Tha gist was coordinating tha charter at tha 

!nd. 

2 So in othar words, Ki . Cllnas Is rasponslbla ioi 
having tha cargoj 
A Right. 

2 Has thara a problan with that facat of the 
flight? You told us that alia air was lata in getting to 
[Has thara a problem with tha loading thara? 
A Mr. Mulligan could explain it better. I thinK 
there was a problem on one of those two flights where the 
flight bringing tha cargo in was delayed--snow storm or 
sonethlng--and it was putting tha whole schedule into 
jeopardy . 

2 Did you hear any information or rumors or 
anything that this cargo had coma from Poland or other 
Eastern Bloc countries? 
A Yes . 

From whom did you hear that? 
Dave . 

And what was his information? 

Hell, I don't know ha told me that. Tha delayed 
flight was coming from an Eastern Bloc country and I don't 
recall if it was Poland or Hungary or Albania. I don't 



S 

i 

e 

A 



yNCLASSIFIED 



680 



1790 
1791 
1792 
1793 
17914 
1795 
1796 
1797 
1798 
1799 
1800 
1801 
1802 
1803 
180U 
1805 
1806 
1807 
1808 
1809 
1810 
181 1 
1812 
1813 
181<4 



HZK072000 



know. 



ii?- 



iUSSIFlEO 



PAQE 



7M 



fi Old you oz anyona In your oonpany hav« any 
dealings with Mr. Clines aftar that? 

A Mot that I an aware oi. 

e Did Hr . Gadd «var spaaK of Nr . Cllnas aitar that? 

A Kot that I can racall. 

2 Did Hr . Dutton? 

A Not that I can racall. 

S Did Hr . Sacord? 

A Ho. 

e What about Albart HaKla? 

A I think I spoke to hin onca . 

fi Do you ramemher under what clrcunstancas ? 

A It was tha sane tine as Cllnas, and frankly, I 
don't even know if I spoka to hia either. But he was 
another nane given to ne to help coordinate this January of 
'85 charter and I recall he had a California phone nuaber . 
I don't know, I raaeabar--! don't know what good he is going 
to do raa in California when tha trip is out of| 

S Who had given you his naae? 

A Dutton had. I aa sorry, not Dutton, Hr . Gadd 
had. 

fi And this California nuaber, do you recall was it 
a coapany or private residence? 

A I don't racall. 



■•r-i 



mm 



1 



681 



NAME 
1815 
1816 
1817 
1818 
1819 
1820 
182 1 
1822 
1823 
18214 
1825 
1826 
1827 
1828 
1829 
1830 
1831 
1832 
1833 
183U 
1835 
1836 
1837 
1838 
1839 



ONClASSiflEO 



HIR072000 UllWLtffiWII timW PAGE 75 

2 Did you call it from your office? 

A No, I don't even remember if I even called it. I 

know I had it. I think I called them. If I did, I probably 
called from my office.. 

2 Do you still have that number? 

A I might. 

2 Could you please check on that for me? 

A Sure . 

2 Uas Mr. Hakim's name ever mentioned after that 
episode ? 

A Ho. 

2 Uas his name ever mentioned in your discussions 
with Mr. Dutton or Mr. Gadd after the story broke? 

A Mo. 

2 They have never refetred to Dr. Hakim? 

A Ho. 

e What about Robert Lilac? 

A Ho. 

2 What about a Ouane Clarridge? 

A No. 

S Do you know him by Deuey? 

A No, I don't know anybody by the name of 
Clarridge . 

2 What about H. Ross Perot? 

A I have heard of the name. 



01! liSSIflED 



682 



NAME : 
18140 
1841 
1842 
18U3 
leUM 
18H5 
1846 
1847 
18(48 
1849 
1850 
1851 
1852 
1853 
1854 
1855 
1856 
1857 
1858 
1859 
1860 
1861 
1862 
1863 
1864 



UNCLASSIfiEC 



HIR072000 ^ PAGE 76 

2 Have you met him? 

A No . 

2 Have you ever spoken to hira? 

A No . 

2 Do you know hira only through the media? 

A Yes . 

2 Uhat about Constantine Henges? 

A No . 

2 What about Nestor Sanchez? 

A No . 

2 What about Ted Shackley? 

A I read it in the paper a couple of days ago. I 
don ' t remember . 

2 Were you given his name as an associate of Nr . 
Clines ? 

A No . 

2 What about llanuchehi Ghotbanifar? 

A Only what I read in the paper. 

2 What about John Hull? 

A No. 

2 What about Jack Terrell? 

A Yes. What I have read in the paper. 

S Do you know anything else about Mr. Terrell? 

A No. 

2 What about Faith Ryan Uhittlesley? 



UNCUSSlflED 



683 



NAME ■ 
1865 
1866 
1867 
1868 
1869 
1870 
187 1 
1872 
1873 
1874 
1875 
1876 
1877 
1878 
1879 
1880 
1881 
1882 
1883 
18811 
1885 
1886 
1887 
1888 
1889 




mR072000 Wl lUL.fl4ll III iril PAGE 77 

A 

Q 
A 

2 

A 
2 
A 

e 

A 

2 

A 

2 

A 

2 

A 

2 

A 
Israel . 

2 What about, what did Mr. Hir do in Israel? 

A Hr . Gilchrist told me he thought he was head of 
tha antiterrorism reporting to the Prime Minister. 

e Did he brief Mr. Gilchrist on Iran? 

A Yes. According to Mr. Gilchrist. He could 
answer that better than I. I believe he was on the flight. 

2 Okay. Did Mr. Gilchrist ever tell you or did he 



Do you know who the Ambassador is to Switzerland? 

No . 

What about Richard Brenneke? 

Mo. 

What about Claries Allen? 

No. 

John McMahon? 

No. 

Stanley Sporkin? 

No . 

Arairam Nir? 

Yes. 

Had you met him? 

No. 

How do you know? 

Mr. Gilchrist told me he was, that he met him m 



yNCLASSiFIEU 



684 



1890 
1891 
1892 
1893 
189U 
1895 
1896 
1897 
1898 
1899 
1900 
1901 
1902 
1903 
1904 
1905 
1906 
1907 
1908 
1909 
1910 
19 11 
1912 
1913 
1914 



HIR072000 



yNCUSSIFlE! 



PAGE 78 



to your knowledge did he ever have the impression that any 
of these Israelis had shipped arras to Iran before this? 

A No . 

2 What about Graham Fuller? 

A No . 

2 Roy Furmark? 

A I have read that in the paper as well. I have 
never met him. 

2 Carl Spitz Channell? 

A No . 

2 Halter Millet? 

A No. 

2 Merman (loll? 

A No. 

2 Guri and Israel Eisenberg? 

A No . 

2 Sam Watson? 

A No . 

2 Colonel James Steele? 

A I have heard the name. 

2 Where did you hear the name? 

A I believe he was military attache in El Salvador. 

2 Did you ever meet him? 

A No, I didn't, I don't think. 

2 But some of your crew members did, is that 



iJNCLASSIFIEg 



685 



NAME 

19 15 
19 16 
19 17 
19 18 
19 19 
1920 

192 1 
1922 
1923 
1924 
1925 
1926 
1927 
1928 
1929 
1930 

193 1 
1932 
1933 
193U 
1935 
1936 
1937 
1938 
1939 



HIR072000 



correct ? 



ONClASSIfitD 



PAGE 79 



A No, I don't believe so. Except for the April 

( 
:^ght that ue did, I think, I believe, that our crew did 

meet hira on that flight. 

2 Hho did the most liaison with Colonel Steele? 

A I don ' t know . 

2 Uhat about General Singlaub? 

A I have heard of him. 

2 Did you ever meet him? 

A No . 

2 Did you ever hear of hin from General Secord? 

A No . 

2 Ever hear of him from Hr . Gadd or Dutton? 

A Yes sir . 

2 Hhat did they tell you, what did Mr. Gadd tell 
you about Singlaub? 

A That he was, I guess, I don't know, involved m 
trying to gather relief goods for the contras . I think Gadd 
mentioned to me at one time that he considered him actually 
as a competitor. 

2 So he was not working in conjunction with Mr. 
Singlaub? 

A Ho. 

2 What else did he say about Singlaub? 

A That is all. 



ymOTO 



686 



NAME ■■ 
1940 

194 1 
1942 
1943 
1944 
1945 
19U6 
1947 
1948 
1949 
1950 

195 1 
1952 
1953 
1954 
1955 
1956 
1957 
1958 
1959 
1960 

196 1 
1962 
1963 
1964 



,...„ yUCUSSifiED 



PAGE 80 



What did he think of hire? 



A I don't knou. 

2 Did you ever speak to General Singlaub? 
A No . 

2 Ambassador Dueraling. Other than the incident you 
described during the NHAO flights, did you have any other 
contact about Ambassador Duemling? 
A No . 

2 Did you ever discuss uith Ambassador Duemling the 
shipment of lethal weapons? 
A No. 

2 To your knowledge, was he aware of the private 
funding aspect of the contra resupply? 
A I don't know. 

What about a man named John Mattes? 

No . 

Adam Goodman? 

No . 

Howard Teicher? 

No. 

Elliott Abrams? 

No. I have seen him on TV. 

Have you ever spoken to him? 

No. 

Have you ever met hia? 



2 
A 
2 
A 
2 
A 
S 
A 
fi 
A 

e 



\1EUSSW 



687 



NAHE ■ 
1965 
1966 
1967 
1968 
1969 
1970 
197 1 
1972 
1973 
197M 
1975 
1976 
1977 
1978 
1979 
1980 
1981 
1982 
1983 
1984 
1985 
1986 
1987 
1988 
1989 



HIR072000 



*«S/flfn 



PAGE 81 



No. 



2 Did either Mr. Secord, Mr. Gadd or Mr. Dutton 
ever talk about either Mr. Teicher or Mr. Abraras? 

A No . ' 

2 Do you know of any of your creu members or anyone 
associated uith SAT had ever met Mr. Abraras m Central 
America? 

A No. 

2 You don't know, or they didn't? 

A I don't know. 

2 Donald Gregg? 

A They never record to me and I would think that 
would be something they would report. 

Donald Gregg? 

A No. 

Robert Owen? 

No. 

How about a Bobby Owen? 



Bobby Owens. I have h#id the name from Gadd I 



2 
A 

2 
A 

believe . 

2 Hhat did Gadd say abut Bobby Owens? 

A No, he was helping m Central America. I don't 
recall what aspect of it, but he was somebody that Gadd had 
talked to about Central America. 

2 What contact did Owens' name come under, why did 



UNCUSSIFIED 



688 



NAME: HIR072000 



UNCLASSiflEO 



PAGE 82 



1990 
1991 
1992 
1993 
199M 
1995 
1996 
1997 
1998 



he ever mention hira? 

A I don't really recall. I think there was an 
operating snaiu and I think he told me Bobby Owens was 
trying to get it worked out. 

2 Okay. Did he express and opinion of fir. Owens to 
you? 

A No . 

I will take that back. He said he was a very sharp guy, I 
remember that. 



ymnssffl 



689 



NAME: 

1999 
2000 
200 1 
2002 
2003 
2004 
2005 
2006 
2007 
2008 
2009 
20 10 
20 1 1 
20 12 
20 1 3 
20 \U 
2015 
20 16 
20 17 
20 18 
20 19 
2020 
202 1 
2022 
2023 




HIR072000 .;*.C' . •-;, PAGE 83 

RPTS CAMT 
DCHN MILTON 
! 1 1 : 30 1 

BY nS . NAUGHTON: 

2 Back on the record. 

I just have a couple more names to ask you, and 
again the same three questions apply. John Cupp? 

A Yes, he worked for Dick Gadd, I believe. 

2 When did you meet hira? 

A I am not sure I have ever met him. I have talked 
to him on the phone . 

2 About what? 

A About Central America. 

2 What specifically do you recall? 

A No . 

2 What does he do? 

A He IS one of his operations guys. I don't know 
uhat he does . 

2 And what was your impression of Mr. Cupp? 

A A nice guy. 

2 What about a man named Tom Posey? 

A No. 

2 I am going to ask you the same kinds of questions 
about some corporations, and ask you whether or not you have 



m^^ 



690 



NAME 
2024 
2025 
2026 
2027 
2028 
2029 
2030 
2031 
2032 
2033 
203M 
2035 
2036 
2037 
2038 
2039 
20U0 
204 1 
2042 
2043 
2044 
2045 
2046 
2047 
2048 



HIR072000 



yNCLASSIFiEO 



PAGE 84 



heard of them other than through the media or have had any 
dealings with them. CSF? 

A Only the bank transfer we received. 

2 You have had no other business uith thera? 

A Mo. 

2 What about Project Democracy; have you ever heard 



that? 



A Just what I read. 

2 The Vinnell Corporation? 

A Yes> I have. I believe Mr. Gadd used to work for 
them . 

2 How do you know that? 

A I think Mr. Bastian told me. 

2 Did you ever discuss that period of his employment 

with Mr. Gadd? 

A No . 

2 American National Management Corporation? 

A yes. 

2 What do you know about them? 

A That is one of Mr. Gadd's companies. 

2 How do you know that? 

A It is on the door of his office. 

2 Where is EAST then? Is EAST on another door? 

A Ho. I never saw it on any door. 

2 How do you know he is from EAST then? 



wussffe 



691 



J'ilft- •! .^ 




^hifkii 



NAME^ HIR072000 PAGE 8S 

20U9 A I'ra sorry? 

2050 2 How do you know he represents EAST then? 

2051 A Just because that is where I send ray invoices. 

2052 C But to the same address as ANM? 

2053 A Yes. 

2054 2 Corporation? 

2055 A Yes. 

2056 2 What about the National Endowment for Democracy? 

2057 A No. 

2058 2 How about the National Endowment for the 

2059 Preservation of Liberty? 

206 A No. ■ 

2061 2 Air Mack? 

2062 A '-^es. 

2063 2 How do you know Air flack? 

2064 A This was a company Mr. Gadd used in contracting 

2065 with NHAO? 

2066 2 Is Air Mack also located at the same address as 

2067 EAST? ■' 

2068 A Yes, I believe so. 

2069 2 Is Air Mack on the door anywhere? 

2070 A No, I never saw it. 

2071 2 Corract ne if I are wrong; your only knowledge of 

2072 Air Mack is just that that is whom he used to bill the State 

2073 Department? 





I 




692 



KAnz> 

2074 
2075 
2076 
2077 
2078 
2079 
2080 
2081 
2082 
2083 
208U 
2085 
2086 
2087 
2088 
2089 
2090 
2091 
2092 
2093 
20914 
2095 
2096 
2097 
2098 



HIK072000 



biiljLhOxiiiiiu 



PtGK 86 



A That Is cotzact. 

fi Explain this to a*. If Ht . Gadd conttaotad with 
Alt Hack as a zaptasantatlva oi Alz Mack to pzovlda thasa 
natazlals to tha Stata Oapaztmant. to NHAO, why Is It that 
SAT blllad EAST Instead oi Alz Hack? 

A To us thay waza all ona and tha Sana, and wa 
alzeady had a iila on EAST. It Is just aaslar that way for 
ouz own zacozds. 

2 What about Suitnlt Aviation? 

A I hava just haazd oi than. I think thay aza tha 
pzadacassoz oi Sumazlco. This is long baioza ay tlaa . 

fi Civilian Hllitazy Patzol? 

A No. 

2 Energy Rasouzcas? 

A No . 

S Daiex? 

A Deiax is tha handler in Lisbon for our chaztezs out 
oi Lisbon. 

S To youz knowledge, aside iioa the ilights that we 
have discussed ,^^^^^Hto Centzal Anezica, have you dona any 
othaz chaztezs involvlns 

A Gee, I am suze we have at one tine or another. 

fi That would not be unusual? 

A No. 

fi The Council ioz Deaoczacy and Assistance? 




UNCLASSIFIED 



693 



KAME ■ 
2099 
2 100 
2 10 1 
2 :02 
2 103 
2 lOU 
2 105 
2 106 
2 107 
2 108 
2 109 
2 110 
2 111 
2 112 
2 113 
2 1 1U 
2115 
2 116 
2 117 
21 18 
2119 
2 120 
212 1 
2 122 
2 123 



HIR072000 



Mmsim 



PAGE 87 



A Ho . 



2 International Business Communications? 

A No . 

2 Udall Research? 

A Yes. 

2 What do you know about Udall? 

A That was the company that uhen ACE acquired the 
Caribous, that the titles were transferred to the next day, 

and from what I r^ad in the paper, they are also the company 
that developed the air strip in Costa Rica. 

2 To your knowledge, who owned the C-123s? 

A I don't know. 

2 Albon Company? 

A No . 

2 Vertex Finances? 

A No . 

2 Euro-Commercial Finances? 

A No. 

2 Triad America? 

A No. 

2 International Procurement and Sales, Inc.? 

A No. 

2 Galaxy Trading? 

A No. 

2 Operational Sub Group? Have you ever heard of OSG? 



UNCLASSIFIED 



694 



NAnZ< HIR072000 



UNCUSSIFIED 



PAGE 88 



212U 

2125 

2126 

2127 

2128 

2129 

2130 

2131 

2 132 

2 133 

213U 

2135 

2136 

2 137 

2 138 

2 139 

211*0 

2 141 

2 1i«2 

2143 

2mu 

21((5 
2146 
2 1147 
21U8 



A 

A 
fi 
A 
fi 
A 




A No. 

fi Hav* you haard of a projact callad Projact Condor 
Danavand? 

A KO. 

2 What abou-t 

A Say that again? 

S 

A 

2 

A 

fi 

A 




Yas. 
Yes . 
What do you know about tha«7 





I guass that was all. 
Jfhaza aza thay locatad? 

as iaz as I know. 
Did ha aaat with you or just phona you? 
No, I nat with hla. 
In youz oiilca? 
In ay ofilca, zlght. 
Hhan was this? 

198'( sonatina. I don't racall. 
Did you go into this joint vantuza? 




695 



KAHE 

2 149 
2150 
2151 
2152 
2153 
215"4 
2155 
2156 
2157 
2 158 
2159 
2160 
2161 
2162 
2163 
216U 
2165 
2166 
2167 
2168 
2169 
2170 
2171 
2172 
2173 



^ 



HIX072000 



Waxj/r;:,; 



fXQt 89 



No. 





fi Why not? 

i Ha was a conpatltor. I spant a yaar filing 
conplalnts to tha DOT on Fifth Fiaadom. 
2 Do you want to axplaln that? 

A It maans--Bob, you ara battar. That is your baby. 
HR. BZCKHAH: Fifth Fteadoa is a term of art which 
aeans flights by an alrlina of country A that oparata 
betwaan countries B and C. in this easel 

was seeking authority froa tha 
United States to oparata between tha United States and other 
countries in the Caribbean and Central Anerica other than 

■which would be Fifth Freedon flights, and are 
nornally approved only on a limited basis. 

Wa objected that the voluaa of tha flights and 
other characteristics ^^^^^^^^^^^His unproved 

background, and other defects that wa pointed out qualified 
it in our subnisslon for the approvals that the Department 
of Transportation gives as a matter of grace. There is no 
obligation to give them. 
BY nS. NAUGHTON: 
fi Has that complaint rejected or what happened? 
A Continuously. 

HR. BECKMAH: Ue sort of got-- 

THE WITHESS: He never got anywhere, but it wasn't 




m0^^ 



696 



NAnz 

217M 

217S 

2176 

2177 

2178 

2179 

2180 

2181 

2182 

2183 

218M 

2185 

2186 

2187 

2 188 

2189 

2190 

2191 

2192 

2193 

219>( 

2195 

2196 

2197 

2198 



UNCLASSIREO 



HIR07 2000 ^"" -— -' PAGE 90 

just^^^^^^^^^H All th« caxtl*rs wax* 
rr«*doM just as xoutlnaly as can ba . 
BX MS. NAUGHTOH: 

fi What daiacts did you point out In using this 
aiillna. In your complaint? 

A Hall/ basically ua fait that thara was an aMcass of 
It. Sea--I Hill taka you back a stap--thaia was no coaneicial 
reason in tha wozld f oz ■^^^^^^^^■as a nation ot anything 
else to buy^^^^^^^^^HThalt application laid out a system 
of flights f rot 

f and thaza is no tzafflc, and 
that was ona of our complaints. To us it was a flag oi 
convanlanca, claar and siapla flag of convanlanca. And wa 
objectad to it. 

Q What do you mean? 

A Flag of convanlanca is ona that you would register 
your aircraft under a country that has no laws or no rules, 
and then fly wherever you want. 

HR. BECKKAN: The significance of that in context, 
if I may try to be helpful, is that in international 
aviation, ona country, in this case tha United States, 
grants rights to tha airline of another country, in this 
casa^^^^^^^^^^H as a matter of International reciprocity 
and comity, but fundamental to tha exchange of reciprocal 
rights is that the airline is a bona fide carrier of the 



ONCIASSIFIED 



697 



KAME 
2199 
2200 

220 1 
2202 
2203 
220M 
2205 
2206 
2207 
2208 
2209 
22 10 

221 1 
2212 
22 1 3 
2214 
22 IS 
2216 
2217 
2218 
2219 
2220 
2221 
2222 
2223 



HI11072000 



I'NCLASSiFIED 



PAGE 91 



oth*t country. And w« thought that th«t* was no avidanca 
that this company was in fact a bona fida national airlina. 
Indaad, wa polntad out that theza was avidenca to tha 
contrary . 

HS . KAUGHTON: What was tha avidenca to tha 
contrary ? 

MR. BECKHAM: That all of tha officars, directors 
and operators wera ^^^^^^Hand people that had no connection 
with tha country, that there was no ° ^ ^^^^^^^^^^^1 
citizenship that seenad to have any control or ownership 
interest in tha airline, and that is what Mr. Langton means 
by flag of convenience. It is an airlina that is really 
only controlled by people other than^^^^^^^^^^B who are 
carrying the ^^^^^^^^^Hf lag as a 

THE WITNESS: Just as in shipping, most ships are 
registered in Panama or Liberia, flags of convenience. 
BY nS. HAUGHTOH: 

2 Is that the only aircraft, do you know of, that 
they own? 

A I understand that is the only one that I saw or 
eveiu car ed about, but I understand that they also had an F- 
27 ^^^^^^^^^^H and a as 

never did see those . 

2 What would you use r-27s for? 

A Moving people, passengers. 



*j 



mmm 



698 



NAHZ' 
222(4 
222S 
2226 
2227 
2228 
2229 
2230 
2231 
2232 
2233 
223(4 
2235 
2236 
2237 
2238 
2239 
22(40 
22(41 
22(42 
22(43 
22(4(4 
22(45 
22(46 
22(47 
22(48 




H1R072000 UIISmE il\ L'lrSP't^ P*GK 92 

fi P«opl*7 

A y*s. 

2 Hon nany pass«n9«rs would It hold? 

A I aa not sura. I think it is about a 25-passangai 
aitplana, somawh«xa in that aiaa. It would ba a comnon one 
in tha Caribbaan. 




UNCLASSIFIED 



699 



Mmim 



?^o ^s^"'" ""^ 



£'aJ/SD /'J 

~7':> Ti^U 



■mm%m 



700 



NAME 
2324 
2325 
2326 
2327 
2328 
2329 
2330 
2331 
2332 
2333 
2334 
2335 
2336 
2337 
2338 
2339 
2340 
234 1 
2342 
2343 
2344 
2345 
2346 
2347 
2348 




cir 



Ififi 



PAGE 96 



HIR072000 ^» » wl 

A No . 

2 Did either Mr. Secord, Plr . Gadd, or Mr. Button ever 
mention that airuay? 

A No . I take that back. I think Hr . Gadd did. 

2 What did he mention? 

A But I think I mentioned it to him. I said. This is 
just crazy what is happening to us, and I think I asked him 
if he knew anything about them? 

2 What did he say? 

A He said no . 

2 What about Dolmy Business, Inc.? 

A No. 

2 Hyde Park Corporation? 

A We received a bank transfer from them. 

2 Any other business with them? 

A No. 

2 Any other business with Lake Resources? 

A Any other business? 

2 Yes . 

A I didn't even know we had any business with them. 
Did we? 

HR. BECKHAN: I don't know whether we got a bank 
transfer or something. 

THE WITNESS: I don't recall anything from them. 
BY ns . NAUGHTON: 



yNCIiSSIFIED 



701 



HIR072000 



UNCLASSIHB 



PAGE 97 



NAME ■ 
231*9 2 Ttansuorld Arms? 

2350 A I ara not sure if that first sub service ue did with 

2351 Arrow, I think Transworld Arras might have been involved in 

2352 that. I can't renembei. Are they a Canadian firra? 

2353 2 I asked about them yesterday, yes. 

2354 A They may have been involved in that first shipment, 

2355 I don't know. 

2356 2 But do you know how? 

2357 A No, I don't. 

2358 2 Had you ever done business with them since? 

2359 A No. 

2360 MR. BECKMAN: I am sorry, did you testify that you 

236 1 had ever done business with them? 

2362 THE WITNESS: No. 

2363 MR. BECKMAN: Okay, because the question was, have 
236U you done any business since, and that might imply you had 

2365 done business before. 

2366 THE WITNESS: Mo. 

2367 BY MS. NAUGHTON: 

2368 2 I want to show you what you I have marked as SAT 

2369 docunents 2025 and 2026. They are billing instructions for 

2370 th« January 17, 1986. flight and a March 1st, 1986, flight. 

237 1 Could you look at those documents, please, sir. and just 

2372 tell me what they are? 

2373 A They are billing instructions for two flights. 



mimm 



702 



--■( .. 



NAHE' HI11072000 



KIASSIFIED 



PAGE 98 



2374 

2375 

2376 

2377 

2378 

2379 

2380 

2381i 

2382 

2383 

23814 

2385 

2386 

2387 

2388 

2389 

2390 

239 1 

2392 

2393 

239(4 

2395 

2396 

2397 

2398 




on, it 



This is th > Haroh Ist flight, is a flight 
looks llke^^^^^^^^l 

Q Could you d«clph«c tha thtaa lattec codas for aa , 
first of all? 

k This is Brownsvilla. Taxas . Ua had an aircraft 
basa thara at tha tima . That 




BY MS. KiUGHTOK' 

Q Is this a flight parfozmad by SAT or by Arrow? 

A By SAT, 525. 

2 And is this part of the Gadd-ralatec 
flights? 

A Yas. 

2 Uhy would thara hava baan all thosa stops between 





A For fual, I suppose. 

HK. BECKHAK: It is a long way. 

THE HITKESS: Hhan you hava a full load onboard, 
you can't go very far. 

BY HS. NAUGHTON: 




oSIF|[[! 



703 



KAHC 
2399 

2400 
2M0 1 
2U02 
2403 
2404 
2405 
2406 
2407 
2408 
2409 
2410 
241 1 
2412 
2413 
24 14 
2415 
2416 
2417 
2418 
2419 
2420 
2421 
2422 
2423 



HIR072000 



UNCUSSIFIED 



PAGE 99 




Q To tha bast oi your knowladga, thosa fout stops 
thosa thraa s t o p s . ^^^^^^^^^^^^^^^^^^^^^^^^^^^^H a r a 
iual stops? 

A Yas. 

2 What Is tha stop inl 

A Fuel. I don't belleva thara is any iual in 
[so they needed iual to get home. 

2 It as your understanding thai 






2 
A 
2 
A 

2 




And the January billing instructions? 

This is 3ust a charter down to, it looks like 

lis, and they went over to 
land back to Hiani. 
Miaai .^^^^^^^^ 

Lami . 
What was this ior, do you recall? 
It looks like a NHAO . 

Regarding the supply efiorts, I want to ask you a 
coupla of questions about what you knew, not necessarily 
what SIT paitlcipated in, but waia you aware that South 
Airican pilots were being used? 
A No. 



i-'Ncussm 



704 



UNCLASSIFIED 



NAME ■ 
2M2U 
2425 
2U26 
2427 
2128 
2U29 
2430 
2431 
2432 
2433 
2434 
2435 
2436 
2437 
2438 
2439 
2440 
2441 
2442 
2443 
2444 
2445 
2446 
2447 
2448 



HIR072000 



PAGE 100 



2 In the operation? 

A No. 

2 Do you know specifically that they were not, or you 
just don ' t know? 

A I not only don't know but I don't believe they 
were . 

2 Do you know whether they were used in 1985 to 
supply contras? 

A South African pilots? 

2 Right. 

A I just said I don't beliave they ever were. 

2 Uhat makes you think they were not? 

A As far as I know there were two pilots that were 
not Americans or not Latins in that operation, and I 
remember Cooper told me. There were two English pilots that 
cane down, sent down by Secord . Cooper told me all they did 
was they drank for two weeks and chased the brown-skinned 
girls, and they got rid of them. 

2 Could they hava been Rhodasian rather than English? 

A I don't think so. What Coopai told me is they came 
doMn. they didn't know how to fly the airplanes that were 
thara, this 123 or tha Caribou, and he didn't know why they 
ware thera except thay were sent down by Sacord, and they 
made claims of having been involved in the--what was the 
island? 



JNCLASSIFIEO 



705 



UNCLASSifiES 



KAME 

2449 
2U50 

245 1 
2U52 
21453 
2454 
21455 
2(456 
2U57 
2458 
2459 
2460 

246 1 
2462 
2463 
2464 
2465 
2466 
2467 
2468 
2469 
2470 

247 1 
2472 
2473 



HIR072000 PAGE 101 

2 The falklands? 

A The Falklands war, so that is why I assumed they 
were English. 

2 Do you recall approximately when this was? Was 
this early in the operation or late? 

A I don't think it was early, and because Secord was 
involved, I became more aware of who he was; I would think 
it was probably in Hay, April-May, sometime m that time 
frame. There wasn't any airplanes down there really before 
that. In fact, it was probably nay. 

2 So no airplanes until late April? 

A The first Caribou got down there m February, and 
there was not another airplane until April, and that one was 
having a hell of a time running. 

2 Was that a C-123? 

A No, it was Caribou. 

2 the other Caribou. One other company I forgot to 
ask you about was Saf air . Could you explain, first of all, 
who they are? 

A '^hara are two Saf airs. Which one are you referring 
to? 

A Why don't you tell me about both of them? 

A Safair South Africa is a cargo airline that 
operates L-IOOs and has a major maintenance base in 
Johannesburg, and then there is Safair U.S.A., which has 



ymnssiFiEO 



706 



UNCUSSIFIED 



HIR072000 



PAGE 102 



NAME 

2'47<4 since been renamed Globe Air, and we lease three aircraft 

2475 from that corporation. 

2476 2 The one in the United States? 

2477 A The U.S. company, right. 

2478 2 What aircraft do you lease? 

2479 A Three L-IOOs. 

2480 2 Tor what purpose? 

2481 A For commercial purposes. 

2482 2 But a particular contract? 

2483 A No. 

2484 2 Why do you lease then? Why not buy them? 

2485 A In the beginning I came in 1983, the company had 

2486 three aircraft. We needed to bid into Log Air, which was--we 

2487 needed cash flow, a good steady cash flow. We made the 

2488 lease arrangement with Safair U.S.A. to lease three 

2489 aircraft. That gave us enough points for the craft system, 

2490 and allowed us to go ahead and by in and get part of the Log 
249 1 Air route . 

2492 We didn't have enough money to buy any airplanes, 

2493 and besides that. Safair U.S.A. did not want to sell them. 

2494 They only wanted to lease them, and it was a perfect 

2495 opportunity for both of us. 

2496 fi Ware these fairly new aircraft? 

2497 A Yes, they were very low time. I think they had 

2498 less than 10,000 hours on them. 



UNCLASSIFIED 



707 



UNCLASSiFlEi) 



NAME : 
21*99 
2500 

250 1 
2502 
2503 
2504 
2505 
2506 
2507 
2508 
2509 
2510 

251 1 
2512 
2513 
2514 
2515 
2516 
2517 
2518 
25 19 
2520 
2521 
2522 
2523 



HIR072000 



PAGE 103 



2 Did they have any special features or functions 
othar than a normal L-100? 

A No. 

2 Could they be used for air drops? 

A Any L-100 could be. 

2 Would you know offhand the tail numbers of these 
aircraft ? 

A November 250, Sierra, Foxtrot SF, November 251 
Sierra Foxtrot, November 965. That is not the full number, 
though, and no SF after that. 

2 Is there any particular like time you have these 
aircraft and time that Safair has them? 

A No. 

2 You just work it out on an ad hoc basis? 

A No, it is a dry lease. They are under our of spec 

2 Put that m English for me. 

A We control them. They are our airplanes for all 
practical purposes. 

2 So any flights floun should be SAT flights? 

A Yas. 

2 By these aircraft? 

A Yes. 

2 And when did you lease them? 

A 250 and 251 in 1983, and 965 in 1984. 

2 To the present? 



mimiwj. 



708 



NAME: 
252U 
2525 
2526 
2527 
2528 
2529 
2530 
2531 
2532 
2533 
25314 
2535 
2536 
2537 
2538 
2539 
25140 
25141 
2Si«2 
2543 
2SUU 
2545 
25146 
25147 
25148 



HIR072000 



ONCUSSIFiEO 



PAGE lOM 



A Yes, ue still have them. 

2 Did these planes ever fly missions to the Roosevelt 
Roads Hospital in Puerto Rico? 

A I am sure. 

2 What for? 

A We have a Mac contract. Roosevelt Roads Hospital? 

2 Yes . 

A I don't know anything about a hospital. There is a 
Roosevelt Roads Naval Base ue fly to daily. 

2 And that is part of the Defense contract? 

A Yes. 

2 You told me then that the Defense contracts I 
thought were only domestic. 

A The Log Aix-2uik Trans is domestic and then there 
is a Mac contract short-range international. 
MR. BECKMAN: It is called overseas. 
BY MS. NAUGHTOH: 

2 When you say short, does that mean Central America^ 

A No, a long-range international there is a criteria 
you have to have an airplane that flies so many miles and 
carries so many tons, and it was designed around 707s, DC- 
8s, now DC-lOs, and 7i47s, and so there was--they just called 
the long-range international, it had to have that endurance 
capability . 

Short-range international is exactly that; it is 



mmmB 



709 



Mini I 

251(9 
2550 
2551 
2552 
2553 
2554 
2555 
2556 
2557 
2558 
2559 
2560 
2561 
2562 
2563 
25614 
2565 
2566 
2567 
2568 
2569 
2570 
2571 
2572 
2573 



«\1SSW .... 




HIR072000 1 llllj|_riV V » ■ P»GI 105 

for alroraft liX« 727 or L-100 or any alrorait that doam't 
n«o*ssarlly hava to ba long-laggad. 

fi I want to ask you about soma spaoliio flights than 
that thosa planas night hava flown. Tha first ona would ba 
January 11, 1986, from Gulf Port Blloxl to ^^^^^^^Hand 
than on ^^^^^^^^^^^kDo you know anything about that 
flight? 
X 
fi Yas. 

First of all, lat's start with this: uara Buzz 
Sawyar, Van Havan, Hilburn and Huff avar anployad by StI? 
A I don't know if Huff Is. 
S Lat's do Wilburn, Van Havan? 
A Ha was employad by us, yas. 

Q Do you know whathar or not thara was a January 1 1 , 
1986, flight? 

nx. BECKnAN: Is that Andy Huff? 
ns. NAUGHTOK: I don't hava a first nana. 
m. BZCKHAN: Ha was ona of tha paopla, ona of tha 
craw to Iran. 

THE WITNESS: Yas, ha was. 

To answar your quastion, whan was that, January of? 
BY ns. KAUGHTON: 
2 1 1th of 1986. 
A Of 1986, Sawyai, Van Havan, Hilburn? 



mmmm 



710 



2S7^ 

2575 
2576 
2577 
2578 
2579 
2580 
2581 
2582 
2583 
258(1 
2585 
2586 
2587 
2588 
2589 
2590 
2591 
2592 
2593 
25911 
2595 
2596 
2597 
2598 



HIR072000 



UNCLASSIFIED 



4Lt 



PAGE 106 



i Thas* aia all EAST pilots undar our of spaos 
oontractad by us. 

8 Contiactad by you. and did you avai usa any Saiali 
planas. tha thraa wa aza talKing about, that waza laasad ioz 
any oi tha HfAO flights? 

A I don't know. I don't know why wa wouldn't. It is 
antiraly possibla. 

e So ii thaza is a January 11, 1986, flight with this 
czaw ^^^^^^^^^^^nould thara ba any taason othar than tha 
NHAO flight? 

A I don't know. It could hava bean a chaztar. 
HR. BECKHAM: Excusa aa . Could wa go off tha 
racozd for a ninuta? 

[Discussion off tha zacord. ] 

MR. BECKHAN: Can wa go back on tha racozd now to 
clarify this point? 

THE WITNESS: Ha hava a flaat of aircraft. All ara 
capabla of flying anywhara in tha world whara wa hava 
insuranca covaraga, and I don't know that I would 
particularly axcluda ona aircraft over another fron any 
operation. 

BY HS. NAUGHTOK: 
S Let's start with tha crew. Froa January through 
March of 1986, the people whose naaes I laentioned earlier. 



UNCLASSIFI 



711 



2599 
2600 
2601 
2602 
2603 
260>4 
2605 
2606 
2607 
2608 
2609 
2610 
261 1 
2612 
2613 
261(4 
2615 
2616 
2617 
2618 
2619 
2620 
2621 
2622 
2623 



NII072000 



Mimm 



PAGE 107 




th«y u*ra on oonttaot to SAT? 
A Y«s. 

e Corract? So ii th«y flaw to Cantial Anatlca, it 
was ior an SAT flight, and not a Gadd contia lasupply 
mission? 

A Yas. 
2 Cortact? 
A Corract. 

fi So in that casa I would liKa to ask you to provida 
to tha connittea, and I will giva you tha spaciiio datas, oi 
what thasa flights wata. That would ba January 11. 1986, in 
tha louta I had mantionad aaxliar, BiloKl to^^^^^^^^ and 
Fabtuary 19 through 20-- 
HR. BECKMAN: Biloxi andj 
ns. KAUGHTOK: Yas . Than Fabruary 19 through 20, 

iiom Kew Orlaans , ^^^^^^^^^^^^^^^^^^^^^Hto 
niani . 

THE HITNESS: That was NHAO. 
BECKHAK: ^^^^^Hwhara 
ns. NAUGHTON: It was niami. 
Lat ma giva you tha third and I want to go back. 

1 986 ,^^^^^^^^^^^^^^^Bto 
BY ns. NAUGHTON: 
fi On that flight that you mantionad in Fabruary. is 
that tha tima you want tol 



^i\ 





?;cussifi[D 



712 



NAHK' 

262(4 

2625 

2626 

2627 

2628 

2629 

2630 

2631 

2632 

2633 

263(t 

2635 

2636 

2637 

2638 

2639 

26U0 

26M1 

26>42 

26U3 

26(t>( 

261(5 

26tt6 

2647 

26U8 



HZB072000 

I Y«S. 

fi 

A 

fi 

A 




"" ' 



08 






A 

fi 
A 




Why did It stop 
ru«l. 
Why 

That was as far as wa could gat. Thara Is no fual 
and wantad to 90 back to Miaal. and that uas 
light in routa, and so It stoppad^^^^^^|B^<' pick up iuel. 
e Did you pick up anything al^ 
No. 

Do you ranaaber whara you pickad up fual ln| 
At tha aliport. 

MR. BECKHAM: Pan, I an not claax. Wa hava glvan 
you, I am sura> tha flight logs. Ua hava given you avaty 
docunent wa could find. 

HS . KAUGHTOK: Yas . 

nR. BECKHAM: Relating to thasa flights. You want 
aota than wa hava givan you? 

HS. NAUGHTOM: Tha only thing I want to know is if 
thasa wara MHAO flights or othar charters. 

THE HITMESS: Yas. that one I know is KHAO flight 
bacausa I was on that one . 
BY HS. MAUGHTOM: 
fi Just as far as tha other two. 
A Tha other two we will be happy--well, I can 
guarantee you--the third one was 




yiUSSIFIED 



713 



HIK072000 



"WMSte 



PACK 109 




NAHE< 

26U9 fi Y«s. 

2650 A It is a NHAO flight. 

2651 2 And tha ilist ona 

2652 A I don't know. 

2653 C night ba , night not ba? 

265U A Might ba . might not ba . I will chacK on it. I will 

2655 just hava to chack on it. 

2656 MR. BCCKMAH: Lat ma naka a nota. 

2657 THE WITNESS: That was on January 11, I baliava . 

2658 . HR. BECKHAN: Yas . Is that right, Pam? 

2659 . — HS. KAUGHTOK: January 11, right. 

2660 HR. BECKHAM: January 11, 1986. 

2661 BY HS. KAUGHTOK: 

2662 2 Do you know of any visits or contacts by South 

2663 African officials to Costa Rica or Honduras regarding help 
26614 to the contras? 

2665 A Ko, I do not. 

2666 2 Do you know of a man named Colonel, it is Van Der 

2667 Hesthuizen? 

2668 A Ho, I do not. Tough names, aren't they? 

2669 2 Yes. I suppose ours are to them too. 

2670 Do you hava any knowledge of an SAT plane being 

2671 shot down In Zambia by tha Zamblan Air Force, which was 

2672 rumored? 

2673 A Shot down? 



UNCLASSm 



714 



ONCUSSIFIED 



NAME: HIR072000 -"■"•»»■-»•*# \* I I tS^lJ PAGE 110 

2671* 2 Forced d-oun . 

2675 MR. BECKHAN: Do you know when this plane was shot 

2676 or forced down? 

2677 BY ns. NAUGHTON: 

2678 e October of 1986? 

2679 A Just a minute. He were diverted into either I 

2680 thought it was Zaire. October of 1986, that would be about 

2681 right. 

2682 We came out of Angola to Johannesburg for a seat 

2683 check on one of our aircraft, but I don't remember whether--! 
268U thought it was Zaire. Maybe it was Zambia. 

2685 . MR. BECKHAN-. Diverted? 

2686 THE WITNESS: Just diverted, yes. They didn't have 

2687 overflight rights. They changed the airways and the crew 

2688 had to--what is Lusaka? That is Zaire, isn't it? 

2689 MR. BECKHAH: I think it is Zambia. 

2690 THE WITNESS: It is Zambia, yes. 

2691 MR. BECKMAN: You went to Zambia? 

2692 THE WITNESS: We were diverted into Lusaka. 

2693 MR. BECKHAN: For fuel or something? 

2694 THE WITNESS: No. They filed a flight plan that 

2695 took us down the coast of Angola across down into South 

2696 Africa, and then they changed the air traffic control, 

2697 changed the airways, and so the crew went over I guess 

2698 Zambia and then they said. Please come on down, so the crew 



^Ivji^m 




715 




NAME ■ 
2699 
2700 
270 1 
2702 
2703 
27014 
2705 
2706 
Z10-! 
2708 
2709 
27 10 
27 1 1 
2712 
27 1 3 
27 m 
2715 
2716 
27 17 
2718 
2719 
2720 
2721 
2722 
2723 



HIR072000 PAGE 1 1 1 

landed and tried to get the overflight squared auay , and 
they were actually arrested, and I had to go to--I came up 
here and worked with the State Department, and after two 
days they released there and they went on to Johannesburg. 
BY MS. NAUGHTON: 

2 Who did you work with at the State Department for 
that? 

A There is an office specifically for U.S. citizens 
that are in problems in other countries, but I worked with a 
woman who had the Zambian--! mean that was her-- 

2 Her desk? 

A Her area, yes. her desk, Robin something. 

2 Robin was her first name? 

A Her last name was Robin Davis or something of that 
nature, one of those dashed names. 

2 And did you get the crew out? 

A Yes. 

2 Why did they arrest them? 

A Well, six months earlier South Africa made a raid 
into Zambia, and attacked-- 

HR. BECKMAN: International Congress or something? 
THE WITNESS: Yes, which they thought was a 
stronghold, and this scared the Zarobians, and so every 
foreign aircraf t--this is not uncommon, any foreign 
registered airplane is routinely stopped and people are 




716 



NAME: HIR072000 



liNCUSSififl 



I 



PAGE 1 12 



2724 
2725 
2726 
2727 
2728 
2729 
2730 
273 1 
2732 
2733 



arrested and questioned and then released, and in our case 
that IS what it was. 

It took several days, but they just let them go. 

BY MS. NAUGHTON: 
2 Do you remember who was m the crew? 
A Yes. Basil Morns was the copilot. That was why 
we were kind of concerned. Our copilot was black, and often 
Africans are not kind to their own. They can be very 
brutal . 

The captain was--I forget right now. 



UNClASSIFIEfl 



I 



717 



2731 
2735 
2736 
2737 
2738 
2739 
27U0 
27U 1 
27K2 
27«43 
271414 
27145 
27146 
27147 
27148 
2749 
2750 
2751 
2752 
2753 
27514 
2755 
2756 
2757 
2758 




HIK072000 
XPTS THOHAS 
DCMH LYNCH 
12 : 30 PH. 

2 Anybody aIsa? Just a two nan craw? 

A No, It was a full craw, plus u« had a MiXa 
Connally was ■•chanio in our Angola projact. Ha was on tha 
flight as well. Ha had an eya inf action that wa wanted him 
to go down with the airplane and also get some medical help. 

There were actually four individuals on the flight. 

2 And it started in Angola? 

A Yes. 

2 What was its ultimate destination? 

A Johannesburg. 

2 What was the cargo? 

A There was no cargo. Might have been an engine on 
board for repair. 

2 Has there anything secret about this flight? 

A No. 

2 




718 



KAHK! 
2759 
2760 
2761 
2762 
2763 
27614 
2765 
2766 
2767 
2768 
2769 
2770 
2771 
2772 
2773 
277M 
2775 
2776 
2777 
2778 
2779 
2780 
2781 
2782 
2783 



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PiGi im 

In Angola? 

Y«S . 

Mho told you that? 

I i«ally don't laoall. 

Whan was that? 

Whan was I told that? 

Yes. 

AT least two years ago. 

Did SAT evez fly to the Kanina Ait Base in Zaire? 

Not that I am aware oi. 

Did you ever have any contact with Savlabi 

No. 

Either inside or outside of Angola? 

No. 

Did you evez supply them with supplier? 

No. 



A 

fi 
A 

fi 
A 

fi 

A 

fi 

A 

fi 
forces ? 

A 

fi 

A 

fi 

A 

Q 

A I don't know. 

fi Why would he be persona non grata there if he 
hadn't flown there before? 

A I am sorry? 

2 









719 



NAME 

278U 
2785 
2786 
2787 
2788 
2789 
2790 
2791 
2792 
2793 
27914 
2795 
2796 
2797 
2798 
2799 
2800 
280 1 
2802 
2803 
280(4 
2805 
2806 
2807 
2808 



HIR072000 



*^»® ,..: . 




fi I sa«i to th* 90v«rnii«nt? 

1 Right. 

Q I s«* what you ar« saying. 
BY MS. NAUGHTOK: 

MS. NAUGHTOH: In tarns oi tha cargo going into 
Angola and so forth, on you''^ diamond . diamond mining 
contract? 

A Yes. 

S Did you avaz hava any assistanca from U.S. 
raprasantativas of any agancy uhatsoavar in conducting thosa 
flights? 

A Ho. 

2 He mantlonad a Stata Dapartmant at ona time. 
Has that your only affiliation regarding any flights in and 
out of Africa? 

A Hith U.S. Govarnmant? 

fi Yes . 

A Yes. nayba wa flan soma AID flights in the past. 

I don't recall any but 

fi OKay. Has this business, did that come from what 
uas formerly done by Trans Am? 
A Yes. Same contract, 
fi I do want to, so you can set the record straight. 



m^mm 



720 



HIR072000 



UNCIASSIFIED 



PAGE 116 



NAME 

2809 ask about a coupla of articles, one appearing in the Post on 

2810 Dttcember 20. and why don't you tell me if you have ever had 

2811 any contracts inside South Africa involving oil spills as 

2812 reported in the Post? 

2813 HR. BECKMAH: December 20? 
28114 ns. NAUGHTON: Yes. 

2815 BY MS. NAUGHTON: 

2816 2 Inside South Africa? 

2817 A No. 

2818 2 Have you ever done any work for the Government of 

2819 South Africa, either in South Africa or outside of South 

2820 Africa? 

282 1 .A No. 

2822 2 Hera is the Post article if you would like to 

2823 look at it. 

282U KR. BECKHAN: Yes, please. 

2825 BY ns. NAUGHTON: 

2826 Then I would like to also look at the independent article, 

2827 which I guess I will paperclip the independent article. If 

2828 you could look through that. 

2829 THE HITHESS : What is the Independent? 

2830 HS. NAUGHTON: That is a good question. 

2831 There is it the Post article? 

2832 MR. BECKHAN: Thank you. 

2833 (Document handed to counsel for his inspection.) 



ONCl/ISSIFIED 



I 



721 



MIHSSW 



MAHE: HIR072000 II | f V Wl »*"* " ' "^ PAGE 117 

283U . THE WITNESS: Uhat do you want me to look at here? 

2835 US. NAUGHTON: You said you haven't seen it. I ara 

2836 providing it. Apparently there is a reference there to 

2837 contracts you had in South Africa, one involving oil spills. 

2838 . MR. BECKHAH: Did you mark this? 

2839 . THE WITNESS: I read this article. In fact, here 
28^0 is uhat ue thought got through taking 105 flights betueen 
28'4l Dulles and Bengala in one month is physically impossible. I 
28'42 remember this article. 

28'*3 BY HS. NAUGHTON: 

28'4i4 Q Was that because the codes were different? 

28>45 A Yes. I don't see anything about oil spills. 

28>«6 2 That is fine, your answer is on the record, so I 

28U7 gave you a copy of the article for your reference. 

28U8 Could you turn to the independent article please, and .a 

2849 can :ust get your answer on the record. 

2850 A Are we in here somewhere? 

2851 2 The details--is this the December 9 article? 

2852 A Yes. 

2853 2 Details three separate arms shipments to South 
285U Africa, and the question is, does SAT have anything to do 

2855 with those? 

2856 A Ho. 

2857 2 According to this, they are sending arms from 

2858 Honduras to South Africa. 



yNCUSSlFIED 



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MAME ■ 
2859 
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286 1 
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2870 

287 1 
2872 
2873 
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HIR072000 



it. 



UNCIASSIFIED 



PAGE 1 18 



Anyhow, if you want rae to read it, I will read 



The answer is no, we never shipped anything. As far as I 
know, we never have even shipped anything to South Africa. 
2 Okay. 

MR. BECKHAM: Certainly not have any business 
since, with them since the sanctions went into effect. 
THE WITNESS: No, no. 
BY MS. NAUGHTON: 
2 You are are aware of the Clark Amendment? 
A Yes. 

MR. BECKMAN: Tell me. 

MS. NAUGHTON: ^he Clark Amendment is similar to 
the Boland Amendment. It is an amendment dealing with the 
forces in Angola, and the government forces in Angola, and 
as of 1985, actually from '76 to '85, barred any assistance, 
covert or overt, to insurgent forces m Angola. 

And so I ask you, Mr. Langton, to your knowledge, have you 
or anyone in Southern Air Transport provided any assistance, 
covert or overt, direct or indirect, to insurgent forces in 
Angola? 

MR. BECKHAN: No, we have not. 
2 One other question on the leasing of the EL-IOOs 
in Zaire. Has any official of the American Government 
involved in that or helped out or assisted in that m any 



ItUSSM 



723 



NAME: 
28814 
2885 
2886 
2887 
2888 
2889 
2890 

289 1 
2892 
2893 
28914 
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2900 

290 1 
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2903 
29014 
2905 
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HIR072000 



Hay ? 



wssife 



PAGE 1 1 9 



A Mo. 

2 And any official of the South African Government? 
A No . 

(IS. NAUGHTON: Those are all the questions I 
have . 

BY MR. BUCK: 

2 Mr. Langton, I am wondering a few things. Would 
about a few things I want to get through quickly. One is. a 
wire transfer I believe on June 18 of '86. Do you lemeraber 
that? It is in the amount of «2'42,000? 

A No, I don't. 

2 You don't remember it? 

A Ho. 

2 See if I can refresh your recollection. It is 
$150,000 went to ACE and the *2,000 went to a flight 
account. Do you remember? Does that help any? 

A Doesn't help me. 

2 I think we can leave that alone then. 

A Okay. 

2 Did Mr. Gadd give you instructions to set up the 
ACE account? 

A Yes sir. 

2 You pass that on to Mr. Mason? 

A Yes sir . 



vmmfi 



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724 



ilNCUSSifiEfl 



NAME ■■ 
2909 
29 10 

291 1 
2912 
29 1 3 
29 m 
29 IS 
2916 
2917 
2918 
2919 
2920 

292 1 
2922 
2923 
2924 
2925 
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2927 
2928 
2929 
2930 
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2932 
2933 



Did he give you money before you set up that ACE 



No. 



Did you have any money to set up that ACE 



HIR072000 PAGE 120 

S 
account? 

A 

2 
account? 

A Yes, ue didn't know what it would take to set it 
up and I think Bob, I think he put ♦S or ♦U.OOO in to open 
the account. I don't recall. 

S Okay. Who owned ACE? 

A It is a bare share company. 

8 Did Southern Air Transport own it? 

A No. 

Q Does Mr. Gadd own it? 

A As I said, it is really a bank account and the 
ownership really laid--I don't know. 

2 From January oi '86 to November of '86, did you 
hear of fir. North's involvement with the resupply operation 
for contras, this private funding organization? 

A No. 

2 Hr . Poindexti^r? 

A Ho. 

Q Hr . HcFarlane? 

A Ko. 

2 Did anyone ever tell you who was raising money in 
the private sector? 







725 



KAHI 

293<4 
2935 
2936 
2937 
2938 
2939 
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2941 
29t42 
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HIR072000 



UNCUssinti 



PAGE 121 



A No. is Z said, I thought Ganatal Sacord, that 
Mas Mhat ha was out and about. 

fi So ha Mas raising aonay and than also diracting 
opaiatlons? 

ft As iar as I KnaH, yas. 

S Did you faal that tha raising nonay want bayond 
Ganaral Sacord? Has thara anybody abova him? 

A I don't knoH. I navar avan askad. I assuma 
thara Mara planty of paopla around tha Morld that Maie 
raady. Milling and abla to donata monay. 

fi Did monay iloM through SAT accounts to pay 
salarlas and axpansas of Individuals that Mara statlonad 
doMn In Cantral Amarica? I am talking but tha pilots 
spaciilcally > and soma oi tha oparations? 

A Hot that I am aMara of. 

fi Did Hr . Gadd avar idantlfy Mho ha brokarad ioz? 

A You maan Mho his customar Mas? 

fi Right. 

A No. 

fi Did you avar gat tha faallng that tha customars 
flights and tha ACE account Mara tha sama? 

A I don't avan--mayba you can raphrasa that? 

fi I am trying to gat a faal for — ha obviously 
raprasantad savaral dlffarant customars. Did you aver gat a 
faallng ha Mas raprasantlng a iaM of thasa customars or that 



for 







726 



KANE 
2959 
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HIR072000 



yNCUSSlHED 



PAGE 122 



It was one customer for several different activities? 

A I never got that impression, no. 

MR. BUCK: That is all the questions I have. 
BY HS . KAUGHTON: 

S I would like to go to one other area. 

Along with what Kr . Buck asked, were you yourself ever 
asked to contribute to either contra resupply mission or any 
political action committee? 

A nyself personally? 

9 Yes . 

A Mo. 

Q Was the company? 

A Not that I an aware of . 

Q And we were discussing yesterday, as you recall, 
there was an invoice I showed you regarding a contract for 
Mr. Gadd's personal services from Hay of '86 for about a 
period of five months. Do you recall that? 

A Yes . 

Q What services was Mr. Gadd to perforn for that 



contract? 
A 
fi 
A 



Consulting services. 

What kind of consulting? 

Hx . Gadd has DOD contracts that he performs 
routinely. We have a contract that I felt his services, 
his knowledge, would be 4)eneficial and act as our Washington 



UNeUiSSiFlEO 



727 



NAME : 
298U 
2985 
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2987 
2988 
2989 
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299 1 
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2999 
3000 

300 1 
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3003 
3004 
3005 
3006 
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3008 




HIR072000 "*' ' PAGE 123 

office liaison office, and that is what I hired him fot--his 
office, his corapany. 

2 Were you aware at that tirae that Mr. Gadd was 
going to be terminated from Secord's operations m Central 
America? 

A Not at the tirae that I made the agreement with 



him , no 
2 
A 
2 



So that did not influence you? 
It didn't have anything to do with it. 
I want to ask you some questions regarding that 
contract, and you indicated yesterday that that was 
classified material. Can you tell us what compartment 
classification? 

A I am sorry? 

2 Can you tell us what compartment or 
classification it required? 

HR. BECKHAN: I think top secret, or secret or 
confidential. What is the classification? 

THE WITNESS: I think, I don't know for sure, I 
think it is secret. 

MS. NAUGHTON: Mr. Beck, do you have clearances? 
HR. BECKHAH: No. 

MS. KAUGHTOH: What I an going to do, I understand 
Mr. Buck doesn't yet either. The reporters, however, are 
cleared. What I am going to do at this point is treat it 



mmwiB 



728 



NAME : 
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3010 
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30 12 
30 13 
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PAGE 124 



like a grand jury session. I am going to ask about this 
contract of Hr . Langton. He is free to consult with you 
beiore and after every question, but unfortunately, no one 
without clearance can hear the answers. 

riR. BECKMAN: I understand, but I think we have an 
even more serious problem that maybe Mr. Langton has too. 
Could ue go off the record? 

MS. NAUGHTON: All right. 
(Discussion off the record). 

MS. NAUGHTON: Back on the record, and since this 
does involve some sort of classified material, what we wish 
to do is Hr . Langton. through his attorney, has agreed to 
provide us with the Defense Department contract number and 
the contracting officer whom this committee can contact for 
information, and for any clearances for any further 
testimony on this area. 

Mr. Beckman, when do you think you will get that to us? 

MR. BECKMAN: i don't know when. I can get that to 
then early next week. 

THE WITNESS: Host certainly, early next week. 

MR. BECKMAN: Hill that be satisfactory? 

HS. NAUGHTON: That is fine. 

THE WITNESS: He have to get back to the offices 



though . 



HS. NAUGHTON: If I am not in my office that will 



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yilCLASSlFIED 



PAGE 125 



Okay . 

Hr . Buck, do you have anything else? 

HR. BUCK: Ko . 

HS . NAUGHTOK: That concludes the deposition. 
Thank you. 
(Whereupon, at 12:55 p.m., the deposition was adjourned.) 



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Ufim^ffiffT 



^^^\-^-\^^c"^- 



DEPOSITION OF JOHN C. LAWN 



Thursday, August 20, 1987 




U.S. House of Representatives, 

Select Committee to Investigate Covert 

Arms Transactions with Iran, 
Washington, D.C. 

The Committee met, pursuant to call, at 10:00 a.m., 
in Room 2203, Rayburn House Office Building, with Pamela 
Naughton, House Select Committee, presiding. 

Present: On behalf of the House Select Committee: 
Pamela Naughton, Robert W. Genzman and Robert A. Bermingham. 

On behalf of the Senate Select Committee: Hank Flynn 
and Tim Woodcock. 

On behalf of the Witness: Dennis Hoffman, Chief 
Counsel, Drug Enforcement Administration. 



Panially Declassined/Released nn l^=0»'0 88 
under otivisions ot E 12356 
by K Johnson. National Security Council 



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MR. LANKFORD: My name is Tom Lank ford. I am 
a Notary Public for the District of Columbia. Raise your 
right hand. 
Whereupon, 

JOHN C. LAWN 
having been first duly sworn, was called as a witness herein, 
and was examined and testified as follows: 

MS. NAUGHTON: My name is Pamela Naughton. I am 
staff counsel of the House Select Committee to Investigate 
Covert Arms Transactions with Iran. I would ask people 
around the room to please identify themselves. 

MR. GENZMAN: Robert W. Genzman, the House 
Committee Minority Counsel. 

MR. BERMINGHAM: Robert A. Bermingham. I am an 
investigator with the House Select. 

MR. HOFFMAN: Dennis F. Hoffman, Chief Counsel, 
Irug Enforcement Administration. 

THE WITNESS: John C. Lawn, L-A-W-N, Administrator 
of the Drug Enforcement Administration. 

MS. NAUGHTON: Let the record reflect we will be 
joined shortly by Tim Woodcock, Associate Counsel of the 
Senate Select Committee. 

Mr. Lawn, are you personally represented here 
today by counsel? 

THE WITNESS: I am represented by Dennis Hoffman, 



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yes, who is the Chief Counsel of the Drug Enforcement 
AdiTunistration. Dennis has been asked to come because of 
his responsibility to respond to all of the requests for 
files and for information and he is most knowledgeable 
about that information that is in the DEA file system. 

MS. NAUGHTON: Okay. According to House rules, 
you can only be -- let the record reflect Mr. Woodcock 
and Mr. Hank Flynn, an investigator of the Senate Select 
Committee, have arrived. 

Mr. Lawn, is it your decision or pleasure today, 
then, to be represented by Mr. Hoffman? 

THE WITNESS: Yes. Mr. Hoffman is representing 
me. 

MS. NAUGHTON: Okay. Fine. If we could get 
some background here first to start off with, could you tell 
us when you began in law enforcement? 

MR. HOFFMAN: Before we start, I would like the 
record to reflect prior to the start of the deposition we 
did produce to you at your request a December 9, 1986 memo 




f ron^^^^^^^^^^H to Mr. Lawn, captioned, "DEA in Support 
of U.S. Hostage Situation." 

This document was not produced to the Congress 
before this date because of a request from independent 
counsel, Walsh, that it not be produced. Independent 
counsel has now waived nonoroduction of that document, and 



WiSi 



734 



bap 




1 we have made it available today. 

2 MS. NAUGHTON: Thank you. 

3 EXAMINATION ON BEHALF OF THE HOUSE SELECT COMMITTEE 

4 BY MS. NAUGHTON: 

5 Q Could you give us background, then, on your 

6 law enforcement experience then? 

7 A Certainly. I became a special agent of the 

8 Federal Bureau of Investigation in July, 1967. During the 

9 course of my FBI career, I served in Savannah, Georgia; 

10 Monterey, California; San Francisco, California; Washington, 

11 D.C.; Kansas City, Missouri; and San Antonio, Texas. 

12 In April of 1982, the Attorney General designated 

13 me as acting Deputy Administrator of the Drug Enforcement 

14 Administration in Washington, D.C., and in July of 1985, 

15 I became the Administrator of the Drug Enforcement 

16 Administration. 

17 Q In what month? July? 

18 A July of 1985. 

19 Q And who was the Administrator from, let's say, 

20 January 1985 until you assumed the post? 

21 A My predecessor was Francis Mullen, Jr. Mr. 

22 Mullen retired as the Administrator of the Drug Enforcement 

23 Administration in February, 1985. I was named as the 

24 Acting Administrator until such time as I was confirmed 

25 by the Senate. 




735 



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We are going to start off discussing the activities 
"^^■VT -a I 




of^^^^^^^^^and^^^B i^egarding the hostages held in 
Lebanon and perhaps go into a couple of other areas. 

Were you faroiliar with an organization called 
the Hostage Location Task Force? 
A Yes, I was. 

Q Could you tell us how that came to your attention? 
A The Hostage Locator Task Force was formed in 1985 
and It was formed from the Terrorist Incident Task Force-- 
workmg group. I'm sorry. It was formed from the 
Terrorist Incident Working Group. 

The purpose of the Hostage Locator Task Force 
was to have all government agencies furnish intelligence 
information made available to them or available to them on 
the potential location of the -- our ajnerican hostages 
in Lebanon, most specifically the location of Mr. William 
Buckley, who was a government employee. 

Q And what precipitated the DEA's participation m 
this? In other words, whose idea was it and how did it 
come to your attention? 

A The initial contact of the DEA was an informal 
meeting between an agent of the Drug Enforcement 
Administration ,^^^^^^^^V Special 

and a neighbor of his, Mr. Ed Hickey. Mr. Hickey 
was then as_-i.gned to the White House. Mr. Hickey asked. 





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m^^^ 





if DEA could be in a position to furnish intelligence 
infonnation on the potential location of the hostages in 
Lebanon. 

^^^^^^^^^^^^^1 remembering that DEA had an office 
Lebanon -- our office in Lebanon closed in 1975 after the 
kidnap of our agent, the agent who is assigned in Lebanon. 
But the informants who were involved at that time 
continued to be handled! 
did not have any updated information on informant activity 
in Lebanon, approached another agent ,^^^^^^^^^^^^^^^H who 
was more familiar with overseas operations. 

ind^^^^^Bthen met with Mr. Hickey 
in the White House in January of 1985 to discuss the 
potential for us to ask the informants currently furnishing 
us with drug information if they could also provide for 
us information on the hostages. 

Q But what I aia asking about is how much of this 
did you know was going on. In other words, that they had 
been contacted by Hickey and asked these questions? 

A I was certainly aware they were contacted. I 
was aware that they were -- they met with Mr. Hickey. 
They subsequently, after their meeting, after the meeting 
of^^^^^^^^^^^^lwith Mr. Hickey, they came back to DEA 
headquarters and met with Mr. Frank Monastero, who was 
Chief of Operations for DEA and with his deputy, Mr. 



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David Westracle, to determine whether DEA would approve our 
supplementing our drug intelligence with trying to furnish 
information on the location of the hostages. This was 
approved by the Administrator. 

I was aware that it was approved by the 
Administrator. And we initiated what we called an SEO, a 
Special Enforcement Operation, targeted at drug intelligence 
coming out of Lebanon, and it was from this SEO that we 
hoped to task the same informants with furnishing us whatever 
information they could develop on the location of the 
hostages in general, but specifically on Mr. Bill Buckley. 

Q So — now this SEO is that 471? 

A That is SEO 471. We then, in initiating the 
operation, then put $20,000, DEA funding, into the 
initiation of this SEO. 

Q Now, you say this was targeted at drug intelligence 
that you would obtain from sources in and around Lebanon. 
What I am asking is if a source gave only drug information, 
would it come from that account or would it come from 
some other account that was already established? 

A At this point we didn't know. We didn't know 
whether our sources were in a position to furnish any 
mformatic ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 

le SEO 
was merely to determine whether or not we could be an 




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8 

effective mechanism in developing positive information 

on the location of the hostages. So this was just a query 

by DEA headquarters to determine whether informants, 

most fcuniliar with Lebanon, could be in a position to help, 

nothing more. 

Q Was that account established with your approval? 

A The account was established with my tacit 
approval. I was the deputy. Mr. Mullen was the one 
who initiated the SEO, but I certainly was aware that it 
was initiated. 

Q Do you know whether or not^^^^^^^^^^Hmet 
with Mr. Mullen over there? 

A No. ^^^^^^^^^^Hdid not meet with Mr. Mullen 
to my knowledge. The meeting that was held to initiate 
the SEO was a meeting between Frank Monastero and Bud 
Mullen. 

Q If we can get this straight, then, from the 
outset, from the beginning of the activities, then let's 
say in January, February of 1985, through November 1986, 
who exactly reported to you about the activities of 




A Okay. The SEO was established and at the same 
time we had assigned Mr. Abraham Azzam, A-Z-Z-A-M, as our 
point of contact with the Hostage Locator Task Force. Mr. 
Azzam was tasked with Toinmg the Hostage Locator Task 



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Force. And this was based upon a memo that we received, 
that all agencies received from the White House, a memo 
dated February, 1985, indicating that this Hostage 
Locator Task Force was being formed. So Mr. Azzam was 
then our representative to the Hostage Locator Task 
Force. 

Mr. Azzam himself was familiar with Lebanon 
and was familiar with some of the informants that we 
would be contacting in this SEO, and the reporting 
procedure was f or^^^^^^^^^^^^^fto be contact with 
Azzam so that whatever information was developed, Azzeim 
was sharing with the HLTF. 

In May or June of 1985, because of lack of com- 
munication among the agent personnel, I believe I received 
a phone call. I don't recall a phone call, but as well as 
we can construct it, I received a phone call from Colonel 
North telling me that there was a lack of cohesiveness 
between^^^^^^^^^^^^^|and Azzam; that Azzam was being 
not cooperative in our actively pursuing the location of 
the hostages, and asked if^^^^^^^H could be the point of 
contact for DEA. 

Again this was May or June. At that point I 
called^^^H^H and told^^^^^^Bhe would be the point 
of contact with the -- with Oliver North and the National 
Security Council, because Abe was given a new assignment 



HD^^SecrI 




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10 

with a new deputy coming into DEA. At that point 
point of contact was ostensibly me. I would contact 

Ion a periodic basis, ask him to come to my office 
to give me a status report on whether we were having any 
success or no success, and I met with^^^^^^H perhaps on 
five occasions to get an update as to whether we were 
having any success or lack of success in locating 
hostages in Lebanon. 

Q Did you ever meet with^^^^^^^^lon this 
subject? 

A At this time -- I never met separately. I did 
not meet separately with^^^^^^^^^H X don't think I 
met with^^^^^^^^^fat all on this operation. 

Q All right. And while Mr. Azzam was in it, 
until about June of 1985, did you meet with him on this 
sub:ject? 

A I met with Abe -- met with -- I talked with Abe 
about our efforts in Lebanon in May of 1985 and this 
conversation in May of 1985 had to do with some information 
that was developed by one of the sources in Lebanon which 
was ostensibly some proof that spies in Lebanon had located 
Buckley, and that Buckley could be found and Buckley could 
be successfully taken out of Lebanon. And it was because 
of this meeting and the confusion that this meeting 
engendered that I believe I received that call to cut 



mk 




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In the 




Abe Azzain out of the reporting plan. 

Q If we can go back, then, and take it 
chronologically -- 

A Sure. 

Q Now, please correct me if I am wrong, 
initial conception, the case was thati 
and Azzam were going to be working to gather information 
for the Hostage Location Task Force, of which Azzam was 
the DEA representative. Is that correct? 
■^ A Right. 

Q It was not a separate operation in your mind. 

A That IS right. 

Q Did you receive any call from Ed Hickey at the 
White House on or around March of 1985 regarding this? 

A. I don't recall a call from Mr. Hickey. 

Q In my notes of your interview, I have that you 
received a call in March of 1985 from Ed Hickey regarding 
whether or not Agent^^^Hcould be made available to the 
White House for this operation. Do you recall that? 

A I don't recall. 

Q You had told us e arlie r Hickey had called you 
about a personal problem of^^^^^^Band this was the 

second time. 

A Well, he had called Bud Mullen about the other 
problem, but that was prior to Bud ' s recrement . No. 



\J^»^ffiEET. 



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S'fifti^SRBJ' 



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I'm sorry. I don't recall that call. 

Q This is just what my notes say, and please tell 
me if you recall it or you do not. 

You stated, according to my notes, that Hickey 
had told you he anticipated this would be just a one or 
two tune meeting or that might have been your understanding 
from your conversation, and then later Hickey called you 
to request that Agent^^^^^^^^^^^Halso participate in 
this. 

A I don't recall, but if the call was received, it 
would not have been in March or April because! 

[and Hickey and^^^^^^^^^|had met several times 
in January and February and it just doesn't seera logical 
that Hickey would call me in March to ask if they could 
meet because they had already met several times. 

Q Do you recall discussing with Mr. Hickey at all 

the o^^^^^^^^^^^^^^^l ^^ ^^y 

A No, I don't. 

Q Do you recall^^^^^^^^^^H telling you in or around 
March of 1985 that he had met with Oliver North on this 
issue and North had asked him to do several things? 

A I know now that at a February meeting at the 







White House — this was a meeting with 

General- C»lf l a ld, I believe, and Poindexter, 
mention was made that the agents ' should meet Colonel North. 



WKt^W?*.^^ 



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Colonel North was not available at that time. 
But in late February North did inviteJ 
over to the White House Mess for breakfast, where they 
discussed the potential for SEO providing any information 
at all on the hostages, but specifically on Bill Buckley. 

Q You mentioned that you know that now. How as 
it that you came to know that now? 

A Well, we have -- m May of 1986 -- in May of 1987 
we had asked two of our senior personnel to conduct 
background information on what had actually transpired 
between^^^^^^^^^^^^^^fand Oliver North, exactly where 
the agents involved with it, and it is as a result of 
those interviews that were conducted by our two senior 
personnel that we now know about these other meetings. 

Q All right. Was that for the purpose of gathering 
information to report to you? 

A That was -- the purpose of that was to determine 
whether administrative action will be appropriate against 
those individuals involved in this hostage location 
intelligence probe, if they were not furnishing me all the 
information with which DEA was involved. 

Q All right. Is this in the nature, then, of sort 
of an internal affairs investigation? 

A Administrative inquiry, yes, internal affairs, 
if you will, OPR. We had to clear it with the special 



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presecutor so that we won't ]aundice any ongoing investigation 
with which they were involved because when we conduct an 
internal inquiry, we have to indicate to the personnel 
whether it is an administrative inquiry or a criminal 
inquiry. So in this case we spoke with representatives 
of the special prosecutor, told him we were going to go 
forward with this inquiry, and it is based upon this, that 
I now know about the given chronology of meetings. 

Q So these interviews included interviews of 




A Yes. 

Q If you could then in response to my questions, 
if you could specify to us the state of your knowledge 
that was contemporaneous with these events happening as 
opposed to what you have subsequently learned so we 
keep it straight in the deposition. 

A Sure. 

Q I don't want to impart knowledge to you that you 
only recently learned. 

A Do you want me to go through chronologically 
what I knew? Would that make it easy? 

Q That is what I thought we had been doing. 

A I was trying to fill in some other activity. Okay. 

Q Okay. 

A January of 1985 I was aware that we were going 
to initiate an S EP 4 71 ba sed upon the recommendation of 



I 



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Chief of Operations, Frank Monastero, with Administrator 
Bud Mullen. I certainly was aware we put 520,000 into 
that MEO. That is normal procedure. I was aware that 
m February the agents made their initial contact with 
one major source and subsequently a second source who 
were to enter Lebanon and to return with some preliminary 
analysis . 

Q Okay. If I can stop you there, then. 

A Okay. 

Q The person to whom you have referred to as the 
major source, we have been calling source one and not usinq 
any names so that we know who we are talking about. 

A Fine. 

Q Do you know source one? 

A No. 

Q Okay. Do you happen to know whose source he was' 
In other words, was it Mr. Azzam's source oi 
source? Did you have a clear indication either way? 

A No, but I know -- I am not sure I knew -- that 
both Mr. Azzam and ^^^^^^^^^H had worked with this 
source at some time during the ir».cjkr£«si«..^ Who -d««vs« loped the 
source, I don't know to this day. 

Q Did anybody report to you after this February 
meeting that they had with this source? 




No. 




* 



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Q So when you -- 

A Let me just throw in another -- on the 7th of 
February, 1985, we had an agent kidnapped in Guadalajara, 
Mexico. The entire focus of DEA worldwide was ongoing 
in Guadalajara, Mexico, until the body was recovered on 
March 12. So that is not unusual for a SEO to be initiated 
and for me not to get a daily briefing on the status of an 
SEO. 

Q Right. What I am asking is did you have contem- 
poraneous knowledge m February of 1985 that this meeting 
had either occurred or was -- 

A No, I did not. 

Q So you never received a report about that meeting? 

A No, I did not. 

Q When is it, then, that you first learned that 
they met in February of 1985 with the source? 

A I don't think I ever had direct information 
that they met other than the fact Mr. Monastero in .March 
told me that several of the sources who had been contacted 

land were ready to be debriefed on whatever 
information they developed and that he was going to contact 
Mr. Azzam, who was out of the country attending an 
international drug enforcement meeting somewhere in Europe, 
I believe, to ask Azzam^^^^^^^^^^^^^Hto meet with these 
sources to get whatever information they could develop on 







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17 

the hostage location. Monastero and I did talk about 
diverting Azzam's trip for this purpose. 

Q Okay. I gather you gave your approval? 

A Yes. 

Q I have sort of a general question at this point, 
e 1 the ^^^^^^^^^^H^^^^^^^^^H would on 
this account and for this purpose, would they seek 
permission from you? 

A No. 

Q Do you know whether or not they would seek 
permission from anyone in your office? 

A Absolutely. Not from the administrator's office, 
but certainly from operations. They would seek approval 
from their djnmediate superior, who at this point was 

^ and they would prepare 

vouchers. 

They would do what we normally do in the course 
of our activities. 

Q Wou Id ^^^^^^^^|H report to you at all? 

A No. 

Q The cutoff date is somewhere around July of 1985 
when they ceased using DEA funds to fund their operational 
expenses. Would they then, to your knowledge, report to 
of their travel olans and so forth? 





A I believe when I told North that Azzam would be 



UAICLASSIfjEd, 



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UM)\9S(FIEBT 



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,'19 





assigned to a different function that they could deal 
directly with^^^^^^K I had asked John McKernan, who was 
my Executive Assistant at the time, that in my absence if 
[were to ask authority to travel for the SEO, that 
McKernan should grant that authority, and that was in the 
May, June, July time frame. 

Q So let's say after June of 1985 wher 
needed to travel or^^^^^^^^M needed to travel, would 
they then seek your permission or that of Mr. McKernan? 

A If I were there ,^^^^^^Hwould ask my permission. 
If I were not there, he would seek McKernan' s permission. 

Q And the times you can recall where he did seek 
your permission, did he tell you what the trips were for? 

In other words, would you discuss it in any 
kind of detail? 

A General terms. We are going to meet the informants 
in New York. The informant has just come out of Lebanon with 
some information. We need to travel, so forth. 

Q Did he ever report to you any operational plans? 

A None. 

Q And when^^^^^^^Bhad to travel after this June 
1985 time period, would^^^^^^^^^H ask you for permission 
to travel? 





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20 

A I was unaware of when^^^^^^was traveling in 
point of fact, after June of 1985 I was unaware when 
was traveling. 

Q All right. Now you have got me confused. 

A Well, in June, I guess I was involved in seme 
travel and I don't know what travel I was involved with, 
but I had told Mr. McKernan if^^^^^Hhad to travel 
and I was not available, McKernan was to approve it. After 
that^m^^^H did not come to me for authority to travel. 
.Mr. McKernan retired m November of 1985, so he certainly 
didn't come to McKernan for authority to travel. 

Q All right. So is your testimony that after 
June of 1985 you were not aware of eithei 
Itravel? 

A Right. That is right. Is that clear now? 

Q Yes. 

A I know it is difficult because as a matter of 
fact Dennis followed up with John McKernan and asked 
McKernan did he recall when he authorized travel, and 
John didn't recall. He remembered the conversation when 
I gave him authority to give^^^^^^Bauthority . He didn't 
recall how long he exercised that authority. 

Q Did he recall it at all, ever authorizing? 

A He recalled my giving him the authority, but 
I don't believe he recalled ever using that authority. 





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Q Let the record reflect the witness has consulted 
with counsel prior to answering that question. 

Now, at some point in the spring of 1985, were 
you aware that Oliver North was either part of the task force 
or at least had the account, for the hostages and was 
involved in this effort? 

A In April or probably iMay of 1985 -- it was May of 
1985 -- I went into Mr. Azzam's office and Mr. Azzam 
showed me 





Mr. Azzam told me that he was skepticall 

land that he had discussed 
this evidence, if you will, with Mr. North at the White 
House and had suggested to Colonel North that Colonel 
North contact the CIA because the CIA also -- was also 
skeptical! 
that was important was becausel 

Iwas necessary to bribe individuals in Lebanon 
to assit in getting Buckley out. 

The FBI^^^^^^^^^BCIA believed that 

^^^ Mr. Azzam 
Did Azzam tell you that? 







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A 
Q 
A 



URCCASSK^T 



Yes. 

That both the FBI and -- 
And CIA did not believe tha 



22 




were 



bonafide and that North was upset with Mr. Azzam because 
Azzam was holding up what could be a good opportunity 
to effect the release of Mr. Buckley. 

Q What, if anything, did you tell Azzam to do? 

A I agreed with Mr. Azzcun's position that we should 
not move forward and continue an operation or ask for 
financial support for an operation if we were not satisfied 
that what we had received was any good evidence that 
Buckley had been located. 

In drug law enforcement, special agents talk about 
not fronting the money and Abe said that this was clearly 
not good information, and that we should not encourage 
the CIA to produce the money to further this part of our 
effort because the information was not valid. Instead, 
Abe had recommended that the informant be given specific 
questions to ask to the individuals in Lebanon, questions 
relating to the family of Mr. Buckley, Nicaraguan names, 
something that only Buckley would know before the operation 
moved forward and Mr. Azzam told me at that time that 
North was clearly unhappy with Azzajn's decision. 

Q Now was this the first you were aware that Oliver 
North had any involvement in this operation? 



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A T would say, yes. 

Q If we could digress for a minute, at around the 
same time did you have any experiences with Oliver North 
concerning any drug cases, specifically regarding the 
shipment of cocaine from Colombia through Nicaragua? 

A There was a meeting held in the White House 
about an ongoing investigation that we had involving cocaine 
trafficking from Colombia through Managua, Nicaragua into 
the United States involving a pilot defendant, now deceased, 
and we were attempting to develop that information or to 
develop that investigation. 

The participant from DEA headquarters who conducted 
that briefing when he returned from the White House indicated 
to me that there was one person at the briefing who 
expressed some concern over that investigation continuing. 
But that is the only reference that we have to North involv- 
ing himself in any DEA investigation. 

Q Okay. The DEA agent, after briefing the White 
House--was Oliver North part of that briefing? 

A Oliver North was part of that briefing. 

Q And your agent reported back to you that — 

A Right. He didn't report back to me. He 
returned to brief his superior, to brief Dave Westrade on 
the meeting. I said, "How did the meeting go?" He said 



the briefing went fine, but he 






ords with 



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24 

somebody at the briefing, Colonel North, about the jeopardy 
we might be putting our informant in by sending the 
informant back into Nicaragua to pick up the investigation. 

Q So North's concern was -- were that the informant 
would be in peril if he went in? 

A I am not sure what his concerns were at the time 
because quite frankly, it didn't matter what his concerns 
were. We continued our investigation nonetheless, but 
as I say, I do recall that conversation with our 
individual, and I received subsequent calls from several 
other individuals expressing their concern about the 
investigation continuing. 

Investigators call investigative shots. "l don't 
depend on parliamentary procedure for conducting an 
investigations . 

Q Did North request a briefing? 

A No. 

Q Who requested a briefing? 

A I aim sorry. I don't know. 

Q And did the passing through of these drugs through 
Nicaragua involve anyone connected with the Sandinista 
Government? 

A We had sent an aircraft back to Managua during 
this investigation, which we had equipped with cameras and 
the cameras recorded the loading of cocaine on the aircraft 



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by individuals who were in uniform. 

Q And would that be the uniform represented by the 
government of Nicaragua? 

A Could be. Could be. We assume that it was. 
One of the individuals identified in the photograph, I 
believe, was a Fredricko Vaughn, who was an under secretary 
or former minister. At a prior -- this goes back a while -- 
but at a prior meeting between the informant and 
individuals in Managua, the informant flew into Managua, 
landed at what he believed to be a secure part of the 
facility pro',:ected by the military. It appeared protected 
by the military, and I believe that was a trial run. 

I believe the informant was to fly in to see 
where he would land the aircraft when at a future date he 
would be taking cocain from Colombia. As he took off — he 
came under ground fire. The military shot him down. 
He was arrested and within a day was released based upon 
the personal intervention of Fredericko Vaughn. 

Q Because presumably Vaughn thought he was part 
of this conspiracy to move the drugs. 

A Oh, Vaughn knew that the informant was part of 
the conspiracy, certainly. 

Q All right. Was North briefed then on this facet 
of the operation? 

A On which facet? 



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Q In other words, the photographs showing that 
the military people or people in military uniforms were 
loading the cocain and so forth? 

A Yes, yes. North was part of that group who saw 
the photographs which were photographs, I believe, that 
were circulated at the meeting by a member of the Intelligence 
Coinrai ttee. 

Q What you told us last time is that when the DEA 
representatives arrived to do the briefing on the operation 
that North actually had the photographs already 
Do you recall that? 

A That could be, yes. 

Q All right. 

A We did not bring the photographs to the meeting 
that is right. 






:he photographs were already available to the people who 
were briefed. 

Q All right. So North already had the photographs 




A Had them, certainly had them during the meeting. 
Whether he had them prior to the meeting, that is speculation 
I don't know that to be a fact. 

Q Was information of this operation also leaked at 
some point to the press, specifically the Miami Herald? 



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A 
A 

A 



Information was leaded to the press. 
Do you know the source of that leak? 
Do I know the source? No, I don't. 



27 




Q Do you have an opinion as to who the source was 
or did you at that time? 

A I may have an opinion, but I am not going to share 
that opinion. 

Q All right. What was your reaction when you 
found out that North had received photographs of that 
operatior 

A North was part of the briefing. I was disturbed 
that anyone would share information on a very sensitive 
investigation, ostensibly involving the lives of DEA agents 
or people cooperating with DEA. I was upset with any of a 
number of people for being or becoming aware of our operation. 

Q Did you or any of your people make this known 
to North, this concern of yours? 

A I did not. I am sorry. I did not. Someone 
in our organization did, and I don't recall who specifically 
did because I believe it was Frank Monastero who told me 
that -- and this was perhaps several weeks later -- that 
North told DEA -- whom he told, I don't know -- that he 
was not the one who leaked the information. 

Q So supposedly Mr. Monastero had approached the 
subject with Colonel North. 



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A Either Mr. Monastero or someone else, perhaps 
the briefer at the initial White House meeting. I don't 
know who. But Frank -- Mr. Monastero, was the one who 
told me that North said that he was not the source of the 
leak. 

Q Did you subsequently receive any information 
regarding North's use of these photographs in any fund- 
raising activities for the contras in Nicaragua? 



No, I did not. 

Is that a closed case now? 

Yes. The investigation is closed. 

Is the informant still living? 

No. The informant is dead. The informant was 



A 

Q 

A 

Q 

A 
killed. 

Q Can you tell us when? 

A I don't know the exact date. The informant was 
a defendant informant, was tried in Louisiana, was acquitted 
and was on probation at the time he was shot and killed 
by individuals hired by the so-called Madaine (ph.) Cartel, 
the Colombian traffickers, that subsequently were arrested 
in Louisiana, I think. Baton Rouge, and were recently 
acquitted of the crime. 

Q Were they acquitted for killing him because he 
was an informant in this particular case you just described? 

A They were acquitted of killing him. They were 



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acquitted of murder, I believe. 

Q Now, this episode that we have just described, 
did that take place in the spring of 1985? 

A As near as I can recall it was the spring of 
1985. 

Q Had you had any contact with or did you know 
of Colonel North prior to this, the briefing of Colonel 
North regarding this cocaine operation? 

A I may have heard his name mentioned, but, no, 
I had not met Colonel North. I think^^^^^^Vseveral times 
had mentioned that Colonel North was pleased with the 
progress that was being made in the development of 
information, but, no, I had not met Colonel North in any 
of the meetings I had attended. 

Q If you can place these two events in time for 
me, then, that is the April or May meeting with Azzara where 

rand you discussed the validity 
ind the episode involving 
Colonel North and the drug operation, which came before 
which? 

A I am sorry. I can't do that. The meeting with 
Abe would have been , mid May. Our operation in Colombia — 
I'm sorry. I don't know. Certainly within a 60-day time- 
frame. It would have been April or May, perhaps early 
June of 1985, but without going back into the chron file, 




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smiis^FiEv 



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I ]ust don ' t recall . 

Q Now, if we can get back to Mr. Azzarol 

Was It your understanding, then, when you 
left your meeting with Azzcun that they would try to 
take additional steps to glean more information? 

A Yes. It was my understanding that we would task 
the informants to go back to Lebanon to contact their 
sources and to specifically task their sources with 
answering specific questions which give us better indication 
as to whether someone was in fact in contact and talking 
to Mr. Buckley. 

Q And what is the next thing you remember happening? 

A That would have been the time frame that Azzam -- 
that someone asked me and I presume it was North -- called 
and asked me to change the reporting procedure to not have 
Azzam as the point of contact for^^^^^^^V Again , now 
I know the reason, part of the reason was that when Azzam 
expressed concern over^^^^^^^^^^^^^^^^Band 
suggested to North that North contact the CIA, who would 
be in a better position to have someone who knew Buckley 

iNorth didn't do that. 
Azzam, hunself, went to the CIA, showed the 
CI/^^^^^^^^^^Hand at a subsequent meeting Azzam indicated 
that North was unhappy with Azzam; that Azzam went to the 
CIA for -- ostensibly for the CIA to agree with Azzam not 




mmm 



760 



bap 





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^ _..w ^-'■ 

to f uraish^^^^^^^^^^Hf or the operation. 

Q You did not know that at the time? 

A No. 

Q The next thing you knew after your mid May 
meeting with Azzam was you got a call from Oliver North 
Is that right? 

A I don't remember the call, but I did contact 
Ithat Azzam was out of the chain of command, that 
[would be reporting directly to me on any future 
endeavors with which we were involved involving the 
hostages in Lebanon. 

Q When you say you don't recall the call from 
North, I know you testified earlier about it. Unless you 
have talked to Oliver North, how did you get your 
recollection refreshed? 

A Because something must have precipitated my 
telling, my taking Azzam out of the chain of command. It 
was not a conversation between Azzcun and myself. I 
can only assume that if North was unhappy with Azzam and 

was unhappy with reporting through Azzetm, because 
Azzam was a negative influence on the endeavor, that I 
received a call from someone. I can only assume it was 
North because Azzam had the run-in with North. 

Q Okay. What was your assessment of Mr. Azzsun's 




abilities? 



m^^"-^ 



CRET 



761 



bap 




32 



1 A Mr. Azzam is a most competent investigator who 

2 has served m any of a number of senior positions in DEA, 

3 most knowledgeable about the Middle East. 

4 Q Would you say he is more knowledgeable about the 

5 Middle East thar 

6 A Absolutely. In addition, Mr. Azzam traveled with 

7 me to many of the international meetings in which we 

8 continued to meet with foreign diplomats. Abe speaks 

9 Lebanese and always at meetings would go to Middle 

10 Eastern officials, re-acquamt himself with the Middle 

11 Eastern officials because of his remaining interest in 

12 that part of the country, so Mr. Azzam was perhaps 

13 withm DEA one of those people who was highly qualified 

14 to assess information coming out of the Middle East. 

15 Q Okay. Then here is my question. At this point 

16 you said in mid May you agreed with Azzam' s assessment 

17 that more information was needed before the money would be 

18 paid to the informants. You had high regard for Mr. Azzam' s 

19 abilities, yet on what you believed to be a call from 

20 Oliver North you decided to basically get Mr. Azzam out 

21 of the picture, and allow^^^^^^^H to go forward. 

22 A Right. 

23 Q Given your prior experience with Oliver North 

24 why did you make that decision? 

25 A Number one, I had no prior experience with Oliver 



UMfiii^l^ 



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end bap. 



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35-40 

spectrum on whether the information developed by the 
sources was good information. 

Q I gather, then, that^^^^^^^^^^^was in favor of 
paying 

A Yes. 

Q Were you aware of that at the time? 

A No. 

Q So you never spoke to^^^^^^H^^B contemporaneously 
regarding his feelings about the validity of the proof? 

A No. I did not. Because when I talked to 
Azzam, I^^^^^^^^^^^^^^^HAzzamat that point told me 
what the CIA reaction wa^^^^^^^^^^^^^^H what the FBlJ 
reaction^^^^^^^^^^^^^^Hwas , and I was satisfied that 
if the experts said that that was not what it was said to 
be, there was no need for me to talk to anyone else about 
it. 




mtsm^ 



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41 



Q Did you ever have any contact with either Mr. 
McFarlane or Admiral Poindexter regarding this operation? 

A No, none. 

Q Now, after Mr. Azzam Left the picture, and le t ' s 
talk about approximately the July 1985 time frame, wer'; 

Istill working at DEA or had they actually been 
assigned either on a reimbursed or unreimbursed basis to the 
NSC? 

A Neither^^^^^^^^^^^^^Hwas assigned to the NSC. 
Both had functions at DEA headquarters . ^^^^^^Bj had been 
assigned toth^^^HJI^^^^^B'jnd^^^^^fhad been assigned to 
^^^^^^^^^^^^^^^^^^H during frame. They 

there now. 

Q Was It vour understanding that -- let me ask you, 
what was you understanding after July of 1985 as to how it -- 
what funds would be used to finance both the operational 
expenses of the agents and any payments to sources? 

A It would have been about that time frame that -- 
again, the time frame being May or June of 1985 -- that I 
explained to^^^^^^Bthat by law, DEA can only fund those 
operations that had to do with drug law enforcement, 31 U.S.C. 
628. 

And I said, if we are involved in contactirg 
informants solely for the purpose of locating hostages, then 
any money generated or any money necessary to pay for that 



UM£bASfiieEhi 



764 



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end bap. 



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35-40 

spectrum on whether the information developed by the 
sources was good information. 

Q I gather, then, that^^^^^^^^^^^was in favor of 
paying ^~ 

A Yes. 

Q Were you aware of that at the time? 

A No. 

Q So you never spoke to^^^^^^H^^B contemporaneous ly 
regarding his feelings about the validity of the proof? 

A No. I did not. Because when I talked to 
Azzam, I^^^^^^^^^^^^^^^H Azzam at that point told me 
what the CIA reaction wa^^^^^^^^^^Hj|^H what the FBIJ 
reaction^^^^^^^^^^^^^fwas , and I was satisfied that 
if the experts said that that was not what it was said to 
be, there was no need for me to talk to anyone else about 
it. 





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41 



Q Did you ever have any contact with either Mr. 
McFarlane or Admiral Poindexter regarding this operation? 

A No, none. 

Q Now, after Mr. Azzam left the picture, and le t ' s 
talk about approximately the July 1985 time frame, were 

[still working at DEA or had they actually been 
assigned either on a rei.Tibursed or unreimbursed basis to the 
NSC? 

A Neither^^^^^^^^^^^^^Hwas assigned to the NSC. 
Both had functions at DEA headquarters . ^^^^^^Hj nad been 
assigne d to the^^^Jj^^^^^J and^^^^^yhad been assigned to 
^^^^^^^^^^^^^^^^^H during frame. They 

there now. 

Q Was It vour understanding that -- let me ask you, 
what was you understanding after July of 1985 as to how it -- 
what funds would be used to finance both the operational 
expenses of the agents and any payments to sources? 

A It would have been about that time frame that -- 
again, the time frame being May or June of 1985 -- that I 
explained to^^^^^^Bthat by law, DEA can only fund those 
operations that had to do with drug law enforcement, 31 U.S.C. 
628. 

And I said, if we are involved in contacting 
informants solely for the purpose of locating hostages, then 
any money generated or any money necessary to pay for that 



bRfit&Saifimhi 



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Wliim) 



42 



information cannot come out of DEA funding. At this point, 
if I can back ud a little bit, I had mentioned that the SEO 
initial was a $20,000 fund. In May of 1985, we added additiona 
520,000 to that fund. So, our funding for the effort was 
540,000 plus some travel exoenses, and what have you. 

Because of my concern that if we were now solely 
involved m gathering intelligence or developing informants 
to find hostages, that is outside the purview of what we are 
authorized to do. 

Q When you called this to -his attention, could you 
tell us how it is that that conversation even came up? 

A Not specifically. It may have been when I called 
him to tell him that he was going to be the point of contact, 
not Abe Azzam, and that he was to report directly to me. 
It may have been in that conversation or at a subsequent 
meeting . 

I would call^^^^^^^uo periodically to ask for the 
status of the investigation, aid either at a personal meeting 
or the telephone call, I made reference to the fact that we 
must be very careful to use drug money for drug investigations 
only. 

At subsequent meetings, my concern was if we were 
develoDing informants, were we developing them and turning 
them over to the appropriate age 




J[iM£Jd£&^%dT 



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liVCIBI 



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43 



In each case, I was assured that we in fact wers 



domq tha 




Q When you mentioned to him this situation with the 
money and the fundma, was that generated out of your own 
concern or had someone pointed that out to you, or had you 
sought the advice of anyone prior to telling him about this? 

A I can't recall anyone talkinq to me about it. It 
was a concern I had that we were now involved in a SEO for 
six months. Frank Monastero, the Chief of Operations, and 
I on several occasions talked about the SEO and how long we 
thought the SEO would continue. 

It was certainly my view, and Frank's view, that 
our role now was to encourage these informants to continue to 
go into Lebanon to do hostage work that we could very easily 
have just turned the informants over to the appropriate 
agency to handle that, and we could get back to our own 
responsibility, which is drug law enforcement. 

And whether I or Frank brought up the money spent, 
I ajn not sure. But clearly, I tolc^^^^^^H that we could 
only spend the money on drug law enforcment. 

Q Whpn you said that, did that apply equally to the 
aaent's excenses as well as the oavment of bribes or 



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payments for information to the sources? 

A No. I didn't get into that because it was my 
assumotion that the agents certainly would know what their 
resconsibi lities were as far as vouchers were concerned, and 
the rest. 

Q Here is my question. After July of 1985, was it 
your understanding that their expenses, the agents' expenses 
would be paid by DEA| 

A I don't think I even thought about it, to be perfectly 
honest. In hindsight, the terms of reference indicated that 
Dersonnel costs would be borne by the agency, and I had no 
reason to think that that was not continuing to be the case, 
that our personnel costs were continuing to be paid by the 
agency, but if it came to generating money to pay to bribe 
someone, I fully expected that that was not DEA money, because 
we couldn't clearly do it. 

Q So, was It your understanding throughout this 
period, 1985 and 1986, that DEA was funding the expenses 
for the agents to travel and so forth? 

A Yes, it was my understanding. 

Q Did anyone ever bring a different understanding to 



you? 



A 
Q 

A 



No. 



How much m total were you aware that DEA had funded? 
At the time, I certainly knew of the initial S20,000. 



769 



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45 




I don't remember being told that additional 320,000 went into 
the fund, but that is not unusual. 

Q And as to the bribe money, like the big sum 
payments, the 200,000 and so forth, was it your understandina 
this money was coming 

A Yes. 

Q Did anyone ever tell you differently? 

A No. 

Q When did you first learn that private individuals 
had put up some money for this effort? 

A After December of 1986. 

Q When you mentioned to^^^^^^^^Bthat it was your 
intention that if the sources were being used only to provide 
hostage-related intelligence that they should be turned over 

Idid he offer any opposition to that? In other 
words, was he reluctant to let the sources go? 

A No. I think he may have said, you know, based 
upon your law enforcement experience, some sources don't 
agency shop. They will only deal with us. But we will be 
able to turn over all of our sources within a given time frame 

Did^^H^^^^^Hor^^^^^^^Hsubmit any 
reports to you throughout 1985 and 1986? 

A No. 

Q Is there any reason for that? 

A No. That IS not unusual in that if we have an 




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1 individual, an agent w orking with another a 

2 

3 

4 

5 

6 I get periodic verbal updates from! 

as to how effective 
the program is. But, no, that is net unusual. 

We 1 1 , ^^^^^^^^^^^^^^^^^^^^^1 1 s person actually 

A No. That person is a DEA agent on loan to the 







Q Through like an unreimbursed assignment? 

A No. He is reimbursed. We have a reimbursable 
agreement. I believe they may have even paid the cost of our 
transferring him^^^^^^^^^B but I would have to check that 
to be sure. 

Q So that is really different than th^^^^^Band 

tuation where they were not actually assigned to the 

NSC^ 

A Right. That is right. 

Q Did you ever instruct either of them not to write any 
written reports either to you or to anyone else? 

A Absolutely not. 

Q Did there come a ti.me in 1985 that you discussed 



lere come a ti.me in 1985 ti 



prppTi 



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47 



these activities with the Attorney General? 

A I may have -- I meet with the Attorney General 
several times a week for breakfast or for lunch. I may have 
said to him, we are developing information through the 
informant program, which is of some benefit. I can't 
SDecifically recall a date or time frame in which I did that. 

Q All right. Did you ever go to the Attorney General 
with any specific plan? 

A None, never. 

Q Did he ever give you any sort of advice or 
instructions regarding this operation? 

A No. 

Q Do you know whether or not he was ever aware of the 
private donations or the use of private monies in any of these 
operations? 

A I have no knowledge at all. 

Q As long, as we are on this subject, the Attorney 
General testified before the House Judiciary Committee in 
March 1987, regarding the DEA operation. I take it that — in 
which he testified he was not aware of these things. I take 
It after that testimony, you had a conversation with him about 
it? 

A Right. 

Q Could you relate that, please? 

A Yes. After his testimony -- and I was not aware of 



UHCLASSlHEEl, 



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48 



his testimony. I received a call from John Bolton, B-o-l-t-o-n 
John is the Chief of Congressional Affairs at the Department. 
John stated that the Attorney General during testimony had 
said that he was not aware or that he didn't believe that DEA 
was operational, that the role of DEA in the hostage plan 
was to develop whatever intelligence we could on the location 
of the hostages and then that over to the appropriate agency. 

I told Bolton that that, in fact, was what I had 
told the Attorney General. Within several days, I met with 
the Attorney General in Phoenix, Arizona at our conference 
of special agents in charge. 

I told the Attorney General that Mr. Bolton had 
called me, asking me for my recollection of any conversation 
I had with the Attorney General, and I told the Attorney 
General what I told John Bolton. 

Q What was the Attorney General's response? 

A Non-conunittal . 

Q Could you give us an idea when you say operational 
-- everybody uses that term kind of loosely -- what you mean 
and how do you define an operational role of an agent? 

A If an individual is out conducting interviews, 
making undercover buys, doing case-oriented things, developing 
an investigation, that is what I would perceive to be an 
operation. 

If an individual is gathering intelligence, that 



WHiLftinMn Cmi 



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uwCi/isSTnttr 



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would be different in my mind's eye. That would be an 
intelligence probe. 

Q Would the rental of transportation and equipment 
and a safe house for the extrication of hostages in your 
mind be operational? 

A Absolutely. 

Q Has DEA to your knowledge ever been included in any 
covert action findings under the National Security Act? 

A Not to my knowledge. 

Q Was there such a finding for this operation, to your 
knowledge? 

A No, not to my knowledge. 

Q Have you since signed any documents or exhibits 
generated by Colonel North describing some of the activities 
of the agents, specifically in the plan to provide SI. 5 
million to the captors and get the hostages out of Lebanon? 
Some of them have been released by the committee publicly. 

A There was a document that Mr. Hoffman had shown me 
that indicated that DEA was involved in -- I can't recall the 
details -- maybe the renint of a boat. This was May 24, a 
document dated May 24. 

Q Of 1985? 

A Of 1985. ; ' ■ 

Q Have you ever seen, prior to anything Mr. Hoffman 
showed you, I gather recently, but had you seen in 1985 or 



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50 



1986 any memoranda, PROF notes or anything else written by 
anyone, by the White House or NSC regarding the role of the 
agents in the operation? 

A No. Received none, heard of none. 

Q Now, in or around the early suiruner of 1935, there was 
an operation afoot to try to extricate the hostages using 
this combination of bribes and them lump sum payments to the 
captors that was described in a memo of June of 1985 from 
Colonel North to his superiors. Were you aware specifically 
of that plan? 

A No , I was not. 

Q Do you recall^^^^^^Hbrief ing you around that 
time period on anything that was happening? 

A No. I recall in each cas^^^^^^^Htelling me about 
informants, information from informants and at one meeting 
did mention that there was some hope of extricating the 
hostages, either through bribery or the use of military 
action. 

But I don't recall a date or a time frame. 

Q Were are sums regarding the bribery brought to your 
attention by 

A I believe^^^^^^^^^Hmade reference to a million 
dollars per hostage? 

Q Were the specifics of any military extraction 




explained to you? 



UNCLASSIFIED 



I 



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A No, none. 

Q Did^^^^^^^^^l explain what role he would have or 
he or^^^^^^^H would have in supporting such military 
extraction? 

A No. In each case, as I mentioned, when 
would brief me on what was going on, he would say, we are 
]ust developing intelligence information, but the information 
looks good because we may have a military extrication, but we 
may be getting hostages out in the near-term. 

Q What was your understanding of the amount of time 
or the percentage of their time, let's say, that^^^^^^Hand 
|were using on this project? 

A Well, both were assigned full time to DEA 
Headquarters. I thought the amount of time that they were 
spending on this thing was minimal, perhaps -- it would be hard 
to say. I thought perhaps a meeting a month m Washington 
and an occasional trip to debrief an informant. 

Q Okay. 

But was It your impression they were spending 90 
percent of their time on hostages? Would that have surprised 
you? 

A 90 percent of their time on this? Absolutely. 

Q Getting back to the money, if I can for a minute, 
the memo which we were given today dated December 9, 1986 from 
to you, the very last entry in that says addendun 







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11 II 



As agreed previously, other than actual operational 
expenses, no unappropriated funds were handled by DEA. 
Do you know what that is referring to? 

A No, I do not. When I talked to^^^^^^B in December 
of 1986, It was specifically because newspapers were carrying 
information about the activities and I wantet^^^^^B to 
specifically outline for me again what our role was, and as 
previously ^^^^^^^^^^1 said , our role was to develop informants 
and to turn that information over to appropriate agencies. 
I said well, I have read in the newspapers about 
safe houses, about accounts, and he said none of that informatit)r 
is accurate. I said , ^^^^^H sit down and write out in your 
own handwriting what you have ]ust said. He prepared a hand- 
written note to me, delivered it to my secretary in handwritten 
form, and I had my secretary transcribe it as it appears. 

Q All right. If I could see the entry on that for a 
minute, it says, "As agreed previously that no unappropriated 
funds would be handled by DEA." Do you recall discussing with 

I or ^^^^^^^^H that DEA agents should not be handling 
unappropriated funds? 

A No, I do not. 

Q Do you know if anybody in the DEA hierarchy had had 
such a conversation with them or given them such instructions? 

A I don't believe that anyone in DEA gave such 
instructions based upon the administrative inquiry which we 




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conducted. 

Q I belive you had an appointment in October of 
1986 with Colonel North; is that correct? 

A Right. 

Q Is that the first time you had actually met him? 

A Yes. 

Q Can you tell us when that was? 

A October of 1986. A specific date, I don't recall. 
I can determine the specific date from my calendar. 

Q I believe you told us in interviews that was October 
14, and that corresponded to the calendar that we had from 
North. 

A Okay. October 14. The meeting was in my office, 
based upon a call to my secretary asking if I would meet 
with Colonel North. Colonel North came to my office, talked 
in general terms about his appreciation for info rmation tha t 
we had developed on the location of the hostages] 



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\ 



Q What exactly did you gather was tr.e purpose of that 
meeting? In other words, what was he offering to assist you 
with? 

A I don't think it was an offer of assistance at 
all. I think that through ^^^^^^^^^^^| Colonel North had 
learned of my impatience with our prolonged informant 
development, because I had on several occasions during the 
summer and fall expressed to^^^^^^Hthe fact that I was 
having trouble -understanding why it was taking us so long to 
negotiate with informants who either were long-term informants 
or informants under development t 

and that I wanted from^^^^^^^p date in which our intelligence 
probe would be over. 

And I think that my visit from the Colonel was an 




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attempt to see Lf North's encouragement would encourage me 
to keep supporting our intelligence probe. 

Q Did he say something to that effect? Did he say we 
hope we can continue to work with you, or -- 

A No. The meeting began with, you have been a big 
help. DEA IS the only one that has positive information. 
The information you have developed have assisted in this 
terrorist thing, and in this situation and in this situation, a 
we want to thank, you for your help. By the way, if there is 
anything we can do. 

I said, "Colonel, there is nothing you can d 




So, as a matter of fact, when the Colonel arrived, 
he asked to shut the door, which of course added the intrigue 
to the meeting, and then when the meeting was over, I still 
couldn't understand why the door was shut and what the intrigue 
wa3 . 

It was in my mind's eye a social call. 

Q Did he make any reference to the fact he expected 
some hostages to be released soon? 

A He may have. He may have said that based upon your 
information, we are going to get hostages released, but I had 



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ommrn 



56 



brother , 
A 

Q 
A 

Q 
A 





been hearing that beginning in May of 1985 and, as I say, 
this was 15 months later, and there were no hostages and that 
certainly was prompting my impatience with the whole 
operation. I was not pleased with the position of North on 
the giving of the $200,000 to the individual. We thought it 
wasn't a good idea. 

I just had decided that we were spending too much 
effort in informant development in what clearly was not 
our role. 

Did^^^^^^Hever infoirm you of the role tha] 
ever played in this operation? 
No, he did not. 

Did that come to your attention eventually? 
Yes, it did. 
Recently? 

It came to my attention after the administrative 
inquiry we conducted in May of 1987. 

Q All right. I gather in your meeting with North in 
October of 1986, North did not mention to you any payments of 
monies that he had given the agents? 
A No, he did not. 

Q He did not mention that his operation was being 
funded privately? 

A No, did not. 

Q Let me ask you some questions about Ross Perot. 



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A Sure. 

Q When did you first become aware that he had donated 
money for this operation? 

A Well, I guess at the hearings, although in May of 
198', with the administrative inquiry that was conducted, 
eithez^^^^l -- think it was during^^^^^H interview 
by the inspectors where^^^^^Bhad indicated that he now knew, 
he knew during the time of the interview that one of the mdivi 
duals who had furnished money to North worked for Ross Perot. 
But prior to my reviewing that information with the inspectors, 
I was not aware of Perot's involvement. 

Q Did you ever speak about Perot's involvement with 
the Attorney General? 

A No. 

Q And I gather you did not with Colonel North? 

A No, I did not. 

Q Had Mr. Perot on other occasions offered to donate 
any money or any equipment or anything of that nature to the 
DEA? 

A No, he did not. 

Q Have you ever met him? 

A Yes, I have. 

Q Can you tell us under what circumstances? 

A I had lunch with Mr. Perot in Maison Blanche someti.-ne 



last summer. 



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58 




A 
Q 
A 




Q Did you discuss -- did he offer or discuss his 
involvement in any operations that DEA was undertaking? 

A No. Our discussion had to do with something other 
than what was ongoing as far as the hostages were concerned. 
Specifically, it concerned Ross Perot's interest in the MIA 
issue . 

Were you aware of Agent 

in support of this operati 
Am I aware? I am not aware, yes 
At the time, were you aware of it? 
I was not aware. I became aware after the 
administrative inquiry in May of 1987. 

Q In 1985 or 1986, did you receive any reports from 
^^^^^^^^^■regarding this sub]ect matter? 
No, I did not. 

Have you since spoken to him about this? 
About this? No, I have not. 

Are you aware of any activities on the part o 
lin Central America during 1985-86? 
A No. 

MS. NAUGHTON: That is all of the questions I have 
at this time. I may have some more for you later. I will 
turn it on over to Tim Woodcock from the Senate. 



A 
Q 
A 
Q 




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UIICtEASSKIEBT 



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EXAMINATION ON BEHALF OF THE SENATE SELECT COMMITTEE 
BY MR. WOODCOCK: j 

Q Mr. Lawn, I am going to be questioning you based on 
some marginal notes here so there will be some jumping around. 

A Okay. ;' 

Q As I understand your testimony, you stated that as 
of May of 1985, about the time the Buckley proof emerged 
in Lebanon, you did not know Colonel North, is that correct? 

A Yes, that is correct. 

Q When you say that, does that mean you did not know 
him personally or did you not know him by reputation? 

A I had heard the name Colonel North, but I had not 
met him. I could not even say that I was familiar with North 
or what his specific position was at the White House. 

Q Did he, to your knowledge, have a reputation with 
DEA as of that time? Did you know of that? 

A The first information that I had had to do with our 
cocaine case, Colombian cocaine case, and the conversation 
about -- our internal conversation about how the media might 
have learned of our probe into the Colombian trafficking 
cartel. 

Q We have a document that we received from the CIA 
which IS a memorandum recounting a meeting of which appears 
to be the hostage locating task force. Excuse me. It is a 
document relating to a meeting of several CIA senior officials 



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60 



1 and Abe Azzam. It is dated April 30, 1985, and it contains 

2 the statement, "Azzam stated there is bad blood between North 

3 and DEA because of a problem North created for DEA last year, 

4 which had to do with the DEA operation that involved Nicaragua. 

5 Is that what you were referring to? 

6 A Yes. That puts it in the time frame that Pam asked 

7 about, '84. 

8 Q So it would have been earlier than that that you 

9 would have become acquainted with North's involvement 

10 or suspected involvement with the DEA operation; is that 

11 correct? 

12 A Right. 

13 Q Now, armed with that knowledge, as of May 1985, you 

14 would have known of North's reputation with DEA; is that correcjt 

15 A I would have been aware of -- I recall the conversati(on 
15 that I had with an individual about North and our narcotics 
17 case, yes. 
ig Q Let me ask you the question a little differently: 

19 Would you accept that description that Azzam has purported 

20 to have given to the CIA that there was bad blood between 

21 North and DEA because of this operation? 

22 A I don't know that. There was no bad blood between 

23 me and North, because I didn't know North. If someone in 

24 operations had an encounter with North, Mr. Azzam, who was 

25 then in operations at that time, could have stated there was 



I 

I 



ijllCLASSlEEQ 



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bad blood. But there was certainly no reason on my part to 
share anyone's concern about bad blood. 

Q Okay. That is not quite the question I am asking. 
What I am asking is were you aware, not did you personally 
share in it, but were you aware of any groups within DEA 
or DEA institutionally having a feeling of bad blood between 
itself and Colonel North? 

A You know, I am trying to be very clear on this thing 
An individual in DEA went to a meeting and expressed some 
displeasure with Colonel North. If the displeasure he expressejd 
is organizational, certainly he is not. He was displeased. 
He undoubtedly told other people in DEA he was displeased. 
But for Mr. Azzam to say that DEA was displeased 
is a misnomer, because at least one individual I know was 
displeased and based upon his displeasure, his supervisor 
was unhappy with Colonel North. 

But I cannot conform that DEA was unhappy with 
Colonel North. 

Q I think you have answered my question. 

MS. NAUGHTON: Excuse me. Could we go off the record 
for one second? 

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

Q Earlier in your testimony, you I think described 
North's initial reservations about having Abe Azzam continue 



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in the operation as being partly based on a lack of coherence 
in the management of the operation. 

Do you recall that? Is that correct? 

A Not of coherence. It wasn't a coherence operation. 
A lack of concurrence on how the operation should go forward. 

Q That is a disagreement between North -- let me stop 
you. What was the problem? 

A The problem, as I understand it, was tha 
and Colonel North were very enthusiastic about^^^^^^^^^^^H the 
received ,^^^^^^^^^^^^^lt hey received and in point of fact, 
wher^^^^^^^Bar rived in Washington w i t h^^^^^^^^H he delivered 
^^Bdirectly to Colonel North. 

Q Let me stop you on that. Was that appropriate for 
him to go directly to North rather than to Azzam? 

A No. It was not. Then, as a matter of fact, there 
were words between Abe Azzam and^^^^^^^^^^^^Vabout the 
appropriateness of that happening. 

Q Do you know that or did you know it then? 

A I didn't know it when it happened, but I learned of 
It perhaps during the time probably in late May of 1 985 w hen 
Azzam me^^^^^^^^^^^^^^^^^^^^^^^^^^|^^^^^^^^H As 
said,^^^^^^Hwas most enthusiastic about the seat of this so- 
called proof. 

Azzam indicated that North was very encouraged about 
It, and Azzam was not encouraged about it. Azzam then at a 



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63 



meeting with North told North that North should ask the CIA 
what they thought. Azzam himself subsequently went to the CIA 
and we, by now, know that North and Azzam had words over 
why Azzam took ^^^^^^^^^H to CIA, and encouraged CIA not 
to come up with^^^^^^^^^^^H 

Q So, part of the problem was this disagreement over 
the sufficiency of the proof. 

A Right. 

Anything else? 

A I would say that if there was anything else, it 
would have been a deteriorating relationship between Mr. Azzam 
and! 

Q Based on the proof or something more than that? 

A I think initially based on the proof, that 
should have tirought^^^^^^^^^^^^^^^B|^^^|by the 
to DEA, and DEA would then have established with the CIA and 
with the FBI, if they were the agency, 

^^^^^^^^Hthe bona fides of whether this was good proof or 
bad prooi, prior to bringing it outside of DEA and presenting 
it as tangible proof of the whereabouts of Buckley. 

I mean, it is bad law enforcement procedure. 

Q Were you yourself every directly in contact with 
anybody m CIA over this hostage matter? 

A No. 

Q No one at all? 





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UHOfASfiisfB^ 



64 



A No. 

Q You understand, I gather, from your previous 
testimony, that CIA was in charge of this hostage matter 
t h a t ^^^^^^^^^^^^^^^H a r e 

A Yes. The terms of reference clearly indicated that 
CIA was chairing the gathering of this information. 

Q When you say terms of reference, you are talking 
about the hostage locating task force; is that correct? 

A Right. The terms of reference that all agencies 
received . 

Q And you understand this was being conducted under 
the auspices of the HLTF; is that correct? 

A That was my assumption, yes. 

Q Given that assumption, what role did you understand 
that North played in this? 

A I assumed that North was part of the hostage locator 
task force, and my assumption, I guess, was based upon the fact 
that during the January-February meetings, when we were asked 
to see if we could initiate an intelligence probe, the persons 
with whom the agents met set up this breakfast meeting with 
Colonel North. That certainly supported my belief he was part 
of that particular group. 

Q That he would have been subordinate to the chairman 
of the group presumably; is that correct? 



Absolutely. 



n^f^vu ^wr^uTTrn 



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Q And the chairinan was CIA? 

A Right. 

Q When this call from North came in, and I understand 
your testimony that you have reconstructed that it was a call, 
but you have no specific recollection of it -- 

A Right. 

Q -- when this call or communication came in from North, 
did you agree to it on the spot, that is, his recommendation 
that Azzam be taken out of the loop, or did you seek to discuss 
the matter with^^^^^^^^^^^^^^^for any other person? 

A No, no. I called -- after the contact -- it had 
to be a call, because I hadn't met North -- I called] 
to tell^^^^^^Hthat he was going to be the point of contact 
and he was to report directly to me. 

So there was no -- I had no meetings with anyone befofr« 
I made that decision. 

Q So, you took no steps then to substantiate what North 
was saying; is that correct? 

A Took no steps to substantiate the fact that there was 

Q There was bad blood or disagreement or unhappmess? 

A I certainly was aware of that based upon my 
conversations with Abe Azzam, with Mr. Azzam about the 
insufficiency of the evidence, and I certainly agreed with 
Mr. Azzam that the evidence was insufficient, but I thought it 



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66 



important that if, m fact, DEA was the only agency in a 
position to furnish information on the location of the hostages 
that that was the important thing, and that if a dispute 
between individuals within DEA was going to hinder that, that 
I was going to loosen the logjam. 

Q I think I am pau»ing at the same problem that Pam 
is. You earlier testified that Mr. Azzam had your confidence 
as a professional agent, that he was knowledgeable in the 
Middle East, that you agreed with his assessment of the 
insuffiency of the proof. 

You also testified that you agreed that he was correc|t 
to be unhappy that the proof had not been brought to him 
directly, but instead had been brought to Colonel North. 

A Right. 

Q Given all those circumstances, why is it that you 
didn't brin<^^^^^^^Hin and say, look, I understand you have 
got a problem with Azzam, and yet, frankly, you are in the 
wrong. Why don't you clean it up? 

A Again, in hindsight, it is hard to reconstruct, 
was clear to me that^^^^^^^^H^^^^^H who were 
introduced to the operation through Ed Hickey, had a good 
relationship with the people up there. 

Q People up where? 

A The people m the White House, with the hostage 
locator working group; They had met with North, met with 






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Clarridge, met with the people involved in the operation, and 
that antagonism was the -- the catalwst for the antagonism was 
Pibe Azzain. 

Q I gather you saw this then as more than just a series 
of procedural missteps. Was it a personality problem involved 
here? Is that why you agreed to it so readily? 

A I honestly can't recall. I was anxious to see us 
do what we could do in developing information on the hosta9es, 
and again, I am going to have to fall back on the kidnapping 
of our agent in Guadalajara, because when that happened, 
each of the same agencies with whom I was dealing here helped 
us in our investigation, and the CIA dedicated people around 
the clock, seven days a week to our location of Camarena and 
with the emphasis they were placing on the location of 
Buckley, not only because he wasjone of theirs, but because of 
some information that he had in his possession, I was anxious 
to reciprocate in kind for what the CIA did for us on the 
Camarena case, but I don't know whether that specifically 
influenced my judgment in taking Abe out of the operation. 

Q Let me ask you this: Did you have any information 
from anyone that CIA joined in the unhappiness over Abe Azzam? 

A Oh, no, no. 

Q Would it surprise you to know that the CIA was not 
unhappy with Abe Azzam? 

A It wouldn't surprise me at all. 



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Q Would It surprise you to know they were happy with 
Abe Azzam? 

A No, that wouldn't surprisane, because based upon 
their meetings with Azzam, they indicated they would not 
release^^^^^^^^^^^Hunless Azzam agreed it be released. 

Q Then why is it that you are not checking with CIA 
when you make this decision to remove Abe Azzam since the CIA 
IS in charge of the operation? 

A Because it was my call to make sure that we were 
cooperating in every way possible in what was not a major 
effort en DEA's part. This was not a major operation. It 
was not even a minor operation. It was one or two agents talkijr. 
to one or two informants over the possible location of hostages 
in Lebanon, and it certainly I don't believe warranted my 
double-checking on very senior people m DEA as to who liked 
whom. This was not a big operation. 

Q Well, it was big to the extent that it involved 
William Buckley, wasn't it? 

A It was big for the CIA. 

Q And you valiantly supported the CIA in the Camarena 

A I certainly did. 

Q So, you wanted to make them happy in a case where 
their agent was at risk; isn't that right? 

A Yes. I intended to make them happy by ensuring 



case? 



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iJK^AS;s(Fier 



69 



that we continued to seek our information from our infornants 
on the location of Mr. Buckley. 

Q You mentioned a little earlier in your testimony 
just a few minutes ago that you understand that at one point 
Mr. Clarridge had been checked with; is that correct? 

I am not speaking about this notion of removing 
.!\be Azzam, but that he was involved in this hostage locating 
effort; is that correct? 

A Mr. Clarridge' s name did appear in the interviews 
-f the persons, o^^^^^^^^^^^^^^^^^l Clarridge and others. 
I thinkj 

Q ies,l 

A Was the initial chairman of the committee, I think. 






A Was another individual whose name the agents 
mentioned during the administrative inquiry. And there was 
another CIA person who actually traveled^^^^^^^^^^^H to 
New York to debrief one or more of the informants after they 
carae out! 

Q Really, what I am driving at, your knowledge of 
Clarridge' s involvement, is that based on your May 1987 
investigation? 

A Right, right. That is based on May 1987 -- that is 
difficult for me, because it is hard to recall in 1985 what 




^flW tfOVf CCDW 



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I knew with all the publicity that has been generated by the 
hearings, my own administrative inquiry. That is why it is 
difficult for me to give you a chronological analysis of 
what I knew and when I knew it. 

Q So, at least as far as the Azzam decision, that is 
the dec/sli/ion to remove him, you don't have a recollection, I 
gather, that Clarridge had been involved one way or the other 
up to that point; is that correct? 

A No. That IS right, no. That was clearly not the 
case. Mr. Azzaro had suffered a heart attack and -- perhaps the 
year before, and had come back on duty and was being moved 
or already had been moved up to a position as Executive 
Assistant to the Deputy Administrator. 

The new Deputy Administrator was scheduled to arrive 
at his post in early summer, July or August, and that, too, rr.ay 
well have influenced me, that I knew he was going to be full-ti 
with the new Deputy Administrator. But I can't give you all 
the particulars that influenced my decision to take -- 

Q Excuse me. When you decided Azzam should be taken 
out of the loop and that you when would become the person to 
whoin^^^^^^B would report, did you sit down with him at that 
point and get an update as to what he had done; where things 
stood? 

A In May or June of 1985, I did not. 

Q How did you communicate this information that you -- 



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71 



now we are the point of contact for him? 

A I called^^^^HHand told him he was going to be the 
point of contact and that I wanted him to apprize me as our 
efforts continued and he did that. 

Q And did you discus s with him what the status was 
of this Buckley proof 

A No, because I knew what the status was. The status 
was that we would not authorize the release of the money. 

Q Now, did he tell you that notwithstanding that positi 
the operation might yet go underway? 

A He didn't, no, he did not. 





A I was told that information. Again, I don't know 
the time frame. I thought it was considerably later than that. 
I believe he told me that there was some hope of a hostage 
being released in June of July and then when I met with him 
for an update, I said, well, what happened? Why was there no 
hostage released? 

And he said, that because of the TWA hi]acking in Jun^ 
of 1985, that the heat was on or something, and that the effort 
had to be curtailed. 

Q For your information. North's notebooks, which have 
been made available to the committee, show that on June 6, he 



IIMf I ACCiriCTL 



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72 



which would be approximately two weeks or 10 days before the 
TWA hijacking. 

A I was not aware of that. 

Q Now, in response to some questions from Ms. Naughton, 
you said there was no procedure that you imposed upon either 
^^^^^^^^^^^^^1 to make written reports to you; is that right? 

A That is right. 

Q I think she asked you whether that was not unusual, 
and you said it was not, and referred to an example of a 
DEA agent on assignment^^^^^^^^^^B^^^^^^^^^^^^His that 
correct? 

A Yes. ^^^^^^^^^^^^^ 

Q These agents ,^^^^^^^^^^^^^^^H were a different 
position than that agen^^^^^^^^^^^^^^^Bis that correct? 

A Yes . 

They never were relegated to any other agency other 
than DEA; is that right? 

A That is right. 

Q They were on the DEA payroll the entire time? 

A Right. 

Q To your knowledge, their expenses were to be paid out 
of DEA; is that correct? 

A Right. 

Q Even expenses relating to the hostage location effort 




I 



UIUUASS1£1E0, 



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umi§fff^ 



73 



IS that right? 

A No, no. 

Q Who was to pay for that, and what was your 
understanding on that? 

A My understanding was that if information we are 
developing or if an informant felt he could go into Lebanon 
purely on the hostage issue, that the payment of that informant 
would have to come from elsewhere land my assumption was it 
was the CIA because the — in early 1985, the JRCIA had 
furnished $50,000 for the payment of an informant who was 
to specifically go into Lebanon for this development of hostage 
informant was in fact paid in two installements . He was paid 
$20,000 at one point, a month later paid S30,000 after he came 
out. That was CIA money. We have seats for that. So, I 
assume that in future endeavors, the money would be CIA money. 

When you say you have seats for that money, you mean 
you have a seat from a CIA or from your man reporting back that 
he has disbursed the money? 

A We have a seat from the individual who received it. 



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Q That IS source one. 

A " Right. That is a source. I don't know which 
source it was . 

Q At any time following that disbursement of 350,000 
worth of CIA moneyr did^^^^^^^^^^^^^^H bring to your 
attention that they had received additional CIA monies or 
monies, that they denominated CIA monies? 

A No. They did not. 

Q Isn't It ordinary procedure within DEA when an 
operation is ongoing that reports are made in a routine 
fashion? 

A On a drug case, absolutely. Where we are coopera- 
ting with another agency, the generation of reports would 
be with the agency responsible for the activity. That's 
normal procedure. 

Q Even when your men are still DEA men? 

A Sure. 

Q Even when all expenses are coming out of DEA and 
they are being paid, their salary is DEA and they are not 
normally designated to any other agency? 

A Sure. For example, several years ago DEA 
developed information on a ma]or counterfeiting rmc 

As law enforcement does, we turned over the 
i.-.f ormation over to the Secret Service. The Secret Service 
initiated an investigation, asked us if we would, since we 




UNCLASSIFIED 

m/-\T% OTl/^^P I nil 



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were aware of the operation, if we would have DEA personnel 
operate m an undercover capacity to introduce Secret Service 
people. The agents did that and the information they developed 
went to the Secret Service because it was a Secret Service 
operation, not a DEA operation, and DEA did not have the 
agents writing duplicate reports on our involvement in 
counterfeiting matters 




Q Did either^^^^^^^^^^^^^^^l ever use the expression 
to you that they had received covert monies? 

A No, sir. 

Q When the operation started up, it was given the 
enforcement No. 471. There came a time when the special 
enforcement operation 471 terminated; is that correct? 

A Right. 

Q No substitute special enforcement operation ■"•as 
started up m either place; is that correct? 

A That's right. 

Q Now, when that event happened, was that a -uncture 



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76 

at which you would bring^^^^^^Bin and say there no longer 
IS a formal designation for this operation anymore; therefore, 
this can only be a minimal amount of your time? 

A No. I clearly -- no, to answer your question. 
I clearly understand, unfortunately, that after we had made 
the initial probes with SEO-471, that our future or continuing 
involvement was going to be minimal involvement, a periodic 
contact with an informant calling f ron^^^^^^Hor the Middle 
East, and our meeting with the individual and the debriefing 
of that individual. That was my understanding as to how we 
would continue after the termination of 471. 

Q You have a process in DEA where you regularly 
review the performance of your agents? 

A Yes. 

Q Now, how IS that done? 

A It was done as is done routinely for all our 
personnel. Since both were assigned full time to supervision 
within DEA, their immediate supervisors performed these 
performance ratings. 

Q Does that generate a report? 

A Yes, It doe?. 

Q How often are these done? 

A Annually. 

Q So that m the course of this operation beginning 
m January, 1985, until late 1986, possibly two reports would 



UKJCWS^WP™ 



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would have been done o 




77 



IS that correct? 



A The evaluation period is the June or July time 
frcime. So two reports wouldhave been generated over that 
period . 

Q Do those reports reflect the amount of time that 

agents are spending on various activities? 

A No. No, the report indicates -- a report first 
outlines the critical elements we use in evaluating the 
performance of a given individual. If he performs this 
well, his rating is this. And then there is a narrative 
portion of the report indicating how well he performed in 
each of those critical alements. That is the way it is done 
ordinarily and I can only assume that's the way it was done 
with^^^^ 

Q Now, presumably this report process consists of 
an interview, would that be correct? 

A No, it does not consist of an interview. 

Q What does it consist of? 

A It consists of the immediate supervisor evaluating 
the performance of thejindividual under his supervision, having 
a mid-term review with that individual. 

Q What does that consist of? 

A That would be a sit-down with the individual where 
you tell the individual how he is performing and if he is 




no 



t performing well, the individual has an opportunity to 



ijnqmssifiw. 



802 



imeL^sii^ 



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change his performance during the second part of the period 
of evaluation. 

Q Now let's take the example of^^^^^^^^^l He 

>f DEA during 
this period of time; is that correct? 

A Right. 

Q His supervisor only had authority over him to the 
extent he was involved inl 
is that correct? 

A I would assume so. 

Q Well, his supervisor in thel 
^^^^^^^^^^would not have had jurisdiction over this hostage 
locator effort; is that correct? 

A No, that's correct. 

Q That would be^^^^^^^B f i r s t , is that correct, and 
then you? 

A No. 

Q Was^^^^^^^Ksupervismgl 

A My assumption was that he was. 

Q In this operation, this hostage operation? 

A Right. 

Q So that on tl 

supervisor would perform the 
assessment; right? 

A Correct. 




nnl*WT s*VMW « f^i 1 1 



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u 




.i«>; 



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Q To the extent there is something else the agent 
IS doing and another supervisor is involved in that, would 
that supervisor also participate in the preparation of the 
report? 

A He could. I'm not trying to be vague. I'm trying 
to explain if an individual works 29 days in a given month 
on an operation and then spends a day with someone else, we 
wouldn't then go to the individual to whom he was assigned 
for a day or what have you, or if an agent goes to the field 
on a TDY assignment when his performance is being evaluated, 
we would not necessarily contact that field element and say, 
how did he perform or she perform during the 20 days he or 
she was in your office. 

So in the case o^^^^^K if he were gone for an 
extended period of time, his supervisor and^^^Bhould have 
gone and may have gone tc^^^^^^^Band said I can't rate him 
outside of hi^^^^Bresponsibility . Can you give me input 
into his rating. 

A Now, if It were the case tha^^^^^H spent 90 
percent of his time(on the hostage locating effort, presumably 
his fitness report would reflect that, is that correct, or 
at least reflect some assessment b^|^^^^^^Bof how he was 
doing on the hostage effort; is that correct? 

A Presumably, yes. 

Q Have you seen^^^^^Bf itness_report? 



seen^^^^^^Hf itness repo 



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iMi^W 



JO 





A No, I have not, nor is that unusual. 

Q I understand that. But I'm asking you, since this 
matter has come up, you have not seen that fitness report; 
is that correct? 

A No. 

Q Now, similarly w 1 1 t^^^^^^^^^^^^Ho n this hostage 
matter, who would be the person who would write his portion 
or the hostage portion of his fitness report? 

A Well ,^^^^^^H was assigned full time to the 
land the individual who would write his appraisal would 
be his immediate superior. I can only surmise that was the 
case withl^^^^^^^ 

Q But if -- let us assume hypothetically that 
^as spending a large amount of his ti.me on the 
hostage locating effort. Who would write his fitness report 
on that matter? 

A Well, I would say if he were spending -- if an 
individual were spending a large amount of time on an effort 
that the supervisor didn't feel comfortable rating, the 
supervisor would go to someone else, whomever that someone is, 
and ask that that input be prepared on his performance in 
that additional duty. 

Q Now, in^^^^^^^^^Vcase on the hostage matter, who 
would have been the person who would have writter. that 
portion of the report or would have been responsible for 



Ti/^o__CE/yW'rri 



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Dif^F/^SfHSF 



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that portion of the report? 

A That's unclear. I really don't know because we have 
never explored that. The reason is that none of us thought 
that^^^^^^H was spending any amount of time on this other 
than perhaps weekend travel. In hindsight -- not in hindsight 
but currently, having become aware of the travel that both 
conducted, I'm very surprised. 

Q Given your understanding of who was knowledgeable 
at all of what^^^^^^^lwas doing, who would you say would 
be m a position to write on his fitness report? 

A Given what? What I know now? 

Q Let me divide it into two questions. When you 
eliminated Abe Azzam from the loop and told^^^^^^Vthat he 
was going to report to you, who did you see as being respon- 
sible for monitoring his involvement and performance in the 
hostage effort? 

A His current supervisor. 

Q Who was? 

A I don't recall who it was. I believe he was working 
for^^^^^^^^^^Vat the time and then subsequently he was 
moved to a different -- ^°^^^^^^^^^^^^^m ^ don't know 
who his supervisor was on the^^^^^^^^^^Bthough . 

Q Was his supervisor on the^^^^^^^^^^Bnade aware 
by you or^^^^^^Hbf his other assignment on the hostage 



matter? 



UNCLASSIEIEB, 



806 



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Ul9l$l«^fl^T 



82 



A I assume he was made aware hy^^^^^^^B I never 
made him aware. The reason I didn't is because I was not 
aware that^^^^^^Hwas doing anything other than what he 
was assigned, namely either! 





Q Except for the minimal reports he was giving you 
on his hostage effort? You were aware of that, weren't you? 

A Overtly I was aware that in perhaps four ten-minute 
conversations in a year, that he continued to talk to the 
individuals on the hostage locator task force about informant 
information. But his assignment continued to be a full-time 
DEA assignment and no one ever brought to my attention the 
fact that either he or^^^^^lwere not full time at their 
assignment posts. 

Q If you were the person to whomH^^^^^Hwas supposed 
to report, how could it beJ^^^^Bwould be the one who would 
wind up writing the report on these hostage matters? 

A There would be no report. The hypothetical, we are 
going into what if s .^^^^^^^| was assigned full time to a 
job in DEA. His immediate supervisor would write his perfor- 
mance. If the immediate supervisor felt tha^^^^^f^Bwas 
not available enough for him to write all aspects of his 
supervision, he would have raised the question, who is going 
to write that part of his evaluation. That did not happen. 
That question never arose. Had it arisen as to who was going 



UHa&S$i«£P, 



807 



10 



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, ECRET 

ASSIFSED 



83 




to write that aspect, at that point I would have had to 
perhaps go to the hostage locator, the chairman of the hostage 
locator task force or have someone go to them and say, "How 
would you evaluate his performance with the hostage locator 
task force." But that never, that question never arose. 

So I was satisfied that botl- 
employed full time, that they were doing DEA work on a full- 
time basis. 

Q Do you recall having -- calling Abe Azzam back into 
the office during his recuperative period in June of '85 to 
prepare you for a briefing of the Attorney General on the 
hostage matter? 

A No. I am aware that Mr. Azzam was called back, as 
I was called back. I don't remember the exact dates, but I 
was on leave in Ocean City and received a call from Judge 
Webster on a document that the Judge received which was a 
classified docuroent. The Judge said, "Jack, I've ]ust gotten 
something. I would like to talk to you about it, and can you 
come in tomorrow morning?" I called the office and said, 
"Has anything come up? Have you seen any classified document 
that should be of concern?" And they said, "No, but when you 
come in, we will talk about it in the morning." I think 
Frank Monastarro then called Abe and — called Mr. Azzam 
and said, "It may be that Judge Webster wants an update on 
the hostage situation. Can you update us?" 



UNCLASSIFIED 



808 



11 



UWgP/^fiW 



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When I came in the next morning, I think Monastarro 
gave me an update and I went to see the JuSge, and it was on 
an entirely different matter. 

Q When you say the Judge needed an update on the 
hostage matter, do you know whether up to that point he had 
been briefed on it at all? 

A No , I didn't say the Judge needed an update. I 
said that someone surmised, based upon my call when the Judge 
called about a classified document he received, someone 
surmised that that's probably what he was asking about, because 
there was nothing else with which DEA was involved and might 
be of interest to Judge Webster. But when I talked to Judge 
Webster the next morning, the question that he had was some- 
thing entirely different from the hostage situation. As far 
as my briefing him, I did on one occasion -- again, we have 
weekly breakfasts -- tell him that we were continuing to 
furnish information to the hostage locator task force on 
information being developed out of Lebanon, just as an aside, 
33 I had done with the Attorney General . 

MS. NAUGHTON. May I interrupt here? 

MR. WOODCOCK: Go ahead. 

MS. NAUGHTON. Did you discuss with the Director 
the use of private monies to bribe anybody or any bribery 
schemes or plans? 

THE WITNESS: Absolutely not, no. Never did. 



riMfil<A<iAtflM 



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.*"'« 






35 



BY MR. WOODCOCK: 

Q I think you may have testified to this point, but 
let me ask you. In the June, May/ June '85 period, were you 
ever aware through^^^^^^Bbr any other source that a hostage 
extraction effort was under consideration that involved the 
payment of a million dollars per hostage? 

A I am aware that that figure came up, but I believe 
that my awareness of that came up as a result of our May, 
1987, administrative review procedure that a million dollars 
per hostage was a figure that -- I think it was a figure that 
two members of a terrorist group stated in a meetmgl 

[that this is what it would take to get hostages out. 
I think that was later than May of '85. 

Q Let me ask you the same question. Put it in the 
time period of May, 1986. 

A I believe that was the time frame that I'm referring 
to about the million dollars, that it would take a million 
dollars to bribe people to effect the release of two hostages. 

Q A million dollars per hostage? 

A I think It was a million dollars per hostage. As 
I say, my knowledge of this came through our review of the 
o f ^^^^^^^^^^^^^^B- 

Q I have a page from North ' s 'notebook which is dated 
June 23, 1986. It has the entry on it, "Call Jack Lawn, 



Say 




that IS spelled 



UNaASSiFiEEL 



810 



13 



uttdAsacsfiT 



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86 



Does that mean anything to you? 
A That means nothing to me at all. 
Q June 23, 1986. 
A No. It means nothing to me. 

Q There's an entry the following day, June 24, 1986, 
under a "to do" list, one of the items is Jack Lawn,| 

to help w 1 1 h^^^^^^^^^^^^HS Any recognition 
that? 

A No. Sorry. 

MR. BERMINGHAM: Could yo u check your DEA indices 
to see if you have anything on 
THE WITNESS: Can we? 






MR. WOODCOCK: 
MR. BERMINGHAM: Evidentl 
operatmg^^^^^^^Hand Central America. 

MS. NAUGHTON: We think he may be related to 
a c t i V i t i e s^^^^^^^^^^^l 1 n 
BY MR. WOODCOCK: 
Q Do you know whether any of the DEA sources ever 
took the questions, the permanent questions that had been 
developed about the hostages in May of 1985 back to Lebanon 
and asked their sources to get the answers to them? 
A No , I don't know that. 
Q Mr. Lawn, looking at the memorandum that 



**H^^H» ^ 1"^l*< ttipnTi 




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"Mliffsffi^ 



87 



provided for you, dated December 9, 1986, I gather 
from your testimony that was prepared at your request? 

A Yes. 

Q And the purpose for it was to inform you about 
w h a t ^^^^^^^^^^^1 3 n d^^^^^^^^^^Hf h a d 
July of '85; is that correct? 

A No. From July of -- June or July of '85, I was 
getting periodic briefings fromJ 

Q These are the ten-mmute briefings you referred 
to, the four ten-minute briefings? 

A Right, where^^^^^^Hwould indicate to me our 
sole function was we are continuing to develop informants and 
to debrief informants. 

My purpose in this memoranduin , in asking him to 
prepare this written document, was to have him think 
seriously about whether that was all with which they were 
involved. Because, as I say, publicity had been engendered 
about other activities, about safehouses and with 25 years 
involved in law enforcement and other work, very often you 
know that the spoken word changes when it becomes the 
written word. 

When^^^^^^^^^^^H assured me this all they were 
involved in, I said ,^^^^^^H sit down and write that out for 
.Tie." It was my asking him to think hard about confirming 
for me in writing that that was totally and completely the 



mu&sifi£ftp 



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US§i\S»WBT 



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activity with which we were involved. It wasn't to be a 
report of all that had transpired, but merely my attempt to 
assure myself that what he had told me verbally over the 
past 18 months was in fact accurate. 

Q Before this report was generated, was this based 
on a face-to-face meeting wit 

A This was a face-to-face meeting, yes. This was 
based upon a face-to-face meeting I had wit 

Q I gather from what you have testified that the 
events that prompted the face-to-face meeting were reports 
that had become public about DEA involvement in hostage 
location efforts; is that correct? 

.^ No . I was aware of the hostage location efforts. 
What concerned me was the reports of Swiss bank accounts, of 
safehouses, of activities which were clearly, as Pam had 
noted earlier, operational type activities, and I was concerned 
about It because I had been led to believe that we were not 
operational in the hostage -- in our hostage efforts, and I 
wanted written confirmation that what I had been verbally 
told was in fact accurate. 

Q In this face-to-face meeting, I gather then that 
you made ^^^^^^H aware of your concern that he may have gone 
operational; is that correct? 

A I made^^^^^^^^^^^l aware that I was concerned 
about what I had been reading and hearing about the hostage 



WSICIASSIOECL 



813 



16 



imi^ii^iiT 



89 



1 situation and I wanted him to enunciate for me whether that 

2 was any truth to this information. 

3 Q Okay. Let me back up. 

4 You testified a moment ago I think that some of 

5 these reports that you had read had suggested that perhaps 

6 the DEA agents had become operational m a way that Ms. 

7 Naughton had probed in her questioning earlier; is that 

8 correct? 

9 A Right. 

10 Q Now, is that one of the things that you brought to 

11 ^^^^^^^^^^^Hat tent ion when he came in and sat down with 

12 you face to face? 

13 A Specifically I know that I did say that I was 

14 concerned about what I had been hearing or reading in the 

15 newspapers, and I wanted to hear from him whether there was 

16 any substance of truth in what I had been hearing or reading, 

17 and he said no. I said, "What have we been doing?" He 

18 said, "Informant debriefing, informant development, nothing 

19 more . " 

20 Q Do you know whether he was familiar with what you 

21 had been reading and wht was generating your concern? 

22 A I didn't specifically talk about a given article 

23 or a given periodical. 

24 Q How did you know that he had an understanding of 

25 



what your concerns were? 



WT^y*TPr*crrn' 



814 



17 



iMME 



90 



1 A Well, when I talk about when I said references to 

2 bank accounts, about safehouses, I think it certainly didn't 

3 evoke any question about I don't know what you mean. He said, 

4 "No, we are not involved m anything other than informant 

5 development." 

6 Q Do you recall him specifically saying or mentioning 

7 the safehouses and the bank accounts to him? 

8 A I probably did, because that was what the articles 

9 I believe talked about, Swiss bank accounts and safehouses. 

10 The term, the reference of my question would not have been 

11 so confined as to say Swiss bank accounts; it would have been 

12 Swiss bank accounts, safehouses, or any other activities 

13 other than informant development. 

14 Q Are these your initials on the memorandum? 

15 A They appear to be, yes, sir. 

16 Q I assume that indicates when this came m, you read 

17 It; is that correct? 

18 A Yes. 

19 Q Did this memorandiun satisfy you as a complete 

20 representation of the things that 

21 had been doing since July of '85? 

22 A No , but I wasn't looking for a report of their 

23 activities from January of '85 or June of '85. I was looking 

24 for written confirmation f rom^^^^^^f that what he had told 

25 me during our periodic meetings, that our role was not 




UmASSlfJEH 



815 



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operational was confirmed. Had I asked for a complete ar.aiysis 
of what had transpired, certainly he would have provided that. 
What I wanted solely was^^^^^^^^^^^^Bto confirm in writing 
what he had ]ust told me durin^ur brief conversation. 

Q Is this description of 
activities consistent with what you now understand they had 
been doing? 

A No. 

.MR. GENZMAN: Can you explain what you mean by that? 
THE WITNESS: Yes. .^s a result of our administra- 
tive inquiry, I now know tha^^^^^Vwas involved in the 
movement of money from the United States. I know tha 

|were involved m receiving money, which I had 
been unaware of. And I now know that^^^^^Hwas actually m 
a travel status for a considerably longer period than the 
occasional weekend that I thought they were in travel status 
I mean that's the reason for our administrative inquiry. 
BY MR. WOODCOCK: 

Q If^^^^^^fanc^^^^^Bhad received, 
much as 515,000 from Colonel North, even assuming that they 
felt that 'that' was c'ia' money, is that something you would 
have expected them to report? 

A I would have -- yes, yes, it is. 

Q In the ordinary course when a DEA agent receives 
a disbursement of money from another agency, is that agency 



riitlfiLASStfiEd 



816 



19 



URI^n^FISffT 



92 



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supposed to try and make some record of that for DEA as well 
as the agency that's giving the money? 

A Absolutely. 

Q And in fact, that was done with the original 
550,000; was it not? 

A That was done with the CIA money, yes. 

Q Is there anything in DEA practice or regulations 
that forgives an agent from trying to make DEA's own record 
of a receipt of monies from another agency if those monies 
are considered to be covert .monies? 

A I'm sorry, is there anything m the record that 
forgives? 

Q That's right, or excuses an agent from creating 
evidence of receipt of monies from another agency if that 
agent understands the money is to be covert monies? 

A No. Our normal procedure requires when money is 
recieved, that documentation is made to protect the integrity 
of the agent and to protect the integrity of the organization. 

MR. WOODCOCK: I don't have any more questions at 
this point. 

MR. GENZMAN: Let me follow up, first of all, on 
how^^^^^^^^^^B and^^^^^^^^H became 
assignment . 

BY MR. GENZMAN: 

Q We know^^^^^^^^_ was a neighbor of Mr. Hickey 






817 



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UNfQfSSVflSET 



93 



who came upon this idea. Did^^^^^^^^^ have any particular 
expertise which made him suitable for this sort of assign- 
ment? 

A No .^^^^^^^^^^v as you stated, was a personal 
friend of Mr. Hickey. Mr. Hickey had talked to Mr. Mullm 

[behalf m the past and when he aske 
whether DEA would be m a position ^^^^^Haidn ' t know, although 

I has done a tour over seas .^^^^^^Bwas not familiar with 
the Middle East and^^^^Wmdicated at that point that his 
friend^^^^H^^^Hj^H would be the point of contact, a good 
point of contact to determine whether DEA would be in a 
position to assist. 

Q What particular expertise di 
for this sort of assignment 





1^^^^ extremely good at informant 

development . 

Q I guess I would have expected someone actually 
oversea^^^^^^^^^^^^^^^^^^l^^^^^^^^^^^^B to be 
the sort that you would want to get directly involved in 
this, someone who speaks Arabic and deals with the Lebanese 
all the time, or even someone like Abe Azzam who is based 
in the L . S . but is of Lebanese extraction and speaks Arabic. 
I'm ]ust wondering, was there any sort of discussion as to 



Wkl^lfiED, 



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uHi!fA^(FlgF 



whether there might be more suitable people tha 





94 



and 



A No. In any event, the individual would have been 
from headquarters because the SEO, by nature of an SEA, it's a 
headquarters-supervised endeavor .^^^^^^^^Bknew a ma]or 
source -- I think it was source one -- as did Mr. Azzara. So 

vould have been on^of those persons we would have 
considered had we been asked, think of a person suitable to 
work with this hostage locator task f orce .^^^^^Hwould 
not have. 

Q Do you know what use these two agents made of 
sources of other agent; 

A Yes. After the close of our office in Lebanon 
197 5 ,^^^^^^^^^^^^^^^1 was the for 

intelligence being -- drug intelligence coming out of 
Lebanon. .Many of the contacts that we had had, long-term 
contacts we had had in Lebanon were! 

|continue to furnish information on drug 
trafficking. So both^^^^H anc^^^^^^H had extensive contact 
witti^^^^^^^^^^^^^^^^^^^^^They had reviewed intelligence 
findings fi 






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95 

individuals working with terrorist groups m Lebanon to sit 
down and meet withl 

Q You mentioned at some point you became aware of 
money to be paid for the release of the hostages. I think 
you mentioned the sum of $1 million per hostage. I believe 
you said you became aware of maybe as late as May of 198~? 

A I believe I had had a conversation witr 
and he talked about bribing^^H^^^^^J that they were going 
to try to bribe^^^^^^^^^to get the hostages out. I believe 
as far as the money is concerned, it was the result of the 
internal review l actually learned about the million dollars 
and the involvement o^^H^^Hin the payment of a million 
dollars . 

Q One issue we are addressing is whether that money 
was in the nature of a bribe or in the nature of ransom. 
Can you give us your understanding as to how that money was 
to be used? 

A Yes. Any of the information that I have received 
and that subsequently based upon an interview or that I had 
with^^^^^H m May of 1987 indicates that the money was to 




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UNCtftSSii^T 



96 





Q Earlier I thought I heard you mention that after 
around June of 1985, you were not aware of the travel of 
I; IS that correct? 
A Yes. 

Q I didn't understand at that point how it came to 
be that the supervisors at DEA weren't aware of the travel 
of these people. 

A It was my belief that both^^^^Hand^^^^^^H were 
full time at DEA headquarters, and that if there was travel, 
it was very limited travel. 

As a result of our 19 -- our May, 1987, inquiry, 
I learned to my chagrin that that was not the case, that 
there was extensive travel, specifically b> 

Q Had you known of the extent of the travel, would 
you have wanted to be apprised of their travel after June of 
1985? 

A Absolutely. ^ i^ ' 

MR. GENZMAN: I have nothing fui;,tbe«*St this point, 
I might come back and follow up on an issue or two. 
Thank you. 
BY MS. NAUGHTON: 
Q I'm going to sort of hop all over the plain here. 







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97 

Is there anyone to your knowledge who works for 
DEA with the last name of Lawson, L-a-w-s-o-n? 

A Name is not familiar. 

Q You mentioned earlier when we were talking' about 
the cocaine case, via Colombia and Nicaragua, that Colonel 
North was briefed on. But I didn't get it straight as to 
how that briefing of the White House was set up or why the 
White House was briefed. 

A I don't know. With the questioning later the 
time frame was different. The case from what I now know 
was probably in 1984. I don't know why there was a briefing 
at the White House on the caseJ 




"lO called the meeting and why it was called, 
I'm sorry, I don't know. 

Q Is It your understanding the briefing took place 
before or after the informant had made this trip? 

A Well, the informant was the pilot of the airplane 
that flew in with the cameras so the briefing would have 
been after his initial trip. The question then arose as a 
result of the briefing whether it was safe for the informant 
to return to continue the operation, and this is what 
generated considerable interest around certainly, around 
Washington, whether because the briefing took place, that we 



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URQJA^EJSBT 



98 



1 had created a situation where there was a potential for 

2 leaks and that we would be putting the informant or under- 

3 , cover agents in jeopardy. 

4 Q Why was the White House briefed? 

5 A Again I don't know why the briefing was conducted 

6 because in ordinary operations, we certainly would brief 

7 another agency involved, but I don't know why at this time 

8 we briefed the White House. 

9 Q Would that have been done with Mr. Mullin's per- 

10 mission or could it have been done without his knowledge? 

11 A I honestly don't know. I did not know of the 

12 briefing before the briefing was conducted. It was only 

13 after the briefing that I talked to our agent or supervisor 

14 who conducted the briefing. 

15 Q Who was that? 

16 A That was Special Agen^^^^^^^^^^^H I just can't 

17 recall who would have had^^^^^^Binitiate such a briefing. 

18 Q This was at this point still an ongoing case. 

19 A This was an ongoing major investigation. 

20 Q Does DEA routinely brief the White House on ongoing 

21 investigations? 

22 A As I indicated, we do not. 

23 Q Can you think of any other instances involving 

24 Central America from the period of 1984 through 1986? 

25 A I can't recall specific cases nor can I recall 



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geographic areas, but, yes, we would prior, let's say, tc an 
indictment being returned, we would give probably Carlton 
Turner, Dr. Carlton Turner, we would advise Dr. Turner that 
an investigation was going to be announced within a day or 
so, so that the White House would have been apprised of the 
fact that a nia]or investigation was ongoing because of the 
high priority that this administration puts into drug law 
enforcement . 

Q And Dr. Turner's position was what? 

A He was Presidential adviser on narcotics matters. 

Q Would that be part of the White House sort of 
domestic policy staff or part of the NSC? 

A No. That would be domestic policy staff. 

Q Do you know whether or not anyone at the NSC 
would have been briefed on such occurrences? 

A No. No, meaning they would not ordinarily be 
briefed . 




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UNIRJASBaSET 



100 




general qi 

get more specific later. I know many committees of Congress 
have made inquiries regarding drug trafficking through 
Nicaragua and specifically either drug activities by the 
Sandinistas or by the freedom fighters. At the risk of 



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asking to go on and on, could you ]ust give us a thuiTib-nail 
sketch in terms of what DEA has found regarding drug traf- 
ficking in Nicaragua? 

A Yes. When the question first began about the 
involvement of contras or Sandinistas in drug Trafficking, 
we formed a unit at DEA headquarters within our intelligence 
branch to review all information that has been developed or 
is in the process of being developed by DEA to determine 
whether or not there is anything that we have that will 
confirm such involvement. We sent communications to the 
field, asked every field office where any allegations were 
received to send those to this unit in headquarters. We 
have not received any information to substantiate that there 
is an effort by either the Sandinistas or the members of the 
contras in any conspiracy to traffic in illicit drugs. 

There are individuals who say they are contras 
who are involved in trafficking and individuals who may be 
Sandinistas who traffic, but to date we have not been able 
to confirm or deny that there is such activity. 

Q Have any reports actually been prepared by that 
unit or by the DEA to send forward to Congress? 

A I don't know. Internal reports have been prepared. 
We have briefed Congressional staff members of Congress 
and have answered that question before committees of 
Congress. But whether an official report has been prepared. 






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102 



I don't know. 

Q I want to ask you specifically about Mario 
Calero. Are you aware of any episodes regarding a planeload 
of narcotics that was perhaps brought down? I'm thinking 
specifically in the July, 1985, time period. 
A I aiT> not. 

MR. BERMINGHAM: I think it's July, 1985. 

MS. NAUGHTON: I could be wrong about that. 

MR. BERMINGHAM: Possibly October, '85, in New 
Orleans and DEA allegedly busted the plane of Mario Calero. 

THE WITNESS: I'm not aware of it. 

MR. BERMINGHAM: If I get you, through your counsel, 
a date -- it's in a North note -- if I get that for you and 
call you, could you check that out for us? 

THE WITNESS: Absolutely. 

MS. NAUGHTON: I appreciate that. So we would 
sort of be interested in a run on Mario Calero as well as 
the^^^^^^Hcharacter 

BY MS. NAUGHTON: 
Q I want to ask you about another episode and 
this regards a Customs, basically, who was originally a 
defendant in a Customs case, later became a Customs informant 
and an informant for Secret Service, goes by the name of 
both Kelso and Williams, originally became an informant cut 
of New Orleans and was worked by those agencies out of 



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iJNiBRIIIfB^^ 



103 



New Orleans, and had information regarding a counterfeit 
ring. He was on or about August 27 of 1986 in Costa Rica 
working for those agencies and was then -- and this is 
according to Customs -- rousted by DEA agents who raided his 
hotel room and posed as Customs agents, where he then 
eventually fled m Costa Rica. 

Do you know anything about that episode? 

A I'm not familiar with the episode at all. 

Z Mr. Kelso then fled to John Hull's farm and I 

would like to ask you whether or not you know of any drug 
activities on behalf or by Mr. Hull or by individuals 
utilizing his farm as a base? 

A John Hull? 

Q H-u-1-1, in Costa Rica. 

A Not familiar with him. 




A No information at all on Mr. Hull. 

Q One other episode I want to ask you about. There 
was a person acquitted eventually in Pennsylvania that was 
acquitted under name -- of the name Z-a-d-a-h, who goes by 
many names, and had posed himself to be a Saudi prince. As 

out ,^^^^^^^^^^^^^^1 had this 

individual . 

Were you briefed at all on their contact with the 



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individual contemporaneously, that is, in either '85 or '85? 

A No. I am now aware of their contact with the prince 
but my awareness came as a result of our May, 1987, review. 

Q I want to ask a general question about the use of 
unappropriated funds. Is there a policy in DEA against the 
use of unappropriated funds? 

A The unappropriated funds is a generic term which 
I heard during the hearings by one of the star witnesses. 
We just have 31 U.S.C. 628 which outlines that funding can 
only be used for drug enforcement and that's what we use 
as our reason to expend or reason not to expend money. 

Q That's sort of a different question. That goes 
to how you would spend it. 

My question is, I guess, more pointedly, is, has 
DEA used any money from any private sources to pay a bribe 
or any source for information? 

A Not to my knowledge. 

Q When the Attorney General was asked about this 
during his testimony, he said private funds could be used 
because you do it all the time in the areas of forfeiture 
whereby when someone is acquitted on narcotics-related 
charges, the profits from that drug trafficking, such as 
assets and cash, can be then transferred to the government 
and then used by DEA in their operations. 

Do you consider this to be private money, such 



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105 



forfeited assets? 

A Well, let me first clarify, yes, that's true. When 
monies or property is seized and later forfeited to the 
government, the money can be used for enforcement purposes, 
but we cannot use that money for DEA operations because I 
think 0MB is most concerned about our having a private fund 
to conduct our operations. So it can be used -- the 0MB 
regulations are quite clear that if we see -- last year we 
seized 5400 million from traffickers. We can share that 
money with state and local officers. We cannot use it for 
operations. We can use a car that has been seized and 
forfeited. We can use a piece of property that has been 
seized and forfeited. We cannot use money in our operations 
except for trafficker-generated funds. 

If we are involved in an operation, an undercover 
operation, and we are, let's say, like Operation Pisces, 
the money laundering operation involving the government of 
Panctma, we can use money furnished to us by the traffickers 
to pay for the operation. But, no, we cannot use monies 
seized in our operations for operational purposes. 

Q Are those monies reverted to the general treasury 
of the United States? 

A They are reverted to the general treasury. 

Q So they become U.S. funds at that point. 



Yes. 



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U^RSBBffiT 






106 



MR. GENZKAN: Can I follow up on that point? 

MS. NAUGHTON: Sure. 

MR. GENZMAN: Let me refer to this memorandum of 
December 9, 1986, specifically the addendum which states, 
"As agreed previously other than actual operational expenses, 
no unappropriated funds were handled by DEA." 

Can you first of all tell us how it came to pass 
that this addendum was included with the memo? 

THE WITNESS: No. This addendum was written at 
the same time that he wrote the original piece. 

MR. GENZMAN: Was there any particular reason he 
called it an addendum to your knowledge? 

THE WITNESS: I don't know why. Perhaps, 
was the one who can best answer why. I have no idea why 
that was so stated and added as an addendum when in fact it 
was part of the original document. 

MR. GENZt-lAN: You don't recall having him writing 
out the rest of it and then asked him to add something about 
unappropriated funds? 

THE WITNESS: No. I had told him to write out 
what he had told me about our continuing involvement in the 
intelligence probe. He said who should I get to type it? 
I said I don't want it typed. I want you to deliver it in 
your own handwriting. He delivered it to my secretary, 
tr^^i^^^^^^tfand I hac^^^^^^^^H type up in 





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present form. 

BY MR. GENZMAN: 

Q That addeadum does specifically use the term 
"unappropriated funds"? 

A Yes . 

Q Do you know the context of that term? 

A N'o , I don't. As I mentioned earlier, the 
language, unappropriated funds, is not something we use 
m DEA and I have heard it referenced any of a number of 
times during the hearings and most specifically by one of 
the witnesses who continued to talk about unappropriated 
funds . 

Q Also the addendum mentions as agreed previously. 
Do you know anything about this agreement, who the parties 
were and what the agreement was? 

A No. When I read what^^^^^^^^^H wrote my concern 
was that he outline the fact that this was indeed an 
intelligence probe. When I saw the last sentence I assumed 
that what^^^^^^H was trying to say was that concerning my 
instructions that if it is not a drug initiative, DEA 
funding can't pay for it and that's why I didn't question 
It at the time. 

Q What you ]ust stated is an assumption? 

.\ It's an assumption. 

Q Z<- wasn't confirmed in conversation with 



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A No, It was not. 

Q I have nothing further on that point. 

BY MS. NAUGHTON: 
Q I want to show you a document and ask you if 
that IS your handwriting? 
A Yes , It IS . 

Q In that case I would like the reporter to ."nark 
this as Exhibit No. 1 for the deposition. 

(E.xhibit No. 1 was marked for identification.) 
BY .MS . NAUGHTON : 
Q Let the record reflect we have also marked as 
Exhibit 2 the memo of DecemJser 9, 1986 of which you have 
]ust been speaking. 

(Exhibit No. 2 was marked for identification.) 
BY MS . NAUGHTON : 
Q Directing your attention to Exhibit No. 1 which 
you have identified as your handwriting, are those, .Mr. 
Lawn, contemporaneous notes that you took during briefings 
with people at DEA regarding this subject matter? 

A Yes. As I recall, this was the result of a 
meeting that I had with^^^^^Hbut I don't recall why 
I didn't date my notes. 

Q Well, there's a reference at the top to_ 
February, '85, where there's a discussion of th 



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wmm 



y 



109 




ind so forth. So I gather this briefing 
took place after February of '85, is that correct? 
A Right. Yes. 

2 Directi.ig your attention then -- I apologize, we 
Tust have the one copy. Directing your attention to the 

, i page there see.ms to be a division about one-third of 
the way down and then a reference to Ed Hi^ey. Is this 
rerlective of a conversation with Mr. Hj^key or are we 
still in the middle of a conversation withl 

K No. This, as I recall, was based upon 

con^'ersation witr 

Q Okay. If you could please start reading for the 
record, since it is m your handwriting so we get an 
accurate representation, of the handwriting from the words 
Ed Hj^key on down. 
A Okay. 

The first column indicates 50,000, making reference 
to 550,000. The next line, which is underlined, said 

gc^^^^^^Mout early 
and then on the right column is the name 
'Buckley"-covert . The next line indicate 

I assume that would make reference 
to Buckley^^^^^l^^^^^^^^^^^^^^^^^^^^^^^^^^^H m 

19853^^^^^Hl mean^^^^^^^^^^^^^^^^^^^^Bl 
assume they are maki.ng reference 




-- meet 





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A That would appear to be the case here, which would 
contradict what Mr. Azzam had told me about what the CIA 

had told h; 




Q To the best of your recollection are these notes 
then of a conversation you had with^^^^^^^^^Hor Mr. 
Azzam? 

A I would have to say they are conversations with 




Q Do you recall did you take these -- there's three 
pages of them. Did you take them all at once or are these 
like your file? 

A Well, some of the information .^^^^^^^^^Bobviousiy 




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that IS something other than the hostage situation. I 
believe this is one meeting because in subsequent meetings 
I didn't ordinarily take notes because our meetings 
were brief. The meetings generally consisted ofj 
coming m, my meet ing^^^^^^^H not even sitting, saying what 
is the status? He said well, we have X number of informants 
doing the following. Things are going well or things 
are going poorly. Thank you. Keep me posted kind of 
thing . 

If you would please continue reading the notes. 
The next line says donor money not CIA. 
What IS that a reference to? 
I don't know. I don't know what I am. 
referencing. Let me read a little further here. CIAJ 
Iwill enter Beirut and then above Beirut I have 
underlined five questions. 

Q Now that would indicate that .Mr. Azzam wanted those 
personal questions answered? 

A That's right. It would probably indicate that 
as a result of the lack of satisfaction which people ha 

[that the informant was asked to go 
back in with a series of questions into Beirut. CI will set 
up meeting wi 
Clear wit^^^^^^^^^^K bring i n to ^^^^^^^^^^^^^^^Hth rough 



Q 
A 
Q 
A 







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UNlTdtESSitEfiET 



112 






Again my assumption is that they are talking about 
a plan to bring some of the hostages fron 

ll probably asked about how much this 
has cost and with an asterisk there is the notation we used 
20T.ops, 20,000 operations money/ 50,000 gone and I assume 
that would indicate the $50,000 which we received from the 
DIA because below that it says signed 103s, meaning that the 
informants had signed for receipt of that money. 

Then there is the notation on the side the number 

20, which is underlined, and PE/PI. This refers to operation. 

funding that we use for the purchase of evidence or the 

purchase of information. Then on the last notation is the 

name Oliver North underlined. 

Q I want to get back to that, but now you have 

basically read that whole entry. Again referring your atten 

tion to the part that says donor money not CIA, is it still 

your testimony then that you were not told t^ab-rhis money 

would come from private sources? 

A I don't recall being told that it was donor money 

1 
but as I see I have it written down here that it says 

donor money. Unfortunately I don't recall being told that. 

Q The reference to Oliver North, you have a star 

circled. Does that indicate anything in particular from 

vour notes? 



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ufnansfflosfeT 



113 



A No. 

Q Do you remember why you starred it? 

A No, I don't. 

Q If we could turn to the next page. If you could 
continue reading. 

A The first line again with an asterisk indicates 
new avenue of approach through! 

Then the next line says travel, 
CI, meaning confidential informant, 50,000, $50,000 and then 
in brackets 75,000, PE/PI, purchase of evidence, purchase 
of information, and the number 30 in a circle for travel. 

Q 





Do you understand what the reference is to 



No, I am sorry I don't know what the reference is, 
So you don't know where that money came from. 
No, I am sorry, I don't. 

Is that an unusual for PE/Plpurchase of evidence? 
Simply referring to the fact it's not a round 



75,000? 
A 
Q 
A 
Q 

number? 

A No. Unless it's a cumulative total. Again I don't 
remember the context of the conversation. It would appear 
I asked what is the total amount of money that has been 
spent or that has been distributed so far. The CI, 
obviously that is the 50,000 from the CIA. 76,000 PE/PI, 
we did not purchase any evidence to my knowledge m this 



|}llftLAC£l£l£IL. 



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effort. 30 tra-vei, I don't know what that refers to. 

The next line is in brackets, facilitators will 
not handle funds. Then below that I have again with an 
asterisk the name Judge Webster underlined. Then below that 
travel expenses, following line reporting to me and 
underlined twice with the notation reporting to me. I 
have a number 1 circled, contact with donor, and number 2, 
below that I mean, the notation provide code book. 

Q Do you know what those two references are to? 

A No, I am sorry. I don't know what they refer to. 

Q First of all, going to the facilitator's comment, 
facilitators and in brackets will not handle funds, 
is that a reference to the fact that the DEA agents would 
simply facilitate the movement of private monies but would 
not actually handle the funds? ~ 

A Again it's hard to recollect. It may be in 
reference to a question -- I don't know if you are talking 
about this funding -- are you involved in transporting, 
generating funding and he said no, we are not involved, 
will not handle funds. Facilitators, I don't know, nor 
do I have any idea why I would put down Judge Webster. 

Q Had you discussed with Judge Webstei 




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A No, because I was not aware of it. 
Q So in other words, you didn't get any 
instructions from Judge Webster, any advice regarding the 
agents being used only to facilitate the movement of 
private monies? 

A No. I certainly didn't. 

Q Does this note refresh your recollection that 
you may have been told then b^^^^^^f^^^^H that they would 
not handle private monies? 

A I assume that I was told. I am sorry, I ]ust 
don't recollect having been told. 

Q Do you recall whether you had given the instruc- 
tions that the agents should not handle the funds 
themselves? 

MR. BERMINGHAM: Do you see any reason why they 
shouldn't have handled the funds? 
THE WITNESS: Do I ? 
MR. BERMINGHAM: Yes. 
THE WITNESS: Yes, I do. 

MR. BERMINGHAM: What would have been the reason 
they shouldn't handle private funds? 

THE WITNESS: As I learned as a result of our 
administrative inquiry, money was to be delivered to a source 
either going into Leoanon or a source in -- who had come 



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out of Lebanon. I am not sure which, the money being the 
5200,000. When I reviewed our results of the interviews 
of the agents^^^^^B said that he couldn't deliver the 
money but that he would get his brother to deliver the 
money. As I read that I was astounded because if I can't 
deliver the money and I recruit someone else to deliver it, 
accompany me and deliver it for me, he is in fact an 
agent of the government. He is operating for the government 
and I was shocked in learning that^^^^^f had recruited 
someone else to travel with him to deliver the money because 
It didn't make any difference whether^^^^H himself did it 
or he had his brother do it, because in either case they 
were agents of the government. 

I thought that^^^^V with his length of 
experience, would have recognized that. 

MR. BERMINGHAM: My question is why di< 
feel, and why does this note indicate, they should not 
handle money? I have seen cases, you have probably seen 
it at the Bureau, I have handled on payoff money on a 
ransom for kidnap victims. We on occasions used private 
money. Why did he feel in this case he could not use, 
handle the private money? 

THE WITNESS: I think that was based upon what 
we now know the conversation between North ant^^^^^Bwhere 



i 




North said will you find someone to deliver t.his money or 



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should I find someone to deliver the money. This was 
North's instructions to^^^^^lthat^^^^Hcouldn ' t do it cut 
that either North would find someone to do it or 
should find someone to do it, and that is wher^ 
volunteered he could get his brother to do it. 

.MR. BERMINGHAM: That doesn't square with your 
.".otes where you say you shouldn't ha.ndle the money or 
someone said they shouldn't handle the money. Could it 
be because nobody wanted to be m the position of saying 
the U.S. government paid ransom? 

THE WITNESS: No. That clearly wasn't the case 
because at no time did the question of ransom ever come up. 

MS. NAUGHTON: I guess I will reask Bob's question, 
which 13 what would be wrong with the agent himself actually 
picking up money from Ross Perot or some other private 
donor and delivering this bribe money? 

THE WITNESS: Weil, first it would indicate to 
me that we were involved in an operation, that we were 
operational and if we are delivering money we are clearly 
operational. 

MR. GENZMAN: Can I inter]ect there? If you are 
delivering money to someone who gives you information, you 
consider that operational? 

THE WITNESS: No. If I am paying an individual 
for information he has given me on a DEA case, no, I tnir.k 



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that clearly 'is intelligence gathering. But if I am 

I 
giving someone money for something other than what we are 

supposed to be doing, I think we have then crossed the 

line of -- our line of authority as agents of the government. 

If I had been asked by^^^^^^^B oi^^^^^Bmay I deliver 

money, CIA ~.c-'-ey or private funding, that does trouble me 

and I would have gone to probably to our counsel's office 

to see whether that was appropriate. Because it ;ust does-.'-. 

seem to me to be appropriate. Certainly if it were a DEA 

case It would be, but here we are out assisting an intelli- 

ge.nce gat.hering and this seems to be more than that to me. 

MS. NAUGHTON: So if I can get at the heart of 
your concern, your concern is not with the propriety of 
using private money m general for let's say a drug-relatei 
DEA activity, but is rather connected to using the DEA for 
an operational role in intelligence gathering that is 
not drug related. 

THE WITNESS: Specifically in this case it would 
have been my concern that we had exceeded the bounds of what 
I thought our responsibility was and that was intelligence 
gathering. In a drug case our delivering money to a 
defendant or a suspect would not trouble me. 

MS. NAUGHTON: Delivering private money. 

THE WITNESS: Delivering private money that we 
were documenting, that wouldn't be a problem to me if, as 



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Bob had mentioned, if we have an investigation and we 

need money which, if we need 5500,000 flash money, if it were 

to take a period of time for us to get it cleared but a 

local bank said on your signature I will give you the flash 

money, we certainly would use that private money, but we 

would clearly indicate that this was money that came 

from the bank. 

But this IS more than that. This is operational 
m an area where I didn't think we were operational. 
BY MS. NAUGHTON: 

Q The reference again on the bottom of the page to 
a donor -- 

A Contact with donor. 

Q Does that refresh your recollection that you 
were told private monies were going to be used? 

A No. As I had mentioned -- no, it does not. 
I had been aware, as I said, at some point -- maybe I 
mentioned a million dollars -- that it was going to take a 
million dollars for each hostage that was to be retrieved 
from Lebanon and I thought that my recognition of that 
fact was in May of 1987, but obviously it was sooner than 
that. It would have been probably in June of 1985 when 
reference is made to donor money. 

Q This would be the one million per hostage as 
opposed to the 200,000 that was used to sort of grease the 



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wheels to get the operation moving? ' 

A Yes, because I thought that that 200,000 dollars 
was CIA money and it was only, as I say, m May of '87 
that I learned that it was not. 

Q Now, as to -- we have been talking aoout the 
propriety of using private money to pay these bribes. Coul: 
you comnient on t.he propriety then of using private monies 
to pay the expenses, the travel expenses and eating 
and lodging of the agents themselves? 

A Yes. In my mind's eye that is clearly wrong. 
In no case can I conceive of an agent traveling in an 
official capacity who would use anything other than official 
funding. What I mean traveling m an official capacity, 
if an agent is traveling on a DEA case in an undercover role, 
he would be paying cash, either his cash for which he would 
be reimbursed, or trafficker assets which are part of an 
ongoing operation. But whenever an agent travels on official 
business the money must be paid by that agency. I don't 
think we were allowed -- I know we were not allowed to have 
any private source of funding for official travel. 

Q Is that pursuant to regulation though? 

A I believe that is pursuant to regulation. I think 
It's 28 CFR, 28, Code of Federal Regulation. i 

Q I think It's also a statute as a matter of fact. 
You have si.nce learned, I gather, that both 




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>'ere paid from private funds; is that correct? 

A Yes. 

Q What I'm curious about is you were obviously 
ur.der the assumption DEA was paying their travel expenses, 
correct? 

A Yes. 

Q If that had been the case, they would have had to 
have filled out paperwork, submitted their tickets, their 
vouchers