Congress: Funds Were Diverted

WASHINGTON--Congressional investigators, relying on Swiss bank records and other material provided by businessman Albert Hakim, have confirmed the diversion of more than $1 million in Iranian arms sale profits to Contras rebels fighting the Nicaraguan government, sources said late Thursday.

"We now have a way to trace the money from Tehran" to the rebels, said one source, who asked not to be identified by name.

No precise estimate of the size of the diversion was available, although sources said investigators have told members of House and Senate committees that the amount was over $1 million.

It was not clear whether investigators have been able to confirm a diversion in the range of $10 million to $30 million that Attorney General Edwin Meese III referred to on Nov. 25, 1986, when he first disclosed the movement of funds.

The confirmation of the diversion by congressional investigators came as Sen. Daniel Inouye (D-Hawaii), chairman of the Senate investigating committee, told reporters that Senate investigators probably will never be able to trace the affair's complex international money trail completely.

Inouye said that "on a scale of 10, we've got nine."

Inouye spoke after a closed door committee session at which lawmakers voted limited immunity from prosecution in order to compel the testimony of two witnesses. He described the two as "very minor figures" but refused to identify them.

Inouye also said that a key figure in the case, former Air Force Major Gen. Richard Secord, may agree to testify voluntarily at committee hearings. Other principal figures, including former National Security Adviser John Poindexter and his former NSC aide, Oliver North, have cited their constitutional rights against self-incrimination in refusing to testify.

Poindexter has been granted limited immunity, and investigators are expected to begin questioning him in private on May 2 or shortly after.

The public hearings are scheduled to begin on May 5 and last through July.

Hakim was questioned under a limited grant of immunity in Paris on Monday, and the material he provided gave investigators a major break in their effort to track money from the Middle East to Central America.

"Records that we obtained confirmed that some money was diverted," said one source. It was not clear whether Hakim, in addition to providing Swiss bank records, also handed over records from Caribbean bank acounts where money reportedly was placed for use by the Contras.