Book Says Casey Knew Iran-Contra Plan

WASHINGTON--Former CIA Director William Casey, on his sickbed, told investigative reporter Bob Woodward of The Washington Post he knew all along about diversion of money to the Nicaraguan Contras, according to galleys of Woodward's forthcoming book obtained by U.S. News & World Report.

Woodward's book, "Veil: The Secret Wars of the CIA," seems to shed light on a mystery that has stumped investigators for almost a year. Former White House aide Oliver North is the only other person to have said that Casey knew about the diversion of funds from arms sales to the Iranians.

Investigators have been unable to reach a firm conclusion on what Casey knew about the affair, despite interrogations of top-level officials in the Reagan administration.

Casey died May 6 of pneumonia after being hospitalized for months because of brain cancer.

Woodward visited Casey in the hospital "and asked, almost rhetorically, whether he knew all along about the Contra diversion," the U.S. News & World Report article says.

"Casey nodded a frail yes," the report says.

When Woodward asked why, according to the magazine account of Woodward's book, Casey replied twice, "I believed." Casey nodded off to sleep before Woodward could complete his questioning.

"I didn't get to ask another question," Woodward is quoted as writing.

The article does not specify when Woodward's hospital visit occurred.

U.S. News released its article on the book late yesterday. It will be in the magazine's issue on newsstands Monday.

The book, published by Simon & Schuster, is to be released this fall.

According to the magazine, the book also reveals:

--"At one time or another," the CIA listed the late Lebanese President Bashir Gemayel and Salvadoran President Jose Napoleon Duarte among its "assets." Gemayel's Christian Militia received $10 million in covert aid. Duarte was more than a casual informant but was not fully controlled, the magazine says.

--The agency had more than 25 spies in the Soviet Union and Warsaw Pact nations as a result of Casey's determination to improve intelligence gathering.

--The CIA paid a $2 million bribe to Sheik Fadlallah to halt acts of violence against American interests by his Hezbollah Party in Lebanon. The bribe, paid after an assassination attempt failed, halted the hostilities.

--A CIA investigation into the car bombing of the American Embassy in Beirut in 1983 came to a halt after a suspect died under too vigorous interrogation with a cattle prod.

--The CIA under Casey launched at least a dozen covert operations around the world.

CIA spokeswoman Sharon Foster said the agency had not seen the book and could not comment on it. "After we've seen the book, we can't even guarantee that we're going to make a comment," she said.

U.S. News editor David Gergen refused to go into details about how the galleys were obtained, except to say it was through a third party.

The Washington Post planned to begin printing excerpts from the book in its Sunday editions, and Newsweek magazine, owned by the Washington Post Co., also planned to print excerpts next week. Both had syndication rights.