The continuing drama of the United States arms sales to Iran took an abrupt and surprising turn Tuesday with the revelation that between $10 million and $30 million from the sale had been channeled to the Nicaraguan contras - and that apparently only one man in the US government knew the deal's full details. That man was Lt. Col. Oliver North, a National Security Council staff member who was heavily involved in both the Iran deal and US support of the contras. Colonel North has now resigned. He may face legal charges. National Security Council chief John Poindexter, who also resigned over the affair, ``did know that something of this nature was occurring, but he did not look into it further,'' said Attorney General Edwin Meese at a press conference.
Critics of the Reagan administration said it was difficult to believe that North was the only official involved. House majority leader Jim Wright (D) of Texas said it was ``incredulous,'' and that if true it was a ``confession of a great void'' in White House foreign-policy making.
The tangled web of the money shuffle began with Pentagon weapons, progressed through shadowy representatives of foreign governments and ended up in secret bank accounts, according to Attorney General Meese.
The whole affair began, he said, with weapons being transferred from Defense Department stocks to Israel in 1985. These weapons were then sent on to Iran in two separate transactions, one in late August or September and one in November. The weapons included in the November shipment were in fact returned by Iran to Israel, for reasons Meese did not make clear.
Some administration officials have said President Reagan specifically authorized these shipments, from the first. Meese, however, disputed that. He said the September transfer of arms was carried out on the Israelis' own initiative.
``The President knew about it probably after the fact and agreed with the general concept of continuing our discussions with the Israelis concerning these matters,'' said Meese. The attorney general also implied that the Israel-Iran connection was not government to government per se, but was conducted with Israeli ``representatives,'' presumably private citizens.
The pattern of US-Israel-Iran arms transfers continued in 1986, with three or perhaps four separate shipments reaching Iran. And it was from the payments for some of these 1986 deals that millions for the contras was siphoned off.
There is as yet no suggestion of wrongdoing on the part of any of the Israeli representatives who handled Iran's payments for the US. The cash pipeline went like this, according to Meese: Israelis collected the money from Iran, then transferred to the CIA the exact amount of money owed for the weapons involved, plus a little extra for transportation.
The CIA was the US agent in this matter under authority of a presidential intelligence finding signed by Reagan in January 1986. CIA officials were not really involved in the operation, but simply turned the cash back in the US to the Department of Defense. The Pentagon was thus satisfied that it had received its agreed-upon price for the weapons, about $12 million. There was, however, something the Pentagon did not know. The weapons had apparently been sold for a figure of between $22 million and $42 million.
This extra money, profit as it were, was sent to numbered bank accounts in Switzerland that belonged to the contra forces fighting the Sandinista government in Nicaragua. At the time, official US support for the contras had dried up because of a fight over the issue in Congress.
The action by North may have been illegal because at the time of the transactions Congress had forbidden any official US aid to the contras.
Meese was careful to make clear that he did not believe this was a case of US government funds being misappropriated. ``We have no control over that money. It was never US funds,'' he said.