Before the Iran-contra affair was uncovered, the Justice Department already had indications of other diversions of funds to the contras - including United States government money for weapons. The information, released yesterday by the Iran-contra investigating committees, is contained in an internal Justice Department memo written last November. The memo said the department's fraud section ``has conclusively established that some of the money appropriated for humanitarian aid was used to buy weapons, an act clearly prohibited by the Boland Amendment.''
The weapons purchases were concealed through a scheme which ``involved the submission of false documentation to the US government and was committed by `unilateral assets' of the CIA,'' said the memo, written by Ralph D. Martin, a lawyer in the Justice Department criminal division's public integrity section.
Some of the money paid by an organization set up to administer $27 million in congressional appropriations for humanitarian aid to the contras ended up in secret accounts in the Cayman Islands, the memo added. Other money was ``apparently used to bribe members of the Honduran military,'' it said.
The document said there are receipts showing that the contras received humanitarian aid, but that many of the receipts were signed with false names ``and some have been conclusively demonstrated to be fraudulent.''
The six-page memo was addressed to William Weld, assistant attorney general in charge of the Justice Department's criminal division. Mr. Weld's office reported Wednesday that the document was a draft that was never sent to Attorney General Edwin Meese III.