Calero: `Saudis funded us'
Layer by layer, secrecy over who spent what to support the contra guerrillas in Nicaragua is being stripped away. Between July 1984 and March 1985, when their United States aid had been turned off by Congress, the contras got almost all of their money from Saudi Arabia, contra leader Adolfo Calero told the Iran-contra investigating panels yesterday. His testimony indicated that contra fighters got no direct donations from the profits earned by US arms sales to Iran.
Congressional lawyers also said that Lt. Col. Oliver North, the former National Security Council aide, had used contra-supplied traveler's checks at tire stores and hosiery boutiques. This was the most intriguing of several bits of circumstantial evidence indicating that some of the money in the Iran-contra affair may have been used for private ends.
``We've all along suspected there might have been profits made here,'' said Sen. Warren Rudman (R) of New Hampshire, a panel member.
The silver-haired Mr. Calero, one of the contras' chief political leaders, was the first witness to appear before the Iran-contra panel from the Central American end of the affair's money trail. Calmly answering questions, he described greatly needing funds but not inquiring too closely into where the money was coming from. Between July 1984 and March 1985, when all contra funds came from private sources, Calero waited for Colonel North and associates to direct money into the contras' bank accounts, according to his testimony.
``I was never told when or how much would be arriving,'' he said.
During that period the contras received about $33.6 million, according to figures produced by congressional investigators. Of this, $32 million came from a foreign government, indentified in the hearings only as ``Country 2'' - widely reported to be Saudi Arabia.
Almost half the Saudi contribution arrived in one month - March 1985 - according to congressional figures.
About $200,000 of the contras' income during this time came from Lake Resources Inc., a shadowy firm controlled by Richard Secord. Mr. Secord, the retired general who appeared before the Iran-contra panel as its first witness, has testified he was involved in both US arms sales to Iran and the sending of funds to the contras. Calero said if the contras did get any funds directly from the Iranian sale, this $200,000 would be the money.
Secord told congressional investigators that the contras received $3.5 million from the Iranian sales. Calero said most of this money might have gone to Secord's ``enterprise'' - his private operation to airlift contra supplies. The contra chief added that as far as he was concerned the airlift had been a bust. It aided him with about 200 total hours of flying time, he said, and relatively few clandestine drops in Nicaragua itself.
``It was lousy,'' Calero said. ``I expected it to be a lot more efficient.''
The contras also got more than $1 million from a firm associated with two private fund-raisers who have already pleaded guilty to defrauding the US government by misrepresenting what they were gathering money for. Of the $33.6 million in contra income from private sources, about $19 million was spent buying weapons and ammunition. The bulk of this money went to another Secord-linked firm, Energy Resources.
Calero said that at the time of the purchases he thought this retired US officer was selling him arms at cost. He learned only recently that Secord had in fact marked up the weapons 30 percent.
This was but one of the hints of private gain. The other was the affair of the questionable traveler's checks. The contras in 1984-85 converted about 10 percent of the money into such checks, Calero said. In this form funds were easy to carry from country to country.
The contra chief gave a total of about $90,000 in checks to North. He did so, he said, largely because North talked of a private operation to free hostages in Lebanon, and he wanted to help.
Congressional investigators said about $25,000 worth of North's checks had indeed been used to support an unsuccessful hostage location operation. But they added that at least $2,440 in checks had been cashed by North personally, many at establishments that gave the transactions an appearance of personal use.
North used $100 in contra funds to buy two snow tires, for instance. He used $340 worth of checks at food stores, buying $118 in products and taking the change in cash. And a $20 check was made out to Parklane Hosiery, according to a chart prepared by investigators.
Hard-line conservative Adolfo Calero, civilian leader of the US-backed Nicaraguan Democratic Force, the contras' main fighting force, is one of the seven leaders of the recently reorganized contra directorate. Until February 1987, when he resigned, Calero had been one of the three leaders of the United Nicaraguan Opposition - the rebels' umbrella organization - and one of its main spokesmen.
Under the Nicaraguan dictator Anastasio Somoza Debayle, who was overthrown by the Sandinistas in 1979, Calero managed Nicaragua's Coca Cola plant. A leader of the Conservative Party, he opposed the Somoza dictatorship, but was also involved in US plans in the last days before the 1979 revolution to install a non-Sandinista government. In 1982 the pro-American Calero left Nicaragua to work against the Sandinistas.