The MacNeil/Lehrer NewsHour

Intro ROBERT MacNEIL: Good evening. Leading the news this Wednesday, Lt. Col. Oliver North said he had no personal profit from the Iran contra arms sales, but he admitted creating phony documents to hide the gift of a security system at his home. The U. S. barred Ferdinand Marcos from leaving his exile in Hawaii and warned him against trying to destabilize the Philippine government. We'll have details in our new summary in a moment. Jim? JIM LEHRER: After the news summary, we devote the rest of the program to Oliver North's second day before the Iran contra hearing. We have extended excerpts of what he said with analysis by two members of the Senate Committee, Democrat Sam Nunn and Republican Orrin Hatch. News Summary LEHRER: Oliver North vigorously defended himself today in his second day before the Iran contra hearing. There were several dramatic high points during the former White House aide's testimony. One came when he denied having gained personally from his various White House works. Another was late in the day when he talked more generally about his activities.

Lt. Col. OLIVER NORTH: What I want you to know is I still don't think that what we did was illegal. JOHN NIELDS, House Counsel: So you think -- Col. NORTH: Please. It was not right. It does not leave me with a good taste in my mouth. I want to you to know that lying does not come easy to me. I want you to know that it doesn't come easy to anybody. But I think we all had to weigh in the balance the difference lives and lies. I had to do that on a number of occasions in both these operations. And it is not an easy thing to do. LEHRER: Our special coverage of North's testimony follows this news summary. Attorney General Edwin Meese gave a deposition to Iran contra lawyers today. A Justice Department spokesman said afterward that Meese did not know of a November 1985 shipment of arms from Israel to Iran until November of 1986. North told the committee yesterday he believed Meese knew about it before that. Meese will testify in public later this month. Robin? MacNEIL: The House of Representatives prepared to vote to halt or to delay administration plans to protect Kuwaiti ships in the Persian Gulf. The House has two measures before it to stop the re flagging of Kuwaiti ships, or to delay it for 90 days. Although the votes were unlikely to affect the operations, Democrats wanted the House to be on record as expressing serious concerns. Senate Democrats delayed until tomorrow the vote to end the Republican filibuster which has stymied their effort to delay the Persian Gulf plan. The White House said today that re flagging procedures were on schedule. LEHRER: The U. S. Government has issued a warning to former Philippine President Ferdinand Marcos: Stay in Hawaii and away from a plot to overthrow the Aquino government back home. U. S. officials delivered the message to Marcos in person Monday and Tuesday they told him he was barred from returning to the Philippines, or even from traveling to anywhere else in the United States. State Department spokesman Charles Redman announced the action today.

CHARLES REDMAN, State Department spokesman: The U. S. is seriously disturbed by indications that Mr. Marcos appeared to be seeking to destabilize the Aquino government, and was contemplating a return to the Philippineswithout the express permission of the Philippine government. The bottom line is that he is a guest in this country, but also as a guest, he has to obey U. S. law. And it's for that reason that Judge Sofaer and some other people have just visited him and that these restrictions on his travel have been imposed. LEHRER: U. S. border patrol agents near the Texas/Mexico border found 19 illegal aliens locked in a rail car today. All had lapsed into semiconsciousness, but were still alive. Officials said the men would have died if they had remained trapped much longer. They said temperatures in the car were easily 120 degrees. The men were found during a routine inspection in Hebronville, Texas, 60 miles east of Laredo. Last week, 18 aliens died when smugglers locked them inside a boxcar near El Paso, Texas. MacNEIL: The Reagan Administration's policy on AIDS drew some unusual criticism today. The President's son, Ronald Reagan, Jr. , had a press conference promoting a film, and new public service announcements on AIDS, said Education Secretary William Bennett's sex education programs are not enough.

RONALD REAGAN, Jr.: I don't want to pretend I'm an expert on William Bennett's views. He seems, however, to be proposing a kind of sex education in our schools that beyond the physiological rundown seems to focus mainly on telling young people to abstain from sex until some nonspecified time in the future when they might be married. I think that's unrealistic. And I think it'll be ineffective in dealing with AIDS, or even teen pregnancy for that matter. LEHRER: There will be no quick rush to judgment on U. S. Supreme Court nominee Robert Bork. Senate Judiciary Committee Chairman Joseph Biden said today confirmation hearings on the nomination will not begin until September 15, almost assuring the court will have only eight members when it opens its October term. MacNEIL: In El Salvador, an estimated 20 people were wounded today when police fired on striking government workers in downtown San Salvador. The shooting began after strikers tried to force their way through police to take over a state office building. Several police officers and two newsmen were among those wounded by policemen firing from outside the building. LEHRER: Finally in the news today, three Americans were kidnapped in the African nation of Sudan. Armed men claiming to be anti government rebels seized the three, two school teachers and an Episcopal priest. A British nurse was also kidnapped. There was no word on their whereabouts, and no ransom demands have yet been received. And that's it for the news summary. Now, Oliver North, Day Two, and what two senators on the committee think of it all. Oliver North Iran contra Hearings MacNEIL: Once again tonight, the NewsHour focus is on the Iran contra hearings and the second day of Col. North's testimony. We have extensive excerpts, then analysis by two committee members, Republican Orrin Hatch and Democrat Sam Nunn. First, Judy Woodruff once again takes us through today's testimony. Judy? JUDY WOODRUFF: Today's testimony centered on Col. North's involvement in the Iran contra deals, looking at the details of the Iran arms sales and the effort to aid the Nicaraguan contras. North described the structure of the Iran contra network. He asserted again his activities were authorized by his superiors, and that his activities were known by officials in the government, including among others Assistant Secretary of State Elliott Abrams. North admitted he made a gross misjudgment when he tried to hide the fact that he received a free home security system. But he denied allegations that he took any profit from the Iran arms sales. During the morning session, House Committee Counsel John Nields asked North a set of questions that outlined the arms sales operation. Nields began by asking about a secret January 1986 presidential intelligence finding that authorized use of a third party to handle the shipments to Iran.

JOHN NIELDS, House Counsel: Who was the authorized agent? Lt. Col. OLIVER NORTH, former White House aide: By that time it was General Secord. Mr. NIELDS: So General Secord was acting in connection with the Iranian initiative as an agent of the United States government. Col. NORTH: I'm not sure ''agent of'' is the correct -- and I'm not trying to split legal hairs -- the purpose was to have, as I understood it what Director Casey wanted was a plausible deniability separation -- that the CIA would not be directly face to face with the Iranians or the Israelis. We had weapons being sold by the Pentagon under the Economy Act to the CIA. And the CIA selling them to a third party or an agent, in this case General Secord, who would then complete the transactions. So there were -- if you will -- cut outs, or compartments in the action. Mr. NIELDS: Well, let me pose the question to you this way. The evidence that the committee has reflects that on the first two sales conducted pursuant to this finding, the United States -- Mr. Secord's Swiss bank accounts received $25 million as the purchase price. And from those bank accounts, $8 million was paid into bank accounts controlled by the CIA, leaving a difference of $17 million that remained in the Swiss bank accounts under Mr. Secord's control. My question to you is who in the United States government chose to structure the transaction so that there would be $17 million left in Mr. Secord's bank account? Col. NORTH: That was done for a number of purposes. One, to accrue sufficient funds to pay for Israeli replenishments for what had been shipped in '85. Second of all, to generate revenues to support the Nicaraguan resistance. And third, to cover the costs of these transactions. And ultimately further the cause of the approach that we made with the second channel. Mr. NIELDS: Who made the decision to structure the transaction in such a way that there was $17 million left for these purposes that you've described. Col. NORTH: Mr. Nir is the first person to suggest that there be a residual. And that the residual be applied to the purpose of purchasing replenishments. And supporting other activities. At that point and time in early January, he did not raise with me the specifics of supporting the Nicaraguan resistance. That proposal came out of a meeting in -- as I recall -- later in January where I met with Mr. Nir and Mr. Ghorbanifar -- I'm going to say London, but it may have been Frankfurt, or it may have been elsewhere. And in that meeting, I expressed our grave reservations as to how the structure -- which at that point and time focused on several thousand TOWS -- would result in what we wanted. And what we wanted were laid out very clearly in the January findings. And what we wanted was a more moderate regime ultimately in Iran, the cessation of Iranian Shia fundamentalist terrorism, and the return of the American hostages. Which I viewed as an obstacle -- and we had to overcome as a first step. Mr. Ghorbanifar by then was aware of my role in support for the Nicaraguan resistance. He had seen my name in the newspapers. He is a very well read individual. I had been told by the Central Intelligence Agency by Director Casey himself and by others in the CIA that they believed Mr. Ghorbanifar to be an Israeli Intelligence agent. Mr. Ghorbanifar took me into the bathroom, and Mr. Ghorbanifar suggested several incentives to make that February transaction work. And the attractive incentive for me was the one he made that residuals could flow to support the Nicaraguan resistance. I was not entirely comfortable with the arrangements that had been worked in the summer of 1985, and in the autumn/winter of 1985. I made it very clear. I was after all the person who in the United States government had the responsibility for coordinating their counter terrorists policy. I had written for the President's words, ''We will not make concessions to terrorists. '' For the very first time in January, the whole idea of using U. S. weapons or U. S. origin weapons or Israeli weapons that had been manufactured in the United States was made more palatable. I must confess to you that I thought using the Ayatollah's money to support the Nicaraguan resistance was a right idea. I think it was a neat idea. And I came back and I advocated that, and we did it. We did it on three occasions. Those three occasions were February, May and October. And on each one of those occasions as a consequence of that whole process, we got three Americans back. And there was no terrorism while we were engaged in it against Americans. Mr. NIELDS: Now, isn't it a fact that at that meeting you already knew that Ghorbanifar was willing to pay $10,000 a TOW? Col. NORTH: By that meeting, as I said earlier, we knew from our intelligence that he was willing to pay at least $10 million, and that he received a sum above that from the Iranians, considerably above that. Mr. NIELDS: Who decided how that $10 million was going to be used -- you, Mr. Secord, or someone else? Col. NORTH: I described for General Secord the purposes to which I thought that money ought to be applied. And throughout my long experience with General Secord, who after all had been referred to me by Director Casey, who was the one that suggested him back in 1984 as the person to assist us outside the government to comply with the Boland proscriptions -- I relied on General Secord to carry that transaction out. Mr. NIELDS: Whose decision was it whether the monies would be used for the contras or not? Someone in the U. S. government? Or General Secord? Col. NORTH: The decision was made that residuals from those transactions would be applied to support the Nicaraguan resistance with the authority that I got from my superiors, Admiral Poindexter, with the concurrence of William J. Casey, and I thought at the time the President of the United States. I later learned that the President was unaware of that aspect of these transactions. Mr. NIELDS: If those higher ups in the United States government from whom you sought approval decided that the $10 million should not any part of it be sent to the contras, or should all come back to the United States Treasury, that's what would have happened -- isn't it? Col. NORTH: Yes. Mr. NIELDS: So it was our money that was going to the contras, wasn't it? Col. NORTH: I disagree with your conclusion, counsel. I'm sorry, Mr. Chairman. I disagree with your conclusion. If my boss has told me, ''Ollie, every penny that comes from this thing goes right back into the treasury of the United States of America, that's exactly what I would have asked General Secord to do. And I am confident that is exactly what he would have done. Okay? I was never asked to do that. I got approval to do what I did. And I didn't do anything without approval. Mr. NIELDS: On whose authority did you enter into an arrangement with General Secord that he would be able to take compensation out of the proceeds of arms sales to Iran? Col. NORTH: Well, again I want to go back to what I said earlier. It was clearly indicated to Mr. McFarlane and Admiral Poindexter and in fact, almost drawn up by Director Casey how these would be outside the U. S. government and that I told them right from the very beginning that those things that he did deserved fair and just compensation. Col. NORTH: How much under your arrangement with General Secord was he to take from the proceeds of the sale of arms? Col. NORTH: I don't recall that we ever discussed a specific amount of what reasonable compensation was. As I told you, I trusted that General Secord was, and as far as I'm concerned today still is, an honorable man. And that when he said, you know, I'm being taken from my other activities, and I said, ''Fair and just compensation is appropriate. '' I trusted that he would do so. Mr. NIELDS: Our testimony that the committee has taken has shown that some approximately $4 million from all the sales were used for the contras. My question is this: Would it have surprised you in November of 1986 to learn that General Secord had used $4 million of the proceeds of Iranian arms sales for the contras and had $8 million remaining in the pot? Col. NORTH: I was surprised. And I want to note I still don't understand that. And I'm not willing at this point to accuse anybody. But I was surprised. WOODRUFF: For all the ground that was covered in the morning session North's attorney broke in at one point to accuse the committee of dragging out the proceedings.

BRENDAN SULLIVAN, North attorney: -- we're meandering through questions in a disjointed fashion so that when it comes Friday, you can say, Mr. Chairman, that it's necessary to continue on Monday, or perhaps Tuesday. You know, as a trial lawyer, I know a stall when I see one. There has never been a lawyer that's tried a case that didn't know that stalling and putting a weekend in between a witness's testimony so you can dissect his examination and ask further questions on Monday is not a good tactic. Sen. GEORGE MITCHELL, (D) Maine: Mr. Chairman I was present at the meeting to which Mr. Sullivan referred, and I believe the record should show that at that meeting, I stated to Mr. Sullivan that in my judgment his two requests -- one, that there be no prior private testimony, and second, that the testimony in public be limited to 30 hours -- were inconsistent and incompatible. And that the inevitable effect of not having prior private testimony would be to make the public testimony much longer than would otherwise be the case. And that in my view if he insisted in pursuing his demand for no prior private testimony, as he did, and as this committee acceded to his demand, that inevitably counsel would have to in public go over many areas that they would not have to do in private. WOODRUFF: North's attorney had little reason to complain during the latter part of the morning, as his client was given ample opportunity to answer a string of charges that have emerged over the past few months.

Mr. NIELDS: Col. North, did you have any interests -- personal interests I'm talking about now -- on any of the monies that flowed from the arms salesto Iran or that were kept in Swiss accounts under General Secord's control? Col. NORTH: Not one penny. WOODRUFF: One by one, counsel John Nields asked North about allegations that he had profited. Beginning with the security system installed at North's home last year and paid for by retired General Richard Secord.

Mr. NIELDS: There has been testimony that several thousand dollars was spent on a fence -- security system -- that was put in at your residence. And that the monies to pay for it came from General Secord. And my question to you is were you aware -- I take it there was a security system put in at your residence. Col. NORTH: The issue of the security system was first broached immediately after a threat on my life by Abu Nidal. Abu Nidal is, as I'm sure you and the Intelligence Committees know, the principal foremost assassin in the world today. He is a brutal murderer. I went to my superiors and said, ''What can be done?'' Contrary to what was said some days ago, this lieutenant colonel was not offered at that time any protection by the government of the United States, Senator Rudman. I asked for it, and I was told that the only thing that I could do is to immediately PCS -- permanent change of station -- you and I as marines know well what that means -- and jerked out of our home and sent to Camp LeJeune. In that I was preparing at the time to go to Teheran, and we didn't want to tell the whole world that, that was deemed not to be an appropriate thing to do. The next thing we looked to try to do was to find a secure telephone to put in my home to justify the installation of a United States security system. That too was impossible. Or not feasible. Or couldn't be done. At some point along in there, either General Secord raised with me, or I raised with him, this threat, and I told him I couldn't get U. S. government protection, I couldn't find a contractor to come out and do it myself. And he said, ''Don't worry about that. I've got a good friend,'' or associate, I don't remember the words, ''who's an expert. This guy has a company who does these things. '' And he shortly thereafter -- I believe it was around the fifth of May -- introduced me to Mr. Glenn Robinette. He was introduced to me as a man who, one, had been a former CIA, or perhaps I understood at the time, FBI, I don't remember, technical expert. A man who owned a security company. And a man who could immediately come out and do a survey and an estimate. He did. Now, I want you to know that I'd be more than willing -- and if anybody else is watching overseas, and I'm sure they are -- I'll be glad to meet Abu Nidal on equal terms anywhere in the world. Okay? There's an even deal for him. But I am not willing to have my wife and my four children meet Abu Nidal or his organization on his terms. And I want you to know what was going through my mind. I was about to leave for Teheran. I had already been told by Director Casey that I should be prepared to take my own life. I had already been told that the government of the United States in an earlier proposal for a trip might even disavow the fact that I had gone on that trip -- on an earlier proposal, and we can come back to that some time if you like. So having asked for some type of U. S. government protection for my wife and children, and having been denied that -- and perhaps for fully legitimate reasons -- and if there is a law that prevents the protection of American government employees and their families from people like Abu Nidal, then gentlemen, please fix it. Because this kid won't be around much longer, as I'm sure you know. We also have an exhibit we can provide for you that shows what Abu Nidal did in the Christmas massacres. One of the people killed in the Christmas massacre -- and I do not wish to overdramatize this -- but the Abu Nidal terrorists in Rome who blasted the 11 year old Natasha Simpson to her knees, deliberately zeroed in and fired an extra burst at her head, just in case. Gentlemen, I have an 11 year old daughter. Not perhaps a whole lot different than Natasha Simpson. And so when Mr. Robinette told me on or about the 10th of May that he could immediately install a security system, I said, ''Please try to keep it the $8,000, $8,500. I am after all a marine lieutenant, and I live on my salary. '' And he installed that system. And now let me go to your next question. Because I know it's coming, and it deserves an answer. I never got a bill. I didn't ask for a bill. and I never received one. I never asked, ''Where's the bill'' until well after it was too late. And even though I honestly believed that the government of the United States should have paid for it -- should have put it in. I then picked up the phone and asked for a bill. I got a bill. In fact, I got two of them. I didn't ask that they be backdated. But after all, Mr. Robinette is an old hand in the CIA. And then, as I told you yesterday, I was going to tell you the truth, the good, the bad and the ugly. Well, this is the truth. I did probably the grossest misjudgment that I've made in my life. I then tried to paper over that whole thing by sending two phony documents back to Mr. Robinette. It was not an exercise in good judgment. WOODRUFF: Nields next wanted to know about records showing North cashed hundreds of dollars in travelers checks supplied by Nicaraguan contra leader Adolfo Calero.

Col. NORTH: The fact that I had those funds available was known to Mr. McFarlane, Admiral Poindexter, to Director Casey, and eventually to Admiral Art Morew over at the Pentagon. It also came to be known to others -- some of whom you've had testify here. The funds were used initially only to support the Nicaraguan program. But eventually it was broadened to include other activities as well. There were times when that account was down to zero. No money in it. I didn't have any travelers checks, and I had handed out all the cash. Not to myself, to others. Under those circumstances, I would use my own money, Lt. Col. Oliver North's paycheck money, his own money that he had earned, and I would use it for operational expenses. I would therefore make a notation in the ledger, ''spent -- $250 on going to Atlanta to meet with somebody. '' And the next time I got cash, or travelers checks, I would use those checks to reimburse myself. Every single penny on the checks that you saw that came to me, was used to pay an operational expense on the scene or to reimburse myself. I never took a penny that didn't belong to me. And I realize that this hearing is a difficult thing -- believe me, gentlemen, it isn't as difficult for you as it is for a guy that's got to come up here and tell the truth. And that's what I'm trying to do. And I want to make it very clear that when you put up things like Parklane Hosiery, and you all snicker at it. And you know that I've got a beautiful secretary. And the good Lord gave her the gift of beauty, and that people snicker that Ollie North might have been doing a little hanky panky with his secretary. Ollie North has been loyal to his wife since the day he married her. And the fact is I went to my best friend, and I asked her, ''Did I ever go to Parklane Hosiery?'' And you know what she told me? ''Of course you did, you old buffoon. You went there to buy leotards for our two little girls. '' And the reason I wrote the check to Parklane Hosiery, just like the checks at Giant, was because I was owed my money for what I had spent in pursuing that covert operation. WOODRUFF: Finally, there was the question about a so called death benefit set up for North's family by Secord associate Albert Hakim. A benefit to be used in the event something happened to North on an arms deal trip to Iran in May of 1986.

Col. NORTH: Mr. Hakim said to me, ''If you don't come back, I will do something for your family. '' He did not say ''we'' as I recall. He said, ''I. '' Now, by that point and time, I had come to know that Mr. Hakim was a wealthy man in his own right. I was grateful for the assistance he had been providing in translating over several very difficult days of discussions with the Iranians. And several days thereafter, when he suggested that my wife meet with his lawyer in Philadelphia, I agreed that my wife should do so. The purpose as I understood it, of that meeting, was that my wife would be in touch with the person would if I didn't return do something for my family. My wife went to the meeting in Philadelphia several days thereafter, and you have notations in the notebooks that I surrendered to you about what happened. She went to a very brief meeting. There was no money mentioned, no account mentioned, no amount mentioned, no will mentioned, no arrangement. The meeting focused on how many children I had, their ages, and a general description of my family. A brief meeting in the office of, as I remember, of Touche Ross, a respectable firm in Philadelphia, with a lawyer. I then went, and thank God, returned safely from (unintelligible). WOODRUFF: During the afternoon, House Counsel Nields continued with questions about efforts to resupply the Nicaraguan contras. North defended his actions and emphasized the broad nature of the assistance given to the rebels.

Col. NORTH: This is the only anti Communist resistance movement that ever unified. We haven't succeeded in doing that in Afghanistan. We didn't succeed in doing that in Angola, or Ethiopia, Guinea Bissau, Mozambique, or other places where resistance movements have grown up to fight communism. It happened here. It happened here because I think there were so many people working so hard for unified purpose that that was a lot of what we did. We also delivered food and clothing and medical supplies. We provided prosthetic limbs for people with their arms and hands blown off, and their legs. And tried to look after the families of those people who'd been killed or badly wounded and were no longer productive wage earners. And so there was a lot done. In a word, Director Casey said it was a full service covert operation. And I'm not too sure that's a bad description. There was a lot of people who cared. And I say we cared because a lot of us like Rob Owen and General Secord and Bill Haskell and myself came to know the young campesino who is fighting this war. These are young men and women who gave up everything they had and they fled a totalitarianism communist regime. And they fled to another country, because they could no longer live within the ones they were born in. And they took up arms. I didn't create the Nicaraguan contra, or the Nicaraguan freedom fighter. And the CIA didn't create it. The Sandinistas created it. But we all cared enough to do all of those things. Not just the way you have left it, sending guns, sending guns, sending guns. WOODRUFF: Counsel Nields then asked North just who in the government knew about what he had called his ''full service operation'' to support the contras.

Mr. NIELDS: I'm going to ask you a few questions now about who in the U. S. government was aware of this full service operation? Was Mr. Abrams at the State Department? Col. NORTH: Well, I certainly believed he was. Mr. NIELDS: Well, did you ever talk to him about it? Col. NORTH: Yes. I honestly believed that there were many, many people within the Executive Branch who had a grasp, if not in specific detail, then in sufficient detail, that they knew who to turn to when they wanted something done. And so when the airplane being flown by Captain Bill Cooper, and co piloted by Buzz Sawyer, two of the braver people I have ever met on this planet, were shot down out of the skies over Nicaragua by a surface to air missile, I was the person who was called to raise the money to pay for the consular services to retrieve their bodies. Mr. NIELDS: Who called you Col. NORTH: Mr. Abrams. Mr. NIELDS: When did Mr. McFarlane, to your knowledge, first learn that the proceeds from the arms sales to Iran had been used for the contras? Col. NORTH: My recollection is that I first confirmed it with him during the May trip to Teheran. Mr. NIELDS: When did Director Casey first learn of it? Col. NORTH: Actually, my recollection is Director Casey learned about it before the fact. Since I'm confessing to things, I may have raised it to him before I raised it with Admiral Poindexter. Probably when I returned from the February -- from the January discussions. Mr. NIELDS: You're referring now to the discussions, the trip during which you had discussions with Mr. Ghorbanifar in the bathroom. Col. NORTH: Yes. I don't recall raising the bathroom specifically with the Director, but I do recall talking with the director, and I don't remember whether it was before or after I talked with Admiral Poindexter about it. But I was not the only one who was enthusiastic about this idea. And I -- Director Casey used several words to describe how he felt about it -- al of which were effusive. He referred to it as the ultimate irony, the ultimate covert operation kind of thing. And was very enthusiastic about it. Mr. NIELDS: Now, you had an interview with Attorney General Meese on the 23rd of November 1986, at which the issue of use of these proceeds for the contras was discussed. Col. NORTH: Yes. Mr. NIELDS: Do you have any reason to believe that the Attorney General was aware prior to that time that the proceeds from the Iranian arms sale were used to support the contra? Col. NORTH: No, I have no reason to believe that he was. But when he asked me, I told him. It was fairly well known, certainly to those men -- although they may all deny it -- what I was doing. There came a time when the man at the top of that list, that on the occasion of the retirement of Ambassador Robert Oakley, took me aside just weeks before I was summarily fired, put his arm around my shoulder, and told me what a remarkable job I had done keeping the Nicaraguan resistance alive. There is no doubt that they knew what I was doing. WOODRUFF: As counsel Nields neared the end of his round of questioning, he pressed North on who had given him authority to run a covert operation out of the National Security Council at the White House.

Mr. NIELDS: Col. North, what was your legal authority for conducting a full service covert operation to support the contras? Col. NORTH: The authority that I sought from my superiors in setting up the activity to begin with, and then the conduct of it. Mr. NIELDS: You're aware that every covert activity abroad requires a finding by the president to support it, aren't you? Col. NORTH: I am aware that covert actions undertaken by the CIA do indeed require a finding. I am not aware, as you have just indicated, that ''all'' covert action require a finding. Mr. NIELDS: You are aware that there was a law of Congress -- passed by Congress -- a statute of the United States in effect at that time which prohibited the use of funds available to any agency involved in intelligence activities to support militarily or paramilitarily the contras. Col. NORTH: I'm not sure I understood the way the Boland Amendment, or Boland Proscription, of October 1984 read exactly the way you just said. What I am certain is that we, Director Casey, other lawyers, looked at that and said that the NSC staff was not proscribed from doing those activities. Mr. NIELDS: I take it you were aware, however, that in the summer of 1985 there were a number of press reports that raised questions about whether you were engaged in activities which violated this law, the Boland Act. Col. NORTH: Yes, and I think what it focused on is somewhere along the line, there was someone who made the assumption that we in the NSC were spending part of the NSC budget to support the Nicaraguan resistance. And we didn't. Mr. NIELDS: And following these newspaper articles, there were various inquires by committees of Congress. Col. NORTH: That is correct. Mr. NIELDS: Well, I will ask you to turn to Exhibit 114. It's a letter from Chairman Hamilton of the House Intelligence Committee referring to recent press accounts of alleged activities by National Security Council and it asks for a description of those activities. And if you will turn to Exhibit 118, my question is going to be, ''Is that the reply that was sent back to Chairman Hamilton?'' And in the last sentence of that paragraph states, ''Our emphasis on a political, rather than aa military solution to the situation was as close as we ever came to influencing the military aspect of their struggle. '' Is that statement true, sir? Col. NORTH: Well, it's partially true. I'm not saying that all of the rest of it's true. What I'm saying to you is that I continue to believe, as I did then, that there will ultimately have to be a political solution. Mr. NIELDS: The part of it which is untrue is the part that says that this was ''as close as we ever came to influencing the military aspect of their struggle. '' Isn't that true, sir? Col. NORTH: With using appropriated funds? No. But I'm not going to nit pick this thing. Mr. NIELDS: That's a false statement, isn't it? You were conducting as you testified here most of the afternoon, a full service covert operation to support the military efforts of the resistance. Col. NORTH: Yes, that is true. Mr. NIELDS: And this statement that emphasizing a political rather than a military solution was as ''close as we ever came to influencing the military aspect of their struggle'' was just false, isn't it? Col. NORTH: It's not entirely false, but it is false. And I admit there are other parts of this thing that are false. I will tell you right now, counsel, and all the members here gathered, that I misled the Congress. Furthermore, I did so with a purpose. And I did so with a purpose of hopefully avoiding the very kind of thing that we have before us now. And avoiding a shutoff of help for the Nicaraguan resistance and avoiding an elimination of the resistance facilities in three Central American countries -- wherein we had promised those heads of state on my specific orders -- on specific orders to me I had gone down there and assured them of our absolute and total discretion. And I am admitting to you that I participated in the preparation of documents to the Congress that were erroneous, misleading, evasive and wrong. And I did it again here when I appeared before that committee convened in the White House Situation Room. And I make no excuses for what I did. I will tell you now that I am under oath, and I was not then. Mr. NIELDS: We do live in a democracy, don't we? Col. NORTH: We do, sir, thank God. Mr. NIELDS: In which it is the people, not one marine lieutenant colonel that get to decide the important policy decisions for the nation. Col. NORTH: Yes. Mr. NIELDS: And part of the democratic process -- Col. NORTH: Part of that answer is that this marine lieutenant colonel was not making all of those decisions on his own. As I indicated yesterday in my testimony, Mr. Nields, I sought approval for everything that I did. Mr. NIELDS: But you denied Congress the facts. You denied the elected representatives of our people the facts upon which they needed to make a very important decision for this nation. Col. NORTH: I did because of what I have just described to you what was our concerns. I would also like to point out one other thing. I deeply believe the President of the United States is also an elected official of this land, and by the Constitution as I understand it, he is the person charged with making and carrying out the foreign policy of this country. I believed from the moment I was engaged in this activity in 1984 that this was in furtherance of the foreign policy established by the President. I still believe that. I'm not saying that what I did here was right. And I have just placed myself, as you know, counsel, in great jeopardy. LEHRER: Oliver North, Day Two, as seen now by two members of the Senate Investigating Committee, Republican Orrin Hatch of Utah, and Democrat Sam Nunn of Georgia. They're with us from Capitol Hill. Senator Nunn, what do you make of Oliver North after these two days? Sen. SAM NUNN, (D) Georgia: Well, I think from a public relations point of view, he's acquitted himself very well. I think he's been articulate, that he comes across as a clean cut, dedicated, zealous type individual who is a true patriot. I think he admitted an extreme vulnerabilities, that he had lied several times -- he used the word ''lied'' -- he admitted the security fence being paid for by someone else, which was another vulnerability. So over and over again, he's minimized the damage and done well in terms of scoring public relation points. I believe that the larger policy has gotten lost here, and I hope we can focus on it before this is over, because it's apparent that the covert operation got to be the end in itself for other than looking at the policy. What were we doing in the Gulf? Were we really trying to help the aggressor on the ground war between Iran and Iraq arm themselves to basically either prevail or extend the war, or were we trying to tilt the psychological balance to Iran and are we now making up for that by having to flag Kuwaiti vessels? These are the policy questions and that's one of the dangers of covert activity. Sometimes you have to have them, and I think they're vital to the country in certain cases. But when they become all dominant, and you lose the track of the policy that's behind it, it can be extremely dangerous for our foreign policy. LEHRER: Senator Hatch, what do you think generally about Col. North up to this point after two days? What's your general -- we'll take up some of the specifics that Senator Nunn just raised. Sen. ORRIN HATCH, (R): I think he's a very sympathetic personality, and I think people out there are watching this, and he makes a heck of a witness. I also believe that he's been very candid in his comments to the committee, even to the point of admitting that he did cover up, he did lie. But however there are a number of things that are very important. One is, he's made it very clear that there's no evidence, we have not received any evidence before the committee yet that the President knew about the diversion of funds to the contras. I don't believe we will receive any evidence. And he's been very forthright about that. I think that it's important to look at his testimony because he's had to admit a number of things. But he's also made it clearer that one of the biggest problems with carrying out policy is a Congress that sends contradictory messages that are ambiguous, contradictory and sometimes completely flying in the face of the President. And I might add policies that literally -- or should I say actions that literally almost look like 535 mini secretaries of state up here telling the President, who has to conduct foreign policy, what to do. LEHRER: Well, let's take one theme -- one major theme of his testimony yesterday as well as today. And that's the whole thing about covert operations. And his defense of covert operations -- and as he said at one point today, he had to weigh lives against lies. Senator Nunn, is that a valid argument from your point of view? The one he made today? Sen. NUNN: I'm not sure I follow exactly the question, Jim. Do you mind restating that? LEHRER: Well, do you buy his argument that when you weigh -- sometimes you -- when you do a covert operation, you have to weigh lives against lies -- meaning lies are justified -- to the Congress and others. And that was his position today. Do you buy that in general terms? Sen. NUNN: No, I don't think I buy that at all. We have a number of covert operations ongoing all the time that the Intelligence Committee is briefed on -- both Intelligence Committees. We fund those covert operations. They're necessary for our security. Many of them involve more danger to lives than the one we're talking about now. This is -- it seems to me simply not -- it won't stand up under our system of government. Now, if we have a monarchy where we have only the President making foreign policy, and the President can decide how the funds are allocated, if the President can do everything he wants to in covert activities, that theory would follow. But under this system of government that our constitutional forefathers set up, it simply does not follow. The other dimension -- forgetting for a moment about what was told the Congress. Let's assume even that we have a monarchy for a moment. What about lying to the various principals in the administration? When the Secretary of State is misled, when over and over again the CIA has either been misled or some components of it are not telling others what was happening. You can't run a successful covert operation even in a monarchy if people are going around misleading each other. Sen. HATCH:No, I don't agree with that. LEHRER: Senator Hatch, do you think lies are ever justified to protect a covert operation? Sen. HATCH: I don't think lying to the Congress is ever justified. In spite of the fact that we know that Congress occasionally gives up secrets and releases secrets. Senator Inouye at the end of the session chided Col. North because he said in his whole time as Head of the Intelligence Committee, there had been no leaks. Well, I can tell you in my two years on the Intelligence Committee there have been leaks. And I'll just cite one. Approximately 150 page top secret document that comprised all of our work last December in the Intelligence Committee -- it was leaked by a member of the committee to NBC, to the detriment of everybody else in news in this country, and I might add to the detriment of the whole country. So if you want to talk about leaks, there's one. And I have to admit -- I can give you some other illustrations, too. Col. North I think properly was concerned about that. And other people down there at the National Security Council. But that still does not justify not telling Congress the truth. And he pretty well admitted that today. LEHRER: Senator Hatch, what about another main point here. His explanation of the personal things, the -- all the things from his wife's going to Philadelphia to the security system. How did those go down with you? Sen. HATCH: I thought they went down pretty well with most everybody. Because he admitted the security fence was one of the biggest mistakes of his life. That he did write the phony letters. And he felt very badly about that. And I believe the rest of his story came across very well. For instance, on the travelers checks. You know, a lot of people in the press didn't really report this as I viewed it. When Fawn Hall was there, she wanted to go to the (unintelligible) and didn't have any money. He didn't have any money, so he gave her three $20 travelers checks. He told her, he said, ''Look, I'll give these to you, but you have to pay them back the money, because this is not my money. '' Now, I think that was a trigger for people to say -- to look at to say, ''Maybe Oliver North did handle the monies properly. '' You know, one thing that I found wrong with this whole process is there's been too much judgment made before people have heard Oliver North and John Poindexter. I think we've got to wait until the end of the process before we make judgments on this matter, be less prosecutorial, more fact finding, and in the end do what's right for the American people. LEHRER: Senator Nunn, what do you think on the personal issues? Sen. NUNN: Well, I agree with my friend, Orrin Hatch, that we shouldn't be making any premature judgments here. There are points of skepticism. There are points where I really want to believe Col. North, because I think over his whole career he has done what he's thought in the best interest of this nation. I may not agree with him on policy, but I think his primary motivation has been patriotic. I do have questions about why he destroyed a ledger right after being told by Director Casey that he needed to get himself a lawyer because he may be sued. Because that ledger would help him now. And the destruction of it is harmful. I also have questions about why he couldn't get security. If we've got a marine officer who's in the top position in the National Security Council who has been threatened by terrorist organization, that cannot get security, then we've got something fundamentally flawed in our system of government. I want to probe that one, because if he's correct, then we need to take some corrective actions. LEHRER: Senator Nunn, speaking of flaws, the colonel's lawyer has said on more than one occasion now, or suggested very strongly that the whole process up there on the Hill, of taking this man through this, a man who faces criminal prosecution, is a flawed process. Do you agree with that? Sen. NUNN: Well, this is a very skillful lawyer. He's one of the best criminal lawyers around, and he's doing what he needs to do for his client. But that doesn't mean I have to agree with him on many points. Every now and then I agree with him, but fundamentally, he's just a good lawyer making a few good points. Sen. HATCH: He's more than a good lawyer. He's an excellent lawyer. And frankly, he's right. Everything he's done has been protective of his client. And I don't think we need to take two days to go through the facts that we've gotten so far. I think they could've gone through a lot faster. You can ask leading questions in aa Congressional Hearing, and I agree the (unintelligible) of evidence don't apply. But the thing that I kind of get upset about, and I think the American people are getting upset about, is that there a prosecutorial air about the committee instead of a fact finding air. As though we're actually the court of final judgment. We're not a court. We're not prosecutors. We're trying to find out the facts. Let the chips fall where they may once we do. And I think we ought to withhold judgment until the end of the process. I remember when some of these things that have hurt Oliver North presented by hearsay testimony, anonymous tips, not real courtroom testimony, were presented, he was judged and judged badly. Well, listening to him, you get a different impression, and I think we ought to wait. LEHRER: All right. We will wait with you. Thank you both very much for being with us tonight. MacNEIL: Once again, the main stories of the day. Lt. Col. North denied profiting from the Iran arms sales, but admitted creating phony documents to hide a home security system he received as aa gift. Late today, the House of Representatives defeated an effort to halt President Reagan's plan to provide U. S. protection for Kuwaiti tankers in the Persian Gulf. And the U. S. said Ferdinand Marcos could not leave the Hawaiian island of Oahu, for fear that he would try to destabilize the Philippine government. Good night, Jim. LEHRER: Good night, Robin. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.