McFarlane Reportedly Ties Reagan to First Arms Deal

WASHINGTON — The White House denied Friday that President Reagan had prior knowledge of the first Israeli shipment of U.S. arms to Iran in August, 1985, but former National Security Adviser Robert C. McFarlane has said in sworn testimony that the President approved it.

During seven hours of testimony before the Senate Intelligence Committee in a closed session Monday, McFarlane said Reagan informed the Israelis through him that he would “condone” the Israeli shipment despite a U.S. ban on sending arms to Iran, sources said.

Three sources familiar with McFarlane’s testimony, which was first disclosed by the New York Times on Friday, said he told the committee that he followed Reagan’s instructions in telling the Israelis that the United States not only approved the shipment of American-made arms but would sell Israel replacement parts for the weapons sent to Iran.

One of the sources, a high government official, said: “McFarlane had no reason to lie. He didn’t take the Fifth Amendment. He just went up there and testified.”

Vice Adm. John M. Poindexter, who succeeded McFarlane as national security adviser, and former National Security Council aide Oliver L. North, who supervised the Iranian mission, have invoked the Fifth Amendment against self-incrimination in refusing to testify before the committee.

Last week, Poindexter, who directed the operation from the White House, resigned. North, who supervised field operations, was dismissed by Reagan after it was discovered that between $12 million and $30 million in funds from the arms sales was diverted to aid the contras fighting the Sandinista government in Nicaragua.

After dismissing North, who briefed him on activities of the NSC, the President telephoned him and thanked him for his service to the country. White House officials said that Reagan considered North to be extremely patriotic and courageous and dismissed him with great reluctance.

In his position at the White House, McFarlane reported directly to the President. However, when Poindexter was appointed national security adviser, Chief of Staff Donald T. Regan insisted that Poindexter report to the Oval Office through him.

‘Fell on Their Swords’

Sen. Ernest F. Hollings (D-S.C.), a member of the Senate Intelligence Committee, Friday declared that Poindexter and North, who is a Marine lieutenant colonel, “are two miliary men who fell on their swords to save their commander-in-chief.”

“They’re not testifying because they’re afraid of getting caught telling a lie,” Hollings said, and “they’re not testifying because they’re afraid of getting caught telling the truth.”

McFarlane’s testimony directly contradicted statements by Atty. Gen. Edwin Meese III, who last week said that the President had been informed only “generally” about the Israeli shipment after it occurred.

McFarlane was among those interviewed by a team of attorneys led by Meese in an initial inquiry. The findings of that inquiry served as the basis for the attorney general’s comments, a Justice Department official said.

Brief Interviews Cited

When asked about the conflicting accounts by McFarlane and the attorney general, the official said that the Meese team’s interviews “with any of the individuals, except North,” were conducted only for “a relatively short period of time. In this kind of thing, you want to go back to each, but there wasn’t that opportunity.”

In addition, the official said, Meese repeatedly qualified his statements with such phrases as “probably” and “what we know at this time.”

At the White House, spokesman Larry Speakes told reporters Friday that he was unable to find any staff members who could recollect that the President had approved the shipment either before it occurred or as it was taking place.

And, he said, “we do have a written record” prepared by a staff member “that directly contradicts the assertions made” in McFarlane’s reported testimony.

Speakes refused to say who compiled the record, which was based on recollections of the events and was written within a week or 10 days after the arms shipments became public in early November. Nor would he make the record public.

However, sources told The Times that the record, a chronology of the Iranian arms mission, was written by North.

Won’t Name Staff Members

Speakes refused to say with which staff members he had spoken, nor would he say whether he had asked the President for his recollections of the events. He said that the written record came from “a person in a position to be actively involved” but not necessarily a participant in the decision-making meetings.

“I have talked to people at very high levels that were participants in the meeting, and that is the summation of their recollections or lack thereof,” he said. “They don’t remember the President . . . authorizing a shipment before the fact.”

He added that the presidentially appointed Special Review Board studying National Security Council staff operations “presumably” will be able to examine the files of McFarlane, Poindexter and North “and see if they can reconstruct anything along these lines.”

Staff writers Ronald J. Ostrow and James Gerstenzang contributed to this story.