Iranian-born businessman Albert A. Hakim disclosed yesterday that he had secretly set up a $200,000 Swiss bank account as a "death benefit" for the family of Marine Lt. Col. Oliver L. North on the eve of the White House aide's mission to Tehran in May 1986.
Hakim testified before the House and Senate committees investigating the Iran-contra affair that he never told North of the account -- dubbed "Button" -- which was drawn from profits in the sale of U.S. arms to Iran. Hakim said he mentioned the account to his business partner, retired Air Force major general Richard V. Secord, who balked at Hakim's initial proposal to put $500,000 into the fund.
At the time, North, Secord and Hakim were engaged in a covert enterprise that was using profits from the Iran arms sales to provide support to the Nicaraguan contras. Hakim said he provided the financial expertise, while North handled the political side and Secord took care of operations.
Hakim said he was so concerned about providing for North's family that he had his Geneva-based financial adviser and lawyer, William Zucker, contact North's wife and "tell her that there is a certain person who admires the husband and wishes to help out with the university and educational expenses of the children."
Zucker eventually met her at the office of his Philadelphia lawyer. According to Hakim he made inquiries about the family to see whether money could be channeled to the Norths through "relatives."
That approach failed, he said, as did a Zucker plan to have North's wife work for a real estate developer through whom the money would be channeled.
As of last Saturday, the Button fund was worth $216,144.77, according to records provided to the committee by Hakim, whose testimony yesterday was compelled under a grant of limited immunity from prosecution.
Establishment of that account was only one of several steps that Hakim took on his own to provide for the financial security of North's family. "Ollie, you are a part of the family," Hakim said he once told North. "For as long as one of us is alive, you need not worry about your family."
Hakim insisted that he had grown very fond of North and was not attempting to influence the man who was then one of the most powerful members of the National Security Council staff. Under questioning, however, Hakim said he knew it was unlawful to make a large gift to a U.S. government official.
The 50-year-old naturalized American also disclosed that he had written North into a will in such a way that North would gain control of $2 million from the arms-sales profits if both Hakim and Secord died. If all three died, the money would be divided equally among their heirs.
Secord testified last month that the $2 million was to be used as needed for the "enterprise" to underwrite Israel in insuring the leased aircraft used to carry U.S. arms into Iran last year. With accrued interest, the fund, which was set up in March 1986, is worth almost $2.2 million.
A second $2 million, Hakim testified, was set up last June as a reserve for use in paying "obligations" to a new group of Iranians with whom Secord and Hakim hoped to arrange the release of Americans held hostage in Lebanon. North, he said, was not associated with this fund because it "would not have been appropriate for a government official to get involved in handling those commitments."
The "commitments," he indicated, were to Iranian businessmen and government officials.
Hakim, who studied in the United States before returning to Iran to represent foreign companies doing business there, has long been regarded as a witness capable of unlocking many secrets of the Iran-contra affair, particularly the twisting "money trail."
He first met Secord in Iran in the 1970s when Secord was running the Air Force mission there. In 1980, he said, Secord, then at the Pentagon, drafted him to help in the Carter administration's attempt to rescue the Americans held hostage in Iran.
When Secord retired in 1983, Hakim asked him to become a 50-50 partner in Stanford Technology Trading Group International, a company that was seeking to market goods and services to Saudi Arabia. In late 1984, Hakim testified, Secord announced that he had been asked by the White House to procure non-American arms for the contras -- an opportunity that resulted in $11.4 million of business and profits averaging 20 percent to 30 percent.
Arms initially were purchased from a Canadian dealer, who was succeeded by Thomas Clines, a former CIA employe whom Secord had known for many years. Hakim said Secord told him that the operatio
was authorized "effectively by the president of the United States."
This operation was followed early last year by involvement in the U.S.-Iran arms sales, which Hakim said Secord coordinated not only with North but also with then-CIA Director William J. Casey and national security adviser John M. Poindexter.
Hakim said he understood that income from the arms sales was to be used "primarily to assist the contras and also try to make the so-called enterprise that we had created self-sustaining." According to Hakim, the total profits that actually went for arms, planes and other direct support of the contras came to about $3.4 million.
Hakim said he had never been told that the proceeds of the U.S.-Iran arms sales were to be "for personal benefit."
However, the figures released yesterday by the committees showed that about $1 million flowed into an account called Korel. Hakim said part of that sum was Secord's share of profits from arms deals with the contras not associated with the Iran transactions. Secord, he said, had told him in early 1986 that he was renouncing his profits from those sales because he was interested in returning to government and did not want that ambition to be compromised. However, Hakim testified he continued to pay Secord's share of profits into the Korel account because he was not sure his partner would get a government job.
Hakim agreed with Secord's testimony that North had directed that $900,000 of the U.S.-Iran arms proceeds go for other projects including Motorola radio equipment for a Caribbean country, a ship and payments on behalf of agents of the Drug Enforcement Administration who were working on a hostage- release project.
"You don't know what Ollie will need next so we have to have money available," Hakim quoted Secord as saying.
Secord had testified that $500,000 from the Swiss accounts was transferred to the U.S. partnership of Secord and Hakim. Secord said this was a "loan." But Hakim said it was money that had been paid to them for their "joint benefit" because their activities on behalf of the U.S. government had cost them an important client.
The mysterious international finacier provided several glimpses into the sleight-of-hand trade that he practices. He disclosed, for ex-ample, that their enterprise purchased arms for the contras for $2.1 million, sold them to the Central Intelligence Agency for $1.2 million -- yet the partners agreed to pay themselves $861,000 in "commissions."
Chief House counsel John W. Nields also questioned Hakim about his role in mediating with Iranian intermediaries early last year, when the White House through North was attempting to work out arms-for-hostages deals and open a dialogue with representatives of the Tehran government.
In February 1986, on the eve of the first direct meeting between North and Iranian officials in Frankfurt, a minor crisis arose when the CIA refused to provide a wig disguise for Hakim. He had to rush out and purchase one from a saleswoman who "was asking me questions whether I wanted to swim or I didn't want to swim."
During the meeting, he said, he was introduced as "a special interpreter for the president of the United States to impress the Iranians." The delegations, he said, were "absolutely on two different frequencies," with North speaking of "long-term relationships" and the Iranian official "focused on the purchase of weapons."
In the lobby after the meeting, he said, the Iranian official approached him and gave him a message.
"He asked if he could whisper into the ears of President Reagan to go ahead and for whatever money is needed to supply the arms."
Questioned further, Hakim explained that he was to tell the president that "money is no problem if he could get the weapons given to them and make a deal."Staff researcher Michelle Hall contributed to this report.