Excerpts of yesterday's testimony by former national security adviser John M. Poindexter. The questioning began with Rep. Thomas S. Foley (D-Wash.).

In September of 1986, did {Lt.} Col. {Oliver L.} North give you a photo album {of the contra resupply operation} to show to the president?

I don't recall seeing the photo album. I do recall being told it was available. My recollection is that Col. North told me that he had a photo album if I wanted to show it to the president. At that point, we were heavily involved in other issues and I did not accept his offer to show it to the president . . . .

So to your knowledge, the president never saw the album.

No.

Foley then questioned Poindexter about North's contacts with David Walker, a British mercenary who helped the contras with paramilitary operations.

Were you concerned about the United States government being involved through an intermediary security specialist in the performance of military operations inside Nicaragua?

I don't think that inappropriate at all. As I have testified numerous times to this body, I did not feel as if the Boland Amendment applied to the NSC {National Security Council} staff and there weren't any restrictions on our putting the contra leadership in contact with people that might be of assistance to them . . . .

You were familiar {as} national security adviser with the usual standards of international conduct. Isn't it true that if the United States government directly perpetrated acts of military violence inside a country with which we have diplomatic relations, that that could be considered an act of war?

Mr. Foley, under the presidential findings that existed long before this, the United States policy . . . . was to do that very thing. The . . . .

Commit acts of war against Nicaragua? . . .

I don't consider that an act of war. The Sandinista government is exporting revolution to the surrounding countries of the area. I think that's a much more serious problem. All that we were doing was putting the contra leadership in contact with an expert that might be of assistance to them in training and in operations.

Foley then asked about how the diversion money was spent.

What I'm trying to understand, Adm. Poindexter, is how it can be said, again and again in these hearings, that the diversion of funds, which you authorized in February 1986 from the sale of arms to Iran, kept the contras alive during a critical period, when you yourself do not quarrel with the testimony that the main force of the contra resistance . . . the northern front, did not receive any of those funds.

. . . I don't believe that I've attributed keeping the contras alive only to the transfer of the residual funds {the diversion}.

So you're not willing to . . .

It was the whole effort of private support, third-country support . . . developing political cohesiveness amongst the contra leadership, helping them focus on what their objectives were. Those things, taken in toto, I believe kept the contras alive as a fighting force.

So you're not willing to say, here, that it was the diversion of funds that purchased vital supplies to keep the main force of the contras alive and active.

No, I don't believe I've ever testified to that.

Sen. Paul S. Sarbanes (D-Md.) asked him why Attorney General Edwin Meese III inaccurately described Poindexter's knowledge of the diversion when Meese revealed the diversion and announced Poindexter's resignation at a news conference on Nov. 25, 1986. Sarbanes reads from the transcript of the news conference.

{A reporter asked}, "When you say Poindexter knew, do you mean he approved of it?" "No" -- this is Meese responding -- "No, Adm. Poindexter knew generally that something of this nature was happening. He did not know the details." In fact, you knew more than generally, did you not?

As I have testified before, Ed Meese did not ask me if I had approved. It was a very short session, informal session in my office, and I told him I was generally aware. He didn't ask me more questions. At that point I didn't provide any more information . . . . I didn't suggest to Mr. Meese that he say this. You'll have to talk to him about it.

Well, but on the basis of the actual facts, this is a misleading response by the attorney general, is it not?

Well, I {confers with counsel} -- again, you have to ask Mr. Meese to evaluate that. I don't plan to.

Rep. Dick Cheney (R-Wyo.) told of the pitfalls of withholding information from and misleading Congress.

There've been plenty of expressions of moral indignation and outrage over some of these events and I think a lot of it's unjustified, or excessive, if you will. The reason for not misleading the Congress is a very practical one. It's stupid. It's self-defeating. Because, while it may, in fact, allow you to prevail in the problem of the moment, eventually you destroy the president's credibility.

And the president's powers are, for the most part, the powers to persuade. He can't compel anybody to do much of anything. He has to rely upon his capacity to persuade the Congress to support difficult policies and every time action is taken by the president or his subordinates that raises questions about his credibility, it's just that much more difficult the next time around to argue that, in fact, the president's telling the truth. That he has solid information . . . . Do you have any concern about that? Was that ever a subject for discussion?

Well, in my view, I think that the president has remained very credible throughout this whole episode. That, of course, was part of my plan. That's also why I recognized, when I approved the diversion, or the transfer of the residual funds to the contras, that if indeed that ever did leak out, that I would have to resign. And I was prepared to do that.

Sen. Paul S. Trible Jr. (R-Va.) questioned him about the private network he authorized to supply arms to the contras that was run by retired major general Richard V. Secord and businessman Albert A. Hakim.

When you approved this activity, did you authorize that kind of markup, a markup in excess of 40 percent {over cost on} the arms sold to the contras?

As I have testified and answered an earlier question of yours, Sen. Trible, the question of compensation or profits for the private organization that was carrying this out simply didn't come up.

And it would seem apparent to me that anyone who cared about the contras, as you and I do, would be offended by that kind of activity. Let me ask you this question. What about --

{Interrupts} If I knew all of the facts, I might be able to draw some conclusions about this, but I don't --

{Interrupts} What about --

know all the facts and I'm not going to speculate.

What about financial oversight in accounting? What oversight in accounting did you put in place to ensure that these large sums of money would be properly allocated.

The trust and confidence in Col. North and Gen. Secord.

I simply have pursued this line of questioning because I think it does underscore the risk of taking public policy private; of operating outside of established channels, without checks and balances, without oversight or accounting. Good people in policy get in big trouble, we've seen that. And here the evidence establishes, conclusively I would suggest, that millions of dollars were socked away in secret Swiss bank accounts. That hundreds of thousands of dollars were converted to the personal use of these private operators. And that the contras were not well served. That they were sent shoddy equipment at grossly inflated prices. And I think that underscores the folly of doing business in this fashion.

And obviously here -- your intention, that of Col. North -- was to help the contras. It wasn't to generate profit for individuals. But we'll let the record speak for itself on that point. Let's move on, if I may, to another aspect of all this.

May I just comment on your last statement?

Sure.

I don't agree that this was a privatization of foreign policy. The foreign policy was clearly established by the president. There was no secret about that. He campaigned on these issues. He campaigned on support for the contras. He campaigned on working to get the hostages back. He campaigned on the importance of the Persian Gulf to the American people and to the national security of the free world. And I still contend that the American people don't want to know those details.

Trible then made the following speech:

One of the most troubling aspects, I think, of the testimony thus far has been the kind of unapologetic embrace of untruth. We've seen the withholding of information, evasion, false and misleading statements made to virtually everyone, to the president, to key members of the administration, to the Congress, to the American people. Now, in a free society, that doesn't work. Some would suggest that it's not right.

Now, in the context of these statements, we've been told that untruth was permissible or appropriate, in order to protect or promote some higher good. The fight against communism, which we all would agree is of the highest priority. Or in the words of Oliver North, it was 'lies versus lives.' "

Trible then resumed questioning him.

At the {Naval} Academy, the young men and women that we train to be our future officers are told that truth is absolute. If the conduct -- evasion, which you've talked about, that's mentioned in these regulations -- is wrong for midshipmen, isn't it also wrong for officers?

Senator, I think that's a very unfair thing to say. And I object to it. I have always lived by the honor concept. I still live that way today. One of the things you also learn at the Naval Academy is the ability to exercise independent judgment . . . . My whole time as national security adviser I worked very hard to do the best that I could to protect the national security of the United States. I don't have any regrets for anything that I did. I think the actions that I took were in the long-term best interests of the country, and I'm not going to change my mind. And I'm not going to be apologetic about it.

Sen. David L. Boren (D-Okla.) questioned him about presidential responsibility.

Does it not trouble you at all, in retrospect . . . that as we're thinking about our constitutional system, and the heart and soul of it, wouldn't you say that in the future, controversial decisions should be brought to the president of the United States so that he, as the person elected by the American people, can make those decisions for himself?

It certainly would make it easier on the people involved to do that. I don't know. The future is obviously going to be very complex.

But Adm. Poindexter, it isn't a matter of making it easier for the people involved. It's a question that in this republic, with the democratic principles we have, the Constitution says that the president is the commander-in-chief. It doesn't say the national security adviser; it doesn't say any bureaucrat appointed by the president. It says the president. It's because he's elected by the people. So doesn't it trouble you? . . . We're talking not even about whether it's inconvenient; we're talking about the preservation of constitutional government.

But senator, the difference between the way you think about it and the way I think about it -- you know, I frankly don't think in the whole scheme of things it's that important a decision. It obviously is a controversial one. The thing that's made it important in your eyes, in my mind, is the overreaction of the media to it, and the members of Congress have to react to the media.

Rep. Peter W. Rodino Jr. (D-N.J.) questioned him on failing to carry out a presidential order to provide information to Congress.

On Nov. 19, the president, in {a} news conference, concluded by saying that he was going to issue a directive, or he directed, that all information concerning the Iran initiative was to be provided to the appropriate members of Congress. And yet, Adm. Poindexter, you are saying to me that notwithstanding that directive to inform the American people, you decided that you would not, countermanding the directive of the president that the people should know.

We tried to get out as accurately as we could the information about the Iranian project, less the way that the private agent was using the residuals in his logistics support operation to support the contras. In my mind, that was an unrelated issue.

Admiral, I've got to state that while I want to believe you, I respect the position you hold . . . I read and I'm reading from the president's news conference of Nov. 19, 1986, and this statement is made here: "I have further directed that all information relating to our initiative be provided to the appropriate members of Congress." And notwithstanding that, you destroyed the finding on Nov. 21, you didn't tell the people, since you say you wanted to assure that you'd protect the president.

Mr. Rodino . . . I just don't agree with your assessment of the situation.

Well, you don't agree with what the president directed you to do. You're not . . .

{Interrupting} I agreed very well with what the president said, Mr. Rodino . . .

Admiral, well, do you believe that you carried out his directive?

To the best of my ability.