Under skeptical questioning, Attorney General Edwin Meese III said yesterday that during his initial "fact-finding" inquiry into Iran arms sales last November, he failed to ask many pertinent questions of key officials, failed to secure White House documents and took no notes of his private meetings with half a dozen key senior officials.
Meese said the discovery of a diversion of funds from arms sales to Iran to help the Nicaraguan contras changed the nature of his inquiry radically, raising "criminal implications." Nevertheless, Meese said, he took no new precautions after this discovery to adjust to the possibility that he might be investigating a criminal matter.
The night of the Sunday on which Marine Lt. Col. Oliver L. North told Meese of the diversion, Sen. Warren B. Rudman (R-N.H.) revealed, North returned to his White House office at 11 p.m. and stayed there for five hours shredding documents.
The second day of testimony by Meese brought the drama that was absent from his first day at the witness table. Several senators challenged Meese frontally on the adequacy of that fact-finding inquiry, and Sen. George J. Mitchell (D-Maine), in a quiet but relentless series of questions, shook the composure of the affable attorney general.
"It's hard to accept," Mitchell said after drawing out a detailed account from Meese of why he conducted only a cursory interview with national security adviser John M. Poindexter, identified to Meese by North as the highest-ranking official who knew of the diversion. Meese said he spoke to Rear Adm. Poindexter for just a few minutes with no one else present and that he took no notes.
Meese responded testily to Mitchell's skepticism: "It may be hard to accept, as long as there's no question as to that being the truth . . . then I will accept your statement."
"It's just very hard to accept," Mitchell repeated.
The inquiry Meese undertook at President Reagan's request last Nov. 21 was, Meese said, an attempt to gather the facts of what had happened in the "Iran initiative" that had exploded into scandal when it was disclosed that the administration had sold arms to Iran in exchange for the release of hostages held in Lebanon. Meese defended his inquiry repeatedly again yesterday as adequate and successful, producing, he asserted, a story that has essentially held up.
But on specific points some members of the Iran-contra panels appeared unconvinced.
For example, Meese said he wanted to find out from Poindexter who had authorized the diversion of funds from arms sales to Iran to benefit the contras, but added that he never asked Poindexter directly who had authorized it. Poindexter "indicated to me" that Reagan had not authorized the diversion, Meese testified.
That indication, Meese said, came when Poindexter told him "Ollie had given him enough hints so that he knew about it generally and that he had allowed it to go forward, he hadn't followed up on it . . . . So as far as I was concerned, that was clear to me then it had not been authorized by anyone in authority."
"Did you ask Adm. Poindexter who approved the diversion?" Sen. Sam Nunn (D-Ga.) asked.
"I did not ask him in so many words," Meese said. "I did ask him whether anyone else -- whether he had ever told about this to anyone else in the White House, and he said no."
"Did you ask him specifically whether he told the president of the United States?" Nunn persisted.
"I didn't ask him specifically whether he had told the president," Meese said. "I asked if he told anyone else in the White House . . . . "
According to Meese, Reagan was similarly disinclined to ask direct questions.
Nunn asked: "Did the president ask you whether Adm. Poindexter thought he had the authority to approve the diversion of funds?"
Meese: "I don't believe that he did, no sir."
Rudman asked why Reagan never asked Poindexter and North, as their commander in chief, what had happened "and thus avoid the country much of the agony" of the last eight months.
Meese replied that Reagan "could not have ordered them" to tell him what they knew "without reading them their rights."
Rudman persisted, saying that this was an important matter.
"Well then, my view, senator," Meese replied, "was that we had all of that information before they left the White House."
Mitchell elicited an acknowledgment from Meese that his fact-finding effort changed after his interview on Sunday, Nov. 23, with North in which he learned of a diversion of funds.
The next day, Meese said, he met alone with each of four officials, former national security adviser Robert C. McFarlane, White House chief of staff Donald T. Regan, Poindexter and Vice President Bush, and with Regan and the president together. Meese said he made no notes of those meetings -- though he had an assistant record notes of his earlier conversations, including the one with North the previous afternoon.
"They were casual conversations," Meese said, "or they were meetings . . . simply to confirm information we already had," Meese told Mitchell, explaining why there are no notes.
In Poindexter's case, he said, there was no need for an extended converstion because he quickly confirmed what North had said about the diversion.
Early the following morning, just hours before the dramatic news conference announcing the diversion, Meese drove to Casey's home. Assistant John Richardson, who had taken 29 pages of notes of the attorney general's Sunday interview with North, sat outside in Meese's limousine while Casey and Meese chatted in the house. No notes were made of that "quick conversation," Meese said.
Asked repeatedly why he took no steps to ensure that relevant White House documents would be securely preserved, Meese said he saw no reason to do so. He insisted that he and his associates conducting the fact-finding inquiry had the documents they needed. "We already had examined all the documents," Meese told Mitchell.
"Well," Mitchell replied, "when you say we had examined all the documents, you had examined all the documents that you had seen until then. But, in fact, there were a great many documents that you did not see, nor anybody else," he added, referring to those that were shredded.
Meese acknowledged that documents were shredded but offered the opinion that many of the papers North had destroyed were unrelated to Iran-contra issues.
"On what do you base that opinion?" Mitchell asked.
"That's just a guess -- as much speculation as yours that they were relevant documents," Meese replied.
It was not until Nov. 25, the day North was fired and Poindexter resigned, that an NSC official "secured" North's files, though on that day his secretary removed more documents from the Old Executive Office Building, according to her testimony. FBI agents did not enter the investigation until Nov. 28.
Meese repeatedly praised the people he was dealing with in his fact-finding inquiry. "I was dealing with people who had been entrusted by the president with some of the most important tasks, as well as the most important secrets of the country, people I all knew to be . . . honorable and reputable individuals."
Meese called the late CIA Director William J. Casey "a person that I would believe without question." He praised Poindexter similarly and said, "I have great respect for Col. North."
Of one critical issue, a November 1985 shipment of Hawk missiles to Iran, Casey said, "I had no reason to believe there was any reason for anyone to be deceptive about these particular events." But, as Meese said yesterday, shipping those arms to Iran without a proper intelligence "finding," which had not been signed in advance in that case, would violate the law.
Under Mitchell's questioning, Meese said he eventually realized that on Nov. 20 and 21 of last year Casey and Poindexter were planning to give Congress "a deliberately false statement," as Mitchell described it, by saying that U.S. officials thought the shipment consisted of oil-drilling equipment, not missiles. But, Meese said, accepting Mitchell's characterization that the planned statement was false, he only realized this long after the fact. That realization "may have been after the course of these hearings, here," Meese said.
Yesterday's testimony produced several pieces of new information besides Rudman's revelation of North's early-hours shredding last Nov. 23-24. Among them:CIA records apparently show that North met with Casey 35 times at CIA headquarters in Langley. Other testimony has shown that Casey and North also met regularly in the Old Executive Office Building downtown, where both had offices. North testified that Casey knew of and approved all his secret activities, including the fund diversion. Casey had brain surgery for a malignant tumor in mid-December and died this spring without testifying on these matters. Sen. Paul S. Trible Jr. (R-Va.) disclosed that there have been 33 secret intelligence findings since Reagan became president. Only 17 were reviewed by the Justice Department, Trible said. While William French Smith was attorney general, Trible said, he insisted on seeing all findings, but Meese has not insisted. Under a system recently instituted by the National Security Council, Trible said, Justice will review findings systematically. Meese contradicted a statement he made at a news conference last Nov. 25, when he said the funds involved in the diversion to the contras came from Iran through Israelis to the Nicaraguan contras. Indicating that he now knows more about the money, Meese testified yesterday that it is "highly probable" that those funds -- which actually went from Iran through intermediaries to a Swiss bank account controlled by retired Air Force major general Richard V. Secord and North -- belong to the U.S. government. More than $8 million is in frozen accounts in Switzerland.
Meese testified that when agents of the Drug Enforcement Administration were used in a secret 1985 effort supported by North to win the release of Americans held hostage in Lebanon -- an effort that involved bribes -- a presidential intelligence finding should have been sought. "There should have been a finding," Meese said, "and indeed there may have been."
Rudman noted that no such finding has been found by the committees.
Meese agreed to answer questions into the night so he could complete his testimony. As the evening wore on, he found himself embroiled in a legal debate over the applicability of the Boland amendments, congressional riders restricting U.S. aid to the contras.
Rep. Bill McCollum (R-Fla.) said he was "a little surprised" to read in The Washington Post yesterday that "you testified . . . that in your opinion the National Security Council was covered by the Boland Amendment." Previously, McFarlane testified that the NSC was covered, but his successor, Poindexter, said the provision did not apply to the NSC staff.
Meese told McCollum, "I don't believe that I did, and that's not my opinion."
The Post reported, based on a colloquy with House counsel John W. Nields Jr. at Tuesday's hearing, that Meese had said Boland covered the NSC staff. Nields noted an opinion produced in Meese's department stating that "the NSC clearly falls within the definition of an intelligence agency . . . of the Intelligence Authorization Act." He asked whether Meese agreed.
"I think it is probable that the NSC would fall within that since it is -- or at least it could be -- deemed to be . . . involved in an intelligence-related activity," language almost identical to the Boland Amendment's.
Yesterday Meese said the Boland language could be interepreted as not covering the NSC staff, or as covering it. "Reasonable minds might differ" on the question, he said.