Thomas G. Clines, the former CIA agent who was part of a secret White House network that sold arms to the Nicaraguan contra rebels when such sales were prohibited, was convicted yesterday on four counts of filing false information on his federal income tax returns in 1985 and 1986.
The verdict in a Baltimore federal district court ended an 11-day trial that focused on the large profits made by Clines and other principals in the covert operation, which had been set up in 1984 by then-White House aide Oliver L. North as part of the Iran-contra "enterprise."
Jurors took less than three hours to reach the verdict, which is the eighth conviction in the four-year Iran-contra investigation by independent counsel Lawrence E. Walsh and the first since appellate courts this year put in jeopardy his convictions of North and former national security adviser John M. Poindexter and halted the prosecution of Joseph Fernandez, another former Central Intelligence Agency operative.
Walsh said in a statement yesterday that "we greatly appreciate the expedition of the court and the hard work of Stuart E. Abrams and the trial team."
Paula M. Junghans, Clines's attorney, told the Associated Press that she was disappointed with the verdict and would consider an appeal. She said Clines misunderstood how to report his earnings and was unfamiliar with regulations that required him to report foreign financial accounts.
Clines had been accused of receiving almost $900,000 for his role in arms sales to the contras but failing to disclose $260,000 in profit on his 1985 and 1986 federal income tax returns. He also was convicted of failing to disclose his interest in foreign financial accounts.
Clines faces a maximum of 16 years in prison and $1 million in fines. He is to be sentenced Oct. 31. Although he lives in McLean, he was prosecuted in Maryland because his tax preparer is from Bethesda.
Walsh's prosecution team introduced additional financial details of the operation under which retired Air Force major general Richard V. Secord and his business associate, Albert Hakim, sold arms to the contras at North's behest.
Although Clines was not involved in the first arms shipment, which took place in early 1985, records introduced at the trial showed the $2.3 million shipment generated a profit of $720,400 for the four principals involved in the sale. Secord and Hakim each got $120,000. A Canadian arms dealer, Emanuel Weigensberg, and Secord's Washington lawyer, Thomas Green, each got $240,000, according to testimony. Green could not be reached for comment.
Secord testified that after the first shipment he brought in Clines to replace Weigensberg as the person who found and shipped the arms to Central America.
The second shipment, for $1.2 million, generated profits of $310,840, according to the court records. Clines received $62,168, and Hakim and Secord each got $124,336.
The third shipment, which involved SA-7 antiaircraft missiles from China, cost the contras $6.5 million. In July 1986, Hakim and Secord each took $621,936 as their share of the profit and Clines $310,966, according to court documents.
Abrams showed that more than $200,000 of that went to Clines in the form of cash and that Clines bought a box in a bank in Geneva, where he received the payment.
Internal Revenue Service Special Agent Thomas F. Cusick testified that Clines understated his gross receipts by at least $203,431 in 1985 and by $57,009 in 1986.
After 31 years in the CIA, Clines was forced to retire in 1978 by then-CIA Director Stansfield Turner because of his personal and financial ties to Edwin Wilson, another former CIA agent who had been convicted of selling explosives to Libya's Moammar Gadhafi.
Clines, too, became a weapons broker after leaving the CIA. In 1983, a company in which he was a major owner was convicted of defrauding the Defense Department of $8 million on aid shipments to Egypt.