Mr. NIELDS. What was the nature of the project that you were
then engaged in having to do with the Contras?
Mr. SECORD. In November of 1985, I was at the very beginning of
a complex project we referred to as the "airlift project," a project
which was designed to ultimately make air drops, parachute air
drops to various Contra forces.
Mr. NIELDS. In Nicaragua?
Mr. SECORD. In Nicaragua.
Mr. NIELDS. Now, Mr. Secord, such an operation, I take it, requires finances?
Mr. SECORD. Yes, it requires millions of dollars.
Mr. NIELDS. Where was the money supposed to come from to support this air supply operation?
Mr. SECORD. The money was coming from donated funds and
these funds were coming, as I understand it, from private individuals and from some friendly countries.
Mr. NIELDS. And where were these moneys being put?
Mr. SECORD. In November of 1985 they were being deposited in a
Swiss bank account in favor of a company, a Panamanian company, Lake Resources, Incorporated?
Mr. NIELDS. And who controlled the Lake Resources, Incorporated?
Mr. SECORD. Mr. Albert Hakim was the person who was in control of this account and others that were created for various support purposes—but there was, at my request, and really under my
Mr. NIELDS. And was Mr. Hakim then a business associate of
Mr. SECORD. Yes, he was.
Mr. NIELDS. How did the donors know where to put the money,
to your knowledge.
Mr. SECORD. I gave the account name and number to Colonel
North and he, in turn gave it to whomever was interested.
Mr. NIELDS. I take it then, Mr. Secord, that at the time that you
received this letter requesting your assistance on the Iran initiatives, there was then in existence in Switzerland a bank account
containing money for the benefit of the Contras.
Mr. NIELDS. And that bank account was Lake Resources?
Mr. SECORD. Yes.
Mr. NIELDS. At a later point in time, February of 1986, and forward, were the proceeds of arms sales to Iran also put into the
same Lake Resources bank account?
Mr. SECORD. Yes, they were.
NIELDS. What was the total amount of money representing
the purchase price of arms sold to Iran that was put into the Lake
Resources or related Swiss bank accounts?
Mr. SECORD. Something over $30 million.
Mr. NIELDS. I take it by your answer that means something just
a very little bit over $30 million?
Mr. SECORD. Yes.
Mr. NIELDS. So if you were speaking in round numbers, it would
be $30 million?
Mr. SECORD. Yes, sir.
Mr. NIELDS. How much money was paid, to your knowledge,
either directly or indirectly to the U.S. Treasury out of that
Mr. SECORD. I believe it was about $12.3 million.
Mr. NIELDS. So in round numbers, $12 million?
Mr. SECORD. $12 million.
Mr. NIELDS. I want to ask you some questions about, I think you
will agree there is a difference there of approximately $18 million.
I want to ask you some questions about where that money went.
Before I do, let me ask you this. Up until a few days ago, did you
have access to the records necessary to determine where that
Mr. SECORD. No.
Mr. NIELDS. Who did?
Mr. SECORD. The committee, the House and Senate Select Committee had these records which they received recently from Mr.
Mr. NIELDS. So that prior to that time Mr. Hakim had the
Mr. SECORD. Correct.
Mr. NIELDS. Mr. Hakim identified in testimony given to this committee some eight Swiss bank accounts relating to the flow of this
money that you just have been testifying about. Those records were
then subpoenaed from him by the committees, both committees
and they are now undergoing a preliminary review by accountants
working for the two committees.
The records reflect that there is now in the bank accounts approximately $1,360,000. In addition, Mr. Hakim has testified to the
committees that $6,527,000 of this money is presently being held in
an account for his benefit by a Swiss fiduciary. Those two numbers
total approximately $8 million, and if you subtract that from the
$18 million difference that you testified about a moment ago, that
leaves $10 million presently unaccounted for.
I want to ask you what happened to that $10 million, how it was
spent and again before I do, I am going to ask you whether you
have been given access to print-outs of the disbursements from
these various bank accounts by the committee during these past
Mr. SECORD. Yes, I have.
Mr. NIELDS. And have you reviewed those together with the
Members of the committee?
Mr. SECORD. Yes, I have conducted a preliminary review of these
Mr. NIELDS. Based on that review, can you give us now an approximate amount of money from the process of the sales of arms
to Iran, which went to the benefit of the Contras?
Mr. SECORD. Based upon my review of Mr. Hakim's records, in
which I identified all disbursements that I could locate, which were
identified with the various Contra projects, it appears that approximately $3.5 million of these funds were expended in support of the
airlift project, the various Contra projects.
Mr. NIELDS. How did you arrive at that number?
Mr. SECORD. By going through Mr. Hakim's records in detail and
identifying the disbursements that were made for these projects.
Mr. NIELDS. And what was the total amendment of disbursements that you identified from February 1986.
Mr. SECORD. Between $5 and $6 million.
Mr. NIELDS. And did you then try to determine what other
sources of funds those disbursements might have come from?
Mr. SECORD. Yes. And we located donations that came in during
the timeframe for the Contra projects of $1.649 million. In addition
to that, there were in the accounts in February of 1986 some
$470,000. So if you total those two numbers, you have about $2 million.
Mr. NIELDS. And you have assumed all of that $2 million was
spent on Contra projects?
Mr. SECORD. It was.
Mr. NIELDS. And then the remaining amount of money that was
spent on Contra projects, I take it, had to come out of the proceeds
of the arms sales to Iran.
Mr. SECORD. That is the method we used; that is correct.
Mr. NIELDS. Can you give us a little bit more detail on the subject of just what kinds of expenditures for the benefit of the Contras were made out of these bank accounts?
Mr. SECORD. The airlift project had three components to it. The
procurement and the operations of the aircraft, of course. That
meant two C-123 K transport aircraft, two Caribou aircraft, and
one light utility airplane, a Maule, so there were five aircraft to
We also were required to construct an emergency landing field in
one of the Central American countries. That was the second component, and the third component was the procurement of limited
quantities of munitions, light infantry munitions for the purpose of
troops, air drops, to the southern Contras, the Contras located in
the southern part of Nicaragua.
Mr. NIELDS. Did you have to spend money on salaries in addition?
Mr. SECORD. Yes, of course. To support the airlift operation we
spent money on salary, fuels, spare parts, on maintenance, on support for the air crews.
Mr. NIELDS. Was there any money paid to Contra leaders?
Mr. SECORD. Yes.
Mr. NIELDS. Who and how much?
Mr. SECORD. There was a monthly disbursement of $10,000 a
month to one Contra leader and $5,000 a month to another. That is
Robelo and Cruz, and on several occasions we made disbursements
to Mr. Adolfo Calero's account with the FDN, the main body of the
Mr. NIELDS. During this period of time were there any payments
directly to Mr. Calero, past February 1986?
Mr. SECORD. I believe there were some. I would have to look at
the records to refresh my memory on that point, but I think there
was $200,000 disbursed during that period for the FDN contras.
Mr. NIELDS. In any event, your memory is there was $200,000 at
some point in time, and you would be willing to refresh your
memory on that question by further consultation with the records?
Mr. SECORD. Yes, sir.
Mr. NIELDS. Now, by my calculation, after approximately three
and a half or so million dollars was spent on the Contras, there is
still something over $6 million which we have not yet accounted
How was that money spent?
Mr. SECORD. Well, there were in the vicinity—and we added
these expenses up, too, by looking at Mr. Hakim's records—there
were in the vicinity of $3 million spent in support of the Iran
project, basically on the transportation of materials from the
United States to Iran.
Mr. NIELDS. And that still leaves a little over $3 million unaccounted for.
What was that money spent on?
Let me rephrase that question.
Were there other projects on which money was spent that were
neither Iran nor Nicaragua related?
Mr. SECORD. Yes. There was a requirement to procure a small
ship in April of 1986, and then to operate that ship from then until
the end of the year, ultimately, and that was a substantial expense.
The procurement cost was about $350,000, and there were monthly operational costs. We have not yet audited those accounts.
Mr. NIELDS. And when you said there was a requirement, was
the ship bought for private purposes or was this ship bought for
Mr. SECORD. This ship was bought for, initially, to be used on another Government project which is not related to Iran.
Mr. NIELDS. Was it related to Nicaragua?
Mr. SECORD. No.
Mr. NIELDS. And at whose request was the ship purchased?
Mr. SECORD. I received the request from Colonel North.
Mr. NIELDS. Were there any other projects or purposes for which
money was spent?
Mr. SECOHD. Yes. There was $100,000 expenditure to buy radiotelephone equipment for a Caribbean country. This was a request
that we received from Colonel North.
And then there were expense payments made. We have yet to determine the exact amount of these payments—made to U.S. Drug
Enforcement Agency agents who were working on a separate
project to try and locate and rescue some American hostages in
Mr. NIELDS. How were those expense payments made?
Mr. SECORD. They were made in cash.
Mr. NIELDS. How?
Mr. SECORD. In some cases the cash was given to Colonel North.
He would give the money to the agents for the expense bills that
they submitted, and in some cases the money was picked up by the
DBA people Europe.
Mr. NIELDS. Was any explanation ever given to you as to why the
DEA agents' expenses were being paid for in cash out of Lake Resources' bank account?
Mr. SECORD. Yes. I was told that the Director of the Drug Enforcement Agency had agreed to detail some agents to this project
from time to time, but the expenses of these agents would have to
be born by outside financing. So, we financed.
Mr. NIELDS. Mr. Secord, if I may attempt to summarize—before I
do that, I guess I should say, are there some additional expenditures that at this point in time you have not been able to identify
the purpose of?
Mr. SECORD. That is correct.
This unquantified balance that we are talking about right now,
the $2 to $3 million probably something on the order of $2 million,
we have not yet been able to identify the other elements of overhead and expense that had to be paid out of this, and I am sure we
will get to this before too long.