Iran Funds Went to Cayman Island Bank

WASHINGTON--The Senate Intelligence Committee has traced Iranian arms sales profits, apparently intended for Nicaragua's Contra rebels, to a secret Cayman Islands bank account, the panel's chairman said yesterday.

But Sen. David Boren said a newly written committee report has not yet determined "the ultimate resting place of this money." The report was released late yesterday.

Boren said the report includes "no direct evidence that would state" that President Reagan knew of the diversion or "that he directed the diversion of funds" to the Contras.

"You cannot finally resolve that question when you don't have the testimony of North and Poindexter and others," Boren said of two departed administration figures, Vice Adm. John M. Poindexter and Lt. Col. Oliver L. North.

Across the Capitol, sources said the House panel investigating the Iran-Contra connection had notified independent counsel Lawrence Walsh that it might have to make a decision on granting limited immunity to witnesses sooner than he wishes.

These sources, who spoke on condition of anonymity, said the panel notified Walsh of its feelings in a letter. "The House has to make its own judgment," said one source, noting that while Walsh may take many months to complete his work, the committee's charter expires in October.

Walsh had earlier written the panel that a grant of limited immunity might create barriers to possible prosecution. Poindexter and North have refused to answer questions, citing their constitutional rights against self-incrimination.

Boren said the Senate Intelligence Committee report reveals that Reagan met a number of times with North, then a deputy on the National Security Council staff, generally with others present.

The White House denied last year that Reagan ever met alone with North over the past two years.

Of the Iran-Contra money connection, Boren said: "We take it one more step, the Cayman Islands account. The creation of that, of course, is tied to the ultimate beneficiary being in some way the Contras. But in terms of showing the final trail in terms that absolutely nail down the fact that they received the funds, no."

In the past the Contras have used Cayman Island bank accounts--protected by bank secrecy laws in that small island nation--for transfers of funds to pay for military operations in their war against the leftist Sandinista government in Managua.

Sen. William Cohen, R-Maine, the committee's vice chairman, said the panel did not reach any conclusions about the testimony by White House Chief of Staff Donald Regan and CIA director William Casey.

"What it does point out is what information was conveyed by Casey and Regan to the committee. We leave it up to readers to decide," he said.