Justice Department Stands by North

WASHINGTON--The Justice Department came to Oliver L. North's defense yesterday by objecting to the Iran-Contra prosecutor's argument that the former presidential aide defrauded Congress' powers over foreign affairs.

In a friend-of-the-court brief filed in federal court, the department attacked independent counsel Lawrence E. Walsh's theory that North and three codefendants obstructed Congressional oversight "through deceit and concealment" of their clandestine support of the Nicaraguan Contra rebels.

The department did not urge U.S. District Judge Gerhard A. Gesell to dismiss the major charge that North, former national security adviser John M. Poindexter and two arms dealers defrauded the government by illegally diverting U.S.-Iran arms-sale profits to the Contras.

But the department disputed Walsh's theory that the Iran-Contra defendants can be prosecuted for deceiving Congress about the clandestine arms-supply operation set up to help the Contras at a time when the so-called Boland Amendments banned U.S. military aide to the rebels.

"This case, in fact, arises in the context of a profound policy dispute between the executive and legislative branches with respect to foreign affairs," the department said in its brief.

"A prosecutor acting in the midst of such a dispute must exercise great caution -- first, to distinguish violations of law from policy disagreements which are the expected and natural by-product of separated powers, and to make certain that the laws are applied consistently with the scope of the president's substantial constitutional authority in the area of foreign affairs."

Assistant Attorneys General Edward S.G. Dennis Jr., head of the criminal division, and Douglas W. Kmiec, from the office of legal counsel, said Walsh's position "does not demonstrate sufficient caution in either respect."

The department said Walsh had overstated Congress' power to regulate the conduct of foreign affairs and covert intelligence operations.

"The president has plenary power which Congress cannot invade to conduct diplomacy, including covert diplomacy that seeks support (including financial contributions) for the foreign policy he articulates on behalf of the nation."

"The protection of diplomatic and intelligence secrets is also a core executive power." the department said.

The department also appeared to be joining. North in attacking the constitutionality of the Boland Amendments enacted by Congress that banned direct U.S. military aid to the Contras.

The department said it did not disagree with Walsh's legal argument that the defendants may have defrauded President Reagan by corrupting the arms-for-hostages deals.

But the department, invoking the doctrine of executive privilege, said the conspiracy charge cannot be applied to efforts by North and Poindexter to hide from Congress their efforts to arm the Contras when lawmakers had specifically banned such assistance.

"Because of the doctrine of executive privilege and the president's inherent foreign affairs authority, Congress' authority to compel disclosure of information concerning covert activity is necessarily subject to formidable constitutional limitations."

Nor can Congress "prohibit the president and his subordinates from exercising the president's authority to engage in diplomacy or to exercise covert influence in the realm of external affairs," the department said.

The Justice brief was filed in response to an Oct. 25 brief that Walsh submitted in response to defense motions to dismiss the conspiracy count.

In a statement. Walsh's office said. "The Justice Department's memorandum misstates our brief. It is addressed largely to collateral issues that should obscure the criminal charges in the indictment returned by the grand jury."

"Those charges, and the very limited role of the Boland Amendment in them, have been clear since the filing of the indictment on March 16, 1988." Walsh's office said.