"Follow the money" was the terse advice the legendary source Deep Throat offered to Reporter Bob Woodward in the movie version of All the President's Men. As the intricacies of the Reagan Administration's Iran-contra supply line were probed last week, the money trail became a source of innumerable leads for reporters (including the Washington Post's Woodward) and investigators for congressional committees who were scrambling to uncover a financing scheme that coiled across three continents. The path led through a complex maze, replete' with international intrigue, conflicting claims by governments and shadowy diversions of funds by mysterious middlemen. There were straw companies set up precisely to obscure the paper trail, and private individuals who acted as "cutouts" to shield the government officials directing them. But throughout the maze investigators repeatedly stumbled across the delicate footprints of the CIA, along with the clumsier presence of Lieut. Colonel Oliver North and an old-boy network of his former colleagues on the staff of the National Security Council.
Even as Ronald Reagan tried to regain control of events in the most serious crisis of his presidency, new revelations about these secret machinations kept him on the defensive. There seemed no quick way to clear up the mysteries stemming from the Administration's admission two weeks ago that up to $30 million in profits from secret shipments of U.S. arms to Iran had been diverted to support the guerrilla warfare of the U.S.-backed contras against Nicaragua's Marxist Sandinista government.
Fragmentary and sometimes contradictory, the revelations included:
• The assertion by Amiram Nir, Israel's adviser on counterterrorism to Prime Minister Yitzhak Shamir, that the U.S. decided what price Iran should pay for the American arms. Although President Reagan has insisted that a third country, presumably Israel, had been "overcharging" Iran for weapons shipments, Nir told his Israeli government superiors about a meeting, probably in Washington early this year (late January or early February) at which North set the price at three or four times the book value of the weapons. Nir claimed that other unnamed White House officials attended the meeting and "no one asked questions" about the inflated price. "I passed the American price to the Iranians and that's all," Nir insisted.
• The Washington Post reported that some proceeds from the Iran sales had been placed in a CIA-managed Swiss bank account also used to fund the rebel forces in Afghanistan as well as Jonas Savimbi's troops fighting the Marxist government in Angola. Citing a "well-placed senior Administration official," the Post claimed the U.S. and Saudi Arabia had each placed $250 million in the account this year. Commingling the Iranian proceeds with these funds was described by the Post's source as a "dumb" mistake by an impatient CIA employee who did not wait for the creation of a separate account. The CIA issued an unusual public denial, insisting it had handled only the $12 million that it repaid the Pentagon as the book value of the arms. The agency said it had not diverted any money to the contras and had not received any profits from the deals with Iran.