Abu Nidal

North claimed to talk show hosts Hannity & Colmes that the Kerry report was "wrong," that Sen. Kerry "makes this stuff up and then he can't justify it," and that "The fact is nobody in the government of the United States, going all the way back to the earliest days of this under Jimmy Carter, ever had anything to do with running drugs to support the Nicaraguan resistance. Nobody in the government of the United States. I will stand on that to my grave."

The Kerry subcommittee did not report that U.S. government officials ran drugs, but rather, that Mr. North, then on the National Security Council staff at the White House, and other senior officials created a privatized contra network that attracted drug traffickers looking for cover for their operations, then turned a blind eye to repeated reports of drug smuggling related to the contras, and actively worked with known drug smugglers such as Panamanian dictator Manuel Noriega to assist the contras. The report cited former Drug Enforcement Administration head John Lawn testifying that Mr. North himself had prematurely leaked a DEA undercover operation, jeopardizing agents' lives, for political advantage in an upcoming Congressional vote on aid to the contras (p.121).

NORTH: At some point along in there, either General Secord raised with me or I raised with him this threat, and I told him I couldn't get U.S. Government protection; I couldn't find a contractor to come out and do it myself; and he said, "Don't worry about that, I have got a good friend, or an associate"—I don't remember the words— "who is an expert. This guy has a company that does these things."

And he shortly thereafter, I believe it was around the 5th of May, introduced me to Mr. Glenn Robinette. He was introduced to me as a man who, one, had been a former CIA, or perhaps I understood at the time FBI, I don't remember, technical expert; a man who owned a security company and a man who could immediately go out and do a survey and an estimate.

He did. Over the course of the next few days, he went out to my home, I called my wife or told my wife, whatever, that he would be out and went through the situation. And he came up with an estimate of $8,500 max, as I recall it was $8,000 to $8,500, and he could furthermore immediately install the system.

Now, I want you to know that I would be more than willing—and if anybody else is watching overseas, and I am sure they are—I will be glad to meet Abu Nidal on equal terms anywhere in the world. OK? There is an even deal for him.

But I am not willing to have my wife and my four children meet Abu Nidal or his organization on his terms. And I want you to know what was going through my mind. I was about to leave for Tehran. I had already been told by Director Casey that I should be prepared to take my own life. I had already been told that the Government of the United States on an earlier proposal for a trip, might even disavow the fact that I had gone on the trip, on an earlier proposal, and we can come back to that at some time, if you like.

And so haying been—having asked for some type of U.S. Government protection for my wife and children, and having been denied that, and perhaps for fully legitimate reasons and if there is a law that prevents the protection of American Government employees and their families from people like Abu Nidal, then gentlemen, please fix it, because this kid won't be around much longer, as I am sure you know, but there will be others, if they take activist steps to address the problem of terrorism, who will be threatened. And I would like to just, if I may, just read to you a little bit about Mr. Abu Nidal just so you know my mental state at the time. 

"Abu Nidal, the radical Palestinian guerrilla leader, linked to last Friday's attacks in Rome and Vienna"—that was the so-called Christmas Massacre in which 19 people died and 200 were wounded—"is the world's most wanted terrorist." That is the Christian Science Monitor.

When you look at his whole career, Abu Nidal makes the infamous terrorist Carlos look like a Boy Scout. Abu Nidal himself, quoted in Der Spiegel, "Between America and us, there exists a war to the death. In the coming months and years, Americans will be thinking about us." "For sheer viciousness, Abu Nidal has few rivals in the underworld of terrorism." Newsweek.

Our own State Department, and we have copies of these that we can make available for insertion in the record, but the State Department summary on Abu Nidal, not exactly an overstatement,

notes that his followers, who number an estimated 500, have killed as many as 181 persons, and wounded more than 200, in 2 years. Abu Nidal does not deny these things. We also have an exhibit that we can provide for you that shows what Abu Nidal did in the Christmas Massacres. One of the people killed in the Christmas Massacre—and I do not wish to overdramatize this—but the Abu Nidal terrorists in Rome who blasted the 11-year-old American Natasha Simpson to her knees, deliberately zeroed in and fired an extra burst at her head just in case.

Gentlemen, I have an 11-year-old daughter, not perhaps a whole lot different than Natasha Simpson. And so, when Mr. Robinette told me on or about the 10th of May that he could immediately install a security system, I said please try to keep it to the 8,000 to 8,500. I am, after all, a Marine lieutenant colonel, and I live on my salary; and he installed that system.

North Apparently Sent Arms by Ship to Iran but Deal Failed : Bid to Swap Guns for Soviet Tank Told

January 21, 1987|MICHAEL WINES and RICHARD E. MEYER | Times Staff Writers

KORSOR, Denmark — Apparently directed by White House aide Oliver L. North, a small Danish cargo ship last October secretly attempted to deliver U.S.-made machine guns to Iran--seeking to swap the arms not for American hostages but for a captured Soviet T-72 tank long coveted by U.S. intelligence agencies, sources say.

The blue and white freighter, the Erria, took on its cargo of weapons at the Israeli port of Haifa, sailed through the Suez Canal and down the Red Sea to the mouth of the Persian Gulf. There, it waited at sea for several weeks, hoping for a signal to land at the Iranian port of Bandar Abbas, where the exchange was to take place.

Ultimately, this mission--like other Reagan Administration clandestine attempts to strike deals with the regime of the Ayatollah Ruhollah Khomeini--ended in failure. Arrangements for picking up the tank, considered a valuable intelligence prize, somehow fell through and the machine guns were quietly returned to Israel.

But the Erria's voyage to the Straits of Hormuz--and a series of other missions it apparently undertook in the last two years--reflects the way North and his cadre of associates in and out of government initiated covert activities not only to further the Iran- contras deal but other ends as well.

Indeed, the odyssey of the rust-spattered freighter--as told by crewmen and port records in Europe and Central America--sheds light on how North and others apparently created and ran their own cloak-and-dagger apparatus to supplement the established institutions of the U.S. intelligence community.

And it raises new questions: Where did the network of covert wheeler-dealers find money to buy and operate a small freighter, on whose authority did she sail and who ultimately was responsible for devising her missions around the world?

The 163-foot ship, nominally managed by a Copenhagen shipping agent with long-standing ties to an ex-CIA official deeply involved in the Iran-contras affair, was based in Denmark but was registered under the flag of Panama and passed into the hands of a Panamanian company linked to the same Swiss financial firm apparently used for North's Iran arms deals.

Traveled to 4 Continents

And, although much about the Erria remains unknown, over the last two years it has charted a course that has taken it to four continents, apparently going wherever the special interests of Oliver North directed:

--It once carried 500 tons of weapons, apparently intended for the contras, from a harbor in Poland to a transshipment point in France.

--On another trip, this time to Honduras, the Erria turned over Soviet-made rifles and Portuguese ammunition directly to agents of the Nicaraguan insurgents.

--Another time, she stood off the coast of Cyprus to pick up a courier bearing $1 million in cash from Texas millionaire H. Ross Perot, funds that were supposed to be used as ransom for American hostages North expected to be set free by their captors in Lebanon.

In her last known mission, the Erria reportedly was sent to Iran to pick up the Soviet T-72 tank. Documents obtained by The Times from arms merchants show that U.S. agents have been negotiating with Iran since at least March, 1986, to obtain a T-72 captured in Iran's war with Iraq. The Pentagon wants to examine the tank, one of the most advanced made by the Soviets, because it has a new type of armor alloy and laser targeting systems, according to court documents.

Ship Limps Home

The attempt to trade U.S.-made machine guns for the tank was yet another undeclared deal with Iran. In this case, however, it fell through about the same time--early November--that the U.S. arms sales to Iran became public. At the end of November, the Erria limped back home--about the same time that North was fired by President Reagan.

Formally speaking, the Erria is owned by a Panamanian shell company called Dolmy Business Inc., which bought it last April. The Times reported last week that Dolmy, like several other dummy firms tied to the Iran-contras scandal, has business ties with a Swiss firm called CSF, which helped set up bank accounts used in the Iran arms sales.

Many of the accounts and companies were controlled by retired Air Force Maj. Gen. Richard V. Secord and his business partner, Iranian-born Californian Albert A. Hakim, according to congressional investigators and Administration officials. Secord and Hakim coordinated their operations with North, a Marine lieutenant colonel who handled both terrorism and contra issues from his office at the National Security Council.

Claims Ownership

A Copenhagen shipping agent with a lengthy history of weapons transport claimed Tuesday that he is the major figure behind Dolmy and said that he is the true owner of the Erria.

The agent, Thomas Parlo of S.A. Shipping of Copenhagen, acknowledged also that he is "a longtime personal friend" of Thomas Clines, an ex-CIA officer and North associate who has been named as a figure in both the Iran arms deals and the contra aid network. American sources have alleged that Clines obtained a ship for North's use in the operation.

Parlo confirmed some details of the Erria's travels but flatly denied any connection between the ship and the arms-for-hostages dealings, the Nicaraguan contra forces, Clines and North.

"I do not know North . . . . I'm not in any business deals with Tom Clines," he said. "I can guarantee to you 100% that this ship has never been involved in any hostage activities."

Reliable sources in the United States and Europe dispute those denials, however. They say that the Erria was the centerpiece of a North-managed operation, dubbed Project Democracy or Democracy Inc., that was deeply involved in both the hostage dealings and other free-lance ventures.

Most persons with knowledge of the Erria's secret travels refused outright to discuss them. One apparently panicked worker on the Erria during the last eight months fended off queries about the trips by saying, "I'm not telling you about it. They will kill me."

A reporter who tracked the freighter to an ice-locked harbor in Korsor, about 75 miles west of Copenhagen, was politely rebuffed by two Norwegians who claimed to be newly hired crewmen.

The Danish man who sold the freighter to Dolmy Business was tight-lipped. "It's a long, long story, but I don't want to talk to you about it," said Arne Herup, who Parlo said continued to serve as the Erria's captain after the ship's sale.

Vessel for Sale

The Erria's local agent in Korsor, J. Poulson, said that Parlo was seeking a buyer for the ship. Parlo confirmed that but said the vessel might sail again soon "if we find cargo."

Despite the silence, however, records and interviews with a number of sources who asked for anonymity permit a detailed recounting of most of the Erria's recent journeys under Dolmy's ownership.

Left unanswered is the question of how the journeys were financed. Much of the eight months that the Erria was at sea under Dolmy's ownership was spent at anchor, awaiting orders, or under power with an empty hold.

Danish records show that Dolmy paid 2.5 million kroner, or $312,500, for the 13-year-old vessel. Under prevailing rates, its crew salaries would have totaled more than $10,000 a month. The freighter, which delivered but one load of cargo after April, nevertheless appeared under no pressure to earn its keep, and Parlo offered no explanation of how it was paid for.

The Erria--the name is Latin for the Danish island of Aero--has been carrying weapons since at least 1984 and probably well before that. Portuguese records confirm earlier reports that the Erria arrived in Setubal in May, 1985. At the time of the 1985 visit, the ship was owned by Herup and sailed under a Danish flag.

Was Under Charter

But the freighter was under charter to S.A. Shipping, which had dispatched it two weeks earlier to a dock on the outskirts of Gdansk, Poland. There, according to sources and 1985 news accounts, the ship picked up a load of reconditioned Soviet AK-47 rifles and Eastern-bloc machine guns.

With its hold half full, the Erria steamed into Setubal harbor and tied up on May 8, 1985, to Dock 3, the berth normally used by ships that load bullets, grenades and explosives from Portuguese munitions factories. The factories are among the few in the West that make 7.62-millimeter ammunition, widely used by the contras because they can be fired in AK-47 rifles.

Private industry records, made available to The Times in Portugal, show that the Erria took on 14,714 boxes of munitions weighing 461 tons during the Setubal stop.

On May 11, the Erria, its belly full, edged out of Dock 3. The captain told the harbor pilot that he was bound for Puerto Barrios, the main Caribbean port in Guatemala. In fact, the Erria appeared three weeks later not in Puerto Barrios but in the Honduran town of Puerto Cortes, 60 miles away, and contra leaders said that they collected the cargo.

For whatever reason, the Erria pulled another switch again in 1986. By that time, S.A. Shipping no longer merely chartered the freighter but, Parlo claimed, owned it outright under the guise of a Panama firm.

In an interview, Parlo maintained repeatedly that he used Dolmy Business to purchase the Erria to escape tough Danish rules governing ship crews, salaries and operations. In all cases, he said, the freighter was used solely "for normal business practice."

U.S. and European sources dispute that. One knowledgeable American official called the Erria purchase "strictly an Ollie (North) operation," and one European with knowledge of the deal said that Parlo talked of buying a ship "for some Americans."

Coincidence Claimed

Parlo called it coincidence that he chose CSF, the Swiss company with ties to North's operation, to assist Dolmy and said that he is a long-term associate of Clines, who became an arms dealer after leaving the CIA in 1978.

"I know him. I've known Tom Clines for many years," Parlo said. He said that their friendship did not extend to business dealings.

Another happenstance, Parlo said, was the Erria's appearance in the port of Larnaca, Cyprus, last May 28, a month after Dolmy Business bought the ship and the same day that North and other U.S. negotiators arrived in Tehran for secret talks with Iranians.

Despite those denials, one source who was in Cyprus at the time placed Clines there as well, apparently to oversee a hoped-for release of Americans held captive in nearby Lebanon. And a second source alleged that a man fitting Clines' description boarded the ship, which had been outfitted with three or four cots in expectation that a swap of $1 million in cash for the hostages would be made aboard the ship within days.

By one account, the Erria made repeated approaches to the Lebanese coast during that period, staying in constant radio contact with nearby Israeli navy ships. But the hostage swap was never pulled off, and maritime records indicate that the freighter left Cyprus June 5.

From Larnaca, the Erria steamed westward to Italy, then to Setubal, then Copenhagen. On July 10, it docked in the Polish port of Czczezin, where Parlo acknowledged that it picked up a shipment of AK-47 rifles.

Eight days after departing from Czczezin, the Erria returned to Setubal, where it loaded 6,916 boxes of munitions weighing 210 tons, according to records made available to The Times. The buyer is not known.

Nor is the ultimate destination. One set of port documents claims that the Erria listed its next port as Yemen. Questioned about that, S.A. Shipping's Parlo said the Erria was never bound for Yemen "as far as I can remember."

Guatemala a Destination

But documents drawn from the ship's cargo manifest list another destination more familiar to Parlo: Puerto Barrios, Guatemala, where the Erria allegedly had been bound in 1985. As for that listing, Parlo said: "It is possible. But I can't say offhand."

The fully loaded Erria left Setubal on July 23. Days later, it claimed engine trouble and returned to anchor in the harbor, where it sat silently for two weeks. It docked briefly, then headed back out to sea Aug. 29, then returned Sept. 8, again pleading mechanical problems.

Port officials remain privately skeptical of those reports, noting that the Erria did not even approach a dock the final time it came to the harbor. "Maybe they needed time to sell their cargo," one official said.

Indeed, the Erria again chugged out of Setubal harbor on Sept. 9 carrying the same weapons that it had loaded almost two months earlier. But this time, the destination was different; the ship told harbor pilots it was bound for Cherbourg, France.

Four days later, that is where it tied up. Longshoremen spent two days emptying the hold, moving crates of guns and bullets to pallets that would shortly vanish from the port.

"There was no purchaser in Cherbourg," Parlo said. "The cargo was transshipped" out of the country.

Officials in Cherbourg, which specializes in the loading and unloading of weapons, refused to disclose the destination of the Erria's cargo. Remi Marie-Jean Mauger, a maritime agent and Denmark's honorary consul in Cherbourg, said he could not recall that the Erria had unloaded any cargo at the port, but a high government official said the ship was empty when it left Cherbourg.

From Cherbourg, the freighter sailed almost directly to Cyprus and anchored offshore--awaiting, Parlo claimed, a shipment of oranges. But another knowledgeable source contended that the ship was again anchored in a waiting game for hostages who never appeared.

It is now known that North and the White House were planning an arms sale to Iran at the time in the hope of freeing remaining American hostages. However, that shipment was not delivered until Oct. 27, and there has been no previous indication that Americans might have been close to freedom in early October.

For whatever reason, the Erria's operators are believed to have turned their attention to a different prize--a captured Soviet tank.

Sailed to Haifa

On Oct. 8, the Erria pulled into the Israeli port of Haifa, where a source with reliable knowledge of the ship's movements said that it took on a container loaded with machine guns believed to be of American origin. It anchored weeks later just south of the sultanate of Oman, a few miles across the Strait of Hormuz from Iran.

Parlo acknowledged that the ship had planned to deliver a cargo to the Iranian port of Bandar Abbas. He vehemently denied that the cargo, which he refused to identify, was of U.S. origin.

Another source said that the Erria had been instructed to pick up one or possibly two tanks at Bandar Abbas and ferry them to an island off the southern coast of Africa in the Indian Ocean. The United States maintains a naval base on the Indian Ocean island of Diego Garcia, but it could not be learned whether the tank was destined for that port.

The machine guns were never delivered and the tank was never picked up. Parlo said, without confirming the identity of the cargo, that the delivery was not made because the buyer refused to pay him for the Erria's lengthy anchorage off Oman while awaiting permission to dock.

Some time in December, the freighter left the seas around Oman empty-handed, steamed up a narrow finger of the Red Sea and dropped off its container of machine guns at the southern Israeli port of Eilat. It waded through choppy seas toward home and finally reached Korsor on a frigid day in mid-January.

It sits there today, under guard and for sale.

Staff writers Doyle McManus and Don Shannon in Washington, Bill Rempel in Los Angeles, Marjorie Miller in Honduras and researcher Alice Sedar in Paris contributed to this story. Michael Wines reported from Korsor, Denmark, and Richard E. Meyer reported from Setubal, Portugal.

The Voyages Of Oliver North's Vessels

February 13, 1987

April 28, 1986: Iranian-born California businessman Albert Hakim, acting at the direction of Lt. Col. Oliver L. North, purchases the Danish ship Veralil for 2.5 million Danish crowns, or about $312,500. The owner of record is a dummy Panamanian firm, Dolmy Business Inc.

May 5: Hakim changes the ship's name to the Erria and registers it in Panama. At roughly this time, the Copenhagen shipping firm Queen Shipping ApS contracts to finance and manage the Erria under Hakim's direction, with expenses to be repaid later.

July 10: The Erria docks at Szczecin, Poland and loads 158 tons of AK-47 rifles, hand grenades and ammunition paid for by Energy Resources Inc., another Panamanian firm with links to the Swiss firm Compagnie de Services Fiduciaires, fiscal agent for a number of firms linked to the Iran arms deals.

July 19: The Erria docks at Setubal, Portugal and takes on 200 tons of Portuguese munitions, including 14 tons of land mines, paid for by Energy Resources. It departs, saying it is bound to Yemen.

Aug. 15 to Sept. 8: The Erria returns twice to Setubal, claiming it needs to repair engine and propeller damage. It first declares it is bound for Puerto Barrios, Guatemala, then for Cherbourg, France.

Sept. 12: Queen Shipping charters a second vessel, the Iceland Saga, in Flossing Roads, Netherlands and orders it to sail to Cherbourg.

Sept. 13: The Erria docks in Cherbourg, unloads its entire 358-ton cargo of munitions and leaves empty a week later, bound for Cyprus.

Sept. 14: The Iceland Saga docks at Cherbourg, loads the Erria's 358-ton cargo and leaves six days later, saying it is bound for Puerto Barrios.

Oct. 1: The congressional ban on U.S. military aid to Nicaraguan rebels expires.

Oct. 8: The Iceland Saga docks at the U.S. Army's main East Coast munitions depot, at Sunny Point, N.C., and unloads 268 tons of arms. It unloads another 90.3 tons of ammunition for the Defense Department in nearby Wilmington. Its charter contract with Queen Shipping now ended, it leaves empty for Quebec and other business.

Jan. 12, 1987: With the Iran- contras affair under U.S. investigation, the Erria returns to the Danish port of Korsor. Its eight months of covert operations have cost Queen Shipping upwards of $500,000.

Feb. 12: A Danish court orders the Erria seized in a dispute between Queen Shipping and Albert Hakim over $200,000 in debts from the ship's operations.

February 20, 1987

PANEL SAID TO HEAR OF EFFORT TO HIDE REAGAN IRAN ROLE; Arms Operation Made Wide Use of Danish Ships

By STEVE LOHR, Special to the New York Times

COPENHAGEN, Feb. 19— A Danish connection to the Iran-contra affair has become clearer in the last week, largely as a result of a court case here. 

A Copenhagen shipping firm figured in efforts by two associates of Lieut. Col. Oliver L. North, then on the National Security Council staff, to provide arms to Iran and the Nicaraguan rebels. The two men are Albert Hakim, an Iranian-born California businessman, and Richard V. Secord, a retired Air Force major general. 

The Copenhagen firm, Queen Shipping, has filed a lawsuit against a company controlled by Mr. Hakim that is said to owe Queen Shipping about $200,000. The firm's two partners, Svend Andersen and Tom Parlow, have talked publicly about their dealings. Details have also been provided by the Danish Seamen's Union, which monitors arms traffic involving Danish ships. Disclosures Contradict Reagan 

The disclosures contradict comments by President Reagan at a news conference in November. At the time, the President dismissed charges by the seamen's union that the United States Government might be using Danish ships for the Iran arms deals ''We certainly never had any contact with anything of the kind,'' he said. 

Besides the Danish firm, the Hakim-Secord operation included Swiss bank accounts and dummy companies in Panama and Geneva. Yet for all the intrigue and expense, the operation achieved few of its aims. 

Among the projects that fell through was an attempt to exchange rifles in Iran in November for two captured Soviet T-72 tanks, sought by the Pentagon for intelligence purposes. 

''The whole operation was very amateurish in many ways,'' said Henrik Berlau, vice president of the Danish Seamen's Union. 

Still, a couple of the deals succeeded. For example, the Copenhagen firm confirmed that it had arranged a shipment in October of AK-47 rifles from Poland to be delivered to an Army warehouse in North Carolina. 

The Los Angeles Times reported that the shipment was apparently intended for the Nicaraguan rebels, known as contras, since the Pentagon buys Soviet-bloc weapons for rebels fighting Communist-supported governments. But the shipment of Soviet-bloc weapons to a warehouse of the Pentagon also raises the question of its role, if any, in the clandestine deals. Court Action Over Hakim's Debt 

The Justice Department investigation of the Iran-contra affair seems to have led to the court action here. The Queen Shipping partners say they believe Mr. Hakim cannot settle the $200,000 debt because his Swiss bank accounts were frozen in December at the Justice Department's request. 

Queen Shipping, according to Mr. Andersen, sent its bills not to the Hakim-controlled shipping concern, Dolmy Business Inc., but to the Compagnie de Services Fiduciaires in Geneva, the apparent paymaster for the operation. 

For eight months starting last spring, Queen Shipping arranged arms shipments at the behest of Mr. Hakim, the firm's partners said. 

''It was always Hakim who called us, saying where the ship should go next,'' Mr. Andersen recalled. 

The ship movements were a complex pattern of shuttling among ports in Europe, in the Middle East and even in the United States. The main ship was the Erria, a 163-foot freighter. Mr. Hakim came here to negotiate for its purchase from Arne Herup, the captain, for $312,500 on April 28. Geneva Company Bought Ship 

Mr. Hakim was accompanied by Willard I. Zucker, an American lawyer who effectively ran the Geneva company. The Danish register of ships shows that the Geneva company bought the Erria and that Queen Shipping was engaged to operate it. Contracts for Dolmy Business, a Panamanian dummy company used by Mr. Hakim, usually gave its address as in care of the Geneva company. 

Crew members' contracts provided unusually high life insurance. In one contract, signed June 20, Dolmy agreed to pay for a $300,000 life insurance policy; a standard level is $75,000. 

''Those huge insurance policies show that they knew what they were doing was unusual and dangerous,'' said Mr. Berlau. 

Soon after the ship's purchase, Mr. Hakim had the Erria's flag of registry changed to Panama, where operating regulations are looser. The ship's involvement in carrying the AK-47 rifles and the attempt to trade arms for the Soviet T-72 tanks show how it worked. 

On July 10, the Erria arrived in Szczecin, Poland, where it picked up the AK-47 rifles. Nine days later, the ship picked up munitions in Setubal, Portugal. Documents presented to port officials said it was departing for Yemen, but it soon returned, reporting engine trouble. It set off again with a stated destination of Guatemala and once more returned. Finally it left for Cherbourg, where it arrived Sept. 13. 

Such erratic movements are characteristic of vessels in the arms trade, according to shipping sources. 

At Cherbourg, Mr. Hakim had the cargo transferred to a Danish-flag freighter, the Iceland Saga, which on Oct. 8 arrived at the Sunny Point Munitions Depot, an Army warehouse near Wilmington, N.C., the operators say. 'Where It Went, We Don't Know' 

Officials of the Danish firm say they do not know whether the AK-47 rifles were headed for Nicaragua. ''The cargo was discharged in Wilmington,'' Mr. Andersen said. ''But where it went after that, we don't know.'' 

By contrast, the rifles to be traded for two Soviet tanks never reached Iran. The Erria loaded them in November at Haifa, Israel, and then headed toward Bandar Abbas, Iran, but for unexplained reasons never docked. 

After waiting in the Gulf of Oman for 32 days, the Erria returned to Eilat, Israel, on Dec. 12 to unloaded its cargo, mostly AK-47 rifles. According to the ship's crew, the dock workers in Eilat were the ones who had handled the cargo in Haifa. The Israeli suppliers may have deemed it necessary to use the same crew to keep the deal secret. 

The Erria is now docked in the Danish port of Korsor. The Danish court has seized the ship as collateral for the money that Mr. Hakim's company is said to owe Queen Shipping. 

The American operations have focused attention on the broader issue of Danish involvement in arms trafficking. There now appears to be majority support in the Danish Parliament for a bill that would prohibit Danish firms from shipping arms to countries at war or to trouble spots. The bill would also require companies to get Government approval to transport arms.

NORTH APPARENTLY TRIED A SWAP FOR SOVIET TANK

KORSOR, DENMARK -- A small Danish freighter, apparently directed by Lt. Col. Oliver L. North of the National Security Council staff, secretly tried to deliver U.S.-made machine guns to Iran last October in an attempted swap for a captured Soviet T72 tank long coveted by U.S. intelligence agencies, sources said.

The weapons were loaded aboard the Erria at the Israeli port of Haifa, and the ship sailed through the Suez Canal, down the Red Sea and around to the mouth of the Persian Gulf. There, the Erria waited at sea for several weeks, hoping for a signal to land at the Iranian port of Bandar Abbas, where the exchange was to occur.

Ultimately, this mission, like other clandestine Reagan administration attempts to deal with the government of Ayatollah Ruhollah Khomeini, ended in failure. Arrangements for picking up the tank somehow fell through, and the machine guns were returned to Israel.

The voyage and several other missions apparently undertaken by the Erria in the last two years reflect the way North and associates in and out of government initiated covert activities to further the Iran-contra deal and other ends.

The Erria's odyssey, told by crewmen and port records in Europe and Central America, sheds light on how North and others apparently created and ran a cloak-and-dagger apparatus to supplement established U.S. intelligence institutions.

The odyssey raises questions about where the network of covert wheeler-dealers found money to buy and operate a small freighter, on whose authority the ship sailed and who ultimately was responsible for devising its worldwide missions.

Although much about the Erria is unknown, in the last two years it has sailed to four continents, apparently going wherever North's special interests directed. For instance:It carried 500 tons of weapons, apparently intended for the Nicaraguan contras, from a harbor in Poland to a transshipment point in France. On a trip to Honduras, the Erria turned over Soviet-made rifles and Portuguese ammunition to contra agents. It stood off the coast of Cyprus to pick up a courier bearing $1 million in cash from Texas billionaire H. Ross Perot. The funds were to be used as ransom for American hostages who North expected would be freed in Lebanon.

In its last known mission, the Erria reportedly was sent to Iran to pick up the T72 tank. Documents obtained by the Los Angeles Times from arms merchants show that U.S. agents have been negotiating with Iran since at least last March to obtain a T72 captured in Iran's war with Iraq.

The Defense Department wants to examine the tank, one of the Soviets' most advanced, because of its armor alloy and laser-targeting systems, according to court documents.

The attempt to trade the machine guns was another undeclared deal with Iran. It fell through at about the same time, early last November, that the U.S. arms sales to Iran became public. The Erria returned home at the end of November, about the time President Reagan fired North.

The 163-foot Erria is owned by a Panamanian shell company called Dolmy Business Inc., which bought it last April. The Times reported last week that Dolmy, like several dummy firms tied to the Iran-contra scandal, has business ties with the Swiss firm CSF, which helped establish bank accounts used for North's Iran arms deals.

Many of the accounts and companies were controlled by retired Air Force major general Richard V. Secord and his business partner, Iranian-born Californian Albert A. Hakim, according to congressional investigators and administration officials.

The two coordinated operations with North, who handled terrorism and contra issues from his National Security Council office.

Shipping agent Thomas Parlo of S.A. Shipping in Copenhagen, who has a lengthy history of weapons transport, said Tuesday that he is the major figure behind Dolmy and that he is the Erria's owner.

Parlo also said he is "a longtime personal friend" of Thomas Clines, a former Central Intelligence Agency officer and North associate named as a figure in the Iran arms deals and contra-aid network. American sources have alleged that Clines obtained a ship for North's use in the operation.

Parlo confirmed some details of the Erria's travels but denied that the ship is connected with arms-for-hostages deals, the contras, Clines and North.

"I do not know North . . . . I'm not in any business deals with Tom Clines," he said. "I can guarantee to you 100 percent that this ship has never been involved in any hostage activities."

Reliable U.S. and European sources dispute those denials, saying the Erria was the centerpiece of a North-managed operation, dubbed Project Democracy or Democracy Inc., and was deeply involved in hostage deals and other free-lance ventures.

Most persons with knowledge of the Erria's secret travels refused outright to discuss them. One person who worked on the Erria during the last eight months said, "I'm not telling you about it. They will kill me."

`Ollie`s Ship` Became Symbol Of Bungling

November 19, 1987|By Terry Atlas, Chicago Tribune.

WASHINGTON — Arne Herup, captain of the small Danish freighter MV Erria, is a man with special skills.

As described in Wednesday`s report of the congressional Iran-contra committees, Herup skippered the Erria on gunrunning missions in 1984 and 1985 to the Persian Gulf, Nigeria and Central America, where his particular talents came to the attention of ``the Enterprise.`` That was the name for the covert organization being assembled by Lt. Col. Oliver North, a National Security Council staff member, with help from retired Air Force Gen. Richard Secord and businessman Albert Hakim.

By early 1986, the Enterprise had developed an independent source of money: profits from sales of U.S. arms to Iran. It had a banker in

Switzerland, former Internal Revenue Service lawyer Willard Zucker, who had a talent for moving money without a trace through a maze of numbered bank accounts and offshore tax-haven companies.

And North, when he needed a ship on short notice in April, 1986, arranged for a Panamanian company secretly owned by the Enterprise to buy the Erria from Herup for $312,000. Herup was asked to stay on as captain and was told that ownership of the vessel would be returned to him at no cost once its missions were completed.

Over the next nine months, ``Ollie`s Ship,`` as it became known to some at the National Security Council, sailed at North`s direction on one failed mission after another.

North dispatched it to a point off Lebanon in May to be ready to pick up American hostages if they were freed under his plan to have U.S. drug agents ransom them. They weren`t freed.

In July, Herup was directed to sail to Poland and Portugal to pick up tons of arms intended to be supplied covertly to the Nicaraguan contras, evading a congressional ban on U.S. government arms sales to the rebels. But with Congress about to end that prohibition, the Enterprise interrupted the shipment and instead sold the arms at a loss to a private arms dealer in Europe, who turned around and resold them at a profit to the CIA.

In October, the ship sailed into the Israeli port of Haifa, after its name was altered to Ria to avoid running afoul of the Arab boycott, to pick up a crate of Eastern-bloc weapons that North anticipated swapping to Iran for two Soviet T-72 tanks. The ship waited six weeks in a Persian Gulf port for the Iranians, who did not show up.

In its report, the congressional Iran-contra committees said the story of the Erria is in some ways more than just a small anecdote against the backdrop of a much larger scandal.

``The Erria was in a sense a metaphor for the other operations of the Enterprise-ventures that began with ambitious expectations but accomplished nothing,`` the committees said.

``But the fate of these ventures cannot obscure the danger of privatization of covert operations or the fact that the participants in the Enterprise had audacious plans for covert operations,`` their report said.

``Had the architects of the other operations been emboldened by success and not frustrated by failure, the committees can only conjecture, with apprehension, what other uncontrolled covert activities on behalf of the United States lay in store.``

North told the congressional panels that, as early as 1984, then-CIA Director William Casey wanted to establish an offshore, independently financed entity capable of conducting covert operations.

And by the time the Enterprise was exposed, it had taken in $48 million and put together the basic elements of a privately run CIA operating outside the U.S. law.

At North`s request, the report said, the Enterprise sent radios worth $100,000 to a foreign political party and provided $30,000 to U.S. drug agents for the failed ransom mission in Lebanon.

The congressional committees said North`s establishment of a ``full-service covert operation`` violated provisions of the National Security Act, requiring that Congress be informed of significant anticipated intelligence activities.