Retired CIA official, Clines, convicted of Iran-contra tax charges

September 19, 1990|By Kelly Gilbert | Kelly Gilbert,Evening Sun Staff

A federal jury in Baltimore has convicted Iran-contra figure Thomas G. Clines of four felony tax charges tied to his acquisition of guns for the Nicaraguan rebels in an operation masterminded by former White House aides John Poindexter and Oliver North.

The jury returned the verdict yesterday after 3 1/2 hours of deliberations that capped a 10-day trial in U.S. District Court.

Judge Norman P. Ramsey set sentencing for Oct. 31. Clines, who is free on personal recognizance, could face 16 years in prison and $1 million in fines.

Clines, 62, a retired CIA official, sat back in his chair and stared at each juror as a court clerk polled the panel of three men and nine women.

"I think the evidence was very strong, and we're glad the jury agreed with that," prosecutor Stuart E. Abrams, who led the government's three-man trial team, said after the verdict.

"I think it's selective prosecution," said Clines, who last week accused Iran-contra independent counsel Lawrence E. Walsh of prosecuting him for political reasons.

Defense attorney Paula M. Junghans said she believes "there are several appealable issues" in the case, but said no decision has been made on an appeal.

Clines, of Middleburg, Va., was convicted of failing to report more than $260,000 in income from his role in the Iran-contra arms scheme on his 1985 and 1986 tax returns and of failing to report his interest in two foreign financial accounts to the Internal Revenue Service. One account bore the code name, "C. Tea," an apparent derivative of his initials.

The charges stemmed from Clines' work as a partner in the arms-for-profit operation dubbed "The Enterprise" with Richard V. Secord, a former Air Force major general and deputy assistant secretary of defense, and Albert Hakim, an Iranian-born American businessman. Secord and Hakim pleaded guilty last November to criminal charges tied to the Iran-contra affair.

Prosecutors from Walsh's office contended at this trial that Clines earned $882,953 from The Enterprise over two years for obtaining rifles, grenades, ammunition and other weaponry that he shipped to the contras.

They said Clines knowingly and willfully failed to report his foreign financial interests and part of his Iran-contra income in an attempt to cover up the clandestine operation, which operated through a complex series of foreign companies and accounts in a web of international intrigue fed by donations from contra supporters and so-called "third countries."

Government evidence included hundreds of documents and colorful money-trail charts which allegedly showed the flow of Clines' Iran-contra profits to several U.S. banks and the "C. Tea" account, a secret investment account in Switzerland.

But the evidence fell short of pretrial predictions that the government would reveal new details of the money flow of the entire Iran-contra operation.

Clines fully acknowledged his role in The Enterprise, said Secord told him it was to be a covert operation and that he routed arms shipments to the contras through foreign ports to avoid breaking U.S. laws that barred such shipments.

But he testified that he knew nothing of the money management maneuvers of The Enterprise, had no signature authority over any of its financial accounts and never saw any Iran-contra ledgers. He said he never learned how much money he truly made in the arms operation until he saw documents seized by the government as he prepared for his criminal trial this year.

Clines said he signed papers establishing the "C. Tea" account in September 1986 and did not know that Willard I. Zucker, an American businessman who managed The Enterprise's money in Switzerland, had started the account in Geneva and put thousands of dollars of Clines' arms profits in it months before that.

Clines also claimed, in testimony supported by other witnesses, that he ordered his Bethesda accountant to prepare an amended 1985 tax return in 1987 when he learned that he had underreported his income.

The prosecution team claimed that Clines filed his amended return only after the Iran-contra affair came under investigation by Congress.

"You can't un-rob a bank," Abrams told the jury in closing arguments Monday. "The amended return doesn't get him off the hook."

Abrams said Clines brought money into the United States when he needed it and hid other cash in a safe deposit box in Switzerland.

"What he had stashed away . . . he didn't have the slightest intention of reporting," the prosecutor said.

Junghans said Clines might have been negligent but did not scheme to file false returns. If hiding his Iran-contra profits was Clines' motive, she said, "he could hidden the money in Timbuktu. . . . He didn't have to bring it home to banks right in his own backyard."

Junghans also told the jury that Clines was not on trial for doing business in large sums of cash.

"It doesn't matter if he brought it in [to the United States] in pennies," she said.

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