Independent counsel Lawrence Walsh reportedly has granted full immunity from prosecution to a second witness as part of his investigation into the Iran-contra affair.
Walsh may extend the legal protection to more people in exchange for their testimony, according to sources who spoke on the condition they not be identified.
”In Watergate, they gave immunity to 27 witnesses,” one source said.
”In this, others will get immunity, too, and there may be up to a dozen before it is all over.”
Walsh has granted immunity to Fawn Hall, a former secretary to Marine Lt. Col. Oliver North. North, a National Security Council staff member, was dismissed from his post last November for his role in the alleged diversion of Iran weapons sale profits to Nicaraguan rebels, known as contras.
Meanwhile, North filed a lawsuit in federal District Court here seeking to block Walsh`s investigation into his activities. The suit contends that the independent counsel`s investigation violates the Constitution by delving into sensitive foreign policy matters.
The sources would not disclose the identity of the second person whom Walsh granted immunity from prosecution, but one informed source described the witness as ”a private individual, not part of the government.”
This source said the witness was granted immunity after emerging as a low-level participant in possible illegal activities unearthed by Walsh`s broadening investigation.
Hall, the first witness to be granted immunity, told prosecutors that last Nov. 21 she helped North destroy documents related to the Iran-contra affair just before Justice Department investigators planned to question North, sources said.
Hall reportedly also has told investigators that acting on North`s orders, she helped rewrite several of his memorandums to obscure some aspects of the secret dealings with Iran, sources said.
She also has provided prosecutors with details about key entries in her diary on North`s travel and office appointments, sources said.
Because of information supplied by Hall and other evidence, Walsh has widened his investigation to examine possible legal violations, including obstruction of justice, sources said.
In his lawsuit, North argued that a 1978 law that created the special prosecutor`s office was unconstitutional because it usurped the President`s power to appoint prosecutors. North asked the court to stop Walsh from proceeding with the investigation.
The suit marked the second legal challenge to the 1978 law, the Ethics in Government Act, which empowers the attorney general to seek appointment of an independent counsel to investigate charges of wrongdoing involving high government officials.
The first such suit was filed by Tim Kraft, a former campaign aide to President Jimmy Carter. But Kraft dropped his suit after it became apparent that he would not be charged with a crime.
In a brief statement, Walsh said he was confident the law is constitutional.
In other developments Tuesday:
— Rep. Lee Hamilton (D., Ind.), chairman of the House Select Committee investigating the Iran-contra affair, said the panel would vote Thursday on whether to grant limited so-called ”use immunity” to ”several witnesses”
in exchange for their public testimony.
The corresponding special Senate investigative committee plans a similar vote Thursday. Unlike the full immunity from prosecution granted by the independent counsel, the use immunity protects only a witness` testimony before Congress from being used as a basis for later prosecution.
— President Reagan suggested that he could not remember whether he gave his prior authorization for the first secret U.S. weapons shipment to Iran in 1985.
”It`s possible to forget,” Reagan told reporters at a White House photo session with visiting black business leaders.
The President`s involvement in the controversial weapons shipment from Israel to Iran in September, 1985, is a matter of dispute among top aides. It also is a key question being examined by investigators because the shipment came four months before Reagan signed a written ”finding” making such weapons deliveries legal.
Reagan has given contradictory accounts about his role in the shipment during two separate appearances before the Tower Commission investigating the Iranian arms affair, sources said.
The commission`s report, scheduled for release Thursday, is expected to recount Reagan`s differing versions and sharply criticize the President and his staff for their handling of the policy toward Iran.
In his first appearance before the panel, the President said he had given his prior approval to the shipment. But in a second session, Reagan contradicted himself and said he thought he had not given his prior authorization for the transaction, sources said.
The issue is a matter of dispute between former National Security Adviser Robert McFarlane and White House Chief of Staff Donald Regan. McFarlane testified under oath to Congress that Reagan gave his prior approval for the shipment.
Regan, however, has testified under oath to Congress that the President did not give his approval of the shipment until after it had been sent to Iran.
Asked by reporters Tuesday about the discrepancies and about his own conflicting testimony, the President retorted with a challenge: ”I want to ask you all one question. Everybody who can remember what they were doing on Aug. 8, 1985, raise your hand.”
Looking about the Cabinet Room, Reagan went on: ”I think it`s possible to forget. Nobody`s raised any hands.”
The President`s citing of Aug. 8, 1985, apparently referred to a secret high-level National Security Council meeting in the White House that day to discuss a proposal to send weapons to Iran.
McFarlane told the Senate Select Intelligence Committee last November that Reagan gave his verbal approval for the shipment after the meeting, and that the transaction took place about a month later.
Sources said the Tower report is not expected to accuse Regan of engaging in any illegal activities. The report is expected to provide no evidence contradicting the chief of staff`s assertion that he was not aware of the alleged diversion of weapons sale profits to the contras.
— Sources also said the Tower Commission report will support McFarlane`s contention that Reagan was informed at virtually every stage of the Iran arms sales.
— The White House announced that Regan, under heavy pressure from First Lady Nancy Reagan and others to resign, has told aides he would ”discuss his situation with the President” after the Tower Commission report is released. ”I think the chief of staff is very concerned that these discussions about his tenure here not disrupt the management of the White House, especially during this period when we are receiving the Tower board report and responding to it,” White House spokesman Marlin Fitzwater said.
Sources said the Tower report is not expected to accuse Regan of engaging in any illegal activities. The report is expected to provide no evidence contradicting the chief of staff`s assertion that he was not aware of the alleged diversion of weapons sale profits to the contras.
Nonetheless, White House sources said the President already has reluctantly decided to replace the combative and controversial Regan shortly after the report is released. Regan is expected to resign within days, possibly as soon as the weekend, the sources said.
The President, Mrs. Reagan and other White House insiders have privately extended feelers to several former Reagan advisers about taking over as chief of staff, the sources said.
The New York Times also reported Wednesday that Reagan and Vice President George Bush were regularly briefed on the arms sales by Poindexter at morning intelligence briefings. The newspaper said Reagan took little part in the briefings on the arms initiative, often asked only about the American hostages held by pro-Iranian elements in Lebanon and told anecdotes.
Reached Tuesday night, former Sen. John Tower (R., Tex.), the commission head, said only: ”I`m not going to confirm or deny anything. . . . I wouldn`t jump to any hasty conclusions (about the commission` findings).”
— A Los Angeles Times poll published Wednesday found that 44 percent of Americans believe Reagan is too old for his job, and 60 percent think he relies too much on his advisers. But the telephone survey Feb. 20-23 of 2,346 adults nationwide found that Reagan`s approval rating had risen from 50 percent late last year to 55 percent now. A slight plurality–43 percent to 39 percent–believed Reagan has lied about the Iran-contra affair.
— The CIA bluntly denied Wednesday a report alleging that CIA director-nominee Robert Gates helped circulate a memo favoring arms dealings with Iran. In a sharply worded statement, CIA spokesman George Lauder said the New York Times ”falsely” alleged that Gates agreed to circulate the memo in order to win favor with senior officials.
Lauder said Gates, who is serving as the acting CIA director pending his confirmation to replace William Casey, did not review the memo by an intelligence officer and received it at the same time it was sent to other administration officials.
