Walsh Sees Iran-Contra Probe as Bearing Fruit : Cites Possible Criminal Charges and Allegations ‘High Officials’ May Have Violated Public Trust

WASHINGTON —  Independent counsel Lawrence E. Walsh said Tuesday that most avenues of his investigation into the Reagan Administration’s arms sales to Iran and assistance to Nicaraguan rebels are bearing fruit.

Walsh said that a grand jury is uncovering extensive evidence that could lead to criminal charges related to the Iran arms sales and U.S. funding of the contras during the two years when such aid was illegal.

Under investigation, Walsh said, are allegations that “high government officials” may have violated their public trust, misused their positions and been manipulated by former government officials.

Walsh, in an interim report that adds up to his most detailed comments on the 4-month-old inquiry, tied no names to his description of the probe.

But central figures include former CIA Director William J. Casey, former National Security Advisers John M. Poindexter and Robert C. McFarlane and Lt. Col. Oliver L. North, who was fired from the National Security Council staff after acknowledging that Iranian arms sale profits had been diverted to the Nicaraguan rebels.

Sen. Warren B. Rudman (R-N.H.), vice chairman of the Senate committee investigating the scandal, recently urged Walsh to drop attempts to prove a conspiracy to defraud the United States on grounds it would be too difficult and that it would further delay grand jury action.

Walsh, acknowledging that Rudman was not the first to make that suggestion, said that “there is no appropriate basis for narrowing” the investigation now. “Most lines of inquiry are proving fruitful,” he said. “None has yet been abandoned.”

Investigations are being conducted at the White House, the office of Vice President George Bush, the CIA, the National Security Council, the President’s Intelligence Oversight Board and the departments of Defense, Justice, State, Transportation and Treasury, Walsh said.

He warned the Senate and House committees investigating the affair not to grant immunity from prosecution to any more central figures as a way of forcing them to testify. Further grants of immunity, he said, “will jeopardize their prosecutions and may prevent a fair and judicious assessment of individual culpability.”

Rudman and Senate Committee Chairman Daniel K. Inouye (D-Hawaii) said in a joint statement that they were “surprised” by Walsh’s warning because they “are not contemplating additional grants of immunity to other central figures.”

The congressional committees have offered limited immunity to Poindexter under an arrangement that delays any public testimony until at least June 4. Poindexter, who resigned last November, may be the only person in the investigation who can answer a central question: How much, if anything, did President Reagan know about the apparently illegal support for the contras.

Against North Immunity

Walsh said he hoped the committees would decide against granting similar immunity to North.

Under a grant of immunity, an individual’s testimony may not be used against him as evidence or even as leads, and the prosecution must prove that all its evidence was derived from independent sources. Given immunity, a witness no longer may refuse to testify, as Poindexter and North have so far, on grounds that their Fifth Amendment right against self-incrimination would be violated.

Walsh said his office has made extensive efforts to protect any potential prosecutions of those granted immunity, expediting those parts of the investigation most likely to be affected by congressional immunity grants.

Walsh disclosed that he now has 35 FBI agents assigned to his office, up from about 18 in the early stages of the case, along with 11 Internal Revenue Service agents and four customs agents.