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Friday, May 29, 1992 - Page updated at 12:00 AM

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A Surprise In `October Surprise' Investigation -- Congress' Lead Investigator Linked To Contra-Arms Deal

Hartford Courant

E. Lawrence Barcella Jr., the prominent Washington lawyer hired by Congress this spring to investigate whether Republicans cut a secret deal with Iranians to win the 1980 presidential election, has a secret of his own.

When he was a government prosecutor, Barcella gave a legal opinion clearing the way for a private $5 million shipment of Soviet-bloc rifles, machine guns and grenade launchers to the Nicaraguan contras in the summer of 1985 - 10 months after Congress had cut off government support to the contras.

The shipment was part of Lt. Col. Oliver North's clandestine, ill-fated Iran-contra operations. It was arranged by retired Army Gen. John Singlaub, a veteran of covert operations, and Barbara Studley, a former conservative radio talk-show host who created a company called GeoMiliTech Consultants Corp. to break into the arms business.

After the Iran-Contra scandal erupted in late 1986, Singlaub and Studley insisted their shipment of Soviet-bloc arms was legal because it had been approved by the Department of Justice.

HIGH-PROFILE PROSECUTION

At that time Barcella, 39, was an assistant U.S. attorney in the District of Columbia. He had won renown for his relentless pursuit and prosecution of Edwin Wilson, a renegade CIA agent working for Libya.

Assistant U.S. attorneys aren't supposed to give legal opinions on private business deals.

So how did Singlaub and Studley get one?

Barcella, in a series of telephone interviews this month, refused to explain.

His mysterious involvement in the Iran-contra affair raises questions about his ties to intelligence agencies and how they might affect his work as chief counsel for the sensitive congressional investigation of the so-called "October Surprise" case.

Barcella dismissed his legal opinion on the Singlaub-Studley shipment as no big deal.

"It was a simple situation where somebody in the government came to me," he said. But he refused to identify the person who sought him out or to disclose what was said, other than to acknowledge that Studley's name was mentioned. He said that he did not know her at that time.

Rep. Lee Hamilton, D-Indiana, who selected Barcella to investigate "October Surprise," said that he learned about the legal opinion yesterday after inquiries by the Hartford Courant.

And the U.S. attorney in Washington in those days - Barcella's boss - was surprised earlier this month when asked about Barcella's role in the weapons deal.

"Assistant U.S. attorneys do not issue legal opinions on arms shipments," Joseph diGenova said. "Larry would never have done that. . . . It's a quagmire for any prosecutor to get into that stuff."

But a week later, after Barcella had talked with him, diGenova softened. "I don't want to make a judgment about what he did when I don't know everything," diGenova said. "Larry was sought out by a lot of people in intelligence and by a lot of people in the marshal's service and the FBI who knew that he was creative."

When they talked this month, diGenova said Barcella did not tell him the name of the government official who asked for the legal opinion. However, diGenova said Barcella, through his work on anti-terrorism cases, knew North, the former National Security Council official who was fired soon after the Iran-contra scandal broke into the headlines in late 1986.

Barcella said North, whom he met only once, was not the government official who asked for the legal opinion. North was later prosecuted and found guilty of lying to Congress, destroying government documents and accepting an illegal gratuity, but the convictions were overturned on appeal.

INDEPENDENCE ASSERTED

As for his past involvement with intelligence agencies and the clandestine side of the government, Barcella insisted that those relationships would not compromise his "October Surprise" investigation.

"I don't see where that causes a problem," he said. "I'm going to do as thorough and independent and professional an investigation as I can."

The congressional investigation centers on negotiations with Iranians to free 52 Americans taken hostage in 1979 when the U.S. Embassy in Tehran was overrun.

The basic allegation is that Reagan-Bush campaign officials - fearing that Jimmy Carter would pull off an election-eve coup by winning release of the hostages - cut their own deal with the Iranians, offering to arrange shipments of much-needed arms for Iran's war with Iraq if they held the hostages until after the November vote.

The Carter administration's negotiations with the Iranians broke down weeks before the 1980 election. The 52 Americans were released hours after Reagan was inaugurated.

Hamilton said he first heard of the Singlaub-Studley legal opinion yesterday and had only talked briefly with Barcella.

"I really cannot comment because I do not feel that I know that much," Hamilton said.

Asked whether he would try to get more information, he said, "I will investigate all aspects of criticisms of staff, including Larry or anybody else."

Copyright (c) 1992 Seattle Times Company, All Rights Reserved.

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