"To the best of my recollection, it was soon after (North was hospitalized), " the source said. Officials at the NSC and the FBI say the background investigation for NSC nominees, while extensive, does not usually involve a review of medical records.

"Normally, no, that doesn't come into the background investigation, " said FBI Special Agent Susan Schnitzer. ". . . Unless on their application they stated they have a problem."

NSC officials, citing the Privacy Act, said they would not disclose the contents of North's background form. An NSC spokesperson said investigators would not normally examine a nominee's medical record unless the application disclosed previous treatment for a nervous disorder.

"They do ask a question if your family has a history of mental illness or if you've ever had a problem of this nature, " said Jackie Murphy.

The hospitalization is a troubling incident in North's otherwise impressive military career. It has long been the subject of discussion within the close-knit circle of military acquaintances who have known North since his days at the Naval Academy.

"It was common knowledge, " said one senior Marine official.

Currently every Marine with a top secret clearance or higher completes, under penalty of perjury, form DD-398, a Statement of Personal History. The form asks for an answer of yes or no to the question, "If hospitalized or treated by a doctor for nervous disorders."

An instruction booklet for preparing the forms explains: "Often a nominee will indicate 'no' when in fact he has been treated for a nervous disorder or a nervous breakdown in the past.

"The rationale used is that he didn't consider it a 'history, ' but rather a single episode. This reasoning is incorrect. Any treatment or problem within the context of these questions must be listed with an explanation."