Despite congressional restrictions, the Reagan administration has continued secretly to assist anti-Sandinista rebels in finding weapons and plotting military strategy through a network of private operatives overseen by the National Security Council (NSC) and the CIA, administration and rebel officials say.
The system has been overseen by Marine Lt. Col. Oliver North, a senior staff member at the NSC, who has operated with advice from CIA officers attached to the Central American division of the agency's clandestine branch, the officials said.
The NSC and CIA involvement in contra activities comes in spite of an Oct. 10, 1984, law that forbids U.S officials from direct involvement in planning or executing military operations inside Nicaragua. The prohibition was relaxed -- but not lifted -- last summer when Congress authorized $27 million in so-called humanitarian aid to the rebels.
The officials said the system's main private agents include retired Maj. Gen. John Singlaub, the former commander of U.S. forces in South Korea, and Robert Owen, a 32-year-old Stanford graduate who until May 28 worked as a paid consultant for the State Department's Nicaraguan Humanitarian Assistance Office (NHAO).
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PRIVATE CHANNELS USED
While any official military assistance to the contras would violate the law, the sources -- two administration officials and a knowledgeable rebel leader -- said the administration feels it has honored the restrictions by channeling its involvement through private citizens.
But the arrangement still is expected to be a central focus of congressional investigators looking into the contra movement. The investigation is expected to begin after the vote later this month on President Reagan's request for an additional $100 million in aid to the rebels.
North declined comment, but an administration official said North "has not been involved in illegal activities." CIA spokeswoman Kathy Pherson said the agency has "adhered" to congressional requirements.
The contra rebels were organized by the CIA and Argentine military officers in 1981 and began fighting the Sandinista government in Nicaragua in 1982 with CIA guidance and supplies.
In 1984, Congress banned CIA assistance for military actions inside Nicaragua after the CIA directed the mining of Nicaraguan harbors.
Under the ban, the CIA was allowed to receive intelligence from the contras but was barred from advising them.
CAN SHARE INTELLIGENCE
After Congress approved $27 million in U.S. aid to the contras last year, the CIA was allowed to share intelligence on Sandinista troop movements, but U.S. government officials were still prohibited from helping the contras plan strategy or procure weapons.
According to administration officials, North was first told to organize a network of private supporters for the contras in 1984, when it became apparent Congress was about to end CIA involvement in the rebel movement. It's not clear who in the administration told North to form the network.
Conservative activists were contacted and raised almost $30 million.
After Congress' ban prohibited North from dealing directly with the contras, private individuals were used as bridges between the administration and the rebels, officials said.
Singlaub, officials said, became the de facto military adviser to the contras while Owen served as a secret conduit for messages, advice and funds.
Both reported to and consulted with North frequently by phone and at North's office in the Old Executive Office Building next to the White House, the officials said.
"That's how the system worked, " said one official who monitors contra activities. "Owen was the messenger boy and Gen. Singlaub the military commander, chief fund-raiser and arms adviser and broker."
Owen refused to be interviewed.
Singlaub, in an interview earlier this year, acknowledged being in contact with North but denied receiving instructions from him. Singlaub also acknowledged having raised funds for the contras to buy weapons, but said transactions were made outside the United States to avoid violating the 188-year-old Neutrality Act.
Singlaub said he also advised the contras on types of weapons they needed.
A knowledgeable contra official said Owen was North's "gofer" and kept in touch with rebel leaders in Honduras and Costa Rica.
An administration official intimately familiar with contra affairs said he had been instructed by the NSC to refer to Owen anyone offering supplies or funds to the contras during the time of the prohibition.
The contra official said Owen also had been assigned the role of organizing a southern front that would be supplied from Costa Rica. But the contra said the project never prospered because of "bad organization."
Rebel officials said that since last summer the CIA has gradually widened its involvement by paying for the travel and living expenses of contra leaders and financing their propaganda projects. The increased CIA role, the rebels said, has displaced the NSC, diluting the council's influence.
Administration officials said that since last year, the CIA has secretly funneled between $1.5 million and $3 million to the contras' umbrella group, United Nicaraguan Opposition (UNO), to pay rebel officials and supporters, and to open offices in Western Europe and Latin America.
A rebel official said CIA officers also have intervened in internal contra political disputes in a bid to bring about unity in the fractious anti-Sandinista movement.
The rebel said the CIA played a key role in persuading Eden Pastora's six senior commanders to desert their leader in May after he refused to ally himself with UNO. Pastora later gave up his fight and sought political asylum in Costa Rica.
Rebel officials said the CIA's main goal now is to consolidate a totally unified contra alliance and prepare it for a major offensive against the Sandinista government if and when Congress approves Reagan's $100 million proposal for military and logistical aid.
If Congress approves the package as the administration has proposed, all restrictions on CIA involvement will end and the agency again will be able plot the contras' military moves.