WASHINGTON — Robert C. McFarlane revealed to the Iran- contra panel today that President Reagan had a far greater role than previously known in efforts to keep the Nicaraguan rebels' "body and soul together" during a congressional ban on U.S. aid.
The former national security adviser said the President knew Saudi Arabia had chipped in millions of dollars for the contra supply effort in 1984 and 1985, and Reagan later interceded with a third country--said by a panel source to be Honduras--that had seized a shipment of military supplies for the contras purchased with the Saudi money.
McFarlane said he gave explicit directions to his staff that the contra operation be conducted within the bounds of law, but recounted how he told aide Lt. Col. Oliver L. North that some of North's plans might be illegal.
White House View
In long-awaited testimony during the second week of hearings by the House and Senate committees investigating the scandal, McFarlane is expected to give the White House view of the efforts to keep the contras supplied and the secret sale of arms to Iran.
The panel's first witness, retired Air Force Maj. Gen. Richard V. Secord, described for four days his role in the initiatives, providing a never-before-seen glimpse of the world's arms bazaar and secret Swiss accounts.
McFarlane opened his testimony with a lengthy history of U.S. involvement with the contras, Administration frustration when lawmakers closed the official purse strings and White House endeavors to provide moral--and later financial--support for the contras.
Frequently gulping water from a glass on his left and occasionally consulting with attorney Leonard Garment on his right, McFarlane responded in a quiet monotone to queries by chief Senate counsel Arthur Liman.
The 1959 graduate of the U.S. Naval Academy and retired Marine colonel is a central figure in the U.S. arms sales to the radical Islamic government of Iran and the diversion of profits from those sales to the contras, a CIA-formed force fighting to overthrow Nicaragua's leftist Sandinista government.
In his opening statement, McFarlane said:
"The President repeatedly made clear in public and in private that he did not intend to break faith with the contras. He directed that we make continued efforts to bring the movement into the good graces of Congress and the American people and that we assure the contras of continuing Administration support--to help them hold body and soul together--until the time when Congress would again agree to support them."
Reagan made that charge to his Administration when Congress passed the Boland Amendment, which from October, 1984, to October, 1986, prohibited the State Department, the Pentagon and the CIA from providing direct or indirect military support to the rebels.
As a result, the National Security Council under McFarlane and, his successor, John M. Poindexter, became "the agency of last resort" to carry out the President's wishes, McFarlane said.