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End of lengthy Iran-contra case eludes special prosecutor Lawrence Walsh


WASHINGTON -- Lawrence E. Walsh, a 79-year-old with a shy public manner but a bulldog's tenacity in private, is still going strong as he approaches the fifth anniversary on the job in what may be the most expensive criminal investigation in U.S. history.

He is the man in charge of prosecuting the criminal side of the Iran-contra scandal -- a task that he personally never thought would take this long, a task that he insists is close to being done -- but not quite.

It will be Mr. Walsh alone who decides when the end has been reached. There are two reasons for that. One is legal: he is an independent prosecutor, formally named by a federal court, and thus is his own boss.

Unlike a regular prosecutor in the government, he does not have to clear his plans or strategies with the attorney general or with the White House. In fact, he is not supposed to do that. His independence is the very idea behind his appointment in December 1986 to take on the task of getting to the bottom of any crimes committed in the scandal that nearly brought down the presidency of Ronald Reagan.

The other reason is political: Attorney General Richard L. Thornburgh is not considered likely to yield to demands now coming to him from Republicans in Congress that he ask the court to shut down Mr. Walsh's operations involuntarily.

Already, Mr. Thornburgh has taken what he and his associates considered to be significant political risks by issuing orders to protect government secrets that might have come out in the Iran-contra cases -- with the result that the most significant and serious criminal charges against key figures in the scandal were dismissed, and an entire case against a former Central Intelligence Agency operative was scuttled.

The scandal involved a secret plot to get U.S. hostages out of Iran by illegal arms sales, and a linked secret plot to transfer some of the proceeds of those arms sales to buy weapons for the "contra" rebels then fighting against the Communist government of Nicaragua.

Mr. Walsh has thought, several times, that the "end" of his criminal probe was in sight, he tells his private associates and contacts. He also says, in private and publicly, that he regrets the cost: nearly $26 million at the latest accounting, and still rising by several hundred thousand dollars every month (in addition to more than $9 million said to have been spent by other federal agencies in helping help Mr. Walsh and his staff). There is no congressionally-imposed budget ceiling on what he can spend.

Each time Mr. Walsh has thought he might be about finished, the "end" he anticipated has eluded him.

Earlier this year, he picked June 20 as the likely date to wind up. He has been working here four and a half days a week (at a daily fee of $415.14, reportedly well under what he would be paid if he were working on law business back at his Oklahoma City law firm) to get his "final" report done by that personally-set "deadline." That close-up-shop date, too, is now likely to come and go. In fact, about a week before that date, on June 14, lawyers speaking for Mr. Walsh will be standing in a federal courtroom here, laying out new plans on the next stage in the ongoing probe that some House Republicans last week condemned as a "perpetual investigation."

That next phase was ordered by a U.S. Circuit Court of Appeals, in the case of former White House aide Oliver L. North -- convicted of three crimes in the "main event" case prosecuted by Mr. Walsh and his staff. The Supreme Court refused last Tuesday to block that new proceeding.

In response to the congressional demands that the special prosecutor be shut down involuntarily, Mr. Walsh said in a public statement that his office was "completing its work as quickly as possible." He said his "ongoing investigation" (which may yet lead to new criminal charges) "is nearly finished."

Appeals or post-appeal proceedings are still going on in three cases -- including the North case, and that of his White House boss, former national security adviser John M. Poindexter. (The third still-pending case is an appeal by former CIA official Thomas Clines, convicted at a Baltimore trial of tax evasion.)

Besides convictions in those three cases that went to trial, Mr. Walsh has obtained guilty pleas from five other individuals for their roles in the scandal -- including another former North boss, another White House national security adviser, Robert C. McFarlane.

Mr. Walsh, in speeches and in private conversations, has offered a number of reasons for the length and cost of his massive probe:

* A federal judge ordered that Mr. Walsh's biggest case -- against four of the key figures in on the scandal -- be broken up and dealt with separately, adding time and expense.

* A running fight, often frustrating Mr. Walsh and defense lawyers for those he was prosecuting, with the government's intelligence agencies over access to secret materials for use as evidence in open court.

* The probe reached out to a dozen foreign countries, and an expensive and time-consuming lawsuit had to be pressed to get secret bank records out of Switzerland.

* The decision by Congress to grant legal immunity to North and Poindexter in order to force them to testify at 1987 televised congressional hearings probing the scandal -- immunity promises that Mr. Walsh tried to head off, promises that he said recently have "haunted and harassed the prosecution from the very date of indictment."

In fact, the immunity issue is at the center of the new and probably prolonged round of hearings about to get started in the North case, now

back in U.S. District Court after Mr. Walsh's unsuccessful trip to the Supreme Court.

In a speech in New York City last month, the special prosecutor remarked: "The most damaging single factor hampering the prosecution of Iran-contra activity was the devastating grant of immunity by Congress to North and Poindexter."

For all of the difficulty, though, Mr. Walsh has suggested repeatedly that he sees no alternative to using special prosecutors like himself to deal with the kind of scandal that marked the Iran-contra episode: secret and, he believes, pervasively illegal maneuvering, on a global scale, by individuals working directly and intimately with the president of the United States, and claiming to be acting on presidential orders.

The special prosecutor provision is due to expire in 1992, and Mr. Walsh said in his New York speech: "It is not too early to begin to consider whether there are better alternatives -- and if not, to support its renewal."

Lawyers who have defended the targets of Mr. Walsh's long-running, costly probe, however, have complained often that the problem with this particular probe is Mr. Walsh, not the special prosecutor law.

North's chief lawyer, Brendan V. Sullivan, Jr., for example, issued a statement last week to lambaste Mr. Walsh's decision to keep the North case going.

"To proceed further," Mr. Sullivan said, "is an abuse of discretion. But he [Mr. Walsh] has no discretion. . . . We are greatly disheartened by the thought that Colonel North faces continued litigation in circumstances where any reasonable prosecutor would determine that enough is enough." North himself, in a radio interview last week, was more aggressively critical of Mr. Walsh. North said of the prosecutor: "I think he's a vindictive wretch who has nothing on his mind other than trying to ruin my family and me."

Retorted a close associate of Mr. Walsh who asked not to be identified: "Nobody would like to end it more than he [the prosecutor] would. He would like to go back to Oklahoma."

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