Co-mingling of Funds

In another development, CIA spokesman GeorgeLauder denied a published report that the CIAcomingled profits from the Iran sales in the sameaccount with funds for covert support for rebelsfighting the Soviet-backed government ofAfghanistan.

"The only funds related to the Iran programthat passed through agency hands were the $12million owed to the Pentagon for the arms," Laudersaid. "The funds received from the Iranians weresegregated and passed on to the Pentagon properlyafter receipt."

Lauder added that "CIA received no profits fromany transaction with the Iranians, nor were anyfunds that passed through agency hands diverted tothe Contras or any other covert action program."

But another government source confirmed thestory, which first appeared in the WashingtonPost, and said the co-mingling of funds "will bethe subject of the investigation" of theindependent counsel appointed to probe the armssale. This source declined to be named publicly.

Congressional sources, speaking privately, saidthe provision of funds to the Afghan rebels was acovert operation carried out by the CIA afterauthorization by Congress. The diversion of fundsto the Contra forces occurred at a time whenCongress had banned aid to the Contra forces.

Meanwhile, Transportation Department documentsshow that a former CIA air transport company, saidto have played key roles in both arms sales toIrans and shipments to the Nicaraguan rebels, flewmore than 400 tons of cargo this year into an airbase used by an American-manned Contra resupplyoperation.

Southern Air Transport of Miami reported itmade 15 flights into a military airport in ElSalvador. The flights coincide with creation of anair resupply wing to carry weapons to the Contrarebels--an effort that government sources saidanonymously was managed by North.

Also yesterday, a member of the SenateIntelligence Committee said today congressionalprobes into the Iranian-Contra scandal are headednowhere and called on President Reagan to end his"charade" and admit he knew what was going on.

"While President Reagan might not know anythingabout the Education Department, about the EnergyDepartment, he knows about Contras," Sen. ErnestHollings, D-S.C., said on NBC-TV's "Today" show."He likes that policy and he was kept informed onthat particular policy. I'm positive of that.