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U.S. Traded Arms for Hostages

Tower Commission Can't Find How Profits Were Diverted

WASHINGTON--The Tower commission will report that the United States sold arms to Iran to win the release of American hostages, despite contrary statements by President Reagan, but the panel could not determine how profits from the deal were diverted to Nicaraguan rebels, a source said yesterday.

Concluding a three-month investigation, the three-member board headed by former Sen. John Tower (R-Tex.), will deliver its findings to the president at 10 a.m. EST today and discuss its report at a news conference an hour later.

On the eve of the report's release, White House spokesman Marlin Fitzwater said Reagan had sent the board a letter last Friday, as it was completing its work, because "he simply felt there were other recollections and clarifications he wanted to provide the board."

In two meetings with the board, Reagan made conflicting statements about when he authorized the first shipment of U.S. weapons to Iran, according to published reports. Current and former White House aides have disputed each other on when Reagan approved the transaction.

An administration source said Reagan's letter offered yet a third version--that he simply had no recollection of when he approved the shipment and that he may have allowed himself to be influenced by the recollection of others.

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Meanwhile, a source at the Tower commission said the panel concluded that an arms-for-hostages swap was at the center of U.S. contacts with Iran.

While the idea of trying to establish ties with a strategically important nation "may have been in the president's thoughts," the source said, "we didn't accept the notion of it being the driving force. That does not appear in fact to be what drove the program."

Neither of the sources would comment except on condition they not be named.

Reagan has insisted that a trade was not involved. "Let me say it was not my intent to do business with [Iran revolutionary leader Ayatollah Ruhollah] Khomeini to trade weapons for hostages, nor to undercut our policy of antiterrorism," the president said in a radio address Dec. 6.

Underscoring that argument, Fitzwater said, "The primary purpose was to try to make contacts with certain elements in Iran that would be favorable or friendly to the United States in a post-Khomeini government...not arms for hostages."

The Tower board, which interviewed nearly 60 witnesses-- including arms dealers Adnan Khashoggi and

Manucher Ghorbanifar--was not able to determine

how profits from the arms sales were diverted to

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