From ............................. NEWSWEEK

June 15, 1987

page 27-28

"A symbol of opposition to Sandinista rule: Cardinal Obando y Bravo"

The contras call him nuestro cardenal, "our" cardinal.

President Reagan has quoted him to discredit the Sandinistas and rally Congress to vote aid to the rebels. Within Nicaragua, he has drawn tens of thousands of supporters into the streets, shouting, "Christianity, yes, communism, no. " Cardinal Miguel Obando y Bravo, archbishop of Managua, is a leading symbol of internal opposition to Sandinista rule.

A dogged, canny figure who insists he is above politics, [ha ha ha ha..... jp] Obando has come to represent a deep current of protest in a country that brooks little open dissent.

Because Obando is seen as a bulwark against the Sandinistas, he and the Roman Catholic Church in Nicaragua have received support from around the world. NEWSWEEK has learned that his church also may have received hundreds of thousands of dollars in covert aid from the United States - from the CIA until 1985, and then, after official government aid was stopped by congressional oversight committees, from Oliver North's rogue operation in the White House basement.

There is no evidence that the cardinal knew the source of the funding. In an interview last week with NEWSWEEK'S Joseph Contreras in Managua, he flatly denied getting aid from the CIA, North or Richard Miller, a North associate who is said to have acted as a conduit for the money.

Obando said the suggestion that he had received aid from the CIA was "a tremendous slander" and "a falsehood." He added vehemently, "I have not received donations from Mr. Richard Miller."

Sources in the U.S. intelligence community and the Nicaraguan opposition provide a picture of how the CIA operation may have worked. The CIA, sources say, used a maze of independent "cutouts" to shield both itself and the Nicaraguan recipients from knowledge of each other's identity - so-called double deniability.

Former contra leader Edgar Chamorro suggests that some of the agency money was channeled through the contras themselves. "The CIA was working through all these [contra] directors," Chamorro says, "using them to buy everybody." The money is said to have made its way into Nicaragua in a variety of ways: wired into archdiocese accounts, carried in by contra couriers and passed directly to church lay workers traveling outside the country.

The General Accounting Office, which was investigating the use of U.S. humanitarian aid to the contras, unexpectedly found a signature card with Obando's name on it apparently linking the churchman to an account at BAC International, a Cayman Islands bank used by the agency and the contras. NEWSWEEK'S sources could not say whether the signature had been verified as that of Obando.

In 1985 congressional committees moved to stop the CIA aid out of concern that the church would be compromised if the covert operation was exposed. At that point, sources say, North and his White House crew got involved, circumventing the oversight panels.

One American with ties to the operation recalls that North himself expressed interest in helping Obando some time in 1985 - although in later months Richard Miller, a key financial player in North's private aid network, seems to have handled the transactions. (In a separate matter involving covert military aid to the contras, Miller has since pleaded guilty to charges that he and North conspired to defraud the U.S. Treasury.)

When asked if he helped channel aid to the church, Miller said last week: "I'm not in a position to discuss any of the substance." Sources say payments eventually went out through one of the many shell corporations that North and his colleagues set up to fund their various operations. North's cutouts, the sources say, funneled at least $125,000 to the church through the Cayman account and banks in New York and Miami. Some of the money was reportedly used to fund seminarian training and a November "Eucharistic Congress" that helped draw attention to the church's conflict with the Sandinistas.

Other payments, a source says, went to Frederico Arguello, a conservative priest close to Obando. Arguello confirmed to NEWSWEEK that he had received $31,000, but refused to say who arranged the payments. The money, he says, was deposited in a New York bank and then sent to Nicaragua "to help the church and the poor."

Outside money: Like the contra rebels based outside Nicaragua, the church and other opposition to the Marxist government make little secret of their need for foreign support. As one of Obando's top aides, Msgr. Bismarck Carballo, now living in exile, puts it: "In Nicaragua, everyone receives money from outside." Obando's archdiocese openly took assistance from the U.S. Agency for International Development in 1982, and when that was blocked he sought help from U.S. Catholics and business executives.

Referring to the secret U.S. aid, one source in the intelligence community says, "Maybe [Obando] thought it was just another rich North American or West German." A clue to what the money may have been used for can be gleaned from an internal memo circulated in May 1984 at W.R. Grace & Co., which reportedly helped arrange for a foundation contribution to the church for Bibles and religious articles. Obando, the memo says, was soliciting private aid for "leadership" courses and "religious instruction" to "thwart the Marxist-Leninist policies of the Sandinistas."

What, if anything, is wrong with this sort of effort to support the democratic opposition? The problem in Nicaragua is that such aid, if it becomes public, plays into the Sandinistas' hands. It allows them to call church leaders "U.S. Iackeys," undermining their credibility with all but the most conservative of Nicaraguans. It also provides yet another excuse to crack down on the whole spectrum of democratic opposition. In the end, the risk of such an operation is that it will likely hurt the very people Washington is trying to help.

ROBERT PARRY and TAMAR JACOBY

A maze of shell corporaffons and clandestine links: Flow chart found in North's safe - [in sidebox]

-END QUOTE-

While the above is taking place, Roman Catholic KNIGHT OF MALTA

William Casey is the head of the American CIA

and another Roman Catholic is Secretary of State.

Head of W.R. Grace & Co. [mentioned above] is Peter Grace,

who was head of the American branch of the KNIGHTS OF MALTA.

Bear in mind that Roman Catholic [mostly Jesuit] priests CREATED

and held leadership positions within the "Sandinista" government.

"The CIA has covertly funded key Sandinista opponents for years, including at times 'La Prensa' and the Roman Catholic Church, say intelligence sources." [NEWSWEEK July 25, 1988]

"Report says clergy in Managua tapped North's war chest" "Some funds from Lieutenant Colonel Oliver North's secret bank account made their way to the Catholic church in Nicaragua, according to press reports and recent congressional testimony." [Jim McManus, Washington Bureau Chief, National Catholic Reporter ]