North Set His Defense for Criminal Charges : Spotlight Is on Hearings but He and His Lawyer Are Termed More Interested in Walsh’s Inquiry

WASHINGTON —  Oliver L. North’s boffo performance before congressional Iran- contra investigating panels last week, legal experts say, overshadowed a more important mission for the telegenic Marine: laying out a defense against criminal charges he may face later this year.

Those charges, which observers say could vary from conspiracy to obstruction of justice to grand theft, are presumed to be under active investigation by independent counsel Lawrence E. Walsh and a federal grand jury probing the scandal. Legally speaking, North’s public relations coup of recent days pales in importance next to them.

An Off-the-Books War

“The public may be paying attention to the hearings,” one top Washington defense lawyer said Friday. But North and his attorney, Brendan V. Sullivan Jr., “are a lot more interested in what’s happening with Walsh than with this thing.”

Facing clear evidence of potential wrongdoing--lying to Congress, shredding documents, running an off-the-books war--North and his lawyer last week conceded what could not be denied and focused instead on shifting the responsibility elsewhere.

Opinion is divided on the merits of the tactic.

“Everything he did, he did on orders,” said Arthur L. Liman, majority counsel for the Senate’s Iran-contra panel and North’s chief inquisitor last week. “It’s the Nuremberg defense.”

“Let’s face it,” said another congressional expert on criminal law, who asked not to be named. “He didn’t try to hide a lot of pretty devastating things. He comes across as a guy who’s pretty straight. It’s not going to be a simple lay-down prosecution. Even the shredding of documents, which should be airtight, isn’t that clear now.”

The issue of document shredding, perhaps the most ominous legal threat facing North, also shows clearly and ingeniously his defense strategy.

In testimony last week, North admitted that he shredded sheafs of papers between Nov. 21, when Atty. Gen. Edwin Meese III began his informal inquiry, and Nov. 25, when the diversion of Iran arms sales profits to the contras was disclosed and the FBI was called in.

Legal observers say such an admission could bolster a criminal charge that North attempted to obstruct the law by deliberately destroying evidence of wrongdoing so that Justice Department investigators would not see it.

But in his testimony, North also contended that he had routinely shredded secret papers on the contra program since early October when a plane that was part of North’s contra supply network was shot down over Nicaragua, exposing the clandestine operation and jeopardizing lives.

Shredding Documents

Meese was in his office that November as a “friend” of the President, not a prosecutor looking for criminal acts, North said. And North even continued destroying crucial documents, he said, as Meese’s investigators sat at his conference table poring over Iran arms sale memos.

“They were working on their project. I was working on mine,” he said.

Justice Department officials later denied that North shredded papers in their presence. But a veteran Justice Department prosecutor later said that North’s “spontaneous” testimony carefully covered all the angles of a potential obstruction of justice charge, making it appear that he did not know he was under criminal suspicion, that he was routinely destroying documents, and that he did not try to hide that fact from Justice officials.

In any case, he later added, he was only acting on the orders of his boss, National Security Adviser John M. Poindexter, and CIA Director William J. Casey, who had ordered him to “clean up” his files.

“Everyone is marveling at the P.R. aspect” of North’s testimony, the Justice official said, “but from a criminal defense standpoint it was beautiful, beautiful.”

The assertion that North was acting on orders from above is central to his defense, and North employed it repeatedly and emphatically last week.

“I’m not trying to pass the buck,” North told House majority committee counsel John W. Nields Jr. on Tuesday, adding in the very next breath: “I don’t want you to think, counsel, that I went about this on my own.”

North agreed that he lied to Congress about his backing of the contras, the linchpin of a possible charge of conspiracy to violate a ban on U.S.-financed military aid to the rebels.

Denied Violating Ban

But he also claimed that his efforts did not violate that ban. And, even if they did, he was merely carrying out a covert operation ordered by two superiors--Poindexter and his predecessor, Robert C. McFarlane--and a Cabinet officer, Casey.

To seemingly damning allegations that he cashed traveler’s checks intended to finance his secret activities and spent them to buy snow tires, groceries and leotards, North had a ready response: He was reimbursing himself for out-of-pocket government expenses and had kept meticulous records to prove it.

Unfortunately, he added, the records were shredded in November on orders from Casey, who died of brain cancer last May.

Compelling Testimony

Such explanations might be less believable if uttered by someone other than North. His compelling testimony last week probably helped his defense, if only because it abruptly reversed a growing public perception that he was not to be trusted.

“If they were to try this guy in Alabama, they’d be dead,” one lawyer said.

However, his appearance has disadvantages. North’s explanations are now a part of the public record well before any indictment and trial, something that could work against him, should he be backed into a legal corner later on.

“He’s stuck with what he’s said now,” one lawyer said. “He can’t baldly contradict his testimony--even though they can’t use it against him, because he gave it under a grant of immunity--because everyone will know what he said.”

North’s early testimony also limits his bargaining power, should his lawyer later offer his cooperation in exchange for a reduced prison sentence or the dropping of charges. Having already told “the good, the bad and the ugly,” North has little leverage with which to negotiate a plea.

‘Isn’t Out of the Woods’

And even if North’s testimony is viewed in the most favorable light, a criminal lawyer close to the Iran-contra investigation concluded Friday, North “isn’t out of the woods” in a number of areas.

A principal concern, the lawyer said, is North’s admission that he allowed associate Richard V. Secord to spend about $16,000 in Iran arms sales profits on a private security system for North’s suburban Washington home and then tried to cover up the gift with a series of fake letters.

North’s abject apology and his contention that he faced a threat from terrorist Abu Nidal may tug a jury’s heartstrings, the lawyer said, but they do not rewrite the law barring federal officials from accepting benefits as a result of their government service.

Surge of Publicity

Once the initial surge of adoring publicity for North fades, he added, the former White House aide’s explanations that he shredded documents and expense ledgers on bosses’ orders could also ring less true to a jury.

Nevertheless, one lawyer with experience in political scandals cautioned that the skills of North and his legal team should not be underrated.

“He says he’s got the authority of his superiors,” said Richard Ben-Veniste, member of the team that prosecuted Nixon Administration officials for crimes committed in the last major scandal, Watergate.

“You can call it the Nuremberg defense if it doesn’t work. Otherwise, it’s the truth.”

Staff writers Ronald J. Ostrow and Karen Tumulty contributed to this story.