Free-Lance Efforts on Hostages Scored : U.S. Probing Unauthorized Attempts to Free 9 Americans Held in Lebanon

WASHINGTON —  In the past six months, at least a dozen “free-lancers” have initiated unauthorized mediation efforts to free nine American hostages held by Islamic extremists in Lebanon that may have endangered or delayed their release, U.S. officials say.

The unsanctioned efforts, which involved retired American military and intelligence officials as well as apparent con artists, sent confusing signals to the Iranians and the hostages’ captors and may have compounded the damage to release efforts done during the 1985-86 arms-for-hostages swap, according to Reagan Administration sources.

The FBI is investigating several Americans and foreigners for possible criminal violations, including fraud and extortion, these sources said.

Confusing Signals

“Certainly they’ve confused people on the other side, whether in Tehran or Beirut, and they’ve strengthened those who would argue that they should deal privately and continue to hold out until the day they can get some hard cash,” a State Department official said.

Reagan Administration officials say they believe they have begun to get a handle on the unsanctioned attempts, although one conceded: “There may be others out there that we have not stumbled across yet.”

The free-lance efforts have intensified as Iran has sent signals in recent months that, in part because of the impending end to its eight-year war with Iraq, it was receptive to improving relations with Western nations that could help in reconstruction.

As a result, there have been indications of Iran’s willingness to use its influence with pro-Iranian groups in Lebanon holding hostages from Western countries. Two days before the recent release in Beirut of Mithileshwar Singh, an Indian national with permanent U.S. residence status, Iran passed word about the impending development to West German officials, sources said.

However, Secretary of State George P. Shultz has asserted that the United States will deal only with authorized representatives of the Iranian government on the hostages issue and will not provide financial or other concessions for the release.

In this atmosphere, the independent agents “seem to be accelerating as they sniff the possibilities,” said one State Department official. “In a way, it’s a direct confirmation that the time may be right for a major move on the hostages, and it’s drawn these worms out of the woodwork. For precisely that reason, unauthorized talks are even more dangerous now.”

Well-Intentioned Efforts

Although a few of the private efforts have been well-intentioned, “usually money is involved,” said one Justice Department specialist. Many of the hostage releases that have been arranged since the arms-for-hostage swap have involved substantial payments to the Lebanese captors, drawing outsiders who want a cut of the profits.

In May, three French hostages were released by Lebanese groups after up to $3 million was paid for each, either by the government or private sources, according to French press reports.

U.S. officials declined to provide details of the free-lance hostage release efforts they have discovered. They also concede they have little control over any of the agents, particularly those who are not Americans.

However, indirect messages have been relayed to some of those involved who at one time worked as consultants or full-time employees of the U.S. military or intelligence services. Sources said the FBI is gathering evidence in the hope that some fraud cases can be prosecuted.

‘Butt Out,’ Shultz Says

In an angry public statement after Singh was released, Shultz demanded that all independent agents “butt out.”

Earlier this month, exiled former Iranian President Abolhassan Bani-Sadr named a former American intelligence official, Richard Lawless, as among those involved in an independent effort to arrange hostage releases through free-lance negotiations. Lawless, president of an international trade organization, denied the report. U.S. officials say they are looking into the matter.

But U.S. government sources said they have determined that Lawless played a role in a private effort last year to negotiate the release of South Korean diplomat Do Chae Sung, who had been abducted off the streets of Beirut in early 1986.

Payment Reported

The diplomat was released in October, 1987, reportedly after more than a $1-million payment was made. Associates of Lawless, who has been identified in published reports as a former CIA official once stationed in South Korea, said he has no comment on the report.

In the past, secret dealings and scams have occurred in connection with many of the hostages from the 21 nations whose citizens have been abducted in Lebanon since 1984. Some of the middlemen promising influence have claimed to be former government officials, but that claim is usually spurious.

Sources said one of the most clever schemes was directed at the American Catholic Relief Services (CRS), which employed Father Lawrence M. Jenco, who was abducted in Beirut in January, 1985, and Britain’s Anglican Church, for whom hostage negotiator Terry Waite worked before his 1987 abduction.

Two British businessmen approached CRS in early 1986 claiming to have Lebanese connections who had contacts with the captors. Tidbits of information about the hostages and their captors were held out as temptations, while large sums of money were demanded to prove good faith or to solve unexpected “glitches,” according to Brian Jenkins, a terrorism specialist at the RAND Corp. who advised CRS officials.

Catholic Relief Services transferred $100,000 to one of its accounts in London in a preliminary step, but made no payment after Jenkins investigated and determined that the two businessmen were phonies, he said. Jenco was the second of three Americans released in the arms-for-hostages swap in 1986.

$20,000 Paid for Waite

More than a year later, the same group made a similar approach to the Archbishop of Canterbury’s office in connection with Waite. Jenkins said he learned of the proposal and warned the church officials, but it was too late. The church had already turned over $20,000. Waite is still in captivity.

Hostage families also have been targets of sting operations.

Peggy Say, sister of Associated Press correspondent Terry A. Anderson, said she has received half a dozen overtures since her brother was abducted in 1985. Each promised to obtain Anderson’s freedom in exchange for large sums of money.

In the most bizarre case, she recalled, a woman called her from Beirut. “We have your brother,” the voice said. “He’s fine. We’ll be in touch.” Over the next two weeks, a series of calls outlined how Say was to fly to Athens and drop off $50,000, then fly on to Damascus, Syria, to pick up her brother.

In one call, Say said, the captors briefly put a man they claimed to be Anderson on the phone. She said she was certain it was a scam when she was also instructed to drop off an assortment of blue jeans and some break-dance records with the funds.

While most of the approaches were easily identifiable as fraud, Say admitted, “I was hesitant to close the door for fear they might do something to the hostages.”