REPORT OF THE PRESIDENT'S SPECIAL REVIEW BOARD

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89G00643R001300120001-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 289
• Document Creation Date: December 23, 2016
• Document Release Date: February 27, 2012
• Sequence Number: 1
• Publication Date: February 26, 1987
• Content Type: REPORT

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PRESIDENT'S SPECIAL REVIEW BOARD
New Executive Office Building - Room 5221
Washington, D.C. 20506
202-456-2566
JOHN TOWER
Chairman
EDMUND MUSKIE
BRENT SCOWCROFT
RHETT DAWSON
Director
W. CLARK MCFADDEN II
General Counsel
The Honorable Ronald W. Reagan
The President of the United States
Washington, D.C. 20500
Dear Mr. President:
We respectfully submit to you the Report of the Special
Review Board. This Report is the product of our study of the
National Security Council, its operation and its staff.
For the last three months, we have reviewed the evolution of
the NSC system since its creation forty years ago. We had
extensive discussions with almost every current and former senior
official involved in national security affairs. Case studies
from several Administrations were also conducted to inform our
judgments.
At your direction, we also focused on the Iran/Contra matter
and sought to follow your injunction that "all the facts come
out." We attempted to do this as fairly as we knew how so that
lessons for the future could be learned.
The Report is based in large part on information and
documentation provided to us by U.S. departments and agencies and
interviews of current and former officials. We relied upon
others in the Executive Branch to conduct the search for
materials or information we requested. In general, we received a
positive response to our inquiries from every agency, including
the White House, although the Independent Counsel and the Federal
Bureau of Investigation responded negatively to our request for
material. We found that the individuals from agencies that
appeared before us generally did so in a forthcoming manner.
The portions of this Report that recite facts were reviewed
by appropriate agency representatives in order to identify
classified material. This was done to enable you to make the
Report public. These representatives performed this security
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review without regard for domestic political consequences. No
material was deleted on the grounds that it might prove
embarrassing to your Administration. There was, however, some
information that we concluded had to remain in the classified
domain. The appropriate Congressional committees may find this
information of use.
While the publication of the material in this Report may be
troublesome to some in the short term, we believe that, over
time, the nation will clearly benefit by your decision to
commission this review. We commend this Report to you and to
future Presidents in the hope that it will enhance the
effectiveness of the National Security Council.
We are honored to have had the opportunity to serve on this
Board.
Sincerely,
Edmund S. Muskie
John Tower
J
Brent Scowcroft
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Table of Contents
Part I Introduction ........................................................................................................ I-1
Part 11 Organizing for National Security ....................................................................... II-1
A. The National Security Council ................................................................... II-1
B. The Assistant to the President for National Security Affairs .................... 11-2
C. The NSC Staff ............................................................................................ 11-3
D. The Interagency Committee System ......................................................... 11-4
E. The Reagan Model ..................................................................................... 11-5
F. The Problem of Covert Operations ........................................................... 11-5
Part III Arms Transfers to Iran, Diversion, and Support for the Contras .................... III-1
Section A: The Arms Transfers to Iran ......................................................... 111-2
Stage 1: The NSC Staff Seeks a New Look at U.S. Policy on Iran ............ 111-2
Stage 2: The NSC Staff Tries a Second Time ............................................ 111-3
Stage 3: The Israelis Provide a Vehicle ...................................................... 111-4
Stage 4: The Initiative Appears to Founder ............................................... 111-8
Stage 5: The United States Sells Directly to Iran ....................................... 111-10
Stage 6: The NSC Staff Manages the Operation ........................................ 111-13
Stage 7: The Second Channel Is Opened But the Initiative Leaks ........... 111-17
Section B: Contra Diversion ........................................................................... 111-19
Section C: The NSC Staff and Support for the Contras ............................... 111-21
Part IV What Was Wrong ............................................................................................... IV-1
A. A Flawed Process ....................................................................................... IV-1
B. Failure of Responsibility ............................................................................ IV-10
C. The Role of the Israelis ............................................................................. IV-12
D. Aftermath-The Efforts To Tell the Story ............................................... IV-12
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Part V Recommendations .............................................................................................. V-1
Principal Recommendation ............................................................................ V-4
Specific Recommendations ............................................................................. V4
Appendix A Executive Order 12575 ...................................................................................... A-1
Appendix B The Iran/Contra Affair: A Narrative .................................................................. B-1
1. Background .................................................................................................. B-1
A. Intellectual Threads in the NSC Staff: 1984 .......................................... B-2
B. Further 1984 Threads: Iran, Weapons, and Hostages .......................... B-3
II. NSC Staff Diplomacy and Thinking: January-July 1985 ........................... B-4
A. The NSC Staff in Action ........................................................................ B-4
B. Intellectual Formulations: The NSC and Intelligence Estimates .......... B-6
C. Events Keep the NSC's Ideas Alive: January-June 1985 ....................... B-11
D. NSC Staff Activity: May July 1985 ..................................................:...... B-12
III. The President, His Staff, and the Cabinet: July-August 1985 ................. B-14
A. The Principals' Various Views: August 1985 ......................................... B-19
B. Post Mortem ........................................................................................... B-23
IV. The NSC Staff, Arms, Hostages, and Finances ........................................ B-25
A: The First Shipment of TOW Missiles: August-September 1985........... B-25
B. Financing the Transaction ...................................................................... B-28
V. United States Involvement Takes a New Form: October 1985 January
1986 ......................................................................................................... B-28
A. Prelude to the Israeli Shipment of Hawk Missiles ................................. B-28
B. The Shipment of HAWKs: November 1985 .......................................... B-31
C. North's Plan to Free the Hostages ......................................................... B-34
D. The President and His Advisors ............................................................ B-37
E. The First Draft of a "Finding": November 1985 ................................... B-38
F. December 1985: Bird's Eye View ........................................................... B-40
F. The NSC Staff, the CIA, and Ghorbanifar: December 1985 January
1986 ...................................................................................................... B-52
G. The January 1986 Findings .................................................................... B-57
VI. The United States Sells Iran 1,000 TOW Missiles .................................. B-67
A. Launching "Operation Recovery " B-70
B. Forward ................................................................................................... B-73
VII. Hostages and Iran Pursued: March-May 1986 ....................................... B-79
A. Prologue to a McFarlane-Iranian Meeting, I: March 1986 .................... B-80
B. Prologue to a McFarlane-Iranian Meeting, II: April-May 1986 ............. B-85
C. Excursions: May 1986 ............................................................................. B-95
D. Tehran: May 25-28, 1986 ...................................................................... B-96
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E. Post Mortem ............................................................................................ B-119
VIII. The End of the Beginning: June July 1986 ........................................... B-121
A. Aid to the Nicaraguan Resistance .......................................................... B-121
B. Hostages and Iran, June July 1986: "Stalemate" .................................. B-127
C. Jenco ....................................................................................................... B-138
IX. New Wine in Old Bottles? July-November 1986 ..................................... B-147
A. Sequentialism .......................................................................................... B-147
B. The Second Channel in Washington ..................................................... B-157
C. Frankfurt ................................................................................................. B-160
D. Arms Into Iran, One Hostage Out of Lebanon ..................................... B-167
Charts and Narratives .................................................................................... B-173
Appendix C The NSC Staff and the Contras .......................................................................... C-1
The NSC Staff Steps Into the Void ............................................................... C-2
1. North's Operational Role: September, 1984-October, 1985 ................. C-2
2. Private Funding: January-April, 1985 ..................................................... C-4
Congressional Reactions ................................................................................ C-6
Authorization for "Communications" and "Advice" ................................ C-6
Direct Involvement in Resupply: Fall 1985-Summer 1986 ........................... C-7
Concern for Disclosure ................................................................................... C-10
Summer 1986: Project Democracy ................................................................ C-11
Who Knew What? .......................................................................................... C-14
Appendix D Aftermath-The Efforts To Tell the Story ........................................................ D-1
The NSC Staff Tried To Build the Story ....................................................... D-1
Mr. McFarlane and the NSC Chronologies .................................................... D-3
The White House Position Changed .............................................................. D-11
The President's Address to the Nation .......................................................... D-12
VADM Poindexter Briefed Reporters ............................................................ D-12
The President's News Conference .................................................................. D-13
Appendix E Case Studies Prepared for the Board ................................................................ E-1
Appendix F President's Special Review Board Interviews .................................................... F-1
Appendix G Correspondence Regarding the Appearance of VADM Poindexter and LtCol
North Before the Board .............................................................................. G-1
Appendix H Letter from Attorney General Meese Regarding Requirements of the Hughes-
Ryan Amendment ....................................................................................... H-1
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Introduction
In November, 1986, it was disclosed that the
United States had, in August, 1985, and subse-
quently, participated in secret dealings with
Iran involving the sale of military equipment.
There appeared to be a linkage between these
dealings and efforts to obtain the release of
U.S. citizens held hostage in Lebanon by ter-
rorists believed to be closely associated with
the Iranian regime. After the initial story broke,
the Attorney General announced that proceeds
from the arms transfers may have been divert-
ed to assist U.S.-backed rebel forces in Nicara-
gua, known as Contras. This possibility en-
larged the controversy and added questions not
only of policy and propriety but also violations
of law.
These disclosures became the focus of sub-
stantial public attention. The secret arms trans-
fers appeared to run directly counter to de-
clared U.S. policies. The United States had an-
nounced a policy of neutrality in the six-year
old Iran/Iraq war and had proclaimed an em-
bargo on arms sales to Iran. It had worked ac-
tively to isolate Iran and other regimes known
to give aid and comfort to terrorists. It had de-
clared that it would not pay ransom to hostage-
takers.
Public concern was not limited to. the issues
of policy, however. Questions arose as to the
propriety of certain actions taken by the Na-
tional Security Council staff and the manner in
which the decision to transfer arms to Iran had
been made. Congress was never informed. A
variety of intermediaries, both private and gov-
ernmental, some with motives open to ques-
tion, had central roles. The NSC staff rather
than the CIA seemed to be running the oper-
ation. The President appeared to be unaware
of key elements of the operation. The contro-
versy threatened a crisis of confidence in the
manner in which national security decisions are
made and the role played by the NSC staff.
It was this latter set of concerns that prompt-
ed the President to establish this Special
Review Board on December 1, 1986. The Presi-
dent directed the Board to examine the proper
role of the National Security Council staff in
national security operations, including the arms
transfers to Iran. The President made clear that
he wanted "all the facts to come out."
The Board was not, however, called upon to
assess individual culpability or be the final arbi-
ter of the facts. These tasks have been properly
left to others. Indeed, the short deadline set by
the President for completion of the Board's
work and its limited resources precluded a sep-
arate and thorough field investigation. Instead,
the Board has examined the events surround-
ing the transfer of arms to Iran as a principal
case study in evaluating the operation of the
National Security Council in general and the
role of the NSC staff in particular.
The President gave the Board a broad char-
ter. It was directed to conduct "a comprehen-
sive study of the future role and procedures of
the National Security Council (NSC) staff in the
development, coordination, oversight, and con-
duct of foreign and national security policy."'
It has been forty years since the enactment of
the National Security Act of 1947 and the cre-
ation of the National Security Council. Since
that time the NSC staff has grown in impor-
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tance and the Assistant to the President for Na-
tional Security Affairs has emerged as a key
player in national security decision-making.
This is the first Presidential Commission to
have as its sole responsibility a comprehensive
review of how these institutions have per-
formed. We believe that, quite aside from the
circumstances which brought about the Board's
creation, such a review was overdue.
The Board divided its work into three major
inquiries: the circumstances surrounding the
Iran/Contra matter, other case studies that
might reveal strengths and weaknesses in the
operation of the National Security Council
system under stress, and the manner in which
that system has served eight different Presi-
dents since its inception in 1947.
At Appendix B is a narrative of the informa-
tion obtained from documents and interviews
regarding the arms sales to Iran. The narrative
is necessarily incomplete. As of the date of this
report, some key witnesses had refused to testi-
fy before any forum. Important documents lo-
cated in other countries had yet to be released,
and important witnesses in other countries
were not available. But the appended narrative
tells much of the story. Although more infor-
mation will undoubtedly come to light, the
record thus far developed provides a sufficient
basis for evaluating the process by which these
events came about.
During the Board's work, it received evi-
dence concerning the role of the NSC staff in
support of the Contras during the period that
such support was either barred or restricted by
Congress. The Board had neither the time nor
the resources to make a systematic inquiry into
this area. Notwithstanding, substantial evidence
came before the Board. A narrative of that evi-
dence is contained at Appendix C.
The Board found that the issues raised by
the Iran/Contra matter are in most instances
not new. Every Administration has faced similar
issues, although arising in different factual con-
texts. The Board examined in some detail the
performance of the National Security Council
system in 12 different crises dating back to the
Truman Administration.2 Former government
officials participating in many of these crises
were interviewed. This learning provided a
broad historical perspective to the issues before
the Board.
Those who expect from us a radical prescrip-
tion for wholesale change may be disappointed.
Not all major problems-and Iran/Contra has
been a. major one-can be solved simply by re-
arranging organizational blocks or passing new
laws.
In addition, it is important to emphasize that
the President is responsible for the national se-
curity policy of the United States. In the devel-
opment and execution of that policy, the Presi-
dent is the decision-maker. He is not obliged to
consult with or seek approval from anyone in
the Executive Branch. The structure and proce-
dures of the National Security Council system
should be designed to give the President every
assistance in discharging these heavy responsi-
bilities. It is not possible to make a system
immune from error without paralyzing its ca-
pacity to act.
At its senior levels, the National Security
Council is primarily the interaction of people.
We have examined with care its operation in
the Iran/Contra matter and have set out in
considerable detail mistakes of omission, com-
mission, judgment, and perspective. We believe
that this record and analysis can warn future
Presidents, members of the National Security
Council, and National Security Advisors of the
potential pitfalls they face even when they are
operating with what they consider the best of
motives. We would hope that this record would
be carefully read and its lessons fully absorbed
by all aspirants to senior positions in the Na-
tional Security Council system.
This report will serve another purpose. In
preparing it, we contacted every living past
President, three former Vice Presidents, and
every living Secretary of State, Secretary of De-
fense, National Security Advisor, most Direc-
tors of Central Intelligence, and several Chair-
men of the Joint Chiefs of Staff to solicit their
views. We sought to learn how well, in their ex-
perience, the system had operated or, in the
case of past Presidents, how well it served
them. We asked all former participants how
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they would change the system to make it more
useful to the President.3
Our review validates the current National Se-
curity Council system. That system has been
utilized by different Presidents in very different
ways, in accordance with their individual work
habits and philosophical predilections. On oc-
casion over the years it has functioned with real
brilliance; at other times serious mistakes have
been made. The problems we examined in the
case of Iran/Contra caused us deep concern.
But their solution does not lie in revamping the
National Security Council system.
9 A list of the witnesses interviewed by the Board is contained
in Appendix F.
That system is properly the President's crea-
ture. It must be left flexible to be molded by
the President into the form most useful to him.
Otherwise it will become either an obstacle to
the President, and a source of frustration; or an
institutional irrelevance, as the President fash-
ions informal structures more to his liking.
Having said that, there are certain functions
which need to be performed in some way for
any President. What we have tried to do is to
distill from the wisdom of those who have par-
ticipated in the National Security Council
system over the past forty years the essence of
these functions and the manner in which that
system can be operated so as to minimize the
likelihood of major error without destroying
the creative impulses of the President.
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Organizing for
National Security
Ours is a government of checks and balances,
of shared power and responsibility. The Consti-
tution places the President and the Congress in
dynamic tension. They both cooperate and
compete in the making of national policy.
National security is no exception. The Con-
stitution gives both the President and the Con-
gress an important role. The Congress is criti-
cal in formulating national policies and in mar-
shalling the resources to carry them out. But
those resources-the nation's military person-
nel, its diplomats, its intelligence capability-
are lodged in the Executive Branch. As Chief
Executive and Commander-in-Chief, and with
broad authority in the area of foreign affairs, it
is the President who is empowered to act for
the nation and protect its interests.
A. The National Security
Council
The present organization of the Executive
Branch for national security matters was estab-
lished by the National Security Act of 1947.
That Act created the National Security Council.
As now constituted, its statutory members are
the President, Vice President, Secretary of
State, and Secretary of Defense. The President
is the head of the National Security Council.
Presidents have from time to time invited the
heads of other departments or agencies to
attend National Security Council meetings or to
participate as de facto members. These have in-
cluded the Director of Central Intelligence (the
"DCI") and the Chairman of the Joint Chiefs of
Staff (the "CJCS"). The President (or, in his
absence, his designee) presides.
The National Security Council deals with the
most vital issues in the nation's national securi-
ty policy.. It is this body that discusses recent
developments in arms control and the Strategic
Defense Initiative; that discussed whether or
not to bomb the Cambodia mainland after the
Mayaguez was captured; that debated the time-
table for the U.S. withdrawal from Vietnam;
and that considered the risky and daring at-
tempt to rescue U.S. hostages in Iran in 1980.
The National Security Council deals with issues
that are difficult, complex, and often secret.
Decisions are often required in hours rather
than weeks. Advice must be given under great
stress and with imperfect information.
The National Security Council is not a deci-
sion-making body. Although its other members
hold official positions in the Government, when
meeting as the National Security Council they
sit as advisors to the President. This is clear
from the language of the 1947 Act:
"The function of the Council shall be
to advise the President with respect to
the integration of domestic, foreign,
and military policies relating to the na-
tional security so as to enable the mili-
tary services and the other depart-
ments and agencies of the Govern-
ment to cooperate more effectively in
matters involving the national securi-
ty.
The National Security Council has from its
inception been a highly personal instrument.
Every President has turned for advice to those
individuals and institutions whose judgment he
has valued and trusted. For some Presidents,
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such as President Eisenhower, the. National Se-
curity Council served as a primary forum for
obtaining advice on national security matters.
Other Presidents, such as President Kennedy,
relied on more informal groupings of advisors,
often including some but not all of the Council
members.
One official summarized the way the system
has been adjusted by different Presidents:
"The NSC is going to be pretty well what a
President wants it to be and what he deter-
mines it should be. Kennedy-and these
are some exaggerations and generalities of
course-with an anti-organizational bias,
disestablished all [the Eisenhower created]
committees and put a tight group in the
White House totally attuned to his philo-
sophic approach * * *. Johnson didn't
change that very much, except certain diffi-
culties began to develop in the informality
which was [otherwise] characterized by
speed, unity of purpose, precision * * *.
So it had great efficiency and responsive-
ness. The difficulties began to develop in
* * * the informality of the thing."
The Nixon Administration saw a return to
the use of the National Security Council as a
principal forum for national security advice.
This pattern was continued by President Ford
and President Carter, and in large measure by
President Reagan.
Regardless of the frequency of its use, the
NSC has remained a strictly advisory body.
Each President has kept the burden of decision
for himself, in accordance with his Constitu-
tional responsibilities.
B. The Assistant to the
President for National
Security Affairs
Although closely associated with the National
Security Council in the public mind, the Assist-
ant to the President for National Security
Affairs is not one of its members. Indeed, no
mention of this position is made in the Nation-
al Security Act of 1947.
The position was created by President Eisen-
hower in 1953. Although its precise title has
varied, the position has come to be known
(somewhat misleadingly) as the National Secu-
rity Advisor.
Under President Eisenhower, the holder of
this position served as the principal executive
officer of the Council, setting the agenda, brief-
ing the President on Council matters, and su-
pervising the staff. He was not a policy advo-
cate.
It was not until President Kennedy, with
McGeorge Bundy in the role, that the position
took on its current form. Bundy emerged as an
important personal advisor to the President on
national security affairs. This introduced an
element of direct competition into Bundy's re-
lationship with the members of the National
Security Council. Although President Johnson
changed the title of the position to simply
"Special Assistant," in the hands of Walt
Rostow it continued to play an important role.
President Nixon relied heavily on his Nation-
al Security Advisor, maintaining and even en-
hancing its prominence. In that position, Henry
Kissinger became a key spokesman for the
President's national security policies both to
the U.S. press and to foreign governments.
President Nixon used him to negotiate on
behalf of the United States with Vietnam,
China, the Soviet Union, and other countries.
The roles of spokesman and negotiator had tra-
ditionally been the province of the Secretary of
State, not of the National Security Advisor. The
emerging tension between the two positions
was only resolved when Kissinger assumed
them both.
Under President Ford, Lt Gen Brent Scow-
croft became National Security Advisor, with
Henry Kissinger remaining as Secretary of
State. The National Security Advisor exercised
major responsibility for coordinating for the
President the advice of his NSC principals and
overseeing the process of policy development
and implementation within the Executive
Branch.
President Carter returned in large part to the
early Kissinger model, with a resulting increase
in tensions with the Secretary of State. Presi-
dent Carter wanted to take the lead in matters
of foreign policy, and used his National Securi-
ty Advisor as a source of information, ideas,
and new initiatives.
The role of the National Security Advisor,
like the role of the NSC itself, has in large
measure been a function of the operating style
of the President. Notwithstanding, the National
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Security Advisor has come to perform, to a
greater or lesser extent, certain functions which
appear essential to the effective discharge of
the President's responsibilities in national secu-
rity affairs.
? He is an "honest broker" for the NSC
process. He assures that issues are clearly
presented to the President; that all reason-
able options, together with an analysis of
their disadvantages and risks, are brought
to his attention; and that the views of the
President's other principal advisors are ac-
curately conveyed.
? He provides advice from the President's
vantage point, unalloyed by institutional
responsibilities and biases. Unlike the Sec-
retaries of State or Defense, who have sub-
stantial organizations for which they are
responsible, the President is the National
Security Advisor's only constituency.
? He monitors the actions taken by the exec-
utive departments in . implementing the
President's national security policies. He
asks the question whether these actions
are consistent with Presidential decisions
and whether, over time, the underlying
policies continue to serve U.S. interests.
? He has a special role in crisis manage-
ment. This has resulted from the need for
prompt and coordinated action under
Presidential control, often with secrecy
being essential.
? He reaches out for new ideas and initia-
tives that will give substance to broad
Presidential objectives for national securi-
ty.
? He keeps the President informed about
international developments and develop-
ments in the Congress and the Executive
Branch that affect the President's policies
and priorities.
But the National Security Advisor remains
the creature of the President. The position will
be largely what he wants it to be. This presents
any President with a series of dilemmas.
? The President must surround himself with
people he trusts and to whom he can
speak in confidence. To this end, the Na-
tional Security Advisor, unlike the Secre-
taries of State and Defense, is not subject
to confirmation by the Senate and does
not testify before Congress. But the more
the President relies on the National Secu-
rity Advisor for advice, especially to the
exclusion of his Cabinet officials, the
greater will be the unease with this
arrangement.
? As the "honest broker" of the NSC proc-
ess, the National Security Advisor must
ensure that the different and often con-
flicting views of the NSC principals are
presented fairly to the President. But as an
independent advisor to the President, he
must provide his own judgment. To the
extent that the National Security Advisor
becomes a strong advocate for a particular
point of view, his role as "honest broker"
may be compromised and the President's
access to the unedited views of the NSC
principals may be impaired.
? The Secretaries of State and Defense, and
the Director of Central Intelligence, head
agencies of government that have specific
statutory responsibilities and are subject to
Congressional oversight for the implemen-
tation of U.S. national security policy. To
the extent that the National Security Advi-
sor assumes operational responsibilities,
whether by negotiating with foreign gov-
ernments or becoming heavily involved in
military or intelligence operations, the le-
gitimacy of that role and his authority to
perform it may be challenged.
? The more the National Security Advisor
becomes an "operator" in implementing
policy, the less will he be able objectively
to review that implementation-and
whether the underlying policy continues to
serve the interests of the President and the
nation.
? The Secretary of State has traditionally
been the President's spokesman on mat-
ters of national security and foreign af-
fairs. To the extent that the National Secu-
rity Advisor speaks publicly on these mat-
ters or meets with representatives of for-
eign governments, the result may be con-
fusion as to what is the President's policy.
C. The NSC Staff
At the time it established the National Secu-
rity Council, Congress authorized a staff
headed by an Executive Secretary appointed by
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the President. Initially quite small, the NSC
staff expanded substantially under President
Eisenhower.
During the Eisenhower Administration, the
NSC' staff assumed two important functions: co-
ordinating the executive departments in the de-
velopment of national policy (through the NSC
Planning Board) and overseeing the implemen-
tation of that policy (through the Operations
Coordination Board). A systematic effort was
made to coordinate policy development and its
implementation by the various agencies
through an elaborate set of committees. The
system worked fairly well in bringing together
for the President the views of the other NSC
principals. But it has been criticized as biased
toward reaching consensus among these princi-
pals rather than developing options for Presi-
dential decision. By the end of his second term,
President Eisenhower himself had reached the
conclusion that a highly competent individual
and a small staff could perform the needed
functions in a better way. Such a change was
made by President Kennedy.
Under President Kennedy, a number of the
functions of the NSC staff were eliminated and
its size was sharply reduced. The Planning and
Operations Coordinating Boards were abol-
ished. Policy development and policy imple-
mentation were assigned to individual Cabinet
officers, responsible directly to the President.
By late 1962 the staff was only 12 profession-
als, serving largely as an independent source of
ideas and information to the President. The
system was lean and responsive, but frequently
suffered from a lack of coordination. The John-
son Administration followed much the same
pattern.
The Nixon Administration returned to a
model more like Eisenhower's but with some-
thing of the informality of the Kennedy/John-
son staffs. The Eisenhower system had empha-
sized coordination; the Kennedy Johnson
system tilted to innovation and-the generation
of new ideas. The Nixon system emphasized
both. The objective was not inter-departmental
consensus but the generation of policy options
for Presidential decision, and then ensuring
that those decisions were carried out. The staff
grew to 50 professionals in 1970 and became a
major factor in the national security decision-
making process. This approach was largely con-
tinued under President Ford.
The NSC staff retained an important role
under President Carter. While continuing to
have responsibility for coordinating policy
among the various executive agencies, Presi-
dent Carter particularly looked to the NSC staff
as a personal source of independent advice.
President Carter felt the need to have a group
loyal only to him from which to launch his own
initiatives and to move a vast and lethargic gov-
ernment. During his time in office, President
Carter reduced the size of the professional staff
to 35, feeling that a smaller group could do the
job and would have a closer relationship to
him.
What emerges from this history is an NSC
staff used by each President in a way that re-
flected his individual preferences and working
style. Over time, it has developed an important
role within the Executive Branch of coordinat-
ing policy review, preparing issues for Presi-
dential decision, and monitoring implementa-
tion. But it has remained the President's crea-
ture, molded as he sees fit, to serve as his per-
sonal staff for national security affairs. For this
reason, it has generally operated out of the
public view and has not been subject to direct
oversight by the Congress.
D. The Interagency
Committee System
The National Security Council has frequently
been supported by committees made up of rep-
resentatives of the relevant national security
departments and agencies. These committees
analyze issues prior to consideration by the
Council. There are generally several levels of
committees. At the top level, officials from each
agency (at the Deputy Secretary or Under Sec-
retary level) meet to provide a senior level
policy review. These senior-level committees
are in turn supported by more junior inter-
agency groups (usually at the Assistant Secre-
tary level). These in turn may oversee staff
level working groups that prepare detailed
analysis of important issues.
Administrations have differed in the extent
to which they have used these interagency com-
mittees. President Kennedy placed little stock
in them. The Nixon and Carter Administra-
tions, by contrast, made much use of them.
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E. The Reagan Model
President Reagan entered office with a
strong commitment to cabinet government. His
principal advisors on national security affairs
were to be the Secretaries of State and De-
fense, and to a lesser extent the Director of
Central Intelligence. The position of the Na-
tional Security Advisor was initially downgrad-
ed in both status and access to the President.
Over the next six years, five different people
held that position.
The Administration's first National Security
Advisor, Richard Allen, reported to the Presi-
dent through the senior White House staff.
Consequently, the NSC staff assumed a re-
duced role. Mr. Allen believed that the Secre-
tary of State had primacy in the field of foreign
policy. He viewed the job of the National Secu-
rity Advisor as that of a policy coordinator.
President Reagan initially declared that the
National Security Council would be the princi-
pal forum for consideration of national security
issues. To support the work of the Council,
President Reagan established an interagency
committee system headed by three Senior
Interagency Groups (or "SIGs"), one each for
foreign policy, defense policy, and intelligence.
They were chaired by the Secretary of State,
the Secretary of Defense, and the Director of
Central Intelligence, respectively.
Over time, the Administration's original con-
ception of the role of the National Security Ad-
visor changed. William Clark, who succeeded
Richard Allen in 1982, was a long-time associ-
ate of the President and dealt directly with him.
Robert McFarlane, who replaced judge Clark in
1983, although personally less close to the
President, continued , to have direct access to
him. The same was true for VADM John Poin-
dexter, who was appointed to the position in
December, 1985.
President Reagan appointed several addition-
al members to his National Security Council
and allowed staff attendance at meetings. The
resultant size of the meetings led the President
to turn increasingly to a smaller group (called
the National Security Planning Group or
"NSPG"). Attendance at its meetings was more
restricted but included the statutory principals
of the NSC. The NSPG was supported by the
SIGs, and new SIGs were occasionally created
to deal with particular issues. These were fre-
quently chaired by the National Security Advi-
sor. But generally the SIGs and many of their
subsidiary groups (called Interagency Groups
or "IGs") fell into disuse.
As a supplement to the normal NSC process,
the Reagan Administration adopted compre-
hensive procedures for covert actions. These
are contained in a classified document, NSDD-
159, establishing the process for deciding, im-
plementing, monitoring, and reviewing covert
activities.
F. The Problem of Covert
Operations
Covert activities place a great strain on the
process of decision in a free society. Disclosure
of even the existence of the operation' could
threaten its effectiveness and risk embarrass-
ment to the Government. As a result, there is
strong pressure to withhold information, to
limit knowledge of the operation to a minimum
number of people.
These pressures come into play with great
force when covert activities are undertaken in
an effort to obtain the release of U.S. citizens
held hostage abroad. Because of the legitimate
human concern all Presidents have felt over the
fate of such hostages, our national pride as a
powerful country with a tradition of protecting
its citizens abroad, and the great attention paid
by the news media to hostage situations, the
pressures on any President to take action to
free hostages are enormous. Frequently to be
effective, this action must necessarily be covert.
Disclosure would directly threaten the lives of
the hostages as well as those willing to contem-
plate their release.
Since covert arms sales to Iran played such a
central role in the creation of this Board, it has
focused its attention in large measure on the
role of the NSC staff where covert activity is in-
volved. This is not to denigrate, however, the
importance of other decisions taken by the gov-
ernment. In those areas as well the National
Security Council and its staff play a critical
role. But in many respects the best test of a
system is its performance under stress. The
conditions of greatest stress are often found in
the crucible of covert activities.
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Arms Transfers to
Iran, Diversion, and
Support for the
Contras
The Iran/Contra matter has been and, in
some respects, still is an enigma. For three
months the Board sought to learn the facts,
and still the whole matter cannot be fully ex-
plained. The general outlines of the story are
clear. The story is set out here as we now know
it.
Given the President's injunction that he
wanted "all the facts to come out," the Board
sought to include all relevant materials. The
Board tried to be faithful to the testimony and
documents that came before it. This Board was
not established, however, as an investigative
body nor was it to determine matters of crimi-
nal culpability. Rather, the Board was estab-
lished to gather the facts, to place them in their
proper historical context, and to make recom-
mendations about what corrective steps might
be taken.
The limits of time, resources, and legal au-
thority were handicaps but not unreasonable
ones.
The Board had no authority to subpoena
documents, compel testimony, swear witnesses,
or grant immunity.
But these limitations did not prevent the
Board from assembling sufficient information
to form a basis for its fundamental judgments.
The Board received a vast quantity of docu-
ments and interviewed over 80 witnesses. The
Board requested all affected departments and
agencies to provide all documents relevant to
the Board's inquiry. The Board relied upon
these agencies to conduct thorough searches
for all relevant materials in their possession. In
addition, the Board reviewed the results and
relevant portions of working files from both the
CIA and Department of the Army Inspectors
General reports.
Several individuals declined our request to
appear before the Board: VADM John Poin-
dexter; General Richard Secord, USAF Ret.;
LtCol Oliver North; LtCol Robert Earl; Mr.
Albert Hakim; and Miss Fawn Hall. The Board
requested that the President exercise his
powers as Commander-in-Chief and order
VADM Poindexter and LtCol North to appear.
The President declined.'
Despite the refusal of VADM Poindexter and
LtCol North to appear, the Board's access to
other sources of information filled much of this
gap. The FBI provided documents taken from
the files of the National Security Advisor and
relevant NSC staff members, including mes-
sages from the PROF system 2 between VADM
Poindexter and LtCol North. The PROF mes-
sages were conversations by computer, written
at the time events occurred and presumed by
the writers to be protected from dislosure. In
this sense, they provide a first-hand, contempo-
raneous account of events.
In the closing days of the Board's inquiry, we
gained access to a considerable number of ad-
ditional exchanges on PROFs between VADM
Poindexter, LtCol North, and Mr. McFarlane.
1 The correspondence to the President from the Board's Chair-
man and the reply, on his behalf, of White House Counsel Peter
Wallison, are at Appendix G.
2 The "PROF" system, The Professional Office System, is an
interoffice mail system run through an IBM main frame computer
and managed by the White House Communications Agency for
the NSC. All NSC officers have personal passwords which enable
them to send and receive messages to each other from terminals
at their desks .
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The Board had access to another contempo- government was either barred or restricted by
raneous record of events. The President keeps Congress. A more detailed narrative of this evi-
a diary in which he chronicles, in long hand, dence is set out in Appendix C.
key events that occurred during the day. Presi-
dent Reagan reviewed his notes and, at the Section A: The Arms
Board's request, culled from them the relevant
to Iran
ed Transfers
notes he had made on particular dates request-
by the Board. The Board was permitted to
review but not to retain a typewritten copy of Two persistent concerns lay behind U.S. par-
these diary entries. ticipation in arms transfers to Iran.
No one interviewed by the Board seemed First, the U.S. government anxiously sought
able to provide a unified account of the events the release of seven U.S. citizens abducted in
in August independent of calendars or meeting Beirut, Lebanon, in seven separate incidents
notes. In the lives of these particularly busy in- between March 7, 1984, and June 9, 1985. One
dividuals this should not be surprising. This of those abducted was William Buckley, CIA
lack of a total and accurate recall may suggest station chief in Beirut, seized on March 16,
an equally important point: when these events 1984. Available intelligence suggested that
occurred, they were not treated by many of the most, if not all, of the Americans were held
participants as sufficiently important. hostage by members of Hizballah, a fundamen-
Those that are present at meetings or privy talist Shiite terrorist group with links to the
to conversations will retain different impres- regime of the Ayatollah Khomeini.
sions of what occurred. That certainly hap- Second, the U.S. government had a latent
pened here. Many of these events occurred and unresolved interest in establishing ties to
almost two years ago, and memories fade. Iran. Few in the U.S. government doubted
There is also the chance that, for whatever Iran's strategic importance or the risk of Soviet
reason, individuals concealed evidence or delib- meddling in the succession crisis that might
erately misled the Board. In any event, the follow the death of Khomeini. For this reason,
Board's mandate was not to resolve conflicts some in the U.S. government were convinced
among various recollections but to attempt to that efforts should be made to open potential
ascertain the essential facts as they affect con- channels to Iran.
clusions about the national security process. Arms transfers ultimately appeared to offer a
The Independent Counsel at various points means to achieve both the release of the hos-
denied the Board access to some materials in tages and a strategic opening to Iran.
which he had established an interest. The Gov- The formulation, development, and imple-
ernment of Israel was asked to make certain in- mentation of the Iran initiative passed through
dividuals available in any way that would be seven distinct stages. Each is analyzed in this
convenient to them. They declined to do so. section of the report. For the purposes of the
They agreed to answer written interrogatories. Board's mandate, the critical questions for each
We dispatched those to the Government of stage are: What was U.S. policy? How were de-
Israel but no response has, as yet, been re- cisions made? What action was authorized and
ceived. by whom? How was this action carried out?
The first section of this Part III summarizes What happened as a result?
the evidence b
f
h
B
e
ore t
e
oard concerning the
arms transfers to Iran. A more detailed narra-
tive of this evidence is set out in Appendix B.
The second section summarizes the evidence
before the Board concerning a diversion of
funds from the arms sales to the support of the
Contras fighting in Nicaragua.
The third section summarizes the evidence
accumulated by the Board concerning the role
of the NSC staff in the support of the Contras
during the period that support from the U.S.
Stage 1: The NSC Staff Seeks a
New Look at U.S. Policy on Iran
The Shah of Iran was overthrown on January
16, 1979, ending an intimate, twenty-five year
relationship between the United States and
Iran. Mutual hostility and tension characterized
U.S. relations with the regime of the Ayatollah
Khomeini, which, after some months, succeed-
ed the Shah's rule. On November 4, 1979, radi-
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cal Iranian elements seized the U.S. embassy in
Tehran and held its staff hostage. The United
States responded by blocking the transfer of all
property of the Iranian government, imposing
a trade embargo, freezing all other Iranian
assets, and breaking diplomatic relations. In ad-
dition, the United States imposed an embargo
on all arms shipments to Iran, including arms
that had been purchased under the Shah but
not yet delivered.
On January 19, 1981, many of these restric-
tions were lifted, as part of the agreement that
led to the release of the embassy staff. Howev-
er, this did not extend to the embargo on arms
transfers. Iraq had attacked Iran on September
22, 1980. The United States had adopted a
policy of neutrality and refused to ship arms to
either side. The result was a continuation of
the arms embargo against Iran.
The Reagan Administration had adopted a
tough line against terrorism. In particular, the
United States adamantly opposed making any
concessions to terrorists in exchange for the re-
lease of hostages-whether by paying ransom,
releasing prisoners, changing policies, or other-
wise. Some time in July of 1982, the United
States became aware of evidence suggesting
that Iran was supporting terrorist groups, in-
cluding groups engaged in hostage-taking. On
January 20, 1984, the Secretary of State desig-
nated Iran a sponsor of international terror-
ism.3 Thereafter, the United States actively
pressured its allies not to ship arms to Iran,
both because of its sponsorship of international
terrorism and its continuation of the war with
Iraq.
The NSC Staff Initiates a Reevaluation. By early
1984, Robert McFarlane, the National Security
Advisor, and members of the NSC staff, had
become concerned about future U.S. policy
toward Iran. They feared that the death of
Khomeini would touch off a succession struggle
which would hold important consequences for
U.S. interests. They believed that the United
States lacked a strategy and capability for deal-
ing with this prospect.
Initially, Mr. McFarlane tried to use the
formal interagency policy process to address
3 On August 27, 1986, a new section was added to the Arms
Export Control Act which prohibited the export of arms to coun-
tries which the Secretary of State has determined support acts of
international terrorism. Such a determination was in effect at that
time for Iran.
this issue. On August 31, 1984, he requested
an interagency study of U.S. relations with Iran
after Khomeini. On October 19, 1984, the
State Department sent Mr. McFarlane the inter-
agency response to his request. It concluded
that the United States had "no influential con-
tacts" within the Iranian government or Iranian
political groups. The study suggested little that
the United States could do to establish such
contacts. Separately, in a letter dated December
11, 1984, to Mr. McFarlane's deputy, VADM
John Poindexter, the CIA professed only a lim-
ited capability to influence events in Iran over
the near term.
The Reevaluation Yields No New Ideas. Howard
Teicher, one of the NSC staff -members in-
volved, told the Board that the interagency
effort failed to identify any new ideas for sig-
nificantly expanding U.S. influence in Iran. It
resulted in no change in U.S. policy. The U.S.
government continued aggressively to discour-
age arms transfers by other nations to Iran
under a program called "Operation Staunch."
Stage 2: The NSC Staff Tries a
Second Time
Mr. Teicher, Donald Fortier, and perhaps
other NSC staff members were unhappy with
the result of the interagency effort. They
placed a high priority on fashioning a strategy
for acquiring influence and checking the Sovi-
ets in Iran. Graham Fuller, then the National
Intelligence Officer for the Near East and
South Asia, told the Board that in early 1985
the U.S. intelligence community began to be-
lieve that serious factional fighting could break
out in Iran even before Khomeini died. This
change in the community's assessment provid-
ed a second opportunity for a policy review.
The NSC Staff Suggests Limited Arms Sales. Mr.
Teicher, and to a lesser extent Mr. Fortier,
worked closely with CIA officials to prepare an
update of a previous "Special National Intelli-
gence Estimate" (or "SNIE") on Iran. Dated
May 20, 1985, the update portrayed the Soviets
as well positioned to take advantage of chaos
inside Iran. The United States, by contrast, was
unlikely to be able directly to influence events.
Our European and other allies could, however,
provide a valuable presence to help protect
Western interests. The update concluded that
the degree to which these allies "can fill a mili-
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tary gap for Iran will be a critical measure of
the West's ability to blunt Soviet influence."
On June 11, 1985, Mr. Fortier and Mr.
Teicher submitted to Mr. McFarlane a draft
Presidential decision document (a National Se-
curity Decision Directive or "NSDD") drawing
on the intelligence update. The draft set out
immediate and long-term U.S. goals and listed
specific steps to achieve them. First on the list
was to "[e]ncourage Western allies and friends
to help Iran meet its import requirements * * *
includ[ing] provision of selected military equip-
ment * * *."
The memorandum from Mr. Fortier and Mr.
Teicher transmitting the draft NSDD to Mr.
McFarlane suggested that "[b]ecause of the po-
litical and bureaucratic sensitivities," Mr.
McFarlane should provide copies of the NSDD
only to Secretary of State Shultz and Secretary
of Defense Weinberger. "Whether to proceed
with a restricted SIG [Senior Interagency
Group], NSPG [National Security Planning
Group], or other forum [for consideration of
the draft] would depend on their reactions."
Mr. McFarlane circulated the draft on June
17, 1985, to Secretary Shultz, Secretary Wein-
berger, and Director of Central Intelligence
Casey. His transmittal memorandum requested
that further distribution remain limited to
lessen the risk of leaks. In letters to Mr. McFar-
lane dated June 29, 1985, and July 16, 1985,
respectively, both Secretary Shultz and Secre-
tary Weinberger objected sharply to the sug-
gestion that the United States should permit or
encourage transfers of Western arms to Iran.
By contrast, in his reply of July 18, 1985, Direc-
tor Casey "strongly endorse[d]" the thrust of
the draft NSDD and particularly its emphasis
on the need to take "concrete and timely steps
to enhance U.S. leverage." He did not specifi-
cally address the issue of arms sales.
The Suggestion Dies. Mr. Teicher told the
Board that the strong objections from Secretary
Shultz and Secretary Weinberger apparently
killed the draft NSDD. In mid-August he was
told to "stand down" on the effort. The draft
was never submitted to the President for his
consideration or signature.
The abandonment of the draft NSDD marked
the end of efforts by Mr. McFarlane and the
NSC staff to use the formal interagency policy
process to obtain an explicit change in U.S.
policy toward Iran. From this point on, the
matter moved along a different track.
Stage 3: The Israelis Provide a
Vehicle
While the NSC staff was seeking a reexam-
ination of U.S. policy toward Iran, several staff
members were growing ever more concerned
about the hostage issue. On June 14, 1985,
TWA flight 847 was hijacked enroute from
Athens to Rome, with 135 U.S. citizens aboard.
It was not until June 29 that all the hostages
were released. One U.S. citizen was executed.
The event dominated the news in the United
States and dramatized the hostage issue. Frus-
tration at the lack of progress in freeing the
hostages in Beirut grew perceptibly within the
U.S. government, especially in the face of pleas
to the President for action by the families of
the hostages. In the summer of 1985, a vehicle
appeared that offered the prospect of progress
both on the release of the hostages and a stra-
tegic opening to Iran.
Israel had long-standing interests in a rela-
tionship with Iran and in promoting its arms
export industry. Arms sales to Iran could fur-
ther both objectives. It also offered a means of
strengthening Iran against Israel's old adver-
sary, Iraq. Much of Israel's military equipment
came originally from the United States, howev-
er. For both legal and political reasons, Israel
felt a need for U.S. approval of, or at least ac-
quiescence in, any arms sales to Iran. In addi-
tion, elements in Israel undoubtedly wanted
the United States involved for its own sake so
as to distance the United ' States from the Arab
world and ultimately to establish Israel as the
only real strategic partner of the United States
in the region.
Iran badly wanted what Israel could provide.
The United States had been the primary source
of arms for the Shah, but U.S. shipments to
Iran were now barred by the embargo. Iran
desperately wanted U.S.-origin TOW and
HAWK missiles,4 in order to counter Iraq's
4 The acronym "TOW" stands for tube-launched, optically-
tracked, wire-guided missile. It is a man-portable anti-tank mis-
sile. A "HAWK" is a type of ground-launched, anti-aircraft mis-
sile.
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chief areas of superiority-armor and air
forces. Since Israel had these weapons in its in-
ventory, it was an alternative source of supply.
Israel was more than willing to provide these
weapons to Iran, but only if the United States
approved the transfer and would agree to re-
place the weapons.
Iranian interest in these weapons was widely
known among those connected with the arms
trade. These included Manucher Ghorbanifar,
an Iranian businessman living in France, and
Adolph Schwimmer and Yaacov Nimrodi, pri-
vate Israeli arms dealers with contacts through-
out the Middle East including Israel. Since Sep-
tember, 1984, Mr. Schwimmer had also been a
consultant to then-Prime Minister of Israel
Shimon Peres. In a series of meetings begin-
ning in January, 1985, these men had discussed
using arms sales to obtain the release of the
U.S. citizens held hostage in Beirut and to
open a strategic dialogue with Iran. Some of
those meetings included Amiram Nir, since
September, 1984, an advisor to Prime Minister
Peres on counterterrorism. Also involved was
Saudi businessman Adnan Khashoggi, a man
well-connected in the Middle East and enjoying
a special relationship with key Israeli officials.
All these men subsequently played a role in the
brokering of the arms deals that later did
occur.
These men believed that the United States,
Israel, and Iran, though with different interests,
were susceptible to a relationship of conven-
ience involving arms, hostages, and the open-
ing of a channel to Iran. The catalyst that
brought this relationship into being was the
proffering by Israel of a channel for the United
States in establishing contacts with Iran.
An Opening to Iran. On the 4th or 5th of May,
1985, Michael Ledeen, an NSC staff consultant,
with the knowledge of Mr. McFarlane, went to
Israel and met with Prime Minister Peres. Mr.
Ledeen told the Board that he asked about the
state of Israeli intelligence on Iran and whether
Israel would be willing to share its intelligence
with the United States. Two months later, the
United States received the first of three sepa-
rate requests regarding Iran from the Israeli
government. The first two occurred in July,
1985.
(i) The July Requests. On July 3, 1985, David
Kimche, the Director General of the Israeli
Foreign Ministry, met at the White House with
Mr. McFarlane. Mr. McFarlane told the Board
that Mr. Kimche asked the position of the U.S.
government toward engaging in a political dis-
course with Iranian officials. He recalled Mr.
Kimche as saying that these Iranian officials
had conveyed to Israel their interest in a dis-
course with the United States. Contact was to
be handled through an intermediary (later dis-
closed to be Mr. Ghorbanifar) who was repre-
sented as having good connections to Iranian
officials.
This was not the first time that Mr. Ghorban-
ifar had come to the attention of the U.S. gov-
ernment. The CIA knew of Mr. Ghorbanifar
and had a history of contacts with him. CIA's
first contact with Ghorbanifar was through a
European intelligence service in January 1980.
From the beginning, CIA found it "difficult to
filter out the bravado and exaggeration from
what actually happened." Other intelligence
services had similar experiences with Mr. Ghor-
banifar. By September of 1980, CIA decided to
drop efforts at recruiting Ghorbanifar. It con-
sidered him neither reliable nor trustworthy. In
addition, Theodore Shackley, a former CIA of-
ficial, had met Mr. Ghorbanifar in Hamburg,
West Germany, between November 19-21,
1984. Mr. Ghorbanifar at that time suggested
payment of a cash ransom for the hostages in
Beirut, with himself as middleman. This pro-
posal, contained in a memorandum prepared
by Mr. Shackley dated November 22, 1984, ap-
parently reached the State Department where it
elicited no interest. A memorandum from Mr.
Shackley dated June 7, 1985, containing a later
suggestion by Mr. Ghorbanifar that the ransom
involve items "other than. money," also drew
no response. At the time of his meeting with
Mr. Kimche, Mr. McFarlane apparently did not
know this background or even that Mr. Ghor-
banifar was the intermediary Mr. Kimche had in
mind. He learned this later in the month from
Mr. Ledeen.
Mr. McFarlane. told the Board that Mr.
Kimche told him the Iranians understood that
they would have to demonstrate their "bona
fides" and that the Iranians believed they could
influence Hizballah to release the hostages in
Beirut. But Mr. McFarlane also recalled Mr.
Kimche expressing the view that ultimately the
Iranians would need something to show for the
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dialogue, and that this would "probably" be
weapons.
Mr. McFarlane testified that he informed the
President of his conversation with Mr. Kimche
within three or -four days after the meeting,
shortly before the President entered the hospi-
tal for his cancer operation. Mr. McFarlane also
stated that on July 13, 1985, he briefed Secre-
tary Shultz, Secretary Weinberger, and Director
Casey in separate conversations. Mr. McFarlane
told the Board that the President was interest-
ed in the proposal and said that he believed we
should explore it. Mr. McFarlane said this may
have occurred in the first week of July, before
the President entered the hospital.
On July 13, 1985, Mr. McFarlane apparently
received a second request, this time brought by
an emissary directly from Israeli Prime Minister
Peres. The "emissary" was Mr. Schwimmer,
who delivered the request to Mr. McFarlane
through Mr. Ledeen. The emissary carried
word of a recent meeting with Mr. Ghorbanifar
and another Iranian in which the Iranians had
said that others inside Iran were interested in
more extensive relations with the West, and
particularly, the United States. The Iranians re-
portedly said that their contacts in Iran could
achieve the release of the seven Americans held
in Lebanon but in exchange sought 100 TOW
missiles from Israel. This was to be part of a
"larger purpose" of opening a "private dia-
logue" on U.S./Iranian relations. The emissary
asked for a prompt response. Mr. McFarlane
stated that he passed the President's decision
to David Kimche by telephone.
On July 14, 1985, Mr. McFarlane cabled this
proposal to Secretary Shultz, who was traveling
in Asia. Mr. McFarlane recommended a tenta-
tive show of interest in a dialogue but with no
commitment to the arms exchange. He asked
for Secretary Shultz's guidance and indicated
he would "abide fully" by the Secretary's deci-
sion. By return cable on the same day, Secre-
tary Shultz agreed to "a tentative show of inter-
est without commitment." He said this was
consistent with U.S. policy of "maintaining con-
tact with people who might eventually provide
information or help in freeing hostages." Sec-
retary Shultz advised Mr. McFarlane to "handle
this probe personally" but asked that he stay in
close contact.
White House Chief of Staff Regan told the
Board that he and Mr. McFarlane met with the
President on this issue in the hospital a few
days after the President's cancer operation on
July 13. Mr. Regan told the Board that the
matter was discussed for 20 to 25 minutes, with
the President asking quite a few questions. He
recalled the President then saying "yes, go
ahead. Open it up."
In his meeting with the Board on February
11, 1987, the President said he had no recollec-
tion of a meeting in the hospital in July with
Mr. McFarlane and that he had no notes that
would show such a meeting.
(ii) The August Request. On August 2, 1985,
Mr. McFarlane again met at the White House
with Mr. Kimche. According to Mr. McFarlane,
Mr. Kimche said that the Iranians had asked
whether the United States would supply arms
to Iran. Mr. McFarlane recalled responding that
he thought not. He told the Board that Mr.
Kimche then asked what the U.S. reaction
would be if Israel shipped weapons to Iran, and
whether the United States would sell replace-
ments "whether it's HAWKs or TOWs or what-
ever else." Mr. McFarlane recalled telling Mr.
Kimche he would "get you our position."
What followed is quite murky.
Most NSC principals apparently had an op-
portunity to discuss this request with the Presi-
dent in and around the first two weeks of
August. There clearly was a series of meetings
with one or more of the principals in attend-
ance. In addition, a number of the participants
seem to recall a single meeting at which all the
principals were present. White House records,
however, show no meetings of the NSC princi-
pals in August scheduled for the purpose of
discussing this issue. Other evidence suggests
that there were meetings of the NSC principals
in August at which this issue could have been
discussed.
It is also unclear what exactly was under con-
sideration at this time. No analytical paper was
prepared for the August discussions and no
formal minutes of any of the discussions were
made.
Mr. McFarlane said that Mr. Kinche made a
special proposal that 100 TOWs to Iran would
establish good faith and result in the release of
all the hostages. Mr. McFarlane told the Board
that he discussed this proposal with the Presi-
dent several times and, on at least one occa-
sion, with all the "full" members of the NSC.
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Within days after the meeting, the President
communicated his decision to Mr. McFarlane
by telephone. He said the President decided
that, if Israel chose to transfer arms to Iran, in
modest amounts not enough to change the
military balance and not including major
weapon systems, then it could buy replace-
ments from the United States. Mr. McFarlane
said that the President also indicated that the
United States was interested in a political meet-
ing with the Iranians. Mr. McFarlane said he re-
minded the President of the opposition ex-
pressed by Secretary Shultz and Secretary
Weinburger, but that the President said he
wanted to go ahead-that he, the President,
would take "all the heat for that."
Mr. McFarlane told the Board that he subse-
quently conveyed the President's decision to
Mr. Kimche. He said that he emphasized to Mr.
Kimche that the U.S. purpose was a political
agenda with Iran, not an exchange of arms for
hostages. Mr. McFarlane told the Board that he
also conveyed this decision to the NSC princi-
pals.
Secretary Shultz told the Board that on
August 6, 1985, during one of his regularly
scheduled meetings with the President, he dis-
cussed with the President a proposal for the
transfer of 100 TOW missiles from Israel. The
Iranians were for their part to produce the re-
lease of four or more hostages. Secretary
Shultz told the Board that he opposed the arms
sales at the meeting with the President. He said
that Mr. McFarlane was present at this meeting.
Secretary Schultz did not recall a telephone call
from Mr. McFarlane regarding a decision by
the President.
Secretary Weinberger recalled a meeting with
the President at his residence after the Presi-
dent's return from the hospital. He told the
Board that he argued forcefully against arms
transfers to Iran, as did George Shultz. He said
he thought that the President agreed that the
idea should not be pursued.
Mr. Regan also recalled an August meeting
with the President. He told the Board that the
President expressed concern with any one-for-
one swap of arms for hostages and indicated
"we should go slow on this but develop the
contact." Mr. Regan also told the Board that in
early September, Mr. McFarlane informed the
President that Israel had sold arms to the Irani-
ans and hoped to get some hostages out. Mr.
Regan stated that the President was "upset" at
the news and that Mr. McFarlane explained
that the Israelis had "simply taken it upon
themselves to do this." Mr. Regan said that
after some discussion, the President decided to
"leave it alone."
In his meeting with the Board on January 26,
1987, the President said that sometime in
August he approved the shipment of arms by
Israel to Iran. He was uncertain as to the pre-
cise date. The President also said that he ap-
proved replenishment of any arms transferred
by Israel to Iran. Mr. McFarlane's testimony of
January 16, 1986, before the Senate Foreign
Relations Committee, which the President em-
braced, takes the same position. This portion
of Mr. McFarlane's testimony was specifically
highlighted on the copy of testimony given by
the President to the Board.
In his meeting with the Board on February
11, the President said that he and Mr. Regan
had gone over the matter a number of times
and that Mr. Regan had a firm recollection that
the President had not authorized the August
shipment in advance. The President said he did
not recall authorizing the August shipment in
advance. He noted that very possibly, the trans-
fer was brought to him as already completed.
He said that subsequently there were arms
shipments he authorized that may have had to
do with replenishment, and that this approval
for replenishment could have taken place in
September. The President stated that he had
been "surprised" that the Israelis had shipped
arms to Iran, and that this fact caused the
President to conclude that he had not approved
the transfer in advance.
In a subsequent letter to the Board received
on February 20, 1987, the President wrote: "In
trying to recall events that happened eighteen
months ago I'm afraid that I let myself be influ-
enced by others' recollections, not my own . . .
". . . I have no personal notes or records
to help my recollection on this matter. The
only honest answer is to state that try as I
might, I cannot recall anything whatsoever
about whether I approved an Israeli sale in
advance or whether I approved replenish-
ment of Israeli stocks around August of
1985. My answer therefore and the simple
truth is, `I don't remember-period.' "
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The Board tried to resolve the question of
whether the President gave prior approval to
Israel's transfer of arms to Iran. We could not
do so conclusively.
We believe that an Israeli request for approv-
al of such a transfer was discussed before the
President in early August. We believe that Sec-
retary Shultz and Secretary Weinberger ex-
pressed at times vigorous opposition to the
proposal. The President agreed to replenish Is-
raeli stocks. We are persuaded that he most
likely provided this approval prior to the first
shipment by Israel.
In coming to this conclusion, it is of para-
mount importance that the President never op-
posed the idea of Israel transferring arms to
Iran. Indeed, four months after the August
shipment, the President authorized the United
States government to undertake directly the
very same operation that Israel had proposed.
Even if Mr. McFarlane did not have the Presi-
dent's explicit prior approval, he clearly had his
full support.
A Hostage Comes Out. On August 30, 1985,
Israel delivered 100 TOWs to Iran. A subse-
quent delivery of 408 more TOWs occurred on
September 14, 1985.5 On September 15, 1985,
Reverend Benjamin Weir was released by his
captors.
Mr. Ghorbanifar told the Board that the 100
TOWs were not linked to a hostage release.
They were to evidence U.S. seriousness in rees-
tablishing relations with Iran. The next step
was to be the delivery of 400 more TOWs, for
which Iran was to free a hostage. The goal was
to establish a new relationship between the two
countries, which would include a pledge by
Iran of no further terrorist acts against the
United States or its citizens by those under
Iran's control.
Mr. McFarlane said that he received a tele-
phone call from Mr. Kimche informing him of
Rev. Weir's impending release about a week
before it occurred. LtCol North, the NSC staff
officer with responsibility for terrorism policy,
made arrangements for receiving and debrief-
ing Rev. Weir.
Although it appears that Israel and the
United States expected the release of the re-
' The financing of these and other arms transactions discussed
in this Part III is described in detail in the charts annexed to the
end of Appendix B.
maining hostages to accompany or follow the
release of Rev. Weir, this did not occur.
Stage 4: The Initiative Appears to
Founder
The United States had only a supporting role
in the August and September deliveries to Iran.
Israel managed the operation. The next three
months saw an increasing U.S. role.
A number of important developments re-
garding the Iran initiative occurred between
September and December, 1985. However, it
proved difficult for the Board to establish pre-
cisely what happened during'.this period. This
is in part because the period was one of great
activity for the President, the NSC principals,
and Mr. McFarlane. Issues that seemed to be
both more important and more urgent than the
Iran initiative clearly preoccupied them.
Mr. McFarlane described the foreign policy
agenda for the period. The Soviet foreign min-
ister visited Washington. Preparations for the
Geneva Summit with General Secretary Gorba-
chev were under way; this included four Presi-
dential speeches on arms control, human
rights, regional issues, and U.S./Soviet bilater-
ial relations. The President delivered an ad-
dress to the United Nations on the occasion of
its 40th Anniversary. The President met with
twelve to fifteen heads of State in New York
and Washington. In the middle of this hectic
schedule, on October 7, 1985, the Achille
Lauro was seized by four Palestinian hijackers.
An Arms for Hostages Deal. On October 8,
1985, LtCol North's calendar indicated that he
met with Mr. Ledeen, Mr. Schwimmer, Mr.
Nimrodi, and Mr. Ghorbanifar (using the alias
of Nicholas Kralis). Other meetings may have
occurred. There is little evidence of what exact-
ly went on in these meetings. All that is known
for sure is that shortly after those meetings,
David Kimche advanced a third proposal.
Mr. Kimche met with Mr. McFarlane and
LtCol North on November 9, 1985. John
McMahon, the Deputy Director of Central In-
telligence, told the Board that Mr. McFarlane
spoke with him on November 14. Mr. McFar-
lane told Mr. McMahon that Mr. Kimche had
indicated that the Israelis planned to provide
some arms to moderates in Iran who would
oppose Khomeini. Mr. McFarlane suggested
that the Israelis interpreted the Presidential au-
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thorization as an open charter for further arms
shipments as long as the shipments were
modest and did not alter the military balance
between Iran and Iraq. Indeed, he did not
recall any specific request by Israel in the late
fall. He did, however, remember that early in
November, Yitzhak Rabin, Israel's Defense
Minister, asked whether U.S. policy would still
permit Israel to buy replacements from the
U.S. for arms it transferred to Iran. Mr. McFar-
lane confirmed that it would, although he indi-
cated U.S. reservations about any trade of arms
for hostages. They asked nothing further.
In a message to VADM Poindexter on No-
vember 20, 1985, LtCol North described the
following plan. The Israelis were. to deliver 80
HAWK missiles to a staging area in a third
country, at noon on Friday, November 22.
These were to be loaded aboard three char-
tered aircraft, which would take off at two hour
intervals for Tabriz, Iran. Once launch of the
first aircraft had been confirmed by Mr. Ghor-
banifar, directions would be given to release
the five U.S. citizens held hostage in Beirut. No
aircraft was to land in Tabriz until all the hos-
tages had been delivered to the U.S. embassy
in Beirut. Israel would deliver forty additional
HAWKs at a later time. The Iranians would
commit to seeing that there were no further
hostages seized.
Secretary Shultz told the Board that Mr.
McFarlane told him on November 18, 1985,
about a plan that would produce the release of
the hostages on Thursday, November 21. Sec-
retary Shultz told the Board he told Mr. McFar-
lane that had he known of it earlier, he would
have stopped it. He nonetheless expressed the
hope to Mr. McFarlane that the hostages would
be released. It is not clear what other NSC
principals, if any, were told in advance about
the plan.
Secretary Shultz said he told an associate on
November 22 that "Bud says he's cleared with
the President" on the plan. Chief of Staff
Regan told the Board that the President was in-
formed in advance of the Israeli HAWK ship-
ment but was not asked to approve it. He said
that Mr. McFarlane told the President early in
the month on the margins of his briefings for
the Geneva Summit to expect that a shipment
of missiles would come from Israel through a
third country to Iran, and that the hostages
would come out.
In his first meeting with the Board on Janu-
ary 16, 1987, the President said he did.not re-
member how the November shipment came
about. The President said he objected to the
shipment, and that, as a result of that objec-
tion, the shipment was returned to Israel.
In his second meeting with the Board on
February 11, 1987, the President stated that
both he and Mr. Regan agreed that they cannot
remember any meeting or conversation in gen-
eral about a HAWK shipment. The President
said he did not remember anything about a
call-back of the HAWKs.
Nonetheless, that the United States would
sell replacement HAWKs to Israel seems to
have been assumed at least by VADM Poin-
dexter from the start. LtCol North informed
VADM Poindexter on November 20, 1985, that
"IAW [in accordance with] your instructions I
have told their [Israel's] agent that we will sell
them 120 items [HAWKs] at a price that they
can meet."
Failure. In contrast to the August TOW ship-
ment, the United States became directly in-
volved in the November transfer of the HAWK
missiles. Sometime on November 17 or 18,
1985, while Mr. McFarlane was in Geneva for
the November summit, Mr. Rabin called Mr.
McFarlane to say that a problem had arisen.
Mr. McFarlane referred the matter to LtCol
North.
North signed a letter for Mr. McFarlane
dated November 19, 1985, requesting Richard
Secord, a retired U.S. Air Force general officer,
to proceed to a foreign country, to arrange for
the transfer of "sensitive material" being
shipped from Israel. That day Mr. Secord made
arrangements for transshipment of the Israeli
HAWKs.
But late in the day on November 21, these
arrangements began to fall apart. The foreign
government denied landing clearance to the
aircraft bringing the HAWKs from Israel. LtCol
North contacted Duane Clarridge of the CIA
for assistance in obtaining the required landing
clearance. When the CIA's efforts failed, LtCol
North asked Mr. Clarridge to find a reliable
commercial carrier to substitute for the Israeli
flight. Mr. Clarridge put Mr. Secord in contact
with a carrier that was a CIA proprietary.
The plan went awry again on November 22,
when Mr. Schwimmer allowed the lease to
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expire on the three aircraft they had chartered
to take the HAWKs to Tabriz. Mr. Secord was
able to provide an aircraft for this leg of the
journey, however. The CIA arranged for over-
flight rights over a third country. On Novem-
ber 25 the aircraft left a European country. De-
livery was three days late, however, and the air-
craft carried only 18 HAWKs. Contrary to
LtCol North's description of this plan, the air-
craft delivered the HAWKs before the release
of any hostages. In fact, no hostages were ever
released as a result of this delivery.
Not only were just 18 of the initial shipment
of HAWKs delivered, the HAWKs did not meet
Iranian military requirements. In addition, they
bore Israeli markings. Mr. Ghorbanifar told the
Board that this caused great unhappiness in
Iran and had disastrous consequences for the
emerging relationship. Ultimately the Iranians
returned 17 of the HAWKS to Israel. The
eighteenth had been test-fired at an Iraqi air-
craft flying over Kharg Island to determine the
missile's effectiveness.
When Deputy Director McMahon learned of
the CIA role in the shipment some three or
four days after the fact, he directed the CIA
General Counsel to prepare a Covert Action
Finding 6 providing Presidential authorization
for the CIA's past support and any future sup-
port to the Iran initiative. A Findipg was draft-
ed and delivered to VADM Poindexter, but the
evidence strongly suggests it was never signed
by the President.
Stage 5: The United States Sells
Directly to Iran
On November 30, 1985, Mr. McFarlane re-
signed as National Security Advisor. VADM
Poindexter was named National Security Advi-
sor on December 4. That same day, LtCol
North raised with VADM Poindexter a new
proposal for an arms-for-hostages deal. It in-
volved the transfer of 3,300 Israeli TOWs and
50 Israeli HAWKs in exchange for release of all
the hostages. The arms were to be delivered in
five installments, spread over a 24-hour period.
Each installment was to result in the release of
one or two hostages, so that in the end all five
6 Section 662 of the Foreign Assistance Act, the so-called
Hughes-Ryan Amendment, prohibits covert operations by the
CIA unless and until the President "finds such operation is im-
portant to the national security of the United States."
U.S. citizens held in Beirut and a French hos-
tage would be freed.' If any installment did not
result in a hostage release, all deliveries would
stop.
An Attempt to Break the Arms/Hostages Link.
This proposal was considered at a meeting with
the President on December 7 in the White
House residence. The President, Secretary
Shultz, Secretary Weinberger, Mr. Regan, Mr.
McMahon, Mr. McFarlane, and VADM Poin-
dexter attended. Secretary Shultz described the
meeting as the first "formal meeting" on the
Iran initiative where the participants were in-
formed in advance of the subject and had time
to prepare. Mr. McFarlane said that the partici-
pants reviewed the history of the program.
However, no analytical paper was circulated for
discussion at the meeting; the Board was not
able to acquire any minutes of this meeting.
State Department notes of Secretary Shultz's
contemporaneous report of a conversation he
had with VADM Poindexter on December 5 in-
dicate that VADM Poindexter asked that Secre-
tary Shultz's calendar not show the meeting.
Recollections of the meeting are quite di-
verse. In his meeting with the Board on Janu-
ary 26, 1987, the President said he recalled dis-
cussing a complex Iranian proposal for weap-
ons delivered by the Israelis in installments
prior to the release of the hostages. The Presi-
dent said that Secretary Shultz and Secretary
Weinberger objected to the plan, and that this
was the first time he "noted down" their disap-
proval. The President said that the discussion
at the meeting produced a stalemate.
Secretary Weinberger told the Board he
argued strongly against the complicated arms
and hostages plan, and that he was joined in
his opposition by Secretary Shultz. Mr. Regan
told the Board that he supported the plan. But
notes written that day by the President and
State Department notes of Secretary Shultz's
contemporaneous report of the meeting indi-
cate that Mr. Regan joined Secretary Shultz
and Secretary Weinberger in opposing the
plan. Whatever disagreements were expressed
at the meeting, a consensus emerged that Mr.
McFarlane should go to London and deliver a
message to the Iranians.
? In October, 1985, the United States obtained reliable evi-
dence that William Buckley had died the preceding June.
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No written Presidential decision resulted
from the meeting. Immediately after the meet-
ing, Mr. McFarlane left for London to meet
with Mr. Ghorbanifar and others to discuss the
plan. There is no evidence that Mr. McFarlane
was given any written instructions for the trip.
Mr. McFarlane's message at the London
meeting was that, while the United States
wanted the U.S. hostages released, and would
be interested in better relations with Iran, it
was making no offer of arms. According to a
memorandum written by LtCol North, Mr.
Ghorbanifar refused to transmit this message to
his Iranian contacts, reportedly stating that to
do so would endanger the lives of the hostages.
There appears to be no formal record of the
London meeting.
Mr. McFarlane reported the results of his trip
directly to the President at a meeting held in
the Oval Office on December 10. Once again,
no analytical paper was distributed in advance,
no minutes were kept, and no formal Presiden-
tial decision resulted. The President, Secretary
Weinberger, Director Casey, Chief of Staff
Regan, and VADM Poindexter were present.
Secretary Weinberger has no recollection of
the meeting though Mr. McFarlane recalled
that the Secretary asserted his opposition to
the operation. Secretary Shultz was in Europe,
but his staff reported to him on the meeting
apparently after talking to VADM Poindexter.
Mr. McFarlane reported that an impasse in
the talks developed when he refused to discuss
the transfer of arms to Iran. Mr. McFarlane
also told the Board he recommended against
any further dealings with Mr. Ghorbanifar or
these arms transfers and left government think-
ing the initiative had been discontinued.
The President also noted on December 9
that Mr. McFarlane had returned from London.
He had met with an Iranian agent described as
"a devious character." The President noted
that the Iranian agent had said that Mr. McFar-
lane's message would kill the hostages. The
President told the Board at the meeting on De-
cember 10, Mr. McFarlane expressed no confi-
dence in the Iranian intermediary he met in
London [Mr. Ghorbanifar]. The President
noted that Mr. McFarlane recommended rejec-
tion of the latest plan.8 The President said he
agreed. "I had to."
Mr. Regan told the Board that at the meeting
the President said the United States should try
something else or abandon the whole project.
Mr. Regan also said that the President noted
that it would be another Christmas with hos-
tages still in Beirut, and that he [the President]
was looking powerless and inept because he
was unable to do anything to get the hostages
out.
Director Casey prepared a memorandum of
the meeting dated the same day (December
10). It states that the President "argued mildly"
for letting the Israelis sell the equipment but
without any commitment from the United
States other than replenishment. It reports that
the President was concerned that terminating
the ongoing discussions could lead to early
action against the hostages. Director Casey
ended the memorandum by saying that as the
meeting broke up: "I had the idea that the
President had not entirely given up on encour-
aging the Israelis to carry on with the Iranians.
I suspect he would be willing to run the risk
and take the heat in the future if this will lead
to springing the hostages."
The Arms/Hostages Link Reestablished. The
President was clearly quite concerned about the
hostages. Mr. McFarlane told the Board that
the President inquired almost daily about the
welfare of the hostages. Chief of Staff Regan is
reported to have told reporters on November
14, 1986, that "the President brings up the
hostages at about 90 percent of his briefings."
Mr. Regan is reported to have said that each
morning at the daily intelligence briefing, the
President asked VADM Poindexter: "John, any-
thing new on the hostages?"
The premise of the McFarlane December 7
trip had been to try to break the arms/hostage
link. However, on December 9, LtCol North
submitted to VADM Poindexter a memoran-
dum proposing direct U.S. deliveries of arms to
Iran in exchange for release of the hostages,
using Mr. Secord to.. control Mr. Ghorbanifar
and the delivery operation. The December 9
memorandum raises at least a question as to
whether LtCol North, who accompanied Mr.
McFarlane to the London meeting, fully sup-
s This appears to be the plan discussed at the meeting on De-
cember 7, 1985.
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ported the thrust of McFarlane's instructions in
his own conversations in London with Mr.
Ghorbanifar and others.
During the rest of December, LtCol North,
Mr. Ghorbanifar, Mr. Ledeen, Mr. Secord, and
Mr. Nir met variously among themselves. Again
we know little of the proceedings. It is not
clear who took the lead in developing the arms-
for-hostages proposal that was soon presented
by the Israelis. It is clear, however, that on Jan-
uary 2, 1986, Mr. Nir advanced a proposal just
when the initiative seemed to be dying.
Mr. Nir met with VADM Poindexter in his
office on January 2. Secretary Shultz recalls
being told by VADM Poindexter that Mr. Nir
proposed an exchange of certain Hizballah
prisoners held by Israeli-supported Lebanese
Christian forces, together with 3000 Israeli
TOWs, for the release of the U.S. citizens held
hostage in Beirut. On January 7, 1986, this
proposal was discussed with the President at a
meeting, probably held in the Oval Office, at-
tended by the Vice President, Secretary Shultz,
Secretary Weinberger, Attorney General
Meese, Director Casey, Mr. Regan, and VADM
Poindexter. Although the President apparently
did not make a decision at this meeting, several
of the participants recall leaving the meeting
persuaded that he supported the proposal. Sec-
retary Shultz told the Board that the President,
the Vice-President, Mr. Casey, Mr. Meese, Mr.
Regan, and VADM Poindexter "all had one
opinion and I had a different one and Cap
shared it."
At his meeting with the Board on January 26,
1987, the President said he approved a convo-
luted plan whereby Israel would free 20 Hizbal-
lah prisoners, Israel would sell TOW missiles
to Iran, the five U.S. citizens in Beirut would
be freed, and the kidnappings would stop. A
draft Covert Action Finding had already been
signed by the President the day before the
meeting on January 6, 1986. Mr. Regan told
the Board that the draft Finding may have been
signed in error. The President did not recall
signing the January 6 draft.
The President told the Board that he had
several times asked for assurances that ship-
ments to Iran would not alter the military bal-
ance with Iraq. He did not indicate when this
occurred but stated that he received such assur-
ances. The President also said he was warned
by Secretary Shultz that the arms sales would
undercut U.S. efforts to discourage arms sales
by its allies to Iran.
The President did not amplify those remarks
in his meeting with the Board on February 11.
He did add, however, that no one ever dis-
cussed with him the provision of intelligence to
Iran.
On January 17, a second draft Finding was
submitted to the President. It was identical to
the January 6 Finding but with the addition of
the words "and third parties" to the first sen-
tence.
The President told the Board that he signed
the Finding on January 17. It was presented to
him under cover of a memorandum from
VADM Poindexter of the same date. The Presi-
dent said he was briefed on the contents of the
memorandum but stated that he did not read
it. This is reflected in VADM Poindexter's
handwritten note on the memorandum. That
note also indicates that the Vice President, Mr.
Regan, and Donald Fortier were present for the
briefing.
Although the draft Finding was virtually
identical to that signed by the President on Jan-
uary 6, the cover memorandum signaled a
major change in the Iran initiative. Rather than
accepting the arrangement suggested by Mr.
Nir, the memorandum proposed that the CIA
purchase 4000 TOWs from DoD and, after re-
ceiving payment, transfer them directly to Iran.
Israel would still "make the necessary arrange-
ments" for the transaction.
This was an important change. The United
States became a direct supplier of arms to Iran.
The President told the Board that he under-
stood the plan in this way. That day, President
Reagan wrote in his diary: "I agreed to sell
TOWs to Iran."
It is important to note, however, that this de-
cision was made at a meeting at which neither
Secretary Shultz, Secretary Weinberger, nor Di-
rector Casey were present. Although Secretary
Weinberger and Director Casey had been
present at a meeting with Attorney General
Meese, General Counsel Sporkin, and VADM
Poindexter the preceding day to review the
draft Finding, the new U.S. role does not
appear in the text of the Finding. Attorney
General Meese told the Board he did not recall
any discussion of the implications of this
change. Secretary Weinberger told the Board
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he had no recollection of attending the meet-
ing.
The President made the point to the Board
that arms were not given to Iran but sold, and
that the purpose was to improve the stature
within Iran of particular elements seeking ties
to the Iranian military. The President distin-
guished between selling to someone believed
to be able to exert influence with respect to the
hostages and dealing directly with kidnappers.
The President told the Board that only the
latter would "make it pay" to take hostages.
The President told the Board that he had not
been advised at any time during this period
how the plan would be implemented. He said
he thought that Israeli government officials
would be involved. He assumed that the U.S.
side would be on its guard against people such
as Mr. McFarlane had met in London in early
December. He indicated that Director Casey
had not suggested to him at any time that the
CIA assume operational responsibility for the
initiative, nor was he advised of the downside
risks if the NSC staff ran the operation. He re-
calls understanding at the time that he had a
right to defer notice to Congress, and being
concerned that any leaks would result in the
death of those with whom the United States
sought to deal in Iran.
The January 17 Finding was apparently not
given or shown to key NSC principals. In par-
ticular, Secretary Shultz, Secretary Weinberger,
and Mr. Regan stated that they did not see the
signed Finding until after the Iran initiative
became public. The Finding marked, however,
a major step toward increasingly direct U.S.
participation in, and control over, the Iran initi-
ative.
Stage 6: The NSC Staff Manages
the Operation
In the months that followed the signing of
the January 17th Finding, LtCol North forward-
ed to VADM Poindexter a number of oper-
ational plans for achieving the release of all the
hostages. Each plan involved a direct link be-
tween the release of hostages and the sale of
arms. LtCol North, with the knowledge of
VADM Poindexter and the support of selected
individuals at CIA, directly managed a network
of private individuals in carrying out these
plans. None of the plans, however, achieved
their common objective-the release of all the
hostages.
Plans for "Operation Recovery. " The plan de-
scribed in the cover memorandum to the Janu-
ary 17 Finding called for Israel to arrange for
the sale of 4000 U.S. TOW missiles to Iran.
The memorandum stated that both sides had
agreed that the hostages would be released
"immediately" upon commencement of the op-
eration. It provided, however, that if all the
hostages were not released after the first ship-
ment of 1000 TOWS, further transfers would
cease.
At this point elements of the CIA assumed a
much more direct role in the operation. On
January 18, 1986, VADM Poindexter and LtCol
North met with Clair George, Deputy Director
of Operations at CIA, Stanley Sporkin, CIA
General Counsel and one of the primary au-
thors of the January 17 Finding, the Chief of
the Near East Division with the Operations Di-
rectorate at CIA. They began planning the exe-
cution of the plan. Because of an NSC request
for clearance of Mr. Ghorbanifar, on January
11, 1986, the CIA had administered a poly-
graph test to Mr. Ghorbanifar during a visit to
Washington. Although he failed 'the test, and
despite the unsatisfactory results of the pro-
gram to date, Mr. Ghorbanifar continued to
serve as intermediary. A CIA official recalls Di-
rector Casey concurring in this decision.
On January 24, LtCol North sent to VADM
Poindexter a lengthy memorandum containing
a notional timeline for "Operation Recovery."
The complex plan was to commence January
24 and conclude February 25. It called for the
United States to provide intelligence data to
Iran. Thereafter, Mr. Ghorbanifar was to trans-
fer funds for the purchase of 1000 TOWs to an
Israeli account at Credit Suisse Bank in
Geneva, Switzerland. It provided that these
funds would be transfered to an account in the
same bank controlled by Mr. Secord; that $6
million of that amount would be transferred to
a CIA account in that bank; and that the CIA
would then wire the $6 million to a U.S. De-
partment of Defense account in the United
States.9 The 1000 TOWs would then be trans-
ferred from the DoD to the CIA.
9 The financing of this and the other transactions involved in
the arms sale initiative is covered in the charts annexed to the
end of Appendix B.
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Mr. Secord and his associates, rather than
the CIA, had the more substantial operational
role. He would arrange for the shipment of the
TOWs to Eilat, Israel. From there, an Israeli
707, flown by a crew provided by Mr. Secord,
would deliver the TOWs to Bandar Abbas,
Iran. On the return flight, the aircraft would
stop in Tehran to pick up the HAWK missiles
delivered in November of 1985 but later reject-
ed by Iran. The plan anticipated that the next
day (February 9) all U.S. citizens held hostage
in Beirut would be released to the U.S. embas-
sy there. Thereafter, 3000 more TOWS would
be delivered. The plan anticipated that Kho-
meini would step down on February 11, 1985,
the fifth anniversary of the founding of the Is-
lamic Republic.' 0
Mr. Ghorbanifar's recollection of the terms
of the arrangements are radically different. Mr.
Ghorbanifar stated adamantly that the 1000
TOWs were to reestablish U.S. good faith after
the disasterous November shipment of HAWK
missiles. Mr. Ghorbanifar said there was no
agreement that the U.S. hostages would be re-
leased as a result of the sale.
On February 18, the first 500 TOWs were
delivered to Bandar Abbas, and the HAWK
missiles were brought out. On February 24-27,
LtCol North, a CIA official, Mr. Secord, Mr.
Nir, and Mr. Albert Hakim (a business associate
of Mr. Secord) held a series of meetings in
Frankfurt, Germany with Mr. Ghorbanifar and
other Iranians to review the details of the oper-
ation. On February 27, the second 500 TOWs
were delivered to Bandar Abbas. Although a
hostage release and a later meeting between
senior U.S. and Iranian officials had been
agreed upon at the Frankfurt meeting, the plan
fell through. No hostages were released and
the meeting failed to materialize until much
later.
Although the cover memorandum to the Jan-
uary 17 Finding stated that further arms trans-
fers would cease if all the hostages were not re-
leased after delivery of the first 1000 TOWs,
the United States continued to pursue the initi-
ative and arranged for another delivery of arms
two months later.
Authorization for "Operation Recovery. " LtCol
North appears to have kept VADM Poindexter
10 The Board has found no evidence that would give any cre-
dence to this assumption.
fully advised of the progress of Operation Re-
covery. Director Casey also appears to have
been kept informed both by LtCol North and
by a CIA official. Both LtCol North and VADM
Poindexter were in touch with Mr. McFarlane.
In a message to LtCol North on February 27,
1986, Mr. McFarlane noted that he had just re-
ceived a note from VADM Poindexter asking
whether Mr. McFarlane could undertake the
senior level meeting with the Iranians and indi-
cating that "the President is on board." Mr.
Regan told the Board that the President au-
thorized the shipment of 1000 TOWs during
one of VADM Poindexter's morning briefings
to the President.
Secretary Shultz told the Board that on Feb-
ruary 28, 1986, VADM Poindexter informed
him the hostages would be released the follow-
ing week. Secretary Shultz said VADM Poin-
dexter reported nothing about arms. VADM
Poindexter said that the Iranians wanted a
high-level dialogue covering issues other than
hostages, and that the White House had chosen
Mr. McFarlane for the mission.
Preparation for the May Trip. Preparation for a
meeting between Mr. McFarlane and senior Ira-
nian officials began shortly after LtCol North's
return from Frankfurt on February 27. That
same day, VADM Poindexter met with Director
Casey, Mr. George, and another CIA official to
discuss plans for the meeting. On March 5,
1986, George Cave joined the group. He was a
retired CIA officer who since retirement had
served as a full-time paid consultant to the
agency. He was a Farsi speaker and an expert
on Iran.
LtCol North, Mr. Cave, and a CIA official
met with Mr. Ghorbanifar in Paris on March 8,
1986. LtCol North reported on this conversa-
tion to Mr. McFarlane on March 10. He said he
told Mr. Ghorbanifar that the United States re-
mained interested in a meeting with senior Ira-
nian officials as long as the hostages were re-
leased during or before the meeting. He said
he briefed Mr. Ghorbanifar on the Soviet threat
to Iran using intelligence supplied by Mr.
Robert Gates, then the CIA Deputy Director
for Intelligence. Mr. Ghorbanifar responded by
presenting a list of 240 different types of spare
parts, in various quantities, needed by Iran for
its HAWK missile units. He also emphasized
the importance of an advance meeting in
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Tehran to prepare for the meeting with Mr.
McFarlane. This advance meeting would estab-
lish the agenda and who should participate
from the Iranian side.
While further discussion occurred over the
next month, it resulted in little progress. On
April 3, 1986, Mr. Ghorbanifar arrived in
Washington, D.C. He met with LtCol North,
Mr. Allen, Mr. Cave, and another CIA official
between April 3-4. In a message to Mr. McFar-
lane on April 7, 1986,. LtCol ' North indicated
that, at the request of VADM Poindexter, he
had prepared a paper for "our boss" laying out
the arrangements agreed upon at the meeting.
An unsigned, undated memorandum was
found in LtCol North's files entitled "Release
of American Hostages in Beirut."" It appears
to have been prepared in early April.
In an interview with Attorney General Meese
on November 23, 1986, LtCol North said he
prepared this memorandum between April 4-7.
Although in a form for transmittal by VADM
Poindexter to the President, LtCol North indi-
cated that he did not believe the President had
approved the memorandum.
The memorandum provided for the following
sequence of events:
-On April 9, the CIA would com-
mence procuring $3.641 million worth
of parts for HAWK missile units.
-On April 18, a private U.S. aircraft
would load the parts and fly them to
an Israeli airfield. The parts would
then be transferred to an Israeli mili-
tary aircraft with false markings.
-On April 19, Mr. McFarlane, LtCol
North, Mr. Teicher, Mr. Cave, and a
CIA official would board a CIA aircraft
in Frankfurt en route to Tehran.
-On April 20, they would meet with a
delegation of senior Iranian officials.
Seven hours later, the U.S. hostages
would be released in Beirut. Fifteen
hours later, the Israeli military aircraft
with the HAWK missile parts would
land in Bandar Abbas, Iran.
That schedule was not met. On April 16,
1986, LtCol North wrote VADM Poindexter
' 1 This memorandum also contained a reference to the diver-
sion of funds to the Contras, discussed in Section B of this Part
III.
seeking approval for a meeting with Mr. Ghor-
banifar in Frankfurt on April 18. In his reply of
the same date, VADM Poindexter approved the
trip but insisted that there be no delivery of
parts until all the hostages had been freed. He
expressly ruled out half shipments before re-
lease. "It is either all or nothing." He author-
ized LtCol North to tell Mr. Ghorbanifar: "The
President is getting very annoyed at their con-
tinual stalling." On April 21, VADM Poindexter
sent a message to Mr. McFarlane informing
him of this position.
The Frankfurt meeting was not held. On May
6, 1986, LtCol North and Mr. Cave met with
Mr. Ghorbanifar in London. Mr. Ghorbanifar
promised a meeting with senior Iranian officials
but asked that the U.S. delegation bring all the
HAWK spare parts with them. Mr. Cave recalls
the Americans agreeing that one-quarter of the
spare parts would accompany the delegation.
Notwithstanding, LtCol North informed VADM
Poindexter on May 8: "I believe we have suc-
ceeded. * * * Release of hostages set for week
of 19 May in sequence you have specified."
On May 22, 1986, LtCol North submitted the
final operating plan for the trip to VADM Poin-
dexter. It provided that the McFarlane delega-
tion would arrive in Tehran on May 25, 1986.
The next day (but no later than May 28), the
hostages would be released. One hour later, an
Israeli 707 carrying the balance of the spare
parts would leave Tel Aviv for Tehran.
Authorization for the May Trip. On May 3, 1986,
while at the Tokyo economic summit, Secretary
Shultz received word from the U.S. Ambassa-
dor to London that Mr. Khashoggi, Mr. Ghor-
banifar, and Mr. Nir had sought to interest a
British businessman in the shipment of spare
parts and weapons to Iran. That same day, Sec-
retary Shultz expressed his concern about any
such transaction to Mr. Regan. Secretary Shultz
told the Board that Mr. Regan said he was
alarmed and would talk to the President. Secre-
tary Shultz said he talked later to VADM Poin-
dexter and was told that "that was not our
deal." He recalls being told soon thereafter by
both VADM Poindexter and Director Casey
that the operation had ended and the people
involved had been told ' to "stand down." The
Tokyo Summit closed with a statement from all
the heads of state strongly reaffirming their
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condemnation of international terrorism in all
its forms.
Rodney McDaniel noted that during the na-
tional security briefing on May 12, 1986,
VADM Poindexter discussed with the President
the hostages and Mr. McFarlane's forthcoming
trip.12 The notes indicate that the President di-
rected that the press not be told about the trip.
On May 15, 1986, Mr. McDaniel's notes indi-
cate that the President authorized Mr. McFar-
lane's secret mission to Iran and the Terms of
Reference for that trip. Those notes indicate
that the trip was discussed again with the Presi-
dent on May 21.
On May 17, LtCol North "strongly urged"
that VADM Poindexter include Secretary Shultz
and Secretary Weinberger along with Director
Casey in a "quiet" meeting with the President
and Mr. McFarlane to review the proposed trip.
VADM Poindexter responded, "I don't want a
meeting with RR, Shultz and Weinberger."
The May Trip to Tehran. LtCol North noted in
a message to VADM Poindexter on May 19 that
CIA was providing "comms, beacons, and doc-
umentation for the party." All the other logis-
tics had been arranged through Mr. Secord "or
affiliates." Mr. McFarlane, along with LtCol
North, Mr. Cave, and a CIA official, left the
United States on May 23. Mr. Nir had pressed
to be included in the delegation. The Chief of
the Near East Division in the CIA operations
directorate told the Board that this request was
initially rejected, and that position was trans-
mitted by the White House to Israeli Prime
Minister Peres who appealed it. He said that ul-
timately, the decision was left to Mr. McFar-
lane, who decided to let Mr. Nir join the group.
Mr. Ghorbanifar recalls that in meetings with
Iranian officials, Mr. Nir was always presented
as an American.
On May 25 the delegation arrived in Tehran.
Without the prior knowledge to Mr. McFarlane,
the aircraft carried one pallet of HAWK spare
parts. The delegation was not met by any
senior Iranian officials. No hostages were re-
leased. Because of this, a second plane carrying
the rest of the HAWK spare parts was ordered
not to come to Tehran. Two days of talks
12 Mr. McDaniel became Executive Secretary of the NSC in
February, 1986. Though uninvolved in both the policy and im-
plementation of the Iran initiative, Mr. McDaniel accompanied
VADM Poindexter to his morning briefings of the President as a
note taker.
proved fruitless. The Iranians initially raised
demands for additional concessions, but later
appeared to abandon them. Mr. McFarlane de-
manded the prior release of all hostages and
the Iranians insisted on the immediate delivery
of all HAWK spare parts. On May 27, Mr.
McFarlane demanded the release of the hos-
tages by 6:30 a.m. the next day. When no hos-
tages were released, Mr. McFarlane and his
party departed, but not before the pallet of
HAWK spare parts had been removed from
their aircraft by the Iranians.
In a report to VADM Poindexter on May 26,
Mr. McFarlane stated: "The incompetence of
the Iranian government to do business requires
a rethinking on our part of why there have
been so many frustrating failures to deliver on
their part."
Mr. Ghorbanifar placed blame for the failure
of the May trip squarely on the United States.
Mr. Ghorbanifar said that he had proposed that
he and LtCol North go to Tehran first to pre-
pare the way. But after Mr. Ghorbanifar had
made all the arrangements, LtCol North ad-
vised that VADM Poindexter had disapproved
the trip. The failure to hold this preparatory
meeting may have resulted in substantial mis-
understanding between the two sides as to just
what would occur and be discussed at the
meeting with Mr. McFarlane. Mr. Ghorbanifar
stated that the Iranians failed to meet Mr.
McFarlane's plane because it arrived three
hours ahead of schedule. Mr. Ghorbanifar also
claimed that the delegation did meet with a
senior-level foreign policy advisor.
The Board found evidence that LtCol North,
Mr. Cave, Mr. Allen, and another CIA official
knew as early as mid-April that if all the HAWK
spare parts were not delivered with the delega-
tion, then only one U.S. hostage would be re-
leased. Mr. McFarlane may not have been ad-
vised of this. While in Tehran, he insisted upon
the release of all U.S. hostages prior to more
than the token delivery of HAWK spare parts.
This was apparently his and VADM Poin-
dexter's understanding of the agreed arrange-
ments. This led Mr. McFarlane to refuse an
even better Iranian offer than the one LtCol
North and his associates had reason to expect:
two hostages immediately and the remaining
two after delivery of the rest of the .spare parts.
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Notes made by Mr. McDaniel indicate that on
May 27 the President received a report on the
McFarlane trip. Those notes also indicate that
Mr. McFarlane reported on his trip in person
to the President on May 29. The notes indicate
that the Vice President, Mr. Regan, VADM
Poindexter, Mr. Teicher, and LtCol North also
attended. Mr. McFarlane told the Board, and
the notes confirm, that he told the President
that the program ought to be discontinued. It
was his view that while political meetings might
be considered, there should be no weapons
transfers.
A Hostage Comes Out. Mr. McDaniel's notes in-
dicate that on June 20, 1986, the President de-
cided that no further meeting with the Iranians
would be held until the release of the hostages.
Early in July, LtCol North called Charles Allen,
a CIA official, and asked him to take over the
day-to-day contact with Mr. Nir. LtCol North
wrote in a memorandum to VADM Poindexter
about this same time that he believed he had
"lost face" because of his failure to obtain the
release of an American hostage. Mr. Allen re-
called that Mr. Nir was alarmed at losing direct
contact with LtCol North. Mr. Allen told the
Board that as a result, Mr. Nir worked closely
with Mr. Ghorbanifar to obtain the release of
an American hostage.
Notes made by the NSC Executive Secretary
indicate that on July 18, VADM Poindexter in-
formed the President of the latest communica-
tions with the Iranian interlocutors. On July 21,
LtCol North, Mr. Cave, and Mr. Nir met with
Mr. Ghorbanifar in London. They discussed
the release of the hostages in exchange for the
HAWK spare parts that remained undelivered
from the May mission to Tehran. On July 26,
Father Lawrence Jenco was released.
VADM Poindexter briefed the President on
the Jenco release that same day over a secure
telephone. He used a memorandum prepared
by LtCol North that claimed the release was
"undoubtedly" a result of Mr. McFarlane's trip
in May and the continuing contacts thereafter.
A July 26, 1986 memorandum to VADM Poin-
dexter from Director Casey reached the same
conclusion.
In a memorandum to VADM Poindexter
dated July 29, 1986, LtCol North recommend-
ed that the President approve the immediate
shipment of the rest of the HAWK spare parts
and a follow-up meeting with the Iranians in
Europe. Notes of the NSC Executive Secretary
indicate that the President approved this pro-
posal on July 30. Additional spare parts were
delivered to Tehran on August 3.
Stage 7: The Second Channel Is
Opened But the Initiative Leaks
From the start, U.S. officials had stressed to
Mr. Ghorbanifar that Iran must use its influ-
ence to discourage further acts of terrorism di-
rected against the United States and its citizens.
Whether as a result of those efforts or for some
other reason, from June 9, 1985, until Septem-
ber 9, 1986, no U.S. citizen was seized in Leba-
non.13 But on September 9, 1986, terrorists
seized Frank Reed, a U.S. educator at the Leba-
nese International School. Two more U.S. citi-
zens, Joseph Cicippio and Edward Tracey, were
taken hostage on September 12 and October
21.
The McFarlane mission to Tehran marked
the high-water mark of U.S. efforts to deal with
Iran through Mr. Ghorbanifar. For a year he
had been at the center of the relationship. That
year had been marked by great confusion,
broken promises, and increasing frustration on
the U.S. side. LtCol North and other U.S. offi-
cials apparently blamed these problems more
on Mr. Ghorbanifar than on Iran. The release
of Rev. Jenco did little to mitigate their unhap-
piness.
Sometime in July, 1986, an Iranian living in
London proposed to Mr. Hakim a second Irani-
an channel-the relative of a powerful Iranian
official. On July 25, Mr. Cave went to London
to discuss this possibility. On August 26, 1986,
Mr. Secord and Mr. Hakim met with the second
channel and other Iranians in London. The Ira-
nians said they were aware of the McFarlane
visit, the Israeli connection, and Mr. Ghorbani-
far's role. They referred to Mr. Ghorbanifar as
a "crook." Notes taken by Mr. McDaniel indi-
cate that the President was briefed about the
second channel on September 9, 1986.
LtCol North, Mr. Cave, and a CIA official
met with the second channel and two other Ira-
nians in Washington between September 19
and 21, 1986. The two sides discussed the
Soviet threat, cooperation in support of the
's This excludes two and possibly three dual-national U.S. citi-
zens seized during this period.
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Afghan resistance, and improved relations be-
tween the United States and Iran. The bulk of
the time, however, was spent discussing the
"obstacle'.' of the hostages and Iran's urgent
need (within two months) for both intelligence
and weapons to be used in offensive operations
against Iraq. LtCol North reviewed a list of
military equipment and agreed "in principle"
to provide that equipment, subject to the con-
straints of what was available within the United
States or obtainable from abroad. The parties
discussed the establishment of a secret eight-
man U.S.-Iranian commission to work on future
relations. Finally, LtCol North told the Iranians
that unless contact came from North, Richard
Secord, or George Cave, "there is no official
message from the United States." Notes by Mr.
McDaniel indicate that on September 23, the
President was briefed on recent discussions
with the second channel.
On October 5-7, 1986, LtCol North, Mr.
Cave, and Mr. Secord met with the second
channel in Frankfurt, Germany. They carried a
Bible for the Iranians inscribed by the Presi-
dent on October 3. During the meeting, LtCol
North misrepresented his access to the Presi-
dent and attributed to the President things the
President never said.
In presenting the Bible, LtCol North related
the following story to the Iranians:
"We inside our Government had an
enormous debate, a very angry debate
inside our government over whether
or not my president should authorize
me to say "We accept the Islamic Rev-
olution of Iran as a fact * * *." He
[the President] went off one whole
weekend and prayed about what the
answer should be and he came back
almost a year ago with that passage I
gave you that he wrote in front of the
Bible I gave you. And he said to me,
"This is a promise that God gave to
Abraham. Who am I to say that we
should not do this?"
In reality, the idea of the Bible and the
choice of the inscription were contained in an
October 2, 1986, memorandum from LtCol
North to VADM Poindexter. The Bible was to
be exchanged for a Koran at the October 5-7
meeting. VADM Poindexter approved the idea
and the President inscribed the Bible the next
morning. The President told the Board that he
did inscribe the Bible because VADM Poin-
dexter told him this was a favorite passage with
one of the people with whom the U.S. was
dealing in Iran. The President said he made the
inscription to show the recipient that he was
"getting through."
At two points during the October 5-7 Frank-
furt meetings, LtCol North told two stories of
private discussions with the President at Camp
David. The first had the President saying that
he wanted an end to the Iran/Iraq war on
terms acceptable to Iran. The second had the
President saying that the Gulf states had to be
convinced that it was Saddam Husain of Iraq
that was "causing the problem."
When pressed by the Iranians for an explicit
statement of what the United States means by
"an honorable victory" for Iran, LtCol North
replied: "We also recognize that Saddam
Husain must go."
The President emphasized to the Board that
these statements are an "absolute fiction" and
that there were no meetings as LtCol North de-
scribes. In addition, Mr. McDaniel noted that
on October 3, 1986, the President reaffirmed
that the United States wanted neither Iran or
Iraq to win the war.
At the October 5-7 meeting, LtCol North
laid out a seven-step proposal for the provision
of weapons and other items in exchange for
Iranian influence to secure the release of all re-
maining U.S. hostages, the body of William
Buckley, a debrief by his captors, and the re-
lease of John Pattis, a United States citizen
whom the Iranians had arrested on spying
charges several months earlier. The Iranians
presented a six-point counter-proposal that, in
part, promised the release of one hostage fol-
lowing receipt of additional HAWK parts and a
timetable for future delivery of intelligence in-
formation. The Iranians made clear that they
could not secure the release of all the hostages.
Mr. Cave recalls that the Iranians proposed ex-
changing 500 TOWs for the release of two hos-
tages. He stated that the U.S. side agreed.
A second meeting was held in Frankfurt on
October 26-28 at which the parties finalized
the payment and delivery schedule for the
TOWs. At that meeting, the parties apparently
discussed a nine-point U.S. agenda with Iran.
That agenda included delivery by the U.S. of
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the 500 TOWs, an unspecified number of
HAWKs, discussion of the 17 Da'Wa prisoners
held by Kuwait, additional arms including 1000
more TOWs, and military intelligence. In ex-
change the Iranians promised release of one
and perhaps two U.S. citizens held hostage in
Beirut and "further efforts to create the condi-
tion for release of other hostages."
At a meeting between representatives of the
State Department and the second channel on
December 13, 1986, the Iranian said that both
sides had agreed to this nine-point agenda.
The Board found no evidence that LtCol North
had authority to agree to such an agenda. Sec-
retary Shultz told the Board that he informed
the President the next day. He said that the
President was "stricken" and could not believe
anything like this had been discussed. Of par-
ticular concern was the point that the United
States had consistently given strong support to
Kuwait in resisting terrorist demands for the
release of the Da'Wa prisoners.
At the October 26-28 meeting, the Iranian
participants said the story of the McFarlane
mission to Tehran had been published in a
small Hezbollah newspaper in Baalbek, Leba-
non. The article was based on a series of leaf-
lets distributed in Tehran on 15 or 16 October.
Mr. Regan recalls the President authorizing
the shipment of 500 TOWs on October 29,
1986.
Because of a delay in the transfer of funds
the TOWs actually delivered to Iran on Octo-
ber 29, 1986, were Israeli TOWs. The 500 U.S.
TOWs were provided to Israel as replacements
on November 7.
On November 2, hostage David Jacobsen was
released. The next day, a pro-Syrian Beirut
magazine published the story of the McFarlane
mission. On November 4, Majlis Speaker Raf-
sanjani publicly announced the mission.
The President, VADM Poindexter, and LtCol
North hoped that more hostages would be re-
leased. Notes taken by the NSC Executive Sec-
retary indicate that on November 7, 1986, the
President decided not - to respond to questions
on this subject for fear of jeopardizing the re-
maining hostages. No further hostages were re-
leased.
Mr. Ghorbanifar told the Board that the
switch to the second channel was a major error.
He claimed that he had involved all three
major lines or factions within the government
of Iran in the initiative, and that the second
channel involved only the Rafsanjani faction
thus stimulating friction among the factions
and leading to the leak of the story to embar-
rass Rafsanjani. In addition, the price offered
to this faction was lower ($8000 per TOW)
than the price charged for the earlier TOW de-
liveries ($10000 per TOW). .
Section B: Contra Diversion
Sizable sums of money generated by the
arms sales to Iran remain unaccounted for. De-
termining whether these funds from the sale of
arms to Iran were diverted to support the Con-
tras proved to be extremely difficult. VADM
Poindexter, LtCol North, Israeli participants,
and other key witnesses refused to appear
before the Board, and records for relevant
bank accounts maintained in Switzerland and
elsewhere could not be obtained by the Board.
Notwithstanding, there was considerable evi-
dence before the Board of a diversion to sup-
port the Contras. But the Board had no hard
proof.
Early in 1986, the need to find funds for the
support of the Contras was desperate. At the
same time, the idea of diverting funds from the
arms sales to Iran surfaced. Attorney General
Meese told the Board that VADM Poindexter
and LtCol North both told him that a diversion
had occurred.
Money Was Available. Israel made three arms
deliveries to Iran in 1985. One of these was the
November shipment of HAWK missiles. After
the November deal collapsed, 17 of the 18
HAWK missiles were returned to Israel and
available evidence suggests that all of the
money for that shipment was returned or cred-
ited to Iran. In the case of the TOW shipments
in August and September 1985, the price
charged to Iran by Israel was far in excess of
what Israel paid the U.S. Department of De-
fense to replenish the arms it delivered. This
excess amount was roughly $3 million for the
August/September TOW shipments. Nothing is
known by the Board about the disposition of
those funds.
The United States directly managed four
arms deliveries in 1986. In each case, the pur-
chase money was deposited in Swiss bank ac-
counts held in the name of Lake Resources and
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under the control of Richard Secord. Again,
the price charged to Iran was far in excess of
what was paid to the Department of Defense
for the arms. The excess amounts totaled
almost $20 million for the four deliveries: $6.3
million for the February shipment of TOWs,
$8.5 million for the May and August shipments
of HAWK parts, and $5 million for the October
shipment of TOWs.14
Most of these monies remain unaccounted
for. Mr. Khashoggi and other investors claim
they are still owed $10 million from these
transactions.
The Contras Desperately Needed Funds. In Janu-
ary, 1986, the President requested $100 million
in military aid to the Contras. The request re-
vived the often bitter Congressional debate
over whether the United States should support
the Contras. The obligational authority for the
$27 million in humanitarian aid to the Contras
approved by the Congress in 1985 would
expire on March 31, 1986. LtCol North, who
had primary NSC staff responsibility for mat-
ters relating to the Contras, became increasing-
ly concerned. While anticipating Congressional
approval of the President's January 1 request,
LtCol North feared the Contras would run out
of funds before then. On April 22, 1986, he
wrote Mr. Fortier: "[T]he picture is dismal
unless a new source of `bridge' funding can be
identified * * *. We need to explore this prob-
lem urgently or there won't be a force to help
when the Congress finally acts."
A Diversion Was Suggested. It is unclear who
first suggested the idea of diverting funds from
the arms sales to Iran to support the Contras.
The evidence suggests that the idea surfaced
early in 1986.
Attorney General Meese told the Board that
during his interview with LtCol North on No-
vember 23, 1986, North indicated that the idea
surfaced during a discussion with Mr. Nir in
January, 1986, about ways Israel could help the
Contras. LtCol North recalled the Israeli offi-
cial suggesting that the "residuals" from the
Iran arms sales be transferred to the Contras.
Contemporaneous Justice Department notes of
the November interview indicate that LtCol
North said the diversion was an Israeli idea;
that the Israelis wanted to be helpful.
"'Charts describing the various arms sales transactions in-
volved in the initiative are annexed to Appendix B.
Mr. Ghorbanifar told the Board that he had a
conversation with LtCol North and Mr. Secord
sometime in February of 1986 concerning ar-
rangements for the upcoming delivery of 1000
TOW missiles to Iran. He said that LtCol
North and Mr. Secord were extremely worried
about a shortfall in funding for the Contras.
Mr. Ghorbanifar said that LtCol North asked
him if the Iranians would pay $10,000 per
TOW missile, instead of $6,500. When told
that Iran would pay that price, Mr. Ghorbanifar
said LtCol North was greatly relieved-"he was
a changed man."
In a memorandum of a meeting with Mr.
Ghorbanifar in Paris on March 7-8, George
Cave reported. that Mr. Ghorbanifar, in an
aside, "proposed that we use profits from these
deals and others to fund support to the rebels
in Afghanistan. We could do the same with
Nicaragua."
Before the Board, Mr. Cave said that neither
he nor Mr. Ghorbanifar made any mention of
diversion.
North and Poindexter Said Diversion Occurred. At-
torney General Meese told the Board that
during his interview with LtCol North on No-
vember 23, 1986, North said that $3 to $4 mil-
lion was diverted to the support of the Contras
after the February shipment of TOW missiles
and that more (though how much LtCol North
was not sure) was diverted after the May ship-
ment of HAWK parts. Contemporaneous Jus-
tice Department staff notes of that interview in-
dicate that LtCol North said that the Israelis
handled the money and that he gave them the
numbers of three accounts opened in Switzer-
land by Adolpho Calero, a Contra leader. The
notes also indicate that LtCol North said there
was no money for the Contras as a result of the
shipment in October, 1986. By then Congres-
sional funding had resumed.
Mr. McFarlane testified that while standing
on the tarmac at a Tel Aviv airport after the
trip to Tehran in May of 1986, LtCol North
told him not to be too downhearted because
"this government is availing itself of part of the
money [from the Iran initiative] for application
to Central America." Assistant Secretary of De-
fense Richard Armitage told the Board that
North told him sometime in November of 1986
that: "it's going to be just fine * * * as soon as
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everyone knows that * * * the Ayatollah is
helping us with the Contras."
Authorization. It is unclear whether LtCol
North ever sought or received prior approval
of any diversion of funds to the support of the
Contras. LtCol North prepared in early April
an unsigned memorandum entitled "Release of
American Hostages in Beirut," which sought
Presidential approval for what became Mr.
McFarlane's May trip to Tehran. In that memo,
LtCol North stated that $12 million in "residu-
al" funds from the transaction would "be used
to purchase critically needed supplies for the
Nicaraguan Democratic Resistance Forces." No
evidence has emerged to suggest that this
memorandum was ever placed before VADM
Poindexter, the President, or any other U.S. of-
ficial.
As a general matter, LtCol North kept
VADM Poindexter exhaustively informed about
his activities with respect to the Iran initiative.
Although the Board did not find a specific
communication from Lt. Col North to VADM
Poindexter on the diversion question, VADM
Poindexter said that he knew that a diversion
had occurred. Mr. Regan told the Board that
he asked VADM Poindexter on November 24,
1986, if he knew of LtCol North's role in a di-
version of funds to support the Contras. VADM
Poindexter replied that, "I had a feeling that
something bad was going on, but I didn't in-
vestigate it and I didn't do a thing about it.
* * * I really didn't want to know. ' I was so
damned mad at Tip O'Neill for the way he was
dragging the Contras around I didn't want to
know what, if anything, was going on. I should
have, but I didn't." Attorney General Meese
told the Board that after talking to LtCol
North, he asked VADM Poindexter what he
knew about the diversion. "He said that he did
know about it * * * Ollie North had given him
enough hints that he knew what was going on,
but he didn't want to look further into it. But
that he in fact did generally know that money
had gone to the Contras as a result of the Iran
shipment."
The President said he had no knowledge of
the diversion prior to his conversation with At-
torney General Meese on November 25, 1986.
No evidence has come to light to suggest oth-
erwise. Contemporaneous Justice Department
staff notes of LtCol North's interview with At-
torney General Meese on November 23, 1986,
show North telling the Attorney General that
only he, Mr. McFarlane, and VADM Poindexter
were aware of the diversion.
Section C: The NSC Staff
and Support for the Contras
Inquiry into the arms sale to Iran and the
possible diversion of funds to the Contras dis-
closed evidence of substantial NSC staff in-
volvement in a related area; private support for
the Contras during the period that support
from the U.S. Government was either banned
or restricted by Congress.
There are similarities in the two cases.
Indeed, the NSC staffs role in support for the
Contras set the stage for its subsequent role in
the Iran initiative. In both, LtCol North, with
the acquiescence of the National Security Advi-
sor, was deeply involved in the operational de-
tails of a covert program. He relied heavily on
private U.S. citizens and foreigners to carry out
key operational tasks. Some of the same indi-
viduals were involved in both. When Israeli
plans for the November HAWK shipment
began to unravel, LtCol North turned to the
private network that was already in place to run
the Contra support operation. This network,
under the direction of Mr. Secord, undertook
increasing responsibility for the Iran initiative.
Neither program was subjected to rigorous and
periodic inter-agency overview. In neither case
was Congress informed. In the case of Contra
support, Congress may have been actively
misled.
These two operations also differ in several
key aspects. While Iran policy was the subject
of strong disagreement within the Executive
Branch, the President's emphatic support for
the Contras provoked an often bitter debate
with the Congress. The result was an intense
political struggle between the President and the
Congress over how to define U.S. policy
toward Nicaragua. Congress sought to restrict
the President's ability to implement his policy.
What emerged was a highly ambiguous legal
environment.
On December 21, 1982, Congress passed the
first "Boland amendment" prohibiting the De-
partment of Defense and , the Central Intelli-
gence Agency from spending funds to over-
throw Nicaragua or provoke conflict between
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Nicaragua and Honduras. The following year,
$24 million was authorized for the Contras. On
October 3, 1984, Congress cut off all funding
for the Contras and prohibited DoD, CIA, and
any other agency or entity "involved in intelli-
gence activities" from directly or indirectly sup-
porting military operations in Nicaragua.
The 1984 prohibition was subject to conflict-
ing interpretation. On the one hand, several of
its Congressional supporters believed that the
legislation covered the activities of the NSC
staff. On the other hand, it appears that LtCol
North and VADM Poindexter received legal
advice from the President's Intelligence Over-
sight Board that the restrictions on lethal as-
sistance to the Contras did not cover the NSC
staff.
Confusion only increased. In December 1985
Congress approved classified amounts of funds
to the Contras for "communications" and
"advice." The authorization was subject, how-
ever, to a classified annex negotiated by the
Senate and House intelligence committees. An
exchange of letters, initiated the day the law
passed, evidences the extreme difficulty even
the Chairmen of the two committees had in de-
ciding what the annex permitted or proscribed.
The support for the Contras differs from the
Iranian initiative in some other important re-
spects. First, the activities undertaken by LtCol
North with respect to the Contras, unlike in the
Iranian case, were in support of the declared
policy of at least the Executive. Second, the
President may never have authorized or,
indeed, even been apprised of what the NSC
staff was doing. The President never issued a
Covert Action Finding or any other formal de-
cision authorizing NSC staff activities in sup-
port of the Contras. Third, the NSC staff's role
in support of the Contras was not in deroga-
tion of the CIA's role because, CIA involve-
ment was expressly barred by statute.
The Board had neither the time nor the re-
sources to conduct a full inquiry into the role
of the NSC staff in the support of the Contras
that was commensurate with its work on the
Iran arms sales. As a consequence, the evi-
dence assembled by the Board was somewhat
anecdotal and disconnected. The most signifi-
cant evidence is summarized in this Section C.
A fuller treatment is contained in Appendix C.
The Bid for Private Funding. Because of Con-
gressional restrictions, the Executive Branch
turned to private sources to sustain the Contras
militarily. In 1985 and 1986, Mr. McFarlane
and the NSC staff repeatedly denied any direct
involvement in efforts to obtain funds from
these sources. Yet evidence before the Board
suggests that LtCol North was well aware of
these efforts and played a role in coordinating
them. The extent of that role remains unclear.
In a memorandum to Mr. McFarlane dated
April 11, 1985, LtCol North expressed concern
that remaining Contra funds would soon be in-
sufficient. He advised that efforts be made to
seek $15 to $20 million in additional funds
from the current donors which will "allow the
force to grow to 30-35,000." The exact pur-
pose to which these private funds were to be
put was unambiguous. A number of memoran-
da from LtCol North make clear that the funds
were for munitions and lethal aid.
Asked by the Board about the source of such
funds, Mr. McFarlane provided a written re-
sponse that indicated that "without solicita-
tion" a foreign official offered $1 million a
month from what he described as "personal
funds." At Mr. McFarlane's request, LtCol
North provided the numbers of a Contra bank
account in Miami. Mr. McFarlane wrote that in
1985, the foreign official doubled his contribu-
tion to $2 million a month, a fact confirmed by
two other U.S. officials.
Contributions appear to have been channeled
through a series of non-profit organizations
that LtCol North apparently had a hand in or-
ganizing. A diagram found in LtCol North's
safe links some of these organizations to bank
accounts controlled by Richard Secord and
others known to be involved in purchasing and
shipping arms to the Contras.
Other documents and evidence suggest that
private contributions for the Contras were
eventually funnelled into "Project Democra-
cy," 15 a term apparently used by LtCol North
"'We have no information linking the activities described
herein as "Project Democracy" with the National Endowment for
Democracy (NED). The latter was created in 1983 by Congres-
sional act and is funded by legislation. Its purpose is to strength-
en democratic institutions around the world through private,
non-governmental efforts. NED grew out of an earlier Adminis-
tration public initiative to promote democracy around the world,
which came to be known as "Project Democracy". It appears that
North later adopted the term to refer to his own covert oper-
ations network. We believe this is the only link between the NED
and North's activities.
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to describe a network of secret bank accounts
and individuals involved in Contra resupply
and other activities. In a message to VADM
Poindexter dated July 15, 1986, LtCol North
described "Project Democracy" assets as worth
over $4.5 million. They included six aircraft,
warehouses, supplies, maintenance facilities,
ships, boats, leased houses, vehicles, ordnance,
munitions, communications equipment, and a
6520-foot runway. The runway was in fact a
secret airfield in Costa Rica. LtCol North indi-
cated in a memorandum dated September 30,
1986, that the airfield was used for direct re-
supply of the Contras from July 1985 to Febru-
ary 1986, and thereafter as the primary abort
base for damaged aircraft.
On September 9, 1986, following Costa
Rica's decision to close the airfield, LtCol
North received word that the Costa Rican gov-
ernment was planning to call a press confer-
ence to announce the existence of the airfield.
The same day, LtCol North informed VADM
Poindexter that he had held a conference call
with then U.S. Ambassador to Costa Rica,
Louis Tambs, and Assistant Secretary Elliott
Abrams to discuss the potential public revela-
tion of the airfield. All three participants con-
firm the conference. North said that they had
decided North would call Costa Rican President
Arias and tell him if the press conference went
forward the U.S. would cancel $80 million in
promised A.I.D. assistance and Arias' upcoming
visit with President Reagan. North added that
both Ambassador Tambs and Assistant Secre-
tary Abrams reinforced this message with Arias.
VADM Poindexter replied: "You did the right
thing, but let's try to keep it quiet."
Assistant Secretary Abrams and Ambassador
Tambs told the Board that the conference call
took place, but only Tambs was instructed to
call Arias and that no threat to withhold U.S.
assistance was made. They each doubted that
North ever called the President of Costa Rica
on this matter. The Costa Rican Government
later announced the discovery and closure of
the airfield.
Coordinating the Resupply Operation. The CIA
Headquarters instructed its field stations to
"cease and desist" with action which can be
construed to be providing any type of support
either direct or indirect to the various entities
with whom we dealt under the program. The
Chief of the CIA Central American Task Force
added that in other respects the interagency
process on Central America was in disarray in
October 1984 and that "it was Ollie North who
then moved into -that void and was the focal
point for the Administration on Central Ameri-
can policy until fall 1985."
As early as April 1985, LtCol North main-
tained detailed records of expenditures for
Contra military equipment, supplies, and oper-
ations. On April 11, 1985, LtCol North sent a
memorandum to Mr. McFarlane describing two
sealifts and two airlifts "[a]s of April 9, 1985."
The memorandum set out the kind of munition
purchased, the quantity, and in some instances
the cost. LtCol North also noted that from July
1984 to April 9, 1985: "$17,145,594 has been
expended for arms, munitions, combat oper-
ations, and support activities."
Evidence suggests that at least by November
1985, LtCol North had assumed a direct oper-
ational role, coordinating logistical arrange-
ments to ship privately purchased arms to the
Contras. In a note to Poindexter on November
22, 1985, he described a prospective delivery as
"our first direct flight (of ammo) to the resist-
ance field [in] Nicaragua." This shipment was
delayed when Mr. Secord was asked to use the
aircraft instead to deliver the 18 HAWK mis-
siles to Iran in November, 1985.
In 1986, North established a private secure
communications network. North received 15
encryption devices from the National Security
Agency from January to March 1986, provided
in support of his counter-terrorist activities.
One was provided to Mr. Secord and another,
through a private citizen, to a CIA field officer
posted in Central America. Through this mech-
anism, North coordinated the resupply of the
Contras with military equipment apparently
purchased with funds provided by the network
of private benefactors. The messages to LtCol
North from Mr. Secord and the CIA officer: (a)
asked him to direct where and when to make
Contra munitions drops; (b) informed him of
arms requirements; and (c) apprised him of
payments, balances, and deficits.
At least nine arms shipments were coordinat-
ed through this channel from March through
June, 1986. The CIA field officer in Costa Rica
outlined his involvement in the resupply net-
work and described the shipments: "This was
all lethal. Benefactors only sent lethal stuff."
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The CIA officer added that the private benefac-
tor operation was, according to his understand-
ing, controlled by LtCol North.
' Mr. Secord was in charge of arranging the
actual deliveries, using at least in part Southern
Air Transport ("SAT"). Assistant Commission-
er William Rosenblatt told the Board that
LtCol North contacted him after a SAT C-123
aircraft crashed in Nicaragua, prompting a Cus-
toms investigation. North. told him that the
Customs investigation was focused on "good
guys" who committed "no crimes." The Cus-
toms Service then narrowed the investigation
to the specific aircraft involved in the crash
rather than on the activities of the whole com-
pany. U.S. Customs Commissioner William von
Rabb said that LtCol North had previously con-
tacted him to complain that Custom's agents
were conducting an investigation involving a
Maule aircraft. A former CIA officer in Central
America said that at least one Maule aircraft
was used in support of the Contra forces. Mr.
Rosenblatt and Mr. von Raab told the Board
that LtCol North never asked them to close out
their investigations. The Board obtained evi-
dence that at least one Maule aircraft was used
in Contra military operations. This evidence
was referred to the. Independent Counsel._
Authorization. The evidence before the Board
contained no record that LtCol North's role to
support the Contras.- was formally authorized. It
appears, however, that LtCol North did keep
the National Security Advisor informed, first
Mr. McFarlane and then VADM Poindexter. It
is not clear to what extent other NSC principals
or their departments were informed. On May
15, 1986, VADM Poindexter cautioned North:
"From now on, I don't want you to talk to any-
body else, including Casey, except me about
any of your operational roles."
The President told the Board on January 26,
1987, that he did not know that the NSC staff
was engaged in helping the Contras. The
Board is aware of no evidence to suggest that
the President was aware of LtCol North's activi-
ties.
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What Was Wrong
The arms transfers to Iran and the activities
of the NSC staff in support of the Contras are
case studies in the perils of policy pursued out-
side the constraints of orderly process.
The Iran initiative ran directly counter to the
Administration's own policies on terrorism, the
Iran/Iraq war, and military support to Iran.
This inconsistency was never resolved, nor
were the consequences of this inconsistency
fully considered and provided for. The result
taken as a whole was a U.S. policy that worked
against itself.
The Board believes that failure to deal ade-
quately with these contradictions resulted in
large part from the flaws in the manner in
which decisions were made. Established proce-
dures for making national security decisions
were ignored. Reviews of the initiative by all
the NSC principals were too infrequent. The
initiatives were not adequately vetted below the
cabinet level. Intelligence resources were un-
derutilized. Applicable legal constraints were
not adequately addressed. The whole matter
was handled too informally, without adequate
written records of what had been considered,
discussed, and decided.
This pattern persisted in the implementation
of the Iran initiative. The NSC staff assumed
direct operational control. The initiative fell
within the traditional jurisdictions of the De-
partments of State, Defense, and CIA. Yet
these agencies were largely ignored. Great reli-
ance was placed on a network of private opera-
tors and intermediaries. How the initiative was
to be carried out never received adequate at-
tention from the NSC principals or a tough
working-level review. No periodic evaluation of
the progress of the initiative was ever conduct-
ed. The result was an unprofessional and, in
substantial part, unsatisfactory operation.
In all of this process, Congress was never no-
tified.
As noted in Part III, the record of the role of
the NSC staff in support of the Contras is
much less complete. Nonetheless, what is
known suggests that many of the same prob-
lems plagued that effort as well.
The first section of this Part IV discusses the
flaws in the process by which conflicting poli-
cies were considered, decisions were made, and
the initiatives were implemented.
The second section discusses the responsibil-
ity of the NSC principals and other key national
security officials for the manner in which these
initiatives were handled.
The third section discusses the special prob-
lem posed by the role of the Israelis.
The fourth section of this Part IV outlines
the Board's conclusions about the management
of the initial public presentation of the facts of
the Iran initiative.
A. A Flawed Process
1. Contradictory Policies Were Pursued. -The
arms sales to Iran and the NSC support for the
Contras demonstrate the risks involved when
highly controversial initiatives are pursued cov-
ertly.
Arms Transfers to Iran.-The initiative to Iran
was a covert operation directly at odds with im-
portant and well-publicized policies of the Ex-
ecutive Branch. But the initiative itself em-
bodied a fundamental contradiction. Two ob-
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jectives were apparent from the outset: a strate-
gic opening to Iran, and release of the U.S. citi-
zens held hostage in Lebanon. The sale of
arms to Iran appeared to provide a means to
achieve both these objectives. It also played
into the hands of those who had other inter-
ests-some of them personal financial gain-in
engaging the United States in an arms deal
with Iran.
In fact, the sale of arms was not equally ap-
propriate for achieving both these objectives.
Arms were what Iran wanted. If all the United
States sought was to free the hostages, then an
arms-for-hostages deal could achieve the imme-
diate objectives of both sides. But if the U.S.
objective was a broader strategic relationship,
then the sale of arms should have been contin-
gent upon first putting into place the elements
of that relationship. An arms-for-hostages deal
in this context could become counter-produc-
tive to achieving this broader strategic objec-
tive. In addition, release of the hostages would
require exerting influence with Hizballah,
which could involve the most radical elements
of the Iranian regime. The kind of strategic
opening sought by the United States, however,
involved what were regarded as more moderate
elements.
The U.S. officials involved in the initiative
appeared to have held three distinct views. For
some, the principal motivation seemed consist-
ently a strategic opening to Iran. For others,
the strategic opening became a rationale for
using arms sales to obtain the release of the
hostages. For still others, the initiative ap-
peared clearly as an arms-for-hostages deal
from first to last.
Whatever the intent, almost from the begin-
ning the initiative became in fact a series of
arms-for-hostages deals. The shipment of arms
in November, 1985, was directly tied to a hos-
tage release. Indeed, the August/September
t?ansfer may have been nothing more than an
arms-for-hostages trade. By July 14, 1985, a
specific proposal for the sale of 100 TOWs to
Iran in exchange for Iranian efforts to secure
the release of all the hostages had been trans-
mitted to the White House and discussed with
the President. What actually occurred, at least
so far as the September shipment was con-
cerned, involved a direct link of arms and a
hostage.
The ' initiative continued to be described in
terms of its broader strategic relationship. But
those elements never really materialized. While
a high-level meeting among senior U.S. and
Iranian officials continued to be a subject of
discussion, it never occurred. Although Mr.
McFarlane went to Tehran in May of 1986, the
promised high-level Iranians never appeared.
In discussions among U.S. officials, the focus
seemed to be on the prospects for obtaining
release of the hostages, not on a strategic rela-
tionship. Even if one accepts the explanation
that arms and hostages represented only "bona
fides" of seriousness of purpose for each side,
that had clearly been established, one way or
another, by the September exchange.
It is true that, strictly speaking, arms were
not exchanged for the hostages. The arms were
sold for cash; and to Iran, rather than the ter-
rorists holding the hostages. Iran clearly
wanted to buy the arms, however, and time and
time again U.S. willingness to sell was directly
conditioned upon the release of hostages. Al-
though Iran might claim that it did not itself
hold the hostages, the whole arrangement was
premised on Iran's ability to secure their re-
lease.
While the United States was seeking the re-
lease of the hostages in this way, it was vigor-
ously pursuing policies that were dramatically
opposed to such efforts. The Reagan Adminis-
tration in particular had come into office de-
claring a firm stand against terrorism, which it
continued to maintain. In December of 1985,
the Administration completed a major study
under the chairmanship of the Vice President.
It resulted in a vigorous reaffirmation of U.S.
opposition to terrorism in all its forms and a
vow of total war on terrorism whatever its
source. The Administration continued to pres-
sure U.S. allies not to sell arms to Iran and not
to make concessions to terrorists.
No serious effort was made to reconcile the
inconsistency between these policies and the
Iran initiative. No effort was made systematical-
ly to address the consequences of this incon-
sistency-the effect on U.S. policy when, as it
inevitably would, the Iran initiative became
known.
The Board believes that a strategic opening
to Iran may have been in the national interest
but that the United States never should have
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been a party to the arms transfers. As arms-for-
hostages trades, they could not help but create
an incentive for further hostage-taking. As a
violation of the U.S. arms embargo, they could
only remove inhibitions on other nations from
selling arms to Iran. This threatened to upset
the military balance between Iran and Iraq,
with consequent jeopardy to the Gulf States
and the interests of the West in that region.
The arms-for-hostages trades rewarded a
regime that clearly supported terrorism and
hostage-taking. They increased the risk that the
United States would be perceived, especially in
the Arab world, as a creature of Israel. They
suggested to other U.S. allies and friends in the
region that the United States had shifted its
policy in favor of Iran. They raised questions as
to whether U.S. policy statements could be
relied upon.
As the arms-for-hostages proposal first came
to the United States, it clearly was tempting.
The sale of just 100 TOWs was to produce the
release of all seven Americans held in Lebanon.
Even had the offer been genuine, it would have
been unsound. But it was not genuine. The 100
TOWs did not produce seven hostages. Very
quickly the price went up, and the arrange-
ments became protracted. A pattern of succes-
sive bargained exchanges of arms and hostages
was quickly established. While release of all the
hostages continued to be promised, in fact the
hostages came out singly if at all. This sad his-
tory is powerful evidence of why the United
States should never have become involved in
the arms transfers.
NCS Staff Support for the Contras.-The activi-
ties of the NSC staff in support of the Contras
sought to achieve an important objective of the
Administration's foreign policy. The President
had publicly and emphatically declared his sup-
port for the Nicaragua resistance. That brought
his policy in direct conflict with that of the
Congress, at least during the period that direct
or indirect support of military operations in
Nicaragua was barred.
Although the evidence before the Board is
limited, no serious effort appears to have been
made to come to grips with the risks to the
President of direct NSC support for the Con-
tras in the face of these Congressional restric-
tions. Even if it could be argued that these re-
strictions did not technically apply to the NSC
staff, these activities presented great political
risk to the President. The appearance of the
President's personal staff doing what Congress
had forbade other agencies to do could, once
disclosed, only touch off a firestorm in the
Congress and threaten the Administration's
whole policy on the Contras.
2. The Decision-making Process Was Flawed. -Be-
cause the arms sales to Iran and the NSC sup-
port for the Contras occurred in settings of
such controversy, one would expect that the
decisions to undertake these activities would
have been made only after intense and thor-
ough consideration. In fact, a far different pic-
ture emerges.
Arms Transfers to Iran.-The Iran initiative was
handled almost casually and through informal
channels, always apparently with an expectation
that the process would end with the next arms-
for-hostages exchange. It was subjected neither
to the general procedures for interagency con-
sideration and review of policy issues nor the
more restrictive procedures set out in NSDD
159 for handling covert operations. This had a
number of consequences.
(i) The Opportunity for a Full Hearing before the
President Was Inadequate.-In the last half of
1985, the Israelis made three separate propos-
als to the United States with respect to the Iran
initiative (two in July and one in August). In
addition, Israel made three separate deliveries
of arms to Iran, one each in August, Septem-
ber, and November. Yet prior to December 7,
1985, there was at most one meeting of the
NSC principals, a meeting which several partici-
pants recall taking place on August 6. There is
no dispute that full meetings of the principals
did occur on December 7, 1985, and on Janu-
ary 7, 1986. But the proposal to shift to direct
U.S. arms sales to Iran appears not to have
been discussed until later. It was considered by
the President at a meeting on January 17 which
only the Vice President, Mr. Regan, Mr. For-
tier, and VADM Poindexter attended. Thereaf-
ter, the only senior-level review the Iran initia-
tive received was during one or another of the
President's daily national security briefings.
These were routinely attended only by the
President, the Vice President, Mr. Regan, and
VADM Poindexter. There was no subsequent
collective consideration of the Iran initiative by
the NSC principals before it became public 11
months later.
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This was not sufficient for a matter as impor-
tant and consequential as the Iran initiative.
Two or three cabinet-level reviews in a period
of 17 months was not enough. The meeting on
December 7 came late in the day, after the pat-
tern of arms-for-hostages exchanges had
become well established. The January 7 meet-
ing had earmarks of a meeting held after a de-
cision had already been made. Indeed, a draft
Covert Action Finding authorizing the initiative
had been signed by the President, though per-
haps inadvertently, the previous day.
At each significant step in the Iran initiative,
deliberations among the NSC principals in the
presence of the President should have been vir-
tually automatic. This was not and should not
have been a formal requirement, something
prescribed by statute. Rather, it should have
been something the NSC principals desired as
a means of ensuring an optimal environment
for Presidential judgment. The meetings
should have been preceded by consideration by
the NSC principals of staff papers prepared ac-
cording to the procedures applicable to covert
actions. These should have reviewed the histo-
ry of the initiative, analyzed the issues then
presented, developed a range of realistic op-
tions, presented the odds of success and the
costs of failure, and addressed questions of im-
plementation and execution. Had this been
done, the objectives of the Iran initiative might
have been clarified and alternatives to the sale
of arms might have been identified.
(ii) The Initiative Was Never Subjected to a Rigor-
ous Review below the Cabinet Level. -Because of
the obsession with secrecy, interagency consid-
eration of the initiative was limited to the cabi-
net level. With the exception of the NSC staff
and, after January 17, 1986, a handful of CIA
officials, the rest of the executive departments
and agencies were largely excluded.
As a consequence, the initiative was never
vetted at the staff level. This deprived those re-
sponsible for the initiative of considerable ex-
pertise-on the situation in Iran; on the diffi-
culties of dealing with terrorists; on the me-
chanics of conducting a diplomatic opening. It
also kept the plan from receiving a tough, criti-
cal review.
Moreover, the initiative did not receive a
policy review below cabinet level. Careful con-
sideration at the Deputy/Under Secretary level
might have exposed the confusion in U.S. ob-
jectives and clarified the risks of using arms as
an instrument of policy in this instance.
The vetting process would also have ensured
better use of U.S. intelligence. As it was, the in-
telligence input into the decision process was
clearly inadequate. First, no independent eval-
uation of the Israeli proposals offered in July
and August appears to have been sought or of-
fered by U.S. intelligence agencies. The Israelis
represented that they for some time had had
contacts with elements in Iran. The prospects
for an opening to Iran depended heavily on
these contacts, yet no systematic assessment ap-
pears to have been made by U.S. intelligence
agencies of the reliability and motivations of
these contacts, and the identity and objectives
of the elements in Iran that the opening was
supposed to reach. Neither was any systematic
assessment made of the motivation of the Israe-
lis.
Second, neither Mr. Ghorbanifar nor the
second channel seem to have been subjected to
a systematic intelligence vetting before they
were engaged as intermediaries. Mr. Ghorbani-
far had been known to the CIA for some time
and the agency had substantial doubts as to his
reliability and truthfulness. Yet the agency did
not volunteer that information or inquire about
the identity of the intermediary if his name was
unknown. Conversely, no early request for a
name check was made of the CIA, and it was
not until January 11, 1986, that the agency
gave Mr. Ghorbanifar a new polygraph, which
he failed. Notwithstanding this situation, with
the signing of the January 17 Finding, the
United States took control of the initiative and
became even more directly involved with Mr.
Ghorbanifar. The issues raised by the poly-
graph results do not appear to have been sys-
tematically addressed. In similar fashion, no
prior intelligence check appears to have been
made on the second channel.
Third, although the President recalled being
assured that the arms sales to Iran would not
alter the military balance with Iran, the Board
could find no evidence that the President was
ever briefed on this subject. The question of
the impact of any intelligence shared with the
Iranians does not appear to have been brought
to the President's attention.
A thorough vetting would have included con-
sideration of the legal implications of the initia-
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tive. There appeared little effort to face square-
ly the legal restrictions and notification require-
ments applicable to the operation. At several
points, other agencies raised questions about
violations of law or regulations. These con-
cerns were dismissed without, it appears, inves-
tigating them with the benefit of legal counsel.
Finally, insufficient attention was given to the
implications. of implementation. The implemen-
tation of the initiative raised a number of
issues: should the NSC staff rather than the
CIA have had operational control; what were
the implications of Israeli involvement; how re-
liable were the Iranian and various other pri-
vate intermediaries; what were the implications
of the use of Mr. Secord's private network of
operatives; what were the implications for the
military balance in the region; was operational
security adequate. Nowhere do these issues
appear to have been sufficiently addressed.
The concern for preserving the secrecy of
the initiative provided an excuse for abandon-
ing sound process. Yet the initiative was known
to a variety of persons with diverse interests
and ambitions-Israelis, Iranians, various arms
dealers and business intermediaries, and LtCol
North's network of private operatives. While
concern for secrecy would have justified limit-
ing the circle of persons knowledgeable about
the initiative, in this case it was drawn too
tightly. As a consequence, important advice and
counsel were lost.
In January of 1985, the President had adopt-
ed procedures for striking the proper balance
between secrecy and the need for consultation
on sensitive programs. These covered the insti-
tution, implementation, and review of covert
operations. In the case of the Iran initiative,
these procedures were almost totally ignored.
The only staff work the President apparently
reviewed in connection with the Iran initiative
was prepared by NSC staff members, under- the
direction of the National Security Advisor.
These were, of course, the principal propo-
nents of the initiative. A portion of this staff
work was reviewed by the Board. It was fre-
quently striking in its failure to present the
record of past efforts-particularly past failures.
Alternative ways of achieving U.S. objectives-
other than yet another arms-for-hostages
deal-were not discussed. Frequently it neither
adequately presented the risks involved in pur-
suing the initiative nor the full force of the dis-
senting views of other NSC principals. On bal-
ance, it did not serve the President well.
(iii) The Process Was Too Informal.-The whole
decision process was too informal. Even when
meetings among NSC principals did occur,
often there was no prior notice of the agenda.
No formal written minutes seem to have been
kept. Decisions subsequently taken by the
President were not formally recorded. An ex-
ception was the January 17 Finding, but even
this was apparently not circulated or shown to
key U.S. officials.
The effect of this informality was that the ini-
tiative lacked a formal institutional record. This
precluded the participants from undertaking
the more informed analysis and reflection that
is afforded by a written record, as opposed to
mere recollection. It made it difficult to deter-
mine where the initiative stood, and to learn
lessons from the record that could guide future
action. This lack of an institutional record per-
mitted specific proposals for arms-for-hostages
exchanges to be presented in a vacuum, with-
out reference to the results of past proposals.
Had a searching and thorough review of the
Iran initiative been undertaken at any stage in
the process, it would have been extremely diffi-
cult to conduct. The Board can attest first hand
to the problem of conducting a review in the
absence of such records. Indeed, the exposition
in the wake of public revelation suffered the
most.
NSC Staff Support for the Contras.-It is not
clear how LtCol North first became involved in
activities in direct support of the Contras
during the period of the Congressional ban.
The Board did not have before it much evi-
dence on this point. In the evidence that the
Board did have, there is no suggestion at any
point of any discussion of LtCol North's activi-
ties with the President in any forum. There also
does not appear to have been any interagency
review of LtCol North's activities at any level.
This latter point is not surprising given the
Congressional restrictions under which the
other relevant agencies were operating. But the
NSC staff apparently did not compensate for
the lack of any interagency review with its own
internal vetting of these activities. LtCol North
apparently worked largely in isolation, keeping
first Mr. McFarlane and then VADM Poindexter
informed.
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The lack of adequate vetting is particularly
evident on the question.of the legality of LtCol
North's activities. The Board did not make a,
judgment on the legal issues raised by his ac-
tivities in support of the Contras. Nevertheless,
some things can be said.
If these activities were illegal, obviously they
should not have been conducted. If there was
any doubt on the matter, systematic legal
advice should have been obtained. The political
cost to the President of illegal action by the
NSC staff was particularly high, both because
the NSC staff is the personal staff of the Presi-
dent and because of the history of serious con-
flict with the Congress over the issue of Contra
support. For these reasons, the President
should have been kept apprised of any review
of the legality of LtCol North's activities.
Legal advice was apparently obtained from
the President's Intelligence Oversight Board.
Without passing on the quality of that advice, it
is an odd source. It would be one thing for the
Intelligence Oversight Board to review the
legal advice provided by some other agency. It
is another for the Intelligence Oversight Board
to be originating legal advice of its own. That
is a function more appropriate for the NSC
staffs own legal counsel.'
3. Implementation Was Unprofessional. -The
manner in which the Iran initiative was imple-
mented and LtCol North undertook to support
the Contras are very similar. This is in large
part because the same cast of characters was in-
volved. In both cases the operations were un-
professional, although the Board has much less
evidence with respect to LtCol North's Contra
activities.
Arms Transfers to Iran.-With the signing of
the January 17 Finding, the Iran initiative
became a U.S. operation run by the NSC staff.
LtCol North made most of the significant oper-
ational decisions. He conducted the operation
through Mr. Secord and his associates, a net-
work of private individuals already involved in
the Contra resupply operation. To this was
added a handful of selected individuals from
the CIA.
But the CIA support was limited. Two CIA
officials, though often at meetings, had a rela-
tively limited role. One served as the point man
' The issue of legal advice to the NSC staff is treated in more
detail in Part V of this report.
for LtCol North in providing logistics and fi-
nancial arrangements. The other (Mr. Allen)
served as a contact between LtCol North and
.the intelligence community. By contrast,
George Cave actually played a significant and
expanding role. However, Clair George,
Deputy Director for Operations at CIA, told.
the Board: "George was paid by me and on the
paper was working for me. But I think in the
heat of the battle, * * * George was working
for Oliver North."
Because so few people from the departments
and agencies were told of the initiative, LtCol
North cut himself off from resources and ex-
pertise from within the government. He relied
instead on a number of private intermediaries,
businessmen and other financial brokers, pri-
vate operators, and Iranians hostile to the
United States. Some of these were individuals
with questionable credentials and potentially
large personal financial interests in the transac-
tions. This made the transactions unnecessarily
complicated and invited kick-backs and payoffs.
This arrangement also dramatically increased
the risks that the intiative would leak. Yet no
provision was made for such an eventuality.
Further, the use of Mr. Secord's private net-
work in the Iran initiative linked those opera-
tors with the resupply of the Contras, threaten-
ing exposure of both operations if either
became public.
The result was a very unprofessional oper-
ation.
Mr. Secord undertook in November, 1985, to
arrange landing clearance for the Israeli flight
bringing the HAWK missiles into a third-coun-
try staging area. The arrangements fell apart. A
CIA field officer attributed this failure to the
amateurish way in which Mr. Secord and his as-
sociates approached officials in the government
from which landing clearance was needed. If
Mr. Ghorbanifar is to be believed, the mission
of Mr. McFarlane to Tehran was undertaken
without any advance work, and with distinctly
different expectations on the part of the two
sides. This could have contributed to its failure.
But there were much more serious errors.
Without adequate study and consideration, in-
telligence was passed to the Iranians of poten-
tially major significance to the Iran/Iraq war.
At the meeting with the second channel on Oc-
tober 5-7, 1986, LtCol North misrepresented
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his access to the President. He told Mr. Ghor-
banifar stories of conversations with the Presi-
dent which were wholly fanciful. He suggested
without authority a shift in U.S. policy adverse
to Iraq in general and Saddam Husain in par-
ticular. Finally, in the nine-point agenda dis-
cussed on October 26-28, he committed the
United States, without authorization, to a posi-
tion contrary to well established U.S. policy on
the prisoners held by Kuwait.
The conduct of the negotiators with Mr.
Ghorbanifar and the second channel were han-
dled in a way that revealed obvious inexperi-
ence. The discussions were too casual for deal-
ings with intermediaries to a regime so hostile
to U.S. interests. The U.S. hand was repeatedly
tipped and unskillfully played. The arrange-
ments failed to guarantee that the U.S. ob-
tained its hostages in exchange for the arms.
Repeatedly, LtCol North permitted arms to be
delivered without the release of a single cap-
tive.
The implementation of the initiative was
never subjected to a rigorous review. LtCol
North appears to have kept VADM Poindexter
fully informed of his activities. In addition,
VADM Poindexter, LtCol North, and the CIA
officials involved apparently apprised Director
Casey of many of the operational details. But
LtCol North and his operation functioned
largely outside the orbit of the U.S. Govern-
ment. Their activities were not subject to criti-
cal reviews of any kind.
After the initial hostage release in Septem-
ber, 1985, it was over 10 months before an-
other hostage was released. This despite recur-
ring promises of the release of all the hostages
and four intervening arms shipments. Begin-
ning with the November shipment, the United
States increasingly took over the operation of
the initiative. In January, 1986, it decided to
transfer arms directly to Iran.
Any of these developments could have served
as a useful occasion for a systematic reconsider-
ation of the initiative. Indeed, at least one of
the schemes contained a provision for reconsid-
eration if the initial -assumptions proved to be
invalid. They did, but the reconsideration never
took place. It was the responsibility of the Na-
tional Security Advisor and the responsible offi-
cers on the NSC staff to call for such a review.
But they were too involved in the initiative
both as advocates and as implementors. This
made it less likely that they would initiate the
kind of review and reconsideration that should
have been undertaken.
NSC Staff Support for the Contras. -As already
noted, the NSC activities in support of the
Contras and its role in the Iran initiative were
of a piece. In the former, there was an added
element of LtCol North's intervention in the
customs investigation of the crash of the SAT
aircraft. Here, too, selected CIA officials re-
ported directly to LtCol North. The limited evi-
dence before the Board suggested that the ac-
tivities in support of the Contras involved un-
professionalism much like that in the Iran oper-
ation.
iv. Congress Was Never Notified.-Congress was
not apprised either of the Iran initiative or of
the NSC staff's activities in support of the Con-
tras.
In the case of Iran, because release of the
hostages was expected within a short time after
the delivery of equipment, and because public
disclosure could have destroyed the operation
and perhaps endangered the hostages, it could
be argued that it was justifiable to defer notifi-
cation of Congress prior to the first shipment
of arms to Iran. The plan apparently was to
inform Congress immediately after the hostages
were .safely in U.S. hands. But after the first de-
livery failed to release all the hostages, and as
one hostage release plan was replaced by an-
other, Congress certainly should have been in-
formed. This could have been done during a
period when no specific hostage release plan
was in execution. Consultation with Congress
could have been useful to the President, for it
might have given him some sense of how the
public would react to the initiative. It also
might have influenced his decision to continue
to pursue it.
v. Legal Issues. -In addition to conflicting with
several fundamental U.S. policies, selling arms
to Iran raised far-reaching legal questions. How
it dealt with these is important to an evaluation
of the Iran initiative.
Arms Transfers to Iran.-It was not part of the
Board's mandate to consider issues of law as
they may pertain to individuals or detailed as-
pects of the Iran initiative. Instead, the Board
focused on the legal basis for the arms trans-
fers to Iran and how issues of law were ad-
dressed in the NSC process.
IV-7
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The Arms Export Control Act, the principal
U.S. statute governing arms sales abroad,
makes it unlawful to export , arms without a li-
cense. Exports of arms by U.S. government
agencies, however, do not require a license if
they are otherwise authorized by law. Criminal..
penalties-fines and imprisonment-are provid-
ed for willful violations.
The initial arms transfers in the Iran initia-
tive involved the sale and shipment by Israel of
U.S.-origin missiles. The usual way for such
international retransfer of arms to be author-
ized under U.S. law is pursuant to the Arms
Export Control Act. This Act requires that the
President consent to any transfers by another
country of arms exported under the Act and
imposes three conditions before such Presiden-
tial consent may be given:
(a) the United States would itself transfer
the arms in question to the recipient coun-
try;
(b) a commitment in writing has been ob-
tained from the recipient country against
unauthorized retransfer of significant arms,
such as missiles; and
(c) a prior written certification regarding
the retransfer is submitted to the Congress
if the defense equipment, such as missiles,
has an acquisition cost of 14 million dollars
or more. 22 U.S.C. 2753 (a), (d).
In addition, the Act generally imposes re-
strictions on which countries are eligible to re-
ceive U.S. arms and on the purposes for which.
arms may be sold.2
The other possible avenue whereby govern-
ment arms transfers to Iran may be authorized
by law would be in connection with intelligence
operations conducted under the National Secu-
rity Act. This Act requires that the Director of
Central Intelligence and the heads of other in-
telligence agencies keep the two Congressional
intelligence committees "fully and currently in-
2 It may be possible to authorize transfers by another country
under the Arms Export Control Act without obtaining the Presi-
dent's consent. As a practical matter, however, the legal require-
ments may not differ significantly. For example, section 614(2)
permits the President to waive the requirements of the Act. But
this waiver authority may not be exercised unless it is determined
that the international arms sales are "vital to the national security
interests of the United States." Moreover, before granting a
waiver, the President must consult with and provide written justi-
fication to the foreign affairs and appropriations committees of
the Congress. 22. U.S.C. 2374(3).
formed" of all intelligence activities under their
responsibility. 50 U.S.C. 413. Where prior
notice of significant intelligence activities is not
given, the intelligence committees are to be in-
formed "in a timely fashion." In addition, the
so called Hughes-Ryan Amendment to the For-
eign Assistance Act requires that "significant
anticipated intelligence activities" may not be
conducted by the CIA unless and until the
President finds that "each such operation is im-
portant to the national security of the United
States." 22 U.S.C. 2422.
When the Israelis began transfering arms to
Iran in August, 1985, they were not acting on
their own. U.S. officials had knowledge. about
the essential elements of the proposed ship-
ments. The United States shared some
common purpose in the transfers-and received
a benefit from them-the release of a hostage.
Most importantly, Mr. McFarlane communicat-
ed prior U.S. approval to the Israelis- for the
shipments, including an undertaking for replen-
ishment. But for this U.S. approval, the transac-
tions may not have gone forward. In short, the
United States was an essential participant in the
arms transfers to Iran that occurred in 1985.
Whether this U.S. involvement in the arms
transfers by the Israelis was lawful depends
fundamentally upon whether the President ap-
proved the transactions before they occurred.
In the absence of Presidential approval, there
does not appear to be any authority in this case
for the United States to engage in the transfer -
of arms or consent to the transfer by another
country. The arms transfers to Iran in 1985
and hence the Iran initiative itself would -have
proceeded contrary to U.S. law.
The Attorney General reached a similar judg-
ment with respect to the activities of the CIA in
facilitating the November, 1985 shipment by
the Israelis of HAWK missiles. In a letter to the
Board,3 the Attorney General- concluded that
with respect to the CIA assistance, "a finding
under the Hughes-Ryan Amendment would be
required." 4
8 A copy of the letter is set forth in Appendix H.
4 Apparently no determination was made at the time as to the
legality of these activities even though serious concerns about le-
gality were expressed by the Deputy Director of CIA, a Presiden-
tial finding was sought by CIA officials before any further CIA
activities in support of the ,Iran initiative were undertaken, and
the CIA counsel, Mr. Stanley Sporkin, advised that as a matter of
prudence any new finding should seek to ratify the prior CIA ac-
tivities.
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The Board was unable to reach a conclusive
judgment about whether the 1985 shipments of
arms to Iran were approved in advance by the
President. On balance the Board believes that
it is plausible to conclude that he did approve
them in advance.
Yet even if the President in some sense con-
sented to or approved the transactions, a seri-
ous question of law remains. It is not clear that
the form of the approval was sufficient for pur-
poses of either the Arms Export Control Act or
the Hughes-Ryan Amendment. The consent
did not meet the conditions of the Arms Export
Control Act, especially in the absence of a prior
written commitment from the Iranians regard-
ing unauthorized retransfer.
Under the National Security Act, it is not
clear that mere oral approval by the President
would qualify as a Presidential finding that the
initiative was vital to the national security inter-
ests of the United States. The approval was
never reduced to writing. It appears to have
been conveyed to only one person. The Presi-
dent himself has no memory of it. And there is
contradictory evidence from the President's -ad-
visors about how the President responded
when he learned of the arms shipments which
the approval was to support. In addition, the
requirement for Congressional notification was
ignored. In these circumstances, even if the
President approved of the transactions, it is dif-
ficult to conclude that. his actions constituted
adequate legal authority.
The legal requirements pertaining to the sale
of arms to Iran are complex; the availability of
legal authority, including that which may flow
from the President's constitutional powers, is
difficult to delineate. Definitive legal conclu-
sions will also depend upon a variety of specific
factual determinations that the Board has not
attempted to resolve-for example, the specific
content of any consent provided by the Presi-
dent, the authority under which the missiles
were originally transferred to Israel, the knowl-
edge and intentions of individuals, and the like.
Nevertheless, it was sufficient for the Board's
purposes to conclude that the legal underpin-
ning of the Iran initiative during. 1985 was at
best highly questionable.
The Presidential Finding of January 17,
1986, formally approved the Iran initiative as a
covert intelligence operation under the Nation-
al Security Act. This ended the uncertainty
about the legal status of the initiative and pro-
vided legal authority for the United States to
transfer arms directly to Iran.
The National Security Act also requires noti-
fication of Congress of covert intelligence ac-
tivities. If not done in advance, notification
must be "in a timely fashion." The Presidential
finding of January 17 directed that Congres-
sional notification be withheld, and this deci-
sion appears to have never been reconsidered.
While there was surely justification to suspend
Congressional notification in advance of a par-
ticular transaction relating to a hostage release,
the law would seem to require disclosure
where, as in the Iran case, a pattern of relative
inactivity occurs over an extended period. To
do otherwise prevents the Congress from ful-
filling its proper oversight responsibilities.
Throughout the Iran initiative, significant
questions of law do not appear to have been
adequately addressed. In the face of a sweeping
statutory prohibition and explicit requirements
relating to Presidential consent to arms trans-
fers by third countries, there appears to have
been at the outset in 1985 little attention, let
alone systematic analysis, devoted to how Presi-
dential. actions would comply with U.S. law.
The Board has found no evidence that an eval-~
uation was ever done during the life.of the op-
eration to determine whether it continued to
comply with the terms of the January 17 Presi-
dential Finding. Similarly, when a new prohibi-
tion was added to the Arms Export Control Act
in August of 1986 to prohibit exports to coun-
tries on the terrorism list (a list which con-
tained Iran), no evaluation was made to deter-
mine whether this law affected authority to
transfer arms to Iran in connection with intelli-
gence operations under the National Security
Act. This lack of legal vigilance markedly in-
creased the chances that the initiative would
proceed contrary to law.
NSC Staff Support for the Contras.-The NSC
staff activities in support of the Contras were
marked by the same uncertainty as to legal au-
thority and insensitivity to legal issues as were
present in the Iran initiative. The ambiguity of
the law governing activities in support of the
Contras- presented a greater challenge than
even the considerable complexity of laws gov-
erning arms transfers. Intense Congressional
scrutiny with respect to the NSC staff activities
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relating to the Contras added to the potential
costs of actions that pushed the limits of the
law.
In this context, the NSC staff should have
been particularly cautious, avoiding operational
activity in this area and seeking legal counsel.
The Board saw no signs of such restraint.
B. Failure of Responsibility
The NSC system will not work unless the
President makes it work. After all, this system
was created to serve the President of the
United States in ways of his choosing. By his
actions, by his leadership, the President there-
fore determines the quality of its performance.
By his own account, as evidenced in his diary
notes, and as conveyed to the Board by his
principal advisors, President Reagan was deeply
committed to securing the release of the hos-
tages. It was this intense compassion for the
hostages that appeared to motivate his stead-
fast support of the Iran initiative, even in the
face of opposition from his Secretaries of State
and Defense.
In his obvious commitment, the President ap-
pears to have proceeded with a concept of the
initiative that was not accurately reflected in
the reality of the operation. The President did
not seem to be aware of the way in which the
operation was implemented and the full conse-
quences of U.S. participation.
The President's expressed concern for the
safety of both the hostages and the Iranians
who could have been at risk may have been
conveyed in a manner so as to inhibit the full
functioning of the system.
The President's management style is to put
the principal responsibility for policy review
and implementation on the shoulders of his ad-
visors. Nevertheless, with such a complex, high-
risk operation and so much at stake, the Presi-
dent should have ensured that the NSC system
did not fail him. He did not force his policy to
undergo the most critical review of which the
NSC participants and the process were capable.
At no time did he insist upon accountability
and performance review. Had the President
chosen to drive the NSC system, the outcome
could well have been different. As it was, the
most powerful features of the NSC system-
providing comprehensive analysis, alternatives
and follow-up-were not utilized.
The Board found a strong consensus among
NSC participants that the President's priority in
the Iran initiative was the release of U.S. hos-
tages. But setting priorities is not enough when
it comes to sensitive and risky initiatives that
directly affect U.S. national security. He must
ensure that the content and tactics of an initia-
tive match his priorities and objectives. He
must insist upon accountability. For it is the
President who must take responsibility for the
NSC system and deal with the consequences.
Beyond the President, the other NSC princi-
pals and the National Security Advisor must
share in the responsibility for the NSC system.
President Reagan's personal management
style places an especially heavy responsibility
on his key advisors. Knowing his style, they
should have been particularly mindful of the
need for special attention to the manner in
which this arms sale initiative developed and
proceeded. On this score, neither the National
Security Advisor nor the other NSC principals
deserve high marks.
It is their obligation as members and advi-
sors to the Council to ensure that the President
is adequately served. The principal subordi-
nates to the President must not be deterred
from urging the President not to proceed on a
highly questionable course of action even in
the face of his strong conviction to the con-
trary.
In the case of the Iran initiative, the NSC
process did not fail, it simply was largely ig-
nored. The National Security Advisor and the
NSC principals all had a duty to raise this issue
and insist that orderly process be imposed.
None of them did so.
All had the opportunity. While the National
Security Advisor had the responsibility to see
that an orderly process was observed, his fail-
ure to do 'so does not excuse the other NSC
principals. It does not appear that any of the
NSC principals called for more frequent con-
sideration of the Iran initiative by the NSC
principals in the presence of the President.
None of the principals called for a serious vet-
ting of the initiative by even a restricted group
of disinterested individuals. The intelligence
questions do not appear to have been raised,
and legal considerations, while raised, were not
pressed. No one seemed to have complained
about the informality of the process. No one
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called for a thorough reexamination once the
initiative did not meet expectations or the
manner of execution changed. While one or
another of the NSC principals suspected that
something was amiss, none vigorously pursued
the issue.
Mr. Regan also shares in this responsibility.
More than almost any Chief of Staff of recent
memory, he asserted personal control over the
White House staff and sought to extend this
control to the National Security Advisor. He
was personally active in national security affairs
and attended almost all of the relevant meet-
ings regarding the Iran initiative. He, as much
as anyone, should have insisted that an orderly
process be observed. In addition, he especially
should have ensured that plans were made for
handling any public disclosure of the initiative.
He must bear primary responsibility for the
chaos that descended upon the White House
when such disclosure did occur.
Mr. McFarlane appeared caught between a
President who supported the initiative and the
cabinet officers who strongly opposed it. While
he made efforts to keep these cabinet officers
informed, the Board heard complaints from
some that he was not always successful. VADM
Poindexter on several occasions apparently
sought to exclude NSC principals other than
the President from knowledge of the initiative.
Indeed, on one or more occasions Secretary
Shultz may have been actively misled by VADM
Poindexter.
VADM Poindexter also failed grievously on
the matter of Contra diversion. Evidence indi-
cates that VADM Poindexter knew that a diver-
sion occurred, yet he did not take the steps that
were required given the gravity of that pros-
pect. He apparently failed to appreciate or ig-
nored the serious legal and political risks pre-
sented. His clear obligation was either to inves-
tigate the matter or take it to the President-or
both. He did neither. Director Casey shared a
similar responsibility. Evidence suggests that he
received information about the possible diver-
sion of funds to the Contras almost a month
before the story broke. He, too, did not move
promptly to raise the matter with the President.
Yet his responsibility to do so was clear.
The NSC principals other than the President
may be somewhat excused by the insufficient
attention on the part of the National Security
Advisor to the need to keep all the principals
fully informed. Given the importance of the
issue and the sharp policy divergences in-
volved, however, Secretary Shultz and Secretary
Weinberger in particular distanced themselves
from the march of events. Secretary Shultz spe-
cifically requested to be informed only as nec-
essary to perform his job. Secretary Weinberg-
er had access through intelligence to details
about the operation. Their obligation was to
give the President their full support and contin-
ued advice with respect to the program or, if
they could not in conscience do that, to so
inform the President. Instead, they simply dis-
tanced themselves from the program. They
protected the record as to their own positions
on this issue. They were not energetic in at-
tempting to protect the President from the con-
sequences of his personal commitment to free-
ing the hostages.
Director Casey appears to have been in-
formed in considerable detail about the specif-
ics of the Iranian operation. He appears to
have acquiesced in and to have encouraged
North's exercise of direct operational control
over the operation. Because of the NSC staff's
proximity to and close identification with the
President, this increased the risks to the Presi-
dent if the initiative became public or the oper-
ation failed.
There is no evidence, however, that Director
Casey explained this risk to the President or
made clear to the President that LtCol North,
rather than the CIA, was running the oper-
ation. The President does not recall ever being
informed of this fact. Indeed, Director Casey
should have gone further and pressed for oper-
ational responsibility to be transferred to the
CIA.
Director Casey should have taken the lead in
vetting the assumptions presented by the Israe-
lis on which the program was based and in
pressing for an early examination of the reli-
ance upon Mr. Ghorbanifar and the second
channel as intermediaries. He should also have
assumed responsibility for checking out the
other intermediaries involved in the operation.
Finally, because Congressional restrictions on
covert actions are both largely directed at and
familiar to the CIA, Director Casey should have
taken the lead in keeping the question of Con-
gressional notification active.
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Finally, Director Casey, and, to a lesser
extent, Secretary Weinberger, should have
taken it upon themselves to assess the effect of
the transfer of arms and intelligence to Iran on
the Iran/Iraq military balance, and to transmit
that information to the President.
C. The Role of the Israelis
Conversations with emissaries from the Gov-
ernment of,Israel took place prior to the com-
mencement of the initiative. It remains unclear
whether the initial proposal to open the Ghor-
banifar channel was an Israeli initiative, was
brought on by the avarice of arms dealers, or
came as a result of an American request for as-
sistance. There is no doubt, however, that it
was Israel that pressed Mr. Ghorbanifar on the
United States. U.S. officials accepted Israeli as-
surances that they had had for some time an
extensive dialogue that involved high-level Ira-
nians, as well as their assurances of Mr. Ghor-
banifar's bona fides. Thereafter, at critical
points in the initiative, when doubts were ex-
pressed by critical U.S. participants, an Israeli
emissary would arrive with encouragement,
often a specific proposal, and pressure to stay
with the Ghorbanifar channel.
From the record available to the Board, it is
not possible to determine the role of key U.S.
participants in prompting these Israeli interven-
tions. There were active and ongoing consulta-
tions between LtCol North and officials of the
Israeli government, specifically David Kimche
and Amiram Nir. In addition, Mr. Schwimmer,
Mr. Nimrodi, and Mr. Ledeen, also in frequent
contact with LtCol North, had close. ties with
the government of Israel. It may be that the
Israeli interventions were actively solicited by
particular U.S. officials. Without the benefit of
the views of the Israeli officials involved, it is
hard to know the facts.
It is clear, however, that Israel had its own
interests, some in direct conflict with those of
the United States, in having the United States
pursue the initiative. For this reason, it had an
incentive to keep the initiative alive. It sought
to do this by interventions with the NSC staff,
the National Security Advisor, and the Presi-
dent. Although it may have received sugges-
tions from LtCol North, Mr. Ledeen, and
others, it responded affirmatively to these sug-
gestions by reason of its own interests.
Even if the Government of Israel actively
worked to begin the initiative and to keep it
going, the U.S. Government is responsible for
its own decisions. Key participants in U.S. de-
liberations made the point that Israel's objec-
tives and interests in this initiative were differ-
ent from, and in some respects in conflict with,
those of the United States. Although Israel
dealt with those portions of the U.S. Govern-
ment that it deemed were sympathetic to the
initiative, there is nothing improper per se about
this fact. U.S. decision-makers made their own
decisions and must bear responsibility for the
consequences.
D. Aftermath-The Efforts
To Tell the Story
From the first hint in late-October, 1986 that
the McFarlane trip would soon become public,
information on the Iran initiative and Contra
activity cascaded into the press. The veiled
hints of secret activities, random and indis-
criminate disclosures of information from a va-
riety of sources, both knowledgeable and other-
wise, and conflicting statements by high-level
officials presented a confusing picture to the
American public. The Board recognized that
conflicts among contemporaneous documents
and statements raised concern about the man-
agement of the public presentation of facts on
the Iran initiative. Though the Board reviewed
some evidence 8 on events after the exposure,
our ability to comment on these events remains
limited.
The Board found evidence that immediately
following the public disclosure, the President
wanted to avoid providing too much specificity
or detail out of concern for the hostages still
held in Lebanon and those Iranians who had
supported the initiative. In doing so, he did
not, we believe, intend to mislead the American
public or cover-up unlawful conduct. By at
least November 20, the President took steps to
ensure that all the facts would come out. From
the President's request to Mr. Meese to look
into the history of the initiative, to his appoint-
ment of this Board, to his request for an Inde-
pendent Counsel, to his willingness to discuss
this matter fully and to review his personal
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notes with us, the Board is convinced that the
President does indeed want the full story to be
told.
Those who prepared the President's support-
ing documentation did not appear, at least ini-
tially, to share in the President's ultimate
wishes. Mr. McFarlane described for the Board
the process used by the NSC staff to create a
chronology that obscured essential facts. Mr.
McFarlane contributed to the creation of this
chronology which did not, he said, present "a
full and completely accurate account" of the
events and left ambiguous the President's role.
This was, according to Mr. McFarlane, done to
distance the President from the timing and
nature of the President's authorization. He told
the Board that he wrote a memorandum on
November 18, which tried to, in his own words,
"gild the President's motives." This version
was incorporated into the chronology. Mr.
McFarlane told the Board that he knew the ac-
count was "misleading, at least, and wrong, at
worst." Mr. McFarlane told the Board that he
did provide the Attorney General an accurate
account of the President's role.
The Board found considerable reason to
question the actions of LtCol North in the
aftermath of the disclosure. The Board has no
evidence to either confirm or refute that LtCol
North destroyed documents on the initiative in
an effort to conceal facts from threatened in-
vestigations. The Board found indications that
LtCol North was involved in an effort, over
time, to conceal or withhold important infor-
mation. The files of LtCol North contained
much of the historical documentation that the
Board used to construct its narrative. More-
over, LtCol North was the primary U.S. govern-
ment official involved in the details of the oper-
ation. The chronology he produced has many
inaccuracies. These "histories" were to be the
basis of the "full" story of the Iran initiative.
These inaccuracies lend some evidence to the
proposition that LtCol North, either. on his own
or at the behest of others, actively sought to
conceal important information.
Out of concern for the protection of classi-
fied material, Director Casey and VADM Poin-
dexter were to brief only the Congressional in-
telligence committees on the "full" story; the
DCI before the Committees and VADM Poin-
dexter in private sessions with the chairmen
and vice-chairmen. The DCI and VADM Poin-
dexter undertook to do this on November 21,
1986. It appears from the copy of the DCI's
testimony and notes of VADM Poindexter's
meetings, that they did not fully relate the
nature of events as they had occurred. The
result is an understandable perception that they
were not forthcoming.
The Board is also concerned about various
notes that appear to be missing. VADM Poin-
dexter was the official note taker in some key
meetings, yet no notes for the meetings can be
found. The reason for the lack of such notes
remains unknown to the Board. If they were
written, they may contain very important infor-
mation. We have no way of knowing if they
exist.
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Recommendations
"Not only * * * is the Federal power
over external affairs in origin and es-
sential character different from that
over internal affairs, but participation
in the exercise of the power is signifi-
cantly limited. In this vast external
realm, with its important, complicated,
delicate and manifold problems, ' the
President alone has the power to
speak or listen as a representative of
the nation." United States v. Curtiss-
Wright Export Corp., 299. U.S. 304, 319
(1936).
Whereas the ultimate power to formulate do-
mestic policy resides in the Congress, the pri-
mary responsibility for the formulation and im-
plementation of national security policy falls on
the President.
It is the President who is the usual source of
innovation and responsiveness in this field. The
departments and agencies-the Defense De-
partment, State Department, and CIA bureauc-
racies-tend to resist policy change. Each has
its own perspective based on long experience.
The challenge for the President is to bring his
perspective to bear on these bureaucracies for
they are his instruments for executing national
security policy, and he must work through
them. His task is to provide them leadership
and direction.
The National Security Act of 1947 and the
system that has grown up under it affords the
President special tools for carrying out this im-
portant role. These tools are the National Se-
curity Council, the National Security Advisor,
and the NSC Staff. These are the means
through which the creative impulses of the
President are brought to bear on the perma-
nent government. The National Security Act,
and custom and practice, rightly give the Presi-
dent wide latitude in fashioning exactly how
these means are used.
There is no magic formula which can be ap-
. plied to the NSC structure and process to
produce an optimal system. Because the system
is the vehicle through which the President for-
mulates and implements his national security
policy, it must adapt to each individual Presi-
dent's style and management philosophy. This
means that NSC structures and processes must
be flexible, not rigid. Overprescription would,
as discussed in Part II, either destroy the
system or render it ineffective.
Nevertheless, this does not mean there can
be no guidelines or recommendations that
might improve the operation of the system,
whatever the particular style of the incumbent
President. We have reviewed the operation of
the. system over the past 40 years, through
good times and bad. We have listened carefully
to the views of all the living former Presidents
as well as those of most of the participants in
their own national security systems. With the
strong caveat that flexibility and adaptability
must be at the core, it is our judgment that the
national security system seems to have worked
best when it has in general operated along the
lines set forth below.
Organizing for National Security. Because of the
wide latitude in the ,National Security Act, the
President bears a special responsibility for the
effective performance of the NSC system. A
President must at the outset provide guidelines
to the members of the National Security Coun-
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cil, his National Security Advisor, and the Na-
tional Security Council staff. These guidelines,
to be effective, must include how they will
relate to one another, what procedures will be
followed, what the President expects of them.
If his advisors are not performing as he likes,
only the President can intervene.
The National Security Council principals
other than the President participate on the
Council in a unique capacity.' Although hold-
ing a seat by virtue of their official positions in
the Administration, when they sit as members
of the Council they sit not as cabinet secretar-
ies or department heads but as advisors to the
President. They are there not simply to ad-
vance or defend the particular positions of the
departments or agencies they head but to give
their best advice to the President. Their job-
and their challenge-is to see the issue from
this perspective, not from the narrower inter-
ests of their respective bureaucracies.
The National Security Council is only adviso-
ry. It is the President alone who decides. When
the NSC principals receive those decisions, they
do so as heads of the appropriate departments
or agencies. They are then responsible to see
that the President's decisions are carried out by
those organizations accurately and effectively.
This is an important point. The policy inno-
vation and creativity of the President encoun-
ters a natural resistance from the executing de-
partments. While this resistance is a source of
frustration to every President, it is inherent in
the design of the government. It is up to the
politically appointed agency heads to ensure
that the President's goals, designs, and policies
are brought to bear on this permanent struc-
ture. Circumventing the departments, perhaps
by using the National Security Advisor or the
NSC Staff to execute policy, robs the President
of the experience and capacity resident in the
departments. The President must act largely
through them, but the agency heads must
ensure that they execute the President's poli-
cies in an expeditious and effective manner. It
is not just the obligation of the National Securi-
ty Advisor to see that the national security
1 As discussed in more detail in Part II, the statutory members
of the National Security Council are the President, Vice Presi-
dent, Secretary of State, and Secretary of Defense. By the phrase
"National Security Council principals" or "NSC principals," the
Board generally means those four statutory members plus the Di-
rector of Central Intelligence and the Chairman of the Joint
Chiefs of Staff.
process is used. All of the NSC principals-and
particularly the President-have that obligation.
This tension between the President and the
Executive Departments is worked out through
the national security process described in the
opening sections of this report. It is through
this process that the nation obtains both the
best of the creativity of the President and the
learning and expertise of the national security
departments and agencies.
This process is extremely important to the
President. His decisions will benefit from the
advice and perspective of all the concerned de-
partments and agencies. History offers numer-
ous examples of this truth. President Kennedy,
for example, did not have adequate consulta-
tion before entering upon the Bay of Pigs inva-
sion, one of his greatest failures. He remedied
this in time for the Cuban missile crisis, one of
his greatest successes. Process will not always
produce brilliant ideas, but history suggests it
can at least help prevent bad ideas from be-
coming Presidential policy.
The National Security Advisor. It is the National
Security Advisor who is primarily responsible
for managing this process on a daily basis. The
job requires skill, sensitivity, and integrity. It is
his responsibility to ensure that matters submit=ted for consideration by the Council cover the
full range of issues on which review is required;
that those issues are fully analyzed; that a full
range of options is considered; that the pros-
pects and risks of each are examined; that all
relevant intelligence and other information is
available to the principals; that legal consider-
ations are addressed; that difficulties in imple-
mentation are confronted. Usually, this can
best be accomplished through interagency par-
ticipation in the analysis of the issue and a pre-
paratory policy review at the Deputy or Under
Secretary level.
The National Security Advisor assumes these
responsibilities not only with respect to the
President but with respect to all the NSC prin-
cipals. He must keep them informed of the
President's thinking and decisions. They should
have adequate notice and an agenda for all
meetings. Decision papers should, if at all pos-
sible, be provided in advance.
The National Security Advisor must also
ensure that adequate records are kept of NSC
consultations and Presidential decisions. This is
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essential to avoid confusion among Presidential..
advisors and departmental staffs about what
was actually decided and what is wanted. Those
records are also essential for conducting a -peri-
odic review of a policy or initiative, and to
learn from the past.
It is the responsibility of the National Securi-
ty Advisor to monitor policy implementation
and to ensure that policies are executed in con-
formity with the intent of the President's deci-
sion. Monitoring includes initiating periodic re-
assessments of a policy or operation, especially
when changed circumstances suggest that the
policy or operation no longer serves U.S. inter-
ests.
But the National Security Advisor does not
simply manage the national security process.
He is himself an important source of advice on
national security matters to the President. He is
not the President's only source of advice, but
he is perhaps the one most able to see things
from the President's perspective. He is unbur-
dened by departmental responsibilities. The
President is his only master. His advice is confi-
dential. He is not subject to Senate confirma-
tion and traditionally does not formally appear
before Congressional committees.
To serve the President well, the National Se-
curity Advisor should present his own views,
but he must at the same time represent the
views of others fully and faithfully to the Presi-
dent. The system will not work well if the Na-
tional Security Advisor does not have the trust
of the NSC principals. He, therefore, must not
use his proximity to the President to manipu-
late the process so as to produce his own posi-
tion. He should not interpose himself between
the President and the NSC principals. He
should not seek to exclude the NSC principals
from the decision process. Performing both
these roles well is an essential, if not easy, task.
In order for the National Security Advisor to
serve the President adequately, he must have
direct access to the President. Unless he knows
first hand the views of the President and is
known to reflect them in his management of
the NSC system, he will be ineffective. He
should not report to the President through
some other official. While the Chief of Staff or
others can usefully interject domestic political
considerations into national security delibera-
tions, they should do so as additional advisors
to the President.
Ideally, the National Security Advisor should
not have a high public profile. He should not
try to compete with the Secretary of State or
the Secretary of Defense as the articulator of
public policy. They, along with the President,
should be the spokesmen for the policies of the
Administration. While a "passion for anonymi-
ty" is perhaps too strong a term, the National
Security Advisor should generally operate off-
stage.
The NSC principals of course must have
direct access to the President, with whatever
frequency the President feels is appropriate.
But these individual meetings should not be
used by the principal to seek decisions or oth-
erwise circumvent the system in the absence of
the other principals. In the same way, the Na-
tional Security Advisor should not use his
scheduled intelligence or other daily briefings
of the President as an opportunity to seek Pres-
idential decision on significant issues.
If the system is to operate well, the National
Security Advisor must promote cooperation
rather than competition among himself and the
other NSC principals. But the President is ulti-
mately responsible for the operation of this
system. If rancorous infighting develops among
his principal national security functionaries,
only he can deal with them. Public dispute over
external policy by senior officials undermines
the process of decision-making and narrows his
options. It is the President's responsibility to
ensure that it does not take place.
Finally, the National Security Advisor should
focus on advice and management, not imple-
mentation and execution. Implementation is
the responsibility and the strength of the de-
partments and agencies. The National Security
Advisor and the NSC Staff generally do not
have the depth of resources for the conduct of
operations. In addition, when they take on im-
plementation responsibilites, they risk compro-
mising their objectivity. They can no longer act
as impartial overseers of the implementation,
ensuring that Presidential guidance is followed,
that policies are kept under review, and that
the results are serving the President's policy
and the national interest.
The NSC Staff. The NSC staff should be
small, highly competent, and experienced in
the making of public policy. Staff members
should be drawn both from within and from
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outside government. Those from within gov-
ernment should come from the several depart-
ments and agencies concerned with national se-
curity matters. No particular department or
agency should have a predominate role. A
proper balance must be maintained between
people from within and outside the govern-
ment. Staff members should generally rotate
with a stay of more than four years viewed as
the exception.
A large number of staff action officers orga-
nized along essentially horizontal lines en-
hances the possibilities for poorly supervised
and monitored activities by individual staff
members. Such a system is made to order for
energetic self-starters to take unauthorized ini-
tiatives. Clear vertical lines of control and au-
thority, responsibility and accountability, are
essential to good management.
One problem affecting the NSC staff is lack
of institutional memory. This results from the
understandable desire of a President to replace
the staff in order to be sure it is responsive to
him. Departments provide continuity that can
help the Council, but the Council as an institu-
tion also needs some means to assure adequate
records and memory. This was identified to the
Board as a problem by many witnesses.
We recognize the problem and have identi-
fied a range of possibilities that a President
might consider on this subject. One would be
to create a small permanent executive secretar-
iat. Another would be to have one person, the
Executive Secretary, as a permanent position.
Finally, a pattern of limited tenure and overlap-
ping rotation could be used. Any of these
would help reduce the problem of loss of insti-
tutional memory; none would be practical
unless each succeeding President subscribed to
The guidelines for the role of the National
Security Advisor also apply generally to the
NSC staff. They should protect the process and
thereby the President. Departments and agen-
cies should not be excluded from participation
in that process. The staff should not be imple-
mentors or operators and staff should keep a
low profile with the press.
Principal Recommendation
The model we have outlined above for the
National Security Council system constitutes
our first and most important recommendation.
It includes guidelines that address virtually all'
of the deficiencies in procedure and practice
that the Board encountered in the Iran/Contra
affair as well as in other case studies of this and
previous administrations.
We believe this model can enhance the per-
formance of a President and his administration
in the area of national security. It responds di-
rectly to President Reagan's mandate to de-
scribe the NSC system as it ought to be.
The Board recommends that the proposed
model be used by Presidents in their manage-
ment of the national security system.
Specific Recommendations
In addition to its. principal recommendation
regarding the organization and functioning of
the NSC system and roles to be played by the
participants, the Board has a number of specific
recommendations.
1. The National Security Act of 1947. The flaws
of procedure and failures of responsibility re-
vealed by our study do not suggest any inad-
equacies in the provisions of the National Secu-
rity Act of 1947 that deal with the structure
and operation of the NSC system. Forty years
of experience under that Act demonstrate to
the Board that it remains a fundamentally
sound framework for national security decision-
making. It strikes a balance between formal
structure and flexibility adequate to permit
each President to tailor the system to fit his
needs.
As a general matter, the NSC Staff should
not engage in the implementation of policy or
the conduct of operations. This compromises
their oversight role and usurps the responsibil-
ities of the departments and agencies. But the
inflexibility of a legislative restriction should be
avoided. Terms such as "operation" and "im-
plementation" are difficult to define, and a leg-
islative proscription might preclude some
future President from making a very construc-
tive use of the NSC Staff.
Predisposition on sizing of the staff should
be toward fewer rather than more. But a legis-
lative restriction cannot forsee the require-
ments of future Presidents. Size is best left to
the discretion of the President, with the admo-
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nition that the role of the NSC staff is to
review, not to duplicate or replace, the work of
the departments and agencies.
We recommend that no substantive change
be made in the provisions of the National Se-
curity Act dealing with the structure and op-
eration of the NSC system.
2. Senate Confirmation of the National Security Ad-
visor. It has been suggested that the job of the
National Security Advisor has become so im-
portant that its holder should be screened by
the process of confirmation, and that once con-
firmed he should return frequently for ques-
tioning by the Congress. It is argued that this
would improve the accountability of the Na-
tional Security Advisor.
We hold a different view. The National Secu-
rity Advisor does, and should continue, to
serve only one master, and that is the Presi-
dent. Further, confirmation is inconsistent with
the role the National Security Advisor should
play. He should not decide, only advise. He
should not engage in policy implementation or
operations. He should serve the President, with
no collateral and potentially diverting loyalties.
Confirmation would tend to institutionalize
the natural tension that exists between the Sec-
retary of State and the National Security Advi-
sor. Questions would increasingly arise about
who really speaks for the President in national
security matters. Foreign governments could be
confused or would be encouraged to engage in
"forum shopping.".
Only one of the former government officials
interviewed favored Senate confirmation of the
National Security Advisor. While consultation
with Congress received wide support, confirma-
tion and formal questioning were opposed.
Several suggested that if the National Security
Advisor were to become a position subject to
confirmation, it could induce the President to
turn to other internal staff or to people outside
government to play that role.
We urge the Congress not to require
Senate confirmation of the National Security
Advisor.
3. The Interagency Process. It is the National Se-
curity Advisor who has the greatest interest in
making the national security process work, for
it is this process by which the President obtains
the information, background, and analysis he
requires to make decisions and build support
for his program. Most Presidents have set up
interagency committees at both a staff and
policy level to surface issues, develop options,
and clarify choices. There has typically been. a
struggle for the chairmanships of these groups
between the National Security Advisor and the
NSC staff on the one hand, and the cabinet
secretaries and department officials on the
other.
Our review of the operation of the present
system and that of other administrations where
committee chairmen came from the depart-.
ments has led us to the conclusion that the
system generally operates better when the com-
mittees are chaired by the individual with the
greatest stake in making the NSC system work.
We recommend that the National Security
Advisor chair the senior-level committees of
the NSC system.
4. Covert Actions. Policy formulation and im-
plementation are usually managed by a team of
experts led by policymaking generalists. Covert
action requirements are no different, but there
is a need to limit, sometimes severely, the
number of individuals involved. The lives of
many people may be at stake, as was the case in
the attempt to rescue the hostages in Tehran.
Premature disclosure might kill the idea in
embryo, as could have been the case in the
opening of relations with China. In such cases,
there is a tendency to limit those involved to a
small number of top officials. This practice
tends to limit severely the expertise brought to
bear on the problem and should be used very
sparingly indeed.
The obsession with secrecy and preoccupa-
tion with leaks threaten to paralyze the govern-
ment in its handling of covert operations. Un-
fortunately, the concern is not misplaced. The
selective leak has become a principal means of
waging bureaucratic warfare. Opponents of an
operation kill it with a leak; supporters seek to
build support through the same means.
We have witnessed over the past years a sig-
nificant deterioration in the integrity of proc-
ess. Rather than a means to obtain results more
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satisfactory than the position of any of the indi-
vidual departments, it has frequently become
something to be manipulated to reach a specif-
ic outcome. The leak becomes a primary instru-
ment in that process.
This practice is destructive of orderly gov-
ernance. It can only be reversed if the most
senior officials take the lead. If senior decision-
makers set a clear example and demand com-
pliance, subordinates are more likely to con-
form.
Most recent administrations have had careful-
ly drawn procedures for the consideration of
covert activities. The Reagan Administration
established such procedures in January, 1985,
then promptly ignored them in their consider-
ation of the Iran initiative.
before the National Security Council. The At-
torney General is currently a member of the
Council by invitation and should be in a posi-
tion to provide legal advice to the Council and
the President. It is important that the Attorney
General and his department be available to
interagency deliberations.
The Justice Department, however, should not
replace the role of counsel in the other depart-
ments. As the principal counsel on foreign af-
fairs, the Legal Adviser to the Secretary of
State should also be available to all the NSC
participants.
Of all the NSC participants, it is the Assistant
for National Security Affairs who seems to have
had the least access to expert counsel familiar
with his activities.
We recommend that each administration
formulate precise procedures for restricted
consideration of covert action and that, once
formulated, those procedures be strictly ad-
hered to.
5. The Role of the CIA. Some aspects of the
Iran arms sales raised broader questions in the
minds of members of the Board regarding the
role of CIA. The first deals with intelligence.
The NSC staff was actively involved in the
preparation of the May 20, 1985, update to the
Special National Intelligence Estimate on Iran.
It is a matter for concern if this involvement
and the strong views of NSC staff members
were allowed to influence the intelligence judg-
ments contained in the update. It is also of
concern that the update contained the hint that
the United States should change its existing
policy and encourage its allies to provide arms
to Iran. It is critical that the line between intel-
ligence and advocacy of a particular policy be
preserved if intelligence is to retain its integrity
and perform its proper function. In this in-
stance, the CIA came close enough to the line
to warrant concern.
We emphasize to both the intelligence com-
munity and policymakers the importance of
maintaining the integrity and objectivity of
the intelligence process.
6. Legal Counsel. From time to time issues
with important legal ramifications will come
The Board recommends that the position
of Legal Adviser to the NSC be enhanced in
stature and in its role within the NSC staff.
7. Secrecy and Congress. There is a natural ten-
sion between the desire for secrecy and the
need to consult Congress on covert operations.
Presidents seem to become increasingly con-
cerned about leaks of classified information as
their administrations progress. They blame
Congress disproportionately. Various cabinet
officials from prior administrations indicated to
the Board that they believe Congress bears no
more blame than the Executive Branch.
However, the number of Members and staff
involved in reviewing covert activities is large;
it provides cause for concern and a convenient
excuse for Presidents to avoid Congressional
consultation.
We recommend that Congress consider re-
placing the existing Intelligence Committees
of the respective Houses with a new joint
committee with a restricted staff to oversee
the intelligence community, patterned after
the joint Committee on Atomic Energy that
existed until the mid-1970s.
8. Privatizing National Security Policy. Careful
and limited use of people outside the U.S. Gov-
ernment may be very helpful in some unique
cases. But this practice raises substantial ques-
tions. It can create conflict of interest prob-
lems. Private or foreign sources may have dif-
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ferent policy interests or personal motives and
may exploit their association with a U.S. gov-
ernment effort. Such involvement gives private
and foreign sources potentially powerful lever-
age in the form of demands for return favors
or even blackmail.
The U.S. has enormous resources invested in
agencies and departments in order to conduct
the government's business. In all but a very few
cases, these can perform the functions needed.
If not, then inquiry is required to find out why.
We recommend against having implementa-
tion and policy oversight dominated by inter-
mediaries. We do not recommend barring
limited use of private individuals to assist in
United States diplomatic initiatives or in
covert activities. We caution against use of
such people except in very limited ways and
under close observation and supervision.
Epilogue
If but one of the major policy mistakes we
examined had been avoided, the nation's histo-
ry would bear one less scar, one less embar-
rassment, one less opportunity for opponents
to reverse the principles this nation seeks to
preserve and advance in the world.
As a collection, these recommendations are
offered to those who will find themselves in sit-
uations similar to the ones we reviewed: under
stress, with high stakes, given little time, using
incomplete information, and troubled by pre-
mature disclosure. In such a state, modest im-
provements may yield surprising gains. This is
our hope.
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Appendix A
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release December 1, 1986
President's Special Review Board
By the authority vested in me as President by the Constitution and laws of the
United States of America, and in order to establish, in accordance with the
Federal Advisory Committee Act, as amended (5 U.S.C. App. I), a Special
Review Board to review activities of the National Security Council, it is
hereby ordered as follows:
Section 1. Establishment. (a) There is established the President's Special
Review Board on the future role of the National Security Council staff. The
Board shall consist of three members appointed by the President from among
persons with extensive experience in foreign policy and national security
affairs.
(b) The President shall designate a Chairman from among the members of the
Board.
Sec. 2. Functions. (a) The Board shall conduct a comprehensive study of the
future role and procedures of the National Security Council (NSC) staff in the
development, coordination, oversight, and conduct of foreign and national
security policy; review the NSC staffs proper role in operational activities,
especially extremely sensitive diplomatic, military, and intelligence missions;
and provide recommendations to the President based upon its analysis of the
manner in which foreign and national security policies established by the
President have been implemented by the NSC staff.
(b) The Board shall submit its findings and recommendations to the President
within 60 days of the date of this Order.
Sec. 3. Administration. (a) The heads of Executive departments, agencies, and
independent instrumentalities, to the extent permitted by law, shall provide
the Board, upon request, with such information as it may require for purposes
of carrying out its functions.
(b) Members of the Board shall receive compensation for their work on the
Board at the daily rate specified for GS-18 of the General Schedule. While
engaged in the work of the Board, members appointed from among private
citizens of the United States may be allowed travel expenses, including per
diem in lieu of subsistence, as authorized by law for persons serving intermit-
tently in the government service (5 U.S.C. 5701-5707).
(c) To the extent permitted by law and subject to the availability of appropria-
tions, the Office of Administration, Executive Office of the President, shall
provide the Board with such administrative services, funds, facilities, staff,
and other support services as may be necessary for the performance of its
functions.
Sec. 4. General Provision. The Board shall terminate 30 days after submitting
its report to the President.
THE WHITE HOUSE,
December 1, 1986.
0
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Note
In the following narrative, citations to the Board's record are
indicated in parentheses. Where the citation is to a name, for ex-
ample "(McFarlane (1) 6)", it means Robert C. McFarlane's first
interview with the Board at page 6 of the transcript. The same
page in Mr. McFarlane's second interview would be designated
by "(McFarlane (2) 6)."
Representatives of those departments concerned with the na-
tional security of the United States reviewed the manuscript in
order to declassify it. The criteria for deletions in the interests of
the national security were: (1) protection of intelligence sources
and methods; (2) protection of negotiations and relations with
third countries; and (3) protection of life. The Board finds that
these criteria have been reasonably applied.
173-298 0-87--3
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Appendix B
The Iran/Contra
Affair: A Narrative
Quis custodiet ipsos custodes.
Juvenal, Satires, VI, 347
Introduction
In 1985, the United States began a process
that eventually included the shipment of ad-
vanced weapons unobtainable on the interna-
tional arms market to Iran for cash and the
freedom of Americans kidnapped and held hos-
tage in Lebanon. Israel also sold such weapons
to Iran, and the United States resupplied Israel,
at least in part. In some instances, Iran appar-
ently arranged for the release of American citi-
zens, and perhaps nationals of other countries,
kidnapped in Lebanon. These transactions in-
volved American, Iranian, and Israeli middle-
men, and occurred at a time when the public
policy of the United States strongly deprecated
arms shipments to Iran and ransoming hos-
tages. Large sums changed hands. Large sums
are unaccounted for, and may have been divert-
ed to guerrilla groups in various countries,
including the resistance in Nicaragua, or to
middlemen.
A number of elements appear to have con-
verged at the origin of these transactions.
Without assigning priority, they include: (1) the
strategic importance of Iran and concern of in-
dividuals in the United States government to
restore something resembling normal relations
with that country; (2) a long history of Russian
and Soviet designs on Iran, and the perception
that the Soviet invasion of Afghanistan repre-
sented an episode in this history; (3) evidence
of Iranian influence with, and control over,
groups engaging in terrorist acts against citi-
zens and interests of the United States, its allies
and friends; (4) Americans held hostage in Leb-
anon by such groups; (5) Iranian efforts to
obtain advanced weapons for use against Iraq;
(6) Israel's interest, for a number of reasons, in
selling such weapons to Iran with the approval
or acquiescence of the United States; (7) the
perception by international arms dealers that
the American concern about the future course
of Iran and Americans held hostage, together
with Iran's wish to buy weapons controlled by
the United States, offered an opportunity for
quick, sure profits.
1. Background
On January 16, 1979, the Shah was over-
thrown, ending an intimate Iranian-American
relationship over twenty-five years old. Mutual
hostility and tension characterized American re-
lations with the Khomeini government, which
the seizure on November 4, 1979, of the Amer-
ican Embassy in Tehran intensified. From No-
vember 12 to 14, the United States adopted
economic sanctions culminating in the decision
on the 14th to "block" all Iranian government
property and interests in the United States. Ira-
nian oil could no longer be purchased, nor
weapons shipped, even those previously pur-
chased by Iran. (Order of 11/79, confirmed by
Executive Order, 4/17/80) The United States
broke diplomatic relations with Iran on April 7,
1980, and imposed further economic sanctions.
Some six weeks after the Embassy seizure, the
Soviet Union invaded Afghanistan. Since short-
ly thereafter, the United States and Iran have
pursued compatible policies towards the
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Afghan resistance. On September 22, 1980,
Iraq attacked Iran.
The hostage crisis begun November 4, 1979,
continued until the end of the Carter Adminis-
tration. At that time, direct, formal communica-
tions between Washington and Tehran re-
sumed with the establishment, pursuant to the
Algiers Accord of January 19, 1981, of the
Iran-United States Claims Tribunal at the
Hague in 1981. That agreement partially lifted
economic sanctions, but the arms embargo was
reinforced. In 1983, the United States helped
bring to the attention of Tehran the threat in-
herent in the extensive infiltration of the gov-
ernment by the communist Tudeh Party and
Soviet or pro-Soviet cadres in the country.
Using this information, the Khomeini govern-
ment took measures, including mass execu-
tions, that virtually eliminated the pro-Soviet
infrastructure in Iran.
A. Intellectual Threads in the
NSC Staff: 1984
From the spring of 1982 through the
summer of 1984, interagency groups attempted
to formulate "a security strategy" for South-
west Asia. (Teicher 6-7) At the beginning of
1984, Geoffrey Kemp, Senior Director for Near
East and South Asian Affairs on the staff of the
National Security Council ("NSC") and the
principal NSC staff officer responsible for the
Persian Gulf, (id at 6), wrote a memorandum
to Robert C. McFarlane, Assistant to the Presi-
dent for National Security Affairs and head of
the NSC staff, recommending that the Adminis-
tration reevaluate its attitude towards Iran. He
viewed the Khomeini government as a menace
to American interests, and suggested a revival
of covert operations against it. According to
Kemp, Tehran's politics and policies enhanced
Syria's standing among Arab states, and threat-
ened western access to Persian Gulf oil. Kho-
meini's Iran was also believed to have engaged
directly or indirectly, in terrorist acts against
citizens and interests of the United States, its
friends and allies. He reported that exiled Ira-
nians, with whom he regularly communicated,
hoped that, with foreign help, they might in-
stall. a pro-Western government. Suggestions of
divisions in the country and support from
Saudi Arabia for the exiles encouraged Kemp
to submit his proposal. (Kemp to McFarlane,
1/13/84)
Kemp prepared his memorandum during a
period in which a number of foreign nationals
living in Lebanon were kidnapped by groups
known to have important ties to Iran. Further,
the United States determined that Iran had
played a role in hijackings and bombings, nota-
bly the bombings of the American Embassy and
of the Marines barracks in Beirut on October
23, 1983. Evidence of Iranian complicity in
such events caused the United States to desig-
nate Iran a sponsor of international terrorism
and to impose additional controls on exports to
Iran on January 23, 1984. Among those kid-
napped after Kemp submitted his memoran-
dum to McFarlane was William Buckley, CIA
Chief of Station in Beirut, seized on March 16,
1984. Buckley eventually died in captivity.
On August 31, 1984, McFarlane formally re-
quested an interagency analysis of American re-
lations with Iran after Khomeini. (NSSD 5-84,
8/31/84; Teicher 7) According to the detailed
interagency study completed in October 1984,
Khomeini's death was probably a precondition
to changes in Iranian policies and the realistic
prospect of improved Iranian-American rela-
tions. The study, which incorporated the analy-
sis of a Special National Intelligence Estimate
("SNIE") then in preparation on Iran, conclud-
ed that the possibility of resuming arms ship-
ments to Iran depended on Iran's willingness
to restore formal relations, which itself turned
on Iran's perception of the importance of such
shipments and the American perception of the
impact of such shipments on the regional bal-
ance of power. (Enclosure to Hill to McFarlane,
10/19/84) The study conveyed an impression
of relative American powerlessness to affect
events in Iran, powerlessness that would con-
tinue indefinitely. (Id.)
The CIA reached a similar conclusion with
regard to the utility of covert action in Iran to
improve the United States position. The CIA
Deputy Director of Operations considered the
Marxist Mujaheddin E Khalq to be well orga-
nized, influenced by the Soviets, and likely to
succeed Khomeini. (DDO to Poindexter, 12/
11/84)
The State Department distilled these views
into a draft National Security Decision Directive
("NSDD") at the end of 1984. This document
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would have directed the United States govern-
ment to maintain and expand its capability to
exploit opportunities that might arise in Iran,
but reaffirmed, absent changes in the Iranian
situation, existing policies. Thus, the draft
NSDD would continue the policy of discourag-
ing arms transfers to Iran. (Draft NSDD 5, in
Hill to McFarlane, 12/14/84) Howard Teicher,
Senior Director for Political-Military Affairs on
the NSC staff, told the Board that these inter-
agency efforts "produced no ideas which any of
us involved considered to be of great value in
terms of significantly affecting our posture in
the region." (Teicher 8)
B. Further 1984 Threads:
Iran, Weapons, and Hostages
By the summer of 1984, Iranian purchasing
agents were approaching international arms
merchants with requests for TOW missiles.
The Chief of the Near East Division of the
CIA's Directorate of Operations ("C/NE") told
the Board.
We have in the DDO probably 30 to
40 requests per year from Iranians and
Iranian exiles to provide us with very
fancy intelligence, very important in-
ternal political insights, if we in return
can arrange for the sale of a dozen
Bell helicopter gunships or 1,000
TOW missiles or something else that
is on the contraband list.
(C/NE (2) 98)
By November 1984, Iranians -with connec-
tions to the Tehran government were indicat-
ing a connection between such weapons and
the release of Americans kidnapped in Leba-
non. Theodore Shackley, a former CIA officer,
reported that, in meetings November 19-21,
1984, in Hamburg, West Germany, General
Manucher Hashemi, former head of SAVAK's
Department VIII (counterespionage), intro-
duced him to Manuchehr Ghorbanifar. Ha-
shemi said Ghorbanifar's contacts in Iran were
"fantastic." ("American Hostages in Lebanon"
at 2 (11/22/84)) Ghorbanifar was already
known to the CIA, and the Agency did not
have a favorable impression of his reliability or
veracity. (Cave 3-5, 44; C/NE (2) passim) Shack-
ley reported that Ghorbanifar had been a
SAVAK agent, was known to be an internation-
al dealmaker, and, generally, an independent
man, difficult to control. Ghorbanifar told
Shackley that he and other Iranians wanted to
help shape Iran's future policies and bring
Tehran closer to the West.
He feared that Iran would become a
Soviet satellite within the near term-
three to five years-if he and people
like General Hashemi did not do
something to stem the tide. He rhe-
torically asked what can we do, for de-
spite our ability to work with the
"moderates" in Iran, we can't get a
meaningful dialogue with Washington.
According to Ghorbanifar, it is Presi-
dent Reagan who has the destiny of
the Iranian people in his hand. When
at this juncture Ghorbanifar was asked
if he had tried to open a dialogue with
the Americans, he said, "We know the
CIA in Frankfurt. They want to treat
us like kleenex-use us for their pur-
pose and then throw us out the
window. We can't work with them as
they are unreasonable and unprofes-
sional. In fact, if you check on me with
them, they will tell you I am unreason-
able and undisciplined."
("American Hostages in Lebanon," supra, at 2)
To prove that he and Hashemi had influen-
tial contacts in Iran, Ghorbanifar suggested
that Iran would be willing to trade some Soviet
equipment captured in Iraq for TOW missiles.
He further suggested the possibility of a cash
ransom paid to Iran for the four Americans
kidnapped in Lebanon (including Buckley),
-who, he said after making telephone calls, were
alive. The. transaction could be disguised by
using Ghorbanifar as a middleman. Shackley
reported that Ghorbanifar needed a response
by December 7, 1984. According to Shackley,
later that month, the State Department in effect
replied: "'thank you but we will work this
problem out via other channels.' " ("American
Hostages in Lebanon" at 1 (6/7/85).1
' An unattributed and undated note analysed meetings involv-
ing Hashemi, Shackley, and Iranians at about this time and in
March 1985, when the same topics noted by Shackley were dis-
cussed. This note added that "[w]e determined that the Iranan
[sic] side was only interesed [sic] in money." See infra p. B 11.
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II. NSC Staff Diplomacy and
Thinking: January July 1985.
At the beginning of 1985, the Administration
adopted new procedures for approving and co-
ordinating covert actions. These were meticu-
lously set forth in elaborate detail in a National
Security Decision Directive signed by the Presi-
dent. They included comprehensive interagen-
cy evaluation of proposed covert actions, co-
ordinated review of actions undertaken, and
notification of Congress in accordance with
statute. (NSDD 159, 1/18/85) The NSDD also
specified that the President would approve in
writing all covert action Findings made pursu-
ant to section 501 of the National Security Act.
A. The NSC Staff in Action
Early in 1985, the NSC staff undertook ac-
tions aimed at the least to improve the govern-
ment's knowledge about Iran. Michael Ledeen,
who, from November 1984 to December 1986,
was an NSC consultant on terrorism and cer-
tain Middle East questions, including Iran, told
the Board that the NSC staff regarded Iran as a
strategically important place about which the
United States had inadequate information.
(Ledeen (1) 7-8) McFarlane was prepared in
January to send Ledeen to Europe on a mission
of inquiry. In this connection, Rear Admiral
Poindexter, McFarlane's deputy, wrote a letter
of introduction saying Ledeen "has the com-
plete confidence of Bud McFarlane and
myself." (Poindexter to Schurer, 1/4/85. See
also McFarlane to Grossouvre, 1/4/85) In the
early spring of 1985, Ledeen reported to
McFarlane a discussion about Iran he had had
with a European intelligence official who be-
lieved the situation there was more fluid than
the United States government seemed to think.
Ledeen's interlocutor suggested speaking to
the Israelis as the best, quick way to learn
Ledeen told the Board that Ghorbanifar had tried for some
time to establish contact with the United States. "[H]aving failed
to reach us at the front door, he went around to the side door."
Shackley transmitted his report to General Walters. (Ledeen (1)
41-42) Ledeen-and Shackley separately told the Board that, in
May 1985, Shackley-told Ledeen that he had no response from
Walters. In June 1985, he gave the report, together with an
update, to Ledeen who, without reading it, he said, passed it to
North with the report "that Shackley had had a contact with an
Iranian who had said he thought he could ransom Buckley."
(Ledeen (1) 43); Ledeen (2) 2-6; Shackley 13-24)
about events in Iran. According to Ledeen,
McFarlane
suggested that I talk to Peres privately and
ask him whether Israel had better informa-
tion about Iran than we had, whether
Israel had enough information about Iran,
about Iranian terrorism, about Iran's role
in international terrorism, all these various
subjects, so that one could evaluate a ra-
tional policy and, if so, whether they would
be willing to share that information with
us.
(Ledeen (1) 8-9) 2
Documents suggest a somewhat different
origin and purpose for the trip. Donald Fortier,
Special Assistant to the President and Senior
Director for Political-Military Affairs, reported
to McFarlane on April 9, that Ledeen told him
on April 8 that McFarlane was prepared to ap-
prove Ledeen's travelling to Israel (apparently
a previous trip had been cancelled) if Fortier,
Covey, and Teicher approved. Fortier won-
dered if Ledeen had accurately represented
McFarlane's view. Fortier, Covey, and Teicher.
disapproved of using Ledeen as the govern-
ment's "primary channel for working the Iran
issue with foreign governments, and we think
you should probably should [sic] not provide a
formal letter." (Fortier PROF note to McFar-
lane, 4/9/85, 10:22:14) On the other hand,
they thought he could usefully carry two mes-
sages to Prime Minister Peres, whom Ledeen
came to know when, as Secretary of State
Haig's advisor, he had responsibility for dealing
with the Socialist International. (Ledeen (1) 6)
1) the White House feels it is essential to
begin to develop a more serious and co-
ordinated strategy for dealing with the Ira-
nian succession crisis-a crisis that is
almost certain to turn on outside involve-
ment of one kind or another; and 2) we
would like his ideas on how we could co-
operate more effectively. The last point is
2 Ledeen told the Board that McFarlane approved all his trips,
except for his vacation in Israel in July-August 1985, and the
NSC paid his expenses. Ledeen said he considered himself an
employee of the United States while on these trips, and made
clear to his interlocutors that he had no authority to negotiate,
but would "report fully and accurately everything that transpired
in these discussions and that I would, if asked, report and com-
municate fully and accurately back. to them whatever decisions
were made in Washington." (Ledeen T-15)
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a hard one for us to ask our intelligence
community to communicate, since we sus-
pect they may be part of the problem. We
don't think Mike should be the one to ask
Peres for detailed operational information;
he probably doesn't know, and even if he
did, this should be reserved for official
channels once we have arrived at ideas for
restoring better cooperation.
(Fortier PROF note to McFarlane, 4/9/85,
10:22:14) On his own initiative, on April 9,
Ledeen made arrangements to see Prime Minis-
ter Peres. Fortier and Teicher thought it wise
for Teicher to sound out Nimrod Novik, the
Prime Minister's Political Advisor, to see if
Ledeen would be welcome. (Fortier PROF note
to McFarlane, 4/9/85, 11:41:22) McFarlane ap-
proved the check with Novik. "If it turns up
negative, simply tell Mike that the meeting is
not sponsored by us and he should not so rep-
.resent." (McFarlane PROF note to Fortier, 4/
9/85, 12:45:22) He also wrote Fortier:
Yes I think it is entirely worthwhile to co-
operate closely with Iran [sic: Israel] in our
planning for Iranian succession. . . . As a
separate matter I want to talk to Shultz so
that he is not blindsided when Sam Lewis
[Ambassador to Israel] reports-as he will
surely find out-about Mike's wanderings.3
So for the moment let's hold on the
Ledeen aspect. I will get back to you. I do
consider planning for the succfession [sic]
to be one of our greatest failures and vul-
nerabilities so I am very glad you are turn-
ing to it.
(McFarlane PROF note to Fortier, 4/9/85,
11:22:47)
Ledeen traveled to Israel and met Prime
Minister Peres on May 4 or 5, 1985. (Ledeen
(1) 10) Ledeen told the Board that, "in es-
sence," Prime Minister Peres
said that while he thought their informa-
tion was probably better than ours, he did
not consider it satisfactory and he didn't
feel that it was sufficient for them to base
any kind of serious Iran policy, but that he
agreed that it was an important matter and
8 Apparently Ledeen thought he could make the trip without
Ambassador Lewis finding out about it. McFarlane doubted it
was possible. (McFarlane PROF note to Fortier, 4/9/85,
12:45:22)
said that they would be happy to work with
us to try to develop better information in
all these areas-the internal Iranian situa-
tion, the Iran role in terror, general inter-
national terrorist questions and so forth.
So he constituted a group of people out-
side the government, not government offi-
cials, to work with us to study the Iran
question and the Iranian terrorist issue.
The agreement was that each of us would
try to find out what our respective govern-
ments knew about Iran. We would then sit
down, compare notes, and see if possibly
by putting them together we might be able
to develop some kind of useful picture.
(Id. at 10-11)
In his second interview with the Board, Ledeen
added that the Prime Minister
was happy to work together to try to devel-
op better information about Iran, but he,
contrary to all these newspaper reports,
which continue to drive me crazy and I
don't know where they come from, there
was no discussion of contacts with Iran,
none. There was no discussion of hostages.
And except for this one final point where
he said we have received a request from
the Iranian government to sell them this
quantity of materiel, we will not do it with-
out explicit American approval, will you
please raise it with McFarlane when you
get back to Washington and tell me shall
we do it or shall we not, there was no dis-
cussion of weapons or trade or relations or
anything.
It was simply a discussion of what could be
learned about Iran and how could we
better work together to understand that
situation.
[T]here was no discussion of policy at all
between me and Peres. It was simply a dis-
cussion of information, and then hypotheti-
cally if there were information and they
had policy recommendations to make, then
okay. But we never got to them. It was
purely a research trip.
(Ledeen (2) 10-11)
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Shlomo Gazit, President of Ben Gurion Uni-
versity and a former chief of Israeli intelli-
gence, led the Israeli team. Gazit still had good
relations with Israeli intelligence and could
direct both the military and Mossad to provide
information. Ledeen did not know the other Is-
raelis, but assumed that David Kimche, Direc-
tor General of the Israeli Foreign Ministry,
worked on this matter. (Ledeen (1) 11)
When Ledeen returned to Washington on
May 13, he called Fortier with the news of
"very positive feedback. [Ledeen] will brief me
tomorrow on what that really means." (Fortier
PROF note to Poindexter, 5/13/85, 18:12:20)
According to Ledeen, during the May conversa-
tion, Prime Minister Peres also asked him to
ask McFarlane if the United States would ap-
prove an arms shipment to Iran. Ledeen re-
called that "[i]t was either ammunition for artil-
lery pieces or some quantity of artillery pieces,
but it had to do with artillery." (Ledeen (2) 13)
Israel would not ship it to Iran "without explic-
it American approval." (Ledeen T-2) Ledeen
said McFarlane subsequently authorized him to
tell the Prime Minister "it's okay, but just that
and nothing else." (Id.)
B. Intellectual Formulations:
The NSC and Intelligence
Estimates
After Ledeen reported to McFarlane on the
trip, McFarlane asked Fortier to direct the CIA
to prepare a special intelligence estimate on
Iran. (Ledeen (1) 11-12) Graham Fuller, Na-
tional Intelligence Officer for Near East and
South Asia, and Teicher participated in this
effort. Fuller told the Board that he "regularly"
saw Teicher who
shared a lot of my feelings about our stra-
tegic bind vis a vis Iran. And there were
others as well in Government, but Howard
was the one I was most well aware of in
that regard, who felt that we should at
least be working towards [sic] an expanded
policy towards Iran, expanded in the
broadest sense, more than a purely nega-
tive one of no arms and slap down on ter-
rorism. It was in fact that NSDD that in the
end got nowhere that was part of the ra-
tionale for the estimate that we did in '85.
(Fuller 28-29)4
On May 17, 1985, Fuller submitted a five-
page memorandum to William Casey, Director
of Central Intelligence, entitled "Toward a
Policy on Iran." Fuller began his analysis as fol-
lows:
1. The US faces a grim situation in devel-
oping a new policy toward [sic] Iran.
Events are moving largely against our in-
terests and we have few palatable alterna-
tives. In bluntest form, the Khomeini
regime is faltering and may be moving
toward a moment of truth; we will soon
see a struggle for succession. The US has
almost no cards to play; the USSR has
many. Iran has obviously concluded that
whether they like Russia and Communism
or not, the USSR is the country to come to
terms with: the USSR can both hurt and
help Iran more than the US can. Our
urgent need is to develop a broad spec-
trum of policy moves designed to give us
some leverage in the race for influence in
Tehran.
(Fuller to DCI/DDCI, "Toward a Policy on
Iran," 5/17/85) Fuller then noted that the
United States and Soviet Union both supported
Iraq, but for different reasons, and this situa-
tion was inherently unstable. He wrote that
both countries "lack our preferred access to
Iran. Whoever gets there first is in a strong po-
sition to work towards [sic] the exclusion of the
other." (Id. at 1) Fuller reported that the intel-
ligence community monitored "Soviet progress
toward developing significant leverage in
Tehran," progress, which, however uneven,
merited a response given the stakes. (Id.) He
then analyzed American policy.
The United States had two attitudes towards
Iran. First, it was prepared to respond with
force if Iran was involved in a terrorist attack.
Second, it strove to deny arms to Iran. Fuller
believed that these "twin pillars" were no
longer sensible because they were adopted to
4 On May 13, 1985, Fortier informed Poindexter that "[w]e
have a draft [of the NSDD?]. I asked Howard and Steve [Rosen]
to rework it. I will give you a copy of what we have and of the
suggestions I gave them on how it could [be] improved. . . . We
have also done a lot of additional work on outlining require-
ments for the SNIE." (Fortier PROF note to Poindexter, 5/13/
85, 18:12:20)
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deal with a vacuum in Iran and a strong Kho-
meini. These conditions no longer existing,
Fuller concluded, the policy pillars had become
entirely negative "and may now serve to facili-
tate Soviet interests more than our own." (Id. at
2) While acknowledging the difficulty of formu-
lating alternatives, he thought that
[i]t is imperative, however, that we perhaps
think in terms of a bolder-and perhaps
riskier policy which will at least ensure
greater US voice in the unfolding situation.
Right now-unless we are very lucky
indeed-we stand to gain nothing, and lose
more, in the outcome of developments in
Iran, which are all outside our control.
(Id. at 3)
"Nobody has any brilliant ideas about how to
get us back into Tehran," Fuller wrote, (id.); he
then analysed a number of alternative courses,
including helping Iraq to win the war and en-
couraging friendly states to make arms avail-
able to Iran as a means for gaining influence in
Tehran. He noted that an Iraqi victory might
lead to the establishment of an even more radi-
cal regime in Tehran. Attacking Iran's radical
ally Libya would demonstrate our resolve and,
possibly, remove Qadhafi. Iran's other radical
ally, Syria, could only be pressured by Israel,
which had no wish for conflict at this time. He
thought demonstrating to Iranians that we were
not hostile by withdrawing our fleet from the
Persian Gulf and making public statements
about our friendly intentions, for example,
might strengthen "Iranian moderates-and op-
portunists;" it also might produce derision in
Tehran. The best course, he concluded, was to
have friendly states sell arms that would not
affect the strategic balance as a means of show-
ing Tehran that it had alternatives to the Soviet
Union. (Id. at 5) Were the Soviets to gain in
Iran, we would have to strengthen our commit-
ments to Turkey and Pakistan, as they are logi-
cal next Soviet targets. (Id. at 4) The Director
of Central Intelligence provided a copy of this
memorandum to the Secretary of State on June
4, 1985. (Note on routing sheet)
On May 20, 1985, the Intelligence Communi-
ty circulated a revision of its SNIE of October
1984 on Iran (SNIE 34-84, Iran: The Post Kho-
meini Era) According to Fuller,
I think the [intelligence] community had
very definitely felt that most of the Iranian
regime perceived us as implacably hostile
towards an Islamic republic in principle,
and that maybe there were some gestures
that could be made that would suggest that
we were rather more sophisticated in our
approach to it than simply that.
(Id. at 11)
The first SNIE and the update tried to pre-
dict Iran's course over the next six to twelve
months, and acknowledged the difficulty that
effort implied. Its conclusions were consistent
with Fuller's earlier memo to the DCI. The
Community expected Khomeini's health to con-
tinue to decline, and predicted that Iran would
soon enter a period of instability, in part the
result of the regime's declining popularity, the
growth of private armies, and jockeying for po-
litical advantage by competing groups. One
could confidently expect "serious instability"
before Khomeini's death. Already the Commu-
nity saw signs of opposition to the radicals
among industrial workers. The prospects for
the Communist left (the Tudeh Party and Mu-
jahedin-e Khalq) were hard to estimate, but the
Soviets were discreetly keeping their options
open by allowing their East European allies to
sell weapons to Iran while the U.S.S.R. publicly
supported Iraq. "Tehran's leadership seems to
have concluded," the Community wrote, "that
improvement of relations with the USSR is now
essential to Iranian interests; any improvement
of ties to the United States is not currently a
policy option." (Iran: Prospects for Near-Term In-
stability at 5 (5/20/85) (to holders of SNIE
34-84)) Moscow would offer a number of in-
centives in return for Iran's ceasing to support
the Afghan resistance. The United States cur-
rently lacked an ability to counter Soviet
moves. As a whole, however, the West could
take steps to improve its position.
The United States is unlikely to be able to
directly influence Iranian events, given its
current lack of contact or presence in Iran.
European states and other friendly states-
including Turkey, Pakistan, China, Japan,
and even Israel-can provide the next
most valuable presence or entree in Iran to
help protect Western interests. The degree
to which some of these states can fill a
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military gap for Iran will be a critical meas-
ure of the West's ability to blunt Soviet in-
fluence. These states can also play a major
role in the economic life of the country,
lessening its isolation and providing alter-
natives to Soviet influence or that of the
radical state.
(Id. at 12) According to Fuller, nothing in the
May 1985 SNIE proved to be "highly contro-
versial" in interagency deliberations. (Fuller
22)
Teicher told the Board that this estimate
became the basis for a new draft NSDD on
Iran. (Teicher 8-9) On May 28, Fortier wrote
McFarlane:
We spent the better part of the day work-
ing on the Iran NSSD [sic]. I have Dennis
[?Ross, at that time an NSC consultant]
here looking at the recent spate of Soviet
activity and the levers we may have arising
out of the war and other circumstances. I
think we need about one more full day
before we send up a draft for you and John
[?Poindexter] to review. We also just got a
bootleg copy of the draft SNIE. We
worked closely with Graham Fuller on the
approach, and I think it really is one of the
best yet. Iran may come up in the breakfast
tomorrow. If pressed for action you can
credibly promise paper within the next few
days. I also think the Israeli option is one
we have to pursue, even though we may
have to pay a certain price for the help.
I'm not sure though that we have the right
interlocutor. Mike has a call into me now.
His message is that he needs to see me ur-
gently to follow up on his weekend conver-
sation and to get a new plane ticket.
Would appreciate guidance and substantive
feedback. Thanks.
(Fortier PROF note to McFarlane, 5/28/85
18:52:14)
On June 11, 1985, Fortier and Teicher sub-
mitted to McFarlane a draft NSDD on Iran that
Teicher had worked on for much of May. They
described it as
provocative. It basically calls for a vigorous
policy designed to block Soviet advances in
the short-term while building our leverage
in Iran and trying to restore the U.S. posi-
tion which existed under the Shah over the
longer-term. This would require a sharp
departure from ongoing . . . measures,
most notably the supply of Western mili-
tary hardware, U.S. initiative to dialogue
with Iranian leaders. . . .
Because of the political and bureaucratic
sensitivities, we believe that it would be
best for you to provide a copy of the
NSDD draft only to Shultz and Weinberger
(eyes only) for their comments. Whether to
proceed with a restricted SIG, NSPG or
other forum would depend on their reac-
tions.
(Fortier and Teicher to McFarlane, 6/11/85)
Teicher's draft NSDD, which had incorporat-
ed some comments of Vincent Cannistraro,
Senior Director for Intelligence and the NSC
staff member principally responsible for moni-
toring covert operations, set forth these points
at length. Mirroring the analysis by Fuller, the
NSDD defined immediate United States inter-
ests as:
(1) Preventing the disintegration of Iran, and
preserving Iran as an independent buffer be-
tween the Soviet Union and the Persian Gulf;
(2) Limiting Soviet political opportunities in
Iran, while positioning the United States to
adjust to changes;
(3) Maintaining access to Persian Gulf oil and
transit through the Gulf of Hormuz;
(4) Ending Iranian sponsorship of terrorism,
and policy of destabilizing neighboring states;
Longer-term goals were:
(1) Restoration of Iran's moderate and con-
structive role in the non-Communist political
community, the Persian Gulf region, and "the
world petroleum economy;"
(2) Continued Iranian resistance to Soviet ex-
pansion (in particular, in Afghanistan);
(3) An early end to the Iran-Iraq war without
Soviet mediation or change in the regional bal-
ance of power;
(4) Elimination of Iranian human rights
abuses;
(5) Movement toward the normalization of
Iranian-American relations;
(6) Resolution of American legal and finan-
cial claims in the Hague tribunal;
(7) Iranian moderation on OPEC pricing
policy.
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To begin the process of reaching these goals,
Teicher and Fortier recommended that the
United States:
(1) Encourage Western allies and friends
to help Iran meet its import requirements
so as to reduce the attractiveness of Soviet
assistance and trade offers, while demon-
strating the value of correct relations with
the West. This includes provision of select-
ed military equipment as determined on a
case-by-case basis.
(Draft NSDD, U. S. Policy Toward [sic] Iran at
1-2, 5-6, in McFarlane to Secretaries of State
and Defense, 6/17/85)
(2) Cooperate with friendly intelligence serv-
ices to improve ability to counter clandestine
Soviet activities in Iran;
(3) Increase contacts with allies and friends
on the Iranian situation and be ready to com-
municate through them to Iran;
(4) Establish links with, and provide support
to, Iranian leaders who might be receptive to
efforts to improve relations with the United
States;
(5) Avoid actions that could alienate Iranian
groups that might respond favorably to such ef-
forts;
(6) Respond to Iranian supported terrorism
with military action against terrorist infrastruc-
tures;
(7) Increase our Voice of America effort to
discredit Moscow's Islamic credentials;
(8) Develop a ". . . plan" for supporting
United States policy in various contingencies;
(9) Continue to encourage third party efforts
to seek an end to the Iran-Iraq war. (Id.)
The Secretary of State responded to the draft
NSDD on June 29, 1985. "The strategic impor-
tance of Iran and the value of reassessing our
policy toward it are clear," he wrote. "The
draft NSDD constructively and perceptively ad-
dresses a number of the key issues. I disagree,
however, with one point in the analysis and one
specific recommendation." (Comment on Draft
NSDD, Shultz to McFarlane, 7/29/85) In his
view,
the draft NSDD appears to exaggerate cur-
rent anti-regime sentiment and Soviet ad-
vantages over us in gaining influence. Most
importantly, its proposal that we permit or
encourage a flow of Western arms to Iran
is contrary to our interest both in contain-
ing Khomeinism and in ending the ex-
cesses of this regime. We should not alter
this aspect of our policy when groups with
ties to Iran are holding US hostages in
Lebanon. I, therefore, disagree with the
suggestion that our efforts to reduce arms
flows to Iran should be ended. If the
NSDD is revised to reflect this concern, I
would like to see the draft again before it
is put in final form.
(Id.)
Secretary Shultz devoted the rest of his com-
ments to further analysis of his reasons for op-
posing arms shipments to Iran and his dis-
agreement with the NSDD's portrayal of Iran's
relations with the Soviet Union. "The inherent
limits on the Iranian-Soviet relationship are un-
derplayed in the NSDD draft. Iranians have a
deep historical mistrust of the USSR. The Ira-
nian feelers to the Soviets are for arms and for
limitations on Soviet arms supplies to Iraq; the
Iranians do not seek a closer relationship." Any
attempt at a closer relationship with the Soviet
Union would encounter resistance. His com-
ment further reminded McFarlane that, under
the Shah, "Iranian-Soviet relations were closer
and more cooperative than they are now." (Id.)
The Secretary had no objection to passing a
message to the Speaker of the Iranian Majlis
(Parliament) Rafsanjani while abroad express-
ing the United States interest in "correct" rela-
tions, and to encourage allies and friends to
broaden their commercial relations with Iran.
Such initiatives to diminish Iran's isolation
should not undermine pressure to bring an end
to the war and restrain arms flows. The com-
ment concluded that this two track policy re-
mained best. (Id.)
The Secretary of Defense submitted his reac-
tion to the draft NSDD on July 16, 1985. He
told the Board that his initial reaction was to
write "absurd" in the margin. "I also added
that this is roughly like inviting Qadhafi over
for a cozy lunch." (Weinberger 5) While his
formal comment noted his agreement
with many of the major points in the
paper, several of the proposed actions
seem questionable. Moreover, it is ex-
tremely difficult to consider an explicit re-
vision of our policy toward Iran as long as
we continue to receive evidence of Iranian
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complicity in terrorist actions and planning
against us. I do not believe, therefore, an
NSDD should be issued in the proposed
form.
(Weinberger to McFarlane, 7/16/85) The Sec-
retary of Defense "fully" supported the short-
term goal of blocking Soviet expansion into
Iran.
Under no circumstances, however, should
we now ease our restriction on arms sales
to Iran. Attempting to cut off arms while
remaining neutral on sales to either bellig-
erent is one of the few ways we have to
protect our longer-range interests in both
Iran and Iraq. A policy reversal would be
seen as inexplicably inconsistent by those
nations whom we have urged to refrain
from such sales, and would likely lead to
increased arms sales by them and a possi-
ble alteration of the strategic balance in
favor of Iran while Khomeini is still the
controlling influence. It would adversely
affect our newly emerging relationship with
Iraq.
Secretary Weinberger then enumerated those
actions-improving intelligence gathering capa-
bilities as recommended in the SNIE, establish-
ing contacts with "moderates", whom intelli-
gence might identify as favoring policies favor-
able to U.S. and Western interests; communi-
cating our interest in correct relations through
allies and friends while remaining neutral in
the Iran-Iraq war; pressing the Khomeini gov-
ernment in public statements to mitigate its
hostile policies, while encouraging opponents
of those policies; and the like-he believed best
calculated to achieve United States goals in the
region. He concluded by reaffirming his sup-
port for present policies in face of Iran's
"international lawlessness." He emphasized
that "[c]hanges in policy and in conduct, there-
fore, must be initiated by a new Iranian govern-
ment." The United States should encourage
change, and support moderation and the devel-
opment in the future of amicable relations. He
did not think the program outlined in the draft
NSDD served these goals. (Id.)
In contrast, the Director of Central Intelli-
gence wrote McFarlane on July 18, 1985, that
I strongly endorse the thrust of the draft
NSDD on U. S. Policy Toward Iran, particu-
larly its emphasis on. the need to take con-
crete and timely steps to enhance U.S. le-
verage in order to ensure that the USSR is
not the primary beneficiary of change and
turmoil in this critical country. While I am
broadly in agreement with its assessment
of the current political situation, the NSDD
needs to reflect more fully on the complex
of Soviet motives and recent actions to-
wards Iran and their implications for U.S.
policy initiatives... . .
(Casey to McFarlane, 7/19/85) The Director of
Central Intelligence then enumerated what he
considered to be substantial weaknesses in the
intelligence analysis of the draft NSDD. (Id.)
Teicher told the Board that the reactions of
the Secretaries of State and Defense brought
inter-agency consideration of a new Iranian
policy to "a standstill." (Teicher 13) Teicher
sought guidance from Fortier, Poindexter, and
"perhaps with McFarlane." (Id.) They asked
him to see if the process had any other ideas.
After discussing the matter with Richard
Murphy, Assistant Secretary of State for Near
East and South Asian Affairs, he concluded that
[i]t was clear there was no give and there
really wasn't any more creativity.
I went back to Fortier and I said the only
question is to do nothing, and hope that
the situation doesn't create or lead to the
negative dangerous situation that we see as
a possibility, or present the President with
a decision memorandum which lays out, in
very clear terms, the different perspectives
of his advisors and asks him to make a de-
cision.
In the event, I was advised to do nothing
and basically to stand down. I did not
produce a draft decision memorandum for
McFarlane to sent to the President.
That was some time in August, about mid-
August, 1985.
From that point on, until early March of
1986, I had no cognizance whatsoever of
the other track that was taking place on
Iran.
(Id. at 14)
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C. Events Keep the NSC's
Ideas Alive: January June
1985
Despite the criticisms of the Secretaries of
State and Defense, the ideas embodied in the
draft NSDD survived in action. This fact per-
haps reflected the turbulent environment in
which Teicher drafted the NSDD. A series of
kidnappings occurred in Lebanon in 1985: on
January 8, Jenco; on March 16, Anderson; on
March 22, Fontaine and Carton, both French;
on March 26, the British journalist Collett; on
May 22, the Frenchmen Kaufmann and Seurat;
on May 28, Jacobsen; on June 10, Sutherland.
In the-same period, meetings involving differ-
ent members of the NSC staff took place with
Israelis about Iran. The conversations became
more systematic as time passed. Contempora-
neous discussions among 'persons of various
nationalities about Iranian-American relations
also occurred. Together with violent events, es-
pecially including the hijacking of TWA Flight
847 in mid June 1985, they formed part of the
circumstances that seemed to have given life to
the policies advocated by Fuller, Teicher, For-
tier, McFarlane, and the Director of Central In-
telligence.
In a series of meetings beginning in January
1985, Yaacov Nimrodi, an arms merchant and
former Israeli Defense Attache in Tehran,
Ghorbanifar, Amiram Nir, Advisor to Prime
Minister Peres on Counterterrorism, and
Adolph Schwimmer, a long-time arms merchant
and, since September 1984, Special Advisor to
Prime Minister Peres, considered Iran and the
American hostages. They concluded that a plan
to gain the release of the hostages and to
"open up a dialogue with Iran" was realistic if
they could obtain American support. Roy Fur-
mark, a business associate of Adnan Khashoggi
and participant in at least one of the meetings,
told Charles Allen of the CIA that "profit was
certainly a motive but that the group did see
their efforts as leading toward stability in the
region and the release of the hostages." 5 (DCI
5 Roy Furmark, an associate of the Saudi businessman Adnan
Khashoggi, told the Board that he met Ghorbanifar in January
1985, and subsequently introduced him to Khashoggi. He re-
called that Ghorbanifar and Khashoggi had a number of conver-
sations about Middle Eastern politics. (Furmark 3) Ghorbanifar
and Khashoggi had a number of meetings starting in January
1985. Khashoggi reported Ghorbanifar's views on Iranian politics
to Poindexter, undated but after October 22,
1986)
The Board also obtained rather cryptic evi-
dence of a meeting in Cologne in late March
involving Iranians, including probably the chief
of the Iranian buying office, Dr. Shahabadi, a
friend of Adnan Khashoggi. (Unsigned and un-
dated note; Furmark 34)
Basic thrust of the meeting is that we
wanted to open discussions with Iranian
officials and we also wanted the hostages
freed. Shabadi said that he would discuss
this with Khameni'i and [a cleric] and come
back out to see us at subsequent meeting
this meeting never took place. However,
there were two phone conversations with
someone in Tehran who according to
Zaheri was [a cleric]. In this case there
were requests for weapons to show our
bona fides. These were turned aside. They
then tried to get boeing spare lkarts
[parts]. Finally gave us a list of ten items of
spare parts for a boeing. cast of characters
was Zaheri, Shoja'i, ghorbanifar (no direct
contact in his case) and Shahabadi. Zhaheri
khad a falling out with Shoja'i over money.
Zaheri finally gave up and returned to
Houston. We determined that the Iranan
side was only interesed in money.
(Original spelling and punctuation. Unsigned
and undated note) In May, Shackley recalled
discussing the hostage problem over lunch with
Ledeen. Shackley told him about his report on
his November 1984 meeting with Ghorbanifar.
Shackley remembered that Ledeen asked for a
copy of the report. Ledeen said people in the
government were interested in investigating the
hostage question, and asked if Shackley could
"find out whatever that was as a channel, if it is
still open." (Shackley 23)
On June 7, 1985, Shackley prepared a second
report on "American Hostages in Lebanon."
He gave it to Ledeen who passed it to LtCol
Oliver North, the NSC staff officer responsible
for counterterrorism. (Shackley 34; Ledeen (2)
5-6) Shackley reported that General Hashemi
had taken soundings with Iranians on the possi-
bility of arranging the freedom of Americans
to McFarlane in a long memorandum on July 1. (Id.; Ghorbanifar
37-38)
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kidnapped in Lebanon. On June 1, Ghorbanifar
told Hashemi that his Iranian friends had told
him the following:
-Iranian authorities were flooded with
proposals to help obtain the release of
American hostages in Lebanon. As a result,
they did not know who was who.
-Tehran was not interested in the human-
itarian ploy that had been put forth by
Ghorbanifar.6
-Tehran wanted the following:
(1) a dialogue with a responsible
American who can identify what he
represents;
(2) a discussion of a quid pro quo that
involves items other money.
We told Ghorbanifar that we would pass
on this commentary to "friends."
("American Hostages in Lebanon," 6/7/85)
D. NSC Staff Activity: May-
July 1985
On December 16, 1986, Secretary Shultz tes-
tified before the Senate Select Committee on
Intelligence (closed session), and subsequently
told the Board that, on May 30, Ambassador
Lewis in Tel Aviv reported that Ledeen was on
a "secret mission for the White House" and to
ask if Secretary Shultz knew "what was going
on."
The answer was no. Ambassador Lewis
said he had asked at the Israeli Ministry of
Defense about Mr. Ledeen and had been
told it was "too hot" to talk about, but that
Defense Minister Rabin would tell me
about it when he visited Washington.
(Shultz, 12/86, 4; SRB, 9) 7 When Secretary
Shultz met Defense Minister Rabin on June 1,
6 Perhaps a reference to Ghorbanifar's suggestion that the hos-
tages be ransomed for cash in a disguised transaction using him-
self as middleman. See supra p. B 3.
4 In his first interview, Ledeen told the Board that he made a
second trip to Israel at the end of May to meet with Gazit to find
out what the Israelis knew about the Iranian situation. (Ledeen
(1) 13, 14-16) In his second interview, Ledeen reported that, al-
though he thought he had made two trips to Israel in May, his
passport and other records do not corroborate his memory. He
concluded that he did . not return to Israel until July 1985.
(Ledeen (2) 15)
the Defense Minister mentioned neither
Ledeen nor Iran. (Id. at 5) The Secretary fur-
ther testified that an NSC staff member told a
member of his staff that Ledeen had asked
McFarlane for permission to follow up on his
earlier trip to obtain intelligence about Iran,
that McFarlane "was ambivalent, refused to
give Mr. Ledeen a letter to Prime Minister
Peres, but reportedly agreed to allow Mr.
Ledeen to pursue the matter. We were told
that Mr. Ledeen went to Israel and received a
positive response to this proposition." (Id. at
4-5) On June 6, 1985, Poindexter informed
Robert Kimmitt, at that time Executive Secre-
tary of the NSC, that McFarlane had decided to
cancel Ledeen's trip.
This activity concerned the Secretary of
State. He told the Senate Select Committee on
Intelligence that, on June 5, 1985, while he was
in Lisbon, he
sent a message to Mr. McFarlane complain-
ing about Mr. Ledeen's contact with the Is-
raelis, which had bypassed both Ambassa-
dor Lewis and myself. I said that Israel's
record of dealings with Iran indicates that
Israel's agenda is not the same as ours,
and an intelligence relationship with Israel
concerning Iran might not be one upon
which we could fully rely. I felt that "it
could seriously skew our own perception
and analysis of the Iranian scene. I said in
my message to Mr. McFarlane, "I am mys-
tified about the way this situation has been
handled and am concerned that it contains
the seeds of further embarassment and se-
rious error unless straightened out quick-
y.
On June 7, 1985, in Portugal, I received a
message from Mr. McFarlane saying that
he was "a little disappointed in my pre-
judgments", and that he had intended to
tell me about the matter but had not had
time to do so. He said "I am turning it off
entirely . . ." Mr. McFarlane said that it
had been an Israeli initiative and that Mr.
Ledeen was acting "on his own hook."
(Shultz, 12/86, 5-6)
Also on June 7, North was working on vari-
ous approaches to- achieve the release of those
Americans kidnapped in .Lebanon: He, submit-
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ted an action memorandum to McFarlane
asking approval for two efforts aimed to secure
the release of hostages. McFarlane approved
both. Under the first, the United States would
support efforts to find a private solution to the
problem of the American and French hostages
in Lebanon and the three Lebanese Da'Wa
prisoners in Kuwait whose release the hostage
holders demanded. "[T]he . . . operation will
likely have produced results or failed by June
16, 1985," North wrote. The second plan in-
volved the private ransoming of two hostages,
including Buckley, for $2 million.8 This oper-
ation would take "considerable time (contacts
inside Lebanon, financial transactions, and
rental of yacht/safehouse)"; thus, it was possi-
ble to undertake it at the same time as the pri-
vate efforts were underway. (North to McFar-
lane, 6/7/85) To implement this proposal,
North asked McFarlane to contact the Attorney
General to secure the services of two officers of
the Drug Enforcement Agency who would work
with the NSC staff on this matter. McFarlane
approved and wrote "North to follow up 6/10
w/AG." (Id.)
On June 14, 1985, two Lebanese men hi-
jacked TWA flight 847, and directed the pilot
to land at Beirut airport. There, the hijackers
removed thirteen Americans from the plane
and killed an American sailor. This episode abm
sorbed the government until the surviving hos
tages were released on June 29. On June 17,
the Director of Central Intelligence heard from
his wartime friend, John Shaheen, that a Dr.
Cyrus Hashemi, under indictment for attempt-
ing to sell arms to Iran, claimed to have dis-
cussed with the Iranian Foreign Ministry an ex-
change of hostages for the release of the
Da'Wa prisoners in Kuwait, TOW missiles, and
a nolle prosequi for Hashemi. (Casey to C/NE,
6/17/85) According to the CIA Inspector Gen-
eral, Israeli officials asked Ghorbanifar to use
his influence in Tehran to obtain the release of
hostages. (CIA/IG Chronology 2) On June 19,
Iran sent the United States a message to the
effect that Tehran wanted to do as much as it
could to end the TWA crisis. (Teicher to
McFarlane, 6/19/85) The United States re-
8 Documentary evidence suggests that the private source of
these funds was H. Ross Perot. On August 6, North'noted that
Perot had called with the news that an NBC reporter had asked
him to confirm that he had donated $2 million to obtain the re-
lease of hostages. ("6 Aug," note in North's handwriting)
sponded on June 21 that "[i]t is the view of the
United States that the government of Iran
cannot escape its responsibilities . . . to help
secure the release of the hostages. . . ." (DT
6/21/85 1828L) 9
At the beginning of July, McFarlane and
Ledeen had separate, but apparently related,
meetings with Schwimmer and Kimche, respec-
tively, in Washington. Ledeen told the Board
that Kimche called him early in the month to
ask him to meet Schwimmer. They met a week
later (probably July 11; see note 10 infra).
(Ledeen (1) 17) In his two interviews with the
Board, Ledeen recalled Schwimmer reporting
that he had recently met Ghorbanifar through
Schwimmer's friend, Khashoggi. Ghorbanifar's
knowledge of Iranian policies impressed the Is-
raelis.
Ghorbanifar had for the first time given
them what they considered to be a really
solid picture, in detail, of the internal Ira-
nian situation and the Iranian connection
to international terrorism.
And in addition he had various proposals
that he claimed to be representing on
behalf of the Iranian government, who
were high individuals inside the Iranian
government, and they thought it was im-
portant that I should come and meet this
person.
And I said [I] was planning to come to
Israel anyway and that I would check with
Bud [McFarlane] and if it was okay with
Bud I would try to meet with him then.
And I talked to Bud and he said fine.
(Ledeen (2) 17) Schwimmer, whom Ledeen de-
scribed as one of Foreign Minister Peres'
"close friends," knew about Ledeen's May con-
versation with the then-Prime Minister. (Id. at
19) "[A]s best as I can recall it at this point,"
Ledeen told the Board,
9 In November 1986, the NSC staff prepared a number of chro-
nologies. The two fullest, entitled "U.S./Iranian Contacts and the
American Hostages," bear the designations "11/17/86 2000
(Maximum Version)" ("Maximum Version") and "11/20/86 2000
(Historical Chronology)" ("Historical Chronology"). The Maxi-
mum Version notes that "U.S. intelligence reports indicate that
Majlis Speaker Rafsanjani, who was travelling in the mid-east at
the time, and Iranian Foreign Minister Velayati both intervened
with the captors [to secure the release]. Rafsanjani, in his speech
on November 4, 1986, for the first time publicly acknowledged
his role in this matter."
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I think that what happened was that
Schwimmer described Ghorbanifar and he
may have talked something about hostages
also, that I went to Israel and met Ghor-
banifar, where all of this took on real flesh,
that Kimche then came back to Washing-
ton early in August and told Bud about it,
and formulated the proposition, that Bud
then discussed it with the President, and by
the time I came back in the middle of
August the President had approved it and I
then communicated that decision to the Is-
raelis.
And I'm quite sure that is the chronology.
General Scowcroft: Do you have any
notion how this thing got transformed
from a research project into an action pro-
gram over a very short period of time and
who made the transformation?
Mr. Ledeen: It is what I wrote in the Post,
General. The Iranians came forward.
Ghorbanifar came forward. Ghorbanifar is
really the driving force behind this whole
thing. I mean, one can speculate about
Americans and Israelis, but it is clear that
the guy really-I mean, these ideas did not
come either from the Government of the
United States or the Government of Israel
or arms merchants. These ideas came from
Ghorbanifar. He was the person who intro-
duced them. He was the one who put them
forward, and he was the one who claimed
to have the capacity to achieve them.
So it happened because the Israelis were
approached by Ghorbanifar as a way of
getting to the United States, and I be-
lieve-I mean., one of the few things that I
do believe that Khashoggi has said is what
he said on that TV show with Barbara Wal-
ters, that he suggested to Ghorbanifar that
the best way to get the Americans' atten-
tion was to go to the Israelis. That is the
way he would think, and he was right, in
fact, and it worked.
So that was the channel from Iran to the
United States and that is how it happened,
and I was the one who found myself in a
room with them, that's all. It was an acci-
dent.
(Id. at 21-23)
Contemporaneously, Kimche also visited
Washington. He met McFarlane on July 3. Ac-
cording to McFarlane, Kimche sought "the po-
sition of our government toward engaging in a
political discourse with Iranian officials."
(McFarlane (1) 6) Kimche thought the Iranians
in question would ultimately need something,
namely arms, to show for the discussions.
"But," McFarlane told the Board in his first
interview,
that was not a request [for arms] on July
3rd. He said that the Iranians understood
that, because we had never seen them and
had no basis for confidence that they were
people of influence and authority, under-
stood that they needed to demonstrate
their own bona fides, and that they be-
lieved that they could influence the Hizbal-
lah in Lebanon to release the hostages,
and in fact went as far as to convey
through him on July 3rd that they had
three approaches, just in terms of formats,
of where they might deliver the seven hos-
tages, and sought our comment on which
of these was preferable.
(Id. at 7-8) McFarlane took this message as an
indication that Iranians understood that Irani-
an-American relations "couldn't prosper from
our point of view for as long as people close to
Iran and linked to them continued to hold hos-
tages." (Id. at 8)
III. The President, His Staff, and
the Cabinet: July-August 1985.
In his first interview, McFarlane told the
Board he then reported this conversation to
the President before he entered the hospital for
his cancer operation in the second week of July.
He informed the Secretaries of State and De-
fense and the Director of Central Intelligence
in separate conversations. He also said he vis-
ited with the President in hospital, and the Sec-
retary of State "to discuss it in brief." (Id.) He
told the President that Kimche's question was
"what is your attitude toward engaging with
Iran in a political agenda, period." (Id.) Ac-
cording9to McFarlane, the President considered
the question in a broad context, including
Kimche's suggestion that eventually arms trans-
fers would become an issue.
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And while it wasn't linked to the hostages,
the President said, well, it seemed to him
that the Middle East experience well
beyond Iran is that elements to succeed ul-
timately to power do need to strengthen
themselves, and that the currency of doing
that is usually weapons. And he said the
key element is not denying history, but de-
ciding whether or not our doing that or
somebody else doing that can be distin-
guished as a political matter of policy be-
tween the natural perception of people
that weapons are going to people por-
trayed as terrorists. Iran is identified as a
terrorist state. He said the key element is
whether or not these people are indeed de-
voted to change and not just simply oppor-
tunists, self-serving radicals.
(Id. at 9)
In his meeting with the Board on February
11, 1987, the President said he had no recollec-
tion of a meeting in the hospital in July with
McFarlane and that he had no notes that would
show such a meeting. (R. Dawson & W.C.
McFadden II, Memorandum for the Record, 2/
9/87)
In his third interview with the Board, Febru-
ary 21, 1987, at the Bethesda National Naval
Hospital, McFarlane recalled:
I have felt since last November-and that
is where we started-that it has been, I
think, misleading, at least, and wrong, at
worst, for me to overly gild the President's
motives for his decision in this, to portray
them as mostly directed toward political
outcomes.
The President acknowledged those and
recognized that those were clearly impor-
tant. However, by the tenor of his ques-
tioning, which was oriented toward the
hostages and timing of the hostages, from
his recurrent virtually daily questioning
just about welfare and do we have anything
new and so forth, it is very clear that his
concerns here were for the return of the
hostages.
Now maybe it's come to your attention that
there was a meeting with the TWA 847 rel-
atives and hostages on July 4 or 5, and the
President stayed with Mrs. Reagan at Ar-
lington Cemetery for an extra half hour or
so going down and greeting each of the
families there, and it was a very moving
moment and it had an impact on him.
Within a day or so of that I brought to his
attention this original proposal from Mr.
Kimche, and the President's reaction was
quite enthusiastic and somewhat perhaps
excessively enthusiastic, given the many
uncertainties involved. But it was expres-
sive of his attitude on this issue from the
beginning, and from the four, five, or six
meetings we had in the next thirty days on
it there weren't any inhibitions as persist-
ently as well as the Secretary of State and
Defense made them, and they were very
well made.
But the President had no hesitancy about it
at all, nor did he when he called me about
it last week here in the hospital.
Well, the recollection of my having briefed
the President on Kimche's visit in the
White House and his coming here and his
reactions when here at the hospital, I
briefed him on the new information re-
ceived from Mr. Schwimmer, there is a viv-
idness in my recollection that is document-
ed datewise by the calendars that I have
that the meetings were held in the image
of being across the hall with Mr. Regan
and the President, filling them in on this,
and the President saying words to the
effect that gee, that sounds pretty good.
The weapons issue is a problem, and our
discussion of that, and he says: I guess we
can't do the weapons or something like
that ourselves, but isn't there a way that we
can get at trying to keep this channel going
or something like that.
Mr. Dawson: And that's tied in to the hos-
tages at that point? It is clear that one of
the purposes of this is not so much a stra-
tegic opening as you might have otherwise
stated, but it is an attempt to get arms for
hostages through the transfer from Israel
to Iran?
Mr. McFarlane: Well, I think that was fore-
most in the President's mind.
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Mr. Dawson: So if he didn't state to you in
so many words, Bud, go ahead and do it,
he clearly led you to believe from the
outset that here was a chance to bring
some hostages out through a third coun-
try?
Mr. McFarlane: It was unambiguously
clear.
(McFarlane (3) 11-14)
On November 21, 1986, McFarlane wrote
Poindexter that the President "was all for let-
ting the Israelis do anything they wanted at the
very first briefing in the hospital." (McFarlane
PROF note to Poindexter, 11/21/86, 21:01)
Donald T. Regan, the President's Chief of
Staff, recalled first learning of McFarlane's con-
versation with an Israeli about Iran while the
President was in hospital, some two days after
his operation. According to Regan, McFarlane
wanted authority to enter discussions with the
Iranians identified by the Israelis as having
"reasonably good connections within Iran but
who were on the outside." (Regan 4) Regan
told the Board:
About the second day after the operation, I
believe it was, we went out there-I can
find the exact date if you don't have it-
met with the President-he was in bed-
and McFarlane told him that we had had a
contact from Iranians whom he had reason
to believe had reasonably good connec-
tions within Iran but who were on the out-
side, and this had come primarily as a
result of Israeli connection with the Irani-
ans.
At that time I didn't know their names. I
now know them to be Ghorbanifar,
Kimche, and the like, but at that time I
didn't know the names.
And what McFarlane wanted was the Presi-
dent's authority to make this contact, to
see if it could be developed and what it
could lead to. There was a discussion of
the importance of Iran as far as its strate-
gic location . . . and the fact that it
seemed worthwhile to McFarlane that this
be pursued.
The President, after asking quite a few
questions-and I would say the discussion
lasted for perhaps 20, 25 minutes-assent-
ed and said yes, go ahead. Open it up.
(Regan 4-5) According to McFarlane, after this
meeting, he then conveyed to Kimche the
President's openness to a dialogue with Iran.
(McFarlane (1) 9)
The Secretary of State testified before the
House Foreign Affairs Committee that he first
heard of this matter while flying between Perth
and Canberra, Australia, on July 14, 1985.
McFarlane reported that Kimche had met him
secretly the week before,
and had asked him to confirm that the U.S.
was in fact uninterested in pursuing the co-
operation earlier proposed. to Mr. Ledeen.
Mr. McFarlane wrote that he had so con-
firmed. He then stated that an unnamed
emissary had "today" reopened the issue
on behalf of the Prime Minister.1 ? The em-
issary said that in a recent meeting be-
tween Israelis and some Iranians, including
Mr. Kimche, a Mr. Al Schwimmer, and Mr.
Ghorbanifar, the Iranians had painted a
pessimistic view of Iran. They allegedly
said "their hope and that of what they por-
trayed as a significant cadre of the hierar-
chy was to develop a dialogue with the
West," and emphatically with the United
States. The Israelis had allegedly pressed
"for some tangible show" of the Iranians'
io This "emissary" apparently was Schwimmer. A note from
McFarlane's secretary, dated July 11, 1985, contained the follow-
ing:
JMP [Poindexter] talked with Michael Ledeen this morning
about an urgent message from Peres for McFarlane which Al
Schwimmer, a Jewish-American who provides lots of money
to Peres, wants to deliver to RCM [McFarlane].
McFarlane's secretary reported that Ledeen had lunch with
Schwimmer on July 11 and left the following message for McFar-
lane:
"It is indeed a message from Prime Minister of Israel; it is a
follow-on to the private conversation he had last week when
David Kimche was here. It is extremely urgent and extremely
sensitive and it regards the matter he told David he was
going to raise with the President. The situation has funda-
mentally changed for the better and that I must explain to
him because it will affect his decision. It is very important. It
won't keep more than a day or two but could keep until Sat-
urday morning. This is the real thing and it is just wonderful
news."
McFarlane indicated on this note that he would see Ledeen
Saturday, July 13. McFarlane's desk calendar confirms this meet-
ing. McFarlane told the Board he supposed the "emissary" was
Schwimmer, that he did not meet him, and that he probably re-
ceived Schwimmer's message from Ledeen. (McFarlane (2) 4) On
July 13, the President underwent his cancer operation.
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ability to deliver, and were purportedly
told "that they could in the short term
achieve the release of the seven Americans
held in Lebanon." But, Mr. McFarlane re-
peated, in exchange the Iranians had said
they would need to show "some gain" and
sought specifically the delivery from Israel
of 100 TOW missiles. "But they stated,"
Mr. McFarlane continued, "that the larger
purpose would be the opening of the pri-
vate dialogue with a high level American
official and a sustained discussion of U.S.-
Iranian relations."
Mr. McFarlane reviewed the "imponder-
able questions" raised by this proposal, in-
cluding "our terrorism policy against nego-
tiating with terrorists (notwithstanding the
thin veil provided by Israel as the cut out
on this specific matter)." He noted that
our long term interest was in maintaining
the possibility of renewed ties, and the im-
portance of doing something soon about
the seven hostages. He said: "We could
make a tentative show of interest without
commitment and see what happened or we
could walk away. On balance I tend to
favor going ahead." He said the emissary
was leaving soon, asked for a prompt
signal, and that he would "await and abide
fully by your decisions."
I replied by a message to Mr. McFarlane
that same day that "I agree with you that
we should make a tentative show of inter-
est without commitment. I do not think we
could justify turning our backs on the
prospect of gaining the release of the other
seven hostages and perhaps developing an
ability to renew ties with Iran under a
more sensible regime-especially when
presented to us through the Prime Minister
of Israel."
This position-indicating a willingness to
talk but no commitment to pay-was con-
sistent with Administration policy of main-
taining contact with people who might
eventually provide information or help in
freeing hostages. I pointed out, however,
"the fraud that seems to accompany so
many deals involving arms and Iran, and
the complications arising from our 'bless-
ing' an Israel-Iran relationship where Isra-
el's interest and ours are not necessarily;
the same." I suggested that Mr. McFarlane
should give the emissary "a positive but
passive reply." That is, tell him that the
U.S. "is receptive to the idea of a private
dialogue involving a sustained discussion
of U.S.-Iranian relations. In other words,
we are willing to listen and seriously con-
sider any statement on this topic that they
might wish to intitiate." I said I thought
Mr. McFarlane should manage this probe
personally, but that the two of us should
discuss its sensitivity and the likelihood of
disclosure after my return. I told him to
tell the emissary "that you and I are in
close contact and full agreement every step
of the way; this is all the more important in
view of the present lack of unity and full
coordination on the Israeli side."
(Shultz, 12/86, 8-10; SRB, 17-20) On July 16,
the Secretary saw an intelligence report, which
indicated that Ghorbanifar, whose name McFar-
lane had mentioned, was " `a talented fabrica-
tor.' " (Shultz, SRB, 20)
In the middle of July, Ledeen went to Israel
on vacation and, toward the end of the month,
attended a meeting with Ghorbanifar, Kimche,
Schwimmer, and Nimrodi. "[T]o the best of my
recollection," Ledeen said, this conversation,
is the first time that the subject of weapons
and hostages was raised. They were raised
in the context of the future relationship
between the United States and Iran. They
were not raised separately as a deal or an
entity unto themselves because what Ghor-
banifar had to say, in addition to this fairly
enlightening picture of Iran that he pre-
sented us with, was. that there were signifi-
cant and powerful people within the gov-
ernment of Iran who were interested in im-
proving relations with the United
States. . . . [A]s part of the evolution of
this relationship in a more positive direc-
tion Iran would undertake to make ges-
tures of good faith and to demonstrate not
only their willingness but their capacity to
alter their policies in a direction which we
would consider positive, and that at the
same time they would like to see on the
part of the United States a similar demon-
stration of willingness and capacity and
that the only such gesture by the United
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States that would convince them simulta-
neously that the President was personally
involved and committed to this policy and
that the United States would act and exert
its power in the world to do such things
would be if the United States enabled Iran
to obtain weapons which were at present
unobtainable because of the American
arms embargo, and that the sorts of ges-
tures that the Iranian government would
make to demonstrate its good faith and ca-
pacity included weighing in to try to obtain
the release of hostages in Lebanon, but
also other things, including statements by
leaders of the government which we would
see clearly were moving in that direction.
(Ledeen (1) 22-23) After the meeting, Ledeen,
Kimche, Schwimmer, and Nimrodi decided that
someone should report the conversation to
McFarlane, which Kimche offered to do. (Id. at
24)
At the end of July, Furmark and Ghorbanifar
met Yaacov Nimrodi, an arms merchant and
former Israeli Defense Attache in Tehran,
Amiram Nir, Advisor to Prime Minister Peres
on counterterrorism, and Adolph Schwimmer,
a long-time arms merchant and, since Septem-
ber 1984, Special Advisor to Prime Minister
Peres, at one of Nimrodi's homes in Tel Aviv.
(Furmark 40; Charles Allen reported that Fur-
mark said Nir attended this meeting. C. Allen
to DCI/DDCI, 10/17/86) Furmark, who was
not within earshot of the conversation, possibly
because the Israelis were concerned that Fur-
mark might be a CIA agent, (Furmark at 41),
provided only a sketchy account to the Board.
He said that they discussed a program "to
begin to open up relations between the U.S.
and Iran." (Id. at 37) He heard no mention of
hostages or arms, but did overhear a reference
to "spare parts." (Id.) But he said,
the U.S. had agreed, the Israelis had
agreed, the Iranians had agreed to do
some business, but nobody would trust
each other. The Iranians would not pay for
anything until they received and inspected
the goods, because, I've heard on previous
transactions involving even foodstuffs and
stuff they would pay in advance and they
opened up the crates and there were rocks
in it. So they became very shell-shocked
about paying in advance for anything.
And of course the Israelis would not send
anything until they were paid in advance.
So now you had a stalemate. Khashoggi
then said, well, I will trust the Iranians, I'll
trust the Israelis, I'll trust the Americans,
I'll put the money up.
So the first transaction I understand was a
million dollar transaction which he deposit-
ed into a numbered account which the Is-
raelis told him to put the money in. The fi-
nancing operates like this: He puts a mil-
lion dollars into an account, and then
Ghorbanifar gives him what we will call a
post-dated check for a million dollars in his
account at Credit Suisse. And then after
the shipment is made, the Iranians inspect
the goods, and they then pay Ghorbanifar's
account at Credit Suisse. Ghorbanifar tells
Khashoggi the check is good, deposit it.
And that is how the financing was done all
throughout.
(Id. at 5-6)
Furmark apparently told much the same story
to Charles Allen, the CIA's National Intelli-
gence Officer for Counterterrorism, and
George Cave, a CIA annuitant and expert on
Iran, who met with Furmark on October 16,
1986. Based on Furmark's account, Allen con-
cluded that
[t]he idea of providing Iran with military
equipment in exchange for American hos-
tages-seen as a way of commencing a dia-
logue with Iran-also originated in the
summer of 1985 and he along with Gho-
banifar [sic], traveled to Tel Aviv in August
1985. . . . Subsequently, arms were deliv-
ered to Tehran in September 1985, a devel-
opment that resulted in the release of Rev-
erend Benjamin Weir.
(C. Allen to DCI/DDCI, 10/17/86)
Kimche called McFarlane July 30 and saw
him August 2. According to McFarlane, Kimche
said that Rafsanjani, Musavi, the Prime Minis-
ter, and Khamenei, the President, had been
preoccupied by domestic affairs for about a
month, and, therefore, had not pursued the
hostage or American issues during that period.
Rafsanjani in particular had been dealing with
"factional vulnerability." (McFarlane (1) 10)
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Now, Kimche said, they found it more difficult.
than they had thought to influence their friends
in Lebanon. The Iranians were "more con-
cerned about the bona fides of our side and
specifically about whether or not we would pro-
vide weapons right away, not for a threat, not
for expanding the war, but, as it was cast, for
the expansion of and consolidation of the fac-
tion with military elements, of army elements
specifically." (Id.) McFarlane informed Kimche
that he did not think it "wise or likely" that the
United States would transfer weapons to the
Iranians, "because we had not dealt with these
people.... [T]he notion of our giving weapons
to people we did not know, with the track
record before us, was imprudent and I thought
politically silly." (Id. at 10-11) When Kimche
asked what the United States reaction would be
if Israel shipped weapons to Iran, McFarlane
replied by asking why Israel would.
[I]n a nutshell, [Kimche] said: Well, we in
Israel have our own interests. They are ba-
sically to ensure a stalemate of the conflict
with Iraq, but also to get the United States
back into Iran, and that helps us if the
United States' position in the Middle East
is strengthened; and separately, to reduce
the Iranian support for terrorism, if that is
feasible, is very much in our interest, and
so we might very well do this as a matter
of Israeli interest.
But he said: I pose it for us doing that, be-
cause ultimately if we provide things we're
going to have to come and buy other ones,
and I need to know, are we going to be
able to do that or not, whether it's Hawks
or TOWs or whatever else.
And I said: Well, that really isn't the issue.
Israel has bought weapons from the United
States for years and always will, and so you
don't need to ask whether you can buy
more weapons. It is a matter of whether or
not the support of the idea of providing
weapons to anybody in Iran is in policy
terms sensible. But I will get you our posi-
tion.
(Id. at 11)
A. The Principals' Various
Views: August 1985
In his meeting with the Board on January 26,
1987, the President said that sometime in
August he approved the shipment of arms by
Israel to Iran. He was uncertain as to the pre-
cise date. The President also said that he ap-
proved replenishment of any arms transferred
by Israel to Iran. McFarlane's testimony of Jan-
uary 16, 1986, before the Senate Foreign Rela-
tions Committee, on which the President heavi-
ly relied, takes the same position. This portion
of McFarlane's testimony was specifically high-
lighted on the .copy of the testimony given by
the President to the Board.
In his meeting with the Board on February
11, the President said that he and Regan had
gone over the matter repeatedly and that
Regan had a firm recollection that the Presi-
dent had not authorized the August shipment
in advance. In response to a question from the
Board, the President said he did not authorize
the August shipment. He noted that very possi-
bly, the transfer was brought to him as already
completed. He said that subsequently there
were arms shipments he authorized that may
have had to do with replenishment, and that
these could have taken place in September. A
memorandum from Peter Wallison, White
House Counsel, on which the President heavily
relied, stated that the President had been "sur-
prised" that the Israelis had shipped arms to
Iran in September, and that this fact caused the
President to conclude that he had not approved
the transfer in advance.
On February 20, 1987, the President wrote
Chairman Tower:
In trying to recall events that happened
eighteen months ago I'm afraid that I let
myself be influenced by. others' recollec-
tions, not my own.
I have no personal notes or records to
help my recollection on this matter. The
only honest answer is to state that try as I
might, I cannot recall anything whatsoever
about whether I approved an Israeli sale in
advance or whether I approved replenish-
ment of Israeli stocks around August of
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1985. My answer therefore and the simple
truth is, "I don't remember-period."
In his first interview, McFarlane told the
Board he reported to the President within two
or three days of meeting Kimche on August 2.
On McFarlane's recommendation, he told the
Board, an informal National Security Planning
Group ("NSPG") meeting occurred while the
President was convalescing. The Secretaries of
State and Defense, the Director of Central In-
telligence, Admiral Poindexter, Regan, McFar-
lane, and possibly the Vice President attended.
Neither the Vice President, nor McFarlane was
certain about his attendance. (W.C. McFadden
II, Memorandum for the Record, 12/29/86;
McFarlane (1) 17) McFarlane remembered this
meeting because the President was wearing pa-
jamas. McFarlane recalled
a very active argument, really, for a good
reason, about the wisdom of doing this
and very sharp disagreements on the part
of the Secretary of Defense, really, and to a
lesser extent but emphatically by the Secre-
tary of State, but for different rea-
sons. . . . [T]he President had available to
him very vivid, forceful, thorough expres-
sion of views of his Cabinet officers in-
volved on this. And it was argued in policy
terms, both the issue of a dialogue with
Iran, the legitimacy of these people, the
legal authorities for-this was not the
United States doing something; it was
Israel doing something, but nonetheless
for involvement of U.S. weapons with U.S.
endorsement, which is an important policy.
The legal ramifications, the political risks,
the matter of Congressional oversight, and
then basically the probabilities of, given all
these factors, of this having any promise at
all.
[A]t the end of it the President said, well,
as he had before, that his inclination was
not to have any U.S.-owned weapons or
our inventory involved in this, but that he
believed that it was possible over time, if
these people's standing and authority and
intentions were reformist, if you will, that
he could see the need to support them,
and with weapons, although at the time he
said, right now I'm inclined not to have
any U.S. weapons involved, U.S.-owned,
but if Israel, whose judgment on this is
based on a track record of dealing with
these people, believes that it is sensible to
do it and does transfer weapons, then ulti-
mately their wish to buy replacements we
should honor and we should sell to them.
(McFarlane (1) 12-13)
Regarding hostages, McFarlane told the
Board he tried faithfully to summarize
Kimche's message:
that while the Iranians had told him to say
that they understood they needed to dem-
onstrate their bona fides and they thought
the hostage release was the best evidence
of that, and while the arms, the matter of
arms, was ostensibly associated with the
Iranians' perception of vulnerability, that
you would be foolish not to recognize that,
first of all, that may be just an artifice, de-
liberately to engage in a hostage for arms
deal; and even if it isn't, if they are dealing
in good faith, the perceptions of people of
good will will be that that is the de facto
condition.
The President understood that and he
said: Well, you're right, the risks of misun-
derstanding are quite high, and the ques-
tion is are these people valid interlocutor-
ies or not, dealing in good faith or not.
And he says: We have no way of judging it,
really, except the track record of the past
seven years, and it is only this report,
really, and other things, the corroborating
work we have done, focused upon intelli-
gence hard copy that had been provided by
these Iranians to the Israelis and Israel and
ultimately to us-that it was basically-an
order of battle is the wrong word. It was
the names of the leadership of the Iranian
armed forces from about the battalion level
up, and that is nothing novel, but identify-
ing those who were disposed to support
these elements and those who were not.
Separately, the complexion of the govern-
ment in both the Prime Minister's office
and the Foreign Minister's office; the
Majlis, again identifying those were-well,
they were identified in one, one [sic], two,
or three lines or factions, basically extrem-
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ists from left to right and where people
stood on the political map. l i
Well, all these things were considered by
the President and, in a word, his decision
was no U.S.-owned arms or U.S. transfers;
if Israel chooses to do this and ultimately
they seek replacements from us they can
buy them from us; and yes, finally, we are
interested in a political meeting with Irani-
ans.
Well, I conveyed this to Mr. Kimche, and I
was very precise in saying: The purpose
here is a political agenda; the vulnerability
and risk is a perception of something far
different, which is arms for hostages.
(Id. at 14-16)
On January 16, 1987, McFarlane gave the
Senate Foreign Relations Committee a some-
what different account from the one he had
provided to the Board in his first interview. He
said:
As I say, it began in July with the President
convening each of the people on the
Council, hearing their advice, not deciding,
but thinking about it. Those same individ-
uals meeting singly or in groups with
him-again, the Secretary of State and De-
fense-and over time in the course of
about a ten-day period, late July, early
August, the President coming to a conclu-
sion to authorize a specific authority for
another country to do something.... The
President viewed the decision as a decision
to grant his approval for the actions of an-
other government, although indeed ulti-
mately that government would come to us
again, Israel, to buy replacement arms.
Now, he communicated that to me, and
when he did by telephone, I said to him,
Mr. President, as you know, your Secretar-
ies of State and Defense are opposed to
this. He says, yes, I understand that, and
provided his own explanation of the basis
for his decision.
t t This reference to political "lines" in Iran and to information
from Iranians listing members of the "lines" with their political
preferences is consistent with a document, dated February 5,
1985, prepared by, or with the assistance of, Ghorbanifar, (Ghor-
banifar 52), which Khashoggi sent McFarlane on July 1, 1985.
Then I notified the other National Security
Council members, the Secretary of State
and Defense and the others, and on those
occasions heard once more the opposition
of it from the Secretaries of State and De-
fense. And I encouraged them to be back
in touch with the President, because you're
quite right-the communications through
channels that are not always open can lead
to ambiguities and misunderstanding. And
I know in at least one case, I believe the
Secretary of State-perhaps more than
once-after the decision, promptly
though-reaffirmed his concerns about it,
even though out of this country.
(McFarlane, 1/16/87, 18-19) The President's
official schedule notes an August 6 meeting at-
tended by the Vice President, the Secretary of
Defense, the Chairman of the Joint Chiefs of
Staff, the President's Chief of Staff, and McFar-
lane. (Ellen M. Jones, Presidential Diarist, to
Jay B. Stephens, 1/24/87)
McFarlane told the Board on February 19,
1987:
[U]pon returning from the hospital, if you
want to proceed in that direction, [the
President] did convene his advisors, the
members of the NSC, and discuss this
matter.
As to when concretely he made his deci-
sion, I have to say, Mr. Chairman, I don't
know and there is no written record of it.
The basis on which I say that it had to
have happened in the final week of July or
the first week of August is, first of all, my
own memory of the sequence of events
and what we talked about in that period.
And there are, and I think my schedule has
been given to you, six meetings where he
met with his NSC people, all or more than
one, between July 22 and August 7, I be-
lieve.
Now on at least two occasions he discussed
this matter with more than me, with at
least, on one occasion, with the Secretary
of State and the Secretary of Defense, the
DCI, the Vice President and Don Regan.
General Scowcroft: All together at once?
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Mr. McFarlane: Yes. But my recollection is
that there was disagreement on the matter
and he did not make a decision at that
meeting, and that only after a matter of
days, but within two or three, did he call
me directly and state that he had consid-
ered it and he wanted to go ahead and
specifically that if Israel decided that it
wanted to sell weapons to Iran that Israel
could buy replacements from the United
States.
Now I have to stress that I don't know,
perhaps it has been minimized in the cov-
erage of this so far, but at the meeting it is
fair to say that though there was opposi-
tion by the Secretary of State and Defense
that even those who favored it stressed the
matter that what was being approved was
something to be done by someone else-
Israel-and not the United States.
And it was seen to be an authorization, a
license if you will, for Israel to undertake a
plan and that authority given to me on the
telephone, and I shared in my recollection
with the Secretary of State also by phone,
and he expressed his opposition. And I en-
couraged him to be back in touch with the
President on it, and I believe he was.
(McFarlane (2) 9-11)
McFarlane noted that "generally speaking the
President would reach decisions only at the
time of a meeting only if there was unanimity.
Where there was disagreement it was his habit
almost never to make the decision there but to
wait and then convey it to me later on." (Id at
16)
Regan remembered that the meeting was in-
formal, without an agenda or briefing papers. It
occurred in late July or early August, after the
President returned from the hospital.
Bud [McFarlane] briefed at this and talked
about the Israeli connection here and how
the Israelis were dealing with the Iranians
in an effort to secure the release of many
Iranian Jews who were trapped in that
country, and they were trying to get them
out into Israel, and that the Israelis may
have some type of arms sales going with
the Iranians.
No specific mention that we would be
asked to do that, although it was suggested
at that time that we might have a chance of
getting our hostages out through the Irani-
ans. But the Iranians were sure to demand
something in exchange for that, and it
might be arms.
I recall at that time the President express-
ing concern over this one-for-one type of
swap and not wanting to get into arms
sales through people that he at this point
did not have enough assurance from Bud
that they were (a) reliable or (b) could de-
liver on anything, and that we should go
slow on this but develop the contact.
(Regan 7-8)
The Secretary of Defense recalled a meeting
at the President's residence after he returned
from the hospital.
I argued very forcefully against the whole
idea, saying that I didn't think it could
work. I thought there were all kinds of
risks, that the transfer of arms was obvi-
ously something we shouldn't even think
about doing because we were urging every
other country, and I had been urging
[other countries] where we had found
some transfers going, that this just
shouldn't be done, that this would under-
cut everything we were going to do in the
Mid East and everything else. George
Shultz made many of the same points. My
clear impression was that the idea was set
aside, or finished, that that was the end of
it. The President seemed to agree.
(Weinberger 6) The Secretary of Defense said
Israeli arms transfers to Iran were not dis-
cussed. "It was all should we sell arms to
Iran?" He recalled no discussion about resup-
plying Israel if it shipped arms to Iran, but
noted that "McFarlane could have mentioned
that the Israelis did this." (Id. at 7)
The Secretary of State testified on December
16, 1986, and subsequently told the Board that:
On August 6, 1985 during one of my regu-
lar meetings with the President, at which
Mr. McFarlane was also present, Mr.
McFarlane said that he had again met with
Mr. Kimche who reported that the Iranians
and Israelis had held three meetings,
during which the Iranians said Iran was in
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a shambles and a new government was in-
evitable. The military and the people, the
Iranians reportedly said, were "still pro-
American," and "want a dialogue with
America." They also wanted arms from us,
and wanted 100 TOW missiles from Israel.
All would be totally deniable. The Iranians
said they could produce four or more hos-
tages and wanted a meeting somewhere. I
stated my negative opinion fully. I do not
recall the President having decided at that
meeting to approve the Iranian offer. I
noted then that Mr. McFarlane was pursu-
ing the matter. I assumed this was on the
basis we had discussed, with no commit-
ments. Mr. McFarlane said that Foreign
Minister Shamir had told Mr. Kimche that
he wanted to know explicitly whether I was
informed. At this point I felt that I was
fully informed. As far as arms sales were
concerned, I said in the meeting that it's a
mistake. I said it had to be stopped.
(Shultz, 12/86, 11; SRB, 21-24)
B. Post-Mortem
According to the NSC's Historical Chronolo-
gy and the CIA Inspector General, Kimche
called McFarlane on August 22 to ask about
United States policy with regard to arms ship-
ments to Iran. McFarlane
elevated the question to the President (and
to the Secretaries of State and Defense,
and the Director of Central Intelligence).
The President stated that, while he could
envision providing materiel support to
moderate elements in Iran if all the West-
ern hostages were freed, he could not ap-
prove any transfer of military materiel at
that time-period. This position was con-
veyed to the Israeli diplomat.12 (Id. at 43-
45)
12 In the course of a long description of the origins of the No-
vember 1986 chronologies, McFarlane said that motives for them
changed during the process. He said that, at the beginning (No-
vember 3, 1986), Poindexter's actions reflected his concern for
the hostages and hope that others than Jacobsen would be re-
leased. (McFarlane (3) 42) Later, around November 18 when
McFarlane was asked to lend a hand, the drafting group's
principal objective, probably the primary objective, was to
describe a sequence of events that would distance the Presi-
dent from the initial approval of the Iran arms sale, distance
him from it to blur his association with it.
Regan told the Board that he called no dis-
cussion of the issue from August 6 until after
Labor Day, 1985.
I don't recall anything further about this
until after the President returned from the
ranch, which would have been after Labor
The November 18 chronology, which I indeed helped pre-
pare, was not a full and completely accurate account of those
events, but rather this effort to blur and leave ambiguous the
President's role. The language was intended, I would say, to
convey the impression that the United States had not ex-
pressly authorized the sale either [of] arms directly from the
United States or by the Israelis on behalf of the United
States, but, second, to preserve the ability to say that if Israel
were to make such sales that they could expect to purchase
replacement items from the United States.
And I think that is an accurate reflection of how that is cast.
Now it was done as a briefing memo to be used by people
who would brief the President prior to the next day's press
conference, and in my judgement expected to go through a
number of iterations before it reached that point. But that is
my opinion of the climate in which that session occurred and
the intent of its outcome.
General Scowcroft: To put it baldly, could one say that the
intent of this was in a sense to put the burden on the Israe-
lis? We didn't approve it, they went off and did it-to soften
that by the comment about replenishment?
In other words, if you're going to say that the President
didn't authorize it, only two things can happen-that you
told the Israelis to do it on their own, or that the Israelis did
it on their own.
Mr. McFarlane: Well, I think your portrayal of it as you origi-
nally cast it is an accurate description. It was an intent to
give the impression that Israel had taken the action.
Mr. Dawson: Why did Poindexter, though, at that point focus
in on trying to distance the President from the prior approv-
al in advance of the Israeli shipments? Why was that, even at
that juncture, so important an issue?
Mr. McFarlane: Well, bear in mind I think this is an impor-
tant part of it, that before this ever occurred he had already
himself on the record acknowledged that the President did
approve in advance, and that is in the White House tran-
scripts. Don Regan did, too.
Mr. Dawson: You're referring there to the backgrounders
that Poindexter and Regan have in advance of the November
18--
Mr. McFarlane: I believe that's right.
Mr. Dawson: And would you also add to that that the Presi-
dent had already denied prior approval? I mean, was that
also something else which you would put into the context of
that?
Mr. McFarlane: Well, it is difficult to harmonize those posi-
tions. That is clear. But the President's position, which I
think did misrepresent things-I'm not sure timing-wise
which statement you are talking about.
Mr. Dawson: Well, you had said earlier--
Mr. McFarlane: Yes, and those remarks were cast at a time
when they were still relying or mostly on the hope that there
were still hostages that were going to come out.
Mr. Dawson: This is right after the public disclosure?
Mr. McFarlane: Yes.
(Historical Chronology 5. Cf. CIA/IG Chronology 3)
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Day in '85. He had a long vacation then
because they wanted him to take more
time to rest from the operation.
At that time-again this was at a normal
9:30 meeting, not at a special meeting-
McFarlane informed the President that
indeed the Israelis had sold arms to the
Iranians and that they hoped to get some
of our hostages as well as some Jews from
Iran out as a result of this. This would
have been early September.
Now I recall at that meeting the President
being upset at the fact that arms had been
sold by the Israelis, American arms-and
"upset" I think is the proper word; it
wasn't real anger, but it was sort of, you
know, well, why did they do that; how
come we didn't know? That type of thing-
and McFarlane explaining that the Israelis
simply had taken it upon themselves to do
this.
But the President at that time did not indi-
cate that he wanted to make a big deal out
of it. It was done. It had been done. There
was a possibility of a hostage coming out.
He decided to leave it alone, just accept
the fact that it was done, leave it there.
I don't recall anything else happening,
except I believe that Benjamin Weir did
come out at that time, if I'm not mistaken,
or shortly thereafter.
(Regan 8-9)
Secretary Shultz testified to the same effect
on December 16, 1986, as did Secretary Wein-
berger. (Shultz, 12/86, 11; Weinberger 7)
Ledeen told the Board that, when he returned
to Washington in the middle of August and re-
ported to McFarlane on his meetings in Israel,
McFarlane said "that the President had decided
to go ahead with the test of the sort that
Kimche had described-which is that we would
authorize the Israelis to ship a quantity of
weapons to Iran and we would see whether the
Iranians followed through on their demonstra-
tions of good faith and capacities and so
forth." (Ledeen (1)27) According to informa-
tion provided by the White House Counsel, the
President spoke to McFarlane by telephone on
August 23. Ledeen recalled that "all Bud said
to me was the President has said that it's okay
to tell them that. It's a go. And there wasn't
any more detail than that." (Id. at 31) Accord-
ing to Ledeen, this statement meant that Israel
had American approval to ship TOWs to Iran.
(Id. at 32) Ledeen assumed it meant that the
United States would resupply the Israelis for
the TOWs.13
In any event, he conveyed this message to
Kimche as his presumption. (Id. at 31) At the
same time, Ledeen thought Secretary Shultz'
displeasure with his trips "sounded like a
simple standard turf irritation rather than any-
thing substantive. It didn't seem to have any-
thing to do with policy. There was no policy
anyway." (Id. at 29)
On January 16, 1987, McFarlane recalled that
the President's approval came in August of
1985. The authority was that if Israel were
to sell arms to Iran and ultimately came to
the United States to replace them, that
they could do that, so long as the quantity
shipped and the character of the weapons
wouldn't alter the complex of the situation
in the war or contribute to terrorism.
(McFarlane, 1/16/87, 13)
In his third interview with the Board, McFar-
lane said:
I recall the President calling me and I
while I couldn't give you verbatim quotes
or near it, his point, his opening point was
about that matter we discussed the other
day, the hostages. Well, the matter was a
very big matter and in terms of purposes
and so forth, but it was expressive of the
kind of motives that I think that lend some
urgency to his call.
He called and said: I think we ought to get
on with that. Let's go ahead with that. And
that, frankly, was more the way the Presi-
dent dealt with an issue, as opposed to
13 According to the "Maximum Version,"
[o]n August 22, 1985, the U.S., through the U.S. citizen in-
termediary [Ledeen, whom the Maximum Version identified
by name and described as "a private American citizen"], ac-
quiesced in an Israeli delivery of military supplies (508
TOWs) to Tehran. We were subsequently informed that the
delivery had taken place at the end of August, though we
were not aware of the shipment at the time it was made. U.S.
acquiescence in this Israeli operation was based on a deci-
sion at the highest level to exploit existing Israeli channels
with Tehran in an effort to establish an American strategic
dialogue with the Iranian government.
(Maximum Version at 4)
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saying: well, I like Option 1, 2, 3 or 4. But
I did then spell it out, and I said: Mr.
President, what's involved here is the sale
by Israel of weapons and ultimately them
coming to us to buy replacements. And he
says: Yes, I understand that. And I said:
Do you understand, of course, now that
George and Cap are very much opposed to
this and they have very good reasons?
And he said: Yes, I do, but I draw a differ-
ence between our dealing with people that
are not terrorists and shipping arms to ter-
rorists. And I'm willing to defend that.
And he even said something like: I will be
glad to take all the heat for that.
But the point about the opposition from
the Cabinet officers was made once more,
and he said: Yes, I understand how they
feel, but I want to go ahead with this.
(McFarlane (3) 17-18)
IV. The NSC Staff, Arms,
Hostages, and Finances
Whatever the President may or may not have
decided on August 6, or subsequently, mem-
bers of the NSC staff began in August 1985 to
become involved in missions having to do with
the shipment by Israel and the United States of
advanced weapons to Iran and the release of
American citizens kidnapped in Lebanon.
A. The First Shipment of
TOW Missiles: August-
September 1985
While Ledeen's account is not altogether sat-
isfactory on the point, and McFarlane did not
mention the episode to the Board, when
Ledeen reported on his August meetings in
Israel, McFarlane apparently decided to estab-
lish secure telephone communication with
Kimche. Ledeen flew to London on August 20,
carrying an elementary code for Kimche, which
he delivered the next day. (Ledeen (1) 28)
Kimche gave Ledeen documents for McFarlane
obtained from Ghorbanifar. At this or another
meeting, Kimche explained that "in his experi-
ence with Iranians there was no way that Iran
would deliver everything that it had promised;
that whatever happened. would be less ?than
what they were promising, but that he thought..
that even something significantly less than what
they had promised would still be significant
and that he was basically positive about giving
it a try." (Id. at 37)
In late August or early September, North, to
whose office Ledeen was attached, (id at 44),
was directed to prepare "contingency plans for
extracting hostages-hostage or hostages-
from Lebanon." (Id. at 46) 14 On August 29
and 30, the NSC staff arranged for the State
Department to issue a passport in the name of
"William P. Goode" for North to use on "a
sensitive operation to Europe in connection
with our hostages in Lebanon." (North to
McFarlane, 8/30/85; Martin to Platt, n.d.;
McFarlane PROF note to Martin, 8/30/85,
17:40:38; Shultz, 12/86, 12) In addition, on
August 31, 1985, Poindexter established a pri-
vate method of interoffice computer communi-
cation with North, preventing normal screening
by the Executive Secretary of the NSC. (Poin-
dexter PROF note, "PRIVATE BLANK
CHECK", to North, 8/31/85, 13:26:58) North
asked Charles Allen, National Intelligence Offi-
cer for Counterterrorism, on September 12 to
increase intelligence efforts against Iran and
Lebanon, and informed him that Buckley might
be released in the next few hours or days. (C.
Allen 4-5; CIA/IG Chronology 3)
When the first information was received on
September 13, Allen asked for
White House guidance on how th[is intelli-
gence] should be disseminated. North,
after consulting with National Security Ad-
visor McFarlane, direct[ed] that dissemina-
tion be limited to Secretary Weinberger,
the D[irector of] C[entral] I[ntelligence]
(or Deputy Director McMahon), McFar-
lane, and himself. North [said] that McFar-
lane had directed that no copy be sent to
the Secretary of State; and that he, McFar-
lane, would keep Secretary Shultz advised
orally on the NSC project.
(CIA/IG Chronology at 4; C. Allen 6) 15
14 Ledeen told the Board that he thought this episode marked
the first time North heard about the program. (Ledeen (1) 46;
Ledeen (2) 74)
15 The original distribution list provided included Vice Admiral
Moreau of the JCS staff, not Secretary Weinberger. When the
Secretary saw an intelligence report pertaining to this program in
the fall of 1985,'he insisted that he receive all such documents.
His military assistant, General Powell, reported that "the. White
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On August 30, 1985, Israel shipped 100
TOW missiles to Iran; on September 14, Israel
shipped an additional 408 missiles. There is
some evidence that this shipment was returned
to Israel, in whole or in part, because it con-
tained defective or otherwise unacceptable mis-
siles, and that Israel replaced and reshipped
the weapons. (Furmark 6-7) Ghorbanifar told
the Board that he accompanied the shipment of
100 TOWs to Iran and that in exchange for
these weapons, the Iranians gave a "guarantee"
that they would neither engage in any "wrong-
doing" nor support terrorism. (Ghorbanifar 46)
Israel sold Iran 400 TOWs in exchange for
Weir, Ghorbanifar recalled; when the plane ar-
rived in Tabriz, eight extra TOWs were
aboard. (Id. at 49; 100) Ledeen told the Board
that he did "not believe that either we or they"
saw the August and September shipments as
two transactions. (Ledeen (2) 27-28)
In the second week of September, Kimche
called McFarlane with the news that a hostage
would be released, and that he expected all the
hostages to be released soon. McFarlane prob-
ably relayed this message to the President, Vice
President, Secretaries of State and Defense, Di-
rector of Central Intelligence, and Regan.
(McFarlane (1) 18-19) The Director of Central
Intelligence reportedly connected this release
with diplomatic efforts in Damascus and
Tehran aimed at resolving the hostage prob-
lem. (CIA/IG Chronology at 4; Casey to
Shultz/McFarlane, 8/16/85; Sigur to McFar-
lane, 9/19/85) Reginald Bartholomew, the
American Ambassador in Lebanon, reported on
September 4 that "North was handling an op-
eration that would lead to the release of all
seven hostages. [A U.S.] team had been de-
ployed to Beirut, we were told. Ambassador
Bartholomew had been alerted directly by the
NSC and would assist." (Shultz, 12/86, 12) The
Director of Central Intelligence told his Deputy
and Chief of Operations that "the Israelis were
doing something and they believed as a part of
the outcome of an affair the Israelis were in
some of the hostages could be released," but
that the Israelis did not want the CIA to be
"notified." (George 3) Since 1984, the CIA had
regarded Ghorbanifar as untrustworthy. (Cave
3-5)
House told [the releasing agency] that those [reports] were not
to be distributed to anybody except the White House." (Wein-
berger 8)
Meanwhile, Ledeen met Ghorbanifar,
Kimche, Nimrodi, and Schwimmer in Paris on
September 4. Ledeen told the Board that
[t]he bulk of this conversation was given
over to the issue of future relations and
future cooperation between the United
States and Iran. And from time to time
Ghorbanifar, Schwimmer and Nimrodi
would sit down and start talking about hos-
tages and weapons. And when this hap-
pened Kimche and I would go off and talk
about the future of Iran and how we
thought we were going.
(Ledeen (1) 44) According to Ledeen, Ghor-
banifar predicted that Iranian leaders would
soon give speeches in which they did not de-
nounce the United States. After the speeches,
Ghorbanifar called Ledeen to ask if he had
seen them. Ledeen had not, but asked North to
have the CIA find and translate them. Some
weeks later, the CIA confirmed Ghorbanifar's
account. Iranian leaders had attacked the Soviet
Union. "So we were cheered by this. I was
cheered by this." (Id. at 44-45)
On September 15, 1985, Reverend Weir, one
of the Americans kidnapped in Lebanon, was
freed. According to the CIA Inspector General,
on September 16, the Director of Central Intel-
ligence and Charles Allen discussed recent
events, including Weir's release. The Director
reported McFarlane's saying they were related
to an NSC intiative. (CIA/IG Chronology at 4)
Secretary Shultz testified that, on September
17, Ambassador Bartholomew reported that
Mr. McFarlane had said the other hostages
would be released in three batches, with-
out publicity. But Weir had no information
about the others, and in fact said he had
been released only to bring pressure for
the release of the Da'Wa prisoners. Bar-
tholomew was pessimistic. He said four
other hostages were reportedly in the
-Beirut area, possibly in the same place as
Weir. . . . North was not in the area, but
in Washington, D.C. Bartholomew said he
knew "precious little about origins of this
or who is involved. Bud has told me noth-
ing of who else was involved." He was pes-
simistic about getting any more hostages.
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Two months then passed during which, to
my knowledge, the Department of State
heard nothing more about any aspect of an
operation involving arms for Iran.
(Shultz, 12/86, 12-13)
When Weir was released, McFarlane
"learned of the transfer from Israel to Iran of
508 TOW missiles.'s Well, I was concerned,"
he told the Board in his first interview, "frank-
ly, because in concrete terms we, after a
month's time, we Americans weren't dealing
with Iran, Israel was, and so the central pur-
pose from my point of view of the thing wasn't
yet being fulfilled." (McFarlane (1) 20) Teicher
told the Board that, although his involvement
in this operation had ceased in August, after
Weir was released, he became suspicious that
the United States was trading arms to Iran for
hostages. He queried North, who told him that
he could say nothing about it, and McFarlane,
who said the United States was not trading
arms for hostages and that there was nothing
more he could say. (Teicher 14-15)
(Historical Chronology 5-6)
At one of the President's 9:30 a.m. briefings
in September (early in the month, according to
Regan (Regan 8)), McFarlane reported that the
Israelis had sold weapons to Iran, and a hos-
tage had been released. McFarlane told the
Board:
[W]hile I didn't know for certain because
we had not negotiated with the Iranians,
the appearance was surely there that weap-
ons were transferred and one hostage was
released, and so that certainly looked
causal. And you would have to be a fool
not to see that, whatever our intentions
16 The Historical Chronology contains the following para-
graph, not contained in the Maximum Version:
In late September, we learned that the Israelis had trans-
ferred 508 TOW missiles to Iran and that this shipment had
taken place in late August. [Handwritten in the margin: "30
Aug?"] The Israelis told us that they undertook the action,
despite our objections, because they believed it to be in their
strategic interests. The Israelis managed this entire oper-
ation, to include delivery arrangements, funding, and trans-
portation. After discussing this matter with the President, it
was decided not to expose this Israeli delivery because we
wanted to retain the option of exploiting the existing Israeli
channel with Tehran in our own effort to establish a strategic
dialogue with the Iranian government. The total value of the
508 TOWs shipped by Israel was estimated to be less than
$2 million.
were, the reality was apparently arms for
hostages.
And I said so to the President in the morn-
ing meeting, and it basically kind of vali-
dated what the Secretary of Defense and
State had said before, and they expressed
their concerns again on that score.
This is not an excuse, but it is I think miti-
gating. Recall now that in this period from
late September to November quite a
number of things were happening in the
government, and this was about number
12 on the agenda. I mean, you had the
Soviet foreign minister in town, three
other foreign heads of state, the prepara-
tion of four major presidential speeches to
lay out the agenda for the summit, bilater-
al, regional issues, arms control issues,
human rights issues, a visit to the United
Nations by the President for a couple of
days, meetings with 12 or 15 heads of gov-
ernment up there, and in the middle of
that the Achille Lauro.
(McFarlane (1) 20-21)
As we have seen, Regan told the Board a
somewhat different story.17 (See supra pages
B23-24)
17 In a memorandum, dated December 5, 1985, North provid-
ed still a different account of the origins of Iran arms transac-
tions. He wrote that "[s]everal months ago" an agent involved in
shipping material to the Contras saw U.S. military equipment in a
Lisbon warehouse, which inquiries identified as Israeli equipment
being shipped to Iran by a private company.
A "high-level Israeli official" explained that the weapons were
being sent to Iran in exchange for Iranian Jews, and that because
private intermediaries were used, the transaction was not a tech-
nical violation of United States arms export control laws. The Is-
raelis hoped the arms sales would enhance "the credibility of
moderate elements in the Iranian army" who might become pow-
erful enough to establish a more reasonable Iranian government
than presently existed; prevent the collapse of Iran in the war
with Iraq; and extricate Jews from Iran.
In early September, in order that we not take action to ter-
minate the arms sales, the Israelis proposed that this process
be used as leverage to recover the American citizens held
hostage in Lebanon. It was decided to test the validity of this
proposal and on September 14, the Israelis, using chartered
aircraft, delivered 500 TOW missiles to Tabriz, Iran. Prior to
commencing this operation, we committed to the Israelis
that we would sell them replacements for the items they sold
and delivered to Iran. Two days later Reverend Benjamin
Weir was released.
("Special Project re Iran," 12/5/85)
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I don't recall anything else happening,
except I believe that Benjamin Weir did
come out at that time, if I'm not mistaken,
or shortly thereafter.
The only thing I can remember there
[about the need to resupply Israel] is that
there was talk that probably someday the
Israelis will want us to replenish that, but
no specific the Israelis have asked us to re-
place that at this time, no.
(Regan 9-10)
B. Financing the Transaction
penses and provide a return to financiers who
invested with him. (Id. at 31, 8)
Possibly in anticipation of this transaction, on
August 27, 1985, the Central Bank of Iran
(Bank Markazi) deposited $1,217,410 in the ac-
count of an Iranian official at Credit Suisse.
This individual, an official in the Prime Minis-
ter's office, was responsible for arms procure-
ment in Europe. On September 18, four days
after the first successful shipment of TOWs, $5
million was deposited in the Iranian's account.
On September 14, Ghorbanifar informed the
holder of the Credit Suisse account that an air-
craft would arrive at Tabriz that evening, and
asked that a man on the plane be given a
cheque and a list of weapons desired by Iran.
According to Furmark and Ghorbanifar, Kha-
shoggi provided the bridge financing for the
August and September shipments.18 The
Americans and Israelis had limited faith in the
Iranians, and vice versa, so that deliveries
would not be made before payment was re-
ceived, and payment would not be made before
weapons were delivered. (Ledeen (2) 25) Kha-
shoggi broke the impasse by providing financ-
ing. (Furmark 5; D. St. John, Memorandum of
Conversation with Adnan Khashoggi, 1/29/87)
In August and September 1985, Khashoggi
made two separate deposits in the amounts of
$1 million and $4 million into a Swiss account
designated by the Israelis; Ghorbanifar gave
him two post-dated drafts for $1 and $4 mil-
lion, drawn on his account at Credit Suisse,
which Khashoggi would negotiate when the
weapons were delivered, and Ghorbanifar had
received payment from Iran. "[T]hat is how the
financing was done all throughout." (Furmark
6) Khashoggi was repaid later than anticipated
because the first shipment of TOWs included
weapons unacceptable to Iran. (Id. at 6-7) Ac-
cording to Furmark, Khashoggi received no
money in addition to principal for these pay-
ments; for the later transactions, he expected,
and received until May 1986, a return of 207o
above the principal amount to cover his ex-
18 Whereas Furmark told the Board that he introduced Ghor-
banifar to Khashoggi in January 1985, (Furmark 3), George Cave,
who had been stationed in Tehran before the overthrow of the
Shah and who had been responsible for terminating the CIA's re-
lationship with Ghorbanifar in 1983, told the Board that, con-
trary to reports he had seen, Ghorbanifar had known Khashoggi
for years. (Cave 44)
V. United States Involvement
Takes a New Form: October
1985 January 1986
The United States formally adopted a pro-
gram to transfer advanced weapons to Iran in
January 1986. That step culminated a process
formed by, among other things, operations by
various government bureaucracies and individ-
uals, and the unending pressure created by the
kidnappings in Lebanon, including hopes that
just one more effort would bring the hostages
home. Each individual, including the President,
had his own perspective of the political and
strategic significance of what he knew. These
perspectives and pressures shaped the process
of Presidential decision and the ultimate deci-
sion itself.
A. Prelude to the Israeli
Shipment of Hawk Missiles
According to Ledeen, North became obvious-
ly involved in operations connected with Amer-
ican hostages and relations with Iran at the
time of the first Israeli shipment of TOWs.
"[H]e was handling all the various intelligence
operations that had been started to track this
thing, and it was all coming through him." 19
19 Ledeen told the Board that McFarlane did not tell him that
North was to be more involved. (Ledeen (1) 51) Bernard McMa-
hon, Staff Director of the Senate Select Committee on Intelli-
gence, said that Ledeen testified that North told him in Septem-
ber 1985 that "McFarlane has told me I'm supposed to now
handle all the operational aspects of this, and McFarlane has no
knowledge, A, that Ledeen is doing anything, much less that
North has taken over what he is doing." (B. McMahon 10)
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(Ledeen (1) 51) On the other hand, North's
office "was highly compartmentalized. [Ledeen]
did not, until I was instructed by Bud to do so,
I never told Ollie [North] what was going on,
and Ollie never discussed what he was doing
with me." (Id. at 57)
Ledeen's account of the September-October
1985 period is sketchy. For example, he told
the Board that he introduced North and
Schwimmer when Ghorbanifar, Schwimmer,
and Nimrodi came to Washington in late Octo-
ber or early November. (Id. at 50) According to
North's calendar, North had meetings on Sep-
tember 26 with Ledeen at 11:00 a.m. and
Schwimmer at 11:30 a.m. On October 6, North
asked the CIA to arrange for surveillance of
Ghorbanifar and Nimrodi, whom he expected
in Washington on the 7th. Such surveillance
was put in place, and, on October 8, Ledeen,
North, Nimrodi, Schwimmer, and one "Nicho-
las Kralis" (a Ghorbanifar alias) met at 9:00
a.m. in the Old Executive Office Building.
(North calendar)
On October 1, 1985, Israel's air force
bombed the PLO headquarters in Tunis, and
on October 4, according to NSC staff chronolo-
gies prepared in November 1986, the Islamic
Jihad announced the execution of Buckley in
retaliation for the bombing.20 The NSC staff
chronologies state ' that "[t]his announcement
led to a series of meetings in Europe among
the U.S. (CIA and NSC), Israeli, and Iranian in-
termediaries." (Maximum Version 4; Historical
Chronology 6) On October 7 the Italian ship
Achille Lauro was hijacked by Palestinian terror-
ists.
Ledeen met Ghorbanifar, Kimche, Nimrodi
(who was fluent in Farsi), and Schwimmer in
September and October in Europe. (Ledeen (1)
46) In at least one such meeting, Ghorbanifar
expressed the view that the arms and hostage
matters, which engaged Schwimmer and Nim-
rodi particularly, should be dropped, and the
prospective Iranian-American political relation-
ship should be the focus of their energies.
"[Ghorbanifar] said if we continue we shall
become hostages to the hostages." (Id. at 47)
20 According to both the Maximum Version and the Historical
Chronology, this announcement was false. Iranians with whom
CIA and NSC staff personnel met in the following months, and
Jenco and Jacobsen, two hostages released later, reported that
Buckley probably died on June 3, 1985, of "pneumonia-like
symptoms." (Maximum Version 5; Historical Chronology-6)
In his second interview, Ledeen told the
Board that, in October, he told Schwimmer:
if this kind of contact is going to continue
it may be necessary at a certain point to
have an account where there can be some-
thing for expenses for this person or per-
sons like him. We may need an account for
such things.
And he said fine. I will do that. And he
then opened an account at Credit Suisse
and gave me the account number for this
thing. I had no privileges on it. I couldn't
sign for it. But he gave me the number. He
said if at any point people want to put
money in this, this is the thing which we
have established for this purpose, if it
would be necessary at a later date.
I gave that number to Ollie [North].
I have no knowledge of that account ever
being used for anything. I don't know of
any money that ever went into it. But I re-
called this when I was reading a newspaper
story the other day which suggested that
Ollie had inherited a structure of bank ac-
counts in which there was already some-
thing there, into which money could flow,
or through which money. could flow, or
something like that, and that reminded me
that, hey, I remember that day they created
that account.
(Ledeen (2) 41-42)
Ledeen reported these conversations to
McFarlane and, in late October or early No-
vember 1985, when Ghorbanifar, Nimrodi, and
Schwimmer came to Washington, he "urged
that the hostage matter be dropped, and he
[McFarlane] was in agreement with that." (Id at
50)
So about a week afterwards I reported on
this meeting to Bud, and I said again to
him that I thought we should shut down
the hostage matter and pursue the political
business. He said that no, he was inclined
to shut down the whole thing, that he had
a bad feeling about the whole matter. He
didn't like it. . . . I appealed to him not to
stop the whole thing but just to stop the
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hostage side of it. And he said, well, he
would get back to me, and so off I went.
McFarlane told the Board in his second inter-
view that Ledeen's memory was accurate.
As I speculated earlier, I was surprised by
the move from 100 to at least 400 and by
the release of only one. The President was
pleased by the release of one and/or the
continuation of the relationship. But that
seemed to me a very clear evidence of bad
faith, and I said so to Mr. Kimche, prob-
ably because I met with Mr. Ledeen, al-
though I don't know that, but I made it
very clear, and I think he's testified to the
fact that I had a "bad feeling" about this
program in October. And he expressed
that, too, to the Israelis.
Chairman Tower: Bud, do you remember
any comment from the President after
Weir was released? He made some rather
critical comments of the Administration
and of the President, characterizing Weir
as being somewhat ungrateful for the ef-
forts that were being made.
Mr. McFarlane: I don't recall that. I think it
is very plausible to me that he would have
been dismayed by the turn of events.
Mr. Dawson: Before we tie in this authori-
zation to December let me not leave Sep-
tember for just one second and try to turn
the authorization question, present it
somewhat differently.
In the July, August and September time, in
discussions that you had with the President
did he ever exhibit any reluctance, opposi-
tion or disapproval or make any attempts
to repudiate in your presence the transfer
of arms by Israel to Iran?
Mr. McFarlane: No, he did not.
(McFarlane (2) 34-35)
After McFarlane gave his view of the August/
September TOW shipment to Ledeen, the arms
transfers to Iran took on a new dimension. The
first Ledeen said he heard of it came in what he
described as a "bizarre" call from Ghorbanifar.
It was related, I [Ledeen]
subsequently figured out, to the question
of this shipment of additional weapons and
Ghorbanifar called with a message from
the Iranian Prime Minister to the President
and asked me if I would transmit this.
It was a message that said, grosso modo,
we have been very patient with you people.
We have behaved honorably with you
people. We have done everything that we
said we would have done, and now you are
cheating us and making fun of us and so
forth, and would you please do what you
said you were going to do.
(Ledeen (1) 51-53) McFarlane being in Geneva
with the President for the first Summit Meeting
with General Secretary Gorbachev, Ledeen
passed this message to Poindexter. It was Le-
deen's "first and last" contact with Poindexter
on this matter; Poindexter said "I was going to
be taken off this matter, that people with more
technical understanding or expertise were
going to be" on it. (Id. at 53-54)
McFarlane told the Board that the episode
mentioned by Ghorbanifar to Ledeen "was the
first time that a U.S. government agency
became involved in this matter, and it was the
CIA." (McFarlane (1) 22) "[R]ight before I left
for Geneva [for the Summit with Ghorbani-
far]", Mr. Farlane told the Board in his second
interview, Israel Defense Minister Rabin saw
McFarlane in Washington. "I believe that his
[Rabin's ] purpose in coming was simply to re-
confirm that the President's authority for the
original concept was still valid. We haven't
changed our mind and I reconfirmed that that
was the case. I don't recall that he said any-
thing about any concrete intention in the short
term to do anything else." (McFarlane (2) 36)
While he was in Geneva, Rabin called on an
open line from New York to request assistance
for a problem involving a transfer. McFarlane
then called Poindexter and North and asked
them to find out what the problem was.
(McFarlane (1) 23) About a week earlier, on
November 14, McFarlane had told the Director
of Central Intelligence and John McMahon, his
Deputy, "that Kimche was planning or had in-
dicated that the Israelis planned to give some
arms to moderates in Iran that would oppose
Khomeini." 21 U. McMahon 5) At that time,
21 According to North's office calendar, North, McFarlane, and
Kimche met on November 9, 1985.
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North was in London meeting Terry Waite
and, separately, Ghorbanifar. (American Em-
bassy, London, to North, 11/12/85; NSC Chro-
nology of Events, dated 11/20/86)
Secretary Shultz testified before Congress
and told the Board that McFarlane told him on
November 18, 1985, in Geneva,
that four hostages would be released on
Thursday (November 21). He said that
Israel would fly a plane with 100 Hawk
missiles to [a third country], and transfer
them to another aircraft. If the hostages
were released, the airplane would fly to
Iran; if not, it would fly to Israel. Israel
would buy replacements for these missiles
from the U.S., and would be paid by Iran.
I complained to Mr. McFarlane that I had
been informed so late that it was. impossi-
ble to stop this operation. I nonetheless
expressed my hope that the hostages
would in fact be released.
(Shultz, 12/86, 13; 1/87, 23-24; SRB, 27-28)
B. The Shipment of HAWKS:
November 1985 2 2
By letter dated November 19, 1985, which
North signed with his own name "for" McFar-
lane, Secord was asked to play a role.
22 The Maximum Version and Historical Chronologies provide
different accounts of the origins of the November 1985 HAWK
shipment. According to the Maximum Version:
In late November 1985, the Israelis, responding to urgent
entreaties from the Iranians, provided 18 basic HAWK mis-
siles to Iran in order to improve the static defenses around
Tehran. The Israeli delivery of HAWK missiles raised U.S.
concerns that we could well be creating misunderstandings
in Tehran and thereby jeopardizing our objective of arrang-
ing a direct meeting with high-level Iranian officials. These
missiles were subsequently returned to Israel in February
1986, with U.S. assistance.
(Maximum Version 5)
The Historical Chronology states:
In mid-November, the Israelis, through a senior officer in
the Foreign Minister's office (Kimche), indicated that the
Government of Israel was convinced that they were nearing a
breakthrough with Iran on a high-level dialogue. The Israeli
contacted a U.S. official (North) and asked for the name of a
European-based airline which could discreetly transit to Iran
for the purpose of delivering passengers and cargo. He spe-
cifically noted that neither a U.S. carrier nor an Israeli affili-
ated carrier could be used. We were assured, at the time,
that the Israelis were going to "try oil drilling spare parts as
an incentive," since we had expressed so much displeasure
over the earlier TOW shipment: The name of [a CIA propri-
etary airline] was passed to the Israeli, who subsequently had
the aircraft chartered through normal commercial contract
for a flight from Tel Aviv to Tabriz, Iran, on November 25,
Your discrete [sic?] assistance is again re-
quired in support of our national interest.
At the earliest opportunity, please proceed
to [a third country transit point], and other
locations as necessary in order to arrange
for the transfer of sensitive materiel being
shipped from Israel.
As in the past, you should exercise great
caution that this activity does not become
public knowledge. You should ensure that
only those whose discretion is guaranteed
are involved.
(McFarlane per North to Secord, 11/19/85)
The Board has obtained a number of oper-
ational reports sent by North to Poindexter by
the Blank Check private interoffice computer
communication channel Poindexter had estab-
lished on August 31. At about 9:30 p.m. on
November 20, North wrote Poindexter:
The Israelis will deliver 80 Mod[ified]
HAWKS to [a third country] at noon on
Friday 22 Nov. These 80 will be loaded
aboard three chartered aircraft, owned by a
proprietary which will take off at two hour
intervals for Tabriz. . . . Appropriate ar-
rangements have been made with the
proper [country name deleted] air control
personnel. Once the aircraft have been
launched, their departure will be con-
firmed by Agshari [Ghorbanifar] who will
call [his contact in Tehran] who will call
Niknam (DCM in Damascus) who will
direct the IRG [Iranian Revolutionary
Guard] commander in Beirut to collect the
five rpt five Amcits from Hizballah and de-
liver them to the U.S. Embassy. There is
also the possibility that they will hand over
the French hostage who is very ill.
There is a requirement for 40 additional
weaps of the same nomenclature for a total
requirement of 120. $18M in payment for
the first 80 has been deposited in the ap-
propriate account. No acft will land in
Tabriz until the AMCITS have been deliv-
ered to the embassy. The Iranians have
1985. The Israelis were unwitting of the CIA's involvement
in the airline and the airline was paid at the normal commer-
cial charter rate (approximately $127,700). The airline per-
sonel [sic] were also unwitting of the cargo they carried.
(Historical Chronology 6)
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also asked to order additional items in the
future and have been told that they will be
considered after this activity has succeed-
ed. All transfer arrangements have been
made by Dick Secord, who deserves a
medal for his extraordinary short notice ef-
forts.
Replenishment arrangements are being
made through MOD [Ministry of Defense]
purchasing office in NYC. There is, to say
the least, considerable anxiety that we will
somehow delay on their plan to purchase
120 of these weapons in the next few days.
IAW [In accordance with] your instructions
I have told their agent that we will sell
them 120 items at a price they can meet. I
have further told them that we will make
no effort to move on their purchase LOA
request until we have all five AMCITS
safely delivered. In short, the pressure is
on them.
As soon as we have the release confirmed,
we need to move quickly with Defense to
provide the 120 missiles the Israelis want
to buy. They are very concerned that they
are degrading their defense capability, and
in view of the Syrian shoot-down yesterday
the PM has placed considerable pressure
on both Rabin and Kimche for very
prompt replacement. Both called several
times today.
There is the distinct possibility that at the
end of the week we will have five Ameri-
cans home and the promise of no future
hostage takings in exchange for selling the
Israelis 120 Mod HAWKs. Despite the dif-
ficulty of making all this fit inside a 96-
hour window, it isn't that bad a deal.. . .
Warm regards. Recommend pass to RCM
[McFarlane] after review. North.
(North PROF note to Poindexter, 11/20/85,
21:27:39) The remainder of the note concerned
details about sending "a covert hostage debrief
team to Wiesbaden." (Id.)
In the morning of November 21, North re-
ported to Poindexter a call from Secord. The
transit country's Defense Minister had assured
Secord that the Prime Minister "had approved
the xfer activity for Friday and that the FoMin
is aware and supportive." As they were en
route to Brussels, North suggested that McFar-
lane discreetly thank them for their help.
(North PROF note to Poindexter, 11/21/85,
09:18:36. "Please pass to RCM as avail.") The
operation began to unravel later that day.
Duane Clarridge, in 1985, Chief of the Euro-
pean Division of CIA's Directorate of Oper-
ations, told the Board that he first became in-
volved during the evening of November 21.
North called him for help in obtaining an over-
flight clearance for an El Al 747. On the 22nd,
Clarridge used CIA communications channels
to help obtain the clearance. He had the im-
pression that North was already "in touch with
[the foreign] government at some level." (Clar-
ridge 3) At this time, Charles Allen showed
Clarridge reports indicating that the flight was
part of an operation aimed at the liberation of
hostages, but the CIA was permitted to reveal
only that the flight had a humanitarian pur-
pose. Clarridge informed the U.S. official trying
to obtain flight clearance that he should be in
touch with a man named "Copp", whom Clar-
ridge was told was an alias for Secord. Despite
the CIA's efforts, landing rights were denied.
As a result, North asked for the name of a reli-
able charter airline. Given the shortage of time
and the circumstances, CIA's air branch sug-
gested the use of a proprietary. The proprie-
tary was told to await a call; Clarridge suspects
the caller was to be Copp. In any event, the air-
line was assured that the caller would have suf-
ficient funds for the charter. (Id. at 2-6)
When the issue of a CIA proprietary airline
was raised, Clarridge said, he became con-
cerned about the propriety of CIA action. He
asked Edward Juchniewicz, acting Deputy Di-
rector of Operations, whether he would ap-
prove the operation. He did. (Id. at 4-5) Ac-
cording to the CIA Inspector General, Juch-
niewicz remembered Clarridge alerting him
that
North needed an aircraft to transport some
unspecified material to Israel, and that
North might call him about it. Juchniewicz
remembers receiving a call at home that
night from North, who said he understood
that the Agency had an aircraft and asked
whether it would be possible to charter it.
Juchniewicz says he told North that the
proprietary was a commercial venture and
thus available for charter by anyone. He is
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certain that he did not give North the
name of the proprietary, believing North
already to be in possession of that informa-
tion. Juchniewicz says he did not authorize
the use of the proprietary to anyone, but
acknowledges that his response could have
been interpreted as approval. ([A CIA offi-
cer involved] recalls contacting Juchniewicz
on or before the morning of 25 November
to confirm that the project had been ap-
proved, and being given assurances that it
had.)
(CIA/IG Chronology 7)
One of North's contemporaneous messages
to Poindexter supports part of Clarridge's ac-
count. In the middle of the afternoon, Novem-
ber 22, North wrote that landing clearance still
had not been obtained. "Despite the difficulties
of the past 24 hours, all continue to believe
that if RCM can get thru to the PM or FOMIN,
that this can be done." (North PROF note to
Poindexter, 11/22/85, 19:27:15 ("Status
Report as of 1730") North was considering
three choices for continuing the operation: (1)
chartering a new airline to pick up the cargo in
Tel Aviv; (2) flying the three chartered aircraft
to Tel Aviv, where the cargo would be loaded
and the flight resumed; or (3) flying the three
chartered aircraft to Tel Aviv, loading the
cargo, and proceeding directly to Iran "w/o
filing until airborne. . . ." (Id.) Everybody in-
volved "(including Kimche)" believed the first
option to be the best. North wrote that
"Kimche urges that solution be found to matter
this weekend to protect hostages and those
who will deliver them." (Id.)
At 6:10 p.m., North had more news for Poin-
dexter. McFarlane had contacted the Foreign
Minister at 5:30; he agreed to permit an Israeli
aircraft to land. In addition, North reported on
the CIA's efforts:
Dewey [Clarridge] has arranged for a pro-
prietary to work for Secord (Copp). Copp
will charter two 707s in the name 'of LAKE
Resources (our Swiss Co.) and have them
p/u [pick up] the cargo and deliver it. . . .
[T]he cargo will be xfered to the three Is-
raeli chartered DC-8/55s for the flight to
T[abriz]. Though I am sure Copp suspects,
he does not know that the 707s belong to
a proprietary. Clarridge deserves a
medal-so does Copp.
Kimche (DK) has been told how screwed
up his people are in planning something
like this on such short notice. Not only was
the 747 they planned to use a national air-
lines a/c [aircraft], but they only had it
chartered for 14hrs. We have now taken
charge of that phase of the operation . . .
to ensure flight clearance for the three
DC-8s chartered by DK's boys. If all goes
as we now hope, the cargo will be [at the
staging area] by noon (local) and enroute
[sic] to T shortly after dark. That means
we can expect handovers (hopefully) Satur-
day night.
(Id. ("UPDATE AS OF 1810"))
North's optimism was a hope. He wrote
Poindexter at 7:00 p.m. that Schwimmer had
just reported that he had released the DC-8s,
despite a call from North to Kimche to keep
them on call. "Schwimmer released them to
save $ and now does not think that they can be
re-chartered before Monday." (Id. ("UPDATE
AS OF 1900")) Secord kept the operation alive.
He suggested using
one of our LAKE Resources A/C which
was . . . to p/u a load of ammo for UNO.
He will have the a/c repainted tonight and
put into service nlt [no later than] noon
Sat so that we can at least get this thing
moving. So help me I have never seen any-
thing so screwed up in my life. Will meet
w/ Calero tonite to advise that the ammo
will be several days late in arriving. Too
bad, this was to be our first direct flight to
the resistance field . . . inside Nicaragua.
The ammo was already palletized w/ para-
chutes attached. Maybe we can do it on
Weds or Thurs.
More as it becomes available. One hell of
an operation.
(Id. ("UPDATE AS OF 1920")) 23
Regan recalled that the President had been
informed on the margins of his briefings
for the Gorbachev meeting to expect that
23 On November 26, McFarlane wrote North that he was "in-
clined to think that we should bring this operation into the NSC
and take Mike [Ledeen] out of it but will await John's [Poin-
dexter] thoughts. No further communications to Mike on this
until I have thought it through. Just tell him that I am thinking
about it." (McFarlane PROF note to North, 11/26/85, 12:57:29)
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there is going to be a shipment of arms
coming through [a third country] missiles,
transshipped through Israel into Iran, and
the hostages will come out.
(Regan 14-15)
C. North's Plan to Free the
Hostages
On December 4, in a long note to Poin-
dexter, North reconstructed the story of the
November shipment based on conversations
with the participants, conveyed his view of the
Iranian-Israeli-American situation at that time,
and proposed a plan of action for the future.
The attempted transfer through [a third
country] of 18 Hawk missiles went awry
because the Iranians were in fact seeking a
weapons system that would be capable of
stopping Soviet reconnaissance flights
along the Iranian/Soviet border and on the
Iranian/Iraqi border.24 Gorba [Ghorbani-
far] rptd that these flights occur regularly
and as deep as 40mi inside Iranian air-
space. Because Schwimmer and Ledeen
were unfamiliar with the operational pa-
rameters of the HAWK, they agreed to
ship 120 weapons that were totally inad-
equate to meet the rqmts established by
the Iranians. This delivery has created an
atmosphere of extraordinary distrust on
the part of the Iranians; [sic] in Kimche's
view, because the credibility of the Gorba/
[Iranian] mission has probably seriously
been called into question.
Despite this perception (Gorba said numer-
ous times that this whole thing was a
"cheating game" on the part of the Israe-
lis),25 Copp & Kimche have been able to
proceed with a renewed dialogue which
still promises hope for achieving our three
objectives:
-support for a pragmatic-army ori-
ented faction which could take over in
a change of government
24 Secretary Shultz testified that, on December 6, Poindexter
told him that the transfer "'misfired' when Iran had rejected the
shipment as 'too old-1979 markings'." (Shultz, 12/86, 15; 1/87,
26)
25 Ghorbanifar told the Board that this fiasco caused him to
explode with rage and anxiety at what he and Ledeen agreed was
an example of Israeli incompetence. (Ghorbanifar 117-21)
-return of the five AMCIT hostages
-no more terrorism directed against
U.S. personnel or interests.
From these ongoing discussions, which in
two cases included Iranian military officers,
Copp and Kimche conclude that the mili-
tary situation in Iran is desperate. The Ira-
nian descriptions of the state of their
equipment, lack of competent manage-
ment, inability to use much of the remain-
ing U.S. materiel portends the real possi-
bility of a military collapse (at least by the
Army) in the near to mid-term. Thus, there
is considerable pressure on the interlocu-
tors in Europe to produce-quickly.
Given the relatively low level of compe-
tence on the part of the Iranians in
Europe, and the fact that any supplies de-
livered will undoubtedly have to be exam-
ined by an Army or Air Force officer, it is
very doubtful that a "single transaction"
arrangement can be worked out with the
parties in Tehran, no matter what is
agreed to in Europe. In short, they have
been "scammed" so many times in the past
that the attitude of distrust is very high on
their part. At the same time, in all discus-
sions (including today's phone calls) they
are desperate to conclude some kind of ar-
rangement in the next 10 days and have
even asked that the meeting scheduled for
Saturday in London be advanced. Based
on what we can conclude from intelligence
in Beirut, we believe that they are very
concerned that the hostages (the only Ira-
nian leverage point besides the Jews in
Iran) may be killed or captured/released
by the Syrians, Druze, Phalange or Amal in
the near future. Waite's contacts with the
captors seems [sic] to corroborate this as-
sessment. In short, time is very short for
all parties concerned.
Finally, there is the matter of the longer
term strategy for what we should be at-
tempting to accomplish viz a viz [sic] the
Iran-Iraq war and a more reasonable gov-
ernment in Iran. From my personal discus-
sions with Kimche and Meron 26 it is ap-
26 At this time, Major General Menachem Meron was Director
General of the Israeli Ministry of Defense.
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parent the [sic] the Israelis want: the war
to continue at a stalemate, a more moder-
ate Iranian government in the end and will
somehow find a way to continue getting
their people (Jews) out of Iran through
some kind of barter arrangement. In that
the first two of their goals are, it would
seem, generally congruent w/ our inter-
ests, and their last a fact of life, we should
probably be seeing the return of the
AMCIT hostages as a subsidiary benefit-
not the primary objective, though it may
be a part of the necessary first steps in
achieving the broader objectives. While
Kimche, Meron, Copp and I all agree that
there is a high degree of risk in pursuing
the course we have started, we are now so
far down the road that stopping what has
been started could have even more serious
repercussions. We all view the next steps
as "confidence building" on the part of
both sides. None of us have [sic] any illu-
sions about the cast of characters we are
dealing with on the other side. They are a
primitive, unsophisticated group who are
extraordinarily distrustful of the West in
general and the Israelis/U.S. in particular.
They have not the slightest idea of what is
going on in our government or how our
system works. Today for example, Gorba
called Copp in absolute confusion over the
fact that Rafsanjani had just received a
letter from (of all people) Sen. Helms re-
garding the American Hostages. Since the
Iranians are adamant that they not be pub-
licly connected with the seizure, holding or
release of the AMCITS, why, Gorba
wanted to know, was Helms being brought
into this "solution to the puzzle." Gorba
reiterated that "[Vice President Bush]
ought to have more control over the mem-
bers of his parliament [sic]" than to allow
them to confuse an already difficult prob-
lem. Dick told him the letter had nothing
to do with what we are about, but Gorba
did not seem convinced that this wasn't
some sort of effort to embarass Iran.
Given this very unsophisticated view of
things on their part and the distrust that
the Iranians obviously feel, we believe that
if we stop the current effort at this point
and do not at least proceed with a "test"
of the current relationship we:
-run the risk of never being able to
establish a "foothold" for the longer
term goals in that the people we are
dealing with will be totally discredited
at home; and
-incur the greater likelihood of re-
prisals against us for "leading them
on." These reprisals could take the
form of additional hostage seizures,
execution of some/all of those now
held, or both.
While the threat to carry out sanctions
against us has not, to my knowledge, ever
arisen (it certainly has not since Kimche/
Copp/North have been directly engaged-
and Michael never mentioned it), it is in-
teresting to note that when Copp ques-
tioned the bona fides of Gorba and his co-
horts as capable of delivering on their end
of the arrangement, Gorba carefully noted
that since these discussions began w/ Mi-
chael & Schwimmer, there has not been a
single Islamic Jihad bomb threat, hijacking
or kidnapping-and that there would be
none if this "worked." D.K., Copp and I
regard this to be at least one sign of confi-
dence that this activity may yet prosper.
There are some lesser indications of confi-
dence in recent days:
-in response to Copp's demand for
funds to be deposited in advance to
defray operational costs, and what the
Iranians were told were "purchases on
the arms market" a total of $41M has
been deposited;
-the 18 HAWKs delivered last week
have been repackaged and are ready
for return to origin on the next avail-
able flight;
-the parties in Europe continue to
stress that their requirements are long-
term and that they are anxious to get
on with a longer range program of Is-
raeli originated support which would
include technical assistance w/ sophis-
ticated hardware which is critically
needed but deadlined (in this regard
Gorba at one point noted that at times
they have as few as 50 operational
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tanks and less than a dozen flyable air-
craft).
With all of the above as a lengthy pream-
ble describing two nearly frantic weeks w/
the Israelis & Iranians, the following pro-
posal has evolved which the Iranians today
said they wd like to discuss in detail on
Saturday:
-The total "package" from the Israe-
lis wd consist of 50 I HAWKs w/ PIP
(product improvement package) and
3300 basic TOWs.
-Deliveries wd commence on or
about 12 December as follows:
H-hr: 1 707 w/300 TOWs =1
AMCIT
H+ 10hrs: 1 707 (same A/C)
w/300 TOWs=1 AMCIT
H+ 16hrs: 1 747 w/50 HAWKs &
400 TOWs=2 AMCITs
H+20hrs: 1 707 w/300
TOWs=1 AMCIT
H+24hrs: 1 747 w/2000
TOWs=French Hostage
All involved on our side recognize that this
does not meet one of the basic criteria es-
tablished at the opening of this venture: a
single transaction which would be preced-
ed by a release of the hostages. However,
given the points above regarding the
mutual distrust in the dialogue, we all be-
lieve it is about the only way we get the
overall process moving. Measures have
been taken to reduce the chance for du-
plicity on the part of the Iranians and to
preserve a measure of OPSEC in carrying
out the transaction. In the case of a double
cross, one of the Iranians will be in the
hands of assets we control throughout.
One of them . . . has already suffered a se-
rious (though apparently not fatal) heart
attack after last week's HAWK transaction
failed to produce results. The first two de-
liveries, via 707 freighters are relatively
small and if they do not produce the de-
sired outcomes, all else stops. All $ are
now under our control.
OpSEC concerns are threefold: communi-
cations, deliveries enroute to Iran and re-
plenishment of Israeli stocks. To solve the
first problem an OPs Code is now in use
by all parties. This code is similar to the
one used to oversee deliveries to the Nica-
raguan Resistance and has never been
compromised. The delivery/flight planning
security problem has been solved by a
much more deliberate selection of aircraft
and aircrews as well as a series of transient
airfields which can be used enroute to the
field controlled by the Iranian Army at
Tabriz. Appropriate arrangements have
also been made to ensure that the over-
flight . . . is not challenged. All A/C will
be inspected by one of the Iranians at a
transient location between Tel Aviv and
Tabriz. Before the A/C actually crosses
into Iranian airspace, the appropriate
release(s) must occur. The last OPSEC
concern, that of replenishing Israeli stocks
is probably the most delicate issue. The
quantity of TOWs requested represents [a
significant proportion of] the Israeli PWR
[prepositioned war reserves]. Meron and I
are working w/ the Israeli purchasing
office in NYC to ensure that the replenish-
ment can be accomplished [as] quickly
after December 12 as possible. All recog-
nize that quantities such as those being
discussed degrade Israeli readiness and
that the items will need to be dispatched
quickly in order to preclude disaffection
and leaks. Meron has solved at least one of
the problems in this regard by identifying a
means of transferring the required cash to
an IDF account which will allow cash
(rather than FMS credit) purchases from
the U.S.
In order to put this plan into action,
Kimche, Copp, Schwimmer and Goode
[North] plan to meet in London on Satur-
day morning to review all arrangements. If
we are satisfied that all our assets (money,
aircraft, aircrews, transit facilities, over-
flight arrangements and military equip-
ment) are prepared, Copp and Kimche will
meet at another hotel with Gorba and [an
Iranian diplomat] to finalize the plan. Our
side will then reconvene later in the
evening at our hotel to review any last
minute changes. I wd then call you (using
the Ops code), transmit the agreed upon
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arrangements for approval and, if you
concur, Kimche & Copp will meet again w/
the Iranians on Sunday a.m. to express our
agreement with the plan. Copp & Goode
wd return to the U.S. Sunday p.m. on sep-
arate flights. On the 11th, the day before
the plan is to be executed, Copp will estab-
lish a CP [command post] . . . where he
can monitor implementation and stop it at
any point we desire. The secondary fields
. . . will be covered by Copp controlled
assets who are not witting of the true
origin, destination or contents of the A/C
but who can "fix" things in a hurry if
something goes wrong. . . .
Once in hand, the hostages will be flown
to Larnaca on our Navy HH-53 where they
will be picked up by a EUCOM C-141 and
flown to Wiesbaden for debriefing. The
debrief team will be staged at Wiesbaden
12 hours in advance, just as we did two
weeks ago without notariety [sic]. Dewey
[Clarridge] is the only other person fully
witting of this. . . . The Israelis are in the
same position. Dewey and I have been
through the whole concept twice looking
for holes and can find little that can be
done to improve it given the "trust factor"
with the Iranians. In that all parties in-
volved have great interest in keeping this
as quiet as possible, . . . we beleive [sic] it
to be worth the risk. I have not confided in
Dewey re the longer term goals we could/
should hope to achieve. Thus, the only
parties fully aware of all dimensions of
what we are about are you and RCM
[McFarlane].
I have given careful consideration to what
you suggested re an RCM meeting with the
Iranians in an effort to obtain release of
the hostages before starting on an effort to
undo the present regieme [sic] in Tehran.
Like you and Bud, I find the idea of barter-
ing over the lives of these poor men re-
pugnant. Nonetheless, I believe that we
are, at this point, barring unforseen [sic]
developments in London or Tel Aviv, too
far along with the Iranians to risk turning
back now. If we do not at least make one
more try at this point, we stand a good
chance of condemning some or all to death
and a renewed wave of Islamic Jihad ter-
rorism. While the risks of proceeding are
significant, the risks of not trying one last
time are even greater.
(North PROF note to Poindexter, 12/04/85,
02:02:55)
D. The President and His
Advisors
In his first meeting with the Board on Janu-
ary 16, 1987, the President said he did not re-
member how the November shipment came
about. The President said he objected to the
shipment, and that, as a result of that objec-
tion, the shipment was returned to Israel. In
his second meeting with the Board on February
11, 1987, the President stated that both he and
Regan agreed that they cannot remember any
meeting or conversation in general about a
HAWK shipment. The President said he did
not remember anything about a call-back of the
HAWKs.
The Secretary of State testified:
November 21-the supposed release
date-passed with no release.
On November 22, I was told by my staff
that the release had slipped again, alleged-
ly to get airspace clearance . . . . Also on
that day, however, Ambassador Oakley-as
these things happen, word kind of drifts
around and your stuff, which you don't
know whether it is right or wrong-Ambas-
sador Oakley reported to us that he had
heard from various sources that the hos-
tages would be released that afternoon, in
exchange for 120 HAWKS at $250,000
each-worth $30 million in all.
By this time we were back in Washington.
At a discussion in my presence on that day,
[Mr. Michael Armacost] stated: "I don't like
it. It's terrible."
I indicated my own apprehension. Deputy
Secretary Whitehead noted: "We all feel
uncomfortable." I replied: "Bud says he's
cleared with the President." I regarded it
as a $30 million weapons payoff.
On November 23, we heard again that no
hostages were out, that the project had col-
lapsed. I said, "It's over."
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(Shultz, SRB, 28)
The President was informed "on the margins
of his briefings for the Gorbachev meeting to
expect that there is going to be a shipment of
arms ... missiles, transshipped through Israel
into Iran, and the hostages will come out."
(Regan 14) Around the time of the Geneva
Summit, McFarlane told the President "that
something had happened and the shipment
didn't take place as originally scheduled." (Id.
at 12) Regan recalled that the President had
been "upset" about the September shipment.
(Id. at 9) Regan explained McFarlane's belief
that the President had authorized the transac-
tion as follows: the President "hadn't raised
Cain about the [first] Israeli shipment, so a
second try might not be out of order...... Cer-
tainly there was nothing said to the President
in advance, at least in my hearing, where it was
said, now may we ship missiles to Iran through
Israel. That was not asked of the President."
(Id. at 14)
In his second interview with the Board,_
McFarlane expanded his first account.
I think it would be accurate to say that the
President believed in August that he was
approving the Israeli sale of modest levels
of arms of a certain character, filling cer-
tain criteria, but that with that approval
Israel could transfer or sell modest levels
without further concrete approval..
Now as a separate but obviously related
matter his concurrent expectation was that
how that would be translated would be 100
TOWs. As far as the November shipment,
then, I don't recall that having been a
matter considered in Washington, raised to
the President and decided. When I learned
about it I did report it to the President and
to the Secretary of State and to Mr. Regan
in Geneva. I recall a conversation from
Geneva with the Secretary of Defense, but
I don't want to-I couldn't say beyond just
the fact that it occurred because I always
called him every day to debrief him on the
meetings with Gorbachev, and so it might
have been that.
But, at any rate, I raised it with the Presi-
dent, Mr. Regan. The routine in Geneva
was that each morning before the prebrief-
ing for the Gorbachev meetings he would
have just a short meeting on other Presi-
dential matters in his residence, and for
that the Secretary of State and I and Mr.
Regan would go to the chateau and meet
with him for 15 minutes or so on non-
summit issues, and that would have been
where it would have been raised.
Then we left and walked over to the mo-
torcade and on to the summit.
Well, I wouldn't have reconfirmed it [the
President's authorization] if I wasn't fully
confident of it, and that could have been
on the basis of what was a fairly routine re-
porting of any information that I had on
this, that I would pass it on to the Presi-
dent and he would react to it, and his reac-
tion was always well, cross your fingers or
hope for the best, and keep me informed.
But I was never to say at any point stop
this or disapprove of it.
General Scowcroft: But nobody talked to
you about during the period from Septem-
ber through your learning of this shipment
about the possibility of another shipment,
about arrangements or anything like this
before Rabin meets with you or the next
day when he calls and says we're shipping
something and we're in trouble?.
Mr. McFarlane: I have no concrete recol-
lection of anything like that. I can imagine
that meetings took place, but I don't know
of any idea of a number of weapons to be
sent over. I remember, for example, one
time Mr. Ledeen conveying a concept-it
was not a hard proposal-that the United
States send Phoenix and one or two other
kinds of precision guided systems, and it
was out of the question. I said no.
But never any numerical kind of X day, Y
weapons to Z place.
(McFarlane (2) 39-43)
E. The First Draft of a
"Finding": November 1985
When John McMahon, at that time Deputy
Director of the CIA, heard that a CIA proprie-
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tary was involved in the November operation
and that the Agency had asked foreign govern-
ments to grant overflight clearances for Israeli
aircraft, he asked for a "Finding". Sending
cables was one thing; shipments to Iran, what-
ever their character, was another. (Clarridge 9)
In view of the arms embargo and other con-
trols on trade, they smacked of an operation.
U. McMahon 5; Clarridge 9)
Under section 662 of the Foreign Assistance
Act of 1961, as amended, 22 U.S.C. ? 2422, the
CIA may not use appropriated funds to con-
duct operations (other than to obtain "neces-
sary intelligence") in foreign countries "unless
and until the President finds that each such op-
eration is important to the national security of
the United States. Each such operation shall be
considered a significant anticipated intelligence
activity [covert operation] for the purpose of
section 501 of the National Security Act of
1947." Section 501(b) of the National Security
Act of 1947, as amended, 50 U.S.C. ? 413, pro-
vides, in part, that, where prior notice of covert
actions is not given to the House and Senate
intelligence committees, the President "shall
fully inform the intelligence committees in a
timely fashion of intelligence operations in for-
eign countries, other than activities intended
solely for obtaining necessary intelligence, for
which prior notice was not given under subsec-
tion (a) and shall provide a statement of the
reasons for not giving prior notice." NSDD 159
set forth procedures regarding implementation
of these provisions, as well as for review of
covert actions.
McMahon wrote on December 7, 1985, that,
when he was informed about the CIA's involve-
ment in the November shipment, he "went
through the overhead pointing out that there
was no way we could become involved in any
implementation of this mission without a find-
ing." (McMahon, "Memorandum for the
Record," 12/7/85; J. McMahon 6) Juchniewicz
first protested that "[w]e didn't do it; they
came to us, and we told them we couldn't do it,
so they asked us for the name of an airline, and
we gave them the name of our proprietary." U.
McMahon 6) He explained that
[w]hen General Secord visited the Agency
he tried to get leads on airlines that might
be available to move equipment to the
Near East in a secure fashion. We told him
we did not have any such airlift capability.
However, Mr. Juchniewicz said it was
pointed out to General Secord that there
was a commercial airlift that might do
it. . . . General Secord then took it from
there and made arrangements for a flight
on a strictly commercial basis.
(Memorandum for the Record, supra.) McMa-
hon nonetheless directed operations officers to
brief Stanley Sporkin, at that time General
Counsel of the CIA, and prepare a Finding.
McMahon told Sporkin to draft it to "cover ret-
roactively the use of the Agency's proprietary."
U. McMahon 6; Memorandum for the Record,
supra) Sporkin recalled thinking a Finding was
prudent, but not required by law in this in-
stance. (Sporkin 7-8) He included language
ratifying prior acts by the CIA, and McMahon
accepted it. (Id.)
Sporkin's draft Finding for the President pro-
vided:
I have been briefed on the efforts being
made by private parties to obtain the re-
lease of Americans held hostage in the
Middle East, and hereby find that the fol-
lowing operations in foreign countries (in-
cluding all support necessary to such oper-
ations) are important to the national secu-
rity of the United States. Because of the
extreme sensitivity of these operations, in
the exercise of the President's constitution-
al authorities, I direct the Director of Cen-
tral Intelligence not to brief the Congress
of the United States, as provided for in
Section 501 of the National Security Act of
1947, as amended, until such time as I may
direct otherwise.
Description
The provision of assistance by the Central
Intelligence Agency to private parties in
their attempt to obtain the release of
Americans held hostage in the Middle East.
Such assistance is to include the provision
of transportation, communications, and
other necessary support. As part of these
efforts certain foreign material and muni-
tions may be provided to the Government
of Iran which is taking steps to facilitate
the release of American hostages.
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All prior actions taken by U.S. Government
officials in furtherance of this effort are
hereby ratified.
(Draft Finding enclosed in Casey to Poindexter,
11/26/85)
After speaking to Poindexter about this draft,
the Director of Central Intelligence sent it to
him on November 26, confirming that it
"should go to the President for his signature
and should not be passed around in any hands
below our level." (Casey to Poindexter, 11/26/
85)
Despite some testimony to the contrary, the
President appears not to have signed this Find-
ing. McMahon told the Board that his records
showed that someone told him on December 5
that the President had signed. U. McMahon 7;
Memorandum for the Record, supra) Sporkin
remembered that "[a]nother person who
worked for me told me that at one point he was
with Mr. North and Mr. North said: I want to
give a message to Sporkin, that I've got a piece
of paper that was signed, or some such thing as
that." (Sporkin 8) In November 1986, North
told the Attorney General that he never saw
this draft. (Meese notes of interview with
North, 11/22/86)
F. December 1985: Bird's
Eye View
At the beginning of December 1985, McFar-
lane resigned and Poindexter succeeded him as
Assistant to the President for National Security
Affairs. The next day, December 5, Poindexter
told Secretary Shultz "the operation was at a
decision point, and that he had set up a meet-
ing for Saturday, December 7." 27 (Shultz,
27 Armitage had lunch with North in late November, after
seeing reports that someone in the White House was meeting
with Iranians. North acknowledged meeting Iranians in Europe,
and Armitage
said to him, I don't think my boss knows anything about this.
I doubt that Secretary of State Shultz knows anything about
[this]. I think your ass is way out on a limb and you best get
all the elephants together to discuss the issue.
Ollie was, I think, a little shocked that I was so strong about
the necessity of getting everybody together.
(Armitage 4-5) Ambassador Oakley, the Near East and South
Asia bureau at the State Department, told the Board that he and
Under Secretary of State for Political Affairs Michael Armacost
forced an NSPG meeting to be held at this time. (Oakley 4)
SRB, 29) According to notes of the Secretary's
side of the conversation taken by the Secre-
tary's Executive Assistant, Poindexter said there
would be "[n]o calendar to show it." The Sec-
retary of State "said the operation should be
stopped; that I had been informed that Iran
was playing a big role in Lebanon which even
Syria could not influence. I told him: `We are
signalling to Iran that they can kidnap people
for profit."' (Id.) In the course of this "long
phone call," (id. at 30), in which, according to
notes by the Secretary's Executive Assistant,
Poindexter gave Secretary Shultz more infor-
mation that McFarlane ever had, Poindexter
may have made use of a memorandum, dated
December 5, 1985, apparently by North. Poin-
dexter told the Secretary of State "that 3,300
TOWs and 60 HAWKs were being discussed."
(Id.)
North's memorandum briefly summarized the
history of the transactions with Iran through
Weir's release and then described the current
situation.
The Iranians have significant interest in
continuing this process. They are under
extraordinary military pressure from Iraq
and are, by their own admission, subject to
regular overflights of Iranian territory by
Soviet aircraft. They currently have no ca-
pability to deal with this affront and find
themselves in an increasingly desperate sit-
uation vis-a-vis Iraq. They have urged the
Israelis, with whom they are in contact, to
continue the process which resulted in the
release of Benjamin Weir.
Our continuing efforts to achieve release
of the hostages through diplomatic and
other means have proven fruitless. There
are numerous indications including reports
from the special representative of the
Archbishop of Canterbury, Terry Waite,
that time is running out for the hostages.
We are relatively confident of information
that former Beirut Chief of Station, Bill
Buckley, is dead. We also know, from
Waite's November 14 visit to Beirut and a
separate contact through Canada, that the
other five hostages, Anderson, Jacobsen,
Jenco, Kilburn, and Sutherland are still
alive. Waite and others credibly report that
those who hold the hostages are under im-
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mense political and military pressure from
the Syrians, Druze, Phalange, and Amal
and that there is the distinct possibility that
our hostages as well as the French and
British could be killed in the near future.
The Iranians, who have been in contact
with the Israelis, are cognizant of the pres-
sure being placed on the Hizballah surro-
gates in Lebanon and that it is entirely
likely that the only leverage they will have
over us (the hostages) may no longer be
available in the near future. These Irani-
ans, the same that arranged the release of
Weir, have now proposed that in exchange
for an immediate delivery of 3,300 TOW
missiles and 50 Improved HAWK Surface-
to-Air missiles from Israel, they will guar-
antee:
-The release of the five Americans
and one of the French hostages still
being held.
-No further acts [of] Shia fundamen-
talist terrorism (hijackings; bombings,
kidnappings) directed against U.S.
property or personnel.
There is considerable reason not to accept
this proposal. It is contrary to our stated
policy of not making concessions to terror-
ists or those who sponsor them. It is also
possible that such an arrangement is a
"double-cross" in that the Iranians can not
or will not release the captives as agreed.
Such an arrangement, bartering for the
lives of innocent human beings, is repug-
nant. Finally, the quantities which the Ira-
nians wish to purchase will significantly de-
grade Israeli stockpiles and require very
prompt replenishment.
U. S. Interests: Notwithstanding the undesir-
able nature of such a transaction, it must
be noted that the first two Israeli objec-
tives are congruent with our own interests:
-A more moderate Iranian govern-
ment is essential to stability in the Per-
sian Gulf and MidEast.
-Such a change of government in
Iran is most likely to come about as a
consequence of a credible military es-
tablishment which is able to withstand
the Iraqi onslought [sic] and deter
Soviet adventurism/intimidation. The
Iranian army (not the Revolutionary
Guards) must be capable of at least
stalemating the war.
-Shia fundamentalist terrorism is a
serious threat to the United States
which has long-term adverse conse-
quences for our interests and we must
endeavor to stop its spread.
-The return of the American hos-
tages will relieve a major domestic and
international liability-in addition to
its obvious humanitarian aspect.
The first three of these goals may well be
achievable-and the fourth accrued as a
subsidiary benefit-by commencing the
process of allowing the Israeli sales as pro-
posed by the Iranian agents in Europe. It
is unlikely, however, that we can proceed
further toward the first three-and not at
all on the hostage release unless we allow
the process of delivery to begin.
Discussions toward this end have been pro-
ceeding among the Israelis, Iranians and a
U.S. businessman acting privately on
behalf of the USG for nearly three weeks.
There are several indications of confidence
that an arrangement can be consummated
in the next 10 days which would result in
the release of the hostages and commence-
ment of a process leading toward the first
three objectives above. The military situa-
tion in the Iran/Iraq war and the increas-
ing pressure on the Hizballah in Lebanon
both point toward immediate action. There
is also, as the Iranian intermediaries point-
edly noted last week, a complete absence
of any Shia fundamentalist hijackings, as-
sassinations, hostage seizures, or bombings
since this dialogue began in September.
While there have not been expressed or
implied threats by the Iranians in these di-
cussions, the Israeli and U.S. private citi-
zen participants believe that if the current
effort is not at least tried, we run the risk
of abandoning both the longer term goals
and the likelihood of reprisals against us
for "leading them on." These reprisals
would probably take the form of additional
hostage seizures, execution of some/all of
those now held; or both.
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Next Steps: The Iranians, the Israelis, and
our U.S. businessman plan to meet in
London on Saturday, December 6 to dis-
cuss whether or not to proceed with the
sale of the TOWs and HAWKs. The Israeli
government has informally told us that if
they can be assured of "prompt" resupply,
they will sell the quantities requested from
their prepositioned war reserve. 3,300
TOWs represents [sic] [a significant pro-
portion] their available supplies.
The U.S. businessman has arranged for the
charter of two non-U.S. registered aircraft
for use in the deliveries. The total delivery
would be conducted in 5 flights from Tel
Aviv to Tabriz, Iran via interim airfields in
Europe. . . . Each delivery is to result in
the release of a specified number of hos-
tages. Arrangements for the interim air-
fields, overflight rights, and flight plans
have been made, some with the help of the
CIA. A communications code to preserve
operational security is available for use by
all parties. All aircraft would be inspected
by an Iranian at one of the transient loca-
tions between Tel Aviv and Tabriz. The
entire evolution is designed to be complet-
ed in a 24 hour period. It can be stopped
at any point if the Iranians fail to deliver.
The greatest operational security concern
is that of replenishing Israeli stocks. The
Israelis have identified a means of transfer-
ring the Iranian provided funds to an Is-
raeli Defense Force (IDF) account, which
will be used for purchasing items not nec-
essarily covered by FMS. They will have to
purchase the replenishment items from the
U.S. in FMS transaction from U.S. stocks.
[sic] Both-the number of weapons and the
size of the cash transfer could draw atten-
tion. If a single transaction is more than
$14.9 M, we would normally have to notify
Congress. The Israelis are prepared to jus-
tify the large quantity and urgency based
on damage caused to the equipment in
storage.
If this process achieves the release of the
hostages and proves the credibility of the
Iranian contacts in Europe, Bud McFarlane
would then step in to supervise achieving
the longer range goals. Additional meet-
ings with the Iranians would be arranged
to further our objectives without requiring
such large scale sales/deliveries by the Is-
raelis.
Approval is now required for us to take the
next steps on Saturday. After carefully con-
sidering the liabilities inherent in this plan,
it would appear that we must make one
last try or we will risk condemning some or
all of the hostages to death and undergo-
ing a. renewed wave of Islamic Jihad terror-
ism. While the risks of proceeding are sig-
nificant, the risks of not trying are even
greater.
([North], "Special Project Re Iran," 12/5/85)
The President met his principal national se-
curity advisors on December 7 in his residence.
The President, Secretaries of State and De-
fense, Deputy Director of the CIA, McFarlane,
Poindexter, and the President's Chief of Staff
attended. (Ellen M. Jones, Presidential Diarist,
to Jay M. Stephens, 1/24/87 (information from
the Presidential Calender, which apparently is
called a Diary))
Recollections of the meeting vary. In his
meeting with the Board on January 26, 1987,
the President said he recalled discussing a com-
plex Iranian proposal for weapons delivered by
the Israelis in installments prior to the release
of the hostages. The President said that Secre-
tary Shultz and Secretary Weinberger objected
to the plan, and that this was the first time he
"noted down" their opposition. The President
said that the discussion at the meeting pro-
duced a stalemate.
The Attorney General remembered attend-
ing; he did not think McFarlane was present,
and thought that Fortier probably attended.
(Meese 4) The subject of the meeting-the Iran
transactions-was announced in advance, and
the principals had time to prepare. (Shultz,
SRB, 31; Armitage, 5) According to the Secre-
tary of State,
Poindexter suggested that Mr. McFarlane
could contact the Iranians in London to
ask them to release the hostages without
getting equipment. If they would do so,
we, then, would be prepared for a better
relationship with them.
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I fully supported this proposal.
Vice Admiral Poindexter suggested that
Mr. McFarlane should be authorized to ask
the British to sell arms to Israel [?Iran] if
the Iranians rejected his first proposal. I
opposed this idea. I said it was still U.S.
arms, that it was a more complicated deal
that would make us even more vulnerable.
Other views were expressed.
No decision was made, however, at that
meeting, as far as I could see....
On December 7, Vice Admiral Poindexter
told me privately that the project had
fallen apart during Thanksgiving week.
That is thinking back to that period. He
said he had recommended to the President
that we disengage, but that the President
did not want to.
I felt in the meeting that there were views
opposed, some in favor, and the President
didn't really take a position, but he seemed
to, he was in favor of this project somehow
or other. And, of course, by now he has
said publicly that he was in favor of work-
ing at the Iranian operation and being will-
ing to sell arms as a signal, as he has now
put it.
(Shultz, SRB, 31-32)
When the Secretary of State returned to his
office, he told his staff that Secretary Wein-
berger and Regan also strongly opposed the
initiative. The Secretary of Defense spoke for
thirty minutes. The Secretary told his staff he
felt that he perhaps should have barged in ear-
lier and confronted the President. The prob-
lem, he felt, was that McFarland did not tell
him the whole story.
The Secretary of Defense had a different
recollection of the meeting, which he remem-
bered as taking place in the Oval Office.
[T]here was a quite specific, more detailed
proposal that there had indeed been nego-
tiations and discussions between somebody
representing McFarlane's office and some
Iranians who were reported to be moder-
ates. I think at that meeting John McMa-
hon was there. I'm not sure. Bill Casey
may have been, or they both may have
been. But there were some adverse com-
ments passed about the veracity of the Ira-
nians involved, I think Ghorbanifar or
some such name, but a more formal pres-
entation was now made by McFarlane
about what could be accomplished with
this and points with respect to getting a
better relationship with Iran as well as
hopes that they might have a favorable
effect on the release of the hostages.
Again, I opposed it very strongly and said
I thought really it was a terrible idea and
that the transfer of arms which was part of
the plan which was to be done to establish
the good faith of the negotiators-I think I
made some comment about what about the
good faith of the Iranian negotiators, and
why-went through a whole catalogue of
things which didn't require any gift of
prophecy as to what would happen if this
became public. . . . [T]he advice I gave in
this case was as firm as I could do it, obvi-
ously not persuasive enough but as persua-
sive as I could do it, that all kinds of very
unfortunate effects would result if this took
place, that we were pleading with a large
number of countries not to do this, that
Jordan and Egypt regarded Iran as at least
as much of a great Satan as they regarded
us, and that it would be a very bad thing in
every way to do, and that it wouldn't ac-
complish anything, and that they would un-
doubtedly continue to milk us.
At this time again, the Israeli connection
or the Israeli support of such a transaction
I guess is the better way to put it, was ad-
vanced by McFarlane. And I said that an-
other of the problems that I thought with
it was that doing anything of this kind and
attempting to keep it on a clandestine basis
would leave us open to blackmail of the
very most elementary kind by the people
who knew about it, that is, the Israelis and
also Iranians, and that any time they
weren't getting what they wanted, they
could in one way or another, in Mideast
fashion, go public with it and cause all
kinds of problems with it, that there was
no way that I ever felt I could talk with
[moderate Arab States] again if we were
supplying arms to [a] bitter enemy when
we wouldn't supply arms to him et cetera,
et cetera, just a whole series of arguments.
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George Shultz made some very strong ar-
guments along the same line . . . A very
strong, very persuasive argument. And
again, my impression pretty clearly was
that the President agreed that this couldn't
be done, that it might be a good thing to
achieve these objectives but it wouldn't
work, and that this was not a good way to
do it.
(Weinberger 9-12) Armitage remembered the
Secretary of Defense saying that he and Secre-
tary Shultz "thought they had `strangled the
baby in the cradle'." (Armitage 6)
In his first interview with the Board, McFar-
lane recalled suggesting to the President on
December 1 that the negotiations with the Ira-
nians "seemed to be getting skewed towards
arms going that way and hostages coming this
way. . . . I thought we ought to seek a meet-
ing directly with the Iranians and discontinue
any kind of sponsorship of arms transfers."
(McFarlane (1) 25) In this interview, McFarlane
remembered the President's suggesting an NSC
meeting to consider it. (Id.) At the meeting,
we went through the record of what had
occurred since August in terms of Israeli
transfers and the absence of meetings, and
at consensus, the unanimous view of all of
his advisors, the President decided: All
right, you go to London, McFarlane, and
you meet with the Iranians and make clear
that we remain open to the political dis-
course, and here it is. And there were
about four generic areas that we wanted to
talk to Iran about, our disagreements and
so forth.
And the second point is that we will not
transfer nor encourage any other govern-
ment to transfer weapons to them.
(Id. at 26)
McFarlane gave the Board a fuller account in
his second interview.
[R]ight after the summit, after I got back
from debriefing the Holy Father and Mit-
terand and Prime Minister Thatcher, we
had some time to look at other things, and
I didn't even come to the office. I went di-
rectly from London to Washington to Cali-
fornia but had two days before the Presi-
dent got there to just kind of think
through how things had gone, and they
hadn't gone very well.
The idea originally of us getting in direct
communication with Iranian officials hadn't
happened, and instead this imperfect dem-
onstration of bona fides had been imper-
fect, rather dramatically, and had become
their priority, with a very clear lack of good
faith, I thought. And I said to the Presi-
dent after thinking about it, and I went
down to Santa Barbara and we talked, both
about my resignation but then about the
results of this program. And I believe it oc-
curred in the Century Plaza Hotel on a
morning.
And I said that it seems to me that we
ought to try to reorient it to its original
purpose. Mr. President, and that is for us
to avoid dealing through intermediaries
and to talk to Iranians directly, and he
agreed with that. And he said convene the
NSC-the Secretary of State and Defense-
and let's talk it over when we get back. So
that is what led me to then do two things-
convene a meeting and tentatively ask Ad-
miral Poindexter, I believe, to have a meet-
ing with the Iranian intermediary set up in
London.
So with that prelude a meeting was con-
vened on December 7 of the NSC, and I
would, I believe, have presided because I
was still sitting in the chair. What I am
saying now is based upon routine and not
notes from it. But I always started off by
briefing the issue. Here we are today con-
vened to talk about the Iranian program.
Here is what has happened since the be-
ginning and here is the return, the benefits
and the liabilities of it, and the decision is
what should we do or what should we do
henceforth-continue as we have, change,
or something else.
And then invite the comments of every-
body around the table, usually start with
the Secretary of State, then the Secretary
of Defense, and around the table, and that
would have led to the Director of the CIA,
and any one of the other ad hoc members
that happened to be present. Usually it was
Mr. Regan.
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And it was unanimous in the meeting that
this really had gone badly off course and
that we should yes, still be open to talking
to Iranian officials, authorities, and have a
concrete political agenda to describe. And
we talked a little bit about that-our view
of our interests in the area, how they were
threatened by Iran, disagreements we had
with them over terrorism and fundamental-
ists' crusade in the Middle East, and ulti-
mately perhaps even some common inter-
est-Afghanistan and elsewhere.
But because of how things had gone up
until then we ought to also tell them that
we were not going to transfer U.S. weap-
ons, sell U.S. weapons. We were not going
to allow or encourage anybody else to do
so. And I don't recall anybody disagreeing
with that at all.
The President wasn't terribly-didn't inter-
vene in the meeting, as I recall, very much
on one side or the other, but at the end
said well, okay. That's what you should
say. And I left that evening and was in
London the next morning, and we took off
from there.
(McFarlane (2) 45-47)
Regan's recollection is somewhat different.
He recalled that, although McMahan, for exam-
ple, was informally dressed,
the December meeting got to be more
formal because McMahon, among others,
raised the question of, you know, what the
hell are we doing here. Arms are being
sent. Where is the formal authority? You
know, what are we doing here? Is this
going to be policy?
And as a result of that meeting and people
expressing views which now are commonly
known, such as State Department and De-
fense opposed to this. CIA was in favor.
NSC was in favor. And I must say that I fa-
vored it. I won't deny that I favored keep-
ing the channel open, if necessary selling a
modest amount of arms, in order to make
certain that we were having contacts with
Iran and at the same time, if as a result of
this they could influence the Hizballah, as
they had in the case of Benjamin Weir,
why not.
So I am not certain, but I think I probably
also reflect for the most part the Presi-
dent's view on that.
(Regan 14-15)
John McMahon, who represented the CIA,
recalled that [t]here was no decision. We didn't
walk away with any marching orders or any de-
cision at that moment." The President asked
questions about strengthening moderates in
Iran by selling weapons. McMahon "pointed
out that we had no knowledge of any moder-
ates in Iran, that most of the moderates had
been slaughtered when Khomeini took over."
U. McMahon 11-12) He noted that any weap-
ons sold "would end up in the front, and that
would be to the detriment of the Iran-Iraq bal-
ance." (Id. at 12) He did not know that McFar-
lane was about to leave for London. (Id.)
After the meeting, McFarlane went to
London, where he joined North. North had
traveled on December 6 to meet Kimche,
Secord, and Schwimmer "to review all the ar-
rangements" in connection with the plan North
set forth in his note to Poindexter of December
4. (North PROF note to Poindexter, 12/4/85,
02:02:55) On December 8, before meeting with
Ghorbanifar, and Nimrodi, McFarlane privately
reported his instructions to Kimche. Kimche
was upset and he said: I think you're miss-
ing a big opportunity; that you have to
have some patience; that these movements
take time to consolidate; and these people
are delivering to us important items, infor-
mation basically; and that we see signs
from our intelligence that they're making
headway and beginning to lock up and
arrest radical elements and put their own
people in more responsible positions, and
the gradual evidence of their growing in-
fluence and ability to act.
And I said: Well, we don't see that; and
further, we think it is being skewed off in
the wrong direction. So he said: Well, we
disagree.
And we went ahead and met with this Mr.
Ghorbanifar, and in the course of about
three hours 11covered my instructions. And
he said: Well, I understand the political
dialogue, and our people in Iran are very
much open to that; and so, the point is
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that you are misunderstanding how much
turmoil there is in Iran. There is quite a
lot of conflict between the radical and cen-
trist and traditionalist elements there, and
it is just not going to succeed in getting
my superiors to take much in the way of
risk if they don't see that the United States
is truly willing to demonstrate the political
capital investment to do it.
And I said: I understand what you say; my
instructions are these, and we are not
going to transfer any more arms. Well, we
had not and did not, but Israel had.28
In his second interview with the Board,
McFarlane provided more detail than in his
first:
Colonel North was already there, and I
went alone, and I may have had-I think I
was alone, and was met on arrival by Colo-
nel North at Heathrow and we went in to
the Hilton Hotel and I asked to get togeth-
er with Mr. Kimche. And he said well, we
will set that up right away, and we did, I
believe, within an hour or so in the Hilton
that morning.
And I had known him for a long time and
then got right to the point and said that
this was well-meaning, well-intentioned,
but it hasn't turned out and the President
has decided that it has to be reoriented
very substantially and my instructions are
to say that if they are open to dialogue, we
are too, and if not so be it, but under no
circumstances are we prepared to sell arms
nor to allow anybody else to either.
And he rejoindered and said he thought
that we should have more patience and try
to keep this going.
28 The Maximum Version's account of this part of the conver-
sation reads: "Mr. McFarlane made clear that a Western dialogue
with Iran would be precluded unless Iran was willing to use its
influence to achieve the release of Western hostages in Beirut.
He also made clear that we could not and would not engage in
trading arms for hostages." (Maximum Version at 5)
The Historical Chronology account reads: "At this meeting,
Mr. McFarlane, as instructed by the President, stated that: . . .
-the U.S. could under no circumstances transfer arms to
Iran in exchange for hostages." (Historically Chronology at
On November 23, 1986, North told the Attorney General, W.
Bradford Reynolds, Charles J. Cooper, and John Richardson, that
McFarlane told Kimche during these meetings that the transac-
tion could not be seen to be an exchange of arms for hostages.
(Reynolds notes) (McFarlane (1) 27-28)
Chairman Tower: So this was in effect
going back to the August approval on our
part, or the termination of the August ap-
proval?
Mr. McFarlane: Yes, sir.
Chairman Tower: I'm sorry to interrupt.
Go ahead.
Mr. McFarlane: And Mr. Kimche said that
while he could understand why we were
disappointed that this was the nature of
things in the Middle East and they couldn't
always go as hoped, and we ought to keep
going with it. And it was irreconcilable,
really, and I said I'm sorry, we just-I have
my instructions. And he told me the meet-
ing, I think the meeting was for 3:00, I
think, 2:00 or 3:00 in the afternoon, and
we went on separately to the meeting.
And at the meeting, which was in a West
End London apartment-and I don't know.
I've seen reports that it was Mr. Schwim-
mer's apartment. I don't know that first
hand. But at the meeting I met with, from
the Israeli side, again Mr. Kimche and Mr.
Nimrodi. The only Iranian present, to my
knowledge, was Mr. Ghorbanifar. And
from the American side myself and Colo-
nel North.
And it was about a three-hour meeting, as
I recall. Colonel North was. the notetaker.
And I began my brief saying here is our
experience or our view of the experience
of the past three months or so, and our
purposes are these, and they haven't been
met, and we think that there has been bad
faith on the Iranian side, and it calls into
question two fundamentals from our point
of view. Number one, is there good faith at
all and whether or not there is, is there
competence, is there real authority. Can
you take decisions and change things?
Our conclusions are that we are open to a
political dialogue, and I have developed
that, to his great dismay, for about an
hour. And I said that the President has de-
cided that there can be no sale of U.S.
weapons nor will we approve the sale by
others of weapons.
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And he replied in a kind of a cursory fash-
ion, accepting that his superiors in Tehran
were in fact interested in changing Iranian
policy and forming a government with
better relations with the West, but that I
had to understand that their vulnerability
was quite high and that they needed badly
to maintain their own support from within
the military and that the coin of that rela-
tionship and support and strength within
Iran was the weapons.
And I listened to him talk for a half hour
or so, and just in observing, as any human
being does, to evaluate what kind of
person this was, and by this time I had also
after the Summit gotten a lot more infor-
mation about him, but it was mostly from
that meeting where it was very apparent
that his agenda was buying weapons and
his interest in our political agenda very su-
perficial.
And though he purported or represented
that his seniors were interested in that he
personally obviously was not conversant
with those things and had only a passing
interest in them. And after hearing him out
I said, well, I understand what you have
said. I delivered my instructions. Please
convey that to your government. And
that's the end of it.
And I left and went back briefly to the
Hilton to pick up some things and went on
out to the airplane and took off.
Senator Muskie: Did Ghorbanifar express
any concern about the quality of the arms
shipment, the HAWKs?
Mr. McFarlane: That seems likely, Mr. Sec-
retary. I think he complained about a lot of
things that were foreign to me, but I think
probably he did.
Chairman Tower: What kind of representa-
tions did he make to you about the people
that he was in liaison with in Iran or that
he represented? Did he go into the matter
of the three lines or factions with you at all
in Iran? Or did he talk about one specific
faction or group?
Mr. McFarlane: We had received intelli-
gence on the political map of Tehran, so
to speak, from two sources. We in the
United States had received from the Israe=
lis what they had received from the Irani-
ans, and separately Mr. Ghorbanifar trans-
ferred to us his own product of intelligence
that described, as you say, these three lines
of political affiliation that were, call it, radi-
cal-center and conservative.
But that goes back to August, really, the
original product, and in this meeting he
did describe that the people with whom he
was associated included basically those who
were oriented toward a less extreme return
to kind of a non-aligned position but
normal trade and discourse with the West
and retrenchment on this fundamentalist
crusade, and recognized the isolation that
it was producing, and did however have
within it mullahs, some bazaaris and a sub-
stantial number of military leaders and
people from outside the government like
the bazaaris.
(McFarlane (2) 48-53)
Ghorbanifar provided the Board with his ver-
sion of the December meeting. He said the
meeting took place at Nimrodi's London home,
with Kimche, Schwimmer, McFarlane, North,
and Secord. Ghorbanifar described the meeting
as an exchange of "tough" lectures.
McFarlane gave a lecture that we want to
know the importance, strategic point of
Iran, we know the people, we know we had
bitter relations before, and so on and so
on, and we want a better one.
I said what are you talking about? You just
left a mess behind and you want something
else? I was tough. I explained, I explained
to him that what is the situation inside Iran
between the rival groups, between the poli-
ticians, what is this mess, what the hell a
problem has brought this one, this issue
has presented to this big policy.
I told him what the hell is this, what is the
problem, you leave a mess behind, and if
you want to continue this way, I said, just
is better you cut off and don't put us, the
blame on us, and by the fire on your side
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because then there will be fire back on
your interests.
(Ghorbanifar 122-123) Ghorbanifar also re-
membered Nir saying that Ledeen, Schwimmer,
Nimrodi, and Kimche no longer would partici-
pate in the negotiations or the transaction. (Id.
at 120)
North returned from London on December
8. The next day, he submitted a memorandum
to McFarlane and Poindexter summarizing the
results of the London meetings and setting
forth a new plan of action.
The meetings this weekend with the Israe-
lis and Gorbanifahr [sic] were inconclusive.
Gorbanifahr refused to return to Geneva
with our message that no further deliveries
would be undertaken until all the hostages
were released. Gorbanifahr and the Israelis
both believe that if he were to pass such a
message to the Iranian Prime Minister or
the Oil Minister (who provides funds for
items delivered)-one or more of the hos-
tages would be executed. Gorbanifahr
noted that nine Hizballah leaders had been
summoned to Tehran on Friday [Decem-
ber 6] and that, given the pressures inside
Lebanon, all it would take for the hostages
to be killed would be for Tehran to "stop
saying no."
Much of what we decide to do in the days
ahead depends upon whether or not we
can trust Gorbanifahr. The Israelis believe
him to be genuine. Gorbanifahr's earlier
game plan delivered Reverend Weir. He
has proposed that we "deliver something"
so that he can retain credibility with the
regime in Tehran. He even suggested that
the weapons delivered be useful only to
the Army or Air Force (not the Revolution-
ary Guards) and that they be "technically
disabled." He urged that, if improved
HAWKs were not feasible, to at least keep
the door open by some kind of delivery be-
tween now and the end of the week. He
said we must recognize that if TOWs are
provided that they will probably go to the
Revolutionary Guards.
The Israelis have willingly consented to
"kick-back" arrangement which allows Is-
raeli control over Gorbanifahr and Ayatol-
lah Karami. Israel believes strongly in
using any means to bridge into Iran. Their
last three governments over a four year
period have been consistent in this theme.
Whether we trust Gorbanifahr or not, he is
irrefutably the deepest penetration we have
yet achieved into the current Iranian Gov-
ernment. There is nothing in any of the
[tailored intelligence reporting] which con-
tradicts what he has told us or the Israelis
over the past several months. Much of our
ability to influence the course of events in
achieving a more moderate Iranian Gov-
ernment depends on the validity of what
Gorbanifahr has told us-and his credibil-
ity as one who can "deliver" on what the
Iranians need. While it is possible that
Gorbanifahr is doubling us or simply lining
his own pockets, we have relatively little to
lose in meeting his proposal; i.e., the Israe-
lis start delivering TOWs and no hostages
are recovered. On the other hand, a supply
operation now could very well trigger re-
sults he claims.
The current situation is one in which infor-
mation is incomplete, the motivation of the
various participants uncertain, and our
operational control tenuous in that we
have had to deal exclusively through the
Israelis. The near term risk to the hostages
has undoubtedly been increased by Iranian
"expectations" arising from earlier deci-
sions to proceed with deliveries and by the
increasing pressure against Hizballah in
Lebanon. Terry Waite, our only access to
events in Lebanon, readily admits that his
influence is marginal at best. Waite shares
our belief that the hostages are increasing-
ly endangered and that one or more of
them could well be executed by the end of
the week.
Our greatest liability throughout has been
lack of operational control over transac-
tions with Gorbanifahr. The Israeli contact,
Schwimmer, has arranged deliveries of
items which were not requested by Gor-
banifahr for the Iranian military. Further,
the terms which he negotiated are disad-
vantageous to the IDF and our ability to
replenish the Israelis. It was apparent,
during the meeting with McFarlane, that
Gorbanifahr preferred to deliver only items
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useful to the Iranian military-not the Rev-
olutionary Guard. Despite admonishments
to the contrary, Schwimmer had already ar-
ranged for the 3,300 TOWs as part of the
next steps.
Schwimmer's arrangements would have ex-
changed the 3,300 TOWs for three hos-
tages at a price which would not allow the
IDF to recoup expenses, thus complicating
our ability to replenish IDF stores. In
short, most of the problems with this en-
deavor have arisen because we have been
unable to exercise operational control over
arrangements or their expected outcome.
For example, at the meeting with McFar-
lane we learned for the first time that the
Iranians want desperately to return the 18
basic HAWK missiles which are still in
Tehran. All agree that we should only do
so if the in-bound aircraft has something
aboard which the Iranians want. At the end
of the meeting it was agreed that we would
"get back" to Gorbanifahr quickly as to
our next steps. He departed for Geneva to
brief the Iranian Oil Minister to the effect
that "technical difficulties. remain to be
overcome before further deliveries can be
scheduled."
The question which now must be asked is
should we take a relatively small risk by al-
lowing (encouraging) a small Israeli-origi-
nated delivery of TOWs and hope for the
best or should we do nothing? If such a
delivery were to take place, we would have
to plan to replenish the Israeli stocks on a
"routine" basis to avoid drawing attention.
If we are to prevent the death or more of
the hostages in the near future, we appear
to have four options available:
Accept Gorbanifahr/Schwimmer's game
plan:
-Stretch any replenishment to Israel
over several months making it routine.
-1,100 TOWs are maximum risk ma-
terielly [sic]. Cost and cover can be
maintained by selling from stock to
Israel over time.
-If hostages are recovered disclosure
doesn't hurt much.
Raid and attempt rescue:
-If this option is pursued, then the
military should be directed to execute
by NLT next Saturday and talks with
Gorbanifahr should be resumed. in
effort to hold Hizballah in check over
the next 6 days.
Allow the Israelis to deliver 400-500
TOWs while picking up 18 HAWKs in
effort to show good faith to both factions
in Iran:
-This could cause Iran to deliver a
hostage as sign of cooperation. It will
also serve to boost Gorbanifahr's rep-
utation.
-Israel could do this unilaterally and
seek routine replacements.
-This gives U.S. more breathing time
(maybe!).
Do nothing:
-Very dangerous since U. S. has, in
fact, pursued earlier Presidential decision to
play along with Gorbanifahr's plan.
U.S. reversal now in mid-stream could
ignite Iranian fire-hostages would be
our minimum losses.
There is a fifth option which has not yet
been discussed. We could, with an appro-
priate covert action Finding commence de-
liveries ourselves, using Secord as our con-
duit to control Gorbanifahr and delivery
operations. This proposal has considerable
merit in that we will reduce our vulnerabil-
ities in the replenishment of Israeli stocks
and can provide items like the Improved
HAWK (PIP II) which the Iranian Air
Force wants and the Israelis do not have.
Finally, Secord can arrange for third coun-
try nationals to conduct a survey of ground
and air military requirements which is what
Gorbanifahr has been attempting to obtain
from the Israelis for nearly three months.
(North to McFarlane/Poindexter, 12/9/85)
McFarlane reported to the President, the
Secretary of Defense, the Director of Central
Intelligence, Regan, and Poindexter on Decem-
ber 10. (Jones to Stephens, 1/24/87 (Presiden-
tial calendar); DC1 to DDCI, 12/10/85) On his
way to the NATO Ministerial Meeting in Brus-
sels, the Secretary of State received a report of
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the meeting: "White House meeting this morn-
ing. The turn-off is complete (we think).
McFarlane turned down in London. Ollie did
paper saying this means hostages will die."
(Shultz, SRB, 34)
The President told the Board on January 26,
1987, that McFarlane expressed no confidence
in the Iranian intermediary he met in London
(Ghorbanifar). The President said McFarlane
recommended rejection of the latest Iranian
plan. The President said he agreed. "I had to."
In a memorandum, dated December 10,
1985, the Director of Central Intelligence
noted that McFarlane
did not have a good impression of Gorban-
ifehr [sic] and recommended that we not
pursue the proposed relationship with him.
He recommended that we pursue the rela-
tionship with others representing the mod-
erate forces in the Iranian government,
talking and listening to them on a purely
intelligence basis but being alert to any
action that might influence events in Iran.
2. Everybody supported this in our round-
table discussion. Other options which Bud
had suggested were to let the Israelis go
ahead doing what they would probably do
anyway, and hope we get some benefit, or
to mount a rescue effort. The President
argued mildly for letting the operation go
ahead without any commitments from us
except that we should ultimately fill up the
Israeli pipeline in any event, or the Con-
gress will do it for us. He was afraid that
terminating the ongoing discussions, as
Bud had speculated they might, could lead
to early action against the hostages. The
trend of the succession of this was that it
was a little disingenuous and would still
bear the onus of having traded with the
captors and provide an incentive for them
to do some more kidnapping, which was
the main burden of the argument against
going forward on the program. The Presi-
dent felt that any ongoing contact would
be justified and any charges that might be
made later could be met and justified as an
effort to influence future events in Iran. I
did point out that there was historical
precedent for this and that was always the
rationale the Israelis had given us for their
providing arms to Iran. . . .
4. As the meeting broke up, I had the idea
that the President had not entirely given
up on encouraging the Israelis to carry on
with the Iranians. I suspect he would be
willing to run the risk and take the heat in
the future if this will lead to springing the
hostages. It appears that Bud has the
action.
(Casey to DDCI, 12/10/85)
In his first interview with the Board, McFar-
lane remembered that the meeting occurred on
December 11, and that the Vice President and
John McMahon (for the Director of Central In-
telligence) attended.
I debriefed that I had carried out my in-
structions and came home. But I added, I
said: Whatever may be the case in Iran,
this fellow is a person of no integrity and I
would not do any more business with him,
the Iranian Ghorbanifar. And I left the
government believing that it was discontin-
ued.
(McFarlane (1) 28)
In his second interview, McFarlane added:
I believe, unlike the preparatory meeting
on the seventh, this time Mr. Casey was
there but the Secretary of State was not.
And Mr. Regan and the Secretary of De-
fense I recall specifically sitting opposite
me in the Oval Office. And it was a short
meeting, I think probably fifteen or twenty
minutes, and I stated basically that I had
carried out the instructions, that I had
made the two points, and went through the
specific content of our political agenda that
we were prepared to talk about, and the
second point on the unwillingness from
our side to sell arms or authorize anybody
else to do so, and that they acknowledged
that they were prepared for this political
dialogue but that it was unrealistic to
assume that it could occur or make any
headway without weapons, and that at that
impasse the talks were broken off.
And then separately I provided kind of a
commentary on my evaluation of Mr.
Ghorbanifar, which was that he was not a
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trustworthy person and had a very differ-
ent agenda from our own and was an un-
satisfactory intermediary. And finally I be-
lieve I also said that it is conceivable some
day that our original point, the political
dialogue, they may come back to you on. I
doubt it, but I recommend that you have
nothing further to do with this person nor
with these arms transfers.
And the President was rather pensive. At
that point the Secretary of Defense kind of
assertively made the point. He said, I agree
with Bud that this program is a very ill-ad-
vised program and that we should have
nothing further to do with it, and the
President was still kind of reflective, nod-
ding but not saying anything, as I recall it.
I think Mr. Casey was essentially passive
but listening and said well, so be it or
something accepting that kind of emerging
consensus. And that was the end of it.
General Scowcroft: In other words, you
think what you said is let's stop this pro-
gram and if the dialogue is going to come
maybe they will get back to us, but clear
termination of the program?
Mr. McFarlane: Yes, it is, General, and I
say that not only because I believe that was
my reaction to the three months' experi-
ence of it but because as a practical matter
I was leaving the government and I had
real misgivings about this thing going on
at all afterwards.
General Scowcroft: Do you remember Ollie
North saying to you or writing a memo or
anything saying this means the hostages
will die?
Mr. McFarlane: No, I don't.
Senator Muskie: Or Ghorbanifar?
Mr. McFarlane: I hadn't thought about
that, Mr. Secretary, although he was given
to extravagant kinds of things. It wouldn't
surprise me if he said that.
[The President] was, however, of a mood
that was not uncommon when he was un-
comfortable with the situation, when in this
case everyone else in the room seemed to
be of one view and he didn't want to
oppose that view. I don't recall his having
been emphatic about an opposing point of
view.
The President was always very hopeful, op-
timistic and on almost every issue, and I
think on this one on that day, was disap-
pointed that he hadn't turned out so far,
but always looking for the bright side or
the possibility that it could be salvaged.
But concretely did he say anything by way
of decision? I don't believe so.
And I drew my conclusion that well, Mr.
Regan did say he agreed that it ought to
be closed out, as I recall.
I would characterize it as a recommenda-
tion on my part that there should be noth-
ing more to do with this person, Ghorbani-
far, that there be no further arms shipped
whatsoever by anyone, that in my judg-
ment that would lead to a complete discon-
tinuation of any exchanges, finally that I
could imagine someday they might come
back and say all right, without any arms in-
volved we are open to your political
agenda, but that concretely don't do busi-
ness with that person and don't sell any
arms.
Chairman Tower: Well, was the suggestion
that if there was to be a reopening of this
that it would come from them?
Mr. McFarlane: That's right.
(McFarlane (2) 55-58)
Regan recalled that,
right after [McFarlane's] return there was a
meeting with the President, and I believe
Shultz, Weinberger and Casey were
present, to discuss what further should be
done. Bud led me to believe that this con-
tact, while it wasn't as good as they had
originally hoped and that it wasn't as pro-
ductive a contact as they had hoped, and
we weren't getting any hostages out, we
weren't really meeting with the top side of
the Iranian government. And, accordingly,
something different had to be tried.
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The NSC were trying to make contacts
through Ghorbanifar directly to a higher
level within Iran. They were trying to es-
tablish better relations than just the people
with whom they were meeting in Europe.
This is one of the things that McFarlane
brought back from his meeting. . . . [De-
spite his negative impression of Ghorbani-
far, McFarlane stated] that we could and
should make contacts at a different level, at
a better level than Ghorbanifar.
[T]he President urged that, as a matter of
fact, that we try something else or abandon
the whole project, because he wanted to
keep it open not only for geopolitical rea-
sons but also the fact that we weren't get-
ting anywhere in getting .more hostages
out. And we were going to spend another
Christmas with hostages there, and he is
looking powerless and inept as President
because he's unable to do anything to get
the hostages out.
(Regan 15, 31-32, 17) Weinberger did not re-
member this meeting. (Weinberger 14)
F. The NSC Staff, the CIA,
and Ghorbanifar: December
1985 January 1986
Some ten days after this meeting, Ghorbani-
far visited Washington. (Ledeen (1) 7) 29 Ghor-
banifar's visit was one of a number of meetings
and conversations in December 1985 about
which little is known. Early in the month,
Ledeen told Clarridge and Charles Allen that
he had important intelligence about Iranian-
backed terrorism in Western Europe. He pro-
vided Ghorbanifar's name and telephone num-
bers to Allen, and said he had McFarlane's ap-
proval to pursue the matter. He told Allen
Kimche was involved. (C. Allen 10; CIA/IG
Chronology 11) The Director of Central Intelli-
gence met Ledeen on December 19. On De-
29 According to the NSC "Chronology of Events: U.S.-Iran Dia-
logue," dated 11/20/86, Ghorbanifar came to the United States
on December 22 for meetings with American officials. This date
is consistent with a suggestion in a memorandum from the Chief
of the CIA's Near East Directorate to the Director of Central In-
telligence. See pp. et seq. infra. Ghorbanifar told the Board only
that he visited Washington in December 1985. (Ghorbanifar 127)
cember 22 and 23, Ledeen and Ghorbanifar
met the Chief of the CIA's Iran desk.
According to the CIA's report of the meeting
Ledeen met this. official alone, and reviewed his
relationship with Ghorbanifar.
He said about a year ago, he (Ledeen) had
gone to the former National Security Advi-
sor Robert McFarlane to discuss the need
for an Iran policy. Ledeen suggested to
McFarlane that he be authorized to contact
the Israeli Government to see what could
be done in conjunction with them. McFar-
lane authorized this contact and shortly
thereafter Ledeen met Prime Minister
Peres. Ledeen added that Peres was very
enthusiastic about working with Ledeen
and the U.S. Government on the Iranian
problem and told him about their contact
with Subject [Ghorbanifar]. Two Israeli of-
ficials, David Kimche and Jacob Nimradi
[sic], introduced Ledeen to Subject. Since
then, he has seen Subject 20-30 times,
often in conjunction with Kimche and Nim-
radi. It was from this contact that the oper-
ation developed to have the Israelis at our
behest deliver to Iran 500 Tow [sic] mis-
siles and, more recently, 18 Hawk missiles
in exchange for the release of all the hos-
tages held in Lebanon. Ledeen is con-
vinced that the release of Reverend Weir
was tied directly to the first shipment of
missiles. Ledeen went on to say, however,
that he never really expected the Iranians
to deliver all the hostages given the "Irani-
an's merchant mentality."
-The delivery of the Hawk missiles
has been an operational nightmare.
There was a misunderstanding about
the type of missiles the Iranians were
seeking. They wanted a missile that
could hit a target at seventy-thousand
feet and already had Hawk missiles in
their arsenal. What they thought they
were going to get was a modified and
advanced version of the Hawk. They
are quite angry about the delivery of
the missiles and have asked that they
be removed from Iran as soon as pos-
sible. Their presence in Iran is politi-
cally troublesome to the Iranian hier-
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archy. They are now asking for Hercu-
les or Phoenix missiles.
-Ledeen stated that at a recent high-
level meeting which included the
President, Secretary of State Schultz
[sic] and Defense Secretary Weinberg-
er a decision was made not to proceed
with Ghorbanifar in an effort to re-
lease the hostages. Schultz and Wein-
berger reportedly were quite unhappy
about this operation.
-As an aside, Ledeen noted they had
purposely overcharged the Iranians
and had used around $200,000 of
these funds to support Subject's politi-
cal contacts inside Iran. Later that
same evening, Subject stated he was
holding $40 million which the Iranians
want returned.
-Ledeen is a fan of Subject and de-
scribes him as a "wonderful man ....
[sic] almost too good to be true." He
had asked Subject to come to the U.S.
to meet with us in order to straighten
out his credibility and to find a way to
keep the relationship going with him.
The number one item in this latter
area is his proposed Libyan operation.
Ledeen said that when he learned of
our Burn Notice on Subject, he con-
tacted him in an effort to have him ex-
plain situation (see Attachment A). He
commented that Subject admitted
lying to us, saying he could not reveal
his source nor explain his relationship
with senior Iranian officials. He felt we
would not understand his relationship
with the Iranian government. We sug-
gested that perhaps a new polygraph
would be useful given these latest rev-
elations. He agreed to a polygraph to
be conducted in the Hqs area on 6
January.
-In closing out this session, Ledeen
made the point that any serious covert
action operations directed against Iran
using Ghorbanifar should be run out
of the White House not CIA because
"it will leak from Congress."
(Chief, NESA, to DCI, n.d.)
The meeting continued at 9 p.m. at Ledeen's
house, with Ghorbanifar. Ghorbanifar discussed
a three-man "Iranian hit team," operating in
Europe with instructions to assassinate a
number of Iranian ex-patriots. On December
23, Ghorbanifar again met the CIA official, and
named his source about the assassins. This
name provoked the comment:
This is the same source who provided the false in-
formation last March concerning an alleged Ira-
nian plan to assassinate Presidential candidates
which did not hold up during Subject's poly-
graph.
(Comment: Subject's reporting on this
team [Iranian hit team] is very reminiscent
of his previous terrorist reporting which,
after investigation and polygraph, turned
out to be fabricated. It is our feeling there
are bits of valid information in Subject's
reporting but he has embellished and pro-
jected his own feelings in presenting this
information as hard fact. This has been a
presistant [sic] problem throughout the
four years we have known him. His report-
ing has sometimes been useful but it is ex-
tremely difficult to separate the good from
the bad information. It is hard to find in
the file any instance where his reporting in
fact resulted in a solid development.)
(Id.) The Chief of the Near East Division in
CIA's Operations Directorate later said of him:
"This is a guy who lies with zest." (C/NE (1)
48)
Ghorbanifar used the rest of the interview to
discuss Iranian politics-he described political
groupings as "Lines." He also provided infor-
mation on Islamic Jihad, which preliminarily did
not appear useful to the CIA, and his relations
with Iranian leaders, especially an official in
the Prime Minister's office. (Chief, NESA, to
DCI, n.d.)
-Subject said that because of the ne-
gotiations concerning the exchange of
the hostages for missiles, there has not
been a terrorist act directed against
the USG since July. He implied that
this might change now that the negoti-
ations have broken off.
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(Id.) Ghorbanifar, supported by Ledeen, then
proposed a "sting" operation against Qadha-
fi-accepting $10 million to stage the disap-
pearance of the Libyan opposition leader, al-
Mugarieff.
Ghorbanifar planned to travel to London on
December 24; he agreed to return for a poly-
graph test on January 5 or 6. The interview
ended when, at 11 p.m., North "dropped by to
say hello to Subject and to talk with him about
the problem of retrieving the missiles from
Iran. We departed at 2400 hours and it was ar-
ranged to get together on the afternoon of 23
December to discuss further some of his
ideas." (Id.)
On December 23, North met Ledeen at the
Madison Hotel at 2:30 p.m., (North calendar),
where Ghorbanifar was staying under the alias
Nicholas Kralis. (Chief, NESA, to DCI, n.d.) At
3:45 p.m. on the 23rd, North met Secord at the
Hay Adams Hotel. (North calendar) Also on
December 23, the Director of Central Intelli-
gence sent the President a memorandum, in-
cluding as the fifth paragraph:
The Iranian Gorbanifar [sic], who the NSC
staff believes arranged to release Weir,
turned up in Washington over the week-
end. Ollie North put him in touch with us.
He has 3 or 4 scenarios he would like to
play out. He gave us information about 3
Iranians going into Hamburg as a hit team.
We have verified their movement but not
their purpose. It could be a deception to
impress us. It is necessary to be careful in
talking with Gorbanifar. Still, when our
man talked to him on Saturday and asked
him if he would take another polygraph he
said he would. We think this is worth
doing for what we might learn. We want to
prepare thoroughly for polygraphing him
and because he is going to Switzerland for
Christmas, it is understood that he will
return here in a week or so for further dis-
cussions and for a polygraph.
(Casey to President, 12/23/86)
Finally, Charles Allen told the Board that he
understood that Nir came to Washington in
December, and North briefed him on Decem-
ber 23 "on this initiative"-that is, on the pro-
gram in light of McFarlane's meetings in
London. (C. Allen 53) In late December, Allen
gave the NSC staff a copy of an August 1984
CIA "burn notice" on Ghorbanifar to the effect
that he was a fabricator whose information
should not be trusted. (CIA/IG Report 19) On
December 24, North met Gen. Uri Simhoni and
Col. Moshe Zur, (North calendar), whom his
secretary described to Allen and Bernard Ma-
kowka as "Israeli intelligence." (CIA/IG Chro-
nology 12)
Ghorbanifar took a polygraph test in the
afternoon and evening, January 11, 1986 and
showed deception on almost all of the ques-
tions. (Memorandum for the Record, "Ghor-
banifar Polygraph Examination") 30 One report
on the test stated:
He showed deception on virtually all of the
relevant questions. He has lied/fabricated
his information on terrorist activities and
tried to mislead us concerning his relation-
ship with the Farsi line inside Iran. He also
has distorted [name deleted] role in Islam-
ic Jihad. Moreover, Ghorbanifar was tested
on his involvement in the deal to release
the hostages. The test indicated that he
knew ahead of time that the hostages
would not be released and deliberately
tried to decieve us both independently and
with "B".
Ghorbanifar provided new information
concerning an alleged terrorist plan to
attack U. S. interests in Saudi Arabia. He
was also tested on this information and
was shown to be lying.
It seemed clear from Ghorbanifar's behav-
ior that he realized that the polygraph test
indicated deception. While he commented
during the test that he was comfortable
with all of the test questions, he said that
perhaps the machine might indicate some
problems on a series of questions concern-
ing Farsi and the rightists inside Iran. He
said he had been told by "White House
representatives" not to discuss this topic
with CIA because the operation was "too
far advanced" and if CIA were involved "it
would require Congressional briefings."
He went on to add that he supposedly ex-
pended $800,000 of his own funds for this
so George Cave and C/NE/I told the Board that Cave pre-
pared the questions for the examination. (Cave 3-5; C/NE (2) 76)
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purpose and has been assured by these
"White House representatives" that he will
be reimbursed for these expenditures.
(Comment: The polygraph operator stated
that Ghorbanifar's explanation/rationaliza-
tion would not influence the test results on
the questions being asked in connection
with Farsi and his supporters).
In discussing the hostage deal, Ghorbani-
far stated he was very comfortable with the
questions asked. During one of the breaks
in the testing, he commented that the Is-
raelis received $24 million as soon as the
shipment was delivered and they are hold-
ing all of the funds that the Iranians are
requesting be returned. He added that the
Israelis told him that they had "doubled"
the cost of the shipment apparently be-
cause the Americans were involved. He
said the Iranians were very upset about the
last shipment and might resort to terrorist
activities against U. S. interests. He re-
marked the Iranians have been refraining
from these terrorist activities since the ne-
gotiations began.
Ghorbanifar is clearly a fabricator and
wheeler-dealer who has undertaken activi-
ties prejudicial to U. S. interests.
Neither Ghorbanifar nor Ledeen have [sic]
been advised about the results of the test.
Michael Ledeen asked that he be informed
about the results of the test as soon as pos-
sible. He was called on the morning of 12
January and told that the polygraph opera-
tor will be reviewing the results on Sunday
[January 12] and we should have feedback
about the test on 13 January.
(Id.)
A paper entitled "Comments on Ghorbani-
far's Polygraph" noted, in part, that he
(a) Lied/fabricated his information on ter-
rorist activities;
(b) Tried to mislead us concerning his re-
lationship with the "rightist line inside
Iran";
(c) He distorted the leadership role of
Seyyed Mohammad Khatemi inside Islamic
Jihad;
(d) He showed deception on the question
of whether he was under the control of the
Iranian Government.
The test also indicated Ghorbanifar knew
ahead of time that the hostages would not
be released despite our providing missiles
to the Iranians. He deliberately tried to de-
ceive us on this issue both independently
and with the collusion of "B".
("Comments on Ghorbanifar's Polygraph")
The polygraph examiner reported, on Janu-
ary 13, 1986, to the effect that Ghorbanifar was
indeed a fabricator of evidence. He noted,
moreover, that polygraph examinations in
March and June 1984 had produced the same
conclusion. On January 11, 1986, Ghorbanifar
was tested in "a local hotel" in Washington.
"The english [sic] language was used." "De-
ception indicated to thirteen of the fifteen rele-
vant questions. Inconclusive to the remaining
two." Some "relevant" questions, answers, and
tracings by the polygraph were:
A. Has IDEN C . . . personally told you he
is willing to cooperate with "US" intelli-
gence? ANSWER: Yes.
B. Are you trying to deceive us about
IDEN C's actual degree of influence with
IDEN E [Islamic Jihad]? ANSWER: No.
Testing showed deception to question B.
Question A is inconclusive due to inconsistent
reactions.
Ghorbanifar was questioned about his knowl-
edge of Iranian terrorist activities. "Relevant"
questions and answers were:
C. Are you trying to decieve us in any way
about the source of the information re-
garding the three-man team (the IDEN G
[Hamad Hassani] three-man hit team)?
ANSWER: No.
D. Regarding European-based IDEN B
[Iran/Iranian] terrorist, have you deliber-
ately fabricated any of the information you
have provided? ANSWER: No.
E. Did IDEN F . . . tell you the Hamburg
Team (The IDEN G three-man hit team)
killed IDEN L [Aziz Muradi]? ANSWER:
Yes.
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F. Other than what you have told us, are
you aware of ongoing plans targeting "US"
persons or interests for acts of terrorism
you are not telling us about? ANSWER:
No.
Testing showed deception to questions C, D,
E, and F.
The test produced similar results when
Ghorbanifar was questioned about "'new' in-
formation about terrorist's current plans target-
ed against `USG'. While discussing this topic,
`G' was occasionally evasive and often reluctant
to answer questions." He also contradicted
himself, although he did outline a meeting,
during which IDEN C asked an Iranian for 300
kilograms of plastic explosive to use against
United States facilities in Saudi Arabia, and a
Lebanese Palestinian Shiite terrorist asked for
more efficient Iranian logistical support in de-
livering $6,000,000 worth of terrorist arma-
ments. ("Polygraph" Division to C/NE/IRAN,
1/13/86)
At the request of the Director of Central In-
telligence, Charles Allen interviewed Ghorbani-
far for five hours on January 13, 1986. This
conversation generated a nine-page report. Di-
rector Casey wanted, Allen reported, "to obtain
a general overview of the information he pos-
sesses, not to conduct a detailed debriefing."
(C. Allen, "Interview with Subject [Ghorbani-
far]," 1/29/86) Ghorbanifar sought a "more
principled" relationship with the CIA, based on
his usefulness as "a turn-key project man,"
rather than an employee. He explained that,
when, in 1980-82 the CIA had communicated
its mistrust of him to other intelligence agen-
cies, he had retaliated. Ghorbanifar had per-
suaded individuals whom he could influence
not to cooperate with the CIA. (Id. at 1-2)
Ghorbanifar explained his present goal was
the modification of the Khomeini regime and
the alignment of Iran with the West.
Subject [Ghorbanifar] stated that he
wished to work with the US Government
and CIA in a number of areas. Clearly, the
US hostages held in Lebanon were a high
priority. He would continue to work with
the White House on this issue; this effort
would be kept separate. A second area
would be to assist the West in blunting Ira-
nian terrorism. A third area would be
working with the Agency to thwart Libyan
and Syrian-sponsored terrorism and to
assist in the overthrow of Libyan leader
Qadhafi. (Id. at 2)
With regard to the hostages, Ghorbanifar
made three points. High Iranian officials were
interested in a new relationship with the United
States. They could release, or kill, the hostages.
Whether the United States pursued a relation-
ship with Iran would decide the hostages' fate.
If the United States missed the opportunity, the
hostages would be killed and new terrorist acts
would occur.
Ghorbanifar's Tehran contact, Prime Minister
Mir Hosein Musavi-Khamenei, and Minister of
Oil Gholam Reza Aqazadeh "'will lose face'
soon" unless the United States went forward
with arms supplies through Israel. These men
told President Ali Khameini that the United
States was willing to provide advanced weapons
"in return for Tehran's promise to secure the
release of US hostages held in Lebanon. They
had assured other senior officials that a long-
term relationship with the United States was
possible and in negotiation; as a result, Iranian
terrorist attacks against the United States had
ceased for seven months. "Subject stated that
`the Islamic Jihad Organization (IJO)' would
strike soon unless a new understanding was
reached, perhaps as early as 24 January." (Id.)
Subject stated that he had convinced the
Prime Minister and the Minister of Oil to
trust the United States with Israel acting as
an intermediary. Iran had shown "good
faith" by paying in advance of arms deliv-
eries in November. When the goods (Hawk
surface-to-air missiles) arrived in late No-
vember, they were an "old model", costing
four times the price "originally" agreed
upon. The Hawk missiles are still at
Tehran International Airport, awaiting
pickup for return to the West. The Prime
Minister and others believe they "were
cheated." In fact, nine of the 18 Hawks
have the Star of David inscribed on them.
Subject stated that he has told the Prime
Minister that, unless agreement with the
United States is reached by 24 January, he
would no longer wish to serve as an inter-
mediary in dealing with the United States.
8. As far as his personal situation was con-
cerned, Subject expressed no serious con-
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cern. Musavi-Khamenei, . . . and Aqazadeh
all owe Subject substantial sums of money.
[His Tehran contact], moreover, has been
photographed in compromising situations
with Western women, an activity that
would finish him with the Khomeini funda-
mentalist government were it to become
known. Even though all three individuals
are identified with Line Two [fundamental-
ist faction] and have blood on their hands,
he has no fear of them. What concerns
Subject is that, if talks break down with the
United States, widespread terrorist activity
will ensue.
(Id. at 2-3) Ghorbanifar said the Prime Minister
was willing to accept American military assist-
ance, including advice and an unofficial pres-
ence in Tehran, but had been dismayed by the
"cheating thing". (Id. at 3) Originally, the five
American and two Jewish hostages were to
have been released in connection with the ship-
ment of HAWKs. Now, Ghorbanifar said, a
"terrorist war" was possible. Shiite terrorism in
Pakistan, which would prove worrisome to the
United States, was likely. He added that the
"Iranian Revolutionary Guard Corps (IRGC)
can exert control over the Shiite captors of-the
Americans. All that is required for the Ameri-
cans to be freed is for Prime Minister Musavi-
Khamenei to issue an order and the IRGC will
secure their release." (Id.) Conversely, the
three Iranian officials could ensure the death of
the hostages if there were no agreement with
the United States. Ghorbanifar feared the Sovi-
ets might exploit Iranian factionalism; the
second highest official in the Foreign Ministry
was pro-Soviet.
Ghorbanifar gave a long exposition on his
links with Qadhafi's regime and ability to carry
out a "scam" by faking the murder of Margar-
ieff, one of Qadhafi's targets; his sources of in-
formation regarding Iranian terrorism; his in-
formation about Syrian officials, who with the
Polish government, supplied weapons to Irani-
an terrorist networks; and his knowledge of
IRGC-particularly those plotting a coup de main
against Bahrain.
Characterizing Ghorbanifar, Allen wrote that
he
is a highly energetic, excitable individual
who possesses an extraordinarily strong
ego that must be carefully fed. Intelligent
and clearly an individual who has made a
considerable amount of money in procure-
ment of arms and in provision of "other
services", he is relatively straight forward
about what he hopes to get out of any ar-
rangement with the United States. He
deeply resents "his treatment" by the
Agency-in the 1980-82 timeframe and fre-
quently speaks scornfully of a woman with
the name "Lucy" from the US Embassy in
London who met with him at that time. A
personable individual, he also consistently
speaks of his love of Iran and the need to
change the composition of the current gov-
ernment there. It is difficult to gauge just
what Subject's "organization" consist [sic]
of but he appears to have influence over or
business arrangements with a substantial
number of individuals in the Middle East
and Europe and inside Iran itself. We have
hard evidence that he is close to the Prime
Minister, the Minister of Oil, and other
senior officials like an official in the Prime
Minister's office. There is no question,
however, that he exaggerates and inflates
for his own reasons some [?of these?] rela-
tionships. He is impatient if one tries to
pin him down on the specifics of some of
the complex plots that he describes. For
this reason, the best strategy is to go back
over details in a series of meetings so that
all aspects of the plot can be determined.
This indirect approach takes time but
builds rapport with Subject. The worst ap-
proach to Subject would be to attempt to
lecture him.
(Id. at 8-9. Copies to: DCI, DDCI, DDO, DDI,
DC/NE, O/DDO (Clarridge))
At Ghorbanifar's request, on January 23,
Allen met a follower of Ayatollah Shirazi, who
was visiting the United States. He confirmed
Ghorbanifar's connections "in key areas" of the
Middle East. (C. Allen, "Meeting with Hojjat
ol-Eslam Seyyed Mohsen Khatami," 1/31/86)
G. The January 1986
Findings
After the December 10 meeting, Poindexter
told the Secretary of State on January 5, 1986,
the Israelis took action to "revive" the pro-
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gram. Prime Minister Peres' terrorism advisor,
Nir, had seen Poindexter, saying
Israel would identify Hezballah prisoners
held by Lahad [commander of the Chris-
tian South Lebanon Army] in southern
Lebanon who were not "bloody" and offer
to release them and to provide 3,000
TOWs in exchange for the hostages.
I [Shultz] said that this idea presented all
the same problems as before. It would be a
payment that "blows our policy," and
Israel would have an interest in leaking
such a deal. I remarked at the time, "so it's
not dead" and noted that "Peres comes to
me on some things and to the NSC on
others."
I had been told that "Newsweek" had the
story of the Kimche-McFarlane meetings,
but did not run it. I noted that Kimche
may have leaked it deliberately. My impres-
sion at the time was that Vice Admiral
Poindexter's reaction to Mr. Nir's idea was
negative.
The reason for all of that is that I felt that
one of the things Israel wanted was to get
itself into a position where it's arms sales
to Iran could not be criticized by us be-
cause we were conducting this Operation
Staunch and we were trying to persuade
everybody not to sell arms. That is what all
that is about.
(Shultz, SRB, 37) 31
CIA General Counsel Stanley Sporkin contin-
ued working on a draft Finding, and on January
3, he carried a copy to North. (CIA/IG Chro-
nology 13) His draft offered a choice between
notifying Congressional intelligence commit-
tees or postponing such notification until the
President determined it would be appropriate.
(Sporkin 26) North then prepared the neces-
sary documents for Poindexter to submit to the
President with the proposed Finding. North's
draft Finding did not refer to hostage rescue
until Sporkin insisted that it do so. (Id. at 22-
23; CIA/IG Chronology 13) The draft Finding
91 North told the Attorney General's team in November 1986
that, in January 1986, Nir suggested that the Israelis transfer
funds from an account containing residual funds from the arms
transfers to Iran and pay such funds into an account used by the
Nicaraguan Contras. (Reynolds notes; Richardson notes)
did not include the option of notifying Con-
gress.
North submitted the package to Poindexter
by memorandum dated January 4. North wrote
that the Finding was
based on our discussions with Nir and my
subsequent meeting with CIA General
Counsel Stanley Sporkin
At Sporkin's request, I talked to Bill Casey
on [telephone] re the Finding and the
overall approach. He indicated that he
thought the finding was good and that this
is probably the only approach that will
work. He shares our goal of achieving a
more moderate government in Iran
through this process.
(North to Poindexter, Action Memorandum, 1/
4/86.) The package included a memorandum
from Poindexter to the President and a Find-
ing, dated January 6.32
ACTION
MEMORANDUM FOR THE PRESIDENT
FROM: JOHN M. POINDEXTER
SUBJECT: Covert Action Finding regard-
ing Iran
This week, Prime Minister Peres of Israel
secretly dispatched his special advisor on
terrorism with instructions to propose a
plan by which [Israel with limited assist-
ance from the U.S.,] 33 can act [in concert]
to bring about a more moderate govern-
ment in Iran. [The Israelis are very con-
cerned that Iran's deteriorating position in
the war with Iraq, the potential for further
radicalization in Iran, and the possibility of
enhanced Soviet influence in the Gulf all
pose significant threats to the security of
Israel. They believe it is essential that they
act to at least preserve a balance of power
in the region.] 34
32 North's first draft Finding was dated January 3, 1986. The
accompanying memorandum is undated. The changes from the
first drafts are indicated below by square brackets. When the
changes were material, the original language is reproduced in
footnotes.
33 The first draft read: "the U.S. and Israel".
94 The first draft contained the following sentence instead of
the two sentences in this version: "The Israelis are obviously very
concerned that the course of the Iran-Iraq war and the potential
for further radicalization in Iran pose a significant threat to the
security of Israel."
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The Israeli plan is premised on the as-
sumption that moderate elements in Iran
can come to power if these factions dem-
onstrate their credibility in defending Iran
against Iraq and in deterring Soviet inter-
vention. To achieve the strategic goal of a
more moderate Iranian government, the
Israelis are prepared to unilaterally com-
mence selling military materiel to Western-
oriented Iranian factions. It is their belief
that by so doing they can achieve a hereto-
fore unobtainable penetration of the Irani-
an governing heirarchy [sic]. The Israelis
are convinced that the Iranians are so des-
perate for military materiel, expertise and
intelligence that the provision of these re-
sources will result in favorable long-term
changes in personnel and attitudes within
the Iranian government. Further, once the
exchange relationship has commenced, a
dependency would be established on those
who are providing the requisite resources,
thus allowing the providor(s) to coercively
influence near-term events. [Such an out-
come is consistent with our policy objec-
tives and would present significant advan-
tages for U.S. national interests.]
As described by the Prime Minister's emis-
sary, the only requirement the Israelis have
is an assurance that they will be allowed to
purchase U.S. replenishments for the
stocks that they sell to Iran. [Since the Is-
raeli sales are technically a violation of our
Arms Export Control Act embargo for
Iran,] a Presidential Covert Action Finding
is required in order for us to allow the Is-
raeli [transfers to proceed, for our subse-
quent replenishment sales to Israel, or for
other assistance which may be deemed ap-
propriate (e.g., intelligence).] 35
The Covert Action Finding attached at Tab
A provides the lattitude [sic] for the trans-
actions indicated above to proceed. If this
Finding is signed, we would not interfere
when the Israelis unilaterally commence
sales and deliveries of TOW missiles
during January, 1986. [The Finding also au-
35 The first draft contained the following last sentence of this
paragraph: "Since the Israeli sales are technically a violation of
our Arms Export Control Act embargo for Iran, a Presidential
Covert Action Finding is required in order for us to allow the Is-
raeli sales to proceed and for our subsequent replenishment
sales.
thorizes U.S sales of] basic TOWS to Israel
when they submit purchase orders for re-
plenishing their own stocks.
The Iranians have indicated an immediate
requirement for 4,000 basic TOW weapons
for use in the launchers they already hold.
We would be expected to replace the Is-
raeli stocks in less than 30 days. 4,000 mis-
siles represent [a significant percentage] of
all available TOWS in Israel.
[The Israelis are sensitive to a strong U.S.
desire to free our Beirut hostages and have
insisted that the Iranians demonstrate both
influence and good intent by an early re-
lease of the five Americans. Both sides
have agreed that the hostages will be im-
mediately released upon commencement of
this action.] 36 Prime Minister Peres had
his emissary pointedly note that they well
understand our position on [not] making
concessions to terrorists. They also point
out, however, that terrorist groups, move-
ments, and organizations are significantly
easier to influence through governments
than they are by direct approach. In that
we have been unable to exercise any sua-
sion over Hizballah during the course of
nearly two years of kidnappings, this ap-
proach through the government of Iran
may well be our only way to achieve the re-
lease of the Americans held in Beirut. It
must again be noted that since this dia-
logue with the Iranians began in Septem-
ber, Reverend Weir has been released and
there have been no Shia terrorist attacks
against American or Israeli persons, prop-
erty, or interests.
The Israelis have asked for our urgent re-
sponse to this proposal so that they can
plan accordingly. They note that [condi-
tions inside both Iran and Lebanon are
highly volatile and that] the current crisis
in the Middle East provides a rationale for
a significant [Israeli] purchase of TOWs
and expedited delivery on our part. The
Israelis are cognizant that this entire oper-
ation will be terminated if the Iranians
36 The original opening sentence read: "The Israelis and the
Iranians with whom they are in contact agree that the continued
holding of the five American hostages in Beirut will be immedi-
ately solved through commencement of this action."
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abandon their government or allow further
acts of terrorism. In order to provide an
answer to Prime Minister Peres, the Find-
ing at Tab A should be discussed 37 with
Secretaries Shultz, Weinberger, Director
Casey and Attorney General Meese. [Be-
cause of the extreme sensitivity of this
project, it is recommended that you exer-
cise your constitutional perogative [sic] to
withhold notification of the Finding to the
Congressional oversight committees until
such time that you deem it to be appropri-
ate.] 38
The following Finding was attached:
I hereby find that the following operation
in a foreign country (including all support
necessary to such operation) is important
to the national security of the United
States, and due to its extreme sensitivity
and security risks, I determine it is essen-
tial to limit prior notice, and direct the Di-
rector of Central Intelligence to refrain
from reporting this Finding to the Con-
gress as provided in Section 501 of the Na-
tional Security Act of 1947, as amended,
until I otherwise direct.
SCOPE Iran
DESCRIPTION [Assist selected friendly for-
eign liaison services, third countries, which
have established relationships with Iranian
elements, groups, and individuals] sympa-
thetic to U.S. Government interests and
which do not conduct or support terrorist
actions directed against U.S. persons,
property or interests, for the purpose of:
(1) establishing a more moderate govern-
ment in Iran, and (2) obtaining from them
significant intelligence not otherwise ob-
tainable, to determine the current Iranian
Government's intentions with respect to its
neighbors and with respect to terrorist
acts, [and (3) furthering the release of the
American hostages held in Beirut and pre-
venting additional terrorist acts by these
groups.] 39 Provide funds, intelligence,
87 The word "privately" appeared here in the first draft.
se The original sentence read: "If, based on their input, you
decide to proceed, the Finding should be signed and held."
sa Point (3) did not appear in the first draft. According to
Sporkin, this language was added after a meeting on January 5
between Sporkin, North, and Director Casey at the Director's
house. (Sporkin 22-23)
counter-intelligence, training, guidance
and communications, and other necessary
assistance to these elements, groups, indi-
viduals, liaison services and third countries
in support of these activities. The USG will
act to facilitate efforts by third parties and
third countries to establish contact with
moderate elements within and outside the
Government of Iran by providing these
elements with arms, equipment and related
materiel in order to enhance the credibility
of these elements in their effort to achieve
a more pro-U.S. government in Iran by
demonstrating their ability to obtain requi-
site resources to defend their country
against Iraq and intervention by the Soviet
Union. This support will be discontinued if
the U.S. Government learns that these ele-
ments have abandoned their goals of mod-
erating their government and appropriated
the materiel for purposes other than that
[sic] provided by this Finding.
Regan remembered that Poindexter brought
the idea of the Finding and the draft to the
President.
[E]ither on the way back from the west
coast or immediately upon our return from
the west coast-I'm not sure which-Poin-
dexter told the President that we had had
more contacts from the Israelis urging a
new line with the Iranians. But he said he
wanted to do this in a proper fashion and
wanted to have a Finding so that the thing
could be put on a regular track and kept
moving, if we were going to exploit it. And
he brought in a tentative document, a
Finding, for the President to sign.
There were a few things that had to be
changed in that as a result of discussions,
and then there was a formal meeting in the
first part of January on this subject, an
NSPG, a formal meeting.
As a result of that, the President decided
that we should pursue this line, that we
should be prepared to sell arms, and that
we should make a Finding that would au-
thorize and justify that and that he would
sign it.
B-60
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It was discussed with the President, the
Vice President and myself on January 6 as,
"[h]ere's something." 40 You know how you
brief the President 24 hours in advance of
this next meeting so when [he] is doing his
homework he is familiar with the subject.
He was given that piece of paper by John
Poindexter at a regular Monday morning
meeting, a 9:30 meeting, saying "[t]his is
what we're going to discuss tomorrow,"
and the President signing it for some
reason. I don't know. I think it was in
error.
(Regan 17-18; 22-23) After the President
signed this draft, Sporkin reviewed it and, by
hand, added the words "and third parties"
after "third countries" in the second line of the
"Description". (Sporkin 24-25) The Finding
was retyped before the President signed it on
January 17; Sporkin's addition was the only
change.
On January 7, 1986, the President and his
principal advisors met, apparently after an
NSPG meeting that morning, to consider the
Iranian project. As the Attorney General de-
scribed it:
After an NSC meeting or an NSC type
meeting in the Situation Room, a few of us
were asked to gather in the Oval Office.
Now, if you have any information that
would vary from or amplify on what I
know, do not hesitate to bring up the ques-
tions. I am trying to recall from memory.
One of the difficulties that I have, and that
I suspect others may have, is that I consid-
ered this so highly sensitive and classified
that I took almost no notes at any time
during the thing because I didn't want to
reduce anything to paper. I talked with no
one about it, up until a certain point,
which I will relate.
So, therefore, the memory even a year
later, is fairly hazy.
40In response to a question, Regan said that he, the President,
the Vice President, Poindexter, and Rodney McDaniel, Executive
Secretary of the NSC, attended this briefing. According to the
Presidential Diary, Fortier, not McDaniel, attended. (Jones to Ste-
phens, 1/24/87) Regan remembered this fact, and subsequently
corrected himself. (Regan 42)
Anyway, on the seventh, I joined with the
President, the Vice President, Cap Wein-
berger, George Shultz, Don Regan, Bill
Casey, John Poindexter, and I was there,
and there may have been an assistant to
John Poindexter. It may have been Don
Fortier. I am not sure. . . . It was not
North, to the best of my recollection. . . .
Bud wasn't there. . . . At that time, the
topic was brought up about an initiative to
Iran. It was discussed in some detail, large-
ly by John Poindexter, with some participa-
tion by Bill Casey.
It dealt with some overtures to be made to
what were described as more moderate ele-
ments within the Iranian Government, and
it was related to establishing a relationship
so that we would have some influence in
the future at whatever time it was possible
for the Iranian Government to change,
either with the death of the Ayatollah, or
what.
There was also, as I remember, some dis-
cussion that these moderate, these more
moderate forces, thought that they might
effect a change in the government even
sooner than that event happening.
They also talked about this being helpful
in terms of ending the Iraq-Iran War,
trying to get a more reasonable policy
where the Iranian Government would be
less inclined to participate or support sub-
version and terrorism in other countries;
and it was also talked about these people
using their influence to try to help us get
our hostages back.
All of these were factors that went into this
strategic initiative in regard to Iran.
(Meese 3-5) The Attorney General noted that
prior events, such as the arms shipments, were
not mentioned; nor was he then aware that the
President had signed a Finding the previous
day.
As the discussion ensued, it was the idea
that these people wanted a showing of our
good faith and that that involved the ship-
ment of some limited quantities of arms.
They particularly talked about TOW mis-
siles, I believe, and that they, in turn,
would show their good faith by using their
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influence to get the prisoners, the hos-
tages, back.
Again, this is not a precise recollection; but
my general recollection is that this was an-
ticipated: that it would take place over a
fairly short period of time-30 to 60
days-and that that was kind of the general
framework of which everybody was think-
ing, because they talked about us making
available limited quantities of arms, then
they would produce hostages as showing
that they were really able to do something
for us, and that we would then ship more
arms if their good faith had been shown by
helping us get the hostages.
It was kind of a sequence that these events
would follow, along with each other.
There was also a discussion that, because
of the extreme sensitivity, it was recom-
mended that the President not inform
Congress until we had gotten the hostages
back. I vaguely remember there was discus-
sion that as soon as we got the hostages,
even on our planes en route to Wiesbaden,
that we would notify Congress then, before
it became public generally.
So, the subjects and the discussion of a
finding was made at that time, that a find-
ing would be necessary because of the way
in which this was to be done, with CIA
being involved in the transfer of the weap-
ons.
This was discussed for about an hour and
twenty minutes or so. I remember because
I consulted back on my calendar, and I had
a group waiting for me in the White House
Mess that day, and I was late to that lunch-
eon by more than an hour.
Cap and George were opposed to the idea.
I don't remember what the Vice President
or Don Regan might have said. Bill Casey
was very much in favor of the idea.
My own views were that it was a very close
decision. I have called it since a "51-49
decision." But I felt, in the long run, that
the risks that were attendant to this prob-
ably were worth the potential benefit, and
the potential benefits to me were both the
opening into Iran and also the assistance
that would be provided in getting the hos-
tages back. . . . It was my independent
judgment because nobody had talked to
me about it beforehand. But it was also as
a result of the discussion back and forth,
and particularly Poindexter and Casey were
the principal protagonists of going ahead
and doing this. . . . There was a relatively
thorough-I mean, it was very clear that
their [Shultz's and Weinberger's] positions
were that they were opposed to it, that
George felt this was at odds with our
policy in regard to terrorism, that it could
hurt us with our allies or with friends
around the world.
Cap was concerned primarily about the ter-
rorism policy.
The rejoinder, I think by Poindexter, was
that this was a special situation and that
this was not at odds with our overall
policy; it was an exception to the general
situation.
I think what most influenced me was the
idea that we would be taking-that the
risks would be fairly short-term because if
it did not work, we would be able to stop
it; if this didn't produce results after, say,
the first foray, that the thing would be
stopped. There was quite a bit of discus-
sion about that, that this would be in
stages so that it could be stopped.
We knew, in retrospect, that it did not
work out that way.
But that was one of the things that made
it, while a close call, more acceptable, as
far as I was concerned.
(Id. at 6-10)
The Attorney General believed that the
President had an adequate understanding of
the arguments for and against the project.
Nobody described the operational details, apart
from the arms transfers from the Defense De-
partment to the CIA. Ghorbanifar's name was
mentioned, but not Khashoggi's or other mid-
dlemen's and financiers'. The "thinness" of
operational security was not raised.
The feeling was that this would not be re-
vealed, or at least not be revealed while
the hostages were still in jeopardy, and the
risks to the people involved was also dis-
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cussed, so it was felt that they would not
be revealing this.
(Id. at 11) The Attorney General had the im-
pression "that the channel would be, sort of,
simply from DOD to the CIA to the Israelis."
(Id. at 12) The President was confident that the
Israelis constituted "a relatively secure chan-
nel." (Id.) Nevertheless, the Attorney General
remembered,
there were always, I won't say questions,
but I think that the Iranians were the sort
of a sticking point, that we had to try this.
out carefully and be cautious as we imple-
mented this thing, to be sure that these
Iranians would be able to or were sincere
and would be willing to show good faith.
In other words, I think there was a ques-
tionmark left about the Iranians that could
only be tested by going through with this
thing.
(Id. at 13)
At his meeting with the Board on January 26,
1987, the President said he approved a convo-
luted plan whereby Israel would free 20 Hiz-
ballah prisoners, Israel would sell TOW mis-
siles to Iran, the five U.S. citizens in Beirut
would be freed, and the kidnappings would
stop. A draft Covert Action Finding had al-
ready been signed by the President the day
before. the meeting on January 6, 1986. Mr.
Regan told the Board that the draft Finding
may have been signed in error. The President
did not recall signing the January 6 draft.
The President told the Board that he had
several times asked Secretary Weinberger for as-
surances that shipments to Iran would not alter
the military balance with Iraq. He did not indi-
cate when this occurred but stated that he re-
ceived such assurances. The President also said
he was warned by Secretary Shultz that the
arms sales would undercut U.S. efforts to dis-
courage arms sales by its allies to Iran.
The President did not amplify those remarks
in his meeting with the Board on February 11.
[He did add, however, that no one ever dis-
cussed with him the provision of intelligence to
Iran.]
The Secretary of State also remembered the
meeting as occurring in the Oval Office:
I again stated my views in full. I recall no
discussion about a finding then or at any
time thereafter, until it was revealed by
Vice Admiral Poindexter in a meeting at
the White House on November 10, 1986.
I might say that when he read out that
finding, I said that's the first I heard of
that. Cap, who was sitting across the room
from me, said, "I have never heard of it
either."
I recall no specific decision being made in
my presence, though I was well aware of
the President's preferred course, and his
strong desire to establish better relations
with Iran and to save the hostages.
So I felt at that meeting that Cap was
against it and I was against it and every-
body else in the room was in favor.
Well, I stated all of the reasons why I felt
it was a bad idea, and nobody, in retro-
spect, has thought of a reason that I didn't
think of. I mean, I think this is all very pre-
dictable, including the argument against
those who said well, this is all going to be
secret or it is all going to be deniable; that
that is nonsense.
So, all of that was said. And in that January
7 meeting, I know that I not only stated
these things, but I was very concerned
about it, and I expressed myself as force-
fully as I could. That is, I didn't just sort
of rattle these arguments off. I was intense.
The President knew that.
The President was well aware of my views.
I think everybody was well aware of my
views.
It wasn't just saying oh, Mr. President, this
is terrible, don't do it. There were reasons
given that were spelled out and which are
the reasons that you would expect.
[N]obody said very much. As I made these
arguments, Cap basically agreed with
them. He didn't restate them. But I took
the initiative as the person in the room
who was opposed to what was being pro-
posed. I cannot give you a full accounting,
but it was clear to me by the time we went
out that the President, the Vice President,
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the Director of Central Intelligence, the
Attorney General, the Chief of Staff, the
National Security Advisor all had one opin-
ion and I had a different one and Cap
shared it.
The nature of the players the risks when-
I would say "when," not "if"-it came for-
ward publicly - the description always was
that Israel was going to be the conduit,
and, therefore, it would be deniable, and
we'd just say well, we don't know anything
about it, and it's something Israel is doing,
and so on. All of this was argued with, that
it wouldn't work.
(Shultz, SRB, 38, 42-44)
Regan's recollection differed. He recalled
discussion of Congressional notification at the
NSPG meeting.
I remember Casey speaking on it and Ed
Meese speaking on it at the NSPG on De-
cember 7 [sic: January 7], that this should
be on a close hold basis . . . and notifica-
tion given later to the Congress because
there were lives involved where we would
be dealing here with hostages and because
of the sensitivity of the new contacts we
were attempting to establish within Iran
being blown if there was premature disclo-
sure, that the notification should come
later rather than now.
the Lebanon-Syria area. Some of these fac-
tions probably have our hostages and they
can be instrumental in getting those out,
and he wants to keep that avenue open.
I think [that] is what led him to do it.
(Regan 24, 29)
In response to a question about the degree
of discussion of the risks, Regan noted:
The President was told, but by no means
was it really teed up for him of what the
downside risk would be here as far as
American public opinion was concerned.
There was no sampling. No one attempted
to do this. The NSC certainly didn't in any
paper or any discussion say that.
I don't believe the State Department in its
presentation arguing against this really
brought out the sensitivity of this. None of
us was aware of that, I regret to say.
(Id. at 30) Nor was the President warned that
"all hell would break loose" with Congress. (Id.
at 31) Regan heard, but disagreed with, the op-
ponents of the program.
I recognized the validity of what [Secretar-
ies Shultz and Weinberger] were saying,
you know, that we didn't want to be in a
position of trading one for one. Give me a
hostage, and to get 100 rifles or whatever
the price would be. No, we couldn't be in
that.
Now why did the President do it? There
are two things, I think. First of all, he does
have this feeling, still has this feeling, that
we cannot allow Iran to fall into the Soviet
camp. Khomeini is 86. He's been reported
and reported in ill health and on the verge
of death. We have no contacts there. We
are alone. Well, not alone, but we are one
of six nations that doesn't have an ambas-
sador or some type of relationship with
that country.
We are in the position of not being able to
be ballplayers there if any type of situation
erupts as a result of the Ayatollah and we
should have contacts.
Secondly, there is no doubt in our minds
that they have an enormous amount of in-
fluence on various religious factions within
But I have to be a little bit personal here.
In my other capacity as head of Merrill,
Lynch, I opened an office in Tehran for
Merrill, Lynch and have very close connec-
tions in Tehran in the era of the Shah
during the '70s. I believed in that country
and I thought that that country had quite a
future. And I recognized that for us, the
United States, to have no connections
whatsoever with Iran was a foolish thing to
do from an international political point of
view as well as an economic point of view.
And, accordingly, I was all for keeping a
line open to whoever was the constituted
government of Iran in an effort to some-
time be a player in that country's future.
(Id. at 36-37)
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The Secretary of Defense had an imprecise
recollection of the meeting, except with regard
to one point:
The only time that I got the impression
the President was for this thing was in Jan-
uary, which was January 6 or 7, and at that
time it became very apparent to me that
the cause I was supporting was lost and
that the President was for it. And shortly
after that, we got a call, I didn't, but Colin
Powell did, I believe, from John Poindexter
who by that time had succeeded, saying
there had been such a decision and the
President wanted us to proceed with the
transfer of this intitial set of arms. The
numbers changed. I think initially it was
2,000, and went up to 4,000, but they were
to be transferred in amounts sort of as
drawn.
But we were to transfer them to the CIA
and to nobody else. And I made clear that
that was the only way that we would oper-
ate, that it had to be transferred to the
CIA, not directly by us to anyone else be-
cause we couldn't do that, and that it had
to be an Economy Act transfer, which as
you know, means we've got to be paid
value for it.
I said we would carry out the Commander-
in-Chief's orders to do this, and obviously
we would hold it as closely as possible be-
cause that was not only the direction but
the obvious thing to do.
(Weinberger 14-15)
The President signed a new Finding, identi-
cal to the January 6 document with Sporkin's
revision, on January 17. He told the Board on
January 26, 1987, that the Finding was present-
ed to him under cover of a memorandum from
Poindexter of the same date. The President
said he was briefed on the contents of the
memorandum but stated that he did not read
it. This is reflected in Poindexter's hand-writ-
ten note on the memorandum. That note also
indicates that the Vice President, Regan, and
Fortier were present for the briefing.
Regan did not recall the event. He wondered
if Poindexter had not simply placed the docu-
ment in the President's daily briefing book for
signature during the morning intelligence brief-
ing. (Regan 20, 41-42)
The Action Memorandum to the President to
which the Finding was attached differed in few,
but material respects from the memorandum
submitted January 6. Unlike the earlier memo-
randum, it noted that the President had already
discussed the matter with his principal advisors.
It also contained a test for success: if, after
1,000 TOWs were transferred to Iran, the hos-
tages were not released, the program would
terminate.41 The latter part of the memoran-
dum contained the material changes.
Some time ago Attorney General William
French Smith determined that under an
appropriate finding you could authorize
the CIA to sell arms to countries outside of
the provisions of the laws and reporting
requirements for foreign military sales.
41 According to the CIA Inspector General, the Secretary of
Defense, the Attorney General, the Director of Central Intelli-
gence, and Poindexter met and discussed delaying Congressional
notification. (CIA/IG Chronology 15) The Secretary of Defense
did not remember the meeting. (Weinberger 56) The Attorney
General recalled that Sporkin attended the January 16 meeting in
Poindexter's office. Discussion focused on the law regarding arms
exports and notice to Congress. (Meese 15-20)
Possibly in preparation for this meeting, the CIA General
Counsel's Office prepared the following talking points for the Di-
rector of Central Intelligence:
"The Israelis are moving ahead on their Tow for Hostage deal
with the Iranians. You recall that in Sporkin's legal analysis there
were two options: One for DoD to do it directly with the Israelis,
the other to do it through CIA. Sporkin feels that the most de-
fensible way to do it from a legal standpoint is through CIA. We
prefer keeping CIA out of the execution even though a Presiden-
tial Finding would ' authorize the way Defense would have to
handle the transactions.
"Under this option the idea was that the Israelis would buy the
improved version of the TOWs and ship the basic TOWs they
now have to the Israelis [sic]. The Israelis would then replace
those basic TOWs by buying the improved version. Unfortunate-
ly, there is not enough money available to do this. The Iranians
have placed $22 million in an account in Switzerland. This is
enough for the basic TOWs but for the Israelis to buy the im-
proved version would cost about $44 million.
"Therefore, they want to use the second option under which
CIA would buy 4,000 basic TOWs from DoD for $21 million. As
far as Defense is concerned these purchases would be purchased
in general for CIA uses for assistance in [country names deleted]
and other purposes. The money for the Iranian account would be
transferred to the Israelis. The Israelis would transfer that money
to a CIA account to pay for this purchase, provide the TOWs
from DoD, the shippers would move the TOWs to the Israelis
who would then move them on to the Iranians. The' Israelis
would keep their basic TOWs and the problem of upgrading
them to the new TOWs would be handled in the normal DoD
Israeli relationship.
"I am told that time is of the essence in getting this done for
two reasons: First, the situation in Lebanon is deteriorating so
that any dalay [sic] we can see in the prospects of getting the
hostages out of Lebanon should be avoided... .
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The objectives of the Israeli plan could be
met if the CIA, using an authorized agent
as necessary, purchased arms from the De-
partment of Defense under the Economy
Act and then transferred them to Iran di-
rectly after receiving appropriate payment
from Iran.
The Covert Action Finding attached at Tab
A provides the latitude for the transactions
indicated above to proceed. The Iranians
have indicated an immediate requirement
for 4,000 basic TOW weapons for use in
the launchers they already hold. The Israe-
li's [sic] are also sensitive to a strong U.S.
desire to free our Beirut hostages and have
insisted that the Iranians demonstrate both
influence and good intent by an early re-
lease of the five Americans. Both sides
have agreed that the hostages will be im-
mediately released upon commencement of
this action. Prime Minister Peres had his
emissary pointedly note that they well un-
derstand our position on not making con-
cessions to terrorists. They also point out,
however, that terrorist groups, movements,
and organizations are significantly easier to
influence through governments than they
are by direct approach. In that we have
been unable to exercise any suasion over
Hezballah during the course of nearly two
years of kidnappings, this approach
through the government of Iran may well
be our only way to achieve the release of
the Americans held in Beirut. It must again
be noted that since this dialogue with the
Iranians began in September, Reverend
Weir has been released and there have
been no Shia terrorist attacks against
American or Israeli persons, property, or
interests.
Therefore it is proposed that Israel make the
necessary arrangements for the sale of 4,000
TOW weapons to Iran. Sufficient funds to
cover the sale would be transferred to an agent
of the CIA.42 The CIA would then purchase
the weapons from the Department of Defense
and deliver the weapons to Iran through the
agent. If all of the hostages are not released
after the first shipment of 1,000 weapons, fur-
ther transfers would cease.
On the other hand, since hostage release is
in some respects a byproduct of a larger
effort to develop ties to potentially moder-
ate forces in Iran, you may wish to redirect
such transfers to other groups within the
government at a later time.
The Israelis have asked for our urgent re-
sponse to this proposal so that they can plan
accordingly. They note that conditions inside
both Iran and Lebanon are highly volatile. The
Israelis are cognizant that this entire operation
will be terminated if the Iranians abandon their
goal of moderating their government or allow
further acts of terrorism. You have discussed
the general outlines of the Israeli plan with
Secretaries Shultz and Weinberger, Attorney
General Meese and Director Casey. The Secre-
taries do not recommend you proceed with this
plan. Attorney General Meese and Director
Casey believe the short-term and long-term ob-
jectives of the plan warrant the policy risks in-
volved and recommend you approve the at-
tached Finding. Because of the extreme sensi-
tivity of this project, it is recommended that
you exercise your statutory prerogative to with-
hold notification of the Finding to the Congres-
sional oversight committees until such time that
you deem it to be appropriate.
At the bottom of this page appeared:
Recommendation
OK NO
"RR per JMP" That you sign the attached
Finding.
Prepared by:
Oliver L. North
Attachment
Tab A-Covert Action Finding "1000
17 Jan 86
President was briefed verbally from
this paper. VP, Don Regan and Don
Fortier were present.
JP?
The President made the point to the Board
that arms were not given to Iran but sold, and
that the purpose was to improve the stature
within Iran of particular elements seeking ties
to the Iranian military. The President distin-
guished between selling arms to someone be-
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lieved to be able to exert influence with respect
to the hostages and dealing directly with kid-
nappers. The President told the Board that
only the latter would "make it pay" to take hos-
tages.
The President told the Board that he had not
been advised at any time during this period
how the plan would be implemented. He said
he thought that Israeli government officials
would be involved. He assumed that the U.S.
side would be on its guard against people such
as Mr. McFarlane had met in London in early
December. He indicated that Director Casey
had not suggested to him at any time that the
CIA assume operational responsibility for the
initiative, nor was he advised of the downside
risks if the NSC staff ran the operation. He re-
calls understanding at the time that he had a
right to defer notice to Congress, and being
concerned that any leaks would result in the
death of those with whom the United States
sought to deal in Iran.
VI. The United States Sells Iran
1,000 TOW Missiles.
Before the President signed the Finding of
January 17, 1986, North began to lash together
the CIA and Department of Defense to imple-
ment the plan he had outlined to Poindexter in
December and incorporated in Poindexter's
memoranda to the President in January. Before
January 17, he encountered resistance. Poin-
dexter asked him to discuss the matter with the
Director of Central Intelligence. North did so
on January 14. He reported that
I[n] A[ccordance] W[ith] yr direction, met
w/Casey last night after W'bgr speech at
Ft. McNair. Casey then tried to contact
Cap but he had already departed. Casey
has called urging that you convene a mtg
w/ he and Cap ASAP so that we can move
on. Casey's view is that Cap will continue
to create roadblocks until he is told by you
that the President wants this to move
NOW and that Cap will have to make it
work. Casey points out that we have now
gone through three different methodolo-
gies in an effort to satisfy Cap's concerns
and that no matter what we do there is
always a new objection. As far as Casey is
concerned our earlier method of having
Copp deal directly with the DoD as a pur-
chasing agent was fine. He did not see any
particular problem w/ making Copp an
agent for the CIA in this endeavor but he
is concerned that Cap will find some new
objection unless he is told to proceed.
Colin Powell, who sat next to me during
Cap's speech asked the following questions
(my answers are indicated):
Q. Does Copp deal w/ Iranians or Is-
raelis?
Q. Is the intelligence a prerequisite?
A. It is probably something that can
be negotiated but in any event it is not
a DoD matter. It is covered in the
[January 6] finding and is in fact one
of the few means we have to make a
long term penetration in Iran. Our ul-
timate objective of changing/moderat-
ing the govt. is served by this.
Q. What cost are the Israelis willing to
pay for the basic TOWs?
A. They (thru Copp) have funds to pay
Fair Market Value (FMV should be
about $4900-5400 ea. depending on
age) and to cover the cost of transpor-
tation. They do not have enough to
pay for I TOW (about $9500 ea. or
TOW II (about $15000 ea.). We have
frequently sold the Israelis weaps/ma-
teriel at FMV vice the replacement
cost to the U.S. Since we have over
[quantity deleted] of the basic TOW in
our inventory and cannot even use it
in training due to its age, we ought to
look at this as an opportunity to col-
lect on a weapon which we aren't
using [location deleted] according to
Koch) and will eventually have to dis-
pose of because we cannot sell them
off otherwise. (I'm told that Hughes
Acft, the mfgr. has an agreement w/
DoD that all normal FMS transactions
will be handled as a producer sale in
order to keep DoD fm undercutting
the production line by selling off old
stocks).
The most recent proposal (Copp as agent
for the CIA and sales to the Israelis who
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then deliver weaps to the Iranians) can
only work if we can get the Israelis to
come up on their price. I have been unable
to contact NIR who is in Europe for a
meeting w/ an Iranian. He still does not
know that we are aware that the Iranians
have offered $10K per TOW. He has how-
ever left a message that we must have a
go/no go decision today and that condi-
tions in Brt. [Beirut] continue to deterio-
rate. You shd also have seen yesterday's
[intelligence report] which pertains.
(North PROF note to Poindexter. 1/15/86,
12:04:22; 13:01:06)
While coordinating with the Defense Depart-
ment and the Director of Central Intelligence,
North also spoke to Nir about the Israeli-Ghor-
banifar side of the transaction. Nir, who had
just spent thirty-six hours in Lebanon, "be-
lieves that Gorba does indeed have at least
$10,000 per Tow [sic] available," North report-
ed to Poindexter on January 15, "and that
Gorba probably lied to Schwimmer and that
Schwimmer probably lied to Nir re how much
there was available. Nir is fully prepared to
proceed any way we wish but noted that time is
rapidly running out." (North PROF note to
Poindexter, 1/15/86, 15:41:44)
Nir explained his sense of urgency later that
day.
[H]e believes the GOI [Government of
Israel] is about to formally withdraw its
offer to assist on this matter so that it
cannot be blamed when the AMCITS are
killed. I asked him about [t]he rumor that
one had already been killed. He replied
that it was probably another of the Jews
since they (Hezballah) will undoubtedly kill
the Jews first to make their point.
I then asked Nir to reconfirm, the require-
ments as he understood them. He said that
the Iranians want 1000 TOWs, 25 Mos-
lems released by Lahad and the AMCITs
and any surviving jews [sic] wd be released
along w/ the Brit if they (the IRG) [Iranian
Revolutionary Guard] can still find him. .
The Israelis are very very concerned that
they cannot make a delivery of 1000
TOWs w/o a promise to replenish. Nir
points out that he is operating in an envi-
ronment which is very hostile since the
USG never made good on its promise to
promptly replenish the original 504 [sic]
TOWs that they shipped in September and
that if we had but sent these TOWs as
promised it might have been possible to
take the further risk of another 1000.
IAW instructions have invited Sec W'bgr
to mtg w/ Casey in yr ofc at 1700 on
Thursday. It is my sense that by that time
we will have a msg fm the GOI that they
are withdrawing their offer. Is it possible
to arrange a telephone conference call to-
night to see if we can make this work?
(North PROF note to Poindexter, 1/15/86,
18:37:47)
To clear up the confusion about what the
United States had or had not promised Israel,
on January 14, Poindexter asked North to
speak to McFarlane.
As I [North] understand it, there was a
USG commitment to SELL, over time, re-
placements to the Israelis for what they
sent for Weir. We DO, according to RCM
[McFarlane] have a commitment to make
this SALE. We did NOT have any agree-
ment on prices or ultimate dates, though it
was understood by both sides that the
transaction wd be concluded promptly.
(North PROF note to Poindexter, 1/15/86,
13:39:54 (reply to note of 1/15/86) Also on in-
structions from Poindexter, North spoke again
to Nir about how implementation was supposed
to proceed, and how it, in fact, proceeded.
Problems abounded.
As I understand the current problem w/
the purchase of the 504 [sic: 508]:
-The Israelis received funds adequate
to purchase only the basic TOW.
Whether this is because Schwimmer
pocketed the rest or whether there was
a kick-back to [Iranian officials in
Tehran],, neither Nir nor I know.
Gorba told me that he had paid
$10000 apiece for these weaps and
pocketed $500 for each one delivered.
-When the Israeli purchasing office
in NYC, following their normal proce-
dures, made inquiries w/ the Army
Materiel Command (AMC) on the
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availability and price of basic TOWs,
the AMC immediately began to ques-
tion why the IDF wanted to revert to
the basic model which was no longer
in production and the IDF has already
begun purchases of the I TOW for
their inventory upgrade. AMC noted
that there was an "understanding"
with the Mfgr not to compete w/ the
production line by selling the older
weaps fm army stocks and that selling
fm Army stocks wd be the only source
available for the basic TOW. At this
point, the purchasing office terminated
the inquiry since they believed that the
purchase wd raise so many questions
that it wd leak and complicate further
action which, by then, was in the plan-
ning stages. The Israelis have made no
further effort to purchase the basic
TOWs but have been told in an unso-
licited call from AMC that the basic
model wd have to be the same price as
the I TOW so that the AMC can re-
cover replacement costs.
-Nir continues to be apprehensive
about going back in to ask his people
to ship w/o some kind of guarantee of
replenishment whether or not it suc-
ceeds in getting the hostages out. He
is going to get back to me at 0300
EST re results of his meeting w/ the
P.M. I passed yr msg verbatim to in-
clude "cool yr plans on going into the
Bekka." He laughed and noted that
the IDF would have even greater im-
petus to go into the Bekka if the hos-
tages were killed rather than released,
thus there are some who have argued
against proceeding on this tack any
further since it jeopardizes Israel w/
no promise of return.
(Id.) In light of these arrangements and obsta-
cles, North proposed simplifying the mechanics
by reducing the number of participants.
At this point I believe that we could pro-
ceed along the following lines. Nir goes di-
rectly to Gorba (cutting out Schwimmer
[and the Tehran contacts] and gets $10M
for 1000 basic TOWs. He then sends 1000
basic TOWs fm Israeli stocks to Iran. ho-
pefull [sic] the hostages are then released.
He gives Secord whatever the FMV price is
for 504 TOWs from the $10M (should be
about $2.8M). Secord then buys and ships
504 Tows to Israel as replacement for the
first exchange (Weir). This process wd at
least provide the IDF w/ one third of what
they had withdrawn from inventory. It is
important to note that in my last discus-
sion with Nir (he doesn't sleep either) he is
very concerned about credibility all
around. He noted that before they shipped
the first 504, they had what they believed
to be an ironclad promise to allow them to
buy replacements but that all along the
way there have been obstacles. He has con-
fided that part of the pressure is indeed
political in that he is concerned about a
leak inside the cabinet from someone who
is disaffected over the drawdown of stocks,
but if we wanted him to push for it he
would. I believe that Nir himself is both so
exhausted and in such jeopardy of losing
his job over this that he may no longer be
functional. I do not believe that Nir is lying
to us. I do believe he is sincerely con-
cerned about the outcome and wants to do
what he can-for both Israel and the U.S.
He has promptly agreed to every proposal
we have made to date except the final one
of shipping 1000 TOWs w/o promise of
replenishment. He will be back to us. Will
advise.
(Id.)
The Americans pushed for a meeting with an
important Iranian official. McFarlane asked
Poindexter to have North find out from Nir
when the meeting could take place. Kimche had
told Ledeen that January 24 would be conven-
ient. (McFarlane PROF note to Poindexter, 1/
14/86, 08:08; Poindexter PROF note to North,
1/14/86, 09:27:35) Two days later, North re-
ported that
Nir has advised that the 24th still appears
good IF we are proceeding w/ the first
step of the long range plan to change, the
govt-ending the hostage problem and
getting rid of the 18 HAWK missiles still
parked in Tehran. He believes that if the
first step is scrubbed that the mtg will be
too. He will get back to us on Tuesday
next week [January 23] re location and go/
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no-go decision if we make an affirmative
decision on the first steps re the hostages.
(North PROF note to Poindexter, 1/16/86,
13:39:54)
At the same time, the Director of Central In-
telligence, Poindexter, and North expressed
concern about Ledeen's role.
Have told this to Ami [?Nir]. You [Poin-
dexter] should be aware, however, that it is
my opinion, based on my meeting w/
Gorba on Monday night [January 13], that
Gorba tells Ledeen everything. Ami sus-
pects that there is probably a secret busi-
ness arrangement among Schwimmer,
Ledeen and Gorba that is being conducted
w/o the knowledge of any of the three re-
spective governments and that this will
result in at least some cross-fertilization of
information. This may not be altogether
bad if we can keep in touch w/ Ledeen
enough to get a feel for what is really
going on. I have no problem w/ someone
making an honest profit on honest busi-
ness. I do have a problem if it means the
compromise of sensitive political or oper-
ational details. We might consider making
Mike a contract employee of the CIA and
requiring him to take a periodic polygraph.
Yes? No?
(North PROF note to Poindexter, 1/16/86,
13:50:49) Further,
Casey shares our concerns. More-recent in-
formation tends to indicate that there is
even further grounds for concern given
what may well be/have been a financial ar-
rangement among Schwimmer, Nimrod[i],
Gorba and our friend.
(North PROF note to Poindexter, 1/24/86,
10:40:36) Perhaps because of these doubts,
Ledeen ceased to be an official American con-
tact with Ghorbanifar.
A. Launching `Operation
Recovery"
The day after the President signed the Find-
ing, the CIA formally joined the program. Clair
George, Director of Operations, Sporkin, and
Chief of the Near East Division (C/NE), met
Poindexter, North, and Secord and read the
Finding. (C/NE (1) 4; George 9) C/NE and
North then discussed logistics and financing.
"At the meeting on that Saturday [January
18]," C/NE recalled, "it was clear that what
was needed was 4,508 TOW missiles, which
were to be sold to the Iranians as a portion of
a larger strategic effort which would get all the
American hostages back out, but would also
move to changing the nature of the relation-
ship with the U.S. and the Iranians." (C/NE (1)
4) C/NE thought the program had been "an
NSC operation" since November; nothing that
subsequently happened changed his mind. (Id.
at 43, 44)
North instructed C/NE to contact General
Powell about arranging for the CIA to purchase
the missiles from the Defense Department; C/
NE found Powell already working on the prob-
lem. Powell directed C/NE to consult Major
General Russo, Assistant Deputy Chief of Staff
for [Army] Logistics, about pricing. When in-
formed that the TOWs would cost some $6,000
each, North told C/NE that old TOWs, useless
to the American Army and in less than optimal
condition, would suffice. These cost about
$3,407 a piece. (Id. at 4-6) The Defense De-
partment insisted on being paid value for the
missiles; the CIA insisted that its treasury not
provide a float; and the Iranians would pay
only on delivery. North needed a Swiss bank
account to hold the money. C/NE provided an
already existing account as the quickest solu-
tion to North's problem. Setting up a new ac-
count for the sums in question would take
time. (Id. at 6)
The structure made Ghorbanifar important
to success; he raised the necessary "venture
capital." (Id. at 7) As a result of the polygraph,
George decided not to use Ghorbanifar for in-
telligence or covert actions and, moreover, to
terminate CIA relations with Ledeen. (CIA/IG
Chronology 14 (1/12 or 13/86)) The Director
of Central Intelligence took a more flexible po-
sition, and C/NE followed his lead.
The Director's position when this started
up, late January-early February, was Ghor-
banifar is a rascal. They had a lot of expe-
rience with this guy. He's unreliable. But
the channel, there's something in this
channel that's working and it's worth a try,
and nothing else is working, so let's see
where it goes.
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And if it doesn't go, we'll turn it off.
(C/NE (1) 23-24)
Deputy Director John McMahon, who had
opposed arms transfers to Iran from the begin-
ning, read the January 17 Finding on January
24. "[G]iving TOW missiles was one thing," he
remembered telling Poindexter. "[G]iving them
intelligence gave them a definite offensive
edge, and I said that can have cataclysmic re-
sults." U. McMahon 14) He was unimpressed
with Poindexter's description of the plan:
[G]ive some intelligence to the Iranians on
the Iraqi front, . . . to establish bona fides
that the U.S. really was intent on moving
in this direction, and then give them 1,000
TOW missiles and then see what the Irani-
ans did, like release a hostage.
I objected to that. Poindexter didn't take
me on. He didn't challenge that at all, but
he said: We have an opportunity here that
we should not miss, and we ought to pro-
ceed to explore it; and if it doesn't work,
all we've lost is a little intelligence and
1,000 TOW missiles; and if it does work,
then maybe we can change a lot of things
in the Mideast.
So I came back to the building. Bill Casey
was [abroad] at the time. I sent him a cable
laying out what was happening, saying we
have a directive from the President, a find-
ing to do this, Poindexter said that the At-
torney General had checked off on it, and
that we were so directed to proceed to
support the mission.
And I said, I am so proceeding. I asked for
confirmation from Bill to make sure that
he was aware of what was happening, and I
didn't receive any. Casey had moved on to
[country name deleted], so I sent it again
to [country name deleted]. And it came
back saying: Yes, he has read it and con-
firmed, and he had seen it.
Then we proceeded to have DoD transfer
weapons to us, and we would arrange for
the flights over there. All throughout this,
I must insist that even at its peak the
Agency was only in a supportive role. We
took directions, we followed directions.
(Id. at 14-16) On January 26, McMahon per-
suaded North to provide the Iranians only a
segment of the Iraqi front. It would show
American good faith without giving the Irani-
ans a fighting edge. (Id. at 16-17)
According to the CIA Inspector General,
North met Ghorbanifar in London before Janu-
ary 24. Among other things, they may have
agreed that the United States would provide
Ghorbanifar with some intelligence about the
Iraqi front. (CIA/IG Chronology 17) Charles
Allen transmitted the "limited" intelligence in
London on the 26th; Ghorbanifar gave him in-
formation about Iranian terrorism in exchange.
(C. Allen 13) 43
When North returned from a late January
meeting with Ghorbanifar in London, he pre-
pared "a notional timeline for major events in
Operation Recovery." (North to Poindexter,
draft Action Memorandum, 1/24/86.) 44
"[T]he only persons completely cognizant of
this schedule," North wrote, "are: John Poin-
dexter, Don Fortier, Oliver North, John McMa-
hon, Clair George, C/NE, Dewey Clarridge,
Richard Secord, Amiram Nir, Prime Minister
Shimon Peres." (Id.) The timeline was attached:
Notional Timeline for Operation Recovery
Friday, January 24
-CIA provide cube and weight data
to Copp for a/c loading.
-CIA prepare intel sample for pass to
Gorba.
-Copp provide a/c tail # to CIA for
pickup. . . .
Saturday, January 25
-Dispatch intel sample to Gorba via
Charlie Allen.
Sunday, January 26
-C. Allen deliver intel sample to
Gorba at Churchill Hotel, London.
43 The CIA Inspector General dated this meeting January 25.
(CIA/IG Chronology 18)
44 North's draft recommended that Poindexter privately discuss
the subject with the President. There is no evidence that the
Memorandum was put into final form. It bears the caption
"PLEASE DESTROY AFTER READING".
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-Copp finalize a/c requirements w/
air carrier in Oklahoma.
Monday, January 27
-Gorba place intel sample on 1300
GMT flight to Tehran fm Frankfurt,
Germany.
Wednesday, January 29
-Gorba transfer funds for purchase/
transport of 1000 basic TOWs to Is-
raeli account at Credit Suisse Bank,
Geneva.
-Israeli account manager automatical-
ly transfers deposit fm Israeli account
to Copp account in same bank (bank
record keeping transaction).
-Copp's account manager automati-
cally transfers $6M to CIA account in
same bank (bank record keeping trans-
action).
Thursday, January 30
-CIA transfers $6M to DoD account
by wire service transaction.
-CIA orders movement of 1000
TOW missiles fm DoD storage facility
Anniston, Alabama ...
-CIA bills Copp account $26K for
cost of moving 1000 TOW missiles fm
Anniston, Alabama ...
Sunday, February 2
-Copp travels to Israel for site survey
of transfer point (Eliat [sic], Israel).
-Copp proceeds to rendezvous w/
Clarridge to establish command post.
Monday, February 3
-Lahad responds to papal ltr that he
will release 50 Hezballah prisoners in
2 groups of 25.
Tuesday, February 4
-1000 TOWs sanitized and prepared
for shipping....
-Copp a/c packers arrive ... and ar-
range for Copp a/c to lift TOWs fm
Kelly AF Base, San Antonio, TX, on
CIA contract.
Wednesday, February 5
-Copp a/c arrives Kelly AF Base for
loading.
-CIA provides remainder of first intel
sample to Gorba at Iranian Embassy in
Bonn, Germany.
Thursday, February 6
-Copp a/c commence lifting TOWs
fm Kelly AF Base to transfer point at
Eliat, Israel.
-Israeli AF "sterilized" 707 a/c ar-
rives at transfer point for loading.
-Copp aircrew arrives Eliat, Israel, to
pilot Israeli a/c.
- Remainder of first intel sample
flown fm Germany to Tehran in diplo-
matic pouch on scheduled Iran Air-
ways flight.
Friday, February 7
-Israeli "sterile" a/c piloted by Copp
crew commences movement of TOWs
fm Eliat to Bandar Abbas, Iran, via
Red Sea route.
Saturday, February 8
-Delivery of 1000 TOWs completed.
-25 Hezballah released by Lahad.
-Returning Israeli a/c pickup 18
HAWK at Tehran airport for return to
Israel.
Sunday, February 9
-All U.S. hostages released to U.S./
British or Swiss Embassy.
-Second group of 25 Hezballah re-
leased by Lahad.
-Israelis return $5.4M to Gorba when
HAWKs land in Israel.
Monday, February 10
-Gorba transfers funds to Israel ac-
count for purchase/transportation of
3000 TOWs (amount transferred is
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sufficient to cover purchase of 508 ad-
ditional TOWs owed to Israel for Weir
release and all transportation costs).
-Israelis transfer funds to Copp ac-
count at Credit Suisse Bank, Geneva.
-Copp transfers funds to CIA ac-
count for purchase/transportation of
3508 TOWs ($21.048M).
-Four (4) remaining Lebanese Jews
released by Hezballah.
Tuesday, February 11 (Anniversary of
Iranian-Islamic Revolution)
-Khomheini steps down.
-CIA transfers $21.048M to DoD ac-
count for purchase of 3508 TOWs at
$6K each.
-CIA starts moving TOWs . . . fm
Anniston, Alabama, in lots of 1000.
Thursday, February 13
-Copp packers return ...
Tuesday, February 18
-Copp a/c pickup 1000 TOWs at
Kelly AF Base, Texas; deliver to trans-
fer point (Eliat).
-Israeli "sterilized" 707 a/c w/Copp
crew commences delivery of 1000
TOWs to Iran.
Thursday, February 20
-Copp a/c pickup 1000 TOWs at
Kelly AF Base, Texas; deliver to trans-
fer point (Eliat).
-Israeli "sterilized" 707 a/c w/Copp
crew commences delivery of 1000
TOWs to Iran.
Saturday, February 22
-Copp a/c pickup 1000 TOWs at
Kelly AF Base, Texas; deliver to trans-
fer point (Eliat).
-Israeli "sterilized" 707 a/c w/Copp
crew commences delivery of 1000
TOWs to Iran.
Monday, February 24
-Copp a/c returns . . . pickup 508
TOWs for delivery to Israel.
-Collett (British hostage) and Italian
hostages released and Buckley remains
returned.
Tuesday, February 25
-Second sample of intel provided to
Gorba at Iranian Embassy in Bonn,
Germany. . . .
By early February, CIA had put in motion
the acquisition of the weapons, designated a
Swiss bank account, and arranged for two
Boeing 707s to be at the disposal of General
Secord at Kelly Air Force Base. (CIA/IG Chro-
nology 18)
B. Forward
On February 5, North traveled to London.
(North calendar) According to the NSC chro-
nologies, he met Ghorbanifar, Nir, and Ghor-
banifar's Tehran contact.45
Ghorbanifar told the Board
Let's say this meeting is somewhere
around between first of February till fifth
of February. It took place in Frankfurt .. .
The Iranian delegation stayed also in
45 According to the Maximum Version and the Historical
Chronology, C/NE attended this meeting. (Maximum Version at
5, Historical Chronology at 9) The CIA Inspector General notes
that a meeting occurred, but does not mention C/NE. (CIA/IG
Chronology 18) C/NE denied that there was a meeting with the
Tehran contact on February 15. (C/NE (1) 14) The Maximum
Version states that the meeting was in Germany; the Historical
Chronology places the meeting in London. The accounts of what
was discussed are similar:
--The Iranian intermediary (Ghorbanifar) would deposit
funds in an Israeli account.
-The Israelis would transfer funds to a sterile U.S.-con-
trolled account in an overseas bank.
-Using these funds, the CIA would covertly obtain materiel
authorized for transfer from U.S. military stocks and trans-
port this to Israel for onward movement to Iran.
Using the procedures stipulated above, funds were deposited
in the CIA account in Geneva on February 11, 1986 and on
February 14 1,000 TOWs were transported to Israel for pre-
positioning. The TOWs were off-loaded and placed in a
covert Israeli facility. (Maximum Version 6. Cf. Historical
Chronology 9)
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Hotel Intercontinental, in Frankfurt-a
mixture of Iranian authorities, from Prime
Minister's [office] and Iranian officers from
intelligence department.
This is a historical meeting, after seven
years of break, that the two top officials of
the two countries, they come together for
such an important meeting, such an impor-
tant mission, to work out against the intel-
ligence against the Russians, against the
Iraqis, and also to clean the mess [the No-
vember 1985 shipment of HAWKs].
(Ghorbanifar 131-32) On the American side,
Ghorbanifar said, were North, Secord, and
someone identified to Ghorbanifar as "one of
the top senior officers from the CIA. His hair
was all white, white hair, good looking-baby
face.46 . . . No[t] Cave. Cave came later on for
making the total disaster." (Id. at 134) Nir, who
was always identified as an American in meet-
ings with Iranian officials, (id. at 135-36), also
attended. Ghorbanifar described a "happy"
scene, with Americans kissing Iranians. (Id. at
136) The military men talked, and
Mr. North told him [Ghorbanifar's Tehran
contact] that if you want to know that we
were good feeling, good gesture, we were
not going to cheat you now. We take out
what we brought back in mistake [the 18
HAWKs] and we give you 1,000 TOWs.
And then the Iranian kissed them and they
made again dinner party.
(Id. at 137) The next day, Khashoggi lent
Ghorbanifar $10 million to pay for the missiles;
Khashoggi insisted on a 15-207o return to pay
finance costs. On February 7, Ghorbanifar said,
he [Khashoggi] deposited the money in Lake
Resources' Swiss account. North "told us that
this time no Israeli deal. Off. This is ourself we
directly will dealing." (Id. at 138)
The money was paid to Lake Resources di-
rectly, and then they delivered the stuff.
There was no talk of release of hostage.
There was no hostage. So it is proof to you
that there is no deal on hostage. There is
no deal for hostage, tit for tat - give me,
take this. You understand clearly it was a
policy. It was a very big policy, very impor-
tant strategic policy to go into water. No
question about who is going.
(Id. at 142)
Whether or not this meeting took place as
described by Ghorbanifar-his description does
not resemble C/NE's of the Frankfurt meeting,
February 24-25 (C/NE (1) 18-20)-North re-
turned from London on February 7, (North cal-
endar), with the operation in full swing. The
next day or the day after, he met Charles Allen,
C/NE, Noel Koch from the office of Assistant
Secretary of Defense Armitage, and Secord to
review the schedule. TOW missiles would be
delivered, hostages released, and Buckley's
body returned by early March 1986. (C. Allen
14) At North's request, C/NE made flight ar-
rangements for Southern Air Transport, a
former CIA proprietary, to fly into Kelly Air
Force base. (CIA/IG Chronology 19)
The United States Army made a record of its
role in the TOW transfer because of Congres-
sional reporting requirements. Under the Intel-
ligence Authorization Act for Fiscal Year 1986,
transfers of defense articles or services by an
intelligence agency worth $1 million had to be
reported to Congressional intelligence commit-
tees. Once apprised of this statute, the Army
General Counsel advised Russo that where the
Army "support[s] another agency, it is respon-
sible to make the necessary notification."
(Russo, note, 2/13/86, on Crawford to Marsh,
2/13/86) "During the course of coordination
with OSD (M[ajor] G[eneral] Powell) and
O[ffice of the] S[ecretary of the] A[rmy]
G[eneral] C[ounsel], questions were asked as
to the responsibility for end item usage. This
was identified as a responsibility of the receiv-
er." (Russo, "Support for Intelligence Activi-
ties," 2/25/86.) The "receiver" was Southern
Air Transport, operating under the direction of
General Secord and Colonel North.
The Army's involvement began on January
18 when it received a request to deliver 3,504
(later increased to 4,509) TOW missiles to "the
receiver" at Redstone Airfield, for an unknown
purpose and destination. Transfer depended
on receipt of funds by the receiving agency. It
was delayed. On February 10 and 11, a total of
$3.7 million was deposited (by Ghorbanifar) in
the CIA account used to pay for 1,000 TOW
missiles. (CIA/IG Chronology 19) Having re-
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ceived certification that the money was avail-
able, the Army delivered the first 1,000 missiles
on February 13-14.
North's and Secord's reports complete the
story of the delivery. North's notional timeline
had to change. On February 13, 1986, North
wrote Poindexter that
Operation RESCUE is now under way.
1000 items are currently enroute [sic] . . .
from Anniston[,] Alabama. Copp is en-
route to Ben Gurion Apt [airport] to con-
duct final briefing for his flight crews who
arrived today and commenced fam flights
on the two Israeli 707s. All 1000 items will
lift off from Kelly AFB at 1400 on Satur-
day. 500 will be delivered to Bandar Abbas
to arrive at dawn on Monday [February
17]. The meeting we had wanted has now
been slipped to Weds [February 19] by
Gorba. We will explore a second mtg/
agenda/location/participants w/ him at this
mtg per yr dir. Second 500 will go to
Bandar Abbas on Friday vice Thurs. Copp,
North plan to meet in Frankfurt on Tues.
[February 18] along w/ one of Dewey's
people to wire my hotel room for mtg.
Carrying the luggage C/NE gave me for
this purpose is too much of a hassle going
thru customs/airport security in Europe.47
If all goes according to plan, Lahad will re-
lease 25 Hizballah . . ., hopefully on
Friday. This wd keep our schedule for re-
leasing the Americans on for Sunday, Feb.
23. Something to pray for at church that
day.48
(North PROF note to Poindexter, 2/13/86,
21:39:47)
On February 18, 1986, North asked Poin-
dexter to authorize the issuance of alias docu-
mentation for the delegation that would travel
to Germany to meet Ghorbanifar and his
Tehran contact on the 19th. (C/NE (1) 14) His
47 Possibly a reference to video and recording devices request-
ed by C/NE on January 21. (CIA/IG Chronology 16)
48The Secretary of State recalled that "[o]n January 22, my
staff noted reports received about Lieutenant Colonel North.
They speculated that perhaps the operation was alive again. But
the reports seemed implausible, namely a proposal by Lieutenant
Colonel North to seek the help of the Pope and Cardinal O'Con-
nor, and to trade some Shia prisoners held by General Lahad in
South Lebanon as Nir had earlier suggested.
"I heard nothing more until February 28, 1986." (Shultz, SRB,
50-51)
memorandum reproduced Secord's February
18 report of the first delivery of 500 TOWs.
Aircraft returned safely to Ben Gurion this
morning at 0730 EST. Seventeen HAWK
missiles 49 aboard. Gorba called one hour
ago. [Ghorbanifar's Tehran contact]
will head Iranian side of meeting in Ger-
many along with five others. Iranians will
provide all names after we give names and
titles to them through Gorba. All will
arrive via private plane in Frankfurt,
Thursday [February 19] p.m. Meeting to
start at 1700 in Iranian Embassy (sic) for
two hours. Iranians have asked for second
delivery of 500 TOWS on Friday a.m. They
say they will release all hostages, if, repeat,
if [intelligence is good]. They say we will
get hostages Friday or Saturday. They en-
vision a future meeting in Iran with us to
consider next steps while we are delivering
balance of TOWs (3,000). We have already
rejected embassy as meeting site. Suggest-
ed following names from our side:
Nir (Office of Israeli Prime Minister)
MGEN Adams (Director, Current Intelli-
gence-DIA) (AKA-Secord)
William Goode (Office of President)
Albert Hakim (Support Assistant to Direc-
tor DIA)
(Secord to North, 2/18/86, [?received at] 8:30
a.m., in North to Poindexter, 2/18/86) North
identified Hakim for Poindexter as "VP of one
of the European companies set up to handle
aid to resistance movement. He is fluent in
farsi [sic] and would need one time alias docu-
mentation as a DIA official." (Id.) 60 Secord,
49 Ghorbanifar told the Board that one of the 18 HAWK mis-
siles had been test-fired against an Iraqi fighter over Kharg
Island. (Ghorbanifar 143)
80 In discussing what he insisted was a meeting in Frankfurt in
the first week of February, but which he may have confused with
the meeting February 20, Ghorbanifar told the Board that when
he heard that Hakim was to attend the meeting, he successfully
persuaded the Americans to change the delegation.
I said are you crazy? The Albert Hakim is known to all Iranian
intelligence agencies and Iranian authorities, that he works, is
operating for CIA. He was acting against Islamic Republic by
CIA in 1980 and 1981, in Turkey, in the form of companies
performing for making trouble for them in the Turkish border,
and so on. They know him. If he comes in, they call this again
another trick. So, I don't accept that such a man comes. They
call me back in two days and say you are right.
(Ghorbanifar 133)
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using the alias Major General Adams, also
needed documents-"[t]o date, CIA has re-
fused to provide him with any alias documenta-
tion."
North wrote, "we appear to be much closer
to a solution than earlier believed. [The attend-
ance by an official from the Prime Minister's
office] at the Frankfurt meeting tends to sup-
port our hope that this whole endeavor can
succeed this week, if we appear to be forthcom-
ing." (Id.)
On February 20, North, Nir, C/NE, and
Secord met Ghorbanifar in Frankfurt. (North
calendar) They expected the official from the
Prime Minister's office, but he did not appear.
C/NE remembered that: "we told Ghorbanifar
to let us know when his Iranian friend came,
that we were going home, and that we wouldn't
be back until we had a confirmation that the
Iranian had come off from Tehran and was
waiting." That happened within a week. (C/NE
(1) 13) 51
(CIA/IG Chronology 19) On February 20, a
deposit of $7.85 million was made to an Irani-
51 C/NE remembered who attended and that the meeting took
place February 19. (C/NE (1) 14) According to the Maximum
Version, the meeting occurred February 19-2 1.
U.S. and Iranian officials (NSC and CIA) met again in Germa-
ny to discuss problems in arranging a meeting among
higher-level officials. At this meeting, the U.S. side agreed to
provide 1,000 TOWs to Iran as a clear signal of U.S. sinceri-
ty. This delivery was commenced on the morning of Febru-
ary 20 and completed in two transits to Tehran on February
21. (Maximum Version 6)
The Historical Chronology states:
On February 19-21, U.S. (NSC and CIA), Israel; and Iranian
officials met in Germany to discuss problems in arranging a
meeting among higher-level officials. After coded authoriza-
tion was received from Washington, the U.S. side agreed to
provide 1,000 TOWs to Iran as a clear signal of U.S. sinceri-
ty. This delivery was commenced on the morning of Febru-
ary 20 and completed in two transits to Tehran on February
21. Transportation from Israel to Iran was aboard a false
flag Israeli aircraft. On the return flight from Iran, these air-
craft carried the 18 HAWK [sic] missiles which Israel had
sent to Tehran in November 1985 with USG aforeknow-
ledge. [sic] (Historical Chronology 10)
The CIA Inspector General's chronology states:
19 February 1986: C/NE, North, Secord, and Nir meet with
Ghorbanifar in Frankfurt. Iranian officials are expected, but
do not show.
20 or 21 February 1986: The delivery of 1,000 TOWs from
Israel to Iran begins, using a false flag aircraft. (The back-
load on the return flight from Tehran was the HAWK mis-
siles which had been shipped in November 1985. The Irani-
ans returned them because they were outdated models. The
delivery is completed 27 February.)
(CIA/IG Chronology 19)
an account at Credit Swisse in connection with
the delivery of the TOWs.
On February 24, North went to Frankfurt to
meet the official from the Iranian Prime Minis-
ter's office. He returned through London. In
Frankfurt, he, Secord, Hakim, Nir, Ghorbanifar,
and Iranian officials held the meeting the
Americans thought was going to occur the
20th. North returned to Washington on Febru-
ary 26 and reported on the meeting the next
day to the Director of Central Intelligence,
Poindexter, and McFarlane. He wrote McFar-
lane:
Just returned last night from mtg w/ [offi-
cial from the Iranian Prime Minister's
office] in Frankfurt. If nothing else the
meeting serves to emphasize the need for
direct contact with these people rather
than continue the process by which we
deal through intermediaries like Gorbani-
fahr [sic]. Because CIA wd not provide a
translator for the sessions, we used Albert
Hakim, an AMCIT.who runs the European
operation for our Nicaraguan support ac-
tivity. [C/NE] accompanied so that I wd
have someone along who wd provide "ob-
jective" account.
Throughout the session, Gorbanifahr in-
tentionally distorted much of the transla-
tion and had to be corrected by our man
on occasions so numerous that [the Iranian
official] finally had Albert translate both
ways. Assessment of mtg & agreement we
reached as follows: -[the Iranian official]
has authority to make his own decisions on
matters of great import. -He does not
have to check back w/ Tehran on decisions
take [sic]. -The govt. of Iran is terrified of
a new Soviet threat. -They are seeking a
rapprochement but are filled w/ fear &
mistrust. -All hostages will be released
during rpt during the next meeting. -They
want next mtg urgently and have sug-
gested Qeshm Is. [sic] off Bandar Abbas.
-They are less interested in Iran/Iraq war
than we originally believed. -They want
technical advice. more than arms or intelli- .
gence. -Tech advice slid be on commer-
cial & military maintenance [sic]-not mil
tactics-they committed to end anti-U.S.
terrorism. -They noted the problems of
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working thru intermediaries & prefer dir.
contact-noted that this was first USG/
GOI contact in more than 5 yrs. [sic] Vy
important-recognizes risks to both sides-
noted need for secrecy. -stressed that
there were new Sov. moves/threats that we
were unaware of[.] While all of this could
be so much smoke, I believe that we may
well be on the verge of a major break-
through-not only on the hostages/terror-
ism but on the relationship as a whole. We
need only to go to this meeting which has
no agenda other than to listen to each
other to release the hostages and start the
process. Have briefed both JMP and
Casey-neither very enthusiastic despite
[C/NE]/North summary along lines above.
Believe you shd be chartered to go early
next wf [sic]-or maybe this weekend-but
don't know how to make this happen. Have
not told JMP that this note is being sent.
Help. Pls call on secure yr earliest conven-
ience. Warm, but fatigued regards, North.
(North PROF note to McFarlane, 2/27/86,
8:54:13)
C/NE recalled:
This is the second meeting. This is the first
meeting with [the official from the Prime
Minister's office], the second February
meeting. This is the first time we've had
somebody like this out. It should be a very
interesting experience. This is a man who
. . . is on the low end of the scale in intel-
ligence for [his former profession], and
he's an even dumber member of the Irani-
an Prime Minister's office, but he's full of a
little fear and a little trepidation and a lot
of distrust of the U.S., for we truly are the
great Satan in his eyes.
But he has been promised hundreds of
Phoenix missiles, howitzers, TOWs; just
about anything else he wants, he's going to
get in this channel. He's promised that by
Ghorbanifar in order to get him to this
meeting. And we are promised that all the
hostages will come out after the first two
transactions, and that we are going to have
a meeting with Rafsanjani and President
Khameini within the first two months of
this procedure, and one of the things in
the scenario was that sometime in April
there was a precise date given that Kho-
meini was going to step down and that he
was going to resign all powers.
This is extraordinary nonsense. Essentially
Ghorbanifar, as a negotiating technique,
lied to both sides to get them to the table,
and then sat back and watched us fight it
out. It was a real slugging match. It was
awful.
At the end of the first meeting, which was
at 3:00 a.m. on the 25th, we agreed to
nothing except that we would have another
meeting the next day.
The next day's meeting was an agreement
that we would proceed immediately to ship
in 1,000 TOWs as a sign of our good faith
and that [the Iranian official] would imme-
diately arrange for one or two hostages to
be released as a sign of their good faith.
We left the meeting; nothing happened.
No hostages.
The communications were still going
through Ghorbanifar. We had several hints
at this meeting with [the Iranian official]
that he wasn't happy with Ghorbanifar.
Ghorbanifar was clearly very concerned
that this Farsi speaker, Hakim, would in
some way arrange to cut him out and have
direct contacts with [the Iranian official].
There was enormous distrust all the way
around. Nir was insistent that we keep
Ghorbanifar in it. They had a relationship
that went back with him prior to the revo-
lution. So they know him well, and they
recognize his limitations. They recognize
that he's a congenital liar, but they know
how to deal with it and they know how to
use him.
(C/NE (1) 18-20)
On February 26 and 27 1986, the official
from the Prime Minister's office remained in
Frankfurt to coordinate the shipment to Bandar
Abbas with his colleagues in Tehran.
The morning of February 27, North heard
from Secord. The second 500 of the 1,000
TOWs had been delivered to Iran.
707 has signaled success and due to land
at Ben Gurion in a few minutes.
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Met with Nir and Gorba this a.m. for one
hour. Nir continues to agonize over the
two soldiers, while Gorba worries about
money matters and how he can stay in the
center as the indispensible man. Nir then
left for Tel Aviv. Subsequently, Gorba,
Abe [Albert Hakim], and I met with [the
Iranian official] for about one hour. Abe
did beautiful job of rug merchanting with
[the Iranian official] and also helped
Gorba's ego a lot. He was extremely inter-
ested in Russian intentions. He propagan-
dized a lot about Iranian fighting spirit and
we assured him Americans respected Irani-
an people. He emphasized need for quick
meeting at Kish 52 and said he would pos-
sibly, repeat, possibly surprise us by getting
some hostages released before meeting.
[S]uggest you make contingency plan to
accommodate early release (i.e., as early as
Sunday). So, bottom line is on to Kish
ASAP to seize the potential opening now
created.
("Copp 2/27/86 1020. 161455Z Feb. 86")
North wrote the following note on this
message:
" 1120 EST - 707 Back at B.G. Apt.
Gorba got 13,200/missile Gets $260/mis-
sile Gives $50/missile to Ledeen.
(Handwritten note on id.)
The Board has seen no evidence supporting
the implication contained in this Document, and
Ledeen "flatly" denied receiving any commis-
sions in connection with the arms transfers to
Iran. (Ledeen (1) 63)
North reported his later activities of February
27 to McFarlane:
Since the missive of this morning, met w/
Casey, JMP, [C/NE], Clair George and all
have now agreed to press on. Believe we
are indeed headed in the right direction.
Just finished lengthy session w/ JMP he in-
dicated that he has passed substance to
you and has given me dates that you are
not avail.
52 An "old SAVAK-maintained island off the coast of Iran." (C.
Allen 15)
Will endeavor to sched. mtg so that these
do not conflict but noted to JMP that it
was their call as to date of mtg. Just rec'd
msg fm Secord via secure device we are
using. [The Iranian official] has again reaf-
firmed that once we have set a date we
shall have a very pleasant surprise. Dick &
I believe that they may be preparing to re-
lease one of the hostages early. Dick also
indicated that yr counterpart at the mtg wd
be Rafsanjani. Nice crowd you run with!
God willing Shultz will buy onto [sic] this
tomorrow when JMP brief[s] him. With the
grace of the good Lord and a little more
hard work we will very soon have five
AMCITS home and be on our way to a
much more positive relationship than one
which barters TOWs for lives.
I value your friendship and confidence very
highly and did not mean to infer that you
had revealed these exchanges. By asking
that you not indicate same to JMP I was
only informing that I had not told him any-
thing of it so as not to compromise myself
at a point in time when he needs to be ab-
solutely certain that this can work. He is,
as only you can know, under tremendous
pressure on this matter and very con-
cerned that it go according to plan. My
part in this was easy compared to his. I
only had to deal with our enemies. He has
to deal with the cabinet. Many thanks for
yr. trust. Warm regards, North.
(North PROF note to McFarlane, 2/27/86,
20:11:51)
Meanwhile, McFarlane had written North that
afternoon:
Roger Ollie. Well done-if the world only
knew how many times you have kept a
semblance of integrity and gumption to US
policy, they would make you Secretary of
State. But they can't know and would com-
plain if they did-such is the state of de-
mocracy in the late 20th century. But the
mission was terribly promising. As you
know I do not hold Gorbanifar [sic] in
high regard and so am particularly glad to
hear of [the official in the Prime Minister's
office] apparent authority.
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I have just gotten a note from John asking
whether or not I could go some time next
week and the President is on board. I
agreed. So hunker down and get some
rest; let this word come to you in channels,
but pack your bags to be ready to go in the
next week or so. Incidentally, I have had
periodic requests from Mike [?Ledeen?] to
assist in getting visas for [sic] Gorbanifar
to come to Switzerland . . . . I have re-
fused. Surely if they have any real bona
fides they can get a visa in Tehran from
the Swiss embassy or somewhere else. I do
not intend to tell Mike any of this new
info. Recommend against your doing so.
Bravo Zulu.
(McFarlane PROF note to North, 2/27/86,
16:02:23)
North replied in the evening.
Am reading things out of sequence due to
fatigue. Many thanks for yr note. Have re-
sponded to most of this in my reply re ex-
changes-before I read this one. Yr con-
cerns re Mike are shared here. WILCO re
the passing of info. He means well but
poses a significant problem. Nir says he
has info that Mike has a financial relation-
ship w/ Gorba, Nimrodi and perhaps
Schwimmer. If true, this is not good. We
also know that Gorba tells Mike everything
and that is an additional reason to get
Gorba out of the long range picture ASAP.
We will still need to have him involved in
the TOWs transactions since he manages
the financial end for the Iraniansin [sic]
Europe. We ought to sit quietly and think
about how we handle Mike so that he does
not start talking out of disgruntlement (if
that's a word). Have asked JMP for a ses-
sion vw/ you and Dick Secord as soon as
possible after Dick returns tomorrow night
fm Eur where he is setting up an arms de-
livery for the Nic resistance. A man of
many talents of Secord is. Must be off. Am
supposed to make a speech on aiding the
Nic resistance to a group of supporters.
Best regards. North.
(North PROF notes to McFarlane, 2/27/86,
20:22:22)
On February 28, Poindexter told the Secre-
tary of State that the hostages would be re-
leased the following week. According to the
Secretary of State:
Poindexter reported nothing about arms.
Rather, he said that the Iranians wanted a
high-level dialogue, covering issues other
than hostages. He said the White House
had chosen McFarlane for the mission, and
that he would go to Frankfurt, West Ger-
many, to meet with a deputy of Rafsanjani.
I .[Shultz] said fine, but asked that Mr.
McFarlane be given instructions to govern
his negotiations. I was shown these instruc-
tions, and I was satisfied with them.
Wholly independent of the hostage issue,
Vice Admiral Poindexter said the Iranians
had asked for help on intelligence as to
what the Soviets were doing on the Iranian
border and in Afghanistan. He saw a path
to reemerging relations.
Vice Admiral Poindexter said that the hos-
tages would be released at the time Mr.
McFarlane was meeting with the Iranians
in Frankfurt.
[T]he presumption was that, after the
meeting, they were pursuing this matter,
and that, as a result of pursuing it, the Ira-
nians wanted the meeting, and the meeting
itself, having it with a high-level person
like Mr. McFarlane, the President's former
advisor, was a mark of a high-level interest;
and the other side of that coin was the re-
lease of the hostages. It's sort of like the
London proposition returning again, I
thought.
It seemed very unlikely to me, but I said
well, if you've got that arrangement, that's
great.
(Shultz, SRB, 51-52)
VII. Hostages and Iran Pursued:
March-May 1986
By the end of February 1986, the representa-
tives of the United States were disappointed by
the results of negotiations with Ghorbanifar
and Iranian officials. But disappointment was
gilded in hope, and the effort was pursued.
At this time, American policy changed with
regard to terrorism. Since the terrorist bomb-
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ings at the Rome and Vienna airports in De-
cember 1985, the United States was prepared
to use military force to affirm its rights. In
March 1986, units of the Sixth Fleet undertook
what was described as a routine assertion of the
right of passage through the international
waters of the Gulf of Sidra. In the course of
that exercise, ships crossed what Qadhafi had
designated a "line of death," and Libyan forces
attacked them. In April, Libya directed the
bombing of a West Berlin discotheque fre-
quented by Americans, and, in response, Amer-
ican aircraft attacked Libyan targets on April
14.
A. Prologue to a McFarlane-
Iranian Meeting, I: March
1986 53
Preparations for the next meeting with Irani-
ans, in which McFarlane was to participate, im-
mediately began when North returned from
Frankfurt. Clair George, with C/NE's support,
urged that George Cave join the team as inter-
preter. C/NE recalled that he had told North
on the way home from Frankfurt at the end of
February that the government should provide
an interpreter. Secord and Hakim, who is of
Iranian origin, had appeared at the first and
second Frankfurt meetings, respectively, with-
out prior notice to C/NE. (C/NE (1) 11; C/NE
(2) 76) C/NE not only believed that the gov-
ernment could perform the roles assigned to
ss McFarLane told the Board:
I left the government and didn't hear anything more on the
issue until I had a call from Admiral Poindexter in late April
of this year, and he summarized that basically, that the pro-
gram had been renewed and contacts re-established, and that
the President had authorized quite an active dialogue and
the transfer of weapons.
And to make a long story short, it wasn't a long conversa-
tion. He said: We believe we have an arrangement whereby
they would release all of the remaining hostages, and they
have agreed to start this exchange on political matters, and
the President wants to know, will you undertake that political
exchange.
[Between the date that he reported on his December trip and
Poindexter's call in April, McFarlane's contact with the Iranian
question amounted to] one or two phone calls that dealt with
other matters, either Lieutenant Colonel North, just kind of in a
social context, but just by way of mentioning how things were
going in life and professionally and so forth, I remember either
it was him or it was Admiral Poindexter, I don't know saying: By
the way, things aren't totally moribund on the Iranian connec-
tion; we have some promise there, but without any precision.
(McFarlane (1) 28-29)
Secord and Hakim, but also thought Hakim
had a potential conflict of interest arising from
his own business relationships. (See C/NE (1)
11-12, 40) C/NE recalled that Hakim was in-
volved in arms transactions "that might or
might not be legal. There wasn't any prosecu-
tion going against him, but there was a little
suspicion . . . And North, to his credit, accept-
ed that advice and we introduced George
Cave." (Id. at 12)54
Cave had served in Tehran and was widely
respected for his knowledge of Iran and Farsi.
At this time, although retired, he was a consult-
ant to the CIA. (CIA/IG Chronology 20;
George 11; C/NE (1) 12; Cave 3) He had been
responsible for terminating the CIA's relation-
ship with Ghorbanifar in 1983, and had helped
craft Ghorbanifar's polygraph examination in
January 1986. (C/NE (2) 76) He joined the
team on March 5. When C/NE introduced him
to North, (North calendar; Cave 3), he recalled
being "a little bit horrified when I found out
that [Ghorbanifar] was involved in this." (Cave
5)55
On February 27, the Director of Central In-
telligence met with Poindexter, George, and C/
NE, (DCI Telephone Calls and Meetings, 1-9/
30/86); talking points were prepared on the
same day for the Director, possibly for use in
that meeting.
Continued discussions on a very serious
and important matter and I would like to
suggest some guidelines:
(1) The initial meeting should be explora-
tory only.
(2) We should provide information about
the Soviet Union threat to the northern
54 On February 27, C/NE asked the CIA for alias passports for
C/NE, Cave, Secord, and Hakim. On March 3, the passports
were provided. Hakim never used his passport, which was re-
turned on May 22. Secord's passport was returned on November
20, 1986. (CIA/IG Chronology 20).
55 In contrast, on February 20, 1986, after Ghorbanifar passed
him information on preparations for a number of terrorist at-
tacks, Charles Allen wrote that: "I believe we should move quick-
ly to consolidate our relations with Subject [Ghorbanifar]. Al-
though he exaggerates and manufactures some of his informa-
tion, he has excellent contacts with Iranian officials in Tehran.
He also has interesting contacts with Iranian nationals in Western
Europe. I believe we would be remiss unless we begin to work
with Subject and evaluate the potential of some of his associates,
particularly [names deleted]. I have met [name deleted] and be-
lieve that he has excellent potential." (C. Allen, "Discussions with
Subject," 2/20/86)
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border, about the level and quality of
Soviet arms going to Iraq, about the Soviet
thrust in Afghanistan . . . . That seems
like another reason for emphasizing the
Soviet aspect. If the fact of the talks leak,
that would be the best way to get public
and Arab understanding of the discussions.
(3) The contact should be direct. Israel
and Gorbanifar [sic] should not be in-
volved in these discussions. We can't
afford any more telephone conversations
which the Soviets and others can listen in
on.
(4) The first indispensable step is to set up
a secure commo channel from the point
where the talks are held or some point in
that country to Western Europe where fur-
ther secure conversations can be passed
through to Washington. We should have
this before discussions begin, and for this
purpose we should fly Secord into Teheran
as soon as possible.
(5) The group at the meetings should be
as small as possible. I recommend that it
consist of McFarlane, North, [C/NE], a
staffer for McFarlane, and George Cave.
George Cave is an ideal interpreter. He
speaks not only Farsi, but also Mullah and
understands all dialects. He is a known and
proven quantity. In contemplation of
where these discussions could possibly go,
we should avoid having a foreign interpret-
er, even though the man in Switzerland is
accepted and trusted.56 He should be our
man.
(6) These discussions ought to go forward.
The President should call Prime Minister
Peres, thank him, tell him we are not going
to take his man to the meeting because we
think it is in the best interest of the two
countries not to involve them directly at
this time, assure him that we have Israel's
interests in mind, and will protect them
and report to Peres after the meeting.
(7) We need to continuously plan in case
the discussions leak. The fact of discus-
sions between the United States and Iran
could change the whole universe. Iraqi re-
56 Probably a reference to Hakim. Ghorbanifar told the Board
that Cave's Farsi was "very, very poor," probably due to disuse.
(Ghorbanifar 159)
sistance could weaken. The Arab world
could go mad unless the discussions are
carefully and adequately explained. Some
element of the explanation could be:
-The Soviets have been talking to
both parties for years;
-The Arabs would cheer if Iran could
be moderated; and
-Of course, we will do almost any-
thing to get our hostages back.
We should remember that leaking the fact
of this meeting could be viewed as working
to the advantage of Israel. Only four men
in Israel know of the discussions-the
Prime Minister, his military secretary (Neer
[sic]) who attended the Frankfurt meeting
and who is the Prime Minister's terrorism
advisor, and Neer's boss in the Prime Min-
ister's office.
(DCI, Talking Points, 2/27/86) 57 At the begin-
ning of March, Robert Gates, Deputy Director
for Intelligence, asked that briefing materials
on the Soviet threat to Iran be prepared for
McFarlane's use. (CIA/IG Chronology 20)
North, C/NE, and Cave travelled to Paris on
March 7 to meet Ghorbanifar the next day.58
S7 Attached to the copy of these talking points in North's file
was the following note in North's handwriting:
-Probing for foothold
-access before transition
-fear of Soviets-left inside
-Anti Western terrorism
-Tactical success in near-term could be to our advantage in
that it offers opportunity for settlement.
-People who know
-Shultz
-Weinberger
-Powell
-Koch
-Casey
?[C/NE]
McMahon
?Allen
Gates
-RR
-JMP
-Don R[egan].
-Don F [ortier]
-VP
-Peter [Rodman]
-Howard [Teicher].
(Handwritten note. Feb. 1986)
ea Cave said the meeting took place on March 7. (Cave 5) Ac-
cording to North's calendar, travel forms, and subsequent report
to McFarlane, it took place on March 8.
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On his return from Paris, North reported to
McFarlane.
Per request from yr old friend Gorba, met
w/ him in Paris on Saturday [March 8].59
He started w/ a long speech re how we
were trying to cut him out, how important
he is to the process and how he cd deliver
on the hostages if only we cd sweeten the
pot w/ some little tid-bits-like more arms,
etc. After his speech I allowed as how he
was not getting the message, but that I wd
reiterate:
-The hostages are a serious impediment
to serious govt-to-govt discussions and this
must be resolved before we can discuss any
further transactions.-We remain ready to
go to Kish [Island] or anywhere else to dis-
cuss issues of mutual concern as long as
the hostages are going to be- released
during or before this meeting.-The real
problem facing Iran-that of Soviet inter-
vention was becoming a reality and the Ira-
nians are in no position to deal w/ this
problem. We can help-and are willing to
because a free, independent, Iran is in our
best interests. Unless the hostage issue is
resolved quickly and favorably, U.S./Irani-
an cooperation on opposing the Soviets is
out of the question.
Much more said in this respect, but you
have the essence. Bob Gates has assembled
a nice amt of intel on the Soviet threat
. . . . There does indeed seem to be a
growing awareness in the USSR that their
Iraqi friends are having their asses handed
to them and that the situation in Afghani-
stan is getting worse, not better.. . .
(North PROF note to McFarlane, 3/10/86,
21:10:24) 60
59 According to Cave, Nir proposed the meeting "to see what
we could salvage" after the meeting with the official from the Ira-
nian PM's office in February. (Cave 5) On March 4, Ghorbanifar
called Charles Allen, among other things, to suggest that he es-
tablish a "'continuing relationship' " with Allen and the CIA. (C.
Allen, "Conversation with Subject, 4 March 1986," 3/6/86. CIA
Docs.)
80 In the same message, North asked McFarlane's advice about
an opportunity to return to the Marine Corps. McFarlane replied
that the two should discuss it. He added:
Frankly, I would expect the heat from the Hill to become im-
mense on you by summer. Consequently, it strikes me as wise
that you leave the White House. At the same time, there will
be no one to do all (or even a small part of what) you have
Cave recalled that, in Paris, Ghorbanifar pur-
ported to communicate Iran's present position.
He indicated that Tehran was "prepared to do
something to get additional hostages released"
and was interested in pursuing a political dis-
cussion with the United States. (Cave 6) Ghor-
banifar presented "a list of 240 line items for
HAWK spare parts. This was basically what
transpired at that meeting." (Id.) Cave remem-
bered much discussion about why no hostages
had been released after the delivery of 1,000
TOWS, but no explanation-"just the proposal
that the Iranians had indicated to Ghorbanifar
that they would be interested in opening nego-
tiations with the United States, both on the po-
litical side and the strategic side. The one spe-
cific area that was first discussed at this meet-
ing was Afghanistan." (Id.)
C/NE recalled frustration after the Paris meet-
ing.
We had delivered our missiles and the
shoe was on their foot, but they were
acting like the shoe was still on our foot.
Ghorbanifar came to that meeting and
said, well, they've decided they didn't want
TOWS after all. So the TOWs don't count.
What we need now are HAWK spare parts;
we don't need any more TOWS. We want
HAWK spare parts.
And he presented us a list of HAWK spare
parts he needed. So, you know, it's a bag
of worms. I was present when North
briefed Poindexter after that meeting, and
Poindexter at that point was fed up and
wanted to just cut if off entirely, forget it.
It wasn't going anywhere.
(C/NE (1) 20)
As C/NE noted, the program was not cut off.
Based in part, at least, on reports from Cave,
who worked under his direction, C/NE re-
called:
done. And if it isn't done, virtually all of the investment of the
past five years will go down the drain.
How's this for a self-serving scenario: 1. North leaves the
White House in May and takes 30 days leave. 2. July 1st North
is assigned as a fellow at the CSIS and (lo and behold) is as-
signed to McFarlane's office. 3. McFarlane/North continue to
work the Iran account as well as to build other clandestine ca-
pabilities so much in demand here and there. Just a knee jerk
musing.
(McFarlane PROF note to North, 3/10/86, 22:14:24)
B-82
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There was a lot of discussion essentially to
try to figure out a way to get Ghorbanifar
out of it and, North, who you must have
sensed by now is a man of a lot of energy
and a lot of determination, essentially kept
it alive because of the President's personal
and emotional interest in getting the hos-
tages out-in my view.
The political reality of this thing was it
would be very nice if you could get a stra-
tegic thing done, a real improvement, a
real change in Iranian relations, a securing
of Iran, again as having a relationship with
the U.S. and denied to the Soviets. All that
was fine. But the real thing that was driv-
ing this was that there was in early '86, late
'85, a lot of pressure from the hostage
families to meet with the President and
there were articles in the magazines about
the forgotten hostages, and there were a
lot of things being said about the U.S.
Government isn't doing anything, not
doing anything.
And, of course, what is being done is we
are desperately trying to keep secret. And
there is a lot of fear about the yellow rib-
bons going back up and that this President
would have the same problems that the last
President had had with Iranian hostages,
Iranian control. We learned as time went
on that the Iranians didn't fully control
these hostages, but as it was being por-
trayed until Ghorbanifar got out of it there
wasn't any question that we could get all
those hostages out through the Iranians.
We had tried to do the same with the Syr-
ians. We had tried the same through the
Algerians.... There had been several em-
issaries sent secretly to see Assad. There
were a lot of nice words said by Assad, but
he never lifted a finger, not once.
On at least two occasions we told the Syr-
ians precisely where those hostages were
and the Syrians said we'll do our best to
see if we can find these people, and we
certainly are going to make sure that noth-
ing is done so that they are harmed as we
try to rescue them. But we'll try to get
them out right now. But we had intelli-
gence that they weren't doing anything.
Nice words, but no action.
So an enormous amount of frustration that
there wasn't any other way and that there
was an enormous amount of intelligence
consistent from the time that Buckley was
taken that the captors wanted to have an
exchange, that the Kuwaitis would have to
release the Dawa prisoners in Kuwait, the
ones who were involved in the bombings
there in December of '83, and that nothing
else would work to get those hostages re-
leased.
And that was true until this channel released
Weir.
(Id. at 21-23)
Prior to the March Paris meeting, Ghorbani-
far received word from his Tehran contact that
he was having difficulty persuading his govern-
ment colleagues to respond positively to the
delivery of 1,000 TOWs. He insisted that Iran
needed 100 surface-to-air missiles but Iran
would not accept more HAWKs of the type
shipped in November. It was apparent that
Ghorbanifar and his Tehran contact had dis-
cussed other arms deliveries as well. 61
McFarlane was concerned by North's reports
about the meeting in Frankfurt. He wrote late
on March 10:
I guess I'm a little puzzled about the Irani-
an wiring diagram. From whom are we get-
ting the word concerning a meeting in the
Gulf? Is Gorba involved in that dialogue or
is that info coming through the Israelis? It
strikes me that it is probably OK to keep
Gorba in the dark-to the extent that is
possible to do if there is another channel.
Gorba is basically a self-serving mischief
maker. Of course the trouble is that as far
as we know, so is the entire lot of those we
are dealing with. The Soviet threat is the
strategic menace and I would guess that
they would like to avoid having the Rus-
sians in Iran. But it is going to take some
time to get a feel for just who the players
61 On March 9, Ghorbanifar called Charles Allen, reporting,
among other things, that the Paris meetings had been successful,
although additional effort remained. Allen thought Ghorbanifar
"seemed unusually subdued and less sanguine than in previous
conversations." (C. Allen, "Conversation with Subject," 3/11/86.
CIA Docs.)
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are on the contemporary scene in Teheran
[sic]. So the sooner we get started the
better.
(McFarlane PROF note to North, 3/10/86,
22:14:24)
On March 11, North answered McFarlane:
[Ghorbanifar] is aware of the Kish mtg and
is basically carrying our water on the mtg
since he is still the only access we have to
the Iranian political leadership. It wd be
useful, I believe, for you to talk w/George
Cave, the Agency's Iran expert. He shares
our concern that we may be dealing only
w/ those who have an interest in arms
sales and their own personal financial gain.
. . . Will advise. If you wd like to meet w/
George, pis let me know and I will ar-
range.
(North PROF note to McFarlane, 3/11/86,
07:23:34) On March 11, Poindexter told the
Secretary of State "that this arrangement [a
McFarlane-Iranian meeting in Frankfurt] had
fallen through, apparently because Mr. McFar-
lane objected to the idea." (Shultz, SRB, 52)
Just before North, C/NE, and Cave went to
Paris, Howard Teicher, who at that time was
working on Libyan matters, again became in-
volved in the matter. C/NE told him in the last
week of February "I hope you're getting a lot
of rest, you're really going to be tired."
(Teicher 16) Teicher subsequently met with
Fortier, Rodman, and North. He "was briefed
orally on the President's January 17 finding,
and advised that [he] would be providing staff
support to Mr. McFarlane, travelling with him
to Tehran, when the arrangements were com-
pleted that would permit a delegation to travel
to Iran for meetings with the senior Iranian
leadership." (Id. at 17) Teicher recalled being
informed in general terms about a shipment of
TOWs, "a joint operation with the Government
of Israel," and that the Finding specified that
Congress would not be informed at this time.
He remembered remarking that he understood
Congress was normally informed and being
told that the Attorney General believed excep-
tions were permitted, as in this case.
Teicher was instructed to work with Rodman
and North on terms of reference for McFar-
lane's use, and submit them to Fortier. (Id. at
17-18) Teicher later submitted a draft of terms
of reference to North. (Teicher 2). An un-
signed, undated draft document may be this
draft (original spelling and grammar):
We are concerned with three problems of
mutual interest:
2. Soviets. The Soviets are deeply con-
cerned about the possibility of an Ira-
nian military victory in Iraq. The 1972
treaty of friendship between Iraq and
the USSR calls for consultation be-
tween the two powers when Iraqi terri-
tory is threatened by hostile military
action. The wording of this treaty is
not specific so the Soviets have consid-
erable latitude in deciding on actions
to on the actions to take in their own
interests. . . . The Soviets see the col-
lapse of Iraq as greatly weakening their
influence in the Arab Middle East. To
date the Soviets have shied away from
direct military assistance, but they
have keep [sic] open the military
supply line to Iraq. They have also in-
creased their intelligence support to
Iraq. This was particularly apparent
during the Val fajr 8 offensive. Further
Iranian successes in its war with Iraq
might lead to Soviet military moves
along the Iranian border. These moves
would be the threatening type in
hopes of drawing off Iranian troops
from the Iraqi front.. . .
3. Syria. The Syrians are concerned
about the consequences of an Iranian
victory in Iraq. They see the inevitabil-
ity of a clash of interests in Lebanon
between the Syrians and the Shiah. An
Iranian victory in Iraq will strengthen
Shiah resolve in Lebanon. The Syrians
also do not want a fundamentalist Is-
lamic state in Iraq. Assad has been
trheatened [sic] by fundamentalist
movements in Syria in the past and
has been forced to deal very harshly
with them. The bombardment of
Hama being the best example. Syria
would like to see Iraq weak, but not
overrun by Iran. Assad is already
being forced to consider the possibility
that relations with Iran are going to
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become strained at some point in the
future. Syria's most immediate con-
cerned [sic] is its growing problem
with the Hizbullah movement in Leba-
non.. . .
B. Prologue to a McFarlane-
Iranian Meeting, II:
April-May 1986
The exchanges of fire with Libya in March
and April 1986 complicated, but did not inter-
rupt, attempts to schedule a meeting between
McFarlane and important officials of the Irani-
an government. Toward the end of March,
Ghorbanifar travelled to Tehran, North report-
ed to McFarlane on March 20, "and returned
with a proposed meeting scenario that is being
communicated to us thru the Israeli, Nir, fm
Peres' office. Still don't have details yet since
his secure comms down, but should have nec-
essary info tomorrow." (North PROF note to
McFarlane, 3/20/86, 07:21:03. 1986 PROF
notes) 62 On March 25:
The Iranian official in the PM's office]
called the phone drop that Dick Secord
had given him. Al Hakim, who [sic] we
passed off as a "White House interpreter"
at the Frankfurt mtg. spoke to [the official]
twice yesterday [March 25]. The bottom
line of the calls is that [the Iranian official]
wd like to have us meet w/ the Iranian side
next week at Kharg Island. Supposedly,
during the mtg the hostages wd be re-
leased and we wd immediately start deliv-
ering the 3k TOWs and agree at the mtg
to the delivery of spare parts which they
desperately need. They profess to be very
concerned about the nature of the Soviet
threat and want all we can give them on
that score. Not sure at this point how real
this offer is, but he says Rafsanjani wd
62 Ghorbanifar went to Tehran on March 13, "at some person-
al risk," returning to France on the 17th. (C. Allen, "Conversa-
tion with Subject," 3/12/86. CIA Docs.) On March 20, Ghorbani-
far told Allen he had briefed Nir ("Adam") on his meetings with
the Iranian Prime Minister, Rafsanjani, and Ahmad Khomeini
(the Ayatollah's son). He reported that the Ayatollah remained
"very ill"; that the Prime Minister had uncovered Soviet penetra-
tion of his office; that he was sending a report to North, which
would include some requirements from the Iranian military; and
that he hoped a meeting of principals could take place soon. (C.
Allen, "Conversation with Subject," 3/21/86)
come as the head of the Iranian side. If
this looks like a go-and we shd know
more tomorrow when the next phone call
is scheduled-how are you for travel
during the week of 31 Mar-4Apr?
(North PROF note to McFarlane, 3/26/86,
09:19:12)
In part to work on scheduling, Ghorbanifar
came to the United States at the beginning of
April.63 At the end of March and beginning of
April, Ghorbanifar complained to Charles Allen
and Nir about two calls from Hakim in which
Hakim claimed to speak for the President. Ac-
cording to Ghorbanifar, Hakim said that there
was no longer any reason for Ghorbanifar to be
involved. (C. Allen, "Conversation with Sub-
ject," 4/2/86. CIA Docs.) Partly to reassure
him, North invited Ghorbanifar to the United
States on an urgent basis. He came on April 3,
by Concorde. On April 7, North reported the
meeting to McFarlane.
Met last week w/ Gorba to finalize ar-
rangements for a mtg in Iran and release
of hostages on or about 19 Apr. This was
based on word that he had to deposit not
less than $15M in appropriate acct. by close
of banking tomorrow. Have talked at
length w/ Nir who is handling him on thie
[sic] bank xfer and Nir believes that Gorba
may be having trouble closing the final ar-
rangements back home. Per request of JMP
have prepared a paper for our boss which
lays out arrangements. Gorba indicated
that yr counterpart in the T[ehran] mtg wd
be Rafsanjani. If all this comes to pass it
shd be one hell of a show. Meanwhile we
have some evidence that Col Q. [Qadhafi]
is attempting to buy the hostages in order
to stage a propaganda extravaganza. As far
fetched as this may seem, CIA believes it is
a distinct possibility. Bottom line: believe
63 In a series of telephone conversations with Ghorbanifar and
Nir, March 24-April 2, Charles Allen learned that Ghorbanifar
was under pressure in Tehran; that he was passing through a dif-
ficult period financially, but that the Israelis were helping him;
that an important meeting would occur on March 29,. at which
Khomeini himself would be informed of the state of play with the
United States; and that, after that meeting, Ghorbanifar had "ex-
cellent news" for North. An NSC consultant reported to Allen
that Ghorbanifar was upset in part because his California girl-
friend's house had been entered, as had Furmark's office in New
York. Ghorbanifar blamed the CIA. (C. Allen, Memoranda for
the Record, 3/24, 3/28, 3/28, 3/31, 4/2/86)
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you slid avail yrself of this paper @ yr ear-
liest convenience. Wd like to see you
anyway. Am going home-if I remember
the way.
(North PROF note to McFarlane, 4/7/86,
23:18:58)
Cave recalled meeting Ghorbanifar on April
3-4 with Charles Allen, C/NE, and North.
Ghorbanifar reported that the Iranians now
proposed a meeting. According to Ghorbanifar,
"the Iranians were looking at the hostage situa-
tion and hoping that they could get all the
hostages released in return for consideration on
arms, specifically the HAWK missiles and the
HAWK missile parts and the TOWs." (Cave
6-7) The Americans gave him a list of available
HAWK spare parts.
Now, on the pricing, the way we handled
the pricing is we calculated up all our
costs, and this included the cost of the
items, whatever shipping costs we had to
pay for packing, guards, what have you,
and we would give this figure to Colonel
North.
(Id.)
North's memorandum for Poindexter to for-
ward to the President reviewed the negotiations
and specified how the profits on the sale of
weapons to Iran could be spent. The Board has
obtained no evidence that Poindexter showed
this memorandum to the President.
Background.-In June 1985, private Ameri-
can and Israeli citizens commenced an op-
eration to effect the release of the Ameri-
can hostages in Beirut in exchange for pro-
viding certain factions in Iran with U.S.-
origin Israeli military materiel. By Septem-
ber, U.S. and Israeli Government officials
became involved in this endeavor in order
to ensure that the USG would:
-not object to the Israeli transfer of em-
bargoed material to Iran;
-sell replacement items to Israel as re-
plenishment for like items sold to Iran by
Israel.
On September 13, the Israeli Government,
with the endorsement of the USG, trans-
ferred 508 TOW missile to Iran. Forty-
eight hours later, Reverend Benjamin Weir
was released in Beirut.
Subsequent efforts by both governments to
continue this process have met with frus-
tration due to the need to communicate
our intentions through an Iranian expatri-
ate arms dealer in Europe. In January
1986, under the provisions of a new
Covert Action Finding, the USG demanded
a meeting with responsible Iranian govern-
ment officials.
On February 20, a U.S. Government offi-
cial. met with an official in the Iranian
Prime Minister's office-the first direct
U.S.-Iranian contact in over five years. At
this meeting, the U.S. side made an effort
to refocus Iranian attention on the threat
posed by the Soviet Union and the need to
establish a longer term relationship be-
tween our two countries based on more
than arms transactions. It was emphasized
that the hostage issue was a "hurdle"
which must be crossed before this im-
proved relationship could prosper. During
the meeting, it also became apparent that
our conditions/demand had not been accu-
rately transmitted to the Iranian govern-
ment by the intermediary and it was
agreed that:
-The USG would establish its good
faith and bona fides by immediately
providing 1,000 TOW missiles for sale
to Iran. This transaction was covertly
completed on February 21, using a
private U.S. firm and the Israelis as in-
termediaries.
-A subsequent meeting would be
held in Iran with senior U.S. and Irani-
an officials during which the U.S. hos-
tages would be released.
-Immediately after the hostages were
safely in our hands, the U.S. would sell
an additional 3,000 TOW missiles to
Iran using the same procedures em-
ployed during the September 1985
transfer.
In early March; the Iranian expatriate in-
termediary demanded that Iranian condi-
tions for release of the hostages now in-
cluded the prior sale of 200 PHOENIX
missiles and an unspecified number of
HARPOON missiles, in addition to the
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3,000 TOWs which would be delivered
after the hostages were released. A subse-
quent meeting was held with the interme-
diary in Paris on March 8, wherein it was
explained that the requirement for prior
deliveries violated the understanding
reached in Frankfurt on February 20, and
were [sic] therefore unacceptable. It was
further noted that the Iranian aircraft and
ship launchers for these missiles were in
such disrepair that the missiles could not
be launched even if provided.
From March 9 until March 30, there was
no further effort undertaken on our behalf
to contact the Iranian Government or the
intermediary. On March 26, [the official in
the Prime Minister's office] made an unso-
licited call to the phone-drop in Maryland
which we had established for this purpose.
[He] asked why we had not been in contact
and urged that we proceed expeditiously
since the situation in Beirut was deteriorat-
ing rapidly. He was informed by our Farsi-
speaking interpreter that the conditions re-
quiring additional materiel beyond the
3,000 TOWs were unacceptable and that
we could in no case provide anything else
prior to the release of our hostages. [The
Iranian official] observed that we were cor-
rect in our assessment of their inability to
use PHOENIX and HARPOON missiles
and that the most urgent requirement that
Iran had was to place their current HAWK
missile inventory in working condition. In
a subsequent phone call, we agreed to dis-
cuss this matter with him and he indicated
that he would prepare an inventory of
parts required to make their HAWK sys-
tems operational. This parts list was re-
ceived on March 28, and verified by CIA.
Current Situation.-On April 3, Ari Gorbani-
fahr [sic], the Iranian intermediary, arrived
in Washington, D.C. with instructions from.
[his Tehran contact] to consummate final
arrangements for the return of the hos-
tages. Gorbanifahr was reportedly enfran-
chised to negotiate the types, quantities,
and delivery procedures for materiel the
U.S. would sell to Iran through Israel. The
meeting lasted nearly all night on April 3-
4, and involved numerous calls to Tehran.
A Farsi-speaking CIA officer in attendance
was able to verify the substance of his calls
to Tehran during the meeting. Subject to
Presidential approval, it was agreed to pro-
ceed as follows:
-By Monday, April 7, the Iranian
Government will transfer $17 million
to an Israeli account in Switzerland.
The Israelis will, in turn,. transfer to a
private U.S. corporation account in
Switzerland the sum of $15 million.
-On Tuesday, April 8 (or as soon as
the transactions are verified), the pri-
vate U.S. corporation will transfer
$3.651 million to a CIA account in
Switzerland. CIA will then transfer this
sum to a covert Department of the
Army account in the U.S.
-On Wednesday, April 9, the CIA
will commence procuring $3.651 mil-
lion worth of HAWK missile parts
(240 separate line items) and transfer-
ring these parts to . . . This process is
estimated to take seven working days.
-On Friday, April 18, a private U.S.
aircraft (707B) will pick-up the HAWK
missile parts at . . . and fly them to a
covert Israeli airfield for preposition-
ing (this field was used for the earlier
delivery of the 1000 TOWs). At this
field, the parts will be transferred to
an Israeli Defense Forces' (IDF) air-
craft with false markings. A SATCOM
capability will be positioned at this lo-
cation.
-On Saturday, April 19, McFarlane,
North, Teicher, Cave, [C/NE], and a
SATCOM communicator will board an
aircraft in Frankfurt, Germany, en-
route [sic] to Tehran.
-On Sunday, April 20, the following
series of events will occur:
-U.S. party arrives Tehran (A-
hour)-met by Rafsanjani, as head
of the Iranian delegation.
-At A+7 hours, the U.S. hos-
tages will be released in Beirut.
-At A+ 15 hours, the IDF aircraft
with the HAWK missile parts
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aboard will land at Bandar Abbas,
Iran.
Discussion.-The following points are rele-
vant to this transaction, the discussions in
Iran, and the establishment of a broader
relationship between the United States and
Iran:
-The Iranians have been told that
our presence in Iran is a "holy com-
mitment" on the part of the USG that
we are sincere and can be trusted.
There is great distrust of the U.S.
among the various Iranian parties in-
volved. Without our presence on the
ground in Iran, they will not believe
that we will fulfill our end of the bar-
gain after the hostages are released.
-The Iranians know, probably better
than we, that both Arafat and Qhad-
haffi are trying hard to have the hos-
tages turned over to them. Gorbani-
fahr specifically mentioned that Qhad-
haffi's efforts to "buy" the hostages
could succeed in the near future. Fur-
ther,. the Iranians are well aware that
the situation in Beirut is deteriorating
rapidly and that the abilitiy of the
IRGC [Iranian Revolutionary Guard
Corps] to effect the release of the hos-
tages will become increasingly more
difficult over time.
-We have convinced the Iranians of a
significant near term and long range
threat from the Soviet Union. We have
real and deceptive intelligence to dem-
onstrate this threat during the visit.
They have expressed considerable in-
terest in this matter as part of the
longer term relationship.
-We have told the Iranians that we
are interested in assistance they may
be willing to provide to the Afghan re-
sistance and that we wish to discuss
this mattter in Tehran.
-The Iranians have been told that
their provision of assistance to Nicara-
gua is unacceptable to us and they
have agreed to discuss this matter in
Tehran.
-We have further indicated to the
Iranians that we wish to discuss steps
leading to a cessation of hostilities be-
tween Iran and Iraq. . -The Iranians are well aware that
their most immediate needs are for
technical assistance in maintaining
their air force and navy. We should
expect that they will raise this issue
during the discussions in Tehran. Fur-
ther conversation with Gorbanifahr on
April 4, indicates that they will want to
raise the matter of the original 3,000
TOWs as a significant deterrent to a
potential Soviet move against Iran.
They have also suggested that, if
agreement is reached to provide the
TOWs, they will make 200 out of each
1,000 available to the Afghan resist-
ance and train the resistance forces in
how to use them against the Soviets.
We have agreed to discuss this matter.
-The Iranians have been told and
agreed that they will receive neither
blame nor credit for the seizure/re-
lease of the hostages.
-The residual funds from this trans-
action are allocated as follows:
-$2 million will be used to pur-
chase replacement TOWs for the
original 508 sold by Israel to Iran
for the release of Benjamin Weir.
This is the only way that we have
found to meet our commitment to
replenish these stocks.
-$12 million will be used to pur-
chase critically needed supplies
for the Nicaraguan Democratic
Resistance Forces. This materiel is
essential to cover shortages in re-
sistance inventories resulting from
their current offensives and Sandi-
nista counter-attacks and to
"bridge" the period between now
and when Congressionally-ap-
proved lethal assistance (beyond
the $25 million in "defensive"
arms) can be delivered.
The ultimate objective in the trip to
Tehran is to commence the process of im-
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proving U.S.-Iranian relations. Both sides
are aware that the Iran-Iraq War is a major
factor that must be discussed. We should
not, however, view this meeting as a ses-
sion which will result in immediate Iranian
agreement to proceed with a settlement
with Iraq. Rather, this meeting, the first
high-level U.S.-Iranian contact in five
years, should be seen as a chance to move
in this direction. These discussions, as well
as follow-on talks, should be- governed by
the Terms of Reference (TOR) (Tab A)
with the recognition that this is, hopefully,
the first of many meetings and that the
hostage issue, once behind us, improves
the opportunities for this relationship.
Finally, we should recognize that the Irani-
ans will undoubtedly want to discuss addi-
tional arms and commercial transactions as
"quids" for accommodating our points on
Afghanistan, Nicaragua, and Iraq. Our em-
phasis on the Soviet military and subver-
sive threat, a useful mechanism in bringing
them to agreement on the hostage issue,
has also served to increase their desire for
means to protect themselves against/deter
the Soviets.
RECOMMENDATION
That the President approve the structure
depicted above under "Current Situation"
and the Terms of Reference at Tab A.
Approve -- Disapprove --
(Unsigned, undated memorandum, "Release of
American Hostages in Beirut.")
The following "Terms of Reference" for a
"U.S.-Iran Dialogue" were attached:
1. BASIC PILLARS OF U.S. FOREIGN
POLICY
-President Reagan came into office at a
time when Iran had had a certain impact
on the American political process-perhaps
not what you intended.
-The President represented and em-
bodied America's.- recovery from a period.
of weakness. He has rebuilt American mili-
tary and economic strength.
-Most important, he has restored Ameri-
can will and self-confidence. The U.S. is
not afraid to use its power in defense of its
interests. We are not intimidated by Soviet
pressures, whether on arms control or
Angola or Central America or Afghanistan.
-At the same time, we are prepared to re-
solve political problems on the basis of
reciprocity.
-We see many international trends-eco-
nomic, technological, and political-work-
ing in our favor.
II. U.S. POLICY TOWARD IRAN: BASIC
PRINCIPLES
A. U.S. Assessment of Iranian Policy
-We view the Iranian revolution as a fact.
The U.S. is not trying to turn the clock
back.
-Our present attitude to Iran is not_ a
product of prejudice or emotion, but a
clear-eyed assessment of Iran's present
policies.
-Iran has used "revolutionary Islam" as a
weapon to undermine pro-Western govern-
ments and American interests throughout
the Middle East. As long as this is Iran's
policy, we are bound to be strategic adver-
saries.
-Support for terrorism and hostage-taking
is part of this strategic pattern. We see it
used not only against us, but against our
friends. We cannot accept either. Your in-
fluence in achieving the release of all hos-
tages/return of those killed (over time) is
essential.
-We see your activity in many parts of the
world, including even Central America.
-The U.S. knows how Iran views the
Soviet Union. But subversion of Western
interests and friends objectively serves
Soviet interests on a global scale.
-Thus, our assessment is that a decisive
Iranian victory in the war with Iraq would
only unleash greater regional instability, a
further erosion of the Western position,
and enhanced opportunities for Soviet
trouble-making.
-The U.S. will therefore do what it can to
prevent such a development. We regard
the war as dangerous in many respects and
would like to see an end to it.
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B. Possible Intersection of U.S.-Iranian Inter-
ests
-Despite fundamental conflicts, we per-
ceive several possible intersections of U.S.
and Iranian interests. I propose to explore
these areas.
-First, the U.S. has had a traditional inter-
est in seeing Iran preserve its territorial in-
tegrity and independence. This has not
changed. The U.S. opposes Soviet designs
on Iran.
-Second, we have no interest in an Iraqi
victory over Iran. [Discussion of US-Iraq
Relationship] We are seeking an end to
this conflict and want to use an improved
relationship with Iran to further that end.
-Third, we have parallel views on Afghan-
istan. Soviet policy there is naked aggres-
sion, a threat to all in the region. Our
mutual friends-China and Pakistan-are
threatened. We have ties with different ele-
ments of the Mujahideen. But our objec-
tive is the same: the Soviets must get out
and let the Afghan people choose their
own course.
C. U.S. Objective Today
-We have no illusions about what is possi-
ble in our bilateral relations. Perhaps this
meeting will reveal only a limited, momen-
tary, tactical coincidence of interests. Per-
haps more. We are prepared either way.
-In essence, we are prepared to have
whatever kind of relationship with Iran that
Iran is prepared to have with us.
III. SOVIET MILITARY POSTURE
-[Discussion of Soviet interests in Iran]
-Afghanistan illustrates the price the Sovi-
ets are ready to pay to expand areas under
their direct control.
-Summarize Soviet capabilities along
border and inside Afghanistan which could
threaten Tehran.
- U.S. is aware of Soviet activity in Balu-
chistan, air strikes.
-Iranian support to Sandinista regime in
Nicaragua aids and abets Soviet designs-
makes U.S.-Iranian relationship more diffi-
cult ($100 million in oil last year, plus
arms).
-U.S. can help Iran cope with Soviet
threat.
IV. AFGHANISTAN
-[Discussion of situation in Afghanistan]
V. HARDWARE
-We may be prepared to resume a limited
supply relationship.
-However, its evolution and ultimate
scope will depend on whether our conver-
gent or our divergent interests come to
loom larger in the overall picture.
-What does Iran want?
("Terms of Reference U.S.-Iran Dialogue,"
4/4/86) 64
Ghorbanifar conveyed the Iranian response
to Allen on April 8. He said "he had `good
news', asserting that an agreement had been
reached in accordance with Washington's
wishes." (C. Allen, "Conversation with [Ghor-
banifar]," 4/8/86) He claimed to be "working
the problem through Line One adherents, i.e.
those conservative elements within the Iranian
Government that are concerned over the Sovi-
ets and who do not believe that the clerics
should necessarily be in charge of all govern-
ment activities." (Id.)
During April, other activities, including the
strike against Libya, occupied the attention of
those responsible for the Iran operation.
84 Teicher prepared the draft terms of reference and submitted
it to North and Rodman, "and they worked on it." (Teicher 18)
On April 22, a United States Customs operation resulted in the
arrest of 17-18 arms dealers, including Ghorbanifar, allegedly
violating the embargo with Iran. Ghorbanifar was held only brief-
ly. (CIA/IG Chronology 22) On April 25, Charles Allen set forth
his own views as to the parties' desiderata. He thought the Irani-
ans urgently needed weapons; wanted a source of continuing
supply; a favorable end to the Iraq war; and "re-establishment of
their 'rightful place' and spread of fundamentalism," in that
order. He noted that the United States refused to supply HAWK
radars, which Iran has demanded, and had imposed a termination
date 2-3 weeks hence if the operation had not succeeded. He
thought that, unless the United States were "willing to sweeten
the pot, we can only stand fast and present to them the appear-
ance that time is on our side and not on theirs. This would re-
quire resolve on our part in the face of possible damage to one
or more hostages." The Israelis could solve the problem of con-
tinuing supply to Iran by the United States committing a sin of
ommission. (C. Allen, Working Paper, 4/25/86) Allen sent this
paper to North on April 26. (C. Allen 15; CIA/IG. Chronology
22)
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Progress toward the long-promised high-level
meeting with representatives of the Iranian
government was slow. On April 16, North
wrote Poindexter that:
Recognize that all are very busy. Have
been unable to get thru to you or Don
[Fortier] via phone/appointment. [C/NE]
and Gates have urged that Cave and North
proceed tomorrow to meet with [the Irani-
an official] and Gorba in Frankfurt on
Friday, and return to Washington on Sat-
urday. All this based on a series of phone
calls btwn Gorba/[the Iranian official];
North/Nir; Nir/Gorba; Allen/Gorba over
the last 72 hours.65 In order to arrive for a
Friday mtg Cave/North- wd fly out tomor-
row night to arrive Friday a.m. No deposit
has been made yet because Nir does not
want to risk losing the money if the oper-
ation is not going to go to closing.
He doesn't need the 240 parts. We have a
problem on our side in that over 50 of the
parts now do not appear to be in stock or
are no longer made for our version of the
system. Nir is checking in their older in-
ventories to see if they have them on hand.
Please advise soonest, must make reserva-
tions.
(North PROF note to Poindexter, 4/16/86,
16:40:45) Poindexter replied:
You may go ahead and go, but I want sev-
eral points made clear to them. There are
not be be any parts delivered until all the
hostages are free in accordance with the
plan that you layed out for me before.
None of this half shipment before all are
released crap. It is either all or nothing.
Also you may tell them that the President
is getting very annoyed at their continual
stalling. He will not agree to any more
changes in the plan. Either they agree fi-
nally on the arrangements that have been
discussed or we are going to permanently
cut off all contact. If they really want to
save their asses from the Soviets, they
should get on board. I am beginning to
65 The NSC staff and CIA officers involved in the initiative
learned at this time that the Iranian official's instructions to
Ghorbanifar were that, if the U.S. did not deliver all the HAWK
spares with the arrival of the U.S. delegation, only one hostage
would be released. It was presented to Ghorbanifar as a "take it
or leave it" proposition to the U.S.
suspect that [the official in the PM's office]
doesn't have much authority.
(Poindexter PROF note to North, copy to
Thompson, 4/16/86, 21:08:42)
The President said he had no knowledge of
the diversion prior to his conversation with At-
torney General Meese on November 25, 1986.
No evidence has come.to light to suggest oth-
erwise. Contemporaneous Justice Department
staff notes of North's interview with the Attor-
ney General on November 23, 1986, show
North telling the Attorney General that only
he, McFarlane, and Poindexter were aware of
the diversion.
North reported the last days' activities to
McFarlane on April 21.
Both Charlie Allen and Nir have been in
touch w/ Gorba in an effort to set up a
meeting with [the Iranian official] in
Europe. We know that [the Iranian official]
is apparently trying to extract additional
concessions from us prior to releasing the
Americans. George Cave, our resident
expert believes that [the Iranian official]
had probably received some kind of au-
thority to cause the release of the hostages
prior to our Libyan action and that, the
current delays and efforts to force new
concessions are a consequence of internal
disputes over what the Iranians shd do
about this matter in the wake of the U.S.
action in Libya. Gorba has been out of
touch all day and Cave/North cancelled
the trip to Frankfurt for a second time be-
cause we do not want to meet again w/
only, Gorba. The Kilburn tragedy has us
very concerned because there appears to
be some possibility of Syrian complicity in
Kilburn's death and the same could
happen to our other hostages if the Syrians
are able to put their hands on them.
If the mtg takes place this week it would
still be a minimum of eight and a maxi-
mum of 10 days from deposit of funds
before we can assemble the requisite parts.
We do not believe they will make this de-
posit until after the mtg. We also need to
make it known that we simply do not have
some of the parts requested since we have
modernized our HAWK systems. I have
sent Nir a coded msg asking him to deter-
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mine whether or not they have in stock the
items which we lack. If it is determined
that they do not have them we will have to
determine the effect this will have on the
understanding we reached last week w/
Gorba. Nir believes that the Israelis will be
able to give us an answer in the next 2
days. Cave and North are prepared to
lunch again tomorrow if Gorba surfaces
and has set up a mtg w/ [his Tehran con-
tact]. Bottom line: earliest timeframe for
RCM/Cave/North trip to Iran is 30 April
and this will slip a day for every day of
delay in the Frankfurt mtg & its comple-
mentary financial transaction.
(North PROF note to McFarlane, 4/21/86,
20:31:28) Poindexter transmitted North's note
to McFarlane and added the following cover:
[The Iranian official] wants all of the
HAWK parts delivered before the hostages
are released. I have told Ollie that we can
not do that. The sequence has to be 1)
meeting; 2) release of hostages; 3) delivery
of HAWK parts. The President is getting
quite discouraged by this effort.
This will be our last attempt to make a
deal with the Iranians. Next step is a
Frankfurt meeting with Gorba, [the Iranian
official], North and Cave. Sorry for the in-
convenience.
(Poindexter PROF note to McFarlane, 4/21/86,
20:31) McFarlane agreed with Poindexter's out-
line. "Your firmness against the recurrent at-
tempts to up the ante is correct," McFarlane
responded. "Wait them out; they will come
round. I will be flexible." (McFarlane PROF
note to Poindexter, 4/22/86, 20:35:17)
In North's view, the situation warranted con-
tinued pursuit of the meeting and consumma-
tion of the transaction. He received support
from Major Julius Christensen, a member of
the Director of Central Intelligence/Hostage
Location Task Force. On April 24, Christensen
sent North an analysis of options to secure the
release of the hostages. On balance, he con-
cluded that "the back channel initiative" could
succeed. But he noted that arms shipments
could affect the balance in the Iran-Iraq war
and that the longer the operation lasted the
greater the risk of exposure. He attached a
fuller analysis of the options-doing nothing,
diplomatic efforts, Waite, paying ransom, and
using force, unilaterally or multilaterally. He
looked to the NSC for guidance. (Christensen
to North, 4/24/86) In turn, North wrote Poin-
dexter on April 29:
We are seeing increasing evidence of
Libyan efforts to buy the hostages and
other signs of increasing disarray inside
Lebanon. Further, there is increasing indi-
cation of seepage around the edge of our
hostage project. Bottom line: [the Iranian
official] knows this and wants to proceed
quickly with a, release. [Available informa-
tion indicates that [the Iranian official]
does indeed have the requisite authorities
to bring this all to a conclusion. We are, at
this point concerned only that he may be
unable to proceed because of the two
radars issue and that the timing of their
delegation to Beirut should be such that
the delegation is already there by- the time
we arrive in Tehran-and that they not
wait to dispatch it until we arrive. Casey
and company believe that we have made
too big a deal over the radars issue noting
that they were proposed with the original
parts list and we should not be treating
them as separate items. They note that no
one else sees them as such and that I
should not have presented them as sepa-
rate items. They believe that we can order
them up from the normal logistics acquisi-
tion process that they have established with
the Army and that they will simply be de-
livered as they are made available. In any
event-all. here agree that Cave, North and
Nir ought to go to meet w/ [the Iranian of-
ficial]. Agency has prepared foreign Docu-
ments as necessary. If you approve, we wd
depart Thurs p.m. [May 1], commercial to
Frankfurt then to Tehran Friday via private
jet over Turkey. If you do not believe that
we can proceed with the radars I will try to
convince them to take what we have in
terms of parts and if necessary some of the
TOWs as acceptable alternatives. We know
... that Gorba has tried, unsuccessfully to
date, to convince [the Iranian official] that
this is the preferred course of action.
(North PROF note to Poindexter, 4/29/86,
19:46:06) According to the CIA Inspector Gen-
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eral, the NSC staff and CIA received word that
Iran would welcome a high-level American del-
egation to Tehran. (CIA/IG Chronology 22)
At this time, the Secretary of State again
heard that the operation had not died. While at
the Tokyo economic summit, Under Secretary
Armacost cabled a report from Ambassador
Price in London about Khashoggi's efforts to
interest Tiny Rowlands, a British entrepreneur,
in the transactions with Iran. Rowlands met
with Khashoggi, Nir, and Ghorbanifar. Nir out-
lined the plan, indicating that the shipment of
spare parts and weapons to Iran . . . Nir and
Khashoggi told Rowlands
[t]he scheme, moreover, was okay with the
Americans. It had been cleared with the
White House. Poindexter allegedly is the
point man. Only four people in the U.S.
government are knowledgeable about the
plan. The State Department has been cut
out.
(Armacost to Shultz (State cable), 5/3/86)
The Secretary of State recalled that:
That same day, I sought out Vice Admiral
Poindexter with the President's party, but
found Mr. Regan. That is, I got this in the
morning. We were in the midst of these
meetings. You know how they are. And I
read this thing.
So I am in one part of the hostel; the
President and his staff-Regan, Poindexter,
and so on-are in another part. So I just
marched over to their wing of the hotel to
find whoever I could find, and I wound up
finding Don Regan. Everybody else I could
not get to.
I told Mr. Regan and I showed him this-I
said that he should go to the President and
get him to end this matter once and for all.
I opposed dealing with people such as
those identified in the message and said it
would harm the President if the activity
continued.
Mr. Regan, I felt, shared my concern, said
he was alarmed and would talk to the
President.
I later learned that Vice Admiral Poin-
dexter reportedly told Ambassador Price
that there was no more than a smidgen of
reality to the story. "Smidgen" is his word.
When I got to him, I told Vice Admiral
Poindexter my feelings, but he did not
share my concerns.
He claimed that we were not dealing with
these people; that that was not our deal.
I told him the President was very exposed.
Soon thereafter I recall being told by both
Vice Admiral Poindexter and Mr. Casey
that the operation had ended and the
people involved had been told to "stand
down."
During this period [May 1986], I heard
from time to time of reports that the oper-
ation may have resumed-that is, through
the things that roll around on the grape-
vine. I heard nothing official to this effect,
however.
(Shultz, SRB, 53-55)
Ambassador Price also called Poindexter with
the same news. Poindexter wrote North a sum-
mary of the tale.
I told Charlie [Price] that there was only a
shred of truth in this and the US connec-
tion was highly distorted. Tiny told [Bob]
Frasure [on Price's staff] that he didn't like
the deal and did not want to get involved
unless it was an American operation. I told
Charlie to advise him not to get involved.
What in the hell is Nir doing? We really
can't trust those sob's.
(Poindexter PROF note to North, 5/3/86)
North replied at length, seeming to inform
Poindexter of the way the operation was fi-
nanced.
I agree that wecannot trust anyone in this
game. You may recall that nearly a month
ago I briefed you to the effect that Tiny
Roland [sic] had been approached and we
went back through Casey to tell these guys
that the whole thing smelled very badly.
We know that Khashoggi is the principal
fund raiser for Gorba and that only after
Gorba delivers a cargo does he get paid by
the Iranians. We do not believe that Tiny
is still engaged in this effort. Nir has been
told to stay off the skyline on the issue.
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The story you had relayed to you by Price
was the one made up by Nir to cover the
transaction and Clair George reported it to
us when the issue first came up several
weeks ago. At the bottom line, this typifies
the need to proceed urgently to conclude
this phase of the operation before there
are further revelations. We all know that
this has gone on too long and we do not
seem to have any means of expediting the
process short of going to Iran. In that
regard, George [Cave] and I are leaving to-
morrow at 0700 to meet with Gorba in
London. We intend to tell him that unless
a deposit is made by the end of the week,
the whole operation is off. We wd then
have Gorba call [his contact in the PM's
office] in our presence and have George
reinforce the criteria for proceeding: We
go to Tehran; within 24 hrs all hostages
released; 8hrs [sic] later we deliver the 240
parts; within 10 days we provide those
parts which cannot fit on the a/c. In return
we get to raise the issues of Nicaragua, no
more terrorism and help for the Afghan re-
sistance. This SEEMS to be what [the Ira-
nian official] has already said he has gotten
the "authorities" at his end to accept, but
we want to be sure before we,proceed.
Lord willing, Gorba will then make the
requisite deposit on Thursday, we will start
to assemble the cargo by Friday, and the
following weekend we will go to Tehran.
We all hope.
(North PROF note to Poindexter, ?5/5/86,
22:34:44)
North went to London on May 6. The
evening before, Poindexter instructed him: "Do
not let anybody know you are in London or
that you are going there. Do not have any con-
tact with Embassy . . ." (Poindexter PROF
note to North, 5/5/86)
Cave remembered that the first May meeting
set the stage for the trip to Tehran. Cave spoke
to the Iranian Prime Minister's office to fix the
arrangements. They haggled over what the
Americans would bring with them, the Iranians
asking for all the HAWK spare parts. Agree-
ment was reached on one-quarter-one pallet.
Ghorbanifar said
we would be meeting with the Prime Min-
ister, the President, Khameini, possibly Ha-
shemi Rafsanjani, and another well-known
conservative Ayatollah, named Ayatollah
Farsi. He was one of the original candi-
dates for president in the election when
Bani Sadr was elected President.
(Cave 8) Ghorbanifar informed the Americans
that financing had been arranged, and that he
would deposit funds "in an account controlled
by Mr. Nir. We eventually got the money in our
account on the 16th of May, and that was a de-
posit from General Secord into the account we
had in Switzerland, in Geneva." 66
Cave told the Board that the CIA had no idea
where the money went after Ghorbanifar made
the deposit into Nir's account, "nor do we have
any idea of how much was deposited." (Id. at 9)
When North returned to Washington, he
wrote Poindexter that
I believe we have succeeded. Deposit being
made tomorrow (today is a bank holiday in
Switzerland [May 8]). Release of hostages
set for week of 19 May in sequence you
have specified. Specific date to be deter-
mined by how quickly we can assemble
requisite parts. Thank God-He answers
prayers.
(North PROF note to Poindexter, 5/8/86,
8:07:46)
66 The transaction involving HAWK spare parts in May 1986
covered some 299 items worth $6.5 million. Iran was to have
paid $15 million. The financial arrangements followed the pat-
tern established for the February shipment of 1,000 TOWs. Kha-
shoggi raised $15 million from various financiers and deposited
the funds in the Lake Resources account on 14 May. CIA's Swiss
account was credited with $6.5 million on 16 May to repay the
Defense Department. The transaction was not completed. The
United States failed to deliver all the spare parts because Iran
failed to secure the release of all American hostages being held
in Lebanon. In reviewing price lists for what had been provided,
Iran discovered a substantial overcharge. By August, Tehran had
provided Ghorbanifar with only $8 million to repay Khashoggi,
leaving the Saudi $10 million in debt (the balance of the $15 mil-
lion advanced plus a 20 per cent "costs and financing" markup-
in this case $3 million). When the United States decided not to
use Ghorbanifar as an intermediary, Khashoggi had little pros-
pect to recover the rest of his money. All he held were unfunded
drafts from Ghorbanifar. When Khashoggi attempted, through
Roy Furmark, to obtain his money from Lake Resources, he dis-
covered that only $30,000 remained in the Lake account. An-
other $8.5 million was unaccounted for, leaving the amount for
diversion at .somewhat just short of $15 million (including $6.3
million unaccounted for from the February transaction). An addi-
tional $2 million was unaccounted for after the November 1986
shipment of 500 TOWs.
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C. Excursions: May 1986
The way was now clear for McFarlane to visit
Tehran. While planning the trip, other issues
continued to occupy the NSC staff. The United
States received information about Iranian ter-
rorist operations to be conducted against the
United States. Poindexter wondered if Ghor-
banifar should be reminded "that we thought
we had a committment [sic] from them on
future terrorist activity against US." (Poin-
dexter PROF note to North, 5/13/86, 19:08)
On May 15, North replied in two parts. First,
he noted that everybody shared Poindexter's
concern. Some members of the team thought
the Syrians had recruited important members
of Hizballah. Others, like Cave, blamed faction-
alism with Iran's ruling group.
Nir is already aware of this and intends to
note to Gorba that his $15M is at great risk
if one of these events does indeed happen.
Gorba is probably not the best interlocutor
on this matter and we wd stand a far better
chance talking directly to [the official in
the Prime Minister's office]. It wd be
worthy of some consideration to do just
that before we go all the way through with
the execution of what is now in motion.
Cave and North are still prepared to go if
you think it wd help. I do. So does George.
(North PROF note to Poindexter, 5/13/86)
North's second note informed Poindexter
that his wish had been carried out, and warned
of Ghorbanifar's having "penetrated" the CIA.
Nir and Copp are with Gorba. Both have
made points as you urged. In response,
Gorba has promised that every effort will
be made to stop unauthorized actions
being undertaken by Hizballah or Iranian
activists in the field. He has also provided
the following which was transmitted a few
minutes ago via Dick's secure device: "As
you remember fm London, Gorba suggest-
ed we get together with Howaldi Al
Homadi (or Hamadi) of Libya whom
Gorba claimed to be the head of internal
security and de facto number 2 man in the
country. Nir checked this in his records
and indeed Homadi is head of internal se-
curity and in key govt position plus con-
nection to terrorists abroad. . . . Homadi
does not believe that this is an effective
channel since FoMin is not well connected.
Homadi is willing to come to any point in
Europe to meet with North or other appro-
priate official without preconditions.
Homadi willing to deliver three things-no
more attacks against U.S.; work out sched-
ule to get terrorists out of Libya; to trans-
fer business contracts from EastBloc [sic]
to West. In return, Homadi wants to settle
misunderstandings btwn Libya and U.S. to
include some kind of mutual public expres-
sions. Willing to come anywhere in Europe
given one week's notice. Gorba says
Homadi sees himself as heir apparent to
Qadhafi, knows about USG plans to use
exiles for new Libyan govt; says it will not
work." END OF NIR MESSAGE FROM
GORBA.
There may or may not be anything to what
Gorba has said of Homadi wanting to meet
w/ North or other USG official. . . . I
have not passed any of this to any but you.
Nir has asked that we protect him and not
reveal his involvement in this to CIA. Nir
is, as you know, operating w/o Mossad
back-up and has considerable concern
about the CIA becoming more knowledge-
able about his activities. Based on what
Gorba has just told us, Nir has reason to
be concerned.
(North PROF note to Poindexter, 5/15/86,
21:36:09) "The CIA are really bunglers," Poin-
dexter replied. You had better pass most of
this to Casey directly. I would not pass it to
anybody else. Leave me out of it. We need to
think about a message to pass back to Homadi
thru Gorba next week." (Poindexter PROF
note to North, ?5/16/86) 67
In the course of informing Poindexter that
he had passed Ghorbanifar's information to the
Director of Central Intelligence and Clarridge,
North told Poindexter that the Nicaraguan re-
sistance
67 At this time, Poindexter became concerned that North's
"operational role" was becoming "too public. From now on," he
wrote, "I don't want you to talk to anybody else, including Casey,
except me about any of your operational roles. In fact you need
to quietly generate a cover story that I have insisted that you
stop." (Poindexter PROF note to North, 5/15/86, 21:21:58)
North replied on May 15: "Done." (North PROF note to Poin-
dexter, 5/15/86, 21:39:23)
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now has more than $6M available for im-
mediate disbursement. This reduces the
need to go to third countries for help. It
does not, however, reduce the urgent need
to get CIA back into the management of
this program. We can only do this by
going forward with the reprogramming
proposal and getting the requisite authori-
ties for CIA involvement. Unless we do
this, we run increasing risks of trying to
manage this program from here with the
attendant physical and political liabilities. I
am not complaining, and you know that I
love the work, but we have to lift some of
this onto the CIA so that I can get more
than 2-3 hrs of sleep at night. The more
money there is (and we will have a consid-
erable amount in a few more days) the
more visible the program becomes (air-
planes, pilots, weapons, deliveries, etc.)
and the more inquisitive will become
people like Kerry, Barnes, Harkins, et al.
While I care not a whit what they say about
me, it could well become a political embar-
assment for the President and you. Much
of this risk can be avoided simply be cover-
ing it with an authorized CIA program un-
dertaken with the $15M. This is what I was
about to say in the meeting today 68 and a
point that I believe Shultz does not under-
stand in his advocacy of Third [sic] country
solicitation. I have no idea what Don
Regan does or does not know re my pri-
vate U.S. operation but the President obvi-
ously knows why he has been meeting with
several select people to thank them for
their "support for Democracy" in CentAM.
In short, we need to proceed with the
$15M. Shall I work this up?
(North PROF note to Poindexter, 5/16/86)
Poindexter authorized North to prepare a
paper "for the $15M reprogramming." (Poin-
dexter PROF note to North, 5/17/86) He
added: "I understand your concern and agree.
I just didn't want you to bring it up at NSPG. I
guessed at what you were going to say. Don
Regan knows very little of your operation and
that is just as well." (Id.) When North suggest-
ed that, before departing for Tehran, he and
Poindexter have a quiet meeting with the Presi-
69 An NSPG on aid to the Nicaraguan resistance was held on
May 16. North attended.
dent and McFarlane, without papers, and that
Poindexter might want to include the Secretar-
ies of State and Defense and the Director of
Central Intelligence, Poindexter responded
negatively: "I don't want a meeting with RR,
Shultz and Weinberger." (North PROF note to
Poindexter, 5/19/86; Poindexter PROF note to
North, 5/19/86)
D. Tehran: May 25-28, 1986
Notes made by the NSC Executive Secretary
indicate that at the daily national security brief-
ing on May 12, 1986, VADM Poindexter dis-
cussed with the President the hostages and Mr.
McFarlane's forthcoming trip. The notes indi-
cate that the President directed that the Press
not be told about the trip. Notes made by the
Executive Secretary on May 15, 1986, indicate
that the President authorized Mr. McFarlane's
secret mission to Iran and the Terms of Refer-
ence for that trip. Those notes indicate that the
trip was discussed again with the President on
May 21.
After the President approved the trip,69
Poindexter relied on North to make arrange-
ments. At the same time, he kept informed and
made his views known. North's first plan re-
quired that the delegation stay in Israel for
most of the weekend, May 23-25, and that
Poindexter approve a request for aircraft.
(North PROF note to Poindexter, 5/19/86,
12:03) Poindexter had
problems with this plan. An a/c request is
too closely linked to what is happening. I
don't see how we can use a military a/c.
Why do you have to stay so long in Israel?
I had in mind you would travel separately,
RDVU [rendez-vous] in Israel at a covert
location, and proceed to Iran.
69 According to both the Maximum Version and Historical
Chronology, the President approved the trip on May 15. (Maxi-
mum Version 7; Historical Chronology 11) McFarlane told the
Board that, in his view,
the President was very moved by the hostage captivity, and that
is purely speculation. But I know that that was terribly impor-
tant to him.
t t ?
[The President met with the hostages' families] almost every
time he took a trip. I remember one to Dallas, Indianapolis,
Chicago, on separate occasions. And there would be a family
or two, and they would come in and he'd meet with them, and
it would be a very anguishing kind of a thing.
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(McFarlane (1) 30)
(Poindexter PROF note to North, 5/19/86)
Late on May 19, North prepared a detailed
plan
We will endeavor to do it any way you
want but we are experiencing significant
logs [logistics] problems which are consid-
erably eased by the use of a military a/c
which can deliver the people, communica-
tions equipment (classified SATCOM, bea-
cons, etc.) and still provide a modicum of
rest. The present plan includes the A/C as
a part of the OPSEC in that RCM has
reason to use such an A/C.... The same
applies to a lesser extent to RCM. The fol-
lowing sched is what is driving us:
Weds; May 21
1000-Copp dep for final sched mtg w/ Gorba
1000-240 Items arrive for final packing/sani-
tizing by CIA.
Thursday; May 22
1000-240 items + 508 TOWs moved fm to
Kelly AFB by CIA
1400-Commercial 707 (# 1) arrives Kelly to
load most of 240 items
30-Copp arr. Geneva
1700-Commercial 707 (# 1) Dep Kelly for
Israel w/ bulk of 240 items aboard
45-North Dep Wash. for London
2000-Copp Dep Geneva for Israel w/ 707
Special Crew for IAF 707 via Lear Jet.
Friday; May 23
0100-G-3 Dep Andrews w/ Cave, Teicher,
CIA communicators (2) plus equipmt
0200-G-3 P/U RCM at Laguardia [sic]
(speech that evening in NYC)
0230-Copp arr. Israel w/ 707 Spec Crew
1400-G-3 w/ RCM arrive Gatwick; P/U North
1400-Commercial 707 (#2) Dep Kelly AFB
w/ 508 TOWs for IDF enr Israel
1400-Commercial 707 (# 1) An Israel w/bulk
of 240 items; commence xfr to IAF 707s
prior to commencement of Sabbath.
Saturday; May 24
0800-G-3 w/ RCM; communicators & party
arrive Israel-start rest period
1700-Commercial 707 (#2) Arrives w/ 508
TOWs & remainder of 240 items; com-
plete xfr of 240 items to IAF 707s after
sunset (end of Sabbath)
2200-IAF 707 (#A) w/ Copp special crew &
RCM party dep Israel enr T.
2200-bulk of 240 items transloaded fm Com-
mercial 707 (#2) tp IAF 707 (#B).
Sunday; May 25
0830-RCM & party on IAF 707 (#A) arrive
T. prepared for mtgs.
Monday; May 26.
0800(?)-U.S. parties turned over to CRS or
ICRC in Brt. [Beirut]
1000-IAF 707 (#A) Arrive T. w/ bulk of 240
items.
In the plan above all times are local. As in-
dicated in earlier discussions we have had
on this matter every effort is being made
to preserve OPSEC. Because of real world
constraints on what can fit in the a/c we
will load part - of the 240 on 707 # 2 and
they will be handled separately when they
arrive in Israel w/ 508 IDF TOWs. We
have tried to compartment the whole effort
at . . . Kelly AFB so that no two work
shifts at either location has a clear picture
of what is being loaded out via the two
commercial 707s. The same thing applies
to the 707 aircrews (3 of them) which we
are providing for this mission. No one
crew knows about the other, nor will they
see each other. For example, the crew that
is going out with Copp to fly the IAF 707
(# A) w/ RCM & party does not know
about the two 707s arriving fin Kelly. The
only part of this operation that we are not
doing ourselves is the CIA comms, bea-
cons and documentation for the party.
ALL other arrangements have been made
through Copp or affiliates and if we have
to, I suppose we can arrange to fly RCM
and the communicators out on their own.
Quite frankly, however, I do not see the
vulnerability of using a military G-3 which
will considerably ease our clearance prob-
lems given the hour of the day/night in
which we are moving. We now have, I be-
lieve, a G-3 (or two) available which do
(does) not have the usual USA marking on
the side. Finally, the length of stay in Israel
is not, in my opinion excessive, given the
rather reigorous [sic] schedule we are at-
tempting to accomodate. We are being
driven by Sabbath requirements in Israel,
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Ramadan in T. and an awareness that the
situation for our four in Beirut looks more
desperate by the day. In an effort to ad-
dress all of these competing and conflict-
ing concerns (to include the availability of
commercial 707s, cleared special mission
crews, and the peculiar demands of low
profile work schedules at . . . Kelly AFB
and in the IAF) we have had one hell of a
circus. In short, the use of a military G-3
would provide a much needed respite from
the havoc of trying to answer all of these
issues all over again without further risking
OPSEC. It can be done, but it would be
much better if we did not have to.
(North. PROF note to Poindexter, 5/19/86,
23:00:07)
Poindexter then wondered about using a CIA
aircraft: what did the Director of Central Intel-
ligence use when he travelled. (Poindexter
PROF note to North, 5/20/86) North replied
that CIA aircraft in the United States lacked the
necessary range, and available CIA proprietary
aircraft were overseas and lacked certificates
necessary to fly in the United States. The Di-
rector of Central Intelligence used military air-
craft, but that option, North wrote, "is in the
realm of too hard." He proposed "to make
other arrangements." (North PROF note to
Poindexter, 5/20/86, 10:38:12) Poindexter
noted that
It is not that it is too hard; I just don't
think it is a good idea. Leaks at this point
could be disastrous. This is different from
other secret missions in that anybody that
knows anything (or thinks they know some-
thing) connected with this mission will be
sorely tempted to talk about it afterwards if
it is successful. Let me know what you
work out.
(Poindexter PROF note to North, 5/20/86,
14:10:03) Later on May 20, North sent Poin-
dexter another schedule and itinerary for the
delegation:
This further re transportation arrange-
ments for RCM & party: Cave + Teicher
+ Communicators will depart IAD aboard
Private (Democracy INC.) G-3, stops in
NYC to p/u RCM. G-3 Proceeds direct to
Rhein Main military airfield, cleared thru
customs by CIA . . . North . . . picked up
in London by Lear 35 owned by Democra-
cy INC. European subsidiary. Lear 35
drops North at commercial side of Rhein
Main, North passes thru customs/immigra-
tion as Goode, proceeds to military side to
rvs [rendez-vous] w/ RCM party. RCM
party on arrival at FM offloads from G-3,
transloads to CIA 707 (if available) or to
chartered Swiss Challenger a/c for direct
flight to Tel Aviv. Still having local point
clearance problems for bringing G-3 into
RM w/o customs/immigrations clearances.
We are going to have to bring . . . Frank-
furt into this to work out clearances. Will
talk to him tonight via PRT-250 @ approx
0300. Slid have answer shortly thereafter
... today provided recommended turnov-
er points for hostages. We have sent one
of our Democracy INC couriers to deliver
flight schedule and turnover info to Gorba
in London. Gorba scheduled to go to
Tehran on Thursday [May 22]. Copp de-
parture for Geneva/Tel Aviv postponed 24
firs fm original schedule in order to com-
plete coordination of RCM flight planning.
Norta [sic] still on schedule to depart
Thurs pm for . . . London. Complete ops
plan and annexes being prepared for yr
use during op. Will prepare in advance
necessary paperwork and cables for dis-
patch of Hostage debrief team, Nighten-
gale Medevac support and hospitalization
alert for Wiesbaden-all of which wd be dis-
patched only when hostages are released.
Will also have required checklist for alert-
ing State to notify families, move same to
Europe for reunion. OPLAN includes three
sets of press guidance-appropriate to var-
ious circumstances which could occur on
mission.70 Finally, need guidance as to
whether or not you want to prede-
ploy. . . . It wd be good insurance if
things get screwed up during/after turnov-
er of hostages-particularly if turnover
does not result in hostages being brought
all the way to our embassy. All involved
believe it is unlikely that Iranians can get
them this far with or without help from
70 Press guidance prepared covered the release of the hos-
tages, the discovery of the mission to Tehran, and the holding of
the delegation hostage. (North to Poindexter, "Hostage Recovery
Plan," 5/22/86)
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Hizballah. Most likely is release at one of
the few Western Embassies remaining in
W. Beirut or at AUB Hospital. We also
suggested the Military Hospital crossing on
the green line as a possibility. At the after-
noon planning mtg [C/NE] suggested that
we look at the Finding again to determine
whether we can sell certain items of hard-
ware to IRAQ in concert w/ what we are
doing in Iran. He believes that such a step
wd add considerably to our leverage in the
area if this activity is uncovered by the
Sovs. I share his concern. Far too much is
being said over the open telephone by
Gorba for them to be completely ignorant.
Finally, we have several policy issues which
need to be addressed.
-RCM should be able to suggest to
the Iranians that we are willing to put
a permanent Comms unit (2 CIA) into
Tehran to facilitate future exchanges
of information - w/o a middle man/
[sic]
-What do we do if they can only
spring one two or three of the hos-
tages after making a good faith effort?
-What do we do if, after 72 hrs, noth-
ing happens?
These are the kinds of things I had envi-
sioned for discussion in the private mtg w/
RR. At the very least, you slid talk to RCM
about these things, preferably face to face.
While we all expect this thing to go peachy
smooth, it may not. RCM, is taking no
small risk in this endeavor just flying
around the way we will have to. He doesn't
have to take this kind of chance. I know
that everyone is very busy, but it wd, in my
humble opinion, be thoughtful if you can
find a few minutes to discuss the issues
above w/ him and say good by. While I'm
confident he'll be back next week, I could
be wrong and it might be a very long time
before anyone sees him again.
(North PROF note to Poindexter, 5/20/86,
15:37:49) In the afternoon of May 22, North
submitted to Poindexter an updated schedule
for the trip. It did not materially differ from the
versions prepared on the 19th and 20th.
The updated schedule was part of a package
of materials North prepared. It included an
"Operations Plan," which defined the objective
as: "To secure the return of four American
hostages [Jenco, Anderson, Jacobsen, and Suth-
erland] who continue to be held by Hizballah
elements in Lebanon." (North to Poindexter,
"Hostage Recovery Plan," 5/22/86, Tab I,
"Operations Plan") The "Concept" was: "Pro-
vide incentives for the Government of Iran to
intervene with those who hold the American
hostages and secure their safe release." (Id.)
The CIA was responsible for delivering "sup-
plies" to Kelly Air Force Base; providing an in-
terpreter, communicators and their equipment,
and travel documents; providing an intelligence
briefing package, with photographs; "[f]und
maintenance and test/calibration of two Phase I
radars at Letterkenney, PA. Investigate avail-
ability of two Phase II radars from DOD/FMS
channels"; provide a communications schedule,
including frequencies; recommend site and
conditions for the release of the hostages in
Beirut. "Democracy Inc. Charter" was to pro-
vide two Boeing 707s to transport "supplies"
from Kelly to Tel Aviv. "Democracy, Inc."
would provide two vetted crews for the Israeli
aircraft; a Swiss Air Learjet to transport Secord
from Geneva to Tel Aviv on May 22; a
"CANAIR Challenger for delegation airlift
from Dulles to Ramstein AFB on Friday, May
23;" and six Blackhawk .357 magnums in pres-
entation boxes. Secord would act as liaison by
secure communications between the CIA/NSC
and the delegation. The Israelis were to pro-
vide funds for 508 TOWs (to replenish Israeli
stocks after the August/September 1985 trans-
fers, (CIA/IG Chronology 24)); two black 707
aircraft for transport to Tehran; and a "liaison
officer" to the American delegation.
NSC responsibilities constituted the longest
list. They included the senior emissary; liaison
with the White House; contingency press guid-
ance; and arranging for the debriefing of hos-
tages and the reunion of families, among other
details. The Defense Department's role consist-
ed of providing equipment and supplies
"through intermediaries," transport for the
hostage reception team and transportation in
connection with the release of the hostages.
The delegation would carry alias passports.
There would be no rehearsal. (Id.) The sched-
ule noted that McFarlane would board a CIA
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proprietary 707 at Ramstein for the trip to Tel
Aviv.
North's package also included "Terms of
Reference" for the delegation. It had been
printed at various times since the draft of April
4, but had undergone no material change since
then. The "Terms of Reference" were boiled
into an outline and talking points for the dele-
gation.
The day North submitted his package,
Ledeen saw Peter Rodman, Deputy Assistant to
the President for National Security Affairs (For-
eign Policy). Rodman wrote Poindexter that
Ledeen
urge[d] that we use our Iranian channels as
a vehicle for stirring up dissidence within
Iran, rather than for (as he puts it) cutting
deals involving arms for hostages.
Mike says his contact Gorbanifahr [sic] has
access and influence with a dissident
Ayatollah . . . as well as with disloyal ele-
ments spread throughout the military and
the bazaars. There is great potential here,
Mike feels, for a U.S. covert program to
undermine the regime. He claims that both
Bill Casey and Bud agree with this, and
that it's a perfect program for Dewey Clar-
ridge's operation.
The obstacle, he says, is that we are follow-
ing an alternative approach that is too
much hostage to the hostage problem.
I said nothing to Mike, but I have to say
that I have long had a similar concern that
we might be gearing our policy too much
to the hostage issue rather than to the stra-
tegic menace that the regime represents.
The special one-page finding of a few
months ago put the hostages in a properly
subordinate place among our objectives-
but in practice our approach seems to re-
quire a hostage release as an early token of
good faith....
Perhaps this is something for you to dis-
cuss with Casey, with Bud, and with
Ledeen.
(Rodman to Poindexter, 5/22/86)
McFarlane recalled that Poindexter asked
him to attend a briefing on the trip in the last
week of May.
I was asked by the Admiral to come by and
get my instructions that he said had been
approved by the President-these were
about four pages-the political agenda.
Here are the political issues that you
should develop and they dealt basically
with our view of our interests in the
Middle East, our view of Iranian conflicts
with us and disagreements, basically-ter-
rorism, the continuity of the war, the ex-
pansion of fundamentalist influence in
other moderate regimes in the area, and,
separately, our view of their vulnerabilities
to the Soviet Union and our sense of mile-
stones for dealing with specific issues that
might over time get us toward a more
stable relationship.
And I asked again. I said, is the Secretary
of State and Defense, DCI, the President
all on board with this. He said, well, they
are involved in the preparation of these in-
structions. He said that, and they are in-
volved in this decision, yes. The President
has approved it. And then these instruc-
tions. The positions haven't changed. The
Secretary of State is against the arms com-
ponent of it, as is the Secretary of Defense.
(McFarlane (1) 33-34) McFarlane had the sense
the instructions represented an NSPG "prod-
uct." He was not aware that his aircraft would
carry military equipment to Iran until he ar-
rived in Tel Aviv. (Id. at 34)
McFarlane's delegation-McFarlane, North,
Cave, Teicher, Nir, and a CIA communicator-
left Tel Aviv for Tehran on May 25. Secord
and one communicator remained in Tel Aviv.
According to Cave, the Israeli government
pressed for Nir's participation, and McFarlane
ultimately decided to include him. (Cave 10)
The aircraft carried a pallet of HAWK spare
parts, which was loaded in Israel. The delega-
tion also carried a chocolate cake from a kosher
bakery in Tel Aviv - "more of a joke than any-
thing else between North and Ghorbanifar."
(Teicher 10)
McFarlane sent Poindexter two reports of the
meetings; Teicher made detailed memoranda
of conversations. McFarlane's first cable report-
ed:
Delegation arrived Tehran Sunday morn-
ing. Absence of anyone to receive us for
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over an hour and recurrent evidence anxie-
ty ineptitude in even the most straightfor-
ward discourse makes it clear that we must
take a step back from the history of the
past 8 years and put our task in a different
light.
It may be best for us to try to picture what
it would be like if after nuclear attack, a
surviving Tatar became Vice President; a
recent grad student became Secretary of
State; and a bookie became the interlocu-
tor for all discourse with foreign countries.
While the principals are a cut above this
level of qualification the incompetence of
the Iranian government to do business re-
quires a rethinking on our part of why
there have been so many frustrating fail-
ures to deliver on their part. The other
reason for the several snafus has been the
extreme paranoia that dominates the think-
ing of the political leadership here. More
about this later. First let me debrief the
meetings that have been held before giving
you a sense of where and how fast matters
can progress.
Once matters were sorted out at the air-
port, we were met by Gorba and [the offi-
cial from the Prime Minister's office] taken
to the Hilton Hotel and installed in the top
floor along with considerable security (CI)
people from their side. After a short rest
we convened our first meeting at 1700
local Sunday afternoon. It was a founda-
tion session in which we established that
we acknowledged the Iranian revolution;
had no interest or intention in trying to re-
verse it; indeed believed that a strong in-
dependent, non-aligned Iran was in the
U.S. interest but that such a situation was
unlikely to be possible in our judgement
for a number of reasons. First, it seemed
clear to us that the Soviet Union was pre-
pared to go quite far to prevent an Iraqi
defeat in the war and may well have ambi-
tions vis a vis Iran that we would be
pleased to discuss during our talks. For
our part, we can envision restoration of a
normal relationship with Iran but not
under circumstances in which they work
against our interests
WHETHEPPj$i.u#ERRORISM [?whether
by support of terrorism] or support for
subversion of our interests in Nicaragua
and elsewhere.
Our interlocutors were [officials in the Ira-
nian Prime Minister's l office]; Gorba and
one other functionary.
Their response to all this was on the whole
expressed in a spirit of good will. "We are
open to a stable relationship with the U.S.
but it will not be easy to overcome a bitter
history etc etc" but in a larger sense the
central message to us was how uncertain,
fearful and timid these third and fourth
level officials were. Further, it has become
more and more clear that while Gorba has
brought us to the beginning of a dialogue
with the GOI, he has done it with consid-
erable hyperbole, occasional lies and dis-
sembling. Our interlocutors' defensiveness
was expressed through a diatribe about
how we hadn't brought enough supplies
and thus were acting in bad faith. This was
easily rebutted and they were put on the
.defensive regarding their failure to
produce on the hostages but it made clear
the need to get beyond their level if we are
to do any serious business here. The meet-
ing ended on a harmonious note. They
asked that we propose an agenda for
today's meetings. We did so last night; ba-
sically an abbreviated statement of the
TOR paper I reviewed before leaving.
[page cut off] brought with us. We recalled
them later in the evening and in no uncer-
tain terms . let them have it for Iran's
breach of faith and insolent behavior that
we expected to be corrected forthwith.
This morning, after apparently consider-
able internal to and fro on their side,
[name deleted] was dispatched to apolo-
gize and to say that they wanted the meet-
ings to succeed. (Late entry: beginning
with our arrival and frequently since Gorba
has continued to say "The hostages will be
released and things are going in the right
direction and don't worry" and other rhe-
torical irrevelancies.) [name deleted] also
said that their leaders had designated an
official with higher authority than they to
come to meet with us this afternoon
(Monday). I made clear that if he was
coming to spend needless time discussing
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the supplies or other forms of niggling that
he could do so with the staff.
He arrived at about 9:45 tonight and lasted
until just about 1:45 Tuesday morning. As
it turned out this man [a senior foriegn af-
faris advisor] was a considerable cut above
the bush leaguers we had been dealing
with. In the course of the 4 hour meeting
it became evident that the three Iranian
leaders-Rafsanjani, Musavi (Prime Minis-
ter) and Khamenei (President) are each
traumatized by the recollection that after
Bazargan met with Brzezinski in the Spring
of 1980, he was deposed (so strong was
popular sentiment against doing business
with the Great Satan). Today the force of
events and self interest has brought them
to the point of realizing that we do have
some common interests (vis a vis the Rus-
sians, Afghanistan and perhaps even
against Iraq.) But they still cannot over-
come their more immediate problem of
how to talk to us and stay alive. But from
the tenor of this last man's . . . statements,
conviction and knowledgeable expression
of what is possible in the way of a stable
cooperative relationship, I believe we have
finally reached a competent Iranian offi-
cal-and that's good.
Nevertheless we cannot, in my judgment
be swooned by serious dialogue without
acts. Thus I did not meet with this man as
a firm signal that although we have come
to set iur motion a sustained process, we
must first set aside a number of obsta-
cles-notably by the release of the hos-
tages. This was forcefully stressed to
[name deleted] tonight and we have re-
ceived throughout the day periodic reaffir-
mations that steps are in motion, we are
working on it, don't worry etc. etc. etc.
With that in mind, when he comes back to-
morrow to go discuss-the agenda, I
intend to have him meet with the staff with
perhaps an intervening summons for him
to come visit with me to try to set some
specific milestones for moving ahead.
These would include: 1. An end to the ex-
treme rhetoric on both sides (although we
will call it as it is if there is a recurrence of
terrorism against us) 2. The establishment
of a. communications capability between us
full time as soon possible. 3.. The position-
ing on the ground here a technical expert
to get us away from these endless ex-
changes of requests for items they don't
need.
With regard to the hostages we have and
will continue to make clear that their re-
lease is the sine qua non to any further
steps between us. And if that has not hap-
pened by tomorrow night, they are aware
that we will leave and that the balance of
this shipment will not be delivered nor will
any change to our stance be considered.
As to my judgment on where we stand, it
seems clear that we are dealing with
people at the top who: 1. Understand that
they have an important interest in trying to
establish a dialogue that leads to a meas-
ure of cooperation with us. 2. That doing
so requires that they deliver on certain
kinds of behavior e.g., release of the hos-
tages and no further terrorist acts against
us. 3. Are very fearful for their own vulner-
ability to factional attack if they are discov-
ered in this dialogue before they can con-
dition the people to a different perception
of the U.S. 4. Are trying to run a country
with almost no competent officials below
the very top and need help.
So we are on the way to something that
can become a truly strategic gain for us at
the expense of the Soviets. But it is going
to be painfully slow. As we proceed we
cannot be gulled by promises of what will
happen tomorrow-at bottom they really
are rug merchants. But little by little we
can make progress because it is a matter of
self interest for both of us to do so.
I will give you a more thoughtful fill to-
morrow after our meetings-it is now 3:35
a.m. local. I feel that we have entered a
sensible process and finally gotten a com-
petent interlocutor on the other side. If
you have any special instructions before we
meet tomorrow please let me know. Hope
you had a nice weekend. Your guys are
doing a fantastic job as is Cave and the
communicator who is near death.
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MEMORANDUM OF CONVERSATION
SUBJECT: U.S. - Iran Dialogue
PARTICIPANTS:
U. S.
Robert C. McFarlane
Oliver L. North
George Cave
Howard R. Teicher
Israel
Amiran Nir
Iran
[A Deputy Prime Minister]
[Assistants to the Prime Minister]
DATE: May 25, 1986
PLACE: Tehran, Iran, Independence Hotel
TIME: 5:15 p.m.
[The Iranian official] opened the plenary
meeting. He said he was very happy to see
the U.S. delegation here. Hoped this will
be a useful trip with good results. Ex-
pressed regret for inconvenience at the air-
port. "Ready to begin negotiations and
talks." After introducing his colleagues
[the Iranian official] said the main purpose
of this meeting is to prepare an agenda for
other political discussions.
McFarlane expressed on behalf of the Presi-
dent his pleasure to be in Iran to start
what the U.S. hopes will be sustained dis-
course. McFarlane made the following
opening statement: "The President asked
that I portray for your leaders U.S. goals,
the basis of disagreements, and try to find
common ground for cooperation. Perhaps
I could propose a format for our ex-
changes. First a session for an exchange on
fundamental issues. In such a session we
could present our goals, the nature of the
peace we seek in the M.E. and more broad-
ly. We could then turn to how we see our
responsibilities vis-a-vis the USSR, and
what we see as important to U.S. security
interests in other parts of the world. We
can also describe how we see the history of
U.S.-Iranian relations going back 10 years.
In these talks, on bilateral matters, we
would hope to make clear that the U.S. ac-
cepts the Iranian Revolution and has no
wish or presumption of influencing it in
any fashion."
McFarlane stressed "the U.S. hope that
from this day forward, the U.S. and Iran
can proceed where interests converge. No
doubt there are elements of Iranian policy
that the U.S. will disagree with. But it is
important we understand the disagree-
ments." After a general discussion of the
global and bilateral agenda, McFarlane sug-
gested that it might be useful for experts
to exchange information, e.g., nature of
Soviet intentions and capabilities in this
part of the world. "I'd like to stress some-
thing *at the beginning. Obviously we've
had disagreements over the past eight
years. But the U.S. recognizes that Iran is a
sovereign power and we should deal on
the basis of mutual respect, not intimida-
tion. That's why before we begin high-level
talks we put behind us hostage-taking
which has occurred in the past. We are
pleased that informal talks resulted in
agreement on release of American hos-
tages. Once that is completed we can begin
serious talks. I want to stress our apprecia-
tion for your hospitality, especially during
Ramazan [sic]. All of us are pleased to be
here. This can lead to an historic new be-
ginning."
[The Iranian official] replied that "he
wanted to lay a groundwork regarding cer-
tain issues before meetings begin. This
revolution was totally depending on God,
independent Iranian power and unique
ideology. These factors allowed this revo-
lution to come into being. This revolution
came to power because for years the
nation was under dictatorial pressures.
These pressures contributed to the revolu-
tion's success. I am sure you can feel how
the nation and people think after so many
years under pressure. Iran can now act
freely. What do you expect from them now
that they are free? I want to express a very
important point. This revolution cost much
blood. After so much blood, the people
don't want hostility directed against them.
The leader and the people expressed their
will to look forward, not to the past. The
key question to the past eight years may
help explain why our relations were not
good. We have a famous saying "Past is a
mirror for the future." It is not the time to
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discuss what went wrong over past five
years, but I want to emphasize a few
points. We don't want to align with East or
West, but that doesn't mean we don't want
relations. Iran had relations with the
U.S.A. at first. But refuge for the Shah and
interference in our internal affairs dam-
aged relations. U.S. refuge for the Shah
was bad but your military action was a
demonstration of hostile intent. All the
points combined led to break in confidence
in U.S.G. To rebuild bridge of confidence
will take time. We are moving toward this
goal. Best proof and reason we are moving
is informal meetings and your presence
here in Iran. You know better than anyone
that your presence here is most important
development in this process. Believe we
will reach this goal by fulfilling the neces-
sary steps that have already been agreed
to. I didn't want to review the past but I
needed to mention the background."
Turning to the agenda, [the Iranian offi-
cial] said he needs to make the agenda
clear for Iranian leaders. "The first item
should be U.S. goals in the area. The basic
priority is to build a bridge of confidence.
Both Iran and the U.S. must build confi-
dence and trust. Once bridge of confi-
dence is established then other priorities
can be addressed and solved. We expect
from you that the U.S. will supply physical
support to Iran. U.S. support will be with
us. This is best way to build confidence.
For the U.S.A. to demonstrate that it is
with Iran."
McFarlane welcomed climate of [the Irani-
an's] remarks. Bodes well for talks. "We
agree that we should take advantage of cer-
tain measures that were agreed in the in-
formal talks. Regarding the commitment of
the U.S. to turn a page, this is expressed
by my presence on behalf of the President.
The corresponding commitment on the
part of your government to put the past
behind us is to use your influence to
secure the release of captive Americans.
They are not held by Iran but the captors
are also subject to Iranian influence. Final-
ly as an earnest showing of our good faith,
we are prepared to transfer certain items
which may be of assistance. We have
brought some of these with us. In virtually
all cases we could handle via aircraft. If
not, other items will follow as this se-
quence evolves. Perhaps we could start dis-
cussions tomorrow morning on goals. At
the conclusion of this discussion, we could
have specialized sessions on the Soviet
Union and Middle East situation."
[The Iranian official] specified Soviet in-
tentions, Afghan issues, Lebanese affairs,
Middle East peace, Iran-Iraq war, Kurdis-
tan. "What is your view about Iraq? It's
regime?"
McFarlane said, "We are prepared to dis-
cuss all of those issues. Let us begin with a
long session where we can make summary
comments on each topic. Then later, when
talking about Soviet capabilities, perhaps
experts could meet. But the general threat
and how to meet it can be done in a gener-
al session. In order to have clarity we can
write out the agenda tonight."
[The Iranian official] changed the subject,
stating that "for humanitarian reasons we
have acted on your hostages. But we ex-
pected more than what came on the air-
craft."
McFarlane answered that we could not
bring it all on the plane. But the rest can
be brought forward.
[The Iranian official] reiterated the human-
itarian dimension, noting that ["]Iran did
not take these people captive."
North expressed U.S. gratification for Iran's
humanitarian assistance. He asked what
Tehran wants the U.S. Government to say
about Iran's role. The U.S. does not want
to embarrass Iran. But if the Iranian gov-
ernment would be served by a U.S.G.
statement it can be made. "We hope this
will happen in next few hours."
[The Iranian official] said that Iran took
this step as a humanitarian act. "We start-
ed the process, but cannot forecast when it
will happen. We can discuss this affair
later. We expect anyhow to receive more
items from you so that we will be in a
better position with our leaders. I want to
make this point very clear. Iran has been at
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war for six years. Fao was a great accom-
plishment. We are expecting more equip-
ment."
McFarlane stated that the agreement which
was concluded will be fulfilled to the letter.
"A bridge of confidence is a useful meta-
phor. I have come as an expression of
good will. In addition to my own presence,
we put items on the aircraft which can be
brought forward. The corresponding act
on your side, a humanitarian gesture, in-
volves the release of our people. While
separate and not related, these acts do
contribute to mutual confidence. You have
my word, the bond of my country, that we
will fulfill our agreement."
[The Iranian official] replied that "what
Iran expected is not here, but as a humani-
tarian gesture, Iran will send a delegation
to Beirut to solve that problem while ex-
pecting Iranian logistics needs to be met."
He emphasized that no one knows about
the McFarlane team's presence in Tehran.
The Air Force is suspicious since someone
is still on the plane. [The Iranian official]
suggested that he stay at the hotel instead.
McFarlane said, "we can't do that. Although
his presence on the plane may complicate
suspicions, he performs communications
functions as well as logistics accountability.
We can give instructions for him to stay
out of sight."
[The Iranian official] said there is no prob-
lem with communications. But having him
staying on board is a problem because he's
at the military airfield.
McFarlane stated that "we need communi-
cations all the time. Otherwise there is no
way to communicate with the President."
[The Iranian official] stressed there is a se-
curity problem with Air Force questioning.
Turning back to substance, McFarlane said,
"this is a good beginning. We do have
much to do and very little time." He
argued that the U.S. team's presence here
should be kept brief for security.
[The Iranian official] opined that "every-
thing depends on good will and restored
confidence. But there are some things
which cause doubt. We were told that one-
half of the equipment would be brought
with McFarlane. You did not bring one-
half. This behavior raises doubts about
what can be accomplished."
McFarlane forcefully interjected to end the
Iranian official's protests. "Let's be clear. I
have come. There should be an act of
goodwill by Iran. I brought some things
along as a special gesture. So far nothing
has happened on your side. However, I am
confident it will."
[The Iranian official] apologized, stressing
that he and his colleagues are not decision-
makers. "We just give you a message and
take your message. But we told our leaders
that you would bring one-half of the
items." S9307
North noted that the aircraft has weight and
fuel limitations.
[The Iranian official] commented that
some of the spare parts are used.
Angrily, McFarlane replied that "I have
come from U.S.A. You are not dealing with
Iraq. I did not have to bring anything. We
can leave now!".
[The Iranian official] said that "We prom-
ised things to higher authorities regarding
one-half of the items we purchased. Could
you have told us it would only be one-
fourth due to technical flight require-
ments? Now we will have internal prob-
lems."
[The Iranian official] stated that this prob-
lem can be solved in parallel with the other
problem. A special delegation has already
left to deal with the humanitarian problem.
"We have all done what we should do. We
respect our guests' need."
The meeting concluded at 7:00 p.m.
PARTICIPANTS:
U. S.
Robert C. McFarlane
Oliver L. North
George Cave
Howard Teicher
Israel
Amiram Nir
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Iran
[A] Deputy Prime Minister
Assistant to the Prime Minister
DATE: May 26, 1986
PLACE: Tehran, Iran, Independence Hotel
TIME: 3:30 p.m.
North stated that "we are confused and
concerned. We have tried for months to
come to a point where we could talk gov-
ernment-to- government. Some in our gov-
ernment opposed. McFarlane favored. I
was convinced that necessary arrangements
had been made. We received President
Reagan's permission to proceed. We have
now been here for over a day and no one
will talk with us. Where are we going?
Nothing is happening."
[The Iranian official] replied that he won-
dered "why we came to this situation. We
were both happy last night. Why are you
now confused? We are working to make
things happen. We have similar problems
with our people, but don't see any insur-
mountable problems. I understand McFar-
lane is unhappy about something. I want to
see McFarlane."
North spoke privately with McFarlane who
agreed to see [the two Iranian officials] at
3:30. The meeting resumed at 3:30 with
McFarlane. [The Iranian official] stated he
is at McFarlane's service to solve his prob-
lems. "I want to remove obstacles. Sorry, I
want to solve problems, misunderstand-
ings, so they won't be repeated."
McFarlane said he was pleased to hear that
[the Iranian official] was committed to
solving problems. "My purpose in coming
was to establish a basis of trust and after
that to address important problems. Before
coming, my President and I believed pre-
liminary problems affecting mutual trust
were resolved by the staff. On your part,
bringing about the release of hostages. On
our part, providing some defensive sup-
plies. But upon arriving, I learned that the
steps had not been taken by your govern-
ment. That is disappointing. The more im-
portant purpose is to share with your Min-
isters how to restore a basis of trust be-
tween us. There are crucial matters related
to the Soviet Union, Afghanistan and Iraq
that we should discuss. But we cannot
begin to address these matters until pre-
liminary problems are solved. Perhaps your
government is not ready to deal with these
larger issues. Maybe we should wait for an-
other day. But I must depart tomorrow
night. I would like to meet with your Min-
isters. But I cannot if preliminary problems
have not been solved. I have no more to
say."
[The Iranian official] said, "We seem to be
moving in a positive direction. I hope we
will overcome these problems. Yesterday
we mentioned the Air Force problem. We
are only concerned over leakage. There is
no problem sending someone to the plane
whenever they need to. We thought it un-
derstandable that you would go back and
forth to communicate. On top of every-
thing else, you are our guest and we re-
spect our guest on top of all else. The
delay at the airport was due to your early
arrival. Our main problem is that we
cannot inform staffs. Regarding your gifts,
we held them for security reasons. We will
bring them back now, same as passports.
The delay is due to the difficult effort
needed to make everything work out. At
4:00 p.m., a gentleman with higher author-
ity will be here."
McFarlane repeated that "there are impor-
tant things to discuss about the future. But
this entire visit will surely provide us with
indications of your commitment and good
faith. So far the experience has not been a
happy one. I am here to deal with larger
problems. As soon as problems you are
working on are solved, I am prepared to
meet with your Ministers. No other meet-
ings are necessary."
[The Iranian official] said he had no au-
thority to decide on these matters. The im-
portant authority will arrive at 4:00. McFar-
lane said he would not meet the person. He
came to meet with Ministers. The staff can
meet this other person.
[The Iranian official] argued that the Irani-
ans were having problems trying to ar-
range a Ministerial meeting. "We have to
build up to that stage."
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McFarlane said he did not want to interfere
with [the Iranian official's] problems.
"Work with my staff."
[The Iranian official] said his government
had now appointed a high authority to
follow up. This will help to open the stage.
McFarlane expressed his great disappoint-
ment. "We understand it takes time to
make a decision to renew a dialogue with
the U.S. But I must return to Washington
tomorrow night. The preliminary problem
in Lebanon must be overcome. I hope
your Minister will come to my country next
year. He will be received by my President.
As I am a Minister, I expect to meet with
decision-makers. Otherwise, you can work
with my staff."
[The Iranian official] said at the start of re-
lations, there are always misunderstand-
ings.
McFarlane agreed, wishing the Iranians
"good luck."
The meeting was ended at 4:00 p.m.
PARTICIPANTS:
U. S.
Oliver L. North
George Cave
Howard Teicher.
Israel
Amiram Nir.
Iran
Senior Foreign Affairs Advisor
Assistants to the Prime Minister
DATE: May 26, 1986
PLACE: Tehran, Iran, Independence Hotel
TIME: 9:30 p.m.
[The Foreign Affairs Advisor] said he was
very pleased to welcome the delegation in
Tehran.
North stated that "we have a great opportu-
nity to establish a relationship between our
countries. There is a long history of unfor-
tunate relations which cannot be forgotten
in a minute. Men of good will have a
chance to build a bridge of confidence. We
may be able to work toward a common
goal. Hope you've seen the proposed
agenda. It provides a basis for discussion
between our leaders. There is a technical
agenda as well. All contribute to this great
opportunity. I explained our respective
commitments and the process to the Presi-
dent. Perhaps we came prematurely, with
our hopes too high. Our hope was to
remove certain hurdles to a better relation-
ship. We understand it is hard for both our
countries. But we have acted in good faith.
The key is in your hands. It is not easy to
turn that key. Misunderstandings have oc-
curred. We have put them aside."
[The Foreign Affairs Advisor] said "you
did a great job coming here given the state
of relations between. us. I would be sur-
prised if little problems did not come up.
There is a Persian saying: Patience will
bring you victory-they are old friends.
Without patience, we won't reach anything.
Politicians must understand this."
North thanked [the Foreign Affairs Advi-
sor], noting that this shows the value of
being able to talk. "There are factions in
our governments that don't want some-
thing like this to succeed. This is why
McFarlane grew angry when things didn't
take place as I suggested they would. He
took a risk urging our President to do this.
There is great opposition to this project.
We have to be able to show progress, not
for personal reasons, but for the future.
This is not a deal of weapons for release of
the hostages. It has to do with what we see
regarding Soviet intentions in the region.
We accept the Iranian revolution and re-
spect your sovereignty. Some people want
to ensure that our countries find a
common foundation for the future."
North continued that there are areas of
agreement and disagreement. "What we
had hoped was to agree on the direction
for a dialogue between Iran and the U.S.
Political decisions will be required. We
may not agree this week or year. But this
process must begin. It can begin in total
secrecy, with certain non-political actions."
[The Foreign Affairs Advisor] asked wheth-
er the U.S. can keep a secret?
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North said "We will try. But one of the
greatest liabilities is a lack of secure com-
munications."
Nir said there are ideas on this problem. It
is a subject for technical discussions.
North offered to show the Iranians a device.
"We can secretly put someone here. We
know the Soviets are trying to find out
what we are up to. We know the Soviets
know a little bit about this and are trying
to find our more. They will make a major
effort to expose us. Our major hope is to
pacify this opposition through techncial
[sic] measures. If your government can
cause the release of the Americans held in
Beirut, 10 hours after they are released, air-
craft will arrive with HAWK missile parts.
Within 10 days of deposit, two radars will
be delivered. After that delivery, we would
like to have our logistics and technical ex-
perts sit down with your experts to make a
good determination of what is needed. We
need a technical survey. It must be done
very secretly. However, if we go home
without setting aside obstacles, there will
be new obstacles."
[The Foreign Affairs Advisor] asked which
obstacles?
North replied, "The release of the U.S. citi-
zens. You said it was difficult for us to
come here. We also know it was difficult
for you to invite us."
Nir said that the back and forth on arms
has tested the patience of the President.
Hostage release is important as demonstra-
tion of Iranian influence and good will.
[The Foreign Affairs Advisor] asked to
hear about the U.S. perception of th Soviet
threat.
Teicher summarized the Soviet military pos-
ture and threat around Iran. There are 26
divisions. The military districts in the
Trans Caucasus have been reorganized and
improved. Exercise activity has intensified
with respect to military action against Iran.
The Soviets are increasing the frequency of
their cross-border strikes into Pakistan and
occasionally Iran, while initiating a terror
campaign in Pakistan. He stressed the im-
portance of beginning a dialogue on the
Soviet Union for both Iran and the U.S.
[The Foreign Affairs Advisor] said, "there
are training camps for Mujhadeen in Iran.
Weapons and logistics support are provid-
ed. We are ready to send troops into Af-
ghanistan. The Russians already complain
about Iranian bullets killing Russians."
North asked if it would help to provide the
Mujhadeen with TOWs?
[The Foreign Affairs Advisor] said the
T-72 is not the best weapon against the
Mujhadeen. Gas, napalm, and other crimi-
nal actions are their biggest problem. One
million innocent victims. "Primary difficul-
ty is not TOWs, though, we can cooperate
with you in this area. The chemical warfare
equipment is too developed. We need help
curing wounded. Many die due to lack of
first aid. Do you have anything more to say
about Russians.?"
Cave said we have eight hours worth of
briefing materials.
[The Foreign Affairs Advisor] said he was
ready for a detailed intelligence briefing,
and agreed to the agenda without change.
"We are ready to listen in all areas.
Though we know we won't agree in every
area, we will agree on some subjects. We
have to bring up some subjects from the
past, around the revolution. We don't need
to discuss what came before. We believe
that the United States Government from
1356 (one year before the revolution)
made mistakes against all peoples. Our
own belief is that our revolution is greater
than the French or Russian Revolutions.
There have been more changes. Today we
feel many in the third world are thinking as
revolutionaries like us."
"You see many pictures of Khomeini in the
Afghan trenches,["] [the Foreign Affairs
Advisor] continued. "He is their leader.
We see the Imam's picture in South Africa,
Lebanon, and West Africa. There are pro-
tests in Marrakesh. We didn't send this pic-
ture in the mail. We have no relations with
Morocco that would allow us to give them
the Imam's picture. The influence of this
revolution has passed to many Moslems.
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Islamic countries express themselves hon-
estly. But there is bad propaganda against
us in America and Europe. We have been
victimized by more terrorism than anyone
else. The President, Prime Minister, Minis-
ter of justice, 10 percent of Parliament,
clerics,. and innocent, have all been killed
by terror. What the Afghans are doing is
not terrorism. But we don't call action in
South Lebanon against Israel terror."
"We are against kidnapping," [the Foreign
Affairs Advisor] said. "What happened
here was exceptional. Because of one ex-
ceptional act we should not be considered
terrorists. When we turn to the subject of
our relations, there are many serious
things to say. We saw past U.S. leadership
trying to destroy all the bridges of confi-
dence. We did not start confronting you.
This was not the clergy, army, jor [sic]
party. It was the people. In such a revolu-
tion, there is no law and order. Not one
drop of American blood was spilled one
year after the revolution. American military
advisors took. all their belongings, as well
as things they should not have taken. The
memoirs of Ambassador Sullivan show it
was a mass revolution. But the U.S. sup-
ported Bakhtiar, who confronted us harsh-
ly. We do not accept that. We did not see
you sitting alone doing nothing. If there is
only one other country in the world
against the Soviets, it is Iran. We have a
famous saying: Enemy of your enemy is
your friend. You don't see it this way. Be-
cause we are neither east nor west, you are
both pulling us. Neither the U.S. nor the
Soviet Union likes independent states."
[The Foreign Affairs Advisor] said, "I am
sorry to be so harsh. But I need to be
frank and candid to overcome differences.
We have the same problem that you have.
Some here oppose relations with the U.S. I
am happy to hear you believe in an inde-
pendent sovereign Iran. We are hopeful
that all American moves will be to support
this dialogue. But we feel the whole world
is trying to weaken us. We feel and see the
Russian danger much more than you. You
see the threat with high technology. We
feel it, touch it, see it. It is not easy to
sleep next to an elephant that you have
wounded. To weaken Iran does not mean
the Soviets want Iran. It means they want
to reach the warm waters of the Gulf. Our
Gulf neighbors know this. We share thou-
sands of kilometers of land and water
border. If we are weakened, you can fore-
cast what will happen."
After a pause, [the Foreign Affairs Advisor]
continued, "When we accepted your team
with McFarlane, it symbolized a new politi-
cal development here. But there has been
a misunderstanding. When we accepted his
visit, it did not mean a direct dialogue
would occur on the spot. It is too early at
this stage."
The discussion adjourned for a watermel-
on break. Detailed discussion resumed
over difficulty of spare parts delivery. [The
Iranian official] said he would try to ar-
range for an Iranian 747.
[The Foreign Affairs Advisor] resumed the
discussion of bilateral relations. "Our rela-
tions are dark. They are very bad. Maybe
you don't like to hear it, but I must be out-
spoken. The Iranians are bitter. Many Ira-
nians call America the Great Satan. The
first revolutionary government fell because
of one meeting with Brzezinski. As a gov-
ernment, we don't want to be crushed to-
morrow. We want to stay in power and
solve these problems between us. We
should not insist on special issues or a
Ministerial meeting. There was no agree-
ment that when McFarlane led the team it
would lead to Ministerial meetings. Let us
turn the key in a way that will work. We
don't see the release of hostages as the
key. You all must know that establishing
this dialogue is the greatest challenge.
China, Russia, Lebanon are easy. If you
wanted formal meetings, McFarlane would
have been received differently."
North stated that he had told McFarlane
that he would meet Speaker Rafsanjani,
Prime Minister Mousavi, and President
Khameini. "I was told this would happen,"
North said. McFarlane and Kissinger made
three trips to China to set up meetings for
the President.
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[The Foreign Affairs Advisor] asked why
was McFarlane promised there would be
Ministerial meetings?
North repeated that Ghorbanifar, in
[George Cave's] presence, had stated that
the U.S. team would meet with the senior
leadership.
[The Iranian official] interjected that it had
been previously agreed that North would
come to Tehran to make arrangements and
set the agenda. But North did not come.
"We did not mention McFarlane. The last
phone call did not mention Ministerial
meetings. We did not agree to such meet-
ings for McFarlane. We keep our word."
[The Foreign Affairs Advisor] said the Ira-
nian side wants to solve the whole prob-
lem. "Iran does not just want to discuss
spare parts. I want to state clearly, we do
not encourage terror. Even the Imam offi-
cially condemned skyjacking. We accept
that we have influence in Lebanon. Many
Islamic groups in Lebanon respect the rev-
olution. We sent a man to Lebanon. We
are very hopeful that we can help you and
solve this problem. By solving this problem
we strengthen you in the White House. We
are waiting for an answer. As we promised,
we will make every effort. We are working
right now. We hope to get you news about
the situation tomorrow. We will finish the
job without waiting for the other parts. Re-
garding the agenda, we are willing to dis-
cuss all the items you proposed, especially
where we have mutual interest. Afghani-
stan, the Soviets, Iran-Iraq War, Lebanon.
We are ready to discuss. We have some
objections to your positions on some of
these issues. I have been appointed to rep-
resent Iran in this dialogue. I hope this will
be a good start."
North asked whether [name deleted]
thought it was possible to convince those
who hold the Americans to release them?
"I answered you," [the Foreign Affairs Ad-
visor] replied. "They're difficult to deal
with. But anything we start we are hopeful
about."
North said if that succeeds, the other air-
craft and other things would be delivered.
"Can a secret meeting be arranged with
McFarlane and your leaders?"
[The Foreign Affairs Advisor] said he
would have to wait or come back. "You
can be sure that this will be conveyed. But
10 days is so early. We believe that after
the hostages are free and the deliveries
completed, there will need to be more
positive steps."
North argued that he did not believe we
should further the relationship with give
and take. [The Iranian official] got bad
advice. Some of the parts Iran asked for it
does not need. "Why do you need twenty
radars? You should fix your radars rather
than buy new ones."
Nir said, "we need to deliver a system that
would allow both sides to exchange techni-
cal data, advice, and information. A long-
term system is required. Such a develop-
ment can only be agreed at the top."
[The Iranian official] said Nir was right.
But North said the U.S. already knows
what is needed.
[The Foreign Affairs Advisor] said Iran
worries about the Russians. "They have
missiles that can reach Tehran, as well as
high altitude jets. You can't compare qual-
ity and quantity of our weapons. But the
will of the Iranian people is greater than
the Soviet people. I myself have a sister
with two sons who were martyred in the
war. One body was not even found. Two
others are handicapped. All four were vol-
unteers. I have a young brother who was
not accepted as a volunteer. He took his
older brother's ID when he returned from
Ahwaz. Martyrdom is great. We congratu-
late the family of martyrs with congratula-
tions and sorrow. During Ramazan we ask
God to let us be a martyr if we are to die.
Ramazan is the night of fate and power.
Russians sell their rifles and prisoners for
cash. Such a Russian can't fight an Iranian.
But if we try to get such technology to
strike them they will not fight. Islam tells
us to be strong to prepare to fight. Mil-
lions of Soviet Moslems listen to our influ-
ence. Many believe the Imam is their
leader, not Gorbachev. They are real Mos-
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lems. Secret groups in the Soviet Union
print the Koran and distribute it. Their
heart is- on this side of the border. If we
put aside nuclear power, we don't think
Russians will take advantage of Iran. Of
course everything is possible with these
people."
[The Foreign Affairs Advisor] continued,
"We appreciate and want to discuss every-
thing with you. There is $2.5 billion deal.
No one knows what it is. Rafsanjani said
officially Iran is ready to buy weapons from
America. This was a very positive state-
ment. We really find more confidence and
trust in our discussions. We hope in this
way we can have a general dialogue before
we come to the technical level. We want
TOWs, especially with technicians. Easier
to operate than MILAN. We would appre-
ciate your advice on F-14/phoenix and har-
poon missiles. You know how our people
face you in public. When the spare parts
come on a large-scale, the public will natu-
rally know where they come from. The Air
Force, land forces, Pasdarans will see. But
they don't need to know about the dia-
logue, etc. Naturally, after some of this
movement, our leaders could meet and
accept this change officially. We rule on
the basis of the people. We respect our
people's will. This is our policy. The
people hear the Parliament. Three sessions
a week. We have to prepare the people for
such a change. Step by step. We need to
prepare the nation. Meetings between U.S.
and Iranian leaders will take place publicly
in this context. If you are serious about
solving problems, I am sure official trips
and high-level meetings will take place.
The Imam has said we are ready to estab-
lish relations with all the world except
Israel. But you have to remove the obsta-
cles. This is why we are ready to discuss
the agenda as you gave it with some
changes. Speed up what has been agreed.
You are a real superpower. I hope you
don't mind being a superpower. You have
much more capability. A few 747s can
carry a lot in one day. We would be very
pleased to discuss our specific needs."
Teicher asked why the meetings cannot take
place now. "Rafsanjani has acted and
spoken in a way that indicates Iran could
benefit from a dialogue. [The Foreign Af-
fairs Advisor] just stated that the Imam
said Iran is ready to establish relations with
all the world except Israel. What is the
problem?"
[The Foreign Affairs Advisor] explained
that the leadership is affected by people
and influences people. It is an interactive
condition. "It's not whatever the Imam
says. His word is accepted because he talks
from the heart of the people. This is why
the leadership of Iran is not something
dogmatic. It is not a dictatorship, religious
or otherwise. The leadership depends on
wisdom of public opinion. After death of
Brezhnev, Iran sent a delegation. The lead-
ership was attacked by the nation for this
act. No one went out to Chernenko's fu-
neral. If you are serious, everything can be
solved."
North said, "The U.S. wants to help Iran so
others won't attack it. We need to work to
broaden this understanding. I will urge
McFarlane to meet with [The Foreign Af-
fairs Advisor]. He doesn't always take my
advice. Such is the fate of all advisors."
North also asked the Iranian delegation to
consider whether Iran would want the U.S.
Government to express appreciation to
Iran if four Americans go free.
[The Iranian official] said, "Understanding
can lead to action."
[The Foreign Affairs Advisor] proposed re-
convening at 10:00 a.m. on May 27 to
review the agenda. "We should keep the
Iranian experts out for now to keep the
numbers small. Let us keep it political. We
can decide later if experts are to be includ-
ed. That agenda may be different. We will
decide on a framework to implement what
we agree to and how to establish secure
communications. That will require high-
level agreement."
The meeting ended at 1:50 a.m.
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PARTICIPANTS:
U. S.
Oliver L. North
George Cave
Howard R. Teicher
Iran
[Senior Foreign Affairs Advisor]
[Assistants to the Prime Minister]
DATE: May 27, 1986
PLACE: Tehran, Iran, Independence Hotel
TIME: 10:00 a.m.
North expressed the U.S. team's gratitude
that discussions can be continued. He
noted that he had recommended that
McFarlane meet with [the Foreign Affairs
Advisor].
[The Foreign Affairs Advisor] said there
was some news about the hostages. "We
heard early. But I felt you were sleeping.
There is a development which requires a
decision. Our messenger in Beirut is in
touch with those holding the hostages by
special means. They made heavy condi-
tions. They asked for Israel to withdraw
from the Golan Heights and South Leba-
non. Lahad must return to East Beirut, the
prisoners in Kuwait must be freed, and all
expenses paid for hostage-taking. They do
not want money from the U.S. Iran must
pay this money. We told them these condi-
tions must be reduced. We can't make this
work. We are negotiating. We are ready to
pay for humanitarian reasons. We are ne-
gotiating other conditions. We are hopeful
these negotiations will succeed."
[The Iranian official] complained that
"only a portion of the 240 spare parts had
been delivered. The rest should come.
This is an important misunderstanding."
(McFarlane called [the Foreign Affairs Ad-
visor] down to his suite at this point in the
discussion.)
North said, "The U.S. would provide the
additional items on [the Iranian official's]
list to the extend [sic] we can as soon as
possible if they're still made. As soon as
possible relates to funding. Even with
countries where we have formal military
ties, our law requires prior payment."
[The Assistant to the PM] opined that
"many things are not written in law. In the
same way we can finance your hostages
you can find a way to finance our pur-
chases."
Teicher explained how the U.S. Government
sells military , equipment, especially the
interaction between the Congress and the
President. "Our current sales to Iran are
not following normal procedures and
cannot be routinized."
Nir asked whether it might be agreed that
"since the U.S. Government cannot deliver
without advance payment and Iran cannot
pay in advance, we will examine mid-term
financial arrangement possibilities, such as
Ghorbanifar and oil deals?"
On this note, the discussion broke up into
separate lengthy corridor talks. After the
Iranians departed, around noon, McFar-
lane stated that [Foreign Affairs Advisor]
understood what steps Iran must take to
restore U.S. confidence. But he referred to
some sort of documents or letters held by
Ghorbanifar. No member of the U.S. team
was aware of these letters. McFarlane had
emphasized that he must shortly leave, and
that an opportunity for improved relations
was being wasted. McFarlane said he would
draft a MEMCON of his one-on-one dis-
cussion.
Lunch was served at 12:30 p.m.
Please deliver the following message from
Robert McFarlane to-Admiral Poindexter
as soon as possible.
I have just completed a three hours one on
one meeting with . . . the official desig-
nated by Rafsanjani/Musavi and Khamenei
as their spokesman and whom I mentioned
in my first cable which you received this
morning.
It was a useful meeting on the whole. I say
that in the sense that I was able to present
a thorough foundation brief of our pur-
poses and priorities internationally with
specific explanation of our goals and inten-
tions in the Middle East generally and with
specific regard to Iran. I made clear that
regarding Iran we sought a relationship
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based upon mutual respect for each other's
sovereignty, territorial integrity and inde-
pendence; that we believed in non inter-
vention in the affairs of all states (and ex-
pected them to do the same thing). I then
developed a brief of our sense of the
Soviet objectives in the Middle East which
are to expand its influence so as to ulti-
mately be in the position to disrupt the re-
source flows of the area and exploit its ge-
ography for self interest. It's instruments
for achieving these goals are the radical
Arab states. . . . The Soviets would go to
considerable length to prevent Iraq from
losing to Iran, for if they did lose, Soviet
credibility would be catastrophically dam-
aged in the area. We would expect the So-
viets to give Iraq all the support they
needed and if this were not enough, then
they would pressure Iran directly with mili-
tary force.
I went on to explain that our policy re-
mained to seek an end to the war and not
to favor victory by either side; in their case
since we were concerned for what their
larger purposes were in the Middle East.
On the surface they appeared to us to be
determined to expand their influence
through the spread of Islamic fundamental-
ism, relaying (sic or sp) on the use of ter-
rorism to achieve their purposes. Conse-
quently, I stated that they should under-
stand that we were not prepared to give
them a level of arms that would enable
them to win the war.
That said, however, we were prepared to
enter a dialogue to determine where there
might be common interests and that Af-
ghanistan appeared to be a leading case in
point. We would also want to discuss Nica-
ragua (and their support for the Sandinis-
tas) as well as Lebanon.
Finally, I proposed a specific work pro-
gram to try to inject a little momenium
[sic] into the process. As a first item, I pro-
posed that both sides lower the rhetoric
toward the other (although we would con-
tinue to call it as we saw it if terrorist acts
were committed against Americans by Ira-
nians). As a second measure, I proposed
that we commit now to a sustained political
dialogue in an effort to bridge differences
here [sic] possible (even though some dis-
agreements would remain eternal). This
meeting should be secret but could take
place within two weeks either here in
Tehran or in a third country or in the U.S.
Finally, I stated that since the Russians
were no doubt monitoring the telephone
calls that had been the basis of bringing us
to this point, it would be wise to take
direct secure means of communications
and that could be done very easily. I also
stated that while we could not envision
providing a significant level of arms, that
we might consider having a technician visit
and remain on site to help them get more
from what they have (as you know he lis-
tened attentively and then responded in
low key fashion. Stressing that there are a
number of areas where we have fundamen-
tal disagreements but also a number of
areas where there are common interests.
He went through the areas of disagree-
ment but in a rather pro forma fashion. He
then got to the clincher-their efforts to
free the hostages in Lebanon. He reported
that Hizbollah had made several precondi-
tions to the release: 1. Israeli withdrawal
from the Golan; 2. Israeli withdrawal from
Southern Lebanon; 3. Lahad movement
into East Beirut and 4. some (undefined)
to pay the bills the hostages have accumu-
lated. How's that for Chutzpah!!! He hur-
riedly added (before I unloaded on him)
that "these demands are not acceptable
and we are negotiating with them and be-
lieve that the only real problem is when
you deliver the times we have requested."
I responded that I was glad to hear that his
government wanted to solve problems and
set a political dialogue in motion but that I
had to say that the other matters he had
stated led me to believe that such a dia-
logue would never get started at all. I then
explained for him the history of how we
have reached this point (bearing in mind
that he has been getting only the Gorba/
[Tehran contact] versions). I then carefully
recounted how in the course of the past
year, we had negotiated agreements only
to have them altered at the last moment or
delays imposed which had led to an ex-
tremely high level of frustration on the
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part of the President and that he had only
reluctantly agreed to this meeting under a
very clear and precise understanding of the
arrangements. I then went over in detail
what those arrangements were: 1. The U.S.
would send a high level delegation to
Tehran. They would bring with them a
portion of the items they had requested
and paid for (which we had done). 2. Upon
our arrival, they had agreed to secure the
release of the hostages promptly. 3. Upon
release of the hostages to our custody, we
would call forward the balance of items
that had been paid for and those that had
not been paid for would be dispatched as
soon as payment had been received.
At this point he became somewhat agitated
wanting to know just who had agreed to
these terms. (I fingered Gorba and [his
contact in the Prime Minister's office]). He
stated that these were not the terms as he
understood them. The basic difference was
that they expected all deliveries to occur
before any release took place. I stated
firmly that while misunderstandings
happen, I was confident that it had not
been our side for we had two witnesses to
the agreement. More importantly, however,
regardless of misunderstandings, there was
simply no latitude for altering the agree-
ment at this time. Due to the tortured his-
tory I had recounted, the President had
reached his limit of tolerance and that this
visit was the last attempt we would make.
My instructions were to return tonight to
Washington. I stressed that we were pre-
pared to call the other aircraft forward as
soon as we received word that the hostages
were released and even to do so within a
couple of days after we had left if they
were not released tonight but there was no
possibility of changing the terms.
He was obviously concerned over the very
real possibility that his people (Gorba and
[his Tehran contact] had misled him and
asked for a break to confer with his col-
leagues. I agreed noting that I had to leave
tonight. (Actually, I don't have to leave to-
night but recognizing that we have been
here for three working days and they have
not produced I wanted to try to build a
little fire under them.) Right now they are
under the understanding that we will all be
leaving. They asked whether I could leave
anyone behind and I said no.
Separately the rest of our delegations had
been meeting to go over a letter that they
had drafted which purported to show what
we had agreed to in Frankfurt. This had
been discussed last night as well, with
Gorba basically, convincing an increasingly
uncomfortable [Iranian official] that our in-
terpretation was surely plausible to him.
Ollie, Cave and Nir are all confident of
their ground but understand the probabili-
ty that Gorba or [the Iranian official] or
both oversold their accomplishment.
At this point it is hard to know where this
will lead. We have heard nothing from
Beirut-have you? I tend to think we
should hold firm on our intention to leave
and in fact do so unless we have word of
release in the next six or seven hours. I
can imagine circumstances in which if they
said tonight that they guarantee the release
at a precise hour tomorrow we would
standby, but not agree to any change in
the terms or call the aircraft forward.
Please convince [sic] this to the President
and we will proceed as directed. My judg-
ment is that they are in a state of great
upset, Schizophrenic over their wish to get
more from the deal but sobered to the fact
that their interlocutors may have misled
them. We are staying entirely at arms
length while this plays out. We should hear
something from them before long! Howev-
er, when you get word it may be best if
you call me on the prt 250-Bob Earl can
arrange it for you.
Warm regards to all.
PARTICIPANTS:
U. S.
Robert C. McFarlane
Oliver L. North
George Cave
Howard R. Teicher
Israel
Amiram Nir
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Iran
[Senior Foreign Affairs Advisor]
[Assistants to the Prime Minister]
DATE: May 27, 1986
PLACE: Tehran, Iran, Independence Hotel
TIME: 5:00 p.m.
[The Foreign Affairs Advisor] began the
discussion with a report from Beirut. "The
last contact with our man in Lebanon re-
ported that he was able to eliminate three
demands: the withdrawal of Israel from the
Golan, South Lebanon and the transfer of
Lahad to East Beirut. The people who
hold the hostages believe they can solve
the world's hunger problem! We will solve
the money problem. The only remaining
problem is Kuwait. We agreed to try to get
a promise from you that they would be re-
leased in the future. The only problem is
that the men here are not in agreement.
These documents are in Ghorbanifar's
handwriting. This is what I told you about
this morning. If there has been a mistake
in our agreement, it is not our fault. Maybe
Ghorbanifar made a mistake. The problem
is very simple. The only thing to discuss is
what comes first and what comes later. The
intentions of the two groups, based on
what's written here, leads me to believe
that agreement should be possible. I think
we can come to a final agreement since
you are an important person in your coun-
try. We, like you, want to solve this prob-
lem and get on with it."
McFarlane said it is apparent the Irani-
ans are making a determined effort to
bring this problem to a conclusion. "I
am grateful. This spirit, if it had been
present in our first encounter, would
have made clear we could reach some
agreement. Unfortunately, we have
reached this point after a year and
three efforts where we thought we had
an agreement. This has affected the
President's view of our ability to reach
an agreement. He kept trying due to
his belief that there were larger prob-
lems we should turn to. This affected
his faith in our ability to work togeth-
er. So he was willing to try once more
and he believed we had come to an
agreement. But his instructions in
sending me here were that if this
fourth try did not achieve results it
was pointless to pursue an ineffective
dialogue. I can understand that there
may have been misunderstandings and
I don't point to any bad faith. But my
President's instructions are firm: with-
out results we are to discontinue the
talks. These are very firm instructions.
All the items that have been paid for
are loaded and posed for release the
minute the hostages are in our custo-
dy. Their prompt delivery within 10
hours is our solemn commitment.
With regard to the problem raised by
the captors, the Da'Wa prisoners, it is
much on our mind as it has been
raised before. Our position is derived
from our policy which respects all na-
tions' judicial policies. We cannot
ignore their process. I am sad to
report all this. I respect what you said.
I will report to my President but I
cannot be optimistic."
[The Foreign Affairs Advisor] proposed a
slight change, "Since the plane is loaded
why not let it come. You would leave
happy. The President would be happy. We
have no guilt based on our understanding
of the agreement. We are surprised now
that it has been changed. Let the agree-
ment be carried out. The' hostages will be
freed very .uickly. Your President's word
will be honored. If the plane arrives before
tomorrow morning, the hostages will be
free by noon. We do not wish to see our
agreement fail at this final stage."
McFarlane underscored "how much I appe-
ciated your statement of your country's op-
position to hostage-taking. Such behavior
is inconsistent with your country. Bearing
in mind the possible misunderstanding,
can we separate the issue? As a humanitari-
an gesture? We delivered hundreds of
weapons. You can release the hostages,
advise us, and will deliver the weapons."
[The Foreign Affairs Advisor] said, "OK."
"But he (presumably Rafsanjani) would
like for the staff to reach an agreement on
what's been previously worked out. He
wants your agreement for the staff to work
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out an agreement. This will be a difficult
task. Might be difficult to get it done to-
night. Can extend you stay [sic]? Or per-
haps just the staff. Perhaps if we can reach
agreement on this the staff can stay and
complete the work?"
McFarlane expressed appreciation for [the
Foreign Affairs Advisor's] willingness to try
to work out an agreement. "I will seek the
President's decision. I cannot know what
he will say. But, I should say in his most
recent communication he pointed out I
have been here three days. It should have
been enough. But I will report again."
[The Foreign Affairs Advisor] suggested
trying to solve the problem as fast as possi-
ble. "We will try to do it in a manner that
will please your President. Problems like
this can only be solved at the last minute.
With all the problems we have, we want to
solve them in a good atmosphere. They
call us liberals, but revolutionaries do not
accept this. The staffs must reach a mutu-
ally acceptable solution, then the problem
will be solved. Something is apparent in
our letters. I am not blaming the staffs. We
want to reach a new understanding."
McFarlane agreed to try, while noting that
"staff agreements must be approved by our
leaders."
The meeting ended around 6:00 p.m.
PARTICIPANTS:
U. S.
Oliver L. North
George Cave
Howard R. Teicher
Israel
Amiram Nir
Iran
[Senior Foreign Affairs Advisor]
[Assistants to the Prime Minister]
DATE: May 27
PLACE: Tehran, Iran, Independence Hotel
Time: 9:30 p.m.
North thanked [the Foreign Affairs Advisor]
for returning the passports. He also stated
that the plane needs gas.
[The Foreign Affairs Advisor] directed [the
Iranian official] to take care of it.
North then presented the draft proposal for
the evolution of relations, noting that
"McFarlane is not pleased, but he gives
Iran until 0400 to consider this proposal."
([Foreign Affairs Advisor] and his aids
studied it. Their faces displayed anxiety.
They each ask about the timing of deliv-
eries. They repeatedly ask each other
about the spare parts.).
[The Foreign Affairs Advisor] asks "How
are we supposed to free the hostages by
0400?"
[The Assistant to the Prime Minister] ac-
knowledged that they are in contact with
those who hold the hostages. "We are ne-
gotiating. There is still a lot of work to do.
We cannot make a final decision on when
they will be released!"
North said he did not understand the
timing problem. "With McFarlane earlier
today you told us they would be free by
noon."
[The Foreign Affairs Advisor] agreed he
had said that earlier today. But it is now
late. Our dispute is over the lack of com-
plete agreement. What can you say about
the [sic] held in Kuwait?"
North proposed a statement like: "The U.S.
will make every effort through and with
international organizations, private individ-
uals, religious organizations, and other
third parties in a humanitarian effort to
achieve the release and just and fair treat-
ment for Shiites held in confinement, as
soon as possible."
The Iranians ask to think about the pro-
posal.
McFarlane and [the Foreign Affairs Advisor]
meet privately.
About 11:30 p.m., after more wrangling
between McFarlane and [The Foreign Af-
fairs Advisor], McFarlane concludes that
they're just stringing us along. He gives
the order to pack and depart. We discov-
ered 15 minutes earlier that all day the
plane was not refueled, leaving us semi-
stranded. The pilot is now en route to
refuel.
The meeting ends at 11:40 p.m.
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U. S.
Robert C. McFarlane
Howard Teicher
Oliver North
Iran
Senior Foreign Affairs Advisor
DATE: May 28, 1986
PLACE: Tehran, Iran, Independence Hotel
TIME: 2:00 a.m.
[The Foreign Affairs Advisor] asks for a
delay until 6:00 a.m. They will get answer
on the hostages by then.
McFarlane replies that if "you give us a
time we will launch the aircraft so that it
will land here two hours after the hostages
are in U.S. custody."
[The Foreign Affairs Advisor] said he
would be back in touch before 6:00 a.m.
The meeting ended at 2:10 a.m.
PARTICIPANTS:
U. S.
Robert C. McFarlane
Oliver L. North
George Cave
Howard R. Teicher
Israel
Amiram Nir
Iran
[Senior Foreign Affairs Advisor]
[Assistant to the Prime Minister]
DATE: May 28, 1986
PLACE: Tehran, Iran, Independence Hotel/
Mehrabad Airport
TIME: 7:50 a.m.
The Iranian official appears at 7:50 a.m.
Regarding the hostages, he says, "they
think two can get out now but it will re-
quire `joint action' on the other two."
McFarlane says, "It is too late. We are leav-
ing."
[The Foreign Affairs Advisor] arrives at
8:00 a.m. He repeats the proposal made by
[the Iranian official]. McFarlane tells him it
won't work. "You are not keeping the
agreement. We are leaving."
They try to slow us down but McFarlane
has made up his mind. By 8:00 a.m. we are
on our way to the airport.
As we board the aircraft [the Iranian offi-
cial] pleads, "Why are you leaving?"
McFarlane told him to tell his "superiors
that this was the fourth time they had
failed to honor an agreement. The lack of
trust will endure for a long time. An im-
portant opportunity was lost." We left
Tehran at 8:55 a.m.
These memoranda were distributed to the State
and Defense Departments, CIA, and JCS in De-
cember 1986. (Teicher to McDaniel, 12/11/
86.)
George Cave, using his alias "O'neil", also
made a record of the meetings. He noted that
Tuesday was a day of marathon negotia-
tions with the Iranians stalling for time and
trying to get the most out of the American
delegation. The American delegation stuck
by the terms of the original agreement and
insisted that after the terms of the Frank-
furt agreement were met, we would meet
and discuss in detail their needs and the
outline of our two countries' future rela-
tions. The American delegation proposed a
specific timing for a subsequent meeting.
During the late afternoon it was agreed
that the American team would draw up an
agreement which would be discussed later
in the evening. To save time O'neil began
working on a translation which was later
completed by he and Gorba.
During Tuesday's negotiations, all the de-
mands of the hostages holders evaporated
except for the demand for the release of
the Shi'ite prisoners in Kuwait. Goode
[North] handled this part of the negotia-
tions by firmly stating that the United
States would not interfere in the internal
affairs of Kuwait, particularly in an instance
where Kuwaiti due legal process had been
carried out. We would however seek to
better the condition of the Shia prisoners
through the good offices of international
organizations such as the Red Cross and
the Red Crescent. Goode warned that as
far as the well being of the Shi'ite prison-
ers in Kuwait was concerned, there had
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better not be any more terrorist activity di-
rected at the Royal family in Kuwait.
The draft agreement was the subject of in-
tense negotiations with the Iranians
making some counter proposals which
were designed to gain them more time.
Talks broke off around midnight with the
Iranian delegation saying it wanted to
caucus. For the next two hours, heated dis-
cussions were held within the Iranian dele-
gation. [The Iranian officials] both said
that the other would be responsible if
nothing comes of the negotiations. Finally,
shortly before two on Wednesday morning,
[the Assistant to the PM] asked to see
McFarland [sic]. He wanted assurances that
we would deliver the remaining spare parts
two hours after the hostages were released,
and would stay after the arrival of the
spare parts to discuss additional Iranian
needs. He also asked for more time to get
control of the hostages. McFarland gave
[the Assistant to the PM] until 0630
wednesday [sic] morning to arrange for the
release of the hostages. The American del-
egation retired to grab a couple of hours
sleep knowing that we had at least out-fraz-
zled them.
Cave's account terminated with the last con-
versations before the delegation returned to
Israel. Washington reported before they left
that it had seen no evidence that "the hostages
were about to be released or that anything un-
usual was taking place." (Id.)
The agreement drafted during the evening of
May 27 provided:
On this twenty seventh day of May 1986
and the sixth day of Khordad in the year
1365, the Government of the United States
of America and the Government of the Is-
lamic Republic of Iran, in a spirit of
mutual understanding, and recognizing the
importance of building respect, trust and
confidence hereby agree to the following
sequence of steps designed to lead to a
new era of bi-lateral relations:
(1) The United States Government will
cause a 707 aircraft to launch from a
neutral site at 0100 in the morning to
arrive in Tehran, Iran at 1000 on the
morning of May 28, the seventh day of
Khordad. This aircraft will contain the
remainder of the HAWK missile parts
purchased and paid for by the Govern-
ment of Iran, a portion of which was
delivered on May 24.
(2) The Iranian Government, having
recognized the plight of the hostages
in the Lebanon, and in the spirit of
humanitarian assistance, agrees to
cause the release and safe return of
the living American hostages and the
return of the body of the deceased
American and that this release will be
completed not later than 0400 Tehran
time.
(3) It is further agreed by both sides
that if by 0400 Tehran time, the hos-
tages are not safely in the hands of
U.S. authorities, the aircraft with the
HAWK missile parts will be turned
around and will not land in Iran and
the U.S. delegation will depart Tehran
immediately. If, howerver [sic], the
hostages are released at 0400, as indi-
cated above, the U.S. delegation will
remain in Tehran until 1200 Noon on
May 28, 1986.
(4) The Government of the United
States commits to deliver to Bandar
Abbas, Iran, two phase one IHIPIR
radar sets, fully compatible with the
HAWK missile system now in the pos-
session of the Iranian government.
This delivery to take place after the ar-
rival of the hostages in U.S. custody
and within ten days after the receipt of
payment through existing financial
channels for these radar systems. It is
further agreed that the government of
the United States will make every
effort to locate and identify those
items from the original list of 240
parts which were not immediately
available, and to provide those avail-
able as soon as possible after payment
is received and the hostages are in
U.S. custody.
(5) Both Governments agree to a con-
tinuation of a political dialogue to be
conducted in secrecy until such time as
both sides agree to make such a dia-
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logue public. It is agreed by both sides
that this dialogue shall include discus-
sions on the Soviet threat to Iran, the
situation in Afghanistan, Nicaragua,
and other political topics as may be
mutually agreed. Both sides agree in
advance that these discussions will in-
clude consideration of further defense
needs of Iran.
(6) Both Governments recognize that
the lack of a clear channel of commu-
nications has contributed to misunder-
standing and confusion in the past and
agree that this problem is best re-
solved by having the United States
provide a secure channel of communi-
cations between our two governments
by placing a secure satellite communi-
cations team, and appropriate equip-
ment secretly in
Tehran. The Government of Iran agrees
that the U.S. communicators will be ac-
corded normal diplomatic privileges and
immunity on an informal basis and without
attribution.
Cave's report ended with comments and a
recommendation, including:
2. It is quite possible that the Iranian side
was negotiating under the impression that
we were only interested in a deal for the
hostages. This would explain why they
tried so hard to get us to do more in ex-
change for the hostages, i.e., the 20 hawk
[sic] batteries and 18 additional hipar
radars. It was therefore a good idea to
leave a translation of the draft agreement
with them as it will give them something to
chew on. McFarlane issued a stern warning
that we are getting fed up with overatures
[sic] from them that don't pan out. We are
interested in a long term political and stra-
tegic relationship, and if Iran does not pick
up on this opportunity it may be years
before there is another one.
3. Ramadan was certainly a factor in how
the negotiations went. also [sic] the prob-
lem caused by not being able to see
anyone in a position of power. The people
we were negotiating with were a couple of
rungs down the ladder. The fact that [the
Iranian official's] breath could curl rhino
hide was no help either. On the positive
side was the change in the attitude of the
Iranian delegation. By tuesday [sic] they
were begging us to stay.
4. We also may have the problem of the
dishonest interlocutor. The Iranian side
made it clear that one of the problems in
our negotiations was the fact that prior to
our meeting, Gorba gave each side a dif-
ferent picture of the structure of the deal.
O'neil made the point to [the Assistant to
the Prime Minister] that the letters they re-
ceived [sic] were from Gorba, not the U.S.
government. We will have to lean heavily
on Gorba in the future.
5. Since both Gorba and [the Iranian offi-
cial] stand to make a lot of money out of
this deal, they presumably will work hard
to bring it off. Gorba has very special rea-
sons for seeing that the deal goes through.
The serious problem we must address is
whether the Iranians can gain control of
the hostages. The French don't think they
can. This could be our real problem. The
Iranian side may be most willing, but
unable to gain control.
RECOMMENDATION
Through hindsight it would have been
better for Goode and O'neil to have gone
in first to handle the initial negotiations.
We should not have subjected a senior
U.S. official to the indignities he was
forced to endure. We have made the point
to the Iranians that the draft agreement
must be finally negotiated by senior re-
sponsible officials from both sides. If we
have a subsequent response from the Irani-
an side it is strongly recommended that
Goode and O'neil meet with the Iranian
side somewhere in Europe to continue the
negotiations.
(May 1986 Hot Docs.)
E. Post Mortem
Most American accounts of the meetings
conform more or less faithfully to the contem-
poraneous written record. Ghorbanifar's ac-
count is different.
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According to Ghorbanifar, the meetings
started badly because they were inadequately
prepared. Ghorbanifar proposed that North
and he go to Tehran first to prepare the way.
The Americans refused. (Ghorbanifar 161)
Ghorbanifar's Iranian interlocutors were in-
credulous at the notion that McFarlane would
arrive without preparation, but agreed to wel-
come him "if he comes with the, whole of what
he has promised to come here, the spare parts,
okay." (Id. at 162. See also 168)
The American delegation arrived two hours
earlier than Ghorbanifar thought they would; as
a result, they waited an hour and a half at the
airport until the Iranian officials arrived. (Id. at
163-64) From the beginning, the Iranians were
disappointed that the Americans had brought
less than all the spare parts alleged to have
been promised. Ghorbanifar recalled that the
Americans raised the hostage question as
something to be resolved. before progress
could be made on other subjects, and that this
condition was mentioned for the first time
since February. (Id. at 165-66) Ghorbanifar
stressed that McFarlane's arrival and treatment
were remarkable in light of the recent history
of Iranian-American relations and the fate of
Iranian officials such as Barzagan who met with
American officials. They discussed cooperation
against the Soviet Union, which also was re-
markable. This fact contradicts, Ghorbanifar
said, the image of the meetings conveyed in the
press as negotiations about an arms-for-hos-
tages trade, facilitated by self-interested arms
traders. (Id. at 166-68)
Ghorbanifar remembered that Ayatollah
Khomeini approved the meetings, and that he,
Ghorbanifar, arranged for the head of the
Majlis foreign relations committee to meet
McFarlane. According to Ghorbanifar, "the
Parliament is everything in Iran, the Majlis, and
he is the number one for foreign affairs." (Id.
at 169) This man urged McFarlane not to press
the Iranians, but to give them time
that we cook the way we want the Ayatol-
lah Khomeini to pave the ground for this,
to make it ready, prepare for him. Don't
push him. From the first place, Mr. McFar-
lane was insisting on we have nothing to
discuss and nothing is going on to get to
this agenda if the whole four American
hostages are not released. . . . He waited
one day. I pushed the Iranian side every
day. Do something. He is here. You will
have to save his face.
After three days the man came to him and
said, Mr. McFarlane, I have good news for
you. We accepted the whole agenda, ap-
proved that we go and we coordinate. And
the good news to that is this: we prepared
the old man. Everything is ready right now.
It was seven in the evening, and I have six
witnesses-Mr. Nir, Mr. North, Cave, and
the other gentleman and myself.
(Id. at 170-71) The Iranian said the Lebanese
were proving difficult, but that it was possible
to arrange the immediate release of two hos-
tages.
Ghorbanifar remembered that McFarlane
stormed out of the room in response to this
message. Nir and North eventually persuaded
him to return. Despite the pleadings of the Ira-
nians and what Ghorbanifar described as the
"panic" of Nir and North at McFarlane's behav-
ior, McFarlane behaved as if he were giving an
ultimatum, Russian-style. (Id. at 171-73) The
Iranians continued to plead; the Majlis foreign
affairs expert said Khomeini had agreed to re-
lease the hostages first, but McFarlane
said no, if by six o'clock all the hostages
are not out, I leave. He says, okay, take
two now and give us another day. No. And
he left at six o'clock. And, believe me, I
saw the tears in the eyes of North, Nir, and
everybody.
Why he did so? I know why. I tell you why.
Number one, he had $15 million in his
pocket. We were a hostage to him. Number
two, the Iranians, they are not real politi-
cians. The people came to him. They were
so soft and they were so open to him; they
explained to him deeply how they are in
disaster. They need the help of the United
States financially-I mean the support-
wise, logistic-wise, military-wise. And he is
a smart guy.
He found out that in such a catastrophe
and that situation they are. They are really
in need of it. And, besides that, he says
what the hell is this. I know now all the big
shots. I have their telephone number. We
have relation. We go out. We have the
money. We have them. We know their
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need. They will follow. Who needs this
man, middle man? Who is he?
So he checked out and he left. And they
left the poor guys alone in Tehran. I
stayed one day, two days in Tehran. I told
them this issue is so big that nobody can
leave it on the air. Let me go and talk to
them and finalize what I can do. But there
is no way I can do unless you do some-
thing. First we have to do something.
(Id. at 173-74)
McFarlane's recollection corresponded to his
contemporaneous record. In addition, he noted
that the Iranians confiscated the pallet of spare
parts, but that no additional delivery was made
because no hostage was released. In Israel on
the trip home, McFarlane was disappointed.
North said well, don't be too downhearted,
that the one bright spot is that the govern-
ment is availing itself of part of the money
for application to Central America, as I
recall, although I took it to be Nicara-
gua. 7 1
After returning to the United States, Cave re-
membered evaluating the situation. "It was
quite clear that Ghorbanifar was lying to both
sides in order to blow this deal up as big as he
could." (Cave 24) Cave learned from the
Tehran trip that the Iranians had less control
over the holders of the hostages than the Intel-
ligence Community believed. He also conclud-
ed that the Kuwaitis held the key to the hostage
problem. American hostages would not be re-
leased until Kuwait released the Dawa prison-
ers. (Id. at 41-42).
VIII. The End of the Beginning:
June July 1986
When McFarlane's delegation returned to the
United States, nearly a year had passed since
the NSC staff formally floated the idea of con-
71 According to the CIA Inspector General, during the meet-
ings Ghorbanifar told Cave the price of the weapons quoted to
the Iranians was $24.5 million, and asked Cave to say "the price
is right" if the Iranians asked. Cave informed North, and togeth-
er they asked Nir about it. Nir told them "Don't worry, it in-
volves other deals, and that there are enormous expenses in this
operation..:." Cave had the impression that McFarlane could
"`care less about' the pricing discrepancy." (CIA/IG Chronology
26) (McFarlane (1) 42) C/NE recalled that the spare parts cost
the Americans $6.5 million, but that the Iranians were charged
between $21 and $24 million (C/NE (1) 10-11)
tacting Iranian political factions through the
medium of arms. In that time, Israel and the
United States sold Iran 1,508 TOW missiles,
18 HAWK missiles, of which 17 were returned,
and some HAWK spare parts. In addition, the
United States had provided Iran with briefings
on the U.S. perception of the Soviet threat and
the Iran-Iraq War. The NSC staff's involvement
had been ancillary at the beginning; as time
passed, the staff increasingly influenced, and
then directed the operation.
All those involved hoped that these transfers
would lead to the release of Americans held
hostage in Lebanon and form the basis for a
new relationship with Iran. In this period, one
American hostage had been released, and at
least one had died in captivity. Whether a new
relationship was being formed remained (and
remains) to be seen.
A. Aid to the Nicaraguan
Resistance
In the late spring, 1986, the Administration
directed its energy to persuade Congress to
fund the Nicaraguan resistance. Absent Con-
gressional appropriations, the Administration
looked to third countries to help the resistance
pay its bills. The Assistant Secretary of State
for Inter-American Affairs told the Board:
[B]y spring [1986], we were running out of
money. The $27 million was running out.
It ran out about in June or July, and at that
point, it was also clear to us that though
both Houses [of Congress] had voted the
'hundred million, we weren't going to get it
that fast.
We knew we'd get it before or believed
we'd get it before the adjournment. But, in
any event, we were out of money.
It was at that point that we made a solicita-
tion to another government for a kind of
bridge to extend the $27 million until we
had the $100 million.
We had discussed in the department [of
State] on several occasions whether we
should utilize the authority which we be-
lieve we had to go to a third government. I
don't remember the dates of those discus-
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sions, but the Secretary's staff has those
dates. I mean, there are notes of those dis-
cussions. It was in the spring-March,
April, May, starting-as authority to obli-
gate the $27 million ran out March 31.
After that, we were dealing with the pipe-
line, which we knew would last about two
months, ten weeks, something like that.
I got actual authority to go ahead and
make a particular solicitation in July, as I
recall it. There is cable traffic on this. It
was from the Secretary, and we sent a
cable-this was done through the embassy
in that country-saying do you think they'll
give, and there was a sort of back and forth
with the Ambassador. The Secretary decid-
ed that we should go ahead and make the
request, which I then did.
The actual solicitation was made by me,
not by the Ambassador, in London, meet-
ing with an official of that government.
They ultimately said yes.
Let me back up a step.
Before I went off and made the solicita-
tion, it was clear that they might say yes.
They, after all, agreed to meet us on a
matter of highest importance. I don't know
whether they knew what it was going to be,
but it was certainly plausible.
So, we needed a place to put the money.
When [sic: What] I did was to go to [the]
head of the Central American Task Force
at CIA and say-and I must say that I am
relying on his memory of this as I don't re-
member this conversation. But I asked him
about it a couple of weeks ago, and so, this
is his account of it.
It was so how do I do this? I mean, can
UNO, the Nicaraguans, the Contras, can
they set up an account? How do we do
this?
He said yes, he would pass a message to
them to set up an account, which would re-
ceive any money, the number of which I
would give to the foreign official, and then
that would be the place that they would re-
ceive the money.
Chairman Tower: Set up an account
where?
Mr. Abrams: It didn't matter to me, and I
think-I don't actually know the answer to
that any more, but there are records that
the CIA has-I believe the answer is
Panama. Actually, they dispatched, a mes-
sage was passed to an official of UNO, "Go
open an account," because there may be
some money being put in it.
So they did that.
I asked the same question more or less the
same day, probably even the same hour, of
Ollie North-what do I do here? I think
there may be some money coming in for
the Contras, can we set up an account?
Again, I don't have much memory of that
conversation either, and I haven't asked
Ollie for obvious reasons. So I don't know
what his memory, if any, is of that.
At any event, at some point later, like a
week later, probably, both of these guys
gave the index cards with an account
number and the name of the bank on it.
I then went to Charlie Hill, who is the Ex-
ecutive Assistant to Secretary Shultz. . . .
Well, for the account number which was
given to me by Ollie North, [the bank] was
Credit Suisse, in Geneva.... To continue,
I went to Charlie Hill, who is Executive As-
sistant to the Secretary and said now what
do I do? I asked both these guys and they
both came up with accounts.
So Charlie and I kicked it around. This was
the first week in August, as I recall. We de-
cided to use the account number that been
provided by Ollie, on the grounds that it
looked, oddly enough in retrospect, kind
of cleaner because we were unsure, first of
all, whether this account had any relation-
ship to any other Agency account. We
wanted a separate account. And, I would
have to say there was probably some insti-
tutional rivalry there; that is, this is some-
thing State was doing, why should we get
the CIA involved in the distribution of
funds, because I don't know who was a sig-
natory for that. I still don't-for that ac-
count.
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I then gave the account number that Ollie
had given me to this foreign official.
(Abrams 3-7)
According to the head of CIA's Central
American Task Force, the Nicaraguan resist-
ance started to incur debt after they used up
the $27 million; by the middle of July 1986,
that debt amounted to over $2.5 million. (H/
CATF 38) This CIA official told the Board:
In early August of 1986, when we were
seeing this debt problem, which had been
a focal point of discussion, saying my God,
the resistance is going to run out of money
and they are going to start starving to
death; we ought to get this law passed. We
knew we weren't. We were running into
summer recess, even though both cham-
bers had passed the bill. And we had a
number of discussions about how are they
going to survive for the next three months.
The obvious answer was solicit some
money from someplace. So State Depart-
ment, who had the writ and the charter to
do that, went out and looked at the possi-
bilities and came up with Brunei, obvious-
ly. One day I got a phone call on Thursday
from Elliott [Abrams] saying we have a
possibility to solicit some money from the
Sultan of Brunei. Only the Secretary and I
are aware of it. I am going to be making a
trip. How should we deposit this money?
How should we handle it?
And I said, well, the best way, the mecha-
nisms that I would prefer to use, which are
an Agency-controlled bank account and so
on and so forth, are not-the other mecha-
nisms are too hard to start up. The best
way to do it is to get the resistance forces,
one person in particular in whom we have
complete trust and confidence, to open a
bank account, and you put the money in a
bank account and make him accountable to
you for how it's used.
And he said that sounds like a good idea.
I'll open a bank account. So I got hold of
this particular individual and asked him to
open a bank account in the Bahamas. I
wanted to stay away from Cayman Islands
and Panama. And he did open up a bank
account and had it co-signed with his fi-
nancial officer. And I gave Elliott the ac-
count number. And that's all.
I subsequently asked the individual if any
money had been deposited and asked El-
liott if he thought the mission had been
successful, and the answers to both were,
Elliott, I don't know, and to the individual,
he said no, no money has been deposited.
We subsequently checked and no money
was deposited in that account.
And that's the last I thought or heard of it
until ... I received a phone call [from the
Deputy Director for Operations] saying,
my God, did you give Elliott a bank ac-
count in Geneva. And do you have a pri-
vate bank account in Geneva? And I said
no, who are you talking about? Well, the
FBI says that you gave Elliott a bank ac-
count in Geneva, to which Elliott deposited
$10 million from the Sultan of Brunei,
which is missing.
And I said, wait a minute, something's
badly wrong here. That was the first time I
knew that Elliott-then we got it sorted
out after about a few hours of almost fran-
tic phone calls, and it was the first I knew
that Elliott apparently had gotten another,
allegedly had gotten another bank account
from Ollie North in Geneva.
General Scowcroft: He didn't tell you he
was not going to use your account?
[Head of Central America Task Force]: No,
he never told me that. That probably left
me as speechless as anything in this whole
endeavor, that that $10 million which we
sorely needed and still do need-I mean, it
would be the margin of comfort even in
today's operation-went into a bank ac-
count in Geneva and disappeared. It just
left me durristruck and still does. I still find
it hard to believe.
(H/CATF 44-47)
On June 10, 1986, early in the process thus
described to the Board, North wrote Poin-
dexter:
Hopefully you have by now been informed
that UNO/FDN safely released the eight
West Germans this evening just before
dark at the religious commune at Presillas.
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Franklin is headed North in attempt to get
across the Rama Rd before the Sandinistas
can close in on him. At this point the only
liability we still have is one of DEMOCRA-
CY INC.'s airplanes is mired in the mud (it
is the rainy season down there) on the
secret field in Costa Rica. They hope to
have it out by dawn. On a separate but re-
lated matter: The reason why I asked to
speak to you urgently earlier today is that
Ray [?Burghardt] called Elliott Abrams re-
garding the third country issue. Elliott has
talked to Shultz and had prepared a paper
re going to [other third countries] for con-
tributions. Elliott called me and asked
"where to send the money." I told Elliott
to do nothing, to send no papers and to
[sic] talk to no one further about this until
he talks to you. He is seeing you privately
tomorrow. At this point I need your help.
As you know, I have the accounts and the
means by which this thing needs to be ac-
complished. I have no idea what Shultz
knows or doesn't know, but he could prove
to be very unhappy if he learns of these
others countries aid that has been given in
the past from someone other than you. Did
RCM [McFarlane] ever tell Shultz?
I am very concerned that we are bifurcat-
ing an effort that has, up to now, worked
relatively well. An extraordinary amount of
good has been done and money truly is
not the thing which is most needed at this
point. What we most need is to get the
CIA re-engaged in this effort so that it can
be better managed than it now is by one
slightly confused Marine LtCol. Money will
again become an issue in July, but prob-
ably not until mid-month. There are sever-
al million rounds of most types of ammo
on hand and more ($3M) worth on the way
by ship . . . Critically needed items are
being flown in from Europe to the expand-
ed warehouse facility at Ilopango. Boots,
uniforms, ponchos, etc. are being [sic] pur-
chased locally and Calero will received
$500K for food purchases by the end of
the week. Somehow we will molify the
wounded egos of the triple A with not
being able to see RR. We should look to
going back to a head of an allied govern-
ment on the blowpipes if we are going to
do anything at all about outside support in
the next few days, and I wd love to carry
the letter from RR . . . if we are going to
move on something. Meanwhile, I wd rec-
ommend that you and RCM have a talk
about how much Sec Shultz does or does
not know abt [third country assistance ap-
proaches] so that we don't make any mis-
takes. I don't know [one of those govern-
ments] knows since Fred never told me. At
this point I'm not sure who on our side
knows what. Help.
(North PROF note to Poindexter, 6/10/86,
23:21:54) Poindexter replied:
Out of the last NSPG on Central America
Shultz agreed that he would think about
third country sources. I wanted to get an
answer from him so we could get out of
the business. As I understand the law there
is nothing that prevents State from getting
involved in this now. To my knowledge
Shultz knows nothing about the prior fi-
nancing. I think it should stay that way. My
concern was to find out what they were
thinking so there would not be a screw up.
I asked Elliot at lunch.72 He said he had
recommended Brunei where Shultz is
going to visit. They have lots of money
and very little to spend it on. It seems like
a good prospect. Shultz agrees. I asked
Elliot how the money could be transferred.
He said he thought Shultz could just hand
them an account number. I said that was a
bad idea not at all letting on that we had
access to accounts. I told Elliot that the
best way was for Brunei to direct their em-
bassy here to receive a person that we
would designate and the funds could be
transferred through him. Don't you think
that is best? I still want to reduce your visi-
bility. Let me know what you think and I
will talk to George. I agree about CIA but
we have got to get the legislation past.
72 Burghardt wrote [Poindexter] at this time[?]:
I understand that Elliott [Abrams] briefed you today on where
this stands ["aid for freedom fighters"]. If we do not get a
positive response fairly soon from the Saudis or Brunei, I
would advocate moving right away. . . . I can understand the
reluctance to incur a debt, but it would be almost a sure thing
and we will definately [sic] need the $10 M bridge money.
With the House scheduled to take up the issue on the 24th,
Senate approval would be after the July 4 recess and the date
of delivery keeps fading into the distance.
(Burghardt PROF note to [?Poindexter], reply to note of 6/9/86)
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(Poindexter PROF note to North, 6/11/86.) In
another message, Poindexter added: "We
should not mention Brunei to anybody. elliot
said only shultz and hill are aware." [sic] (Poin-
dexter PROF note to [?Burghardt]):
"With respect to private solicitations,"
Abrams told the Board,
we never did any of that. As a matter of
fact, the state of our knowledge of that was
limited. We had intelligence reporting,
which improved over time as the restric-
tions on what the Agency could do with
the Contras were reduced. We had better
information on what was being received,
better in 1986 than in 1985.
We in the department never made any
other solicitation for anything from any-
body. One time, this summer, I would say,
General Singlaub called me from Asia . . .
and said I can get some aid for the Con-
tras, through me, if you will just sort of let
this foreign government know, just tell
their ambassador-I don't remember who I
was supposed to tell-this is official.
I said I can't do that. It's just not right; I
can't do that.
He said well, then, I'm going to blow it.
But I just couldn't do that.
So that was the only other time when I was
asked, in a sense indirectly, to solicit, and
said no.
We had virtually no, we had no informa-
tion on who was paying for it. CIA people
have testified that they were able to trace
money back to secret bank accounts but
couldn't get behind the bank secrecy laws;
and they have testified that they knew the
arms were coming from [a foreign coun-
try]; that is to say, the last stop before
Central America . . . , but they could not
go beyond that and find out who was
paying.
Well, I have to say that we did not think it
was our job to find out who was paying,
since it seemed to us, as long as it didn't
violate the Neutrality Act or the Arms
Export Control Act that it was legal and
proper.
Once or twice we, in particular, actually
CIA and not State, came up with some
facts that indicated a violation of the Neu-
trality Act, a shipment of arms from the
U.S., and we reported that to the Depart-
ment of Justice.
But we did not engage in nor did we really
know anything about this private network.
We knew that it existed. We knew it in part
because somebody was giving the Contras
guns.
We knew it also because you couldn't be in
Central America and not know it.
We have significant military assistance
through El Salvador via Ilopango Airport,
which is the Salvadoran Airport.
Also, we ran a good proportion of the $27
million in humanitarian aid through Ilo-
pango Airport.
(Abrams 11-13)
Congress authorized $100 million in assist-
ance to the Nicaraguan resistance at the end of
June 1986.
In June, the pressures on North worried
McFarlane. He wrote Poindexter that
[i]t seems increasingly clear that the Demo-
cratic left is coming after him [North] with
a vengeance in the election year and that
eventually they will get him-too many
people are talking to reporters from the
donor community and within the adminis-
tration. I don't [know] what you do about
it but in Ollie's interest I would get him
transfered or sent to Bethesda for disabil-
ity review board (appartwently [sic] the
Marine Corps has already tried to survey
him once[)]. That wuld [sic] represent a
major loss to the staff and contra effort but
I think we can probably find a way to con-
tinue to do those things. In the end it may
be better anyway.
(McFarlane PROF note to Poindexter, 6/10/86)
Poindexter indicated he would think about
McFarlane's concern. (Poindexter PROF note to
McFarlane, 6/11/86)
In the middle of July, Poindexter asked to
see North. After the meeting, North wrote:
The opportunity to discuss the Central
America issue with you was welcome and
at the same time, disturbing. In view of last
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night's CBS piece and this morning's ap-
palling Washington TIMES item, I can un-
derstand why you may well have reserva-
tions about both my involvement in Nicara-
gua policy and even my continued tenure
here. Since returning a few minutes ago I
have been told that even my luncheon en-
gagement with my sister yesterday is in
question. Under these circumstances, and
given your intention that I extricate myself
entirely from the Nicaragua issue, it prob-
ably wd be best if I were to move on as
quietly, but expeditiously as possible. I
want you to know that it is, for me deeply
disappointing to have lost your confidence,
for I respect you, what you have tried to
do and have enjoyed working with you on
a number of issues important to our
nation. On the plus side of the ledger we
have had a close relationship on several
initiatives that could not have been accom-
plished without absolute trust between two
professionals. At the same time you should
not be expected to retain on your staff
someone who you suspect could be talking
to the media or whom you believe to be
too emotionally involved in an issue to be
objective in the development of policy op-
tions and recommendations. I know in my
heart that this is not the case, but as I said
in our discussion yesterday, we live in a
world of perceptions, not realities. I have
taken the liberty of forwarding to you a
memo transmitted two weeks ago which I
wd like to be sure you have had a chance
to see - mostly because it predates the cur-
rent controversy. I want to be sure that
you do indeed know that I have and will
continue to tell you the truth as I see it-
for I deeply believe that this is the only
honorable thing to do. That this, and the
relationships established in the region over
the past five years are no longer enough to
enable me to serve in the various policy
fora on Nicaragua is, for me, unfortunate.
Nonetheless, I consider myself to have
been blessed to have had the chance to so
serve for as long as I did. Finally, to end
on a substantive note, you should be aware
that Gen Galvin will be here for DRB ses-
sions on Mon & Tues next week and wd vy
much like to have the chance to meet pri-
vately with you. He has suggested any time
after 1630 on Tues, but is amenable to yr
schedule as long as he will not have to
absent himself from DRB sessions. Given
the controversy that rages over the CINC-
SOUTHCOM role in the project, I strong-
ly recommend that you see him if at all
possible.
(North PROF note to Poindexter, 7/15/86,
12:21:30) Poindexter replied:
Now you are getting emotional again. It
would help if you would call Roger Fon-
taine and Jerry O'Leary and tell them to
call off the dogs. Tell them on deep back-
ground, off the record, not to be published
that I just wanted to lower your visibility
so you wouldn't be such a good target for
the Libs. As it has worked out both you
and Vince will represent NSC on Elliot's
group. Don't go intodetail [sic]. I do not
want you to leave and to be honest cannot
afford to let you go. By the way they are
making a big mistake by calling Rod a soft
liner. He disagrees with Stan Turner and
Bernie as much as I do.
NEW SUBJECT: I can see Jack Galvin this
afternoon. Let me know how the calls go.
(Poindexter PROF notes to North, 7/15/86,
14:06; 14:07:02; 14:09:02) The matter was
straightened out as far as concerned North's re-
lationship with Poindexter later in the month.
(See North PROF note to Poindexter, 7/23/86,
15:05:39; Poindexter PROF note to North, [7/
23/86])
Afterward, North wrote Poindexter about the
need to turn over certain material in Central
America to the CIA.
We are rapidly approaching the point
where the PROJECT DEMOCRACY assets
in CentAm need to be turned over to CIA
for use in the new program. The toal (sic
or sp) value of the assets (six aircraft,
warehouses, supplies, maintenance facili-
ties, ships, boats, leased houses, vehicles,
ordnance, munitions, communications
equipment, and a 6520' runway on proper-
ty owned by a PRODEM proprietary) is
over $4.5M.
All of the assets - and the personnel - are
owned/paid by overseas companies with
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no U.S. connection. All of the equipment
is in first rate condition and is already in
place. It wd be ludicrous for this to simply
disappear just because CIA does not want
to be "tainted" with picking up the assets
and then have them spend $8M-10M of the
$100M to replace it-weeks or months later.
Yet, that seems to be the direction they are
heading, apparently based on NSC guid-
ance.
If you have already given Casey instruc-
tions to this effect, I wd vy much like to
talk to you about it in hopes that we can
reclama [sic] the issue. All seriously believe
that immediately after the Senate vote the
DRF will be subjected to a major Sandi-
nista effort to break them before the U.S.
aid can become effective. PRODEM cur-
rently has the only assets available to sup-
port the DRF and the CIA's most ambi-
tious estimate is 30 days after a bill is
signed before their own assets will be avail-
able. This will be a disaster for the DRF if
they have to wait that long. Given our lack
of movement on other funding options,
and Elliot [sic]/Allen's plea for PRODEM
to get food to the resistance ASAP,
PRODEM will have to borrow at least $2M
to pay for the food. That's O.K., and Dick
is willing to do so tomorrow-but only if
there is reasonable assurance that the lend-
ers can be repaid. The only way that the
$2M in food money can be repaid is if CIA
purchases the $4.5M+ worth of PRODEM
equipment for about $2.25M when the law
passes. You should be aware that CIA has
already approached PRODEM's chief pilot
to ask him where they (CIA) can purchase
more of the C-135K A/C. The chief pilot
told them where they can get them com-
mercially from the USAF as excess-the
same way PRODEM bought them under
proprietary arrangements. It is just unbe-
lievable. If you wish I can send you a copy
of the PROJECT DEMOCRACY status
report which includes a breakdown of
assets. It is useful, nonattributable reading.
(North PROF note to Poindexter, reply to note
of 7/15/86, 14:07)
B. Hostages and Iran, June-
July 1986: "Stalemate"
On May 29, McFarlane, North, and Teicher
reported on the Tehran trip to the President,
accompanied, by Poindexter, Regan, and the
Vice President. They informed the President
that the Iranians had asked for the delivery of
all HAWK spare parts before hostages would
be freed. The United States delegation had re-
jected this proposal, but agreed with the Irani-
ans to establish a secure communications net-
work. Contact would continue. McFarlane
argued that no new meeting should take place
until all hostages were freed. (McDaniel log)
McFarlane recalled this report to the President.
I told him that I had talked to people and
that while I thought that there were people
legitimately oriented toward change that
they had not yet gotten to a position of
confident ability to act. I had not met with
Rafsanjani. He must have felt vulnerable,
as Mr. Brzezinski's meeting with Barzagan
had led to certain consequences, and he
probably was fearful about it. But that
ought to tell us something and that I
thought it was unwise to continue anything
further.
If they wanted to have political meetings
that is a judgment we could make, but that
there ought not be any weapons transfers.
The President didn't comment really, but
that was not untypical. He would often
hear reports, say that he would think about
it, and that was-and he didn't react to me
and I left, and that's the last -I heard about
Chairman Tower: And that ended your in-
volvement in the matter?
McFarlane: Yes, sir.
(McFarlane (1) 45) On June 2, the CIA in-
structed the Army "to put the radar transfer
action on `hold,' a status which continued until
30 July 1986." (Army/IG Report 9)
While McFarlane's delegation was negotiat-
ing in Tehran, the President heard discussion
about using force to free the hostages. (McDan-
iel log, 5/28/86) Once North returned, Poin-
17g-29A f)-A7--7
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dexter sought his views on the subject. He
wrote North
I am beginning to think that we need to se-
riously think about a rescue effort for the
hostages. Is there any way we can get a spy
into the Hayy Assallum area? See Charlie's
[Allen] weekly report [on hostage loca-
tions]. Over a period of time we could
probably move covertly some . . . people
into Yarze.
(Poindexter PROF note to [?North], 5/31/86)
North was not prepared to replace the program
with force. He
[f]ully agree[d] that if the current effort
fails to achieve release then such a mission
should be considered. You will recall that
we have not had much success with this
kind of endeavor in the past, however.
After CIA took so long to organize and
then botched the Kilburn effort, Copp un-
dertook to see what could be done thru
one of the earlier DEA [Drug Enforcement
Agency] developed Druze contacts. Dick
has been working with Nir on this and now
has three people in Beirut and a 40 man
Druze force working "for" us. Dick rates
the possibility of success on this operation
as 307o, but that's better than nothing.
In regard to U.S. military rescue ops, JCS
has steadfastly refused to go beyond the
initial thinking stage unless we can develop
some hard intelligence on their where-
abouts. We already have . . . one ISA offi-
cer in Beirut but no effort has been made
to insert personnel since we withdrew the
military mission to the LAF. If we really
are serious, we should start by getting CIA
to put a full time analyst on the HLTF
[Hostage Location Task Force] and then
organizing a planning cell-preferably not in
the pentagon [sic], but at CIA, to put the
operation together. Dick, who has been in
Beirut, and who organized the second Iran
mission, is convinced that such an oper-
ation could indeed be conducted. My con-
cern in this regard is that JCS wd insist on
using most of the tier 2 and 3 forces in
such an undertaking. If you want me to
task this thru the OSG we will do so, but
[I] urge that we start by you having Casey
staff the HLTF as there has been a certain
amount of planning undertaken on this
matter already. It might be useful to sit
down w/ Dewey and Moellering on this
after next week's OSG meeting (Thursday
1500-1600 [June 12]) if you have the time.
We can probably brief you in about 20 min
max.
(North PROF note to Poindexter, 6/3/86,
11:42:43)
At his morning national security briefing on
June 6, the President is said to have approved
military planning to rescue the hostages as well
as reviving [previously planned efforts].
(McDaniel log) Poindexter asked the Director
of Central Intelligence to intensify efforts to
locate the hostages. (Poindexter to DCI, 6/19/
86. CIA/IG Chronology 19) By July, the United
States had asked Israel to help. (See North
PROF note to Poindexter, 07/11/86, 07:27:44)
Meanwhile, the United States knew that at
least Ghorbanifar refused to treat the Tehran
meeting as the end. On June 6, he pressed [his
contact in the Prime Minister's office] for an-
other meeting with the United States. He
promised that the United States would deliver
the remaining HAWK spare parts and, if Iran
paid in advance, the radars. [The Iranian offi-
cial] seems to have treated Ghorbanifar's advo-
cacy as nothing new, to have been unimpressed
with his idea, and inclined to drop the initia-
tive.
Claiming that Ghorbanifar told him that [the
Iranian official] wanted to talk, George Cave,
using his alias "O'neil," called [the Iranian] on
June 13.
[The official in the PM's office] said that
this was not true, but "our friend" [Ghor-
banifar] had been pressing him to go
through with the deal.
O'neil then asked what we should do about
the situation. B replied that he did not
know why we didn't complete the deal
when in dubai [sic] [?Tehran]. O'neil inter-
upted to state that he had a suggestion.
We should first meet in Europe to make
sure there were no misunderstandings as
happened before. Then our gorup [sic]
would go to Dubai [coverterm for Tehran]
at an agreed upon date. Upon arrival in
Dubai the four boxes [hostages] would be
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turned over, then the rest of the spares
would arrive and later dependeing [sic] on
timeing [sic] the two Quties [coverterm for
HAWK radars] would arrive. We would
stay until everything was delivered. B said
that the meeting in Germany was not
neccessary and that deal was unacceptable
to them. He proposed that we arrive with
the remaining 240 spares, then two hos-
tages would be truned over [sic]. When the
two radars arrive, the two other hostages
would be turned over.
We haggled abit [sic] O'neil insisting on
our deal and he insisting on his. O'neil
suggested that meeting in Germany was
necessary and B finally agreed that if really
necessary he would come. He parrried [sic]
the request that the H [?] also attend. He
added that it would be very difficult to get
away at this time.
When discussing the possible trip to
Dubai, B suggested that it was not neces-
sary for the chief to accompany group that
comes.
Since discussion was getting nowhere,
O'neil suggested that he was in [a] position
to decide on B insistance [sic], and there
for it best [sic] that O'neil confer with his
superiors and B with his and O'neil will
get back to him in one or two days. At the
end B stated that it should not be that we
give such importance to who does what
first, once this deal is completed there are
many important issues that we must dis-
cuss. He again insisted on the need of the
US to demonstrate good faith.
O'neil asked if the hostages were now
under their control because at one point B
said that he did not know if their delega-
tion was still in Lebanon. B hesitated to
answer k-this [sic] one but said that they
could get them. O'neil said "then they are
in your hands" and B said they were (note
O'neil doubts this is true).
The next day, the Iranian official told Ghor-
banifar that Iranian officials were prepared to
meet American representatives in Europe if the
remaining HAWK spares and radars were deliv-
ered first. If all equipment were delivered, all
hostages would be freed; if half the equipment,
half the hostages.
Ghorbanifar and his Tehran contact dis-
. cussed the matter for the rest of June. On June
20, Ghorbanifar provided the Iranian official
with a detailed analysis of the price and avail-
ability of the remaining HAWK spare parts. Ac-
cording to Ghorbanifar, 177 units would cost
$3,781,600 in addition to the $24,173,200 Iran
already had paid. He reported that, as a gift,
the United States would add ten diesel genera-
tors essential to operating the HAWK system,
and had offered to provide test and calibration
equipment and technicians to operate it. At his
morning national security briefing the same
day, the President discussed both [our] ability
to rescue hostages and next steps with Iran.
The President is said to have decided that
there would be no meetings with Iranian offi-
cials until the hostages were released. (McDan-
iel log) The next day, Ghorbanifar and the Ira-
nian official argued pricing, using an oil trans-
action as cover.
"[P]er instructions" from the official in the
Prime Minister's office, who had unsuccessfully
tried to reach him, Cave called the Iranian June
2. Although there was a lot of talk one
thing emerged and that is that the B's
people want to somehow go through with
the deal. The difficulties that dealing with
us was causing them [sic]. The B empha-
sized that there are many people that
oppose dealing with us. When O'neil asked
if this was causing his group political diffi-
culties, he confirmed that this was the case.
His problem is that they must appear to
have made a good deal. He pointed out
that the previous release of the one person
in return for the 1,000 had not left them in
good oder [sic] as the 1,000 were not that
important, and they had to return the
other materials.
3. O'neil stated that we were very much in-
terested in the deal and a long term rela-
tionship between the two companies, but
the chief of our company was insisting on
the release of our embargoed 4,000,000
dollars [coverterm for hostages] before we
delivered the remainder of 240 [HAWKs]
spares and then the two large boxes
[radars]. What was interesting at this point
is that the B did not say there could be no
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deal on this basis. He said that some fro-
mula [sic] must be worked out whereby we
can deliver what we promised at much the
same time as they deliver the 4,000,000.
For the first time he said that they needed
political currency to deliver on their end.
He stated that they have a serious problem
with the 4 million in explaining why it is
that they need it. This has been a serious
problem in their negotiations with those
that control the 4 million. When O'neil
asked the direct question can they gain
control of the 4 million, the B hesitated
but said that this was within their capabili-
ties. He said that if we had stayed in Dubai
[Tehran] a few days longer they could have
delivered 2 million immediately. He em-
phasized in answer to an O'neil question
that they could not specifically say exactly
when the 4 million would be transfered,
but this was still in their power, despite the
fact that the situation where the 4 million
are held was continually deteriorating. The
B urged that we try to do this deal as soon
as possible, so that our two companies
could have a meaningful future relation-
ship. O'neil said that he would call back at
approximately the same time on 23 June.
4. The B continually spoke of the serious
problems that trying to consumate [sic]
this deal was causing him and his col-
leagues. He urged O'neil to contact the
merchant [Ghorbanifar] to get all the de-
tails. He would try to contact the merchant
immediately to provide as much back-
ground as possible. The B on several occa-
sions said that there was [sic] considerable
forces arrayed against this deal and he con-
sidered himself in some danger. Most in-
teresting note is that during this conversa-
tion the B insisted that they want to go
through with deal. Although he bordered
on the inarticulate at times, long pauses
and some relapses into his old song and
dance, he did not reject our position out-
right. O'neil's reccomendation [sic] is that
we sit down and talk it out with him in in
[sic] person, we may get more out of this
than the transaction we are interested in.
Two days later, North reported to Poindexter
that the Iranian official was trying to reach
Cave again.
As of this minute they have not yet con-
nected. We are trying to have him call
back. Nir advises that [the Iranian official]
called Gorba about an hour ago in a state
of great agitation to say that he was trying
to get Sam [O'neil] to arrange for the re-
lease of one U.S. hostage. Nir believes it to
be sincere and that we may really be close.
I am not so sure but [C/NE] Sam and
Charlie [Allen] all think it may be real.
We'll see. Sam will call me later tonight
and I'll come back into here or CIA to re-
ceive the report. Wd be nice to have some
kind of secure voice to save these middle
of the night trips. Will advise in a.m. of
any developments.
(North PROF note to Poindexter, 6/24/86,
21:28:15)
At about the same time, a successful rescue
began to look possible. North wrote in late
June:
You should also be aware that CIA be-
lieves that they have made a major break-
through on the location of at least two of
the hostages. The info is being carefully
analized [sic] before passing to JSOC, but
there hasn't been this much enthusiasm on
the issue in a long time. Our other effort
seems to be at a standstill w/ Ashgari [sic]
[Ghorbanifar] and [his Tehran contact]
screaming at each other about prices and
Geo. Cave telling [the Iranian official] that
we are fed up w/ the whole thing and are
tired of being insulted by people who
"pretend to be able to do things they
cannot."
(North PROF note to [?Poindexter], reply to
note of 6/25/86)
Ghorbanifar told the Board that Cave's tele-
phone calls "every night" created a problem in
Tehran. He recalled Cave.
saying the President said this, McFarlane
said this, Poindexter said this, and making
a lot of confuse [sic] for Iranians. Because
he doesn't know there are three groups
that must come together to make a deci-
sion.
General Scowcroft: Who was Cave talking
to when he called?
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Mr. Ghorbanifar: To the man who is the
head of this operation, the special aide to
the Prime Minister, the number one in his
office.
(Ghorbanifar 175)
The official in the Prime Minister's office and
Ghorbanifar held a number of discussions at
this time. The Iranian official complained that
the United States charged six times the 1985
price for the weapons at issue. Ghorbanifar
tried to explain the pricing, while complaining
that his financial problems had forced him into
hiding. He needed $5 million to avoid ruin. On
June 30, Ghorbanifar told his Tehran contact
that the Americans again explained the high
prices, and had suggested that, once the matter
was resolved and relations were improved, the
United States would assist Iran to obtain loans
from international banks and American agen-
cies. Ghorbanifar then proposed, without indi-
cating who may have originated the idea, that
Iran obtain the release of one hostage to coin-
cide with the July 4 celebrations and the cen-
tennial of the Statue of Liberty. He added that,
within twenty-four hours of such release, the
United States would ship the rest of the HAWK
spare parts. The radars would follow, and Iran
would effect the release of the last two hos-
tages. The Iranian official doubted a hostage
could be released by July 4; for one thing,
there had to be agreement on the price of the
materiel. Ghorbanifar agreed they had to solve
the price problem before the timing of the hos-
tage releases could be fixed.
Cave also spoke to the official in the Prime
Minister's office about the price of HAWK
spare parts on June 30. Cave reported that:
1. This was fairly lengthy call during which
B [the official in the Iranian Prime Minis-
ter's office] continued to harp on the Price
[sic] of the 240 items. Sam [O'neil] told
him that we had sent a copy of the prices
to the mercahnt [sic] [Ghorbanifar]. These
constituted the prices that the middlemen
paid for the goods. B wanted to -know [sic]
if Sam had a copy so he could relate some
of them to B. Sam said that he did not
have a copy of the prices. During the
course of the conversation, B would inisist
[sic] on discussing kpricing [sic]. He re-
fused to be stonewalled and said that he
was under enormous pressure to get some
adjustment in the pricing. When Sam
asked about the Micro [sic] fiche list. He
confessed that he had not sent it but would
on the morrow. Th;is [sic] is some kind of
indicator that such a list might not exisit
[sic]. However, he does have something
and suspect it might be an old invoice. He
said that his superiors are shocked that the
USG would selll [sic] them parts at black
market prices. Sam -pointed [sic] out that
he was buying from the merchant. B was
insistant that some th;ing [sic] must be
done on pricing as they were not prepared
to pay six times -pricing [sic].
2. Sam told him that something must break
soon as the Chief of our comp[any] is fed
up with the whole deal. He was must [sic]
disturbed at the way our delegation was
handled in Dubai [Tehran] and is on the
verge of corking off the while [sic] deal.
This did not seem to make a great impres-
sion on B. Sam also said that he and
Goode [North] are in deep trouble for
having recomended [sic] the deal in the
first place. B said that we were in no more
trouble than he was on his end. Sam said
that we were then all in the same trench
together.
3. At one point in the pricing argument,
Sam pointed out that we do not cheat on
prices, were they displeased with the
[?HAWKs]? when [sic] B kept insisting on
some kind of break in the price, Sam told
him that as far as we were concerned they
could buy the parts elsewhere. This deal
was set and it would have to go -through
[sic] the mercahant [sic].
4. Toward the end of the conversation, B
made a plea to Sam to do something about
the end of the price if at all possible. He
also extracted a promise from Sam to call
him back tomorrow.
According to the CIA/IG report, Cave ob-
tained the following letter, purportedly written
by Ghorbanifar to his Iranian contact, on 8 July
1986.73
73 Except as indicated, the material between square brackets is
in the document as annotated by the CIA. The Board cannot
verify the authenticity of the letter. According to the CIA Inspec-
tor General, Cave obtained this letter in late July 1986. (CIA/IG
Chronology 27) Clair George told the Board that, while Cave
B-131
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My dear and esteemed brother [B]:
After greetings, I feel it is necessary to
state the following points with respect to
the American issue, which for a year has
taken up everyone's time and has become
very unpleasant:
If you remember, we had some very
lengthy telephone conversations Monday
and Tuesday [30 June and 1 July]. I
stressed the fact that the essence. of a
[good] policy is to identify the moment,
exploit the occasion, and recognize the
proper and appropriate time in order to
take advantage of them and to get conces-
sions. I said that Friday was the 4th of July
and the celebration of the 210th anniversa-
ry of the American Independence as well
as the 100th anniversary celebration of the
Statue of Liberty in New York. For this
reason, there was going to bea very elabo-
rate and majestic celebration titled `Liberty
Day' in New York at the foot of the Statue
of Liberty. The Americans were calling it
the Celebration of the Century; and the US
President and the President of France will
be hosting the celebration; for it is the day
of liberty and celebration of freedom. [I
said] that if we could mediate for the re-
lease of the American hostage clergyman
on Thursday, 3 July, and he could attend
these celebrations-as he is clergy-we
could exploit it and benefit from it a great
deal; we could get the Americans to accept
many of our demands. Naturally, as usual,
nobody paid any attention to my sugges-
tions. The. Americans were expecting us to
take at least these steps for them: Anyway,
the Americans are saying that last year
after the Iranians mediated the release of
an American clergy, M. Mier [sic] who was
kept hostage in Beirut, they [the Ameri-
cans]-as a goodwill gesture and as a first
step-made available to Iranians 504 [sic]
TOW missiles. Also, during the year since
then, they [the Americans] have taken the
following positive and constructive steps as
a sign of goodwill and utmost respect
toward the Islamic Republic: However, in
return, the Iranians have not made the
began his involvment as an interpreter, he "became a player....
I'm afraid he got way out there somewhere and we didn't have a
string on him every step of the way." (George 49-50)
slightest attempt nor shown the smallest
sign-even discreetly-to improve rela-
tions:
1. After the clergyman's release; whenever
and wherever American officials talked
about countries supporting and nurturing
terrorism, they did not include Iran; also,
the Chief Justice of the Supreme Court
[translator believes he means Attorney
General of the United States] in an official
interview, mentioned Libya, Syria, South
Yemen, and Cuba as the countries support-
ing, protecting, and strengthening terror-
ism.
2. With regard to the Iran-Iraq war, the US
Department of State, in an official note,
strongly condemned the use of chemical
weapons.
3. The American Ambassador at the
United Nations was the first person to vote
for official condemnation of Iraq for the
use of chemical weapons.
4. [Issuance] of an official announcement
terming the Mojahedin-e Khalq Organiza-
tion terrorist and Marxist; the [issuance] of
a circular to the Congress and to all Amer-
ican firms and institutions, and banning of
any and all types of assistance to the oppo-
nents of the regime of the Islamic Republic
of Iran.
5. Opposition to the decrease in oil prices;
so much so that Mr. George Bush, the Vice
President, on two occasions during speech-
es and interviews announced that the re-
duction in oil prices would ultimately be
harmful for the United States and that oil
prices should increase.
6. Dispatch of two US planes with more
than 1,000 TOW missiles on two separate
occasions, at cost price.
7. Dispatch of a high-ranking 5-man team
from the White House and the Defense
Department for a meeting with B and his
accompanying team, and the provision of
certain preliminary military data on Iraq
with an agreement that more complete and
comprehensive data should be made avail-
able in subsequent. meetings and after the
final agreement.
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8. Arrival of a very high-ranking delegation
from the White House headed by Robert
McFarlane, Mr. Reagan's special assistant
and advisor, together with five high-rank-
ing civilian and military officials for a 4-day
stay in Tehran; they brought more than
one-fifth of the requested spare parts for
missile systems; further, some complete
military, technical, and intelligence infor-
mation and data with regard to Soviet
threats against Iran, and the military and
political -- [sic] 74 of that government
[USSR] with full details on [plan for] inva-
sion of Iran; Soviet activities in Kurdestan,
Baluchestan, and Iraq; [Soviet] cooperation
with opponents of the Islamic regime; and
above all, a clear and explicit announce-
ment by the US Government that it consid-
ers the regime of the Islamic Republic
stable and it respects that regime. Also,
that the USG does not in any way oppose
that regime; and promises that it has no in-
tentions or plans to bring it under its
[sphere of] influence, create changes, or
interfere in its internal affairs. Later, Min-
utes [sic] of the meeting and agreement
were submitted, reflecting the goodwill
and total cooperation of the United States
with the Islamic Republic; specifically with
respect to the war and other problems
threatening this regime. [You may read
these Minutes again.]
The Americans are saying: "We were treat-
ed in an insulting and unfriendly fashion;
they made us return empty-handed while
we were ambassadors of friendship and as-
sistance."
The gentlemen themselves know the de-
tails of the events better than anyone else.
As you know, the US officials in Tehran re-
iterated over and over that in exchange for
what they proposed, they only expected
that our [Iranian] authorities should medi-
ate and use their religious and spiritual in-
fluence for the release of the four Ameri-
can hostages who have been kept in Beirut
for more than two years; that by this hu-
manitarian deed, they could bring happi-
ness to the families and children waiting to
see their fathers; and that they could fur-
ther be free in every respect to provide us
[Iranians] with secret and necessary sup-
port.
They made it very clear that they are fully
prepared and willing to provide [Iran] with
all types of political, economic, and weap-
ons cooperation and accord, on the condi-
tion that such assistance should not be
considered part of [a bargain for the re-
lease of] hostages; but rather it should be
considered a goodwill and better relations
and friendship gesture by the United
States.
Prior to the arrival of the US team and
myself in Tehran on 25 May 1986, there
was full agreement that upon arrival of the
high-ranking US delegation in Tehran,
bringing some of the requested items, the
Iranian authorities would begin immediate-
ly mediating for the release of all American
hostages in Beirut all, together and collec-
tively. And that after this, the remaining
items requested by Iran would arrive in
Tehran. The US team would stay in
Tehran until the rest of equipment
[items]-among them the large HP
radars-also arrived in Tehran. Further,
there was supposed to be official agree-
ment and commitment for providing the
rest of Iran's weapon needs, as well as
secret agreements in some political and
economic areas. The Americans were to
leave Iran only after all of these stages had
been completed.
However, although the 10-man US team
and their giant special aircraft was in
Tehran for four days, unfortunately noth-
ing was accomplished. You well remember
that on the last day of the stay, His Excel-
lency [redacted] 75 in the presence of you
and another gentleman, insisted several
times that everyone should agree for the
time being about the mediation for the re-
lease of two hostages. But Mr. McFarlane
did not accept this and stated that they
were there [in Tehran] and were prepared
to discuss and solve some basic and strate-
gically important issues and to stand by
you [Iranians]; all of these must be solved
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together, so that no problem remained and
the way could thus be paved for everything
once and for all.
I must [at this point] remind you that in
.1985 there were 45,703 deaths on US
highways, and that during the same year,
1,301 Americans died as a result of chok-
ing on their food [gluttons]. Thus, we
must not put the Americans under such
pressure that they end up including these
four [hostages] as part of the above statis-
tics, and we end up losing this historic op-
portunity which has combined one whole
year of hardship and difficulties with some
heavy expenses for me.
You know that this matter has been tan-
gled for 45 days. I can assure you that the
Americans neither can nor will be able to
take another step along this path unless we
should at least carry out as a preliminary
and beginning step that which was [redact-
ed] 76 was insisting upon. I also believe
that whatever we want to do and whatever
decision you make, must be carried out
within the next 2-3 days.
Now, there are only three solutions; I have
totally convinced them [Americans] and
they are in total agreement with all of the
three solutions. I believe and strongly rec-
ommend that the first solution be chosen:
1. You should immediately pay in cash the
amount for the items that have already ar-
rived, including the remaining 177 items.
The money for the 240 items, as well as
the money for the two HP's, should be
paid through the London branch of Bank
Melli Iran on 30 July, that is, in 21 days.
2. That same evening, you should mediate
and release two of the hostages.
3. Within a maximum of 24 hours after
this, the Americans would deliver all of the
240 items, that is approximately 4,000
spare parts and two giant HP's at Bandar
Abbas.
4. Immediately after receiving all of the
above items and their full inspection, you
should take immediate steps for the release
of the remaining two hostages. Also, for
humanitarian and religious reasons, you
should mediate for identification of the
burial place of the hostage who died last
year [W. Buckley] so that his body can be
transferred to the United States to be
buried next to his mother as was his wish.
5. Seventy-two hours after the delivery and
receipt of all the 240 items of [HAWKs]
and the two HP's and the release of all
hostages, a high-ranking US team will be
present in Geneva, Frankfurt, or Tehran-
as you wish-and will take careful steps
with respect to providing the proposed
Minutes of the meeting and will make a
commitment. Further, the team will study
the matter of the remaining HP's and heli-
copter spare parts and all other needs and
requirements of the Iranian army. In this
regard, agreement as to the date for their
delivery could be specified. Meanwhile,
they [Americans] are ready to send imme-
diately technical experts and equipment for
testing and repairing them.
Second solution, which would require
more time and would entail more head-
aches:
1. You should pay in cash the amount for
the items that have already arrived, includ-
ing the remaining 177 items. The money
for the 240 items should be paid through
issuance of a check via London branch of
Bank Melli Iran on 20 July, that' is in 11
days.
2. That same evening, you should mediate
and release one of the hostages.
3. Within 12 hours after this, they will de-
liver all of the 240 items in Tehran.
4. Immediately after receiving fully and ac-
curately all of the 240 items in Tehran, you
must mediate and release the same day two
more hostages and must pay the money for
the two HP's.
5. Within a maximum of 24 hours after the
release of these two hostages and the pay-
ment of the amount for the HP's, the radar
equipment will be delivered at Bandar
Abbas.
6. After the complete and correct delivery
of the two HP's, you will mediate and take
steps for the release of the last [fourth]
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hostage as well as the body of William
Buckley.
7. Seventy-two hours after receiving all of
the 240 items of [HAWKs] and the two
HP's and the release of American hostages,
a high-ranking US team will be present in
Geneva, Frankfurt, or Tehran-as you
wish-and will take careful steps with re-
spect to providing the proposed minutes of
the meeting and will make a commitment.
Further, it will study the matter of the re-
maining HP's and helicopter spare parts
and all other needs and requirements of
the Iranian army. And in this regard,
agreement can be made as to the specific
date for their delivery. Meanwhile, they
[Americans] are ready to immediately send
technical experts and equipment for test-
ing and repairing them.
8. I personally and on my honor-whatever
way you deem it proper-would guarantee
and make commitment that immediately
after carrying out the last phase-that is,
after the delivery of the 240 items and the
two HP's and after the release of all Amer-
ican hostages, within a maximum of one
month-I shall deliver in Tehran 3,000
TOW missiles at a cost of $38.5 million
which is the cost to the Americans them-
selves, plus 200 Sidewinder missiles
mounted on F-4 and F-5 planes, again at
cost. Naturally, [only] if you make the
money available to me-not like this [last]
time when you did not leave anything for
me.
Third solution:
Since I have tried to be a mediator for
good, I do not wish to be a cause of mis-
deeds. I have tried to bring [the two sides]
together and create friendship, and not to
cause further division, hostility, and alien-
ation. Thus, if you do not find either of
the above-mentioned solutions advisable,
return immediately the exact items that
they brought so that the whole case can be
closed and we can pretend nothing hap-
pened, as if 'no camel arrived and no
camel left' [old Persian saying]. Everyone
can thus go his own way. Hopefully, in the
future, [when] conditions and circum-
stances are once again suitable, steps can
be taken. I mean we should not 'put a
bone inside a wound' [another old Persian
saying, meaning not to make things worse].
There is no reason for it. If I have encoun-
tered great difficulties and many material,
spiritual, and prestige problems soley due
to friendship, good intentions, honesty,
belief, and trust, it was simply for the love
of [my] country and my friendship with
you and it does not matter. I hope good
and generous God will compensate me for
it, as my intentions were all good.
I beg you to take a speedy and decisive
step and make a quick decision on this
issue, for the good and the welfare of the
Islamic Republic.
Thanking you and with highest respect,
Manuchehr Qorbanifar
signed 9 July 1986
"In June and July," Charles Allen told the
Board,
there seemed to be sort of a stalemate. In
early July, Colonel North called me out of
a meeting-I was lecturing to a group at
the Office of Personnel Management-and
stated that he had been assured by Amiram
Nir, special assistant to the Prime Minister,
Peres at that time, of Israel that another
American would be released very shortly.
He at that stage briefed some of the senior
people in the government.
We sent a hostage briefing team to Wies-
baden and no release occurred, and we
brought the team back." Colonel North
was deeply disappointed and he said that
he had been admonished by Admiral Poin-
dexter on this, and he cut off all contacct
with Amiram Nir at that stage and asked
that I talk to Amiram Nir for a period of
two or three weeks.78
77 On July 2, Ghorbanifar told his contact in the Prime Minis-
ter's office that the United States thought Iran used the pricing
problem as an excuse to cover Iran's inability to obtain the re-
lease of another hostage. He said that United States suggested
that, if another hostage were released, then the United States im-
mediately would ship the remaining HAWK spare parts.
78 According to the CIA Inspector General:
"[July 7-261: Allen remains in almost daily contact with Nir by
telephone. (According to Allen, Nir is clearly alarmed at losing
direct contact with North and appears to be working feverishly
with Ghorbanifar and others to free an American hostage.) Nir
tells Allen that, according to Ghorbanifar, I/1 is making an
B-135
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(C. Allen 21)
The Secretary of State told the Board that,
on July 2,
Mr. Armacost wrote me a memo, inform-
ing me "that there is renewed `conjecture'
that the NSC-sponsored search for a U.S.-
Iran deal for hostages will produce an
early result. The story is that one hostage
may be released tomorrow in Lebanon."
Arms were not mentioned. I do not recall
having seen this memo, but this reported
"conjecture"would have added nothing to
my knowledge of the matter. You heard
this from time to time.
(Shultz, SRB, 56)
In the middle of July, two senior foreign gov-
ernment officials visited Tehran. One of them
reported a feeler by Rafsanjani to the effect
that the Americans knew what had to be done
to improve relations. North wrote Poindexter
on July 10 that:
[y]ou will recall that several months ago
the [name deleted] initiated direct discus-
sions with the Iranians on the matter of
our hostages. This is the third such over-
ture they have made on our behalf. In ad-
dition to the information in the cable, . . .
[of the [country deleted] Embassy in Wash-
ington] made the following comments:
-The perception of a Soviet threat to
Iran is a concern that has reached the
highest levels of the Revolutionary
Government.
-There are obviously members of the
Iranian Government who foresee the
possibility that "given the right condi-
tions" Iran could "cause the release"
of the American hostages.
-Although none of the Iranian offi-
cials responded positively to [Director
General of the [country deleted] For-
eign Ministry's] suggestion that direct
secret discussions be initiated between
the U.S. and Iran, it was not rejected.
Rafsanjani noted that "the U.S. Gov-
ernment knows what it should do."
-The [country deleted] have clearly
explained to the Iranians that they are
reporting directly back to the Ameri-
can Government on these contacts.
From this and earlier meetings, it is appar-
ent that the [country deleted] have been
able to establish and maintain a direct link
at the highest levels of the Iranian Govern-
ment. Given the stalemate on other initia-
tives and our inability too ensure that we
are in direct contact with responsible Irani-
an officials we may be able to use this most
recent [country deleted] visit to Tehran as
an opportunity to establish such a contact.
[Name deleted] , who has acted as our con-
duit for these matters, has suggested that
they have the ability to pass a secure com-
munication directly to Rafsanjani through
their ambassador in Tehran.
It is important to note that, during the
meeting, [name deleted] pointedly asked
whether we had conveyed our willingness
to eventually normalize U.S.-Iranian rela-
tions when our "officials were in Tehran."
A direct response was avoided and [name
deleted] was advised that our willingness
to talk with the Iranians is "common
knowledge." It is disturbing that the visit
may also be common knowledge.79
North proposed sending the following mes-
sage:
We have reported the results of the June
27-29 discussions to the American Govern-
ment and they have asked us to relay the
following message in highest confidence.
The highest levels of the American Gov-
ernment are prepared to open direct and
private discussions with responsible offi-
cials who are empowered to speak on
behalf of the Iranian Government. They
have asked us to tell you that under the
right conditions, the American Govern-
ment is prepared to take steps leading to a
effort to secure the release of a hostage. He asks Allen to re-
frain from informing North since he does not want to raise
North's "hopes too high." When Father Jenco is released,
North again resumes direct contact with Nir."
(CIA/IG Chronology 27)
7B On June 29, 1986, a column by Jack Anderson and Dale Van
Atta in the Washington Post stated: "We can reveal that the secret
negotiations over arms supply and release of American hostages
have involved members of the National Security Council and a
former official of the CIA."
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normalization of relations between your
Government and theirs. If you are agree-
able, a senior American official is prepared
to meet with responsible representatives of
your government at the time and place of
your choosing. They are prepared, as you
have suggested, to make an appropriate
gesture of goodwill.
(North to Poindexter, 7/10/86, "Non-Log") In
his memorandum to Poindexter, dated July 17,
North indicated that Poindexter approved
sending this message.
On July 17, North reported a second oppor-
tunity for direct contact with the Iranian gov-
ernment to Poindexter. The Secretary of State
had been given a memorandum by a foreign of-
ficial on "US-Iran Relations," reporting a
recent conversation in Tehran.
At the conclusion of my discussions in
Tehran, Dr. Larijani, Irani Deputy Foreign
Minister stated that he wanted to raise a
matter that was highly sensitive. He re-
quested that it should be treated with ap-
propriate confidentiality and that I should
convey it in [country deleted] at a 'suitable'
level. Larijani added that he left it to
[country deleted] to decide the level at
which to raise the issue with the Ameri-
cans.
2. Larijani said that since the beginning of
the Irani revolution, the United States of
America had adopted an implacably hostile
policy towards Iran. Apart from attempts at
physical intimidation, the Americans had
tried to undermine the Irani revolution
through various means and especially by
giving moral and material support to Iran's
enemies. Larijani said that the Americans
should appreciate that the Irani govern-
ment and people could not compromise on
the Irani revolution which had been
brought about through supreme sacrifices
by the Irani people. They would defend
the revolution to the last drop of blood.
3. The American government should ap-
preciate, however, that Iran and America
shared similar strategic interests in the
region. The danger of pro-Soviet, Marxist
interests asserting themselves in the region
was growing rapidly. After Afghanistan, the
Marxists had taken over in South Yemen.
Pro-Soviet, Marxist elements were strongly
entrenched in other countries in the region
and especially in Egypt, North Yemen,
Kuwait and Iraq. Even in the Gulf coun-
tries there was disillusionment with the es-
tablished order which could be overthrown
by forces that would adopt an anti-US and
pro-Soviet policy. Iran viewed these devel-
opments with concern. Iran felt that, de-
spite its physical resources, the United
States would not be able to influence de-
velopments especially, at a time of internal
convulsions. Iran, on the other hand, had a
greater capacity to influence and pre-empt
such developments.
4. Larijani's remarks indicated that, despite
Iran's rhetorical invective against USA,
Iran wanted an easing of relations on sub-
stantive matters with USA and that Iran
wanted [country deleted] to play the role
of intermediary in attempting a better un-
derstanding with the American govern-
ment.
(Tab II to North to Poindexter, 7/17/86)
In his covering memorandum, which was la-
beled "Non-Log," North wrote:
When we first commenced direct discus-
sions with the Iranians, we established an
immediate objective of recovering our hos-
tages and longer-term goals of ending the
Iran-Iraq war and normalizing the U.S.-Ira-
nian relationship. . . . To date, we have
been unable to establish a direct contact
with Iranian officials who are willing/able
to take such steps.
It is entirely likely that the visit of [the for-
eign minister of a friendly nation] presents
an opportunity to have him contact appro-
priate Iranian officials with a message from
the USG. The memorandum provided to
Secretary Shultz by Larijani . . . indicates
that various officials in Iran do indeed wish
to establish such contact.
When we first discussed this matter, it was
indicated that the point of contact for [a
foreign official] to deliver our message
would likely be Musavi-Khamenei, the Ira-
nian Prime Minister. Given Musavi's radical
past, it is unlikely that he would be as posi-
tively disposed as Rafsanjani, who is more
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widely known as a "pragmatist." In a meet-
ing this afternoon with George Cave, he
volunteered that it was "too bad we did
not have enough trust [in this country] to
carry a message to Rafsanjani, since they
are apparently close." Cave is unaware of
this initiative.
In order to insure consistency. with the ear-
lier message delivered by [an official of a
second friendly country] and messages we
hope to have delivered by other trusted
interlocutors, a verbatim message rather
than talking points has been pre-
pared. . . . At this point, two actions need
to be taken:
-Secretary Shultz should review the
proposed message at Tab III and, if he
concurs, it should be passed to [the
foreign minister of the first friendly
nation] for personal delivery to the
Iranians.
-We should seek to have the message
delivered by [him] to Rafsanjani rather
than Musavi.
(North to Poindexter, 7/17/86)
C. Jenco
Whether or not Poindexter acted on North's
proposals to try to use these two nations'
access to the Iranian government, on July 21,
the United States obtained a clear indication
that a hostage might be freed soon. North re-
ported that:
We have just been told by Nir that "the
Iranians claim to have taken action this
morning to release one hostage.". . . I
have asked CIA to alert [appropriate per-
sonnel in] Beirut and no others to the pos-
sibility in order to preclude a repeat of
Jul[y] 4. We have not put any other USG
assets on alert. RELATED SUBJECT:
Absent further developments on this ap-
proach, George Cave will ? proceed to
Frankfurt to meet w/ Tabatabai,80 the
cousin of the man I met w/ here. T is al-
ledgedly well connected to Rafsanjani and
several other of the so called "pragma-
80. According to North's desk calendar, North met "Tabata-
baie," possibly with Senator Helms, on June 27.
tists." Purpose of the meeting is to deter-
mine T's real.access and willingness to act
as an interlocutor. If bona fides prove out
he could also be used to pass the same
message we sent back via [a third country].
In that regard, who was [that country's em-
issary] to give our message to on the Irani-
an side?
(North PROF note to Poindexter,. 7/21/86,
18:04:38) Poindexter informed North the same
day that [the emissary] was to pass the message
to "the Iranian FM [Foreign Minister]. Don't
tell anybody including Cave about this." (Poin-
dexter PROF note to North, 7/21/86,
20:10:14) North in turn replied:
Roger, WILCO. Am concerned, however
that if tonight's [information] does indeed
bear the fruit promised, that we may be
confusing an already difficult situation.
Maybe that's not as bad as it might other-
wise be since those guys will all get the
message eventually if anything develops.
(North PROF note to Poindexter, 7/21/86,
20:20:23)
On July 25, Poindexter wrote North:
Bob Oakley must have told Shultz about a
discussion that took place in OSG. Shultz
called me about a Cave meeting in the
next few days. I vaguely remember that
you told me something about this. George
just wanted to be sure that we did not have
any disconnect between what [the emis-
sary] will be telling them and what Cave
tells them.
(Poindexter PROF note to North, 7/25/86,
11:33:17) In his reply, North reminded Poin-
dexter where the various communications
stood.
Cave is meeting w/ [a relation of a power-
ful Iranian official] and Tabatabai to deter-
mine level of access and current political
sentiments toward the present regieme
[sic]. He was prepared to pass a message
identical to the one we sent thru [a friendly
foreign official] but I held it back when
you advised that the FoMin, not Rafsanjani
was to be the recipient. We have likewise
sent no message back thru [the. other
the
friendly government]. At the present, the
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only active courier is [the emissary of the
first country] and the only recipient is the
FM. Cave will report his findings when he
returns from Frankfurt and we can. then
determine whether we wish to use any of
these new contacts as interlocutors. Also
related: Nir and [the official in the Iranian
PM's office] are both out of their respec-
tive pockets. Charlie agrees that it is en-
tirely possible that they are meeting in
Europe.
(North PROF note to Poindexter, 7/25/86,
18:43:42)
On July 26, Father Lawrence Jenco was re-
leased. McFarlane wrote Poindexter: "Bravo
Zulu on Jenco's release. Do you correlate this
to the anxious calls that have come since the
trip to Iran and our insistence that they move
first? Or is it really a Syrian effort?" (McFar-
lane PROF note to Poindexter, 7/26/86) 81
Poindexter explained how it had come about in
his reply:
Thank you. It is directly related to your
trip out there. The Syrians only entered at
the last minute. Gorba finally convinced
[his Tehran contact] after numerous tele-
phone calls that they should come forward
with a humanitarian gesture. Gorba either
on his own or as Nir's agent is out a lot of
money that he put up front for the parts.
[the Tehran contact] has been unwilling to
pay him since all of the material has not
been delivered. Gorga [sic] has cooked up
a story that if Iran could make a humani-
tarian gesture then the US would deliver
the rest of the parts and then Iran would
release the rest of the hostages. Of course
we have not agreed to any such plan. Nir
and Gorba are in London. [The Iranian of-
ficial] is enroute [sic]. I am trying to decide
whether to send Ollie and George Cave.
The problem is that if parts aren't deliv-
ered, Gorba will convince [his Tehran con-
tact] that we welched on the deal. Al-
though through several conversations Cave
has repeated to [the Tehran contact] what
our position has been-all of the hostages
81 North apparently received a copy of this message. He wrote
McFarlane: "[t]he bottom line is that this is the direct result of
your mission and neither the Syrians nor a non-existent Casey
trip had -anything to do with it." (North PROF note. to McFar-
lane, 7/29/86, 20:36:04 (reply to note of.7/26/86, 13:51))
out before anything else moves[,] I have
aboutdecided [sic] to send. Ollie to make
certain our position is clear. It seems to
me that we may have some leverage over.
[the official in the PM's office] now since
he is out on a limb in Tehran and may fear
for his own safety.
(Poindexter PROF note to McFarlane, 7/26/86,
14:58:07)
McFarlane agreed with Poindexter's ap-
proach.
I agree with your strategy; to send Ollie
and to reaffirm our position. Of course the
unknowables are: 1. Do they-as they have
said-no longer have control over the
others (Itend [sic] to believe they do still
have control over all; Jenco ought to be
able to throw some light on that). 2. Will
[the Iranian official] have the courage and
influence in Tehran to be able to recom-
mend the release of allwithout [sic] some-
thing coming from us. I tend to doubt it.
He is a simple [person] way over his head
and afraid of his own shadow; not the kind
to take risks or to trust foreigners he
cannot begin to understand. But it is likely
that the higher ups-[a senior foreign..
policy advisor] (the most senior guy we
met) will understand and respect that we
are sticking to our original position. Over
time, constancy is respected. 3. Finally
however, there is the risk that even the
higher ups will see no great downside, in
killing one of the remaining hostages. I'm
afraid that's just a risk we will have to run
for to do otherwise will lead to a thousand
reoccurences [sic] of this scenario in the
months ahead as they see that we really
can be strung out.
(McFarlane PROF note to Poindexter, 7/26/86,
21:53:58)
On July 26, the day of Jenco's release, Poin-
dexter "[b]riefed [the] President on secure
phone," (Poindexter, handwritten note on
North to Poindexter 7/26/86), from a paper by
North on "what we know of the Jenco release,"
for Poindexter to give the President. (North to
Poindexter 7/26/86)
The release of Father. Lawrence Jenco is a
second positive step in our protracted and
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difficult dialogue with the Iranians. Father
Jenco's release undoubtedly comes about
as a result of Bud McFarlane's trip at the
end of May and the continuing direct and
indirect contacts we have had with Iranian
officials. Our Israeli contacts and the Irani-
an intermediary in Europe advise that the
Iranian Government now expects some re-
ciprocal move on our part-though exactly
what, we are uncertain.
[Available information] indicate[s] that the
decision to release Father Jenco was made
in Tehran on or about July 21. On
Wednesday, July 23, our Israeli point of
contact advised us that "if, as we hope, a
hostage is released, it will be Jenco." It was
also on this date that the Israeli point of
contact (Amiram Nir) told the Iranian in-
termediary in Europe that the USG was
breaking off all contact on this matter. We
have also learned that July 24 was a key
date in the most recent release:
-The Iranian Government paid their
European intermediary $4M on Thurs-
day, July 24, as partial payment for
HAWK missile parts which were re-
moved from our mission aircraft at the
end of May. (It is important to note
that in order to pay the Israelis for the
HAWK missile parts, the Iranian inter-
mediary in Europe borrowed more
than $15M and has been under threat
of death from his creditors. The Israe-
lis regard this payment as further
proof that the Iranians wish to contin-
ue the contact with the U.S. on the
hostage issue.)
-Father Jenco has told Ambassador
Eagleton . . . in Damascus that it was
on Thursday, July 24, that he was sep-
arated from the other American hos-
tages in Beirut and delivered to a loca-
tion in the Bekka Valley. It was from
this location in western Lebanon that
he was subsequently released to Leba-
nese authorities, who in turn delivered
him to a Syrian military checkpoint.
Our next step will be to have two USG
representatives meet with the Israeli and
Iranians in Europe, if possible, tomorrow
in an effort to determine Iranian expecta-
tions. This is not a negotiating session, but
rather an attempt to maintain contact and,
if possible, assess how we should now pro-
ceed. To our knowledge, no new Israeli
deliveries have occurred and all remaining
HAWK missile repair parts are still in a
covert depot in Israel.
(Tab I to North to Poindexter, 7/26/86)
With this memorandum, North attached a
memorandum from the Director of Central In-
telligence on the "American Hostages." 82
After discussing the release of Father Law-
rence Jenco with Charlie Allen and Dewey
Clarridge, I believe it is important that you
have our assessment of this development
and prospects for release of additional hos-
tages.
First, it is indisputable that the Iranian
connection actually worked this time, after
a series of failures. You will recall that the
[Iranian official]-Ghorbanifar connection
also resulted in the release of Reverend
Weir in September 1985. Syria played no
role either in the release of Weir or Jenco.
After the impasse in Tehran over in late
May, [the Iranian official] continued to ini-
tiate direct contact with one of my officers,
George Cave, even though the Iranians
had been told that we were no longer in-
terested in pursuing the matter. The fact
that [this official] persisted in contacting us
indicates his desire to arrange a "deal"
with Washington either through Ghorbani-
far or, if necessary, with Cave. He also
clearly wanted to keep a channel open.
Amiram Nir, Special Assistant to the Prime
Minister of Israel on Counter-Terrorism,
has also played a critical role in a deter-
mined effort to force Iran to begin the re-
lease of American hostages. He has been
supported by Prime Minister Peres and De-
fense Minister Rabin in this endeavor. In
order to make the terms of the arrange-
ments more palatable, Israel, on its own,
offered additional arms "to sweeten the
deal.". . .
[We received information on 21 July that
the Iranian official] had taken action with
82 According to the CIA Inspector General, Charles Allen pre-
pared this memorandum. (CIA/IG Chronology 28)
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other Iranian authorities to release one
hostage. To reinforce this commitment, he
transferred $4M to a West European bank
to pay his European intermediary for the
HAWK spare parts removed from our mis-
sion aircraft in May. On Wednesday, July
23, when no hostage had been released.
Ghorbanifar was instructed to inform [the
Iranian official] that "the deal was off." On
Thursday, July 24, the Israelis [obtained
information] indicating Jenco would be re-
leased.
In return for the release, [the Iranian offi-
cial] probably expects to receive most of
the HAWK spare parts not yet delivered,
along with additional military equipment
that Israel unilaterally has added to the ar-
rangement. Once this equipment is deliv-
ered, [the Iranian official] stated that Iran
would take action to obtain the release of
one more hostage and would pay.the re-
mainder of the money owed to the Iranian
intermediary for the HAWK spare parts.
According to [our information, the Iranian
official] apparently expects to then receive
the two HAWK radars and the remainder
of the HAWK spare parts, although it is
unclear as to the timing of these additional
deliveries. [The Iranian official], moreover,
indicated a willingness to meet with U.S.
officials again on these matters, either in
Tehran or "somewhere else" - presum-
ably Western Europe.
This is how we see the current situation:
-The Ghorbanifar-[Iranian official]
connection has worked for the second
time - and another American has
been released.
-Ghorbanifar is an uncontrollable
factor, but appears to respond gener-
ally to Nir's direction.
-Nir has every reason to work for fur-
ther releases of our hostages. Peres
and Rabin have put their reputation
on the Ghorbanifar-[Iranian official]
connection and support Nir fully in his
endeavors. There would be a consider-
able loss of face for Nir and his superi-
ors if the link were broken. This con-
nection appears to be the only hope
they have for recovering their own
missing soldiers.
-[The Iranian official] has now acted
and likely expects the United States to
respond quickly in turn by delivering
most of the remaining HAWK spare
parts. He probably believes the United
States is also supplying the additional
military equipment that has been
promised.
-If the deliveries do not occur, [the
Iranian official] will lose badly with his
superiors in Tehran and matters could
turn ugly, especially since the Leba-
nese Hizballah captors probably are,
not pleased with the Jenco release.
-If there is not USG contact as a
result of Jenco's release, it is entirely
possible that Iran and/or Hizballah
could resort to the murder of one or
more of the remaining hostages.
In summary, based on the intelligence at
my disposal, I believe that we should con-
tinue to maintain the Ghorbanifar-[Iranian
official] contact and consider what we may
be prepared to do to meet [the Iranian of-
ficial's] minimum requirements that would
lead to release of the rest of the hostages.
Although I am not pleased by segmented
releases of the American hostages, I am
convinced that this may be the only way to
proceed, given the delicate factional bal-
ance in Iran. I also see resolution of the
hostage issue as potentially leading to con-
tacts with moderate factions in Iran that we
may be able to deal with in the longer
term.
(Casey to Poindexter, 7/26/86) 83
On July 26, North wrote to Poindexter that
Cave is departing Geneva tonight to meet
North/Secord in Frankfurt tomorrow
(Sunday) morning. Nir and Ghorbanifar
depart London tomorrow and have called
83 The Maximum Version and the Historical Chronology both
state: "On June 10, Majlis Speaker Rafsanjani, in a speech in
Tehran made guarded reference to Iranian interest in improved
relations with the U.S. On July 26, Father Lawrence Jenco was
released in the Bekka Valley and found his way to a Syrian mili-
tary checkpoint." (Maximum Version 8; Historical Chronology
13)
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[Ghorbanifar's Tehran contact] to meet
them in Frankfurt, GE, Sunday morning.
The purpose of the meeting is to assess
Iranian expectations and ability to release
the remaining Iranian hostages.
(North to Poindexter, 7/26/86) North prepared
talking points for the meeting, which Poin-
dexter approved on July 26. (North to Poin-
dexter, 7/26/86)
-You have seen the President's state-
ment regarding the release of Father
Jenco. This is very much in line with
what your people had suggested.
-Our government remains prepared
to open direct and private discussions
with your government leading to a
normalization of relations.
-We recognize the important role
played by your government in the re-
lease of Father Jenco and regard this
to be a very positive step.
-It is important that there not be any
misunderstandings or false expecta-
tions regarding the release of Father
Jenco.
-On every occasion, including our
meetings in Tehran, we made it clear
that we were not going to barter over
the lives of human beings.
-While we are not empowered to ne-
gotiate with you regarding any further
deliveries of materiel, it is important
that you recognize that the under-
standing we proposed in Tehran is
still operative. We have been instruct-
ed to report back to our government
any changes to this proposal.
-We continue to believe that a direct
channel of communication, which will
prevent misunderstandings is impor-
tant. As we indicated in Tehran, we
are prepared to dispatch a secure sat-
ellite communications team to Tehran
to facilitate this communication.
("North/Cave Talking Points," Tab II to North
to Poindexter, 7/26/86)
North and Cave met with Nir and Ghorbani-
far the afternoon of July 27. North reported:
Lengthy meeting this afternoon with Gorba
and Nir followed by discussion with [the
official in the Prime Minister's office] via
phone. Following are salient points. [The
Iranian official] believes he has demon-
strated his ability to perform and has ex-
pectations we are now prepared to deal.
Despite our earlier and current protesta-
tions that we want all hostages before we
deliver anything, this is clearly not the way
they want to proceed. They see clearly that
the ball is now in our court. In discussion
with [the Iranian official] he repeatedly
asked quote-"When are you going to de-
liver". While [the official] made no specific
threat, he noted that he was under intense
pressure and could not totally control
events. We will call him back 28 July at
1100 Frankfurt time and urge that he come
to Europe for a meeting and to do nothing
rash in the meantime. We are trying to
make this idea attractive-using [his inter-
est in the U.S. establishing] a "special ac-
count" for him as an incentive. Jenco has
expressed a desire to thank the three world
leaders responsible for his release. The
Pope, The Archbishop of Canterbury and
RR. The first two intend to oblige. Can we
deliver on the last? Unodir [unless other-
wise directed] we will call [the Iranian offi-
cial] in A.M. and urge him to meet us in
Europe ASAP. Since it will take him several
days to get authorization to come, we plan
to return to D.C. via Pan Am 061 on 28
July and report to JMP in evening. Please
advise via this channel if other instructions
obtain. Warm regards. North/Cave.
Bottom line, is that if we want to prevent
the death of one of the three remaining
hostages, we are going to have to do some-
thing.
[Handwritten at bottom: "Put this in a
sealed envelope and have Ollie pick it up."
JP]
(Document misdated 6/27/86) Another version
of this message contained the following:
P.S. Please call Dewey and tell him George
will send hard copy to he [sic] and [C/NE,
CIA DO] in A.M. via NIACT.
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(Id.) Yet another version, bearing the word
"done" with a tick mark next to the P.S., has
the following handwritten note: "Read all to
JMP, except P.S. 7/27 1830." (Id.)
According to North's calendar, North met
Jenco in Germany on July 29. On the same day,
he set forth his views on the next steps regard-
ing hostages in a memorandum to Poindexter.
The debrief of Father Jenco has proceeded
well and he continues to cooperate fully
with our team. Though Jenco's geographic
knowledge is understandably limited by the
brief time he was in Beirut before he was
seized and the conditions of his captivity,
he has made every effort to answer our
questions.
[Terry] Waite is accompanying Father
Jenco to meetings with the Pope and the
Archbishop of Canterbury on Wednesday
and Thursday. Father Jenco is scheduled to
meet with the President on Friday, August
1, at 2:00 p.m.
Based on information derived from the
Jenco debrief, our discussions with Ghor-
banifar, Nir, and [the Iranian official]; and
the videotaped and private messages deliv-
ered by Jenco, we have drawn the follow-
ing conclusions:
-Jenco was released as a direct result
of action taken by [the official in the
Iranian PM's office] on or about July
21.
-Though Iranian influence over the
hostage holders is still considerable,
the captors themselves are increasingly
disenchanted with the Iranian relation-
ship:
-The delay between [the Iranian
official's] "instruction" to the cap-
tors on July 21 and the actual re-
lease on July 24 was likely occa-
sioned by the hostage holders
need to find a new prison site, ar-
range for the videotape by Jacob-
sen, place their story in An Nahar.
-The Iranians have been unable
to deter the Syrians from moving
in strength against Hizballah
strongholds in Lebanon.
-The continued reluctance of the
Hizballah itself to follow precise
Iranian instructions on how to re-
lease the hostages is seen as an in-
dication of efforts by Hizballah to
demonstrate at least partial inde-
pendence.
-[The Iranian official] believed that
he had consummated an arrangement
with the Americans through Ghorbani-
far on the terms for release of the hos-
tages.
-[The Iranian official's] expectations
regarding the immediate delivery of
the 240 HAWK missile parts were ap-
parently transmitted to higher author-
in Iran. Discussions with [him]- in
ity
Europe (Sunday, July 27) and calls
from him today indicate that [he] is in
considerable personal jeopardy as a
consequence of not having received
what he believed we promised.
-It is entirely possible that if nothing
is received [the Iranian official] will be
killed by his opponents in Tehran,
Ghorbanifar will be killed by his credi-
tors (they are the beneficiaries of a
$22M life insurance policy), and one
American hostage will probably be
killed in. order to demonstrate dis-
pleasure.
-Although the Dawa 17 in Kuwait
continue to be mentioned as the ulti-
mate demand on the part of the hos-
tage holders, Jenco himself does not
believe this and we have not seen ref-
erence to this issue since our meeting
in Tehran (Tab B).
It is obvious that the conditions for the re-
lease of the hostages arranged between
Ghorbanifarland [the Iranian official] are
unacceptable. 'Nonetheless, we believe that
Ghorbanifar acted on what he considered
to be the following arrangement:
Step 1: One hostage released and $4M to
Ghorbanifar for it~ms removed from the
aircraft in Tehran during the May visit
(Ghorbanifar received the $4M on July 28).
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Step 2: Remainder of 240 parts- plus full
quota of electron tubes (Item 24 on Irani-
an parts list) and 500 TOWs delivered to
Iran.
Step 3: Second hostage released and Ghor-
banifar paid for remainder of 240 parts.
Step 4: 500 TOWs, and 1 HIPAR radar de-
livered.
Step 5: Third hostage released and Ghor-
banifar paid for one radar.
Step 6: Meeting in Tehran to discuss future
followed by release of the last hostage and
delivery of second HIPAR radar.
We believe that the mixture of HAWK
parts and TOWs is designed to satisfy both
the military and the revolutionary guards
in Iran. At this point, [the Iranian official]
will probably be able to retain his credibil-
ity if just the 240 parts are delivered from
Israel. We believe that he can be convinced
to follow-up this delivery with a meeting in
Europe to discuss next steps.
At such a meeting, we should endeavor to
produce a concrete schedule that is agree-
able to both parties and which allows all
remaining hostages to be released simulta-
neously. The Jenco release . . . indicate[s]
that this is clearly within the power of the
Iranians, if they are so inclined. While they
will continue to haggle over prices, timing,
and sequence, the delivery of the 240
should help to assure the Iranians that we
will keep our word. It is important that a
face-to-face meeting occur so that we can
establish the terms rather than having
Ghorbanifar negotiate for us. Finally, even
after the parts are delivered, we still retain
some leverage over [the Iranian official]:
-He has been told that we have video
tapes and photographs of him meeting
with us in Tehran and he is concerned
that we could make these public.
-He also wants assurance of asylum
in the U.S. should "things go wrong."
He has been told that we are prepared
to offer such and need to meet with
him to arrange exfiltration procedures.
We intend to use this ploy as a further
reason for establishing a direct com-
munications link in Tehran.
RECOMMENDATION
That you brief the President regarding our
conclusions on the Jenco release as indicat-
ed above and obtain his approval for
having the 240 HAWK missile parts
shipped from. Israel to Iran as soon as pos-
sible, followed by a meeting with the Irani-
ans in Europe.
(North to Poindexter, 7/29/86) Poindexter ini-
tialed "Approve" and wrote: "7/30/86. Presi-
dent approved. JP." A member of the Hostage
Location Task Force reported, on July 30, that
Charlie Allen advises that the President
today approved further shipments of arms
to Iran in response to the release of Rev.
Jenco. Apparently, internal White House
disagreements over who was responsible,
the Syrians or the Iranians and, ultimately,
the [Ghorbanifar-Iranian official] connec-
tion.
The Vice President was in Israel on July 29.
While there, he met with Nir. The Vice Presi-
dent told the Board that, before the meeting,
he had been uneasy, and tried to call Poin-
dexter.
Failing to contact Poindexter, Mr. Bush spoke
to North who indicated that the Israeli Prime
Minister thought the meeting with Mr. Nir was
important for the Vice President to meet with
Nir. According to the Vice President, North had
originally requested that the Vice President
meet with Nir on the basis that the Israeli Prime
Minister thought the meeting was important.
North's position was apparently confirmed when
after the meeting with Nir, the Israeli Prime
Minister asked Mr. Bush how the meeting had
gone. The Vice President indicated that there
had been no discussion of the Nir meeting be-
tween himself and the Israeli Prime Minister.
(W. Clark McFadden II, "Discussion with the
Vice President," 12/29/86) The Vice President
expressed concern to the Board about what he
perceived as the extent to which the interests
of the United States
were in the grip of the Israelis. Now, ac-
cording to the Vice President, the Israelis
themselves may be in some sense seeking
cover. Vice President Bush related that his
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discussion with Mr. Nir was generally
about counterterrorism. There was no dis-
cussion of specifics relating to arms going
to the Iranians, e.g., the price of TOW
missiles was never raised.
(Id.)
The Vice President's Chief of Staff, Craig
Fuller, attended the meeting and memorialized
THE VICE PRESIDENT'S MEETING
WITH MR. NIR-7/29/86 0735-0805
PARTICIPANTS: The Vice President, Mr.
Nir, Craig Fuller
DATE/TIME: 7/29/86 0735-0805
LOCATION: Vice President's suite/King
David Hotel, Jerusalem
1. SUMMARY. Mr. Nir indicated that he
had briefed Prime Minister Peres and had
been asked to brief the VP by his White
House contacts. He described the details
of the efforts from last year through. the
current period to gain the release of the
U.S. hostages. He reviewed what had been
learned which was essentially that the radi-
cal group was the group that could deliver.
He reviewed the issues to be considered-
namely that there needed to be ad [sic] de-
cision as to whether the items requested
would be delivered in separate shipments
or whether we would continue to press for
the release of the hostages prior to deliver-
ing the items in an amount agreed to pre-
viously.
2. The VP's 25 minute meeting was ar-
ranged after Mr. Nir called Craig Fuller
and requested the meeting and after it was
discussed with the VP by Fuller and North.
Only Fuller was aware of the meeting and
no other member of the VP's staff or trav-
eling party has been advised about the
meeting. No cables were generated nor
was there other reporting except a brief
phone call between Fuller and North to
advise that "no requests were made."
3. Nir began by indicating that Peres had
asked him to brief the VP. In addition,
Nir's White House contacts with whom he
had recent discussions asked him to brief
the VP.
4. Nir began by providing an historical
perspective from his vantage point. He
stated that, the effort began last summer.
This early phase he said "didn't work
well." There were more discussions in No-
vember and in January "we thought we
had a better approach with the Iranian
side," said Nir. He said, "Poindexter ac-
cepted the decision."
5. He characterized the decision as "having
two layers - tactical and strategic." The
tactical layer was described as an effort "to
get the. hostages out." The strategic layer
was designed "to build better contact with
Iran and to insure we are better prepared
when a change (in leadership) occurs."
"Working through our Iranian contact, we
used the hostage problem and efforts there
as a test," suggested Nir. He seemed to
suggest the test was to determine how best
to establish relationships that worked with
various Iranian factions.
6. Nir described Israel's role in the effort
by saying, "we activated the channel; we
gave a front to the operation; provided a
physical base; provided aircraft." All this to
"make sure the U.S. will not be involved in
logistical aspects." Nir indicated that in the
early phase they "began moving things
over there." 84
7. Before a second phase a meeting was
desired. Nir indicated a February meeting
took place with "the Prime Minister on the
other side." Nir did not make it clear who
else attended the meeting. He said the
meeting was "dramatic and interesting."
He said "an agreement was made on 4,000
units-1,000 first and then 3,000." The
agreement was made on the basis that we
would get the group," Nir said. "The
whole package for a fixed price," he said.
84 Charles Allen told the Board that he remembered the
memorandum as reporting Nir to have talked about
the Israelis initiating, taking the initiative, proposing this, sort
of directing this. I think probably overstated my understand-
ing of the situation.
Indeed, I think they were proposing it and pressing it on the
United States, but based on my understanding and all the
memoranda that I have put together is that Mr. McFarlane saw
a real strategic need to pursue this effort.
And also, an ancillary aspect was to solve the hostage
problem in order to move to broader relationships.
(C. Allen (2) 13-14)
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8. Although there was agreement the other
side changed their minds and "then they
asked for the other items," according to
Nir. "We were pleased because these were
defensive items and we got to work with
the military," said Nir. He continued,
"there were 240 items on the list we were
provided and we agreed to it."
9. A meeting was organized for mid May in
Tehran to finalize the operation. The VP
asked Nir if he attended the meeting and
Nir indicated he did attend. Nir said, "two
mistakes were made during this phase."
"Two people were to be sent to prepare
for the meeting but the U.S. had concerns
about McFarlane," according to Nir. He
described the meetings as "more difficult-
total frustration because we didn't pre-
pare." And he said, "their top level was
not prepared adequately." During the
meeting in Tehran the other side kept re-
minding the group that "in 1982 there was
a meeting which leaked and the Prime Min-
ister was thrown out of office." Nir said
that at the end of the May meeting, "they
began to see the light." "McFarlane was
making it clear that we wanted all hostages
released," Nir reported and, "at the last
moment the other side suggested two
would be released if those at the meeting
stayed six more hours." According to Nir,
"the Deputy Prime Minister delivered the
request (to delay departure) and when the
group said `no,' they all departed without
anything."
10. According to Nir, "the reason for delay
is to squeeze as much as possible as long
as they have assets. They don't believe that
we want overall strategic cooperation to be
better in the future. If they believed us
they would have not bothered so much
with the price right now." Further, accord-
ing to Nir, "there are serious struggles
now within the Iran power groups. Three
leaders share the view that we should go
ahead but each wants to prove his own
toughness."
11. Turning to what Nir said was the final
or most recent phase, he reported, "we felt
things would just die if we didn't push for-
ward to see what could be delivered. They
asked for four sequences, but we said no to
talks until they showed something."
12. According to Nir, he told them about
10 days ago he would cancel the deal.
Then nine days ago their Prime Minister
called saying that they were taking steps to
release one-the Priest. The second one to
be released would be Jacobson. The Prime
Minister also said that one would be re-
leased and then "we should give some
equipment." Nir indicated to the VP that
the bottom line on the items to be deliv-
ered was understood to be the same or
even less but it was not the way the deal
was originally made. The items involved
spares for Hawks and TOWs. No denial or
approval was given according to Nir. Nir
said he made it clear that no deal would be
discussed unless evidence is seen of a re-
lease.
13. On Tuesday or Wednesday a message
was intercepted between Tehran and the
guards according to Nir. On Friday, three
hostages were taken out and on Saturday
Janco [sic] was taken out, put into a trunk
and driven to a village in the Bakka [sic]
Valley. Nir then described what Janco re-
ported with regard to the conditions under
which he was held and what he knew of the
other hostages including Buckley. (I
assume we have detailed briefing already.)
The VP asked Nir if he had briefed Peres
on all of this and he indicated that he had.
14. Nir described some of the lessons
learned: "we are dealing with the most
radical elements. The Deputy Prime Minis-
ter is an emissary. They can deliver . . .
that's for sure. They were called yesterday
and thanked and today more phone calls.
This is good because we've learned they
can deliver and the moderates can't. We
should think about diversity and establish
other contacts with other factions. We have
started to establish contact with some suc-
cess and now more success is expected
since if these groups feel if the extremes
are in contact with us then it is less risky
for the other groups-nothing operational
is being done . . . this is contact only."
15. Nir described some of the problems
and choices: "Should we accept sequenc-
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ing? What are alternatives to sequencing?
They. fear if they give all hostages they
won't get anything from I. '. If we do want
to move along these limes we'd have to
move quickly. It would be a matter still of
several weeks not several days, in part be-
cause they have to move the hostages
every time one is released."
16. Nir concluded with the following
points: "The bottom line is that we won't
give them more than previously agreed to.
It is important that we have assets there 2
to 3 years out when change occurs. We
have no real choice than to proceed."
17. The VP made no commitments nor did
he give any direction to Nir. The VP ex-
pressed his appreciation for the briefing
and thanked Nir for having pursued this
effort despite doubts and reservations
throughout the process.
BY: CRAIG L. FULLER [initialed:] "CF 8/6/86"
IX. New Wine in Old Bottles?
July-November 1986
Jenco's release coincided with expressions of
interest by Iranian officials in improved rela-
tions with the United States. At the same time,
three Americans remained hostage in Lebanon.
American officials, already dissatisfied with
Ghorbanifar as an intermediary, were ready to
try other channels of communication with Iran.
American goals remained unchanged.
A. Sequentialism
Pursuant to the President's decision of July
30, 1986, on August 3, the United States deliv-
ered twelve pallets of HAWK spare parts to
Iran. ("Adams" [Secord] to [?North], 8/2/86)
Israel provided logistical assistance. (CIA/IG
Chronology 28; Maximum Version 8; Historical
Chronology 13) 85 On August 2, Secord report-
ed:
1. Planning to operate 707 TAIL No. EI-
ptm fm Ben Gurion to Bandar Abbas.
85 The Historical Chronology contains the following summary
of events in August:
On August 3, the remaining three pallets (less than 1/2 plane-
load) of electronic parts for Iranian anti-aircraft defenses
(HAWK missile sub-components) arrived in Tehran. As in all
flights to/from Iran this delivery was made with an Israeli Air
Force aircraft (707) using false flag markings. Timing of the
Cargo Wt. 48000 lbs. 12 Pallets. ETD
2400L-2100Z and ETA is 0730L-0400Z.
Rt of flt is down red sea, East btwn S.
YEMEN and Socotra to vic Char Bahar,
Direct to Bandar Abbas. Expect EI-PTM to
contact Bandar Abbas approach control,
circa 0700L-0330Z on VHF 124.2 Pt. 2. Pls
ensure authorities in Bandar Abbas know
we are coming and are ready to off load
and refuel the 707. Fuel is expected to be
free as in the past. Past experience shows
that the authorities at Bandar Abbas are
not in the picture and much confusion re-
sults. pls get Sam [O'neil] to emphasize
this to the Australian [coverterm for offi-
cial in Iranian Prime Minister's office]. We
wd like to get out of Bandar Abbas and
delivery was based on coordination among U.S., Israeli and
Iranian officials.
In early August 1986, the contact with the Iranian expatriate
[Ghorbanifar] began to focus exclusively on the willingness of
the USG to provide military assistance to Iran in exchange for
hostages and we sought to establish different channels of com-
munication which would lead us more directly to pragmatic
and moderate elements in the Iranian hierarchy. In mid-
August, a private American citizen (MGEN Richard Secord,
USAF [Ret.]) acting within the purview of the January Covert
Action Finding, made contact in Europe with ' ? ' a relative
a a ' of a senior Iranian official a ? ?. With the assistance of
the CIA, this Iranian was brought covertly to Washington for
detailed discussions. We judged this effort to be useful in es-
tablishing contact with a close confidant of the man judged to
be the most influential and pragmatic political figure in Iran
'). These discussions reaffirmed the basic objectives of the
U.S. in seeking a political dialogue with Tehran. We also pro-
vided assessments designed to discourage an Iranian offensive
and contribute to an Iranian decision to negotiate an end to
the war.
(Historical Chronology 13) The Maximum Version of the deliv-
ery of spare parts omits the last two sentences in the first para-
graph quoted above. (Maximum Version 8) The Historical Chro-
nology added the following sentence to the second paragraph
quoted above, from the Maximum Version (id at 8-9): "The as-
sessments also detailed the Soviet threat to Iran." (Historical
Chronology 13)
Cave told the Board that "the decision to get rid of Ghorbani-
far was on our part to clean this up operationally, so that we had
better control." (Cave 25)
Furmark told the Board that, when he and Ghorbanifar dis-
cussed
"the inflated pricing" in August, Ghorbanifar said the money
may have gone to the Contras, or the Afghans, or someplace.
And he even said-and he said that North told him that now
they've passed this bill, if we don't complete this transaction
we'll pay you the money back, the $10 million; they passed the
Aid to the Contras bill-so Ghorbanifar said, if they never
complete the deal we'll still get our money back because now
they can, you know.
So that's an inference that the money was used and they'll
repay it back.
(Furmark 17)
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return here in Daylight hours. Pt. 3. 707
will transmit ops normal position reports
in blind to IAF command post on HF/SSB
Freqs Night: 8739 or 5605 or 10475 or
3115; Day: 8858 or 11290 or 12600. Re-
ports will be given abeam jidda, Socotra
and approaching B. Abbas. Pt. 4. It is now
7 hrs til planned takeoff. If coord w/
Tehran cannot be accomplished, we plan
24 hr delay.
("Adams" [Secord] to [?North], 8/2/86)
Shortly before taking a vacation. North went
to London on August 7. (North calendar) 86
Toward the end of August, after returning
from vacation, North reported to Poindexter
the latest Iranian and Nicaraguan information.
We have had an intensive series of discus-
sions w/ Nir, Gorba and [Ghorbanifar's
Tehran contact] over the past 48 hrs. It is
not clear whether Nir/Gorba are aware
that we are talking directly to . . . . Basic
proposal as outlined to you over phone
remains unchanged; i.e., sequential re-
lease for sequential deliveries. We must,
however resolve the problem of how to
provide the parts which we promised but
do not have in stock. [C/NE] has as-
signed an officer to work w/ Army logistics
in an effort to find (or manufacture, if nec-
essary) the missing/wrong items. Both
Gorba and [his Tehran contact] have been
told not to ship the 63 defective/wrong
parts back and that we will backhaul them
86 North requested travel orders to go to Frankfurt on August
6. According to the NSC staff Chronology of Events, dated 11/
20/86, the first American contact with [The] relative occurred in
London and Madrid on August 10. North wrote McFarlane on
October 3 that [the] relative came into contact with us through
Dick Secord who met him in Brussels while arranging a pick-up
for our friends in a certain resistance movement." (North PROF
note to McFarlane, 10/03/86, 22:08:16) North was on leave when
the Director of Central Intelligence briefed Poindexter on Cave's
meeting, July 25, with Tabatabai in London. Vincent M. Cannis-
traro of the NSC staff wrote Poindexter that Tabatabai "claims to
be a channel to Rasfanjani and has passed the usual message via
Cave that the Iranian government wishes to establish a regular
channel to the U.S. but is constrained until after the end of the war
with Iraq. (We also know that Tabatabai has made contact with
some of the Iranian exile groups in Paris-particularly the Ali
Amini crowd. His bonafides [sic] as an authentic channel to
Rasfanjani, however, have yet to be proven.)" (Cannistraro to
Poindexter, 8/13/86)
on the next delivery. Copp has been told
to keep a crew in readiness for a further
mission and has been apprised of the gen-
eral parameters of the arrangement. He
notes that from a logistics perspective, the
sequential arrangement is preferable in
that it requires only one crew and one A/C
throughout thus reducing visibility and en-
hancing OPSEC. We should have a better
fix on availability of parts early in the week
and meanwhile have told Gorba and [the
official in the Prime Minister's office] that
both sides should bring a technical expert
familiar w/ the appropriate system to the
meeting. [The Iranian official] told Geo.
[Cave] this morning that it wd be best to
bring an expert w/ us to Tehran for the
meeting and he could see for himself what
the problems are. Having discussed this
proposal this a.m. w/ both Clarridge and
Cave we all believe this to be the best
course of action, especially if we can leave
our "technical expert" and a communica-
tor behind in Tehran. CIA is now looking
for a good Ops officer who is familiar w/
the system. Dick already has one identified
but CIA wd prefer to use its own officer if
they can find one. We should get back to
[the Iranian official] w/ an answer by
Monday [August 25]. All 'of us rate the risk
to be relatively low, particularly given the
experience we had in May. If you approve,
we wd use [false] documents (as we did in
May) and go in via the Iran Air flight to/
from Frankfurt. Estimated time on mission
wd be two days. We wd plan to go over a
weekend to reduce visible absence fm D.C.
NEW SUBJECTS:. . .
On the hostages-I just don't know. One
of the things that has concerned me for
some time was the report that you got
from Copp [Secord] about how the parts
really help their problem for lack of test
equipment, not ordering all of the right
parts and the lack of knowledge of the
system. If we get into a sequential arrange-
ment, we really have to be prepared to de-
liver a lot more material and arrange a
rather continuing technical agreement. Of
course that could all be done, but after the
hostages are released. I just don't see how
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we can have such a continuing relationship
until that happens. . . . Before we agree
to a sequential arrangement I think we
ought to straighten out our committment
on the 240-that alone will help establish
our good faith that we aren't trying to
cheat them. Then we should wait a bit and
see what [a friendly country approach] de-
livers.. . .
(Poindexter PROF note to North, reply to note
of 8/23/86, 15:52) On August 25, Secord met
with the Relative of a powerful Iranian official
(the "Relative").
Secord reported to North:
1. Following is summary report of three
long meetings-total circa eight hours-
with Iranian gp visiting Brussels. Meetings
took place August 25 in three segments.
Iranian side was [the Relative], and [a]
former Iranian Navy officer-20 years-and
alleged London businessman now-defi-
nitely an important agent for Rafsanjani gp
and possibly Savama. Our side included
me-true name-Abe [Hakim] in true
name, and [another Iranian expatriate], our
agent. Meetings constituted comprehensive
tour de force regarding Iran/Iraq War, Ira-
nian views of U.S. and other western poli-
cies, Soviet activities, activities of nearly all
important Iran government figures, hostage
matters, activities in the Hague, and Iranian
forces equipment and materiel shortages.
classified as a crook. [The Relative's]
wealth of current information but also vol-
unteers to discuss hostage matter and USG
connection with Rafsanjani in next 10 days.
He will then return to Brussels for meeting
with us. [The Relative] said categorically
he would not screw up [official in Prime
Minister's office, Cave] efforts but would
carefully examine them for feasibility. [The
relative] will recommend two courses to
Rafsanjani:
a. Assist in current . . . effort [by offi-
cial in Prime Minister's office] to re-
lease hostages or start new effort.
b. Provide us with current intelligence
on their location, etc., . . . [The rela-
tive] says there are many specific
things USG can do in the Hague and
on Voice of America programming to
help start USG/GOI talks-he will
give us documents on these subjects at
next meeting.
3. Numerous military supply problems
were discussed and I will detail these for
you later this week in Washington. FYI:
They need oil barter deals.
4. My judgement is that we have opened
up new and probably much better channel
into Iran. This connection has been effec-
tively recruited and he wants to start deal-
ing. Recommend you plan on bringing
George to next meeting in two weeks or
less.
2. Special interest items included claim
that an "Al Haig gp" and "a Senator Ken-
nedy gp" have recently tried to meet with
[the Relative]-he has declined-he wants
to deal with the Presidents [sic] representa-
tives. [The Relative] is very sharp, well
educated youngman [sic]-speaks no Eng-
lish. [He] is well-known favorite of [Majlis
speaker] Rafsanjani . . . They badly need
air defense items, armor spares, TOWs,
gun barrels, helo spares, and tactical intel-
ligence. I told them all things negotiable if
we can clear the hostage matter quickly.
[The Relative] knew great deal about
McFarlane msn to Thn. He also knows all
about [the official in the Prime Minister's
office], Gorba, Israeli connection, and this
gps financial greed. Gorba was nastly [sic]
(Secord ("Copp") to North, 8/26/86) 87
On August 27, the Relative informed Secord
that the Iranians were trying to buy TOWs in
Madrid at a cost of $ 13,000 each. Secord
thought it was "a big steal." The United States
was not involved, and the Relative reportedly
worried that the transaction could upset the
87 An undated, unsigned note, adds a grace note to Secord's
message:
[The Relative] claims he can be of great assistance in
establishing the right relation. The Hague, he claims, is the
best avenue.
NOTE: The report goes into detail regarding the above 3
items.
E. [Secord's Iranian expatriate agent's] recommendations:
Try everything not to lose this man if he can not be a
representative of [Rafsanjani] he definitely is trainable to be
an excellent source in country.
P.S. [Rafsanjani] participated with Hafezalasad for release of
Hostages. The release of the rest is possible.
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effort to establish a new relationship with the
United States. (Secord to [?North], 8/27/86;
North to Poindexter, 9/2/86) 88
On September 2, North formally proposed
trying to use the new connection with the Rela-
tive. He wrote Poindexter: NEXT STEPS WITH
IRAN
Ongoing Activities
There are currently five separate activities
underway which are related to resolution
of the American hostage situation and a
potentially broadened relationship with the
Government of Iran:
-[Third Country] Initiative: [The For-
eign Minister] has been given a mes-
sage for delivery to the Iranian For-
eign Ministry indicating a willingness
on the part of the USG to improve re-
lations with Iran and to undertake
direct, private discussions with respon-
sible Iranian officials. No response has
yet been received.
-[Another Third Country Connection]:
[It's] Ambassador in Tehran during a
meeting with Rafsanjani discussed the
hostage situation and further U.S.-Ira-
nian contacts. Rafsanjani, for the first
time, suggested certain materiel (F-14
spare parts and embargoed helicop-
ters) as items that could cause Iran to
act on behalf of the American hos-
tages. Per instructions, [that govern-
ment was] advised that such "barter
arrangments" were unacceptable to
the U.S. and contrary to our policy.
[They] remain willing to advise Raf-
sanjani that we are prepared to hold
private discussions with the Iranians.
-[The Relative]: In coordination with
the CIA, Copp and two of his associ-
ates met for two days last week with
[the Relative] indicated a full aware-
ness of the May trip to Tehran and the
ongoing activity involving [the official
88 At North's request, on September 2, Charles Allen tipped
law enforcement officials of another possible arms transfer to
Iran from Houston. Ghorbanifar and Khashoggi were thought to
be involved. (C. Allen, Memorandum for the Record, 9/2/86;
Earl PROF note to North, 8/28/86, 19:09)
in the Prime Minister's office] and
Ghorbanifar. [The Relative] clearly in-
dicated that he had c specific mandate
from [Rafsanjani] to meet with USG
official seeking a means for "getting
beyond the hostage issue" and [the
Relative] starting a dialogue with the
USG. [The Relative] has returned to
Tehran and has since informed us of a
pending TOW sale through Madrid
and further indicated that he is pre-
pared to proceed with further discus-
sions. He has further noted that the
government in Tehran is very con-
cerned over Soviet activities in the
Gulf and is aware that a "final victory"
over Iraq will not be possible. There is
considerable evidence that [the Rela-
tive] is indeed a bonafide [sic] inter-
mediary seeking to establish direct
contact with the USG for Rafsanjani's
faction within the Government of Iran.
-[Official in Prime Minister's Office]/
Ghorbanifar: Since the release of Father
Jenco, that portion of the 240 parts
which was available has been deliv-
ered. The Iranians have advised
through Nir that at least 63 89 of the
items delivered are improper or inop-
erable. Further, 299 of the items
promised have not been received.
They have offered to return the dam-
aged/incorrect parts, but have been
told to return them on a "future deliv-
ery flight." The Iranians continue to
insist on a sequential delivery process
and in a meeting in London with Nir a
specific seven step delivery/release
pattern was proposed:
-Deliver 500 TOWs and the 39
electron tubes for the HAWK
system previously requested.
-[Hostage] released.
89 In a number of telephone conversations taped by Cave early
in September, Cave and the Iranian official talked about the
problems associated with what the Iranian official said were 65
"broken" parts. (Transcripts of telephone calls) The confusion
over the number of spare parts to be shipped apparently results
from the fact that certain of the line items requested included
multiple parts. (Army/IG Report)
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-Deliver 500 TOWs and one of
the HAWK radars previously re-
quested.
-[Hostage] released.
-Meeting in Tehran to discuss
broadened relationship, Soviet in-
telligence, etc.
-Deliver remaining radar and
1000 TOWs while we are in
Tehran.
-[Hostage] released and Buck-
ley's body delivered.
CIA concurs that the [Iranian official]/
Ghorbanifar connection is the only proven
means by which we have been able to
effect the release of any of the hostages.
Though the sequential plan is not what we
prefer, the commodities and quantities are
within the framework of our original un-
derstanding. CIA believes that we should
proceed expeditiously with the Ghorbanifar
connection and pursue the other five alter-
natives as subsidiary efforts.
(Tab I, "Next Steps with Iran," to North to
Poindexter, 9/2/86) The copy obtained by the
Board of North's Action Memorandum, to
which this document is attached, shows a check
mark next to the word "Approve".
North was impatient for Poindexter's approv-
al of the plan. He wrote McFarlane that
evening:
We still have no response fm JMP re pro-
ceeding w/ the sequential release proposal
outlined to you some time back. Have now
undertaken to have Casey raise same w/
JMP tomorrow at thr weekly mtg. The
things one must do to get action. Am
hopeful Bill can push hard enought [sic] to
move on the matter. Nir will be here next
week and will raised [sic] enough hell to
move it if it hasn't all fallen apart by then.
The basic problem, as you know, is that we
dither so long on these things that by the
time we're ready to go to bat, the rules
have changed again. I agree w/ yr assess-
ment that the next mtg in Tango [Tehran]
is unlikely to be for some time. My hope is
that we will not be trying to adjust yr
sched for next June for this mtg.
(North PROF note to McFarlane, 9/3/86,
20:12:50)
At the same time, the families of the hostages
called North to complain about the " `deal' "
being made for Daniloff, a U. S. News & World
Report journalist arrested in Moscow, apparent-
ly in retaliation for the arrest in New York of a
suspected KGB agent. North reported on Sep-
tember 8:
Some, like Jacobsen's son Paul accused us
of being callous to the LebNap victims-
and unwilling to pressure the Kuwaitis be-
cause the issue has "slipped from the
public eye and that we are willing to make
deals for Daniloff because it was more im-
portant to the President because of the vis-
ibility." All indicated that they are plan-
ning to hold a press conference later this
week to "turn the heat on" the Administra-
tion. My rejoinder that no deal for Daniloff
was in the mill was, because of earlier
press coverage to the contrary, not taken
seriously. Bob Oakley has made a similar
effort w/ the same unfortunate results.
This afternoon, Louis Boccardi, President
of the AP came to see me. He is supportive
of our policy on terroprism [sic] and on
the hostage issue-and notes that we are
not credible in saying that a deal was not
in the making. He pointedly noted that this
could well have an effect on Terry Ander-
son's fate in that the Hizballah could not
but take heart from the talk of our willing-
ness to deal with the Soviets over Daniloff.
While it was an amiable discussion, I was
impressed by his concern that no matter
what we do now re Daniloff, we are going
to be perceived as having made a deal that
will hurt chances for Anderson's release
and jeopardize his other reporters else-
where. He made cogent observation that I
think is relevant: "I sure hope that you are
dealing with someone regarding Terry and
the others in Lebanon-and that you can
keep it quiet-that's the only way that any
of this will work."
(North PROF note to Poindexter, 9/08/86,
19:08:10)
On the same day, North updated his paper
on "Next Steps with Iran" for Poindexter to
use with the President. In North's view:
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[The Relative] continues to indicate that he
has a specific mandate from [Rafsanjani] to
meet with USG officials seeking a means
for "getting beyond the hostage issue" and
starting a dialogue with the USG.
-[Iranian official]/Ghorbanifar:? Pursuant
to guidance, efforts were made over
the weekend to convince [the Iranian
official] to release of [sic] all three
Americans simultaneously. He stead-
fastly rejected this proposal citing the
intransigence of the captors and Irani-
an inability to ensure results.
-Since last week, CIA and Army Lo-
gistics have located a significant
number of HAWK parts which had
previously been listed as "unavail-
able." We now believe that the total
"package" will be sufficient to entice
the Iranians to proceed with the se-
quential release pattern proposed in
the London meetings.
-Since Sunday [September 7], [the
Iranian official] has sought, in dozens
of calls, to contact Abe [Hakim],
Goode [North], Sam [Cave] and Copp
[Secord]. This afternoon, when Sam
returned call to him he told Sam that
his "boss approved of the meeting that
was to take place" and referred specifi-
cally to the meetings two weeks ago
with [the relative] in Brussels. CIA
evaluates this information as confirma-
tion that Rafsanjani may be moving to
take control of the entire process of
the U.S. relationship and the hostages.
Other Issues
This weekend, . . . an eleven minute ad-
dress by the Shah's son [was broadcast]
over Iranian T.V., by pirating the national
network broadcast frequency. This broad-
cast reportedly sparked protests in Tehran
and elsewhere by supporters of the Shah's
family. [The Iranian official], in one of his
calls to Sam, asked pointedly how it was
that we could profess to "accept the Irani-
an revolution as fact". and still sponsor
such an event.
Separate intelligence reporting indicates
that a major Iranian offensive is likely to
occur on/or about Monday, September
22-the anniversary of Iraq's attack against
Iran in 1980. Given the urgency of calls
from Iran and Rafsanjani's apparent will-
ingness to endorse U.S./Iranian discus-
sions, Iran may be making all possible at-
tempts to acquire requisite arms to support
this "final offensive."
Director Casey conducted a review of the
Iranian project today and has directed his
people to initiate necessary preparations
for acquiring the parts promised in earlier
discussions with the Iranians. CIA contin-
ues to believe that the [Iranian official]/
Ghorbanifar connection is the only proven
means by which we have been able to
effect the release of any of the hostages.
Though the sequential plan is not what we
prefer, the commodities and quantities are
within the framework of our original un-
derstanding. CIA believes that we should
proceed expeditiously with arrangements
to implement the sequential plan proposed
by [the Iranian official]-with hopes that
we could improve on it in discussions with
Rafsanjani's representatives when they
arrive in Europe. In this regard, our
window of opportunity may be better than
it will ever be again, if we are able to con-
summate the release of the hostages before
the Iranian offensive begins.
(Tab I ("Supplement Next Steps with Iran") to
North to Poindexter, 9/8/86) North also at-
tached a report from Charles Allen about a
threat to kill the hostages. Allen wrote that
"we" believe that the captors were frustrated
that they were no closer to freeing the Dawa
prisoners than when they captured Buckley.
More and more, we suspect that some Hiz-
ballah leaders would be willing to settle for
the release of the Americans and French in
exchange for Shia prisoners held by An-
toine Lahad's Southern Lebanese Army.
(Allen to Poindexter, 9/8/86, Tab II to North
to Poindexter, 9/8/86)
The President considered the new Iranian
interlocutor, the prospects for a hostage re-
lease, and the possibility of a rescue operation
at his morning briefing on September 9.
(McDaniel log) Later that day, North and Poin-
dexter discussed the hostage problem. Allen re-
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ported to the Director of Central Intelligence
on September 10 that he had seen North short-
ly after this meeting. Allen wrote:
2. Poindexter has given Ollie new guidance
on the American hostages, namely:
-Ollie is to continue to develop links
to the Iranian Government through
Albert Hakim and Dick Secord of
Stanford Technology Associates.
(Hakim, as you are aware, has links to
[the Relative]. [The Relative] appar-
ently is attempting to arrange for Ollie
and George Cave to meet with Rafsan-
jani, presumably with the next ship-
ment of arms to Tehran.)
-Ghorbanifar will be cut out as the
intermediary in future shipments of
cargos to Iran, if at all possible. To cut
Ghorbanifar out, Ollie will have to
raise a minimumm [sic] of $4 million.
-If there is no other channel for fi-
nancing future arms shipments, then
Ghorbanifar will be used as a last
resort.
3. Ollie is greatly relieved by Poindexter's
decisions because he feared that John and
the President would shut down completely
this back channel to Iran because of
the kidnapping yesterday of Frank
Reed.90 . . .
90 On September 9, Cave informed [the official in the Prime
Minister's office] by telephone. Cave informed [him] that Islamic
Jihad had seized another hostage. [The Iranian office] said "I
know nothing of this. I have no news." (Transcript, 9/10/86)
Cave explained that the kidnapping had been undertaken by
"Mugniyyah's group." On September 8, Allen had written Poin-
dexter that
[n]o threat from Mughniyah should be considered idle. He is a
violent extremist capable of impetuously killing the hostages.
Yet he does not operate without constraints, among them:
-Iran, which certainly has significant influence over the cap-
tors, including Mughniyah. We doubt that Iran wants the hos-
tages disposed of without recompense,
-other Hizballah leaders, who probably see in the hostages a val-
uable lever over the US and France, and an indirect means of
deterring the Israeli Defense Forces from air attacks on Hizbal-
lah facilities in the Biqa', and
-his own assessment of his self-interest, which would likely reflect
that the cost of holding the hostages is minimal whereas killing
them would run a serious risk US or French retaliation. As for
conducting terrorist efforts against the Gulf states, Mughniyah
could certainly do that without killing the hostages.
(Allen to Poindexter, 9/8/86, Tab II to North to Poindexter,
9/8/86) Cave told [the Iranian official] that
[Handwritten note]-Reed released imme-
diately
(C. Allen to DCI, 9/10/86)
i
On September 10, Nir met with Poindexter
and North in Washington. To prepare Poin-
dexter for the meeting, North wrote:
Nir is coming to the U.S. at the urgent re-
quest of Prime Minister Peres. Incoming
PM Shamir and outgoing PM Peres have
agreed that Nir will remain in his current
capacity after the change of government in
October. You will be meeting with Nir the
day before you meet with Defense Minister
Rabin. It is likely that Nir has been given
the task of approaching the USG on the
matter of the hostages and counter-terror-
ism-leaving to Rabin broader security
issues.
Nir arrives in the wake of renewed terrorist
attempts against Israel, the Istanbul Syna-
gogue attack, and the seizure of another
American in Beirut. The Israeli govern-
ment has been anxious to consummate the
hostage release plan worked out with Iran.
Undoubtedly, Peres would like to achieve
the release of the Israeli soldier believed to
be held by Hizballah before leaving office
in October. The Israelis recognize that this
morning's seizure of another American in
Beirut jeopardizes all previous plans in this
regard.
It is important to note that Nir has become
partially aware of our contact with [the
Relative]. He is not aware that we have
been advised that the Iranian delegation
will be headed by Rafsanjani's brother
Mahmoud Rafsanjani, the former Ambassa-
dor to Damascus. The Israelis were initially
concerned that the USG was moving to es-
tablish a separate channel which would not
this matter (Reed) has got to be settled as soon as possible.
Please look into it and settle as soon as possible because our
boss is very very mad. The boss called me at seven and asked
me what was going on, then about an hour ago the islamic
jihad [sic] announced that they had taken him hostage. He
lkthe [sic] head of a college in Beirut, his name is Reed.
[The Iranian official]. Yes.
Slam O'neilj. You look into this matter, and I will call you this
afternoon at about 8 your time, okay? Will you be at home?
[The Iranian officials]. Yes, yes, yes. (very dejected).
(Transcript, 9/9/86) Mughniyah's brother-in-law was one of
the Da' Wa prisoners in Kuwait.
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include the release of the Israeli soldier
seized in February. Under instructions, Nir
advised that his government's position re-
mained as follows:
-The Government of Israel has sup-
ported this joint effort for over a year
and has not at any time acted unilater-
ally.
-The Government of Israel expects
that the effort to obtain the release of
hostages held in Lebanon will contin-
ue to be a joint endeavor and include
U.S. demands for the release of the Is-
raeli hostage.
Nir has been told that we will continue to
support these two objectives and that the
U.S. and Israel will work together to that
end.
Your talking points at Tab I provide a ra-
tionale for how contact was established
with Rafsanjani and how we expect to pro-
ceed. Please note that your talking points
indicate that Nir will participate in these
discussions. Nir will also be meeting with
Director Casey, the OSG-TIWG principals,
and Father Jenco, and has asked to meet
with the Vice President-who he met with
in Israel. The Vice President has not yet
agreed to this meeting.
RECOMMENDATION
That you use the points at Tab I during
your meeting.
Talking Points
Meeting with Amiram Nir
-Glad we could have this opportunity
to talk again. Understand you have a
number of important meetings during
your four days here.
-We are certainly pleased that you
will be continuing in your current ca-
pacity during the political transition in
October.
-I believe our joint efforts to safely
recover the hostages in Lebanon and
to broaden our relationships with Iran
are important to both our nations.
-The President recognizes that were
it not for your efforts that Weir and
Jenco would not yet be free.
-We are committed to continuing our
joint efforts to achieve the release of
all of our citizens-yours and ours.
-In that spirit of cooperation, I want
to make you aware of an opportunity
that we became aware of last week.
-In the process of investigating a
possible illegal diversion of TOW mis-
siles to Iran, Copp made contact with
an agent in [country deleted] working
the sale.
-The European agent indicated that
[the Relative] was involved with this
purchase. Copp met with [the Rela-
tive] in Brussels on August 25, 1986
and advised him that it will not be
possible to obtain TOW missiles with-
out the help of the USG.
-[The Relative] . . . , was clearly in-
terested in this possibility and also
raised the following points:
-He was checking on obtaining
TOWs for Moshen [sic] Rafsanjani
who is Speaker Rafsanjani's broth-
er, who suspected the $16 million
deal would not be possible.
-[The Relative] had been probed
by representatives of Senator Ken-
nedy and former Secretary of
State Haig concerning the possi-
ble release of the hostages.
-[The Relative] also knew full
details of our meetings in Tehran
last May to include the fact that
"Miller was an Israeli."
-Queried Copp re Iran-Iraq war
and Soviet designs in the region.
-Noted that Rafsanjani is now
head of "Supreme War Council"
and wants to change perception of
current military situation and es-
tablish basis for truce talks with
Iraq.
-Provided details on immediate
needs re TOWs, HAWKs, techni-
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cal spares, and other technical as-
sistance.
-Provided three scenarios for
"getting beyond the hostage
issue:"
? Provide us with intelli-
gence on current locations
and let us (U.S. and Israel)
handle the problem.
? Let [the official in the
Prime Minister's office]
project continue.
? Rafsanjani personally in-
tervenes to free hostages.
-Would it be possible to set up a
meeting between a personal rep-
resentative of Rafsanjani and a
high-level USG contact?
-Yesterday, the Presient [sic] ap-
proved proceeding with a meeting
with the Rafsanjani representative.
Poindexter approved North's talking points.
(North to Poindexter, 9/9/86)
North had additional news about the abduc-
tion of Reed.
[The Relative] called Abe [Hakim] last
night to advise that Reed was not, repeat
not, held by Islamic Jihad, that no Iranian
"influenced" groups were responsible, and
that Iran wd do whatever they could to
find him and either return him or tell us
where he is being held. We have not yet
gotten a call from [the official in the Prime
Minister's office]. back to Sam [O'neil-
Cave] on this matter, but hope the news
will be the same on that front. If it is, we
may well be getting somewhere w/ the
highest levels of the present regieme [sic].
(North PROF note to Poindexter, 9/11/86,
07:17:56)
On September 13, Poindexter informed
North that he had discussed "our plans on the
hostages" with the Director of Central Intelli-
gence "and he is on board. Also went over the
Secord matters. Bill agrees Secord is a patriot.
He will check into our suspicions. I told him he
could get more detail from you." (Poindexter
PROF note to North, 9/13/86, 12:01:00)
The Prime Minister of Israel visited Washing-
ton in the middle of September; the Iran oper-
ation constituted one of the topics addressed.
Nir saw Poindexter and North. As instructed by
Poindexter, North prepared briefing papers.
You are scheduled to meet with Ami Nir
again this afternoon at 1:30 p.m. for 10
minutes. Purpose of this meeting is to de-
brief Nir on his meeting with Peres over
the weekend. You will then be able to brief
the President on Peres' views regarding the
several on-going and contemplated initia-
tives with the Israelis.. . .
Issues, which Prime Minister Peres may
raise privately with the President, are out-
lined at Tab III. Nir notes that it is unlikely
that Peres will discuss any of these with
anyone else in the room.
RECOMMENDATIONS
2. That you brief the President on the ini-
tiatives outlined at Tab III.
Approve 'JP Done"
POSSIBLE PERES DISCUSSION ITEMS
WITH THE PRESIDENT
Amiram Nir, the Special Assistant to Prime
Minister Peres on Counter-Terrorism, has
indicated that during the 15 minute private
discussion with the President, Peres is
likely to raise several sensitive issues:
emphasizing his new role as Foreign
Minister. He feels frustrated by the
lack of progress and may suggest sev-
eral areas wherein the U.S. could
boost the image of Israeli flexibility.
-Hostages: Several weeks ago, Peres
expressed concern that the U.S. may
be contemplating termination of cur-
rent efforts with Iran. The Israelis
view the hostage issue as a "hurdle"
which must be crossed enroute [sic] to
a broadened strategic relationship with
the Iranian government. It is likely
that Peres will seek assurances that the
U.S. will indeed continue with the cur-
rent "joint initiative" and ensure that
we will include the two missing Israelis
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in the process. In that neither Weir
nor Jenco would be free today without
Israeli help (particularly in logistics), it
would be helpful if the President
would simply thank Peres for their dis-
crete [sic] assistance.
[Marginal note in Poindexter's handwrit-
ing: Thanks for assistance on Weir and
Jenco. Will continue to work Iran with you.
Include 2 missing Israelis in it.]
-Israeli Arms: On Friday night, De-
fense Minister Rabin offered a signifi-
cant quantity of captured Soviet bloc
arms for use by the Nicaraguan demo-
cratic resistance. These arms will be
picked up by a foreign flag vessel this
week and delivered to the Nicaraguan
resistance. If Peres raises this issue, it
would be helpful if the President
thanked him since the Israelis hold
considerable stores of bloc ordnance,
compatible with what the Nicaraguan
resistance now uses.
[Marginal note in Poindexter's handwrit-
ing: Rabin, Very tightly held.].
(North to Poindexter, 9/15/86)
Once past the visit of the Israeli Prime Minis-
ter, the United States entertained [the issue of
the Relative]. The morning of September 17,
North wrote Poindexter
We are planning to bring him [the Rela-
tive] into the U.S. at the end of the week,
via parole papers thru Istanbul. Iranians
can go to Turkey w/o visas and parole
papers avoid the necessity of stamping a
visa in his passport-a complication which
frequently causes major problems for those
living in Iran. We (Cave, Clarridge, C/NE,
North) decided to honor their request to
keep this first meeting private (w/o Nir/Is-
raelis) and to have it here so that they can
confirm that they are indeed talking to the
USG. We knew this when you and Nir met
on Monday, but I had not yet had the
chance to brief you. We will have a follow-
up mtg with [the Relative] in Europe and
we will work Nir back into this op then. In
the interim, Clair [George] has put a hold
on bringing [the Relative] in because he
does not know whether you have "ap-
proved the operation." Wd you pls call
Casey and tell him to get on with moving
the guy in so that we don't embarass the
hell out of ourselves w/ Rafsanjani.
(North PROF note to Poindexter, 9/17/86,
07:56:26) Poindexter replied that he had al-
ready enlisted the approval of the Director of
Central Intelligence on September 13. "If Clair
[George] has a problem," Poindexter noted on
North's memorandum on surveillance for [the
relative], "he should talk to Casey." (Poin-
dexter note on North to Poindexter, 9/17/86)
North orchestrated preparations for the visit,
which included electronic surveillance . . .
(North to Poindexter, 9/17/86, enclosing Casey
to Meese, 9/17/86, with Poindexter's concur-
rence, and memorandum by Odom) He report-
ed to Poindexter:
Casey called and told me what he wanted
to do. I don't think [Clair] George will be
a problem. He was actually enthusiastic
about Cave's talking to Khomeini's rela-
tive * * *.
(Poindexter PROF note North, 9/17/86,
14:35:04) He also explicitly responded to Poin-
dexter's note on the memorandum:
Per your note on the surveillance package I
called Casey and told him we need to get
on with the parole paperwork in that you
had already agreed - and had furthermore
just endorsed the surveillance request. He
acknowledged yr approval for the plan but
said he as [sic] concerned about Shultz. He
said he planned to tell Shultz in general
terms that we were talking to another high
level Iranian and that we would fill him in
after the interview. I protested that experi-
ence showed that Shultz would then talk to
* * * or * * * who would in turn talk to
* * *-and that * * * could well be the
source of the Jack Anderson stuff we have
seen periodically. Casey Agreed [sic] to
proceed with the INS parole paperwork for
the Relative and the visa for his escort but
noted that he would still talk privately to
Shultz about this. We are now under-
waywith [sic] getting [the Relative] aboard
a chartered jet out of Istanbul. CIA could
not produce an aircraft on such "short
notice" so Dick has chartered the a/c thru
one of Project Democracy's overseas com-
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panies. Why Dick can do something in 5
min. that the CIA cannot do in two days is
beyond me-but he does. How the hell he
is ever going to pay for it is also a matter
of concern, but Dick is a good soldier and
never even groused about it. You may
want to talk to Sec Shultz about [the Rela-
tive] before Casey does. I will prepare a
memo for you as soon as we talk to him.
(North PROF note to Poindexter, 9/17/86,
12:59:11)
North relied on Secord to bring [the Rela-
tive] to the United States. (North PROF note to
Poindexter, 9/17/86, 16:19:33) Secord report-
ed to North, also on September 17, that:
[The Relative] will want intell info and a
scheme for future provision of same. In the
past, Casey has wanted to establish comms
in Tehran and this might be the vehicle.
We should give some very good OB data
in narrative form so that he can take it
back and make an impact. The stuff we
used for [the official in the Prime Minis-
ter's office] will have changed. It is no big
task for an analyst to prepare such a brief-
ing. I know there is skepticism about this
new connection, but we will fail if we do
not use our senses and produce something
of use. Next he will want some kind of
secure voice device for use in telecoms
back here to us in the next few weeks or
months-there are a number of these items
available commercially and I would hope
that CIA could supply same in a briefcase
for him to take back. Finally, [the Relative]
will want to talk about war material and its
relation to a long-term connection from
U.S. to Iran. My opinion is that he and his
group are attaching more importance to a
long-term relationship than to any short-
term quick fix, such as a few thousand
TOWs. He will, however, have a list of
needed items and will no doubt suggest
some kind of shipment to clear the hostage
matter and to firmly establish direct USG
to GOI transactions and to eliminate the
Gorbas and [official in Prime Minister's
office]. Thus, if I'm right, CIA must deliver
the goods re good OB and come up with
suitcase secure phone device.
(Copp to Goode [North], 9/17/86, 1720)
B. The Second Channel in
Washington
On September 19 and 20, North, Secord,
and Cave (as O'neil) met with the Relative and
the Iranian expatriate who had introduced him.
The two days of negotiations were surrepti-
tiously taped. North reported to Poindexter on
September 20 that:
Talks going extremely well. They and we
want to move quickly beyond the "obsta-
cle" of the hostages. Sincerely believe that
RR can be instrumental in bringing about
an end to Iran/Iraq war-a la Roosevelt w/
Russo/Japanese War in 1904. Anybody for
RR getting the same prize? . . .
(North PROF note to Poindexter, 9/20/86,
12:04:15) Poindexter replied two days later:
"Good on the talks. Will look forward to de-
brief. Ok on trip to London." (Poindexter
PROF note North, 9/22/86, 8:37:02)
North gave Poindexter a preliminary report
on September 22:
Talks with [the Relative] commenced on
Friday night and proceeded almost non-
stop until Sunday at 1100 when he depart-
ed for Istanbul aboard charter. George and
Dick agree that things went extremely well.
He is assured that the GOI is dealing di-
rectly with the USG and that the mutual in-
terests of both parties transcend the "ob-
stacle" of the hostages-but that this prob-
lem must be solved first. Much credit in
this goes to Dick, who established the ini-
tial contact in Brussels. [The Relative]
wants to set up a "joint committee" in
Turkey or Portugal for resolving the issues
which separate us-an idea which would
then lead to putting a discrete [sic] com-
munications team in Tehran. At one point
he asked if Secord could return with him
to advise on how to set this up. He asked
specifically for a sign from the USG that
we are indeed moving in the right direc-
tion and we agreed to a carefully con-
structed phrase in a VOA broadcast which
would mention the nations which denied
access to the hijacked PA 73 a/c-and in-
clude Iran in the list. He will be back to us
later in the week after he has met with the
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leadership in Tehran. In discussing what
we could do for them he raised the issues
of 2M homeless in Iran, the collapse of the
economy and the destruction of their oil
industry. He complained bitterly about the
French effort this spring which he said was
designed only to get their hostages out and
to help Chirac get elected. We noted that
RR could not be reelected, that his motiva-
tion was to bring about an honorable end
to the killing in the Iran/Iraq war, and to
reestablish a positive relationship with the
Iranian government that would lead to
Christians, Jews and Moslems living in
peace with one another. On a number of
occasions he was told that RR believed
deeply in the teachings of our Holy Book,
a copy of which was on the table, and ref-
erence was made to a number of pertinent
passages (e.g. Gen. 15:7-21; Gal. 3:7; etc.).
At one point he noted to George that RR
being a man of God had removed the only
argument they had-that Allah was sup-
posed to be on their side. He has promised
prompt action on the hostages, is looking
for assurances that we will not walk away
once they use their influence to get them
free and noted that the USG should stop
other attempts to make contact w/ the
GOI to prevent confusion within the fac-
tions at home. He expressed several con-
cerns about the [Ghorbanifar] channel and
admitted that they believed someone close
to [Ghorbanifar's Tehran contact] was
working for the KGB. He expressed great
concern that the Soviets could exploit con-
firmation of the contact by making the con-
tact public and doing great mischief in Iran
and the U.S. and by rapidly escalating their
assistance to Iraq or even intervening in
Iran. We did all we could to feed this anxi-
ety. Nir has been calling regularly to
exhort us to move on the next shipment.
Because [the Relative] has asked us to wait
to see what the result of his discussion in
Tehran is, we have decided to stall by tell-
ing Nir and Gorba that we must have a
meeting w/ [the official in the Prime Minis-
ter's office] before we can proceed. We
have told Nir that you and RR are very
concerned about the two new hostages and
that we cannot proceed w/ further deliv-
eries until such a meeting takes place. [The
Relative] has asked that for the time being
we leave the Israelis out of this because of
the problems at home. Contrary to what
Nir said here, [the Relative] did know that
Nir was an Israeli. We will put together a
summary of the talks by . my return
Wednesday. You can brief RR that we
seem to be headed in a vy positive direc-
tion on this matter and have hopes that the
hostage resolution will lead to a significant
role in ending the Iran/Iraq war.
(North PROF note to Poindexter, 9/22/86,
9:22:57) In the course of the meetings, [the
Relative] asked that the United States "stop
other attempts to make contact [such as those
through [third countries] now that we were in
direct discussions." (North PROF note to Poin-
dexter, 9/20/86, 12:06:57.) "Geo Cave will
brief Casey this afternoon on the results of the
discussions w/ [the Relative]," North wrote
Poindexter. "Casey has asked what we are
doing abt bringing Sec State up to speed on re-
sults. I told him this was your call. Casey is
urging a mtg on Weds. among you, Casey,
Cave and me to discuss situation prior to dis-
cussion w/Shultz. Can we schedule same?"
(North PROF note to Poindexter, 9/22/86,
12:00:49)
Apparently, the Director of Central Intelli-
gence discussed the relative's visit with the Se-
cetary of State. North wrote Poindexter the
afternoon of September 22:
FoMin Velayati is one of the few non-cler-
ics at the top of the GOI. He is a techno-
crat, reportedly a conservative and relative-
ly close to Rafsanjhani [sic]. He reportedly
is a member of the "War Council" which
determines the distribution of resources
and funds within the Iranian government.
According to [the Relative], Velayati par-
ticipated in the meetings regarding our
earlier diplomatic approaches to the GOI
and evaluated these initiatives as sincere.
[The Relative] reports, however, that Ve-
layati was not in the final sessions they had
which authorized [the Relative] trip to the
U.S. In these sessions Rafsanjhani, Moshen
[sic] Rafiq-Dust and Mohammad Hosein Ja-
lalai along with Musavi-Khamenei made
the decision for him to come to the U.S.
and to be assured that he was indeed talk-
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ing to the top of the USG. Re the Casey/
Shultz discussions: Casey informs that he
told Shultz, alone, that the CIA was assist-
ing in bringing [the Relative] into and out
of the U.S. for talks and that he (Casey) wd
get back to Shultz at some point in the
future on what had transpired. According
to Bill, Shultz simply said "OK."
(North PROF note to Poindexter,. 9/22/86,
14:35:55)
North also prepared a full memorandum of
conversation to Poindexter on September 25
which had additional material including the
statement: "I want to tell you that unless one
of the three men sitting here in the room right
now (North, Secord, Sam O'Neill) contact you,
there is no official message." North noted that
"[t]he only other copy of this memorandum of
conversation has been given (by hand) to the
DDO of CIA." (North to Poindexter, 9/25/86)
The Secretary of State told the Board that he
heard nothing about Iran from July 2, 1986,
when Under Secretary Armacost sent him a
memorandum he does not recall reading and
October 31, 1986, when, after making a speech
in Los Angeles, someone asked him about a
hostage release. "I was totally barn-sided. I had
no idea what was taking place." (Shultz, SRB,
56-57)
On September 24, North provided' Poin-
dexter with materials for a meeting among
Poindexter, the Director of Central Intelli-
gence, Cave, and C/NE to discuss the Septem-
ber 19-20 conversations.
During the discussions, [the Relative]
asked for a "discrete [sic] public sign" that
he could use to support his debriefing back
in Tehran. We decided that a VOA editori-
al, broadcast in Farsi, which mentions the
Iranian Government's denial of flight clear-
ance to the hijacked Pan Am flight, would
suffice. At Tab II is a VOA editorial re-
garding the hijacking of Pan Am Flight
#73.
We appear to be in contact with the high-
est levels of the Iranian Government.
There is no doubt that [the relative] is far
more competent and better "connected"
than our other interlocutor, [the official in
the Prime Minister's office]. It is possible
that the Iranian Government may well be
amenable to a U.S. role in ending the Iran-
Iraq war. This, in and of itself, would be a
major foreign policy success for the Presi-
dent. We, therefore, need to determine
how we will proceed from here on with the
Iranians. Specifically:
-Should we proceed with the "joint
committee" proposed by [the Relative]
during our discussions.
-Who, if anybody, at the State De-
partment should be brought into this
activity.
RECOMMENDATION
That you review the attachments prior to
your meeting.
Approve "JP" Disapprove
(North to Poindexter, 9/24/86) North attached
Cave's summary of the meetings.
([Cave], "Rundown of Visitor's comments on
19/20 Sept 86," Tab I to North to Poindexter,
9/24/86)
North also attached a draft of a Voice of
America editorial entitled "International Coop-
eration Against Terrorism," in which, as prom-
ised to the Relative, Iran among others, was
thanked for its assistance in the successful reso-
lution of the PanAm Flight 73 hijacking. (Tab
II to North to Poindexter, 9/24/86) 91
Cave recalled that, at the meetings on Sep-
tember 19 and 20, "an enormous amount of
progress was made. (Cave 17) Cave told the
Board that "we were talking to someone at the
political level, even though the gentleman was
very young." (Id.)
[W]hen we were in Tehran, at the political
and strategic level, we really didn't get
anywhere. But at this meeting [September
19-20], he proposed to us that we form a
joint commission of four U.S. members
and four Iranian members, that we meet in
secret and come up with a program for im-
proving U.S.-Iranian relations.
91 On September 25, after Craig Coy, a member of the NSC
staff and former executive assistant to Admiral Holloway, Execu-
tive Director of the Vice President's Task Force on Terrorism,
spoke to Ambassador Bremer about the editorial, North sent the
editorial to Bremer with instructions to broadcast it on Septem-
ber 26 and 27. (North to Bremer, 9/25/86 Coy 3-4)
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He also discussed in great detail their con-
cerns about Afghanistan, the Soviet Union,
and the Persian Gulf. He told us that they
had taken our advice and in early Septem-
ber had sent their Oil Ministry [sic], under
cover of doing OPEC business, on a trip
around the Persian Gulf to talk to the
Saudis, the Kuwaitis and the United Arab
Emirates, and had gotten what they had
considered a rather positive response, par-
ticularly from the Saudis.
At that meeting, we also gave them a brief-
ing on what we considered to be the Soviet
threat toward Iran.
We also agreed at that meeting that at the
next meeting they had, which was going to
be in early October, we would give them a
briefing on our view of the war, their war
with Iraq. We also gave them at the Sep-
tember meeting a briefing on our view of
how the insurrection in Afghanistan was
going against the central government and
the Soviets, and they promised at the next
meeting that they would give us their
views.
(Id. at 18-19)
To C/NE, this meeting had been remarkable
for another reason. He told the Board that [the
Relative]
immediately presented bona fides in the
sense of saying, look, we can't get all your
hostages out. It was the first time we had
heard that in this channel. Always before
the promise was don't worry about a thing;
we can get them all. He said, we can get
two out, maybe three, but we can't get
them all.
(C/HE (1) 38) According to Charles Allen, the
"new channel" informed the Americans in Sep-
tember that Khomeini's son "briefed the father
in great detail . . . [and] the Iranians had de-
cided that it was worth talking to the Americans
not just for arms but, I think, for broader rea-
sons." (C. Allen (1) 19-20)
C. Frankfurt
In the immediate aftermath of [the Rela-
tive's] visit, events seemed to move quickly.
North wrote Poindexter on September 26 that
[t]his morning, immediately after the VOA
broadcast of our PA-73 message, [the Rela-
tive] deposited $7M in the numbered Swiss
Account we gave him last week. The
money will be transferred by noon (EDT)
to another account in another bank. In
order to save time, I have told Dick to pay
CIA's account for the remaining HAWK
parts and the 500 TOWs so that they can
be assempbled [sic], packed and moved to
[location deleted]. UNODIR, CIA will com-
mence acquisition as soon as they receive
the money-though nothing will be
shipped to final destination until we have
had the follow-on discussion w/ [the Rela-
tive] and reached an understanding on the
"obstacle." We believe he will want to
meet on the week of October 6-10-* * * .
Nothing will move from . . . until you so
approve. Will sit down tomorrow w/ the
CIA logistics guy who is doing the order-
ing to see if for once they can get it right.
(North PROF note to Poindexter, 9/26/86,
09:47:48)
A week later, North submitted the views of
his team (Cave, Clarridge, C/NE, Secord, and
North) on "Next Steps for Iran." They argued
for the program discussed with [the Relative],
who added pressure for acceptance.
North reported on October 2:
[The Relative] contacted Dick this
morning and asked that George, Dick
and I meet him on Monday in Frank-
furt. He claims to have just returned
to Tehran from Beirut and that he will
have good news regarding the "obsta-
cle" (hostages). I am preparing a
paper for you which will include the
travel approval for Goode and a bible
for [the Relative]-since he is bringing
a Koran for the President. We will also
use the opportunity of this meeting to
set Nir straight on how we are going
to proceed. He is beside himself at the
delay in action since he was here-and
we can, I believe take care of that
whole problem in the next few days.
Will include our collective recommen-
dations (from George, Dick and me) in
the package. Hope to have it to you
this afternoon. Warm regards, North
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p.s. PLEASE authorize us to be poly-
graphed re this Woodward mess. You,
the President, WE need to find the
person who is doing this. p.p.s. On the
Costa Rican airstrip: it is a C-135K,
not a C-130. We had to sell the C-130
last month just to keep Project De-
mocracy afloat (actually an L-100, the
commercial variant of the C-130). The
airplane in the photo-and referenced
in the memo is a smaller precedent to
the C-130 w/ 2 reciprocating piston
engines and two ram jets outboard
(like the old P2V Neptunes).
(North PROF note to Poindexter, 10/02/86,
15:11:48.) A week later, North submitted "Next
Steps for Iran" to Poindexter.
[The Relative] called Dick this morning to
advise that he had just returned from
Beirut and would very much like to meet
.with us in Frankfurt, Germany, on Monday,
October 6. He indicates that he has "good
news" regarding the hostages and that he
wishes to get past the "obstacle" as quickly
as possible. An appropriate travel approval
is attached at Tab I.
George Cave is taking a well-deserved
"mini-vacation" in Rome. We are telling
all callers that he is in the hospital for tests
on his back. In accord with [the Relative]
request, the U.S. side would be represent-
ed by: Sam O'Neil, Copp, and Goode.
This meeting also affords us the opportu-
nity to deal with the issue of Israeli coop-
eration. Nir has been calling daily (often
several times) urging that we get on with
the process in our "joint venture." He con-
stantly cites his September 10 meeting with
you as the basis for proceeding urgently.
Because we have not told him about our
intention to pursue the "[the Relative
channel]" first, he continues to encourage
Ghorbanifar to raise the requisite funds for
another delivery. Ghorbanifar, in turn, has
a frequent dialogue with [his Tehran con-
tact] in this regard. All of this tends to
create confusion among the various partici-
pants and an unnecessary OPSEC vulner-
ability. We need to act now to reduce the
number of channels into the Iranians (at
least on a temporary basis) and clarify vari-
ous roles and missions. As is evident on
the diagram at Tab II, the various channels
of communications are, at the very least, a
source of great vulnerability to KGB and
other SIGINT-penetration.
We (Cave, Clarridge, C/NE, and Copp) be-
lieve that we should move promptly on
both fronts as follows:
-[The Relative]: O'Neil, Copp, and
Goode meet with [the Relative] in
Frankfurt on Monday, October 6. [The
Relative] has indicated that he has an
internal consensus on how to proceed
with regard to the hostages "obsta-
cle." He has said that he will bring
with him to this meeting "one of the
officials we met with in Tehran" and
has asked that we bring with us a de-
finitive sample of the intelligence we
had discussed when he was here.
Based on this, we believe that [a Revo-
lutionary Guard Intelligence official],
may well accompany [the Relative].
You will recall that [the Relative's] re-
quest for intelligence was very specific
(the details were forwarded to you via
PROFs). While the sensitivity of pro-
viding this information is well-recog-
nized, it must also be noted that intel-
ligence was given a higher priority by
[the Relative] than any other assist-
ance we could provide. In the Casey-
C/NE-Cave-North meeting we had
with you after [the Relative] departed,
we all agreed that it was unlikely that
providing such information would
change the course of the war. Further,
we all recognized that the information
need not be accurate and that it was
highly perishable given the dynamic
nature of the conflict. In short, we be-
lieve that a mix of factual and bogus
information can be provided at this
meeting which will satisfy their con-
cerns about "good faith" and that we
can use the "perishible" argument as
an incentive for the Iranians to accept
a CIA communications team in
Tehran. As before, we would not leave
any documents with the Iranians, but
will provide an exposition during
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which they could take detailed notes.
Director Casey needs to be told to
prepare the intelligence for handcarry
to the meeting.
[The Relative] has said he is bringing
a Koran for the President. As a recip-
rocal gesture, we have purchased a
Bible which we would present to [the
Relative] for him to take back to
Tehran with him. Given our earlier
discussions (see transcript), it would
be very helpful if the President would
inscribe a brief note citing a particular
biblical passage (Tab III) in the front
of the Bible. This particular excerpt is
important in that it is a new testament
reference to Abraham, who is viewed
by Moslems, Jews, and Christians as
the progenitor of all the world's na-
tions. It would be most effective if the
President hand wrote the inscription
and initialed/signed it without ad-
dressing the note to any particular
person.
-Nir: When Amiram was here, we
made a conscious decision not to ap-
prise him of our near-term efforts with
[the Relative]. We did inform him ear-
lier of the contact and he continues to
inquire regarding the status of this ini-
tiative. Meanwhile, lacking guidance to
the contrary, Nir has sought to stimu-
late further activity between Ghorbani-
far and [the official in the Prime Minis-
ter's office]. This has resulted in [this
official] calling directly to George's
home and office several times daily
and considerable confusion regarding
why we have not accepted the [Iranian
official]/Ghorbanifar "offer" to pur-
chase the remaining HAWK spare
parts and 500 TOWs.
From an operational perspective, the
current communications arrangements
are a command and control/OPSEC
nightmare (Tab II). Nir essentially
controls our access to both [the Irani-
an official] and Ghorbanifar and, thus,
we often find ourselves reacting to his
well intentioned efforts. We believe
that we now have an opportunity to
change the relationship in such a way
that Nir is placed in a supporting role
rather than acting as a primary source
of control. We also recognize that Is-
rael's participation in this activity is
both politically and operationally im-
portant. In altering Nir's status, we
need to do so in such a way that he
and those officials in his government
who are cognizant continue to per-
ceive that this is still a "joint venture."
In order to accomplish the objectives
outlined above, we propose that on
Saturday, October 4, Copp would fly
to Tel Aviv and meet with Nir. At the.
meeting, Copp would use the talking
points at Tab IV. In an effort to ame-
liorate Nir's angst over his "new
status," we urge that the letter at Tab
V to Prime Minister Peres be signed
by the President. If you agree, we
need your approval of the talking
points at Tab IV and a Presidential
signature (real or autopen) on Tab V
by 3:00 p.m. Friday, October 3.
The steps above are designed to give us a
chance to make the new relationship
through [the Relative] function without de-
stroying the Ghorbanifar/[Iranian official]
channel. We would, in effect, put Ghorban-
ifar [the Iranian official in the Prime Minis-
ter's office] on "hold" until we see what
[the Relative] produces. Please note that
when Copp briefs Nir in Tel Aviv on Satur-
day, he will not reveal that he is enroute to
Frankfurt to meet [the Relative]. Given [the
Relative's] strong antipathy toward the Is-
raelis and our uncertainty as to whether or
not he knows that Nir (aka.Miller) is Israe-
li, we would tell Nir on Sunday night that
we were going to a hastily arranged meet-
ing with [the Relative] which he (Nir) will
be unable to make due to a lack of con-
necting flights to Frankfurt.
[The Relative] has already told us, that
shortly after the October 6 meeting, there
will be a follow-on meeting. of the "joint
committee" in which [the official in the
Prime Minister's office] will be a partici-
pant. Unless we are convinced that the Ira-
nians would recognize Nir as an Israeli, we
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would intend to invite Nir to this follow-on
meeting.
A memo from you to the President has not
been prepared for obvious reasons. It is
hoped that between now and 3:00 p.m.
Friday you will have an opportunity to pri-
vately discuss this with the President and
obtain his approvals/signatures on the
steps indicated above.
(North to Poindexter, 10/2/86) Poindexter ap-
proved North's travel request (in the name of
William P. Goode); agreed to have the Presi-
dent inscribe a Bible with the designated pas-
sage from Galatians;92 approved talking points
for Secord; and agreed to persuade the Presi-
dent to sign the letter to Peres. Poindexter nei-
ther accepted nor rejected the request to have
the Director of Central Intelligence prepare an
appropriate intelligence package by October 4
for the meeting on October 6. (Id.)
The second attachment to this memorandum
was a diagram of the communications between
"Tango" [Tehran]-Merchant (Ghorbanifar),
[the official in the Prime Minister's office], [the
relative], [the Iranian expatriate] and [Secord's
Iranian agent].-and the United States team-
Goode (North), Sam (Cave), Charlie (Allen),
Copp (Secord), and C/NE. Apart from Cave
and [the official in the Iranian Prime Minister's
office], who sporadically communicated one-on-
one, and Allen and Ghorbanifar, who also com-
municated directly, the others talked through
middlemen. Ghorbanifar generally used Nir;
while those in the second channel used Hakim
(Abe). (Id. at Tab II) North added the recom-
mendation:
Pare the U.S. communicators down to no
more than two individuals (who either com-
pare notes directly each day, or report to a
common supervisor); e.g., Sam and Copp,
who both report daily to North. Cut Char-
lie, C/NE and anybody else out. Have them
stop communications cold turkey (to sup-
92 "'And the Scripture, forseeing that God would justify the
Gentiles by faith, preached the gospel beforehand to Abraham,
saying, 'All the nations shall be blessed in you'. Galatians 3:8'
Ronald Reagan Oct. 3, 1986" The President told the Board that
he did inscribe the Bible because VADM Poindexter told him this
was a favorite passage with one of the people with whom the U.S.
was dealing in Iran. The President said he made the inscription
to show the recipient that he was "getting through."
port cover story of [old] channel being
blown, rolled up, and finished).
(Id.)
Secord's instructions for his meeting with Nir
on October 4 noted:
The objective of this discussion is to im-
prove our control of events in this joint
effort to establish a strategic relationship
with Iran. The talking points below are in-
tended to establish the parameters of your
discussion and are designed to elicit fur-
ther cooperation:
-ADM Poindexter has directed that I
see you regarding our current Ghor-
banifar/[Iranian official] channel and
discuss with you ways' in which we can
move together to accomplish our
mutual objective-a strategic relation-
ship with Iran.
-We have fairly strong evidence that
[the Iranian official] was directly in-
volved with the seizure of the second
new hostage in Beirut (Cicippio).
-We believe that the first new hos-
tage (Reed) was taken by elements
other than Hizballah-although they
may have him in their hands now.
-We think that [the official in the Ira-
nian Prime Minister's office] may have
believed that he could bring additional
pressure to bear on us to commence
further deliveries by seizing another
hostage (or hostages).
-Quite the contrary is true. The
President is adamant that we will not
move forward on this channel until we
resolve the new hostage issue.
-We are also concerned that the two
new hostages (or at least Cicippio)
represents a clear violation of the "un-
derstanding" we have had with the
Iranians on anti-U.S. terrorism since
June of last year.
-We do not want to engage in a
process that results in new hostages
just to bring "pressure to bear." Nor
will we continue this process if, when
the current hostages are released,
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more are taken, simply to elicit further
deliveries of arms.
-Aside from this very strong policy
objection to continuing, we have, as
you know, had repetitive financial and
communications dufficulties [sic] with
Ghorbanifar. While we could debate as
to whether or not Ghorbanifar had re-
ceived all that was due him by the Ira-
nians, the most important factor is po-
tential OPSEC risk.
-In an effort to "keep things
moving," Ghorbanifar has made com-
mitments in our name which are pa-
tently beyond our ability to meet. This
has resulted in increased expectations
on the part of the Iranians.
-We know * * * that neither [the of-
ficial in the Prime Minister's office]
nor other Iranian officials in Tehran
trust Ghorbanifar.
-Finally, both of us know that [the
Iranian official], himself, is not intel-
lectually astute enough to realize the
importance of our contact nor the sin-
cerity of our desire to establish an offi-
cial government-to-government rela-
tionship.
-In short, this channel is not serving
our mutual objective: the reopening of
a strategic relationship with Iran.
-The President has directed that we
will not proceed with any further re-
ceipt of funds from Ghorbanifar nor
deliveries to [his Tehran contact] until
we resolve these issues.
-Several months ago, I apprised you
of a contact with [the relation of a
powerful Iranian official]. The USG
decided to pursue this contact to de-
termine its validity.
-We are confident that [the Relative],
the man I met with in Brussels, has
been franchised to act as a liaison be-
tween the U.S. and Iranian govern-
ments.
-When Prime Minister Peres was in
Washington last month, the President
assured him that we are going to con-
tinue this effort as a joint project.
[Poindexter penned a questionmark in
the margin next to this point.]
-I have been instructed to seek out a
second meeting with [the Relative] as
soon as it can be set up and that I will
act as the U.S. intermediary until we
establish direct contact with govern-
ment officials from our side.
-Once we have established direct
USG contact with [the Relative], we
intend to introduce you into this proc-
ess under the same conditions as ob-
tained when you went to Tehran with
-Based on my initial meeting with
[the Relative] and the intelligence we
have been able to collect, we believe
that this contact may well prove to be
the one that both your government
and mine have been seeking.
(Remember Nir has been told that you
"came upon" [the Relative] as a conse-
quence of looking into the possible diver-
sion of TOWs through Spain/Portugal
during an investigation undertaken in late
July/early August.)
-While we explore the sincerity of the
nephew and confirm his ability to
speak for the Iranian government, we
want to keep the Ghorbanifar/[Iranian
official] channel on "hold."
-To that end, we have told Sam-
who is in the hospital-he is to contact
[the Iranian official] and tell him that:
-there must be a meeting with
[the Iranian official] before we
proceed any further;
-the issue of the two new hos-
tages has become a strong, nega-
tive factor in proceeding at all;
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-this matter (the two new hos-
tages) must be resolved before we
will take any further steps for any
further deliveries;
-the problem is not the merchant
and his financing, but rather the
two new hostages;
-contrary to what he [the Iranian
official] may expect, there will be
no further deliveries until we have
met and resolved this matter;
-we have asked [the Iranian offi-
cial] to meet with us in Frankfurt
on October 9-we do not yet have
an answer.
-I intend to meet with [the Relative],
somewhere in Europe or Turkey,
hopefully this week. I will then report
back to Washington on my findings
and a follow-on meeting will be set-
up-in which we will attempt to have
you included.
-I want to caution you, however, that
in my meeting in Brussels [the Rela-
tive] indicated that he and others in
Tehran are aware that you are an Is-
raeli-and knew it when you went to
Tehran.
-Neither of us want this contact, if it
is indeed what I think it to be, to
founder because of this.
-I have been instructed to find a way
to have you in the meeting in which
Goode and Sam will serve as the USG
representatives.
-If the meeting with [the Relative]
this week goes well, I would expect
that all of us could meet with him next
week.
-In the interim, if [the Iranian offi-
cial] does indeed agree to meet with
us under the conditions we have estab-
lished, we should proceed with that
meeting.
Poindexter met with the Director of Central
Intelligence and his Deputy the evening of Oc-
tober 2. (DCI Telephone Calls and Meetings;
Gates, Memorandum for the Record, 10/3/86)
In addition to discussing the proposal to pro-
vide Iran with military information ...
Both North and Poindexter reported on the
new channel to McFarlane. On October 3,
North invited McFarlane to review the tran-
scripts of the September 19-20 meeting.
(North PROF note to McFarlane, 10/03/86,
22:08:16) Poindexter expressed enthusiasm
about the meetings:
We have made contact with [the Relative
of a powerful Iranian official (the "Rela-
tive")]. Two meetings so far. One here in
US. Ollie, Cave and Secord meet with him
this weekend. in Frankfort [sic]. Your trip
to Tehran paid off. You did get through to
the top. They are playing our line back to
us. They are worried about Soviets, Af-
ghanistan and their economoy [sic]. They
realize the hostages are obstacle to any
productive relationship with us. They want
to remove the obstacle. [The Relative] has
been in Beirut, says he has good news for
Frankfort. We shall see. Still insisting on
group release. If this comes off may ask
you to do second round after hostages are
back. Keep your fingers crossed.
(Poindexter PROF note to McFarlane, 10/03/
86, 20:35:35) McFarlane responded:
Roger; anytime John.
By the way, I watched the news tonight
and saw Peggy Say beating up on the Ad-
ministration for not getting the Beirut hos-
tages out. I haven't heard anything on that
score for a while. But I get [sic] the sense
that we are pretty much at the mercy of the
Iranians.
If you think it would be of any value, I
might be able to take a couple of months
off and work on the problem. No guaran-
tees and no need for any sponsorship
(except for airfares and hotels) but I might
be able to turn something up. Think about
it.
(McFarlane PROF note to Poindexter, (10/04/
86)
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On October 5, North flew to Frankfurt. On
the 10th, he reported to Poindexter: 93
Copp has just returned from Frankfurt. Ac-
cording to both he [sic] and Sam, my
98 The day North left, an aircraft with Eugene Hasenfus
aboard, crashed in Nicaragua. Robert Earl, who shared an office
with North, reported to Poindexter:
"[O]ne of the Democracy Inc aircraft apparently went down on
a resupply mission to FDN forces in the north. It is overdue from
its mission, and no radio contact was received. It is currently un-
known where or why the aircraft went down, but [third country]
assets are discreetly organizing a SAR effort over international
waters & friendly territory portions of the route. Three Ameri-
cans and one Nicaraguan national aboard. I will keep you advised
of details as I get them."
(Earl PROF note to Poindexter, 10/06/86, 11:49:16)
William Perry, an NSC staff member who worked on Latin
America, wrote Poindexter on October 7:
Plane down in Nicaragua and survivor of crash had no USG
connection according to CIA and DIA. This tracks with Elliott's
denial and has been passed on to Dan Howard.
FYI, and not for release, the flight originated in El Salvador
and is probably tied in with private U.S. assistance to the Con-
tras. Survivor could testify to this type of connection... .
(Perry PROF note to Poindexter, 10/7/86, 12:42)
North wrote McFarlane on October 12:
We urgently need to find a high powered lawyer and benefac-
tor who can raise a legal defense for Hassenfus [sic] in Mana-
gua. If we can find such persons we can not only hold Gene
and Sally Hassenfus together (i.e., on our side, not pawns of
the Sandinista propaganda machine) but can make some signif-
icant headway of our own in counter-attacking in the media.
Obviously, there is the added benefit of being able to do some-
thing substantive in the legal system to defend this young man.
I know that this is a tall order and that many U.S. lawyers will
not want to step up to this task, but for the man (or woman)
who does, there will be a fair bite of history made in the next
few weeks. There will, no doubt, be a show trial of some kind
launched and unless we have an overt, competent legal de-
fense, Hassenfus will become nothing but a tool in their
hands-none of which is in our interests, or his. By Tuesday, a
Swiss lawyer, retained by Corporate Air Services, should be in
Managua. We should not rely on this person to represent the
whole case since he is supported by covert means. We would
be far better off if we had an overt mechanism here in the
States which represented USG/Hassenfus' interests, and who
would not have to respond to questions regarding the origins
of Corporate Air Services, Inc. (CASI), or its other ongoing ac-
tivities. The CASI lawyer is being instructed to cooperate fully
w/ this U.S. Attorney, whoever he/she may be. Have also locat-
ed approx. $100K from a donor who does not care if this con-
tribution becomes known (though the donor has done things in
the past to keep CASI in operation-a fact which need not
become known). Can you help? If need be, I can meet w/ you/
others tomorrow or Tues. [October 13 or 14] Believe this to
be a matter of great urgency to hold things together. Unfortu-
nately RR was briefed that this plan was being contemplated
before he left. for Iceland and am concerned that along about
Wednesday when people begin to think of things other than
meetings in cold places, he will remember this and nothing will
have been done. Any thoughts wd be much appreciated. Elliott
Abrams willing to sit-in any time after Yom Kippur fast is fin-
ished tomorrow night. Pls Advise.
(North PROF note to McFarlane, 10/12/86, 16:33:11)
donkey act with the Relative and [a Revo-
lutionary Guard Intelligence Official] had
quite an effect. [The Revolutionary Guard
Intelligence Official] told Dick that if he re-
turned home without the hope of further
help that he "would be sent back to the
front." [The Revolutionary Guard Intelli-
gence Official] gave Dick a proposal closer
to the line in my original seven points and
asked Dick if there was any way that he
could get us to meet before the 3 Nov.
meeting I had suggested. Dick told him
that he would pass the points on but could
not guarantee anything. Points as follows:
1. They pay $3.6M next week.
2. We deliver 500 TOWs (no HAWK parts)
9 daysafter [sic] payment.
4. Two hostages (if possible, but no less
than one) released w/in 4 days of TOW
delivery. If only one hostage released,
whole process stops and we meet again.
5. Repeat funding and Delivery [sic] cycle
as in steps 1 & 2 above.
6. We send Tech support for HAWKs,
update on intel and secure comm team to
Tehran and provide location/availability or
artillery items noted on the original list
provided by [the Relative] in Washington
mtg.
7. Iran does utmost to secure release of re-
maining hostages(s).
[The Revolutionary Guard Intelligence Of-
ficial] told both Sam and Copp that the
group holding Reed and Cicippio is not,
repeat not, responsive to Iran. Further,
that only [Hostage 1] and [Hostage 2] are
"immediately available." [The Revolution-
ary Guard Intelligence Official] begged
Dick to let them find out exactly where
[Hostage 3] is and "you can rescue him
and not ruin us (Iran) with the Hizballah."
Both Sam and Copp believe we should let
them stew in Tehran for a few more days
and then accept the proposal indicated
above. [The Revolutionary Guard Intelli-
gence Official] and [the Relative] both said
that Pattis was not now available, but that
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they were sure they could work it out once
things were moving. Only changes from
my proposal is sequential nature of their
plan and lack of mention of Buckley body
& transcript of interrogation. We do not
believe that they can be sure of getting all
three-all available info indicates [Hostage
3] is held elsewhere. Dick and Sam believe
that we will, however, get two back for
nothing more than the two sets of 500
TOWs. They point out that the rest of
what the Iranians want (a plan for ap-
proaching the Kuwaitis, the location/avail-
ability of the artillery, and the intel) all can
be managed w/o any great complications.
[C/NE], Cave and Casey all seem to be
convinced that this is best/fastest way to
get two more out-probably w/in next 14
days. [C/NE] also notes that the situation
in Leb is getting much worse and that we
may be getting close to the end of the line
for any further movement. Finally, all here
now believe that these guys do not have
Reed/Cicippio, who are probably in hands
of Libyan controlled group which earlier
bought/killed Kilburn. [C/NE] and Sam
believe that these guys may be the only
way we can ever get our hands on Reed/
Cicippio since their access and info in the
Lebanon are so much better than ours.
BOTTOM LINE: Recommend that we wait
for their call on Tuesday, if their position
is same as above or better, we slid push
them to include Buckley remains and tran-
script and then get on with it. Pls advise.
(North PROF note to Poindexter, 10/10/86,
21:55:31)
Cave told the Board that the most important
part of the Frankfurt meeting was the Iranian's
statement that he could obtain the release of
one hostage. In addition, Cave said, the partici-
pants discussed Iran's weapons requirements,
the Afghan war, and the Iraq war. Cave re-
called that he
gave them a briefing on our view of their
war with Iraq. This briefing was structured
so that we told them basically the truth,
but the stress we placed on the briefing
was such that it would give them consider-
able pause about launching this final offen-
sive that they had been talking about for
the last six months.
(Cave 19-20) Cave recalled that the Iranians
wanted to end the war in a way they could
present as a victory. (Id. at 20) The negotiators
agreed to meet again toward the end of the
month. During that meeting, Cave said, "we
caused the 500 TOWs to be shipped. . . .
That's when we gotJacobson [sic] out." (Id. at 21)
As it happened the Israelis shipped the
TOWs because Secord tried to deposit the Ira-
nians' payment for the weapons into a CIA ac-
count that had already been closed.
D. Arms Into Iran, One
Hostage Out of Lebanon 94
North returned from Frankfurt the evening
of October 8. (North calendar) By that time,
"The NSC staff chronologies tell the following tale for the
summer and fall of 1986 (Maximum Version 9; Historical Chro-
nology 13-14. Where the Historical Chronology differs from the
Maximum Version, this fact is indicated by square brackets.):
Through August, September, and October 1986, numerous ad-
ditional meetings were held in Europe between U.S. represent-
atives and the new and Iranian contacts [sic]. During the Octo-
ber 26, 1986 meeting in Frankfurt, Germany, the U.S. side, as
in the past, insisted that the release of the hostages was a pre-
requisite to any progress. [The Relative] urged that we take a
more active role in support for the Afghan resistance . . . The
Iranians also proffered, and the U.S. accepted, the offer of a
Soviet T-72 tank captured from Iraq. [The Iranians have also
offered to provide a copy of the 400 page interrogation of Wil-
liam Buckley.] At this meeting, [the Relative] stated that there
was a "very good chance that another American or two would
be [f]reed soon." On October 29, with U.S. acquiescence,
Israel provided Iran with an additional increment (500 TOW
missiles) of these defensive weapons. [On October 29, with
U.S. acquiescence, Israel provided Iran with an additional in-
crement of defensive weapons (500 TOW missiles).]
Late on October 31, [the Relative] called the U.S. citizen
(Hakim) tasked to maintain contact and advised that Iran had
"exercised its influence with the Lebanese" in order to obtain
the release of American-David Jacobsen-and an uncertain
number of French hostages. He further noted that this was part
of the purpose of the Iranian Foreign Minister's visit to Syria.
[The Relative] stated that the situation in Tehran, as well as
Iranian influence over Hizballah were both deteriorating; .. .
On November 2, David Jacobsen was driven to a point near the
old American Embassy compound in West Beirut. The U.S
Embassy in East Beirut immediately dispatched an embassy of-
ficer to west Beirut to pick up Mr. Jacobsen. This operation is
about to spin out of control from an operational security point
of view, and I will say right now-and I've said it to the Con-
gress in depth-my concerns were not on illegal diversion of
funds to the contras. That was about the farthest from my
mind. Here was an intiative that had been going on for about
14 months and was about to spin out of control, and no one
seemed to be realizing what was occurring.
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the first signs of the operation's demise had oc-
curred. But the secret drama had another scene
to play before it became a public scandal.
Charles Allen told the Board:
I was very troubled in September that
the operation was to spin out of control,
and I became convinced, without any evi-
dence, but I've been trained all my life as
an intelligence officer to make assessments,
that perhaps because Secord and Hakim
were directly involved and were also direct-
ly involved in supplying the contras, and I
could not understand this incredible price
markup that we were seeing-the com-
plaints were coming from Iran, from Ghor-
banifar, from the Special Assistant to the
Prime Minister of Israel, although later he
didn't raise that issue again, and I think
perhaps-it's just speculation-he was ad-
vised by the NSC that maybe some of the
money was being diverted to the contras.
On 1 October I went to Bob Gates, the
Deputy Director, and I said, I am deeply
concerned that:
And I added at the end of my conver-
sation, I said, and this first channel
that has been shut down by the NSC is
a running sore. The creditors are de-
manding payment and I said this is
going to be exposed if something isn't
done. I said perhaps the money has
been diverted to the contras, and I
said I can't prove it. Gates was deeply
disturbed by that and asked me to
brief the Director.
For one reason or the other, I did not
talk to the Director of Central Intelli-
gence until 7 October. I raised that
issue at that time about the operation-
al security of the problem. I also
raised the issue of diversion to the
contras, and Mr. Casey at that stage
said Mr. Furmark has just talked to
me, and he didn't talk about the con-
tras, but he talked about the problems
of the Canadian investors, and that
they are threatening to take law suits
to try to take some action.
I said to Mr. Casey, I think I should
put all my troubles down in a memo-
randum, and he said that would be
good, and on Columbus Day, October
13, I laid out a comprehensive memo-
randum which laid out what I thought
were the original objectives of the
NSC initiative-to open up a geo-
strategic relationship in the long term
with Iran, to get the hostage situation
out of the way as a stumbling block to
any further relations with Iran, and to
discourage Iran from conducting ter-
rorism.
And throughout this initiative Colonel
North constantly reiterated to the Ira-
nians no more terrorism against Amer-
icans. And in fact terrorism against
western targets and against Americans
have been substantially reduced since
1984.
I presented this memorandum to Mr.
Gates on the 14th because I wasn't
certain what he wanted. I gave three
recommendations--that we immediate-
ly set up a planning cell in the NSC
headed by an individual like Henry
Kissinger, Hal Saunders, Dick Helms-
I forgot who else-to really take a
hard program review of this whole ini-
tiative. What are we trying to achieve?
What are our short-term objectives?
What are our long-term objectives?
What are our options? A critical
review of everything. And I said this is
the first recommendation.
The second recommendation was to
get ready for exposure of this initia-
tive. We don't even have press guid-
ance. We ought to start preparing
some. And to get together a group
that's familiar with the Ghorbanifar
channel and decide how best we can
shut it down in an orderly system-like
fashion.
The Director was taken by this memo-
randum, and he took the original,
called Poindexter and said I must see
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you right away. And he and Gates
jointly met with Poindexter on the
15th. They presented the memoran-
dum. They talked in considerable
detail about it. Poindexter read it care-
fully in their presence, asked who
wrote it. I have known John Poin-
dexter for several years and I admire
him greatly. And they said Charlie
Allen wrote it, and Admiral Poindexter
promised to look into it. And Bill
Casey told me that he advised Admiral
Poindexter to get a White House
counsel involved right away because it
contained in the memorandum that
there would be allegations of impro-
priety and shabby conduct by U.S. offi-
cials, regardless of how this comes out,
if this was publicly exposed.
And at this meeting the Director and
Bob Gates called me in after they had
returned from seeing Admiral Poin-
dexter and Director Casey asked me to
see Roy Furmark again. I saw Roy Fur-
mark on the 16th. I got additional in-
formation. I wrote another memoran-
dum on October 17 which I laid out
how deeply troubled I was because I
could see this thing blowing up and
we were going to have an incredible
mess on our hands.
I told Mr. Furmark I needed to sit a
long time with him and debrief him
fully, and I was to see him early-I
guess it was about the week of the
20th of October-but it was the 22nd
before we could get together in New
York. I took George Cave with me,
and at that stage Mr. Furmark made
an allegation that he had been told by
Ghorbanifar that the bulk of the $15
million that had been raised by the
Canadian investors and the Arab in-
vestor, which Khashoggi had guaran-
teed, would be repaid within 30 days
at 20 percent interest that the bulk of
that money had gone to the contras in
Central America.
I recorded all this in a memorandum.
Mr. Cave and I jointly prepared the
memorandum. It went to Mr. Casey.
Mr. Casey again was deeply disturbed.
He talked to Admiral Poindexter on
secure [telephone]. For some reason,
the memorandum from Casey to Poin-
dexter was never sent. It fell into the
wrong out box. Casey, when this
whole thing erupted on the 25th of
November, he was deeply upset to find
out he had not signed it. He thought it
had gone to Admiral Poindexter. But
it laid it out starkly that there would
be allegations, that Ghorbanifar had
made allegations of diversion of funds
to the contras.
Chairman Tower: And that was Octo-
ber 17 that that memorandum was
dated?
Mr. Allen. It was never dated because
he [Casey] didn't sign it, but it was
October 24-the 23rd of October. I
came back and Mr. Cave and I briefed
Casey at 9:00 on the 23rd. We told
him the whole thing. Mr Casey was
deeply upset and said immediately
prepare that memo. For some reason,
the memo was never sent, but he
talked to Admiral Poindexter again.
Chairman Tower: What occurs to me
is that anything that critical, that im-
portant, he would have dicussed with
Admiral Poindexter.
Mr. Allen: He did, and he discussed
this whole problem on the 7th. He dis-
cussed it in depth with Admiral Poin-
dexter on the 15th, when he said you
better get your White House counsel
involved immediately.
Chairman Tower: And he was never
aware that Poindexter had not gotten
the memo?
Mr. Allen: Not until the 25th of No-
vember, when Mr. Casey asked me to
pull all the memos together, and he
said I sent that memo down and I also
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talked to him on the 24th of October
is actually the date it finally got into
his in box. But he found out he had
not sent it. He was deeply disturbed
and upset. As a matter of fact, on the
7th of October he had called Admiral
Poindexter. He had met with Admiral
Poindexter, along with Mr. Gates, on
the 15th. He had also talked to Admi-
ral Poindexter on the 24th about this.
He had given a lot of warning to Ad-
miral Poindexter that this operation
was spinning out of control.
I later met with Mr. Furmark on the
7th of November, but at that stage the
operation was starting to be exposed
in a major way, so the fact that the Ca-
nadian investors were threatening a
law suit didn't seem to be as signifi-
cant to me at that stage.
[The article appeared in the Lebanese
paper on the] 3rd of November, and
Rafsanjani on the 4th made his state-
ment that McFarlane came uninvited
and we locked them up for five days,
which was not true, but Mr. Rafsanjani
was covering his derriere just a little
on that.
I guess my only comments on this was
that the new channel that was opened
in mid-August, I had some doubts
about it initially, but it's turned out to
be a very solid channel, that the initia-
tive today is in the hands of the De-
partment of State.
(C. Allen (1) 29-35) Furmark told the Board
that, on October 7, he met the Director of Cen-
tral Intelligence in Washington, and explained
that "the Canadians were putting lots of pres-
sure on Adrian [Khashoggi], and that they were
going to sue him and he would have to then
bring in [sic] the U.S. into the transaction."
(Furmark 10)
At the same time the financiers of the arms
transfers were pressing, allegedly, to recover
their investment, the NSC staff and the CIA
prepared to make another shipment of arms to
Iran. On October 16, Earl reported a call from
chief of the Iran desk at the Agency:
The fool's [sic] want to get Nir to grease
the skids in advance on their request for
flight clearance to Tel Aviv before they
submit the paperwork. I've got the info
when you're ready to let Nir know. . . . I
recommend you DON't [sic] tell him the
flight plan data when you first tell him the
thing is approved, however; it's so detailed
he'll know we held out on him. Suggest
you tell him I'm working w/ the fool's now
to develop that info and we'll pass it to
him as soon as we have it. Then we can
call him again later tonight or tomorrow.
New subject: The fool's are leaning for-
ward as far as they can-e.g. the toes [sic]
are apparently being palletized in Alabama
already-but they can't get everything
going until they have the money ($2.037m)
in hand. They've asked for a heads up
when Copp/Abe deposit it in their Berne
account. I've codedup [sic] this request for
a heads up/confirmation and sent it to Bob
M. U. Robert McBrien] and [encryption
device].
(Earl PROF note to North,95 10/16/86,
17:42:53) Coy reported to Earl on the 20th that
the chief of the Iran desk had relayed informa-
tion about 12 pallets, each carrying 44 TOWs.
"Material [TOWs and medicine] is put together
and will be shipped from AL when money is
avail. Planning delivery to Adam [Nir] in T.A.
[Tel Aviv] on Oct 29. (Coy PROF note to Earl,
10/20/86, 11:59:29) On October 21, 1986,
Edward Tracy, a booksalesman, was kidnapped
in Beirut.
While preparations for another shipment of
TOWs continued, North and his team went to
95 McFarlane again expressed concern about North. He wrote
Poindexter on October 10: "At some point I would like to raise
Ollie's situation with you. I really think he has become every
Democrat's best target and as hard as it would be to lose him, it
will serve your and his long term interest to send him back to the
Corps". (McFarlane PROF note to Poindexter, 10/10/86,
15:10:42)
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Frankfurt for another meeting with the Rela-
tive. North left Washington on October 26.
(North Calendar) On October 29, Earl relayed
a report from North to Poindexter:
Gist of following message already given to
you by phone on the plane, but thought
you may need some of the details:
For JMP from North. Iranian rep [the Rela-
tive] assures us we will get 2 of the 3 US
hostages held by Hizballah in next few
days-probably Fri or Sat but NLT
Sunday. To ensure good coordination w/
all concerned, propose North, [and]
Secord ... proceed ASAP to Beirut to co-
ordinate release of two hostages. If ap-
proved, we wd proceed from Frankfurt to
Larnaca via charter jet then to Beirut via
US military helo to brief our ambassador. .
.. Neither Secord nor North wd be visible
but wd brief Amb Kelly on details. Secord
wd attend because he will have to brief
Amb on third hostage as well as remaining
three (ie total of 4 Americans) when we get
info from Rafsanjani on locations, slid we
decide to proceed on a rescue msn when
Iranians give us locational info. Press guid-
ance for a Presidential announcement of
the release before if becomes known will
be developed along lines of quote The
USG is grateful to all those who have as-
sisted in this effort-and that two more
AMCITS have been released unquote. Our
effort is to have RR make the announce-
ment before CNN knows it has happened,
but after the AMCITS are in USG hands,
so that RR is seen to have influenced the
action and Syrians are not....
(Earl PROF note to Poindexter, 10/29/86,
22:23:43)
North's account to Poindexter omitted the
extensive discussion about the third American
hostage and what could be done to secure his
freedom. North told the Relative that he had
already found a technician to work with the Ira-
nians on their HAWK systems, but Secord
added that it would be "highly unlikely that we
would be allowed to send technicians into Iran,
to Isfahan, until we get that guy out." The Rel-
ative replied that Rafsanjani "has been taken
with the subject of the Phoenix [air to air mis-
sile]," and that if the Iranians "could just get a
couple of these things working, and if it would
hit an . . . Iraqi plane . . . it would be a terri-
ble blow to [Iraqi] morale. . . ." The Relative
promised that, if the U.S. would send a techni-
cian to help with the Phoenix missiles Iran al-
ready had, he would "personally get the third
guy out, and . . . could tell [the U.S.] where
the rest of the guys [three most recent U.S.
hostages] are." North promised the technician,
planning to send him in at the same time as the
additional HAWK parts. Responding to the Ira-
nian's question on the next delivery of 500
TOW missiles, North answered: "If you get the
hostages out, we'll send you a million of them.
All you have to do is pay for them. And if you
guys get your act together, we'd open up an
FMS account and you'd get a better price on
them."
Jacobsen was released November 2. North
kept hoping others would be released if the
story could be kept quiet for a few days. (Coy
PROF note to Poindexter, 11/02/86, 4:25:06)
It was not to be.
The day after a Beirut magazine published an
account of the May trip to Tehran, Teicher
wrote Poindexter:
The reports of Bud's trip in pro-Syrian
Lebanese newspapers coming on the heels
of high-level Iranian visits to Damascus,
are the clearest possible signals we could
receive that the succession struggle is un-
derway and U.S.-Iranian relations are likely
to play an important role in the struggle.
Obviously there are many possible inter-
pretations of the story; maybe it was
putout by Mugniyas to embarrass Iran for
putting so much pressure on him. We may
never know the exact reason, but we must
not let this opportunity to assess the con-
sequences in Iran of these revelations from
slipping through our fingers. I think it
would be useful to produce an assessment
of the range of possible interpretation, and
possible U.S. options. To be fair, I also
think it would be appropriate to involve
B-171
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Dennis Ross. He is unaware of the com-
partment or our activities. Once we finish
the analysis, I strongly urge you to discuss
our options with Shultz and Casey. At a
minimum, we need to determine how best,
other than parts, etc., to signal the Iranians
in a productive manner.
(Teicher PROF note to Poindexter, 11/04/86,
09:35, through Pearson (lower case in original))
On October 29, North had written Poin-
dexter: "This is the damndest operation I have
ever seen. Pls let me go on to other things. Wd
very much like to give RR two hostages that he
can take credit for and stop worrying about
these other things." (North to Poindexter,
through Earl, 10/29/86).96
96 North also expressed frustration over the investigation of
Secord's air line, Southern Air Transport. (Id.)
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Appendix B
Charts and Narratives
The following charts and accompanying narrative explanations represent an estimate of
the arms transactions with Iran based on evidence developed by the Board from interviews
and documentary materials.
B-173
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TRANSACTION ONE: AUGUST 1985
Step 1-Ghorbanifar provides Khashoggi with $1 million post-dated check on August 17.
Step 2-Khashoggi deposits $1 million in Nimrodi-controlled Israeli account at Swiss bank.
Step 3-Nimrodi notifies Israeli officials of funds having been received.
Step 4-Iran transfers $1,217,410 to Iranian account at Swiss bank 1 on August 27 to pay for
shipment.
Step 5-Israel delivers 100 TOW missiles to Iran on August 30.
Step 6-Ghorbanifar notifies Khashoggi that check is covered.
1 Monies are actually transferred to an Iranian Government account prior to release to Ghorbanifar. This intermedi-
ate step has been dropped for purposes of simplification.
B-174
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TRANSACTION ONE: AUGUST 1985 SALE OF 100 ISRAELI
TOW ANTI-TANK MISSILES
Transfer of funds for payment
GHORBANIFAR
(Iranian intermediary)
$1,217,410
(27 August)
Authorization
to cash
check
KHASHOGGI
(Financing)
NIMRODI
(For Israel)
$1 million
post-dated
check
(17 August)
$1 million
deposit
to account
B-175
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TRANSACTION TWO: SEPTEMBER 1985
Step 1-Ghorbanifar provides Khashoggi with $4 million post-dated check.
Step 2-Khashoggi deposits $4 million to Nimrodi-controlled account on September 14.
Step 3-Nimrodi notifies Israeli officials that funds have been received.
Step 4-Israel delivers 408 TOW anti-tank missiles to Iran.on September 14.
Step 5-Iran transfers $5 million to Iranian account at Swiss bank on September 18 to cover
purchase.
Step 6-Ghorbanifar notifies Khashoggi that check is covered.
Step 7-Ghorbanifar pays Nimrodi $250,000 for additional eight TOW missiles.
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TRANSACTION TWO: SEPTEMBER 1985 SALE OF 408
ISRAELI TOW MISSILES
GHORBANIFAR
(Iranian intermediary)
Authorization
to cash
check
KHASHOGGI
(Financing)
$4 million
deposit
to account
(14 September)
NIMRODI
(For Israel)
Transfer of funds for payment
($5 million) (18 September)
$4 million
post-dated
check
Payment of
$250,000
for extra
8 TOWs
delivered
/ \
ISRAEL
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TRANSACTION THREE: NOVEMBER 1985
Step 1-Ghorbanifar deposits $24 million to Nimrodi-controlled account.
Step 2-Nimrodi notifies Israel of funds receipt.
Step 3-Israeli charter aircraft encounters difficulty in obtaining landing clearance from third
country staging point. U.S. assistance sought.
Step 4-Iran transfers funds to Iranian accounts in Switzerland to cover purchase of HAWK mis-
siles on November 22 and 25.1
Step 5-Eighteen HAWK missiles delivered to Iran aboard CIA proprietary aircraft flown by
Secord crew on November 25.
Step 6-Iran refuses to pay for obsolete missiles delivered. Cancels deal.
Step 7-Nimrodi returns Ghorbanifar's money less $5 million for HAWKS delivered.
1 Two deposits were made to the same Iranian account at Credit Suisse used to finance the two earlier TOW pur-
chases. The third deposit was to an Iranian account at a different Swiss bank. The $24.72 million transfer apparently was
to cover the purchase of 120 HAWK missiles. The Board has no evidence to conclude for what purpose the other two
deposits were intended.
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TRANSACTION THREE: NOVEMBER 1985 ABORTED SALE
OF 120 ISRAELI HAWK ANTI-AIRCRAFT MISSILES
WITH U.S. DELIVERY ASSISTANCE
GHORBANIFAR
(Iranian intermediary)
Transfer of funds
for payment
($24,720,000-22 November)
($20,000,000-22 November)
($20,000,000-25 November)
$19 million
refunded
$24 million
Jej deposited
to account
NIMRODI
(For Israel)
$5 million held
against return
of 18 HAWKs
IRAN
17 HAWK missiles
sit at airport
until February
1986
Secord crew
flies CIA
Iran refuses to proprietary
pay for obsolete aircraft (707)
missiles. Cancels deal with 18 HAWK
Notification
of funds
receipt
ISRAEL
missiles to
Tehran
(25 November)
THIRD
COUNTRY
TRANSHIPMENT
POINT
Israeli charter
encounters problems
with third country
authorities. U.S.
assistance requested
(19 November)
B-179
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TRANSACTION FOUR: FEBRUARY 1986
Step 1-Ghorbanifar provides Khashoggi with four post-dated checks for $3 million each.
Step 2-Khashoggi deposits $10 million in Lake Resources account on February 10.
Step 3-$3.7 million is transferred to CIA account at Swiss bank on February 10 and 11.
Step 4-CIA certifies availability of funds to DoD for purchase of 1,000 TOWs.
Step 5-DoD signs over 1,000 TOWs to CIA on February 13.
Step 6-Southern Air Transport (SAT) flies TOWs to Israel on February 14.
Step 7-Secord crew flying Israeli false flag aircraft delivers TOWs to Iran on February 17 and
27.
Step 8-17 HAWK missiles 1 carried back to Israel on return flight.
Step 9-Iran transfers $7.85 million to Swiss account on March 3 to cover repayment of
Khashoggi.2
Step 10-Ghorbanifar makes deposit to Israeli account controlled by Amiram Nir.
Step 11-Nir transfers funds to Lake Resources account.
Step 12-Ghorbanifar notifies Khashoggi that checks are covered.
Step 13-Khashoggi is repaid $12 million from Lake Resources account by April 11.
NOTE: The difference between . what Iran was charged and DoD paid leaves $6.3 million unac-
counted for and available for diversion.
1 The eighteenth missile was test-fired without success at an Iraqi fighter over Kharg Island.
2 The Board concludes that the difference between this transfer and the $12 million repaid Khashoggi was covered
by the $5 million withheld by Israel pending return of the HAWK missiles.
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TRANSACTION FOUR: FEBRUARY 1985 SALE OF 1,000 U.S.
TOW MISSILES
GHORBANIFAR
(Iranian intermediary)
0
Funds transferred to cover checks
$7.85 million (3 March) IRAN
Authorization 4 post-dated
to cash checks
checks ? J01 $3 million each
KHASHOGGI
(Financing)
Payment
of $12 million
completed
(11 April)
NIR
(For Israel)
Funds
?$7 million?
deposited L
$5 million from
HAWK sale
ISRAEL
J $10 million
deposited
(10 February)
LAKE
RESOURCES
(Secord account)
Funds \ (Staging)
?$12 million?
deposited TOWs flown to Tel Aviv
by Southern Air Transport (SAT)
$3.7 million
deposited
(10/11 February)
(14 February)
1,000 TOWs
Signed over to "CIA
(13 February)
0
Notice of funds
availability
DoD
B-181
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TRANSACTION FIVE: MAY 1986 (SUPPLEMENTED IN
AUGUST 1986)
Step 1-Ghorbanifar provides Khashoggi with 3 post-dated checks for $1, 6, and 11 million.
Step 2-Khashoggi deposits $15 million to Lake Resources account on May 14.
Step 3-Lake Resources transfers $6.5 million to CIA Swiss account on May 15.
Step 4-CIA certifies availability of funds to DoD on May 16.
Step 5-DoD signs over 508 TOWs and quantity of HAWK spare parts on May 16 and 19.
Step 6-SAT flies TOWs and HAWK spares to Israel on May 23 and 24.
Step 7-One pallet of HAWK spares arrives in Tehran with McFarlane party on May 25.
Step 8.-Second aircraft with additional HAWK spares turned back in mid-flight when no hos-
tages are released (May 25).
Step 9-Iran transfers $8 million to Swiss account in July and August in payment against goods
received.
Step 10-Additional HAWK spares delivered to Iran on August 3.
Step 11-Ghorbanifar transfers funds to Israeli account controlled by Nir.
Step 12-Nir transfers funds to Lake Resources account.
Step 13-Ghorbanifar authorizes Khashoggi to expose $3 million against checks held on July 24.
Step 14-Ghorbanifar authorizes Khashoggi to expose additional $5 million in August.
Step 15-By August, Khashoggi has been repaid out of Lake Resources account $8 million of the
$15 million loaned.
NOTE: The difference between the amount charged Iran (as advanced by Khashoggi) and that
paid to DoD leaves an additional $8.5 million unaccounted for and available for
diversion.
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TRANSACTION FIVE: MAY 1986 (SUPPLEMENTED IN
AUGUST) PARTIALLY COMPLETED
SALE OF VARIOUS U.S. HAWK MISSILE
SYSTEM SPARE PARTS
Transfer of $8 million (July-August)
GHORBANIFAR
(Iranian intermediary)
July 24
authorization
to
expose
$3 million
August
author-
ization
to expose
$5 million
KHASHOGGI
(Financing)
$15 million
deposited
(14 May)
NIR
(For Israel)
Payment of
$8 million
(by August)
LAKE RESOURCES
(Secord account)
Funds
?8 million?
deposited
SRAEL
(Staging)
spares
508 TOWs
tj
3 post-dated
checks
($1, 6,
11 million)
508 TOWs and
HAWK spares
signed over
Notice of availability of funds (16 May)
,,L(Replenishment)
Second aircraft
turned back
mid-flight
when no hostages
released
(25 May)
1b1
$6.5 million
deposited
(15 May)
SAT flies \
TOWs and HAWK
spares to Israel
(23/24 May)
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TRANSACTION SIX: OCTOBER 1986
Step 1-Iranian representatives (the Second Channel) deposit $7 million into Lake Resources ac-
count on September 26 1 to cover purchase of 500 TOWs and additional HAWK spares.
Step 2-Lake Resources transfers $2.037 to the CIA Swiss account. Because of a communica-
tions failure between North and Secord, the deposit is made to a closed account.
Step 3-Because the funds are not immediately available for DoD, North asks Israel to deliver
500 TOWs from its own inventory.
Step 4-500 Israeli TOWs delivered to Iran on October 30 and 31.
Step 5-500 TOWs released to CIA and transported to Kelly AFB on November 3.
Step 6-TOWs shipped to Ramstein AFB, West Germany, via MAC flight on November 6.
Step 7-CIA proprietary airline delivers TOWs to Israel on November 7 as replacements.
NOTE: The difference between the amount provided by Iran and that paid to CIA (DoD was still
unpaid for this last shipment as of January 20, 1987) leaves another almost $5 million
unaccounted. This brings the total amount available for diversion between February and
October 1986 to approximately $19.8 million less actual costs incurred in support of the
operation.
1 There is some discrepency surrounding these dates. The September 26, 1986, date is contained in a PROF note
from North to Poindexter which also contains the $7 million figure. The CIA I/G report, relying on George Cave, states
that the relative brought a check for $4 million with him to the late October meetings in Frankfurt. Confronted with this
inconsistency, the Board has chosen to rely on the contemporaneous account of LtCol North.
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TRANSACTION SIX: OCTOBER 1986 SALE OF -500 U.S. TOW
MISSILES AND VARIOUS HAWK MISSILE SYSTEM
SPARE PARTS
SECOND
CHANNEL
(Representing Iran)
$7 million
deposited
(26 September)
500
Israeli
TOWs
delivered
(30/31 October)
via CIA proprietary
LAKE
RESOURCES
(Secord account)
4W
CIA
(closed)
Swiss account
Request to supply 500 TOWs
because of funds availability
problem.
$2.037 million
deposited
(? 29 October)
CIA
500 TOWs
flown via
MAC aircraft
(6 November)
500 TOWs released
to CIA, shipped to
Kelly AFB
(3 November)
DoD
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Appendix C
The NSC Staff and
the Contras
In December, 1981, President Reagan signed
a National Intelligence Finding establishing
U.S. support for the Nicaraguan resistance
forces. The policy of covert support for the
Contras was controversial from the start-espe-
cially in Congress. Concern that this policy
would provoke a war in the region led Con-
gress on December 21, 1982 to pass the
"Boland Amendment," barring the Central In-
telligence Agency and the Department of De-
fense from spending funds toward "overthrow-
ing the Government of Nicaragua or provoking
a military exchange between Nicaragua and
Honduras."
Despite disagreement-both within the Ad-
ministration and with the Congress-the policy
continued apace. In September, 1983, Presi-
dent Reagan signed a second Nicaragua finding
authorizing "the provision of material support
and guidance to the Nicaraguan resistance
groups." The objective of this finding was two-
fold:
? inducing the Sandinista Government in
Nicaragua to enter into negotiations with
its neighbors; and
? putting pressure on the Sandinistas and
their allies to cease provision of arms,
training, command and control facilities
and sanctuary to leftist guerrillas in El Sal-
vador.
Congressional opposition grew when reports
were published that the CIA had a role in di-
recting the mining of the Nicaraguan harbors
in summer 1983. On December 8, 1983, Con-
gress tightened the scope of permissible CIA
activities, placing a $24 million cap on funds
that could be spent by DoD and CIA or any
other agency "involved in intelligence activi-
ties" toward "supporting, directly or indirectly,
military or paramilitary operations in Nicaragua
by any nation, group, organization, movement
or individual." In October, 1984, Congress cut
off all U.S. funding for the Contras, unless spe-
cifically authorized by Congress. Section
8066(a) of the Fiscal Year 1985 DoD Appro-
priations Act provided:
During fiscal year 1985, no funds available
to the Central Intelligence Agency, the De-
partment of Defense, or any other agency
or entity of the United States involved in
intelligence activities may be obligated or
expended for the purpose or which would
have the effect of supporting, directly or
indirectly, military or paramilitary oper-
ations in Nicaragua by any nation, group,
organization, movement, or individual.'
This legislation presented the Administration
with a dilemma: how, if at all, to continue im-
plementing a largely covert program of support
for the Contras without U.S. funds and without
the involvement of the CIA. As soon as the
Congressional restrictions were put into effect,
CIA headquarters sent instructions to its field
stations to cease all contacts with resistance
groups except for intelligence collection activi-
ties:
Field stations are to cease and desist with
actions which can be construed to be pro-
' A narrower but substantively similar provision was incorpo-
rated the next day into the Intelligence Authorization Act for
Fiscal Year 1985. A series of continuing resolutions extended the
prohibition through December 19, 1985.
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viding any type of support, either direct or
indirect, to the various entities with whom
we dealt under the program. All future
contact with those entities are, until further
notice, to be solely, repeat solely, for the
purpose of collecting positive and counter-
intelligence information of interest to the
United States.
From the outset, questions were raised as to
whether the provision applied to the NSC staff.
Some in Congress argued that the Boland
Amendment applied to the NSC staff, since it is
"involved in intelligence activity." Executive
Order 12333 on covert action and Congres-
sional oversight designates the NSC "as the
highest Executive Branch entity that provides
review of, guidance for and direction to the
conduct of all national foreign intelligence,
counterintelligence, and special activities, and
attendant policies and programs."
But the NSC staff appears to have received
different advice. A classified legal memoran-
dum, retrieved from LtCol North's safe, appar-
ently was prepared by the President's Intelli-
gence Oversight Board ("IOB") between
March 1 and December 19, 1985. The letter-
head and transmittal information had been re-
moved, but the document contained references
to "the Board" and "the Board's Counsel" and
resembled in form, style and subject matter
other memoranda prepared for the NSC staff
by the IOB.2 The memorandum was developed
in response to a letter from then Congressman
Michael Barnes. It concluded: (1) "the NSC is
not covered by the prohibition," (adding by
footnote that "LtCol. North might be, as he
evidently is on a non-reimbursed detail from
the Marine Corps");3 and (2) "None of LtCol
2 The IOB did not provide a copy of this document in re-
sponse to the Board's request for all memoranda "providing
legal advice to the NSC staff in 1985 and 1986." The IOB did
provide two other memoranda to the Board dated May 19, 1986
and May 29, 1986, respectively, that address allegations: (a) that
North and CIA employees made statements to overthrow the
government in Nicaragua; and (b) that the CIA prepared an "as-
sassination manual" contrary to law. In both cases, the IOB
found the allegations unfounded. A third IOB memorandum pro-
vided in response to the Board's request is discussed infra.
3 The IOB cited three points to establish that section 8066 did
not apply to the NSC and, presumably, its staff. First, the IOB
looked to Congressional intent, which it asserted was demonstrat-
ed by the parallel but narrower provisions of the FY 1985 Intelli-
gence Authorization Act. That Act, passed by Congress the day
after section 8066, was narrower in two respects: (a) it omitted
the reference to "any agency or entity involved in intelligence ac-
tivity"; and (b) it was limited to "funds authorized to be appro-
North's activities during the past year consti-
tutes a violation of the Boland Amendment."
After October, 1984, the NSC staff-particu-
larly Oliver North-moved to fill the void left
by the Congressional restrictions. Between
1984 and 1986, LtCol North, with the acquies-
cence of the National Security Advisor, per-
formed activities the CIA was unable to under-
take itself, including the facilitation of outside
fundraising efforts and oversight of a private
network to supply lethal equipment to the Con-
tras.
The Director of the CIA Central American
Task Force (CATF), described the inter-agency
process on Central America at the time he
moved into his job in late September, 1984:
"There was only one point in the appartus
[sic] who was functioning and who seemed
to be able and was interested and was
working the process, and that was Ollie
North. And it was Ollie North who then
moved into that void and was the focal
point for the Administration on Central
American policy during that timeframe
[until fall 1985.]"
The NSC Staff Steps Into the
Void
LtCol North's involvement in Contra support
is evident as early as September, 1984, before
the October, 1984 ban was in effect. He direct-
ed his attention to two areas: operations and
fundraising.
1. North's operational role:
September, 1984-October, 1985
In a memorandum on September 2, 1984
LtCol North informed Mr. McFarlane of a
recent air attack launched into Nicaraguan ter-
ritory by the Federated Democratic Resistance
priated by this Act or by the Intelligence Authorization Act for
Fiscal Year 1984." Legal intent as evinced by this narrower stat-
ute was deemed to govern interpretation of the DOD Appropria-
tions Act.
Second, the IOB noted that E.O. 12333, which designates the
NSC as the "highest Executive Branch entity" responsible for the
conduct of foreign intelligence, does not include the NSC among
the agencies comprising "the Intelligence Community."
Finally, the IOB argued that the exclusion of the NSC Staff was
intended by Congress because the prescribed role of the NSC
was to coordinate rather than implement covert action.
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("FDN"), a major Contra faction. LtCol North
said that at a meeting the previous day he and
a CIA official involved in Central American af-
fairs had urged Contra leader Adolpho Calero
to postpone the attack. Despite Mr. Calero's
agreement, the plan was carried out and, in the
course of the attack, the Contras lost "the only
operating FDN helicopter on the Northern
Front."
LtCol North regarded this loss as "a serious
blow." He told Mr. McFarlane, "It may there-
fore be necessary to ask a private donor to
donate a helicopter to the FDN for use in any
upcoming operation against an arms delivery."
Outside help was necessary since "FDN re-
sources are not adequate to purchase a helicop-
ter at this time." He recommended that Mr.
McFarlane grant him approval to approach a
private donor for "the provision of a replace-
ment civilian helicopter."
At the bottom of the memorandum Mr.
McFarlane initialed, "Disapprove," and wrote,
"Let's wait a week or two." After further
thought, Mr. McFarlane apparently changed his
mind. He crossed out the above sentence and
wrote, "I don't think this is legal."
Two months later, in another memorandum
to Mr. McFarlane, LtCol North sought approval
to continue providing intelligence support to
Mr. Calero. Mr. Calero had requested informa-
tion from LtCol North to assist him in efforts
.to "take out" Soviet provided Hind-D helicop-
ters recently shipped to El Bluff, Nicaragua.
LtCol North told Mr. McFarlane that he earlier
had forwarded Mr. Calero responsive intelli-
gence obtained from Robert Vickers, CIA Na-
tional Intelligence Officer for Latin American
affairs and GEN Paul Gorman. Mr. Calero de-
cided to fly to Washington that day to review
with LtCol North a plan to strike the Hinds and
a longterm strategy for establishing a Calero-
Cruz coalition. The Director of the CIA CATF
contacted LtCol North when he learned of Mr.
Calero's unexpected trip to Washington, but,
citing the new statutory prohibitions, declined
an invitation to meet with LtCol North and Mr.
Calero.
Director Casey learned of LtCol North's dis-
cussions with the CIA official and expressed his
concern to Mr. McFarlane that LtCol North had
discussed "Calero, Guatemala, MIGs, dollars,
etc." LtCol North's November 7 memorandum
assured Mr. McFarlane that he had withheld
much information in his conversations:
At no time did I discuss with [name delet-
ed] financial arrangements for the FDN. At
no time did I indicate that Calero was at-
tempting to attack the MIGs. I specifically
told [the Director of the CIA CATF] that
Calero was attempting to collect informa-
tion on the MIGs in Corinto and would
pass this information to a CIA agent in Te-
gucigalpa if it was available.
In 1985, LtCol North's interest in operation-
al activities with respect to the Contras in-
creased. In a memorandum for Mr. McFarlane
on February 6, 1985 LtCol North discussed a
Nicaraguan merchant ship, the MONIMBO,
suspected of carrying arms via North Korea for
delivery to Nicaragua. LtCol North recom-
mended that Mr. McFarlane "authorize Calero to
be provided with the information on MONIMBO and
approached on the matter of seizing or sinking the
ship." (emphasis added). LtCol North said that
Calero would be willing to finance such an op-
eration, but would require operational support.
LtCol North suggested a friendly nation's spe-
cial operations unit might.be asked to assist in
the operation. Once the ship was seized LtCol
North said:
arrangements would have to be made for
removal of the cargo for further transfer to
the FDN, since it is unlikely that any of the
other Central American states would allow
the MONIMBO to enter their harbors once
she had been pirated.
At the bottom of the memorandum VADM
Poindexter indicated his agreement: "We need
to take action to make sure ship does not arrive
in Nicaragua." A note from VADM Poindexter
to Mr. McFarlane dated February 7 is attached
to the memorandum, suggesting that the issue
be raised at a meeting later that day of the
Crisis Pre-Planning Group ("CPPG"), an inter-
agency group established under auspices of the
NSC system. VADM Poindexter wrote:
Except for the prohibition of the intelli-
gence community doing anything to assist
the Freedom Fighters I would readily rec-
ommend I bring this up at CPPG at 2:00
today. Of course we could discuss it from the
standpoint of keeping the arms away from Nica-
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ragua without any involvement of Calero and
Freedom Fighters. What do you think? JP
(emphasis added).
We have no record on whether this was dis-
cussed at the CPPG meeting but understand
that the project was abandoned after the
friendly government rejected involvement.
On February 6, LtCol North informed Mr.
McFarlane of recent efforts by Maj Gen John
Singlaub, USAF Ret; to raise funds for the
Contras in Asia. LtCol North said that as a
result, two foreign governments offered to pro-
vide assistance. LtCol North sought Mr. McFar-
lane's approval to coordinate ' Singlaub's con-
tacts with these governments:
Singlaub will be here to see me tomorrow.
With your permission, I will ask him to ap-
proach [X] at the [country deleted] Inter-
ests Section and [Y] at the [country delet-
ed] Embassy urging that they proceed with
their offer. Singlaub would then put Calero
in direct contact with each of these offi-
cers. No White House/NSC solicitation
would be made. [hand written notes:]. Nor
should Singlaub indicate any U.S. Govern-
ment endorsement whatsoever.
We do not know if Mr. McFarlane ever ap-
proved this plan, but the Contras eventually re-
ceived funds from both foreign governments.
LtCol North had further contacts with Mr.
Singlaub in March. On March 5 he sent a letter
to [an ambassador of a Central American coun-
try posted in Washington] requesting "a multi-
ple entry visa" for Mr. Singlaub. LtCol North
wrote the Ambassador: "I can assure you that
General Singlaub's visits to [your country] will
well serve the interests of your country and
mine." On March 14, Mr. Singlaub reported to
North on his recent trip. He said that he had
met with several FDN leaders and that he had
agreed to recruit and send "a few American
trainers" to provide "specific skills not avail-
able within this (sic) current resources." Mr.
Singlaub specified that "these will be civilian
(former military or CIA personnel) who will do
training only and not participate in combat op-
erations."
More direct NSC staff involvement in efforts
to gain third country support for the Contras
was evident in a memorandum LtCol North
sent to Mr. McFarlane dated March 5, 1985.
North described plans to ship arms to the Con-
tras via [country deleted], to be delivered in
several shipments starting on or about March
10, 1985. The transaction required certification
that the arms would not be transferred out of
[country deleted]. LtCol North attached copies
of such end-user certificates, provided by
[country deleted] for nearly "$8 million worth
of munitions for the FDN." He told Mr. McFar-
lane that these end-user certificates are "a direct
consequence of the informal liaison we have established
with GEN [name deleted] and your meeting with he
[sic] and President [name deleted]." (emphasis
added).
LtCol North's memorandum described the
need to provide increased U.S. assistance to
[country deleted] to compensate them "for the
extraordinary assistance they are providing to
the Nicaraguan freedom fighters." LtCol North
said:
Once we have approval for at least some
of what they have asked for, we can ensure
that the right people in [country deleted]
understand that we are able to provide re-
sults from their cooperation on the resist-
ance issue.
An accompanying memorandum to Secretary
Shultz, Secretary Weinberger, CIA Director
Casey and Chairman of the Joint Chiefs of Staff
Vessey requested their views on increased U.S.
assistance to a Central American country, but
made no reference to the Contra arms ship-
ments or the end user certificates.
2. Private Funding:
January-April, 1985
As the March, 1985, Congressional vote on
Contra aid approached, elements of the NSC
staff focused their efforts on strategies for re-
packaging the Contra program to increase sup-
port on Capitol Hill.
In a memorandum to Mr. McFarlane on
March 16, 1985, LtCol North outlined a fall-
back plan for supporting the Contras should
the Congress not endorse resumption of U.S.
Government support. LtCol North recommend-
ed that the President make a public request to
the American people for private funds "to sup-
port liberty and democracy in the Americas."
Mr. McFarlane wrote in the margin, "Not yet."
Nevertheless, he indicated his agreement to
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some of the accompanying elements of the pro-
posal:
? "The Nicaraguan Freedom Fund, Inc., a
501(c)3 tax exempt corporation, must be
established. . . . (This process is already
under way)." Mr. McFarlane wrote next to
this point, "Yes."
? "The name of one of several existing non-profit
foundations we have established in the course of
the last year will be changed to Nicaraguan
Freedom Fund, Inc. Several reliable Amer-
ican citizens must be contacted to serve as
its corporate leadership on its board of di-
rectors along with Cruz, Calero, and
Robelo." (emphasis added). Mr. McFar-
lane wrote, "OK."
Next to the proposal that "current donors"
be apprised of the plan and convinced to pro-
vide "an additional $25-30M to the resistance
for the purchase of arms and munitions," Mr.
McFarlane wrote, "Doubt." LtCol North rec-
ommended that Mr. McFarlane consult Secre-
tary Shultz on the proposals, but we have no
information as to whether this was done.
During this period LtCol North was well-in-
formed about the financial and military situa-
tion of the Contras. In a memorandum to Mr.
McFarlane on April 11, 1985, LtCol North de-
tailed FDN funding received since the expira-
tion of U.S. assistance:
From July 1984 through February 1985,
the FDN received $l M per month for a
total of $8M. From February 22 to April 9,
1985, an additional $16.5M has been re-
ceived for a grand total of $24.5M. Of this,
$17,145,594 has been expended for arms,
munitions, combat operations, and support
activities.
LtCol North recommended that effort be un-
dertaken to "seek additional funds from the
current donors ($15-20M) which will allow the
force to grow to 30-35,000." An attachment to
this document itemized Contra arms purchases
during this period. A sample entry read:
Airlift #,2-March 1985:
750,000 rounds 7.62 x 39 ..........................
$210,000
1,000 RPG-7 grenades ..............................
265,000
8,910 hand grenades ..................................
84,645
60-60mm mortars ....................................
96,000
1,472 kqs C-4 .............................................
47,104
On May 1, 1985, a nearly identical memoran-
dum was prepared for JCS Chairman Vessey
from LtCol North.
In his March 16 memorandum to Mr. McFar-
lane, LtCol North also reported that he had
checked the legality of his proposals with pri-
vate legal counsel: "Informal contacts several
months ago with a lawyer sympathetic to our
cause indicated that such a procedure would be
within the limits of the law." He recommended
that White House Counsel Fred Fielding "be
asked to do conduct [sic] a very private evalua-
tion of the President's role." Mr. McFarlane
wrote, "not yet" in the margin.
The Board asked Mr. McFarlane whether he
was aware of funds received by the FDN during
this period. He provided the following written
response:
In May or June of 1984, without any solici-
tation on my part, a foreign official offered
to make a contribution from what he de-
scribed as "personal funds" in the amount
of one million dollars per month for sup-
port of the FDN. He asked my help in de-
termining how to proceed. I asked LTC
North to find out where the contribution
should be sent. He subsequently obtained
the necessary information from the FDN
leadership, and I provided it to the donor.
I was told it was an FDN bank account in
Miami. In early 1985 the same individual
advised me that he intended to continue
support in that year at approximately
double the former rate. I was separately in-
formed by the Secretary of Defense and
General Vessey that the total amount of
the contribution during 1985 was 25 mil-
lion dollars.
On an apparently unrelated letter from his
secretary dated April 18, 1985, LtCol North
sketched the attached diagram linking him with
Robert Owen, an American citizen with close
ties to the Contras; Andrew Messing, Executive
Director of the non-profit organization the Na-
tional Defense Council; and Linda Guell, Direc-
tor of "Western Goals." The diagram showed
an arrow from LtCol North to Mr. Messing, Mr.
Messing to Ms. Guell, Ms. Guell to Owen.
Under Owen's name North writes "weapons";
under Messing's, "funds." North's calendar
shows that he met regularly with Mr. Messing
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and Mr. Owen during 1984 and 1985. Some-
times these meetings took place with other fig-
ures often linked to the "benefactors" net-
work-e.g. John Singlaub, John Hull and Adol-
pho Calero.
The Board examined the information avail-
able to it showing LtCol North's connection to
Political Action Committees. The information,
which indicated that he had contacts of an in-
determinant nature, will be available to Con-
gressional committees.
Congressional Reactions
On August 15, 1985, Congress authorized
the expenditure of $27 million in humanitarian
assistance, to be administered by any agency
but CIA and DOD. By its terms, the authoriza-
tion would expire on March 31, 1986.
Congressional scrutiny of LtCol North's ac-
tivities increased. To varying degrees through-
out 1985, Congress had pressed the NSC staff
for information about LtCol North's involve-
ment in Contra fundraising and resupply activi-
ties. The following exchanges took place.
In a reply to an August 20, 1985 letter from
Lee Hamilton, Chairman of the House Perma-
nent Select Committee on Intelligence, Mr.
McFarlane wrote:
I can state with deep personal conviction
that at no time did I or any member of the
National Security Council staff violate the
letter or spirit of the law.
He reiterated his comments in a letter to
Congressman Michael Barnes on September
12, 1985:
I want to assure you that my actions, and
those of my staff, have been in compliance
with both the spirit and the letter of the
law. . . . There have not been, nor will
there be, any expenditures of NSC funds
which would have the effect of supporting
directly or indirectly military or paramili-
tary operations in Nicaragua by any nation,
group, organization, movement or individ-
ual....
In a subsequent letter, Congressman Hamil-
ton inquired into the nature of the NSC staffs
involvement with the fundraisers. On October
7, 1985, Mr. McFarlane replied to Congress-
man Hamilton:
There is no official or unofficial relation-
ship with any member of the NSC staff re-
garding fund raising for the Nicaraguan
democratic opposition.
In response to the question of whether
Oliver North "at any time "advise[d] individ-
uals on how they might donate money to the
rebels?"
Mr. McFarlane answered, "No."
On October 21, 1985 Mr. McFarlane re-
ceived an inquiry from Congressman Richard
Durbin. Congressman Durbin asked: "Are
there any efforts currently underway in the Ad-
ministration to facilitate the sending of private
donations to the contras?"
McFarlane replied: "No."
Authorization for
"Communications" and "Advice"
In December, 1985, Congress passed two
measures. The first, contained in section 8050
of the Fiscal Year 1986 Defense Appropriation
Act, reenacted the Boland prohibition.4 The
second, set out in section 105(a) of the Fiscal
Year 1986 Intelligence Authorization Act, au-
thorized classified amounts for communica-
tions, communications equipment training and
"advice" for the Contras.
The "communications" and "advice" provi-
sions introduced substantial uncertainty as to
whether any US officials-CIA, DOD or the
NSC staff-could advise the Contras on the de-
livery or distribution of lethal supplies. First,
the provisions were so ambiguous that even the
drafters debated their meaning.5 Second, appli-
4 Section 8050 of P.L. 99-190 provided:
None of the funds available to the Central Intelligence
Agency, the Department of Defense, or any other agency or
entity of the United States involved in intelligence activities
may be obligated or expended during fiscal year 1986 to
provide funds, material, or other assistance to the Nicara-
guan democratic resistance unless in accordance with the
terms and conditions specified by section 105 of the Intelli-
gence Authorization Act (Public Law 99-169) for fiscal year
1986.
5 On December 4, 1985, the date the provision passed, Lee
Hamilton, Chairman of the House Permanent Select Committee
on Intelligence, wrote to CIA Director Casey on the statute:
[I]ntelligence personnel are not to act as military advisors to
the contras. This certainly includes advising them on logisti-
cal operations upon which military or paramilitary operations
depend for their effectiveness.
David Durenberger, then Chairman of the Senate Select Com-
mittee on Intelligence, offered a different view, forwarding CIA
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cable statutory provisions were contained in an
annex classified top secret, and developed pur-
suant to a legislative history likewise classified.
Whether such secrecy was warranted, it did not
enhance common understanding of the statute.
Within the Executive Branch, interpretations
differed. The CIA, in a "Question for the
Record re 28 January Covert Action Update
Briefing," concluded that it was not authorized
to provide "specialized logistics training"
needed by the Contras. The IOB, by memoran-
dum of April 8, 1986, provided VADM Poin-
dexter a classified legal analysis that concluded
that under the "communications" and "advice"
provision, any U. S. agency may lawfully provide
basic military training to the Contras, "so long
as such training does not amount to the partici-
pation in the planning or execution of military
or paramilitary operations in Nicaragua."6
Direct Involvement in
Resupply: Fall 1985-Summer
1986
By fall 1985, LtCol North was actively en-
gaged in private efforts to resupply the Contras
with lethal equipment.
On November 22, 1985, LtCol North wrote
VADM Poindexter that complications in an
arms shipment (via a third country) to Iran re-
Director Casey a copy of his letter to Congressman Hamilton of
December 5:
[A]dvice on logistics activities integral to the effectiveness of
particular military and paramilitary operations is precluded if
it would `amount to' participation in such activities, even if
there is no physical participation. At the same time . . . the
conferees did not mean to place the entire subject of logis-
tics off limits. We certainly would, for example, want to en-
courage advice on logistics related to the effective distribu-
tion of humanitarian and communications assistance.
Congressman Hamilton countered by letter of December 9:
[T]he Act makes clear direct CIA logistical advice on the ef-
fective distribution of humanitarian assistance is not appro-
priate.
e The IOB memorandum addressed the question, "Can the
Central Intelligence Agency or any other agency of the U.S. Gov-
ernment legally provide generic military training to the Nicara-
guan democratic resistance?"
It concluded:
[T]he Intelligence Authorization Act for FY 1986 does au-
thorize the obligation or expenditure of funds by the Central
Intelligence Agency, the Department of Defense or other in-
telligence-related agencies of the U.S. Government to pro-
vide basic military training for, the Nicaraguan democratic re-
sistance so long as such training does not amount to the par-
ticipation in the planning or execution of military or para-
military operations in Nicaragua.
quired Mr. Secord to divert a plane that he
planned to use for a Nicaraguan arms ship-
ment. LtCol North told VADM Poindexter that
the plane:
was at [city deleted] to put up a load of
ammo for UNO . . . Too bad, this was to
be our first direct flight (of ammo) to the resist-
ance field at [x] inside Nicaragua. The ammo
was already palletized w/parachutes at-
tached. Maybe we can do it on Weds or
Thurs.
LtCol North said he would meet Mr. Calero
that evening to advise him "that the ammo will
be several days late in arriving."
One month later, in an internal NSC mes-
sage to VADM Poindexter discussing the Iran
operation, LtCol North wrote:
OpSec concerns are threefold: communica-
tions, deliveries enroute to Iran and re-
plenishment of Israeli stocks. To solve the
first problem an Ops Code is now in use
by all parties. This code is similar to the one
used to oversee deliveries to the Nicaraguan Re-
sistance and has never been compromised. (em-
phasis added). [North PROF notes to Poin-
dexter, Dec. 4, 1985].
In a memorandum dated February 18, 1986
to VADM Poindexter, LtCol North referred to
Albert Hakim, a private U.S. citizen who was
involved in the Iran operation. He stated that
Hakim was "VP of one of the European compa-
nies set up to handle aid to resistance move-
ments." Several days later, in a message to Mr.
McFarlane LtCol North again mentioned
Hakim with respect to both Iran and Central
America. He wrote: "Because CIA would not
provide a translator for the sessions, we used
Albert Hakim, an AMCIT who runs the Euro-
pean operation for our Nicaraguan resistance
support activity." [North PROF notes to
McFarlane, Feb. 27, 1986]
From January to March, 1986, LtCol North
received fifteen encryption devices from the
National Security Agency for use in transmit-
ting classified messages in support of his coun-
terterrorist activities. These devices enabled
LtCol North to establish a private communica-
tions network. He used them to communicate,
outside of the purview of other government
agencies, with members of the private Contra
support effort. At least one device was sent to
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Mr. Secord and another, through a private indi-
vidual, to a CIA field officer posted in Central
America.
We counted some thirty-six messages to
LtCol North from members of this Contra re-
supply network-not including North's replies
or additional documents not in our possession.
Some of the messages to LtCol North from Mr.
Secord, and others: (a) asked him to direct
where and when to make Contra munitions
drops; (b) informed him of arms requirements;
and (c) apprised him of payments, balances,
and deficits. At least nine lethal "drops" were
coordinated through this channel from March
to June 1986; two of these were delivered
through [country deleted] ports.
Excerpts from the messages received by
LtCol North on this channel follow:
(1) On March 24, 1986, Mr. Secord sent
LtCol North a secure message in which he dis-
cussed plans for an upcoming "drop" to
Contra troops along the Costa Rican border
(the so-called southern front):
[X] should have held discussions with [Y]
by now re. L-100 drop to Blackies troops.
If you have lined up [Z] to go to [location
deleted] on the L-100, suggest you call [Y]
secure and ensure he does all possible get
load released from [location deleted]-also
emphasize we ought to drop something be-
sides 7.62; e.g., grenades, medical supplies,
etc.
LtCol North's handwritten notes on this docu-
ment enumerate quantities of various ammuni-
tion types.
(2) On April 9, 1986, LtCol North received
another secure message from Secord about
preparations for a special shipment. North's
notations on this message read: "Apr 9-1900.
Confirmed arrival [city, country deleted] of
L-100 w/load of [specified quantities of]
ammo. . . . Confirming drop, Friday 11 April
0030."
(3) On April 12, 1986, LtCol North received
a secure message from the CIA field officer
confirming a successful drop to the UNO South
Force and outlining plans for the next two to
three weeks:
[A]ir drop at sea for UNO/KISAN indige-
nous force area . . . lethal drop to UNO
South . . . transfer of 80 UNO/FARN re-
cruits . . . carrying all remaining cached
lethal materiel to join UNO South Force.
My objective is creation of 2,500 man force
which can strike northwest and link-up with
quiche to form solid southern force. Likewise,
envisage formidable opposition on Atlantic
Coast resupplied at or by sea. Realize this
may be overly ambitious planning but with
your help, believe we can pull it off. (em-
phasis added).
(4) Three days later, the field officer sent an-
other secure message to confirm a delivery to
an airbase in a Central American country; he
tells LtCol North the delivery is loaded with
ammunition "for your friends." He asks LtCol
North: "When and where do you want this
stuff? We are prepared to deliver as soon as
you call for it."
The field officer testified before the Board:
[T]his private benefactor operation . . .
was, according to my understanding, con-
trolled by Colonel North." He also in-
formed the Board that all the shipments he
was involved in were arms deliveries: "This
was all lethal. Benefactors only sent lethal
stuff.7
The CIA field officer explained the legal
regime under which he was operating:
I could not plan or engage in any military
operation inside Nicaragua . . . But I
could provide information that would allow
the safe delivery of material to the people
inside; I could pass information concerning
potential deliveries to supply them, but not
for any specific military operation. In other
words, I could be the conduit for informa-
tion; passing of information was legal or
Even before the CIA field officer made his disclosures to the
Board, his activities had triggered a legal debate within the CIA.
In a memorandum dated December 5, 1986 to the Deputy Direc-
tor for Operations, CIA Associate General Counsel Jameson
stated that "contacts with the benefactors, although contrary to
policy, were not contrary to law." Flight vectors, Sandanista anti-
aircraft positions, and other similar information needed to carry
out safe aerial deliveries fell within the terms of the "advice" au-
thorized in December, 1985 by the Intelligence Authorization
Act.
By memorandum to the CIA General Counsel of January 22,
1987, the CIA Inspector General's office questioned Jameson's
interpretation. The Inspector General maintained, among other
things, that the field officer's activities could be characterized as
planning for a paramilitary operation, expressly barred in the
Joint Explanatory Statement accompanying the Conference Com-
mittee Report to H.R. 2419.
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permissible under the agreement reached
between the House and the Senate with
the Agency under the Boland Amend-
ment . . .
Asked if LtCol North ever discussed the le-
gality of actions with him, the field officer an-
swered,
I asked him, are you sure this is all right-
you know, that sort of thing. Are you sure
this is okay? He said, yes, yes, all you're
doing is passing information.
The field officer was a member of a group
that met for three minutes with President
Reagan in the Oval Office in 1986. [photo ses-
sion] The group comprised the Minister of
Public Security from a Central American coun-
try and his wife, Chief of Staff Regan, VADM
Poindexter and LtCol North.
In spring 1986, LtCol North also was in-
volved in other efforts to help facilitate Contra
military purchases through third countries. On
March 26, 1986, three months after Mr. McFar-
lane left Government service, LtCol North in-
formed Mr. McFarlane of his efforts (again,
with Secord's assistance) to obtain Blowpipe
launchers and missiles for the Contras:
[W]e are trying to find a way to get 10
BLOWPIPE launchers and 20 missiles
from [a South American Country] thru the
Short Bros. Rep. . . . Short Bros., the
mfgr. of the BLOWPIPE, is willing to ar-
range the deal, conduct the training and
even send U.K. `tech. reps' fwd if we can
close the arrangement. Dick Secord has al-
ready paid 10% down on the delivery and
we have a [country deleted] EUC [end user
certificates] which is acceptable to [that
South American country].
On April 4, Mr. McFarlane replied to LtCol
North, "I've been thinking about the blowpipe
problem and the Contras. Could you ask the
CIA to identify which countries the Brits have
sold them to. I ought to have a contact in at
least one of them."
In the same message, Mr. McFarlane also
asked: "How are you coming on the loose ends
for the material transfer? Anything I can do? If
for any reason, you need some mortars or
other artillery-which I doubt-please let me
know."
When shown the aforementioned message,
Mr. McFarlane submitted the following written
response:
Since the area of mortars and artillery is
one in which I have expertise, gained
through 20 years of experience as an artil-
lery officer, I was prepared to assist LTC
North by furnishing information and
advice. I did not offer to assist LTC North
in negotiating, purchasing, or obtaining
mortars or other artillery for the Contras,
nor did I ever take any such action.
On May 2, LtCol North informed VADM
Poindexter that he believed the Contras were
readying to launch a major offensive to capture
a "principal coastal population center" in Nica-
ragua and proclaim independence. North
warned that if this occurred "the rest of the
world will wait to see what we do-recognize
the new territory-and UNO as the govt-or
evacuate them as in a Bay of Pigs." He suggest-
ed that the U.S. should be prepared to come to
the Contras' aid.
Assistant Secretary of State for Inter-Amen-
can Affairs Elliot Abrams testified that he could
recall "a time when Ollie was pushing for the
Contras to grab a piece of Nicaraguan territory
and proclaim independence." Mr. Abrams said
that he might have indicated to LtCol North his
support for the plan, but never took the idea
seriously: "It was totally implausible and not
do-able."
In a May 8 message, LtCol North also in-
formed VADM Poindexter of an Israeli offer to
assist in Central America:
DefMin Rabin sent his MilAide to see me
with the following offer:. The Israelis wd be
willing to put 20-50 Spanish speaking mili-
tary trainers/advisors into the DRF if we
want this to happen. They wd do this in
concert with an Israeli plan to sell the
KFIR fighter to Honduras as a replacement
for the 28 yr old [Super Mystere] which
the Hondurans want to replace. . . . Rabin
want to meet w/me privately in N.Y. to dis-
cuss details. My impression is that they are
prepared to move quickly on this if we so
desire. Abrams likes the idea.
Mr. Abrams told the Board that he did not
recall ever discussing any offer of Israeli assist-
ance to the Contras with LtCol North. Former
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U.S. Ambassador to Costa Rica Louis Tambs
and a senior CIA official stationed in Central
America said that to their knowledge Israel
never shipped any arms to the Contras.
In a June, 1986 note to VADM Poindexter
regarding the third country issue, LtCol North
discussed previous solicitations from [two
countries deleted]. He told VADM Poindexter:
I have no idea what Shultz knows or
doesn't know, but he could prove to be
very unhappy if he learns of the [two coun-
tries deleted] aid that has been given in the
past from someone other than you. Did
RCM (McFarlane) ever tell Shultz?
Later that day VADM Poindexter replied:
"To my knowledge Secretary Shultz knows
nothing about the prior financing. I think it
should stay that way."
Concern for Disclosure
By May, 1986 VADM Poindexter became
concerned that LtCol North's operational ac-
tivities were becoming too apparent. He in-
formed LtCol North that he had been notified
by an NSC staffer that LtCol North had offered
a Danish-registered ship under his control to
the CIA-apparently for use in an unrelated
operation. On May 15, 1986, in an internal
NSC message to LtCol North, entitled "Be
Cautious," VADM Poindexter warned:
I am afraid you are letting your operational
role become too public. From now on, I
don't want you to talk to anybody else, in-
cluding Casey, except me about any of your oper-
ational roles. In fact, you need to quietly generate
a cover story that I have insisted that you stop.
(emphasis added).
In response to a May 16 note, LtCol North
sent VADM Poindexter a message on the status
of the Contra project:
You should be aware that the resistance
support organization now has more than
$6M available for immediated [sic] dis-
bursement. This reduces the need to go to
third countries for help. It does not, how-
ever, reduce the urgent need to get CIA
back into the management of this pro-
gram.. . .
In the same message, LtCol North expressed
concern about potential exposure of his activi-
ties and the consequences for the President. He
wrote:
The more money there is (and we will have
a considerable amount in a few more days)
the more visible the program becomes (air-
planes, pilots, weapons, deliveries, etc.)
and the more inquisitive will become
people like Kerry, Barnes, Harkins, et al.
While I care not a whit what they say about
me, it could well become a political embar-
assment for the President and you. Much
of this risk can be avoided simply by cover-
ing it with an authorized CIA program.
On June 10, Mr. McFarlane expressed much
the same concern:
It seems increasingly clear that the Demo-
cratic left is coming after him [LtCol
North] with a vengeance in the election
year and that eventually they will get him-
too many people are talking to reporters
from the donor community and within the
administration.
On June 24, 1986, H.Res. 485 was intro-
duced, directing the President to provide to the
House of Representatives "certain information
concerning activities of Lieutenant Colonel
North or any other member of the staff of the
National Security Council in support of the re-
sistance."
LtCol North was interviewed by the members
of the House Permanent Select Committee on
Intelligence on August 6, 1986. An internal
NSC staff account reported that LtCol North
made the following points:
Contact with FDN and UNO aimed to
foster viable, democratic, political strategy
for Nicaraguan opposition, gave no mili-
tary advice, knew of no specific military op-
erations.
Singlaub-gave no advice, has had no con-
tact in 20 months; Owen-never worked
from OLN office, OLN had casual contact,
never provided Owen guidance.
Shortly thereafter VADM Poindexter forwarded
the above to LtCol North with the message:
"Well Done."
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Summer 1986: Project
Democracy 8
In summer 1986, LtCol North informed
Rodney McDaniel, NSC Executive Secretary, of
his role in a "new contra management struc-
ture." LtCol North told Mr. McDaniel that Vin-
cent Cannestraro, NSC Director of Intelligence
Programs, was "not witting of Project Democ-
racy," a term LtCol North used to describe a
network of secret bank accounts and individuals
deeply involved in Contra resupply activities-
including the building of a secret airstrip for
use by the Contras in northern Costa Rica.
Mr. McFarlane informed the Board that his
only recollection of terms similar to "Project
Democracy" occurred during a May trip to
Tehran:
Upon arrival in Tel Aviv, we were met by
Major General Richard Secord (USAF Ret).
I was told by LTC North that the aircraft
being used on the trip had been chartered
(I believed by the CIA) from a European
concern managed by General Secord. I had
known that General Secord had had a
prior association with the CIA while on
active duty, and this did not surprise me.
LTC North also mentioned in passing that
General Secord was also associated with
the democracy project. . . . At the time,
LtCol North's reference to "the democracy
project" did not register with me and I did
not pursue it with him thereafter.
LtCol North referred to "Project Democra-
cy" or "PD" in a July 24, 1986, internal mes-
sage from VADM Poindexter. In his note,
LtCol North proposed that the CIA buy out
"PD" assets when the Congressional ban on
CIA activities was officially lifted in October.
LtCol North listed "PD" assets totalling $4.5
million dollars. He wrote:
8 We have no information linking the activities described
herein as "Project Democracy" with the National Endowment for
Democracy. The latter was created in 1983 by Congress and is
funded by legislation. Its purpose is to strengthen democratic in-
stitutions around the world through private, non-governmental
efforts. NED grew out of an earlier Administration public initia-
tive to promote democracy around the world, which came to be
known as "Project Democracy." It appears that LtCol North later
adopted the term to refer to his own covert operations network.
We believe this is the only link between the NED and LtCol
North's activities.
We are rapidly approaching the point
where the PROJECT DEMOCRACY assets
in CentAm need to be turned over to
CIA. . . . The total value of the assets (six
aircraft, warehouses, supplies, maintenence
[sic] facilities, ships, boats, leased houses,
vehicles, ordnance, munitions, communica-
tions equipment, and a 6520' runway on
property owned by a PRODEM proprie-
tary) is over $4.5M. . . . All of the assets-
and the personnel-are owned/paid by
overseas companies with no U.S. connec-
tion. . . . It would be ludicrous for this to
simply disappear just because CIA does
not want to be "tainted" with picking up
the assets and then have them spend
$8-$10M to replace it-weeks or months
later. . . PRODEM currently has the only
assets available to support the DRF and
the CIA's most ambitious estimate is 30
days after a bill is signed before their own
assets will be available.
VADM Poindexter replied to LtCol North's
suggestion: "I did tell Gates that I thought the
private effort should be phased out. Please talk
to Casey about this. I agree with you."
In a note to VADM Poindexter several
months later, LtCol North once again proposed
the creation of a private, non-profit organiza-
tion to manage the Contra support effort. Ac-.
cording to LtCol North, this organization
would be involved in tasks the CIA could not-
perform, including raising money, paying for
public relations, organizing UNO activities in
the U.S., and providing medical treatment for
wounded contras. LtCol North tells VADM
Poindexter that these activities were "now all
being done by Project Democracy, " which he said
was supposed to be out of the Central America
business on or about October 1, when U.S.
funds were due to be appropriated.
The construction of a secret airstrip in north-
ern Costa Rica in summer 1985 was apparently
one of the operations undertaken by "Project
Democracy." In a September 30, 1986, memo-
randum to VADM Poindexter, LtCol North de-
scribed Project Democracy's role:
The airfield at Santa Elena has been a vital
element in supporting the resistance. Built
by a Project Democracy proprietary, (Udall
Corporation S.A.-a Panamanian Compa-
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ny), the field was initially used for direct
resupply efforts [to the Contras] (July
1985-February 1986)...the field has served
as the primary abort base for aircraft dam-
aged by Sandinista anti-aircraft fire.9
According to LtCol North, press reports on
the existence of this airfield in September,
1986 "caused Project Democracy to perma-
nently close Udall Corporation, and dispose of
its capital assets." (A CIA field officer based in
Costa Rica told the Board that Udall Corp. was
closely associated with Mr. Secord.)
Two attached diagrams found in LtCol
North's safe link Udall Corporation with Lake
Resources, the account that emerged often in
the context of the Iranian operation. Lake Re-
sources may have been used to transfer funds-
probably private-for Mr. Secord's use in Cen-
tral American operations. In a note on his ap-
pointment card for April 3, 1986, LtCol North
scribbled himself . a reminder: "call Copp
[Secord alias], 650k to LAKE. In a secure
message to LtCol North on April 16, Mr.
Secord reported: "650k received today as re-
ported by the banker."
The CIA field officer told the Board that
construction of the Santa Elena airfield was a
pet project of U.S. Ambassador Louis Tambs.
According to the CIA officer:
When Ambassador Tambs arrived in Costa
Rica [July 1985], he called together the
Deputy Chief of Mission, the Defense Atta-
che and myself, and said that he had really
only one mission in Costa Rica, and that
was to form a Nicaraguan resistance south-
ern front.
[The Santa Elena airstrip] was a matter
which I had been monitoring, kind of as an
aside, but it was essentially the Ambassa-
dor's initiative.
When interviewed by the Board's staff on
this issue, the Ambassador said that prior to re-
porting to Costa Rica, he received instructions
from the members of the Restricted Interagen-
cy Group ("RIG") to aid the Nicaraguan Resist-
ance Forces in setting up a "Southern Front."
The members of the RIG were Mr. Abrams,
9 President Arias learned of the existence of the airport shortly
after he came to office in May 1986. He felt the airstrip compro-
mised Costa Rican neutrality and informed Ambassador Tambs
that it was not to be used.
LtCol North and the Director of the CIA
CATF. Ambassador Tambs recounted the in-
structions he received in July 1985:
Before I went (to Costa Rica) Ollie said
when you get down there you should open
the southern front. In the subsequent
meetings and conversations (of the RIG)
that was confirmed by Abrams and (name
deleted-CIA official). That was sort of
our mission.
When asked what this mission meant to him,
Ambassador Tambs responded that "the idea
was that we would encourage them to fight."
He added that he never had any contacts with
Contra military leaders and that he only spoke
with the "political types."
Ambassador Tambs said that he learned of
the airstrip project from a CIA field officer.
The officer informed him that private benefac-
tors were behind the efforts to build the air-
strip and Mr. Secord coordinated the flights.
Ambassador Tambs recalled that LtCol
North asked him shortly after he arrived in
Costa Rica whether the Costa Rican govern-
ment would "go along" with the airstrip. He
said that the Costa Rican government was in-
terested in the airstrip primarily as a resupply
station in the event of a Nicaraguan invasion of
Costa Rica. As far as he knew, the airstrip was
used mainly for refueling before Contra resup-
ply planes returned to "wherever they were
coming from."
According to a CIA field officer, Mr. Abrams
and LtCol North were also well informed of
this project. On a visit to Costa Rica shortly
after he was confirmed to his new position Mr.
Abrams raised the subject with the CIA officer:
During the course of this conversation . . .
Assistant Secretary Abrams asked me about
Point West [another name for the airstrip]
I became very upset with Assistant
Secretary Abrams for bringing out (sic) the
question . . . I thought it should be closely
held . . . I said what is this with the air-
strip? Where is this known? He said well,
this is known in Washington by-Colonel
North told me about it and I assume that
the [Director of the CIA CATF] knows
about it.
Mr. Abrams testified that the Santa Elena air-
strip was never used: "My understanding was
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nobody ever used the airstrip . . . that it had
never quite gotten into operation."
When asked about LtCol North's activities
and the existence of the Santa Elena airfield
Mr. Abrams had no recollection of when he
first learned of the airstrip or from whom. Mr.
Abrams said that he believed the airstrip had
been built by private "benefactors," but that he
had no information on who these people were.
He added:
We knew that there were outside benefac-
tors. We knew that the Contras were get-
ting lots of, at least ammunition, getting
military equipment-if not arms, then at
least military equipment. And I think it is
fair to say that everybody involved in the
RIG knew that Ollie was somehow con-
nected with this but did not know why . . .
I think most of us were careful not to ask
lots of. questions, other than once in a
while, to say is this all okay, is this stuff
legal-once in a while. I had some reassur-
ance of that when he said it had been run
by the White House Counsel.
In August, 1986, Costa Rican authorities
took measures to stop further use of the air-
strip. U.S. authorities sought to avoid public
disclosure of past activities there. Prior to the
public disclosure of the Santa Elena airstrip,
LtCol North informed VADM Poindexter that
he had been tipped off by "our Project Democ-
racy representative in Costa Rica" that the
Costa Rican Government was planning to call a
press conference to announce "that an illegal
support operation for the Contras had been
taking place from an airfield in Costa Rica for
over a year."
On September 9, LtCol North informed
VADM Poindexter that he had completed a
conference call with U.S. Ambassador to Costa
Rica Louis Tambs, Mr. Abrams and the Direc-
tor of the CIA CATF who all agreed that LtCol
North would call Costa Rican President Arias
to insist the press conference be stopped.
LtCol North said that they agreed he would
take a tough line with President Arias, threaten-
ing to withhold U.S. assistance.
LtCol North wrote that Ambassador Tambs
and Mr. Abrams reinforced his message:
Tambs then called Arias from his leave lo-
cation in W. Va. and confirmed what I had
said and suggested that Arias talk to Elliot
for further confirmation.-Arias then got
the same word from Elliot. . . . At 0300
Arias called back to advise that there
would be no press conference.
Reporting after the fact, LtCol North asked
VADM Poindexter to understand the grounds
for taking steps that LtCol North admitted may
have been extraordinary:
I recognize that I was well beyond my
charter in dealing w/a head of state this
way and in making threats/offers that may
be impossible to deliver, but under the cir-
cumstances-and w/Elliott's concurrence-
it seemed like the only thing we could do.
Later that day, VADM Poindexter replied:
"You did the right thing, but let's try to keep it
quiet."
Mr. Abrams confirmed that LtCol North initi-
ated a conference call on the anticipated disclo-
sure, involving at least Ambassador Tambs, Mr.
Abrams and LtCol North. He said they agreed
that Ambassador Tambs would call President
Arias, but that they did not agree to threaten to
withhold aid money. He said he would not have
approved a similar call by LtCol North, since
Arias was a head of State. Moreover, he doubt-
ed that LtCol North actually called President
Arias, since the then newly-elected Arias had
little occassion to meet or learn of LtCol
North. Ambassador Tambs told the Board that
he also doubted North ever placed such a call.
The Arias government subsequently announced
publicly the discovery and closure of the air-
strip.
Another aspect of LtCol North's activities in
1986 involved control of a Danish-registered
ship which appears to have been used to carry
out a series of weapons deliveries to the Con-
tras through two central American countries. In
April, Mr. Secord informed LtCol North of the
status of efforts to purchase the ship:
Abe [Hakim] still in Copenhagen with our
lawyer finalizing purchase of ship. Deal has
been made after three days of negotiations.
The Danish captain is up and eager for the
mission-he now works for us. We are
asking . . . for firm fixed price contract of
$1.2M for six months. . . . Our rough
guess is that our monthly operating costs
will be 50K.
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In September, 1986, Israeli Defense Minister
Rabin, LtCol North, Amiram Nir, and a Gener-
al Hagai Regev met in Washington and dis-
cussed plans for the Israelis to provide Soviet
Bloc weapons and ammunition to the United
States. LtCol North's communication said the
Israelis made the offer. Defense Minister Rabin
recently told the State Department that LtCol
North made the solicitation and that Israel
would give the weapons to the U.S., but not di-
rectly to the Contras. According to an internal
message from LtCol North to VADM Poin-
dexter, Defense Minister Rabin suggested that
LtCol North send a ship in his control to Israel
to pick up the weapons. LtCol North asked
VADM Poindexter for advice:
Don't quite no [sic] what to do. Did not
want to turn down offer. . . can go ahead
and move the whole shipment to [countries
deleted]-but still won't have any money
to pay off rapidly growing debts. Hate to
turn away offers like this-it will really help
in the long run. Any advice?
VADM Poindexter responded later that day,
"I think you should go ahead and make it
happen. It can be a private deal between Dick
and Rabin that we bless."
On September 15, LtCol North reported
that:
Orders were passed to the ship this morn-
ing to proceed to Haifa to pick up the
arms. Loading will be accomplished during
one night and the ship will be back at sea
before dawn. Loading will be accomplished
by Israeli military personnel.
VADM Poindexter's response an hour later
emphasized the need for absolute secrecy:
Absolutely nobody else should know about
this. Defense Minister Rabin should not
say anything to anybody else except you or
me. In fact I hope Nir doesn't even know
about it.
Defense Minister Rabin reported to the State
Department that the ship left Israel, but was re-
called when it appeared the Iran arms story
would become public.
Who Knew What?
The Director of the CIA CATF recalls that
by 1985, the CIA knew the Contras were re-
ceiving significant arms deliveries, some run-
ning in value in excess of $6 million, and were
spending at a rate in excess of $1 million a
month. CIA officials sought to locate the
source of the funding. The Director of the CIA
CATF told us:
[W]hat we found out was really only one
or two people. It was tremendously com-
partmented inside the resistance organiza-
tion and no one knew the ultimate source
of the money, and very, very few people
even know how much there was coming in
and out.
Mr. Abrams recalls:
[W]e did not engage in nor did we really
know anything about this private network.
We knew that it existed. We knew it in part
because somebody was giving the Contras
guns. . . . they were instructed to kind of
stay away, as the Agency people were, on
the grounds that if you got too close, you
would end up being accused of facilitating
and so forth.
Richard Armitage, Assistant Secretary of De-
fense, recalls, "[S]everal of us in those groups
said, Ollie. . . . you're not involved in all this,
are you? And he said . . . I have broken no
laws."
LtCol North and VADM Poindexter do not
seem to have sought the President's approval.
In his response to a May 16, 1986, message
from Poindexter on the status of the Contra
project, LtCol North went on to discuss White
House knowledge of his activities. LtCol North
speculated that the President must know, indi-
rectly, of his Contra activities.
I have no idea what Don Regan does or
does not know re my private U.S. oper-
ation but the President obviously knows
why he has been meeting with several
select people to thank them for their 'sup-
port for Democracy' in CentAm.
Later that day VADM Poindexter replied to
LtCol North: "Don Regan knows very little of
your operation and that is just as well."
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April 18, 1985
's 33 / c'
i3ob:0 weAi
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Phil and Randy:
Just wanted to drop a note for
"good luck" before the vote.
we are, as always, grateful for
the work you do to communicate
the President's policy in Central
America. We are all working
tirelessly to educate the American
people on why it is so important
to help the Nicaraguan freedom
fighters.
There are many people who believe
in the cause of freedom and
democracy, but far fewer who are
willing to act to support it.
Your dedication and ambition
are much appreciated.
I hope the enclosed can be of
some use to you. Let me know
if we can help in any way.
Thanks--God bless you!
Fawn y~LL
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Appendix D
Aftermath
The Efforts To
Tell the Story
(As noted in Part IV, Section D, our ability to com-
ment on the events following the public disclosure re-
mains limited. The fragmentary nature of the evidence
here is in contrast to the more complete treatment, for
example, in the case of the Iran initiative handled in
Appendix B.)
The NSC Staff Tried To
Build the Story
Within several days of the leak in Beirut,
VADM Poindexter and LtCol North along with
Mr. McFarlane, LtCol Robert Earl and Com-
mander Craig Coy, both of whom worked for
LtCol North, and others began to prepare a
chronology of the initiative. In a 15-day period
from November 5 to November 20, they pro-
duced at least a dozen versions of the chronol-
ogy. The earliest versions were merely lists of
events; the later versions, called "Maximum
Versions" mixed events with rationale. The last
edit, on November 20, also changed the title
from "Maximum Version" to "Historical Chro-
nology." The effort, hamstrung by poor
record-keeping, produced a series of docu-
ments which are often conflicting and occasion-
ally far from what we believe transpired. In
short, the NSC chronologies provide more
questions than answers.
At best, these chronologies suggest a sense
of confusion about both the facts and what to
say about them. At worst, they suggest an at-
tempt to limit the information that got to the
President, the Cabinet, and the American
public. The following represents how the de-
scription of some of the events contained in the
chronologies changed over time.
How the idea began.-The chronologies var-
iously trace the beginning of the operation to
1984, 1985, and the spring of 1985. They state
that an American citizen sometimes referred to
by name, Michael Ledeen, was either ap-
proached by or learned from the Israelis that
an Iranian expatriate sometimes referred to by
name, Mr. Ghorbanifar, could either be useful
or wanted to establish a contact with the U.S.
government for Iran. In the November 17 max-
imum version, we learn that the Israelis "ana-
lyzed this intermediary's background exhaus-
tively in order to validate his legitimacy" and
that the U.S. "established an indirect contact
with the Iranian intermediary, through the pri-
vate U.S. citizen and a senior Israeli official."
The version continued that this contact was es-
tablished through the NSC staff with the "full
knowledge of appropriate Cabinet officers."
This section does not exist in the November 20
historical chronolgy.
August/September, 1985.-The chronologies
are more confused on this section. The Novem-
ber 13 maximum version stated, "in September
of 1985, the Israelis advised that they were
close to achieving a breakthrough on the hos-
tage situation and would proceed unless we ob-
jected. * * * The U.S. judged that the Israelis
would persist in these secret deliveries, despite
our objections, because they believed it to be
in their strategic interest. * * * Shortly after
Reverend Weir's release, the U.S. acquiesced in
an Israeli delivery of military supplies (508
TOWs) to Tehran. U.S. acquiescence in this Is-
raeli operation was based on a decision at the
highest level to exploit the existing Israeli
channels with Tehran in an effort to establish
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an American strategic dialogue with the Iranian
government."
By November 17, the story was as follows:
"On August 22, 1985, the U.S., through the
U.S. citizen intermediary, acquiesced in an Is-
raeli delivery of military supplies (508 TOWs)
to Tehran. We were subsequently informed
that the delivery had taken place at the end of
August, though we were not aware of the ship-
ment at the time it was made." Again, the U.S.
decision was made at "the highest level."
On November 18, the chronology read, "On
August 22, 1985, a senior Israeli official (David
Kimche) visited Washington and met with the
National Security Advisor. The Israeli asked us
to acquiesce in a single Israeli delivery of de-
fensive military materiel to Tehran. * * * Mr.
McFarlane stated that the U.S. could in no way
be construed as an `arms for hostages' deal
[sic] and that there could be no guarantee that
whatever items of U.S. origin Israel sent, could
be replaced. We were subsequently informed
that the Israelis had delivered 508 TOWs at
the end of August."
After a PROF note from Mr. McFarlane to
VADM Poindexter on November 18, this sec-
tion changed drastically. At Mr. McFarlane's
suggestion, the arms and hostages were han-
dled as distinct and unrelated examples of
bona fides for a broader relationship. The
chronology now read that Mr. McFarlane "ele-
vated this proposition to the President within
days at a meeting that included the Secretaries
of State and Defense and the Director of Cen-
tral Intelligence." The President, according to
this account, could not authorize any transfers
of material. Within days, the Israeli offered the
option to have Israel ship "modest quantities of
material" and would the United States resup-
ply. Mr. McFarlane reportedly elevated the
issue again and, once again, the President said
that he could not do so. "We subsequently
learned that in late August the Israelis had
transferred 508 TOW missiles to Iran." (See
the November 18, 1986 PROF note from Mr.
McFarlane to Mr. Poindexter).
The November 20 historical chronology
added that "(t)he Israelis told us that they un-
dertook the action, despite our objections, be-
cause they believed it to be in their strategic in-
terests. * * * After discussing this matter with
the President, it was decided not to expose this
Israeli delivery because we wanted to retain the
option of exploiting the existing Israeli channel
with Tehran in our own effort to establish a
strategic dialogue with the Iranian govern-
ment."
November, 1985 HAWK shipment.-The early
versions of the November shipment offered
little commentary; by November 20 the follow-
ing story emerged: "In mid-November, the Is-
raelis, through a senior officer in the Foreign
Minister's office (Kimche), indicated that the
Government of Israel was convinced that they
were nearing a breakthrough with Iran on a
high-level dialogue. The Israeli contacted a
U.S. official (North) and asked for the name of
a European-based airline which could discreetly
transit to Iran for the purpose of delivering
passengers and cargo. He specifically noted
that neither a U.S. carrier nor an Israeli affili-
ated carrier could be used. We were assured, at
the time, that the Israelis were going to `try oil
drilling parts as an incentive,' since we had ex-
pressed so much displeasure over the earlier
TOW shipment." Apparently Kimche was given
the name of a proprietary and Israel "subse-
quently chartered through normal commercial
contract for a flight from Tel Aviv to Tabriz,
Iran on November 25, 1985."
"In January, we learned that the Israelis, re-
sponding to urgent entreaties from the Irani-
ans, had used the proprietary aircraft to trans-
port 18 HAWK missiles to Iran in an effort to
improve the static air defenses around Tehran.
Our belated awareness that the Israelis had de-
livered HAWK missiles raised serious U.S. con-
cerns that these deliveries were jeopardizing
our objectives of meeting with high-level Irani-
an officials. As a consequence of U.S. initiative
and by mutual agreement of all three parties,
these missiles were returned to Israel in Febru-
ary 1986."
This version also states that, in a conversa-
tion in January, 1986 with Mr. Nir, VADM
Poindexter "noted our stringent objections to
the HAWK missile shipments in November and
noted that the U.S. would have to act to have
them returned."
The January Finding.-The date is variously
listed as the 6th, 9th, and 17th.
February, 1986 shipment. -Outside a brief
mention on an 11/7 chronology, the early ver-
sions contained nothing of the shipment of
1000 TOWs in February. The November 17
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maximum version described a "mechanism for
transfer of the weapons" with the Iranian inter-
mediary depositing funds through an Israeli ac-
count into a "sterile U.S.-controlled account."
Using these funds, "the. CIA would covertly
obtain materiel authorized for transfer from
U.S. military stocks and transport this to Israel
for onward movement to Iran."
Through this mechanism, "funds were de-
posited in the CIA account in Geneva on Feb-
ruary 11, 1986 and on February 14 1,000
TOWs were transported to Israel for pre-posi-
tioning. The TOWs were off-loaded and placed
in a covert Israeli facility.
"On February 19-21, U.S. and Iranian offi-
cials * * * met again in Germany to discuss
problems in arranging a meeting among high-
level officials. At this meeting, the U.S. side
agreed to provide 1,000 TOWs to Iran as a
clear signal of U.S. sincerity. This delivery was
commenced on the morning of February 20
and completed in two transits to Tehran on
February 21."
May through October, 1986.-The presentation
of the facts of the May trip to Tehran. and the
use of a second channel is comparatively accu-
rate, though far from complete.
There is little pattern to the inaccuracies of
these documents, though it is clear that the au-
thors tried to portray the initiative as an order-
ly operation and in the best light.
Mr. McFarlane and the NSC
Chronologies
The Board reviewed the different histories
offered by Mr. McFarlane in three PROF notes
on the 7th, 18th, and 21st of November and in
his several testimonies on the Hill and before
the Board. His various positions on the ques-
tion of Presidential authorization in August and
September, 1985 have made this question very
difficult to resolve. This issue was discussed ex-
tensively in Mr. McFarlane's final interview with
the Board. What follows are excerpts from that
discussion and portions of the relevant PROF
notes from Mr. McFarlane.
Below are excerpts from Mr. McFarlane's tes-
timony before the Board February 21, 1987:
Mr. McFarlane: Well, Mr. Chairman, I ap-
preciate the opportunity to add further.
I will first deal with the November '86 nar-
rative, if you will. On the day that the story
was leaked or published in the Beirut mag-
azine Admiral Poindexter called and stated
that because of the continuing hope of
being able to release or secure the release
of other hostages that the White House
was going to take a position of essentially
not commenting on the story, that he
hoped that I would honor that, too, and I
assured him that I would.
He stated as well that he was going to
begin, at the President's direction, putting
together a narrative of events of how the
entire policy initiative had been conducted,
conceived, approved and so forth. And he
stated then in the call that he recalled the
meeting in July or August of 1985 in which
the President had discussed with his Cabi-
net officers the pros and cons, the Presi-
dent then reaching a decision later on.
But he said I cannot document that and
can you help out. And I said that I would,
and I added in the same call that, John,
you have very little time on this and I rec-
ommend that the President not have a long
period of forelorned hopes that I think are
unlikely to be fulfilled about further hos-
tages, just based upon past performance.
(pp. 2-3)
It seemed to me, first of all, just thinking
about why would I write the memo, well, I
was inspired to write the memo because I
was being told that a version was coming
from the White House to the effect that I
had taken this on basically and it wasn't
until after the fact that the President had
approved this.
General Scowcroft: How did you know
that? You didn't have a draft at that point?
Mr. McFarlane: No. I had nothing from the
White House on this, but I was receiving
word from people indirectly, journalists,
that were saying this is what we are being
briefed by the White House and I just want
you to learn about it.
Well, I had to say that I could fully accept
that as a policy advisor to the President
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and out of loyalty to him I wanted to take
full responsibility for all of my own actions,
to assure that the President was placed in
the best position possible. But one must
not avoid the truth. Consequently, I was
upset to hear that possibly-this was
through hearsay - that possibly the White
House might be taking a position which
was fundamentally untrue.
Chairman Tower: When you say "the
White House", Bud, can you be more spe-
cific?
General Scowcroft: Who is in charge of
putting all this stuff together?
Mr. McFarlane: Well, the briefings that
were being given to magazines referred to
here were originally by Mr. Regan, and five
days or four days prior, when Admiral
Poindexter had called me, he said that he
had been tasked, through Mr. Regan, to
prepare an account, but already an account
was being put out, or so I was told. (pp.
4-5)
At any rate, my point is in saying that
there would have been no reason to write
a memo on my part, the point of writing a
memo at all is to alter what I was hearing
was the White House version, and that was
that the President had not approved the
Iranian arms sale or provided authority for
it by us or anyone else until after it took
place. And that's false.
So I sat down and I wrote down the
memo. But again having returned from out
of town and still not looking at records or
calendars, because I was relying upon
recollections, I put together a series of
events from primarily July spread out until
a decision by the President in early Sep-
tember, which in truth occurred in a short-
er span of time, a span of time from about
early July until the first ten days of August.
Now as one reads the memo, if you refer
to it, that series of decisions, first of all to
say yes to a political dialogue, secondly,
when confronted by an insistence on sell-
ing TOWS by us to say no, and then, third-
ly, when the Israelis decide that they will
take it on their own to sell arms if we
agree, and that they can buy replacements
from us instead of spreading out in time
from the early July until early September,
those events take place in about a month's
period of time. (pp. 5-6).
Below is the portion of the memo to which
Mr. McFarlane just referred; he sent it as a
PROF note to VADM Poindexter dated Novem-
ber 7, 1986, time log 20:30:32:
It might be useful to review just what the
truth is.
You will recall that when the Israelis first
approached us in June '85, I presented the
idea of engaging in a dialogue with the Ira-
nians-no mention at all of any arms ex-
change at all-and he approved it.
We then heard nothing until August when
the Israelis introduced the requirement for
TOWs. I told Kimche no.
They went ahead on their own -but then
asked that we replace the TOWs and after
checking with the President, we agreed.
Weir was released as a consequence of
their action.
My next involvement was to go to London
where I presented our willingness to open
a political dialogue but that we could not
participate in an arms transfer for hos-
tages. Gorbanifar ranted and raved but we
did not change our position.
I returned to the States and debriefed the
President (with Cap present, and Regan)
that we had. taken the position of being
open to a political dialogue once our hos-
tages were released but not before and
ruled out an arms transfer. I also said that
Gorbanifar was not to be trusted and rec-
ommended that we no longer carry on
business with him. You were present John.
I then left the government.
Some dialogue must have continued with
Gorbanifar between New Year's and April,
notwithstanding my recommendation. In
April you contacted me to go to Iran to
open the political dialogue. I did so. Once
there, faced with bad faith on their part
(not having released our people and with-
out meetings with the decision makers) I
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aborted the mission. Ollie can verify all
this.
Upon my return, I debriefed the trip and
once more recommended against carrying
on the arms connection but waiting them
out on the political dialogue.
Returning to Mr. McFarlane's testimony:
On November 7 I could not have docu-
mented it for you, and it wasn't until about
three weeks later-actually until I got my
record of schedule out of storage. Another
point I would make, however, about this
cross-note that I'm talking about is that
there's no question here in that cross-note
about prior approval prior to Mr. Weir's
release.
I said it then. I've said it since, and it is
true today: The decision process had three
milestones on it-early July, political with-
out any arms of any kind; mid July, the Is-
raelis saying political dialogue, but if the
United States will sell arms and we re-
sponded no; and then early August, in
which the Israelis said, well, if we do, and
my meeting with Mr. Kimche resulted in
our discussion on the pros and cons and so
forth, and my going to the President and
once more his discussion of it with his ad-
visors, and the decision, yes, that we will
replace the sale replacements for any Israe-
li arms that they may ship. (pp. 6-7)
I have felt since last November-and that
is where we started-that it has been, I
think, misleading, at least, and wrong, at
worst, for me to overly gild the President's
motives for his decision in this, to portray
them as mostly directed toward political
outcomes.
The President acknowledged those and
recognized that those were clearly impor-
tant. However, by the tenor of his ques-
tioning, which was oriented toward the
hostages and timing of the hostages, from
his recurrent virtually daily questioning
just about welfare and do we have anything
new and so forth, it is very clear that his
concerns here were for the return of the
hostages. (p. 11)
Mr. McFarlane: I think it is accurate and
useful to point out that the motives behind
Admiral Poindexter's actions right after the
release of the story on November 3 were
inspired by concern for hoped-for still get-
ting out more hostages and that was, I
think, rather too ambitiously pursued even
by the President, who went to the point of
denying that anything at all had occurred.
And I take it that attitude persisted even
into the third week of November, although
becoming ever more frail.
It seems to me that by the time the Presi-
dent had made his speech on this, which
had not had the intended effect of explain-
ing satisfactorily what had happened that
his wish to say something more and at the
same time minimize his own role grew to
the point that on November 18, by the
time that group convened, a principal ob-
jective, probably the primary objective, was
to describe a sequence of events that
would distance the President from the ini-
tial approval of the Iran arms sale, distance
him from it to blur his association with it.
The November 18 chronology, which I
indeed helped prepare, was not a full and
completely accurate account of those
events, but rather this effort to blur and
leave ambiguous the President's role. The
language was intended, I would say, to
convey the impression that the United
States had not expressly authorized the
sale of arms either directly from the United
States or by the Israelis on behalf of the
United States, but, second, to preserve the
ability to say that if Israel were to make
such sales that they could expect to pur-
chase replacement items from the United
States. (pp. 42-43)
Mr. McFarlane prepared a portion of the
chronology on November 18. He sent his edit
to VADM Poindexter at 23:06:20 on the 18th.
Below is a complete text of that PROF note:
I have just finished reading the chronolo-
gy. Much of it is coming to me for the first
time-primarily the material on what went
on between Jan-May '86-and I am not
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really able to comment on how to deal
with that.
It seems to me that I ought to limit my
input to what I recall from my involvement
before Jan '86 and then from the May
meeting. In that context, I would recom-
mend deleting all material starting on the
11/17 (2000) version at page three, penul-
timate para (i.e. In 1985, a private * * *)
down through the third para on the follow-
ing page (ending with * * * strategic dia-
logue with the Iranian government.) and
replace with the following.
"In July of 1985, during a visit to Wash-
ington, an Israeli diplomatic advised Na-
tional Security Advisor, Robert McFarlane,
that Israel had established a channel of
communications with authoritative ele-
ments in Iran who were interested in de-
termining whether the United States was
open to a discreet, high level dialogue with
them. The Iranians were described as com-
prising the principal figures of the govern-
ment (i.e. Speaker of the Majlis Rafsanjani
and Prime Minister Musavi) and as being
devoted to a reorientation of Iranian
policy.
At this first meeting, McFarlane went to
great length to draw out the Israeli diplo-
mat as to why he found the Iranian pro-
posal credible, given the events of the past
6 years. He replied that their exhaustive
analysis had gone beyond the surface logic
deriving from the chaos and decline within
Iran and the degenerative effects of the
war, to more concrete tests of the willing-
ness of the Iranians to take personal risks
(i.e. by exposure of themselves in meetings
with Israelis to compromise as well as by
the transfer of extremely sensitive intelli-
gence on the situation (and political
lineup) within Iran; information which was
proven valid).
The Israeli asked for our position on
agreeing to open such a dialogue. No men-
tion was made of any pre-conditions or Ira-
nian priorities. McFarlane conveyed this
proposal to the President (in the presence
of the Chief of Stafl). The President said
that he believed such a dialogue would be
worthwhile at least to the point of deter-
mining the validity of the interlocutors.
This was conveyed back to the Israeli dip-
lomat.
Within days the Israeli called again on
McFarlane. This meeting, he stated that he
had conveyed our position and that the
Iranians had responded that recognizing
the need for both sides to have tangible
evidence of the bona fides of the other,
that from their side they wanted us to
know that they believed they could affect
the release of the Americans held hostage
in Lebanon.
As a separate matter the Iranians stated
that they were vulnerable as a group and
before having any prospect of being able
to affect change within Iran they would
need to be substantially strengthened. To
do so, they would need to secure the coop-
eration of military and/or Revolutionary
Guard leaders. Toward this end, they ex-
pressed the view that the most credible
demonstration of their influence and abili-
ties would be to secure limited amounts of
US equipment. The Israeli asked for our
position toward such actions.
Mr. McFarlane elevated this proposition to
the President at a meeting within days that
included the Secretaries of State and De-
fense and the Director of Central Intelli-
gence. The President stated that while he
could understand that, assuming the legiti-
macy of the interlocutors, they would be
quite vulnerable and ultimately might de-
serve our support to include tangible mate-
rial, that at the time, without any first hand
experience in dealing with them, he could
not authorize any transfers of military ma-
terial. This was conveyed to the Israeli.
Within days (mid August) the Israeli diplo-
mat called once more to report that the
message had been conveyed and that an
impasse of confidence existed. He asked
what the position of the US Government
would be to an Israeli transfer of modest
quantities of material. McFarlane replied
that to him, that would represent a distinc-
tion without a difference. The Israeli diplo-
mat explained at great length that Israel
had its own policy interests that would be
served by fostering such a dialogue in
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behalf of the US but that a problem would
arise when ultimately they needed to re-
place items shipped. He asked whether at
that time Israel would be able to purchase
replacement parts. McFarlane stated that
again, the issue was not the ability of Israel
to purchase military equipment from the
US-they had done so for a generation
and would do so in the future-but rather
the issue was whether it was US policy to
ship or allow others to ship military equip-
ment to Iran. The Israeli asked for a posi-
tion from our government. McFarlane ele-
vated the question to the President (and to
the Secretaries of State and Defense and
the DCI). Again the President stated that
while he could imagine the day coming
when we might choose to support such ele-
ments with material, he could not approve
any transfer of military material at that
time. This position was conveyed to the Is-
raeli diplomat.
On September 14, 1985, Reverend Benja-
min Weir * * * (continue as written on
page 4)
(At end of para, insert the following) We
subsequently learned that in late August
the Israelis had transferred 508 TOW mis-
siles to Iran. Later in the fall, other trans-
fers of equipment were made between
Israel and Iran although some of the items
were returned to Israel. McFarlane con-
veyed these reports to the President who
directed that we insist on a direct meeting
with the Iranian interlocutors while ex-
pressing our position against further arms
transfers. A meeting was arranged to take
place in London in early December. The
President instructed McFarlane to repre-
sent the US at the meeting and to make
two basic points: 1. That the US was open
to a political dialogue with Iran; but that
no such dialogue could make progress for
as long as groups seen as dominated by
Iran held US hostages, and 2. That we
could under no circumstances transfer
arms to Iran in exchange for hostages.
These points were made to the Iranian
interlocutor. He replied that unless his
circle of associates were strengthened they
could not risk going ahead with the ex-
changes. Mr. McFarlane acknowledged the
position but stated we could not change
our position and returned to Washington.
He debriefed the President and appropri-
ate Cabinet officers, recommending that
no further action be pursued. He then left
the government.
(Note: Enter at the appropriate place the
following account of RCM's involvement in
the May meeting.)
In April, Mr. McFarlane was contacted and
advised that further staff-level contacts had
been pursued since he had left government
that had led to an arrangement for the re-
lease of the remaining hostages. He was
asked whether he would be prepared to
meet with Iranian officials to open the po-
litical dialogue. He agreed to do so and
traveled to Iran in late May to do so.
(Then pick up with existing text.)
Returning to Mr. McFarlane's testimony:
And I think that is an accurate reflection of
how that is cast. Now it was done as a
briefing memo to be used by people who
would brief the President prior to the next-
day's press conference, and in my judg.. i
ment expected to go through a number of
iterations before it reached that point. But
that is my opinion of the climate in which
that session occurred and the intent of its
outcome. (p. 43)
I think it was * * * the 18th * * * I be-
lieve it was actually North saying the Admi-
ral had directed that he call me and ask my
help in coming over that evening to scrub
and finish a chronology that would be used
in helping out in the prebrief of the Presi-
dent for the press conference. And he said
we were under the gun to get it done, but
we have it. And that was about 5:00, as I
recall, or late in the day.
And so I cancelled a dinner I was sup-
posed to go to and went over, but I didn't
get there actually until about 8:00 and it
was in Colonel North's office. It was kind
of a feverish climate in which four or five
officers-Colonel North, Mr. Teicher, Mr.
Coy, Colonel Earle, a couple of secretar-
ies--
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Mr. Garment: Al Keel?
Mr. McFarlane: Periodically, but not origi-
nally. Cut and paste-some original, some
typed, some handwritten documents, ones
that had been prepared, I believe, in Mr.
Buchanan's office to be used the next day.
And separately a draft chronology, the so-
called master of which had been done by
the CIA, or so I was told by Colonel
North.
Senator Muskie: Incidentally, do we have
that?
Mr. Dawson: Yes, sir.
Mr. McFarlane: I started by looking at the
opening statement and believed that it did
not fully treat the political purpose at issue
here of the longer-term relationship with
Iran and other points that were less impor-
tant. But I sat down and drafted a three-
section note that went out in three sepa-
rate messages by PROFs to Admiral Poin-
dexter. He reacted to the first two by tele-
phone after he got them, probably by
10:00 by this time,. at night. Other people
had been working on the chronology for
the same two hours, while I'd been work-
ing on the opening statement. And at that
point I finished and 10:30 or so turned my
attention to the chronology and was given
the master, which was a CIA product, and
I think fairly it was understandably wrong
because the officer tasked to prepare it had
not been involved in many of the events.
But you could see several errors in it, and
I pointed out perhaps a half dozen and got
through it to about the middle of it, to
where it treated the President's involve-
ment in the original decision. The treat-
ment that was there was ambiguous in a
number of respects, but it said, for exam-
ple, that he had aquiesced in the sale, as I
recall, and it left out issues of timing.
And I sat down and, after looking through
a separate stack of several pieces of paper,
was given one that had two paragraphs on
it on this issue. The first part of it treated
the basic matter of the approval itself, and
the second paragraph dealt with his reac-
tion once he had learned about it in an ex
post context.
And in looking at the first part of it it was
not technically wrong. As I recall, it had
words to the effect that the President did
not approve, did not formally approve the
September 2 shipment and then it went on
in the second paragraph to say-upon learn-
ing about it after Mr. Weir's release was
upset and directed someone to have me -
it didn't say - directed that Mr. McFarlane
so advise the government of Israel.
Well, in looking at those, those were ex-
pressive to me, first of all, of a climate in
which there was an obvious effort to, as I
said, distance and to blur the President's
role in the initial authorization, in both
timing and substance.
General Scowcroft: Did you raise that point
with anybody here? I mean, this is the first
time you've seen this maneuvering.
Mr. McFarlane: Well, I did, and it was a
little-it was very curious because in truth
none of those officers there were involved
at that point in time, and so they weren't
in a position to say. They could have writ-
ten this. No one owned up to it. Mr.
Teicher said and has said since that he did
not. Colonel North asked me. I said, well
where does this come from? They said
well, I don't know, but it's something I
can't personally throw any light on.
And innocent shrugs from Mr. Coy and
Colonel Earle. There was no one in the
room that had written it.
Mr. Dawson: But these two conversations
that you had with Admiral Poindexter, did
they concern the President's involvement
and his authorization?
Mr. McFarlane: His original call to me on
November 3 had, and he recalled it the
way that I have, and I have testified to
that-that the President met in his pajamas
in the residence and then subsequently ap-
proved it.
I recall having talked to him that night,
Admiral Poindexter, that evening when I
sent him the first two sections on the
opening statement, and then later on when
he came back on the third one and said
yes, it is good too. Now I do remember
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very clearly talking to him after I had fin-
ished all work that evening, and it is only
unclear in my mind whether it was that
night or the following day.
But I wrapped up what I had done for him
and I said: John, there are at least a half
dozen or more serious problems with this
chronology. I have noted them. Colonel
North believes that he can straighten out
the ones that I have pointed out to him.
And the portrayal of the President's role in
this is directed toward, apparently, putting
some distance and ambiguity around the
timing and the substance of his approval-
that is, was it before or after.
Now it isn't technically wrong the way
somebody has written it down here, but we
know that the President approved this
before the Israelis did it. And I tend to
think that that was exchanged with him in
a stand-up conversation the next day-that
is, the day of the press conference,
Wednesday. And he acknowledged what I
had said, and he said, yes, we are working
on it still. Or we will continue to work on
it after you have finished and thanks for
your help.
I say that because just the memory of
saying that I had pointed out the several
mistakes is pretty vivid in my mind as a
stand-up exchange between myself and
him and Mr. Keel present as a witness, and
his acknowledging, okay, we will get this
straightened out.
But I said, and I had participated the night
before in preparing it, I said: You know, it
is technically not inaccurate to say that the
President didn't formally approve the Sep-
tember 2 shipment discretely. But, of
course, he approved it as an authority for
it to be done. And, secondly, the part that
I accepted and sent you in my note about
his being upset about it, I can imagine
maybe he was and so I can't disprove it,
but he didn't say that to me. (pp. 46-51).
Mr. Garment: By the way, you said that
John Poindexter was not there that night.
Was he there at any point? Was he there
when you came to the meeting? Do you
know why he went home? Do you know
why he didn't attend the meeting? Can you
shed any light on that?
Mr. McFarlane: He wasn't there and I
don't know why. He had gone home, but
he had gone perhaps to an outside obliga-
tion beforehand.
Mr. Garment: Well, he was at home?
Mr. McFarlane: He reached home, I would
guess, no later than 10:00 or so, but I
don't know why.
Mr. Garment: Did you speak to him before
the meeting at any point after North asked
you to come to that meeting-that is, from
the time North called you until you ap-
peared at the OEOB, speaking to Admiral
Poindexter?
Mr. McFarlane: I remember speaking to
him that night at least once, and perhaps
twice, again after that session before the
press conference, to make it emphatic that
it was not an accurate chronology.
Mr. Garment: Rhett, do you intend to get
into the business of the meeting with the
Attorney General and that sequence of
events? If not, I think it would be helpful
for him to continue with that in the same
vein.
Mr. Dawson: I think that's a good idea.
Mr. Garment: Discussing matters which he
has now had an opportunity to refresh his
recollection with documents on.
Mr. McFarlane: Well, the meeting was
called at the Attorney General's initiative,
and he called me. I was at home.
General Scowcroft: When was this?
Mr. McFarlane: This was the 21st, which
would have been Friday. He called and I
was at home working on a speech that I
had to give and he asked me-well, he
said, first of all, Bud, I have been tasked by
the President to put together an accurate
record of events in this matter and I would
like to talk to you. When can you come in?
I volunteered as soon as possible-driving
time.
And within about an hour-it would have
been 2:00 or 3:00-I was in his office, his
inner office, and it was the Attorney Gen-
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eral and an associate, Mr.-I assume,
Charles Cooper. We were seated about like
this, between the Attorney General and
myself, and Mr. Cooper was sitting next to
us taking notes.
And in the course of about an hour I went
through my recollection really, because I
hadn't referred to records still, what I re-
membered about the decision process and
my account was essentially as I had acced-
ed to it in the Tuesday night session. And
Mr. Meese then had a number of questions
about the President's involvement, other
people's involvement, positions of various
Cabinet officers.
And this was a back and forth that went for
perhaps another half hour and he said
okay, that's fine.
And we rose to break up. His secretary
came in and gave me a message that had
come in some time before and said your
wife called with some urgency and you
need to call her right away.
Mr. Cooper left the room and Ed began to
leave the room. And I said: Ed, wait a
minute. I want to talk to you about this.
Now, I wanted to talk to him because it
was very apparent. I'm talking to the chief
law enforcement officer of the country. It
is essential that there not be any ambiguity
in what he is telling the President about
the truth of the actions here. And so I told
him, you know, as you may have seen in
this morning's papers I gave a speech last
night and I have taken on responsibility for
every bit of this that I can, Ed, and I shall
continue to do that.
And he interrupted and said yes, that's
been noted. But I want you to know that
from the very beginning of this, Ed, the
President was four-square behind it, that
he never had any reservations about ap-
proving anything that the Israelis wanted
to do here. Ed said, Bud, I know that, and
I can understand why. And, as a practical
matter, I'm glad you told me this because
his legal position is far better the. earlier
that he made the decision.
And I said well, I don't have any knowl-
edge of that, but there was no question
about it, Ed. He said, okay. I may have to
get back to you. Thanks a lot. And that
was that.
And then, on Sunday night-no, Monday
afternoon he called and asked me to come
by again, and. I went down to his office
again, and by that time he had learned, I
suppose from his associates turning up the
evidence of the diversion of funds to the
Contra business, about it and he asked me
to come down and began to ask questions
about that. I told him when I learned
about it and my lack of knowledge on the
antecedents to it and so forth.
And he said fine. And I said, Ed, you
know, I think this has gone well beyond
timewise what it should have and the Presi-
dent ought to get out the facts right away,
and I think also that there are a number of
other policy initiatives that ought to be
taken if he's going to be able to show lead-
ership in foreign policy at all. And if you
think that it's of value I'd be glad to jot
some of these down and send. them to you.
And he said, yes, I'd appreciate. that very
much. So I went home-this is Monday
afternoon-and in the space of about an
hour put down about three or four pages
of ideas. (pp. 53-57)
After his conversation with Mr. Meese, Mr.
McFarlane sent another PROF note to VADM
Poindexter at 21:01 on the 21st of November.
A portion of this note follows.
* * * I spent a couple of hours with Ed
Meese today going over the record with
him. The only blind spot on my part con-
cerned a shipment in November '85 which
still doesn't ring a bell with me.
But it appears that the matter of not noti-
fying the Israeli transfers can be covered if
the President made a "mental finding"
before the transfers took place. Well on
that score we ought to be ok because he
was all for letting the Israelis do anything
they wanted at the very first briefing in the
hospital. Ed seemed relieved at that.
Returning to Mr. McFarlane's testimony:
[Regarding the President's Approval in August
1985:]
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Chairman Tower: Now, did you communi-
cate the President's approval and inform
anybody on your staff about it? Did you
tell Poindexter? Who did you tell? Who
did you contact to tell them the President
had approved this on our side?
Mr. McFarlane: Admiral Poindexter is the
short answer. In my recurring memory of
how it took place-and I've asked my wife
to try to recall this image-is that it oc-
curred at home, and he called me from
Camp David and that I then called Mr.
Kimche and not until the next day, howev-
er, did I tell Admiral Poindexter.
There ought, to be a record, although not
on my record because I was at home, prob-
ably in the Camp David operators that a
call took place.
General Scowcroft: Did you tell Mike
Ledeen about the approval? Did you tell
him to convey it?
Mr. McFarlane: I don't have any mental
image of a meeting, but I expect that I did
convey it to him, not for him to further
carry it out but to inform him that that was
the decision. [I've called that.] He came
out to make a speech in Los Angeles at a
moment when the Presidential party was
there . . . And, if not before, surely then I
would have told him about it.
Chairman Tower: Understanding that this
was on a pretty closely held basis, was
there anybody beside Poindexter that you
would have told that the President commu-
nicated to you his approval?
Mr. McFarlane: Not on the NSC staff, no,
sir.
Chariman Tower: And you did not inform
the other NSC principals?
Mr. McFarlane: Within a day or so I did.
Chairman Tower: Which ones?
Mr. McFarlane: It would have been the
Secretary of State, Defense, Mr. Regan and
the Vice President.
Chairman Tower: That the President had
given you the go-ahead on this?
Mr. McFarlane: That is correct.
Mr. McFadden: How about Mr. Casey?
Mr. McFarlane: And Mr. Casey, yes.
Chairman Tower: Bud, were you aware if
there was ever a contingency plan to deal
with this issue, a planned public diplomacy
campaign of any kind to deal with it once it
became public knowledge, whether by offi-
cial release or by just simply being ex-
posed?
Mr. McFarlane: I know of no such plan.
(pp. 59-61).
The White House Position
Changed
In the first days after the disclosure, the
President stood firmly with VADM Poindexter
in support of protecting the channel and the
operation. Mr. McDaniel noted that during
VADM Poindexter's morning briefings the
issue was discussed on November 6 and 7; in
both discussions, the President apparently
agreed to make no comment in hope that addi-
tional hostages would be freed and out of fear
for the safety of the second channel.
The President met with the Vice President,
Secretaries Shultz and Weinberger, Mr. Regan,
Director Casey, Attorney General Meese,
VADM Poindexter, and Dr. Alton Keel (Acting
Deputy at NSC) on November 10 to discuss the
initiative and possible government reactions.
Notes of the meeting by Dr. Keel provide some
insight into this meeting. The President felt a
need for a statement of U.S. intentions in the
initiative. VADM Poindexter offered a brief his-
tory of the initiative. Following questions by
Secretaries Shultz and Weinberger, the Presi-
dent stated that rumors had endangered what
they were doing. Dr. Keel's notes suggest that
the President felt that we had not dealt with
terrorists or paid ransom and that one of the
purposes of government was to protect its citi-
zens. The President felt that a basic statement
had to come out but that we needed to avoid
details and specifics of the operation; he urged
that we could not engage in speculation be-
cause the lives of the hostages and the Iranians
were at stake.
On November 13, Mr. McDaniel noted that
the President decided to address the nation
that evening. There appear-to have been sever-
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al drafts of the President's speech and a hectic
struggle to produce the final product. That
night, the President addressed the nation.
The President's Address to
the Nation
The President told the American people that
they were "going to hear the facts from a
White House source and you know my name."
The President stated that a diplomatic initia-
tive had been underway for 18 months, for the
following reasons:
-to renew relationship with Iran;
-to bring an honorable end to Iran-Iraq
war;
-to eliminate state-sponsored terrorism;
-to attain the safe return of the hostages.
The President said, "The United States has
not swapped boatloads or planeloads of Ameri-
can weapons for the return of the American
hostages."
"I authorized the transfer of small amounts
of defensive weapons and spare parts for de-
fensive systems to Iran. . . . These modest de-
liveries, taken together, could easily fit into a
single cargo plane. They could not, taken to-
gether, affect the outcome of the . . . war . . .
nor . . . the military balance."
The President noted that various countries
had tried to broker a relationship between Iran
and the United States since 1983. "With this
history in mind, we were receptive last year
when we were alerted to the possibility of es-
tablishing a direct dialogue with Iranian offi-
cials."
"It's because of Iran's strategic importance
and its influence in the Islamic world that we
chose to probe for a better relationship be-
tween our countries."
"Our discussions continued into the spring
of this year. Based upon the progress we felt
we had made, we sought to raise the diplomatic
level of contacts. A meeting was arranged in
Tehran. I then asked my former National Secu-
rity Adviser, Robert McFarlane, to undertake a
secret mission and gave him explicit instruc-
tions."
"There is ample precedent in our histroy for
this kind of secret diplomacy. In 1971, then-
President Nixon sent his national security ad-
viser on a secret mission to China."
"Although the efforts we undertook were
highly sensitive and involvement of government
officials was limited to those with a strict need
to know, all appropriate Cabinet Officers were
fully consulted. The actions I authorized were
and continue to be in full complance with fed-
eral law. And the relevant committees of Con-
gress are being and will be fully informed."
"We did not-repeat-did not trade weapons
or anything else for hostages-nor will we."
VADM Poindexter Briefed
Reporters
VADM Poindexter briefed reporters on back-
ground the same day. The following inter-
change between VADM Poindexter and report-
ers officially exposed a connection between
Israel and the United States in the 1985 ship-
ments.
Q. "-a few things on the shipments, just to
clarify this. Any shipments that were made
prior to January of 1986 you're saying the U.S.
had no role in, either condoning, winking, en-
couraging, or anything of that nature? Is that
correct?
VADM Poindexter: "That's correct."
Q. "Could you say then what prompted the
release of Benjamin Weir then in September of
'85? What event do you think was related to his
release?
VADM Poindexter: "Well, I think that it was
a matter of our talking to the contacts through
our channel, making the case as to what our
long-range objectives were, demonstrating our
good faith--
Q. "How was that done?"
VADM Poindexter: "Well, that was on of the
motivations behind the small amount of stuff
that we transferred to them."
Q. "But that was done later?"
VADM Poindexter: "The problem is-and
don't draw any inferences from this-but there
are other countries involved, but I don't want
to confirm what countries those are and-be-
cause I think that it is still important that that
be protected. And going back to the question
you asked me earlier, there was one shipment
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that was made not by us, but by a third country
prior to the signing of that document."
Q. "This shipment to Israel?"
VADM Poindexter: "I'm not confirming that,
George."
Q. "Was that on our behalf?"
VADM Poindexter: "It was done in our inter-
ests."
Q. "Was that before Weir was released?"
VADM Poindexter: "I honestly don't know.
And if I knew, I don't think I would tell you
precisely."
Q. "You just said previously that you did not
condone any shipments?"
VADM Poindexter: "I went back and correct-
ed-there was one exception and that was the
one I just described."
The President's News
Conference
The speech did not stem the pressure
mounting in Congress and the U.S. media. By
November 19, the President decided to conduct
a news conference; excerpts from the confer-
ence follow:
"Several top advisers opposed the sale of
even modest shipment of defensive weapons
and spare parts to Iran. Others felt no progress
could be made without this sale. I weighed
their views. I considered the risks of failure and
the rewards of success, and I decided to pro-
ceed, and the responsibility for the decision
and the operation is mine and mine alone."
"I was convinced then and I am convinced
now that while the risks were great, so, too,
was the potential reward. Bringing Iran back
into the community of responsible nations,
ending its participation in political terror,
bringing an end to that terrible war, and bring-
ing our hostages home-these are causes that
justify taking risks."
On the Danish ships and the Danish sailor's
union officials' stories the President comment-
ed, "we certainly never had any contact with
anything of the kind."
On conflicts with established policy, the
President responded, "I don't think it was du-
plicity, and as I say, the so-called `violation' did
not in any way alter the balance, military bal-
ance, between the two countries."
Q. "Mr. President, you say that the equip-
ment which was shipped didn't alter the mili-
tary balance. Yet, several things-we under-
stand that there were 1,000 TOW anti-tank
missiles shipped by the U.S. The U.S. appar-
ently condoned shipments by Israel and other
nations of other quantities of arms as an ancil-
lary part of this deal-not directly connected,
but had to condone it, or the shipments could
not have gone forward, sir. So, how can you
say that it cannot alter the military balance, and
how can you say, sir, that it didn't break the
law, when the National Security Act of 1977
plainly talks about timely notification of Con-
gress and also, sir, stipulates that if the national
security required secrecy, the President is still
required to advise the leadership and the chair-
man of the intelligence committees?
The President: "Bill, everything you've said
here is based on a supposition that is false. We
did not condone, and do not condone the ship-
ment of arms from other countries."
Q. "Is it possible that the Iraqis, sir, might
think that 1,000 anti-tank missiles was enough
to alter the balance of that war?"
The President: "This is a purely defensive
weapon-it is a shoulder-carried weapon and
we don't think that in this defensive thing-we
didn't add to any offensive power on the part
of Iran. . . . And, as I say, all of those weapons
could be very easily carried in one mission."
"We, as I say, have had nothing to do with
other countries or their shipment of arms or
doing what they're doing."
Q. ". . . Are you telling us tonight that the
only shipments with which we were involved
were the one or two that followed your January
17th finding and that, whatever your aides have
said on background or on the record, there are
not other shipments with which the U.S. con-
doned?"
The President: "That's right. I'm saying
nothing but the missiles that we sold-and re-
member, there are too many people that are
saying `gave.' They bought them."
Q. "Mr. President, to follow up on that,
we've been told by the Chief of Staff Donald
Regan that we condoned, this government con-
doned an Israeli shipment in September of
1985, shortly before the release of hostage
Benjamin Weir. . . ."
The President: "No, that-I've never heard
Mr. Regan say that and I'll ask him about that,
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because we believe in the embargo and, as I
say, we waived it for a specific purpose . . ."
". To the best of our knowledge, Iran
does not own or have authority over the Hez-
bollah. They cannot order them to do some-
thing. It is apparent that they evidently have
either some persuasion and they don't always
succeed, but they can sometimes persuade or
pressure the Hezbollah into doing what they
did in this instance. And, as I say, the Iranian
government had no hostages and they bought a
shipment from us and we, in turn-I might as
well tell you-that we, in turn, had said when
they wanted to kind of know our position and
whether we were trustworthy and all of this, we
told them that we were-we did not want to do
business with any nation that openly backed
terrorism. And they gave us information that
they did not and they said also that they had
some evidence that there had been a lessening
of this on the part of-Khomeini and the gov-
ernment and that they'd made some progress.
As a matter of fact, some individuals associated
with terrorist acts had been put in prison there.
And so that was when we said well, there's a
very easy way for you to verify that if that's the
way you feel, and they're being held hostage in
Lebanon."
On being corrected about a TOW missile,
the President responded, ". . . if I have been
misinformed, then I will yield on that, but it
was my understanding that that is a man-car-
ried weapon, and we have a number of other
shoulder-borne weapons."
The President concluded, "I don't think a
mistake was made. It was a high-risk gamble,
and it was a gamble that, as I've said, I believe
the circumstances warranted. And I don't see
that it has been a fiasco or a great failure of
any kind. We still have those contacts, we still
have made some ground, we got our hostages
back-three of them. And so I think that what
we did was right, and we're going to continue
on this path."
In the wake of the press response to the
news conference, the President asked Attorney
General Meese to come to the White House to
straighten out what had happened over the
course of the initiative. It was during these dis-
cussions on November 21-23 that the Attorney
General discovered the possibility of diversion.
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Appendix E
Case Studies
Prepared
for the Board
NSC-68 ............................................................
U-2 ...................................................................
Bay of Pigs/Operation Mongoose ...................
Cuban Missile Crisis ........................................
Covert Operations in Chile .............................
Cambodia Bombing .........................................
Opening to China .................:..........................
Mayaguez Incident ...........................................
Fall of the Shah ................................................
Iran Hostage Negotiation ................................
Desert I Rescue ................................................
Marines in Beirut .............................................
TWA-847 ........................................................
Achille Lauro ...................................................
Administration
Truman
Eisenhower
Kennedy
Kennedy
Nixon
Nixon
Nixon
Ford
Carter
Carter
Carter
Reagan
Reagan
Reagan
These case studies were prepared, under the direction of the Board, by Graham Allison, John F.
Kennedy School of Government; Michael Beschloss, Smithsonian Institution; MacGregor Knox,
University of Rochester; Williamson Murray, Ohio State University; Albert Pierce, National De-
fense University; Gregory Treverton, John F. Kennedy School of Government.
The Board extends special thanks to Robert Murray of the John F. Kennedy School of Govern-
ment who made a major contribution in the interpretation and preparation of these cases.
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Appendix F
President's Special
Review Board
Interviews
(Covering the period 1 Dec 1986-26 Feb 1987)
Abrams, Elliot ................... 19 Dec
Allen, Charles .................... 30 Dec/11 Feb
Allen, Richard V ................ 13 Jan
Armitage, Richard L.......... 18 Dec
Brown, Harold .................. 15 Jan
Brzezinski, Zbigniew ......... 19 Jan
Bush, George .................... 18 Dec
Carlucci, Frank C .............. 19 Dec/20 Feb
Carter, James E ................. 21 Jan
Cave, George .................... 5 Jan
Clarridge, Duane R ........... 18 Dec
Clifford, Clark ................... 22 Jan
Colby, William .................. 8 Jan
Coy, Craig ......................... 2 Jan
Doherty, David P ............... 19 Dec
Ford, Gerald ...................... 25 Jan
Fuller, Graham .................. 2 Jan
Furmark, Roy M ................ 15 Jan
Gates, Robert .................... 12 Jan
George, Clair ..................... 14 Jan
Ghorbanifar, Manucher .... 29 Jan
Haig, Alexander M., Jr...... 18 Dec
Helms, Richard ................. 20 Jan
Jones, David C ................... 9 Feb
Khashoggi, Adrian ............. 29 Jan
Kimmitt, Robert ................ 12 Dec
Kissinger, Henry ............... 23 Jan
Laird, Melvin ..................... 16 Jan
Ledeen, Michael ................ 9 Jan/ 12 Feb
McFarlane, Robert C......... 11 Dec/19 Feb/
21 Feb
McMahon, John N ............. 6 Jan
McNamara, Robert ............ 19 Jan
Meese, Edwin .................... 20 Jan
Mondale, Walter ............... 4 Feb
Moorer, Thomas H ........... 11 Feb
Nixon, Richard .................. 23 Jan
Oakley, Robert .................. 17 Dec
Reagan, Ronald ................. 26 Jan/11 Feb
Regan, Donald .................. 7 Jan
Rogers, William ................ 16 Jan
Rosenne, Meir ................... 4 Feb
Rostow, Walt ..................... 7 Jan
Schlesinger, James ............ 6 Feb
Shackley, Theodore G....... 5 Feb
Shultz, George .................. 22 Jan
Sporkin, Stanley ................ 9 Jan
Teicher, Howard ............... 19 Dec
Turner, Stansfield ............. 24 Jan
Vance, Cyrus ..................... 19 Jan
Weinberger, Caspar .......... 14 Jan
The Board also interviewed the following officials:
Chief of the Near East and South Asian Division in the Operations Directorate, CIA -- 5 Jan
Chief of the Iran Branch, Operations Directorate, CIA -- 6 Feb
Director of the Central American Task Force, Operations Directorate, CIA -- 8 Jan
' There were a substantial number of additional interviews conducted by the staff at the direction of the Board.
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Appendix G
December 12, 1986
Vice Admiral John Poindexter
10 Barrington Lane
Rockville, Maryland 20850
On behalf of the Special Review Board established by
Executive Order No. 12575, I request that you appear before
the Board, at 10:00 a.m., December 17, 1986, to discuss and
respond to questions regarding. the manner in which foreign
and national security policies established by the President
have been implemented by the NSC staff.
Should you have any questions regarding this request
please contact me or..Mr. Clark McFadden, General Counsel to
the Board, at...456-2566-.
The Board would appreciate a response to this request
as soon as possible.
Sincerely,
Power, Chairman
Special Review Board
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1150 ConnecticutAvenue N.W. Houston
Washington, D.C. 20036 Washington, D.C.
Austin
Telephone: [phone] San Antonio
Telex: 89-2602 Dallas
London
Zurich
December 16, 1986
BY HAND
Clark McFadden, Esq.
General Counsel to the President's
Special Review Board
New Executive Office Building
Room 5221
Washington, D.C.
We represent Vice Admiral John M. Poindexter, and he
has provided us with Chairman Tower's letter, dated
December 12, 1986, requesting the Admiral's appearance before
the President's Special Review Board on December 17, 1986. At
the present time, Admiral Poindexter must respectfully decline
to appear before the Board. He has asked us, however, to
assure you that he would be pleased, at an appropriate time, to
discuss and respond to the Board's questions regarding the
manner in which foreign and national security policies
established by the President have been implemented by the NSC
staff.
G-2
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PRESIDENT'S SPECIAL REVIEW BOARD
December 12, 1986
Lt Col Oliver North
Kentland Drive
Great Falls, Virginia 22066
Dear Colonel North:
On behalf of the Special Review Board established by
Executive Order No. 12575, I request that you appear before
the Board, at 2:30 p.m., December 17, 1986, to discuss and
respond to questions regarding the manner in which foreign
and national security policies established by the President
have been implemented by the NSC staff.
Should you have any questions regarding this request
please contact me or Mr. Clark McFadden, General Counsel.to
the Board, at 456-2566.
The Board would appreciate a response to this request
as soon as possible.
Sincerely,
John--Towet, Chairman
President's Special Review Board
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EDWARD BENNETT WILLIAMS
PAUL R. CONNOLLY (1922-1978)
ROBERT A. SCHULMAN
VINCENT J. FULLER
RAYMOND W. BERGAN
STUART E. SEIGEL
JEREMIAH C. COLLINS
ROBERT L. WEINBERG
DAVID POVICH
STEVEN M. UMIN
JOHN W. VARDAMAN, JR.
PAUL MARTIN WOLFF
J. ALAN GALBRAITH
CHARLES H. WILSON
JOHN G. KESTER
WILLIAM E. MCDANIELS
BRENDAN V. SULLIVAN. JR.
AUBREY M. DANIEL=
RICHARD M. COOPER
ROBERT P. WATKINS
JERRY L. SHULMAN
LAWRENCE LUCCHINO
LEWIS H. FERGUSON.
ROBERT B. BARNETT
DAVID E. KENDALL
JOHN J. BUCKLEY, JR.
TERRENCE O'DONNELL
DOUGLAS R. MARVIN
JOHN K. VILLA
BARRY S. SIMON
KEVIN T. BAINE
STEPHEN L. URBANCZYK
PHILIP J. WARD
ELLEN SEGAL HUVELLE
FREDERICK WHITTEN PETERS
PETER J. KAHN
JUDITH A. MILLER
LON S. BABBY
SCOTT BLAKE HARRIS
MICHAEL S. SUNDERMEYER
JAMES T. FULLER. 33M
DAVID D. AUFHAUSER
BRUCE R. GENDERSON
HAND DELIVER
LAW OFFICES
WILLIAMS 8 CONNOLLY
HILL BUILDING
839 SEVENTEENTH STREET, N. W.
WASHINGTON, D. C. 20006
AREA CODE 202
331-5000
CAROLYN H. WILLIAMS
F. LANE HEARD,IIL
STEVEN R. KUNEY
GERSON A. ZWEIFACH
SARAH H. DUGGIN
ROBERT S. LITT
PAUL MOGIN
DANIELA WINKLER
JEFFREY B. KINDLER
NANCY F. PRE15S
STUART L. GASNER
RICHARD S HOFFMAN
STEVEN A. STEINBACH
P. MICHELE ELLISON
JEFFERY R. BERRY
STEPHEN I. GLOVER
MARY G. CLARK
LYNN A. STOUT
MARK S. LEVINSTEIN
JEFFERY D. UBERSAX
DIANNE J. SMITH
VICTORIA L. RADD
CHERRY JOY BEYSSELANCE
SETH J. CHANDLER-
GEORGE ELLARD
DANIEL F. KATZ
JEFFERSON M. GRAY
JEANNE M. ROWZEE
MANLEY W. ROBERTS
ELENI M. CONSTANTINE
SVEN ERIK HOLMES
NICOLE K. SELIGMAN-
ROBERT'W. HAMILTON
WILLIAM R. MURRAY. JR.
EVA M. PETKO
CYNTHIA C. HOGAN-
MARK J. HULKOWER-
MATTHEW D. LERNER--
STEPHEN D. RARER'--
December 15, 1986
John Tower, Chairman
President's Special Review Board
Room 5221
New Executive Office Building
Washington, D.C. 20506
COUNSEL
LYMAN G. FRIEDMAN
DONALD E. SCHWARTZ
? MEMBER PA BAR ONLY
MEMBER MO BAR ONLY
--- MEMBER CA BAR ONLY
As you know, LtCol North has asserted his constitutional
right not to answer questions with respect to the subject matter
of your December 12, 1986 letter. We regret we cannot be of
assistance to you at this time. LtCol North looks forward to the
opportunity of answering all of your questions at the appropriate
time.
In view of the fact that LtCol North is represented by
counsel, please direct all further correspondence to me directly.
Sincerely yours,
Brendan V. Sullivan, Jr.r-
BVS:ing
cc: W. Clark McFadden, II
General Counsel to the Board
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PRESIDENT'S SPECIAL REVIEW BOARD
New Executive Office Building - Room 5221
Washington, D.C. 20506
202-456-2566
JOHN TOWER
Chairman
EDMUND MUSKIE
BRENT SCOWCROFT
RHEIT DAWSON
Director
W. CLARK MCFADDEN II
General Counsel
February 4, 1987
The President
The White House
Washington, D.C. 20500
Dear Mr. President:
For the last several weeks, the President's Special Review
Board has been studying the National Security Council process.
Pursuant to your direction, a focus of the Board's attention
has been the recent transfers of arms to Iran and the possible
diversion of funds to the Contras. Establishing the essential
facts surrounding these transactions has proven to be a diffi-
cult challenge.
Two individuals, Admiral John Poindexter and Lt. Col.
Oliver North, played central roles in these transactions. The
ability of the Board to make an informed and useful appraisal
of the Iran-Contra matter would be greatly enhanced by the
testimony of these individuals. To this end, the Board in-
vited these individuals to appear before it, but through their
attorneys, they declined.
Under these circumstances and consistent with the respon-
sibility which the Board has accepted, the Board respectfully
requests that in your capacity as Commander-in-Chief you order
these individuals to appear before the Board and to cooperate in
connection with its inquiry. In this way-we believe the Board
can most effectively accomplish its purpose.
Thank you for your cooperation.
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February 6, 1987
Dear Senator Tower:
Thank you for your letter to the President of February 4,
1987, requesting that he, as Commander in Chief, order Vice
Admiral John Poindexter and Lt. Col. Oliver North to appear
before and cooperate with the President's Special Review
Board.
On numerous occasions, the President has made clear his
desire that both Vice Admiral Poindexter and Lt. Col. North
cooperate fully with all on-going inquiries into the Iran
matter and the alleged diversion of funds to the anti-
Sandinista forces in Nicaragua. In these statements,
however, the President has recognized that Messrs. Poindexter
and North have a constitutional right not to testify, and
that this right must be respected even when its assertion
unduly hinders the disclosure process the President himself
has set in motion.
In response to your request, we have confirmed with the
General Counsel of the Department of Defense what had been
our previous advice to the President -- that the order you
seek would conflict with the constitutional rights of Messrs.
Poindexter and North, as well as their rights under Article
31 of the Uniform Code of Military Justice, and hence would
not be a lawful order under the Manual for Courts-Martial,
E.O. 12473 (1984). A copy of the opinion of the General
Counsel of the Department of Defense is attached.
If you have any questions, or if I may be of further-
assistance, please contact me.
Very truly yours,
Peter J. Wallison
Couns 1 to the President
The Honorable John G. Tower
Chairman
President's Special Review Board
The White House
Washington, D.C. 20500
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WASHINGTON. D.C. 20301
February 5, 1987
MEMORANDUM FOR MR. PETER J. WALLISON, COUNSEL TO THE PRESIDENT
SUBJECT: Tower Commission Request Regarding Former NSC Personnel
In my opinion, the request by the Tower Commission that the
President, as Commander-in-Chief, order Vice Admiral Poindexter
and Lieutenant Colonel North to answer the Commission's questions
should be denied. In the absence of a grant of testimonial
immunity, the Commission's request asks the President to issue an
order which would be clearly unlawful and, therefore,
unenforceable through the provisions of the Uniform Code of
Military Justice (UCMJ).
Military personnel are protected against compelled
self-incrimination by both the Fifth Amendment and Article 31 of
the UCMJ,.10 U.S.C. ?831. Although Article 31 only applies to
interrogations or investigations conducted by persons subject to
the UCMJ, Fifth Amendment protections apply independently to both
civilian and military investigations. United States v. Tempia,
37 C.M.R. 249 (C.M.A. 1967).
Military personnel may be prosecuted before courts-martial
for.willful violations of the lawful orders of their military
superiors. Articles 90 and 92, UCMJ, 10 U.S.C. ??890, 892. As
Commander-in-Chief of the armed forces, the President is the
military superior of both individuals; willful failure to obey
his lawful orders does violate Article 92. Violation of his
lawful orders is sufficiently "service-connected" to support the
exercise of military jurisdiction, regardless of where given or
disobeyed. United States v. Fuller, 2 M.J. 702 (A.F.C.M.R.
1976).
However, to be lawful, an order "must not conflict with the
statutory or constitutional rights of" the recipient. Part IV,
Paragraph 14c(2)(a)(iv), Manual for Courts-Martial, E.O. 12473
(1984). An order which contravenes the recipient's rights under
Article 31 and the Fifth Amendment is n,ot a lawful order. United
States v. Jordan, 22 C.M.R. 242 (C.M.A. 1957); United States v.
Jackson, 1 M.J. 606 (A.C.M.R. 1975). To the extent an order
requires the recipient to perform a self-incriminating act, it
violates Article 31, and cannot serve as the basis of a
conviction for violating Articles 90 or 92. United States v.
Ham, 3 M.J. 654 (A.C.M.R. 1977).
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Nor can servicemembers be administratively separated from
the service or otherwise penalized for invoking their protection
against self-incrimination. Lefkowitz v. Cunningham, 431 U.S.
801 (1477); Lefkowitz v. Turley, 414 U.S. 70 (1973); Sanitation
Men v. Sanitation Commissioner, 392 U.S. 280 (1968); Gardner v.
Broderick, 392 U.S. 273 (1968); Garrity v. New Jersey, 385 U.S.
493 (1967). Inasmuch as the Government is clearly on notice of
the assertion of Fifth Amendment rights by both officers, they
would almost surely obtain de facto immunity for their statements
if they chose to obey rather than refuse the order.
If afforded testimonial immunity by the Attorney General
under 18 U.S.C. ?6002, Vice Admiral Poindexter and Lieutenant
Colonel North may then be ordered to account for their official
conduct. Refusal to do so might then provide a basis for
prosecution under the UCMJ provisions discussed above, or adverse
administrative action under service regulations. Gardner, 392
U.S. at 279. However, neither their statements nor any evidence
derived therefrom may be used against them in a subsequent
criminal prosecution or court-martial, except for perjury or
other falsity arising out of their statements. Evidence
independently derived would, of course, not be precluded from use
by such immunity.
Statements made pursuant to a grant of immunity could be
used to support any appropriate adverse administrative action, to
include admonition, reprimand, determination of retired grade, or
separation from the naval service. See United States v.
Apfelbaum, 445 U.S. 124, 125 (1980) and cases cited therein.
Accordingly, I conclude that such an order from the
President as is requested by the Tower Commission would not be
lawful unless accompanied by a grant of immunity, and could not
be enforced by threat of punishment under the UCMJ or other
adverse action. Although the giving of such an order would not
itself violate the law, it would set an extremely poor precedent
within the military justice system by suggesting that commanders
may, for reasons of command, confer de facto immunity to obtain
information without adhering to established provisions of law
governing grants of immunity.
I recommend the Tower Commission's request be rejected.
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Appendix H
Off m of tP lWarnpu 6para1
MA54 gtntt,'s. (11..20530
18 February 1987
The Honorable John Tower
President's Special Review Board
New Executive Office Building, Room 5221
Washington, D.C. 20506
In my appearance before the President's Special Review Board
I was asked whether-a finding under the Hughes-Ryan Amendment
would have been necessary if it were found that the Central
Intelligence Agency rendered certain kinds of assistance to a
covert arms transfer to Iran prior to the President's authorizing
such a transfer. The purpose of this letter is to respond.to the
Board's request for a considered, written answer to this ques-
tion.
The Board's question assumed that the CIA,. without prior
presidential authorization, assisted in the November 1985 arms
shipment to Iran by attempting to obtain flight clearances at a
foreign airport and by arranging for a proprietary airline to
carry the arms from Israel to Iran. The question further assumed
that the objective of the transfer was to influence the policy
and actions of.a foreign government while not publicly d.isc.losing
the American role in exerting that influence. Under these as.-
sumed facts, I believe that a finding under the Hughes-Ryan
Amendment would be required.
The so-called Hughes-Ryan Amendment, section 662 of the
Foreign Assistance Act, (codified as amended at 22 U.S.C. 2422),
provides in its present form:
No funds appropriated under the authority
of this chapter or any other Act,may be
expended by or on behalf of the Central
Intelligence Agency for operations in foreign
countries, other than activities intended
solely for obtaining necessary intelligence,.
unless and until the President finds that
each such operation is important to the
national security of the-United States. Each
such operation shall be considered a signifi-
cant anticipated intelligence activity for
the purpose of section-413 of title 50 [i.e.
section 501 of the National Security Act].
H-1
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The arms transfer you describe would constitute an
"operation in a foreign country," the kind of situation at which
the Hughes-Ryan Amendment was apparently aimed. Assuming the
accuracy of the facts outlined above, and assuming further that
intelligence gathering was not the sole objective of the opera-
tion, I believe that such-CIA assistance in transferring the arms
would require a prior finding by the President that the operation
was "important to the national security of the United States."
I am aware of statements that CIA personnel did not fully
understand or did not have full information concerning-the nature
of the operation at the time the agency was asked for its assis-
tance. If the operation was described to CIA personnel in terms
that made Hughes-Ryan seem inapplicable, that would have a bear-
ing on whether the CIA could be held responsible for the lack of
a presidential finding. Moreover, nothing in this letter should
be read as implying that a Hughes-Ryan finding would be required
for every single foreign operation that is not strictly intended
solely for obtaining necessary intelligence. Nor do I intend to
imply that every form of CIA assistance to another agency, no
matter how peripheral or indirect, would require a Hughes-Ryan
finding merely because the other agency was engaged in a covert
operation.
Please let me know if I can be of further assistance.
Sincerely yours,
EDWIN MEESE III
Attorney General
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BRAITHWAITE, Karl
Analyst
BOWEN, Patricia
Secretary
BRUH, Brian M.
Chief Investigator
COON, Donna M.
Secretary
DAWSON, Rhett
Director
HADLEY, Stephen
Counsel
HETU, Herbert E.
Counselor for Public Affairs
HOWLAND, Dorrance P.
Security Officer
KEMPISTY, Raymond P.
Deputy Counselor for
Public Affairs
KOVAR, Jeffrey O.
Attorney
KOWAL, John F.
Administrative Officer
KREUZER, Roger Lee
Investigator
KREIG, Kenneth J.
Analyst
MARKOFF, Michele G.
Analyst
McFADDEN, W. Clark, II
General Counsel
NAGY, Helen S.
Secretary
OLSZEWSKI, Margaret L.
Secretary
ROSTOW, Nicholas
Counsel
RUSSELL, Michael S.
Investigator
ST. JOHN, Dennis M.
Analyst
SWANSON, E. Jane
Executive Secretary
WILKENS, Katherine
Analyst
YANAGIDA, Joy
Attorney
Executive Assistant Director,
Los Alamos National Laboratory
Department of Defense
Director, Office of Criminal
Investigations, Internal Revenue Service
Department of Defense
Senior Vice President,
Hill and Knowlton; Inc.
Department of Defense
Office of the Legal Adviser,
Department of State
Army Protocol Office
Department of Defense
Office of the Secretary of Defense
Executive Secretary, Strategic Arms
Reduction Talks, Department of State
Partner, Dewey, Ballantine, Bushby,
Palmer and Wood
Department of State
Special Assistant to the Legal
Adviser, Department of State
Special Agent, Bureau of Alcohol,
Tobacco. and Firearms
Department of Defense
Central Intelligence Agency
Department of State
Office of the Legal Adviser,
Department of State
CONSULTANT TO THE BOARD
For sale by the Superintendent of Documents, U.S. Government Printing Mine
Washington, DC 20402
Declassified and Approved For Release 2012/02/28: CIA-RDP89GO0643R001300120001-9