CASEY DIES OF PNEUMONIA; ROLE IN ARMS DEAL UNTOLD

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000403020001-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: January 9, 2012
• Sequence Number: 1
• Publication Date: May 7, 1987
• Content Type: OPEN SOURCE

ILL Declassified in Part - Sanitized Copy Approved for Release 2012/01/09: CIA-RDP9O-00965ROO0403020001-5
yr rnuc I LVJ P L1ULLCJ 1119CJ
7 May 1987
Casey Dies of Pneumonia;
Role in Arms Deal Untold
7 By DON IRWIN,
Timm Staff Writer
WASHINGTON-William J.
Casey, World War U spymaster
and self-made millionaire tax law-
yer who served as director of
Central Intelligence at the height
of the Iran-contra scandal, died
Wednesday of pneumonia that de-
veloped after he had brain surgery
in December.
Casey, 74, died in a Long Island
hospital only hours after retired
Air Force Maj. Gen. Richard V.
Secord had told Congress that he
had met three times with Casey in
1985 and 1986 to get help for his
private airlift for the Nicaraguan
rebels during a time when govern-
ment aid was illegal.
Sen. Patrick J. Leahy (D-Vt.),
former vice chairman of the Intelli-
gence Committee, said Casey's
death meant that his role in the
Iran-contra affair may never be
fully known. Casey, Leahy said,
"probably knew the most of anv-
William J. Casey
body-with the possible exception
of Oliver North-and of course that
we'll never know, because he
didn'treally tell us much about it."
Casey, who managed President
Reagan's 1980 campaign for the
White House before his six years at
the helm of the Central Intelligence
Agency, resigned Feb. 2,61A weeks
after a cancerous tumor was re-
moved from his brain. Reagan
accepted the departure of his long-
time associate with "profound re-
gret.,,
It was perhaps appropriate that
Casey's career as an activist ad-
ministrator ended in stormy times,
for controversy and achievement
were twin hallmarks of his service
at two sensitive federal agencies.
Before he took over the CIA, he
had served two years as chairman
of the Securities and Exchange
Commission under President Rich-
ard M. Nixon.
Tall. bulky and blunt-speaking,
Casey won acclaim in both assign-
ments for his quick grasp of com-
plex subjects and for innovative
leadership that rekindled morale in
jaded staffs. But he could be testy
and sarcastic and had a tendency to
mumble and sidestep direct an-
swers to imprecisely phrased ques-
tions-a trait that tended to alien-
ate congressmen questioning him
at hearings.
Earned MWi.su
An erudite and voracious reader
who wrote a book on the American
Revolution as well as several busi-
ness manuals. Casey was a million-
aire several times over. His ap-
pearance belied his wealth-his
suit often was rumpled, his wispy
white hair a bit out of control. But
conversely, his speech, in the ac-
cents of his native New York, was
articulate.
Sen. Daniel K. Inouye (D-Ha-
waii), chairman of the Senate se-
lect committee investigating the
Iran affair, said that regardless of
the final determination of Casey's
role in the scandal, "it should not
obscure Mr. Casey's distinguished
record of commitment to this coun-
try.... Mr. Casey served his
nation with dedication. purpose and
energy...
At the White House, Reagan
issued a statement saying: "The
nation and all those who love
freedom honor today the name and
memory of Bill Casey. In addition
to crediting him with rebuilding
America's intelligence capability,
history will note the brilliance of
his mind and strategic vision, his
passionate commitment to the
cause of freedom and his unhesitat-
ing willingness to make personal
sacrifices for the sake of that cause
and his country."
The CIA issued a statement that
said: "We have benefitted from his
leadership and we shall miss him.
He strove vigorously and success-
fully to enhance the quality and
quantity of information orovided to
brought a high degree of collegiali-
ty and openness to his dealings
with the other members of the
intelligence community."
Casey's tenure at the CIA was
notable for improvements and
achievements resulting partly from
his closeness to the President who
made him the first CIA chief to hold
Cabinet rank. Although critics
found unwanted political overtones
in the relationship, it gave him
leverage to boost the agency's
classified budget, which was said to
have more than doubled during his
six years as ditector.
The money-lielped to pay for
rebuilding the CIA's network of
covert intelligence agents, which
had been decimated during Presi-
dent Jimmy Carter's Administra-
tion by substitution of technologi-
cal devices, such as satellites, for
many human agents.
The funds also helped to revive
the CIA's covert activities that
supported the so-called Reagan
Doctrine of backing anti-commu-
nist resistance movements. In Cas-
ey's time, there were operations in
Central America, Ethiopia, Angola,
Afghanistan and Cambodia.
There were also complaints-
many from Capitol Hill and not all
from Democrats-that Casey, 'who
made his fortune on Wall Street
before entering government, had
been highhanded in some of his
dealings as a businessman and
government official while being
evasive in others.
Terrorism and Soviet expansion
were Casey's chief concerns. He
targeted Soviet bridgeheads in
Third World nations that used
terror to enforce Moscow's policy
line. He worked with some success
to extend CIA cooperation with
Israel and with non-communist
Arab states that were among Isra-
el's historical enemies.
Toward the end of his tenure, in
December, 1986, Casey came under
heavy fire as legislators and jour-
nalists peeled back layers of a
clandestine operation run by Na-
tional Security Council officials.
Apparently hoping to win freedom
for Americans held hostage by
Lebanese Muslim extremists, the
officials had managed secret sales
of U.S. arms to Iran's government.
And there was evidence that pro-
ceeds of the sales were earmarked
to aid the rebels fighting Nicara. C
gua's Marxist regime.
Three months later. Casey
shared in the blame when a special
presidential commission headed by
former Sen. John Tower (R-Tex.)
Declassified in Part - Sanitized Copy Approved for Release 2012/01/09: CIA-RDP9O-00965ROO0403020001-5
 Declassified in Part - Sanitized Copy Approved for Release 2012/01/09: CIA-RDP90-00965R000403020001-5
appearance, scheduled for the nett
day before the Senate Intelligence
Committee, Casey suffered a cere-
bral seisure. A second incident
followed as an ambulance rushed
him to a Washington hospital
In a five-hour operation three
days later, surgeons removed a
malignant tumor from the left aide
of Casey's brain. Although his
speech became slurred and the
power of movement on his right
side was affected, associates denied
any effect on his acute intellect
When Casey stepped down from
his CIA post, peacetime govern-
ment service had come to be a third
career for him. When World War U
struck, he was a brainy, ambitious
28-year-old climbing the legal lad-
der in post-Depression Manhattan.
He found a slot as an assistant to
David K. E. Bruce, a co-founder of
the Office of Strategic Services, the
wartime clandestine predecessor of
the CIA.
issued its verdict on the Iran-con- tired law and wrote or edited a looting $224 million from four mu-
tra scandal series of handbooks. ' tual funds.
The report scored Casey for One of Casey's law partners was Before the subcommittee and
failing to advise Reagan promptly Leonard W. Hall. a political coun- later in court testimony, Casey said
of the suspected fund diversion to selor to President Dwight D. Eisen- that former White House counsel
the contras and held that he should hewer wbo was Republican nation- John W. Dean III, who soon became
have explained to the President the al chairmen from 1963 to W. a key Watergate witness, had tried
risks involved if the Iranian opera- Under Hall's aegis, Casey made his a week before the 1972 elections-
tion became public. only attempt at elective office in while Casey was still head of the
Casey stunned the House For- 1996, losing a House Republican SEC-to get him to defer question-
eign Affairs Committee when he primary in his home district. ing of two Vesco employees "to
disclosed during a closed session on Casey was locally active in Nix- avoid a campaign smear." Casey
Dec. 10 that a former law client on's successful 1898 presidential said he rejected the request.
gave him his first inkling the campaign, and he and his wife. Casey was a witness at the trial
previous Oct. 7 that funds from Sophia, contributed $17,500 that of Mitchell and former Commerce
Iranian arms sales might be going year to six GOP campaign commit- Secretary Maurice H. Stans, who
to the contras. Until then, Casey tees. In February, 1971, Nixon were accused of obstruction of
had maintained that he was un- appointed Casey to head the SEC, justice in connection with an ille-
aware of the diversion until Atty. which was under attack for permit- gal, secret $200,000 contribution
Gen. Edwin Meese III described it Ling unsound financial practices to Vesco made to the Nixon campaign.
publicly Nov. 25. spread in the securities industry. He testified that he did not learn
On Dec. 16, as he met with aides about the gift until after the elec-
in his office to discuss another isopoeved 1lwiseuseat Lion and after he met with Vesco's
Support for Resistaees
At the OSS, Casey helped to
coordinate support by French Re-
sistance forces for the Allied land-
ings in Normandy in June, 1944.
Later, he served under Bruce as
chief of OSS intelligence operations
in the European theater, a post that
put him in charge of infiltrating
agents into Nazi Germany.
Casey worked in Washington for
a year after his discharge in 1946 as
special counsel to the Senate Small
Business Committee. Thereafter,
he said later, he decided to "estab-
lish my financial independence
first," even though he "always
wanted to go back" to government
The road back led through Man-
hattan, where he lectured on tax
law at New York University, prsc-
Casey won generally high marks
for his work in making the commis-
sion more effective, particularly for
policies that improved enforce-
ment, encouraged restructuring of
securities markets to increase com-
petition and strengthened financial
disclosure rules to clamp down on
issuance of misleading corporate
financial statements.
But first, Casey had to surmount
charges of borderline business
practices that postponed his confir-
mation as SEC chief for a month.
After a tentative vote of unanimous
approval, the Senate Banking
Committee abruptly reopened
hearings to assess complaints lev-
eled against Casey in suits filed
during his career as a businessman.
Casey argued that the charges
against him were insignificant,
calling them examples of the prob-
lems that any active businessman
must deal with. The committee
voted to recommend his appoint-
ment and the Senate concurred.
Casey left the SEC in February,
1973, to become assistant secretary
of state for economic affairs under
Secretary of State William P. Rog-
ers. A year later, soon after Rogers
returned to private life. Nixon
reassigned Casey to the presidency
of the Export-Import Bank. Casey
resigned that job after only seven
months to join Rogers' law firm.
Ceneera en Fraud Case
In the spring of 1973, Casey
testified to a House Commerce
subcommittee that farmer Atty.
Gen. John N. Mitchell, during brief
service as director of Nixon's re-
election campaign, had voiced con-
cern about a fraud can that the
SEC was bringing against Robert
L. Vesoo, a financier accused of
lawyer at Mitchell's request.
Mitchell and Sterns were acquitted.
At the House hearing, Casey
reasserted a claim that the Justice
Department had requested transfer
from the SEC to Justice of 34
cartons of politically sensitive doc-
uments involving questionable
contacts between International
Telephone & Telegraph Corp- and
Nixon Administration officials.
! iffissay CWleyei
A department official challenged
Casey's testimony and Dean testi-
fied that it was Casey who had
pressed for transfer of the papers to
evade a subpoena that could have
aired embarrassing facts a scant
month before the 1972 election.
Six months after his original
testimony. Casey took responsibili-
ty for the transfer. The Watergate
special prosecutor's office exam-
ined the conflicting testimony but
took no action.
After Casey left the Export-Im-
port Bank, his links to the intelli-
gence community were re-estab-
lished when he was named to the
old Foreign Intelligence Advisory
Board by President Gerald R. Ford.
At the same time. Casey main-
tained strong Republican connec-
tions. In November, 1979, he
served as chairman of a New York
dinner at which Ronald Reagan
officially announced his availabili-
ty for the 1990 presidential nomi-
nation. He soon became a member
of Reagan's executive advisory
committee.
Before the New Hampshire pri-
mary, Casey worked with Meese on
issues, research and development.
On the eve of the Feb. 26 balloting,
which gave the former California
Gonouo
a.
Declassified in Part - Sanitized Copy Approved for Release 2012/01/09: CIA-RDP90-00965R000403020001-5
 Declassified in Part - Sanitized Copy Approved for Release 2012/01/09: CIA-RDP90-00965R000403020001-5
Declassified in Part - Sanitized Copy Approved for Release 2012/01/09: CIA-RDP90-00965R000403020001-5
governor 50% of the GOP vote in a
seven-candidate field, Reagan
fired John P. Sears, his campaign
manager, and chose Casey to take
over.
Take over he did. He was credit-
ed with a reorganisation that fore-
stalled bankruptcy without slowing
the momentum of the Reagan
bandwagon. He was rated a deci-
sive, effective executive, a man
without faction in a faction-ridden
organisation who retained the en-
thusiastic support of Meese and the
"California Mafia" even as he in-
fused appointees of his own into the
operation.
The formula worked on Election
Day. Five weeks later, the incom-
ing President chose Casey as di-
rector of Central Intelligence, a
post with influence extending be-
yond the CIA.
His responsibilities included
oversight of the government's en-
tire foreign intelligence establish-
ment, which includes the National
Security Agency and the Defense
Intelligence Agency, as well as
smaller overseas intelligence oper-
ations maintained by various de-
partment, and agencies.
CIA Figure Resins
Casey vowed to build the world's
best intelligence operation, but
first he had to weather yet another
storm. It began with a questionable
appointment, then was fed by con-
cern, in the Senate and in the
intelligence community, that poli-
tics might threaten CIA policy.
The controversy led to the hasty
resignation in July, 1981, of Max
Hugel. a wealthy Brooklyn busi-
nessman whom Casey had installed
as chief of the CIA's clandestine
service. Hugel, who had been a
Reagan organizer in the 1980 cam-
paign, was accused by two former
business associates of fraudulent
securities manipulation in the
mid-1970x.
Casey called the Hugel appoint-
ment a mistake for which he took
"full responsibility." But the furor
would not the and it helped to bring
on an investigation of Casey by the
Senate Intelligence Committee.
The panel found the CIA chief
"not unfit" to serve but called him
"at minimum inattentive to detail"
in reporting his personal finances.
Although Casey's job gave him
access to top-level estimates of
world economic conditions, he re-
sisted urgings that he transfer his
financial holdings to a blind trust
and thus insulate himself from
even the appearance of conflict of
interest. Pressure for such action
developed after Casey's financial
report for 1981 showed that he had
sold more than $800.000 in oil
stocks as oil prices plunged.
In mid-1982, the CIA set up a
special screening arrangement to
keep other agency officials aware
of changes in Casey's holdings,
then valued at more than $3.2
million. In July, 1983, a much-pres-
sured Casey agreed to put his assets
into a blind trust, the precedent for
which was set by two of his
immediate predecessors, as well as
by Reagan and half a dozen other
wealthy Administration officials.
On Capitol Hill, Republicans and
Democrats on the Senate Intelli-
gence Committee faulted the quali-
ty of information provided to them
on CIA operations in Central
America.
Committee members protested
that Casey had briefed them so
inadequately on the CIA's role in
mining Nicaraguan harbors that
they were unaware of the opera-
tion's scope when they approved a
supplemental $21 million in April,
1984, for the contras.
Soon thereafter, the director and
the Senate panel reached a formal
agreement on procedures designed
to ensure that Congress receive full
advance information about any
major intelligence action undertak-
en or backed by the CIA.
But in October, 1984, another
controversy erupted just before the
presidential election when it was
disclosed that the CIA had pro-
duced and distributed a Spanish.
language manual for Nicaraguan
rebels that included a sentence
apparently endorsing political kid-
napings and assassinations. Demo-
crats called on Reagan to dismiss
Casey.
Trust Held M1seesistned
In letters to the intelligence
committees of both houses, Casey
argued that the "thrust and pur-
pose" of the manual had been
misconstrued Its aims, he said,
were ..to make every guerrilla
persuasive in face-to-face commu-
nication" and to develop "political
awareness."
Controversy over Central Amer-
ica swelled again after Meese's
startling November disclosure that
proceeds from the sale of U.S. arms
to Iran apparently had been divert-
ed to the contras. Casey acknowl-
edged awareness of the diversion
Dec. 11 in closed testimony before
the Senate Intelligence Committee.
Casey was said to have told the
committee that Roy M. Plrmark, a
New York energy consultant and
former law client, had mentioned a
Central American transaction in a
telephone conversation on Oct. 7.
Later, Furmark testified that he
had told Casey that a Canadian
group had put up $20 million to
finance an Iranian deal but had
been repaid only $10 million. He
said he also thought that Casey
believed that the money had been
diverted to the contras.
Originally, Casey had told re-
porters that he had not "learned" of
the contra connection until Meese's
Nov. 26 statement. Later, however,
he conceded that he "had questions
about it" after his talk with Fur-
mark more than a month earlier.
1SST Sri t
Casey reportedly told congres-
sional investigators that the CIA
had begun to help with arms
shipments to Iran in 1888. but an
earlier date was suggested by a
brief filed in January, 1987, in a
New York trial for conspiracy to
smuggle arms.
The brief said Casey had told
Furmark in January, 1985, that.the
United States had "supplied. and
permitted the supply of aru a to
Iran." Thereafter, the brief said, a
trading group was formed to make
arms ales but completed none.
One aim of the brief was to force
public disclosure of a classified
"finding," signed by President
Reagan on Jan. 17, '1988, which
secretly authorized the age -of U.S.
weapons to Iran and ordered the
CIA not to inform Congress. Casey
was reported to have joined in
November, 1986, in proposing a
preliminary draft of the document,
thereafter discarded, that would
have given retroactive clearance to
previous actions connected with
the arms ales.
Casey was born March 13, 1913,
in Elmhurst, a bedroom community
in New York City's Queens County.
He was the eon of a municipal civil
servant and the grandson of an
Irish-born fireman. His.energy
earned him the nickname "Cy-
clone" while he was a high school
student in Queens,,,and he lived up
to it by working his way succes-
sively through Fordham Universi-
ty and St. John's University Law
School. He married the former
Sophia Kurz in 1941. She and a
daughter, Bernadette, survive.
3.