'IT WAS MY IDEA'

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000605790001-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: July 3, 2012
• Sequence Number: 1
• Publication Date: May 25, 1987
• Content Type: OPEN SOURCE

STAT
i Declassified in Part - Sanitized Copy Approved for Release 2012/07/03: CIA-RDP90-00965R000605790001-7
1 25 May 19 8 7
oN MtnZiZ NEWSWEEK
`It Was My Idea'
Dropping his didn't-know defense, Reagan takes credit for contra aid
Ronald Reagan has never made
any secret of his commitment to
the men he calls "freedom fight-
ers"-the Nicaraguan contras
battling the Sandinista regime in
Managua. But with the Iran-contra scan-
dal chipping away at the foundations of his
presidency, he consented grudgingly to be
pictured as a remote and disengaged presi-
dent whose blurriness about details ex-
tended to the contras too. That role clearly
chafed; and last week, when his handlers
decided that the congressional hearings on
the scandal had blown Reagan's cover and
it was time to fall back on a new legal
defense, it was just Reagan being Reagan
when he burst out of his contra closet. "I
was kept briefed on that," he told a group of
Southern journalists. "As a matter of fact, I
was very definitely involved in the deci-
sions about support to the freedom fight-
ers-my idea to begin with."
The president's born-again activism fell
short of admitting that he had personally
solicited contributions to the cause or that
he condoned activities by his aides that
violated congressional restrictions on aid
for the contras. But the new legal line was
that even if he hadn't obeyed the law, he
decided it simply didn't apply to him. That
was a notion that had some congressmen
sputtering with indignation, though it
might well stand a legal test. Perhaps more
important was the political impact. With
polls showing that more than half the peo-
ple believe Reagan was more deeply in-
volved in the affair than he has let on,
would a confession that they are right help
or hurt? His aides were clearly worried, but
the president held to his trademark opti-
mism. "I've been wounded," he conceded
last week. "I haven't seen any evidence
that I've been mortally wounded."
Pointing fingers: What triggered the new
legal stance was last week's testimony by
Reagan's former national-security adviser,
Robert C. McFarlane. He told the joint pan-
el investigating the arms-for-hostages deal
with Iran and the diversion of funds to the
contras that Reagan had "made clear that
he wanted a job done" to keep the contras
going despite the several Boland amend-
ments limiting or banning aid. McFarlane
said that he had briefed Reagan "dozens" of 4 ders from former CIA director
times on what was being done and that m;, that Poindexter and North "just didn't
Reagan had been personally involved in
discussing donations by Saudi Arabia and
tell me what was going on" and that he
thought he was thanking contributors to
the contras in the Oval Office because they
had given money for television ads. And he
still maintains that he didn't know that
profits from the arms deal were being di-
verted to the contras.
McFarlane's testimony backed the presi-
dent all the way: although Reagan "had a
far more liberal interpretation" of the law
than McFarlane did, he never ordered or
condoned any violations of the law, McFar-
lane insisted. But he was persistently fuzzy
as to just what he had told the president in
his dozens of briefings on the contras. Once,
when committee chairman Sen. Daniel In-
ouye tried to pin him down on what he had
said about Oliver North, McFarlane admit-
ted only that he told Reagan North was "a
very tireless, very hardworking, devoted
officer." Still, McFarlane's story was a bas-
ic blow to Reagan's posture of detached
ignorance. In two specific cases McFarlane
put him at the front of the contra cause:
^ In February 1985, just after Reagan
met with Saudi Arabia's King Fahd in the
White House, the Saudis agreed to double
their support for the contras to $2 million a
month. The administration tried to per-
suade Congress to agree to a $3 billion arms
deal with the Saudis. The White House and
McFarlane denied there was any quid pro
quo, but Reagan conceded that the king had
brought up the contras-and McFarlane
said he had stressed Reagan's concern for
the contras to Saudi officials in setting the
agenda for the conversation.
^ Soon after Congress banned arms ship-
ments to the contras, McFarlane said, the
Honduran military confiscated a shipment
of weapons on the way to them. He said
Reagan called Honduran President Ro-
berto Suazo, as Senate counsel Arthur Li-
man phrased it, "to make sure that the
contras' arms were released to them."
Plain intent: The Fahd incident in particu-
lar was troubling on high policy grounds:
even without an explicit bargain, should a
president secretly accept favors he might
have to return? But the immediate ques-
tion was, had Reagan broken the law?
Both these incidents came in the time
when the most restrictive Boland amend-
ment was in effect, banning use of funds by
any U.S. agency involved in intelligence
activities to support, "directly or indirect-
continued
in expediting a weapons delivery to the
contras. With that, the didn't-know de-
fense became a quibble. And with dozens of
witnesses still to testify, no one at the
White House could be sure what further
fingers would be pointed-or what docu-
ments might back up the accusations. By
one account, National Security Council
aide Oliver North's secretary, Fawn Hall,
smuggled papers out of the White House
for him in her underclothes. That story
triggered an indignant denial from the sec-
retary and a classic tabloid headline in the
New York Post: PANTYSCAM FUROR!
The hearings themselves were hardly
great television; one relieved White House
aide reported that private polls "show
an overwhelming majority of the Ameri-
can people aren't watching." McFarlane
proved a numbing witness, artful at de-
flecting sharp questions with a monotone
filibuster or a sudden angry tirade. As the
focus turns from an overview of the affair to
a parade of minor witnesses delving into
details, the ratings and headlines seem
likely to shrink even smaller.
Still, the first two witnesses, McFarlane
and retired Maj. Gen. Richard Secord, piled
up impressive evidence implicating them-
selves and their former colleagues in what
could be crimes ranging from conspiracy to
obstruction of justice. They described cov-
ert operations so understaffed, amateurish
and downright bumbling that lawmakers
compared North and his secret agents to
the Keystone Cops (box, page 18). And with
Fawn Hall, North himself and McFar-
lane's successor, John Poindexter, still to
tell their stories, there would surely be
more high drama and low comedy to come.
This week's testimony could be particular-
ly damaging to the president's freedom
fighters: by one account, North's courier
Robert Owen will tell of money skimming
and drug dealing by some contra leaders.
As Reagan told it last week, his stance
has never changed and he has never dis-
guised his knowledge about the contras. "I
don't have to know more about that. I know
all about that," he said. In truth, however,
he had not previously been so forthcoming.
At one time or another he has said that he
didn't know whether North was takin or-
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ly, military or paramilitary operations in
Nicaragua by any nation, group, organiza-
tion, movement or individual." Massachu-
setts Democrat Rep. Edward Boland, au-
thor of the amendment, maintains that the
language is clear and explicit, but lawyers
say otherwise. There is debate, for in-
stance, whether the NSC is legally an agen-
cy involved with intelligence, even though
it oversees all such activity for
the president. Nonsense, oppo-
nents argue, the president him-
self is an officer of the govern-
ment involved in intelligence
activities, and the plain intent
of the bill was to ban just this
kind of act.
Hanging tough: The new Reagan
defense, worked out in an anal-
ysis by White House counsel A.
B. Culvahouse, aims to slice
through all such debate by
making it irrelevant. The presi-
dent has a constitutional right
to conduct foreign policy, Cul-
vahouse argues, and Congress
can't infringe on it. Further-
more, if Congress wanted to try,
it should have named the presi-
dent along with intelligence
agencies among those banned.
So, even if Reagan had asked
Fahd directly to help the cause,
"there was nothing ever in the
Boland amendment that could
keep me from asking other peo-
ple to help," the president told
NEWSWEEK and three other
magazines in an interview.
That theory wasn't absurd,
but it reminded some of Richard
Nixon's claims to executive
privilege in the Watergate cri-
sis-and of his later contention
that "when the president does
it, that means it is not illegal."
Sen. Patrick Leahy of Vermont, for one,
said the new stance amounted to "pretend-
ing that the president is not part of the
government ... The president is not above
the law." If his aides believed their actions
were legal, Leahy demanded, why did they
take "the enormous steps they took to hide
what they were doing and even lie about
those activities?"
That raised a point that McFarlane's tes-
timony also underlined: whatever the pres-
ident's liabilities under Boland, his aides
stood exposed on numerous fronts. McFar-
lane said he had always felt the amend-
ment meant what it said; common sense
taught him that the intent of Congress was
that "no one in the government" should
support the contras. Boland aside, McFar-
lane seemed to expose himself and others to
charges of conspiracy and obstruction of
justice; he testified, for instance, that
North had told him after the scandal broke
that there was going to be a "shredding
party"-and that he had not done anything
to prevent it.
Confirming his testimony in earlier
hearings on the scandal, McFarlane also
said he participated in falsifying a chronol-
ogy being assembled in North's office be-
fore that investigation. And in a 1985 letter
drafted by North, McFarlane assured
House Intelligence Committee chairman
Lee Hamilton: "I can state with deep per-
sonal conviction that at no time did I or any
member of the National Security Council
staff violate the letter or the spirit of the
law." Last week McFarlane admitted he
found six documents indicating that North
had in fact crossed the line, and he suggest-
ed that North prepare altered versions.
For all his monotone and evasions,
McFarlane was a compelling figure. He
left an overwhelming impression of sad-
ness, a weary and broken man in the
shards of his career; the honor he was
trying to salvage consisted of protecting
his president and his old friends as well as
he could. He was also trying to stay out of
jail. So he avoided direct admissions of
wrongdoing; when pinned down, he pre-
ferred to say, "I think that's fair" or
"I take your point." He filibustered on
issues from the shortcomings of Congress
to dealing with terrorism. At one point,
under questioning about his failure to
stop North's "shredding party," he flared
sarcastically: "That's right. And I deserve
responsibility and I ought to be prosecut-
ed to the full extent of the law and
sent away."
Still, McFarlane made no bones about
his and his colleagues' broad errors of poli-
cy and judgment. If the goal was right; he
said, "we didn't choose the right instru-
ment to do it. Succinctly put, where I went
wrong was not having the guts to stand up
and tell the president that." And when
Hamilton lectured him eloquently on the
danger to the constitutional process if the
White House deceives Congress, McFar-
lane said softly: "There is no rebuttal."
But the problem goes deeper: as McFar-
lane said himself in his opening statement,
men and women in power must change
their attitudes an behavior. Why, after
all, had McFarlane not told the president
what he thought? "To tell you the truth,"
he said, "probably the reason I didn't is
because if I'd done that, Bill Casey, [former
U.N. ambassador Jeane Kirkpatrick and
[Defense Secretary] Cap Weinberger would
have said I was some kind of commie, you
know." An administration where that
kind of macho bluster passes for e ate is in
deep trouble. And the buck stops with the
boss who permits it.
LARRY MARTZ With RICHARD SANDZA,
ROBERT PARRY, THOMAS M. DEFRANK and
MARGARET GARRARD WARNER in Washington
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Oliver North and His Merry Band
On the trail of `the gang that couldn't shoot straight'
e casting for the Reagan
administration's Iran-con-
tra fiasco was dubious from
the beginning. When the con-
tra-support operation was put
in the hands of the National
Security Council, it fell to Rob-
ert McFarlane.a man with
no covert experience--and his
overly gung-ho aide, Marine
Lt. Col. OliverNorth. North in
turn recruited a motley crew
of ex-agents, mercenaries and
fortune hunters characterized
more by unbounded enthusi-
asm than expertise. "This,"
marveled New Hampshire's
Sen. Warren Rudman, Is
the gang that couldn't shoot
straight." And in truth last
week's congressional testimo-
ny on the scandal revealed an
almost comic element of bum-
bling, amateurism and down-
right incompetence. The testi-
"Sparkplug." Weapons were
"toys," and the despised State
Department was "wimp." Lat-
er, when the mission had ex-
panded to trade arms to Iran
for help in getting hostages
home from Lebanon, North
took three Iranian officials on
a private, late-night tour. of
the White House. It was a
mony showed that "going off
the books" with a privately fi-
nanced foreign policy involves
not only questions of the law,
but of effectiveness.
According to documents
and testimony from the hear-
ings, CIA Director William Ca-
sey memoed McFarlane as
early as March 1984 support-
ing the idea of seeking funds
from third countries and set-
ting up foundations to collect
donations from private U.S.
citizens. North got cracking on
it. Then Gray & Co., a Wash-
ington public-relations firm,
was approached by the con-
tras for help. Although Gray
never took on the contras, it
was a Gray suggestion that
private "proprietary" compa-
nies be formed to handle the
funds and supplies. But, as
North learned, reliable opera-
harmless stroking to persuade
them they were dealing with
truly important people, but it
seems oddly distasteful in ret-
rospect. Maine's Sen. William
Cohen compared it to tours of
the U.S. Embassy in Moscow
allegedly conducted for KGB
agents by Marine guards.
There were moments of
Bundles of cash in the rain: Owen (right) tells his tale
tives to run such delicate busi-
nesses are scarce at best.
North found a can-do head'
man in retired Air Force Maj.
Gen. Richard V. Secord but
had to accept the fact that Se-
cord and several of the asso-
ciates he brought in were
tainted by past contacts with
the rogue CIA agent Edwin -':
Wilson. ? Otherj cruits
rank amateurs, like Robert
Owen, a Gray & Co. employee'
who had been spurned by the
CIA. Still others, like cargo
handler Eugene Hasenfus, -
were aging Vietnam retreads.
The tone was set by North:
hugely energetic, impatient
with delays, boyishly taken
with code names that carried
messages, of their own. North
was "Steelhammer," among
other noms de guerre. Contra
leader Adolfo Calero' Vws';
cloak-and-dagger intrigue.
Owen, the public-relations
man turned courier, told the
committee about converting
thousands of dollars of travel-
er's checks from North's safe
into cash payments for contra
leaders. One transaction took
place on a cold and rainy night
outside the Old Executive Of-
fice Building. Owen waited for
a contra leader to come by in a
car, then handed him a wad of
cash. On at least one occasion
there was so much money to
launder that Owen enlisted
then State Department aide
Johnathan Miller to help cash
the checks. That tidbit led
Miller, who had since moved
on to the White House as an
aide, to resign last week.
Lost millions: The foul-ups
were both minor and major.
Once North ordered some mil-
itary maps for Owen to sneak
to the contras in Nicaragua;
they arrived mounted on huge
panels of poster board. Even
more embarrassing was the
sultan of Brunei's lost $10 mil-
lion, which vanished immedi-
ately after he tried to deposit
it for the contras in one
of North's Credit Suisse ac-
counts. Somebody garbled the
number of the secret account
and the. money was mistaken-
ly wired to the account of
a Geneva businessman, who
used it to buy a certificate
of deposit. The funds, plus
$253,000 in interest, are ex-
pected to go back to the sultan.
The sloppy work extended
to the highest levels. McFar-
lane testified that there was
no real policy discussion when
top officials approved an abor-
tive plan to pay $2 million in
ransom for some of the hos-
tages. And on the crucial trip
to Teheran in May. 1986,
McFarlane testified, the U.S.
group had not nailed down
who would be negotiating with
it or even that hostages would
be released in exchange for the
arms. "So much time was
spent on secrecy," said Cohen,
"that there was little time for
competence."
RICHARD SANDZA and
DAVID NEWELL in Washington
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