'SHADOW' OPERATIONS TO BE EXAMINED

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00901R000600400001-0
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 19, 2016
• Document Release Date: December 12, 2005
• Sequence Number: 1
• Publication Date: December 23, 1986
• Content Type: NSPR

ON ARMLE roved For Release 2006/dWffP fIAAf OP 1-00901 R000600400001-0
23 December 1986
`Shadow' operations to be examined
Former mffitary, intelligence agents
u in Iran-contra role By Ben Bradlee Jr.
tlaI'Illtlg P P Globe Staff
As the Iran arms-contra scan- Scott noted that these men
dal continues to unfold, at least
we
e
d
t
some congressional committees
will closely examine the so-called
"shadow network" of former mili-
tary and Intelligence operatives
who were instrumental in aiding
the contras and selling arms to
Iran, as well as probe allegations
that the contra supply effort was
sustained by profits from drug
trafficking.
To many observers, one of the
most alarming aspects are the ties
between two of the affair's central
figures, a retired Air Force major
general. Richard V. Secord, and
an Iranian business partner, Al-
bert Hakim, to former military in-
telligence operatives called "cow-
boys" by some Capitol Hill
sources.
These figures are personified
by Edwin Wilson, the renegade
former CIA agent who is now serv-
ing a lengthy federal prison term
for having shipped weaponry to
Libya's Moammar Khadafy in the
1970s.
According to congressional and
private sources, news reports and
court documents, since the mid-
1970s. Wilson and other former
CIA agents Including Theodore
Shackley, Thomas Clines and
Ralph Quintero, associated with
one another and Secord and Ha-
kim through a web of interlocking
corporations that have reportedly
played key roles in both the contra
supply effort and Iranian arms
sales.
And even before corporate rela-
tions were forged,. most of these
former operatives had worked
closely with one another, their ac-
tivities going back to the early
1960s In intelligence operations
around the anti-Castro movement
In Florida, and later, in Southeast
Asia and Iran.
Some analysts, including Peter
Dale Scott, a professor at the Uni-
versity of California at Berkeley,
said freelancing by Wilson and
the others is rooted in the CIA's
purges of hundreds of covert oper-
atives in the mid-1970s.
r
on g
oo
erms with foreign
CIA contacts, and after the mass
i firings, were forced to seek em-
ployment through those contacts.
And as clandestine operations fell
more and more out of favor at
home, some former spies began to
resort to more questionable kinds
of activities, Scott and others said.
But under President Reagan,
the clandestine services were re-
born, as evidenced by a budget
that has grown faster than the
Pentagon's. The old intelligence
hands were put to work by an ad-
ministration trying to bolster an-
ticommunist insurgencies. In
some cases, the operations were
conducted under private auspices
to give the government deniabi-
lity.
Turned to record
In putting together a private
contra supply network after Con-
gress barred US aid in 1984, and,
later, to facilitate the Iran arms
deal, Lt. Col. Oliver North, the
fired National Security Council
aide who is at the heart of the
Iran-contra affair, turned to Se-
cord and other members of this
private network.
[In a effort to win the release of
US hostages, Secord accompanied
North on a clandestine trip to Bei-
rut on Oct. 31, just days before the
Iran-contra arms connection was
publicly revealed, the Washington
Post reported Saturday, J
"The administration was faced
with the question of how to keep
the contras alive, and with the
CIA out of the game, they gave Ol-
lie the portfolio," a congressional
aide said.
"The NSC Is better shielded
than the agency," the aide went
on, "but they don't have any mon-
ey or operatives. So they went to
the 'cowboys,' the former opera-
tives, who are looking for work,
who have relations with other
governments, who know how to
get things done, and if they make
a buck on the side, that's OK."
But if North saw a certain logic
to this arrangement, many ob-
servers said he erred seriously in
picking people for the assign-
ments in Central America and
Iran.
"It surprises me that anyone
could be so naive as to hire some-
one with such a close association
to Edwin P. Wilson, and I think it
was an act of irresponsibility to
bring people like that into govern-
ment employment," said Stans-
field Turner, who was CIA director
from 1977 to 1981. Turner was re-
ferring to Shackley, Clines and
others.
Because of their ties to Wilson,
Turner removed Shackley as the
agency's No. 2 man in covert oper-
ations and reassigned Clines. See-
ing no future under Turner, both
men resigned from the agency
soon afterward.
Meanwhile, increasing atten-
tion is being given to charges
raised in a pending federal lawsuit
in Miami. That suit links the con-
tra supply operation to the Iran-
Ian arms transfer by detailing a
complex and bizarre series of
crimes allegedly committed by the
Wilson-Shackley group over 20
years.
Suit's charges
The suit charges that members
of the group, despairing about an
isolationist drift in Washington
that was preventing the United
States from its role as leader of the
free world, trafficked in arms and
narcotics to support anticommun-
ist insurgency around the world.
The charges are spelled out in a
95-page affidavit filed last week in
a $23.8 million civil suit brought
by Tony Avirgan and Martha
Honey, a husband-and-wife team
of freelance journalists, against
two dozen contra leaders and sev-
eral former CIA and military offi-
cials,
These figures, according to the
lawsuit, include Shackley, Clines,
Secord, Hakim, Quintero and re-
tired Maj. Gen. John Singlaub, for-
mer chairman of the World Anti-
Communist League, who is also
active in assisting the contras.
The defendants have denied
the allegations and at a hearing
last Monday in Miami, their law-
yers characterized the charges as
nothing more than "malicious
gossip."
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 The lawsuit, M yr t$f lltReleases2008/02/O1ie CWRD 090flk 6M461 1109 said Wil-
a two-year invest gaticin. stems Shackley, Clines, Wilson, Secord son a once offered to supply the
from the 1984 bombirwr of a press and Hakim had created a number United States with a Soviet MIG-
conference corporations and subsidiaries 25 fighter plane from the Libyan
leader Eden Pastora held a in Costa the
Rica contra around the world to conceal their Air Force.
in leader which fipersons Cres killed rations, which would later in- Whatever the truth about Wil-
and two five i dozen Injured, , Inccludinndude aid to the contras and sell- son and his allegiances, evidence
wo Including Avirgan. ing arms to Iran. that he committed a string of felo-
nies is overwhelming, and under
Pastora, who led an indepen- Swiss-based those circumstances, that for
dent anti-Nicaraguan group along The suit says some of these cor- North and the National Security
the country's southern border, porations were based in Switzer- Council would turn to turn to this
was allegedly targeted for refused assassi-
to land, including Lake Resources group to carry out sensitive as-
nation because he had
take e with a contra fac- e Inc., into which Secord and North signments on behalf of the nation,
t allegedly funneled profits from the continues to amaze many.
Conhe arms rms e considered a puppet of the Iran arms sales, Stanford Tech- "I'm not in a proper position to
CIA. nology Trading Group Inc., and say if it's a proper way to conduct
dants with The suit responsibility the defen-
for r the the Compagnie de Services Fidu- foreign policy, but it is certainly
bombing CSF Investments Ltd. and stupid tradecraft," said Lawrence
spiracy as part art a larger con- Udall Research Corp. were based Barcella, the lead
iracy to sell cocaine in the Unit- prosecutor in
in Central America, and others, the Wilson trials, "During the tri-
susupStates to lies for raise money and other like the Egyptian-American als, many of these people were
It charges that Shackley, while contras. Transport Service Co. and the linked together in a not very flat-
overseeing the e CIA's secret war ar Orca Supply Co., in the United tering way, and to use them again
Laos in secret seems ill-advised. To the extent
deputy, h Clines, the m, , had along with h in
his s
t All these companies are figur- that you use the identity of one, a
into an alliance ing In the investigation into the reporter only has to go to the
tribesmen and helped with a entered
Hmong faction n Iran-contra affair. morgue-file to learn the identity of
gain in a mandonopoly h on opium el Now that Wilson's name has others. They are part of an infa-
traf-
b"" that he was acting on behalf of
in 1975, Shackley, Clines and oth-
ers the CIA - a claim he was prevent-
Hmong began skimming money from she was
Hmong heroin profits and pilfer- eh for r national on l security
court.
reasons from ing US weapons in Vietnam as Few doubt that Wilson abused
d
part of an unauthorized effort lat-
er thtoe wage anticommunist insur- or or misrepresented oubt th profiteering in his the CIA A name links
gency Chile, Iran before the while ra u shah, c Libya and nd now N icaca mains patriotism. But insistent he that he was reportedly re-
still
raga, according to the suit. funneling intelligence information
In 19
both Shackley and to the agency, and that he re-
clines were re out of the e CIA, and mains a spy left out in the cold.
ocmostgh the Secord network was wstill ent in private,
the e Air Air Shackley and Clines were nev-
Force er compelled to testify at Wilson's
progasramsd director r of international trials, and Secord, after acknowl-
ro.
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 Approv %1' 4 2006/02/07NILIA P M6 901 R000600400001-0
ON PAGE 13.i.L1 22 December 1986
Former U. S. In teffig6nce Aides Ask.'
Was a Lesson of the 70's Forgotten?
By CHARLES MOHR
Speeul to The New York Times
WASHINGTON, Dec. 21 - Whether
Lieut. Col. Oliver L. North, when he
was a member of the National Security
Council staff, acted on his own to divert
money from the Iran arms sale to as-
sist Nicaraguan rebels intrigues sev-
eral former officials and practioners of
the craft of intelligence.
But if Colonel North did not act on his
own, these former officials and others
say, they are mystified as to why his
superiors apparently entrusted him
with such functions as evaluating, plan-
ning, managing, financing and conceal-
ing the existence of the diversion to the
contras and other covert actions.
The Iran arms sale, these former of-
ficials say, reinforces old lessons about
the hazards of covert intelligence ac-
tions and underlines a newer, lesson
about entrusting the direction and ex-
ecution of secret operations to ama-
qeurs and deputized private citizens.
Breaking Protective Barriers
The former officials say White House
officials may have forgotten or misun-
derstood a series of mishaps that crip-
pled United States intelligence circles
in the 1970's.
Several of the former officials said
one of the more obvious mistakes was a
try to avoid legal and customary prac-
tices of notifying Congress of covert ac-
tions. But they said an even graver
criticism would be that the laws and
Presidential directives on intelligence
activities enacted in the Ford and Car-
ter Administrations, and in theory car-
ried on by President Reagan, appar-
ently were ignored or failed in practice.
The intent of these mechanisms was
to insure Presidential accountability
for covert operations, said Morton
Halperin, a former member of the Na-
tional Security Council staff and an of-
ficial of the American Civil Liberties
Union who worked with the Senate and
House select committees on intelli-
gence to write new legislation in 1980.
"A major motive was to get rid of the
whole concept of Presidential deniabil-
ity," Mr. Halperin said, "to make sure
that covert operations could not be un-
dertaken without the President's
knowledge and informed approval."
Kenneth Bass, the Department of
Justice specialist on intelligence law in
the Carter Administration, agreed,
saying: "People were sick of argu-
ments over whether it was Bobby Ken-
nedy or Jack Kennedy who approved
trying to poison Castro. The aim was to
insure Presidential accountability."
1 Maintaining 'On-Line' Control
Stansfield Turner, the Director of
entral Intelligence in the Carter Ad-
inistratjllppadvet t3 e$
said the procedures to prevent the initi-
ation of covert actions without Presi-
dential knowledge "were a very impor-
tant concept."
He added, "The kind of off-line
operations permitted in the Reagan
Administration are bound to lead to
trouble."
The C.I.A. has always used non-Gov-
ernment personnel and "outside as-
sets." The distinction of Colonel
North's case, experts said, is that in the
past the "off-line operators" were not
used to manage, direct and evaluate
covert operations.
"There is nothing unusual or wrong
in contracting with an international
arms dealer to furnish a given supply
of weapons for a project," said Admi-
ral Turner, who is believed to have
done just that to assist Afghan rebels
and in some other cases. "But there is
no reason the arms dealer has to know
the destination and the group the arms
are being delivered to."
Richard Moe, the chief of staff for
Vice President Walter F. Mondale, said
it appeared that the Reagan Adminis-
tration had made the mistake of
"privatizing covert action, diplomacy
and even war."
Need for a Political Base
In its final report in 1976 of its inves-
tigations into past intelligence scan-
dals the Senate Select Committee to
Study Governmental Operations with
Respect to Intelligence Activities,"
popularly known as the Church com-
mittee, said:
"The committee has found that when
covert operations have been consistent
with, and in tactical support of, policies
which have emerged from a national
debate and the established processes of
government, these operations have
tended to be a success."
That conclusion is still embraced as
true by almost all those familiar with
the history of covert operations. said,
"In other words," said one former in-
telligence operator, "you can get away
with spooky business if it advances a
cause the country as a whole is agreed
on and the Congress approves."
Secrecy Taken Too Far
The outside critics uniformly as-
sumed that a primary reason the White
House tried to conceal the Iran arms
sale and the diversion of proceeds to
the Nicaraguan rebels was that it knew
it did not have and could not obtain the
approval of Congress, or even of senior
Cabinet members.
One expert said that while it was dif-
ficult enough to keep a more orthodox
covert action secret, the Reagan White
House apparently compounded its diffi-
culties by trying to keep the Depart-
ments of State and Defense and at least
parts of the C.I.A. in the dark as well.
2008/01201Y: LIDAt91 X 111
Turner said. "Colonel North appar-
ently got in trouble, first crack out of
the box, at the Lisbon airport, and had
to turn to the C.I.A. to get him out of
trouble."
Admiral Turner seemed to be allud-
ing to reported testimony about the
second arms shipment, of Hawk an-
tiaircraft missile components, in
November 1985. The shipment went as
far as Portugal, but then no aircraft
could be found to transship the parts to
Iran. According to sources who heard
the testimony about the problem, Colo-
nel North had to telephone a senior
C.I.A. official, Duane Clarridge, who
put Colonel North in touch with an air
charter company previously owned
and used by the C.I.A.
That event reportedly caused John
McMahon, who was then deputy direc-
tor of the C.I.A. but who has since re-
tired, to become angry and to insist
that established procedures be fol-
lowed for subsequent arms shipments
by obtaining a written "intelligence
finding" from the President.
Tinkering With the Law
The outside critics regard the White
House's apparent disregard or modi-
fication of the "finding" procedure as
one of the most fundamental mistakes
of the Iran arms sale case.
The finding concept became law in'
the so-called Hughes-Ryan Act of 1974
and was recodified in the Intelligence
Act of 1980. In a finding authorizing a
covert action, the President is required
to certify that the action is "important
to national security," a protection
against frivolous acts. The require- i
ment for a Presidential finding is in-
tended to insure that covert acts can-
not be concealed from the President
himself.
Lastly, the preparation of drafts of a
written finding is intended to insure
that the practicality and desirability of
the contemplated covert action will be
reviewed by responsible officials from
several departments of Government.
"Restraint is the most important ,
function of the President's advisers."
Mr. Moe said, "There is so much than
can and often does go wrong with cov-
ert actions."
But another former official asserted
that restraint "is just what the White
House people apparently didn't want."
Their motive for secrecy was not only
to conceal this from Congress but from
George Shultz," who is Secretary of
State and who disapproved of the plan.
'Gentleman's Agreement' Broken
By law, the Presidential finding ap-
proving a covert action is to be com-
municated by the Director of Central
Intelligence to the two intelligence
committees of Congress at some time.
The law permits delay in some cir-
gdap600r>Jrding to experts,
Con huea
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almost every C.I.A. director has made
an extra-legal "gentleman's agree-
ment" with the oversight committees
as to when and how the director will in-
form Congress of covert actions.
Trail of arel. Promises
Admiral Turner, according to a for-
mer White House official, had an
agreement to inform the committees
within 48 hours of the time President
Carter signed a finding. He did not do
this when Mr. Carter signed a finding
approving the rescue of American citi-
zens harbored in Iran by the Canadian
Embassy. But his failure to do so
caused no controversy because it was
an action in support of a popularly ac-
cepted cause, and one that risked no
major embarrassment if it were ex-
posed.
William J. Casey, the current C.I.A.
chief, also had an "ad hoc, common-
sense gentleman's agreement, even
though it was forced out of him, with
the committees," an intelligence spe-
cialist said.
However, according to several ex-
perts Mr. Casey had repeatedly and
seriously violated the agreement long
before the present controversy.
For instance, in April 1984 Senator
Barry Goldwater, then chairman of the
Senate Intelligence Committee, sent
Mr. Casey an angry letter berating the
director for not clearly informing the
committee of a program to mine Nica-
raguan harbors.
Mr. Casey apologized in writing and,
reportedly, made a new gentleman's
agreement. But, according to recent
testimony, he urged that the finding ap-
proving the Iran arms sale not be re-
ported to the committees.
Describing those past controversies
in his 1985 book on the C.I.A., "Secrecy
and Democracy," Admiral Turner
wrote of the Reagan Administration,
"The Administration's willingness re-
peatedly to flout the Congress reflected
a view that oversight was an impedi:
ment rather than a necessity for good
intelligence in a society like ours."
Sloppy Intelligence Work
Some of the critics of the way the
Iran operation was conducted said that
the use of off-line management and
deputized private individuals in man-
agement roles goes beyond bad politics
or borderline illegality. They say it also
makes for sloppy intelligence work.
Some, for instance, were shocked
that Colonel North and the former na-
tional security adviser, Robert C.
McFarlane, who had the highest level
of national security secrecy clearance,
would go personally to Teheran where
they conceivably could have been de-
tained, made hostage and interrogated
or even tortured about United States
secrets.
Representative George E. Brown Jr.,
Democrat of California and a member
of the House Intelligence Committee,
said that although it was unlikely that
the Iranian Government would have
arrested the two men, it was probably
"highly imprudent" of them to have
gone to Iran.
Other manifestations of amateurism
were pointed out by several experts.
One involved the supply flights to con-
tra forces within Nicaragua that led to
the crash of an aircraft, the capture of
Eugene Hausenfus and the death of the
rest of the crew. The Administration
has denied that it was directly involved
in the flights, but the Assistant Secre-
tary of State for Inter-American Af-
fairs, Elliott Abrams, publicly ap-
plauded the program.
A former intelligence official said,
"Real professionals would have had an
extraction program to rescue crews
once they ended up on the ground."
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 Approved foF,P t
06102107
:CIA-RDP91-009018000600400001-0
ON PAGE
USA TODAY
19 December 1986
n
Aide may have to testify i
a
Casey's stead
By Adell Crowe
and Sam Meddis
USA TODAY
than in a congressional briefing room."
Investigators, in the meantime,
could call Casey's deputy, Robert
Gates, who is running the agency in the"
surgical oncology at Baltimore's Johns
Hopkins University Hospital, said
brain lymphomas often are sensitive to
radiation or drug therapy, some "just
melt away under treatment."
Casey suffered two mild brain sei-
zures this week, which doctors say are
often the first signals of brain tumors
in an otherwise healthy person.
But Dr. Victor Levin, professor of
neuro-oncology at the University of
California Medical School, San Fran-
cisco, said depending on where the tu-
mor is located, Casey's memory could
have been affected by the tumor.
Casey testified twice last week in
private sessions with House members
probing the scandal, but was admitted
to the hospital shortly before he was to
appear before a Senate panel.
Surgeons who removed a cancerous spy chiefs absence, Turner said. Gates
brain tumor from CIA Director Wil- would probably already know "a good
liam Casey expect him to "resume his deal" of what Casey knows about the
normal activities" - while a former Iran arms deal, Turner said.
CIA chief said the probe of the Iran- NBC News, quoting senior U.S. ofd-
contra affair can survive Casey's tem-
porary absence.
After five hours of surgery at
Georgetown University Hospital in
Washington, D.C., surgeons said a pre-
liminary examination of the tumor re-
vealed a "lymphoma (a cancerous
growth) which appears treatable."
Former CIA Director Stanfield
Turner said Casey's illness should not
bar him from testifying for House and
Senate investigators in the future: "It
might have to be in a hospital rather
Cu dl
cials, reported Casey's wife does not
want him to return to the agency.
One big difference if Casey departs:
The CIA may no longer enjoy the close
relationship with President Reagan
that was provided by Casey, 73, Rea-
gan's 1980 campaign manager.
Casey's surgeons were not forthcom-
ing with details on the surgery, but ex-
perts not connected with the case said
the type of tumor is rare, but generally
receptive to treatment.
Dr. Henry Brem, director of neuro-
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 ARTICLE AP proved For RigIpikge;?QQ O2Q7I;FCIARDP9i11OOL9O1R000600400001-0
ON PAGE F December 1956
Reagan kept a loose rein
Led to staff overreaching, Turner says
By Warren Richey
Staff writer of The Christian Science Monitor
beved that an underlying cause of the
Iran-contra affair was President Reagan's
reluctance to become involved in the day-
to-day details of special operations orga-
nized by staff members working in his
National Security Council.
"The management style of this Presi-
dent is such that he could have encour-
aged people [under him] to feel that he
didn't want to know (the specifics of their
Washington
President Reagan's "hands off"
management style may have encour-
aged White House staff members to
take the initiative in setting up the
secret Iran-contra connection, accord-
ing to a former director of the Central
Intelligence Agency.
Stanfield Turner, who served as
CIA director during the Carter admin-
istration, also questioned the legality
of a 'reported oral presidential na-
tional-security "finding" said to have
authorized secret arms sales to Iran via
Israel in 1985.
Mr. Turner warned, however, of the
dangers of an overreaction to the Iran-
contra affair in Congress that might
lead to severe restrictions on the Presi-
dent's ability to conduct covert activi-
ties in the future.
In a breakfast meeting with report-
ers Tuesday, Mr. Turner said he be-
Jan. 17. That finding autho-
razed secret US shipments
of arms to Iran.
0 The issue is a critical one
m for Israeli officials who
maintain that no US arms
were shipped to Iran from
Israel in 1985 without prior
Z explicit US authorization.
D US and Israeli officials and
1? assorted middlemen were
Tumor doubts legality
of oral security findings
ficials have said they had no prior knowl-
edge of the secret Iran-contra connection.
The effort to divert the profits of Iran
arms sales to rebels fighting the Nicara-
guan government was allegedly organized
and run by Colonel North, a mid-level
NSC staff member.
Turner was critical of top members of
the Reagan administration for "running
for cover and passing the buck to every-
one else" in the current crisis. "It is show-
ing a neglect of responsibility," Turner
said. He added that many of Reagan's
senior advisers - including White House
chief of staff Donald T. Regan - should be
fired or step down.
"I don't see how the President can
reconstitute public confidence with these
activities). Not necessarily
because he wanted to be
able to deny it, but because
that was not a level of
detail that he normally
wanted to get into," Turner
said.
"[Lt. Col. Oliver] North
was encouraged by the
President, his chief of staff,
and [national-security ad-
viser John M.) Poindexter
to go out there and really
support these contras, even
at the risk of flouting a
law." he added.
President Reagan and
other top administration of-
same people," he said.
The former CIA director also ques-
tioned the legality of a reported 1985
presidential "finding" that orally autho-
rized secret Israeli shipments of US arms
to Iran.
According to former national-security
adviser Robert McFarlane, President Rea-
gan made an oral "finding" during a con-
versation with Mr. McFarlane in mid-
1985. The White House denies that any
finding was made until a formal written
finding was signed by the President on
involved in various aspects
of the secret Iran arms plan
during at least the last six
months of 1985. It is un-
clear under what legal au-
thority they operated.
Turner said that, in his
view, oral findings by a president were
not a legal means to initiate a covert
operation. But others disagree.
Daniel B. Silver, former general coun-
sel of the CIA and the National Security
Agency, says that there is nothing in the
wording of the law that requires that a
presidential finding be written. He notes
that all that is required is that the presi-
dent determine that the proposed covert
action be important to US national secu-
rity. "The statute only requires that the
president make such a finding, not that he
write it down," Mr. Silver said.
He noted, however, that standard
practice in the White House has been that
national-security findings are recorded in
writing and signed by Reagan.
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