Q&A KHASHOGGI SAYS HE WARNED AGAINST ARMS FOR HOSTAGES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00587R000100240011-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: February 24, 2011
• Sequence Number: 11
• Publication Date: March 19, 1987
• Content Type: OPEN SOURCE

STAT
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ARTICLE APP,FAR
ON PAGE
WASHINGTON TIMES
19 March 1987
Ifhashoggi says he warneu
against arms for hostages
~,~ Times Editor-in-Chief Arnaud de Borchgrave. Follow-
ing are excerpts from t~ieir discussion.
Q: The New York Times has quoted you as saying
you duped U.S. officials during the Iran arms sales
and FB[ investigators afterward.
~~
A: That is total nonsense. I offered to cooperate
voluntarily with all the relevant and competent in-
vestigating bodies and agencies -from the Tower
Commission to the FBI. Kenneth Bialkin, who is my
lawyer, is the former president of all the major Jew-
ishorganizations in the U.S., and while he was mak-
ing,the necessary arrangements with the FBI, the
FBI was also negotiating a hostile operation against
me with Roland (Tin~)_Rowland, a man I have been
doing business with for many years. Don't ask me
why, because it is still a mystery to me, but for some
reason, Rowland, who apparently has a special re-
lationship with U.S. intelligence agencies, used a $2.5
million promissory note I have with him, to mount a
major operation to try to neutralize me. Tiny and I
had a series of deals together in Africa and else-
where that would have earned me about 550 million
in commisions if the contracts had been signed. Dur-
ingthis process, I asked Tiny if he would lend me $8
million. He gave me 54 million against my DC-9 as
collateral, 51 million against my ranch in Kenya and
52.5 million as a personal loan. with the under-
standing that all this would be repaid from revenues.
Q: You mean from the Iran deal?
A: No, from the African ventures, and if these did
not materialize I would reimburse him. Which is fair
enough. Suddenly, overnight, Tiny turned against
me after the [ran story broke. So someone, either in
the (:IA or FBI, must have a special relationship with.
him. Fora $2.5 million loan, that he had not even
called in, he suddenly attaches my DC-8, my Boeing
'27, my DC-9. my t$30 million) New York (Fifth Ave-
nue)duplex, etcetera. To spend over 51 million in law
viers fees to collect a loan from along-time business
partner simply did not add up.
Q: The FBI was involved in this too?
A: Yes, they sent 20 FBI agents to Paris for the op-
eration. Imanaged to get the DC-8 released quickly
as there was no claim against it. Ditto with the 727
but, the DC-9 was kept as it carried a mortgage of $4
million. But Bialkin, my lawyer, informed me that the
FBI was going to raid the plane while it was momen-
tarily in Tiny Rowland's hands. A French judge had
issued a Court order making it possible for the 20
FB[ agents, who had been sitting in hotels in Paris
waiting, to move in on the DC-8, accompanied by 30
French police with automatic weapons. They
searched everything from top to bottom looking for
nonexistent documents. Needless to say they found
nothing -except for toilet paper -and left empty-
handed.
Then I got a call from the FBI fellow who was in
charge of the investigation, who called from Ashraf
~iarwan's office (the late President Nasser's Bon-
in-law who works for Tiny Rowland). First Ashraf ex-
plained who was about to talk to me and would I
Adnan Khashoggi was interviewed by Washington
please help him locate my papers. I told him that
Bialkin was already in touch with his FBI bosses and
to deal through him. Ashraf begged me to at least say
a taw words to him. So I said put him on the line and
I said, "How can you justify spending taxpayers
money to do such stupid things when you had already
been offered total openness by my lawyers? And who
told you that I keep files on my plane? Do you think
I'm crazy? My files are all buried in the seven hills
area of Saudi Arabia:' I was joking about the seven
hills, of course, but he apparently took it seriously.
"Well, Mr. Khashoggi;' the FBI team leader re-
plied, "we just wanted to know the truth:' And I inter-
rupted him and said, "You just want to take America
down the drain by the way you behave: "'No;' he re-
plied, "you're taking America down the drain:' So, I
interrupted again, "We're both taking America down
the drain, and good for America. Goodbye:'
[ then called Bialkin and said, "There's a conspir-
acy going on. You told me you talked to the FBI and
you didn't know this was going on. Nobody knew
about this process. It was all cooked under the table.
Again, another North-type covert operation. The spe-
cial counsel, Mr. Walsh, didn't even know about the
FBI operation in Paris. They took a court order from
the District of Columbia, acting under orders from
the Justice Department. What on earth did they
expect to find? What did Tiny Rowland lead them to
believe? In any event, this ludicrous fishing expedi-
tion cost the U.S. taxpayer a minimum of $200,000 -
without exaggeration: "Travel, hotel, etcetera.
Q: There are a number of things I do not under-
stand. When you say you introduced Ghorbanifar to
the Israelis, wasn't he already working for both Mos-
sad and Savak in the days of the shah - at least that's
what former Ambassador Ardeshir Zahedi told me.
He worked for an Iranian shipping company that ac-
tually belonged to the Israelis.
A: Nimrodi, who was the Israeli military attache in
Tehran throughout the '70s, didn't know him. I intro-
duced them. I checked Ghorbanifar out very thor-
oughly. After all, I have a lot to lose. More than he
has. He also is a man who has made money. He's con-
nected businessman.
Q: Who once worked with the CIA?
A: You have to accept that there are people, like
me, who are well-connected with all sorts of people
all over the world, including the intelligence services
of many countries. I am neither a CIA agent nor a
Saudi agent, but I'm welt-connected with both sides.
Q: In other words you trade information, a sort of
broker of intelligence?
A: When I first met Ghorbanifar, and he told me
about the possibilities of an opening for the U.S. in
Iran, I went straight to King Fahd to tell him about it.
Q: You mean what Ghorbanifar told you about the
three Iranian factions vying for power in the post-
Khomeini period?
A: Yes, and King Fahd was afraid that it could be a
dangerous trap to undermine.Saudi Arabia and get it
involved in the internal affairs of Iran.
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Q: A bt of people say that Khashoggi is just trying
to protect the Saudi royal family but was acting on
behalf of the king all along.
A: That is nonsense, and I can prove it. But the
king was clever. He didn't want any problems with an
unpredictable neighbor who old blast Saudi oil
Fields.
Q: Besides the Iranians have other means of com-
municationwith the Saudls?
A: They have and have used them -including the
Iranian minister of information. But King Fahd ad-
vised me to share whatever I had heard with Pres-
ident Mubarak of Egypt and King Hussein of Jordan,
who are more closely involved with Iraq, and get
their reaction. When I saw Mubarak, he called in his
Mubarak (secret service) chief and I sat with him.
Which I did. Ghorbanifar was very persuasive
and the Egyptians asked for a week to think it over.
When I didn't hear back, I checked again and the Mu-
barak chief said, "Look, Adnan, this guy's unreliable:'
I asked how he'd checked this out and was told "with
the CIA:' I couldn't believe these stupid Egyptians
would rely solely on the CIAs say-so. Why not check
with the Iraqis or other sources?
Q: What was your next move?
A: As I went to the Israelis and asked to meet with
my friend Shimon Peres when he was in New York. I
figured the only ones who could give me an accurate
fix ?,vould be the Mossad. I explained everything to
Peres and he was very excited. All I asked is that
Mossad check out Ghorbanifar. If he's good, I said to
Peres, then I want the Americans to be informed
through Israeli channels. Peres said, "Leave it to me:'
Believe it or not, -ES hours later, Schwimmer was at
my door with Nimrodi and they said they wanted to
meet with Ghorbanifar. We set up the meeting in Lon-
don. They listened to his story, the relationships he
claimed to have in Tehran, what was going on be-
tween the various Iranian factions, in short the whole
story. Two days later they got back to me and said,
"Your guy and his story check out:'
But to prove his bona fides, they asked me to ask
him to bring several of the mullahs he claimed to
know well out of Iran to meet with them in Europe.
The guys who were the linchpins to Ghorbanifar's
plan. So Ghorbanifar brought three important mul-
lahs to the meeting. Kimche also came from Israel,
along with Schwimmer. Nimrodi and another guy
from Mossad. This was in Hamburg. The Iranian
mullahs thought they were all Americans. I have all
the minutes of that meeting. Everything went so
beautifully, it was all so crystal clear, the mullahs
were so eager to cooperate with the U.S. in particular
and the Western world in general, that I thought I
should indicate that at least one of them was an Is-
raeli - and I told the mullahs. "By the way, Mr. Kim-
che here, is the director general of the Israeli For-
eign lViinistry." They did not seem shocked
One of the mullahs said, "The Western world is one
pot and whoever can open that window is OK with
us:' Simple mullah language. And when we came out
of that meeting, you should have seen the eyes of the
Israelis. They were so excited, mixing Hebrew and
English you could tell they thought they were already
back in the days of the shah. I started getting ner-
vous, so I wrote a long report to Bud McFarlane, the
one he claimed he never read, and sent a copy to
Peres, who was then still prime minister, to Mubarak,
to all those I had already talked to, just to cover my-
self.
A few days later I called McFarlane and spoke to
one of his assistants to make sure he understood that
the Israelis were completely reassured by Ghor-
banifarand his high-level Iranian contacts. This was
all during the first week of July '85. As I expected,
Schwimmer and Kimche flew over to see McFarlane
and McFarlane informed the president. Everything
went very Fast.
Q: With good reason since the Israelis were anx-
ious to resume arms sales to [ran which had been
interrupted under U.S.pressure.
A: But those were Israeli-made weapons, not
American hardware.
Q: About $1 billion in Israeli arms to Iran since
Khomeini overthrew the shah, correct?
A: That's right. But I was never involved in these
transactions myself. Anyway, McFarlane concluded
the Israelis would be a good cover for the operation
and told the Israelis to supply the equipment to Iran
on the understanding the U.S. would replace what-
ever was shipped.
Q: Was Michael Ledeen involved at this point?
A: I had never met him at this point. We met later
in the operation.
Q: But Ledeen says he was the pointman for the
exploratory opening to Iran, that he went to see Peres
to determine whether Israel could recommend a
valid Iranian interlocutor and that the Israelis then
produced Ghorbanifar.
A: Ledeen came in later. The initiative came from
me and Ghorbanifar, who had originally contacted
me, as I have already explained. I had the key guy -
Ghorbanifar. The Israelis subsequently delivered
Ghorbanifar to Ledeen. There was no reason
why Ledeen should have known about the real origins
of the whole affair.... But the most important thing
that happened is that the Israelis asked Ghorbanifar
to come to Israel, which he did.
Q: With the permission of the Iranian government?
A: There's no doubt in my mind about that. He's
not that gutsy. He wouldn't take such a risk without
permission. Otherwise, he might not have come out.
He might have been kept as a hostage against the oth-
ers. He spent five days in Israel, and they impressed
the hell out of him. He was overwhelmed by Israeli
capabilities. From Israel, he went straight back to
Tehran to report.
Q: Directly, non-stop?
A: On a charter via Crete.
Q: Did you know what was really going on at that
point?
A: On a need-to-know basis, not the whole story. I
was out of the picture as a whole for about two
months after that. Suddenly, Ghorbanifar came to see
me and said everything was going well, that the
Americans were going to supply Iran with TOW mis-
siles, a~3 they asked us to help them with Buckley,
the CIF, iiustage. There was no mention of hostages
until then and the matter didn't even cross my mind
until then. So I asked, "How much are the Americans
going to give you?" Ahd Ghorbanifar replied $5 mil-
lion worth of TOWS, through the Israelis. Even
though he had mentioned Buckley, I still did not see it
as arms for hostages.
My mind was concentrated on something else
Ghorbanifar told me -part of the $5 million was to
be used to strengthen one of the pro-Western factions
in the Iranian regime. This made sense to me. "But
Adnan;' he said to me, "they don't trust us, and we
don't trust them. The Israelis will not ship unless
they get money up front. And the Iranians will not
pay the money in advance:'
So I said if it's a test they want, let's start with $1
million, and I'll put up the money. Ghorbanifar went
back to his people, and they accepted. But the Israelis
wanted the balance of $4 million.
So I asked Schwimmer to come and see me. I told
him I was willing to take a risk on $I million -but
Z
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now another $4 million? "What are you guys cook-
. ing?" I asked Schwimmer. And this was the first time
I heard about mutual tests of good faith involving
the release of hostages, on the one hand, and to see
who's who on the Iranian side with these partial ship-
ments of arms. So they pI~`nlia'd token shipments,
and I was to be the "bridge" banker.
I told Schwimmer, "I guarantee the Iranians be-
cause Iknow Ghorbanifar and his Iranian friends
will not cheat me, but you guys might never ship:'
Schwimmer then gave me his word, and I said, "OK. I
trust you. too." I gave them the $4 million check. But
Buckley, as we later discovered, was already dead. So
they released a priest instead.
Now three months pass and I hear nothing from
Schwimmer. I called Bialkin, my lawyer, Schwimmer,
Nimrodi, etcetera.
Q: Because you always kept Bialkin in the picture.
A: Of course. I wanted to make sure the American
Jewish side knew what was going on. But my friend
Ghorbanifar had disappeared. 1~iessages were not re-
turned. So I went off on my boat and forgot about it.
Suddenly, at Christmas time, in 1985, Ghorbanifar ap-
peared and said, "iVly God, my God. Problems, many
problems:' He explained the Israelis had shipped the
TOWS. taken the $5 million and gotten replacements
from the Americans for free. So the Israelis had
pocketed $5 million. Nothing for our friends in Iran
who had been led to believe they would be getting
a chunk of it as seed money for the pro-Western fac-
tion.
Q: Who in Israel took the money?
A: No way of knowing. Ghorbanifar said that the
Israelis informed the Americans that "I, Ghorbanifar,
took the money for myself:' He was so upset he went
to see Peres and showed him all the bank
statements which proved that the money had gone to
Nimrodi. Peres got very angry and stopped the op-
eration. He got Schwimmer and Nimrodi out of it and
appointed Nir, his adviser on terrorism. Israel then
reimbursed the U.S. for the real value of those
t'irst TOWS, which was about $3 million. Now the U.S.
moved into the operation directly and North was put
in charge.
So at the end of '85, North and Nir became the key
players with Ghorbanifar At the very same time,
however, the CIA has a little business going on with
Tehran which bypasses Ghorbanifar, and so far no-
body really knows about it. Ghorbanifar tells me
about all his problems because he needs bridge fi-
nance for Nir and North and the continuation of the
operation. I said, "Look, I know Schwimmer and Nim-
rodi, but I don't know these new guys. So first some-
body besides you must confirm all this to me. Sec-
ondly, what happens if you, Ghorbanifar, die, if
somebody kills you?" So that's when we discussed the
idea of taking out a $22 million insurance on Ghor-
banifar's life. He also arranged for me to meet with
Nir, who brought me up to date on the whole concept.
That made it official.
But I asked him what happens if something goes
wrong, who's going to pay me? If the Iranians don't
pay, etcetera, if you don't ship or the Americans don't
ship, what happens? He gave me his word I was cov-
ered. So I gave him $10 million. I then asked whose
account this was and he said American government.
So I assumed it was a CIA account. When you think of
America in this kind of situation, you automatically
think of CIA.
Q: Not Secord or North?
A: I didn't know who. I'd never even met these
guys. All I knew was USG (United States Govern-
ment), period. This time, I asked Nir to mark up the
price by 20 percent so we would be covered for ex-
pensesand interest on the loan. So the Iranian gov-
ernment paid $12 million through Ghorbanifar. Here
are copies of the checks. A month after this operation
they wanted me to bridge another $15 million. Now I
got nervous. Not because I thought I might not get
the money back but because I sensed we were enter-
ing adanger zone. So I called Nir and Ghorbanifar
and asked them to meet me at the Churchill Hotel in
London.
I said, "Gentlemen, you're playing with fire. The
moment these mullahs understand how easy this has
become, they will understand what they have to do
to get from the Americans whatever they want. To-
morrow, they can kidnap an American from the Ath-
ens Hilton bar, from here, there and everywhere, and
then they'll ask for wheat, sugar, weapons, whatever
they want:' They vehemently denied that there was
any thought of trading anything for hostages. I said,
"Nir, a child can figure this one out. You are simply
whetting their appetite for more. Give them $100 mil-
lion worth of weapons but for God's sake don't ask for
hostages. They'll release them later in their own
time, but don't couple the two things in their mind.
Decouple as much as possible:' Nir then said, "I
understand and I agree with you?but the Americans
are in such a hurry to get these guys out before the
congressional elections:'
So I said, in total disbelief, "You are telling me that
this whole thing hinges on American elections? This
is madness. And you and the Americans and our new
Iranian friends will pay a big price. Don't play this
game:' I then said. "I'm sorry I can't help you if arms
for hostages is the name of the game. But I know a
man who might help you -Tiny Rowland. He can
bankroll you:' Nir then checked with North about
Tiny. North called the CIA and he checked out and
everyone was relieved. Tiny then had us to lunch at
Crockford's in London -Nir, me, Ghorbanifar -and
we explained the whole history of the operation. We
showed him all the checks and documents, then asked
again what would happen if the Israelis didn't ship or
the Iranians didn't pay -the same quesstions -and
Nir said Israel was giving its word.
Then Ghorbanifar gave similar assurances and
said that Khashoggi, me, guaranteed him too. I said
yes, I could vouch for him.
Then Tiny said,'.~dnan, I don't want to have any
problems with you:' I replied that he had nothing to
worry about as I had my ranch in Kenya worth $25
million which was collateral for $1 million he had
loaned me. So w?e asked Tiny for $15 million. He then
called his Friends at the State Department, at the
CIA, the ambassador in London. Shultz was notified
while he was attending the Tokyo summit meeting,
and nobody heard word one about the operation. Tiny
panicked and called me a bastard and accused me of
misleading him as he had checked with the highest
levels of the U.S. government and it was all nonsense
-and he told me to forget it.
I was at the end of my rope. So I asked Ghor-
banifarand Nir whether this was the last deal, the
eery last one, before the expected breakthrough in
Tehran, and they pledged their word it was the very
last one. I borrowed from the bank. the $15 million
with shares in some of my companies as collateral.
Of the $15 million, North arranged for shipments
worth $5 million. The balance of $10 million was left
in Lake Resources by North. During that period,
which was when McFarlane and North went on that
famous secret mission in Tehran, they had a man
called Cave, the CIA man who speaks Farsi, osten-
sibly wit t e mission as an interpreter, who had a
contact with Rafsanjani's son. Cave cooked his
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own deal to release some hostages quickly by giving
the Iranians $500,000 worth of TOWS, quite separate
from the other deals we know about.
McFarlane, to the best of my knowledge, didn't
know about this parallel cl=cannel. Cave was doing that
behind ;VlcFarlane's back. The invoice Cave gave
them was three times cheaper than what had been
arranged through Ghorbanifar. Rafsanjani then takes
the invoice to Prime IVlinister Plussavi and says,
"Your man is a crook. This is the price I got from the
Americans directly, so Ghorbanifar is cheating us:'
So Ghorbanifar, overnight, was burned by the CIA.
But Ghorbanifar was not simply a businessman help-
ing out his government. He obviously had a power
base because that very same night some ?00,000 peo-
ple marched through the streets of Tehran shouting,
"Rafsanjani sold Iran to America:' So the pro-
Western "moderate" faction thought it had been sold
down the river by the Americans to Rafsanjani, who
represented the middle-road faction. So the pro-
~Vestern faction turned against the Americans.
Whether this was sheer ineptitude on the part of the
CIA, or deliberate sabotage, we may never know.
Q: But Casey was in China at the time.
A: I know, but somebody authorized Cave to do
what he did behind ~1cFarlane's back.
Q: McMahon was acting CIA director during
Casey's absence and was told by North they needed a
CIA plane to ship some oil drilling equipment to
'I>'hran.
A: Poindexter knew. North knew.:~IciVlahon ap-
proved. Whoever is responsible has a lot to answer
for. It sabotaged the entire initiative. The most
important thing to remember about the whole
transaction is that we were not dealing with one per-
son but with an important part of the regime that was
maneuvering for position for when Khomeini dies.
Q: Your first contact with the Reagan administra-
tion was when?
A: In 1983 when I wrote a letter to the president at
the time of the Reagan plan for the ;diddle East.
Here's a copy of what I sent him. Sen. Laxalt
delivered it. Bill Clark sent me a letter thanking me
and telling me the president was very happy with it.
[t was a very nice letter.
Q: Have you met Mr. Reagan?
A: Only when President 1vlubarak was on a visit to
Washington when I had a chance to have a few words
with him.
Q: You never met Secord or North?
A: No.
Q: When did you first realize there was a North-
rup network that included such people as Secord and
Albet Hakim?
A: When the big explosion occurred.
Q: Who sent Furmark to warn Casey something
was wrong?
A: I asked Furmark to ask Casey about Lake Re-
sources as I was getting suspicious when payments
were delayed and I was minus $10 million. Casey told
Furmark that he had checked Lake Resources and
there was only $30,000 in the account -and that was
before the whole thing became public knowledge.
How would Casey be able to check on this unless he
had access to this account? That's not possible under
Swiss law. Furmark told me Casey called North in
front of him - it was the first time I had personally
heard North's name mentioned -and asked him
what happened to the $10 million owed Khashoggi.
And North replied it was up to the Iranians to
pay him. But you didn't ship them, Casey told
North in front of Furmark. Yes, we did, North
replied. So North lied to Casey. Or Casey was
lying to Furmark? Who knows? Furmark has
known Casey for many years as a trusted busi-
ness associate, so I don't think he was lying.
North has a lot to answer for. Maybe he di-
verted the money I raised.
Q: But who gave North the idea of using the
money from Iran arms sales to help the Nicara-
guan resistance fighters?
A: I think it yeas Nimrodi -the fact that he
took the goods and marked them up. Nimrodi I
believe gave the idea to North. He's obviously a
brilliant operator.
Q: How can you describe him as brilliant
when you haven't even met him?
A: He can't be stupid, sitting in this office in
the bVhite House, running all these secret oper-
ations, in a Machiavellian way. He must have
brains.
Q: From everything you know, who, in your
judgment, is North protecting today? Why
won't he go public? Who is Poindexter protect?
ing?
A: North reports to Poindexter. Poindexter
has cleared everything. That's clear from the
Tower report. Poindexter is protecting the pres-
ident.
Q: So it's inconceivable to you that the pres-
identdidn't know?
A: The president was informed in a general
way, while he was adjusting his tie for a photo
opportunity, or getting ready to leave for Camp
David, that everything was on track, that the
Contras were being taken care of, an~he
wasn't really concentrating. They wrote him
memos that he never read, because if he had he
would have asked some pointed questions.
Let's say I'm the president of the United States
and a memo comes f rom Poindexter -among
many others. So I ask my secretary what's this
one about and she says it's on the Iranian affair.
He then gays, I heard it went well, file it. Jimmy
Carter would have read every line.
Q: Obviously anti-Communist resistance
movements in Afghanistan, Angola and Nicara-
gua are as important to the Saudi government
as they are to the U.S. -witness all the aid the
Saudis have given the mujahideen in
Afghanistan and the $2 million a month to the
Contras. Was that done outside of you?
A: Outside of me, I knew nothing about it. I
only heard about the Contras twice before the
Irangate ccisis broke. But I didn't hear it re-
ferred to an Contras but as Nicaragua. Vice
President Bush was trying to raise money right
and left for the Nicaraguan resistance in 1985,
and my No. ?, Bob Shaheen, called me and said
the vice president had invited me to lunch. I
asked Bob what was the occasion, and he said
~Ir. Bush was raising funds for Nicaragua. So I
told Bob, "Send him 51,000:' And I received a
very nice letter from the vice president
thanking me for my contribution. Here's a copy
and it doesn't even mention how much my
check vas for. It could have been $100 million
if you read the letter without knowing how
much Isent -which was 51,000. This is sheer
stupidity. With this kind of letter, I could
bring down the government by just asking what
happened to the $100 million I gave you
~QIt~ 7IIA~
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ilaughterl. They have been very careless. You
don't know whether to laugh or cry when you
see these things. It's amateur night at the
opera. This Bush thank-you letter is a classic
example of how not to de-NKngs.
That was the first time I heard about Nicara-
gua. There was also a meeting in London with
North, :McFarlane and Ledeen, before
1cFarlane went to Tehran. About two weeks
before. Ghorbanifar came to see me after the
meeting and told me they had had a great ses-
sionand so on and so forth, "and North asked
me to ask you whether you could raise $100
million for Nicaragua because you will be able
to get a lot of favors from the administration:' I
replied, "Look, Nixon was my best friend in
his administration and he couldn't help me or
my business one iota. All these guys can do is
offer you an embassy abroad and since I'm not
going to be a U.S. ambassador, forget about it:'
Ghorbanifar then said, "What about your
king?" [ said I would never raise such an idea
~~?ith King Fahd as it would merely make him
suspicious that I was trying to pocket some
money.
Q: Even though you heard the subject of
Nicaragua contributions mentioned twice, it
did not enter your mind there was any connec-
tionbetween your dealings with [ran and Is-
rael, on the one hand, and Nicaragua on the
other?
A: Impossible for me to guess that.
Q: But you know how anxious the administra-
tion was to bridge the Contras during a period
when Congress had cut them off?
A: Yes, but you have all of America to tap for
that. If you get $10,000 from each major com-
pany, and $1 million or $2 million from wealthy
private contributors, you'll get all you need.
Q: What happened to the sultan of Brunei's
$10 million contribution to the Contras?
A: You should ask Mohamed Fayed. He's very
close to the sultan. But I have no idea where the
money went.
Q: Tell me about Michael Ledeen.
A: The only time I met Ledeen was at dinner
at the Belvedere restaurant with Ghorbanifar.
Q: When was that?
A: Shortly before McFarlane went to Tehran.
Q: But Ledeen was out of the Iran picture
shortly before McFarlane resigned at the end
of '85.
A: Ledeen came back into the picture later.
He was always in touch with Ghorbanifar.
Ghorbanifar introduced him to me as an assis-
tant to [he national security adviser.
Q: Not as a consultant, but as something
more important?
A: I'm talking about the way Ghorbanifar in-
troduced him. But when we sat down, Ledeen
was honest and told me he was a professor at
Georgetown and a consultant to the NSC. And
as an expert on terrorism, he was full of inter-
esting stories. He's highly intelligent and a
very good talker. So I asked him if he'd read the
document I sent to McFarlane, and he said that
he had and found it most interesting.
Q: When did you first hear about Ollie
North's private network of Secords, Hakims,
Channells etcetera?
? A: After the story broke.
Q: And Bill Casey? How long have you known
him?
A: I've met Casey twice since he ~ a d the
the CIA in 1981- once about Egyp
other time about the Jordan period. I was en-
deavoring to explain how the U.S. was unneces-
sarily antagonizing two good friends - Pres-
ident Mubarak and King Hussein.
Q: Casey told me over Thanksgiving
weekend last November that the CIA was not
aware weapons were in the plane that the
agency supplied to fly McFarlane to Tehran
and that his deputy had authorized the flight
after being told it would be carrying oil drilling
equipment. Is that believable?
A: Of course the CIA knew what had been
cooking and they must have checked the cargo.
Q: 1b what extent did you get USG involved
in deals with the Israelis as a way perhaps to
recover your own declining business fortunes?
A: I helped the U.S.
Q: But you had your own future in mind?
A: Of course if things had worked out ac-
cording to plan, look at all the things that have
to be rebuilt in Iran -and in Iraq -after the
war ends. You're talking about anything
from $100 billion to $300 billion. How much do
you think it would cost to rebuild the second
largest oil refinery in the world of Abadan?
And that's just one item out of scores.
Q: You said on French TV recently that the
door you opened in Iran is still open. What's the
evidence?
A: I know it for a fact. I've met with three
important mullahs quite recently. One of them
is a key guy. Just the day before yesterday. They
want an honorable peace. They came to me be-
causethey know I'm now making my own deals
with the Iraqis.
Q: You also said Reagan is still a hero in'Iieh-
ran. That's not the way I read the coffee beans,
when they call us devil incarnate.
A: I meant after the scandal broke. Didn't
you notice how complimentary Rafsanjani and
tiiontazeri were toward Reagan in the Iranian
press? You just concentrated on the cake and
the key and the autographed Bible. That was
not the story.
Q: No more nice things today, right?
A: Events are turning against you now.
Q: Then how can the door still be open?
A: You can still walk through the door now
but if you don't it will be closed forever. Raf-
sanjani in the past few hours has felt compelled
to say complimentary things about the U.S.S.R.
- just to cover his exposed rear.
Q: You also said that if the U.S. and the
U.S.S.R. wished to put an end to the Iran-Iraq
war, they could do so in one minute. You didn't
explain how?
A: For the first time the Soviets are scared
of chaos throughout the region that would spill
across their own borders and infect some of
their Asian minorities. Gorbachev wants to be
a hero and realizes that the days of colonial em-
pires are over. Now's the time to call what you
think is their bluff on disarmament.
Q: Pretty meaningless, no, unless linked to
regional settlements, namely Centeral
America, Southern Africa, Afghanistan.
A: They will go along with you. They will
withdraw happily from Afghanistan. They've
told me so.
Q: Where do you see the U.S. in the wake of
the Iran fiasco?
A: People don't trust you -especially your
friends. You have developed the reputation of
abandoning your friends when the going
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gets tough. Your European allies are going to
make their own peace with Rusaia. Perhaps
neutralism is too big a word but major change
is coming and this in turn, will bring peace
in the Middle East~`orbachev needs this to
protect Russia's own oil reserves. They've
asked me to arrange for 1 million barrels a day
from Saudi Arabia. Why? Because they don't
want to deplete their reserves. They have to
supply all of Eastern Europe plus their own
growing needs. They are more conscious of
their coming problems than the U.S. seem~'po
be. One of the two superpowers has to weker~fp
and the Soviets now seem to be answering
reveille before the U.S.
Q: Furmark told the lower Board that he in-
troduced Ghorbanifar to Khashoggi... .
A: Correct.
Q: And that George Cave, who had been sta-
tioned in 'I~hran for the CIA before the over-
throw of the shah and had been responsible for
terminating the relationship with Ghorbanifar
in 1983, told the lower Board that Ghorbanifar
had known Khashoggi for years.
A: A lie, totally and completely false. I've
told you exactly how we met.
Q: Furmark told the board he met Ghor-
banifar in January'85 and later introduced him
to you.
A: Correct.
Q: Who is Albert Hakim?
A: Never met him. He's Iranian, no?
Q: Naturalized American. Ghorbanifar met
only once with Secord and others. Hakim and
Cave were part of the same team that sab-
otaged the operation to be able to deal directly
with Rafsanjani. They are the ones who broke
the consensus, presumably under instructions.
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