A STUNNING INDICTMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000807210002-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: January 10, 2012
• Sequence Number: 2
• Publication Date: March 9, 1987
• Content Type: OPEN SOURCE

Declassified in Part - Sanitized Copy Approved for Release 2012/01/10: CIA-RDP90-00965R000807210002-5
;:,RTICLE APPEARFR
ON PAGE
NEWSWEEK
9 March 1987
Recuperating in pumas: Reagan meets his cabinet, then OK's Israel's arms-to-Iran proposal, says McFarlane
A Stunning Indictment
The Tower report exposes a system betrayed by the people who ran it
Quis custodiet ipsos custodes? (Who will
guard the guardians themselves?)
-JUVErAL. "Satires," VI. 347
The Tower commission's report paints a
devastating picture of a government
that let its guard down. The line of
Latin leads offa long chronology of events in
which a president paid little attention while
some of his subordinates ran amok. The
report hasa harsh word for almost everyone
involved. National-security adviser John
Poindexter "failed grievously" in his duty
to President Reagan, as did CIA Director
William Casey, the report says. Chief of staff
Donald Regan is assigned "primary respon-
sibility for the chaos that descended on the
White House" when the Iran-contra scan-
dal broke. During an ensuing cover-up, Lt.
Col. Oliver North, the chief White House
swashbuckler, tried to "conceal or with-
hold important information," the report
charges. Throughout the affair, Vice Presi-
dent George Bush was conspicuous by his
silence, while the secretaries of state and
defense, George Shultz and Caspar Wein-
berger, carefully "distanced themselves"
from the unfolding debacle. And Ronald
Reagan allowed it all to happen. Instead of
mastering the machinery of government,
he permitted it to master him.
No one would have been surprised if the
Tower commission had produced a bland
report. The three-member board had no
authority to subpoena documents, grant
immunity or compel witnesses to testify,
and several key figures in the scandal nev-
er answered the panel's questions. North
and Poindexter, among others, declined to
testify; when chairman John Tower asked
President Reagan to compel their coopera-
tion, the commander in chief refused, cit-
ing their constitutional rights. The govern-
ment of Israel also failed to make key
officials available for questioning. Cancer
struck down two potentially important wit-
nesses_Casey, who developed a brain tu-
mor, and Donald Fortier, a key National
Security Council aide, who died last year.
Even the voluminous testimony of former
national-security adviser Robert McFar-
lane was interrupted by his apparent sui-
cide attempt.
The commission also was handicapped
by limits on its time and investigative re-
sources. By its own admission, the Presi-
dent's Special Review Board, as the panel is
formally known, was unable to make a
"systematic inquiry" into the contra end of
the scandal, and it never figured out exact-
ly how much money was involved, or where
it all went. "The Iran/Contra matter has
been and, in some respects, still is an enig-
ma," the panel reported. "For three
months the Board sought to learn the facts,
and still the whole matter cannot be fully
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explained." But despite all the gaps, the
principal authors of the report-Stephen
Hadley, a Washington attorney, and Nich-
olas Rostow, a State Department lawyer-
have provided an elegantly written text
that stands as a stunning indictment of a
system that failed because of the people
who ran it.
arms for Hostages
What was the purpose of the Iranian
arms sales-to improve U.S. relations with
a strategically vital country, or to obtain
the freedom of Americans held hostage by
pro-Iranian terrorists in Lebanon? When
the scandal broke, the administration in-
sisted loftily that its main objective was
strategic: an opening to "moderates" in the
Iranian government. The Tower commis-
sion acknowledges that for some U.S. offi-
cials, the principal objective was always
geopolitical. But it concludes: "Whatever
the intent, almost from the beginning the
initiative became in fact a series of arms-
for-hostages deals." The main motivator
was Ronald Reagan himself. In an inter.
view with the commission after his suicide
attempt, McFarlane said that, upon reflec-
tion, it was "misleading, at least, and
wrong, at worst, for me to overly gild the
president's motives for his decision in this,
to portray them as mostly directed toward
political outcomes." In fact, said McFar-
lane, Reagan's performance day by day
made it "very clear that his concerns here
were for the return of the hostages."
But where did the idea of arms sales as an
instrument of policy come from? Partly
from Israel, according to the report. In ear-
ly May 1985 McFarlane sent an emissary to
Israeli Prime Minister Shimon Peres to ask
for information about Iran. The envoy, Mi-
chael Ledeen, a part-time NSC consultant
on terrorism, insists that the hostages were
never disc qd. But he told the commis-
sion that 'i ,ked for U.S. consent to
sell Iran i y" of artillery pieces or
ammuni ceding to Ledeen. McFar-
lane subs, .: cly authorized him to tell
Peres: "It's OK, but just that and nothing
else." (McFarlane denies having said that.)
In this passage, the Tower report raises,
but does not answer, an intriguing ques-
tion: whether McFarlane authorized an Is-
raeli arms sale to Iran as early as the
spring of 1985.
Certainly McFarlane was pushing for in-
direct arms sales. He promoted the CIA to
produce an intelligence evaluation warn-
ing that the Soviet Union was in a position
to exploit political chaos in Iran. On June
11 he circulat a draft of a paper setting
out long-term U.S. policy toward Iran, in-
cluding a proposal or increasing extern
in uence L here by allowing ales to
provide Teheran with "selected military
True or False?
Reagan in Public:
?We did not-re
peat--did not
trade weapons or anything else for
hostages-nor will we."
We did not condone, and do not
condone, the shipment of arms from
other countries [to Iran]."
"T
Nov. 13, 1986 ~
Presldentlal address
Nov. 19, 1986
News conference
here was a third country in-
volved in our secret project [trading
arms for hostages] with Iran."
Nov. 19, 1986
Presidential statement issued after
hat we did was right, and we're
going to continue on this path."
"T
Nov. 19, 1986
News conference
he goals were worthy... But we
did not achieve what we wished, and
serious mistakes were ... made in
trying to do so."
Jan. 27, 1987
State of the Union Message
Reagan in the Report:
Sometime in August [1985] he ap-
proved the [August 30] shipment of
arms by Israel to Iran."
Jan. 26, 1987
He concluded "that he had not
approved the transfer in advance."
I
don't remember-period."
Feb.20,1987
equipment." Casey strongly endorsed the
policy paper, but Shultz called it "per-
verse, and Weinberggr said it w "allmost
too absurd to comment on." At about the
same time. Shultz also complained about
McFarlane's dealings with Israel. "Israel's
agenda is not the same as ours," he recalls
telling McFarlane. Thwarted, McFarlane
had to back away from his Israeli initiative.
According to Shultz, McFarlane said: "I am
turning it off entirely."
Israel soon turned it on again, perhaps
with some prompting from the United
States. In early July David Kimche, direc-
tor general of the Israeli Foreign Ministry,
came to Washington and proposed that po-
litical discussions be conducted with Iran
through a disreputable but well-connect-
ed Iranian middleman named Manucher
Ghorbanifar. Ten days later the Israelis
suggested that their contacts in Iran could
arrange the release of all seven American
hostages in exchange for 100 TOW anti-
tank missiles from the Israeli arsenal. Rea-
gan was receptive to the idea. He had been
deeply stirred a few days before when he
visited the grave of a U.S. sailor who was
murdered during the drawn-out hijacking
of a TWA jet to Beirut. The arms-sale pro-
posal was brought to the president in his
hospital room after his surgery for colon
cancer. He discussed it with his top advis-
ers and then said: "Yes, go ahead. Open it
up." As it turned out, Israel delivered 508
TOW's to Iran in late August and mid-
September, and only one hostage, the Rev.
Benjamin Weir, was set free in return.
By then Ollie North was on the case. In
early June he asked McFarlane to approve
two projects. In one, the United States
would look for "a private solution" to the
hostage dilemma, apparently a reference
to private financing. The other plan, says
the Tower report, "involved the ransoming
of two hostages," including William Buck-
ley, the CIA station chief in Beirut, for S2
million. According to report, documen-
tary evidence "sugl at the private
source of these func Ross Perot,"
the Texas billion, ch plans ran
counter to the admix . ,ion's expressed
policy of not bargaining with terrorists for
the release of hostages. According to the
report, McFarlane approved both plans.
Chaos in Foreign Policy
"The Iran initiative was handled almost
casually and through informal channels,
always apparently with an expectation
that the process would end with the next
arms-for-hostages exchange," former Sec-
retary of State Edmund Muskie, a member
of the Tower commission, said last week.
"And of course it did not." As the process
dragged on, informality led to chaos. For-
mal discussions among the president's top
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had not authorized the August shipment in tions on this issue. They were not energetic
advance. President Reagan himself re- enough in attempting to protect the Presi-
called that he had been "surprised" when dent from the consequences of his personal
he heard about the Israeli shipment; he commitment to freeing the hostages."
assumed that if it surprised him, he must Other top advisers are found even more
not have known about the shipment in culpable. Of Regan the commission says:
advance. "More than almost any chief of staff of
Then, on Feb. 20, Reagan changed his recent memory, he asserted personal con-
story again. In a letter to the Tower com- i trol over the White House staff ... He, as
mission, he confessed: "I'm afraid that I let much as anyone, should have insisted that
.nyself be influenced by others' recollec- an orderly process be observed." Poin-
tions, not my own ... The only honest an- dexter is blamed for misleading Shultz and
swer is to state that try as I might. I cannot for failing to warn Reagan about "the seri-
recall anything whatsoever about whether ous legal and political risks" caused by the
I approved an Israeli sale in advance or diversion of Iranian arms money to the
whether I approved replenishment of Is- contras. "His clear obligation was to either
raeli stocks around August of 1985. My investigate the matter or take it to the
answer therefore and the simple truth is, 'I President-or both," the report says. "He
don't remember-period'." The panel itself did neither." McFarlane is handled gently,
concluded that Reagan "most likely" had perhaps out of concern for his state of mind,
approved of the Israeli shipment in ad-
vance, if only because there was no record
that he had ever opposed the idea.
The president's decision to back away
from Regan's version apparently was
prompted by a phone call he made last
month to McFarlane, who was in the hospi-
tal recovering from an overdose of Valium.
McFarlane also talked to the Tower com-
mission while he was in the hospital, recall-
ing that Reagan had agreed to the Israeli
sale almost casually. "But I did then spell it
out," McFarlane insisted, "and I said: Mr.
President, what's involved here is the sale
by Israel of weapons and ultimately them
coming to us to buy replacements. And he
says: Yes, I understand that. And I said: Do
you understand, of course, now that George
[Shultz] and Cap [Weinberger] are very
much opposed to this and they have very
good reasons? And he said: Yes, I do, but I
draw a difference between our dealing with
people that are not terrorists and shipping
arms to terrorists. And I'm willingto defend
that. And he even said something like: I will
be glad to take all the heat for that."
All the King's Men
By the fall of 1985, President Reagan had
what he apparently wanted: an arms-for-
hostages process with a geopolitical ve-
neer. His two senior advisers, the secretar-
ies of state and defense, both opposed the
policy, vigorously at times, but neither of
them had resigned or taken any other ac-
tion to thwart the president's plan. The
price Reagan paid for this acquiescence
was that Shultz and Weinberger more or
less deserted him. "Their obligation was to
give the President their full support and
continued advice with respect to the pro-
gram or, if they could not in conscience do
that, to so inform the president," says the
Tower report. "Instead they simply dis-
tanced themselves from the program. They
protected the record as to their own posi-
but the panel points out that he was "not
always successful" in keeping cabinet
members informed. About George Bush
there is a silence that can hardly be regard-
ed as flattering. Bush is recalled as a partic-
ipant in several of the major meetings, but
his contributions are not recorded. His
views at the time remain unknown.
Reading these indictments of the presi-
dent's staff, it is hard to avoid the impres-
sion that the Tower panel tried to dilute the
president's shortcomings by pointing to the
failures of his subordinates. Even cabinet
members are only advisers. The record as-
sembled by the Tower commission shows
how difficult it is to give advice to a man
who neither pays attention to detail nor
exhibits any patience with the slow work-
ings of a properly run bureaucracy.
Where Was the CIA?
William Casey was one of Ronald Rea-
gan's closest advisers, a personal friend
and a former campaign manager. But Ca-
sav's CIA was held in contempt by White
wheeler-dealers like Poindexter and
r i "The CIA are really bunglers,"
e er complained in one computer
nlesr ge. North charged that the CIA had
,~tcned" an attempt to rescue an Ameri-
can hostage in Lebanon. He also believed
that Secord's private network was more
efficient than the agency's. After Secord
chartered a plane for the Iran operation,
North wrote: "Why Dick can do something
in five minutes that the CIA cannot do in
two days is beyond me-but he does."
If Ollie North wanted to do things his
own way, that was fine with Casey, who
tried to keep the agency out of trouble.
According to the Tower report, the CIA
director "appears to have acquiesced in
and to have encouraged North's direct op-
erational control over the [Iran] opera-
tion." Casey also took steps to keep the
CIA clear of North's contra enterprise. sta-
tioning "compliance officers" in the
agency's directorate of operations to en-
force congressional restrictions on CIA
contacts with the rebels. But Casey knew
what was going on. The Tower report says
he "appears to have been informed in con-
siderable detail about the specifics of the
Iran operation." And he learned about the
diversion of arms money to the contras
"almost a month before the story broke,"
according to the report.
Casey's chosen successor, Robert Gates,
was less informed, but he may have known
enough to jeopardize his nomination as the
CIA's next director. Gates signed off on the
1985 CIA study that called for Western
arms sales to Iran. Last week Democratic
Sen. Bill Bradley charged that "the CIA
tailored its intelligence assessment on Iran
to fit the needs of the policy makers of the
White House." One of Poindexter's com-
puter messages shows that Gates also knew
about the private network that financed
and supplied the contras. "I did tell Gates
that I thought the private effort should be
phased out," Poindexter told North last
July, after Congress voted to resume U.S.
aid to the contras. And on Oct. 1, according
to the Tower report, a CIA official named
Charles Allen warned Gates about the di-
version of money from the Iranian arms
sales. "I said perhaps the money has been
diverted to the contras, and I said I can't
prove it," Allen told the commission.
"Gates was deeply disturbed by that and
asked me to brief the Director."
Blaming Israel
The Tower report is cautiously critical of
Israel's role in the Iran affair. It charges
that "Israel had its own interests, some in
direct conflict with those of the United
States, in having the United States pursue
the initiative." One of those interests, the
report says, was "to distance the United
States from the Arab world and ultimately
to establish Israel as the only real strategic
partner of the United States in the region."
Israel's greatest disservice to the United
States may have been its choice of Ma-
nucher Ghorbanifar as the first inter-
mediary with Iran. A businessman with
intelligence connections, Ghorbanifar was
described by McFarlane as "a self-serving
mischief maker" and by a senior CIA offi-
cial as "a guy who lies with zest." Subjected
to a CIA lie-detector test in January 1986
Ghorbanifar flunked nearly all of the ues-
tions. Worst of all, the CIA concluded: "The
test also indicated Ghorbanifar knew
ahead of time that the hostages would not
be released despite our providing missiles
tote Iranians. He deliberately tried to
deceive us on this issue."
The commission's report is unavoidably
skimpy on the Israeli connection. Jerusa-
Continued
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Fiasco: McFarlane (seated) and other players in the May 1986 mission to Iran
Lem refused to allow Israeli officials and
arms dealers to testify, and when the panel
submitted written questions, the Israelis
stalled until Tower's deadline had passed-
an outright "evasion," as Muskie saw it.
"It remains unclear," the report says;
"whether the initial proposal to open the
Ghorbanifarchannel [to Iran]wasan Israeli
initiative, was brought on by the avarice of
arms dealers, or came as a result of an
American request for assistance." Whether
Israel was the catalyst for the Iran opera-
tion or merely a lubricant, the panel con-
cluded that the Israelis should not be
blamed for what happened. The report says
that Washington "is responsible for its own
decisions."
The Cover-up
The Tower report concludes that once
the Iran operation was revealed, Presi-
dent Reagan did not "intend to mislead
the American public or cover up unlawful
conduct ... [T]he President does indeed
want the full story to be told." But the
panel charges: "Those who prepared the
President's supporting documentation did
not appear, at least initially, to share in
[his] ultimate wishes."
Soon after the Iran story broke, Poin-
dexter, McFarlane, North and two other
NSC staffers started to prepare a chronol-
ogy of the operation. They went through
at least a dozen versions between Nov. 5
and Nov. 20. "The earliest versions were
merely lists of events; the later versions,
41
Although the report doesn't pretend to
trace the money trail, it does provide some
fascinating glimpses into the process. In
one passage, Roy Furmark, a New York
businessman who helped to finance the
arms sales, describes how Saudi Arabian
financier Adnan Khashoggi put up some of
the money. "The Iranians would not pay
for anything until they received and in-
spected the goods," Furmark recalled.
"And of course the Israelis would not send
anything until they were paid in advance.
So now you had a stalemate. Khashoggi
then said, well, I will trust the Iranians. I'll
trust the Israelis, I'll trust the Americans,
I'll put the money up ... He puts a million
dollars into an account, and then Ghorban-
ifar gives him what we will call a postdated
check for a million dollars in his account at
Credit Suisse [a Swiss bank]. And then
after the shipment is made, the Iranians
inspect the goods, and they then pay
Ghorbanifar's account at Credit Suisse.
Ghorbanifar tells Khashoggi the check is
[now] good, deposit it. And that is how the
financing was done all throughout."
Other investigators will have to deter-
mine how much money was diverted from
the Iranian armssales tothe warchestofthe
11 contras. They also will try to find out how
called 'Maximum Versions,' mixed events much money North's network raised from
with rationale," the report says. "At best, private contributors. According to one
these chronologies suggest a sense of con- source, theTowerreportleftoutadocument
fusion about both the facts and what to from North stating that, by the spring of
say about them. At worst, they suggest an 1986, his network had spent $37 million on
attempt to limit the information that got supplying the rebels. The report also omit-
to the President, the Cabinet, and the ted the names of countries that supplied
American public." substantial financialsupporttothecontras.
McFarlane told the panel that "a princi- Sources said three of those countries were
pal objective, probably the primary objec- South Korea, Taiwan and Saudi Arabia.
tive, was to describe a sequence of events The Tower commission was not asked to
that would distance the President from the track down individual lawbreakers, but its
initial approval of the Iran arms sale [and] report does question the lgality of many
blur his association with it. The Nov. 18 administration acts. The panel says that
chronology, which I indeed helped to pre- the "legal underpinning" of the first arms
pare, was not a full and completely accu- shipment to Iran was "at best highly ques-
rate account of those events, but rather this tionable," even if Reagan did approve the
effort to blur and leave ambiguous the Pre- sale in advance. The Arms Export Control
sident's role." On Nov. 19 Reagan held a Act and the Na pnal Security Act require
press conference. Among other tl nz. formal presidential "findings" before such
told reporters that his administra shipments can be made. The report also
not been involved in any arms salt. t -,n questions whether the Boland amendment
i before he signed his intelligence fin"tg on and other congressional restrictions on
Jan. 17,1986. The news conference was not U.S. aid to the contras were violated by
a great success. Attorney General Edwin North's fund-raising and supply efforts.
Meese III was asked to straighten things The Tower commission implies that North
out, and on Nov. 25 he announced that was the official most likely to have violated
money from the arms sales may have been the letter and spirit of the laws. North
diverted to the contras. himself has denied any wrongdoing. "I
Unanswered Questions
have broken no laws," the Tower report
quotes him as saying. It was left to other
investigators-two congressional commit-
tees and special prosecutor Lawrence
When it issued its report, the Tower com- Walsh-to follow upon the leads that were
mission pointed out that at least two key developed so energetically by John Tower
questions were left unanswered by its in- and his colleagues.
vestigation: where did the money go, and RUSSELL WATSON With JOHN BARRY
what laws were broken? in Washington and bureau reports
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