WHITE HOUSE RECOUNTING OF IRAN AFFAIR ABSOLVES REAGAN BUT RAISES QUESTIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000605050011-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 23, 2016
• Document Release Date: February 19, 2013
• Sequence Number: 11
• Publication Date: December 22, 1986
• Content Type: OPEN SOURCE

Declassified in Part - Sanitized Copy Approved for Release 2013/02/19 CIA-RDP90-00965R000605050011-7
WALL STREET JOURNAL
ARTICLE APPEARED 22 December 1986
k) ON
White House Recounting of Iran Affair
Absolves Reagan but Raises Questions
j By JOHN WALCOTT
/40-1F,A
Staff Re rterv (}f THE W AI I. S rREET JOURNAL
WASHINGTON?A comprehensive writ-
ten account of the Iran arms .affair, pre-
pared by the White House after the scandal
broke, absolves President Reagan of any
responsibility for Israeli arms sales to Iran
last year, or for the diversion of profits
from the sales, administration officials
said.
But the officials said that although
White House Chief of Staff Donald Regan.
Central Intelligence Agency Director Wil-
liam. Casey and other top officials have
used the chronology as a basis for much of
their testimony on the affair, the document
contradicts the sworn testimony of some
participants. omits crucial parts Of the
story. and may contain errors of fact.
Some congressional investigators ques-
tion the accuracy of the White House ac-
count and are looking into how it was pre-
pared.
Meanwhile, a memo that investigators
found in Lt. Col. Oliver North's files sug-
gests that as early as 1985. the former Na-
tional Security Council aide considered the
thu of diverting funds from the arms sales
to help the Nicaraguan insurgents, accord-
ing to law enforcement officials.
The issue of when the subject first came
up in memos or discussions by Lt. Col.
North is significant, law enforcement offi-
cials said, because it can help explain who
else in the administration may have known
about the issue, and whether Israeli gov-
ernment officials or arms dealers also may
hive suspected or known about such ef-
forts to funnel money to the insurgents.
known as the Contras.
White House Chronology
The White House (tronology was pro-
duced when former National Security Ad-
viser ,John Poindexter and Messrs. Casey
and. Regan ordered CIA officials and Lt..
Col. North to write it last month, soon after
an article about the Iran arms sales ap-
peared in a Beirut magazine, administra-
tion sources said. The document was in-
tended to prepare administration officials
for briefing Congress on the arms sales.
Administration sources familiar with
the chronology said it claims the U.S. gov-
ernment demanded the return of Hawk
missiles shipped to Iran by the Israelis in
November 1985 because the missiles had
been shipped without Mr. Reagan' s ap-
proval.
Others familiar with the transaction.
however, have said the missiles were re-
jected by the Iranians because they were
outdated models and that the incident con-
vinced U.S. officials to stop selling arms to -
Iran through two Israeli middlemen. Yaa-
cov Nimrod' and Al Schwimmer.
Moreover, intelligence sources and oth-
ers with knowledge of the November ship-
ment said it was made with direct help
from the White House and the CIA. When
the Israeli plane carrying the missiles was
detained i o Lisbon. Portugal, these sources
said. lsraeh officials called Robert McFar-
lane. then President Reag,an's national se--
curity adviser. at the U.S.-Soviet summit
meeting in Geneva.
Mr. McFarlane. the sources said. con-
tacted Lt. Col. North. and told him to se-
cure CIA help in releasing the shipment
and delivering it to Iran. Lt. Col. North
contacted a now-retired CIA official re-
sponsible for managing covert operations.
The official, after calling Mr. Casey in
China, helped arrange a charter airplane
and customs clearance for the Iranian-
bound missiles, intelligence sources said.
The chronology also asserts that Presi-
dent Reagan "did not approve" Israeli
sales of American-made arms to Iran in
1985. However. Mr. McFarlane has testi-
fied under oath that Mr. Reagan approved
the sales in advance.
.Mr. McFarlane's version received sup-
port from lawmakers yesterday. On NBC-
TV's "Meet the Press," Sen. William Co-
hen (R., Me.) said he believes that Mr.
McFarlane. whom he said he knows well,
"would not act outside of channels."
Mr. Cohen. an Intelligence Committee
member who was appointed to the Senate
select panel investigating the affair, added
that "if the president were to tell him spe-
cifically this plan is to be vetoed. he
(McFarlane) would not go to the Israelis
and say the green light is on."
Direct Sales to Iran
On the same program. Sen. Sam Nunn
ID.. Ga.) said the president. "has not got-
ten on top of the facts. and he may or may
not have forgotten some of them."
The White House chronology also sug-
gests that the administration reversed an
earlier decision and decided to sell U.S.
arms directly to Iran after a January 1986
visit from Arnirarn Nir, Israeli Prime Min-
ister Shimon Peres's adviser on terrorism.
According to sources, the chronology
claims that Mr. Nir proposed a renewed ef-
fort to build relations with moderates in
Iran after meeting with an Iranian arms
dealer, Manucher Ghorbanifar. and a
Saudi Arabian financier. Adnan Kha-
shoggi.
But other administration officials said
President Reagan was the driving force
behind the decision. The officials said the
administration's hopes that Israeli arms
STAT
sales in September and November of 1985 I
would help bring all the hostages home in 1
time for Christmas were dashed, and Mr. I
Reagan himself delivered the disappoint-
ing news to the hostages' families in a
series. of emotional meetings in the White
House. The meetings. the sofficials said.
were attended by Lt. Col. NoYth and other
White House aides.
Separately. discovery of the earlier
memo suggesting that funds had been di-
verted to the Contras prompted Justice De-
partment officials to begin a full-scale in-
vestigation of the matter late last month.
Law enforcement officials said the memo.
uncovered by Assistant Attorney General
William Bradford Reynolds, wasn't signed
or dated.
Memo Believed Written in '85
These officials say the Federal Bureau
of Investigation now suspects that the
memo was written sometime in 1985. be-
fore President Reagan signed a formal na-
tional security directive last January au-
thorizing weapons sales to Iran. FBI Direc-
tor William Webster has said the memo
alerted investigators early on to "some-
thing that might not have been in the pur-
view" of that presidential directive, but he
has declined to elaborate.
The FBI has interviewed U.S. officials
about the origin of the memo and also in-
tends to ask certain Israelis about its con-
tents. according to law enforcement offi-
cials. Israeli officials repeatedly have de-
nied that they either knew or suspected
that money from the arms deals was in-
tended to flow to the Contras.
Mr. Meese, who discussed the memo in
closed-door testimony before the House In- ,
telligence Committee on Friday, told re-
porters afterward that Lt. Col. North as-
sured him last month that President Rea-
gan didn't know about any diversion of
funds to the Contras.
In recent days. administration officials ,
have acknowledged that even though there 1
was only modest political pressure on
President Reagan to free the hostages, the
issue was a major concern in the presi?
dent's Mideast policy.
North Spoke of Hostage Dilemma
Lt. Col. North had publicly acknow-
ledged the effect of the hostage issue on
U.S. policy in fall '1985. at a seminar on ter-
rorism at the State Department's Foreign
Service Institute. According to sources who
were present, the former NSC aide con-
ceded that it was becoming difficult for the
administration to stick to its hard-nosed
policy of not paying ransom for hostages
or negotiating with terrorists in the face of
the emotional demands of the hostages'
families.
Following the meetings with hostages'
families, administration sources said. Mr.
Reagan directed Mr. Regan and Vice Adm.
Poindexter to redouble their efforts to free
the hostages. Lt. Col. North. on instruc-
Continued
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Declassified in Part - Sanitized Copy Approved for Release 2013/02/19: CIA-RDP90-00965R000605050011-7
tions from Mr. Poindexter and with the
support of Messrs. Regan and Casey, then
contacted Mr. Nir, who had provided help
to Vice President Bush's task force on ter-
rorism.
Indeed, intelligence sources said the ad-
ministration's efforts to locate and free the
hostages were far more extensive than was
.previously known. Despite the protests of
some hostage families that the administra-
tion wasn't doing much for their relatives,
the White House and the. CIA had in place
a secret campaign by late 1985 to find the
hostages and to win their release. the
sources said.
The CIA established a Hostage Rescue
Locating Force under the national intelli-
gence officer for counterterrorism. Charles.
Allen. The force attempted to infiltrate
agents into terrorist groups. paid infor-
mants for data on the whereabouts of the
hostages, and analyzed technical intelli-
gence that might help locate the hostages,
track their movements, and identify their
captors. The force prepared highly -classi-
fied weekly reports on the current wherea-
bouts of the hostages and their apparent
physical condition, intelligence sources
said.
Extremely Frustrating Task
The task was extremely frustrating, the
sources said, because the small terrorist
cells in Lebanon proved extremely difficult
to infiltrate and reliable information very
hard to procure.
One problem the CIA encountered, ad-
ministration officials said. is that some ter-
-
? r? _ _11
rorist groups- in Lebanon demanded that
new recruits participate in assassinations
in order to prove their good faith. On at
least one occasion, the officials said, the
CIA withdrew an agent that had infiltrated
a terrorist group to avoid violating the ad-
ministration policy against assassina-
tions.
Separately, congressional investigators
continued delving into Mr. Meese's role in
!ate October in ordering a temporary halt
in, the FBI's investigation of Miami-based
Southern Air Transport, a cargo airline
suspected of carrying arms to Iran and the
Contras. Both the Justice Department and
the FBI. according to law enforcement-of-
ficials, prepared internal documents spell-
ing out how the probe was halted and then
resumed,
About a week after Mr. Meese, through
one of his top aides, requested and ob-
tained such a delay by the FBI on national
security grounds. senior bureau officials
asked Associate Attorney General Stephen
Trott if they could resume the probe, offi-
cials familiar with the discussions said.
Congressional investigators want to de-
termine whether Mr. Meese or his aides
contacted Vice Adm. Poindexter or other
NSC officials before the decision was made
to resume the investigation, and what may
have been discussed.
On ABC-TVs's "This Week With David
Brinkley" yesterday. Rep. Dante Fascell
D.. Fla, l. who will serve on the House se-
lect panel investigating the scandal, said
the committee doesn't want to prolong the
probe, but it won't rush "just to get it over
with." However. Rep. Richard Cheney IR..
Wyo.) said the panel should move "as rap-
idly as possible."
On the same program. Sen. Daniel In-
ouye ID., Hawaii), chairman of the Senate
select panel, said that "if it takes a grant
of immunity to get." important questions
answered, such a request would be consid-
ered at a later date.
Over the weekend, House Speaker-elect
Jim Wright ID,. Texas) said on .John
McLaughlin's "One on One" television
show that rather than giving any former
officials immunity, President Reagan
might prompt them to testify by promising
them a presidential pardon. Rep. Cheney
yesterday called the suggestion -prema-
ture" and ? probably "a bad political
move." Rep. Fascell said the idea "was
not a wise course to follow."
Separately, Vice President Bush con-
ceded that he is "no longer the front-run-
ner" for the 198S Republican presidential
nomination, according to news reports yes-
terday. In an interview with reporters who
accompanied him over the weekend to
Iowa. Mr. Bush was asked if he. felt a
sense of personal failure in not knowing
about the diversion of money to the Con-
tras. He responded that "I would be per-
fectly glad to accep- whatever my share of
responsibility is."
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