LETTER TO DANIEL K. INOUYE FROM DAVID L. BOREN AND WILLIAM S. COHEN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89T00142R000500670005-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 71
• Document Creation Date: December 27, 2016
• Document Release Date: August 31, 2011
• Sequence Number: 5
• Publication Date: January 29, 1987
• Content Type: LETTER

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SELECT COMMITTEE ON INTELLIGENCE
WASHINGTON. OC 205 10-44 7 5
January 29, 1987
The Honorable Daniel K. Inouye
Chairman
Select Committee on Secret Military Assistance
to Iran and the Nicaraguan Opposition
United States Senate
Washington, D.C. 20510
Dear Dan:
Pursuant to Senate Resolution 23, transmitted herewith
is the report prepared by the Select Committee on Intelligence
summarizing the results of our preliminary inquiry into the
sale of arms to Iran and the possible diversion of funds to
the Contras. In accordance with the terms of Senate Resolution
23, the report describes in narrative form information which
the Committee was able to learn during the course of its
study and identifies areas of inquiry that the Committee
believes should be among those pursued by the Special
Committee.
In transmitting this report to your Committee, we would
like to share briefly with you the limited objectives of the
Committee, a sense of how the Intelligence Committee conducted
the inquiry upon which the report is based, and where we stand
in terms of gathering relevant information.
At the outset, it should be emphasized that the study by
the Intelligence Committee was necessarily limited, both in
scope and in time. It was never the goal or the mandate of the
Intelligence Committee during this initial phase to conduct a
definitive investigation into this complex matter. Rather, the
.Intelligence Committee undertook its inquiry pursuant to its
responsibility for oversight of the nation's intelligence
activities. Furthermore, we sought to gather as much information
as possible while recollections were fresh and to collect in
one place as many documents as possible that would be pertinent
to any future comprehensive investigation. In addition, it was
our hope that this preliminary work would help the new Committee
to accomplish its task more quickly insofar as some of the
groundwork would have been done. The Intelligence Committee,
we believe, succeeded in accomplishing this goal.
For all intents and purposes, the Committee commenced its
inquiry on December 1 by issuing subpoenas to 15 individuals
and entities, as Nell as at series of invitations to appear,
and concluded the information gathering process on December 18.
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The Honorable Daniel K. Inouye
January 29, 1987
Page Two
During this period, the Committee received testimony from
36 witnesses and received thousands of pages of documents.
While it was impossible to include all details of documents
and all information received because of constraints of
time and resources, nonetheless, the complete record of
information received, including any additional data which
was received after December 18, is herewith transmitted to
the Special Committee in addition to our report.
While documents and testimony received by the Committee
during the course of its study of this matter were voluminous,
the work of our Committee was only preliminary in nature for
a number of reasons related primarily to the time constraints
described above. First, a number of potentially useful
witnesses could not be called by the Committee or were out
of the country and therefore unable to testify. Secondly,
while a total of 36 witnesses appeared before the Committee,
such key witnesses as Admiral John Poindexter, Lieutenant
Colonel Oliver North, Retired Major General Richard Secord,
Retired Colonel Robert Dutton, and Colonel Robert Earl
asserted their constitutional rights and declined to testify.
Director of Central Intelligence William Casey appeared
before the Committee just before this inquiry was commenced
and before the full scope of the situation was known by the
public or by the Committee, and prior to his unfortunate
illness. Accordingly, his testimony was general in nature
and was not under oath. Third, because of the pressure of
time, the witnesses that appeared before the Committee did
so without the benefit of prior interviews. Obviously, from
an investigative standpoint, this precluded a comprehensive
examination. And, when the witnesses did testify, consistent
with the Committee's objectives, the questioning was geared
toward information gathering purposes rather than toward
prosecution and confrontation. Fourth, except in two
instances, witnesses were not recalled to be questioned.
regarding information acquired by the Committee subsequent
to their initial appearance. Any such information or
documents, of course, are included in this transmittal
to the new Special Cc-' iccee. Fifth, again consistent
with the Committee's i^f-)rmation gathering purposes, subpoenas
were narrowly drawn. Co^seluently, there may still be
documents that we h,rv- -ant obtained that would be helpful
to you. And, while the- staff nas reviewed the vast majority
of documents that :,;.!re receiveJ by the CoTmi tt?e, including
all documents received -iron pidic sources, time constraints
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The Honorable Daniel K. Inouye
January 29, 1987
Page Three
have prevented a detailed analysis of'all documents from
private sources. Finally, as noted above, new information
has come to light since the close of the fact finding
period with respect to which the Committee could not follow
up if it was to complete this report to the new Special
Committee. This includes information both reported in the
media and contained in documents that are still being
delivered to the Intelligence Committee in response to our
subpoenas. It was felt that since the new Special Committee
has now been charged with overall responsibility for the
investigation, this information should simply be transmitted
to the new Committee rather than subjecting it to analysis
by the Intelligence Committee.
As noted above, the Committee heard testimony from 36
witnesses and gathered thousands of pages of documents from
both public and private sources. When witnesses testified
before us, they did so behind closed doors and before only
Senators and limited Committee staff. The Committee was
careful to sequester witnesses as a precaution against
coordinated or otherwise compromised testimony. Again, our
goal was to preserve the record for any future investigation.
With respect to the report itself, we have attempted to
set forth information receiv.ed by the Committee in an objective
manner, without evaluation." We believe that this is necessary
because any conclusions based upon such inherently limited
fact finding would be necessarily premature. Therefore, the
report seeks solely to be an accurate and fair representation
of the information which has been presented to us. We have
tried to indicate where there are discrepancies in testimony
about specific events or decisions and where there are gaps
in the information that we have learned. Indeed, it is
evident that this preliminary inquiry cannot provide a final
resolution to the fundamental questions facing the new
Special Committee.
Because so much attention has been given to earlier
staff drafts of reports which were not approved by the
Intelligence Committee, we would like to touch briefly on
why this report has been adopted by the Committee. First,
the Committee believes that its report should be primarily
a summary of the information that we have gathered and that it
could not appropriately reach conctus ns ur findings because
of its preliminary nature, other than to note discrepancies
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The Honorable Daniel K. Inouye
January 29, 1987
Page Four
and gaps and to identify areas of inquiry which might
merit future consideration by your Committee. We believe
that this report accomplishes that goal.
Secondly, since January 6, the testimony of a dozen
witnesses has been transcribed and made available for
preparation of this report and thousands of pages of
documents which had not been previously indexed and reviewed,
have now been analyzed. While much of this information
does not dramatically change the thrust of the report,
some of the information is clearly useful. If some of the
documents which were in our possession had not been reviewed
and analyzed before the issuance of a report, such an
omission could have adversely affected the credibility
of the Committee's work.
What we are presenting to you is, as we indicated,
still necessarily incomplete. We believe, however, that it
is as complete and consistent as it can be based upon the
information made available to us. This report describes the
essence of much of the documents and testimony that we have
gathered, and it is our hope and belief that the report,
along with the documents and testimony transmitted herewith,
will provide a useful tool to your Committee staff as you
begin your work.
We look forward to working with you in this vital
endeavor to determine all the facts regarding this matter and
the implications for our national security and our foreign
policy decision making process. If the Members or the staff
of the Senate Select Committee on Intelligence can be of any
assistance to you in the upcoming weeks and months, please do
not hesitate to call upon us.
Sincerely,
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Report on Preliminary Inquiry
January 29, 1987
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INTRODUCTION
In response to public and private reports and in accordance
with its responsibility for oversight of the nation's
intelligence activities, the Senate Select Committee on
Intelligence on December 1, 1986 undertook a preliminary inquiry
into the sale of arms to Iran and possible diversion of funds to
the Contras. It was not the goal of the Committee to conduct a
definitive investigation into this complex matter. Rather, the
Committee sought only to gather as much information as possible
while recollections were fresh and to collect in one place as
many relevant documents as possible.
Accordingly, two objectives were served: first, the
Committee learned a great deal of information that will be
extremely useful in the future as the Committee continues to
perform its intelligence oversight function; and, secondly,
testimony and documents have been preserved that the Committee
hopes will contribute to the Select Committee on Secret Military
Assistance to Iran and the Nicaraguan opposition as it performs
its investigative function. As a result, the Select Committee
should be able to save time by moving more rapidly through the
preliminary stages of its investigation and thereby get the facts
to the American public that much sooner.
Consistent with these twin objectives, and pursuant to
Senate Resolution 23 (100th Congress), this report is in two
parts: first, Section I summarizes in narrative form the
information given to the Committee during the course of its
inquiry which the Committee believes is materially relevant to
the mandate of Senate Resolution 23. Since the fact finding of
the Committee encompassed only 18 days, this narrative is
necessarily incomplete and thus endeavors only to provide a
general chronological framework of events derived from the
documents and testimony received by the Committee. Secondly,
again consistent with Senate Resolution 23, Section II sets forth
certain unresolved questions and issues that the Committee
recommends be pursued by the Select Committee.
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THE IRAN INITIATIVE
Origins
The Committee's inquiry suggests that the Iran initiative
originated as a result of the confluence of several factors
including:
- A reappraisal of U.S. policy toward Iran by the
National Security Council, beginning in late 1984,
with special emphasis on building a constructive
relationship with moderate elements in Iran;
- Deep concern at the highest level of the U.S. Government
over the plight of American citizens held hostage in
Lebanon;
- Israel's strong and continuing interest in furthering
contacts with Iran;
- Efforts on the part of private parties, including
international arms dealers and others.
Reappraisal of U.S. Policies
The formal reappraisal of U.S. policy toward Iran began in
late 1984 when the National Security Council issued a National
Security Study Directive (NSSD). An NSC official involved in the
policy review testified that he was disappointed with the
bureaucracy's lack of imagination in responding to this study
directive and with the absence of any recommendation for change
in policy.
In May 1985, the CIA National Intelligence Officer for the
Middle East prepared a five-page memo which went to the NSC and
the State Department, arguing for a change in U.S. policy that
would seek a more constructive relationship with Iranian leaders
interested in improved ties with the West. The memo argued in
part that the U.S. could permit allies to sell arms to Iran as
one of the alternative means of establishing Western influence so
as to offset growing Soviet inroads in Iran. Apparently using
the arguments in this memo two members of the NSC staff then
prepared a draft National Security Decision Directive (NSDD)
which proposed a departure in U.S. policy toward Iran.
Describing the Iranian political environment as increasingly
unstable and threatened by Soviet regional aims, the draft NSDD
stated that the U.S. is compelled to undertake a range of short
and long term initiatives to include the provision of selected
military equipment to increase Western leverage with Iran and
minimize Soviet influence.
National Security Adviser Robert McFarlane transmitted the
draft NSDD on June 17, 1985 to Secretaries Shultz and Weinberger
for their comment. State Department logs and Secretary Shultz's
testimony indicate that he responded in writing on 29 June that
the proposed policy was "perverse" and "contrary to our own
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interests." Weinberger made the following comment in the margin
of the draft, "This is almost too absurd to comment on."
According to Weinberger's testimony and that of Assistant
Secretary of Defense Armitage, Weinberger responded in writing
opposing such sales.
The Hostage Factor
Testimony by several senior Administration witnesses
indicate that during 1985, the Administration was occupied on a
regular basis with matters relating to terrorism and the state of
U.S. hostages. In particular, documents and testimony reflect a
deep personal concern on the part of the President for the
welfare of U.S. hostages both in the early stages of the
initiative and throughout the program. The hostages included
William Buckley, a U.S. official in Lebanon. Information was
received that in late 1985 the Syrians informed Ambassador Vernon
Walters that Buckley's Iranian captors had tortured and killed
him. The reports indicate that this information was conveyed to
Vice President Bush who found it very distressing. The
possibility of the release of U.S. hostages was brought up
repeatedly in conjunction with discussion of the program.
Israeli Interests
According to documents and testimony received by the
Committee, Israel had a strong interest in promoting contacts
with Iran and reportedly had permitted arms transfers to Iran as
a means of furthering their interests. A series of intelligence
studies written in 1984 and 1985 described Israeli interests in
Iran. These studies also reported Israeli shipments of non-U.S.
arms to Iran as well as the use of Israeli middlemen as early as
1982 to arrange private deals. involving U.S. arms. In an
interview with the Chairman and Vice Chairman of the Committee on
November 21, 1986, National Security Adviser John Poindexter
described Israel's interests in much the same terms.
McFarlane testified that he was never informed by CIA that
Israel had been engaged in such activities during 1981-85. In
fact, McFarlane, prompted by news accounts of such activity on
the part of Israel, asked the CIA -- and the DCI specifically --
several times whether the news reports were true. He was told
they were. not. McFarlane testified that if he had known that the
Israelis had previously shipped arms to Iran it would have made
him less responsive to later Israeli proposals to resume
shipments. However, in his first cable to Shultz in the matter,
he stated that it was obvious to him the Israeli channel into
Iran had existed for some time. One of the NSC staffers who
drafted the NSDD testified that he was aware of allegations that
Israel was selling arms to Iran but discounted such reports
because he believed they failed to offer conclusive evidence and
because Prime Minister Peres had assured the U.S. that there was
no such trade.
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Private Parties
Documents and testimony indicate that Adnan Khashoggi and
other international arms dealers, including Manucher Ghorbanifar,
were interested in bringing the U.S. into an arms relationship
with Iran, and had discussed this at a series of meetings
beginning in the summer of 1984 and continuing into early 1985.
These discussions reportedly included the idea of an "arms for
hostages" deal in part as a means of establishing each country's
bona fides. Khashoggi reportedly met with various leaders in the
Middle East to discuss policy toward Iran during this same
period.
In July 1985 Khashoggi sent McFarlane a lengthy paper he had
written dealing with the political situation in Iran. McFarlane
testified that he did not recall seeing these papers, but
indicated the existence of prior "think pieces" Khashoggi had
sent him on the middle East. A staff member of the NSC testified
that McFarlane gave the Khashoggi paper to another NSC staffer.
Michael Ledeen, a professor at Georgetown University, and a
part-time NSC consultant beginning in February 1985, appears to
have played a key role in the initial contacts between the U.S.
and Israel vis-a-vis Iran. According to Ledeen, while on a trip
to Europe in April 1985, he spoke with a European intelligence
official who had just returned from Iran. The official
characterized the internal situation in Iran as more fluid than
previously thought, and suggested it was time for the U.S. to
take a new look at Iran. He said that the U.S. should discuss
this with the Israelis, who the official believed were unusually
well-informed about Iran.
According to testimony by McFarlane, Ledeen apprised
McFarlane of a forthcoming trip Ledeen planned to Israel and
asked whether he was interested in knowing whether Israel had any
Iranian contacts. McFarlane testified that he responded
affirmatively. McFarlane stated that he was aware that Ledeen
was a friend of Israeli Prime Minister Peres. Ledeen testified
that he talked to McFarlane in April 1985 about the possibility
of raising contacts with Iran with the government of Israel and
that McFarlane agreed, and requested specifically that Ledeen get
Israel's perspective on fighting Iranian terrorism.
According to Ledeen, he traveled to Israel on 4-5 May 1985,
and discussed the situation in Iran with Prime Minister Peres.
Peres referred Ledeen to a retired Israeli intelligence official
who agreed with Ledeen that both countries needed to work
together to improve their knowledge of Iran. Ledeen testified
that he reported his talks in Israel to McFarlane in mid-May, and
that McFarlane subsequently arranged to task the Intelligence
Community to produce a Special National Intelligence Estimate
(SNIE) on Iran.
Secretary of State Shultz learned of Ledeen's activities
and, in a message dated 5 June, complained to McFarlane that
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Ledeen's contact with Israel had bypassed the Department of
State. Shultz noted that Israel's agenda regarding Iran "is not
the same as ours" and that an intelligence relationship with
Israel concerning Iran "could seriously skew our own perception
and analysis of the Iranian scene." He added that we "are
interested to know what Israel thinks about Iran, but we should
treat it as having a bias built in," and concluded that this
initiative "contains the seeds of...ser.ious error unless
straightened out quickly." McFarlane responded in a cable of
June 7 that Ledeen had been acting "on his own hook." With
regard to the Iran initiative, McFarlane stated "I am turning it
off entirely," but added "I am not convinced that that is wise."
On June 14, 1985, TWA Flight 847 was hijacked. According to
testimony by white House Chief of Staff Donald Regan, McFarlane
mentioned the possibility of requesting use of the Israeli
channel to Iran in briefings to the President during the crisis.
Regan said that this was his first awareness of any such
contacts.
According to testimony by McFarlane, on July 3, 1985, David
Kimche, Director General of Israel's Foreign Ministry and a
former intelligence officer, contacted McFarlane and reported to
him that Israel had succeeded in. establishing a dialogue with
Iran. Kimche stated that as a result of growing concerns with
Soviet pressures, Iranian officials had asked Israel to determine
whether the US would be interested in opening up political talks
with Iran. According to McFarlane, Kimche stated that the
Iranians understood US concerns regarding their legitimacy and
therefore had proposed to use their influence with radical
elements holding US hostages in Lebanon. Although there was no
specific Iranian request for arms, Kimche admitted to the
possibility that the Iranians might raise the arms issue in the
future.
In a cable from McFarlane to Shultz on July 14, 1985,
McFarlane stated that the proposal had also been raised several
weeks earlier by Peres to Ledeen. In the cable., McFarlane said
that he had instructed Ledeen to say we did not favor such a
process. McFarlane also reported that Kimche, on instructions
from Peres, had come to inquire about the US disinclination to
pursue the initiative and ask McFarlane to take up the proposal
with appropriate authorities. Then on July 14, "a private
emissary" from Prime Minister Peres came to press the point.
McFarlane further noted to Shultz the advantages and
disadvantages of the Kimche proposal, and gave a positive
assessment of the Iranian channel based upon his confidence in
his Israeli contacts. Finally, he stated that in the short term
seven hostages might be released and therefore that he tended to
favor going ahead.
Shultz responded to McFarlane by cable the same day, noting
that the US should make a tentative show of interest without
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making any commitment and should listen and seriously consider
the idea of private US-Iran relations. Shultz stated that
McFarlane should manage the initiative, while making it known to
the Israelis-that McFarlane and Shultz would be in close contact
and full agreement at every step.
McFarlane testified that he visited the President in the
hospital on either July 13 or 14, 1985.- According to testimony
by Regan, he also attended the meeting and believes that it
occurred three days after the President's operation (i.e., July
16 or 17). Regan further testified that at the meeting McFarlane
requested the President's authority to use an Israeli contact
with an Iranian as a channel to higher-ups in Iran. According to
Regan, McFarlane was vague about the specifics of the plan, and
the President then questioned McFarlane on his confidence in the
Iranian contact, Ghorbanifar. Regan testified that McFarlane
defended Ghorbanifar on the basis of Israeli assurances and the
President authorized McFarlane to explore the channel. Regan
testified that it was his own opinion that the release of
hostages would have been a collateral benefit of such an opening.
McFarlane testified that the plan he conveyed to the
President was essentially what Kimche had suggested. McFarlane
stated that he told the President that he would not be surprised
if arms entered into the relationship later. According to
McFarlane, the President was enthusiastic about the opening,
hoped it would lead to the release of hostages, and authorized
McFarlane to explore the plan.
In his testimony, McFarlane categorically denied any
discussion of Ghorbanifar with the President, recalling that it
was only in December that McFarlane became aware of Ghorbanifar's
identity. It should be noted, however, that McFarlane made
reference to Ghorbanifar in his July 14 cable to Shultz
describing the proposal. In describing his contacts with the
emissary from Peres and Kimche, McFarlane stated that the Iranian
officials named in the context of the proposal are an ayatollah
and "an advisor to the Prime Minister named Ghorbanifar."
Meanwhile, according to testimony by Ledeen, in early July
he was called by Kimche who said a friend, Al Schwimmer, was
coming to Washington and wanted to talk to Ledeen. Ledeen
testified that he met with Schwimmer in early July. Schwimmer
recounted a meeting he had attended a week or two before in
Europe with Kimche, Khashoggi and Ghorbanifar. Schwimmer said
Ghorbanifar had a lot of useful information about the situation
in Iran and that Ledeen should meet him as soon as possible.
According to Ledeen he reported his meeting with Schwimmer
to McFarlane. Ledeen told McFarlane he was going to Israel on
vacation from mid-July to mid-August, and would, if McFarlane
thought it appropriate, meet Ghorbanifar. Ledeen testified that
McFarlane agreed.
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Ledeen met Ghorbanifar in Israel in late July. Kimche,
Schwimmer and Yaacov Nimrodi, an arms dealer and former Israeli
military attache in Tehran, also attended. At the meeting
Ghorbanifar gave what Ledeen described as "a great quantity" of
information on Iran. Ledeen testified that Ghorbanifar said that
if relations between Iran and the US were to improve, each side
would have to send the other clear signals about its seriousness,
and that the Iranian signal could be a release of the hostages in
Lebanon (referring specifically to U.S. Government official
William Buckley) and cessation or moderation of Iran-sponsored
terrorism. According to Ledeen, Ghorbanifar said that for the
US, the only convincing gesture would be to help Iran buy weapons
it otherwise could not obtain.
According to documents received by the Committee, Kimche
phoned McFarlane on July 30 to request an August meeting.
According to testimony by Shultz, Kimche and McFarlane met at the
beginning of August 1985, at which Kimche indicated that the
Iranians not only wanted "a dialogue with America" but also
wanted arms from the US and TOW anti-tank missiles from Israel.
In return the Iranians could produce hostages.
The August-September Shipment of TOWS
On August 8, 1985 at a meeting of the National Security
Planning Group in the White House residence, McFarlane, with
Poindexter, briefed the President, the Vice President, Shultz,
Weinberger, Regan,-and Casey on the Kimche proposal to permit the
sale of TOWS to Iran through Israel. There is a divergence of
views as to whether approval was granted for the Israelis to ship
arms to Iran either at that meeting or subsequent to it. There
is also conflicting testimony on which of the participants
supported the proposal, although opposition to the plan by Shultz
and Weinberger is clear.
According to testimony by Regan, the President declined to
authorize-the sale of TOWS because of misgivings about
Ghorbanifar's credentials and'influence in Iran. Regan testified
that the other participants agreed it was premature to get
involved in arms sales to Iran. McFarlane, on the other hand,
testified that Ghorbanifar's name never came up at the August
meeting.
In a November 1986 interview in conjunction with the
Attorney General's inquiry, Shultz "dimly recalled" a meeting at
the White House residence in August on the subject of an Israeli
shipment of TOWS to Iran. In his testimony before the Committee
in December, however, Secretary Shultz said there was a meeting
on August 6, 1985 where McFarlane briefed the President on an
Israeli request for U.S. replenishment of Israeli TOW missiles
proposed for shipment to Iran. In return, according to Shultz,
the U.S. was to get four hostages and the entire transaction
would be deniable. Shultz said he opposed the proposal, but the
President did not make a decision.
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According to testimony by McFarlane, the transfer was
supported by Casey, Regan, and Bush while Shultz and Weinberger
opposed it. McFarlane testified that subsequent to the meeting
President Reagan approved the Israeli request to ship arms to
Iran and to purchase replacements from the U.S. Presidential
approval was on the condition that the transfers would not
contribute to terrorism or alter the balance of the Iran-Iraq
war. Although there is no written record of a decision at this
time, McFarlane testified that the President informed Shultz,
Weinberger and Casey of his decision.
According to his testimony, McFarlane believed at the time
that the President's decision constituted an "oral Finding,"
which was formally codified on January 17 in a written Finding.
McFarlane testified that when he and Attorney General Meese
discussed the legality of an oral Finding November 21, 1986,
Meese told him that he believed an oral, informal Presidential
decision or determination to be no less valid than a written
Finding. According to documents received by the Committee,
McFarlane, when interviewed by Meese, made no mention of
Presidential approval of the TOW shipment of August-September
1985 or of an "oral Finding." McFarlane did tell Meese that he
told Kimche at a December 1985 meeting in London that the U.S.
was disturbed about the shipment of TOWs, and could not approve
it.
One White House Chronology prepared in November 1986 simply
notes. that McFarlane conveyed to Kimche a Presidential decision
that a dialogue with Iran would be worthwhile. However, a second
White House chronology presents conflicting accounts about
whether the U.S. acquiesced in the Israeli delivery of 508 TOWs
to Iran on August 30.
According to testimony by McFarlane, Israel did not feel
bound to clear each specific transaction with the U.S. Israel
proceeded on the basis of a general authority from the President
based on a U.S. commitment to replace their stocks. Also,
Israel's negotiations on hostages would not necessarily require
U.S. approval.
According to testimony by Ledeen, when he returned to the US
in mid-August, 1985, McFarlane informed him that the program of
contact with Iran would go forward and that a test of the kind
Ghorbanifar had proposed would occur. Accordingly, McFarlane
told Ledeen to work out arrangements with Kimche for receipt of
the hostages. McFarlane said he believed at this time that the
sale of TOWS would secure the release of all US hostages.
Ledeen testified that he attended a meeting in Paris on
September 4 with Kimche, Ghorbanifar, Schwimmer and Nimrodi. The
discussions were in two parts: (1) technical questions about
transfers of weapons from Israel to Iran and getting the hostages
out of Lebanon; and (2) conversation with Ghorbanifar about
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events in Iran. Ghorbanifar told them they would soon see public
statements by leading Iranian officials making clear their
intention to improve US-Iranian relations. Subsequently,
according to testimony by Ledeen, in the second week of September
on the anniversary of the Iranian revolution, the President and
Prime Minister gave speeches in which the Soviets were attacked,
but not the U.S. Ledeen saw this as "in accordance with"
Ghorbanifar's prediction.
According to testimony from a senior CIA analyst, in early
September, 1985 Ledeen provided him with information on
Iranian-sponsored terrorism and on Ghorbanifar. According to
this analyst, this was the first time Ledeen had identified
Ghorbanifar by name to the CIA. According to testimony by
Ledeen, the subject of Ghorbanifar's bona fides first came up in
September 1985. However, Shultz testified that he saw an
intelligence report on July 16, 1985, two days after he cabled
McFarlane from Geneva,.which indicated that Ghorbanifar was a
"talented fabricator." Ledeen testified that he knew that the
CIA was suspicious of Ghorbanifar_, and that Ghorbanifar had
raised the subject himself, in one of their meetings. According
to testimony by Ledeen, it appeared to him that Ghorbanifar's
credentials were well-documented.
The Committee received testimony and documents, however,
indicating that the CIA had long been aware of Ghorbanifar's
suspect character. In August 1984 CIA had issued a notice to
other government agencies warning that Ghorbanifar was a
fabricator. Documents indicate CIA was aware, of one instance in
which Ghorbanifar had reportedly offered to provide intelligence
on Iran to a third country in return for permission from the
third country to continue the drug smuggling activities of
Ghorbanifar's associates with the country concerned.
According to the CIA analyst, North called him on September
9, 1985 and requested increased intelligence collection on
Lebanon and Iran. North told him there was a possibility of
release of American hostages. In mid-September North asked him
for intelligence collection on specific individuals in Iran who
were in contact with American officials. North later gave him a
very restricted distribution list for the intelligence collected,
which specifically left out the Department of State. North said
Shultz would be briefed orally by McFarlane. As the intelligence
began to come in, this senior CIA analyst did not understand all
the parties involved. However, he felt the intelligence clearly
showed that hostages and some form of arms sales were involved.
According to documents received by the Committee, the
shipment of 508 TOWs left Israel on August 30, 1985 transited a
third country and arrived in Iran on September 13. North later
asserted to Meese that he was totally unaware of the TOW shipment
at the time it occurred. He believed he first learned of it in a
November 25 or 26 conversation with Secord while in Tel Aviv.
North also claimed that he did not know who had otherwise been
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aware of the shipment. McFarlane told Meese that he thought he
learned of the shipment from Ledeen. He then informed the
President, Shultz, Weinberger, and Casey, but noted that the
shipment had not achieved the objective of release of all the
hostages. According to McFarlane, there was no official contact
between the U.S. and Israeli governments regarding the shipment.
On September 15, 1985, the Reverend Benjamin Weir was
released from his captivity in Lebanon. According to testimony
received by the Committee, there was reason to believe at the
time that Ghorbanifar played a direct role in the event. In
addition, Ledeen testified that it was clear to the Israelis that
there was a causal relationship between the September arms
shipment and Ghorbanifar's role in it and the release of Weir.
The view that the Iranians helped to secure Weir's release
appears to have been shared by McFarlane.
It should be noted that the Committee also received
testimony inconsistent with this description of events.
Secretary of Defense Weinberger testified in response to a
specific question that he knew nothing about any connection
between the release of Weir and Israeli arms sales to Iran.
Regan testified that McFarlane told the President -- in his
presence -- that the Israelis, "damn them," had sold 500 TOWS to
the Iranians without U.S. knowledge. Regan further testified
that he, the President, McFarlane and Poindexter decided to
"ignore" the incident except to "let the Israelis know of our
displeasure" and "keep the channel open." According to Regan's
testimony, this shipment of arms to Iran was not sanctioned by
the U.S. government.
One White House chronology states that after discussing the
matter with the President, it was decided not to expose the
action, thus retaining the option of "exploiting the Israeli
channel to establish a strategic dialogue."
The testimony of McFarlane is inconsistent with that of
Regan. McFarlane in testimony, disputed Regan's characterization
of his reaction to the TOW shipment and denied that the President
had ever expressed disapproval of the Israeli action. McFarlane
testified that the President was "elated" at Weir's release and
denied that the President had ever instructed him to reproach the
Israelis.
According to evidence received by the Committee,
concurrently with the arms shipment and hostage release -- and
perhaps connected with both -- was an airplane flight out of
Tabriz, Iran which made an emergency landing in Tel Aviv.
Ghorbanifar was very interested in this event, and a CIA analyst
studying the situation was convinced that there was a correlation
between Ghorbanifar, the aircraft flight to Tel Aviv, and the
release of Weir. The Committee has not established that there
was a correlation between these events.
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The November 1985 Shipment of HAWKS
After the first shipment of TOWs, Ledeen continued to be
active. He held meetings in the Fall of 1985 with Kimche,
Schwimmer, Ghorbanifar, and Nimrodi. These meetings reportedly
dealt with intelligence on the situation in Iran and who might
want to cooperate with the U.S. Ghorbanifar also discussed the
offer to get hostages released and the weapons that Iran needed,
including HAWK missiles. Iran demanded an arms shipment before
each release while the United States and Israel pushed for
release in advance of any further arms shipments.
It is clear from testimony that the Iranians believed the new
channel with the U.S. would be productive. For example, they
appeared to expect to receive sophisticated weaponry such as
Phoenix and Harpoon missiles at some point in the future.
Ledeen testified that he briefed McFarlane on these meetings.
He stated that this was a promising channel to pursue but that if
it continued on an arms for hostages basis, it would be difficult
to determine Iran's motives. Ledeen also suggested that if the
program were to continue there was a need to bring in an
intelligence service. Ledeen said McFarlane had a "bad feeling"
about the program and was going to stop it.
McFarlane testified that on November 17, while in Geneva for
the Summit, he received a call from Israeli Defense Minister
Rabin. Rabin requested assistance in resolving difficulties
Israel was having in a shipment of military equipment through a
European country onward to Iran. McFarlane told the Committee
that he called Colonel North, briefed him on the President's
August 1985 decision, and requested that he contact Rabin and
offer assistance.
According to notes from the Attorney General's Inquiry, North
said he suspected that the Israeli shipment McFarlane mentioned
consisted of U.S. arms. Reportedly, North told Meese that he
called Rabin and was told Israel was having difficulty in getting
clearance for a flight to a European country. Rabin told him the
flight involved moving "things" to support a U.S. rapprochement
with Iran. North said he then contacted retired Air Force Major
General Richard Secord, whom he described as a close personal
friend, for assistance. Secord was to try to arrange a large
cargo aircraft of neither U.S. nor Israeli origin for the flight.
McFarlane testified that North called him in Geneva to
explain the problem. The Israelis had failed to make proper
customs arrangements for a flight to the European country.
Further, the only aircraft they had available was an El Al plane,
which was believed unsuitable because of national markings and
documentation.' McFarlane testified that North told him McFarlane
might have to call the Prime Minister of the European country to
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get the necessary approval. McFarlane stated that he did so,
explaining to the Prime minister that a transfer from Israel to
Iran was in progress and that the U.S. Government would
appreciate assistance. North also contacted a CIA official and
obtained CIA's support in trying to arrange the necessary flight
clearances.
A White House electronic message from North to Admiral
Poindexter on November 20 indicates that North had a detailed
understanding of the HAWK plan by that time. This message
indicates that Israel would deliver 80 HAWKs to the European
country November 22 for shipment to Tabriz; five U.S. hostages
would then be released to the U.S. Embassy in Beirut; $18 million
in payment had already been deposited in appropriate accounts;
retired USAF Major General Richard Secord would make all
arrangements; and replacements would be sold to Israel.
According to documents received by the Committee, North continued
to keep Poindexter informed on a daily basis about plans for an
impending shipment of HAWK missiles to Iran and the release of
American hostages.
The Committee received evidence that McFarlane contacted
Secretary of State Shultz and Donald Regan and advised them that
hostages were to be released and some type of arms were to be
transported to Iran by Israel. This evidence indicates that
McFarlane told Regan and Shultz that Israel would buy
replacements for these arms from the United States. While Shultz
was advised that HAWK missiles were involved, Regan said that he
was informed of this fact sometime later.
Regan testified that McFarlane informed the President in
Geneva that some type of arms shipment was being considered, and
that if the operation were successful, hostages might be freed.
Shultz expressed reservations to McFarlane, but according to
Shultz, was told by McFarlane that he had cleated it with the
President.
'After many communications between Washington and this
European country, efforts to obtain flight clearances failed.
Secord was central to the effort to obtain flight clearances.
U.S. officials in the European country were instructed to expect
to be contacted by a Mr. "Copp" and to cooperate with him. The
messages between CIA Headquarters and the European capital
indicate Secord was essentially directing the effort to make
arrangements for the flight.
Several witnesses testified that North then asked the CIA to
identify a charter aircraft that might be used. In response, CIA
proposed using its proprietary aircraft and advised the company
to accept this NSC related mission.
The CIA proprietary flew from Israel in the latter part of
November, carrying 18 HAWK missiles identified as oil drilling
spare parts. According to testimony received by the Committee,
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there was speculation at the CIA that the cargo was actually
arms. When queried by nations responding to requests for
overflight clearances as to the nature of the cargo, the CIA
office again asked North, who reaffirmed that the flight was
carrying oil drilling equipment and was on a humanitarian
mission. According to copies of cables received by the
Committee, in order to overcome reservations of some countries to
granting flight clearances, U.S. officials in certain cases were
authorized to inform high host government officials that the
humanitarian purpose of the flight related to hostages and that
highest levels of the U.S. government would appreciate
assistance.
According to his testimony to the Committee and memoranda for
the record he prepared, it was on Saturday, November 23, that
John McMahon, Deputy Director of Central Intelligence, was first