The Fall of an American Junta

1.

In the first phase of the Iran-contra affair, the Iran and the Nicaraguan-contra covert operations moved along separate tracks. They came together in January 1986 because the same staff member of the National Security Council, Lieutenant Colonel Oliver North, had been put in active charge of both of them, and because he had seized on the “neat idea” of using profits made in the Iran arms deals to support the contras. Except for this coincidence, however, the two activities still continued to go their separate ways.

American clandestine support for the contras was an old story by 1986. The new point of interest was the evasion of the Boland Amendment by solicitation of contributions from private donors and “third countries.” The complicity of North and even President Reagan in these solicitations was just barely qualified by the care they took not to ask for or accept the money directly.

Of greater interest in the development of the junta was the change that took place in the dealings with Iran to accomplish an assortment of aims—among them the release of the hostages in Lebanon and a new US-Iran strategic relationship. Throughout 1985, the Americans had worked through Israeli intermediaries—David Kimche, director general of the Israeli Foreign Ministry; Amiram Nir, usually described as Prime Minister Shimon Peres’s antiterrorist expert; Adolph Schwimmer, a special adviser to Peres; and Yaacov Nimrodi, a former Israeli defense attaché in Iran, the latter two now Israeli arms dealers—and above all with the Iranian go-between Manucher Ghorbanifar. In the early stage of the affair, an NSC consultant on terrorism, Michael Ledeen, had been used to make contact with the Israeli government and Ghorbanifar. By the end of 1985, the results achieved by these intermediaries were so disappointing that a decision was made to change the procedure.

As a result, the American side determined to deal directly with such Iranians as were represented to be “moderate” or “pragmatic” elements desirous of restoring friendly relations with the West in general and the United States in particular. It was understood on both sides that arms deals were essential, though the Americans still had visions of using arms to support an anti-Khomeini movement and help it to gain power.

The direct American approach brought a critical new dimension to the affair. Heretofore the CIA had stayed out of any direct contact with the arms deals; Israel had sent US-made arms to Iran out of its own stocks with the understanding that they would be replaced. The Israelis still preferred to continue with this method, but now the CIA intervened. For the first time it dropped its guard and stepped into the next arms deal.

One feature of the new modus operandi was that it was designed to cut out some of the past intermediaries, Ledeen, Schwimmer, and Nimrodi, who were suspected, rightly or wrongly, of “a secret business arrangement” with Ghorbanifar.¹ In the simplified arrangement, the Israelis were represented by the more official Nir and Kimche, the Americans primarily by North and retired Major General Richard V. Secord, backed up by Casey and Poindexter.

To follow the next moves in this complex game of arms and hostages, we need to become better acquainted with three of the players.

2.

Retired Major General Secord was, among other things, an old Iran hand. He had spent twenty-eight years in the Air Force, four and a half of them as head of the US Air Force mission in Iran during the Shah’s reign. He had then headed the US Air Force International Programs Office in the Pentagon from 1978 to 1981, after which he was appointed deputy assistant secretary of defense in charge of the Middle East, Africa, and southern Asia. His official career had come to an abrupt halt in 1983, when he retired from the service in compromising circumstances. He was linked with the former CIA agent Edwin P. Wilson, convicted of selling arms to the Libyan regime of Mua’mmar Al-Qaddhafi. Secord’s suspected ties with Wilson were investigated for about three years; he was officially cleared of having broken any laws, but enough doubt remained about him so that he was denied a security clearance and could never get it back.

While chief of the US Air Force mission in Iran, Secord had made the acquaintance of Albert Hakim, an Iranian businessman. Hakim had spent his first twenty years in Iran, had come to California for one year in high school and three years at a technical college, then had returned to Iran. There Hakim had prospered selling US-made electronic equipment to the Iranian government, especially its air force. In 1978, just in time to avoid the Shah’s collapse, Hakim returned to the United States and continued to do the same sort of business on an increasingly large scale, large enough to start up a second enterprise in Switzerland. He became a US citizen and looked around for US government deals. When Secord retired in 1983, Hakim offered to take him in as a partner in his Stanford Technology Trading Group International on the west coast, described as doing international business in the field of security. Hakim operated with seven or eight different companies; one of them, Lake Resources, Inc., figured prominently in the future deals with Iran. Starting in 1984 Secord and Hakim had been making a handsome profit selling arms, with a markup of almost 30 percent, to one of the Nicaraguan contra groups headed by Adolfo Calero.

Secord first met Oliver North in 1981, when both were engaged in a sale of AWACS to Saudi Arabia. In 1984, the year of the Boland Amendment, as the first efforts were made to get around it, the CIA’s Casey thought of Secord and recommended him to North as “a man who got things done and who had been poorly treated.”² North proposed to Secord that he should set up “private commercial entities outside the United States” to help carry out covert activities. The plan, North said, had been “almost drawn up by Director Casey,” who was a much older hand than North at these devices.

One thing led to another. In November 1985, when the delivery of Hawk missiles from Israel to Iran via Portugal became a “horror story,” in North’s words, North called Secord to the rescue.³ As we saw in my previous article, Secord had managed to get a “proprietary” plane from the CIA and had sent off the wrong number of wrong missiles to Iran, though he was not blamed for the contretemps. In this way, as 1986 opened, Secord and Hakim were available for further duty in the service of the “Iran initiative” and rescue of the hostages.

Still indispensable, however, was Manucher Ghorbanifar, or, as he was familiarly called, “Gorba.” In this improbable story, he was its most improbable character.

By 1986, Ghorbanifar had been thoroughly exposed as a fraud and liar. In his Iranian incarnation, he was known to have been an agent of SAVAK, the Shah’s secret police, hardly a recommendation for an intermediary between the United States and the Khomeini regime.⁴ A European intelligence agency had brought Ghorbanifar to the attention of the CIA in 1980, the year after the Shah’s fall, but the information he had supplied had proved to be so untrustworthy that the CIA had put out a “burn notice” on him in 1984.⁵ Nevertheless, Ghorbanifar, who now operated out of Paris, soon began to figure prominently in the dealings by Israel and the United States with Iran. Michael Ledeen, who had been sent to Israel in May 1985 to find out what the Israelis knew about Iran, had been introduced to Ghorbanifar, with whom he had struck up a continuing relationship. To the CIA, Ghorbanifar was an “Israeli agent” who had been brought into the “Iran initiative” through the Israelis.⁶ Ledeen later told the Tower Commission that Ghorbanifar had quickly become “the driving force behind this whole thing,” the idea man for both the Israelis and the Americans, the one who claimed to be able to get things done.⁷

Yet Ghorbanifar seems to have been a marked man. When National Security Adviser Robert C. McFarlane was sent to London in December 1985 to check on Ghorbanifar, he was so “revolted” by him that he recommended having nothing more to do with him. But the Americans continued to have a great deal more to do with him. North said that he knew Ghorbanifar “to be a liar; I knew him to be a cheat, and I knew him to be a man making enormous sums of money.” But North admitted that he had relied on the judgment of the Israelis in deciding to deal with Ghorbanifar and those he represented.⁸ Clair George, the CIA’s deputy director for operations in charge of overseas clandestine operations, testified about Ghorbanifar: “We found him basically, to put it as simply as I can, uncontrolled. His information was unverifiable. In many cases we could prove it was not true.”⁹

Ghorbanifar was so deeply in trouble with the Americans that he was asked to come to Washington to take a polygraph test. Never one to underestimate his ability to talk his way out of any scrape, Ghorbanifar consented. On January 11, he took the test and failed on thirteen of the fifteen questions. The only questions he answered truthfully were his name and nationality. A report on his test stated: “He showed deception on virtually all of the relevant questions. He has lied/fabricated his information on terrorist activities and tried to mislead us concerning his relationship with the Farsi line inside Iran.”¹⁰

By this time one would think that the CIA and North would be through with Ghorbanifar. Within the CIA there were rumbles of disquiet. Clair George went to Director Casey in an attempt to get rid of Ghorbanifar. George related: “I said, ‘Bill, I am not going to run this guy anymore,’ which means in our language, ‘I will not handle him; he is a bum.”‘

Casey apparently thought that the CIA had so little to go by that Ghorbanifar was still indispensable. According to George, Casey had replied:

Well, look, there are levels of Ghorbanifar. Ghorbanifar knows endless things: hit teams in Europe, these Iranian terrorist centers [deletions]…plans to overthrow [deletions]…all these different things. Bill Casey said to me, “He has what appears to be valuable terrorist information.”¹¹

Once George let on about his opposition to Ghorbanifar, Casey cut him out of the case and turned it over to Charles Allen, the national intelligence officer for counterterrorism, in very much the way the secretaries of state and defense had been cut out after their opposition to the arms deals had been established.

Thus Ghorbanifar remained an essential part of the Iran-contra affair, because Casey thought that the Americans could not do without him. Ghorbanifar had had little to do with the Nicaraguan contras, except for that splendidly tragicomic moment in a London men’s room in January 1986, when according to North he had put the idea into North’s head of using profits from the Iran arms deals to pay for whatever the contras needed. Except for this excursion into the Nicaraguan side issue, Ghorbanifar’s part in the affair as a whole was restricted to Iran. Fortunately for him, the new American line of getting into direct contact with the Iranians was made to order for him.

Despite Ghorbanifar’s tribulations with the polygraph machine, Casey would not let go. He immediately asked Charles Allen to conduct a lengthy interview with Ghorbanifar to find out what he knew. On January 13, Ghorbanifar held forth to Allen for five hours. He claimed to have two highly placed contacts in Tehran, Prime Minister Mir Hossein Musavi-Khamenei and Oil Minister Qholam Reza Aqazadeh-Khol, who allegedly owed him substantial sums of money. They had supposedly spread the word in Iran that a long-term relationship with the United States was possible and was actually being negotiated. Ghorbanifar also professed to know that a third contact in Tehran had been photographed in “compromising situations with Western women” and could therefore be ruined if his flagrante delicto ever came out. But, he warned darkly, if a US-Iran understanding was not achieved soon, perhaps in a matter of days, Islamic terrorists would quickly strike again.¹²

Allen was impressed. He gave Ghorbanifar credit for being close to Iran’s prime minister, oil minister, and an official in the prime minister’s office. He cautioned that Ghorbanifar tended to exaggerate his connections but recommended taking more time to build “rapport” with him. Later that month, Ghorbanifar arranged for Allen to meet in the US with Hojjat ol-Eslam Seyyed Mohsen Khatami, a follower of Ayatollah Shirazi, who assured Allen that Ghorbanifar had connections “in key areas” of the Middle East. Gorba had again talked his way out of trouble.

There was one more narrow escape. On January 18, 1986, Clair George’s Operations Directorate put out another “burn notice” telling all and sundry to have nothing more to do with Ghorbanifar. But George was then taken to the White House and shown President Reagan’s finding of January 17, which implied to him that “in its practical sense you will be doing business with Mr. Ghorbanifar.” Gorba was on the way back with more influence than ever.¹³

As a talker, Gorba was vividly described by retired Major General Secord:

He had a boilerplate kind of salesmanship patter, which he put out very glibly, which talked about the strategic setting and things he knew Americans would like to hear: the Russian threat; the Iranians were being held hostage by the hostages and themselves, and so on; they needed to move on. But it was my impression that Ghorbanifar was more interested in business than he was in foreign policy.¹⁴

3.

The business with Ghorbanifar—and with Secord—was plotted at a meeting in the Situation Room of the White House immediately after the President’s signing of the January 17, 1986, finding. It was attended by a high-powered group, including National Security Adviser Poindexter, CIA General Counsel Stanley Sporkin, Lieutenant Colonel North, and Secord, the only private citizen there. The purpose of the meeting was to find a way to substitute the United States for the Israelis in the transfer of arms to Iran.

The plan turned out to be an American variant of the Israeli operation. The latter had transferred the arms from the Israeli government to an ostensibly private Israeli company, controlled by Schwimmer and Nimrodi, to an Iranian go-between, Ghorbanifar, and finally from Ghorbanifar to Iran. In this way both Israel and Iran had been shielded from doing business directly. The new US plan followed this pattern. The Department of Defense sold the arms to the CIA; the CIA sold the arms to Secord’s company; Secord sold the arms to Ghorbanifar; and Ghorbanifar sold the arms to Iran. Israel still had a part in the plan, but in a different way. Though the TOWs were now to come from American rather than Israeli stocks, Israel was expected to provide the base from which they were to be sent and a “cover” if the plan misfired. As Secord put it, “the Israelis could ‘take the hit,’ if you will.”¹⁵

Secord, who had not understood why as a private citizen he should have been invited to the meeting, now understood. In his own words, he was to be the “commercial cutout” for the deal.¹⁶ This arrangement later led to an interminable squabble over the money trail, as if it were essential to an understanding of the whole affair. The committee hearings and some journalistic accounts spent an unconscionable amount of time and effort on who got the money and how much, without ever coming to a final reckoning. Clearly Ghorbanifar, Secord, and Hakim were given the opportunity to rake off as much as they could get away with. Iran and the CIA refused to advance money for the transactions, with the result that Ghorbanifar and Secord had to scrounge around for funds to finance their ends of the deal. Both were playing dual roles, as representatives of their countries and as businessmen on the make. North professed to be too high-minded to care about money and left them to their own devices.

An agreement that was soon worked out with Ghorbanifar called for the delivery of five hundred TOWs to Iran, as a token of US good faith, after which US government officials were to meet face-to-face with Iranian government officials. If the meeting was a success, another five hundred TOWs were to go to Iran. If the hostages were finally released, Iran was to get 3,000 more TOWs; if not, no more TOWs.

The first, 1,000 TOWs were actually sent to Israel from Texas aboard two 707s obtained from a CIA “proprietary,” Southern Air Transport. They were then moved from Israel to Tehran in Israeli 707s, with all markings removed. They were chartered by Secord from the Israeli government and provided with special Southern Air Transport crews directed by Secord to take a hazardous route over the Red Sea in order to stay out of other countries’ airspace. Secord moved the 1,000 TOWs only after $10 million had been paid him for them. Ghorbanifar borrowed the money from the Saudi businessman Adnan Khashoggi, who deposited it in a Lake Resources account in a Swiss bank.

Secord described the financial arrangements of this deal. He paid $3.7 million to the CIA for the TOWs. He received $10 million from Ghorbanifar. His expenses came to $850,000. He used $2 million to insure the Israeli planes used in the operation, which returned safely so that the insurance money went back into the account. Thus his profit was $5.45 million or better than 200 percent.¹⁷

Ghorbanifar also made a nice profit. He paid Secord $10 million for the TOWs; North was told that Ghorbanifar charged Iran $13 or $13.5 million, perhaps $14 million, for them.¹⁸ Khashoggi was repaid $12 million, a profit of $2 million for him. Ghorbanifar must have pocketed the rest.

If the Americans had expected any hostages to be released in return for these TOWs, they were sorely disappointed. The prize was the devoutly wished-for face-to-face meeting with a small group of Iranian officials at an airport hotel in Frankfurt, West Germany, between February 24 and 27, 1986. It is hard to tell the story of this meeting with a straight face.

The “Americans” present were North, Secord, Hakim, Amiram Nir, and an anonymous chief of the CIA’s Near East section. North pretended to be “Mr. William P. Goode.” Secord was introduced as “General Adams,” though no mention was made that he was no longer on active service. Hakim, who had been brought along to translate, was the biggest problem. He knew that his fellow Iranian, Ghorbanifar, was bound to recognize him. To foil Ghorbanifar, Hakim, with little hair on top, was fitted out with a gray wig and glasses. He was passed off as Ibrahim Ibrahim, of Turkish descent, who knew the Farsi language so well that he was the personal interpreter of the President of the United States. If we can trust Hakim, even Ghorbanifar was fooled. The Israeli Nir posed as an American official. The chief of the CIA’s Near East section, known in the record only as C/NE, was there evidently as an observer, and we are not told how he was masquerading at the meeting. Fortunately, the Iranians did not seem to recognize that three of the five “Americans” were impostors without the slightest authority to act as official representatives.

Of the Iranians, the only one who can be surely identified is the inevitable Ghorbanifar. He had produced three Iranian officials, one from the prime minister’s office and two colonels from Iranian military intelligence. The prime minister’s aide was so impressed with Hakim, because he professed to be President Reagan’s personal interpreter, that he took him aside and asked him to tell the President that he—the President—would get a “personal payment,” if he agreed to sell the superior Phoneix missiles to Iran. Hakim says that he put the Iranian official straight by telling him that that’s not the way things are done in the United States.

This Iranian group was known thereafter as the “First Channel.” Still anxious to prove their good faith, the American side provided intelligence information useful to Iran against Iraq. “General Adams” and the CIA chief of staff of the Near East section briefed the two Iranian colonels on a small section of the Iran-Iraq border with some details about the order of battle and one annotated high altitude photograph. The briefing was intended to show the Iranians what the United States could provide, if an exchange intelligence agreement was reached between the two countries.¹⁹

Otherwise, the meeting seems to have produced little, except that the two sides had finally met. The only concrete result was a decision to hold another meeting in the near future. It was eventually realized that the First Channel had been of almost no use, except for providing Iran with 1,000 TOWs and presenting Secord and Ghorbanifar with huge profits.

The new national security adviser, Admiral Poindexter, was so disappointed with the failure to get any hostages released as a result of the arms shipments of February 1986 that he favored “standing down,” and he held up further action for a while. But Casey of the CIA was still anxious to continue and sent him a memorandum recommending that “we push ahead.” The Israelis also used their influence to persist with attempts to gain a foothold in the Iranian government. Poindexter was admittedly “torn” but fell over on the side of going ahead. The “Iran initiative” rose and fell and rose again, as if it had become inured to failure.²⁰

4.

During the same month, February 1986, Admiral Poindexter faced an even more critical decision. It was put to him by the irrepressible Lieutenant Colonel North, who had spent the previous January 22 and 23 in London with Nir, Secord, and Ghorbanifar.

According to North, Nir had been the first to suggest that “there be a residual, and that the residual be applied to the purpose of purchasing replenishments, and supporting other activities.” By residual, North meant any profit on the sale of arms to Iran—profit that could be diverted for the support of other purposes and so came to be known as the “diversion.” If Nir was the first to think of such a diversion, he did not at this time connect it with the Nicaraguan contras—at least as North tells the story, in the absence of an Israeli version. A later story in The Wall Street Journal of September 21, 1987, attributed to an Israeli chronologer, gave a somewhat different version—that North had discussed the diversion with an Israeli official in New York in December 1985. The substance is much the same, whichever version proves to be more accurate.²¹

Nir, according to North, had apparently started something that Ghorbanifar finished. This is how North testified about the birth of the diversion to the contras:

Mr. Ghorbanifar took me into the bathroom [in London], and Mr. Ghorbanifar suggested several incentives to make that February transaction [meeting face-to-face with Iranian officials] work, and the attractive incentive for me was the one he made, that residuals could flow to support the Nicaraguan resistance. He made it point blank, and he made it by my understanding with the full knowledge and acquiescence and support, if not the original idea, of the Israeli intelligence services.²²

There is only North’s speculation that Ghorbanifar’s idea of the diversion had been Israeli in origin. In any case, North made the idea his own; it is striking how easily Ghorbanifar could work through him. As North later put it: “And I saw that idea, of using the Ayatollah Khomeini’s money to support the Nicaraguan freedom fighters, as a good one. I still do. I don’t think it was wrong. I think it was a neat idea. And I came back, and I advocated that, and we did it.”

North was not altogether right about the Ayatollah Khomeini’s money; it may have come from the Ayatollah, but it was now the money of Secord and Hakim, to whom it had been paid and who had possession of the profits. These two, as North knew, were also running a business that was not altogether philanthropic. Since North would not bother about money, the contras were likely to get only as much of the Ayatollah’s money as Secord and Hakim were willing to part with.

After returning from London, North reported to Poindexter some time in February 1986 on the result of his trip. As he was finishing, North said something to this effect, as Poindexter recalled: “Admiral, I think we can—I have found a way that we can legally provide some funds to the Democratic resistance through funds that will accrue from the arms sales to the Iranians.” It was North’s way of telling Poindexter about the “residuals” or “diversion.” Poindexter assumed that it was North’s own idea. Poindexter related: “I thought about it for several minutes while he was standing there.” It was a new idea for Poindexter.

After thinking about what authority I had, what the President would do if he were asked, the controversy that would exist if this became public, I considered all these factors and at the end of conversation, I told Colonel North to go ahead, because I thought it was a good idea. In my view, it was legal. It was very similar to the third country and private support for the contras. And in my view it was an added benefit of the Iranian project.

Poindexter said that he had immediately realized how disastrous it would be for the truth about the diversion to leak out—so disastrous that he knew that he would have to resign. “And I was prepared to do that.” Poindexter even cautioned North not to tell anyone about the diversion plan, not even CIA Director Casey. North proceeded to tell Casey about it almost immediately.

Among the strange aspects of this entire affair one of the strangest is Poindexter’s effort to explain it. Poindexter was asked why he had not made President Reagan aware of the diversion plan and had not asked the President for his approval. Poindexter admitted that he had briefed the President “on most all aspects of all the projects that Colonel North was involved with.” But not this one. In fact, it was the only one of its kind that he had not brought to the President. Was it an “aberration”? Yes, he said, “it was unusual.”

Why had he not told the President in this particular case? Poindexter gave two different reasons. One of them was that the diversion plan was inherent in previous activities and therefore did not really need further approval:

This clearly was an important decision, but it was also an implementation of very clear policy. If the President had asked me, I very likely would have told him about it. But, he didn’t, and I think it’s—you know the important point here is that on this whole issue, you know the buck stops here with me. I made the decision, I felt that I had the authority to do it. I was convinced that the President would, in the end, think it was a good idea. But I did not want him to be associated with the decision.

Or the diversion plan was merely a variant of other current ways of funding the contras:

I was aware that the President was aware of third-country support, that the President was aware of private support. And the way Colonel North described this to me at the time, it was obvious to me that this fell in exactly the same category, that these funds could either be characterized as private funds because of the way that we had—that Director Casey and I had agreed to carry out the [January 17, 1986] finding, they could be characterized as private funds, or they could be characterized as third-country funds.

This type of reasoning makes something of a mystery of why Poindexter did not treat the diversion as if it were all in the day’s work of supporting the contras. If the President was aware of all the other dodges to evade the Boland Amendment, why could he not have been made aware of this one?

Poindexter’s second reason, if it is to be believed, can be taken as an attempt to answer this question:

Now, I was not so naive as to believe that it was not a politically volatile issue. It clearly was because of the divisions that existed within the Congress on the issue of support for the contras, and it was clear that there would be a lot of people that disagree, that would make accusations that indeed have been made. So, although I was convinced that the President would approve, if asked, I made a very deliberate decision to insulate him from the decision and provide some future deniability for the President if it ever leaked out. Of course, our hope was that it would not leak out.²³

In effect, Poindexter’s second reason was entirely political. It was the same reason that he had given for destroying the finding of December 5, 1985—“because I thought it was a significant embarrassment to the President, and I wanted to protect him from possible disclosure of this.”

It is hard to know what to make of Poindexter’s explanations. He was the least believable of all the witnesses, a seemingly cold, hardened, impassive military bureaucrat. For a person of his attainments, he confessed to having a remarkably feeble memory; he repeatedly warded off pertinent questions with the answer that “the thought had not crossed my mind.” Yet he had graduated first in his class of some 900 at the Naval Academy, had obtained a doctorate in nuclear physics at the California Institute of Technology, had been executive assistant to the chief of naval operations, had joined the staff of the National Security Council as military assistant to the national security adviser in 1981, had risen to deputy adviser in October 1983 and to adviser in December 1985. He had been noted for an exceptionally keen memory, which seemed to desert him at the hearings.

The decision to divert Iran profits to the contras was so central in the hearings and in the tumult over its disclosure that Poindexter’s explanation of his own role begs for something more than he confessed to. If the diversion was nothing more than the “implementation” of already existing policy and could be justified as but another example of private or third-country support (with Secord the private and Iran the third country), all of which the President knew about and had approved, the diversion was nothing to worry about.

Yet we are also told that Poindexter immediately considered the disclosure of the diversion to be so damaging to the President that Poindexter took it upon himself to become the sacrificial lamb by resigning. This form of self-immolation can be explained only if Poindexter already knew that the diversion was such a flagrantly illegal act that it could not be defended on any ground. The President had to be given “absolute deniability”—the term Poindexter preferred to “plausible deniability” favored by North—to prevent the whole presidential house of cards from collapsing. Yet Poindexter also volunteered that he would most likely have told the President all about it if the President had asked him. Just a little more curiosity on the President’s part and he would have had to take responsibility for the diversion.

There is more to this puzzle. The main reason, we are told, why Poindexter acted the way he did was that he was convinced that he knew that the President would have approved if asked. This assurance cannot be lightly dismissed.

The national security adviser, after all, met with the President for a half hour at 9:30 in the morning every working day. Usually present at these briefings were the President, vice president, chief of staff, national security adviser, and deputy adviser. As deputy adviser and adviser, Poindexter had been present at these briefings for more than two years and had himself briefed the President for the past two months. Poindexter also said that he would often spend several additional hours a day with the President at meetings dealing with national security.

In effect, there was no one at this time who more than Poindexter could justifiably say he knew what the President wanted in order to keep the Nicaraguan contras alive “body and soul.” In this affair, Poindexter was the closest thing to the President’s alter ego. When Poindexter’s attention was directed to the President’s later statement that he would not have approved of the diversion if he had known about it, Poindexter replied cynically: “I understand that he said that, and I would have expected him to say that. That’s the whole idea of deniability.”

Poindexter was somewhat in the position of hearing the kind of implied instructions that Henry II gave his knights about Archbishop Becket.

5.

The meeting of “Americans” and Iranians in Frankfurt in February 1986 was only the first of many frustrations. The main benefit claimed for it was that it had been held at all and that another such meeting had been agreed on. The follow-up was not easy to arrange.

For the Americans, the time had come to cut out Ghorbanifar and Hakim as well as Schwimmer, Nimrodi, and Ledeen. The first two were far more difficult to shake off than the last three. Far from being cast off, Ghorbanifar remained in the center of the Iran connection. Hakim also hung on, but his place as translator was taken by a retired CIA Farsi-speaking agent, George Cave, who was put on contract. Amiram Nir had taken over as the officially authorized Israeli go-between. Secord continued to get things done for North.

North, Cave, and the CIA’s anonymous C/NE met with the inescapable Ghorbanifar in Paris on March 8, 1986, to see what could be salvaged from the February meeting. The three Americans were now confronted by a new demand from the Iranians through Ghorbanifar—no longer for TOWs but for 240 items of spare parts for Hawk missiles. Cave was disgusted and reported the experience as “a bag of worms.” Poindexter was so discouraged by North’s report that he wanted to forget about the whole thing. McFarlane, who was still very much in the picture despite his retirement, had written to North: “Gorba is basically a self-serving mischief maker. Of course the trouble is that as far as we know, so is the entire lot of those we are dealing with.” As usual, all these misgivings counted for nothing against the President’s desperate eagerness to do something for the hostages.

At first a meeting was supposed to be held at Khark Island in the Persian Gulf in early April; then Ghorbanifar reported that the Iranians preferred Tehran in May. Again North expected a release of the hostages in return for TOWs and Hawk spare parts. Ghorbanifar even intimated to North that Speaker Rafsanjani was coming as head of the Iranian delegation. The negotiations for the Tehran meeting were long and tortuous, always going through Ghorbanifar. Distrustful as they were of Ghorbanifar, the Americans thought they could not do without him if they wanted to make direct contact with top Iranian officials. As North put it, “he is still the only access we have to the Iranian political leadership.” The United States was not only hostage to the hostages; it was hostage through the hostages to Ghorbanifar.

At this point, in early April 1986, North sent Poindexter one of his lengthy memoranda for the purpose of bringing him and President Reagan up to date on the negotiations.

It was the later infamous “diversion memorandum.” Five pages were devoted to a blow-by-blow account of past dealings with Iran aimed at establishing a long-term relationship with the United States and getting the release of the hostages. Toward the end, North unluckily added this incriminating paragraph:

$12 million [of residual funds to be obtained from the next sale of arms to Iran] will be used to purchase critically needed supplies for the Nicaraguan Democratic Resistance Force. This materiel is essential to cover shortages in resistance inventories resulting from their current offensives and Sandinista counter-attacks and to “bridge” the period between now and when Congressionally-approved lethal assistance (beyond the $25 million in “defensive” arms) can be delivered.

It was one of five memoranda in which North claimed that he had included mention of the diversion. This one, like the others, ended with a recommendation that the President should approve or disapprove it. It was unsigned, but North later admitted that it was his work. Only one copy was later found, and it lacked any sign of presidential approval or disapproval. The memorandum did nothing to show what the President’s attitude had been, but it was enough to reveal that North had contemplated using profits from Iran arms sales to support the Nicaraguan contras.

Since this memorandum was known only to North and Poindexter, who as usual could not remember it, the diversion scheme made no difference to the imminent negotiations with the Iranian representatives. It is tempting to speculate what might or might not have happened if North had omitted his somewhat gratuitous paragraph. Without a “diversion memorandum,” the politicos of the Reagan administration might not have panicked and might have been able to get away with a well-practiced application of “damage control.”

The confrontation between the US and Iran in Tehran, May 25–28, 1986, was the most critical opportunity for both sides to understand each other. It therefore bears close scrutiny for what they tried to do and why it failed.

The American delegation was headed by former national security adviser McFarlane, pressed into service again for the occasion, accompanied by North (alias “Goode”), Cave (alias “O’Neil”), Howard J. Teicher of the NSC staff (alias not given), the Israeli Amiram Nir (alias not given), and a CIA communicator. They apparently used Irish passports, later protested by the Irish government. McFarlane was sent off with strict instructions about the kind of deal he was expected to make. It was, as his orders read, “all or nothing.” If all the hostages were released, Iran was to get all the Hawk spare parts it wanted. If the hostages were not produced, Iran was to get nothing. Tempers were wearing thin in Washington—“you may tell them that the President is getting very annoyed at their continual stalling.”

Nevertheless, the group came in an airplane that also carried a quarter of the Hawk missile parts expected by the Iranians, in addition to a Bible signed by President Reagan, an odd gesture toward fanatical Shi’ites, and a chocolate cake from a kosher baker in Tel Aviv (said to be a joke cooked up by North and Ghorbanifar).

Their arrival at the airport in Tehran on the morning of May 25 was not auspicious. No one was there to receive them. After waiting more than an hour, there appeared none other than Ghorbanifar and someone from the Iranian prime minister’s office. The Americans were put up in the local Hilton Hotel, and the first meeting took place that same afternoon. Meetings—and misunderstandings—went on almost continuously for the next three days.

Much of the trouble, the Americans believed, was attributable to Ghorbanifar. As usual, he had led both sides to expect too much. He kept telling the Americans: “The hostages will be released and things are going in the right direction and don’t worry.” He had told North that they were going to meet with Iran’s top ministers, including Speaker Hojatolislam Hashemi Rafsanjani, Prime Minister Mir Hossein Musavi-Khamenei, and President Ali Khamenei. Instead, the Americans first met with third- and fourth-level officials who were, according to McFarlane, “timid and fearful.” Most of the later discussions were carried on with someone described as a more qualified “senior foreign affairs adviser,” apparently head of the Majlis, or parliamentary, foreign relations committee but one who had no authority to make any commitment. The Iranians, on the other hand, had apparently been promised that the Americans would arrive with half of the desired spare parts on their plane. When the Americans came with only a quarter of the parts, the Iranian adviser could not complain often enough that the Americans had deceived them. McFarlane sent back word to Washington giving Gorba credit for having “brought us to the beginning of a dialogue,” but “he has done it with considerable hyperbole, occasional lies and dissembling.”

McFarlane was for the most part interested in the hostages, the Iranians in the spare parts and eighteen additional radars. Each side tried to convince the other of their honorable intentions and their mutual distrust of the Soviet Union. In the end, it was clear that both sides had come to their long-awaited face-to-face encounter with very limited room for movement. McFarlane was hemmed in by his instructions to get the hostages or get out. In the Iranian view, it was necessary for the United States to provide Iran with large-scale military support without prior conditions, such as release of the hostages or a meeting with top ministers. Then and only then might conditions be ripe in Iran for doing any of the things that the Americans wanted.

On the morning of the last day, the Iranian official finally brought news from the hostage-takers in Beirut. They demanded Israeli withdrawal from the Golan Heights and South Lebanon, the repossession of East Beirut by the Lebanese Shi’ite “Lahad” forces, the release of the seventeen so-called Da’waa prisoners convicted of terrorism in Kuwait, and all expenses for the hostage-taking paid by the United States. Even the Iranians had found these terms too much.²⁴

At this time, McFarlane and the Iranian adviser found out why they had been misunderstanding each other. McFarlane confronted the Iranian with the terms of the supposed arrangement that had brought him to Tehran—a highlevel US delegation to bring a portion of the items requested by Iran, prompt release of the hostages, the balance of the items sent as soon as payment for them was received. The Iranian “became somewhat agitated” and wanted to know who had assured the Americans of this arrangement. Gorba, answered McFarlane. The Iranians had been told of a quite different arrangement—that the United States would make all the deliveries before any release of the hostages took place. Who had given them this version? Gorba had given it to them in writing.²⁵

A draft agreement was actually worked out on the evening of May 27. It provided for the American delivery of the remainder of the Hawk spare parts by 10 AM, May 28, in return for a pledge by Iran “to cause the release and safe return of the living American hostages” not later than 4 AM that day. If the hostages were released, the US government also promised to deliver two radar sets compatible with the Hawk missile system. If all went well, both governments agreed to “a continuation of a political dialogue to be conducted in secrecy” until both sides agreed to make it public. The future dialogue was to include discussions of the Soviet Union, Afghanistan, Nicaragua, and other topics. In addition, both sides agreed that these discussions “will include consideration of further defense needs of Iran.” To provide a secure channel of communication, the United States promised to place a satellite communications equipment team secretly in Tehran.

At this late hour, the Iranians finally brought some good news. The Lebanese hostage-takers had reduced their demands—no more was said about Israel’s withdrawal from the Golan Heights or South Lebanon or the Shi’ite takeover of East Beirut. Kuwait’s release of the Da’waa prisoners was the only sticking point. McFarlane was not encouraging; the United States had to respect other countries’ judicial processes. The Iranian adviser tried again. If a second US plane, already loaded with the rest of the arms, arrived before the morning of May 28, the US hostages would be freed by noon. McFarlane promised to seek President Reagan’s permission.

This possible understanding fell apart almost as soon as it was made. On the night of May 27, the Iranian adviser was apparently backing away. What about the Kuwaiti prisoners, he wanted to know. North tried to appease him with a statement that the United States would make every effort to achieve their release as soon as possible. Just before midnight, McFarlane decided that “they’re just stringing us along.”

Early next morning, May 28, the Iranians came with another inducement—they thought that they could get two of the hostages out. But McFarlane had made up his mind. As the Americans were boarding their plane to take off at 8:45 AM, the Iranian official pleaded: “Why are you leaving?” McFarlane replied gruffly that it was the fourth time the Iranians had failed to honor an agreement. “The lack of trust will endure for a long time,” were McFarlane’s parting words. “An important opportunity was lost.”

Thus ended the rendezvous in Tehran. I have gone into this episode in some detail because it came closest, despite its shortcomings, to some kind of understanding between the United States and Iran. Each side could blame the other for the breakdown. Neither was negotiating at a sufficiently high level. McFarlane, himself a former national security adviser, wanted to deal with the Iranian speaker, prime minister, and president, instead of an adviser. The Americans left feeling that the Iranians did not, after all, control the fate of the hostages, whatever influence they may have had in Beirut. The Iranians needed the arms so desperately that they seemed genuinely sorry to see the Americans go abruptly. McFarlane had been sent out with such rigid instructions that he could not accept the release of only two hostages, even if he had believed that they could be produced in a matter of hours. Ghorbanifar, who had brought on much of the muddle, blamed McFarlane for the failure and accused McFarlane of wanting to get him out as the middleman.²⁶ The trip had gone ahead with hardly any preparations at all—or else Ghorbanifar may be said to have made all the arrangements.

My own sense is that a US-Iran understanding never had a chance. Though the Americans emphasized that they wanted to achieve a long-range relationship with Iran, they saw the hostages as the obstacle that had to be cleared out of the way first. The hostages thus took precedence over any other consideration. To the Iranians, the hostages were merely a nuisance of little concern to them or else a bargaining chip. The equipment the Iranians demanded was not anywhere near enough to make a substantial difference in the war with Iraq. Spare parts and a few radars could only have been regarded as a first installment for drawing the United States into large-scale military support of Iran. Feeling themselves aggrieved by the US support of the Shah’s regime, the Iranians had convinced themselves that the United States must first buy its way back into Iran’s good graces. Mutual misunderstanding could hardly have gone further.

One more thing happened on the return flight from Tehran. When the plane carrying the disappointed Americans landed at the airport in Israel, North tried to cheer McFarlane up. According to McFarlane: “North said, well, don’t be too downhearted, that the one bright spot is that the government is availing itself of part of the money for application to Central America, as I recall, although I took it to be Nicaragua.” In this way McFarlane, who was not supposed to know, learned of the diversion. According to North, he was the third one—after Poindexter and Casey—to be told “the deepest, darkest secret of the whole activity.”

6.

Despite the Tehran fiasco, neither side would let go, the Iranians because they wanted the Hawk spare parts and radars so desperately, the Americans because they wanted the hostages just as much. Ghorbanifar tried to persuade the Iranians that it was still possible to get the remaining spare parts and radars from the United States. Haggling went on in telephone conversations between Cave and an Iranian official, apparently an aide to the Iranian prime minister. Each side insisted that the other had to take the first step—Cave that the hostages had to be released and then the equipment delivered, the Iranian that two hostages would be released when the spares arrived and two more with the radars. In a later conversation, the Iranian offered to deliver the four hostages for all the equipment, two hostages for half. It was never clear that the Iranians could have delivered them. The telephone conversations went back and forth, without any clear resolution of the problem.

The ineffable Ghorbanifar now introduced another obstacle. He had given the Iranians a price for the spare parts in anticipation of a delivery, which was still supposed to go through him. Unfortunately, the Iranians had some sort of price list on microfiche, which showed that Ghorbanifar was asking them for an exorbitant amount. Ghorbanifar blamed the Americans and, anyway, he pleaded that he was close to being ruined financially. The Iranians complained that they were again being exploited and victimized. To his Iranian contact, Ghorbanifar sent a long letter of self-justification in which he plaintively explained that he had “encountered great difficulties and many material, spiritual, and prestige problems solely due to friendship, good intentions, honesty, belief, and trust.”²⁷

Then, on July 26, 1986, the Reverend Lawrence Martin Jenco, head of the Beirut office of the Catholic Relief Services, who had been taken hostage in January 1985, was released. It was an evident effort to renew the connection. Other feelers were reported that month by foreign government officials visiting Tehran to the effect that Iran wanted friendlier relations with the United States. CIA Director Casey saw these signs as vindication of his faith that Ghorbanifar and the Israelis were able to get things done on behalf of the American hostages.

Casey had a special reason for being willing to pay almost any price to free the hostages, especially one of them, the CIA’s Beirut station chief, William Buckley, who had been kidnapped in March 1984. Reports of Buckley’s torture and interrogation by the hostage-takers made Casey all the more anxious to get him out. It was first announced by the “Islamic Jihad” that Buckley had been executed in October 1985; but two of the freed hostages, Reverend Jenco and David Jacobsen, thought he had probably died the previous June of pneumonia-like symptoms brought on by his weakened condition.

Iran was rewarded for the release of Reverend Jenco with the delivery on August 3, 1986, of the Hawk spare parts. As usual, Iran paid Ghorbanifar; Ghorbanifar paid Secord; Secord paid the CIA; the CIA paid the Department of Defense. Secord paid $6.5 million for the spare parts. He charged Iran $15 million. Secord’s profit was $8.3 million. ²⁸

In this period, as in the past, Iran used the hostages as bait. The release of Reverend Jenco paid off with the delivery of the spare parts. This exchange proceeded in just the way the Iranians had sought to have it go—so many weapons for so many hostages. That the Reverend Jenco could be obtained by Iran just when a gesture of conciliation was needed made the protestations of Iran vis-à-vis the hostages very hard to accept. Iran seemed to play the game of claiming not to control the hostages in order to keep them in reserve and produce one whenever it would serve an immediate purpose. For every lucky hostage released others had to stay behind so that the game could continue.

And still neither side would let go.

The next encounter with Iranians was the finale. It came to be called the “Second Channel,” as distinguished from the earlier meetings in February and May 1986. One difference was that the First Channel had been Ghorbanifar’s work; the second was that of his compatriot and rival, Hakim.

Ever since Ghorbanifar had failed to deliver at Frankfurt and Tehran, Secord and Hakim had been scheming to show that they could do better. They agree, in their testimony, that it was Secord’s idea to look for another channel of communication through Hakim’s old Iranian connections. About all we know is that Hakim made contact with a young Iranian who was the nephew of a high Iranian official (according to some speculation, Speaker Rafsanjani). He is also described as an Iranian officer senior in rank to but younger than Lieutenant Colonel North.

In any case, Secord and Hakim held a meeting with him in Brussels in August 1986. They talked about “normalizing” US-Iran relations, supplying arms to Iran, and freeing the hostages. The meeting went so well that Secord reported his success to North and it was decided to bring the young Iranian to the United States for more discussion.

North seems to have been euphoric at the meetings with him in Washington on September 19 and 20. “The Relative,” as the Tower Commission report calls him, appeared to be the long-awaited Iranian connection. He said he had been authorized by top Iranian ministers to come to the United States to confer with the highest US government officials. He was accompanied by two other Iranians, one of whom was believed to be a government official. North informed Poindexter that we “appear to be in contact with the highest levels of the Iranian government.”

The Americans at the meetings were North, the CIA’s George Cave, and Secord. North took “the Relative” on a tour of the White House to impress him with our domestic tradition, as if it might rub off on the Iranian. When they got to the Oval Office, North was filled with so much camaraderie that he made a joke at Casey’s expense.²⁹ “The Relative” made a concrete proposal for the formation of a joint commission of four US and four Iranian members to meet in secret for the purpose of drawing up a program to improve US-Iran relations. Nothing was done about this; for the most part, the usual subjects were discussed—the Soviet threat, the Iran-Iraq war, arms, hostages—without any definite decision other than to hold more meetings. The Americans had never been more optimistic. Even Poindexter was jubilant.³⁰ The happiest of all was Hakim; he was in and Ghorbanifar was finally out.

A second meeting took place in Frankfurt on October 6, 1986. The Americans present were North, Cave, Secord, and Hakim. The Iranians were “the Relative,” an assumed intelligence official, and one of those present at the Tehran meeting with McFarlane. There was an exchange of gifts: a Koran for the Americans, a Bible inscribed by President Reagan for the Iranians.³¹

Now occurred one of the most bizarre turns in the entire story.

North came with a seven-point program that in effect provided for an exchange of more arms for more hostages. He offered to deliver five hundred more TOWs and the remainder of the Hawk parts for the release of all the hostages in Lebanon. For John Pattis, an American engineer working for a US firm in Iran, who was accused of spying and held for the past two months, he was willing to throw in 1,500 more TOWs.

The best was yet to come. North was so anxious to please the Iranians that he told them one cock-and-bull story after another, all designed to show them that Iran and the United States saw eye to eye on the Iran-Iraq war. North regaled them with tales of imaginary conversations he had held with President Reagan at Camp David. According to one of his stories, the President had said that he wanted an end to the war on terms acceptable to Iran. In another, the President had blamed Saddam Hussein, the Iraqi strong man, for the war and had agreed with Ayatollah Khomeini that Hussein “must go.” In addition, North assured the Iranians that the United States was committed to their defense if they were attacked by the Soviet Union. North later admitted that he had “exaggerated my connection with the President of the United States” and that other statements of his had been “blatantly false.” He did not seem to think there was anything wrong with carrying on presumably serious negotiations in such style.

The meeting took on an even more goofy character.

As luck would have it, the day North left for Frankfurt was most unfortunate. A plane carrying three Americans crashed in Nicaragua; two officers were killed and Eugene Hasenfus was captured. As soon as the news of the plane crash came through, North and Secord departed hastily, leaving Hakim to carry on.

The Iranians had not been satisfied with North’s seven points, and Hakim took it upon himself to give them what they wanted. He and an Iranian drew up a new nine-point plan that met with their approval. Instead of getting the release of all the American hostages, Hakim settled for one and a half (a mysterious formula, which turned out to mean one hostage for sure and another if possible). The most extravagant concession was a commitment by Hakim to produce a plan to free the seventeen terrorists in Kuwait.

Thus Hakim, a US citizen only since 1984, a shady figure in the underworld of international wheeling and dealing, left the Iranians with the impression that they had made an agreement with a representative of the US government, even though Hakim later claimed that he had not been negotiating on behalf of the government. As it turned out, he might just as well have done so.

When Hakim’s plan was transmitted to North, he gave it his approval and so did Admiral Poindexter. North was questioned about this novel way of negotiating by Representative Edgar L. Jenkins of Georgia:

Jenkins: Later, did you stop to think at all—and I know that you sought approval from your superior—that the only person negotiating for the United States of America with Iran that ultimately attained the agreement was a private citizen who had a substantial financial interest in the outcome of those negotiations?

North: I don’t believe that I communicated that to Admiral Poindexter, no, sir.

Jenkins: And that never concerned Admiral Poindexter or yourself?

North: Well, it may well be, Congressman Jenkins, that I was most injudicious.³²

The net result was another arms-for-a-hostage deal. On October 26, North made another trip to Frankfurt to meet with “the Relative,” who assured him that two hostages were coming out in a few days. Iran received five hundred more TOWs via Israel. One hostage, David P. Jacobsen, director of the American University hospital in Beirut, who had been kidnapped in May 1986, was released on November 2, 1986. It was the one and only achievement of the Second Channel.

The end was near for the “Iran initiative.” After a year and a half of the most intensive covert activity, its cover was blown and panic struck Washington.

7.

The crisis crept forward step by step for almost two months but still caught the Reagan administration by surprise.

Oddly, the first symptoms of trouble came from inside the CIA. They had appeared in September 1986 owing to the suspicions of Charles Allen, the CIA’s national intelligence officer for counter-terrorism. He had sensed that the Iran operation “was to spin out of control” because of the involvement of Secord and Hakim, the “incredible price markup” on the weapons sold to Iran, and complaints from Iran and Ghorbanifar.

On October 1, he shared his fears with the CIA’s deputy director, Robert M. Gates, to whom he confided that Ghorbanifar’s First Channel was “a running sore” despite the decision to shut it down, and that creditors were demanding payment—“I said this is going to be exposed if something isn’t done.” Allen also speculated that “perhaps the money has been diverted to the contras,” although he could not prove it.

Also on October 7, Director Casey received a visit from Roy Furmark, who worked for Adnan Khashoggi in New York and had been a client of Casey’s when he had been in private law practice. Furmark reported that two Canadian investors, Ernest Miller and Donald Fraser, were threatening to sue the Saudi businessman, Adnan Khashoggi, who had bankrolled Ghorbanifar’s deal for TOWs in May 1986. The Canadians had apparently given Khashoggi $10 million of the $15 million he had needed, to be repaid within thirty days at 20 percent interest. Khashoggi wanted the United States to give him the money, because he had put the $10 million in Secord’s Swiss account. If the Canadians sued, Khashoggi warned, he was going to tell what he knew about the US-Iran arms deals. The whole business was typical of the kind of mess that was waiting to spill out of an operation that relied on Ghorbanifar, Hakim, and Khashoggi.

On October 7, Allen went to Casey with his worries. He talked of the “operational security of the problem” and “the issue of diversion to the contras.” Casey mentioned that Furmark had just told him of the Canadian problem but did not let on that anything else was bothering him. In a memorandum a week later, Allen recommended that it was necessary “to get ready for exposure of this initiative. We don’t even have press guidance.”

Next Allen was told to see Furmark. On October 22, Allen and George Cave met with Furmark in New York and heard all about Khashoggi, the Canadians, and the missing money. But one detail was new. Furmark alleged that Ghorbanifar had told him that the bulk of the $15 million had gone to the Nicaraguan contras. It was one of Ghorbanifar’s typical exaggerations, but it was true in substance and meant that he was going to take revenge for having been cut out of the Second Channel by talking too much. Despite the millions of dollars that had passed from one hand to another in the transactions, the contras ended up with not more than $3.5 million; $8 million still remain with Secord and Hakim in a Swiss bank account.

The rumblings within the CIA were part of the price Casey paid for cutting out so many of his top officials. When they came to him with their glimmerings of skulduggery, he could not reveal what he knew and fend them off. Instead, he pretended to encourage them in their suspicions and made them even more suspicious.

Casey seems to have realized in October 1986 as a result of Furmark’s warning about the Canadians and Hasenfus’s capture in Nicaragua that time was running out. He advised Poindexter to see a White House counsel because, according to Charles Allen, “there would be allegations of impropriety and shabby conduct by US officials, regardless of how this comes out, if this was publicly exposed.”³³ At about the same time, he and North “had a lengthy discussion about the fact that this whole thing was coming unraveled and that things ought to be cleaned up and I started cleaning things up.”³⁴ By cleaning up, North meant that he had begun shredding incriminating documents and reports. Casey also ordered him to get a lawyer, as if Casey already expected trouble.

The next crack in the façade was far more serious.

On October 15, 1986, leaflets appeared in Tehran, in which the McFarlane group’s visit of the previous May was revealed and denounced. These were presumably the work of political enemies of the Iranian officials who had instigated or tolerated the move. On November 3, the story was picked up by an obscure Beirut weekly, Al Shiraa. Two days later, it appeared on the front pages of the American press.

In Washington, this unforeseen disclosure called for standard phase-one damage-control procedure—evasive action. The White House spokesman declared that the US arms embargo against Iran remained unchanged.

After ten days, phase two came in, with blatant untruths. On November 13, President Reagan made an address to the nation in which he told a rare assortment of whoppers. He said: “The United States has not swapped boatloads or planeloads of American weapons for the return of the American hostages.” The small amounts of weapons sent to Iran “could easily fit into a single cargo plane.” Perhaps most misleading was his assurance that “all appropriate cabinet officers were fully consulted.” He concluded by reiterating: “We did not—repeat—did not trade weapons or anything else for hostages—nor will we.”

By this time, Attorney General Meese had moved into the center of an increasingly embarrassing imbroglio. On November 14, he was visited by Michael Ledeen, who was still aching to get into the action. According to Meese, Ledeen tried to persuade him that “we can still work with the original Iranian group with which he, Mike Ledeen, initiated the original contacts, and he mentioned Ghorbanifar and others.” Ledeen also advised Meese that he, Ledeen, “was available to help the administration in any way in matters relating to terrorism.”³⁵ Ledeen apparently did not realize that it was a good time to stay out of rather than get back into the whole mess, especially in the company of Ghorbanifar.

Meese had other things to worry about. Word had come out that Israel had sent weapons to Iran on behalf of the United States. President Reagan was asked about this in a news conference on November 19. He flatly denied it: “We did not condone, and do not condone the shipment of arms from other countries…. We, as I say, have had nothing to do with other countries, or their shipment of arms or doing what they’re doing.” There were no other shipments of arms that the United States had condoned? “That’s right.” President Reagan continued to brazen it out: “And so I think that what we did was right, and we’re going to continue on this path.”³⁶

It may well be that these presidential statements were critical in helping to bring about the imminent debacle. If President Reagan had been confident that what the United States had been doing in Iran and Nicaragua was truly right, he could have taken the offensive by coming out with the real policy and defending it aggressively. Whatever else he may or may not have known, he surely knew enough to know that he had been playing fast and loose with the truth. On November 10 at a meeting of key members of the National Security Council, the President had set the tone of the damage-control phase by cautioning: “We don’t talk TOWs, don’t talk specifics.”³⁷ Yet if the damage were to be controlled, this was just the time to talk specifics. Critics would have continued to criticize, but the air would have been cleared, there would have been nothing more to unravel, and the administration would at least have had some solid ground to stand on.

President Reagan’s statements betrayed a failure of nerve and a guilty conscience. The untruths were so unconvincing that they were exposed in a matter of days. It became increasingly clear that the President was faced with equally unpleasant alternatives—to confess that he had not had the foggiest notion of what had been going on in his administration in a matter of the greatest concern to him, or that he had known and had tried blunderingly to cover up.

The final phase began when Attorney General Meese actively entered into the affair.

Meese testified that he heard the President’s press conference of November 19 on his car radio. Meese already knew enough to realize that the President had made serious misstatements about the role of third countries and the shipment of arms. Meese called Poindexter, who quickly issued a “clarification.” Meese, Shultz, and others could not bring themselves to blame the President; they preferred to believe that he had been badly briefed and hadn’t been given all the facts.

Was it really possible that this President had not had enough sense to ask the right questions and get straight answers instead of acting as if he were a marionette pulled by the strings of Poindexter & Co.? Was this the President of whom Secretary Shultz loyally said: “He’s decisive. He steps up to things. And when he decides, he stays with it. And sometimes you wish he wouldn’t, but anyway, he does. He’s very decisive and he’s very strong”?³⁸

Meanwhile, a costly contretemps took place over testimony that Casey and Poindexter were scheduled to give to the Congressional Intelligence Committees on November 21. To coordinate their stories, the two of them met with Meese the day before. The most troublesome part of the story they tried to put together concerned the Hawk missiles that had been sent to Iran in November 1985, the ones that had caused so much difficulty in Portugal and that Secord had finally sent from Israel with the cooperation of the CIA. They came up with the old story that the shipment had contained oil drilling equipment and had been solely Israel’s doing. Later Poindexter blamed the CIA staff, as well as North of his own staff, for having prepared a draft statement full of fabrications.

Unfortunately, these tall tales came to the attention of Secretary Shultz, who knew that they were false. He happened to recall that he had been told about the shipment by former national security adviser McFarlane at the first Reagan-Gorbachev summit in Geneva that same November. Meese received repeated calls from the State Department warning him against the doctored testimony prepared for Casey and Poindexter. Meese hastily called a meeting with Poindexter, North, Assistant Attorney General Charles Cooper, and CIA Deputy Director Robert M. Gates to consider what to do. The formula they adopted, proposed by North, was: “No one in the USG [US government] found out that our airline had hauled Hawk missiles into Iran until mid-January [1986], when we were told by the Iranians.” It was an arrant falsehood, as Casey, Poindexter, North, and Meese well knew. Nevertheless, Casey and Poindexter went off with it to their briefings of the intelligence committees.³⁹

This strange interlude was less important for itself than for what it led to. It led directly into phase three of the crisis—the fall of the junta.

The flare-up between the Casey-Poindexter combine and the State Department convinced Meese that something had to be done to establish a credible administration policy. He himself had not been implicated in most of the Iran initiative and had some reason to be confused by the different stories of past covert operations.

Meese, Poindexter, and Chief of Staff Regan went to see the President on November 21. Meese recommended what he called “a fact-gathering review of the Iranian initiative” to get “a fuller and more accurate picture of the events and activities that had occurred.” The President agreed and wanted the job done before the National Security Planning Group—the inner circle of the National Security Council—met at 2 PM on November 24. Little could they have anticipated what Meese’s fact-gathering mission was going to let loose.

After the meeting, Meese called Poindexter to say that he was sending a couple of people over to the NSC staff offices to look at documents. Poindexter asked the NSC counsel, Paul B. Thompson, to pull relevant documents together. In the late afternoon or early evening, Thompson produced an envelope of documents, including the finding of December 5, 1985, the retroactive one. It was then that Poindexter decided to destroy the finding in order to save the President from “political embarrassment,” and it went into the burn basket behind his desk.

North had been shredding documents and reports ever since his gloomy warning from Casey in mid-October, but the events of November 21 sent him into a frenzy of paper slaughtering. Whether deliberately or not, Meese had tipped off North and Poindexter that they had twenty-four hours before the arrival of his two fact-finders. On Saturday morning, November 22, Bradford Reynolds and John Richardson of his staff arrived at North’s office and, in his absence, were let in by Robert Earl. He heaped files on a desk for their inspection; North came in about noon; the two lawyers went to lunch, returned, and quit in mid-afternoon.

North’s frantic shredding over the weekend was another sign of inner weakness in the junta. It is a good rule in American political life that if a policy cannot stand the light of day, if necessary, it is not likely to be able to sustain itself or be capable of really making much of a difference. The effort to shred every piece of paper that gave away the covert activities in Iran and Nicaragua was futile, because memories could not be shredded and too many people had been drawn into the activities in one way or another. The main significance of the shredding was that it confessed to an inability or unwillingness to stand up for a policy that its protagonists claimed to believe in with all their hearts. They behaved in the pinch as if they had already been accused of wrongdoing and were desperately trying to destroy the evidence.

That Saturday the 22nd, Justice Department investigators Reynolds and Richardson went to lunch with Meese and Assistant Attorney General Charles Cooper at Old Ebbitt’s Grill, an eatery that got some free advertising during Meese’s testimony. Meese described what happened there: “Well, they talked about what they had done and said in the course of looking at the documents, they had found a particular document that related to a possible plan, or a plan that was laid out in the document that had to do with diversion of funds.” They showed the document to Meese, who is said to have exclaimed something like “Oh darn”—no doubt a milder version of the original.

This was enough for Meese to call North to set up a meeting for the following (Sunday) afternoon. Casey soon called Meese to invite him to drop by his house on his way home at about 5 PM. They talked for perhaps an hour, during which time Casey finally told Meese about Furmark’s news, by now six weeks old, of the threatened Canadian lawsuit. Meese said nothing about the diversion memorandum that had just been found. Meese explained that he did not consider it appropriate to discuss the memorandum with anyone, “even as good a friend as Mr. Casey, until after I’d find out what it was all about,” as if Casey could not have helped him find out.

The confrontation with North took place at about 2 PM on Sunday in the presence of Meese, Reynolds, Richardson, and Cooper. Meese took a long time to get to the diversion memo. They listened to North tell about the TOWs, Hawks, Secord, Ledeen, Israel, CIA, Iranians, details from 1985 and 1986, enough to fill thirty pages of notes. Finally, Meese showed North the telltale memorandum of April 1986. North’s reaction was one of surprise—“a combination of words and facial expression, primarily facial expression and body language, if you will.” North later testified that he had been surprised to find that his shredder had missed that one. The only thing that might perhaps have cheered North up was that Casey had already told him he was not important enough to become the scapegoat—“it was probably going to take someone above my pay grade, as he put it, or above my level at the NSC, or within the administration to take this on the nose.”⁴⁰

And so Sunday, November 23, 1986, was Oliver North’s day of wrath. The allknowing Casey was not altogether right about the scapegoating; it was going to take North and in addition someone above North’s pay grade.

We have now come to the climax of this latter-day morality play. The leading characters in this last scene were the President of the United States, the vice president, the attorney general, and the White House chief of staff. They were called on to pass judgment and mete out punishment for the transgressions, real and imagined, of their most loyal liegemen.

At about 11 AM on Monday, November 24, barely twenty-four hours after the great revelation, Meese met with President Reagan and Chief of Staff Donald Regan. Meese told them for the first time about what his men had found at the NSC staff office over the weekend and about his meeting with North. The President, said Meese, was “quite surprised,” and so was Regan—nothing more.

Meese made a report to the principals of the NSC at 2 PM that afternoon but did not mention the diversion memo. He then had a conversation of five or ten minutes with Poindexter, from whom he wanted to know whether Poindexter or anyone else in the White House had known about the diversion. According to Meese, Poindexter said: “Ollie has given me enough hints about this so that I generally knew, but I did nothing to follow up or stop it.” Had Poindexter told anyone else in the White House or otherwise? “No” was the answer.

Poindexter’s version of this conversation adds one essential detail. Poindexter recalled that Meese had started off by saying: “I assume you are aware of the memo that we found in Ollie’s files.” Poindexter said he was. And was Poindexter aware of the transfer of funds? He was generally aware. Then Poindexter told Meese that he was “prepared to resign” and that he trusted Meese to tell him the best time to do so. Poindexter’s attitude made it easy for Regan later that day to tell him just how to go about handing in his resignation.

Meese went on to speak to the President and chief of staff about the whole matter, including what he had just learned about Poindexter’s role. They discussed whether Poindexter should be relieved of his duties; the President said that he wanted to think about it overnight. The President also said that “we want to be sure that we get this out as soon as possible.” They agreed to talk again the following morning.

Before that meeting was held, Regan got in touch with Poindexter, who was going to meet with the President the following day. Regan advised Poindexter that he should have his resignation with him when he came in; Regan also told the President that he “anticipated” Poindexter’s resignation, “so the President could expect it and be prepared for it.” Poindexter was clearly being set up as Casey’s predicted scapegoat above North’s pay grade.

Regan had also been busy on the night of the 24th telling Casey about the diversion disclosure and its repercussions. Casey called Meese at about 6:40 the next morning to talk about what Regan had told him. Instead of talking on the phone, Meese decided to drop by his house—to hear Casey say that he was also “surprised” and that “we’ve got to get this out as soon as possible.”

It was a busy morning for Meese. Regan called him at Casey’s house to say that he, Regan, “would be asking for John Poindexter’s resignation that morning.” But whose decision was it to ask for Poindexter’s resignation? “Well, ultimately, it was the President’s,” Meese answered, but Regan’s strong recommendation had had something to do with it.

Meese also had had something to do with it. Before Poindexter could get to his office, Meese called him in his car and arranged to meet him about five minutes later. At this time Meese told Poindexter that he thought the time had come to submit a letter of resignation. Poindexter: “I said, fine, I was prepared to do that as I had told him yesterday…. I went back to my office, sat down to eat my breakfast, and a few minutes later, Don Regan came in, and I told him that I was going to resign.”

At 9 AM, Reagan, Regan, Meese, and Vice President Bush met in the Oval Office. They settled down to work out a “plan of action,” as Meese put it. Poindexter’s fate having been decided, they turned to what to do about North. Again, according to Meese, Regan was the fixer—he wanted to transfer North back to the Marine Corps from which he had come. They also decided to appoint a special review board, let the rest of the National Security Council in on the latest tidings at 10:15 AM, call in congressmen for a briefing at 11 AM and have Meese hold a press conference at noon. Meese even began to talk of a criminal investigation.

Poindexter appeared dutifully before them at about 9:30 AM for five to ten minutes and submitted his resignation to the President, who expressed regret and praised Poindexter for having acted in the best traditions of a naval officer by accepting full responsibility. The President didn’t bother to ask Poindexter what he knew about the diversion or whether he had approved it. The sentence had been passed; only the execution remained. They shook hands; Poindexter never saw him again.

Meese’s press conference was a hodge-podge of fact and fantasy. Its main purpose for the besieged administration was to disclose that a diversion of funds from the Iran operation to the Nicaraguan contras had taken place, though he hopelessly muddled the facts. The important thing at the time was to act quickly to protect the administration from charges of a cover-up such as had proven to be so disastrous for Richard Nixon, and this much was accomplished.⁴¹

Poindexter was treated gently; he was permitted to go back to his former rank in the Navy, and he soon asked for retirement. North learned from Meese’s press conference that he had been dismissed—fired—and was subject to a criminal investigation. “Admirals should be treated differently than lieutenant colonels,” said the good soldier North. Yet he was rewarded with a telephone call from President Reagan. As North recalled, the President said something to the effect: “I just didn’t know.” The conversation was overheard by two of North’s colleagues, Craig P. Coy and Robert Earl. The President, according to Coy, evidently said that he was sorry that he had to let Ollie go. Ollie said he was sorry it had to end that way, didn’t mean for it to end this way, didn’t think it would end this way. After he hung up, North banged his hand on the bannister. Two days later, he was denied entrance to his White House office.⁴²

Only political panic, cowardice, and hypocrisy can account for the indecent haste and brutality with which Poindexter and North were punished. Whatever they had been guilty of, they deserved better from their masters.

In a final essay, to be published after the report of the Joint Committee appears, I will assess the nature and activity of the junta and its larger implications for constitutional government.

This is the second of three articles.