On October 5, 1986, an antiquated cargo plane was shot down over Nicaragua by a surface-to-air missile. The lone survivor, Eugene Hasenfus of Marinette, Wisconsin, was captured. Within hours, the Vice President’s office in Washington received a telephone call from an operative on the ground in El Salvador saying that the plane was missing. The CIA station chief in neighboring Costa Rica sent a coded message to another operative, warning tersely: "Situation requires we do necessary damage control." But Hasenfus was temporarily beyond their control. Before long, his Nicaraguan captors had placed him in front of world television cameras where he told the story of the U.S. government-sponsored covert resupply program for the Contras and disclosed its apparent ties to the highest levels of the Reagan Administration.
Half a world away, Lt. Col. Oliver North, the National Security Council (NSC) staff member in charge of the hitherto-secret Contra operation, received word of the downing while in the middle of highly sensitive negotiations in Europe with Iranian government representatives. The talks were part of another major NSC-run covert operation—an arms-for-hostages trade with Iran which made a farce of President Reagan’s highly publicized maxim that "America will never make concessions to terrorists." North interrupted the negotiations and returned to Washington to handle the Central America emergency. Just a month later, the Iran deals were also exposed when a Lebanese weekly magazine published an account of Robert McFarlane’s and North’s secret trip to Iran in May 1986. The Ash-Shiraa story was quickly picked up by the Western media. For the second time in less than five weeks, the White House was plunged into a political crisis.
For most Americans, the two events—trading arms for hostages in Iran and providing illegal paramilitary aid to the Contras in Central America—were unconnected incidents played out at opposite ends of the globe. But, on November 25, 1986, President Reagan and Attorney General Edwin Meese shocked the nation by revealing that the two operations were in fact closely intertwined. Meese disclosed the existence of the so-called "diversion memo," which North wrote in the spring of 1986 detailing a scheme to skim millions of dollars from the U.S. arms sales to Iran to finance the Contras in violation of the congressional ban known as the Boland Amendment. For his offense, North was summarily fired; his superior, National Security Advisor John Poindexter, who knew and approved of the plan, was allowed to resign.
The November 25 news conference did not begin to tell the full story. Attorney General Meese later acknowledged that his own inquiry into the Iran-Contra Affair, which had begun only days earlier, was incomplete at the time. Ultimately, documents and testimony produced during various official investigations showed that North and Poindexter were part of a much larger group within the Administration involved in circumventing the law and misleading the U.S. Congress. These circumventions also involved many foreign governments which aided the United States in the Iran and/or Contra operations, including Israel, Saudi Arabia, South Africa, China, Taiwan, Panama, Costa Rica, Guatemala, El Salvador and Honduras. These facts, and many others, came out only after laborious congressional and legal probes succeeded in unearthing documentary evidence from a reluctant executive branch.
Congressional hearings into the Iran-Contra Affair and the criminal trials of North and others still failed to address the deeper significance of the scandal. Beyond the issues of questionable Administration behavior and individual culpability (still not fully resolved), are broader national and historical issues—the constitutional balance between the executive and legislative branches in foreign policy and, specifically, the White House’s ability to run government "off-the-books," beyond congressional scrutiny; the trend toward covert action as an alternative to overt foreign policy; and the effects of excessive secrecy on foreign policy to the detriment of an open society. Just as important is the other side of the Constitutional coin. Can Congress assert an effective check on presidential power, even in a highly-charged political environment? And is the American public able and willing to play an informed role in debating and consenting to the way its government conducts foreign policy?
To gain a fuller understanding of the Iran-Contra Affair, it is important to view it in its broader context. This was not the approach taken by congressional investigators. By narrowing their purview to the period from 1984 to 1986 and to the simple question of whether President Reagan knew of the diversion, the select committees lost much of the historical and policy background which gave rise to arms-for-hostages deals in Iran and covert Contra resupply operations in Central America.
Genesis of a Scandal
By most accounts, post-Shah Iran began actively to seek weapons from the West early in the Iran-Iraq War, which started in September 1980. Even before then, the Iranian revolutionary government had sought assets, including large quantities of arms, frozen by the United States after the takeover of the U.S. Embassy in Tehran in November 1979. U.S. military equipment was a particular target of Iran’s arms buyers since the Iranian armed forces had been virtually a U.S. creation, and were heavily dependent on U.S.-made spare parts. Justice Department records list case after case charging Americans, and foreigners in the United States, with illegally exporting, or attempting to export, arms to Iran. At the height of the U.S.-sponsored Iran initiative, the Customs Service stopped an apparently private scheme to sell $2 billion of advanced U.S. weaponry to Ayatollah Khomeini’s government. The White House-authorized sale of missiles to Tehran was simply one of dozens of deals Iran was negotiating around the world at that time. The difference was that this operation had official approval.
Even during the hostage crisis in Tehran, Israel—later the United States’ partner through much of the Iran initiative—began to strike weapons deals of its own with Iran. Tel Aviv, like Washington, had a long history of selling arms to the Shah, which Tehran’s revolutionary government was willing to exploit secretly, despite its public animosity toward the state of Israel. Reportedly, the United States knew about Israeli transactions during the early 1980s but turned a blind eye. News accounts alleged later that President Reagan’s first secretary of state, Alexander Haig, gave Tel Aviv an "amber light," acquiescing in the weapons transfers without officially approving them. One report stated that Haig gave permission to Israel to sell U.S.-made military spare parts for fighter planes to Iran in early 1981 after discussions between his counselor at the State Department, Robert McFarlane, and Israeli Foreign Ministry official David Kimche. An Israeli account of the U.S.-backed weapons sales of 1985-1986 reports that Israeli Defense Minister Ariel Sharon proposed as early as 1982 that Washington consider an opening to factions in Iran using limited military sales as a vehicle. The White House apparently declined the suggestion but four years later would be more receptive to a similar proposal brought to McFarlane, then national security advisor, by his long-time counterpart, Kimche.
In the spring of 1985, Adolph Schwimmer and Yaacov Nimrodi, two Israelis with close ties to Prime Minister Shimon Peres, were in the midst of cutting their own apparently private deal to sell mortars and other equipment to Tehran when their intermediary, Manucher Ghorbanifar, told them that the Iranian government wanted U.S.-made TOW and other missiles instead. The Israelis knew that the United States would have to be brought on board before a deal involving such sophisticated arms could go forward, even if the weapons came from Israeli stocks. They also were aware that in 1983 the secretary of state had declared Iran a sponsor of international terrorism, which had led the United States in 1984 to impose further restrictions on exports to Iran. But the Israelis did not realize that other top U.S. officials had already laid the groundwork for a stunning policy shift toward Iran. In June 1985, at McFarlane’s direction, NSC staff members produced a draft National Security Decision Directive which expressed the concern of some in the U.S. government that Soviet influence in Iran was on the rise. As a way to correct this perceived imbalance, the draft authorized a policy of encouraging limited Western arms sales to Tehran. Nimrodi’s and Schwimmer’s efforts would bear fruit sooner than expected.
While Israel and the United States were already beginning to move in the same direction on Iran, officials from both countries had long since joined paths in Central America. According to stipulated facts from the Oliver North trial, as early as May 1983, Washington and Tel Aviv worked out an arrangement for the Defense Department to buy Soviet bloc weapons, captured from the Palestine Liberation Organization (PLO) in Lebanon, on behalf of the CIA. Known as Operation Tipped Kettle, the plan was negotiated by Maj. Gen. Richard Secord (recently retired from the Air Force) and Israeli Gen. Menachem Meron. The following year, a similar deal was struck, this time resulting in many of the arms being transferred to the Contras.
In March 1984, McFarlane approached Israel with a broad request in connection with the Contras. In anticipation of an end to congressional funding, he asked one Israeli official if Israel would take over direction of the Contra war and instruct the rebels "in basic tactics, maneuver[s], and so forth." Israel declined. In April, McFarlane asked again for help. He dispatched Howard Teicher of the NSC staff to discuss the subject of Israeli monetary support for the Contras with McFarlane’s colleague, David Kimche. Although Israel, through Kimche, apparently demurred again, these two episodes underscored the atmosphere of cooperation on such clandestine matters that existed between the two countries, and between McFarlane and Kimche in particular. Just over a year later, in July 1985, the two officials would agree on a joint U.S.-Israeli operation to gain the release of hostages in the Middle East—through the sale of arms to Iran.
The relationship between McFarlane and Kimche would later be mirrored by that between North and Israeli counterterrorism advisor Amiram Nir. Their collaboration on terrorism issues, apparently beginning with the "Achille Lauro" hijacking in 1985, dovetailed neatly with their work on the Iran arms-for-hostages deals and other, still-classified, joint operations alluded to in the Iran-Contra Affair record.
If fighting terrorism was recognized as one of the Reagan Administration’s highest foreign policy priorities, undermining the Sandinista government in Nicaragua was another. From his first days in the Oval Office, President Reagan’s policy of destabilizing the Sandinistas became the cornerstone of the "Reagan Doctrine" of rolling back leftist governments around the globe. For the ideologues within the new Administration, success in Nicaragua became a symbol of United States resurgence in world affairs in the wake of the Vietnam War. "We had to win this one," McFarlane testified during the Iran-Contra hearings. Thus, the President committed vast diplomatic, economic and military resources to reverse what he saw as Soviet gains in the region through Cuba and Nicaragua.
As part of a series of plans to provide covert support to pro-U.S. forces around the world, President Reagan authorized the CIA in March 1981 to spend $19 million on clandestine activities against Nicaragua and elsewhere in Central America. On December 1, 1981, Reagan signed a Presidential Finding approving an initial $19.95 million "to support and conduct...paramilitary operations against Nicaragua." This declaration of covert war specifically mandated the creation of a 500-man paramilitary and political "action team" of exiles that would operate inside Nicaragua. The congressional intelligence committees were briefed by CIA Director William Casey only in vague terms about the purpose of these operations. They later discovered that the Administration’s stated intention of interdicting arms allegedly flowing from Nicaragua to Salvadoran rebels, masked Washington’s true goal of overthrowing the Sandinista government.
The initial deception of Congress portended the "pervasive dishonesty" that the congressional Iran-Contra committees found accompanied official efforts to cover-up the Contra resupply operations. Even as President Reagan told Congress and the American public categorically, "We do not seek [the Nicaraguan government’s] overthrow," CIA training manuals for the Contras exhorted them to "participate in the final fight" and "work for the moment when the overthrow can be achieved." Early on, U.S. officials began systematically to mislead the nation about the general purpose and the specific details of the Contra war. Large-scale U.S. military maneuvers and base-construction in Honduras provided a cover for Pentagon support for the Contra operations, yet Congress was told that these military maneuvers were "routine." CIA agents mined the ports of Nicaragua and the Contras were told to take responsibility; Congress was not informed of the actual U.S. role. Nor did CIA briefers inform legislators of the true destination of captured PLO arms being secured from Israel through Operation Tipped Kettle II in 1984. Indeed, the nation was kept in the dark about U.S. solicitations to third countries such as Israel, Argentina, and Honduras for early support of the Contra war, which established a modus operandi for later NSC approaches to more than a dozen nations for assistance in these covert operations.
The same "disdain for law" which characterized the Iran-Contra Affair was evident in the Contra operations almost from the beginning. In December 1982, Congress passed the first Boland Amendment, prohibiting U.S. support for the Contras from having as its purpose the overthrow of the Sandinista government. By May of 1983, the House Permanent Select Committee on Intelligence had concluded that this law was being violated. The transfer of a career CIA propaganda specialist to the NSC to oversee "public diplomacy" operations skirted laws and directives prohibiting the CIA from attempting to influence American public opinion. The CIA’s Contra manual, which advocated the selective murder of Nicaraguan civilians, violated the President’s own directive against political assassinations. The mining of Nicaragua’s harbors broke a host of national and international laws. The successive political scandals that accompanied revelations of these operations set the stage for the dramatic national upheaval over the Iran-Contra Affair.
As a majority in Congress became more skeptical about the wisdom of U.S. policy in Nicaragua, new legislation was passed in an effort to curtail the CIA’s operations. In December 1983, Congress enacted a $24 million cap on official assistance to the Contras. These funds were expected to last six months; when the money ran out, legislators made it clear to the Administration, the CIA would have to shut down its Contra program.
This law set in motion the creation of an "alternative," extra-official system to sustain the Contra war. At the highest levels of the Reagan Administration, strategies evolved to keep the Contras afloat. In early 1984, CIA and/or NSC officials approached their counterparts in Israel, South Africa and Saudi Arabia for surrogate Contra aid. Retired covert operatives such as Maj. Gen. Richard Secord were enlisted to create "plausible deniability" of an official U.S. role. Operational command was transferred from the CIA to the NSC. CIA Director William Casey designated NSC staff member Oliver North as the new manager of day-to-day Contra operations. In May 1984, CIA officials brought North to Honduras to introduce him formally to Contra leaders and convey the message that despite the pending termination of official assistance, the White House remained committed to continuing the Contra war.
In October 1984, Representative Edward Boland (D-MA) won passage of a second amendment which codified the strongest congressional opposition to date against U.S. support for the Contras. Boland Amendment II prohibited the use of any funds "available to the Central Intelligence Agency...or any other agency or entity of the United States involved in intelligence activities" on behalf of the Contras during fiscal year 1985. Since President Reagan’s own December 1981 Executive Order 12333 described the NSC as "the highest Executive Branch entity" involved in intelligence activities, the law clearly appeared to cover the activities of McFarlane, North and other NSC officials. McFarlane testified that he knew the NSC was covered by the ban. Indeed, in letters to Congress drafted by North, McFarlane stated categorically that the NSC was violating neither the letter nor the spirit of the law. (These letters later resulted in criminal charges against both men.) Only later, after the NSC’s operations had been revealed, did President Reagan and his subordinates take the position that this Boland Amendment did not apply to the National Security Council staff.
By the time that Boland II was passed, the entire system to circumvent Congress and sustain the Contra war was already in place. As North testified, "General Secord had been engaged and money had started to flow to the Nicaraguan Resistance from outside forces." Within weeks of the congressional termination of official aid, the "Enterprise," set up by Secord and his business partner, Albert Hakim, and directed from Oliver North’s office, was submitting false Guatemalan end user certificates to purchase hundreds of tons of weapons in Portugal, using funds solicited by U.S. officials from Saudi Arabia. In 1985 and 1986, these operations were expanded to include a major airlift of arms from Ilopango air base in El Salvador to Contra positions inside Nicaragua. These operations maintained the Contras as a fighting force until the Reagan Administration, with the help of a public diplomacy and lobbying campaign run out of the White House, garnered enough congressional votes to restore official funding in August 1986.
NSC assumption of the reins in the Contra war was facilitated by three major factors. First, President Reagan explicitly gave the order for the NSC to keep the Contras together "body and soul." Second, CIA support for the rebels continued, although at a much reduced level, despite Congress’ direct injunction. According to the Iran-Contra Affair record, CIA Director William Casey met frequently with North, even during the aid cut-off, to plan courses of action. And the CIA station chief in Costa Rica, Joseph Fernandez, actively collaborated with the "Enterprise" airlift operations. Third, the NSC was able to establish a network of private operatives and companies to build up the secret Contra resupply program outside the purview of Congress. In particular, the "Enterprise’s" web of dummy corporations based in Panama and elsewhere bought arms for the Contras, helped recruit and pay for flight crews to deliver lethal supplies, and eventually engineered the diversion of funds from Iran to the Contras, the act which became the central focus of investigations into the scandal.
It is clear that the twin operations of Iran-Contra did not spring up in a vacuum. They had roots in a maze of ongoing policies and initiatives originating in Washington, Tel Aviv, Tehran and Central America. In response to a particular set of circumstances, they evolved into full-fledged, overlapping covert operations directed out of the White House with the knowledge of the highest officials of the U.S. government.
Broader issues
While many of the documents in this set support the conclusion that President Reagan and other top Administration officials knew many key details of both the Iran and the Contra programs, none of the probes produced documentary evidence that the President was aware specifically of the diversion of funds to the Contras from the U.S. arms sales to Iran. "What did he know and when did he know it" became a popular refrain in press coverage about the diversion. Yet, the media and congressional focus on this narrow question tended to deflect attention from larger issues bearing on Constitutional responsibilities and the lawful conduct of U.S. foreign policy.
The Report of the Congressional Committees Investigating the Iran-Contra Affair highlighted some of these broader points which, by and large, were not addressed during the public hearings. The panels’ majority report noted that the President is required to conduct foreign policy "in consultation with Congress." Yet, top Administration officials "evidenced disrespect for Congress’ efforts to perform its Constitutional oversight role in foreign policy." National Security Advisor John Poindexter testified that he failed to inform Congress of elements of the secret Contra program because "I simply did not want any outside interference." William Casey repeatedly kept key facts from the intelligence committees during his tenure as CIA director. North, with the knowledge of McFarlane and Poindexter, lied to members of the House Permanent Select Committee on Intelligence about his extensive support for the Contras in 1985 and 1986. The majority of the congressional Iran-Contra committees denounced this deception of Congress as "self-defeating" and a "prescription for failure."
Members of the majority further condemned what they termed the "privatization" of foreign policy by the NSC staff on policy as well as Constitutional grounds. On the subject of unauthorized funding of U.S. foreign policy, the report declared, "By circumventing Congress’ power of the purse through third-country and private contributions to the Contras, the Administration undermined a cardinal principle of the Constitution." The Iran-Contra operations "strike at the very heart of the system of checks and balances," the committees’ majority report concluded. "That is the path to dictatorship."
At this writing, some of the more immediate issues of the Iran-Contra Affair remain unsettled. Several players in the scandal have been convicted or have pleaded guilty to various charges over the last two-and-a-half years; the independent counsel continues to investigate possible wrongdoing. On Capitol Hill, however, the scandal appears to be virtually forgotten. Two years after the Iran-Contra committees submitted recommendations to correct some of the systemic deficiencies in Congress’ ability to constrain such operations in the future, only a single piece of legislation—a bill to make the CIA’s inspector general a permanent statutory official appointed by the president and confirmed by the Senate—has become law. Therefore, as the Iran-Contra Affair itself passes into history, its most enduring legacy may be the substantial body of documentary records left in its wake.
The availability of these documents, cataloged and indexed in The Iran-Contra Affair: The Making of a Scandal,1983-1988, will enable interested citizens to research the many issues that arise from this dramatic episode, and arrive at their own conclusions. This collection is intended to enhance scholarly and journalistic inquiry on important topics ranging from national security decisionmaking to U.S. foreign policy in the Third World, as well as to foster a greater understanding of the broader foreign policy and Constitutional issues that made the Iran-Contra Affair a national scandal. Most importantly, the collection should facilitate and enrich the public debate over foreign and domestic issues that affect every citizen and, ultimately, the strength of the U.S. democratic system. "A popular government without popular information or the means of acquiring it, is but prologue to a farce or a tragedy or perhaps both," wrote James Madison more than 150 years before the Iran-Contra Affair. By providing the means of acquiring this information, and thereby lifting a corner of the veil of secrecy that so often shrouds the conduct—and misconduct—of the U.S. government, the editors of this collection hope that future farce and tragedy can be avoided.
Malcolm Byrne
Peter Kornbluh
January 26, 1990
Source: http://nsarchive.chadwyck.com/icessayx.htm