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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.

  1. 1

    Tower report, p. B-70. An Israeli had apparently told North that Ledeen had profited from some business arrangement. Ledeen assured North that he had made no such money (Joint hearings, July 8, 1987, North).

  2. 2

    Joint hearings, July 8, 1987 (North).

  3. 3

    See my account of this episode in The New York Review (October 8, 1987).

  4. 4

    The CIA was informed of Ghorbanifar’s SAVAK past by a former CIA official, Theodore Shackley. Albert Hakim said that Ghorbanifar was a former SAVAK agent who had been recruited by the Israelis (Joint hearings, June 4, 1987).

  5. 5

    As described by Clair George, director of overseas clandestine operations of the CIA, a “burn notice” meant that “we send a notice around the world that the individual that we are speaking about should not be dealt with because he’s dishonest and untruthful.” George said that the CIA had made its first contacts with Ghorbanifar in 1979, when he had come out of Iran after the Shah’s fall (Tower report, p. B-54; private hearing, August 5, 1987, George).

  6. 6

    In his colorful style, the CIA official Clair George said: “Ghorbanifar was the agent of Israel. It was the government of Israel that said, we have got one hot cookie here that can help us make contacts with Iran, release the hostages. Michael Ledeen and I think as we walk through, Ghorbanifar seems to be playing a variety of roles in this” (Private hearing, August 5, 1987). Ledeen said that “the Israelis were approached by Ghorbanifar as a way of getting to the United States” (Tower report, p. B-14).

  7. 7

    Tower report, p. B-14. According to Clair George, Ledeen approached the CIA “in promoting Mr. Ghorbanifar” (Private hearing, August 5, 1987).

  8. 8

    Joint hearings, July 9, 1987 (North).

  9. 9

    Private hearing, August 5, 1987 (George).

  10. 10

    Tower report, p. B-54; Private hearing, August 6, 1987 (George).

  11. 11

    Private hearing, August 8, 1987 (George). Another version of Casey’s attitude was given by the CIA’s chief of the Near East division: “The Director’s position when this started up, late January–early February [1986], was Ghorbanifar is a rascal. They had a lot of experience with this guy. He’s unreliable. But the channel, there’s something in this channel that’s working and it’s worth a try, and nothing else is working, so let’s see where it goes” (Tower report, p. B-70).

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