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The Fall of an American Junta

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.


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.

  1. 22

    Joint hearings, July 8, 1987 (North).

  2. 23

    Joint hearings, July 15, 1987 (Poindexter).

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