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The Fall of an American Junta

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.”

  1. 24

    The questioning of McFarlane at this point may convey the impression that the demands for release of the hostages were made by the Iranians rather than that they were reported by the Iranian adviser as having been made by the Lebanese hostage-takers (May 11, 1987, McFarlane; Tower report, p. B-112).

  2. 25

    North later described how Ghorbanifar had managed to bamboozle both sides: “Manucher Ghorbanifar told us that they [Iranians] had agreed to that [release of all the hostages before the Americans’ arrival in Tehran], and what happened is we had gone too far down the line with Ghorbanifar. What was his—his process, if you will, was to tell the Iranians one thing and tell us another, then let the two sides sit down and duke it out. Well, as I said, we knew Ghorbanifar for what he was. We did not know of the letters he had sent to Tehran committing us to certain things until after we got there.

    When we exchanged letters face to face with the Iranians in Tehran, it was very obvious that he had lied to both sides. And we knew that he did this, but we didn’t know that the lie was quite so blatant…. And thus, when we got there, both sides were surprised at the intransigence of the other side’s opinions” (Joint hearings, July 8, 1987, North).

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