John Poindexter
John Poindexter; drawing by David Levine

“I believe there are more instances of the abridgement of the freedom of the people by gradual and silent encroachment of those in power than by violent and sudden usurpation.”

James Madison

“The history of human conduct does not warrant that exalted opinion of human virtue which would make it wise in a nation to commit interests of so delicate and momentous a kind as those which concern its inter-course with the rest of the world to the sole disposal of a magistrate, created and circumstanced, as would be a president of the United States.”

Alexander Hamilton


If ever the constitutional democracy of the United States is overthrown, we now have a better idea of how this is likely to be done. That may be the most important contribution of the recent Iran-contra congressional hearings.

If the events of the Iran-contra scandal had happened in some other country with a weaker constitutional order and tradition, they could have been regarded as the dress rehearsal for a coup. Why this “gradual and silent encroachment of those in power” succeeded for a time and then failed miserably is the finest lesson in the American constitutional structure that we could possibly have been given in this anniversary year of the Constitution.

The main lesson—that the chief danger is from within, not from without—is not a new one. It had already been taught in this generation by the McCarthyite plague of the 1950s. But there was one critical difference. Senator McCarthy had operated from the legislative branch of the government. He was frighteningly successful for a time in blackmailing and bullying the executive branch, but his base of power was essentially outside the presidency. He did not have at his direct command the CIA, the National Security Council or its staff, and least of all the president, however cooperative or submissive each of them may have been during his short reign of political terrorization. McCarthy began and ended as an outsider, a legislative guerrilla warrior as quickly brought down as he had shot up.

Richard M. Nixon’s threat to the constitutional system was different in that it came directly from the presidency. But it was relatively easy to contain, for one reason because it was not based on any great issue of state. The “plumbers” operation was a sordid, outrageous political act that was never camouflaged as a blow in defense of the Republic or in behalf of the struggle against communism. It was bad enough, but nothing on the order of the Iran-contra affair.

The greater threat has now come from the executive branch with the exploitation of a genuine but frustrating issue and the employment of large-scale covert operations. This is the toxic formula for putting the American body politic at maximum risk.

At an early stage of the Iran-contra revelations, I wrote an article entitled “Reagan’s Junta” (The New York Review, January 29, 1987), at which time I did not have at my disposal even the so-called Tower Commission report, let alone the recent congressional hearings. 1 Yet it was already clear to me that something in the nature of a “junta” had been at work and that its key figures had been President Reagan and the director of the Central Intelligence Agency, William J. Casey, rather than underlings such as Lieutenant Colonel Oliver North and Vice Admiral John M. Poindexter.2 “North’s transgression,” I wrote, “has been a godsend to Reagan and Casey, because it has diverted attention from the government-by-junta that they set up and that made possible the diversion of funds”—from the Iran arms sales to the Nicaraguan contras.

We now know much more, thanks to the Tower Commission’s report and the congressional hearings, all of which largely confirm my original conjectures far beyond anything that I had imagined. That “junta” was a useful word for those who engaged in this operation has since been accepted by others. When Senator Paul S. Sarbanes of Maryland adopted it at the hearings, Secretary of Defense Caspar Weinberger did not demur at its use. Other terms have also been used, especially “government within a government” and “secret government,” but they are much less satisfactory for a reason that takes us to the essential nature of this junta-like operation.

Oddly, it was North, no great political scientist, who saw what was wrong with the idea of a “government within a government.” He rejected the term on the ground that his operation “was not nearly so broad.” For once, he was right.

This junta was made up of strategically placed people who did not have the resources of a second government in order to carry out their plans. They had been forced to manipulate the real government in order to get what they wanted. Their manipulations worked for quite a while, because they were able to make their moves under cover of two far more powerful figures in the government, the president of the United States and the director of the CIA. If North’s operation had been “nearly so broad” as that of a real government or had had similar resources at its disposal, there is no telling how far it might have gone.


The real subject of the hearings was the existence and nature of the junta. The whole was far more important than any of its parts. By this I mean that the activity of the junta consisted of a sequence of related events, not one separate event after another. We now know a great deal about the sequence as a whole, even if we do not know all that we might want to know about every point in the sequence.

In order to understand the junta, it is necessary to get rid of the fixation on the “diversion” or on “what the President knew” about it. The use of the profits from the Iran arms sales to the contras was only the last and most extreme of the junta’s actions, but the nature of the junta did not depend on it and would have been quite the same without it. The junta itself was the menace to the American constitutional order, not any one thing that it did or did not do.

To follow the trail of the junta was not easy for viewers of the televised hearings. The very mass and repetitiveness of the evidence made it difficult to sort out what was important from what was not. Different witnesses contributed different parts of the story. Some leads were followed up ad nauseam, some were dropped before they were fully developed. The press and television, with their need for a daily dose of headlines, did not help us much to see this constitutional forest through the tangled trees.

I have tried to study the thousands of pages of hearings and documents to get at what I believe to be the main import of the voluminous record. It will undoubtedly be studied for years to come, but even a preliminary examination may help to make some sense of this junta and its implications for our constitutional order. The hearings themselves are not enough, because there is a good deal in the Tower Commission’s report that does not appear in the hearings and vice versa. The pieces of the two tend bit by bit to fall into place, even if there are a few loose parts of the puzzle still to be fitted in, as there are in almost every historical project.

In order to understand what happened in the Iran-contra affair the first task is to reconstruct it in such a way as to make us see it unfolding and taking shape. This junta was not a fully premeditated plot worked out by practiced conspirators. It arose by degrees because some high officials were so possessed by a determination to impose their own beliefs and policies on the country that they were willing to violate its most fundamental principles of government and to form a band of true believers bonded together against all those who did not agree with them. We usually think of a junta as plotting to overthrow a president; this junta came into being to overthrow an established constitutional rule of law with the help of a president. It was so alien to American traditions that it is hard to know just what to call it, but “junta” is in my view the nearest equivalent, as long as we are clear what is meant by it.


Why and when did this junta get started? Who was in it? How did it operate? To what did it owe its temporary success? Why did it ultimately fail?

The junta’s immediate origins go back to the passage of the Boland Amendment in October 1984. This measure prohibited, for the period of October 3, 1984, to December 19, 1985, the CIA, the Department of Defense, or “any other agency or entity of the United States involved in intelligence activities” from giving any type of military support to the Nicaraguan contras. On the surface, its language would seem to be broad enough to prohibit any covert activity for this purpose, since any such activity had always been understood to be the function of intelligence agencies, in particular the CIA.3

If there were any doubt about the scope of the amendment, which was the result of a compromise between Senate and House versions, it should have been resolved by the debate before its passage in which Representative Edward P. Boland of Massachusetts had taken part. He had stated flatly that “the compromise provision clearly ends US support for the war in Nicaragua.” There then ensued the following exchange between Boland and Representative Robert L. Livingston of Louisiana:


Livingston: Does this prohibition prevent any expenditure of funds, direct or indirect, for arms or weapons or use of force in Nicaragua by the United States?

Boland: If it is directed against the government of Nicaragua, the answer would be in the affirmative, yes.

Livingston: Are there no exceptions to the prohibition?

Boland: There are no exceptions to the prohibition.

Later in the same session, Representative Thomas S. Foley of Washington asked Boland whether the amendment would not restrict the authority of US agencies other than intelligence agencies from distributing humanitarian aid to the contras. Boland answered: “Yes.”

Opponents of the amendment had no difficulty grasping the scope of the amendment. Representative Dick Cheney of Wyoming went so far as to characterize it as a “killer amendment” designed to force the contras “to lay down their arms.”

Constitutionally, the question was not whether the amendment was good or bad. Once it was passed by the Senate and House of Representatives, and signed by the President, it was the law of the land. No one at the time had any doubt that it was designed to stop all manner of possible military funding to the contras in any form by the US government. Inasmuch as the CIA had been in sole charge of such aid, the law was obviously aimed primarily at it. It did not name the President because he clearly could not act alone and would have had to act through governmental agencies specified directly or indirectly in the law.

Something else has a significant bearing on the case. In December 1981, President Reagan’s Executive Order 12333 made the National Security Council responsible for all types of intelligence activities. It instructed the CIA to “conduct services of common concern for the Intelligence Community as directed by the NSC.” It specifically restricted all “special [meaning covert] activities” to the CIA unless “the President determines that another agency is more likely to achieve a particular objective.” And it required timely notification of Congress.4

In addition, according to Senator Daniel K. Inouye of Hawaii, chairman of the Senate Intelligence Committee, the Reagan administration had in 1984 entered into an unambiguous agreement with his committee to give it advance notification of any anticipated covert activities.5 Thus the administration was beset by a variety of congressional prohibitions and inhibitions at the very time it was preparing as never before to defy them.

We need to look at the National Security Council more closely, because its task and staff came to be the legal cover and base of operations of the junta.

When the NSC was set up in 1947, it was given four statutory members—the president, vice president, secretary of state, and secretary of defense—and two advisory members, director of the CIA and chairman of the Joint Chiefs of Staff. A staff headed by an assistant for national security affairs, usually known as the national security adviser, serves the president and the NSC. The NSC as a whole was created “to advise the president” on all matters relating to national security.

The NSC, then, is more than a mere creature of the president. For one thing, it was created by an act of Congress and can be abolished by an act of Congress; it was not brought into existence by presidential fiat. For another, its members have a responsibility to advise the president, though he is not obliged to take their advice; it would have no reason for existence if he never chose to listen to their advice, were prevented from advising him, or were cut off from information needed in order for them to give him their best advice.

The reason for calling attention to the Boland Amendment, Executive Order 12333, the National Security Council, the adviser and staff, is that they are central to an understanding of the hearings. It is all the more important to keep in mind these elementary factors in the story of the junta because the record of the hearings is full of misinformation and mythology about the Constitution, the Boland Amendment, the National Security Council and its staff, and all the rest.


By the time the Boland Amendment of 1984 was passed, the Reagan administration had committed itself to the care and feeding of the Nicaraguan contras at all costs. The immediate problem was how to get around the amendment.

Two methods were hit on. The amendment had prohibited the use of any funds made available to the CIA, the Department of Defense, or “any other agency or entity involved in intelligence activities.” But had it also prohibited “private” funds? And was the staff of the National Security Council such a proscribed “intelligence” agency or entity?

By answering both of these questions in the negative, the administration found a way—at least to its satisfaction—to get around the Boland taboos. The two answers were linked; in this case the national security adviser or members of his staff were directly implicated in the efforts to get “private” or “third country” funds to the contras.

The immediate incentive to break through the Boland barrier was the contras’ need for money; by the spring of 1984, they were running out of it. Robert C. McFarlane, then national security adviser, said that he had been the author of the idea of seeking “alternative” funding for the contras. He had proposed it to Casey, who had expressed “full agreement” with the plan.6

The first attempt to get “third country” money for the contras was made in April of that year by one of McFarlane’s aides, Howard J. Teicher. He had approached Israel (“Country One”) but had been rebuffed. Significantly, Secretary of State Shultz, who had opposed asking Israel for the money, had to learn of this approach from the US ambassador in Israel, Samuel Lewis, not from Teicher or his superiors on the NSC staff, as if one part of the US government had to find out through another government what another part was doing.7

McFarlane was more successful the second time. In a meeting in May with the ambassador of Saudi Arabia (known as Country Two in the joint hearings), Prince Bandar ibn Sultan, McFarlane received a pledge of $1 million a month for the contras for the rest of the year to be deposited in an account in the Miami branch of a bank on Grand Cayman island. The number of the account was given to McFarlane by Lieutenant Colonel Oliver North, then deputy director of the Political Military Division of the NSC staff. McFarlane informed the President of his success within a day or two and received word on a note card of “the President’s satisfaction and pleasure that this had occurred.”8

In the end, the Saudis gave eight installments of $1 million between July 1984 and February 1985 and $2 million a month thereafter for a total of $32 million. So far as we know, no one in Congress or elsewhere was any the wiser; the covert operation to get around the Boland Amendment had taken off.

Nevertheless, the amendment continued to haunt the inner circles of the Reagan administration.

McFarlane subsequently decided that the NSC was covered by the Boland Amendment and claimed to have warned North not to solicit funds for the contras. This restraint merely resulted in another ploy to get around the amendment. North worked closely with the contra fund raiser, Carl “Spitz” Channell, whose various organizations, such as the National Endowment for the Preservation of Liberty, collected millions of dollars by hitting well-wishers with what was described as a “one-two punch.” North softened up prospective donors by telling them how much the contras needed money and left it to Channell to collect the checks. North self-righteously protested his innocence, because he had stopped short of asking for money. The biggest givers were rewarded by getting an audience with the President himself. Channell later pleaded guilty to charges of conspiring to defraud the government.

The lesson was that where there was a will to evade the amendment, there was always a way. With enough ingenuity and bad faith, almost any law can be evaded or made meaningless, especially by government officials who dedicate themselves to getting around the plain intent of the law.

The CIA seems to have had some trouble making up its collective mind about the Boland Amendment. Its general counsel, Stanley Sporkin, testified that “there could be nobody that could have been telling the people at the Agency, as often as I did” that the CIA had to comply with the amendment—so often, he implied, because the temptation not to comply was so strong in the ranks.9 It was up to Director Casey to find a way to make the CIA seem to be “clean.”

According to North, Casey had indoctrinated him “at length” in the theory that Boland did not apply to the National Security Council.10 If Casey could manipulate North, and if North behaved as if he were one of Casey’s underlings, it was not likely to make much difference in practice.

The rationale for excluding the NSC rested on a highly dubious distinction: the difference between a gathering or collecting intelligence agency and one that coordinated and made use of all the intelligence gathered. The NSC, it was argued, was not an “agency or entity involved in intelligence activities” in the way that the CIA was, though the terms “involved” and “activities” were certainly broad enough to include the NSC. Executive Order 12333 had given the NSC responsibility for the “review of, guidance for, and direction of the conduct” of all intelligence policies and programs. The order had actually made the NSC “the highest Executive Branch entity” in the intelligence community, as it was called, even if it was given a specialized function to review, guide, and direct.

In practice, the NSC staff was so free-wheeling that the distinction between gathering and coordinating intelligence hardly mattered; NSC staff members routinely tried to get as much intelligence as possible in the course of their activities, especially when they could not get it from the CIA. Retired Major General Richard V. Secord, North’s main “unofficial” operator and someone in a position to know what had been going on, once tried to deny that the NSC was an intelligence agency, but almost immediately added: “It reads intelligence, lives on intelligence,” and in past months was “collecting intelligence, yes.”11

Only one effort was ever made to get a legal opinion on whether the NSC was covered by the Boland Amendment. The President had a counsel; the State Department had a counsel; the Department of Defense had a counsel; the CIA had a counsel; the NSC had a counsel. But none of these were asked to pass judgment on the issue. Instead, the task went to an obscure young lawyer at the Intelligence Oversight Board (IOB), a body that had been set up in 1976 by President Ford as a pacifying gesture after previous intelligence misconduct. The IOB’s counsel was Bretton G. Sciaroni, thirty-two years old when he was hired in 1984, who had passed his bar examinations on his fifth try, had never practiced law, had been employed in a legal capacity for the first time by the board, and had never before written a legal opinion on a legislative act. Sciaroni limited his investigation to about twenty-five minutes’ conversation with the NSC counsel, Commander Paul B. Thompson, no more than five minutes with Lieutenant Colonel North, and some papers that Thompson gave him. Sciaroni admitted that he had been misled and that his legal opinion had been partially based on “incorrect facts.”

One of the lighter moments in his testimony came when he was asked why he had been chosen to give the opinion on the case. Sciaroni replied: “Frankly, sir, that’s—that thought has crossed my mind, as well. You have a White House counsel’s office, you have an NSC general counsel, and if they were too busy, they had a Department of Justice to get an opinion from. I don’t know why my opinion was the only one.”12

Sciaroni’s opinion predictably said that the NSC was not covered by the Boland Amendment. He had marked it “secret,” and had sent it to one person only, then national security adviser McFarlane, who happened to disagree with it and had paid no attention to it.

A year later, after the administration had taken fright at the revelation of the Iran-contra affair, when it was too late to do any good, Attorney General Edwin Meese III bethought himself to get a legal opinion from the Office of Legal Counsel in the Department of Justice. Assistant Attorney General Charles Cooper submitted a “Memorandum for the Attorney General re legal authority for recent covert transfers to Iran” on December 17, 1986. In the memorandum, without directly referring to the Boland Amendment, Cooper held that “the NSC clearly falls within the definition of an intelligence agency given in Section 403 (b)(1) of the Intelligence Authorization Act” and that “covert intelligence operations are subject to the congressional reporting requirements of Section 501 of the National Security Act, whether they are conducted by the CIA, the NSC, or some other agency.”13

In the hearings, Meese continued to insist that the Boland Amendment did not apply to the NSC. He brought down on himself a lecture by Senator George J. Mitchell of Maine on how to read the law, which was one of the fleeting intellectual pleasures of the hearings. Mitchell pointed out that the amendment had proscribed certain activities by two categories of persons—one, those belonging to organizations that were named (the CIA and the Department of Defense), and the other, those identified by the activity in which they were engaged (“any other agency or entity of the United States involved in any intelligence activity”). In the second case, it was not necessary to name the NSC; any other interpretation, Mitchell observed, would render the law meaningless. Otherwise it would be easy for a president or director of the CIA to say to those engaged in activities that the law was intended to forbid: “Well, you go over and sit in the agriculture department, put yourself on the agriculture department payroll, continue to do the activities which you’re now doing, and you will then not be covered by the law.”14

If the NSC is substituted for the agriculture department, this is exactly what Casey did in trying to get away with excluding the NSC from the bounds of the Boland Amendment in order to protect the CIA. Mitchell’s reference to the agriculture department was not so farfetched; it came out that the director of the Drug Enforcement Agency had agreed to detail some of his agents to one of Secord’s Iran projects.

Such was the legal status of the permission given to the National Security Council and its staff to evade the Boland Amendment—as far as it had any legal status.


The Iran side of the Iran-contra hearings had an altogether different beginning. The two subjects of the hearings did not run on the same track all the time and did not come together until a later stage of the contra funding. At first they did not have much more in common than that both were covert operations and that North was put in charge of both. The hearings tended to flit from one to the other, and may have caused some confusion about how they were connected.

By the spring of 1983, the Reagan administration was so determined to punish the Khomeini regime in Iran that it had launched “Operation Staunch,” a program to prevent the sale of arms to Iran. A steady stream of protests went out of Washington to countries known or suspected to have made such sales, including South Korea, Italy, Portugal, Spain, Argentina, China, Israel, Great Britain, West Germany, and Switzerland. The United States was clearly trying to show that it meant business in its effort to prevent the Iran infection from spreading.

“Operation Staunch,” however, was not taken too seriously by the staff of the National Security Council. At the beginning of 1984, Geoffrey Kemp, senior director for Near East and South Asian Affairs, sent a memorandum to National Security Adviser McFarlane recommending that the administration should reevaluate its attitude toward Iran. Kemp reflected the view that the Ayatollah Khomeini was not long for this world and that something had to be done to influence a successor regime. He proposed a program of covert activities to help Iranian exiles overthrow the regime and install a pro-Western government.15 Soon after, more American hostages, including William Buckley, the CIA station chief in Beirut, were taken in Lebanon by groups assumed to be linked to Iran.

Kemp did not get very far, but he had started something. Word soon came into Washington that Iranian agents were trying to buy American TOW missiles, primarily anti-tank ground weapons.16 Toward the end of 1984, a former CIA officer, Theodore Shackley, let it be known that he had been in touch with Manucher Ghorbanifar, who he said was a former agent of SAVAK, the former Shah’s secret police. (Again and again in this story, former CIA officials appear to stay in touch.)

This was not the first time that the CIA had heard of Ghorbanifar. He had come to the CIA’s attention in 1980 through a European intelligence service and had made such an unsatisfactory impression that the CIA had decided in 1983 to have nothing more to do with him. In 1984, the CIA had issued a notice to other government agencies warning that Ghorbanifar could not be trusted. That same year, however, Shackley had met him in Hamburg, West Germany, and had sent in a long report on their conversation. Ghorbanifar, always knowledgeable about what Americans wanted to hear, had expounded a number of tantalizing ideas—Iran was likely to become a Soviet satellite in three to five years, Soviet equipment in Iran might be traded for American TOW missiles, the four American hostages in Lebanon could be ransomed.

The American reaction to these feelers was still wary and skeptical; the impression prevailed in Washington that little or nothing could be done in Iran so long as Khomeini was alive. Nineteen eighty-four passed without a clear American policy, but bits and pieces had been assembled—TOWs, hostages, Ghorbanifar, the Soviet menace—that soon fell into place.

A critical reason for the American difficulty in working out a policy for Iran was the problem encountered in learning exactly what was going on there. Ever since the Shah’s fall in 1979, the CIA had evidently lacked its own intelligence agents in Iran. As Major General Secord, who had spent over four years in Iran during the Shah’s reign as commander of the US Air Force mission, put it, “we had essentially a blank in our strategic planning for that area. Since the revolution in Iran, we had nothing in Iran. We had no idea of what was going on in Iran, we had no relation with Iran.”17

Meanwhile, the intelligence sources available to the secretaries of state and defense were telling them that the internal politics of Iran were too obscure, shifting, and complex to know what to do or whom to influence. This kind of analysis did not lend itself to a dynamic policy and was not likely to appeal to activists on the staff of the NSC.

Much of the trouble that beset the Americans in their subsequent attempt to work out a new policy for Iran, either for the purpose of achieving a “strategic opening” or to liberate the hostages, resulted from one or the other of these discouraging assessments. The desperate efforts to give the President some action led them into one humiliating and frustrating experience after another, as they were forced to depend on others whose motives were self-serving and only dimly understood.

In this dilemma, National Security Adviser McFarlane first turned to the country that held out the greatest promise of providing a clue to the Iranian riddle.

He turned to Israel, whose intelligence services, despite the Israeli fiasco in Lebanon, still enjoyed a superior reputation in Washington. Israel had long been suspected of selling arms to Iran—a longstanding American grievance that now could be turned to advantage, because it suggested that Israel had some sort of knowledge of how to deal with Iran or at least its armed forces. It made a kind of sense to Israel, which regarded nearby Iraq as its more dangerous enemy, to help Iran—and Israel’s own arms industry—with the purpose of keeping Iraq fighting as far away as possible from Israel. Despite its official anti-Zionist propaganda, Iran was drawn to doing business—at least arms business—with Israel, because the Iranian armed forces were desperately seeking to get American weapons in the world arms market, and Israel had them.

Thus there entered into this story an unlikely assortment of arms merchants. On the Israeli side were Yaacov Nimrodi, a former Israeli Defense attaché in Iran, and Adolph Schwimmer, a Special Adviser to Prime Minister Shimon Peres. Both were now Israel’s designated arms entrepreneurs, a role which enabled them to shield the Israeli government from direct dealings with the officially repugnant Iranian regime.

On the Iranian side was the ubiquitous Manucher Ghorbanifar, who made Paris his base of operations. Whatever Ghorbanifar’s unsavory Iranian past may have been, he also had the merit of shielding the Iranian government from direct dealings with the officially repugnant Israeli regime. In January 1985, according to US sources, Nimrodi, Schwimmer, and Ghorbanifar held meetings in which they discussed how arms for Iran could be used to obtain the release of the American hostages, and at the same time “open a strategic dialogue with Iran.” Some of these meetings were said to have included Amiram Nir, Prime Minister Peres’s adviser on counterterrorism.

That same month, the plot continued to thicken. Roy Furmark, a self-styled New York “energy consultant,” was an associate of the Saudi Arabian businessman Adnan Khashoggi and a former private legal client of the CIA’s Casey. Furmark related that he had met Ghorbanifar and had introduced him to Khashoggi.18 These kindred spirits, Ghorbanifar and Khashoggi, held discussions that January, after which Khashoggi sent National Security Adviser McFarlane a long memorandum on Ghorbanifar’s views on Iranian politics. It also seems that Khashoggi was a friend of the chief of the Iranian buying office in Europe, a Dr. Shahabadi, which would have completed the circle of Ghorbanifar, Khashoggi, Shahabadi, and the Israelis.

At about the same time, in December 1984, the NSC had added a consultant on terrorism and “certain Middle East questions, including Iran,” to its staff. He was Michael Ledeen, then forty-three, who had graduated from Italian politics to world politics. He had been taken on in 1981–1982 as a special adviser by former secretary of state Alexander M. Haig, who had given him the responsibility of dealing with the Socialist International.19 When he had transferred to the NSC staff, he had continued to act as an informant on socialist governments.20 Ledeen was also a senior fellow at Georgetown University’s Center for Strategic and International Studies, which seems to specialize in such connections, and he has since become a regular contributor to the conservative monthly The American Spectator.

In January, McFarlane was prepared to send Ledeen to Europe on a “mission of inquiry.”21 It did not come off, but Ledeen was not to be ignored. In the spring, Ledeen reported to McFarlane that he had had a discussion with a European intelligence official who had given him a rather more optimistic view of the situation inside Iran—that it was more “fluid” than the US government seemed to think—and suggested to Ledeen that the Israelis might be the best source on Iran. After this, McFarlane asked Ledeen to go to Israel and talk privately with Peres to find out whether Israel was better informed about Iran than the US was.22 Ledeen was sent on this mission to Israel without prior notice to the State Department or Ambassador Lewis. It was another case of the NSC staff acting on its own. Lewis had to ask the State Department to find out for him what Ledeen was doing in Israel.23

The Ledeen-Peres meeting early in May 1985, as Ledeen later reported, did not result in very much beyond an offer by Peres to work together “to develop better information about Iran.” If Ledeen expected Peres and other Israelis to contribute any revelations about Iran, he was disappointed. But Peres did drop one significant bit of information—that Israel had received a request from the Iranian government to sell it arms, something Peres said Israel would not do without American approval—as if Israel had not been known to have sold arms to Iran before. Ledeen claimed that McFarlane had subsequently authorized him to tell Peres, “It’s okay, but just that and nothing else.”24

Ledeen’s mission to Israel brought a protest from Secretary of State Shultz, who complained that Ambassador Lewis had been kept in the dark about the trip. Shultz, moreover, was suspicious of “Israel’s record of dealings with Iran” on the ground that “Israel’s agenda might not be one upon which we could fully rely.” It was the first time, at least on record, that Shultz saw fit to separate himself from an “Iran initiative.”

McFarlane’s approval of just one shipment of TOWs from Israel to Iran, if such it was, led to Israel’s disputed shipment of 508 TOWs to Iran in August and September 1985. It was disputed because the Israelis said they understood that the arms were to be replaced by the US. The point later blew up into a major squabble, for it implied that the United States had authorized a sale of arms to Iran months before any such agreed-on deal was admitted to have taken place.

Ledeen was not finished. He went on to have meetings with the Israeli arms dealer, Schwimmer, with the director general of the Israeli Foreign Office, David Kimche, and with the inevitable Ghorbanifar, as well as with others. Ledeen also led Lieutenant Colonel North to meet with Schwimmer, Nimrodi, Kimche, and finally Ghorbanifar himself for discussions of trading arms for hostages and “the broader purposes for an opening with Iran.”25

By this time Ledeen had learned who was behind all the alleged information about what was going on inside Iran and what should be done about it. The mastermind was Ghorbanifar. Ledeen told the Tower Commission:

Ghorbanifar is really the driving force behind this whole thing. I mean, one can speculate about Americans and Israelis, but it is clear that the guy really—I mean, these ideas did not come either from the government of the United States or the government of Israel or arms merchants. The ideas came from Ghorbanifar. He was the person who introduced them. He was the one who put them forward, and he was the one who claimed to have the capacity to achieve them.

Of himself, Ledeen said modestly: “So that was the channel from Iran to the United States and that is how it happened, and I was the one who found myself in a room with them, that’s all. It was an accident.”26

But there were other, more indirect channels. One of the most influential at this time was David Kimche, who came to Washington in July 1985 with a question for the Reagan administration: “What is your attitude toward engaging with Iran in a political agenda?” Kimche intimated that there were Iranians “of influence and authority” with whom the Americans might be able to deal to get back the hostages. When McFarlane told President Reagan about his conversation with Kimche, the President responded—according to McFarlane—that “elements to succeed ultimately to power do need to strengthen themselves, and that the currency of doing that is usually weapons.” The question in the President’s mind was “whether or not these people were indeed devoted to change and not just simply opportunists, self-serving radicals.”27

The only one at hand who pretended to have any answer to that question was Ghorbanifar. So far all roads led back to him. Kimche and the other Israelis were all for “engaging with Iran in a political agenda,” but the Israelis did not know much more than the Americans how to do it or where it was going to lead. The President gave McFarlane the impression that the hostages were uppermost in his mind, thereby implying that he also favored “engaging with Iran.” By this time, arms and hostages were beginning to be inextricably linked, whatever the larger stakes in the background.


Meanwhile, the CIA was also moving toward “engaging with Iran.” The first semblance of a new American policy came in May 1985, the work of Graham Fuller, the National Intelligence Officer for the Near East and South Asia, with the cooperation of the NSC staff’s Howard Teicher.

Fuller assumed that the Khomeini regime was “faltering.” He saw Iran as preferring to “come to terms with” Soviet Russia, which, he believed, had far more Iranian cards to play than had the United States. Fuller argued that there was no longer any need to respond with force if Iran engaged in a terrorist attack or to deny arms to Iran. Of all the possible means of getting back into Tehran, he preferred to “have friendly states sell arms” without affecting the Iran-Iraq strategic balance.

At this time the CIA largely accepted this analysis. It also stressed the competition with the Soviets for Iran’s favor, though it was pessimistic about a direct approach by the United States. Its favored course was indirect influence through European and other friendly states, including Turkey, Pakistan, China, Japan, and even Israel. Just how they were going to make Iran do what the Americans wanted it to do was never clear.

But, the NSC’s staff was pushing for a bolder and more direct approach. The senior director for political-military affairs, Donald R. Fortier, urged that “the Israeli option is one we have to pursue, even though we may have to pay a certain price for the help.” In June, Fortier and Teicher presented what they themselves described as a “provocative” directive. To block the Soviets, they advocated a “sharp departure” from existing policy—nothing less than “the supply of Western military hardware” to Iran. This proposal was admittedly so “provocative” that they advised showing it to Secretary of State Shultz and Secretary of Defense Weinberger only. 28

Shultz agreed that the time had come to reassess US policy toward Iran. But he differed on two points. He thought that the “current anti-regime sentiment and Soviet advantages over us” in Iran were being exaggerated. Above all, he opposed the proposal “that we permit or encourage a flow of Western arms to Iran.” He had no objection to “correct” relations with Iran, but not at the expense of arming Iran.29

Weinberger says that he had remarked to his military assistant, General Colin Powell: “This is almost too absurd to comment on.”30 In his more official diplomatic reply, he strongly opposed easing restrictions on arms sales to Iran and challenged the idea that there was any hope of finding “moderates” in Iran with whom to make a deal so long as the Khomeini regime remained in power.31

Casey, on the other hand, was all in favor of the provocative proposal. It appealed to him as a way “to ensure that the USSR is not the primary beneficiary” of change and turmoil in Iran, though he wanted a more complex analysis of Soviet motives and actions.32

The opposition of Shultz and Weinberger was enough at this time to prevent the proposal from going forward. Yet we can see in this divergence in the summer of 1985 between the CIA and the NSC staff on the one hand and the two senior cabinet members on the other the first signs of a junta in the making. Only the President could have avoided a breach between the two sides by making it convincingly clear where he stood and by enforcing a common approach. Reagan’s failure at this critical point to make clear what he stood for, perhaps even to himself, opened the way to a struggle within his administration out of which a CIA–NSC staff junta gradually emerged.

The struggle over what to do about Iran had originated in the staff of the NSC, with an assist from the CIA or at least its director, in what would seem to be a quite legitimate way. There was nothing bureaucratically wrong, in principle, with NSC staffers putting forward new, admittedly provocative thoughts about beating out the Soviet Union in a race to gain the favor of a post-Khomeini Iran. All their premises and prescriptions may have been absurdly wrong, as Secretary Weinberger thought, but no one in the administration was forced to accept them.

The beginning, then, was like the proverbial small, distant cloud on the horizon. It developed into a raging storm because somehow these proposals contained elements of basic administration policy that refused to go away.

If the CIA or NSC had had their own lines into Iran, or if they had taken more informed advice from people in a position to give it, much of what happened might have been different. It was their political inadequacy that brought about their dependence on others, especially on Ghorbanifar and the Israelis. When Secretary Shultz and others blamed Israel for having “suckered” us into the Iran mess, they distorted the way the connection had arisen. Israel was brought in by the United States and given the impression that the United States was helpless without its advice and assistance. Once in, the Israelis adopted an attitude that what was good for them was also good for the United States, and pressed their advice and assistance on the United States with a lack of discretion that ultimately backfired.

Despite the temporary hiatus in arriving at a workable Iran policy in the summer of 1985, the main policy objectives had already been laid down. One was a new “strategic opening” to obtain a friendly Iran; the other was release of the hostages with the help of Iran. One way or the other, it was understood that any approach to Iran would entail giving it arms, indirectly if not directly.

Yet these two objectives were crucially different in character. The “strategic opening” was a wish, not a policy. There was not a glimmer of a plan to achieve such an end. Except for Ghorbanifar, who professed to know just how it could be accomplished, no one in authority knew what steps to take, whom to approach, how to proceed. The hostage crisis was something else. From the first it was clear that Iran was out to get American arms and that arms were bound to be the currency with which the freedom of the hostages could be purchased, if at all.

Also drastically different were the time spans of the two objectives, one long-range, the other immediate. The qualitative disparity between the two objectives helped the “Iran initiative” to degenerate quickly into an arms-for-hostages deal. President Reagan’s later protests that he had always linked the strategic opening with release of the hostages did not suggest that he had ever understood that a wish was no substitute for a policy and that he could not move on the two tracks at the same time in the same way.


We are now nearing the first signs of an incipient junta.

The idea of exchanging hostages for arms arose in the summer of 1985. The first transactions took place in August and September with the sale of 508 US-made Israeli TOWs. It was not a straight Israel-Iran deal. It seems that money was put up in advance by the Saudi businessman, Khashoggi, who made two deposits of $1 million and $4 million in a Swiss account designated by the Israelis. Ghorbanifar gave Khashoggi postdated drafts drawn on his account at Crédit Suisse. After receiving the weapons, the chief of the Iranian buying office in Europe, Dr. Shahabadi, paid Ghorbanifar, who told Khashoggi to cash his checks. Only one hostage, Reverend Benjamin Weir, was then released, although the Americans had expected to get back all of them.

This initial transaction has been the source of much confusion. The problem arose because Israel could not legally sell US-made weapons without the President’s approval. Did he approve in advance or after the fact? In writing or only orally? McFarlane maintained that the President had given him oral approval not only of the sale but of the replenishment. In his opinion, Reagan had done so with the hostages mainly in mind. When questioned by the Tower Commission, the President told a number of different stories. He first agreed that he had approved both the shipment of arms and their replenishment. Later he denied that he had authorized the Israeli shipment. Still later, he pleaded that he simply could not remember.

The Tower Commission decided that the President “most likely provided his approval prior to the first shipment by Israel” and that he had “agreed to replenish Israeli stocks.”33 That a commission made up of a former Republican senator, a former Democratic senator, and a former director of the CIA, should have so decided is probably as definitive a verdict as we will ever get on this phase of the affair. 34

This phase deserves attention mainly because of what it tells us about President Reagan at the very beginning of his documented role in the story. Nothing can be definitely established because, in defiance of established procedure, nothing was ever recorded. One must choose between McFarlane’s distinct and consistent memory and the President’s dim and inconsistent memory. Yet this seems to have been the first occasion when Reagan assumed direct responsibility for an act that had been opposed by his secretaries of state and defense. “Mr. President, as you know, your Secretaries of State and Defense are opposed to this,” McFarlane had said to him. “I understand that,” the President had answered and had decided to go ahead.35

Such action on the part of the President was virtually unprecedented. It was his prerogative, but, so far as we know, he had never before disregarded a strong position taken by his two senior cabinet members, notoriously of different minds and temperaments. Yet he tried to evade his responsibility for leading on the Israelis. When he pleaded a bad memory, he never explained why such a decision should have been permitted to depend for its verification on memories. The Israelis went on to make a nuisance of themselves for months with a demand for replenishment of the TOWs, which could have been avoided if the President had not chosen to play it both ways.

As if he did not already have enough to do taking care of the Nicaraguan contras (a.k.a. freedom fighters), Lieutenant Colonel Oliver North was now given operational charge of freeing the hostages and negotiating with Iran. He was thereby put in a position to combine these two responsibilities, if ever the opportunity should offer itself.

North was soon put to the test by “a bit of a horror story,” as he later called it.

The story began in mid-November 1985, when Israel broached the question of another arms deal with Iran, this time of US-made Hawk missiles, a weapon used against low-flying aircraft. The quid pro quo was supposed to be the five remaining American hostages in Lebanon. To make sure that there would not be any slip-up this time, no Hawks were to be delivered until the hostages were safely delivered to the US embassy in Beirut. The Israelis, as before, wanted to be assured of replacements. McFarlane agreed to the simple hostage-for-arms deal and to replacements. The plan was for Israel to deliver eighty Hawks to Portugal, where they were to be flown to Tabriz, Iran. Iran was eventually to get 120 Hawks.

Unfortunately, the Israeli arms dealer, Adolph Schwimmer, known as Al, had neglected to get Portuguese customs clearance for the stopover. Too late it was also realized that the Israeli 747, which was to make the flight with its markings undisturbed, was not the most suitable for a mission to Iran. The unconvincing cover story for the Hawks—that they were oil-drilling equipment—added to the confusion.

A mad scramble to put things right ensued. North called McFarlane for help. McFarlane was with President Reagan in Geneva for his first summit meeting with the new Soviet leader, Mihkail Gorbachev. Israeli Defense Minister Rabin was in New York. The panicky Israelis in charge of the operation called Rabin. Rabin called McFarlane. McFarlane called North. North called in retired Major General Secord, who had to interrupt a covert operation in behalf of the Nicaraguan contras to take on the Iran assignment. McFarlane called the prime minister or foreign minister of Portugal to ask for assistance.

North then went to the CIA to get the name of a “proprietary” aircraft supplier—i.e., a nominally private company that the CIA owned or controlled. North passed the information on to Secord, who found the aircraft operator in Frankfurt, West Germany. After three or four days in Lisbon futilely trying to get Portuguese clearance, Secord decided to fly the load of Hawks directly from Israel to Teheran. This plane, a 707, was not large enough to carry the first shipment of eighty Hawks which had been originally promised to Iran. When the plane arrived in Tabriz, it had only eighteen Hawks on board. They were not only the wrong number, they were the wrong Hawks, at least so far as the Iranians had been led to expect.

It did not seem that the horror story could get any worse, but it did. The Iranians had wanted a weapon that could shoot down high-flying Soviet or Iraqi aircraft; these Hawks were only good against low-flying machines. The United States had already developed an advanced model of Hawks to cope with high-flying planes, but the Israelis had sent the old type. In addition, the Iranians were mortified to find Israeli markings on some of the Hawks. As North later put it with unwonted understatement, the Iranians were “very upset.”

They were so upset that they had Ghorbanifar call Ledeen to pass on a message to the effect that “We have behaved honorably with you people, and now you are cheating us and making fun of us and so forth, and would you please do what you said you were going to do.” As a result, no hostages were released and the Iranians were left with eighteen Hawks that they did not want. The matter of the eighteen Hawks festered between Israel and the United States for months because the Israelis thought that they should be replaced or paid for by the United States.36

The second shipment of arms to Iran in November 1985 differed in one respect from the first. The second one was transported in one of the CIA’s proprietary planes in an operation directed by an American, Secord, and the CIA had intervened in the effort to get Portuguese clearance for an Israeli airplane.

Again that awkward question arose: Did President Reagan know and approve of the Hawk deal?

McFarlane was certain that he had told Defense Minister Rabin that Israel was still authorized by the United States to sell arms to Iran and to get replacements for them. McFarlane was also clear that he had made this commitment after having had conversations about it with President Reagan and that the President had told him “that he still was willing to pursue this endeavor.”37

Again, however, President Reagan told different stories. First, he told the Tower Commission that he did not remember how the November shipment had come about. He also said that he had objected to that shipment, as a result of which it was returned to Israel. Later he stated that he could not remember any meeting or conversation about the Hawks or a call-back of the Hawks.38

The problem of the President’s memory is hard to fathom. It is generally agreed that he was obsessed about the hostages. They were the ostensible object of the Hawk deal. McFarlane was continually briefing the President about the efforts to free the hostages. This effort was one of the high points in the whole endeavor. In the end, we are left with McFarlane’s positive account and the President’s changing versions, ending in a total blank.


One little step after another now led to a fully developed junta.

The next step was innocently taken by the CIA’s deputy director, John M. McMahon, while Director Casey was out of the country. McMahon learned of the CIA’s involvement in the November 1985 shipment three or four days after it occurred and quickly realized that something was wrong. Section 662 of the Foreign Assistance Act, the so-called Hughes-Ryan Amendment, had prohibited covert operations by the CIA unless and until the president issued a “finding” declaring that “such operation is important to the national security of the United States.” No such finding had been issued. McMahon thought he could protect the CIA from the charge that it had acted illegally in the case of the November shipment by getting the President to issue a retroactive finding.

McMahon brought in CIA General Counsel Sporkin to draft it. Sporkin had to contend with some sticky legal provisos. Not only had the Hughes-Ryan Amendment of 1981 required such a finding; another amendment of the National Security Act stipulated that the Senate and House Intelligence Committees had to be informed of covert activities “in a timely fashion,” if they had not been given prior notice. Sporkin was willing to go along with the retroactive maneuver, but he also agreed to a clause that was destined to bedevil the entire affair. It instructed the CIA’s director “not to brief the Congress of the United States” until the President decided to do so, rather than “in a timely fashion.”

Whose idea was it to keep Congress in the dark? Sporkin later told the Joint Select Committee that he had been responsible for this in order to ensure secrecy and security, though he admitted that such a provision had been very rarely used, and only in extreme circumstances.39 McFarlane was told, however, that it had been Casey’s “thinking.”40 It would seem most unlikely that Sporkin would have put in such a rarely used provision without some prompting from higher up. In any case, Casey approved the finding and sent it on to Poindexter for transmission to the President with the caution that it “should not be passed around in any hands below our level.” Poindexter recalled that it had come with “a recommendation from Bill Casey that he sign it and Bill Casey was a person whose advice the President valued.”41

Just what happened to this finding is another of those mysteries that make this entire affair so suspicious. As it happened, McFarlane submitted his resignation as national security adviser on November 30 but continued to function until January 5, and his place was taken by Vice Admiral Poindexter. The change made a difference. As the junta was about to be formed, Poindexter seems to have had far less inhibition than McFarlane about fitting into it. Poindexter’s handling of the November finding showed how far he was willing to go.

Poindexter was not happy about the finding because, he said, it had been produced by the CIA and had not been “fully staffed.” Yet, he intimated, he could hardly keep a document with Casey’s recommendation from the President. Poindexter definitely recalled that he had presented it to the President, who had signed it on December 5. Yet that finding could never be produced because, Poindexter said, he had destroyed it in November 1986, a year later, after the investigation into the whole affair had begun.

The reason given by Poindexter for having destroyed the document suggests why a junta had been in the process of formation. He tore it up, he said, “because I thought it was a significant embarrassment to the President, and I wanted to protect him from possible disclosure of this.” The embarrassment he thought would come from the disclosure that “the whole Iranian project was just an arms-for-hostages deal.” It was, therefore, necessary to protect this president at all costs because, as Poindexter put it, “I think it’s always the responsibility of a staff to protect their leader, and certainly in this case where the leader is the Commander-in-Chief.”42

Poindexter, then, had considered his job to be that of a military man whose first duty was to protect his “leader,” whom he viewed not as the head of a civilian government but as a military commander-in-chief. Poindexter and his kind had appointed themselves to an inner circle resembling a Roman imperial bodyguard. Whether he knew it or not, Reagan was becoming the “leader” of a faction within the government as well as the president of the entire country. It was a dual role that permitted him to be both a partisan and an arbiter, able to decide in favor of the emerging junta and put down all opposition to it.

Something else happened toward the end of 1985 that hinted of the emergence of just such a junta.

An intelligence report came to the attention of Secretary of Defense Weinberger about negotiations between high American officials and some Iranians involving arms. Weinberger was evidently incensed that he had not heard about them. The reports had come from the Defense Department’s own intelligence agency.

The follow-up was even more shocking to Weinberger. When he questioned the agency about this report, he was told that “this was a mistake, that we weren’t on the distribution list and we weren’t supposed to have this report.” Weinberger was not amused. He told his military aide, General Colin Powell, to “remind the agency for whom they were working.”

The full story was even more astonishing. It turned out that the Defense Department’s intelligence agency had been tipped off about the negotiations with the Iranians by a foreign intelligence agency. It seems that a foreign country knew more about what was going on than did the secretary of defense. Weinberger was not the only one who had to learn about these matters indirectly; Secretary Shultz also said that he had “found out things, sometimes by chance,” and that the State Department, too, had been cut out of this intelligence information.43

Weinberger was later asked at the joint hearings to explain why he had been left out. The following exchange took place between Senator Paul S. Sarbanes of Maryland and Weinberger:

Sarbanes: Well, Mr. Secretary, what was going on? What is your perception of what was occurring? You’re the secretary of defense, you’re a statutory member of the National Security Council, you’re charged with major responsibilities and, in fact, in the command and control function in the case of conflict, have a very unique and special responsibility that’s been entrusted to you and yet here we are with your obtaining information about what your own government is doing from foreign sources. The national security adviser in effect is saying, no, we don’t want the secretaries of state and defense to consult with the—what is your perception of what was taking place in our government?

Weinberger: Senator, what was taking place, I believe, is what I have tried to describe earlier, and which I strongly disapprove of. And I think that people with their own agenda, who thought that this opening was a good thing, who knew that I opposed it, and George Shultz opposed it, did not want the President to hear these arguments after the decision had been made, or perhaps, indeed, even to the extent that they were made before. I don’t know. But I think that that was basically the problem.44

The nature of the emergent junta was characterized by Weinberger in a way that would be hard to improve on—they were “people with their own agenda.” Those who had a different agenda, whatever their status in the system, were now to be excluded from the decision-making process.

But where did the decision to exclude the secretary of defense come from? Asked this question, Weinberger replied: “The White House had issued instructions to them [his own intelligence agency] that we were not to be on the distribution list.” So the instructions had come from the very top.

Weinberger next asked the under secretary of state for political affairs, Richard L. Armitage, to find out who was carrying out these negotiations on the American side. Armitage must have had a pretty good idea, because he arranged to have lunch with Lieutenant Colonel North on December 3. North, who often talked too much for his own good, admitted that he had been meeting with Iranians in Europe.

Alarm bells rang for Armitage. “I don’t think my boss knows anything about this,” he told North. “I doubt that Secretary of State Shultz knows anything about [this]. I think your ass is way out on a limb and you best get all the elephants together to discuss the issue.”45 When Weinberger found out that something had been going on behind his back, he demanded a meeting of the principals in the Security Council.

The “elephants” came together on December 7 at the presidential residence. They were President Reagan, Secretary of State Shultz, Secretary of Defense Weinberger, Deputy Director of the CIA McMahon, Chief of Staff Donald T. Regan, McFarlane, and Poindexter.

North had prepared for them one of his lengthy memoranda on the state of the Iranian transactions. He reported that some Iranians had proposed to release the five American hostages and one French hostage as well as to cease all acts of terrorism directed against US property or personnel; in exchange they had asked for an immediate delivery of 3,300 TOWs and fifty improved Hawk surface-to-air missiles from Israel. Though he recognized that such a deal was contrary to the stated US policy of making no concessions to terrorists, North ended by advocating that the Israelis should be allowed to make the sales to Iran with the understanding that their stocks would be replenished. Indeed, the Iranians, Israelis, and Major General Secord, acting as a US businessman, had already agreed to meet in London to arrange for the sale of TOWs and Hawks. North asked for a quick decision.46

There seem to be almost as many versions of what happened at the December 7 meeting as there were participants. All agree, however, on essentials. The idea of selling arms to Iran through Israel was strenuously opposed by both Shultz and Weinberger. This was the second time that they had raised such objections; they seem to have become more adamant and vociferous each time the issue was raised.

Yet the upshot of the meeting, and especially President Reagan’s role in it, seems to have been characteristically evasive. The most peculiar circumstance was the signing by the President two days earlier, on December 5, of the finding that Poindexter was to destroy the following year—the finding that had contained approval of arms sales to Iran and of keeping it from Congress. Yet nothing was said of this finding on December 7, and the discussion went on as if the question were still open.

To make this behavior by the President even more curious, the two cabinet secretaries left the meeting with different impressions. When Weinberger got back to the Department of Defense, he told General Powell that “I believed this baby had been strangled in its cradle.” 47 Shultz, however, recalled: “The President, I felt, was somewhat on the fence, but rather annoyed at me and Secretary Weinberger, because I felt that he—sort of—he was very concerned about the hostages, as well as very much interested in the Iran initiative.” Shultz came out not sure where the President stood but thought that his and Weinberger’s arguments, with some help from Chief of Staff Regan at this time, had “made a real dent.”48

It does seem that the consensus at the meeting was that no more arms should be sold to Iran but that the attempt to establish a “political dialogue” should continue. In effect, the Iran baby had not really been strangled; it was permitted to live on.

The main outcome of the December 7 meeting was a decision to send McFarlane to London the next day to meet with the Israelis and Ghorbanifar to inform them of the shifting American line and to seek an understanding with them about what to do next. McFarlane, North, and Secord were there for the Americans; Schwimmer, Nimrodi, and Kimche for the Israelis; and Ghorbanifar, who was still regarded as the indispensable Iranian go-between. The Israelis, according to McFarlane, wanted to continue on the old line; Ghorbanifar behaved belligerently, as if he were in a position to dictate to the Americans. Ghorbanifar later told the Tower Commission: “I said what are you talking about? You just left a mess behind and you want something else? I was tough.”49 Ghorbanifar’s toughness took the form of leaving the Americans in no doubt that they were up against an arms-for-hostages deal if they wanted anything at all from Iran.

In the end, Ghorbanifar “revolted” McFarlane to such a degree that the latter came back to Washington recommending that the Americans should have nothing more to do with him.50 When McFarlane was asked whether he had then sensed that the United States was being held “hostage to the hostages,” he replied laconically: “Yes.”51

North was now so headstrong that he came out in open opposition to the stand taken by McFarlane, long his superior. Ghorbanifar was still the key for North, as for the Israelis, and North took the position in another of his lengthy memoranda that it was “very dangerous” to break with Ghorbanifar, because the “hostages would be our minimum losses.” North suggested that the Israelis should no longer be used as the middlemen and the United States itself should take over the transactions. “We could, with an appropriate covert action Finding,” he proposed, “commence deliveries ourselves, using Secord as our conduit to control Ghorbanifar and delivery operations.”52 This proposal was so closely followed in actual practice that it suggests, if it was North’s own, that he had become a prime mover in the way the Iran policy was going.

President Reagan was seemingly having a hard time making up his mind. When McFarlane saw him on his return from London, the President plaintively made the point, “why couldn’t we continue to let Israel manage this program and [he] was expressing and searching for I think, understandably, ways to keep alive the hope for getting the hostages back.”53


At this delicate point, President Reagan made his fatal move and put himself at the head of a de facto junta. After December 7, the President could not claim that he was not fully aware of the opposition of his two senior secretaries and the reasons for it. How he dealt with this opposition is a responsibility he cannot escape, even if he has taken refuge in a conveniently poor memory on other aspects of the case.

The break in the stalemate of ideas is said to have started with a secret visit to Washington by Prime Minister Peres’s adviser on terrorism, Amiram Nir. He apparently brought a new plan predicated on the expectation that “moderate elements in Iran can come to power if these factions demonstrate their credibility in defending Iran against Iraq and in deterring Soviet intervention.” If these elements succeeded in getting desperately needed military material for Iran, the plan went on, they could obtain the upper hand in the Iranian government, and this would allow them to “coercively influence near-term events.” Israel was willing to provide 4,000 TOWs wanted by the Iranians on condition that they would be replenished by the United States in less than thirty days. The TOWs would be delivered by degrees: a first shipment of 500, after which all five American hostages would be released; if successful, the remaining 3,500 were to go; if unsuccessful, no more TOWs and the Israelis would be out the first 500 without replacements. At least this is what the new national security adviser, Admiral Poindexter, understood from Nir at their meeting on January 2, 1986, and passed on to the President on January 6.54

(Joint hearings, May 6, 1987)

This dubious plan rested on the assumption that there were such significant “moderate elements” in Iran that they were in a position to take power against the religious fanaticism of Ayatollah Khomeini’s followers by obtaining a rather limited amount of arms made by the archenemy, America, and delivered by another archenemy, Israel. It would be interesting to know what made the Israelis believe in this tale, if they actually believed it. It was probably sold to them by Ghorbanifar, who had long been telling them that the Iranian government was divided into radical, centrist, and conservative factions. One of the reasons Shultz and Weinberger were so outspoken against an arms deal was that all American intelligence information available to them disputed this version of Iranian internal politics and made it seem like a pipe dream.

Nevertheless, events now moved swiftly toward a climax. With McFarlane out and Poindexter newly installed, the driving force was North, despite his subordinate rank. His next moves were frenetic. While Director Casey was on vacation in Florida, North persuaded the CIA’s general counsel Sporkin to work on a new “finding.” A draft for a covert action was ready by January 6, 1986, and presented by Poindexter to the President, who, according to Poindexter, signed it absent-mindedly.55

This draft followed the Israeli plan to “facilitate efforts by third parties and third countries to establish contact with moderate elements” in Iran by providing them with “arms, equipment and related material.” More to the point, it specifically directed Casey, who was supposed to be in charge of any covert action, “to refrain from reporting this Finding to the Congress.” North had already checked the draft with Casey, who had “indicated that he thought the finding was good and that this is probably the only approach that will work.”

Another full-dress meeting of President Reagan, Vice President Bush, Shultz, Weinberger, Regan, Casey, Poindexter, and Attorney General Meese took place on January 7, 1986. It was a turning point.

Again Shultz and Weinberger voiced their by-now familiar objections to sending arms to Iran. Casey and Poindexter urged it most strongly. Meese concurred. The turning point came as a result of the President’s new attitude. At the December 7, 1985, meeting he had given the impression that he had turned against or at least had not yet made up his mind about the Iran arms deal. But Weinberger “reached the conclusion at the end of the meeting [on January 7] that the President now favored the plan.”56 When Reagan had to choose between Shultz and Weinberger on the one hand and Casey and Poindexter on the other, he chose Casey and Poindexter.

On January 7 also, Attorney General Meese contributed a typically shifty tactic to carry out the new line. One of Weinberger’s objections was legal—that the Arms Export Control Act under which American weapons were usually sold to other countries required notification to Congress. Meese interjected that other legal means could be used. It turned out that he was thinking of the Economy Act whereby the Department of Defense could “sell” weapons to the CIA, get reimbursed for them, and then have no responsibility for what the CIA did with them. Inasmuch as the CIA was conducting a covert operation, no one needed to be the wiser.

The Economy Act had never been intended for such a purpose. It had been a measure to enable the CIA to obtain weapons for its own use from the Department of Defense and had never before been used for the sale of weapons by the CIA to others, especially when the others were ostensibly private operators who might profit from the transaction.

Also pressed into service was a little-known 1981 precedent attributed to the Reagan administration’s previous attorney general, William French Smith. Significantly, it was Casey who put Attorney General Meese up to exploiting this convenient precedent.57 Smith had “determined” that the President could authorize the CIA to sell arms to other countries “outside of the provisions of the laws and reporting requirements for foreign military sales,” if he issued an “appropriate” finding. In this way the right kind of finding was essential to the growing intrigue to prevent the scheme from getting out to Congress.

Actually just such a finding had already been worked out by Sporkin and the NSC staff and signed by the President the day before—absent-mindedly, if Poindexter is to be believed. Yet at this meeting no mention was made of the proposed finding. Neither Weinberger nor Shultz heard about it until ten months later, when it came out during a confessional session with Poindexter at the White House.

The ever-resourceful Casey had brought up the question whether Congress should be notified of the decision. He and his counsel, Casey said, felt that it would be “appropriate” to delay notification. Meese, as usual, took his cue from Casey. Questioned later about how much delay was appropriate, Meese answered that “something in the neighborhood of forty-eight hours” was normal but that in this case, because of the hostages, he had understood the delay to mean thirty to sixty days. He never explained why the delay had lasted over ten months and the “notification” had then come by way of the furor in the press. Meese protested that this delay was a “very rare” occurrence, without apparently realizing that it must also have responded to a very rare political machination by a very rare political cabal.58

Thus began the final phase of the junta’s formation. The essential element was not the difference of opinion within the administration; differences were to be expected and were not unusual. The key factor was the conversion of differences into a division of power. Those on one side were now given a license to act and those on the other side were not even permitted to know what actions were being taken. On one side were ring-leaders in the CIA and on the NSC staff; on the other side were the secretaries of state and defense and the entire Congress.

The politics and psychology of a junta were fully manifest in a message that North sent to Poindexter on January 14. Poindexter had asked North to discuss his plan with Casey to make sure they were all agreed. North met with Casey on the night of January 13 and gave Poindexter this report in part:

Casey’s view is that Cap [Weinberger] will continue to create roadblocks until he is told by you that the President wants this move NOW and that Cap will have to make it work. Casey points out that we have now gone through three different methodologies in an effort to satisfy Cap’s concerns and that no matter what we do there is always a new objection.59

North, Casey, Poindexter, and the President were here linked together against a secretary of defense who had to be made to do their bidding against his better judgment in an operation about which he was being kept largely in the dark. What Casey recommended was exactly what came to pass.

President Reagan signed the January 6 draft finding with little change on January 17.60 On that day or the next, Poindexter called Weinberger and told him that the President had decided to go ahead with making the arms available to Iran and that the Department of Defense should transfer TOWs to the CIA for the operation. Poindexter pointedly said, according to Weinberger, “The President’s decided this and there’s no more room for argument. Something along that line.” Weinberger did not object any more: “I’d made all the arguments that I could think of at the two meetings and having been told in the very flat, uncompromising terms that the President had decided and that they were anxious to have the order carried out, I—I did not [object].” He passed the order on to his military assistant, General Powell, and the TOWs were “sold” to the CIA.

It is an extraordinary moment in this story. Weinberger was one of President Reagan’s closest friends and political associates in the cabinet. He had backed Reagan for over twenty years, through the California governorship to the presidency. Yet the President could not now bring himself to communicate his decision to Weinberger directly. A peremptory telephone call from Poindexter was all that this proud secretary of defense was permitted to receive. When Weinberger was questioned about this incident, his sharp face took on an appearance of cold rage.

Whatever President Reagan could deny or forget in the past, he could not escape his responsibility for the January 17 finding. He had signed that finding, had kept it secret from his secretary of state and secretary of defense, and had humiliated the latter in the most deliberate and shabby way. He had approved the first shipment of US-made arms from Israel to Iran in August and September 1985 and then had given three different stories, ending with the statement that he could not remember. He now had had plenty of time to make a decision, from the discussion on January 7 to the signing on January 17. The two secretaries had been repeating their opposition for months. From now on it was his policy, his junta.

Weinberger had no illusions about who had made the January 1986 decision. Representative Edgar L. Jenkins of Georgia seemed to think that someone else must have been responsible, at least to the extent of having persuaded the President to take this action. His question brought a forceful reply from Weinberger:

Jenkins: With your forceful opposition to the proposal, as well as that of Secretary Shultz, who was the most persuasive person? I keep—during all these hearings, we have not heard the person that was—that persuaded the President. Was it—was it Casey or was it McFarlane or who?

Weinberger: Two things, sir. First of all, I heard Mr. McFarlane and Mr. Poindexter push the program from time to time in its beginning—and later, but the assumption, sir, seems to be that somebody has to persuade the President of something one way or the other. This President is a man with very definite ideas…. He has his own mind that he makes up after listening to a number of different views.61

The verdict of the Tower Commission on President Reagan’s role was a crass cop-out. It seriously underplayed the culpability of the President and exaggerated the responsibility of his key advisers. It gave the impression that Reagan’s “personal management style” and not his policy decisions were the source of the trouble. The most that it accused the President of was that he “did not seem to be aware of the way in which the operation was implemented and the full consequences of US participation.” It perversely charged that none of the NSC principals had “vigorously pursued the issue,” though it grudgingly admitted that one or two had “suspected that something was amiss.”

This version is so far-fetched that it makes one wonder about the Tower Commission. Its report cited Juvenal’s “Quis custodiet ipsos custodes?” which might be rendered in this context as “who will investigate the investigators?” Whatever may have been wrong with Reagan’s management style, he cannot be absolved of the responsibility for the fundamental decision to sell arms to Iran, to keep it an unlawful secret from Congress, to exclude all those who disagreed with his policy from the decision-making process, and to put the implementation of his policy in charge of a small, strategically placed junta under his protection. He was given plenty of notice of what were bound to be “the full consequences of US participation” in the Iran operation. One or two of the principals had not merely suspected that something was amiss; they had virtually screamed it from the White Housetops. He signed the crucial finding of January 17 after having heard the arguments on both sides for months and after having deliberately sided with one against the other. Whether or not he knew about the subsequent “diversion” is relatively paltry compared with his role in setting up the junta that made the diversion possible.

Something else happened in January that was destined to haunt President Reagan.

On January 22 and 23, 1986, North met with Nir, Secord, and Ghorbanifar in London. At one point, North and Ghorbanifar went together to the bathroom. As North later told the story, Ghorbanifar used the occasion to suggest “several incentives” to make the Iran operation work. One of these incentives especially pleased North—that a profit from the sales to Iran “could flow to the support of the Nicaraguan resistance.” North called the profit “residuals”; the scheme also came to be known as the “diversion.”62

In this way the Iran and contra operations came together. A new stage in the Iran-contra affair was about to begin.

This is the first of two articles.

This Issue

October 8, 1987