Good Hunting: An American Spymaster's Story (13 page)

Nonetheless, in the mid-1980s, the son, known in our circles as “Baby Shah,” had a certain following among the exiles and in the Iranian military, particularly the air force. We met with him from time to time, but I don’t think he was ever deeply serious about leading a resistance movement. He had an idea that things might get so bad in Iran that there would be a popular revolt and a call for his return. In the meantime, his best play was to stay in the background and try to appear to be a forceful leader. This was frustrating, but it must be said he was still very young (in his mid-twenties) and was enjoying a safe and prosperous existence in the United States. He had a large house in McLean, Virginia. We were a little worried about his security for a while and asked the FBI to alert us to threats. Neither the best-case nor the worst-case scenario came to pass. The counterrevolution never happened, and Baby Shah settled down.

Another important exile was the former Iranian prime minister under the shah, Shapour Bakhtiar, who had a fascinating history, having fought in the Spanish Civil War against Franco and in the French Resistance against the Nazis in World War II. He was a tough and dedicated nationalist. I met him at his home in Paris and talked at some length about his past and his hopes for Iran. The house was seemingly well protected, with French police guarding the entrances. Nevertheless, I had an eerie feeling that he wasn’t safe in his fortress. I couldn’t put my finger on what made me so uneasy. Perhaps it was just a sense that he was challenging an Islamic fundamentalist regime that was prepared to take violent risks to remove its enemies. Perhaps it was the lingering history of exile assassinations. The Russian revolutionary Leon Trotsky was murdered in Mexico in 1940 by an ice-axe-wielding assassin, and Georgi Markov, a Bulgarian dissident writer and employee of the BBC, was done in by the Bulgarian Security Service in 1978, struck with a toxic ricin pellet fired surreptitiously from an umbrella by an assailant as Markov walked across Waterloo Bridge. Both these acts were international sensations.

Shapour Bakhtiar proved to be a steady nuisance to the Iranians, leading the National Movement of Iranian Resistance from Paris. As I feared, he barely escaped an assassination attempt in his Paris home in 1980, and his luck ran out in 1991 when he was murdered, along with his secretary, in his apartment—stabbed to death. Two of the assassins escaped to Iran, but the third, Ali Vakili Rad, was captured in Switzerland. In 1994, a French court found Rad guilty and sentenced him to life in prison; however, he was released in 2010 and returned to Iran.

Bakhtiar’s meager accomplishments as an exile, and his ultimate demise, show why intelligence professionals generally put very little stock in exile reporting and activities. Exiles are rarely in a position to report reliable data or organize a meaningful opposition. Yet they often find an “in” with other branches of the U.S. government, particularly with officials who are eager to find a way to achieve their policy goals. Witness the sway that Iraqi exile Ahmad Chalabi exercised over Congress, which passed the Iraq Liberation Act in 1998, authorizing support for Chalabi’s Iraqi National Congress and other exile groups; or over the Defense Department in 2002 and 2003 when the Bush administration was looking for a rationale for invading Iraq. Not only did Chalabi accommodate the United States with suspect intelligence on Saddam Hussein’s supposed weapons of mass destruction, but he went so far as to claim that the Iraqi people would greet U.S. intervention forces with flowers. Neither turned out to be true.

During my tenure as chief of the Iran branch, I similarly witnessed the eagerness with which hopeful government officials could place undue stock in exile reporting. At that time, there was a keen desire at the White House to find moderate forces inside Iran whom we could work with in support of our foreign policy objectives. On one memorable occasion I was summoned to a meeting with NSC director Admiral John Poindexter and the NSC’s CIA representative Gary Foster to discuss the possibility. Because it was a high-level meeting, I had the staff of the Iran branch pull together all the relevant available data and consulted with the Agency’s analytic experts, whose job it is to weave together “all-source” intelligence to provide assessments. Poindexter was particularly interested in Akbar Hashemi Rafsanjani, who was then chairman of Iran’s parliament. Poindexter’s interest was obvious, since the arms-for-hostages deal had been Rafsanjani’s brainchild, according to subsequent reporting. But there was no case to be made that Rafsanjani was a moderate. He did come from a wealthy, commercial family and supported privatization of business, but this is not to be confused with political moderation or respect for human rights. With the benefit of hindsight, we can see that during his presidency, from 1989 to 1997, he presided over the execution of hundreds of dissidents and made no significant gesture toward normalizing relations with the United States.

At that meeting, I told Poindexter that our information consistently showed there were no meaningful moderate forces inside the Tehran power structure, including Rafsanjani. Poindexter seemed to accept our analysis, and I left the meeting feeling we had put the idea to rest. Clearly I had overestimated the power of facts and logic. The NSC continued to run the arms-for-hostages program and, unfortunately, continued to involve the CIA.

At the same time that the Iran-Contra scandal was unfolding, the Agency was starting to lose its best agents inside Soviet intelligence, one by one. Senior officials inside the CIA’s Soviet/Eastern Europe Division and their counterparts in the Counterintelligence Division came to the realization that their agents may have been betrayed by a mole within the CIA who knew their identities and had alerted the KGB. Burton Lee Gerber, head of SE; Milt Bearden, his deputy; and Clair George briefed Casey. As the Agency’s Soviet operations officers began comparing notes with the sleuths in counterintelligence, Casey ordered an internal investigation of his own. It would be eight long years before the Agency connected all the dots and determined who was responsible: my debating partner from our days as career trainees, Aldrich Ames, had walked into the Soviet embassy in Washington on April 16, 1985, with a letter that contained the names of intelligence agents and a $50,000 demand. Thus began his career as the Agency’s greatest traitor.
3

Meanwhile, the Agency’s involvement in the NSC’s arms-for-hostages operation remained fragmented, and most of those involved were never told the whole story—that proceeds from the sale of arms at severely inflated prices were being diverted by Ollie North to fund the Nicaraguan Contras in violation of the Boland Amendment.

Charlie Allen continued to deal with Ghorbanifar for months, even though he did not trust him, and in fact Ghorbanifar’s promises that hostages would be released in exchange for the arms we were sending continually proved empty or, at the very least, overstated. As mentioned earlier, we did get Reverend Benjamin Weir back, after the first arms shipment in 1985. A year later, Hezbollah released Father Lawrence Jenco, an American priest who headed Catholic Relief Services in Beirut, and later, in 1986, David Jacobsen, director of Beirut’s American University Hospital. But William Buckley was dead, the other hostages remained in captivity, and three new hostages, Frank Reed, Joseph Ciccipio, and Edward Tracy, had been kidnapped by a separate terrorist group and would be held for years. Reed was director of the Lebanese International School, Ciccipio was acting comptroller of the American University of Beirut, and Tracy was an American writer.

Allen did believe Ghorbanifar was telling the truth about one critical thing. In the summer of 1986, the arms dealer began to complain about the huge markup the United States was charging the Iranians for the missiles. One evening in August, he provided Allen with price lists and figures showing that the Iranians were being charged double the normal rate for these arms. As Allen studied the documents, his suspicions were aroused by the fact that two men who had replaced Ghorbanifar in channeling arms to Iran, the Iranian businessman Albert Hakim and the retired air force officer Richard Secord, were also involved in private efforts to aid the Contras. He didn’t know for certain but suspected that the markup must have been a way to get around the Boland Amendment, which prohibited giving money to the Contras. He spent the next month gathering information about it, and in October he wrote a seven-page memo to Casey outlining his concern that money from the arms sales had been diverted to “other projects,” and that the entire operation was a disaster, in danger of spinning out of control.
4
This was the first warning to Casey about a possible diversion to the Contras of profits from the Iranian arms deal.
5

In short order, the White House operation came unglued. A plane carrying military supplies was shot down in Nicaragua in early October. The lone survivor, an American named Eugene Hasenfus, was immediately identified by his wife as working for the CIA. Despite Allen’s memo, both Casey and the White House denied involvement. Then, in early November 1986,
Ash-Shiraa
, a pro-Syrian magazine in Lebanon, reported that the United States had been secretly selling arms to Iran. Soon the artifice collapsed. President Reagan at first refused to discuss the arms sales, but by mid-November, with the U.S. media now digging into the story, he acknowledged that “defensive weapons and spare parts” had been sold to Iran to improve relations. The Justice Department launched a probe and found that Oliver North had shredded sensitive documents in his NSC office, where investigators found a memo describing the diversion of $12 million from Iran arms sales to the Contras. Finally, at a televised news conference on November 25, Reagan stunned the country by saying that he had not been fully informed about the arm sales to Iran, and that up to $30 million had been secretly diverted to the Contras. This was the first time I learned of the diversion and the enormity of this fiasco. The president said North and Poindexter had stepped down from their positions. His White House was in disarray. The biggest scandal of his six-year-old presidency was about to unfold.

By this time, in late November, I was running the Afghan Task Force. One day I was called to a meeting in Casey’s office with Bob Gates, deputy director CIA; Clair George; and a few staff members. “Boys,” Casey said to us, “this will blow over in a few days, right?” I was incredulous, thinking, “You’ve got to be kidding! This will be on the front pages for months to come.” But to my astonishment, as I looked around the room, everyone was nodding in agreement. I wondered if maybe I was missing something the others were seeing. I decided that no one actually believed it was going to blow over, but the situation was so bad that it served no purpose to disagree with the director.

The fallout began immediately. The next day, President Reagan commissioned former senator John Tower of Texas to investigate the matter, and Attorney General Edwin Meese turned the Justice Department’s investigation over to the Criminal Division, with the FBI assisting. Within a month, Lawrence Walsh was named as independent counsel on the matter. Congressional hearings started in January 1987. Anyone involved in the matter had a very full dance card. That included me.

My first taste of the process was being called to the Office of the General Counsel to answer questions from the Justice Department. An Agency lawyer went with me, giving me, temporarily, a false sense of security. Just before we entered the debriefing room, he pulled me aside. “Jack, remember,” he said, “I’m the Agency’s lawyer. You are on your own. I will step in only when the conversation infringes on the Agency’s interests.” What an eye-opener! Thankfully, I was comfortable with all I had done and didn’t fear talking to Justice, but his words had a significant impact on me. Shortly thereafter, I signed up for legal insurance, which I hold to this day. It provides peace of mind; you can never be sure how your actions might be misinterpreted or misrepresented in a lawsuit.

A short time later, Walsh’s team deposed me. Again, the note takers were from the FBI, but one of their transcripts from the deposition was badly flawed. I corrected a number of factual mistakes when I reviewed it. The various committees and commissions called dozens of witnesses, but they were never able to resolve a central question about Iran-Contra: What was Bill Casey’s role? Casey suffered a stroke in his office on December 15, 1986, the result of a brain tumor, which left him unable to talk and caused his death a short time later. There has been much conjecture over the years about whether he helped the NSC orchestrate the operation. Lieutenant Colonel Oliver North implicated Casey in the scheme. Bob Woodward, the
Washington Post
investigative reporter who broke the Watergate story, wrote in his book
Veil: The Secret Wars of the CIA, 1981–1987
that he sneaked into Casey’s hospital room just before the director died to ask if he had known about the diversion of funds and that Casey had nodded yes.

Perhaps it was frustration over the enduring mystery around Casey’s role or over Congress granting immunity to North and Poindexter early on, making it impossible for them to prosecute successfully, but Walsh made life very difficult for a number of my colleagues. These were men who had spent their entire lives in service to their country. Many of them knew that the arms-for-hostages scheme was ill-conceived, but none of them had thought it was illegal. In fact, that is what got some of them in trouble. Clair George appeared before Congress without immunity because, I believe, he was actually trying to help in the fact-finding process. But when he gave an incorrect answer, he was slapped with a perjury charge. He was finally convicted in December 1992 on one count of making a false statement to Congress in denying CIA involvement in the Hasenfus supply flight, and one perjury count for denying knowledge of Secord’s role in the provision of arms to Iran and the Contras. His conviction on what were essentially technicalities—George had not approved of, or participated in, arms sales to Iran or the Contras—said more about the excessive and overreaching prosecution of independent counsel than it did about moral turpitude at the CIA. Walsh’s six-year investigation cost $33 million, and George’s legal bills alone exceeded $1 million, threatening to bankrupt him. He was the highest-ranking CIA officer convicted for official acts after only Richard M. Helms, the former CIA director who pleaded no contest in 1977 to withholding information about CIA involvement in Chile around the time of the Allende coup.