by Bob Spitz
For three days—three very unsettling days—Nancy Reagan refused to let McFarlane into Reagan’s room. Don Regan made the case that national security was involved, but she wouldn’t hear of it. The president needed his rest. Regan eventually smuggled an envelope from Bud McFarlane into the president, outlining the discussion with David Kimche. The next morning, July 18, Nancy relented and McFarlane finally got his audience. “It could be a breakthrough on getting our seven kidnap victims back,” an optimistic Reagan wrote in his diary that night.
McFarlane says he simply presented the facts, emphasizing that the Israelis believed the intermediaries were legitimate. The Iranian faction would show its goodwill by releasing William Buckley and perhaps others if . . . if . . . in return, the Americans shipped a small quantity of TOW missiles, state-of-the-art antitank weapons, to Iran. Ronald Reagan’s eyes were as big as saucers. “Gosh, that would be great!” the president said, obviously focused on only the human dimension of the details. McFarlane made sure to outline the risks, including some pertinent history and the vulnerability of such an exchange. “But I could tell it went in one ear and out the other,” McFarlane recalls. “He drilled down exclusively on getting the hostages back.”
In retrospect, McFarlane believes he should have waited until Reagan was out of the hospital and in a less emotional state. The geopolitics, he says, were lost in the details. But it wasn’t the job of the national security adviser to protect the president from himself. All he really owed Reagan was accurate, up-to-date intelligence. He didn’t realize at the time that his boss was about to take a step that would be politically cataclysmic. In any case, the president wasn’t oblivious. “We have to be very careful here,” he acknowledged. Reagan knew enough to convey he was “unwilling to allow the United States to supply arms directly to Iran.” That would amount to trading arms for hostages, which violated U.S. policy. But “it did not seem unreasonable” to the president “that Iranian moderates . . . would ask for weapons in order to strengthen their position.” He “was all for letting the Israelis do anything they wanted.” If they had possession of TOWs and took it upon themselves to ship them to Iran . . . well, there was a lot to be said for such an operation. Reagan admitted, “I didn’t have to think thirty seconds about saying yes to their proposal.” His instruction to McFarlane was: “Yes, go ahead. Open it up.”
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Open it up—as in Pandora’s box. Ronald Reagan had no idea what he was unleashing. For him, there was no intent to negotiate directly with kidnappers. He saw it as being all aboveboard. “He was dealing with an agent who might have influence with the kidnappers,” as Don Regan suggested. Reagan likened the Israelis to “Jafsie”—the anonymous go-between conscripted by Charles Lindbergh to make contact with his son’s kidnappers in 1932. The chief of staff wasn’t sure whether it was “naïve thinking” or “good statecraft.” In the end, he decided it was nothing more than “rug dealing”—that is, if the rugs you were dealing looked like bazookas on steroids.
Two weeks later, on August 6, 1985, the top command attempted to sharpen its focus. President Reagan, still in pajamas and under his wife’s eagle-eyed care, arranged a White House meeting upstairs in the residence to discuss the operation with Don Regan, Bud McFarlane, George Bush, Bill Casey, George Shultz, and Caspar Weinberger. All of them had heard bits and pieces of the caper, but Reagan asked McFarlane to lay out the details, including reasons why he thought it should be pursued. It wasn’t just the hostages. A strategic partnership with Iran might provide a block on the Soviet Union’s securing a direct path to the Indian Ocean’s warm water. It was also seen as a deterrent to Hezbollah. But it always led back to the return of the hostages. When McFarlane finished, the president canvassed the room. “Tell me everything,” he said, “whatever you feel.” Shultz was aghast. “This is almost too absurd to comment on,” he’d written on a directive. He dismissed it to Reagan as “a very bad idea.” Shultz could read between the lines. It was “the arms-for-hostages business, and we shouldn’t do it,” he said. That was mild, compared with Weinberger’s reaction. “Cap was livid,” McFarlane recalls, “just violently opposed.” The two secretaries rarely agreed on any foreign policy. If either of them opposed an initiative, the president usually edged away from it; with two of them opposed, he’d run. But the hostages gnawed at him. He’d met with a few of their family members, and their misery stuck with him. Now he listened to everyone’s opinions and said, “Okay, thanks. I’ll let you know.”
It didn’t take him long to sift through the variables. He called Bud McFarlane the following weekend. “You know that thing we were talking about?” he said elliptically. “I want to take the next step.” McFarlane understood the president’s intent. It meant exchanging TOW missiles for hostages. “You are authorized to tell the intermediaries to get back to their Iranian contact.”
“Mr. President,” McFarlane said, “you know Cap and George are against this.”
Reagan stood his ground. “I’ve thought about that, but I believe we ought to explore it to see if we get results.”
The operation’s intermediary was Manucher Ghorbanifar, a supremely shady character. A former agent of Savak, the Shah of Iran’s secret police, and a partner in Star Line Shipping, a joint Iranian-Israeli firm that moved oil between the two countries, he had lived in exile since the Iranian revolution, operating as an international arms merchant under different identities. His Portuguese passport was issued to Ismael Pereira, his Greek passport to Nikolaos Kralis, and his Iranian passport to Ja’far Suzani. As a result of two polygraphs administered by the CIA, the agency slapped a Fabricator Notice on Ghorbanifar, warning that he “should be regarded as an intelligence fabricator and a nuisance.” No less an agency official than Bill Casey corroborated the verdict in blunt terms: “Ghorbanifar is a con artist,” he stated conclusively. This was the intermediary the NSC entrusted to broker the exchange of TOW missiles for hostages.
Oliver North had dredged up Ghorbanifar as part of “contingency plans for extracting hostages . . . from Lebanon.” In early September 1985, North had traveled to Europe on his own sham passport, issued in the name of William P. Goode, to arrange transport for the freed hostages and to bridge a relationship with Israeli arms merchants and Adnan Khashoggi, a Saudi wheeler-dealer often referred to as the richest man in the world. Initially, McFarlane authorized the Israelis to send a shipment of mortar shells to Iran that Ghorbanifar demanded as a show of good faith. Afterward, the ante was upped to the TOWs.
The Israelis worried John Poindexter. “You were never quite sure what their motivations were,” he says. “With Ghorbanifar as a middleman, it doubled my apprehension.” But the president was relatively sanguine. “We had great respect for Israel’s intelligence abilities relating to matters in the Middle East,” he said, “and, as a result, we gave their assertions a great deal of credence.” Meanwhile, David Kimche had given Ghorbanifar his blessing, which was good enough for Bud McFarlane.
The situation became even murkier when the Israelis delivered ninety-six TOWs to Iranian agents at Mehrabad, an international airport on the outskirts of Tehran—and no hostages were released. Apparently, the shipment of missiles was intercepted by the Iranian Revolutionary Guard as opposed to the moderate faction for whom they were intended. Ghorbanifar was indignant when pressed. Because the faction he represented got nothing, it owed nothing in return. His contacts, he claimed, wanted all five hundred TOW missiles up front before delivering the hostages. “Do you want the Iranians to send an arm and a leg of Buckley as an advance?”*
The U.S. operatives were already in so deep that they had little choice but to proceed. McFarlane reportedly told the president, “We might as well go ahead and do the whole thing and see what comes of it.” Disappointed but determined, Reagan gave the plan his approval. On September 14, 1985, the Israelis loaded crates containing 408 TOW missiles with all identifying marks sanded off onto an unma
rked jet, which flew to Tabriz, in the northwest of Iran, where, this time, the moderates collected them. But the terms of the deal were then changed.
“It looks as though we’ve been deceived,” David Kimche told McFarlane. “The dealers can’t deliver all the hostages. We can expect only one.” It was up to McFarlane which person would be released. He chose William Buckley, whom the CIA was eager to have freed, but was told by Ghorbanifar that Buckley was too ill to travel. The next day, Reverend Benjamin Weir, who had been held the longest, was released outside the old, bombed-out U.S. embassy building in Beirut.
One hostage for five hundred TOWs. And a new demand from the Iranians delivered by Weir—the release of seventeen Shia prisoners held in Kuwait. “Though they do not want to harm anyone,” he reported, “they will go so far as to proceed to execute the six hostages if their demand is not met.”
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While these events were unfolding, Ronald Reagan was in seclusion at Rancho del Cielo, his mountaintop aerie above Santa Barbara. On August 4, 1985, he’d returned to Bethesda Naval Hospital, where doctors biopsied a sore that had developed on the right side of his nose. Once again, Nancy Reagan sought to stage-manage the details. At her insistence, hospital officials were ordered to send the tissue sample to the laboratory under an assumed name, and if the result revealed a malignancy it was not to be announced. In fact, the biopsy indicated that the president had a mild form of skin cancer, basal cell carcinoma, though a press release dictated by the First Lady avoided any mention of the diagnosis, saying only that her husband was in excellent health.
None of this sat well with Don Regan, who urged her to be candid about the president’s condition. He’d returned to the White House with a Band-Aid on his nose, a beacon to the intrusive press corps. To quell their curiosity, the First Lady instructed Larry Speakes to say, “He had a pimple on his nose which he picked at and irritated.” In any case, Speakes was to deny that a biopsy had been performed. He was to call it “an irritation of the skin.” Regan knew that if she kept up the deception, the press would eventually uncover the truth and it would backfire on the president.
But Don Regan wasn’t calling the shots. Nancy Reagan was, as she made very clear to him. “Don was already on the First Lady’s shit list,” Sheila Tate recalls. During the president’s first confinement to the hospital, the chief of staff and the vice president had requisitioned a helicopter for their daily visits, which had put Nancy Reagan’s nose out of joint. “That seemed wrong to me,” she wrote in her memoir. Her reaction at the time was exponentially stronger. She felt Regan was overstepping, just as she felt he’d taken liberties by enlisting a Secret Service detail for his own safety, a perk never previously awarded the position. A story appeared in the next day’s edition of the Washington Post insinuating that the chief of staff was comporting himself more like a “prime minister.” There was nothing dubious about its anonymous source. According to a White House aide, “It came directly from [Nancy Reagan’s] Chief of Staff to the reporter.”
There was no love lost between the First Lady and her husband’s chief of staff, but for a time they maintained a kind of wary coexistence. But they were both strong-willed, controlling figures used to running the show, and neither was inclined to share authority. Nancy didn’t want any backtalk from Regan. And he was fed up with her incessant phone calls and constant meddling. He told Sheila Tate that “he intended to bring in ‘some socialite lady’ to intercept Nancy Reagan’s phone calls.” None of this boded well. Both adversaries angled to influence and safeguard the president, but only one person was married to him.
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As Ronald Reagan tried to keep his focus on the hostages and his upcoming summit with Mikhail Gorbachev, he found himself dodging increasing criticism of U.S. policy toward South Africa. The Reagan administration had always maintained a position of neutrality on the issue of racial segregation in South Africa, threatening to veto any legislation imposing sanctions on the country. At the president’s direction, Jeane Kirkpatrick oversaw vetoes of United Nations Security Council resolutions condemning apartheid. Pat Buchanan, a fierce defender of the regime of Prime Minister Pieter Willem Botha, helped cement the president’s viewpoint by sending him a constant flow of right-wing propaganda justifying Pretoria’s government and condemning antiapartheid protests. As congressional support for sanctions began gaining steam, the president, in an interview with a Washington radio news director on August 24—the same day that South Africa arrested twenty-seven opposition leaders calling for Nelson Mandela’s release from prison—declared that South Africa had “eliminated the segregation that we once had in our own country, the type of thing where hotels and restaurants and places of entertainment and so forth were segregated—that has all been eliminated.” It demonstrated a stunning misunderstanding of a country where blacks were still denied voting rights and the use of most public facilities. Thomas Dawson, the executive assistant to Don Regan, seemed to sum up the White House attitude by saying that as far as South Africa went, “I couldn’t care less.” But on September 10, sensing rebuke by the Senate, including many Republicans, the president abruptly reversed course by signing executive orders banning future loans to South Africa as well as equipment to the country’s military.
This reversal occurred at a moment when the administration was facing criticism from the right that he was losing sight of his core principles, or at least failing to follow through on them effectively. Even the Washington Times had published a stinging editorial—“Fish or Cut Bait, Mr. President”—questioning Reagan’s commitment to conservative ideals and his seeming inability to strike back at terrorists. The sense of internal fighting and disorganization was not helping matters. Just then a new act of terrorism occurred that distracted from the institutional crises.
On October 7, 1985, an Italian cruise ship, the Achille Lauro, was hijacked in the eastern Mediterranean, off the coast of Alexandria, Egypt, by a faction of Palestinian extremists. Among the 755 passengers on board, 72 were American citizens, but at the time of the hijacking, all but 80 of the ship’s passengers had disembarked in Alexandria to visit Cairo and tour the pyramids. That left only 19 Americans and 61 other passengers on board. The ship was prohibited from docking, to avoid a repeat of the TWA hijacking in which hostages were removed from a vessel and secreted away in a hostile environment.
The NSC planned to launch an immediate rescue mission. “We had the JSOC [the Joint Special Operations Command] standing by,” says John Poindexter, who was monitoring the situation as it unfolded. A Special Forces squad deployed to Akrotiri, a British air force base on Cyprus, and prepared to take over the ship, when the Achille Lauro began to move north toward Tartus in Syria, where the hijackers presumed they would get asylum.
Under pressure from American diplomats, Syria and Lebanon refused to let the Achille Lauro dock. Instead, it sailed to Port Said, on the Mediterranean side of the Suez Canal. The ship’s captain reported that everyone on board was in good shape, but this was said with a Kalashnikov machine gun at his head. The four hijackers had already killed one passenger, a sixty-nine-year-old wheelchair-bound American named Leon Klinghoffer. His body had been dumped overboard.
Egypt agreed that if the hijackers surrendered, they would be granted safe passage out of the country in the custody of the PLO. Unaware that anyone had been killed, the Egyptians, Italians, and British agreed, over objections of the United States, which “advised strongly against the release of the terrorists or any concessions to them.”
Later, when all the details were in, President Reagan said as much in a personal phone call placed to Egyptian president Hosni Mubarak. He made it clear that he expected Egypt to extradite the hijackers to the United States, where they would be tried for killing Leon Klinghoffer. “They aren’t here anymore,” Mubarak explained. “I’ve already let them go.”
The Americans knew differently. “We h
ad a guy—a spy, an agent—in Mubarak’s office,” Bud McFarlane recalls. The NSA had also made an intercept of a phone call made by Mubarak, in which it was clear that the hijackers were still in Egypt and were on their way to an air base known as Al Maza, on the outskirts of Cairo, planning to get on a plane to Tunis. Oliver North had similar intelligence from an Israeli defense attaché named Uri Simhoni, who told North that he knew which plane the hijackers, along with terrorist mastermind Mohammed Abbas, were departing on, and that his agents in Egypt could get the plane’s tail number before it took off. Any action for engagement, however, had to be authorized by the president. In the interim, the U.S. Navy aircraft carrier Saratoga, with two F-14 Tomcat fighters, moved into position in the Mediterranean.
Poindexter relayed the intelligence to Bud McFarlane, who was in Illinois with the president, where he was scheduled to address workers on tax reform at a Sara Lee plant in Deerfield. “You may be in a situation where that aircraft goes airborne,” McFarlane told Reagan. “If the plane fails to acknowledge or comply with normal emergency signals sent by the Sixth Fleet, what do you suggest we do?” The president didn’t hesitate. “Do all the aerial maneuvers possible to demonstrate our firmness,” he replied. “If they still don’t respond, you can bring it down.” A few minutes later, Poindexter called with an update. Israeli agents, using only a flashlight, had gotten the plane’s tail number just before Egyptair flight 2483 had taken off. In any case, the plane was in the air. Reagan remained unmoved: “The order stands.”
The plan issued to the Saratoga was to send the Tomcats up with all lights out and no radio communication, to intercept the plane, and to force it to land at Sigonella, the NATO air base in Sicily, where the terrorists would be removed and flown to the United States. George Shultz worried about the Italian reaction. Diplomacy required him to notify the proper authorities in Italy, but the NSA objected, fearing leaks. The president agreed. “I don’t want to give them a chance to say no,” he said. “I’ll apologize afterward.”