by David Crist
The Reagan administration initially denied and obfuscated. On November 6, during an immigration reform bill signing in the Roosevelt Room just across the hallway from the Oval Office, a reporter asked, “Mr. President, do we have a deal going with Iran of some sort?” Reagan responded with the first of several misleading statements: “No comment.” Then he cautioned the press about engaging in speculation “on a story that came out of the Middle East, and that to us has no foundation—all of that is making it more difficult for us in our effort to get the other hostages free.”50
On November 10, Reagan met with his senior foreign policy team in the Oval Office to discuss the Iranian arms revelations and what they should tell the public. It would be the first airing of the details of the arms deals and the first senior-level meeting on the topic in nearly a year. Despite the grave looks around the room, President Reagan characteristically tried to keep the mood light; he and Vice President Bush exchanged some reasonably raunchy jokes. The meeting began with Poindexter providing an overview of the last year, the presidential finding signed in January and the arms sales that had ensued. Both Weinberger and Shultz expressed surprise upon hearing of both the presidential finding and the extent of the arms transactions with the Iranians. “I did not know of that,” Shultz pointedly told Poindexter. In the case of the secretary of state, it was a true statement, but Weinberger knew about most of the details from the NSA intercepts provided by General Odom. Shultz lambasted the entire Iranian overture: “The Israelis sucked us up into their operation so we could not object to their sales to Iran,” he said, then adding, “It is the responsibility of the government to look after its citizens, but once you do a deal for hostages, you expose everyone to future capture.”51
Reagan remained in denial. “We did not do any trading with the enemy for our hostages. The old bastard [Khomeini] will be gone someday, and we want better leverage with the new government. Actually,” Reagan added, “the captors do not benefit at all. We buy the support and the opportunity to persuade the Iranians.”
Neither Reagan nor Poindexter wanted to reveal all the details, as it would only hinder the release of more hostages and endanger those in Iran who had cooperated with the operation. Weinberger cautioned that “we have given the Israelis and the Iranians the opportunity to blackmail us by reporting selectively bits and pieces of the total story.”
At 8:01 p.m. on November 13, President Reagan addressed the nation from the Oval Office in a prime-time speech. “Good evening,” he began. “I know you’ve been reading, seeing, and hearing a lot of stories in the past several days attributed to Danish sailors, unnamed observers…and especially unnamed government officials of my administration. Well, you’re going to hear the facts from a White House source, and you know my name.”
An indignant Reagan continued, “The charge has been made that the United States has shipped weapons to Iran as ransom payment for the release of American hostages in Lebanon, undercut its allies, and secretly violated American policy against trafficking with terrorists. These charges are utterly false.” He laid out in broad terms the transactions with the Iranians, focusing solely on their role as a strategic initiative with Iran to end the Iran-Iraq War and as part of a larger containment strategy against the Soviets. He had authorized sending McFarlane to Iran when negotiations appeared promising, comparing this trip to Kissinger’s secret trip to China as part of that diplomatic opening. The president bristled at the rumors that the United States had provided “boatloads or planeloads” full of American weapons to Iran to spare the hostages. Reagan admitted, though, that the United States had provided a small amount of “defensive” weapons, but these modest deliveries, taken together, could easily fit into a single cargo plane.
At best, Reagan told the American public half-truths. An underpinning of the entire overture with Iran centered on hostages, most especially with the president. While Casey and McFarlane saw it through the lens of a strategic influence in Tehran, Reagan’s private discussions and personal diary myopically viewed the negotiations as an effort to free the hostages, with the by-product being better relations with the mullahs. In the last six months of the North-led effort, it had degenerated into a purely arms-for-hostages deal, personally approved by President Reagan. Whether the president deliberately lied or was merely self-delusional remains debatable, but the United States had not only negotiated with a declared terrorist regime, but sold senior officers of the military arm of the Islamic Revolution—the Revolutionary Guard—planeloads of advanced weapons that could easily be used for offensive action. They had even provided them a tour of the White House.
The ramifications of the arms-for-hostages affair were not confined to Washington. The supreme leader’s handpicked successor, Ayatollah Montazeri, stridently opposed any dealings with the United States. He publicly called for the execution of all those who had met with the Americans. Since Khomeini had sanctioned those activities, he defended their actions as a necessity based upon the pressing needs of the war. The two religious leaders exchanged a series of letters in which their disagreement aired before the Iranian public. Khomeini removed Montazeri as his successor and ordered the execution of Mehdi Hashemi and several of his followers, despite pleas for clemency by Montazeri.
With the covert opening fully exposed, Reagan ordered the State Department to take charge of any new talks with the Iranians. Charles Dunbar, a Foreign Service officer ignorant of any of the previous discussions with the Iranians, joined George Cave to meet with Feridoun Mehdi-Nejat on December 13 in Frankfurt. Dunbar stuck to his instructions. The strategic concerns regarding the Soviet Union that had led to the arms transfers remained unchanged. However, there would be no further arms transfers and no normalization of relations while Iran continued to countenance hostage taking and supported terrorism. Mehdi-Nejat tried to ingratiate himself to the Americans. Iran remained committed to continuing the strategic opening. He pressed for the United States to abide by earlier discussions regarding providing more weapons and advocating for the release of the Dawa terrorists held in Kuwait in exchange for Iran using its influence to get hostages released. The two parties had finally reached an impasse.52
Dunbar returned to the States; Cave stayed in Europe to visit his grandchildren. On December 14, Cave received a call in his hotel room. On the other end was Mehdi-Nejat. He urgently wanted to meet with Cave the next morning. Cave agreed, as the two men had become friendly over the past year.
Mehdi-Nejat said he had talked with his superiors (although Cave suspected he’d spoken to a senior Iranian in Frankfurt). “Tehran is most anxious to push forward and is interested in how fast the State Department can draw up a plan.” The United States had promised TOW missiles, intelligence, and cooperation in getting rid of Saddam Hussein, Mehdi-Nejat argued. He urged Cave to check back with Washington again, since it had reneged on these commitments.
Despite his long-standing objections, Secretary Shultz did not want to end the Iranian channel. Mehdi-Nejat had consulted with Rafsanjani, and there were some indications that the Iranian foreign minister was interested in working through this conduit. Shultz did not want the CIA involved, so he ordered Cave off the detail. Dunbar planned to meet with Mehdi-Nejat again in Geneva on December 27, to again reiterate that the channel remained open to pass messages, but the days of providing arms and intelligence were over.53
On December 19, Odom dutifully brought Weinberger the intercepts related to the meeting and the State Department’s secret contacts. Weinberger was livid. He immediately sent a nasty memo to the White House: “I had assumed that we were finished with that entire Iranian episode and so testified to Congressional Committees during last week. I was astounded, therefore, to learn after my testimony, that the United States ‘negotiators’ were still meeting with the same Iranians.” Angry at Shultz for not telling him about the meetings, he wrote, “I would very much have appreciated an opportunity to present to the President arguments as to why we should not continue dealing with these ch
annels in Iran.”54
Shultz backpedaled and objected to Weinberger’s hostile tone. But the defense secretary had finally succeeded in killing the Iranian weapons-for-hostages baby.
In popular lore, the Iranian arms dealings have been portrayed as rogue policy pursued by the national security staff due to an inattentive president. In truth, the arms-to-Iran initiative continued a five-year-long strategy, one deeply rooted in Cold War fears of revolutionary Iran falling under the Soviet sphere. While the U.S. government publicly tried to isolate Iran, Reagan ordered the CIA to surreptitiously develop contacts within the Iranian government in a quiet attempt to steer Iran back to the West. Its chief architects—Robert McFarlane, John Poindexter, and William Casey—viewed providing weapons as just another means to find a pragmatic faction to work with inside the Iranian government. As Poindexter wrote in an op-ed piece in the Wall Street Journal at the height of the scandal, he firmly believed that cultivating such a group, over time, would break down the deep mutual suspicion that permeated both sides. Iran again might serve as a bulwark against Soviet expansionism. In the process, it would help release the American hostages in Lebanon and curb Iranian terrorism. Reagan agreed, scribbling on a copy for Poindexter, “Great. RR.”55 Instead, it degraded into a swap of weapons for hostages, a political scandal. Public officials in both Washington and Iran had been badly burned by the revelations. The real legacy of the Iranian arms affair was to scuttle any hope of rapprochement for the next two decades.
Eleven
A RING ON THE AMERICAN FINGER
It was the nadir of the nadir,” commented Richard Armitage about Christmas 1986. The Iran-Contra revelations threatened to unravel the Reagan presidency.
The other shoe had dropped on the Iranian arms dealings. Beginning with the very first shipment of TOW missiles, both the Israelis and Americans had overcharged the Iranians. A bill charged to Iran called for $10,000 per missile, when the actual cost to the Defense Department was closer to $3,500. This quickly accumulated into millions of dollars of surplus of nonappropriated funds, Iranian money. Rather than turn it over to the U.S. Treasury, Oliver North funneled it with General Secord into buying arms to support the U.S.-backed rebels in Nicaragua, a scheme he later termed, “a neat idea.” This treaded on illegality, and Congress was revving up for hearings that spring, dragging senior officials, including John Poindexter and Oliver North, before the cameras in hearings that promised to be as electrifying as the Watergate hearings a decade earlier.
A presidential commission looking into the matter, headed by Republican stalwart former Tennessee senator John Tower, mildly criticized Reagan for his detached leadership style and for allowing the National Security Council to conduct operations and not just coordinate policy. The Tower report concluded that the president had traded arms for hostages. Reagan, like Claude Rains in Casablanca, professed “shock” to the affair even though he had been instrumental in the policy from the outset.
The strain of the scandal caused backbiting and open hostility within the administration. Secretary George Shultz took the rare action of going on television and publicly criticizing the president for trading arms to the ayatollah. This angered the First Lady, Nancy Reagan. She confided to the affable Saudi ambassador, Prince Bandar, that Shultz should go for being “disloyal to the president.”1 Reagan refused to take his wife’s advice and fire his secretary of state, although the two continued to verbally spar during following meetings in the White House Situation Room over the wisdom of the entire enterprise. Reagan, despite the growing scandal, continued to believe it had been a worthwhile endeavor.2
The scandal caused a major housecleaning in the White House. Poindexter resigned and Frank Carlucci came in as the new national security adviser, with Weinberger’s former military aide, Colin Powell, going over to the White House as his deputy. Robert Oakley joined them, reluctantly accepting the Middle East portfolio. Over at the CIA, William Casey suffered a massive stroke in December and remained in his hospital deathbed, and after a failed effort to confirm Robert Gates as his replacement, FBI director William Webster accepted the assignment heading the spy agency.
News of Washington’s secret dealings with Iran caused a crisis of confidence in the Middle East. “While we were sending high-level intelligence briefers to see the king of Saudi Arabia and the emir of Kuwait to warn them about the dangers they faced should Iran defeat Iraq, it turns out we were sending weapons to Iran. You can imagine the reaction,” said Peter Burleigh, who headed the Office of Northern Gulf Affairs at the State Department. “They had not expected us to do that!”3
The Organization of Islamic Cooperation held its annual meeting in Kuwait in January 1987. Amid the noise of the artillery rounds of the Iran-Iraq War, members debated the real policy of the United States in the region and American treachery. While Washington had publicly pressured countries not to sell Tehran weapons, it had secretly engaged in precisely that. Saudi officials who’d suspected the U.S. arms transfers had repeatedly been reassured that no such secret actions were under way. News of this duplicitous policy shook the confidence of moderate Arabs in the good faith of the U.S. government and called into question American reliability against Iran. Few believed the Reagan administration’s excuse that it was a rogue operation from the White House basement.4
“America is a vastly successful conspiratorial power,” remarked veteran Middle East diplomat Richard Murphy about the Arab view of the United States. “The Gulf states are pretty damn cynical, very much wedded to the idea that nations have interests and not affections, and if we saw it in our interest to play with Iran, we’ll play with Iran. But it made them nervous.”5
Leaders in the area were suspicious of us because of Iran-Contra,” remarked Sandra Charles, who headed Middle East policy in the Pentagon under Armitage. When intelligence reports showed that Iran was positioning Hawk antiaircraft missiles—the same type sold by North and company to Iran—on the disputed island of Abu Musa, the defense minister of the United Arab Emirates responded to Charles during one meeting, “Great to know the missiles that you provided them are now a threat to your own forces. A fine mess you got yourselves into.”6
Carlucci and Powell revamped Operation Staunch. President Reagan formally designated Secretary of State Shultz as the lead for coordinating a new interagency effort to halt weapons flowing to Iran. He assigned the task to the undersecretary for security assistance, former congressman from Illinois Edward Derwinski, who formed an Operation Staunch committee composed of representatives from across the government, including the intelligence agencies. It met every two weeks in the Old Executive Office Building, where it went over the latest open and sensitive intelligence reports about weapons destined for Iran and developed a coordinated government-wide response to cancel any sales. The new Operation Staunch immediately had success, especially in Europe. Munitions sales by Western Europe to Iran dropped dramatically, from $1 billion in 1986 to less than $200 million in the first half of 1987, and only four NATO nations sold arms to Iran, a drop from twenty-three the year before. At the end of that year, the United Kingdom ordered Iran to close its weapons procurement office in London through which Tehran purchased an estimated 70 percent of its weapons.7
While the State Department pursued Operation Staunch, the Pentagon fell back on the ongoing military-to-military contacts to mitigate the political damage. “The military-to-military ties through CENTCOM were a source of comfort to them and showed constancy in the relationship,” remarked Richard Murphy. In one instance, while Richard Armitage was being flailed by Jordan’s King Hussein over the inconsistencies in American policy toward Iran, CENTCOM and Jordanian officers were in the next room planning an exercise as though nothing had happened.”8 The CENTCOM commander noted this too, after a swing through the region. “For the short run, our military cooperation has survived the shock intact and is in a position to provide some cushioning for other elements of our relationships in the region,” General George Crist wrote to Weinbe
rger.9
While scandal consumed the politicians in Washington, the tanker war escalated dramatically. Iraqi aircraft struck sixty-five ships flying flags from various nations transiting to Iranian ports. Saudi Arabia allowed Iraqi Mirages to refuel at their air bases, permitting them to extend their range to the Strait of Hormuz. The Iraqis added long-range bombers newly purchased from Moscow. These lumbering four-engine planes, called Badgers, carried a powerful punch—Chinese-made cruise missiles packing a warhead with three times the explosive power of an Exocet.10
The Gulf Arabs increased their assistance to Iraq. Saudi Arabia paid to improve Iraqi oil pipelines running through Turkey. Kuwait and Saudi Arabia provided Iraq with as much as $1 billion in assistance each month, and Kuwait’s contribution alone amounted to some $13 billion by 1987.11 Kuwait opened the door for military aid flowing to Iraq. In one week alone, in December 1986, an unprecedented seven Soviet arms carriers arrived in Kuwait and delivered more than three battalions of T-72 tanks, plus advanced MiG-29 aircraft.12
After seven years of war and revolution, Iran’s conventional military capabilities to respond had greatly diminished. A combination of spare-parts shortages and combat losses had reduced its air force, according to DIA estimates, to no more than a few dozen operational aircraft, and most of these were committed to the Iraqi front. Following the downing of their F-4 by the Saudis, the Iranians used Italian-made helicopters outfitted with small missiles to attack shipping and shifted operations to the central-southern Gulf, where they operated from the island of Abu Musa and the Sirri oil platform. They hit eighteen ships in 1986 before the lack of spare parts halted flight operations.13
The burden of waging Iran’s campaign fell to the vestiges of the shah’s once impressive navy. After the revolution, clerics assumed senior positions to monitor the loyalty of the service, leading to an exodus of officers to the National Iranian Tanker Company or into exile. With the outbreak of war with Iraq, the government tried to retain the officers needed to operate aircraft and ships, often successfully appealing to their nationalist sentiments. Others remained driven less by the tug of country than by family or the need for a paycheck. Among these were professional, American-trained officers who rose in rank and took the helm of a depleted navy in its first major war against Saddam Hussein.