Legacy of Ashes (The History of the C.I.A.)

by Tim Weiner

  Wells flew back to Washington in a Lear jet. A team of CIA officers met the plane. It was not a welcoming party. They suspected him of treason. They took him to a safe house in the Virginia suburbs and interrogated him for six weeks. “If I had wanted to stay a captive I would have stayed in Ethiopia,” Wells told them.

  “I had wanted to join the agency because they took care of their own,” he said. “They did not take care of me in any way, shape, or form. They thought I was a traitor for talking. I was asked to resign. That was devastating to me.” The pain remained more than twenty years later.

  “The Reagan Administration took a covert operation that had been begun on a very small scale under Carter and made it into an activity to be carried on inside of Ethiopia,” said David Korn, the American chargé d’affaires in Addis Ababa when Wells was taken hostage. “This was something I didn’t believe could go undiscovered and tried to get stopped. I was sure that given the surveillance the Ethiopian government exercised over us that this would be discovered. It was.”

  “WHAT THE HELL KIND OF INTELLIGENCE AGENCY ARE YOU RUNNING?”

  On March 7, 1984, Jeremy Levin, the CNN bureau chief in Beirut, was kidnapped. On March 16, Bill Buckley, the CIA’s station chief, disappeared. On May 8, the Reverend Benjamin Weir, a Presbyterian missionary, vanished from the streets of the city. In all, fourteen American hostages were taken in Beirut during the Reagan years.

  But Buckley always was uppermost in Bill Casey’s mind, and with good reason, for the director was personally responsible for his plight. Casey played a tape of Buckley being tortured to President Reagan. By all accounts, it had a profound effect.

  The CIA came up with at least a dozen plans to free Buckley, but it never had enough intelligence to execute them. In frustration, the clandestine service set out to try to kidnap Imad Mughniyah. “The President had approved Director of Central Intelligence Casey’s recommendation to kidnap Mughniyah,” said the government’s counterterrorism coordinator, Robert Oakley. The CIA thought he was in Paris. Alerted by the agency, French intelligence officers raided the hotel room where the CIA said they would find him. They found a fifty-year-old Spanish tourist where a twenty-five-year-old Lebanese terrorist was supposed to be.

  One of the many sources that the CIA station in Paris had cultivated in the name of counterterrorism was an Iranian swindler named Manucher Ghorbanifar, a wheeler-dealer who had been an agent of SAVAK, the shah’s secret police. Fat, balding, goateed, clad in fancy suits, carrying at least three fake passports, Ghorbanifar had fled Iran after the fall of the old regime. He had been selling dubious information to the CIA and Israeli intelligence ever since. Ghorbanifar had a pattern of predicting events after they happened; his information was carefully crafted to create cash payoffs. One day after Buckley was kidnapped, Ghorbanifar met with CIA officers in Paris, and said he had information that could free him. The agency subsequently subjected him to three lie-detector tests. The last time, he flunked every question but his own name and nationality. On July 25, 1984, the CIA officially certified Ghorbanifar as a consummate liar—“an intelligence fabricator and a nuisance”—and issued a rare worldwide burn notice in his name, an order stating that the truth was not in him and his word was never to be trusted. Nonetheless, on November 19, 1984, Ghorbanifar lured the veteran CIA officer Ted Shackley to a three-day meeting at a four-star hotel in Hamburg.

  After a ruthlessly ambitious rise to second-in-command at the clandestine service, Shackley had been forced into retirement by Admiral Turner five years before, to the great relief of some of his CIA colleagues. His name had become synonymous with professional dishonesty at the agency. He now worked as a private intelligence broker—a seller of secrets, like Ghorbanifar. He had represented himself in meetings with various Iranian exiles as an emissary of the president of the United States.

  Shackley listened with interest as Ghorbanifar discussed ways to free the American hostages. Perhaps it could be a secret ransom, a straight-cash deal. Or perhaps it could be profitable. The United States could ship missiles to Iran, using a trading firm called Star Line, which Ghorbanifar ran in tandem with the Israeli intelligence service. The sale of weapons would create goodwill in Tehran, millions for the private traders involved, and a large cash ransom to free Bill Buckley and his fellow American hostages. Shackley reported the conversation to the ubiquitous Vernon Walters, who passed it on to the counterterrorism czar Robert Oakley.

  On December 3, 1984, Peter Kilburn, a librarian at the American University in Beirut, was kidnapped. In Washington, the families of the American hostages begged the White House to do something. Their pleas wounded the president, who asked Casey constantly what the CIA was doing to set them free. “Reagan was preoccupied with the fate of the hostages and could not understand why CIA could not locate and rescue them,” said Bob Gates. “He put more and more pressure on Casey to find them. Reagan’s brand of pressure was hard to resist. No loud words or harsh indictments—none of the style of Johnson or Nixon. Just a quizzical look, a suggestion of pain, and then the request—‘We just have to get those people out’—repeated nearly daily, week after week, month after month. Implicit was the accusation: What the hell kind of intelligence agency are you running if you can’t find and rescue these Americans?”

  “IT WAS OF OUR OWN MAKING”

  In December 1984, as Washington prepared for Reagan’s second inauguration, Ghorbanifar’s offer to facilitate a profitable arms-for-hostages deal still stood. Casey kept it alive. That same month, he formally proposed that the CIA should finance its war in Central America with money from abroad. He had been kicking the idea around at the White House for half a year.

  Congress outlawed American funding for the war shortly before election day 1984. Two snafus at the clandestine service had compelled the cutoff. First there was the comic-book fiasco. Since Casey had exhausted the CIA’s small reservoir of paramilitary expertise in Central America, “the Agency had to reach outside itself and bring in people who could conduct that war for them,” said Deputy Director of Central Intelligence John McMahon. “That was mainly done through retirees from the Special Forces who had learned their trade in Vietnam.” One of these veterans had an old comic book that had been used to train Vietnamese peasants how to take over a village by murdering the mayor, the chief of police, and the militia. The CIA translated it into Spanish and distributed it to the contras. It quickly became public, and when it did, some high-ranking officers at the agency thought that “somebody’s pulling a covert action against us,” McMahon said. “This has to be absurd. And it turned out it was of our own making.” Casey issued reprimands to five senior CIA officers over the comic book. Three refused to sign them. Their insubordination went unpunished.

  Then there were the mines. Aiming to destroy what was left of Nicaragua’s economy, Casey had authorized the mining of the Nicaraguan port of Corinto—an act of war. This was a Duane Clarridge brainstorm, born of desperation after the funds for the contras started running dry. “I was sitting at home one night—frankly, having a glass of gin—and I said, you know, the mines has got to be the solution!” Clarridge said. The agency made them on the cheap, out of sewer pipe. Casey had notified Congress about the mining with an inaudible mumble. When Senator Barry Goldwater, the Republican chairman of the intelligence committee, raised a ruckus about it, CIA officers defamed him as a muddleheaded drunk.

  Congress, wary of Casey’s ways, had specifically prohibited the agency from soliciting funds from third countries to evade the ban on aid to the contras. Casey nevertheless arranged for Saudi Arabia to kick in $32 million, Taiwan another $2 million, the money flowing through a Swiss account controlled by the agency. But it was a stopgap.

  In January 1985, at the start of the second Reagan administration, the director faced two urgent commands from the president. Free the hostages. Save the contras. The missions commingled in his mind.

  Casey saw life as an enterprise. He believed in the end that politics, policy, d
iplomacy, and intelligence were all business deals. He saw how the hostage crisis and the cash crunch confronting the contras could be resolved through a grand bargain with Iran. The director would have preferred to run the Iranian operation by himself, but he faced the universal opposition of his clandestine service to working with the notorious Manucher Ghorbanifar, and the CIA had no other channel into Iran. Casey would have loved to save the contras single-handedly, too, but the CIA was prohibited from providing them with direct assistance. His solution was to run both operations outside the government.

  He conceived what he believed to be the ultimate covert action. It lasted less than two years from conception to destruction, and it came dangerously close to ruining President Reagan, Vice President Bush, and the agency itself.

  “He was running a great risk,” Bob Gates reflected, “jeopardizing the President, himself, and CIA.”

  41. “A CON MAN’S

  CON MAN”

  On June 14, 1985, Hezbollah, the Party of God, hijacked TWA Flight 847 out of Athens en route to Rome and New York. They took the plane to Beirut, hauled a U.S. Navy diver out of his seat, shot him in the head, and dumped his body on the tarmac, not far from where the American marines had died in their barracks twenty months before.

  The hijackers demanded the release of 17 jailed terrorists held in Kuwait—one of whom was Mughniyah’s brother-in-law—and 766 Lebanese prisoners held by Israel. President Reagan privately pressured Israel, and 300 of the prisoners were set free. At the request of the White House, Ali Akbar Hashemi Rafsanjani, the speaker of Iran’s parliament, helped negotiate an end to the hijacking.

  The ordeal taught Casey a lesson: Reagan was willing to make deals with terrorists.

  That same week, the Iranian wheeler-dealer Manucher Ghorbanifar got a message through to the director via an indicted Iranian American arms trafficker who was a relative of Rafsanjani’s. It was a bracing bulletin: Hezbollah held the hostages. Iran held sway over Hezbollah. An arms deal with Iran could free the Americans.

  Casey carefully explained this proposition to the president. On July 18, 1985, Reagan wrote in his diary: “It could be a breakthrough on getting our seven kidnap victims back.” On August 3, the president gave Casey formal approval to cut a deal.

  With that go-ahead, the Israelis and Ghorbanifar sent two shipments containing a total of 504 American TOW missiles to Tehran. The Iranians paid about $10,000 per missile, the middleman pocketed a modest profit, and Iran’s Revolutionary Guards took the weapons. On September 15, hours after the second shipment arrived, the Reverend Benjamin Weir was set free after sixteen months of captivity.

  Two pillars of Reagan’s foreign policy—no deals with terrorists, no arms for Iran—tumbled down in secret.

  Three weeks later, Ghorbanifar sent word that all six remaining hostages could be freed in exchange for several thousand American HAWK anti-aircraft missiles. The price kept going up: three hundred, four hundred, five hundred missiles for a life. On November 14, Casey and McMahon met with national security adviser Robert McFarlane and his deputy, Admiral John Poindexter. All four thought that Israel would deliver the American weapons to a faction within the Iranian military that wanted to overthrow Ayatollah Khomeini. But that was a lie, a smoke screen devised by Ghorbanifar and his Israeli backers, who stood to gain millions for the operation—the more arms delivered, the more profit to be pocketed.

  To watch over the middlemen, Casey chose Richard Secord, a retired American general turned private arms dealer, as the CIA’s representative. Secord had been a loyal soldier in the global underground effort to arm and finance the contras behind the back of Congress. His job was to ensure that a share of the profits wound up in the right hands.

  “THIS REALLY ISN’T WORTH IT”

  Shortly after 3 a.m. on Friday, November 22, 1985, Duane Clarridge, now chief of the European division of the clandestine service, was awakened by a frantic phone call from Lieutenant Colonel Oliver North. They met on the sixth floor of CIA headquarters about an hour later.

  The HAWK flight to Iran was becoming a debacle. The Israelis had packaged eight hundred technologically outmoded missiles on an El Al 747. The idea was for the Israelis to fly the weapons to Lisbon and transfer them to a Nigerian cargo plane leased by Secord, which would take them to Tehran. But no one had secured landing rights in Lisbon for the Israeli plane, which was at that moment somewhere over the Mediterranean.

  North said the plane was filled with oil-drilling equipment bound for Iran, and could Clarridge please move heaven and earth to clear its landing in Portugal? This gave Clarridge, who was neither a fool nor a stickler for rules and regulations, a moment’s pause. It didn’t matter whether drill bits or baby bottles or bazookas were aboard the flight, he observed. Sending anything to the Iranians was against the law and the foreign policy of the United States. But North assured him that the president had lifted the embargo and approved a secret deal to free the hostages.

  Clarridge worked the problem all weekend. One flight was scrubbed, then another. Finally he secured a CIA 707 in Frankfurt. The smaller plane managed to fly from Tel Aviv to Tehran and deliver a fraction of the cargo—eighteen HAWK missiles—to the Iranians on Monday, October 25. The government of Iran was unhappy with the quantity and the quality of the out-of-date weapons, not to mention their Hebrew lettering.

  No one was less happy than Deputy Director of Central Intelligence John McMahon, who arrived at work at 7 a.m. on Monday to discover that the CIA had broken the law. Only weeks before, McMahon had beaten back an attempt by the National Security Council staff to violate a presidential ban on political assassinations. “We received a draft secret executive order telling us to go knock off terrorists in pre-emptive strikes,” McMahon recalled. “I told our folks to send it back and tell them: ‘When the President revokes the executive order which precludes CIA from assassinations, then we’ll take this on.’ That hit the guys on the NSC staff. They went ballistic.”

  The flight of the CIA 707 was a covert action that required a finding, a signed presidential order. McMahon knew that Reagan had approved an arms-for-hostages deal in principle. But in practice the CIA’s participation required the president’s signature. McMahon ordered the CIA’s in-house general counsel to draw up a retroactive finding—backdated, like a bad check—authorizing “the provision of assistance by the Central Intelligence Agency to private parties in their attempt to obtain the release of Americans held hostage in the Middle East.” It continued: “As part of these efforts certain foreign materiel and munitions may be provided to the Government of Iran which is taking steps to facilitate the release of the American hostages.”

  There it was in black and white. The CIA sent the finding to the White House. On December 5, 1985, the president of the United States signed it. Under its terms, and under a second finding drawn up a few weeks later, Casey was the man ultimately responsible for the arms-for-hostages deal.

  Casey summoned Ghorbanifar to Washington to anoint him as the CIA’s Iranian agent in the operation. Clair George pleaded with him to stop: “Bill, the guy really is no good,” he said. “This really isn’t worth it.” So did the CIA’s Charles Allen, the chief of the agency’s Hostage Location Task Force. On January 13, 1986, he met with Ghorbanifar and then went to see Casey.

  “I described him as a con man to the Director,” Allen said. Casey replied, “Well, maybe this is a con man’s con man.” Casey insisted that the CIA would keep using Ghorbanifar as its arms merchant and interlocutor with the government of Iran. Charlie Allen knew there was only one conceivable reason to use him. The Iranian shyster told the CIA officer that the arms deal could spin off money for “Ollie’s boys in Central America.”

  On January 22, 1986, North secretly tape-recorded a conversation with Ghorbanifar. “I think this is, Ollie, the best chance,” the go-between said with a laugh. “We never will find such a good time again, never get such good money, we do everything free of charge, we do hostages free of charge, we do a
ll terrorists free of charge, Central America free of charge.”

  After a long haggle, the first HAWK transaction had concluded with $850,000 left over in a Swiss bank account controlled by Richard Secord. Colonel North took the money and gave it to the contras. Iran was now a source of covert funds for the war in Central America.

  Now the Iranians sent word that they wanted battlefield intelligence for the war against Iraq. The CIA already had provided intelligence for Iraq to use against Iran. This was too much for McMahon. In a January 25, 1986, cable to Casey, who was meeting his Pakistani colleagues in Islamabad, McMahon warned that the CIA was “aiding and abetting the wrong people. Providing defensive missiles was one thing but when we provide intelligence on the order of battle, we are giving the Iranians the wherewithal for offensive action.”

  Casey rejected his advice. McMahon retired not long thereafter as the number-two man at the CIA, closing out a thirty-four-year career on a bitter note. Bob Gates took his place.

  The deal went ahead.

  “A NEAT IDEA”

  Oliver North’s role in the underground effort to keep the war against the Sandinistas going had been an open secret in Washington since midsummer 1985. That winter, reporters were working on detailed accounts of what North was doing in Central America. But not a soul outside a very small circle at the CIA and the White House knew what he was doing in Iran.