$Unique_ID{bob01026} $Pretitle{} $Title{Iran-Contra Affair: The Report Chapter 6A Keeping 'USG Fingerprints' Off: 1984-1985} $Subtitle{} $Author{Various} $Affiliation{} $Subject{contras country congress funding cia mcfarlane casey administration countries intelligence} $Date{1987} $Log{} Title: Iran-Contra Affair: The Report Author: Various Date: 1987 Chapter 6A Keeping "USG Fingerprints" Off: 1984-1985 ["USG fingerprints" is North's term used in two PROF notes to Poindexter dealing with the possible disclosure of the U.S. Government link to the Costra operation. (Exhibits OLN-131 and OLN-307, Hearings, 100-7, Part III.)] In October 1984, the President signed into law a version of the Boland Amendment barring the Central Intelligence Agency, the Department of Defense, and "any other agency or entity of the United States involved in intelligence activities" from providing support to Contra military activities. Explaining the statute on the floor of the House of Representatives immediately before its passage, Representative Edward P. Boland, then Chairman, of the House Permanent Select Committee on Intelligence, was clear about the legislation's intent: the provision "ends U.S. support for the war in Nicaragua." National Security Adviser Robert C. McFarlane acknowledged that intent: "the Boland Amendment governed our actions," he told these Committees. Although Congress eventually approved humanitarian aid for the Contras and authorized intelligence sharing, the full prohibition on lethal support remained in effect until October 1986. Despite the Boland Amendment's prohibition, U.S. support for the Nicaraguan Resistance continued. As set forth fully in Chapters 2 and 3, members of the National Security Council staff - with help from officials of other Government agencies - supervised a covert operation supporting the Contras. They provided weapons and military intelligence to the Resistance and resupplied troops inside Nicaragua, using funds raised from foreign countries, private citizens, and ultimately the Iranian arms sales. They did so despite the unambiguous intent of Congress that the U.S. Government, including the NSC staff, could not aid the Contras' military effort. Secrecy, therefore, was vital to the success of the Contra operation. Disclosure of U.S. support, Oliver North wrote to John Poindexter in May 1986, "could well become a political embarrassment for the President and you." Moreover, disclosure would surely doom the project. Poindexter told these Committees: "It was very likely if it became obvious what we were doing that Members of Congress would have maybe tightened it [the law] up. I didn't want that to happen." But just as secrecy was vital to the operation's success, even limited success jeopardized that secrecy. As the Contras continued to purchase supplies and equipment despite the cut-off of aid, Congress and the media inquired, inevitably, about the sources of Resistance support and funding. Officials involved in the Contra support operation took every precaution to ensure that the project remained secret. They withheld the facts from some Administration officials who spoke out frequently on U.S. policy in Central America, forcing them to mislead Congress and the American people. They discouraged reporters from pursuing the link between the NSC staff and the Contras. And they responded to direct inquiries with half truths and false statements. 1983-1984: Suspicions, and the "Casey Accords" Even before the full-prohibition Boland Amendment was enacted in October 1984, Members of Congress were concerned that the Administration was not providing sufficient information about the covert program in support of the Nicaraguan Resistance. In April 1983, Senator Daniel Moynihan, Vice Chairman of the Senate Select Committee on Intelligence, spoke of a "crisis of confidence" between Congress and the intelligence agencies running the operation. A year later, Committee Chairman Barry Goldwater rebuked the CIA in the wake of the revelations related to Nicaragua harbor mining. He wrote to CIA Director William Casey: "[W]e were not given the information we were entitled to receive." Expressing the sense of many in Congress, Goldwater said at an Intelligence Committee hearing: "We cannot play guessing games with the intelligence community if the relationship between legislative and executive branches is to work." After the mining incident became public in April 1984, Director Casey was called before an extraordinary secret session of the Senate - 60 Members were present - to explain the failure to consult adequately ahead of time. The Director apologized at the session, and promised a new spirit of cooperation. The promise would soon be formalized in what became known as the "Casey Accords," an agreement between the CIA and the Senate Intelligence Committee on consultation guidelines for covert operations. Under the agreement, the CIA would share explanatory material outlining the exact nature, goals, and risks of the covert operation. The CIA would also give prior notice of any "significant, anticipated intelligence activity," even if the planned activity was part of an ongoing covert operation. The accords reflected the recognition that cooperation and forthrightness on covert activities were essential in the relationship between the Executive and Congress. But the subsequent actions of Casey and members of the NSC staff did not reflect that recognition. 1984: Testimony Before Congress on Third-Country Assistance In December 1983, the President signed into law legislation limiting funding for the Contras in fiscal year 1984 to $24 million. The limit was the result of a compromise between the House, which hoped to curtail support for the Contras, and the Senate, which favored continuing the aid. Explaining the compromise on the floor of the House, Representative Boland said the $24 million, which would likely run out by June 1984, represented a "cap on funding from whatever source." Representative J. Kenneth Robinson, the ranking Republican on the House Intelligence Committee, said that the $24 million compromise meant "no additional funding could be made available" for the Nicaraguan Resistance "unless additional authorization and/or appropriations are approved by both Houses." The Administration, however, sought funding for the Contras beyond the $24 million appropriation. On several occasions in 1984, officials tried to obtain aid for the Contras from third-country sources. Those attempts occurred as early as February, when the Administration began to suspect that Congress was not likely to approve supplemental funding for the Contras when the $24 million ran out. Shortly thereafter, McFarlane sought to obtain equipment, materiel and training for the Contras from Country l. In a March 27, 1984, memo, CIA Director Casey urged McFarlane to proceed with his plans to obtain aid from Country 1, and told him that the CIA was working along a second track to obtain assistance from that Country. Casey added in the memo that the CIA also was exploring "the procurement of assistance from [Country 6]." That country had "indicated" that it might make "some equipment and training available" to the Contras. Country 1 rejected McFarlane's approach, and the advance to Country 6 was called off, in part because of the revelations in April relating to the Nicaraguan harbor mining. As McFarlane testified, those revelations left a "zero probability" that Congress would provide supplemental funding for the Contras, "and no amount of wringing our hands was going to change that." In May or June, the National Security Adviser obtained a $1 million-a-month donation from Country 2, and informed the President, who expressed "satisfaction and pleasure" with the gift. McFarlane testified that he also shared the news with the Vice President. McFarlane informed the President of the donation using a notecard. He rejected the option of telling the President about the gift at a morning briefing because "there could be . . . as many as ten people in the room [and] I simply didn't know for sure who would be there." In order to further ensure that the new Contra funding remained secret, McFarlane did not share details of the gift with the Secretaries of State or Defense. McFarlane, who acknowledged that he regarded the Country 2 contribution as a secret to be closely held, testified he told them in vague terms that the Contras "had been provided for through the end of the year." Neither Secretary of State Shultz nor Secretary of Defense Weinberger recall receiving any information on third-country funding until later. McFarlane also instructed North not to share news of the new funding with anyone; indeed, according to North, McFarlane never told him which country had contributed. North, in turn, instructed Contra leader Adolfo Calero: "never let agency [CIA] know of amt, source, or even availability [of the funds] . . . . No one in our govt. can be aware . . . . Your organization must not be fully aware." Stories about the third-country contacts soon began appearing in the media. In mid-April 1984, The Washington Post quoted anonymous sources speculating that third countries might be persuaded to provide money for the Contras. Administration officials were quoted in the story as flatly denying that the United States would approach foreign countries for assistance. In an article 4 days later discussing upcoming U.S.-Israeli talks on Israeli assistance to Central American countries, The Washington Post quoted State Department spokesman John Hughes as saying, "The United States has no intention of using third countries to finance covert action in Central America." Although Hughes was not aware, his denial came at a time when the CIA and NSC staff were continuing their attempts to obtain third-country support. Prompted by the reports, the House Permanent Select Committee on Intelligence requested an appearance on May 2 by CIA Director Casey and Kenneth W. Dam, then Deputy Secretary of State. The testimony occurred about 5 weeks after Casey had sent the memorandum to McFarlane outlining the CIA's efforts to obtain lethal assistance for the Contras from Country 1 and Country 6 and indicating Casey's awareness of McFarlane's attempt to obtain assistance from Country 1. Coming only days after he had pledged to be fully candid with Congress, Casey's testimony was inconsistent with his memorandums: STOKES: . . . There has been some talk in the media with reference to [Country 1] or [Country 2] being alternative funding sources. What can you tell us about that? CASEY: Well, there has been a lot of discussion. We have not been involved in that at all. FOWLER: Who has? CASEY: I do not know. * * * FOWLER: . . . Is any element of our Government approaching any element of another Government to obtain aid for the Contras? CASEY: No, not to my knowledge. Kenneth Dam acknowledged to the Committees that "there have been conversations with [Country 1]" about aid to the Contras and explained that those talks had led nowhere. He also said that there had been no "high level" approach to Country 2. Asked about Administration activities, Dam denied that the U.S. Government was approaching other countries for assistance: FOWLER: . . . Is the Administration actively looking for help, either in funding or in tactical aid to our [Contra] operation? DAM: . . . We are not making approaches to other Governments. So it is clear - you know, when you say 'actively' I do not know what is going on in terms of people's minds or conversations among people within the executive branch. We do not have a program of approaching other governments for support, and we are not doing so. FOWLER: . . . We want to know whether or not in light of serious questions about the Congress' willingness to continue this funding, whether or not our Government in all of its ramifications is looking for help, both in funding and the possibility of some tactical or strategic or geopolitical - whatever you want to call it - help to our operations and policy in Nicaragua. DAM: All I can do is answer precisely, and that is what I am trying to do. We have no program of approaching other Governments. We are not currently approaching other Governments on this subject. I am not going to tell you we will not sometime in the future. We do not see this as a realistic approach. We do not see this as a solution, and I think that is a very precise answer. Dam's denials accurately reflected State Department policy but not Administration activities. There is no evidence that Dam was aware of the Casey and McFarlane third-country efforts or that he did not make his statements in good faith. However, Casey, who knew at least about the approaches to Countries 1 and 6, did not correct Dam's statements. With the help of the Country 2 donation, the Contras survived beyond the summer of 1984, when their Congressionally approved $24 million allotment had been exhausted. The donated funds began to flow in July, and by September 4 the Contras had received $3 million. By then, Oliver North also had called on Richard Secord to purchase weapons for the Contras. On September 9, two major newspapers, The New York Times and the Miami Herald, published reports suggesting that third countries and private U.S. citizens had replaced the CIA in providing aid to the Contras. The reports prompted another Congressional inquiry. Three days after the stories appeared, the House Intelligence Committee called officials from the CIA and the State Department to appear before it. Members assumed that these officials - Dewey Clarridge, the CIA's Latin American Division Chief, and Ambassador Anthony Langhorne Motley, Assistant Secretary of State for Inter-American Affairs - would know whether the reports were true or false. Clarridge told the Members that the CIA believed the Contras had been receiving about $1 million per month - precisely what Country 2 had provided. He added, however, "We know of no place or no country that has supplied any funds in any real amount." Motley, who had not been informed of the contribution from Country 2, testified: FOWLER: Are we, is the United States of America, soliciting help for the Contras? MOTLEY: No. No. FOWLER: In other countries? MOTLEY: No. FOWLER: Are we encouraging other countries to participate? MOTLEY: No, no, and that's a very good point. FOWLER: Are we under any negotiations or discussions with any other countries to aid these efforts? MOTLEY: No. Motley explained the "decision" made on this issue by senior Administration officials. As the $24 million was running out, he said, the Administration decided that even though third-country solicitation was still "technically" permitted, a "feeling of mistrust" existed, and "in that context it was decided that we would not encourage and that we would not facilitate either other governments or in private groups within the United States. And to my knowledge, that has been honored." Committee member Wyche Fowler, Jr., responded that he had "a hard time believing . . . that our government does not know" how the Contras were surviving. Indeed, the President, the Vice President, and the National Security Adviser knew that Country 2 had made a substantial donation to the Contras. Early 1985: The Second Country 2 Contribution In February 1985, the Administration obtained an additional donation from Country 2. A $5 million deposit was made on February 27, 1985; by the end of March 1985, the amount totaled $24 million, bringing the total donation from that country to about $32 million. Again, officials took steps to ensure that the funding remained secret. McFarlane withheld information about the new donation from two likely recipients of Congressional inquiries on the subject of U.S. support for the Contras: Secretary of State Shultz and CIA Director Casey. The President did not tell Shultz either, even though he briefed the Secretary on his meeting with the donor country's head of state shortly after that meeting. Shultz testified: "I don't think he [the President] is out to deceive me." (Secretary of Defense Weinberger, along with the Chairman of the Joint Chiefs of Staff, found out about the donation independently.) About Shultz, McFarlane testified that he "shared virtually everything - I think indeed everything - with the Secretary of State that I would learn of relevance." Asked whether the reason he did not tell Secretary Shultz was "for his benefit, not for yours," McFarlane said yes. McFarlane further explained: "I am guessing that it [not telling Shultz] was probably out of concern for further dissemination and compromise of that relationship, and damage and embarrassment." State Department and CIA officials had been frequently questioned about the sources of Contra funding in 1984. And McFarlane's decision not to tell Secretary Shultz about the donation came shortly after The Washington Post publicized correspondence between Representative Joseph P. Addabbo, the former Chairman of the Defense Subcommittee of the House Appropriations Committee, and the State Department. In a December 11, 1984, letter, Addabbo had asked Shultz whether some countries receiving U.S. foreign assistance had diverted some of those funds to the Contras. The State Department replied negatively one month later, and the correspondence was the subject of an article on January 23. Like McFarlane, North took action in February 1985 to prevent disclosure of U.S. Government activities in support of the Contras. In a letter addressed to Calero about the new large donation, North revealed his intention to conceal facts from Congress: Please do not in any way make anyone aware of the deposit. Too much is becoming known by too many people. We need to make sure that this new financing does not become known. The Congress must believe that there continues to be an urgent need for funding. Within weeks of the new donation, Assistant Secretary Motley was called to testify before the Senate Committee on Foreign Relations. On March 26, 1985, Senator Christopher Dodd asked about "a number of rumors or news reports around this town about how the Administration might go about its funding of the Contras in Nicaragua. There have been suggestions that it would be done through private groups or through funneling funds through friendly third nations, or possibly through a new category of assistance and asking the Congress to fund the program openly." Motley replied that the Boland Amendment prohibited "any U.S. assistance whether direct or indirect, which to us would infer also soliciting and/or encouraging third countries; and we have refrained from doing that because of the prohibition." Senator Dodd pursued the matter further: DODD: Well, that aside, looking at these resolutions, there are always clever ways of discovering something that may have been omitted. All I am asking from you is, and from the Administration more directly, is whether or not we can have an assurance that there will be no indirect efforts made to finance the Contra operation through third party nations or through other vehicles within the foreign aid authorization to finance this operation, that you will proceed pursuant to the resolution as adopted on the continuing resolution. MOTLEY: I think that was one thing that was loud and clear with us when I started. I told you that we understand what it means, direct and indirect, including third party. We take it to the letter of the law at its most liberal interpretation. And I can assure you that we have done it in the past. You want my assurances that we will continue to do it in the future, and if you feel that is necessary, I will so give it to you. DODD: We have that assurance, then. MOTLEY: That is right. After Senator Dodd referred to the availability of possible loopholes, Ambassador Motley responded: We are going to continue to comply with the law. I am not looking for any loopholes . . . . Nobody is trying to play games with you or any other Member of Congress. That resolution [the Boland Amendment] stands, and it will continue to stand; and it says no direct or indirect. And that is pretty plain English; it does not have to be written by any bright, young lawyers. And we are going to continue to comply with that. Again, Motley was not informed that the Administration had obtained the donation from Country 2, that the National Security Adviser and the CIA had sought assistance from other countries, or that the NSC staff had begun to supervise the covert Contra operation out of its offices.