TIME: Almanac 1993/TIME Almanac 1993.iso/time/caps/86/86capts.13

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                , ±                                                          ╚November 17, 1986

IRAN-CONTRA

The U.S. And Iran


The story behind Reagan's dealings with the mullahs


The tale sounded really too bizarre to be believed. The U.S.
conniving at arms shipments to Iran?  Sending a secret mission
to palaver with the mullahs?  Trying to keep the whole thing
from Congress and most of the U.S. Government?  And all over
Iran, of all places!  The country that held Americans hostage
for 444 days beginning in 1979, the land whose fanatical leader,
Ayatullah Ruhollah Khomeini, has never ceased to denounce
America as the "Great Satan," the state widely suspected to this
very day of fomenting terrorists attacks against Americans.

Yet there is no question that it happened. Initially in the
perhaps illusory hope of gaining influence with a post-Khomeini
government in Iran, but eventually also as an inducement for
Iranian help in winning freedom for U.S. hostages held by Muslim
zealots in LEbanon, the Reagan Administration approved
clandestine shipments of military equipment--ammunition, spare
parts for tanks and jet fighters--to Iran through Israel.

As long as the deep secret was kept--even from most of the U.S.
intelligence community--the maneuver is one sense worked. Iran
apparently leaned on Lebanese terrorists to set free three
American hostages, the latest of whom, David Jacobsen, flew home
to the U.S. last week for a Rose Garden meeting with Ronald
Reagan. But once the broad outlines of the incredible story
became known, the consequences were dire. The Administration
appeared to have violated at least the spirit, and possibly the
letter, of a long succession of U.S. laws that are intended to
stop any arms transfers, direct or indirect, to Iran.
Washington looked to be sabotaging its own efforts to organize a
worldwide embargo against arms sales to Iran, and
hypocritically flouting its incessant admonitions to friends and
allies not to negotiate with terrorists for the release of their
captives.

America's European allies, the recipients of much of that
nagging, were outraged. Moreover, the U.S. was likely to
forfeit the trust of moderate Arab nations that live in terror
of Iranian-fomented Islamic fundamentalist revolutions and fear
anything that might build up Tehran's military machine.
Finally, the Administration seemed to have lost at least
temporarily any chance of gaining the release of the missing
six. U.S. hostages in Lebanon, or of cultivating the Iranian
politicians who might sooner or later take over from Khomeini.
The 86-year-old Ayatullah is reported to be bedridden following
a recent heart attack, but for at least as long as he lives,
Iranian officials, including those who have been in quiet
contact with the White House, cannot afford to be caught dealing
any further with the Great Satan.

The story of how this came about leaked out in bits and pieces
all last week from bewilderingly varied sources: an account
published by a pro-Syrian weekly magazine in Beirut, a public
speech by the speaker of the Iranian parliament, guarded private
comments by government officials in Washington and Jerusalem,
even a Danish sailor' revelations about a voyage through the
Persian Gulf. Some of the more mind-boggling versions of the
tale had touches of melodrama that might have come from the most
lurid spy fiction: a presidential envoy slipping into Tehran
bearing (so the Iranians claimed) presents of pistols, a Bible
and a key-shaped cake; an American cargo plane disappearing from
radar screens over Turkey; a Danish ship changing the name
painted on its hull prior to reaching an Israeli port.

The Administration's distress at being caught out in such an
improbable and embarrassing situation was evident in the
scramble of the White House to put a lid on the rapidly
expanding story. Whereas only a few weeks ago the
Administration had rallied its forces to defend the President's
actions at the Iceland summit, virtually blitzing the media with
press conferences, interviews and briefings, now there was a
chorus of no comments, off-the-record observations, obfuscations
and pointed suggestions of self-restraint, even repression of
the emerging facts. President Reagan declared that the
disclosures "are making it more difficult for us" to win the
release of the Americans still held captive in Lebanon. The
just-released Jacobsen, in a moving appeal at his welcoming
ceremony at the White House, warned reporters that "unreasonable
speculation on your part can endanger their lives." Cried
Jacobsen: "In the name of God, would you please just be
responsible and back off!"

The pleas raised once more the perennial question of the
responsibility of the press, as well as the undisputed need of
the Government to carry on sensitive negotiations in secret.
In this instance, the story of the clandestine negotiations with
Iran was broken not by the American press but by a Lebanese
magazine and the speaker of the Iranian parliament. Together
they provided the major outlines of the secret dealings. Even
as President Reagan pleaded for a halt to speculation, sources
within his own Government confirmed much of the speculation and
added important details. While some congressional leaders
questioned the wisdom of making such a deal in the first place,
other critics blamed the disclosure on the Administration's
failure to take into account the danger of leakage and on its
tendency toward improvisation and swashbuckling. Moreover, none
of the information that emerged last week included potentially
dangerous details about the whereabouts of the hostages, their
movements or their captors.

Many of the details are still either murky or disputed, and some
may never be known. But this much seems clear: sometime around
August 1985, the White House got word that at least one of the
many quarreling factions in the Iranian government was
interested in re-establishing contact with the U.S. The first
message apparently came to American officials in Beirut. In
addition, Iranians who meet regularly with U.S. representatives
at the Hague, where Iran is pursuing a case against the U.S.
before the International Court of Justice, indicated that some
Tehran leaders wanted to talk.

With President Reagan's approval, a few top American officials
began a series of hush-hush meetings with Iranians that as of
last week had gone on for 14 months. The American
representatives apparently were guided, if not led, by Robert
McFarlane, then National Security Adviser. Just which officials
participated on the Iranian side is not known, but they are
believed to be allies of Ali Akbar Hashemi Rafsanjani, the
speaker of the Iranian parliament, who is less bitterly
anti-American than many of his colleagues. The sessions were
initially conducted in European cities, but they eventually
included three secret American missions to Tehran. One in
August that included McFarlane, who left the Administration last
December and is now on the staff of Georgetown University's
Center for Strategic and International Studies, and Oliver
North, a Marine colonel on the staff of the National Security
Council, was reported around the world last week. There was an
earlier meeting of U.S. and Iranian officials in Geneva in
October 1985. That mission was headed by John Poindexter, then
McFarlane's deputy and now his successor as National Security
Adviser.

The Administration claims that its primary motives were to open
some kind of back channel into the fierce factional struggles
now raging in Tehran and to gain the attention of some of the
politicians jockeying for position in the post-Khomeini era.
In itself that motive was shrewd, even laudable. The U.S. has
little hope of moderating Iran's behavior while Khomeini rules.
The aged Ayatullah may be too weak to provide much direct
leadership anymore, but no one dares do anything of which he
disapproves. Yet not all the men around him are as dedicated
as he is to pursuing the seven-year-old war with Iraq until that
country is crushed, or to exporting anti-Western revolution
throughout the Muslim world. If politicians in contact with the
U.S. were to gain major influence in a successor regime,
Washington might be in a position to urge them to wind down the
war with Iraq, call off troublemaking in neighboring states and
ease support of terrorism.

The U.S. cannot afford to ignore Iran, because the country is
a glittering geopolitical prize. One of the world's biggest
oil producers, it is strategically situated on the Persian Gulf,
through which most Middle East oil flows into world markets.
The U.S. dares not take a chance that Iran might fall into the
Soviet orbit. Moscow has been maneuvering for influence in
post-Khomeini Iran; it resumed buying Iranian oil and gas. If
Soviet blandishments do not work, bullying might. Over the past
year and a half, the U.S.S.R. has nearly doubled, to more than
50 divisions,the military forces stationed near its border with
Iran.

The U.S.-Iranian talks proceeded on two tracks, one concerning
general political questions, the other the hostages in Lebanon.
The Americans did their best to keep the two tracks separate,
but inevitably they tended to merge, if only because the same
people notably North, were involved in both sets of talks.
American officials insist that their prime purpose in agreeing
to arms transfers was to cultivate influence with potential
future leaders of Iran. Apparently, the Administration thought
these men might feel gratitude to the U.S. for supplying arms
that iran critically needs to fight its war with Iraq. But a
senior Administration official concedes that the subjects of
arms and the release of hostages became "linked."

In some minds the linkage began very early. In July 1985,
Israeli businessmen who had been in contact with Iranian
officials told Shimon Peres, then Israel's Prime Minister, that
they thought a swap of arms for U.S. hostages could be arranged.
Peres presumably communicated that information promptly to
Ronald Reagan. The story in Jerusalem is that the White House
designated Poindexter to look into the idea, and he named North
as liaison with Israel. In any case, the Israeli businessmen
were authorized by Peres to resume contacts and strike a deal
with the Iranians. The executives turned to Adnan Khashoggi,
a famed Saudi Arabian wheeler-dealer and an extremely wealthy
businessman. He got a long shopping list from Tehran that
included Hawk antiaircraft missiles and radar-guidance equipment
for them, anti-tank missiles, and spare parts for jet fighters.

Lebanese terrorists influenced by Iran released one of their
American captives, the Rev. Benjamin Weir, on Sept. 14, 1985.
According to Israeli reports, President Reagan telephoned Peres
to thank him for Israel's help in securing Weir's freedom. Five
days later Iran got some of the Hawk missiles and guidance
equipment that had been on the shopping list relayed through
Businessman Khashoggi. They are said to have been delivered by
a DC-8 cargo plane that was once owned by a Miami-based
air-transport company. The aircraft took off from Tabriz, Iran,
disappeared from radar screens over Turkey, made what was
supposed to be a "forced landing" in Israel and later returned
to Iran by a circuitous route.

More arms transfers followed. Israel so far this year has
shipped roughly $40 million worth of military equipment to Iran,
largely artillery and tank ammunition, and spare parts for
fighter planes. In itself, this is unremarkable. Israel has
been selling arms to Iran on and off since the Khomeini
government took power in 1979, originally in a successful effort
to win permission for Iranian Jews to emigrate to Israel. The
Ayatullah is a sworn enemy of the Jewish state, but Israel too
hopes to gain influence with Khomeini's potential successors.
In addition, Israel believes that its self-interest lies in
helping Iran at least to stalemate Iraq in the gulf war.

The U.S. has sometimes protested the Israeli sales, sometimes
grudgingly winked at them. In the latest round, it did much
more than wink: some of the arms and parts were bought by
private Israeli businessmen and then forwarded to Iran, which
wound up paying the bill. The delivery of such items had been
blocked by the Carter Administration, however, after the
Khomeini-led revolution toppled the Shah and acquiesced in the
seizure of the U.S. embassy by Iranian militants in 1979. The
Reagan Administration, in line with its outspoken neutrality in
the gulf war, has a long-standing and strongly advocated policy
against arms sales to Iran.

Some details about how the transfers were arranged came last
week from a seemingly unlikely source: the Union of Seamen in
Denmark. It said that Danish ships, which have acquired a
reputation for being able to deliver quietly any questionable
cargo anywhere, had carried at least five loads of arms and
ammunition from Israel to Iran. Said Union Deputy Chairman
Henrik Berlau: "It appears that the shipments this year have
been carried out on the orders of the U.S. to win the release
of hostages in Lebanon."

The union related the story of an October voyage as told by a
sailor who asked not to be identified. He said that around Oct.
17 the coaster Morso picked up 26 containers full of ammunition
in the Israeli port of Eilat and delivered them to the Iranian
port of Bandar Abbas. "We all knew there was ammunition on
board," said the sailor, but Israeli authorities in Eilat took
care to let no one else know. "The Israeli harbor authorities,"
the sailor added, "told us to take off all markings that could
show we had been in Israel, including the markings on the food
we had taken aboard and on the weapons containers. We even had
to remove the JAFFA markings on the oranges." Further, said the
seaman, uniformed Israelis had already demanded that the name
Morso be removed from the ship before its arrival in EIlat and
replaced temporarily by Solar; the name was changed back to
Morso as the vessel approached the Persian Gulf, reaching Iran
around Oct. 21.

In the U.S., the arms-shipping operations and some of the
negotiations with Iran about hostages were arranged by a tiny
group of NSC staffers led by Oliver North and known as the
"cowboys." Says a Government source who was clued in on their
operations very late: "This thing was run out of the West Wing
[of the White House]. It was a vest-pocket, high-risk
business." Whether the motive for the arms-shipments policy was
to gain U.S. influence in Iran's power struggles or to win
freedom for hostages in Lebanon, officials could hope for
success. Last month Mehdi Hashemi, a hard-line Iranian
official, was arrested in Tehran and charged by the Iranian
government with treason, allegedly because he had masterminded
the kidnaping of a Syrian diplomat, who was then promptly set
free. Khomeini personally approved an investigation into
Hashemi's activities. Hashemi's pending downfall is good news
for the U.S. because he is among the most extreme of Khomeini's
followers in urging Islamic revolution outside Iran. He is
thought to have suggested to Lebanese extremists that they
kidnap and hold American hostages.

Meanwhile, the Lebanese groups holding the hostages released a
second clergyman, Father Lawrence Jenco, in July and David
Jacobsen last week. Their freedom was obtained without any
yielding on the captors' principal demand: release of 17
terrorists being held in Kuwait on charges of dynamiting the
U.S. and French embassies. In a statement announcing that they
were letting Jacobsen go, his captors, Islamic Jihad,
mysteriously urged the U.S. to "proceed with current approaches
that could lead, if continued, to a solution of the hostages
issue." Washington at the time vehemently denied that it had
made any "approaches," to Iran or anyone else.

Jacobsen's release was credited by some observers in the Middle
East to Syria, which occupies the portion of Lebanon where
Islamic Jihad and its companion group, Hizballah (the Party of
God), operate. It is now clear that Syria played next to no
role. In fact, it appears to have lost nearly all sway with the
extremists, who are now heavily influenced by Iran.

The patient and untiring negotiating efforts of Terry Waite,
the personal envoy of the Archbishop of Canterbury, also appear
in a different light. Waite's activities were important, but
no wholly in the way they appeared at the time. Since neither
the U.S. nor Iran could let it be known that they were in
contact, let alone that the U.S. was supplying Iran with arms,
some cover for Jacobsen's release had to be found. Waite and
his mission provided the necessary public appearance, and it is
doubtful that anyone else could have done so, since Waite, as
a nonpolitical man of religion, has the trust of all parties
involved, including the kidnapers. One Israeli official refers
to Waite as the "cellophane wrapping" around hostage releases.
Says he: "You cannot deliver a gift package unwrapped. That
is why there will be no more hostage releases until he returns
to the region."

It should have been obvious, though, that the U.S. dealings with
Iran would continue to bear fruit only so long as they were kept
secret--and that no maneuvers so momentous could be held under
cover very long. In retrospect it is astonishing that so few
people knew anything for a period as long as 14 months. But an
essential part of the planning of intelligence operations is,
or should be, what will be done and said when their covers are
blown. And nobody in either Washington or Tehran seems to have
given that much thought.

The cover began coming off first in Iran, when supporters of
Khomeini's chosen successor, Ayatullah Hussein Ali Montazeri,
started clandestinely distributing pamphlets accusing the regime
of surreptitious contacts with the U.S. Specifically, they
claimed that Rafsanjani had met with nameless American
emissaries in Iran. Last week several members of the group were
reportedly arrested in Iran, charged with distributing leaflets
that were "in line with the vicious attempts of the
counter-revolutionaries.


The first the world learned of the unraveling scheme was just
before Jacobsen's release, when Al Shiraa (The Sailboat Mast),
a weekly magazine published in Muslim West Beirut, ran a
sensational article reporting that the U.S. had been sending
spare parts and ammunition for jet fighters to Iran. The
magazine further said that McFarlane and four companions had
visited Tehran in early September, stayed at the Independence
(formerly Hilton) Hotel and met with a variety of officials from
the Iranian Foreign Ministry, parliament and army,who supposedly
asked for more military equipment. Shortly after the visit,
said Al Shiraa, the U.S. airlifted the arms to Iran in four C-
130 cargo panes flying out of a base in the Philippines. No
independent evidence of any such flight has come to light, but
the rest of the story contains elements of truth.

Where did the magazine get its information?  The publication is
known to have close ties to Syria. That country and Iran are
formerly allies, but their relationship has come under
increasing strain. One reason is their rivalry for influence
over Islamic Jihad and Hizballah, which Iran is clearly winning.
The assumption in the Middle East as well as in the U.S. is
that the Syrians somehow got wind of both the U.S.-arranged arms
shipments to Iran and McFarlane's mission. They may have leaked
the story in order to torpedo the potential relationship between
the U.s. and moderate elements in the Iranian government, with
a view to enhancing Syria's influence in the power struggle in
Tehran. Syria may have also been piqued over losing a role in
hostage  bargaining, which gave it a useful gambit in countering
adverse publicity about Syrian links to terrorism.

In any case, the secret was out. Rafsanjani was evidently
alarmed enough to take strong action to counter Al Shiraa's
story and perhaps to cover up his own dealings with the Great
Satan. In a speech to the Iranian parliament last Tuesday,
Rafsanjani confirmed McFarlane's visit but added some wildly
improbably embellishments. According to Rafsanjani McFarlane
and four unnamed American companions arrived in Tehran with
Irish passports and posing as the flight crew of a plane
carrying military equipment that Iran had purchased from
international arms dealers. They brought with them, said
Rafsanjani, gifts of a Bible autographed by President Reagan,
a cake shaped like a key intended to symbolize an opening to
better relations between the U.S. and Iran, and an unspecified
number of Colt pistols to be distributed to Iranian officials.
Rafsanjani insisted that he ordered the Americans kept under
virtual house arrest in their hotel rooms, refused to let them
see anyone and expelled them from iran after five days. They
were furious, Rafsanjani reported. He quoted McFarlane as
saying, "You are nuts. We have come to solve your problems, but
this is how you treat us. If I went to Russia to buy furs,
Gorbachev would come to see me three times a day."

American officials in the know insist that much of this story
is sheer invention intended to make the U.S. look ludicrous.
What really happened, they say, was this: McFarlane, North and
two bodyguards did visit Tehran, but their passports were
neither U.S. nor Irish. Also, they carried no Bible, cake or
guns. They stayed in Tehran four or five days and managed to
meet a number of Iranian officials, possibly including
Rafsanjani, although accounts differ on that subject. Stories
vary too on what, if anything, the mission accomplished. Some
say that McFarlane's contacts with the Iranians were amicable,
others that they were rudely aborted.

Fanciful though it was, Rafsanjani's tale ended any U.S. hope
of preserving secrecy. Together, he and Al Shiraa had
introduced all the main elements of the story: the secret
meetings between U.S. and Iranian officials, the arms transfers
and the negotiations about the hostages in Lebanon. Al SHiraa
didn't mention the hostages, but Rafsanjani did. He said that
if the U.S. and France met certain conditions, among them the
return f frozen Iranian assets and freedom for so-called
political prisoners held "in Israel and other parts of the
world," then "as a humanitarian gesture we will let our friends
in Lebanon know our views" about he release of American and
French hostages.

But freedom for Journalist Terry Anderson and Thomas Sutherland,
the acting dean of agriculture at Beirut's American University,
now looks far away. The White House had once hoped that both
would be released, along with jacobsen, on the eve of last
week's congressional elections, giving the Republicans a big
plus. As it turned out, Jacobsen was let go a day early and
Anderson and Sutherland not at all. Says a senior
Administration official: "This ended the possibility, at least
for now, of two more releases. That possibility has dried up."

Terry Waite voices more or less the same view. The Anglican
envoy returned to Britain last week grumbling angrily that
international power games were complicating his efforts to win
freedom for Anderson and Sutherland. Waite said he intends to
disappear into the English countryside for a while and wait for
some indication that a return to Beirut would be productive.
He may have to wait quite a while. And it does not seem likely
that the U.S. can soon resume contacts with Iranian officials
of any rank concerning geopolitical questions. Iranian Prime
Minister Mir Hussein Mousavi sneered last week that renewed
contacts between the U.S. and Iran would be like "relations
between the wolf and the lamb." Later Rafsanjani said the U.S.
was "using every channel to beg Iran to accept establishing a
dialogue with it."

The revelations of the secret talks with Iran put Secretary of
State George Shultz in a particularly uncomfortable spot. What
he knew about them is uncertain. He was surely aware of the
meetings between National Security Council officials and Iranian
representatives. As a member of the NSC, he was privy to a
presidential memorandum in February summarizing the meetings to
that date and directing that they continue. According to some
reports, he heard about the arms shipments and protested vainly
against them to the President. Some of Shultz's subordinates,
however, think the Secretary did not learn about the arms
transactions until the rest of the world did.

On one point everyone who knows Shultz is in agreement:
whatever and whenever he discovered about the arms transfers,
the information dismayed him--for good reason. Shultz has been
the most vehement promoter of the Administration's official
no-deals-with-terrorists policy. He has been in charge of
Operation Staunch, an Administration effort to persuade both
friends and adversaries not to sell arms to Iran. He has pushed
that effort with deep personal conviction, going so far as to
urge Soviet Foreign Minister Eduard Shevardnadze during their
frequent meetings to try to reduce arms sales to Iran by
countries allied to Moscow. He had little effect, however.
North Korea, a Soviet ally, has been among Iran's biggest
sources of weapons. In addition, whether Shultz tried and
failed to stop the U.S.-sanctioned shipment of arms to Iran or
was kept in the dark about it, his stature as the chief
architect of American foreign policy under President Reagan has
been undermined.

Ever the loyal Administration soldier, Shultz last week
permitted himself no public criticism of the dealings with Iran,
but made little attempt to defend them either. He said that in
his view the "policy of not negotiating for hostages is the
right policy," carefully expressing no opinion on whether it is
any longer the policy actually in effect. Like everyone else
in his department, the Secretary referred all questions about
Iran to the White House, but unlike others, he openly expressed
dissatisfaction with the White House order that he do so. Said
Shultz bluntly: "I don't particularly enjoy it. I like to say
what I think about something."

Whatever he thinks, it will be largely up to Shultz to explain
and defend the dealings with Iran to American allies. He had
to start last week in, oddly enough, Paris, where he had gone
after a meeting with Shevardnadze in Vienna. Shultz was in
France to discuss arms- control problems and other policy
matters with French leaders, including Premier Jacques Chirac.
The U.S. has been critical of France for not joining a British
attempt to boycott Syria diplomatically as a terrorist nation
and for its haste in negotiating a deal to return to Tehran
Iranian funds that had been frozen in France. The night before
their Friday meeting, Chirac, who was visiting Spain, made clear
French resentment of what it regards as hypocritical American
nagging. Said Chirac, with heavy sarcasm: "France has not
negotiated and will not negotiate with terrorist groups and
takers of hostages. I don't know what others do, including
those who want to teach lessons to everybody else."

His comments were a touch disingenuous, since France has in fact
been negotiating with Syria about French hostages held in
Lebanon, but it was sample of what the Administration can expect
to hear in growing volume from its allies. British Prime
Minister Margaret Thatcher frostily instructed her subordinates
to refrain from inquiring about what the U.S. was up to in its
dealings with Iran. She does not want to know. As if that did
not indicate enough displeasure, a top British official called
foreign reporters to a briefing at which he repeated that
British policy is not to negotiate with terrorists.

Arab nations fearful of Iran mostly maintained a puzzled silence
last week while scrambling behind the scenes to find out just
what the U.S. was doing. But while Shultz was traveling last
week, Iraqi Ambassador Nizar Hamdoon dropped in a the Washington
office of Assistant Secretary of State Richard Murphy to pose
outraged questions about the arms sales. Murphy, who is the
prime manager of U.S. Middle East policy but who seems to have
known nothing about the dealings with Iran, was apparently
stumped for any answers. The Administration, however, had
better come up with some answers quickly. It can expect
anguished inquiries from Arab nations friendlier--and less
self-interested--than Iraq as to whether the U.S. is now tilting
to the Iranian side in the gulf war.

Officially, Washington's policy is to proclaim strict neutrality
in the bloody conflict and urge both sides to negotiate a
settlement that would in effect be a stalemate. That would
leave borders about where they are now. U.S. officials claim
that one of their goals insetting up the secret meetings with
Iran was to gain some influence that might enable the U.S. to
persuade a post-Khomeini government to settle for something
short of the Ayatullah's often proclaimed aims: total defeat of
Iraq and the toppling of its President, Saddam Hussein. During
the meetings U.S. officials urged Iranians not to launch
Tehran's long-touted "final offensive" to crush Iraq. Whether
for that reason or because Iran lacks sufficient military
strength, the all-out Iranian offensive is rapidly on its way
to becoming a non-event.

But how can conniving at arms transfers that would presumably
strengthen Iran in its war against Iraq promote the stalemate
that the Administration desires?  It would seem more likely to
do the exact opposite: help Iran to win. In fact, the
Administration claims that Iraq has such an overwhelming
firepower superiority that the new weapons will not alter the
strategic balance. The White House also maintains that the arms
shipments could influence political infighting that may go on
inside Iran.

The Secretary of Defense, Caspar Weinberger, voiced no opinion
about U.S. dealings with Iran; like everybody else, he referred
all questions to the White House, and it is uncertain how much
he knew about the maneuverings. But Weinberger last week made
a point of observing that an Iranian victory in the gulf war
would be against U.S. interests. If anything, he was
understating the case: an Iranian triumph would be a disaster
for the U.S. It would drastically upset the Middle Eastern
balance of power and give a victorious Iran new opportunities
to threaten or subvert moderate Arab nations that are friendly
to the U.S., such as Kuwait and above all Saudi Arabia.

Domestically, the Administration is already hearing some
scorching criticism. Former Secretary of Defense James
Schlesinger charged that the Administration appeared to have
paid "ransom" for release of the U.S. hostages. He added
bitterly that the Carter Administration, which he served as
Secretary of Energy, "did its groveling in public. This
Administration prefers to do its groveling in private."

Vermont Democrat Patrick Leahy, the vice chairman of the Senate
Select Committee on Intelligence, was only slightly less
caustic. Said he: "I can see why the Administration won't tell
Congress about it. If they had, they would certainly have heard
from both Republicans and Democrats, 'Don't do anything so
stupid.'"

Eventually, the Administration will have to tell Congress a good
deal about the Iranian operation. It made a start last week by
holding a briefing for selected Senators on the intelligence
committee and convinced at least some that it had not been
engaged in a crude arms-for-hostages swap. Already, though,
House members are clamoring for information too. Democrats
Dante Fascell of Florida, chairman of the Foreign Affairs
Committee, and Lee Hamilton of Indiana, chairman of the
Permanent Select Committee on Intelligence, on Wednesday
addressed a letter to Reagan asking "your immediate cooperation
in fully briefing the Congress." Briefings aside, there is talk
on Capitol Hill of holding full-scale hearings on Iranian policy
when the newly elected 100th Congress convenes in January.,

One question sure to come up at any hearings or briefings is
whether the Administration violated a number of laws that
restrict transfers of U.S. arms abroad. The Arms Export Control
Act of 1976 requires the Administration to notify
Congress--which of course it did not do in the case of Iran--of
any exports of "substantive items" of military equipment.
Substantive items were given the catchall definition of those
"that might enhance the military potential of the receiving
country." The Export Administration Act of 1979 flatly
prohibited export of military equipment to any country deemed
to be fomenting terrorism, and the Reagan Administration
formally added Iran to the list of terrorist countries in 1984.
It also agreed to the Omnibus Diplomatic Security and
Anti-Terrorism Act passed this year, which added still more
restrictions on arms transfers to terrorist countries.

Possibly the Administration can come up with some explanation
of why its dealings with Iran technically did not violate these
and other laws. But the intent of all these laws clearly is to
ban any shipments of U.S. arms to Iran directly or indirectly.
Moreover, the Administration's own Justice Department has been
interpreting the laws that way and zealously prosecuting private
citizens suspected of arms dealings with Iran. For example, in
April the department secured indictments against 17 people,
including a retired Israeli general, on charges of arranging the
sale of U.S. military equipment to Iran--precisely when the
White House itself was at least winking at arms sales.

Certainly for an Administration to violate even the spirit of
U.S. laws, including laws that it rigorously enforces on others,
it a serious matter. But it is far from the only bad
consequence of the misadventure in Iran. U.S. officials were
obviously justified in meeting secretly with Iranians willing
to re-establish contact. Given Iran's geopolitical importance,
it would have been irresponsible of the Americans not to do so.
In diplomacy, especially in the Middle East, a country
sometimes has to talk one way and act another. But to connive
at arms sales to Iran, for whatever reason, seems clearly to
have been a blunder that undermined U.S. credibility. It is
hard to understand how the U.S. could have gained anything by
strengthening Iran militarily. To permit arms sales that even
appeared to be a payoff for the release of hostages was even
worse, since seeming to reward terrorists is dangerous indeed.
And by failing to foresee that it maneuvers could not be kept
secret, and then being so plainly stuck for any effective way
to explain those maneuvers publicly, the Administration has
called into question its competence as well as its credibility.

--By George J. Church. Reported by Ron Ben-Yishai/Jerusalem,
Raji Samghabadi/New York and   Barrett Seaman/Washington


---------------------------------------------------------------
Washington's Cowboys

As news of secret U.S. dealings with Iran began to appear last
week, attention inexorably turned to a cluster of suites in the
Old Executive Office Building next door to the White House.
They house a select band of globe-trotting staffers of the
national Security Council, the executive agency that coordinates
U.S. defense and foreign-affairs activities. Known for its
bravado and love od derring-do, the small group conceived and
ran the secret talks with Iran. While the group is part of a
crisis-management team within the 46-person NSC staff, its
free-wheeling style has led Washington insiders to call its
members the "cowboys."

The most prominent is Lieut. Colonel Oliver North, 43, a Marine
who earned the Silver Star and two Purple Hearts--among other
medals--in the Viet Nam War. He is deputy director for
political-military affairs on the NSC. A close friend and
military comrade of former National Security Adviser Robert
McFarlane, North arouses strong emotions in people. "Nobody can
be indifferent to Ollie," says the wife of a top foreign
diplomat. "Either you love him, or you hate him with a passion.

Since he joined the NSC in 1981, North has handled many highly
sensitive missions. After the 1983 Beirut bombing that killed
241 U.S. Marines, North led the hunt for those responsible. The
chief suspect, however, managed to escape. When terrorists
seized the Achille Lauro cruise ship off the coast of Egypt last
year, North arranged the midair interception of an Egypt-Air jet
carrying Abul Abbas, the mastermind of the hijacking, to safety
in Tunisia. North helped plan the 1983 U.S. invasion of Grenada
and last April's Libyan air raid. It was not surprising that
North turned up in Cyprus last week just when Released Hostage
David Jacobsen arrived there. "Oliver North is the prototype of
the modern American hero," says a friend and colleague.
"Wherever and whenever Americans re in trouble, sooner or later
you will see him at the scene."

Yet North's global troubleshooting has something landed him in
trouble. As head of NSC operations in Central America, he
organized a private supply network that provided aid to the
contra rebels seeking to oust the Marxist Sandinista government
in Nicaragua. Senate and House committee investigated North's
role last year, but found no proof that he had violated a U.S.
law regulating aid to the contras. The colonel's name briefly
surfaced again last month when Gunrunner Eugene Hasenfus was
captured in Nicaragua after his plane was shot down while he was
flying weapons to the contras. A card found in the wreckage
belonged to a businessman thought to have links to North.

A confirmed workaholic, North regularly puts in 16-to-18-hour
days while in Washington. He dislikes paperwork, and once
groused to a friend, "Every time a terrorist fires a bullet, we
have to fill out a pile of papers." Colleagues quip that
North's real power comes from two office computers hooked into
the major U.S. intelligence-gathering agencies, and from a
secure telephone line that he uses for classified conversations.
For his own protection, the slender officer is rarely
photographed or quoted in news accounts. "He is there to serve
the President, and that is it," a colleague says.

Like North, the rest of the cowboys tend to be hard-line
conservatives who crave adventure and seem to generate
controversy. Howard Teicher, 35, a respected expert on the
Middle East, recently emerged as a source of a Washington
disinformation campaign designed to suggest, among other things,
that the U.S. was planning military moves against Libya. The
Administration caused a furor last month when it admitted that
the reports were false.

Teicher, who speaks fluent Hebrew, caused another flap five
years ago when he tried to publish a fictionalized account of
Israel's nuclear secrets. The manuscript was confiscated by the
Israeli military censor, and Teicher did not seek to publish it
elsewhere.

Another zealous cowboy is Vince Cannistraro, 41, a twelve-year
veteran of the CIA. He took over Central America operations
from North last spring after first being responsible for
operations in Africa. He has directed the channeling of weapons
and aid to Jonas Savimbi's UNITA rebels fighting the Marxist
regime in Angola. Insiders say Cannistraro managed to supply
Savimbi with more arms that the White House originally intended.
A quiet official who joined the NSC in 1983, Cannistraro has
helped funnel supplies to the mujahedin guerrillas at war with
the Soviet-backed government of Afghanistan.

Other members of the crisis-management team are more shadowy
figures. Robert Earle, 42, a Marine lieutenant colonel and
Rhodes scholar, joined the staff from the CIA last year and now
serves as North's deputy. He meets regularly with foreign
counterterrorist experts and coordinates operations with them.
Craig Coy, 36, a Coast Guard commander, joined the NSC after
serving on a White House terror task force. Lieut. Colonel Jim
Stark, 38, worked with North in planning last spring's Libyan
air raid. He is considered to be more disciplined than his
sometimes freebooting colleagues, while sharing their
tough-minded attitudes.

The crisis-management cowboys, of course, have attracted
critics, and their methods are often questioned. One
congressional staffer calls North a "ruthless operator." But
if the cowboys sometimes appear to ride roughshod, NSC officials
say, they are only carrying out Administration policies.

--By John Greenwald. Reported by David Beckwith and David
Halevy/Washington.