The Best of the Bureau/The_Best_of_the_Bureau_Bureau_Development_Inc._1992.iso/dp/0108/01081.txt

Text File | 1992-08-07 | 26KB | 436 lines

$Unique_ID{bob01081}
$Pretitle{}
$Title{Iran-Contra Affair: The Report
Chapter 23A  Other Privately Funded Covert Operations}
$Subtitle{}
$Author{Various}
$Affiliation{}
$Subject{north
agent
dea
hostages
agents
money
source
cia
funds
told}
$Date{1987}
$Log{}
Title:       Iran-Contra Affair: The Report
Author:      Various
Date:        1987

Chapter 23A  Other Privately Funded Covert Operations

     Under the plan that Lt. Col. Oliver L. North attributed to Director of
Central Intelligence William Casey, profits from the Iran arms sales were to
fund not just the Contras, but otter covert operations of the Enterprise as
well.  Before the Iran arms sales became public, Lt. Col. Oliver L. North had
begun implementing certain projects he and Casey believed the Enterprise could
perform.

     "We always assumed," North said later "that there would come a time
again, as indeed it did, where the Congress would make available the moneys
necessary to support the Nicaraguan freedom fighters."  When that happened,
the Enterprise, functioning free of government scrutiny and with ample funds,
could carry out other covert projects; many were intended "to be conducted
jointly [with] . . . other friendly intelligence services" while others would
be limited to activities conducted by North, Secord and Hakim.

     Even before the Enterprise was formed, however, North was operating with
non-appropriated funds on another project that the Government could not do
because it was contrary to United States policy - the ransom of the hostages.

The DEA Ransom Operation

     Before the Iran initiative as conceived, the NSC staff was working on a
plan to ransom the hostages.  Confronted with the policy of the U.S.
Government of not paying for the hostages' release, North found a loophole by
using private funds.

     Edward V. Hickey, Jr., an Assistant to the President, attended a meeting
of the Terrorist Incident Working Group (TIWG) in January 1985.  Hickey noted
that the area in Lebanon, where the hostages were held, was a known area of
narcotics trafficking.  Hickey had a personal interest in the hostages.  He
had known William Buckley, the CIA Chief of Station in Beirut who had been
kidnapped on March 16, 1984.

     Hickey asked his long-time friend, a DEA Special Agent (Agent 1), if DEA
could help to locate Buckley and the other hostages. Agent 1 reported that
another DEA Special Agent (Agent 2) had contacts in the Middle East who might
be able to help.  Shortly thereafter, Agents 1 and 2 met with Hickey and
Hickey's military aid General Matthew Caulfield.  Agent 2 told Hickey that he
had an excellent source with impressive contacts in Lebanon.

     Following this meeting, Hickey met with Deputy National Security Adviser
John Poindexter and encouraged him to include the DEA in the Hostage Locating
Task Force (HLTF).  On February 13, 1985, National Security Adviser McFarlane
notified the Departments of State, Defense, and Justice and the CIA that the
Task Force would report to the TIWG and it would include the DEA.  The DEA was
to be represented on the Task Force by Abraham Azzam, an Arabic speaking agent
of Lebanese heritage.  Funding for the Task Force would come from the CIA.

     With the approval of DEA Administrator Mullen, the DEA provided Agents 1
and 2 with $20,000 for travel, expenses and for payments to their sources for
information on the hostages.  If the DEA's sources were productive, they were
to be turned over to the CIA for further operational handling.  Agents 1 and 2
were instructed to report to Azzam, who in turn was to report to DEA Deputy
John Lawn.

     Agents 1 and 2 were not to be involved operationally in securing the
release of the hostages; their function was to assist in obtaining
intelligence information regarding the location of the hostages.  According to
Lawn, he gave these instructions because Federal law provides that DEA's
responsibility is for operations that concern drug-related law enforcement.

     In February 1985, Azzam, Agent 1, and Agent 2 met with Agent 25 source in
Geneva and in New York.  The source claimed that he had contacts who could
arrange to pay off individuals in Lebanon who had enough influence over the
captors to arrange for the release or escape of the hostages.  He added that
$50,000 was needed to begin operations, and that the hostages could be
released if the United States sold weapons, tanks, airplanes, and other
military equipment to those controlling the holders of the hostages.  Oliver
North, the NSC staff member responsible for terrorism issues, later told the
agents the United States could not sell weapons.

     Under the Task Force authorization, the CIA was to pay for hostage
information.  But the CIA was reluctant to do so without proof that Agent 2's
source was legitimate and would produce valuable information.  Agent 1, Agent
2, Hickey, and Caulfield then met with Poindexter to explain their need for
funds.  Poindexter told them he would look into the matter.

     In early March 1985, Hickey arranged a meeting among North, Agent 1,
Agent 2, Azzam, and Caulfield.  At the meeting, the agents explained their
efforts to North and informed him that the CIA was reluctant to provide the
money.  In a follow-up phone call to North on March 12, 1985, Caulfield said
the DEA's efforts were "not very sophisticated."  He explained that the plan
now called for four hostages to be released in exchange for $1 million per
hostage, once the $50,000 was paid to the source.  North's notes of the
conversation reflected his own reaction:  "fundamental decision:  Do we pay
ransom?"  North answered his own question with his actions:  he became the
operational leader of the project.

     Soon thereafter, the DEA agents arranged for two CIA officers to meet
Agent 2's source in New York.  The two officers were sufficiently convinced of
the value of the source to authorize the $50,000 expenditure from the CIA.
Agent 1 received the money on March 18 from a CIA officer and signed a form
acknowledging that he was responsible to account for it.  Agent 1 paid the
money to the source in two installments: $20,000 on March 19, and $30,000 on
April 20, after the source had returned from a trip to Lebanon.

     On May 2, 1985, upon the source's return from another trip to Lebanon, he
told the agents that he now needed to give $200,000 to his contact, who would
locate Buckley and obtain proof that he was still alive.  After that payment,
the source said, it would take an additional $1 million per hostage to secure
their release.

     Azzam became concerned when he learned that the source's contact was
known to the DEA as a narcotics trafficker and a thief.

     Azzam voiced his concerns to CIA officials who agreed that the $200,000
should not be paid until the source produced proof that his contacts had
access to Buckley.  The proof was to consist of photographs of the hostage
with current newspapers, or similar items, showing the date of the proof.

     North told Azzam he could get the ransom money of $1 million per hostage.
When Azzam asked North where he would get it, North asked him not to inquire.
Azzam surmised correctly that North was planning to get the money from H. Ross
Perot, a Texas industrialist.  Azzam told this to the CIA officers.  The next
day, North called Azzam to express his anger that Azzam had told the CIA.
Azzam could not understand North's anger.  He believed that the CIA was to be
a full partner given that DEA could not legally have any operational
capabilities.  Reportedly, Perot was upset that his role had been compromised
and complained to Poindexter and McFarlane.

     In early May 1985, the source went to Lebanon to obtain the required
proof while Agents 1 and 2 waited in Cyprus.  The source produced a document
that allegedly was proof of access to Buckley.  Azzam directed Agent 1 to
bring the document to him for verification by expert analysts from the CIA and
FBI laboratories.  Despite these instructions, Agent 1 presented the "proof"