$Unique_ID{bob01011} $Pretitle{} $Title{Iran-Contra Affair: The Report Chapter 2B Administration Response to Congress: May-Sept 1983} $Subtitle{} $Author{Various} $Affiliation{} $Subject{administration north finding aid covert cia new congress president contras} $Date{1987} $Log{} Title: Iran-Contra Affair: The Report Author: Various Date: 1987 Chapter 2B Administration Response to Congress: May-Sept 1983 In May 1983, both the House and Senate Select Committees on Intelligence challenged the Administration's Nicaragua policy, but in different ways. The Senate Intelligence Committee "took the rather unusual step of requiring" that "the Administration articulate, in a clear and coherent fashion its policy objectives." Before the Committee would vote for more aid, it wanted a new Presidential Finding. The House Permanent Select Committee on Intelligence, on the other hand, favorably reported a new bill, the "Boland-Zablocki" bill, to the full House for consideration. The bill barred aid for the Nicaragua covert action program, but it also took the Administration at its word about the need to stop arms flows to El Salvador. The legislation provided $80 million in assistance to Central American governments to stop the flow of arms to rebel groups, but no funds for "support of military or paramilitary activities in Nicaragua." Despite strong Administration opposition, the House passed the bill on July 28, 1983, by a vote of 228-195. With its implicit threat of an aid cutoff, the Boland-Zablocki measure challenged the Administration to articulate a plausible rationale for covert aid. The bill exposed the loose fit between the Administration's announced policy of stopping arms flows to El Salvador and its covert support of the Contras. If the Administration really wanted to stop arms flows to El Salvador, it could do so directly, said the Congress; but if its purpose was to aid the Contras in overthrowing the Nicaraguan Government, there would be no funding. The Administration responded to the threat of an aid cutoff in three different ways. First, the Administration established a public relations office in the State Department attempting to muster the public and Congressional support necessary for the Contras. Second, anticipating that a cutoff might nevertheless occur, the Administration developed a secret plan to stockpile weapons for the Contras at the CIA. Finally, at the same time, to satisfy Congressional demands, the Administration agreed to draft a new Finding. White Propaganda In June of 1983, the Administration decided upon a new method of trying to win public support for the President's policy in Central America. On July 1, 1983, then National Security Adviser Clark announced that "the President had decided that the Administration must increase our efforts in the public diplomacy field to deepen the understanding of the support for our policies in Central America." As a result, an office of Public Diplomacy for Latin American and the Caribbean (S/LPD) was established in the State Department, headed by Otto Reich, who eventually was given the rank of Ambassador. The S/LPD was an interagency office with personnel contributed by the Department of State, the Department of Defense (DOD), the Agency for International Development, and the U.S. Information Agency. Although created as part of the State Department, the office was established at the direction of the National Security Council. The S/LPD's activities were coordinated by an interagency working group staffed by the NSC. The principal NSC staff officer was a former senior CIA official. With the knowledge and approval of Director Casey, he was detailed to the NSC staff for a year. He later became Special Assistant to the President with responsibility for public diplomacy matters. The mission of the office - public diplomacy - was a "new, non-traditional activity for the United States government," according to the State Department. In fact, "public diplomacy" turned out to mean public relations - lobbying, all at taxpayers' expense. The office arranged speaking engagements, published pamphlets, and sent materials to editorial writers. In its campaign to persuade the public and Congress to support appropriations for the Contras, the office used Government employees and outside contractors - including Richard Miller and Francis Gomez who would later work with North to provide Contra assistance. A Deputy Director of S/LPD, Jonathan Miller, reported the office's success in what he labeled a "White Propaganda Operation," which sought to place op-ed pieces in major papers by secret consultants to the office. By Reich's own description, the office adopted "a very aggressive posture vis-a-vis a sometimes hostile press." It "briefed Members of Congress, reached out to audiences previously overlooked, found new ways of reaching traditional audiences, and generally did not give the critics of the policy any quarter in the debate." It claimed that "[a]ttacking the President was no longer cost free." Later, the Comptroller General would find that some of the office's efforts, in particular Jonathan Miller's "White Propaganda," were "prohibited, covert propaganda activities," "beyond the range of acceptable agency public information activities . . . ." In a September 30, 1987, letter, the Comptroller General concluded that S/LPD had violated "a restriction on the State Department's annual appropriations prohibiting the use of federal funds for publicity or propaganda purposes not authorized by Congress." The CIA Tries to Stockpile In the summer of 1983, while efforts were underway at the State Department to change public opinion, the CIA began secret preparations in the event Congress decided to cut off aid to the Contras. In that event, the Agency planned to obtain equipment free of charge from the DOD. On July 12, the President directed that the DOD provide enhanced support for the CIA in its efforts to assist the Contras. One day later, the CIA sent a "wish list" to the DOD, requesting that $28 million in equipment be transferred to it, "free-of-charge." The list covered everything from medical supplies to aircraft, and included a request for personnel. The Joint Chiefs of Staff proposed that each of the four services carry a quarter of the cost of these transfers. The equipment then could be stockpiled by the CIA and provided to the Contras if the need arose. The CIA would not run afoul of any aid ceiling since it had not paid for the equipment. The equipment involved had been paid for out of the normal DOD budget allocation. In short, money appropriated by Congress for one purpose would be used for another, bypassing any limits Congress might place on CIA appropriations, such as the then-pending Boland-Zablocki bill. By late summer, the DOD's General Counsel concluded that a nonreimbursable transfer would violate the Economy Act, a law requiring that the DOD be reimbursed for the cost of interagency transfers. The CIA would have to pay for all items except surplus equipment. From the CIA's perspective, this defeated the purpose of the plan: to avoid the expenditure of CIA funds and shift the cost to the DOD. The project was finally terminated on February 12, 1985, after the CIA had obtained, without cost, 3 surplus Cessna aircraft and, at cost, 10 night vision goggles, 1 night vision sight, and a Bushmaster cannon. The September 1983 Finding: A New Rationale for Covert Aid Trying to forestall a complete cutoff of Congressional aid, the Administration accepted the Senate Intelligence Committee's proposal that it draft a new Finding defining and delimiting the purposes of the covert program. By August, Director Casey had presented the Committee with a first draft and later, in September, proceeded to "informally discuss the finding with Senator Goldwater and other key Senators of the SSCI." Within the Administration, the Finding was, as North put it, "thoroughly scrubbed" by the State Department and NSC staff as well by as the Justice Department and lawyers from DOD and CIA. On September 16, 1983, at a National Security Planning Group (NSPG) meeting, Director Casey briefed the President and his advisers from the State and Defense Departments on the draft Finding. The Director explained that the earlier Finding had been "modified to reflect [a] change of objectives . . . ." No longer was the covert program justified solely by the need to curb Cuban support for the Sandinistas or to stop arms flows out of Nicaragua. A new, and broader, rationale was added: covert aid was intended to pressure the Sandinistas to negotiate a treaty with nearby countries. The new Finding also reflected a change of tactics. Congress would not accept a Finding broad enough to permit paramilitary operations conducted by U.S. citizens. The Administration gave its assurances that aid for paramilitary operations would be limited to third-country nationals. Casey told the President that the "new Finding no longer lets us engage in PM [paramilitary operations]." Three days later, on September 19, 1983, the Finding was signed. The next day, the Intelligence Committees received briefings on it. Shortly thereafter, the Senate Intelligence Committee voted to provide aid for a continued covert operation in Nicaragua. The new Finding, however, was not without problems. The Administration's stated objective in supporting the Contras was now to pressure the Sandinistas into accepting a treaty that had to include free elections. If, as the President believed, the Sandinistas could not win such an election, they would never agree to such a treaty. Only the prospect of a military defeat would push them toward a negotiating posture. Yet, the renunciation of a military victory was the price set by 'Congress for a bipartisan compromise. The Finding thus contained within it a paradox that would haunt the Administration's Nicaragua policy. Forcing the Issue: The Dec. Funding Cap and Intensifying Covert Operations One day after the September Finding was briefed to the Intelligence Committees, an unnamed Administration official was quoted in The New York Times explaining the rationale of the new Finding: "Yes, we are supporting the rebels until the Nicaraguans stop their subversion," an "approach," the official urged, that "should end the argument over whether the Administration was violating its pledge by doing more than just stopping the arms flow." But Administration hopes that the September Finding, and its new rationale for covert action, would end the debate on Contra aid were quickly dashed. Discussions were held on the House floor over the advisability of continuing covert aid, and the President took his cause to the public in his radio addresses. In October, the House voted to halt all aid to paramilitary groups fighting the Nicaraguan Government. The Senate, however, wanted to continue aid. In early December, the House and Senate agreed to a compromise: A "cap" of $24 million would be placed on Contra funding, and the CIA would be barred from using its contingency reserves to make up any shortfall. Congress and the Administration recognized that the $24 million appropriation would be insufficient to sustain a covert operation through the fiscal year. Therefore, the door was left open for a future Administration funding request to carry the program for the balance of the year if negotiations for a peace treaty were thwarted by the Sandinistas. The President was required to report to Congress by March 15 on the steps taken to achieve a negotiated settlement in Central America. The Decision to Bring the Situation to a Head Having survived the threat of a total cutoff of funds for the Contras, the Administration decided to intensify the CIA's covert activities while funding still remained. Charged by the new National Security Adviser, Robert McFarlane, to prepare an "in-depth review" of the Administration's Central America policy, a Special Interagency Working Group (SIG) concluded: "Given the distinct possibility that we may be unable to obtain additional funding in FY 84 or FY 85, our objective should be to bring the Nicaragua situation to a head in 1984." At a January 6 NSPG meeting, the President and his advisers concurred in the SIG recommendation: "Our covert action program should proceed with stepped up intensity." Even before the decision had been officially acknowledged, plans had been implemented to step-up paramilitary operations in Central America. In the fall, speedboats carried out attacks against Sandinista patrol craft and fuel tanks. By November, a more heavily armed speedboat had been developed for following operations. At the end of December, and thereafter, the mining and other operations increased. In early January, the CIA proposed attacks against fuel supply depots and transmission lines along the "entire Pacific coast of Nicaragua." On January 7, three magnetic mines were placed in Sandino harbor; on February 3, an air attack destroyed a Sandinista "communications and naval arms depot"; and on February 29, more mines were placed at Corinto. By March 29, plans had been made to support an attack by Eden Pastora on San Juan del Norte; it was hoped that the attack would result in the installation of a provisional government. The Role of Lt. Col. Oliver North At the NSC, Lt. Col. Oliver North became the liaison with the CIA in its intensified covert effort. A graduate of the U.S. Naval Academy, he had distinguished himself on the battlefield in Vietnam, winning a Silver Star, a Bronze Star, and two Purple Hearts. He was assigned to the NSC in October 1981, where he quickly established a reputation with his superiors as a staffer who could get a job done. North was energetic, articulate, action-oriented, and had a reputation for bypassing red tape. His superiors could depend on him not only to carry out orders, but to keep them informed. North was a prodigious writer, often staying in his office until late at night to complete lengthy papers or other work. As described by a number of his colleagues, North's relationship to McFarlane was very close. With McFarlane's rise to the position of National Security Adviser, North came to play an increasingly large role not only in the operational aspects of Contra policy, but also in forging that policy. North already had contacts in Central America who were pleased with his success. On November 7, 1983, John Hull, Indiana native, ranch owner in Costa Rica, and Contra supporter, wrote that "B.G.," or "blood and guts," as North was known, was to have a new boss, Robert McFarlane. Hull hoped this would make North "more powerful as we need more like him." North became a strong advocate within the NSC staff of intensified covert support for the Contras. He was the point of contact, transferring information from the CIA to the National Security Adviser for the President's approval. For every significant, and sometimes insignificant, operation, he provided a memorandum to the National Security Adviser destined for the President. His reports were detailed and enthusiastic, his recommendations supportive of further operations. In his new assignment, North looked to Casey for guidance. In his words, Director Casey was a "teacher or philosophical mentor" of sorts, to whom he looked for help and advice on a regular basis. "Bill Casey was for me a man of immense proportions," North testified, "a man whose advice I valued greatly and a man whose concern for this country and the future of this land were, I thought, on the right track." "History," North stated "will bear that out." Tension Between the 1983 Finding and Intensified Operations In a series of memorandums written between October 1983 and March 1984, North recorded the CIA's increasing covert presence in the region. Relatively minor operational details were given to the President, as on November 4, when North advised McFarlane to suggest an increase in the number of weapons supplied to the Contras by 3,000. The President approved the recommendation. North not only sought approval for, but also reported the results of, various actions proposed to him by Agency personnel. On February 3, he reported a successful attack on a Sandinista communications and naval arms depot. Admiral Poindexter penned, "Well done," and checked North's recommendation that the President would be briefed. North frequently stated in his memorandums that the actions recommended were within the September 1983 Finding. Yet, progress toward negotiations and success in arms interdiction were not the focus of his attention; instead, the destruction of Sandinista fuel supply lines or the mining of harbors was the subjects of these memorandums. North kept his superiors advised of Contra actions that would weaken the Sandinista regime, explaining that the purpose of the mining and attacks was to enhance the Contras' military strength, while "reduc[ing] the mobility of Sandinista military units." North could contend that such military activities were within the scope of the Finding because of the Finding's essential ambiguity: Paramilitary action, once authorized, may be used to promote a diplomatic end while at the same time furthering the cause of military victory. But by March of 1984, it had become clear that the diplomatic end the Finding described was not what North anticipated or encouraged. In memoranda to McFarlane, he proposed significant military actions against the Sandinistas, the details of which cannot be disclosed for national security reasons, but which give substance to the testimony of Clair George, CIA Deputy Director for Operations, that North's ideas were often extreme, "crazy," or "hairbrained." The memos reveal the same enthusiasm for covert paramilitary operations that North would later bring to his work as the "switching point" for Contra support during the next 2 years. The Money Begins to Run Out By February 1984, the $24 million earmarked by Congress for the Contras was being quickly depleted. On February 13, North wrote to McFarlane, emphasizing the importance of obtaining "relief from the $24 M ceiling," but recognizing that "[c]ongressional resistance on this issue is formidable": [P]rospects for success are bleak even with a concerted effort. At some point, we may have to reassess our prospects and decide whether prudence requires that we somehow stretch our FY84 effort to avoid running out of funds. In a memorandum drafted by North for the President, McFarlane concluded that "[u]nless an additional $14 M [million] is made available, the [Contra aid] program will have to be drastically curtailed by May or June of this year." The Harbor Mining Disclosures In early April, the country learned that the U.S. Government was involved in the mining of Nicaraguan harbors. U.S. Government presence in Nicaragua had become "embarrassingly overt." As McFarlane testified: "The disclosure that harbors had been mined in Nicaragua was received very badly . . . ." Some in Congress believed that the Administration had misrepresented the activities it conducted under the September 1983 Finding. Senator Barry Goldwater, Senate Intelligence Committee Chairman, charged that his Committee Members had been deceived at the very moment they were being asked to vote to support Contra aid. "[I]t is indefensible on the part of the Administration to ask us to back its foreign policy when we don't even know what is going on," he declared. After initial assertions by Director Casey and the National Security Adviser that full and detailed disclosure had been provided to Congress, the Administration decided to end the escalating battle and offered a truce. On April 26, Director Casey "apologize[d] profoundly," conceding inadequate disclosure. But the "apology" could not heal the "fracture" between Congress and the Administration that the mining had created. The Administration's policy to bring the situation "to a head" had backfired: the plan, rather than attracting support, lost it.