Multimedia Mania/abacus-multimedia-mania.iso/dp/0104/01045.txt

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$Unique_ID{bob01045}
$Pretitle{}
$Title{Iran-Contra Affair: The Report
Chapter 11C  McFarlane Meets Ghorbanifar in London}
$Subtitle{}
$Author{Various}
$Affiliation{}
$Subject{ghorbanifar
north
mcfarlane
iran
hostages
president
casey
cia
initiative
ledeen}
$Date{1987}
$Log{}
Title:       Iran-Contra Affair: The Report
Author:      Various
Date:        1987

Chapter 11C  McFarlane Meets Ghorbanifar in London

     On December 8, McFarlane joined Kimche, Secord, North, Nimrodi, and
Ghorbanifar in London.  McFarlane presented an agenda that focused on a
political opening with Iran and on areas of possible common interests between
the United States and Iran.  In contrast, Ghorbanifar wanted to talk only
about specified numbers of TOW missiles for each hostage.  Ghorbanifar
explained that the Iranians were very angry over receiving the wrong kind of
HAWK missiles.  McFarlane responded:  "[G]o pound sand, that is too bad."
McFarlane was "revolted" by the bargaining and found Ghorbanifar to be a
"borderline moron."

     North's view of the meeting was slightly different.  He thought McFarlane
was telling Ghorbanifar that there could be no more arms sales until after the
hostages were released, not that McFarlane was precluding arms sales.  Once
again, as the initiative began to come apart, North raised the specter of the
death of the hostages in retaliation for a U.S. decision to break off the
negotiations.  In a memorandum to McFarlane and Poindexter, he wrote:  "[A]ll
it would take for the hostages to be killed is for Tehran to 'stop saying no'
[to the captors]."

     McFarlane, North, and Secord flew back to Washington together on December
9.  On the way back, McFarlane said he was very unhappy with Ghorbanifar's
arms-for-hostages pitch.  He viewed Ghorbanifar as a businessman interested
only in profit and "one of the most despicable characters he had ever met."

     North was unhappy with McFarlane's negative reaction and that day wrote
an "eyes only" memorandum to McFarlane and Poindexter entitled "Next Steps."
In it, North reviewed options that he saw as necessary "[i]f we are to prevent
the death or more of the hostages in the near future."  After reviewing the
problems of Ghorbanifar's untrustworthiness, Schwimmer's arrangement of
previous deals that angered the Iranians and left Israel with inadequate funds
for replenishment, and the United States' "lack of operational control over
transactions with Ghorbanifar," North initially set out four options:  the
arms-for-hostage swap discussed in London, an Israeli delivery of 400 to 500
TOWs to Iran to restore "good faith," a military raid, and "do nothing."
North summarily rejected the "do nothing" approach:

Very dangerous since US has, in fact, pursued earlier Presidential decision to
play along with Ghorbanifar's plan.  U.S. reversal now in midstream could
ignite Iranian fire - hostages would be our minimum losses.

North testified that Casey shared his view that terminating the negotiations
would lead to the death of the hostages.

     At the end of the memo, North described a "fifth option": the United
States would directly sell arms to Iran, acting pursuant to a Presidential
Finding and using Secord as an operational "conduit." The Iran initiative was
restructured over the next few weeks to closely resemble this "fifth option."
Moreover, using the Enterprise as a conduit for the arms sales proceeds
facilitated the diversion of funds to the Contras that North had mentioned to
the Israelis only a few days earlier.  [On the same day that North prepared
this "Next Steps" memorandum, he also met with the General Counsel of the CIA,
Stanley Sporkin.  (North Calendar, 12/9/85, N336) Sporkin recalls that McMahon
was to attend this meeting as well and that the purpose was to discuss
McMahon's desire that the CIA's role in the Iran initiative be eliminated or
reduced.  Sporkin Test., Hearings, 100-6, at 127-128.]

McFarlane Briefs the President on the London Meeting

     On December 10, McFarlane briefed the President on the London meeting.
Also present were Casey, Poindexter, North, and Regan.  [Some of the
participants place Weinberger at this meeting, but he has no recollection of
it.]  McFarlane emphasized that Ghorbanifar lacked integrity and that the
initiative was unlikely to bear fruit if he remained the channel to the
Iranians.  At the same time, McFarlane or North said that abandoning the
initiative would risk the lives of the hostages.  The President seemed
influenced by this concern.

     No decision was reached about the future of the initiative, and again
there were differing perceptions about what would happen.  The President
continued to hope that its continuation might lead to freedom for the
hostages.  McFarlane recalled that the President asked,

[W]hy couldn't we continue to let Israel manage this program, and was
expressing and searching for, I think understandably, ways to keep alive the
hope for getting the hostages back, and it is quite true that the President
was profoundly concerned for the hostages.

Casey left the meeting with "the idea that the President had not entirely
given up on encouraging the Israelis to carry on with the Iranians."

I suspect he would be willing to run the risk and take the heat in the future
if this will lead to springing the hostages.  It appears that Bud [McFarlane]
has the action.

Poindexter testified that the President was disappointed that Ghorbanifar
appeared to be so unreliable, but was reluctant to abandon the project.  In
contrast, State Department officials were left with the impression that the
initiative was dead.  Under Secretary of State Michael Armacost reported to
Shultz, who was in Europe, that "Bud's recommendation, upon returning from his
latest discussions, was to drop the enterprise.  That has now been agreed."

     Late that evening, Clarridge's deputy, who was the acting Chief of the
CIA's European Division in Clarridge's absence, cabled CIA stations in
Countries 16 and 18 to inform them that there would be no more flights, at
least in the short run.  He wrote:

As late as last night the negotiating was still going on.  We have just
received word now that the deal is apparently all off.  Don't know why yet or
whether there is a possibility that it will revive in the future . . . .
[F]or now it looks like we are standing down.

Poindexter to North:  Keep Trying

     Following the briefing, Poindexter had the clear impression that the
President wanted to continue the program, and he moved to put it "on a sounder
footing."  Casey too was "a very strong advocate of proceeding."  Poindexter
told North to continue his efforts to keep the Iran initiative moving forward.
This involved at least three steps: first, preparing a fully staffed and more
comprehensive covert action Finding; second, substituting a new team - to be
lead by North and Israeli Amiram Nir - to replace Ledeen, Schwimmer, and
Nimrodi; and third, finding a legal way to sell arms to Iran.  On this last
point, Poindexter asked North to work with "the appropriate people at CIA and
in [Attorney General] Ed Meese's office, if not Ed Meese himself."

The CIA Evaluates Ghorbanifar

     Ledeen, with North's approval, aggressively urged the CIA to establish an
intelligence relationship with Ghorbanifar.  In early December, Ledeen met
with the CIA's Duane Clarridge and Charles Allen.  He told Allen the history
of the Iran initiative, including the HAWK missile debacle.  He then explained
why he believed Ghorbanifar had contacts that could help the CIA gain insights
into the Iranian regime and assist its counterterrorism efforts.  Ledeen said
Ghorbanifar was "a good fellow who is a lot of fun" and "praised [him] to the
hilt."  [At this time, Ledeen also outlined Ghorbanifar's proposal
for an anti-Libyan "sting" operation in which the assassination of a leading
opponent of Qadhafi would be staged and later revealed to be faked.  Ledeen
Dep., 6/22/87, at 167, 172-74.]  Allen passed the information to the CIA's
Near East Division for evaluation.

     After meeting with Ghorbanifar in mid-December in Switzerland, Ledeen met
with Casey on December 19 and repeated his arguments for dealing with the
Iranian.  Casey reacted favorably but indicated a need to clear up the
controversy over Ghorbanifar's poor record with the CIA.

     Casey called Deputy Director for Operations Clair George and instructed
him to arrange a new evaluation of Ghorbanifar.  On December 22, the Chief of
the Iran branch at the CIA interviewed Ghorbanifar at Ledeen's home.  Ledeen
and Allen were there and North showed up near the end.  Ledeen told the Chief
of the Iran branch that Ghorbanifar is "a wonderful man . . . almost too good
to be true."  The conversation focused on terrorism and leading personalities
in Iran.

     The Chief of the Iran branch reported to his CIA superiors that he was
"only further convinced of the untruthfulness or lack of trust that we could
put in Mr. Ghorbanifar."  They decided that Ghorbanifar should be given a
polygraph test, and Ghorbanifar agreed.  After hearing the briefing on
Ghorbanifar, Casey sent the President an "eyes only" letter stating that one
of the ongoing initiatives to free the hostages was a plan involving
Ghorbanifar.  Casey wrote of Ghorbanifar:  "He has 3 or 4 scenarios he would
like to play out."

     The decision to consider continued reliance on Ghorbanifar was
remarkable.  Previously, Agency officials had found his information so marked
by deceit, lies, and self-serving proclamations that it had issued a "burn
notice" warning the U.S. intelligence community that he could not be trusted
and should not be dealt with.  Moreover, the information Ghorbanifar was
providing was almost impossible to corroborate.  He alone was explaining the
Iranian position on the hostage issue.  The last deal he had helped arrange,
the November HAWK shipment, had been a complete disaster.