As reported in
The New York Times in 1991, "continuing allegations that Reagan campaign officials made a deal with the Iranian Government of Ayatollah Ruhollah Khomeini in the fall of 1980" led to "limited investigations". However "limited", those investigations established that "Soon after taking office in 1981, the Reagan Administration secretly and abruptly changed United States policy." Secret Israeli arms sales and shipments to Iran began in that year, even as, in public, the Reagan administration presented a different face, and "aggressively promoted a public campaign [...] to stop worldwide transfers of military goods to Iran".
The New York Times explains: "Iran at that time was in dire need of arms and spare parts for its American-made arsenal to defend itself against Iraq, which had attacked it in September 1980", while "Israel [a US ally] was interested in keeping the war between Iran and Iraq going to ensure that these two potential enemies remained preoccupied with each other". Major General Avraham Tamir, a high-ranking Israeli Defense Ministry official in 1981, said there was an "oral agreement" to allow the sale of "spare parts" to Iran. This was based on an "understanding" with Secretary of State
Alexander Haig (which a Haig adviser denied). This account was confirmed by a former senior US diplomat with a few modifications. The diplomat claimed that "Ariel Sharon|[Ariel] Sharon violated it, and Haig backed away". A former "high-level"
Central Intelligence Agency (CIA) official who saw reports of arms sales to Iran by Israel in the early 1980s estimated that the total was about $2 billion a year—but also said, "The degree to which it was sanctioned I don't know." Two of the key middlemen in the arms sales were
Saudi billionaire
Adnan Khashoggi and former
SAVAK agent
Manucher Ghorbanifar. On or about 11 June 1985, a draft National Security Decision Directive was written at the behest of National Security Adviser
Robert McFarlane which called for the US to begin a rapprochement with the Islamic Republic of Iran. The paper read: Defense Secretary
Caspar Weinberger was highly negative, writing on his copy of McFarlane's paper: "This is almost too absurd to comment on [...] like asking Qaddafi to Washington for a cozy chat." Secretary of State
George Shultz was also opposed, asking that having designated Iran a
State Sponsor of Terrorism in January 1984, how could the US possibly sell arms to Iran? Only the Director of the CIA
William J. Casey supported McFarlane's plan to start selling arms to Iran. In early July 1985, the historian
Michael Ledeen, a consultant of
National Security Adviser Robert McFarlane, requested assistance from
Israeli Prime Minister Shimon Peres for help in the sale of arms to Iran. Iran was in the midst of the
Iran–Iraq War and could find few Western nations willing to supply it with weapons. The idea behind the plan was for Israel to ship weapons through an intermediary (identified as
Manucher Ghorbanifar) to the Islamic Republic as a way of aiding a supposedly moderate, politically influential faction within the regime of
Ayatollah Khomeini who was believed to be seeking a rapprochement with the US; after the transaction, the US would reimburse Israel with the same weapons, while receiving monetary benefits. McFarlane in a memo to Shultz and Weinberger wrote: The plan was discussed with President Reagan on 18 July 1985 and then again on 6 August 1985. Shultz at the latter meeting warned Reagan that "we were just falling into the arms-for-hostages business and we shouldn't do it". The Americans believed that there was a moderate faction within the Islamic Republic headed by
Akbar Hashemi Rafsanjani, the powerful speaker of the
Majlis who was seen as a leading potential successor to Khomeini and who was alleged to want a rapprochement with the US. The Americans believed that Rafsanjani had the power to order Hezbollah to free the US hostages and establishing a relationship with him by selling Iran arms would ultimately place Iran back within the US sphere of influence. In 1985, President Reagan entered
Walter Reed National Military Medical Center for
colon cancer surgery. Reagan's recovery was nothing short of miserable, as the 74-year-old President admitted having little sleep for days in addition to his immense physical discomfort. While doctors seemed to be confident that the surgery was successful, the discovery of his localized cancer was a daunting realization for Reagan. From seeing the recovery process of other patients, as well as medical "experts" on television predicting his death to be soon, Reagan's typical optimistic outlook was dampened. These factors were bound to contribute to psychological distress in the midst of an already distressing situation. Additionally, Reagan's invocation of the
25th Amendment prior to the surgery was a risky and unprecedented decision that smoothly flew under the radar for the duration of the complex situation. While it only lasted slightly longer than the length of the procedure (approximately seven hours and 54 minutes), this temporary transfer of power was never formally recognized by the White House. It was later revealed that this decision was made on the grounds that "Mr. Reagan and his advisors did not want his actions to establish a definition of incapacitation that would bind future presidents." Reagan expressed this transfer of power in two identical letters that were sent to the speaker of the House of Representatives, Representative
Tip O'Neill, and the president pro tempore of the senate, Senator
Strom Thurmond. While the President was recovering in the hospital, McFarlane met with him and told him that representatives from Israel had contacted the
National Security Agency to pass on confidential information from what Reagan later described as the "moderate" Iranian faction headed by Rafsanjani opposed to the Ayatollah's hardline anti-US policies. The visit from McFarlane in Reagan's hospital room was the first visit from an administration official outside of Donald Regan since the surgery. The meeting took place five days after the surgery and only three days after doctors gave the news that his polyp had been malignant. The three participants of this meeting had very different recollections of what was discussed during its 23-minute duration. Months later, Reagan even stated that he "had no recollection of a meeting in the hospital in July with McFarlane and that he had no notes which would show such a meeting". This does not come as a surprise considering the possible short and long-term effects of anesthesia on patients above the age of 60, in addition to his already weakened physical and mental state. Reagan always publicly insisted after the scandal broke in late 1986 that the purpose behind the arms-for-hostages trade was to establish a working relationship with the "moderate" faction associated with Rafsanjani to facilitate the reestablishment of the US–Iranian alliance after the soon to be expected death of Khomeini, to end the Iran–Iraq War and end Iranian support for Islamic terrorism while downplaying the importance of freeing the hostages in Lebanon as a secondary issue. By contrast, when testifying before the Tower Commission, Reagan declared that the hostage issue was the main reason for selling arms to Iran. The following arms were supplied to Iran: • First arms sales in 1981 (see above) • 20 August 1985 – 96
TOW antitank missiles • 14 September 1985 – 408 more TOWs • 24 November 1985 – 18
Hawk antiaircraft missiles • 17 February 1986 – 500 TOWs • 27 February 1986 – 500 TOWs • 24 May 1986 – 508 TOWs, 240 Hawk spare parts • 4 August 1986 – More Hawk spares • 28 October 1986 – 500 TOWs
First few arms sales The first arms sales to Iran began in 1981, though the official paper trail has them beginning in 1985 (see above). On 20 August 1985, Israel sent 96 US-made TOW missiles to Iran through an arms dealer
Manucher Ghorbanifar. Subsequently, on 14 September 1985, 408 more TOW missiles were delivered. On 15 September 1985, following the second delivery, Reverend
Benjamin Weir was released by his captors, the
Islamic Jihad Organization. On 24 November 1985, 18 Hawk antiaircraft missiles were delivered.
Modifications in plans Robert McFarlane resigned on 4 December 1985, stating that he wanted to spend more time with his family, and was replaced by Admiral
John Poindexter. Two days later, Reagan met with his advisors at the White House, where a new plan was introduced. This called for a slight change in the arms transactions: instead of the weapons going to the "moderate" Iranian group, they would go to "moderate" Iranian army leaders. As each weapons delivery was made from Israel by air, hostages held by Hezbollah would be released. Israel would continue to be reimbursed by the US for the weapons. Though staunchly opposed by
Secretary of State George Shultz and
Secretary of Defense Caspar Weinberger, the plan was authorized by Reagan, who stated that, "We were trading arms for hostages, nor were we negotiating with terrorists". In his notes of a meeting held in the White House on 7 December 1985, Weinberger wrote he told Reagan that this plan was illegal, writing: Weinberger's notes have Reagan saying he "could of illegality but he couldn't that 'big strong President Reagan passed up a chance to '." Now retired National Security Advisor McFarlane flew to London to meet with Israelis and Ghorbanifar in an attempt to persuade the Iranian to use his influence to release the hostages before any arms transactions occurred; this plan was rejected by Ghorbanifar. On the day of McFarlane's resignation,
Oliver North, a military aide to the
US National Security Council (NSC), proposed a new plan for selling arms to Iran, which included two major adjustments: instead of selling arms through Israel, the sale was to be direct at a markup; and a portion of the proceeds would go to the
Contras, Nicaraguan paramilitary fighters waging
guerrilla warfare against the
Sandinista government, claiming power after an election full of irregularities. The dealings with the Iranians were conducted via the NSC with Admiral Poindexter and his deputy Colonel North, with the US historians Malcolm Byrne and Peter Kornbluh writing that Poindexter granted much power to North "who made the most of the situation, often deciding important matters on his own, striking outlandish deals with the Iranians, and acting in the name of the president on issues that were far beyond his competence. All of these activities continued to take place within the framework of the president's broad authorization. Until the press reported on the existence of the operation, nobody in the administration questioned the authority of Poindexter's and North's team to implement the president's decisions". North proposed a $15 million markup, while contracted arms broker Ghorbanifar added a 41-percent markup of his own. Other members of the NSC were in favor of North's plan; with large support, Poindexter authorized it without notifying President Reagan, and it went into effect. At first, the Iranians refused to buy the arms at the inflated price because of the excessive markup imposed by North and Ghorbanifar. They eventually relented, and, in February 1986, 1,000 TOW missiles were shipped to the country. Funding from one foreign country,
Brunei, was botched when North's secretary,
Fawn Hall, transposed the numbers of North's
Swiss bank account number. A Swiss businessperson, suddenly $10 million richer, alerted the authorities of the mistake. The money was eventually returned to the
Sultan of Brunei, with interest. On 7 January 1986, John Poindexter proposed to Reagan a modification of the approved plan: instead of negotiating with the "moderate" Iranian political group, the US would negotiate with "moderate" members of the Iranian government. Poindexter told Reagan that Ghorbanifar had important connections within the Iranian government, so, with the hope of the release of the hostages, Reagan approved this plan as well. Throughout February 1986, weapons were shipped directly to Iran by the US (as part of Oliver North's plan), but none of the hostages were released. Retired National Security Advisor McFarlane conducted another international voyage, this one to
Tehran—bringing with him a gift of a
Bible with a handwritten inscription by Ronald Reagan and, according to
George W. Cave, a cake baked in the shape of a key. They arrived in Tehran in an Israeli plane carrying forged Irish passports on 25 May 1986. This meeting also failed. Much to McFarlane's disgust, he did not meet ministers, and instead met in his words "third and fourth level officials". At one point, an angry McFarlane shouted: "As I am a Minister, I expect to meet with decision-makers. Otherwise, you can work with my staff." The Iranians requested concessions such as Israel's withdrawal from the
Golan Heights, which the US rejected. More importantly, McFarlane refused to ship spare parts for the Hawk missiles until the Iranians had Hezbollah release the US hostages, whereas the Iranians wanted to reverse that sequence with the spare parts being shipped first before the hostages were freed. The differing negotiating positions led to McFarlane's mission going home after four days. After the failure of the secret visit to Tehran, McFarlane advised Reagan not to talk to the Iranians anymore, advice that was disregarded.
Subsequent dealings On 26 July 1986,
Hezbollah freed the US hostage Father
Lawrence Jenco, former head of
Catholic Relief Services in Lebanon. Following this,
William J. Casey, head of the CIA, requested that the US authorize sending a shipment of small missile parts to Iranian military forces as a way of expressing gratitude. Casey also justified this request by stating that the contact in the Iranian government might otherwise lose face or be executed, and hostages might be killed. Reagan authorized the shipment to ensure that those potential events would not occur. North used this release to persuade Reagan to switch over to a "sequential" policy of freeing the hostages one by one, instead of the "all or nothing" policy that the Americans had pursued until then. By this point, the Americans had grown tired of Ghorbanifar who had proven himself a dishonest intermediary who played off both sides to his own commercial advantage. In August 1986, the Americans had established a new contact in the Iranian government, Ali Hashemi Bahramani, the nephew of Rafsanjani and an officer in the Revolutionary Guard. The fact that the Revolutionary Guard was deeply involved in international terrorism seemed only to attract the Americans more to Bahramani, who was seen as someone with the influence to change Iran's policies.
Richard Secord, a US arms dealer, who was being used as a contact with Iran, wrote to North: "My judgment is that we have opened up a new and probably better channel into Iran". North was so impressed with Bahramani that he arranged for him to secretly visit
Washington, D.C. and gave him a guided tour at midnight of the White House. North frequently met with Bahramani in the summer and autumn of 1986 in West Germany, discussing arms sales to Iran, the freeing of hostages held by Hezbollah and how best to overthrow President
Saddam Hussein of Iraq and the establishment of "a non-hostile regime in Baghdad". In September and October 1986, three more Americans—Frank Reed, Joseph Cicippio, and Edward Tracy—were abducted in Lebanon by a separate terrorist group, who referred to them simply as "G.I. Joe", after the popular US toy. The reasons for their abduction are unknown, although it is speculated that they were kidnapped to replace the freed Americans. One more original hostage, David Jacobsen, was later released. The captors promised to release the remaining two, but the release never happened. During a secret meeting in Frankfurt in October 1986, North told Bahramani that "Saddam Hussein must go". North also claimed that Reagan had told him to tell Bahramani that: "Saddam Hussein is an asshole." Bahramani during a secret meeting in Mainz informed North that Rafsanjani "for his own politics [...] decided to get all the groups involved and give them a role to play". Thus, all the factions in the Iranian government would be jointly responsible for the talks with the Americans and "there would not be an internal war". This demand of Bahramani caused much dismay on the US side as it made clear to them that they would not be dealing solely with a "moderate" faction in the Islamic Republic but rather with all the factions in the Iranian government—including those who were very much involved in terrorism. Despite this, the talks were not broken off. ==Discovery and scandal==