Web of Three Scandals

Ari Ben-Menashe

former Israeli intelligence official

October Surprise:

— claims Casey requested him to attend the 10-15-80 Paris meeting to help to coordinate arms deliveries to Iran.

— he and an individual from Iran Ministry of Defense were in the US to propose an arms-for-hostages swap in a scheme worked out by the Israelis. Israeli government has declared him insane (the Israeli government was used as a conduit in both October Surprise — US arms shipments to Iran, 1980-82 — and Iran-Contra — under an agreement with North, US Hawks were shipped to Iran in September 1985 and November 1985).

William Casey

Reagan-Bush 1980 campaign manager; CIA director 1981-87

October Surprise:

— in 1980, devised the penetration of the national security complex in the Carter administration.

— approached Jamshid (Cyrus) Hashemi, an Iranian with contacts with the Iranian government, resulting in meeting in Madrid, July 27-30, 1980, with Mehddi Karrubi, a cleric in Khomeini’s inner circle. Second set of talks occurred around August 12. Casey proposed the release of the 52 US hostages after Reagan became president in return for military equipment. Both parties agreed to meet in Paris in October to finalize agreement.

Iran-Contra:

— Oliver North’s “teacher” and “mentor.”

— believed to have given North a structure to work with in the CIA and CIA contacts in the Mideast and Central America.

— some believe Casey to have masterminded Iran-Contra deal.

— died of brain cancer before accounting for his role.

The Central Intelligence Agency

October Surprise:

— approached Israeli government and encouraged them to cooperate with Reagan campaign.

— elements in CIA may have aided Reagan in order to avenge Carter’s distrust of the agency.

Iran-Contra:

— former CIA official Alan Fiers stated that the CIA knew that proceeds from US shipments to Iran were being diverted to aid the contra’s.

— CIA assets used in scheme, e.g., an air base near Tucson for the covert resupply of contra’s when Congress had prohibited aid.

BCCI Scandal:

— was channeling funds for several covert operations through BCCI, including aid to Afghan rebels.

— by 1984, had targeted BCCI as source of information about money laundering by drug dealers and terrorists; CIA may have ignored BCCI’s illegal activities to collect intelligence from inside the bank.

— investigators are looking into CIA’s failure to properly alert government regulators once they became aware of BCCI’s activities.

— CIA has admitted to using BCCI for the transfer of funds to covert operations at the same time it was investigating the bank.

Robert Gates

National security adviser to President Bush; now CIA director

Iran-Contra:

— Casey’s deputy at CIA when Iran-Contra deal was underway, but insists he had only heard rumors of the scheme until it was made public on 11-25-86.

— other CIA officials told Congress they informed Gates about the diversion as early as August 1986.

BCCI Scandal:

— Gates testified the CIA began investigating the bank in 1984 and briefed the Treasury Department and other agencies on BCCI in January 1985 and 1988, but never told the Justice Department after discovering illegal conduct by BCCI officials.

— some charge that Gates hindered an investigation of BCCI because the CIA used the bank for covert operations, including arms shipments to the Mideast.

Manuchar Ghorbanifar

Iranian business executive and arms dealer

October Surprise:

— believed to have betrayed a plot to overthrow Khomeini regime in order to establish credibility with Khomeini.

— recruited by US intelligence in 1980, but was rejected.

Iran-Contra:

— served as intermediary between NSC staff and Iranians.

BCCI Scandal:

— used checks from BCCI account in Iran-Contra deals with North.

Donald Gregg

NSC staff under Carter; chief of staff and later national security adviser to VP Bush

October Surprise:

— longtime CIA officer; may have been leak from Carter White House to Casey in 1980.

— believed to have gone with Casey to Madrid for meetings with Iranians; he denies this.

Iran-Contra:

— as Bush’s aide, may have been VP’s contact point on illegal supply of contra’s and other covert operations in Nicaragua.

Cyrus Hashemi

Iranian merchant banker

October Surprise:

— had access to several high-level officials in Iran.

— throughout 1980, cooperated with Carter administration in efforts to free hostages while informing Reagan/Bush campaign of Carter’s plans.

— set up and managed meetings in Madrid; less important role in Paris meetings, but was present.

— died mysteriously in July 1986.

BCCI Scandal:

— believed to have used services of BCCI for arms deals.

Justice Department

Iran-Contra:

— Attorney General Edwin Meese made Iran-Contra scandal public; many believe he knew of the scheme well before the announcement.

BCCI Scandal:

— accused of stalling the investigation of BCCI in the United States.

— knew for three years before the scandal broke that BCCI illegally owned a US bank company.

Adnan Khashoggi

Saudi business executive; major benefactor of the American University

Iran-Contra /BCCI:

— financed shipment of weapons from Israel to Iran, using BCCI.

Robert McFarlane

Reagan’s national security adviser, 1982-85

October Surprise:

— along with Richard Allen and Laurence Silberman, met with an unidentified Middle Easterner in Washington in October 1980, who offered to arrange the release of the 52 hostages directly to the Republicans. The deal was rejected.

Iran-Contra:

— key figure; with North, led mission to Teheran in May, 1986.

— in March 1988, plead guilty to four counts of withholding information form Congress.

The National Security Council

October Surprise:

— leaks to 1980 Reagan-Bush campaign may have come from Carter’s NSC (specifically Gregg), alerting challengers to attempts to free hostages.

— Gregg served on NSC under Carter and Reagan; Gates under Bush.

Iran-Contra:

McFarlane and John Poindexter, each head of NSC at one time, were intimately involved. North was manager of the scheme.

Manuel Noriega

former ruler of Panama; former head of Panamanian secret service

Iran-Contra:

— had a vital role in assisting CIA efforts to aid the contra’s , supplying arms to the contra’s in the early 1980’s and offering to assassinate Sandinista leaders.

— used drug-sale proceeds to finance shipment of arms to contra’s.

— met with Casey, Bush and North.

BCCI Scandal:

— used BCCI, with CIA knowledge, to launder drug money.

— current government of Panama alleges that Noriega placed up to $23 million in BCCI accounts and then dispersed the money to other banks around the world.

Oliver North, NSC staff, 1981-87

Iran-Contra:

— key figure in scheme; may have devised it with Casey, managed nearly all aspects of arms sales to Iran and illegal resupply of the contra’s. Raised private money for contra’s. Says Reagan knew everything.

— prosecuted for crimes; convictions overturned.

BCCI Scandal:

— used BCCI to finance illegal arms deals with Iran.

— channeled money for an Iran Contra front company, Lake Resources, through BCCI.

John Shaheen

US business executive

October Surprise:

— Cyrus Hashemi’s business partner and close friend of William Casey; served as a contact point between Hashemi and Casey.

Iran-Contra:

— helped link Hashemi and Casey in early stages of the scandal.

[prepared largely from information compiled by Alfonso Serrano F., published in Nuclear Times, Spring 1992, pp. 24-25]

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