Authors: Hedrick Smith
Government Within the Government
With the White House conspiracy to sell arms to Iran and secretly fund the Nicaraguan
contras
, the national security staff became a government within the government. The Rambo exploits of Lieutenant Colonel Oliver North and Bud McFarlane’s flight to Tehran were light-years from the gray bureaucratic task of sifting options that was originally conceived for the NSC staff. Gone was the role of neutral policy referee. Reagan made his NSC staff a free-lance CIA, to conceal his policies and escape accountability from an objecting Congress and to circumvent all but a tiny fragment of his own administration. National Security Adviser John Poindexter usurped the president’s authority (if Reagan and Poindexter are to be believed), approving the diversion of Iranian profits to the
contras
and then keeping that secret from the president.
The Iran-
contra
operation is the most stunning case of the surreptitious accumulation of staff power in recent presidencies. It carried the long-term trend of growing national-security-staff power beyond anything previously attempted. Nixon and Carter had used their national security advisers, Kissinger and Brzezinski, to formulate policy and to conduct negotiations with Peking and Moscow. On the Strategic Defense Initiative, Reagan’s NSC staff became the entrepreneur of policy. But in the Iran-
contra
operation, the NSC staff added three critical aspects of power: the power of decision, the power of operational action, and the power of curbing dissent through tight secrecy and deception.
First, the power of decision: John Poindexter’s raw arrogation of
presidential authority shocked the congressional investigating committee. Puffing on his pipe, Poindexter treated his explosive, on-the-spot decision to approve North’s skimming profits from the Iranian arms deals to fund the
contras
as a mere “detail” of policy, implementing Reagan’s general line. Invoking Harry Truman’s famous quip about presidential responsibility, but with an ironic twist, Poindexter declared, “On this whole issue, you know, the buck stops here with me.
“I made the decision,” Poindexter said with chilling self-assurance. “I felt I had the authority to do it. I thought it was a good idea. I was convinced that the president would, in the end, think it was a good idea. But I did not want him to be associated with the decision.… I made a very deliberate decision not to ask the president so that I could insulate him from the decision and provide some future deniability for the president if it ever leaked out.”
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This deniability supplanted the principle of accountability.
Second, the power of operational actions: Well before Poindexter made that fateful decision, Reagan had made his NSC staff an operational arm of government in the new arena of overseas covert operations. In the Iran-
contra
affair, Reagan’s NSC usurped not only policy-making authority but the action operations of the Pentagon, State Department, and CIA combined.
Ollie North was chief executive officer of a covert private-sector empire—known among insiders as the “enterprise”—which short-circuited the U.S. government. As Reagan’s case officer for the Iranian operation and the
contras
, North built a network of former CIA officials such as Eugene Hasenfus, the cargo handler captured when his supply plane was shot down over Nicaragua on October 5, 1986, and the pilot, William Cooper, who was killed in the crash. Through former Air Force Major General Richard Secord, a specialist in covert operations, North bought arms, transferred big money, and chartered ships and planes to ferry arms to Iran and to airdrop weapons to the
contras
through a string of dummy companies (Lake Resources and Compagnie de Services Fiduciares in Switzerland and Dolmy in Panama).
By 1986, North’s own diagram showed a network of twenty-eight organizations in what he called “PROJECT DEMOCRACY,” or “PRODEM.” He told Poindexter that it was worth “over $4.5 million,” and he wanted the CIA to buy it all—including “six aircraft, warehouses, supplies, maintenence [
sic
] facilities, ships, boats, leased houses, vehicles, ordnance, munitions, communications equipment, and a 6250’ runway on property owned by a PRODEM proprietary.” In Bill Casey’s words, North ran “a full-service covert operation” for
Nicaragua—but without the formal written presidential authority and notification to Congress required by the National Security Act and by Reagan’s Executive Order 12333.
North’s operation was an incredible end run of all governmental controls. By North’s account, Casey—who hated congressional oversight—saw great potential for an even more ambitious end run. In North’s operation, Casey envisioned a global clandestine service—outside of normal governmental control and perhaps without telling the president. According to North, Casey wanted to run an “off-the-shelf, self-sustaining, stand-alone entity”—a secret, self-financing slush fund for covert operations that would evade the legal controls instituted in the mid-1970s in reaction to earlier CIA excesses, such as attempted assassinations on foreign leaders.
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As Senator Sam Nunn observed, the NSC staff had mounted “an internal coup.” The normal rules of the foreign policy game were suspended. Poindexter, McFarlane, and North went behind the backs of cabinet officers and normal chains of command. They gave secret instructions to U.S. ambassadors and flashed messages to CIA station chiefs; they commandeered planes and gave bogus stories to other government agencies to cover their real actions; they privatized foreign policy, and their commercial operatives knew more about Reagan’s policy than the president or members of his cabinet. After Congress cut off aid to the
contras
, Reagan partisans raised $1.7 million for the
contras
from private donors and illegally channeled funds to North through a tax-exempt foundation. Reagan, who posed for pictures with big donors, claimed he thought their money was going for television ads, not weaponry. Saudi Arabia’s King Fahd donated another $32 million, after being nudged by National Security Adviser Bud McFarlane. The president too thanked Fahd. All this circumvented Congress.
Third, the NSC staff exploited the power of information to control policy. It used the time-tested practice of bureaucrats in the power game: secrecy, keeping other policymakers in the dark. At the congressional hearings, Poindexter and North invoked the need to protect hostage lives, the Iranian channel, their clandestine agents, the covert operation itself, as the reasons for “compartmenting” information of their operation and deceiving others. But clearly one overriding imperative—especially for practicing secrecy and deception against other top officials—was control of policy. Poindexter’s blunt rationale: “I simply didn’t want any outside interference.”
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Caspar Weinberger, cut out by Poindexter, observed bluntly that those who favored the Iranian operation and “who knew that I opposed
it and George Shultz opposed it, did not want the president to hear these arguments after the decision had been made … and I think it was a very bad procedure.”
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Moreover, the NSC staff dissembled to the president, Congress, members of the cabinet, other agencies, and other governments. When congressional intelligence committees pressed in 1985 to know what aid North was giving to the
contras
, the NSC responded with outright lies, as North later admitted. By March 1985, North had developed a plan to finance and supply the
contras
and was soon raising funds, obtaining arms and giving tactical instructions to the
contras
. But when Congress inquired, North and his NSC superiors falsely denied his activities—once in a letter to a House Foreign Affairs Subcommittee on September 12, 1985—just eight days before North gave a CIA agent in El Salvador orders for air drops into Nicaragua for the
contras
. A year later, North told Poindexter how he had lied face-to-face to the House Intelligence Committee about his operations, and Poindexter sent him a pat-on-the back message: “Well Done.”
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Inevitably, the lies turned inward. The main plotters misled and lied to each other. North and Casey sometimes operated behind the backs of Poindexter and McFarlane. Poindexter led North to believe the president knew and approved things that Poindexter kept from Reagan. North lied to Secord about his access to the president. So pervasive were the lies that as the Iran-
contra
operation was being exposed in November 1986, a battle royal erupted in Reagan’s inner circle over what had been done, what would be told to the president and the public, and who would control policy. Secretary of State Shultz, bent on shaking Reagan to face the truth, bellowed at him on November 19: “We have been deceived and lied to” by Casey and Poindexter.
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Secrecy had taken precedence over everything, ends justifying means. Casey lied to congressional intelligence committees, pretending ignorance about operations he had helped organize; Poindexter tore up the December 5, 1985, order signed by Reagan for an arms-for-hostage deal, supposedly to protect the president from political damage; Casey, Poindexter, and North met—in the presence of others—to concoct a cover story so palpably false that State Department legal adviser Abraham Sofaer threatened to resign if it were used; North and his secretary, Fawn Hall, shredded an eighteen-inch thick stack of documents to cover up North’s Iran and
contra
operations. North kept shredding one night until four
A.M
. and continued the next day, even in the presence of Justice Department investigators. When Hall found other incriminating documents in the White House, she smuggled them out in her
boots and in the back of her blouse to be destroyed. When members of Congress asked why risk violating the law, Fawn Hall replied, “Sometimes you have to go above the written law, I believe.”
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In sum, the Iran-
contra
operation was the epitome of the backdoor foreign policy game. The NSC staff became the vehicle for unilateral policy-making, avoiding checks and balances inside the administration as well as the constitutional authority of Congress. “People [in the administration] turned to covert action because they thought they could not get congressional support for overt activities,” Bud McFarlane explained. “But they were not forced to think systematically about the fatal risks they were running.”
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The impulse to turn to a clandestine power game came from Reagan himself. The Iranian arms deals and the White House fund-raising and gunrunning to the Nicaraguan
contras
were not two separate policies that happened to merge in midstream through the ingenuity of Colonel North. They were parallel elements of the same foreign policy game undertaken by a president blocked by Congress, frustrated by divisions in his inner circle, and determined to override all objections in pursuit of his goals.
After the operation was exposed, President Reagan cast himself as innocent and ignorant of the most incriminating details of the policy cabal: the diversion of Iranian funds to the
contras
, the private donations for
contra
weapons, the efforts at covering up the Iranian arms trade. But in October 1984, when Congress banned further governmental aid to the
contras
, Reagan had told McFarlane that he “did not intend to break faith with the
contras
”—Reagan’s signal to find the
contras
other support, a signal which he reaffirmed to Poindexter in 1986.
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Poindexter testified that Reagan had been briefed on NSC staff actions, such as arranging for construction of a clandestine airstrip for the
contras
in Costa Rica.
For months President Reagan and other officials claimed that the administration did not solicit private donations for the
contras
, but in mid-May 1987 the president did an about-face. “I was very definitely involved in the decisions” about private covert aid to the
contras
, he said. “It was my idea to begin with.” Justifying his backdoor game, Reagan claimed a legal loophole for the NSC staff. He argued that the congressional ban on aiding the
contras
“does not legally apply to me” and was “not restrictive” on the NSC staff. Although Reagan had pushed his NSC staff into intelligence operations, he contended that it was not—in the language of the law—an agency involved in intelligence activities, and therefore was not covered by the law.
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Some of his own top advisers disagreed. Bud McFarlane, then national security adviser, felt the law meant “no one in the government” could help the
contras
, beyond moral and political support. In September 1984, when North wanted to raise funds for a
contra
helicopter, McFarlane turned him down saying, “I don’t think this is legal.” In 1987, McFarlane said he had not known how much fund-raising and tactical guidance North had provided the
contras
, but it had clearly been illegal.
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Similarly, Attorney General Edwin Meese testified—long after the fact—that he did not see any exemption from the law for the NSC staff.
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President Reagan was also the driving force behind the arms deals with Iran, which he publicly tried to justify as a bid for strategic influence with Iranian “moderates.” Weinberger mocked that whole idea. “I didn’t think there was anyone we could deal with who was not virulently anti-American,” Weinberger told the congressional committee. “I did not think and do not think there’s any moderate element that is still alive.”
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Moreover, the record showed that Reagan’s passion about the hostages kept the operation moving. The hostages became Reagan’s obsession, as they had been Carter’s. Other officials read his real motive as freeing the hostages. At daily briefings, the president would ask Poindexter, “John, anything new on the hostages?” From Reagan’s drumbeat, McFarlane concluded, “his concerns here were for the return of the hostages.” North testified that whenever he briefed the president about a strategic opening with Iran, Reagan would focus on the hostages.