The Family Jewels (39 page)

The most egregious tampering took place with Richard Helms's records. Watergate investigators learned from Victor Marchetti of the possible existence of an audiotaping system in the offices of senior CIA officials. By letter on January
16, 1973, Senator Mike Mansfield asked the CIA to safeguard all evidence including tapes. Within days, maintaining his actions were mere housekeeping before leaving for his new post as ambassador to Iran, Director Helms ordered the destruction of all tapes and transcripts, plus written records concerning them. More than four thousand pages of documents were apparently involved—there had never been such a mass expurgation of records at Langley. The CIA gave investigators only summaries of logs and denied the Office of Security logs related to the taping.

Tape questions led to one of the CIA's biggest Watergate embarrassments. Once Colby informed Howard Baker the Cushman-Hunt tape had been destroyed, the senator asked if there were others. The CIA man confirmed a taping system had existed, said there might be some audio recordings left, and agreed to review any remaining tapes and provide the relevant ones. Colby later had to admit the materials had been destroyed. But at the Watergate hearings General Cushman testified on his contacts with Hunt and produced a transcript of their July 1971 conversation. Bill Colby explained that his secretary—who had previously worked for Cushman—made the record from memory, because Colby had encountered no tapes when looking for Watergate-related records in 1972. After that two Cushman tapes—one of them the talk with Hunt—had been found after all.

Vernon Walters's executive assistant rediscovered the tape in May 1973. Senator Baker demanded it be reviewed, which consumed seven months, and he arranged to listen to the tape. By then it was February 1974. Suddenly, the day before Baker was to hear this conversation, CIA deputy legislative counsel Walter Pforzheimer produced a new transcript, plus one of John Ehrlichman's side of his original approach to Cushman regarding Howard Hunt. It was all too convenient.

President Nixon had invoked the CIA and national security to cover up his Watergate transgressions, and he had
failed. But because there
was
a record of CIA activities that touched on White House dirty tricks, and because the agency
did
drag its feet in the investigation, Watergate tarnished Langley. Meanwhile, in the midst of the preliminaries, when Richard Nixon still looked to be the victor and had won reelection, he banished Richard Helms to Iran. The agency's official historians of Helms's time offer this comment: “Helms's dismissal was not the result of his or his agency's involvement in the Watergate mess, but instead may have been influenced by his resolute refusal to permit the White House to use the CIA as an instrument in its elaborate coverup of the crime.”
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Fast-forward a dozen years. Starting in October 1986 there began a new scandal, one directly rooted in intelligence activity, a scandal that again had the executive branch of government circling its wagons. This was the Iran-Contra affair. Like Watergate, Iran-Contra opened with an incontrovertible event, not an arrest this time, but the shootdown of a transport plane that had been supplying Nicaraguan antigovernment rebels formerly supported by the CIA. One member of the crew, Eugene Hasenfus, parachuted from the flaming aircraft to be captured by government forces. Taken to the Nicaraguan capital, Managua, Hasenfus told a news conference that the men who employed his air company belonged to the agency. The charge was not exactly right, though it was close to being true. Those who coordinated the air operation—former CIA contract officers indeed—were actually with a private corporation that worked in cooperation with President Ronald Reagan's National Security Council (NSC) staff. In one of its corporate guises, the “private benefactors,” as they would soon be called, had already been revealed by the Costa Rican government as controlling an airstrip in that country.

The shootdown in Nicaragua set off alarm bells. Officials of both the CIA and the State Department denied knowing anything about the plane or its flight. The president's national security advisor, Vice Admiral John Poindexter, and the principal NSC staffer involved, marine Lieutenant Colonel Oliver North, kept quiet. During a brief press appearance on October 8, President Reagan asserted the United States had absolutely no connection with the Hasenfus airplane. But the press stayed on the story, which did not go away. For a month or so Reagan stuck to his strategy of mere denial, but then the scandal blew wide open.

The Nicaraguan adventures did not exist in a vacuum. They were but one facet of a wider initiative, in which the Reagan NSC was selling weapons to America's archenemy, Iran. The weapons were unloaded at inflated prices and the difference used to pass money along to the Nicaraguan rebels. Thus, the “Iran-Contra” appellation stuck to the affair. Its origins lay in twin problems that bedeviled President Reagan. On the one hand, the CIA had overreached in Reagan's project to overthrow the Marxist government of Nicaragua by supporting
contra
rebels, leading Congress to ban further military or CIA efforts. On the other hand, Islamic fundamentalists in Lebanon, associated with Iran, had taken to kidnapping westerners, including Americans and even CIA officers, and Reagan faced a dilemma on how to respond to that. He had ordered the NSC to do whatever required to keep the
contras
together, hoping to convince Congress to reverse itself and vote new money for the CIA covert operation. That was in June 1984. The following year President Reagan had been encouraged to try an opening to Iran in hopes that Teheran might order the Lebanese to free American hostages.

These two tracks involved the Reagan administration in a variety of ill-considered actions that strained the boundaries of legality if they were not actually criminal. Officials solicited money or weapons from foreign nations—Saudi Arabia,
Brunei, Taiwan, South Korea, Israel, South Africa—to be used for U.S. policy purposes not approved by Congress. Law on weapons sales to foreign countries that required congressional notification was skirted in the arms deals with Iran. In addition to legal strictures, the deals violated a specific arms embargo the United States had in place against Iran. The NSC staff conducted an outreach program encouraging
contra
support that verged on illegal solicitation of funds. The intelligence oversight system put in place after 1975, which provided that “presidential findings” back every covert project, was violated in both principle and detail, with portions of the Iran-Contra project never so justified, and knowledge of the finding Reagan actually issued withheld from the responsible congressional committees. Private citizens were enlisted to conduct the arms sales, move the weapons, and funnel money to the
contras
, violating statutes prohibiting individuals conducting foreign policy. Former national security advisor Robert C. McFarlane, together with retired CIA and military officials, indeed had made a trip to Teheran in May 1986, carrying weapons with them, and negotiating in behalf of the United States. Their essential purpose was to trade arms with Iran in exchange for American hostages. Money for the
contras
was a side benefit. Once again, in addition to being violations of law, these talks breached an official U.S. policy of refusing to negotiate with terrorists—by an administration that had attempted to equate “state-sponsors” with terrorists themselves. In short, the Reagan administration had a lot to hide—and the emerging Iran-Contra story threatened President Reagan's leadership.

In the early days of the crisis, both CIA and State Department officials were called before congressional committees and denied knowing anything about the airplane shot down over Nicaragua. Meanwhile, behind the scenes, NSC staffer North and his boss, John Poindexter, intervened with the Justice Department to halt an investigation of the
background of the plane, which could be traced to Southern Air Transport—a former CIA proprietary—and which had previously been used by the Drug Enforcement Administration in a sting operation aimed at linking Nicaraguan government leaders with drug trafficking. Air crewmen were discovered to have CIA backgrounds, flying in Laos for another CIA proprietary, Air America. At every turn the U.S. government connections of this shadowy operation seemed more substantial.

Disclosure of the Iran side of the operation also loomed. Reagan's Director of Central Intelligence, William J. Casey, was approached by a business associate whose connections included persons who had helped finance the Iran arms transfers and had not been paid. Casey's associate warned the men were ready to leak the story. The CIA director met with John Poindexter and with senior agency officials to cobble together a course of action. They had yet to do anything when, on November 3, the Lebanese magazine
Al-Shiraa
printed an account of the McFarlane trip to Teheran and the Iran arms deals. Media speculation rose to fever pitch.

Following the
Al-Shiraa
account, Secretary of State George Shultz sent Poindexter a message advising that the administration get ahead of the story by admitting its essential truth while insisting it had been a onetime deal to free hostages. Shultz believed the denial strategy had become untenable. Admiral Poindexter resisted his recommendation. According to Poindexter, Casey, Vice President George H. W. Bush, and Secretary of Defense Caspar Weinberger all agreed on the need for continued secrecy. The perseverance of the press led President Reagan, given the need to say something, to make an offhand remark in response to a question as he ceremoniously signed an immigration reform bill on November 6. In it Reagan acknowledged “a story that came out of the Middle East,” but insisted it was completely without foundation.
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At a White House reception the next day to introduce freed hostage David Jacobsen, the president referred to comments the previous evening (possibly at a photo opportunity with officials of a radio network, but there seems to be no record of what was said, only references to it). Mr. Reagan had evidently denied the report that McFarlane visited Teheran, rejected the contention that the U.S. had traded arms for hostages, and reiterated that the United States did not negotiate with terrorists. With Jacobsen the next morning, President Reagan tried to squelch speculation, saying all his advisors agreed with his Iran policy. He could not comment further since, in hopes of returning more hostages, there were continuing exchanges with foreign nations.
¹⁷

Even today Ronald Reagan's role remains ambiguous. The independent prosecutor who would investigate Iran-Contra proved unable to obtain any evidence of the president's direct participation in the events of the actual conspiracy. The president denied approving any transfer of funds from Iranian arms deals to the
contras
, though he admitted issuing orders to help the Nicaraguan rebels. President Reagan had received the king of Saudi Arabia after a meeting at which the Saudis had agreed to make a huge cash contribution to the
contras
, and he had approved at least one—possibly two—presidential findings authorizing the weapons sales to Iran. Mr. Reagan had also approved not informing Congress of the Iranian initiative. Given his daily national security briefings, it is hardly conceivable that the president did not learn something of the military deliveries made to the
contras
by the private benefactors.

In his personal diary, on the other hand, Ronald Reagan seemed bemused the stories did not just go away. He wrote nothing of the Hasenfus plane downing. When the Iran story broached in Beirut, Reagan waited several days until noting, on November 7, failure of the no comment strategy, then posed his alternative—to refuse answers on the grounds it
would endanger the lives of the hostages. That weekend at Camp David, Reagan found the media “giving credence to every rumor and supposed leak,” with the talk shows hammering at the Iran arms story. Returning to Washington on the following Monday, the president convened his principal advisors specifically to deal with this. In his diary Reagan for the first time acknowledged a “press storm” and went on, “They quote as gospel every unnamed source plus such authorities as a Danish sailor who claims to have served on a ship carrying arms from Israel.” The next day the president groused that the media were “largely ignoring” the administration's nonexplanations. By November 12 Mr. Reagan was complaining, “This whole irresponsible press bilge about hostages & Iran has gotten totally out of hand.”
¹⁸
The problem for Mr. Reagan was that there was fire behind the smoke.

The president and his advisors had concluded on November 10 that a more active strategy was necessary. On November 12 there was a White House briefing at which four congressional leaders were given a picture of the Iran initiative. Among them on the House side was Representative Dick Cheney. Mr. Reagan would give a nationally televised speech the next night, as he put it to his private diary, to “reply to the ridiculous falsehoods the media has been spawning.”
¹⁹
In his speech the president denounced the “rumors” that had been circulating. These had become so extensive the risks of remaining silent now outweighed those of speaking out. He explicitly said the United States had made no concessions to those who held hostages, that the policy of refusing to negotiate with terrorists remained in effect. “The United States has not swapped boatloads or planeloads of American weapons for the return of American hostages,” Reagan added. He then said that he had authorized “the transfer of small amounts of defensive weapons and spare parts,” that, together, could fit into “a single cargo plane.” Mr. Reagan admitted that he had
himself asked Robert McFarlane to visit Teheran. He went on to assert that neither Congress nor executive branch officials had been circumvented and that “the relevant committees of Congress are being, and will be, fully informed.”
²⁰