Washington Report on Middle East Affairs, May/June 1991, Page 11

Special Report

Reprise of the October Surprise: Is the Worst Surprise Still to Come?

By Richard H. Curtiss

"Congress will not formally investigate charges that the Reagan campaign stole the election in 1980, in large part because Israel's supporters on Capitol Hill do not want to put the spotlight on Israel's role, which during that period sold weapons to Iran in blatant disregard of President Carter."

—Prediction by Newsweek correspondent Eleanor Clift, on the NBC television talk show The McLaughlin Group, May 12, 1991

For regular readers of this magazine, there is little that is new in the current flurry of American media reports on the "October Surprise" of 1980, other than the fact that Gary Sick, a retired career Navy officer and a National Security Council Middle East adviser in President Jimmy Carter's White House, now is writing a book on the subject. His article in the April 15 New York Times, and a one-hour sympathetic examination of the evidence on PBS's "Front Line, " shown nationwide on April 16, left little doubt among open-minded readers and viewers that Ronald Reagan campaign officials promised arms and money to Iran to delay release of 52 American hostages until after the Nov. 4, 1980 presidential election.

The Extent of Israel's Role

What both Sick and the program skirted, however, was the extent of Israel's role, not just as sole source of the arms shipments, but perhaps in instigating the deal as well. And, more important, both touched only lightly on the fact that, as "middleman" in the 1980 deal, Israel had the subsequent power to blackmail the Reagan administration, and did. The question this raises is whether that vulnerability to blackmail also extends to President George Bush, who was running as vice presidential candidate on the Reagan ticket at the time the deal was made.

Various parts of the story were reported throughout the summer of 1987 by, among others, Barbara Honegger in In These Times, Christopher Hitchens in The Nation, and Alfonso Chardy in the Miami Herald. This writer, after a September 1987 interview in Paris with Abolhassan Bani Sadr, president of Iran while the hostages were being held and Reagan campaign aides were meeting with Iranian Islamic Republic officials, wrote an extensive report in the October 1987 issue of the Washington Report on Middle East Affairs, and, most recently, in the October 1990 issue.

Background to Treason

Witnesses disagree on many details of the meetings leading up to the deal, which can only be described as treason, but there is amazing consistency, as Sick belatedly notes, in the broad outlines of the story. It begins in the summer of 1980.

Ronald Reagan had been nominated as the Republican Party's presidential candidate. He, in turn, had selected his principal Republican rival, George Bush, as the vice presidential nominee. Inevitably, the fate of 52 American hostages being held in the US Embassy in Tehran by the Islamic revolutionary government of Ayatollah Ruhollah Khomeini preoccupied American voters.

When the hostages were seized in November 1979, President Jimmy Carter had frozen $12 billion in Iranian assets deposited in US banks before the fall of the shah. It was no secret that Carter and Khomeini officials were negotiating the amount of funds to be released in return for the freedom of the embassy hostages, and the amount to be held back to settle claims against Iran by US firms and individuals for contracts cancelled and property seized by the revolutionary government. The Khomeini government especially wanted the Carter administration to release for shipment to Iran arms that had been ordered and paid for by the shah, but frozen in the procurement pipeline by the US.

Initially, Carter had been running behind, partly because a third-party candidacy by liberal Republican Congressman John Anderson was attracting many Democratic voters. Polls, however, showed Carter moving up to a dead heat with the Reagan-Bush ticket by October. Voters were so evenly divided that almost any pre-election development could determine the outcome.

Vice presidential candidate George Bush said publicly that the Republicans feared "an October surprise" by the Democrats. Privately, the Republicans had been informed, apparently by someone on active duty in the military or in US intelligence, that Carter planned a dramatic rescue attempt to free the hostages in Tehran, perhaps similar to the failed "Desert I" helicopter rescue attempt in which eight American servicemen died earlier in the year.

Retired Admiral Robert Garrick, serving in Reagan campaign headquarters, actually coordinated the setting up of a network of active and retired military supporters of Reagan at military bases in the US, Europe and Asia from which such rescue activity might be launched. Members of the volunteer network have admitted publicly that they planned to leak stories of any unusual activity to the media and thus force the Carter administration to give up the attempt.

Israel had the subsequent power to blackmail the Reagan administration, and did.

Those provisions having been made, the only other way that Carter could produce the hostages before election day, and thus create a nationwide euphoria that could swing the election in his favor, was through successful negotiations with the Iranians.

The Story Begins

It is here that the story of illegal dealings with Khomeini intermediaries by Reagan campaign officials begins. Bob Woodward and Walter Pincus of The Washington Post were the first to report that one such meeting took place in Washington, DC. It was held Oct. 2 at the L'Enfant Plaza Hotel. Reagan campaign participants were Richard Allen, subsequently the Reagan administration's first national security adviser; Marine Lt. Col. Robert (Bud) McFarlane, then an aide to Senator John Tower but subsequently also a Reagan administration national security adviser; and Allen aide Lawrence Silberman, who apparently set up the meeting and who presently is a judge on the Federal Court of Appeals in the national capital. A shadowy Iranian Jewish arms dealer, Hushang Lavie, says he was the Iranian principal. Allen says he was not, but that he has forgotten the name of the Iranian they met. Silberman and McFarlane wouldn't discuss the matter with the "Frontline" producers. All three Americans maintain, however, that they have lost any notes they made during or after the meeting.

Sick and the "Frontline" producers say that long before the meeting in the L'Enfant Plaza Hotel there were others, starting in early March of 1980, involving Reagan campaign manager William Casey, a former OSS operative and, subsequently, Reagan's first director of the Central Intelligence Agency. Casey's first meeting was in Washington, DC's Mayflower Hotel with two Iranian arms dealers, Cyrus and Jamshid Hashemi. The brothers, who also were involved in the Iranian dealings with the Carter administration, said Casey made it clear he wanted to prevent Carter from gaining political advantage from freeing the hostages.

Cyrus Hashemi subsequently reported some of this to the CIA before his sudden death in 1986, three months after cooperating with US Customs agents in a sting operation in which Israelis, Europeans and Americans were arrested on charges of conspiring to sell arms illegally. Jamshid Hashemi told Sick and the "Frontline" producers, however, that, after the Mayflower meeting, Casey and an unnamed US intelligence officer met Mehdi Karrubi, now speaker of the Iranian parliament, in Madrid in late July 1980, promising arms and to unfreeze Iranian assets if release of the hostages were delayed until after the election. The same threesome, Jamshid Hasherni said, met again in Madrid several weeks later, and at that meeting Karrubi agreed to cooperate with the Reagan campaign about the timing of the hostage release.

A Third Set of Meetings

There have been many reports about a third set of meetings, between Oct. 15 and Oct. 20, in various Paris hotels. Because literally dozens of witnesses claim knowledge of these meetings, details as to the participants vary. Most agree, however, that Casey was involved. Some claim involvement by CIA agent Donald Gregg, then a Carter administration national security aide and subsequently Vice President George Bush's chief of staff. Gregg, now US ambassador to Korea, says he was on vacation at a Delaware beach throughout the time period involved. He refused to be interviewed by the "Frontline" producers.

A few witnesses also claim to have seen George Bush in Paris, or to have heard from others that he was in Paris at the time of the meetings. These reports have so often and so vehemently been denied that they seem to have no substance. In fact, it is probably the persistence of some investigators like Barbara Honegger in advancing the reports of Bush's involvement that has cast a shadow over the credibility of the entire story, even as verifiable new details of the "October Surprise" continue to surface.

Among Iranians named as participants in the Paris meetings by Americans claiming to be witnesses were Manucher Ghorbanifar, the Iran-born Mossad agent and arms dealer who later played a central role in the Iranscam arms-for-hostages scandal. Former Iranian President Bani Sadr seemed to confirm this when he told the writer that the Iranian participant in the Washington meeting with Allen, McFarlane and Silberman was either Ghorbanifar, Parvis Sabati, or both. Bani Sadr also named four Iranians who backstopped the operation. They included his successor as president of Iran, Mohammad Ali Rajai I and the then-speaker of Parliament and now principal Iranian leader, Ali Akbar Hashemi Rafsanjani.

It was right after the alleged Paris meetings that some witnesses say Israel sent, between Oct. 21 and 23, a shipment of spare parts for F-104s to Iran, flagrantly contravening US rules requiring US approval of any shipments of US-made arms to third parties. The Israelis previously had sent such parts, mostly F-104 wheels, to Iran and had been warned by the Carter administration to stop it in the spring of 1980, according to former Israeli intelligence agent Ari Ben Menache. He also suggested to the "Frontline" investigators that George Bush was involved in at least one meeting between Reagan campaign officials and Iranians. Hushang Lavie said he had "heard" Bush was in Paris at the time of the meeting there. This seems to make clear who it is who now hopes to implicate Bush in the sins of the Reagan campaign officials.

On Oct. 22, the hostages were dispersed to different locations, complicating any attempt at rescue. That indicates Iranians were alerted during the Paris or other meetings to possible Carter plans for a rescue operation. At the same time, Iranian Parliament members began delaying tactics, perhaps to frustrate any financial bargain with Carter administration officials.

The Stories Converge

From this point, all stories about the "October Surprise" that never happened converge. Barbara Honegger, then a Reagan campaign worker, said she was told by a fellow campaign aide that there would be no "October surprise" because "Dick's made a deal. " She assumes the reference was to Richard Allen, but it could also have been to Reagan pollster Richard Wirthlin, who was persistently warning that, in view of the dead heat in public opinion, the hostages could make the difference either way. She has subsequently included all of this in her book,October Surprise. Around the same time, William Casey assured a journalist that if anything happened to help Carter break the public opinion deadlock, it wouldn't have anything to do with the hostages.

Reagan won the election, but Carter officials labored on to make a deal to extricate the hostages. In late December and early January, the Iranians finally made a sudden series of concessions and Carter agreed to release $4 billion of Iran's $12 billion in frozen funds.

Bani Sadr's account lends further credence from the Iranian side to the reports by American witnesses of parallel Republican and Carter administration negotiations. The former Iranian president told the writer that, after the Iraqi attack on Iran in September 1980, he urged the ayatollah to take whatever cash deal the Carter administration was offering, release the hostages, and get on with fighting the war. For a time, however, Khomeini became angry whenever he brought up the subject, Bani Sadr said, insisting that Carter should unfreeze US weapons in the pipeline to Iran, as well as Iran's frozen funds.

Then, suddenly, the ayatollah lost interest in talking to Bani Sadr about weapons, and in fact seemed reluctant to talk to him about the deal at all. Bani Sadr is convinced that when his rivals in the Khomeini government got the promise of arms as well as cash from Reagan campaign officials, Khomeini lost all interest in his government's talks with the Carter administration, and the star of Bani Sadr, who still was pushing the Carter negotiation and still had ties to the West, began to fall.

Carter, meanwhile, kept waiting for the prisoners to be released in response to the cash-only deal he had made. He was still waiting by the telephone throughout his last night in office. He gave up at 6 am, snatched two hours of sleep, and then accompanied his successor to the Capitol steps.

Meanwhile, at the Tehran airport, television footage shows Iranian officials guarding the hostages listening on portable radios to inauguration ceremonies. Exactly 15 minutes after Ronald Reagan took the oath of office, the hostages were released and put on an airplane to fly home. Clearly, it was a signal. At the time, however, no one except perhaps some newly appointed Reagan officials, and some of their Israeli equivalents, knew what it meant.

Arms Follow Hostages

The hostages came home from 444 days of captivity and a very few weeks later in March 1981, Israel signed an agreement to ship arms to Iran. One planeload left immediately. The Washington Post says the shipment was authorized by then-Secretary of State Alexander Haig and was worth $10 to $15 million. Haig denies this, but adds, "I have a sneaking suspicion that someone in the White House winked. " Another report says the weapons sent to Iran were worth $53 million. Still another estimates their value at $246 million.

One aircraft chartered in Argentina and carrying American arms to Iran from Israel crashed in Turkey on July 18, 1981. Bani Sadr says it was the third arms shipment by air from Israel in the first six months of the Reagan administration. In the same month, Bani Sadr, who had broken with the ayatollah, escaped into Turkey with a defecting Iranian pilot in an Iranian Air Force plane. Bani Sadr can furnish no details of further shipments. Israeli Housing Minister and former Defense Minister Ariel Sharon has said repeatedly, however, that all Israeli shipments of arms to Iran during its war with Iraq were sanctioned by the US government. Then-Israeli Ambassador to the US Moshe Arens told the Boston Globe in October 1982 that Israel's arms shipments to Iran were coordinated with the US government "at almost the highest of levels."

A Chilling, Clinching Argument

For doubters who still find it hard to believe that Americans of any political persuasion would, to be elected, enter into a cynical bargain to leave American hostages at risk through the harsh Tehran winter in an unheated embassy while Iranian mobs howled for their blood in the streets outside, there is a chilling, clinching argument in the report of John Anderson, the independent candidate for president in 1980. Officials of his campaign were approached by Iranians who offered them a deal to trade hostages for arms. The Anderson officials said no, and complied with the law by reporting the Iranian overture to the FBI. The FBI received no report of any kind from McFarlane, Allen, Silberman, Casey, or Admiral Garrick, who had been designated the sole Reagan campaign spokesman on all hostage matters.

The idea that Iranians would approach dark-horse Anderson officials, and not approach Reagan campaign officials, is absurd. And, with clearly documented meetings in Washington and murkily documented meetings in Madrid and Paris, wouldn't some member of Reagan's campaign staff have complied with the legal requirement to report to federal authorities an illegal overture about the 52 hostages from Iran, a country with which the US had no diplomatic relations? Perhaps not, if the Reagan campaign staff members to whom the overture had been made had broken the law by accepting it.

So, since there is no hard evidence that Ronald Reagan was informed of it in anyway, what is the significance today of this violation of the law that may have tipped the scales in favor of his election? First, it is a very likely explanation of why, whenever the Reagan administration and the hard-line Israeli governments of Menachem Begin and his successors went eyeball to eyeball, it was always the US that blinked. The US declined to press Begin on such topics as the Golan Heights, East Jerusalem, the invasion of Lebanon, the occupation of West Beirut, the Sabra-Shatila massacres, and even the Reagan Plan for Middle East peace. The Reagan administration apparently was vulnerable to highly damaging Israeli blackmail, and at least some top officials of both governments knew it.

If Israel's disinformation squad has its way, the worst is yet to come.

It also explains how and why the Reagan administration so easily fell into the catastrophic series of arms-for-hostages blunders, clearly instigated as well as carried out by Israel, that became known as Irangate, or the Iran-Contra scandal. The renewed arms shipments in 1985 and 1986 were initiated by reopening exactly the same channels used in 1980 and 1981 by some of the same principals on both, sides.

The Final Significance

The final significance of the story concerns the administration of George Bush, now clearly teetering on the edge of a major initiative to put pressure on Israel for a land-for-peace Israeli-Palestinian settlement. If Bush really was involved personally in illicit Reagan campaign activities to forestall an "October surprise," he would now be so vulnerable to Israeli blackmail that no such political or economic pressure on Israel would be possible, even today. In the more likely event that Bush was not personally involved, clever Israeli agents could work through media leaks to create doubt about his role. This seems to be happening with the televised testimony of Israeli agent Ari Ben Menache, and that of Hushang Lavie, the Iranian arms dealer.

Gary Sick's book, which he expects to finish in a year, clearly is aimed at influencing the 1992 elections in favor of Democratic candidates. Israeli efforts to implicate Bush, however, probably won't wait. If renewed US media attention to the "October surprise" so far has produced no major surprises, stay tuned. If Israel's disinformation squad has its way, the worst is yet to come.

Richard H. Curtiss, a retired US foreign service officer, is executive editor of the Washington Report on Middle East Affairs.

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