Full text of "Report of the congressional committees investigating the Iran- Contra Affair : with supplemental, minority, and additional views"

Y l.l/2:SeriaI 13743

100-1: United States Congr...

Government
Documents

OSiTGRy

*' MAY 2 1I9Q0

BOoTT

100th Congress — 1st Session • January 6-December 22, 1987

Senate Report

No. 216

IRAN-CONTRA INVESTIGATION

APPENDIX B, VOLUME 2
DEPOSITIONS

United States Congressional Serial Set

Serial Number 13743

United States Government Printing Office
Washington : 1989

Union Calendar No. 277
100th Congress, 1st Session
S. Rept. No. 100-216 H. Rept. No. 100-433

Report of the Congressional Committees Investigating the

Iran-Contra Affair

Appendix B: Volume 2
Depositions

Daniel K. Inouye, Chairman,
Senate Select Committee

Lee H. Hamilton, Chairman,
House Select Committee

U.S. Senate Select Committee U.S. House of Representatives

On Secret Military Assistance to Iran Select Committee to Investigate

And the Nicaraguan Opposition Covert Arms Transactions with Iran

November 13, 1987. - Committed to the Committee of the Whole House

on the State of the Union and ordered to be printed.

November 17, 1987. -Ordered to be printed.

Washington : 1988

Bnitd States Senate

; ON SECRET MILITARY
ASSISTANCE TO IRAN AND THE NICARAGUAN OPPOSITION
WASHINGTON, DC 20510-6480

March 1, 1988

HonoreOjle John C. Stennis
President pro tempore
United States Senate
Washington, D.C.

Dear Mr. President:

We have the pleasure to transmit herewith, pursuant to
Senate Resolution 23, Appendix B to the final Report of the
Senate Select Conimittee on Secret Military Assistance to Iran
and the Nicaraguan Opposition. We will submit such other volumes
of Appendices to the Report as are authorized and as they become
available.

ly,

Warren B. Rudman V^

Vice Chairman

III

U.S. HOUSE OF REPRESENTATIVES

SELECT COMMITTEE TO INVESTIGATE

COVERT ARMS TRANSACTIONS WITH IRAN

UNITED STATES CAPITOL

WASHINGTON. DC 20516

(202) 225-7902

March 1, 1988

The Honorable Jim Wright
Speaker of the House
U. S. Capitol
Washington, D. C. 20515

Dear Mr. Speaker:

Pursuant to the provisions of House Resolutions 12 and
330 and House Concurrent Resolution 195, 100th Congress, 1st
Session, I transmit herewith Appendix B to the Report of the
Congressional Committees Investigating the Iran-Contra Affair ,
House Report No. 100-433, 100th Congress, 1st Session.

Appendix B consists of the depositions taken by the
Select Committees during the investigation. The contents of
Appendix B have been declassified fo^-^elease to the public.

United States Senate

Select Committee on Secret Military Assistance
To Iran and the Nicaraguan Opposition

Daniel K. Inouye, Hawaii, Chairman
Warren Rudman, New Hampshire, Vice Chairman

George J. Mitchell, Maine

Sam Nunn, Georgia
Paul S. Sarbanes, Maryland
Howell T. Heflin, Alabama
David L. Boren, Oklahoma

James A. McClure, Idaho

Orrin G. Hatch, Utah

William S. Cohen, Maine

Paul S. Trible, Jr., Virginia

Arthur L. Liman
Chief Counsel

Mark A. Belnick Paul Barbadoro

Executive Assistant Deputy Chief Counsel

To the Chief Counsel

Mary Jane Checchi
Executive Director

Lance I. Morgan
Press Officer

United States House of Representatives

Select Committee to Investigate Covert Arms
Transactions with Iran

Lee H. Hamilton, Indiana, Chairman
Dante B. Fascell, Florida, Vice Chairman

Thomas S. Foley, Washington

Peter W. Rodino, Jr., New Jersey

Jack Brooks, Texas

Louis Stokes, Ohio

Les Aspin, Wisconsin

Edward P. Boland, Massachusetts

Ed Jenkins, Georgia

Dick Cheney, Wyoming, Ranking Republican

Wm. S. Broomfield, Michigan

Henry J. Hyde, Illinois

Jim Courter, New Jersey

Bill McCollum, Florida

Michael DeWine, Ohio

John W. Nields, Jr.
Chief Counsel

W. Neil Eggleston
Deputy Chief Counsel

Kevin C. Miller
Staff Director

Thomas R. Smeeton
Minority Staff Director

George W. Van Cleve
Chief Minority Counsel

Richard J. Leon
Deputy Chief Minority Counsel

VII

United States Senate

Select Committee on Secret Military Assistance to
Iran and the Nicaraguan Opposition

Arthur L. Liman
Chief Counsel

Mark A. Belnick
Executive Assistant
to the Chief Counsel

Paul Barbadoro
Deputy Chief Counsel

Mary Jane Checchi
Executive Director

Lance I. Morgan
Press Officer

Associate Counsels

C. H. Albright, Jr.
Daniel Finn
C. H. Holmes
James E. Kaplan
Charles M. Kerr
Joel P. Lisker

W. T. McGough, Jr.
Richard D. Parry
John D. Saxon
Terry A. Smiljanich
Timothy C. Woodcock

Committee Staff

Assistant Counsels

Legal Counsel
Intelligence/Foreign

Policy Analysts
Investigators

Press Assistant
General Accounting
Office Detailees

Security Officer
Security Assistants

Chief Clerk
Deputy Chief Clerk

Steven D. Arkin*
Isabel K. McGinty
John R. Monsky
Victoria F. Nourse
Philip Bobbitt
Rand H. Fishbein
Thomas Polgar
Lawrence R.

Embrey, Sr.
David E. Faulkner
Henry J. Flynn
Samuel Hirsch
John J. Cronin
Olga E. Johnson
John C. Martin
Melinda Suddes*
Robert Wagner
Louis H. Zanardi
Benjamin C.

Marshall
Georgiana

Badovinac
David Carty
Kim Lasater
Scott R. Thompson
Judith M. Keating*
Scott R. Ferguson

Staff Assistants

Administrative Staff

Secretaries

Receptionist
Computer Center
Detailee

John K. Appleby
Ruth Balin
Robert E. Esler
Ken Foster*
Martin H. Garvey
Rachel D. Kaganoff*
Craig L. Keller
Hawley K.

Manwarring
Stephen G. Miller
Jennie L. Pickford*
Michael A. Raynor
Joseph D.

Smallwood*
Kristin K. Trenholm
Thomas E. Tremble
Bruce Vaughn
Laura J. Ison
Hilary Phillips
Winifred A. Williams*
Nancy S. Durflinger
Shari D. Jenifer
Kathryn A. Momot
Cindy Pearson
Debra S. Sheffield*
Ramona H. Green
Preston Sweet

VIII

Committee Members' Designated Liaison

Senator Inouye
Senator Rudman

Senator Mitchell
Senator Nunn

Senator Sarbanes
Senator Heflin

Peter Simons
William V. Cowan
Thomas C. Polgar
Richard H.
Arenberg
Eleanore Hill
Jeffrey H. Smith
Frederick Millhiser
Thomas J. Young

Senator Boren

Senator McClure
Senator Hatch

Senator Cohen

Senator Trible

Sven Holmes
Blythe Thomas
Jack Gerard
Dee V. Benson
James G. Phillips
James Dykstra
L. Britt Snider
Richard Cullen

Part Time*

Assistant Counsel
Hearings Coordinator
Staff Assistants

Interns

Peter V. Letsou
Joan M. Ansheles
Edward P.

Flaherty, Jr.
Barbara H. Hummell
David G. Wiencek
Nona Balaban
Edward E.

Eldridge, III
Elizabeth J. Glennie
Stephen A. Higginson
Laura T. Kunian
Julia F. Kogan
Catherine L. Udell

Document Analyst

Historian

Volunteers

Lyndal L. Shaneyfelt
Edward L. Keenan
Lewis Liman
Catherine Roe
Susan Walsh

*The staff member was not with the Select Committee when the Report was filed but had, during
the life of the Committee, provided services.

United States House of Representatives

Select Committee to Investigate
Covert Arms Transactions with Iran

Majority Staff

John W. Nields, Jr.
Chief Counsel

W. Neil Eggleston
Deputy Chief Counsel

Kevin C. Miller
Staff Director

Special Deputy

Chief Counsel
Staff Counsels

Press Liaison
Chief Clerk
Assistant Clerk
Research Director
Research Assistants

Charles Tiefer

Kenneth M. Ballen
Patrick J. Carome
V. Thomas

Fryman, Jr.
Pamela J.

Naughton
Joseph P. Saba
Robert J. Havel
Ellen P. Rayner
Debra M. Cabral
Louis Fisher
Christine C.

Birmann
Julius M.

Genachowski
Ruth D. Harvey
James E. Rosenthal

Systems

Administrator
Systems

Programmer/

Analysts
Executive Assistant
Staff Assistants

Catherine L.

Zimmer
Charles G. Ratcliff
Stephen M.

Rosenthal
Elizabeth S. Wright
Bonnie J. Brown
Christina Kalbouss
Sandra L. Koehler
Jan L. Suter
Katherine E. Urban
Kristine Willie
Mary K. Yount

Minority Staff

Associate Minority

Counsel
Assistant Minority

Counsel
Minority Research

Director

Thomas R. Smeeton
Minority Staff Director

George W. Van Cleve
Chief Minority Counsel

Richard J. Leon
Deputy Chief Minority Counsel

Robert W.
Genzman
Kenneth R. Buck

Bruce E. Fein

Minority Staff
Editor/Writer

Minority Executive
Assistant

Minority Staff
Assistant

Michael J. Malbin

Molly W. Tully

Margaret A.
Dillenburg

Committee Staff

Investigators

Director of Security

Robert A.

Bermingham
James J. Black
Thomas N.

CiehanskJ
William A. Davis,

III
Clark B. Hall
Allan E. Hobron
Roger L. Kreuzer
Donald Remstein
Jack W. Taylor
Timothy E. Traylor
Bobby E. Pope

Security Officers

Editor

Deputy Editor
Associate Editor
Production Editor
Hearing Editors

Printing Clerk

Rafael Luna, Jr.
Theresa M. Martin
Milagros Martinez
Clayton C. Miller
Angel R. Torres
Joseph Foote
Lisa L. Berger
Nina Graybill
Mary J. Scroggins
David L. White
Stephen G. Regan
OR. Beckett

Associate Staff

Representative
Hamilton

Representative
Fascell

Representative

Foley
Representative

Rodino

Representative

Brooks
Representative

Stokes
Representative

Aspin

Michael H.

Van Dusen
Christopher Kojm
R. Spencer Oliver
Bert D. Hammond
Victor Zangla
Heather S. Foley
Werner W. Brandt
M. Elaine Mielke
James J.

Schweitzer
William M. Jones

Michael J. O'Neil
Richard M. Giza
Richard E. Clark
Warren L. Nelson

Representative

Boland
Representative

Jenkins
Representative

Broomfield
Representative

Hyde
Representative

Courter
Representative

McCollum
Representative

DeWine
General Counsel to

the Clerk

Michael W. Sheehy

Robert H. Brink

Steven K. Berry
David S. Addington
Diane S. Doman

Dennis E. Teti

Tina L. Westby

Nicholas P. Wise

Steven R. Ross

Contents

Volume 2

Prefoce XXI

Armitage, Richard 1

Artiano, Martin L 405

Associate DDO (CIA) 580

Baker, James A., Ill 671

Barbules, Lt. Gen. Peter 690

Barnett, Ana 736

Bartlett, Linda June 840

Bastian, James H 894

Brady, Nicholas F 1065

Brown, Arthur E., Jr 1077

Depositions

Volume 1

Airline Proprietary Project Officer.
Alvarez, Francisco J.
Allen, Charles.
Arcos, Cresencio.

Volume 2

Volume 3

Armitage, Richard.
Artiano, Martin L.
Associate DDO (CIA).
Baker, James A., III.
Barbules, Lt. Gen. Peter.
Harnett, Ana.
Bartlett, Linda June.
Bastian, James H.
Brady, Nicholas F.
Brown, Arthur E., Jr.

Byrne, Phyllis M.
Calero, Adolfo.
Castillo, Tomas ("W").
Cave, George W.
C/CATF.

Volume 4

Channell, Carl R.

Chapman, John R. (With Billy Ray Reyer).

Chatham, Benjamin P.

CIA Air Branch Chief.

CIA Air Branch Deputy Chief.

CIA Air Branch Subordinate.

CIA Chief.

CIA Communicator.

CIA Identity "A".

Volume 5

CIA Officer.

Clagett, C. Thomas, Jr.

Clark, Alfred (With Gregory Zink).

Clarke, George.

Clarridge, Dewey R.

Cline, Ray S.

C/NE.

Cohen, Harold G.

Volume 6

Collier, George E.

Cole, Gary.

Communications Officer Headquarters, CIA.

Conrad, Daniel L.

Volume 7

Cooper, Charles J.
Coors, Joseph.
Corbin, Joan.
Corr, Edwin G.
Coward, John C.
Coy, Craig R
Crawford, Iain T.R.

Crawford, Susan.
Crowe, Adm. William J.
Currier, Kevin W.
DCM, Country 15.
DEA Agent 1.
DEA Agent 2.
DEA Agent 3.
deGraffenreid, Kenneth,
de la Torre, Hugo.
Deputy Chief "DC".

Duemling, Robert W.
DIA Major.
Dietel, J. Edwin.
Dowling, Father Thomas.
Dutton, Robert C.
Earl, Robert.

Volume 8

Volume 9

XVI

Volume 10

Farber, Jacob.
Feldman, Jeffrey.
Fischer, David C.
Floor, Emanuel A.
Former CIA Officer.
Fraser, Donald.
Fraser, Edie.
Fuller, Craig L.

Volume 11

Furmark, Roy.

Gadd, Richard.

Gaffney, Henry.

Gaffney, Henry (With Glenn A. Rudd).

Galvin, Gen. John R.

Gantt, Florence.

Garwood, Ellen Clayton.

Gast, Lt. Gen. Philip C.

Gates, Robert M.

Glanz, Anne.

Volume 12

George, Clair.
Godard, Ronald D.
Godson, Roy S.
Golden, William.
Gomez, Francis D.
Goodman, Adam.
Gorman, Paul F.
Graham, Daniel O.
Gregg, Donald P.
Gregorie, Richard D.
Guillen, Adriana.

Hakim, Albert.

Hall, Wilma.
Hasenfus, Eugene.
Hirtle, Jonathan J.
Hooper, Bruce.

Volume 13

Volume 14

XVII

Hunt, Nelson Bunker.
Ikle, Fred C.
Jensen, D. Lowell.
Juchniewicz, Edward S.
Kagan, Robert W.
Keel, Alton G.
Kellner, Leon B.
Kelly, John H.
Kiszynski, George.

Koch, Noel C.
Kuykendall, Dan H.
Langton, William G.
Lawn, John C.
Leachman, Chris J., Jr.
Ledeen, Michael A.

Leiwant, David O.
Lilac, Robert H.
Lincoln, Col. James B.
Littledale, Krishna S.
McDonald, John William.
McFarlane, Robert C.
McKay, Lt. Col. John C.
McLaughlin, Jane E.

McMahon, John N.
McMahon, Stephen.
McNeil, Frank.
Makowka, Bernard.
Marostica, Don.
Marsh, John.
Mason, Robert H.

Meese, Edwin IIL
Melton, Richard H.
Merchant, Brian T.
Meo, Philip H.
Miller, Arthur J.
Miller, Henry S.
Miller, Johnathan.

Volume 15

Volume 16

Volume 17

Volume 18

XVIII

Miller, Richard R.

Motley, Langhorne A.
Mulligan, David P.
Nagy, Alex G.
Napier, Shirley A.
Newington, Barbara.
North, Oliver L.
O'Boyle, William B.
Osborne, Duncan.
Owen, Robert W.
Pena, Richard.
Pickering, Thomas.
Poindexter, John M.

Posey, Thomas V.
Powell, Gen. Colin L.
Price, Charles H., II.
Proprietary Manager.
Proprietary Pilot.
Radzimski, James R.
Ramsey, John W.
Ransom, David M.

Volume 19

Volume 20

Volume 21

Volume 22

Raymond, Walter, Jr.

Regan, Donald T.

Reich, Otto J.

Revell, Oliver B.

Reyer, Billy Ray (See John Chapman).

Reynolds, William B.

Volume 23

Richard, Mark M.
Richardson, John, Jr.
Robelo, Alfonso.
Robinette, Glenn A.
Rodriguez, Felix I.
Roseman, David.

XIX

Rosenblatt, William.

Royer, Larry.

Rudd, Glenn A.

Rudd, Glenn A. (See Henry Gaffney).

Rugg, John J.
Russo, Vincent M.
Sanchez, Nestor.
Scharf, Lawrence.
Schweitzer, Robert L.
Sciaroni, Bretton G.
Secord, Richard V.

Shackley, Theodore G.
Sigur, Gaston J.
Simpson, Major C.
Sinclair, Thomas C.
Singlaub, John K.

Slease, Clyde H., IIL
Smith, Clifton.
Sofaer, Abraham D.
Steele, Col. James J.
Taft, William H., IV.
Tashiro, Jack T.
Teicher, Howard.
Thompson, Paul.
Tillman, Jacqueline.

Volume 24

Volume 25

Volume 26

Volume 27

Thurman, Gen. Maxwell.

Trott, Stephen S.

Tull, James L.

Vessey, John.

Walker, William G.

Watson, Samuel J., IIL

Weinberger, Caspar.

Weld, William.

Wickham, John.

Zink, Gregory (See Alfred Clark).

Preface

The House Select Committee to Investigate Covert Arms Transactions with Iran
and the Senate Select Committee on Secret Military Assistance to Iran and the
Nicaraguan Opposition, under authority contained in the resolutions establishing
them (H. Res. 12 and S. Res. 23, respectively), deposed approximately 290
individuals over the course of their 10-month joint investigation.

The use of depositions enabled the Select Committees to take sworn responses
to specific interrogatories, and thereby to obtain information under oath for the
written record and develop lines of inquiry for the public hearings.

Select Committees Members and staff counsel, including House minority
counsel, determined who would be deposed, then sought subpoenas from the
Chairmen of the Select Committees, when appropriate, to compel the individuals
to appear in nonpublic sessions for questioning under oath. Many deponents
received separate subpoenas ordering them to produce certain written documents.

Members and staff traveled throughout the United States and abroad to meet
with deponents. All depositions were stenographically reported or tape-recorded
and later transcribed and duly authenticated. Deponents had the right to review
their statements after transcription and to suggest factual and technical correc-
tions to the Select Committees.

At the depositions, deponents could assert their fifth amendment privilege
to avoid self-incrimination by refusing to answer specific questions. They were
also entitled to legal representation. Most Federal Government deponents were
represented by lawyers from their agency; the majority of private individuals
retained their own counsel.

The Select Committees, after obtaining the requisite court orders, granted
limited or "use" immunity to about 20 deponents. Such immunity means that,
while a deposed individual could no longer invoke the fifth amendment to avoid
answering a question, his or her compelled responses -or leads or collateral
evidence based on those responses -could not be used in any subsequent criminal
prosecution of that individual, except a prosecution for perjury, giving a false
statement, or otherwise failing to comply with the court order.

An executive branch Declassification Committee, located in the White House,
assisted the Committee by reviewing each page of deposition transcript and some
exhibits and identifying classified matter relating to national security. Some
depositions were not reviewed or could not be declassified for security reasons.

In addition, members of the House Select Committee staff corrected obvious
typographical errors by hand and deleted personal and proprietary information
not considered germane to the investigation.

In these Depositions volumes, some of the deposition transcripts are follow-
ed by exhibits. The exhibits— documentary evidence- were developed by Select
Committees' staff in the course of the Select Committees' investigation or were
provided by the deponent in response to a subpoena. In some cases, where the
number of exhibits was very large, the House Select Committee staff chose for
inclusion in the Depositions volumes selected documents. All of the original

XXI

exhibits are stored with the rest of the Select Committees' documents with the
National Archives and Records Administration and are available for public in-
spection subject to the respective rules of the House and Senate.

The 27 volumes of the Depositions appendix, totalling more than 30,000 pages,
consist of photocopies of declassified, hand-corrected typewritten transcripts
and declassified exhibits. Deponents appear in alphabetical order.

XXII

Publications of the Senate and House
Select Committees

Report of the Congressional Committees Investigating the Iran-Contra Affair,
1 volume, 1987.

Appendix A: Source Documents, 2 volumes, 1988.
Appendix B: Depositions, 27 volumes, 1988.
Appendix C: Chronology of Events. I volume, 1988.
Appendix D: Testimonial Chronology, 3 volumes, 1988.

All publications of the Select Committees are available from the U.S.
Government Printing Office.

XXIII

mmm

1 DEPOSITION OF RICHARD ARMITAGE

2 Tuesday, May g^e , 1987

3 • United States Senate

4 Select Committee on Secret

5 Military Assistance to Iran

6 \ and the Nicaraguan Resistance

7 Washington, D.C.

8 Deposition of RICHARD ARMITAGE, a witness

9 herein, called for examination by counsel for the

10 Committee, pursuant to notice, the witness being duly

11 sworn by ANNE P. HOROWITZ, a Notary Public in and for the

12 District of Columbia, at 219 Hart Senate Office Building,

13 Washington, D.C, at 1:08 p.m. on Tuesday, May 26, 1987,

14 and the proceedings being taken down by Stenomask by ANNE

15 P. HOROWITZ and transcribed under her direction.

PwlUly Oadwificd/Released on ^/^^^ /'2 /f'^^
under provisions of LO. 12356
-hi D. Sirko, National Security Council

upk$sue

(1)

82-690 0-88-2

UNCUSSiES

1 APPEARANCES :

2 On behalf of the Senate Select Committee:

3 " JOHN SAXON, Esq.

4 C. H, ALBRIGHT, JR., Esq.

5 Associate Counsel

6 On behalf of the House Select Committee on Covert

7 Arms Transactions with Iran:

8 JOE SABA, Esq.

9 ROGER KREUZER, Esq.

10 On behalf of the witness:

11 LINCOLN BLOOMFIELD, Esq.

12 Special Assistant to the Assistant Secretary

13 of Defense for ISA

14 EDWARD SHAPIRO, Esq.

15 Assistant Counsel, Department of Defense

UNClASSlEiED

uHcyissiFa

N T

Deoosition of

Examination by counse;

RICHARD ARMITAGE

By Mr. Saxon

By Mr. Saba

E X

H I

ARMITAGE EXHIBIT NUMBER

FOR

IDENTIFICATION

uNimiffifl

ilNCUSSIRED

1 ^^ PROCEEDINGS

2 (Witness sworn.)

3 • Whereupon,

4 RICHARD ARMITAGE

5 was called as a witness by counsel for the Committees

6 and, having been first duly sworn, was examined and

7 testified as follows:

8 EXAMINATION

9 BY MR. SAXON:

10 Q Mr. Secretary, would you state your name for

11 the record?

12 A Yes, my name is Richard Lee Armitage.

13 Q What is your current position?

14 A I am currently the Assistant Secretary of

15 Defense for International Security Affairs.

16 With your permission, could we get on the

17 record the level, et cetera?

18 Q Yes. This deposition is cleared at the top

19 secret-Codeword level, and we do expect to have some

20 classified material as deposition exhibits and as topics

21 for discussion. And we will pursue the normal DOD

22 channels for the declassification issue if we choose to

23 use any of this. •**

24 A Thank you.

25 Q How long have you been in that position?

oodcr provisions cf CO. ir.
kjr 0. Mlo, National tecuv^/

mmm

UNCIASSIRED

1 A Since approximately May of 1983.

2 Q Let me ask now that the first deposition

3 ■ exhibit be marked, and that simply is a copy of what I

4 understand to be your most recent biographical sketch

5 provided by your office?

6 A This is correct.

7 (The document referred to was

8 marked for identification as

9 Armitage Exhibit No. 1.)

10 Q Would you state for us generally your duties

11 as Assistant Secretary?

12 A In general, I have the responsibility from the

13 Department of Defense for inter-agency coordination

14 between the Department of State, the National Security

15 Council, the Central Intelligence Agency, for policy

16 matters.

17 In addition, I have the responsibility to

18 advise the Secretary of Defense on policy matters

19 involving the Department of Defense for all countries of

20 the world outside of NATO Europe. I have additional

21 duties which I received approximately in May of 1986 in

22 the SOF, Special Operating Forces, and counter-terrorism

23 areas.

24 Q And you are responsible for the military

25 aspects of U.S. policy pertaining to all countries except

UNetASStflED

wsjssm

1 for NATO, is that correct?

2 A NATO Europe, right.

3 " Q You served, I believe, in Vietnam?

4 A I did.

5 Q What was the nature of that service?

6 A My first tour was as damage control assistant

7 on a destroyer off the coast of Vietnam. My second tour

8 was as an advisor to a coastal group, Vietnamese coastal

9 group, the ambush team advisor.

10 My next tour was senior advisor to River

11 Patrol Division 54 on the Vietnam-Cambodian border. My

12 third tour was as advisor to coastal group 21 in II

13 Corps.

14 Q In May of 1975, you returned to the Pentagon

15 as a consultant?

16 A Actually, in roughly April of 1975 I returned,

17 in the final days before the fall of Saigon. I was

18 invited to participate in those events.

19 Q And where principally were you located in your

20 consulting services?

21 A I served for the final week in Vietnam. I

22 then served in Washington from approximately the middle

23 of May until, asl remember it, the late fall. And I was

24 primarily engaged in the refugee resettlement projects.

25 And then in late fall through at least the

ONGtimED

mmm

1 first half of 1976, I was in and out of Teheran, serving

2 as a consultant to the defense representative, Teheran.

3 • Q In your current assignment, to whom do you

4 report?

5 A To the Under Secretary of Defense for Policy,

6 Dr. Fred Ikle, and through him to the Secretary.

7 Q Mr. Secretary, if you would walk us through

8 your involvement with the Iran initiative stage of the

9 Iran-contra affair, and that is, I principally have in

10 mind the draft NSDD that Mr. McFarlane sent to Secretary

11 Weinberger and to Secretary Shultz in mid-1985, your

12 role, et cetera.?

13 A As I recall, in approximately June of 1985 I

14 received a draft NSDD with a cover note from Mr.

15 McFarlane. The cover note was addressed to the Secretary

16 of State and the Secretary of Defense, and asked for

17 their comments on the draft NSDD. And the Secretary had

18 written his own remarks on a little buck slip.

19 This was forwarded upstairs to me, and I put

20 together a response to that draft NSDD, the thrust of

21 which, as I remember, was I don't disagree with the need

22 to develop a more congenial relationship with Iran, but

23 we did not believ'6 that arms sales by ourselves or

24 allowing third countries to engage in arms sales was the

25 way to do it, nor did the Secretary of Defense feel that

UNCttSSIRED

^mmm

X he could develop a more congenial relationship with the

2 present regime.

3 • That is, as long as Khomeini was alive the

4 Secretary didn't feel that there was much use in pursuing

5 this.

6 Q His handwritten note, I believe that's the

7 statement in which he said this is almost too absurd to

8 comment on, is that right?

9 A He said also that it's like asking Quadafi for

10 a cozy lunch, approximately those words.

11 Q My understanding is that in the course of

12 drafting a response to that draft, there was a

13 disagreement between you and Dr. Ikle over a couple of

14 points in terms of what should be in the Secretary's

15 response.

16 I'd like to have this marked as Deposition

17 Exhibit 2.

18 (The document referred to was

19 marked for identification as

20 Armitage Exhibit No. 2.)

21 Q This is a memorandum to the Under Secretary of

22 Defense for Policy, who I believe would be Dr. Ikle. It

23 is dated 13 July '1985. I believe it is from you.

24 I will give you a moment to take a look at it,

25 and I am principally concerned here about the first page

uiwtASsm

UNGIASSKKD

1 and principally —

2 A Just let me read it.

3 - (Pause.)

4 A Okay.

5 Q I am principally concerned about the point

6 that you make in the full paragraph that begins "Second,"

7 and you're telling Dr. Ikle: "I left in the

8 recommendation to keep pressure on our allies to cease

9 transferring military equipment to Iran. Although we

10 have had some successes to date, maintaining, if not

11 strengthening, our initiative is one of the few steps we

12 can take to try to bring an end to the Iran-Iraq War.

13 And if the war were to end, many of the pressures causing

14 Iran to seek assistance would cease.

15 "Therefore, I believe we should not omit this

16 initiative."

17 And then you go on to recommend which copies

18 should be forwarded to the Secretary, and that which

19 contained your language was in tab A, and the handwritten

20 note at the top indicates that Dr. Ikle forwarded the

21 version in tab B, which did not include this language.

22 Was there any oral discussion between you and

23 Dr. Ikle on this point?

24 A There may have been. I don't recall.

25 Q Do you know or recall what his reasons may

\mmm

uNcussmi

1 have been for not wanting to include this point?

2 A If 1 understand, if I remember correctly, th«

3 . only point of difference was whether it was post-Khomeini

4 or not. And I don't know — it strikes me that he had a

5 good understanding of the Secretary and did not want —

6 didn't think the Secretary would be interested in

7 anything with the present government. That's the only

8 thing I recall.

9 Q I believe the version which went forward also

10 left out the language about Operation Staunch and keeping

11 pressure on our allies not to ship arms to Iran?

12 A I'd have to check tab B.

13 (Pause.)

14 A Well, if this is tab B, it keeps in the point

15 about stopping arms.

16 Q Okay.

17 A I believe that was the only point of

18 difference there could have been, whether it was post-
19 Khomeini or present, not on the staunching of the arms,

20 as I remember.

21 Q If you would, then, continuing in a

22 chronological fashion, after the draft NSDD involvement

23 where you were mote or less staffing and transmitting,

24 what happened next in terms of your involvement?

25 A I don't recall any further discussion on this

mmm

UNGUOKD

1 subject. I never saw anything more of the NSDD, never

2 heard anything more of it. And roughly in November, I

3 returned from a trip to Pakistan and somewhere else, and

4 either the Secretary someone else had indicated to me

5 that they had a feeling there were some discussions going

6 on with Iran. And_ they wanted me to find out, If I

7 could, what was going on.

8 Q And this would have been when, as best you can

9 date it?

10 I A Late November. I got back 24th or 25th,

11 roughly, of November. It was approximately that time

12 frame that they mentioned this to me.

13 I nosed around as best I could, finally

14 decided to invite Ollie North for a luncheon in my

15 office. I have subsequently determined that the date of

16 that was 3 December.

17 I did have lunch with Ollie and asked him if

18 anyone had been meeting with the Iranians. And he told

19 me that he had. I made some comments about this to

20 Ollie, and then I reported this verbally to the

21 Secretary.

22 Q What can you tell us about the nature of the

23 comments you mad6~to Colonel North?

24 A As best I remember, I told him that I knew my

25 boss, I felt my boss, didn't know anything about it. I

mmm

uncussibedj

1 didn't think the Secretary of state knew anything about

2 it. I thought he was way out of line. I think I used

3 • the term that his ass was way out on a limb and that he

4 ought to get everyone together quickly to discuss this

5 problem.

6 Q Did you say something along the lines of, he

7 needed to get the » l aiii ew% « together?

8 A That's a term I often use. That's basically

9 the recollection.

10 Q And that means the principals — Secretary

11 Weinberger, Secretary Shultz, the National Security

12 Advisor, et cetera?

13 A Yes, and the President.

14 Q Do you have any information which would lead

15 you to believe that the December 7 meeting among the

16 principals ojr the elephants was a result of this

17 recommendation to Colonel North?

18 A I can only state that Colonel North had a

19 great respect for Secretary Weinberger, and I can

20 remember that he was quite shocked at the strength of my

21 statement to him.

22 I can't say that the December 7 meeting was a

23 direct outcome of~this. It was just my recommendation to

24 him to get them together, the elephants together, as soon

25 as possible.

wmmm

1 . . Q What did he tell you was the reason for this

2 initiative or these discussions or the meetings that he

3 had had with the Iranians?

4 A I've thought about it a lot. I can't quite

5 remember what he told me the reason was.

6 Q Did he mention a broader strategic concern, or

7 was it more directly related to hostages, or both, or can

8 you recall?

9 AX can't recall, I just can't recall.

10 Q Did you make any notes of your meeting?

11 A No, I did not.

12 Q A memoranda for the record?

13 A No, I did not. I

14 Q Did you meet with Secretary Weinberger prior

15 to the December 7 meeting?

16 A Yes, I did.

17 Q And was anyone else present at that meeting?

18 General Powell?

19 A My recollection is that General Powell was

20 there. I don't think anyone else was there. I can't

21 even be sure about General Powell, but he was almost

22 always present.

23 Q And who initiated that meeting?

24 A I can only imagine that it was probably

25 General Powell, speaking for the Secretary.

mmma

UKGIASSIBED

1- „^ Q And what do you recall saying?

2 A I recall that prior to the meeting I had

3 " strategized, prior to meeting with the Secretary. But

4 after being informed that there was going to be some sort

5 of meeting that weekend, strategizing with my colleagues

6 at State how best to stop what we understood was going to

7 be an item for discussion, that is the provision of some

8 sort of arms to Iran.

9 Q And would that have been —

10 A Particularly with Mr. Raphel, Arnie Raphel,

11 who at that time was the principal deputy assistant

12 secretary for Near East, South Asia. And the thrust of

13 our discussions was that we felt it would be most

14 effective if Secretary of State Shultz and Secretary of

15 Defense Weinberger could have a very united front on this

16 issue.

17 We felt quite secure in speaking for our

18 bosses because we both knew our bosses' minds on this

19 subject, and we wanted them to approach the President

20 with roughly the same arguments, hoping that there would

21 be some resonance.

22 Q And in those discussions with Mr. Raphel, was

23 it your impression he already knew about this initiative,

24 or did you have to bring him up to speed?

25 A I can't guite remember, but I know that when

wmm

UNCUSSIIKD

1 the Secretary or General Powell had asked me to see If I

2 could find out something about somebody talking to the

3 ■ Iranians I also checked in with Arnie Raphel, who is an

4 excellent bureaucrat and I figured he'd know everything.

5 He was getting vibes, but he, at least to me,

6 couldn't put his fj.nger on anybody. So I'm quite sure

7 after I spoke with Ollie that I also informed Arnie of

8 the fact that Ollie had been meeting with the Iranians.

9 Q So you talked with him regularly?

10 A Daily.

11 Q Going to the December 7 meeting —

12 A Even today.

13 Q — did you and General Powell meet to

14 strategize before that meeting with the Secretary?

15 A I don't recall meeting with him to strategize

16 before that.,

17 Q In that meeting, can you tell us what each

18 party said, what the nature of the discussion was?

19 A In general, I reminded, I guess is the proper

20 word, the Secretary of Defense of the down sides of this

21 initiative. I needed not remind him, because he was

22 quite vocal and outspoken on all of the reasons why this

23 would be bad.

24 I believe that I gave him a one or two page

25 sheet of information on the Arms Export Control Act, I

UNCbtSSiED

IWSSIEIED

1 think developed out of a conversation with Mr. Raphel and

2 myself. At least that information, if not the sheet

3 ' itself, was also going to be provided to George Shultz,

4 so they both would be acting on the same wavelength.

5 We talked about — and either I would make the

6 point or the Secretary would make the point, and we'd

7 develop it, provision of any arms to Iran could be seen

8 as bargaining for hostages; the fact that we had enormous

9 equities in the Gulf and that all of our other friends

10 would be terribly concerned with any opening to Iran that

11 hasn't been thought about and talked about with them.

12 And number three, that Operation Staunch was

13 something that both he and George Shultz had been very

14 outspoken about, and we were leaning on our allies all

15 over town and all over the world to stop sales of even

16 questionable^ systems to Iran. And here it would turn out

17 that we were engaged in the same thing, and we would look

18 awfully stupid.

19 The Secretary, to my remembrance, also
2 questioned whether it would be legal or not.

21 Q What can you recall about the nature of any

22 statement he made in that regard?

23 A I just"remember the discussion being about

24 legality. I can't remember any specific statement that

25 he made.

WUSSIEIED

lElASSiED

1 Q Was there any discussion about notification of

2 the Congress that we were to ship arms to Iran?

3 • A The sheet that I gave him, if I remember

4 correctly — I don't have it — had some of the facets

5 surrounding Hill notification. So if he didn't talk

6 about it, I believe something was contained in the sheet.

7 Q Would these have been dollar thresholds for

8 when notice was required?

9 A Dollar, there was a dollar ceiling on one

10 sale. I forget if it's $25 or $50 million limit of a

11 major defense sale, and then a one item limit. So there

12 were two aspects to it. They were both basically

13 dollars.

14 Q And they would have been $50 million in one

15 case and 14 inthe other?

16 A I think it was 50 and 14. I don't remember if

17 it was 25 and 14 or 50 and 14.

18 Q Was there any discussion of whether U.S.

19 approval before the fact needed to be given if any third

20 parties were involved in shipping arms, or were third

21 parties not discussed at that point?

22 A I can't recall that third parties were

23 discussed at that~meeting.

24 Q What would you have stated at that time as

25 your understandino of bothL U^-iiaiicy and U.S. law with

wmsuB

regard to arms sales to Iran? And I understand you're

2 no£ a' lawyer and I'm not asking you to make a legal

3 » judgment, but as a policymaker?

4 A I will tell you what I would have responded as

5 to policy. Our policy was to embargo all arms to Iran

6 and to try to force them and the Iraqis back to the

7 status quo ante of 1979, before the war started; and to

8 try to limit the export of Islamic fundamentalism from

9 Iran.

10 Q Regarding the law, if the U.S. were to sell

11 weapons to Iran, I would have said that this would not be

12 in consonance with our laws, as we had an embargo.

13 MR. SABA: Mr. Secretary, I want to pursue a

14 moment the policy at the time of Operation Staunch. How

15 was this Operation Staunch communicated by the Department

16 of Defense to our friends, allies, world in general?

17 THE WITNESS: First of all, it was

18 coordinated, and there was actually a coordinator in the

19 Department of State. It was Dick Fairbanks when it first

20 started, and then Bill Schneider took it over, and they

21 had the lead for this.

22 We went out as a matter of State cables to all
2 3 of our posts arouftd the world to announce our policy in

24 Operation Staunch, and then members of the Administration

25 — the Secretary -Of JSefense,. the Secretary of State, or

wm%ii

\imssm

1 myself as a Defense person — in traveling, meeting with

2 foreigners, when the subject would either arise or we had

3 reason to believe somebody was engaged or about to engage

4 in an arms sale, we would preempt and put in front of

5 them our own policy, Operation Staunch, and tell them why

6 we thought this was the proper policy and try to persuade

7 them as best we could not to engage in arms sales.

8 This was also enunciated in a series of

9 speeches and referred to in speeches by Administration

10 officials for several years,

11 BY MR. SABA:

12 Q Do you recall when that policy began?

13 A Dick Fairbanks was in the job. It was right

14 after the Lebanon experience. I would say '83, '84,

15 probably '84.

16 Q Did you travel between that time and, let's

17 say, the end of 1985 to various countries explaining that

18 policy?

19 A Not specifically to explain that policy, but I

20 did travel to various countries. And for instance ,^^^^|
^^^^^^^^^^^^^^^^^H^^^^Hor some country

22 be engaged in selling not just weapons, but dual use

23 items, jeeps or something — we would certainly, or I

24 would certainly, have put in front of them our policy.

25 ^H,t^ I^id jiQt^ci^a^jjarticular trip #to sell

\imssM

1 that particular policy.

2 Q But during your trips, do you recall incident's

3 ' in which you did explain that policy to them?

4 A Yes, I do. And there were foreign visitors

5 into my office.

6 Q Do you recall what countries these were?

7 A Well, I can remember having discussions with
jjj^^^^^^^^^^^^^^^^H remember hearing

9 about it from other colleagues, discussions with the

10 European allies.

11 I remember -- in fact, we continue right now

12 to have these discussions with

13 Q Excuse me. Do you mean —

^^^^^^^^^^^^^^^^^^^^^^^H excuse

15 I think all of our Arab friends, whether I

16 visited there or they visited me in the Pentagon, were

17 interested in this. And I would absolutely have spoken

18 to them about it.

19 Q Do you recall in the period commencing at the

20 beginning of this policy but ending in 1985 visiting any

21 of the Arab capitals and in the course of those meetings

22 discussing it?

23 A I don''t remember it specifically, but I did

24 visit Arab countries and was in the capitals. But I

25 don't remember specifically talking this policy.

IINetAS«D

\immm

Q During 1985, particularly the last three
months, do you recall any conversations with friends,
allies, indicating to you personally that they had
knowledge of American arms shipments?

A Over the past several years, no, I can't
remember those thr_ee mon ths specifically. But I had

f r o m H^H^^^^^^^^^^^^^^H A r a b
they felt that the Iranians were getting outside supplies
of weapons, and in general those countries were putting
the blame on Israel.

Q Did they indicate that these arms were
American arms, American origin arms?

A They indicated they were outside aj

They also, the Arabs in general, would speak
about the ability of the Iranians to keep their aircraft
in the air and think that these parts must have come from
the United States, but generally through Israel. But the
impact of what they were telling me was that Israel, they
felt, was doing this, not the United States.

Q Was th?re any discussion at that time
specifically of TOW or Hawk parts?

A Not that I remember.

UNeiit^m

UNCUiSW

1 . Q So you would say, then, that it was fair to

2 state that our public policy, as well as our internal

3 policy, was expressed in Operation Staunch?

4 A That's correct.

5 Q And was opposed to sales, whether by us

6 directly or by our allies?

7 A That's correct.

8 Q And it was correct that during that period,

9 had a nation which acquired arms from us, it would have

10 required our advance permission to transfer those arms to

11 any third party?

12 A That's my understanding. It's called a third

13 country transfer.

14 Q And had there been a request to make a

15 transfer to Iran, what would your position have been?

16 A The Secretary of Defense would have opposed

17 it, I would have too. The Department would have opposed

18 it.

19 BY MR. SAXON: (Resuming)

20 Q Whose permission is required?

21 A The Secretary of state has the cognizance of

22 those things. In general terms, it would be hard to

23 believe that the Secretary of State, over the strenuous

24 objection of the Secretary of Defense, would okay

25 something like that without presidential approval.

wtmim

UttGUSSIlD

X Q Am I correct in understanding that the statute

2 givss the authority to the President, but that by

3 executive order he has delegated it to the Secretary of

4 State?

5 A I would have to review that, but that is my

6 understanding, yes. But I don't know the mechanics.

7 BY MR. SABA: (Resuming)

8 Q Did we communicate back to the American public

9 our policy? Was that part of your duty?

10 A Yes.

11 Q How was that done?

12 A Generally, in speeches, public discussions, Q

13 and A's, radio.

14 Q And these speeches were made inside the United

15 States?

16 A Yes.

17 BY MR. SAXON: (Resuming)

18 Q Anything that you can tell us about your

19 discussions with Secretary Weinberger prior to the

20 December 7 meeting when you and General Powell met with

21 him to brief him?

22 A Well, I say I think General Powell was there.

2 3 I know I was there, but that's basically it, other than I

24 must say he totally and completely opposed the policy.

25 MR. KREUZER: Was Dr. Ikle there?

uttcranED

UNCLASIP

1 THE WITNESS: No.

2 * '* " MR. KREUZER: But he is the primary policy

3 » maker?

4 THE WITNESS: He is the Under Secretary for

5 Policy.

6 MR. KREUZER: So he was aware of all of this

7 and read into all of this?

8 THE WITNESS: I don't feel he was aware of all

9 of it. My understanding is that he was not aware of this

10 and the finding. None of us were until some time later.

11 I think that after he signed forward the answer to the

12 draft NSDD, that Dr. Ikle was not involved in this.

13 That's my remembrance, until late in '86.

14 I know I brought him into the loop.

15 MR. KREUZER: But normally, being a policy

16 question, wouldn't this go down to the special assistant

17 staff, who looks at policy questions, and be fed up to

18 the Under Secretary?

19 THE WITNESS: No, they don't do policy

20 questions. They do covert actions. You're talking about
21

22 BY MR. KREUZER: (Resuming)

23 Q Okay. -"But would it go down to Under Secretary

24 Alderman?

25 A Deputy Under Secretary Alderman, it could if

l)NttAS«D

UNCiissra

1 the Under Secretary designated it.

2 Q Then would it normally go to Dr. Ikle?

3 A That's right.

4 Q Well then, would this be a departure from

5 normal procedures? Would this amount to a departure from

6 normal procedures?

7 A It amounts to the Secretary of Defense telling

8 me to handle this with extraordinary sensitivity, and

9 that's what I did. If you say is that the way things are

10 normally handled, no, it is not. But they are normally

11 handled the way the Secretary of Defense wants.

12 Q So if it weren't what he regarded as an

13 extremely sensitive situation, then it might have gone to

14 Alderman?

15 A I would have assumed that would have been the

16 case.

17 BY MR. SAXON: (Resuming)

18 Q Did Secretary Weinberger tell you this was an

19 especially sensitive matter, with close hold, et cetera?

20 A Yes.

21 Q In that session?

22 A Yes, either there or the time before, when he

23 asked me to nose -Iround to see if anybody was talking to

24 Iran. But he said, this is very sensitive.

25 Q After the December meeting at the White House,

mmm

lEliiSSIEliD

1 didr* Secretary Weinberger at some point upon returning

2k fill you in on what had transpired?

3 A He filled me in to the extent that he and

4 George, George Shultz, had made very strong

5 representations to the Secretary — excuse me, to the

6 President — and that he. Secretary Weinberger, felt that

7 the initiative was dead. I have used a term to describe

8 it that is a term of his. He said: We have strangled

9 the baby in its cradle.

10 Q No doubt in your mind, and apparently in the

11 Secretary's that at that point the initiative was dead?

12 A There was no doubt in my mind.

13 BY MR. SABA: (Resuming)

14 Q Did you have any knowledge at that point that

15 there had been transfers to Iran of American arms by the

16 Israelis?

17 A I don't recall any knowledge of that at all at

18 that time.

19 BY MR. SAXON: (Resuming)

20 Q Did anything transpire from that point on this

21 issue forward until January?

22 A Not that I recall.

23 Q Did yoQ report any of what Secretary

24 Weinberger told you to anyone else?

25 A In general terms, to Arnie Raphel. And I

mmmi

WMWi

1 think basically, and I don't remember at all ray words,

2 • but I think it would have been, I think we got past this

3 one.

4 Q And did he convey Secretary Shultz's

5 impression of the meeting?

6 A No, I don't remember him characterizing George

7 Shultz's impression, but he gave me the impression that

8 that's the way he felt. He Arnie gave me the impression

9 that that's the way he felt, that we were past this and

10 that it was behind us.

11 Q So what would you say would be the next point

12 that you would have any involvement at all in this?

13 A In January I was informed that the Secretary

14 was going to another meeting, another one of these

15 meetings to discuss the initiative, which I don't believe

16 we called the initiative. We just called it the Iran

17 deal or whatever.

18 I believe I checked with Colin Powell to see

19 if there was any need for me to do anything, and he said,

20 no, the Secretary was armed. I think we had a

21 conversation, but it was a rehash of our previous

22 conversation.

23 Q You said the Secretary was armed. With what?

24 A The knowledge that he had before, that it was

25 still good.

mmm

ut%y^(iB

1 Q And when the Secretary went to the January 7th

2 meeting, were you later filled in on what transpired?

3 A I don't remember being — well, I wasn't

4 filled in on what transpired at that meeting until much

5 later. But some time later that month or in early

6 February, I was informed that weapons were going to go to

7 Iran.

8 Q When was the first point at which you recall

9 having been informed that the weapons went pursuant to a

10 presidential finding?

11 A I don't remember hearing about the finding

12 until somewhat later. But some time — and my

13 recollection is in February — General Powell told me

14 about TOW'S going, and this was that the President had

15 decided. And so —

16 Q Are you able more precisely to date it?

17 A No, I am not. I attempted to get a lot

18 smarter when I was called upon to be the Department's

19 witness in the initial hearings around these events, back

20 when Mr. Casey first testified. And at that time I had

21 learned more about the dates things went forward, I mean

22 things actually moved from the Army to the CIA.

23 But since I wasn't in that loop, it really

24 didn't matter to me. I was informed in general terms

25 that another trenche was going each way through the year

IINettS«D

\^mssm

1 of '86 each time a trenche went.

2 BY MR. SABA: (Resuming)

3 • Q Excuse me. When you say another trenche, do

4 you mean you had been informed that one had gone?

5 A No, I was informed in February of a trenche,

6 and then some time later I was informed of another

7 trenche, and another trenche, and then finally I think

8 the last one was in November, the third or the fourth

9 trenche, the announcement that I knew about.

10 BY MR. KREUZER: (Resuming)

11 Q The second one went when, roughly?

12 A Well, I have given you all the documents I

13 have, but I just don't have the dates in my mind. I was

14 in general terms informed after they went.

15 MR. SAXON: Let me have you mark that as the

16 next exhibit.

17 (The document referred to was

18 marked for identification as

19 Armitage Exhibit No. 3.)

20 BY MR. SAXON: (Resuming)

21 Q And what I am showing you, Mr. Secretary, is

22 an NSC document. Do you see on it the number in the

23 first page, N-303153? That is the Senate Select

24 Committee's.

25 A You have a different one. It's 9131. Do we

UNliti^Fe

udciASsn

1 have the same document.

2 (Pause.)

3 ■ A Ves, okay.

4 MR. SAXON: I'm sorry. Let's go off the

5 record for a second.

g (Discussion off the record.)

MR. SAXON: Back on the record.
This is a chronology prepared by the National
security Council. You see, I believe, at the top, it
says "Historical Chronology," and the date is 11/20/86.
j_j_ THE WITNESS: Correct.

■^2 BY MR. SAXON: (Resuming)

j_3 ■ Q If you would, look to page 30371.

14 A All right.

15 Q And look at the last full paragraph and let me
Ig give you a moment to read that.

17 (Pause.)

Q I am not going to ask you to vouch for the
accuracy of that statement, but it says, in terms of
these transfers, the shipment of th e Army TOW's from
to the CIA^^^^^^^ it

"Policy level coordination for these
arrangements was-iffected by NSC (North) with DOD

24 (Armitage) and CIA (Clair George)

5 Dof« this mean that you were involved in some

UNtlASSiED

1 coordination for the logistics of these shipments?

2 A No, it only means to me that if things are

3 ■ going to move 01 lie would tell me. I was involved in no

4 way with any of the coordination of the logistics.

5 Q Wouldn't it be your best judgment that this is

6 simply an incorrect and inaccurate statement?

7 A I don't know that it's so inaccurate. I was

8 the policy level guy who knew about this, but never

9 talked about logistics with our services or anybody else.

10 Policy level, yes, I was the policy guy in the

11 Pentagon who knew about it the program. But I had no

12 logistics activity whatever.

13 Q Let me say, in response to a question by Mr.

14 Shapiro, that this is not something the meeting prepared.

15 This Is an NSC chronology bearing the date of November

16 20, 1986.

17 Mr. Secretary, what would you say would be the

18 first time you learned about the issue of U.S.

19 replenishment of Israeli TOW's stocks?

20 A I have thought myself, I believe the first

21 time I learned about Israel providing weapons and we

22 repaying Israel was when Mr. Casey testified in November.

23 I think that's thi first time I really knew of it.

24 Q November of '86?

25 A That's right.

uNOuissra

1 Q ■ And there were no discussions at the Pentagon

2 » to which you were a party?

3 A Now, I have seen a paper in the documents we

4 turned over to you which discussed either Hawks or TOW's

5 for Iran, but I wasn't involved in the development of

6 that. I saw it some time later.

7 The first time I knew that I remember was when

8 Casey testified up here, I believe.

9 Q That would be the point paper, as it was

10 denominated, that Dr. Gaffney prepared at the request of

11 either Colin Powell or Noel Cook in '85?

12 A Yes, that's right. I saw that paper some time

13 later.

14 Q Dr. Gaffney did not make you aware of that?

15 A No, I don't think Dr. Gaffney made me aware of

16 it.
Q Mr. Rudd?
A I think some time later in the year Glenn made

me aware of the point paper. I think that's when I saw
it. I am not sure of the dates.

Q Did you meet on January 2nd of 1986 with Major
General Menachem Meron of Israel to discuss replacement

23 of Israeli TOW's By the United States?

24 A I don't remember. I might have met with him.

25 I don't remember^fe^iijg^njt^at^ubject,

TNffim

^mmm

1 Q So your best recollection would be that you

2 did not discuss that subject?

3 ■ A My best recollection is I did not, though I

4 could have met with Mendy, Mendy Meron.

5 Q Given your stated feelings fairly clearly

6 about the wisdom of U.S. policy in terms of arms to Iran,

7 direct or indirect, and your statements about Operation

8 Staunch, do you think that you would recall if you had

9 discussed with General Meron that issue?

10 A I think so.

11 Q And if it were his statement that you did have

12 such a discussion, that wouldn't change your

13 recollection?

14 A I would say that I don't remember it and I

15 don't recall it.

16 Q Let me ask you a couple of questions about the

17 readiness issue in terms of the provision of the TOW's to

18 Iran. I assume readiness is something the Pentagon is

19 fairly concerned about?

20 A Yes.

21 Q Has anyone given you a status report or made

22 you aware of whether Army funds have been replenished for

23 those sales which~went forward for the purchase of TOW's

24 to replenish DA stocks?

Wtmm

iitmsm

1 Q And what would be your understanding, that

2 those moneys have been made available?

3 A My understanding is that the great majority of

4 ' those moneys were made available. It appears that the

5 Army in some fashion undercharged to some degree, and my

6 understanding was that the Secretary of Defense had asked

7 that we recoup that shortfall.

8 Q I guess the question is this. Would it

9 surprise you, then, to find out today, more than a year

10 after the first shipment went forward, that there is

11 still $5.6 million that has not been made available to

12 the Army to buy TOW missiles with?

13 A If what you're saying is that the CIA still

14 owes 5.6, it would surprise me.

15 Q Ko, the CIA has provided funds and, in

16 whatever way they work their way down the channels in the

17 Pentagon or the DA, they have not been made available to

18 the people at Micom who actually purchase TOW missiles.

19 A It would seem to me that's a long time.

20 Q Did you have any involvement at all on the

21 Hawk repair parts issue?

22 A None that I recall.

2 3 Q Let me~go back to the issue of a presidential

24 finding and have you address your discussions at whatever

25 period you had them with Secretary Taft and Secretary

UNgkAtiMD

OiUS^ED

1 WelTiberger on the issue of presidential finding. I

2» believe you did have a discussion in April of '86 with

3 Mr. Taft?

4 A No, I didn't. But we, the Secretary of

5 Defense and I, were on a trip at that time in the

6 Pacific. Mr. Taft^was involved in calling forward, I

7 think, another trenche of weapons. He has, Mr. Taft has,

8 told me subsequently — and this was in the past several

9 months — that at that time he asked to see a

10 presidential finding and was shown what he was told was

11 one by John Poindexter.

12 Q Where was that?

13 A In John Poindexter 's office.

14 This was not communicated to me at the time,

15 in April. This was when I was preparing to come to the

16 Hill.

17 Q I understand. And your understanding of that,

18 does it extend to whether Secretary Taft informed

19 Secretary Weinberger that he had seen the finding?

20 A This is — again, I've been told this in the

21 past several months, that Mr. Taft said he had indicated

22 that to the Secretary during the phone call, the phone

23 conversation. But I don't think the Secretary recalls it

24 at all, and I was not privy to that conversation.

25 Q When would that have been dated, roughly?

^mssm

mmssm

1 A April.

2 Q Were you party to a discussion or conversation

3 * with Secretary Weinberger after these matters began to

4 become public over this issue of when the Secretary might

5 or might not have been made aware of the finding?

6 A Yes.

7 Q Tell us about that?

8 A The Secretary, as I recall, in November of '86

9 was called to the White House, and he had a finding read

10 to him. He specifically mentioned to me that it was read

11 to him, because he said he had not seen it, actually seen

12 it.

13 I think it was published in the New York Times

14 or somewhere, but it was read to him.

15 Q And this would have been when?

16 A November '86, to my memory.

17 Q As these matters were reaching a —

18 A While they were unfolding, but they hadn't

19 blossomed. I mean, the leaks were out there and

20 certainly there was a lot of scurrying around. We were

21 getting ready to go to the Hill and I was asking the

22 Secretary, do you know anything about a finding? And he

23 said: I've never^seen one.

24 And I asked: Did we participate in it, in the

25 formulation of it. And he said, not to his knowledge.

umssm

UNGIASSIFIED

1 That's also true of me. So that's basically what I

2 remember.

3 • Q Did you recall telling him at some point,

4 either in that session or shortly thereafter, what you

5 had learned from Secretary Taft about him having read the

6 finding?

7 A Yes, or Mr. Taft was there, one or the other.

8 Q And I believe you told —

9 A The Secretary can't remember that, as far as I

10 know. He just said, I don't remember that.

11 Q I'm not trying to put words in your mouth or

12 in his, but tell me if this is more or less what you

13 recall. You told us when we interviewed you something

14 along the lines of that Mr. Taft said to Secretary

15 Weinberger: But I read it back in April and informed you

16 about it. At which point the Secretary said, oh really?

17 Does that sound right?

18 A Yes. Whether it was "Oh really," I don't

19 remember that, whether it was Taft that told me. But

20 Taft might have been there, I think, at this discussion

21 with the Secretary when this came up.

22 Q Are there any other points on the arms to Iran

23 that you think we~need to cover that we have not done?

24 A I would be pleased to try to answer any points

25 that you have.

uNetAsstfe

\immm

1 MR. SABA: I have a few things.

2 BY MR. SABA: (Resuming)

3 " Q Okay. In a moment I want to walk through a

4 couple of points in the statement that you made to§ the

5 DAIG.

6 A To the who?

7 Q To the Department of the Army IG, on the

8 pricing issue.

9 Has there ever come a time when you talked

10 about the replenishment issue or the TOW's which Israel

11 transferred in 1985?

12 A I don't remember it. I don't recall it, I

13 don't recall knowing about it.

14 Q Would you have normally come to know about it

15 in the course of business?

16 A I would have hoped so.

17 Q Did you know anything about the 100 TOW's —

18 I'm sorry, the 100 Hawks, which were in the pipeline to

19 Israel and which were being shipped about November 20th,

20 1985?

21 A I knew about that in 1986, late '86, because I

22 think we asked, I asked, DSAA, what's our latest Hawk

23 deal, when's the last time we sold anything to Israel of

24 TOW magnitude or Hawk things. And I think I was told

25 there were some Hawk missiles, there was a normal

Mmm

\immm

1 transaction in '85, a normal notified transaction, et

2 cetsra, et cetera.

3 " But I didn't, to my recollection, know that

4 until some time as we were roughly either preparing for

5 the Hill testimony in late November of '86 or even later

6 than that.

7 Q When you learned of — when did you say you

8 learned of the '85 transfers?

9 A I didn't know about the Hawk. There was

10 something about when the Secretary asked me or Powell

11 asked me to go investigate, to see if I could find out if

12 someone was talking to the Iranians, there was also, it

13 seemed to me, some intel at the time that mentioned

14 missiles.

15 We didn't understand very much, but it was all

16 part and parcel of, we were trying to figure out who was

17 talking to the Iranians.

18 Q This was intel that you picked up from^^^^^

21 other.

22 Q Okay. I'd like to hear more about it.?

23 A Well,-^hen I say I knew something about

24 missiles, I didn't know what it was or what context or

25 whose they were.

mmm

UNtlASSiED

1 ^^ BY MR. SAXON: (Resuming)

2 Q When you had lunch with Colonel North on

3 December 3rd, 1985, he didn't tell you that the Israelis

4 had made some shipments to Iran?

5 A I don't recall him telling me that.

6 BY MR. _SABA: (Resuming)

7 Q So there came a time when you did know at

8 least of the TOW transfers in '85?

9 A No, I don't remember knowing of the TOW —

10 Q In '86?

11 A Yes, in '86, but not to Israel. To Israel,

12 the best of my recollection, I became aware of this when

13 Bill Casey testified and Mike Armacost and I were sitting

14 in with him. That's the first time I remember knowing

15 about it.

16 Q Just so I understand, the first time you

17 understood about the Israel transfers of TOW's was when

18 Bill Casey provided that information in his testimony?

19 A To the best of my recollection, that's right.

20 Q This strikes me as, it would have bothered me,

21 I think. In view of all of the public positions you had

22 taken in Operation Staunch in 1985, perhaps in early '86
2 3 and before that, what was your reaction to that?

24 A I hoped it was the same reaction as the

25 Secretary of Defense. We hated it. We hated the

: Defense. We hated it.

mmm

i provision of weapons. There was never a doubt in anybody

2 in Defense's mind that this was a bad policy.

3 * . Q Did it strike you as unusual that you didn't

4 know?

5 A After being in government a while, it strikes

6 me as less unusual. Yes, I would have hoped I would have

7 known about this going to Israel, but I can't recall it.

8 Q I am obviously trying to understand how the

9 Assistant Secretary views a policy, having publicly gone

10 to allies and friends and our own people and upheld one

11 policy, and having heard a year later that while you were

12 out talking about one policy the reverse was in fact

13 happening?

14 A Well, part of the time we knew the reverse was

15 happening, we were still talking about Operation Staunch.

16 In my case, from February of '86 we continued to talk

17 about Operation Staunch.

18 But each time I know for myself, or I can

19 imagine for the Secretary of Defense, we didn't like it

20 because we realized the other hand was providing some

21 quantities of weapons to Iran. So we thought it was very

22 hypocritical. We hated it.

23 The hope was, at least as the Secretary of

24 Defense has reconstructed this to me, that in some time

25 along the line of this policy — that is, as we were

Lne or tnis policy — rna

wmmm

1 providing these weapons the Secretary, as he stated it,

2 would find an opportunity to stop the policy of providing

3 weapons to Iran and we wouldn't have lost ground in

4 Operation Staunch in the meantime.

5 MR. KREUZER: Mr. Secretary, in your

6 conversations with Secretary Weinberger, do you ever

7 recall him saying words to the effect that the Israels

8 are sending lethal equipment or sending arms or equipment

9 to Iran and they've got to knock that stuff off?

10 Do you ever remember hearing anything like

11 that?

12 THE WITNESS: Well, I can recall not only the

13 Secretary of Defense, but the Secretary of the State in

14 the past having made what we call demarches to the

15 Israeli officials about provision of Israeli equipment to

16 the Iranians.

17 And we had made several representations to the

18 Israelis. The Secretary of Defense has made some, I have

19 made some, George Shultz had made some. And generally we
2 receive the same answer: governmental policy forbade

21 that.

22 MR. KREUZER: Would that be U.S. -made Israeli

23 equipment — in other words the equipment that we sold

24 them?

25 THE WITNESS: It was not specified. It was

UNGbtSSm

(iNtUSSIFe

1 the Israelis were selling equipment. It was never

2 specified that I know to be U.S. equipment. It was that

3 ■ the Israelis were engaged in airms sales.

4 MR. KREUZER: But the Secretary would mention

5 this from time to time?

6 THE WITNESS: Yes. He'd mention it whenever

7 visitors came, Israeli visitors.

8 MR. KREUZER: Did he like talk about it in '85

9 or '84 or '86?

10 THE WITNESS: I'd like to say yes on all of

11 the above. I know that it was pretty much a regular

12 feature of many of his discussions with the Israelis.

13 You see, they had a different view of the Iran-Iraq war.

14 They generally held the view that if these two continued

15 banging away at each other that it was good for Israel.

16 We felt it was bad for the world because

17 things could happen like the Stark. Instability couldn't

18 be contained and the Secretary would make his point that .

19 we've got to all stop any dealings with Iran, whoever.

21 MR. KREUZER: So the Secretary then must have

22 felt very acutely about this whole business when he was

23 apparently at this meeting on the 7th — what was it, the

24 7th of January — and then there was one in December.

25 THE WITNESS: I am quite sure he did.

mmm

UNCussra

1 MR. KREUZER: But how did, like when the word

2 came through, I presume, from Admiral Poindexter — I'm

3 just guessing; correct me if I'm wrong — that the word

4 came through at some point and they said, okay, this

5 first shipment of TOWs are going to go to Iran, and this

6 is the order. How did that come through; do you know? I

7 mean, who talked to whom?

8 THE WITNESS: No. I have asked the Secretary

9 and I believe he told me that John Poindexter told him

10 the President has decided that he, the Secretary, inform

11 General Powell to get with the Army to have some TOWs

12 transferred to the Central Intelligence Agency.

13 MR. KREUZER: So did blow up then?

14 THE WITNESS: Well, I wasn't there.

15 BY MR. SABA: (Resuming)

16 Q That was approximately February 1986?

17 A I was told approximately February. I don't

18 know when.

19 Q But from that time forward, through '86,

20 Operation Staunch remained our publicly-stated position?

21 A Yes, it did.

22 Q Did you have occasion in 1986 to receive

23 information from foreign leaders that we were

24 transferring arms directly or indirectly to Iran,

25 complaints, information, inquiries?

Mmm

uimsm

1 A We continued to get complaints about — it was

2 generally focused as Israeli sales to Iran. At one time,

3 - in late ' 86, ^^^^^^^^^^^^H told me that he thought the

4 Iranian recent successes in the battlefield were not

5 attributed as much to weapons but to new training and

6 tactics, and I said, what does that mean. And he just

7 smiled and my impression was that he felt the Israelis

8 were involved in making the Iranians a little smarter on

9 the battlefield. But I have no knowledge that that was

10 the case.

11 So the answer is, I guess, yes, from time to

12 time we got indications that Arab countries felt that

13 Israel was continuing ta sell weapons. I can't remember

14 getting told that the. U.S. was doing this.

15 Q Did the Kuwaitis make any complaints; do you

16 recall?

17 A I can't recall.

18 Q Do you recall in '86 whether you or anyone at

19 your direction made any speeches in the United States

20 concerning Operation Staunch?

21 A Well, my deputies give speeches qui€e often,

22 and I do, too. And it oftentimes comes up in Q and Xs

23 and things of that nature. So I don't remember

24 specifically saying go out and hit Operation Staunch.

25 But it was a part of our policy and generally would come

imiinissra

1 up'trom tine to time.

2^ Q So you'd say even after February '86 it

3 remained the Department of Defense's public policy?

4 A It remained the Administration's public

5 policy.

6 Q To oppose transfers or sales to Iran?

7 A That's correct.

8 BY MR. SAXON: (Resuming)

9 Q May I have that marked, please, as Exhibit

10 Number 4?

11 (The document referred to was

12 marked Armitage Exhibit

13 Number 4 for identification.)

14 This is a copy of your sworn testimony to the

15 Inspector General team for the Department of Army on 24

16 December 198$, provided to us by DOD. There are a couple

17 of questions I have just based on some things that you

18 stated. I want to make sure I understand what was meant,

19 or, in a couple of cases, to just see if in fact this is

20 how you still feel.

21 If you would look first on page 3 — and the

22 pages are numbered at the bottom — the portion that I

23 have marked, and I'll give you a second to read that.

24 (Pause.)

25 A

vmmm

1 ^^ . Q This simply has reference again, as we have

2 already talked about, to the draft NSDD from Mr.

3 McFarlane to the Secretary and has you telling the

4 investigators "I did have some comments for the

5 Secretary, the thrust of which was we would be willing to

6 enter a dialogue with Iran, number one, and under no

7 circumstance could we conceive of arms sold by the United

8 States or indeed lifting of our embargo."

9 As best as you can recall, that's a correct

10 statement?

11 A Yes.

12 Q And that's how you still feel?

13 A Yes.

14 Q Okay. Let me get you to look on page 4, eUaout

15 halfway down, through this full paragraph. There is a

16 sentence in which you said: "I know the Secretary of

17 Defense was very suspicious that this might not be

18 legal."

19 A Un-huh.

20 Q As best as you can recall, is that how you

21 felt? Is that what you understood to be the Secretary's

22 position?

23 A Yes. 'l thought that he did have strong

24 feelings about legality.

25 Q Let me get you to look, if you would, at the

UNWm

UdCUiSW

1 tojB^Qf page 5, your first full answer there. I'll give

2^ you a moment to read that paragraph, particularly the

3 last two-thirds of it.

4 (Pause.)

5 A Yes. All right.

6 Q Let me ask you, if you would, to expand on

7 that a bit. We know that you have already indicated that

8 you were either out of town or out of the country at one

9 point and General Powell needed some information, as you

10 say here, on HAWKs, and he went to individuals in DSAA,

11 either Dr. Gaffney —

12 A I think he went to Mr. Koch and then Koch to

13 Gaffney, but I have put that together subsequently.

14 Q All right. In your statement here it says:

15 "When I came back, DSAA had made me aware that they had

16 provided to General Powell some information on HAWK

17 missiles." Do you recall who would have told you that?

18 A No, I can't remember. Someone said Rudd here

19 today, and it could have been.

2 Q As you say there, "My best remembrance is

21 November-December '85 on that." So at some point in that

22 time frame you were apprised of what?

2 3 A That A~ point paper had been done on HAWK. I

24 actually frankly think it was later than November-

25 December. It was after I got back from Pakistan and

It was after I got iJaf JL 1

DNCkASSIFliS

1 somewhat after the paper had been provided to General

2 Powell.

3 Q Okay. If you would, look down to the next

4 full paragraph where you were responding to Colonel

5 Morton. Just take a moment and read that, if you would,

6 sir.

7 (Pause.)

8 A All right.

9 Q I believe we just addressed this a moment ago,

10 but let me see if I can get you to recall anything with

11 any greater clarity. I know we are asking you to look

12 back in time, but it was your judgment that Secretary

13 Weinberger said that he was made aware that the President

14 wanted this either by the President or by Admiral

15 Poindexter?

16 A That's correct. I am now more of the opinion

17 that it was John Poindexter who called the Secretary, but

18 if the Secretary could come in tomorrow and say it was

19 the President it would be the same to me. And the reason

20 that I say I'm somewhat more sure is because I obviously

21 in the last six or seven months have had many more

22 conversations with the Secretary on this subject, so I am

23 getting more sure?

24 Q And when approximately do you think that would

25 have been conveyed to you by Secretary Weinberger?

UNWStflED

UHliUSSIFJED

\ A That was after things started to become

2 palAic, and I was trying to in a hurry get smart so I

3* could come up here and be reasonable in front of the

4 Committee.

5 Q Okay. If you would, sir, look at the next

6 page, page 6. Youare asked a question here. If you

7 would look at your answer there (indicating) —

8 A Yes.

9 Q You state that "sporadically during the year I
10 heard either from vice Admiral Jones or Mr. Taft that

H there were other shipments." Now Vice Admiral Jones

12 would be Admiral Donald Jones who took General Powell's

13 place as the Secretary's military assistant?

14 A That's correct.

15 Q And Mr. Taft the Deputy Secretary. So is it

16 your sense from this statement that periodically from

17 time to time you would hear that other shipments had gone

18 forward?

19 A Yes, it is.

20 Q Would that have been limited to the TOWs or

21 would you have also been apprised about HAWKs?

22 A I don't remember specifically hearing about

23 the HAWKS. I think it was just shipments. From my point

24 of view, frankly, it didn't matter because I wasn't

25 involved in any of the arrangements.

UNcyssinEB

^ . Q I'd like for you to look at page 10. About

2 harfVay down the page there's a question that begins,

3 > "Sir, when we talked to General Powell," and goes on to

4 say "he thought". General Powell thought, "we should talk

5 to you and to Admiral Jones.

6 The investigator says: "Baaed on your

7 knowledge, sir, do you think it would be beneficial for

8 us to talk to Mr. Taft?" And you say that you think it

9 would. Is that your recollection?
10 A Yes.

^^ Q And as far as you know did they ever talk to

12 Mr. Taft?

13 A I can't say.

1* Q Would you tell us why you thought it would be

15 important that they might want to see Secretary Taft?
1^ A My understanding was — and again this was

17 after all the revelations were out and I was involved my

18 own self in trying to piece together what happened —

19 first of all he, Mr. Taft, played in this issue when the

20 rest of us were out of town, number one, so he had a

21 part, and, number two, that I either saw something, some

22 document or some note or something, memo, to the Deputy

23 Secretary or I waS informed that perhaps Mr. Marsh or

24 General Wickham had spoken to him — to him, Taft —

25 around the VfilA4in%Qe^od. So I thought it was

mmm

dNClASSiED

1 essential that they do see him to get a full picture.

2 Q Let me now ask you to take a look at

3 « Deposition Exhibit 5, which is a chronology supplied, as

4 you can see, by Ambassador-Designate Raphel on his

5 knowledge of the Iran arms transfer issue.

6 (The document referred to was

7 marked Armitage Exhibit

8 Number 5 for identification.)

9 I think this would be Arnie Raphel, who was at

10 State. Again, I'm not going to ask you to vouch for the

11 accuracy of anything that is in here, but I would like

12 you to look, if you would, at the page of the chronology

13 itself that is numbered page 2.

14 At the top you see November 24. You can see

15 that each date he has numbered in the various notes and

16 entries and so forth. If you would look at the December

17 3 entry, it says "Assistant Secretary Armitage told me

18 that Colonel North had said that he would be made the

19 scapegoat if the operation goes wrong, but that we have

20 lost little by trying."

21 Is that generally an accurate statement; do

22 you recall?

23 A I don't really recall that, but Arnie 's very

24 good. He's very precise.

25 Q Do you recall Colonel North telling you that?

mmm

muwm

■I A No, but I do recall Ollie being very shocked

2 when I said how much the Secretary would hate all this,

3 and in that context it makes sense to me, but I don't

4 remember that statement.

5 Q The next sentence, again from Mr. Raphel's

6 chronology, "Reportedly, Colonel North added that the

7 Iranians involved are disreputable." Do you recall him

8 making that statement to you,. Colonel North?

9 A I don't think he used that word. I think he

10 used somewhat more colorful language — some people think

11 they are dirtballs or something like that. But that's

12 Ollie.

13 Q Do you recall conveying that to Mr. Raphel?

14 A No, I do not recall it, but I'm sure I did

15 because I shared a lot with Arnie. He was my major

16 contact on Middle East issues.

17 Q Let's go off the record a second.

18 (A discussion was held off the record.)

19 BY MR. SAXON: (Resuming)

20 Q Mr. Secretary, if you would look again at page

21 2 of Mr. Raphel's chronology, he says: "On Decemb er 6 I

22 was told that the operation involved trading arms^^^H

23 ^^^^^^^H and '^hat there was a need to replace 3,300

24 I-TOWs in Israel." Now he states later that he cannot

25 recall whether you may have provided him that information

UNttiWED

UNOASSIBED

1 or the information in the next entry for December 6,

2 which is "my notes reflect that I was given information

3 on the provisions of the Arms Export Control Act and how

4 they applied to arms transfers."

5 Would you have a judgment as to which of these

6 you might have talked to him about?

7 A I don't think I gave him thel

8 thing. On the AECA, the Arms Export Control Act,

9 provisions, I know I did discuss that with Arnie.

10 Q And would it have been about December 6?

11 A Oh, yeah. It was in preparation —

12 Q For the December 7 meeting?

13 A Yes. I remember having discussions on the

14 Arms Export Control Act with Ami*.

15 Q Let me ask you, if you would, to turn to the

16 top of the next page, page 3. There is a December 13

17 entry.

18 A Yes.

T/*e ComfrkTitz'^ NcrrE6 vWrfJCrf- !^;e^tpj a^f

19 g And in M% ne^a c, T i rhioh ni-o en ttm page

20 ^ numbered S-003494, if I could get you to look that over.

21 A I've got this, Raphel's notes. State.

22 Q Yes. And then *n^m a quotation. Ha says:

23 "Raphel thinks Armitage told him this." Let me get you

24 to look at both the December 13 entry and the one on page

25 - • ■ - ^- •

UNUttSMD

uNCmSSIPIED

3
4

5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

whether you might have told him any of this.

A There is no December 13 on page 2. Page 3?

^ Yes, sir. ^-f^ connmvTTE e »-'O^H\}

A I don't think on page S-003494^that I am the
one who told Arnie Raphel at Ollie North hostage meeting
last night, because I was not a member of the OSG at that
time. So I don't believe that was me.

Q Okay. If you would look under the February 5
entry on page 3 still --

A Got it.

Q It says: "I was told that we w ere attempting
^^^^^^^^^^^^^^m^^^^^^^^^^H" Then
you look to| tho came pa g e , under February 5, it says:
"This information came from Armitage, according to
Raphel 's best guess, because Armitage 's initials appear
next to it. His note was that

A I would guess that's me. If you are
interested, we had had some trouble periodically with^H

on this Iranian
caper. At one time we felt at the Department of Defense
that we were cut off. State apparently was still cut
off. I was keeping Arnie informed. I don't remember
that conversation, but it would have been something I
would have shared with Arnie.

UNCI:AS«D

UNCIASSIEIED

Q I was going to ask you about that. Let me at
th\3 juncture do it. It was your statement, I believe, '■

was out^^^^^^^^^^^^^^^^^in terms
Iran at some point; is that correct?

A My understanding is that OSD was cut out, but
that Admiral Moreau of the Joint Chiefs of Staff for some
reason still got his copy and occasionally shared it with
Powell and the Secretary. And this was what I think had
tickled the Secretary's nose that there was something
going down with Iranians.

Q Do you have a sense as to how that came to be
or who was responsible for cutting all of OSD?

A I don't know who did it. I got a sense the
direction came from the NSC.

Q Do you have in mind who might have done that?

A No. Well, there are three or four suspects,
but I don't know.

Q Okay. Going back to Mr. Raphel's chronology,
on page 3 again, the February 12 entry, he says: "I was
told that David Kimche and the Israeli MFA was no longer

involved in the arms sales operation." ^On_i,
ha al^l!iirii.'W»Ks on the February 12 entry, -he sa y fe; "This
information came either from Ken Quinn or Armitage", and
the notes simply say "Arms to Iran, Kimche out." Do you
know whether that i4iqh^«.ta.v/>aJy#ritf rom you?

imM

UNtLASSra

1 A I don't think it was me, and the reason I say

2 ■ that is because I knew David Kimche from the Lebanon days

3 and referred to him as the owl, and I'd have almost

4 certainly said something like that to Raphel. It's the

5 owl.

6 Q Let me ask you, if you would, to look at the

7 final entry on page 3 of July 24, where Mr. Raphel says:

8 "I was told that Mr. Ledeen contended he established the

9 original contacts with Israel to set up the arms

10 transfers and that this was done with Mr. McFarlane's

11 permission. The purpose to arrange for a more moderate

12 regime in Tehran and to do so while Khomeini was still

13 alive. The Iranian response was to ask for arms."

14 Now in ht e e f a S S Ci i Vtn n on July 24 it says

15 "Raphel thinks this came from Armitage, who got it from

16 Ledeen or North." Do you know whether you might have

17 been his source for that?

18 A June 24?

19 Q July 24.

20 A Excuse me, July. No. The reason I say I

21 don't think it was me, I dialed into Michael Ledeen

22 somewhat later in the year, so I don't think this came

23 from me. But that's consistent with what Ledeen told me

24 later in the year, I must say.

2 5 Q Okay. This completes my references ^o this

ut«t;i:ftl)^intO

liMASsra

1 dqcwment and I appreciate your helping us to try to make

2 sense of that.

3 ■ Mr. Secretary, let me ask you a bit about the

4 OSG. We've talked about it and you've made reference to

5 it. Exactly what was the OSG?

6 A The OSG was a small cell established in the

7 White House, the Operations Subgroup of the Terrorist

8 Incidents Working Group, the TIWG. It consisted of

9 membership in the Department of Defense, the FBI, CIA,

10 NSC, and the Department of State, and it was established

11 in the wake of the Holloway Report on Terrorism. It was

12 to be a mechanism that could reach to principals very

13 quickly, not having to go through all sorts of

14 bureaucratic machinations to get quick answers for c[uick-

15 developing situations.

16 Q Was there a point at which any of its

17 discussions focused on arms to Iran or arms for hostages,

18 as best you recall?

19 A As best I recall, in several of the meetings

20 there were inferences by one or another participant to

21 this, not directly. I don't remember it coming out as a

22 direct discussion in front of the OSG of this program.

23 But various members of the OSG had various parts of the

24 puzzle and either on the margins of an OSG meeting or in

25 a reference across the table at an OSG meeting there was

UNiiUiSSIFe

UNCUkSSIEe

! generally what I would call a disparaging remark asked

2 about the policy of providing arms to Iran.

3 > It was never a subject that I remember from my

4 participation in the OSG of an OSG meeting.

5 Q Do you recall who might have made that

6 disparaging remark?

7 A I remember making some. Bob Oakley had made a

8 couple. Later Jerry Bremmer made some remarks.

9 Q Who replaced Ambassador Oakley?

10 A Who replaced Ambassador Oakley. I don't

11 believe unless someone was witting of the whole program

12 that they were remarks that made sense to the whole

13 group .

14 Q But they were remarks along the line of why

15 are we saying this, given what we are doing?

16 A Or this sure is stupid to spend all this time

17 talking about how strict we are on our no-ransom, when on

18 the other hand we're doing something else. But a remark

19 and then gone.

20 Q Was there a time when General John Hollering,

21 the JCS representative, asked you what the heck everybody

22 was talking about?

23 A There Oas a meeting in the summer and, as I

24 remember, there was a little bit more chatter around the

25 table than usual. I felt somewhat bad, and I can't

mmmi

missm

1 r<aaoinber if John asked me in the car going back or I felt

2 so bad I raised this to John Hollering, but I said there

3 are some things you ought to know, and I gave him a very

4 general outline, that we were indeed providing some

5 weapons to Iran.

6 Q This would have been approximately when —

7 late June or early July of '86?

8 A I would say it was July, but it was summer.

9 Q And what was General Hollering 's position?

10 A He was appalled.

11 Q I'm sorry, what was hit —

12 A He was Assistant to the Chairman.

13 Q Of the Joint Chiefs?

14 A Of the Joint Chiefs of Staff.

15 Q And as best you know that was his first

16 knowledge of this?

17 A Yes.

18 Q And was Admiral Crowe, the Chairman of the

19 Joint Chiefs, knowledgeable at that time, as far as you

20 know?

21 A My understanding was that General Hollering

22 had returned and made him knowledgeable.

23 Q Now t6~the question you were about to answer.

24 What was General Hollering 's reaction when you informed

25 him of this?

mmsm

unCLMP

9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

- • . A To the best of my recollection, he was
appalled or disbelieving.

Q Now how do you know that he informed his boss.
Admiral Crowe?

A In the workup again to testimony after the
program had been made public this came to light.

Q That he had told Admiral Crowe and it had also
come to light that Admiral Crowe had gone down to see, or
up, or wherever to see Secretary Weinberger?

A He went up to see the Secretary, and this also
came to light as we were preparing for testimony.

Q Before I ask you on the issue of readiness
about the TOWs, let me ask you a guestion or two about
the HAWKs. Have you been made aware at any point, either
at the time or subseguent to the shipment of the HAWK
repair parts, about the readiness impact data that was in
front of the Army policymakers when they were trying to
decide whether to meet the requirement to the CIA?

A No.

So you would not be aware,

2
3 »

9
10
11
12
13
14
15
16
17
13
19
20
21
22
23
24
25

A I was not aware.

Q And have you been made aware of this prior to
today?

A No.

Q Do you recall an OSG meeting in the afternoon
around the time of the Attorney General's press
conference, or shortly thereafter, in which a statement
was being prepared for President Reagan and it was
circulated in which President Reagan was going to comment
on and explain these matters, and it was circulated and
then there was apparently some reaction to it that was
fairly strong?

A Yes, I do.

Q Tell us about that meeting.

A It was in late afternoon, my recollection was
around 1600, as most of the OSGswere roughly that time.
A statement j«^ajs_being _prepared Xar—fehe President ._ I had
seen a copy which came over maybe an hour or two before
the meeting. I was annoyed and alarmed about it and
called it to Mike"Armacost ' s attention. I said this
looked like trouble to me. I think I used the term it

asks more que

wmm

UNGUSSra

1 ^--i We then got into the OSG and various members

Z were asked to take a look at the statement and then take

3 " it back and make some comments, to provide comments later

4 to Ollie's office. But in the nature of bureaucracies

5 people started reading right away and people started

6 commenting right away. And to my recollection the JCS

7 representative, the OSD representative, the State

8 representative, and the FBI representative all had very

9 serious reservations about the statement.

10 Q Along what lines?

11 A Mine — that this looked like it asks more

12 questions than it answered. If the President doesn't

13 know any more about this, he ought to just say well, open

14 up. Once I get it, I'll make it all public. But this

15 looks kind of cooked. Now those are not quotes, but

16 that's the thrust.

17 General Hollering said something about I think

18 that I was around here during Watergate; this looks like

19 — you know, this not real. Buck Revell —

20 Q Of the FBI?

21 A Of the FBI had some comments. I just remember

22 they were along the lines, but I was subsequently told he

23 had fired over some comments to Ollie in the wake of that

24 meeting to try to bring the statement more in line with

25 what he knew to be the facts.

^mmm

UNSiASSIRED

1 In general, all the people I mentioned bled on

2 that statement.

3 ^ Q And were you subsequently told by Craig Coy of

4 the NSC staff that this reaction was so strong that

5 Colonel North ran across the street to either see Pat

6 Buchanan or Don Regan to have the statement changed?

7 A Well, I think it was Craig who told me that

8 they were surprised at the strength of reaction and the

9 kind of unanimous opinion of the group, and that Ollie

10 and maybe someone else — I can't remember whether it was

11 Ollie alone — went across the street to either Pat

12 Buchanan or Regan's office to try to get it changed. I

13 think it was Craig who told me that.

14 Q Let me ask you, Mr. Secretary, about some of

15 your discussions with Colonel North, and you've been

16 quite open previously with the Tower Commission and the

17 Senate Select Committee in characterizing several of

18 them, and I want to ask about two or three in particular.

19 You probably know which ones I'm talking about.

20 First, there was a statement sometime in 1986

21 in which Colonel North talked about General Secord and,

22 as I think you said, it was something along the lines of

23 Secord needs to ^et the Medal of Freedom.

24 A No. We said the President — well, he didn't

25 say "needs". He said Secord 's a national hero; the

\mmm

ONCLASSra

1 Praaident ought to or will give him the Medal of Freedom.

2 Q Tell us more about that — when you think it

3 might have been said, what the context was, et cetera.

4 A The context. I had come to understand that

5 Dick Secord was involved in this Iranian affair, and in

6 one of my conversations with Ollie I expressed to him how

7 terrible it was, and I think I also said I was very

8 surprised that Dick Secord would be involved in this, and

9 he said that Dick Secord was basically a great American

10 and the President is going to give him the Medal of

11 Freedom. And I don't recall the time.

12 Q When were you made aware that General Secord

13 was involved in some way?

14 AX don't remember that either, but it had to be

15 after — sometime after February of 1986, that I recall.

16 MR. KREUZER: Mr. Secretary, in regard to

17 that, is that the kind of statement that if Ollie North

18 said that to you, would you say well, if Ollie says the

19 President's going to do that, then he's going to do it,

20 or was that just advertising?

21 THE WITNESS: I don't know. I can't answer

22 that question. This is what Ollie told me.

23 MR. KR£U2ER: The thrust of what I'm trying to

24 get at is can you comment on how close he is to the

25 President or was?

\immm

UNCIASMD

1 - -' . THE WITNESS: I could have commented on that

2^ several months ago, but I can't comment on it now because

3 I don't know basically when I learned what. But at one

4 time it was pretty generally felt in the Administration

5 that Ollie was very close.

6 MR. KREUZER: That he could just walk in?

7 THE WITNESS: Well, that no one could just

8 walk in, but that he was able to get in to see the

9 President quite often. However, I have been informed

10 from newspaper stories and testimony throughout the past

11 many months that this wasn't the case. I'd have had a

12 lot easier time answering that seven months ago. I would

13 have answered more in the affirmative several months ago.

14 Right now I just don't know. But ha said it.

15 BY MR. SAXON: (Resuming)

16 Q Do you know how you became aware or were

17 apprised that General Secord might have been involved in

18 this?

19 A No, I don't remember, and it could have been

20 either Ollie or it could have been the Israelis sometime

21 during '86, but I can't remember who it was. I know I

22 was surprised.

23 BY MR;"sabA: (Resuming)

24 Q Why were you surprised?

25 A Dick Secord is a man, in my view, of enormous

UNIWtFIED

iciissra

1 iivt«lligence, and I just couldn't believe that he was

2 involved in something that I personally felt was very

3 ■ silly.

4 Q When you learned he was involved, apart from

5 your view of him as an individual, were you also

6 surprised that the operation had gone private?

7 A I don't think I knew it as public or private.

8 From my point of view Ollie was involved and consequently

9 it wasn't a private operation. It was the government.

10 So I don't think I ever thought about it in terms of

11 private or public, and I didn't know what Dick was doing.

12 But as far as I knew Ollie was involved, and as far as I

13 was concerned this was a government thing.

14 After all, there had been discussions in the

15 National Security Council about it.

16 Q Is it correct to say that you had no knowledge

17 of Secord's involvement prior to the February 1986

18 transfers?

19 A To the best of my recollection, because I

20 hadn't seen Dick in some time. But I could have known.

21 I think it's February — to the best of my recollection,

22 sometime after February.

23 BY MR.'~SAXON: (Resuming)

24 Q Let me go back to your conversations with

25 Colonel North. I believe you testified that after the

mmm

UNCbASSra

1 Iran initiative became public and the McFarlane trip to

2 Tehr*ri\ but before the Attorney General's press conference

3 ^ at which the diversion was talked about Colonel North

4 made the statement to you along the lines of well, that

5 this won't be so bad when people find out the Ayatollah

6 is helping us fund_ the contras.

7 What can you tell us about that statement —

8 exactly what you recall the statement being, the context,

9 et cetera?

10 A As I recall, I was again preparing to go

11 testify and I called Ollie on the black phone, the secure

12 phone, to find out what was going on, to fill in my

13 knowledge a little bit more. And I think — in the wake

14 of this I've thought a lot about it — that Ollie was

15 concerned that I was very upset about this project, and

16 he said basically. Rich, don't worry. It'll all be all

17 right when the Vice President goes to Riyadh to sit down

18 with the Iranians and they find out that our hostages

19 come home, and that the Ayatollah is either helping us in

20 Central America or the contras.

21 The impression that I got was that it was the

22 contras, but he could have said Central America. And I

23 said, Ollie, wow:** And then he and I stopped the phone

24 conversation. As I think I've told you and others

25 before, I then called Mike Armacost and just reported

UttGt^iSiftED

UNCLASKD

1 that I had what I considered to be a rather baffling

2 conversation with Ollie in which he talked about the Vice
3» President going to Riyadh, sitting down with the Iranians

4 to talk about peace in the Gulf, getting help in Central

5 America or the contras, and our hostages being freed.

6 And Mike, who shared the same anxiety I had

7 about having to come to testify not knowing much about

8 the program, just kind of said wow, but we didn't go into

9 it any more.

^° Q I realize that we have the benefit in asking

11 these questions of hindsight and knowing a whole lot more

12 than you knew at the time, but did you not inquire

13 further of Colonel North as to what he meant by that?

^* A I thought he was losing his grip at that time.

^5 I thought he was saying this to make me calm down, not

16 realizing it^had the opposite effect on me. I thought he

17 was losing the grip.

^^ Q Was there a point at which you connected the

19 Ayatollah and the contras in the sense of diversion as we

20 have come to know it?

21 A No. No. When the Attorney General mentioned

22 this, that was the first time I realized it.

23 Q Did ifclick, though, in terms of relating it

24 back to what Colonel North told you previously?

ut it didn't click in

'mmm

uHCUSsra

1 a major way. I just remember the conversation. It

2 wasn't too far afterward, too many days.

3 . Q Do you recall if you told anyone about that

4 conversation other than Secretary Armacost?

5 A I'm almost sure I have, and I can't remember

6 to whom I said it. I know I've told a lot of people

7 since.

8 Q But roughly in that time period did you tell

9 Mr. Raphel?

10 A Well, I might have told Raphel, but I can't

11 remember. I know I told Mike because he was having to

12 testify with me.

13 Q I believe there was a time when you asked

14 Colonel North if he was all right in terms of the press

15 stories that were beginning to be written sometime in

16 early '86 about NSC involvement in aiding the contras,

17 and he basically told you his hands were clean and so

18 forth. Can you recall anything about that conversation?

19 A Yes, and I can state that it was not just me

20 that asked basically that question. I, from time to

21 time, participated in something that was called the RIG,

22 the Restricted Interagency Group.

23 Q And this was the RIG chaired by Mr. Abrams?

24 A Chaired by Elliott Abrams. I came to

25 participate more in the RIG toward the end of '86 because

more in the rig towara t

iJNIMSSiriED

UNGUSSKIED

1 Tny_ deputy, Mr. Sanchez, after six years was going to

2 retire and I had to pick up that slack a bit. And at

3 least one and, I think, several of those RIGs the story

4 kept cropping up. I think Senator Kerry had been

5 hounding Ollie and I made the general statement about

6 Ollie. All right, are you all straight on this. And he

7 assured me that he was, that it was absolutely legal, no

8 problem.

9 In a subsequent conversation either Elliott or

10 someone else at the RIG, probably Elliott, said, hey,

11 Ollie, this press stuff, is there anything to it. And

12 Ollie said he was absolutely straight — not a nickel,

13 not a penny or no money had touched his hands. I

14 remember two or more occasions when his colleagues

15 basically inquired after Ollie 's legal health.

16 Q As far as you know, were there any notes or

17 minutes of those meetings that would reflect this, or

18 memcons?

19 A No, I am unaware of any.

20 Q We covered before partially the question of

21 when you might have told Dr. Ikle about the arms to Iran.

22 What do you think is the time frame on that?

23 A The be'St I can remember it was late '86, and

24 if I had to pin down a date I'd say it was the beginning

25 of autumn but it was before it became public.

wtmm

UNCUSSIQEO

1 Q Let me ask a little bit more bluntly the

2 question that Mr. Kreuzer asked earlier, and let me

3* , preface it this way — that Dr. Ikle was your boss and he

4 was the top Pentagon man for policy. I understand that

5 if the Secretary says something is a close hold that

6 means it's a pretty close hold. But did you not feel at

7 any point that you had an obligation to him to apprise

8 him of something which you thought was a major departure

9 from our stated policy vis-a-vis Iran?

10 A Well, I will remind you, first of all, that we

11 all work for the Secretary of Defense primarily. That's

12 our boss. Second of all, I obviously had qualms about

13 this. That's why I eventually let him know what I

14 figured he needed to know to conduct his business without

15 an embarrassment to him. But I didn't realize this was

16 going to become public in November. So I guess the

17 answer is yes to both.

18 But we both work for the Secretary primarily.

19 Q I'm not trying to pass judgment.

2 A No. It's very important because we are both

21 Presidential appointees. We both work for the Secretary

22 primarily. If the Secretary were to tell me to do

23 something legal and tell me not to tell X, Y or Z, I

24 would not tell X, Y or Z. He didn't specifically direct
2 5 me not to tell Fred, but he told me it was sensitive, to

wmmm

wsjssm

1 kee^ it quiet.

2 Q Did you ever discuss the Iranian arms

3 • initiative with Noel Koch prior to the matters becoming

4 public?

5 A Yes.

6 Q Do you recall when you might have had any

7 discussion with Mr. Koch?

8 A Sometime, I would say roughly January or

9 February. It might have been late December.

10 Q January or February of?

11 A '86. It might have been December '85.

12 Q And what do you think might have been the

13 reason for discussing it with him?

14 A It seems to me that he might have raised it

15 with me, but I remember having conversations with him on

16 it. I think he probably raised it with me. I remember

17 he knew about it.

18 Q Did anyone tell you that he was involved in

19 negotiation with the Israelis on the price that was to

20 govern the TOW shipments to Iran?

21 A No, they did not.

22 Q Have you been made aware of that prior to

23 today? ~

24 A This is the first I've heard of it.

25 MR. SABA: This ia.liie-rfirst?

wmmB

1 ^^ THE WITNESS: This is the first.

2 MR. SAXON: I would say it was a pretty close

3 hold, then.

4 BY MR. SABA: (Resuming)

5 Q Do you know a gentleman by the name of Ben

6 Joseph.

7 A Ben Joseph, Ibraham Ben Joseph, yes.

8 Q Ibraham?

9 A Ibraham Ben Joseph. He is the Israeli

10 procurement guy in New York.

11 BY MR. SAXON: (Resuming)

12 Q Have you ever had any dealings with him?

13 A All the time.

14 Q Did he ever mention any dealings ha had with

15 Mr. Koch?

16 A No, but I know Ibraham was privy to this

17 operation.

18 Q How do you know that?

19 A I have been told that subsequently. I was

20 told sometime during '86 that arms were going through

21 Israel and that Ben Joseph knew about it.

22 Q Do you recall who told you that?

23 A No, I aon't.

24 Q Could General Meron have told you?

25 A Very possibly. Just for the record, Ben

UNWn

UNGLASSffi

1 Joseph is our major interlocutor on all systems

2 , transactions or tech transfer or anything with the

3 Israelis. He works out of New York.

4 Q I want to go back to the TOW pricing question.

5 You told the Department of the Army Inspection General

6 team that as far as you knew there was no pressure that

7 the Pentagon put on the Army to keep the price of the TOW

8 missiles low; is that correct?

9 A That is correct.

10 Q Do you find it at all curious that the GAG

11 report that looked at the pricing found that several

12 discretionary items, that they all came out on the low

13 side — and that is particularly that the price the Army

14 charged on the I-TOW was too low, that the standard AMDF

15 price for the basic TOWs was too low, that the price for

16 the MOIC was too low, and that the Army underestimated

17 the charges for transportation?

18 A I don't find it so much curious as I found the

19 whole operation rather badly done. I concentrated more

20 on the final bottom line of the GO, which pleased me

21 quite a bit.

22 Q As you were looking back on all of this to try

23 to reconstruct whSt took place with the pricing in late

24 '86, after it became public, were you made aware of the

25 role that Mr. Ledeen and Mr. Schwimmer played in fixing

uNeusm

ONtlASSiED

1 tha> rirst price on the TOWs?

2 A No.

3 Q Let me ask you, changing gears now from the

4 Iranian side of these matters to the contra side, let me

5 ask you a few questions about the private supply

6 operation and private supply network. That's what I'll

7 call it. If you know it by some other term, that's fine.

8 I believe you told the Tower Commission that

9 you knew that some weapons were getting through somehow

10 because the contras continued to fight; is that correct?

11 A Yes.

12 Q What would be your sense of how those arms got

13 there?

14 A I assumed that — well, the conservatives were

15 providing money, and this money then purchased arms on

16 the grey armf market. I knew that some Americans had

17 been reported to be doing this — Jack Singlaub and

18 others. I also, I think I told the Tower guys and maybe

19 you, my understanding was that it was at least the

20 implicit, if not explicit, discussion of this in the Hill

21 testimony surrounding the provision of $27 million in

22 humanitarian assistance to the contras, basically to the

23 effect that well, '"weapons are coming from somewhere, so

24 we are only going to do humanitarian.

pcussions with General

wmm

iliUSSIHED

1 Sljvjlaub about his role in these matters?

2 A None that I recall.

3 " Q What do you know — what did you know during

4 or prior to these matters becoming public about the air

5 strip that existed in Costa Rica?

6 A I knew nothing.

7 Q You knew nothing?

8 A I knew nothing.

9 Q When did you first learn that it was being

10 used for air drops or resupply?

11 A When things became public.

12 Q Did you ever have any discussions with Colonel

13 North about use of this air strip prior to it becoming

14 public?

15 A Not that I recall, no.

16 Q Were you ever involved with Colonel North in

17 what could be called concocting a cover story for the air

18 strip if these matters ever became public?

19 A No.

20 MR. KREUZER: Mr. Secretary, was it your sense

21 — you mentioned a couple of minutes ago that you

22 understood that private benefactors may have been

23 contributing to tRe lethal, what you say was lethal

24 support.

25 THf. MTTHF.ty -gi^ J^ HfMJr ffc ^^ ^"^ money. They were

wmm

1 giVthg money and then with the money my assumption was

2 ^ the contras could go purchase arms on the market.

3 MR. KREUZER: Did you ever ruminate on how

4 much of that effort would be covered by private

5 benefactor support?

6 THE WITNESS: None whatsoever. I never did.

7 MR. KREUZER: You never equated how much they

8 would be able to provide as opposed to, say — in other

9 words, did the question ever come into your mind about

10 whether they would be able to provide overall support to

11 a contra effort of maybe^^^^Has opposed to some other

12 source of support?

13 THE WITNESS: No, I never did. I must say

14 that ny own efforts on behalf of the contras, if I can be

15 allowed to say that, were somewhat periodic. As we

16 geared up for a fight, I'm sure you'll see the attendance

17 at different meetings in the White House and all would

18 reflect much more my attendance, because we would have to

19 lobby the Hill, we would have to work these things.

20 As we were not doing that, then I was a much

21 less frequent attendee at the normal meetings because I

22 felt 1 had a very good, and do feel that I had a very

23 good deputy in NeStor Sanchez, who knew these matters

24 very well and was perfectly competent. But as we got to
a crunch point ^and^I l^^t^tifffl4?A the artillery of my

immm

1 rank rather than my personal efforts, they needed an

2 ■ Assistant Secretary to come lobbying and this, that, and

3 whatnot. So I participated to a higher degree.

4 BY MR. SAXON: (Resuming)

5 Q I want to follow up on the Costa Rican air

6 strip and have you mark this as the next deposition

7 exhibit. I will give you a moment to look through this.

8 (The document referred to was

9 marked Armitage Exhibit

Number 6 for identification.)

11 A Do you want me to read it?

12 Q Sure.

13 (Pause.)

1* X All right. I have read it. I see what you

15 are getting at.

1® Q Mr. Secretary, this exhibit is a memorandum

17 from Colonel North to John Poindexter. It's dated

18 September 30, 1986. For the record, it's got the

19 initials JMP, which I guess suggests that Admiral

20 Poindexter had seen it, and it's with regard to the air

21 strip in Costa Rica to which I made reference a few

22 minutes ago, which we now know was used for air drops for

23 getting supplies; "including lethal supplies, to the

24 contras during the period when U.S. assistance was cut

25 off.

UNClASSra

wmmm

1 - ' . Let me direct your attention to a couple of

2^ paragraphs on page one of the memorandum. It starts off

3 in paragraph two saying "Request guidance at Tab 1 has

4 been coordinated with State, Mr. Abrams, Defense,

5 Armitage, and ^^^'^|^^Pf" Let me ask you first if you

6 have any recollection of Colonel North coordinating with

7 you anything in terms of how this issue of the use of the

8 air strip, its construction or anything else would be

9 portrayed in the press.

10 A I certainly don't remember this, and I knew

11 nothing about the air strip. It is possible that this

12 press guidance came through me from Nestor, but it

13 doesn't look to me — I mean, I wouldn't have known what

14 it was. I could have coordinated, but I certainly don't

15 remember it at all.

16 Q Okay. I can understand with the many issues

17 you have to deal with that you may not have total recall

18 of all of these.

19 A I say completely unabashedly that I have no

20 knowledge of this.

21 Q Okay. You'll understand if I have to ask a

22 few more questions.
2 3 A Please"

24 Q We are trying to piece all of this together

25 and we do know the air fitiijp^MF f%- we are fairly

lisMW

1 CQirfident of the uses to which it was put and what the

2 U.S. role was in that. Colonel North says in his memo to

3 " Admiral Poindexter that the damage done by this

4 revelation is considerable. He talks about the logistics

5 support provided by Project Democracy on the ability of

6 the resistance movement to sustain itself. He says the

7 air field at Santa Elena has been a vital element in

8 supporting the resistance and so forth, and talks further

9 through the memo about the strategic importance of the

10 air facility, et cetera.

11 Is it your statement that you had no knowledge

12 whatsoever prior to these matters becoming public that we

13 were using this air strip to supply the contras?

14 A This is my statement.

15 Q And you don't recall at all him, Colonel

16 North, talking to you or dealing with you to work at a

17 press statement which in effect was a cover that

18 disguised its purposes?

19 A No, I certainly don't remember it. I must say

20 that, having read this press guidance, this wouldn't

21 offend me, but I don't remember it at all.

22 Q I'm sorry. What do you mean?

23 A Well, the press guidance, as I read it, looks

24 fairly non-controversial and nothing to it. I myself did

25 not know th%tk a| Air ^1f%iA|MpA>g used for contra

wsussm

UN€LA$»

1 resupply. If someone had come to me and said, look,

2 these are the facts, we've got this, I would have okayed

3 ' . it. But I don't remember seeing this.

4 Q Okay. I understand the distinction.

5 A I don't remember seeing this.

6 Q Let me ask you a few questions about General

7 Secord, who we alluded to earlier. As best as you can

8 recall, when did you first meet him?

9 A 1 met Dick in Iran at his pinning of his

10 general officer stars, either at the last month of '75 or

11 the first month of '76. Whenever he pinned them on, I

12 was in that ceremony. That's the first time I met him.

13 Q And this was when you were a consultant to the

14 Pentagon?

15 A And, more particularly, to the defense

16 representative to Iran.

17 Q Have you had any ongoing or continuing

18 relationship with him since that time?

19 A Oh, yes. Well, when I left Iran and I did not

20 see Dick Secord, and I left in the middle of '76, nor

21 have any communication with him until 1981 in the advent

22 of this Administration.

23 Q When yOu both arrived at the Pentagon?

24 A Well, I arrived there. I think he was already

25 there. I can't j:^i^mbej^MhfM|haf|ras, but at any rate I

wmm'

mussra

1 have the highest regard for him personally. I had a high

2 regard them. I introduced him, as I remember, to Frank '.
3* . Carlucci as a job-seeker and |he got the Near East/South

4 Asia job as Deputy Assistant Secretary. He held that job

5 until roughly the end of April 1983, at which time he

6 retired.

7 From the end of April 1983 to now I've seen

8 him possibly three or four times and, to my recollection,

9 I haven't seen him or spoken to him in over a year and a

10 half or more now. I consider him a friend.

11 Q You say you don't think you've spoken to him

12 in about a year or a year and a half?

13 A The reason I dare say that is I have asked my

14 own staff, my secretary, in preparation for either a call

15 by you or the FBI when the last time Dick Secord was in

16 or around. They couldn't remember. They put it together

17 as a year and a half.

18 Q And a year and a half would include the period

19 in May of '86.

20 A It certainly would appear then.

21 Q Do you recall whether you talked to him in May

22 of 1986?

23 A I don't recall. It's possible, but I

24 certainly don't recall it, nor did my staff.

25 Q Would you recall ^^i^J^ you had spoken to him

OHCUiSSIEIED

1 aboyt the Iranian arms shipments?

2 A If I spoke to him, I would have spoken to him

3 about the Iranian arms shipments. There is no question —

4 no question.

5 Q If you had spoken to him, would it have been

6 captured in the record-keeping system you have in your

7 office?

8 A No. No, it wouldn't have been. I don't

9 generally make a memorandum of conversation afterward,

10 and I can't remember the last time I saw him. I'm

11 depending on my staff's advice, and I asked them when's

12 the last time I talked to him. But if I talked to him in

13 '86 after I knew he was involved, I can assure you I

14 would have talked about Iran.

15 Q For what it's worth, he, Richard Gadd, says

16 that at about the time of the second arms shipment, which

17 would be in May of '86, that General Secord told Mr. Gadd

18 about a conversation you and he had and, for what it's

19 worth, apparently you told General Secord this was not a

20 very bright idea. So if you did have that conversation,

21 it was a consistent statement. That's what Mr. Gadd

22 says.

23 A That's'* fine. I would have told Secord it was

24 a dumb idea. There is no record of his coming into my

25 office, I roust .s^vc,, and^QkDhapa,fiecord that anyone

wmm

mmm

1 remimbers.

2^ Q After General Secord left the Pentagon, was he

3 a consultant to ISA?

4 A He was initially a consultant to me.

5 Q And what was the nature of his duties?

6 A I don't remember ever having paid him to do

7 any, but it was going to be consulting on Near East/South

8 Asia. It could be that he did a little work for us, but

9 I don't believe much.

10 Q And was he later a member of the Special

11 Operations Advisory Group, the SOPAG?

12 A Well, he was dropped from my rolls ai a

13 consultant and he was picked up on the rolls of Mr. Koch

14 as a consultant to the SOPAG ~ special policy advisory

15 group.

16 Q And what do you know or understand to have

17 been the reasons for his being dropped from the SOPAG

18 rolls?

19 A My recollection is that — background. I took

20 over SOF in roughly May, late May of '86, the special

21 operating forces.

22 Q Upon the resignation of Mr. Koch?

23 A Upon tRe resignation of Mr. Koch. And I

24 brought on a fellow by the name of Mr. Larry Ropka.

25 Larry had reviewed the SPSCilliBBUcy Advisory Group, had

wmm

uMDUSSiED

1 niyt*d that Dick had not participated, and further, for .

2\ some time further noted that Dick had not turned in his

3 proper forms, and, as I remember, Larry said we ought to

4 drop him, and I said that's a good idea. I don't think

5 he was ever paid for anything he did for us.

6 Q So he was in essence terminated or allowed,

7 his membership allowed to lapse or whatever for failure

8 to fill out a financial disclosure form?

9 A Well, I think that was what allowed it to

10 happen. I think that Larry was recommending that Dick

11 was just too busy to participate. If we're going to have

12 the Policy Advisory Group, we've got to get guys who can

13 participate. So it was a little of both. We needed a

14 guy who could be there, and I think that his not filling

15 in the financial forms made it easy to drop a friend, if

16 you know what I mean.

17 Q Did you ever talk with General Secord about

18 this issue?

19 A I don't recall ever having talked to him.

20 Q Let me have you mark this as the next

21 deposition exhibit, Exhibit 7.

22 (The document referred to was

23 •** marked Armitage Exhibit

24 Number 7 for identification.)

25 Mr. Secretary, these are some questions and

mmma

OWLASSWiED

1 - answers that Secretary Weinberger provided to the House

2 Permanent Select Committee on Intelligence last December,

3 and you don't have the full text of all of it, but the

4 relevant portions you do have, and that is on page one,

5 question four had asked about any consulting contract

6 General Secord had with the Department and basically he

7 said what you just told us.

8 Then, if you look on the next page, about a

9 third of the way down the page there is a sentence that

10 Secretary Weinberger provides his term on the SOPAG

11 expired effect 4 August 1986.

12 In question five, was General Secord dropped

13 from one of our committees for failing to execute a

14 financial statements, it states "Major General Secord

15 served on the Special Operations Policy Advisory Group,

16 SOPAG, from January 1984 to August 1986, although he last

17 participated in November 1985. Major General Secord' s

18 membership on the SOPAG was terminated effective 4 August

19 1986 based upon his failure to provide the Department

20 with financial information as required in Form SF-1555.

21 Amplifying information is enclosed in Tab C."

22 If you look toward the back, you will find Tab

23 C is on numbered page D-101, and simply contains a chart

24 showing the dates of service by General Secord as a

25 consultant. Is this essentially c:onsistent with what you

UNtLAMe

1 recall?

2 A I believe I provided this to you. Yes, this

3 ■ is basically it.

4 Q While we are looking at this document, let me

5 ask you an unrelated question, unrelated to General

6 Secord, simply because it is here in front ot us. If you

7 look at Question 6, which at the bottom of page two, it

8 says: "Have any FMS" — and that's foreign military

9 sales — "or other arms sales by the Department been made
10 to any agents or middlemen, as opposed to directly to a
H recipient country?" And the answer Secretary Weinberger

12 provided was: "No FMS or other arms sales to foreign

13 countries have been made by the Department through a

14 private agency or niddle nan. There la no legal

15 authority to sell under the Arms Export Control Act to

16 other than an eligible foreign country."

17 Would you agree with that statement?

18 A I would guess it was the case. It was

19 provided by the Defense Security Assistance Agency, not

20 me, but that would be my journeyman understanding.

21 Q And would it have been your understanding in

22 late '85 or early '86 that Iran was ineligible as a

23 foreign country tO receive FMS sales?

24 A My understanding was it was because we had an

25 arms embargo <2il j-tw. ^U^Jk«%W^ft^rt° relationships with

UHtlASSlEP

1 IrW? and we have no embassy. We had no way to monitor

2* usage. So as a journeyman that's what I would have said,

3 that we couldn't sell.

4 Q I realize that's a bit out of sequence, but it

5 was there in the same document.

6 BY VSR. SABA: (Resuming)

7 Q With respect to General Secord's role as a

8 consultant to SOPAG what were the functions of SOPAG at

9 this time?

10 A The functions were we had been trying for some

11 time to rejuvenate, reenergize our special operations

12 policy and we thought that it would be wise to get some

13 of the old bulls, if you will, of the special operations

14 business together to see what their ideas were, and these

15 fellows met from time to time and gave their ideas to the

16 Department.

17 And Dick Secotd is known as having a

18 background in special ops. As you'll see from the other

19 listed members, these guys are all very deeply involved

20 in special operations and dedicated to it, and they were

21 to advise the Secretary of Defense on the development of

22 special operating policy and how do we apply special
2 3 operations.

24 You look quizzical and that's why I'm going on

25 to explain limMM aiEtfVA|1C|PI|P^^3^i"<? expertise to

imssiiiEr

UNCLASSra

1 low intensity conflict and things of that nature.
2> BY MR. SAXON: (Resuming)

3 Q In terms of our special operations policy,

4 what do you know or understand to have been the reasons

5 why Mr. Koch resigned and left the Pentagon?

6 A I think that he was upset because the

7 Secretary of Defense had made the decision to place

8 special operating forces, which were one of Noel Koch's

9 purviews, under me. It's a very difficult arrangement to

10 explain. Previously Noel Koch was the Principal Deputy

11 Assistant Secretary of Defense for International Security

12 Affairs, and in that hat was my deputy. But for special

13 operating forces and counterterrorism he was not my

14 deputy. He reported directly through Ikle to Secretary

15 Weinberger.

16 Secretary Weinberger — and I really have to

17 ask him his reasons, but he decided he wanted to tidy up

18 this operation and consequently decided that for SOF Noel

19 Koch would remain as the Principal Deputy, but that too

20 would come under ISA, and I think this was a great

21 disappointment to Noel and he decided to take a walk. He

22 never said that in as many words to me, but I feel that's
2 3 the reason.

24 Q Before we go into a different subject, Mr.

25 Albright has a follow-up question on one of your

UNCtASStFlfll

Ultb

1 conversations with Colonel North.

2 MR. ALBRIGHT: Just one about Colonel North. '

3 ■ You said that people began to inquire at some point about

4 his legal health, if you would.

5 THE WITNESS: Yes, in the RIG, because of the

6 press stories.

7 MR. ALBRIGHT: Was there any discussion within

8 the RIG or with anyone about any personal financial stake

9 he may have had in any of this?

10 THE WITNESS: I want to make sure I understand

11 you. I think the answer is no. Do you mean that he

12 might have been involved in donating money or getting

13 money? No.

14 MR. ALBRIGHT: Or receiving noney in any way?

15 THE WITNESS: No.

16 MR. ALBRIGHT: In any personal financial

17 setting?

18 THE WITNESS: Not that I remember.

19 MR. ALBRIGHT: Have you had any discussion

20 with anyone or has anyone had any discussion with you

21 about that?

22 THE WITNESS: No. I must say that even in the

23 wake of events frl^m November until now, continuously

24 through the Administration, guys with whom I talk

25 constantly say well, whatever Ollie might have done, he

UNCUSSimD

1 is personally honest. I mean, this is a steady theme.

2 V MR. ALBRIGHT: Thank you. That is all I have.

3 BY MR. SABA: (Resuming)

4 Q I have just one or two questions. Mr.

5 Secretary, I take it you were generally familiar with the

6 Peace Shield Program.

7 A Ves, which one?

8 Q This is the C3 program for Saudi Arabia, the

9 follow-up to AWACS.
10 A Yes, I am.

j^l Q Did you understand that in 1984-85 General

12 Secord was a consultant either directly to Boeing or to

13 Boeing's agent, the Mafouz family in Saudi Arabia?

14 A I did not know this.

j^5 Q Did you have any awareness of his business

16 relationships with the Alamoody family which obtained a

17 construction contract for that?

18 A The only thing I was aware that he was working

19 in the Middle East was a construction contract, I believe

20 for UAE, the United Arab Emirates, and it had to do, if I

21 remember correctly, with aircraft shelters, and he was

22 engaged in bidding with some other country in Europe, and

23 I think he was unsuccessful. And that's the only

24 business that I knew Dick had.
Q Were i'itt ^M^^/flMMI""^"^"^^""^ ^^ would

IWIREII

\mmm

1 have had then with Ambassador Bandar Bin-Sultan on Peace

2 Shield in •84-'85?

3 A No, I'm not.

4 MR. KREUZER: Mr. Secretary, would you tell us

5 what your personal relationship is with Mr. Koch? Did

6 you have a personal and professional relationship or just

7 professional?

8 THE WITNESS: I consider myself a very good

9 friend of his. I still consider myself a friend of his.

10 I think he does not consider himself a friend of mine any

11 longer.

12 MR, KREUZER: Can you clarify why you think

13 Mr. Koch would have resigned if you were to be taking

14 over?

15 THE WITNESS: I think he saw that as somewhat

16 of an affront to his authority. There had been a lot of

17 trouble in the Department, particularly public criticism

18 of various members of the Joint Chiefs of Staff of

19 various Departments — Army, the Department of the Air

20 Force — of a lack of dedication to the SOF arena.

21 Secretary Weinberger had expressed to me in

22 the past a question in his mind as to what did Noel want.
2 3 Why did he feel ik. necessary to go public and blast these

24 guys? Why couldn't we work these issues out in-house?

25 He had had some meetigjgji Mi#ip»|If%nwhere at least the

Ifiy^HED

Mmssm

1 Sacretary claimed I don't really understand what he wants

2 other than to bang away at the services.

3 So I think that's why the Secretary, I think

4 he got tired of this. I mean, frankly, I was all for it,

5 moving it under me. I'm a bureaucrat. When the

6 Secretary said what do you think, I said I thought it was

7 the best idea I've heard — brilliant. But that's my

8 bureaucratic, in a sense, talking. I think Noel found

9 that as an affront to his own leadership.

10 My own view was this was going to allow his

11 leadership and my ability to get things done in the

12 building to bring home a success. Noel did not view it

13 in that way, I think.

14 MR. KREUZER: That would have brought hin

15 under your — you would become his direct supervisor.

16 THE WITNESS: I was in one-half of his job

17 already.

18 MR. KREUZER: But in his part now, where he

19 was reporting to Dr. Ikle, he would be reporting to you.

20 THE WITNESS: That's right — through me to

21 Ikle.

22 MR. KREUZER: So in addition to himself would

23 he be bringing anything else in from Dr. Ikle's

24 organization with him?

25 THE WITNESS: Well^ Jjj^would be bringing the

THE WITNESS: iiell^Jjy^W(

UNCUSW

u\€USSlfffl

1 special plans group, the special operating force boys who

2 ' worked for Noel. They would come with him.

3 MR. KREUZER: And no other assets than that?

4 THE WITNESS: I don't think he had any other

5 assets. The other assets belonged to me, if you will,

6 bureaucratically, anyway.

7 BY MR. SABA: (Resuming)

8 Q Mr. Secretary, I'm sorry. I just have another

9 question on this Peace Shield. Are you aware of any

10 amendment to the Letter of Agreement between the United

11 States and Saudi Arabia on that program providing for a

12 sole source procurement for the contractor to build the

13 facilities in Arabia?

14 A This is something you must ask Lieutenant

15 General Phil Cast about that. The reason I say that is

16 because I can remember discussions with Phil on Peace

17 Shield. This belongs to him as far as the administration

18 of contracts and all that. I'm the policy guy. I decide

19 whether I think this is a good idea to have Peace Shield

20 in Saudi Arabia or not, but he's required to run this by

21 us. I don't remember per se, but I remember discussions

22 on Peace Shield, Peace Vector, a whole bunch of these

23 Peace series thirlgs.

24 Q But it's my understanding that it would be

25 Lieutenant General Gast who ji^Ul'^'^^iv® arranged, if there

Id "

mmm

1 was such an amendment, it would be his position to have '.

2 * approved it.

3 A He would know about it. He'd understand it.

4 BY MR. SAXON: (Resuming)

5 Q I mentioned earlier Richard Gadd. Do you know

6 Mr. Gadd?

7 A I had met Mr. Gadd, I believe, once when I

8 gave a speech down in Ft. Walton Beach, Florida, in 1983.

9 Q And that was the only time?

10 A To the best of my recollection. I may have

11 seen him in the corridor from time to time, but at most I

12 might have seen him twice.

13 Q Have you ever had any dealings with him of any

14 sort?

15 A Other than that night at Walton Beach, we went

16 out and had a few beers and that was it.

17 Q Do you have any knowledge of any of the

18 companies he has been involved with, specifically Summit

19 Aviation. Have you had any dealings with Summit?

2 A Not that I remember. But I read about his

21 involvement with the different companies since this thing

22 went public.

2 3 Q SumercO?

24 A I don't know what that is.

25 Q Airmoc?

\immm

UlWSW

2 '

5
6

9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

A No.

Q Shenandoah?

A These things might be somewhat familiar.
Maybe I've read about them, but I don't know about them.

Q Do you have any knowledge of any intention to,
efforts to or actual success at diverting any arms that
were intended for^^^^^^^^Hto the contras?

A I do not.

Q Let me ask you about something which is known
Do you recall that?

A Very well.

Q Okay. What can you tell us about that
operation?

^^^^^^^^^^^^^^^^^Hwas something
inherited when I came to be Assistant Secretary of
Defense for l^nternational Security Affairs. I know that
we have provided you such documentation as we had, to
include what I believe to be the original document
requesting^^^^^^^^^^H and that was a letter from Mr.
Casey to Mr. Weinberger which basically requests DOD to
facilit

82-690 0-88-5

leUSSfflED

t[A\

ONCLASSIFIED

Q I want to ask you a few questions about the
activities of Colonel Jim Steele as head of the U.S. Mil
Group in El Salvador. First, do you know Colonel Steele?

A I have met him.

Q What was the nature of any relationship you've
had with him?

A I can remember meeting him when he — I think
it was him — brought General Vides Casanova to the
United States and General Vides was the Minister of
Defense of El Salvador.

Q So we can understand it, what is the reporting
or oversight or supervisory authority that you might
have, if at all, over any of the mil groups.

I have none oyer , Col on el Steele.

UNGkASM

He works for

100

wmm

100

1 DIA. What is he? Is he a mil group commander? He

2 worked for the JCS. Now I did get involved in that. I

3 set the policies. My office sets the policies in El

4 Salvador regarding whether or not a guy can carry weapons

5 — those kind of things.

6 Q And wha_t about in the security assistance

7 arena?

g A Phil Gast would have the day-to-day

cognizance. I just have — to be simple, I decide what
we're going to sell in general terms and notify the Hill
and set the parameters of the program — how much money
and all that — and Phil Gast and DSAA runs the program.

Q And is DSAA part of your bailiwick, under you?

A Well, only for policy. Colonel Steele would

15 report not only to the JCS but also to General Gast, and

16 would take his instruction, day-to-day, on running

17 programs from DSAA, not from policy.

j^a MR. KREUZER: Mr. Secretary, getting back to

19 what we were discussing a little bit earlier —

20 MR. SAXON: Does this relate to Colonel

21 Steele, because I want to follow up on that.

22 MR. KREUZER: Okay. I will wait.

23 BY MR." SAXON: (Resuming)

24 Q Let me have this marked as the next deposition

25 exhibit.

UNcy^sw

101

mmm

101

1 •"* " (The document referred to was

2 ' . marked Armitage Exhibit

3 Number 8 for identification.)

4 And I will give you a chance to look at it.

5 (Pause.)

6 A I have_loo)ced at it.

7 Q First of all, let me ask you whether you have

8 seen any of these documents prior to today, sir.

9 A No, I have not.

10 Q Okay. The first is on U.S. Mil Group, El

11 Salvador letterhead and is dated 1 February '85. The

12 subject is Felix Rodriguez. It's through the Deputy

13 Chief of Mission and to Ambassador Pickering, and it's

14 from Colonel Steele. And for the record he has verified

15 that that is his signature.

16 It says: "Per your guidance, attached is a

17 draft back channel to General Gorman on our 'no pay'

18 mercenary." Let me ask first of all do you have any

19 familiarity with Felix Rodriguez?

20 A No, I don't, but this is not the attachment I

21 have.

22 Q I understand that.

23 A No, I'd© not.

24 Q Do you know who Felix Rodriguez is?

25 A From the news accounts, yes.

mmm

102

\immiB

]L ' Q Do you know him by the name Max Gomez?

2 \ A No, other than by the news accounts.

3 Q The next item in this exhibit is a

4 confidential cable that is from General Gorman for

5 Ambassador Pickering and Colonel Steele. Again, the

6 subject is Felix Rodriguez. It says: "I have just met

7 here with Felix Rodriguez.." The next paragraph:

8 "Rodriguez's primary commitment to the region is in

9 ' H^^fH where he wants to assist the FDN. I told him

10 that the FDN deserved his priority." Numbered paragraph

11 4: "My judgment is that his advice will reinforce ours

12 and that we should put no obstacles in his way to

13 consulting with Blandon or Bustillo unless and until we

14 get counterindications. I recommend that Jim Steele meet

15 with him."
And then the next paragraph: "Assuming your

approval" — meaning Ambassador Pickering — "I will send
Rodriguez tc^^^l" Do you have any knowledge at all
about the role General Gorman would have played, or
colonel Steele would have played in getting Mr^. Rodriguez

21 to El Salvador?

22 A None.

23 Q Let me" ask you to look at the next item, whiclt

24 is the backchannel. These are out of sequence, but this

25 is the backchannel, message^yjii^^lonel Steele references

Lchannel messaae tha^Col

tlNElASW

103

mussm

103

on the first pagt It says: "Eyes only for Ambassador
Motley. Mr. Johns le, and then Southcom for General
Gorman." This is : a Ambassador Pickering. If you go
through the text, i '.Iks about what the plan was in
terms of using Mr. R guez in El Salvador. You get to
paragraph number 3. ays: "Rodriguez will return in
three or four weeks tc k with Bustillo and Steele

still will monitor clc.
Do you have
Colonel Steele in monitc

A No, I do not.

Q When all of th
some of the Mil Group comm.
to meet, I think, either wi

A He did not meet w.

Q You did not meet w

A No.

Q You would have no in
of these, if in fact he was enga
with Mr. Rodriguez or helping sup

A No, and Steele may have
Nestor, but the only person I direc
was our fellow in~ Costa Rica, when r
become public — is anything going o;
called him up and asked him are you i

*M»D

nc . Ladge of any activities of
Ir. Rodriguez?

t -rs became public and
ard other people came up
^nd/or Mr. Sanchez —

msi Steele?

t knowledge of any
ny activities
FDN?

3k to meet with
or to have of
arted to
^ere. N'xstor
n anyth_.ig

104

3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

ONeUSHB

104

of assistance the contras in any way. And he told
Nestor no, or s ^stor reported to me. I do not know
about Steele itiee g with Nestor.

I do, ever, know that we as a Department
tried to make Stet available at some time. I did not
talk to him when h-. me through.

Q The last 3 of this exhibit, paragraph 4,
says: "For ARA, pie orief Don Gregg in VP's office
for me." And this is '.n from Ambassador Pickering.
Have you ever had any '.ssions with Mr. Gregg about
Colonel Steele or conti • any role that Felix
Rodriguez might have hac upport of the FDN?

A I never did u; on's name publicly became

associated. I frankly ne\
Central American things,
saw him in Asia. But I don
of any of the discussions in

Q Do you have any kn
the Mil Group people inj

^^Ito be in%
user certificates?

Don Gregg involved in
■im in the Middle East. I
mber him being a part

cy.

of the activities of
letting the
T issuing false end

I do not.

In 1985?

I do not.

Let me ask you a couple

:ions about Mr.

liiassfflffl

105

omssffl

105

i Sanchez, Nestor Sanchez. Tell us what his position was

2 and the approximate dates.

3 A Nestor was the Deputy Assistant Secretary of

4 Defense for Inter-American Affairs from roughly late '81,

5 maybe early '82, until December of 1986, when he retired.

6 Q And what was his reporting relationship?

7 A He reported through me, through Dr. Ikle, to

8 the Secretary.

9 Q And I believe you told us earlier that he sat

10 in on one or more of the RIGs.

11 A He sat in on the great majority of the RIGs

12 and the IGs regarding Central America.

13 Q We have asked you this before, but for the

14 record do you have any knowledge of any trip that Mr.

15 Sanchez may have taken roughly in the late November 1985

16 time frame to Geneva, Switzerland?

17 A I do not have any knowledge.

18 Q And in fact you have asked him about that and

19 he denies that he took such a trip; is that correct?

20 A He took a trip, which I was well aware of, to

21 go to a conference in South America. I believe it was

22 Argentina. But he told me that's the only travel he had,

23 and I believe hint*.

24 Q What would have been the time frame on that

25 trip?

UNCLASSiED

106

MJSaEIED

106

1 X It was November, but I don't remember the

2^ datAs.

3 Q And do you know the nature of the business on

4 which he was traveling? Was it official?

5 K Ves, it was official. It was a conference, as

6 I understand it.

7 Q Do you know who the sponsor of the conference

8 was?

9 A I can find out, but I don't remember.

10 Q Let me ask you a couple of questions about the

11 nature of our security assistance program. As you

12 probably know from statements you made or that were

13 attributed to you in last week's New York Times about

14 U.S. security assistanc* —

15 A Elaine Sciolino's article.

16 Q And any linkage between it and U.S. contra

17 support policy, let me have this article marked as

18 Deposition Exhibit 9.

19 (The document referred to was

20 marked Armitage Exhibit

21 Number 9 for identification.)

22 Z am referring to an article in the New York

23 Times of Monday, Hay 18, written by Elaine Sciolino, with

24 the heading "U.S. Said to Link Latin Aid to Support for

25 Contras." Let me f irst 2is}t jmi^Jlr. Secretary, if the

wmm

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i statements that are attributed to you in here are more or

2 less correct.

3 A I believe there was only one.

4 Q It is in this first column.

5 A Yes, one statement.

6 Q As far as you know, is that more or less

7 accurate?

8 A Yes. I'm sure it's an exact quotation.

9 Q I am really basically through with this

10 article. I wanted there to be something in the record

11 that would cover what I am getting at on this issue.

12 A I'd like to put something on the record.

13 Q In quicker time than we can, but I certainly

14 plan to let you say whatever you want on this issue.

15 A Thank you.

16 Q But let me ask you a question or two. Tell us

17 how we do use security assistance at all as a broad

18 instrument of foreign policy and national security

19 policy.

20 A First of all, we use security assistance as an

21 ability or a measure to build a shield which we believe

22 subsequently someday will keep us from having to devote

23 U.S. forces to an"area. We find it an aid to stability

24 and security, number one. Number two, we also find that

25 in the provision of security assistance we develop a

ilNftflSm

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J. certain amount of influence with countries which we

2 believes helps the west in general and certainly helps

3 " ourselves.

4 Number three, and particularly in relations

5 with host military we find that the identification with

6 U.S. forces, primarily in the third world, goes a long

7 way to fostering what we want in terms of professionalism

8 vice what is very often the case. We find a very

9 political military who is bent on fostering their own

10 personal power rather than the national power. So we

11 find security assistance a very helpful tool.

12 Q To your knowledge, have we ever linked or

13 coupled the provision of security assistance in Central

14 America or, for that matter, with any recipient country

15 to the issue of whether that recipient country has aided

16 the contras?

17 A No. I don't. And, if I may, I did have this

18 conversation with this reporter, who is an excellent

19 reporter. My statement or her story quoting me was not

20 in the Latin American context. It was security

21 assistance in general. I made the point that obviously

22 we don't give security assistance because we're just good

23 guys. It's in ou't interest. We don't do it because

24 people just need guns — or economic assistance, for that

25 matter.

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1 " We do it because it's in our interest, and by

2 ■ making people more stable, that's in our interest. And

3 she said do you get any influence? I said, you're

4 exactly right. Now when I used the object of Pakistan, I

5 said look at the case of Pakistan. We believe that the

6 provision of our security assistance in a large way and

7 in a great way retards the development of the Pakistani

8 nuclear program, which we find in everybody's best

9 interests.

10 So is there a linkage between the nuclear

11 program? You bet, and it's fostered by the Hill.

12 Q Let me ask you more in the Central American

13 context. Is there a linkage with regard to the decision

14 announced recently for us to provide fighter planes to

15 the Hondurans?

16 A Not to my knowledge. The Hondurans have been

17 after us for some time for this. We have been unable to

18 be successful in figuring out a replacement for the Super

19 Mysteres. We made the F-5 decision.

20 Q By whom was that decision made?

21 A It was an interagency one. No one person made

22 it. It had been discussed for months and months and

23 months.

24 Q Between State, Defense and —

25 A State, Defense and NSC, the CIA; military

UNetASSIflED

9
10
11
12
13
14
15
16
17
13
19
20
21
22
23

•^ -.lance in the region •.-•33 cart o: zhe decision.

Q v;hen Secretary Acramsj
^^|and a ccuple of other individuals -- I believe Ray
Burghardt in the NSC -- traveled to Central America in
late November or early December of 1936 after these
matters became public, they were there on a mission to
sell the Administration's Central America policy, and in
the course of doing that were informed that]

[would be receptive, but they wanted
something in return.

Ill

UNUSIHED

J.!

UNCLASSIFIED

Q Let me show you an additional deposition
exhibit, and ask that this be marked.

(The docuoient referred to was
marked Armitage Exhibit
Number 10 for identification.)
(Pause. ;
.A. I didn't go on this trip.

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1 Q You did not go?

2 A I did not go, to the best of my knowledge. I

3 will check that, but I'm quite sure I did not go.

4 Q Let me give some lead-in, then, for the

5 record. The documents I have asked you to look at as

6 Deposition Exhibit 10, the cover is a National Security

7 Council memorandum from Oliver North to John Poindexter

8 and the subject was trip to the Central American region.

9 And then it lists a proposed itinerary. At page N-39901

10 it lists the participants and Mr. Richard Armitage is

11 listed as a proposed participant.

12 A Right.

13 Q And then further the trip is explained. You

14 are saying to the best of your recollection —

15 A I did not go on this.

16 Q Okay. Then let me show you Deposition Exhibit

17 11, the trip manifest from the NSC file.

18 (The document referred to was

19 marked Armitage Exhibit

20 Number 11 for identification.)

21 A 1 sure don't remember going. I don't think I

22 went on this trip, but it's easy to find out.

23 Q Okay. "For those of us who are uninitiated in
2 4 these things, the trip itinerary, as I understand it, the
25 manifest with the boxes checked indicating the

UKCUSSIFe

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114

1 individuals who did go on the trip and those portions of

2 ^ the trip they took.

3". A Yes, but, you know, 1 just can't remember this

4", trip with John Poindexter.. I just don't remember i^. I

5 ' don't" think I went, but I better check my file.

" 6," Q * Okay, if yoU would, sir, do check because the

7 NSC records indicate that you did go on the trip.

8 ■ A ^ Eleven to 12 December '85. Okay. I'll have

9 , to, check. I went to Central America in '83 with the

10 Secretary of Defense. I went to Brazil in '83. The only

11 other time I remember being down there was witJ

12 Elliott, Hollering and myself in September-October, so

13 I'll just Check it — of '86.

14 Q^ Yes, if you would, because this memorandum of.

15 record ofthe trip itinerary says, and I quote, "the

16 following individuals Were manifested aboard the

17 ' following aircraft," and then it lists the aircraft and

18 the dates.

19 A By the way, I think the word "manifested" is

20 different from "had gone", but It's easy enough^

21 Q For the record, let me indicate what this trip

22 was to consist of as far as Colonel. North saw it and

23 posted. If you w'duld look at page N-31907, under the

24 heading "Current Situation, Objectives for, Honduras" ,

25 this was to be a trip to Honduras by Admiral Poipdexter

5 be a trip to Honduras J

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9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

uneussw

on the occasion c: his ceir.g -r.e r.e^- Na^icr.a. ^acurity
Advisor under the guise of going to oieet the U.S. Army
military officials.

In terms of the facts or the statements that
are made here, does any of this -- is any of this
something you are familiar with?

A No.

Q I wouiS ask, then, that you check if you took

that trip.

A I will check when I get back

wm^

116

UNGUiSSliP^

116

X Q Now let me show you and have this marked as

2 Deposition Exhibit 12 a series of PROF memos from Colonel

3 North. They have different addressees.

4 (The document referred to was

5 marked Armitage Exhibit

g Number 12 for identification.)

7 I will give you a moment to look, if you

8 would, at the one on the bottom of the first page, and

9 this is a note from Oliver North, Subject: Private Blank

10 Check.

11 < (Pause.)

12 A All right.

13 Q As I read this PROF memo, and it pertains, by

14 the way —

15 A What's the date on this thing, by the way? Do

16 we know?

17 Q Yes. It's right at the bottom. If you flip

18 over before the next PROF memo you will see.

19 A 8/31?

20 Q Well, no.

21 A 12/04 — December 4, 1985.

22 ■ Q It was the week prior to this trip that we

23 were just talking~about. And it pertains to that same

24 trip. As I read this, Colonel North is suggesting that

you have lndic^tfd.|h^t|V«|MM]|*flp willing to go to

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117

1 Honduras and Panama in the event that Admiral Poindexter

2^ couldn't make the trip. Do you recall any discussion

3 " with Colonel North about that?

4 A No. I recall roughly the trip and I recall

5 not going on it. But this — I don't take exception to

6 what he says in here, frankly.

7 Q You agree, then, with this statement that you

8 agree with Ray — I assume that's Burghardt — Don — I

9 assume that Don F. is Fortier — Walker — I guess that's

10 Bob Walker — and I, Colonel North, that White House

11 visibility is essential to the mission.

12 Do you recall what mission they were talking

13 about?

14 A I recall very roughly that the mission was to

15 show t:-.a Hondurans that we were steadfast in our policy,

16 and that's the context in which it says White House vis

17 is more important. I can go down there anytime, but, as

18 I say, I'm quite sure I didn't go.

19 Q Let me ask you to flip over to what is

20 numbered as page 27 in the PROFs. You will see in the

21 middle of that page a little chart of sorts. This is

22 again in a PROF memo from Colonel North to Admiral

23 Poindexter. Let Ble just ask you if before today you've

24 ever seen these equations of how many hostages equate to

25 how many vee

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EWORD 118

1 .A I believe I've seen references in the press

2^ only. I don't think I had a direct chart or anything.

3 Q Now let me as)c you to turn to the next page.

4 This is the same PROF.

5 A Twenty-eight?

6 Q Yes. Colonel North was apparently quite

7 productive when he sat at the computer.

8 A I'm glad I never learned to type.

9 Q And this is page 28, page 028.

10 A I've got it.

11 Q If you will read that first full paragraph at

12 the top —

13 (Pause.)

14 A Okay. I've read it.

15 Q Where he says: "The last op sec concerned

16 that of replenishing Israeli stocks is the most delicate.

17 Meron and I" — and I guess that would be General Meron.

18 A Mindy Meron, I'm sure.

19 Q "Are working with the Israeli purchasing

20 office in New York City". Is that when Ben Joseph works?

21 A That's right.

22 Q "On the replenishment issue, to be

23 accomplished as qQickly after December 12 as possible."

24 As far as you're concerned, you knew nothing about this

25 Issue?

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1 . A As far as I remember, I did not.

2, Q Finally let me ask you to flip over to page 30

3 in these PROFs.

4 A I've got it.

5 Q This is also to — I believe this is to

6 Admiral Poindexter from Colonel North.

7 A All right.

8 Q Subject: Private Blank Check again. He is

9 proposing to Admiral Poindexter — this is again in

10 relation to this upcoming trip - he says: "In each

11 location you would meet with the U.S. Ambassador and be

12 accompanied by General Jack Galvin, the senior U.S.

13 military representative. This approach will provide a

14 plausible cover for delivery of the messages we need sent
to^^^^^^^^^^^^H both whom to

16 congratulate you on your post."

17 Now in terms of your recollection of that

18 trip, whether you did or didn't take it, tell me in your

19 best recollection what the purpose of that trip was to

20 be.

21 A I must state again I'm quite sure I didn't

22 take it, and it was just that. The new National Security

23 Advisor was comin*^ on and that we wanted to show

24 steadfastness with our policy in the region.

25 Q And as far as you can recall there was no

ytmsffi

120

ilNCySHD

120

1 intent that that be cover and that the real purpose was ■

2* . for --

3 A As far as I can recall, that was the only

4 reason for the trip.

5 Q Okay. I only have a couple more.

6 A I owe you after putting you off twice.

7 Q Let me get the last exhibit out of the way.

8 Let me have you mark this as 13. I know 13 is an unlucky

9 number, but we'll just have to end on that one.

10 (The document referred to was

11 marked Armitage Exhibit

12 Number 13 for identification.)

13 This is a PROF memo from Bob Pearson, subject,

14 Meeting on Contra Aid. I will let you read that.

15 A All right. What's the date? 1/24/86.

16 Q Yes.

17 (Pause.)

18 A All right.

19 Q And, if you would, look at the bottom note

20 from Donald Fortier.

21 A All right.

22 Q Is this the kind of session you made reference

23 to earlier when you were talking about putting together

24 the contra aid package to go to the Hill?

25 A Yes. I don't remember it, but that's exactly

md&Mt

121

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121

1 rigjit.

2^ Q As far as I know, you have not seen these

3 communications?

4 A I have not seen these communications.

5 Q They are talking about you, but it's not

6 necessarily that you were involved. As best you know, do

7 you recall this event they are talking about?

g A No, but me — registering a protest for me not

9 being invited to a meeting is a normal bureaucratic

10 business. All of us do it from time to time. I can't

11 quarrel with this at all.

^2 Q But your recollection would be that that would

13 have dealt with the legislative package?

j^4 X How we're going to approach the Hill and all.

15 Absolutely right.

j^g Q Finally, I want to ask you about a couple of

17 individuals and just see if you can tell us what your

13 relationship is, if any, with these people. First, do

19 you know Ted Shackley?

20 A Yes, I do.

21 Q What's the nature of that relationship?

22 A I met him once in 1975. I had returned after

23 the fall of Saigtfh and my boss, Eric von Marbad, had sent

24 me out to the CIA to talk with Ted Shackley about what

25 had gone on in Vietnam, what l had seen - I was there

ii^m

122

UNCLASSiED

122

1 the final day — what was going on with the refugees.

2^ That was my one and only meeting with the man, to my

3 recollection, and the only communication I ever had with

4 him.

5 Q So as far as you know you've never had any

6 dealings with him?

7 A I would not recognize him, I don't think.

8 Q The same question with regard to Thomas

9 Clines.

10 A I met Thomas Clines in I want to say 1982 or

11 1983. Dick Secord asked me to stop and have a drink with

12 him and he introduced me to Tom Clines. I remember it

13 very well because the two of them spent a good bit of the

14 evening in a very congenial way talking about their time

15 together at the Naval War College. It was

16 extraordinarily entertaining. I remsmber it quite well.

17 Q Since that time have you had any dealing with

18 him?

19 A Never seen him or talked to him, to the best

20 of my knowledge

21 Q Finally, Mike Ledeen. Tell us about your

22 relationship with him.

23 A I have" met Michael through originally the

24 bureaucracy. Later he used to work in the State

25 Department and I'd come upon him from time to time.

ind I'd come upon him frc

UNGUSM

123

UNCLASSra

i Later he became a consultant to Noel Koch in Noel's SOFCT

2 role. When Noel left I inherited Michael. I did not use

3 ' him in that I didn't use him for any money. He came —

4 didn't pay him any money and didn't ask him to do

5 anything for me.

6 He would call from time to time and just say

7 hey, this event, some terrorist event in Pakistan and so

8 and so was a bad deal, are you guys thinking of all these

9 angles, something like that. But he came in to see me I

10 want to say September, and it could have been October,

11 but it was late in '86, and he told me of his involvement

12 in the Iranian affair, and he told me that he thought the

13 affair, which had in his mind or as he sketched it out,

14 started as a strategic opening had turned into nothing

15 but an arms for hostages deal, and that he thought this

16 was terribly wrongheaded, and that the policy was on its

17 head.

18 I was very interested to find someone who had

19 been at the beginning. I was unaware that Mike was at

20 the beginning of this adventure with Iran. I checked to

21 see if the Secretary's calendar was clear and took

22 Michael down, where Michael basically repeated the same

23 story for the Secretary of Defense, and the three of us

24 sat around and talked about it was terrible to have our

25 policy on its hea

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124

1 . Q Did he tell you in terms of his role that he

2^ had been involved in negotiating the price with the

3 Israelis for the TOW missiles?

4 A No, he didn't.

5 Q Did he tell you that he had been taken off of

6 this project because he negotiated the price too low or

7 in some way Colonel North was dissatisfied with his

8 participation?

9 A No. He told me he was asked out of it, but he

10 didn't tell me why. I don't remember that he told me

11 why.

12 Q Did you ever ask Colonel North about Mike

13 Ledeen's role in the Iran part of things?

14 A I don't recall asking him.

15 Q Did Colonel North ever tell you — did Colonel

16 North ever discuss Mike Ledeen in the context of the Iran

17 arms initiative?

18 A I can't recall that he did.

19 Q Did he ever tell you he, North, thought Ledeen

20 was skimming money from the operation?

21 A He never told me that. That I would have

22 remembered.

23 Q Did Colonel North ever tell you that with

24 regard to Al Schwimmer?

25 A I had never heard of Al Schwimmer and don't

I had never heard of AIS

125

UNClASSiiH

125

1 recollect Ollie ever saying the name.

2 Q Did Ledeen ever mention Schwimmer's name in

3 this context?

4 A I think Ledeen mentioned Schwimmer in passing

5 when he was talking about his own involvement the day he

6 came in to tell me how the policy was on its head, but

7 not in any way that meant anything to me or that rang any

8 bells.

9 Q Did Ledeen mention Ben Joseph?

10 A No, he did not, to my recollection.

11 Q And, finally, did Ledeen mention Noel Koch in

12 the context of his, Ledeen 's —

13 A No, I don't think he did. I think Michael

14 would have mentioned that, because Noel had left the

15 Department by then, but I don't recall it. I mean, if he

16 had mentioned it, he would have made a big thing about

17 it.

13 Q And finally for the record, a different

19 subject I just forgot to ask. When were you first made

20 aware that any monies may have been diverted from the

21 arms sales to Iran to the contras?

22 A If you don't count the conversation I had with

23 Ollie, when the A'ttorney General said something.

24 Q And that's the conversation —

25 A The conversation _on tlje black phone where he

126

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126

said they're helping us in Central America.

2 ~ ' MR. SAXON: That's all I've got.

3 • BY MR. SABA: (Resuming)

4 Q I have a few more on the Ledeen matter. Do

5 you recall exactly when that meeting took place?

6 A I will try to reconstruct it. It's September-

7 October, to my remembrance.

8 Q Of '86?

9 A Of '86, right.

10 Q Was it your understanding that Mr. Ledeen had

11 not previously spoken to Mr. Weinberger on this subject?

12 A I don't think he had, because nothing of the

13 conversation with the Secretary indicated that he had.

14 He went right through the recitation again in very guic]c

15 fashion with the Secretary and never indicated that he

16 spoke with the Secretary previously.

17 Q Do you recall Mr. Ledeen 's recitation?

18 A In general terms, yes.

19 Q And in revealing his role in the natter there

20 was nothing discussed concerning price; correct?

21 A To the best of my recollection, his thrust to

22 me and again to the Secretary was in here is something

23 that's good for tTie country, a strategic opening to Iran,

24 and yet we've become hostage to hostages. That's

25 terrible. The policy's UDside-dpun. And that's what I

127

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1 r«aeinb«r oo«t keenly about Michael's discussion.
2. Q Did he mention anything about HAWKs?

3 AX can't remember him mentioning anything other

4 than weapons for hostages per se, weapons in general.

5 Q I'm trying to understand what Ledeen was

6 getting at, what the purpose of this was.

7 A When he came in to me it was to sound off on

8 what a terrible thing this was, and that's exactly what

9 h« told ma.

10 Q What specifically did he find to be terrible?

11 A Arms for hostages rather than a strategic

12 opening to Iran.

13 Q Did he have any proposals for a different

14 eeurs* of action?

15 A Hot that I recall.

16 Q Did he propose anything?

17 A He did state that previously he had talked

18 about supporting one small element in Iran who wanted a

19 small supply of either communications gear and things of

20 that nature and they would be more or less our guys

21 inside, but he made a big distinction between that and

22 the provision of weapons to Iran.

23 Q Could these have been HAWK radars?

24 A No. The implication clearly was like radios,

25 small items, just to prove the bona fides of this group.

UNCttSSIflfD

128

uNcussn

12i

1 Q Were these objects to be sold by Israel?

2 A No. That wasn't even discussed. It was the

3 provision of those items. The manner of providing them

4 was not discussed. And this was just in passing in

5 Michael's discussion with us. As I say, his primary

6 thrust was we are being hostage to the hostages by

7 selling weapons to Iran. We should be developing a

8 strategic dialogue and we're squandering that. That was

9 his thrust with us.

10 Q Did he mention by name any particular factions

11 in Iran?

12 A He may have. I can't remember.

13 Q Did he propose that a continued dialogue be

14 direct or through Israel?

15 A He didn't propose to me. He indicated that it

16 was Israel who originally set him up in the discussions

17 in Iran in some manner, either introduced him to Iranian

18 people or got him out on the track to start talking about

19 a strategic dialogue. But that's it.

20 BY MR. SAXON: (Resuming)

21 Q Let me ask one follow-up to that. To your

22 knowledge, did anything in his background prepare him to

23 make judgments ab^ut the prices that should be charged

24 for TOW missiles?

25 A No.

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i. BY MR. SABA: (Resuming)

2 Q On a different subject, I want to understand

3 ' something. Eric von Marbad you mentioned was your boss.

4 A That's right.

5 Q Referring to what period?

6 A He was my boss from roughly April 24, 1975,

7 until mid-1976 intermittently because I didn't get paid

8 when I didn't work and I was paid when I worked, and I

9 was back and forth. I had a home in San Diego. I didn't

10 stay out of the country.

11 Q So you were a consultant in that time?

12 A Yes, I was a consultant to the Pentagon, and I

13 got paid when I worked and I worked for Eric von Marbad.

14 BY MR. SAXON: (Resuming)

15 Q What was his position then?

16 A He at the time was the Principal Deputy

17 Assistant Secretary of Defense, Comptroller, until summer

18 of '75, at which time he took the job in Iran as the

19 Defense Representative and I went over there and handled

20 primarily naval programs for him.

21 BY MR. SABA: (Resuming)

22 Q Let me understand. You handled naval programs
2 3 for Mr. von Marbad?

24 A That's correct. I can remember two

25 specifically — the Charbahar base development and the

littCttSWH)

130

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^ 993 destroyer program.

2 ""* Q Did you become aware at that time or later of

3 ■ programming in which the Portuguese would be involved in

4 rehabilitation of the Iranian navy?

5 A I don't know anything about it.

6 Q Did you have any further business with Mr. von

7 Marbad following his departure from U. S. Government

8 service?

9 A No. He was the Director of the Defense

10 Security Assistance Agency and he left and I've sent him

11 Christmas cards each Christmas. I generally get a card

12 from Eric and Lola back, and that's it. I may have had

13 one conversation with him, but he doesn't want to see

14 anybody in the building.

15 BY MR. SAXON: (Resuming)

16 Q Did you have any involvement with the IBEX

17 project?

18 A I did not. I am familiar with it because

19 press inquiries have driven me to find out what it was,
2 but I did not.

21 BY MR. SABA: (Resuming)

22 Q Do you have any acquaintance with Mr. Willard
2 3 tucker?

24 A I do not know him by that name or probably any

25 other.

ieytSSIHED

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1 --» ■ Q Do you know of a company called Companie

2'. Service Fiduciare, a Swiss Company?

3 A No. I've seen that in the press, but I don't

4 know it.

5 MR. SABA: I don't have anything further.

6 MR. KREUZER: Mr. Secretary, does Mr. Ledeen,

7 is he still associated with the Department of Defense in

8 any capacity?

9 THE WITNESS: No. I terminated his

10 consultancy. I want to stress that we didn't pay him to

11 do anything that I am aware of. Roughly in January, when

12 I saw his name become very prominent in this whole

13 affair, I didn't feel the Department needed it and I

14 teminated his consultancy.

15 MR. KREUZER: Would you say your association

16 with him was strictly business, professional or was it a

17 personal association?

IS THE WITNESS: No, it was business. On two or

19 three occasions he asked me to come out with my children

20 and meet his wife and so on, and I refused to do so.

21 MR. KREUZER: Do you know Mr. Richard Gadd?

22 THE WITNESS: Yes, I met him on at least one

23 occasion, possibl? twice.

24 MR. KREUZER: So that is the extent of that?

25 THE WITNESS: No personal association at all

UNfMlflED

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1 with him.

2 MR. KREUZER: One final question. We were

3 ■ talking earlier about the transfer of responsibility, the

4 possible transfer of responsibility to you for special

5 plans that are under Dr. Ikle. Is the special —

6 THE WITNESS: No. Let me be clear. When Noel

7 Koch had his duties brought under me — that is, the SOF

8 and counterterrorism duties — you asked did he bring any

9 assets with him, and he did. He brought with him a small

10 cell we call special plans, SP. Special Plans is the SOF

11 cell — four or five guys. But they were always under

12 Noel and they are not part of Craig Alderman's shop —

13 just to be clear.

14 MR. KREUZER: The organization that I an

15 interested in is the Defense Security Assistance Agency.

16 Does that come under Dr. Ikle?

17 THE WITNESS: Yes, it does.

18 MR. KREUZER: Would it in this changeover

19 still come under him?

20 THE WITNESS: It has no bearing at all. This

21 changeover affected DSAA not a whit.

22 MR. KREUZER: So DSAA is still under Dr. Ikle?

23 THE WITNESS: Would it help if I drew a

24 diagram to explain it just so you see the charts?

25 MR. SAXON: Sure.

ItNetASStFKD

133

UNCUSSIHED

133

1 (Pause.)

2 THE WITNESS: You have IJcle and then you have

3 ' ASD/ISA, and ASD/ISP as the two Assistant Secretaries.

4 BY MR. SAXON: (Resuming)

5 Q ISP is International Security Policy with Mr.

6 Perle previously?

7 A Right, Mr. Perle previously. Over here you've

8 got DSAA, but in their duties both Mr. Perle and myself

9 have a policy voice in DSAA. We don't have a program

10 voice. I don't tell General Cast how to run a program,

11 how to administer a program. I tell him what the size of

12 the program is going to be. I tell him sometimes when we

13 want to make a point, can't we speed up the delivery of

14 an item to tha|^^^^^| and push someona else baclc in

15 the queue, if there is a policy reason — that kind of

16 thing.

17 We oversee in terms of policy any

18 international agreements that DSAA gets into, but program

19 implementation is all under General Gast, but all of it

20 is under Ikle.

21 Q And General Gast would report directly to Dr.

22 Ikle?

23 A He would.

24 _^^_^^_MR. SABA: (Resuming)

134

UNCLASSIFIED

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UNCLASSIFIED

+^SQa, :135

T~ f ' ■

UNCLASSinED

136

ONCUSSIFIED

uiiuLnoairicD

137

2
3
4

5
6
7
8
9

BY MR. SAXON: (Resuming)

Q Let me ask you about a topic that we've
overlooked, and that is any knowledge you had prior to
these matters becoming public that
government was aiding the contras.

A I had none

WSSPO

138

mmm

1 , V Q ^ou had none?

2 A I had none.

3 ■ Q You knew nothing about the payments of $1

4 million a month?

5 A I knew nothing.

6 Q And then it doubled into $2 million a month.

7 A I'm not sure that's the fact today.

8 MR. SAXON: Off the record.

9 (A discussion was held off the record.)

10 MR. SAXON: On the record.

11 THE WITNESS: I will provide, if it meets your

12 pleasure, a wiring diagram of the reporting

13 responsibilities in the policy cluster.

14 MR. SAXON: Would you address the issue we

15 discussed of DSAA and Dr. Ikle?

16 THE WITNESS: DSAA's relationship with the

17 Under Secretary of Defense for Policy and the

18 relationship with the two Assistant Secretaries in the

19 policy cluster.

20 MR. SAXON: Let me just say, Mr. Secretary,

21 that we appreciate your being with us this afternoon. We

22 are sorry we have taken so much of your time, but we

23 thank you.

24 THE WITNESS: And I apologize to you for

25 rescheduling several times.

umij^sM

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ummED

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1 _ ,, MR. SAXON: On behalf of the Committees, thank

2 you very much.

3 (Whereupon, at 4:10 p.m., the taking of the

4 instant deposition ceased.)

6 Signature of the Witness

7 Subscribed and sworn to before me this day of

8 , 1987.

10 Notary Public

11 My commission expires:

UNCUssm

140

mmM

1 . CERTIFICATE OF NOTARY PUBLIC

I. ANNE PELLECCHIA HOROWITZ, the officer
before whom the foregoing deposition was taken, do hereby
certify that the witness whose testimony appears in the
foregoing deposition was duly sworn by me; that the
testimony was taken by me by Stenomask and thereafter
reduced to typewriting under my direction; that I am
neither counsel for. related to, nor employed by any of
the parties to the action in which this deposition was
taken; and further, that I am not a relative or employee
of any attorney or counsel employed by the parties
thereto, nor financially or otherwise interested in
the outcome of the action.

li^^

.^X

Notary Public in and for the
^8 State of Maryland.

20 ny Commission expires J^-~

UNCLASSIFIEO

ALOCMOH REPORTING COMPANY, INC.
XI P ST- N.W, WASH INQTON. O.C. 20001 (S02) 8S8-9300

141

TOil«IB*iSIFttfc»«» """^'"

Stenographic Transcript of
HEARINGS
Before the

SELECT COMMITTEE ON SECRET MILITARY ASSISTANCE
TO IRAN AND THE NICARAGUAN OPPOSITION

UNITED STATES SENATE

CONTINUED DEPOSITION OF RICHARD L. ARMITAGE
^ Wednesday, July 22, 1987

Washington. D.C

TOpllitllMSSIPI»»

imder provisions of E.0. 1235^\LDBnSON F£=Cfi^NG J^ j^

^ , by D. Slrko, National Security Councfl 3^*7 £—

142

UNeune

1 CONTINUED DEPOSITION OF RICHARD L. ARMITAGE

2 Wednesday, July 22, 1987

3 United States Senate

4 Select Committee on Secret

5 Military Assistance to Iran

g and the Nicaraguan Opposition

7 Washington, D. C.

8 Continued deposition of RICHARD L. ARMITAGE,

9 called as a witness by counsel for the Select Committee,

10 at the offices of the Witness, The Pentagon, Washington,

11 D. C, commencing at 4:05 p.m., the witness having been

12 previously duly sworn by ANNE P. HOROWITZ, a Notary

13 Public in and for the State of Maryland, and the

14 testimony being taken down by Stenomask by MICHAL ANN

15 SCHAFER and transcribed under her direction.
16

UNeUSSffi

143

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141

X APPEARANCES :

2 On behalf of the Senate Select Committee on Secret

3 Military Assistance to Iran and the Nicaraguan

4 Opposition:

5 JOHN SAXON, ESQ.

6 On behalf of the House Select Committee to

7 Investigate Covert Arms Transactions with Iran:

8 JOSEPH SABA, ESQ.

9 ROGER KREUZER

10 ROBERT GENZMAN

11 RICHARD CLARK

12 On behalf of the Department of Defense:

13 ED SHAPIRO, ESQ.

14 Office of General Counsel

15 LINCOLN BLOOMFIELD

UNEUWEft

144

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142

1 CONTENTS

2 . . EXAMINATION ON BEHALF OF

3 WITNESS SENATE HOUSE

4 Richard L. Armitage - Resumed

5 By Mr. Saba 143

6 By Mr. Saxon 159

7 EXHIBITS

8 ARMITAGE EXHIBIT NUMBER FOR IDENTIFICATION

9 14 180

10 15 184

11 16 184

12 17 189

13 18 193

14 19 218

15 20 221

16 21 224

17 22 227

18 23 227

19 24 228

20 25 236

21 26 243

22 27 244

vmmm

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UNeUSHD

143

1 PROCEEDINGS

2 MR. SAXON: Let me say, Mr. Secretary, that

3 this is a continuation of your deposition of May 26,

4 1987, that it is likewise classified at the Top

5 Secret/Codeword level, and you remain under oath.

6 Mr, Saba will begin.

7 Whereupon ,

8 RICHARD L. ARMITAGE,

9 called as a witness by counsel on behalf of the Senate

10 Select Committee and having been previously duly sworn,

11 was further examined and testified as follows:

12 EXAMINATION

13 BY MR. SABA:

14 Q Good afternoon, sir. Mr. Secretary, do you

15 recall what you knew about the circumstances of the

16 release of the Reverend Benjamin Heir?

17 A Can you refresh me when what was?

18 Q Yea. Benjamin Weir was released roughly

19 September 1986, and I would add for refreshment purposes
20

21
22
23
24
25

'86?

I'm sorry, '85.

It was Jacobson who was September or October

86.

That's correct. And I would add that

Pailialy OKhnlfled/Releaaed on

under provisions of E.0. 12
c l>y D. Sirico. National Security Council

146

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144

1 Ambassador Oakley, at that time the Department of State

2 Director of the Office of Terrorism, was informed by and

3 has provided us with information that he was informed by

4 Oliver North shortly after the release with the

5 information that the release was a result of an Israeli

6 shipment of TOWs to Iran.

7 My question to you is whether you discussed

8 that fact of the Israeli shipment of the TOWs with

9 anyone, whether you knew about it.

10 A I don't remember discussing it. I don't

11 remember knowing about it. I remember Weir coming out.

12 I was not a member of the OSG at the time, but it could

13 be that I was informed that it was an Israeli transfer

14 that got him out. I just don't recall it.

15 Q Do you recall if Ambassador Oakley discussed

16 the matter with you after the release?

17 A He could very well have. I just can't recall

18 it. I can't remember having that much communication with

19 Bob until more along the time that Noel Koch was about to

20 leave or was thinking about leaving, and I got involved

21 in the OSG. But it could very well be that I spoke with

22 Oakley.

23 Q Would you have spoken with Arnie Raphel at the

24 time?

25 A If I knew anything, I spoke to Arnie Raphel.

DNCnSSIFIED

147

IINftl^lflED

145

1 Q And would he have spoken to you?

2 A I would hope that he would have spoken to me.

3 Q Do you recall if you and he had a conversation

4 on the matter?

5 A I don't, but I would have talked to Arnie if I

6 knew anything.

7 Q Would it have been your business at that time

8 to know whether or not Reverend Weir's release was in

9 connection with the shipment of Israeli TOWs?

10 A I wouldn't say it would be my direct business,

11 but, as you may have learned in your discussions, I am

12 pretty nosy and frankly think I've learned the lesson in

13 a bureaucracy that the more you know, the more you can

14 put things together. So I'm pretty nosy. I don't think

15 it was my business to know at the time, but I would have

16 been sure curious and wanted to know and would have tried

17 to find out. I don't remember attempting to do it at

18 this time, but I would have tried.

19 Q Is it your testimony that you don't recall

20 whether you knew at the time that his release was in

21 connection with the Israeli shipment of TOWs?

22 A That is my testimony. I don't recall it. I

23 could have been told this, but I don't recall being told

24 it.

25 Q Focusing on the period of the fall of 1985, I

UNCIJtSSIfe

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146

1 want to ask you if you knew four people and, if you did,

2 what your relationship with them was. The first one is

3 Amiram Nir.

4 A I did not meet Mr. Nir, to my recollection,

5 until later in the year. It was after I joined the

6 operational subgroup and I met him at one time in Ollie

7 North's office. I think I've also testified to the fact

8 that I saw him coming out of Mike Armacost's office one

9 day and accused him of dressing like Columbo, but I think

10 those are the two occasions I have met with Mr. Nir.

11 Q When did you first meet him?

12 A This would have been mid to late *86.

13 Q '86?

14 A '86. That's when I remember meeting him. And

15 I remember it because the primary discussions that I had

16 in Ollie's presenA with Nir concerned, I believe it was,

17 a T-72 tank, the provision of a T-72 tank to the United

18 States, were we interested. And I can remember several

19 phone calls from Ollie about whether we should do this or

20 not.

21 Q Did you meet him prior to February 1, '86?

22 A I could have. I don't remember it.

23 Q Mr. Schwimmer?

24 A I don't think I've ever met him. I wouldn't

25 know if I fell over him.

mmm

149

uimffiD

147

1 Q Mr. Nimrodi?

2 A I don't think I've met him and I wouldn't know

3 him if I fell over him.

4 Q Menachem Meron?

5 A I know him very well.

6 Q When did you meet him?

7 A I met him when he was the DAT here.

8 Q For the record, the DAT is?

9 A The Defense Attache from Israel. And that

10 must have been early '83 because I began actively in this

11 job roughly May or June of '83, but I was sitting in

12 awaiting confirmation and doing all the things an Acting

13 can do prior to that, so it would have been early '83.

14 Q I believe you've testified that in mid-
15 November 1985 you were on a trip and, as I recall your

16 testimony, you think you returned on or about the 23rd or

17 the 24th of Kovember.

18 AX should have been smarter when X saw you guys

19 and prepared a little bit for this. Here's when I

20 traveled, according to my records. I haven't memorized,

21 so give it back to me and I'll let you have it for the

22 record.

23 Q All right.

24 A The answer to your question was I was out of

25 town from 15 to 23 November in Germany, Bahrain and

wstrnm

150

UNWn

1 Pakistan, and I was out on the 28th of November, which

2 was ahanksgiving.

3 MR. SAXON: Is this '85 or '86?

4 THE WITNESS: '85.

5 BY MR. SABA: (Resuming)

6 Q And what was the basis for your preparing

7 that?

8 A Because you guys asked me questions about

9 travel dates and I didn't have a damn idea in the world,

10 and I was offended by it because I hadn't been told to

11 prepare for this. So this time I'm not going to make the

12 same mistake.

13 Q Did you prepare that document from your

14 calendars and records?

15 A Calendars and my secretary's recollection.

16 Q So you returned, then, on November 23 from

17 Pakistan.

18 A Yeah. I don't know what day of the week.

19 That might have been a weekend or might not. I just

20 don't remember when my schedule has me landing in

21 Washington.

22 Q And on your return from that trip did you

23 learn that Mr. Gaffney and Mr. Koch were providing

24 information to Colin Powell and the Secretary of Defense

25 concerning a proposal to send HAWK missiles to Iran?

UNCtJtSStFIED

151

UNCmflEO

149

1 - A I don't think I knew Noel was — now I know a

2 i lolb^ore about Noel since I've seen his testimony or at

3 V, least read the newspaper transcripts of it. I was

4 traveling. X now have seen that I talked to Dr. Gaffney

5 on the 6th of December, I believe in preparation to brief

6 the Secretary for a 7 December meeting.

7 Q But I'm looking back a little bit before that.

8 A I can understand. I'm trying to work sy way

9 back. I'm trying to recollect it. I don't remember

10 talking to Hank Gaffney before that. It seems to me,

11 though, that we had seen in intelligence some references

12 to HAWK missiles going to or coming back from Israel. I

13 think I have testified to that.

14 And I think that's what I knew, but I don't

15 remember. I just don't think Nosl told me at the time

16 anything about this. I don't think Hank would, as a

17 matter of course.

You ^^^^^^^^^^^^^I^^^^H

19 When did you learn that?

sure was^^^^^^^^^^^H^^I It

21 might have been an IR intelligence report. I can't say

22 it was^^^^^lat all, but it was an IR or something

23 about an allegation or something of HAWK missiles going.

24 I think it's either hearsay from my colleagues and I'm

25 sure 1 talked to Amie about this. Or it might have

UimStFIED

152

tlNfiU$«D

X*^ '§*iginated with me hearing it somewhere else, that there

2 was « Star of David on these things and that they went

3 ^rom Israel to Iran and they were sent back.

4 But that's kind of my recollection.

5 Q Do you recall when you learned that

6 intelligence?

7 A No, I'm sorry, I don't. It would have been

8 prior to my lunch with Ollie North on 3 December. But I

9 don't know when prior to that. My feeling is probably

10 after I came back from this trip to Pakistan, but I can't

11 say that with 100 percent assurance.

12 Q Your prior testimony was that the Secretary

13 had received the intelligence information and requested

14 you to find out what you could about it.

15 A Yeah, that's right. Either the Secretary

16 himself or through Colin, but it was clear that it came

17 from the Secretary — Colin Powell.

18 Q Did you have access to the hard copy of the

19 intelligence information?

20 A I seen to remember that I saw an IR, which is

21 a message. It 's not|
^^^^^^^^^^^^^^^^^^^^■l saw when the Secretary or

23 when General Powell thought that it was interesting for

24 me to see it. As you will remember, sometime we

25 apparently felt we were cut off from^^^^^^^^Hbut, as

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153

}immm

151

1 it turned out, Art Moreau was not. He was the Assistant

2 to the Chairman of the Joint Chiefs of Staff and he, I

3 since found out, has been giving to Colin Powell or the

4 Secretary interesting things that we weren't seeing in

5 OSD.

6 Some of those X was allowed to see by General

7 Powell. And this continued, I might add, somewhat during

8 the year of '86.

9 Q Do you recall if the intelligence indicated

10 how many weapons had gone?

11 A I do not.

12 Q Do you recall if it indicated how the weapons

13 had gone?

14 A By aircraft. That's my recollection.

15 Q Do you recall specifically what the request

16 was to you? That is, you were to verify the accuracy of

17 this?

18 A No. It wasn't directly concerning the HAWK

19 missiles. The request that was passed to me was to find

20 out is someone talking to the Iranians. I mean, what do

21 you know? Can you find out anything? Can you find out

22 anything about it? That was basically the request. Are

23 we dealing with the Iranians?

24 Q So there was information about shipments of

25 HAWKS by Israel to Iran?

l)NI!tJtS«D

154

UNtymED

^ A I'm not sure that it said by Israel. I said I
vaguely remember that they had a Star of David and all on
1%, but I can't remember if that came in the IR which I
thinlc I saw or not.

Q Who asked you to find out whether we were
talking to ~

A Either the Secretary or Colin, one or the
other. Those would be the only two.

Q What did you understand to be the basis of the
request?

A That they were interested. It appeared from
i^^^^Bthat there was somebody talking to the Iranians
and they wanted to find out who the hell it was.

Q Was the substance of the^^HJ^r the actual
copy provided to you?

A Yes. In some cases it was, but it didn't mean

seemed to be of some concern to the
Secretary and/or Colin Powell. ^^^^^

MR. KREUZER: This information or this^^^H
was coming from Admiral Moreau to you?

THE WITNESS: I think it was not coming to me.
It was going to Powell and the Secretary, and they would
let me see these things. They didn't come up here to me.

msmm

155

^^^ ^I had to go down there when they called me down there.

2 '^ ^ MR. KREUZER: For some reason it wasn't coming

3 " Vin here.

* THE WITNESS: Yea. Wait a minute. Let -s be

5 clear, it wasn't coming into the Office of the Secretary

6 of Defense.

7 MR. KREUZER: It was going to the JCS?

8 THE WITNESS! The Assistant to the Chairman,

9 yes.

*®- KREUZER: Admiral Moreau was getting the

11 information and a^i^jould get certain bits, interesting

12 bit. and Pieces, l^^he would bring th«. up here

13 and show thea.

^* THE WITNESS: No.

" *®- KREUZER: He would take thea to Secretary

18 Weinberger —

" THE WITNESS: To General Powell.

^' *®- KREUZER: Show then to General Powell, who

19 would show thea to Secretary Weinberger?

" ™* WITNESS: I aasuae, yeah. I don't know

21 that. But I don't know that he brought every piece up

22 eithwr. I saw what I saw.

" *®- KREUZER: But this went on for a period of

24 time?

25 THE WITNESS: Yes, it did.

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UNDUSSra

*^ «^ MR. KREUZER: In '86. So like maybe it went

2 otf f<?r 30 days?

3 %f THE WITNESS: Well, it was either '85 or '86;

4 I can't remember.

5 ' MR. KREUZER: Could it have been '85 and '86?

6 THE WITNESS: It could have been for a little

7 while, but I know once Powell determined and the

8 Secretary determined that we were cut off. I think the

9 Secretary took steps to put us back on. Nov whether th«

10 Secretary called^^^^^^^^^Hor whether Colin Powell

11 called^^^^^^^^^Vlcan't say, but all of a sudden the

12 Secretary of Defense was put back on the distribution.

13 MR. KREUZER: But was the Secretary of Defense

14 aware that his was coming from Admiral Moreau?

15 THE WITNESS: You've got to ask him. I wasn't

16 aware of this until later.

17 BY MR. SABA: (Resuming)

18 Q Do you recall when the Secretary spoke to you

19 about this?

20 A I do not.

21 Q Could it have been Tuesday, November 26?

22 A I don't remember. It could have been.

23 Q I raise that date because you are on the

24 Secretary's calendar that morning.

25 A Yeeih. But I must say that I slip into the

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157

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1 Secjii^ary an awful lot without being on his calendar. I

2 . wouldn~*t be surprised if that particular date had to do

3 with the debrief of my trip, frankly. I don't think that

4 this is something that he called me down and had me

5 appear on the schedule for, but it could have been.

6 Q In connection —

7 A I very often, by the way, go in to see the

8 Secretary either before a staff meeting, before everybody

9 walks in, when everybody is gathered out in the anteroom,

10 or lata in the night.

11 Q In connection with the information, your

12 understanding was that there had been information that

13 certain Americans were in discussions with Iranians?

14 A More indications that certain official

15 Americana were in discussions with the Iranians.

16 Q There was a reference to|

18 A That's my remembrance of what triggered me.

19 You may have a different one.

20 Q And at the same time you had an intelligence

21 report indicating that HAWK missiles bearing the Star of

22 David had gone to Iran?

23 A I vaguely remember an IR talking about HAWK

24 missile deliveries to Iran. The Star of David aspect of

25 it is something that either I developed in talking with

UNHbtSStflfD

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156

1 my friends or Arnie or somebody told me. I don't

2 remember that, the Star of David being in the IR.

3 Q So the Secretary, this meeting was with the

4 Secretary when he asked you to find out what was going

5 on?

6 A It was either the Secretary or Colin Powell

7 who said, is someone meeting with the Iranians. There is

8 something going on; find out what you can.

9 Q Did that person tell you what he thought was

10 going on?

11 A No, other than that it was clear there was a

12 suspicion someone was meeting with the Iranians.

13 Q Was there a reference to the HAWK missiles?

14 A There could have been, but I don't remember it

15 in the Secretary's comments at all, or Colin Powell's. I

16 just don't remember that.

17 Q Was there a reference to information provided

18 by Mr. McFarlane?

19 A Not to my remembrance. Listen, I've testified

20 to you before that we had a real problem with Mr.

21 McFarlane 's NSC, not personally with him, but we found it

22 difficult to deal with the McFarlane NSC. We found that

23 we weren't getting what we felt was a sufficient flow of

24 information and we found it much more collegial under

25 Admiral Poindexter. We found that at least people

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159

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157

1 listened to us.

2 So I don't believe that the McFarlane

3 reference would have come up. From my point of view we

4 didn't learn very much from them at all.

5 Q Mr. McFarlane has testified both privately and

6 now in public that at the time of the HAWK shipment from

7 Israel to Iran and at some time during the Geneva summit

8 in fact he seems to recall that he told not only

9 Secretary Shultz, of which we have written confirmation,

10 but also Secretary Weinberger, about the fact of the

11 shipment to Iran.

12 A I've seen that.

13 Q So obviously it seems logical to me that on

14 your return from a trip following the day that McFarlane

15 indicates he has provided the information that you would

16 be requested by either the Secretary or possibly Colin

17 Powell to get more information about it.

18 A I'd love to help you. I just can't say that

19 he brought up HAWKs with me at all. I don't think he

20 did.

21 Q Focusing on really the same time period that

22 Ambassador Oakley or Mr. Raphel or both of them, or

23 either of them, tell you about the weapons that went to

24 Iran, if it helps you —

25 A I'm just going to try to give it to you. My

IINCttSSIFIED

160

l^^^t- T*iB«nbranca is that we didn't know clearly that weapons

2 ^ went'^to Iran.

3 ^-- MR. SHAPIRO: Can counsel please let him

4 finish?

5 THE WITNESS: Say what you will, please.

6 BY MR. SABA: (Resuming)

7 Q I wanted to try to help. He have testimony

8 and interview information that North had told Oakley

9 during the period sometime after the 17th of November

10 but, say, before the 25th, had told Oakley what was going

11 on because ha needed help getting the landing permits in

12 ^^^^^^H and he told Oakley what was going on, and we

13 know that Oakley provided information both up and down

14 the ladder in the State Department on the matter.

15 And, of course, we know that in Geneva at that

16 moment the matter had come to the attention of McFarlane

17 and, in a casual way perhaps, to Secretary Shultz, but

18 certainly by Monday, the 25th of November, which would

19 have been your first workday back, Oakley and Raphel,

20 according to McFarlane, the Secretary knew that Israeli

21 HANKS had gone and they had an idea that some people from

22 the White House were talking to Iranians. That would

23 have been your state of knowledge as a minimum?

24 A That's pretty close to my state of knowledge,

25 except I can't say with assurance that they told me about

UNCUSSIFIED

161

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159

1 weapons going from Israel with any degree of assurance or

2 knowledge. I'm sure that any intelligence that I found I

3 talked to Raphel about it. I would hope he talked to me

4 about it. I just don't have a clear recollection.

5 I'll tell you why. This may sound baffling to

6 you, but it's not to me if you sat in this job. Whether

7 it's an M-16 or a HAWK missile to me was the problem

8 because it was the policy. It wasn't a matter of what

9 was or wasn't going. It was the policy that we didn't

10 like. I mean, I'm not a technician. I told you guys

11 that. It's the policy that bothered me, whether it was

12 M-16S or HAWKS. So I'm not sure, if they told me, that

13 HAWKS would have meant anything more to me than a TOW,

14 would have meant anything more than an M-16. We didn't

15 like it as a Department.

16 BY MR. SAXON:

17 Q In that time freune do you know if Amie Raphel

18 told you that he had learned that McFarlane told

19 Secretary Weinberger in Geneva that the Iranians wanted

20 120 HAWKS?

21 A He may have told me that. I just don't recall

22 it. I trust that he would have shared with me, like I

23 tried to share with him.

24 Q Let me refer to something that's an exhibit in

25 the earlier deposition. I'll give you the number, but

inmstFHD

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160

1 let me give you for your reference a copy. These are the

2 notes of Amie Raphel that were prepared by him on March

3 31, 1987. I ask, Mr. Secretary, that you look at what is

4 page four, at the November 25 entry.

5 It states, and this is Raphel: "My notes

6 state that Bud McFarlane had met Secretary Weinberger in

7 Geneva. Mr. McFarlane had asked for 120 HAWKs for Iran,

8 noting that 100 had been delivered to Israel. My notes

9 further state that Secretary Weinberger responded he was

10 opposed to such an operation."

11 Does this in any way ring a ball with you?

12 A No. But if November 25 is that Monday and the

13 Secretary just returned from Geneva and I had just

14 returned, I tell you frankly I don't think I would have

15 talked with the Secretary yet. So I don't think that's

16 mine. But it could be. I don't think that's my note or

17 my information to Raphel.

18 BY MR. SABA: (Resuming)

19 Q All right. But, in any event, what I'm just

20 trying to establish is, whether they were HAWKs or TOWs

21 or bullets and M-Ss, whatever it is, your position was

22 that our policy was contrary to making such transfers.

23 A Absolutely, yes.

24 Q And that you had come to know that transfers

25 had occurred.

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■^ A Ko. We had suspicions for some time that

2 Isri^pl had been involved in transfers to Iran of we

3 -didn't know what, and frankly I used the Tataran firm

4 because we've seen pictures of radios that are being

5 captured, allegedly captured by the Iraqis on the Iran-

6 Iraq battlefield, and this was one of the reasons that

7 we, along with others, in our administration directed the

8 attention of Israeli visitors to what we thought was a

9 foolish policy of selling any equipment to Iran.

10 I must say I don't think we thought it was

11 U.S. equipment, but it was not a big surprise to us that

12 Israel would be providing equipment to Iran. I would say

13 to me it is a surprise, was a surprise to find it was

14 U.S. equipment.

15 Q It would have been a surprise if you had

16 learned that in connection with that there were people

17 from the White House also talking with Iranians?

18 A Hell, yeth, that would have been a further

19 surprise, but we had suspicions that people were talking

20 froB the White House because of some of the^^^^Hthat

21 we were seeing, and I was trying to figure out who it

22 was.

23 Q Just so I can get your testimony correct, it's

24 your testimony that you had intelligence information

25 about a transfer of weapons to Iran.

ONCtKSSIFIED

164

mmm

By Israel.

By Israel over time, yea.

I don't particularly mean over time.

because

2 ^

5 that's vague. I'm looking very specifically at TOWs or

6 HAWKS in 1985.

7 A My recollection is that I saw, and I have a

8 vague recollection of seeing hard copy IR of a HAWK

9 transfer to Iran by aircraft. Now whether it came from

10 Israel I can't remember if that was on the IR. That I

11 have a vague recollection of. That became — it was

12 obvious to us for some time that Israel had been selling

13 some weapons and equipment to Iran and this was the

14 reason that over time in a series of meetings for a

15 couple of years at least we had been raising with the

16 Israeli officials our point of view that Operation

17 Staunch was the right way to go with Iran.

18 That's my testimony.

19 Q And in addition you receive^^^^^^H

20 A Yes. ^^^^

21 g Did the^^^H indicate or refer to an actual

22 transfer o f weapons ?

23 A ^^^^H and I can't remember when and I don't

24 know how much I saw — I saw what I saw — and I had to

25 go do%mstairs to see it — sometimes indicated — there

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163

I thinJc eventually it talked about
%.what kind, but my recollection is that that was sometime
in '86. I do not re collect seeing specific weapons
mentioned ^^^^^^Hin

Q But the reference was to the fact that there
were people from the White House engaged in conversations
with Iranians about weapons?

A I can't say it was about weapons — that they
were engaged with Iranians. Eventually it cause to be
weapons. I don't remember that when the Secretary
grzibbed me he said people from the white House are
talking about weapons. It was that people from the White
House apparently were talking about — talking with
Iranians. What the hell's going on? What is this?
Because he was indicating to me, and it could have been
through General Powell, that he didn't know about this.
MR. SHAPIRO: In that connection, could I ask
lestion just to cla rify this? Are you talking about
We're talking about ^^^^H and I'm
not sure that we're all talking about the

MR. SABA: Ed, the likelihood is you know more
than I do. I mean, how do I know?

MR. SHAPIRO: I'm just asking to clarify your

UNetiWED

166

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164

^Rk, question, Counsel. That's all.

\^ MR. SABA: I haven't seen it. You saw it, so
•S-I'm asking what you saw.

MR. SHAPIRO: I'm just asking to clarify your
question.

THE WITNESS: I understand you are at a
disadvantage in thi s, and tha t's unfair. But somebody

have seen that^^^^H My understanding wa^^^H
made it a vailable to you guys. I hope someone's seen it.
were^^^^^^mmHl^nd they came up to me or
I went down to see them in a red and white folder that

said SecDef on it or something like that^^

And they were in the ^^^^^^^^^H
I think, and over time and starting late in '85 — and 1
can't tell you when ~ and through a good period of '86
periodically, aa you know, I do travel and when I
traveled I didn't see things and they didn't particularly
keep these, to my knowledge, in a desk drawer waiting for
me, which they could have done, but I think they just
hemded them back to the guy who carries the
aroxind.

So over time there were references to money in

lat I remember. I can't

the

figu res, but it was apparent to me, reading it and what I
knew , ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H

nun

167

mmm

MR. KREUZER: Mr. Annitage, ware those the
reports that you vent down to see, were those the ones
that Admiral Moreau picked out?

THE WITNESS; Well, some of them were, but
later — and I'm now in '86 — they were apparently onea
that were now being delivered to the Secretary of
Defense's office. So I'm sure some of the early ones
were ones that Admiral Moreau let us see, and the later
ones were, as far as I know, ones that came right to the
Secretary.

MR. KREUZER: Did yoj^iav^t^g^down to a
certain place to see of the^^^^^^^^^^H^

THE WITNESS: General Powell's office. There
may have been one or two occasions when one would be
carried up to ma, and, as a matter of fact, now they are
carried up to me. But in general I went down there to
read them.

MR. KREUZER: So the ones that Admiral Moreau
picked out for you to read he would give to General
Powell?

THE WITNESS: He did not pick out anything for

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168

iiNeumED

166

1 me to read, and I don't know that he )cnows I was reading

2 them.

3 MR. KREUZER: Let's say the ones that Admiral

4 Moreau selected would end up with General Powell.

5 THE WITNESS: Yes, that's my understanding.

6 MR. KREUZER: And then you would read those in

7 General Powell's office?

8 THE WITNESS: Yes.

9 MR. KREUZER: And then at some point in time

10 Secretary Weinberger said wait a minute, we are supposed

11 to be on distribution for this.

12 THE WITNESS: That is my understanding.

13 MR. KREUZER: But you weren't able to

14 distinguish, were you, or were you, one from the other?

15 THE WITNESS: No. It was a matter of no

16 moment to me. I only subsequently learned that there was

17 a time that we were cut off, and I talked to Amie Raphel

18 and found he was getting none of this, for instance.

19 BY MR. SABA: (Resuming)

20 Q So what happened was that the Secretary asked

21 you to find out what was going on.

22 A Yes.

23 Q And in that request to you was there any

24 mention of the existence of a recent transfer, whether of

25 HAWKS or TOWS?

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169

\immm

167

1 A No, sir, I don't believe there was.

2 Q So the only basis that you knew it or that you

3 recall you knew at that time would be an IR report?

4 A I could have had subsequent conversations with

5 friends. I don't remember that. I don't recall that.

6 Q And you received that request to find

7 information.

8 A That's right.

9 Q And who did you speak to?

10 A I probably spoke to Bob Oakley, but I can't

11 say with a certainty. I know I had spoken to Arnie. Now

12 Arnie was on the trip with me — this one to Pakistan —

13 as he had an inkling he was going to be the Ambassador to

14 Pakistan and wanted to go out and measure for the drapes,

15 and when we came back we were both engaged, as we would

16 have been, in a discussion, telephone, what's going on in

17 your building since you've been gone, and I'd tell him

18 what's been going on in my building since we were gone.

19 I know that when the Secretary told me that

20 something was going on I kind of figured Ollie would know

21 something eUsout it because he was a very active fellow

22 and very involved with hostages. I could see myself no

23 reason to talk to the Iranians that didn't involve

24 hostages, none, and I think the combination of all of

25 those and maybe rumors from the interagency community led

msmm

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Wbissfe

1 me to ask Ollie to lunch.

2 Q Did you have a conversation with Ambassador

3 Oakley prior to that lunch with Ollie?

4 A I don't remember. I may have.

5 Q And in that conversation by any chance do you

6 recall the topic of a talking paper or points involving

7 the Arms Export Control Act arising?

8 A My remembrance — I have been wrong — was

9 that this arrived after I had my lunch with Ollie, and

10 before the meeting, what I think was the first meeting,

11 as far as I know, with the President in early December,

12 and I think I had that discussion with Amie Raphel.

13 Q With Amie?

14 A Yes, that's my recollection. I could have

15 also had one with Bob, but I'm quite sure I had a

16 discussion with Amie Raphel on this.

17 Q What was the timing on that?

18 A It would have been, I'm sure, immediately

19 after having lunch here on 3 December with Ollie and

20 prior to the 6 or 7 December, whichever date that meeting

21 was. I'm absolutely certain I discussed this with Amie

22 Raphel .

23 Q Do you recall, just to leave that alone for a

24 moment because in the same time frame there were joint

25 U.S. -Israeli talks going on.

ONCDtsamn

171

wMsm

169

1 A JPMG — the Joint Military Planning.

2 Q Do you recall having a conversation that weelc

3 with Mindy Meron? He was to help you, staying in Chevy

4 Chase?

5 A I'm sure I did. If we had it at that time, I

6 would have had it here. He would have come in to see me.

7 Q Do you recall the substance of that

8 conversation?

9 A I do not. The only noteworthy conversation

10 that I remember with Mindy on this whole subject — and I

11 can't give you a date, but my feeling is that it was

12 later in the spring of '86 prior to when Mindy was going

13 to leave his job as Director General of the Defense

14 Agency — he got a call. He was in my office. He got a

15 call from Ollie, who wanted to talk secure, so I let

16 Mindy go out to my outer office to use the secure phone.

17 When he came back I don't remember him telling

18 me the subject of the conversation, but I said to Mindy,

19 you know, you guys are involved with some real sleaze

20 balls. I think I used that exact expression, or

21 scumballs, because Mindy gave me — he was standing — I

22 remember he had just come back in my office and he was

2 3 standing over by the corner of my desk, and he gave me —

24 he's got a very charming smile. He gave me this kind of

25 quizzical smile which I read as, you play the hand you

wmssm

172

UNCutssm

170

1 are dealt. He didn't say that at all. He kind of gave

2 me one of those.

3 That's the only conversation I remember with

4 Mindy on this.

5 Q Continuing to focus on the joint U.S. -Israeli

6 talks in that period of time, did you see Defense

7 Minister Rabin at the same time?

8 A If he was in town I would have probably seen

9 him, but I would not have seen Rabin without the

10 Secretary. I mean, I did not see Rabin other than at a

11 major meeting. But Rabin doesn't come to JPMGs. As a

12 rule this is not his level of meetings. It is down a

13 bit.

14 Q I understand. It was at the Heron level?

15 A That's right. He led their team with their

16 Ambassador.

17 Q We have Mr. McFarlane's testimony and Mr.

18 North's testimony that Minister Rabin in New York first

19 met with McFarlane on the 15th and raised an issue.

20 A Of —

21 Q November, and raised an issue of replenishment

22 for Israeli weapons shipped and to be shipped to Iran.

23 When McFarlane was in Geneva Rabin again calls McFarlane.

24 McFarlame in turn calls — tells Rabin to see Oliver

25 North. Oliver North's testimony was that at that time he

w&mm

173

uNCti^m

171

sought to determine legalities and modalities, I believe
was his testimony in public, as to the means of transfer
of a large number of HAWK missiles.

A So Ollie was looking for the legalities of
doing this?

Q And, if you recall, w« have the testimony that
John and I did with Mr. Koch and Mr. Gaffney because ve
eventually came to produce the week of the 17th to the
21st the Gaffney memorandum which discussed —

A Thank God Z was gone, and that's why Noel was
in on it.

Q Which discussed 500 or 600 HAHKs and then
eventually that number beczune 120. But the testimony is
that that paper was in some way connected with that line
of inquiry.

A Oh, I'm sure.

Q And if that helps you, my question then is at
this time, and we'll look at the period right after your

na we'll look at tne perj

UNIiUmD

174

IWClASSiED

return and we'll take it up to December 7, to stretch it

2 a few more days past Ollie North's lunch, did you have

3 discussions with Minister Rabin as to replenishment

4 issues?

5 A I don't remember Rabin, but I would not have

6 met with Rabin, me, without being with the Secretary if

7 he were in town. That is dead sure. That's number one.

8 Q Mindy Meron?

9 A If Mindy was in town at the time, I met with
him and I would have met with him here. I don't remember
talking about it, but I must say I don't know why Mindy-
I mean, other than to talk about a project they wanted-
would come to me for replenishment, because I don't have

14 the power to replenish. I can't just order DSAA to
replenish. He has to submit an LOA, which has to go
through a normal process, which is something I can't

17 order

He may have; I don't know. I'm not sure I
knew or would know if it was in the context of
replenishment for Israeli weapons which were already
21 delivered.

^^ Q I think I understand, but correct me if I'm

2 3 wrong. Is it your testimony that in this time period you

24 did not discuss with Mindy Meron questions of

25 replenishment of Israeli weapons to Iran, whether

mmsm

175

(/NJMSJW

1 retroactively or prospectively?

2 A Well, I can't say. You guys, when I saw you

3 the last time, used the date 2 January with Mindy Meron,

4 which caused me to go back and look at my calendar. I

5 didn't see him, but I didn't remember then and I don't

6 remember now. Kow retrogressive replenishment of Israel,

7 I just don't remember it. Prospective is a possibility,

8 but I am not sure in the context of they were going to be

9 giving stuff to Iran, because 2 December was prior to

10 having had the meeting with the President. It was prior

11 also to my positively getting Ollie to tell me that he

12 and others had been meeting with the Iranians.

13 So it's very possible I could have talked

14 about replenishment in general because that is one of the

15 subjects, weapons sales in general, that Mindy talks

16 about with me and with Phil Cast of DSAA. But I've got

17 to say I don't remember it being related to this specific

18 case at all.

19 Q All right. Let's go to the lunch. Did North

20 tell you that he had a long conversation about 11:00 that

21 day with Ambassador Oakley on this point?

22 A I don't believe he did.

23 Q Just to help, I am looking at Ollie North's

24 calendar for December 3. It simply notes that around

25 11:00 a.m. he had a call to Oakley. They discussed

.m. he had a call to Oaklev.

176

uNcyism

174

X certain talking points. There's a reference to hostages

2 and Ambassador Oakley has told us that Issues of the

3 transfer were discussed and that North was concerned, but

4 you don't recall it?

5 A I sure don't.

6 Q Did Oakley tell you about this conversation?

7 A I don't recall Oakley telling me.

8 Q Do you remember if Oakley or Raphel discussed

9 that with you toward developing talking points or a legal

10 piece for either or both of your Secretaries?

11 A No. My recollection goes a little the other

12 way. My recollection is Ollie sat right where you are

13 sitting and I sat right where you are sitting and we had

14 this lunch, and after we finished it I talked about Iran

15 and he said yeah, he'd been meeting and doing this stuff,

16 and Z was kind of shocked and said what I told you Z said

17 to hin and told him I thought the Secretary would be

18 appalled and all this had an effect, Z thought, on ollie

19 physically because he thought so much of Weinberger.

20 But after he left my office Z know that Z

21 would have informed General Powell and Amie Raphel that

22 Ollie was meeting with Iranians. So my recollection

23 would be a little different. Though Z don't have a clear

24 recollection, Z'm quite sure Z called Amie Raphel,

25 second probably only to Colin Powell.

ly only to Colin Powell.

MA»tu

177

mmm

175

1 Q What did North tell you in that conversation?

2 A Wall, what I remamber most clearly is he was

3 me eting wit h the Iranians.*
4

^^^^^^^■^^^^^^^^^^^^^^^■~~But was the whole

6 thrust that he and others had been meeting with Iranians.

7 He may even have mentioned Dick Secord at that meeting,

8 though I can't be clear.

9 For me, on the one hand, I was excited at

10 having what I thought solved a mystery, and on the other

11 I was appalled at what I saw was something that my boss

12 was clearly not up to speed on going on, euid that's what

13 struck me and that's my overwhelming remembrance of the

14 conversation.

15 Q What was your report about that conversation?

16 A That Ollie North is doing this and that

17 apparently it's sanctioned by his boss, by Bud. And I'm

18 sure that's the extent of that.

19 g Did you do a written report?

20 A No.

21 Q Did North inform you of the success of the

22 August-September TOW transfer and Reverend Weir?

23 A Now that you ask me, that sounds a little more

24 familiar, that Heir came out as a basis of these

25 discussions or this was a result. That's not really what

uim«D

178

mmm

176

1 stood, out in my mind, frankly. When you say it there,

2 that sounds familiar, but I don't have a clear

3 recollection of it.

4 Q But he talked about the whole mission?

5 A No, you are saying that. He talked about the

6 discussion with Iran and how far he thought they were

7 going to go and all this and that it was hostage-related.

8 Kow that you mention Weir in that connection, I think

9 that's familiar to me. I can't center on it, whether he

10 talked about HAWKs or TOWs. For me again I've got to say

11 that's not what made the impression on me.

12 BY MR. SAXON: (Resuming)

13 Q Do you recall saying anything to him along the

14 lines of but this sounds like trading arms for hostages

15 and we don't do that?

16 A No, that's not the way I talk. That's not

17 what I would have said. This is really crap. How can we

18 do this? I would have said that. I don't know that I

19 did, but that's the way I would have put it to him. He

20 and I ware friends and I wouldn't have been mincing

21 around it.

22 Q Let me ask you one other question.

23 A I would have hit it hard.

24 Q That's a little broader and in a way an even

25 more philosophical question.

)phlcal question.

HASHED

179

ammm

177

1 A Get me on my weak point.

2 Q At any point in this time period did anybody

3 step back here in the Pentagon, as far as you know, and

4 look at the pattern of what was happening, of some things

5 going on with arms to Iran. We've been cut out of ^^^B

8 You had had these problems that you described dealing

9 with the McFarlane NSC.

10 Did anybody — you. Secretary Weinberger,

11 General Powell, somebody — step back and say something's

12 going on here that we don't like, we don't know eibout, we

13 need to raise or discuss?

14 A This is the answer, yes or no — yes, in that

15 something was going on that we didn't know and that

16 caused us all to want to have a meeting with the

17 President to kind of lay this out in front of everybody

18 and get all the guys that had the concern together to

19 give the President his information. I was less shocked

20 about, personally was less shocked at finding that we had

21 been cut out of some bureaucratic action because,

22 frankly, at that time with the NSC and since, as I

23 testified to before, the Lebanon experience, we had a

24 great deal of trouble with the NSC.

25 So Z was less shocked at being found to be cut

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180

UNdASSffl

178

1 out of some bureaucratic action than I was about what was

2 going on. So the answer is we didn't stand back and take

3 a long look at a great conspiracy or something like that,

4 but we did say hey, there's a problem here and we have

5 got to get a handle on it so we can try to fix it.

6 Q And the way that in a sense manifested itself

7 was when you told Colonel North we've got to get the

8 elephants together?

9 A No. I think it manifested itself when the

10 Secretary indicated, either himself or through Powell,

11 that he wanted someone to see what the hell was going on

12 so we could try to find out what was going on, where do

13 we go from here. That would be the manifestation to me,

14 and my comment to Ollie was a private remark based on,

15 certainly, my understanding that Secretary Weinberger

16 wasn't very clued in on this stuff and, number two, what

17 I felt was the case from my constant conversation with

18 Amie Raphel that there's something going on and we're

19 not being plugged in.

20 And that's why I ever dared raise George

21 Shultz' name with Ollie, because I had talked with Arnie.

22 Q Did you get a sense in the December 3 lunch

23 that Colonel North was hearing for the first time that

24 Secretary Weinberger was opposed to what was happening or

25 wouldn't look favorably on it?

mmmi

181

UNfimHED

179

1 A I must say, now that you say it like that, I'd

2 have to answer yes, because I said, when I told him the

3 Secretary would have thought he was out of his mind with

4 this, Ollie looked shocked to me, and I think he looked

5 shocked because he respected Secretary Weinberger.

6 MR. KREUZER: That lunch occurred on what day?

7 THE WITNESS: December 3, whatever day ot the

8 week that was.

9 MR. KREUZER: That was the third of December

10 of '85?

11 THE WITNESS: Yes.

12 MR. KREUZER: Four days before the meeting for

13 the Secretary?

14 THE WITNESS: I don't want to claim credit for

15 having brought about a meeting with the President. I

16 mean, that was my recommendation to Ollie. I'm sure it

17 was also other people's recommendation as soon as I

18 finished that lunch with Ollie, because I know I told

19 Amie what I had discovered.

20 BY MR. SABA: (Resuming)

21 Q Have you seen the paper Dr. Gaffney prepared

22 the week of November 18?

23 A Let me see it. It's probably out of my safe.

24 I probably gave it to you.

25 Q aJW lWf^9l'A<y4l4^fr*M?*^ ^^ might as well make

182

mmm

1 it an exhibit.

2 (The document referred to was

3 marked Armitage Exhibit Nximber 14

4 for identification.)

5 A Did this come out of my safe? I think this is

6 HAWK missiles for Iran. I have seen it. There was one

7 about the possibility of leaks.

8 Q That will come.

9 A This one I have seen, but I don't remember

10 when I saw it.

11 Q Do you remember when you first saw it?

12 A No, I don't. But I have seen it.

13 Q Do you recall whether in asking you to find

14 more information about what's going on any reference was

15 made to this paper or the fact of its existence? This

16 had already been provided. Your testimony is it's been

17 provided the Secretary a week before you engage in this

18 inquiry.

19 A Whether provided by me, I was unaware of it.

20 Q I understand that it was provided, we have

21 testimony, to Powell and the Secretary, so they had

22 knowledge of this paper when they spoke to you, and it

23 just seems unusual to me that having this amount of

24 knowledge about an I iii I I i1 which is substantial they

25 might not have mentioned that to you.

mmm

183

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181

1 . A I don't believe they did. Now Gaffney may

2 have mentioned it. As I say, I now )cnow I met with him

3 in preparation for the 7 December meeting, when I was

4 getting smarter for the Secretary. I know I met with

5 Hank, so he may have mentioned it then. But I've seen

6 that paper.

7 Q Z want to continue with the lunch with Ollie.

8 I'm trying to understand the gist of the conversation in

9 the context of what's going on. Ha told you there was an

10 initiative, told you that he had had a discussion with

11 certain Iranians.

12 A Yes.

13 Q He mentioned that this was in connection with

14 hostages?

15 A Yes.

16 Q Did he mention weapons?

17 A I don't recall. Ha may have, but that didn't

18 stick in ay mind. And he may have mentioned Secord,

19 which does now strike a mora resonant tone because I knew

20 Dick quit* vail at that time, at that lunch.

21 Q Do you remember the context in which ha

22 mentioned Dick Secord?

23 A No, I don't. I just say that's familiar. I

24 think that might have happened.

25 Q Did Ollie mention that the status at that

UflCbARIl^Fe

184

1 point of the initiative involved a proposal for 3,300

2 T0W3?

3 A I don't recall it.

4 Q i-TOWs?

5 A I don't recall it. He may have. He may have

6 done that, or he may have - you know, the number. I've

7 seen it on a piece of paper, but I don't remember Ollie

8 doing it, but it may have been Ollie that brought it up,

9 and I don't know if it was at that lunch or some

10 subsequent conversation. Weapons are not what stands out

11 about that lunch. As I say, what stood out was the fact

12 that we were dealing with the Iranians and the Department

13 of Defense was cut out of it. He may have told me about

14 weapons, but I don't recall it.

j^5 Q so you had the lunch and you made an oral

16 report to whom?

17 A To Colin.

j^a Q To Colin Powell?

19 A Yes.

20 Q And did you provide him any information in

21 regards to weapons or hostages?

22 A I told him whatever I knew at the time. I

23 would have told him as much that struck me out of that

24 conversation.

25 Q M^a^^4 yPHt i?f Si^gf Si°" °* ''^^^ happened

185

\immm

nex^s

A Well, I remember my most vivid recollection is
some frantic working with Arnie Raphel to try to make
sure our bosses were basically singing from the same
hymnal. That I know because I have talked to Arnie
several times on that. That's my most vivid
recollection. But you've got to remember — and I don't
mean this facetiously — my business continues and I was
about to go off, and I had all kinds of things going on
and in between this my most vivid remembrance is working
with Arnie Raphel to be sure our bosses could be
together, feeling that this would kill the program.

Q When did you speak to Glenn Rudd about the
matter?

A I would be guided by whatever Glenn said to
you guys. I didn't remember speaking to hin, but he now
— I think he and Gaf fney came in to see me on 6
December, but I'm not clear on that. Z am not sure.

Q Did you request Glenn Rudd to prepare a
document?

21 A Very possibly. I'm sure if I was in town I

22 would be the guy rec[uesting. But let's see the document.

23 Q Let me show you the testimony as the next

24 exhibit. I have the entire deposition. Actually it was

25 a continuing d%BPf^ion of both Mr. Gaffney and Glenn

186

uNeiASsra

184

1 Rudd taken Monday, June 22, '87.

2 I direct your attention to page three and I'll

3 show you the deposition, which will become our next

4 exhibit.

5 (The document referred to was

6 marked Armitage Exhibit Number 15

7 for identification.)

8 I would then show you, which will become our

9 next exhibit, the paper to which you referred and

10 identified in that deposition.

11 (The document referred to was

12 marked Armitage Exhibit Kumber 16

13 for identification.)

14 You might want to take a look at his testimony

15 to refresh your recollection as well as the paper. And I

16 direct your attention in particular to the number 3,300

17 that's referenced for TOWs.

18 A Got it. Yes, I've got it.

19 Q I guess what I'm trying to understand is how

20 that happened and what was it that caused you —

21 A I don't remember. My feeling is it must have

22 been in a phone call in preparing for this, but I just am

23 not clear on it.

24 Q Mr. Rudd testified that you came to him and

25 asked for the paper. He did not have this information of

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187

UNCiissffe

1 his own knowledge, nor did he get those numbers from

2 anyone but yourself, and there had to be a basis on which

3 you went to him and said I need information about such

4 and such and such, and it's very specific information.

5 My question to you is, who asked for the

6 paper. Was this on your own initiative?

7 A No. I at my own initiative would not have

8 thought up those numbers. I can assure you of that. It

9 was clearly or my remembrance — and 1 can't remember

10 who; it must have been from a phone call, and I can't

11 remember if it was Ollie, if it ceune from the bottom

12 floor, from Colin Powell or from whom. I have no

13 remembrance of that.

14 BY MR. SAXON: (Resuming)

15 Q What's the bottom floor?

16 A I meant the third deck, the Secretary's

17 office. Or Ollie or any of these guys. I just don't

18 remember.

19 MR. KREUZER: It could be maybe Ollie North?

20 It could be?

21 THE WITNESS: It could be anybody. You could

22 name them all.

23 MR. KREUZER: Could it have been the

24 Secretary?

25 THE WITNESS: I don't think it would have been

188

wmm

186

1 the Secretary. It could have been Colin. I can't

2 imagine the Secretary dealing in 3,300s. But I can't say

3 with any assurance that it was at all.

4 BY MR. SABA: (Resuming)

5 Q Are you suggesting the number did not come

6 from Oliver North on the third of December?

7 A I'm only suggesting I can't remember where it

8 came from. It could have certainly come from Ollie on

9 the third or in a subsequent conversation. I don't

10 remember where it came from and I don't remember who told

11 me. Clearly I wouldn't have asked for a paper to be

12 prepared if it didn't have some bearing on the meeting we

13 were about to go to. I just don't do stupid things.

14 Q Mr. Rudd testified that this was done at great

15 urgency. This was kept close is what he was informed.

16 DSAA General Counsel was not involved. This was a most

17 unusual exercise, done in a very short period of time.

18 A For all of us.

19 Q Not in the usual course of business.

20 A I agree.

21 Q I must confess it's difficult to, in the

22 context of all that you have said about policy and the

23 opposition of the Department to the policy, that you

24 would have requested such a document with such specific

25 facts and not have aoy^aCQtLfQtifin ot why you requested

Him

189

md^B

187

1 it. .. >

2 A Well, I can speculate, but I can only do that.

3 I can't remember directly. I would speculate that I was

4 preparing this because it was going to come up the next

5 day. That's the only thing I could speculate. I just

6 don't remember it and I don't remember who told me, but

7 it was clear — anybody who told me a number would be

8 somebody who I would have regarded as requesting

9 information that needed to be answered. I mean, I just

10 wouldn't ask Glenn Rudd or any of those guys to do

11 something stupid, and I just can't remember who it was.

12 And it was extraordinary, and it was very

13 close hold. All that I agree with.

14 Q What did you do with the paper?

15 A Well, I'm sure I provided it to the Secretary

16 for that meeting, but that's my best recollection.

17 Q For what meeting?

18 A For the next day's meeting.

19 Q So you knew there would be a meeting on the

20 7th of December?

21 A Yes, I knew by 6 December there was, sure.

22 Q How did you know that?

23 A You got me. Either Ollie called and told me

24 that or Amie called and told me that, or the Secretary's

25 office called. Somebody told me they were going to have

Bd. Somebody told me the

190

^mmm

188

1 the meeting.

2 Q Who did you give the paper to?

3 A Well, I'm sure I would have provided it to

4 Colin, but I don't remember giving it to him. But that's

5 the way I did things.

6 Q Isn't it likely, then, that Colin would have

7 told you of the occurrence of the meeting and the need

8 for the paper?

9 A It's possible. I don't like your words,

10 because I can't stand behind them. It's possible that he

11 could have.

12 MR. SAXON: I don't mean to be glib. If you

13 don't like ours, just provide your own.

14 THE WITNESS: I say it's likely, it's

15 possible, but it's equally possible that Ollie said one

16 of the things that's going to be discussed is 3,300 TOWs.

17 It's equally possible Arnie said to me hey, I hear 3,300

18 TOWs are the number and we better find out what the deal

19 is and get all the information. This is all possible,

20 but you got me.

21 BY MR. SABA: (Resuming)

22 Q Let me show you another document which I

23 perhaps may have shown to you before and it may be an

24 exhibit, but I will show it to you now. It's a PROFs

25 note written on December 4 by Oliver North. There's a

UNmssm

191

UNmssm

189

1 very long summary of the entire initiative to that point,

2 and ho gives, on the third page of this, a formula and

3 this was also used in the testimony of Mr. Gaffney and

4 Mr. Koch. I'm showing you an unredacted version.

5 A I've got a clearance.

6 Q I just mention it because it's also a public

7 exhibit.

8 (The document referred to was

9 marked Amitage Exhibit Number 17

10 for identification.)

11 This would have been prepared the day after

12 your lunch with Mr. North.

13 A Do you want me to read the whole thing? I see

14 this is what you are interested in.

15 Q I direct your attention to the number in the

16 entire initiative and perhaps that helps you to remember

17 what Ollie might have talked about the day before.

18 A I see it says 3,300 basic TOWs, but it

19 doesn't. And, as I say, it could have been Ollie, but

20 that's not what struck me. You know, I don't think Ollie

21 would have told me about this 3 December, because I don't

22 believe I'd have waited to 6 December for information.

23 I'm not at putter-offer.

24 MR. KREUZER: But on 3 December you imparted

25 some very unnerving news to Ollie, and he was visibly

\mmm

192

UHGMfiD

190

1 upset.

2 THE WITNESS: That was my view.

3 MR. KREUZER: It was your view that you were

4 out on a limb because the Secretary doesn't know about

5 this, and you are way out on a limb.

6 THE WITNESS: I told him that.

7 MR. KREUZER: So he had to be unnerved and he

8 left here, but within three days somebody came back with

9 a task here for point papers on I-TOWs, I-HAWKs, and a

10 Possibility for Leaks, which is a legal opinion paper by

11 a man who isn't an attorney.

12 THE WITNESS: A Possibility for Leaks I

13 believe was probably done between me and Raphel and with

14 some help from DSAA, not legal counsel. But I don't

15 know. You're saying that that was all one tasker and you

16 are a better witness than I am. I don't know that at

17 all. I think The Possibility for Leaks is me and Arnie.

18 This is my remembrance, and it wasn't a tasker, I don't

19 think. I think it was us. I just don't remember, and I

20 don't remember how the tasker got here.

21 MR. KREUZER: So, let's see. The I-TOW and

22 the I -HAWK paper, would that have come from, say, either

23 Colin Powell or Ollie North, the request for that?

24 THE WITNESS: Yes, but it could have come from

25 Arnie. It wouldn't have been a request. It would have

UNCbmtHED

193

UNGUSSra

191

1 been more along the lines of this is what's going to be

2 discussed, but I doubt that it came from Arnie, but it

3 could have. I just don't remember who gave me this

4 information. I would say Ollie was the most probable.

5 But I don't thinlc he would have done it 3 December

6 because I don't think I'd have waited until 6 December to

7 ask Glenn Rudd to do it for me. That's just my own

8 habit.

9 MR. KREUZER: So that would have come maybe

10 the 4th or the 5th or maybe even the 6th?

11 THE WITNESS: Possibly. I can only tell you

12 my habit is not to sit on things. So I don't sit on

13 things.

14 BY MR. SAXON: (Resuming)

15 Q Mr. Secretary, let me focus on one different

16 issue for a second and ask you since we've been talking

17 about 3,300 I-TOWs Exhibit 16, which is what we call the

18 TOW paper, has a little bit about HAWKs, but also some

19 about TOWS. And Mr. Rudd testified that he was involved

20 in putting this together for you, and it went to you.

21 The statement is contained in it, and I quote:

22 "Based on the numbers, the impact on Army of shipping

23 3,300 I-TOWs immediately would be serious but not

24 intolerable." Do you recall taking note of that sentence

25 in this, and do you recall any discussion about the

82-690 0-88-8

194

mmwiBi

1 readiness impact?

2 A with the Secretary or with anybody?

3 Q With anybody.

4 AX don't remember it with anybody outside the

5 Secretary. I don't remeatoer it directly, but I've got a

6 hazy recollection that the Secretary had a concern for

7 readiness, U.S. readiness.

8 Q On the issue of 3,300 I-TOWs?

9 A Whether it was on I-TOWs or HAWK spare parts,

10 I don't know. I can't remember. But I mean this is

11 something he gives some weight to. But whether the paper

12 had the information or whether we discussed it across a

13 table I can't recall.

14 Q Well, the HAWK spare parts didn't come until

15 April '86.

16 A Well, then it might have been the TOWs. I

17 just can't remember that it was TOWs, but I've got a

18 vague recollection of the Secretary being concerned with

19 readiness as a general proposition, yes. But I can't be

20 more precise.

21 BY MR. SABA: (Resuming)

22 Q Did you provide the information in this

23 exhibit or any part of it to Oliver North?

24 A I may very well have. If he asked for it, I

25 would have provided it to him as well.

mmsm

195

mmmm

193

1 Q On the 6th of December?

2 A Whenever. Whenever they gave it to me.

3 Q I notice that in the notebooks of Mr. North on

4 the 6th of December there is considerable information

5 about TOWS, including the same formula which I showed you

6 in the PROFs notes and reference to the 3,300 TOWs and

7 very much the same information.

8 A I might have called it to him. I don't know

9 that I sent the paper. But it could very well have been.

10 Q I want to enter another exhibit, and the

11 second document is called "Possibility for Leaks".

12 A Yes. This did come out of my safe.

13 (The document referred to was

14 marked Armitage Exhibit Number 18

15 for identification.)

16 Q I'd ask you to take your time and take a look

17 at it and tell us what you know about it, and feel free

18 to look at the deposition of Mr. Rudd and Gaffney.

19 A You want me to recall first and then look at

20 tha deposition?

21 Q As you like. I want you to feel comfortable

22 with your testimony.

23 A I'm telling you the truth as I know it, so I'm

24 comfortable without looking at their deposition. This

25 looks to me like something I would have asked them for —

IINJMSSm

196

UNCOSSIflED

194

1 the legality surrounding this problem. I mean, that's

2 my remsmbrance. I remember very clearly discussing with

3 Arnie Raphel kind of the legal problems.

4 Now the reason that you made a comment about

5 you're discussing things with people that aren't lawyers,

6 I will recall for you that at least two buildings were

7 appalled at this — this and the State Department — and

8 that, number two, that it was our fervent hope that this

9 thing was going to be killed. Number three, Arnie Raphel

10 had worked in PM. He had been the Deputy Director of PM,

11 Political-military bureau at State. As such, he had the

12 arms transfer policy hat for the State Department, who

13 has the lead in this issue.

14 We're technicians here in the Defense

15 Department. He was very well versed on the intricacies

16 of the Arms Export Control Act of necessity. He had held

17 the job.

18 Q Mr. Raphel?

19 A Raphel. So I can remember vividly talking

20 with him the ins and outs. I probably even read him this

21 pap«r, and I'm sure — I have a very vivid memory that he

22 gave me some knowledge of what was legal and illegal.

23 BY MR. SAXON: (Resuming)

24 Q Are you able to characterize the discussion?

25 A Did you want me to look at Rudd'a testimony?

UNtUtSStFe

197

mmssm

195

1 MR. SABA: No. We'll turn to some more

2 specifics, but go ahead, Mr. Saxon.

3 BY MR. SAXON: (Resuming)

4 Q Let me just see if you can characterize your

5 discussion with Arnie Raphel and I'm going to give you

6 some choices, and if none of them apply, that's fine.

7 A Thanks. I'm comfortable.

8 Q Do you recall what I'll call the legal

9 discussion where you were talking about the Arms Export

10 Control Act, the provision and so forth?

11 A Ves.

12 Q Being in the context of what are the

13 provisions that apply and that govern so we can brief our

14 principals so they'll know, or what are the impediments

15 to this, since your boss and my boss don't want it to

16 happen and go forward, so we can help them shoot it down?

17 A I frankly think we saw them both as the same

18 thing. I mean, the legalities would be impediments. So

19 I don't know that we would have used the word how do we

20 block this. There was no question at the staff level the

21 advice to the principals was going to be this is a bad

22 deal.

23 So we wouldn't have used the term

24 "impediments'*. What are the legalities surrounding arms

25 transfers? what are the parameters that the bosses have

\immm

198

iiNemn

196

1 to take into consideration? That I remember. I don't

2 remember using the word "impediments", but it was clear

3 this is what our whole focus was — my whole focus, and I

4 believe Arnie shared that.

5 BY MR. SABA: (Resuming)

6 Q In the Possibility for Leaks the very title of

7 the document might suggest certain things. What did you

8 understand to be the purpose of the paper?

9 A I think I was looking for what were th« ways

10 to do this quietly. I don't know whether I would have

11 used the term "Possibility of Leaks" as the heading. I

12 possibly did, but I don't think so. I think I would say,

13 listen, if this wants to be done, how can it be done

14 legally? What are the legal parameters?

15 Quietly. I mean, obviously it would have to

16 be c[ulet.

17 Q Why?

18 A Well, because we thought selling weapons to

19 Iran was a violation of everything from operations talks

20 to hostages. We didn't think we'd ever be able to

21 explain it to our modern Arab friends. We thought it

22 would make us look like idiots in Europe, where we had

23 finally made some progress on terrorism, et cetera, et

24 cetera.
Why wasn't the question put to Jerry Silber?

wmmm

199

ymsstfe

1 A I may have said don't let anybody else see

2 this. I'm sure I would have said to either Hank or to

3 Glenn. Just use your collective )cnowledge because we

4 want as few people to know about this as possible.

5 Q Who is "we"?

6 A Me and the Secretary. The Secretary said this

7 is a very close hold.

8 Q So it was the Secretary who asked you to do

9 it?

10 A No. It was the Secretary who asked me to find

11 out, but when I told him or told Colin what it was, I

12 then had to staff him up and told Colin that I would

13 staff the Secretary. The Secretary wants to keep this

14 very quiet. I mean, it was our hope to just kill it and

15 it would go away and we would never see it again.

16 So I would have, as a matter of course,

17 cautioned Glenn and Hank do it yourself. You guys have

18 been in this business for 20-odd years. You know the

19 stuff. Give me what I need.

20 MR. KREUZER: The Secretary asked you to find

21 out about this thing that's called Possibility for Leaks?

22 THE WITNESS: No. The Secretary asked me to

23 find out if anyone was talking to Iran. Eventually we

24 got word that there was going to be a meeting of the

25 elephants, as I called them. 1, then reported I will

as I called them. I,±h€

yNEt«!HtB

200

UN8UWW

198

1 staf ^ the Secretary up to Colin. Colin reported back to

2 me that's fine, but keep it quiet, which I would have

3 done without any caution from the Secretary of Defense.

4 And I'm sure that I would have fully told Hank

5 and Glenn don't let this get out of your sight. It stops

6 with you. It is not unusual in this business for the

7 Secretary to turn to me or one of my colleagues and say I

8 need your advice on X. I don't want it staffed by

9 anybody; I want your advice. Give me what you've got

10 now.

11 I've had occasion to go in and see him on some

12 subject matter and he'd say, look, I need to know about Y

13 and I don't want to ask officially. Can you tell me what

14 you know about it? And I'll give him as much opinion as

15 fact. So that in itself, I mean, a request to keep

16 things quiet is not totally unusual. But this whole

17 program was bizarre.

18 BY MR. SABA: (Resuming)

19 Q And in your request to Mr. Rudd you also asked

20 about price and readiness issues?

21 A I guess I did.

22 Q And I take it you instructed him to draft —

23 A I would bet price was what somebody had asked

24 me, and I would bet that readiness was probaOsly something

25 that I put cy^fi^ J|^t-tbe^DUi^QP-±hemselves, because

201

\immm

they would have to take these stocks from the Army and,
aa-. matter of course, we were interested any time we '
draw down our Army stocks what the readiness is. So they
may have added it of their own free will, i u^e to
5 think that I brought it up.

Q Who do you think "they" would be?
A "They", Hank and Glenn, the DSAA body as a
8 whole. They do have to consider readiness.
^ BY MR. SAXON: (Resuming)

" ° ^^'°" "« 5«t °« Of a point you made a moment

11 ago, you said that this was very close hold.
^^ A Yes, sir.

Q Why would this document, the one Possibility
for Leaks, and the TOW paper and the HAWK paper - i
think they are all classified at the Secret level, is
that unusual, given how sensitive this was?

A No. I think that's what the boys felt, i
didn't Classify it. I think other, did. But I don't
taow. Whether it's Secret or Top Secret, if you give it
to the press you are still in violation, as far as I'm
concerned, with all of the statutes. They classified it;

17
18
19
20
21

22 I didn't.

BY MR. SABA: (Resuming)
Q Who's "they"?

mmmw

202

UNfibwe

200

1 MR. KREUZER: But you know Or. Gaffney and Mr.

2 Rudd. Do you know the General Counsel very well, Mr.

3 Silber?

4 THE WITNESS: I work with him on a regular

5 basis, yes.

6 MR. KREUZER: So it was just your choice to

7 limit it to Gaffney and Rudd?

8 THE WITNESS: That's correct. I would have

9 limited it to Gast, had he been around, and I'm sure he

10 wasn't in town or I would have had him — General Gast.

11 BY MR. SABA: (Resuming)

12 Q I take it that the paper was prepared with a

13 contemplation of the possibility that a third country

14 would be involved in the transfer to Iran.

15 A Well, apparently that must have been the

16 instructions I was working under. I don't quite remember

17 it that way.

18 Q Referring specifically, there's a reference to

19 the legalities of third country transfer provisions of
2 the Arms Export Control Act.

21 A That also could refer to Iran. Iran we'd have

22 problems because we could not guarantee the third country

23 transfer from Iran. I mean, they might give it to I

24 don't know who — Libya — and we couldn't guarantee

25 that, so I don't know what that particularly refers to.

mmmB

203

20
21
22
23
24
25

\m6usss®

201

in the questioning in Mr. Rudd's deposition

»- 17 "IS it safe to say that
Mr. Saxon asked him, on page 17, Is « s

the paragraph on page two is written in contemplation

that Israel would transfer the missiles to Iran?"

Witness Rudd: "Ves." And the testimony goes on.

we questioned Mr. Rudd on this and it was his

contemplation that one possibility for transfer -

. That's fine. I don't argue that. That's

1
2
3
4
5

10 fine.
^^ Q would you say also that the two documents,

.a..n to,.».r, also aa.r... .h. l.sue o. r.pl.nl.^.nt

13 of Israeli —

;, X.a have to see them again. I don't )cnow that

15 they did that.

^. SHAPIRO: Which document are you referring

17 to. Counsel?

«,. SABA: Both of them. I split them, and

19 they are two.

THE WITHESS: W.U. I ..on't !a,ow ho. you com.

„ th« c=„=lu.lo„. .ut your provlou. point ..out th.
X„t p«.,r.pn o„ p.,. t.o o. t.. P.p.r. t.. Po..iMUty
.or L..«.. couW .. int.rpr.t.* .. h.vln, I.r..l in .in..
thU «.it.,. Exhibit i., .na I aon.t ^o. .h.r. I.ra.l
i. in h.r.. I aon.t ... any r...r.nc. to third oountry

iimssra

204

mmms

202

1 transfers.

2 BY MR. SABA: (Resuming)

3 Q But I was asking you If that was what was

4 contemplated.

5 A You know, I think It could have been, but I

6 don't remember It clearly. To me just doing it was the

7 bad thing, not how it was done, other than trying to make

8 it legal. The prospects for leakage of shipment of I-

9 HAWK looks to me like this is in response to a direct

10 question if we wanted I-HAWKs immediately where we would

11 get them and where we would take them, and I-TOWs

12 immediately where would we get them and where would we

13 take them.

14 I'm not sure that this particular paper would

15 have necessarily been explained as going to Iran. I'm

16 not saying that we didn't say that or I didn't say it to

17 Glenn or something, but I'm just saying that it's not

18 necessarily indicated here. I would like to think,

19 frankly, that I gave them a degree of protection from

20 this thing by just asking the specific question I needed

21 an answer to rather than how it would be done. In

22 combination of discussions with me and Mr. Koch, who I

23 have subsequently learned was involved in this, too, we

24 could have mentioned Israel.

25 Q Bu%^--Rudd and Gaffney have both testified,

i%^(r.^udd and Gaffney h

iWsfFe

205

wiusn

203

and the testimony is also here that was not made public,
that th»y understood from you that Israel was involved.

A No problem. I don't argue with it. I would
have told them whatever I thought.

Q But it's your testimony that you don't have
any recollection where the numbers came from?

A No. I can't recall who, but I would say that,
one, I would not have pulled it out of thin air, and,
two, it would have to be somebody who had some authority
or I wouldn't have tasked the OSAA to do something like
this.

Q And who would have greater authority here than
yourself?

A Well, not greater authority. Look, we've
already seen, I think it's become painfully clear to most
of your bosses and painfully clear, embarrassingly clear
to the rest of us, that the National Security Council,
when a staff officer asks, whether it's Ollie or anybody,
generally you respond. They ask for information all the
time, m fact, ISA is correctly the point that all the
other agencies are supposed to come to when they want to
talk to different parts of this building. We are the
liaison between all the agencies.

So, as a matter of fact, we would respond to a
query from an NSC staff officer even if he wasn't Ollie.

mmm

206

:ret/

TOP SECRET/CODEWORD 204

1 Q But these papers were provided, you said, to

2 either General Powell directly or to the Secretary.

3 A Yeah. I'm quite sure I would have given then

4 to Powell and not to the Secretary.

5 Q So if Ollie North requested them, you might

6 have given the information to Ollie North?

7 A I'm sure I would have.

8 Q But that wouldn't have caused you to give

9 those same papers to the Secretary in preparation?

10 A I don't think so.

11 Q Or was it your understanding Ollia asked you

12 to do this to give to the Secretary in preparation for

13 the meeting?

14 A My understanding is I don't remember who asked

15 me, but clearly it was in preparation for the meeting.

16 The timing suggests that.

17 Number two, I would have had no reason to

18 withhold that information from Ollie North.

19 MR. SAXON: Do you recall if this was

20 distributed at the December 7 meeting?

21 THE WITNESS: I don't remember if I knew it

22 was or not.

23 BY MR. SABA: (Resuming)

24 Q Do you recall any discussions at that time of

25 a draft Finding, a Finding which had been drafted in the

UNctiBsifinr

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UNCUSW

205

l«ait w««k or two of November and which came to be signed
on December S?

A I have no ]cnowledge of It.

Q Authorizing?

A No.

Q Did you have any discussions about these
matters with anyone at that time, the time being the last
week or two of November, the first two wee]cs of December,
with anyone at the CIA?

A I sure don't recall it. I'm trying to think
who was DDO then. Who was DDO then? Was it Clair George
then or was was^^^^^^^^H

Q ^^^^^H Clair

A I don't have any recollection at all. I was
just trying to think of something that could jar me. ^^M
^^^^^Hwould have been —

Q McMtdion was aware.

A McMahon was the Deputy.

Q Yes. McM2ihon was aware of the matter at the

20 time.

21 A Deputy until Bob Gates, who is a much closer

22 friend and colleague of mine. I didn't talk to the

23 Director or the Deputy Director that often. It wae a

24 matter of some moment when they called me. But the guys

25 from the different regions and the DDO and the DDI, they

W^SJfFffO

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206

1 talked to me quite often, but I don't recall talking to

2 an^^of them on this. I mean, I know John McMahon did not

3 talk to me about this. I would remember that.

4 MR. SAXON: Do you recall talking ^o^^H

5 ^^^^^^Habout any of these matters?

6 THE WITNESS: Z don't recall it. I wouldn't

7 be surprised if later in the year of '86 I took a few

8 shots at^^H I remember talking to Charlie Allen on the

9 outskirts of our 0S6 meetings about this.

10 BY MR. SABA: (Resuming)

11 Q In any event, it's your recollection, then,

12 that you provided these papers to Colin Powell or the

13 Secretary.

14 A It's a general recollection that I would have

15 provided to Colin. I would not have walked in to the

16 Secretary with these papers. I just wouldn't have done

17 it.

18 Q Do you recall having a discussion prior to

19 that meeting on the 7th with the Secretary about the

20 matter?

21 A I do.

22 Q All right. Can you recall when that meeting

23 was?

24 A Gosh, I've thought a lot about it. It was

25 either late on the 6th or early morning on the 7th. The

uNtossra

209

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1 Secretary was leaving town. I like to think it was early

2 morning on the 7th, if that's a Saturday.

3 Q Yes, that's correct.

4 A As I seem to recall,.! was in gym gear, which

5 is what I wear around here on Saturdays, but I recall

6 very clearly having a discussion with the Secretary in

7 preparation for this meeting.

8 Q And can you tell me about that discussion?

9 A Yes, I can say that I started to go through my

10 litany and the Secretary would finish sentences for me,

11 and that I indicated my understanding from staff was that

12 Mr. Shultz would be with him on this and that ought to

13 have a salutary effect. And the Secretary went through,

14 I remember very clearly, all the arguments that I had

15 laid out, plus the legal argiiments which I had mentioned

16 in passing, and that he had absorbed.

17 I have never been more comfortable briefing my

18 boss in my life.

19 Q Did he indicate to you what he knew about the

20 matter?

21 A He did not.

22 Q Did he indicate to you what he expected would

23 happen that day?

24 A No. His whole discussion with me was what a

25 terrible and stupid affair tilj^^ifi^ld be-

d stupid affair thj^^^^

210

2 that had occurred prior to that day?

3 A Not to my recollection.

4 Q Did you discuss your. lunch with Ollie North?

5 A I think I had done that previously to Colin.

6 1 don't remember discussing it again.

7 Q Did you discuss with him a wrap-up of

8 intelligence information that you had earlier discussed?

9 A- No, I don't recall that.

10 Q Did you discuss with him your discussions with

11 the people at the Department of State?

12 A I'm sure I did, because I have a clear

13 remembrance of saying Mr. Shultz, I was told by staff, is

14 going to be with you on this and that ought to have a

15 good effect or salutary effect and that it ought to get a

16 change and getting a smile from him. So in that context,

17 and I'm sure I mentioned Arnle's name, because he knew

18 that Amle and I were dealing.

19 Q Did you provide the Secretary with any

20 information that was provided you by Arnie?

21 A I'm sure I did. Whether I said this is what

22 Amia says or this is staff view or my view, I can't say.

23 I would have probably taken credit for it.

24 Q Assuming that Amia would state that ha had

25 told you about the HAWK shipments —

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211

UNOtftSffifi

209

1 „ ,. A Assuming that Arnie would state that ha told

2 me about the HAWK shipments?

3 Q Would you have a recollection of telling that

4 to the Secretary?

5 A No.

6 Q That you had information about the fact that

7 there had been a HAWK shipment?

8 A No. Why would I assume that Arnie told me? I

9 mean he either told me or he didn't. I don't remember

10 it, but I remember having a discussion about the intel

11 with Arnie and what is this and what do we know and all

12 this.

13 Q Let me ask you more direct. Did you tell

14 Secretary Weinberger that you had information from the

15 State Department that there had been a HAWK transfer?

16 A I don't think so, and I don't think I had that

17 inforBation. That is not something I think I knew.

18 HR. KREUZER: But you got information from

19 Colonel North on the third, when you had lunch, that he

20 gave you.

21 THE WITNESS: That's what you're telling me.

22 I'm saying he could have; I don't remember it.

23 MR. KREUZER: You don't remember getting that

24 information?

25 THE WITNESS: No, I don't at all.

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RD 210

1 ^ BY MR. SABA: (Resuming)

2 Q Did the Secretary then brief you about the

3 events that occurred at the meeting at the White House on

4 the 7th?

5 A He either did that day, but I rather think he

6 might have done it Monday or so, but it could have been

7 Sunday. But yes, he did.

8 BY MR. SAXON: (Resuming)

9 Q Before we go to the meeting itself, let me ask

10 one more question. In your pre-December 7 briefing of

11 the Secretary, whenever that was — late on the 6th or

12 early on the 7th — apart from the question of to whom

13 you gave the briefing paper which we have discussed you

14 indicate you are not sure if you gave it to him directly

15 or General Powell, and that's fine.

16 A I don't think I would have given it to him

17 directly.

18 Q Do you recall if he had it in hand and did

19 either of you have paper which you looked at or referred

20 to or talked about?

21 A I have a recollection that one paper I had in

22 hand talked about the Arms Export Control Act, and I

23 think I probably had jotted down as a memory aid my own

24 views in detriment to allies.
And do you recall

iimsstro

213

wmn

1 A It was not a staff paper. It was typed; I

2 know that.

3 Q Do you recall if he had any paper in hand that

4 he intended to take with him and that he might have

5 referred to?

6 A No, I don't.

7 BY MR. SABA: (Resuming)

8 Q I am about to leave these papers.

9 A Are you going to leave them with us?

10 Q Well, that's my last set of questions. Why

11 didn't we see these until we had a more extensive

12 examination? We had made several documentary requests.

13 A Whoa.

14 MR. SHAPIRO: Counsel, any such question is

15 properly directed to me at another time.

16 MR. SABA: No. I think it's a valid question.

17 THE WITNESS: I'd like to get on the record on

18 this and let Ed answer the question. You know the

19 answer. You can take care of that. But I, when we

20 received documents searches, specifically ruled myself

21 out of my own documents and did not review the documents

22 and would not, and assigned someone else to do it because

23 I 'could smell a rat coming and I wanted to make sure that

24 I was above-board in terms of cooperation.

25 And I asked Line Bloomfield to review all of

umiDssro

214

UNELASSMO

212

1 my files and anything that was in my files came forward,

2 I think through you, to them in as timely a fashion as we

3 could find them. So I feel, frankly, as John Poindexter

4 says, no regrets for that because I didn't review them,

5 because I wanted to keep clean on this and, number two,

6 gave access to everything to someone else so we could

7 make sure that nobody could level a charge that we

8 weren't fully cooperating and someone who didn't have a

9 vested Interest in the document search.

10 BY MR. SABA: (Resuming)

11 Q Where were the documents?

12 MR. SHAPIRO: Which document, Counsel?

13 MR. SABA: These two exhibits.

14 MR. SHAPIRO: Would you identify them, please?

15 MR. SABA: Which exhibit numbers are these?

16 Exhibit 16 and 18.

17 MR. SHAPIRO: If you know.

18 THE WITNESS: Well, I assume they came out of

19 my safe. I don't )cnow where they came from. I assume I

20 gave everything I had.

21 MR. SHAPIRO: In fact. Secretary Armitage just

22 told you that he did not personally participate in the

23 search.

24 BY MR. SABA: (Resuming)

25 Q Do you know the circumstances whereby they

mssmm

215

mmmm

1 were provided to us?

2 ""* A I don't.

3 Q Did you discuss them with Mr. Rudd in June of

4 this year?

5 A Yes. I asked him after my testimony what was

6 going on, what went on.

7 Q And how did that ~

8 A Well, I remember him having a different

9 opinion about whether he talked to me or Noel on one
meeting, and I can't remember which one it was, and I
pointed out, gee, I couldn't have talked to you then,
Glenn, I was out of town. He said, oh, yeah, I must have
talked to Noel. That's my clearest remembrance.

^* Q Do you recall Mr. Rudd coming to you on

15 approximately the 15th of June and discussing these

16 papers with you. Exhibits 16 and 18?

■'■'' A I'm sure I would have asked him what went on,

18 what's your remembrance.

^® MR. SHAPIRO: You mean the papers specifically

20 or the substance of the papers or the substance of the

21 deposition or testimony. Counsel?

^2 MR. SABA: The whereabouts of the papers.

^^ MR. SHAPIRO: The whereabouts of the papers at

24 what time?

^^ MR. SABA: Approximately the middle of June.

mssm

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UNCLASSKe

214

1 THE WITNESS: I think I may have asked Glenn

2 down after talking with you guys, saying, Glenn, these

3 fellows asked me some questions about meetings with you

4 that I couldn't recall. And he said whatever he said

5 about, yeah, I told them I met with you at such and such.

6 And I remember saying that I was out of town at that

7 time, and then he or Hank — it was one of them; it might

8 have been Hank — said yeah, maybe it was Noel Koch that

9 I met with, yeah, that's right — something like that,

10 which was a relief to me, and I'm sure I said what's your

11 remembrance, because I didn't remember it at all.

12 And prodded by 'that discussion with either

13 Hank or Rudd I found out that I did meet with these guys

14 on 6 December.

15 MR. SAXON: Let's go off the record a second.

16 (A discussion was held off the record.)

17 MR. SABA: We'll go back on the record.

18 BY MR. SABA: (Resuming)

19 Q Mr. Secretary, can you tell us, to the best of

20 your recollection, when you first provided Exhibits 16

21 and 18 to counsel in connection with this investigation?

22 A To the best of my knowledge it was provided at

23 the earliest possible moment following counsel's request

24 for all relevant dociiments. I'd like to further state

25 that I wanted to assure that all documents were given
iSI

217

l/NfiUSSfflffl

215

1 over without any hesitation, and that's why I myself

2 ruled myself out from document searches and had a third

3 party do the search, so there would be no subsequent

4 suggestion that perhaps something hadn't been turned over

5 that was in my files.

6 To the best of my knowledge everything was

7 turned over as soon as possible upon notification of your

8 request.

9 Q Thank you. I want to move to another area.

10 Perhaps if someone else has questions about these

11 exhibits, let me give you an opportunity.

12 MR. SAXON: No. We've got little time left.

13 THE WITNESS: Well, we can stretch you a

14 while. You guys accommodated me and Z can accommodate

15 you.

16 BY MR. SABA: (Resuming)

17 Q I'd like to move on, Mr. Secretary. After the

18 7th you were debriefed. Between the 7th of December and

19 the end of the year, did you have any additional activity

20 in connection with what we call the Iran initiative?

21 A Well, other than I'm sure I wrapped up with

22 Arnie Raphel after I was informed by the Secretary that

23 he thought the outcome of the meeting, and I believe I

24 kind of thought things were dead, and that's what the

25 Secretary's impression was. But I would have had a

uNcutssra

218

UNCUsstfe

216

1 •- conv«rsation with Arnie particularly about a debrief of

2 her«'« how my boss saw the meeting. How did your boss

3 see it?

4 Q Do you recall a January 2 meeting with Oliver

5 North?

6 A I've got my January 2 calendar here, because

7 that was the date you asked me about.

8 BY MR. SAXON: (Resuming)

9 Q Before we go on, let me aslc you one queetion.

10 in the debrief with Secretary Weinberger of the December

11 7 meeting, whenever that debrief took place, did he tell

12 you that he had proposed to the President that the better

13 way to get the hostages back than selling arms to Iran
was^^^^^^^^^^^^^^H

15 A I don't know that he told me that. That was

16 always his view and he expressed it on occasion. I had

17 everX reason to believe he would have.

j^8 Q And just let me ask the further question,

19 although I think it's answered by that answer. Did he

20 say anything to you that would indicate that in the

21 Dsceaber 7 meeting he put forward that the better route

22 to go wasi
23

A I don't remember that specific.
24 Q And that President Reagan said words to the

effect in response, yeah, that's the way I want to go?

umra

219

\immmi

A Well, it would have been consistent for him to
do so, but r don't remember him telling me that portion,
nor do I remember him telling me directly what the
President said. Secretary Weinberger does not generally
debrief on what the President said. He'll tell you what
he said, what Mr. Shultz said, and what the decision was,
but, as you know by now, it's difficult to get a debrief
from Secretary Weinberger, and it's only on those things.

I mean, there's a high degree of immediate
interest that I go down and park in his office. There
are plenty of ways, not the least of which is to find out
from the notetaker at the NSC what went on.
But January 2 —

^* BY MR. SABA: (Resuming)

^5 Q January 2.

^* A I not only don't recall a meeting, it's not

17 listed on my calendar.

^® Q If I can help perhaps, i have a listing on

19 that morning at 8:30 at the Hay Adams.

^° ^ At 8:30 I was in the SecDef's staff meeting

21 here.

^^ Q All right. Do you recall a meeting with North

23 that day?

^* ^ No, I do not. I can't tell you. I wouldn't

know the Hay Adams if I fell over it, frankly. I don't

1
2
3
4
5
6
7
8
9

untsfm

220

UNKASSIHID

218

1 remember having been in there. I guess I was in for some

2 visiting dignitary, but I do not remember being there

3 that day, and I'm specifically shown as in the staff

4 meeting and walking back to my office with Fred Ikle.

5 Q Do you recall a meeting on that day with

6 Menachem Heron?

7 A I do not show one, and I had a very full day.

8 Q Let me show you a page six, which will become

9 the next exhibit. It's page six of information provided

10 to us by the government of Israel, and if you haven't

11 seen it please take whatever time you need.

12 (The document referred to was

13 marked Armitage Exhibit Number 19

14 for identification.)

15 A I have just got to tell you that I did not see

16 Mindy, according to this calendar, that day, and I do net

17 recall that meeting. And the reason I have this calendar

18 is because you asked me about it previously and I didn't

19 remember it. And the next day I left for Hanoi.

20 Q Did you have any activity —

21 A I might say you might want to ask Mindy what

22 time of day that was, because I mean she's good and I was

23 in the office all day and Mindy didn't come in and she

24 wouldn't have let a visitor as noteworthy as Mindy come

25 in without making a note of it. So I don't recall that

vmmm

221

OMjutsstfe

219

1 at all.

2 -'•* BV MR. SAXON: (Resuming)

3 Q I guess the more important question, though,

4 would not be what time of day it was or whether it was on

5 your calendar, although I know that helps, and not even

6 January 2, because this is the report the Israelis have

7 provided after a lot of checking, and they indicate they

8 could have something wrong here and there.

9 But the report states: "Menachem Meron met on

10 2 January 1986 with U.S. Assistant SEcretary of Defense

11 Armltage and sought to conclude an agreement regarding

12 the replacement missiles, including their price." So,

13 more important, do you recall at any time in that time

14 frame meeting with General Meron and discussing those

15 topics?

16 A I not only do not recall it, I'm not the guy

17 to talk price. Talk general systems and all of that,

18 fine, but I'm not a price guy, so I don't have any

19 recollection, and please let the record show that my

20 calendar shows no meeting with Mindy in or out of the

21 office.

22 Having said that, he's a great guy.

23 BY MR. SABA: (Resuming)

24 Q Did you have any discussion after December 7

25 of '85 and before January 17, '86, with any official of
LSI

222

("VCUSKO

220

1 the government of Israel on the issues of the Iran

2 initiative?

3 A I can only state that from 3 January to 10

4 January 86 X was out of town, and then again from 14 to

5 18. I was in Bangkok, Hanoi and Hong Kong between 3 and

6 10 January. And then on 14 to 18 January I was at the

7 Security Subcommittee meeting in Honolulu. So I don't

8 remember it, and I think it's kind of unlikely. I mean,

9 I was just traveling a lot.

10 Q Did you have any conversations, perhaps in

11 December, with Ben Yusef?

12 A If Mindy came in, I'm sure Abraham Ben Yusef

13 would have come with him. They generally are a matching

14 set, because the purchasing agent is Mr. Ben Yusef. But

15 I don't recall, frankly, talking about weapons. We've

16 talked previously today about the possibility of talking

17 retroactive or prospective weapons. I just don't recall

18 it.

19 Q Did you have any knowledge prior to January 17

20 of '86 about the issue of replenishment of Israeli

21 weapons that had gone?

22 A I've told you my recollection. I'm not being

23 testy. I just don't have anything to add to it. And I

24 just say that I was gone a lot of that period.

25 Q Let me show you what will be the next exhibit.

UNttltSSIFfED

223

uNcussm

221

1 which is from the testimony of General Colin Powell and

2 I'll provide three pages of that testimony, page 80, 81

3 and 82.

4 (The document referred to was

5 marked Armitage Exhibit Number 20

6 for identification.)

7 Vou might want to look at the sequence of

8 questions. This is the Exhibit.

9 (Pause.)

10 A What's the date General Powell is talking

11 about on here? He's talking about sometime over the next

12 week, I can't recall how, either the Secretary or my NSC

13 interlocutors, the number changed to 4,508.

14 Q The reference is to —

15 A I'm trying to understand where the extra 508

16 came from.

17 Q The reference is to the period. He says it's

18 roughly the week after the 17th of January.

19 A It's the week after the 17th? Well, I would

20 have been back in town.

21 Q The week after the 17th.

22 A I certainly don't remember telling Colin.

23 Q Just to make it clear, on page 80, line 14, I

24 asked how the number changed to 4,508. At line 15 it

25 says: Sometime over the next week. And the reference

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222

1 t^rior to that was the 17th of January. And we had other

2 testimony as to the period we're talking about.

3 A No. I don't remember telling Colin anything

4 about a previous shipment of weapons. And I think that

5 it was sometime — and I can't say what "sometime" means;

6 more than a day or two — after the 17th that I found out

7 things were in train for a transfer. And after the

8 decision was made on the 17th of January I never dialed

9 in. I never got involved other than to be informed that

10 something was going on.

11 Now any information that I found out about any

12 aspect of the program I would have shared with Colin

13 Powell, but I do not recall helping him at all with 508

14 or the increase from 4,508. I'm sure that I did not tell

15 him that the number should increase to 4,508 TOWs. I'm

16 dead certain of that.

17 Q All right. There is perhaps one reading of

18 the testimony could be that he came to realize that there

19 was a replenishment and he came to realize that one or

20 more persons had known prior to that date of a shipment,

21 and that this number was a replenishment.

22 A I read that in there.

23 Q He mentions your name twice. So it wasn't

24 necessarily that week that you knew of it.

25 A Previously.

UNimSIFIED

225

UNMffi)

1 Q But some point prior?

2 A Yeah. I understand what you're saying, and I

3 don't think I knew that. But if I had known I would have

4 told Colin. But I just don't recollect at all telling

5 him that. I just don't think I knew it.

6 Q My question is, did you know it?

7 A No. I don't remember knowing. I don't know

8 how to answer it. I don't recall knowing it. I think

9 I've testified that it wasn't until around November of

10 '86 I found out things had actually happened, that Israel

11 had transferred things without our knowing about it.

12 I was never actually sure during all of '86

13 how the transfers were made after our weapons went to the

14 CIA. As I say, this was absolutely not a matter of

15 moment with me. It was the policy that concerned me.

16 Q So your testimony then is that you simply did

17 not know even as late as roughly the 20th?

18 A Well, my testimony, I think I've got

19 carefuller, is I don't recall knowing about this. I hate

20 to be that way, but it's bad times, fellows.

21 MR. SHAPIRO: It's perfectly within your

22 rights.

23 THE WITNESS: Of course it's within my rights,

24 but these are bad times and I certainly don't remember

25 knowing this.

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226

UNtU^JEO

224

1 MR. SABA: I think Mr. Saxon is about to feel

2 a question coming on.

3 BY MR. SAXON: (Resuming)

4 Q Let me introduce another exhibit, give you

5 this, and give you a moment to read it.

6 (The document referred to was

7 marked Armitage Exhibit Number 21

8 for identification.)

9 This is from the testimony of Colonel Nozrth at

10 our hearings on the afternoon of July 7, and I ask you to

11 just take a minute and read these two pages I've given

12 you.

13 (Pause.)

14 A Okay. I've got it.

15 Q At line 1486 Mr. Nislds says: Colonel North,

16 I asked you before we broke about a number of particular

17 individuals emd whether they were aware of the HAWK

18 shipment in November of 1985. Dropping down: Mr.

19 Nields: Were any officials at the Department of Defense

20 aware that 18 HAWK missiles or some number of HAWK

21 missiles had actually been shipped by Israel to Iran?

22 Mr. North: I believe they may well have been

23 because I think I made several efforts to coordinate with

24 them the replenishment of the HAWKs, I think, if I

25 remember properly, with DOD officials about both HAWKs

UNcussra

227

UNCLASSm

225

1 and TOWS. I wouldn't be asking them about HAWKs if they

2 hadn't already been ordered up as a need for

3 replenishing.

-* Then you get to the bottom of page 68, line

5 1519. Mr. Nields: I just want to make sure. My

question simply is who in the Department of Defense was
told that there had actually been a shipment, if anybody.
Mr. North: An unfreshed long time ago memory would tell
me that I probably talked about that delivery with Mr.
Koch, possibly with General Powell, possibly with Mr.
Armitage ,

Now Colonel North indicates his memory is
unrefreshed and he uses the word "possibly", so his
testimony does not stand for the proposition you were

15 told. I would simply ask you, since he says he might

16 have talked with you about it, do you recall Colonel

North ever telling you at the time or roughly at the time
of the shipments?

A I do not recall that. And I also recall that
in a previous part of OUie North's testimony he said
that he dealt with others and latterly me. So I don't
think he did tell me - others first, and then latterly
23 me.

BY MR. SABA: (Resuming)
Q Mr. Secretary, would you have any objection to

IIMCttSSinED

228

UNCbmi

226

i, \ putting the calendar that you prepared in as an exhibit?

2 1 thinlc it's helpful to the testimony and a better

3 knowledge for those who read the record.

4 A You'll get to look at, in case we want to move

5 somebody off who shouldn't have been seeing me.

6 Q You had a typewritten onV

7 A This is where I was. You guys are welcome to

8 that. I just would like to take some time before it goes

9 out to make sure

11 like to keep it in case there are other questions.

12 MR. SAXON: I think it would be helpful to

13 make that a formal exhibit to the deposition unless again

14 there is somewhere on there —

15 MR. SABA: I think it would be helpful.

16 THE WITNESS: I just want to stress for the

17 record that I prepared this based on the questions you

18 asked me last time and my inability to say that Z was

19 traveling and where.

20 MR. SAXON: And by asking for it I'm not

21 suggesting that there is anything wrong or improper about

22 having a calendar to refresh you, because when we say

23 where you were on the day of such and such, who knows

24 where they were without something in front of

25 . you.

UNMSIFIED

UNeii^n

227

^ (The documents referred to were

2 marked Armitage Exhibit Numbers 22

^ and 23 for identification.)

4 BY MR. SABA: (Resuming)

5 Q Mr. Secretary, do you recall if in January you

6 provided any other legal or other memoranda to anyone in

7 connection with the Iran initiative?

8 A I don't recall.

9 BY MR. SAXON: (Resuming)

^° Q ^®t "8 ask the same question in a slightly

11 different way. There is testimony, sworn public

12 testimony, from Judge Sporkin, who testified on June 24
of this year at our hearings in his capacity as having
been General Counsel at the CIA that on January 16, 1986,
the day before the Finding was signed on the 17th , there
was a meeting at the White House at which Admiral
Poindexter was in attendance, Mr. Sporkin, and Secretary
Weinberger, among others.

And his testimony was the meeting ended with
Secretary Weinberger making a statement that he would

21 like to take it ~ and we're not sure whether "it"

22 literally referred to the Finding, a draft of the

23 Finding, a piece of paper or simply the concept that they

24 were about to formalize — would like to take it back and

25 let my lawyers look at it. And Secretary Weinberger, in

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UNClASSm

228

1 his deposition to our two Committees, when presented with

2 this is what Judge Sporkin will testify to soon, said

3 that's sounds about right.

4 We have this afternoon been told more or less

5 by Mr. Garrett that there is no record that any lawyers

6 ever formally looked at the January 17 Finding on the

7 16th or the 17th. Our question to you is, were you asked

8 by the Secretary about that time to respond in any way

9 that we could call a legal response to either the Finding

10 specifically or the concept of going forward that was

11 expressed in the Finding?

12 A The answer is no. I was traveling at the time

13 as well, I wouldn't know Stanley Sporkin if I fell over

14 him.

15 MR. SABA: I have just a last line of

16 questioning at another time period on another subject.

17 MR. SAXON: I don't have much.

18 MR. SABA: I want to go to the November '86

19 period.

20 MR. SAXON: That's fine. I'm sorry, before

21 you jump to that, let me formally introduce as an

22 exhibit, if you kept it, the handwritten note that Mr.

23 Koch prepared.

24 (The document referred to was

25 marked Armitage Exhibit Number 24

uitetASim

231

mmmi

for identification.)

2 THE WITNESS: Yes. You can read it?

3 BY MR. SAXON: (Resuming)
* Q I can read it.

5 A He's been a friend of mine for years, and I

6 can't read it.

7 Q I had to help Mr. Koch read this when he

8 testified to refresh his recollection as to what his

9 handwriting said.
He says in Item 1 that the TOW discussed

11 separately with Rudd and Gaffney in December. And that

12 we )cnow more or less to be the case.

^^ Ite» 4, "TOW paper locked in RLA safe.

14 Wouldn't let Rudd keep copy." He indicates that RLA is

15 Richard L. Armitage.

^* A That's right.

^^ Q Would that be consistent with your

18 understanding that you took the TOW paper that Mr. Rudd

19 prepared and put it in your safe?
2° A Perfectly reasonable.

^^ Q And for that matter, since this was a close

22 hold, that you told Mr. Rudd that you didn't want him to

23 keep a copy?

^* A I'm sure that's the case.

^^ Q And, for the record, at the time that paper

UNCIMfe

232

vmmm

230

1 was prepared or the HAWK paper, either of them, do you

2 recall telling Mr. Rudd or Dr. Gaffney to destroy all

3 notes, all working documents, et cetera?

4 A I'm sure I did. I didn't recall it, but when

5 they said it in their testimony I agree completely that I

6 would have done so.

7 Q And to make sure the record is clear that

8 would have been contemporaneous with their preparing it,

9 which would be in keeping with this being a close hold,

10 no notes kind of thing?

11 A Yes, sir.

12 Q And not in any way after the fact, trying to

13 destroy the record?

14 A Thank you.

15 Q Mow one other thing 1 wanted to go to in this

16 document. If you drop down several lines, you see the

17 first word that looks like Cast. It says: "Cast said

18 best possibility of cover", and then the next word I

19 can't read, but the last words are "do it black".

20 A "Hust do in black", "must do this black".

21 Q Mr. Koch testified in his two depositions and

22 publicly in his sworn testimony that if not from Gast —

23 he thinks it might have been from General Gast — but

24 also it could have been from Mr. Rudd he got the clear

25 understanding that if you were looking at the numbers of

OimSMD

233

iiNwstfe

231

■■ TOW missiles involved, knowing the prices we )cnew at the

2 time, you do the arithmetic and it would have been at a

3 dollar figure in excess of $14 million, which means if

4 you were going to go forward through white world FMS

5 sales you would have to tell the Congress.

6 A Correct.

7 Q The understanding was that we didn't want to

8 do that, and, of course, the Finding said Congress was

9 not to be notified, so they concluded that the best way

10 to go about it, if the transaction was to go forward,

11 would be to make it an Economy Act transfer to the CIA,

12 make it an intelligence activity and go covert, which he

13 says do it black means.

1* My question to you simply is were you part of

15 any of this decisionmaking process?

16 A I don't think so.

17 Q Or any discussions in which this result was

18 reached?

19 A No, 1 wasn't. To my recollection I was not.

20 MR. SAXON: That's all I've got on that

21 exhibit.

22 BY MR. SABA: (Resuming)

23 Q Mr. Secretary, I have just a few questions by

24 way of information. You told us before that in

25 preparation for the Attorney General's press conference a

wmmm

UNttASSiFtED

232

1 statement was being prepared for President Reagan.

2 A Well, okay. Yeah. I don't think it was in

3 preparation for the Attorney General's conference. It

4 was a statement the President was going to make, a

5 statement the President was going to make, not in

6 preparation for the Attorney General.

7 Q Let me show you the transcript, and we don't

8 have to make this an exhibit, but just if I could get

9 some help here. I'm showing the Secretary the transcript

10 of his deposition May 26, 1987, at page 62. I just want

11 to see if I can get some more information and maybe get

12 this right a little bit.

13 It's a bit confusing in light of what we know

14 now.

15 A All I can tell you is this. Around the time

16 of the Attorney General's press conference is where I

17 have a remembrance of the following — that we had an OSG

18 meeting in which a statement for the President was shown

19 around. This was, in my memory, prior to the Attorney

20 General's press conference and not related to the

21 Attorney General's press conference — to clarify that.

22 The speech or text of this paper concerned the

23 Iran initiative and, as I recall, did not concern itself

24 with the Attorney General's press conference or the

25 President's response to that.

UimSStFIED

235

mmmm

233

1 Q Do you recall the date offhand? There were

2 several OSG meetings. If it helps you, the revelations —

3 A You know, I'll tell you, I think it was the

4 day the President made the speech.

5 Q The 19th? He had a press conference on the

6 19th.

7 A Then that may have been it.

8 Q He gave a speech on the 13th.

9 A Well, it was in preparation for a speech, to

10 the best of my knowledge, and I rememiser very clearly

11 that everyone at that meeting had negative things to say

12 about the statement. I've already testified to that.

13 Q So you think it was a draft statement?

14 A That was the way it was presented to us.

15 Q Do you recall specifically what your objection

16 to it was?

17 A Well, I recall making the comment that this

18 asked more questions than it answered. It's better just

19 to say I'll get the facts and give them to you. Jerry

20 Bremer, John Moellering, Buck Revell — I mean, it was a

21 cacophony of sounds, people saying this is crazy. It

22 does not jibe with the facts, et cetera, et cetera. And

23 Ollie, who I think was a little surprised, and his

24 colleagues said well, send in your comments.

25 And my comment I think I phoned in later said,

UNtU^IFIfS

236

UNtASSm

234

i we can't go forward with this paper. And John Moellering

2 said, fellows, I was around during Watergate and this is

3 a bad deal.

4 Q So this was a draft which was circulated to a

5 group?

6 A That's correct.

7 Q Do you recall was any other draft of any other

8 statement provided to you for comment?

9 A Not that I recall.

10 Q Do you recall if you were provided with any

11 draft chronologies of the events?

12 A No, I was not.

13 Q For comment?

14 A No, I was not.

15 Q So to your recollection there was only one

16 doc\unent which was circulated for the group and you had

17 coiunents on it?

18 A Ye«, that's correct.

19 Q Do you recall if in your comments to Mr.

20 North, Colonel North, you indicated that you had more

21 specific knowledge of the facts — that is, the number of

22 shipments and the size of the shipments?

23 A Well, I don't know that it got down into line

24 by line this is wrong, that's wrong. No, I don't

25 remember that. But. I^arngBiif^t^at the general tone and

mmm'

237

UNeussm

235

J. thrust was not, as I understood the project — and I

2 didn't pretend to understand it in depth — but Jerry

3 Bremmer, who sat next to me, I remember very well, I

4 said, Jerry, what is this and he was raising hell about

5 it. John Moellering, who was around the corner — my

6 remembrances of those days are clearer because they are

7 so much closer — but I don't remember that we went line

8 by line specifically tearing it apart. It was just a

9 general belief that this is terrible and we can't allow

10 the President to do this.

11 Q Did you provide any written comments?

12 A No. I can remember calling in. I think my

13 comment was the President ought to stand up and say I'll

14 get to the bottom of it; I'll give you the facts, et

15 cetera. Now I've been told subsequently Buck Revell sent

16 written comments, things of that nature.

17 Q Were you provided comments by anyone else in

18 writing?

19 A No. I wasn't. I don't think I showed anybody

20 else in the Department.

21 MR. SAXON: Who told you Mr. Revell sent in

22 comments?

23 THE WITNESS: I think subsequently in talking

24 with my colleagues we heard this. You know, did you send

25 anything over. I just bleated about and said they

wmsssm

238

IINBt«SStf1!D

236

■• couldn't go with it, that kind of thing. Buck may have

2 told me he sent it, actually.

3 BY MR. SABA: (Resuming)

4 Q Did you have occasion to discuss that

5 statement with anyone here?

6 A Not that I recall.

7 Q Specifically the Secretary or General Powell?

8 A No. Powell was gone then, and Admiral Jones

9 was here. But I don't recall it.

10 MR. SABA: I don't have any further questions.

11 BY MR. SAXON: (Resuming)

12 Q Mr. Secretary, I've got what I hope will be a

13 quick line of inquiry along three lines. The first has

14 to do with the contra resupply operation.

15 A Good.

16 Q And Colonel North's public testimony.

17 A I have it right here.

18 Q Let me have this marked as the next exhibit

19 and show you the pages —

20 A I trust they are the same pages.

21 Q It's not the sane pages they gave you.

22 A I trust they are the same pages I got.

23 (The document referred to was

24 narked Armitage Exhibit Number

25 25 for identification.)

UNCUSSIFIED'

239

nmmm

237

1 Q This is his testimony from the afternoon of

2 Jul\^7, 1987.

3 A I've got it.

4 Q Do you need a moment to read this?

5 A No, I do not. I just want to make sure.

6 Q Are we like Shultz and Weinberger? Are we

7 reading off the same hymnal now?

8 A Yes, we are reading off the same hymnal.

9 Q Mr. Secretary, let me direct your attention to
page 107 of this transcript at line 2418. Mr. Nields ~

11 let me back up. He had asked Colonel North what various

12 individuals knew about your activities in the contra

13 resupply effort.

14 A That's right.

1^ Q Mr. Nields: "How about the chief of the

16 Central American task force?" He's going through and

17 asking about particular individuals.

1^ Mr. North: "Oh, I'm sure that he had a

19 detailed grasp of — "

20 Further down: Mr. Nields: "And what is your

21 basis for that belief?"

22 Mr. North — and this is the part relevant to

23 you and I am quoting: "We used to have meetings with the

24 Restricted Interagency Group. We used to have secure

25 conference calls. And on one occasion I can recall

UNetASSIFIEf)

240

UNCUSmiiD

238

1 laying out forth* group — In fact I thinJc it was after

2 the $100 million had been voted by both Houses, hadn't

3 been sent forward to the President — I can recall a

4 meeting in an office in the Pentagon where I went down

5 item by item by item the things that Z was doing and

6 asked them point blank whether or not Z had to continue

7 to do them to keep the resistance alive, because even

8 though the money had been authorized and both bills had

9 been passed, we couldn't get it forwarded to the

10 President.

11 "And we went down item by item by item on my

12 checklist of what I was having directed out each month or

13 each quarter or each week to support the resistance, and

14 I asked then point blank whether this should continue.

15 "Mr. Mields: Who was there?"

16 A I've read it.

17 Q For the record, in line 2443: ^^^^^^Hwas

18 there, Kr. Abrama was there, Mr. Araitag* was there, I

19 think Mr. Michael was there, I think General Noellering

20 was there.

21 "Mr. Mields: Would you go through them for

22 us, please, item by item, what it was yout told this

23 assembled group you were doing?"

24 Line 2459, Colonel North says: "These people

25 knew what I was doing. They knew that it was a covert

siHItiWtfii

241

MmMn

239

operation being conducted by this government to support
the Nicaraguan resistance."

Page 110, line 2472: "Mr. Nields: Did you
discuss the resupply operation?

"Mr. North: I think so.

"Mr. Nields: Did you discuss efforts to
obtain armzunents?

"Mr. North: Probably.

"Mr. Nields: Including munitions?

"Mr. North: I am not absolutely sure it says
munitions." He mentions logistics and air support.

Let me just simply ask you first if you recall
a meeting of the RIG at which something like that or
close to it took place?

A There were two meetings held in my office, one
on Aucfust 28, one on September 19. They were breakfast
meetings.

Q I'm sorry. The dates again?

A August 28 and September 19. They were

20 breakfast meetings.

21 Q This is '86?

22 A That's '86. And I paid, and the reason we

23 hosted them here was because we felt in the Department

24 that we weren't up to speed and we wanted to know what

25 was going on in central^ Am&ciA^aJ^umber two — and

242

wmmm

\ that's tha reason ws hosted it here and I took the
Tnltiatlve, and Z remember that very clearly.

Number two, we wanted — the reasons for the
discussion of the group were we were preparing to have a
passage of the bill by the Congress. We'd have some
money and we wanted to determine clearly what each
department would do, what would be tha responsibilities.
And we wanted to start working on tha NSDO which was
going to be signed out for the President, and
subsequently was who would have tha lead
responsibilities, which agencies would support in what
manner.

Attendance at tha first meeting on August 28
had, as Z recall, John Moellering, myself, Nestor

Jim Ollie NorthHj^^H^^H Z do
not believe Elliott Abrams was there. Zn fact, my
record, which Z will give you, does not indicate he was
there.

The second meeting, September 19, did have
those same gentlemen and, in addition, included Elliott
Abrama.^ My recollection and as reported by a memo that Z

22 asked Nestor Sanchez to draft up for ma to send to the

23 Secretary reporting on this event can be entered in the

24 record. Z don't need to go a ll through it. But its
primary thrust has to do with ^^^^^^^^^^^^f^^^^H

uNcraiii

243

UNcussm

4 And my final paragraph to the S«cretary says:

5 Th« group I chaired this morning plans to continue

6 masting on a weekly or biweekly basis so that we can keep

7 ourselves collectively Informed on all developments and

8 be ablm to provide timely policy guidance to the program.

9 We'll keep you Informed and request your guidance or

10 approval as required.

11 That was for the August 28 meeting. I do not

12 recall Ollle bringing this other stuff up. At a

13 subsequent meeting Z have a vague recollection of Ollle

14 talking about humanitarian assistance.

15 Q By "subsequent" you mean the September 19?

16 A The September 19. Hximanltarlan assistance emd

17 not an Itea-by-ltea list of what Ollle was doing or not

18 doing — just a general discussion of humanitarian

19 assistance. Z would note, however, that my remembrance

20 Is the majority and the great bulk of the meeting was

21 taken up on those Items Z mentioned earlier — that Is,

22 what each department was going to do once we got this

23 money and how would the NSOD be developed. And that's

24 that.

25 Q Mr. Secretary, Z'm not going to try to change

lUP biLUU.'i'>(.UUiNOKl>

UNCUSSIFIED

244

242

1 or tailor Colonel North's teslTfllldl^ to fit the facts so

2 he comes out being right.

3 A Well, I'm sure he remembers what he remembers.

4 Q But let me simply say that given people go to

5 lots of meetings and maybe some may go to the Pentagon

6 and some elsewhere, and some people in this group and

7 some not, let me just back up and ask the question a

8 little more broadly.

9 Do you recall, regardless of what dates,

10 regardless of where it was, regardless of whether it had

11 exactly the players he said — because he could have

12 gotten all that wrong — do you recall any meeting at

13 which he did anything close to what his testimony

14 suggests?

15 A I do not.

16 MR. SHAPIRO: Counsel, could we have this

17 entered as an Exhibit? Why don't you state for the

18 record what it is?

19 MR. SAXON: For the record, this is the

20 memorandum to which the Secretary just made reference,

21 and that is a cover note from Nestor Sanchez.

22 THE WITNESS: To me.

23 BY MR. SAXON: (Resuming)

24 Q To you. I'm not sure what the date is.

25 A It talks about it in the body of the memo.

mmm

245

UNCbtSSffl

243

1 Q And than in the body of the memo which follows

2 th*>«over note it i> to Secretary Weinberger through Or.

3 Zkle from Nestor Sanchez.

4 A It was from me. That was the copy we got from

5 Sanchez in our sweep-up. He has a very clear remembrance

6 of it.

7 Q And it references the 28 August breakfast

8 meeting to which you just made reference.

9 A And noted Elliott Abreuas was not in

10 attendance .

11 Q We'll make that the next exhibit.

12 (The document referred to was

13 marked Armitage Exhibit Number 26

14 for identification.)

15 The second matter I want to ask you about has

16 to do with third country solicitation. Do you have any
knowledge ofj^^f^^^^^^^^^^Hbeing for

18 contributions to the contras during the time the Boland

19 Amendment was in effect that cut off U.S. Government

20 funding?

21 A No, only what I've read in the papers

22 subsequent to the revelations.

23 g Were you ever asked by anyone to do any

24 soliciting ofj

25 A No, I was not.

UNCtftSno

246

ONJwssffe

1 . , Q And did you ever do any soliciting?

2 "^ A I never did any.

3 Q Do you recall ever hearing Secretary

4 Weinberger state at any time, but particularly in the

5 spring of '85 time frame, saying to you or saying in your

6 presence that he had learned that^^^^^^^^were going

7 to be giving a size203le amount of money?

8 A Absolutely not.

9 Q Do you recall ever telling hla that^^^^^^H

10 were going to be giving —

11 A Absolutely not.

12 Q Let me introduce the next exhibit and tell you

13 what it is you are looking at. You are looking at a

14 memorandxim for record that John McMeihon, the Deputy

15 Director of the CIA, provided after they had had one of

16 their regular breakfast meetings with Director Casey and

17 himself and Secretary Weinberger and Mr. Taft, and it's

18 dated 15 March 1985.

19 (The document referred to was

20 marked Armltage Exhibit Number 27

21 for identification.)

22 A I've read it.

23 Q Specifically with reference to Mr. McMahon's

24 last sentence, which states: "In closing, the Secretary"

25 — meaning from the context Secretary Weinberger —

wmm

247

livmm

245

1 .. "8tat«d that he had heard that

^^m^^^^B had earmarked $25 million for the contras

3 in $5 million increments."

4 Let me ask the questions again with reference

5 to this specifically. Did you ever hear Secretary

6 Weinberger say he had learned that^^^^^^^^Hvere

7 providing $25 million?

8 A Z never did.

9 Q And you never told hia that?
10 A Z never told him that.

Q Old ^^^^^^^^H ever tell you anything to

12 this effect?

13 A He did not.

14 Q And you never solicited hia or anyone ih^^^|
||Bm^|^H|[for

16 A or anyone else, for that matter.

17 Q And until these matters broke on or about the

18 time of the Attorney General's press conference in

19 November of *86 and subsequent news accounts were done

20 you never knev anything along these lines?

21 A I don't think I did. I don't recall ever

22 having kno%m it.

23 BY MR. SABA: (Resuming)

24 Q Mr. Secretary, had you seen that memo prior to
25

today?

mmm

248

nmmm

A No. I had heard about It after you guya
taHt^d to the Secretary > but Z hadn't seen it. I am not
briefed and do not get briefed as a matter of course on
OCX breakfasts.

Q You are not shown as an addressee on the memo.
A We don't keep a record, and I don't recall
ever having been debriefed on a DCI breakfast by the
Secretary .

Q Let me ask in the course of your travels in
^^^^^^^^^Hdid the subject of the^^^Haid for the
contras ever arise?

A Not to my knowledge.

MR. SAXON: Let's go off the record a second.
(A discussion was held off the record.)
BY MR. SAXON: (Resuming)
Q Mr. Secretary, it has not been docxunented with
regard to the Richard Secord legal defense fund what the
L8 source of the contributions were to which Noel Koch
L9 testified on June 23 and which came from Swiss bank wire

20 transfers in the eunount of $500,000. I will say that Mr.

21 Martin, the trustee, remaining trustee of that fund, has

22 indicated there is some suggestion at least that these

23 are funds from foreign governments.

24 Let me simply ask you, number one, whether you

25 have ever made any solicitation on behalf of this fund of
TOP SECRET/

249

2
3
4
5

government .
have not.

- L .:: Tzr "^ °' -"- ""="—' -

,.^^.. -- MM 247

any foreign government.

A^^ I have not.

legal defense fund.
A I do not

Q And I guess flnallv <•«*. ^w

•—.-....-...., ...'~~rr.ir

MR. SAXON: Mr Sar^-^^4.

" OZX... ""• ""'"' ''°" "" '""- "> — .r , «„
23

THE WITNESS: yes

iir

250

\mmm

1 THE WITNESS: No, no. That's not what I told

2 him.

3 MR. KREU2ER: What did you tell him?

4 THE WITNESS: As I remember, I told him his

5 ass was way out on a limb because I didn't feel that my

6 boss knew this and that George Shultz knew it, and that I

7 thought he was operating solo and that my boss personally

8 was going to hate this, this project talking with the

9 Iranians first and then anything with hostages and Iran.

10 My boss is just totally opposed to any

11 dealings. Telling him that Weinberger personally would

12 think he was crazy for being involved in this seemed to

13 have the greatest effect on Ollie.

14 MR. KREUZER: Did Ollie say anything about

15 weapons transfers from Israel in '85?

16 THE WITNESS: I don't remember him talking

17 about that. I don't recall that.

18 MR. KREUZER: Thanks very much.

19 MR. SABA: The House thanks you very much, Mr.

20 Secretary. We have no further questions.

21 MR. SAXON: Let me say for the record we

22 appreciate this because you have spent two sessions with

23 us in deposition now and a fairly lengthy interview

24 session. We know your time is at a premium. We thank

25 you. It has been very helpful.

wmssm

251

mmm

249

1 THE WITNESS: I'll say on the record the

2 Secretary of Defense set the tone because he said we were

3 going to be cooperative from day one, and I hope you have

4 found that.

5 (Whereupon, at 6:30 p.m., the taking of the

6 instant deposition ceased.)

8 Signature of the Witness

9 Subscribed and svom to before me this day of

10 , 1987.

12 Notary Public

13 My Commission Expires:

252

UNCLASSIRED

CERTIFICATE OF REPORTER

I, MICHAL ANN SCHAFER, the officer before whom the foregoing
deposition was taken, to hereby certify that the witness
whose testimony appears in the foregoing deposition was duly
sworn by me; that the testimony of said witness was taken by
me to the best of my ability and thereafter reduced to
typewriting under my direction; that said deposition is a
true record of the testimony given by said witness; that I am
neither counsel for, related to, nor employed by any of the
parties to the action in which this deposition was taken, and
further that I am not a relative or employee of any attorney
or counsel employed by the parties thereto, nor financially
or otherwise interested in the outcome of the action.

Notary Public
in and for the District of Columbia

My Commission Expires: February 28, 1990

UNCUSSiFIED

253

UNCLASSIHED

II C^ec^Cr

DEFENSE SECO?tTY ASSISTANCE AGENCY

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.. «,IU .h.r. 1. no .xpucl, Uiuncuon ^1^^^%
Z\..^ . !•;: 'r..'tr.,.ln5rth.t!'and all Ad.inistrat.or.

ra;ris:«v.rthU .crupSiou.!,-.

.. u 1, conc.lv.». tK.t upon ,.ti.f.ctorv^c.nsul.ati.;^^^^;

" ' INCIJSSM

deliveries

255

nnmim

i: iraq ever found o
T-?:r sccrce? of
Iran's, however.
respect .

Ir3.«backs are e:jall. for-.idable-

^ °:;' '^^'' ^'°"^- ^f sreatlv irritate^
supple are rore readilv access ;b le hi-
so tnere would be no effect ;n that

'"xta^^fl^d'^JaJSlc^^'" Culf. States would also be

hf lil^l\ "*■'" "^*"^ ^- *^* laundering countrv thev uo.,i ^

e^pi^rjJeirj:;:^^'^ " =°"^^""' -'^-^ to fri:;!\n°i;

fltl^o.lii:n^-^l--\l^l^^y ^^"l>. rest;aJi;d

UNGUSSIHED

256

UMPUCCinrn

DCrENSC SCCUmTY ASSISTANCE AGENCY

Memo For.

gvS'^ V<i>^ O^W^ COXT^I*/

d^. /^f Ao>^*. wV»Jr 34 ^i ^

257

•O'*,

UNCUSSIRED

4s A^<«pLQA

IINCUSSIFIED

82 680

257

82-690 O-88-10

258

^mim

St„C

UNCLASSIFIED

259

.3- r:.':'K5

ItMt/CCtM>Ofi

iifimim

260

Not for QnototioB or - / 3

DnpUc»ttai ^

STENOGRAPHIC IflNUTBS
TJni«TlMd and Unadlted

P_^ «usw

See ^^s,U ^ ^-J '^^^^ "^"'^

,2^ <^A,,, ////^ A^ />■ ^--?^-

UNCUSSIFIED

Committee Hearings
UA HOUSE OF REPRESENTATIVES

UNCI^IFiED

OFFICI OP THK CLKKK
Oflk* of Offldal R^ortm

Partially Deciassitieomeleassd on Vj»«-»^ 8

under provisions ol E 12356

by K Johnson. NaOon* Sscunly Council

Hlxc

261

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thair profraa, if it ia aaeaaaary u aliif aay alaaliM IT^.^
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ATM «a«i« raltataatly aaftiaoea u iMoiiata obii^aat aCtba
aotira ^aaatity.

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total poabapa priao «aal4 appraaiaata MSI. alU IHi aarabarioo.

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267

UNGIMIED

POSSIBILITY FOR UEAXS

There is no good way to keep this project froa ultlaately
beinq Bade public. Following are three legal aethoda together
with a brief discuasion on the poasibility of coaproaise.

> - The President can aake a deteraination, Section 614 ot te
the Foreign Assistance Act, which would waive the statute which
requires the normal Congressional notification under Section
36(b) of the Araa Export Control Act (ABCA). _

- President aust notify the Speaker of the House and the
Chairaan of the Foreign Relations Coaaittee, provide a written
justification, and consult with both the Chairaan of the Foreign
Relations Coovmittee and the Chairaan of the Foreign Affairs
Coovaittee. This could be done in a classified, close-hold aannei
and is the best prospect for eliainating leaks froa Congressional
sources. However, the problem would coae with actually executinc
a Letter of Offer (LOA) for the aaterial without disclosing to
the entire Security Assistance Cooaunity that the President had
waived the need for Section 36(b) notification (Headquarters
Aray, USASAC, and NICOM, all are aware of the legal requirement
not to process the LOAs without the 36(b) notification process).

- The OSO General Counsel should be asked personally to confira
that Section 614 is legal under these circuastances, since this
authority never has been exercised in this way.

- The President could sign an eaergency notification under
Section 36(b), waiving the formal 30-day notification period.
This requires a certification that an eaergency exists, and the
reasons therefor. Mhile this notification would be classified,
the distribution of the Sactioa 36(b) notice is auch broader that
would be true for the Section 614 deteraination aentioned above.
Additionally, the Security A«sistance Coaaunity would have to be
inforaed that the President had aade th« eaergency deteraination
and waived Section 3<(b) before the LOA eoald ba prepared and
issued. There would ba no good explanatioa aa to why an
eaergency would exist for this country's parchasing the aissiles.

- Tha last option, if tiaa paraits, woold ba to treat the sale
a« • routine unclassified action under Section 36(b). This would
require the full SO-day notification period (including the 20-day
inforaal notice) for Coaqreasiooal review. Both systeas are in
the inventory of tha country involved, and It la possible that
the notification would flow through without question. This
alaoet certainly would ba true for I-BAns la the quantity
conteaplated) the I-TOW quantities aight or alght not cause
speculation.

IfDeclassified/ReieaseO nn <0 PC^ Sfe
under ptovisions ot EO 12356
K Johnson. National Security Council

268

UNCLASSIFIED

UNClASSinED

269

RICHARD LEE ARMITAGE . ^'**',

IIMPJ A^SlFlFfts - -?^cretVkv o^ rA./.> -T^^l.

UllULI^O^I" 'Ml^ international security affairs c»fUr^*u^

Richard L. Armitage was sworn in as the
Assisttnt S.cr.t.ry of Defense ^o- I^^"'^*"
t"nal security Affairs on 9 June 1983.

Mr Armitage represents the Department
of Defe;seTn formulating and developing the
poUtico-military relationship, ^-^ween the
united States and other countries of the
world, excluding NATO-member =0"n"ies. As
such? he is responsible for the "^Ij^^^Y
«pects of U.S. policy pertaxnxng to these
coCntrtes. Among his many duties «•«"?"-
vT^ing DoD'e security *"^-^*"^- P^°^^n;w
oversight of DoD activities relating to law
of the sea and oversight of PO^i"-/°""";
?ng uTs. special operating force, and counter
terrorism.

Born in 1945 in Boston Mr Arndtage attended high^chool^in
Atlanta and graduated in ^^67 from the U.S^ Naval J "^^^^^^
h. received a =°"^"tan«d'to a des trover ^hich was illationed on
S:Tnirne^ofrvirtni^"fonruc:irg'rari gunfire support opera-
tions.

Representative, I"";^^^^°^9il^\i°becam; Administrative Assistant ^

Asian affairs. -' 3

„r. Armitage worXed J Vi^d'tKirwa^'iSLd"!" memb« of I ^
Reagan presidential campaign and later was namea advisor | I
the National security Transition Team. H'^^'-^^^^^ ^ith pre- ^ ^
to the Interim Foreign Policy advisory ooaru ^ which would
paring the President-elect for "«30^ P°JJ|y i"it a«uSng his

confront the new *<3'»i"i»^"^i°"- /^°" ty is-i'^*"*"*""""^ °^
ref:re,^?n^:^na;i"o^ali:c;rny^rff:!?rLJ"ast Asia and Pacific

Affairs.

„r. Armitage is a member of the Association of Asian Studies
and the World Affairs Council.

He lives in Fairfax. Virginia, with his wife Laura., four
daughters. Elizabeth. Lee. Jenny and Alice and two sons. Paul

uNWSsife

and Chris.

"""' 15 May 1986

270

I U'^^ ey

STENOGRAPHIC MINUTES
UnreyiMd mod Unedited
Not for Quotatioa or
DapUcadon

mmm

HSITS-2£lZ-/87

DEPOSITION OF GENERAL COLIN L. POWELL
Friday, June 19, 1987

U.S. House of Representatives,
Select Committee on Investigate Covert
Arms Transactions with Iran,

Partially Declassified/Released on 1/ f^fg S'g)
under provisionr, o< E 12356
by K Joh.-scn. Nal.cnal Secunly Council

Committee Hearinsrs

U.S. HOUSE OF REPRESENTATIVES

I OF THE

(^^

OFFICE OF THE CLERK
Offlcaofj

HO.

^ ^ 3 cones

271

cwassw

:AS-16 1 he was giving me. And I don ' t sense that he gave me much

2 more — or recall that he gave me much more guidance than that.

3 I didn't need much more.
Q And the reference to the Economy Act is the question

of, I take it, of the pricing of the missiles and the —

A It was more than that. It was an indication that
we were providing a service to the Cenwral Intelligence
Agency.
9 MR. LIMAN: I am correct that the only way you can

10 sell to the CIA is under the Economy Act;

11 THE WITNESS: That is my understanding, but I

12 would need to get a lawyer

13 BY MR. SABA:

14 Q How did the number change to 4,508?

15 A Some time over the next week — and I can't quite

16 recall how — either from the Secretary or one of my

17 NSC interlocutors. It might have been Admiral Poindexter or

18 Colonel North, I really don't recall. Or it might have been

19 that the CIA told the Army, once I put them in touch with

20 each other, that the number was up to 4,500, and I became

21 aware of it, it czme back to me, and I confirmed it with

22 the — let the Secretary know about it, and there was no

23 objection, and it was at that point that I realized that

24 well, I have answered your question.

25 Q I am trying to understand wHere~the extra 5(

272

CAS- 17 1

came^Jrom.

'Wf^Sffl^

A The number that was given to me was 4,000, and

was increased to 4,500. And whether it was 4,508 or not, I
don-t know. I just recall it being 4,500.

Q But you wouldn't have increased that on your own?
A On my own? Oh, no.

MR. LIMAN: He said that it came from either the
Secretary or from the NSC.
BY MR. SABA:
Q And you don't know.

MR. LIMAN: And you understood that it might have
come —

THE WITNESS: As a matter of information, once I
talked to General Thurmond, and he put me in touch with
the logistics people in the Army, General Russo, at that
point I put General Russo in touch with the CIA and from then
on in I was in nothing but a mongering role.

MR. LIMAN: Is this when you learned that the 500
were to be used to replace earlier shipments to Israel?
THE WITNESS: Yes. It was at that point that
things clicked, and I said - I started to find out about
the other 500. I just realized at that point that a
transfer must have taken place and this is the replenishment
of some kind.

wmmL

273

^nmm

BY MR. SABA:
Q Did you share your view on these 500 with anyone?
A I can't specifically state, ;but I would be willing
to speculate that Mr. Armitage's testimony and the Secretary's
would also recognize and corroborate that, too. And we all at
that point realized -- I might have learned it from
Armitage. i just don't recall.

Q Did you have any instruction or any understanding
that this -- the filling of the order should bypass their
system?
A No. The^^^^^^^^^H system was not something
the Secretary would have recognized as a system. And lots
has been made of bypassing of ^^^^^^^^^^^H system, but I
don't think I bypassed the ^^^^^^^^H system. I took it to
the top of the^^^^^^^^^Hsystem. General Thurmond sits in the
Army at the top of theH^^^H^^H system. And when I
go to General Thurmond as a tasking, I did not in any way
restrict how he accomplished it other than to tell him that
it should be kept to the smallest number of peoplf possible.

My understanding is that he then turned to
Colonel ^^^^^HB who was hi^^^^^^^^Hof fleer , if I am
correct, and so I ciCMrW t^ins/s^liait-we _bypassed the
^^^H system.

It wasn't used, but it wasn't bypassed in any
deliberate, in any conscious kind of way.

274

nfmsm

nsj^^'^

[2 Hrrnitine.

JOINT HEARINGS ON THE
ERANCONTRA INVESTIGATION

Continued Testimony of Oliver L. North

Tuesday. July 7, 1987
Afternoon Session

House Select CoBmittc* to Invcstigatt

Covert Amu Transactioiis with Iru

and

Scute Select Committee on Secret Military Asdstuce

to Iru ud tiie NicaraguB Opposition

WtuhiHtUHt. DjC.

UU^Declassitied/Released on_[l5j5f 7~S8
under provisions ot E 12356
by K Johnson. National Security Council

fo^

UNtlASSIHED

275

liNCUSSIFIED

MABE: IP18800PK

1482 irinutes. __
m83 [Becess.l

m8« Chalriran inouye. The hearing Hill please come tc order,
mes ?'r. Nields.

11486 Kr. NIELD";. ThanK ycu, Hr. Chairman.

1U87 Colonel yorth, I asked yot before we broke about a number

1U88 cf particular individuals and whether they were aware of the

iue9 Hank shipment in November cf 1985. Are there any other

11*90 officials cf the United states Government who were aware of

mgi the Hawk shipment m Novemher cf 1985?

1492 wr. NORTH. I think I have given ycu the list that l

1493 believe tc have beer aware.

1094 "^r. NIFLP?. were any officials at the Department of

1495 Defense aware that i8 Hawk missiles or some number cf Hawk

1496 missiles had actually been shipped by Israel to Iran?

1497 "r. KCRTH. Anair, I believe that they may have — excuse re,

1498 I ^plieve they may well have been, because I think I made

1499 sever?! efforts to coordinate with them the replenishment cf

1500 the Hawifs. I think I had a discussion, if I remember

1501 prcpFPly, with DCD cfficials about both Hawks and TOWs. I

1502 wouldn't be asking them abcut Hawks if they hadn't already

1503 teen ordered up as a need for replenishing.

1504 You know, I am a little concerned I am leaving the wrong

1505 impression, because I honestly think that all of us who were

1506 engaged in this activity were looking for the right way of

UNGUSSIFIEO

276

UNCUSSIFIED

NAKE: IP18800PW '"• • ^"^ IWVII ■ tU PAGE 68

1507 dclng things, that there was nc intent to avoid, to in any

508 way violate the Artrs Expert control Act, ana that if there

1509 was confusion within the COD over how I was going atcut it,

15 10 it was because of try cwn ignorance In not Knowing the right

1511 way to start, and I want to coire bacK to the finding issue

15 12 as tc why we arrived at using the Economy Act procedures for

1513 that whole business.
15 iu t»uch cf the confusion that may exist out there n«ay have

1515 simply been because when this Kid was told to find a way to

1516 replenish things, i didn't know how to go about doing it,

1517 anf, in fact, it wasn't until the latter part of January

1518 that a real methodclogy was proposed.

1519 fr. NIELDS. I just want to maKe sure. Hy question simply

1520 i«: vho in the Department of Defense was told that there

1521 had actually been a shipment, if anybody?

1522 f.r. NCRTw. An unrefreshed, long-tia.e-ago memory would

1523 tell me that I probably talKed about that delivery with Br.
1521* Koch, possibly with General Powell, possibly with «r.

1525 AriTitage.

UNCLASSra

277

/ jRy-j ^(^

278

279

r».t^y-.\cg-t.tifty^

^^'?'^m

VVftVv7

^u 3 .: r/ZJZyL ^7i.c^

3--/0

^rv^'(^

^W<rC^_

280

UNCUSSmED

A'.- u c

Monday, 11 Nov 198 5
15-23 November 1985
Thursday, 28 Nov 1985
Monday, 16 Dec 1985

Tuesday, 24 Dec 1985
Wednesday, 25 Dec 1985
Tuesday, 31 December 1985
Wednesday, 1 January 1986
Friday, 3 Jan - Fri, 10 Jan 86
14-18 January 1986
Monday, 20 January 1986
Sun, 9 Feb - Mon , 17 Feb 1986
31 Mar - 13 Apr 1986

Holiday

Germany, Bahrain, Pakistan

Thanksgiving

1440 Departed for Dover, Ceremony
for airplane crash victims

Departed at 1300

Holiday

1000 Departed

Holiday

Bangkok, Hanoi, Hong Kong

Japanese SSC, Honolulu

Holiday

Mid East (Cairo, Jordan, Israel)

Korea, Japan, Philippines,
Thailand, Australia, Honolulu

**l^ Declassified/Released on > 0/'6ft 88

undei provisions of E 12356
by K Johnson, National Secunty Council

UNOASSra

281

UNtUSSIFIED

^o Dctc

2lS<»^

OFFICe OF THE ASSISTANT SECRCTAXY OF OEFENSE
iMTinwA'POWAt MOiwrY krtkxm

FMCAMOIOM

penally Oeclassrfied/Released on H)ff69i

Johnson, Nat,onal Secur.iy Counc.l

t-.' •

''H.*''

»;•. - • ».

:fe>;ir

«?*!V^-fi'^,

'9^:^

282

UNCLASSIHED

JOUST HEARINGS ON THE
IRAN-CONTRA INVESTIGATION

Continued Testimony of diver L. North

Tuesday. July 7. 1987
Afternoon Session

House Select Committee to InvcstigaU
Covert Anns Traasactioiis witli Iran

Senate Select Committee od Secret Military Assistance

to Iraii and t)ie Nicaragnan Opposition

WatJuMgioH, DX:.

9 JJ^^9

ii«*r Oeclas?i(ied/Rel';ased on 1 1 F^B Rg
undei pruvisc.ns ot E i:!3S6
by K Johnson. National Secumy Council

UNtlASSIHED

283

mmm.\i

NAME: IF18800FI1 "^"■■**l#il ltl/ P'-^E 107

2m0 KncMletige -cf rr,y day-to-day activities liKe rry superiors did,

^«11 but certainly they knew that I was the guy that was getting

2U12 things done.

2013 That's Why they called me up, that's why there is a note

2um to the effect that, hey, Ollle, you know, here these guys

2U15 from Country whatever It Is are talking about S2 million,

2U16 why dor 't you go over and put the smile on them, maybe

2m7 they'll kick In.

2018 wr. NIELDS. HOW about the chief of the central American

21119 task force?

2U20 "^r. NORTH. Oh, I'm sure that he had a detailed grasp

2U21 cf— well, I say a detailed grasp — I'm sure that he had an

2422 adequate sense of what I was dcing.

2U23 Mr. NIELDS. And what is your basis for that belief?
202U ir. N05TH. We used to have meetings with the Restricted

21(25 Interagercy Group, we used to have secure conference calls,

2U26 ?nd on one occasion T can recall laying cut for the group— in

2427 fact, I think It was after the S100 million had been voted

2428 ty both Houses, hadn't been sert forward to the President — I
2tt29 can recall a meeting in an office in the Pentagon where I
2«30 went down item by item ty item the things that I was doing
2U31 and asked them point blank whether or not I had tc continue
2U32 to r'o them to keep the resistance alive, because even though
2U33 the money had been authorized and both tills had been

2«3i* passed, we couldn't get it forwarded to the President.

UNCLASSIFIED

284

nHmsim

2tt35 And wewent down item by item by item on my checKlist of

U36 what I was having directed cut each month or each quarter or

2U37 each weeic to support the resistance, and I asKed them point

2'*38 blank whether this should continue.
2U39 rr. NIELDS. whc was there?

201*0 nr. NORTH, well, i would have to look at my

2041 contemporaneous note at the tirre, but I think there is a

2UU2 note Id one of the notebooks I gave you to that effect.
2U43 Hr. Flers was there, cr. Abrams was there, ar. Armita^e

2iitii was there, I think r.c. Hichael was there, I think General

2UU5 foellering wa? there.

24U6 Tr. NIELDS. wculd ycu go through them for us, please,

2U07 item by item, what it was you told this assembled group you

2i««8 were doing?
2049 «r. NORTH. What I'm saying is I didn't say, look, on a

2450 given day I'm Qoing to walk out and go talk tc so and so

2451 about so much money, vhat they knew is that I was the

2452 person whc was causing these things tc happen. There was no

2453 doubt in their mind.

2454 That is why, when an airplane goes down in Honouras, they

2455 call me to get the bodies home and to pay the ccsts. That's

2456 why, Hben somebody needs scmething done, in the case of this

2457 contact right here you pcirted out as part of Exhibit No.

2458 79, they called me.

2459 These people knew what I was doing. They knew that it was

mmm

285

UNCLMooirlED

HAHE: IP18B00FI' ^^^*- ^'^

2tt6« a ccvert cjeration telng ccnciucted by this Government to
.U61 succort the Nicaraguan resistance.

UNCIASSIHED

286

UNCIASSIHED

NAHE: IB18800P?! |||l||| Hniliril II PAGE
~U62 PPTS DOTSON _-
. J DC>!M GLASSMAP
2U6U

21*65 Hr. NIELDS. Hy question Is, you Indicated tr.st during
2tt66 this meetlno at the Department of Defense, at the Pentagon,
2«67 you went down item ty Iterr. would you qq down for us item
21*68 hy Item what It is you told them?

2<*69 Hr. NORTH. I don't have the list tetore me. I gave

2tt70 cc?ies of that to you. It 1? in the stuff that I gave to

2U71 you, sever binders full.

^''■'S Br. NIELES. Did you discuss the re-supply operation?
2U73 nr. voRTH. I think so.
2U7U nr. NIELDS. Cid you discuss efforts to obtain armaments?

■^5 wr. NCRTH. Probably, i am talking about aid to the

1 .6 internal cppcsition, food, medical supplies, et cetera. I

2U77 thinU it was all on that list, tick, tick, tick, tick, tick.
2'*78 Kr. NIELDS. Including munitions?

2U79 Hr. NORTH. I am not absolutely sure it says munitions, it

2U80 might have 3ust said logistics, air support, it might have

2U81 just said certain things about the internal activities. You

21482 have get it, along with the list of names of people that

2U83 were there at the ireetlng.

2«8tt Hr. WIELDS. IS there anything else you can recall ticking

2(485 off during this meeting?
2U86 Hr. NORTH. NO, but you have the note, and I arr sure you

iwssro

287

WASHINGTON O C :030I-2J

r\IC t«ic

(iNCIiSIFIED

5FFICE OF THE ASSISTANT SECRETARY OF DEPEWSfe^' * *^\M

In reply refer to:
1-24078/86

MEMORANDUM FOR THE ASSISTANT SECRETARY OF DEFENSE (INTERNATIONAL
SECURITY AFFAIRS

SUBJECT: Nicaraguan Democratic Resistance Aid Package (S)

(S) Attached per your request is a memorandum for the Secretary
on this -norning's breakfast.

Nestor D. Sanchez

Deputy Assistant Secretary of Defense

Inter-American Affairs

Attachment
a/s

Partially Declassified/Released on /QptfB fljg

under provisions of E 0, 12356
by K Johnson, National Security Council

Dir, I A Region

UNCUiSSra

288

V5HINGTQN D

Ir. reply re:
1-24079/86

;'.E.".ORANDL.'M FOF TH.F. SECRETARY OF DEFENSE

THRU THE UN'DER SECRETARY OF DEFENSE FOR POLICY

SUBJECT: Nicaraquan Democratic Resistance Aid Program (S)
-- INFORMATION MEMORANDUM

(S) I chaired a breakfast meeting this morning, 28 August, of a select
interagency group which will oversee the implementation of the SlOO mil-
lion program to support the Nicaraguan Democratic Resistance. At^^^^^
th^meeting were James Michel, State, representing Elliott Abrams J^^^^l^
SKtt^ CIA, Oliver North, NSC, LtGen John Moellering, OCJCS, and Nestor
S^^Wez.

BHOHSSW

289

wmmB

NSITIVE

(S) The group I chaired this morning plans to continue meeting on a
weekly or biweekly basis so that we can keep ourselves collectively
informed on all developments and be able to provide timely policy
guidance to the program. We will keep you informed and request your
guidance or approval, as required.

Prepared by: Nestor D. Sanchez
DASD(ISA)IA/75884

M^EP

82-690 0-88-11

290

Hffim

C 2709

\ f\nTiitcMe

1 ^/aa/gl rrtctc:

5??

"flOef provisions of e.O 12356
VJWMwn.NafonaiSeeurtylouncil

UNCLASSIFIED

291

IINCUSSfflED ti-Tz

C 2710

15 March 1985

MEMORANDUM FOR: THE RECORD

SUBJECT: Breakfast with Secretary and Deputy

Secretary of Defense. 15 March 1905

Partially Declassified/Released on 10^63 S8
under provisions of E 12356
by K Johnson, National Sscuniy Council

vHwrnm

13^3

292

C 2711

7. Question of the support to the Contras cane up. The Director
noted that we should have another meeting on it but following last week's
meeting of the LSG we tended to be leaning towards non-lethal aid. I
described the assignment given to Motley to develop different options
which could be packaged and tnen played against Senators Lugar and
Ourenberger to see what conbination of options in a single package night
be acceptable to Congress. But I noted at the meeting that there was no
agreement that we would be limited to non-lethal aid. The Director said
that McFarlane was to meet with Lugar and O urenberger today. In closino
th^ecretary stated that he had heard that !
I^^^Vhad earmarked S25 million for the Contras
increments

^ ■ yohn N. McMahon

DUI

000
-£A/ODCI

EA/DCI

Exec. Sec.
Exec. Registry

UNCUSSIFIED

-v^S-iX^

293

/3J-^LSrC

WASHINOTOH. O C 20SOM4OO sj^^>d< ^•^ '^ <{''*■•(

IIJUL

,„««T. 0. POIIC TO...- .... <•) ^^^^^^

D 576

u„"„*.b!r.i. 9ood ""'"".'js-iSiS ir;»t to |iv. o..

,a... Th.r.for.. I b^li. ^ _

to and
d

^Xd ca... Th.r.ror.. ^ ^^,,„au.. A. T.b
.1— ^AM not specify PO** "^PT „-«-nd»tion to

you forward Tab A. j,j„^(3jj|3j5,,,ga/Reieasedon_L!iiBS8
undfif provisions ol E 12356
by K Johnson, National Secunty Council

( V-^ ' -' t"

fc. C^^*^^ , t^-"- //

uNf^sm

294

295

UNCUiSsra

D 578

UNCUSSIFIED

296

mmm

THE sec

__ WASMINCTOW.

TMC OltTIWCT or COL\J*m*A

579

SUBJBCTi us policy Toward Ir»n (•)

^ ^^ .M.1V vAouAflt for coBBcnta on
(T8) Thi. ««-or«ndu. '-P^^SaS ^liri^9r«« with -any of
th. diaft WOD o« 0»:i'"i"r"iUi?S*of^ipropc..O •ction. ..«
tho Mjor point, in th. p.p.r. ••JJ^iiy aif«i«xt to con«id«r an

b« i«»u«d in tho propcd form.

•hort-t«r> ch.lX.ng. -i-t b. *» "^J-J^*3 cour... thi. will put
Jovi.t in«l"-nc.-- J< -• «;/,«nTloi;.?-tir« ^i of h.^ing .t
u. in . to.tt.r pcition to ^••"" * tr>j'l,.n. ond.r no circus
Swt n.utr.l/non-ho.til. r.ljtio2 with J^J^iction on .r» ..!.. to
.t.nc... ho»#.v.r. .hould ** »»^^Ji;j'r««tning n.utr.l on ..1..
lr«. Ktf^tims to cut ^f JJ-^J^'Ji; ^.y, w. h.v. to profct our
to .ith.r b.lligor«nt ^» <»?r?*.j5J ;S i,;,. K policy r.v.rm.l
long.r-r.ng. ^"^•[••i-.t" StJ^li^LtSt.nt by thoH n.tioo. who. w.
would b. ...n "^^""Pii""^.; Hlii. •««» vbuld lik.ly l"d to
h.v. urg.d to «-««"^° *'?r-l 2d • Si«tblo .It.r.tion of th.

U;rro-!i5nriS-.ic.'*Tt :Sul5"av.«.ly .ff.ct our nowly -rging
r.l.tion.hip with lr.q. ,^y^^

^. «- >.»«>v*r aoa. of Which *r. i^liwi
(TS) Th.r. .r. oth.r •f^f5"t^,;*^S^^id.r our curr.nt policy
in thv^iraft «^J- ^t^^^JTiS jSt.nnS^u.nc. .nd to l..d toward

to tr^tO pr.V.nt an incraa.. *» Pamally Declass,fied/Release<J on_lL^cS88

« BOr. •Od.rat. p0.t-KnO«.Xn* **•» under provisions of E,0 12356

by K Johnson. National Security Council
Int.lliq.nc.

°a colLcting infonnation o n_tti*^^^ ^^^^^^^
wSSI^^SSf^^ on ii.nt Hying k.y

nr^Si-DOll!Sl""na who «ay b. »or. favorably

5i;j:r.d^;o^;lScrr5: in th. r.gion.

ClASSIPXED BY

UNCLASSinED

297

mmm

580

ei*«n b«tt«r infonatlon froa u
^^J»t«bll«h^conf cf with

tiol
~- Through contact* vith alilaa »w^ « < ^

pot.nti.Hy r.c.ptiv. Ir.S« i;rL^'^*'L'*^**^«» *«»
rwunci.tion of •!• t.-ij^^^.a Jj™?^*^.^'* *^*A'
n... to ..^ik . n.90ti.t.5 .itJl.i!Br^ f; *^*^*" *'iliin9-
th.ir non-int.rf.;.nc. in SS.r^t-I? *}• J'*«-Ir.q w.r.

er.uin9 PoUtic.l-mlUt.r^^«^- ?.**• f*»^^^ct .nd in-
•tion council countSi.! ^ coop.r.tion with Ooif Cocp.r-

can.rci.1 £ir» ^d Ir.ni.B arJLf^ ^' *'^"* ^t*'««n
th. pr...ur. on our .luS^^JiffSif J J* 'k??^** l=cr.M.
•nd posaibl. .Motion.. con.id.ring public .tatnant.

Public Dip if

gconoaie

r«9iiD.. In ton., our oublle^Tr? *^* ««"»» Iranian
Iran a. a countr^ Til SS JraS!Zi*B!Lr" !5^" *-t^°9 '
-11 a. Shia I,IJ.. a.^. .;i!° S^?'^: "^ cultur., a.
opposition to th. ^lici.r It^L * ■»>o«l<» •ii«>ha.iz.
«dth. corrupt ~KiJ;'ri?J.'5;/j:::;!J'"^*» 90v.rn«.„t
■•nt. .hould aia to .ncouraa. *>«--' T"^"*' ®"' 'tat.-
<Jl..gr.. or oppo-rrl^SJ^uSS? '^•^^^ ^n Iran who

iO£t_cggtrol« ar. air.«<(

r.aa.M.

curbing all but .trictly

UllilAEI!

prM.nt control.
rt..

298

581

— Za eeajanetion with dl«cr««t political contacts propoaad
•bow, w« coald au^gaat to tha Zraaians that corraet ra-
lationa would Includa ralazatlon of currant 08 trada
rastrlctloaa and noraal trada ralatlons with an Iranian
govarnaant that la not hostlla to 08 lataraata.

(T8) Z concur with tha balanea of tha raccaaiandatlena In tha
draft B8DD In ao far as thay support currant 08 policy. My racoa-
■andatlons raf lact ay vary atrong vlsw that 08 policy auat raaaln
ataadf aat In tha faca of Intamational lawlaaanass pazpatratad by
tha Iranian raglaa. Changaa In policy and In conduct, tharafora,
■ust ba Inltlatad by tha Iranian govarnnant. By ranalnlng flmly
oppoaad to currant Iranian govarnaant pollelaa and actlona< yat
aupportlva of nodaratlon and a longar tara laprovaaant In ralatlons,
w« can avoid tha futura analty of tha Iranian paopla and davalqp tha
lavaraga nacassary to countar a poaalbly vary dangarous Incraasa In
8ovlat Influanca. In particular, wa naad to ba praparad for a
peaalbla parlod of turaoll aa tha raglna baglna to changa. by
building up affactlva instruaanta of influanca and accaaa to paopla
and organizations within Iran, ao aa to countar a Soviat attaint to
proaota a pro-Sov'lat auccaasor raglna.

ect Saeratary Shults

wmifiJHED

299

UNCUSSIFIED

UHdASSra

D 582 y^.

J.- V.J

ili

300

UNpssm-

WASMINeTON. TMC OlSTRICT Of OOLU*

583

oiSTmcr Of ooluawa

iMC

NEMORAHOUH POR THE AS8ZSTJUIT TO THB PRKSIOEHT FOR lATZOHAX.

sBcmuTT APnaM

tUBJXCTt Ut Policy Toward Jrun (8)

(T8) This ■•■orandua respond* to yoar r«qu««t for eoBB«nts on
th« draft BSDD on US-Iranlan relations. Nhil* X a^ra* with aany of
tha aajor points in tha papar, aavaral of tha propoaad actioiM aaaa
quastionabla. Moraovar, it is axtraaaly difficult to considar an
asp licit ravision of our policy toward Xran as 10119 •• va contlnua
to racaiva avidanca of Iranian co^licity in terrorist actions and
planning against us. I do not baliava, tharafgra, an aSDD should
ba issuad in tha propoaad forB.

(T8) Z fully support tha policy objactlva that *onr priaary
short-tara ehallanga auat ba to block Moscow's afforts to Incraasa
8oviat influanca." If wa ara succaasful, of ceursa, this will put
us in a battar poaition to raalisa a longar-tara 9oal of having at
laast nautral/non-hoatila relations with ^ost QlMllnl Tnn Ondar
no cireuastancas, howavar, should wa now aasa our rastrictlon on aras
salaa to Iran. Attaapting to cut off ams whila raaainlng nautral
on aalas to aithar balligarant is ona of tha faw «rays wa hava to
protect our longer-range intereats in both Iran and Iraq. A policy
reversal would be seen as inexplicably inconsistent by those nations
whoa we hava urged to refrain froa such sales, and would likely
lead to increased aras salaa by thea and a poaaibla alteration of
tha atratagic balance in favor of Iran whila Rhcaainl is still the
controlling influence. It would adversely affect our newly cswrging
relationship with Iraq.

(T8) There ara other actions, h^raver. acas of which ara iJ^lied
in the draft HSDO, that wa could take now under our current policy
-to tr^to prevent an Increase in Soviet influence and to lead towanl
a aora aoderata p^fF'Iflg**"*^ Irant

Intelliqenca

.. Improve US intelligence gathering capabilities in the areas
of weakness identified in the S WIB, especially with regard
to collecting inforaatio^^J

[B^hasis should be on identifying key
players in the political arena t^o aay be aore favorably
disposed to US concerns in the region.

Partially Declassilied/Released on.| lrc6e »e>
under provisions ol E 123')5

CXAS8ZFIED lY
DECLASSIFY OS OADR

uNty^ffii^

___ of ___ copies

301

w&mm

584

— Oivao b«tt«r infonatlon froa inf lllq>nc« •ourc»«. ■««!»

m^plZ^lj^ortla^rola^iB th« adainiatratiOB of Xal^Se
ml* but who alao favor polielaa aor* f •▼orabX* to Ot
•Dd w««t*m IntarMta, and davalep tactics for proTidlii9
political and/or financial support to tho«« alaaanta
oppoaad to Xhoaaini and tha radical*.

Political

— Through contacts with allias and frianda. «• should dis-
craatly conmnicata our daaira for corraet ralations to
potantially racaptiva Iranian laadars baa ad on thalr
ranunciation of stata-aupportad tarrorisa* thair wlXling-
nass to •mtlk. a nagotiatad sattlaaant to tha Iran-Iraq war,
thair non-intarfaranca in othar atatas' affairs, and thair
cooparation in sattling OS-Iranian claias in tha Bagua
Tribunal .

— Maintain our nautrality in tha Iran-Iraq v«r whila ancour-
aqinq third party initiativas to and tha conflict and in-
craasinq political-ailitary cooparation with Gulf Coopar-
ation Council countrias.

Public Diploaacy

— ter public atataaanta on Iran ahould bring praaaura to
baar aquaraly whara it ia naadad— on tha currant Iranian
raqiao. In tons, our public position sunt avoid castinq
Iran aa a country and tha Iranian pacpla and cultura, as
wall as Shia Islaa, aa tha anaay, but should ai^hasisa
oppoaition to tha polieiaa of tha prasant Iranian qovamaant
and tha corrupt aallahs insida tha qovamaant. Our atata-
aanta ahould aia to ancouraqa thosa alaaants in Iran who
disaqra* or opposa raqiaa polieiaa.

Bconoaic

— A full ranqs of US axport controls ara alraady in affact.

raaaaaaa tha affactivanaaa of prasant controla
eurbinq all but strictly civilian

In conjunction with discraat political contacts propoaad
abova, wa could suqqaat to tha Iraniana that corraet ra-
latlona %rauld includa ralaxation of currant US trada
raatrictiona and noraal trada ralations with a poat-
Khcnaini Iran that is not hoatila to 08 intaraata.

IMUSSIFIED

302

\mmm

D 585

(W) -T'eoMar with th« balase* of

th. Iranian rSI-i! cSfniS ™iiS!i iSfT"-! '•'^"tS^S
«•! b« lnltl«t«d by •TnS^riSlS^-^SL^ cooAict. th«r«forSf
<9PO««4 to currant IranlM SJJrJLH ^ffT?** ^ raialala, flJiiy
•upportlT. of ■odaratlon^nTI^SSSSi Hii^f** "^ •etIoM. yat ^
onca tha ra^iaa haa chSoS? Ja S Ivi?5"*i^J'T*~"* *» ral.Jlon.
Iranian paepla and dmyrmi^lJ^', "void tha fatura analty of t^

uiar, wa naad to ba Brl«.,l!i - »ovlat Influaaea. in oartle.

CuJttT

BCi Sacratary Shults

UNDUSSIBED

303

UNCllSMIEt

11/20/86 zGOO
(Historical Chror.ology)

of^^^--^ N 30363
/IRANIAN CONTACTS AND THE AMERICAN HOSTAGES

From the earliest months following the Islamic revolution in
Iran, the U.S. Government has attempted to reestablish official
contact with that government in order to discuss strategic
developments in this critical part of the world and reconstruct a
working relationship. Even before President Reagan came to
office the U.S. Government agreed to try to expand security,
economic, political, and intelligence relationships at a pace
acceptable to Tehran. In the fall of 1979, the U.S. undertook
three secret missions to Tehran:

September 1979 -
request of the Iranians

t secretly with Bazargan at the

^ I

!li
ill

ill
lit

s .^ =
% \(^

October-November 1979 _
normalization of relation

When these meetings and the secret November 1, 1979 meeting in
Algiers, between Brzezinslci .and Prime Minister Bazargan, became
public in Iran, they helped precipitate the takeover of the U.S.
Embassy by radical elements and led to the resignation of the
Bazargan government. These events have adversely influenced
Iran's subsequent willingness to engage in any direct contact
with the USG.

Despite mutual difficulties involved in re-establishing normal
relations, our strategic interests in the Persian Gulf mandate
persistent efforts to establish a dialogue. In this regard, it
is notable that only a few major countries do not have relations
with Iran — Egypt, Jordan, Morocco, Israel, South Africa, and
the United States. Even Iraq continues to have diplomatic
relations with Iran.

Iran is the key to a region of vital importance to the West, yet
it is increasingly threatened by growing Soviet military power
and political influence along its borders and inside its
territory. Over the course of the last two years, the Soviets
and their surrogates have moved actively to gain greater
influence in the Gulf:

The Soviets believe that once Khomeini dies, they will have
an excellent opportunity to influence the formation of a
government in Tehran that serves Soviet strategic interests

in the area.

TOP SECRET
Declassifv:

uNctj^ra

UNGIJ^m

Cononuaist nations have become the principal arms suppliers
to Iran — making Iran dependent on this source of supply in
contending with an increasingly strengthened Iraq. This
leads US to the conclusion that the Soviets may well be
attempting to pursue their own revolution in Iran. That is,
by fueling both sides in the conflict, the Soviets could
well encourage a disastrous "final offensive" by Iran that
would precipitate a political disintegration in Iran,
leaving a power vacuum which the Soviets could exploit.
Specifically, the indicators of Communist. influence in Iran
are:

The increasing desperation brought on by the costs of the Iran-Iraq
war has exacerbated Iran's vulnerability to Soviet influence.
Moreover, Soviet designs in Afghanistan, pressure on Pakistan,
and actual crossborder strikes in Iran from Afghanistan have made
reopening a strategic dialogue increasingly important.

TOP SECRET

UNGUSSm

305

TOP SECR£T

UNCIASSIFIED

N 30365

In short, tha Soviets wars far battar positionad to improva
significantly thair influanca in tha ragion in 1985 vhan wa vara
prasantad with an opportunity to opan a dialogua with Iran, in
dacidin? to axploit this opaning, wa avaluatad pravious af forts
through mora convantional channals which had not succaadad.

About two years ago, senior Iranian officials apparently decided
that soma accononodation with the U.S. was necessary. Since 1983,
various countries have been engaged in overtures to the O.S. and
Iran in ai^ffor^t^stimulat^d^jac^eontac^batweei^h^tw^^ r/
countries^^^^H^I^^H^H^^^^^^^^^^^^^H^^^HHHj^H L^

Io»#aver, internal splits and debates maHei^diffioilt
!b? Uie Iranians to respond to these overtures.

Numerous individuals and private parties have likewise attempted |
to be helpful as intermediaries in establishing contact in Iran
or in seeking Iranian assistance in the release of
he Id hostage in Lebanon. T

In the spring of 1985, a private American citizen (Michael
Ledeen) learned from an Israeli government official (David
Kimche) that the Israelis had established a liaison relationship
with an Iranian expatriate (Manuchehr Ghorbanifar) in Europe who
sought Israeli help in establishing contact with the U.S. Govern-
ment. In acknowledging the need to demonstrate the bonafides of
the Iranian officials involved, he (Ghorbanifar) indicated that
his 'sponsors' in Tehran could also help to resolve the American
hostage situation in Beirut.

In June of 1985, in the midst of the TWA-847 hijacking, the
Israeli officials in direct contact with the Iranian expatriate
asked him to use his influence with senior Iranian officials to
obtain the release of the hijacked passengers. Two days after
this approach, four Americans held separately from the rest of
the hijacked sasseng ers were freed and turned over to Syr ian
authorities. pi|^|^0BVHHBMIi^V^^^^BBBBAMaj lis
Speaker RafsaiT^ani, who was travelling in the mid-east it the
time, and Iranian Foreign Minister Velayati both intervened with
the captors. Rafsanjani, in his speech on November 4, 1986, for
the first time publicly acknowledged his role in this matter.

TOP SECRET

uNtmra

306

^-2LJICM1 ^ ,j 30366

On July 3, 1985, during a visit to Washington, an Israeli
official (Kimche) advised National Security Advisor, Robert
McFarlane, that Israel had established a channel of communication
with authoritative elements in Iran who were interested in
determining whether the United States was open to a discreet,
high-level dialogue. The Iranians were described as comprising
the principal figures of the government (i.e.. Speaker of the
Majlis Rafsanjani, Prime Minister Musavi, and Khomeini's
heir-apparent, Ayatollah Montazeri) and as being devoted to a
reorientation of Iranian policy.

At this first meeting, McFarlane went to great length to draw out
the Israeli as to why he found the Iranian proposal credible,
given the events of the past six years. The Israeli replied that
their exhaustive analysis had gone beyond the surface logic
deriving from the chaos and decline within Iran and the
degenerative effects of the war, to more concrete tests of the
willingness of the Iranians to take personal risks. He noted
that the Iranians had exposed themselves to possible compromise
by meeting with Israelis and by passing extremely sensitive
intelligence on the situation (and political line-up) within Iran
— information which was proven valid.

The Israeli asked for our position on opening such a dialogue.
No mention was made of any pre-conditions or Iranian priorities.
McFarlane conveyed this proposal to the President (in the
presence of the Chief of Staff) . The President said that he
believed such a dialogue would be worthwhile at least to the
point of determining the validity of the interlocutors. This
decision was passed to the Israeli diplomat by telephone on
July 30.

On August 2, 1985, the Israeli called again on McFarlane. At
this meeting, he stated that he had conveyed our position to the
Iranian intermediary and that the Iranians had responded that
they recognized the need for both sides to have tangible evidence
of the bona fides of the other and that they believed they could
affect the release of the Americans held hostage in Lebanon.

According to the Israeli, the Iranians separately stated that
they were vulnerable as a group and before having any prospect of
being able to affect change within Iran they would need to be
substantially strengthened. To do- so, they would need to secure
the cooperation of military and/or Revolutionary Guard leaders.
Toward this end, they e.xpressed the view that the most credible
demonstration of their influence and abilities would be to secure
limited amounts of U.S. equipment. The Israeli asked for our
position on such actions.

TOP SECRET

W»ED

307

TOP SECR£T

DNEUfiSW

N 30367

Mr. McFarrafle elevated this proposition to the President at a
meeting within days that included the Secretaries of State and
Defense and the Director of Central Intelligence. The President
stated that, while he could understand that assuming the
legitimacy of the interlocutors, they would be quite vulnerable
and ultimately might deserve our support to include tangible
material; at the time, without any first hand experience in
dealing with them, he could not authorize any transfers of
military material. This was conveyed to the Israeli.

'a_
On August 22, 1985, the Israeli diplomat called once more to
report that the message had been conveyed and that an impasse of
confidence existed. He asked what the position of the U.S.
Government would be to an Israeli transfer of modest quantities
of defensive military materiel. McFarlane replied that to him,
such an action would represent a distinction without a difference.
The Israeli diplomat explained at great length that Israel had
its own policy interests that would be served by fostering such a
dialogue in behalf of the U.S., but that a problem would arise
when ultimately they needed to replace items shipped. He asked
whether Israel would b« able to purchase replacements for items
they chose to ship. McFarlane stated that the issue was not the
ability of Israel to purchase military equipment from the U.S. —
they had done so for a generation and would do so in the future
— but rather the issue was whether it was U.S. policy to ship or
allow others to ship military equipment to Iran. The Israeli
asked for a position from our government. McFarlane elevated the
question to the President (and to the Secretaries of State and
Defense and the Director of Central Intelligence) . T>e President
stated that, while he could envision providing materv?! support
to moderate elements in Iran if all the Western hostages we£e
freed, he could not approve any transfer of military materi^'l at
that time. This position was conveyed to the Israeli diplomat.

On September 14, 1985, Reverend Benjamin Weir was released in
Beirut by the Islamic Jihad Organization. This release was
preceded by an intense effort on the part of Mr. Terry Waite, the
Special Emissary of the Archbishop of Canterbury. To this date,
Mr. Waite remains the only Western er to eve
the Lebanese kidnappers,. '

In late September, we learned that the Israelis had transferred
508 TOW missiles to Iran and that this shipment had taken place
in late August. The Israelis told us that they undertook the
action, despite our objections, because they believed it to be in
their strategic interests. The Israelis managed this entire
operation, to include delivery arrangements, funding, and
transportation. After discussing this matter with the President,
it was decided not to expose this Israeli delivery because we

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wanted to retain ^he option of exploiting the existing Israeli
channel with Tehran in our own effort to establish a strategic
dialogue with the Iranian government. The total value of the 508
TOWs shipped by Israel was estimated to be less than S2 million.

On October 4, 1985, Islamic Jihad announced that it had "executed"
Beirut Station Chief William Bucicley in retaliation for the
October 1 Israeli air raid on PLO installations in Tunis. This
announcement led to a series of meetings in Europe among the U.S.
(CIA and NSC), Israeli, and Iranian intermediaries. In these
meetings, the Iranians indicated that, while their ability to
influence the Hizballah was waning, the Hizballah had not killed
Buckley; he had in fact died several months earlier
causes. We have since substantiated this informatior

iJce symptoms.

Buckley probably died on June 3, 1985 of pneumonia-iike sym^

In mid-November, the Israelis, through a senior officer in the
Foreign Minister's office (Kimche) , indicated that the Government
of Israel was convinced that they were nearing a breakthrough
with Iran on a high-level dialogue. The Israeli contacted a U.S.
official (North) and asked for the name of a European-based
airline which could discreetly transit to Iran for the purpose of
delivering passengers and cargo. He specifically noted that
neither a U.S. carrier nor an Israeli affiliated carrier could be
used. We were assured, at the tine, that the Israelis were going
to "try oil drilling parts as an incentive," since we had
expressed so much displeasur^ove^th^earlier TOW shipment. The
name the proprietaryH^^^H|||^^^^HHBwas passed to the
Israeli, who subsequentl^nl^^^^^^^^^^^^hartered through
normal commercial contract for a flight from Tel Aviv to Tabriz,
Iran, on November 25, 1985. The Israelis were unwitting of the
CIA's involvement in the airline and the airline was paid at the
normal commercial charter rate (approximately S127,700). The
airline personel were also unwitting of the cargo they carried.

In January, we learned that the Israelis, responding to urgent
entreaties from the Iranians, ha^ used the proprietary aircraft
to transport 18 HAWK missiles to Iran in an effort to improve the
static air defenses around Tehran. Our belated awareness that
the Israeli's had delivered HAWK missiles raised serious U.S.
concerns that these deliveries were jeopardizing our objective of
arranging a direct meeting with high-level Iranian officials. As
a consequence of U.S. initiative and by mutual agreement of all
three parties, these missiles were returned to Israel in Februarv
1986.

On December 7, the President convened a meeting in the White
House (residence) to discuss next steps in our efforts to
establish direct contact with the Iranians. Attending the

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meeting were the Chief of Staff, Secretaries of State and
Defense, the Deputy Director of Central Intelligence, and the
Assistant to the President for National Security Affairs and his
Deputy. Immediately after the meeting, Mr. McFarlane departed
for London to meet with the Israeli official and the Iranian
contact to make clear the nature of our interest in a dialogue
with Iran. At this meeting, Mr. McFarlane, as instructed by the
President, stated that:

the U.S. was open to a political dialogue with Iran, but
that no such dialogue could make progress for as long as
groups seen as dominated by Iran held U.S. hostages; and

the U.S. could under no circumstances transfer arms to Iran
in exchange for hostages.

These points were made directly to the Iranian interlocutor. The
Iranian replied that, unless his associates in Tehran were
strengthened, they could not risk going ahead with the dialogue.
Mr. McFarlane acknowledged the position but stated we could not
change our position. In a separate meeting with the Israeli
official, Mr. McFarlane made clear our strong objections to
Israeli weapons shipments to Iran. Following these meetings,
Mr. McFarlane returned to Washington and shortly thereafter left
active government service.

On January 2, the Prime Minister of Israel dispatched a special
emissary to the U.S. (Amiram Nir) to review proposals for next
steps in dealing with Iran. The Israelis urged that we reconsider
the issue of providing limited defensive arms to those attempting
to take power in Tehran, since all other incentives (economic
assistance, medical supplies, machine parts) were of no value in
shoring-up those who wanted an opening to the West. Admiral
Poindexter noted our stringent objections to the HAWK missile
shipments in November and noted that the U.S. would have to act
to have them returned (a step undertaken in February, when all
18 missiles were returned to Israel) . In that any implementation
of the Israeli proposals would require the active participation
of the intelligence community, the NSC Staff (North) was tasked
to prepare a covert action finding. Work on this Presidential
finding commenced on January 4.

On January 6, the President, the Vice President, the Chief of
Staff, and the National Security Advisor and his assistant
reviewed the first draft of the Finding and the recommendations
made by the Prime Minister of Israel through his special
emissary.

On January 7, the President met in the Oval Office with the Vice
President, the Chief of Staff, Secretaries Shultz and Weinberger,
Attorney General Meese, Director Cjisey^ ^d the National Security

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Advisor to discuss the overall situation in Iran and prospects
for a strategic dialogue. It was again noted that Mr. McFarlane,
on retum-£^rom his trip to London, had recommended that no
further action be taken unless a mechanism could be established
by which the U.S. could exert better control over events. He
agreed, in principle, with Director Casey that providing limited
quantities of defensive arms after the hostages were released
still had merit. Both Secr*tary Shultz and Secretary Weinberger
objected to any provision of arms, citing that we could not be
sure that these would really help moderate elements and that, if
exposed, the project would not be understood by moderate Arabs
and would be seen as contravening our policy of not dealing with
states that support terrorism. The President decided that we
should attempt to )ceep the Israeli channel active as long as it
offered possibilities for meetings with high-level Iranian
officials and left open the issue of providing defensive arms to
Iran if all the hostages were released.

It was further determined by the President that any dialogue with
the Iranians must be aimed at achieving the following goals:

Devising a formula for re-establishing a strategic
relationship with Tehran.

Ending the Iran-Iraq War on honorable terms.

Convincing Iran to cease its support for terrorism and
radical subversion.

Helping ensure the territorial integrity of Iran and
coordinating ways in which we might counter Soviet
activities in the region.

The President made clear that a Western dialogue with Iran would
be precluded unless Iran were willing to use its influence to
achieve the release of Western hostages in Beirut. He also made
clear that we could not and would not engage in trading arms for
hostages. Secretaries Shultz and Weinberger retained their
original position on providing any arars to Iran, but Attorney
General Meese and Director Casey both supported the concept as a
valid means of opening the dialogue. Attorney General Meese
noted a 1981 determination by then Attorney General French Smith
that transferring small quantities of arms through third
countries under a Covert Action Finding was not illegal.

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On January 16, a meeting was held in the National Security
Advisor's office with Secretary Weinberger, Attorney General
Meese, Director Casey, and CIA General Counsel Stanley Sporkin.
At this meeting, the final draft of the Covert Action Finding was
reviewed and was forwarded to the President with Secretary
Weinberger dissenting.

On January 17, 1986, the President approved a Covert Action
Finding (Tab A) directing that the intelligence community proceed
with special activities aimed at accomplishing the goals set
forth above. The President futher determined that the activities
authorized by the Finding justified withholding prior Congressional
notification due to the extreme sensitivity of the dialogue being
established. He further noted that public knowledge of the
program would place the Americiui hostages in Lebanon at greater
risk. Noting his concern for the lives of those carrying out the
operation (both U.S. and foreign), he directed that the Director
of Central Intelligence refrain from reporting the Finding to the
appropriate committees of the Congress until reasonably sure that
those involved would no longer be in jeopardy.

On February 5-7, U.S. officials (NSC and ClA
representative of the Israeli Prime Minist i
senior-level Iranian official!

I met in London. At this meeting, tn« Iranians agrc
:he USG would provide defensive weapons (TOWs) to Iran,
they would, in turn, provide same to the Afghan Mujahideen. The
U.S. side agreed to explore this possibility and, working with
the Israelis, established the following mechanism for transfer of
the weapons:

The Iranian intermediary (Ghorbanifar) would deposit funds
in an Israeli account.

The Israelis would transfer funds to a sterile U.S.-
controlled account in an overseas bank.

Using these funds, the CIA would covertly obtain materiel
authorized for transfer from U.S. military stocks and
transport this to Israel for onward movement to Iran.

Using the procedures stipulated above, S3. 7 million was deposited
in the CIA account in Geneva on February 11, 1986 and on
February 14, 1,000 TOWs were transported to Israel for pre-position-
ing. These TOWs were transferred by CIA from DOG (U,
jton, Alabama) and transoorte^throug^
[using standard CIA-OOD IHIHHP logistics
ffangements";" Policy-level coordination for these arrangements
was effected by NSC (North) with DOD (Armitage) and CIA (Clair
George). The TOWs were placed in a covert Israeli facility
awaiting onward shipment.

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On r«bru»ry^ 19-21, U.S. (NSC and CIA), Israeli and Iranian
officials mat in G«nnany to discuss problems in arranging a
meeting among high er2igaftI_of f icials . At ..this_.meet_ing..__thii

^BB^HiHBlHIBHH^HHHH^'^^^^°^*^^uthorTzation

'wa.a receivea rrom wasnington, cne u.s. side agreed to provide
1,000 TOWS to Iran as a clear signal of U.S. sincerity. This
delivery was conanenced on the morning of February 20 and completed
in two transits to Tehran on February 21. Transportation from
Israel to Iran was aboard a false flag Israeli aircraft. On ••'• -
return flight from Iran, these aircraft carried the 18 HAWIc
missiles which Israel had sent to Tehran in November 1985 wit
USG aforeknow ledge.

On February 24, U.S. (CIA and NSC) officials met again in
Frankfurt with the Israeli and Iranian officials to discuss n
steps. At this meeting, the U.S. side urged that the Iranian
expedite a meeting among higher-level officials on both sides

On February 28, the Prime Minister of Israel wrote to Preside
Reagan (Tab B) urging continued efforts to achieve a strategi
breakthrough with Iran, but asking consideration for the safe
of recently seized Israeli hostages.

On March 7, U.S. (CIA and NSC) and Israeli representatives me
with the Iranian intermediary in Paris to determine whether a
further progress was possible in arranging for a high-level
meeting with U.S. and Iranian officials. During these meetings,
the intermediary emphasized the deteriorating economic situation
in Iran and Iranian anxieties regarding increasing Iraqi military
effectiveness.

The escalation of tensions with Libya, leading up to the April 14
strike, prevented further dialogue from taking place until the
Iranians urged the intermediary (Ghorbanifar) to accelerate the
effort in late April, 1986. At that point, the Iranian expatriate
advised us through the Israeli point-of-contact that the
leadership in Tehran was prepared to commence a secret dialogue

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with th« -6nit«d States along the lines of our established goals.

— U ~
On May 6, 7, 1986, U.S. and Israeli officers met in London with
the Iranian intennediary in which he urged that we take ismediat
steps to arrange for a high-level U.S. /Iranian meeting in Tehran
During the London meeting, the Iranian urged that we (O.S. and
Israel) act urgently to help with Iranian air defense. He
emphasized that the Iraqi Air Force was increasingly effective c
late and that the Iranians were desperate to stop attacks on
population centers. The Israelis also used this opportunity to
privately ask the U.S. to replace the 508 TOWs which they had
sent to Iran in August, 1985.

Based on assurances that we could at last meet face-to-face witl
top-level Iranian officials, on May 15, the President author ize<
a secret mission to Tehran by former National Security Advisor
McFarlane, accompanied by a CIA annuitant, CIA communicators,
members of the NSC staff, and the Israeli and Iranian interlocu-
tors. The Israelis were informed via coded message on Hay 15
that the U.S. had agreed to the Iranian request for limited
anti-air defense equipment and to replenish the 508 TOWs sent by
Israel.

On May 16, the Iranians, through the Israelis provided S6.5M for
deposit in the CIA secure funding mechanism. The funds were used
to acquire 508 TOW missiles (for replenishing the TOWs Israel
shipped in September 1985) and acquiring HAWK missile^^^ctronic

Warts. This material was subsequently moved ta|^^m||||
repackaged and shipped to Kelly AFB for onward movement to
'on May 22. As in the February shipment, the CIA provided
logistics support for the movement of this materiel to Israel.

In order to ensure operational security, the McFarlane trip was
made from Israel, coincident with the delivery of a pallet of
spare parts for Iranian defensive weapon_s _3vs^tems (HAWK spare

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electronic parts) . At the SDaaificrequest of th- Tr. •

alias foreign documentation ■■■■■■L\;^Z • ^^ Iranians,

was used. C?A alS proviJSd^iPt^anscortatifr" '^* "^ "

CONUS to Israel for ?he McFarU^r^rty?'^?he groSp'w^^" '"°"'

transported from Israel to Tah.-«n Tk^^Ij ^ "S^^oup was

with false flag mar"ngs? ""^ *" ^""^^ ^^^ ^°^« "O^

In the course of the four-rfau «M>ir ?« ■>a\ ■ -^

Sg^Jh^-s-^^^^^^^

" fr?^ ^Se'SdSrEas'ir ^P^^""^ ^'^^^ '"-^^ to expel us

that we firmly opposed their use of terrorism;
"" reverse -J^^^^^^ '^^^^ revolution and did not seek to

poUcrL''ti ;""*Lfhf„nn''*M-^'"'"*'"*"^^ involving regional
policies (I.e., Lebanon, Nicaragua, etc.), but micht also

c'f^ t"" °^ =°'™°n interest (i.e., Afghanistan !nd ?he
Soviet threat to the Gulf) through dialogue.

During these meetings, both sides used the opportunity to detail
the obstacles to implementing a strategic relationship between
5clarI!ne°eSo^as!;.d'^^,*'"''r'°" "? the%oints noted abo':? Mr
involvement in ^h!h«^^* political problems caused by Iranian
[j^r »™hT!^ „^ hostage issue. The Iranians obiected to the

cont!Sed'?SG"b?oc);ina'o5'T^ '"^P''" ""''^'"^ P^^^ ^°^ P^- ^^-
concinuea LSG bloclcing of Iranian assets in the U.S., even aft^r

U.S. courts had ruled in their favor. During the cour« of ^n!L
T^Vt^V'.^''^ '"""" Officials admitted tia? tSey "oJld not w!n
"S^.Tt^; ^"^ ""! ^" * dilemma in Tehran over how-to end t°l
^nnfi K ^'^^? 5^^ "^^'^ to present an Iranian "victory" before it
laSdL Hu^^'^'''^^*'- l""^^ emphasized that the origlSIl aggresJor!
Saddam Hussein, must be removed from power in order for the wir

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to end. Mr. McFarlane concluded the visit by summarizing that
notwithstanding Iranian interest in carrying on with the dialogue,
we could not proceed with further discussions in light of their
unwillingness to exert the full weight of their influence to
cause the release of the Western hostages in Lebanon.

On June 10, Majlis Speaker Rafsanjani, in a speech in Tehran made
guarded reference to Iranian interest in improved relations with
the U.S. On July 26, Father Lawrence Jenco was released in the
Bekka Valley and found his way to a Syrian military checkpoint.

On August 3, the remaining three pallets (less than \ planeload)
of electronic parts for Iranian anti-aircraft defenses (HAWK
missile sub-components) arrived in Tehran. As in all flights
to/ from Iran this delivery was made with an Israeli Air Force
aircraft (707) using false flag markings. Timing of the delivery
was based on coordination among U.S., Israeli and Iranian
officials.

In early August 1986, the contact with the Iranian expatriate
began to focus exclusively on the willingness of the USG to
provide military assistance to Iran in exchange for hostages and
we sought to establish different channels of communication which
would lead us more directly to pragmatic and moderate elements in
the Iranian hierarachy. In mid-August, a private American
citizen (MGEN Richard Secord, USAF [Ret.]) acting within the
purview of
Europe with
senior Irani
CIA, this Iranian ^
detailed discussions

ict in

:of a

Snjani) . with the assistance of the
fwas brought covertly to Washington for
We judged this effort to be useful in
establishing contact with a close confidant of the man judged to
be the most influential and pragmatic political figure in Iran
(Rafsanjani). These discussions reaffirmed the basic objectives
of the U.S. in seeking a political dialogue with Tehran. We also
provided assessments designed to discourage an Iranian offensive
and contribute to am Iranian decision to negotiate an end to the
war. The assessments also detailed the Soviet threat to Iran.

Through August, September, and October 1986, numerous additional
meetings were held in Europe between U.S. representatives and the
new Iranian contacts. During the October 26, 1986 meeting in
Frankfurt, Germany, the U.S. side, as in the past, insisted that
the release of the hostages was a pre-requisite to any progress.
The Iranian , 'HiH^^^B^^ urged th at we take a moi
resii

316

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Th« Iranian* also proff«r|^^n^th«U . S . accepted, the offer of
a Soviet T-72 tanJc^|m|^|HIHH||^^ The have also

offered to provide a copy ortne*OT^lge interrogation of Beirut
Station Chief William Buckley. At this meeting, Ali stated that
there was a "very good chance that another American or two would
be freed soon." On October 29, with U.S. acquiscence, Israel
provided Iran with an additional increment of defensive weapons
(500 TOW missiles) .

Late on 31,|^^^m^H^^^^called the
(HaJcim) tasked to maintain contact and advised that Iran had
"exercised its influence with the Lebanese" in order to obtain
the release of an American — David Jacobsen — and an uncertain
number of French hostages. Re further noted that this would be
part of the purpose of the Iranian Foreign Minister's vi«it_
Syria — an event we became aware of on November 1, 1986.
stated that the situation in Tehran, »• f n »« Tr^^j^ <»i
ovet Hizballah we re b oth deteriorating

iXl^Rce

ravi

2, David Jacobsen was released by his captors near "Eha old
American Embassy compound in West Beirut. The U.S. Onbassy in
East Beirut immediately dispatched an embassy officer to West
Beirut to pick up Mr. Jacobsen.

It is now apparent that persistent U.S. efforts to establish
contact with Iran and subsequent public speculation regarding
these contacts have probably exacerbated the power struggle in
Iran between pragmatic elements (led by Rafsanjani) and more
radical factions (under the overall sponsorship of Ayatollah
Montazeri) . In late October, radical supporters (of Montazeri)
revealed the (Rafsanjani) contact with the USG and the terms of
the contact. In order to defend himself against charges of
colluding with the USG and to preserve a degree of latitude for
both parties, Majlis Speaker Rafsanjani provided a purposely
distorted version of the May 1986 McFarlane mission in his
November 4 address to the masses. Moderate Iranian political
leaders apparently now feel constrained to settle their internal
political problems before proceeding with the U.S. relationship.
The revelations in Tehran regarding the McFarlane mission are
demonstrable evidence of the internal power struggle. The
October 1986 arrest of radical leader Mehdi Hashemi, a close
confidant and son in-law of Ayatollah Montezari, for acts of
terrorism and treason has caused further internal conflict.

Resolution of the Lebanon hostage situation is also complicated
by waning Iranian influence in Lebanon due in part to financial
constraints and the fact that the Libyans are expanding their

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On November 7, the day after a meeting with U.S. officials,
Iranian government authorities arrested six other individuals
involved in radical activities. Among the two were senior
military officers and a Majlis deputy (Ahmad Kashani) , the
grandson of Ayatollah Kashani, a conspirator in the 1949 attempt
against the Shah.

Despite these internal difficulties and attendant publicity in
the Western media, the Iranians continue to maintain direct
contact with the USG and met again iii_2sneya on Nov«

statement" will be

made m the near future by Rafsanjani.

Bo tA^HH|m^^^^have warned' that furtTTer
disclosures could ha^^tne^personally and the longer-term
interests of the two countries.

It is important to note that since the initiation of the USG
contact with Iran there has been no evidence of Iranian govern-
ment complicity in acts of terrorism against the U.S. We do not
know who seized the last three American hostages in Beirut
(Messrs. Reed, Cicippio, and Tracy). The Islamic Jihad
Organization (IJO) has

:t is possible that these three

Americans were kidnapped at the direction of Iranian radicals

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loyal to the now imprisoned Mehdi Hashemi. If so, this could be
an effort to undermine the nascent U.S. -Iranian strategic
dialogue and exacerbate the internal Iranian power struggle
against the pragmatic faction with which we have been in contact.

Throughout this process, the USG has acted within the limits of
established policy and in compliance with all U.S. law. The
shipment of 2,008 U.S. TOWs and 235 HAWK missile electronic spare
parts was undertaken within the provisions of a Covert Action
Finding.

During the course of this operation — and before — the U.S. was
cognizant of only three shipments from Israel to Iran.
Specifically:

The Israelis acknowledged the August 1985 shipment of 508
TOWs after it had taken place. Until we were advised by the
Israelis, and had the information subsequently confirmed by
Iraniem authorities, we were unaware of the composition of
the shipment. We subsequently agreed to replace these TOWs
in May of 1986.

The November 1985 shipment of 18 Israeli HAWK missiles was :
not an authorized exception to policy. This shipment was
retrieved in February 1986 as a consequence of U.S.
intervention.

The October 1986 shipment of 500 TOWs from Israel to Iran
was undertaken with U.S. acquiescence. These TOWs were
replaced on November 7.

In support of this Finding and at the direction of the President,
the CIA provided the following operational assistance:

CIA communications officers and an annuitant to assist in
various phases of the operation.

Sterile overseas bank accounts for financial transactions.

A secure transhipment point for the dispatch of U.S.
military items from the U.S.

Transhipment of military items from the U.S. to Israel.

Communications and intelligence support for the meetings
with Iranian officials and the McFarlane trip to Tehran in
May.

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Cleared meeting sites in Europe for meetings with VTi^m79
officials.

Fabricated and alias documentation for U.S. and foreign
officials for meetings in Europe and Tehran.

The weapons and materLrfl provided under this program were judged
to be inadequate to aiter either the balance of military power or
the outcome of the war with Iraq. They have, however, demonstrated
the U.S. commitment to Iranian territorial integrity and served
to support those in Iran interested in opening a strategic
relationship with the U.S. U.S. efforts over the last 18 months
have had tangible results on Iranian policy:

— ^The Rafs anjani/ Velayati i ntervention on behalf of the TWA
#847 pa«engeis IJune l!*a5) .

Iranian direction that the hijacked Pan Am #73 would not be
received in Iranian territory if it left Karachi.

The release of three
hostages.

at least two French

The initiation of an Iranian dialogue with their regional
neighbors.

Continued delay in the Iranian "final offensive."

Finally, it mu«t al«o be noted that the U.S. arms embargo
notwithstanding. West European nations have provided $500 million
a year in military equipment to Iran. Most of these transfers
were accomplished with government Icnowledge and/or acquiescence.

All appropriate Cabinet Officers have been apprised throughout.
The Congress was not briefed on the covert action Finding due to
the extraordinary sensitivity of our Iranian contacts and the
potential consequences for our strategic position in Sout.hwest
Asia. Finally, our efforts to achieve the release of the
hostages in Lebanon must continue to rely on discreet contacts
and intermediaries who cannot perform if they are revealed.

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320

yNCLASSIFII

Finding Pursuant to Section 662 of
The Foreign Asaiatance Act at 1961
^_ A3 Amended, Concerning Operations
Undertaken by the Central Intelligence , ,
Agency in Foreign Countries. Other Than '• -J 3 8
Those Intended Solely for the Purpose
of Intelligence Collection

I hereby find that the follov.'ing operation in a foreign
country (including all support necessary to such operation) is
important to the national security of the United States, and due
to its extreme sensitivity and security risks, I determine it is
essential to limit prior notice, and direct the Director of
Central Intelligence to refrain from reporting this Finding to
the Congress as provided in Section 501 of the National Security
Act of 1947, as amended, until I otherwise direct.

SCOPE DESCRIPTION

Iran Assist selected friendly foreign liaison services,
third countries and third parties which have
established relationships with Iranian elements,
groups, and individuals sympathetic to O.S. Government
interests and which do not conduct or support terrorist
actions directed against U.S. persons, property or
interests, for the purpose of: (1) establishing a more
moderate government in Iran, (2) obtaining from them
significant intelligence not otherwise obtainable, to
determine the current Iranian Government's intentions
with respect to its neighbors and with respect to
terrorist acts, and (3) furthering the release of the
American hostages held in Beirut and preventing
additional terrorist acts by these groups. Provide
funds, intelligence, counter-intelligence, training,
guidance and communications and other necessary
assistance to these elements, groups, individuals,
liaison services and third countries in support of
these activities.

The USG will act to facilitate efforts by third parties
and third countries to establish contact with moderate
elements within and outside the Government of Iran by
providing these elements with arms, equipment and
related materiel in order to enhance the credibility of
these elements in their effort to achieve a more
pro-U.S. government in Iran by demonstrating their
ability to obtain requisite resources to defend their
country against Iraq and intervention by the Soviet
Union. This support will be discontinued if the U.S.
Government learns that these elements have abandoned
their goals of moderating their government and
appropriated the materiel for purposes other than that
provided by tj^is Finding ._

The White House -- ,1 OGCR TS 0801-86

Washington, D.C. X.'---^V. '■ ' ;j^>^^^^opy 1

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A/26S82

ENTIReTH

82-690 0-88-12

322

3 9971

Testimony of Mr. Richard L. Armltage,

fv«l IV, Social Security Number

Assistant Secretary of Defense

[nternatlonal Security Affairs), Office of the
Sec retary of D efense. Washington, DC 20310,
Ph: ^■■■mtaken at Room «E808. Pentagon,
on zH becenber 1986 from 0937 to 1016, by
COL Ned Bacheldor and COL Janes Morton.

Partially Oeclassilied/Relessed on 11^6^8 %

_^« ^ .««* undei provisions oi E 1'3-i6

COL MORTON: It Is now 0937. 2« December 1986. by K Johnson, National Secmc/ Co.nc,i

The persons present are:

The witness, Mr. Artnltage; the Investigating officers.
Colonel Morton and Colonel Bacheldor.

We are located In room OESOS In the Pentagon.

This Is an official Investigation concerning the sale and/or
transfer of missiles, spare parts and other related equipment to
selected Middle Eastern countries. It Is being conducted at the
direction of The Secretary of the Army.

Sir our report will be classified Secret]

MR. ARMITACE: I understand.

COL MORTON: I want to explain to you a unique aspect of
Inspector General activities. An Inspector General is a
confidential investigator and fact finder for the commander
Information obtained in a report prepared by the Inspector
General »rt for the use of the directing authority or hlghe
authority as they deem appropriate. Testimony which you gl
be used In the Department of the Army for official purposes
is Department of the Army policy to keep such Information a
reports on a closely held basis. However, In some Instance
there may be public disclosure of Inspector General materia
required by law and regulations. Normally, however any rel
outside the Department of the Array requires the approval of
Inspector General and In such cases release when unavoldabl
be kept to the minimum necessary.

Upon completion of the Interview I will ask you whether you
consent to the release of your testimony to requests from members
of the public. Your lack of consent does not mean that your
testimony will not be released If it Is required by law.
However, no release will be made until the office of The

ve can

. It
nd

1 as
ease
The
e win

Exhibit 17

iwsm'

(ARMITACE)

323

■*4ssfe

IREO

testimony to determine

Inspector General has reviewed yoi
release Is required.

Any questions sir?

COL MORTON: Shaking head no.

MR. ARMITAGE: No.

COL MORTON: During the course of this Interview you will be
asked to furnish personal Information. The Privacy Act since
1971 requires that when you are asked to furnish personal
information you be Informed of the authority for that and other
required Information. The statement I handed you earlier serves
that purpose. Sir, have you read and do you understand the
Privacy Act of ^9T^^

MR. ARMITAGE: I understand It, and I have read It.

COL MORTON: Very good. Tour testlaony will be recorded and may
b-« transcribed so that an accurate record can be made available
to the directing authority.

You are not suspected of any offense under federal code, nor
are you the subject of any prejudicial Information, nor an
offense under local law. However, I am not advising you of the
rights of which such a person Is entitled. If you do become a
suspect for any reason during our Interview, I will tell that you
are a suspect and infora you of your rights. However, I would
like to advise that you do not have to answer any questions, the
answer to which may tend to Incriminate you. Any questions, sir?

HR. ARMITAGE: I have no questions.

COL MORTON: Would you please rise so I aay swear you in?

(The witness, Mr. Richard L. Armitage, was duly sworn.)

COL MORTON: Please be stated.

BT COL MORTON:

Q. Sir, please state your full name and grade.

A. Richard Lee Armitage, Executive Level Four, Assistant
Secretary of Defense, International Security Affairs.

9972

And Social Security Number?

Blf COL BACHELDOR:

Exhibit 17

IWSlASSffi-

(ARMITAGE )

324

BNCMSStfe

9973

Q. Sir, could you start by giving us a general description
of what you know about the Incident on the missile transfer or
Hawk repair parts transfer?

COL MORTON: Back on tape, sir.
went back in the July time frain<

You were talking about the reply

MR. ARMITACE: Yea, yea. Roughly July
Mr. McFarlane over the Secretary's slgnatur
uh, about this until late November. I was
Middle East, Pakistan I believe. Came back
discussions with ny State friends. We were
transfers to--to uh, Iran, possibly from Is
no confirmed Intelligence, but speculation
believe that the Secretary of Defense had 1
(portion of text deleted) tha

that some people In the White House had bee
Iranians. Armed with that suspicion of the
around the admlnlstriitlon and finally got t
Ollle North, and asked him If he knew anyth
admitted to me that'he had been meeting wit
I expressed to him my surprise at this, and
boss, the Secretary, would be horrified at
personal view that Ollle was way out on a 1
get uh. all the urn uh President's advisors
figure out who's doing what to whom. I don
an eventual meeting In December or not, but
around December 7th, Saturday December 7th,

sent the reply back to
e and heard no more.,
on travel In the
and I had several
seeing rumors of arms
rael. I say rumors,
on It. Also, I
ndlcated that
t he was suspicious
n dealing with

Secretary, I nosed
o Lieutenant Colonel
Ing about It, and he
h Iranians In Europe.

said to hla that my
this news, and my own
irab and we'd better
In the same room and
't know If that caused
for whatever reason
there was a meeting

Exhibit 17

flNWSIflEIT'

(ARMITACE)

325

WMSSIflEfl

D 9974

held with the President and I know for sure that my boss and
Secpetary Shulti were there and I can't say 0*ef Inl 1 1 vely who else
was there. But at that time aras for Iran were discussed. The
Secretary caa« back and basically Indicated that he thought that
the baby had been strangled In the cradle. In other words this
idea was goinc nowhere. I heard nothing until Dec - January. In
•arly January, again approximately the 7th of January, there was
another aeetlng-- with the President. The Secretary of State and
the -Secretary of Defense were there. The uh Attorney General was
there, I believe the Vice President was there and Mr. Polndexter
was there. I can't say who else. In which the arms to Iran Idea
was discussed ags n, and Mr. Shultz and Mr. Weinberger were
adamantly opposed, and I can only assume were eloquent in their
opposition for all sorts of reasons, to Include legalities. I
know the Secretary of Defense waa very suspicious that this alght
not be legal. Uh, he came back from the meeting and did not
Indicate, the Secretary came back from the meeting and did not
Indicate that any decision had been made. I believe It's correct
to say that he came away from that meeting thinking no decision
had been reached. ..Some time in approximately late January,
.'.Colin Powell, however. Informed me that he had been instructed
by the Secretary to move, ..have the Army move, weapons under an
Economy Act transfer, to the CIA, so it was clear to me at that
time that a decision had been reached sometime after the January
7th meeting and that it had gone against the Defense Department's
point of view. And that is we were now to supply these weapons.
All General Powell told me, as I remember, is that he was doing
this as a courtesy and because he had the Secretary's permission
to let me know that basically our policy advice had been
overridden. And he informed ne the Secretary told him to prepare
the Basic TOWs, have the Army prepare Basic TOWs for shipment to
the CIA, and his, the only two points he made to me about It was
that he did talk to General Thurman ..and that he uh, the
Secretary uh, was not, was very unhappy, ..with this development,
but the Secretary had said that an Economy Act transferred to the
CIA, and, my words, but the thrust was that the department was to
lose no money on the sale, that's my words.

COL MORTON: Did he give you numbers sir?

MR. ARMITACE: I know the numbers now. I can't remember that he
gave me the numbers. Uh , I can't remember that, but I know he
told me weapons. And I can't remember If he said radars or not.
I know now (COL MORTON: Sure.) uh, I must say just for the
record, some of these events are over a year and half old so my
memory is a little hazy, and then in preparation for testimony
over the last four or five weeks I've become a lot smarter on
this issue than I ever thought, so occasionally my remembrance
might run together with what 1 know, you know after the public uh
announcement .

COL BACHELDOR: It was alleged in the, In
discussed numbers of weapons, of monies a\
throughout the fall

imm:

falls, that NSC had
allable possibly uh
forth.

(AR.MITAGE )

■IINMlflEff-

i3 9975

MR. ARHITACEr I have--

COL BACHELOOR: Were you aware of any of that sir?

HR. ARHITAGE: Well I aa from subsequent discussions that General
Powell said he had discussions about numbers and weapons to ae,
and !'■ aware of this subsequent to public revelations. I wasn't
awa'ce of it at the tiae. There was one discussion — and I want
to say Noveaber or Deceaber, but I was gone and General Powell
had to get soae pricing infornation fron DSAA and I think was the
HAWK aisslles and the Defense Security Assistance Agency gave hln
the inforaation on HAWK aissiles, and when I cane back DSAA had
made ne aware that they had provided to General Powell soae
inforaation on HAWK aissiles. My best remembrance is
Noveaber/Deceaber 85 on that.

COL MORTON: Earlier sir, I believe you said the COL, General
Powell said the Secretary directed hia to ship Basic TOWa.

MR. ARMITACE: That's what I said.

COL MORTON: Okay,
of TOW then.

It was the Secretary's decision on the type

HR. ARMITAGE: Uh--well that's how I remember it (COL HORTON-
right sir) that the Secretary said we're going to go Basic TOWs
whether he said vanilla TOWs or Basic TOWs, I don't know. The
Secretary told ae now subsequent to all this, in the last several
aonths, he told ae that, when I asked hia in preparation for
testimony, who told hia to do it, he said well it was the
President. Whether It was the President through Poindexter, or
the President himself, I don't know, but that's what the
Secretary told me. Uh , whether General Powell said to me TOWs or
basic TOWs— it wouldn't have nade any difference to me (COL
MORTON-yes Sir) because any weapons was, you know we lost our
virginity, I was appalled at It all.

COL MORTON: But to your best recollections you knew of no
specific number nor a dollar amount available.

MR. ARMITAGE: No. My, I know I — I have a specific
recollection of item. 1 know nothing about dollar amounts. And
I don't think that I know specific amounts of missiles though
General Powell might have told me. He's a very thorough man. He
probably did, but it didn't mean anything.

COL BACHELDOR; Based on your current position or any position
you've her, held sir, would you have any idea what a TOW would
cost or aight cost.

MR. ARHITAGE: I know what a TOW is and I've seen ' ea in combat,
uh so I know exactly what it is. I have no idea what it costs.
In fact, had never had a discussion of money involving this issue

■mmm

(ARMITAGE)

327

JNCLASSIFIEO..

D 9976

nyseir. Involving this Issue, other than the discussions I had
with people lUe LTC Arobrlght and all »a I prepared for
testimony and I had to learn what we paid.

0, General Powell mentioned uh that he In fact tasked the
Army, and aa you stated to talk to General Thurnan. Old he at
any tine talk about any other tasking or any other discussions
with you--agaln I can give you a name. General Russo was the Aray
point of contact.

A. He, yes, he told me, now this Is after the fact, he's
told ne that he's had many discussions with General Russo about
uh the TOW shipments. He said he had many many conversations
with Russo. Now I learned that subsequent.

COL MORTOH:
subject.

Was the subject the price sir or do you know the

A. I, I can't say the subject. It was about the shipment
and about the transfer but whether it was price, he has told now.
General Powell told me more recently in the last month or so that
he was quite sure that General Russo would have a clear
remembrance that Powell had said don't lose any money on the
deal. Uh, now that, but I've learned all that in the last month
or so. Month and a half.

COL BACHELDOR: In any of your discussions with General Powell

would you have, uh, determined the feeling that the Army was

having difficulty tstabliahing a price or maybe being inept. Or
have you. . ?

A. No, I, I got none of that. It was never Indicated to me.
And other than the conversation along the lines that basically
the policy decision went against us and uh, we're gonna provide
these weapons to the CIA and eventually In some manner they're
gonna go to Iran. Uh , I wasn't involved. And sporadically
during the year I heard either from Vice Admiral Jones or Mr.
Taft that there were other shipments. But I think this Is
probably the only discussion I had with General Powell.

Q. You mentioned one discussion with uh. Colonel North.
Did you ever again discuss this issue with Colonel North.

A. I discussed this Issue with Colonel North on numerable
occasions, in that, when I say this situation, or discuss this
issue, arms to Iran and hostages. I felt that it was Impossible
to distinguish to the public, or indeed in my mind where we were
selling arms to Iran for strategic dialogue or for hostages. I
thought it was anathema, and I told Ollie every time that I had
an opportunity privately, that I thought that this was a bad bad
policy and It was bad business and we ought to be out of It.
(COL BACHELDOR-Alrlght sir.) I never did talk to Ollie, in my
recollection about pricing or anything, and I know that I never
had a conversation with anyone in the Army about this until I

Exhibit 17

■Mommi-

(ARMITACE )

328

started talking w
for my testimony,

Lieutenant Co lonel~intibr Igh t ,
ice things were made public.

9977

In preparation

Q. Sir, what do you know, in general, about the requirement
Tor a government agency to notify Congress if the aroa are
provided to — in the intelligence arena.

A. My understanding was that the receiving agency had to
notify and that's all I know. I know what would happen under the
Aras Export Control Act if we made a foreign military sale. And
those notifications, uh I was concerned about an arms embargo to
Iran, uh, I expressed those concerns to the Secretary and indeed
I'm under the impression that he expressed those concerns to the
President. But regarding an intelligence transfer, I was under
the impression that any notifications had to come from the
receiving U.S. government agency. Because they were the ones
that ultimately would make the transfer.

Q. Were you aware at the time of a dollar threshold?

A. No. Uh, though I am aware of a dollar threshold on the
Arms Export Control Act. regarding Foreign Military Sales. I was
not and am not now aware of a dollar threshold of a for a covert
program.

Q. What Is the arms uh what is the dollar threshol
roughly sir?

d for

A. I think Its roughly fourteen ■lllion for a
Itea or fifty million per sale. A bunch.

ijor enc

Q. Are you aware of any discussion of between the Army and
DOD reference notification of Congress. And more specifically,
I'll tell you there is (MR. ARMITAGE - Yes.) a one million dollar
notification requirement.

A. Fine, one million? (COL BACHELDOR - Yes sir) I was not
aware of that, but I have in conversations with General Powell...
subsequent to this thing becoming public, plus ray own preparation
and looking at Army materials, aware that the General Counsel of
the Array had some reservations. And had expressed these.
General Powell, in Frankfurt, one of my trips to Frankfurt, when
we were discussing this issue recently, told me that he remembers
receiving from the Army, and he wasn't sure who, the memo that
had some concerns, and that he fired that over to John
Poindexter. And this is what General Powell told me probably six
weeks ago. I, in going through Army material, reviewed a Susan
Crawford memo, it was a one page memo I think to the Secretary of
the Army, and I had that sent down to General Powell in General
Doctor's office the other day. I said is this the one (COL
MORTOM - Yes sir, we got that) -- Is that the one by the way?

COL BACHELDOR: No sir it is not. According to General Powell.
I've talked to General Brown and he is again looking uh and

Exhibit 17

Mmm»

(ARMITAGE)

"l/NWSIflED"

D 997

General Powell has said (MR. ARMITAGE - I can't believe the Army
doesn't have a copy somewhere. I know the U.S. Array.) Hell
we're at a loss too sir. Uh and we're looking hard. General
Powell Is going to try to help us after the thirty-first (MR.
ARMITAGE - Oh, I'm sure he will). Sir, urn did you talk to anyone
In the CIA reference this matter?

■IBS to

ling

Sub-

ire

were

lade. . )

. of

MR. ARMITAGE: Reference arns (COL BACHELDOR - Reference ar
IrM, sir) I talked uh, no prior, prior to the decision be
made. In the Terrorist Incident Working Croup, Operational
group, that's called the OSG of the T-WIG, which I sit, the
have been general discussions with Dewey Clarldge. I've ha
general discussions about how we, the Department, meaning t
Secretary did not like this policy of arms to Iran. Those
the only. ..(COL MORTOM - That was before the decision was m
Mo after. (COL MORTOM - Mr. Clarldge) Yea, Dewey Clarldge
the CIA. Generally the only, the topic was only that the
Department didn't like this, thought It was bad business.

COL BACHELDOR: Tou mentioned that in the suaaer/fall of 85 you
lieard rumors, maybe even later than fall, but you heard some
rumors of possible transfers to Iran (HR. ARMITAGE - teal). Were
you ever able to substantiate those rumors?

MR. ARMITAGE: Well we were hearing from Arab countries a lot.
Saying that Israel's selling all kinds of things to Iran. Uh,
we'd see some intelligence about reports of Israeli shipments. I
hadn't substantiated It, however in my testimonies recently I
have had occasion to testify with Mr. Casey and others, and I've
learned a hell of a lot that we didn't know then, and among the
things that I've learned Is that apparently TOWs were shipped
from Israel, as well as HAWK missiles from Israel, to Iran. And
it is alleged that someone In the U.S. government gave permission
for these third country transfers. And the Secretary of Defense
didn't know about it and his Assistant Secretary of Defense for
ISA didn't know about It and I can assure you the Secretary of
Defense would have opposeJ it.

Q. It appears obvious based on your comments,
didn't know It before, but now do you know what Irar
for the shipment of TOWs? The first shipment.

sir, that yoi
paid Israel

A. 1 don't know what Iran paid Israel, yet I know what the
CIA was charged by the Army. This Is what I do know. I do not
know what Iran actually paid Israel, or If they paid Israel. (COL
MORTON - The Army ' s ..)( COL BACHELDOR - Sir, I'm referring to..)

COL BACHELDOR: To set the record straight I'm referring to the
potential shipment that we're talking about In the fall of 85.

HR. ARMITAGE: Yea, you're talking about the 508 TOW missiles. I
heard in testimony on the Hill, I believe Mr. Casey, he indicated
that there was a shipment In August or September of 85 of 506 TOW
missiles from Israel. It's the first I've heard of It. I have
no, I have no knowledc

Exhibit

'-teASStflEt'

RED

(ARMITAGE )

330

979

COL BACHELOOflj Our souret sir, for IRft " AT Wr nation Is the,
the Washlngron Post, but that la the source that I was talking
about. I Mas talking about that aource, that shipment and any
possible prlelng.

Nl. AIMITACE: I learned about that In ay Hill testlaony. Mr.
Casex. said that, I believe It waa Casey, that there was a
ah-tpaent... In August or September, September strikes me aa the
date, of TOW missiles.

Q. In all of this discussion, preferably prior, but any
discussion was there any talk about the ultimate recipient, we
know Iran now, but the ultimate recipient having trouble paying
for anything that they would get?

MR. ARHITAGE: I didn't have any discussions like that, and I
didn't hear it. Occasionally

(portion of text deleted)

I'd sec references to uh bitching about money, payments. But,
and I didn't understand .. the context, and in many cases didn't
understand (portion of because there were different
names used text deleted) Things of that nature.
So, I think I am content to aay I had no idea what was being
charged for the weapons to Iran, how the procedures of payments
were being handled, and even the existence of Swiss bank
acoouots.

COL HORTON: Tou mentioned earlier sir, you didn't know a
specific price that we were charging the agency, but did you know
that there was . . .

MR. ARMITACE: Mo, I know now of the specific price. Of course I
did not at the time.

COL MORTON: But previously? But was there any pressure to keep
the price down .. that you know of?

MR. ARMITACE: Not by me.

Q. Did you know of any such

■essure :

A. I didn't know of any. Uh, and I know I was asked on the
Hill .. was there any pressure from OSD, and I could only repeat
what I've been told by General Powell and by the Secretary
subsequently, that is the instructions were Economy Act and don't
lose money. To the CIA only. Don't have anything to do with
transferring to another country or another uh middle man or
agency other than the CIA.

COL BACHELDOR: Do you have any idea sir, if the Amy knew the
ultimate destination for the equipment?

Exhibit 17

BNCtttlED"

(ARMITACE)

331

WAssm

DiviJ:'

HR. AHMITAGE: I am under the very strong Impression that they
did not know. Impression. Whether the Chief of Staff of the
Arny, Cenexal Wlckhan, might have eventually known because of a
discussion he had with Mr. Taft In the April/May time frame I
can't speak, but the Army as far as the guys who were making the
• rrangenents , !'■ under the lopresslon they had no Idea where it
was going.

•. ■ 0. Did you get Involved at all In the transfer of the, or
correction, the request for HAWK missile parts. Mr. Taft handled
that through General Wickham. were you involved at all sir?

A. No, I was travelling with the Secretary of Defense in
Asia, and we were Informed about it subsequently. I only found
out much more recently that Mr. Taft had spoken to General
Wickham about it. As we were trying to. In a discussion I had
with Mr. Taft, to determine who knew what in the building, and
he, Mr, Taft Indicated that he had had a discussion with General
Wlckhan, so General Wickham knew sonethlng. How much I can't
say.

Q. Sir, when we talked to General Powell he specifically
Indicated, based on his knowledge and timing when he left, that
it would be important for us, or thought it would be Important
for us to talk to you and, uh, Admiral Jones. Based on your
knowledge sir do you think It would b« beneficial for us to talk
to Mr. Taft.

A. Tea. uh, I think this is Aray and the Chief of Staff
apparently had a conversation with Mr. Taft and I think you
should .

COL BACHELOOR: Jim I have no other questions.

COL MORTON: Okay there was one thing....: think we had a glitch
on these numbers and dates here.

COL BACHELDOR: Uh , no Jim, I can answer that question. Mr.
Aroitage and I were discussing missiles shipped from Iran to
Israel in the fall of 85 (MR. ARMITAGE - no from Israel to Iran)
(COL MORTON - Israel to Iran) I'm sorry Israel to Iran in fall of
85.

COL MORTON: Is it coincidental that the five oh elght(508) is
the sane number?

COL BACHELOOR: 'It may be coincidental.

MR. ARMITAGE: Come on guys. Look., .take Casey testified, I
can't remember which area I've had so many, that a shipment went
in the fall, and I or summer, and I think September, of five
hundred and eight TOW missiles,., from Israel to Iran. I would
maintain that the Department of Defense at least, one didn't know
about that shipment and number two the Secretary of Defense would

Exhibit 17

UNCL-ASSm'

(ARMITAGE)

iiNimsm'

9981

if he were asked, he would not have given permission for it. I
know th«t_. But Israel did It. And there Is an open discussion
whether the President did nod and say Israel could do it or not.
In my preparations for ny hearings I had to become aware of what
the numbers of missiles and spare parts and all were. Five
hundred and eight seemed like a strange shipment to me (COL
MORTON - Tes sir.). I didn't know why It was sent either. Why
would five hundred and eight basic TOW missiles be called for,
why not five hundred or six hundred or five ten(510). It became
apparent to me, however, based on what I heard Casey say, that
that five hundred and eight number went to Israel and not to
Iran, to repay five hundred and eight which previously had gone
from Israel to Iran. Do I make sense?

COL BACHELDOR: Well, no sir. Now you... I understand exactly
what you said (HR. ARHITAGE - That's my Impression). Let me, let
ne restructure the Array's Involvement as we know It. The Army's
Involvement, as we know it, started in January of 1986, and we
shipped initially a thousand, later five hundred and eight, and
then the last shipment of five hundred (MR. ARMITAGE: Right).
Are you now saying that the middle shipment of five hundred and
eight went to Israel for repayment or are you saying there Is
another five hundred and eight shipment.

MR. ARMITAGE: I'm speculating that that's what happened. That
that five hundred and eight, the coincidence Is so great, It
seems to lae that there's a very high probability that that five
hundred and eight, whichever shipment It was, that the Army
transferred to the CIA, eventually ended up In Israel (COL
MORTON - For repayment?). For replay, or replenish Israeli
stocks for five hundred and eight that they sold previously. I
don't know that. But the numbers...

COL BACHELDOR: And no one has said that.

MR. ARMITAGE: Pardon me?

COL BACHELDOR: You have drawn that conclusion...

MR. ARMITAGE: I draw that conclusion because the numbers sure
look kind of striking.

COL MORTON: That's why I asked. Is it coincidental, but there's
a reason?

MR. ARMITAGE: j[t seems to me. but I don't think the Army would
know that at alY. And there's no reason the Army should know it.

COL BACHELDOR: That would help, if that were true though sir
because we have the same question. Why five hundred and eight?

MR. ARMITAGE: The same .. I never .. I had the same question,
but It doesn't seem to me from your guys point of view to make a
tinkers damn difference. You were doing what you were told under

Exhibit 17

mmm'

(ARMITAGE)

UNcussffe--

9982

Econony Act provision to the CIA, The CIA waa the ones who knew
tht ultimate (Usposltlon. I can't say and 1 couldn't testify
(COL MORTON - Sure.) that I know those five hundred and eight
ended up In Israel, But I'd have to say that It seeas Blghty
suspicious that the numbers (COL MORTON - Yes sir.) are the same.
If you see what I mean? But for the Army's purposes, I can't
laaglne that haa any real relevance to the Army .. itself. You
war* transferring to the CIA which you were beln« paid .. over.

COL BACHELDOR: It gives us one more alternative to provide to
Hr. Marsh as to why the number five oh eight (508 ).. .

MR. ARMITAGE: Yea Indeed, and that's the only thing I can
offer.. .

COL BACHELDOR: And we've been searching for that, and In that
context sir your comments are very helpful because we did not
have that information.

MR. ARMITAGE: Now that's .. I would not and could not swear that
Israel made the shipment, but Mr. Casey thinks they did. Made a
shipment prior. In the summer.

COL BACHELDOR: See we've heard pallet loads, plane loads uh all
kind of reasons for five hundred and eight, so It again one more
piece of the puzzle.

MR. ARMITAGE: Well I think that, I hope that's helpful, but
that, !'■ under that inpression that Israel was repaid by the CIA
for a prior shipment. Impression.

COL BACHELDOR: Mo further questions.

COL MORTON: Sir you mentioned the need for a higher
classification . . .

MR. ARMITAGE: Well I'm talking about (portion of text deleted)

COL BACHELDOR: I know what the classification Is.

COL MORTON: (portion of text deleted) covers it?

COL BACHELDOR: (portion of text deleted)

COL MORTON: Okay, you can read me on.

MR. ARMITAGE: Now .'; are we

COL BACHELDOR: He has. . .

MR. ARMITAGE: And then I want a question for you and you may
want to turn the ralkes back on.

Exhibit 17

wimm

(ARMITAGE)

334

.OtKUSSIUUI.

?o5

Sir do you have any further Information,
:o present concerning the matters under

COL MORTOM: Okay sir.
statements or j|_yl<lence
Investigation.

MR. ARHITAGE: Una...

COL HORTON: That would be beneficial to us.

MR. iRMiTAGE: Well I've tried to think. In the t est Inonles , Ir
the give and take and the questions froa the Hill, you learn a
lot. Huh, I'm trying to think of the Aray's Involvement...

COL BACHELOOR: I do have a question for you.

MR. ARMITAGE: I don't know of anything...
following then I'll be glad to answer. I
that might be relevant to the Aray, I have
revelations, becoae a lot saarter of what
adalnlstratlon were doing to Include slttl
soae of our senior officials, closed testl
aore about the Issue, but I don't know of
would have relevance to the Aray. And I c
things that have rel evance to the transfer
these things to ^^^HH^^^^ ay under
000 transferred thea to the CIA, title and
we got out of the business. Uh, there are
of Inforaatlon and policy discussions that
aa aware of, and If it were appropriate wo
It. I don't think they have any relevance

let ae complete the
don't know of anything
, subsequent to public
various parts of the
ng In on testlaony by
aonies, so I know a lot
things that I think
ertalnly don't know

Uh, other than once
standing is we that Is
everything, and then
plenty of other bits
surrounded this that I
uld nake you aware of
to the Aray.

COL BACHELOOR; Mrs. Crawford, the Aray General Counsel, shared
with me a comment uh that was attributed to you that you had
heard In testimony soaeplace, that there either was or may have
been some pressure applied to the Aray. Is It iaportant to
discuss that sir?

MR. ARMITAGE: Yeah I, yeah I don't know. I'll tell you what I
heard. I gave a testlaony In front of the SSCI and It was over
and I stood up. And It was over. And we were walking out, and
soae of the staff aeabers said oh thanks alot you were very
helpful. And I said well I hope so and I hope all the DOO
witnesses are helpful. I said, "I must say that I'a not a
technician..." and I did say this for the record, "...and I
strongly urge you guys in your Investigation to talk to our Army
fellows who aade the transfers, they know this Issue, I'm not a
technician. I was engaged In the policy end of it, so please talk
to then." They sald'yeah, the only possible question for 000,
they said. Is the pricing question. And I said, uh, excuse ae,
•r* you indicating by that statement that there is soae Inference
that someone in the Secretary's office was leaning on the Amy to
lower the price. And they said absolutely not, we have no
indication of that. We have no understanding that its other than
Just what you told us. Basically the Secretary didn't like it.
He followed the President's orders though and did It, and said do

Exhibit 17

UNOASSn.

(ARMITAGE)

335

UNOi^m

D 9984

It undtr an Econooy Act and don't lose noney. But he said that
there aay have been a conversation that OUle North had with one
of the Aray ftilowa involved. And I said I don't know anything
about it. And that was the eoiament and I passed It on I think to
Susan. That was it.

COL BACHELDOR: Yes sir. she shared that with us.

COL MORTON: Do you know who North might have talked to?

MR. ARMITACE; No I don't know, .. they didn't say it happened
either (COL MORTON - If?). They said there aay have been(COL
MORTON - Yes. sir). And I said, basically I was trying to find
out if DOD, are we out of this now. And they gave us a pretty
good clean bill of health, except Tor that Issue. The pricing
issue, there's still sone questions. And that caused ae to ask,
certainly no questions that what I told you is not true because
it is ay understanding that OSD did not get into the pricing
problea. Didn't lean on the Aray. That's ay understanding. He
said no we don't have any Indication to the contrary to that.
TJiere aay be, it aay be that North talked to one of the, one of
the officers. 1 said, well you'll find that out froa the
officers. They can tell you that.

COL MORTON: Sir other than those you've already aentloned, do
you know anyone else who could provide further Inforaatlon on the
aattcr.

HR. ARMITACE: Let ■•, let ae recap. As far as I know in the
Departaent, the Secretary, now LTG Powell, General Thuraan
because of his discussion with General Powell, General Russo
because of the discussion that Thurman had with him, ae, Mr.
Taft, Vice Adairal Jones, and probably the Chief of Staff of the
Aray. After that I have to drop down to LTC Arabrlght who's the
neit person I ever talked to about this. And through Arabrlght I
talked to Mic Kickllghter and Indeed the Secretary of the Aray
saying I need the Inforaatlon to get ready for a hearing, lets
get going. Uh, what's the story here. Give ae the answer. And
I said I'a not prejudicing the answer, I Just need an answer.
Uh, so I think those are the only ones that had info raat
far I'a concerned. Obviously there are people who d
transfers, who know how to work these and I've seen d
names on differe at pltcta ^t_2»2±L—£Jl^ •' *•• P"* together the
chronologies for mH^^mH|^|H as sure
all those... (COL~ BAC HELDOR - Ye^sff we do.). Uh , other than
that, Ollle North. but^^HHl don't think Ollle's talking.

COL NORTON: Kind of hard to get answers...

MR. ARMITACE: Yea. that's what I understand.

COL BACHELDOR: Adairal Poindexter, sir.

UNtUp^-

(ARMITACE)

UNCIASSIRII'

9985

MR. ARMITACE: Yea, or Polndexter I guess, but my own belief Is
that General Powell, and you've spoken to hln. Is probably, first
of all he's Ut* aost honorable nan I've ever net and even If his
recollection was at direct odds with nine I'd have to say that
I'd so with hln. Because he Is a very honorable and very snart
■ an. (COL MORTON - Alris.ht sir) That's who seens to be the key
guy. Hake sure you check hln. It could be that .. well you can
do that with Charlie Brown or sonethlng If you did It. Check In
with' OSAA If you need any pricing Infornation. Charlie will get
the answers for you (COL MORTON - Alright sir.). What we're
charging these days for HAWKs and TOWs and things of that nature.

COL MORTON: Sir, this Is an official investigation. It Is
privileged in the sense that the report of 1 nve»t igation will be
■ade to the directing authority for such use as deened
appropriate. You are requested not to divulge the nature of the
investigation or questions answered or discussions included In
this interview with anyone except your counsel if you have some,
have one.

MH. ARMITACE: I already have to the Secretary of Defense.

COL MORTON: Yes sir. No I'm talking future. And the sole
purpose of that and its uh...

MR. ARMITAGE: I do not have counsel and hop* further that
there's no need for one.

COL NORTON: This is standard to prevent witnesses ooalng to the
attention... not Intended to reflect on you.

MR. ARMITACE: Well I wish you luck on the investigation. I'll
be interested .. I assune, well I know I'll get it. The results
of it. The Secretary's pronised it to the Hill.

COL MORTON: One final thing sir, uh you're renlnded that your
testiBony we've taken here is classified as will the report be.
Your testimony nay be nade part of an official IG record.
Individuals who do not have an official need to know aay request
a copy of this record, to include your testinony. If there is
such a request do you consent to the release of your testinony
outside official channels.

MR. ARMITAGE: No I don't.

COL MORTON: Alright sir. Do you have any questions sir?

MR. ARMITAGE: No I don't.

mmm

(ARMITACE)

337

-UNClASSIFe'

D 9986

COL NORTON: The time Is since 1016, the Interview is concluded.

(Tht for«(olnt testliiony of Hr. Richard L. Arnltagt was
recorded on ■agnetlc tape, transcribed by CPT Daniel C. Daley,
and verified by LTC Thomas R. Prlckett, Intelligence Oversight
Division, U.S. Army Inspector General Agency, the Pentagon,
Washington, D.C. 20310-1700)

MEMORANDUM FOR RECORD
SUBJECT: Deletion of Text (U)

2H January 1987

Portions of the text of Mr. Armltage's testimony marked "(portion
of text deleted)" were deleted in order to prevent the report
froa being over classified. This sanltlzatlon does not detract
froa the content of the testimony.

Exhibit 17

mms&m

(ARMITACE)

338

*5; 12R3S

CsCJ0348t»-SO®34<?7")

339

Ij2

wiMsm

-0 S'P^

Non-Log

NATIONAL SICUWTV COUNCU. (p^^.lo.h it (y CU^-^^J^^

Sept«mb«r 30, 1986 ,^e!-<i«***-^ c^efelO

TOP SECRgT >i'

ACTION '^ -^^^o2

MEMORANDUM FOR JOHN M. POINDEXTE*

FROM: OLIVER L. NORTH!-'

SUBJECT: Press Guidance r« Costa Rican Airstrip

Attached at Tab I is draft press guidance regarding the airstrip
at Santa Elena, Costa Rica, which was divulged by the Costa Rican
Security Minister at a press conference on Friday, September 26.
This story has now been picked up by the New Yorlc Times (Tab II)
and is generating press questions at State and Defense.

The press guidance at Tab I has been coordinated with State
(Abrams) , Defense (Armitage) , and CIAI^HHH Due to the
extreme sensitivity of the issue, your apPHvai is requested
before the guidance is used in responding to queries.

The damage done by this revelation is considerable. As indicated
in the CIA report at Tab III, the logistics support provided by
Project Democracy has had a profound impac^^h^^ilitj^^h^
resistance to sustain itself in the fiel ^

The airfield at Santa Elena has been a vital element in supporting
the resistance. Built by a Project D«"»«="=y P"P"5"fY JSttlillv
Corporation, S.A. — a Panamanian company), the field was initially
s I used for direct reiupply efforts (July 1985 - February 1986).

-.* Since early this year, the field has served as a primary abort
11? base for aircraft damaged by Sandinista anti-axrcraft fire. The
III photographs at Tab IV show the field in June 1986 *"«* /^f»"»9ed

^ft Project Dwoocracy /C-M/^ which made an emergency landing on the
|i| field early this ifcnth.'^

Is| The Arias Administration revelations regarding this J*=i;jl;J^y . J*^*
liif caused Project Democracy to permanently close Udall Corporation

ost and dispose of its capital assets. It has also resulted m the

loss of a facility important to keeping the resistance supplied
and in the field against the Sandinistas.

^^i^... 0.. UNOWSHSKB^ v:o2

340

mmm

TOP SECRET

/V ?

0933

prove his goodwi ll for our polj

ther^are important reaaon a to recei v both< r^"^~'
I^^^Hin the Ova^Offica. mH^UBphould be invited in
■P^Bbecause^m^^^lis increasingly supportive
Nicaragua proqr^^^^^BJ|wil^b^ir^h^J^ . f^""

possible to have a "3-minute p hoto opportunity" with the Presiden t
in order to presjuit h.ijj»

tmg IS highly appropriate.

RECOMMENDATIONS

1. That you approve /the press guidance at Tab I and authorize us
to pass it to Dan Ito^krd/Paul Hanley for their use if asked.

Approve

Jc-

Disapprove

jt you approve a brief photo op session with!

_^ luring your NSC briefing time in the October 17-21

timeframe. If you approve, an appropriate memorandum will be
prepared.

Approve

Disapprove

Attachments
Tab I
Tab II
Tab III

Tab IV

Press Guidance

NYT Article by James Lemoyne of September 29, 1986

CIA Special Analysis, 'Nicaragua: Rebel Resupply

Increasing," TCS 2922/86 of September 23, 1986

Photographs

TOP SECRET

wmsB

A K VJ G 2 I 3 2'

(jh.f

341

UNCLASSIFIED— "-'

PRESS GUIDANCE R£ AIRSTRIP IN COSTA RICA

DID U.S. PERSONNEL SUPERVISE CONSTRUCTION OF THE AIRSTRIP IN
NORTHERN COSTA RICA? N 3 934

"The U.S. Embassy in San Jose, Costa Rica, has reported that
during the Administration of Former President Monge the Ministry
of Public Security was offered the use of a site on the Santa
Elena Peninsula which could be used as an extension of the civil
guard training center at Murcielago. The site included a
serviceable airstrip which could have supplemented the small one
which is located near the training center. The offer was
reportedly made by the owners of the property who had apparently
decided to abandon plans for a tourism project. The Embassy has
no information on the Ministry's decision concerning the offer.
No U.S. Government funds were allocated or used in connection
with this site nor were any U.S. Government personnel involved in

its construction. Any further inquiries should be referred to

the Government of Costa Rica."

WAS THE AIRSTRIP INTENDED FOR USE BY THE CONTRAST

The Government of Costa Rica has made clear its position that
it will not permit the use of its territory for military action
against neighboring states. The U.S. Government respects that

UNGlASSra

position.

342

THE NEW YORK TIM&S. a.v..aAV, SBPTSMflS/? « . »»«

coafUence,
Pmnielady.

Americans Reportedly Supervised
- Airstrip Project Near Nicaragua

■y JAMtS UMOYNC

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rnp wtth (ba adMea «» *• am hcmj '

^— ^ $ :2 /« O ■•ortwi to tta ana laid Ma Aai a
,y 2 -"Save '201

uaad by dn« nfflckan. It la tar Urtar
an iha aaa oermallv naadad by '
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Mdaaairaaim
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kaao pao^ out. ona of lAa eantrva
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Coau Uca. hai rafuaad 10 coaraar- -
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alrlWd-t magmfot and «• vaa aa *_5L«-«22S, ■*^S1'£I P*? '
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AHW0Q213'r

TTTT

343

»H«^S. rr)\

'^ 30986

MCAMAOUA:

lta»«l RMuppty iKrcatlQe

Inl9l» litturg^nt orgcn/ict/en

gfiS{g7^^yTj.ii/.'~Uhutiif^/oft<«<"« wltH a«f craft tni

AKVlG02i3S

wtiissm

344

LAddiriLU

PROJECT DEMOCRACY AIR FACILITY

Santa Elena, Costa Rica

June 10, 1986

30990

DAMAGED PROJECT DEMOCRACY -RC-vi^

After Landing at Santa Elena Facility

September 12, 1986

UNGlASSm

AKW002I39

0/b

345

uzmsi- Nsefis'i

EufiPtty

346

III
III

SUBJECT t Ou«atlona and Anawars for tha Racord from Sacratary
of Oafanaa Taatimony Bafora tha Houaa Pamanant
Salact Conmlttaa on Intalllganca, 18 Dacambar 1986 (U)

1. Tha CoBunlttaa raquaata a copy of tha Army Inapactor Ganaral/
Ganaral Counaal raport on thalr invaatigation of tha prtcing of
TOW mlaailaa tranafarrad to tha CIA.

Aj (U) Upon complation of tha raport, a copy will ba provided

to tha Committaa.

2. Tha Committaa raquaata a copy of tha Sacratary of Dafenae
mamorandum and marginal notaa on tha Draft NSOO of Juna 1985

A< (U) Thaaa ara provided at TAB A.

3. Waa tha baaic TOW aold to any othar country in tha laat
two or thr aa yaara?

Ai (C) Yaa. From FY 1983 to FY 1986, baaic TOW waa aold to

tha following countriaa (quantitiaa in paranthaaaa) r(

^^^^H Kenya ^^^| Korea ^^^| Morocco i^^^H< Somalia

and Thailand

4. Did Ganaral Sacord have any kind of Conaultant contract,
or othar ralationahip or poat, with tha Department of Defenaa
after hia retirement?

At (U) Yes. Following hia retirement on 1 May 1983, MG

Sacord waa approved aa a conaultant appointee for the

Office of the Aasiatant Secretary of Defenaa (International

Security Affaire), specifically for tha Near Eaatern and

South Asian Affaire Region. Effective 11 July 1983, MG

Secord waa authorized 130 daya at a rate of $242.00 per

day, but he did not aerve any daya in a pay atatua. On 11

July 1984, MG Secord waa again approved aa a conaultant

appointee and authorized 90 days at a rate of $242.00 per

day, but he did not aerve any daya in a pay atatus. MG

UNe

347

D 84

S«cord'«~^^ppolntin«nt was tarmlnatad on 10 July 198S. On S

August 1985 MG Sscord was appointsd as a consultant without

coB^«nsation for up to tan days. This appolntoMnt was

tarminatad on 4 August 1986, and tha Dapartmant has no

racord of his having b«an on a duty status on this appointmant,

with tha following azception. On 5 August 1985, MO Sacord

was appointad as a consultant, without conpansation, to

tha Spacial Oparations Policy Advisory Group (SOPAG). His

tarn on tha SOPAG azpirad aff active 4 August 1986. During

this one-yaar term, MG Sacord participated in ona maating

of tha SOPAG, on 15 November 1985. Ha has not participated -

since, and this is the last consulting activity in which

he participated, according to Department records. Pertinent

documentation is enclosed at TAB B.

5. Was General Sacord dropped from one of our committees for
failing to execute a financial statement?

At (U) MG Secord served on the Special Operations Policy

Advisory Group (SOPAG) from January 1984 to August 1986,

although he last participated in November 1985. MG Secord 's

membership on the SOPAG was terminated, effective 4 August

1986, based upon his failure to provide the Department

with financial information (as required in form SP 1555).

Amplifying information is enclosed at TAB C.

6. Have any TMS or other arms sales by the Department been
made to any 'agents or middlemen' as opposed directly to a
recipient country?

At (U) No FMS or other arms sales to foreign countries

have been made by the Department through a private agent

yNGlASli

348

wmm

D 85

or middlanan. Th«r« la no legal authority to aall under

tha Arma Export Control Act to othar than an aliglbla

foreign country, except for aalea to U.S. contractora

under Section 30 of the Act for Incorporation into end

itema and aubaequent export. The Department haa aold

itema to other agenciea of the federal government in

accordance with the Economy Act.

7. Did any DoD intelligence peraonnel Vnow anything about
furniahing any intelligence to Iran co vering auch mattera
aa battle plana, reaulta of ABBHHUgathering of the
Iran-Iraq front line, etc.? xrff^Tommlttee made reference
to a measage to Congreaaman Kaatenmeier from the Deputy
Director of Central Intelligence, Mr. McMahon. )

349

8. Did Colonel Jim Steel* in El Salvador have any relationship
with anyone who was selling arms to the Contras during the time
when such sales were prohibited?

350

WUSMO

UNCLASSIFIED

351

Vi'UVUU •

D 88

MEMORANDUM FOR THE ASSISTANT TO TH2 PRESZOEOT FOR NATIONAL
SECURITY AFFAIRS

SUBJECT J US Policy Toward Iran (S)

(TS) This memorandum rasponda to your raquaat for coiunants on
tha draft. NSDO on US-Iranian relations . Whila I agraa with many of
tha major points in tha papar, savaral of tha proposed actions seem
questionable. Moreover, it is extremely difficult to consider an
explicit revision of our policy toward Iran as long as we continue
to receive evidence of Iranian eon^licity in terrorist actions and
planning against us. I do not believe, therefore, an NSDO should
b« issued in the proposed form.

(TS) I fully support the policy objective that 'our prinary
short-tena challenge must be to block Moscow's efforts to increase
Soviet influence." If we are successful, of course, this will put
ua in a batter position to realize a longer-tara goal of having at
laast neutral/non-hostile relations with Iran. Under no circum-
stances, however, should we now ease our restriction on arms sales to
Iran. Attan^ting to cut off arms whila remaining neutral on sales
to either belligerent is one of the few ways wa have to protect our
loagar-range interests in both Iran and Iraq. A policy ravaraal
would be seen as inexplicably inconsistent by those nations whoa we
hava urged to refrain froa such sales, and %«ould likely lead to
increased ams sales by thaa and a poasibla altaration of tha
strategic balance in favor of Iran whila Khoaaini is still tha
eont.rolling Influence. It would adversely affect our nawly aowrglng
ralationshlp with Iraq.

(TS) There are other actions, however, soow of which are in^lied
la th^^<'*'t NSDO, that we could take now under our current policy .
to trf'to prevent an Increase in Soviet influence and to lead toward
a aore ooderata post-Khomalal Iran* Pamaiiy Oeciassined/Reieasea no 1 1 f€fS e a

under provisions of e.O )23')5
Intelligenca ""^ '^ Johnson. National Secui.iy Council

— Improve US intelligence gathering capabllltlaa in the areas
of weakness identified in tha SMI E, aspacl.al ly with regard
eollectino information on th<

^^^_^^_^___ Cs^hasls should D« on identity ing key
lyers in the political arena who may be more favorably
■disposed to US concerns in the region.

UNCLASSIFIED

352

ornct or tmcscch

TMC MIUITAdY ASS-fTAurr

nf, \

SEC DEF C

HAS SEEN

JUN 18 198S

'''•—'

^<^

'ffi/

f=^.r<^

y*u

■^^\

At/C^ ^^^^^ AGTO^r^rx..^^

under p,ov,s,n„s Of E liSfi^ -^

353

EYISOtllY UMILittl

. ofrci Of TMi »icRnAiiY or difinm

NOTE PO U6D(P)

YOurs far action. Sm ay r*oomn»K]«tion
and S«cDef's oamncnt on tht attadwd.
8«cOtf 's ODiKnants rtad as follows:

*Diis is aljiost too absurd to cotncnt
on. By all aeans pass it to Rich, but

th* assunption h«r« is: 1) that Iran is
about to fall, and 2) w« cw dbal with
that on a rational basis. MOeiiJc*
asking Qadhafi to NashiMgton for a

coxy chat.'

i^,

<^^

"^lassitied/Releasert on lifCsG^ Col in L. • 9^*1 1

E' ..-r,v,s,Gns 01 £ 1235B Kijoc General , OSA

Senior Military Assistant
to the Secretary of Defense

Nalional Secunty Council

cc: DesSecDef

82-690 0-88-13

354

mmmm

TMC WMITC HOUSC

WAftMINOTOM

Jun* 17. ItIS

SECRET/WITH

TO? SECRET ATTACHMPCT

I .

KEMOW-NDcM FOR THE HONORABLE GEORGE ?. SHULT8
Th« Secretary of Statt

THE HONORABLE CASPAR W, WEINBERGER
Th« Secretary of Defense

SU2JECT: U.S. Policy Toward Iran (S)

li*.?:!*^-"^ *' Central Intelligenct has j«$t distributed an s»-r
or. .ran: Prospects for Near-Tera Instability", which ihi^-
rave received. This SNIE r.akes clear that instib^litC in t?!.^^
!f!!i;;*'^"^ "^-^- potentially momentous cons.ou..;cis' fj" 5 S
strateeic inter sts. It seeas sensible to ash whether ou^

S;''IJr-^^'^" ^^■•'•' ''*" ^* adequate to .chiev;*;5riS;«e.'s
Ky staff has prepared a dr.ft NSOO (Tab A) which can si^I Jo
•tiaulate our thinking on O.S. policy toward Iran, i I^Ta
appreciate your reviewing the dieft on an eye. only be^J «d
provxdmq ae with your cooMats end sueeestior.. t I- i ^

about the possibiiSy of ieajca5.*So;?r::'j:jjde Jortrss^;:^

this c-h«.-.ge in policy with the Fzesidut. If you feel ?hJ? !i
S1C(..?) in preper.tion for an IISPG Meting «ith SI pJSIIdint

mm Dcciassihed/Rsi-ased on ' I Kr'S& fc
under orovisicns of E 12356
by K. Johnson, National Secunly Council

UNCLASSIFIED

SEC.-ET.-.^:-ai

Tc: ir:.- ;T attac-j.me?:'!

-ir:is3-:v C-: C;^^'

355

ill
ill

TOP SSCBTT

ONKASSIFIED

DRAFT

D 92

_ «C/1C» 403010

TMC WMITC HOUSC

WATIOMAl SECUaiTjf PIC7S10II
PI«ECT1V£

O.S. Policy Tow«rd Iran

Dyr.«r.ic political •volution' is taking place inside Iran.
Instability caused by the pressures of the Iraq- i ran var,
economic deterioration and re9ine infi^htin; create the' potential
for r.ajor changes in Iran. The Soviet Union is better positioned
than the U.S. to exploit and benefit from any power strugele that
results in changes in the Iranian rceiae, as veil as increasing
socio-political pressures. In this environnent, the eaergence of
• regune mere compatible with American and Western interests is
unlikely. Soviet success in taking advantaoe of the ener^in^

power s^rvJS5le to insinuate it»*^^_in_^ra£_ '-* -'

:e<

^ While we pursue a r.u.riber of broad,

inc-terx coals, our prieary «hort-ter:a challence must be to
block Kcsccv's effcrts to increase Soviet i.rfl-jcnce (.-.ov «nd
after the death of Khoaeini) . This will require ar. active and
sustained prccras to build both our leverags a.nd our
understanding of the internal situation so as to er^able us to
•xert a creater and mczm constructive influence over Iranian
polities. We oust iaprov* ear ability to protect our interests
during the struggle for suceessioo.

C.S. Interests and Co«l«

The nost iantediate O.S. interests include:

(1) Preventing the disintegration of Iran and preserving it as
an i:adependent strategic buffer which separates th« Soviet
Onion froa the Persian Gulf;

(3) Lir.iting the scope and opportunity for Soviet actions in

Ira.°i, while positioning ourselves to cope with the changing
Iranian intemel situation;

(3) Maintaining access to Persian Gulf oil and. ensuring
unimpeded transit of the Strait of Bomuz; and

(4) An end to the Iranian governsMnt's spcr.sorship of terrorise,
*nd its atteapts to destabilize the ecvernne.'^ts of other
raeicr.al states.

•c? Si:?.r:

UNCLASSIEIED

356

UNOtASSWED ,,^^^

TOP SECurr

. D 93

W« also tttk ethcz bro«d and iaportant, if Itss iisn«di«ttly
urgent, goals.

U) Iran's rtsuaption of a aodaratt and constructiva rola as a
■ambar rtspactivaly of tha non-comunist political
coMsunity, of its ragioa, and of tha world potrolaua
•conony;

(2) eontinuad Iranian rtsi-stancc to tha axpansion of Soviet
powar in 9an«r«l, and to tha Soviat occupation of
Afghanistan in particular;

(3) an aarly and to tha Iran-Iraq war which is not mediated by
tha Soviat Union and which does not fundar.antally altar tha
balanca of power in the region;

(4) elioination of Iran's flagrant abusas of human rights;

(5) n»over>ent toward eventual normalization of U.S. -Iranian
diplonatic consular and cultural ralations, and bilateral
tract/coiainercial activities;

(6) resolution of Anerican legal and financial clains through
the Hague l.'ibunal; and

(7) Iranian aoderation on 0?EC pricing policy.

Kany of our isterasts will be difficult to achieve. But given
the rapidity with which events are aoving, and the magnitude of
the stakes, it is clear that urgent new efforts are required. Ii
■oving forward, we aust be especially careful to balance our
evolving relationship with Iraq ia a aanner that does not danage
the longer tera prospects for Iran.

>resent Iranian yplitical Cnvironient

-^^— .-^.-^ii^— — ^-^^^^^^^^— ^^■^^— — ^■^^— ^ •

The Iranian leadership faces its aost difficult challenges since
19tl. The ragiae's popularity has declined significantly in the
past six aonths, priaarily because of intensified disillusionsen*
with a saaaingly unending war, the continued iapositioa of
Islaaic social policies on a population increasingly reluctant ti
accept such harsh aeasures, and a faltering econoay brought on
priaarily by declining oil revenues. The iapaet of these
probleas is intensified by the realisation that Ayatollah
Xhdheini's mental and physical health is fragile, which in turn
casts a pall of uncertainty over the daily decision-making
process.

?0? S£C?J

c BNCUJSIflEO

357

UNCLASSIFIED

DRAFT

T<» »"=«" • ' ■ D 94

Unless th« acctlcrstion of tdvtrs* ailitary, political «nd
•conosic d«v«lopn«nts is r«v«rs«d, th« XhOMini rs^in* will 2se«
serious instability (i.*. r*p«attd anti-r«9i»« danonstrations,
•trikas, assassination attaapts, sabotage and othar dastafcilixina
activities throughout, increasingly involving the low«r classes).
This condition vill sap officials' energies and governiMnt
resources, intensifying differences aaong Iranian leaders as the
government tries to avoid mistaXes that would provoke popular
upheaval and threaten continued control.

While it is impossible to predict the course of the emerging
power struggle, it is possible to discern several trends which
^.must be accounted for by U.S. policy. As domestic pressures
C aount, decision-making is likely to be monopolized by individuals
\ representing the same unstable mix of radical, conservative ar.d
J ultra-conservative factions that now control the Iranian
] government. The longer Khomeini lingers ia power, the more
/ likely the power struggle will intensify, and the greater the
/ r.u.TJer of potential leaders who might affect the outcome of the
^struggle.

The ultieate strength of various clerical groups and the power
coalitions they may form are not known. Ecwever, the weaknesses
of various oppcsition groups — inside Iran and abroad — are
evident, especially the lack of a leader with sufficient stature
(* to rival Khomeini and his ideas. The most likely faction in a
y power struggle to shift Iranian policy in directions more
\ acceptable to Um Vest — should their influence increase — are
/ conservatives working txcm within the govemaent against the
' radicals. Radicals within the regime, and the leftist
I opposition, are the groeps aost likely to influence the course of
^vents in ways inimical to Western interests.

The Iranian re^lar arved forces represent a potential source of
both power and iaelinetioa to move Iran back into a more
pro-Vestern position. Bepresentatives of every faction inside
and OQtside the regiae recognise the potential importance of the
military and are cultivating contacts with these forces.
However, as long as the Arvy remains coaaaitted in the war with
Iraq it will not be in a position to intervene in Tehran.

The other instrusent of state power, the Revolutionary Cuard, is
becoedng increasingly fractured. It will probably come apart
following Khomeini's death, and adght even engage in a major
power struggle before then. In any scenario, the Guard will be
at the center of the power struggle.

TOP StcagT

UNCussra

358

UNCLASSiFtED

T0> StCHIT

DRAFT

Th« Soviets Art w«ll aw«rt of the tvelvina davAlA-y.^.^ ,
Thoy will continu. to .pply c«rrot*IJd-.Jiek i;:!!?^'^^* ^« ^••"•
in th« hop« of brinqin, Tohrlin MjJc^'i i.i^ ;ir*" !** ^'^
bil4tor«l rtl.tion.hip'th^t coulS wJJr.I I blJlI ?/" ^fP"^**
growth in Sovitt infloonco ia Xx*n?^,!L vij? !if!','*'^«'

Oospito strong clorical antip«thy to Koftcev ana r ru L... , I

ivi.:'i%'' ^" -"^^ i.v.r.,.":j.ri:ji:r.r\i: :i:erconr,;.t

political opportunitio. prosontod th^sSvIJ? iiilI%Ji|Si would
prob*bly not act iJi a aaaacr that sovorolv di«ri»*i i».^fY ^?^*

fereo. o^ip^t. Noseo* po.s«..«s einoidorlblo rooS fSrSS.«v.r

9ev«riiMat ia Tohxan as loo« as thoy fair savora roprisal. JnJ
ia tho araa. of Iraa adjacHt to\2 Sovi.J^JL" STU^i.S

Tha 0.8. positioa ia Tahra a is onlikalv ta < «p^ «,« with«»» ,

petr-RMUlai pari^ Cill ba savara. Aay s^ccassor raiiil lili
probably sal.a po-r is tho na»a of X.lai and tlTfainSon iid

TC? sccy.2T

IINCUSSIFIED

UNdUSSlHll) DRAFl

T0> tECMT

can btt

can o« axpactad to hav« a built-in anti-Aaarican bias, a «»> ^

rnnit— i*i-Tt r-rilma,er to cut the appropriate travel orders
for both North and Hughes. ic-i

Approve Disapprove

Attachment

Tab I - NSC Staff Travel Authorization She

SECRET
Declassify: OADR

UWWSfflffD

375

1. TRAVELES'S NAME: LTCOL Oliver North anS^ ■ Philip Hughes

2. PURPOSE(S), EVENT(S), DATE(SI; '^° accompany VADM Poindexter on

brief, low-profile trip to Central American region to confer with
too ranking U.S. officials and to reinforce the continuity of U.S.
policy in the region. (see cover memo for itinerary)

3. ITINERARY (Please Attach Copy of Proposed Itinerary) ; see cover mer.

DEPARTURE DATE Wed, Dec 11 RETURN DATE Thurs, Dec 12
TIME 6 = 30 p.m. TIME ^2t00 midnight

4. MODE OF TRANSPORTATION: ...
GOV AI R XX COMMERCIAL AIR POV RAIL OTHE R

5. ESTIMATED EXPENSES: - ."....■ .
TRANSPORTATION PER DIEM xx OTHER TOTAL TRIP COST • ' "

6. WHO PAYS EXPENSES: NSC XX . OTHER

7. IF NOT NSC, DESCRIBE SOURCE AND ARRANGEMENTS; N/A -

8. WILL FAMILY MEMBER ACCOMPANY YOU: YES NO xx

9. IF SO, WHO PAYS FOR FAMILY MEMBER (If Travel Not Paid by Traveler,
Describe Source and Arrajigements ) : N/A

10. TRAVEL ADVANCE REQUESTED:

11. RE-MARKS (Use This' Space to Indicate Any Additional Items You Would
Like to Appear on Your Travel Orders) :

12. TRAVELER'S SIGNATURE: J/JAAM^ HoJ^ -fyT

13. APPROVALS: _

DHCDBSIFIEr

376

UMOUfflED

NATIONAL SECURrTY COUNCIL
wasmvmton c zosoe

December 2, 1985
SECRET

ACTION

MEMORANDUM FOR JOHN M. POINDEXTER
FROM: OLIVER L. NORTH >/

SUBJECT: Trip to Panama and Honduras

SYSTEM I
91229

Based on your
ttwj

idance, arrangements hav

MHlip

stance of yc

cor vQu to

T^^^

)ec 5) . The itinerary and substance of your meet'

have Deen discussed with State (DASS Bill Walker) and SOUTHCOM
(General Galvin) .

Attached at Tab I is a NSC Staff Travel Authorization Sheet for a
proposed trip to Panama and Honduras on December 4-5, 1985.

Participants :

ADM John M. Poindexter

Mr. Richard Armitage

Mr - W^i^l lam WalWc r

Mr.

LTCOL Oliver North
Mr. Raymond Burghardt

General Itinerary (details at Tabs III and IV) ;

Depart 2:30 p.m.. Wed, Dec 4 Andrews AFB

Arrive 7:35 p.m. Howard AFB, Panama

(Remain Overnight)

Depart 9:00 a.m., Thurs, Dec 5 Howard AFB, Panama

Arrive 9:50 a.m. Palmerola AB, Honduras

Depart 2:00 p.m., Thurs, Dec 5 Palmerola AB, Honduras

Arrive 7:10 p.m. Andrews AFB

NSC will defray expenses for North and Burghardt' s travel.

Attached at Tab II is a memo from you to Don Regan requesting
a Special Air Mission (SAM) support for this trip.

Tabs III and IV provide an overview of the situation and the
objectives we hope to achieve in Panama and Honduras,
respectively. Detailed talJcing points for your use during the
trip will be provided separately.

State (Wallcer) , Defense (Armitage), CIA^^^^^ and Raf '^*''^''<^ *-
Burghardt concur.

Declassify: OADR

ims^ED

377

SECRET

RECOMMENDATIONS

uNoranED

1. That you authorize Rick Benner to cut the appropriate travel
orders for North and Burghardt.

Approve Disapprove

2. That you initial and forward the memo at Tab II to Don Regan
requesting SAM support for the trip.

Approve Disapprove

3. That you review Tabs III and IV prior to the trip.

Approve Disapprove

cc: Rick Benner (w/o Tabs II, III, and IV)

Attachments

Tab I - NSC Staff Travel Authorization Sheet

Tab II - Poindexter Memo to Regan

Tab III - Current Situation and our Objectives for Panama

Tab IV - Current Situation and our Objectives for Honduras

UNttASSIFED

378

nciifflQi:

1- TRAVELER'S NAMZ:_

2. PURPOSECS), EVENTCS), DATE(SI: For official meetxnos ,n Panama
and Honduras DP^^m har .-" i^g s.

^^213:

3. ITINERARY (Please Attach Copy of Proposed Itinerary): see

SYSTEM II 912:

DEPARTURE DATE Wed, Dec 4 RETURN DATE Thurs, Dec 5
TIME 2:30 p.m. yi^E "^-^0 P-"- -

4. MODE OF TRANSPORTATION: . .'. "
GOV AIR XX COMMERCIAL AIR POV RAIL OTHE R

5. ESTIMATED EXPENSES: . - ^ _.-... .
TRANSPORTATION PER DIEM XX OTHER , TOTAL TRIP COST $252 .-0^ °'

6. WHO PA/S EXPENSES: NSC XX . OTHER

7. IF NOT NSC, DESCRIBE SOURCE AND ARRANGEMENTS: ^^^ "

8. WILL FAMILY MEMBER ACCOMPANY YOU: YES NO XX

'• llsl°A.7i:ill '^l ^i^JS^^ff. '" ^"-!; "" '■" '^ ^— ^" -

10. TRAVEL ADVANCE REQUESTED: $ q.qq

^^' ^^l in^!.?^*"!^*^* ^° Indicate Any Additional Items You Would
Like to Appear on Your Travel Orders) :

THAVZLER'S SIGNATURE: <^ 00^^ UoAt - JP(]Jt^

DiraSSlFIET

12.

13. APPROVALS:

379

SYSTEM i:
91229

CONFIDENTIAL

^;90^

MEMORANUUM FOR DONALD T. REGAN

FROM: JOHN M. POINDEXTER

SUBJECT: Special Air Miasion (SAM) Support

It is requested that a SAM C-20 aircraft be provided for a
proposed trip to Panama and Honduras on December 4-5, 1985. The
purpose of the trip is to review the current situation in Central
America with key government officials in these two countries.
The itinerary for the trip is indicated below:

Proposed Itinerary

Depart

2:30 p.m. ,

, Wed, Dec 4

Andrews AFB —

Arrive

7:35 p.m.

Howard AFB, Panama
(Remain Overnight)

Depart

9:00 a.m.,

, Thurs, Dec 5

Howard AFB, Panama

Arrive

9:50 a.m.

Palmerola AB, Honduras

Depart

2:00 p.m.,

, Thurs, Dec 5

Palroerola AB, Honduras

Arrive

7:10 p.m.

Andrews AFB

The Honorable Richard P. Riley
Assistant to the President and

Director of Special Support Services

CONFIDENTIAL
Declassify: OADR

mmm

Y/zr/?7

"i^mim

381

numiED

Based on discuisions with Walker at State and General Galvin, the
following detailed itineary has been proposed for Panama:

"Wednesday, December 4, 1985 ;

1935: Arrive Howard AFB, Panama; proceed to USAP Hdqtrs

1940 - 2010: 30 minute briefing w/General Galvin at USAF Hdqtrs

2010 - 2030: ^Procee^jl^l|SOUTHCOM auto to SOUTHCOM Hdqtrs^H

- 2100: ^H^^HHII^^^^^B attendees:
GaTvin^waTxer

2115 - 2200: Recap briefing at CG, USSOUTHCOM residence w/O.S.
team and General Galvin

2200 - morn: Poindexter RON at Qtrs 1 w/General Galv-iti;
remainder of U.S. team RON at Casa Carribe

Thursday, December 5, 1985

0700 - 0730: Breakfast (Qtrs 1 and Casa Carribe)

0730 - 0745: Proceed to USSOUTHCOM Op Ctr

0745 - 0845: USSOUTHCOM regional security briefing

0845 -0900: Proceed to Howard AFB, Panama

0905 - 0950: Enroute to Honduras via C-20

wmm

382

ISbBSr/f//

51907

CURRENT SITUATION/OBJECTIVES FOR HONDURAS

Thursday, December 5, 1985

0950

lOOO - 1215;

1215 - 1315!

1315 - 14001

1400 - 1910:

Arrive Palmcrola Air Base, Honduras (save one
hour enroute — 1 hour and 50 minute flight)

attendees:
Ferch

Discussions with
Poindexter, U.S. teaST

Working lunch at CTF Bravo (U.S. military exercise
hdqtrs)

Op tio ns;

B - (.ountry team orieiTing by AmEmb Tegucigalpa
Enroute from Palmerola Air Base to Andrews AFB

SECRET
Declassify; OADR

mmm

UNE»SglFIED

SYSTEM ::

91229

NATIONAL SECURfTY COUNCI-
WASMWGTON C SOSOc

December 10, 1985 /^.,'^^t6'6^.'«^J«w
SECRET

ACTION

MEMORANDUM FOR JOHN M. P0INDEXT4p.

FROM: OLIVER L. NORTI^

SUBJECT: Cable to Posts Advising of Your Trip to the
Central America Region

The cable attached at Tab I has been coordinated directly with
Elliott Abrams, Amb John Ferch, and General Galvin. Please note
once we arrive in Panama aboard C-20 we will be using General
Galvin 's C-9 in-theater. This will allow sufficient rest for
your aircrew and provide more space for traveling team
in-theater. Paul Thompson has coordinated aircraft support and
exchange of aircraft.

RECOMMENDATION

That you auth oyr^ ?6i d ispatch of the cable at Tab I
(Op Immed via|HB^hannel) .

Approve Disapprove

Attachment

Tab I - Poindexter Cable to Central American Posts

cc: Paul Thompson
Philip Hughes

Declassify: OADR

UNHftSStHED

384

WHITE HOUSE

TO: AM EMB PANAMA CITY, PANAMA
AM EMB SAN JOSE, COSTA RICA
AM EMB SAN SALVADOR, EL SALVADOR
AM EMB TEGUCIGALPA,, what is your occupation?
A I an an attorney.

2 Where do you uork?

A I am a partner at the law firm of Anderson, Hiebl--H-
e-b-1, Nauheim--N-a-u-h-e-i-ra, and Blair--B-l-a-i-r .

2 That located here m Washington, D.C.?

A Yes, sir.

2 How long have you been a partner in that firm?

A I have been a partner, I believe, for four years.

2 That would be since 19837

A Yes, sir, I think that is correct.

2 And were you employed by that firm before then?

A I was .

2 In the position of an associate?

A Yes, sir.

2 And for how long were you an associate there?

A I believe for two years.

2 Is there any particular area of legal practice in
which you specialize?

A I guess I specialize in adninistrative law. My
focus over the last several years has been in real estate
transactions .

2 You are a member oi the District of Columbia Bar?

A Yes, sir.

2 When were you Jtdtaitted?

UNCUSSIFlEi

408

NAME ■■
7U
75
76
77
li
79

HIR2 12002

ONClASSIfiEO „

A Well--I guess '82 or "83; I uas a member of the
California Bar prior thereto, and I believe a year or two
after I arrived, I became a member of the D.C. Bar.

S When were you admitted to the California Bar?
A 1975.

2 Are you a member of the Bar of any other
ur isdictions ?
A No, Sir.

e Where did you receive your undergraduate degree?
A New York University.
2 What year?
A 1970 or '71, I am not certain.

MR. FRYMAN: Off the record.

(Discussion off the record.]

MR. FRYMAN: Okay. Back on the record.

BY MR. FRYMAN:
2 You received your undergraduate degree in 197 1 fr
NYU?

A I believe it was.
2 And youz major was what?

A I think I had a combined major, political
science/philosophy major.

a And when did you graduate from law school?

A 1975.

2 And what was tha^ law school

UNCLASSIFiE

409

NAME:

HIR2 12002

100

101

102

103

ion

10S

106

York Uni

107

108

UNCLASSlfiEO

'AGE

California Western.

Where is that located?

San Diego.

Were you enrolled in law school for four years?

No.

Did you'uork for a year between?

No, I attended the Masters in Finance Program at New

vetsity for a year.

And did you receive a degree iron HYU?

No, I left--ray Master's Degree? I left to begin law
school prior to completing the master's program.

Q You received your law degree in 1975, and you began
work at your present firm in Washington in approximately
1981--

A That is correct.

2 --as I understand it.

Would you identify chronologically the jobs that you
held between law school and between the time you began with
your present firm?

A Well, through 1976, I was a staff assistant to Mr.
Reagan in his bid for the nomination, which was as we all
know unsuccessful. After returning to San Diego, I can't
tell you exactly how months after returning I became a
partner in the law firm of Hasserman--H-a-s-s-e-r-m-a-n,
Geile--G-e-i-l-e , and_*itiano.

UNCLASSIFIED

410

UNCLASSIFIED

NAME: HIR212002 V ■ 1 Vial ■%# W • ■ tMm** PAGE 6

1214 In 1979, I guess, or late '79, early '80, I can't

125 recall exactly when, I became involved in Mr. Reagan's '80

126 campaign, and stayed through--through the general election.

127 Thereafter served--! served on the transition team,

128 served briefly as Acting Deputy Assistant Secretary of

129 State, served briefly as Acting Deputy Assistant Secretary

130 for the Bureau of International Organizations and left

131 approximately-left State approximately May or June of '81 to

132 begin work with Anderson-Hiebl .

133 2 Prior to your work with Ronald Reagan in 1975 and
1314 1976. had you worked with him in any capacity?

135 A No, sir.

136 2 How did you obtain the job in 1975?

13? . A I was clerking for a law firm in San Diego and one

138 of the clients of that law firm was a gentleman who was--I

139 guess a friend of ex-Governor Reagan's, knew of his

mo intention to declare for the nomination, and I was asked by

111 the--one of the attorneys for whom I worked at the time to

1142 take a trip to Lafayette, Louisiana, and did so with Mr.

1143 Reagan--did so.

luu Spent a week, and at the end of che week was invited

1145 by Hr . Reagan and his immediate staff then to stay on board

IKb throughout the campaign.

1ii7 2 Uhat were your responsibilities during the period in

148 1975 and 1976? ^'^

UNCLASSIFIED

411

UNCUSSIFIED

NAME: HIR212002 UllUUIIWWil l^-V pACE 7

149 A I was doing advance operations — I guess is the best

150 way to describe it.

15 1 . 2 Can you elaborate on uhat that involved?

152 A That involved preceding the candidate to this

153 intended destination and making arrangements for hira and for
15>4 his party while he was there, for arranging whatever

155 speaking or meeting agenda items were to take place.

156 At that stage of his run for the nomination, there

157 were very few of us, so our responsibilities occasionally

158 spilled over into other areas.

159 Ue would collect information where it was feasible

160 or felt it might be interesting to one of the advisors to

161 Mr. Reagan, and served in some capacities as a quasi-

162 personal aide when he arrived--f rom the time he arrived until

163 the time he departed, and supervised to the extent that this

164 was the case, other advance people who were on ground

165 working that site and worked closely with the Secret Service

166 to ensure the security of the candidate.

167 2 To whom did you report in this job?

168 A I reported principally to Chuck Tyson.

169 . 2 And what was his position?

170 A You know, I can't remember titles. Ha may have been
17 1 Director of the Advance Operations--! guess it would

172 be--fairly accurate description of his role.

173 2 Did you have iH Hhis job daily contact with Ronald

ONClASSIFItO

412

UNCIASSIRE

NAME: HIR212002

174 Reagan?

175 A No. To the eKtent that I uas on the ground and he

176 uas there from the time he arrived until he left, yes, I had

177 daily contact uith him.

178 2 Did you first meet him in connection with this trip

179 to Louisiana that you described?

180 A Yes, sir.

181 e And hou many raonths--let me rephrase the question.

182 You say this job extended from 1975 to 1976. How many

183 months did this involve? Was this six months or eight
ISU months?

185 A I couldn't be precise in ray answer to that. It uas

186 probably around six to nine months, although I am not

187 certain.

188 2 Okay.

189 And during this period of time, is it correct to say

190 that normally, you would have personal contact with Ronald
19 1 Reagan at least every week?

192 . A I guess that is probably a fair estimation.

193 2 And there was some periods of time when you would

194 have daily contact with him?

195 A Yes, sir.

196 2 And some periods when you would not meet with him

197 personally for several days, I take it?

198 A That IS correct! I think for purposes of

wmi\m

413

UNCUSSiriED

NAME' HIR212002 ^ | 1 Vbl l^' ^^ ■ " ■ ■— — ' PkGZ 9

199 clarification, I was not an advisor to Mr. Reagan at the

200 tine, so ray contact was in the form of advance man's

201 contact. It uas not the kind of contact where we would sit

202 down and chat or where he would discuss issues with me.

203 2 Did he call you by your first name?

204 A I think after a while, he probably did. I guess I

205 he did.

206 2 Did you call him by his first nana?

207 A No.

208 fi What did you call him?

209 A I called him Governor.

2 10 . 2 You say there were a number of advance men doing

2 11 this type of job. ApproKimately how many were there during

212 this period?

213 A I think back in '76, I would guess there were full-
2 1U time somewhere between seven and 10 of us in the country.
215 There were just very few.

2 16 2 And you understood that you reported to Chuck Tyson.

217 A That is correct.

2 18 . 2 Now, what was the chain of command above Tyson, as

2 19 you understood it?

220 A Well, certainly Hr . Deaver was almost always with

22 1 NX. Reagan in those days, and final decisions to the extent

222 that I uas certainly aware of them or advised of them were

223 in Mike's hands, in tejnJs of the nature of operations that I

UNCLASSiFiEO

414

UNCUSSlfiEB

XAPIE^ HIR2120I

224 uas involved in.

225 Mr, Heese uas not at that point--in my recollection,

226 Mr. Meese uas not always present on these trips uith Mr.

227 Reagan, but he uas certainly there a significant amount of

228 the time.

229 Mr. Nofziger was the Press Secretary I believe then,

230 and other than those three people, I had no

231 contact--vir tually no contact uith John Sears, who was our

232 Campaign Manager then, and that was pretty much the circle

233 of people that I dealt with on a regular basis.

234 2 Were you on a first-name basis uith Mr. Deaver?

235 A Yes.

236 2 Hou frequently did you speak uith him and conf«r

237 with him, on the average?

238 A Well, any time I uas on the ground at a location at

239 the same time the Governor uas there, I saw Hike regularly.

240 2 So it uould be more than once a week?

241 A Probably.

242 2 And sometimes maybe periods of every day?

243 A Sure.

244 2 Were you on a first-name basis uith Hr . Meese?

245 A Yes.

246 & How frequently did you hav« contact uith him or meet

247 with him?

248 A Mot often. W%.- <iidn' t— I frankly think at that stage.

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249 wouldn't characterize our contact as meetings, I guess. I

250 didn't sit in on any of the policy meetings. It uas

251 certainly several times a month.

252 It's hard to go back and estimate. I may have seen

253 him more than that if he were traveling a lot around--

254 e Is It fair to say you would see him m a room from

255 time to time, and he would speak to you and you would speak

256 to him?

257 A Sure. You have to put this in perspective. My

258 principal responsibility was to create events essentially,

259 and make sure they ran smoothly, and when Meese was

260 traveling with then-Governor Reagan, he uas there, and while

261 the Governor was speaking, for example, during a dinner, the

262 staff would huddle at a table in the back of the room, if it

263 was a dinner or a speech and talk, and evenings ue would

264 occasionally get together.

265 S Were you on a first-name basis with Hr . Nofziger?

266 A Yes.

267 2 How frequently during this period did you see Mr.

268 Nofziger?

269 A I would guess about the same number of times I saw

270 nx . Meese, because Mr. Kofziger also traveled, I believe,
27 1 pretty much and stayed with Governor Reagan.

272 e The campaign came to an end, and you got a ]ob with

273 the firm in San Diego that you identified, the Hasserman

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27U firm.

275 A Yes. not immediately after I returned. It was

276 probably six to nine months after I returned. I am guessing

277 at a stretch of time here.

278 e Were you taking a sabbatical for a while?

279 A No . I uas--I uas doing a couple of things. I had a

280 friend uho I had graduated law school with who was then

281 representing some artist in Los Ang«les, and he involved me

282 in that briefly, and I looked at a couple of other things.

283 I uas looking around, and trying to make some

284 decisions.

285 2 And then you found this opening with the Wasseman

286 firm?

287 A Yes. I had graduated with Hr . Gaile. Mr. Uasserman

288 uas about 20 to 25 years older than ua were.

289 2 And joined that firm as a partner.

290 A Yes.

29 1 Q And you worked there for approximately four years?

292 A Three, three and a half years — I guess until I

293 started with--until I rejoined th« Reagan campaign in 1979.

294 2 During this period, did you continue to have contact

295 with Mr. Deavar?

296 A No. I received--wa exchanged letters on a couple of

297 occasions. I believe I saw Mr. Oeavar certainly a few times

298 during a stretch. Tho^c^ ware occasions when Governor Reagan

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would be in San Diego, for example, to speak to a group or
attend a dinner, and I uould get a call and assist in the
advance work.

2 During this period, did you--did you meet with
Governor Reagan at any time?

A Had no private meetings with Governor Reagan. I was
with him at at least one event I can clearly recall, but had
very little contact with him. riayba on one or two
occasions .

2 Did you continue on speaking terms uith him? He
uould speak to you and you would speak to him. He uould
call you Marty and you would call him Governor?

A I think after the passaga of about a year, I am sure
someone rafreshad his memory as to names before we saw each
other. Ue didn't have any in-depth or extensive
conversations .

I think the longest stretch of time I ever spent
individually speaking to Kx . Reagan, and was waiting in the
back of a limousine, because ue were early for an event, and
It uas delightful.

2 But Hx . Deaver would look to you for —

A Ha would look first, I think, to Hr . Tyson. Hx .
Tyson would than call ma and paxhaps ona ox two other
people, depending on the nature of tha event.

2 And again, Mr.^T*yson was your supaxiox in the

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>AGE 14

campaign. Chuck Tyson?

A Yes, sir.

2 And was he located in San Diego also?

A Yes, he was.

e Was he a lawyer in San Diego?

A No.

2 Did you specialize in any particular area of
practice when you were at the Wasserman iirn?

A We had a pretty general practice. There were only
the three oi us in that firm. I think for a period of about
a year, we had one associate and perhaps had sone clerks
working for us throughout.

2 During this period, we talked about your dealings
with Mr. Deaver. Did you have any contacts during this
period with Hr . Meese?

A I may have seen hin a couple of times. Again, in
the same circumstances when Governor Reagan was around, but
we didn't get together by ourselves.

2 Did you have any contacts with Mr. Kofziger?

A I guess the sane answer, sane kind of scenario.

2 You testified that you later becane involved in the
1980 campaign on behalf of Ronald Reagan?

A That is correct.

2 How did you get a job in the 1980 campaign?

A Well, I was caJ.ied by--I don't recall whether the

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349 telephone call came from Chuck Tyson or Ed Meesa, but I was

350 aakftd to come up to Los Angeles initially for a couple of

35 1 H*«ks to help them organize a national advance

352 opeiation--scheduling an advance operation.

353 2 Approximately when was this call?

35U A I couldn't tell you. I honestly don't recall what

355 month it came in. If we track back to the beginning of the

356 '80 campaign, it would be right about then.

357 C Would it have been in 1980?

358 A You know, I don't know. I don't know whether we

359 started it in 1980 or whether we got started in '79. I

360 honestly couldn't tell you.

36 1 . S And did you, in response to this call, go to Los

362 Angeles for two weeks to help organize?

363 A I did. I didn't stay there. I flew up every

364 morning and flew back every night for a couple of weeks.

365 2 Who were you reporting to in this capacity?

366 A I was working again with Hr . Tyson principally.

367 2 Did you have contact with Mr. Deaver?

368 A Yes.

369 2 Daily contact?

370 ^. A I don't know. All of us were in the office m Los

37 1 Mil lies — within the Deaver-Hannaf ord office. That is were we

372 were putting this together. Deaver — H-a-n-n-a-f-o-r-d . They

373 have a public relations ^irm in Los Angeles, and Governor

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Reagan's office was in there as well, so although I don't
havA any specific lecollection, I an sure I saw Mike quite
frequently then.

e What uas the frequency of your contact, if there uas
any. with Mr. Heese during this period?

A Well, I guess Mr. Keese and I saw each other very
regularly, because ue uould occasionally be taking the sane
flight up in the norning. He also was returning to San
Diego in the evenings, taking a 6=30 PSA shuttle up and an
8:30 shuttle back, and we would often to that together.

Q You would sit next to each other on the plane?

A Sonetinas .

2 Uas rir . Tyson also connutlng from San Diego?

A Occasionally he was flying back and forth. Ue would
sonetines take a roon--there were two hotels innediately
across the street fron the building — depending on the
workload .

If it got too late, we would overnight in Los
Angeles .

2 What was Hi. Reese's role in this two-week
organizing effort?

,^ A Hell, I wasn't — I don't know exactly what Hr . Meese
Mi» doing. I was not working with Mr. Reese during those
two weeks. He saw each other connutlng, I an sure,
occasionally talked to^ekch other in the office, but I

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399 couldn't tell you what Hr . Mttase was doing.

400 fi Did you have contact with «t . Noizigar in this
<40 1 p«xiod ?

402 A You know, I don't leraember a lot of contact with Mr.

403 Nofziger. As a matter of fact, I ai» not sure that Hr .

404 Nofziger was then working with the canpaign at the very

405 beginning. I think he rejoined us maybe a month later or

406 so, although--those dates may not be exactly accurate.

407 2 You indicated that Governor Reagan or then-Governor

408 Reagan had an office in this sane group of offices where you

409 were working.

410 A That is correct.

411 2 Did you have contact with him during this period?

412 A Probably not. I don't remember. I have have seen

413 him. He wasn't spending all day in the office. He would

4 14 occasionally come to the office and spend some time or have

4 15 meetings, but not with me.

416 2 Hho was in charge of the campaign efforts at this

417 point?

4 18 A Hell. Z think by that tiaa, as far as I was

4 19 concerned, anyway, Ed Reese was in charge of the campaign

420 t^^ozt. I believe John Sears was already out of the picture

42 1 tt* that point.

422 fi Did Hllliam Casey have any role in the campaign at

423 this point? -^

ICLASSIflED

422

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MAHE- HIR212002 k.^? « ^ \||«r»M V • ■ " *« ^ page ig

U2U A No. At that point, I didn't even know who Mr. Casey

U2 5 was.

U26 2 So, your initial involvement in the 1980 campaign

M27 came through the request that you come up and work in this

U28 tuo-ueek organizing effort, and you responded affirmatively

429 to the request?

U30 A That is correct.

43 1 . 2 Now, what happened after that that led to your

432 longer-tern involvement in the campaign?

433 A I got caught up in it once again. He scheduled--the

434 Convention was scheduled for Detroit. I was named head of

435 logistics for that, head of operations. I guess, for that

436 Convention.

437 Although, as it turned out, I shared that role with

438 a couple of people once we got to Detroit who had a lot more

439 experience than I did in doing that type of thing, and

440 subsequent to the convention was invited to come back to

441 Washington, D.C., where we were opening our office for the

442 general campaign, and did.

443 2 You say got caught up In it aitez this two-week

444 period. By that, do you mean that you were continuously

445 ttvolved in the campaign in one way or another after this

446 ikltlal two-week organizing period?

447 A Yes. sit.

448 2 When was the Cj>iA/ention In Detroit?

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PAGE 19

Either July of August.

NAME^

450 2 Of 1980?
US1 A 1980, yeah.

452 2 Is it correct that you worked for several months in

453 the campaign in advance of the Convention?

454 A I couldn't tell you exactly how long a period it

455 was. It was probably s«m weeks, two months, in that

456 vicinity. Maybe more.

457 2 Here you based in Detroit during this period?

458 A No, I was based in Los Angeles. I stayed in

459 Detroit--! probably arrived in Detroit 10 days to two weeks

460 prior to the Convention, by ray best recollection. And then

46 1 stayed through the OTVaHBOTHM** and than left imnediately

462 after the ^Hfe^antaMaM*.

463 2 Who was your superior during this period?

464 A Chuck Tyson.

465 2 Tyson again.

466 What was the frequency of your contact with then-

467 Governor Reagan?

468 A During which period?

469 2 From the initial organization meeting that you

470 described, the two-week organization period, up through the

47 1 «i^^^Ute«Ma«

472 A It was infrequent. There were one or two occasions

473 where I was asked to g« ^out on an emergency to a site that

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U7U
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uNMSsro

PAGE 20

he was planning to visit, so I would assume then--a quasi-
advance role and have some contact with him in that sense.
Didn't spend much time with him duting the 4w*m(^
MMMWi pexiod when he was in Detroit.

e What was the frequency during this period that we
have just described oi your contact with Hr . Deaver?

A I guess I saw Hike or spoke to him fairly regularly.
I don't know if that is every day, twice a day, every other
day, but--

On the average, several times a week?

I am sure several times a week.

Would the same have been true with respect to Hi.

C
A

Meese?

A No.

2 How often would you--

A Less frequently with Mr. neese. I had no specific
reason to have--been having discussions with Mr. Heese . He
were friends, so when he was there, I would chat, socially,
or principally we talked about some event I had done or he
had a comment on. We had no regular contact.

e Is it correct that during this period, you work
rasponsibilities did not involve Hr . Meese?

A That is correct.

2 Did your work responsibilities involve Mr. Deaver?

A Yes. . i

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HIR2 12002

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PAGE 21

In what way]

A Well. Mr. Deaver uas--I don't know how to describe
it. He uas an advisor to the President--to Hr . Reagan then,
and all scheduling and advance operations ultimately were
cleared through Mr. Deaver, so I had reason to have contact
with him--occasionally alone, more frequently with Hr . Tyson
and Mr. Deaver when we would review something.

They weren't typically extensive contacts or
meetings .

2 Did you understand that Hr . Tyson reported to Hr .
Deaver, m effect?

A Yes.

2 Was Mr. Hofziger involved in the campaign by this
point?

A Yes.

2 How frequent were your contacts with him, if any?

A I would probably describe that the same way I
described my relationship with my contact with Hr . Heese,
although Hr . Nofziger and I were friendlier and closer than
I think I was to Hr . Heese.

So, wa might occasionally in Detroit, for example,
go out and have a cup of coffee at the end of the day, or we
want down and got ice cream at a shop a couple of times. I
didn't do that with Hr . Heese.

2 Your job responsibilities did not involve any

UNCUSSIFIED

426

UNCLASSIFIED

NAME: HIR212002 UllULinUUII ll-M PAGE 22

52U reporting to or association with Hr . Nofziger; is that

525 correct?

526 A That is generally correct, although clearly in terns

527 of thetransition. i*eriod covered approximately three

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NAHE: HIR212002 vllUkriUUII I L> W PAGE 314

824 months, is that correct--tuo and a half itonths?

825 A Two and a half months.

826 fi And I think you have described three general areas

827 of responsibility during this period: One. the State

828 Department transition team; tuo . work in connection with the

829 Inauguration: and, three, continued work with respect to

830 scheduling or advance work.

831 Is that a fair description of your areas?

832 A Generally, that is probably pretty accurate.

833 2 Which of these areas did you devote most of your
831* time to during this period?

835 A Well, I think the most intense application of

836 efforts was in connection with the transition report. I had

837 never done anything like and it was brand new to me, and I

838 was concerned about doing that--a reasonable job.

839 e I take it from your comments that prior to the work
8t«0 on the transition team, you had not had any prior experience
8m in dealing with the Department of State?

842 A That is correct.

843 e Or the Agency for International Development?

844 A That is correct.

845 Q You described a report which you prepared concerning

846 overseas private investment?

847 A Yes, sir.

848 2 How did you hafpVn to prepare that report on that

UNCLASSIFIED

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IIR2 12002

UNMSSIfO

PAGE

NAME:

8U9 subject? Was that assigned to you by soiieona?

850 A Yes, it was. It was assigned by Mr. Fuller or Mr.

SSI Shakespeare at one of the meetings that we had.

852 2 Hou many people were involved in this transition

853 team?

SSM A Total number of people on the transition?

855 2 Hell, let's start with that, yes.

856 A I have no idea. I would guess — I have no idea.

857 Hundreds probably.

858 2 Was there a smaller group that you dealt with on a

859 periodic basis?

860 A Yes, sir.

861 . fi What was the size of that group?

862 A 12 people, perhaps.

863 C And did you have periodic meetings, or what was the

864 nature of your contact with the others in this group of 12?

865 A We had several meetings — I don't know, two, three

866 meetings perhaps at the Heritage Foundation. The meetings

867 were either chaired by Hr . Fuller or by Hr . Shakespeare if

868 he here there.

869 2 Was Hr . Fuller the person generally in charge of the

870 organization of the transition team as you understood it?
87 1 . A Of the State Department transition?

872 2 Yes.

873 A Yes. • ^

UNCUSSiFlEO

440

UKCUSSiHED

NAME: HIR212002 ^ . • w — -'-- -.^ - - pjGg 35

8714 MR. HEEHAN: So, it is clear when you say transition

875 tea™, in the hundreds he is referring to the overall

876 transition and the team he worked on was the State

877 Department transition.

878 MR. FRYMAN: Well, let's focus on the group of

879 approximately 12 that you have described who were involved

880 in the State Department transition.

881 BY MR. FRYMAN:

882 2 Now, was the larger group of hundreds involved in

883 the transition--does that pertain also to the State
8814 Department or is that to the entire Executive Branch?

885 A That--to the entire Executive Branch, not to the

886 State Department.

887 2 So that particular State Department group was

888 limited to this group that you met with from time to

889 time--insof ar as you know?

890 A So far as I know, yes. sir.

89 1 . 2 And that was organized by Mr. Fuller.

892 A Mr. Fuller and Mr. Shakespeare.

893 2 Mho were the other members who you recall that were

894 in this group?

895 A The only two members I can recall were Elliott

896 Abrams and I believe Henry Nau, H-a-u.

897 2 What was Mr. Nau's position other than being a

898 member of the transitXPi^ team?

UNaA55iritil

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NAHE: HIR2I2002

ONGUSSIflED

PAGE 37

899
900

A I believe Mr. Mau was a ptofassot at the college or
graduate level at a university here in Washington, D.C. at

90 1 the time. I am not certain of that, but I believe that uas

902 his position.

903 2 Other than your work on the report concerning

904 overseas private investment and your attendance at the

905 periodic meetings of the group, what else did you do in

906 connection with this work?

907 A With the transition--

908 2 Uith the transition.

909 A I attended several meetings at the Department of

910 State. One such meeting was a meeting, I believe, of all

911 the Assistant Secretaries at the Department of State. That

912 is my recollection. I had another--! have another

913 recollection of a smaller meeting that I attended, and I

914 will be perfectly frank with you:

915 . I can't tell you who was at the meeting with rae .
9 16 There was at least one person from the--ona Assistant

9 17 Secretary or two Assistant Secretaries from the State

9 18 Department and one or two members from our group of 12. I

919 don't recall whether that uas Hr . Fuller. Mr. Abrams, Mr.

920 Hau or someone else. I don't know who it was with at the
92 1 tiaa.

922 2 Did you work with other people in the preparation of

923 this report, or did you ^basically write the report by

442

flNCIiSSIflEti

NAME: HIR212002 1 1 1 1 ULrtU U I t 1 V» fl^ PAGE 38

9214 yourself?

925 A I worked with one other gentleman. His first name

926 uas Roy, and his last name I cannot recall, who was a

927 financial consultant to the campaign. I worked under Bay

928 Buchanan. And I asked for his assistance, because in

929 par t--obviously part of my reporting on the Overseas Private

930 Investment Corporation involved reviewing their financial

931 statements to make sure that I was accurately interpreting

932 that data.

933 2 Now. you mentioned that Hr . Abrams was a member of
93<4 the team. Had you met Mr. Abrams before your work with him

935 on the team?

936 A I don't think so. I will quality that by saying we

937 may have met once before. I may have been introduced to him

938 by Bill Tiraraonds . Somehow, I seem to have a recollection of

939 that, but I am not certain that is the case. I can't tell

940 you when that would have happened.

9m . It would have happened probably immediately prior to

942 the transition, and my first recollections of Elliott Abrams

9U3 are during that transition period.
9UU 2 What was Mr. Abrams' position during this period,

945 other than being a member of the transition team?

946 A I am not certain. I can't tell you what he was

947 doing.

9(t8 2 Was he living J.ii Washington?

j; f^ (-^ f_ fT»? ip. ^^

443

UNCLASSIFIED

NAME: HIR212002 -^ -w^-- . _ »- PAGE 39

9'<9 A Yes, sir--r think ha was living in Washington.

950 2 HoH frequent was your contact with Hr . Abrams during

951 this Hovember to January period?

952 A Not very frequent. It was infrequent. I sau hira

953 when ue had the meeting at the Heritage roundation--didn ' t

954 see hira m the regular course of my transition

955 responsibilities, because he wasn't involved Kith the

956 Overseas Private Investment Corporation.

957 I frankly can't tell you what Elliott's specific

958 responsibilities were during--on behalf of the transition

959 team other than knowing that he was involved in a State

960 Department transition.

96 1 . 2 What did you do after the Inauguration?

962 A Well, at some point after the Inauguration, I

963 accepted a position under Mr. Abrams who had then been named
96'* Assistant Secretary for International Organizations as an

965 Acting Deputy Assistant Secretary in that agency under

966 Elliott.

967 2 When you say at some point, approKimately when was

968 this?

969 A You know, I would guess sonetiae in February,

970 although I can't assure you that that is accurate.

97 1 .» 2 Do you know what led to the Administration offering

972 you this position?

973 A I had gotten W know Elliott Abrams during the

UNCUSSiFIED

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IIR2 12002

yNWSSlFIED

PAGE 40

course of the months preceding that, and at some point,
either late in the transition period or post-transition, I
had raet Elliott's uife--I don't even think their iirst child
was born yet at that point--hard to reiiiember--but I started
establishing a friendship with hiii outside of the political
arena--and with Elliott's wife, Rachel.

2 Is it your understanding that Hr . Abrams nade the
decision to offer you this position?

A I believe so. He's--I got the telephone call fron
Mr. Abrams, and he asked me if I would be interested, and I
said I would be, and I went over to chat with him about it.
He was already in. I don't know that he was confirmed at
that point, but he was already Acting Assistant Secretary.

2 How long did you continue in this spot?

A Only for a feu months perhaps, three months. I
don't remember the exact amount of time. I left to join the
law firm, and I believe I--I believe I started with the law
firm either at the end of Hay of 1981 or the beginning of
June of 1981 .

C When you started this job in February, had you
intended to stay for such a brief period?

A I don't think I had — I was kind of up in the air at
that point, frankly, about what I wanted to do. I had a
strong desire to go back to California at that stage of the
game. Frankly, worki»^^for the United States Government is

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HIR2 12002

UNCUSSIFIED

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not an appealing prospect to me.

2 Why was that?

A I just didn't feel comiortabla in a bureaucratic
situation, which is why I never went to work for a large law
firm, and the State Department was clearly quite
bureaucratized .

e Did you have daily contact with Mr. Abrans during
this February to approximately Hay period when you were
working--

A Unless he was traveling. I am sure I did.

2 And in addition to your professional association
with him, you indicated you had become personal friends--and
with his family.

A That is correct.

2 And you saw them socially as wall?

A Yes.

2 Here you married at this point?

A No, I was not.

2 Then, as I understood your answer, when you took
this job in February, you took it with the intention of
staying fox a short period of time?

A I am not sure I could say that in all honesty. I
can tell you very honestly that I didn't know whether I
wanted to stay in Washington oz go back to California, and I
had frequent discussion^ about that with friends of mine and

ihdmt

446

UNCUSSIHED

NAME: HIR212002 UI«UL.nUUll I &> ft/ PAGE ^2

102U uith my father, for eKaraple, and with friends in California.

1025 I was kind of town between going back to California

1026 and staying in Washington.

1027 2 Did you tell Mr. Abraras when you took the job you

1028 weren't sure how long you would be able to remain in that

1029 position?

1030 A I don't remember specific conversations, but I am

1031 sure I was quite upfront with llr . Abrams because we were

1032 friends.

1033 2 What led you to quit in approximately Hay of 1986?
103U A I was unhappy at the Department of State, and I was

1035 offered a job at the law firm that was vary attractive to

1036 me .

1037 2 What was attractive about it?

1038 A I liked the people. It was a new firm. It was

1039 headed by Mr. Stan Anderson. Mr. Anderson and I had gotten
10M0 to know each other and become friends during the campaign.
lom Mr. Anderson was a — I don't know what his title was. He was
1042 a consultant to Hr . Timmonds during the campaign, and we had
10>43 established a nice relationship.

lOUU He had worked for a larger law firm and had left

ions with three of his partners and they were starting a new

1046 vanture and had very exciting plans with the venture. And I

lOU? was very impressed with the people, and it looked like a

1048 terrific opportunity, j£i*ankly, and I was delighted with the

UNCLASSIFIED

447

NAME:
1049
10SO
10S1
1052
1053
10SU
1055
1056
1057
1058
1059
1060
1061
1062
1063
106H
1065
1066
1067
106{
106<
1070
1071
1072
1073

HIR2 12002

UNCLASSIFIED

PAGE 43

offer, and I accepted it.

2 And you joined the firm as an associate in May of
1981 ?

A That is correct.

2 And you became a partner two years later in 1983?

A Two years or less--raay have been less than two years.

2 Mr. Artiano, we have talked about a number of
individuals that you have known and you have worked with in
the campaign and in other capacities. I want to now turn to
a few additional individuals that we have not discussed.

First, David Fischer, F-i-s-c-h-e-r . I take it you
know David Fischer?

A Yes, sir.

2 When did you first meet David Fischer?

A Either in late 1975 or early 1976 would be ray best
guess .

2 That was during the period right after your
graduation from law school and while you were working as an
Executive Assistant to Ronald Reagan: is that correct?

A Yes, sir.

2 What was Hr . Fischer doing then?

A He was doing advance work.

2 For whom?

A For rtr . Reagan, as I was.

2 Had he at that.' ^oint been working for Ronald Reagan

UNCLASSiFIEG

448

HIR212002

UNCUSSIFIED

PAGE UU

NAME

1074 for a period of time?

1075 A No. sir. My best recollection is that Dave came on

1076 after I did.

1077 2 Did he report to you?

1078 A No.

1079 2 You uete at th« same level, would you say?

1080 A Ue were doing essentially the sane things. I think

1081 I probably had started a feu months before Mr. Fischeri and

1082 so, I would guess, did mora of that type of uork during 1976

1083 than Mr. Fischer did.

lOSM 2 What was the period of time that you worked with him

1085 doing this advance work--approximately six months or four

1086 months?

1087 A I am guessing. I will guess four months. Somewhere

1088 in that vicinity.

1089 2 And I take it you had frequent contact with him

1090 during this period?

109 1 A We had--ue had contact. I am not sure I would

1092 categorize it as frequent, because advance men were being

1093 sent to different places all the time, so we would
109M occasionally bump into each other.

1095 I really cemented a friendship with Hr . Fischer

1096 during the «w*«ft*^>M«wMi and I am trying to remember now

1097 where our "-' " ^-— ^-.- j^J^ ^975 — Atlanta perhaps, or

1098 wherever it was — Nashvilie. Mr. Fischer and I — all of the

UNOLASSIFIEO

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1 100
110 1
1 102
1 103
1 104
1 105
1 106
1 107
1 108
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1 1 IS
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1 1 18
1119
1 120
1 12
1 122
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HIR212002

ICUSSIHED

PAGE 45

advance men were teamed up. We had--there were two of us
working together--all the time, and Mr. Fischer and I were
working together during that »w*MMr^i4t«wMi / and obviously
spent day and night together at that point, and got to know
each other very well, and established a very close
friendship .

2 Ronald Reagan, as we know, was unsuccessful in that
e*^MM«4-iMMiMr, and aiter that •wA«M«^iJi««Mt , you returned to
San Diego and eventually began work with the law firm in San
Diego. What did Hr . Fischer do after the ««4«M«^i4»«wMr?

A Mr. Fischer stayed on as — I believe as an eitployee of
Deaver and Hannaford and served in the role oi personal aide
and Chief of Advance Operations for Governor Reagan, who was
then continuing to nake speeches around the country and had
a host of activities that Hr . Fischer assisted him with.

2 Now, you have testified that you became involved in
the 1980 campaign with this organizational meeting, which
was either in late 1979 or early 1980. Prior to your
involvement in the 1980 campaign, did you continue to have
contact with Mr. Fischer from 1976 to 1980?

A I did — you know, my best recollection is I probably
didn't see him for a period of about two and a half years.
We talked on the phone a few times, and the frequency with
which we spoke on the phone increased as 1980 approached,
and Mr. Reagan's bid if>i the Presidency was getting started

mmm

82-690 0-88-16

450

UNCLASSIFIED .... ■•

NAME: HIR212002

112U again.

1125 fi Did his role with respect to Hr . Reagan change as

1126 the 1980 campaign began, or did he continue to do basically

1127 the same sort of work he had been doing for the preceding

1128 several years with Hr . Reagan?

1129 A I think it changed in the sense that he became more

1130 purely a personal aide to Mr. Reagan, as opposed to going

1131 out to the field in advance of Mr. Reagan. We, at that

1132 point, had--we very quickly put together a host of advance

1133 men who were doing that.

1134 . Hr . Fischer would occasionally--any time he chose,

1135 frankly, would go out and investigate a site or an

1136 opportunity and use his own judgnent and so advise the

1 137 advance men.

1138 2 Uhen you say he became purely a personal aide, what

1139 do you mean by that?

1 mo A X mean, he stayed with Mr. Reagan, he traveled with

imi Mr. Reagan and was not detached from Hr . Reagan and his

11(42 immediate group for any extended periods of time.
11M3 The difference is where an advance man is given a

liui* site, might have a meeting with Hr . Deaver or Hr . Tyson or

1145 ma at that stage of the game and be given general parameters

1146 for a series of events in Florida, and that advance men

1147 armed with that information would then go to the field alone

1148 or in conjunction witb-'^one other folks, meet with some

UNCLASSIFIED

451

y^CUSSIFIED

Hknt- HIR212002 VIlUL-rlUUII IL.U I'AGE M?

11U9 Secret Service people and begin putting this series of

1150 events together and pick up a phone and call one of us in

115 1 the office for guidance, and ue would ultimately have a

1152 typed, printed schedule for that series of events, which

1153 that advance man was responsible for.

115U . Mr. Fischer, uho was doing both that for Ht . Reagan

1155 and serving I guess in a quasi-personal aide function prior

1156 to--betueen 1976 and 1979, by 1979 had evolved into what I

1157 would describe as purely a personal aide, and he stayed with

1158 Mr. Reagan all the time.

1159 When he was on the ground, when the plane would

1160 arrive with a party that traveled with Mr. Reagan. Mr.

116 1 Fischer would precede Mr. Reagan off the plane. He had

1162 almost always been in intimate contact with the advance man

1163 on the ground before that time.

1164 He knew pretty much exactly what was going to happen

1165 step by step, from a logistical perspective. If there were

1166 any changes to be made, if he disliked something, he would

1167 instruct the advance men to change or otherwise alter it or

1168 cancel it. or whatever needed to be dona.

1169 The word came through Dave; occasionally came

1170 through Mike Deaver, but for purely logistical things, it

117 1 caae from Dave frequently.

1172 2 Who frequently was your contact with Mr. Fischer

1173 during the 1980 campai_jrf?

452

ONCUSSIFIED

NAME: HIR212002 VllvL-rlvlVli IkM PAGE U8
117M A Well, I wasn't traveling and He. Fischet was. When

1175 I say I wasn't traveling, that is in geneEal--stateraent . I

1176 saw Mr. Fischer quite a bit in Detroit. I saw him obviously

1177 quite a bit in Los Angeles when--beiore we got to Detroit.

1178 By the time we got--we left Detroit, I saw him less

1179 and less because he was always on the road with tlr . Reagan

1180 and I was virtually always, with perhaps two or three

1181 exceptions, in problem areas at the office in Washington,

1182 and ue talked probably every day on the phone.

1183 Those conversations were a function of both our
118U responsibilities, my responsibility being one of the things

1185 he was interested in in terms of his performance and the

1186 fact that we were close friends and would chat during the

1187 day or at the end of each evening.

1188 Q So, to summarize, you consider that you had

1189 established a close friendship in 1976, you had intermittent

1190 contact with him during the next three years, and then you
119 1 begin to work together very closely during the campaign and

1192 had almost daily contact at least by telephone.

1193 A It seems to me that we had--probably had daily
119<4 contact. Otherwise, as you probably Know in a situation

1195 like that, you spend 12 hours a day on the telephone, so I

1196 couldn't tell you that was exactly true, but sometimes to me

1197 it was virtually on a daily basis.

1198 2 Hr. Fischer, following the campaign and Mr. Reagan's

JNCLASSIFIED

453

NAME ■■
1 199
1200
120 1
1202
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1204
120S
1206
1207
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1212
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12 14
1215
1216
1217
1218
1219
1220
1221
1222
1223

UNCLASSIFIED

HIR2t2002 Itllil.l LR.\.\fil 18 Si PAGE 49
election iiTigSO continued to serve as his personal aide; is
that correct?

A That IS correct.

2 What was his title after the Inauguration?

A I couldn't tell you precisely. I would guess it was
Special Assistant to the President--would be my best guess.

e And what did you understand his responsibilities
were in the White House? Was it basically the same sort of
thing or did his responsibilities change?

A You know, it is difficult for ma to say, because I
wasn't in the White House during this period of time. I
think that, clearly, he continued to stay with the President
through every day and indeed every weekend, he would travel
to Camp David, for exampl*, and if the Presidant took a trip
out of tha country, Dave obviously accompanied him on this
trips .

Dave had a very small office immediately off the
Oval Office in the White House, and I think to the extent--!
guess he generally did have the same type of role. He made
sure that things worked in a timely and orderly fashion,
there were no surprises, and when Mr. Reagan was moving,
literally moving, going somewhere or worrying about a
calendar or timetable, Dave is tha person ha looked to, not
advance man or men who happened to be on the assignment.

Dave was alway:S his target, so Dave would work with

ONCUSSIflEO

454

UNCLASSIFIED

NAME: HIR212002 V I ^ V&-I «Vr W ■ « - — — pAGE 50

122<4 uhomever. He made sure that calendar flowed in an orderly

1225 fashion.

1226 2 What was the frequency of your contact with Hr .

1227 Fischer after the Inauguration?

1228 A You know, we were very close friends. I would guess

1229 that during the first six months after the Inauguration,

1230 both Mr. Fischer and I were so busy and were then working xn

1231 different places, that we probably didn't see each other a

1232 whole lot during that time period.

1233 I would go over to the White House and visit, we
123U would have lunch somewhere, we .would get together for dinner

1235 if time permitted. His schedule was virtually impossible

1236 and didn't lend itself to a great social life. As time went

1237 on, however, and I settled in with the law firm and he

1238 settled in in his job, we talked on the phone regularly, you

1239 know, several times a week, tried to get together at least a
12140 couple of time a month to have lunch or have dinner or just
12(4 1 take a walk.

12(42 He would have two hours when the President would be

12(43 tied up in a meeting and he would call me and see if I can

12(4(4 break free and ue would get together and see a movie.

UNCIASSIFIED

455

NAME :
12U5
12U6
124'
124£
1249
1250
1251
1252
1253
1254
1255
1256
1257
1258
1259
1260
126 1
1262
1263
1261
1265
1266
1267
1268
1269

UNCLASSIFIED

HIR2 12002
RPTS CANTOR
DCMN GLASSNAP
M 1 ^ US a.m. 1

2 Did you consider hin one of your closest friends?

A Yes.

2 At what point did he resign froii his position in
the White House?

A I don't know the exact date. I think it is 1985,
early 1985. I am not sure, or late ' BH .

e And he moved to Utah?

A Yes, sir.

2 So the nature of the contact that you have been
describing of talking to him several times during the week
and seeing him as time permitted, that contact, that type of
contact, I gather continued from approximately mid 1981,
when matters settled down in your respective jobs, until he
left his position in the White House in early 1985?

A That is correct.

2 What was the nature of your contact with him during
the period that he lived in Utah? Did you have direct phone
contact with him?

A Yes.

2 I take it you didn't see him as frequently, because
he was in Utah and youi' liere here?

ONCLASSIFIEO

456

HIR2 12002

UNCLASSIFIED

PAGE 52

MAME

1270 A Mo, I didn't. He got back here a couple of times

1271 on business ioi the company he was working for in Utah, and

1272 obviously when he was back, we managed to get a lunch or a

1273 dinner or a novie , or something, and got a chance to talk.

1274 Ue talked on the phone fairly regularly, and I, in fact,

1275 have a client in Utah, and I think at least once during the

1276 year in Utah managed to get out and sea a client, so I saw

1277 Dave, spent a couple of nights at his house.

1278 8 Was it his practice to stay at your house when he

1279 was in Washington?

1280 A Not at that point.

1281 e Not while he was working in Utah?

1282 A No, while he was working in Utah, ha would fly back

1283 here on business for the company, and I believe he stayed at
12814 the Marriott typically.

1285 (Discussion off the record.)

1286 BY HR. FRYMAN:

1287 e Mr. Artiano, do you know Richard Miller?

1288 A Yes, X do.

1289 2 What do you understand to be the present position

1290 or occupation of Mr. Miller?

129 1 A President of International Business Communications,

1292 which is a public relations firm.

1293 2 When did you first meet Mr. Miller?

1294 A In 1980. -^

UNCLASSIFIED

457

UNCLASSIFIED

NAHE: HIR212002 I i I '9 LI E_IPt\J| |^ | g | La i<* PAGE 53

1295 2 In uhat uay?

1296 A He uas not sure if he was working for our campaign
129"^ here in Washington or uas a volunteer for the campaign, but

1298 he uas here, and ue met while he uas lending his services to

1299 the campaign for Mr. Reagan.

1300 2 Did he work for you?

1301 A No.

1302 2 Approximately at uhat point in the campaign did you

1303 meet him? I take it this was after the convention.

13014 A Ves It uas after the convention. I an not exactly

1305 sure uhen I first met Mr. Miller. My earliest raenories of

1306 having the types of conversations you uould relate to having

1307 uith friends probably occurred during the transition.

1308 2 What was his role during the transition?

1309 A I am not exactly sure. I know one of his roles uas

1310 he uas responsible for transportation for I guess everyone

1311 in the transition. Ue had a large motor pool, and I believe

1312 that Mr. Miller uas running the motor pool at that point. I

1313 think he may have had other responsibilities, but I can't
13 114 tell you uhat they were.

1315 S Prior to the transition, had your contacts uith him

1316 been infrequent? Would you characterize them as infrequent?

1317 A Yes. I can't frankly renenber exactly when I met

1318 him. It couldn't have been more than a month or tuo before
13 19 the transition at best^- '

ONCLASSIFIEO

458

ONCLASSIFIEB ..

NAME: HIR212002 UllVa-riUUtS iVmlJ P*°^ ^U

1320 2 And prior to the election you say you met hire, so

132 1 uould you describe him as an acquaintance as opposed to a

1322 personal friend?

1323 A A very difficult line to draw. Our friendship grew

1324 as ue got to know each other during the transition.

1325 2 How frequent was your contact with him during the

1326 transition?

1327 A Fairly frequent.

1328 2 Daily?

1329 A I don't know. I don't know if it was that

1330 frequent. I had cause to need transportation for myself or

1331 for someone else that I was arranging transportation for,

1332 and Mr. Miller was the guy I dealt with.

1333 2 Was this contact both in your professional work and

1334 socially during this period?

1335 A You know, I don't know whether Rich and I

1336 socialized a great deal during the transition period. It

1337 was a pretty hectic period.

1338 2 Throughout the transition period, you understood he

1339 was responsible for transportation.

1340 A Yes.

134 1 2 What did he do after the transition period?

1342 A I believe he first served in the Public Affairs or

1343 Public Relations Office of the Department of Transportation

1344 when Drew Lewis was tb* 'Secretary of Transportation.

DNWSSiFiEO

459

NAME:

13U5
13U6
1314-
1348
1349
1350
1351
1352
1353
135M
1355
1356
1357
1358
1359
1360
136 1
1362
1363
1361-
1365
1 366
136'
1368
1369

mmwa

How long did this last?

I couldn't tell you. I would guess at least a

year .

2 Did you have contact with him during that period?

A Yes. I think we had contact.

2 Social?

A I don't remember when we started having a lot of
social contact. It is quite possible during that period of
time that I had some social contact with him, but I don't
frankly recall.

2 During that period, do you recall having
professional contact with him?

A I seem to remember seeing him a couple of times at
the Department of Transportation, but I can't tell you in
connection with that or whether I just was there for another
reason and went in and said hi to Rich.

2 What do you recall that he did after the Department
of Transportation?

A To the best of my recollection, I believe he went
directly from the Department of Transportation to the Agency
for International Development and served as either a
Director or Deputy Director of Public Affairs.

2 What is your recollection about the length of time
he served in that position?

A I am guessing,! '* I would guess a year to two years.

mm\m

460

•iiKilLASSifiED

NAME: HIR212002 V •«**•-» '"^ "^ ' ■ PAGE 56

1370 2 Did you have contact with hira when he was in that

1371 position?

1372 A Yes.

1373 2 Both professional and social?

1374 A I don't know that I had any proiessional contact

1375 with hira either at the Department of Transportation or AID,

1376 but I ara sure at that point we had already started having

1377 social contact.

1378 2 At least by this point you considered him a

1379 personal friend of yours?

1380 A Yes.

138 1 2 And what is your understanding about what he did

1382 after he left AID?

1383 A I again believe that he entered into a partnership
138U with Hr. Frank Gomez, and they opened up International

1385 Business Communications, which is a public relations firm.

1386 2 Do you know Hr . Gomez?

1387 A I know Mr. Gomez, yes.

1388 2 When did you first meet him?

1389 A Rich introduced me to Hr . Gomez. I would guess it

1390 uas--I can't tell you--'8i4.

139 1 2 Has that after Hr . Hiller joined with Hr . Gomez to
392 start their company or before?

1393 A After.

139U 2 After? ■/'

mmwm

461

NAME

1395
1396
139'
1398
1 399
H400
mo 1
1402
m03

mou
mos
moe

1407

mo£
mo9
mio
mil

14 12
1413
14 14
1415
14 16
141'
14 18
1419

ONCLASSiFiEO ^.

HIR2 12002

A Yes, sir.

2 What has been the frequency of your contact with
Mr. Gomez since your first meeting with hira?

A Not too frequent. During the period from late
November. 1985 until perhaps March or April of '86, I saw
Mr. Gomez once or twice a ueeK perhaps at a maximum.

2 That is in connection with your work for IBC?

A That IS correct.

2 We will get into that later. Apart from that
association, what contact have you had with Mr. Gomez?

A None.

2 Would you characterize Mr. lliller as a close
friend ?

A Yes.

2 And am I correct that you have considered hira a
close friend since at least 1982 or 1983?

A He has been a good friend, yes, probably since
about that time.

2 Do you recall Oliver North?

A I was introduced once to Hr . North. He shook
hands, and that is ray sole contact with Mr. North.

2 You have never spoken with him on the phone?

A No, sir.

2 Do you know John Roberts?

A No, sir. •. '•

iieUSSiFIEB

462

mM,i\m

NAHE: HIR212002 1 3 I V 1 1 t_nLJ 1^ i I 1 4_ W PAGE 58

1U20 e Do you know Jonathan Miller?

mzi A No. I would like to just state ior the record that

1422 It IS possible I was introduced to these people at some

11423 point and shook hands, but I don't know there.

114214 2 You have no recollection of any meeting with

mas Jonathan Miller?

1426 A I don't. Honestly I have not.

1U27 . 2 I take it then you did not consider Jonathan Miller

1128 to be a friend of yours?

1429 A That is correct.

1430 2 Mr. Artiano, you entered into a business

1431 relationship with Mr. Miller's corepany. International

1432 Business Communications, did you not?

1433 A Yes, sir.

1434 2 And did that business relationship also involved

1435 Mr. Fischer?

1436 A Yes, sir.

1437 8 Would you describe the origin of that business

1438 relationship and how it cane about?

1439 A In late Movember or early Decembaz of 1985, I

1440 received a telephone call from Mr. Miller where Mr. Miller
144 1 told ne that in order to increase the services he was

1442 rendering to existing clients, to attract additional

1443 business to IBC, and to generally improve the services he

1444 was holding out to exi^t^ng and prospective clients, that he

mmtim

463

HIR2 12002

yilASSlFlEO

NAME

1445 uas looking for someone uho had sorae Washington experience

lUUb at a relatively senior level, uho uas of good reputation,

114147 had good common sense and judgment, and might entertain the

li4<48 prospect of entering into a relationship with his firm.
114149 2 What did you do in response to this call?
11450 A At sorae point shortly after I received that phone

lUSl call, I talked to Mr. Dave Fischer about his interest, if

1US2 any, in ray pursuing this conversation with Mr. Miller on his

mS3 behalf.

1454 2 What uas Mr. Fischer doing at this point?

1455 A Mr. Fischer had been for the preceding 10 months, I

1456 uould guess, been working as Vice President for

1457 Administrative Affairs I believe for Huntsman Chemical

1458 Corporation in Salt Lake City, Utah and had been expressing

1459 to me over the preceding three months his general

1460 dissatisfaction with that job and his desire to return to
146 1 Washington and do consulting work for clients in Washington.

1462 2 Had he explained to you the basis for his

1463 dissatisfaction?

1464 A I think it was, to the best of my recollection,

1465 merely a case of the job not involving the types of things

1466 he anticipated it would, and it just wasn't very rewarding

1467 or challenging to him, I guess. He was not particularly

1468 happy with it.

1469 2 Did he indicate dissatisfaction with the

UNOLASSiHED

464

NAME

1470

1471

1472

1473

1474

1475

1476

1477

1478

1479

1480

1481

1482

1483

1484

1485

1486

1487

1488

1489

1490

149

1492

1493

1494

:::::;:,.JilliSSlFiEB

A No .

e Do you know if at the time of your call from
Richard Miller whether he had at that point ever met Mr.
Fischer ?

A I don't think so. I don't know that for a fact.
They may have at some point or another been introduced, but
they didn't know each other.

Q So the origin is Mr. Miller calls you and says he
is looking for someone. You over the preceding few months
had been hearing from Mr. Fischer that he might be ready to
come back to Washington and try something different, and
then you spoke to Mr. Fischer and explained the approach to
Mr. Miller, is that correct?

A That is correct.

2 And did Mr. Fischer ask you to express an interest
on his behalf with Mr. Miller?

A Mr. Fischer's response, to the best of my
recollection, his initial response to that information, was
a request that I further investigate it by way of having
more extensive discussion with Mr. Miller about what he
wanted, what he was looking for. and who his clients were.

He made it clear to me during the initial
conversation that while he was interested in returning to
Washington and acting _as a consultant, he didn't want to

IWSSlflE

465

HAHE:

1U9S
1496
1497
1498
1499
1500
ISO'
1502
1503
1504
1505
1506
1507
1508
1509
1S10
151 ■
1512
1513
1514
ISIS
1S16
1517
1518
1519

ISUSSIFIEO

align himself exclusively with anyone, so that even li this
were something that would be of interest to hiii, it would be
a nonexclusive attangement . He wanted to do soma checking
himself into Mr. Miller and IBC generally with people in the
administration, I guess, to see what kind of response he
would get.

Q In your initial discussion with Mr. Fischer, was
there any consideration of your involvement in a
relationship between Mr. Fischer and Mr. Miller?

A That happened very quickly. I don't know whether
that topic was discussed during the first conversation I had
with Mr. Fischer, the second conversation, but over the
course of probably the first week, if not the first couple
of conversations we had, that was something that was raised
and discussed, yes.

S Was that raised by Mr. Fischer?

A I think so, although I honestly couldn't tell you.

2 Uhat did you understand that you were to add to the
relationship that was being contemplated possibly between
Mr. Miller and Mr. Fischer?

A I think you have to put that question in a
timeframe for me, if you would.

2 Let's talk about the beginning, when you were
having these initial discussions and it was raised either by
you or Mr. Fischer injr^UE conversation with him that you

Murnm

466

UNCUSSIFiED

NAHE: HIR212002 4| § ^ ^l^flU W* 1 3 18-lW PAGE 62

1520 would have some involvement in this.

1521 A One oi the very early conversations I had with Mr.

1522 niller, I don't know ii it was the first conversation or the

1523 second conversation, in response to I an sure a question by

1524 me in connection with what types oi services he was looking

1525 ior on the part of a consultant, I an sure at this point I

1526 had raised Hr . Fischer's name.

1527 He gave, to the best of my recollection, both a

1528 general and a specific response. Mr. Miller's general

1529 response was that he was looking at a nunber of projects for

1530 existing clients that hadn't yet taken shape, that he was

1531 about to embark on a najor business development aspect of

1532 his business, that he was looking for someone who could help

1533 him m his evaluation of projects I have just mentioned,

1534 help hira to formulate a strategy in connection with business

1535 development, help hire service his clients across the board

1536 in the form of advice and judgment from a public relations

1537 perspective, public relations in Washington.

1538 The more specific request was he indicated one of

1539 his most significant clients was a gentleman by the name of

1540 Mr. Channall who had several organizations that were raising

1541 money for programs that supported the President's position

1542 in different areas, and that in connection with one, I don't

1543 know frankly at that point if ha even named the National

1544 Endowment for the Preservation of Liberty, that that

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1S4S particular client had asked for meetings with Don Regan, who

1SM6 uas then Chief of Staff, with Senator Paul Laxalt, and with

15147 Assistant Secretary Elliott Abraras.

ISua He advised roe early on that this client was a

ISug client that had had regular contact with the administration

1550 for quite a while and was highly regarded by the

1551 administration. I recall that because it was the first

1552 specific request where he identified a service that was made

1553 in the course of these early conversations.

155(4 8 And specifically, the service was what again? Was

1555 this to arrange the meetings?

1556 A No. Let me backtrack a second. He explained

1557 generally what type of services ha was looking for from a

1558 consultant on behalf of IBC, and again I an trying to

1559 reconstruct, doing the best that I can. I suppose, in

1560 response to a question such as, well, is there anything you
156 1 have on the burner right now that needs attention, his

1562 response was, ''Yes. For example, this guy, Hr . Channell,

1563 is one of my principal clients, and he just recently called
15614 in over the past few days I guess and asked for me to line

1565 up meetings with the following three people'*, and that was

1566 the first specific thing that was ever discussed with Hr .

1567 Miller and I in connection with services.

1568 2 Going back. Mr. Artiano, the initial call from Mr.

1569 Miller where he explaijv^d to you he was looking for someone.

yNCUSSIFItO

468

.....UriMSSIFiEO

NAME: HIR2 12002 %/B «\P!ir.3 «»^** '■ « « *«= iw PAGE 64

1570 am I correct that you did not mention Mr. Fischer's name in

1571 that conversation?

1572 A I don't think I did. I think I opted at that point

1573 to chat with Mr. Fischer before I even raised his name.
157U 2 And then after chatting with Mr. Fischer, you had

1575 further conversations with Mr. Miller where Mr. Fischer's

1576 name was mentioned?

1577 A That IS correct.

1578 2 At what point was it discussed that you would be

1579 involved in this arrangement as well as Mr. Fischer?

1580 A Very early on.

1581 2 In the early phone conversations?

1582 A Yes. I am sure the early phone conversations.

1583 £ And who suggested that?

1584 A I don't know. I honestly don't remember.

1585 2 The services that were being sought by Mr. Miller,

1586 would you describe them as generally public relations

1587 consulting services?

1588 A Public relations, business development, political

1589 type consulting in terms of evaluating a project or a media

1590 campaign.

159 1 2 How soon was there a faca-to-face meeting between

1592 you, Mr. Fischer and Mr. Miller?

1593 A Again, I can't tell you a specific date. I would

1594 guess it was within tujO 'weeks of the first telephone call.

mmis

469

yiLASSihtu

NAME: HIR212002 V ■ « W K.1 SW W < •• * t^V PAGE 65

1595 2 After that meeting at some point, the three of you

1596 reach an understanding about a working relationship and

1597 compensation arrangement, is that correct?

1598 A That is correct.

1599 2 Did it take several meetings to reach agreement on

1600 those matters?

1601 A Yes.

1602 2 Approximately how many meetings and over what

1603 period of time?

16014 A I can't be specific because I just don't have the

1605 recollection. I uould guess that ua had three or four

1606 meetings at least. They probably went over a couple of

1607 weeks, three weeks. I am guessing.

1608 2 Prior to the first meeting > had thexa been any

1609 discussion among the three of you about the terms of a

1610 relationship, or were there phone conversations just looking

1611 toward setting up a meeting for a more specific discussion

1612 of terms?

16 13 A I had had conversations. I had discussed

16 1<4 compensation with Dave over the phone, and I had passed

1615 along what Dave and I had discussed to Mr. Hiller. I

1616 believe, prior to our first face-to-face with Hr . Hiller.

16 17 S What was the conpensation which was discussed with

1618 Dave?

16 19 A There are sev^^al aspects to those conversations.

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yHyiHddinty

NAME: HIR212002

1620 I don't think anything was said in concrete that early m

1621 the first week or tuo, but generally Hr . Fischer advised rae

1622 that. A, It needed to be made perfectly clear to Mr. Miller

1623 that there was going to be no exclusive agreement for

162U services, that he intended to develop a host of clients here

1625 that he would like to consult with: B, that ha felt he could

1626 lend a great deal of value to a host of clients, including

1627 IBC, and that he expected to be compensated accordingly.

1628 Uhen we talked about numbers, wa talked about a

1629 retainer of «20,000 a month for the consulting services to

1630 be rendered, and Mr. Fischer told me that one of the things

1631 he absolutely did not want to do was get involved in the

1632 representation of a client which was going to be 30-day. 60-

1633 day, 90-day projects. He didn't want to do that. He wanted
163U a long-term relationship, and he asked me to explore with

1635 Mr. Miller early on whether Mr. Miller would be prepared to

1636 enter into a long-term, 24 months say, two-year agreement

1637 for services.

1638 He further advised me that, Mr. Fischer advised me,

1639 that prior to accepting a consulting agreement either with
16U0 IBC or anyone else, he would have to be real comfortable
16U1 with them as a client, and from Hx . Fischer's perspective
16U2 that meant reviewing them to the extent that ha could with
16143 his friends in the administration and whoever else he opted
1644 to check them out with, Ho make sure that they were people

471

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yriOUSSIFlEP

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he wanted to be associated with.

e Were the terras that Hr . Fischer initially described
to you, that you have described, were these basically the
terms that were eventually agreed upon, that is a retainer
of »20.000 a month for a period of 24 months?

A Generally, yes. I would say that was essentially
the relationship that was established. The other factor, as
I mentioned also, which were components of that agreement,
which were that Mr. Fischer was not an exclusive consultant
to IBC and could go about developing his own business and
that he would not be a full-time consultant with IBC. It
was the beginning of a new relationship.

2 But am I correct that at the end of this period of
negotiation, Mr. Miller basically agreed to the terms that
Mr. Fischer had laid out for you at the beginning, that is
*20,000 a month as a retainer for 24 months, and that was to
be a nonexclusive arrangement?
A That is correct.

2 What was the subject that was covered in these
three or four meetings where you had negotiations? Had Hr .
Miller been resisting this arrangement?

^^r A No. I think we were discussing a host of things,
M I recollect them. For example, while Mr. Miller had no
problem with Mr. Fischer representing other clients, he was
not comfortable with tAe^ prospects of Mr. Fischer

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NAME:

1670 representing another public relations firm. That was of

1671 soA« concern to hire. He wanted to know if Mr. Fischer's

1672 other intended representations called for hiii to be out of

1673 the country for long periods of time, for eKanple, a

1674 question which obviously Mr. Fischer didn't have an answer

1675 to.

1676 Wanted to know if Mr. rischer--Fischer still lived

1677 in Utah at the time and did for another 1 U months

1678 thereaf ter--uhether Mr. Fischer would still b« available, and

1679 if so, how many days a week, to come in to Washington. D.C.

1680 to render these services. I can't recall all of the things

1681 that were discussed, but we also spent a great deal of time

1682 allowing Mr. Miller to describe what his company did and

1683 getting to know Mr. Gomez a little bit. getting to see some
168<4 of the presentations he had made to clients, finding out

1685 what he had done, what he intended to do, who he was

1686 interested in securing as a client, further defining the

1687 types of services he was looking for.

1688 S Did these negotiations lead to a written agreement

1689 between Mr. Fischer. Mr. Miller and yourself?

1690 A Ko, sir.

169 1 S In these negotiations, were you acting as a

1692 txlncipal on your own behalf rather than as attorney for Mr.

1693 Fischer?

169U A That is corracli. X was not at any tine acting as

loussife

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jrjLm^SJSk »^.l^ PAGE 69

an attorney for nr . Fischer or anyone else in this natter.

S And this agreed-upon retainer for 24 nonths in th
aaount of «20,000 a month contemplated services by you as
well as Hr. Fischer, is that correct?

A Initially, that is correct.
[Recess . ]

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la^ssiFO - "

RPTS CANTOR
DCMN GLASSNAP
[ 1 ^25 p.m. 1

Whereupon ,

MARTIH ARTIANO,
resumed the witness stand, and having been previously sworn,
was examined and testified further as follows:
BY MR. FRYHAN:

2 Mr. Artiano. when we broke for lunch, we were
discussing the consulting agreement that you, Mr. Fischer
and Mr. Richard Miller had reached in lata 1985, and on*
aspect of that agreement is that there was to be a monthly
retainer of «20,000 a month. At the time that agreement was
reached, was there an understanding between you and Mr.
Fischer that you would receive half of the monthly retainer
of «20,000?

A Yes.

e What was the origin of that agreement or rationale
for that agreement?

A It was contemplated that Dave and I would jointly
ba in a position to render the types of consulting services
to IBC that they had articulated to us.

2 Did Hr . Fischer at some point tell you that because
of your assistance in getting up this arrangement, he wanted

ONCLASSiFIES

475

yNCLASSIFItO

NAME: HIR212002 fj | H Vkl O^' ^^ " * - — — - pjQj 7,

1726 you to have half the money?

1727 A As I just indicated, we both intended to provide

1728 consulting services to IBC . I don't know what effect the

1729 fact that I had introduced Hr . Fischer to Hr . Miller in this

1730 connection, how great a part that played in Hr . Fischer's

1731 mind in terms of agreeing to split the fees.

1732 2 What did Hr . Fischer say to you about this? I

1733 mean, the original proposal, I take it. that he made in the
173U first conversation that you had with him about this is that

1735 he wanted a retainer of «20,000 a month for himself, is that

1736 correc ;?

1737 A Ue discussed the «20 , 000-a-month retainer. X don't

1738 know whether it was the second conversation or the third

1739 conversation when we discussed sharing our retainer.

17U0 2 Did he raise the subject of sharing the retainer,

174 1 or did you?

17142 A I don't recall.

1743 e Was it made known to Hr . Miller from the beginning

17Ut4 of your meetings with Hr . Miller that the monthly retainer

1745 would be split between the two of you?

1746 A I believe that was made clear to him fairly early
17U7 on.

17<48 2 By fairly early on. does that mean before you

1749 reached an agreement about the consulting arrangement?

1750 A I guess that^ii probably right.

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KAME: HIR212002 UH^LinUWII Ih-I^ PAGE 72

1751 2 But you are not sure?

1752 A I am not positive whether ue discussed it before

1753 the first check was cut or at the time the first check uas
17SU cut.

1755 e Is that the latest time that you discussed it uas

1756 when the first check was cut?

1757 A Yes. I am reconstructing now.

1758 MR. HEEHAN: The latest time you first discussed

1759 you mean?

1760 BY MR. FRYMAN:

1761 2 Yes.

1762 A Yes, it had been discussed by the time the first

1763 check uas cut.

176U 2 As we discussed this morning, this consulting

1765 agreement uas basically for public relations services, is

1766 that correct?

1767 A I guess I will fall back on the description I gave

1768 it this morning. I think that is probably generally

1769 accurate. There were a range of services that Mr. Miller

1770 discussed with Mr. Fischer and I that he was going to look
177 1 to us for, and that the entirety of those services

1772 constituted what we were going to do on behalf of IBC.

1773 2 There were a number of specifics that I understand
177M came under the general category of public relations

1775 services. If there are Mother types of services that do not

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iiHCUSSife

NAME: HIR212002 11 M ULiriU V ■ ■ ■ •• •^ PAGE 73

1776 fit under that general category, I think you should identify

1777 those now.

1778 A I think, unless something cones to mind with a more

1779 specific question, what I described earlier today in terms

1780 of the services Hr . Hiller was looking for were the types of

1781 services we rendered.

1782 2 Once again, public relations is a particular area,

1783 and I think you have identified other specific categories of
178>4 public relations services, but is there anything that falls

1785 outside the general description of public relations services

1786 that you were to perform?

1787 MR. nEEHAN: Hy problem with tha question is that

1788 he has defined the services. If you want to say that is

1789 what public relations means, some oi it was client

1790 development, some of it was specific services, some of it
179 1 was generalized advice and programs. Whether client

1792 development is public relations or whether it is

1793 professional development, business development, I guess it
179>4 depends upon how you define public relations. And I think

1795 that his answers describe the services.

1796 And If you want to say let's call them, for

1797 purposes of future purposes, public relations, we are

1798 prepared to deal with it that way.

1799 BY HR. FRYHAH!

1800 2 Just so there-i?s no confusion. Mr. Artlano, I don't

UNCLASSIRED

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UNCLASSIFIED

HAHI HIR212002 Jj |\HjLHOO 8 I 5 LU "°' ''

1801 want to take a lot of time on this, but speciiy again as

1802 briefly as possible the areas of services you contemplated

1803 uere to be performed under this agreement.

ISOU A To review strategies and advise IBC in connection

1805 uith the existing clients, projects that were underway in

1806 behalf of those existing clients, contemplated projects by

1807 those existing clients, presentation for representation to

1808 prospective clients, targat clients of IBC, the compilation

1809 of a brochure that IBC could distribute for purposes of

1810 business development, and I guess the type of general advice

1811 that Mr. Fischer and I were in position to render.

1812 2 And what areas were you to render general advice?

1813 A I guess in connection with all of the things I

1814 mentioned, and I think, as is probably the case in all new

1815 relationships, things that we couldn't contemplate at the

1816 time and we didn't, not that I have anything specific in

1817 mind .

1818 2 Mr. Fischer had a background in public relations

1819 going back to his work for the Deaver firm, did he not?

1820 A That is correct.

182 1 e And he had been working in the public relations

1822 area with Huntsman Chemical in Utah?

1823 A I probably shouldn't answer that question, because
182U I an not exactly sure what the scope of his responsibilities
1825 uere . ■ ^

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1850

2 You ate not certain what ha did?

A Yes.

2 Your background is that of a lawyer, and you have,
as you described this morning, done extensive uork in the
logistics area in political canpaigns.

A That is correct.

e What expertise did you bring to this arrangement
that was being entered into that you understood met the
needs that Hr . Miller wanted met by this agreement?

A I think the amount of tine and the level of my
prior experience with Presidential campaigns was something
he wanted to take advantage of, my experience in business
development, areas of business development, my ability to
evaluate prospective business opportunities that might arise
that IBC might be able to take advantage of, my assistance
in the presentation, or at least the compilation of
materials for presentation to prospective clients; my
experience in Washington vis-a-vis representing clients in
terms of strategies for a public relations firm to the
extent that those were translatable. Those are among the
services that Hr . Miller thought he could take advantage of.

e Your prior experience in Presidential campaigns was
basically in logistics, as I understand what you testified
to this morning.

A That is correct.

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2 Hou would that experience useiully translate to the
services you were to perform for IBC?

A Uell. perhaps I should elaborate a bit on what that
kind of logistical experience is. Essentially when you
prepare an event for a Presidential candidate, you are a
quasi-public relations man. You attempt to present the
candidate in the most positive light, both in terras of what
you personally do prior to his arrival and during his stay,
and in terras of your decisions about how and where he is
going to be making public appearances.

I was, if not a principal player, certainly a part
of the group that made decisions throughout both of those
campaigns, made decisions about all aspects of the campaign
even if my role were primarily that of an auditor in those
meetings, and as such I had accumulated and believe I still
have a great deal of experience that lends itself directly
to public relations.

In addition, I think my experience with the law
firm in representation of clients here and my time in
Washington essentially was appropriately thought by him to
be something that he could take advantage of.

2 Did you understand that the contacts and people you
knew were important?

A At the outset of this relationship, the only
meetings, for example ,. ttith people that I mentioned were the

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yNCUSSlFIED .

'AGE 77

three I mentioned earlier. I an not exactly sure how you
can separate, when you are looking at someone's experience,
how you can separate and pazse out that particular aspect.
I think Rich knew certainly that I had been involved with
the Reagan Administration in a couple of different
capacities for a long tine, that I had a nunber of
relationships that were solid relationships, and I frankly
don't know to what extent that impacted his evaluation of
what I could lend to IBC.

2 You and Hr . Fischer ended up splitting the retainer
50/50. You took «10,000, and he took ♦10,000 of the «20,000
monthly retainer, is that correct? I mean that was th«
agreement you reached between the two of you.

A That was the agreement, that is correct.
2 Going back to your discussions with him about
reaching this agreement, was that 50/50 split agreed to
because you contemplated contributing equal amounts of time
to this arrangement?

A I think initially that is true.
2 That was the rationale?
A Yes.

fi Was it contemplated at the beginning that you and
Hr. Fischer would devote a substantial amount of your time
under this arrangement to work for Hr . Channell's

organizations ■

UUSSIFIEO

82-690 0-88-17

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UNCLASSIHED

NAKE' HIR212002 UlvUbrlUUII I L. U Pl^OZ 78

190 1 A I think It became clear by the latest early January

1902 that at the outset, there were some pressing things that

1903 needed to be done on behalf of that client of IBC, and that
19014 uas uhat the principal focus was at the onset.

1905 S You and Mr. Fischer were paid, however, by IBC, is

1906 that correct?

1907 A That is correct, our arrangement was with IBC.

1908 2 You were not paid by Mr. Channell directly?

1909 A No, sir.

1910 2 Did you later enter intca supplemental arrangement
19 11 with Mr. Miller and IBC?

1912 A Yes.

19 13 S Uhat uas the origin of that?

19 1U A I think there are two components to the answer.

1915 Let me see if I can do it as clear as possible. Over the

19 16 first two months of the relationship, January-February, if

19 17 that long, frankly I think it was even shorter, three weeks

19 18 to a month into this relationship, it became quite clear to

1919 everybody concerned, Mr. Miller. Mr. Fischer and myself,

1920 that the amount of time that uas being asked for and the
192 1 devotion of timtt to this endeavor was so much greater than

1922 had been initially contemplated by anyone at the outset,

1923 that we all understood that there uas going to be an
19214 adjustment in compensation.

1925 I can't tell .y4u at uhat precise point ue had that

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PAGE 79

specific discussi<

but I can tell you that it was quite

cleai to all of us at the time and that we had some
discussion about it, that the services being rendered m
terms of time and to call upon both Oave and myself to be in
attendance at meetings and review data that was being
produced, and advice on campaign strategies and make
arrangements on behalf of Mr. Killer's clients, in
particular Mr. Channell, was far in excess of what we had
originally anticipated and that, therefore, there would be
an adjustment upward in the original negotiated price.

To move to a second of what I guess would be three
points, both Mr. Fischer and I expressed to tlr . Miller the
desire to accelerate the already negotiated payments,
because we felt we were getting way ahead of the curve, in
light of the amount of time we were spending, and to some
extent in light of the fact that Hz. Fischer found himself
almost unable to go out and develop other clients. He did a
little of that.

As a third point, down the road, if you would like
me to jump there chronologically, at some point I guess in
the spring or early summer, I can't pinpoint the exact time,
it became clear that Hr . Fischer was indeed spending, as
both of us had been spending, an inordinate amount of time
on this, virtually all his time in Washington, D.C. when he
returned from Utah, and^that he was developing a very nice

sife

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relationship with Hr . Hiller, and that he foresaw the growth
oi that company and was thinking about getting nore
involved, and at that stage Hr . Fischer and I had a
conversation.

Hr . Fischer made clear that he was talking to Rich
or would be talking to Rich, and perhaps might even be
talking to Kr . Channell. which continued to consume a good
deal of time, about a different financial relationship, and
that he would work that out.

I was at that point, by the early summer, at any
rate, less of a hands-on person in terms of attending
meetings during the day, for example, continued to advise
both Dave personally throughout the year and IBC from time
to time .

Dave indicated that he would attempt to compensate
me at or near the amount that had initially been
contemplated in the first discussion, which was a two-year
contract for *20,000. and an amount that would have been
about 50 percent of that.

The agreement was never concrete, was in a state of
flux almost from the word ''go*'. I don't know much about
the financial agreements after late spring-early summer
between Hz. Fischer, Mr. Miller, Mr. Channell, and Hz.
Fischer and Hr . Channell, and it started out and continued,
as far as I was concerned, as a good-faith arrangement. I

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PAGE 81

1976 uas friends with both Mr. Mill

«r and Mr. Fischar, alloued it

to develop.

2 Focusing on your own arrangements, did you enter
into a supplemental arrangement with Mr, Miller where you
had an additional monthly retainer?
A Yes.

2 When was that?

A I would guess it was in Jun« or July.
2 Of 1986?
A Of 1986, yes, sir.

2 And what uas the reason for that?

A As I indicated a few moments ago. I had becoma less
active hands on, and Mr. Fischer had commenced certainly by
that tima his own discussions about payments and
relationships with both Mr. Miller and Mr. Channell, and I
think that Rich Miller, because he is a good friend of mine,
felt kind of concerned about ma. I think he was worried
that this change in direction, that Dave's increased
devotion to this firm might have caused soma degree of a
problem batuaan Dave and I personally, and ha also wanted me
to stay available to IBC, and as a consequence called me and
said that he wanted to enter — that is Mr. Millar — he wanted to
enter into a separata agreement with ma, through which I
would remain available to IBC for soma of the things I had
discussed earlier, f or . avaluation of business opportunities

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200 1 that they had and for business development and to continue

2002 to review the materials they sent out to prospective

2003 clients, and asked me to write a letter to him.

200M I, again, during the course of those discussions

2005 told Mr. riiller that I would be happy to do that, but that I

2006 was constrained, as I had been irom the start, in terms of

2007 what I could do, and it was important that he understand

2008 that. That amount of time that had been devoted early on

2009 was more than I could possibly devote in the future to this,

2010 that I certainly couldn't do any legal work as I had from

2011 the start, that if these clients he was hoping to develop
20 12 conflicted with any of the clients that my law firm

2013 represented, I would not be in a position to do it.

2014 I don't have a copy of that letter. I believe Mr.

2015 Miller still has a copy of it. and if under those

20 16 circumstances that was a relationship ha wanted, that X was

20 17 delighted and happy to go forward with it, wrote him that

20 18 letter, and he agreed to it, and that relationship stayed in

2019 effect I believe for about a period of five or six months, I

2020 am not exactly sure.

2021 Q So this letter was in effect a retainer agreement

2022 that you drafted and sent to Mr. Miller?

2023 A It was a consulting agreement. It was a letter
20214 back to Mr. Miller. I wrote it a long time ago, but it said
2025 essentially ''Rich, you^asked me if I would remain available

UNCLASSIFIED

487

"'" "" "° IINCUSSIFIEO "" "

2026 to oonsulf'Ji^Ir TK: oh th« follouing matters'" or I

2027 dascribftd somsthing in genaral tarns. ''I advlsttd you of

2028 th« following constraints'', which I just exprassad. I

2029 don't renanbar then all. ''If under these circunstances IBC

2030 IS still interastad in having na availabla as a public

2031 relations consultant, I would ba happy to go forward.''

2032 e And did the letter specify «5,000 a nonth?

2033 A I don't know. That was certainly what we had
203<4 discussed. I don't know whether it was in the latter.

2035 2 You don't know whether it was in the latter.

2036 A I don't have a copy of the latter.

2037 2 Why didn't you keep a copy?

2038 A I thought I had, frankly, and looked for it and

2039 couldn't find it.

2040 2 What nakes you think that Hr . Miller still has a

2041 copy?

20U2 A I an not certain that he does.

2043 2 Have you spoken with hin about it?

2044 A I don't think I have ever asked. I have certainly

2045 spoken to Hr . Miller, but I don't know whether X asked hin

2046 whether ha had a copy of that latter or not.

2047 2 You indicated a ninute ago that you thought that he

2048 still had a copy, and I was just wondering what your basis

2049 for that belief was.

2050 A I an not sura.i He nay not have a copy.

^nmm

488

UNCLASSIFIED

NAHE: HrR212002 --w^-. .^^ pj^j. g^

2051 2 So you don't know one way or the other?

2052 A I am not sure if he does.

2053 2 Was there any tine period specified in this letter?
20SU A I don't remember.

2055 2 And pursuant to this agreement that you reached

2056 with Mr. Miller, you received a number of payments of *5,000

2057 a month, in addition to the amounts that you were sharing

2058 with Mr. Fischer?

2059 A That is correct.

2060 2 A little later we will get into some specific

2061 checks from IBC, but let me ask you, what is your

2062 recollection, based on your review of your records, of the

2063 total amount of money you received from IBC pursuant to both
206U the original agreement with Mr. Fischer, as well as the

2065 supplemental?

2066 A I don't know specif ically ► exactly, but I think it

2067 was in the vicinity of about ♦200,000.

2068 2 Did you on some occasions receive funds from IBC

2069 and then you paid a portion of the funds to Mr. Fischer?

2070 A Yes.

2071 2 The *200,000 that you mentioned, is that after the

2072 deduction of the amount that you paid to Mr. Fischer?

2073 A Yes.

207U 2 So you believe you retained something in the area

2075 of «200,000? • ^

UNCLASSIFIED

489

NAME
2076
2077
207
2079
2080
2081
2082
2083
208(4
2085
2086
2087
2088
2089
2090
209
2092
2093
2094
2095
2096
2097
2098
2099
2100

HIR2 12002

UNCLASSIFIED.

AGE 85

A That is correct.

2 And those services were periomed beginning in
December oi 1985?

A That is correct.

2 And they continued through the end of 1986?
A That IS correct.

2 Did you perform any services in 1987?
A I don't think so. I don't have any specific
recollection. I might have gotten together with Rich on a
matter in January. If I did, I don't remember it, but that
certainly would have been the last time.

2 So basically the period of time is 12 to 13 months.

A That is correct.

e And you were paid *200,000?

A That is correct.

MR. HEEHAN: Approximately «200,000.
THE WITNESS: That is correct.
BY MR. FRYMAN:
S ApproKimately 4200.00, yes.

Rather than looking forward, as we have been doing,
talking about the negotiation of the contract and what was
oentemplated that you would do, at this point I would like
to look backward and get your description of the services
that you actually performed for these funds in this 12 to 13
months. Hhat did you db?

UMWSSife

490

UNCLASSIFIED

NAME: HIR212002 -ww.. . « b^ PkGZ

2101 A We spent, and most of this is in the context, the

2102 initial part of my explanation will be in the context of

2 103 what was done in meetings which were attended for the most

210U part by Mr. Miller, Mr. Fischer and Mr. Gomez, and on

2105 occasion by Mr. Channell and Mr. Conrad.

2106 2 In your answer, Mr. Artiano, you are certainly free

2107 to bring in contributions of other persons, but I want to

2 108 focus on what you as an individual did for the compensation

2109 in the area of «200,000, so if you could keep that in mind

2110 in your answer.

2111 A I advised IBC on an overall strategy for growth of

2112 that company. Ue had lengthy continuing conversations about

2113 the types of clientele IBC should ba serving, about thtt
21 m resources IBC would have to marshal in terms of personnel

2115 and expertise to properly serve those clients, that we work

2116 together on the preparation of materials for presentation to

2117 prospective clients and on an evaluation of the needs of

2 118 those prospective clients and how IBC could best offer up

2119 its services to those clients.

2120 Ua worked, from my perspective, we had again

2 12 1 continuing lengthy meetings and conversations in connection

2 122 with a number of projects that Mr. Channel! either had

2 123 ongoing or was contemplating, tha first of which was

2 12U National Endowment for the Preservation of Liberty. Others

2 125 included tha Space Dafenpa Initiative, Constitutional

ONWSSIFIEB

491

UNCLASSIFIED

NAME: HIR212002 1 1 1 V lJt_ril.ll^ 1 I ll-K^ PAGE 87

2126 minutes, a film that he was attempting to raise money to

2 127 produce and get clearance to produce about CIA activities,

2128 an end of the century foundation, which uas going to raise

2 129 money and gather a host of people to go to Rome in the year

2130 2000, an endowment which he hoped would raise approKimately

2131 »20 million, the purpose of which was to fund activities by

2132 President Reagan after his second term, in terms of speaking

2133 and maintaining communication and being a voice for the
213M Republican Party.

2 135 In many of those instances we prepared Mr. Miller's

2 136 firm with guidance and advice from me, for this

2137 conversation, prepared lots of brochures and just general

2138 paper on all of these projects, in addition to reviewing
2 139 them, in some instances ad nauseua, in meetings.

2 1^0 We prepared, and this was quite an extensive

2141 project, a brochure for IBC. which I unfortunately don't

2142 have a copy of it with me, but it was a fairly extensive

2143 brochure, and I think fairly well done. A gentleman was

2144 called in at my recommendation to do some of the drafting.

2 145 Ue all discussed again at length what should be included in

2 146 that brochure and how it should be prepared, to whom it

2147 should go.

2 148 We talked about, in connection with the projects I

2 149 discussed above, media campaigns, did cost breakdowns of

2150 those, talked about the Apolitical strategy that would best

KIASSIFIED

492

UNCLASSIFIED ~

NAME: HIR212002 ililllll nilllil II IJ PAGE 88

2151
2152
2153
2 154
2155
2156
2157
2158
2159
2160
2161
2162
2163
2164
2165
2166
2167
2168
2169
2170
2171
2172
2173
2 17U
2175

apply in each instance. I virtually on a nightly basis,
when Mr. Fischer was in Washington, he stayed at ny home
three to iour nights a week ior the course of the year, and
evenings I would estimate we spent an average of three hours
a night, just the two of us, going over all of these natters
that I have just described. I don't think that is
comprehensive, but that gives you a sense of the types of
things we were working on.

e During 1986, you were a member of your law firm.

A That is correct.

2 And you had been a member of that firm in 1985?

A That is correct.

S Here your billable hours to your law firm
substantially less in 1986 than in 1985?

A I don't believe so.

2 So this work for IBC did not cut into the time that
you devoted to your law practice?

A Ho, sir.

2 Did you keep any records of the time that you spent
for IBC?

A I don't believe that I did. I think my calendar,
as I know I sent over a redacted calendar--there were just a
handful of entries in that calendar. Typically during the
day, for example, when Mr. Miller and Dave and I met, Dave
and I would drive down, irom my house, for example, early in

HHCLASSIHEB

493

yNCUSSIFIED

NAME: HIR212002 IIIISII ntlUll ILU PAGE 89

2176 the morning and hava a breakfast, have a couple of hours in

2177 the morning. That wouldn't appear on my calendar.

2178 Ue might have lunch, which w« did, until about the

2179 summer, on a regular basis, get together for lunch. I would

2180 find a slot in my day, if there was a reason for us to get

2181 together during the day, when I would just have an hour or

2182 hour-and-a-hali, and Rich's office is fairly close to mine.
2 183 I would go over to the office and join them in a meeting,

2 18i| and did to a large extent a lot oi this work in the evenings

2 185 at home with Dave.

2 186 Q So you were able to fit this work in without

2187 cutting into your law firm hours.

2188 A I think that is true. I was feeling a little

2 189 pressured for the first few months, because the load was

2190 much more than I had anticipated it would be, but I don't

2 19 1 think I was feeling quite as pressured after the first four

2192 or five months of 1986.

2193 Q You mentioned you spent a substantial amount of
2 19U time on the IBC work in the evenings with Mr. Fischer at

2195 your house discussing these matters.

2196 A That is correct.

2 197 2 And you would spend additional time driving to work

2 198 with him in the morning and at breakfast meetings with Mr.

2199 Miller, is that correct?

2200 A Hell, I drive. 4o work in the morning anyway. Dave

wmm

494

UNCLASSIFiED

NAME' HIR212002 U I 1 ULfllJlJ 1 1 ll.U ff^OZ 90

2201
2202
2203
2204
2205
2206
2207
2208
2209
2210
221 1
2212
2213
2214
221S
2216
2217
2218
2219
2220
2221
2222
2223
2224
2225

and I would drive m together. Dave didn't have a car for
most of that time, and I would drop Dave off typically at
rtr . Miller's office or wherever his first meeting was, and
to the extent that we needed to meet in the mornings, early
in the mornings, we would do that, park and have a meeting
at Mr. Miller's office, and then I would go to work from
there.

e Did you draw more money from your law firm in 1986
than in 1985?

A I think so.

e Did that reflect additional hours that you devoted
to your law practice in 1986?

A Hours are one component of a formula, a very loose
formula .

MR. MEEHAN: Answer. Did it reflect more hours?
THE WITNESS: I don't know.
BY MR. FRYMAH:

2 Did you bill more hours to your law firm in 1986
than in 1985?

A I don't know.

C Did Mr. Fischer live at your house most of 1986?

A He was at my house, I would estimate, three to foui
days a week for almost all of 1986. and into January of
1987.

2 He continued ,t» maintain a home in Utah?

mmwE

495

UNCLASSIFIED

NAHE: HIR212002 vllVtaflwwII IL.1/ PAGE 91

2226 A Yes. His wifa and children were at his Utah hona ,

2227 and ha started building a hone hare in Vienna sonetine in

2228 the fall, I think, oi 1986.

2229 2 I asked about time records of your work ior IBC,

2230 and you indicated you have no tine records.

2231 A That is correct.

2232 2 Hhat documents do you have that reflect work that

2233 you performed for IBC?

2234 A Probably none. To the extent that I had--

2235 MR. MEEHAH: It will go quicker if you just answer

2236 his questions.

2237 BY HR. FRYMAN:

2238 2 Do you have evidence of anything that you wrote in

2239 connection with this consulting agreement?
22U0 A Kot in my possession.

224 1 2 Hhat is there that is other than in your possession

22U2 that you know about?

22tt3 A Hell. I think if I had an opportunity to review

22<4i4 IBC's files and materials that they produce, I could find a

22M5 host of things that Z contributed to.

22(46 2 Hhat do you recall now?

22M7 A As I indicated a few minutes ago, we could start

22M8 with the brochure that IBC developed.

22149 2 This was the brochure that was written by the

2250 consultant that you b&bught in to draft it?

UNCLASSIFIED

496

HIR212002

UNCIASSIHED

PAGE 92

NAME

2251 . A He was one of the participants, that is correct, in

2252 the preparation of the brochure.

2253 2 And what was the subject of this brochure?
225U A IBC.

2255 2 Was this brochure published?

2256 A Yes.

2257 2 And distributed to potential clients?

2258 A Yes.

2259 8 When was it published, if you recall?

2260 A I don't. I would be guessing.

226 1 2 Describe the appearance of the brochure.

2262 A I am not great at size. It is probably eight-by-12

2263 or lU-by-IO, or something like that.

226M 2 Larger than regular letter-sized paper?

2265 A Oh, yes.

2266 2 Is it in color?

2267 A Yes. it is. It is slick. It is a very slick, high-

2268 gloss finish. It has got individual cards in it not only on

2269 the individuals who are the principals of the IBC, but also

2270 on the range of services that are provided by IBC. There

227 1 are about seven or eight different areas of expertise that

2272 IBC, wrote statements about it, it discussed work that IBC

2273 had done without breaching any confidential relationships
227U with clients that they had had in the past. It was, I
2275 think, a very good product.

iiNcussife

497

UNCLASSIHEO

NArtE: HIR212002 V I 1 liLtrlU il 1 1 II.U PAGE 93

2276

2277

2278

2279

2280

2281

2282

2283

22814

2285

2286

2287

2288

2289

2290

2291

2292

2293

229U

2295

2296

2297

2298

229

2300

Q Did it hava pictur«s?

A I am trying to raii«mb«r if it had pictutas. I
think it night hava, but I haven't saan it now for a uhila.

2 How many pagas?

A It wasn't really in page format. It is a fold-out,
and it has kind of a jacket inside of it for inserts. I
don't know if there were eight pages in it, 12 pages in it.
It had things about that length, cards, hard cards or a
little wider, that slipped in and out. It was made
obviously for subsequent adaptation, and spent quite a bit
of time developing it.

2 But in terms of equivalent pages of text. Hr .
Artiano, I mean we are talking about five to ten pages of
tent?

A I am guessing at text. I would guess It is longer
than 10 pages of text, but I would have to look at it again
now to tell you exactly what the quantity of it was.

e Between 10 and 20 pages of text, such as you would
generate in your law practice, in terms of number of words
per page?

A I don't know. Perhaps between 10 and 20 pages of
tttxt as I would generate, but it was a totally different
type of product.

2 And this was a brochure you worked on with a number
of other people? '•'

UNCUSSiRED

498

UNCLASSIRED

KAHE: HIR212002 U I lULllUU I ■ ILU ^^'^^ 'M

2301 . A That is correct.

2302 2 You talked with others about it?

2303 A That is correct.

2304 2 You didn't write it?

2305 A No > although I reviewed it after each section was

2306 written, may have made some contributions.

2307 2 You may have edited it?

2308 A That is correct.

2309 2 What, other than this brochure, did you participate

2310 in generating in terms of written product?

2311 A Material that was put out, some material I believe

2312 on HEPL, some material on the Space Defensive Initiative

2313 program, material on constitutional minutes, some proposals
231'4 that were sent to specific clients, although frankly outside

2315 of I believe Panama I can't give you the names of those

2316 clients.

2317 I attended--

23 18 MR. MEEHAN: He just asked you about written

2319 materials.

2320 BY HR. FRYMAM:

232 1 fi Here these materials you have just described apart

2322 izoa the proposals to clients, were they in the nature of

2323 brochures also?

2324 A They were in the nature of — no, they weren't. I am

2325 trying to remember th»' format they were in. Z think they

UNCIASSIRED

499

UNCLASSIFIED

HAnZ- HIR212002 U I * UI-MUU 1 1 whmiJ PACE 95

2326 were typically in a jackat, a regular typawrittan, sangla or

2327 doubla-spacad pages in a jacket as thay were sent out to the

2328 prospective clients.

2329 2 You nentioned HEPL and SDI and constitutional

2330 minutes. Hou nany itens do you recall, or to the best of
233 1 your recollection, do you believe were generated in terns of

2332 products for these entities? Are we talking about more than

2333 10?

233U A Oh. much more than ten.

2335 2 More than 100?

2336 A Perhaps, perhaps. There were endless drafts and

2337 letters and promotional pieces, the range of services in

2338 public relations, media evaluations, demographic studies.

2339 the types of things you would expect a public relations firm
23U0 to put together.

23>41 2 So you think there may have been more than 100?

231(2 A Ky guess would be yes. there were probably well

23<43 over 100 in the course of a year.

23(«U 2 So we are talking about generating one on the

23U5 average of every three to four days?

23U6 A Haybe more. Again, I don't have possession of

2347 these files. I have never counted them. I am just giving

23U8 you my sense, impression, that there was a tremendous amount

23M9 of paper generated by IBC and by the clients of IBC that IBC

2350 was reviewing.

UNCLASSIFIEO

500

UNCLASSIFIED

NAME: HIR212002 UltvLnUUsI I Li &^ PAGE 96

2351 . 2 And to generalize, what was your role in the

2352 generation of this paper, these apptoximatelv' 100 brochures?

2353 A I might take exception to the word ''brochures''.
23SU They weren't all brochures.

2355 2 Or items.

2356 A These items.

2357 e Information items. Did you draft them?

2358 A No.

2359 e You didn't write them?

2360 A In some instances I participated in the drafting of

236 1 them or edited them. I sat through meetings, strategy

2362 meetings prior to drafting, in which we came up with

2363 conceptual notions about how we wanted to approach

2364 something, about what items should be included in the final

2365 product, about identifying the proper people to whom they

2366 should be sent, working out a review process in each case

2367 prior to publication, talking about costs to the business.

2368 2 These strategy meetings, were these generally the

2369 meetings with Mr. Fischer in the evening that you have

2370 described or the meetings early in the morning with Mr.

237 1 Fischer and Hr . Miller? I mean, were those a substantial

2372 number of this type of strategy meeting?

2373 A They were, yes. The answer is yes in both

2374 instances.

2375 Q You also ment'ioned proposals to clients. How many

UNCLASSIFIED

501

UNCLASSIFIED

KAHEt HIR212002 UllULriUUII lL«U '''^^E 97

2376 proposals do you recall you participatad m?

2377 A I think ue had discussions. I think wa had

2378 discussions about probably a dozen prospective country

2379 clients that IBC was interested in securing as clients oi

2380 IBC, most of them in Central America, a couple of Asian

2381 countries, and some Arabic countries.

2382 2 I thought you indicated you participated m the

2383 preparation of some written proposals to clients.
23814 A That is correct.

2385 2 Hou many of such written proposals?

2386 A As many as either Ht . niller or Hz. Fischer raised

2387 with me. As the business was developing, they would decide

2388 to target. They would get some information that would cause

2389 them to target a particular country, whether the country be

2390 Panama, Morocco or Brunei, whatever they happened to be. Ue
239 1 would sit down and talk if Fit. Miller decided that was an

2392 appropriate target, or Mr. Fischer did. we would sit down

2393 and figure out how to best go about doing it.
239(4 2 Did you write any of these proposals?

2395 A I wasn't the exclusive author of any of these

2396 proposals, but I participated in the manner I described a

2397 few moments ago in the preparation of most of this material.

2398 fi That is you talked about then before they were

2399 written.

2>400 A He talked aboju^ them before they were written.

iiNcussro

502

UNCUSSIFIED

NAME: HIR212002 V I « Vkl l^' ^^ B I t^m*^ pjQg 93

2U01 2 And you read then after they were written.
21402 A Sometimes Mr. Fischer would cone back with an

2403 outline in the evenings. We would go over it, try to flesh

24014 it out, decide what needed to be included, what probably

2<405 should be excluded, and how best to make that presentation,

2406 to whom it should be directed, hou the prospective services

214O7 should be described, what that would mean to IBC in terms of

2408 time and personnel. Those were regular, virtually nightly

2M09 conversations we had.

UNCUSSIFIEO

503

NAME ■
21410
2m 1
2M12
2M13
2414
21415
2t4l6
21417
2m8
2(419
2<420
2(421
2U22
2<423
2U2(4
21425
2(426
2(427
2(428
2M29
2(430
2(431
2U32
2(433
2(43(4

tPTS MAZUR

UNCUSSIFIEO

DCMN DOKOCK
2 15 p.m.

BY MR. FRYMAN:

2 Right. You mentioned a minute ago your calendars,
which you have produced, and we will get to those in a few
minutes .

Apart from the meetings in the evening with Mr.
Fischer and in the early morning with He. Fischer and in
some cases Mr. Miller and the othttr tine you were able to
make available at odd periods for then, do your calendars
that you have produced reflect all of the meetings that you
participated in in connection with this IBC arrangement that
occurred during your regular working hours?

A Mo.

2 Uhy not?

A X would guess not.

e Hhy not?

A As I indicated earlier, if I had an hour, hour and a
half during the course of a day free, and it had been
requested that I go over to Rich's office, I very well may
not have entered it at all on my calendar.

It wasn't a law firm matter. I keep that calendar
for purposes of time for the law firm. There are instances
where I will put othe»-' things on it clearly, but certainly

UNCLASSIFIED

504

UNCLASSIFIED

NAME: HIR212002 WiWW»»»»wv.. » »- — - ^^^^ ^^^

2435 not all the time, as opposed to representation oi a client,

21436 where I will typically enter all of the time I spent.
2H37 2 Does your law firi» have the practice oi all of the

2438 attorneys preparing daily time cards for billing purposes?
2U39 A Ue all have call cards. He Keep then in different

2'4<40 ways, and at the end of the month, each attorney subnits a

2'4'41 tiree sheet through his secretary, which is, you know,

2'4<42 computerized.

2UU3 C Summarizes hourly charges by client.
214(4(4 A Yes, sir.

214(45 Q Now, just to wind up the types of written uoik that

2U146 you participated in for IBC . We have talked about th« ZBC

2>4(47 brochure, we have talked about the various information items

2(4148 that were generated for NZPL and SOI and others, and we have

2(4(49 talked about proposal to prospective clients.
2(450 What else in the nature of written materials were

2(451 you involved in?

2(«52 A X can't--there may have been other things. I can't

2(453 recall them at the moment.
2(4514 S Here those the major items?

2(455 I I think so. You know, Mr. rischex would come--in

2(456 addition to telephone conversations I had during the course

2(457 of the day, which were frequent--! guess that is--that is at

2(458 least what I can recall as I sit here, having reviewed or

2U59 discussed the one--for one purpose ox another duzlng the

ilNCLASSIFIED

505

MAHE- HIR212002

UNCLASSIFIED

'AGE 101

aueo course of the relationship,

2»«61 fi Well, as of today, looking back on this period of a

21462 year which ended seven or eight months ago, the types of

2<463 written materials that you have identified are the ones that

2M6I4 you recall today?

2M6S A That is correct.

2466 fi Kow, did you understand that part of your

2467 compensation was for arranging meetings?

2'*i8 A I think I understood from the beginning of the

2U69 relationship that there would be occasions where Dave and I

2U70 or one of us would be asked for one of various reasons to

2471 assist IBC on behalf of its clients in arranging a meeting.

2M72 2 And did you do that?

2473 A On several occasions, yes.

24714 2 What were the occasions?

2475 A At my invitation. Elliott Abrans attended a

2476 luncheon. Either occasion. Elliott Abrams--! scheduled a

2477 visit with Elliott Abxams at his office at the State

2478 Department. '■

2479 2 Anything else?

2480 A Ko. Nothing that comes to mind immediately.

2481 2 Well, take a minute or two to reflect.

2482 A I am not recalling anything at the moment other than

2483 those two meetings that I on my own set up.

2484 2 Well, did you-assist in setting up any others?

UNCIASSIHED

506

UNCUSSIFED ,

HAKE: HIR212002 vIlULrlvUii E L. Bt' ^'^^^ ^02

21485 A Well, I thmK in every--in most instances anyuay,

2486 certainly in many instances when Dave was asked to set up a

21487 meeting, Dave and I discussed it before it happened. I may,

2"488 by the way, set up a meeting m the Vice President's ofiice

21489 uith--I may have set up a meeting with one oi the Vice

21490 President's staii.

2149 1 I know we had a meeting over there. I am not sure

2492 if I or Dave did that, but on any occasion when Mr. Fischer

21493 uas asked to arrange a meeting, he and I reviewed it.

214914 Typically, he was the one that made the telephone call, not

2U95 me.

21496 2 So, in terms of making the telephone call, you did

2U97 It for the two meetings with Abrams.

21498 A Yes.

2499 2 And one in the--one meeting with a member of the Vice

2500 President's staff.

2501 A I think that is correct.

2502 2 Uho uas the member?

2503 A I don't recall. I know a lot of people--! don't know

2504 if Craig Fuller was in that meeting or if Lee Atwater uas at

2505 that meeting. I just don't recall who was there when ue had

2506 the meeting.

2507 2 Uhen was the lunch with Hr . Abrams?

2508 A I am sorry. I don't recall the date of the lunch.

2509 2 What was the mdn'th?

UNCLASSiFiEG

507

NAME
2510
251 1
2512
2513
2514
2515
2516
2517
2518
2519
2520
2521
2522
2523
252U
2525
2526
2527
2528
2529
2530
2531
2532
2533
25314

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UNOUSSIFIEB ....

103

A I can't tell you.

2 Was it m early 1986?

A I believe it was prior to the sumner oi 1986. It
uas probably in the spring, but I don't recall the specific
date .

e Who attended?

A Mr. Abrams and myself, Mr. Fischsr, Hr . Hiller, ftr .
Gomez and Mr. Channel, C-h-a-n-n-e-1 .

Q Two Ls .

Who asked you to arrange that meeting?

A Mr. Miller.

2 But Mr. Hiller did not attend?

A He did.

2 But--I missed that. So it uas Abrams. you, Fischer,
Miller, Gomez and Channell.

A That is correct.

2 Did Conrad attend?

A I don't believe so.

2 And Miller requested the meeting?

A I believe so.

2 Do you know if Channell requested Miller to set up
the meeting?

A Yes.

2 That is your understanding?

A Yes.

UNCLASSiRED

508

UNCLASSIFIED

NAME: HIR212002 lllllimil&EI! I! 3^ PAGE ^0^

2535 . 2 Then Channell basically asked for the meeting?

2536 A Yes, but I got the request through Rich.

2537 2 Through Miller.

2538 A But I believe it was on behali of Mr. Channell.

2539 That is why he was at the meeting.

25U0 2 Uhy did you understanding this meeting had been

2541 requested?

2542 A nr . Channell had never met Mr. Abrams , I don't

2543 believe--prior to that time, and I think for obvious reasons,

2544 Mr. Abrams is--uas Assistant Secretary for Inter- American

2545 Affairs, and was senior spokesman for the United States in

2546 matters concerning Central America, and Mr. Channell had an

2547 organization that was supportive of the President's position

2548 on the contras . and it was for purposes of an exchange of

2549 information.

2550 I think Mr. Channell wanted to communicate to Mr.
255 1 Abrams what he was doing and see what Mr. Abrams' thoughts

2552 on the matter were.

2553 2 What happened at the lunch?

2554 A Mr. Channell--to the best of my recollection, most of

2555 the luncheon was dominated by Mr. Channell. He told Mr.

2556 Abzans about all of the things he was doing, not only NEPL,

2557 but his other projects, some of which I have touched upon

2558 here, and talked about how he was hoping that he would be

2559 successful in supporting the President's platform on this.

UNCLASSIFIED

509

yNCLASSIFiED

HAKE: HIR212002 KllfSISB FllSLllH IIL.&^ PAGE 105

2560 and appreciate the fact that Ke . Abrans was such a great

2561 spokesman for the Administration.

2562 That was that type of luncheon.

2563 e Did Mr. Channell show Mr. Abrans any written

2564 material?

2565 A I don't recall. He may have brought material to the

2566 meeting with him--to the luncheon with him to shou Mr.

2567 Abrams. I think we talked about the commercials that Hr .

2568 Channell's organizations had produced.

2569 I think he asked Mr. Abrams if he had ever seen any

2570 of the commercials. I don't recall whether Hr . Abrams had
257 1 or had not. It is very possible he brought information or

2572 literature with him, but I don't recall if he did or didn't.

2573 S At this point, you and Hr . Abrams were very close

2574 friends.

2575 A That is correct.

2576 2 Is that correct?

2577 Old you talk to Mr. Abrams afterwards about this

2578 luncheon?

2579 A I mean. I certainly talked to him afterwards. I

2580 don't recall that we specifically talked about the luncheon.

2581 He may have, but it was--if wa did, I guess it was

2582 inconsequential, because I don't recall his comments post

2583 that luncheon, about it.

2584 2 How, you said^you arranged a second meeting with Mr.

UNCUSSiFIEG

510

UNCUSSiFIED .

Hknz HIR212002 IJ I Y Ui_niJLl i S II !.J P'^''^ 1°^

2585 Abraras.

2586 A That iS correct.

2587 2 When was that?

2588 A I don't recall exactly, but it was subsequent to

2589 that, the luncheon.

2590 2 And who was In that neeting?

2591 A nr.--it was in Hr . Abrams' office, and Mr. Fischer

2592 and Kr . Channell and I were there.

2593 2 What happened at that meeting?

259U A nr . Channell had requested the meeting because he

2595 was at that point--! am sorry, I don't recall the

2596 date--concerned that the President was about to withdraw his

2597 support from the contras m one form or another, and was

2598 hoping to get some assurance from Hi. Abrams if that is the

2599 case.

2600 The three of us went into Mr. Abrams' office. Mr.

2601 Channell's sort of talking. He got very excited because Mr.

2602 Abrams was telling him that at the minimum the President was

2603 firm in his support and really wasn't saying much more, and
26014 Mr. Channell started giving a speech and Hr . Abrams after--!

2605 don't know exactly how long the meeting went; certainly

2606 couldn't have been more than 10 minutes, as ! remember it.

2607 Mr. Abrams finally just got up and said,

2608 ''Gentlemen, you will have to excuse me. ! have another

2609 meeting.'' We all goC up and walked out of the room, and

UNClASSIfiE

511

UNCUSSIHED ..

NAME' HIR212002 UllULrlUVll I L. 1/ P>^^^ ^01

2610 clearly. Mr. Abrams was upset by fir. Channell's demeanor.

2611 2 Did you discuss this afterwards with Hr . Abraras^

2612 A I apologized to Mr. Abraras by telephone afterwards.

2613 e What did he say?

2614 A He said it happens. You know, ''I an not
26 1 5 offended . ' '

2616 2 And you recollection about a meeting with someone on

2617 the Vice President's staff is very imprecise?

2618 A Very imprecise. This, by the way. is another

2619 project being worked on and talked about that never came to

2620 fruition. Mr. Channell was attempting to put together a

2621 project which involved a series of speaking engagements to

2622 small groups of conservatives around the country, and was

2623 hoping to get the Vice President to commit to a number of
26214 those, to appear at a number of those engagements.

2625 This was--I guess another fund-raising vehicle for

2626 Hr . Channell's organizations. Several letters, as I

2627 recollect, uere--that X know I saw and may indeed have had a

2628 hand in drafting were sent back and forth between Mr. Miller

2629 and the Vice President's office.

2630 At first, it appeared that the Vice President was

2631 going to commit. I believe that commitment was later

2632 withdrawn. X don't think it ever happened.

2633 2 All right.

263U A And my recoll»<jtion is that is what that meeting was

iSifitO

512

HIR2 12002

UNCLASSIFIED

PAGE 108

NAME ■

2635 about, although I tell you I--the meeting is kind of a fog tc

2636 me. I don't have any specific recollection of it at all.

2637 2 Now. you have indicated that you considered--one of

2638 the contributions that you were making pursuant to this

2639 arrangement with IBC was to arrange for these particular

2640 meetings .

2641 A I think the way I stated it was that--I think I

2642 understood right from the outset that part of the services

2643 would be that there would occasionally be a request on Dave

2644 or on me or on both of us to assist IBC on behalf of one of

2645 their clients to set up a meeting with somebody in the

2646 Administration.

2647 fi And these are the ones you arranged particularly?

2648 A Those two, I did on my own, yes. sir.

2649 2 And I think you used the phrase you made the

2650 telephone call?

2651 A That is correct.

2652 2 And part of your compensation was for making the

2653 telephone call?

2654 A I would hardly describe it that way, but part of my

2655 compensation was for rendering services. Included in those

2656 services was assistance in connection with giving or getting

2657 information from the Administration, and in that respect, I

2658 agreed to help set up those meetings, and did.

2659 2 You said that ^a's contemplated from the beginning

513

NAHE
266(
266
2662
2663
26(
2665
2666
2667
2668
2669
2670
2671
2672
2673
267U
2675
2676
2677
2678
2679
2680
2681
2682
2683
26814

HIR2 12002

UNCLASSIFIED

PAGE lOS

that you would assist setting up such raaeting, and that was
to be coveted by the compensation of--
A That as correct.

2 Now, the telephone calls for the other meetings you
said were made by Mr. Fischer and not by you?

A They were not always in the form of telephone calls.
Some were in the form of letters requesting meetings. That
we would draft joint or someone would do a rough cut of it,
and we would all look at — and had it sent out.

2 And you were aware that Hr . Fisher was making a
request m one form or another for these other meetings?
A Yes, sir, I was.

2 And did these include meetings with the President?
A Yes, sir.

2 And Attorney General Heese?
A Yes, sir.
2 Mho else?

A Charles Wick--the meeting, for example, at the White
House in January, the briefing in the Cabinet Room that was
arranged with the help of Ht . Fischer in January of 1986
included Colonel Horth, Assistant Secretary Abrams, Don
Regan and the President.
S Okay.

KoH, going back to your original series of meeting
with Mr. Miller about -this consulting arrangement, from the

UNCLASSiFIE

514

NAME:
2685
2686
2687
2688
2689
2690
2691
2692
2693
26914
269S
2696
2697
2698
2699
2700
2701
2702
2703
27014
2705
2706
2707
2708
2709

SSIFIEO .. ,.

HIR2 12002

earliest discussions it was understood, was it not, that one
of Mr. Miller's objectives from you and Mr. Fischer was
setting up meetings with President Reagan?

A That is not correct.

2 When did that cone up?

A The first tine that came up uas . as I recall it. was
in January of 1986.

2 What were the circumstances?

A I am testing my recollection her*, but to the best
of my knowledge, it came up at a meeting at IBC which was
attended by Mr. Miller and Mr. Fischer, myself, Mr. Channell
and Mr. Conrad. Either prior to that meeting or at that
meeting for perhaps the second or third time, we were
reviewing a file that had been given to David and myself by
either Mr. Miller or Mr. Channell, which included a stack of
letters from Mr. Meese — I believe Mr. Regan and the President
and perhaps the Vice President commending Mr. Channell for
his efforts and making reference to meetings that Mr.
Channell had already had at the White House, and the
different agencies of the Executive Branch, and we were
discussing at that meeting his current strategy for HEPL and
media campaign they were planning to mount, things of that
nature .

I don't have--a crystal clear recollection of this
meeting. It was--a possibility of a briefing for a group of

lltCU

515

NAME: HIR212002

UNCUSSIFIED

PAGE 1 1 1

2710 donors to NEPL at the Uhita House--as far as I can r«call was

2711 raised in that meeting for the first time, and I can't tell

2712 you uho raised it, who raised that possibility, because none

2713 of us had thought about it.

2714 I certainly hadn't thought about it, nor Hr . Fischer
27 15 before that time, but it sounded like a terrific idea, and
27 16 we went about seeing if we can raake it happen.

2717 2 So, going back to the original discussions, which

2718 you believe occurred in probably Oacember of 1985, it was
27 19 contemplated iron the beginning that one of the

2720 contributions that would be made by you and Hr . Fischer

272 1 would be to arrange meetings in general, but the President

2722 had not been specifically identified in that original series

2723 of discussions or negotiations.

2724 A That is generally accurate.

2725 2 Well, in what relationship is it not accurate?

2726 A Well, I guess we keep attempting here to define what

2727 services that were contemplated initially were. I have done

2728 my best thus far to give you my understanding of the range

2729 of those services as were discussed initially.

2730 2 Right.

273 1 A As I indicated, one of many things mentioned in

2732 those — that first series of conversations and in the early

2733 negotiation with Mr. Miller were at three meetings that I

2734 references with Mr. Rtfjran and Hr . Abrams and Hr . Laxalt on

\mmm

516

UNCLASSIFIED ,.

NAME^ HIR212002 V I 1 Wkl l^' ^^ ■ ■ ■ 1- »* PAGE 112

2735 behali of NEPL for purposes oi exanination of information

2736 and perhaps getting some--getting additional support from

2737 those people for the types of programs that NEPL uas

2738 undertaking.

2739 To the extent the meetings uere discussed, that is
27U0 it. This subsequent January conversation. I have ^ust
27U1 described to you, uas indeed something absolutely new m
27>42 terms of the shape of this relationship, and the services to
27143 be rendered. It uas not something that had been

271414 contemplated initially.

27»»5 e Okay.

271(6 Hou many meetings did you and/or Fir. Fischer arrange

27M7 uith President Reagan and on behalf of an individual or a

27148 group associated uith Mr. Channell?

2749 A I can't give you a specific ansuer to that question.

2750 because I didn't arrange those meetings myself and didn't
275 1 attend any. but one of them, and the one I attended uas not

2752 uith an individual. It uas the one I just described. It

2753 uas uith a group of probably 30 people--35 people in the
275U Cabinet Room.

2755 I would be guessing--six .

2756 S You uere auare, uere you not, of Hr . Fischer's

2757 efforts to arrange such meetings?

2758 A Yes, sir.

2759 e But he made th* 'phone call, not you — I think to use

UNCLASSIFIED

517

UNCLASSIFIED

NAME: HIR212002

2760 the phiasai

2761 A Figurativaly , yeah, he nade the arrangements.

2762 2 Now, did you become ware at some point in 1986 that

2763 Mr. Channell and Mr. Conrad had the understanding that they

2764 uere paying you and Mr. Fischer »S0,000 for each meeting

2765 with Mr. Reagan?

2766 A At some point in 1986, early in 1986, although I

2767 can't again tell you the date, both Mr. Fischer and I,

2768 through a vehicle I can't recall now or I would share it

2769 with you, became aware oi the fact that either Mr. Conrad or

2770 Mr. Channell or both of them felt that they had made a
277 1 payment for arranging a meeting.

2772 2 This was told to you, I take it, by someone?

2773 A Yeah. I mean, it was either a comment that was made
27714 to Dave or in somebody's presence, but we became aware of

2775 it, and were very concerned about it.

2776 2 Why were you concerned?

2777 A Because that was not--it was inaccurate. That was

2778 not the relationship ue had then. It was not the

2779 relationship we anticipated, it was not one we would have

2780 entered into and it was inaccurate and we wanted to correct

2781 it.

2782 e What did you do?

2783 A We had a meeting — called a meeting.
278'* 2 When was this meeting?

UNCUSSIFIEO

518

UNCUSSIFIED

KAME: HIR212002 11 1 « 11^1100 ■ ■ CL.t/ PAGE 1 m

2785 . A I don't recall the date of the meeting, but it was

2786 imnediately after this became known to us and we were

2787 concerned about it, and we telephoned Mr. niller and said,

2788 ''Ue would like to have a meeting.'*

2789 Q Where was the meeting?

2790 A It was IBC's offices.

2791 2 Who attended?

2792 A Mr. Hiller, fir. Gomez, Hr . Fischer, Hr . Channell,

2793 nr . Conrad and myself.

279(« Q What was said at this meeting?

2795 A We addressed the issue I just discussed. Said, ''It

2796 has come to our attention you may feel* '--this was addressed

2797 to nr . Conrad and Mr. Channell — ''or that somebody may have

2798 mentioned or indicated that we have been paid for meetings

2799 or retained by one of your organizations, and that is wholly

2800 inaccurate, and we have called this meeting to make sure
280 1 that everybody understands that we have a continuing

2802 retaining relationship with IBC, we are available to IBC for

2803 all of the reasons — all the prefaces I have discussed with
280U you already here earlier today.*' and that ''we would

2805 appreciate It if no one ever made that kind of inaccurate

2806 remark again. ' ' and there was complete concurrence around

2807 the table as to all points.

2808 2 Had you received a payment of •50,000 from IBC after

. 1

2809 the January meeting w£\h President Reagan?

UNCLASSIFIED

519

UNCLASSIFIED

NAME: HIR212002 WllVbflWil I L. U PAGE 115

2810 A Ue received--best oi my recollection--! don't have the

2811 schedule in front of rae--received a »S0,000 payment either in

2812 late January or early February.

2813 e And the retainer agreement that you have described

2814 provided for «20,000 a month?

2815 A That is correct.

2816 2 What was the reason for the «50,000 payment entered

2817 late January or early February?

2818 A There were two reasons for it. The first reason

2819 was, as I indicate now and on several occasions, is that

2820 between the commencement of this relationship in December

282 1 and mid-January, or by the second week in January, it became

2822 very clear to us--it certainly had by the end of January--that

2823 the amount of tine that both Hz. Fischer and I, perhaps at
282>4 that point more so Kr . Fischer, had been called upon to

2825 dedicate to this, was grossly in excess of what had

2826 initially been contemplated.

2827 Therefore, we asked Mr. Hiller, and he obliged us to

2828 accelerate payments, and I think as early as that date, we

2829 were discussing or at least thinking about increasing the

2830 initial financial remuneration in the anticipation that this

283 1 increased call on time and resources was going to continue

2832 and thereby preclude Mr. Fischer for one from developing a

2833 broad-based consulting operation.

283M He also, I win add — Oave and I both had some concern

UNCIASSIHEQ

520

UNCLASSiFIED ....

KAME: HIR212002

2835 over being paid at all. I think that is aluays--always in

2836 the back of your mind in one oi these relationships, and ue

2837 felt a lot more comfortable being ahead of the game at that

2838 point, just on the basis of the initial agreement than

2839 behind the eight ball, and we are both as I indicated a
28140 moment ago, talking about the fact that there would have to
28U1 be an adjustment in the compensation if this amount of time
28'42 and effort were going to be dedicated on a regular basis.
28U3 C Do you recall that the original «50,000 check was
2844 returned for insufficient funds?

ZBtS A I think that happened — I don't recall that

2846 specifically, but I think that happened on mora than one

2847 occasion during the course of this relationship. ^

2848 8 When you had this meeting with Hz. Channell and Mr.

2849 Conrad, did they tell you that they had understood they were
— ^850 paying $50,000 per meeting with President Reagan?

2851 A Ho, sir.

2852 2 Well, did they deny that was their understanding?

2853 A The--my recollection of that meeting, there was

2854 absolute unanimity among all of us in connection with what

2855 the relationship between Mr. Fischer and I and IBC was.

2856 There was absolutely no remark that I can recall in that

2857 meeting challenging that or disputing it in any sense.

2858 He didn't hold that meeting to create any animosity.

2859 Ue held it to make sure' that they understood that, and to

UNCUSSIHEO

521

NAME
2860
2861
2862
2863
2864
2865
2866
2867
2868
2869
2870
287 1
2872
2873
28711
2875
2876
2877
2878
287'
2880
2881
2882
2883
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HIR2 12002

UNCLASSIFIED

'AGE 117

the extent that somebody had made a lamaik along those
lines, that wouldn't happen.

2 Dad you ever become aware that subsequent to that
meeting, fir. Conrad said they paid you »50,000 per meeting
with President Reagan?

A Subsequent to that meeting?

Q Yeah.

A Mo.

2 Did you ever arrang* meetings with Administration
officials, for anybody else, under any other consulting
arrangement other than the ones you described today?

A Consulting arrangement other than IBC?

2 Yes .

A And outside of the law firm?

e Yes .

A Yes .

2 What?

A I consulted to--in connection with several other
people--Hicro-Gravity Research Associates, which is a high-
tech organization that manufactures a type of crystal. A
meeting was set up--two meetings were set up on their
behalf--one with Mr. Keyworth, who was the present--since
advisor, and I believe one was an official at the Department
of Transportation, although I didn't attend that meeting.
And in other rnstances--and I an now going back to

vHmms

522

UNCLASSIFIED

NAHE: HIR212002 w . . .»« ^s i w Vf 1 1 I h. t^ PAGE llj

2885 19814, perhaps, as early as 198i4, naybe •8S--there was a

2886 project that was presented to ne by sone folks in Nan York

2887 who owned an advertising barter company, and they had access

2888 to both nuraerous--by numerous, I mean tens of thousands or

2889 airline tickets they had gotten control o£ in a transaction

2890 with one of the airlines, and I don't remember which one,

289 1 and discount hotel rooms, and they ware interested in

2892 selling those to the United States Government, and they were

2893 being sold at a rate cheaper than the best government rate,
289>4 and asked me to set up meetings, which I did, with the folks

2895 responsible for those types of decisions, and three or four

2896 different agencies.

2897 I don't recall the precise people with whom I set

2898 the meetings up, but yeah. I did that. sure.

2899 2 In response to my original question, you made the

2900 remark other than through your law firm. Is that a part of

290 1 your law practice, to arrange meetings with Administration
2902 officials?

mmm

523

,. wifcssm

NAME: HIR212002 ||tft,U'l IlVXIrlrll PAGE 119

2903 RPIS nAZUl

290U DCKM BAKNAN

2905 A No. The only meAtings w« had uara--I was just

2906 trying to dafina your quastion.

2907 2 Why did you think you naadad to axcluda your law

2908 firm?

2909 A Wall, thara hava bean tinas in the last fiva years
29 10 when I hava had reason to sit down with somaona in the

29 11 Administration on behalf of a client that I hava, because it

29 12 is a matter pending before that agency or under that

2913 person's jurisdiction for advice or whatever.

29 1(4 2 But that is a meeting that you yourself have--

2915 A Yes, sir.

29 16 2 — rather than arranging an introduction for someone

2917 else?

2918 A Yes, sir.

29 19 KR. FRYnAN: Ask the reporter to mark as Artiano

2920 Deposition Exhibit 1 for Identification a subpoena duces

2921 tecum addressed to Hartin L. Artiano, June 3rd--dated June

2922 18, 1987.

2923 (Artiano Exhibit No. 1 was marked for
292U Identification. 1

2925 [Discussion off the record]

2926 BY HR. rRYHAN:

. i

2927 2 Hr. Artiano, T show you Exhibit 1 for

mmsim

524

NAME
2928
2929
2930
293 1
2932
2933
2934
2935
2936
2937
2938
2939
2940
2941
.^; 2 914 2
"^ 2943
294U
2945
2946
2947
2948
2949
2950
2951
2952

HIR2 12002

ICLASSIFiED

PAGE 120

<J^

Identification and just ask you to confirm that's a copy of
th« subpoena duces tecum that was setvad I guess on your
counsel on behalf of you.
A Yes.

MR. FRYHAN: Ask the reporter to mark this volume
as Artiano Deposition 2 for Identification, which contains
the records produced by Mr. Artiano's counsel relating to an
account at the American Security Bank, account number

[Artiano Exhibit Ko . 2 was marked for
identification . 1

MR. FRYMAN: Ask the reporter to mark as Artiano
Deposition Exhibit No. 3 for Identification documents that
have been produced by Mr. Artiano's counsel relating to a
checking acc ount at the American Security Bank, account
nurabe r^^

[Artiano Exhibit Ko . 3 was marked foe
identification. 1

MR. FRYMAN: i ask the reporter to mark as Artiano
Deposition Exhibit 4 for Identification documents that have
been produced by Mr. Artiano's counsel relating to the
following accounts at the American S ecurity BanK^ account
nusber^^^^^^^^^^^^i nunber^^^^^^^^^^^B

OlUSSlFiEO

525

OfffiLASSIflEO "

NANE HIR212002

2953 idantif ication. )

295U BY HR FRYMAN:

2955 2 Now. Hr . Aitiano, Exhibits 2, 3 and M--

2956 MR. HEEHAN: Exhibit 2 appeals to ba your PC

2957 account, check register and bank statements with checks.

2958 Are the checks included here? I haven't had a chance--yes

2959 they are--and also statements from--sorae statements from youi

2960 accounting firm summarizing some of the bank statements, and
296 1 these were produced in response to the subpoena that was

2962 served on you by me and ueie obtained by me from the

2963 accounting firm-- Anthony C Williams is the name of the

2964 accounting firm.

2965 MR. FRYKAK: And Exhibit 3 is the materials that

2966 you have produced relating to the personal account, account

2967 795--

2968 MR. MEEHAN: These are documents many of which carae

2969 from Mr. Artiano's office, because some of these personal

2970 accounts were kept there and ate the bank statements with

2971 checks. The check registers are in here also. I believe.

2972 This account number did change on its first two

2973 nuabers, becameHHr ather than^H

297U . There is another personal account. Is that marked

2975 as Kuaber U?

2976 MR. FRYMAN: Hell, if you will look in Exhibit U.

2977 there are three accounts in there. The last digits are

yiiissifiEo

526

MAHE

297

2979

2980

2981

2982

2983

298U

298S

298

2987

2988

2989

2990

299 1
2992
2993
299U
2995
2996
2997
2998
2999
3000

300 1
3002

HIR2 12002

mmmm -

MR riEEHAN: Which appears to be a money market
account at the American Security Bank.

MR. rRYHAN: And flj^.

MR. MEEHAN: Which appears to have been opened in
early 1986.

The account ending in nurabei^^^Happears to be a
personal account uhich had, I believe, its only actual
transactions in and out in Decenber '85 or early 1986, and
account number ending with^^^His a premier credit line
statement with the American Security Bank beginning--it
appears in the summer of 1986--the first statement appaars to
be September 1986 and continues to April of 1987.

BY MR. FRYMAN:
2 Now, subparagraph A of the schedule attached to the
subpoena. Mr. Artiano. calls for you to produce for the
period July 1, 1985, to the present, all records relating to
bank accounts over which the respondent had any authority to
uithdrau funds, and then it describes particular types of
documents relating to those accounts.

Now I will direct this question both to you and
your counsel^ Is it your belief that Exhibits 2, 3 and M
constitute all of the documents that aza responsive to that
paragraph of that subpoena?
A Yes . _ '

Mumm

527

MAME ■
3003
3004
300S
3006
3007
3008
3009
3010
301
3012
3013
30m
3015
3016
3017
3018
3019
3020
3021
3022
3023
302'
3025
302f
3027

HIR2 12002

UNCLASSIFIED „,

HR. MEEHAN: I believe it does. Ue supplemented

Apparently ue might have had some statements in the original
response and since then supplemented it, so--
BY HR. FRYMAN:
e And are those accounts that have been identified,
ftr . Artiano, the only bank accounts during that period over
which you had any authority to withdraw iunds?
A Yes, sir.

MR. FRYMAN: Ask the reporter to mark this document
as Artiano Exhibit 5 ior Identification.

[Artiano Exhibit No. 5 was marked for
Identification. 1

BY MR. FRYMAN:
2 Mr. Artiano. Exhibit 5 is a 1985 Federal Income tax
return and there also are some materials relating to a
Virginia return included in that.

Are those the only materials that you have that are
responsive to subparagraph B of the schedule attached to the
subpoena, which calls for 1985 and 1986 tax returns?

MR. HEEHAN: I think ue submitted the extension
certificate for the 1986 tax return.

MR. FRYMAN: All right. There was not a 1986 tax
return?

MR. MEEHAN: No. But there was an extension and
certificate that was i^led with the Internal Revenue

UNCIiSSlFIE

528

NAME-
3028
3029
3030
3031
3032
3033
3034
3035
3036
3037
3038
3039
30140
30U1
30M2
3043
30MU
3045
30U6
30M7
30>48
3049
3050
305
3052

HIR212002

wiftssiFe

PAGE 124

HR. FRYHAN: And that is also includftd in Exhibit
5.

Mr. Heahan, it is my baliei that Exhibit 5 is all
of the tax materials that you have submitted, and if you
would just look through that land confirm that is the case.

MR. KEEHAK' He have a separate document form 4868,
but that is the '86 extension notification to the Internal
Revenue Service, as well as a copy to the State of Virginia.

HR. FRYHAH: And those are the materials that Mr.
Artiano has which are responsive to subparagraph B; is that
correct?

MR. MEEHAK: Yes.

HR. FRYHAH: Finally, I would ask the reporter to
mark as Artiano Exhibit 6 for Identification a group of
calendars or redacted calendars which have been produced.

[Artiano Exhibit Ko . 6 was marked for
identification. 1

MR. FRYHAK: Mr. neehan, if you and Mr. Artiano

will look at Exhibit 6 and confirm those are the calendars

that you have produced.

THI HITNESS= That's the redacted calendar for the

period of 1985 through July 1987— or to July 1987.

HR. FRYHAM: And were those calendars produced in
. -i
response to the request in subparagraph C of the schedule

UNCUSSIFIED

529

UNClASSIFIEn

NAHE: HIR212002 V » 1 VIUI •'W « » nh-"' ^^^^ ^^^

3053

30SU

3055

3056

3057

3058

3059

3060

306

3062

3063

306U

3065

3066

3067

3068

3069

3070

3071

3072

3073

30714

307S

3076

3077

attachad to the subpoena?

THE UITNESS: Yas .

MR. MEEHAM: Also in xasponsa, in fact, to
subparagraph E in part, as wall as soma of tha bank
statements, are in response to C as wall as A, as you would
know. Ha related to David Fischaz--soiia of tha portions of
the calendars relate to meetings with Hr . Fischer, and Hr .
Miller obviously is covered by C.

HR. FRYMAN: All right.

Now, do the documents that have been marked as
Artiano Exhibits 2, 3, 4, 5 and 6 constitute all of the
documents in Mr. Artiano's possession which are responsive
to subparagraphs A, B, C, D and E of tha subpoena?

MR. MEEHAN- I believe they do.

MR. FRYMAN: All right.

BY MR. FRYMAN:
2 Just a few brief questions, Hr . Artiano, with
respect to Exhibit 6, tha calendars.

These calendars, I take it, are the only references
to work performed pursuant to tha consulting agreement with
IBC?

A Yas. sir.

fi Is that correct?

If you would look at tha calendar entry for
February 25, it is a »«ierence to a breakfast meeting at

UNCLASSIFIED

530

UNSUSSIFiEB .

NAME^ HIR212002 ■»•-—— pjQj ,36

3078 Dupont Plaza and the initials appear to be DF, RM and SC .

3079 Mho do they represent?

3080 A Dave Fischer, Richard Miller and Spitz Channell.

3081 S There is another reference on a page that has 13,

3082 and I can't tell the month. And there is an entry at 11^30,

3083 it appears, for a White House lunch, or HH lunch, which I
30814 take \t is White House lunch.

3085 A That's correct.

3086 HR. HEEHAN: The next page is March of '86.

3087 BY MR. FRYMAM:

3088 e What does that entry relate to?

3089 A I don't know. I pulled it because I suspected it

3090 may have been something that needed to be supplied pursuant
309 1 to the subpoena.

3092 I had a lunch at the White House with Dave Fischer

3093 and the Warns, I believe their names were. They were

3094 contributors, donors, to Mr. Channell's foundation, I think

3095 to MEPL. Dave had invited them to lunch at the White House

3096 and had invited me to come along, and I didn't know if that

3097 was the reference to that, because I had lunch at the White

3098 House other times clearly.

3099 fi Who else attended this luncheon at the White House

3100 with the Warms?

3101 A Myself and David Fischer.

. ■I

3102 2 Now, at this time Mr. Fischer was not a White House

UNCUSSifiEB

531

UNCLASSIFIED

NAME HIR212002 IJIlULflUwII **»*' PAGE 127

3103 employee?

3104 A That's correct.

3105 fi Uas there any White House employee who attended?

3106 A It's possible that Jim Kuhn or someone uas there

3107 when ue arrived and sat us down at our table, but from ray

3108 recollection only four of us sat through the whole lunch

3109 uith nr . Fischer and myself and Hr . and Hrs . Warm.

3110 2 Was this luncheon in what is knoun as the White

3111 House ness?

3112 A Yes. sir.

3113 8 Did Mr. Fischer retain privileges at the White
31 m House Kess after he resigned?

31 IS A I don't know. That's a good question. I don't

3116 know whether Hr . Fischer retained those privileges or not.

3117 e But you have no specific recollection of anyone

3118 from the White House being a participant in this lunch?

3119 A No. The only four people I remember being at the

3120 lunch are the people I mentioned. I don't know whether
312 1 someone came in and sat us down at the table and then left.

3122 S li you would--

3123 HR. HcGOUGH: Do you know if Hr . Fischer retained
312U his White House pass after —

3125 THE WITNESS: I believe he did.

3126 HR. HcGOUGH-' Did he use the White House pass to

3127 gain entry to the Whife House Hess?

UNCLASSIFIED

532

NAUE HIR212002 i1 ULHuU 1 1 I LU PAGE 128

3128 ^ THE WITNESS: I don't think so. You know, when you

3129 go into the White House, you have to clear a security on the
3 130 outside. Typically you do that by calling in to whenever is

3131 going to clear you. You give your name, you're cleared at

3132 the gate and, when you go in, you present some kind of

3133 picture identification at the gate.

313U I have no idea what he submits at the gate when he

3135 goes in. Once you're in the White House, you're typically

3136 met by somebody or you go into somebody's office and then

3137 proceed from there. But I never saw someone show a pass to

3138 get into the White House Hess.

3139 To get into the White House you just need to be
3 1140 cleared by anyone inside the White House.

3im HR. HcGOUGH: Did you ever see Hr . Fischer display

31 142 his pass during the meeting with the Harms or during the day

31>43 with the Warms?

3141* THE WITNESS: Ho.

3145 HR. ncGOUGH: Just a White House pass?

31(46 THE WITNESS: I don't think I've ever seen his

3147 White House pass, as a matter of fact.

SIMS HR. OLIVER: Isn't it true when you go to the White

31149 Muse Hess, you're given a badge?

3150 THE WITNESS: Similar to what you've got around

3151 your neck.

3152 HR. OLIVER: i>id Hi. Flschez wear a visitor's

ONCUSSiRED

533

UNtliSSlFlEO

NAME: HIR212002 lllllll HlllJll 11.1/ PAGE 129

3153 badge?

3154 THE WITHESS: I hav« no idea. I have no

3155 racollection.

3156 BY MR. FRYMAH:

3157 2 Turning to tha antry on March 19th, thara's a

3158 rafarenca to a naating with Hr . Luss.

3159 Hho is Hr. Luss?

3160 A Mr. Luss is chaiznan of San Diago Fadaral. That

3161 uas--that maating is totally unralatad to tha subjact ua'ra

3162 discussing, but it was an antry on ny calandar that showad

3 163 Dava Fischar and I includad it to arr on tha slda oi caution

316<4 in terns oi responding to tha subpoena.

3165 fi I show you the entry on March 13th, 1986. Could

3166 you read that entry ior the record.

3167 A Yes. Keed to firm up proposal with Conrad.

3168 2 What does that refer to?

3169 A I have no idea. I'a sorry.

3170 2 There is an entry on April 9, 1986, to a dinner at
317 1 Kaison Blanche. Do those initials indicate Mr. Channell and

3172 Mr. Fischer?

3173 A Looks to ae like SC and DP, although — I guess I
31714 {gfought it was, which is why I pulled It out of here. But
3175 it's not real clear to ne from that, but it could very well
3 176 be Mr. Channell and Hr . Fischer at the Halson Blanche.
3177 2 Finally, there is an entry on July 21, 1986, a

wtmmi

534

yNCUSSIFiEB

NAME: HIR212002 «,> 3 i] U«U9 %«^ Vf 1 ■ « B« »»' p^gj ,3^

3178 U:00 White House lunch or HH lunch which, I take it, neans

3179 Hhlte House lunch.

3180 A Correct.

3181 2 What does that refer to?

3182 A I don't know.

3183 Let me tell you what I did when I uas redacting, to
31814 share the process with you.

3185 Typically when I had a White House lunch, I put

3186 something next to it. In other words. I identified who I
3 187 was going with. On the two occasions that appear in the

3188 redacted calendars, there was nothing next to the White

3189 House lunch and I knew that I had gone at least once with

3190 Mr. Fischer and the Harms to lunch. I didn't know if that
319 1 related to this matter so I included it anyway.

3192 S All right.

3193 A I wish I could tell you more on that.

319U HR. FRYHAK: Why don't we take a break for less

3 195 than five minutes.

3196 [Recess]

ONCLASSiFiE

535

mkmw

mfimm

536

PliiliB

WiSSiREO

537

NAME
3722
3723
372U
3725
3726
3727
3728
3729
3730
3731
3732
3733
3731
3735
3736
3737
3738
3739
3740
3741
3742
3743
3744
3745
37U6

P»GE 152

Discussion off th« racord 1

OR. (1EEHAH; U« hav« gon« through a lot of personal
financial transactions with Hr . Artiano which ar« unralatad
raally to your investigation.

I undarstand why you had to asK than and I'm not
sura what is going to happan with tha transcript, but I
would request that staff 30in with ma, if tha transcript is
to be released, requesting that this portion ba redacted so
that It not ba any part of tha public record at any time.

KR. FRYHAN: Your request is noted and we will
attempt to comply with that request.

riK. HEEHAK: On that line, obviously, we are
concerned about the Kew York Times article yesterday in
which It appears that the day before ha comas up here to
testify, the article ran and that somehow inf ormation--it
certainly did not come from us or from anyone connected with
nr . Artiano--with respect to the fact that he would be coming
up here .

And so we are concerned about material leaking out

ky accident or for any reason, and this material, which is

M«lly totally unrelated to the investigation, it seems to

«• should not come out in any event, and ue request that as

the time and the report is prepared--! don't know that other
. \

people have had to turn over documents relating to their

mmwm

538

NAME^
37U7
3748
37149
3750
3751
3752
3753
3754
3755
3756
3757
3758
3759
3760
3761
3762
3763
376U
3765
3766
3767
3768
3769
3770
3771

HIR212002 yiiC^l^&i^^^--'

PAGE 153

(divorce in situations lika that, but to tha extant that in
his casa i£ a portion oi this is going to ba mada public, it
ba linitad to that uhich relates to the investigation.

MR. FRYMAM: As I say, your request is noted, and I
think it's a reasonable request, and ua uill attempt to
comply with that.

I would also just like to note that you and I,
prior to the commencement oi tha deposition, discussed the
Keu York Times article and I expressed to you my concern
about that article and I stated to you that tha first time I
had any inkling that tha article was coming was when I read
it in tha paper yesterday. If you have any Indication of
tha source of that article, I would Ilka to know about it.

I have discussed it with tha Chief Counsel of the
House Committee and I have expressed my concern to him about
that article. It is a discussion we had yesterday, and I'm
sure he would equally like to know tha source of that
article, and if you get any information I would appreciate
it.

HK. n£EHAN= Ue knew a day in advance because Hr .
B«xke was trying to reach Hr . Artiano — the man whose byline
la on the article. But certainly tha source or the idea of
tha article did not come from us. though Hr . Hibey did speak

with him when he reached him on the phone, though ha didn't

. i,

know when he answered" the call that that is what it was

SjtS (Is

^t.

539

fe^fiiJiiJu. /PAGE 154

MAHE: HIR212002

3772 abdut. But sons of tha mat*iial andad up in tha articla but

3773 wa don't know whaca or how it cana about.

37714 HR. FRYMAH: As I say, I shara your concarn.

3775 BY MR. FRYHAM^

3776 fi Lat ma just ask a faw concluding, ganaral

3777 quastions, Hr . Artiano.

3778 You hava indicatad that you racaivad approximately

3779 «200,000 from Intarnational Business Communications; soma of

3780 the monies that you racaivad, you relayed to Hr . Fischer

3781 pursuant to your understanding with him, and that some of

3782 the monthly checks were made payable to you and you then

3783 paid him a portion of it.

3781 Other than the monies that you relayed to Hr .

3785 Fischer, did you transfer to anyone else any portion of the

3786 monies you received from IBC?

3787 A Ho, other than the things we hava just gone over.

3788 I commingled that money with my personal money, with my PC

3789 money, and than spent it, as you can see.

3790 fi But other than that commingling, was there any
379 1 sharing of the proceeds —

3792 A Absolutely not.

3793 fi — from tha IBC contract with anyone other than Dave

3794 Fischer?

3795 A Absolutely none.

3796 HR. FRYHAH: Hr . Heehan, as I indicated, I will

?iC'^-SI

540

KAME:
3797
3798
3799
3800

380 1
3802
3803
380U
3805
3806
3807
3808
3809
3810

381 1
3812
38 13
38m
38 15
38

3817
3818
3819
3820
382

UNCL^SS./,

HIR212002 unUL^a^^^j^::,,;:. '*" '"

follow up with you with some writtan questions about sone of
the othei materials and the bank records.

I an hopeful that we can resolve those questions m
writing .

I have no further questions at this time.

In the event that we are unable to resolve them, it
may be necessary to resume the deposition at some point.
But It is my hope and expectation at this point that we can
avoid that.

MR. MEEHAN: Fine. Ue will attempt to respond
promptly to your request.

BY MR. McGOUGH:
2 Mr. Artiano. we spoke before, I believe, at the
interview .

When did you first inform your law firm of your
activities with or on behalf of IBC?

A I advised all of my partners of my participation
with Mr. Fischer on behalf of IBC early in 1987. I believe
It was January or early February of 1987.

2 So that would have been really a year or thirteen
months after you first entered into this arrangement with
Kx. Fischer; is that correct?
A That's correct.

S There was a period of time, was there not, when Hr .
Fischer was actually doi^g business from your office?

yi^SLASSiHS

541

KAHE
3822
3823
382
3825
3826
3827
3828
3829
3830
3831
3832
3833
38314
3835
3836
3837
3838
3839
38M0
38M1
3842
3843
3844
38US
38U6

JhW^ik^ki i; >.-.,■ PAGE 1S«

HIR212002 w.« w«i« a'<to'^>6«i i;*.^, pjge isg

A Theia was a period of tina uhan Mr. fischtti was
coming into Hashangton, using tha IBC oificas, and
occasionally coming by ray ofiica and using a sacond phona I
have in my office, which is on the opposite end of the room
from my desk.

He would come in for half an hour, 45 minutes, make
a few calls and leave.

2 Did you explain to your law partners who ha was and
what he was doing?

A ny law partners know Hr . Fischer.

2 Here they aware that you had any kind of business
relationship with Mr. Fischer at the tima ha was coming in
and using your ofiica?

A Probably not.

2 Can you tall ma. give ma an estimate of the number
of billable hours you reported to your firm in 1986.
calendar 1986?

A Ho.

2 Was it over 2,000?

A I doubt it. but it was probably around there. Ky
billable hours have been pretty consistent.

2 In the neighborhood of 2.000 hours?

A I think so. but I would have to go back and take a

look.

. \

2 During the first quarter of 1986, whan I believe

0^CLS3S^^"?tJ

542

name: HIR2,2002 U Nd ASS ^ H^ ^ P»" '57

38U7 iLou said your activity on bahali oi Mr. Channall's

38148 organization was most intansa--it would b« January. February,

3849 Harch of 1986 — did tha billabla tina you wera reporting to

3850 your firm drop at all?

385 1 A I don't baliava so. I would naed to go chack thosa

3852 records to give you a specific answer, but I was spending

3853 most evenings working on this with Hr . Fischer, and I was

3854 spending weekend tine working on it, and as I described in

3855 the answer to Mr. Fryman's questions, I was doing my best.

3856 I believe I accomplished the end, the goal, of not having it

3857 interfere with my activities on behalf of the law firm.

3858 e Did you have any other business ventures during

3859 that first quarter of 1986 that required any of your time?

3860 A nicrogravity may have been active fox me at the

3861 beginning of 1986, but I don't remember. That is a

3862 possibility, as well as Combs, which were both separate

3863 ventures. I didn't spend an extraordinary amount of time on
386'4 either of those matters.

3865 Those are the only two business matters I can think

3866 of.

3867 fi Can you tell me what your approximate gross

3868 receipts were from the Hicrogravity project?

3869 A ny personal receipts from that were about 46,000.

3870 Q And as far as Combs is concerned?
387 1 A About 5,000-6,000 approximately.

543

3872
3873
38714
3875
3876
3877
3878
3879
3880
3881
3882
3883
388U
3885
3886
3887
3888
3889
3890
389 1
3892
3893
389^
3895
3896

HIR212002 Wll Vlt>ir^'^'«^E2 t'^^'ijl PAGE 158

Q What col*, if any, did you hava in setting up
itaatings ioc Ms. Channall and/or his contcibutocs at tha
Uhita Housa?

A I knau that thay uaza intandad . I discussad than
with Mr. Fischar, with Ht . Hillac, occasionally with Mr.
Channell, and pachaps He. Conzad. Ha talkad about all oi.
tha things you would ocdinacily talk about in satting up
thosa typas oi naatings, about tilling, about claacanca
pcoceducas, about datas, thosa typas oi things. I had no
dicact contact with tha Hhita Housa.

S That was going to ba ay naxt quastlon.

Did you spaaK with oc communicata with anyona at
tha Whita Housa dizactly?

A Ko, sic.

Q He. Fischac handlad that and of it?

A Yas, sir.

2 Tha scheduling .

Did you assist in pcapazing any wcittan
descriptions oi He. Channall 's ocganizatlons oc his
contcibutocs ior submission to tha Hhite House?

A I believe I worked with He. Fischec in the
preparation of a itaaocandum ha sent to Chief of Staff Regan.

2 And that namocanduB desccibed. did it not, NEPL and

tha Amecican Consecvative Trust and their actlvitia!

. \

that fair to say]

UNCLASSiFiES

544

UNCLAS

513"^^.'^

NAHE: HIR212002

3897 -. A I have not saan that maaoEandum pcobably for ovat a

3898 yaaz, but I would guass that that's probably what was in tha

3899 mano.

3900 e In January of 1986 uara you awara that Hr . Channall
390 1 and his organizations wara raising nonay for diract

3902 assistance to tha contras, that is. monay to ba givan or

3903 passad along through intaritadiarias to tha contras?
39014 A Ho.

3905 C What did you understand?

3906 A Wa understood their role to ba a aadla-oriented

3907 role. Ha knew they were doing coaaercials. They were

3908 planning to do mora conmarcials . They were supporting the

3909 Administration policies in that respect. That is a fairly

3910 expansive way to go.

3911 I also — although I never was franKly real familiar

3912 with exactly how this was done. I knew that they were

39 13 providing humanitarian aid, or believed they were, for tha

39 1(4 Hicaraguans.

3915 e Can you elaborate on how you knew they ware

39 16 providing humanitarian aid?

39 17 A I read the formal packages that had been prepared

39 18 on behalf of NZPL prior to Hr . Fischer and I beginning our

39 19 consulting relationship with Hz. Miller.

3920 I was certainly present at meetings where NEPL was

3921 discussed, and these programs were discussed.

!^5 "SSIkO

545

NAME:
3922
3923
392U
3925
3926
3927
3928
3929
3930
3931
3932
3933
393<4

HIR212002

UNCLASSi^'^

i-^^J

PAGE 160

As I say, I don't hav« a spaclflc t«coll«ction of
any discussion of humanitarian aid. All of my lacollactions
go to madia campaigns. That was tha principal part of tha
conversation .

2 But you war* awara at laast on* facat of thair
activities was raising monay for tha supply of humanitarian
aid to tha contras?

A I beliava so. Had I baan askad at that tima, X
probably would hava raspondad that way.

e Do you racall whathar tha mamorandum you halpad
prapara for submission to Ht . Ragan includad any rafaranca
to that aspact of HCPL's activitiai?

A I don't. I'm soxzy.

■:^vJ

82-690 0-88-19

546

HKnZ HIR212002

393S

3936

3937

3938

3939

3940

39(41

39142

39143

391414

3945

39U6

3947

39M8

39149
3950
3951
39S2
3953
39SU
3955
3956
3957
3958
3959

PAGE 161
WIS HAZUR
DCMN BANNAK
14: IS

BY HR. ncGOUGH:
2 Do you recall anyone aver making a conscious
decision not to mention that appearance of HEPl's activity
at the White House?
A Ko.

2 Were you at all — involved at all in setting up
meetings with Charles Wick?
A Mo.

e How about with Attorney General Heese?
A In setting up that meeting.

2 In setting up the meeting. I know we won't go to
attending it.
A Mo.

2 You weren't the contactor involved in that?
A No. I don't believe so.

2 You were present, however, at a meeting with
Attorney General Meesej is that correct?
A That is correct.

e Can you describe what that meeting was about?
A That was a meeting attended by Dave Fischer,
Richard niller. Frank Gomez--I believe Frank Gomez was
there--flr. Channell and Hr . Conrad.

mwm

547

3960

3961

3962

3963

3964

3965

3966

3967

396

3969

3970

397'

3972

3973

39714

3975

3976

3977

3978

397<

3980

3981

3982

3983

398>4

HIR212002 ^'^^^Iti^i^^ij'f^'g^j "GE 162

This was m connection with the Constitutional
Minutes program. They were trying to get organized. They
had already done some preliminary — produced some preliminary
paperwork on, I believe — certainly in the form of a
description--a proposal for it.

They were interested in advising the Attorney
General and his staff that they were planning to do this,
and the purpose of the meeting was to let them Know that and
to seek any kind of guidance or help that the Justice
Department might be able to lend in terms of recommending
constitutional scholars that might help draft these
television spots and that sort of thing.

fi Do you recall who set that meeting up?
A I believe Hr . Fischer set it up.

2 Let's jump, if we could, to January of '86, where
in the discussions about the upcoming briefing at the White
House for HEPL contributors, I believe you said that in
discussions--whethet late in '85 or early •86--someone brought
up the possibility oi such a brieiing and it sounded like a
terrific idea, and you and Hx . Fischer pitched in to help it
happen.

Is that a fair summary of what —
A That's correct.

2 During those discussions was there mention — did
anyone mention to you'that there had been earlier briefings

mmi

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3985 at the White House?

3986 A As I indicated eailiez, X saw a — a folder.

3987 e Yes.

3988 A And in that folder, which had been provided to ma

3989 through Mr. Miller, he had received it iron Mr. Channell,

3990 I'm sure, or had prepared it for Hr . Channell with a stack

399 1 of letters, and the letters referenced meetings.

3992 There were letters commending Mr. Channell and his

3993 organization--meetings in the White House, and I had been
3991* advised either by Mr. Channell or by Mr. Miller, as I did

3995 Fischer, that they had had a series of meetings in the White

3996 House and that from this recollection that was substantiated

3997 in this packet of letters.

3998 S So is it fair to say when the idea of a briefing

3999 was discussed in late '85 or early '86, it wasn't a new
14000 idea; it was a variation on something they had done before?

400 1 Is that fair to say?
4002 A That's correct.

ii003 2 And what did you and Mr. Fischer bring to the

UOOU January briefing that was different in any way from what

4005 they had done before?

U006 A Hell, I don't know this for a fact, but I don't

U007 believe they had ever had a Cabinet Room briefing. Those

4008 are obviously difficult ,to arrange for a host of reasons.

4009 We discussed — precisely that, frankly, at the meeting, how

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4010 diificult that is to do, you knou, uhat would ba involvad,

40 11 uhat steps needed to be taken, the fact that we would need

40 12 to advise--iranediately advise the Chief of Staff and perhaps

4013 some people at the Kational Security Council--! don't

4014 remember who.

4015 But Dave and I, during the course of that meeting

4016 and afterwards at length f or--probably twenty occasions--
40 17 discussed it, and Dave went forward and we prepared the
40 18 memorandum to Hr . Regan.

4019 I know Dave spoke to Hr . Regan about this prior to

4020 that briefing and probably spoke to other people, although

4021 you have to ask him with who he spoke, and managed to get it

4022 approved and put on the schedule.

4023 2 You either stated or implied, I think, that it was

4024 in the course of discussing that Hhite House briefing that

4025 the idea of an appearance or meeting with President Reagan

4026 was first broached to you.

4027 Is that — am I correct or did I draw that correctly?

4028 A Ko, you're correct. That was the first time anyone

4029 had raised any kind of meeting or making the President

4030 available for any purpose.

403 1 fi Mhose idea was that? Do you recall?

4032 A You know, I don't. I don't remember who initiated

4033 it. We were kind of having a strategy session around the

4034 table and talking about the future of NEPL and what Hr .

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HIR212002

Channell hoped to acconplish. you know, getting soneone from
the Administration to voice directly to the donors that--you
know, this was a real important policy for the
Administration.

2 And I guess whenever it was voiced, everyone agreed
that would be a good idea, to have the President--

A Correct.

2 By that time you and Ht . Fischer had been on a
$20,000 a month retainer for a couple of months; is that
fair to say?

A For two weeks .

2 Two weeks .

A I believe. Approximately two weeks.

2 There came a point, did there not, when I think you
said the deal was renegotiated and--there was an agreement to
accelerate payments; is that fair to say?

A That's correct.

2 Can you be a little more specific about what the
payments--the new payment structure was to be?

A Hell, I can--the best I can tell you is this. The
payment structure--af ter the first arrangement which set
forth the »20,000 a month, «20,000 a month payment stayed in
a state of flux for as long as I was a direct participant in

any of those discussions.

. -i

By mid to the third week oi January it was clear

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HIR212002 UllljI_*Br;a^5g^-'.^^j- PAGE 166
that Dave Fischer was spending virtually full tine on behalf
of IBC. X was spending a lot more time than I ever dreaned
I would be spending on it, and Dave and I--to each other, and
I'm sure to Rich Miller--indicated this uas not anticipated,
that the fee structure would have to change and it would
have to be increased and indeed, as I've expressed earlier,
that both Dave and I were concerned about the fact this
would just stop as suddenly as it started, so we thought it
was wise to get an advance payment so we were not behind a
curve .

Q Do you recall striking an agreement at that time to
accelerate payments so that *280,000 would be paid over the
course of the next four months?

A No.

2 Uas there ever any agreement to that •ffect--I'm not
saying that was what the payment stxuctuze uas. but do you
ever recall striking that agreement?

A No, I don't.

2 Do you ever recall--do you recall what the
accelerated payment schedule was to be?

A Z don't think there was ever a specific agreement
about it. I— I know that Mr. Millar , at least at the
beginning, although I--at some point was not again directly
involved in these conversations--Has very amenable to the
re<iuest for acceleration of payments.

552

NAME
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k^l^ita^i^^iiLi'aiLi^ pjoE ,67

2 But let's get a little bit mora specific. Hhat
were you asking for as far as--I nean acceleration can mean a
lot of things. Hhat uas your proposal to remake the
contract ?

You had an oral agreement to take «20,000 a month
over 24 months. Uhat did you propose as an alternative in
January of '86?

A Two things happened at that point. One was first
the acceleration, and the number that Dave and I came up
with was »50,000 in terms of give us an accelerated payment
at the end of January or February, get ahead of us a little
bit, give us a check for 450,000.

S One S50,000 accelerated payment?

A Yeah. I don't remember if there was another check
during the course of the year for 450,000.

e I'm just talking about the proposal at this point.
I understand the deal continued to evolve as time went on,
but what I'm trying to do is get a snapshot of what the deal
was in January of '86.

A You've got the snapshot.

2 And what is that?

A The snapshot is that we asked for an accelerated
payment, an accelerated payment In the form of an amount
over and above the «20,q00 to be paid at the end of January,
the beginning of February, and advised Rich Miller that to

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UNCLASSlnE

M>*GE 16£

4 111
4 112

4 115
41 16
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41 18
4 119
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4134

the extent that the dedication of tim« was going to even
approximate what had happened m the first month of this
agreement, that--nurabe r s will have to be renegotiated out.
e I understand that.

Now, the payment that you wanted at the end of
January or early February was »50,000; is that correct?
A That's correct.

e Did you discuss any future--any other acceleration
at that time? Did you look beyond--for accelerated payments
beyond late January or early February?

A I don't believe ue did. If we did, I certainly
don't recall the conversation along those lines.

2 So you don't recall agreeing to essentially
compress the «280,000 over a four-month period?
A Mo.

2 Do you recall Hr . Hiller or--do you recall either
hearing from Hr . Channell or Hr . Hiller relaying to you any
requests by Hr . Channel! for — or any conditions by Hr .
Channell on that acceleration, anything you would have to do
for him?

A I'm not sure I understand your question.
2 Did Hr. Channell ask for anything in addition
to--anything in exchange for the accelerated payment?

A Ho. First of all, the question is not really
answerable because Hr . Channell was not the person with whom

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554

UNCLA3Sy';ED

MAKE: HIR212002 «J IV «# kri«^«#' M M ■ Aa W pAGC 169

4 135 vre had the financial atrangenent . It was Ht . Hillet.

4136 2 I understand that. But it is answerable in the

4137 sense that did Mr. Channell express to you, either directly

4138 or through Mr. Miller, a desire for anything in exchange for

4139 agreeing to concur in acceleration of payment?

4 140 A By concurring you nean that he was--he was making

4141 payment to Mr. Miller?

4 142 Q That's the explicit assumption, that Mr. Miller was

4 143 not the one bearing the payments.

4144 A I guess the answer is I don't Know if there were

4145 any conditions put forward.

4 146 I know that Mr. Channell certainly for the fir«t

4 147 several months and I believe thereafter was delighted with

4 148 the services he was getting, both from IBC and from the

4149 additional input of Mr. Fischer and myself, and I believe

4 150 was getting what he wanted from IBC.

4 15 1 fi Did Mr. Miller ever coma back to you and ask for

4 152 any additional effort or any additional commitments in

4153 exchange for the accelerated payment of «50,000?

4154 A Well. I'll be perfectly honest with you--and I'm not

4155 trying to not answer this question; I just don't understand
4 156 it. Mr. Hiller--the reason the accelerated payment came up
4 157 in the first place was because Mr. Miller kept asking for

4 158 more and more and more and more in terms of time and energy

4 159 and devotion to his business, and as a consequence of that

Q^^-r'p.r"'"^

555

HIR212002

m^mm

JJ PAGE 170

NAME

UUO ue said hey, why don't you guys get ahead of us on this and

U161 why don't you rethink these numbers because it's not going

14162 to uoik at 420.000 a month. I said this isn't the deal ue

U163 cut. this isn't the way we uant to proceed.
4164 Mr. Miller continued to ask ior lots and lots of

>4165 things over the course of the entire relationship. That's

14166 the best ansuer I can give you.
U167 2 Did you discuss scheduling presidential meetings

14168 with Mr. Miller?

14169 A Yes.

14170 fi Your ability to do that?

14171 A Our efforts to do that, sure.
4172 2 Or efforts to do that.

14173 Did you discuss the scheduling of those meetings in

141714 conjunction with the acceleration of payments?

14175 A No.

14 176 2 Old Mr. Miller ever come back to you and ask you

m?? prior--strike that; start again.

14178 Prior to agreeing to accelezata payments, did Mr.

m79 Miller come back to you and inquire as to youz ability to

U180 schedule four presidential meetings over the next four

14181 months?

m82 A You know, I don't even think I oan answer the

14183 question, and I'll tell you why. Hhen we sat down at a

UISM table with Mr. Fischer and Mr. Miller and perhaps Frank

UNCLASS^P^B

556

4185
4186
4187

4 190
4 19 1
4 192
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4 194
4195
4196
4197
4 198
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4201
4202
4203
4204
4205
4206
4207
4208
4209

HIR212002 UlQSj'L«%l^2/aik»E>PAGE 171
&«mez and myself, and we're going ovec all oi these things,
ue may have covered five or six subjects at the same
meeting. In other words, Mr. Miller may have come to us and
said, you know, gee, can we do this three or four more
times, and that would be one segment of a conversation, and
also can ue do this, this, this, and that would be another
subject, and ue may have raised payments at the same meeting
in the course of the same two or three hours or the same
breakfast.

You know, in my mind certainly those things were
never tied together. They uere all components of the
relationship .

C But they uere certainly all discussed in the same
time frame?

A I'm sure that they were all discussed in the same
time frame, yeah.

2 And presidential meetings never even was raised as
a subject until January of 1986; is that right?

A That's the best of ay recollection. That's the
first time that surfaced.

2 And it was also January of 1986 when you and Mr.
Fischer requested an acceleration of your payments; is that
correct?

A That's correct.

2 And the amount of acceleration requested was an

mam

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NAME^
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U2 12
1*2 13
U2 m
14215
LI216
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4227
4228
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4230
4231
4232
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4234

ONCLASl'.iiiiiJ

HIR212002 fcflPMII'II SJ»"V.--. ■ ! • . , ,^ fxGt 172
additional fSCOOO payment for th« month of January; is that
correct?

A Yeah. I need to looK at the records. I don't knov
whether they paid us 20 plus 50 or whether they paid us 50
instead of 20. I don't know.

2 Do you recall which it was?

A I don't. I can look at the records and tell you.

2 Why don't you do that. Has it 20 plus 50 or was xi

50-

jounced .

MR. FRYMAN: This appears to be the check that

BY MR. McGOUGH:

2 So it appears to be the 20 plus 50?

A Yes. The 50 was an accelerated payment.

2 Let me put this as directly as I can, and I realize
we are talking about conversations that Here all occurring
at or about the same time.

Did Mr. Miller, in substance, ever come back to you
and say before I accelerate or agree to accelerate your
payments, Mr. Channell needs to know whether you and Mr.
Fischer feel that you can schedule four presidential
meetings over the course of the next four months?

A I honestly do not remember ever hearing that from
Mr. Miller.

2 Or anything to that effect?

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4237
14238
4239
4240
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4254
4255
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4257
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4259

UNCLASSieED-

HIR212002 IBBWH.I M '^ "^ ,^ fii Li '-« '. -^p AGE 173

- A No. He had endless requests, endless requests from
Mr. Miller for the type of briefing ue set up and Hr .
Fischer set up in January, for more of those. And obviously
any time they can get the President at a function, what a
plus for Mr. Miller and for his client.

I don't--those were common conversations that ue had
regularly all of the time.

2 Do you ever recall him presenting it as four
presidential meetings in the space of four months?

A I don't remember. I mean, we talked about
different numbers of presidential meetings.

2 What numbers did you talk about?

A I have no idea. I don't recall whether we talked
about it--can we do two meetings in February, is it possible
to do three meetings the same month, you know, how far ahead
can ue schedule a meeting like this, how much notice do we
need to give somebody if we want to get them into
town--typical types of logistical questions and scheduling
questions you would ask ii you were undertaking that kind of
an assignment.

fi And these conversations — an I inferring correctly,
these conversations took place at or about the same time you
were discussing acceleration of your fee?

A He discussed t]>e acceleration of the fee in
January. If you're asking me whether we would call a

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559

NAHE: HIR212002 U PJ i* LHS^' '^ 3^ " ^^ PAGE 171*

4260 meeting and say tha sole purpose of this nesting is to

4261 discuss this--

4262 e No. I understand that. I'm not that naive.

4263 A --that wasn't the case.

"^264 e Hy question is, were these matters being discussed

4265 in or around the same time frame? And the matters are, one,

4266 scheduling presidential meetings and in particular hou many

4267 presidential meetings can be discussed, and. number two,

4268 acceleration of payments under the consulting agreement.

4269 A I can tell you that--both of those things, both

4270 acceleration of payments and presidential meetings, were
427 1 discussed in our meetings.

4272 I would be misrepresenting the truth if I told you

4273 I had a specific recollection about both of those things

4274 being mentioned within the scope of a single meeting or

4275 within the scope of two hours.

4276 2 But they were both mentioned in January 1986?

4277 A Unquestionably.

4278 2 To your knowledge, does Hr . Fischer know Ron

4279 Piccini?

4280 A I have introduced them. sure.

4281 2 And on how many occasions? Are they^ just passing

4282 acquaintances or--

4283 A Just passing acquaintances. nz . Fischer probably

4284 met Hr . Piccini at my house on a weekend.

MCLASS§FED

560

NAHE^ HIR212002

4285 -. MR. McGOUGH: I think that is all I have.

4286 HR. OLIVER: I will try to be brief. I just wanted

4287 to ask a feu questions relating to some of the answers you
1288 gave to Mr. Fryman, to clarify soite matters.

M289 BY MR. OLIVER:

4290 • 2 You said that you gave political advice to IBC, as

1*29 1 well as business advice and advice on projects and that sort

U292 of thing; is that correct?

4293 A That's generally correct.

42914 2 Is your political experience limited to the two

■4295 Reagan campaigns for president?

4296 A Hy--in terms of my acting in a full-time capacity,

4297 yes. *

4298 2 Were you considered an insider in the Reagan

U299 campaign because of your early activities and your longevity

14300 with the campaign?

430 1 A An insider meaning what? I'm not sure.

4302 2 I mean someone who is on the inner circle of the

•4303 campaign. You mentioned there were 7 = 30 meetings and you

43014 were one of the people who attended those meetings on a

M305 regular basis.

4306 A I certainly had relationships with several senior

4307 people around Mr. Reagan, had bean around myself since 1976

4308 and was fortunate enougl) to have been included in those 7:30

4309 meetings. So if that's the definition of an insider.

lillOLASSiiS

561

UNCLASSiFiED -- '

NAHE: HIR212002

4310 somebody in an inside circle. I uas that.

4311 2 You've indicated that you uere ask*d by Hr . Tyson

4312 or nr . Meese to come up from San Diego to set up a national

4313 advance organization; is that correct?

4314 A Right.

4315 2 Was that at the beginning of the 1980 campaign?

4316 A Yes.

4317 2 So that really would have been in 1979.

4318 A I'm not sure of the date. Could have been '79.

4319 2 Well, it uas before Hr . Reagan announced for

4320 president; is that correct? I aean. there would have been

4321 an exploratory period and a lot of things building up to the

4322 announcement of his campaign.

4323 A I tell you. I don't know the date. I don't know--it

4324 uas very early on. We did not have a national advance team

4325 put together.

4326 2 Did you travel on some of these advanced activities

4327 yourself?

4328 A I think only on one or tuo until a pre-conwention .

4329 I remember one trip to Denver.

4330 2 Did you ever go to Iowa?

4331 A This is in 1979. '80?

4332 2 1980 Iowa caucus would have been held.

4333 A I don't think so.

4334 2 But you remember the Iowa caucus in which Hr . Bush

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AGE 177

NAME: HIR212002

M335 defeated Mr. Reagan. That was a traumatic moment for the

U336 campaign.

4337 A Yes.

14338 I don't believe I Was there.

14339 2 But you were full time on the campaign at that
143140 point?

>43U1 A I believe so, but I need to check the dates here to

'43'42 make sure I'm right about this, because I might have--

i43<43 2 Did you ever go to New Hampshire?

4344 A Mo.

4345 2 You uere full time in the campaign by the time of

4346 the New Hampshire primary, when Hr . Reagan won that primary?

4347 A I believe so.

4348 2 Isn't it the case that right about the time in the

4349 New Hampshire primary that Mr. Sears was fired and Hr . Casey

4350 was named as campaign raanager--

4351 A That's correct.

4352 2 So that would have been Hatch of 1980. Then full

4353 time m the campaign from then until November 4th; is that

4354 correct?

4355 A That's correct.

4356 2 When you came to Washington in--after the convention

4357 in Detroit, you indicated that you were the deputy director

4358 for logistics and scheduling: is that correct?

4359 -A I think my title was deputy director in scheduling

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NAME: HIR212002 V II V kFl^^^' ■ ■ UP-*-' PAGE 17£

14360 advance operations.

14361 Q Who asked you to take over that job?
4362 A Mr. Tyson.

(4363 e Mas It also Mc . Tyson who asked you to be the head

U36U of logistics for the convention in Detroit?

4365 A Yes.

4366 e You also indicated that you had brought a debate

4367 consultant from Virginia into the caapaign; is that correct?

4368 A Although I'm not sure that Hr . Miles Hartel uas

4369 from Virginia. I'm not sure where he was from.

4370 2 Why were you bringing a debate consultant into the

4371 campaign?

4372 A I was just--was a matter of interest to me. I was

4373 concerned that we get an early start, a head start on the

4374 debates, and everybody was real busy and didn't have tine to

4375 focus on it, and I took it on myself to start looking into

4376 it and had an opportunity to have discussions with some

4377 people I consider to be knowledgeable and they, among other

4378 things, recommended Hr . Hartel, and I then looked into his

4379 credentials and was impressed and made the recommendation.

4380 It was out of my role.

4381 2 And you said you went to Bill Timmonds and Stu

4382 Spencer regarding that debate?

4383 A That's correct,

4384 e And the purpose oi that was to persuade them that

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NAME- HIR212002 ~ - ^ b^ VXGt 17<

4385 something needed to be done about debate prepaiat ion?
U386 A They had two purposes. One was I wanted to get a

4387 response from Bill Tiramonds and Mr. Spencer to see if they

4388 agree with my assessment that this was a good time to get

4389 started.

4390 I wanted to let them know what I had collected and

439 1 got done already and was trying to enlist them to spearhead

4392 this, because I alone couldn't havai catalyzed an early

4393 operation, debate operation, and I think I was partially

4394 successful.

4395 2 And you said earlier you remember two important

4396 meetings with Bill Casey, one of which he called you and

4397 asked you to come up and talk about the debate.

4398 A They were important to me because I remember them.

4399 The first meeting was one in which I guess after

4400 either Bill Timmonds or Stu Spencer called Hr . Casey and

440 1 told him that--discussed the debates and said Marty Artiano

4402 has collected all this stuff and he's interested, and Mr.

4403 Casey called me up to his office to eKplote it with ma, aird

4404 he said who have you spoken to and all, and I shared it with

4405 him, and, okay, okay, fine, I'll address this meeting, and

4406 so it was immediately out of my hands.

4407 It became a meeting that Mr. Casey and Jim Bakar--

4408 2 What were thos* matetials you collected?

4409 A Materials of public record, briefing books that had

UNCLASSIFIED

565

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NAME: HIR212002 —-- — —--— p^j.^. ,gg

Umo been prepared, for example, for President Ford that are now

414 11 at the library. I believe I even had sons from Mr. Carter's

UU12 campaign in '76. Different periodicals that I had

UU13 researched.

4414 e Did you have any briefing material that was

4415 prepared for Mr. Carter's 1980 campaign?

4416 A No.

4417 2 Were you aware of the briefing materials from Mr.

4418 Carter's campaign that came into the possession of Mr.

4419 Casey?

4420 A No.

4421 B You didn't read about that?

4422 A Well, I mean I was aware after the fact.

4423 e But you didn't know anything about it at that time?

4424 A No.

4425 2 You said that Bill Timmonds had introduced you to

4426 Elliott Abrams, to your recollection?

4427 A I think that's possible, yeah.

4428 Q That was during the campaign?

4429 A I think so.

4430 2 Has Kr . Abrams involved in the campaign?

443 1 A You know, I haven't spoken a lot to Mr. Abrams

4432 about that, ironically. I think that — I believe he was

4433 helping us in one of the campaign areas at the time, and I

4434 can't even remember what> whether he was working on the

UNCUSSlF'tD

566

UNCLASSiFBED

NAME: HIR212002 w ■■ w —■■■«»■ ^^ ■ ■ ■ ■■ air pjcg ,3,

MUaS Jewish vote or what exactly he was doing. But I know that

U1436 he had volunteered his services and was doing everything he

41437 could, and Hr . Timmonds thought highly of him.

uuas e He was a Democrat at that time, wasn't ha?

41439 A This was after his change of heart.

MUUO 2 You couldn't remember all of the names of the

UUUl people who were on the transition team Ed Folder and Frank

U14U2 Shakespeare headed. Uas Ken Adleman on that team?

'4'4'43 A Mr. Adleman might have been but I don't recall.

uyuM I should, :ust for purposes of putting this in

MMMS perspective, let you know when I got to Washington I

UUUS couldn't find my way from election headquarters to the White

(4(41(7 House. These names didn't mean much to me and I was kind of

1414148 scrambling around on my own.

1414149 2 You said that in late November or early December
MMSO 1985 you got a call from Rich Killer indicating that he
141451 needed some help with his organization and that they wanted
UUS2 a high-level fellow with Washington experience.

141453 Would you consider yourself someone with Washington

144514 experience of the kind that he needed at that point?

141455 A I think I probably--i£ you evaluate my experience

14456 and credentials, they fit soma of the criteria that he was

4457 looking for.

4458 2 And had Dave Fj.sch«t had any Washington experience

4459 before he came to the White House to work as a personal

UNCLASSIFIED

567

unclassif:cD

KAHE: HIR212002 »» - - w — p^^j ,33

UI460 assistant to the President?

446 1 A Not to ny knowledge.

4462 2 Had he been involved in any Washington activities

UU&B oc politics or Governnent besides that job?

MMSM A He had been involved, I believe, with Senator Hatch

141465 prior to--I believe with Hr . Hatch, but I'm not sure. He had

141466 some political experience prior to 197S, prior to l975--prior

141467 to hooking on with Mr. Reagan, or between '76 and '79,

141468 although I think the former is correct.

141469 2 So you felt that the experience that you and Dave

141470 Fischer had had in Washington fit the bill for what Rich

141471 Hanna wanted?

41472 A I think the cumulation of our exper ience--you know,

141473 when you're handling scheduling in advance for the President

144714 of the United States, you're an image-maker.

141475 The answer is yes.

141476 S Did you--how soon after you talked to Mr. niller did
141*77 you and Hr . Fischer meet with Hr . Channell and Mr. Conrad
14478 and Hr . Miller?

4479 A I can't tell you exactly. It was shortly

4480 thereafter, within a couple of weeks, I would guess.

4481 2 So it was in December of 1985?

4482 A Yes, I believe it was in December of 1985.

4483 2 And at that meeting did you discuss the

4484 arrangements for you services?

UNCLASSIFPEO

568

NAHE

MM85
UU86
4487

14U90
l4U9 1
UU92
4493
44914
4495
4496
4497
4498
4499
4500
4501
4502
4503
4504
4505
4506
4507
4508
4509

HIR212002

UNCLASSIHt.},.. ,

A At a meeting uith Mr. Fischer present and Mr.
Channell present?

2 Yes.

A I don't recall. Wouldn't surprise me if we did.
Our negotiations were with Mr. Miller.

Q They were not with Mr. Channell and Mr. Conrad
present at a meeting?

A No. As I said, they may very well have been
present at those initial discussions.

2 And did you discuss directly uith Channell and
Conrad what the arrangements would be, what services you
were going to provide?

A Uell, you know, the services we were going to
provide were as I've described them. There was never any
question in anybody's raind , from start to finish, that Mr.
Fischer and I were going to be working for IBC.

We also were made aware very early on that Mr.
Channell's organizations were a big client of IBC and the
thing needed the first thrust h«ie.

2 Well, isn't it a fact, Mr. Artiano, that the exact
amounts of money that were paid to you by IBC were paid to
them by Spitz Channell?

A I will give you a specific answer to that question.
Answer number Qne , I have no idea, none, how much
money was paid from Mr. Channell or any of his organizations

liNCLASSIFJB

569

UNCLASSIFSED.

NAME^ HIR212002 w ■ ■ w ■■■ B^r %# ■ ■ Mkb/pAGE ISU

4510 or anybody elsa, or any other client, to IBC. I have never

USll looked or had access to any of the books of all those

4512 organizations.

^SIS Huraber two, wouldn't surprise me at all if Hr .

MS14 Miller, to fund this obligation to Mr. Fischer and I which

■45 15 he had undertaken and which w« pzoc««d«d on in good faith

4516 without a written agreement, was funded in large part--and

4517 perhaps getting into a hole--by Mr. Channell . I don't know

4518 that to be a fact; I was not present in those discussions.

4519 2 Well, the reason I was asking questions about

4520 whether Mr. Channell and Hz. Conrad were present with you
452 1 and Mr. Fischer and Mr. Miller when you were discussing your

4522 services would be to--if your contract was with IBC, why

4523 would Mr. Channell and Mr. Conrad be present at those

4524 negotiations?

4525 A If Mr. Miller chose to discuss that matter in front

4526 of one of his clients, it frankly didn't concern Mr. Fischer

4527 and I.

4528 2 You ware not aware that ISC was billing Mr.

4529 Channell for the fees, exact amounts of fees that you and

4530 Dave Fischer were receiving?

4531 A Ho.

4532 Q You were never made aware of that?

4533 A No. But as I have indicat«d--no .

4534 S And you had nothing in writing with IBC, no

UNCLASSIFSED

570

UNCLASSIFSED.. ,.

NAME: HIR212002

U53S contract, no letters of agreement of any kind.

M536 MR. riEEHAN: Describe that. August, June or July

U537 letter of 1976.

H538 MR. OLIVER: I'm talking about prior to that time,

U539 December, January, February period.

US40 THE UITNESS: Ho, sir.

45141 BY MR. OLIVER:

45142 2 Did It concern you or Hr . Fischer that you didn't

4543 have some kind of an agreement because you wanted a long-

4544 term arrangement, not 3ust something that would be cut off?

4545 Did you ever ask for something in writing?

4546 A No, sir.

45"7 2 Was the lunch that you arranged with Elliott

4548 Abrams--did that take place on or about January 6, 1986?

4549 A I don't know, and I'd be surprised if it occurred

4550 that early, but it may have.

4551 MR. MEEHAN: Is it on the calendar?

4552 MR. OLIVER: i don't know if it is on his calendar

4553 or not.

4554 BY MR. OLIVER:

4555 2 Here you aware at tha tine of the luncheon that Mr.

4556 Fischer had begun to tzy to mak« arrangements with the White

4557 House for a briefing for Spitz Channell's organizations?

4558 A I don't remember the time frame so I can't give you

4559 an answer to that question.

UNCLASSIFIED

571

UNCLASSiFlLD

NAME HIR212002 UllVkn^^ll B k 1^ PAGE 18(

I4S60 ". I think I was auar«--uhenever Mr. Fischer had

4561 started that, attempting to get that accomplished, I uas

U562 aware of it.

US63 e Was there a discussion at that luncheon of the

MSe^ Central American Freedom Program?

MS6S A Of NEPL's program.

14566 2 Essentially what they call tha Central American

4567 Freedom Program.

US68 A As I indicated, Hr . Channell went through all of

M569 his organizations and activities.

11570 2 Did they shou story boards of the ads to Hr . Abrams

457 1 at that luncheon with text and so on?

4572 A You know, I don't recall. I honestly don't recall

4573 the luncheon that uell . I mean, I recall being there and I

4574 recall Mr. Channell did most of the talking, and it's

4575 possible that they had some paperwork or story boards, but I

4576 don't remember it. I'm sorry.

4577 2 Were you aware that one of Hr . Channell's projects,

4578 the one that I described as Central American Freedom

4579 Program, was directed toward influencing the congressional

4580 vote on aid to the contras?

4581 A My understanding of what Hr . Channell was trying to

4582 do was to raise grassroots support for the President's

4583 program through his med^a campaign.

4584 2 Was there ever any discussion in your presence of

UNCLASSIFIED

572

NAHE
4585
4586
4587
4588
14589
14590
<4591
4592
U593
1459U
"4595
(4596
M597
4598
4599
4600
4601
4602
4603
4604
4605
4606
4607
4608
4609

HIR2 12002

UNCLASSIFIED.

GE 187

itinning those ads in particular congrassional districts?

k I renenber being around, although I didn't--!
rereeraber discussions about where certain ads should run anc
about demographics. That uas less my area oi expertise, s<
I don't have real strong recollection about any of that.

S Do you know a woman named Eddie Frazier?

A No, sir.

2 Did you ever meet her?

A li I did, didn't strike me, I guess, because I
don't remember the name.

2 Jack Lichtenstein?

Drawing a blank.

Bruce Camran?

Ho, sir.

Penn Kimble?

I don't believe so.

Did you ever attend any meetings in Rich Miller's
office to discuss strategy on the vote that was to take
place in the Congress on contra aid?

A To discuss strategy on the vote? I don't--! don't
know. ! mean, we talked about the vote all the time. While
it was immediately before the vote, it was a matter of
concern to us, obviously. We were hoping that it was going
to go forward and ! don't remember having a strategy meeting
about it.

UNCLASSfF'ED

573

UNCLASSJFE3,..

HAHE^ HIR212002 '^ ■ ■ W fcf-l^#%Jf § fl lik,L>pAGE 188

14610
161 1
M6 12
U613

uem

4615
U616
46 17
4618
4619
4620
4621
4622
4623
4624
462S
4626
4627
4628
4629
4630
4631
4632
4633
4634

e Who did you discuss that uxth?

A Oh, with Dave, with Rich. It was obviously a
matter that ue were interested m.

2 Do you know Dan Kuykendall?

A I don't. I don't think I know hin . I know the
name but I don't think I know hin.

2 These papers and brochures that you said you
reviewed or helped prepare for IBC, did you retain any
copies of those?

A Ho . I had--the answer is no. I had--what I had at
i»y house--when Dave moved out of my house into his house,
kind of packed up everything, and I would guess that what
wasn't packed up I tossed.

2 When was that? Whan did Dave —

A January.

2 January of this year?

A December or January, yeah. December of '86 or
January of '87 — yeah.

2 That's your recollection, you threw those materials
away?

A I don't have any recollection. If there was
anything left after Dave moved out, it is not there now,
because I've taken a look.

2 Did you say that Hr . Fischer came to Washington
every week during 1987?

UNCLASSfF^Ef)

574

UNCLASSIFSEa.

HAHE: HIR212002 '^ ■ ■ W fcrM^#%#i i I^^^AGE 189

i«635 ~. A I would guess 95 peicant of tha tin*.

14636 e Has h« still enployed in Utah at that tin*?

4637 A No. Ha had soma kind of axrangamant, but ha was

K638 not enployad with Hudson Chemical at that point. He may

(4639 have had soma continuing relationship aitaiwaids .

146U0 e Hhy was — at tha meeting which you attangad in

U6>41 Elliott Abzams' office, why was Elliott Abrams upset with

U6(42 Spitz Channall?

i<6'43 A You Know, because he was very excited and wouldn't

(46t4i4 let anybody else gat a word in edgewise and was kind of not

M6M5 listening to an attempt to answer him. It was--

i46<46 fi Has there a discussion at tha luncheon which took

>46<47 place in January of--of tha arrangements for a meeting in th<

<46<48 White House later on that month, the meeting with Abrams and

146U9 Fischer and you and Killer and Channall?

(4650 A Could you repeat tha question? I'm sorry.

(465 1 2 You arranged a lunchaon with Elliott Abrams for

(4652 Spitz Channell attended by you and David Fischer, Elliott

M653 Abrams. Rich Hiller.

1465(4 Has there a discussion at that luncheon about the

U655 pzospectiva Hhlta House meeting?

(4656 A I have no recollection. I'm sorry.

(4657 Q Has there a discussion there about Hr . Abrams'

(4658 participation in such a White House briefing?

(4659 A I also don't recall that.

UNCLASS!F:E3

575

H»«E: HIR212002

OHOLASS^FiED .

GE 190

•4660 2 Did you have any discussion with Rich Wilier or

U66 1 Spitz Channell in December or January this year about your

4662 arrangements with them during the prior year for financial

4663 payments to you and Fischer?

•^een A I'm sorry, repeat the question.

"^665 . . 2 Did you have any discussions with Spitz Channell or

•4666 Rich Miller in December of 1986 or January of 1987 about the

•4667 financial arrangements which had been made for you and David

U668 Fischer with them during 1986?

■♦669 A Well, unless I*m--unless I've blocked something out

'4670 of ray mind, I haven't seen — didn't see Mr. Channell at all in

4671 that time period.

4672 2 What about Rich Miller?

^673 A I don't know. I certainly must have spoken to hire

46714 during that time period. I don't know — that I had any

4675 specific discussion about the financial arrangement?

4676 2 Yes.

4677 A Between IBC and Fischer and myself?

'*678 2 Yes. Were you aware that Rich Miller had been

4679 asked by Spitz Channell to reconstruct the relationship

4680 between IBC and Spitz Channell's organization in relation to

4681 what the money they had given them had been spent for?

4682 A Mo.

■^SSa 2 Did you have a,^ discussion with Rich Miller about

4684 the payments to you from IBC in January of 1987, about the

UNClflsqjrTn

576

UNCLASSIFIED

KAME: HIR212002 UllwLtfwwII IkWpAGE 191

U68S
4686
M687
>«688
>4689
U690
1*691
14692
U693
46914
14695
U696
14697
(4698
14699
4700
14701
14702
14703
I470U
14705
U706
4707
14708
14709

previous payitants?

A I guess ray best ansuer to that is I certainly spoke
to Rich--I'ii sure I spoke to Rich during that period of tme .
I don't even know if that uas the subject of the
conversation. If it was, I don't recall it.

MR. OLIVER: Thank you very nuch. I have no
further questions.

MR. BUCK: I have a few short questions for you,
Mr. Artiano.

BY MR. BUCK:

fi To the best of your knowledge, did anyone in the
Uhite House, any employees in the White House, including the
President himself, receive any money from Mr. Miller's
organizations--Mr . Miller or his organizations, Mr. Channell
or his organizations, yourself and Mr. rischer--for the
meetings that were set up with these private contributors?

A Absolutely not.

fi Do you know any reason why Hr . Channell would
believe that he was paying Hr . Hlllaz «50,000 for you or Hr .
Fischer or Hz. Hlller to set up meetings within the White
House?

A As I Indicated, I don't — I don't have any--never had
any access to their books and didn't know what their
financial relationship i^as . But, you know, it would not
surprise ■• if Hz. Millez weze Baking requests so that he

UNCLASSIFED

577

MAKE:
4710
471 1
47 12
47 13
47 14
4715
47 16
4717
4718
47 19
4720
4721
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4724
4725
4726
4727
4728
4729
4730
4731
4732
4733
4734

HIR212002

UNCLASS1F!ED.„

192

eould get funded at IBC to honor his obligations to Mr.
rischar and to ma .

2 Did you considar Mr. Channall poiitically naiva
when you--b«ior« that January naating uhan you had to discuss
with hin tha fact that you uara not arranging naatings with
tha President ior a sat anount oi money?

A Restate the question. I'm sorry.

MR. MEEHAN: I think tha meeting was not in
January, but if you just refer to • • the meeting'* without a
time frame--

HR. BUCK: Okay.
BY MR. BUCK:

2 I guess what I am trying to understand is why Mr.
Channell had this belief that you had to dispel at the
meeting, and if it wasn't anything you told him or anything
that Mr. Fischer told him or that you knew that Mr. Fischer
told him, was it just because he didn't understand how
things worked?

A I suppose it was a misunderstanding of the
relationship. As has been indicated, the relationship was
n*ver formalized in terms of putting it in writing. It was
oonstantly in a state of flux. There were continued
discussions and negotiations about it, the timing of
payment, amount of payment, and I guess it was--the generous
explanation is that there was just misunderstanding. But

UNCLASSIF"P3

82-690 O-88-20

578

UNCLASSIFIED

NAME: HIR212002 Vll VLfl V Vl I I LL7 '^^^ ^'^

*473S th*ra was no misundatstanding by myself or Hr . rischar, and

4736 I trust not by Mr. KilKr •itK«r.

14737 2 Okay.

4738 Did you raad a Kaw York Tinas articla on July 30th,^

4739 1987, on paga 10 of tha Kau York Tinas, writtan by Richard

4740 L. Barka?

4741 A I'm sorry to say that I did.

4742 e Tha sourcas idantifiad in this articla ara your

4743 lauyar and othar officials, and I baliava uhan it rafars to

4744 your lauyar. it is actually rafarring to a law partnar of

4745 yours.

4746 A That's corract.

4747 e And I'd lika to raad a statamant hara and gat youc

4748 raaction to it.

4749 Hidway down tha first column it says. Hr . Artiano

4750 and Hr . Fischar aach racaivad about «300.000 last yaar for

4751 arranging maatlngs batMaan tha Prasidant and waalthy

4752 consarvativa donors, tha officials said.

4753 first of all, lat ■• ask you. is that statamant

4754 corxact?

4755 A Ko.

4756 a Saoond of all, did you tall Hr . Barka anything that

4757 would laad him — that would giva him information to writa

4758 that? ^

4759 A No. Z rafusad to spaak to Ht. Barka whan ha triad

UNCIASSIREO

579

NAME:
4760
476
4762
4763
4764
476S
4766
4767
476
4769
4770
477 1
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4774
4775
4776
4777
4778
4779
4780
4781
4782

HIR212002

to reach na .

UNCLASSIFSED

PAGE 194

2 Hava you talked to yovi law vartimi thai did spaak
to him on this subject?
A Yas, I hava.

2 Is it your undatstanding that your law partnat gava
Mr. Barka any inioraatlon that would allow him to writa
something lika this?

A Absolutely not.

2 Do you hava any suspicions as to where that
information may have come from, if you or your law partner
did not tell this reporter that information?

A I have--! don't have a firm enough idea of where it
came from to want to accuse somebody of doing something like
that. We regret it and, as nr . Heehan indicated, I hope it
doesn't happen again.

MR. BUCK: X have no more questions.
HR. MEEHAK: He did get through.
NX. FXYMAN: Yes.

He will conclude the deposition at this point, in
accordance with the understanding that was stated earlier
katween Hz. Heehan and me.

(Hheraupon. at 5:<tO p.m. the deposition was
concluded. ]

UNCLASSIFSED

580

TORlaSEORET

HSITfi I ^ 1-

/87

THIS IS A COVER SHEET

FOR CLASSIFIED INFORMATION

ALL INDIVIDW^fflWDUN^^^^^^I^^P^^^^B«D TO PROTECT
IT FROM UNAUTHORIZED DISCLOSURE IN THE INTEREST OF THE NATIONAL
SECURITY OF THE UNITED STATES.

HANDLING, STORAGE, REPRODUCTION AND DISPOSITION OF THE ATTACHED
DOCUMENT WILL BE IN ACCORDANCE WITH APPLICABLE EXECUTIVE
ORDER(S). STATUTE(S) AND AGENCY IMPLEMENTING REGULATIONS.

Partially Oeclassified/Reteased nn /<kj»i88

unOer grovisions of E 12356

Oy K Johnson. Nalional Security Council

TOKiflifiBiT

, ,„. Pr.jcriwa By

ARO FORM 703 (

By GSA/ISOO

581

#^'

^0ifmim>

EXAMINATION

BY MR. KERR:
Q Would you state your full name for the record, please.

Q What position do you hold with the Central intelligence
Agency at the present time?

:!>

A The Associate Deputy Director for Operations.

A
Q You joined the Central intelligence Agency when?

Q would you trace chronologically your career with the Central
ntei I igence Agency?

ONCIASSIBB

Partially Declassified/Released nn 'uvJ i^n SB
under provisions o( E 12356
by K Johnson, National Security Council

582

A That's correct. And then I moved up to the Assoclatt

Deouty Director for Operations Job.

At that time you would have taken what had been Mr.

Juchniewicz's position?

A That Is correct

583

liNClASSlfe

^i^c^3

To 77^1^

UNCLASSIFIED

584

Q Anc^^^^^^^^^Hremalned In the Deputy position until

he succeeded you in April of 1986.

A That's right. The first of May. actually, end of April.

That ' s correct .

with regard to the way you handled duties as between

yourself and your Deputy, can you give me kind of an overview

of the allocation of responsibilities between yourself and

your Deputy?

A well, I have always taken the approach that the Deputy

has to be one's alter ego as far as being made aware of,

(XfvcK
being brought in, pr totally Interchangeable sort of duties.

In the press of work, part

and South A;

n an area like the Near East

585

UNCLASSIFIED

If, you know, if you're off for a weekend, or you're on the
seventh floor, or yourgout down here In a hearing and something
comes up, and the Deputy begins to handle it, then perhaps he
remains more or less the expert on It because he talked to the
people first, ilir; there Is no sharp division, though, unless
It was something that — for Jnstance,]

jrobably carried 90* of
the load on that Issue, which was one of our largest and
required a lot of effort and decisions and a lot of hearings
down here on the him. So i suppose i sort of specialized
Other than that, s i ncel

suppose I tended to push things having to do with the Arabs,
particularly those [ i na wdlfcie^ a little bit more his way.

But basically there was a fairly even distribution.

Q During the course of your tenure as Chief of Division,

were there any projects as to which you compartmented out

mean, you can compartment

UNCIASSIFO

oHCUssim

things for security, and you do a lot of that, but you don't

comoartment your Oeouty out, unless It's maybe a personnel
matter that might come ud briefly that needs to be resolved
and can't be spread around.

Q But you do not recall any projects that you were engaged
In as Chief of the Near East Division when, for security

you kep^^^^^^^^^^^out
A No, I do not recall any.

Q ^^^^^^^^Hhas indicated that, for Intents purposes
he kept himself informed of the same matters that you would
be keeping yourself Informed of. Is that essentially the way?
A Essentially, yes. That's right. Not perhaps in as much
detail, since if you don't speak the language, maybe you don't
deal withi

inquiry, can you tell me when you first came to meet Col
North?

A Probably, i don't remember exactly, but It would have been
sometlKM, I think a couple of months after I was on the Job.
So sometime in October, late October maybe, 1984. Because i
remember we had a problem dealing with terrorism in Lebanon,
and he took a great interest In the terrorist issue, and i
believe that was my first encounter with him.
Q Now that would have been on a working basis?

IINClftSSIRFn

587

UNCUSSIREO

A On a working basis, having to do with a possible activity,
uh. counter-terrorist activity. f

4 for lack of a better expression, operational activity?

5 A Not In the Intelligence and security sense. I was aware,

6 of course that he had played a role In the Grenada operation and

7 that sort of thing, but,

8 Q No, I'm thinking of operations In the classic sense.

9 A No.
-K) Q When did that first come to your attention that Coir North

11 was going to play or was playing an operational role with regard

12 to intelligence matters?

13 A wei I , let me think. l suppose it would probably have been

14 around the time of the Achllle Lauro incident.

15 Q That would have been early October 1988.

16 A That's right, I suppose, i wasn't In the country then, but

17 when I got back, I heard, you know, what the dealings were with

18 the Israelis, and how the matter had been handled out of the

19 White House rather than out of State or the Agency, and that.

20 Q ill come back to that in a moment. Were you aware prior

21 to that time of an operational role that CoC^North had with

22 regard to Nicaragua-Contra related activities?

23 A What I was aware of, and what generally sort of seeped

• icTNortr

UNCUSSIHFn

588

ONCUSSIFIED

1 around town, I suppose. Is that the whole private benefactor

2 activity and private Amerian, private money, volunteers, i don • t

3 know what. Whoever had things to do with helping the Contras

4 when we were not , ^(r that 01 lie was certainly one of the lead i ng

5 persons In the White House Involved In encouraging, going around

6 making speeches, basically encouraging, I suppose, people to make

7 contributions to support the Contras during that period.

8 Q What was the source of your knowledge about that. is that

9 basically read the newspapers?

10 A Sort of osmosis and read the newspapers, and then l remember

11 at one point, well, the committee staffers would make remarks

12 about this or ask a question, or, and I know It got things

13 raised to the point that I believe Bud McFartane came down

14 and talked to one or both the Oversight Comnlttees. l don't

15 know that, I remember that happening. So It was sort of the

16 general knowledge around town that this was going on and that

17 there w«re other people involved In It with him, perhaps more

18 directly.

19 Q Old you ever have occasion to talk with Col. North

20 directly about his activities relating to the Nicararaguan

21 Contras, or Indirectly, in passing, any conversation?

22 A Only Indirectly In the sense that I remember a

23 couple of times a terrorist incident would come up in the

589

UNCUSSIFIED

1 Middle East and there would be, you know, perhaps something

2 going to happen over a weekend, and I suppose the first direct

3 sort of knowledge was when he told me, 'You can reach me on the

4 Mhite House number and they will know where I am and I'M ca ii

5 you, but I'm going to be down South,' and down South' obviously

6 In the context he said it didn't mean down in North Carolina or

7 South Carolina. And, in fact, as i recall, there was something

8 that came up and I called, and he called me either from the Miami

9 or the Atlanta airport. Apparen^^\ he had called the White
^...■"fO House and they would say^^^^^^^^Be^i-ed and said can him at

11 home. So I knew that he was travelling down there, but 1 did not

12 have — I don't ever recall any direct knowledge of any particular

13 activity, or him describing It to me, or ever having knowledge

14 of It.

15 Q This telephone exchange relating to him being down South,'

16 approximately when In time did that take place?

17 A Mel I , there was always something happening in Beirut on the
13 weekend. it would have been sometime in probably that winter of

^ 1-9 ■ 84 or '86. I don't have good, ^i D\jt l know that he took more

20 than one tr ip, ^'cause a lot of times something would come up--a

21 terrorist Incident — he usually came and sat on this working

22 group, and he wouldn't be there, and someone would say, "Well,

23 he's off on a trip and he'll be back. He was always on the go,

m%\mm

590

UNCUSSIFIED

and a lot of it. to the South.

•9 I n Col'fNorth ' s

Q Your phone number appears In Col'^ Norths collection of
telephone numbers-. Indicating that he must have called you or
spoken with you with some regularity. How frequently were you
In touch with Co I'-fT^iorth In the '84 - '85 period, before the
time he left ae i uh i ^-^y

A It moved In spurts. I'd say In the summer of '85 at the
time of the TWA highjacking probably there were a lot of calls
over a weekend.

three or four calls on a weekend, but I might not deal with
01 I le for a month or two months or even three months, other
than bump Into him at some meeting. So it was very much a
function of the activity that might come up.
Q As between yourself anc^^^^^^^^^^H was there any

distinction drawn between you
care of CorNorth?

terms of who would be taking

A No, I'd say not until the finding of January of last
year, when we began to work more Intimately on vn^ specific
project, namely, this arms^-e>^ — —

That would be the January

I98S memo.

A That 's r Ight .

ONCLIlSSinEO

591

UNCLASSIFIED

Q And at that point, uh, was tnere an allocation of roles

2 assigned between you

3 A Well, by virtue of the--l need to tell you what haooened ,
the way it worked. I was th ere as Division C hief. I left on
tr ipi

^and when i got back
n the office, and i had had foreknowledge
before l left that there was something cooking in terms of the
White House NSC trying to work out a deal with the Israelis
and Involving some other people, but i didn't know there was
going to be a finding. And when I got back, I was told the
finding had been signed and that Cla I rdTand^^Bhad gone down
to read It, that our role was one of logistics, financial.
sort of Intelligence support, and that things had moved to the
point that, you know, we were deal I ng with the ml i itary about
some weapons and so forth. Slnce^^Hwas so deeply involved
In this at that point, that largely became his baby. m fact,
the last, I suppose, three months of my tenure in NE Division,
that's when the balance shifted perhaps, and I suppose. ^^^H

UNCIASSIFIEO

592

■«msff®

1 spent, ah well, he still certainly performed his role as

2 Deputy, but I suppose he spent, gee whiz, some weeks a hundred

3 percent of his time on this, and other times, I don't know,

4 fifty-sixty percent. So. In that sense, there was a role

5 division the last three, three-and-a-half months.

6 Q Your Involvement from that point on would have been

7 nominal, relatively nominal. You were keeping posted. What

8 would you describe It...

9 A Keeping posted. ^^^Hcame to me at times and said,

10 "Look, there are going to be a lot of details here that i,

11 ^^^^Bcan't handle because It's homework. It's calling the

12 military trying to figure out which serial numbers match

13 what, and what Is it these people are talking about because

14 It gets one list or request and then you get a nother one."

br I ng^^^^^^^^Hi n

16 So, s I nce^^^^Bhad been peripherally In on It Interviewing

17 this fellow Qhorbanlfar earlier. And so we got^^^Vin on

18 It. I think maybe he brought someone else on i t at some

13 point, but t was aware of that, but I was generally briefed

20 on I t . That's right.

21 I did encounter Oi I le after that — Oliver North on other

22 Issues.

23 Q I'll return to that in more detail a little later, with

UNCLASSIFIED

593

mism

egard to your trip o«

you were on

a trip with Director Casey?

A Part of the time. l rendezvoused with Director Casey in
^^^^^^^^^Hcame back^^^^^^^^^^^^Hw I th

Q III return to that in chronological sequence. with regard
to Director Casey, can you tell tne when you first came to meet or
know Director Casey.

A We I I , I met him when he took over from Stan Turner in I98i .
I was still at HeadquartersI
Q You did not know him before he became Director.

A [P»u«« No aud m I fr nnt*"*' . ]

Q Can you describe your relationship with the Director
prior to the time that you became Chief of the Near East
Division, In terms of the working relationship. how often
you dealt with hlw, those klnds^of things?

muivm

594

ONCLASSIFIED

O After you took over as Chief of the Near East Division.
can you describe for me the extent to which you would have
been in contact directly with Casey?
A well, It varied. On^^^

Ich he took an Intense Interest,
there would be a tremendous burst of activity. You'd be
getting ready to flo on a trip. In fact, we went on a trip

and I suppose that s when i really got
to know him, travelling on an airplane with him, and i0^
dealing with him on that Issue sort of non-stop, pressure
cooker, which was his approach to things.„-i^» for__three,
four days. And so I got to know him pretty wellT'^He was

It, a Division Chief, I mean. In the Near
East being a very active area, he was always calling witr
questions. So i suppose I saw him — It was rare that I
didn't see him once or twice a week.

During the course of that experience, on that or any
other time, did you get any sense of his relationship

IJNCIiSSIFIEfl

595

wmi\m

tn Col . North?

A well. I knew he talked to him on the phone. I didnt
get any sense of any personal relationship. He admired Oi tie's
can do' attitude. I'd say that. A proactive approach to life,
which Is exactly what SMI Casey had.

Q Did you have any sense of the frequency with which North
and Casey were meeting.
A No.

Q You were or were not aware that they would meet for
breakfast on weekends and that sort of thing?
A I was not aware of that. Usually when I heard about it
was when Bill had gone down to the White House to see
Polndexter or somebody, and he would say, 'While I was down
there, I saw 01 Me and this happened or that happened.'
On how many occasions did you travel
wi th the 01 rect

596

UNCLASSIFIED

Q With regard to^^^^^^^^^^^^^Htr I p, who accompanied
8 you and Director Casey on that trip? Who else was with you?
9
10

16 Q Old you have any knowledge of discussions that Case>

17 or anyone else in the group had witr
^^^^^^^^^^^^^^^^^^^^^^^^^^^■about contributing money for

19 the benefit of the Nicaraguan Contras.

20 A No.

21 O So there were no meetings that you attended on that trip

22 [ in auJ I U te]. '^ i<^c/^ r«dO( r

23 A That's correct.

well, that's one of the toolcs I wanted to touch on with
you. There is a reference in a McMahon note to what may be
a suggestion that Casey was going!

^^^Hto ask^^^^^^^a contribution to the Nicaraguan-contras .
Were you aware of any such?
A No.
Q You're not.

A No.

w h e n^^^^^^^^^^^^^^^^^^^^^^^^^^^^l y o u
were not privy to any conversations in which contributions by

■to the Nicaraguan Contras was discussed?
A That's correct.

Q on the^^^^^^^^^Htr ip, any

^^^^Hcontr ibut ions to Nicaraguan Contras?

ICIASSIFIED

598

yilASSlFIEfl

1 A No.

2 Q And you didn't hear any discussions taking place on

3 that trip?

4 A That • s r I ght .

5 Q And on the^^^^^^^^f tr I p , any such discussions?

6 A No.

7 Old you ever acquire knowledge that Director Casey

8 solicited funds from!
^^^^^^^^^Hto the Nicaraguan Contras?

10 A No .

11 Q And you never discussed this matter with Mr. McMahon?
.J^ A J^ nuse. — Ua au d t bi e Tesponae ri —

13 Q What was your relationship with McMahon? McMahon had

14 been with the Agency for quite soma tlme--had you had a

15 chance to work with him?

16 A I had worked with him when he was Deputy Director

17 for OD«rations. That's the first l ever heard of him
^^^^^^^^^^^^^^^^^^^^^^H I n He

19 made 000 sometime earlier that year, and so the first

20 time I ever even met McMahon wa:

21 ^^^^l^h or about July 1978. i think I had a good working

22 relationship with him. I admired him. And we travelled
23

together on a couple of occasions.

liCIASfJIFirn

599

lUSSinED

'But I never had any
Intimate, personal, family relationship.
Q So he was not a social acquaintance. it was a
professional relationship. Alright, now let me turn to
another interesting gentleman — Manucher Ghorbanlfar was
the subject of concern in the Near East Division in 1984.
Much of the concern would be generated shortly before you
became Chief of the Division. Can you tell me the extent
to which you were familiar with Manucher Ghorbanlfar and
the matters which caused the Agency to put out a burn
notice on him in 19847

A I think that burn notice was put out In August or
so , ^^^^^^^^^^^^^^^^^^^^B I seeing

the burn notice at that time, when t was briefed
generally, well. I was briefed specifically on the

land so forth as part of my Division,
[operations and threats and that
sort of thing. You know. I suppose In that briefing
probably there were half a dozen or more dirt balls
of the fabricator variety that would pop up. And i
had been dealing wl th^^^^^^^^^Hj^Hf or
years, and his name may have been mentioned at that
time, because I do recall that it was somewhat familiar
the following summer when It first popped up on the

•%*a

MWIFirn

600

liiussra

screen. And then sofnebody said, "Oh, he was a guy
that, you know, he said there was a threat against the
President and this and that. And so, I remember at that

time It clicked. Of course, it may have been a generic

thing, '^ause there are lots of Iranians. But I was not

familiar with those aoecific events, but i did hear about

them later, the things that had caused the burn notice to

be Issued.

Q Just so I'm clear. The decision to put out the

burn notice and the Inquiry that gave rise to it all preceded

your taking the position?
A ■t*tj\. I

woudn't make the decision on the burn notice
anyway. I mean, that wouldn't be approved by me.
Q That Is a question I want to raise with you. I'm not
quite sure how one gets a burn notice approved. What is
the process on that?

CLASSIFIED

601

liNWSsra

Q That's right. As to Ghoreani

category he fit In In late-19847

A I didn't know at the time. No. But it's when i read

the burn notice — It's pretty clear. The following summer.

or whenever I read it, it's pretty clear that that was ♦*«

MtAe-r "•

Q Give me your best recollection of how you would
characterize him at that point. 1 read that burn notice,
and I'm not as familiar with what you guys were looking for

\m m\B

602

ONCUSSIFIED

1 as you are. So what would that have told you about

2 Ghorbahlfar? Simply that he was a Mar. or that he was

3 a Mar with a motlv^e?

4 A A I lar with a profit motive, proBaBiy. Although,

5 sometimes it's not clear. i mean, I've run into dozens of

6 fabricators, and some Me for the sake of lying; some lie

7 for purposes of feathering their own nests and working out--
— 8 they're con men. "»n>-4frid occasionally, there may be some

9 Idc^aloglcai motivation. But, that's very rare. But he's

10 Jusc, he's not an atypical Iranian bum who, you know, made

11 his living as a police Informant. Savak Informant. Israelis.

12 I'm sure he worked with the Israeli shipping companies.

13 I recall back In the revolution days, and probably been

M associated with the Israelis since that time.

15 Q Let me take you into the summer of 1985. At that

16 point, June of 1989, you apparently were advised by

17 Director Casey that he had been called by a gentleman

18 named John Shaheen, who had that story to tell about

19 Cyrus Hashemi and a program Hashemi had for releasing

20 the hostages and releasing himself from prosecution. Oo '

21 you reca I I that?

22 A Yeah, I recall that. ^^ ^^, | f p^^^o o^oc.w..^^ T^ ^ ^c^^c^
J.2 Q Can you tell me. and y e u'Fe f r e e to [ I nn ii ri i b i w) -r-~

yHCLASSIFIED

603

mmmis

1 but give me your best recollection of how this matter came to

2 your attention in the summer of 1985?

3 A Shaheen , John Shaheen called Casey, which was not unusual.

4 Shaheen was always calling Casey. They're old, they were old

5 OSS buddies or something. Shaheen was born In the same town

6 that Ronald Reagan was born In, I think. He's a very patriotic

7 American. tHiiThad a lot of contacts. He was always giving

8 Bill Casey hot tlos on this or that. And he'd call Casey,
.^-'^''^ yt

9 and then Casey sent me a note, as I recall, and It was well

^^0 knowAwhat sort of fellow Hashemi was and what h l^s motivation was,

/^^l and I think he had been cut off once before aaf [y on with some

^,->«^ scheme, talking about ransom for the hostages T^Th i s time he

scheme, talking about ransom for the hostages.

13 claimed to have the contacts with the Iranians at some fairly

14 high level, and I w«nt to State. i told Casey, I said, "We

15 won't approve this one this way dealing with this guy. if he's
18 really In touch with someone who represents the Iranian

17 Qovernnant or who's in the Iranian Qovernment, then they ought

18 to be, and they want to talk, then we ought to get State in on

Q
..i^— It and find out, you know, how we ought to handle it. i went

20 to see either Dick Murphy or Arnie Raphael. i think i tried to

21 see Dick Murphy, and then I may have seen his Deputy, A rh ie

22 Raphael. And we worked out, they worked out, we talked about

yNGiASsra

604

UNCLASSIFIED

It. They also knew about Cyrus Hashemi. i mean they had. you
know, the burn notice I think had been run on him. I'm not
sure of that. But, at least, somehow he'd come to their notice
on one of these previous schemes. Maybe about the thing he'd
been prosecuted for/y^ i guess illegal export, or something or
other. And so, what they worked was through our Embassy^^^^^f

»here he claimed to be able to — of course, these guys,
"fabricators or con men like Hashemi or Shorbanifar, they always
want to. they gotta do something right nowjy'" The moment you
hear, the guy's coming on Wednesday. So he claimed that he
could produce an Iranian, very senior level importance, and
Join with me very quickly. So, State's position was, "We're
always ready to liste n, but we are not sure we want to go
this guy . "^^^^^^^^^^^^^^^^^^^^^^^^^^H because
the mention of the Red Cross had been made since it involved
hostages .

^^^^ig^^t^^S^^rTToS^^Msten to what
this sanlor Iranian has to say about iran-U.S. relations
and what influence they might bring to bear to get the
hostages re I eased .^^ So that was set up, and a phone number
was given i think to Hashemi to call and, of course,
nothing ever happened. I mean, nobody ever showed up.
However, his lawyer, who was Eiiiot Richardson, did call

UNCLASSihED

605

BNCUSSIfe

^^^^B- 1 don't remember whether I went oot of town, had gone
on leave, or wa3--somehow or othcr--oh, i know what haooened .
In order to get the details of this after Casey sent me the
note, and I talked In general principles to either Dick Murohy
and/or Arnie Rapl^ae I .^^^Bthen went up to New York and talked
to Shaheen to get the details, to get names an so forth. And

the name o^^^^^^^^^^^^^^^^^^^^^^^^^^Bwho
In later events of course, and the name Manucher . and that's
a fairly common name, as I recall. I'm not 100% sure, but
we fairly quickly established it was Manucher Ghorbanifar.
Or likely to be him. Or maybe even Shaheen said, had his
full name. But whatever it was, we talked with State, and
the deal was set up that i f^^^^^^^H who was identified by us
as a bona fide Iranian official at some level. i don't remember
exactly the level, but fairly senior. If he showed up. the

would be happy to talk with him
and listen to what he had to say about iran-U-S. relations
and th« hostages, but that they would not se« this guy.
Manucher Qhorbanlfar if he alone came along with Hashemi.
And then, as I recall, s i nce^^Hhad met Shaheen, that was
probably why Elliot Richardson had caiie(^^^K>n the phone
one day and said he represented Cyrus Hashemi and he understood
that something was being worked out with regard to nolle pros

yNCL/l<:.^lF!Pn

606

mmm

on this case against him. an<f^fended it off at arms

2 length and said he would have to talk with somebody else.

3 no^e. It was obvious that Shaheen had given Hashemi
^ ^^^■chone number, or he had given it to Elliot

5 Richardson or somehow Elliot Richardson had gotten It.

S Q I want to go back on a couple of things and show

7 you some documents. With regard toKls initial contact^^-^S^

8 did you have a meeting with Casey? Casey brought you in

9 and told you John Shaheen has told me x. Y. and Z. that

kind of thing, or did he Just send you a memo?

1 A As I recall, he sent me a memo, and he may have
been going someplace or. you know, he went out of town

13 for the weekend a lot of times. l don't remember. He

M sent me a note, though. i remember that.

15 You had had other notes come from Casey by way

16 of Shaheen, from Shaheen by way of Casey?

17 A I don't recall having any other notes. i recall

18 Shaheen coming up with this or that or some other

19 possible lead into information about the hostages.

20 etc. . etc.

21 O were you aware of Shaheen's relationship to a

22 gentleman named Roy Furmark at that time?

23 A No.

24 Q You were not aware In the summer of 1985 that

607

UNCUSSinED

1 Furmark was a business associate of Shaheens.

2 A I never heard of Furmark until It was In the

y newspaoers when I deer hunting Xrrf end of November^^ u<-/'^^

,-¥ The first time I ever heard of Furmark.

5 Q Similarly, you were not aware that Furmark,

6 Mr. Shaheens business associate, was a partner of

7 Manucher Qhorbani f ar , Adnan Khashoggi and Mr. Hashemi

8 in a venture to sell materials to Iran In the period

9 January through August I9B17

10 A No .

11 Q During the course of these discussions, Ghorbani far ' s

12 business relationship with Furmark — the one with Hashemi

13 and those people — it was not discussed at allT

14 A In the course of which discussions?

15 Q The discussions relating to what Casey told you in

18 the June, July. August period. Let me give you a better

17 question. in that period of time, June, July, August, was

18 It brought to your attention that Ghorbanifar had a business

19 relationship with Hashemi or Adnan Khashoggi?

20 A Not with Adnan Khashoggi. but since, no, but he had some

21 sort of legitimate or otherwise business relationship, but

22 an association was established, because Hashemi said this

23 fei low^^^^^^Hwas coming, and the .other guys name was

24 Manucher. And we checked that, as l recall, so obviously

l!Nf!IAJ;.<JIFIFn

608

UNCLASSIFIED

1 there was a hook up tjetweeh Hashemi and Manucher . which ought

2 to b9 not surprising since they're both Iranian.

3 Q Was It ever explained to you how Shaheen came to come

4 by this knowledge that Hashemi was Interested In putting this

5 deal together?

6 A Hashemi had told him this.

^7 Q Did he tell you how It was that Shaheen would be in contact <^^

8 Hashemi .

^9 A . ih the spot oil market or some other shady international

10 bus I ness deal . But 1 1 didn' t come to my at tent Ion sped f leal ly .
Q was you to but^^^^^^^^^B

12 A That's correct. He went up to New York and got the details

13 of this thing, as I recall, and I talked to State, and again.

14 I think I went out of town, because l th l nk^^^Btalked with Arnle

15 Raphael or maybe with Dick Murphy — they were our counterparts

16 at State — and confirmed that, okay, if there's some. If the

17 people had something to say. And I talked with Casey once

18 more about It at some point by saying, "BIN, this Is the

19 way to handle It. we don't want to get into all this 'Who shot
_20 John?' » n ^ d ea l ">< th these guys. If they come forward and have

21^ something I eg 1 1 imate. ^and this guy^^^^^^^^' ^ou see, the

22 thing about Shaheen and other guys — they have a lot of contacts —

23 and they come up and It would be a tantalizing sort of thing.

UNCLASSIFIFn

ymssiFe

1 I mean, the Idea was the guy has access here, and that would turn

2 out to be true, and you needed, you had to explore, but you nad
3^ to exDiore It. but you had to be very careful -t-f' you did if, or

A you'd get involved with another fabricator or swindler, you know.

5 Because the further you unravelled the thing the wormier it

6 became. But. once In a while we'd have a contact that would

7 make sense.

8 Q Did It come to your attention during this period of time

9 that Mr. Ghorbanlfar, as reported In his 201 file, once said that

10 ^^^^^^^^^^^Hwas Involved in the kidnapping of Mr. Buckley?

1 1 A I don't recal I that .

12 Q 1 d^^^^^^^^^Hcomm 1 1 to writing what he learned in his

13 Interview with Mr. Shaheen? , ,

14 A He committed to wr 1 1 1 ng--;>*n, I don't know whether or not -
15^ ^^"^1 remember him later committing to writing sort of how the

16 thing was being handled, and what, you know, once we talked

17 with State and had the deal laid on that State would talk with

18 ^^^^B I remember^^^Kirr 1 1 1 ng something saying, 'I called Shaheen

19 and told him this, -«aL thatHasheml Is serious and he can
-20 really produce these people, **»* he should i >fct -ni c call this

21 number, and they'll be met." And he also told Shaheen that.

aprr about the dea I ,HH^H^H|^H f i ne,

23 because he had been proven to be a bad character and not

82-690 0-88-21

610

UNCLASSIFIED

1 worth deal Ing with. Ahd so I remember t h a f he wrote that dowr

2 Q Do you recall aporislng Mr. Casey of the fact that

3 Manucher Qhorbanlfar was indeed someone that Operations

4 preferred not to deal with?

5 A Yes.

6 Q And you would have told him that approximately when,

7 sometime In the June or July period?

a A Yeah.
9

Jtk^Q

10 A I don't recall. It might have been on the phone.

11 It would have been sort of, "Hey, Bill, we have traces on

12 this guy. He's a bum." That sort of thing.

13 Q Do you recall anybody else that would have been

14 present when you related this to Mr. Casey?

15 A No, I don't recall relating It to him face to

16 face.

17 Q I see. You do think It was conveyed to him?

18 A Oh, y«s, because If Bill Casey got a lead on something

19 from John Shaheen or anybody else, he didn't let go of it,

20 and you didn't Just forget about It. You responded and you

21 explained to him the why and wherefore, and in this case,

22 why it would have been a dumb Idea to have done It otherwise.

23 Q Let me show you a memorandum dated June 17. 1985 from

611

ssro

1 Mr. Casey, aooarentiy to yourself which would be Exhibit i

2 of your deposition. Would you review Exhibit I and ten me

3 first If you recognize that document?

4 A I was talking about--

5 Q This would have been the initial memorandum from Casey

6 to you relating his conversation with Shaheen .

7 A Shaheen. that's right. That's right.

8 Q And does this review of that document given you any

9 further recollection on this Initial phase of this that

10 you haven't testified to.

11 A No, as I say. there was ne'^er any, you know, sort of
follow up. At least not as far as

know. I talked to State and It was a question of allegedly

14 talking about a change In policy here, and the usual boiler

15 plate of, you know, release the prisoners and provide weapons.

16 They were always--the Iranians were always looking for weapons.

17 It doesn't raise any additional Inferences.

18 Okay. Now. In terms of following this along. This document

19 Is dated June 17, 1985. We have a document we have obtained

20 from the State Department dated June 22, 1985, and I want to

21 apologize for the wretched quality of the copy. State's copy

22 machines aren't nearly as goo d as^ uh-
. — 23 A Is this a telegrami

^--24 Q MJiu^he first Is a memorandum from Mr. Murphy to Mr.

gob s

_25- Armacost. The second Is a cable to V au g h n ( ep Z ^- -^

— ?«■' A That would have been in i-i-m^rr&fWTeT'-

ilNCLASSIRED

612

UNCLASSiFiED

1 What I'd like you to do is take a look at what

2 would be Exhibit 2 and do the beat you can to read

3 the wretched quality and we'll see where that takes

4 us Just In terms of chronology.

5 A orelimlnary question will be whether or not

6 you have seen this document before.

7 A I do not recall having seen it, but I recall

Is.

S. the details of % *>• * W , what said In It. And I

9 recall specifically that Mike Armacost approved

10 this because i remember I made reference earlier
to a note tha^^^^^^^^^^had written

12 summing up where we were going pn this, and In that,

13 I remember him saying that It had been Mike Armacost

14 who had approved It, and they were sending another
T5 cable ^^^^^^^^fcer fol low

16 Q Murphy Indicates In this memo that he, as he

17 says, consulted urgently wlth^ Justice on June 20
'T8 «*r'to learn Justice's reaction to the Hashemi

19 proposal. Did you have any Involvement in that

20 meeting with Justice?

21 A No.

22 Q Old you have any knowledge of it.

23 A I had knowledge of it, but I recall that he

24 did talk with him.

25 Q Do you know of anything In writing generated

26 by Justice regarding the Hashemi proposal.?

mwB

613

UNCLASSIFIED

4
5
6
1
8
9
10

12
13
14
15
16
17
18

21
22
23
24
25
26

A I wouldn't think there would have been because
nobody was wl l l ing to offer a no I le oros on the basis
of a promise i^'i a guy I Ike Hashemi .

Q Being It a habit of government agencies to block things
out that I want to know about, I want to ask you about a
block. They say. we suggested that we could ask the blank
to send a professional to llste_frto the Iranian representative
|next week. Do you have any Idea who It was suggested
should go^^^^^Hto listen to the Iranian official?
A I don't recall whether we offered, uh--lt may well
be ClA,y^ 9 iw ee he woXjid speak Pars I. and he would--
Q That would be my guess, and so I'm asking.
A I don't know for sure. It could well be because we
probably would have offered that as long as State had
approved I t .
Q Al I r I ght .

A It's Just that we wouldn't have wanted to go out on
a limb dealing directly with these guys.
Q -t^nrtthere's a reference in the. last paragraph that
I want to oursye. It says, 'finally, Bill Casey is
anxious to move ahead on this proposal. I suggest you ca i
him to say we are urgently, l think it's considering or
working on the issue, and we'll be back to him as soon
as possible, we have passed the same message to and the
reference appears to be to you. So you were in touch witr

State on this matter

Mmm

614

UNCLASSIFIED

A With Murphy and/or Raphael. I don't recall. They
were very careful. Yes. l remember. 'Cause I out a fair
amount of, you know, Casey got the tlo from Shaheen, and he's
talking, and he runs Into]

ind you know, he goes to Long island for the

weekend and see I4 more people, and you want to get this

thing under control and In the right channel before, you know,

there's some other angle that we have to send somebody out to

ibout something that's

probably not going to amount to anything. So, i probably said

"Bill's persona My Interested." But he may have ca I I ed, we i I

he to^^^^^^^^Hso maybe^^^^Hta Iked

Q Old you perceive Casey to be very anxious or particularly

Interested In this suggestion by Shaheen?
so Wl> o"^
A No more so than other similar hot lee^ds that he'd come

In on Monday morning and start - { tw aud lB le > out people to

follow up on. I mean, yes, he was interested and, it had to

do with the hostages. ^Jft»/2t that point, we did not know

Bill Buckley was dead, and In fact, we thought he was still

■again through one of
these contacts that Casey makes that leads to something.

Q In any event, as of late June 1985, you had not reached
the conclusion that Buckley was dead.
A Absolutely not. That's right. . ,

Q And It was your perception t.h«» 4hen the Agency, at the
too levels where you were, that that perception also was not
the official perception. Is that right? You thought Buckley
m I ght still be a I I ve7
A At that point, yes.

Q Yes. Do you have any recollection of any discussions

with Charles Allen during this period of time, June 1985,

regarding whether or not Buckley was dead or alive?

A No. I don't recal i it.

Q You don't have a recollection of his view about whether

or not Buckley was dead or alive as of June of 1985.

A No . No I don ' t .

Q Let me show you a couple more documents. These are

UNCLASSIFIED

616

mimm

1 documents that came from Ghorban l f ar ■ s 201 file. They are

2 documents from the Central intelligence Agency, and they

3 are documents for which I have great hopes of someday

4 being able to read the entire text. Let me show you a

5 cable dated July 9. 1985. which had previously been marked

6 as Allen Exhibit 3, a typewritten message to Arnle from

7 Peter, dated July 11. 1985, which is Allen Exhibit 4,

8 A To Arnle from Peter?

9 Yes sir. And a cable dated July 12, 1985, which Is

10 Allen Exhibit 5. What I would like you to do is read

11 these documents and tell me first if you recall having

12 seen them at or about the time of their date. First, with

13 regard to these documents, would you have seen them at or

14 about the time of their date?

15 A Not necessarily. Something like this would probably

16 have been brought to my attention. I don't recall having

17 seen-- I don't know what this document Is.

18 1 was hoping you would be able to help me out with

19 that .^^^l^^^^l Do you know an Arnle or a

20 A I know Arnle Raphael. And since they have — uh . Peter.

21 Peter. Peter, Peter, Peter D o i l e ' ^( j^r) from the State

22 Department? l wonder, did this come from us or from

23 State?

24 Q It came from CIA.

-25 A It was In Qhorbani far 's file.

-20\

26 Q It was In Ghorbani far 's file. [■saiu s iiiiu I laneous i ywTEh

617

UNCLASSIFIED

,W^ c^^f'^''^

that we use

A And somebody's written

for him, but uh —

Q By that you mean it

A Yes. Update on the Hashemi as of last night Deputy

Chief CIA was still negative about the two names offered.

This sounds as if It was written outside of CIA. in other

words, we were closely in touch . ^^^^^^^^Hor the PMs

office and Manucher Intel i Office. It turns out he was a

fabricator with detailed knowledge of^^^^^^^^Hour only

knowledge o f^^^^^^^^f i n the biographic files, see that's

State phraseology. That's not Agency. i can swear to

that. it sounds like they're referring to their own

report I ng .

Q Right. That's very possible.

A The other cables may or may not have come to my

attention. Probably the fact of their existence would

have been gotten to my attention.

Q Exhibit was issued by thc^^^^^^^^ 1 1 that

ghat's right, yeah.
Q ^^^^^^^^^^H I s
A it's somebody on the]

some--that's a person who read the cable. it may have been

an Intel i assistant or whatever.

Q Okay. The authority for the cable would be yourself.

iiNWSsiFirn

618

'1 1

-25

Correct?

OlUSSIflED

A R I ght .

O Would that mean that you would have read it?
_NflX n ee^ea a ri l y?

A Not necessarily. Cables can be released down at tt
^^^^^^leve

Q All right. The cable Is being sent to^^^^^H to tt
Ithat handled terrorists?

A No. this" Is tr

Q All right. And essentially what the cable, which Is
Allen Exhibit 3. Is asking for Is additional Information

land Ghorbanlfar. Is that correct? Or Manucher .
A Yeah. FY! Headquarters suspects that Manucher is
Identical with Ghorbanlfar. we note that he had contacts with

Indicated by this Exhibit, they think It's probably the same
guy. And he Is the fabricator, and circulated the burn notice
Q Okay. All right. So essentially, as of July 9, operation;
Near East Division Is trying to develop Information on who
ind Manucher Ghorbanlfar are. is that right?

Is that what you're doing as of that time?

A They're trying to develop further informat ion <>• te

lINCUiSSIflEO

619

iiK-mim

The other lead Is from,
to Casey to me. but this came i

Q well, then, help me understand what this imoMes. This
suggests that whatever Qhorbanlfar and^^^^^^^Hwere doing
vis-a-vis Mr. Hashemi and Mr. Shaheen, they had made another
aooroach to the United States by way of|
IS that right?

A Well, they made an approach to]

^^^^^|had told us about It. Whether they had — and it's
not unusual for people doing something like this, particularly
a guy like Hashemi or Ghorbanlfar to cast that net and you
see which, you know, where you get your nibble. And If you
have a message or something you're trying to promote then /
you go through numerous channels to try to do it.

Q All right. The Exhibit S cable talking about the

meeting. That would have been the!

620

JllASSIFIED

think so. It's not too clear
Q They sort of black It out.

A There are two ref erences-^^^^^Band Director
^^^^^^^^^^^^^^^^^^^^^^^^^^^nd him as lows

don't remember ever seeing this cable. . I don't understand j
exact I y, wh a t — [ I o au d I b I e -- a g a I ii i eaa I i^ij aioua f r om tt>g" document ]

A ^ wrong assumpt I on->H think this Is following up on the

other lead.

Q On the Shaheen lead?

A' »e*h, because an intermediary has advised us — that would

be Hashemi — that we can confirm the full identity of the latter

this Manucher (S^^^^^^^^^^^^^^^^^^B And probably
what ' s blacked out

Q That would be. my guess. I look forward to «A^-Ht9 that
24 someday.
"^5 A No. I think It's following up on the other. T Uun'-i —

:s--i somehow had rememberedl

yiLASSIREO

got Into It,

621

i ^ ,' \e

but I thought It was b«causa. uh, that they had heard about

Q Oo you have any further recollection or knowledge of
what haopened^^^^^^^^nd elsewhere with this overture from
Ghorbanifar and —

A So far as I recall It Just petered out because they
did not show up^^^^^^H I mean, he did not call. Shaheen
was going to pass this message to him with the thing that
^^^^^^^^H-you asked he wrote something up about
we were gonna do. Shaheen was gonna call Hashemi In Geneva
— these guys were always floating around Qeneva. He was
gonna call him and say okay, if you've got something to say,
go here or call this number. And as far as I know, nothing
ever happened on that.

Q Oo you recall telling officials at State on the even 1 1
of July 10th tha t you were, you yourself or
were negative on^^^^^^^land Manucher Qhorbanlfar?
A I don't recall specifically, but It's certainly In
the context of what I believed and thought at the time.
But the guy was only trying to get this nolle pros', and
that he would Just come up with another cockamamie story.
But, sine* It possibly involved hostages, and maybe
Improved relations, from State's perspective, you had
to listen to him. I personally didn't think he'd show up.
Q This document dated January 11th refers to OC/NE.
beH|^^^^^^^ correct? Deputy Chief?

mmim

622

WUSS/fffi)

1 A That'* right.

2 Q The rnomo also makes reference to the Issue coming

3 up at 3 p.m. meeting C/NE. Is that you.

4 A That's me. That would have been me. l normally

5 had meetings once a week with Oick Murphy or Arnle.

6 That's why It makes me- think that that's Arnle Raphael

7 up there.

8 Q This memo also makes reference to the point I made

9 a little bit earlier, which says that our only knowledge

10 of^^^^^^^Hin the biographic file Is the report on

11 Manucher , who claimed, among other things, that]

12 "was the Individual responsible for the kidnapping of

,13 William Buck I ey . ■ V^That give you any further recollection

14 of what you a I I knew about)

15 A No. I don't. That doesn't refresh my recollection
18 at all.

17 Q Oo you have any recollection at all of what impact

18 ^^^^^^^^Hrol* on the kidnapping of Buckley had on your

19 eval uation of whether or not you should be doing business

witt^^mijHv

21 A Well, If It cones from Manucher Qhorbanlfar, I would ^

22 put about as much credence In that as anything else he

23 says. So. It wouldn't have had any Impact whatsoever.

24 Q with regard to a meeting In early July with State,

25 discussing these matters, do you have any further
26

recollection of what was discussed?

UNCLASSIFIED

623

1 A No. I mad* th« arrangement. They said they would

2 send a cab le^^^^^^^^Band I think maybe another cable

3 had already been sent. And it was agreed that at some

4 point that, no, they did not need our officer to sit In,
that ^^^^^^^^^wou Id be hapoy to do for them,

8 that was — and that's all i recall on that, it was Just

7 left at that.

8 Q During this same period of time, June or July, we

9 now know It from the Tower Commission Report, that there

10 were a variety of meetings between Michael Ledeen and

11 Ghorbanlfar, Bud Mcrarlane and people speaking on behalf

12 of Qhorbanlfar. Were you aware In the June-July time period

13 that Qhorbanlfar was making an effort to reach the United

14 States by way of the National Security Council?

15 A No.

18 Q At no time, to your knowledge, did Mr. Shaheen apprise

17 the Director of an effort to reach the United States by

18 way of the NSC.

19 A No. Not to my knowledge. It seems to me that had he,

20 I would have thought he would have mentioned something to

21 ^^^H" *°"^* context, because he was a very open sort of

22 guy onc«, you know, he got one of these leads and you

23 talked to him, he'd sort of tell you everything he knew about

24 It. But, he seemed to accept the fact that our records showed

25 that this guy, Qhorbanlfar, was not the sort of fellow we
28 wanted to deal, but, that if he could lead tol

.:"J

624

1 mayb* h« was worth It.

2 Q In terms of Shaheen, though, you did not develop the

3 impreaelon that Shaheen had a profit motive In trying to

4 put this relationship together.

5 A No.

6 Q And It Is your that^^^^^^^^^Bwou I d

7 have gone to New York and actually interviewed Shaheen.

8 Is that correct?

9 A That Is my recollection.

10 Q Do you recall anyone else being present at that

1 1 I ntervlew?

12 A No .

13 Q If you were to try to give me an estimate of when

14 this aspect petered out, came to an end. would It have

15 been in mid-July or at a later time.

18 A Well, It was Just left hanging. We sort of had It all

17 In place by the, I don't know, the 10th or 12th of July,

18 and then It Just sort of — we were waiting and, no call.

19 Q Old you ever determine why there was no call?

20 A NO. My assumption was that it was, that he Just

21 couldn't come through, when he was pinned down and we

22 didn't want to talk about arms or about ransom or something,

23 that, In other words, that he had to appear and state his

24 case on the merits as to what the Government of Iran
29 wanted to say to the U.S. Government, what they might
28 do to effect the release of the hostages In return for

UNCUSSIFIED

625

iiflLSSSIFIED

better relations or something, that that wasn't the
game that he was capable of playing. Either]
or whoever^^^^m^^Hcontacts he In

[IniMtf ihie] ■ <2.?^^ {^^<A .

Q It did not come to your attention that this
Initiative had died because In mid-August 1985,
Ghorbanifar and^^^^^^^f succeeded In getting the
United States' agreement to have Israel ship TOM
ml ss I les to I ran .

;Kt?^

.t*/u<

A It did not come to my attent Ion -♦+-> long after'
Q Was there merely one Interview of Shaheen by
^^^^^^^to the best of your knowledge?
A As far as I know. He may have met him on another
occasion, but that's the only one that I recall.
Q Where would the Central Intelligence Agency
have kept Its records of matters relating to this
Incident?

A Matters relating to —

To this Incident, the Hashemi ,^^^^^^^^^^^^^H
Qhorbanlfar connection in June-Ju ly-August , 1989.
A Weil, the cables were sent, i don't know
whether they have a file number.
we have a 201 f I le.

A Yeah. And this Is out of QhorbanI far ' s 2017
Q Yeah.
A Probably after he was identified, I mean that

IJNCLASSIRED

626

roswssw

1 Manuchcr was him. It would have bean put in there,

2 and there was a file on Hashemi, too, i think. So,

3 It would have been in one of those files, they're

4 probably In both of those fUes.

5 Q Have you had occasion to review the Hashemi

6 file related to this matter.

7 A No.

8 Q Have you had occasion to discuss this matter or

9 Incident wlthl

10 A Over what period?

11 Q within the last month or so.

~^2 A We have talked about, «W not In the detail we have

13 talked here today, about Hashemi and Shaheen and all that.

14 We have talked about Qhorbanlfar.

15 Q Well, let me come at It a little later. Oldl

16 ^^^^^Hadvise you that he had been asked questions .

17 about this Hasheml-Shaheen-Qhorbani far matter during

18 the course of his deposition?

19 A No .

20 Q So you have not had the benefit off

21 recollections to refresh your own?

22 A No.

23 Q According to the Tower Coflimlsslon Report and the

24 other documents that you've now seen In the period

25 June 1985, there were efforts underway to ransome

26 two hostages. Including Mr. Buckley, being supervised

27 by Col. North and being done In conjunction with two

UNCLASSIFIED

627

liNCUSSIRED

agents from the OEA. Were you aware of such effort!

In June 1988.

A June of 1985. I don't recall any. I recall

that periodically ther e were leads that came up.

DEA , you knov

and they were informants, not agents. But. no, i don't

recal l .

Q Do you recall it coming to your attention during

your tenure as Chief of the Near East Division, of

plans or a program to ransom one or mora American

hostages?

A Our pol Icy on that was. no.

spring of last year^ ■wu.ijgaaane. what was the guy's name«
\i\e was later determined to bo. well, ha was later killed,
but first everyone thought he was dead, one of the
hostages, t can't recall now, and then we got Information
through a source that he was ai Ive and wa got pretty good
proof that ha was alive, and the guy, thay claimed they
wanted something like a million dol lara.-or so to let him
loose. We obviously didn't pay ransom /^We talked to the
White House about that, specifically Oil le North^woj uii -
Ijfie talked to him about It. and he said there was private

iCLASSlFIED

628

mmwE

1 money available to pay for this sort of thing. But that

2 one never worked out. The guy was killed.

3 Q Let me focus you back In June. Were you aware of

■4 a prooosal In June of 1985 to pay several million dollars

5 in ransom for hostages and to utilize monies which Col.

6 North characterized as monies generated in his Nicaraguan

7 project to pay that ransom?

8 A No.

9 Q with regard to the matters we were discussing before,

the Shaheen-HashemI initiative relating to Ghorbanlfar and
to your knowledge, did the conclusions that you

12 all reached, the suggestions that you all made about not

13 dealing with Ghorbanlfar get related to the National
M Security Council?

15 A At that stage?

18 Q Yes sir.

17 A I 'm not sure. I don't have any recollection that they

18 were communicated to the National Security Council.

19 They were certainly communicated to Casey. State knew about

20 It at the Armacost level.

21 Secretary of State Siihultz has testified, as you know,

22 that as of mid-July, about July I6th, he had seen intelligen<

23 reports on Ghorbanlfar, I believe they related to this

24 Incident, that he was aware of Qhorban I far 's track record

25 and how he was perceived by the Central Intelligence Agency.

26 A Yeah, I suppose that's probably right.

''iiiissiFe

629

'^MmiEij

1 Q Oo you have any knowledge of a similar conveyance

2 of Information to Bud McFarlane during this period of

3 time?

4 A No.

5 O Do you specifically have any knowledge of this

6 Information being passed to Col. North during this period

7 of time?

8 A No.

9 Q Given Col. North's position relating to the hostages,

10 Is It likely or unlikely that the Central Intelligence

11 Agency and State would have apprised him of this Shaheen-

12 Hashemi Initiative during the June and July period of time?

13 A It's probably likely that It would have come to his
_J-4 attention In some of the,-yi.iu lillUl^i, i\m periodic meetings

15 on the hostage situation." Although, at that time, this

16 hostage- locat I ng task force had not been formally established.

17 Q No, I'm familiar with that, but it was Col. North's

18 turf, so to speak, to deal with hostages in June and July

19 of 1985. Isn't that right?

20 A Yeah, yeah. l mean, he was dealing with It. I don't

21 know that It was, if turf Is exactly the right word. It

22 wasn't exclusively his turf.

23 Q I m not suggesting that. But that certainly —

24 A Yes, It's quite likely it could have come to h I s

25 attention, but I have no knowledge whether It did or did

26 not.

UNCLASSIFIED

630

«.'iff/fe

1 Q You, yourself, did not, you don't recall having had

2 such discussions.

3 A I don't recall having said. I might have said something

4 like, you know, we've got a lead, or Casey might have said

5 something to him about John Shaheen's given us a hot lead,

6 and then, he might have asked me, and i might have said,

7 well, yeah, it turned out to be a bummer, or something.

8 But, I don't recall. That would n't be Impos sible.

9 Q Do you have any knowledge of^^^^^^^^^Bcommun Icat I ng

10 with Col. North about this matter in the June-July-August

11 period?

12 A No .

13 O Let me move you into the fall of 1985. Did you become

14 aware in the period of late August-September that Col. North

15 was involved In an Initiative with certain Iranian expatriates
18 and others?

17 A No. i think my first knowledge that something was going

18 on. Well, of course, Meir was released, and It was after then.

19 That was, as I recall. In September. After that, there was

20 it may have been early October, oh, I guess the first thing

21 that alerted me, it was about the time Weir was to be released.

22 Q Weir was released on the I8th of September.

23 A Okay, that's right. Somebody said. I don't know If it

24 was over a weekend or what, that Weir Is about to be released,

25 and, I don't know, Claire Qeorge may have said that, or John
28 McMahon may have said it, that they're expecting to get Weir

-mmm

631

mssim

out, and wh«th«r that means, you kno>», th« Church or State,
or the Iranians, or 01 lie North,, or whatever, but that there
was anticipation at the White House that Weir was going to"
be released. And, Bingo, he was re I easedTt <And then I gradual
became aware that some credit was being claimed for this in a
satisfied way, by the White House. That they had worked with
somebody and had gotten him out. Now whether, what It was,
I didn't knov/r-H^Then, In early October, John McMahon and

were on a tr l p^^^^^^^^^^^^^^and during
that trip, during which the Achllle Lauro thing took place,
John and I were sitting around having drinks somepi

he said something
about, gee, I hope they know what they're doing. I hope this
all works out about the Iranians and the hostages. And that's
all he said. The unstated thing was that it was, you know,
the White House was working somehow with somebody In touch
with the Iranians. I did not know of the Israeli end of It.
Q Let me focus you on a couple of events and see what
you can tell me about them. Mr. Allen places It at September
9; contemporaneous records place it more like September 12.
In any event, during that period of time. Col. North asked
Charles Allen to lncreas<

[efforts on what we now know to be Manucher Qhorbanifar
Did you know that that asking as you like to
t had been placed on Mr. Allen at that time.

mmm

632

1?^?;?)

'amssim

1 A NO, I did not know at that tlm«.

2 Q Director Casey didn't have any discussions with you in that

3 oerlod of time about Mr. Allen's activities?

4 A No.

5 Q Do you have any knowledge of a request coming In from Mr.

6 Allen's office relating to Manucher Qhorbanlfar, relating to an

7 alias name - Ashgar I , relating to^^^^^^^^Hask i ng you to

8 tell them what was In your file on those people?

9 A It's quite possible he did, i don't specifically recall it.

10 It wouldn't necessarily come up to me, or even to^^^H but it

11 probably would have been brought to my attention, but i Just

12 don't recall whether it was or not.

13 Q Just In terms of dates, the first Israeli shipment of a

14 hundred TOWs was August 30, then 408 TOWs went out on September

15 14. Your testimony Is that you had no knowledge of those.

16 A That Is correct.

17 Q We do have a memorandum that was done In 1987, suggesting

18 that you all had cable traffic on the September 14 flight, at

19 least the fact that It went Into Tabriz, that sort of thing. Do

20 you recall what you all knew at that point about Israeli flights

21 Into lr«n?

22 A I raoall about some reporting but l thought that was later.

23 In September?

24 Q Yes sir.

29 A Was this the flight that came back out to Israel and then

28 there was something In the paper about that. I thought that was

27 later.

-mim

633

\iiwssw

, s

6
7
8

9
10

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

Q Tn«r« WAS also, in Octobar. thara, thara, a raoort about
tha, tha planf stopping and going to Africa.

A ^3*. "at-V

someth I ng,

■amambar. and I ramambar tnara was

somebody raportad.

"Hey. hereH something^ happened." They didn't have any
knowledge of what it was. And I think that's probably what, that
contributed to my overall Impression that something was going on.
Weir was out, the White House was happy, McMahon later, i think

In October, said something to me, and It may have been this

plane. It was pretty obvious that something was going on.

Q You also apparently learned or your division did that there

had been a suppraaslon of a story in Israel about a Klmcha-

McFarlana meeting and Its reaulta and how it related to the

release of Weir, any recollections...

A I don't have any recollections.

Q According to Mr . Allen, he and director Casey met on

September 16, two days after or a day after Weir was released to

discuss the wair release and during the eoursa of the

conversation Casey indicated what ha knew about the American roie

in th%,tfan Initiative. Old you attend that meeting?

A Pin.

Old you have any knowledge of that meeting?

A No. I know Charlie waa Involved and everyone was trying to

get In on^^^^^^^^^^^^^^^^m and

Charlie In terms of who would go down^^^^^^^^^^^Rnd so

forth.

yNOlASSIRED

634

antmsro

Q Who from your office of anybody dealt with that
A I think It probably had

can't think of the name
ight now at the time. And"would have coordinated with the

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^I^^^^H^^^^Hi
the guy.

Q Was Col . North in evidence to you In those September M, is,
16 period, trying to set up or establlshJ

and the other accoutrements that go with the release of the
hostages?

635

ii'MSsm

A I don't recall anything specific. No.
-^ Q Do yoLrTD-ecol lect whether or not you had concluded that

19 Mr. Buckley was or was not dead at that point?

20 A I think we'd pretty much concluded by that point that he was

bcTT
^1 dead. ■^T he ug h we weren't going to publicly confirm it.

22 Q I understand, I understand. im going to show you what's

23 previously been marked as Allen exhibit number 7, l doubt that

24 you've seen it be^re, but perhaps you could look at it and ten

25 me I f you have. There's one point of reference that I wanted to

26 mention to you. On the second page of Mr . Allen's memo he

mimm

636

winssffl

Indicates that as of th« data of that memo, which i believe is
October 7th, the Central intelligence Agency, he says, has strong
evidence that Mr. Buckley is dead. Do you know what the strong
evidence was, that Mr. Allen's referring to on October 7th7
A It seems to me that there were bits and pieces reporting

dead, ^^^^^^^^^1 didn't have anything offerred
any hope. There 'd been something about people being moved and
Buckley hadn't been with them. But I don't recall any strong you
know, single piece of evidence or even, that stood out from the
others. It was. you know, that we hadn't heard from him. The
reporting about the hostages and we had I think by ther

Q Did It come to your attention during this period of time

that Mr. Ghorbanlfar had made an Inquiry as to the condition as

to Mr. Buckley and had advised US representatives as of this

period of time, 7-8 October, that Mr. Buckley was dead?

A No, It did not come to my attention that Qhorbanlfar had

done that. It may «4-. that Intelligence may ef^ been passed to me

in some form that, you know, that somebody said this, but i don't

recall his name coming up again until sometime later.

Q While we're In this period of time I'd like to show you one

other document that was generated by Mr. Allen for Col. North on

the 19th of September, relating to Iranian arms deals. Allen

exhibit 8, ask If you saw that document at or about the time it

OILASSIFIED

637

states.

A Market arms scams things, rings a bell, but I don't recall
the covering on It. I certal n ly . . .Char I le Allen to Oliver North,
I don't really recall this one. i remember the basic document.
Q Do you recall knowing that Col. North was being given this
Information by Mr. Allen at this time.
A No.
Q Or why It was being given to Col. North.

A No.

Sorry to Jump around. I missed one other thought. At the
October 6-7-8 period, when Qhorbanlfar was In town, that Is the
same time as the Achllle Lauro Incident, were you Involved In the
CIA's efforts to follow and be of assistance In the Achllle Lauro

matter?

A John McMahon

^^^^^^^^^^^^^^^^^^^^^^^^^ We heard about It
there.

Q In terms of the way you all operate, when you are away, when
you are on the road like that t take It that operational
responsibility would Me with your deputy back at headquarters,
is that the way It works?
A Yea .

Q Sc^^^^^^^^Bwou I d have had is comes

down to .
A Yea, that's right he would have been in charge of any, had

f •«IP-e%

638

DNWSsro

soRiethlng serious come up he would send me a cable.

Q Were you aware that Mr. Ledeen was playing a role in the

Achi I le Lauro matter?

A No.

Q Old you know Michael Ledeen at that time? Have you ever met

Michael Ledeen?

A I've never met Michael Ledeen. I've seen him in the

distance. I'd never heard of him until... I've heard of him of

course, he has written things about Iran. But, I mean heard of

him In our circle, until December of 1989.

Q 857

A December of 1985, that's right.

Q And you would have heard of him in that context because of

the Ghorbanifar memo?

A That's right. When that came out.

Q in mid November 198S, Mr. McFariane Is said to have had a

conversation with Mr. Casey and Mr. McMahon, relating that the

Israeli's were giving arms to Tehran. Old you have any knowledge

of that discussion, that conversation had with Casey?

A No.

Q Col. North at that same time, mid-November 1985 was In

London meet i n(

Manucher Ghorbanifar. Did y^u have any knowledge

ad no knowledge of him meeting with

HaKSiFlfn

Ghorban I far

Q Your relationship with Dewey Claij^ldge, at that time was

what? You knew each other professionally, I assume.

A Hhm?

You knew each other professionally?

A Oh, yea, yea, I've known him for years. He's the first real

^e CIA case officer I met^^^^^^^^^^^

^^^^^^^^^|and somebody said that's

a Case officer headed for somewhere. He wasl

it that point.

r
Q Had you had occasion to work with Mr. Ciarldge on any of

your assignments?

A In the old days ^^^^^^^^^^^^pwe' ve never served

overseas together

I guess. That's the only time
with h

ve ever worked In the same unit

ii.^.siFiFn

640

mmsim

Q With regard to events of November 22, 23, 24, 198S, were you

M In the country at that point?

15 A I was In the country at that point.

16 Q with regard to the flight ultimately made by the CIA

17 proprietary airline Into Tehran, were you aware of matters

18 relating to that flight while they were going on?

19 A No, no I was not. I didn't hear about that flight until, uh

20 It must have been early December .. .could have been the very end

21 of November, but I think It was, sort of the week or next week

22 after It. maybe ten days or two weeks.

23 Q You were or were not aware that Colonel North was at the CiA

24 the weekend of the 22nd7

25 A I was not aware of that.

26 Q Mr . Clarridge at no time talked to you about the events as

WUSSIFIffl

641

UNCLASSIFIED

thay w«r« going on?

A NO. Absolutely not.

Q with that also be true of your personnel.!

A I'm sure It Is, because i remenber when we learned about it,

I don't remember I f^^^Bheard about 1 1 or I heard about it... one

or the other... then we sat down and discussed It... what went

on... and there was apparently a flight.

And then I think there had been
a news story there about an airplane going to Tabriz and all
that, so I obviously knew something was going on but it didn't
enter my mind that it was one of our aircraft. it entered my
mind In a pure speculation — I wonder what this has to do with
the deal that may be going on, so I assumed It might be some
airplane that might be Involved with Secord or somebody that had
some Central American connection. But It didn't occur to me that
we had. . .

Q When did it actually come to your attention that the CiA
proprietary had been used?

A I think It was a weak or tan days after, maybe early
December I think It was.

Q Whan did you learn the cargo of the flight that was made by
the proorlatary?

A I learned, I think, when I learned about the flight I
learned that there was a concern to the point that John McMahon
had raised hell and said... that the concerns based on the fact
that there may have been military supplies, I didn't have any

iwssm

82-690 0-88-22

642

UarOTEO

1 specific knowledge. .. there had been a flight and It obviously had

2 been some sort of deal with Iran, and that military supplies had

3 been involved, and whether It had been Hawks or TOWs or anything

4 like that I didn't learn until later.

5 Q Has It ever come to your attention that a cable was sent

6 ^^^^^^^^^|^° ^'^ Headquarters on the 23 of November relating a

meeting between the^^^^^^^^^^^^^^^^^^^^^Band
Secord. . .that Mr. Copp Identified tothe^^^^^^^^^^H that

9 the cargo was In fact Hawk missiles?

10 A I think that only came up, or came to my attention within

11 the last couple months, since I've been A.D.O.Oed. . . I n the course

12 of the Investigation and the Independent counsel and all that.

13 Q Have you ever seen that cable?

14 A No. I have not seen that cable, l have heard talk about it,

15 and I may have seen some of the I .0. notes on the Interview
I nvol vl n^^^^^^^^^^^^^^^^^^^^^^^^^^Hbut the cable

17 know.

18 Q Do you have any knowledge that the cable does or does not

19 exist somewhere In the records of the CIA at the present time?

20 A No, I do not. I know there was cable traffic... I am not sure

21 what you mean by THE cable.

22 There Is A cable that weVe looking for Were you aware in

23 late November that Mr. McMahon felt a finding was required

24 because of this flight... a presidential finding?

25 A Either late November or early December, simultaneously with
28 the fact of the flight... in fact It came to my attention because

MOTHED

643

Mmim

1 John McMahon had said, "Be careful... no airplanes, no nothing

2 unless we have a f l nd l ng . " . . . that context... he didn't say that to

3 me, but I believe he said that.

4 Q Do you have any knowledge of who McMahon assigned the task

5 of checking with the White House periodically to determine if a

6 finding had been assigned?

7 A No I do not .

8 Q And you don't know what If any responsibilities either

9 Charles Allen or Dewey Clarridge had In that regard?

10 A No .

11 Q Let me show you a memorandum dated November 26, 1985 from

12 Mr. Casey to Vice Admiral Polndexter, enclosing a proposed

13 finding which approves of the Marcus Allen exhibit 10. i ask

14 that you look at that and tell me If you have ever seen that

15 document before.

16 A No .

17 Q YOU have therefore had no role In drafting the language or

18 suggesting the language to be used for this finding... the concept

19 behind i t . . . the rest of It was not your bailiwick?

20 A Absolutely not.

2 1 Q Do you remember attending a meeting I n Mr . McMahon 's office

22 on the 5th of December in which among other things the Iran

23 initiative was outlined and the November flight was discssed?

24 A I don't recall that. It's possible. As I say I learned

25 about the flight in very late November or early December, it is

26 convelvable that I could have attended the meeting, because i

ONCLASSm

644

1 1

' mm\m

would h«v« understood the context of It.

Q Let's see if i can refresh your recollection. Let me show
you a memorandum that was done November 28, 1986 byl
reconstructing notes that Mr. McMahon made of a December 5, 1985
meeting held at his office amongst yourself, Mr. Qates, Mr.
McMahon ,^^^^^^^^^HMr . Juchnlewicz and^^^^^^^^^^H Let me
have this document marked as exhibit 3, Is that where we are?
I'd like you to take a few minutes to read It, because I'd like
to see If It would refresh your recollection at all on what
happened at that meet i ng .

.Paul several things, I've been reflecting back on the
situation and I was thinking a little later than this, I knew i
heard about the flight, then I knew that John talked to us,
talked to me, about the meeting that was taking place at the
White House on the question of the Initiative with the Israeli's
and the Iranians and I... ^oo soft to make out] . . . i have
difficulty In recalling this specific meeting but all of the
facts that are mentioned, most of the facts that are mentioned in
there I recall. But I don't remember this about the President
signing a Finding.

Q Well, that was question number one on the list. You don't
recal I that being discussed?
A No.

Q You don't recall who discussed It. I guess Is even more
Important, who raised the point?

ONCLASSIRED

645

w&jmm

1 A I sure don't, i Know the whole context was that if we were

2 to play any role and do something, there would have to be a

3 Finding, but I don't remember anything about a Finding

4 authorizing us to do th I ngs . . . they talk here about Oliver North

5 arranging five plane loads and a lot of this meeting was to get

6 Intelligence, i think so John would be prepared when he went to

7 the meeting on the 7th and you know, with facts. So that claims

8 by the Israeli's or others might be met with facts. But I do not

9 recal I that bit about the Finding.

10 Q Now, I m going to show you this document In a moment. On

11 December 7th, 1985, Mr. McMahon wrote another memo, a memo for

12 the record, and he said that "after repeated calls to NSC

13 personei on 27 November, and during the week of 2 December,

14 continuously receiving reassurances of the President's Intent to

15 sign the Finding, we were notified on 5 December that indeed the

16 Finding was signed. The President directed us not to inform

17 Congress for reasons of the safety and secure release of the

18 hostages until he so directed." December 7, 1985. Have you any

19 further recollection of what you all knew about a Finding you

20 sent to the President?

21 A I didn't know anything about a Finding. The first I heard

22 about a Finding was later In January. The first time I recall

23 hearing about a Finding.

24 Q At no time since these events have you or Mr. McMahon had

25 occaislon to discuss what caused him to believe a Finding had

26 been signed In December.

Mmsim

646

sn himji c

1 A John had gone to Lt. Aidrldge, I've seen himp couoie of

2 times you know, we've been back to testify in town, but I've

3 never talked with him.

4 Q Okay. If I could borrow that memo back. I'd like to ask a

5 couple of questions. What took place at this December 5, 1985

6 meeting. The second bullet Indicates that Mr. McMahon said that

7 he was going to be attending a meeting on 7 December, with the

8 President discussing the Israeli / i ranlan initiative. He says

9 that a new "Private Interlocutor was working with Israeli foreign

10 Ministry official David Kimche." Do you recall who the Identity

11 of that private Interlocutor was?

12 A No. I could make an assumption based on what i learned

13 later.

14 Q I understand that. Do you recall Manucher Qhorban I f ar ' s

15 name coming up In the context of this meeting, In early December?

16 ^^^^^^npparent ly shakes head. No.) Old not come up?

17 A I don't recall It coming up.

16 Q Do you recall Ledeen ' s name coming up at this meeting?

19 A No, No.

20 Q Were you aware that the day before, December 4, Dewey

21 Clarldga and Charles Allen, met with Mr. Ledeen at length to go

22 through the Qhorbanlfar Initiative?

23 A No. The first I heard of Ledeen was a little bit later when

24 he came up with some terrorist Information and other Information

25 and we got into It In the N.E. division.

26 Q Mr. Allen and Clarldge did not keep you apprised that they

UNCLASSIFIEO

647

iClASSIFIED

1 met with Ledeen In late November, met again with him on December

2 4, to discuss Ghorbanifar.

3 A No, absolutely not.

4 Q Do you recall^^^^^^^^^Hdo you recall him apprising you

5 all of what the cargo of the plane was that had flown on November

6 23rd?

A 7 I remember him mentioning something but, you know, I don't think

8 I focused that much. I knew it was weapons, or you know,

9 military goods, but I don't remember specifically what he said.

10 Q Well, let me just pursue that a tad further. Apparently

11 there was discussion at this meeting of North's plan to send

12 perhaps as many as five more plane loads including 747 's with

13 weapons to Tehran. Do you recall that discussion at all, what

14 the program was?

15 Q No. I don't. I mean it may well have been that. I mean it

16 was sort of at times Col. North tended to over dramatize if not

17 exaggerate things sort of, "get all this done and we're gonna

18 send five airplanes and get out seven hostages," and that sort of

19 thing. So I'm not sure I would have accepted at its face value

20 that yea, that's really going to happen in the next couple of

21 weeks even had ^^^^^^^Hs a id it having heard it from the White

22 House.

23 Q The reason I'm focusing on it, is because insofar as you all

24 were going to be backing up Col. North on that progreun given

25 McMahon's position that you all knew the Presidential Finding,

26 suggests to me that there mu|9 Ji»Mf been some discussion with the

648

%*^'

^^'^^mm

K*^-^^

.*''5%.

^- ^c^^

^JLillUWi

.^#i?

Finding in place at this time, otherwise McMahon wouldn't have

had you all helping out Col. North.

A Well as I tell you my recollection at this meeting is that

it is primarily for John to get himself up to speed; we had the

DI people involved in this and Bob Gates and his deputy for the

Near East area ,^^^^^^^H myself ; that it was to get himself

armed with facts, facts and figures to go to this meeting to talk

about what ever was going to be done, but I do not recall him

mentioning a Finding or a specific role of CIA. The reference

there is right I think ^h*4|^H°^ somebody said well if Ollie's

going to get these airplanes then —

Q Let me add one other fact to the mix — we know from cables

that we reviewed that there was a lot of cable traffic during

this period of time trying to arrange for overflights in various

countries, ^^^^^^^^^^^^^H and the like —

A You mean through our channels?

Q Yes. Through the CIA. Seems to have been done primarily

out of Clarridge's shop. I'm just curious why you all weren't

playing a role, if you weren't.

A Well I've always, I mean I've reflected on that since the

time. It started out there was a flight to go from^^^^^^nd

there was a question getting clearances and that's!

[didn't really impact on the Middle East
and sort of started out from there and why it continued that way,
I don't know.
Q Coming at it from another angle, were you aware that of the

\\Mm

i .-S

■;iD

649

1 fact that the CIA was Indeed trying to obtain clearances for

2 these succeeding flights In early December?

3 A I don't recall being aware of that, no.

4 Q I'm trying to stir recollections which would suggest that

5 you would have known the Finding. But no such —

going^^^^^^^^^^^^^^^^^^that cover any

7 anyway, so —

8 Q I understand- -

9 A There's no reason for me to be aware of that.

10 Q It was landing in Tehran though, it's under your turf, isn't

11 that right?

12 A It does, but it gets on to my turf, but I wouldn't be

13 involved the clearances of the flight clearances.

14 Q Okay. Alright. There is a reference in this collection

15 notes again going to the interlocutor that I have trouble with,

16 its key players were Rimche and the private U.S. citizen

17 interlocutor. Any further recollection of who that might be?

18 A Other than my later assumption; this would have been Ledeen.

19 Q Yes. But in terms of a specific recall of him being

20 discussed?

21 A No, not then. The first time I heard Ledeen' s name was

22 later. It up around the 20th or 21st of December, as I recall.

23 Q Do you recollect what assignment, if any, any division was

24 given to get McMahon up to speed for this meeting with the

25 President?

26 A I think it was sort tracks on the Iranian political

UNCLASSIFIED

650

1 situation, you know the moderates, the Mullahs, the middle-of-

2 the-roaders, identities of the people in the hierarchy who had

3 political clout, etc., etc., that sort of thing. And we would

4 have worked witn^^^^^^^H and his people on that, and if we had

5 something to add, you know from the intelligence hierarchy or

6 some reporting that fleshed out with the DI might , we

7 probably would put it together and given it to him. I don't

8 recall the product.

9 Q Do you recall McMahon expressing anything about his view of

10 the merit of this initiative, at this meeting prior to meeting

11 with the President?

12 A I recall, I don't recall when he expressed it; I think I

13 know what his attitude was, and I know what my attitude was at

14 the time, and I think he thought it was sort of a cockamamie

1 5 scheme .

16 Q Was that a view that you shared?

17 A Yeah. Well I thought, I began to think that it was really

18 cockamamie when I got Ghorbanifar's circus from Ledeen, and all

19 this stuff. Before that, when I heard this Israelis and, I mean

20 I thought it was you know not my bailiwick, political-diplomatic

21 decisions, but that it was a politically, you know when you've

22 been very careful walking a careful trail not to pay ramsom, not

23 to deal with terrorists, even though you weren't dealing with the

24 terrorists, you were dealing with the Iranians, and it was a

25 politically-charged dynamite, but you know I said something to

26 Bill Casey is this really what people want to do? And—

UNCUSSIFIED

651

1 Q Wh«n would you have had that conversation, roughly.

2 A Roughly in December or January, I suppose.

3 Q Was this a one on one session, or in passing along the hall,

4 or what?

5 A It was probably at the co nclusio n of one of the meetings

6 that I had with him when we sen^^H^HHto talk with Ledeen.

7 I don't remember exactly. But on the other hand, if it were

8 something that could be done quickly and really have an impact on

9 U.S. - Iranian relations and get the hostages out, may be, cause

10 the results of the potential for them may be ... . . ._

11 Q Were you aware that Charlie Allen was preparing a memorandum

12 on the political situation in Iran at the same time?

13 A I don't recall.

14 You don't remember McMahon saying to Charlie Allen you've

15 need to give me a briefing on Iranian politics?

16 A No, I don't recall that.

17 Q You don't recall anybody saying why Charlie Allen, NIO

18 Counterterrorisra wa s doing this a s opposed to the NIO for Near

South-Asia orj^^^^^^Hoffice?

20 A Well Charlie Allen's a man who fills a vacuum... I mean he

21 was still in terrorism quite legitimately and ...terrorism, Iran

22 was certainly a country that had been involved in state-supported

23 terrorism, and so I wouldn't have found it unnatural that Charlie

24 was sort of in his way dug up a lot of facts about Iran or

25 in the process of preparing

26 Q Clarridge was out of the country on the 5th of December

652

yNCUSSIFIEIl

1 which Is why his deputy attended this meeting. So was Mr. Casey.

2 Do you know If they were out of the country at the same location?

3 A No, I don't recall

4 Q Mr. McFarlane and Colonel North met with Mr. Ghorbanlfar In

5 London Immediately after the meeting of December 7th. Did you

6 know that was taking place at the time It took place?

7 A Not at the time It took place.

8 Q When would you have learned that?

9 A I think I heard about that, I learned, in fact I learned

10 more about what had gone on from Michael Ledeen's revelations to

11 ^^^^^^^^^V-'^ their first meeting that I had known. I mean that

12 provided then a very good framework for all these facts. I

13 learned it all from Ledeen. Ledeen told^^^ftll that 3 or 4

14 days before Christmas, including the fact that he had been in

15 touch with Ghorbanlfar and Ledeen was the promoter for

16 Ghorbanlfar.

17 Now let roe show you Mr. Allen's memo dated December 18,

18 1986, of his meeting with Mr. Ledeen on December 4. Did I say

19 December 18, 1986? December 18, 1985, of his meeting on

20 December 4, 1985 with Mr. Ledeen. Ask you to look at It and tell

21 me if you've ever seen that meroorandun before.

22 A Probably did see this. I can't say for sure, but I think it

23 was you know when Ledeen had proposed the day they had this scam

24 it might work against Khadd afl, and which was a cockamamle sort

thing, a sting operatlon^^^^^^^^^^^^^^^^^^^^^^^^Hand

26 lOiaddafi, and even Khaddafl isn't dumb enough to fall for It a

UNCUSSIFIED

653

^^■:^

1 second, well he might, but not a bird (laughter) so I heard about

2 that and it was about this time that either Claire or Clair* and

3 Casey, or maybe just Casey, I don't remember talking to us about

4 taking a look at this guy Ghorbanifar 's information well first

5 talking to Ledeen and leaving Ghorbanifar. Because we had bad

6 experiences with us; he sure had and so I may have in the course

7 of being briefed on here's the situation, I may have been handed

8 this memo. I don't recall it. But I'm certainly fauniliar with

9 most of the facts in this. Yeah. Either out of here or from

10 Ledeen 's conversation with

11 Q Has that document been marked? I don't think so. Let's

12 have it back and mark it.

13 A (Mumbling, typist can't distinguislij

14 Q Memorandum does make reference to a 1984 effort by Ledeen to

15 get McFarlane to open up contact with Iran. Did you have any

16 knowledge of the 1984 effort that McFarlane made to open contact

17 with Iran?

18 A No.

19 Q Did you ever explore that point either with Mr. Allen, Mr.

20 Clarridge, or someone else who had talked with Mr. Ledeen?

21 A No, no I don't think I did.

22 Q Reference to that memorandum to one of the schemes, which is

23 a suggestion by Ledeen as we read etbout Mr. Allen. That had been

24 discussed with Colonel North. Did you have occasion to discuss

25 these matters with Colonel North in the early December period

26 times?

UNCUSSIFIED

654

UNCLASSIFIED

1 A No, No.

2 Q Indicated in terms of Mr. Ghorbanifar, as I understood your

3 testimony, you knew of the situation that occurred in June/July

4 when the initiative came in You became aware

5 of Ghorbanifar again in December I take it.

6 A I think before then.
7

655

UNClASSIFiED

lElASSM

656

^■'^^^^c^

Q Let me stop you. Were you told that your White House

contact was to be Colonel North? How'd you know that North was

the guy tc

A I think the requirement came from North.

Q From North?

A Yes, I think so.

Q Did you actually meet with North on this requirement?

A I don't rem«nber whether I did not.

Q Did you pass this assignment to^^^^^^o carry out? Is

that the way it

USSIFJED

657

K?W^ ]¥

HEOv^r mfrn^f^

Do you recall any direction being given to^^^^^^^^or

anybody else to commuicate this information back to Colonel

North?

A About what?

Q That Nanucher Ghorbanifar had been subject to a burn notice

and was known to the CIA as a fabricator? A fabricator?

OllASSIFlEO

658

UNCLASSIFIED

1 A I don't recall that. I don't recall that.

2 Q Do you recall this matter coming to the attention of

3 Mr. Juchniewlcz?

4 A No.

5 Q Do you have any recollection of Juchniewicz callin'3

6 in and giving^^^^^Bthe assignment of advising Colonel North as

7 to the background of Manucher Ghorbanifar?

8 A No, it's quite possible.

9 Q Do you know if^^^^^Hever did that when he carried out the

10 assignment, told Colonel North about the background of Manucher

11 Ghorbanifar?

12 A Right at this time, I don't know. I know that Colonel North

13 by mid-December certainly knew the background of Manucher

14 Ghorbanifar; no question about that.

15 Q How about in early November?

16 A I don't know, I don't recall that. It's possible, but I

17 don't recall that. The trace or check on Ghorbanifar would turn

18 up the burn notice, and would have earlier.

19 Q One of the concerns I have is Mr. McFarlane, as you probably

20 know, from the Tower Report, professes not to have known Manucher

21 Ghorbanifar from an Edsel, so sometime in December 1985; do you

22 know of this information being passed on to the NSC, to McFarlane

23 before December 1985?

24 A I don't know. As you mentioned earlier in the preceding

25 summer when Hashemi came up with^^^^^^^HManucher thing. I

26 think its quite possible that North was told about it, but I

ICII^^SIFIEO

659

ddinlu

1 don't know the specifics.

2 The deposition adjourned at 12:45 p.m.

iinmim

660

A^sociAit DDO

' •■ \:fr.." ■' 17 June 1985 'f '•:'■: •

MEMORANDUM FOR: "Chief. Nev East Division, 00
FROM: Director of Central Intelligence

SUBJECT:- Release of Hostages

2. Shaheen received a call from a Or. Cyrus Hashemi who 1$ currently
in Hamburg at the Hilton Hotel in Room 703. Hashemi has tried to get In
touch with us before offering to put us in touch with leading figures In

the Iranian Government. When we learned that Hashemi is under investigation
for violations of export control laws, we pulled away.

3. His recent call to Shahaen offered a change in Iranian policy (or
infqrmation about a change in policy) "that he could provide J^ the
American Government would be able to get him a nolle prosequi -- in short,
if we are able to take the pending indictment for conviction off his back.
Shaheen said that he had no power to do that but then asked whether Hasheni's
contacts with the Iranian government were good enough to spring the hostages
if he could be gotten off the hook. Shaheen did this knowing that there
have been occasions where nolle prosequis had been arranged for high
national security considerations. What he was doing was feeling out
Hashemi to see what kind of a reaction he would get. Hashemi said he would
call bacl^n^i^tw^^^r^^ja^back on the phone having, he said, lalked

.Xo_th^H|HIH^HBH^^|^H He came back for the release of

the DAWA hostages, plus TOW weapons, plus his nolle prosequi. Shaheen
dismissed this saying no weapons, no DAWA prisoners. Then again, to feel
him out, said, although I can't speak for the US Government, I understand
that it will not negotiate with terrorists, and vou mioht
j1 ies or soffethinq like
Again /j/asneai saio ne would check ar
thin a^ Cupie or nours claim ing that he had talked aoain to^ ^
ind that they weren't interested in Itanirt TOdltJl suppT
representative from Tehran!

■■i Fw-»i.» t .H.''-W B lWAaJ.U ' l ' lJJB

jrsoay

C/;V J7ii

.-. V - kEY*€^0/p<f UREASE

661

-...^U

fier>H fl_t Mn jaihea Shekeleh (no further id*nt1f1c*t1on) to conUct
thelraniansbn tfm. Shaheen claims that he has nadt It clear that he
can't do It for anything, tha^h^J^QX4rm|fl^oew»o^eal with terrorists!

there a ''i^^t ^ "9lH^^H|mHHHHHHa0th i ng at
could be agreed upon in advan^^^^^ff ^«o<n^D^T^t^tn^Tranians to

thedHIB*'^^^ ^'^ offtr whic^^^HBB|^i[^HI||^^H|inight
be able to work out.

6. This should probably be taken up witi]
it is ready under the circumstances to see^

^^ would be willing t^^sten to whatever proposition tne Iranians aiign

III iiiliiil III liii|liii|^^Mfrr a ta hStfefl^ o wnaWii' surrounding information
might be a'TaTTacT?^^^ T:

7. I ran into Rick Burt last night and discuss this with him. He
thought that it was interesting and indicated that there had been recent
knowledge that a nolle prosequi had been arranged and said he would talk
to Dick Hurphv about it. I think jjt might touch base with the Assistant
secretary or ^tate tor international. Organizations ^s well as with Kurohy and
in doing so t ell Dick about Burt's reaction . I suggest that he raignt want to
check with Burt. "~

William J. Casey

3733

•SECRET

49o70

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CIIN N C-_11^ TITLE J ohn Mc'lalion's note pad Reference fo.J^ember_ 5._lQa:._

approval o": Findiag' related to ".SC nroiect.

DESCRIPTOI? - TO/FROn

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; rece.T-er 19£; "^"- "■"'iii,^"--- ^°^'^ ^' HcMahcn's Cffice with then Dc:, 3ob

rhe CDCI requested tacts on t^.e following by the next day:

-Was It tru« that Iran ^o trying t
to '<noclc Otftr Soviet t8««^fttlfftr»tt

--The status of the Iran/Iraq war, i.-.cludinq a prognosis
of whit «3<;}5 might do and a table reflecting an order of
battle for each side.

ODCI noted that he vould be attending a iieeting at 10:00 AM on
•atjrday, 7 ^ece.Tber, with t'e President recarding the expansion of the
nfcf.Tial lirA bet-een the Iranians and the Isnslis;

--He noted that a new 'private interlocutor' was worVing
with Israeli Foreign Ministry Official David Kimche;

^ --Koted that Iran wanted to get closer to the United States

and wondered (CDCI) whether this could be a ruse to get
Hawk xissiles.

° DDCI noted that Saturday's .-neeting would take stock of the two-t:ack
rcgra.-n new uncer-ay: one to free th« J)^jt0ges «i)d^ t^ oihec to »x?ar.d our
ies wich Iran. Xeetirigs were planned In ■Geneva bet^^^fl h\* Uniteid States a

ran in the short ter-. ■* ' "^ '' ' fi----'-

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669

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■ if i:ic-j$iic-s; :^» follc-irj wte< ;-.» vai

e:t*r,ci.-.g jp to f;v« rli,-.e loads, inclj.ii.ig
747»;

--?resii»nt sig.-.ed the finding; C 1- o.vm. ->o-V o,«>*»<»^>» -'^»

Clivsr r:cc:?i vas lining jp th« planes; -e don't
■«ncw how.

In response to a .question aicutaclsarance foe t;-.« landing
rights, soxecne noted ^^'^':ESHHH|B''er« standing by;

A question was raised regarding a plane goi ng to Iran froia

Jerusalex ar.d oossiblv stooping in Texa s :

iev oi t»:*nt Iranian reporting noted the foUcwingi

--No real opposition that we could capitalize on;

--Khon^^jini s«e-ed to ;e in better health;

--The econcnic situation was deteriorating;

--The possibility of a new .T.ajot offensive could
stimulate opposition within Iran;

— Key players were Xi.nche and the private J.S. citize
intetlocjtor.

estedany intelliaence coverac

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670

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• lii^enc* f.;w :t<^i:iir\^ l^» location of tht

mmim

671

^ wmsm

ORIGINAL

Stenographic Transcript of
HL^NGS

Before the

SELECT COMMITTEE ON SECRET MILI^Y ASSISTANCE
TO IRAN AND THE MICARAGUAN^PPOSlflON

UNITED STATES SENATE

DEPOSITION OF JA>fES A. BAKER, III

Monday, June 22, 1987 ^

j^niierp:Ovis::n<! of E.U. !2^5o
^y 9K ■'^ai'Qilii of curit; Council

i 1 W^ii

^^-fl

(202) 623-9300
20 F STREET, N.W.
WASHINGTON, D. C. 200 01

672

UNWSIFe

1 DEPOSITION OF JAMES A. BAKER, III

2 Monday, June 22, 1987

3 United States Senate

4 Select Committee on Secret

5 Military Assistance to Iran

6 and the Nicaraguan Opposition

7 Washington, D. C.

8 Deposition of JAMES A. BAKER, III, called as a

9 witness by counsel for the Select Committee, at the

10 offices of the Select Committee, Room SH-901, Hart Senate

11 Office Building, Washington, D. C. , commencing at 9:31

12 a.m., the witness having been duly sworn by MICHAL ANN

13 SCHAFER, a Notary Public in and for the District of

14 Columbia, and the testimony being taken down by Stenomask

15 by MICHAL ANN SCHAFER and transcribed under her

16 direction.
17

UNGUSSIFIED

673

*-©//?£//

appeara::ces:

On behalf of the Senate Select Committee on Secret

Military Assistance to Iran and the Nicaraguan

Opposition:

TERRY SMILJANICH. ESQ.

On behalf of the witness:

C. DEAN MC GRATH, ESQ.

Associate Counsel to the President

ED WILSON

10
11

MICHAEL SMITH

UNCLASSIFIED

82-690 0-88-23

674

IINCUSSIflEO

^ CONTENTS

EXAMINATION ON BEHALF OF
"^"^"^ SENATE

4 James A. Baker, III

5 By Mr. Smiljanich 4
^ EXHIBITS

7 BAKER EXHIBIT NUMBER FOR IDENTIFICATION

8 1

UNfiUSSIFiED

675

UNCUSSIHED

1 PROCEEDINGS

2 Whereupon,

3 JAMES A. BAKER, III,

4 called as a witness by counsel on behalf of the Senate

5 Select Committee and having been duly sworn by the Notary

6 Public, was examined and testified as follows:

7 EXAMINATION ON BEHALF OF THE SENATE COMMITTEE

8 BV MR. SMILJANICH:

9 Q Mr. Secretary, you are currently the Secretary

10 of the Treasury; is that correct?

11 A • Right.

12 Q And you have served as Secretary of the

13 Treasury since when?

14 A Since roughly February 3, 1985.

15 Q And prior to that you served as Chief of Staff

16 to the President?

17 A That's correct, from January 20, 1981.

18 Q Up to the time you were confirmed as Secretary

19 of the Treasury?

20 A Up to the February 3 date, if I'm not

21 mistaken. It may have been February 1, but I think it

22 was February 3.

23 Q During the late summer of 1981 when you were

24 serving as Chief of Staff did you become aware of a

25 specific program^ whij^h was^j

IsilKkr^

676

A I don't have any specific recollection of
that, although it might well have come up in connection
with a meeting I attended, but I don't specifically
recall it today.

Q Putting aside the name of the operation for a
minute, -do you recall any such activity at that time or
discussions concerning the possibility °^^^^^^^^^^^|

A I don't have a specific recollection of any
such discussions.

Q Pursuant to that program sometime in either
late 1983 or early 1984 ti

Did you have any knowledge
of those matters?

A As we sit here today I don't have any specific
recollection of that, but, as I said, I attended most NSC
meetings and of course I attended morning briefings with

yiffiussifo

677

mmmiB

1 the President, and I can't tell you that the matter was

2 not discussed in a meeting that I attended. I don't

3 recall it.

4 Q In the summer of 1984 there is some indication

5 that there was an NSPG meeting at which the possibility

6 of third country solicitation was discussed in connection

7 with the Nicaraguan resistance. Do you recall an NSPG

8 meeting at or about that time in which that topic was

9 discussed?

10 A I recall an NSPG meeting which I thought was

11 in the fall of '84, which was held before the Boland

12 Amendment became effective to discuss the possibility of

13 third country funding for the contras.

14 Q And who do you recall being present

15 specifically at that meeting?

16 A Well, I specifically recall that Mr. McFarlane

17 chaired the meeting as the National Security Advisor.

18 The President was in attendance. The Secretary of State

19 was there. And those are the only people that I

20 specifically recall being there, although — well, those

21 are the only people I specifically recall being there.

22 Q Do you recall that the possibility of third

23 country funding was the primary focus on that NSPG

24 meeting?

25 A As I recall it, it was.

UNCIJSSSIFIED

678

UNWSIFIED

1 Q This was a full-fledged NSPG meeting and

2 discussion of the matter?

3 A Yes, it was.

4 Q Do you recall whether or not any action was

5 taken pursuant to that discussion?

6 A I do not believe any action was taken.

7 Q Do you recall the question of the legality of

8 such third country solicitation being discussed?

9 A Yes.

10 Q What was your position at that time with

11 regard to the legality of the matter?

12 A My view was that we should take a very close

13 look at that question and I so stated in the meeting.

14 And it was my view that we could not do indirectly what

15 we could not do directly. My recollection is that a

16 similar reservation was expressed by Secretary Shultz,

17 that the meeting generally concluded with a decision to

18 take a hard look at the legality of third country

19 solicitations. ;jg^ .

20 Q Do you recall what the position of Mr.

21 McFarlane was?

22 A Well^^p&infc-^^^c^r*^n^^rfic«ted at^ one
2 3 point that tffft'^C^g^nsie^Fsd t^fe^rgucR^^.j M pj p '^'i

24 were le'ga\ but , :^^ rei^^l^^^<aS9<I^^^^B»w ;^ *hat

25 before ther«Pwa*'^^^«(^t5^i*ct ion there should be

UNCOSSIFIED

679

UNCLIiSSIFe

1 another scrub on that qviesfeiSs. "■- ^- -.

2 Q. ^iUiM it daffided thatj^e Attorn^Tfisn^^l ^=;._~
specifically should take a ^^^''^^^'^fth'T**'*^**^ ^»"*»««-

4 matter?

5 A I can't ■?Wa 11 that^«nd f rankty^ I don'tjgp» ^~

6 recall whether the SCtorney General was in attendance at -^

7 this particulir^jaeetiBg. J^ ^

8 Q Do you.xecall whether »j r ' jwjt th» cldlwr^ook

9 at the Sltua^en was going tcr jep-^one by tit* i^orney

10 Genera%^8 of fice as of^sed to NSC^L^^L^bulWiJ^I^- T^w J

11 r* • ^f-: really don >^^ncatl^ut-_it would h^^ ij»>»T- i

12 guess that it wSE^ pi^^bly hajlfm 1 liJj^^^OJpMj JiT)' "^

13 Gener^j^ sinc^j^Ui^tsly «h»^to]^ij|^lfeiq^l^^twi to

14 pass on thoat^K^rot aStl^m^B. ^W^ - -1 .--- .^ 36

15 Q I had- indicated to yod^irt^e ago thaS^the ' aa

16 notes of Chai9.^-Hill, i^o wdgsecr»€arj^a|gij^8 jaecial

17 assis^n^aj^^aatbiVe^^PisttfBr, ^Af a a tji that in^ -r--^-' r

18 discussion he had with Secretary Shultz on June 28, 1984,

19 Secretary Shultz told him that at a recent NSPG meeting

20 he had had some reservations about the legalities of

21 third country solicitation and stated that your position

22 at the time was "Jim Baker thinks it's an impeachable

23 offense."

24 Do you recall having any specific opinion like

25 that or such as that'

imSSIFIED

680

uiM^ro

1 A No, I don't recall using that language or

2 having a specific opinion such as that, although I do, as

3 I have stated, recall feeling that we should take a very

4 close look at the question of legality and feeling that

5 we could not do indirectly what we couldn't do directly.

6 Q Would it be fair to say that your position at

7 that time was that there was, in your opinion, a very

8 good chance that such activity would be illegal under the

9 current state of the law?

10 A Well, I hadn't examined the law and I was not

11 in a position to pass judgment on it, but I felt that it

12 was important that it be looked at carefully and that it

13 was important, quite frankly, from a political standpoint

14 as well in terms of public support and that sort of

15 thing.

16 Q Did you have, at that time — let me just ask

17 you what was your position with regard to the policy of

18 third country solicitation, putting aside the legality of

19 it for a moment? Did you have an opinion?

20 A Well, I strongly supported the contra — did

21 and do strongly support the contra effort. I did not

22 really have a specific opinion with respect to the

23 question of third country solicitation as long as there

24 was no question of illegality apart from the public

25 relations and public support and Congressional support

UNCLASSIFIED

681

imanssw

1 aspect.

2 Q Do you recall whether or not the President had

3 or expressed an opinion at that meeting about either the

4 policy or the legality of third country solicitation?

5 A I don't recall whether the President expressed

6 an opinion, but the meeting, as I indicated earlier, I

7 think ended in a decision to take a close look at the

8 question of the legality of third country solicitations.

9 Q I've shown you earlier minutes of an NSPG

10 meeting for May 16, 1986, during which time the subject

11 was again discussed. Do you recall that particular NSPG

12 meeting at which you were in attendance?

13 A Well, I do now that I've seen the minutes.

14 Q And at that meeting some further discussion

15 was held about the possibility of approaching third

16 countries for support for the contras; is that correct?

17 A That's correct.

18 Q At that point there was a change in the law

19 with regard to whether or not such activity was

20 specifically addressed as being appropriate or not by

21 Congress; is that correct?

22 A That's correct. Evidently Congress

23 specifically provided for third country solicitation for

24 humanitarian assistance.

25 Q Having read the minutes, did you recall

mtmmw

682

UNCUSSIFIED

1 anything beyond what's contained in the minutes with

2 regard to the positions of the various people in

3 attendance on that issue?

4 A No.

5 Q What was your position on that matter at that

6 time?

7 A Well, to be very honest with you, I'd have to

8 reconstruct my position from the minutes, and my position

9 was that it was important that we do what we could to

10 sustain the contras as a viable force during the

11 implementation of any Contadora agreement, and I see here

12 where I said that it would appear that Congress had

13 changed the law with respect to the question of our

14 approaching other governments for assistance.

15 MR. MC GRATH: At this point it might be

16 appropriate to mark the minutes as an Exhibit.

17 MR. SMILJANICH: Sure, why don't we do that?

18 (The document referred to was

19 marked Baker Exhibit Number 1

20 for identification.)

21 BY MR. SMILJANICH: (Resuming)

22 Q Mr. Secretary, Assistant Secretary Elliott

23 Abrams has referred to this whole subject of third

24 country solicitation as "tin cup diplomacy", and I

25 believe Secretary Shultz has also expressed a general

UNMSIFIED

683

UNfliSSIFIED

dislike Cor this as a policy matter. Did you have any
opinions one way or another with regard to the overall
policy concerning third country solicitation?

A No. I suppose my view would comport with
theirs, that it would be far better for the policy to be
supported by the legislative branch of government and for
the funding to come from appropriations.

Q Did you have or do you have at this time an
opinion with regard to whether or not third country
solicitations will always give rise to a question of quid
pro quos.in connection with any contributions?

A I didn't have an opinion then. I was not
really involved in the business of third country
solicitations. That wasn't my responsibility, and I
didn't do any of it.

Q Okay. In the summer of 1984 the evidence is •
that money began to arrive on behalf of the contras from
^^^^1 sources . Did you have any knowledge, starting in
the summer of 1984, that^^^^^^^^were making any
contributions directly for the contra effort?

A None that I can recall.

684

9
10
11
12
13
14
15
16
17
18

Q When the matter of third country solicitation
was discussed in either the summer or fall of 1984 do you
recall or were you aware of any other planning to prepare
for the impending cutoff of aid for the contras via the
Boland II amendment?

A I don't recall being aware of any. I just
simply don't recall it. I can't tell you that there were
not discussions involving private assistance and that

yWtSSSIFIED

685

mumm

1 sort of thing, but I don't recall those and I didn't, the

2 best I recollect, attend any meetings called for that

3 purpose.

4 Q Do you recall any discussions concerning the

5 involvement of the National Security Council staff on

6 behalf of the contras to fill the breach created by the

7 cutoff of funds to the CIA and Department of Defense?

8 A No. The only thing I recall involving the

9 National Security Council staff would be the public

10 liaison activities where we would have briefings in the

11 Executive Office Building designed to build public

12 support for the contra policy. Those went back to, I

13 would imagine, the end of '82, start of '83. And those

14 were held by the public liaison people in the White

15 House, not the National Security Council, but they would

16 have National Security Council staffers brief

17 occasionally the diplomatic and military situation.

18 Q But this was all in connection with a public

19 diplomacy —

20 A Public diplomacy effort. It was basically run

21 by Faith Whittlesey's shop in the White House.

22 Q Okay, one last area. .-"Were you aware during

23 your tenure as Secretary of the Treasury, starting in the

24 spring or summer of 1985, up- through November of 1986, of

25 any activities on behalf of the United States which have

ummiED

686

UNCUSSIFIED

1 come to be Jcnown as the Iran initiative — in other

2 words, the whole matter involving trading of TOW missiles

3 or HAWK spare parts to Iran in an attempt to get our

4 hostages in Lebanon released?

5 A No.

6 Q Anything with regard to our cooperation with

7 the government of Israel in connection with this

8 provision of military supplies or equipment to Iran in

9 connection with getting our hostages released in Lebanon?

10 A During 1985 and '86?

11 Q • In '85 and '86 specifically.

12 A Not that I recall, no.

13 Q You had no knowledge or awareness of the

14 matters which have come to be known as the Iran arms-for-

15 hostage deal? You had no knowledge of it at the time?

16 A I had no knowledge. I had no knowledge of any

17 dealing with Iran of arms for the release of our

18 hostages, no.

19 Q What about dealing in arms with Iran in

20 connection with the opening up of a new strategic

21 relationship with Iran?

22 A No.

23 Q You were not aware of Mr. McFarlane's visit to

24 Tehran in May of 1986?

25 A No, I was not.

OttCtJtSSIFlEO

687

UNCLASSIFIED

1 MR. SMILJANICH: Thank you, Mr. Secretary.

2 That's all the questions I have.

3 MR. MC GRATH: I would just like to let the

4 record reflect that the Secretary appeared here

5 voluntarily today to cooperate with the Committee and its

6 investigation and that these proceedings will be

7 classified at a rainimum of the Top Secret level. We

8 appreciate the Committee's assistance.

9 MR. SMILJANICH: And we appreciate the

10 Secretary's cooperation in this matter.

11 (Whereupon, at 9:50 a.m., the taking of the

12 instant deposition ceased.)
13

14 Signature of the witness

15 Subscribed and sworn to before me this day of

16 , 1987.

18 Notary Public

19 My Commission Expires:

mmim

688

UNCUSSIFIEO

czrt:?icati 0- Ripcaris

, z'ns o::i:ar De::re vr; 3:3 :.-.a

rajDir. ? ;ap3S'-:-3a v;

can, do la:

ippears in "ha rsregomg .epos:

: sa l:

ca.cen by ae ro :he best of my ability ana charea:
mdar ny iireccion; thac said deposition is a true ra:or:
givsn Dv said witness; thac I aa neither counsel :or, r.
eoiploved by any of the parties to the action in wnich th:
was ta*en, and further that I am not a relative or anplo;

witness ■-■ a 3

ced to ::'?e-.
of t r. e test
ateu to, -. 0:
s . deposit lo:
e e of any

;orney or coun

sel employed by the parties thereto, nor financia-.y

or otherwise interested in the outcotne 0: the

. oami ss ion exp ir

NOTARY ?':3LIC [

es:_9^jSl±

UNCLASSIFIED

689

f|05

690

TRANSCRIPT ""^-^^e;
OF PKQCEEDCJJGS

UNITED STATES SENATE
SECRET MILITARY ASSISTANCE TO
IRAN AND THE NICARAGUAN OPPOSITION

DEPOSITION OF LIEUTENANT GENERAL PETER G. BARBULE5

■^^^cuss/n©

Partially Declassified/Released on 1-4-^'
under provisions of E.O. 12356
by N. Wenan. National Security Council

Washington, D.C.
Tuesday, September 22, 1987

UNCLASSIFIED ~

Ace-Federal R eport ers, Lnc.

SftfTKjfypf Wtpfwtfn

■m North C^tol Street

Washington, D.C. 20001

(202) 347-37D0

IStalioawidtCovci^i
WaI* jJO" oo4o _

SECREtr "«'«:=^^-^^«-^

691

TRANSCRIPT
OF PRQaEEDINGS

UNITED STATES SENATE
SECRET MILITARY ASSISTANCE TO
IRAN AND THE NICARAGUAN OPPOSITION

DEPOSITION OF LIEUTENANT GENERAL PETER G. BARBULES

Washington, D.C.
Tuesday, September 22, 1987

Partially Declassified/Released on

under provisions of E 0. 12356
by N. Menan, National Security Council

Ace-Federal Reporters, Lnic.

Sifftotypt /vportprs
444 North CapitDl Serm
Washington. D.C. 20001

(202) 347-3700
Nation wi«k Cowiagc

800-336-6646

Miy^iiFipn

692

UNULAbbiritU

SECRET

UNITED STATES SENATE
SELECT COMMITTEE ON
SECRET MILITARY ASSISTANCE TO
IRAN AND THE NICARAGUAN OPPOSITION

DEPOSITION OF LIEUTENANT GENERAL PETER G. BURBULES

Washington, D.C.

Tuesday, September 22, 1987

Deposition of LIEUTENANT GENERAL PETER G. BURBULES,

called for examination at the offices of the Senate Select

Committee, Suite 901, the Hart Senate Office Building, at

9:45 a.m., before LOUIS P. WAIBEL, a Notary Public within

and for the District of Columbia, when were present on behalf

of the respective parties:

JOHN SAXON, Esq.
Associate Counsel
United States Senate

Select Committee on Secret

Military Assistance to Iran

and the Nicaraguan Opposition.

ROBERT W, GENZMAN, Esq.
Associate Minority Counsel
ROGER LEE KREUZER,
Investigator

United States House of

Representatives Select

Committee to Investigate

Covert Arms Transactions with Iran.

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12356
3tional Security Council

j/Released on
'3v::ions of E.O. 12356

693

uNci^sm

COLONEL JOHN K. WALLACE,
Office of the Secretary
Headquarters,
Department of the Army

III, Esq.

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CONTENT

Lieutenant General Peter G. Burbules
By Mr. Saxon

EXAMINATION

EXHIBITS

BURBULES EXHIBITS

IDENTIFIED

Exhibit 1

Exhibit 2

Exhibit 3

Exhibit 4

Exhibit 5

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PROCEEDINGS

li Whereupon,

PETER G. BURBULES

was called as a witness and, having been first duly sworn,

was examined and testified as follows:

EXAMINATION

BY MR. SAXON:

Q Will you state your name for the record, please,
sir.

A Peter George Burbules, Lieutenant General,
United States Army.

Q And what is your current position. General
Burbules?

A Deputy Comaanding General for Material Readiness,
United States Army Materiel Command, Alexandria, Virginia.

Q And when did you assume your position at the
Army Materiel Command?

A I assumed my position, I believe, on the 1st of
June 1985.

Q *86?

A Yes, '86. Yes, you're right.

Q And prior to that, sir, what was your position?

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A I was Commanding General, Missile Command,
Huntsville, Alabama, Redstone Arsenal.

Q And what were your dates of service at MICOM,
if you recall?

A It's approximately from May of '85 to late May
1986.

Q Sir, as you know, the area of our inquiry that
concerns you has to do with the shipments to TOW missiles
that took place from Anniston Army Depot through MICOM in
1986. There were three shipments. The first shipment took
place in February, while you were still at MICOM; the second
shipment was taking place about the time you were leaving,
and the third shipment took place in November, after you
were in your current position at AMC.

Then the HAWK shipment tasking caune down in
early April and was being worked through the month of April
of 1986.

Those will be the two things we will focus on.
In a previous meeting with you on June 2, 1987,
Roger Kreuzer, a House Staff Investigator, and I met with
you. We covered a fair amount of ground which we have put
in an interview memorandum which is available for subsequent

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readers of this deposition, so I'm not going to take the
time to cover all of the material in that memorandum, and
that was the subject of our earlier discussion, where you
were, on what day and who said what to whom.

In terms of the general picture, what we want
to do, specifically, is to focus on the pricing questions
which attended the first TOW shipment and then some questions
about the HAWKS.

Let me ask you, sir, when you became aware that
there was a tasking to MICOM to ship TOW missiles to, at
the time its customer was CIA.

A As I mentioned to you before, I became aware when
colonel Jim Lincoln, Project Manager for the TOW missile
system, came in my office and told me that there was a
classified movement under way and that he had concerns about
the price that was to be charged on it. He felt that the
Army was going to charge too low of a price, and I believe
he asked my advice and asked for my support.

Q All right. Let me fill in one or two things,
sir.

When he came to you, this was after he had
already received the requirement and had begun work; is that

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correct?

A Apparently so. How long after, I don't know.

Q And in fact. Colonel Lincoln had been told by
his point of contact here in Washington, at DA Headquarters,
that he should not inform you; is that correct, sir?

A I found that out very late. As a matter of fact,
earlier this year, 1987.

Q So, while in a technical sense. Colonel Lincoln
may have been countermanding the instructions he was given,
he had some concerns and, as his commanding officer, he
went to you with those concerns?

A Yes. Apparently that's why I ws brought into
it so late, because of that caution not to, you know, it
was highly classified, not to tell anybody, which I have
learned since.

Q All right, sir.

When he came to you, did Colonel Lincoln give
you the specifics of the price question that he was concerned
about?

A No. Only words to the effect that they're asking
us to charge the older price for the missile, whereas the
cost to replacing them currently with new missiles would be

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much more, and the Army would end up with fewer missiles in
the stockpile.

Q So as best as you recall it, the entire subject
for your discussion with Colonel Lincoln had to do with
replacement price?

A Right.

Q And for the record, the Army sold to the CIA and
subsequently to the Iranians, basic TOW missiles, which were
entered in the Army Master Data File or AMDF, at a price
of $3169. They had to have safety modifications, the
missile ordnance inhibitor circuit or MOIC — M-0 I C — '
in order to bring them up to the condition code alpha, which
had been specified by the CIA.

Unbeknownst to certain parties involving these
transactions, when the Army realized, in the early '80s,
that certain of its basic TOWs had to have the safety
modification, MICOM officials created a new national stock
number and a new price for the basic TOW that went into the
AMDF, which had a MOIC

Rather than taking $3169 and adding $300 and getting
$3469, which seeins logical to do, the decision was made, as
we have subsequently learned, to add to the entry price of

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S3169, some inflation in the price for the subsequent
purchase of basic TOWS, along with one other factor, having
jl an eye to the cost of conversion, the cost of the MOIC, in
order to create a higher price for the basic TOW with MOIC
of $8435. And the price of $8435 is separate and distinct
from the replacement cost of selling a basic TOW and
replacing it with, say, TOW-II, at a price of $11,000.

So if you will follow that analysis, let me ask
this question:

When Colonel Lincoln came to you, as I understand
your testimony, he was saying, we're selling basic TOWS.
We're getting" — he may not have said $3469 or $3500 -- but
"we're getting a price in the low range. We're going to have
to replace them with I-TOW or TOW-II, and that costs a lot
more . "

Is that the way he put it to you?
A Yes. Did not discuss any specific dollars.
Didn't get into those details. Just the basic concept of
original acquisition costs versus replacement costs.

Q Just to make sure, then, that we understand
your testimony for the record, he did not talk about the
fact that there had been a discovery of a second price for

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the basic TOW with MOIC?

A No, he did not.

Q All right, sir.

And if I understand your testimony, at no time
when Colonel Lincoln came to you in his discussion, were
specific price amounts discussed.
Is that correct?

A That's correct.

Q Did you have a general knowledge at the time of
these transactions and at the time you had a discussion with
Colonel Lincoln, that when the Army took a basic TOW and put
the MOIC on it, that that changed its national stock number
and gave it a new and higher price?

A No, I did not know that. Nor, as I testified to
you before, did I know anything about a MOIC, in that I'm not
a missile expert. I was sent down there to assist in their
procurement programs, and I did not know the details of those
missile systems.

Q All right, sir.

I want to ask you. for an opinion, and I clearly
denominate this question as an opinion question.

In your opinion, from the time you spent at MICOM

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jl and the many years of service in the Army, should someone who

, was in a position of being the Project Manager for the TOW

■Office have been familiar with the details of pricing of the
missiles under his control, or are those the kind of details

I that people working for him would better be expected to know?

|| A People working for him better understand that,
because you have to understand the Project Manager as generally
a very small office, and he is supported more or less by the
large Commodity Command, the major support command, and all
the staff. there, and they're the ones that provide the
expertise.

For example, he does not have item managers under
his control. They work for the Material Management
Directorate. He doesn't have any lawyers under his control.
They work with the Legal Department. He doesn't have quality
assurance specialists, except maybe just one representative.
Those work for the Quality Assurance Directorate. So he
draws his support fran the major Support Command and deals
mainly with programmatic issues, you know, costs, scheduling,
and technical performance in a broader sense, leaving the
details to experts in that area. And it's a very complex
business, as you found out, and just think, it would be

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|i unreasonable to expect the Project Manager to know the details
^ of the individual costs of individual parts of his weapons.
|, Q What I would like to do now. General, is to show
jjyou a few of the documents that create a paper trail on the
TOW transfers. I have no reason, necessarily, to expect that
you have ever seen these and, in fact, if you haven't, that
would not only not surprise us, but probably, given your level,
would make perfectly good sense that you have never seen them.

What I would like to do is have marked as
Deposition Exhibit 1, and give that to you and give you a
chance to look at it, but before you do, let me tell you what
you're looking at. You are looking at the Material Release
Order or MRO, as it's called, which is a standard MICOM form,
that was prepared for each of the three coshipments, and I'll
give you a moment to glance at that.

(Burbules Deposition Exhibit 1
identified.)
THE WITNESS: Yes, I think I can answer your
question now. I did not see these while I was at the Missile
Command. I did not see them in any aspect of my involvement
in this affair. I think I saw them when Mr. Mike Sandusky,
of our headquarters, was doing his investigation, his

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after-the-fact inves\:.i.gation. He tried to assist the
Department of Army Inspector General and ourselves in
reconstructing the cost history. I think he may have flashed
these by me in showing me how he was reconstructing the price
history. This is all after-the-fact.

Q What I would like you do is take a look at, while
some of this material is second and third and fourth
generation copies and some things are blurred, if you would
look at the quantity block of the 1000 that lets us know we're
looking at the first shipment.

If you look at the National Stock Number block,
the last four digits which are 1512, your specialist at MICOM
will tell you that 1512 — that's how they refer to it — is
the shorthand form for the basic TOW with the MOIC. Then if
you look at the unit price that's been entered at $8435, this
is the first document that was created when the tasking came
down from Washington to MICOM. This document was the basic
release order in order for Anniston Army Depot to begin work,
and the information on it was flown down from Redstone to
Anniston Army Depot, and I understand a hard copy followed.

If you turn the page to the second copy, this is
dated 16 May, for the second shipment of 508 TOWS, and

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I likewise, the S8435 price appears therein.

The last page is for the third shipment of 500
TOWS, and it has a price of $8164, which is different from the
$8435, because of the I-TOW conversion that was done, and that
shipment took place after you were gone. But the point from
these documents is that someone at MICOM, working in the TOW
Project Office, who prepared this Material Release Order
clearly knew that a basic TOW with MOIC cost $8435.

I take it from you saying you haven't seen this,
you also were never made aware that that was the price put in
the basic work documents at MICOM.

A No, I was not. And I can't even read the
signatures, but I see Mr. John Finafrak's name here, and he
doesn't work for the Project Manager. He was in the Materiel
Management Directorate, as I mentioned to you before. What
I'm saying is, that possibly this document was prepared in
the Material Management Directorate, not in the TOW Project
Office.

Q All right, sir. Let me ask you to look at the
second exhibit and ask that be marked.

This was prepared at Anniston Army Depot and, again,
there's no reason to believe you would have seen this document,

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|| but it is the Ammunition Planning Work Sheet.
jj Let me simply ask you first if you have ever

I' seen, generically, an Ammunition Planning Work Sheet or are
familiar with its use.

(Burbules Deposition Exhibit 2
identified. )
BY MR. SAXON:
Q Sir, if you would look in the quantity block here,
you see quantity of 1000. This is for the first shipment of
TOWS. The stock number shows the 1512, which means it's a
basic TOW with MOIC, and the unit price — this is all 1000,
so you if you do some quick division and drop the zeros, you
see the unit price is $8435.

A That tracks back to the $8435 that was on the
Material Release Order.
Q Yes, sir.

Now, as the folks at Anniston Army Depot then began
to work the requirement, they generate the next document in
the trail, and that is a standard transfer document which is
on DD Form 1348. I'll give you that.

A 21 January or February? I can't read that.

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Q January.

A January. Okay.

Q This is a copy — and I ask that be marked as

Exhibit 3 — of the first iteration of DD Form 1348, which, as
you see, is from Anniston Army Depot to Redstone, and if you
look in the quantity block, you see we've got 1000 missiles,
j and the stock nuinber again is the 1512 or basic TOW with
MOIC, and the unit price in the upper right-hand corner is
$8435.

. So again, the people at Anniston who were working
this apparently knew that a basic TOW with MOIC had that price
or had simply taken that price that came down from the MRO.

A I don't know where they get the price, nor do I
really know where the people at MICOM got the price, nor do
I know that that price is necessarily correct.

Q Well, after the fact, a number of people have
concluded that the price is not correct in terms of how it
went into the A^EF. At the time, it was the correct price,
according to the Army Master Data File for basic TOW MOIC,
and having interviewed and deposed the person who prepared
that Material Release Order, he said he took that figure not
so much from the AMDF. but from his head, because he worked

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with the TOWS all the time and knew that the basic TOW with

! MOIC had the price of $8435.

ji A Again, you say "the correct price," but I believe

I you're saying it was the correct price, because it was in the

!| AMDF. But because it was in the AMDF does not necessarily

mean that it's the correct price. Errors are made.

Q Yes, sir. But my understanding is that no one

knew that errors had been made in entering that price and that

was the price people worked with.

A Presumed to be the correct price.

Q Yes. I think that's a better way to put it. It's

the presumed correct price at the time.

Let me have you look now at the next exhibit and

ask that this be marked as Exhibit 4.

(Burbules Deposition Exhibits 3 and

4 identified.)

BY MR. SAXON:

Q This is a series of the same document, and the

reason it's a series is, this is for the first shipment of

1000, but each document represents a breakdown of a certain

portion of lot of that 1000, and this was signed at MICOM

by Mr. Chris Leachman, who at the time was the head of

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logistics for the TOW Project Office. He is now the TOW

il Project Deputy. And if you look at the unit price block and
II
r
track that all the way through on all of them, you will see

that --

A I don't see a unit price on the top one.

Q That has been left blank, yes, sir.

I A I see. What are the dates of these, relative to

the dates of the first ones we saw? This is 29 January.

Q Yes, sir; that's correct.

A And the other one is 21 January?

COL WALLACE: Yes, sir.

THE WITNESS: Have you looked into the possibility

that the folks may have started to move out on this, because

it was a rush shipment, started to move out, assigning prices,

and have you looked into the possibility that disputes over

prices occurred after these documents had been cut?

MR. SAXON: We have looked into just about every

possibility, aaid I don't mean to be glib about it sir, but

to ascertain when the prices entered into the document, when

a price disappeared from the documents.

BY MR. SAXON:

Q I guess the thing that strikes us at least curious

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is that in Exhibit 4, we have no price. Not that it isn't
S8435, but that it isn't even $3469, which is a price that
everyone at MICOM says they were working with, in terms of
hipment.

I| A I think it's a reasonable observation, and you
[ probably have asked why was the price omitted.

I don't know why the price is omitted on this
document.

Q And I take it that this would be the first time
you have been made aware that when the transfer document gets
to MICOM, and Leachman, on behalf of MICOM signs for the TOW,
that there is no price in the unit price block?
A No, I'm not aware of those details.
Q All right, sir. The final document is to show
you what happens when individuals from the Department of Army
Logistics Office, and in particular. Major Chris Simpson, who
is the Action Office for this, working under General Russo,
Simpson arrives on the scene at Redstone to physically take
possession of the missiles for the Army and then transfer them
to the CIA.

I'd ask you to take a look at this document and
have that marked as Exhibit 5.

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711

(Burbules Deposition Exhibit 5
identified.)
BY MR. SAXON:

If you notice a signature at the bottom of Major
Chris Simpson - and all of these documents have been
declassified in this redacted form, and we have blacked out
that particular name, but underneath has been put the letters
"CIA," and the particular individual who signed on behalf of
the CI, and then the price reappears in the price block, and
it's $3469.

Let me just ask, for the record, if you have ever
seen this document before.

A No, I have not.

Q And have you had any awareness of the fact that
that particular price was entered?

A No. Again, I had no involvement in those times
with the detail prices, other than the initial acquisition
cost and replacement value on those.

Q Now when the issue of replacement cost was
flagged for you by Colonel Lincoln, what action did you take?
Did you, in fact, have a phone conversation with General
Russo?

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■■HOUM. Mnrrtii. inc

A I believe I did and expressed our concerns, and,
as I mentioned to you last time, General Russo noted my
concerns, and he said he'd look into it. And again, reaching
back in memory, I don't know how I found out, whether he
called me back or whether a message was sent out or whether
Colonel Lincoln came back in and told me that Department of
the Army had decided to go with the lower price, the original
acquisition cost. And I accepted that as a decision by my
higher headquarters, a decision by competent authority and
dropped the matter.

Q And was it your understanding that the issue of
replacement cost in whatever way it was done up here had been
considered, but basically rejected?

A Yes.

Q When you talked with General Russo, did he tell
you anything about the nature of the consideration that would
be given, by whom it would be considered?

A Nothing. I knew of this only as Operation
Snowball, didn't know anything about the CIA's involvement.
Frankly, I thought it was a classified FMS sale directly to
a foreign government.

Q Well, we certainly know it was classified and it

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was directed to a foreign government.

A No, directly, directly to a foreign government.
Not directed.

Q Did General Russo indicate to you anything about a
ceiling, which the customer had to operate with or for which
reason it might be difficult to get a replacement cost?

A No.

Q Did he indicate to you that the issue of a
replacement cost had already been pressed forward by the Army
and been rejected?

A NO.

Q None of that?

A No. Merely that he would look into it, as I
recollect.

Q Did you mention to General Russo at that time what
any of the replacement cost would be?

A No. Because I didn't know uhat the replacement cost
would be. Just that it probably would have been substantially
higher.

Q And he didn't ask what the specifics would be,
in terms of replacement cost?

A No, not to my recollection, anyway.

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Q I'm ready to move off the TOW subject.

Is there anything else that you think we should

know, sir?

A No, I can't think of anything that I can add.

MR. SAXON: Bob? Roger?

MR. GENZMAN: Nothing.

BY MR. SAXON:
Q What I'd like to do now, briefly. General, is go
to the subject of the HAWK missile repair parts. Let me
simply ask you for the record when you first became aware
that MICOM was involved in what we now know was a follow on
to the TOW requirement, with the same intermediate customer
being the CIA and the same ultimate customer being Iran.

When were you first made aware that there was a
HAWK requirement?

A This year, after I had come up to this headquarters
and when the situation broke and the investigations were
begun. Only then. And frankly, I learned about it, I guess,
on the television when there were allegations about —
actually, as I learned it first, they were HAWK missiles, I
think was what the TV program said. And I knew nothing about
that.

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Q In fact, as we now know, there were actually HAWK
missiles shipped from Israel to Iran in November of 1985 in
a quantity of 18, 17 of which were returned to Israel, and
there were ultimately to have been 120 shipped, but in terms
of our particular focus with you, it's the HAWK equipment
repair parts that MICOM was tasked with providing on April 10,
1986.

A The HAWK Project Man§ger did not inform me while
I was down there that this was going on. I can't speculate
why. Perhaps he was under the saune cautions of secrecy.
In any event, I was in the process of departing the Command.
I had been selected for promotion, and I was in the process
in early or mid-May of departing Missile Command.

Q For the record, do you recall who the Project
Manager was at the time?

A Yes. Colonel Sam Liberatori — L-i-b-e-r-a-t-o-r-i.

Q I take that from your testimony then, not only
did you not know that a requirement had been passed down by
headquarters of the Department of the Army to the HAWK
Project Office on ground equipment repair parts, but that no
one in the time you were there, admittedly, as you were
transiting to your new assignment, no one ever brought to your

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attention the fact that there might be some readiness impact
from the provision of these repair parts?

A No.

Q Let me walk you through what we now understand
to be some of the facts of the transaction and see if you
could render us a judgment from the roughly two years you
spent as MICOM Commander.

A I was only there about eight or nine months.

Q ,1 see. That's correct. From August 9, 1985, to
May of "8.6.

When the requirement was imposed on MICOM on
April 10, a list was transmitted, fax'd from AMC, which had
gotten a list from Major Simpson, who had gotten it from his
CIA counterpart, who had gotten it from Colonel North, who
had gotten it from Mr. Ghorbanifahr , who gave it to North
in Paris in March of 1986. And in fact, Ghorbanifahr got it
directly from the Iranians. So that's the trail of this list
of HAHC r^air parts. It gets down to MICOM, and as best we
can determine, the officials in the HAWK Project Office did
a terrific job, one heck of a job, on short notice, and with
a lot of pressure, to cast about and see where these parts
were, the location, the availability, the quantities in

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I which they were available and any possible readiness impact,

.i if they were provided in full in those quantities.

ji The same day, or later in the evening, that

information was fax'd from Redstone Arsenal up to Department

! of the Army, at which time it was determined -- the Iranians
had asked for 234 line items of HAWK repair parts. It was
determined that if they met all of the quantities requested
on the ones that they could locate — and only 221 repair
parts could, be located — that there would be a potential
readiness. impact on either 46 or 47 of the items.

The actual list provided us by MICOM said 47; the
DA IG said 46. The breakdown on those numbers comes from the
DAI IG. I don't have the additional item, I think the
number is 47, The DA IG breaks down to 46, as follows:

On 15 of the items, it would deplete our inventories
100 percent, if we met all of the requirements on requested
quantities. On 11 of the items, it would deplete them in
excess of 50 percent, and on 20 of the items, it would be less
than 50 percent, but still significant depletion.

That information was provided to the Department of
the Army, As MICOM then worked with Simpson, over the matter
of a few days, they argued about various quantities. The

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numbers as to quantity were actually reduced, so the impact
was not only with reqard to the 46th or 47th items, because
all of those materials were not provided.

Let me stop at this juncture and ask you, for the
record. I assume you were never made aware of any of this
information?

A No, I was not.

Q All right, sir.

What happens next is that Major Simpson is told
by John Chapman and Billy Reyer, as MICOM, that with regard
to the quantities that he says they should provide, that
there would be significant depletion as to 10 or 12 items,
and in fact, 100 percent depletion as to 10 or 12 items, which
they thought would have an adverse impact on readiness.

Major Simpson discusses that with General Russo.
There's some back and forth between Simpson and his CIA
counterparts and, in essence, the CIA says that you must
ship all of the quantities requested. Simpson then, on
April 23rd, prepares a "must ship" list that is fax'd down
to MICOM, and they realize that they have to provide the
quantities that are requested.

The ultimate conclusion that has been presented

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us by appropriate officials at MICOM who work with the HAWK,
and then the supervisors of those individuals, was that we
did actually provide 10 to 12 items that totally depleted
our inventories, and there was a readiness impact on some of
those items, that, in particular, where there was a serious
readiness impact on one of the items, that they put it in a

The Iranians had asked fc^^Hbf these items. We
only had^^^^^^^^^^H in our inventory. The MICOM officials
with whom we spoke protested and did not want to provide those.

In essence, the CIA overruled the Army an<^^^|
^^^|had to be provided.

The make whole date that MICOM has give, if we
accelerate the procurement pipeline from the vendor which, in
this case is the Varian — V-a-r-i-a-n — Corporation and
accelerate those that are down for maintenance and repair,

ONEI^SSIfii

720

^amms

is not until 1989.

I would simply ask for the record, if any of this
was ever brought to your attention?
A No.

Q Let me ask you now for an opinion, so I clearly
denominate that.

If anyone had come to you in this time period,
whether you were exiting or not, if, as MICOM Commander, this
had been brought to your attention - and we clearly understand
it wasn't - would it have given you any pause, and would. you
have taken any action if your specialist told you it would
deplete your inventory as to this one part being a high risk
category, and we wouldn't have

A You bet. I'd have gotten on the phone, just as I
did in the other case, and voiced my objections; however, 1
understand that there are national policy objectives that may
have equal important considerations, such as in 1973, in the
Israeli-Eqyption War. We drew down a lot of our stocks in
support of the Israelis.

Yes, that too hurt our readiness, but the idea is,
you know, meet the national policy objectives, and the whole

ONCEilSSIFfED

721

mumm

matter of defense is one of calculated risk with respect to

investments and how much you buy and how many days' supply
II
'^ you have on hand and where to position it, and so forth.

Those risks have to be weighed along with
side by side our national policy objectives, and I can only
trust that somebody who is a patriot and interested in the
national defense and interested in the survival of this
nation appropriately considered this at the appropriate level
and made the decision that the national policy objectives
were worth the risk of a temporary drawdown of readiness.

Q So, if I understand your testimony, it's not
simply a matter of saying readiness might be impacted; we
have to look at the broader national policy objectives.
But you also seem to be saying that you hope that that would
be a deliberative process and that the people making that
decision are clearly aware of the alternatives when they do
so.

A Precisely.

MR. SAXON: I think that's all I've got on the
HAWK repair parts.

Any further questions?

(No response.)

icraiTus INC

^mmm

722

mmmi

MR. SAXON: General, let me say, for the record,
you have been very helpful today and very helpful when we

i; saw you in June .

You would probably have been more helpful if
:i anyone had thought to share any of this with you at the time,
ji but that's not of your doing.

We appreciate your testimony and on behalf of
both committees, let me simply thank you.
XHE WITNESS Thank you.
• And I stand ready to assist in any way you may
request in the future.

(Whereupon, at 10:25 a.m., the taking of the
deposition was concluded.)

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Deposition of: Ana Parnett
Bxecutive Assistant United
States Attorney.

Friday, July 17, 1987

^fs-X

U.S. House of Representatives, Select Committee to
Investigate Covert Arms Transactions with Iran,
Washington, D . C .

Partially Declassified/Released on /-4 -S"^

under provisions of E.O. 12356

by N. Menan, Natioiul Security Council

Appearances

H. Thomas McGough, Jr.,
Associate Cousel, Senate
Select Committee.

\ Robert W. Genzman,

Associate Minority Counsel

Jack Perk ins ,
Department oC Justice,
Legislative Affairs.

mu^®

JACK BESONER S, ASSOCIATES, INC.
172 West Flagl er Stre et. Mia mi. FL 3313 (305) 371-IS37

737

mmim

MR. MCGOUGH: Good morning. My name is
Tom McGough. I am associate counsel with the
Senate Select Committee on the Iran-Contra «
matter.

MR. GENZMAN: Robert W. Genzman,
Associate Minority Counsel with the House
Committee.

MR. PERKINS: Jack Perkins. I'm with
the Office of Legislative Affairs, Department of
Justice .
BY MR. MCGOUGH:

Q. Would you please state your name.

A. Ana, A-n-a, Barnett, B-a - r - n- e - t - t .

Q. And what is your title here at the U.S.
Attorney's Office?

A. Executive Assistant United States
Attorney .

Q. What does-- what are the duties of the
Executive Assistant United States Attorney?

A. On paper, in the organizational chart,
I have supervisory responsibilities over the civil
section of the office, the appellate section of
the office, and the adn i nis t ra t i ve side of the
office, and I report directly to the United States

JACK BESONER & ASSOCIATES, INCT

82-690 0-88-25

738

wmM

1 As a practical matter, the lines aren't

2 that rigid.

3 Dick Gregorie lives in a parallel *

4 world, where he has supervisory responsibility

5 over a]l of the criainal side of the office, but

6 essentially, we are acting U.S. Attorneys, when

7 the U.S. Attorney is not here.

8 Matters that cowe up-- we just deal

9 with then on an ad hoc basis, and try to solve the

10 problems as they arise.

11 I also speak for the office. We have a

12 press policy where line AOSA's do not speak

13 directly to the press, or answer inquiries.

14 That's done by ayself or Dick Gregorie.

15 Mostly, I do it.

16 Just other things, as they come up.

17 It's very hard to say.

18 Q. Let ae see if I can get a picture oE

19 the organization of the office.

20 Leon Kellner is United States

21 Attorney.

22 Is there a first Assistant U.S.

23 Attorney?

24 A. Well, Dick and I are essentially the

25 firstass is tants

yNClASSIFiED

JACK BESONER & ASSOCIATES, INC.

739

mmm

When the ofCice got to be beyond a
certain number of AUSA's, that position got split.

For example, in the Southern District,
of Florida, they have three, instead of just two.
They have an associate-- a term of art.
I guess we're the first assistant.
Q. So then as an organizational chart
matter, you would be supervising the civil and
appellate and administrative, and Mr. Gregorie
would be supervising the criminal side?
A . Yes .

Q. Where does Mr. Scharf fit into the
organization?

What is his title?
A. Special Counsel, and if I might, I can
clear it up, if I can draw the little
organizational chart here (indicating).
Q. Sure.

A. I sometimes do things in the criminal
domain, and Dick, sometimes in the civil domain,
depending on who is here and what comes up.

Larry is over here (indicating). Then
we have the others (indicating).

Larry doesn't report to anyone but the
U.S. Attorney, and has tasks as assigned.,'

neu^sL

ES, INC.

740

UNCLASSinED

If I had to describe him most commonly,
he is the office oracle.

He's brilliant, and has many, many, ,
many years of prosecutorial experience, and as a
result, he handles the extremely complex ca3(?s or
novel cases that arise, that are usually given to
him for review to deal with in the office.

Q. In your position as Executive Assistant
United States Attorney, do you still maintain a
case load of your own at all, or do you deal with
cases, solely fro* the supervisory standpoint?

A. Fro« a supervisory standpoint, except
as things cone up.

I have-- as a request of a judge, I
have a case before that particular judge to try,
but I don't ordinarily have a case load in this
pos ition.

Q. Is that a civil or criminal matter?

A. A civil matter, a class action filed by
Haitian refugees that were retained.

Q. I would like to get a little bit of
your background, if I could, starting with law
school .

When did you graduate, and from where?

A. Okay. I graduated from law school-- lot

iwssira

JACK

, INC.
■» ■> 1 1 n I yn^

741

KASSm

me start with undergraduate school, because I'm a
late bloomer.

Actually, I went to law school latr. I
just didn't-- why did you go to law school so
late, right?

I graduated with a 8A from
undergraduate school in '68 from the University of
Florida .

I have a Masters Degree from Florida
State University.

Q. What is that in, the Masters Degree?
A. In psyche, in 1970.

Then I did real work for a few years.

I taught at Miami-Dade Community
College and was a counselor there, and then I
started law school in '73, so I graduated from law
school in '76 from the University of Miami.

Right out of law school, immediately
out of law school, I went to work for the State
Attorney, which is what we call the District
Attorney here in Florida, here in Miami.

I was there until 1978, when I came to
work here.

Q. Here you doing criminal trial work in

"' "'" ' uNCUssm

JACK BESONER & ASSOCIATES, INC.

742

ONCIASSIF I ED

A. Yes, I did, criminal, and when I came
here, I started in the civil division and stayed
there. ,

Q. So in 1979,. you cane in as an Assistant
United States Attorney?

A. No. Actually, it was aid '78.
Q. And how long were you, if I could say,
a trial attorney in the civil division?

Is that a Cairly accurate description
of the position you filled?
A. Yes.

I tried more cases than any other civil
attorney has ever done in this office.

I did all of the swine flu litigation.

I was there until Stanley Marcus became
U.S. attorney, which I think is was '82.

MR. GGNZMAN: It was '82.

THE WITNESS: When he became the U.S.
Attorney, he appointed Leon Kellner chjejijf of th^i
civil division .

He brought him in from private practice
in New York, and appointed me to be the deputy
chWiV of the civil division, and I did maintain a
case load, but a more limited case load that was
just limited to larger cases, or things a{ssigned

UNCLASSIFB

ATES, INC,

743

the U.S. Attorney .

wmms

Then some time, a year or so after that
time, Leon Kellner became the Executive Assistant,
and Stanley Marcus made me the chief of the civil
division.

I'm a little fuzzy on those dates.
Then he was appointed judge, and I have
lost track of when that was, but some time in-- I
left the office in early '85 to private practice.
I thought that would be a good time to
try it, and then in October, late October of '86--
no. Excuse me. Late October of '85, I came back.
I didn't stay very long-- to this position.

Q. What did you to in private practice?

A. Civil litigation with a civil firm.

Q. What is your co««ercial telephone
number here?

A. CoBBercial telephone number is area
code 305-536-5242.

Q. Is that the saae as your FTS number?

A. No. The prefix is gp .

Q. And the saae four digits?

A. Right.

Q. Do you know Leon Kellncr's-- what is
his-- does he have a direct dial number or direct

■> West Flaaler Str

S|>tJVrES, INC.
Miami . FT. "^ "^ 1 T f 305^ ■> 7 i

744

f^r^.^^^'rn

exchange number?' ''V-^u-

A. 5401 is his last four digits, and the
same thing, the 536 or the 0^ exchange. »

Q. And what's the general office number
here?

A . I do n ' t k now i t .

Q. Now, obviously we're here to discuss
primarily an investigation that's gone by a number
of names .

We have called it the Garcia case, the
Cuervo case, the Costa case.

Does it have a name that everyone would
recognize it by in this office?

A. Costa, but-- although no matter what
you use, we all recognize it.

Q. Okay. Let's keep the terminology
straight. Let's call it the Costa case.

What was your first contact with the
Costa case?

A. Well, there's really two ways of
answering that.

My first official contact with this is
today, and I have to refer to this chronology that
Jeff Feldman prepared, because he's the only
compulsive person that kept^J^tes and tim'es of

.MWtUSSMtn... ,.

745

wmm

things, and none of us did.

Q. That's fine. You'll provide us with a
copyof — ^

A. Certainly, although you have these
her e .

Q. Are those your notes?
A . Yes .

Q. We would like to see all documents
tha t--

MR. PERKINS: Let Be just give it to you
through channels, so we can keep track.

MR. MCGOUGH: I prefer to/^have it
today, really even before we adjourn the
depcs i tion .

I will be glad to look at the documents
and see if there are any questions we have on the
documents before we go back.

MR. PERKINS: He don't want to get into
the business of handing over the-- handing over
documents every time a witness goes to be
interviewed .

MR. MCGOUGH: I understand that, but if
a witness uses a document to refresh their
recollection during the course of a deposition, we

" " " °^ ° "° " pussiREa

JACK BESONER i A S S C lAT E S , I N C .
172 West Flagler Street, Miami, PL 33130 (305) 371-1537

746

«ussiam

1 I thinlc it's pretty clear, and we'd*

2 like to see it during the deposition.

3 I guess to put it bluntly, if the />

4 witness refers to the document-- we'll take it

5 through the noraal channels, but if she does, we

6 would like to refer to it before the end of the

7 deposition, in case there are any questions off of'

8 it, then we can take notice of that without

9 reconvening the deposition.

10 BY MR. MCGOUGH:

11 Q. You said you had two ways of answering

12 the question-- going back to the question.

13 A. Officially, on March I4th of '86 when

14 Jeff Feldnan came into my office with, according

15 to this-- with Kevin Courier, an FBI agent.

16 Q. Now, do you-- on the chronology, do you

17 recall that Meeting?

18 A. I recall the meeting very vividly.

19 I just don't recall the day it took

20 place, the timing of it.

21 Q. Can you tell me-- you said that was

22 your first official contact.

23 A. Yes.

24 Q. Did you have unofficial contact that

25 Bight have predated that? |||LlA| AOOI^''' T

UWbLAooir.^J

JACK BESONER & ASSOCIATES, INC.

747

WASS»

1 2

k. Yes .

I only realize that in retrospect.

Toward the end of '85, soon after I <
returned to the office in this position and
started getting-- well, the first thing I got is--
the clerk of the court called me up. That's one
of the things I do when problems come up. I handle
those problems .

He said, "He have a letter here. We
don't know what to do with it. Should we file it
as a case? It involves--" and I said "Send me a
copy and if it's--"

As it turned out, it was a letter
written by Mrs. Garcia, you know, protesting the
treatment of her husband in the course of his
trial .

I basically thought another pro se
defendant. He have hundreds of these. Pile it in
the crank file. That's that.

It was only in retrospect, as things
are developing-- I said "Oh, I think I have seen
these letters . "

These letters, throughout the next few
weeks, I guess they were mailed to lots of people
all over. I don't know who all got them»

ES, INC,

748

MNClASSiHty

1 I know the 11th Circuit got them, and

2 they started sending us copies and we started

3 getting copies o£ these letters back Crom various

4 people, additional people that got them.

5 Q. When you say they were sent-- not by

6 thi s of f ice?

7 A. Oh, no.

8 I have to assume it's Mrs. Garcia that

9 sent out a nailing oC these letters.

10 Q. Did you do anything with that letter,

11 other than put it in what you-- I think you

12 referred as a crank letter file?

13 A. The first one, no.

14 We had one that was referred by the

15 11th Circuit, and they decided to deal with it as

16 though it were a habeas corpus, you know, because B

17 it was a pro se filing, and I think it was passed

18 along to the civil division, but I'm pretty sure

19 nothing ever became of it, because it was a

20 petition filed on behalf of someone, rather than

21 by the prisoner himself.

22 It was dismissed. I think the 11th

23 Circuit decided to dispose of it in some fashion.

24 I didn't follow-up on it.

25 Q. So you didn't pass it on to Mrj. Kellner

S, INC,

749

iiHtftssro

or Main Justice, anything like that?

A. No.

He, I think, got a letter, also, and .
then passed it on to me.

I said, "Yes, I think I have seen it
before. It's an ongoing case, an active case,"
and I think eventually we passed it off to Jeff,
who had the underlying case, once we figured out
it was something that involved something that was
ongoing and pending.

Q. Do you recall what the allegation in
the letter was?

A. That the judge had been extremely
unfair by keeping out evidence-- I guess there had
been a supression hearing of some kind, and that,
you know, her husband was innocent, and he had
been-- he hadn't been allowed to prove his case.

It was a funny allegation. He said his
attorney was in cahoots with the government and
conspiring to convict him, and that's why he
wasn't able to put in all of the evidence that he
needed to put in to prove this case.

You know, allegations-- that's very
broad. That's not the details of it, but that's
the general nature of it, as I remember. .'

— .^H^HSgD... .c

750

Ooai li-u

1
2
3
4

5
6
7
8
9
10
1 1
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Q. Between these letters, all of this, you
really didn't take any affirmative steps?

A . Right. ,

Q. Did you have any contact with the Costa
case prior to March 14th?

A. From time to time, and I really can't
remember now if it was really before or after--
you know, there started slowly to be from time to
time, a call from a newspaper or somebody, saying,
you know, "There's a man named Jesus Garcia--"
there seemed to be interest in him, and it seemed
unusual for a gun case, but that's the only thing.

Q. And did those press inquiries predati^
the March 14th meeting, as best you can recollect?

A. I'm really fuzzy on that.
I really can't tell you.
I have to suspect-- I have to think
that it probably did, because a lot of them had
questions about-- not a lot, but-- a lot, a few,
two, three, questions about Garcia, about who he
was .

I know we mailed out-- people asked for
copies of the indictment.

An L.A. paper stands out in my mind as
asking for copies of the indictment, and. M anted

JAC

ymASSL.

NC,

751

wmm

copies of pleadings.

I said, "We send out copies of
indictments, because they are public," but
pleadings, it gets into too much trouble to send
ou t .

Things like that. Nothing that really
seemed out of the ordinary. Only in retrospect it
does. At the time, it didn't.

Q. Let's go to March 14, 1984.

What do you recall about that meeting?
A. That Jeff and the FBI agent caae in
very excited, that they had, you know, heard about
the plot to assassinate a U.S. Ambassador and blow
up embassies, I believe it was in Costa Rica.

At that time, I think they camo into my
office, because the U.S. Attorney may have been in
a conference or had people in this office and his
door was shut .

I thought, oh, my God, this is really
serious stuff. We have got to, you know, do
something about this, and look into this right
away .

What really stands out in my mind, as
we're talking about this, it's being relayed in a
very excited manner

JACK BESONER

752

KASsra

Leon walks in, opens the door in my
office, and says-- Leon comes into my office and
says, "I have got to see you. Something has com^e
up. "

I said, "I have got to see you, too.
This is very important. They have got to convoy
something about a plot to kill an ambassador."

He said, "That's what I have to see you
about," so at some point-- I'm not quite clear how
it merged. He got the information from a
different source, I think, from Washington, as
they were telling me, so we moved into his office.
Q. Let me stop you there for a second.

In the course of laying out these
allegations, did Mr. Feldman or the FBI agent/-
mention any allegations about gun running?

A. I can't remember, because that's-- that
was, like, the most exciting part of it, the very
idea there were people planning to kill a U.S.
Aabassador and blow up U.S. embassies. That's what
really stands out in my mind.

They may have, but I just don't
recollect that.

Q. Do you recall any mention of any public
firms or government employees being invol'ved in

mmM.

ATES, INC

753

— mmm .

the plan, the conspiracy that they were
describing?

A. No. ,

I-- there were naHes that didn't mean
any th i ng .

Q. But they didn't specifically-- you
don't have a recollection oC any specific
reference to the NSC, for exaaple?

h. No. Not at that point, no.

Q. Hho in Washington made the call?

Did Mr. Kellner indicate who nade the
call to hi«?

A. At that tiae, I don't think he did.

Let ae see. I think I asked about it.
No. I don't think I did ask, but I think it uas--
I think it was a call and it aay have been,
because at soae point, there was talk about it.

It aay have been generated because of a
letter. It could have been another one of Mrs.
G«rcia'9 letters.

She was becoaing a regular letter
writer after a while.

Q. When Leon came into your office, did he
seea to know about an alleged plot to assassinate

Ambassador Taaas?

UNCLASSIFIED

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A . Tha t • 3 who it was .

Q. Were those allegations included in Mrs.
Garcia's letters? ,

A. The letters I read-- I don't remember
reading tha t .

My only recollection of the thing, that
it could have been generated by a letter, and that
was a later conversation we had, just basically
saying, how we did find out about this thing, and
that was thrown out-- it's really speculative.

I'M really Euzzy about how Leon case to
find out about it .

Q. You don't recall if Mr. Kellner
Mentioned specifically who in Washington called
him and--

A. No.

Q. What happened after you went in his
office?

A. They went in and they told the story
again.

Probably they told it in great detail,
if you have ever spoken to JefC.

I guess at that point, probably
discussions about, you know, what to do next,
maybe get on it, go down tQ^^osta Rica, tja 1 k to

"" West F1»r,l--

on it, go down to^^o

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people, things like that, because I know that
after that point-- see, we're at a point it was
where Gramn-Rudman-- Cor soae reason, our travel »
money was very tight. That was another thing that
stands out in my mind.

There was always going back and forth
conversation about, can we afford a trip to Costa
Rica, this and that, and that was a discussion
that was happening, the travel budget was running
low.

I don't know if it was at that very
meeting or soon thereafter-- "Yes. Absolutely, do
whatever you have to do to get to Costa Rica and
talk to these people."

Q. Was there any discussion about getting
to Mr. Terrell in New Orleans, T-e-r-r-e- 1 - 1 ?

A. Jeff told ae so, but I don't recall it.

Q. You aean at a subsequent time, Jeff
told you he had spoken with Mr. Terrell at that
■eeting on March 14th or--

A. I don't reaeaber any of the names that
were mentioned at the March I4th meeting.

What Jeff told ae was that after that
time, he went to New Orleans to interview Jack

Terrell about this

o Jack^Tgrrell must Kave had

bout this, so Jack Tgrrell m

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some kind of knowledge about this.

Q. You don't recall any discussion, even
in the context, say, oE the travel budget, oC ,
going to New Orleans or not going to New Orleans?

A. No. That we didn't-- was out of the
country travel probably, and I nay have my dates
confused .

We may not have discussed the travel to
Costa Rica until after the New Orleans trip, when
he came back with more information after talking
to Terrell.

It was something like that.
Now, the dates kind of merge together.
Jeff is the one that is real, real
clear and certain on what happened that day.

Q. Do you recall any discussion of an
impending sentencing proceeding with Mr. Garcia?

A, I don't have any independent
recollection of that. I don't have any independent
recollection of that, but I have been told that
that was discussed.

Q, By whom? Who told you that?

A. Jeff. Jeff did, that that was
discussed when he explained how he got, you know,
ahold of this, and how he got involved i it this,

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that it was really as a result of having
prosecuted this gun case.

Went back to the beginning and told t+ie
whole 3 tory .

Q. Do you recall any discussions of a
grand jury at that Meeting?

A. Oh, no. Not at all.

Q. Do you recall anything else about the
meeting that aight have been touched on?

A. Other than, you know, it dealt with,
you know, a very pressing and exciting natter, and
that stands out, but other than that, no, nothing
else really does stand out.

Q. Do you reaeaber anyone else's
participation in that aeeting with yourself, Mr.
Kellner and the FBI agent?

A. No. I don't reaeaber who else was in
the aeeting.

It would be very possible that or more
than likely that either Dick or Larry would have
gone in there or both, or one or the other of
thea, just siaply because we don't have a lot of
foraalities in the oCfice, and the way just things
generally operate, we, you know-- it's pretty
loose, and it's very likely whatever nceb'ing Leon

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1 was having before, you know, when that broke in,

2 either Larry or Dick were in it, and when we just

3 moved into there, they just stayed. ,

4 Q. Now, we have learned that after the

5 meeting or that Mr. Garcia's sentencing was

6 originally set for March i9th, and there was an

7 effort made to postpone that sentencing.

8 Do you have any recollection of being

9 involved in that at all?

10 A. No.

11 I aean, in-- again, in-- that's one of

12 those recollections only in retrospect that it

13 happened, and, you know, Jeff tried to put it in

14 context for me, saying that was right, because we

15 were trying to verify these plots were real, and

16 if we thought it was true, we would speak up at

17 the sentencing, you know, it would have some

18 impact.

19 Q. Do you recall any inquiry or

20 instructions from Main Justice about postponing

21 the sentencing procedure?

22 A. No. I don't personally remember that.

23 That's again one of those things that

24 Jeff has it on his chronology, and it probably had

25 a much greater impact on him, that he wov|ld have

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read it, but I really didn't reaember.

At that tiae, I still was really fuzzy
about Garcia, and, you know-- as far as I could «
see it, it was just another gun case, and we
literally have hundreds o£ gun cases, guns and
drugs. That's what we have hundreds of in this
district.

Q. What is the next event of which you
have an independent recollection regarding the
case?

A. Running into Jeff when he was returning
f roa Cos ta Rica .

Q. So that would have been early April,
April 3rd, April 4th, soaething like that?

A . Apri 1 4th, yes .

Q. Uhat do you recall about that?

A. I waa coaing back tron lunch, and, you
know, the little guard station downstairs, going

through the aagn^toaeter, and running into Jeff,
who was also coaing in, and said-- had his
suitcase with hia.

He said, 'I just got back Croa Costa
Rica. I have got to talk to everybody. It's just
real iapor tant . "

I said, -We're around," and latter that

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afternoon, we sat around and Jeff came in and told
about the-- all the events that developed when he
was down there, and all the interviews. ■*

Q. Prior to the larger meeting later that
day, did you have any one-on-one conversations
with Jeff about what he had found in Costa Rica?
A . I might have .

I don't remember, but-- Jeff might have
stopped in and told us something, but he is such a
detailed person and so full of the names, so used
to throwing the names around, and when you don't
know the names, it really doesn't mean a whole
lot.

I do Icnow that when I ran into him, he
was really excited, you know-- "This is really
excitiing stuff. I have got to tell somebody."
It's just look a kid bursting to tell the news.

Q. So there was a meeting later that day?
A. Yes.

Q. Has it in Mr. Kellner's office?
A. Hell, before you leave, you can see
what his office looks like.

His desk is over on one end, and at the
other end of the room, there's a smaller

nference table, but nevertheless, a rel'atively

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large table, and usually most of the meetings
about cases and things, take place there.

We all sat around there and had JeEe .
tell what he knew.

Q- fan you remember what time of day that
meeting took place, approximately?

*• It had to be after lunch. That's my
recol lection.

Q- Do you remember who was there?

K. Well--

Q- Who do you recall being there?

A- Okay. That's one of those other
a n 3 we r s .

Now I recall Leon, Dick, Larry, Jeff,
and myself.

It wasn't till-- I a«-- it wasn't till
recently that I realized that David Leiwant came
in toward the end of the meeting.

Q. Do you have any independent

recollection of Mr. Leiwant being in the room

during that meeting?

I
A . Yes . Now, yes . I

Once he cane and told us that he was

there, I remembered him, because, in fact, it was i

Iwhohadcausedhimtobethere. ,' |

'in

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We were discussing-- generally, we were
discussing--

Q. Let me interrupt for a second. Let's
start at the beginning oC the meeting, and tell me
what happened, really, is the question.

A. Okay. Well, Jeff started telling the
story about why he was down there, and the things
he had found out .

It was so full of odd names, like,
Tegucigalpa, Quinta, you know, just names, odds
things and jumbled together.

It was mostly he was interrupted by--
"Go back to the beginning. How did you get there?
Who is this person? " It was that kind of meeting.

It wasn't like a smooth story. He
didn't say, "I arrived on the plane and proceeded
to do this, that and the other," whatever.

He was jumping around a lot. What
would have ordinarily probably should have taken
an hour, really dragged out.

It was just getting dragged out. I do
remember that.

Different people were trying to parse
out the facts, you know, who said what to whom,
and how did they know it, and what does i^t mean.

JA
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At some point-- and if you ask me right
now, as many times as we have gone over this, i
couldn't tell you what all he told others, and •
certain things stay in my mind.

He talked about John Hull, how he had
an appointment with Hull, and Hull cancelled the
appointment, and he ended up sitting on the same
plane as him, a few seats behind him.

Told about the meeting, the two
prisoners down in Costa Rica, and I'm not even
surewhat--

Q. Do you recall any mention of the
National Security Council?

A. I don't know if it was the National
Security Council, but I think at that time Jeff
started mentioning Robert Owen, and again, it was
like a name that, you know, didn't mean anything,
and he probably did mention that he thought
somehow he was associated with the National
Security Council, although it didn't just stand
out .

Q. Do you remember what he said about
Owen?

A. Something in connection with Hull, and
again, I didn't-- I didn't take notes or-f-

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Q. Do you recall any reference to Oliver
north?

A. I don't know if the reference to Oliver
North was then or at a later tiae.

I aean, at some point, his name did '
coBe up, and at that point he was all-- who is
Oliver North then. He wasn't faaous then.

I don't recall if it was at that
■etting or at a later Meeting on this case

Q. Do you recall any aentioi

A. Yet.

Q. In what context?

A. I reaeaber specifically, because Jeff
said he had talked to soaeone who Identified
hiaself as

sn't they supposed to be

discreet?-

I reaeaber asking that, because it just
seeaed so-- it didn't fit in with ay idea of the
way the peopl^^^^^^^^^Hare to

Q. Do you recall Mr. Feldaan describing

his aeeting with Aabassador Taaas, in which he

outlined his investigation? .'

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A. I know he talked about hia meeting with

Ambassador Tanas.

Now, when he told us that he showed ,
TamJ^s this diagram o£ his, you know, his theory oE
the case or not-- I'm not sure if that happened
then or at a later time.

It could have happened then, but he did
talk about it, and he put a diagram-- I'm not sure
we're still talking about the same diagram.

I know at this meeting, he had diagrams
with him, lots of diagrams, or at least more than
one, as I recall, and he had made copies of them.

He laid them out on the table, and wc
were having trouble explaining how, you know, box
number one over here connected to box number two,
and I just remembered, you know-- writing or
doodling on these different graphs that he had.
Q. Did you see this--
A. I didn't, but Jeff did.
Q. You didn't save the ones that you
wrote, did you?

A. I think he saved all the ones that
people wrote on, because I know that at some later
point when this all came out, we said, "Yes, I
remember--" just going back to talking ar{d

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discussing, and I said, "Yes, but I think some of
that stuff was just doodled on," and he said "Yes,
I think I saved them all."

Q. Did you take any notes on a piece of
paper or--

A. Not in the sense-- I would jot down a
name, and kind of go like that and--

Q. Cross it out?

A. Or actually make little drawings around
it, something like that, but it wasn't notes,
extensive notes on the meetings, though.

One of the other people, though, I
think was taking notes.

I started to, but frankly, it was so
hard to follow what Jeff is-- maybe I was being
remarkably dense, but it was so hard to follow the
story, and I kind of sat there.

Q. Did you save what you took?

A, No. I think I left and left the pad
there.

Q. You say one other person was taking
notes .

Uho was that?

A. By process of elimination, it must have
been Larry. I know that Dick never writer anything

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during any meeting.

I know he retains it all.
Larry was writing notes. He may have ,
had a pad in front of him, or doodling.

Q. Why do you remember someone taking
notes , wi thout--

A. I don't remember-- that's another one
of those retrospective recollections, only because
we had a discussion about that after all of this
became-- came to the light of day.

Saying, "Did you take notes? No. No.
No. "

Larry said, "I think I took notes," and
I'm not sure if it was that meeting or another
one .

I don't really have an independent
recollection .

You have to understand, it's a table
considerably smaller than this, and he brought in
ail of these files, and he had color photographs
he had out, and all these pieces of paper spread
around on the table, and newspaper clippings and
things, and it was just full, so, you know, a--
lot of stuff spread out.

Q- Do you recall any discussion aft that

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■eeting about the use of a grand jury?

A. No.

My most vivid recollection of that ,
meeting is that Jeff-- we were asking after a
while, talking to Jeff, saying, "What do you think
you have in terms of the law," and he was talking
about Neutrality Act violations and he kept
mentioning the Boland Aaendaent, and Dick and I,
embarrassing enough to say, we had no idea what
the Boland Amendment was.

We hadn't followed that and weren't
aware of it, and we said, "What's the Boland
Amendment," and Jeff described it, and I said,
"Shouldn't we look it up to see what it says, you
know, just to make sure," that kind of
discussion.

The legal aspects of what it was, did
it have a criminal penalty, what did the
Neutrality Act mean. We spent a lot of time going
back and forth on the elements, you know, of the
Neutrality Act violation.

Q. When the discussion of the Boland
Amendment came up, was it you who went and got Mr.
Leiwant?

A. Inaway,yes. ;

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We couldn't find it in the books. Leon
has the USCA in his office, and we couldn't find
it, so I volunteered to get it out of Juris, whiph
is the computer-- I said that it must be in Juris,
which is the computer, and I went to Juris, and
when I went to the Juris terninal, David was
already sitting at the machine on line researching
something, and I said, "I need to get something,"
and he offered to get it, and frankly, his
reputation in the appellate section, he is very
handy with the computer, and what would have taken
me a long time to get out, he got it in a few
moments, and I said, "Dave, I'm looking for
something called the Boland Amendment. I don't
know when it was. I know that it deals with the
Contras," and I said, "Please bring it to Leon's
office," and I came back, and a little bit after
that, David came in with a printout.

Q. When Mr. Leiwant came in with a
printout, do you recall who was at that meeting at
that time?

A. The same people.

Q. To the best of your recollection, were
all of the people there, present throughout the
mee t i ng?

TAd^^rtVHTR-r ireTOCIATES, INC.
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A. I think so.

There might have been phone calls and
things, and people walked in and out, because my4
recollection is that it was just very, very long.

I know that I get very restless, you
know, si-tting for long, long periods of times, and
it seemed like it was dragging on and on and on,
and I suspect people got up and left and got
coffee and came back, something like that.

Q. In the context of discussing the Boland
Amendment, as you may now know or knew then, the
Boland Amendment deals with government aid to the
resistance forces.

In the context of discussing the Boland
Amendment, do you recall what form the government
aid-- the allegations of government aid took, how
the governaent was supposedly involved with this,
with this group of people who were allegedly
assisting the Contras?

A. Not specifically, except in the
beginning, when Jeff was describing what he had
found out till then.

There was a section when he was
describing these telethons that had been conducted
in the Miami area over the Latin radio stations.

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you know, fund raising telethons, and he mentioned
some group that met out in the Everglades and gave
training and gave some guns that went on to Eigh^
in Costa Rica.

As it turned out, it was some six or
seven AR-15's, something like that.

I think it was in the context of money
raised locally by this Cuban- Amer i can
organizations here.

Q. And possible government involvement
with that fund raising?

A. No. At least I don't recall that being
how-- that was the context of the money part of
it .

There was also a discussion of a Howard
Johnsons-- that's kind of coming back to me-- this
meeting at a Howard Johnsons, and I remember that,
because it was so bizarre.

There was a meeting at a Howard
Johnsons here in Miami, where all these people
had, like, a little mini -convention , I guess, and
they sat around and planned when they were going
to land, what they were going to do, and all of
this kind of thing, and I think there were people
there talking about raising money, but it* just

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seemed-

the only thing that sticks in ray mind is

the recollection of the telethons, because I
thought who would have thought that would have ,
been a way to raise money like you do for cerebral
palsy.

Q. Just my question is really directed as
to why there were thoughts that the Boland
Amendment might be implicated.

The Boland Amendment speaks to
government assistance, and so forth. This sounds
like private efforts.

A. See, I don't know. That's why we
wanted a copy of it.

None of us were sure what it said.

Jeff kept throwing Boland Amendment
around, and I said, "You know, do you know
precisely what it says," and it seemed to me he
was very vague on it.

He said, "It just prevents aid to the
Contras," and that was his initial position, and
then we got the printout.

i don't think it was being looked at
from the perspective that the Boland said it was
limited to the types of people who could give aid,
because we didn't know what the Boland Anfendment

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said at that point, or we didn't have it in front
of us to tell.

Q. Do you recall any telephone ,

conversations in the context of that meeting, that
related to the case?

A. No. I don't-- you can't say that no
phone calls occurred during the course at that
meeting.

It was long, and, you know, Leon's
secretary buzzes him, this, that or the other, but
I don't recall-- I certainly don't recall any
phone calls that were significant enough for it
to-- the U.S. Attorney to turn around and relate
it to us, so in that context, I don't remember,
you know, any phone calls.

Hell, it could have been or could have
not been .

I do not know, and this is disputed
again, we go back and discuss what happened at
that aeeting-- I do recall being present in the
rooa when there was a conversation regarding the
Neutrality Act with Mark Richard, and it was
sonething to the effect of, you know, what are the
elements of the Neutrality Act, and ny impression

was that we had calle

we had ca 1 1 ed MajLl^Uchard , sim

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1 because he supervises that section that deals with

2 Neutrality Act violations, in the hopes they had

3 already briefed this issue in the past, because *

4 there have been Neutrality Act violations brought

5 probably in the mid '60's or so, and hoping they

6 had some briefs and memoranda prepared on the

7 elements of the Neutrality Act, and could send

8 those to us and save all of us some work on that.

9 Q. Has that in the context of the April

10 4th meeting?

11 A. To my recollection, I thought it was,

12 but I only think of it as being then, because I

13 have a vivid recollection of really-- of talking

14 about the Neutrality Act at length during that

1 5 meeting .

16 I know that I was the one who

17 personally owned that book, and we were

18 discussing, what does it mean.

19 To set foot from, that sticks out in my

20 Bind, because I said that, "Set foot from".

21 I know we discussed the Neutrality Act

22 and the eleaents of it at that meeting, is why I

23 believe that's when the, you know-- we called Mark

24 Richard to find out if they had the briefs on it.

25 The Mark Richard call-- it could have

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been some other time, but it just seems to me that
must have been.

That's the only call that I remember,*
you know, actually having a conversation relayed
back to us, saying, yes, they do, but they have
got these briefs and it has been done before, and
don't re-invent the wheel, wait to get it.

Q. Does this office, by the way, maintain
any phone records, toll records?

A. Yes.

Q. Would those be helpful in determining
whether FTS calls took place during that meeting?

A. Yes. I would imagine.

Q. Have they been maintained for--

A. Well, FTS toll records-- I don't know
who keeps FTS toll records.

It's either the administrative
department or us, but I imagine they are kept.

I know that we have whatever telephone
toll records we have, were sent to-- on a written
request by letter from the independent counsel. It
was sent.

Q- Do you send originals or copies?

A . Copies .

Q. Could we at some point, look alt the

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originals for, it would be March and April ot

16?

A. They should be here upstairs in--

Q. Let's see if we can straighten that o«t
before the end of the day.

If you would look at that--

*• Yes. When we finish, I can call the
admin people and have them bring the originals to
the room so you can look at them.

Q- In the course of that meeting, do you
recall any discussion at all indicating that Main
Justice or anyone, for that matter, wanted the
case to proceed slowly?

A. No .

Q. Do you recall anyone at that meeting,
instructing anyone else to handle the case in a
slow or dilatory fashion?

A. No .

That has been the-- has been the most
perplexing part of this whole case, when the
allegations first arose, where they have come
from, and we speculated a million things, and this
was the last thing that we could have imagined
when we did find out what it was.

Q. Do you recall any discussion at that
meeting of Steve Trotter or Jensen? .'

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No .

Q. Do you recall any discussion of the
Attorney General? 4

A . No .

The only name that I recall coining up
was Mark Richard, as a department person.

Q. This is at any meeting?

A. That's what-- well. Trotter and Jensen
wouldn't stand out, but I know the Attorney
General's name would, and that was an important
person .

Q. Do you recall anything else about that
meeting on April 4th?

A. That when it broke up, I don't think
anything had really been resolved, other than JeEC
was asked to put the facts down in writing, that
maybe by articulating the* in a written form, you
know, he aight be able to sort it out better so it
would be aore understandable, and that's how he
left it, is put it in a Heao, you know, to
organize the case, so aaybe we can get a focus.

It just seeaed to be all over the case,
the gun case, the Neutrality Act, whatever.

Q. And again, you don't recall the
discussion about whether the case was reafdy to go

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any thi

ng.

a t th

at point?

I don • t

recall

that being discussed at

that

point .

There was a

point

where

- - a meeting

where we

discussed

and

de suggestions of things

to d

fore going

a g

rand

jury

, like, getting

financia

1 records ,

you

can

make

a dec is ion of ,

you

know

, who to call.

because you

don't want to

^nd

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who-

- jus

t to be more

focused

and organized.

t I

don * t

think it was at

that

meeting.

My impression

was

that

it was at a

late

r meet ing .

Do you reca

any

discussion at that

meet

ing.

of potential

Con

gres

siona

1 votes on the

Cont

ra aid issue?

I don't

recall

it.

but

Jeff said that

he mentioned it.

At that

mee

tin

g on

the

4th?

Yes .

I think

says that he

mentioned that.

That there

was

impen

ding vote?

Yes .

And you

don

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have

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>CK BES^^EITT ASSOCIATES, INC.

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A . Not really, I don • t .

If it was mentioned, you know, I jcist--
it didn't leave an impression. I don't remember^
it .

Q. And you don't reaenber any response or
any discussion Eroa that-- at that point?

A. No.

You have to reaeaber, you were at the
point where two of the people in the rooa, Dick
and I, had never even heard of the Boland
Aaendment. I know it sounds odd living down here,
but--

MR. GENZMAN: Let ae interject.
BY MR. GENZMAN:

Q. Uhat did Jeff recall about mention of
the Contra aid vote?

A. I recall Jeff saying that he-- you
know, this is a very hot topic, you know, this is
a hot topic in Washington, a lot of controversy.

I think he expressed it like that. He
did aention it, and this is in a aceting that we
have had, to see what happened at that aeeting,
that we don't reaeaber.

He said "Yes, I just mentioned it in
passing, and you and Dick were oblivious,;" and we

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UNCiftssro

1 went on to something else.

2 Q. Did Feldman mention uhere he had

3 obtained his information about the Contra aid voV:e
4 ■ i n Washi ngton?

5 A. No, but I suspect that he was really

6 probably reading the papers more avidly, and

7 having-- following that portion of the case, may

8 have been following news reports in the news, you

9 know, and things relating to Nicaragua, you know,

10 more closely than the rest of us.

11 Q. You didn't get the impression he had

12 been relating this to his trip in--

13 A. Oh, no .

14 I remember at the meeting he had

15 newspaper articles, photographs, and that wasn't

16 only fro« local papers.

17 He had gotten clippings from things

18 about that, but my impression was that he got it,

19 juat siaply because he was interested and he was

20 Collowing the developments.

21 MR. GENZMAN: Thank you.

22 BY MR. MCGOUGH:

23 Q. We understand that there was another

24 meeting on this matter on April 11th, which was

25 the day of the FBI shooting down here. At; least we

172 west Fla^ ^l^BpMliljJ'T"L"3 13r'(3 05 ) 37 1-1!

781

UN CLASSi riCD

have been informed that there was a meeting that
day .

Do you recall a meeting on that day? ,
A . No .

Well, what I recall that day, is-- in
Eact, I was the acting U.S. Attorney that day,
because Leon was away and he was due to arrive
back some time that afternoon from-- I think he
was in Great Britain, and then the shooting thing
developed during the course the day, and it became
very, very hectic around here, and that was also
the day when--

What I recall that relates to this
case, was that-- and I don't know who told me
this. It may have been Jeff. Probably is, because
Jeff would come in to see me a lot, tell me this
is going to happen and that's going to happen,
that there was supposed to be an AP article coming
out about his case, and I said, "Fine, because we
can't deal with all of this. This is really a
horrendous thing happening."

He had the FBI pick Mb up at the
airport and bring hia right into the office, and I
couldn't-- you know, we were trying to deal with
things, how did the shooting occur, and pending

iii^ini Aooinri

JACK
72 West Flagl_e

MfliSMm^

, INC.

'2 2 1 30 (305^ 371-153 7,

782

ausa' 3

UNCLASSiHtfl

out to the scene, because we didn't want

the locals questioning the agents, you know, and
it was just a very intense day, and I just don't*
think that would have been it.

Q. Up to that point, up to the point o£
the FBI shooting, do you recall any discussion of
the potential political impact o£ Jeff's case on
what was then Mr. Kellner's pending-- I don't know
that he had been foraally nominated then, but he
was acting U.S. Attorney at that time?

A. Yes. I think he was acting at that
time, and he had been nominated.

Q. Do you recall any discussion at any
point, the potential impact of the-- Mr. Feldman's
case on Mr. Kellner's nomination?

A. No, I don't, but because this has come
up before, Jeff tells me that he did say that to
me, and, you know, he says he said it.
He says he said it.

I don't recall the discussion, and he
may have said it and my comment, "So what,"
because there was no other nominee, and nobody
else who wanted the job. He was the only one.

It was inconsequential, from the day
that Stanley left to be a federal judge, :and-- he

.,„.....-iCUSSlFP,,c,^^ ^^

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wussra

says he nentioned it and he thought that, you
know, that was something relevant to bring up,
but, you know, I just-- he may have brought it up
tome.

I know I didn't remember it, and I
don't remember it coming Cro« me.

Q. And you don't recall discussing it with
anyone else in the context oE this case?

A. In the context of this case, no, except
about being asked about this, by other people, as
a result of, you know, the different
investigations .
BY MR. GENZMAN:

Q. If I can interject-- can you give your
best recall of what exactly Feldnan said about
this issue?

A . I really can ' t .

I have to just totally rely on Jeff's
recollection of it, and I'm relying on him, simply
because he's the most compulsive human being I
have met. He's so certain about everything, and
I'm just fuzzy, so I have to assume he did tell
me, if he said he did.

Q. What did he say he had told you?

A. That he said-- he had asked me; if Leon

784

DNtftSSW

had been, you know, finally appointed--
Q. Confirmed?

A. Yes, as the U.S. Attorney, and I
probably said, you know, no, that it's pending.

I guess it was pending at that time. I
don't know, it's pending before the House or
before the Judiciary Committee, whatever, and, you
know-- "Well, do you think they may be holding it
up or something," and I said no.

What I wish, and I haven't asked Jeff
this and it just occurred to me, maybe the timing
of it would have helped-- if it was maybe about
the time-- there was a period of time when
allegations started surfacing about JefC's case,
and I don't know if it was in that period of time
when it would have made sense to say it, because
of the context.

I don't remember the whole thing at
all, period, let alone the context.

Q. Has Feldman with his compulsive
demeanor, able to pinpoint the time at which he
had previously told you that?

A. I don't remember if he did.

I would have to ask him.

We went over his chronology. .1 didn't

JAC
172 West Flagyl

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785

mtmw

have it in here, so I don't know.

He may actually know. He may actually
not much a recollection of when he said it,

either .

I don't know that .

Q. But you don't reaeaber that
conversation?

A . No, I don • t .

There was a point, you know-- we met a
lot. Not to put in the foraal sense of the word,
but I have-- I guess it's part of my job
description, whatever, !'■ just sort of there when
somebody needs something, soaething comes up, you
know, my doors are always open, and I guess my
office is first before you get to Dick's, and
people just come in. There was a period where he
started stopping by more often.

I don't know when or how often, or
what, because it's not by appointaent or anything
that would have recorded it.

Q. If he had made such a statement, do you
think he would have remembered it?

A. I think so. I think so, although-- see,
the problem is that then it wouldn't have meant

anything,

IINCLASSm

JACK BESONER S. ASSOCIATES, INC.
172 West Flagler Street, Miami, FL 33130 (305) 371-1'

786

UNEtrnFlffl

It only becomes important now, you
know, with this whole thing, and iC I had only
known this was going to happen, I would have ,
remeinbered it then.

I would have done a lot of things. I
would have written it all down.
BY MR. MCGOUGH:

Q. Shortly after the FBI agents were shot,
the Attorney General caae to Miami to visit the
FBI .

Do you recall that?

A. I recall-- yes. I saw it on television.

Q. Did you have any contact with the
Attorney General during this visit here?

A. No .

Q. Did you discuss the Attorney General's
visit with Mr. Kellner?

A. Only because after they had run into
each other at the hospital, Leon called me, and I
I don't remember if it was the weekend, but he
called me up and said, "Guess what. I was invited
to be in the group of people that-- dignitaries
that went with the Attorney General that went to
visit the wounded agents. They drove ne out in a
limo." He was very excited.

set, Miami, FL 33130 (

JACK BESONI
172 West Flagler Street .' 'Miami . FL 33130 (30 5) 37 1-153-

787

yN CUSSIFIED

We see ourselves here, very remote from
the department.

If you ever have been a AUSA-- people*
in Justice refer to us as the field. We're
provincials, and the very fact we would get to rub
shoulders with dignitaries--

Q. I was a AUSA in Pittsburgh, and that's
even more of the field.

MR. GENZMAN: I was in Orlando.

MR. PERKINS: I was in San Francisco.

THE WITNESS: But Main Justice refers to
us as the field, and that's ny recollection of it,
and the thing was, you know, "I got to be in the
group that was there, and watch the news. I'm
going to be on TV."

I think the local news stations carried
the visit, because it was so intense, the pulicity
surrounding the shootings.

The press followed everybody around,
and I think they stood outside the door of one of
the hospitals, and Leon was standing in the
background, and the Attorney General said a few
words about how brave they had been, and that kind
of stuff.

Q. Did you discuss with Mr. Kellnter,

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anything that he might have discussed with the
Attorney General?
A. No.

In fact, I was really surprised to find
out-- was only well after that, I found out during
that visit, he had been asked about Jeff's case.
Q. And when did you find that out?
A. At soae point when all of these things
started surfacing about the Meese call to go slow.

At first we thought it was a joke. We
all have a joke, "Well, because I wasn't there
when Heese called".

We just all called about it. We laughed
about it, and said, "This will go away. It's a
silly thing," and it never did.

I don't reaeaber the timing of this,
but we saw some article that quoted a Department
of Justice person saying that yes, Meese had
talked to the U.S. Attorney in Miami, but it, you
know-- he had never said to do anything one way or
the other about the investigation, but I know
there was an article about it.

I said Leon, "Look at this." I think
it was a Wall Street Journal, but we called public
affairs and said, "Who is saying this," a(nd as it

172 west FlattPliltlJ9vlfffiVFr3313r(305) 371-1537

789

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1 turned out, lota of calls back and forth, what

2 they were referring to was the meeting that they

3 had had while they visited the injured agent in ,

4 the hospital, and that's how it came up.

5 Hesaid"Yes, that's theonly time,

6 never on the phone," but the way the article had

7 it printed, it made it sound like it had been a

8 phone-- made a phone call, and I don't know the

9 timing of that article, when it caae up, but it

10 was another one of these days where he spends

11 hours on the phone back and forth, until we were

12 able to get the facts about what had happened.

13 Q. Going back to the end of the April 4th

14 meeting-- after that meeting was over, what is

15 your next recollection of any contact with the

16 Costa case?

17 A. Probably-- the only thing I recollect

18 offhand, is reviewing the meao, when he did

19 soaething down on paper.

20 Q. Would this have been the first draft of

21 the aeHorandua?

22 A. Probably.

23 Q. Ue've been told that that acaorandum is

24 dated April 28th, or thereabouts.

25 Is that-- do you have any reason to--

I — imiis^i£ii»... ..c —

172 West Flagler Street, Miaai, FL 33130 (305) 371-1537

790

iiH CUs s m

A. No. I don't have any reason to doubt
it .

Q. Put it at a different time? ^

A . No .

I'm just relying on that.

Q. What do you renember about that
memorandum?

A. Very little independently, other than I
know I-- I saw some of the sentences were
extremely long, and it was very long and
confusing, and I probably made some editorial
suggestions as to clarify who's talking or who is
saying this, that type of thing.

Q. To whom did you make those suggestions?

A. To Jeff, I have to assume.

I seem to recollect that we were back
again in, you know, in the office, at the
conference table, discussing the memo, and--
really, that's about all I recollect about the
memo, itself .

Q. Hhy would you review the memo?

A. Probably because I had been there when
he first raised the issue, and sometimes I'm used
as the litmus test because of not having, you
know, a^ deep a criminal background as th>e others,

172 West F

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M IISMpIATES, INC
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to 3ee if it is in plain enough English so i can
follow who did what to whon and when.

Q. Do you know i£ Mr. Feldman gave you t^e
memo or merely Kellner gave it to you, or how it
came to you?

A. No, I don't think so.

As far as I know, we were all given
copies and sat there and went through it together.

Although, you know, I may have had it
before then, and it may have probably just sat on
my desk .

Q. Do you recall soae press reports-- I
believe they were in May, but don't hold me to
this-- that the Department of Justice had recorded
there was no investigation?

A. Oh, yes. I reaember that very well.

Q. Can you tell me what happened there?

A. Before that article came out, and--
and, in fact, I can even tell you what led up to
that.

Ever since Jeff got back from his trip,
and back-- it started right after that AP article,
that happened at about the tiae of the shooting,
either the 12th or 11th, the very day of the
shooting, about the gun running and flighfts out of

MMs^

792

ftftfflii

1 1

Fort Lauderdale, we started getting on a regular
basis, calls about the case, and about that time,
also people-- and I mean, people calling, and
saying, I think, this, that, or the other thing,
you know, and I called public affairs and told
them, you know, "Look, we have an investigation,
and we're just getting drowned."

It would seem to me-- "Drowned, getting
at least two calls a day on the this thing, and
I'm going to start referring them up there."

They started getting calls, and-- they
said, "What is the case about? Tell me something
about it? Tell me what to say," and I said, "So
far, this in the beginning. This is in the
beginning stage, but it's an ongoing
investigation. So far we don't have a lot to go
on . "

Q- Who are you talking to at DOJ?

A. For sure, Pat Corton.

Q. C-o-r-t-o-n?

*• C, and it may be e-n at the end. I'm
not positive how it's spelled.

Possibly John Russell, but at any rate,
they had-- they had an inquiry, because it's not
unusual, public affairs gets inquiries atfout

1 7 2 u»« t p

.MJiSm... ;;,..„ ,.,.,.. '

793

UH ClAS Sin ED

different offices, and they call and say, "Tell me
what to say? What is the case about," and it's--
even today as we speak here, what we have got, ,
half a dozen AR-15'3 arrived, some hand grenades,
a mortar, launcher, and an assortment of hand
guns, hardly what you would have a war with.

That's what's provable, and that's what
we have to this date, and--

You know, the next thing I see — look
at this, it looks-- what the New York Times did,
called them up, and say-- the New York Times
article, where they say it's about a half a dozen
guns or so, which is true, but they characterized
it as not being an investigation, but they
characterized it-- I thought it was from the
eupheaisB they used-- they said it was less than
an investigation, but something like an inquiry,
words like that .

Q. They, being the article, or they, being
the Departaent of Justice?

A. Oh, no. Whoever was quoted in the
article, in that New York Times article.

Q. I guess that's ay point.

Were they quoting somebody from the
Department of Justice about that? ;

WSLiSM

7 7 u«.<,t Fla gler Street Miai

ATES, INC.

E_L 33130 f30■5^ I71-is^

794

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A. They said a Department of Justice
official .

I'm sure the article-- I don't know ii
they named the article or not, but they quoted a
Department of Justice thing.

At that point, then everything took on
a different meaning as far as we were concerned,
but the way I saw that, I said, like, "This is
terrible. They are making someone-- someone wants
to make it sound like we don't have a case and
we're not doing something--" this may seen very
paranoid, but I said, "I don't like this, and we
have to make it clear we do have a case," and I
called public affairs and told them that yes, we
do have a case, and, in fact, after that point,
then we started talking about the case.

Q. What did they say at public affairs
when you called then?

A. I don't remember.

Q. Do you remember who you spoke to?

A. I spoke with Pat Corton, but I don't
remember .

I'm sure it wasn't angry. I'm sure it
was the kind of call, "Look, this is wrong. You
have left the impression th^x^ i' "o case(.

^ler Street , !

;ates, inc.

172 West FJa'^re'r Street, Miami, FL 33130 (305) 371-1537

795

ONCUSSIFIED

1 1

There's an investigation, and it may not be grand
jury yet, but an assistant is assigned to it, two
agents, and interviewing people, and you shouldnit
give that impression, it's less than what it is."

Granted the a«ount of arms involved has
always been small. The Miami Herald-- put this in
context about the same time, something about six
tons .

All these publications are reporting
tons .

To date, as we speak today, we're
nowhere near close to six tons, but about six
guns, a mortar, a few grenades, a few hand guns,
and maybe a sniper rifle, things like that, but
not tons .

He just aren't into tons, and, you
know, I don't know-- it's very likely or most
likely it was a misinterpretation, you know. I
said, "It's just a few guns so far, so far no big
deal," and that was interpreted to diminish what
it was, that it wasn't tons. We are looking to
make a great case.

Q. Can you put a date on that?

A. It had to be the day that the article
came out. I think it was ii

think it was in Hav.

Kussm

JACVStM>*i*»\«^ir8SC>C»*TES, INC.
172 West Flagler Street, Miaai, FL 33130 (305) 371-1537

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I think I wrote down the date and time
of the article when I was getting ready for this.
I just wrote,, article. May of '86, New,
York Times article.

Q. Now--

*• Oh, the other thing I wanted to mention
about that, is why it changed the character of
things, was that after-- probability, I think
Larry to-- anyway, at the time, just discussed the
general facts, you know, "What is this? Why is
this happening, when we do have facts, have
this . "

Then Jeff's aemo, which had originally
been written down so we can understand the fact
took on more significance.

Now it became, "Write it down, because
we want to have something deCintely in writing to
show this is an investigation, that you did, in
fact, talk to people, that we are, in fact, doing
something . "

Then the memo took on a different
significance.

Q. Do you recall receiving a second draft
of that memo?

A- No. I don't remember the difCerent

..JHftASSHe

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ES, INC.

797

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drafts, and there was a point that-- I really
didn't contribute to the nemo.

It was mostly, you know, others that ,
may have done editorial suggestions in the memo,
because it was after that article in the New Ifork
Times that the memo-- see, the memo was never
intended to go anywhere.

It was just for us, so we could
understand the case.

At that point, the nemo took on a
character of, this memo is going to go to
Washington, so the people in the department
realize we have a case, and then it had to be
looked at as other people were going to be reading
it, and we had to make it very clear.

After that point, I think it was looked
at more carefully.

Q. Do you recall seeing a draft of the
■eao, and this would have been a draft which was
approxiaately 22 pages in length-- in which Mr.
Feldman felt it was appropriate to issue grand
jury subpoenas?

A. I always thought it was the first
draft, but it ended up it wasn't.

I was present when there was aj

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1 discussion about the grand jury, whether to go to

2 grand jury or not to.

3 Idon'trecall thedateof themeetin^g,

4 " but I was present during a discussion of the memo

5 and that particular part of it, do we start a

6 grand jury right now, or do we do, you know, what.

7 Q. Going into that meeting, had you

8 already read Jeff's memo?

9 A. I'm pretty sure I had read it by then.

10 Q. Going into the meeting, do you have an

11 opinion as to whether the grand jury was

12 appropriate or not?

13 A. I don't recall-- what I thought going

14 into the meeting, I don't recall, but I do know

15 going into the meeting, as things developed-- this

16 is-- granted my background for the past few years

17 has been mostly civil and I'm learning a lot of

18 criminal as things go along, but my limited

19 knowledge of criminal cases, I felt that you still

20 couldn't really understand the direction of the

21 case from what was in the memo.

22 That was my going into the meeting

23 feeling.

24 At the meeting, I know one of the

25 things that I recall saying to Jeff, or, .'you know.

WMB

jytB ViJli£lwWllSp|Ul]|ATES, INC.
172 West Flagler Street, Miami, FL 33130 (305) 371-1537

799

itNttASSm

in the general back and forth of the different
people who were there, is what did you plan to get
out of the grand jury-- I mean, what were you •
going to present to the grand jury, becau-se we
couldn't overwhelm the grand jury with every
single thing, you know, because we are-- and none
of it nakes any sense to us, and it has to be more
organized and thought through, or have a focus and
direction, and then others had specific
sugges t ions .

Mine were aore broad.
Q. Do you recall discussions of issuing
subpoenas for records, bank records, gun sale
records, that sort of thing, as opposed to witness
subpoenas?

Q. No.

What I recall, I thought, was when we
case up with certain naaes, that certain people
hadn't even been interviewed yet, that that should
be done first, and that I know bank records-- that
decision was not nine. That was someone else, and
about toll records, too.

You also see toll records, to see if
particular people were where they said they were

at particular timeSc

JACK BESONER

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Q . Do you reca 1 1 --

A. All that had to be done.

Q. Do you recall any discussion of the .
down side or any argument against issuing bank
record subpoenas, or telephone toll subpoenas?

A._ Not specifically about this, but I
imagine there must have been, because I have been
in enough meetings on other cases, where I know
there are certain downsides about them that are
raised, especially in a case where we had no clear
idea of what and whom was being targeted.

Q. Do you recall who at the meeting, took
what positions or-- as far as grand jury goes, or
did people stake out a position?

A. Nothing really stands out.

I was probably less involved in that,
because it's an area that I didn't feel very
confident in, because I would suspect that Larry
was the aost cautious, because Larry, by
reputation in the office, he's knows as "Doctor
No- .

He's very conservative in terms of
leaning into anything, and he's always-- turns
out, he was generally right.

His idea was, do your backgroifnd work.

mmm

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investigative work, all this homework, and then
you take it to the grand jury.

He is a very detailed person, and thaX
would probably be my guess.

I don't know-- Dick, I don't-- I don't
really have a particular recollection of what
others were saying.

Q. Oo you recall what position Mr. Feldman
and Mr. Kellner took, Mr. Feldman and Mr. Kellner?

A. Mo, I really don't.

I know that Jeff, in spite of being
very certain what to say-- very certain about
things, like the facts of when things happened,
and he also listened, and, you know, it wasn't
like a heated discussion. I don't remember it
being, like, somebody staking out a position, Jeff
saying, "Yes. Yes. Yes. Go for it. Why are you
holding me back," and others saying, "No. No.
Me-
lt wasn't just that acrimonious. I
don't have that good of a recollection of it.

Q. Has there a consensus come to at this
meeting, regarding the grand jury?

A. Well, my recollection is not that good,
but my recollection is one of-- the agentfs were

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supposed to go out an X, Y and Z people
interviewed, and-- there were going to be some, I
thought it was, airline records or something liW^
that, but-- maybe some toll records, that were
going to be gotten, other things that were going
to be gotten, and then sit down and re-visit the
issue .

Q. As you recall it, at least, there was
supposed to be some sort o£ subpoena issued Cor
some records?

A. I think so.

Q. At that stage of the investigation?

A. I know there were going to be some kind
of records maintained.

I seem to recall airlines. Cor some
reason, the airline records.

Do you recall any ATF records?

ATF records?

Yes.

No, but--

X don't mean ATP, I mean gun stores
records that the ATF could obtain?
A. That they could obtain?

That doesn't stand out in my mind, but
that probably should have been one oC th» things.

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Q. Let me make sure I have the people.
There was Mr. Kellner, Mr. Feldman, Mr. Scharf
and-- ,

A. Dick may have been there.

Q. I understand, but we have Kellner,
Feldman, Scharf and yourself?

A. Uh-hu«.

Q. And perhaps Mr. Gregorie?

A. Right.

Q. Anything else that you can recall,
anybody else?

A . No .

Q. Is there anything else about that
meeting you can recall?

A. No .

Q. What is your next contact with the

case?

A . Let ' s see .

In By note on that Meeting, on May
20th, Jeff recollects that-- now that I mentioned
something about it, we were still unsure about
what kind of case it was, whether it was focusing
to be a gun case or Neutrality case, and we still
needed to get better focused in on the law in that
area to start developing those facts. ',

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My next recollection-- I really didn't
follow-up with the memo after that.

I think I was shown the tnemo before ii
went out.

Q. Which memo were you shown?

A. The final, you know, the ultimate memo
that was sent out.

Q. We understand that there was a draft
that Mr. FeldBian did and subiiitted to Mr. Kellner,
and then Mr. Kellner and Mr. Scharf or Mr. Scharf
made some changes in that aeMO, and then it was
the Scharf /Feldman meMO that went to Justice, and
I did see the copy or--

A. I'm pretty sure I saw the ona that went
to Justice, the old one that went out, without any
cover on i t .

Q. Do you recall anything about that
nemoranduB?

A. No, except that soon after it was sent,
people knew about it. That was renarkable.

Q. Have you any opinion as to how that
memorandua found its way into the public domain?

A. Did I have an opinion as opposed to
facts?

I have no facts that would leaJd me to

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believe one way or the other, other than my
cynicism of Washington, and that eventually
everything that crosses the District of Columbia/"
line, ends up somewhere in the public domain.

Q. So it's your opinion that the memo was
distributed out of Washington?

A . Yes .

Q. All right.

A. And that's a strictly unfounded
opinion, but based on personal prejudices.

Q. The memo went to Washington, had an
ultimate conclusion section, and that conclusion
was that it was premature to involve a grand jury.
Do recall that?

A . Yes .

Q. And it listed some reasons for being

premature, and it said at one point, the grand
jury at that stage, would be quote, a fishing
expedition, close quote.

Up until showing that reference in the
memorandum, do you recall hearing discussion of
the grand jury being a fishing expedition, and
again, this may refer back to the meeting on May
20th or at any other time?

A. I don't remember that. ?

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1 I do remember expressions of, you know,

2 "You can't just let a grand jury run amock."

3 You have got to have them focused, ,

4 things like that, uhich I guess amounts to the

5 same thing, but just not in so many words.

6 Q. Do you recall any reference to the harm

7 that might befall innocent contributors to the

8 accounts that might be subpoenaed in the event

9 that subpoenas were issued?

10 A. Yes. That was discussed at one of the

11 meetings.

12 Again, I'm not sure of which one, but

13 there was a discussion-- you know, here's these

14 people. They don't know what they are

15 contributing to.

16 They write out a check, and what is the

17 result of this, what do we do with that,

18 especially in this coB«unity, everybody-- I mean,

19 one day it's earthquakes, and another day, mud

20 slides in Coloiibia, or earthquakes in Honduras-- I

21 mean, revolutions here and there.

22 You go into little Havana on Southwest

23 8th Street and walk into randomly nine

24 restaurants, and where up north you see Jerry's

25 Kids, and there you're going to have the JContras,

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and then whatever the cause the people have there.

This is an exile c omni un i t y . That's the
uaytheydoit. »

Q. Do you recall discussions of those
facts in context of issuing grand jury subpoenas
in this case?

A. That you-- you know, it was discussed,
the factors of the checks, as a result of the
telethons, things like that, and we obviously
couldn't be focusing on all those people, and what
did we want out of it, and things like that, yes.

Q. Did you have any input in the final--
this is after May 20th, up until the memo goes
into the Department of Justice.

Did you have any input suggestions or
changes to that memo?

A. No, not that I recall.

Q. Now, the memo was sent to the
Department of Justice on or about June 3rd.

A. Yes.

Q. At or after that time, what was your
next contact with the Costa case?

A. It was very really little, and then I
went away, and people were on vacation.

I returned^ mid August-- my neWt

iiiini Aooirarn

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1 chronology could have been at the very end of

2 August, and Leon called me into his office and

3 showed tne a mailing that he had received in a •

4 large brown envelope, and he said, "Look at this.

5 What do you think of this? You know, what do you

6 make of this," and it was something from-- I think

7 it was from Costa Rica, and it had affidavits in

8 it of the people who had been imprisoned in Costa

9 Rica, and it was juat very odd, you know, and it--

10 it just looked fishy to me.

11 Infact, Isaid, "This isthekindof

12 thing you kind of hate to have your fingerprints

13 on. Who knows--"

14 It was making allegations against John

15 Kerry, allegations of improprieties, and purported

16 to have sworn affidavits of these two guys that

17 were down there, but all the facts we knew to date

18 were totally contrary to some of the things that

19 were stated in those affidavits.

20 They could have been true for all we

21 knew, but by now, you know, we were starting to

22 focus on the case, you know.

23 There was a lot nore public attention

24 on it, and I said, "I just have a feeling-- I

25 don't know-- for somewhere down the line,; we're

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being set up by other people, but--" you know, "I |

I
suggest you immediately do not just hold this, but I

passthislong." ,

Q. Old you discuss passing it along to
whom?

A. Yes, to submit that to Washington, you
know, to make sure we-- make people aware we had
gotten this packet.

As it turned out, we learned we weren't
the only people to get it. We just assumed we
were singled out, and it turned out there was a
mailing to other people, also.

Q. Prior to late August, I believe the FBI
gave a very thick prosecution memo to Mr. Feldman,
and he passed it on to Mr. Kellner.
Did you ever see that?

A. No. It's not a prosecution memo,
p-r-o-s, but after the last thing-- in the sense
that we write prosecution nemos, before we
initiate a RICO prosecution, something like this,
but simply a compilation of all of the 302's,
without characterization of inclusion, things like
that .

I was aware it existed, but I didn't--
it came in when I was-- either it came i nf after I

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had gone on vacation, and I was getting ready to
leave, so I was winding things up.

I really didn't see that. »

Q. You say you were aware of it.

When did you become aware oE it?

A. Soaetiae after that, that that had been
prepared, and passed along.

Q. Were you ever asked for any input on
the decision, about what to do for the memo--

A. The prosecution aeno?

Q. Yes.

A. No.

Q. After Mr. Kellner received-- after the
episode in which he received the affidavits that
you aentioned earlier in late August--

A. Uh-hua.

Q. What was your next contact with the
case?

A. It was about that tiae when we started
getting calls, saying, you know-- asking for
coaaents on whether we were told to stop this
case, you know, at the request of the Department
of-- the request of the Attorney General, and, you
know, froa there it just really snowballed, and
the press saying-- I was sitting around laying

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this is-- this was out of the blue. It's--

Q. You nean the press comments?

A. Yes, the comments. ,

I mean, around here, it's often we're
the last to know, and we usually get most of our
information from the press, and that's how we
first heard of this allegation.

Q. When those allegation came in, did you
go to Mr. Kellner or anyone else, to attempt to
determine what the status of the case was?

A . Oh , yes .

Well, I discussed the allegations with
Leon, and I imagine Jeff at some point.

Q. What did they tell you?

A. Starting in there, I really don't
remember in terms of what the case-- we would have
to see what Jeff was doing at that time.

Garcia-- the Garcia sentencing on
September 15th, seemed to be a landmark for the
beginning of a lot of calls and things on this
issue .

Q. When you talked to Mr. Feldman, did he
tell you that he had passed the prosecution memo
on to Mr . Kel Iner?

A. Hemayhave. ;

mmm

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1 I was dealing from a very limited

2 perspective of just dealing with little events as

3 they cane up. <

4 At that point, I really didn't see the

5 day-to-day supervision of the case.

6 The case now-- well, at some point,

7 Jeff started working-- or one of the senior people

8 started working with Jeff on the case.

9 I don't know when that was.

10 At that time, it was the person, Dick

11 Gregorie's predecessor, Joe McSorley, and once

12 Joe, you know, was assigned, to work on it with

13 him, the rest of us kind of faded out.

14 Q. Can you remember when the press

15 inquiries about alleged pressure from Main Justice

16 began to come in?

17 A. The go slow calls?

18 Q. Not the calls, themselves, but the

19 ones--

20 A. I call them the go slow calls.

21 It started with-- I know it started

22 after I came back in August, you know, sometime,

23 late September-- late August, September, they

24 started.

25 Q. Before the Garcia sentencing, Jhich was

813

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in Septenber?

I
A. I think-- my recollection is that there |

I
was intense attention right around the time of the i

Garcia sentencing, but even before that, there j

was, just, like a call from here, a call from

I
there on this, so it was starting to maybe build

momen tun .

Q. Mr. Feldaan has told us that he passed

along the prosecution meao to Mr. Kellner some

tiBC in mid August or so, and ultimately, he got

it back from Mr. Kellner in early November.

If you were receiving press inquiries
as early as the middle of September and taking
them to Mr. Kellner at that time, was he giving
you any indication as to what he was doing with
the prosecution memo or with the case, in general?
A. I don't recall any discussions in terms
of the case, itself, but more discussion really
Cocused on, you know, why is this happening.

You know, it may be a very limited
perspective to take, again, in retrospect, but
that was it. It was very s i tuat ional ly oriented
discussions .

Q. I'll be frank here.

The case from the time the prcfsecution

,. .... ..i;#l(!U!SSffifl^!;.;rooM 3n-.s3,

814

MASSm

1 ■emo came in and went to Mr. Kellner, until it

2 came out of his office on November 1st, very

3 little, if anything, occurred in the case, and at«

4 the same time, you were feeding press inquiries

5 about this go slow allegation.

6 Were you making an attempt to find out

7 why the case seemed stuck in one place for the

8 better part of three, four months?

9 A. I imagine that 1 talked to Jeff from
10 time to time about it, but I really didn't look
XI beyond that, and, you know, I should have in

12 retrospect, but I thought that, you know, things

13 were just taking their course, and, you know, what

14 was-- what was needed to be done, was being done.

15 Q. Were you aware that Mr. Gregorie was

16 reviewing the prosecution memo?

17 A. No.

18 !■■ trying to figure out at what point

19 in time Joe left.

20 I don't know if he started reviewing it

21 when Joe left, or he just started reviewing it

22 also at some point, but no.

23 Q. you were not contemporaneously aware

24 that Mr. Gregorie was reviewing--

25 A. No.Notreally,no.

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I generally stayed out of the-- the
specifics of the case at that point.

I had very little contact with it. »

To this day, I don't think I have seen

the FBI pros nemo, the compilations of the 302's.

Q. Do you recall when the C-123 in which
Mr. Hasenfuss was riding, was shot down?

A. Yes, I do.

Q. How did you learn about that?

A. Well, interesting enough, again, the
press calls-- we had a very well known case, or
famous, where Barry Scale was a prime witness. He
returned the cartel indictment based on his
testimony, and he flew a C-123 loaded with dope
into Nicaragua, a trans-shipment point, and that
was the basis for our cartel indictment.

The immediate press reaction to that
was that it was the same plane, and when Barry
Seale had been assassinated in Baton Rouge, there
was a lot of notoriety around it, and they had,
like, a 20/20 show focused on Barry Seale, and all
these things, so the initial calls we were gettin^j
was, you know, was this the same C-123.

There's just not that many of these
planes around anymore

JACK BESO

jmmm

816

wmm

Did you discu

S3 the Hasenfus/ shoot

down with anyone in relationship to Mr. Feldman's
case? ,

A. To Jeff's case?

At some time later, probably initially
it was basically discussed in trying to find out
if there was a connection with the-- the same
C-123 that Seale had used at a later time.

I mean, later could mean a day or two
later, just not that same day.

I know that I talked to Jeff about it,
and/or Jeff came in, or I walked in where Jeff
was, one of those things, and there was probably a
general discussion about that in relation to this
case, was there any indication this could have
been something related to the people he was
looking into, things like that.

Just general-- I don't have specific
recollections of what particular was discussed,
other than, you know, yes, there probably was at
some point, firm discussion-- got together and
said, you know, "Do you think this relates to
you . "

Q. You say people got together.

A. I wish I knew who, except, aga'in, I

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would suspect it's Larry, Dick, and myself, and
Jeff, and I'm not-- I don't have a fix on Larry
and Dick, and also, that's not to mean-- there .
were other meetings, you know, where Dick could
have met with Jeff and Leon, and the rest of us
not being there.

I can tell you with certainly how
much-- that as to David-- David's only contact
with that case was with the printout on that
particular date, contrary to the report.
He did not work on the case.

Q. Did you ever discuss--

A. Did not participate.

Q. Did you ever discuss the Hasenfuss
incident with Mr. Kellner?

A. Probably.

Q. Here you getting press inquiries at
that ti«e, linking the go slow, the Costa case,
with the Hasenfusi case?

Is this-- the question is, is this the
saae investigation?

A. Yes. It was again about that file,
when that was, again, cosing up again, and the
other thing that had come up was Leon had given an
interview, had talked to this man from-

:l think

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Murray Wass-- I want to say New Republic. I can't

remember now exactly what magazine it was, but

I think that was, like, in September or so that ,
that happened, and that article came out around
that time .

That was, like, a retrospective of the
Garcia and go slow, and that, I think, was in
time-- happening about the same time as Hasenfuss.

It all gets mixed together in my mind.

I think it was all happening about the
same period of time.

Q. Getting back to that, do you remember
having discussions with Mr. Kellner about
Hasenfust and Costa?
A. Yes.

I just don't remember what we
discussed .

You know, can this be part of Jeff's
case, what's going on, maybe it's more than six
guns and a mortar, all of this-- maybe he's part
of that? Is there any way to tell?

Q. Do you recall discussing the correct
status of the case with him at that point?

A. I'm sure at that point it really got
discussed in detail, having talked to-- who we

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wmmm

talked to, you know, the-- these people, what hav<
they been telling you, that kind of thing.

Q. Did you talk to Mr. Kellner about-- <

A. What was Jeff doing?

Q. What was Jeff doing and what was he
doing about the case, where it was in the
pipeline?

A. I probably asked where it was and what
wa sgoingon.

Q. Do you recall what you were told at
that time?

A. No, I really don • t .

I more vividly recall Jeff telling
things, you know, than I do being told by Leon,
what was going on.

I'm sure we did have the discussions,
you know, because it makes sense we would have.

Q. Other than contact with the public
information office, Pat Corton, did you have
discussions with anyone at the Department of
Justice on the Costa matter?

A. No .

Q. Are you aware, other than discussions
with Mark Richard, of any communications between
this office and Main Justice, on the Cost'a case?

JKASSn.

820

iWOTffl

A. No.

Q. Do you recall any meetings or
discussions-- ^

A. Wait a minute. I just want to clarify.
I am not personally-- that's the only
one I have a total independent recollection of.

Now, since then I have heard Leon say
he had discussed the case with others that--

Q. But at that time--

A. But at that time, I'm not aware of it,
no .

Q. How many trips did Hr . Feldman make to
Central America?

A. One.

Q. Did you have any contact on the Costa
case, with Mr. Mathis, Mr. Garcia's attorney?

A. No, not directly, but that became a
large part oC my life, when that thing came out,
that article, the accusations against Jeff for--
that Jeff allegedly told Mathis to butt out or he
was going to do it to him, something like that.

By that time, because of the conduct--
a mother figure, whatever, but Jeff would come in,
and he was down, would tell me, "I'm depressed,"
and I would boost him up, and when that happened--

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Jeff is very young, and he was absolutely
des troyed .

He was really beside himself. He «
called me at home that night. Really didn't know
what to do next, just really upset, something like
this had never happened to him, and from that
point on, it almost became my mission to keep Jeff
boosted up and going on this thing, and him
saying, "It looks like everything I do gets looked
at wrong. How can they say this to me."

That was a real important event in this
whole scenario.

Q. You never had any personal contact with
Mr. Mathis?

A. No.

As a matter of fact, until this
happened, I have no knowledge of who he was.

Q. Up until, say, November of 1986, did
you have any contact with any investigators from
Senator Kerry's staff or any other Congressional
investigators?

A. I may have.

You know, we got phone calls. May have
gotten telephone inquiries.

Q. Mere you ever interviewed by alnyone

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froB those staffs, from the Congressional staffs?

A. Over the phone or personally?

Q. Personally. ,

A. Well, I don't recall, but there was a
time we were being visited-- in that fall, we were
visited by lots of people, and again, that's
another one of those things where I wish I had
kept logs, where I did have things of who it was,
because it would have been nice to know who it was
now, but I don't recall.

I don't have any independent
recollection of that.

Q. Did you ever have any personal contact
with Murray Haas?

A. On the phone, and then I sat in on-- I
think it was part of an interview he was having
with Leon .

Q. To the best of your recollection, did
Mr. Kellner tell Mr. Uass anything that departed
Cro« what you have related to us today?

A. No.

I thought-- what I was particularly
angry at was because I think I was in the room for
the part when he was asked, "Have you talked to
the Attorney General

Kussii

JACK BESONEl

823

mmm

It wds a-- it was two distinct
questions, which when he wrote the article, merged

into one ,

The first part of the question was.

"Did you talk to the Attorney General about the
case," and Leon said, "No. No, except for that
one event."

He said, "No. I never got a phone call
from him. Never talked to him about it."
Q. All right .

A. And the second part of the question,
"Did you talk to the Attorney General at all," and
he said, "Maybe half a dozen times in my life,"
and when he wrote the article, he put it in such a
way that it made it sound like, although Kellner
talked to him, the Attorney General-- he did at
least speak to him half a dozen times about it.

In the context of the way he put it, it
was really pitiful the way he put it, and it
bothered me that anybody would have done that.

Let me say that was my first loss of
virginity with the press, and I said, "This is the
end of trus t now . "

Q. Other than the pieces of correspondence
or memoranda that we have discussed and t>he notes

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you have-- said you saw, do you have any
recollection of seek or having input any other
correspondence, memoranda, anything like that? ,

A . Well --
BY MR. GENZMAN:

Q. Any written products on the Costa case?

A. No. No, because other than that memo, I
don't really remember any other major written
product on that case, involved in that case.

Q. Let me ask the ultimate question.

To your knowledge, did anyone in this
office or in the Department of Justice, give or
receive instructions or suggestions that the case
should be handled in a dilatory fashion or someone
should go slow or words to that effect?

A. No, and you know what is really
remarkable about this that really upset me to know
end, if there was anything that we have after this
whole thing came out, discussed, is how odd it was
that nobody did anything or said anything, and
that, you know, wonder-- maybe it was deliberately
ignored or deliberately left alone, because
somebody thought it might come back some day,
but-- at the time it didn't seem to us it was
going to be a highly charged case, just l;ike

J A
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mussm

another gun case in Miami, but nou, I really-- the

fact nobody did anything is kind of interesting,

I
in itself. >. I

Q. Since the time when Mr. Kellner and Mr.
Feldman came to Washington to offer their
depositions-- I think that was the end of April--

A . Yes .

Q. Have you discussed with Mr. Kellner or
Feldman, what occurred at those depositions?

A. Yes.

Q. And on how many occasions?

A. When they came back, I was consumed
with curiosity.

Q. Did they tell you what questions were
asked?

A. Not specifically, other than the
general topic matter was the go slow business, and
then we know that, you know, Jeff was called back
a second time, and he came back and he told me,
"Ana, your name came up all of the time, you know,
and now everybody wants to know if you said or did
anything, to David," and I said, "Oh, great."

Q. In the course of any of these
discussions, be it the discussion on the
chronology or the depositions, has anyonef ever

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suggested to you or asked you to say anything that
wasn-t truthful, or try to create a recollection
you feel honestly you did not have? ,

A . No .

Absolutely not, no.

I'll tell you what-- this job just
isn't worth it to have done it.

Q. Have you had any discussions with Mr.
Leiwant about this case, since the day he came
apparently to you and told you that he had been
the source of the story?

A. Yes, and not of «y making, because I
really-- from the day he went-- and it was to Dick
and I-- Dick and I were talking, and he came in
and told us, you know, "I have been so totally
uncomfortable about it," and knowing, you know--
going back and saying, "Oh, my God, how did this
thing come up," just trying to avoid any further
thing, and immedia tely--

We're in the provinces, but we're not
that stupid, realizing that the next step,
anything we say beyond this would be interpreted
badly, no matter what we did, so we specifically
just tried to stay away.

I made, you know-- David did c^sme in to

JAC

ilfii!ll^e;;.-

827

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see me a couple of times, and it was about news,
so on, and usually-- more mechanical questions.

I think he was very upset when «
different events happened.

I recall a newspaper article the first
time his name came out in the paper, he was very,
you know, upset.

You know, he came to see me, and said,
"Do you know that my name is in the paper," and I
said no, and it was-- he had a friend. It was a
paper in another city, and he had a friend that--
who called him up and told him, and I think it was
Boston.

You know, it seems like it was Boston.
I don't remember, and I said, you know, "Well,
David, it's bound to happen."

You know, "What can I tell you?"

Then we had discussions about how he
was going to go up there, I guess, when you guys
talked to him the first time, the arrangements
forjf the travel, and then when we heard that
Hughes-- the Hughes Committee had voted to issue
subpoenas and David was one of the people before--
he read it in the paper, and I went and told him
that he would-- these things were going tio be

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ES, INC.
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1 happening, and he was going to be, you know-- it

2 was going to come out in the paper the next day.

3 Q. Did you ever discuss your varying ,
4- recollections with Mr. Leiwant?

5 A. Yes, on the day he walked in and told

6 us .

7 I think it was on a Monday, and it was

8 in Dick's office, and I came in-- thought he was

9 coming in to see Dick, and I was just leaving, and

10 ^"^jK^said " No, Ana. I want to tell you something,"

11 and he told us this, and my thing was, how could

12 you say this-- if I was supposed to have been

13 there, I never-- I have never been in a room when

14 Meese called about anything.

15 BY MR. GENZMAN:

16 Q. Can you remember, the best you can

17 recall, what he told you and Mr. Gregorie on that

18 day?

19 A. I came in and he said he had been-- the

20 reason he was coming forward, he had been called

21 by Heydon Gregory and a reporter, and he felt it

22 was going to come out eminently, and that he had

23 to tell us that he had been in the room where-- at

24 a meeting, although he doesn't remember Dick and

25 Larry being there.

■ ■■.. ..litJiUfflM,;

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He just recalls it yas me, Jeff and
Leon, and that he thought that Leon-- he was there
and Leon was talking on the phone, and that he get
the impression that he was talking to someone from
the Justice Department, that he may have said a
name, like. Trotter, Jensen at the time. I don't
recall.

When he got oft the phone, he said
something to the effect that, "They want us to go
slow," and said he grimaced and-- "I knew it was a
joke," and that was that, and he went to Atlanta--
he's in the appellate section of the office, and
he had gone to an appeal in Atlanta soon after
that, and he ran into this good friend, John
Mathis, and at some point had a couple of drinks
with him, and said, "Guess what I saw or heard,"
whatever, and you know, I just remember after
that, it all registered, because until that point,
until thmt very minute, that was-- I had no idea.

He were all running around, saying, "I
know it's not me," and, you know, "It's you" and
just all came together.

I said, "But you were only at that
meeting when you brought in the printout for a few
minutes," you know. ^>«..^a»«»k •'

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"Is that the meeting? Yes. That's the
meeting . "

I only remember-- just don't know ho**-
you could remember that, and I was there, and the
only call I ever heard was from Mark Richard, but
at that point, some sort of happening, where you
realize, this is the time to stop talking, don't
want you to change your mind. If that's what you
believe, fine, so be it, but our recollection is
different.

Q. What was Gregorie's response?
A . Stunned .

I don't think that Dick said anything,
which is ironic.

You know, this whole thing was over,
and we sat down together over it. I said, "Dick,
you're the great criminal advisor. He didn't ask
how, when, where, what, how many people did you
tell, and all of the relevant questions we are
dying to know, because you just--" it could have
blown us away. There was no way we could have
ever thought that.

Q. After that meeting, did you ever
discuss the episode again with Mr. Leiwant, the
different recollections?

JACK BESONER
-2-2 — Mw« t- P 1 »>.i ^^ c* ,-^^t-

831

f«sro

I asked you at the beginning, "Did you
ever discuss it with him," and you said not of
your own volition. ,

A. Yes, because after he was in
Washington, he was deposed and he cane back, and--
I don't know the tiaing, but after he was deposed,
and Larry Scharf was sitting there, and I just
started spontaneously talking about-- he said, you
know, "Well, I'« glad it's over."

It was one of-- giving the impression
it was all a big misunderstanding and it was kind
oC resolved.

He talked about it, and I don't really
remember, because I know that Larry and I just
kind oC sat there, surprised, you know, it was
like a little recollection of what he had said,
and I think he wanted to tell us, "Look, I took
care of it all," or, "It's all straightened out."

At least that's ay impression of the
conversation, but we studiously avoided
questioning hia, and saying although-- I think we
did ask him, "You still don't even remember Larry
being there," something like that, and I-- he
probably said no.

That was the other time when that was

ES, INC.

Diwsm

discussed.

Q. This is probably a hard question to
answer, but I got to ask it anyway. ,

Do you know of any reason why Mr.
Leiwant would say this? Do you have any
explanation for it?

A. For it?

Q. Yes, just different recollections, any
motivation Mr. Leiwant might have to--

A. To have done that?

Q. To come up with this?

A. I don't, and that has caused me no end
of sleeplessness, simply because I always prided
myself as having a lot of insight to people, and
why people do things, or where people are coming
from and why things happen, and this is just one
of the most totally perplexing things I have ever
been involved in.

It's beyond me to understand it.
Moreover, I'm still just amazed that
David has no-- at least that I can perceive
comprehension of what has happened as a result of
this.

I mean, he just doesn't appreciate-- he
just thinks it's a slight mi sunders tandi n}g , and it

JA
7? Mftt Flan

ES, INC.

.j}^-* \-\n ^ -> n «; \ -m

y NCLASS IFIED

will go away .

He had no understanding of the
incredible hurt it has caused to people, and the*
hurt it has caused him, which is kind of sad in
another way, too.

Q. Do you know of any political
motivations or personal animosities, that you are
aware of?

A. No, simply because in the appellate
section, I mean, it's a section in the office that
just really isn't involved.

He-- until then, he always enjoyed the
confidence of the U.S. Attorney.

I know he had been called in to work in
special confidence, on projects and things, and
the only thing that makes any sense, and it really
could explain it, is simply that-- I don't say
this happened for sure, but Mathis might have
laid, 'I'm working on such and such a case," and
he said, "I was there and they were discussing
it," and talk, you know, exaggeration, you know--
I don't know, something to make yourself feel more
important than you are, that you are in on
something, and--

In fact, that doesn't really itfake

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sense, but that's the only plausible explanation I
could have for it.

Then being caught in a situation, you,
know, you're saying you never thought it would go
beyond tha t .

You know, the old story, you tell your
kids even if you tell a little lie, at some point
it becomes a big lie, and then you're almost
commi tted to i t .

I don't know if it was political. It
would-- I never have just thought of anybody here
as being political in any way.

1 don't even know whether they are
Democrats, Republicans or what.

MR. MCGOUGH! I think those are the only
questions that I have.

Do you have any further questions?
BY MR. GENZMAN:

Q. Just a few.

I heard you aentioned that Mr. Leiwant
indicated it was just a misunderstanding.

A. That was the iapression he gave me.

He gave me that impression from his
deposition in Washington that day, and it was
almost as though-- and I find this remar Ifab le--

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almost as if he was making light of it.

I guess it was to re-assure us, "Look,
it's all solved, taken care of," almost a ,
childlike innocence about it. It was amazing.

Q. Did he go into detail about the nature
of the misunderstanding?

A. No, because we didn't want to get
really in it, but that was just the impression, it
was, like, it was all taken care of, and he
explained everything, and it was all, you know,
done .

I think it was, "Don't worry, guys.
It's all resolved."

Q. Has he ever expressed any occasions
that he had been confused or had exaggerated the
incident?

A. Not to me. Not to me, but then, you
know, maybe some day when this is over, I can say
what did happen.

1 just really would like to know what
did happen.

Q. But to your knowledge, he has always
stuck by his account of what happened?

A. I'm not really sure of what his account
of what happened is, other than what he t:old us i

.JMiiUSStt '

172 West F lagler Street, Miami, FL 33130 (30 "5) 3 7 i - i 5 3 7_

that day.

itBssro

2 I have to tell you, ny most vivid

3 recollection is that I literally felt that I had* a
*• lump in my throat, when I finally realized,

5 "David, it's somebody here."

6 You know, I think that's really what

7 the overwhelming response was.

8 He gave an explanation at that point.

9 I don't remember it specifically, you know, what

10 would have made him do that.

11 Q. In conversations with you, his story

12 has never been inconsistent, has it?

13 A. No, but then I have never known the

14 story, so that's one thing.

15 Q. What I'm getting at, from what he has

16 said on various occasions, have you found any

17 inconsistencies or reservations or admissions of

18 confusion or mistake?

19 *• Only in that he's just remarkably

20 vague.

21 The story about the grimacing, because

22 I know he didn't do anything, because-- "Leon

23 went, who are they, and went ahead--" it's

24 something that I don't even remember happening.

25 That's the only thing-- that Ue

JACK

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837

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102

repeated again, when he came back, that little
part of it.

I re«e«ber that, so I guess he is ,
sticking with whatever he said.

I would love to see what he said.

I would like to see his deposition, but
"^en we'll all know, because Hughes will have it
and it will be on TV .

MR. GENZMAN: I have nothing further.

MR. MCGOUGH: Nothing further. Thank
you .

THE WITNESS: What I'« going to do is
gratuitously add something, by the way.

MR. GENZMAN: We ask you to do that.
Tell us the answer to questions we should have
asked.

THE WITNESS: You mentioned I recall
earlier something that triggered something that I
recollected.

You said how many times had Jeff
Feldman gone to Costa Rica, and I recall seeing
Ii iii i B Tam^s testify that there were two trips, and
I came back to the office and I went to admin, and
asked, "Did Jeff Feldman go to Costa Rica two
times? Let me see his travel vouchers,", 'and there

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103

was only one trip, so I went to Jeff and said,
"You know, that wan said you were there two
times," and then we started-- he was confused. .

It was not Jeff Feldman. It was John
Mathis, because he testified at some public trial,
and for some reason, either-- I don't know,
whatever. I'm not going to say he would
misrepresent himself, but he got misrepresented as
a U.S. Attorney, and that created some kind of
inquiry to this office about unauthorized travel
by a AUSA, and I said, "That's what that was
about . "

He had an inquiry about unauthorized
travel at the time, and that's my gratuitous
comment .

MR. MCGOUGH: Okay.
(Thereupon the deposition was concluded.)

BIASSIFIED

JACK BESONER & ASSOCIATES, INC.
"> U«a»- rixniAT- Qt-T-AAt- u;>»: or 1 1 i 1 n / 1 n c; \ 1 7 1 - 1 S '^

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CERTIFICATE

STATE OF FLORIDA
COUNTY OF DADE

1, Stan Sep
Shorthand Reporter and
the State of Florida a
that I reported in sho
Barnett; that the depo
that the foregoing pag
103, inclusive, consti
transcription of my sh
depos i t ion .

I further c
counsel, 1 aa not rela
attorney to this suit,
outcome thereof.

The foregoi
apply to any reproduct
any means unless under
direction of the certi

IN WITNESS
affixed my hand this 2

lin, being a Certified

Notary Public in and for
t Large, do hereby certify
rthand the deposition of Ana
nent was first duly sworn;
es, numbered from 1 through
tute a true and correct
orthand notes of the

ertify that I am not of
ted to nor employed by an
nor interested in the

ng certification does not
ion of this transcript by

the direct control and/or
fying shorthand reporter.
WHEREOF I have hereunto
2nd day <fi JmuA 1987

Stan Sepp.i|n, CSR, NOTARY
PUBLIC AT^LARGE. MY
COMMISSION EXPIRES:
12-25-89.

yNClKSIFlEO

JACK BESONER & ASSOCIATES, INC.

177 M>« » P1anl».r StF-^^ Miam i. FI. mih M S ^ "( 7 1 - 1 ■? 1 7

840

i . . JIKDOTTIOJ "SITS J2J-^ m

Scenographic Transcript of
HEARINGS
Before the

SELECT COMMITTEE ON SECRET MILITARY ASSISTANCE
TO IRAN AND THE NICARAGUAN OPPOSITION

UNITED STATES SENATE

DEPOSITJON OF LINDA JUNE BARTLETT
Friday, June 12, 1987

UNCLA$S!R[

Washington. D.C

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by D. Siffco, Natior:;i ;. :-;- " ■ ■ -i_3 £"50 ^ I "C'Cl" '^G

(202) 529-930: (_ A

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WASHINGTON, D. C 200 01

841

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1 DEPOSITION OF LINDA JUNE BARTLETT

2 Friday, June 12, 1987

3 United States Senate

4 Select Committee on Secret

5 Military Assistance to Iran

6 and the Nicaraguan Opposition

7 Washington, D. C.

8 Deposition of LINDA JUNE BARTLETT, called as a

9 witness by counsel for the Select Committee, in the

10 offices of the Senate Ethics Committee, Hart Senate

11 Office Building, Washington, D. C. , commencing at 10:14

12 a.m., the witness having been duly sworn by MICHAL ANN

13 SCHAFER, a Notary Public in and for the District of

14 Columbia, and the testimony being taken down by Stenomask

15 by MICHAL ANN SCHAFER and transcribed under her

16 direction.

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1 APPEARANCES :

2 On behalf of the Senate Select Committee on Secret

3 Military Assistance to Iran and the Nicaraguan

4 Opposition:

5 VICTORIA NOURSE, ESQ.

6 On behalf of the House Select Committee to

7 Investigate Covert Arms Transactions with Iran:

8 JAMES BLACK, ESQ.

9 On behalf of the White House:

10 C, DEAN McGRATH, JR.

11 Associate Counsel to the President

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843

liili^SiriEO

? 9 N T E N T S

EXAMIffATIQN ON BEHAT.F nP

Hl^i^S^ S£MIE HOUSE
Linda June Bartlett

By Ms. Nourse 4
E X H I p X X «

1 24

2 25

3 ^0

UNttftSSlFlED

844

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PROCEEDIMfi.q

2 Whereupon,

3 LINDA JUNE BARTLETT,

4 called as a witness by counsel on behalf of the Senate

5 Select Committee and having been duly sworn by the Notary

6 Public, was examined and testified as follows:
^ EXAMINATION

8 BY MS. NOURSE:

9 Q Could you state your full name for the record,
10 Ms. Bartlett?

^^ A. Linda June Bartlett.

^^ Q And sometime during 1981 you came to be

13 employed at the National Security Council?

^* A That's correct.

^^ Q And at that time were you assigned to work

16 with Ken deGraffenreid?

^^ A yes, I was.

^® Q And you left the NSC sometime during March of

19 1987; is that correct?

20 A That's correct.

2^ Q And during that entire period you were

22 assigned to Mr. deGraffenreid; is that correct?

" ^ That's correct, except for a period of a month

24 to a month and a half, two months. I was assigned to

25 someone else.

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"^D. SirUo. .XJa'-cr I .urlty

845

UmSSiFIED

1 Q Who was that?

2 A Barry Kelly.

3 Q Could you just give us a quick description of

4 your duties on behalf of Mr. deGraf fenreid?

5 A I was his secretary. I typed, took dictation,

6 phones, filed — the usual.

7 Q Let me ask you some questions about our

8 favorite system. System IV, and System IV documents. I

9 understand that System IV documents are those that relate

10 to covert action or are highly sensitive; is that

11 correct?

12 A That's correct.

13 Q And System IV documents are kept in a separate

14 file room or safe that is taken care of by Jim Radzimski;

15 is that correct?

16 A He was in charge of those at one time.

17 Q He was the security officer in charge of

18 System IV documents up until November of 1986; is that

19 right?

20 A He left, yes, that fall.

21 Q And Brian Merchant took over from Jim

22 Radzimski as the security officer in charge of the files;

23 is that right?

24 A Yes. He took over temporarily, yes.

25 Q To your knowledge, did Jim Radzimski and his

UiUi^lFIED

846

?, Of&grs

1 successor, Brian Merchant, did they — how should I put

2 this — let me ask this a different way.

3 Did Mr. deGraffenreid, to your knowledge,

4 supervise Mr. Radzimski and his procedures for taking

5 care of the System IV documents?

6 A Supervise in what way?

7 Q Did Mr. deGraffenreid create the procedures to

8 take care of those documents or did he approve the

9 procedures that Mr. Radzimski would use to take care of

10 the System IV documents?

11 A I don't know how to answer that.

12 Q If you don't know, you don't know.

13 A Mr. deGraffenreid was head of the

14 intelligence.

15 Q And as head of intelligence he would have

16 general responsibility for everything within the

17 department, but you don't know specifically about the

18 procedures; is that what you're trying to tell me?

19 A Hell, since he was head of the intelligence

20 directorate there and System IV documents were located

21 there ~

22 Q Did he have overall responsibility to take

23 care of the System IV documents?

24 (Pause.)

25 Let's move on for a minute. Let me ask the

UNGtmiFIED

847

UNdlASSiFlED

1 question in a more concrete fashion. Would Mr.

2 deGraf fenreid and Jim Radzimski or, later, his successor

3 have meetings, discussions about the System IV security

4 procedures, to your )cnowledge?

5 A I don't recall any specific meetings. I think

6 over the years they must have. There would have been

7 something there.

8 Q On a day-to-day basis, if someone in the NSC

9 wanted to see a System IV document would they go to Jim

10 Radzimski? Would they go to Mr. deGraffenreid? Between

11 those two, what would be the normal procedure?

12 A If they requested a document, then they would

13 go to Jim, or they may call through me. It would just

14 depend.

15 Q So you did get calls occasionally for System

16 IV documents?

17 A On occasion.

18 Q They would call you and ask you to pass a

19 message to Mr. deGraffenreid?

20 A If Jim wasn't there, or I'd say well, you'd

21 have to talk to Jim or something like that.

22 Q Okay. Let me get this clear. If Jim

23 Radzimski was not availzible for a System IV request,

24 someone from the NSC might ask you to go look for the

25 document, or would they ask you to. speak to Mr.

ONWSiRED

848

UNMSSFIED

1 deGraffenreid about the document — just on a normal

2 daily basis. I'm just talking generally.

3 A If Jim wasn't there, then of course they would

4 go through me to request the document.

5 Q And was it your normal practice to then go to

6 Mr. deGraffenreid and speak to him about getting the

7 document, or would you go to the files and proceed to

8 fill the request?

9 A As a procedure, I would probably occasionally
speak to Mr. deGraffenreid. It would just probably

11 depend on —

^^ Q So on some occasions you might speak to Mr.

13 deGraffenreid —

^* A And on some occasions I may just go directly

15 to the files.

^* Q By the way, did you know Mr. Radzimski? i

17 mean, was he a part of sort of a team in the office, or

18 was he off on his own doing his own job? Was he

19 integrated into the whole intelligence directorate?
2° A He was part of the office. He was working

21 right in the office. He couldn't help but be part of the

22 office.

^' Q I» where he works just physically close to

24 where you worked? I'm just curious.

25 A Yes.

UNKSSSIFe

849

uNciminEo

Q Did he keep what you considered to be a very
Close hold on the documents? Was he very protective of
his domain, so to speak?

Well, the documents were sensitive.
Q was he generally considered a reliable person
6 in the office?
"^ A Yes.

1
2
3

4 A

He was a dedicated, reliable person.
Let me ask you this, could you just tell us
9 who had access to the System IV files?
■"■^ A Physically?

" ° Physically, the hard copy in the safe, who

had the combination to the safe to have access to those
13 documents?

* ''*''' "-li-tically anyone in the office would
have had access to the safes.

Q Anyone in the intelligence directorate?
A Yes.

Q And could you just nam. for us those people in
the office, to «a)ce sure we have a clear record?

A At that time, of course, me, Mr.
decraffenreid, Mr. Canistraro, Mr. Major. Who else was
there at th. time? There was Jim, the secretaries there

Q Kathy Gibbs?

A Kathy Gibbs and Pat Rawson. And Colonel May.

UNCI:^S$tflED

850

mms^m

1 Q He was in charge of space programs, as I

2 remember, a highly relevant topic to this investigation.

3 A Yes.

4 Q Were the combinations in a separate location,

5 a central location — the combinations to the safes — so

6 that if someone wanted to have access to the safe they

7 could go to a drawer and look at the combination?

8 A Yes. The policy was to have them in one place

9 and people would )tnow that one safe combination in case

10 there was a necessity to pull it out.

11 Q And everyone in the office knew where those

12 were?

13 A They were supposed to. I can't vouch for them

14 all.

15 Q Theoretically they knew.

16 Now I understand Mr. Radzimski kept a computer

17 record of his documents in the System IV files. Were you

18 familiar with that computer system at all?

19 A No. I never got involved with the computer

20 aspect of it.

21 Q Do you know if anyone else in the office was

22 either involved with the computer aspect of it or knew

23 how to run the computer?

24 A That was brought up one time. I didn't have

25 time to do it. Pat was trained on it briefly — Rawson.

OiraiSSIflEB

851

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1 That must have been at least a couple of years ago —

2 briefly. I'm not sure if she remembers how to do it.

3 That was quite a while ago.

4 Q Have you seen her actually using the computer

5 ever?

6 A Oh, at one time. As I said, this was probably

7 at least two or three years ago.

8 Q Were these occasions when you saw her using

9 the computer two years ago, these are the times that you

10 remember; or do you remember it occurring on and off?

11 A No. We were severely understaffed.

12 Q At the time?

13 A At the time.

14 Q So that when you saw her using the computer it

15 was two or three years ago, or two years ago?

16 A To the best of my recollection, yes.

17 Q Was there anyone else in the office that was

18 trained on the computer?

19 A No, not to the best of my recollection. No

20 one else was trained.

21 Q Did Mr. deGraffenreid know how to use the

22 computer, to your knowledge?

23 A No, not to my knowledge.

24 Q And you said that you yourself did not know

25 how to use the computer; is that correct?

UNCtASStflED

852

mmPB

2 Q I take it as Mr. deGraf fenreid's secretary you

3 had occasion to type in System IV documents; is that

4 right — type for him?

5 A Yes, that's correct.

6 Q And you would get a number from Jim Radzimski

7 for the document; is that right?

8 A That's correct.

9 Q Okay. Did you ever have occasion to type a

10 document that did not have a number and was termed a non-
11 log document?

12 A When we submitted admin memos I don't believe

13 we put them in the system.

14 Q By admin memos do you mean memos dealing with

15 administrative affairs?

16 A Administrative matters.

17 Q These memos did not include highly sensitive

18 matter?

19 A No. Those were usually unclassified.

20 Q That's why they didn't get a system number,

21 because —

22 A Well, that was the procedure at NSC, whoever

23 formulated the policy, but I'm not sure about that.

24 Q These were day-to-day, normal affairs. Okay.

25 Have you ever seen a non-log document? Did

mwmm

853

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1 you see a non-log document in the course of your duties

2 as Mr. deGraffenreid's secretary? What I mean by that is

3 a document that on the upper righthand corner, instead of

4 the System IV number you will see the term "non-log".

5 A I don't recall any specific particular

6 documents.

7 Q Let me as)c you again, to go back to the

8 procedures for the System IV documents, if someone came

9 to you and asked you for a System IV document, how would

10 it be that that document would find its way back into the

11 files? In other words, was there a procedure so that if

12 an original was taken out of the files that it would go

13 back in where it was found?

14 Was there something that you did when these

15 requests came to you?

16 A Well, the person requesting the document would

17 bring it back to the office. It would be logged back

18 into the computer log, and then it would be filed back

19 into the file itself, the hard copy.

20 Q When you say logged back into the computer

21 log, if an original were taken out, there would be a

22 computer entry indicating that it would be taken out, to

23 your knowledge?

24 A That would be the procedure, yes.

2 5 Q How many times would you say that requests

mamm

854

ONCk^iFIED

1 came to you for System IV original documents? Was it a

2 normal event — it happened every day ~ or was it once a

3 month, twice? I'd just like to get some idea.

4 A It's hard to say. It varied. There was no

5 set pattern.

6 Q Let me see if I can get you to be a little bit

7 more specific on that. How many times during the course

8 of your duties in a year would a request be made to you

9 to pull a System IV original — ten times, 100 times?
10 Can you give me any ballpark kind of figure?

^^ A I really couldn't, because it varied — people

12 requesting.

^^ Q Would you consider it to be a normal request

14 for a System IV document, or would it be unusual for

15 someone to come to you for a System IV document?

^* A It would be a routine request for somebody on

17 the staff calling up for an intel report.

^® Q And would these requests come to you generally

19 when Jim Radzimski was unavailable or would people just

20 talk to you?

21 A It would depend.

^2 Q Sometimes even if Jim might be available as

23 well?

^* A It would depend. Since, you know, they knew I

25 worked in the intel office, it just would depend.

mmim

855

yNJiissifiED

1 Q What would you do when a request came in for a

2 system IV original? You'd go to the hard copy, pull it?

3 A I would ask the person handling the System iv,

4 if Jim was there, if he could, if not, then I would try'

5 to fill the rec[uest

Q Okay, so normally if someone asked you for a
system IV document you would go to Jim Radzimski and ask

8 him to pull the document. He would do so. He would hand
you the document, the original document. At that point
would some entry be made somewhere to indicate that the
document had been taken out of the System IV files?

^^ ^ T^*^ "°"ld b« the correct procedure, yes.

" Q would you make that entry somewhere? Would

14 you make a written record?

^^ ^ " *^" "^s "°t available, it should be on the

15 computer, yes.

^^ ° °^^y- I'» sorry to be so dense about this,

18 but if w. can just back up a minute, if jia Radzimski

19 were there and you had a request for a System IV

20 original, you would bring it to him, he would pull the

21 hard copy. He would make an entry on his computer; is

22 that correct?

^^ * '^*^*t would be the correct procedure, yes.

^* Q A^l right. If Jia Radzimski were unavailable

and there was no one tending the files that day and

IINCtASSIFIED

856

iJNCJiSSiFIED

1 someone had brought you a request, you would go in and

2 pull the hard copy and then would you make a notation

3 somewhere, a note for Jim, or what would you do?

4 A That would be the right way of doing it

5 because I don't know how to work the computer — writing

6 it down on paper.

7 Q That's what I wanted to know.

8 A I would write a note.

9 Q You would write a note to Jim and say I took

10 these documents at so-and-so's request — something along

11 those lines?

12 A Yes.

13 Q Do you remember any specific request for

14 System IV documents in the year 1986?

15 A In 1986?

16 Q First of all, tell me how many times you think

17 people requested documents, if you can, during 1986.

18 A It's hard to say. I don't know how many came

19 directly to Jin.

20 Q Well, no, only those requests that came to

2 1 you .

22 A Came through me?

23 Q Yes.

24 A I really don't recall.

25 Q Do you remember requests from Lieutenant

msimm

857

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1 Colon«l North during 1986 to pull a System IV original?

2 Do you remember any such request?

3 A No, I don't recall that at all.

4 Q Do you remember any requests from Fawn Hall,

5 his secretary?

6 A To the best of my recollection, I don't recall

7 anything.

8 Q Perhaps earlier in date, covering 1985, do you

9 remember any specific requests from Robert McFarlane for

10 a System IV original document?

11 A No, I do not recall that.

12 Q How about from his secretary, Wilma Hall?

13 A Mo, I don't recall that either.

14 Q Back to 1986, do you remember any requests

15 from Lieutenant Colonel Earl for a System IV original?

16 A No, I don't.

17 Q And Commander Coy for a System IV original?

18 A No, I don't recall that either.

19 Q Did Mr. deGraffenreid ever ask you to pull

20 System IV originals for him? I imagine that during the

21 course of hia work with these documents that he might

22 have.

23 A Well, it was Mr. deGraffenreid 'a habit, or he

24 did like to work with original documents because of all

25 the notes written on the original documents so that he

UNeU^iFlEO

858

\\mmB

1 could see. That was something normal for him.

2 Q The notes written on the originals, he wanted

3 to see notes on the original documents, or the originals

4 would be clean so that he wouldn't have to deal with

5 notes on copies? Which one of those?

6 Let me ask the question in a simpler fashion.

7 He wanted to see the originals because of notes that were

8 written on the originals?

9 A Yes, any side margin comments or anything like

10 that.

11 Q Okay. And so it was his regular practice to

12 ask you for a System IV original and you would go to

13 either Jim or to the files and bring him back the

14 original document; is that correct?

15 A Yes, that's correct.

16 Q Let's go to November 1986. Did Mr.

17 deGraffenreid ask you during November 1986, do you

18 remember any specifics about documents that he asked you

19 for during that period?

20 A I don't recall anything specific, no.

21 Q Let me ask you a question that I'm curious

22 about. You mentioned to me that Mr. deGraffenreid liked

23 to work with originals because of marginalia on the

24 original. Do you know how that marginalia would arrive

25 on that document?

isisssra

UNiAS^RED

1 A When we create the System IV documents they

2 are information or action memorandums. They do go across

3 to the West Wing for whatever purpose, and then when they

4 come back It would sometimes have comments or notes or

5 something to that effect on them.

6 Q So as a general matter it would likely be that

7 the marginalia would be —

8 (A discussion was held off the record.)

9 MS. NOURSE: Back on the record.

10 BY MS. NOURSE: (Resuming)

11 Q I was in the middle of a question. The

12 marginalia would generally be something someone had

13 written in the West Wing, typically the National Security

14 Advisor; is that right?

15 A Yes, it would be, typically.

16 Q Aside from that reason, do you know of any

17 other reason why people would want to see the original as

18 opposed to a copy?

19 A I can't answer for other people; I don't know.

20 Q Okay. It's just something I'm curious about.

21 Generally when a System IV document would be requested,

22 would you assume that the original was what the requester

23 would want? Let me clarify that.

24 If someone came to our security officer and

25 said I want X document, he would hand me a copy of the

UNMSSIFIFD

860

lIHiiilFlffl

1 document, not the original, and I'm just curious whether

2 it was a standard practice to hand out the originals or

3 whether you would make a copy if a request came to you

4 for a document.

5 A Could you repeat the question again, please?

6 Q- Sure. Was it your normal practice to obtain

7 the original from the System IV files upon a request for

8 a particular document, or would you make a copy of that

9 docviment and give it to the person who had requested it?

10 (Pause.)

11 Let me give you a hypothetical. Someone from

12 the NSC calls up and says I want document 4002, and you

13 say fine, hang up the phone. Jim Radzimski's not there.

14 You are there. You go look for the hard copy of the

15 file. Now you find 4002. Is it your assumption that the

16 person wants the original at that point and you will hand

17 him the original, making a note to Jim that you've done

18 that?

19 A It would not probably be my assumption.

20 Q Would you ask the person in this case whether

21 they wanted a copy or the original?

22 A If I were processing the document, I would

23 probably just — it would depend if they would want it as

24 an add-on to their other package or, you know, the reason

25 they want it. It would just depend.

UNffOFe

861

UNfilWIEI)

1 Q What were the typical reasons that they would

2 want — you mentioned something about an add-on to a

3 package.

4 A Yes. If there was a follow-on action or

5 something to a package that was already initiated, yes.

6 Q So I've never been very clear about add-ons, I

7 have to confess. Could you explain for us simply what

8 the add-on procedure was or what an add-on memo is?

9 A Certainly. If the first docximent you

10 initiated in System IV goes across the street and is

11 acted upon by the Advisor or the Deputy, it comes back

12 for further action. If it was necessary for you to

13 resubmit another memo, you would probably usually do an

14 add-on and retain the same original number, System IV

15 number, so that it could be logged in together. It would

16 be a good reference point.

17 Q Would you need the original System IV document

18 when you were creating the add-on? In other words, you

19 had suggested earlier that one of the reasons why one

20 might request a System IV original is for the purpose of

21 creating an add-on memo. I'm just not quite sure how

22 that works.

23 A Hypothetically, if I was doing the package I

24 would probably send over the original. It might be an

25 attachment or something to the_add-jDn package, so that

: something to the add-jsn

862

mmmm

1 the Advisor could see the original.

2 Q I see. Aside from that reason, are there any

3 other reasons you can think of why one might request the

4 original System IV document?

5 A I really do not know myself.

6 Q Let's go back to the situation about the

7 difference between originals and copies. If someone

8 called you up and asked for a System IV document and Jim

9 Radzimski was not there and you'd go in and try and

10 process the request, if the individual requesting the

11 document did not say one way or the other, would it be

12 your standard practice to make a copy of the document

13 that's in the files and give the copy to the person

14 requesting the document?

15 A I don't )cnow if you would really say a

16 standard practice. I guess it would just depend, you

17 know.

18 Q But you did on occasion? On some of the

19 requests you would make copies?

20 A Make copies of the System IV?

21 Q And keep the original System IV document in

22 its file?

23 A I may have on occasion done that. I don't

24 recall any specifics.

25 Q And on other occasions you would actually send

UmSSIFI[D

»NWf![!)

1 the original to the individual recjuesting the document?

2 A I would send whatever, the System IV Intel doc

3 or report to the person.

4 Q You would send the original to the person?

5 A The intel report itself, rather than Xeroxing

6 it.

7 Q Are these particularly long documents?

8 A Some of the intel reports are.

9 Q Let me go back again to how you would let Jim

10 know that you had taken out an original or made a copy.

11 It was your practice to leave him a note, is that

12 correct, as to what action you had taken — whether you

13 had made a copy or processed the document by sending the

14 original on? You would tell him what you had done so

15 that the file —

16 A I would verbally tell him, if he were there,

17 if he was going to be back, or I'd write a note or

18 something if he was not there for a while.

19 Q Okay. Was there any other system by which

20 those documents were kept track of?

21 A I don't understand.

22 Q Was there a log in which you would write I

23 signed this document out to Admiral Poindexter, for

24 instance?

25 A No, I'm not aware of any log.

UimSSIFIED

864

llNSU^IflED

1 Q There was no other procedure aside from

2 letting Jim Radzimski know by telling him orally or by

3 writing him a note that you had taken the original and

4 made a copy?

5 A That's correct.

6 Q Let me show you a note. I will mark this as

7 Bartlett Exhibit 1.

8 (The document referred to was

9 marked Bartlett Exhibit Number

10 1 for identification.)

11 No doubt you have seen this note before, since

12 it was blown up and shown on television recently.

13 A So I understand, if this is the same one.

14 Q Let me ask you this. Aside from the

15 television blowup version of this document, which is a

16 series of seven System IV numbers, did you see this

17 document ever prior to November 1986?

18 A No, I don't recall seeing this.

19 Q Let me ask you, because the question is

20 slightly unclear, did you see it during November 1986 at

21 any time?

22 A I don't recall seeing it during November. I

23 was shown it later by the Independent Coxinsel, if this is

24 the same one with my initials on it.

25 Q We'll get to that in a minute, but you don't

wmfmw

865

um^'Pfl

1 recall seeing the note in this form aside from

2 Independent Counsel or what you might have seen on TV?

3 A No, not to the best of my knowledge.

4 Q Let me mark this as Bartlett Exhibit 2 .

5 (The document referred to was

6 marked Bartlett Exhibit Number

7 2 for identification.)

8 Let me ask you first to focus on the lower

9 lefthand corner, to a note signed JB, which appears to

10 read: signed out to Ollie North, with the initials JB,

11 all in a circle. Is that your handwriting?

12 A Yes. It's my handwriting. JB.

13 Q And JB are obviously your initials. Do you

14 remember ever seeing this document?

15 MR. McGRATH: Let's go back and go slow. Is

16 the handwriting, "signed out to Oliver North", is that

17 your handwriting?

18 THE WITNESS: Yes. It appears that it is my

19 handwriting.

20 BY MS. NOURSE: (Resuming)

21 Q And the initials JB are your initials?

22 A Yes, that's correct.

23 Q All right. Do you recall seeing this

24 document, which is another set of System IV numbers with

25 a handwritten note above it?

mms^m

82-690 0-88-29

866

mmm^

1 MR. McGRATH: Also we should reflect the fact

2 that it is the same set of System IV numbers as Exhibit

3 1.

4 MS. NOURSE: That's right, Dean, the same set

5 of System IV numbers, along with a handwritten note

6 apparently signed Brian beneath those System IV numbers,

7 and another handwritten note that we have just identified

8 as being in the handwriting of Ms. Bartlett.

9 BY MS. NOURSE: (Resuming)

1° Q Do you remember ever seeing this document,

11 aside from anything on television or before the

12 Independent Counsel?

13 A I really don't recall this. I see my

14 handwriting here. It was a request I processed and I see

15 a lot of documents I don't remember each specific

16 document.

17 Q Let me ask you the same question about the

18 document without the note above the word Brian. This

19 appears to be a note by Brian Merchant. Have you ever
2 seen the document without that note on it? In other

21 words, it would be a series of System IV numbers and

22 simply your note about signed out to Ollie North.
2 3 A Without the Brian note?

2 4 Q Without the Brian note, yes.

25 MR. McGRATH: With just the circled part?

wmmm

867

\imissffl

1 BY MS. NOURSE: (Resuming)

2 Q With just the circled part and the System IV

3 numbers.

4 A I don't recall it, no.

5 Q The reason I ask that is that it appears that

6 one may be superimposed on the other and I don't know how

7 the original form of the note might have been.

8 Let me ask you this. Could you identify what

9 this reference here, which appears to be —

10 A It's a scribble.

11 Q It appears to be partly within the circle

12 surrounding your note.

13 A BM, Brian Merchant.

14 Q I see. Do you ever remember seeing on another

15 piece of paper, separated from the System IV set of

16 nximbers, this note by Brian Merchant?

17 A Separate from the numbers or what?

18 Q Separate from the numbers, yes. Do you

19 remember seeing a note not necessarily attached to the

20 System IV numbers and not necessarily with this notation

21 that you've identified to be in your handwriting, but

22 just simply a note from Brian Merchant indicating — and

23 I will read from the document — "all originals attached

24 except 401214", et cetera?

25 A No, I don't recall.

mumw

liill&SiFiEfl

1 Q Let me try and refresh your recollection about

2 this. Do you remember at all an incident in November of

3 1986 in which Ollie North asked you to obtain some System

4 IV documents for him?

5 A I don't recall any specifics like that, no.

6 Q Do you remember any incident in November 198 6

7 where Fawn Hall came to you on behalf of Ollie North and

8 asked for System IV originals?

9 A No. I don't recall that.

10 Q Okay. Did you ever have a conversation with

11 Mr. deGraffenreid during November 1986 in which he said

12 Ollie North wants some System IV originals?

13 A I don't recall anything like that, to the best

14 of my recollection, no.

15 Q So Mr. deGraffenreid never asked you to sign

16 out originals to Ollie North, to the best of your

17 recollection, during November of 1986?

18 A To the best of my recollection.

19 Q Do you know whose handwriting the System

2 numbers are in? Would you recognize the handwriting, if

21 given to you?

22 A No. I do not know whose handwriting that is.
2 3 Q It appears that there are notations on the

24 side that may be in different handwriting than the System

2 5 IV numbers themselves. Does that notation, which appears

ONWrniED

a^u

gty^Sriti)

TOP SECRET 29

1 to say "cover", do you know whose handwriting that might

2 be?

3 A No, I don't Jtnow.

4 Q What about this reference to Yediot Aharonot?

5 A I don't even know what that is or whose

6 handwriting that is.

7 Q Just for your information, it's an Israeli

8 newspaper, so you get to learn something today.

9 A Now I know.

10 Q You know that that's an Israeli newspaper.

11 Have you heard of this before?

12 A Only on testimony.

13 Q Testimony you've heard during the hearings? I

14 see. Okay.

15 A Or maybe on the news. I don't recall.

16 Q So you don't know whose handwriting that is?

17 A No.

18 Q And this handwriting, "all originals attached

19 except", signed Brian, would you recognize that as Brian

20 Merchant's handwriting?

21 A I don't know if I've actually seen him write

22 out more than a word or two. I see the signature there.

23 Q Based on that you would believe it would be

24 his.

25 Let's look at the dates on the document.

yms^iFSEe

870

UNeLftSS!R[0

1 There's a November 21, 1986, stamp date, and there's also

2 a November 25, 1986 stamp date. It's unclear to me which

3 of these dates refers to which of the notes, but let me

4 ask you this.

5 During this period, November 21 to 25, 1986,

6 there was a lot of — there were press conferences, et

7 cetera, about the Iran initiative, particularly on

8 November 25, when the Attorney General announced the

9 existence of the diversion memo. This was a period in

10 which I assume that a lot of attention was paid at the

11 NSC to the disclosure of the Iran initiative.

12 I am wondering if you can try and put yourself

13 back in that period and remember anything that might have

14 had to do with Ollie North and signing out original

15 documents.

16 A The 25th was a Tuesday; is that correct?

17 Q That was Meese's press conference on that day.

18 A No.

19 Q You don't remember Ollie North coming to ask
2 you for originals on that day?

21 A No.

22 Q Do you remember any other requests by anyone

23 else on that day for a System IV original?

24 A No, I do not recall anything.

25 Q Do you remember on that day, November 25,

mtmm

871

m^mi

1 1986, did Mr. deGraffenreid ask you to pull a System IV

2 original?

3 A I'm sorry. On what day?

4 Q November 25, 1986. This is the day of the

5 press conference.

6 A No, I don't recall anything specific.

7 Q Do you remember any conversations on that day

8 that Mr. deGraffenreid might have had with Oliver North?

9 A I have no direct knowledge of that.

10 Q By "direct knowledge", what precisely do you

11 mean? Let me ask you another question.

12 A I don't know if he saw him out in the hallway

13 or said hello. I don't know.

14 Q You did not overhear any conversations between

15 Oliver North and Mr. deGraffenreid on that day?

16 A No.

17 Q Did Oliver North come to visit Mr.

18 deGraffenreid that day, if you remember? That's the day

19 of the press conference.

20 A I don't recall seeing Ollie in the office that

21 day, in our office.

22 Q Do you recall seeing him in the office the

23 previous Friday?

24 A In our office?

25 Q Which would be November 21.

mt\m'B

872

mwife

1 A I can't remember what I did yesterday.

2 Q I have the same problem, I assure you.

3 A I don't recall if he was or not.

4 Q Do you remember any unusual activity in the

5 office during that period, that Friday, November 21,

6 Saturday, Sunday, Monday, Tuesday, when the press

7 conference was held?

8 A You say the weekend. I wasn't working on the

9 weekend, I don't think.

10 Q How about that Monday or Tuesday, the 24th and

11 the 25th of November?

12 A I don't recall anything. Monday I was working

13 as usual. Tuesday, of course, was the press conference.

14 Q Did you watch the press conference?

15 AX watched a few minutes here and there, yes.

16 Q Were you surprised at the revelations about

17 the diversion?

18 A I was surprised.

19 Q Yes?

20 A Yes.

21 Q Let me ask you a final question on the note.

2 2 To the best of your recollection, Mr. deGraf fenreid never

2 3 handed you either Exhibit 1 or Exhibit lA and asked you

24 to go look for originals?
2 5 A I don't recall anything like that, to the best

UNClKSSff

873

jsjl,@<»fnrn

1 of my recollection.

2 Q To the best of your recollection, Oliver North

3 never handed you either Exhibit 1 or lA and asked you to

4 go get System IV originals?

5 A No. To the best of my recollection, he did

6 not.

7 Q If you saw this note, would these documents

8 mean anything to you? Would you associate anything with

9 these particular numbers — a type of document?

10 A Well, it would be a System IV number. Other

11 than that ~

12 Q You wouldn't recognize those numbers as

13 associating them with any particular content of a

14 document?

15 A No.

16 Q Did you ever have a conversation with Brian

17 Merchant about pulling System IV originals for Oliver

18 North during this period, November of 1986?

19 A I don't recall any specific conversation.

20 Q Do you recall any general conversation?

21 A I don't recall any, no.

22 Q To your knowledge, had Brian Merchant taken

23 over from Jim Radzimski at this time, November 21 through

24 November 25, 1986?

25 A Jim was not there. He hji^ already left.

was not there . He haA i

wmsm

874

\mmiE

1 Q He had already left at that time.

2 Were your procedures with Brian for taking out

3 an original System IV the same as with Jim? In other

4 words, if you had taken out an original you would leave

5 Brian a note, as you would for Jim?

6 A The procedures were not changed from Jim to

7 Brian.

8 Q Okay.

9 A To the best of my knowledge.

10 Q To the best of your knowledge Brian didn't

11 require you to do anything if you had processed a request

12 in his absence?

13 A No.

14 Q Would it be correct to say that this note on

15 the bottom of Exhibit 2 "signed out to Ollie North, JB"

16 would be the standard kind of note you would leave for

17 Jim or Brian if you had taken out an original document

18 and given it to whoever had requested it?

19 A If I had retrieved a document from System IV,
2 that would have been the standard.

21 Q By this you would tell him who had obtained

22 the original documents?

2 3 A Yes, because it needed to be accounted for.

24 Q Would you follow up on original requests ever?

25 Would you go back to the person and say, hey, where 's

UlttlSSSlFIED

875

llNWSiBEO

1 that original?

2 A Things are hectic in the office. I would

3 assume they would return it when they were finished with

4 it.

5 Q Was that basically Brian or Jim's job, to

6 follow up on the original requests?

7 A I would think that would be one of their —

8 Q You yourself never called or had occasion to

9 call someone and say bring that original back?

10 A I don't ever remember doing that — an

11 original intel doc or report or something back.

12 Q It was not your standard practice to keep

13 track of these documents?

14 A No. I had too much other things to do.

15 Q Let me ask you some general questions about

16 your boss, Mr. deGraffenreid. What was his relationship

17 like to Ollie North? Were they close friends?

18 \ A I would say they were friends, as with the

19 other staff members.

20 Q Was Colonel North often in the office?

21 A He came in the office occasionally, no set

22 pattern. It wasn't every day. He did come in the office

23 on occasion.

24 Q Do you ever remember a time in 19.85, the

25 summer of 198 5,. whVWViere^*r» v'i»SP>#*ies =»<='« ^V

ttffiiffl

876

mmw

1 Congress about Colonel North? Do you remember that

2 period of time at all? Do you remember the inquiries

3 being made?

4 A In 1985?

5 Q Yes, just generally.

6 A I don't recall anything.

7 Q You don't recall that. Do you recall ever

8 during the summer of 1985 — and this is when the

9 inquiries were being made — that you had a request to

10 pull System IV documents, a number of System IV

11 documents?

12 A In '85?

13 Q Yes.

14 A I don't recall.

15 Q I know it's a long time ago. That's why I was

16 asking you about the incpiiries about Colonel North,

17 because I thought that might help you locate it in time.

18 Q Do you remember ever hearing Colonel North and

19 Mr. deGraffenreid discussing the issue of the inquiry

20 about Colonel North and his activities with the contras?

21 Do you remember overhearing any conversations about

22 Congressional inquiries of Colonel North?

23 A No, I do not.

24 Q Let me tell you this. From what we know, we

25 know that there were documents pulled during this period

UNCUtSSIFIED

877

yNWWiEO

1 to respond to Congress' requests, and these were System

2 IV documents, and Brenda Reger had various people working

3 for her to determine what were the relevant documents,

4 including Jim Radzimski. Do you remember that incident

5 at all — Brenda Reger dealing with Jim Radzimski and

6 pulling documents for Congress' inquiry?

7 A Now what time?

8 Q This is during the summer of 1985, August or

9 September.

10 A No, I don't recall that.

11 Q Do you ever remember Jim Radzimski discussing

12 with Mr. deGraffenreid during this period, Aucfust or

13 September of 1984, the pulling of System IV documents?

14 A In '85?

15 Q This is in the summer of '85, whether there

16 were any discussions between Mr. deGraffenreid and Jim

17 Radzimski relating to pulling documents for the

18 Congressional inquiries of North.

19 A I don't recall any of that.

20 Q Do you ever remember any conversations in

21 which Mr. deGraffenreid asked Jim Radzimski to pull the

22 documents that are identified in Exhibit 1?

23 A No, I don't recall that.

24 Q Do you remember Mr. deGraffenreid making a

25 comment to Mr. Radzimski such as well, Jim, I asked you

UNCtAmi[D

878

UNCUSSIREO

1 to pull those System IV docvunents; where are they? Do

2 you remember some sort of exchange about Jim failing to

3 fulfill a request during the summer of 1985?

4 A No. I don't recall that.

5 Q Do you ever remember hearing, whether in 1985

6 or 1986, of an occasion when Mr. Radzimski failed to

7 fulfill a request for a document for an individual?

8 A No, I don't.

9 Q Let me ask you the basic question that we ask

10 everyone around here, and that is when did you first

11 learn of the Iran initiative? Was it when you heard

12 about it in the press or had you heard about it earlier?

13 A In the press, the news, media coverage.

14 Q And by Iran initiative I meant the sale of

15 weapons to Iran.

16 A In the media coverage.

17 Q Okay. Had you ever heard, prior to Attorney

18 General Meese's press conference on November 25, about a

19 diversion of funds from the Iran arms sales to the

20 contras?

21 A No, I didn't.

22 Q Has it standard practice for you to see all

23 System IV documents? In other words, when members of the

24 NSC created a System IV document outside the intelligence

25 directorate, would the <^°SJ^9^i'i»rtP'^^'^ * ^°^'^ ^° *°

879

1 you to go through to the files, or would the copy go

2 straight to Jim Radzimski?

3 A It would be addressed to Jin. Someone may

4 drop it off at my desk or leave it in the mailbox. If I

5 picked up the mail, of course, I would get it and put it

6 at his desk. But I did not review them.

7 Q Do you did not review the documents?

8 A Yes.

9 Q You simply transported them?

10 A To Jim, if they came across my desk, but they

11 should go directly to him.

12 Q In any event, let me show you what is now

13 famous as the diversion memo. You can mark this as

14 Bartlett Exhibit 3.

15 (The document referred to was

16 marked Bartlett Exhibit Number

17 3 for identification.)

18 Bartlett Exhibit 3 bear* our Bates stamp

19 number N-590, and I will disclose to you that this is the

20 diversion memo and several pages on there is a key

21 paragraph which begins: $12 million will be used to

22 purchase critically-needed supplies for the Nicaraguan

23 democratic resistance.

24 Do you ever" recall seeing this document? I'll

25 give you a few minutes to read it, if you want.

wmmm

880

\mm\m

1 (Pause.)

2 A No, I don't.

3 Q Vou don't recall ever seeing that document,

4 Exhibit 3?

5 A No.

6 Q Do you recall any specific conversations that

7 might have taken place between Mr. deGraf fenreid and

8 Oliver North concerning the contras, any specific

9 recollection of overhearing a conversation?

10 A No.

11 Q Any specific recollection of a conversation

12 related to the sale of weapons to Iran?

13 A No.

14 MS. NOURSE: Can we go off the record for a

15 minute?

16 (A discussion was held off the record.)

17 BY MS. NOURSE: (Resuming)

18 Q I understand that you don't recall the

19 specific incident involving Oliver North and the note

2 that appears on Exhibit 2 in your handwriting. Would it

21 have struck you as unusual for Oliver North to come to

22 you for a System IV original, if in fact that was the
2 3 case, as the not* seems to indicate?

24 A Unusual?

2 5 Q Was it unusual? Had it ever happened before.

mmm

881

1 to your recollection, first of all?

2 A I don't recall any such.

3 Q Okay. Apart from whether you recall any

4 specific incidents involving Oliver North, if, for

5 instance, he had called you up, would you think that that

6 would be a strange incident, that he would be asking for

7 a System IV original?

8 A If he called me up requesting a document, it

9 would just be a routine. It would not be strange to me.

10 Q Do you have any specific recollection of any

11 incidents in which he called you for a System IV original

12 dociunent?

13 A No. I don't have any recollection of that.

14 Q And would that include Fawn Hall, on his

15 behalf — any specific recollection of Fawn Hall

16 requesting a document for Oliver North?

17 A No, I don't recall that.

18 Q And no specific recollection of Mr.

19 deGraffenreid asking you to pull documents for Oliver
2 North?

21 A I don't recall that, no.

22 MS. NOURSE: I want to thank you, Ms.

23 Bartlett, for appearing and cooperating with us in this

24 investigation and thank you for putting up with my

25 repetitive questions about Exhibits 1 and 2, which I will

mmmm

882

leSSlFitB

1 clarify for the record, if I mentioned lA, that I was

2 referring to Exhibit 2. That's the document marked with

3 our Bates stamp N-16346A. Exhibit 1 bears our N stamp

4 16346.

5 I thank you again, Ms. Bartlett.

6 MR. McGRATH: Just for the record, we should

7 probably consider this deposition Top Secret.

9 Signature of the Witness

10 Subscribed and sworn to before me this day of

11 , 1987.

13 Notary Public

14 My Commission Expires:

wmmm

883

UNCLASSiHED

CERTIFICATE OF REPORTER

I, MICHAL AN1« SCHAFER, the officer before whom the foregoing
deposition was taken, to hereby certify that the witness
Whose testimony appears in the foregoing deposition was duly
sworn by .e; that the testimony of said witness was taken by
me to the best of my ability and thereafter reduced to
typewriting under my direction; that said deposition is a
true record of the testimony given by said witness; that I am
neither counsel for, related to, nor employed by any of the
parties to the action in which this deposition was taken, and
further that I am not a relative or employee of any attorney
or counsel employed by the parties thereto, nor financially
or otherwise interested in the outcome of the action.

Notary Public ^
in and for the District of Columbia

My commission Expires: February 28, 1990

yNcussifito

884

IINClilSSIFIED

16346

iIjwi

!.-:rf.;.:,--!(,;E.o. 12::;

1;-P r,;.:, :.';;:;.:;l?-::ri'yCcuN~;

I « • ■ r ! :,

885

UNCUSSIFIED

N 16346-/?

THC WHITK MOUK

i.n'i'r pruvfilons of £.0. 12356
tyP.P^Ser;.NcJio,a|JscurifyCo"

urify Cot-nefJ

NOV 21 1S86

"^T NCV25 -35

yNClASSiFIFO

N , 582

RtLEASr or AKgKICAK MOSTACtS IW ItlKOT

maekaround- . IB Jun« HIS, priv«tt American and ltr««li citizens
eonD«nc«d an op«r«tion to aifcet th« r«l«at* of th« Aaericin
-ho«ta9«* in Bairut in «xehan9t for providing e«rt*ln factions in
Iran with U.S. -origin Itraali military aat«ri«l. By S«pt«afc>«r,
U.S. and Iiratlx Cov«rwD«nt officiala b«caa« involved in thia
•ndtavor xn order to •naur* that th« OSC would:

not object to tht Israeli tranaf«r of «mbar9o«d satarial to
Iran;

••11 replacement items to laraal as replenishment for like
items sold to Iraa by Israel.

On September ><, the Israeli Government, with the endorsement of
the use, transferred SOI basic TOW missiles to Iran. rorty-ei9ht
hours later, Mverend Benjamin Weir w«s released in Beirut.

Subsequent efforts by both governments to continue this process
have met with frustration due to the need to eo^onicate our
intentions through an Iranian expatriate arms dealer in Europe.
In January 1986, under the provisions of a new Covert Action
Finding, the USG demanded a aeeting with responsible Iranian
government officials.

On F ebruary' 20, a U.S. Goveranent official met with]

O^firs^direc^uTsTlraniancontac^ii^ve^five yeara ;
this meeting, the U.S. side made an effort to refocus Iranian
attention on the threat posed by the Soviet Onion and the need to
establish a longer term relationship between our two countries
based on more than arms transactions. It was emphasized that the
hostage issue was a 'hurdle* which must be crossed before this
improved relationship could prosper. During the meeting, i* also
became apparent that our conditions /demands had not been accurately
transmitted to the Iranian Government by the intermediary and it
was agreed that:

The use would establish Its good faith and bona fides by
Immediately providing 1,000 TOW missiles for sale to Iran.

This transaction was covertly completed on February 21,
using a private U.S. firm and the Israelis as intermediaries.

A subsequent meeting would be held in Iran with senior D.S
and Iranian officials during which the 0.8. hostages would
be released.

Immediately after the hostages were safely in our hands, the
O.S. would sell an additional 3,000 TOW missiles to Iran
using the same procedures employed during the September 1985
transfer.

887

yHCIiSSIHEO

In ••rly_H«reh, th* Ir*nl«n •xpAtriatc Inttncdiary dcaund^d thct
Iranian conditions for rtl««s« of th* hosta9«t nov included th*
prior •«!• of 300 PHOENIX Bistil** and an unspecified nuab«r of
HARPOON Bissilas, in addition to th* 3.00C TOWs which would b*
delivered after the hostages were released. A subsequent meeting
was held with the intermediary in Paris on March I, wherein it
was explained that the requirement for prior deliveries violated
the understandings reached in Frankfurt on February 20, and were
therefor* unacceptable. It was further noted that the Iranian
aircraft and ship launchers for these Blssiles were in such
disrepair that the missiles could not be launched -even if provided

From March 9 until March 30, there was no further effort
undertaken on our behalf to contac^thelranian Government or the
intermediary. On March 26,H|BHBga|^Hmade an unsolicited
call to the phone-dropin Maryland which we~had ••tablished for
this purpose. ^^HHH*'^*^ ^^^ ^* ^*^ "^^ b««n in contact and
urged that we proceed axp^ditiously since the situation in Beirut
was deteriorating rapidly. Be was informed by our Parsi-speaking
Interpreter that the conditions requiring additional materiel
beyond the 3,000 TOKs were unacceptabl* and that w* could in no
cas*provid* anything else prior to the release of our hostages,
^■■■lobserved that we were correct in our assessment of theii
inability to use PHOENIX and HARPOON missiles and that the most
urgent requirement that Iran had was to place their current RAKK
missile inventory in working condition. In a subsequent phone
call, we agreed to discuss this matter with him and he indicated
that he would prepare an inventory of parts required to make
their HAWX systems operational. This parts list was received on
March 26, and verified by CIA.

Current Situation . On April 3, Ari Gorbanifahr, the Iranian
intermediary, arrived in Washington, D.C. with instructions from
^^H^^^to consunnate final arrangements for the return of the
hostages. Gorbanifahr was reportedly enfranchised to negotiate
the types, quantities, and delivery procedures for materiel the
O.S. would sell to Iran through Israel. The meeting lasted
nearly all night on April 3*4, ai>d involved numerous calls to
Tehran.

A Parsi-speaking CIA officer in

attendance was able to verify the substance of his calls to
Tehran during the meeting. Subject to Presidential approval, it
was agreed to proceed as followst

By Monday, April 7, the Iranian Government will transfer
$17 million to an Israeli account in Switzerland. The
Israelis will, in turn, transfer to a private O.S.
corporation account in Switzerland the sum of $15 million.

UNCLASSIFIED

888

584

UNCLftSSiFIED

On Tutiday, April S (or •■ •oon •• th« tr«ni«ctioni tr«
v«rifi«d) , th« privitt U.S. corporation will tranafar
$3,651 million to a CIA account in Switzarland. CIA will
than tranafar this auB to a covart Dapartmant of tha Army

account in tha U.S.

On Wadneiday, April 9, tha CIA will conmanca procuring
53.651 Billion worth of HAW aiaaila parta (240 aap aratc
lina itaaa) and tranafarrinq thaaa_ part« ^°^^IH^H|
■^■■^^■■■■HIHmil^BIBBlg Thia procaaai^^^
aatinatad to ta)ia aavan working daya.

On Friday, April 18, a privata O.^^ircraft (707B) will
pick-up tha HAWK aiaaila parta atSH and fly thaa to a
covart laraali airfiald for pr«poaitionln9 (this fiald waa
uaad for tha aarliar dalivary of tha 1000 TOWg) . At thia
fiald, tha parta will b« tranafarrad to an laraali Dafanaa
Forcea' (IDP) aircraft with falaa narkinga. A SATCOM
capability will ba poaitioned at thia location.

)n Saturd ay, April 19, McFarlane, North, Taichar, Cava,
mm and a SATCOM communicator will board a CIA aircraft
in Frankfurt, Gannany, anroute to Tahran.

On Sunday, April 20, tha followino aariaa of avanta will
occur :

U.S. party arrivaa Tahran (A-hour) — mat by
Rafaanjani, aa haad of tha Iranian delagation.

At A*7 houra, tha U.S. hoatagea will be relaaaad in
Bairut.

At A4-15 houra, tha IDF aircraft with tha HAWK miaaila
parta aboard will land at Bandar Abbaa, Iran.

Diacuaalon . Tha following pointa are ralavant to thia
tranaaction, tha diacuaaiona in Iran, and tha aatabliahment of a
broadar ralationahip batwaen tha Onitad Stataa and Iran:

Tha Iraniana have baen told that our praaenca in Iran ia a
'holy comnitJBant* on tha part of tha USG that wa ara aincara
and can b« truatad. Thar* ia graat diatruat of tha O.S.
among tha varioua Iranian partiaa involved. Without our
presence on the ground in Iran, they will not believe that
we will fulfill our end of the bargain after the hoatagea
are releaaed.

IlIIHISSfflj

585

Gorb«nif«hr •p«cific«lly »«ntion«d that

Ohadhtffi'i •ffortt to 'buy* th« host*g«i could succaad in
the n««r future! Further, the Iraniant ere well ewire that
the situation in Beirut la deteriorating rapidly and that
the ability of the IKGC to effect the releaee of the
hostages will become increasingly iwre difficult over time.

Hf have convinced the Iranians of a significant near tera
«nd long range threat froa the Soviet Onion. We have real
and deceptive intelligence to denonstrate this threat durino
the visit. They have expressed considerable interest in
this Batter as part of the longer tera relationship.

The Iranians have been told that their provision of
assistance to Nicaragua is unacceptable to as and they ixivt
agreed to discuss this matter in Tehran.

We have further indicated to the Iranians that we wish to
discuss steps l e_ading to a cessation of hosti lities between
Iran and Iraq.

The Iranians are well aware that their most inanediate needs
are for technical assistance in maintaining their air force
and nav>-. We should expect that they will raise this issue
during the discussions in Tehran. Further conversation with
Gorbanifahr on April 4, indicates that they will want to
raise the matter of the original 3,000 TOWs as a significant
deterrent to a potential Soviet move against Iran. They
have al» o_su gg ested that, if agr eem ent is re ached to provide
the TOWsT

The Iranians have been told and agreed that they will
receive neithe r blame n or c r edit for th e seisur e/re lease of
the hostages.

\immm

890

006

Th«_c«sidu«l fund* fros this tr«nt«ction art allocatad *■ I
fellows t.

S2 ■illion will b« us«d to purchase r«plac*a«nt TOWt
for th« original 50« told by laraal to Iran for tha
ralaasa of Ban^aain Nair. Thia it tha only way that wc
have found to aaat our coaaitnant to raplanish thaee
stocks.

$12 Billion will b« uaad to purchase critically naadad
supplvaa for tha Niearaguan Daaocratic Kasistanca
Forcat. This aatarial is assantial to eovar shortages
in resistance inventories resulting fro» their current
offensives and Sandinista counter-attacks and to
'bridge* the period between now and when Congreasionall
approved lethal assistance (beyond the $25 Billion in
'defensive* arms) can be delivered.

The ultiaata objective in the trip to Tehran is to coasiience the
process of inproving U.S. -Iranian relations. Both sides are
aware that the Iran-Iraq War is a aa^or factor that aust be
discussed. We should not, however, view this aeeting es a
session which will result in iamediate Iranian agreeaent to .
proceed with a settleaent with Iraq. Rather, this aeeting, the
first high-level O.S. -Iranian contact in five years, should be
seen as a chance to aove in this direction. These discussions,
as well as follow-on talks, should be governed by the Teras of
Reference (TOR) (Tab A) with the recognition that this is,
hopefully, the first of aany aeetings and that the hostage issue,
once behind us, laproves the opportunities for this relationship.

Finally, we should recognise that the Iranians will undoubtedly
want to discuss additional eras and coanercial transactiona as
'quids* for accoanodatingHpBIHiJi^HHBHI^Nicaragua,
and Iraq. Our eaphasis on the Soviet ailitar>- ana subversive
threat, a useful aechanisa in bringing then to agreeaent on the
hostage issue, has also served to increase their desire for aean
to protect theaselves against/deter the Soviets.

RgCOMMEMPATIOW

That tha President approve the structure depicted above under
•Current Situation* and the Teras of Reference at Tab X.

Approve Disapprove

Attachnent

Tab A - O.S. -Iranian Teras of Reference

liMMHIHFn

891

"^iiri

587

TERMS or nzTznzvci

~ C.S.-Iran Dialogue

I- BASIC PIL LARS or C.S. rORIIGN POLICY (Option* n

Presidtnt Reagan came into office at a tiae when Iran had
had a certain impact on the American political oroeea. !
perhaps not what you intended. *^

The President represented and embodied America's recoverv

from a period of weakness. He has rebuilt American mili^
and economic strength. **=«" mint

itary

Most important, he has restored American will and
self-confidence. The U.S. is not afraid to use its power in
defense of its interests. He are not intimidated by^JIet
America or Afghanistan.

At the sane time, we are prepared to resolve political
problems on the basis of reciprocity.

we see many international trends — economic, technological
and political — working in our favor. ■^ogicai.

II. U.S. POLICY TOWARD IRAN; BASIC PRINCIPLES

A- D.S. Ass essment of Iranian Policy .

We view the Iranian revolution as a fact. The OS is
not trying to turn the clock back.

Our present attitude to Iran is not a product of
prejudice or emotion, but a clear-eyed assessment of
Iran's present policies.

Iran has used "revolutionary Islam' as a weapon to
undezvine pro-Western governments and American
interests throughout the Middle East. As long as this
is Iran's policy, we are bound to be strategic
advaraaries.

Support of terrorism and hostage-taking is part of this
strategic pattern. Me see it used not only against us,
but 'g-inat our friends. We cannot accept either.
Your influence in achieving the release of all hostages/
return of those killed (over time) is essentlllV

uiim^D

892

ONCUSSIFIED

5a8

w« f your tctlvity in m«ny parts of th« world,
Ineludinq tvcn Central Aa«ric«.

- Th« D.S. knows how lr»B vi«wa th« Soviet Union. But
■ubvaraion of W«st«rn intaraata and frianda objaetivaly
••rvas Sovxat intaraata on a global acala.

Thus, our asaaasnant ia that a daciaiva Iranian victory
xn tha war with Iraq would only unlaaah graatar
rational inatability, a furthar aroaion of tha Wastarn
poaition, and anhancad bpportunitiaa for Soviat
tronbla-making.

Tha O.S. will tharafora do what it can to pravant aueh
a davalopaant. Na ragard tha war aa dangarous in many
raapacta and would Ilka to aaa an and to it.

B. Poaaibla Intaraactioaa of O.S. -Iranian Intaraata .

Oaapita fundaaantal conflicts, wa parcaiva aavaral
possibla intarsactions of v.S. and Iranian intaraata.
I proposa wa axplora thaaa araas.

First, tha O.S. has had a traditional intaraat in
aaaing Iran prasarva ita territorial integrity and
independence. This has not changed. The O.S. opposes
Soviet designs on Iran.

we have no interest

a* Iraqi victory over

_ We are aeeking an end to this

conflict and want to uaa an inproved relationahip with
Iran to further that end.

Third, we have parallel viewa on Afghanistan. Soviet
policy there ia naked aggreaaion. a threat to all in
the region. ^^^^•^^^^^'^'^^

But our

objective ia the saae: the Sovieta auat get out and
let the Afghan people chooae their own courae.

O.S. Objective Today .

Me have no illoaions about what is pcaaible in our
bilateral relations. Perhaps thia meeting will reveal
only a limited, momentary, tactical coincidence of
intereata. Perhaps more. We are prepared either way.

In eaaence, we are prepared to have whatever kind of
relationahip with Iran that Iran ia prepared to have

Mimm

893

30>

III. SOVltT MILITXHY POSTUKX

Motcow ha< daiiqni on p*rt« o« Iran.

Afghanistan lllufltratc* th« price th« Sovivta arc ready to
pay to expand areas under their direct control.

Suanarite Soviet .capabilitie* along border and inaid*
Afghanistan which could threaten Tehran.

U.S. is aware of Soviet activity!

How they would do it.

Soviet plans

Iranian support to Sandinista regime in Nicaragua aids and
abets Soviet designs — makes O.S. -Iranian relationship more
difficult ($100 million in oil last year, plus arms).

U.S. can help Iran cope with Soviet threat.

AFGHAN I STXK

May be real value for Iran and U.S. to find ways to
cooperate against Moscow in Afghanistan.

U.S. can provide hunarfitarian assistance for refugeesfjH

k'e need to know who you work with, what you already provide,
and devise strategy to exploit Iranian comparative
advantage.

He may be prepared to resume a limited military supply
relatiooship.

However, its evolution and ultimate scope will depend on
whether our convergent or our divergent interests come to
loom larger in the overall picture.

What does Iran want?

894

STENOGRAPHIC MINUTra
UnreriMd and Unedited
Not for Quotation or
DnpUcatloD

imiiiEr

utHUbiTlUN OF JAMES H. BASTIAN

Friday, February 13, 1987

House of Representatives,
Select Committee to Investigate
Covert Arms Transactions with Iran,
Washington, B.C.

The select committee met, pursuant to call

CONFIDENTIAL

Committee Hearings
U.S. HOUSE OfflBEPRESENTATIVES

Partially Declassified/Released on /-?- /7-^7
under provisions of E.O. 12356
by N. Menan, National Security Council

'i-OOi

^^ OF ^ COPIEJ

roDV MO .51*?* ^^

895

mmam

DEPOSITION OF JAMES H. BASTIAN

Friday, February 13, 1987

House of Representatives,
Select Committee to Investigate
Covert Arms Transactions with Iran,
Washington, D.C.

The select committee met, pursuant to call, at 1 : 0'O a.m.
in Room 2226, Rayburn House Office Building.

UNCLASSIFIED

896

UNSiASSIFIED

MS. NAUGHTON: Would you raise your right hand, pleas
(Witness sworn. )
BY MS. NAUGHTON:
Q Could you please state and spell your name?
A James H. Bastian, B-a-s-t-i-a-n .

Q As an introduction, my name is Pamela J. Naughton,
N-a-u-g-h-t-o-n , I am Staff Counsel to the Select Committee
on Covert Arms Transactions with Iran, and I will be doing the
questioning today. If the people in the room would please
state their names and positions for the record?

MR. VAN CLEVE: George Van Cleve, Deputy
Republican Counsel for the select committee.

MR. BUCK: Kenneth R. Buck, on the staff of the
select committee.

MR. BERMINGHAM: Robert A. Bermingham, spelled B-e-r,
an investigator with the House select committee.

MR. BECKMAN: Robert M. Beckman , Attorney for
Southern Air Transport.

MS. NAUGHTON: It should be noted for the record that
this is confidential testimony that we are taking today.
BY MS. NAUGHTON:
Q Mr. Bastian, where do you live?
A 140 Arvida Parkway, Coral Gables, Florida.
Q How old are you?

897

UNCUSSIflED

Q How long have you lived at that address?

A Since November of 1984.

Q And your occupation?

A Aviation executive.

Q How long have you been an aviation executive?

A Well, I have been both an aviation executive and
a practicing attorney for a number of years, kind of overlappi
I would say that I got very much involved in probably half
my time as an aviation executive in 1970, say, January 1,
1974.

Q Could you tell us what your educational background
is?

A I have a Bachelor of Science degree in business
administration from the University of Missouri, and a
jurisdoctorate from George Washington University.

Q Any other education beyond the jurisdoctorate?

A No.

Q Could you tell us just generally what you did prior
to your involvement with Southern Air Transport?

A I practiced aviation law in Washington, D.C. I
graduated from George Washington University in 1956. I am
a member of the District of Columbia Bar, the Virginia Bar and
the Maryland Bar. I joined a law firm immediately upon
graduation that represented Capitol Airlines, and basically
practiced business law and aviation law.

iiNr.1 a<i<(ir;Fn

82-690 O-88-30

UmSSIFIED

Q What law firm was that?

2 A Adair, Ulmer, Murkison, M-u-r-k-i-s-o-n, Kent and

3 Ashby.
For how long were you with that firm?

5 A Until 1961.

Q And where did you go from there?

A I was then employed by Air America as counsel in

Washington, D.C
9

Q From what years?

A October 1961 until December 1963,

Q Now, at the time you were employed by Air America
as counsel, was it owned by the Central Intelligence Agency;
'^ A Yes, it was.

Q Were you an employee of the Central Intelligence

Agency;

A I was not

Q Would you explain how that worked?

A I worked for Air America, a Delaware corporation, and

they paid my salary.

Q Did the CIA own all the stock of Air America;

A Yes, it did.

Q And the assets of Air America?

A Was owned by the corporation.

Q Who was your immediate supervisor at Air America.

A Geo

TiniLWIFn

UNGl^HD

Q And what was his position?

A Director — what did they call him -- he was the
Chief Executive Officer -- it was called Managing Director of
that company.

Q And was he a CIA employee?

A I believe he was.

Q What was your function as counsel to Air America at
the time?

A Primarily my job was to take care of their business
interests in aviation interests before the Civil Aeronautics
Board and the FAA and contracting work. It was more commercial
than anything to do with the CIA.

The company probably 90 percent of its business --
I really don't know — was just plain commercial business.
That was primarily my function. I stayed on the commercial side)

Q Did you handle anything of the remaining 10 percent
that was done for the CIA?

A I didn't get involved in that much, no. They had
a need-to-know type approach, and I wasn't involved in that
primarily. I knew, of course, that they were owned by the
CIA, and I knew most of the people involved with things
proprietary.

Q Why did you leave the law firm to go to work for
Air America?

time had financial problems.

litJMKini

900

mmsm

They were purchased by United Airlines, and the law firm that

2 I was with was based in Jacksonville, and I had never really

3 worked with them in their Jacksonville office, so we only had
a small -- it was about a five-member office here m Washingtor

5 serving the Capitol account, plus a few other aviation account!

6 Macke Airlines and a few others, and I didn't see a good

7 career opportunity anymore.

8 I had my options of either going with United 's law

9 firm in Chicago or going to Jacksonville, or looking for work
in Washington, and I chose to stay in Washington. And

this was a job I saw advertised in the paper.

2 Q It was advertised?

3 A Yes.
Q And you interviewed for the position?
A Yes.
Q Now, you are familiar, through your counsel, of

course, and other interviews, what our investigation is lookin<

into, and the personalities and people involved.
'^ Could you tell us, was there anybody either employed

by Air America or connected to Air America as either a customei
or in a managerial capacity that is related to the investigate
that we are currently undertaking?

A No.

Q Now, you left Air America in December of 1963; is
that correct?

ilCUSSiEIED

901

\m«8»itB

A Yes.

Q Why did you leave?

A Because when I joined Air America, I didn't know
that It was a CIA proprietary. I was told after the fact,
and began immediately looking for other careers. I didn't see
It as a long-term career opportunity, because I didn't feel
that it was an airline that would be around forever.

Q What gave you that impression?

A Well, It was owned by the government, and the
government was not generally engaged in aviation, long-term
wise. They might be there for a specific purpose, but not --
it was not going to be there forever.

Q What was the specific purpose you felt it was for?

A It was proprietary to give them cover, I guess, to do
work in the Far East, in Southeast Asia, given a commercial
presence there so they could carry on activities that they
felt were necessary for their country. !

Q At that time, what relationship, if any, did Air
America have to Southern Air?

A Southern Air was also owned by the CIA at the time,
and I also worked with Southern.

Q What did you do in that capacity?

A I did primarily all of their legal work, but not by
name, because at that time, the management group that was
managing Air America could not be shown to be managing Southern

902

WUSSIFJED

Air Transport. They were two separate companies, and they

2 shouldn't be together at the top. So, in fact, George Doole

3 was managing, was in fact the chief executive officer of
Southern, but he wasn't shown as that in the corporate records

Q Who was?
^ A Stanley Williams
' Q Who is Stanley Williams.

A Stanley Williams was a gentleman who was with
Southern Air Transport in management. I think he was a
secretary at the time it was purchased by the CIA, and
it was a company that was based in Miami and they kept that
management in place, and it ran pretty much as it did before
they acquired it m the Miami, Caribbean, South America, and hi
was the President.

Q Could you explain for us why Southern Air was
purchased and why not all of the CIA operations were done by
Air America?

A Well, at the time, which was 1961, they had a series
of accidents in the Military Airlift Command, I guess it was
called Military Air Transport then, that were unfortunate,
and the Military Airlift Transport, airlift transport, was
purchasing their airlift from various airlines on a
competitive bidding basis.

A lot of people were goina broke, they were bidding
too low, and so, I think DOT put out some kind of order saying

|}IUUJiS5:iF?Pn

903

UNaUA^II'JED

that they would not do business with anybody except those with

a certificate issued by the Civil Aeronautics Board or some

operating authority issued by the CAB.

Air America did not have that certificate. Southern

Air Transport did, plus a lot of other what we called then larg^

irregular carriers, so they purchased it to carry on an

activity in the Far East which in fact, Air America had been

doing before.

It was an operation of DC-6 airplanes that flew up j

I
and down the China coast with a Mi^litary Airlift Command j

contract from Tachikawa, Japan; Okinawa; and down to Bangkok.

It was routine cargo, the Stars and Stripes paid for kind of

a communication network, and the CIA felt they needed that to dc

covert missions from time to time, to give themselves a

commercial presence in the Far East that would permit them to

do covert missions from time to time.

So, not having qualified under the new rules, they

acquired a carrier that would qualify, and the business that

Air America was then doing.

Q In addition to George Doole, were there any other
employees of Air America of whom you were aware that were also
employees of the CIA?

A Not in the Washington office. I think there were
a number in the Far East. The Washington office was relatively
small. The operation of Air America and its subsidiary. Air

UNOUfifilfJFn

904

Asia, was based in the Far East, and there they had numerous
employees I think at the time, one time up to 8,000 probably -
Q How many?

* A 4 to 8,000, something like that. I think the

maintenance base of Air Asia Company, Limited, had about 4,000
and Air America about 4, I think it was about 8 at one time.
It was a very large operation and primarily a commercial
operation .

Q George Doole, do you know whether or not he is still
living?

A He is not.

Q When did he die?

A A couple of years ago.

Q What was his profession at that time? Was he
retired?

A Retired. He was just a consultant.

Q Now, I have got you up to 1963, when you left Air
America, where did you go?

A I just went out and started practicing law on my owr
singly, by myself.

Q In Washington, D.C.?

A Yes.

Q What was your client base at the time?

A I didn't have much of one. Air America then started
using me, they hired an attorney to replace what I was doing,

HNMiififiiriiirn

905

UKtllii^SIFSED

but they also continued to use my services. And Southern Air
continued to use my services.

I did work for them kind of without attribution.

Q Did you have any other client base?

A Yes, I had a number of local clients. I can't rememb
them all.

Q Were they airline companies?

A Some of them. Southeast Airlines was an airline
company. What was the one -- Sound Air in Canada. I can't
remember them all, it has been so many years. They were small,
most of them were small carriers, and other small businesses
locally.

Q And for how long did you continue this solo practice?

A Until about 1966, middle of 1966, and then I
joined Daggett Howard or Tilford Jones and Harvey Poe and refori
a firm.

Q That is a law firm?

A Yes. It was a law firm. Howard, Poe and Bastian.

Q You mentioned Daggett.

A Howard -- that was his first name, Daggett.

Q I see. Was that in Washington, D.C.?

A Yes, it was.

Q Did you have the same type of clientele?

A Yes.

Q How long did that partnership last^

906

UHClftSSIFiED

' A Until about two years ago.

2 Q Where you an active partner in that law firm?

3 A Yes, I was.

* Q You were active until you moved to Florida?
5 A I was active until 1979, I would say, 1979. Becoming
^ less and less active over the years, but I was an active
^ practitioner of law until 1979, at which time I turned all
^ my clients over to my partners and stayed a partner of the fii
but didn't practice any more.

Q Did Air America and Southern Air continue to be
clients of your law firm from 1966?
A Yes, they did.

Q And did you continued to do work for Southern Air
under the name of Stanley Williams or under his umbrella?

A Stanley Williams was President of the airline,
probably in 1966, and I began representing Southern openly.
I didn't do it primarily when I was --
Q Their corporate counsel?

A When I was their corporate counsel, because I was
corporate counsel for Air America.

Q Okay. When did you assume a position with Southern

Air?

A 1974.

Q What was that?

A Vice President.

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907

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UMftSSlFIED

Q How did you come about?

A Well, that was after Stanley WilUams acquired the
company from the CIA, and he just wanted me to be an officer
in the company. I guess I was also secretary.

Where did Williams get the money to buy Southern
Air from the CIA?

A He borrowed it from the First National Bank of
Chicago, and mortgaged all his personal assets.
Q Why did he buy it?

A I guess I would have to ask Mr. Williams.
Q Why do you think he bought it?

A Because it was an opportunity, it was his life's
work, and the CIA was going to sell it, either that or
discontinue it, dissolve it, and there were a lot of people
that worked for the company that he had been associated with
all his life and this was his life.

Q When he — when the CIA owned Southern Air, did
Williams have any operational role in the company, or was he
simply a figurehead?

A No. He ran the Miami operation pretty much on his
own. He had to report to the Board of Directors and had to
get typical approval from the stockholders to do an airplane
purchase or something like that, but he was given quite a
free hand to run it like it had been run before.

Q At the time that he purchased it in 1973 or 1974

iiiiAi iiooir^m

908

UfietftSSmED

there was — was there a suit or some sort of action filed by

2 the employees of Southern Air?

3 A Yes, shortly thereafter, about two months.

4 Q Could you explain that to us, please?

5 A I don't know really how to explain it, other than

6 they got a hold of a lawyer in Florida and brought an action
^ -- I am not quite sure why -- to set aside the purchase on

the basis that -- I really don't know. I guess because they
9 thought they were entitled to it.
° Q Was it their claim that they were Federal employees?

A I don't think in that lawsuit it was. I think some .
them brought such a suit later on.

Q Were you involved in that litigation in any way?

A I was there and I was counsel to the company and
attorney to fight it, yes, I didn't do it myself, because I
didn't feel qualified in that area, and I am also not a membe»
of the Florida Bar.

Q Who was the name of the attorney you hired?

A I don't remember — yes, I do, Don Nicholson.

Q Where is he located?

A He was in Florida. He has passed on.

Q What was his law firm?

A Nicholson something.

Q Was it a sole practice?

A No. Nicholson-Brawner, I think it might have been.

liiini iLQiurm

909

UMCIi^SSIF^ED

Q Are they still in business?

A Possibly. We don't use them.

Q What city?

A Miami.

Q What law firm represented the employees?

A I don't remember that.

Q Who would have that information?

A Maybe you could get it out of the court.

Q Would anybody else connected with Southern Air
or Air America or anyone else you know have that information!

A I don't know. I might have a'&B*^on it, but I

doubt it. It is possible I have a file on that.

Q Would that be at your Southern Air office?

A Yes.

Q Would you check that, please, for us?

A Yes.

Q Thank you.

Was that suit filed in Federal or State court, do
you remember?

A State court, I believe, but I am not sure of that
either. Federal Court, on second thought. I think it was
Federal Court.

Q Were you a named defendant?

A , No.

Q Who was named defendant?

lillfili&£&LFI<En

910

UNCtftSSKIED

A Southern Air Transport, maybe Mr. Williams, I am no

2 sure.

3 Q From the period you became Vice President of the
company in 1974, what did you do for Southern Air?

5 A I did most of their contracting, their CAB work.,
legal work, just anything they needed to be done legally.
Also business, I did a lot on the business side for them.

Q Now, were you paid a salary beginning in 1974?

A No, I wasn't. I think I went on the payroll in
1978. I was just paid by the hour.

Q Why was the difference in 1978?

A I don't know. It just seemed easier, I think.

Q You didn't assume any other duty or office?

A No, not really.

Q In this period from 1974 to 1978, aside from Mr.
Williams, who was on the Board of Directors?

A I was, and Bud Eason — Vernon Eason, E-a-s-o-n,
and Mr. Williams.

Q Had Mr. Eason been affiliated with Air America?

A No. He had sold insurance to them. He was an
insurance broker in Miami with Alexander and Alexander.

Q And why was he chosen for the Board?

A He was an old friend of Mr. Williams and Mr. Willia
had a lot of respect for his business judgment.

Q Was aQVQJie added to the Board prior to your purchas

anvape aaaea to tne uoara

911

UNetllSSI^ED

of Southern Air?

A No.

Q Now, besides Mr. Williams, who I take it acted as
CEO during this period --

A Yes, he did.

MS. NAUGHTON: Let the record reflect a relief
court reporter came in the room.
BY MS. NAUGHTON:

Q Aside from Mr. Williams, who I gather operated as
CEO during this period, who else were the managers?

A Howard Hinton was Director of Maintenance, William
Dunn was Director of Operations. William Gilmore was Treasure)
And that was primarily the management group.

Q What about sales?

A Sales -- they didn't have too much in the way of
sales, and I guess Dave Williams was — I don't even know what
his title was — Director of Sales.

Q What about Mr. Crummey, when did he begin with
them?

A He came after Mr. Williams had retired, and he
joined the company in -- I guess it was in the fall of 1973.
Mr. Gilmore retired then. I mean 1983 — I am sorry. I
said 1973 — 1983.

Q Was he chief financial officer beginning in 1983?

A Yes, he was. He was Senior Vice President, Finance.

t2u?.i,assiE3c:n

912

ynetftSSiiT^to

When did he retire?

A He resigned, I think about a year -- let's see,
1973 -- I mean 1983 — 1984, 1985, I think, in the fall of
1985.

Q Do you know why he resigned?

A He just wanted a different lifestyle. He moved to
the West Coast of Florida and bought a house there, and just
wanted to do private investments or something he said. He
did a little CPA work in the small community of Tarpon Sprinc
he located in.

Q Could you spell that?

A T-a-r-p-o-n Springs. He is not actually there, he
is nearby there. It is on the west coast of Florida.

Q What community is he actually in?

A I don't know.

Q >Jould you have his current address in your records

A Yes, I would.

Q Why?

A I just assume the company has his current records
in their files. He is a friend. I don't have it personally

MQLASiLFaED

913

Ulilii^tA^iflED

Q Now, when did you actually purchase Southern Air?

A I acquired 20 percent interest in the company
in 1974. I acquired another 20 percent of the company in
1975 and then through a stock redemption, the redemotion
of Mr. Williams' stock, I became 100 oercent stock owner in
1979.

Q And where did you obtain the capital to purchase?

A Savings and real estate investments in Washington,
D.C. over the years.

Q You didn't need to take out any loans then to —

A I took out loans on my real estate. I sold some
of it. I think Mr. Williams financed part of it which I paid
him out over the years. But basically I paid it out by
selling real estate.

Q Now, at the time you purchased Southern Air, do
you recall how many aircraft it owned or leased?

A When I purchased it in '79, when I took control
in "79?

Q Yes.

A We had three airplanes owned.

Q What were they?

A They were Hercules L-lOO aircraft.

All three?

A Lockheed Hercules L-100.

Q Is there a_ militrfiiy-SaiUvalent?

Ohcla^M;EO

914

^j«ISt!R(SSffa

1 A Not really the equivalent, but it's a — C-130 is

2 the military version of that airplane. The military version

3 is a little shorter. These have been stretched, but
basically they have otherwise the same systems.

5 Q Did you lease any aircraft?

6 A Not at that time. We had in the oast. We had

7 leased and bought airplanes, but we are talking after '79
or at '79. That is the question, wasn't it?

Q Yes.

I had one question for you if we could back up. In
the record you gave me regarding Mr. Houston's, I guess
2 testimony, was it, he mentioned that a former CIA Director
'3 had lobbied to have Southern Air merged with some other
* company that was unnamed when the CIA divested in 1973. Were
5

you aware of that or do you know what that reference is?

A I think that is a misreference. I don't know.
I have read that article numerous times and, of course, I
was very familiar with what was going on and I don't recall
that.

MR. BECKMAN: What page was it?

MR. VAN CLEVE: May I ask whether there is an
additional copy of the document? I don't recall that we had
one produced to us. I have not previously seen the document.

MS. NAUGHTON: I just received it from Mr.
Beclanan's law firm.

915

(^en^^FBED

MR. VAN CLEVE: When, may I ask?

MS. NAUGHTON: Two days ago?

MR. BECKMAN: Whatever the date of the letter is.

MS. NAUGHTON: It's dated February 10, 1987, just
confirming our deposition.

THE WITNESS: It must be in the archives. It's
a document of the Congress.

MR. BECKMAN: I just wanted you to look at it when
she shows you the page.

MR. VAN CLEVE: I'll be happy to give it right
back to you after I take a look at it.

MS. NAUGHTON: I can't find it. I should have
written a page reference, but I can't find it at the moment.
Perhaps Mr. Bermingham, when he comes down to Miami, we can
discuss it and refresh your recollection and whether you
know anything about it. He can speak to you further about
it.

THE WITNESS: Ask the question again.

BY MS. NAUGHTON:
Q There was a reference to a former CIA Director
at the time. This would have been in the early 1970s when,
apparently, there was some problem with the competitors of
SAT feeling that a sale back to Williams would have damaged
their competitive stance in the markets in which SAT was
serving, and at the time apparently there is reference to a

umbi^EJED

916

UNGl'ASSfnEO

1 former CIA Director managing several meetings and putting

2 together several meetings with CIA officials regarding the

3 merging of Southern Air with another existing company,
* only it doesn't make reference to which existing company?
5 A I don't think — I think that maybe there is a
^ mixup on that between the Southern sale and the Air America
' close down maybe because there was some activity on the Air

America close down, I think, and attempts to buy that

' company. E- Systems was one of the people that was interested

'" and ultimately did, in fact, buy Air Asia Company Limited, the
11

maintenance base in Thailand, and there was an ex-CIA Director,
I forget his name now, who was out in the community then as a
consultant that might have been instrumental in bringing the
parties together. But this is all hearsay. Other than what
I read in the papers, I don't have any personal knowledge
of this.

Q That is E-Systems?

A Yes. But I don't think they were after Southern
Air. There was a lot of press at the time and a lot of
activity by Southern Air's competitors to persuade the CIA
to dissolve the company rather than to sell it because that
would give a potential competitor -- obviously they would
have that interest, not that it would serve, not that they
would be damaged unfairly by its continuation, but just they
would like to get rid of it and there was a lot of attemots

UNCLA^LTn

917

l3«CtftSSff?ED

1 on the Hill at that time, lots of pressure.

2 Q Now, when you purchased Southern Air through the

3 stock redemption in 1979, did you install a new board of

4 directors?

5 A No, I didn't.

6 Q So the board of directors remains the same as when

7 it was under Mr. Williams?
A Yes. I added Mr. Hugh Grundy to the board of

9 directors. He had been working for Southern Air Transport

and he retired.

1 Q Could you spell that, please.

2 A Grundy, G-R-U-N-D-Y. Hugh, H-U-G-H.

3 Q Okay. What was his position in the company?
* A He was senior vice president.

5 Q In charge of what?

6 A Just in general. He had been added after the
' management group I talked about earlier when Stan Williams

took the company over. I think he came with the company
in about '76 or something like that.

Q And why did you add him to the board?

A He is an old-time friend. He had been president
of Air America for a nxunber of years and he was a very
qualified man, and he was available, and I just thought he
would be a good addition. I had known him for years.

Q Now, in 1979 when you took over full ownership.

UNCUS&ff'Fn

918

UReil^tFIED

who was your CEO?
^ A I was .
3 Q And whom did you place in the hierarchy then?

A I left the company pretty much like it was at
the time I took it oven namely, the same gentlemen that I have
mentioned earlier as being director of maintenance, director
of operations, treasurer, and Hugh Grundy was senior vice
president, stayed the same. My plan was to change management
if I didn't think they were performing, but that took some
time and searching.

Q And when did this change take place?

A It didn't really — I didn't get the program
underway until 1983. We almost immediately upon my
acquiring control, we entered into a recession and things
got very difficult for the next three years, so it was kind
of a survival program then, not building management.

Q During that period from '79 to '83 what was the
status of the government contracts? Did they fall off as
well?

A We didn't have any government contracts.

Q When did you begin to have government contracts?

A We got our first government contract in '83.

Q What was that for?

A We got a piece of the log air business that the

Military Lift Command puts out each year.

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UNCLASStFIED

Q Could you explain that to me?

A Well, for years and years and years ever since
I have been associated with the business, the Military Airlift
command, previously known as Military MATS, or Military
Air Transport System, have a certain amount of commercial
buy they make with all the airlines, maybe three or four
hundred million dollars worth, and they allocate that among
the qualified bidders based on the number of airplanes they
have in the civil reserve air fleet and they have a very
compliacted formula for that. It's been going on ever since
I can remember. It was part of the work that Southern Air
did way back when the agency, the CIA, first bought them.
That was the part of that group l was talking about down the
China coast. it was called the inter-island route and they
qualified in the same way that we do today.

When Southern Air was purchased by Mr. Williams back
in 1973, because of all the political furor that had
developed and because of the terrible pressure that the CIA
was under, the only way that he could accomplish that purchase
and go ahead and close on it, because we were having so many
problems with the competitors, was to give up all of his
CAB authority. The company relinquished it, turned in its
certificates and operated then as what we call a large
contract carrier, large commercial carrier, and we did business
off shore and just wherever we could find long-term contracts.

920

0N^e4.<J>fif'Fn

We couldn't hold ourselves out as a conunon carrier anymore.
So we didn't do any government business. We turned it —
actually the agency had already discontinued all government
contracts about a year before they sold it to Stan Williams.
They are not flying that route anymore. I think World
Airways was, the China coast route that I am talking about.

So all through the '70s we basically weren't qualified
to get government contracts because we didn't have enough
airplanes. They had certain rules and award criteria among
w