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

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



Senate Report 

No. 216 




IRAN-CONTRA INVESTIGATION 

APPENDIX A, VOLUME 2 
SOURCE DOCUMENTS 



United States Congressional Serial Set 

Serial Number 13741 



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 A: Volume 2 
Source Documents 



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 



BnitEd States Senate 

SELECT COMMITTEE ON SECRET MILITARY 

ASSISTANCE TO IRAN AND THE NICARAGUAN OPPOSITION 

WASHINGTON, DC 20510-6480 



March 1, 1988 

Honorable 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 A to the final Report of the 
Senate Select Committee 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. 



Sincerely, 




Warren B. Rudman 
Vice Chairman 



U.S. HOUSE OF REPRESENTATIVES 

SELECT COMMITTEE TO INVESTIGATE 

COVERT ARMS TRANSACTIONS WITH IRAN 

UNITED STATES CAPITOL 

WASHINGTON. DC 20515 

(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 A to the Report of the 
Congressional Committees Investigating the Iran-Contra Affair , 
House Report No. 100-433, 100th Congress, 1st Session. 

Appendix A consists of the Source Documents cited or 
referred to in the footnotes and other references of the 
Report . All contents of Appendix A have been declassified for 
release to the public. 




Lee H. Hamilton 
Chairman 



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 



United States Senate 



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



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 



Associate Counsels 



C. H. Albright, Jr. 
Daniel Finn 
C. H. Holmes 
James E. Kaplan 
Charles M. Ken- 
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. Ray nor 
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 



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 



Special Deputy 

Chief Counsel 
Staff Counsels 



Press Liasion 
Chief Clerk 
Assistant Clerk 
Research Director 
Research Assistants 



John W. Nields, Jr. 
Chief Counsel 

W. Neil Eggleston 
Deputy Chief Counsel 

Kevin C. Miller 
Staff Director 



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 
Khstine 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. TuUy 

Margaret A. 
Dillenburg 



Committee Staff 



Investigators 



Director of Security 



Robert A. 

Bermingham 
James J. Black 
Thomas N. 

Ciehanski 
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 
G. R. 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 

Courier 
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 



Note to Reader: 

This volume contains certain source documents cited in the footnotes to the 
Report. These documents are grouped by chapter and labeled according to their 
chapter and footnote numbers. 

Source documents that are available in the Hearings and Deposition volumes, 
from public sources, still classified, or otherwise unavailable are not included. 

The Preface explaining the various types of documents in this volume begins 
on p. xiii. 



Preface 



This volume contains much of the documentary evidence— letters, memoran- 
dums, transcripts of telephone calls, and other materials— that underlies many 
of the factual statements made in the Report of the Congressional Committees 
Investigating the Iran-Contra Affair. The Report is a joint publication of 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. The complete database for all factual statements made 
in the Report and referenced in its footnotes consists of the following: 

• Source documents, contained in this volume. 

• Published sources, referenced in the footnotes of the Report but not reprinted 
by the two Select Committees. 

• Hearings before the two Select Committees, which are published separately 
in 1 1 volumes as the Iran-Contra Investigation: Joint Hearings of 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, 100th Cong. 1st Sess. (1987). 

• Depositions taken by the two Select Committees, which are published as Report 
of the Congressional Committees Investigating the Iran-Contra Affair, Ap- 
pendix B: Depositions, H. Rept. No. 100-433, S. Rept. No. 100-216, 100th 
Cong., 1st Sess. (1987). 

• Exhibits prepared by the Select Committees or by witnesses or other persons 
and submitted for the record. All exhibits mentioned in the Hearings and most 
of those referenced in the Depositions are contained in those respective 
volumes. 

Explanations follow of: source materials found in this volume; testimony; deposi- 
tions; exhibits; interviews; published sources; and abbreviations, acronyms, and 
initials 

Major Source Materials 



The Select Committees relied heavily on sworn testimony and documentary 

evidence in compiling their final Report. Brief descriptions of the major sources 

appear here, and more detailed descriptions of some of the sources follow later 

in this Preface. 

Testimony: Sworn testimony (testimony taken under oath) consisted of two kinds. 

Testimony taken in the joint hearings is referred to as "Test." in the footnotes, 

and testimony taken as depositions is referred to as "Dep." in the footnotes. Fuller 

explanations of these kinds of testimony appear below. 

Documents: In most cases, miscellaneous documents referred to in the footnotes 

are published in this volume. Usually a Bates identification number appears in 

the footnote, e.g., N 2816. The idenfification number will assist researchers 



who wish to find the complete original document in the Select Committees papers 
stored with the National Archives and Records Administration. Access to Select 
Committees papers is subject to the respective rules of the House and Senate. 

Interviews: Select Committees' staff interviewed a number of people on an 
unsworn basis. Most interviews were summarized in memorandums. The 
memorandums of the interviews referred to in the footnotes of the Report are 
stored with the National Archives. 

PROF Note: These Notes were computerized interoffice messages carried over 
the White House's Professional Office Services system. National Security Council 
staff were provided with equipment to send and receive PROF Notes in their 
offices and in some cases in their homes. In many instances, messages sent over 
the PROF system were archived in White House computers and were retrieved 
by White House personnel and provided to the Select Committees. Footnote 
references to PROF Notes include the date and time (in military time) and the 
Bates document identification number. Most PROF Notes referred to in the foot- 
notes are published in this volume. 

KL-43 Messages: These messages were sent over telephone lines through 
use of a computerized instrument that encrypted the message at the sender's end 
and decoded it at the receiver's end. The system was portable and could be car- 
ried to remote locations. Most KL-43 messages referenced in the footnotes are 
published in this volume. 

Israeli Historical Chronology: The Iranian Transactions— A Historical 
Chronology. The Committees entered into an agreement with the State of Israel 
whereby Israel agreed to prepare and provide a historical chronology detailing 
the role of Israel and individual Israelis in the Iran initiative from 1985 through 
1986. Israel was unwilling to waive its privileges of State secrecy and sovereign 
immunity and permit its officials and citizens to be questioned by the Commit- 
tees. In lieu of interviews or testimony, and without waiver, Israel agreed to 
conduct interviews of Israeli nationals and reviewed certain documents. With 
the specific agreement of the Government of Israel, information from the Israeli 
chronologies is used in this Report. By agreement between the Committees and 
the Government of Israel, the chronology remains classified. 

Part I covers Israeli shipments of arms to Iran from August 1985 through 
November 1985. Part II covers U.S. arms shipments and Israeli participation 
in the arms transaction from December 1985 to the time of disclosure in 
November 1986. The Select Committees received Part 11 in July 1987, after 
public hearings were under way. 

Israeli Financial Chronology: A Financial Chronology of the Iranian Trans- 
actions (April 26, 1987). At the request of the Select Committees, the Israeli 
Government also agreed to prepare from unsworn interviews of Israeli citizens 
a financial chronology. The document covers the money trail leading from the 
initial Israeli arms shipment to Iran in August 1985. By agreement, the docu- 
ment remains classified. 



Other Source Documents 

Tower Report: On December 1, 1986, President Reagan established the Presi- 
dent's Special Review Board to examine the role of the National Security Coun- 



cil staff in national security operations, including arms transfers to Iran. The 
Board consisted of John Tower, Chairman, Edmund Muskie, and Brent 
Scowcroft. The Board and staff interviewed numerous individuals in and out 
of the Federal Government, but did not have authority to issue subpoenas or 
compel testimony. The Board issued its report— an examination of NSC opera- 
tions, a narrative of the Iran-Contra Affair, and recommendations— 3 months 
later. The full title is Report of the President's Special Review Board, John Tower, 
Chairman (Washington: Government Printing Office, February 26, 1987). 

Tower Interviews (sometimes referred to as Tower Testimony): The Tower 
Board conducted unsworn interviews with 53 individuals. These people includ- 
ed former Assistants to the President for National Security, National Security 
Council Members, former Presidents, and Central Intelligence Agency em- 
ployees. Interviews cited in the Report but not appearing in the Source Documents 
volume are filed with the Committees' papers at the National Archives. 



Hearings 



The Select Committees held 44 days of joint hearings and questioned 28 witnesses 
publicly. Public hearings began May 5, 1987, and ended August 3, 1987. Four 
witnesses - Central Intelligence Agency employees— testified in executive ses- 
sion. House Reporters transcribed all proceedings and the Senate Recording 
Studio videotaped them. Two television networks, Cable News Network and 
C-SPAN, televised all the public hearings. Individual public television sta- 
tions, ABC, CBS, and NBC broadcast portions of the hearings. 

Every witness testified under oath either in response to a subpoena or an in- 
vitation or voluntarily. Legal counsel accompanied most witnesses. The enabl- 
ing legislation empowered the Select Committees to compel testimony over fifth 
amendment objections by granting use immunity. Once the Select Committees 
obtained a court order, they could immunize witnesses against the use of their 
testimony in criminal prosecutions. Thus, any statements or admissions made 
by witnesses granted use immunity could not be used in a subsequent criminal 
proceeding, except a prosecution for perjury, giving a false statement, or other- 
wise failing to comply with the court order. The Select Committees granted 
use immunity to about 20 witnesses. 

Committees Members, in consultation with Chief Counsels and staff, iden- 
tified and selected witnesses and then developed specific lines of inquiry. At 
the hearings, questioning was led by attorneys from either the House Select Com- 
mittee or the Senate Select Committee, depending on a prearranged division 
of witnesses. Both House and Senate Members pursued followup questions. 

Original, hand-corrected transcripts, from which the published Hearings 
volumes were produced, have been filed by the Committees in the National Ar- 
chives. 



Depositions 



The Select Committees, 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 
also 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 record- 
ed and later transcribed and 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 obvi- 
ous typographical errors by hand and deleted personal and proprietary infor- 
mation not considered germane to the investigation. 

In the Depositions volumes, some of the deposition transcripts are followed 
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 
exhibits are stored with the rest of the Select Committees' documents at the Na- 
tional Archives, and are available for public inspection subject to the respective 
rules of the House and Senate. 

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



Exhibits 

Exhibits— personal papers, office memorandums, correspondence, corporate 
records, and miscellaneous documents— were an important source of informa- 
tion for the Select Committees. The Select Committees obtained some exhibits 
voluntarily, others through Committee-issued subpoenas. Primary sources for 
these exhibits were the White House, Department of State, Department of 
Defense, Central Intelligence Agency, Department of Justice, other Federal 
Government offices, and private parties. 

During hearings, 1,092 exhibits were introduced, most often by the Select 
Committees. Occasionally, witnesses or deponents produced exhibits. 

Exhibits presented during hearings are reproduced at the back of the Hear- 
ings volumes. Selected exhibits appear in the Depositions volumes at the con- 
clusion of the relevant witness' statement. Some exhibits— extensive corporate 
records, for example— are not published in their entirety, but are stored in the 
Select Committees' records in the National Archives. 

Like the testimony and depositions they accompanied, exhibits had to be 
reviewed by the White House Declassification Committee. Some exhibits re- 
main classified and will not be published. 



Interviews 

Interviews were used to gather information, identify potential deponents and 
hearings witnesses, and explore new areas of investigation. Committee in- 
vestigators, working individually or in teams, conducted most of the interviews. 
Interviewees were not subpoenaed and many volunteered information. In- 
vestigators interviewed, rather than deposed, individuals who had limited in- 
formation or who were living in remote parts of the world. For instance, 
investigators conducted numerous telephone interviews with persons in Central 
America. In most cases, interviewees were not accompanied by counsel. 

Investigators took notes of or recorded interviews and later summarized them 
into report memorandums. Report memorandums are not published in this 
volume; they have been deposited in the National Archives. 



Published Sources 



The Select Committees drew on both unpublished and published sources in 
preparing their final Report. Published sources (magazines, newspapers, books. 
Federal Government publications, and law journals) are not included in the 
Source Documents volume because they are available at libraries. They are listed 
here to indicate to readers and researchers the scope of the Select Committees' 
source materials. These sources are cited in the Report footnotes according to 
A Uniform System of Citation (Harvard Law Review Association, 14th Edition). 



Magazines 

Congressional Quarterly Almanac 1984 

Journal of Intelligence and Counterintelligence 

Newsweek 

The New Republic 

The Public Interest 

The Washingtonian 

U.S. News and World Report 

Newspapers 

Associated Press 
Baltimore Sun 
Boston Globe 
Chicago Tribune 
Dallas Morning News 
Guardian (Manchester) 
Los Angeles Times 
Miami Herald 
San Diego Union 
The New York Times 
The Washington Post 
Wall Street Journal 
Washington Times 

Books 

Borchard, The Diplomatic Protection of Citizens Abroad (1915) 

Cline, R.S., The CIA Under Reagan, Bush and Casey (1981) 

Colby, W.E., Honorable Men: My Life in the CIA (1978) 

Corwin, E., The Constitution and What it Means Today (13th ed., 1975) 

Corwin, E., The President: Office and Powers 1 787-1957 (No date) 

Crosskev, W., Politics and the Constitution (1953) 

Farrand, M., The Records of the Federal Convention of 1787 (1937) 

Federalist, The 

Hamilton, Alexander, Papers 

Jefferson, Thomas, Writings 

Kent, S., Strategic Intelligence for American World Policy (1966) 

Kirkpatrick, L. B., The United States Intelligence Community: Foreign Policy 

and Domestic Activities (1973) 

Leary, W.M., ed.. The Central Intelligence Agency: History and Documents 

131-33 (1984) 

Maass, A., Congress arul the Common Good (1983) 

Madison, James, Writings 

Meyer, C, Facing Reality: From World Federalism to the CIA (1980) 

Moses, H., The Clandestine Service of the Central Intelligence Agency 3-4 

(1983) 

Pogue, F. C, George Marshall (1973) 

Powers, T. , The Man Who Kept the Secrets: Richard Helms and the CIA (1979) 



Ranelagh, J., The Agency: The Rise and Decline of the CIA (1986) 

Sick, G., All Fall Down: America's Tragic Encounter with Iran (1986) 

Sofaer, A., War, Foreign Affairs and the Constitution 

Thach, Jr., C.C., The Creation of the Presidency (1923) 

Treverton, C. F., Covert Action: The Limits of Intervention in the Post-War 

World (1987) 

White, L., Ihe Federalists: A Study in Administrative History, 1789-1801 

(1948) 

Wise, D., The American Police State (1976) 

Woodward, B., Veil: The Secret Wars of the CIA: 7987-7987(1987) 

Wright, Q., The Control of American Foreign Relations (1922) 

Government Publications 

Annals of Congress 

Audit Report, Office of Inspector General, Department of State 
Congressional Record 
Congressional Research Service Report 
Constitution of the United States 

Hearings Before the Subcommittee on Europe and the Middle East, House Com- 
mittee on Foreign Affairs 

Hearings of the House Permanent Select Committee on Intelligence 
Hearings of the Senate Select Committee on Intelligence 
House Permanent Select Committee on Intelligence, Subcommittee on Legislation 
House Report 122, 98th Congress, 1st Session 
Intelligence Authorization Act, Fiscal Year 1984 
Public Law 97-377, Defense Appropriations Act for Fiscal Year 1983 
Public Papers of the President of the United States, Jimmy Carter 
Public Papers of the President of the United States, Ronald Reagan 
Report of the National Bipartisan Commission on Central America, Henry Kiss- 
inger, Chairman 

Select Committee on Intelligence, Senate Report No. 665, 98th Congress, 2nd 
Session 

Senate Select Committee to Study Governmental Operations, Final Report 
State Department Bulletin 

U.S. Departments of State and Defense, The Challenge To Democracy in Cen- 
tral America 

U.S. Government Accounting Office, Report of the Chairmen, Senate and House 
Select Committees Investigating Iran Arms Sales, "Iran Arms Sales: Depart- 
ment of Defense Transfer of Arms to the CIA" 
Weekly Presidential Documents 

Law Journals 

American Journal of Jurisprudence 

Publius 

Texas Law Review 

Vanderbilt Journal of International Law 

West Virginia Law Review 



Abbreviations, Acronyms, and Initials 



Sources and footnotes in the Report of the Congressional Committees In- 
vestigating the Iran-Contra Affair often appear with the initials of individuals 
and acronyms and abbreviations of agencies, organizations, and other groups. 
The following list provides the full names for these shortened forms. 

AECA: Arms Export Control Act 

AET: A.M., Eastern Time 

AH: Albert Hakim 

BG: Code name for Oliver North 

BGS: Bretton G. Sciaroni 

B. Sun: Baltimore Sun 

C/CATF: Chief, Central American Task Force, Central Intelligence 

Agency 

C.F.R.: Code of Federal Regulations 

CG: Clair George 

CIA: Central Intelligence Agency 

CINN: CIA Document Control System 

CJC: Charles J. Cooper 

C/NE: Chief, Near East Division, Central Intelligence Agency 

Comp, Gen.: Comptroller General of the United States 

Cong. Rec.: Congressional Record 

CSF: Compagnie de Services Fiduciaries 

CWW: Caspar W. Weinberger 

DCI: Director of Central Intelligence 

DCM: Deputy Chief of Mission, U.S. Embassy 

DC/NE: Deputy Chief, Near East Division, Central Intelligence 

Agency 

DDCI: Deputy Director of Central Intelligence, Central Intelligence 

Agency 

DDO: Deputy Director of Operations, Central Intelligence Agency 

DEA: Drug Enforcement Administration 

Dep.: Deposition taken by the Select Committees 

DIA: Defense Intelligence Agency 

DO A: Department of the Army 

DOD: Department of Defense 

DRC: Duane (Dewey) R. Clarridge 

DTR: Donald T. Regan 

EA: Elliott Abrams 

EATSCO: Egyptian American Transport Company 

EM: Edwin Meese, HI 

Fed. Reg.: Federal Register 

FH: Fawn Hall 

FIR: Felix I. Rodriguez 



FY: Fiscal Year 

GPO: Government Printing Office 

GPS: George P. Shultz 

HPSCI: House Permanent Select Committee on Intelligence 

H. Rep.: House of Representatives Report 

H. Res.: House Resolution 

Int. : Interview 

JCS: Joint Chiefs of Staff 

JKS: John K. Singlaub 

JMP: John M. Poindexter 

KL-43 A device for sending secure telephone messages 

LAT: Lewis A. Tambs 

NHAO: Nicaraguan Humanitarian Assistance Office 

NSC: National Security Council 

NSDD: National Security Decision Directive 

NSPG: National Security Planning Group 

OEOB: Old Executive Office Building (also called BOB) 

OLN: Oliver L. North 

OSG: Operations Sub Group 

PROF: Professional Office Services. An interoffice computer 

message 

Pub. L.: Public Law 

RCD: Robert C. Dutton 

RCM: Robert C. McFarlane 

RIG: Restricted Inter-agency Group 

RVS: Richard V. Secord 

RWO: Robert W. Owen 

SAT: Southern Air Transport Company 

SIG: Special Interagency Working Group 

S/LPD: Office for Public Diplomacy for Latin America and the 

Caribbean 

SNIE: Special National Intelligence Estimate 

S. Rep.: Senate Report 

S. Res.: Senate Resolution 

SS: Stanley Sporkin 

SSCI: Senate Select Committee on Intelligence 

STTGI: Stanford Technology Trading Group International 

TC: Tomas Castillo 

TCS: Thomas C. Sinclair 

Test.: Sworn testimony taken before the Select Committees in their 

joint hearings 

TIWG: Terrorist Incident Working Group 

U.S.C: United States Code 



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, 1 volume, 1988. 



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



CHAPTER 15. THE DIVERSION 



82-684 0-88-2 



IS- 10 



See Hearing Exhibit OLN-51 



TW Dinttor of Cnint Imdiiitaer 



Naiionat lfliclli|f n«t Council 



VNCUSSIFIED 



NIC 00672-67 
13 r«teuaiy 1967 



C 184 



MMSMWCUM FOR: C&rTOll L. Rkuwr 
Inspector Central 



SJEJBTTi 



Owrl** C. Allan 

National Intelligence Officer for Counterterrorism 
Oiief , Intelligence/Oounterterrorism Center 

AddendcD to Statenent of NSC Initiative on Iran 



1. At the cuggestion of the Deputy Inspector General, I aa providing 
additional details on certain aspects of ay involvement in the Iranian 
initiative. These additional details are being offered as a result of By 
recalling in greater detail certain aspects of the initiative and of having ay 
aeoory refreshed through review of papers and discussions with other Agency 
officials involved in tim initiative. 

2. I now recall that en 13 and 26 January 1966 Manubher Chortanifar, the 
Iranian Interaediary in^iolv«d in the Iranian initiative, aade ooBsants to the 
affect that he oould obtain aoney for the Qontra^i^ti^tew^^ugported hia 
in thwarting terrorist attacks against oountries^^BBHBHHT E^'*'^ 
though a review of ay notes oonf ims that he aade stateaents tothis effect, I 
did not include those ooBmenta in the aeooranda I prepared because they seemed 
both far fetched and trivial^FOrexaople^i^omnented in January that by 
working with the Agency v«dfl|^^H^HH|^H|| he oou24 thwart a plot 
i7^a£Aytosrajgql^several "hundred poistdso^cl^lc 

mmlmUHHHI Ftob his perspective, he aaid^|||H^mp«uIS~be happy 
torcceivesua^eTp and would reward hia handsooely as well as be willing to 
s\4ply fvxids to "OUis's boys in OKitral Aaarica". Because a^bjectiv^Ms 

^^raUect terrorist-related inforaation that Ghorbanifar h^HHHU^IB 

HH^m tlM statasmM ^i»t funds oould be collected for the CDntras seeaed 
so pr^ostarouB that I did not give them any consideration whatsoever. I did 
record in-dspth all inforaation that he was willing to provide en terror i 
terrorist groups, or terrorist plots, including the alleged plot ] 

Hm Argain, ay focus in discussions with Ghorbanifar were directed at 
terrorist activity. Funding for the Contras in Central American was not a 
ocosidaration, even raootely. Z only recalled the ooeiDents aade by 
Qiorbanifar after taDdng with the Inspector General's staff in late NOveober. 






f^moj.i^" 




CL BY 

DECL OAOR 



»flED 



(n^ 



UNCIASSIFIEP 



C 185 

3. z «lao wish to clarify for th* raoocd a question put to as during ■/ 
interview with you and other neBEers of your staff in Nov«siber. At that tiae, 
and in a subsequent nefflorandum prepared by a Bcsiber of your staff, it was 
noted that tfAiid Rarr, Deputy Director of Intelligence, initially thought 
tlmt he raallfl* rhad tald hia as early as Hay 1966 that Z believed funds 
Mere bsiag tfivstad tr^ ttw Iranian initiative to the Cbntras in Central 
JtaMrioa. I discussed the Iran initiative with Mr. Kerr several times during 
the sunner and fall of 1986, essentially in the context of the problems of 
operational security of the initiative. I want to state eivhatically, 
however, that the earliest I could have nade ocxEMnts relating to poesitale 
diversion of fwids to the Oontras to Mr. Kerr was in late August 1966. 

4. It is ay understaikling now from discussions with Mr. Kerr that he 
believes that our conversation on the initiative and ay alluding to possible 
diversion of funis to the Contras likely occurred in the August tiaefraae, 
although he does not recall a specific date. I want to rieji%liasize that I had 
not readied any judgaents in the May timefrane that funds were being diverted 
to anti-Sandinista forces in Central Aaarica. It was only in late August 1986 
that I bagan to suspect that funds were going to Central Aaerica. 



ooc 

D/OCA 




Gii/D C)/»h' 



*MflB 



I5'5d^59 



CLASSIFIED AT TIME OF PUBLICATION. 



TOP 




National 




cussm 



2/Wxp\er \^ 



I'beptenbec 1986 



/5'63 



FROH 



t SUBJECT 



FOR: Director of Central Intelligence 



Allen 
Hostage Location laisk Force 



. ''/A 



'^,-, 



«^-::^ 



n Hostages 




1. I met trith Ollie North last night at his office on American hostages. 
Ollie had just returned from a meeting with John BDindexter on the same 
subject. 



2. Poindexter has given Ollie new 
namely: 



on the teerican hostages. 




Ollie is to continue to devel 
through Albert Hakim and Dick 
Associates. (Hakim, aa_you ar 



and George ave to meil Vith 
shipment of arms to Tehran.) 



to the Iranian Government 
of Stanford T echno logy 
has links to* ] 
attenpting to arrange tor Ollie 
presumably with the next 



— Ghobanifar will be cut out as the intermediary in future shipments of 
cargos to Iran, if at all possible, to cut Ghobanifar out« Ollie will 
have to raise a Binimum of $4 million. 

— If there is no other channel for financing future arms shipments, then 
Qiobanifar will be used as a last resort. 

3. Ollie is greatly relieved by Poindexter's decisions 
that John and the President would shut down completely this bad 
Iran because of the kidnapping' yesterday of Frank Ree d. Ollie 
you imnediately hold in abeyance 






ciiA/ Moaq 



TOP SEOIET, 




'/OROON 



UNGIASSIFISI . 



N 09 

Ghorban^a^^^lnancial situation la murky, 
indeed. BHHHiyhas claimed that he paid J'V- '>Q 
Ghorbanifar an additional $8M in cash, an f-^ 
assertion that cannot be validated. 

Regardless of who is cheating whom -- and we are not 
likely to be able to sort out these confused finances — we 
face a situation where operational security has been forgotten 
and no one is prepared to deal with the issue. 

Rapprochment with Iran : 

The- broader, strategic objective has become subordinated 
to the tactical matter of the Azrerican hostages in Lebanon. 
Notwithstanding, we have obtained useful insights into the 
factious goversnient of Iran. 

|for example, has focL)ssed on long-term 

US economic investment in Iran, in addition to 
arms supply. 

We have not yet developed a viable plan of action to 
utilize this information. Talk about geo-strategic relations 
is cheap and easy; hard options on how to accomplish this are' 
harder to come by. 

The Ghorbanif a£^ ^^^^^Wchannel: 

Ghorbanifar is depressed and claims his financial 
situation has been damaged. On several occasions, he has said 
he would not sit idly by and permit hidiself to be made the 
"fall guy" in this matter. He claims to have given written 
accounts of all that has transpired to several persons in 
America and Europe. He has directed these individuals to make 
this material available to the press in the event that 
"something bad* befalls him. We believe this account would 
include statements to the effect that: 

the Government of the United States sold military 
materiel to the Government of Iran in order to 
gain the' release of American hostages in Lebanon; 

a high-ranking US delegation met in Tehran with 
representatives of the Iranian government in order 
to discuss the future relations between the two 
countries, with various cooperative ventures 
discussed; 



s 




wmmm 



N 10 



the US Government made several promises to him 
(Ghorbanifar) that It failed to keep; and, 

the Government of the United States, along with 
the Government of Israel, acquired a substantial 
profit from these transactions, some of which 
profit was redistributed to other projects of the 
US and of Israel. 

There is also likel/ to be material alleging poor judgement and 
shabby conduct by individuals of the US and Israeli governments, 

Recommendations : 

We face a disaster of major proportions in o ur, ef f ori 
with Iran despite the apparent promise of the HaJtir 
channel. Too many know too much, and exposure, it a mini 
would damage the new channel badly, perhaps fatally. 

Rafsanjani cannot permit himself to be seen as 
dealing directly with the 'Great Satan*. 

Exposure would make any movement on the hostages difficult, if 
not impossible. 

It is clear f ron(m[|^^|^^Bpomments that he does 
not have total con^ol oveT"The Lebanese Shia 
holding the American hostages. 

Because the risk of exposure is growing daily, the 
following actions are recommended: 

(A) Establish a Senior-Level Planning Cell at the White 
House to focus on the potential for rapprochment with Iran, the 
appropriate channels to be used, and the separation of the 
tactical hostage issue from the long-term strategic objective. 

This group could consist of two or three experts and 

should be headed by someone with the stature of a Henry 

Kissinger, a Hal Sauders, a Don Rumsfeld, or a Dick 
Helms . 

The group should have access to all data concerning the 
onanj-q g ini ti a t ive( s) , i nclud jjia White House records and 
the! 



■6- 



BNWSIflEB 



mUiiiilhlbU. 



N 



11 



(8) Develop Press Guidance in the Event of an Exposure . 
We have no coordinated press guidance on how to deal with the 
Iranian initiative should it be exposed publicly. Press 
guidance must be prepared now. At least one, possibly two 
major US journalists have bits and pieces of the hostage story 
and know that Ghorbanifar was involved in it. 

The Israelis have exposed some of this. 

Khashoggi and the Canadian financiers are 
complaining, to influential US individuals. 

Ke could soon have an Incredible mess on our hands and damage 
limitation must be addressed now in an orderly, systematic 
manner. 



(C) Effect a n Orderly, Damage-limiting Shutdown of the 
Ghorban ifaijUJ^pp Channel . It is unlikely we could totally 
discredit an^^^v^^Tions by Ghorbanifar; he has too much 
documentary evidence that implicates US officials. 



Hakim has suggested that means be found to 
off* Ghorbanifar. 



'buy 



Perhaps we can engage Ghorbanifar otherwise, in 
non-hostage-related projects — say, in the area 
of Iranian, Libyan, and Syrian sponsored terrorism. 

A small worl^nggroup of those knowledgeable of the 
Ghorbanif ai(^|||||||H^hannel should mee^ to consider how to 
cope with thispro^^m. Clearly, there are some personal 
things that can be done for Ghorbanifar, for example: 

Arrange permanent alien residency for his girl 
friend in California. 

Arrange for visas for his family so they can visit 
relations in the United States, and so his mother 
can obtain medical treatment here. 

These steps will not "alleviate Ghorbanifar 's financial problems 
— regardless of their merit -- but may dispose him more kindly 
to the US Government and lessen his inclination to expose the 
Iranian initiative. 




10 



tS -7C 



See Hearing Exhibit OLN-315 



11 



MAmt 



C 09370 
• • - . ■ - , , ,,^ ^ ^^ 




j^Vi .-'ar pro- ric i £.0. w?R 



r^Kl'-^ prr 

x:';V -■••-, Litions' ' jcurity C'.a.; 



l5-?^^?fO 



7 Noveater 1966 



FROM: 



SUBJECT: 



r of Central Intclli9enc« 
Oirectoc of Ontral Intelligence 



Oiarles E. Allen 

National Intelligence Officer foe iSDuntcrtercocism 



Meeting with Roy H. FVirmark 




li's New York operations, called 

ting with me in Washington. I met 

Key Bridge Harriott Hotel. He 

that is occurring with the 

Ihe following are highlights of 



1. Roy N. Purmark, head of Adnan 
on 5 Noventier 1986 to request an urgei 
with Roy on the afternoon of 6 Nov< 
provided further informati on on the 
shutdown of the Qiobanifar 
the conversation with Roy: 

' a. Ihe Canadian investors wh<^^Rjp $11 million to finance the arms 
transactions with Iran have retairflBwashington law firm to bring suit 
against Khashoggi and the offshor^^BMny Lakeside, the firm into which 
they paid the |ll million to coverflf^ost of Ifewk missile parts. Ihe 
Canadians told Roy that they woul<^ring suit against Khashoggi and 
Lakeside on Monday, 10 Noveoter, and that they intended to ixplicate in 
the ligitation directly senior levels of the US Government. Roy claimed, 
however, that the Canadians had agreed — at his request — to withhold filing 
the suit until 17 Novenber. 

b. After the release of Jacobson, the Canadiank began to press 
Ghobanlfar and Khashoggi for repayment of the money|awed. (^g^^far told 
the Canadians that the latest transaction did not involve h^^^^^^ ^^y 
and that th« United States was 'dealing direct* with the I^ 
Government. 



c. The Canadians tend to believe Ghobanifar beca 
their lawyers block Chobanifar's account in Ctedit^^issi 
been transferred into Chobanifar's account in>e^yinent 
to. Iran, Credit Suisse would have autorratiotflly transf 
the Canadians' account in the Bank of Montreal. 



iU 'ms 



mmm 




' ^^ 



CL BYl 

DECL 



PH SISR VOL I 



12 



-IftftSSIfIB 



co<)y^^ 




ans are extcemely angry, they are pressing Khashoggi 
~ eve that the Iranian Qovernment has paid money to 
f additional arms having been sent to Iran. They 
release could only have resulted from another arms 



The Canadians involved are Douglas Fraser, a financier who 

^yman Islands, and Ed Miller, who operates out of 

The third individual involved in the investaient 
by could not remeirberjiis name) who lives in Los 
The swajiu knows a nuntier of pronunent Congressmen 
,(Cra}1i^^Ku'.^B?Eioned) and even advises the Sultan of Brunei. The swamj 
his counsel ea Fraser and Miller to be patient, but the two Canadians are 
now determined to recover their money. 

f. The Canadians intend to expose fully the US Government's role in 
the bacfcchannel arms transactions with Iran. Ihey believe Lakeside to be 
a proprietary of the US Government; they know that former Major General 
Richard Seccord is heavily involved in managing the arms transactions to 
Iran for Oliver L. North, and tha||A|word is also involved in assisting 
^4orth in the support the Oontras ^HBaragua. 



< g. When the Canadians origi 
with Khashoggi and Ghobanifar, thi 
sanctioned by the OS Government 
politics of the US-Iranian equati 
inillion. Miller, a tough and sle 
to get his money back. 




t up the money after negotiations 
ieved the effort was formally 
re not concerned about the 
y simply want repayment of $10 
ividual, is especially determined 



h. In addition to bringing si^^^fcinst Lakeside and Khashoggi and 
exposing US Government involvemen^JH^e arms transactions, the Canadians 
intend to use the swami to lobby key Congressmen. The Canadians believe 
that they have been swindled and that the money paid by Iran for the arms 
may have been siphoned off to support the Contras in Nicaragua. The 
Canadians originally expected to be ce{>aid in thirty days; it has now been 
six months and they have received only $1.1 million. 

i. While Ghobanifar lanaged the channel to T^ran, he coordinated his 
initiatives in a variety of ways with all signifiqpnt factio(^_iji Iran. 
Clearly, whoever is running the new channel has filled to 
devastating mistake. 

2. Roy stated that he would endeavor to identify the la' 
Canadians have retained and would call me on 7 Novesnber. I 
understanding that the law firm in question at one time had 
involving President Nixon. The Canadians have told Khasb 
already lost $6 million as a result of their ill-fated invj 
part, Khashoggi is demoralized and is unable to correct t 
his own financial difficulties. Qiobanifar, according t 
sums of his own personal fortune over the past 18 month 
described Ghobanifar as an excellent broker with extraor 




contacts in Western Europe, the Middle East, and Iran. 
is angry and bitter and his health is now iirpaired. 



Ghobanifar, however. 



.Q.\\»l 3<\T5 



iEUSSU. 



[lentwletidrr/^ 7?^ 



IS 



/ 



"fflffittSSfflEB 



C 09372. 




ific suggestions on how to solve the financial 
sonehow $10 million should be paid into (^cbanifar's 
Account Mintier 283838-92-1). Because Qxibanifar's 
s totally blocked, the money would sinply be 
to the Canadians. All the Canadians have are checks from 
and Khashogqi— checks that are worthless. Roy reaffirmed that 
and Khashoggi have been able to pay off the other investor — an Arab 
stated that he and Khashoggi may see the Canadians 
re to request more time, but they were not sanguine 
from such a meetingr 

4. Tfn^^^^^i^have told Roy that they had kept their word keeping 
these transactions totally secret, but now felt no conpunction to do so in the 
future in view of media exposure of the HacFarlane trip. Roy stated that he 
personally felt responsible for persuading Khashoggi to help finance these 
transactions. Ihe effort had taken considerable courage both on- the part of 
both Orabanifar and Khashoggi. In Roy's opinion if the transactions had 
proceeded as planned in July 1986, the hostage issue would have been resolved 
by now'. The apparent switching to another channel by the united States in 



dealing with the Iranian Government, h 
current publicity about these transact 
near-'term hope of obtaining Iran's su 
additional hostages. The deuiage that 
the Canadians is potentially significai 
aware! of all of the transactions that 
months J 

6. , I conclude from Roy's statemen 

a. Furmark is personally trou 
capital for a venture that has now 




, had destroyed this process. The 
robably has foreclosed any 
n securing the release of 
cur from the legal efforts of 
ially because the Canadians are 
curred over the past 14 to 15 



having persuaded Adnan to put up 



b. His approach to the US Government appears to be a last-ditch 
effort to try to pressure the government to take some action, for example, 
ensuring another shipnent of arms through Ox^banifar. 

c. Socne very nasty allegations against the US Qpvernment and key 
officials will be made if the Canadians bring civil suit, although much of 
what they know is speculation and cannot be proven. I 



i 



d. The fallout from any litigation by the Canadians 
significant, especially since the press already have major 
back channel effort with Iran. 



le. When dealing with Iran, every faction — to some ext 
taken' into account. The fact that Qiobanifar kept Ayato 
fully informed on his initiatives with the United State; 
radicals around Hontazeri have decided to use the MacF< 
contacts by Iranians with the United States as a way 

Rafsanjani's moderate faction. Qiobanifar, bitter an( 

actually encouraged radical elements to expose those contacts, although 
the 'arrest of Mehdi Hashemi probably finally triggered the action by the 
radi,cals. 




^^"^'^ IMASSlfe 



[iKIltW It{i!tl7 



/^7?7 I 



14 




\mgySS0Lu 



C 0<3^?3 



igh the situation is messy and is likely to become even 
keep in sotne perspective the damage that can be caused 
balance, given the current exposure, the damage now 

t. 



Oiacles E. Allen 



^"^^^^ wmm 




15 



CHAPTER 16. SUMMARY: THE IRAN INITIATIVE 



16 



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17 



















"f\ ■v^ojrSPca.-r "S"? ^v**C.\T <^t*S«r^. 










18 



19 



CHAPTER 17. EXPOSURE AND CONCEALMENT INTRODUCTION 
THIS CHAPTER DOES NOT CONTAIN FOOTNOTES. 



20 



21 



CHAPTER 18. OCTOBER 1986: EXPOSURE THREATENED 



22 



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CLASSIFIED AT TIME OF PUBLICATION. 



31 



Memorandum 



uNCussm 






•' 773J 




SubjKt 



Investigation of Southern Air Transport 



NovetDbcr 12. 1986 

JLM:TQ(:cmc 



William F. Weld 

Assistant Attorney General 

Criminal Division 



From 

John L. Martin, Chief 
Internal Security Section 
Criminal Division 



Attached hereto is a copy of a memorandum, dated October 31^ 
1986, from Judge Webster to Assistant Director Floyd Clarke of 
the Bureau's Criminal Investigative Division. Briefly, Judge 
Webster's memorandum advises that in accordance with a request 
from Associate Attorney General Steve Trott, the Bureau was to 
suspend its ongoing investigation of the captioned matter for a 
period of 10 days, because of possible prejudice to "some 
sensitive hostage negotiations." 

As you know, this matter involves Eugene Hasenfus, the crew 
member of the C123 aircraft shot down over Nicaragua on October 7, 
1986. The Bureau is anxious to resume its investigation, but, 
even though the 10-day period requested by Steve Trott has expired, 
it is unwilling to do so without the Department's approval. 

Unless you advise to the contrary, I intend to advise the 
Bureau that it is free to resume its investigation without 
further delay. 

Attachment 



^$^ 



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CLASSIFIED AT TIME OF PUBLICATION. 



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RECEiveife^-' 



NOV 18 



Public IniegrilY Section 



Mr. Ralph 0. Martin 
Department of Justice 
315 9th Street, N.w. 
Public Integrity Attorney 
Washington, D.C. 20530 



Dear Mr. Martin: 



E TREASURY ^ - 

us. COjrOMS SESvKE -J-.. 



WASHINGTON. C J0JJ9 

NOV I 4 ::5 



/ooi^ 




t(# 



ENF-1-C3-E:0E:S:M RGL 



J 6956 



Par 






This is to confirm cur telephone conversation of Novenber 
10, 1986, regarding the results of our initial inquiry into U.S. 
Customs Service criminal investigations of alleged violations of 
the Arms Export Control Act and the Nicaragua Sanctions as they 
relate to certain persons identified in Senator Kerry's report. 

As explained, the data provided in Senator Kerry's report 
was cross checked with the crininsl indices of the Treasury 
Enforcement Communications System (TECS), and Headquarters files. 
In addition. Customs Offices of Enforcement in Miami and Atlanta 
were contacted. For ycur inforrraticn TECS records are indexed 
by name and other identifying data. TECS query of the names 
furnished, resulted in 21 matches. There were, however, numerous 
instances in which matches could not be refined as there were tco 
many records in the universe. For example, the name John Hull 
resulted in 293 possible matches. Corsequentiy , without further 
identifying data we are not able tc determine if a record exists 
for some of the persons named. 




viol 
Tran 
aire 
inves 
determinat 
matter has 
Munitions 
the Specia 
Miami, Flo 
possible v 
Amendment . 
your quest 
Customs ha 
was sold b 
Southern A 



ng the Cu 
the Arms 
h their ex 
e Special 
on into th 
ion as to t 
been refer 
Control. T 
1 Agent in 
rlda, who h 
iolations 
The FBI t 
ion regardi 
s, however, 
y Ooan Heli 



stems 
Expc 
porta 
Agen 
e mat 
he li 
red t 
his i 
Charg 
as as 
f the 
heref 
ng ow 
dete 
copte 



:nve 
rt Co 

ticn 
t in 
ter . 
censa 
the 
nvest 
e , Fe 
suned 
Neut 
ore w 
nersh 
rmine 
r in 



stigst: 
-I t r 1 A 
to Cent 
Charge , 

The ir 
bility 

Depart 
igaticn 
deral B 

invest 
rality 
ould be 
ip and 
d that 
March 1 



en int 
c t by 
ral Am 

Miami 
vestig 
of the 
ment o 

is be 
ureau 
igativ 
Statut 
St be 
f inane 
the ai 
986. f 



ir Transport acting on behalf of U 

iMAf;f;iHFn 



ar 
Scuth 
erica 
, has 
ation 
aire 
f Sta 
ing c 
of In 
e Jur 
es an 
able 
ing 
rcraf 
or £4 
dall 



alleged 
ern Air 
of a C- 
iritiat 
hinges 
raft, an 
te, Offi 
cnducted 
vestigat 
isdictio 
d the Bo 
to respo 
f the ai 
t in que 
75, COO, 
Research 



123 
ed an 
on 3 
d this 
ce of 

with 
ion , 
n over 
land 
vt tc 
rcra'"t, 
St ion 
to 

Ccrp. 



35 



UNClASSra 



/<^c>3 




fir.ally, we identified only ore instance in which a Customs 
offiCe reported an allegation t^at U.S. Gcvemmer.t C'ficials were 
funneling funds to the Contras. The repcrt of investigation 
contained an unsubstantiated allegation that unnamed Central 
Intelligence Agency employees are passing funds tc General 
Singlaub, USA, Retired, for use in accuiring material for the 
Contras . 

•■ in the proces-. o' cttsining the d = ta ycu requ^steC in 
aticn: '.he ictntity c' the v,-,ricus flUSA'! ''andlirg 
; the reports regarding Generils Singlaub and Secord; 
if in the Southern Air Transport Invescigaticn , 
Customs uncovers any evidence indicative of high level government 
official Involvement. This information will be forwarded to you 
in the near future. 



Sincerely , 



UNCLSSiFlEO 




Lcpez 



36 



/^3& 



CLASSIFIED AT TIME OF PUBLICATION. 



37 



n-s? 



See Hearing Exhibit OLN-315 



38 



tmssu. 



C 09370 

u;:*-..^. • - - 111 ^iji 




:Q:'.ti\ pro' ' 



^■ 



i £.0. 1225R 
7 Noveoter 1986 



l^6a+^y 



raOH: 



SUBJEXTT: 



r of Central Inttlljgcnc* 

Oi rector of Central Intelligence 

diaries E. Allen 

National Intelligence Officer Cor Counterterrociam 

Meeting with Roy M. Furmark 



1. Roy N. Furmark, head of Adnan 
on S Novetrber 1986 to request an u 
with Roy on the afternoon of 6 Novi 
provided further informati on on t 
shutdown of the Qiobanifar 
the conversation with Roy: 

' a. The Canadian investors 
transactions with Iran have retai 
a9ainst Khashoogi and the offshor 
'they paid the |11 nillion to cove 
Canadians told Roy that they woul 




i's New York operations, called 

with aw in Washington. I met 

the Key Bridge Harriott Hotel. He 

that is occurring with the 

Ihe following are highlights of 



$11 Billion to finance the arms 
ington law fira to bring suit 
Ukesidc, the fir* into which 
_ St of Hawk missile parts, the 
ng suit against Khashoggi and 



Lakeside on Monday, 10 Novevber, and that they intended to ijsplicate in 
the ligitation directly senior levels of the US Government. Roy claimed, 
however, that the Canadians had agreed— at his request — to withhold filing 
the suit until 17 Noveabtr. 

b. After the release of Jacotaon, the Canadianh began to press 
Q>abanifac and Khashoggi Cor repayment of the money|owed. ^gb^^ar told 
the Canadians that the latest transaction did not involve h^^^^i way 
and that th* United States was 'dealing direct* witJn the I^ 
Government. 

c. The Canadians tend to believe Otobanifar beca 
their lawyers block Qiobanifar's account in Ctedit^^iss 
been transferred into Oiobanifar's account in><^yment 
to. Iran, Credit Suisse would have automatiotflly transf 
the Canadians' account in the Bank of Montreal 



(L\\\J W. 



wm%m 




CL BY 
DECL 



39 



"UNettSSIFIEB 



C c?*^^^ ^ 




ians are extremely angry, they are pressing Khashoggi 
■ eve that the Iranian Government has paid money to 
( additional arms having been sent to Iran. Ihey 
release could only have resulted from another arms 



TTie Canadians involved are Douglas Fraser, a financier who 

»yman Islands, and Ed Miller, who operates out of 
. The third individual involved in the investment 
could not rememberjiis name) who lives in Los 
The swami knows a number of prominent Congressmen 
ioned) and even advises the Sultan of Brunei. The swami 
Fraser and Miller to be patient, but the two Canadians are 
now determined to recover their money. 

f . The Canadians intend to expose fully the US Government's role in 
the bactcchannel arms transactions with Iran. They believe lakeside to be 
a proprietary of the US Government; they know that former Major General 
Richard Seccord is heavily involved in managing the arms transactions to 
Iran for Oliver L. North, and tha^^|word is also involved in assisting 
North in the support the Oontras ^^Hbiragua. 



< g. When the Canadians origin 
with Khashoggi and Ghobanifar, th< 
sanctioned by the US Government, 
politics of the US-Iranian equati 
tnillion. Miller, a tough and sle. 
to get his money back 

I 

h. In addition to bringing s 
exposing US Government involvemen 




t up the money after negotiations 
ieved the effort was formally 
re not concerned about the 
y simply want repayment of $10 
ividual, is especially determined 



inst Lakeside and Khashoggi and 

e arms transactions, the Canadians 

intend to use the swami to lobby key Congressmen. The Canadians believe 
that they have been swindled and that the money paid by Iran for the arms 
may have been siphoned off to support the Contras in Nicaragua. The 
Canadians originally expected to be repaid in thirty days; it has now been 
six months and they have received only $1.1 million. 

i. While Chobanifar managed the channel to Tehran, he coordinated his 
initiatives in a variety of ways with all signifioant facti ons in Iran. 
Clearly, whoever is running the new channel has failed to 
devastating mistake. 

2. Roy stated that he would endeavor to identify the la' 
Canadians have retained and would call me on 7 November. I 
understanding that the law firm in question at one time had 
involving President Nixon. The Canadians have told Khashi 
already lost $6 million as a result of their ill-fated invj 
part, Khashoggi is demoralized and is unable to correct t 
his own financial difficulties. Qiobanifar, according t 
sums of his own personal fortune over the past 18 month 
described Qiobanifar as an excellent broker with extraor 




contacts in Western Europe, the Middle East, and Iran, 
is angry and bitter and his health is now inpaired. 



Oiobanifar, however, 



\\>1 3^15 



ifiUOTa, 



[letrtm tttirtrr /"^ 7f / 



40 



/ 



DNWSIftEB 



C 0S37i 



specific suggestions on how to solve the financial 
^somehow $10 million should be paid into Chobanifar's 
l( Account r*jnt)er 283838-92-1). Because Oxibanifar's 
tedit £^^|Bs totally blocked, the money would sinply be 
to the Canadians. All the Canadians have are checks from 
and Khashoggi— checks that are worthless. Hoy reaffirmed that 
and Khashoggi have been able to pay off the other investor— an Arab 
^$S nillio^Hdoy stated that he and Khashoggi may see the Canadians 
the nej^^^Bre to request more tine, but they were not sanguine 
It from such a meeting 

4. TM^^HPPS^ve told Roy that they had kept their word keeping 
these transactions totally secret, but now felt no coinpunction to do so in the 
future in view of media <>xposure of the HacFarlane trip. Roy stated that he 
personally felt responsible for persuading Khashoggi to help finance these 
transactions. Ihe effort had taken considerable courage both on- the part of 
both Qxjbanifar and Khashoggi. In Roy's opinion if the transactions had 
proceeded as planned In July 1986, the hostage issue would have been resolved 
by now'. The apparent switching to another channel by the Uhited States in 



dealing with the Iranian Government, 
current publicity about these transact 
near-'tenn hope of obtaining Iran's sui 
additional hostages. The damage that 
the Canadians is potentially significa; 
aware' of all of the transactions that 
months i 

6. ; I conclude from Roy's statemem 

a. rurmark is personally trou 
capital for a venture that has now 




had destroyed this process. The 
robably has foreclosed any 
n securing the release of 

r from the legal efforts of 
ially because the Canadians are 
curred over the past 14 to 15 



having persuaded Adnan to put up 



b. His approach to the US Governrant appears to be a last-ditch 
effort to try to pressure the government to take some action, for exanfile, 
ensuring another shipment of arms through QMbanifar. 

c. Some very nasty allegations against the US Qpvernment and key 
officials will be made if the Canadians bring civil suit, although much of 
what they know is speculation and cannot be proven. 1 



.i 



d. The fallout from any litigation by the Canadians 
significant, especially since the press already have major 
back chafinei effort with Iran. 



le. When dealing with Iran, every faction — to some 
taken into account. The fact that Oiobanifar kept Ayatc 
fully informed on his initiatives with the United State^ 
radicals around ;-tontazeri have decided to use the Hacfa 
contacts by Iranians with the United States as a way 

Rafsanjani's iroderate faction. Oiobanifar, bitter ancj 

actually encouraged radical elements to expose those contacts, although 
the 'arrest of Mehdi Hashemi probably finally triggered the action by the 
radi,cals. 




diiiiwf IMiSSIFIFn 



{licitw itpfi^ /*? 7?7 



A 



41 




OMty^SU. 



C OS173 



gh the situation is messy and is likely to becxme even 
keep in some perspective the damage that can be caused 
balance, given the current exposure, the damage now 



Oiarles E. Allen 




w^^5 JUliSSlBEO 




43 



CHAPTER 19. NOVEMBER 1986: CONCEALMENT 



44 



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: 04ii4-; f.Ov fa 

FM alR ?unCE ONE 

TO UHSP 

FOP OR K.EEL FPOM flOM POINOE.'iTgR 

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SUBJ IR>»N PRESS CUIDhNCE 

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N 7796 



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2. WHAT 00 YOU THINK ^BOUT THIS ONE' .JE HmVE NOT USED IT YET 



-' 00c? THE u 
[RuN-IRrtO IJAP5 



;t:.l h^ve hn flPMs EMSucco ucjinst 



IPi^N IN T^F 



FIGHT J,,,- iHOiJLf'' i'iiP 



t.,r, -:c'TM''-^"i'::!'-' ''"*^ ^'^^ '■"-"'■' CHrtNQEO 

9, Z-- ^'^ SIDES ;hoijl: "" ' 



:E'-LEnEN7 re TWEI5 r,^,,.'^ ' ^' J 5 . UE^ ,hOUl: PEhCH m NECO-I^TEO 

-; LOnCmJ'ip^m ::--,= TF-? r ;,*^^'? ■^ii'^U^D BE NO UINHEPS Oft LOic = ^ 
:uNTlN.,t ' ---TE. T„E ,j,c jF TEPP0PI = '1 the ORfl< EipaP^LO ,., "- 



^Declassified /Released onilj?*^i^*^ 

"under provisions of E.O. 12356 
by 3. Reger^ National Security Council 




W 



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51 



nn 



See Hearing Exhibit DTR-41 



52 



!'•• Ihitih" ■i\.tu . 




iM 



N B99S 






lU iie«*«h*r V)M 



Vici Atfatral John h. H*i*4tMUf, \.l*^ 
Atilttant to fht ^rMltftn for 
MtioMl SMHrlty Affairs 

T»« \th\U H«H<« 
MfttnytA*. 0. C. 20MW 

Ottr John. 

M«rt 1% • ««rt1«K «tkUk ««yt • (itiU-Mft <.<««•>- 
th« OA* yev r»M to at, mRUM I tii>Mk m "*<•«««•/ 
bvt not 10 awe* «> to tipiat tut If «#•>«•<. 'i^ 4'tt\ 
jrow rood to at 4eot lUtlo aoft iHor t«)r •« r*«tffw4 
ttw Mtttr ««i «1ico««rtd tMt m tfidn'^t s.'tu tn* Imi. 
rmt will. MU-tWl tJMrt is • poniw of ti»t ioco««} 
Mr*9r*P<> M « HTtloH of tno roortfi poragropM «ft<cn 
could ppobofeljr bo struck or cut it doim itin fw*-. 

lours. 



Attoctaoiit 









under prcifisions of M. 1238 ''^ 
ty B. Rtger. fcsiJoQjl S« 




53 



ONCIASSIFIEB 



W. .-8996 



IM v<«v Ot-rtctwt 9mt i9tc«l«t1«i m owr «1ttutOons aUh Ir«n, t 
nav« • brUf ttatMHflt to Mkt. Nc«N«t CMtlnwM t»tcu\«llw« eeg)« :«op«r()ut 
livm and b* counttr-protfvctlvt to attat «• hev* to acltiovt. '. «UI taut no 
<|iM«tion». 

Froa thf MrHtst aonths fonewinf tho r«velut1on tn ]rtn, tttt Ui«tt»4 >(*tt« 
GovcriMNcnt has attaaptttf to ro«$tabH>k official contact «itn cnai 90vcrnf«'tt 
tn oro*r to oisciist ttratt^U 4o«o)e9«»Att in titat critical »*rt of tie M»r)i 
afMi to try and reastabllstt a conttmctlvt Marking relatlensA^p. 
altia4mji.ai(l 49a«i« 9tfri« tvportWl' rolt In our straCt^U v^Wcj «ith 



f 

/»1l 



respect tn its nci^Dhori, incluoln) tht Soviet Union. Me believe that the / » 
»Ha>~twn»r» Mi| e iw i ei wii » f H i» w c iio m i le i e ie ii e it l ei le u b y a n u w y.l ' 
prosperous (r«fi pursuing «o<<erate poHdes and p>act icing frten<ts^ip ip4 •' 
t.«»i«refice tor Vis people and at*f -tkAtitim . . ^• 

We seek a peaceful so\utton to the conflict between lr«n ar.d |r«3 vhic 
leaves eaci> country with Us pritfe and Its territory Intact. >Jur polKy has 
been and continues to be to restrain sfilpaenCt to either coabata/tt that could 
4lt*"- the balance or prolong the Mr. Any contacts and alscustisrs »e have 
had have been wUlila tUls policy fraaeMrk. 

It het bMil aM vlll rtaain our policy n«t to reward hostage takers oy 
Meeting tli«tr t—amlt. Me accept and seek tlie belp of other gcvernatntt in 
'e^Mverlng our hettagcs. tt ui. It Is ^a r< ^-wr'pOTIcy to .-ec3inlFe"aB«— v^^ 
-ew c owr ' ege-.'botH tangibly IM'tntanglblyt rMpontlble beltavio' oy ^overnmitts . 
which My In the past iMvt spensortd terrorist amcRS. And tf this were '.o \ 
contribute to the re1t««« tf /barlcan hostafn, this would be weicoae. 




mm 



54 



I r» ■> ; ^ .** 



' " ■""' N 8997 

rn« dtctviM to pwrsu* tMt tf1«l09ut hUA lr«n tlaost < >#«r 49c *4t 
•in*. It MS f«lty tttcmtt4 «<t^ ay pr1nc(p«1 Mvltors. I fcU thit 
tft* rtspenstftlHtlM of ay offlct rt4Nlr»d m to ■««• th# difficvU a^c'iio" 
to »rocMd, b«4rin9 In alntf tli«t th«r« «»trt ritkt, but dso t^«t t.^« :jrq.'«f-« 
%«c«rity tnttrMti of our cewntry vould b« sorvod by tn* r«tNt«bU*.(««r.t o' 
i:o»t«ct antf tflaloqut Ofl strattflc ttsuts «ttA tht 90vtrn«int ot i-^n. 



liHtlCffl 



55 









fl 3« ft 












:^iy 



0.^* 



UILaSSIFIED 



S6 



)9-a(, 



See Hearing Exhibit McFarlane-50 



57 



W'-??- 



cr 



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58 









96^^^ •* 



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i 



- r it' 
I. ;': 

.1 i-r 



m • • ■ 

■ • • • • 

S .. at 

t: --I 

ft) « • • • 






»99««M O toM» 

••■*' ••— »&i 

• «««*•«» ac 

Si**!"*"* ••« 

'tiiiim III 

• s • 



j.iaifrHi ill 






s rm m S m V » ' 



r * u e • • 

• • « » 




59 



/9-3? 



See Hearing Exhibit McFarlane-51 



60 



n-3r 



See Hearing Exhibit McFarlane-52 



61 



h'3l 



See Hearing Exhibit DTR-58 



62 




TRANSCRIPTION -Cassette • 3 



IsH^HNovember 1986 






Grossmain (?) , this is Central. Grossmain, go ahead. This is 
Central. I have Mr. Poindexter on the, uh , standing by on the 
other line. Urn, stand by while I make the connection, over. 
Roger, I'll get the DCI . Also, are the folks over at the White 
House fully briefed on the place to talk scenario? Go ahead. 
Ok. That I'm not sure of: I'll give him a quick rundown before 
I, I give him over to ya . Roger. The DCI is on his way in 
right now; it will be a couple of seconds. Ok. You have been 
connected. If you can, if you acknowledge that you are there 
for them. All right. Bill, Bill, this is John. Over. Are 
you, ok, you have to press the little star sign and you talk 
and then when you're finished you push the little pound sign. 
Ok, thank you. Bill, Bill, this is John. over. Bill, Bill, 
this is John, John. O^er . Urn, stand by, sir, please stand by 
one moment. Over. Hello. (garble) Sir. Bill, this is John. 
Go ahead. Over. I'm just calling to uh see what's up. I 
gather that uh you'd like me to be home a day early or two days 
early. If I can (garble) to do that I've gotta duck my, cancel 



what's up. Ok? 



stop. I thought you might tell me 



-- ji l) i?256 ^-' 



^ 



Dy .. 



■|iy 'Jo^incil 



'''■ftSSFJ 



u 



OING IS 0852-87/ 



63 



'jW^^^^W 



C 005 



Bill, Bill, this is John. Roger. Bill, it's just that, that I 
got to thinking about the hearing on Friday and the 
coordination that the two of us need to do and I just didn't 
think there would be enough time to do it with your coming in 
uh early Friday morning. So if you can get back on Thursday uh 
so we could meet Thursday afternoon,; I think it would be very 
useful so we make the best possible presentations on Friday, 
and try to lay as many of these questions to rest as we can. 
over. Ok, John, I'll be back uh Hon, I'll be, I'll be back 
Thursday morning and uh I'd like whatever information you can 
collect in there. Ok? Over. This is John, Roger. We've 
been putting together all the chronologies and all the facts 
that we can lay our hands on, uh , and I'll be ready to talk to 
you any time on Thursday, but you probably would want to spend 
some time out at your place on Thursday morning, I guess. 
Over, (Garble - At such a time as you seem to be Thursday 
morning?) Bill, this* is John. I'd prefer to meet Thursday 
afternoon. That would give you an opportunity uh to spend some 
time out at the Agency in the morning and talk to Claire, you 
know who went up, uh I guess the staffers came out to him 
today, but that would give you some time to talk to them in the 
morning. Over. . 



!l 



64 




e 



006 



Art you going to have a lot of peoplt at the meeting - uh state 
and uh Dafcnte? Over. This is John. Uh , we could do it uh 
however you'd liKe. Uh , 'l want to, I'd like to spend some tine 
just the two of us, uh but if the, Ed Meese indicated uh he'd, 
he should w«nt to be helpful and so he would like to be in at 
least one of the meetings. Over. Ah, you, you set whatever 
time you'd like for us to get together and have a little talk 
ourselves, then I'll have, I'll handle a meeting any time you 
set it. and I'll be there and I'll see you then on Thursday, 
over. This is John. Roger. I'll do that and thank you very 
much and I'll see you on Thursday, Over. This is (garble) 
Roger . Out. 

Central, Central, this is Postman, vje're clearing that 
(garble) and we're back to common. Thank you very much for 
that call. We're clearing that with the White House, Central. 
Thank you very much for the call. 



•3- 



m^^fssfcfr 



65 



TOt» SECRET 



CH 



hi 5^\1 

11/07/86 

RONOLOGY OF EVENTS; U.S. -Iran Dialogue :2^ |<^ ^ ^^ 



UllOt*BO«£TLU 



1984 





1985 




Feb 14: 




Jun 14: 




Sep 1 : 


G> 


^^■. 


1 


►Sep 14: 




Oct 03: 


Q 


NovT.^ : 




Dec 20: 




Dec 23: 




1986 




Jan 06: 


V^V2/Feb 14 : 




Apr 17: 




Apr 22: 




May 09: 




May 15: 



TOP SECRET 



Michael Ledeen- suggests to the NSC that Israeli 
contacts may be useful in obtaining release of the 
U.S. hostages in Lebanon. Ghorbanifar is 
introduced to Ledeen and the NSC as an Iranian 
intermediary. 



Jeremy Levin escaped. 

TWA-847 hijacking. Last known instance of 
Iranian-supported terrorism against U.S. 
nationals. 



50J TOW missiles delivered to Iran (Tabriz ?) . 

Reverend Benjanin Weir released. 

Islamic Jihad claimed it murdered U.S. hostage 
William Buckley in retaliation for Israeli raids 
in Tunis 




Declassify: OADR 



rtiiii; uec!assif.'-;d/: :'?33ri 

vicsrfrcvh: .,5 jf E. ). 123... 



Israel^deliver4# 18 i|^ HAWK missiles to Iran 
Hostage Locating Task Force (HLTF) formed at CIA 
Nir became primary Israeli POC . 

Presidential Finding on Iran. 

delivers 1.000 TOWs to Iran via Israel. 



U.S. hostage Peter Kilburn murdered in retaliation 
for U.S. raid on Libya. 

Ghorbanifar arrested in Switzerland for... 

Planning meeting at CIA. 

Terms of Reference (TOR) approved for establishing 
a strategic dialogue with Iran. U.S. objectives: 

Return U.S. hostages. . 

End Iran-Iraq war. ^t, 

Establish a correct relationship with Iran. S o 



\immB 



82-684 0-88-4 



66 



TOP SECRET 



UMSMFltU 



N 5618 



%U4^ M*y 23: 



May 24: 

May 25-27: 

Jun 10: 

Jul 26: 

Aug 03: 

Sep 19-20: 

Oct ;3: 

Oct 06: 

Oct 26: 

(2) Oct 29: 

Nov 02: 

Nov C: 



U.S. delivers 508 TOWs to Israel (replacements). 



McFaurlane party to Tehran. 5or,e of t.'-.e 2 40 HAWK 
missile parts accompany the party. 

Rafsanjani news conference containing possible 
"signal" that Iran wanted improved relations with 
the U.S. 

Father Jenco released. 

Remainder of 240 HAVW missile parts delivered to 
Tehran. 

Discussions in Washington with new Iranian 
intermediary. 




U.S. representatives meet Iranian representatives 
in Europe. 

Frankfurt meeting of U.S. and Iranian 
representatives. 

500 TOW missiles delivered to Iran^fi,^,.^ "Vgr -B -yQ 

David Jacobsen released. 

500 TOW missiles delivered to Israel 
(reolacrer.ts) . 



TOP SECRET 



Um^tfitD 



67 



TOP SECRET 



yffltl^iiiO 



-41/07/86 



CHRONOLOGY OF EVENTS: U.S. -Iran Dialogue 



aj s(^\^ 



1984 



1985 

Feb 14: 
Jun 14: 

Sep 1 : 



Michael Ledeen sugge«ts to the NSC that Israeli 
contacts may be useful in obtaining release of the 
U.S. hostages in Lebanon. Ghorbanifar is 
introduced to Ledeen and the NSC as an Iranian 
intermediary. 



Jeremy Levin escaped. 

TWA-847 hijacking. Last known instance of 
Iranian-supported terrorism against U.S. 
nationals. 



Sep 


%-• 


Sep 


14: 


Oct 


03: 


Nova'/ : 
Dec 20: 


Dec 


25: 


1986 


Jan 
Feb' 


06: 


Apr 


17: 


Apr 


22: 


May 


09: 


May 


15: 



50? TOW missiles delivered to Iran (Tabriz ?) 
Reverend Benjamin Weir released. 



Islainic Jihad claimed it murdered U.S. hostage 
William Buckley in retaliation for Israeli raids 
in Tunis 

Israel]^deliver*# 18 t|^ HAWK missiles to Iran 

Hostage Locating Task Force (HLTF) formed at CIA 



III Tt^ 
ie'l"aeliverW 18 H^ 




Nir became primary Israeli POC. 



Presidential Finding on Iran. 

U. S_. de livers 1^000 TOWs to Iran via Israel. 

U.S. hostage Peter Kilburn murdered in retaliation 
for U.S. raid on Libya. 

Ghorbanifar arrested in Switzerland for... 

Planning meeting at CIA. 

Terms of Reference (TOR) approved for establishing 
a strategic dialogue with Iran. U.S. objectives: 



Return U.S. hostages. 

End Iran-Iraq war. 

Establish a correct relationship with Iran. 



TOP SECRZT 
Declassify: OADR 



lff«;»S«SFI[D 



.1^3.-1 G.I^^J 






68 



ijimiissif![o 



N 5620 



TOP 


SECRET 




Zt-l6 
23: 


May 


24: 


May 


25-27: 


Jun 


10: 


Jul 


26: 


Aug 


03: 


Sep 


19-20: 


Oct 


03: 


Orjt 

Oct 


06: 


Oct 


26: 


Oct 


29: 


Nov 


02: 


Nov 


07: 



U.S. delivers 508 TOWs to Israel (replacements). 



McFarlare party to Tehran. Some of the 240 HAWK 
missile parts accompany the party. 

Rafsanjani news conference containing possible 
"signal" that Iran wanted improved relations with 
the U.S. 

Father Jenco released. 

Remainder of 240 HAWK missile parts delivered to 
Tehran. 

Discussions in Washington with new Iranian 
intermediary. 

White ;jiouse a pproves provi sion of intell igence to 
Iran 

U.S. representatives meet Iranian representatives 
in Europe. 

Franlcfurt meeting of U.S. and Iranian 
representatives. 

500 TOW missiles delivered to Iran^J^^.^ j'g^ ^ »Q 

David Jacobsen released. 

500 TOW missiles delivered to Israel 
(replacments) . 



TOP SECRET 



«N8l<^l«<f^tD 



69 



;^^ 



See Hearing Exhibit DTR-36 



70 



DRAFT 



c: 



.Paftia;iyi)erlaaifie>f/.''3lea gBL<i^IltMIIW CONTACTS MID THE AWMam MOSTACfS ' "^ 

■jnder pfovj: ,.is of £.1 i23Sff^'*rf/ 
■ 7 ' Pettefj^i:- :a; jecj.. Cruncil 

From the •arliast months follovin? th« Islamic revolution in 
Iran, the U.S. Govarnawnt has attanptad to raastablish official 
contact with that govarnnant in ordar to discuss stratagic 
davalopaants in that critical part of tha world and to try and 
ra«st«biial) a censtructiva working ralationahip. Bvan bafora 
Prasidant Raagaa saaa to offiea tha O.s. Gevamaant agraad to 
axpand security , acenesie, political, and intolliganca 
relationships at « paca aecaptabla to Tehran. Mhen tha secret \'' '^ 
Noveaber 1. 1979 SMeting in Algiers, between Brxesinski and Priaa C 
Minister Basargan, beeaaa public, radical aleaents in Tehran 
forced the ouster of the governiiMnt. That episode has influenced 
subsequent Iranian willingness to be engaged in any direct 
contact with the 08G. 

'o-y-^ Despite Iranian reluctance to en ter int o %^j^.>«^,.>.4p ^^th the 
use. our strategic interests Ji^Afc t^erTian Gulf mandate 
persistent efforts on or- ^^,^ ^^ ^^ ^^ establish « dialogue. 
In this regard j^^ ..otabla that only a few major countries 
do^not hsyy j^Txations with Iran — Egypt, Jordan, Morocco, 

TZmi., South Africa, and tha Onitad States. Even Iraq continues 
to have diplomatic relations. 

Iran, the key to a region of vital importance to the U.S., is 
increasingly threatened by growing Soviet military and political 
influence along its borders and inside its country. Tha 
increasing desperation brought on by the costs of the Iran-Iraq 
war further exacerbates Iran's vulnerability to growing Scvlat 
influence. Moreover, Soviet designs in Afghanistan and actual 
threats to Iran have mad e xeopeninq a strategic dialogue 
increasingly important. ^.^^^^^^^_^^^^^^^_^^^_ 




Since l»t3, various countries have Mde overtv 
Iran la an offogt to >ti«olef direct contact. 



to the O.S. *nd 



ISO overtt 



.jcpite a.S. willingness to proceed, none of 
h*v« sueceedod. 



Various individuals end private parties have likewise atteapted 
to be helpful aa iatarMdiaries i narrana i ao the rel ease of our 
citiseas hald hoatage is Lobaaon. 




TOP sECiurr 

Declassify I 



OADR 



TOP SECRET 



DRAFT^' 



71 



TOP SICMT 



mim^. 



DRAFT 




In l«t« 1914 , th« use was approached by a rapraaantativa of tha 
laraali govarnaant lOavid XiKha) , suggasting that thay had 
astabllthad a liaison ralationship with an Iranian axpatriata 
(lUnuchar Gorbanifar) in luropa who could aarva as an intar- 
aadiary in craating a diract contact. In addition to tha 
strategic poaaibilitiaa, this contact indicated that hia 
'sponsors* in Tehran could alao help to reaolva the Aaerican 
hostage situation in Beirut. 

The USG encouraged the laraelis to proceed with this contact 
determine whether or not it was valid. la Oeeaaber, UA*#^^ 
U.S. eatablishad an indirect contact with tha Ir^^ "^"**. the 
through a private O.S. citizen (llli liisl lild^ itu intamediary, 

Israeli official (AmiraiB Nir) . "'• ■ ■ '^*i») and a senior 

through tha National 5-- ; *"•«• contacts vara established 
ledge of appropri>i^"'r"^^y Council staff with tha full toow- 
meating witl-J?^* C**>in«t officers. Froai the very first 
^^^^^rfffTche Israelis and the Iranian, it was enphasized that 

"^ «»<* could not proceed with direct contact unless Iran renounced 

terrorism as an instruaent of State policy. 

In June of 19t5, in the aidst of the TWA-t47 hijacking, the 
Israeli officials in direct contact with the Iranian expatriate 
asked hia to use his influence with senior Iranian officials to 
obtain the release of the hijacked paaaengers. Two days after 
this approach, the four Aaericans held separately from tha rest 
of the hijacked passengers were freed and turned over to Syrian 
authorities. Mr. Refsanjani, in his apeech on November 4, 1986 
for the first publicly ad^^ted hix^ro] ~ . ^ . . 

Agai n,,^ t his eoQMfi^rflftji cmi^imtt 
dirafl^nrO< 




In Septeaber'^r tftST^tM lifielircaVIlia "^ai^hey were close 
to aehiavln« a breakthrough on tha hostage situation and advised 
that thay iataadad to pro c eed, oaleea we objected. Ifc is 
iaportaat tOMta-that tha 0,t. had lo«f »a«n jiwgfa of Israeli 
affo^Bte^lirataia discreet eoataet with Xraa aad to provide 
Iran with aaantaaca ia thair war with Iraq. Despite long-term 
O.S. efforta to eonviaea tha Israelis to desist, Israel continued 
to provide liaitad ailitary aad industriaX technology to Iran. 
The OSG judfad that tha Xsraalis would persist ia these secret 
deliveries, daspita oar objections, baeatta^ji^«L.b«MiBKl^t toA 



1^ ia thair si^ra 






TOF SECMT 



WMm 



DRAFT 



72 



«^: ?•"> 




DRAFT 

TQ» SlClttT 

Beirut by th. i^i^c Jih«d^r9«ftl,;ti;;. sJoSJy i^IlJti? 
the U.S. •equi«»«^in an IsrMli d«liv«rv of^litlrv^!»«-Tf:. 
(50 8 TOW.) to T.hr.n. U.S. '•cquiMCMcinin ^h?. T-!fIi "'^^^^"* 

•xi.tin« l.r««U eh«nn«l. with Tehran in iJ •JJoJ^JS I.SJu.h 
our oim .trata^ie dl.logu. with th« irMil! ;ovJJ«St! 

Il!f'^?lSiL*ikf^SJ*'J'Ki?r' *5L°«« -i-t*!".*! contact with 
tA« Zraniu) oxpatriat* and hold a aatt«r of aootinaa in ■ura«I 
all of which includod NSC and CZA ropraUBtiti^oi in adSttS! • 
tho laraali point of contact and thTSSJil! SwiJ. JJi"^ *' 
of fort* to convinco tho Zraaiana, thro««h thia ehlnnol to ooat 
_faco_-to-faco with tho A— riCMi* *»>— ^- * cn«inw* to — t 

I I^p538^^^WT!fa iho national 

Soeurity Advisor aot with ZsraSli officials •-* ^* Ir«ni»n 
contact to OMka claar tha natu^* '^ ««ur intarast in a dialect 
with Iran. At this im^**^ag, Mr. Mcfarlano statad that our 9oals 
war* as follows: 

■aSinq tha Iran- Iraq War on honorabla tanu. 

Convincing Iran to caaso its support for tarrorism and 
radical subvorsion. 

Bolping oasur* tho tarritorial intagrity of Iran and acting 
in coneort against Soviat activitias in tha rogion. 

Using thoir influoneo ovor radical groups in X.abanon to 
bring about tha rolooso of tha hostagas. 

In January, 1916, tho Frasidont approvad a eovart action Finding 
diracting that tha intolligonea coanunity procaad with spaeial 
activitias siaad st occoaplishiag tho goals sot forth abova. Tha 
osealstioa of toasieaa with Libya, iacloding tho April strika, 
provoatod furthor dialef«o froa taking plae* until tha Iranians 
eeataotad tbo iatocaadiary in lata April # 19f«. At that point, 
tho Zraaiaa oxpatriato advlBod «• that tho Idadorship in Tohran 
was psoparod to oohmrco a a o era t dlaleguo with tho Onitod ttatas 
along tho liaoa of ovr ootabliahod goals. 

On Nay IS, tho Vroaidoat avthorisod a socrot alasioa by forvsr 
Matiooal Security Adwlaer Nerarlano, aeeoapaniod by a CZA 
offieor, aaabors of tho MC otaff, aad tho Zsraoli and Zraaiaa 
iatorlocutora on a trip to tiahraa. Za ordor to oasuro 

DRAFT 



73 



TOP SfCMT 




DRAFT 



operation*! Mcurity, th« trip w«g aad* fron IsfmI, coincident 
with th« dclivary of « pallet of spar* parts tor Iranian 
dafansiva waapona ayatams (HAMX apara parta) . Oaapita promisaa 
of maatingi with top-laval Iranian officials, tha NcParlana trip 
did not fully achiava its daairad 9oala in that tha Iraniana did 
not produca top-laval officiala Cor tha aaatinga. 

Dospita thia ahorteoainf, lan«thy Matlnfa vara hald with 
■id-l«v«l Iranian offieiala during tha four-day trip, tha first 
diraet contact .batwaan tha two fovamaanta in ovmz aix yaars. 
NeFarlana and hia taaa wara abla to aatablish tha baaia for a 
furthar ralationahip and elaarly articulata our objaetivaa, 
conearna, and intentions. Tha group waa alee able to asssM ^^ 
first hand the internal political dynaaie in Tehran and 
effoct of th«^ar %Mph Xru -^ — 'y "in m ImnniBimif n i 
th« »resid«nti^y VpproveFT^Aa oF M^flfe« Jjll^rl^^ 
ro^ewad b«^ ap^«priata Cfltein«%oftiears, NeParX^»''^^^.7TId 
that our intereat in Iran transcended thetwj|ff^ but tha 
continued detention of hostmi UPft In uLsLatli to progress. 
The Iranians afflphasixji.>*rJ7^he U.S. embargo on hardware paid 
for by the Sti^ijf/tcr tor them, the aeat aignificant obstacle to 
lop roved rj^^ft^g . 



'On June 10, Majlis Speaker Kafsanjani, in a speech in Tehran made 
guarded reference to Iranian interests in improved relations with 

-the U.S. On July 26, Father Lawrence Jenco waa releaaad in the 
BeUca Valley and found his way to a Syrian sulitary checkpoint. 

At this point, the contact with tha Iranian expatriate bsgan to 
focus exclusively on the willingness of the USG to provide 
military assistance to Iran and we sought to establish different 
channels of comnunication which would lead us mora directly to 
pragmatic and medarata elements in the Iranian hierarachy. In 
late September, discussions were initiated in Washington with 
this close confidant of the man judged to be the most influential 
and pragmatic political figure in Iran <Rafaanjani) . Theae 
diacuasidns reaffixBad tha baaie objaetivea of tha U.S. in 
aaakiag a atratm^ic dialogue with Tehran. K» a confidence- 
building aaasttrm, the Omitrnd Itates providod liaitad intelligence 
to Xraa so that it would eontribata to ending thm Iran-Iraq war. 

Convincod of thm sorieasnaaa of O.t. iatantioaa* a aarias of 
•eatings ware held in turopa betiMaa O.t. and Iranian reprasan- 
tativas. During thaaa amsaioaa, the O.S. aid* cemaiatantly 
presented the heatagas aa an eabtaele to aor* rapid progreaa. Tha 
Iranians, for thair part, orgad that wm ta ke a aora acti ve role 
in aupport for tha Afghan rasistanc 




TPF SMCWMft 



W SECRET^ 



DRAF1 



74 



TOP SKCMTT 




DRAF1 



Th« Iranian* also 

7rott9fA, and the U.S. accepted, th« offer of a Soviet T-72 

tank captured fron Iraq. As a further dea»nftration of U.S. 

earnest, Israel provided Iran with an additional increment of 

defensive missiles on Octobet 29. 

L we ka«# that aoderate factions in 

rran prevailed over aore radteal elaaents to use their influence 
over the lisbellah, enabling the Woveaber 2 release of David 
Jaeeb««n. Jaeobsen's release was assisted by the efforts of 
Terry waits, who was on->scene ia Beirut wh«ii it occurred. 

This entire process was iatenapted by the radical wing in 
late-October when it revealed the contact with the OSG 
terms of the contact. The aoderate political leaders aof f^^^ 
constrained to settle their internal political probl^lr before 
proceeding with the budding relationship with the 0||^; f^^^ 
revelations in Tehran regarding the nrrirlsns ^^TfTiiii are deaon- 
strable evidence of the Inrsrnsl pmrn s' ll)i/ls The arrest of 
radical leader Mehdi BnbMnT'a close coi^tidant of Aytollah 
Montezari, for aejA,^ terrorisa and treason has exacerbated the 
internal eof^t^^:^. our problea with the hostages is also coapli- 
carjA t't "waning Iranian influence in Lebanon due in part to 
financial constraints and the fact that the Libyans are expanding 
their contacts with nore radical Hizballah elements. 

It is iaportant to note that since the initiation of the USG 
contact with Iran there has been no evidence of Iranian 
governaent eoaplieity in acts of terrorisa against the U.S. We 
believe that the Septeaber«Oetober kidnappings of Reed, Cicippio, 
and Tracy were undertaken in an effort to undermine the nascent 
U.S. -Iranian strategic dialogue and exacerbate the itnernal 
Iranian power struggle. Further, Rafsanjani's speech on November 
4 intentionally aisrepresented a nuaber of essential facts in 
order to preserve latitude for both parties. Throughout this 
process, the USC has acted within the lisuts of established 
policy and in . eoaplianee with all O.S. law. The shipaent of 
l.OOt TOMS and 23S IMMK missile parts was uadertaken under the 
previaioas of a covert actloe riadlag. All relevaat Cabinet 
Officers have beaa apprised threaaheot. The Congress was not 
briefed oa the covert action riadlag due to the extraordinary 
sensitivity of tha Xraalaa eontaets aad the potential conse- 
quences for our strategic poeltloa la Southwest Asia. Finally > 
our efforts to achieve tha raleasa of the hostages In Lebanoa 
aust continue to rely oa discreet contacts aad Intermediaries who 
cannot perform If ttey are rwealad. ^^^ 



^ -m 



tOF SKKgr 



!•' J 



tW^StCRET M. 



DRAFl 



TOP SECRET 



75 



<^-«^^^t(N(X?»JlR[pi^'^'^-"' 



In June of 1985, in the mid»t of the TWA-847 hijacking, the 
Itraeli officials in direct contact with the Iranian expatriate 
aa)(cd him to uie his influence with senior Iranian officials to 
obtain the release of the hijacked passengers. Two days after 
this approach, the four Americans held separately from the rest 
of the hi3ackf ;d_passengers were freed and turned over to. Syrian 
authorities. lj^BI^^^^||^^^|HIHH|^^H^^^HlriH I^ jiis 
Speaker Rafsanjani, who was travelling in the mid-east it the 
time, and Iranian Foreign Minister Velayati intervened with the 
captors. Rafsanjani, in his speech on November 4, 1986 for the 
first time publicly acknowledged his role in this matter. 

In September of 1985, the Israelis advised that they were close 
to achieving a breakthrough on the hostage situation and would 
proceed unless we objected. It is important to note that the 
U.S. had long been aware of Israeli efforts to maintain discreet 
contact with Iran and to provide Iran with assistance in its war 
with Iraq. Despite long-term U.S. efforts to convince the 
Israelis to desist, Israel continued to provide limited military 
and industrial technology to Iran. The USG judged that the 
Israelis would persist in these secret deliveries, despite our 
objections, because they believed it to be in their strategic 
interests. 

On August 22, 1985, the U.S., through the U.S. citizen inter- 
mediary, acquiesed in an Israeli delivery of military supplies 
(508 TOWs) to Tehran. We were subsequently informed that the 
delivery had taken place by the end of August, though we were not 
aware of the shipment at the time it was made. U.S. acquiescence 
in this Israeli operation was based on a decision at the highest 
level to exploit the existing Israeli channels with Tehran in an 
effort to establish an American strategic dialogue with the 
Iranian government. 

On September 14, 1985, Reverend Benjeunin 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 Westerner to ever meet directly with 
the Lebanese kidnappers. 

On October 4, 1985, Islamic Jihad announced that it had 'executed' 
Beirut Station Chief William Buckley 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 of natural 
causes. We have since substantiated this information in debriefs 
of Father Jenco and David Jacobsen, both of whom indicate that 
Buckley probably died on June 3, 1985 of pneumonia-like symptoms. 



TOP SECRET 



«l«LK8iro 



76 



CVncLp-tGT iq , Tbdm^\^ 'To 




:^'i^^:J..--- 



77 



hi-l 



See Hearing' Exhibit 95A 



78 



Ftum: ^S'^CM ""CP'^'A § |j J|j J ^^g 1 #| A I f*! ^T^ ^''-'^ ^^''^ 11/18/86 23:07:07 

To: NbClJ^ --'-PI'A 



iiLASSIFIED 



NO-r FROM: RCȣRT MCFARLANE 

Subject: Chronology 

**" Forwarding note from NSRCM --CPUA 11/18/86 23:06 

To: NSJMP --CPUA- JOHN M. POISDEXTER _-». 



/?-?3 



itdtfjfm? - 



Partially L)eci^3sifi^)d/Released on 
-- s^^^P^ .jpjjgr provicions of E 1235S 
NOTE FROM: ROBERT MCFARLANE • „ «„/ v . ■ o 1 

SUBJECT : Chronolo,y ''^ "• '^^2^^' ^^^'O^^l Security Council 

I hJ"ve just finished reading the chronology. Much of it is coining to me for 
the first time--priniarily the material on what went on between Jan-May ' 86--and 
I an not really able to comment on how to deal with that. 

It seems to me that I ought to limit my input to what I recall from my 
involvement before Jan '86 and then from the May meeting. In that context, I 
would recommend deleting all material starting on the 11/17 (2000) version at 
page three, penultimate para 'ii.e. In 1985, a orivate...) down through the 
third para on the following page (ending with. . .strategic dialogue with the 
Iranian government.) and replace with the following. 

"In July of 198S, during a visit to Washington, an Israeli diplomat 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 with them. The Iranians were described as comprising the 
principal figures of the government (i.e. Speaker of the Majlis Rafsanjani and 
Prime Minister Musavi) and as being devoted to a reorientation of Iranian 
policy . 

At this first meeting, McFarlane went to great length to draw out the Israeli 
diplomat as to why he found the Iranian proposal credible, given the events of 
the past 6 years. He 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 (i.e. by exposure of themselves in 
meetings with Israelis to compromise as well as by the tranfer of extremely 
sensitive intelligence on the situation (and political lineup) within Iran; 
information which was proven valid). 

en 
The Israeli asked for our position/agreeing to open 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 was conveyed back to the Israeli diplomat. 

Within days the Israeli called again on McFarlane. At this meeting, he stated 
that he had conveyed our position and that the Iranians had responded that 
recognizing the need for both sides to have tangible evidence of the bona 
fides of the other, that from their side they wanted us to know that they 
believed they could affect the release of the Americans held hostage in 
Lebanon . 

As a separate matter the Iranians stated that they were vulnerable as a gr 
and before having ^n)^ acp^oiu:^ <tf JWMa i^iV*W^f^<^^ change within Iran they 




79 



would noed to be substantial l4|il4itfef VI^IJiIIj ILWey would need to 
sec'ir"! rh» .ooperation of military and/or Revolutionary Guaro leaders. Toward 
this end, th#/ expressed the view that the most credible demonstration of 
their influence and abilities would be to secure limited amounts of US 
equipment. Tbe Israeli asked for our position toward such actions. 

Mr McFarlane elevated this proposition to the President at a -neeting within 
days that included the Secretaries of State and Defense and tne Director of 
Central Intelligen.ee. 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 tna^ible 
material, that 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. 

Within days (mid August_1 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 US government would be to an I-raeli transfer 
of modest quantities of material. McFarlane replied that to him, that would 
represent a distinction without a difference. The Israeli diplomat explained 
at great length that Israel had its own policy interests that wouli be served 
by fostering such a dialogue in behalf of the US but that a problem 
would arise when ultimately they needed to replace items rhipped. He asked 
whether at that time Israel would be able to purchase replacement parts. 
McFarlane stated that again, the issue was not the ability of Israel to 
purchase military equipment from the US--they had done so for a generation and 
would do so in the future--but rather the issue was whether it was US 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 DCI). Again the 
President stated that while he could imagine the day coming when we might 
choose to support such elements with material, he could not approve any 
transfer of military material at that time. This position was conveyed to the 
Israeli diplomat. 

On September 14,1985, Reverend Benjamin Weir ... (continue as written on page 4) 

(At end of para, insert the following) We subsequently learned that in late 
August the Israelis had transferred 508 TOW missiles to Iran. Later in the 
fall, other transfers of equipment were made between Israel and Iran although 
some of the items were returned to Israel. McFarlane conveyed these reports to 
the President who directed that we insist on a direct meeting with the Iranian 
interlocutors while expressing our pos iton against further arms transfers. A 
meeting was arranged to take place in London in early December. The President 
instructed McFarlane to represent the US at the meeting and to make two basic 
points: 1. That the US 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 US hostages, and 2. That we could under no circumstnces transfer 
arms to Iran in exchange for hostages. These points were made to the Iranian 
interlocutor. He replied that unless his circle of associates weu 
strengthened they could not risk going ahead with the exchanges .Mr . McFarlane 
acknowledged the position but stated we could not change our position and 
returned to Washington. He debriefed the President and appropriate Cabinet 
officers, recommending that no further action be pursued. He then left the 
government . 

(Note; Enter at the appropriate place, the following account of ROM's 
involvement in the May meeting.) 

advised 
In April, Mr McFarlane was contacted and / that further staff -level 
contacts had been pursued si^c^^J^ hacL^leit- ga^^xpaent that had led to an 



uimistFini' 



80 



Airargemenc for :he release of Che remaining hostages rf- u,«i« ask.^ i. .. < s 

W..H he pr.pared to «eec with r„.ian orfl^ials ro' :pen\he"po"i.t ""'^^^ 

d.a.oju,. He agrr-ed to d. so and traveled to Iran in late Hay to do J rr, .„ 



pick up with existing text). 

cc: NSAGK '---CPUA ALTON G. KEEL 



<!«> so. (Tl.en 



81 



uNcussra 



*■?.■< 



ijiuJyyMi^ 



82 



n-ji 



See Hearing Exhibit Singlaub-7 



83 



yNill3olf!E(l cS;-vf-«' 

O.S. /IRANIAN CONTACTS AND THE AMERICAN HOSTAGES ]l-^H 

From th« aarllcgt month* following the Islamic ravolution in 
Iran, th« 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 
wor)cing 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 - ■MHi0(met secretly with Bazargan at the 
request of the Iranians) 



? 




October-November 1979 
nor'Jialization of relations 



When these meetings and the secret November 1, 1979 meeting in 

Algiers, between Brzezins)ci 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 3B €<«T — 
D«claasifyi OADR 



unoer provicons of E.3. 12356 
by:3. Reger, National Security Council 



T OP SECRET 

OADR — N 

.3H)N!!ii."S!FI[ 




84 



-f©P-&EG«;T- 



yNCIi;,S.^!fFO 



N 42316 



Coimnunltt nations have b«com« th« principal aras luppllars 
to Iran — making Iran dependent on this source of supply In 
contending with an increasingly strengthened Iraq. This 
leads ua to the conclusion that the Soviets may well be 
attempting to pursue their o%m 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 fra« Afghanistan have made 
reopening a strategic dialogue increasingly ioportant. 

-V» SICRST. 




UMm 



85 



/?'7y 



See Hearing Exhibit OLN-24 



86 



TOt» SECRET 



1984 



11/07/86 
CHRONOLOGY OF EVENTS: U.S. -Iran Dialogue :S^ l^-'Q-^ 



UflOt*50«£TLL' 



1985 
Feb 14: 

Jun 14i 

Sep 1 i 

(^ » Sep 14 

Oct 03 

(p Nov-iV 

Dec 20 
Dec 25 
1986 
Jan 6 
\^V2;Feb 14 
Apr 17 

Apr 22: 
May 09: 
May IS: 



TOP SECR£T 
Declassify: 

:i'-Ii; De:!jssir;r.': clr^sf 



Michael Ledeen- suggests to tine NSC that Israeli 
contacts may be useful in obtaining release of the 
U.S. hostages in Lebanon. Ghorbanifar is 
introduced to Ledeen and the NSC as an Iranian 
intermediary. 



Jeremy Levin escaped. 

TWA-847 hijacking. Last known instance of 
Iranian-supported terrorism against U.S. 
nationals. 



sot TOW missiles delivered to Iran (Tabriz ?). 

Reverend Benjamin Weir released. 

Islamic Jihad claimed it murdered U.S. hostage 
William Buckley in retaliation for Israeli raids 

in Tunis 




Israel^deliverW 18 i|^ HAWK missiles to Iran 
Hostage Locating Task Force (HLTF) formed at CIA. 
Nir became primary Israeli POC. 

Presidential Finding on Iran. 

U. S_. d elivers 1^000 TOWs to Iran via Israel. 

U.S. hostage Peter Kilburn murdered in retaliation 
for U.S. raid on Libya. 

Ghorbanifar arrested in Switzerland for... 

Planning meeting at CIA. 

Terms of Reference (TOR) approved for establishing 
a strategic dialogue with Iran. U.S. objectives: 

Return U.S. hostages. 

End Iran-Iraq war. 

Establish a correct relationship with Iran. 



^ 



OADR 



). 12353 
:-■ C, .::Cil 



mmm 






87 



TOP SECRET 



uffcmiffitu 



N 5 618 



%L44^ May 23: 





May 


24: 




May 


25-2? 




Jun 


10: 




Jul 


26: 





Aug 


03: 




Sep 


19-20 




Oct 


:3: 




Oct 


06: 




Oct 


26: 


^ 


Oct 


29: 




Nov 


C2: 




Nov 


0--: 



U.S. delivers 508 TOWs to Israel (replacements) . 



McFarlane party to Tehran. Sore of the 240 HAWK 
missile parts accompany the party, 

Rafsanjani news conference containing possible 
"signal" that Iran wanted improved relations with 
the U.S. 

rather Jenco released. 

Remainder of 240 HAWK missile parts delivered to 
Tehran. 

Discussions in Washington with new Iranian 
intermediary. 




U.S. representatives meet Iranian representatives 
in Europe. 

Frankfurt meeting of U.S. and Iranian 
representatives. 

500 TOW missiles delivered to Iran^£^^,_^ Xsr^tQ 

David Jacobsen released. 

500 TOW missiles delivered to Israel 
(reolacr.er.ts) . 



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iiNwi^m 



88 



TOP SECRET 



yfrtMiiiO 



-11/07/86 



CHRONOLOGY OF EVENTS: U.S. -Iran Dialogue 



aJ s(^\'\ 



1984 



1985 
Feb 14! 
Jun 14: 

Sep 1 I 



Michael Ledeen sugqetts to the NSC that Israeli 
contacts may be useful in obtaining release of the 
U.S. hostages in Lebanon. Ghorbanifar is 
introduced to Ledeen and the NSC as an Iranian 
intermediary. 



Jeremy Levin escaped. 

TWA-847 hijacking. Last known instance of 
Iranian-supported terrorism against U.S. 
nationals. 



Sep 


%: 


Sep 


14: 


Oct 


03: 


Vw 


'•?-.« 


Nova</ : 


Dec 


20: 


Dec 


25: 


1986 


Jan 
Feb' 


06: 


Apr 


17: 


Apr 


22: 


M*y 


09: 


May 


15: 




50t TOW missiles delivered to Iran (Tabriz ?) . 

Reverend Benjamin Weir released. 

Islamic Jihad claimed it murdered U.S. hostage 
William Buckley in retaliation for Israeli raids 
in Tunis, i--^^ 

Israel^delivervv 18 ^^ HAWX missiles to Iran 

Hostage Locating Task Force (HLTF) formed at CIA 

Nir became primary Israeli POC. 



Presidential Finding on Iran. 

U. S_. d elivers 1^000 TOWs to Iran via Israel. 

U.S. hostage Peter Rilburn murdered in retaliation 
for U.S. raid on Libya. 

Ghorbanifar arrested in Switzerland for... 

Planning meeting at CIA. 

Terms of Reference (TOR) approved for establishing 
a strategic dialogue with Iran. U.S. objectives: 



Return U.S. hostages. 

End Iran-Iraq war. 

Establish a correct relationship with Iran. 



TOP SECRET 
Declassify: OAOR 



UffilSSSFIED 



V 



89 



TOP SECRET 

M^ 23: 

H«y 24: 

M*y 25-27: 

Jun 10: 



Jul 


fC-tft 
26: 


Aug 


03: 




19-20 


Oct 


03: 


Oct 


5-7 
06: 


Oct 


26: 


Oct 


29: 


Nov 


02: 


Nov 


07: 



umnssifiFa 



N 5620 



U.S. d«liv«rs 508 TOWs to Israel (replacements) . 

McFarlane party to Tehran. Some of the 240 HAWK 
missile p«rts accompany the party. 

Rafsanjani news conference containing possible 
•signal' that Iran wanted improved relations with 
ttm U.S. 

Father Jenco released. 

Remainder of 240 HAWK missile parts delivered to 
Tehran. 

Discussions in Washington with new Iranian 
intermediary. 

White ;jjouse approves prov ision of intel ligence to 
Iran 




U.S. representatives meet Iranian representatives 
in Europe. 

Frankfurt meeting of U.S. and Iranian 
representatives . 

500 TOW missile^s delivered to Iran^^^^.,^^ Har*^ 

David Jacobsen released. 

500 TOW missiles delivered to Israel 
(replacments) . 



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uimftWED 



90 



TOP SECRET 



\immm 



u.s 



N 5577 

11/13/86 0100 
(Maximum Version) 

/IRANIAN CONTACTS AND THE AMERICAN HOSTAGES /9'7V 



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 that critical part of the world and to try and 
reestablish a constructive working relationship. Even before 
President Reagan came to office the U.S. Government agreed to 
expand security, economic, political, and intelligence 
relationships at a pace acceptable to Tehran. When the secret 
November 1, 1979 meeting in Algiers, between Brzezinski and Prime 
Minister Bazargan, became public, radical elements in Tehran 
forced the ouster of the Bazargan government. That episode has 
influenced subsequent Iranian willingness to engage in any direct 
contact with the USG. 

Despite Iranian reluctance to enter into a relationship with the 
USG, our strategic interests in the Persian Gulf mandate 
persistent efforts on our part to try 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, the key to a region of vital importance to the IsX. , is 
increasingly threatened by growing Soviet military and political 
influence along its borders and inside its country. The 
increasing desperation brought en by the costs of the Iran-Iraq 
war further exacerbates Iran's vulnerability to growing Soviet 
influence. Moreover, Soviet designs in Afghanistan, pressure on 
Pakistan, and actual sxpssfeorder. strikes in Iran have mgde 
reopenirv 



7 




Since 1983, various countries have made overtures, to the U.S. and 
Iran in an effort to stimulate direct contact. 



these o 



espite U.S. willingness to procee 

ures have succeeded. 




Numerous individuals and private parties have likewise attempted 
to be helpful as intermediaries in..«£ranging the release of our 
citizens held hostage in Lebanon. 




TOP SECRET 
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OADR 



mmmm 



^ 



.^\\^^ 






91 



TOP SECRET 



ymp^ko 



!"• o5 78 




^-•.• 



In 1985, a private American citizen was approached by a 
representative o£ the Israeli governnent, who reported that they 
had established a liaison relationship with an Iranian expatriate 
in Europe who sought Israeli help in establishing contact with 
the U.S. Government. In acknowledging the need to demonstrate 
the bonafidcs of the officials involved, he. indicated that his 
"sponsors' in Tehran could also help to resolve the American 
hostage situation in Beirut. 

The Israelis analyzed this intermediary's background exhaustively 
in order to validate his legitimacy. This analysis led them to 
have extremely high confidence in his standing and genuine 
relationship to the highest Iranian officials. Based largely 
upon the Israeli evaluation and in recognition of the clear U.S. 
interest in a dialogue that might, over time, lead to the 
moderation of Iranian policies, in 1985, the U.S. established an 
indirect contact with the Iranian intermediary, through the 
private U.S. citizen and a senior Israeli official. These 
contacts were established through the National Security Council 
staff with the full knowledge of appropriate Cabinet officers. 
From the very first meeting with the Israelis and the Iranian, it 
was emphasized that the USG could not proceed with direct contact 
unless Iran renounced terrorism as an instrument of State policy. 

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, the four Americans held separately from the rest 
of the hijacked passengers were freed and turned over to Syrian 
authorities. Speaker of the Majlis, Rafsar.;ani, ir. his speech on 
November 4, 1986 for the first time publicly acknowledged his 
role in this matter. 

In September of 198S, the Israelis advised that they were close 
to achieving a breakthrough on the hostage situation and would 
proceed unless we objected. It is important to note that the 
U.S. had long been aware of Israeli efforts to maintain discreet 
contact with Iran and to provide Iran with assistance in its war 
with Iraq. Despite long-term U.S. efforts to convince the 
Israelis to desist, Israel continued to provide limited military 
and industrial technology to Iran. The USG judged that the 
Israelis would persist in these secret deliveries, despite our 
objections, because they believed it to be in their strategic 
interests. 



TOP SECRET 



UNBlKSIflED 



92 



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 onl y^esterner to ever meet directl y with 
the Lebanese kidna 



airectly v 



_ Sbo gtly aiteiT^u' i Ji^J^MLii ' sr 

the U.S. acquiesced TRTn Israeli delivery of military 
supplies (508 TOWs) to Tehran. U.S. acquiescence in this Israeli 
operation was based on a decision at the highest level to exploit 
the existing Israeli channels with Tehran in an effort to 
establish an American, strategic dialogue with the Iranian 
government. 

Throughout the remainder of 1985, the USG maintained contact with 
the Iranian expatriate. A number of meetings were conducted in 
Europe including NSC, CIA, Israeli, and Iranian representatives. 
From the outset, the U.S. side sought to arrange a direct meeting ^ 
with high-level Iranian officials. In December, 1985, the ' 
National Security Advisor met with the Israeli official and the * 
Iranian contact to make clear the nature of cur interest ir. a 
dialogue with Iran. At this meeting, Mr. McFarlane stated that 
our goals were as follows: 

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. 

He made clear that any such dialogue could not develop without 
the prior release of U.S. hostages. He also made clear that we 
could not engage in trading arms for hostages. 

In January, 1986, the President approved a covert action Finding 
directing that the intelligence connnunity proceed with special 
activities aimed at accomplishing the goals set forth above. The 
escalation of tensions with Libya, including the April 14 strike, ^». 
prevented further dialogue from taking place until the Iranians -,' 
contacted the intermediary (Gorbanifar) in late April, 1986. At ; 
that point, the Iranian expatriate advised us that the leadership 
in Tehran was prepared to commence a secret dialogue with the 
United States along the lines of our established goals. We ca^^*^ 
believe that the Iranians were stinulat^^^^^^^^h e conta ct by 
the murder hostage Peter Kilburn J^^BI^ll^^|HHl^ 
allegedly in retaliation for the U.S^raid on Libya^^Tn^^ranian 
expatriate told the NSC and CIA officers, who met with him, that 
the Iranians did not wish to be accused of any culpability in 
Kilburn 's death. 



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UNSIMStFIED 



93 



TOP SECRET 



miiww 



55SC 



On May 15, the President authorized a secret mission to Tehran by !^ 
former National Security Advisor McFarlane, accompanied by a CIA 
officer, members of the NSC staff, and the Israeli and Iranian 
interlocutors. In order to ensure operational security, the trip 
was made from Israel, coincident with the delivery of a '^aTlWt of ~ J-* 
spare parts for Iranian defensive weapons systems (HAWK spare 
parts) . At the specific of Iran, alias foreign documentation was 
obtained from the CIA. 

In the course of this four-day visit, lengthy meetings were held 
with high-level Iranian officials, the first -direct contact 
between the two governments in over six years. Mr. McFarlane and 
his team were able to establish the basis for a further relation- 
ship and clearly articulate our objectives, concerns, and 
intentions. The group was also able to assess first hand the 
internal political dynamic in Tehran and the effect of the war 
which Iran clearly can no longer win. Using Presidentially 
approved Terms of Reference, which had been reviewed and approved 
by appropriate Cabinet officers, McFarlane emphasized that our 
interest m Iran transcended the hostages, but the continued 
detention of hostages by a Lebanese group philosophically aligned 
with Iran prevented progress. During the visit, Mr. McFarlane 
made clear: 

that we fundamentally opposed Iranian efforts to expel us 
from the Middle East; 

that we tirmly opposed their use of terrorism; 

that we accepted their revolution and did not seek to 
reverse it; 

that we had numerous other disagreements involving regional 
policies (i.e., Lebanon, Nicaragua, etc.), but might also 
find areas of common interest (i.e., Afghanistan) through 
dialogue. 

The Iranians emphasized that the U.S. embargo on hardware paid 
for by the Shah was, for them, the most significant deterrent to 
improved relations. Mr. McFarlane concluded the visit by 
summarizing that notwithstanding Iranian interest in carrying on 
with the dialogue, we could not proceed in light of their failure 
to exert their influence to cause the release of the hostages. 

On June 10, Majlis SpeaJcer 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 
Be)c)ta Valley an d found hi s way to a Syrian military checJcpoint. p 
On August 3, a t planeloa"^ ^f electronic parts for Iranian ^ 

anti-aircraft defenses rH^IKQj^ssile sub-components) arrived in /• ^^. 
-Bandar Abbeas (from IsraelTT ~^^~^I^!;ilrr — ( , x/ 



TOP SECRET 



mmm 



94 



TOP SECRET 



mmmw 



N 5581 



In early August, 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, USAT [Ret.]) acting within the 
purview of the January CpvertAction Finding, made contact in 
Europe with a relitiveClf^^^^j of a senior Iranian official 
(Rafsanjani) . In earlyVgeptember , discussions were initiated in 
Washington with this close confidant of the man judged to be the 
most influential and pragmatic political £igure in Iran 
(Rafsanjani). These discussions reaffirmed the basic objectives 
of the U.S. in seeking a political dialogue with Tehran. We also 
provided intelligence designed to discourage an Iranian offensive 
and contribute to an Iranian decision to negotiate an end to the 
war. 

Through Au='w:Et, Septenber, and October, further meetings were 
held ir. Europe between U.S. and Iranian representatives. During 
these sessions, the U.S. side consistently insisted that the 
release of the hostages was a pre-requisite to any progress. The 
Iranians, for their part, urged that we take a more active role 




^ The Iranians also 

aroff ered, jand the U.S. accepted. Urn. 'm tt e v 0( a Soviet T-72 tank 
,^ a further demonstration of U.S. good 
Israel provideo^-Itan with an additional increment (500 TOW 
missiles) of these daf ewsiv^ weapons on October 29. 

Soon thereafter, the moderate faction in Iran prevailed over more _' 
radical elements to use their influence over the Hizballah, ' 
enabling the November 2 release of David Jacobsen. Jacobsen's ^^ / 
release was assisted by the efforts of Terry '..'aite, whc -as . ^ _ 
on-scene in Beirut when it occurred. 

The persistent U.S. effort to establish contact with Iran has 
intensified a power struggle in Iran between moderate elements 
(led by Rafsanjani) and more radical factions (under the overall /t^^ 
sponsorship of Ayatollah Montazeri) . In late October, radical MdAe 
supporters (of Montazeri) revealed the (Rafsanjani) contact with A/tfV 
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 A'cCfei 
provided a highly fabricated version of the McFarlane mission in >4«i/e 
his November 4 address to the masses. Moderate Iranian political i^- 
leaders now feel constrained to settle their internal political 
problems before proceeding with the U.S. relationship. The 



TOP SECRET 



mMm& 



95 



TOP SECRET 



mmmi 



5582 



.UC^' 



<f^.im-tu^ 



revelations in Tehran regarding the McFarlane 
strable evidence of the internal power strugg 
radical leader Mehdi Hashemi, a close confida 
Montezari, for acts of terrorisn and treason 
bated the internal conflict. Resolution of t 
situation is also complicated by waning Irani 
Lebanon due in part to financial constraints 
the Libyans are expanding their contacts with 
Hizballah elements. Despite these difficulti 
have maintained direct contact with the USG. 
and Iranian government representatives met ^ 
5-7 and again in Geneva on November 9-10 ^' 



I arCaemon 
: 'Arrest of 



missi 

nt y^Sr Aytollah 
has further exacer- 
he Lebanon hostage 
an influence in 
and the fact that 

more radical 
es, the Iranians 
U.S. (CIA and NSCr 
Germany on November 



^offt. 






f~- 



It is important to note that since the initiation of the USG 
contact with Iran there has been no evidence of Iranian 
government complicity in acts of terrorism against the U.S.* 

Throughout. zr.-.B process, the USG has acted witr.ir. the limits of 
established policy and in compliance with all U.S. law. The 
shipment of 1,^08 TOWs and 235 HAWK missile parts was undertaken 
under the provisions of a covert action Finding. The weapons and 
materiel provided under this program are in no way adequate to 
alter the balance of military power nor the outcome of the war 
with Iraq. They have, however, had a positive effect on the 
Afghan resistance and demonstrated the U.S. commitment to Iranian 
territorial integrity. 

All appropriate Cabinet Officers have been apprised throughout. 
^Vie Congress was not briefed on the covert action Finding due to 
the extraordinary sensitivity of our Iranian contacts and the "XffJ^ 
potential consequences for our strategic position m Southwest ^.y^y^A^c 
Asia.^ Finally, our efforts to achieve the release of the 
hostages m Lebanon must continue to rely or. discreet contacts 
a.-.d i.-.terr.ed. dries who car.not per for- if t.-.ey are revealed. 

• Note ; We believe that the September-October kidnappings of 
Messers. Reed, Cicippio, and Tracy were undertaken in an 
effort to undermine the nascent U.S. -Iranian strategic 
dialogue and exacerbate the internal Iranian power struggle 
against tlift_moderate faction with which we have been in 
contact. ( 



_^^^^ Contrary to speculative reports that these 
postages were taken in order to stimulate the acquisition of 
more arms, they were most likely captured in order to 
prevent the very rapproachment with Iran we are seeking. 



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DNC^niED 



96 



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uNWS^ffJ. 



N 8254 icf.y^ 



In June of 1985, in the midst of the TVA-847 hijacking, the 
Israeli officials in direct cont<ict with the Iranian expatriate 
asked him to use his influence wiith senior Iranian officials to 
obtain the release of the hijacJcod passengers. Two days after 
this approach, four Americans he.ld separately from the rest of 
the hijacked oassenger^rfer^frMedandturne^overtoSy^ 
authorities . 'J^Bm[|^^H^M^HHMB^I|^HHmB|HB|Bhaj lis 
Speaker R*fslH9«n^^JTOwl^^rayeiHn^i^cn^mia=5as^ae the ' 
time, and Iranian Foreign Minis/ter Velayati both intervened with 
the captors. Rafsanjani, in hxs speech on November 4, 1986, for 
the first tine publicly acknowledged his role in this matter. 

In September of 1985, the Israelis advised that they were close 



to achieving a breakthrough 
proceed unless we objected. 
U.S. had long been aware of 



their contact with Iran and would 
[It is important to note that the 
[sracli efforts to maintain discreet 
itact with Iran and to prcfvide Iran with assistance in its war 
wit"JN>Iraq. Despite long-teaTnU.S. efforts to convince the 
T-|irii'TY'T -~ •^"'.'Tr, rt.i. e 1" continuea'*fr&Va£gvi.'^g limited military 
and industrial technolo^' to Iran. The USGlua^Sfi^that the 
Israelis would persist ii these secret li I i m i i ii i ilTi p'l i "i' '"^"" 
objections, because they believed it to be in their strategic 
interests. 

On August 22, 1985, the U.S., through the U.S. citizen inter- 
mediary, acguie^d in an !sraeli delivery of military supplies 
(508 TOWs) to Tehran. We were subsequently informed that the 
delivery had taken place at the end of August, though we were not 
aware of the shipment at tie time it was made. U.S. acquiescence 
in this Israeli operation vas based on a decision at the highest 
level to exploit existing Israeli channels with Tehran in an 
effort to establish an American strategic dialogue with the 
Iranian government. 

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 Bnlasary of the Archbishop of Canterbury. To this date, 
Mr. Waite remains the onl^Jestern er to ever meet directly with 
the L ebanese kidnappers. 



On October 4, 1^85, Islamic Jihad announced that it had 'executed' 
Beirut Station Chief WilliaJn Buckley in retaliation for the 
October 1 Israeli air raid^n 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 4<aning, the Hizballah had not killed 



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uHwm 



e-i^, 



^ 



97 



TOP SECRTT 




N 8255 



Buc)cl«y; h« had in fact died sav '"^ months aarliar of natural 
causes. H« hava since substanti *^*^ ^^^* information in debriefs 
of Father Jenco and Oavid Jacob" •"' both of whom indicate that 
Buckley probably died on June 3. ^'85 of pneumonia- like symptoms. 

In late November 1985, the Isra«-^^*' responding to urgent 
entreaties from the Iranians, provided 18 ■■pTHAWX missiles to 
Iran in order to iaprove the st-**^^ defensei around Tehran. The 
Israeli delivery of HAWK missi>*« raised U.S. concerns that we 
could well be creating misunde rstandings in Tehran and thereby 
jeopardizing our objective of arranging a direct meeting with 
high-level Iranian officials. *y "utual agreement of all three 
P«rties, these missiles were ■uk>«*gu«ntly returned to Israel in 
February 1986. On December f'-8» 1985, the National Security 
Advisor met (in London) with ^^* Israeli official and the Iranian 
contact to make clear the ne*^"re of our interest in a dialogue 

wUth Iran. At this meeting ' ^- McFarlane stated that our goals 

werfei^a* follows: 

Devising a formula for re-establishing a strategic 
relationship with Tehran. 

Ending the Iran-Iraq vj^r on honorable terms. 

Convincing Iran to (:ease its support for terrorism and 
radical subversion. 

Helping ensure the ti.j-ritorial integrity of Iran and 
coordinating ways in „hich we might counter Soviet 
activities in the rec,jj^Qj^_ 

Mr. McFarlane made clear t.^at a Western dialogue with Iran would 
be precluded unless Iran vt^j-e willing to use its influence to 
achieve the release of We!«;tern hostages in Beirut. He also made 
clear that we could not an(j would not engage in trading arms for 
hostages. 



On January 17, 1986, the 
Finding directing that the 
special activities aimed 
above. In accord with extj 
that the Director of Centrl 
the Finding to the appropr 
reasonably sure that the 1 
operation (both U.S. and £( 



resident approved a covert action 
intelligence community proceed with 

t aceonplishing the goals set forth 
nt statutes, the President directed 
1 Intelligence refrain from reporting 
ate connittees of the Congress until 
ves of those carrying out the 
reign) would not be in jeopardy. 



On February S-7, U.S. officl 
representative of the IsraeJ 
senior-level Iranitm officii 




and a 



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Ui|gt»t' 



> 

"^y 



98 



/I-?? 



See Hearing Exhibits OLN-19 and JMP-95 



99 



H'Jf 



See Hearing Exhibits OLN-20 and JMP-96 



100 



Tz^: ^$^Cn --CP<^A ||a.^a ■f|Airi}*1%'"*^ ^^'"* 11/18/86 23:07:07 

. .0. .^. UNuLASSIFIED 

NOT' TRON: SOIUT HCFAELANE r * v^ 

Subject: Chronology 

**=» Forwarding not* fro« NSRCM --CPUA 11/18/86 23:06 *** 

To: NSJMP --CPUA- JOHN M. POISDEXTER -, ^ 

^^^^^^ Paftic!!.' Jeclassified /Released m kUtlf/ft^ 

NOTE FROM: ROBERT MCFARLANE " "^ „ ,'"f P^i'^^^ °* ^.0. 12356 

SUBJECT: Chronology "y 3. Reger. National Security Council 

I h*ve Just finished reading the chronology. Much of it is coning to me for 
the first time--primarily the material on what went on between Jan-May '86--and 
I an not really able to comnent on how to deal with that. 

It seems to me that I ought to limit my input to what I recall froa ny 
involvement before Jan '86 and then from the May meeting. In that context, I 
would recommend deleting all material starting on the 11/17 (2000) version at 
page three, penultimate para i\.%. In 198S, a orivate...) down through the 
third para on the following page (ending with. . .strategic dialogue with the 
Iranian government.) and replace with the following. 

"In July of 198S, during a visit to Washington, an Israeli diplomat 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 with them. The Iranians were described as comprising the 
principal figures of the government (i.e. Speaker of the Majlis Rafsanjani and 
Prime Minister Musavi) and as being devoted to a reorientation of Iranian 
policy. 

At this first meeting, McFarlane went to great length to draw out the Israeli 
diplomat as to why he found the Iranian proposal credible, given the events of 
the past 6 years. He 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 cake personal risks (i.e. by exposure of themselves in 
meetings with Israelis to compromise as well as by the tranfer of extremely 
sensitive intelligence on the situation (and political lineup) within Iran; 
information which was proven valid). 

en 
The Israeli asked for our position/agreeing to open 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 was conveyed back to the Israeli diplomat. 

Within days the Israeli called again on McFarlane. At this meeting, he stated 
chat he had conveyed our position and that the Iranians had responded that 
recognizing the need for both sides to have tangible evidence of the bona 
fides of the other, that from their side they wanted us to know that they 
believed chey could affect the release of the Americans held hostage in 
Lebanon . 

As a separate matter the Iranians stated that they were vulnerable as a gr 
and before having ^"% Btf SIV^ ^ ^JfM f^lT^ffV^^"^' change within Iran chey 




101 



wocld n*ed '.o be subscant lal li|4:l4»^^|r\r4;\P'l|3 ILllcy would nt«d to 
<«c'ir^ rht .oop«r«tjon nt «ilit«ry «nd/or R«volution«ry Guaru Uadcrs. Toward 
thv* «nd, ch*/ txprtsstd th« vi«w that tha mo»t cradibla daBf^niwration of 
thair influanca and abilitiaj would b« to sacura limitad amounts of US 
•quipnant. Tba Israali askad for our position toward such actions. 

Mr McFarlana alavatad this proposition to tha President at a meeting within 
days that included the Secretaries of State and Defense and tne Director of 
Central Intelligence. The President stated that while he could understand 
chat, assuiBing the legitimacy of the interlocutors, they would be quite 
vulnerable and ultimately might deserve our support to include tna^ible 
material, that 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. 

Within days (mid August^ the Israeli diplomat called once more to report that 
the message had been conveyed and that an impasse of confidence existed. He 
asked what tha position of tha CS government would be to an I'raeli transfer 
of modest quantities of material. McFarlana replied that to him, that would 
represent a distinction without a difference. The Israeli diplomat explained 
at great length that Israel had its own policy interests that wouli be served 
by fostering such a dialogue in behalf of the US but that a problem 
wo'ild arise when u.'tioately they needed to replace items rhipped. He askf.d 
whether at that time Israel would be able to purchase replacement parts. 
McFarlana stated that again, the issue was not the ability of Israel to 
purchase military equipment from the US--they had done so for a generation and 
would do so in the future--but rather the issue was whether it was US policy 
to ship or allow others to ship military equipment to Iran. The Israeli asked 
for a position from our government. McFarlana elevated the question to the 
President (and to the Secretaries of State and Defense and the DCI). Again the 
President stated that while he could imagine the day coming when we might 
choose to support such elements with material, he could not approve any 
transfer of military material at that time. This position was conveyed to the 
Israeli diplomat. 

On September 14,1985, Reverend Benjamin Weir. .. (continue as written on page 4) 

(At end of para, insert the following) We subsequently learned that in late 
August the Israelis had transferred 508 TOW missiles to Iran. Later in the 
fall, other transfers of equipment were made between Israel and Iran although 
some of the items were returned to Israel. McFarlane conveyed these reports to 
the President who directed that we insist on a direct meeting with the Iranian 
interlocutors while expressing our positon against further arms transfers. A 
meeting was arranged to take place in London in early December. The President 
instructed McFarlane to represent the CS at the meeting and to make two basic 
points: 1. That the US 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 US hostages, and 2. That we could under no circumstances transfer 
arms to Iran in exchange for hostages. These points were made to the Iranian 
interlocutor. He replied that unless his circle of associates weu 
strengthened they could not risk going ahead with the exchanges .Mr. McFarlane 
acknowledged the position but stated we could not change our position and 
returned to Washington. He debriefed the President and appropriate Cabinet 
officers, recommending that no further action be pursued. He then left the 
government . 

(Note; Enter at the appropriate place, the following account of RCM's 
involvement in the May meeting.) 

advised 
In April, Mr McFarlane was contacted and / that further staff-level 
contacts had been pursued ^inge tu ^^leit^ |a^yiBt"t chat had led to an 



ilBMrp" 



102 



ir4.-geinenc for :he release of Che remaining hostages, rfe was asked whethe?-^e 
r>'l- be propared to meet with Iranian otficials ro open the political 
Jalogu*. He agreed to d-. so and traveled to Iran in late Hay to do so. (Tl.en 
ick up with existing text). 



d 

P 

cc: SSAGK 



-CPfA 



ALTON G. KEEL 



103 



MNCUSSIFIED 

o 



ijiU-.'^Mluj 



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14)4 



mmm 



/^5'G?(o7 



November 18, 1986 



CHRONOLOGY OF EVENTS; U.S. -Iran Dialogue 



1984 



1985 

Feb 14: 

Jun 14; 



Aug 


30: 




Sep 


01: 




Sep 


14: 




Oct 


04: 




Nov 
Nov 


24: 


-.9 


Dec 


06- 


08 


Dec 


20: 




Dec 


22: 




Dec 


23: 





Michael Ledeen suggested to the NSC that Israeli 
contacts may be useful in obtaining release of the 
U.S. hostages in Lebanon. Ghorbanifar was 
introduced to Ledeen and the NSC as an Iranian 
intermediary. 



Jeremy Levin escaped. 

TWA-847 hijacking. Iranian government officials, 
contacted by Israelis and Ghorbanifar, help in 
obtaini-g the release of four Ainericar.s held 
separately from the^,rest of the hijac:<ed passen- 
gers. Last known instance of Iranian influenced 
group perpetrating terrorism against U.S. nationals. 

508 TOW missiles delivered to Iran from Israel. 



Reverend Benjamin Weir released. 

Islamic Jihad claimed it murdered U.S. hostage 
William Buckley in retaliation for Israeli raids 
in Tunis. 

Meetings in London with Waite arc Ghcri:ar'.i*'?.r . 

L8 HAWK missiles to Iran. ■■ 



^^rael delivers li 



Meeting in London with. . . . 

Hostage Locating Task Force (HLTF) formed at CIA. 



Ghorbanifar to U.S. for talks with U.S. officials.. 



Nir became primary Israeli POC. 



..n>^i 



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Declassify: OADR 







105 



TOP SECRET 



2 



5668 



1986 

Jan 06: 

Feb 05-07; 



Feb 19-21; 



w^ 



ff..^-..> <i 



Feb 20-21; 






Apr 17: 
Apr 22: 

May 09: 

May 15: 

Mav 22-28; 



May 24: 
May 25-27; 

Jun 1 : 



Presidential Finding on Iran. 

Meetings in Geneva with Nir and Ghorbanifar (CIA 
and NSC) . 

tinos in London and Frankfurt (Ghorbanifar ^B 



U.S. delivers 1,000 TOWs to Israel. 

1,000 TOWs delivered to Tehran from Israel. 

U.S. hostage Peter Kilburn murdered in retaliation 
for U.S. raid on Libya. 

Ghorbanifar arrested in Switzerland for indebtness 
apparently related to the FBI s-ing of arrs sales 
tc Iran by private citizens frc" the U.S., 
Germany, and Israel. 

Planning meeting at CIA. 

Terms of Reference (TOR) approved for establishing 
a strategic dialogue with Iran. U.S. objectives: 

Establish a correct relationship with Iran. 
End Iran-Iraq war. 
Return U.S. hostages. 




Meetings in Londo; ; (| 
Tel Aviv (Nir and Rabin) 



and 



resiacer 



1^ 



McFarlane party to Tehran. Some of the 240 HAWK 
missile parts accompany the party. 

Rafsanjani news conference containing possible 
"signal" that Iran wanted improved relations with 
the U.S. 



Jun 30-Jul 02: Ghorbanifar in U.S. for discussions with CIA and 
NSC. 



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•■ym\ 



106 



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TiLu 



^669 



Jul 26-28: 

Jul 26: 
Aug 03: 

Aug 06: 
Aug 10: 

Sep 19-20: 

Sep 22-23: 

:=t 03: 

Cct 05-07: 
Oct 26-28: 



Meetings in Frankfurt (Ghorbanifar , Nir, NSC, and 
CIA) . 

Father Jenco released. 

Remainder of 240 HAWK missile parts delivered to 
Tehran. 

Frankfurt meetings. 

Initial contacts witl^^flp 

Madrid and London. ""^ — ' 

Discussions in Washington with new Iranian 
intermediary (NSC and CIA) . 

Meetings in London (CIA, NSC with Nir) , 




Frankfurt meetings (CIA, NSC 



Frankfurt (Mainz) meetings of U.S. and Iranian 
?.res entatives (CIA, NSC, Israeli rep [Nir], and 



Oct 29: 
Nov 2 : 
Nov 5-07; 
Nov 07: 



500 TOW missiles delivered to Iran from Israel. 

David Jacobsen released. 

Meetinos in Geneva withOHHi "^NSC and CIA) . 



500 TOW missiles delivered t= Israel 
(replacements) . 



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UNtUi^yilEO 



107 



TOP SECRXT 







_j Despite thes« internal aifficulties and 

attendant publicity in the Western media, the Iranians continue 
to maintain direct contact with the USG and met agaiiv-iJi-Ceneva 
on November 9-10 with NSC and CIA representatives. 



Zt is important to note that since the initiation of the USG 
contact with Iran there has been no evidence of Iranian govern- 
aent complicity in acts of terrorism against the U.S. We believe 
that the September-October kidnappings of Hessers. Reed, Cicippio, 
and Tracy were undertaken in an effort to undermine the nascent 
U.S. -Iranian strategic dialogue and exacerbate the internal 
Iranian power struggle against the moderate faction with which we 
have been in contact. 




^__^^^ Contrary to speculative reports that these hostages 
w^i'A caken in order to stimulate the acquisition of more arms, 
they were most likely captured in order to prevent the very 
rapproachment with Iran we are seeking. 

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 parts was 
undertaken under the provisions of a covert action Finding. 

During the course of this operation -- and before -- the U.S. was 
cognizant of only two shipments from Israel to Iran. 
Specifically, 

The Israelis acknowledged the August 1985 shipment of 508 
TOWs after it had taker, place. '.'r.til we were advised by tr.e 
Israelis, and had the information subsequently confirmed by 
Iranian authorities, we were unaware of the composition of 
the shipment. We subsequently agreed to replace these TOWs 
in )Uy of 1986. 

The October 1986 shipment of 500 TOWs from Israel to Iran 
was undertaken with U.S. acquiescence. These TOWs were 
replaced on November 7. 

The November 1985 shipment of 8 Israeli HAWK missiles was 
not an authorized exception to policy. This shipment was 
eventually retrieved in February 1986 as a consequence of 
U.S. intervention. 



TOP SECR£T 



uNMtsyie 



108 



n-^ 



See Hearing Exhibit OLN-24 



I 



109 



CHAPTER 20. NOVEMBER 1986: THE ATTORNEY GENERAL'S INQUIRY 



110 




slflEO 30-3 



Appointmenc Schedule 

Admiral Pomdexter Phone Calls 

November ;i, 1986 







^October 










November 










December 






s 


M 


T W T 
1 2 


3 


S 


S 


M 


T W T 


F 


S 

1 


S 


M 

1 


T W T 
2 3 4 


F 
5 


S 
6 


5 


6 


7 3 9 


10 




2 


3 


4 5 6 


7 


8 


7 


3 


9 10 11 


12 


13 


12 


13 


U 15 16 


i: 


18 


9 


10 


11 12 13 


U 


15 


14 


15 


16 17 18 


19 


20 


19 


20 


21 22 23 


2-i 


25 


16 


17 


18 19 20 


21 


22 


21 


22 


23 24 25 


26 


27 


26 


-' 


28 29 30 


31 




23 
30 


24 


25 26 27 


28 


29 


23 


29 


30 31 







Friday 



7 : 20AM 


9 


22 AM 


10 


>0AM 


11 


16 AM 


11 


25 AM 



Talked with Director Casey on Secure 
CPL-AG Meese (before you s ee the President) 
O r"t jAdm. S tans fie Id Turner | 
CPL J 

-»t.-General SecorC 
REMINDERS 

- Call Dr. Brzezinski^P^^^^^^^rudy) 

- Call Jeane Kirkpatri 

- Call Brent Scowcrof^^^^^^^^^^Eva) 
CLTSTANDING 
ll/18-Judge Clarkj 




under proviswns of F tJwT"^^^^ 



November 21, 1986 



U\<^li) 



Page I of 1 



UiyiSSIFIED 



Ill 




tiNtysiyBED 



AopointBanc Sch«dul« 

Adairal Poindtxttr 

Nov«ob«r 21, 1986 






Octqbar 

S M T W. T r S 

I 2 3 i 

5 6 7 8 <* 10 U 

12 13 U 15 16 17 18 

19 20 21 22 23 24 25 

26 27 28 29 30 31 



Nov«mb«r 

S M T W .T F S 

« 1 

2 3 4 5 6 7 8 

9 10 11 12 13 14 IS 

16 17 18 19 :0 21 22 

23 24 25 26 27 28 29 

30 



0«c«rab«r 

S M T W T F S 

12 3 4 5 6 

7 8 9 10 11 12 13 

14 15 16 17 18 19 20 

21 22 23 24 25 26 27 

28 29 30 31 



Friday 



11/21 



7.: 30AM 

8:00AM 

9:00AH 

10:00AM 

10 : 30AM 

10 :45AM 

11:25AM 

11:30AM 

12:ISPM 

1:00PM 

1:2:PM 

1:30PM 

1:43PM 

1:55PM 

2:25PM 
3:30PM 

NOTES: 



10:30AM 
10:30AM 



50AM 
30AM 
15 PM 
25PM 
27PM 
53PM 
43PM 
00PM 
58PM 



2:32PM 

4:20PM 



Hous* B«nB«n«nc S«l«cc Coomicc** on Intalliganc* • Sic ttm 
DOM (McO«ni«l to acctnd) 

Stnac* S«l«c,c Conaitc** on Inctlligtnc* • Sic Ra 
(P/MC( w/Sanacors Robarc Oola & Rebate Byrd - Oval) 
P/NSB (Kaal handlad) 

P/Phoco-Op w/Pras Namphy of Haici • Oval (Kaal handlad) 
Don Regan's ofe co saa Larry Spaakas 
Prasidanc (Oval) 
Racurnad wich AG Maasa 
P/Mcg w/Sac Wainbargar • Oval 
Ron Sabla & Paul Thoapson 
(P/Photos w/Daparcing Ambassadors • Oval) 
(P/Photos w/CS Ambassadors * Oval) 

Phoco w/Richard Lavina, Sylvia Lavina, oochar & Axm Oiafflond, 
Aunc 

Norch 




w71 



honpson 



P/C 



Novaabar 21, 1986 



Partially Declassified/Released on _t/ Fe^ p^^ 
under ofoviswns ol E 12356 ' 
by K Jonnson, Naticnsi Security Council 




qqtpD 



Paga 1 of 1 



mMsmn 



112 













113 



QO'3^ 



See Hearing Exhibits OLN-69A, JMP-81, and DTR-5 



114 




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115 




116 







Q0'S(9 



7/26/87 
12:18 p. 



CHRONOLOGY OF 

NOVEMBER 20-25, 1986 

JUSTICE DEPARTMENT INQUIRY 



Thursday, November 20. 

8: 45 a.m. - 9:00 a.m. : 

Meese joins staff meeting with Cooper and 
Richardson. 

- (pre-10:15 a.m.): 

Meese calls Casey. 

12:00 p.m. - 1:15 p.m. : 

Meese, Cooper, Reynolds, Bolton, Richardson- have 
luncheon meeting re: Casey testimony. 



4 - 

I -si:! 



cQ <a> oj 
To "S « 

a 9 cn 



1: 30 p.m. 



3:27 p.m. 



- 3:00 or 3: 30 p.m. : 

Meese, Casey, Gates, Poindexter, North, Cooper, 

and Thompson meet in Poindexter 's office re: Casey_ 

testimony. Cooper discovers discrepancy in 

testimony. 



Burns returns ^a call from Sofaer, who advises him 
of problems with Casey testimony. 



3:50 p.m. - : 

Burns tells Sofaer that the Attorney General has 
been advised of problems, but that Meese is aware 
of facts that explain everything. 



3: 30 p.m. 



6: 30 p.m. 




- 5:45 p.m.: 

Cooper is called into Wallison's office, with 
Thompson. Sofaer calls during meeting to say 
there is a problem with Casey's testimony. 
Sofaer tells Cooper he has spoken to Burns and is 
not satisfied with the response. 

- 7: 00 p.m. : 

Sofaer calls Cooper about his concerns. Tells 
Cooper of contemporaneous State Department notes 
contradicting Casey's proposed testimony. Sofaer 
threatens to have the State Department (testifying 
with Casey) dispute any false statements made at 
the hearing and also says he will resign unless 
testimony corrected. 



NCLASSIFIED 



117 



Mmsm 



10:30 p.m. - 11:00 p.m. : 

Cooper calls Meese at West Point and passes on 
concerns, including existence of State DepartmerVt 
notes. Meese agrees that more serious inquiry 
in order and says he will return to Washington. 
Instructs Cooper to call Poindexter. 

11:00 p.m. - : 

Cooper calls Poindexter and states that testimony 
cannot go forward as is. Poindexter states that 
he had tried to reach Casey who was too groggy to 
discuss the matter. 

11:26 p.m. - : 

Cooper advises Sofaer that he has spoken to Meese. 



Shultz advises Reagan that some Administration 
statements will not stand up under scrutiny. 



Friday, Moveaber 21. 

7: 20 a.m. - : 

Casey speaks to Poindexter. 

I 8: 00 a.m. - 8: 30 a.m. : 

Cooper meets with Casey and Doherty re: testimony. 
Casey accepts revisions without comment. Jameson 
whispers to Cooper that there is evidence that 
the pilot knew there was military equipment on 
November 1985 shipment. 

8:30 a.m. - : 



DOJ staff meeting. Weld argues for Criminal 
Division inquiry. 

9:00 a.m. - : 

Casey testifies before House Intelligence 
Committee. 

9:15 a.m. - 10:45 or 11:15 a.m.: 

Meese, Burns, Reynolds, Cooper, Richardson meet. 
Meese decides to go to the President and recommend 
that he be commissioned to gather the facts. 

9:22 a.m. - : 

Meese calls Poindexter on secure phone and 
advises that he will ask President to authorize 
fact-finding. Requests that Regan and Poindexter 
join him at meeting with Reagan. , 



It? 



ONClASSinED 



118 



i/NMsm 



11:00 a.m. 



McFarlane meets with Ledeen at Ledeen's hous^." 
North arrives at 12:30 p.m. and meets with Ledeen 
for 5 minutes. McFarlane drives North downtown 
during which time North expresses concern that 
President be protected and tells him that he will 
have a shredding party. 



11:17 a.m. 



Meese receives call from Poindexter. 

11:25 a.m. - : 

Secord calls Poindexter. 

11: 30 a.m. - 3:00 p.m. : 

Casey testifies before Senate Intelligence 
Committee. 

11:30 a.m. - 12:15 p.m.: 

Reagan meets with Meese, Regan, and Poindexter to 
discuss need for complete overview. Meese 
assigned task and told to report to NSPG on 11/24 
at 2:00 p.m. 

12:15 p.m. - 12:25 p.m.: 

Meese and Poindexter meet. According to Robert 
Earl, North also meets with Meese, and asKs 
whether he has 24 or 48 hours. 

12:29 p.m. 



Poindexter calls North. 

12:45 p.m. - 1:45 p.m.: 

Meese, Reynolds, Cooper, Richardson, and Bolton 
(?) have lunch. Meese assembles a team of lawyers 
"who had experience in this type of matter" and 
makes list of those to talk to. 

1:30 p.m. 



North meets with Poindexter. 

1: 45 p.m. - 2: 15 p.m. : 

Meese has "discussion" with Webster and they 
"agree" that the situation is not criminal in 
nature and therefore it is not appropriate to 
involve the FBI. 

2:15 or 2:25 p.m. - 2:55 p.m.: 

Meese, Reynolds, Cooper, Richardson, Bolton, and 
Eastland meet. Bolton briefs them on Casey 
testimony. Reynolds' notes of meeting indicate 
diversion of TOW missiles to contras is discussed. 



^m hmm 



119 



wussife 



2:25 p.m. - 2: 32 p.m. : 

North meets with Poindexter. After this meeting* 
or the one at 1:30 p.m.. North returns to his 
otfice, and directs Fawn Hall to alter documents. 

2: 28 p.m. - : 



Meese calls McFarlane. 

2: 58 p.m. - 3:00 p.m. : 

Meese calls Poindexter on secure phone. Advises 
Poindexter that he will send over a "couple of 
his people" to review documents. Thereafter, 
Poindexter speaks to Thompson and North. North 
indicates he will destroy notebook. Poindexter 
does not try to stop him. Subsequently, 
Poindexter destroys December 5, 1985 finding on 
previous arms shipments to Iran. 



Cooper calls Thompson, 



3:15 p.m. 



Ledeen visits North in North's office. North- 
asks Ledeen what his story will be about the 
November HAIVK shipment. Earlier North tells 
Ledeen that a source at the Department of Justice 
had advised him to get a lawyer. 

3:30 p.m. - 5:35 p.m.: 

Meese and Cooper interview McFarlane and they 
discuss finding. According to McFarlane, Meese 
apparently volunteers that oral finding 
sufficient; according to Cooper, there is no 
discussion of oral finding. There is no mention 
of either the diversion or the shredding party. 
As McFarlane leaving, he speaks to Meese alone, 
expressing view that President fully behind 
Iranian initiative and, according to Cooper, a 
desire to protect the President. 

5:30 p.m. - 7:30 p.m.: 

North and Hall destroy documents. 

5:45 p.m. - : 



McFarlane phones North from outside the Department 
of Justice and tells him about his interview with 
the Attorney General. North tells McFarlane he 
has been urged to get an attorney and warned that 
his phone may be bugged. 



UNcussra 



120 



UNCLASSIFIED 



McFarlane calls Sofaer and Shultz seeking copies 
of State Department notes relating to 1985 artrfs 
shipments. 



North meets with Green. 



6: 09 p.m. 



Meese receives call from Webster. 



6:20 or 6:25 p.m. - 6:40 or 6:45 p.m.: 

Meese» Cooper, Reynolds, and Richardson meet 
Bolton joins the meeting from 6:30 to 6:35 p.m. 

6: 55 p.m. - 



Meese calls Weinberger. 



7:05 p.m. 



Meese calls Casey. 



Shultz calls Meese; Interview is arranged for 
next morning. 



Richard Miller drives North to Green's office. 
Either on this drive or previous day, North tells 
Miller Meese has advised him to retain counsel. 



Saturday » Noveoiber 22. 

2:00 a.m. - 7:00 a.jn._ 
McGinnis/ 



8:00 a.m. - 9:20 a.m.: 

Meese and Cooper interview Shultz, with Charlie 
Hill present. 

9i30 a.m. - 



Gates speaks to Polndexter on secure line. 

9:45 or 9:50 a.m. - 10:00 a.m.: 

Meese meets with Cooper. 

9:50 a.m. - : 



North speaks to Poindexter. 



9:55 a.m. - 



Casey calls Meese. 




IIU 



00 



121 



Mmmiu 



10:00 a.m. - 10: 30 a.m. : 

Meese, Cooper, Reynolds, Richardson meet. 

10:15 a.m. - : 



Meese speaks to Poindexter. 



10:40 a.m. - 



Meese calls Thompson (for Cooper) 



10:45 a.m. - 



Meese calls Poindexter. 

10:58 a.m. - 11:07 a.m. : 

Poindexter speaks to Bush. 

11: 10 a.m. - 12:45 p.m. : 

Meese and Cooper interview CIA General Counsel 
Sporkin. 

11:38 a.m. - : 



Poindexter speaks to Casey. 



12:05 p.m. - 



Reynolds and Richardson examine NSC files. Paul' 
Thompson and Bob Earl present. DOJ officials 
review documents "presented to them" and have 
copies made of those considered important. They 
discover early April memo that explicitly* refers 
to diversion. As they are leaving, North arrives 
and indicates he was aware they would be in NSC 
offices; volunteers to answer questions. 
According to North, he shreds documents while 
Reynolds and Richardson are in the office and 
continues while they are at lunch. 

1: 25 p.m. - 3:20 p.m. : 

Casey and Poindexter, have lunch. North joins 
them at 2:50 p.m. (until 3:40). Alton Keel may 
have been there briefly according to Poindexter. 
According to Poindexter, no discussion of diver- 
sion or of destruction of 1985 finding. At 2:52 
p.m., during the lunch, Regan calls Casey. 

1:45 p.m. - 3:15 p.m.: 

Meese, Reynolds, Cooper, and Richardson have lunch 
at Old Ebbitt. Reynolds advises Meese of diver- 
sion memo. 



UNCUSSin[D 



122 



liNCUSSIRED 



.7:15 p.m.: 

Reynolds and Richardson return to NSC offices 
• where North provides more documents. Nort4i 
indicates he expects "to take the fall*. They do 
not review the files of Poindexter, McFarlane or 
Thompson. Richardson tells North that Meese 
wishes to meet with him. North tells Reynolds 
and Richardson he has retained an attorney. 



3: 40 p.m. 



3: 46 p.m. 



5:45 p.m. 



6: 00 p.m. 



North calls Meese. Meese makes appointment with 
North to meet on 11/23 at 2:00 p.m. Agrees to 
allow North to go to church in morning. 



Casey calls Meese. 



5:40 p.m. - 



Poindexter speaks to North. 



Meese meets with Casey at latter's home. They 
discuss Furmark and Canadian investors. Meese 
is "sure" that Casey "did not mention anything 
about Central America" and does not believe there 
was discussion of the contras or the Nicaraguan 

resistance. 

< 

- 8: 45 p.m. : 

Cooper goes to CIA with McGinnis and ui^yy^gw^s 
Doherty, Dietel, Jameson, McHoffa, andf^^^^^^^ 
Cooper has telephone conversation with] 



Sunday, Nove«ber 23. 



9:00 a.m. 



9:15 a.m. 



- 10:45 a.m.: 

Cooper goes to CIA with McGinnis and interviews 

Allen, Jameson, Doherty, and Clarridge. 



North calls McFarlane and asks to meet. 



North speaks to Secord. 



9:45 a.m. 



Cooper meets with Allen and Doherty. 



'JNCLASSIFIED 



123 



12:30 p.m, 



12:32 p.m. 



m 



10: 10 a.m. - 



Meese speaks to Casey. 
Casey. 



mssim 



Cooper then meets with 



10:45 a.m. 



Reynolds and Richardson go to NSC. 

, - 12:45 p.m. : 

North and McFarlane meet in latter's office with 
no one else present. According to McFarlane, 
North states that: (1) there is a problem with 
the diversion; (2) diversion was a matter of 
record in memo; and (3) it was an approved 
matter. Green arrives, and Secord arrives 
minutes later; McFarlane leaves them to talk in 
his office. 



Meese calls Regan. 

12:40 or 12:45 p.m. - 2:00 p.m.: 

Meese, Cooper, Reynolds, and Richardson meet. 

2:15 or 2:55 p.m. - 5:55 p.m.: 

Meese, Reynolds, Cooper, and Richardson interview 
North. (Meese leaves interview at 4:05 p.m.) 
North states: (1) arms deal authorized by Reagan; 
(2), idea of diversion surfaced in discussion with 
Nir in 1/86; (3) $3-4 million diverted after 
February shipment of TOWs and more after May 
shipment of HAWK parts; (4) Israel controlled the 
money; (5) North gave Swiss account numbers 
(accounts opened by Calero) to Israelis; and (6) 
only he, McFarlane, and Poindexter aware of 
diversion. North is "visibly surprised" when 
shown undated memo. Unclear whether North tells 
Meese that he does not think that the undated memo 
was used or sent for approval. 



North calls McFarlane and tells him about Meese 
interview. 



North calls Poindexter and then shreds more 
documents. Remains in office shredding until at 
least 4:50 a.m. when alarm is tripped. 

6:00 p.m. - 6:45 or 7:00 p.m.: 

Meese, Cooper, Reynolds, and Richardson meet. 



ONCIASSIFIED 



124 



vmssim 



7:00 p.m. - : 

■ Sof aer calls Cooper and says he fears there wa^ 

excess profit from Iran arms sales. Believes 

money may have gone to contras because of involve- 

* , ment of Southern Air Transport in both operations. 

Monday, November 24. 

7: 20 a.m. - 7: 50 a.m. : 

Meese, Reynolds, Cooper, Cribb, Richardson meet to 
review what found. Meese asks staff to look over 
criminal laws and other applicable statutes. 

8:57a.m.- : 



Poindexter talks with McFarlane. 

9: 00 a.m. - 10: 15 a.m. : 

Cooper meets with Sofaer and Hill; sees 1985 
notes on arms shipments. 

9:12 a.m. - : 

Poindexter calls North on secure phone. 



Meese may have spoken to Webster.] 



9:55 a.m. - 



Meese calls Weld. 

10:00 a.m.- 10: 30 a.m. : 

Meese meets with McFarlane about diversion. 
McFarlane states that he only learned about 
it during May trip to Tehran. McFarlane 
does not tell Meese about "shredding party". 

10:02-a.m. - : 



Meese calls Regan, 



10:10 a.m. 



Meese calls Bush, 



10:25 a.m. 



Poindexter speaks to Casey. 



10:29 a.m. - 



Poindexter speaks to Weinberger, 



Meese has telephone conversation with Weinberger, 
who does "not have much to add." 



iiNfii mm 



125 



10 
10:55 a.m. - : 



BNWS/flffl 



Poindexter speaks to North on secure line. 

( 
11:00 a.m. - : 

According to Regan, Heese meets with him and 
advises him of diversion and North's confirmation. 
Also according to Regan, Meese thereafter meets 
with Reagan; tells him he needs to complete review 
and will report later. According to Meese, he 
meets with Regan and Reagan and advises both of 
diversion. 

11:44 a.m. - : 



Meese calls McFarlane. 

12:30 p.m. - 1:30 p.m.: 

Meese, Reynolds, Cooper, Cribb, and Richardson 
meet. 



1: 30 p.m. 



McGinnis tells Richardson that he had heard 
rumors at the CIA that Iran money was diverted to 
the contras. According to Cooper, he would 
likely have passed this information on to Meese. 



1:40 p.m. - 



Meese meets with Bush. 



2:00 p.m. - 



Reagan, Bush, Meese, Shultz, Weinberger, Regan, 
Poindexter, Casey, and Cave meet to discuss Iran. 
According to Meese, diversion not discussed. 

2:00 p.m. - 3:45 p.m. : 

Reynolds and Cooper meet with Green who describes 
Hakim's role in proposing diversion. Reynolds 
tells Meese of his conversation with Green, but 
Meese does not remember if Reynolds tells him 
that Green has confirmed the diversion. 

2:44 p.m. 



Secord talks to North. 

4: 15 p.m. - 4:20 p.m. : 

Meese interviews Poindexter in latter's office for 
10 minutes. Meese is alone and takes no notes. 
Poindexter acknowledges knowing "generally" about 
diversion and adds that North gave him "enough 
hints" to know the money was going to the contras. 
He did not inquire further, however, and told no 
one about the diversion. According to Poindexter, 
According to Poindexter, Meese does not aak him if 



ONCLASSIFIFn 



126 



4: 30 p.m. 



11 



MiMSim 



he ever told the President; according to Meese> 
he does ask him, and Poindexter responds that he 
has not told the President or Regan. ' 



Meese meets with Reagan and Regan. He relates 
Poindexter statements and discusses "looking at 
what applicable criminal laws there might be." 
Meese later testifies that neither Regan nor 
Reagan "knew anything about this." 



Meese meets with Bush. 



Casey calls Cooper, after meeting with Furmark at 
the CIA. Asks what Cooper knows about "Lakeside 
Resources." 



6: 10 p.m. 



Casey speaks to Poindexter on secure phone. 



6: 53 p.m. 



i^^m 



Regan talks to Casey about diversion. 



Meese calls Poindexter. 




Tuesday « Wovember 25» 



6:30 a.m. - 



Casey calls Meese. 

6t3S or 6:40 a.m. - 6:45 or 7:00 a.m.: 

Meese meets with Casey at latter's house. 
Richardson accompanies Meese in car, but is not 
present at meeting. According to Meese, Casey 
states that he had heard from Regan the previous 
evening about the diversion and that Poindexter 
was planning to resign. Casey tells Meese he will 
I send him the Furmark memoranda. 



Regan calls Meese at Casey's. 



ONClASSra 



127 



12 

7:15 - 7:45 a.m.: 

Neese meets with Poindexter; advises him that 



time has come to submit resignation. 



7: 50 a.m. - 



Meese calls Weinberger. 

7: 50 a.m. - 8:02 a.m. : 

Regan tells Poindexter to tender his resignation 
at the 9:30 a.m. briefing. 

8: 00 or 8: 15 a.m. - : 



Meese, Regan, Cooper, Thomas, Wallison meet. 
Review board proposed by Regan. 

8: 15 a.m. - 9:30 a.m. : 

Cooper meets with Wallison and Thomas to draft 
Presidential statement. Thereafter, Cooper and 
Richardson meet with Buchanan, Speakes, Thomas and 
Wallison to review the statement. 

8: 55 a.m. - : 



Poindexter speaks to Regan. 

9:00 a.m. - 9:30 a.m. : 

Meese meets with Reagan, Bush, and Regan and 
advises thera of what he (las learned and that a 
criminal investigation probably will be convened. 

9: 10 a.m. - : 



Poindexter speaks to Weinberger. 

9:20 a.m. - 9:30 a.m.: 

Poindexter meets with North. 

9:30 a.m. - 10:00 a.m. : 

Meese meets with Reagan, Bush, Regan, and 
Poindexter. Poindexter resigns. 

9:35 a.m. - 



Green speaks to North. 

10:05 a.m. - 10:10 a.m.: 

Poindexter meets with Meese. 

10:15 a.m. - : 



Neese attends NSC meeting with Reagan. 

10:25 a.m. - : 

Secord calls for Poindexter; speaks to Thompson. 



UNcussra 



128 



13 



«usxm 



11:00 a.m. - 12:00 noon: 

Meeting with Congressional leadership. ^ 

11:45 a.m. - 12:00 noon: 

North's log indicates that Reynolds has telephone 
conversation with North and/or Green. 

12:00 noon - 12:48 p.m.: 

Meese press conference on diversion. 

12:03 p.m. - 



Poindexter speaks to Casey on secure line. 



1: 30 p.m. 



Cooper, Cribb, Reynolds, Bolton and Richardson 
have lunch in Cribto's office. 



1:45 p.m. - 1:50 p .m. : 

Meese meets with VVebster. Tells Webster DOJ will 
research criminal statutes. 

2:05 p.m. - 2:45 p.m. : 

Meese meets with Webster(?), Burns, Reynolds, 
Cooper, Richardson, and Cribb. Trott joins' 
meeting at 2:20 p.m. At this meeting, Meese 
directs Burns to notify White House Counsel to 
take security precautions, and directs Cooper to 
meet with Weld about applicable laws. (Burns 
fails to do this immediately.) Meese advises 
Webster that he is turning the matter over 
to the Criminal Division and would "probably" need 
FBI resources. (Those resources were requested 
the next day.) Cooper subsequently meets with 
Weld and briets him. 



North, Secord, and Green meet. 

3:00 p.m. - 4:00 p.m. : 

Meese attends NSPC meeting with Reagan. 

4:00 p.m. - 4:02 p.m. : 

Meese meets with Poindexter. 

4: 10 p.m. - 4:40 p.m. : 

Meese meets with Reynolds, Cooper, Cribb, and 
Richardson. 




f^n 



^i}:i 



129 



4: 40 p.m. 



6: 40 p.m. 



14 



«NClil!iSiF!Efl 



Meese has telephone conversation with Israeli 
Foreign Minister Peres. Peres states that 
Israelis handled no money, but merely told the 
Iranians what accounts to put it into. 



Meese meets with Richardson, Cribb, Burns, Trott, 
Reynolds, Cooper, Weld, Bolton, and Korten (to 
6:50 p.m.) on "press update/guidance" and possible 
criminal violations. 



Hall and North remove documents; exchange them in 
Green's car. 

7: 00 p.m. - 8: 30 p.m.: 

Cooper, Reynolds, and McGinnis meet with Susan 
Crawford and DOD personnel to discuss Economy Act 
transfers and pricing. 

7:05 p.m. - : 



Mcfarlane calls Meese. 



Monday, December 1 . 



2:00 p.m. 



2:20 p.m. 



Reynolds and Public Integrity Section lawyer 
William Hendricks meet with Green, despite 
objections from Criminal Division that Reynolds 
should not participate. Green represents Secord 
and requests immunity; he urges the Department 
not to apply for an independent counsel. 



Meese meets with Reagan. 



Meese meets with Burns, Cooper, Bolton, Cribb, 
Weld and representatives of the Criminal Division 
on Iran investigation. 



Tuesday, Deceaber 2. 

10:00 a.m. - 



Meese decides to apply for an independent counsel. 



mmvm 



-684 0-88-6 



130 



fO <ir^ 'Med Cd^M JS<^. fti/ti^ti^ 
J'*'%v ^d CiC/^ ^t/nv ^^dt»*^> '%^M- 



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wmm^ &M) 



131 



\f 



ft\)SSS«-^ 






THE WHITE HOUSE 



WAS H I NC TON 



September 4, 198 7 



QO'idR- 



Dear Victoria: 

In accordance with the President's pledge to cooperate with the 
Select Committee's investigation and pursuant to the Select 
Committee's request for an "on the record" confirmation of 
certain matters, Barbara Browne has completed the enclosed 
Affidavit. 

We understand that the enclosed Affidavit will be used in lieu of 
a deposition and that we v/ill be consulted before it is publicly 
cited or released. 

Thank you for your cooperation and understanding in this matte.r. 

Sincerely, 



4fe 

Alan C 



Alan C. Raul 
Associate Counsel to the President 



Ms. Victoria Nourse 

Assistant Counsel 

Select Committee on Secret Military 

Assistance to Iran and the 

Nicaraguan Opposition 
United States Senate 
Washington, D.C. 20510 

Enclosure 

cc: W. Neil Eggleston, Esq. 
George Van Cleve, Esq. 




132 



iifm 




AFFIDAVIT 



I, BARBARA E. BROWNE, hereby state as follows: 

1. In July of 1986, I was employed as a secretary at the 
National Security Council, assigned to Lt. Col. Robert Earl and 
Commander Craig Coy. I worked in Suite 302 of the Old Executive 
Office Building, the same suite in which Lt. Col. Oliver North 
and his secretary. Fawn Kail, were located. 

2. On Monday, November 24, 1986, I arrived at work in Suite 
302. Sometime during the morning, Lt. Col. North said to me that 
the document shredder in the suite was jammed and not working. I 
looked at the shredder, and I noticed that the shred bag was 
full. I then called Ken Larkins and together with him, removed 
the shredder bag, taped it shut and set it outside the door of 
Suite 302 where, in accordance with standard procedures, it was 
removed in due course. 

3. From July 7, 1986, when I first began working in Suite 
302, the first time I recall seeing a full shredder bag was on 
Monday, November 24, 1986. During the period from July through 
November 1986, I used the shredder on one or two occasions to 
shred documents as requested by either Lt. Col. Earl, 



■ wd e r p r o iisiong of C. ' 3. uJ^ 
./ 3. Reger, N'.ticp.al Secuiily Ccuncil 



m.imm 



133 



wussife 



Lt. Col. North or Commander Coy. On those occasions, I confirmed 
that they were certain the particular documents should be 
shredded . 

I declare under penalty of perjury that the foregoing is 
correct. 



Barbara E. Browne 



Date: September 4, 1987 



UNCIASSIFIED 



134 



ao-za^ 



CLASSIFIED AT TIME OF PUBLICATION. 



135 



ao-/?p. 



CLASSIFIED AT TIME OF PUBLICATION. 



136 



90'fZ5 



See Hearing Exhibit JMP-85 



137 



COMKwro CDTTER - 

Duty Officer - Harlla* Halvln 



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' At of cob 



TTIE ATTORNClf CEHllAI. 
Seh»dul« for Tu««d«y. 2i Nov«ab»r 19»6 



TIME SUBJECT/VISITOR 



/ 



6:35 Naatlng with Bill Casay / 



Caaay Rastdanea 



7:2S John Polndaxtar 



/ 



9:00 RR VP/OTR 

9:30 RX VP/DTR/JMP '^ 

10:13 RK NSC Maatln^ 

11:00 RX Naatlng with Congraasloaal Laadarahlp 

12:00 RX Praai Confaranca 

12:50 RR AC jolna Supraa Court Lunehaoo 



Oval Off lea 


30 


Oval Offlca 


30 




15 


Cabloat Room 


60 


WR Fraaa Brlaflng Rm 


68 


Stata Floor 


60 



2:00 AIB/SST/WBR/CJC/TKC/Jm 
2:45 Dapart for White Heus* 
3:00 RX NSPC Maaclng (POLOIX) 



Sltuaclea looa 



&S 



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141 



CHAPTER 21. INTRODUCTION TO THE ENTERPRISE 



142 



Clna^er Z\ ,^3^0^^ QU/£y 



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SECCRD Ifrr'HVIEWS 

During Initial Interview on December 17, 19Bl, 
General Secord was advised that on a recent C^S Television 
Interview with Douglas Schlachter, allegations were made that 
Secord and Edwin Wilson worked together to sell mllltar:' 
equipment in Iran and attempted to obtain Russian weaoons 
from Libya. General Secord said these allegations were 
absolutely false as his relationship with' Wilson was strictly 
social. He said he has never entered into any type of business 
arrangement with Wilson, his companies , -or associates. He said 
further that he never participated with Wilson in any type of 
intelligence operations nor has he at any time received any 
money or gratuities from Wilson or, his associates. He said 
he met Wilson about ten years ago at a party, being Introduced 
by Tom Cllnes. He had known Cllnes since both served together 
In Southeast Asia, with both later attending the Maval War 
College at Rhode Island_ toget her In 1 971. _Secord recalled that 
■from 1972" to' 197'*, he saw "Wilson on a social basis about ten 
times, having lunch together. He could not remember ever 
visiting Wilson's farm although invited many times by Wilson. 
In the summer and fall of 1975, he and Wilson had dinner 
together in Iran, with Wilson's wife present on one occasion. 
Wilson told Secord he was working with the Iranian Secret 
Police and U. S. Naval Intelligence. After returning to 
the U. S. in June, 1972, he saw Wilson on a social basis. 
Secord said he has had no contact with Wilson for the oast 
two and a half years and last saw him In Brussels, 3el.3lum, 
In February or March, 1979, while attending an official 
Government function. At this meeting, Wilson asked Secord 
if he was Interested in MIG-25 aircraft. He also recalled 
that In late W78, he attended a NATO conference In London, 
England, and met with Wilson while there. Wilson said he was 
working in Libya. 

During l.ntervlew March 26, 19^2, Secord advised 
he had been to Wilson's farm on several occasions with his 
wife and children. He admitted going to an office In Northern 
Virginia with Cllnes for a briefing by an associate of Wilson's 
regarding a "super security project" that Wilson was working or. 
The briefing related to security devices at one of the Iranian 
Shah's palaces, and when Secord realized it was a "connercial 
pltch,'' he terminated the brleflnz and left. Wilson 



Par y Dec'assified/Koleased onjhJlL^ 

under provicions of E. J. 123F5 

./ 3. Reger, fhtioiial Secunty CounciJ 




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on that occasion. £oc>/ri bdid he and his staff had conslderaile 
Influence over major decisions relating to contracting in Irar.. 
He admitted ordering at-ut a dozen snail pocket comTsuters ths' 
Wilson was displaying In Iran In late 19''6 or early 19'''', ser.dlr 
Wilson a check for 3200 after receiving the Itens bv nail. 
Secord recalled meetlnc Doupt Schlachter In about 1?"? and see!-- 
him many tl.mes, always with Cllnes and usually at a bar or 
lounge In Northern Vlri^lhla. Secord said he bought a townhouse 
at Burke, Virginia, from Tom Cllnes as an Investment In 19''", 
subsequently selllnr the house to Ed 'Vllson at the same pries 
he purchased It for. Proceeds of $20,000 he ROt from sale of 
this house he Invested In a house at Fort Walton Beach, Florida. 
He got the 520,000 In cash from v/llson at a meeting at a r.'orther 
Virginia lounge in about September, 197?. Mo receipt was ^Iv-r. 
for this cash and he thought this' cash transaction was u-nusual. 
He said others were presen.t when this cash was personally ,^lver. 
to him by Wilson. Secord acknowledged usln» a Beechcraft Bare-, 
aircraft that Wilson purchased in about September^ 1973. lis 
"sal(J he ■ flew Wilson over his property once or twice and me: 
Wilson's girlfriend, Bobbl Barnes, in this regard. The lor.?"?s-: 
trip he made in Wilson's plane was to Miami, Florida, with Zo- 
Cllnes, and he made other trips around the Washinc^ton, D. 7.', 
area and a trip to Fort v/alton Beach, Florida, in It. He'saii 
he paid for the gas expended and utilized the aircraft as '."ils-- 
asked him to look after the aircraft periodically and Seccrd 
agreed to fly it occasionally. He said Jin Rhyne, an associate 
of Secord' s who worked with Secord In the past, also fl^w t.-.e 
aircraft at Secord 's request. The aircraft was ferrle-! to 
Europe In 1979. Secord denied that his use of ■•rilson's alrcra:'- 
was for any past or future favors. 

In late 19''3 to early 19''9, he met with '■.■llson In 
London on a strictly social occasion. Secord was there with 
Erlch Von Marbod seeing a British Government official re^^ardl.-.r 
the Iranian situation. He had drinks with and chatted with 
Wilson on that occasion. He met Wilson next in Brussels ace.": 
a year later at Wilson's request delivered by Cllnes. He hai a 
few drinks with '..'llson and the meeting lasted about two hours , 
with only he and 'Wilson present, '//llson appeared nervous ani 
discussed Wilson's possibly procuring Soviet aircraft. Seccr- 
sald he made no promises to Wilson and did nothing further 
regardlne the matter. 



UIWUBi 

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_Secord said he and Clln es . working under Ted Shacl clc:.-. 

Clines' 

and Seeord^p^^H^B^^^B^^^^H He sal<^ at present Clines 1?" 
one of his "few close personal rrlends . He has had no direct or 
Indirect share In Clines' conpanles. He said Cllnes told hl.r. 
that Wilson was responsible for getting a loan (of about S3CC,CCC) 
for Cllnes which started or assisted Cllnes In financing his 
companies. Secord denied having any Interest In EATSCO. He sali 
he traveled to Egypt with Von Marbod In May, 19 79, during which 
Secord was to negotiate an F-^ aircraft deal with the Egyptians. 
He never heard of Hussein Salen until 'the summer of 19''9. He 
denied having anything to do with contracting relating to the frelih: 
forwarder as pertains to the U. S. -Egyptian foreign military sales 
credit deal and EATSCO. He said he had no advance infomatlon 
regarding the 0. S. -Egyptian foreign military sales loan agreement. 
Cllnes told him In 1979' that he was trying to get "part of the 
action" as related .to the contract that Hussein Salem had aopare-.tly 
acquired with Egypt and mentioned he- was associated with- a fr-lrl-.': 
forwarding company, the Hobelmann Company. Secord advised he first 
met Von Marbod In 19'^2 at the Pentagon, working closely with hi.-. 
during 1972-197'*. He said they are close professional associates 
and also served together ^ Iran In the mld-1970's. He also ^^ 

Von on^llHHIHBM^HHiBHHII^BHV^^HI 

In the early 1970 's. From summer of 19'^3 - spring 1931, he ha-; 
al-uost dally professional meetings with Von Marbod at the Per.ta-c-, 
l.ncludlng work on highly classified projects regarding Egypt. He 
recalled that he, Cllnes, Von Marbod, and sevi»ral others w«r? 
toget-her at various N'orthern Virginia places on a social basis 
prior to the Camp David Accords situation for casual discussi-:-.? 
regarding current events and other -.atters. Secor-i adr.itts-i 
visiting Cllnes' Mlddlebur^, Virginia, resi:lence a: out ten ti.-.es 
and beln^ at t-he Rotonda condomlnlu.Ti owned bv Clines or -hirle-' 
3rlll on one evening. He recalled beln- at Klines' for-.er '■'Lf'.r.r.i , 
Virginia, townhouse on a few occasions, also. 

During Interview on "^ay 20, 1?'2, Secord prcviie-" 
additional Information re^ardin^ various areas previously its', .z-.^-t . 
He admitted that Vllson was to take care of financial arrar.^9-?-.:3 
for the 3eechcraft Baron aircraft and the i?:as was often rail Czr 
by the service account that had been set up for this aircraf:. 
He denied that Wilson obtained this olane at Secor- ". 's reiu^st. 



^CLASSIFIED 






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He said he believes he met Wilson on two occasions In Brussels, 
the last occasion beln? when Wilson mentioned the possible 
acquiring of Soviet aircraft. During the London trip In late 
1978 or early 1979, Wilson picked him and Von Marbod up at their 
hotel and took them to his townhouse. After being at the 
townhouse a short time, they possibly went out to dinner. 
Present at the townhouse were Secord, Von Marbod, Wilson, Bobble 
Barnes, Diane Bryne, and one of Bryne's children. Secord said 
he never had any conversations with Wilson regarding the 
Egypt-EATSCO situation and never discussed this situation with 
Cllnes prior to the service agreement being made between Egypt 
and EATSCO. Secord never knew the details of Cllnes' association 
with Salem. Secord said he was not associated with any business 
activity relating to nuclear fallout clothing while in Iran and 
has no recollection of any potential deal with Wilson, or 
associates of Wilson, regarding such clothing. 



11 



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SECORS AIRCRAFT USS I'r?ORMATIOM 

Inquiry at Page Beechcraft, Inc., Dulles International 
Airport, on January 19, 1932, revealed that In August, 1?''!', a 
Beechcraft 3aron airplane. Model 59, 1977 model year. Serial 
Number TH779, and U. S. Registration ^Ju.•nber :J1577S, was pur- 
chased by Service de Plnancement, S.A. of Geneva, Switzerland. 
Ed Wilson made the Initial call to Page which eventually resulted 
In the purchase. Total cost was $179,575, paid In three 
Installments (August 3, 1973, September 12, 1973, and September I'-i , 
1978). When purchased and delivered, the aircraft had i»90 hours 
of usage already. Primary contact for' Invoices and other notices 
and records was Douglas Schlachter of Rosslyn, Virginia. The two 
pilots who flew the plane were Richard V. Secord and Ja.mes Howard 
Rhyne, and operationally Rhyne was to be the main contact. In 
about May, 1979, Ed Wilson .called Page and said they were plannlnr 
to export the aircraft. In mid-August, 1979, Infomatlon was 
received that the plane was to go _to_ Belgium. . In .about Senterh-r». 
■"I979, the plane "Was"' apnarently taiken" to Europe'. ' dwnershlp 0" t.-.e 
aircraft was transferred to Skyways Aviation, Inc., In about 
September, 1979, and Page re?^lstered the plane to this entity 
on about September 10, 19''9. Page records reveal that 1,000 
shares of conr.on stock of Skyways Aviation, Inc., wouli be Iss-ed 
to Ed Wilson In consideration for transfer of the aircraft tc 
this corooratlon In connection with the bill of sale. 



a ' -*■*■•- 



Page personnel advise the tle-dcwn fee for t'-.ls 
would have ^esn J120 a month. The beechcraft 5aron 'f/ir. «n-'..-.-= 
uses about twenty gallons of gasoline per hcur. 'A -allcr. rf 
aircraft gasoline costs about 32 as of' April, l?':.; Service •.'. 
Flnanceaent was to make available a SS,?':: cr-'tlt -i'-cslt Ir. 
connection with fuel" and -lalntenance costs for tr.e aircraft; 
there wer« to "Be two users of the aircraft a.-.l f-.e- -/oul-l te 
authorized to sign for fuel and maintenance as necessary. 

James Howard Rhyne, during Interview :'ay J, 1*'", 
advised he has known General Se cord since they se rved tc.-^c-.er 
In Southeast Asia In about 1965d|^BiiB^[^B ^^ ^^■'*- Secsrc 
shared ownership In a Mooney single-engine alrcra't (r:'':?^V) 
during about 197U-1977. Rhyne met Ed Wilson throua;!-. Secord In ■ 
social setting at Wilson's farm. In about 1577_i9-", 
Rhyne that Wilson wanted Rhyne to look- at an aircraft 
conslderlntr buying. Rhyne and Secord locksi at tr.e =eec:-.cra;-' 



Baron and Rhyne test flew 



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"extras'" and Rhyne Chought It would be a good Investment. 
Wilson subsequently purchased the plane and Secord aslced 
Rhyne to look after it since he then lived near Dulles 
Airport. Rhyne agreed. Rhyne looked after maintenance of 
the aircraft and flew it a total of five to six times, locally 
and to his home area of Lafayette, Georgia. (Rhyne did 
consultant work for EATSCO In about late 1979 In connection 
with their looking to purchase a 707 Jet. He received about 
$5,700 for his work.) Rhyne said he was introduced by Secord 
to Erich Von Marbod in about 1979 at Manassas, Virginia, 
airport. On that occasion, Secord and V.on Marbod flew together 
for about thirty minutes in Rhyne 's aircraft. Rhyne said he 
was present, along with Ted Shackley and others, at the Pentai^on 
ceremony where Secord received his .second star as an Air Force 
General. 

Analysis of Secord' s flight log for the Beechcraft 
Baron (voluntarily provided) rev_eals he used the. plAne.on 
"3r~bccas ions during the period August 16, 197? - Au(»ust 25, 1?"?, 
for a total of 59 flyln;^ hours. 



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girlfriend, Shirley Brill. Clines introducted Von Marbod to 
Quintero and said Von Marbod was a "friend". Initially, 
Ouintero was at the swimming pool at Clines' residence when 
Von Marbod was there. Von Marbod was at the residence about 
one hour. 

In about the Fall of 1980, he again net Von Marbod 
at a lounge at the Springfield Hilton Hotel in Springfisld, 
Virginia. Quintero was there with Clines and possibly Shirley 
Brill at that tine. During this contact. Von Marbod asked 
Quintero about the Cubans who were coming to the Miar.i, Florida, 
area that Fidel Castro had put out of Cuba. Also mentioned 
was United States action in putting these persons in "concentratio: 
camps. This meeting with Von Marbod was at around 6:00 p.r.., 
and lasted about thirty minutes, during which Von Marbod had 
two or three beers . . • 

Quintero said the only information he has about 
Von Marbod 's past position with ?he governr.ent was what he 
had read about in newspaper articles. 

.: -■ - .Oil another- occasion, Qttiitrera was- at a part*/ at • - 
Clines' condominium at the Rotonda in Mc Lean, Virjinia. H'hilt 
there, he heard that Von Marbod was at the party also. 

Quintero recalled that Clines referred to Von >;arboc 
as "Redhair" or "Redhead". 

Quintero said that Von Marbod was a friend of 
General Secord's and as Secord was a friend of Clines', that 
is how Clines knew Von Marbod. 

Quintero said he never heard of any payments or 
gratuities being m.ade by Clines to Von '.'arbod. 

.'■lajor General" Richard Secord : 

Quintero said he first net General Secord after seoi:,: 
Ton Clines arrive back frow Southeast Asia in 1973. Or. that 
occasion he r.:et Secord at a bar in Northern Virginia vit/. To;- 
Clines, and possibly other Southeast Asian military friends of 
Secord 'i. Clin es introducsd General Secord to Quin tero ani ssi.! 
that Secord hadl 



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He recalled that initially, General Secord was cold 
and distant towaxds him and would not let hin cone to his 
house. In this regard, he remembered that on one occasion 
Quintero and Clines and Clines' girlfriend, Shirley Drill, 
were travelling to<;cther and Clines called Secord and said 
they were coming over to Secord 's house. Clines said that 
Secord said, "Dump them", referring to Brill and Quintero, prior 
to coming to the house. 

Quintero indicated that his relationship with 
Secord is now much closer, and during the past year he has 
met Secord on seven to nine occasions, and during the last tvo 
months on possibly four occasions. In this regard, he has been 
to Secord 's residence on three to four occasions within the 
past year. 

On the day that Ed Wilson was arrested in Ue\i Yorl:, 
in June, 1982, Quintero said that he and Clines went to Secord' s 
residence to watch the 7:00 p.m., news coverage of the arrest. 
Secord and Clines expressed the opinions that they thou?»ht 
Wilson had made a deal in connection with his arrest. Secord 's 
wife was present _on that occasion also. .. _ _ . 

Quintero said on every occasion that he has met 
Secord, Quintero has also been with Clines, exce;3t or. one 
occasion. This was when General Secord was in a suspended sta-us 
from his job at the Pentagon in the Spring of 1932. Quintero 
met Secord at Mr. Smith's Restaurant and Lounge on Route 7 in 
Northern Virginia, while waiting for Cliaes to arrive. Clines 
never arrived on that occasion and Quintero and Secord went 
back to the Global Anerican Resources Office in ;:c Lean, Virjir.in, 
with which Clines has been associated in the recent past. 
Quintero recalled that during his meeting vith Secord, men'.icnsd 
above, Secord mentioned the pressure that AJS.A Barcella and 
AUSA Greenberj were putting on Secord and Clines. Also nonticned 
was a letter that had been sent by one of these AUSAs to t'.-.e 
Pentason rtgarding General Secord. 

On possibly a Saturday, sometir.e after July 4, 193!, 
but in July, Clines, Secord and Quintero ".et at a racket ball 
establish'.aent near Global Ar.erican Resources in .'!c Lean, Vir?;ir.i.i 
They did not play racket ball on that occasion but instead \.a liter. 
about the govermr.ent investigation underway. Secord i.ndicatsr. 
that he personally had nothing to worry about and Clines cor-.^entc. 
that Secord had nothing to hide . 

"F 8 G00598 



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II 




In about late July, 1982, Secord went on a trip 
abroad for about .ten days, which included travel to Egypt. 
On his return, Clines, Quintero and Secord met at the sane 
racket club, and although both Clines and Secord had rackets, 
they did not play racket ball. Instead, they went to Mr, 
Smith's Restaurant and Lounge. The conversation included talk 
about how busy Secord was in connection with meetings bsinj 
held regarding the Lebanon crises. 

Quintero said that everytine he cones up to the 
Northern Virginia area, he and Clines and Secord go out and 
have drinks. He said Ted Shackley has attended these sessions 
on occasion also. 

He recalled that in about the Fall of 1?31, at 
Charlie's Bar in 'Ic Lean, Virginia, he was present with Secord, 
Clin«s and Shackley. On that occasion, Secord", Shackley and 
Clines sat by themselves and Quintero sat by hinself at the 
bar sone distance away. 

Quintero nentioned that Ton Clines does not li!;c to 
.be. alone and whenever, he is with Clines, ^Ijsjss aiLs .Qyir.ttX.Q- 
to-drirs his- car for hin.- •- 

Cuintero scid that General Secord ',\2.s been in u.;iforr 
on occasion and not in uniforn on ot.'ier occasions that he has 
seen hir. . 



Brussels, Ecl^-'iun ''eeting : 

Quintero recalled that this r^ieetir.:, occurred bofore 
Ed V.'ilson ivas ir.uicted in the United States. n'-'i'''-**ro s;id 
he thinks that he came into Brussels vith Clines froi?. Cer.evr. , 
Switzeriar.u , and General Secord was already there vhez they 
arrived. Ed I'.'ilscn was in Brussels and stayed at a different 
iiotel than he and Clines did. 

The nijht before they were sunnosed to meet '.'ilson, 
tiiey stayed in tlicir hotel drinJiing. They then went to V.ilsor. ' s 
hotel and had drinks, but U'ilson did not cor.e do\--r. to join the-. 

Tlie next day, Quintero, Clines and Secord went tc 
V.'ilson 's hotel together and on that occ?.sicn, Quintero tr.ll-:od 
to Ed V/ilson and liis jjirlfriend, Bohbi Earr.es. Quintero aslrcd 
V.'ilson for a ^100,000 loan for sor.e consrructicn he wante-. re 



3"2 




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UNCU^KB 



ifffT!35 



s~ccp.D i?rr^?.viz'.vs 

During Initial Interview on December 17, 19Bl, 
General Secord was advised that on a recent CBS Television 
Interview with Douglas Schlachter, allei^atlons were made that 
Secord and Edwin Wilson worked together to sell military 
equipment In Iran and attempted to obtain Russian weaoons 
from Libya. General Secord said these allegations were 
absolutely false as his relationship with' Wilson was strictly 
social. He said he has never entered Into any type of business 
arrangement with Wilson, his companies , -or associates. He said 
further that he never participated with Wilson in any type of 
intelligence operations nor has he at any time received any 
money or gratuities from Wilson or, his associates. He said 
he met Wilson about ten years ago at a party, being introduced 
by Tom Cllnes . He had known Clines since both served together 
in Southeast Asia, with both later attending the Maval War 
College at Rhode Island_ toget her in 1 971. Secord recalled that 
"from 1372' to" 157'*, he saw ''//ilson on a social basis about ten 
times, having lunch together. He could not remember ever 
visiting Wilson's farm although invited many times by Wilson. 
In the summer and fall of 1S75, he and Wilson had dinner 
together In Iran, with Wilson's wife present on one occasion. 
Wilson told Secord he was working with the Iranian Secret 
Police and U. S. Naval Intelligence. After returning to 
the 'J. S. in June, 197S, he saw Wilson on a social basis. 
Secord said he has had no contact with Wilson for the oast 
two and a half years and last saw him In 3russels, 3el.3l'j.m, 
in February or March, 1979, while attending an official 
Government function. At this meeting, Wilson asked Secord 
if he was interested in MIG-25 aircraft. He also recalled 
that i.n late 1978, he attended a NATO conference in London, 
England, and met with Wilson while there. v;ilson said he was 
working In Libya. 

During interview ;iarch 26, 1932, Secord ad 
he had been to Wilson's farm on several occasions wl 
wife and children. He admitted going to an office 1 
Virginia with Cllnes for a briefing by an associate 
regarding a "super security project" that Wilson was 
The briefing related to security devices at one of t 
Shah's palaces, and when Secord reallied It was a "c 
pitch,'' he terminated the briefing and left. Wilson 






cnder proW 
' '^. Regsr. r.'^»;n „i 



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on that occasion. Sct^.'i ssdid he and his staff had ccnslderat le 
Influence over major decisions relating to contracting in Ira-.. 
He admitted ordering at-ut a dozen snail pocket comriuters th^.t 
Wilson was displaying In Iran in late 19''5 or early 19'"', ser.iil-.- 
Wllson a check for 32C3 after receiving the Iter-.s tv nail. 
Secord recalled meetlnr Dous" Schlachter In about I""? and seeir.- 
him many ti.-nes, always with Cllnes and usually at a bar or 
lounge In Northern Virginia. Secord said he bought a townhouse 
at Burke, Virginia, from Tom Cllnes as an investment In lO""' , 
subsequently selllnsr the house to Ed Wilson at the sane pries 
he purchased It for. Proceeds of $20,000 he j^ot from sale of 
this house he Invested In a house at Fort Walton 3each, "lorl-Ja. 
He got the 520,000 in cash from v/ilson at a meetln?^ at a l.'orther-. 
Virginia lounge In about September, 197?- Mo receipt was ?l'/en 
for this cash and he thought this' cash transaction was unusual. 
He said others were preser.t when this cash was personally .^Iven 
to him by Wilson. Secord acknowledt^ed usin^ a Beechcraft Hare- 
aircraft that Wilson purchased in about September,. 19'?. lie 
■sal* he flew Wilson over his property once or twice and met 
Wilson's girlfriend, Sobbl Barnes, In this regard. The lor.^^s- 
trlp he made in Wilson's plane was to Miami, Florida, with To- 
Cllnes, and he made other trips around the Washington, 2. ? .' , 
area and a trip to Fort Walton Beach, Florida, in It. He' sali 
he paid for the gas expended and utilized the aircraft as "'.'.s'.- 
asked him to look after the aircraft nerlodlcally and Second 
agreed to fly it occasionally. He said Jim Rhyne, an assoclat-^ 
of Secord' s who worked with Secord in the past, also flew t.-.e 
aircraft at Secord' s re-nuest. The aircraft was ferrle-1 to 
Europe In 1970. Secord denied that his use of Vllson's alrcri:"' 
was for any past or future favors. 

In late lO'S to early 19''9, he me 
London on a strictly social occasion. 3eco 
Erich Von Marbod seeing a British Governmen 
the Iranian situation. He had drinks with 
Wilson on that occasion. He met Wilson nex 
a year later at Wilson's request delivered 
few drinks with '..'llson and the meeting last 
with only he and Wilson present. Wilson ap 
discussed Wilson's possibly procuring Sovle 
said he made no promises to Wilson and did 
re^ardina the matter. 



t with •■.'llson 


rd was there 


w 


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and chatted v 


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oeared nervo-. 


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^Secord said he and Clin es. working under Ted Shae !:lc" 

Cllnes 
and Secord^p^^^^^^^BHI^^^B| He said" at present Cllnes 
one of his rewcTose personal friends. He has had no direct or 
Indirect share In Cllnes' companies. He said Cllnes told hl.T. 
that Wilson was responsible for gettlna; a loan (of about 53CC,CCC) 
for Cllnes which started or assisted Cllnes In financing his 
companies. Secord denied having any Interest In EATSCO. He sali 
he traveled to Egypt with Von Marbod In May, 1<979, during which 
Secord was to negotiate an P-'» aircraft deal with the Egyptians. 
He never heard of Hussein Saleo until 'the summer of 19*^9. He 
denied having anythlno; to do with contracting relating to the frelihr 
forwarder as pertains to the U. S. -Egyptian foreign military sales 
credit deal and EATSCO. He said he had no advance Information 
regarding the U. S. -Egyptian foreign military sales loan agreement. 
Cllnes told him in 1979 that he was trying to get "part of the 
action" as related .to the contract that Hussein Salem had anpar-r.tly 
acquired with Egypt and mentioned he- was associated- with- a frei?.'"." 
forwarding compa.ny, the Hobelmann Company. Secord advised he n.-s" 
met Von Marbod' In 19'2 at the Pentagon, working closely with h Ir. 
during 1972-197U. He said they are close professional assoclat-s 
and also served together ^a_I^ran In the mld-1970^_3_^__He_als^,,^^ 

Von on^^m^BIBHH^^BBiHHBHHfl^B 

In the early 1970 's. From summer of 19'^3 - spring 1931, he ha-; 
almost dally professional meetings with Von Marbod at the Per.ta-c-, 
l.ncludlng work on highly classified projects re^ardlr.i? Esry^t . He 
recalled that he, Cllnes, Von Marbod, and several others w-r? 
toget-her at various N'orthern Virginia places on a social tasls 
prior to t.he Camn David Accords situation fsr casual dlscussic-..- 
regardlng current events and ether -.atters. Secor-i adr.lzte-l 
visiting Cllnes' Mlddlebur?, Virginia, resltlence acout ten t'.-.es 
and beln^ at t-he .'.otonda condomlnl-j.m owned bv Cllnes or Sh'.rle- 
Brill on one evening. He recalled beln.r at nines' for-.er Vl-r..-.!, 
Virginia, townhouse on a few occasions, also. 

During Interview on /ay 2C, 1?!2, Secord irc-'lie-* 
additional Information re^ardln^ various areas previously ■L'.b-.j-'^-'.. 
He admitted that Wilson was to take care of financial arrar-e-e-ts 
for the Seechcraft 3aron aircraft and the ?;as was often pall ftr 
by the service account that had been set up for this alrcrift. 
He denied that Wilson obtained this olane at Secori's -*- u^s t . 



UNCUSSIHED 



^VO T'^T'T-r-i OlSStM'VAVjJW 



154 



AX 56-222 
AX 58-223 
AX 206A-182 



mmm 



He said he believes he met Wilson on two occasions In Brussels, 
the last occasion being when Wilson mentioned the possible 
acquiring of Soviet aircraft. During the London trip In late 
1978 or early 1979, Wilson picked him and Von Marbod up at their 
hotel and toolc them to his townhouse. After being at the 
townhouse a short time, they possibly went out to dinner. 
Present at the townhouse were Secord, Von Marbod, Wilson, Bobble 
Barnes, Diane Bryne, and one of Bryne's children. Secord said 
he never had any conversations with Wilson regarding the 
Egypt-EATSCO situation and never discussed this situation with 
Cllnes prior to the service agreement being made between Egypt 
and EATSCO. Secord never Icnew the details of Cllnes' association 
with Salem. Secord said he was not associated with any business 
activity relating to nuclear fallout clothing while In Iran and 
has no recollection of any potential deal with Wilson, or 
associates of Wilson, regarding such clothing. 



1 



11 



000392 



m&m 



155 



umssnE^ 



AX 58-222 
AX 58-223 
AX 206A-182 



SECORO AIRCRAFT USE I'r?OR:iA?IOM 



Inquiry at Page aeschcraft, Inc., Dulles International 
Airport, on January 19, 1992, revealed that In August, 1?"", a 
Beechcrart Baron alralane, Model 5?, 1977 model year. Serial 
Number TH779, and U. S. Registration Mu.Tiber :J'*577S, was pur- 
chased by Service de Flnancement , S.A. of Geneva, Switzerland. 
Ed Wilson made the Initial call to Page which eventually resulted 
In the purchase. Total cost was $173,575, paid In three 
Installments (August 9, 1979, September 12, 1973, and September 1^, 
1978). When purchased and delivered, the aircraft had ttgo hours 
of usage already. Primary contact for' Invoices and other notices 
and records was Douglas Schlachter of Rosslyn, Virginia. The two 
pilots who flew the plane were Richard V. Secord and Ja.mes Howard 
Rhyne, and operationally Rhyne was to be the main contact. In 
about May, 1979, Ed Wilson .called Page and said they were plannlnr 
to export the aircraft. In mid-August, 1979, Infomatlon was 
received that the plane was to go _tq_ Belgium. , In .about Sencer;f;«r^ 
'1979, the plane Vas" apnar"e"ntly taken" to Europe. ' Ownershltj c-" zr.» 
aircraft was transferred to Skyways Aviation, Inc., In about 
September, 1979, and Page ref^lstered the plane to t)".ls entity 
on about September 10, l')'^9 . Page records reveal that l.OCT 
shares of connon stock of Skyways Aviation, Inc., woul-! be Iss-e- 
to Ed Wilson l.n consideration for transfer of the alrcr^-ft ts 
this corporation In connection with the bill of sale. 

Page personnel advise the tle-dcwn fee for f-.ls aircraft 
would have been 2120 a month. The ^eechcraft Saron '.'.-itr. en*:'.-* 
uses about twenty gallons of gasoline per hcur. 'A •jailer, tf 
aircraft gasoll.ne costs about !2 as of April, 1?'2.) Servic* :• 
Flnancemt.nt was to make available a 52,:'?'; cre-ilt ^•rcsit '.r. 
connection with fuel" and nalntenance costs for the ilrcrart ; 
there wer« to "Be two users of the aircraft ani f-.ev wsul"! t» 
authorized to sign for fuel and maintenance as necessary. 

James Howard Rhyne, during Interview "ay j, 1*-*, 
advised he has known General Secor^^^ncethevserved tt-«':;-.er 
In Southeast Asia In about 1965fl||^|^HBHmy he ani Seccrl 
shared ownership In a Mooney sln~sle-englne alrcra't C"'':?-'/) 
during about 197U-1977. Rhyne met Ed Wilson through Secord In a 
social setting at Wilson's farm. In about 1577-1?"', Seccr-J •-'.•: ^ 
Rhyne that Wilson wanted Rhyne to look at an aircraft ■■ilsc-. wi3 
conslderlnir buying. Rhyr.e and Secord locks 1 at th« -.eic'r.zTiC. 
Baro.n and Rhyne test flew it. He said the plane was Icadel >/'.■:-. 



i::i(!i A?JSinrn 



12 



vn t^-z:\ oissr-' 



156 



I 




AX 59-222 
AX 53-223 
AX 206A-132 



"extras'" and Rhyne thought It would be a good Investment. 
Wilson subsequently purchased the plane and Secord asiced 
Rhyne to look after it since he then lived near Dulles 
Airport. Rhyne agreed. Rhyne looked after maintenance of 
the aircraft and flew It a total of five to six times, locally 
and to his home area of Lafayette, Georgia. (Rhyne did 
consultant work for EATSCO In about late 1979 In connection 
with their looking to purchase a 7C7 Jet. He received about 
$5,700 for his work.) Rhyne said he was Introduced by Secord 
to Erich Von Marbod In about 1979 at Manassas, Virginia, 
airport. On that occasion, Secord and V^n Marbod flew together 
for about thirty minutes In Rhyne 's aircraft. Rhyne said he 
was present, along with Ted Shackley and others, at the Pentai^on 
ceremony where Secord received his .second star as an Air Force 
General. 

Analysis of Secord's flight log for the Beechcraft 
Baron (voluntarily provided) . rev.eals .he used the. plane., on 
'II occasions' during the period August 16, 1978 - August 25, 1?"?, 
for a total of 59 flying hours. 



Mmm 



13 



F B 000394 



157 




Biography 

Unifed Stales Air Force 

S*cr»(ary o( m« AJr Fore*. 0«c» o( PubUc Atats. Woshingfon. DC. 20330 



MAJOR GENERAL RICHARD V. SECORD ki 1 ^ R R 

Major General Richard V. Secord is deputy assistant secretary 
of Defense for international security affairs (Near East, 
Africa and South Asia affairs), Washington, D.C. 

General Secord was bom July 6, 1932, in La Rue, Ohio, arxi 
graduated from high school in Columbus, Ohio, in 1950. He 
entered the US. Militory Academy, West Point, N.Y., in 1951, 
and groduated in 1955 with a bochelor of science degree and a 
commission in the \JS. Air Force. He received a master of 
science degree in intematiorwl affairs from The George 
Woshington University, Washington, O.C., in 1972. He is also a 
groduate of the Air Command and Staff College at Maxwell 
Air Force Base, Ala., and the Naval War College, Newport, 
RJ. 

He entered pilot training at Morianno, Fla., after 
groduation from the ocademy, and received his pilot wings in 
August 1956 at Greerwille Air Force Base, Miss. He then 
served OS an instructor pilot in single-engine jet basic pilot training from 1956 until 1959 at 
Laredo Air Force Base, Texas. From 1959 until 1961, General Secord was assigned as o flight 
instructor and operations officer at Tinker Air Force Base, Okla., flying jet trainers and 
transports including T-33$, U-3s, C-5As orxl C-97s. 

In August 1961 he was selected to serve with a special volunteer tactical orgonizotion which 
was formed ot Hurlburt Field, Fla. He rennained with this unit, later designated as the 1st Air 
Commando Wing, until 1965. During this four-yeor ossignnrtent General Secord hod numerous 
extended temporary duty tours in overseas areas. In March 1962 he was assigned as an odviser to 
the Republic of Vietnam, flying Vietnamese air force AT-28s, during which time he logged more 
than 200 combat missions. Beginning in January 1963 he served for six months in Iron working 
with the Ironion air force as an adviser on oir-grourxJ operations. General Secord again was 
assigned on temporary duty tours in Iron from January to May I96'» and from January until March 

1965, working on joint operations. 

The general then served os chief of the Tactical Operations Division, 1st Air Commondo 
Wing, until July 1965 when he entered the Air Command ond Staff College. After groduotion in 

1966, he returned to the Republic of Vietnam as an air operations officer in Saigon. Transferring 
to Udorn Roydl Thai Air Force Bose, Thailand, in August 1966, he served as on air odvijer until 
August 1968. He flew 285 combat missions while serving in Southeast Asio. 

From September 1968 to November 1969, General Secord was assigned to Eglin Air Force 
i<ue, Flo., as assistont deputy chief of staff for operations, U.S. Air Force Special Operations 
Force, Tactical Air Command. He then took commofxJ of the 603rd Special Operations Sguodron 

(Current as of February 1 982) OVER J C C 




158 



C 



c 



N 16289 



at Hurlbort Field, flying A>37B's. He served as sqiAXJron commander until 1971 when he entered 
the Novo! War College. , -r-'^'^ '--•? -*-" _ . -. . 

After graduation, from tfte Naval War! College in'^une 1972, Genera] Secord was assigned os a 
staff assistant in the Office of the Secretary of Defense, Woshington, D.C. His duties included 
serving as. desk officer for Loos, Thailand and Vietnam under the assistant secretary of Defense 
for international security offairs^ Irt July 1973 he-assun^ed the position of executive ossistont to 
the director. Defense Security Assistance Agency, under the secretary of Defense. 

t - -InJi^rch f525;GeneratcSeeoedcjwa$) named, deputjt'cooomander for operdtioru, 29th Flying 
. TroiniogiWrng^ Croig^AirEorce Baae,Ala>-, ;lDlhis positiocche was resporuible for pilot training in 
-T-3?$flndibi38s in thceer:sqMOdioos.i.--; . , 

Generob -Secord. W0& appointed chiief, AicForrs Sectioo; Military Assistance Advisory Cr.oup, 
IroOvirvSeptember l975<..While..thereJjeacted as chief .odvrser to the commonder in chief of the 
rlrofijan air iorce, ond'-monogedrollULS. Air Force programs in Iran as weH-as some Army and 
jNayycaecyri}yiOssia;tj)nce-pcogcains.c .-■ sc..--;. :e--c-i -'^z . 

^ -Following. his-ret«rrv4o-the-UnitedState»-tn July 1978, he was appointed director of military 
qssistance .and-:: sales,. Office -of the Deputy Chief :of Staff, Logistics arxj Engineering, 
Heodqworters U^. AtP-Force, Washington, Q.C. In January 1979 General Secord wos named 
director of:jnternational programs, Off ice .of- the Deputy Chief of Staff for Progroms and 
Evaluation. He assumed his current duties in April 1981. 

GeneroJ. Secord- is o command pilot .with more tharv 4,500 flying hours. HFs military 
dccoratjons and awards, include- the. Distir^uished Service Medal, Legion of^Aerit, Distinguished 
Flying Cross^ Meritorious Service Medal,. Air Medol with two oak leaf clusters, Air Force 
Commendation Medal, Republic of Thailand Most. Exalted Order of the White Elephant and 
Republic of Koreo Order of Nationol Security Merit Cheonsu Medai. 

He wos-promoted. to nnajor general May I, 1980, with date of rank July I, 1976. 

Central Secord is married to the former Jo Ann Ghson of Oklahoma City. Jhey hove three 
childrent. Julie, John and Laura. His hometown is Fort Walton Beach, Flo. 

'-'■':'./:.'/'' -'^-^ ~mV. """ .^V-' '--30-:- -•-::=.'..-■" "■-" - 



159 







.. „. mil iiii^Miiii iii 




SECRET 18^^^£U6 76 STArr 

citeI 

TiH INKEDIATE DIRECTOR INFOl 




w CO 



RET: DIRECTOR 90e015j 



2. STiwrOHD TPCHNOLOGY CORP (STC) HAH CONTRACT HlTH 



1 

o 

O 

■n 

r 

m 
o 



- 1 






IIAr rOR COMMUNICATIONS SU RVE I LLAMCE. SYSTEM WHICH WAS DETERMINE! 
BY SUPREME COKKANDER'S STaTF (SCS) JO BE DISADVaKT AGEOUS TO 
IRANIAN SlOE^ CONCLUSIONS Of SCS FECIAL G R Ij,^^^^^^^^ 1 N 
76^IHflHflHH|B^HHMH|^ WERE 
AOVANTAG^»^^U?nfW HAD SUTCEEDEO IN UNLOaDIN 
UNNEEDED ov ers C?H| iXUCJaED EQUIPMENT AT EXOR 
CONTRACT WAS TERMINATED BY SCS CHAIRMAN AT R 
SPECIAL ^ROUP'aND'EOuTpme'nT TH aT ~h"aD ALREADYij 










WAS DlSTRIdUTEU AMONG 1 1 AF ELEMENTS. CONTRACT HaDvBEEN SlGN^n 




f£ 



OUT CLEARANCE OLHIS SUPRUifS JlND 



no 




.4. IN VtlW UNSAVORY REPUT 

/Having 

lOENTiriED THIS OPPORTUNITY 



OF STC H6R6 AKD l _ 

PPREICATE HEADQUARTER 



t8.8Z»l I 



'ti/^t; . 



y-. . 







SECRET- 



161 



PUTGC *1G 

-■MMtL tam* MM mm.* 



t • • 



^^tH 




Q >«> DISSIM ■ 

... 

Q -f^m fU 



/ I 4v 



/De^ TO 7)«<- ^OOaiS'j /7^t/<S74 



I 



1. I»EM: nR. ALBERT HAKin. BORN TEHRAM IN 113W, OP JEWISH 
PARENTAGE. 6RADUATEB llSa MITH BSEE BEGREE FROn CALIFORNIA POLYTECH. 



fe:; 



HARRIEO- TWO CHILDREN^ RESIBE: 

RESIDENCE IN TEHRAN. HE IS 

TIVE OF THE ST ANFORD TECHNOLO 

■ • ■ J 

CALIFORNIA. HAKIfl IS ALSO PR: 



IS 



t; LT».i 130 SORAYA AVENUE^ TEHR^ 



« ■% = INVESTOENT COOPANY OF TEHRAN 







EXi FRANCEi BUT ALSO HAINTAINS 
OWNEI^ 0£^N1> EURQPgAN RrPRrtf-fiTi- 

PORATION ft ^ ngiinT*itijYT''^i 

T OF nULTICORP INTERNATIONAL- 
OF IRANIAN INTERNATIONAL 

PEARS HEAVILY EN6AGEB IN THE 
EXPORT OF AHERICAN OPEN HARKET TECHNOLOGY TO IRAN ANB OTHER PARTS OF 
THE niBBLE EAST. HE PURPARTS TO_BE^CURRENTLY IN PROCESS OF SELLING 
STANFORB TECHNOLOGY CORPORATION INTEGRATEB SECURITY SYSTEtl TO 
IRANIANS WHICH BEALS WITH COnnUNICAJIONS SURV 
flON FINBING ANB TELEPHONE HONITORINGi AS •« 
TO SELL SAVAK EXTENSIVE TELEPHONE flONITORING 
niLLION BOLLAR PRICE RANGE-V 



OATI: 
ORW: 
OMIT: 
EXT: 



.JJ ■ ft. 



Pf v'f WED fOR REL£ASE 
0«e 1 8 APR 1987^ 



DOC. MICRO. 
" MICROFILMED 




DO , 
RECOR^eP^+ 3-1/1- 




■r»«nntirTihii ni a-mtm tmam tm» i<«||fie ntncw w »mnM,mmn ^ ^ IMPOET 



;2-684 0-88-7 



162 



UNGUSn. , 



k iimm imt •«.* 





9 « 



C 7T50 




3. ONLY POSSIBLE IftCNTZFIABLC »CRROfiATORf TRACCI IS IS OCT SH 
INPO THAT ONE ALBERT HAKItl 




IN A»»ITION^ HAKin 
APPEARS TO HAVE BEEN INFLUENTIAL IN ^— — ISRAELI ni LITART EflUIP- 
HENT EXPORTS TO IRAN WHILE AN EHPLOYEE OF^^^^^H^ OWNER OF A 
C^nPANY WHICH REPORTE»LY ACTS AS A CONDUIT IN THIS RE6AR9.H 



-=? i^- ii 



^//A<^9^T' 



e8.2Z03Q I 



MVICWEO FOR RCUMC 




»tp»mi'iii iiHTTt. 




H5t4%^^ 



r e r o r ^ 



•^iftraFiB" 



"^•f E 2 IMPOET 
CL BY: 



163 






OUTGO !« ..ESSAGE 




It- --. 



d^^J> 



1 "t: ■■ ■ • t ^ 




[CONTACT or A»»0 SHACKLEY, IS NOy TM 
TEHRAN SEEICIN6 INFORHATION ^ELEVAWt TO POSSIBLE BI»INC ON IRANIAN 
niLITARY BASE PERIHETER SECURI T^ ENSOR SYSTEHS^ MHICH HE UN»ERSTAN»S 

S BETWEEN U.S. AN» IRANIAN BEFENSE 
B MFFICULTY IN LEARNING FROfl HIS 
n PHILOSOPHIES ARE INVOLVE* AN8 
AY HAVE BEEN AGREES UPON. HE 
TO »EF REP VON HARBOS ANI/OR 



TO. BE SUBJECT OF ONGOING »ISC 
AUTHORITIES. HE APPEARS TO H 
IRANIAN CONTACTS EXACTLY WHAT 
WHAT, IF ANY, U-S- SPECIFICAT 
WOUL» BENEFIT FROt^^PlNTROS 
BGEN SEACOR» TO PURSUE THIS F 




"S 




u.- 


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^ 


<2 


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ossyss^^ 



^ REVIEWED FOA-RELEASe 

j> ^^* — ZlZ jst\ iSCf . — ^ 

p ^ REPRODUCTION tYfoEft^ftSH ^^^yj^lli 



— — ^ o 



INC OFFICE n PRCHWmo 



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164 



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OUTGOING ^MESSAG 



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MRECTOR ^ 


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rlMASSIfe. 



165 




Iranian NaKonal and Irrn^rt/ff'rpnrf^r 



REF: 



DD< 



lated 5 August 1976 



1. On 15 Augiat 1976 Mr. Shackley was advlse^by his American 



' contacts in the import/ export f 
and import/ exporter, was pas 
Mr. Shackley' s contacts also 
departing Washington for Tehr 
mation, on 16 
randnm 



at Mr. Albert HaUm, Iranian national 

ottgh Washington enroutc to Tehr^ 

d that Mr. Hakim would probably 

St. As a result of this inf< 

revie wed the Referenced men 

r to determine tl 




ihiiHi 



mm 



166 



«• UNetftSSIHEfio ^ 

-2- C 7154 



■ traightforwaird precentation on what they envisioned 
would be for the perimeter aecarity lytteni which the 

111 at their bates. In short, Mr. Hakim would be 
Perception of what kind of a system was being thought 

this data he would tiien have to bid on obtaining contracts 
lystem which the Iranians wanted. Mr. Hakim's bid would 
have to go through &e nprmal coinpettMve bid channels which the United 
States or the Iranian Government might use in setting up a program for such 
a system. In other words, if the Iranians purchased a perimeter defense 
security system through the use of FMS credits, Mr. Hakim would have to 
submit his bids in accordance with standard FMS guidelines. If, on the 
other hand, the Iranians decided tobuy a security system on the open 




- market, Mr. Hakim would ha' 

provisions of whatever were 
"In short. Mr. Clines' introdn 
General Seacord would give 
Given the Middle East style o 
Clines had made an introducti 
Mr. Von Marbod,' should res 
a request for assistance fron 
would seek would be to establi 



on this Iranian contract under the 
al Iranian contract-letting procedures. 
Mr. Hakim to Mr. Von Marbod and 
no commercial advantage per se. 
sines s, however, the fact that Mr. 
een Mr. Hakim and individuals like 
Hakim being willing to respond to 
lines. The assistance that Mr. Clines 




I 



f^^<SL9C7 



f»eVlEWEOFORRa£ASE 

UNC^FIED 



DO 



J <j"^b d 



167 




^ uga>t Mr. Shackley contacted an Amcricui businessman 
who hVd^een^ touch with Mr. Hakim during the letter's brief transit of 
Washington enroute to Tehran. This 74h\«rsation revealed that it had 
recently become apparent to the American businessman that Mr. Hakim is 
of Jewish background. In addition, the American businessman has recently 
established that Mr. Hakim is a 51%, stockholder in'the SUnford Technical 
Corporation of Mountainview, California. 





Theodore G. Shackley 
Tsociate Deputy Director for Operations 



e //A/ Q.fC7 

RCVi£»VED fOR REtlASE 




/isc^ssc^ 



Wm\m 



^Q^ J vj 9 o B 8 

3 (Ix 



168 











3RAND0M FOR TEE RECORT 

Ibert. Haklat Iranian Watlonal and laport/Exporte? 

Dealing Primarily In Security Svtema and T<chnoloqy 
^TFSntereat to Military Eatablighaenf «n^ Jn telTIT^ 
'g'ence Servicea 



1. 



Background ; In the period May to August 197C,flfl 

had collected numeroua references to HrlxiBV 

>m 1936 in Tehran, Iran, which indicated that this 
gentleman was an influential factor in the Report of America: 
open market technology to-countries like Iran an ^ Egypt. ^"^ 



ert 





data which was obtained i 
can be outlined as followl 

Educational 



le synthesis of the 

tKS May to August 1976 time frame 



gxground ; Mr. Hakim is a 1958 gradu- 
al^ with a BSEE degrS<r~ffom Califomie Polytech. Mr. Hakim 
considers himself a specialist in electronics, particularly 

/insofar as this area of technology relates to the problems 
of military establishments and intelligence services. 



b. Marital Status:— Mr. 



children. 



Hakim is married and has two 

The children attend school in Switzerland. 







c. Residence ; Mr. Hakim resides offlcTTSly in Gex, 
France, but he also maintains a reaidence^nffi^hran, 
Iran. In addition, he is a frequent vi 8i!toMt& the home 
offices of Stanford Technology Corporat lxM^ WE liR lLogue 
Avenue, Mountain View, California 94040]Mu^B3dition 
Mr. Hakim spends a lot of time in Geneg^pwr^gerland . 

d. Congnercial Structure ; Mr. Hakl3g^sjg.i^lved in a 
number of conmercial enterprises. ih'jj^i scusjiloHs fVhich 
deal with potential exports from th^gOff'^'^tbriranyAfte 
represents himself as the Presidentspf^ulticor'pjlnter- 
national, Ltd., 130 Soray^ Avenue ,^Te)San, Iran>=^In 




HSC 4SSC. 




169 



2. 



C 7157 



>cti>T7c<Mij^^ri«tion« h« lndicat«s that h« la the European 
rapras inH itlva for tha Staifiord Tachnology Corporation 
with a^mall'ing address of P.O. Box 52, 1211 Ganava 
24 Switzerland. ' 

^ of Busines s:' Mr. Bakia has let it be known 

^at bej|is/ currently in the process of selling the 
'^DJgSjlDOOfSecurity Systea of Jthe Stanford Technology 

J§T^^*ron to Iran. This is an integrated security system 
iwhJLcni^als with cooununicaticns survei llance, ■obile «lir «.<'- 

tion f ind ing and telephone- »onitorinc' ^***^*™***' ^*-*-~ 




Hakim is quite anxious" to piay a piVDcnrcole in 

Iranian purchase of American .technology. As a result, Mr. 
Hakim is casting about for contacts in the O.S. Government with 
whom he can find a mutuality of interest concerning Iranian 
&o procure hardware in- the O.S. 




...S3be - 3 1/2 



170 






UNdASSIFIEll 



-^r^}^< U^o 



C 7158 




171 




Theodora G. Shacklcy -^* 

elate Deputy Director for Operations 



C //^ei ?^ P'-r. c^tS fCR *EL£;sc 
C^e - 1 8 APg 1987 









lUUi 



172 



Clno^^^-er Z\ ,^te^ Ql-Q^ 



AX 53-222 
AX 53-223 
AX 206A-132 



UNCU^W^ 



iP.D I'rr^H 



During Initial interview on December 17, 1991, 
General Secord was advised that on a recent CHS Television 
interview with Douglas Schlachter, allegations were made that 
Secord and Edwin Wilson worked together to sell mllltar;' 
equipment in Iran and attempted to obtain Russian weaoons 
from Libya. General Secord said these allegations were 
absolutely false as his relationship with Vilson was strictly 
social. He said he has never entered into any type of business 
arrangement with Wilson, his companies , -or associates. He said 
further that he never participated with Wilson in any type of 
intelligence operations nor has he at any time received any 
money or gratuities from Wilson or. his associates. He said 
he met Wilson about ten years ago at a party, being introduced 
by Tom Cllnes . He had known Cllnes since both served together 
in Southeast Asia, with both later attending the Maval War 
College at Rhode Island^ toget her in 1 971. Secord recalled that, 
"from 1972' to' 197U,he saw Vllson on a social basis about ten 
times, having lunch together. He could not remember ever 
visiting Wilson's farm although Invited many times by Wilson. 
In the summer and fall of 1975, he and Wilson had dinner 
together in Iran, with Wilson's wife present on one occasion. 
Wilson told Secord he was working with the Iranian Secret 
Police and U. S. Naval Intelligence. After returning to 
the U. S. in June, 19'^9, he saw Wilson on a social basis. 
Secord said he has had no contact with Wilson for the oast 
two and a half years and last saw him in Brussels, Belrl'xm, 
in February or March, 1979, while attending an official 
Government function. At this meeting, Wilson asked Secord 
If he was Interested in MIO-25 aircraft. He also recalled 
that in late W79, he attended a MATO conference in London, 
England, and met with Wilson while there. Wilson said he was 
working in Libya. 



During i.ntervlew March 26, 1932, Secord advl 
he had been to Wilson's farm on several occasions with 
wife and children. He admitted going to an office in 
Virginia with Cllnes for a briefing by an associate of 
regarding a "super security project" that Wilson was w 
The briefing related to security devices at one of the 
Shah's palaces, and when Secord realized It was a "cor 
pitch," he terminated the briefing and left. Wilson -i 

v^C. ; Declj.s3;f;oc/Kolease^ a^ jlmfl 
L'nder proviciDns of E.0. 1^55 
.^ ■/ 2. Reger. fhtio-a! Security Council 




sed 

his 
Jlorthern 
■ Wilson' 
orking 

I rani a.". 
merely". 
as tr»s^e 

003S9 




173 



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on that occasion. Zc.^.'t said he and his staff had ccnslderstl? 
Influence over major decisions relating to contracting in Ira-.. 
He admitted ordering at-ut a dozen snail pocket com^juters t;-. = ', 
Wilson was display In-; In Iran In late ig'^S or early 19'"', ser.^ii- 
Wllson a check for 32C0 after receiving the Ite'-.s bv nail. 
Secord recalled meeting Dou^ Schlachter In about l-"? and seeir- 
hlm many tl.mes, always with Cllnes and usually at a bar or 
lounge In Northern Vlr^^lnla. Secord said he bought a townhouse 
at Burke, Virginia, fron Tom Cllnes as an Investment In 19"^", 
subsequently selllnB* the house to Ed Wilson at the sane pries 
he purchased It for. Proceeds of $20,000 he f^ot from sale of 
this house he Invested In a house at Fort Walton Beach, "lorlda. 
He got the 520,000 In cash from v/ilson at a meetln«; at a ::orthe: 
Virginia lounge in about September, 197?. Mo receipt was ?lver. 
for this cash and he thought this' cash transaction was unus-al. 
He said others were prese.n.t when this cash was personally 3ive''. 
to him by Wilson. Secord acknowledged usln.3 a Beechcraft Hare- 
aircraft that Wilson purchased in about September^ 19'?. He 
"sali heflew Wilson over his property once or twice and met 
Wilson's girlfriend, Sottl Barnes, in this regard. The lon^-s-r 
trip he made in Wilson's plane was to ^'^lani, Florida, with To- 
Cllnes, and he made other trips around the Washlna;ton, D. . : , 
area and a trip to Fort Walton Beach, Florida, In it. He sali 
he paid for the gas expended and utilized the aircraft as "'.'.-'• 
asked hin to look after the aircraft periodically and Seccrd 
agreed to fly it occasionally. He said o*lm Rhyne, an associate 
of Secord' s who worked with Secord in the past, also flew t.-e 
aircraft ac Secord' s request. The aircraft was ferrle-! to 
Europe in 1979. Secord denied that his use of '-rilson's aircra:'' 
was for any past or future favors. 



In late 19"? to early 19''9, he met wi 
London on a strictly social occasion. Secord w 
Erich Von Marbod seeing a British Government of 
the Iranian situation. He had drinks with and 
Wilson on that occasion. He met Wilson next In 
a year later at Wilson's request delivered by Z 
few drinks with Wilson and the meeting lasted a 
with only he and Wilson present. 'Wilson appear 
discussed 'Wilson's possibly procuring Soviet al 
said he made no promises to Wilson and did not 
re^ardine the matter. 



'.'llson : 
there w" 



bou 
ed 






1 1 e d w 1 ' 
us s els = 
e s . He 
:wo he 
nervous 
aft. S; 
f urthe: 




174 



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Secord said he and Cllnes. working under Ted Shac!:!;- 



Cllnes 

and Secord^pH^^I^^^B^^^^H He said" at present Cllnes 
one of his Tew close personal friends. He has had no direct or 
Indirect share In Cllnes' conpanles. He said Cllnes told hlr. 
that Wilson was responsible for getting a loan (of about S3CC,CCC) 
for Cllnes which started or assisted Cilnes In financing his 
companies. Secord denied having any Interest In EATSCO. He saH 
he traveled to Egypt with Von Marbod In May, 1<979, during which 
Secord was to negotiate an P-i* aircraft deal with the Egyptians. 
He never heard of Hussein Saleo until 'the summer of 19''9. He 
denied having anything to do with contracting relating to the frelih: 
forwarder as pertains to the U. S. -Egyptian foreign military sales 
credit deal and EATSCO. He said he had no advance Information 
regarding the U. S. -Egyptian foreign military sales loan agreenent. 
Cllnes told him In 1979 that he was trying to get "part of the 
action" as related .to the contract that Hussein Salen had anparertly 
a.cquired with Egypt and mentioned he- was associated- with- a fr-lTl-.": 
forwarding company, the Hobelmann Company. Secord advised he firs': 
met Von Marbod In 19'2 at the Pentagon, working closely with hlr. 
during 1972-197U. He said they are close arofesslonal assocla-?s 
and also. served together U l Iran In the mld-1970's. He aJ<n ^ 

Von on^^BB^BHHHHHBMH^BHl^^H 
In the early 1970 's. From sunner of 19'^3 - spring 1931, he ha-; 
al.TJost dally professional meetings with Von Marbod at the .'er.ta-r-, 
Including work on highly classified projects regarding Esrypt. :-:e 
recalled that he, Cllnes, Von Marbod, and sev<?ral others wer- 
taget-her at various N'orthern Virsjlnla places on a social tasls 
prior to the Camp David Accords situation for casual dlscussl-:-.? 
regarding current events and ether -atters. 3*cor'i adrlrts-l 
visiting Cllnes' Mlddleburs;, Virginia, resltlenc- acout ten ti-.es 
and beln^ at »-.he P.otonda condominium owned b-/ Cllnes or Shlrl?" 
Brill on one evening. He recalled beln.r at nines' for-ier '.'L^r.rz, 
Virginia, townhouse on a few occasions, also. 

During Interview on /ay 2C, 1?'2, Secord nrc-zlie-" 
additional Information re»ardln'3 various areas previously dls- .3^»-;. 
He admitted that Wilson was to take care of financial arran--e-e-:3 
for the 3eechcraft 3aron aircraft and the iras was often nali f:r 
by the service account that had been set u:^ for this aircraft. 
He denied that Wilson obtained this olane at Secord's re-iu-st. 



t 



^NCLASSinED 



0003.91 

'•N DiSStMiVSTEW 



175 



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He said he believes he met Wilson on two occasions In Brussels, 
the lasc occasion being when Wilson mentioned the possible 
acquiring of Soviet aircraft. During the London trip In late 
1978 or early 1979, Wilson picked him and Von Marbod up at their 
hotel and toolc them to his townhouse. After being at the 
townhouse a short time, they possibly went out to dinner. 
Present at the townhouse were Secord, Von Marbod, Wilson, Hobble 
Barnes, Diane Bryne, and one of Bryne's children. Secord said 
he never had any conversations with Wilson regarding the 
Egypt-EATSCO situation and never discussed this situation with 
Cllnes prior to the service agreement being made between Egypt 
and EATSCO. Secord never Icnew the details of Cllnes' association 
with Salem. Secord said he was not associated with any business 
activity relating to nuclear fallout clothing while In Iran and 
has no recollection of any potential deal with Wilson, or 
associates of Wilson, regarding such clothing. 






176 



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umSKE^ 



SEC0R3 AIHCRAr? 'JS£ I'r?CR.'*A'!'ION 

Inquiry at Page 3eechcrart, Inc., Dulles International 
Airport, on January 19, 1932, revealed that In August, l?"**, a 
Beechcraft Baron airplane, Model 53, 19'^7 model year. Serial 
Number TH779 , and U. S. Registration Mumber :J1577S, was pur- 
chased by Service de Plnancement, S.A. of Geneva, Switzerland. 
Ed Wilson made the Initial call to Page which eventually resulted 
In the purchase. Total cost was $1''3,575, paid In three 
Installments (August 3, 1975, September 12, 1973, and September 1^, 
1978). When purchased and delivered, the aircraft had Ugo hours 
of usage already. Primary contact for' invoices and other notices 
and records was Douglas Schlachter of Rosslyn, Virginia. The two 
pilots who flew the plane were Richard V. Secord and Ja.-aes Howard 
Rhyne, and operationally Rhyne was to be the main contact. In 
about May, 1979, Ed Wilson .called Page and said they were plannlnr 
to export the aircraft. In mid-August, 1979, Information was 
received that the plane was to go _to_ Belgium. , In .about SenterSer». 
"1979, the plane 'Was" apparently taken" to Europe. Ownershlo o' tr.e 
aircraft was transferred to Skyways Aviation, Inc., In about 
September, 1979, and Page re;^lstered the plane to this entity 
on about September 10, 19''9. Page records reveal that l.OCT 
shares of eonr.on stock of Skyways Aviation, Inc., woul-l be Iss-e- 
to Ed Wilson In consideration for transfer of the alrcrift to 
t.Ms corporation In connection with the bill of sale. 

Page personnel advise the tle-dcwn fee for t'-.ls i'.Tzrz": 

would have been 2120 a mont:-.. The leechcraft Baron 'f;lr. en-'-.» 
uses about twenty gallons of gasoline ner hour. 'A ■jailer, cf 
aircraft gasoline costs about J2 as of April, 1?'*.' Servlt* -.- 
Plnancement was to make available a ^2,1".". cre'il': l-rcslt Ir. 
connectlon with fuel" and -.alntenance costs for tr.e aircraft ; 
there wer« to "Be two users of the aircraft and f-ey woul-! te 
authorized to sign for fuel and maintenance as necessary. 

James Howard Rhyne, during interview yay ■* , 1*"*, 
advised he has known jeneral Se cord since they se rved tc.-<*::-.«r 
in Southeast Asia in about 1965fH|HilH^|^ he an-! Secorl 
shared ownership In a Mooney slnsle^englnealrcra't (y:?-'/) 
during about 197'»-1977. Rhyne met Ed Wilson through Secord 1- a 
social setting at Wilson's farm. In about 1577_i?"", 3eccr-J '.-'.t 
Rhyne that Wilson wanted Rhyne to look at an alrcrart '•■'.'.sz-. izs 
considering buying. Rhyr.e and 3ecord lockei at the "eecr.cra;": 
2aron and ?J:yne test flew it. He said the plane was loaded >;'.-- 



m mmii 



12 






Kjn 



177 




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"extras'' and Rhyne thought It would be a good Investment. 
Wilson subsequently purchased the plane and Secord asked 
Rhyne to look after it since he then lived near Dulles 
Airport. Rhyne agreed. Rhyne looked after maintenance of 
the aircraft and flew It a total of five to six times, locally 
and to his home area of Lafayette, Georgia. (Rhyne did 
consultant work for EATSCO In about late 1979 In connection 
with their looking to purchase a 707 Jet. He received about 
$5,700 for his work.) Rhyne said he was Introduced by Secord 
to Erich Von Marbod In about 1979 at Manassas, Virginia, 
airport. On that occasion, Secord and V^n Marbod flew together 
for about thirty minutes In Rhyne 's aircraft. Rhyne said he 
was present, along with Ted Shackley and others, at the Pentai?on 
ceremony where Secord received his .second star as an Air Force 
General. 

Analysis of Secord 's flight log for the 3eechcraft 
Baron J voluntarily provided) reveals he used the. plane. on 
'3r~occaslons' during the period August 16, 197? _ Autjust 25, 15"?, 
for a total of 59 flying; hours. 



^nmsfm 



F B 000394 



178 



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UNCUSSIHED 



Ssr -31-^ 



StCfiET 
NO FOREIGN DiSScMINATiON 



CLIKES IMTZHVIEV 

During Interview on March 23, 1932, Thomas G. 
advised as follows* 



Cllnes 



He said In approximately August, 1981, the "New York 
Times" newspaper started a series of articles about Ed Wilson 
which linked Cllnes to Wilson. As a result, Hussein Salem told 
Cllnes that Egyptian Government officials were very upset that 
Cllnes was associated with EATSCO, due to his reported Wilson 
connections In the past, as this could possibly have some 
ramifications of an adverse nature for the Egyptian Government. 
As a result. In September, 19dl, Salem approached Cllnes and 
wanted him to sign a document which was written In legal terms 
by Salen which In effect put Cllnes on a four-month leave of 
absence commencing on approximately September 15, 1981. After 
the four-oonth leave of absence was over, Salem told Cllnes that 
the Govermnent of Egypt had had It with Cllnes due to further 
Innuendoes about Chines' association with Wilson, and It would 
-b« necessary for Cllnes to terralhat'e any ownership he had with 
EATSCO. Cllnes acknowledged that at that time his Interest In 
EATSCO was a 49X ownership. As a result, he said In approxi- 
mately mid-January, 1982, he severed his relationship with 
EATSCO. He said Salem agreed to buy out Cllnes' Interest In 
EATSCO and the flnallzatlon of this purchase was still In a 
pending state. He declined to provide Information as to the 
amount of the settlement pending. 




Cllnes said in the past three years his foreign travel 
has mostly been to Europe, Mexico, and Egypt. His travel to 
Europe and Mexico was In connection with API Distributors, Inc., 
and his travel to Egypt was In connection with EATSCO business. 




■ ■■'■ ■'''^'>t2iS-A(i^l/z£, 
'■::i-c^- prc.'iii ins of £.J. \m\ 
2. Re^sr, f;.;;ic.-| Sac:- 



uNCussra 



~"'HoW6'i"°" 



179 



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DNCyWIEfio^ 



Cllnes said he heard Hussein Salem's name "around 
town" m about the spring of 1979, and he also heard tnac 
Salem was living In the Ramada Inn at Tyson's Comer, Virginia. 
Cllnes said that Ramada Inn had been a CIA "watering spof In 
the past. He said he heard that Salem had an office next to 
the Ramada Inn, at 7777 Leesburg Pike, Palls Church, Virginia. 
Cllnes was associated with Systems Services International, 
Inc. (SSI), at that time, and he went In and saw Salem at his 
office and provided him with one of his brochures. He told 
Salem that he bad heard that Salem was holding a contract with 
Egypt for the shipment to Egypt of a very large amount of 
U. S. -purchased military equipment and he wanted to assist 
Salem In connection with this contract.' Cllnes told Salem 
that he had worked with Rolf Graage with the R. G. Hobelmann 
freight forwarding company In Baltimore In the past and had a 
good contact In this regard. Salem liked his SSI brochure 
and Indicated he wanted the Independence of working with a 
person like Cllnes rather than working with a large established 
"freight forwarder.' Cllnes noted that .the brochure. he provided 
Salem said that Cllnes had good contacts In the Government 
Including at the CIA and at The Pentagon as well as elsewhere. 
Salem realized that he (Cllnes) had contact with the P.. G. 
Hobelmann network and that they could handle the Job. Salem 
also realized that he would be In tight control of the freight 
forwarder by having Cllnes as a "9* co-partner In what 
eventually became EATSCO. Subsequently, he put up approximately 
$'•9,000 and Salem put up approximately $51,000 to establish 
EATSCO. There was about a month of negotiation between his 
attorney, Barbara Rossottl of Washington, D. C. , and Salen's 
attorney, a first name unknown Zuckerman, from New York City, 
Mew York. Prom talking with Salem, he learned that Salen was 
a businessman who had worked In Europe, primarily In Switzerland, 
In the past. Salem Implied that he had been In the United States 
for several months when Cllnes Initially met him In about the 
spring of 1979. 

Cllnes said EATSCO was Incorporated In Delaware in 
August, 1979, and Is an American entity formed by two American 
corporations: Systems Services International, Inc., which was 
totally owned by Cllnes, and Tersam, USA, which Is totally owned 
by Salem. 




F B 00040S 



180 




AX 58-222 
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He was concerned that In his dealings with Salem In 
forming EATSCO that there be no silent partner, or behind the 
scene owners, who he was not aware of or familiar with. He 
understands that Tersam was possibly originally a Pamamanlan 
compiiny, and In his negotiation with Salem, he told Salem to 
set up Tersam, USA. When Tersam, USA, was set up, he said he 
would go Into a partnership business with Salem but would not 
do so until this had occurred. He insisted on this In order 
to protect himself from Salem having any possible silent partners 
or bacicers who Cllnes was not aware of. 

Cllnes told Rolf Graage, who Is the owner of the . 
R. G. Hobelmann Company, that If he became a co-partner with 
Salem, Cllnes would favor Graage as a freight forwarder In 
connection with the contract with Egypt for shipment of U. S.- 
purehased military equipment. Af^er Salem saw Hobelmann 's 
facilities, he agreed to go along with favoring Hobelmann 
rather than with any bigger firm as Salem feared a larger firm 
might try to taice o^ver his (Salem's) business. 

Cllnes said that the contacts with the high officials 
of the Egyptian Government were Salem's, and It was Cllnes' 
Impression that Salem had contacts of the highest level with 
that Government. Cllnes said he met General Abou Ghazala, the 
Egyptian Military Attache In Washington, D. C, through Salem 
and knows General Ghazala well. Cllnes said that as an owner 
of EATSCO, he signed the EATSCO service contract with the 
Egyptian Government, and he noted General Ghazala signed It 
for the Egyptian Government. (General Ghazala Is now Defense 
Minister. ) He also knows Egyptian General Mounlr Sabet from 
Sabet's association with the Egyptian Military Attache's Office 
In Washington and resultant contacts with EATSCO. He was al-so 
familiar with (Kamal) Hassan All who also had contact with 
EATSCO m the past. (All Is now the Egyptian Foreign Minister.; 
He said S*l«m handled all the major contacts In connection wit^ 
EATSCO and its business. 

He recalls that he met Erich Von Marbod at The Pentazon 
with Salem on one or two occasions. The contacts with Von Marbod 
were In his position with DSAA as pertained to the EATSCO 
contract, and the meetings were official meetings. 




"""m 



f 6 000406 



181 



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^ususm 



Clines said that General Richard Seeord Is a "super 
^«l elqa* friend of mine." He has kr.cwn Seeord since 1967 
Hand he has maintained contact with Seeord 
over CIIB years': — M¥ fias had no financial association with Seoord 
In the past or presently except he believes he sold a townhouse 
In the Burlce, Virginia, area to Seeord In the past. He posslSly 
made $2,000 on this sale and thinks Seeord was assigned in Iran 
at that time. 

Clines said he possibly first met Erich Von Narbod in 
Southeast Asia in the late 1960's when Von Marbod was possibly 
the Comptroller with the U. S. Department of Defense. He 
recalled that Von Marbod was closely associated with the Vietnam- 
Laos situation from a logistics standpoint. Von Marbod is "a 
friend" of his but he has not talked to him in about one to one 
and a half years. He has been out with Von Marbod socially on 
occasion but does jiot consider him a close social friend. He 
has not been to Von Marbod 's home, but said Von Marbod may have 
"dropped by"_Cllnet ' _place_on _one_occaslon. . . .. 

Clines believes he initia lly met Ed W ilson in about 

196ii when Cline^ 

^ Te said Wilson did not work with him In 
|He has not seen Wilson for a couple of years, and believes 
Last saw Wilson prior to his being indicted. He last talked 
to Wilson about nine to ten months ago telephonically. 

Clines said Wilson was instrumental in Clines' 
obtaining a loan which helped him get started in business after 
Clines' retirement from CIA. This occurred in 1978 and the 
loan has since been paid back to the people it was borrowed, fron 
that Wilson put Clines in touch with indirectly. The loan was 
primarily to set up International Research and Trade, Limited 
(IRT) whi«h became an "umbrella" company for two other companies 
of Clin«»', SSI and API Distributors, Inc. He said the above 
three conpanies and EATSCO were the only four companies that :-.e 
has set up. To his knowledge, Wilson did not even know the r.a-e 
of EATSCO as being a company of Clines. 

Clines said he owns two condominium apartments in t^.e 
Rotonda at McLean, Virginia, a house in Vienna, Virginia, where 
his wife resides, a house In Mlddleburg, Virginia, where he 
resides, and a house at Shawnee Land in the Shenandoah Valley 




31 



S£C5£:r 
F B 000407 



'm, 



182 



AX 58-222 
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"fl&mim, 



near Winchester, Virginia, which he rents out to one party 
year-round. He said at one time he owned a townhouse on 
Glengyle Street near Vienna, Virginia, but sold this sometime 
ago. 




B 000408 



183 




Rtftrm 







QhQ-^ 



FEDERAL BL'8EAL-.QF I.W ESTICATIO.N F B 

Aiexanaria, Virginia 
August 28, 1984 



THOMAS GREGORY CLINES; 

HUSSEIN K. E. I. SALEM; 

ROLF GRAAGE; 

EGYPTIAN AMERICAN TRANSPORT AND 

SERVICES CORPORATION ( EATSCO ) ; 

, HOBELMANN AND COMPANY, INCORPORATED 

FRAUD AGAINST THE GOVERNMENT - 

DEPARTMENT OF DEFENSE; 
FOREIGN CORRUPT PRACTICES ACT 



Reference is made to previous letterhead memoranda 
submitted in this matter, the most recent of which was 
dated February 1, 1984. 

SYNOPSIS OF PROSECUTION, CIVIL SETTLEMENT ACTIONS, AND 
PAYMENT TO FEDERAL MARITIME COMMI-SSION : 

During the period July 22, 1983, to January 
16, 1984, three corporate and one personal Federal felony 
convictions were obtained on guilty pleas in United States 
District Court, in the Eastern District of Virginia, 
at Alexandria, in connection with the EGYPTIAN AMERICAN 
TRANSPORT AND SERVICES CORPORATION (EATSCO) investigation. 
The corporate pleas were by EATSCO; SYSTEMS SERVICES 
INTERNATIONAL, INCORPORATED (SSI) (a 49 percent original 
stocicholder in EATSCO); and by AIR FREIGHT INTERNATIONAL, 
INCORPORATED (AFX) (a fully-owned suosidiary of the R. 
G. HOBELMANN AND COMPANY, INCORPORATED, whicn was the 
designated freight forwarder for EATSCO). HUSSEIN K. 
E. I. SALEM, an Egyptian national who was the President 
and original 51 percent stocJtholder in EATSCO, entered 
the personal plea. 



THIS DOCUMENT CONTAINS NEITHER 
> RECOMMENDATIONS NOR CONCLUSIONS OF 

THE FBI. IT IS THE PROPERTY OF 

THE FBI AND IS LOANED TO YOUR AGENCY; 

IT AND ITS CONTENTS ARE NOT TO BE 

DISTRIBUTED OUTSIDE YOUR AGENCY. 




® UNClASSra 



184 



UNCUSSlfltl^ 



F B 220? 



RE: THOMAS GREGORY CLINES; 
ET AL 



In association with these pleas, an aggregate of 
$60,000 in fines, $4,044,000 in civil claims' settlements, 
and 576,000 in payment to the Federal Maritime Commission 
for possible violation of the Shipping Act of 1916, accrued 
to the United States Government. All of the pleas were 
in connection with Plea Agreements wor)(ed out by the 
various defendants with representatives of the U.S. Government. 
Each plea entered related to charges of filing false 
statements to the U.S. Department of Defense, Defense 
Security Assistance Agency (DSAA), regarding the cost 
of shipping military goods to Egypt under the Foreign 
Military Sales Program, during the period on or about 
November, 1979, through on or about December 31, 1981. 

(The above-mentioned fines, civil claims' settlements, 
and payment to the Federal Maritime Commission total 
an amount of $4,180,000.) 

DETAILS OF PROSECUTION, CIVIL SETTLEMENT ACTIONS, AND 
PAYMENT TO FEDERAL MARITIME COMMISSION ; 

On July 22, 1983, at U.S. District Court (USDC), 
Eastern District of Virginia (EDVA), Alexandria, Virginia, 
HUSSEIN K. E. I. SALEM, individually and as President 
of the EGYPTIAN AMERICAN TRANSPORT AND SERVICES CORPORATION 
(EATSCO), pled guilty to a multiple-count Criminal Information. 
The Information charged in pertinent part that SALEM 
and EATSCO agreed to and did file false statements with 
the U.S. Department of Defense (000), Defense Security 
Assistance Agency (DSAA), regarding the cost of shipping 
military goods to Egypt. 

From in or about November, 1979, through on 
or about December 31, 1981, there were 34 shipments on 
which false invoices were submitted. Those invoices 
showed inflated costs of approximately $8 million. 

Pursuant to a Plea Bargain Agreement reached 
between thm United States and the defendants and approved 
by the Court, the defendant, SALEM, was sentenced on 
both counts to pay a fine of $25,000; the defendant, 
EATSCO, was likewise sentenced to pay a fine of $20,000. 
Further, in settlement of all civil claims by the United 
States against the defendants, SALEM paid the United 
States $3,020,000. The fines and civil settlement were 



IINCUSSm 



185 



\iNCUSsffe 



RE: THOMAS GREGORY CLINES; r n O r ^ T 

ET AL ' D 2ZU5 

satisfied by presentation of certified checks to the 
Cleric of the USDC and to the U.S. Attorney's Office. 

(The three-count Criminal Information charged 
SALEM and EATSCO in count number one with violation of 
Title 18, United States Code (USC), Section 371 (Conspiracy); 
SALEM was charged in count number two with violation 
of Title 18, USC, Section 1001 and 2 (Submitting Falsely 
Stated Vouchers); EATSCO was charged in count number 
three with violation of Title 18, USC, Section 1001 and 
2 (Submitting Falsely Stated Vouchers). 

On September 1, 1983, AIR FREIGHT INTERNATIONAL, 
INCORPORATED (AFI ) , pled guilty in USDC, EDVA, to a one-count 
Criminal Information charging AFI with filing false invoices 
with the DOD, DSAA, relating to the costs of shipping 
military goods to Egypt under the Foreign Military Sales 
Program (FMSP). 

AFI was fined the maximum penalty of $10,000 
pursuant to a Plea Agreement between the United States 
and AFI. The agreement provided in pertinent part that 
AFI would pay the United States $924,000 in settlement 
of all civil claims; and pay $76,000 to the Federal Maritime 
Commission for possible violations of the Shipping Act 
of 1916. 

The Criminal Information charged that from 
in or about November, 1979, through on or about December 
31, 1981, AFI filed false invoices which failed to disclose 
profits made by AFI for the costs of ocean freight, pac)cing 
and consolidation relating to the shipment of military 
goods to Egypt, in violation of Title 18, USC, Section 
1001. 

(AFI is a wholly-owned subsidiary of the R. 
G. HOBELMUm AND COMPANY, INCORPORATED, which was the 
designated freight forwarder for EATSCO regarding Foreign 
Military S«les equipment shipments to Egypt.) 

Checlcs satisfying the $10,000 fine, $924,000 
civil claims' settlement, and $76,000 payment to the 
Federal Maritime Commission were produced in connection 
with this plea being accepted by the judge on September 
1, 1983. 



UNCLASSIFIED 



186 



liEikr^B , 



2204 



RE: THOMAS- GREGORY CLINES; 
ET AL 



On January 16, 1984, SYSTEMS SERVICES INTERNATIONAL, 
INCORPORATED (SSI), pled guilty in USDC, EDVA (Richmond, 
Virginia), to a one-count Criminal Information charging 
SSI with filing false invoices with the DOD, DSAA, relating 
to the costs of shipping military goods to Egypt under 
the FMSP. 

SSI was fined the maximum penalty of 310,000 
pursuant to a Plea Agreement between the United States 
and SSI. The agreement further provided that THOMAS 
CLINES, on behalf of SSI, would pay the United States 
$100,000 (within 30 days) in settlement of all civil 
claims. 

The plea of guilty was entered by the President 
and sole stockholder of SSI, THOMAS G. CLINES. SSI, 
which is no longer in business, was a 49 percent stoc)<holder 
of EATSCO in the past. 

The Criminal Information charged that from 
in or about November, 1979, through on or about December 
31, 1981, SSI filed false invoices with DSAA, which invoices 
they then and there well )tnew were false in that the 
invoices failed to disclose profits from the ocean freight, 
pac)(ing and consolidation costs of shipping military 
goods to Egypt, and thereby misrepresented the actual 
costs of the ocean freight, pac)ting and consolidation 
(violation of Title 18, USC, Section 1001 and 2). 

A certified checic in payment for the S10,000 
fine was paid to the U.S. Government at the time the 
plea was accepted by the judge on January 16, 1984. 

One certified chec)c and two treasurer's chec)cs , 
having a combined total of $100,000, payable to "Treasurer, 
United States" were in the possession of the U.S. Government 
as of February 23,. 1984, having been provided in connection 
with settlement of the civil claims against CLINES' company, 
SSI. 

OPINION OF ASSISTANT UNITED STATES ATTORNEY ; 

On July 18, 1984, Assistant United States Attorney 
(AUSA) THEODORE S. GREENBERG, EDVA, Alexandria, Virginia, 
advised a Special Agent of the FEDERAL BUREAU OF INVESTIGATION 
(FBI), that based on the above prosecution, civil settlement 



UNCLASSIFIED 



187 



DHtUSSW 



F B 220S 



RE: THOMAS GREGORY CLINES; 
ET AL 



actions and payment to the Federal Maritime Commission, 
the fraud investigation regarding EATSCO and Icey persons 
and/or corporate entities associated therewith, has been 
completed. 



ONCLASSIFIED 



188 



*U5X/flfD 



U.S. Depart! t of Justice 

Federal Bureau of Investigation 






Alexandria, Virginia 
January 7, 1986 ■ 



'MAJOR GENERAL RICHARD VERNON SECORD 

UNITED STATES AIR FORCE (RETIRED); 

THOMAS GREGORY CLINES 

BRIBERY: CONFLICT OF INTEREST; 

FOREIGN CORRUPT PRACTICES ACT 



f^ 



SO -yA 



Reference in nade to several investigative reports 
previously submitted relating to this matter, the last 
one having been dated March 14, 1984, and bearing the caption 
"THOMAS GREGORY CLINES; MAJOR GENERAL RICHARD VERNON SECORD, 
UNITED STATES AIR FORCE; ERICH FRITZ VONMARBOD ; BRIBERY; 
CONFLICT OF INTEREST; FOREIGN CORRUPT PRACTICES ACT." 

Captioned investigation has been inactive for 
an extended period of time pending resolution of a separate 
interrelated case entitled "THOMAS G. CLINES; ET AL; MISUSE 
OF CLASSIFIED DOCUMENTS INVOLVING NICARAGUA; ESPIONAGE-X; 
PERJURY, Office of Origin: Alexandria." This particular 
case has recently been resolved without any prosecution 
resulting. (If prosecution had resulted and been successful, 
this could have had a bearing on captioned case). 

On December 16, 1985, Assistant United States 
Attorney (AUSA) THEODORE S. GREENBERG, Eastern District 
of Virginia, Alexandria, Virginia, (who has been the prosecutor 
assigned to this case for several years) rendered an opinion 
to a Special Agent of the FEDERAL BUREAU OF INVESTIGATION 
(FBI) that extensive investigation conducted by the FBI 
in this matter did not produce sufficient evidence to obtain 




UNCLASSIHED 



Hto: 



•Til'flHlif/dttloril^'nor concluiIonB or ' 
■mm mv. It U th* ^'^tHfoi 



189 



UNCLASSIFIED 



RE: MAJOR GENERAL RICHARD VERNON SECCRD 



a conviction of the subjects. He said no further invescigaticn 
is warranted 'and he considers this matter closed. 

In view of AUSA GREENBERG's opinion, the FBI 
is conducting no further investiaacion regarding this rratter. 



ft SO 3^ 



UNCLASSinED 



190 



UNGlASSIflED 



< '.III .Mi.N ii-. ill . >r.K . . ...■ .- I . '. 

I 1> It I III Mlv Tlllln ' V 

n 1 HMiM 

II II 1.1! \MMI -► la Ih fM I- \ 



Geneva, December 30, 1983. 
WlZ/mp 



Abdullah Said Bugshan L Bros. 
P.O. Box 8399 
•Riyadh, 
Saud i Arao i a 



Re: Security Project for Dhahran Airbase 






3/-a7 



Gent 1 emen : 



SI 



We understand that you are acting as agent for Stanford 
Technology Trading Group International (hereinafter "STTGI") 
for their participation in the above described project and we 
are pleased to provide you with the following additional 
information to facilitate your efforts to secure this project 
for STTGI. 

Our affiliation with STTGI. its associated and predecessor 
companies, dates back to 1971, In the intervening years, we 
have provided various financial services to the group, 
including acting as one of their bankers. With assets 
available to us of approximately one hundred million Swiss 
.-ranc:, we have provided ''inancing for various of their 
projects in the Midole East, Af-ica ana the Far East, which 
projects included systems in the areas of security, receiving 
stations and satellite imaging processing and wliich projects 
generally amounted to several millions of dollars. All of the 
projects of which we have knowledge were successfully complete: 
by the group. 

Should you require additional information about our company, 
you may obtain it either by directing your inquiries to us, to 
STTGI, or to any of tne banks with which we v/ork, the names and, 
addresses of which are enclosed on the attached sheet. 

Yours ver y truly, 

CQMPAGNIErOE/SERV bCES FIDUCIAIRES S.A 





- ■"."■i^o^:^ ^c'M^^i 



ICUSSIflED 



191 



31-30 



CLASSIFIED AT TIME OF PUBLICATION. 



193 



CHAPTER 22. THE ENTERPRISE 



82-684 0-88-8 



394 



0i^i>LM55iiiliiJ 



ct Vr' CMWT iui»a< cmi oito twzztM 






371-1 



1211 GLNRVE 1 



S;:r^ 1» 14 octobr* 198S 



^ j 

MTRRILL LYSai 

1^, route dp Florlw.int 

l^lt CENtVB 12 



Sit tftitlUn tnbfl dl« gtwOntcht* AuikunK. Glt)«ht«it;g 3«»<ttt*n wir una, 3I« 
nod) tuf 4i« ObU«h«n Verothait* iufmcrkttm xu mtchtn. 



Nout tvo.i« rnoon«ur tft vou* rtm«(tr», tA (nnai*, 1«l rtnitlgn«mtnl« d4t<r4t. 
Cn m«m« ttmM nout nous otmtntn* d'tttlrtr voir* «n«ntion lur i«t r**«rv«t 
d'bitga. I 



VI eempl«9Mtme. In vl* t*««rviltm«ril« conrid«ni!tl« • Mnit ilcun* rtlp«nM- 
billlt nt g*r«nil« d« e*n* notlrt. I« |nformi<lcnl ricMsrccI, prtgindovl dl l»rn« 
uto diicrtto • riitrvalA 



^••l* nni •nelo«*d lh« r«4u«*t«d r«^0(l TTt* infcy mitlon It >vOB'!td undtr ulual 
r«««ry« tnd wittoul rMoentlbKny on our p«ft. 



ACE/JSA-K/6J0 




m?{fi^ 




195 




7o«l< •»><<•'>«" kAwkan, 'nijMi*^ «* IM liiAMi mtttiati Mr 
,>•*/> IW< '"W • M«l ^WtaM* »*MM( *«/«•)< M«l*«, l*n««n tart««f 



»io6'« ftw«pa. • ttMM m »*vtiioxi mimw « ((At i«i«>iwl* <•«»• , 

<i t«da. v« '• <f(t/««i'«">« t IM** ttnHtmann mK*imtl»it » mam | 

• |iM»it/r« iirtttnut * ninm<ni iw Qvtii* iDlotmuia*! nd mm « ' 

vwl u'^ !<'(•. ScvtU'K* t«Alr« I C0"MC«AJi wA e«mai*m«nl* AMI* J 



COMPAGWI E DG SERVir.RS FTnuTU] 



Socl4t4 cr^fl 1ft 13 ««ptembra 1971 1 avc< 
damier chAn^anent 33>Ol.l979i les actions 
WilUrd-I. ZUCX£K. 



0^8 • m*t„rt ti — '• WM Pit r»ip'«M«>« <• '•"t tpetloMl^i 
p*.Un"«M. >«• '•■»»-«'«m«nu iu*>v<1| t^MVX lur Mt »'C<«lio^ 
rtuflM* **f 4*1 P*n«ivt4t '«pultM ««"« M Id. l«u« >«u, bJ 

<(MI*M i UCt ttl1««»<— Al *«tMMHM •! MM Wm>.i.,i,| ^ ^ 

MtWM (• Mtrt f«l k MAI «MUp>«t t •#«« vttt* MnoAA*!, mmui 
«<M '•Me^MOW «M eaA«*4u«Ac«t P0V4AI '4iuXw «* i»M eomnlii 

UMN t 4m (I*<t M««* >«• MVTOfli neul t"t<|« i r(„|^ ,„ 

<*AMV4<n«n«b « !>««« tM>*AieA& sM <««,«»« j« Mmum «. « 
mM«t M 4*1 »*rMAM« lntf«v«M cl-«*'4c i fti«A|« 0* <«*<im«m 
r«<<Mlt/t*««><U M M(*M <*AA4t 4»« M' <*«<«n4«. 



rh» <««ofi 9:'*" Mow It biM4 on «• •» u < <••• not •«pr«i*Ai ««« 

»wn »»M«A) Ml VI* (AlomttOA r«c«<>M »«• Ulif« p«n,*, a,^ (^ 
e«A«4«'«< '•AMM « M |I<*A to •Irtft Mii*M<iM »n4 «i(Mm« w^ 
Mmviit/MM w iMMm'WUty Ml M« »«^ 'utfitimtr*. ■ « )«> ,(«f 
9«it g<« *tdMr>»ly. trtf •• v*"* 'M«* M fi*i« ,«, MbW IM tAf 

M''»«3V»'>e»« ■"'«* ITUJM (AM IfOAl A| trKI>fllul«A I* U<"4 P«rW«. 

Wt (tiii'xl y<iJ<n>M In f«««<1 10 tfi'i tAicmiii^ii in9„,4 >« »«« «« 
Mr •^•"IM lA »• UltMKtA •( lAt Hi*iKI t« ytul *^^vUy (I t l«l*> 

l<*Mll iht/WtW* •• 'O^Mt* U f<>« .vo. • >.«• «^. 




un cjpit«l-«ctloiM i]m PRS 41S'0OO. — , 
•ont <Ut«nuea par l'<poua« de Hoi\sl«ur 



L* but da 1« AocKt^ conslsca A donn«r tout consclls en m*tlir« fltcale, fLnan- 
cl&r*! Juridlqu* et Aconomiqu* et g^rer Cou« bl«na pour 1« car>pt« de tiart. La 
•ocKti pourra pr«ndi*« Agalement tout«« 'participation* k toutaa antreprisas f !• 
nanciirea, noblliirea ou inaobiliirea. j 

Noua aonrtos «n ralation d'affalra avee la aocl^ti prdcitte depuia le 4 d^cnnbra 
1978 at lea affalrea tralt^ea s« aont d^roulfca k noire entiire aatisfactlon. 



La aoel^cd est »4rieuaeDiasnt dirig^ et adnlnistr^ et aelon noe expdrlencea, 
elle na aouacrlra aucun engagement <|u'elle ne pourrait paa tenir. 



a.g.n.r. 




8.^-684 195 



*u«An*«t* <•»!/>•«• 4«n*nM«u'>**<i« ••»•«<•«/>»<« wqwriff 0S.l0.8S 



e«lyn/DM/OlU: On6vr , Ic U.lO.85 

AOK/Jb/vv /620 



196 



DNClASSIFe 



EN 00 



ComoaonU On 'Sftrv^e** Flduciarti 

I 

Company crtatad on S«ptember 13th, 1971, with i cjpital »nd $h»r« 

totalling 415,000 lijt changa made on 23.01.1979, the sharts ar« held by 

♦he wife of Mr. Wlllard I. Zucker. | 

The company's goal 1$ to give all, advice on fiscal, financial, Judicial 
and economic matters and handle all financial goods of the customer. The 
company would also take part or participate In any financial and real estate 
actions or enterprises. j 

We have been In business with the already mentioned firm from December 
4th, 1978, and all business has been perfectly carried out. 

! 

The company is efficiently and seriously run, and we believe that It 
would engage In no comfflitment which It would not be able to honor. 



yNMSSiRF!) 



f 



197 



i>Uit I OL Ul aUc^il vCi Hk^ Jh 



.Cr*,ro(s-u 



vtM«K !• i.C« nO>«& QIAKhI It kC^SVt CO'XCI'ONMN'T A u t»M*NnC 



coii^AONii oc •envicci riouciAiMe 



. I UNCLASSIFIED 



^A(J6 2 



Th« eewpany h** no r«al tata^* holding*. 

Butinooa promlaot ard rontod. MontMy ront amount* to SFr, 4.400. 
3alo« aro rapraaantad by ^%*%, oemmlaalon and Intaraata. 
Sala* ^or I9TS wara aatlmatad at SFr. 3.000.000, In MAC at SFr. 
4.3S0.000> In 1)«3 at SFr. S.4S0.OQO. and in 1984 at SFr, S.4$0.000. 
Tha •*rr\\r\%% poaition la oonaidara^l Qood. 
TKa financial altuatien la «enaid«rad aound. 

I 

TaK figuraa (in SFr.): 

..--,->.---.- ,1 

Ou« to official ragulatlons, no tak flgurat ora avallabla. 



Bankingt I 

"Cowpagnla da lan^uo at d ' Xnvaatiaaamant. Oanava. 
^-Swiaa Crodit« CauM-Vlvaa/Ganava. 
>Trado Oavalopmant Bank* Oanava. 
•Rapublle National Bank, Naw-York. j 

Agditers: ; 

Plduoiolr* Audifid, Fribourg.- 



HISTORY I 

I 
Joint stock eempany. Ragiatarad In' th* Trad* Ragtatar for th* flrat tlm* 
on 13/09/1971 
Th* oompany 1* nawly aatabliahad. 

Board of Diraetor*: 



JEAN Of SENAKCLCNS, fro« Oanav*, in ChBna-Bniigarlas, ebalrfflan with 

individual aignatura. 

H« wa* born in 191C, HMrriad and fathar. Jurist, ha la diraetor of seme 

oempaniaa. 

ALFRED 9T0HLCK, from Frattaln, in Pranglna, mambar of tha beard «lth 

Joint •tgnatwra. j 

Manag*Ni*ntl ' 

WILLARO Z. ZUCKCR, from USA, in Barnax, managar with individual 

•ign«tur*. 

ROLAND FARINA, from and in Banava, aaalatant managar with individual 

aignatura. | 

OPCRATION 

! ■ ■ 

Ca handalt alch hiorbai um ain klainaraa Untarnahman von garingar 
ttrtliehar Badautung. 

Th«r« 1* (ara) IS •«ploy**(*). |j 



ICIASSIFJED 



198 



JINCU^SintD 



1 



CCS«,otNliH, 



.: Dun&Bradstreet repor 

I 
1 

coMPAONie o( tsKvicet noucjAimt s'a paos 3 



8w«ln««« prtmltfta %r% loe«t«d at th« abevs addraaa and ar« ranttd. 

Loca^lan: I 

Bualnaaa pramlaaa ara loeatad on tha outakirta of tha eity. 

Branchaa! 

Non*. '^ I 

APFIUlATeS ! 

- TftAOe ArFILIATES SA, aamo addraaa, which «lll 
ba ll^uldatad. \ 

- CSW INVESTMENTS LTD, In aarmudaal 



mmmw 



199 



Qa-S 



CLASSIFIED AT TIME OF PUBLICATION. 



200 



ilNPiSSIflED 



C^^ 




Geneva, December 30, 1983. 

Wl2/mp 



Abdullah Said Bugshan & Bros, 
P.O. Box 8399 
Riyadh , 
Saudi Arabia 



.1/. III. .-i.u. .1 r..- 



nut I ii»Mi\Tiii'iit . \>f:ii.,r\i ► u>i 



TKI.H-lliiSfill.-.-. IT-.N-; 






CSE 



71 



P3-y 



Re: Security Project for Ohahran Airbase 



Gent 1 emen : 



STG 



9141 



We understand that you are acting as agent for Stanford 
Technology Trading Group International (hereinafter "STTGI") 
for their participation in the above described project and we 
are pleased to provide you with the following additional 
information to facilitate your efforts to secure this project 
for STTGI. 

Our affiliation with STTGI, its associated and predecessor 
companies, dates back to 1971. In the intervening years, we 
have provided various financial services to the group, 
including acting as one of their bankers. With assets 
available to us of approximately one hundred million Swiss 
Francj, we have provided financing for various of their 
projects in the Middle East, Af'-ica and the Far East, which 
projects included systems in the areas of security, receiving 
stations and satellite imaging processing and which projects 
generally amounted to several millions of dollars. All of the 
projects of which we have knowledge were successfully completed 
by the group. 

Should you require additional information about, our company, 
you may obtain it either by directing your inquiries to us, to 
STTGI, or to any of the banks witti which we work, the names and 
addresses of which are enclosed on the attached sheet. 



Yours very truly. 



CgMPAGNIEpOE 




wlllard I. ZutVer 
Enc 1 . men t . 




ES FIDUCIAIRES S.A. 







IINCIASSIFIER 



(^ 



201 




UNCUSSIHED 



SfG ■ U4 



Through its internationally trained staff and portfolio companies, STTGl offers a full range 
of fiduciary and financial services designed to serve the needs of international clientele. 
These services include: 

• Investment Management 

Administration of a client's assets on an advisory or discretionary basis is in accordance 
with the client's objectives; that is, either to make recommendations to the client or to 
exercise our discretion on the client's behalf. 

• Commercial Services 

STTGI can assist companies in establishing and developing business relationships tor 
the licensing of industrial property such as patents, know-how, and trademarks, tor 
arranging joint ventures with foreign participants and generally to represent the 
interest of clients in Western Europe and the Middle East. 

• Banlcing and Financial Support 

STTGI can provide unique banking and business financial services offshore and in 
Europe for International business operations. Under proper circumstances STTGI can 
also provide financial support that might not otherwise be available for proiect 
implementation. 

• Tax Consultancy 

STTGI can provide unique tax consultancy services based on the use and availabilit\ ut 
its international investment management operations. vC~) 

-=.0 




i'^v^ 



202 




UNliU^iiintu 



S TG 



U4S^ 



International Trade and Commerce is a complex business even when goods and services 
are bought and sold through exchange of currency. Often bartering or off-sets are 
necessary to acheive a successful transaction, and this is an even more complex affair. 
STTGI's staff and portfolio companies can help in the following ways: 

• Bartering and Off-Sets 

Through its worldwide contacts, STTGI is aware of diverse needs and available 
commodities, goods and services. Through creative and skillful bartering and off-set 
arrangements these elements can be brought together to achieve a successful transac- 
tion for all concerned. 

• Shipping and Freight Forwarding 

International trade involves customs, shipping and freight forwarding which can be 
frustrating, time consuming and costly. STTGI's experienced staff is available to ease 
the burden in these matters. 

• Product Sourcing 

Quality products, components and services at a competitive price are vital ingredients 
of any successful business. STTGI's personnel have years of experience in finding the 
right product at the right price on a world wide basis. 

• International Marketing And Sales 

STTGI has an extensive international marketing network, and its staff members, many 
of whom have lived and worked overseas, have a broad marketing and technical sales 
backgrotmd. These capabilities can be made available to your organization to provide a 
dynamic and cost effective international marketing and sales team. As a member of 
STTGI you can reach new markets with your products and services, and you will have 
the opportunity to work with other STTGI companies who complement your own 
capability. 



UNCLASSIFIFD 



203 



UNClASSinSD 






(c. 



^N 



007 



TO: Secord Main Witness File 
FROM : it'^i>*^i^Mi1.ohy ' 



99-6 



RE: 3TTGI Phone Records 



DATE: October 6, 1987 



Enclosed phone logs correlate with documented noveaen't 
of Enterprise funds through Secord/Hakin account network. 






■-.'-.- L- c ^ ^ - ■■ I •- • ^S v^ S ' ( J.-c U''' 



„^^i^,^^:, V 







.^^^ 



vs 



^-•" 



«msw 



•^7^3 



204 



FOR SECORO 



FROM 



yNCLASSIFlEO 



:N 



FROM NUMBER TO NUMBER TIME LEN 



oo; 



** DATE OF CALLS: 
^.■\\^'>'^e.(^ - MCLEAN, VA 

05/30/85 

05/31/85 

** DATE OF CALLS 
SANTRB, FL 

10/04/85 

** DATE OF CALLS: 

_ . _ TmCLEAN, VA 

S\ vGl < MCLEAN, VA 

IjICLEAN, VA 

■-■ ^txi, -MCLEAN, VA 

10/11/87 

** DATE OF CALLS: 
^. . C MCLEAN, VA 
^^:>- 1 MCLEAN, VA 

** DATE OF CALLS 
i.-^.-,.. Or-- . - SHALIMAR, FL 



** DATE OF CALLS^ 
'^MCLEAN, VA 
MCLEAN, VA 

10/15/85 



Transworld Arms 
Portugal Arms 
Calero Payment 



■r^ \ 



^^y 



I ** DATE OF CALLS 
l^ MCLEAN, VA 

** DATE OF CALLS 
-MEMraiS, TN 

** JUaZ OF CALLS 
( MCLBMf, VA 

\ 11/04/85 



I* 



1148 1 ^^'' 
"$ 8,000 
57,500 
299,848 



* DATE OF CALLS 
MCLEAN, VA 




li 



,<*» 

\^^^ 



205 



UNCLASSIFIED 



EN 



Ou 



■V-c^. 



PANAMA' CITY, FL 
,v\>^ ,^- - PANAMA CITY, FL 

■-^<::. - MOULTRIE, GA 
^vov _» -, -^ ^- PANAMA city; FL 
11/07/85 



^r^^' 



** DATE OF CALLS 
MCLEAN, VA 



** DATE OF CALLS 
(^ MCLEAN, VA 



11 /18/85 
11/18/85 ~kCB 

11/19/85 



** DATE OF CALLS 
. v.>v<^-SAN JOSE, CA 
■E.A^\-^ - VIENNA, VA 

(See 11/20/85) 

** DATE OF CALLS ^11/20/85 
V .' e\ NEW YORK, NY 

NEW YORK, NY 

•''^■^ 11/19/85 Israel Income 

"i,- ^ 11/20/85 Legal Fees 

Port-Arms 



S'v' 



.** DATE OF CALLS 
MCLEAN, VA 
MCLEAN, VA 



^Vf 



** DATE OF CALLS 
•^'i — LOS GATOS, CA 

(See 12/ 

** DATE OF CALLS 
S- — MCLEAN, VA 

12/09/85 
12/10/85 

** DATE OF CALLS 
, ^ LOS GATOS, CA 
_ - ,^v.. , j^g GXTOS, CA _ 

12/11/85 Portugal Arms 
12/13/85 

** DATE OF CALLS 
°b>^<^> — MCLEAN, VA 

>* DATE OF CALLS 
^ .<^. { LOS GATOS, CA 
' " :^LOS GATOS, CA 

** DATE OF CALLS: 12/16/85 



1006 1^5" 

832 1" 

1320 8Ua^ 

833 




• ./X 



206 



"NMSinFR 



EN 



U U / ^ 



SAN JOSE, CA 

12/16/85' 



(•roleaaing 
Ha)cl]n 
I.e. 
CT 

Hakla 
Korel 
Quintero 

Business Expense 
Southern Air 
Montero 



12/18/85 



'** DATE OF CALLS 
MCLEAN, VA 
^ MCLEAN, VA 

-^•^^ ! 

i ** DATE OF CALLS 
L. MCLEAN, VA 

12/20/85 

** DATE OF CALLS 
LOS GATOS, CA 

12/30/85 

c-^ ** DATE OF CALLS 
LOS GATOS, CA 

01/02/86 

** DATE OF CALLS 
LOS GATOS, CA 

01/03/86 

/ ** DATE OF CALLS; 
• :>' ( MCLEAN, VA 

V, JICLEAN, VA 
TlOS GATOS, CA 
,..,<- '^ ^, LOS GATOS , CA 

" 01/06/86 



f ** DATE OF CALLS ; 01/07/86 

MCLEAN, VA iBBBlH 

01/07/86 Quintero 

Management Fees 



620 
ri,983 
2,386 

299,903 

50,000 

100,800 

100,800 

10,000 

50,000 

58,500 

2,540 




-c^n- 



^ 



' ** DATE OF CALLS 
I MCLEAN, VA 
MCLEAN, VA 

01/13/86 

** DATE OF CALLS 
MCLEAN, VA 
MCLEAN, VA 



1014 
4,000 

882 
L. Hamilton Airfield 125,000 
Miller C (Deposit) (?) 60,000 

01/13/86 



6 A^ 








207 



UNCLASSIFIED 



J> 



MCLEAN, VJk 

MCLEAN,' VA 

MCLEAN, VA 
1 MCLEAN, VA 
L 01/14/86 

** DATE OF CALLS 
- QUEENS, NY 

01/15/86 

** DATE OF CALLS 
MCLEAN, VA 
MCLEAN, VA 
MCLEAN, VA 

01/16/86 



** DATE OF CALLS 
L. MCLEAN, VA 

01/17/86 

** DATE OF CALLS 
LOS GATOS, CA 
LOS GATOS, CA 

** DATE OF CALLS; 
LOS GATOS, CA 

01/20/86 



** DATE OF CALLS; 
LOS GATOS, CA 

01/27/86 

** DATE OF CALLS 
LOS GATOS, CA 
LOS GATOS, CA 

01/29/86 

** DATE OF CALLS 
LOS CATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GAT06, CA 

01/31/86 

** DATE OF CALLS 
LOS GATOS, CA 

** DATE OF CALLS 
LOS GATOS, CA 
LOS GATOS, CA 

02/03/86 

** DATE OF CALLS 




01/20/86 

Howard Rice 
Ace 

^1/27/86 

Defex Frebourg (?) 

01/29/86 



2303 1 Pyl*. ^■ 

458 6 C^r 
>0,000 / 
230,000 / 



751 4 
S 26,174 




mmm 



208 



-.T^.y 



UNCLASSIFIED 



IN 



c: 



LOS GATOS,- CA 

02/04/86 

** DATE OF CALLS: 02/05/86 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 

02/05/86 



»* DATE OF CALLS 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 

02/07/86 

** DATE OF CALLS: 02/ 08/86 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 

** DATE OF CALLS 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 

C^* DATE OF CALLS 

MCLEAN, VA 

MCLEAN, VA 
1 LOS GATOS, 
\ LOS GATOS, 

JX)S GATOS, 
- BEVERLY HILLS, 

CA 

LOS GATOS, CA 

LOS GATOS, CA 

LOS GATOS, CA 

LOS GATOS, CA 

LOS GATOS, CA 

02/10/86 




1211 2 0.. 
1221 4 
1206 1 ^j" 



l^w ,"j^; 



\ 



CA 
CA 
CA 




/ y 



l' l*^^' 



** DATE OF CALLS: 02/11/86 
LOS GATOS, CA 
LOS GATOS, CA 



"TWi 



921 
429 



4 r^- 



ssiFe 



209 



nHtmm 



:. iN 



007 



w--> ^- 



/ LOS GATOS^ CA 
' LOS SATOS, CA 
; 02/11/86 

*,** DATE or CALLS 
LOS GATOS, CA 
LOS GATOS, CA 

02/12/86 

** DATE OF CALLS 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 

02/12/86 

** DATE OF CALLS; 02/14/86 
- SULLIVANS , 
ISLAND 
-- LOS GATOS, CA 

02/14/86 




< ji- 



1041 3 /?^ 

703 2 csr 



Eust (?) 
Bank of Ostar 
Montero 
Korel 
Business 



CTEA 
Southern Air 



$ 10,000 

31,500 

10,417 

165,000 

300 

3,500 

10,000 

15,000 

270,000 



** DATE OF CALLS :_02/ 17/86 
BEVERLY HILLS, 
CA 

** DATE OF CALLS 
BEVERLY HILLS, 
CA 

BEVERLY HILLS, 
CA 

** DATE or CALLS: 02/21/8 6 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 



1631 28 



. ** DATE OF CALLS 

•' ' V ' MCLEAN, VA 

• "-C - LOS GATOS, CA 

_i :-cs„-. -ATLANTA, GA 

^ ; .- LOS GATOS, CA 

' J: "^ — LOS GATOS, CA 

.d. ^. ^ _ ATLANTA, GA 

-<J^ - LOS GATOS, CA 




,JA' 



is^.. 



MNCIASSIFIEO 



210 



UNCLASSIFIED 



•H 



** DATE -07 CALLS 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 

** DATE OF CALLS 
LOS GATOS, CA 
LOS GATOS, CA 

** DATE OF CALLS 
'-(a?o - ASPEN, CO 

** DATE OF CALLS 
^^ ^Sci> - NEW YORK, NY 

03/07/86 



** DATE OF CALLS 
LOS GATOS, CA 

** DATE OF CALLS: 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 

** DATE OF CALLS: 
MCLEAN, Vk 
MCLEAN, VA 
:>^-y I 03/20/86 

** DATE OF CALLS: 
^ - K.^^MCLEAN, VA 1 
7' - r MCLEAN, VA 
cr n> ''- >^ <»-C MCLEAN, VA 
LmCLEAN, VA 

03/21/86 



02/23/86 







03/21/86 



Southern Air 
Ace 



03/24/86 



** DATE OF CALLS 
■^. — MCLEAN, VA 
C MCLEAN, VA 
^1 MCLEAN, VA 

03/24/86 

** DATE OF CALLS 
MCLEAN, VA 
-MCLEAN, VA 

03/25/86 



** DATE OF CALLS: 03/26/86 



00 



1602 6 ~ C 

905 14 / 
2153 5 1 



1144 
1127 




1519 15 / 
2144 7 



3 ? 



yr^' 



3 

10 



^B 1011 
^1 913 
^B 1141 
■I 1130 
$ 71,000 
29,000 



1224 3 

946 4 

1044 6 
S 10,000 



830 3 

1443 2 ^^■^ 



mmmis 



211 



UNCUSSIFIEO 



00 



:;n-\, - MCLEAN, VA 
, , '3■^'^< - MCLEAN,- VX 



-r<r^»— MCLEAN, VA 

03/26/86 

** DATE OF CALLS 

( MCLEAN, VA 

^j'-'^- S MCLEAN, VA 

IjlCLEAN, VA 

^alaV >^ MCLEAN, VA 

03/27/86 

** DATE OF CALLS 
^•V.y . — MCLEAN, VA 
MCLEAN, VA 

** DATE OF CALLS 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 

04/01/86 

** DATE OF CALLS 
LOS GATOS, CA 
LOS GATOS, CA 

** DATE OF CALLS 
LOS GATOS, CA 

04/03/86 



•C^ •, 



** DATE OF CALLS: 
LOS GATOS, CA 

** DATE OF CALLS 
LOS GATOS, CA 
LOS GATOS, CA 

04/07/86 

** DAT£ OP CALLS 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 

04/08/86 

** DATE OF CALLS, 
LOS GATOS, CA 
LOS GATOS, CA 

04/09/86 

** DATE OF CALLS 
- MCLEAN, VA 



857 7 dr 

927 11 
118 2 




mmm 



212 



yNCLASSIFIED 



04/11/86 

** DATE or CALLS! 
i-ij:. V . • -SHALIHAR, FL 

04/14/S6 



04/14/86 

East Inc. 
Southern Air 



$ 30 

150 



959 1 
000(?) 
000 



OOC 



C '>■ 



** DATE OF CALLS 
-j-'\-\ - MCLEAN, VA 
e,, ., SHALIMAR, FL 

04/15/86 



** DATE OF CALLS 
-.^^ - MCLEAN, VA 

04/16/86 




** DATE OF CALLS; 
-^yJ-,, . MCLEAN, VA 
J- ^. MCLEAN, VA 

04/29/86 

** DATE OF CALLS 
'.^ . MCLEAN, VA 

05/02/86 

** DATE OF CALLS 
- SALT LAKE, UT 

** DATE OF CALLS 

LOS GATOS, CA 

•-- " LOS GATOS, CA 

LOS GATOS, CA 

LOS GATOS, CA 

05/09/86 

** DATE OF CALLS 
.-^-. - MCLEAN, VA 

05/13/86 

** DATE OF CALLS 
'S'^r - MCLEAN, VA 
MCLEAN, VA 
-i->-Vv - MCLEAN, VA 



Director 
Hakim 
Hakim 

Director Fees 
East Inc. 



$ 2 

3, 

72, 

2, 

100, 



Shapp Green & Langford 

Southern Air 200, 

Hakim 15, 

Frebourg (?) 161, 

Ace 57, 
Aero Contractors (?) 19, 

04/29/86 



1102 

673 

000 

580 

750 

357 

294 

000 

000 

000 

022 

635 



22 







V- 



212 \ 



■mssm 



213 



UNCUtSSIflED 



'■ M 



05/14/86 Funds from Kashoggi $10,000,000 

• ' TDB Codelis (?) 101,500 

Basiners (?) 2,778 

. DEA 30,150 

CIA 6,500,000 



0: 



** DATE OF CALLS 

MCLEAN, VA 

j'rV-vv — '. MCLEAN, VA 

MCLEAN, VA 

v^MCLEAN, VA 

,v^^ J^MCLEAN, VA 



05/15/86 



>IICLEAN, VA 
M 



~i 



.^•^^ ^ 



MCLEAN, VA 

MCLEAN, VA 

MCLEAN, VA 

MCLEAN, VA 



,\V->Vd 



yr^. 



** DATE OF CALLS 

MCLEAN, VA 

l^CLEAN, VA 

/MCLEAN, VA 

< MCLEAN, VA 

VmCLEAN, VA 

^MCLEAN, VA 

\ MCLEAN, VA 

V. 05/16/86 




Kashoggi 
Funds Tram. 
Israel 
Scitech (Tri Am 



** DATE OF CALLS .--05/17 /86 
.^c - MCLEAN, VA 

^** DATE OF CALLS 
\ MCLEAN, VA 
) MCLEAN, VA 



1,460,000 
Anns) 150,000 



1852 



:^^-r 



5^")^ 



** DATE OF CALLS 

MCLEAN, VA 
VjlCLEAN, VA 
- MCLEAN, VA 

MCLEAN, VA 

MCLEAN, VA 

** DATE OF CALLS: 05/21/86 
MCLEAN, VA 
MCLEAN, VA 
MCLEAN, VA 
MCLEAN, VA 

** DATE OF CALLS 

MCLEAN, VA 
■ MCLEAN, VA 




A' 



V- ^-- 



955 


5 


/ 


955 


5 


\ 

1 


1321 


6 


1 


1323 


1 


\ 


1014 


6 


1 


1217 


6 




1239 


1 




900 


3 / 


W.-. 


856 


2 


( 


900 


3 


856 


2 


/ 



1628 4 

1628 4 



A/ f 



m\w\> 



214 



mmm 



00, 



x-^- 



.fv 



-wS 






** DATE or 'CALLS 
MCLEAN, VA 
MCLEAN, VA 
MCLEAN, VA 
MCLEAN, VA 

** DATE OF CALLS 
MCLEAN, VA 

** DATE OF CALLS 
MCLEAN, VA 

** DATE OF CALLS 
MCLEAN, VA 

06/02/86 



** DATE OF CALLS 
LOS GATOS, CA 

** DATE OF CALLS 
LOS GATOS, CA 

06/09/86 

** DATE OF CALLS 
..>««r- MCLEAN, VA 

** DATE OF CALLS 
y - MCLEAN, VA 
c . /MCLEAN, VA 

'JICLEAN, VA 

-MCLEAN, VA 
LOS GATOS, CA 

> ** DATE OF CALLS; 
LOS GATOS, CA 

^;- ** DATE OF CALLS 
.MIDOLBIORG, VA 
\ LOS GATOS, CA 
- ^ LOS GATOS, CA 




Capital Hakim 

CTEA 

Bus. 

Capital Koul (?) 

Scitech 



842 

S 79,167 

79,167 

1,000 

79,167 

26,390 



-.Vci 



-^\^. 



** DATE OF CALLS 

-PAWLEYS ISLAND, 

^C 

( MCLEAN, VA 

J MCLEAN, VA 

\mCLEAN, VA 
^- -MCLEAN, VA 
_\ - LOS GATOS, CA 




739 7 // ^ 
530 10 CS/- 



1252 



U/ t' 



1114 3 Z^' 

1457 8 

1457 8 

1032 5 

1946 34 \ 

I 

1308 14 ,' 



1337 2 
1249 31 
1045 3 



1144 

1345 
1649 
1351 
1345 
1315 



UNCLASSm 



215 



II 



■^ LOS GATOS, CA 
,. -<-^ ' LOS GATOS," CA 

*• DATE or CALLS; 
C MCLEAN, VA 
'."^V V MCLEAN, VA 
JICLEAN, VA 
, . . ("LOS GATOS, CA 
^" LOS GATOS, CA 

** DATE OF CALLS 
X>\.. -^«^^ — MCLEAN, VA 

** DATE OF CALLS 
'i»rV's^'\ —MCLEAN, VA 

06/20/86 



-, ** DATE OF CALLS 
t ^^..-^-^-^_ MCLEAN, VA 

06/22/86 

** DATE OF CALLS; 

':.^Vk. MCLEAN, VA 

06/24/86 

'^\\^ ** DATE OF CALLS; 
-.,— ,i«<^-i MCLEAN, VA 1 
\jlCLEAN, VA 

06/25/86 

** DATE OF CALLS; 
r^.^.-Nf — MCLEAN, VA 

06/26/86 

** DATE OF CALLS 
DULLES, VA 

06/27/86 

** DATE OF CALLS 
LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 

06/30/86 



** DATE OF CALLS 
LOS GATOS, CA 

07/01/86 




06/25/86 



COGS 



1025 


19 


^c 


734 


2 


/ 


1651 


2 




1516 


2 


\ 


1655 


1 




2104 


11 




1436 


22 





1045 
1056 




3 1^2- 

16 c^ir' 

/ 



11 



4 

2 

19 



216 



yNCUSSIFlEO 



** DATS OF CALLS 
MCLEAN, VA 
MCLEAN, VA 

07/08/86 



■.^"^^ 



\ 



\ ** DATE OF CALLS 
I MCLEAN, VA 

'"•' V. MCLEAN, VA 

jf--U?«i^ — MCLEAN, VA 
'J^^ 07/10/86 



'^* DATE OF CALLS 
MCLEAN, VA 

07/15/86 



->^ 



^■y 






** DATE OF CALLS: 
MCLEAN, VA 

07/18/86 



** DATE OF CALLS; 
LOS GATOS, CA 

07/29/86 



** DATE OF CALLS: 
— ATLANTA, GA 

** DATS OF CALLS: 
LOS GATOS, CA 
LOS GATOS, CA 

08/29/86 

** DATE OF CALLS: 
LOS GATOS, CA 

09/02/86 

** DATE OF CALLS; 
LOS GATOS, CA 
LOS GATOS, CA 



Southern Air 
Portugal Arms 




Ship Expense 
Capt. Arne - 
Currency Exchange 



200,000 
845,000 



1111 
1044 
15,500 
3,125 
2,778 




Insurance 
Portugal Arms 
Chartering 



1140 
$" 70,000 
881,987 
5,430 



Aero Contractors Ltd. 45,392 

JI7/18/86 

■■^■■^■^^^^■■1- 1024 
C-123 Ward Purchase $125,000 
C-123 Hansen (?) 125,000 
Cash Withdrawal 310,000 



Zucker $ 1 

Montero 16 

Contpania (?) 3 

Lilac McHose, Chas (?) 4 

Lankarani Tila (?) 8 

08/28/86 



08/29/86 



TDB Cordelis (?) $ 51, 

J39/02/86 

Corp. Air Services S 62, 
09/06/86 



853 
000 
204 
993 
896 
000 



1810 



UNCUSSIFIfD 



13 



J o 1 



II 'i 



/^ 



2335 
725 
000 


5 

1 


f 
\ 


627 

018 


1 


\ 

1 


927 
700 


3 
27 





217 



UNUSIRED 



'' p '-> ■» 



0^06/86 Cruz 

** DATE OF CALLS ;. 09/08/ 86 
LOS GATOS, CA 

09/08/86 



$ 7,000 




** DATE OF CALLS: 09 /10/86 
LOS GATOS, CA nHH^^^^^^^^l^V 641 
09/10/86 Southern Air Trans. S 50,000 

** DATE OF CALLS: 09/13/86 
LOS GATOS, CA 



839 



** DATE OF CALLS ; 09/1 6/86 
.^jt^\ - INDIAN, MS 



09/16/86 Tom Clines 

** DATE OF CALLSJ09/17/86 
•■r.-j'i-*--^ -^ALLS CHURCH, 
VA 

^•■\.-.^^ -MCLEAN, VA 



I 625 
2,000 



->S\ 



*.* DATE OF CALLS: 09/18/86 

MCLEAN, VA "~ 

MCLEAN, VA 



** DATE OF CALLS: 09/19/86 
OICLEAN, VA 
•'--■ 1-'^ -FALLS CHURCH, 
-■■'■ VA 

** DATE OF CALLS ; 09/20/8 6 
'-^y —MCLEAN, VA 
^-,\^-,vt.C -MCLEAN, VA 

** DATE OF CALLS; 09/21/ 86 
„^.-- '.t.'. - FALLS CHURCH, 
VA 

** DATE OF CALLS : 09/22/86 
..,^-1 ^MCLEAN, VA 
JICLEAN, VA 
PHILADELPHIA, 
PA 

09/22/86 Quintero 

Tom Clines 
Income CIA 

^v." , ** DATE OF CALLS: 09/2 3/86 
. . :^- NEW YORK, NY 

** DATE OF CALLS ; 09/24/86 
-^"■') - MCLEAN, VA 
_ , jf NEW YORK, NY 
. " £ , NEW YORK, NY 



1431 
.'>152 




4 ^1^ 
6 C^'-' 

2 (Zt. O 

18 (3jL,~^ 

3 " 

5^ ^- 



1107 
1540 



1002 
1028 
1521 



3 ^ Z- 



4 ' ' 



3 C^'= 

1 ^ 
3 t^ 2- 



$ 10,000 

5,000 

1,200,000 



100 20 rt C_ 



TBS 



1118 

557 

1505 



\c.sr 

4 ^ C 



SSIHEO 



218 



ONCLASSIREO 



■ N 



09/24/86 

** DAT! OP CALLS 
. MEW IfORK, KY 
NEW YORK, NY 

■ ** DATE OF CALLS 

FALLS CHURCH, 
V VA 

** DATE OF CALLS 
FALLS CHURCH, 
VA 

10/02/86 

\** DATE OF CALLS 
■c-l^ - MCLEAN, VA 
MCLEAN, VA 

10/03/86 



** DATE OF CALLS 

^'^\ ■^''»^ ~ QUEENS, NY 
DULLES, VA 

f'** DATE OF CALLS 
MCLEAN, VA 

10/16/86 

-;.-..^ ** DATE OF CALLS: 
MCLEAN, VA 

10/17/86 

** DATE OF CALLS 
_ MCLEAN, VA 
*.* DATE OF CALLS 
MCLEAN, VA 




935 5A/<_ 
14 6 • 



1339 11 U ^^ 



1801 
1540 



1130 



_10/17/86 
Air Meno Egtan (?) S251, 
10/18/86 
10/22/86 



\ 



** DATE OF CALLS 
MCLEAN, VA 






** DATE OF CALLS 
-■' '• '^-'' - MCLEAN, VA 
StCo/^ —-MCLEAN, VA 

(LOS GATOS, CA 
_ "^'' • LOS GATOS, CA 



8 C'>l" 



A^' 



CS'' 



1417 6 
000 



926 1 / 




I," 7 



-** DATE OF CALLS: 
y ^ MCLEAN, VA 



r 



11/06/86 



MCLEAN, VA 
.c^v. —LOS GATOS, CA 



1453 2 
936 3 
842 1 



219 



vnmsuB 



, ) LOS GATOSt CA 
- ^ LOS GAVM; "CA 



^ 



»<•^■ 



^_;^.^•i"<-^ 



* * DATE or CALLS 
I MCLEAN, VA 
■ MCLEAN, VA 

JICLEAN, VA 
(LOS GATOS, CA 
I LOS GATOS , CA 
I LOS GATOS , CA 

LOS GATOS, CA 

** DATE OF CALLS: 
- BEVERLY HILLS, 

/ BEVERLY HILLS, 
^ CA 



..^^^A 



** DATE OF CALLS 
BEVERLY HILLS, 
CA 

jlOS GATOS, CA 

^1X)S GATOS, CA 

(BEVERLY HILLS, 

^CA 

'BEVERLY HILLS, 

■CA 

- INGLEOOWD, CA 



^* DATE OF CALLS 
-.,y,. ) MCLEAN, VA 
J' >JICLEAN, VA 
^j. ^ LOS GATOS, CA 
r"- ^LOS GATOS, CA 

** DATE OF CALLS 
5^<?a'^--UCLEAN, VA 

/' LOS GATOS, CA 
: 11/12/86 






** DAT^^B CALLS: 
LOS d^S, CA 

11/20/86 

** DATE OF CALLS: 
LOS GATOS, CA 

11/25/86 



** DATE OF CALLS: 
LOS GATOS, CA 

11/26/86 




220 



MMB 



EN 



** DATl or TCXLLS 
-><-o. - WASHIMGTOH, DC 



.-.v- 



** DATE OF CALLS: 
.L^ - MCLEAN, VA 
, _ FALLS CHURCH, 
VA 
'-'^ - VIENNA, VA 



■X' 



' FALLS CHURCH, 
VA 




150 



6 18V/-> 



12 05 2 ^-^■ 

1548 2 

1318 9 ^^ 

1546 1 



** DATE OF CALLS ; .12/03/86 

^jrco^^ - MCLEAN, VA HH^H 

MCLEAN, VA ^^^^^H 

O --oO^ —LOS GATOS, CA ^^^^^1 

tjrr^, - MCLEAN, VA HIHH 

** DATE OF CALLS; 12/04/86 
/MCLEAN, VA 
SCC^<0 ) MCLEAN, VA 
OCCLEAN, VA 

(* DATE OF CALLS 
MCLEAN, VA 
MCLEAN, VA 

( ** DATE OF CALLS 
, ^ MCLEAN, VA 
.V-^od* A MCLEAN, VA 
MCLEAN, VA 

** DATE OF CALLS 
^"^y ~ MCLEAN, VA 

** DATE OF CALLS 
-^v^'-'t^ -MCLEAN, VA 
DULLES, VA 

** DAT»_OP CALLS 

»-,^ — FT. mtfw 

BEACHf ' JPt 

** DATE or CALLS 
MIDDLEBUR6, VA 
_,-.v Ac-i. -MCLEAN, VA 

** DATE OF CALLS: 
MONTROSS, VA 

*■> DATE OF CALLS: 
,v^^ -.GREENBURG, PA 
. ' LATROBE, PA 
•' ; " LATROVE, PA 




953 9 M^ 

1842 4 H-J- 

631 14 

1231 2 i^r 

1610 1 i^r 

1424 2 ( 

1848 2 / 



1059 3 ' 

1102 2 c Sr 



1355 1 /«• 
1355 1 / 
1738 10 > 



1620 1 4 

1146 1 ^^-7^ 
1734 15 (+^ 



1144 11 I 
1646 20 ; 



1843 16 \ 
1639 3 \ 
1643 3 ■ 



UNCIASSIHED 



221 




- - GREEKBURCt PA 

** DATS or CALLS 

■'-^<-^ - MCLEAM, VA 

LEESBORG, VA 
•>^. - MCLEAN, VA 



(^128366060 412234609^7 
12/30/86 



'w^ 



** DATE OF CALLS 
- MCLEAN, VA 



— n 

1 L 



** DATE OF CALLS 
N LOS GATOS, CA 
,_ - r-"^ ■* LOS GATOS, CA 

(** DATE OF CALLS 
\L0S GATOS, CA 
[MCLEAN, VA 
^TV\> ^MCLEAN, VA 
VMCLEAN, VA 
*LOS GATOS, CA 
;■•' >"^ [LOS GATOS, CA 

** DATE OF CALLS! 
iw>.^ >^<.-y - MCLEAN, VA 
- MCLEAN, VA 
"LOS GATOS, CA 
LOS GATOS, CA 
'^ \ LOS GATOS, CA 
LOS GATOS, CA 
LOS GATOS, CA 
.^\\t>V<-^i -MCLEAN, VA 

*• DATE OF CALLS 
LOS GATOS, CA 
LOS GATOS, CA 
. , \ : LOS GATOS, CA 



** DATE OF CALLS 
LOS GATOS, CA 

** DATE OF CALLS 
^ MCLEAM, rX 

** DATE or CALLS 
MCLEAN, VA 
MCLEAN, VA 
_ MCLEAN, VA 

** DATE OF CALLS 
- NEW YORK, NY 



** DATE OF CALLS 
'•=■'-'' - MCLEAN, VA 



01/14/87 



EN ^ 091 

1737 3 f^-^ 



1057 7 C>^ 




703 10 A-''^ 

1523 1 UC 

1044 2 ;*i-r?^ 

1459 2 I*"- 

1418 

1423 



^I/Uj'C^--— 




1138 



mfmm 



222 



mrMit 




** DATE OP CALLS ;, 02/01/87 
'*■-'-' -^ --- MCLEAN/ VA, 



S*-V--jS - MCLEAN, VA 

** DATE OF CALLS ; 02/ 04/87 
_>\v>^'^ - MCLEAN, VA 

** DATE OF CALLS; 02/08/87 
i..-\-A- - DECATUR, IL 
'^^■«- 

^ <,** DATE OF CALLS ; 12/01/87 
' " <. MCLEAN, VA 
i^ MCLEAN, VA 



846 1 ''S 
936 3 /r/ > 



*'««J/f/fJ 



223 



9.^-^ 



CLASSIFIED AT TIME OF PUBLICATION. 



224 



a<P-^ 



CLASSIFIED AT TIME OF PUBLICATION. 



U 3 

CDC 

'Jj _l 
O IM C 

« - o > 

0. U 



225 



n » n 



) ^o .- O O >^ 



■> rg 3 Jl O 
1 ^ > O O 
3 O > O NJ 



aa-/8 



.i 



■ r^ nT 3 O 



6i^ 



*; 5 



a > o oo a 



» 3 > -O M 



"-^ O 3 

-1 3 a 



UJ • 

:> « 

Z tt 



ro oo o o 9 
CD <o ^ o a 

m ^ 9 -^ a 



fr> ^ N. h- a 
W rs- t- O O 
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yNCliSSIFIED 




.■■At^' <■:!-- •■•'■■■ 



^.-250 



7 77p 



TO : 

FROM : 
RE : 

DATE : 



MEHORANOUH 



Roland Farina / 
Isabelle Allals/ 

wniard I. Zucker 

Energy Resources 

10 July 1985 



On 29 June 1985, I withdrew from the account of Compagnle 

de Services Fiduclalres at Republic National Bank of New 

York US$20,000 - $15,000 In a check and $5,000Vln cash.JsJ ^*av\. 

For SERFID, this Is simply an exchange and It should be 

relBbursed the $20,000 plus 1.51, or $300, to cover loss 

of Interest and handling costs. 

Roland, you should make a transfer from the account of 
ENERGY of $20,300 to SERFID at whichever bank Isabelle 
needs the money, and In your ENERGY accounting you should 
take this amount from the profit share of Albert Hakim. 



WIZ/ac 



UNUSSIFIED 




(^2^ 



789 



aa-// 



See Hearing Exhibit AH-32 



790 



33-/3 



CLASSIFIED AT TIME OF PUBLICATION. 



791 



pa-/y 



CLASSIFIED AT TIME OF PUBLICATION. 



792 



yNClASSIflED c^a,« 

Arthur Anderskn SA 



GBNiCVK 






To th« Shartholdcr* of 
CSF Invett««nts. Ltd.! 



W« hav* excained the balance ahect of CSF INVESTMENTS, LTD. 
(a Barauda Coapany) aa of Dacember 31, 1984 and tha ralaCad ataCamanta of 
ineoaa and ratained aarninga and changaa in financial poaicion for tha yaar 
than anded. Our exaainationa vara mada. in accerdanca with aanarally 
aceaptad auditing atandarda and, accordingly, ineludad auch AatI of tha n'-.^^~J''^' 
accounting raeorda and auch othar auditing procaduraa aa w« conaidarad - ^ 
aaeataary in tha circunatancaa. 

Aa diaeuaaad in nota 3, U.S. $8, 417, 565 are dua from tha Parant. 
Ha hava not audited the financial atatcmcnta of tha Parent aa of Decem- 
ber 31, 1984 and conaequcntly cannot fora an opinion aa to the ultiaate " ^^ 
realization of this anount. ;^^ 

.■'\.- 

In our opinion, aubject to tha realization of the aisounta due . '.'.> 

froa the Parent the financial atateaenta referred to above preaent fairly 

the financial position of CSF Inveatacnta, Ltd. aa of December 31, 1984 and 

the reaults «^ijt« eperationa and the changaa in ita financial poaition for 

■*■- . 
the year tha ^IJiad in conformity with generally accepted accounting prin- 

eiplca, applied oa a bails conaiatent with that of tha preceding year. 

ARTHUR ANDERSEN 'SAf 




Geneva, Switzerland, 
July 30, 1983. 






793 



csr mvESTMEirrs. ltd 

5TATEMEIIT Of CHANCES IH FINANCIAL POSITION 

FOR THE TEAR ENDiCD DECEMBER 31. 1984 

(Currtncy - U.S. Dollar) 



Cft F 

CASH PROVIDED BT: 



*%% 



2216 



Op«ratioaa- 

H«C incoa* 154,403 

Du« frea parent , ac aishc 307,338 

Aeeounca raccivablc 43,864 

Dua Co cuatoatara, at aight 194,858 

Loana daa to cuatoacra 3,403,087 

4,303.550 



CASH APPLIEO TO: 

Advancaa and loans duo froa parotic 

Dua froa cuatoaara, at aight 

Tlaa dcpoaica 

Karkatabla aecuritioa 

Preeioaa aotals 

Advancoa and loana duo froa a rolctod company 

Advancaa and loana duo froa third partioa 

Dua to parant, at aight 

Accrued axponaca 

Raaarre on forward contraeta 

Dividend paid 



INCREASE (DCaKASS) IH CASH: 

Caah with banka and with brokera 
Dua to banka and brokera 





49.856 




863.953 




564,268 




363,874 




12,150 




1,205,479 




880.133 




82.195 




3.960 




40,943 




12,000 




4,078,811 




224,739 


•1/ 


(292,483) 




517,222 




224.739 



WLASSiflED 



The accoapanying notes aro an integral part of thia atatenent. 



794 






CSr IHVESTMEHT3. LTD. ' "ij/A ^f^i 

STATEMENT OF IMCOME AHD RETAIHED EAJWIWGS 
yOK THE YEAR EWPED DECEMBER 31. 1984 
(Curraaey - D.S. Dollar) 



Cfl F 



2217 



IHCOHE: 
CoiHiction and aanagamenC faaa 230,794 

laCaraae aarnad 849,781 

1,080,575 



UNCLASSIFIED 



BZPMSBS: 
InCaraaC axpanaa 

Rat raalisad loaa on invaacmanca 
Admiaiatration axpanaaa 
OChar faaa and ehargaa 
Excbanfa loaa 



Hat ineoM 154,403 




RETAINED UtttttU, bagioaing of yaar 298,297 

Laaa- DiviMpft Hi' (12,000) 

RETAINED EARNINGS, and of yaar ^'^"^ 440.700 



Tha accoapanying notaa ara an intagral pare of Chia acatamanc. 



795 



i 



csr iwvESTMEirrs. ltd. 

BALAWCg SHTET - DECTMBEK 31. 198A 
(Curraacy - 0*8< Dollar) 



# 



ASSETS 



CASl WITH BANKS AMD BROKEKS 
DOB rtOM CDSTOMEXS, AT SIGHT 

tuc deposits 

mauztablb secuuties (noc* 2) 

PKECIOOS METAL (MoC* 2) 

Accomrrs ieceivable 

ADVANCES AMD LOAMS (NoC« 3): 
Dim trom paranc 
Doa froa a ralaCad coapany 
Doa froai third partiaa 

MABXETABLE INVESTMENTS HELD FOR 
CDSTOMEKS' ACCOOMTS (NoCa 4) 



CR 














666,646 








1 


,070,025 


F 








751,614 


2 


^75 




571,113 
68,850 










31,667 


8,417 


S65 








2,794 


479 








2,131 


650 




13 

20 
37 


,343,694 

,727,208 
,230,817 



LIABILITIES AMD SHAREHOLDERS' INVESTMEWT 



DOB TO BANKS AMD BROKERS 
DOE TO CUSTOMERS, AT SIGHT 
DOE TO PAUMT, AT SIGHT 
ACCROED EXPENSES 

CUSTOMERS' FUNDS UNDER KAMACEMEMT (N>ea 5) 

- Loana iam Co euaCoaara 

- Markat«kia aacnritiaa, pracioua. 

■atal* aai ciaa dapoaiea 



SHAREHOLDERS' INVESTMENT: 
Shara capital authoricad and outatanding 
Ratainad aaminga 



13,536.121 
20.727.208 



ONCUSSIFIED 



538 

1,316,264 

1.036,117 

73,869 



34,263,329 
36,690,117 

100,000 
440,700 

540.700 

37,230,817 



Iha aeeoapaaTing notaa ara aa incagral part of this balaaca ahaat. 



796 



a3-33 



See Final Report Exhibit Chapter 22, Footnote 10 



797 



aa-as" 



CLASSIFIED AT TIME OF PUBLICATION. 



798 



aa-a7i»a«i 



CLASSIFIED AT TIME OF PUBLICATION. 



799 



ap-3o 



See Hearing Exhibits EA-22, OLN-203, and OLN-307 



800 



IHII 









mmJi 



%fc,» 4ii- .J a ei li/jj I'^y 



>.:.i eUH/ 







OK to il^'^ 



^4 



<5 



■■-NEVA. rerFMBPR ; • 
ATTM: Mf'-:. N 4- ^"-i 



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/ 



r/> 



—^•l.^.'-iF ■''AM-fr"r; r—^ .-ii... it F '-^ i.'l '<'^ '* •■4y.'=:i 

1J721 3"Xi'"H -i' .•■-iAi ! ■■:■ 

riORWALK 

■■•■•.■0 r -iLIFufc-i!.-" *< 

.►i ri^VnUP "F 'V' 

-.^1=;^ ,\hiZ\ ->,"•£ TV - FT'ifft^ ^rO I AW i"i:"fi:Pnti:ATT'''N 
'"'■I."':, r >•: ■ .- "f' 

,j;S • ■•" '^''' *■'' ' • '"'' * 

^ Tty-IK .-■-'■< i-l ..-■'•AN.^. 



f-l/ 



I > iA:r '•■?.■ V Kl'^N! 



il'. f-^& Im 



ilV. 



/■'-' 







\mm;im 




801 



a3-3 



CLASSIFIED AT TIME OF PUBLICATION. 



3-88-27 



802 



7?'50 



CLASSIFIED AT TIME OF PUBLICATION. 



803 



IJNClASSIFe 






Sharp. Green & Lankford 



L*W OFFICES 



eoc massach ,se-Ts Avenue n w. 
Washington, D C 20C36 



= CBE = 



vOGE - 



August 18, 1987 






Arthur Liman, Esq. 

Counsel to U.S. Senate Select 
Committee on Secret 
Military Assistarice to Iran 
and the Nicaraguan Oppos . 

901 Hart Senate Office Bldg. 

Washington, DC 20510 

Gentlemen: 



John W. Nields, Jr., Esq. 

Counsel to U.S. House Select 
Committee to Investigate 
Covert Arms Transactions 
with Iran 

Room H419, United States Capitol 

Washington, DC 20510 



On behalf of Richard V. Secord, I am writing to 
correct certain aspects of his testimony given under oath at 
the last deposition session, at which both of you were in 
attendance. I am sorry that I can no longer supply the precise 
date of that session. 

Mr. Seccrd was asked to acknowledge that he had been 
advised concerning a potential conflict of interest on the part 
of the undersigned arising out of the undersigned's refusal to 
answer inquiries from the Office of Independent Counsel about a 
specific incident which arose during the time the undersigned 
represented both Lieutenant Colonel Oliver North and Mr. 
Secord. 



Mr. Secord replied that he had been independently 
advised concerning this matter, and he confirmed his insistence 
that the undersigned remain as his counsel. At the time of his 
answer, Mr. Secord had- 'had conversations with other attorneys 
m my office concerning this rr.atter, but, as I explained to Mr. 
Secord following the deposition session, those consultations 
could not be deemed to be with separate and unrelated counsel. 

Since that tine Mr. Seccrd did retain and did consult 
with separate and unrelated counsel to explore all the rarr.i- 
fications surrounding the potential conflict of interest 
issues. Since receiving this_ independent advice, his decision 
rem.ams the same. Hcwever, I thought it prudent to write you 
and to clarify what 1 think may be some confusion m the 



Far,.: j' Doclassifie^yReleased on jIlL 



\ i nd e r provis io n! o f E .0 . 1 
^i 3. Reger, National Security Coiificil 






wssra «iz3 



804 



Sharp. Grcen & Lanktopo 

August 18,- 1987 
Page 2 



S C Q 4 U 6 -^ 



UNCLASSIHEO 



record. Accordingly, I ask that you consider this letter as 
supplenentation to, or correction of, Mr. Seccrd's previOLis 
testimony. 




IS C. 

Attorney for Richard V. Secord 



Seen and Agreed to: 



Riche W Vt -Secord 

f 



Date ' 



UNdASSIRED 



805 



p! 



^n 



LAW OfFlCES 

ARP, Green & Lankford 

800 Massacmusctts Avenue, N.W. 
Washington, D. C 20036 



S C 4 U . 



jamcs e. shahp 

Thomas c. gbecn 

v. thomas lankfowo. jn. 

STEVCN M JOHNSON 

BARBARA STRAUOMN HAHB'S 

MARKM. KAT2. August 20, 1987 T^.tcOPiEX aoa,2s8-J»9 

ROBERT L, VOGEl - ^ElEx 63? *605satOC 



ELEPHONE 
2) 659-2*o0 



HAND DELIVERED 

The Honorable Lee H. Hamilton The Honorable Daniel K. Inouye 

Permanent Select Committee on Chairman, U.S. Senate Select 

International Affairs Committee on Secret Military 

U.S. House of Representatives Assistance to Iran and the 
United States Capitol Nicaraguan Opposition 

Room H405 901 Hart Senate Office Building 

Washington, DC 20515 Washington, DC 20515 

Gentlemen: 

On behalf of Richard V. Secord, I am writing to 
correct and comment on certain testimony taken before the 
Select Committees and to respond to certain statements made by 
various members of the Committees which misrepresent the facts 
and portray my client ana his conduct in a false and 
underserved light. In view of the effort undertaken by various 
members of the Committees to discredit General Secord and the 
attempts to impeach portions of his testimony, we feel it fair 
and appropriate that this letter and the accompanying exhibits 
be made a part of the official record of investigation; and we 
formally request such relief. 

General Secord was the first witness called to give 
public testimony. -.His appearance before the Committees 
followed countless hours of debriefing during which he 
patiently and with great accuracy recited the facts and 



Par..: y Declassified /Released on //^. 



under provisiona of E.0. 1235 
,y 3. Reger, National Security Council 



rn&mm '^13 



806 



UNCUSSIHQI 



SC 04U 

< Shapp. Green & Lankforo 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987, 
Page 2 

circumstances surrounding the operational details of the Contra 

supply operation and the Iranian initiative. It is only fair 

for the Committees to acknowledge that the information provided 

by General Secord was of critical importance and of invaluable 

assistance to the progress of the investigation. It should 

also be noted that General Secord ultimately succumbed to the 

entreaties of both Chief Counsel who largely induced his 

voluntary testimony by appeals to General Secord 's sense of 

duty, service and responsibility to his country and the 

Congress. 

General Secord was prepared for tough questions and 
tough criticism. But in light of the way his testimony was 
procured, we were not prepared for unfair criticism or for the 
technique employed by some interrogators of using false 
information to prompt derogatory comments about General Secord 
from other witnesses. When, from time to time, we contacted 
the staff to tender correct information and corroborating data 
we were usually, thanked, but never vindicated. All the 
misinfoxmation has been permitted to linger, and the record 
requires and deserves correction. 

Several Senators were effusive in their use of the 
term "profiteer" when making reference to General Secord. We 
start from the rather basic proposition that every man is 
entitled to make a living. General Secord devoted two years to 
the Iran/Contra projects at the expense of virtually all other 



y.#^SSlflED 



807 



Shabp. Green & Lankford 



The Honorciisie Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 3 






04U 



% 



business pursuits. During that time he received a salary of 

$6000 per month. The amount is hardly excessive. 

Albert Hakim acknowledged in his testimony on June 3, 

1987, that he accumulated profits from arms sales for the 

benefit of General Secord in an account known as Korel Assets 

even though General Secord forswore any such remuneration. 

None of the accumulated profits were ever distributed to 

General Secord, a fact confirmed by House Counsel, Mr. Nields, 

when he stated publicly on June 3rd that: 

I think the record should reflect that 
unlike some of these otner accounts, we 
have been able to determine no withdrawals 
from the Korel Assets account as of this 
date. 

A great deal of time and attention was devoted by 

members of the Committees m examining the profit earned on 

arms transactions. The frenzy to portray these sales as 

generating exhorbitant profit came close to overshadowing what 

should have been the more important issues. General Secord 

testified that the grogs profit on arms sales ranged from 

between 2C percent to 30 percent. That markup was and is 

extremely reasonable, and the merchandise delivered was 

unquestionably of high quality. When General Singlaub appeared 

some members again attempted to use his testimony to criticize 

General Secord' s efforts through a supposed comparison of the 

prices charged by each. The comparison was nonsense and tne 

equivalent of an apple and orange exercise. We demonstrated 



uhclassired 



808 



Sharp. Green & Lankford ,/' 



The Honorai>le Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987. 
Page 4 



wuimm 



all of this in a letter I wrote to the Committees on May 26, 
1987, A copy of my letter is attached hereto for your 
convenience. Additionally, we supplied the staff with an "Arms 
Sales Profit Analysis" memo which was nothing more than an 
exercise in basic arithmetic confirming the profit margins 
testified to. A copy of this document is also attached. It is 
our belief that the staff has now been able to confirm the 
basic accuracy of our figures. Finally, I note the testim.ony 
of General Secord's customer, Mr. Calero, who acknowledged in 
his testimony on May 20, 1987, that General Secord's prices for 
ammunition and FAL type rifles were extremely reasonable and 
about 50 percent less than what this government was charging 
the witness for the same items. 

Although General Secord never withdrew money from his 
so-called profit account and although he attempted no movement 
or secreting of funds during the days when these operations 
were on the brink of public disclosure, the notion was born and 
nurtured by sever^tL members of the Committees that the residual 
funds were accumulated and preserved principally because of 
devious profit motives, all of which worked to the unfortunate 
detriment of the Contras. This is a pernicious and 
particularly offensive allegation. 

Funds were on hand when these transactions terminated 
simply because the ongoing operations were aborted. General 
Secord was saddled with the responsibility to preserve and 



809 



Sharp. Green & Lankforo 



The Honorable Lee H. Hamilton a 

Daniel K. Inouye 
August 20, 1987, 
Page 5 



?*% 



sc 



n 



U4Ul 



«% 



allocate funds in response to a number of real and anticipated 
needs. This required a continuing assessment of priorities and 
the need to reserve against contingencies known and unknown. 
General Secord delivered to the Committees long ago most of his 
original, contemporaneous worksheets which reflect his 
decisional process. None of this material was contrived, and 
no one has been silly enough to suggest otherwise. Even a 
cursory review of this material will demonstrate that General 
Secord intended that the residual funds were to be devoted to 
operations . 

Rather than burden this letter with a detailed 
summary of General Secord 's testmony, I have included an 
extrapolation from the documents he provided, which is 
essentially a series of "snapshots" which capture the process 
of allocation over time in 1986. 

FUNDS AVAILABLE AND ANTICIPATED DISBURSEMENTS 
A. Early Eebruary-r 1986 — $87,000 available. Several 
million dollars required to carry through with the 
Central American airlift project. 



UNCLASSIHED 



810 



04Uc 
Sharp. Green & Lankforo 



%< 



m/fff 



The Honorible Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 6 

B, Early March, 1986 — $6 million available. S2-4 
million required for aircraft hull self-insurance per 
Israeli demand. 

C. Estimated disbursements for March and April, 1986, 
included the following: 

Israeli Air Force S 150,000 
Costa Rica Air Strip 

Project (Contra) 150,000 

Defex (Contra) 2,360,000 

Aircraft Procurement (Contra) 1 , 000 , 000 



Salaries (Contra) 


50, 


,000 


Contra Medical Expenses 


50, 


,000 


Initial Blowpipe 






Procurement (Contra) 


200, 


,000 


Fenced Insurance 






Fund (Contra) 


.iOO, 


,000 




54,160 


,000 



We are confident that the Israelis will confirm this 
requirement. 

Does not include what by this time is a $4 millicr. 
hull insurance fund. 



UNCUSSIFIED 



811 



Shar^. Green & Lankforo »»-* rmmm^^ 



%. 



The Honorable Lee H. tJamilton and 

Daniel K. Inouye 
August 20, 1987. 
Page 7 

D. April 1, 1986 — $5 million available. Estimated 

disbursements for April, May and June, 1936, 

included: 



Aircraft Operations and 






Maintenance (Contra) $ 


650, 


,000 


Israeli Air Force 


150, 


,000 


Communications Procurement 






(Contra) 


100, 


,000 


Initial Blowpipe Procurement 






(Contra) 


350, 


,000 


Medical Supplies and Local 






at^^^^^^^^^ 






(Contra) 


45, 


,000 


Southern Air Transport 






(Contra) 


120, 


,000 


Salaries (Contra) 


72, 


,000 


Defex. (Contra) .. 2. 


r200. 


,000 


Israeli TOW s 


822, 


,000 


54 


,509, 


,000 



Does not include what by this time is a S4 nillior 
hull insurance fund. 



ONCUSSIFIFD 



812 



Sharp. Green & Lankford 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 8 



Uncus. 



iim 



End April — $4 million available. $4 million needed 
for hull insurance reserve. Estimated disbursements 
through June mcludad: 

Defex (Contra) S 280,000 
Aircraft Operations and 

Maintenance (Contra) 650,000 
Three British Air Crewmen 

(Contra) 110,000 
Blowpipe Procurement (Contra) 1 , 000 , 000 
Salaries (Contra) 72,000 
Israeli TOW s 822,000 
Costa Rica Air Field (Contra) 60,000 
SAT (Contra) 55,000 
Insurance Fund Fenced (Contra) 200,000 
C123 Spare Parts (Contra) 200,000 
Israeli Air Force 185 , 000 
53,634,000* 



Does not include what by this time is a S4 million 
hull insurance fund. 



UNCLASSIFIED 



813 



■S C Q 1 u 

Sharp. Green & Lankford 



The Honoraiale Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 9 



%^/. 



% 



F. Early June, 1986 -- Hull insurance requirement still 
in effect. $13 million available. Estimated 
disbursements through July, 1986, included: 

Refund demanded by 

Ghorbanifar $15,000,000 

Airlift Operations and 

Maintenance through 

July (Contra) 500,000 

Salaries through July (Contra) 90,000 
Israeli Air Force 240,000 

Costa Rica Airfield Completion 100,000 
Shipload of Munitions (Contra - 

for delivery in August 3,300,000 
Insurance Fund Fenced (Contra) 200,000 
Aircraft Procurement 

(Contra) 500,000 

$19,930,000* 

G. July 1, 1986 -- S12 million available. $2 million 
still needed for hull insurance. Ghorbanifar claims 



Does not include what by this time is a S4 million 
hull insurance fund. 



UNCLASSIFIED 



814 



: C 04U 

Sharp. Green & Lankforo 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987. 
Page 10 



.^X. 



ms 



SIO million owed to him. Estimated disbursements 
through August, 1986, included: 

Refund demanded by 

Ghorbanifar $10,000,000 

Airlift Operation and 

Maintenance, July and 

August (Contra) 500,000 

Salaries, July and August 

(Contra) 90,000 

Insurance Fund Fenced (Contra) 200,000 
Secure Communications 

Equipment (Iran) 120,000 

Ship, Erria, Operations 

(Contra) 150,000 

Shipload Munitions (Contra) 2,200,000 

S13, 260,000* 

H. Early August, 1986 — S9 million available. 
Ghorbanifar still claims SIO million owed to hin and 
threatens to expose the operation unless paid. 



Does not include what by this time is a S2 million 
hull insurance fund. 



UNCLASSIFIED 



815 



C Q4U 

Sharp. Green s. Lankford 



^%/% 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 11 ' 

Estimated disbursements through September, 1986, 

included: 

Refund to Ghorbar.ifar $10,000,000 
Airlift Operations and 

Maintenance, August and 

September (Contra) 400,000 

Salaries, August and 

September (Contra) 90,000 

Shipping, Erria, Expenses 

(Contra) 90,000 

Insurance Fund Fenced 

(Contra) 200,000 

510,780,000* 

Although at the time these operations were disclosed 
in November, 1986, approximately S8 million was available, 
Ghorbanifar still continued to press his claim. During this 
period General Secord contemplated the purchase of a ""O? 
aircraft and spare parts in connection with implementing the 



Does not include what by this time is a 54 million 
hull insurance fund. 



UNCLASSIFIED 



816 

-€■:■ 
SHARft Green i LANKFono ^/fA/if/l^ ^^ 04 U 



"%» 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 12 " 

second channel ($2-2.5 million), and roughly a million dollars 

were owed or obligated on account of the following: 

Danish ship agent ($300,000+); Southern Air Transport 

($100,000); death benefits ($200,000); Swiss Air 

charter ($50, 000) ;J^^^^| bills ($100,000); Costa 

Rica real estate bill ($100,000+) and $100,000 

miscellaneous (including continued funding for the 

ship Erria) . 

Planning for the establishment and funding of a 

permanent European joint venture company to support 

U.S. /Iranian commercial transactions over a several-year period 

(until such time as the two governments could deal directly 

with one another) was terminated when these operations were 

exposed. Israel had concurred in this venture, and it was 

contemplated that Iran would donate $20-40 million to the new 

venture to maJce it viable. This would include sufficient funds 

to "forward finance" procurements from the U.S. and from Europe 

after agreement by U.S.. and Iranian government officials as 

envisioned in the nine-point plan. 

The allocation exercise periodically undertaken by 
General Secord was admittedly based on estimates, but it is 
against this bacJcground of competing claims and demands that he 
made his decisions to fund the Contras at whatever level 
circumstances would permit. Ghorbanifar ' s claims were serious. 



UNCLASSIFIED 




817 



Sharp. Green & Lankforo 

The Honorab-le Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987, 
Page 13 

and they presented a credible threat to the continuation of 

operations (although not in General Secord's view in any 

meaningful legal sense) . Contrary to the picture painted at 

times at the hearings that abundant excess money was available 

to fund the Contras, funds were expended to support their 

operations almost always with consequent risk to the 

continuation of the Iranian operation and to General Secord 

personally. Had the Contra airlift project not been deemed so 

vital by General Secord, it might have been suspended or 

stopped any number of times as a result of other funding 

requirements. 

In the final analysis over $4 million from che 
Iranian operation was expended for the benefit of the Contras 
as a result of General Secord's juggling of his priorities. In 
view of the fact that General Secord devoted two years of 
around-the-clock effort to making these projects work, we think 
it hardly fair to engage in an after-the-fact review of his 
priority decisions. He .was after all, despite contentions to 
the contrary, acting in furtherance of the policies of this 
government and with its blessing. 

There are a couple of other "money" issues which have 
been exaggerated to grotesque proportions. In October, 19S5, 
well before the Iran initiative began. General Secord purchased 
a 1973 Seneca airplane for the approximate sum of S35,000. The 
money used to buy the aircraft came from a consulting fee and 



UNCLASSIFIED 



818 



SC 4 

Sharp. Green & lankford 



The Honorahle Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 14 



%j: 



I'm 



was reported as income on General Secord's 1985 tax return. In 
1986 General Secord purchased a Porsche automobile for $31,000. 
(Porsche never got so much free publicity) . General Secord 
insists that the money to buy the car was borrowed from Albert 
Hakim, consistent with a pattern of loans made to him in 
accordance with a 1983 business agreement, which includes yet 
another loan of $32,000 for legal fees made by Hakim in 
February of this year. 

We, of course, are not familiar with the personal 
purchases of members of Congress. It would be interesting 
(perhaps) to know all about them. But what is so unwholesome 
or sinister (or of national importance) about buying a Porsche 
and a 15 year old airplane, and if you insist on linking these 
acquisitions to the Iran/Contra projects: "where's the beef?" 
If you add up every dime that found its way to General Secord's 
pockets which is in any way arguably related to the Iran/Contra 
projects (even without regard to what it represents) , you never 
get above $225,000..00.. That is hardly an extraordinary sum for 
two years of work, and it is clearly unworthy of the 
exploitation attempted by some members of the Committees. 

Certain members of the Committees chose (we think 
deliberately) to ignore confirmed facts in an effort to 
embarrass General Secord and serve their personal, political 
agenda. For example. General Secord was accused of using 
donated funds to purchase Maule aircraft for himseli, a 



UHCUSSIHED 



819 



Sharp. Green & Lankforo 

The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 15 






Msim 



supposed fact which astonished several of the donors during 
their public testimony and which was presumably designed to 
elicit similar emotions from the listening audience. The truth 
is simply that all Maule aircraft were transferred to the 
Contras; the Committees know that and knew it at the time this 
charade was played out in public. 

Toying with the facts is unbecoming during a 
congressional investigation, yet it occurred frequently. In 
interrogating another witness, a Senator asserted that General 
Secord and Albert Hakim were the owners of East Inc., a company 
which contracted to provide operations and maintenance services 
in Central America. The claim is false. Even worse was the 
Senator's use and manipulation of documents to make it appear 
that General Secord was charging excessive profits on aircrew 
salaries. The facts are that the documents used by the Senator 
did not relate to aircrew salaries and, even more 
significantly, the documents were not records of any company 
owned or controlled by General Secord. The language used by 
the Senator to make his point was downright ugly, and the whole 
episode was outrageous. 

Other members attempted to dance on General Secord 's 
back by asserting that he had no security clearance. Again, 
the truth is that General Secord held the highest level DOD 
security clearance until January of 1987. When Felix Rodriguez 
was called to testify, he was fed a series of leading questions 



liNHASSIFlED 



820 



Sharp. Green & Lankford 

The Honorable Lee H. Hamilton ar.d 

Daniel K. Inouye 
August 20, 1987 
Page 16 ' 



% 



•^C 04u.. 



'•% 



(in reality the answers) in an attempt to taint General Secord 
with the sins of convicted felon Edwin Wilson. Although 
Rodriguez denied any association with Wilson, it is he, not 
General Secord, who worked with and for Wilson over an extended 
period of time. Moreover, when Rodriguez was prompted to 
criticize the military supplies furnished by General Secord to 
the Contras, someone was kind enough to expose the fact that 
Rodriguez's hearsay was based on information from Mario Del 
Amico, a competitor m the arms supply business. 

The attempt by certain members to seize opportunities 
to link General Secord to Edwin Wilson evolved rather quickly 
into blatant character assassination. General Secord did know 
Edwin Wilson long before the time Wilson's legal problems 
arose. Allegations first raised m 1982 that General Secord 
(and others) might have been ftivolved in business transactions 
with Wilson were exhaustively investigated by the Department cf 
Justice for over two years. The investigation of General 
Secord was ultimately terminated and formally closed for lack 
of any evidence — a fact never mentioned by any member during 
the hearings. 

General Secord and his colleagues were also 
criticized for departing from or misrepresenting United States 
foreign policy. This claim is absolutely baseless. His 
dialogue with the Iranians tracked established policy and was 
based on approved proposals. As the tapes would demonstrate. 



UNCLASSIFIED 



821 



Sharp, Grccn & Lankforo 



The Honorable Lee H. 
Daniel K. Inouye 
August 20, 1987 
Page 17 



% 



Hainilton and 



"%. 



sc 



04U 



yf^ 



General Secord never cominitted the United States to fighting 

the Russians in defense of Iran. General Secord knew about, 

and was qualified to explain, United States policy in regard to 
a possible Soviet invasion of Iran. 




Although other portions of the record are deserving 
of comment, it is impossible to exeunine each and every 
distortion or inaccuracy in a letter such as this. What is 
important to emphasize is that General Secord was made to pay a 
very high price for voluntarily coming forward, without 
immunity, to assist the Congress in its investigation, and, for 
sure, he is not inclined to answer the phone if his government 
calls again. 

Certain of the immunized witnesses were actually 
praised for their, courage to testify, in contrast to General 
Secord, whose reputation and integrity were attacked for 
obvious, partisan purposes. Although this entire experience 
has been more than slightly bitter for General Secord, he 
reamins confident that he acted appropriately and honestly i- 
the service of his country. 

Whether by its treatment of General Secord the 
Congress has hampered its ability to entice and receive 



iiNCiASsinr!) 




822 



04 

Sharp, Green & Lankford 

The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 18 " 

voluntary testimony from important witnesses is a separate 

question. Certainly the treatment accorded General Secord 

could not have been designed to enhance the image of Congress 

as an impartial and fair investigator. 

On behalf of Richard V. Secord, I respectfully 

request that this letter be entered in the official record of 

the Committees' investigation. 

SiifcWely yours. 



TOG: jme 
attachments 




Thoma^ C. Green 



-.^;-? 



823 



UNCLASSinED 



Smasp. Gbeen & Lankforo 

W«s- sG'Cs D C 20C36 



C 04 



26, :99' 



•I .c»-r -.( 



John W. Nields, Jr. Esq. 

Counsel to U.S. House Select 

Comrittee to Investigate Covert 
Arms Transactions with Iran 

Roor. H419 

United States Capitol 

Washington, DC 

Pear Messers. Lirar. ar.d Nields: 




(V^ 






<P 



I aiT. writir.g to clear up sorie confusion which has 
arisen with respect to the purchase of certain assets for the 
benefit of the Contras. Three Maule aircraft were tranferred 
to the Contras in 19S5 at the direction of Mr.Secord. The 
first aircraft, tail ruri>er N5657H, was titled to NRAF, Inc., 
52 y el Vira Mendez, Para-ra, RP, m approximately July cr 
August of 1965. This aircraft was previously owned by .Vr. 
Secord and several colleagues. The Co.".tras purchased t.'-.e 
aircraft by wire tra.- sf err ^r.g an a.nou.-'.t equivalent to the 
:s--3tar.dir. 5 ir.dertedr.e5s cr. tr.e plar.e. 

.Vcule aircrafL tail r.-jr-iers N56611 a.'.c N5661J were 
titled in the r.ar'.e of Nf^Ar, I.-.c. c.-. SepterJrer 10, 1985, &r~ 
c. October 29, 1935, respectively. These aircraft were biucht 
at cost frc.T Kaule Air, Inc. All three of these aircraft are 
cwr.ed exclusively by the Contras. -Mr. Seccrd has no i.iterest, 
direct or i.'.direct, ir any c: these plar.es. 

Curing the i.'ter r r git icr. of Ge.-.er=. Sir.glaut, 'r.i 
was led to ccTfirr. tha^ he c-ulc nave bcjgh- twice the quar.t.t.. 
cf munitions at the prices charged by y.r . Seccrd. 7'.: = 
ccr.clusicr. is absolutely withr^ut rent. Cr.ly f^ur iters wer-r 



S--::c_b s: 
per rifle. 






rit-e , 



Mr. Ser-rd scld 5,::C aV- 
I'.GC per rifle. Tr.e uccder. 
a ccst cf apprcxir a-rel;..- S2c'.C 
t a ICt rark up t: the Ccr.tras, 



General Sir.glsub scld 15,CjC,0CC rc-r.is cf 
at a price cf SllC.ri per thc-sand. y.r. Seccrd scld 
rcunds at a.-, average pr.ce cf S136.CC per thousand, 
-ark up, y.r. Sec;rd'= price equates to 2.5^ per 
:.-.e-half the quantity. 



6 2 x 



HMni AQ^inrn 



824 



SmaB* GoEEn & Las'^OOO 



UNCLASSIRED 



4 i G .'^ 



ger.eral Singlaub- sold 200 RPG-7's at S1,6^0.0C per 
la'jrcher. Mr. Seccrd »old 8C RPG-7's at $1900.00 per la;.-c^.er. 
Mr. Secord's price va« 15% higher tha.T Ger.eral Smglauc's price 
or. less thar. c.-.e-half the s:ze cf Sir.glauti'E crier. 

C?'. era! Sing la ui: scld 5,000 ?.?Z-' r:-r. is at 
Sl?r.c: per r:_.-c:. Mr. Sercrc srld 2,C;: s.rh rc„ri= c-. 
S225.C0 p"er rcur,G. This preser.ts a 21.6% rrark up ever Gfcr.eral 
Si.'-:glaub ' s price en little irore thar. half the qu^.'-.tity supplied 
by Ge.ieral Singlaub. 

Ger.eral Singlaub shipped 348 tons of material and 
charged the Contras approximately 5300,000.00 for shipping. 
Mr. Seccrd shipped over 600 tons and charged the Contras 
S150,000.00 for shipping. 

If Mr. Seccrd had dealt in quantities corrparable to 
those purchased by General Singlaub, the resulting price 
dif f ere.-.t lal wculd have beer de minimus , which means, in 
effect, that Mr. Secord was buying at substantially better 
prices . 



S^-cerely y»urs, 

Thorras C. Green 
Attorney for 
Richard V. Seccrd 



rC :ddd 



UNcussife 



825 



UNCLASSIFIED < °< > 



ARMS SALES PROFIT ANALYSIS 

P.REPARED BY RICHARD V. SECORD 

1985-1986 

Phase I (Airlift February 1985; Sealift April 1985) 
Sell 52,346,175 
Costs 1,634,901 
Profit 711,2:'4 or 30.3% gross (43.5% of cost) 

Phase II (Airlift March 1985) 
Sell $1,235,596 
Costs 924,756 
Profit 310,840 or 25.1% gross (33.6% of cost) 

Phase III (Sealift June 1985) 
Sell $6,407,512 
Costs 5,190,512 
Profit 1,217,000 or 18.99% gross (23.45% of cost) 

Phase IV (Airlift November 1985) 
Sail $2,255,200 
Costs 2,003,200 
Profit 252,000 or 11% gross (12.78% of cost) 



UNCUSSIFIED 



826 



Phase V (Airlift March 1986) 
Sell $504,140 
Costs 354,140 
Profit 150,000 or 29.7% gross (42.3% of cost) 




04 



Phase VI (Airlift April 1986) 
Sell 5441,640 
Costs 353,337 
Profit 88,303 or 19.99% gross (25% of cost) 

Phase VII (2 airlifts May 1986) 
Sell $938,635 
Costs 637,467 
Profit 301,168 or 32% gross (47.2% of cost) 

GRAND TOTALS 

Sell $14,128,898 

Costs 11,101,313 

Profit 3,027,585 or 21% gross (27.3% of cost) 

Note: S«alift July/Augvast 1986 aborted 
Costs about $2,400,000 
Sold CIA 1,500,000 

Returned to Enterprise - 1,200,000 (300,000 broilers 

fee to DEFEX) 



yNCL/OTHED 



827 



UmSSIflEB 



3 - 



'^^ C 4 

TOTALS OF TRANSACTIONS PRICED EXCLUSIVELY BY SECORD 

Sell, $11,782,723 

Costs 9,466,412 

Profit 2,316,311 or 19.65% gross (24.5% of cost) 



UNCLASSnED 



828 



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ATTN: nRS NANCY HORABIA 
RE : CSr INVESTnENTS LTD. 

PLEASE TELEX TRANSFER THE AHOUNT OF US OLRS 125* 880.— 

BY ORDER OF UOALL RESEARCH CORPORATION 

TO: FIRST UNION NATIONAL BANK 
CHARLOTTE - NORTH CAROLINA 
ROUTINE TRANSFER NO. 853 008 219 

FOR: GREENSBORO - ROUTINE NO. 853 188 580 

iM EAyOURQO^^^y^^^^ftMLTON'—') ESCROW AGENT 

TEST KEY NO 489 

TH^ YOU IN ADVANCE, 

BE5. •REGARDS. 

CSF'^iNVESTnENTS LTD. 

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P THE NAVY 

= i;c-4'»-:=s jNireo s-A'=5 vASi'.e :opps 



^ 32-^/ 




"Oil 

<> Tulv 1"8'' 

The Honorable Daniel K. Inoiive 

The Honorable fee H. Hamilton 

Chairmen, House and Senate "^elffct Committee 

on the Iran/Contra Affair 
U. S. Capitol / 

Washington, D.C. 20515 

Gentlemen: 

In response to a telephonic request *or information from vour 
staff on 8 Julv 1987, answers are provided to the following 
questions : 

1. Old LiCol North make a request around Aoril 1986 for the 
Marine Corps to provide security for his hone? 

A review of our records indicates that Headquarters, ".S. 
Marine Corps, never received such a request. However, 
LtCol North was assigned to the National Security Counsel, 
and we have not conferred with other federal agencies to 
determine if a request was made of them. 

2. What procedures would have ^een fo'^owed if the Marine 
Corps or the department of the Naw had received a request 
from LtCol North for protection in Apri' 1986, and determined 
that the threat was real? 

The request would first have been discussed with the 
Secret Service, who has primary responsihil Itv for White 
House and NSC securitv. If thev declined protection. 
_ discussions would have been held between the Secretary of 
^ the Navv and the Commandant of the Marine Corps to 
evaluate options and review courses of action. 

3. What is the extent of the protection that the Marine '"orps 
is now providing for LtCol North's home' 

Thirty-five special agents of the Naval Intelligence 
Service are assigned this week to provide 24-hour 
surveillance of LtCol North's home. The normal coverage 
since April 1987 has been fifteen to twentv agents. 

4. Did LtCol North request the nrotection' 

LtCol North did not make a direct request per se. Mis 
lawyer reported receipt of FBI information regari^ina 
threats. These threats were evaluated and brouaht to t>»e 
attention of the Assistant romman'^ant of the ^'arine '"ores 



wS 



UNCLASSIFIED 



843 



UNtlHSSW 



Gi79 



and the Undersecretary of the Vaw wit*i a recommenHat ion 
by MIS that protection be proviHei*. 

5. Who decided to proviHe rhe protection' 

The decision was maile *>v the "n'^ersecretarv of t^e Vaw on 
8 April log-'. 

6. What were the Hares the Ltf"ol ^orth anH his familv uent to 
Camp Lejeiine, North Carolina, for protection' 

n-f April 198^. 

I understand that other questions relating to the criteria \ise(^ to 
determine whether protection was warranted anH the statutory anf^ 
regulatory authority for such protection will he addressed 
separately by the Secretary of the Navy. 

Sincerel^, 



PE'^FR "-MT MUPPHY J 



Counsel ^or the Commandant of the Marine Corps 



*U«to 



844 




ONCHSSIRED 



THE SECRETARY OF THE NAVY 
WASHINGTON C 20350 



N F 



9 July 



C3Bn 



The Honorable Warren B. Rudman 
United States Senate 
Washington, D.C. 20510 

Dear Senator Rudman: 

Your staff has requested that I provide you information 
concerning the policy of the Department of the Navy concerning 
protection of personnel. 

Protection for Department of the Navy personnel, their 
dependents, facilities, and equipment from terrorist acts is 
provided pursuant to the statutory authority of the Secretary of 
Defense (10 U.S.C. 113) and the Secretary of the Navy (10 U.S.C. 
5013). Enclosed are the applicable directives implementing 
departmental policy with respect to such protection. Within the 
Department of the Navy, the responsibility for providing 
protective services has been assigned to the Commander, Naval 
Security and Investigative Command (Naval Investigative Service). 
Upon receipt of information indicating a threat to a particular 
individual, the Commander Naval Security and Investigative Command 
would assess the validity of the information, determine whether 
protective services were appropriate, and, if so, at what level. 
If the military member was, at the time of the reported threat, 
assigned outside the Department of the Navy, Commander Naval 
Security and Investigative Command would coordinate any 
consideration for protective service with other interested 
agencies. 



Sincerely, 

/Jaiies H. Webb, Jr. 



Enclo*ttS«s 





...iASSIFlEO 




845 

Sepcettoec 3) 1986 

« f 1265 



-™»n^ Ollui^^^^lflC 



FROM 



Stavtn K. a«rry, Associate Counsel ^v/f If P2 'd'^ 



R£: August 6, 1986, 3:35 a.m., Mhice House Sicuation Room. 

Olscussion wicn Mr. Ollie Noccn regarding House itesolucion 485, 
directing the President to provide to the House of Representatives 
certain information concerning tne activities of Lieutenant Colonel 
Oliver North or any other memeer of the staff of the National 
Security Coancil in support of tne Sicaraguan Resistance, sucmittsd 
Dy Congressman Tom Coleman. 

In attendance: 3ob Pearson, Counsel, NSC; Ollie North, Special Assistant, 
NSC; Ron Sacle, Director of Legislative Affairs, NSC; Tom Latimer, HPSCI; 
Steve 3erry, HPSCI. 

Memoers present: Chairman Hamilton, Mssrs. McCardy, Kastenmeier, Oaniel, 
Roe, Stuiiip, Ireland, Hyde, Cheney, Livingston and McSwen. 

Mr. Ollie North indicated that his principle mission was to coordinate 
contacts with the FDN (the Nicaraguan Resistance) and U.S. government 
officials. One of the main purposes of his job was to assess the long-term 
viar^ility of the FDN as a democratic institution and to explain the a.S. 
government's relationship to that organization including the explanation of 
th« Boland Amendment. North indicated he gave the FDN and their officials 
advice on human rights and political advice concerning the need for an 
unproved civic image. North also explained the United States' legal position 
wiui regard to the guidelines and limitations of U.S. support as outlined 
under the Boland Amendment. Prior to the ban on assistance to the Nicaraguan 
Resistance of October 1, 1983, North indicated he had given books to the 
leadership of the FDN which focused on creating guerrilla movements and 
popular support for their goals, ideas and objectives. In support of that 
concept. North asked the FDN leaders to focus on the principles and the 
tactics espoused by such i/idividuals as Maosetung aod Sungsu and Cheginecria 
and also asxed that they focus on the internal and external support necessary 
to continue tne movement. North indicated that he stressed these points witn 
Calero, Bemudez, CruZ/ Robello, and Pastors wnen he was an active 
participant. 

led regarding his relationship with General Singluab, Colonel 

that although he knew him ne had no association as indicated 
'ts and it was unfortunate tnat General Singlaub made tnose 

Mr. Roe asked Mr. North to connent on his relationship with i^ooert W. 
Owen, a former Hill staffer who -was employed by the Nicaraguan Humanitarian 
Assistance Office ($50,000 contract), to facilitate delivery of supplies to 
the FDN and UNO. Colonel North indicated that he had talked to Robert Owen, 
had only a casual and formal contract with him, was familiar with 0<«n but 
that his contacts were greatly exaggerated and were not nearly as extensive as 
the press had reported. 




Declai:if;-iij/RsieaseJ g;;.^W^!l__', f ^ \ ^^ ^ 

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Siinil*rly# itc. North indicted h« did not know Mc. Terrill, an individual 
wno had appMrtd on numcous news shows and wno nad oe«n quoced in newspapers 
supporting Allegations of improper activities of Colone :)ort.l. furtnerrur*, 
it seemed u tnough Mr. Terrill was not- wno ne said he was and nad never oeen 
an Army officer. 

Mr. Norcn in a direct response to a question regarding the proprieties of 
nis activities after October 1, 1984, responded that he did not in any way, 
nor at any tune violate the spirit, principles or legal requirements of tne 
3oland A.-nendment. 

congressman Ireland indicated tnat he had heard of several personal 
difficulties Colonel North and his family had experienced since the newpaper 
articles diclosed his joo, duties and responsibilities m tne NSC. 

To summarize. Colonel ;4orth, his wife and children, have been targets of 
organized protests and pickets in front of his hone, his personal property was 
damaged, fences torn down, his car damaged, his house had been broken into, 
his dog had been poisoned, his family received continuous threatening phone 
calls during all hours of the day and night and his children had been 
tnreatened. At tne suggestior^^he FBI and Secret Service his fanily -was 
moved for several weeks to^^MBJB while tfl ggov^d s ecurity procedures were 
installed in his home at North's eii 



^^^ [ Colonel .North has also been listed 

by the PLO terrorist organization heade3''B7 Abu Nadul, as an enemy of t.ne 
Palestine Liberation Organization and has been targeted to be killed. These 
international incidences seen to be tied very closely to a Soviet 
disinformation campaign in response to U.S. policy in Central America. 

Near the conclasion of the meeting. Congressnian HcCurdy supported by 
several other Members of the Cotmlttee indicated that althougn it was no 
longer necessary for tne Intelligence Coonittee to meet to report on 
H. Res. 485 to stay its privileged status, he hoped the Intelligence Connittee 
would meet to adversely report a. Res. 485 in the near future. The Chairman 
responded that action would oe more appropriately done at a Pull Committee 
Meeting after all Maobers nad been notified of the Connittee meeting. 

The OMiinnn expressed his appreciation for the good faith — effort tr.at 
Admiral MAidexter had shown in arranging a sieeting and indicated his 
satisfactlM in the responses received. Ron Saole froo the NSC staff 
expressed the Adninistration's concern and his nope tnat tnis meeting had 
satisfied the Conaittee's concern with regard to the allegations of in^roper 
conduct oy Lt Col Sorth and further expressed his nope that this meeting .^ould 
se tne final chapter in the CoiMittee's inquiries. The Chairman indicated 
that, barring any new or additional inforraation, he too thought the Comictee 
would be satisfied with the information that it had received. 




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Washington D C 20C36 



August 18, 1987 



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Arthur Liman, Esq. 

Counsel to U.S. Senate Select 
Committee on Secret 
Military Assistance to Iran 
and the Nicaraguan Oppos. 

901 Hart Senate Office Bldg. 

Washington, DC 20510 

Gentlemen: 



John W. Nields, Jr., Esq. 

Counsel to U.S. House Select 
Committee to Investigate 
Covert Arms Transactions 
with Iran 

Room H419, United States Capitol 

V.'ashington, DC 20510 



On behalf of Richard V. Secord, I am writing to 
correct certain aspects of his testimony given under oath at 
the last deposition session, at which both of you were in 
attendance. I am sorry that I can no longer supply the precise 
date of that session. 

Mr. Secord was asked to acknowledge that he had been 
advised concerning a potential conflict of interest on the part 
of the undersigned arising out of the undersigned's refusal to 
answer inquiries from the Office of Independent Counsel about a 
specific incident which arose during the time the undersigned 
represented both Lieutenant Colonel Oliver North and Mr. 
Secord. 

Mr. Secord replied that he had been independently 
advised concerning this matter, and he confirmed his "insistence 
that the undersigned remain as his counsel. At the time of his 
answer, Mr. Secord had- had conversations with other attorneys 
m my office concerning this matter, but, as I explained to Mr. 
Secord following the deposition session, those consultations 
could not be deemed to be with separate and unrelated counsel. 

Since that time Mr. Secord did retain and did consult 
with separate and unrelated counsel to explore all the rar.i- 
fications surrounding the potential conflict of interest 
issues. Since receiving this_ independent advice, his decision 
rem.ams the same. However, 1 thought it prudent to write ycu 
and to clarify what I think may be some confusion m the 



f^ 



J D ot la6sif i»^Released oajhl^L. 

\in d8 r prevls io ni o f E .Q . l?^''? - 
.[ 3. Reger, flational Security Council 



'mmm 



873 



Shapp Gbeen & Lanhfopo SC 04 uo 



August 18,. 1987 
Page 2 



UNCUSSIFIED 



record. Accordingly, I ask that you consider this letter as 
supplenentation to, or correction of, Mr. Seccrd's previc-s 
testinony. 

"y yours 




_2 



nas C. 
Attorney for Richard V. Seccrd 



Seen and Agreed to: 



ich a g a -V-i— Secord 

f 



Date ' 



UNCUSHO 



874 



# 



!^\^^. 



LAW OFFICES 

ARP, Grcen & Lankforo 

I800 Massachusetts Avenue. N w. 
Washington. D. C 20036 



S C 4 - 



JAMES E. SM»»» 

TmomaS c. obecn 

v. thomas lankfoho, jr. 

STEVEN M. JOHNSON 

SARSAOA STRAUGHN HARR'S 

MARKM. KATZ. AUgUSt 20, 1987 Te.ECO»C= 20i;J9.- 

ROaERT L. vOCEl. - -E.C* «9' 'SOS 3 = w 



202I SS9 



HAND DELIVERED 

The Honorable Lee H. Hamilton The Honorable Daniel K. Inouye 

Permanent Select Committee on Chairman, U.S. Senate Select 

International Affairs Committee on Secret iMilitary 

U.S. House of Representatives Assistance to Iran and the 
United States Capitol Nicaraguan Opposition 

Room H405 901 Hart Senate Office Building 

Washington, DC 20515 Washington, DC 20515 

Gentlemen: 

On behalf of Richard V. Secord, I am writing to 

correct and comment on certai:; testimony taken before the 

Select Committees and to respond to certain statements made by 

various members of the Committees which misrepresent the facts 

and portray my client ana his conduct in a false and 

underserved light. In view of the effort undertaken by various 

members of the Committees to discredit General Secord and che 

attempts to impeach portions of his testimony, we feel it fair 

and appsopriate that this letter and the accompanying exhibits 

oo be madtt a part of the official record of investigation; and we 

formally request such relief. 

g§ General Secord was the first witness called to give 

QQ public testimony. . -ilis appearance before the Committees 

followed countless' hours of debriefing during which he 

patiently and with great accuracy recited the facts and 



Par„: y Declassified /Rsleased o.i //y. 



und6r provisioni of E.0. 123? 
Q RMf M?rh.i(ai Security Council 



iimp:i AsafiFR 



875 



oNCussra 



4 Shar^, GnetN & lankforo "■■"■ ■ i« ■* -»■■ 

The Honorable Lee H. Hamilton and 

Dani«l K. Inouye 
August 20, 1987. 
Page 2 ' 

circumstances surrounding the operational details of the Contra 

supply operation and the Iranian initiative. It is only fair 

for the Committees to acknowledge that the information provided 

by General Secord was of critical importance and of invaluable 

assistance to the progress of the investigation. It should 

also be noted that General Secord ultimately succumbed to the 

entreaties of both Chief Counsel who largely induced his 

voluntary testimony by appeals to General Secord 's sense of 

duty, service and responsibility to his country and the 

Congress. 

General Secord was prepared for tough questions and 
tough criticism. But in light of the way his testimony was 
procured, we were not prepared for unfair criticism or for the 
technique employed by some interrogators of using false 
information to prompt derogatory comments about General Secord 
from other witnesses. When, from time to time, we contacted 
the staff to tender correct information and corroborating data 
we were usually, thanked, but never vindicated. All the 
misinfoSBStion has been permitted to linger, and the record 
requires and deserves correction. 

Several Senators were effusive in their use of the 
term "profiteer" when making reference to General Secord. We 
start from the rather basic proposition that every man is 
entitled to make a living. General Secord devoted two years to 
the Iran/Contra projects at the expense of virtually all other 



OiiiUliMll 



876 



'a Q 4 u c 

Sharp. Green & Lankforo 



The Honoraisle Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 3 






m 



business pursuits. During that time he received a salary of 

$6000 per month. The amount is hardly excessive. 

Albert Hakim acknowledged in his testimony on June 3, 

1987, that he accumulated profits from arms sales for the 

benefit of General Secord in an account known as Korel Assets 

even though General Secord forswore any such remuneration. 

None of the accumulated profits were ever distributed to 

General Secord, a fact confirmed by House Counsel, Mr. Nields, 

when he stated publicly on June 3rd that: 

I think the record should reflect that 
unlike some of these otner accounts, we 
have been able to determine no withdrawals 
from the Korel Assets account as of this 
date. 

A great deal of time and attention was devoted by 

members of the Committees m examining the profit earned on 

arms transactions. The frenzy to portray these sales as 

generating exhorbitant profit came close to overshadowing what 

should have been the more important issues. General Secord 

testified that th« gross profit on arms sales ranged from 

between 20 percent to 30 percent. That markup was and is 

extremely reasonable, and the merchandise delivered was 

unquestionably of high quality. When General Singlaub appeared 

some members again attempted to use his testimony to criticize 

General Secord 's efforts through a supposed comparison of the 

prices charged by each. The comparison was nonsense ar.d t.-.e 

equivalent of an apple and_orange exercise. We demonstra-ed 



imw kWm 



877 



I 'J H -J 

Sharp. Green & Lankforo ' ■' ' 



The Honorab^ie Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987. 
Page 4 



IINftAXSlfe 



all of this in a letter I wrote to the Committees on May 26, 
1987. A copy of my letter is attached hereto for your 
convenience. Additionally, we supplied the staff with an "Arms 
Sales Profit Analysis" memo which was nothing more than an 
exercise in basic arithmetic confirming the profit margins 
testified to. A copy of this document is also attached. It is 
our belief that the staff has now been able to confirm the 
basic accuracy of our figures. Finally, I note the testimony 
of General Secord's customer, Mr. Calero, who acknowledged in 
his testimony on May 20, 1987, that General Secord's prices for 
ammunition and FAL type rifles were extremely reasonable and 
about 50 percent less than what this government was charging 
the witness for the same items. 

Although General Secord never withdrew money from his 
so-called profit account and although he attempted no movement 
or secreting of funds during the days when these operations 
were on the brink of public disclosure, the notion was born dnd 
nurtured by severjtl members of the Committees that the residual 
funds ware accumulated and preserved principally because of 
devious profit motives, all of which worked to the unfortunate 
detriment of the Contras. This is a pernicious and 
particularly offensive allegation. 

Funds were on hand when these transactions terminated 
simply because the ongoing operations were aborted. General 
Secord was saddled with the responsibility tc preserve a::c 



K*<J.<:iFIED 



878 



SL U4U, 

Sharp, Green & Lanktopo 



.!^% 



m 



The Honorable Lee H. Hamilton a 

Daniel K. Inouye 
August 20, 1987. 
Page 5 

allocate funds in response to a number of real and anticipated 

needs. This required a continuing assessment of priorities and 

the need to reserve against contingencies known and un)<nown. 

General Secord delivered to the Committees long ago most of his 

original, contemporaneous worksheets which reflect his 

decisional process. None of this material was contrived, and 

no one has been silly enough to suggest otherwise. Even a 

cursory review of this material will demonstrate that General 

Secord intended that the residual funds were to be devoted to 

operations. 

Rather than burden this letter with a detailed 

summary of General Secord 's testmony, I have included ir\ 

extrapolation from the documents he provided, which is 

essentially a series of "snapshots" which capture the process 

of allocation over time in 1986. 

FUNDS AVAILABLE AND ANTICIPATED DISBURSEMENTS 
A. Early E«bruary-, 1986 — S87,000 available. Several 
million dollars required to carry through with the 
Central American airlift project. 



UNCUSSIRED 



879 



Sharp Gpeen & Lankfopo 



The HonorAble Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 6 



% 



«% 



B. Early March, 1986 — S6 million available. S2-4 
million required for aircraft hull self-insurance per 
Israeli demand. 

C. Estimated disbursements for March and April, 1986, 
included the following: 

Israeli Air Force § 150,000 
Costa Rica Air Strip 

Project (Contra) 150,000 

Defex (Contra) 2,360,000 

Aircraft Procurement (Contra) 1 , 000 , 000 



Salaries (Contra) 


50, 


,000 


Contra Medical Expenses 


50, 


,000 


Initial Blowpipe 






Procurement (Contra) 


200, 


,000 


Fenced Insurance 






Fund (Contra) 


200, 


,000 




S4,160. 


,000 



We are confident that the Israelis will confirm this 
requirement. 

Does not include what by this time is a $4 millicr. 
hull insurance fund. 



VNCUSSIFIFD 



880 



ShaUR GnCEN & LANKFORO »»■* rmmm.tm. 



'^%^. 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987. 
Page 7 

D. April 1, 1986 — S5 million available. estimated 

disbursements for April, May and June, 1936, 

included: 



Aircraft Operations and 






Maintenance (Contra) S 


650, 


,000 


Israeli Air Force 


150, 


,000 


Communications Procurement 






(Contra) 


100, 


,000 


Initial Blowpipe Procurement 






(Contra) 


350, 


,000 


Medical Supplies and Local 






at^^^^^^^H 






(Contra) 


45, 


,000 


Southern Air Transport 






(Contra) 


120, 


,000 


Salaries (Contra) 


72, 


,000 


Oefex CContxa) .. 2, 


,200, 


,000 


Iiraeli TOW s 


822, 


,000 


S4 


,509, 


,000 



Does not include what by this time is a S4 nillic: 
hull insurance fund. 



UNCussra 



881 



Sharp. Grcen & Lankforo 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 8 



.%X 



1lfl(n 



E. End April -- $4 million available. $4 million needed 
for hull insurance reserve. Estimated disbursements 
through June included: 

Defex (Contra) S 280,000 
Aircraft Operations and 

Maintenance (Contra) 650,000 
Three British Air Crewmen 

(Contra) 110,000 
Blowpipe Procurement (Contra) 1, 000 , 000 

Salaries (Contra) 72,000 

Israeli TOW s 822,000 

Costa Rica Air Field (Contra) 60,000 

SAT (Contra) 55,000 

Insurance Fund Fenced (Contra) 200,000 

C123 Spare Parts (Contra) 200,000 

Israeli Air Force 185,000 

S3, 634, 000* 



Does not include what by this time is a $4 nillicr 
hull insurance fund. 



UNCIASW 



882 



Sharp. Gbeen & Lankforo 



The HonoraJale Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 9 



%te. 



% 



Early June, 1986 -- Hull insurance requirement still 
in effect. S13 million available. Estimated 
disbursements through July, 1986, included: 

Refund demanded by 

Ghorbanifar $15,000,000 

Airlift Operations and 

Maintenance through 

July (Contra) 500,000 

Salaries through July (Contra) 90,000 
Israeli Air Force 240,000 

Costa Rica Airfield Completion 100,000 
Shipload of Munitions (Contra - 

for delivery in August 3,300,000 
Insurance Fund Fenced (Contra) 200,000 
Aircraft Procurement 

(Contra) 500,000 

519,930,000* 

July 1, 1986 — S12 million available. $2 million 
still needed for hull insurance. Ghorbanifar claims 



Does not include what by this time is a 54 millic 
hull insurance fund. 



UNCUSSIHED 



883 



Sharp. Green & Lankforo 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 10 



%f. 



%. 



04U 



SIC million owed to him. Estimated disbursements 
through August, 1986, included: 

Refund demanded by 

Ghorbanifar $10,000,000 

Airlift Operation and 

Maintenance, July and 

August (Contra) 500,000 

Salaries, July and August 

(Contra) 90,000 

Insurance Fund Fenced (Contra) 200,000 
Secure Communications 

Equipment (Iran) 120,000 

Ship, Erria, Operations 

(Contra) 150,000 

Shipload Munitions (Contra) 2,200,000 

S13, 260,000* 

H. Early August, 1986 — S9 million available. 
Ghorbanifar still claims $10 million owed to hin and 
threatens to expose the operation unless paid. 



Does not include what by this time is a S2 r.illior 
hull insurance fund. 



UNCLASSIFIED 



884 



4U 
Sharp. Green 5, Lankforo 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 11 



.%Jf, 



% 



Estimated disbursements through September, 1986, 
included: 

Refund to Ghorban.far $10,000,000 
Airlift Operations and 

Maintenance, August and 

September (Contra) 400,000 

Salaries, August and 

September (Contra) 90,000 

Shipping, Erria, Expenses 

(Contra) 90,000 

Insurance Fund Fenced 

(Contra) 200,000 

$10,780,000* 

Although at the time these operations were disclosed 
in November, 1986, approximately $8 million was available, 
Ghorbanifar still continued to press his claim. During this 
period General Secord contemplated the purchase of a "07 
aircraft and spare parts in connection with implementing the 



Does not include what by this time is a S4 million 
hull insurance fund. 



UNCLASSIFIED 



885 



Shakr GnccN & tANKrono 



"%& 



SC 04U 



The HonorabI* Le* H. Hamilton and 

Oanial k. Znouy« 
August 20, 1987 
Page 12 " 

second channel (S2-2.5 million), and roughly a million dollars 

were owed or obligated on account of the following: 

Danish ship agent (5300,000+); Southern Air Transport 

($100,000); death benefits ($200,000); Swiss Air 

charter ($50,000) ;J^^^^H bills ($100,000); Costa 

Rica real estate bill ($100,000+) and $100,000 

miscellaneous (including continued funding for the 

ship Erria) . 

Planning for the establishment and funding of a 

permanent European joint venture company to support 

U.S. /Iranian commercial transactions over a several-year period 

(until such time as the two governments could deal directly 

with one another) was terminated when these operations were 

exposed. Israel had concurred in this venture, and it was 

contemplated that Iran would donate $20-40 million to the new 

venture to malce it viable. This would include sufficient funds 

to "forward finance" procurements from the U.S. and from Europe 

after agreefflcnt by. U.S... and Iranian government officials as 

envisionad in the nine-point plan. 

The allocation exercise periodically undertaken by 
General Secord was admittedly based on estimates, but it is 
against this bac)cground of competing claims and demands that he 
made his decisions to fund the Contras at whatever level 
circumstances would permit. Ghorbanifar ' s claims were serious. 



886 




Sharp. Green & lankforo 

The Honorab-ie Lee H. Hamilton and 

Daniel K, Inouye 
August 20, 1987 
Page 13 

and they presented a credible threat to the continuation of 

operations (although not in General Secord's view m any 

meaningful legal sense) . Contrary to the picture painted at 

times at the hearings that abundant excess money was available 

to fund the Contras, funds were expended to support their 

operations almost always with consequent risk to the 

continuation of the Iranian operation and to General Seccrd 

personally. Had the Contra airlift project not been deemed so 

vital by General Secord, it might have been suspended or 

stopped any number of times as a result of other funding 

requirements. 

In the final analysis over $4 million from cne 
Iranian operation was expended for the benefit of the Contras 
as a resulc of General Secord's juggling of his priorities. In 
view of the fact that General Secord devoted two years of 
around-the-clock effort to making these projects work, we thi.-,k 
it hardly fair to engage in an after-the-fact review of his 
priority decisions. He was after all, despite contentions to 
the coatrary, acting in furtherance of the policies of this 
government and with its blessing. 

There are a couple of other "money" issues which have 
been exaggerated to grotesque proportions. In October, 1SS5, 
well before the Iran initiative began. General Secord purchased 
a 1973 Seneca airplane for the approximate sum of S35,0C0. Tr.e 
money used to buy the aircraft came from a consulting fee and 



luiussra 



887 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 14 



.%J! 



Sharp. Grcen & Lankforo 



%^ 



was reported as income on General Secord's 1985 tax return. In 
1986 General Secord purchased a Porsche automobile for 5 31,000. 
(Porsche never got so much free publicity) . General Secord 
insists that the money to buy the car was borrowed from Albert 
Hakim, consistent with a pattern of loans made to him in 
accordance with a 1983 business agreement, which includes yet 
another loan of $32,000 for legal fees made by Hakim m 
February of this year. 

We, of course, are not familiar with the personal 
purchases of members of Coi'vgress. It would be interesting 
(perhaps) to know all about them. But what is so unwholesome 
or sinister (or of national importance) about buying a Porsche 
and a 15 year old airplane, and if you insist on linking these 
acquisitions to the Iran/Contra projects; "where' s the beef?" 
If you add up every dime that found its way to General Secord's 
pockets which is in any way arguably related to the Iran/Contra 
projects (even without regard to what it represents) , you never 
get above $225,000..00. That is hardly an extraordinary sum for 
two y««rs of work, and it is clearly unworthy of the 
exploitation attempted by some members of the Committees. 

Certain members of the Committees chose (we think 
deliberately) to ignore confirmed facts in an effort to 
embarrass General Secord and serve their personal, political 
agenda. For example. General Secord was accused of using 
donated funds to purchase Mauie aircraft for himselt, a 



888 



Sharp, Green & Lankfobd 'M,j 

M 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987_ 
Page 15 



'^'MmB 



supposed fact which astonished several of the donors during 
their public testimony and which was presumably designed to 
elicit similar emotions from the listening audience. The truth 
is simply that all Maule aircraft were transferred to the 
Contras; the Committees know that and knew it at the time this 
charade was played out in public. 

Toying with the facts is unbecoming during a 
congressional investigation, yet it occurred frequently. In 
interrogating another witness, a Senator asserted that General 
Secord and Albert Hakim were the owners of East Inc., a company 
which contracted to provide operations and maintenance services 
in Central America. The claim is false. Even worse was the 
Senator's use and manipulation of documents to make it appear 
that General Secord was charging excessive profits on aircrew 
salaries. The facts are that the documents used by the Senator 
did not relate to aircrew salaries and, even more 
significantly, the documents were not records of any company 
owned or controlled by General Secord. The language used by 
the Senator to make his point was downright ugly, and the whole 
episode was outrageous. 

Other members attempted to dance on General Secord 's 
back by asserting that he had no security clearance. Again, 
the truth is that General Secord held the highest level 3CD 
security clearance until January of 1987. When Felix Rodrigue: 
was called to testify, he was fed a series of leading questions 



..^wiiUSSm 



889 



Sharp. Gbeen & Lankford MMiiitrnM - '-' ^ U >' 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 16 ' 



%; 



^C 04^ 



% 



(in reality the answers) in an attempt to taint General Secord 
with the sins of convicted felon Edwin Wilson. Although 
Rodriguez denied any association with Wilson, it is he, not 
General Secord, who worked with and for Wilson over an extended 
period of time. Moreover, when Rodriguez was prompted to 
criticize the military supplies furnished by General Secord to 
the Contras, someone was kind enough to expose the fact that 
Rodriguez's hearsay was based on information from Mario Del 
Amico, a competitor m the arms supply business. 

The attempt by certain members to seize opportunities 
to link General Secord to Edwin Wilson evolved rather quickly 
into blatant character assassination. General Secord did know 
Edwin Wilson long before the time Wilson's legal problems 
arose. Allegations first raised in 1982 that General Secord 
(and others) might have been involved in business transactions 
with Wilson were exhaustively investigated by the Department of 
Justice for over two years. The investigation of General 
Secord was ultimately terminated and formally closed for lack 
of any aridence — a fact never mentioned by any member during 
the hearings. 

General Secord and his colleagues were also 
criticized for departing from or misrepresenting United States 
foreign policy. This claim is absolutely baseless. His 
dialogue with the Iranians tracked established policy and was 
based on approved proposals. As the tapes would demonstrate. 



!IWPI««I<!IF1£D 



890 



Shahk Grccn & LANKrono 



% 



The Honorable Lee H. Hamilton and 

Daniel X. Znouye 
August 20, 1987 
Page 17 



%/? 



•^C 04U 



^ 



General Secord never committed the United States to fighting 
the Russians in defense of Iran. General Secord knew about, 
and was qualified to explain. United States policy in regard to 
a possible Soviet invasion of Irar 




Although other portions of the record are deserving 
of comment, it is impossible to exaunine each and every 
distortion or inaccuracy in a letter such as this. What is 
important to emphasize is that General Secord was made to pay a 
very high price for voluntarily coming forward, without 
immunity, to assist the Congress in its investigation, and, for 
sure, he is not inclined to answer the phone if his government 
calls again. 

Certain of the immunized witnesses were actually 
praisad for their, .courage to testify, in contrast to General 
Secor^v whoae reputation and integrity were attacked for 
obvious, partisan purposes. Although this entire experience 
has been more than slightly bitter for General Secord, he 
recunins confident that he acted appropriately and honestly ir. 
the service of his country. 

whether by its treatment of General Secord the 
Congress has hampered its ability to entice and receive 



liMP! iic^nnrn 



891 




Sharp. Green & lankforo 

The Honoralale Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 18 ' 

voluntary testimony from important witnesses is a separate 

question. Certainly the treatment accorded General Secord 

could not have been designed to enhance the image of Congress 

as an impartial and fair investigator. 

On behalf of Richard V. Secord, I respectfully 

request that this letter be entered in the official record of 

the Committees' investigation. 

Si*l^^ely yours. 




Thomas C. Green 



TCG: jme 
attachments 



^''-^•/^•Ojinf 



892 



UNCLASSIHED 



.** c" CCS 



Shasp Gbees & Lanktoro *! C 04 I u 

ecc ''is s»r - - s E • -s *vcs.c "^ ^ 

W»s- sCCN D C 30C36 



:99- 



John W. Nields, Jr. Esq. 

Counsel to U.S. House Select 

Corrurittee to Investigate Ccvert 
Arms Trar.sacticns with Iran 

Roor: H4 19 

United States Capitol 

Washington, DC 







(W^ 



rear .Vessers, 



. irar. ar.d Nields : 



I air writi.'.g to clear up sore confusion which has 
arisen with respect to the purchase of certain assets for the 
benefit of the Contras. Three Maule aircraft were tranferred 
to the Contras in 19S5 at the direction of Mr.Secord. The 
first aircraft, tail r'.;ri>er N5657H, was titled to NRAF, I-.c, 
52 Y el Vira Me.-.dez, Par.a.T,a, RP, m approximately July cr 
A-cust of ".98:. This aircraft was previously owned by .T. 
Secord and several cclleagues. The Contras purchased fe 
aircraft by wire transferring an a.-nount equivalent to t-.e 
:--5ta.-.d..- g irde;ted.'.ess :r. tr.e plane. 

Naule aircraft tail n-u,-iers N56611 ar.c N5661J werr 
titled in the na-ne of N?jkr, Inc. en Septerier 10, 1985, a.r ± 
cr. October 29, 19S5, respectively. These aircraft were bi.;"-: 
at ccst frc.T Kaule Air, Inc. All three of these aircraft are 
owned exclusively ty the Contras. -Mr'-. Seccrd has no interest, 
direct or indirect, in any c: tnese planes. 



Curinc the 
led to ccnfirr tnat 
iDu.-.itions at the 
elusion IS etsclute 






gaticn of Genera. Smgla-b, 
.Id have bought twice the quar 

charged by .Yr . Seccrd. 
■.fut rent. Only fcur iters 
;la-r and Y.r. Sertrd. 



rtrei , at S .. 

rifles were : 
rifle, and th 



il S.nrlauc srld Lj,CCI Aj'-4"'s, f:ldirg 
:: per rifle. Yr . Serird sold l.'.'-Z Ai 
:del, it «;■".:: per rifle. T.-.e w^cden 
rhased f:r a erst cf apprrx.ratel..' Sir!. 
were s:ld at a 11* rark up t: t.-.e Cc ntrai 



General Smgl? 
at a prire cf SllC.ZI p; 
rounds at an average pr. 
rark u= , .Yr . Sec:rc' = 



OCi 



the _s and. Mr. Seccrd scld ", 
cf 5136. CC per thc-5and. In, 
ice equates to 2.5; per zz 



893 



Sham* GmCCn & LAs-roao 



UNCUSSIRED 



C 04 i 0^ 



5tr.eral Singlaub- sold 200 Ri>G-7's at S1,6S0.0C per 
la-rcher. Mr. Seccrd »old fiC RPC-''s at S1900.0C per la-.-c^erl 
Mr. Secord'i price was 15% hlg^e^ than Ge-.eral Sin;:auc's price 
or. less ttar. c.-.e-half the size cf Smglaui's order. 

CT-.^nl Singlaut scid 5,0C0 ??;-T rc_r.is at 
s:??.:: : = r r:_rc. Mr. Secrcrd srld 3,c;; s.r!-. rc_-d.- =-. 
S225.C0 per rr^.-.d. This preser.ts a 21.6* irark up ever Gtreral 
Sir.glaufs price or little more thar. half the quir.tity supplied 
by General Si.nglaub. 

General Singlaub shipped 348 tons of material and 
charged the Contras approximately $300,000.00 for shipping. 
Mr. Seccrd shipped over 600 tons and charged the Contras 
S150,000.00 for shipping. 

If Mr. Secord had dealt in quantities comparable to 
those purchased by General Singlaub, the resulting price 
dif fere.'.tial wculd have beer de minimus , which mears, in 
effect, t.^at Mr. Secord was buying at substantially better 
prices . 



S^cerely y»urs. 



Thom.as C. Green 
Attorney for 
Richard V. Seccrd 



"rr. . ->- J 



Q-.ti^t 



mmm 



894 



UNCLASSIHED 

AWIS SALES PROFIT ANALYSIS 

PREPARED BY RICHARD V. SECORD 

1985-1986 



C 4 i 



Phase I (Airlift February 1985; Sealift April 1985) 
Sell 32,346,175 
Costs 1,634,901 
Profit 711,2''4 or 30.3% gross (43.5% of cost) 

Phase II (Airlift March 1985) 
Sell $1,235,596 
Costs 924,756 
Profit 310,840 or 25.1% gross (33.6% of cost) 

Phase III (Sealift June 1985) 
Sell $6,407,512 
Costs 5,190,512 
Profit 1,217,000 or 18.99% gross (23.45% of cost) 

Phase IV (Airlift November 1985) 
S«I1 $2,255,200 
Coats 2,003,200 
Profit 252,000 or 11% gross (12.78% of cost) 



UNCLASSIHED 




895 



' C 04 I u-i 

Phase V (Airlift March 1986) 
Sell $504,140 
Costs 354,140- 
Profit 150,000 or 29.7% gross (42.3% of cost) 

Phase VI (Airlift April 1986) 
Sell $441,640 
Costs 353,337 
Profit 88,303 or 19.99% gross (25% of cost) 

Phase VII (2 airlifts May 1986) 
Sell $938,635 
Costs 637,467 
Profit 301,168 or 32% gross (47.2% of cost) 

GRAND TOTALS 

Sell $14,128,898 

Costs 11,101,313 

Profit 3,027,585 or 21% gross (27.3% of cost) 

Note; Ssalift July/August 1986 aborted 
Costs about $2,400,000 
Sold CIA 1,500,000 

Returned to Enterprise - 1,200,000 (300,000 brokers 

fee to DEFEX) 



UNCIHSSIFIEO 



896 



IINttiSaflED 



C 04 



• TOTALS OF TRANSACTIONS PRICED EXCLUSIVELy BY SECORD 
Sell. 511,782,723 
Costs 9,466,412 
Profit 2,316,311 or 19.65% gross (24.5% of cost) 



UHCUSM 



897 



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THE WHITE HOUSE 



SYSTE.". : 

90366 




MEMORANDUM FOR THE PRESIDENT 
FROM: JOHN M, POINDEXTER 

SUBJECT : 






N 6263 



3^-^37- 



Next Steps re Aid to the Nicara^uan Democratic 
Resistance Forces (DRF) 



Issue 



How should we proceed in our effort to obtain effective 
assistance to the Nicaraguan democratic Resistance Forces (DRF) ? 

Background ^ 

Last month's rejection of our aid proposal by the House of 
Representatives has dealt a skvere blow to the DRF. As of May 1, 
all humanitarian assistance fUnds have been expended and no 
further food, medicine, or clothing is available. By mid- June, 
the outside support which tha resistance has received will be 
fully depleted and no furthe^ significant support appears readily 
available. As time goes on without any USG or outside assistance, 
the capabilities and morale ^f the resistance will be seriously 
debilitated. Despite our asiurances to the Central American 
democracies, we still do notla clear legislative path that will 
assure a positive vote in the next few weeics. This factor is 
also likely to influence Central American thinking on the 
Contadora accord. 

Our legislative experts advise that our only near-term legislative 
vehicle is the military construction bill which is pending 
Committee actioa in the House. Me are advised that Speaker 
O'Neill will accept DRF aid aaendments to this bill during the 
week of June 9. Even if such a vehicle passes in the Rouse, we 
stand a good chance of filibuster in the Senate and the likelihood 
that no aid would be available until August or September 1986. 

Discussion 

Given the urgency of the situation, our interagency team has 
recommended that this issue be addressed at the NSPG meeting on 
Friday, May 16. The group further recommends that we consider an j 
immediate reprogramming of S15M from Defense.fCIAi for "" ' 



"S|§§ET 
DeclT" 



OADR 



\ismsmii 




^^-^ 



911 




assistance to the DRf 
earlier humanitarian 
only the "^ib- intellig 
li)celihood of success 
humanitarian assistan 
essential to maintain 
improve prospects for 
agreement . Those who 
the Contadora process 
argument that a csase 
to survive while "nat 
underway. 




■VWRr 



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N 6264 



^^'Vrc 



-.7 **vt r-*.«»«^ i* 
spponents l^support 



ed the 
reprogramming requires action by 
ence committeesX there is a reasonable 

We can make a good case that this 
ce T5>M per month through August 1986) is 
■^*3r option of DRf pressure in order to 
a verifiable and enforceab le Co ntadora 
counsel delay on any DRf jrl^^nW.1 after 
has 'played out* can be &mt if m PRl by the 
fire under Contadora still requires the DRf 
ional reconciliation negotiations* are 



iX? '<•' 



Finally, State, Defense, and CIA agree that a reworlced 
Presidential Message to the Congress is important to the overall 
long-term success we hope to achieve. Between now and Friday, 
the draft of the Message you reviewed on the Summit trip will be 
rewor)ted to include stronger language on the consequences of <ia^^ 
.'=■*■* -i****** . We do not believe that your Message should reference 
the reprogramming acti on specifically, but all concur that we 
must hold the Congress facociun^i^abi ^it^for a failure to act. 
State, Defense, and CIA sM^gv« thai the summary at Tab A 
embodies the elements of what we must /provide in authorities and 
resources for an effective program of! support to the DRf. 



Recommendation 



OK 



No 



cii>te7.o<'i'f ' 'cL 



1. That you review the attached Section-by- 
Section Summary (Tab A) prior to the NSPG 
meeting on Friday, May 16. 

Prepared by: 
Oliver North 
Ray Burghardt 






V 



Attachin«nt 
Tab A 



Section-by-Section Summary 



SECBgT 



n^^mm 



913 



CHAPTER 23. OTHER PRIVATELY FUNDED COVERT OPERATIONS 



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SIGNATURE OF AOVANCEC 



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RECEIPT FOR FUWDS ADVAIICED 



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AMOUNT-. 



SIGNATUSE or O AOVANCEC D AGENT .._•». 









FORM J,, OBSOLETE PBCv SECRET RVW 20 YRS FH DATE CERTIFIED 

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ACKNOWLEDGE RECEIPIlOFJSO.OOO. 00 FROM|j 

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F B 0020:30 3^_^ 



May 7, 1987 



xMEMORAHDUM TOi The Director 



PROM I 



SUBJECT I 



Oliver B. Revell 

Executive Assistant Director 

Investigations 

DEA ASSISTANCE PROVIDED TO 
THE NATIONAL SECURITY COUNCIL 
STAP7 IN REGARD TO THE 
HOSTAGES IN LEBANON 



This is to confirm information orally provided 
to you on 4/29/87. 

While accompanying the Attorney Genera^ 
triptoBgJssels, Belgium, to attend maetinos i^^ 
^BUm^l^^ Mr. Charles Allen, the National Intelligence 
Officer for Counterterrorism, advised me that he wanted 
to discuss a sensitive issue in regard to the hostage 
situation. 

Mr. Allen advised that he had recently been 
interviewed by Mr. Arthur L. Liman, Chief Counsel for 
the Senate Select Conmittee on the Iran Contra matter. 
Mr. Liman showed Allen an action paper from Lt. Col. Oliver 
North to Assistant to the President for National Security 
Affairs Bud McFarland concerning the use of DEA Agents 
to effect the release of hostages held in Lebanon. Mr. 
Allen indicated that the memoranduai was dated in either 
Juite or July 1985. He further advised that the memorandum 
indicated that D^^^^^^s^a±or JAClt, Lawn ha d seconded 
two DBA JWg«nts ifl^l^mi^H^nd mil^H^to Oliver 
North for assistance to the NationalSacuS^ Council 
(NSC) on hostage issues. Mr. Allen also indicated that 
these Agents had traveled overseas on behalf of the NSC 
at North's direction and had allegedly expended approximately 
$60,000 in DBA funds on behalf of the NSC. 



^Mr. Revell (original notes attached) 

1-Mr. Baker 

1-Mr. Clarke 

OBRikvw (5) jjl 



@) 



939 



Mer^orandun to Tlie Director 




6 00 2G''n 



.'•ir. Alltn iaquirei". as t 
yvi, specifically ycu or I, were 
nnd h'j further muicatei he had : 
lecondinc of UFA Aqents to Col. i 
uas raised witf. Mn'. by Mr. Liman, 

I ajviso-j rir. Allen I ' 
any such inf orr.^ation and tnat I - 
well. 1 told A llen that we were 



.rether cr r,., 

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rcei: a 'tare 

ir. or.til thi,. 



ths 
:aatior. 

the 
-stter 



totally j!;a,..-.fj. q£ 
certain you ..ore a: 
h aware 




us to my Tin&Li4<J'j« naa any inioiBfition concernin-, dEA 
Agents traveling overseas on behalf of the :iSC o, being 
seconded to the i'-^^ under North's airectior. 

Upon r.<y return from BruiEels, I crall> briefed 
you concerninci t.his information at which tiro yv,.j confirr-.ec 
to ne that ycvi -vr-re uncware of DEA Agents '>inn .^^^^ in 
any capacity zo j--si3t Col. North. Thereaf-.er vou i^laced 
ii teleohone call '-^^ ^'-^ • Jack. Lawn, Adciini£-_ratci of' DSJ".; 
however, h« was •''<>- i.Tjnediatcly available 2-^1 y..i were 
not alilf CO conta<-"<- him during our discussion. 



ymssiF! 



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ROUTING 


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INITIALS 




LTC Oliver North 








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REMARKS 


FAdM NAME. AbMESS AND PHONE Ht 


DATE 


DCI/HLTF 













I 



CONTROL NO. 



1 of 1 



NOT THRU REGISTRIES 



Q3-70+?a, 



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Access to this document will t>e restricted to 
those approved for the following specific activities: 







A 



@) 



Warning Notice 

Intalligence Sources and Methods Involved 

NATIONAL SECURITY INFORMATION 

Unauthorizad Dtsclesur* Subject to Criminal Sanctions 






vimms 



V 



941 






Mtsltr^onOC lOVn 



24 Apcil 1986 



MEMORANDUM FOR: LTC Olivet North 

National security Cooncil 



N 7436 



Options to Secure the Release of OS Boatages 




The back channel initiative with Iran could well result in the 
release of the hostages. Iran has substantial influence over the captors 
and probably could effect a release of Aaecican hostages if Ayatollah 
Khomeini intervened directly to give h ^3__appcoval , ev en thou gh Iranian 

over the hostages, d i^.nished^^^^M^^B^^B^^^BBBI^^^^M 
■mUmBm^mmmH tne states 

concessions to Iran. Iran is very interested in acquiring crucial 
military egulp went and spare carts to supp ort th« ir current operations 
against 




. .M^ 







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942 



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inrassniP 



N 7437 

On* drawback to this initiative is that eithat the Iranian Government 
or one of the factions within the Governaent might publicly expose an^ OS 




ajor, US Amy 



mmm 



943 



UNCLASSiFiti) 






DNIlASSIflED 



944 



cU, 







v^- 



THE WHITE HOL'SE 

WASHINGTON 



June 11, 1986 



Dear Ross; 



■ — -n ^ 
N 4247 



I have been briefed on your effort over the 
past several weeks on behalf of our Americans 
abducted in Beirut. On behalf of the American 
people, I want to thank you for your discreet 
assistance in this regard. My hope is that 
we may yet succeed in reuniting these men 
with their families and loved ones. Thanks 
again and God bless you. 

Sincerely, 



Q, 



Mr. H. R. Perot 



THE WHITE HOUSE 



ICIASSW 



M r. K. R. Perot \ ' -^ 




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Non-Loa 



NATIONAL SECUBlTV COUNCIL 

^amSXCTOi OC J090« 

{,- Septerier 15, 1986 
XOP SE(7J«X , • ^'^ — 

ACTION 

MEMORANDUM FOR JOHN M. POINDEXTER 

FROM: OLIVER L. NORTH r 

SUBJECT: Follow-on Meeting with Amiram Nir 



i 



Q3-\\3 



You are scheduled to meet with Ami Nir again this afternoon at 
1:30 p.m. for 10 minutes. Purpose of this meeti ng is to debne; 
Nir on his meetings with Peres over the weekend. 




_ ^___^^^^_^ Issues, which Prire 

Minister Peres may raise privately with the President, are 
outlined at Tab III. Nir notes that it is unlikely t.-'.at ?ere; 
will discuss any of these with anyone else in the room. 

RECOMMENDATIONS 



1, 



That you privately discuss t.he papers at Tabs I a.-.d :: 



Director Casey and indicate next steps after the conversatio- . 



Approve 



•1 / 



Disappr^e 

2. That you brief the President on the initiatives o'.»tlir.ed at 
Tab III. / 



■c - 



Approve 



Attachments 
Tab 
Tab I 
Tab III 




n Items with the President 



^^artially D.cbssifi.d/ficleaied oni^-^^^ /'/^^ 

under proWsiofis of E.0 llasfi " ' f<-^C^ 

^v3.Reoer,r;.tic,.ISec.riXci, 



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Sepcember 15, 1986 



POSSIBLE PER£S DISCUSSION ITEMS WITH THE PRESIDENT 



Amiram Nir, the Special Assistant to Prime Minister Peres on 
Counter-Terrorism, has indicated that during the 15 minute 
private discussion with the President, Peres is likely to raise 
several sensitive issues: 




'fUj^^-^ 



e > •^y U.- 




Host«q«s> Several weeks ago, Peres expressed concern t 
the U.S. may be contemplating termination of current ef 
with Iran. The Israelis view the hostage issue as a 
"hurdle" which must be crossed enroute to a broadened 
strategic relationship with the Iranian government. It 
likely that Peres will seek assurances that the U.S. wi 
indeed continue with the current "loint initiative" and 
ensure that we will include the two missing Israelis in 
1^^ process. In that neither Weir nor Jenco would be free 
""^'^ without Israeli help (particularly in logistics), it wo 
be helpful if the President would simply thank Peres :o 
-''-**~7;heir discrete assistance 
Ji 



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POS. 2 100 CASES G.W. 4.800,-Kgs. 

POS. 3 500 CASES G.W. 16.500,-Kgs.: 

POS. 4 63 CASES G.W. 1.764,-Kgs. 

POS. 5 4 CASES G.W. 300, -Kgs. 

POS. 6 117 CASES G.W. 6:346, -Kgs. 

POS. 7 300 CASES G.W. 29. 040, -Kgs. 

POS. 8 3 CASES G.W. 255. -K^s. 

POS. 9 18 CASES G.W. 1.503.-K<]S. 

POS. 10 2 CASES G.W. 207. -Kgs. 

POS.n 3 CASES G.W. 75, -Kgs. 

POS. 12 11 CASES G.W. 413, -Kgs. 

POS. 22 357 CASES G.W. 10. 710. -Kgs. 



5.121 181.203, 



.U-/M 



^■^ 



I 



UNCLASSIRED 




i 



955 



'Zy. - PORTUGAL 



LINER BILL OF LADING 

Mir«ftA<« No 






R2P?iSE>.TACflfiS , I.XPORTACSO , EX?ORTACJSO , LDA 
:-r3SCA / PCRTUGAI, 




UNCUSSIFIE 



ER oog; 



^•c* of rtcalpl By Qt9-<tni%e' 



■ERRIA" 



^erl o4 loading 

SETUBAL 



^it«t Of dtilvory by on^arrlor* 



COPY NOT NEGCTIASLE 



Numbor tnd kind ol pteka^ot. doocnpMon of Qoodt 



>:0 NUMBERS 



5.121 PCKS. AMMUNITIONS + GUNS 181.20 3,' 




\xn 



Pw^l 



lax tamlthad by tha Merchant 



Vm^^ 






Frtifht 0«i«llt. cnargM •!£. 



Otiir a*mwrf«g« rat* (•tftfllloiul ClauM A) 




SHIPPED on board In apparant good ordar and con- 
dllion, walght maatura. mark*, numban. quality, contanis and 
valua unknown, (or carrlaga lo ihaPon of Olactiarga or lo naar 
tharaunto aa it<a Vaaaal may talaty gat and ila always alloai. 
to ba dalivarad In iha Ilka good ordar and condition at iha 
aforaaald Port unto Conslgnaaa or Ihalr Aaaigna. ihay paying 
(raighl aa indlcatad lo tha laft plua othar chargaa Incurrad in 
accordanca with tha provlilont contalnad In thia Bill o( Lading. 
In accapUng this Bill of Lading tha Marchant aiprastiy ac- 
eapta and agraaa lo all Ita atlpulatlona on both pagai, whathar 
wrtttan. printad. atampad or otharwiaa Incorporated, aa luHy as 
It Ihay wara all signad by tha Marchant 

Ona original Bill of Lading mud ba aurrandarad duly andorsad 
In axchanga for tha goods or dalhrary ordar. 
IN WITNESS wharaof Iha Maslar of Iha said Vassal has 
signad tha numbar of original Bills of Lading stalsd balow. 
all of thIa tanor and data, ona of which baing accomplishad. 
Iha othars lo stand void. 



* tniwlu <• U «• Aacau «• ll]4 pai mtit Dam*. 
-Ld lauv*4u M DIniw Payt u c M SL 
EiH aoi>itwn •>• 4 liatt'ttn !■> Hilar aa AlW- 
a<a< ■>■ tm oilUaaa pala AaSMla U aaiia. 




956 




UNCLASSIFIED 



-■ ^3 



rj 



•c^ 



'a^ 



n«4vn •< «|rfi-i..i 

MKMAkJ MuMimc C«A 


l_ ..1. ..< ^cku. 
AltfOHM. 




c n 




uu . ,. 



Memorandum of Agreement 

Arne Herup 
Gasvartcsvej 15, 6960 Marstal Dated: Copenhagen, 28/4/86 

Denmark 



hereinafter called the Sellers, have today sold, and 

Messrs Dolmy, Business Inc., a conperation organnized, existing and ir 
good standing under the laws of the Republic of Panama. 



Q3-/a? 



hereinafter called the Buyers, have today bought m/v " erria 

Class: Bureau Veritas 

Built: 1973 

Reg^lster Tonnage: Grosstonnage: 299,99 Net tonnage: 162,04 

with everything belonging to her, on board and on ahore, (»ee § 7), on the following 

conditions: 

S 1 Price- °'^'^- 2.500.000,- including the deposit provided in par. 2 
' ' below, in balance to Sydfyns Disconto bank, Bredgade 32, 

Denmark, to be paid upon delivery of vessel and acceptance 
by the buyer. 
§ 2. As a security for the correct fulfilment of tW» contract, the Buyer* shall pay 
a deposit of 10V» — ten per cent — of the Purchaie Money on signing thia contract. 

This amount shall be deposited with 

Sydfyns Discontobank 

Bredgade 32 - Denmark 
and held by them in a joint account "for the Sellers and the Buyers. Interest, if any. 
to be for Buyers' account. Any fee charged for holding said deposit, shall be borne 
equally by the Sellers and the Buyers. 

§ 3. The said Purchase Money shall be paid in as per 

Par. 1. above 

on delivery of the vessel, but not later than 3 days (Sundays L Holidays excepted) 

after the vessel is ready for delivery and written notice hereof has been given to the 

Buyers by the Sellers. 

§ 4. The Sellers W^K^iSSfR^ for inspection of the vessel atfrin 

Marstal, Denmark, which vessel is now under repair. 

have undertaken an of 

and the Buyers 3b9Uxt(KiezKaiftB<X)iK inspection tilKX»lieXWeU6>QS^l^{b the vessel. 

when the repair is completed. 

The vessel slRall be delivered and taken over atitK Marstal, Denmark 

subject to a final inspection and acceptance by the buyer. 

Should the vessel become a total or constructive total loss before delivery, this 

contract shall be considered null and void and the deposit Immediately released to the 

^"y*"- has inspected 

§ 5. The Buyers KKHtJSdX^iUS. the vessel afloat without any opening up and with. 

out cost to the vessel. During the Inspection the vessel's log books for engine and 
have been made 

deck j)<«Hxh(XXHX!J« available for Buyers' examination. 'i^^lff^yxT>6i^6xii*.vxif^*li.'>>6ittKz 

?uch<xw>i«eikxKx1^w:porihoe<xtJJ(txfcHK>mi»xgi*KK3ixp»^ 

7ed<KTitaN>«xMl»<)<HKeofx<)r>th(R>d8<kHi(is(ifW(raomp)^k)tKHK)Win<)4»i|i«ctiD» 

t:'bo<«b»M9(t(nnnt«i)xtnl7xte(«83e<VtocxJui)CBtiyKM< /\ / 



T 



9 

10 

u 

12 

13 
14 
15 

16 
17 
18 
19 

20 
21 

22 
23 
24 
25 
26 
27 
28 
CO 
30 
31 



UNCUSSIFIEO 



/¥'' 



/ 



957 



f § 6. For inspection of bottom and other underwater part(s), the Sellers irkm a. 

placed 
^l&oe the vessel in drydock at the port of delivery. If rudder, propeller, bottom or 33 



/ 



UNCLASSIHED 



34 



/ other underwater part(s) be found broken, damaged or defective, so as to affect the 

vessel's clean certificate of class, same shall be made good at the Sellers' expense 35 

^' ER Ou"i '. ^^ 

37 



CnT^ a»U«toot>o<V)OiyithQa^x«pt»ii:fiortkyv>ootx«nehtgn deA w aI>i* ip«rt <«♦<>)< 
^ --aJ Whilst the vessel is in drydock, and(Mi«eacrtr«<kby>«baxBHyBT«<et<<he>n>pi<e«eMyt4tt0 33 

bsi^^Ka <)(<>tii(>^laesai/i!SAti0n£oeie(y, the Sellers ahAlkaiTMige to have the tail-end shaft drawn. 39 
#*-^*% ShflukkBS(mx>j^e(taBdIM«lladxx>foocKkdcfe(±^(ecsa»■xto<lif<Kt)<to»xv•«(nK•>^^ 40 

^^^3 fi3(%«y«{<«lAMK)A<Rb«U>bA(R»new0d(flX)niKd«t;eood(at Sellers' expense to the Classification 4^ 
••^C Society's satisfaction without qualification on such undenvater part(s). 4^ 

^^^ '5faK)e»peiaB«)o*<xiraHeiiigx«naxi«p<g8»ny»K«>taM5«M«lt»HXW«KKH>»«<«M^ 43 

•^^» ^)i-ttx^ysi:At,eK>Xt>t^CXta!9.\^^\i^»^^»*^l^ 44 

tha«f>eM{)«M«s. 4g 

The expenses in connection with putting the vessel in and taking her out of 47 

drydock, including drydock dues and the Oaasiflcatlon Surveyor's fees shall be paid by 43 

the Sellers if rudder, propeller, bottom, other underwater part(s) or the t«il-end "49 

shaft be found broken, damaged or defective as aforesaid or If the Classification 50 

Society requires the tail-end shaft to be drawn (whether damaged or not). Iflxjttil 51 

0l!b<gx<eae<xldwt}ai*ywgx«haUxyayxthe<)«<8»«9«<<>a wp e iis a»s;,xiiMBae)tcw»ft«<p[c j2 

The Sellers shall at their own expense bring the vessel to the drydock and from 53 

the drydock to the place of delivery. 54 

§ 7. Unless otherwise agreed the Buyers shall take over and pay the current 55 

* see market price at the port of delivery for p?ovisions, remaining bunkers, unused oil ^* 55 

§16. 

^nu«*(l)AbM«^. All spare parts and spare equipment including spare tail-end 8haft(s) 57 

and/or spare propellerfs), if any, belonging to the vessel at the time of inspection. 5g 

used or unused whether on board or not shall become the Buyers' property. Forward- 59 

ing charges, if any, shall be for the Buyers' account The Sellers, however, are not 60 

required to replace spare parts including spare tail-end shaft(s)«nd spare propeller(s) 61 

which have been taken out of spare and used as replacement prior to delivery. 62 

'Ek*>&ll«raxkari«)diaxnf^xto<*xk8xashoctx>or«ekB;y;x}plst9(X]t««t«>>y^><KK«W><«H8 63 

athAn(>ArtK^t9a(>)M»uin«k>litex£eiteia/x{toe<>CMXNKx>Qc:pr«ykled<^^ 64 

KRxadas)t]ai!exxvJ^thaRx^6(:ezmxterxncmc0<*ed(xMBln»c)f9yx«tf()]eM^>mKK><M«^ 65 

foeowxjet«yxwrol««tv»l9X5«tffx«Bxh»cxS«n«t*l«iMS«ns?'S^ 66 

p«nsAti0ni 67 

Payment under this clause shall be made in the same currency as the Purchase 68 

Money. 69 

§ 8. In exchange for payment of the Purchase Money the Sellers shall furnish the 70 

Buyers with legal Bill of Sale of the said vessel free from all encumbrances and mari- 71 

time liens, duly notarially attested and legalised by the . P?"'".''?*')^?'? 72 

consul together with a certificate stating that the vessel is free from registered en- 
cumbrances. On delivery of the vessel the Sellers shall provide for the deletion of the 



# 



/ 






958 



/ The deposit shall be placed at the disposal of the Sellers as well as the balance of the 

/ Purchase Money, which shall be paid as agreed together with payment for items 77 

mentioned in § 7. , except as prevlded for below par. '^"CcUrrent C\ P ' '' ^^ 

/The Sellers shall, at the time of delivery, hand to the Buyers a4k classification 79 

certificates (for hull, engines, anchors, chains, etc.). as well as all plans which may 80 

be in Sellers' possession. The same applies to log books, unless otherwise agreed. 81 

§ 9. The Sellers guarantee that the vessel, at the time of delivery, is free from 82 

^■wMfc all encumbrances and maritime liens or any other debts whatsoever. Should any 83 

J 1 .._n claims, which have been incurred prior to the time of delivery be made against the 84 

vessel, the Sellers hereby undertake to indemnify the Buyers against all eonsequen- 85 

ces of such claims. Any taxes, notarial and/or consular and/or other charges and/or 86 

expenses connected with the purchase and registration under Buyers' flag, shall be for 87 

Buyers' account. Any taxes, notarial and/or consular and/or other charges and/or 88 

^^—-J expenses connected with closing of the Sellers' register, shall be for Sellers' account. 89 
2r»5h and all navigational equipment including radar- 

ySaum^ § 10. The Wireless Installation»nd Nautical Instruments shall be included in the 90 fi 

.^fZuw sale without any extra payment. i&«)IW«c3(V>CtMxpN)t}er«)t>«<»(«lW(C«niKK 91 

9*"^^ § 11. The vessel with everything belonging to her shall be at Sellers' risk and 92 

expense until she is delivered to the Buyers, but subject to the conditions of this con- 93 

tract, the vessel with everything belongings to her shktl be delivered and taken over 94 

as she is at the time of delivery, after which the Sellers shall have no responsibility 95 

for possible faults or deficiencies of any description. 96 

§ 12. The Buyers undertake to change the name of the vessel and alter funnel 97 

markings before trading the vessel under new Ownership. 98 

§ 13. Should the Purchase Money not b« pmid as aforesaid, th« Sellers have the 99 

right to cancel this contract, In which ease the amount deposited sh^I be forfeited 100 

to the Sellers. If the deposit does not co^er the Sellers' loss, they shmll be entitled 101 

to claim further compensation for «ny loss and for all expenses together with into- 102 

rest at the rate of 5V« per annum. 103 

fihwil4)tb«)aMytl5^MPriHl»^l«JK*k«'«"«P«ti«>»50/x1lhft)«««M«b)*^^ 104 

!»*«>*hfccS«U»»c!(fiR)An*3jo»th8i«b4KHnBBMW*x 105 

§ 14. If default is made by the Sellers in the execution of a legal transfer or in 106 

delivery of the vessel with everything belonging to her in the manner and within 107 

the time herein specified, and the default shall have arisen from events for which the lOS 

Sellers are responsible, the Buyers shall have the right to cancel this contract and 109 

the deposit in full shall be returned to the Buyers together with interest thereon at the 110 

rate of 5V« per annum. The Sellers shall, In addition, make due compensation for any 111 

loss caused to the Buyers by non-fulfilment of this contract. 112 

§ 15. If any dispute should arise- in connection with the interpretation 113 

and fu-lfilment of this contract, same shall be decided by arbitration in 114 



■) The ntme sf the CUisiricitlon Society ts be Inicrted. 
••) Nolej. It iny.. In the Surveyor'! report which ere accepted by the OtjalflcaUon Society with- 
oul qutlKlollon ire not to be ttken Into account. 



UNCUSSIFIEI 



959 



SavaoKxf 



oo 



me tily ol London accoraiiiq to biiijiibii lo- . 

and shall be referred to a. single Arbitrator to be appointed by' the parties 116 

hereto. If the parties cannot agree upon the appointment of the Wrtgle Arbitwof. '^ 117 

the dispute shall be settled by three Arbitrators, each party appointing one Arbitra- 118 

the London Maretime Arbitrators association 
tor, the third being appointed by iaMc)0AJkiO(«ttd>(jlRtMs>«l>onaix>tonAiine(iGonftR»nce 119 

London 
in (Sopoonwgva. If either of the appointed Arbitrator* refuses or is incapable of acting, 120 

the party who appointed him, shall appoint* new Arbitrator in his place. 121 

If one party fails to appoint an Arbitrator — either originally or by way of sub- 122 

stitution — for two weeks after the other party having appointed his Arbitrator, 123 

has sent the party making default notice by mail, cable or telex to make the ap- 124 

London Maretime Arbitrators association 
pojntment. The 3zitioca]trixkittn[zt48iisKMaarittaMC>Oon«»yeiw«< shall, after application 125 

from the party having appointed his Arbitrator, also appoint an Arbitrator on behalf 126 

of the party making default. 127 

The award rendered by the Arbitration Court shall be final and binding upon the 128 

parties and may if necessary be enforced by the Court or any other competent authori- 129 

ty in the same manner as a judgment in the Court of Justice. 130 

The provisions, bunkers, luboil, which seprately are to be paid 
for are as follows : 

1 televisions Philips 24" colour Pr 

1 video Philips VHS 

50 tons gasoil 

300 litres luboil 

500 litres paint & Dcr. 20,- 

In total 



Dcr. 


5.000,- 


- 


5.000,- 


- 


92.925,- 


- 


3.633,- 


- 


10.000,- 


Dcr. 


116.558,- 



iJ 



The vessel shall be delivered on an "as is, where is" basis with 
all class and trading certificates as they are onboard the vessel, 



w&issm 



960 



mumfs 



ER 



00 



The seller represents and warrants to the buyer that at the signing of this 
memorandum of agreement there exists only one lien against the vessel, namely 
a first lien in favour of MARSTAL SPAREKASSE, to secure a loan made by said 
MARSTAL SPAREKASSE to seller in the approximate amount of One Million Kroner, 
which amount he undertakes not to increase, and that there are no other 
liens or encumbrances standing against the vessel, whether recorded or not, 
whether within Denmark or without, and whether for funds borrowed, provisions 
and supplies purchased for use on the vessel, repairs to the vessel, for 
sailors or seamen engaged on the vessel, for port charges, docking fees, or 
for any other cause or reason whatsoever. 

The seller represents and warrants that he shall execute contemporaneously 
with the execution of this memorandum of understanding an irrevocable letter 
of instructions to the Sydfyns Discontobank with re8p«ct to the account to 
which the purchase price is to be paid by the buyer, providing as follows : 

a) That funds shall be withdrawn froo said account only by the joint 
signatures of » ■ > ■ ■ gnln iiM h i irg « t li 1H » c , attorny for the seller and »>■ r>iiili«, 
attorny for the buyer, until the debt, together with Interest and all bank 
charges pertaining thereto, shall b« paid by them to MARSUVL SPAREKASSE, 
they shall have obtained from Marstal Sparekasse a release or satisfaction 
or the lien on the vessel, and they shall have recorded said release or 
satisfaction in the ship's Register of Denmark (Sklbs registeret) . 

b) That an amount necessary to pay the fees to strike the registration of 
the vessel from the'Skibs registeret 'shall be paid or reserved for payment 
by the two above said attorneys. 

c) That upon the provisions above having been complied with, the signature 
power on said account of the two attorneys shall be renounced by them and 
shall be that or the seller or his designee. 

Delivery of the vessel in sea-worthy condition by the seller to the buyer 
shall be made not later than noon on 10th May 1986. Time is of the essence 
in this agreement, and failure by the seller to so deliver shall give the 
right to the buyer to terminate its obligation to purchase the vessel and 
to recover its deposit. Not-with-standing the foregoing, the buyer shall have 
the right to waive its right to terminate in the event of late delivery and 
It may, at its sole option, extend the date for delivery at any time, and 
from time to time, and any such waiver made by the buyer shall not be deemed 
to deny to the buyer the right to terminate its obligation to purchase upon 
any extended delivery date or dates. Any such waiver by the buyer shall be 
in a writing signed by the buyer or by a telex sent by it to seller or his 
representative . 

The seller, through its agent, has represented the buyer that sales of 
comparable vessels (to wit the M.V. "RAAGe" and M.V. "HANS BOYE ") were 
made for the respective amounts of US$. 295.000 and Dcr. 3.475.000 , and 
he undertakes to furnish to buyer evidence, in form satisfactory to buyer, 
corroborating said sales prices. 

The parties represent to each other that the only broker in this transaction 
is S.A. Chartering Aps , that the seller agrees to pay its fee, and that each 
will hold the other harmless from the claim of any broker and agent, who 
claims any commission or compensation in connection with this transaction. 

Each^party agrees that he or it will pay his own attorney's fees 




(i^Bc^ 




iUiAS. 





961 



FQjvvitit i Sldbsregistret 
^S />f ISCaddaobogBEur.i 



UNCLASSIFIED 




ER 00"3 



, BtLL or S»bt 
> A W H M * 



Ofdeltl Muwbtr (or rrev'l«lon>l Mavifatlon Lteane* Wuiiib«rl i D • 214 1 
Muoa ef Ship ■ ERRIA 
No. Data 



VERALIL 



• b4 Fart of prior Haglatr y 1973 - Esbjerq 



Typa ot Ship ( Silling, Staaw er Motor) i MotOrveSSel 



Horta Powar of Cnflna 
Langthi 152' 



If try 60 BHP 



Bratdthi 27 ' 2 ' ' 



Dapthi 1 6 ' 1 ' ' 



Tltla raeordad In Pantna- (for tha avant that tho.vaaaal la alraady raylitarad In Pana- 
■a) I 



ef tho Mareantlla taetlen ef tha Public 



Raflatry of tha city of Panaiaa, Rapublls ef Panaaa, 

Tonnagti Cre.a. 299,99 

Not/Haatatarad 162,04 
and aa daaerlbad In nora datall In tha Carttflcata ef the (urvayera and tha Haglata 

Ibok. 

w«, (a) Captain Arne Herup 

(harainaftar eallad 'tha Vandori*) having our principal place ef buatnaaa at (b) 

Gasvaerksvei 15, DK-6960 MARSTAL 

In eonildaratlon of tha lun ot DKR: 2 .500 .000,00 



• Id to ua by (e) Messrs. Dolm y Buisness Inc . 
of (d) Panama " 



(harainaftar eallad 'the ?ureha<ar') tha receipt whereof If hereby acknowledqad, 
trinifar our whole title to, and Intaraat In, the ahlp above particularly daictlbed, 
and in the boita, tackle and other appurtenaneai balon^ln^ to the tald ihlp, to tha 
Purehaiera. Further we, the Vandora, for ourielvea and our auceeaaora covenant with 
tha Purehatara and Ita aial9ni that we have the power to tranifar the aald Ship and 
tltla thereto In the manner atoreaald and that the aaiae'la free froia Ineunbranea • . 

In wltneie whereof we heve hereto tfflxr.-l our corporate aaal/Bl9naturo thli g'fl 

day of i^^/t.l^t— one thouaand nine liundrad and laiiioy a^ . 

lyi 




< 



AccEPTmce or »»t.E 

-the underlined, (f) A IJSgPY" H^'^^ • »" behelf. of end reereaentlnf 

-the Purehaiera najted in the anna«ad Bill of iile. In lay poeltlon e« (tl tt4fl,(_ 

■Aty^tyi,,^. ITT. / 1 the aald Purehaaeri, hereby eceeplT^er all le^al purpoala, tha 

-•«1. an.d i.ia.>atir afta^sjd by the t»14 Btil orsale to th(a Corporation hy '.) 

rOLVl^^SbL^a ■ ^J>})JIA . ot the ve.ael ' -^-i^^/ Jt ' 

(to be ranunad ^ ^ .^^ -g ') referred to In the tall BUI of Sale 



Dated the 



M^ 



day of 



PUH^. 



»1^- 






^umim 



82-684 0-88-32 



962 



This is to certify that 

Mr. ARNE HERUP and 
Mr. ALBERT HAKIM, 



UNCUCJ'ID 



0', 9 



whose Identity was proved to me in my presence 

have signed this document. 

In testimony whereof I have hereunto signed my 

name and affixed the seal of my office. 

Notariate of Copenhagen, Denmark, April, the 29. th. 1986. 



Fees: 150,- or. 



Notary patUe •/ CeptMjltgm 



e. KOnSNBI 



El Infrascrito Cinsul de Panama ea 

Copenhague, Dinamarca, 

CERTIFICA: 




Ar 60 Derechos: B/10.00 
Carr.sio;B/1.00- CO ^— 
Racjbo Na •^SJ/^.S^ 



UNCLASSIFlEi 
















«/i 
















en 


1 






01 


1 






— . 


♦1 


CO 


55 


**■ 


o 
> 


3} 


4f 




z 


m 
o 


^ 


^ 


Z 
> 


w 


2 




» 


-i 


Mii 


X 


A) 








m 




♦ 


♦ 






& 




.3 


C=3 




3 


(=:> 




1. 




s 





3467 

Not.K.J.Nr. /86 



963 



r-": 



SECRET 



^^ i 1i ^^ ii » <J w 



y^. ^ l--^ 



"^ch-m 



io/o^i-0'ov/j.X 






SUBJECT: Iteio for Discussion at DCI Meeting with 
Assistant to the President for National 
Security Affairs Poindexter on IS May 1986 



^J 




3. We have examined and rejected the poss ibility of using 
a privately owned Danish flag ship, tbec^^RRTA^ which was 
proposed by a member of the NSC staff. TRTs ship is not a 
viable option for technical reasons and because former Agency 
officer Tom Clines is involved in the ownership. 



cjitiztn 



VMRMNG NOTICE 
INTELL'GENCE SOURCES 
on Mr^MOOS INVOLVED 



[-0— 



^-' V . »^ 



/S?.7Z 



<&e<;ret 



@) 




964 







NA TONAL SECURITY COUNClU 



11005 



INFORMATION 



MEMORANDUM FOR JOHN M. POIND 
FROM: 

SUBJECT: 



33-/99 

May ]JU 1986 -^ 

Partially Declassified/Released on3aVt*iW/ 

under provisions of E.O. 12356^ 

„. „« \'^ by B. Reger, National Security Council 

VINCENT M. CANNISTRARO' / 6 i 

Agenda for Your Weekly Meeting With the DCI, 
Thursday, May 15, 1986 



You are scheduled to meet with Director Casey and Deputy Director 
Gates in your office at 5:00 p.m. on Thursday, May 8, 1986. The 
following items are on the agenda, according to the OCI's staff: 




Declassify on 



TOD QPrprr i 




Status of 011 ie'^^hi^^011i« has offered the use of a 
Danish vessel "^ozHl^lHPHiH ^* ^^^*^ offered CIA a six month 
lease. CIA told metha^tneythouqht it was too expensive, and 
cost and time involved in refitting the vessel for a 

pmission made the alternative option of outfitting^ 

''iJTownea vessel more attractive. Ollie then of fe red to take ! 

Trom his vessel , \vj.sing his o vnresouree s t 

J h as told me that because of the alleged involvemen t 

of one Tom'ciines (who was involved in Wilson and Terp il era), 
ClX will have nothing to do with the ship. Frankly, i e4n't~tell 
wKffthe r this is just A convenient reason not to do what CIA was 
opposed to doing in the first place, or whether the concern about 
gline is leQitima.t e. In any event, CaSey has a oriel ing paper on 
this which he will use if the subject is raised. 



You may wish to raise the following item: 




mmm 



43472 



fflMKfttf. 



966 







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ER 002 



DIARIOOFICIALDENAVEGACION 
OFFICIAL LOG BOOK 

2546 





RepOblica de Panama 
Ministerio de Hacienda y Tesoro 

Oirecoon General Consular y de Naves. 

PO. Box 5245, 

Panama 5, 

Republtca de Panama. 

Tel: 271166 PANAMA 

Tlx: 2537 SECNAVES 



Buque (vessel) /£ J c_ /^j/-/ 
Del(from) 9 /^- /^9^L al(to) / /19 
Cubre Viajes Nos.lCovering Voyage Numbers) 



UNCUSSIFIE 



969 



Secci<bn 3c: POSICIONES DEL BUQUE Y CONDICIONES METEOROLOOI 
Section 3c: AT SEA POSITIONS AND WEATHER 


CAS 1 

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An entry is to be made on every day the vessel is at sea at noon. 



970 



Seccion ac. POSICIONES DEL BUQU6 i CONDICIONES METEORDUpGICASf l , , .^ 
Section 3c: AT SEA POSITIONS AND WEATHER *- " >J w t . 


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An entry ,s lo Be made on every day the vessel is at sea ai noon 



971 



Seccion 3c: POSICIONES DEL BUQUE Y CONDICIONES METEOROLOGICAS 
Section 3c; AT SEA POSITIONS AND WEATHER 




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An eniry is lo be made on every day the vessel is al sea al noon 



972 



Seccion 3c POSICIONES DEL BUOUE Y CONDICIONES METEOROL6GICAS 

Section 3c: AT SEA POSITIONS AND WEATHER 027 i| 



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973 



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Section 3c: AT SEA POSITIONS AND WEATHER ' 


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An entry it lo be made on every dey the veuel it tt i«t at noon. 



974 



Scccion 3c POSICIONES DEL BUQUE Y CONDIClONcS METEOROLOGICAS 
Seclion3c: AT SEA POSITIONS AND WEATHER £ ^ 



2 9/ 



£v 




975 



Secci6n 3c 
Section 3c: 


POSICIONES DEL BUQUE Y CONDICIONES METEOROLOGICAS 

AT SEA POSITIONS AND WEATHER rn n "I ? f 


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976 



UNCLHSSIFIED 






•: /. . . i b ; 






PAGE 14, ERRIA LOG BOOK 



May 23, 1986 

May 24, 1986 

May 25, 1986 

May 26, 1986 

May 27, 1986 

May 28, 1986 

May 29, 1986 



36' 8' N 
15<» 58' W 



25° 0' N 
20" 30' E 



34° 55' N 
24° 0' E 



32° 40" N 
27° 38' E 



32° 10' N 
31° 23' E 



34° 0' N 
34° 0' E 



ER 



OGol 



Noon - Narnaca, Cyprus 



i!i^ 





m?3 



977 



93-/33 



CLASSIFIED AT TIME OF PUBLICATION. 



978 




c. 



-mOM»s C GOEEN 

V- --OMAS ..AN^^ rOOO. jR. 

S-EVEN M. .OM'-SON 

BAOSAOA S'0*«3'-N -ADO 



aceco 



.00 ■ 



Sharp. Green & Lankford 

8OC MASS*Ci-"_Se"S AvENuE, N W. 

Washington. D C 20C36 



August 18, 1987 






?rz eS9-2«CO 

: -Ec::= co ■202. 2S6- 

'£.E« €5' ■•SOS SO, 



f 



Arthur Liman, Esq. 

Counsel to U.S. Senate Select 
Committee on Secret 
Military Assistance to Iran 
and the Nicaraguan Oppos. 

901 Hart Senate Office Bldg. 

Washington, DC 20510 

Gentlemen : 



John W. Nields, Jr., Esq. 

Counsel to U.S. House Select 
Committee to Investigate 
Covert Arms Transactions 
with Iran 

Room H419, United States Capitol 

Washington, DC 20510 



On behalf of Richard V. Secord, I am writing to 
correct certain aspects of his testimony given under oath at 
the last deposition session, at which both of you were in 
attendance. I am sorry that I can no longer supply the precise 
date of that session. 

Mr. Secord was asked tc acknowledge that he had been 
advised concerning a potential conflict of interest on the part 
of the undersigned arising out of the undersigned's refusal to 
answer inquiries from the Office of Independent Counsel about a 
specific incident which arose during the time the undersigned 
represented both Lieutenant Colonel Oliver North and Mr. 
Secord. 

Mr. Secord replied that he had been independently 
advised concerning this matter, and he confirmed his insi<5tence 
that the undersigned remain as his counsel. At the time of his 
answer, Mr. Secord had- 'had conversations with other attorneys 
in my office concerning this matter, but, as I explained to Mr. 
Secord following the deposition session, those consultations 
could not be deemed to be with separate and unrelated counsel. 

Since that tir.e Kr . Secord did retain and did consult 
with separate and unrelated counsel to explore all the rair.i- 
fications surrounding the potential conflict of interest 
issues. Since receiving this independent advice, his decision 
rem.ams the same. However, I thought it prudent to write ycu 
and to clarify what I think nay be some confusion m the 



NCUSSiFIED QB 



979 



Sharp Gpeen & Lankfopo 

August 18, 1987 
Page 2 



WSSIF! 



C G 4 U 6 '^ 



record. Accordingly, I ask that you consider this letter as 
supplenentation to, or correction or, Mr. Seccrd's previous 
testimony. 




C. G^fel 
Attorney for Richard V. Secord 



Seen and Agreed to: 



Rich-&v4— V-F— decor i 



//Ar /f/^ 



Date 



7 



UNCUSSIHED 



980 



LAW OFFICES 

Sharp. Green & Lankford 

I800 Massachusetts Avenue. N w. 
Washington. D. C- 20036 



fj 4 U - " 



JAMES e. smabp 
Thomas c. green 

V. THOMAS lANKFORO. JB- 

STEVEN M. JOHNSON 

BARBARA STRAUGMN mARR S _ 

MARKM. KAT2« August 20, 1987 

ROBERT L. VOGEl - 



yNCUSSIFI[D 



HAND DELIVERED 

The Honorable Lee H. Hamilton The Honorable Daniel K. Inouye 

Permanent Select Committee on Chairman, U.S. Senate Select 

International Affairs Committee on Secret Military 

U.S. House of Representatives Assistance to Iran and the 
United States Capitol Nicaraguan Opposition 

Room H405 901 Hart Senate Office Building 

Washington, DC 20515 Washington, DC 20515 

Gentlemen: 

On behalf of Richard V. Secord, I am writing to 
correct and comment on certain testimony taken before the 
Select Committees and to respond to certain statements made by 
various meaib-ers of the Committees which misrepresent the facts 
and portray my client and his conduct in a false and 
underserved light. In view of the effort undertaken by various 
members of the Committees to discredit General Secord and the 
attempts to impeach portions of his testimony, we feel it fair 
and appropriate that this letter and the accompanying exhibits 
be made a part of the official record of investigation; and we 
formally request such relief. 

General Secord was the first witness called to give 
public testimony. His appearance before the Committees 
followed countless hours of debriefing during which he 
patiently and with great accuracy recited the facts and 



UNCUSSIFIED 



981 



%%. 



sc 



04 Uc 




Sharp. Green & Lankforo 

The Honorable Lee H. Hamilton a 

Daniel K. Inouye 
August 20, 1987 
Page 2 

circumstances surrounding the operational details of the Contra 

supply operation and the Iranian initiative. It is only fair 

for the Committees to acknowledge that the information provided 

by General Secord was of critical importance and of invaluable 

assistance to the progress of the investigation. It should 

also be noted that General Secord ultimately succumbed to the 

entreaties of both Chief Counsel who largely induced his 

voluntary testimony by appeals to General Secord 's sense of 

duty, service and responsibility to his country and the 

Congress . 

General Secord was prepared for tough questions and 
tough criticism. But in light of the way his testimony was 
procured, we were not prepared for unfair criticism or for the 
technique employed by some interrogators of using false 
information to prompt derogatory comments about General Secord 
from other witnesses. When, from time to time, we contacted 
the staff to tender correct information and corroborating data 
we were usually, .thanked, but never vindicated. All the 
misinformation has been permitted to linger, and the record 
requires and deserves correction. 

Several Senators were effusive in their use of the 
term "profiteer" when making reference to General Secord. We 
start from the rather basic proposition that every man is 
entitled to make a living. General Secord devoted two years to 
the Iran/Contra projects at the expense of virtually all other 



ONCIASSIHEO 



982 



Sharp. Green & Lankford 



UNCLASSIFIED 



U -i u 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 3 

business pursuits. During that time he received a salary of 

$6000 per month. The amount is hardly excessive. 

Albert Hakim acknowledged in his testimony on June 3, 

1987, that he accumulated profits from arms sales for the 

benefit of General Secord m an account known as Korel Assets 

even though General Secord forswore any such remuneration. 

None of the accumulated profits were ever distributed to 

General Secord, a fact confirmed by House Counsel, Mr. Nields, 

when he stated publicly on June 3rd that: 

I think the record should reflect that 
unlike some of these other accounts, we 
have been able to determine no withdrawals 
from the Korel Assets account as of this 
date. 

A great deal of time and attention was devoted by 

members of the Committees m examining the profit ear.ned on 

arms transactions. The frenzy to portray tliese sales as 

generating exhorbitant profit came close to overshadowing what 

should have been the more important issues. General Secord 

testified that th^ grogs profit on arms sales ranged from 

between 20 percent to 30 percent. That markup was and is 

extremely reasonable, and the merchandise delivered was 

unquestionably of high quality. When General Singlaub appeared 

some members again attempted to use his testimony to criticize 

General Secord 's efforts through a supposed comparison of the 

prices charged by each. The comparison was nonsense and the 

equivalent of an apple and orange exercise. We demonstrated 



UNCUSSIFIED 



983 



UNCLASSIHED 



Sharp Green & Lankforo 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987. 
Page 4 

all of this in a letter I wrote to the Committees on May 26, 

1987, A copy of my letter is attached hereto for your 

convenience. Additionally, we supplied the staff with an "Arms 

Sales Profit Analysis" memo which was nothing more than an 

exercise in basic arithmetic confirming the profit margins 

testified to. A copy of this document is also attached. It is 

our belief that the staff has now been able to confirm the 

basic accuracy of our figures. Finally, I note the testimony 

of General Secord's customer, Mr. Calerc, who acknowledged in 

his testimony on May 20, 1987, that General Secord's prices for 

ammunition and FAL type rifles were extremely reasonable and 

about 50 percent less than what this government was charging 

the witness for the same items. 

Although General Secord never withdrew money from his 
so-called profit account and although he attempted no movement 
or secreting of funds during the days when these operations 
were on the brink of public disclosure, the notion was born and 
nurtured by severjiL members of the Committees that the residual 
funds were accumulated and preserved principally because of 
devious profit motives, all of which worked to the unfortunate 
detriment of the Contras. This is a pernicious and 
particularly offensive allegation. 

Funds were on hand when these transactions terminated 
simply because the ongoing operations were aborted. General 
Secord was saddled with the responsibility to preserve ar.d 



UNCLASSIHED 



984 



Sharp. Green & Lankford 



UNCLASSIFIED 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987, 
Page 5 

allocate funds in response to a number of real and anticipated 

needs. This required a continuing assessment of priorities and 

the need to reserve against contingencies known and unknown. 

General Secord delivered to the Committees long ago most of his 

original, contemporaneous worksheets which reflect his 

decisional process. None of this material was contrived, and 

no one has been silly enough to suggest otherwise. Even a 

cursory review of this material will demonstrate that General 

Secord intended that the residual funds were to be devoted to 

operations . 

Rather than burden this letter with a detailed 

summary of General Secord 's testmony, I have included an 

extrapolation from the documents he provided, which is 

essentially a series of "snapshots" which capture the process 

of allocation over time in 1986. 

FUNDS AVAILABLE AND ANTICIPATED DISBURSEMENTS 
A. Early Eebruary-, 1986 — $87,000 available. Several 
million dollars required to carry through with the 
Central American airlift project. 



UNCLASSIFIEO 



985 



UNCLASSIFIED 



HU 

Sharp. Green & Lankford 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 6 

B. Early March, 1986 -- $6 million available. S2-4 
million required for aircraft hull self-insurance per 
Israeli demand. 

C. Estimated disbursements for March and April, 1986, 
included the following: 

Israeli Air Force S 150,000 
Costa Rica Air Strip 

Project (Contra) 150,000 

Defex (Contra) 2,360,000 

Aircraft Procurement (Contra) 1 , 000 , 000 



Salaries (Contra) 


50, 


,000 


Contra Medical Expenses 


50, 


,000 


Initial Blowpipe 






Procurement (Contra) 


200, 


,000 


Fenced Insurance 






Fund (Contra) 


200, 


,000 




$4,160, 


,000^ 



We are confident that the Israelis will confirm this 
requirement. 

* * 

Does not include what by this time is a S4 millicr. 
hull insurance fund. 



wussife 



986 




Sharp Gpeen & Lanktoro 

The Hor.orabLe Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 7 

D. April 1, 1986 -- S5 million available. Estimated 

disbursements for April, May and June, 1986, 

included : 



Aircraft Operations and 

Maintenance (Contra) S 650,000 
Israeli Air Force 150,000 

Communications Procurement 

(Contra) 100,000 

Initial Blowpipe Procurement 

(Contra) 350,000 

Medical Supplies and Local 
at^^^^^^^H 

(Contra) 45,000 

Southern Air Transport 

(Contra) 120,000 

Salaries (Contra) ~2,000 

Defex (Cantxa) .. 2,200,000 

Israeli TOW s 822,000 

54,509,000' 



Does not include what by this time is a S4 
hull insurance fund. 



UNWSSIRFI 



987 



UNCLASSIFIED 



Sharp. Green & Lankforo 

The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 8 

E. End April -- 54 million available. S4 million needed 

for hull insurance reserve. Estimated disbursements 

through June included: 



Defex (Contra) $ 280,000 
Aircraft Operations and 

Maintenance (Contra) 650,000 
Three British Air Crewmen 

(Contra) 110,000 
Blowpipe Procurement (Contra) 1 , 000 , 000 
Salaries (Contra) 72,000 
Israeli TOW s 822,000 
Costa Rica Air Field (Contra) 60,000 
SAT (Contra) 55,000 
Insurance Fund Fenced (Contra) 200,000 
C123 Spare Parts (Contra) 200,000 
Israeli Air Force 185,000 
53,634,000* 



Does not include what by this time is a 54 million 
hull insurance fund. 



wiASsra 



988 



Sharp. Green & Lankforo 



1NCI.ASSIFIE0 



1 L 



•J t U 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 9 

F. Early June, 1986 -- Hull insurance requirement still 
in effect. S13 million available. Estimated 
disbursements through July, 1986, included: 

Refund demanded by 

Ghorbanifar $15,000,000 

Airlift Operations and 

Maintenance through 

July (Contra) 500,000 

Salaries through July (Contra) 90,000 
Israeli Air Force 240,000 

Costa Rica Airfield Completion 100,000 
Shipload of Munitions (Contra - 

for delivery in August 3,300,000 
Insurance Fund Fenced (Contra) 200,000 
Aircraft Procurement 

(Contra) 500,000 

. _ $19,930,000* 

G. July 1, 1986 — $12 million available. $2 million 
still needed for hull insurance. Ghorbanifar claims 



Does not include what by this time is -a $4 million 
hull insurance fund. 



f82r684 988 UnifLHuOinl, 



989 



Sharp Green & Lankford 



UNtussra 



sc 



04 U 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 10 

SIO million owed to him. 



Estimated disbursements 



through August, 1986, included: 

Refund demanded by 

Ghorbanifar $10,000,000 

Airlift Operation and 

Maintenance, July and 

August (Contra) 500,000 

Salaries, July and August 

(Contra) 90,000 

Insurance Fund Fenced (Contra) 200,000 
Secure Communications 

Equipment (Iran) 120,000 

Ship, Erria, Operations 

(Contra) 150,000 

Shipload Munitions (Contra) 2,200,000 

513,260,000* 

Early August, 1986 — $9 million available. 
Ghorbanifar still claims SIO million owed to hin and 
threatens to expose the operation unless paid. 



hull insurance fund. 



Does not include what by this time is a S2 million 



iiNcussra 



990 



Sharp. Green & Lankford 



miASsra 



J L 



H U 



The HonorabLe Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 11 

Estimated disbursements through September, 1986, 

included: 



Refund to Ghorbanifar 510,000,000 
Airlift Operations and 

Maintenance, August and 

September (Contra) 400,000 

Salaries, August and 

September (Contra) 90,000 

Shipping, Erria, Expenses 

(Contra) 90,000 

Insurance Fund Fenced 

(Contra) 200,000 

$10,780,000' 



Although at the time these operations were disclosed 
in November, 1986, approximately S8 million was available, 
Ghorbanifar still . continued to press his claim. During this 
period General Secord contemplated the purchase of a 707 
aircraft and spare parts in connection with implementing the 



Does not include what by this time is a $4 million 
hull insurance fund. 




%jh 



991 



Shapp Gpeen & Lankfopo 



UNClASSiriEB 



04U 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 12 

second channel (S2-2.5 million), and roughly a million dollars 

were owed or obligated on account of the following: 

Danish ship agent (S300 , 000 + ) ; Southern Air Trar.sport 

($100,000); death benefits ($200,000); Swiss Air 

charter ($50 , 000) ; ^^^^^H bills ($100,000); Costa 

Rica real estate bill (5100,000+) and $100,000 

miscellaneous (including continued funding for the 

ship Erria) . 

Planning for the establishment and funding of a 

permanent European ]oiat venture company to support 

U.S . /Iranian commercial transactions over a several-year period 

(until such time as the two governments could deal directly 

with one another) was terminated when these operations were 

exposed. Israel had concurred in this venture, and it was 

contemplated that Iran would donate $20-40 million to the new 

venture to ma)«e it viable. This would include sufficient funds 

to "forward finance" procurements from the U.S. and from Europe 

after agreement by U.S.. and Iranian government officials as 

envisioned in the nine-point plan. 



The allocation exercise periodically undertaken by 
General Secord was admittedly based on estimates, but it is 
against this bac)<ground of competir.g claims and demands that he 
made his decisions to fu.-.d the Contras at whatever level 
circumstances would permit. Ghorbanifar ' s claims were serious. 



WC! ■ISSIFiEl) 



992 



Sharp. Green & Lankforo 



UNCLASSintl) 



1 I 



'J '+ 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987, 
Page 13 

and they presented a credible threat to the continuation of 

operations (although not in General Secord's view in any 

meaningful legal sense) . Contrary to the picture painted at 

times at the hearings that abundant excess money was available 

to fund the Contras, funds were expended to support their 

operations almost always with consequent risk to the 

continuation of the Iranian operation and to General Secord 

personally. Had the Contra airlift proiect not been deemed so 

vital by General Secord, it might have been suspended or 

stopped any number of times as a result of other funding 

requirements. 

In the final analysis over S4 million from the 
Iranian operation was expended for the benefit of the Contras 
as a result of General Secord's juggling of his priorities. In 
view of the fact that General Secord devoted two years of 
around-the-clock effort to making these projects work, we think 
it hardly fair to engage in an after-the-fact review of his 
priority decisions. He .was after all, despite contentions to 
the contrary, acting in furtherance of the policies of this 
government and with its blessing. 

There are a couple of other "money" issues which have 
been exaggerated to grotesque proportions. In October, 1965, 
well before the Iran initiative began. General Secord purchased 
a 1973 Seneca airplane for the approximate sum of 335,000. The 
money used to buy the aircraft came from a consulting fee and 




U«J 



irn 



993 



Sharp. Green & Lankford 



MUSSifl: 



^u y 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 14 

was reported as income on General Secord's 1985 tax returr. . In 

1986 General Secord purchased a Porsche automobile for $31,000. 

(Porsche never got so much free publicity) . General Secord 

insists that the money to buy the car was borrowed from Albert 

Hakim, consistent with a pattern of loans made to him in 

accordance with a 1983 business agreement, which includes yet 

another loan of $32,000 for legal fees made by Hakim in 

February of this year. 

We, of course, are not familiar with the personal 
purchases of raembers of Congress. It would be interesting 
(perhaps; to know all about them. But what is so unwholesome 
or sinister (or of national importance) about buying a Porsche 
and a 15 year old airplane, and if you insist on linking these 
acquisitions to the Iran/Contra projects: "w.here's the beef?" 
If you add up every dime that found its way to General Secord's 
pockets which is in any way arguably related to the Iran/Contra 
projects (even without regard to what it represents) , you never 
get above $225, 000. .00. That is hardly an extraordinary sum for 
two years of work, and it is clearly unworthy of the 
exploitation attempted by some members of the Committees. 

Certain members of the Committees chose (we think 
deliberately) to ignore confirmed facts in an effort to 
embarrass General Secord and serve their personal, political 
agenda. For example, General Secord was accused of using 
donated funds to purchase Maule aircraft for himself, a 




82-684 0-88-33 



994 



Sharp. Green & Lankford 

The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 15 



UNCUSSIFIF. 



supposed fact which astonished several of the donors during 
their public testimony and which was presumably designed to 
elicit similar emotions from the listening audience. The truth 
is simply that all Maule aircraft were transferred to the 
Contras; the Committees know that and knew it at the time this 
charade was played out in public. 

Toying with the facts is unbecoming during a 
congressional investigation, yet it occurred frequently. In 
interrogating another witness, a Senator asserted that General 
Secord and Albert Hakim were the owners of East Inc., a company 
which contracted to provide operations and maintenance services 
in Central America. The claim is false. Even worse was the 
Senator's use and manipulation of documents to make it appear 
that General Secord was charging excessive profits on aircrew 
salaries. The facts are that the documents used by the Senator 
did not relate to aircrew salaries and, even more 
significantly, the documents were not records of any company 
owned or controlled by General Secord, The language used by 
the Senator to make his point was downright ugly, and the whole 
episode was outrageous. 

Other members attempted to dance on General Secord 's 
back by asserting that he had no security clearance. Again, 
the truth is that General Secord held the highest level DOD 
security clearance until January of 1987. When Felix Rodriguez 
was called to testify, he was fed a series of leading questions 



UNCLASSIFIED 



995 



Sharp. Green & Lankford 

The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 16 



ilNCLASSIRED "'" 



(in reality the answers) in an attempt to taint General Secord 
with the sms of convicted felon Edwin Wilson. Although 
Rodriguez denied any association with Wilson, it is he, not 
General Secord, who worked with and for Wilson over an extended 
period of time. Moreover, when Rodriguez was prompted to 
criticize the military supplies furnished by General Secord to 
the Contras, someone was kind enough to expose the fact that 
Rodriguez's hearsay was based on information from Mario Del 
Amico, a competitor in the arras supply business. 

The attempt by certain members to seize opportunities 
to link General Secord to Edwin Wilson evolved rather quickly 
into blatant character assassination. General Secord did know 
Edwin Wilson long before the time Wilson's legal problems 
arose. Allegations first raised in 1982 that General Secord 
(and others) might have been involved in business transactions 
with Wilson were exhaustively investigated by the Department of 
Justice for over two years. The investigation of General 
Secord was ultimately terminated and formally closed for lack 
of any evidence — a fact never mentioned by any member during 
the hearings. 

General Secord and his colleagues were also 
criticized for departing from or misrepresenting United States 
foreign policy. This claim is absolutely baseless. His 
dialogue with the Iranians tracked established policy and was 
based on approved proposals. As the tapes would demonstrate. 



UNCLASSIFIED 



996 



Sharp. Green & Lankporo 



ONCUSSIflED 



04U 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 17 ' 

General Secord never committed the United States to fighting 

the Russians in defense of Iran. General Secord knew about, 

and was qualified to explain. United States policy in regard to 

a possible Soviet invasion of Iran. 




Although ether portions of the record are deserving 
of comment, it is impossible to examine each and every 
distortion or inaccuracy in a letter such as this. What is 
important to emphasize is that General Secord was made to pay a 
very high price for voluntarily coming forward, without 
immunity, to assist the Congress in its investigation, and, for 
sure, he is not inclined to answer the phone if his government 
calls again. 

Certain of the immunized witnesses were actually 
praised for their, courage to testify, in contrast to General 
Secord, whose reputation and integrity were attacked for 
obvious, partisan purposes. Although this entire experience 
has been more than slightly bitter for General Secord, he 
reamins confident that he acted appropriately and honestly in 
the service of his country. 

Whether by its treatment of General Secord the 
Congress has hampered its ability to entice a.-id receive 



ONCLASSinED 



997 



Sharp. Green & Lankford 



Mmmm 



04 



The Honorable Lee H. Hamilton and 

Daniel K. Inouye 
August 20, 1987 
Page 18 ' 

voluntary testimony from important witnesses is a separate 

question. Certainly the treatment accorded General Secord 

could not have been designed to enhance the image of Congress 

as an impartial and fair investigator. 

On behalf of Richard V. Secord, I respectfully 

request that this letter be entered in the official record of 

the Committees' investigation. 

Si*r6a^ely yours. 



TCG: jme 
attachments 




CLASSIRE 



998 



Shapp. Gbees & Lankfopd 

6CC. Viss*;-- sE --S ^vC'^c ^ w 

W*SH sGfCN D C ?OC36 

UNCLASSIF 



^'C 



4 i 



John W. Nields, Jr. Esq. 
Counsel to V.S. House Select 

ConjTittee to Investigate Covert 

Arms Transactions with Iran 
Boon H419 

United States Capitol 
Washington, DC 

Dear .Vessers. Liran and Nields: 

I air- writing tc clear up some confusion which has 
arisen with respect to the purchase of certain assets for the 
benefit of the Contras. Three Maule aircraft were tranferred 
to the Contras in 1985 at the direction of Mr.Secord. The 
first aircraft, tail nuriber N5657H, was titled to NRAF, Inc., 
52 Y el Vira Mendez, Panarr.a, RP, m approxirr.ately July or 
August of 1965. This aircraft was previously owned by .Vr. 
Secord and several colleagues. The Contras purchased t.^.e 
aircraft by wire transferring an a.-nount equivalent to t-.e 
cuzst.andin3 mder-edness on the plane. 



I 



Mcule aircraft tail nuriers N56611 and N5661J were 
titled in the na.'Tie of NRAF, Inc. on Septerier IC, 1985, and 
cr. October 29, 1935, respectively. These aircraft were bought 
at cost fro.- Maule Air, Inc. All three of these aircraft are 
owned exclusively by the Contras. Mr. Seccrd has no interest, 
direct or indirect, ir any of these planes. 

Curing the inter rc>gaticn of Genera^ Smglaub, he 
was led to ccnfim, that he c.ulc have bought twice the quant.t.. 
cf munitions at the prices charged by .Vr . Seccrd. Tnis 
conclusion is absolutely without rent. Only fcur iterr.s wer- 
t.rchased b' c:th General Smgla-b and Mr. Ser:rd. 



General S.ngla^b scld :0,CCC Aj'-4"'s, fzldmc s: 
-reel, at S:3£.C: per rifle. .Vr. Seccrd scld 5,::C aV--!' 
-coien stcc/. rodel, dt S2i~.CC per rifle. Tne wioden =' 
rifles were p-ichassc fcr a ccst cf appr ex..- ate l'.- SlcZ.c: 
rifle, and thev were scld at a 21% rark up tc the Ccntras. 



General Smglsub scld 15,CjC,0CC rc-nis cf 7.62 x ." - 
at a price of SllC. CC per thousand. y.r . Seccrd scld ",5"2,::: 
rcunds at an average pr.ce cf S136.CC per thc-=and. Includi-r 
.-.ark up, V.r . Seccrd 's price equates to 2.5- per rcund :.- 
cne-half the quantity. 



liNPi AQCiPirn 



999 



Smarp GbCCn & Lak-'OOO 



UNCLASSIFIE 



0410^ 



Gt-r.eral Smglaub sold 200 RPG-7's at S1,650.0C per 
la-.rcher. Mr. Seccrd sold 8C RPG-"'s at S1900.0C per laj-cherl 
Mr. Seccrd's price wa« 15% hlg^er tha.n Ger.eral Singlauc's price 
o."-. less thar. cr.e-half the size cf Si.iglaut. * s crier. 

Cf-.f-ra: Singlaub szli 5,0CG ?.?Z-' ro-r. is at 
S:?5.C: ?-ir rc-.-c. Mr. Seccri srld 3,(.Ci s-rh rc-rij a-. 
S225.CC per rour.c. This preser.ts a 21.6% rrark up ever Ge-eral 
Smglaut's price o.-; little more thar. half the qui.ntity suppliei 
by Ge.neral Si.iglaub. 

Ger.eral Singlaub shipped 348 tons of material and 
charged the Contras approximately $300,000.00 for shipping. 
Mr. Seccrd shipped over 600 tons and charged the Contras 
S150,000.00 for shipping. 

If Mr. Secord had dealt in quantities comparable to 
these purchased by General Singlaub, the resulting price 
dif ferer.tial would have beer de minimus , which mea.-.s, in 
effect, that Mr. Secord was buying at substantially better 
prices . 



S^.cerely y»urs. 



Thom.as C. Green 
Attor.iey for 
Richard V. Seccrd 



rCCidzi 



UNCUSSIRE 



1000 




?LU 



C 04 



ARMS SALES PROFIT ANALYSIS 

PREPARED BY RICHARD V. SECORD 

1985-1986 

Phase I (Airlift February 1985; Sealift April 1985) 
Sell $2,346,175 
Costs 1,634,901 
Profit 711,274 or 30.3% gross (43.5% of cost) 

Phase II (Airlift March 1985) 
Sell $1,235,596 
Costs 924,756 
Profit 310,840 or 25.1% gross (33.6% of cost) 

Phase III (Sealift June 1985) 
Sell $6,407,512 
Costs 5,190,512 
Profit 1,217,000 or 18.99% gross (23.45% of cost) 

Phase IV (Airlift November 1985) 
S«ll $2,255,200 
costs 2,003,200 
Profit 252,000 or 11% gross (12.78% of cost) 



ONCUSSIfiEB 



1001 



Ij 



fctii-i ..4*i*i 



C 04 I u-i 



Phase V (Airlift March 1986) 
Sell $504,140 
Costs 354,140 
Profit 150,000 or 29.7% gross (42.3% of cost) 

Phase VI (Airlift April 1986) 
Sell $441,640 
Costs 353,337 
Profit 88,303 or 19.99% gross (25% of cost) 

Phase VII (2 airlifts May 1986) 
Sell $938,635 
Costs 637,467 
Profit 301,168 or 32% gross (47.2% of cost) 

GRAND TOTALS 

Sell $14,128,898 

Costs 11,101,313 

Profit 3,027,585 or 21% gross (27.3% of cost) 

Note: Sealift July/August 1986 aborted 
Costs about $2,400,000 
Sold CIA 1,500,000 

Returned to Enterprise - 1,200,000 (300,000 bro)<:ers 

fee to DEFEX) 



NCUWlf 



1002 



.•k*4i'i 




- 3 



4 i I.' J 



TOTALS OF TRANSACTIONS PRICED EXCLUSIVELY BY SECORD 

Sell. $11,782,723 

Costs 9,466,412 

Profit 2,316,311 or 19.65% gross (24.5% of cost) 




E! 



1003 



av/3t 



CLASSIFIED AT TIME OF PUBLICATION. 



1004 




\\\ 



it 






33- ;3? 



^aJ/bD jJ 



/() /4L 




.^i:b 



1005 



P^ 



\mm 



es 



£« 



,,34 +^^w zi«-^^^^ 



6Wpf^ 



-2,3^ TA/^ /^'«' 



Q3-/3^ 







\ 




^^^|<' 



1006 






93-/3? 1 


^c^fSi^t^^ji^^tM 


1 




1007 



CHAPTER 24. COVERT ACTION IN A DEMOCRATIC SOCIETY 



1008 



^v-s? 



r 



UNCLASSra 



^^li<=f 



tnartiff Rtti!t| 




IT ADDEMDUM TO PROCEDURES GOVERNING 
REPOteTIHG TO THE SENATE SELECT COMMTTTEE 
ON INTELLIGENCE ON COVERT ACTION 



1. In accordance with Paragraph 10 of the Procedures 
Governing Reporting to the SSCI on Covert Action, executed on 
June 6, 198A, the SSCI and the DCI have jointly reviewed the 
Procedures in order to assess their effectiveness and their 
impact on the ability of the Committee and the DCI to fulfill 
their respective responsibilities under section 501 of the 
National Security Act of 1947. 

2. The Committee and the DCI agree that the Procedures 
have worked well and that they have aided the Committee and 

the DCI in the fulfillment of their respective responsibilities. 
The Committee and the DCI also agree to add the following 
Procedures set forth below: 

In accordance with the covert action approval 
and coordination mechanisms set forth in NSDD 159i 
the "advisory" format will be used to convey to 
to the SSCI the substance of Presidential 
Findings, scope papers, and memoranda of notifi- 
cation. 

-- Advisories will specifically take note of any 

instance in which substantial nonroutine support 
for a covert action operation is to be provided 
by an agency or element of the U.S. Goverrment 
other than the agency tasked with carrying out 
the operation, or by a foreign government or 
element thereof. It is further agreed that 
advisories will describe the nature and scope 
of such support. 




^533 



In any case in which the 
provisions of section 501 
National Security Act are 
or oral notification will 
President has determined 
to limit prior notice. 1 
that in any section 501(a 
substantive notification 
the Chairman and Vice Cha 
the earliest practicable 
Chairman and Vice Chairma 
best of their abilities i 



limited prior notice 
(a)(1)(B) of the 

invoked, the advisory 

affirm that the 
that it is essential 
t is further agreed 
)(1)(B) situation, 
will be provided to 
irman of the SSCI at 
moment, and that the 
n will assist to the 
n facilitating secure 



i 



1009 



UNWSlFi 



t u 6 1 7 



-2- 



notificaCion of the Majority and Minority leaders 
of the Senate if they have not already been notified. 
It is understood that responsibility for accomplish- 
ment of the required notification rests with the 
Executive Branch. 

It is understood that paragraph 6 of the Procedures, 
«fhich requires that the SSCI shall be kept fully and 
currently informed of each covert action operation, 
shall Include significant developments in or related 
to covert action operations. 

-- The DCI will make every reasonable effort to inform 
the Committee of Presidential Findings and signifi- 
cant covert action activities and developments as 
soon as practicable. 

3. In accordance with paragraph 4 of the Procedures, the 
DCI recognizes that significant implementing activities in 
military or paramilitary covert action operations are matters 
of special interest and concern to the Committee. It is agreed, 
therefore, that notification of the Committee prior to implement- 
ation will be accomplished in the following situations, even if 
there is no requirement for separate higher authority or 
Presidential approval or notification: 

Significant military equipment actually is to be 
supplied for the first time In an ongoing operation, 
or there is a significant change in the quantity 
or quality of equipment provided; 

Equipment of identifiable U.S. Government origin 
is initially made available in addition to or in 
lieu of nonattr ibutable equipment; 

There is any significant change involving the 
participation of U.S. military or civilian staff, 
or contractor or agent personnel, in military or 
paramilitary activities. 

U. The DCI understands that when a covert action operation 
includes the provision of material assistance or training to a 
foreign government, element, or entity that simultaneously is 
receiving the same kind of U.S. material assistance or training 
overtly , the DCI will explain the rationale for the covert 
component . 



"WUSSIfe 



5// 



1010 



HNtussra 



C 0618 




ie DCF understands chat the Conmittee wishes to be 
inforaed'if the President ever decides to waive, change, or 
rescind any Executive Order provision applicable to the conduct 
of covert action operations. 

6. The Comal ttee and the DCI recognize that the under- 
standings end undertakings set forth in this document are 
subject to the possible exceptional circumstances contemplated 
in section SOI of the National Security Act. 

7. The Procedures Governing Reporting to the SSCI on 
covert action, as modified by this agreement, will remain in 
force until modified by mutual agreement. 




/^,M^ 



rs > 

^June 10, 



1986 



Date 



A 





JOpI^ 



vice Chairman, 

June S. 1986 
Date I 



"55?r 



DNCLASSIFIfO 



E»;:^t.viP:;:;^-75/:?! 



1011 



UNCtHSSIFIlD 






C 0619 



1>ti* decuacnt i« tK« pre^rt'y •! th* Senate »nA rcatin* 
uniler it* control tKrou|ttt tKc Select Coanittec on 
Intetli%cncc . I( i* provided for liaited pur^ac* 
t* cenircetional averai|t>>t of intetliitcncc 
t{«c» Ml condition that it will not kc rclcoacd 
^•rwtoo 4i«aeBinated without pcraiasien of the 
Ce«<nittee. fciviation it iiranted to provide it to 
the executive •ranch pcraonnel «Aio*e official 
dutica concern ita aubjcct satter, subject to thcae^ 
reatriccion* and control*. 





Pgoc'eduret .CovetnlnK Reportlnn 
to the Senate Select Committee on Intelligence (SSCl) 
on Covert Action 

The DCl and the SSCI agree that a planned intelligence 
activity nay constitute a "significant anticipated intelligence 
activity*' under section 301 of the National Security Act of 
19A7 (the "Intelligence Oversight Act of 1980") even if the 
planned activity is part of mi ongoi-ng covert action 
operation within the scope of an existing Presidential 
Finding pursuant to the Hugbes-Ryan Amendment (22 U.S.C. 
2422). The DCI and the SSCI farther agree that they may 
better discharge their respective responsibilities under 
the Oversight Act%>y reaching a clearer understanding 
concerning repotting of covert action activity. To this end 
the DCI and the SSCI make tb* following representations and 
tntder takings, subject to tb« possible exceptional clrcusstances 
contemplated in the Intelligence Oversight Act; 

1. In addition to providing the SSCI with the test of 
new Presidential Findings concerning covert action, the DCI 
will provide the SSCI with the contents of the accompanying 
scope paper following approval of the Finding. The contents 
of the rcope paper will be provided in writing unless the 
SSCI and the DCI agree that an oral presentation would be 
preferable. Any subsequent modification to the scope pa{>er 
will be provided to the SSCI. 

2. The DCI also will inform the SSCI of any other 
planned covert action activities for which higher authority 
or Presidential approval has been provided, including, but 
not limited to, approvals of any activity trttich tioulo 
substantially change the scope of an ongoing covert action 
operation. 

J. Notification of the above decisions will be provided 
to the 5>SCI as soon as practicable and prior to ireplenenCaC ion 
of the actual activity. 



IINCIASSIFIEO 



1012 



UNCUhSSIflED 



C 0620 



tl J^T ^^ '"^ '**• 5SCI rtcognis* th«c an acti«<r- 
pUn nadjob. carrl.d out In conn.? t Ion «uJ « trioVr,V 
covjjg«||^p«r«lon .ay bt of .uch a n.tiira tS? t{. 
CO— ^Pl^^dtaira nocifieacion of eht activity prioj to 
P"™|^.vtn If tht activity do*, not rtoJlf, ' 
,it« hlifcftt?,uthotlty or Pttildtntlal approval TV. 
SSCT-IU, in conntctlon with tach ongoing covat J action 
Of«iatIon. coBBunlcatt to tht Kl th^klnS. «f I^-? i ?" 
(li^^ldltion to tho.. d.acriJJ^ n'SrilJaph; I'SJi^'j;*!!,, 

}fd^."id^;;J;*t^..';t:;;^r.J:i.^^;J: i^ 

5. Whtn btiaflng tha SSCI on a ntw Praaidancl.i 
rinding or on any activity daacribad in pHlIraJh. 5 «, ^ 
tha praaantation should includ* a diacuatlln If *i i i°' ' 
alaaanta of tht actlvltv ineluiii*. Hl^ ? , *^'- *«Portant 

th. .';«::.'::? 5J:t!.''if'."Ui; i^,Av:rM' """f •" 

KI «lll ptovld, to thi SSCI. fi? 1 U "!" "F""!'". th« 
bri.t.„, on .11 CO?.?? Mm™ .pj .Jlo" "lirfi?*,*"","" 






'JhH?''>i>ir't?i 1'--'^^^^ 



1013 



'^ri«.- 



IHff] 



C 0621 



1. ftf OCI will •stabltth ■•chaniMa to ••■«• th«e 
th« tSCI !• laforaad of planned accivtciaa aa providad by 
pacagtay ha 1 chreuRh 4, and chat tha Coanlccaa la fully and 
curraaU^^tfft^cd aa provided by paragraph 6. Tt\9 DCI nUl 

VT 1havCt» In conaulcatlen with eha DCI whan appropriaca, 
will rav law an4. If nacaaaary, raflna eha aachanlaaa which 
tttaUa Ic CO carrv out lea raaponalblllclaa undar eha 
laMl^Umca OvaraUhe Ace. 

10. Tha KI and eha SSCI will jolnely ravlaw ehaaa 
precadura* •• taear ehan ona yaar afear chay baceaa oparaeiva. 
In o«i«r tm Muaaa ehalr aCfacelvanaaa and ehalr lapace on 
eha ability of eha DCI and eht Cooaieeaa eo fulfill ehalr 
raapaeelva raaponalbillelaa. 




jtt^i^ s^cT . 






Daea 



Daea 



'^^ 



Vlca Chalraan. SSCI 



1014 



r 




>JSC/ZZ3 222^^ 



Findin<7 Pursuant to Section 662 ot 
Th« FortKjn Aaiiatane* Act og 1961, 
A» Aaendaa, Concerning Qparacjons 
UndertaJcan by tha Central Intelligence 
Agency in Foreign Countries, Other Than 
Those Intended Solely ior the Purpose 
Qg Intelligence Collection 



44659 



r hereby gind that the gollowing operation in a goreign 
country (including all support necessary to such operation) is 
important to the national security og the CJnited States, and direct 
the Director og Central Intelligence, or his designee, to report 
this Finding to the intelligence conmittees og the Congress 
pursuant to Section SOI og the National Security Act og 1347, aa 
amended, and to provide such briefings as necessary. 



SCOPS 



Central America 



PURPOSE 




The White House 
Washington, O. C. 
December 1, 1981 




{^J-^ ' 



'1?IT1 a. It CIA_ 



D Bid 12 K«l QI 13 Nov" 

Btt niD « tuu at D|S|T 



1015 




rinding Pursuant to S«etion 662 og 
Th« fortign A«>i3tanc« _Act oi 1961 
A* AiH«nd«q> 






ConcTninq uoTationa 

UndTtaXw by th« C«ntr*i inf Hi 
Ag«ncy in For«x<Tn Countriaa, 



g«nc« 

Oth«r 



han 



Thoa« lntand«d SoI«ly ior tha Purpoaa 
>g Inf lliqanca Coilaction 






I haraby find that tha following oparation in a foraign 
country (including ail support nacassary to such oparation) is 
important to tha national sacurity of tha Unitad Statas, and diract 
tha Diractor of Cantral Intalliganca, or his dasignaa, to raport 
this Finding to tha intalliganca coinnittaas of tha Congrass 
pursuant to Saction 501 of tha National Sacurity Act of 1947, as 
amandad, and to provida such briafings as nacassary. 



SCOPg 

Cantral Amariea 



PCRPOSE 

Support and conduetj 
saraai] 



Tha Whita Housa 
Washington, 0. C. 
Oacanbar 1, 1981 







\<j-^ — 



.p.^ 






@) 



ruin a Bt_££A 




bx niD « OABJ Vt^^^^iLm 



uum. 



/O ic; 



1016 



Ty , Name ard Address Date :Initial3| 



^ 


i 


2 


1 . ' ! 


3 




"'i 1 


1 






5 




I 


6 1 


1 ACTION FILE ] 


[approval information ! 


COMMENT 1 : PREPARE REPLY i 


' CONCURRENCE RECOMMENDATION 1 


DIRECT REPLY 1 i RETURW 


DISPATCH 1 .SIGNATURE | 


REMARKS: ^^^J^ T/Z^/U 

SENSITIVE 



r 



.-^- 7i N^'^^ 



1 QH'i'^ 




SECURITY CLASSIFICATION 

N 44651 



NSC/ICS CONTROL NO. 



HANDLE VIA 
THE NSC INTELLIGENCE CONTROL SYSTEM 

ONLY 



DO NOT FILE OR DESTROY THIS DOCUMENT. RETURN DIRECT TO: 



NSC INTELLIGENCE DIVISION 

SYSTEM IV CONTROL 

ROOM 300 



\ ^ ' ^^ /^ Warning Notice 

Intalligenco Sources and Methods Involved 



NATIONAL SECURITY INFORMATION 
Unautheriztd Oisclosur* Subiact to Criminal Sanctions 



'A^ 



SECURITY CLASSIFICATION 



1017 



UNCI 




as^ 



az jy'- 



National Security Council 
The White House 

•• •-■' ■ ■'. "i Package M 7 ^ / T ^ 

N 4 4 652 
\1 9\l: 03 



SEQUENCE TO 



ACTION 







jjt .^-—^-^ y^-^' 



j^ 







Y^S — 




<^\f 



1018 



UNClAJiSIFlED 



NATIONAL SECURITY COUNCIL 



JNiy4^6^!8' 



TO: WILLIAM P. CLARK 
FROM: DONALD GREGG 



Attached are five copies of 
the proposed Finding: one 
for the Vice President, one 
each for Meese, Baker, and 
Deaver and one for you. 



Attachments 



UNCWSSIFIFO 



1019 



UPRSSSntD 



I^^:FxtI■-c-.•Ci. 

NSC/ICS 4 00178 



MEMORANDUM 

^^^"^^ NATIONAL SECURITY COUNCIL 

SpZ^T July 12, 1982 

ACTION 

MEMORANDUM FOR WILLIAM P. CLARK N 44654 

FROM: DONALD GREGG f^ft 

SUBJECT: Proposed Covert Action Finding on Nicaragua 

Director Casey has requested that the attached covert action proposal 
be dealt with at the 13 July 1982 meeting. This proposed Finding is 
a direct outgrowth of actions taken under the 1 December 1981 Finding, 
designed to create opposition to the Sandinista leadership of Nicaragua. 

The urgency in dealing with this Finding derives from the fact that 
the opposition group under Eden Pastora has been developing quickly and 
that additional actions not covered by previous authority are now being 
proposed. 

The present Finding requests authority to: 

— Provide financial and material support to the anti-Sandinista group. 

— Provide assistance in terms of funding, training and arms supply to 
the saune group. 

~ Work with other Latin American and European governments to build 
international support for the movement. 

Questions to Raise . While the overall effort appears to be going well, 
I would suggest that CIA be questioned as to the form and size of the 
paramilitary activities which the Pastora group will be undertaking, 
the targets of these forces and th3 expected reaction (the rationale 
appears to be to have the anti-Sai. iinista forces strike against the C-oban 
presence in Nicaragua rather than attacking the Sandinista units) . 

^ ::. Funding . CIA states that it will not require additional funds for the 
^ L' remainder of this fiscal year. 

!»', 'a RECOMMENDATION 

^^ o' 

P'-'j- OK No 



"[' Assuming satisfactory <:- .swers to the questions indicated above, 

I would recommend this inding be approved. 

Attachments * 

Tab I Scope and Finding, NSC/I :S 400178, (Copies 1 thru 5) 
Tab II December 1, 1981 Finding & Scope (NSC/ICS 03340) 




1020 



ilNWSSIfifO 



N 44655 






1021 




NSC/ICS CONTROL NO.. 



SCOPE or CIA ACTIVITIES 
ONDER THE NICARAGUA FINDING 



^, 44656 



.K4 - 



Following th« President's approval of the attached Finding on 
Nicaragua, CIA will undertake the following specific activities: 

a) the primary activities will be directed at providing 
financial and material support to democratic Nicaraguan leaders 
who have become disillusioned with growing Cuban predominance in 
Nicaragua and with the increasing totalitarian nature of the 
national FSLN leadership. We will assist t hese democratic 
N icaraouan le ad ers and their organizationj 




b) as a supplement to the above primary activities, we will 
aid the democratic Nicaraguan leaders and their organizations in 
their efforts to increase internal resistance to the FSLN arid to 
ere > a paramilitary potential to punctuate their resolve to 

ef: : changes in Nicaraguan government policies. This assis tance 
wil le in the font of funding, arms supply and some training fll^l 
the rainlna,^£in g conducted by third country nationals to the 

■M|[^^|^H^^ This activity is to enable th« democratic leaders 
an^organizations to deal with the FSLN leadership from a position 
of_strength. The democratic Nicaraguans would b« encouraged to 

Ljocus the paramilitary operations primarily against the Cuban 
presence in Micaraguajand to view these paramilitary forces as a 
rallying point for the dissident elements of the Sandinista 
military establishment. 

c) to further the above activities, we will worlc with 
selected Latin American and European governments* organizations and 
individuals- to build international support for the objectives of 
the deaocratlc Nicaraguan groups. These selected governments will 
be encoanged to pressure the Nicaraguan Government to reach an 
accord with the democratic Nicaraguan elements through 
negotiations. These foreign governments and international 
organizations will be encouraged to aid the democratic Nicaraguans 
in their efforts to eliminate the influence of Cuba and the Soviet 
Union over Nicaraguan Government policies and actions and to 
restore freedom and democracy to Nicaragua. 



ALL PORTIONS OF THIS OOCOHEMT 
ARE CLASSIFIED SECRET 



82-7 

Copy No. O 




RVW 08JUL02 
DRV D9CJ 
CL BYl 



i^5^ 



1022 



'^Bmim 



Finding Pursuant to Section 662 of 
The Foreign Assistance Act of 1961, 
As Anended, Concerning Operations 
Undertaken by the Central Intelligence 
Agency in Foreign Countries, Other Than 
Those Intended Solely for the Purpose 
of Intelligence Collection 



^4657 



I hereby find that the following operation in a foreign 
country (including all support necessary to such operation) is 
important to the national security of the United States, and 
direct the Director of Central Intelligence, or his designee, 
to report this Finding to the Intelligence Committees of the 
Congress pursuant to Section 501 of the National Security Act 
of 1947, as amended, and to provide such briefings as necessary. 



SCOPS 



Nicaragua 



PURPOSE 

Support and condu ct! 

Iftttf^K^^KK^'^^^*^^ activities, 
incluaing p aramilitary acti vities , 
designed to| 

y to facilitate the 
forts oy aemocratic Nicaraguan 
leaders to restore the original 
principles of political pluralism, 
non-alignment, a mixed economy and 
free elections to the Nicaraguan 
revolution. Work with foreign 
governments and organizations as 
appropriate to carry out the 
program. 



The White House 
Washington, D. C. 



/f 



f/ 






(S5) 



1023 



WCBISSIFIED 



N 44658 



fiwmm 



1024 



vmrnm 



NSC/ICii 03340 



Finding Pursuant to Section 662 of 
Th« Foreign Aasistanee Act of 1961, 
A3 Amended, Concerning Operations 
Undertaken by the Central Intelligence 
Agency in Foreign Countries, Other Than 
Those Intended Solely for the Purpose 
of Intelligence Collection 



"^4659 



I hereby find that the following operation in a foreign 
country (including all support necessary to such operation) is 
important to the national security of the United States, emd direct 
the Director of Central Intelligence, or his designee, to report 
this Finding to the intelligence committees of the Congress 
pursuant to Section 501 of the National Security Act of 1947", as 
amended, and to provide such briefings as necessary. 



SCOPE 

Central America 



PURPOSE 

Support emd conduct 
paramilit 



The Whita House 
vrashingtOBf 0. C. 
December 1, 1981 




\<3-^^ — 




IMSIflFO^ 



D DICL (3 BlVl oa 13 Nov! 
pywi ft YBtpa aY D9<i.5^ 



1025 



ti HUO 






82-684 0-88-34 



1026 



PY-V3 



CLASSIFIED AT TIME OF PUBLICATION. 



1027 



QW-VV 



CLASSIFIED AT TIME OF PUBLICATION. 



1028 







<NC«DE*> 

\i»$« f«OH: N$J«» — C^U» TO: NS^ST — C»U» 

T«: N$MT — CFU* ^«0L THOH^SON 



NOTE r*OM: JOHN ^OINOEITCR J 

<SUSJECT> 

Subject: HfAC 
<TeET> 

*•• rorMirdln) nott froa NSRCfi —CPU* 11/21/86 21:01 ••• 

To: HSJur — C^U« 

••• R*0lT to net* of 11/21/66 19:12 



11/22/66 16:36:53 

\\ 19124 



NOTE F^OM: aOSEMT NCFAPLANE 

Subltct: NFAC 

•ooer John. Teu autt ouit b« orttty well drained after the leatlons with the 

Intel cooaltteet. That'a not a terrlblr uplifting eiperlenceJ I did It a tloe 

or two for Ollie. I teent a couole of hours with Ed Heese todar «o1n« over the 

record with hie. The enlr blind apot n or oart concerned a ahlppent In 

Noveober *fS which atlll doesn't ring a bell with oe. 

But It appears that the aatter of not notifying about the Israeli transfers 
can be covered If the President oade a "oental finding" before the transfers 
took place. Hell on that scoro we ought to be ok because he was all for 
letting the Israelis do anything they wanted at the wery first briefing In the 
hospital. Ed seeited rellewed at that. Ckrollne tell* ae that ahe hwa arranged 
for ae to aeet with the *fk(, on Dec Sthat 2:00do. They want It to be closed 
but for the record. I don't aind either way but will be guided by whatever you 
all prefer. 






^ 



$- 






cv^o^i^n 




1029 




'BfllfiBgtaa,!. fl. 205311 



uNcussm 



/ 






"T^ ex ; .. 




N- 10018 



9H-5^ 



The Honor aU,e Wi Iliad J. Caa*y 

Director 

Central Intalllgancc kgeney 

Mashington. D.C. 20S0S 



Dear Dill 



We have been advised by the State 
Adviser that the Foreign Assistance Act 
Control Act were not Intended, an:* . ve 
Congress to be the ex<rlusivQ means ^v^c an 
to foreign countries iind that the Piesi 
transfer outside the (ontcx 
I believe the exchangr for 
plctcd, based upon a c etern 
Acts cannot be used ar d that the author 
Act and Nt'Ltional Secui ity Act aay be ut 
cignificant intelligerc* objccfciva. in or 

Congressional reporting cequirenents iaposA^ bn tho Secretary 
of Defense under DoO appropriations Author] zar.ion Acts 
(10 U.S.C. 13i, floce) bnd on you by the Tnj 
Act Of \9ft0 (SO JI..S.,CjL413) , the Houi=* u.iJl 
Cumioi tcces should beunformed of this pcop<r;al anM 
President's deterainatjions. {t < I 

I I 
Sincerely, 



artaent's I.cgal 

Che Arns Rxouc c 

qcen app] led, by 

s |uE U.S. wcaponu 

Biay approve a 

tels. Accordinqly, 

ay be legally com- 
rccidcnt that Lhe.-.c* 
s 6f the Kconoffly 
cdl to achieve a 
ler| to satisfy the 



>uxa Dtf uni 
sterainadic 



zar. ion accb 

iii|l<">wi- i(iC_'li iijc'nrv 



_:^^. 



mtLiAw PREficn s^ 
Attorney General 



ttorney G 



state 



Classified by Derivative: 

Mi!i noranduiti of ija w, October 2, 



ITrt 



m 




Depa 
T98l 



view for DeclaiJsif ication; 10/2/200 



r^iBcftir 



mm 



V 



^- 



1030 






THE SECRETTARY of STAf: 
WASHINGTON 



ilNPOWjIINeiilSSinED 






N. 10019 



Dear Bill : 

As you will recall, the V.S'?Z requested the cpir.icr. 
cf -he Attorney General as to the lecality of a sensitive 
intellic ence collec tion a ctiviry which would invol ve 

transf« ^^^^^^^^^^^^^^^^^^^^^^^^^_^^__ 

^ ie objective of 

this transfer 




The Attorney, General, after preliminary inquiry, has 
referred to the Department of State the question of whether 
the special body of legislation generally oovernin g in ter- 
national a rms transfer would preclude the transferJ|B^ 
^^■^■■■which is b^^^ve^t^b^anessential preconditior. 
t^^^^acquisition^^^^^^H^mH^^Hj This Departnent's 
Lecal Adviser, in coS^^^^TonwitT^tne Justice Department's 
Counsel for Intelligence Policy and the General Counsels 
cf cr.-. and DOD, has provided to me tne enclosed mencrand-wL~ 
of lav. In that me no rand -jr. , the Legal Adviser concludes 
that the arms transfer laws dc not constitute exclusive 
authorities, although it is not clear that a transaction 
of this magnitude was intended tc oe permitted outside the 
normal fra.-newor>c of substantive and procedural recuireiients 
of the arms export control laws. Ir. the absence of any 
applicable express prohibition, the Legal Adviser believes 
that the President has the discretionary authority tc apprcvs 
this proposal as an integral part of an authorized intelligs" 
collection activity. 

At the same time, the enclosed memorandum points out 
certain legal risks, including the possibilities of new 



The Honorable 

William J. Casey, 
Director , 

Central Intellioence Aaencv. 



(^) 



utmssKKD 



1031 




1 oorc 

These risXs ver^y^ 

considered by the NS?G and wniTe not lecallv cor.oel'' -"n- 
would appear to merit its cc-sideration.' ' :' "' 

Sincerely, 



/ 



Alexa-.der M. Hai = , jr. 



:ncicsure : 

Memorand'jir of Lav 



IH««B 



1032 



DNEtk^iLD 



Tme Leoal Adviser 

OeP*STM£NT or STi-t 

October 2, 1981 
MEMORANDUM OF LAW 



N 10021 



/ 



I 
I 



SUBJECT: Legal Authority for the Transfer of Arms 
Incidental to Intelligence Collection 

Introduction 

This memorandum e xamines the legal basis for a pro posed 
t r a n s f e r o^f fl^^H^H^m^Hj^m^H^mimPI £ r o m 
the stocks of the Department of Defense to the Central 
In tellige nce Agency and from the Central Intelligence Agency 
to I 
to 




Analysis 



The Congress has enacted a number of statutes specifi- 
cally dealing with the international transfer of arms by the 
United States, contained chiefly in the Foreign Assistance 
Act of 1961 (hereafter "the FAA") and the Arms Export Control 
Act (hereinafter "the AECA"). Any examination of the 
legality of the proposed transaction should begin with the 
question of whether any of these statutes is necessarily 
applicable in these circumstances. 

At the outset, it should be noted that since this pro- 
posed transfer of U.S. arms would be a cash sale, laws 
dealing with grants of defense articles and with "assistance" 
to foreign countries are not applicable. In this regard, 
former section 640 of the FAA (79 Stat. 661) provided that 
references in that Act to "assistance" would not be con- 
strued as applicable to cash sales of defense articles. 
This rule of construction is preserved by section 45 (c) of 
th« AECA (22 U.S.C. 2751 note) stating that no provision of 
law (with certain exceptions not here relevant) shall be 
daemed to apply to that Act unless it refers specifically 
thereto or refers generally to sales of defense articles 
and services. When section 45(c) was enacted in 1968, the 
report of the House Committee on Foreign Affairs explained 
its purpose as follows: 



[^m. 



mmma 



1033 



wmma 



^ 10022 



"The serond s-entence [of subsection (c) ] continues 
in fcrce sfzer the repeal of sectcr. 640 of the 
FAA by subsection (a) the rule of construction 
contai.-.ed therein that restrict lor.s which do not 
refer specifically to sales of defense articles 
and defense services and are phrased only in 
general terirs of prohibiting "assisiance" do not 
a=3lv to sales." H.R. Pep. No. le*!!, 90th Cone. 
2d" Sess. , p.l^ (196S) . 

These expressions of legislative intent--in the Foreirr 
.Hssistance .nct, the Ar-s Export Control Act, and the abc/e- 
cucted cor.Tittee reporz--show th^t Congress does not regard 
cash sales of defense articles"as constituting assi sta-.ce " 
for purposes of laws prohibiting assistance to foreign 
countries. Therefore, it is unnecessary to consider 
restrictions such as those contained in section 620 (i) of 
the FAA (22 U.S.C. 237G(i)) on assistance to nations encaged 
in aooressive military efforts, or section 620 (t) of th^ 
_FAA ^22 U.S.C. 2370(t))/ 




Certain categories of military equipment may be trans- 
ferred only under specified authorities or after compliance 
with certain procedures. In particular, section 514(a) of 
the FAA requires that any defense article in the DOD invs-tcr-_. 
"which is set aside, reserved, or m any way earrar'xec or 
intended for future use by any foreign country" r.ay be 
transferred to a foreign country only under the authority 
of the FAA or the A£CA. In addition, IC C.S.C. 957 prohibits 
any "sale outside the Department of Defense" cf any defense 
article classified "as Prepositioned Material Configures 
to Unit Sets, as decrement stock, or as Prepositioned War 
Peserve Stocks" unless the President determines and reports 
to Congress that certain criteria relating to an internaticr.a : 
crisis are met. Further, section 813 of P.L. 94-106, as 
d.-ended (10 U.S.C. 133 note) , requires a report to Congress 
m .-he case of "any proposal to transfer defense articles 
which are valued at $25,000,000 or more from the United 
States active forces' inventories or from current production. 



The Genera l Counse l 
ieterrrined that! 
:r. IS case will ai JT cor 
;ro~ current oroduction. 



the DeparLrsnt. cf defense has 
rcpcsed to be transferred : 
Tor active forcss' inver.-ories ir 
Accordin- 1'-' , the first two cf 



the three staiu-es described m the preceding paragraph c: 
nct apply. However, the third statute does require a rept; 
tc Congress by the Secretary of Defense. 



.-i:.";* 




1034 



UimSSIElEO 



N 10023 



- 3 - 



Although the applicable statute does r.ct specify the 
forr. or the precise recipients in Congress of such a report, 
the practice has been to furnish reports of transfers froT 
a:-iv9 f:::-ces' inventories and new procjction in writing to 
t.-.e Spea'-.er of the Ho'-se and the President of the Senate, 
with copies to the Arrred Services Cornni ttees . In light of t- : 
practice, it would seer' prudent tc offer at least an oral 
report to the chairren of the Arned Services Comini t tees , 
explaining that the proposed transfer is one of great 
sensitivity and is being reported on in detail to the Intelli- 
gence Conmittees. (It is understood that the Intellicencs 
Conri ttees will be inforned in accordance with the usual 
procedures for providing notification of significant antici- 
pated intelligence activities in accordance with section 501 
of the National Security Act of 1947 (50 U.S.C. 413).) 

Arms sales by the United States to foreign countries are 
expressly authorized by the Arms Export Control Act. Soeci- 
fi'cally, section 21(a) of the AECA (22 U.S.C. 2761(a)) author: 
the President to make cash sales to foreign countries of 
defense articles from, the stoc)<s of the Department of Defense. 
However, it is clear that the requirements of the A£CA cannot 
be met in this case. The principal relevant requirements are 
as follows : 

--Sales may be made only to cour.-.ries with respect to 
w-ich the President has found such sales will streng':.hen the 
securi-v of the United States and Drc~ste world oeace 
'5 3ia)fl}, 22 U.S.C. 2753 (a)(l)r; 

-- The articles may be sold onlv for use for legitimate 
ourocses and the recioient country must aaree to use the ar-= 
onlv for legitimate (e.g., self defense) purposes, not to 
retransfer them without USG consent, and to maintain their 
securitv (§i 3(a)(2) and (3), 4, 22 U.S.C. 2753(a)(2) and 
(31 , 22 U.S.C. 2754) ; 



--A reoort of the propcsed sale c: 
m.ent valued at S7 million or more must i 
^oncress, which may disapprove the sale 
-ion within 30 davs after receivm- sjc: 
:: U.<=.C. 2-76 (b) ) . * 



major aefense eqjip- 
e submitted to 
bv concurrent resclu- 
report (I 36 (b^ , 



'Cone ress icnal review unier secti 
personally bv the ^resident if he 
a- energericy exi 
securitv interes 



36 (b) may be waived 
erTii'ies tc Congress -.r.az 
which requires the sale in the national 
However, this authoritv has been 



evercised only once in the se\'en years since section 36 fb' 



was enacted in 1974 
(footnote continued 



(for Venen in 1979, see Presidential 
next page) 



1035 




70024 



In the case^^^^^l^the President has race no cecer- 
Lr.ation of elig^^^^yander sectiqr^^^^' 1 ) o_f the A£CA- 
It i s at least questiona ^^^JhetherW^^^^Buse cf the U.S. 
ar~s|P^Hil^^^HHHmH^^Hcould D^cnaracterized as a 
le;i'--~ate u s ^o^to^^^^^se 1 f defense (see the definition 
c: aggression set forth m UNGA Res. 3314 (XXIX) (1974)). 
Cc.-.cressional review is obviously impractical and acceptance 
of this transfer by Congress mcht be unobtainable in any 
e\'ent . 

In \'iew'of the fcreccing, it seers clear that a transfer 
■^nder the authority of the ?-XCA is irpract icable . Accordmrl-- , 
it has been proposed that DOC transfer the weapons to CIA 
under the authority of section 601 of the Economy Act of 1932 
(31 U.S.C. 666), which pertrits one federal agency to order 
equipment from another on a reimbursable basis to carry out 
an authorized activity of the recuest^i^aoency . it is then 
proposed that CIA effect the trans fer^jB|BB|under the 
sweeping authority granted to that ac^ici^j^ection 102(d) 
of the National Security Act of 1947' (50 U.S.C. 403(q)). 
Section 102(d) provides that it shall be the duty of CIA, 
under NSC direction, to perform services of common concern 
for the benefit of existing intelligence agencies and to 
pT-rfoiTT. "such ether functions and duties relating to ir.tel lirer- 
affectmc the national security as the National Security 
Council nay from tirre to time direct." 

The propcsed reliance upon the Economy Act and t.he Naticnai 
Security Act, neither of which ccntsins any explicit 
reference to arms transfers, gives rise to the question of 
whether the Arms Export Control Act, which contains a cor.pre- 
hensive frameworlc of policy guidance, substantive authorities 
(and limitations of authority) , and procedures specifically 
addressed to international sales of arms by the United States 
is a preemptive statue which, by implication, precludes 
reliance uoon the more general authorities of DOD and CI.A. 



•"ootnote cor ' t 

Determination No. 79-6 of .Xarch 7, 1979, 44 Fed. Reg. 18633). 
That single instance provo)<ed intense Congressional interest. 
See Hearings or. Proposed Arms Transfers to the Yersn Arab 
P.epublic before the Subcorj"ittee on "urope and the Middle £a = ' 
cf the House Fcreicn Affairs Ccr-ittae, 96th Cone., 1st Sess. 
(1979). Any future determination under section 36(b) would 
reruire publication cf a notice in the Federal Register under 
section 654(0) of the FAA (22 U.S.C. 2414(c)). Such a publ: 
cation would obviously be incortatibla with the covert na: 
cf the oroocsed transaction. 



-.■'-1 - - 



1036 



wHmm 



N 10025 



s - 



It seer.s clear that Ccncress has not regarded the 
FAA and the A£CA as ar. exclusive body of law fully o:z^zvLr.z 
the field with respect to U.S. arrs trar.fers. There are' 
se'-eral illus-raticr.s where Congress, having been race 
a•.^"=re cf T;rir.sfers zc fceiar. countries outside that bed'.' 
cf specific ou^hcri-ies, has r63:;ted by enactinc lirLzez 
restrictions or reporting requirerents rs-.her than b\- 
prohibiting such transfers altoge-her. 

One set of exar.ples involves DOD ' s authority to lease 
n'on excess property "not for the tire reeded for public use' 
(10 U.S.C. 2667). Khen Congress considered the previous 
use of that authority to transfer small naval vessels to 
foreign countries it amended 10 U.S.C. 7307 t.o impose new 
reporting requirements. See P.L. 93-365, § 702,88 Stat. 405 
(1974). Similarly, when Congress considered the use of 
this leasing authority to transfer helicopters to El Salvador 
m 1980 it established a new reporting requirement covering 
all m.ajor leases to foreign governm.ents . See P.L. 96-533. 
§ 109,94 Stat. 3137 (1980)'. 'However, it did not challenge 
the lav.-fulness of previous transfers by lease or prohibit 
such transfers m the future. 



Kore cirectly xr. point are the exarples of Corgres 
action wit.h respect to covert arr-.s transfers conducted 
CIA. These include section 513(b) cf the FAA (22 U.S.C 
f(b)) enacted in 1974 and precluding non-FAA or AECA f 
for military assistance to Laos; section 662 of the FAA 
U.S.C. 2422), also enacted in 1974 and requiring Presid 
approval of and reports to Congress on CIA "operations i 
foreign countries other than activities intended solely 
obtaining necessary intelligence";* and secticr. 404 of 
P.L. 94-329,90 Stat. 757) enacted in 197c and prohibiti 
assistance for military or paramilitary operations ir A: 
All of these statutes v;ere enacted a==inst a cackarounc 



22 



I 



•Tne rsoortmc recuirements of section 662 were suoerseded 
section 407 of P.L. 96-459, 94 Stat. 1981 (1980), which ad: 
a new section 501 to the National Security Act of 1947, 
entitled "Congressional Oversight" (50 U.S.C. 413). 

♦•Section 404 was superseded in 198C by section 118 of 
P.L. 96-533, which reenacted the 1976 trchibition with rir: 
chances (22 U.S.C. 2293 note). 




1037 



\immm 



1002^ 



covert actior.s , ir.cl-di."!? arrs transfers. Althouch the 
language in the relevant cor.-ittee reports is rather 
circumspect in this regard, the legislative history of the 
prohibition on assistanre to Angola is especiallv instructive . 
That prohbiitior. was aroncec in the cc-rittee of' conference 
tc add the words "-.ctwithst ar.di.-g any ether provisicr of law.' 
The reason for this arendrer.t was exp lai.ned m the conferer.re 
report as being "to rrake clear that t.-.e prohibition en 
security assistance [i.e., arT-s transfers) is not lirited 
solely to assistance furnished pursuant to this Act." H.P. 
.=!e?. No. 94-1913, 94th Cong. 2d Sess., p. 70 (1974). The 
reference to "this Act" meant the International Securif 
Assistance And Arms Export Control Act of 1976 (P.L. 94- 
329, 90 Stat. 729) , which amended extensively both the FAA 
and the AECA. Moreover, the prohibition was enacted as a 
companion to the so-called "Tunney am.endment" to the rY1976 
DOD Appropriation bill (H.R. 9861, 94th Cong. 1st Sess. (1975) 
That amendm.ent deleted funds intended for use by CIA to 
provide covert military assistance, including arms transfers, 
in Ancola. See debates at 121 Cone, ^sc . 40872-40873, 41196- 
41212, 41564, 41617-41623 (1975). 

The CIA General Counsel advises that, since the enactment 
in 1974 of the abr-.£ -described legulation on reports tc 
Congress of covert actions, several reports have been race 
of covert actions involving arms transfers to foreign countrie; 
by CIA and Congress has acquiesced m such transfers. This 
fact, together with the above-discussed record of limited 
Congressional action to deal with international arm.s transfers 
made in the past outside the framework of the security assists: 
laws, provides a sound legal basis for concluding that the 
AECA is not an exclusive authority for arms sales to foreign 
aoverrjnents . 

There rem.ams, however, a difficult issue of judg-^ent 
that is presented because of the amount of this particular 
tranjsfer, the nature of the equipment, and the controversial 
character of the intended recipient. I am unaware of any 
covert arms transfer in recent years which has so directly 
confronted the central purpose of the Arm.s Export Control Act 
chat large tran sfers of maigr de fense euuiprent to volatile 
regions such a sfH^^B^^^M^HB should be carried out 
effective polic^^^^^^^^^^^^^^the Ccngress, with careful 
I.\ecutive Pranch deliberations enco-racsd by the need to 
sub;ect their outcc~e to Concressicn a 1