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

Senate Report

No. 216

IRAN-CONTRA INVESTIGATION

APPENDIX B, VOLUME 3
DEPOSITIONS

United States Congressional Serial Set

Serial Number 13744

United States Government Priming OfFui-
Washington : 1989

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

Report of the Congressional Committees Investigating the

Iran-Contra Affair

Appendix B: Volume 3
Depositions

Daniel K. Inouye, Chairman,
Senate Select Committee

Lee H. Hamilton, Chairman,
House Select Committee

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

On Secret Military Assistance to Iran Select Committee to Investigate

And the Nicaraguan Opposition Covert Arms Transactions with Iran

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

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

November 17, 1987. - Ordered to be printed.

Washington : 1988

Bnittd ^tatcB ^tnatt

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 B 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 V^^
Vice Chairman

III

U.S. HOUSE OF REPRESENTATIVES

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

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

enely yours.

Lee H . Hami Iton
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 Courier, New Jersey

Bill McCollum, Florida

Michael DeWine, Ohio

John W. Nields, Jr.
Chief Counsel

W. Neil Eggleston
Deputy Chief Counsel

Kevin C. Miller
Staff Director

Thomas R. Smeeton
Minority Staff Director

George W. Van Cleve
Chief Minority Counsel

Richard J. Leon
Deputy Chief Minority Counsel

VII

United States Senate

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

Arthur L. Liman
Chief Counsel
Mark A. Belnick 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. Kerr
Joel P. Lisker

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

Committee Staff

Assistant Counsels

Legal Counsel
Intelligence/Foreign

Policy Analysts
Investigators

Press Assistant
General Accounting
Office Detailees

Security Officer
Security Assistants

Chief Clerk
Deputy Chief Clerk

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

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

Marshall
Georgiana

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

Staff Assistants

Administrative Staff

Secretaries

Receptionist
Computer Center
Detailee

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

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

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

VIII

Committee Members' Designated Liaison

Senator Inouye
Senator Rudman

Senator Mitchell

Senator Nunn

Senator Sarbanes
Senator Heflin

Peter Simons
William V. Cowan
Thomas C. Polgar
Richard H.
Arenberg
Eleanore Hill
Jeffrey H. Smith
Frederick Miilhiser
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. Hummel!
David G. Wiencek
Nona Balaban
Edward E.

Eldridge, HI
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 tiled but had. dunni.'
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 Liaison
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 Assistatits

Catherine L.

Zimmer
Charles G. Ratclift"
Stephen M.

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

Minority Staff

Associate Minority

Counsel
Assistant Minority

Counsel
Minority Research

Director

Thomas R. Smeeton
Minority Staff Director

George W. Van Cleve
Chief Minority Counsel

Richard J. Leon
Deputy Chief Minority Counsel

Robert W.
Gen/.man
Kenneth R. Bui

Bruce E. Fein

Minority Staff
Editor/Writer

Minority Executive
Assistant

Minority Staff
Assistant

Michael J. Malbin

Molly W. Tully

Margaret A.
Dillenburg

Committee Staff

Investigators

Director of Security

Robert A.

Bermingham
James J. Black
Thomas N.

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
OR. Beckett

Associate Staff

Representative
Hamilton

Representative
Fascell

Representative

Foley
Representative

Rodino

Representative

Brooks
Representative

Stokes
Representative

Aspin

Michael H.

Van Dusen
Christopher Kojm
R. Spencer Oliver
Bert D. Hammond
Victor Zangia
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. Dornan

Dennis E. Teti

Tina L. Westby

Nicholas P. Wise

Steven R. Ross

Contents

Volume 3

Preface XXI

Byrne, Phyllis M 1

Calero, Adolfo 35

Castillo, Tomas ("W") 239

Cave, George W 563

C/CATF 1077

Depositions

Volume 1

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

Volume 2

Volume 3

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

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

Volume 4

Channell, Carl R.

Chapman. John R. (With Billy Ray Rcyer).

Chatham, Benjamin P.

CIA Air Branch Chief.

CIA Air Branch Deputy Chief.

CIA Air Branch Subordinate.

CIA Chief.

CIA Communicator.

CIA Identity "A".

Volume 5

CIA Officer.

Clagett, C. Thomas, Jr.

Clark, Alfred (With Gregory Zink).

Clarke, George.

Clarridge, Dewey R.

Cline, Ray S.

C/NE.

Cohen, Harold G.

Volume 6

Collier. George E.

Cole, Gary.

Communications Officer Headquarters, CIA.

Conrad, Daniel L.

Volume 7

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

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

Ducmling, Robert W.
DIA Major.
Dietcl, J. Edwin.
Dowling, Father Thomas.
Dutton. Robert C.
Earl. Robert.

Volume 8

Volume 9

XVI

Volume 10

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

Volume 11

Furmark, Roy.

Gadd, Richard.

Gaffney, Henry.

Gaffney. Henry (With Glenn A. Rudd).

Galvin, Gen. John R.

Gantt, Florence.

Garwood, Ellen Clayton.

Gast, Lt. Gen. Philip C.

Gates, Robert M.

Glanz, Anne.

Volume 12

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

Hakim, Albert.

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

Volume 13

Volume 14

XVII

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

Volume 15

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

Jr.

Volume 16

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

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

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

Volume 17

Volume 18

XVIII

Miller, Richard R.

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

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

Volume 19

Volume 20

Volume 21

Volume 22

Raymond, Walter, Jr.

Regan, Donald T.

Reich, Otto J.

Revel! , Oliver B.

Reyer, Billy Ray (See John Chapman).

Reynolds, William B.

Volume 23

Richard, Mark M.
Richardson. John, Jr.
Robelo, Alfonso.
Robinettc, Glenn A.
Rodriguez, Felix I.
Rose man, David.

XIX

Rosenblatt. William.

Royer, Larry.

Rudd, Glenn A.

Rudd, Glenn A. (See Henry Gaffney).

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

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

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

Volume 24

Volume 25

Volume 26

Volume 27

Thurman, Gen. Maxwell.

Trott, Stephen S.

Tull, James L.

Vessey, John.

Walker, William G.

Watson, Samuel J., IIL

Weinberger, Caspar.

Weld, William.

Wickham, John.

Zink, Gregory (See Alfred Clark).

Preface

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

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

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

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

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

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

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

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

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

XXI

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

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

XXII

Publications of the Senate and House
Select Committees

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

Appendix A: Source Documents, 2 volumes, 1988.
Appendix B: Depositions, 27 volumes, 1988.
Appendix C: Chronology of Events, 1 volume, 1988.
Appendix D: Testimonial Chronology, 3 volumes, 1988.

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

XXIII

Scenographic Transcript of
^ HEARINGS J

Before the

SENATE SELECT C0MMITTE2

TOPJECnET

UNITED STATES SENATE

DEPOSITION OF PHYLLIS M. BYRNE

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UNcussm

DEPOSITION OF PHYLLIS M. BYRNE

Washington, D.C.

Tuesday, June 16, 1987
Deposition of PHYLLIS M. BYRNE, a witness herein,
called for examination by counsel for the House and Senate
Select Committees on Secret Military Assistance to Iran and
the Nicaraguan Resistance, pursuant to notice, the witness
being duly sworn by SUSAN A. HARRIS, a Notary Public in and
for the District of Columbia, at the offices of the Senate
Select Committee, 901 Hart Senate Office Building,
Washington, D.C, at 10:00 o'clock a.m., Tuesday, June 16,
1987, and the proceedings beina ta .n down by Stenomask by
SUSAN A. HARRIS and transcribed mde . her direction.

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APPEARANCES:

MARK K. BELNICK, Esq.
VICTORIA NOURSE, Esq.
Senate Select Committee

CLARK B. HALL, Esq.
RICHARD J. LEON, Esq.
House Select Committee

JOHN P. SCHf'ITZ, Esq.

Deputy Counsel to the Vice President

ALA^' CHARLES PAUL, Esq.

Associate Counsel to the President

AIDIRSON RIPORTINC COMPANY INC.
20 r ST NW WASHINGTON. DC 10001 (102; 6]|. 9300

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Deoosition of :

Examination

Cou

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PHYLLIS M. BYRNE

Senate

House

By Mr. Belnick

By Mr. Leon

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2 (Witness sworn.)

3 Whereupon,
PHYLT.IS M. BYRNE,

5 a witness herein, was called for examination by counsel for
e the Select Cotmnittees and, having been first duly sworn by

7 the Notary Public, was examined and tes.tified as follows:

8 EXAMINATION BY COUNSEL FOR THE SENATE

9 COMMITTEE
BY MR. BELNICK:

Oi State your name for the record.
12 A. Phyllis Byrne.

Ql Phyllis, you're employed where?

14 A. In the office of the Vize President, in the

15 national security affairs office.
15 Q. For whom do you work personally!
17 A. Donald Gregq.
ig ft And he's the Vice President's national security

advisor?

A. His title is assistant to the Vice President for

21 national security affairs.

22 ft And how long have you worked for Mr. Gregg?

23 A. I joined him in March 1983.

24 ft And you have worked for him continuously since

25 then?
A. Yes.

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10
11
12
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19
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23
24
25

Q. I'm ooing to show you a document which has been

marked by the reporter as Byrne Exhibit 1. It is headed
"Office of the Vice President, Washington, April 16, 1986,"
and then it reads "Schedule proposal."

(The document referred to was
marked Byrne Exhibit No. 1
for identification.)
I take it you have seen this document before.

Phyllis?
A.
ft

Yes, I have.

Can you describe to me what type of a document
this is? What is a schedule proposal?

A. This is really a form, and it is a form that
asks us to provide certain inforration for meetings for the
Vice President.

ft Is it a form used when a meeting is proposed for
the Vice President?

A. Yes, it is.

ft Some member of his staff requests that he attend
a meeting?

A. That's correct.

ft How are these schedule proposals typically
filled out in your office?

A. Well, they're usually filled out by me, and they
are filled out with information that has been provided to

AIDIRSON REPOKTING COMPANY INC.
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me by staff members, usually with a request from the State

2 Department or people from the outside. And with that

3 information, Don examines it and decides whether or not a

4 meetinq should be requested.

5 If he decides that it is, I complete the oroposal.

6 ft And where does it go after you complete it?
A. It goes to the scheduling office.

8 ft Is it reviewed by Mr. Gregg? Is the schedule

9 nroDOsal that you complete reviewed by Mr. Greaq before it
10 goes to the scheduling office?

A. It usually is. This oarticular one was not.

12 ft We'll get to this one. I want to talk about the

13 usual practice. Usually Mr. Gregg reviews the schedule
proposal , correct?

A. Yes.

ft And if he approves it, re outs his initials next
to his name on it?

18 A. Yes.

19 ft Then it qoes to the scheduling office?

20 A. Yes.

21 ft ivho's in charge of the scheduling office?

22 A. Hector Irastorza.

23 ft Aqain talking about the general practice with

24 schedule proposals, as I understand from your testimony, the

25 information that you put in a schedule proposal always comes

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to you from either a member of the staff or the State
Department?

A. In most cases.

Q. What about the other cases?

A. Well, it would come from a telephone call.

Q. But my ooint is the information never oriqinates

with you. It comes to you from somebody else?

A. Correct.

Oi And that's always the case?

A. Yes.

Qi You fill out what you're told?

A. Yes.

Q. And then typically, after you have completed it, it

aoes to Mr. Gregcr for review, he i-itials it, and then oft to
the scheduling office for the vice President, correct?

A. The chief of staff to the Vice President.

ft And who is Sam Watson?

A. Deputy to Don Gregg.

Qi And are they members of the staff who from time
to time will give you information for a schedule proposal?

A. Rarely with 9reg. Sam, frequently.

ft Frequently Sam Watson. Who else frequently gives
you information for schedule proposals? Mr. Gregg himself?

ALDIftSON REPORTING COMPANY INC.
20 t ST.. N.W . WASHINGTON. DC 30001 [202I «2l-9JOO

Yes.

Who is Cro^ Fuller?

llHfltliStHFn

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A. Mr. Greaa himself.

2 Q. Sam Watson you say frequently?

3 A. Sam V/atson. The State Department.
Q. Is that frequent?

5 A. Very frequent.

6 Oi Who at the State Department?
A. It would depend on what the visit is, the person,

8 what desk at the State Department is concerned with the

9 visit.

10 5i Well, let's say it was a visit relating to

Central America. What desk or desks will you typically

'2 hear from?

13 A. Well, it would depend. There again, it would be
from that desk and the country.

15 Q. So if It was from El S-". "-vador, it would be from

16 the Salvador desk?

17 A. That's correct.

18 Ql If it were something to do with the contras, it

19 would be from where in the State Department if it came from

20 the State Department?

21 A. Oh, probably Nicaragua.

22 Q. Anyone else, aside from Greg Watson and State

23 Department, who frequently qive you information for schedule

24 purposes?

25 A. Mo .

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gt HOW many schedule proposals do you complete m
the averaae durirq an average week?

A. That would fluctuate, depending on foreign
visitors who are coming. It would be difficult to gu.ss.
There would be no formula for that.

Q. Is It a regular part of your task to fi'. . out

the schedule proposals?
A. Ves.

As far as —

It's a very mechanical exercise wit.-i me.
And you do it day after dav?
Yes.

All the time?
Yes.

Let's then look at Byrr.e Exh>b>t 1 specifically
now. And this was addressed to Debbie VVutton. Who is

Debbie Hutton?

A. She at the time was head of the scheduling

office.

0, When did she cease to be in charge of the Vice

President's schedulinq office?

A. I'm not sure of the ex .ct time, but I think it's
been about four or five months ajo.

0. Then going back to t.is Exhibit 1, which again
is dated April 16, 1986. it says it's from Don Gregg and

A.
Q.
A.
ft
A.
ft

ALDfRSON SfPORTiNO COMPANY INC.
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there are initia.ls "DG." Did Mr. Gregq put those initials
there?

A. No, that is my writing.

Ql Why did you initial this document as osoosed to
Mr. Gregq?

A. Because he wasn't in the office at the time that
I had completed it. He knew that I was preparing it. To
expedite it, I put his initials on the document and noved
it forward.

Ji Did Mr. Gregg see this document before it went
out?

A. No.

0. Did you read him the contents of the document
before it went out?

A. No.

Ql Had you ever before sent schedule proposals on
to the head of the Vice President's scheduling office
without Mr. Gregq even hearing what it contained?

A. Yes.

Q. Is that something you do regularly?

A. Yes.

Q. How do you know whether it's authorized or not?

A. Because I usually have discussions with
Mr. Greqg prior to my preparing it.

Ql Did you discuss Byrne Exhibit 1 with Mr. Gregg

AiocasoN DiPotriNC company inc

JO > JT N W WASHINGTOM. D C 20001 i J03l 6Ji_9)00

innVtIi

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prior to preparing it?

2 A. Yes.

3 Q. Did you tell him what it contained?
A. Well, at the we were talking about it I had not

5 prepared the schedule oroposal, so I didn't really know the

6 exact lanquaae that would appear in it, that I would put in
it, at the time I told him about it.

8 0- I know it's hard to remember a specific day, but

9 in reference to the date on this, when would you have

10 discussed this with Mr. Gregg?

11 A. That same day.

12 Q. April 16?

13 A. Yes.

14 Qi Where did you get the Lnformation that appears

15 in this schedule proposal?

16 A. Well, the information that I got came in several

17 ways. It came in a telephone call from Felix Rodriguez

18 from El Salvador.

19 Q. You say in several ways. How else?

20 A. Well, he told me when he was coming and that he

21 would like to see the Vice President for a short time. Those

22 are his exact words. I checked my notes.

23 Qi You have notes of that conversation?

24 A. I have shorthand notes of that conversation.

25 Q. Do you have them with you?

AIDIKSON REPOKTINS COMPANV. INC.
10 r ST.. N.W . WASMINCTON. O.C. 20001 |]02l 62l'»}00

ftWi^jcnnrn

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A. r don't.

MR. BELNICK: I'd like to make a request that we
receive a copy of those notes.

MR. RAUL: We will provide those.

5 MR, BELNICK: Thank you.

6 BY MR. BELNICK: (Resuming)
& All right. Mr. Rodriguez told you when he was

8 coming in and said he would like a short meeting with the

9 Vice President, right?
10 A. Yes.

n ft What else did he tell you?

12 A. He didn't tell me anything else except that he

13 left phone numbers where he could be reached at different

14 times in El Salvador.

15 ft Did he tell you what ho wanted to speak to the

16 Vice President about?

17 A. No.

IB ft What did you do after Mr. Rodriguez called?

19 A. I told Mr. Gregg that he was coming in, and he

20 said go ahead and put in a schedule proposal to effect

21 scheduling of the meeting, and this is the result of that.

22 ft Did Mr. Gregg tell you what to put in on that

23 nart of the form that describes the purpose of the

24 meeting?

25 A. No, he did not.

AI.0EIISON RfPORTING COMPANY INC
20 F ST N W WASHINGTON. 0 C 20001 llOll 63l'9300

IMBI AHfilUZn

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Oi Did he tell you anything about the background

2 that ought to be put into this schedule proposal?

3 A. No, he did not.
Ql Where did you get the other information from

5 that appears on Byrne Exhibit 1?

^ A. The Durpose of the meeting was given to me by

' Colonel Watson.

8 Q. And how did Colonel Watson become involved in

5 this schedule proposal?

'" A. My desk is located right outside of Colonel

Watson's door and my word processor is there, too. I
turned to him when I was preparing this and asked him to
give me a phrase.

Oi And he gave you the : allowing phrase: "To •
'5 brief the Vice President on the status of the war in El

Salvador and resupply of the cor. tras"?
" A. I don't believe that he gave me those precise

'8 words, but he did tell me — the resupply of the contras was j
'9 the Dhrase that he nrovided to me.

^^ & He did tell you that. When you say he didn't

2' give you those orecise words?

A. Well, he didn't give me the complete sentence
as it appears here.

0. But he gave you the substance?

A. That's right, and I just structured what he

AlOCRSON aiPORTINC COMPANY. INC.
JO F ST N W WAJMINGTON, DC. 20001 ,JOJ; 62I.93O0

UNCIJI'SSIFIEO

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qave me into a sentence.

2 Qi So he told you in essence that the purpose of

3 the meeting v/ould be to brief the Vice President both on
the war in El Salvador and resupply of the contras,

5 correct?

6 A. Yes.
1 Ql And that's what you typed on the schedule?

8 A. That's my recollection of what he told me.

9 & You don't recall getting the purpose from
'0 anyone else, right?

A. No.

'2 ql And you didn't make it up yourself, correct?

'3 A. No .

Ol Then the infornatior that appears next to •

15 "background," from where did ycu qet that or from whom?

16 A. I wrote that myself,
gi You knew that the Vice President had previously

'8 net with Mr. Rodriguez?

'9 A. Yes.

20 I Q_ The date, that came from Mr. Rodriauez?

2' A. Yes, it did. The date came from Mr. Rodriguez,

22 and in a second telephone call he told me that he would

23 not be coming on the 22nd or the 23rd because he was
2* waiting for a plane to bring him to Miami.

25 Qt So he told you April 28, between April 28 —

ALOfRSON RIPOITINC COMPANY INC.

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A. Aoproximately during that time, yes.

ft Is it your handwriting, "28-May 2"?

A. It is.

ft And you put that on there after you typed the
schedule proposal? •

A. Well, I knew of the change in dates. i

ft Before it was sent? I

A. Mo, I think afterward. j

ft And then you conveyed the information to Debbie
Hutton how? Submitted it again?- '

A. No. I think it was by either a personal visit to
our office or else by phone.

ft So you were making the change on your office copy?

A. Yes.

ft The duration, 15 minutes, that's because Felix
told you he wanted a short meeting?

A. Correct.

ft Location, OEOB. How about the participants? How
did you know who would participate in the meeting aside from
the Vice President and Felix?

A. Well, Craig Fuller routinely joins the Vice
President in most of his meetings and I automatically
included his name. An.d of course I put Don's name there
because he was concerned with the meeting from our office.

ft And then we have what seems to be some, what I woulc

ALDERSON REPORTING COMPANY. INC.
10 f ST.. N.W . WASHINGTON. O C. 30001 ilOll 621-9300

UNCIilSSIFIED

auess, boilerplate for something like this, no remarks
required, staff ohotoqrapher to be present.

A. It's just a filling in the blanks.

0. And Don Grego would be the contact. He's the one

5 who recommends the visit. There is some handwriting at the

6 bottom of the pace, "5/1 or 5/2 oer Justine." Is that your

7 handwriting?
A. Yes, it is.
0. And who is Justine?

A. She was the deouty to Debbie Hutton.
Ql And was she telling you that the meeting would be

held 5/1 or 5/2?

A. Yes.

0. And then was it subssecjuantly scheduled for 5' 1
at 11:30 in the West Wing?

A. Yes.

T. Where in the West Wing would such a meeting be

18 held?

A. The Vice President's office.

Ql And all that handwriting is yours?

A. Yes.

Ql There seems to be a squiqgle at the bottom. Is
that —

A. I don't know what that is.

Q. An "M" that went crazy?

ALOilSON REPOKTINC COMPANY rNC.
20 f ST.. N.W WASHINOTON. DC 30001 l]02l «]i'«300

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A. It isn't anything in my writinq. I don't know what

2 that is.

3 Q. Did you discuss with Mr. Gregg before this went
out the puroose of the meeting as you had been given it by

5 Colonel Watson?

6 A. No.
Q. Did you discuss that with anybody before this

went out?

A. No. ;

Qi Did you show it to Colonel Watson? '

A. No.

'2 & You qot the information from him, typed it up,

13 and because Mr. Gregg was not there you initialed .Mr. Gregg's

initials and sent this out to Debbie Hutton?
15 A. That's correct. <

'6 0- Let's look at the next oage, which has been

marked Byrne Exhibit 2.
'8 (The document referred to was

19 marked Byrne Exhibit No. 2

20 for identification.)

21 Q. Now, I take it that this is the memo back from

22 Debbie Hutton approving the meeting that Byrne Exhibit 1

23 requested, correct?

24 A. Correct.

25 Q. Scheduling it for May 1, putting the time and

AiDERSON ikpoiitikk: compamt. ihc

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place in, correct?

2 A. Correct.

3 Ql Now, would you turn to the next page of the
exhibit, which has been marked Byrne Exhibit 3. It is a

5 one page document, office of the Vice President, Washington,

6 dated April 30, 1986, entitled "Briefing memorandum for

7 the Vice President."

8 (The document referred to

9 was marked Byrne Exhibit No. 3

10 for identification.)

11 0. You have seen this document before?

12 A. Yes.

13 ft Did you prepare this document?

14 A. I did.

15 ft And from where did yc : aet the information that

16 appears on this document?
A. v;ell, I repeated the language that I had

18 included in the schedule proposal.

19 ft Is that the way you typically do it, with a

20 meeting briefing memo for the Vice President?

21 A. Well, when it's something of this nature,

22 something as simple as this.

23 ft These briefing memorandums are usually prepared

24 a day or so before a scheduled meeting with the Vice

25 President?

ALOIRSON kCPORTINC COMPANY INC.
JO f $T NW WAJMINGTON, DC lOCOl JOJ 6]l'«)00

Hwi^AfiSifipn

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A. Yes.

Ql They follow a fairly standard form?

A. Yes.

Q. The same as the form we see on Byrne Exhibit 3?

A. That's right.

Ql Now, this memo is listed as being from Don Gregg
and it goes directly to the Vice President?

A. It goes to Tom Collamore, who is the staff
secretary.

Ol And he was then the staff secretary?

A. Yes.

Q. Do you know whether it's Mr. Collamore ' s practice

to give these memoes then to the Vice President?

A. Yes. He prepares a boc at the end of every
day and includes background materiil for meetings that will
follow the next day.

0. So basically, it would have been given to the
Vice President to read?

A. Yes, it would have.

Ql And it was from Don Gregq, correct?

A. Correct.

Ql Did Mr. Gregg put his initials on Byrne Exhibit 3?

A. No, he did not.

gi Who put his initials there?

A. That is ny writing.

AlOmSON RIPOITINC COMPANY. INC.
20 r ST N W WASHINOTON, DC. 20001 (2021 «2i-9300

UNCLASSIFIED

1 0- Did you show this briefing memo to Mr. Gregg

2 before you put his initials there?

3 A. No, I did not.

4 Q. Why didn't you?

5 A. He wasn't there.

6 Qi Had you previously signed off on briefing memoes

7 for the Vice President without Mr. Gregg seeing them?

8 A. Yes.

9 Qi In which cases did you feel you had the authority
10 to do that?

Ti A. Well, in cases where it was a matter of fact

12 situation, where I knew that it was a meeting that I had

13 enough information to provide a memorandum that would meet

14 the requirements for the next day.

15 Qi And the information tha-. appears on Byrne

16 Exhibit 3 you took directly from E.rne Exhibit 1?

17 A. Yes.

18 Ql Did you show this briefing memorandum to anybody

19 before you sent it to the Vice President?

20 A. No .

21 Ql Now, Phyllis, do you recall whether the Vice

22 President's office responded in any way to this briefing

23 memorandum?

24 A. I don't understand your question.

25 gi Did you get a call or did Mr. Gregg get a call

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asking about the purpose of the meeting after this
memorandum was sent to the Vice President?

A. I don't believe so.

Q. Not to your knowledge?

A. Not to my knowledqe.

Q. When was the last time you discussed either this

briefing memorandum or Byrne Exhibit 1, the schedule
proposal, with anyone in the Vice President's office?

A. Well, I guess I looked at it yesterday and
talked to John Schmitz about it and Doyd and Gii^gq .

Q. Have you spoken to Mr. Gregg about this dodument

in the nast?

A. Yes, we have. V'e've examined it. It was
discovered bv Mr. Gregg when we v/°re exaunining our files.

Q. Did he ask you at that time about — what did

he ask you at that time about eit.er the briefing memorandum
or the schedule proposal?

A. I don't believe he asked me anything.

Qi Well, what did you talk about when you found
the documents?

A. Well, we were selecting documents that applied
to the document request and this was one of them. And it
was brought to his attention at that time.

Ol Did he say anything when he saw the document,
either the briefing memo, Byrne Exhibit 3, or the schedule

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proposal, Byrne Exhibit 1?

2 A. Well, we knew that it contained lanauaae that

3 was beincr questioned at the time, but I don't recall any
■* specific Questions of >'r. Gregg.

5 Ql What language did it contain that was being

® questioned?

' A. The resupply of the contras.

^ Ql By whom was that language being questioned?

' A. By counsel who had asked us to provide the

documents to them.

Ql By the Vice President's counsel?
A. Yes.

'3 Qi Did Mr. Gregg say anything about that language

to vou?

A. Ko, he did not.

Q. Either when you found the documents or at any

time after that?

A. No, he did not.

Ql Did he ask you where you got that language fron?
A. We have talked about that.
Q. And what did you tell him?

A. That it was provided to me by Colonel Watson.
23 g^ Did Mr. Gregg say anything else about that

^* language?

AlOEDSON BiPOariNC COMPANY INC.
20 F Sr NW WASHINGTON. OC ]000l 302: 62l'9)00

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Ol Did he say to you that's incorrect?

2 A. No.

3 fr Did he reaister shock or surprise that it was
there?

5 A. I don't think so. I don't recall.

6 0. Did he reqister disapproval of your having sent
either the briefinq memo or the schedule proposal?

A. No.

9 MR. BELtJICK: I have nothing further.

10 MR. LEON: Let me just ask a few questions.

EXAMINATION BY COUNSEL FOR THE HOUSE SELECT

COMMITTEE
BY MR. LEON:
Ci If I have understood yc r testimony right, this is

15 a form that you fill out weekly, ; number of them weekly,

16 right?
A. Yes.

18 Q. In fact, you probably fi.ll some out daily?

19 A. Yes.

20 0- And as I recall the chronology from the Vice

21 President's office, I believe Mr. Rodriguez only visited three

22 times with the Vice President?

23 A. Yes.

24 Qi And he might have visited on a couple of other

25 occasions with Mr. Greqq . I can't remember the exact number,

AIDIPSON REPOBTING COMPANY INC.
20 F ST NW WASHINGTON. 0 C. 20001 |202| 62t-9)00

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but it was a small number of times, is that right as far as
you know?

A. As far as I know.

Ql So he wasn't exactly a regular visitor to the
Vice President's office or to Mr. Gregg's office?
A. No .

Qi That's for sure. And you are filling out nu.ibers
of these weekly, as you have testified. I guess what I'm
having t rouble understanding is how it is you can remember
today the circumstances surrounding filling out that form
that far ago, that long ago, with so many other forms between
now and then that you have filled out.

Why is it that you can remember the circ-mstances
surroundina how vou qot the ouroose?

A. Because I went back to • notes of that day. I
use a notebook that is dated every iay.
Qi Stenographic?

A. Yes. And when I went back to my notes, I found
this, notes of my conversation.
Qi With Colonel Watson?
A. No, with Felix Rodriguez.
Q. And did that help you remember the events of that

dav'

A. Yes, it did.

Ql Now, did your notes contain any passage relating

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to your conversation with Mr. Watson that day?

A. No, no. I was typinq at that time. I was just
putting together the languaae.

Q. So I nuess what I'm trying to figure out is, as

busy as you are and all the things you are doing, how it is

you can recall that it was Watson that gave you the passage? ,

A. He was the only person there. He was the only ;

I
person in the office who would have been able to provide it, :

and it was a word that I didn't even know. It was language |
that I would not have known. i

Qi But I lust want to be sure of one thing. I-s it
that you remember him saying it to you or is it that there
was no one else who could have said it to you?

A. I recall his telling re. It's my Ecollectioo that ;

he told me.

CL I just wanted to be sure about that, because it's
been so long and I know you are doing these things all the
time. I know I fill out standard forms all the time and
I'll be darned if I can remember.

There wasn't something specific about the
conversation, was there, that makes it stand out in your

mind?

A. About what conversation?

Ql The one with Watson.

A. No.

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Q. But you do recall it.

A. Yes, r think I do.

MR. LEON: Thank you, ma'am.

(Whereupon, at 10:22 a.m., the taking of the
instant deposition ceased.)

SIGNED

AND

SWORN

before

me
198

Signature

this

the

witness

day of

•

Notary Public

My Commission expires;

ALOiasoN xpoariNc company inc

JO f ST NW WASHIHOTON. OC 30001 3QJi «]i«}00

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SCHEDULE PtOPOSAL

10:

FROM:

REQUEST:

PURPOSE:

BACKGROUND:

DATE:
DURATION:
LOCATION:
PARTICIPANTS:

REMARKS REQUIRED:
MEDIA COVEKACE:
' CONTACT:
w RECOMMENDED IT:

ICC ^RKllOCNT

April 16. 1916

DEBBIE MUTTON

DON grecg];^

VP Hcttlni with Felix Rodrlguct, •
counttrlnsurgtncy txp«rt visiting
froa El Salvador.

To briof th« Vict Pratldtnt en tht status

of tho war in El Salvador and rasuppl/
of th« Contras.

Th« Vlca Prasidant has aat praviously
with Hr. Rodrifuax during his visits to
Washington and will b« intarastad in
tha currant inforaation ha will b* abla
to provide.

Anytiaa on April -ia •t a>.

IS ainutas

OEOB

Tha Vica Prasident
Craig Fullar
Don Sragf

Nona raquirad.

Staff photographar

Don Gragg, 4213

Don Gragg

Falix Rodriguez

3SI3

UNCLASSIFIFO

MFMORANDUM
TOi

moMi

tUKJlCTi
BVlKTl

DATIi
TIMBi

LOCATION:
ATTBNDANCBi
RBMARKa REQUIREOi
PRESS COVBRAGBi

Ofna Of TMI VKI WISJOIKT
WASHINGTON. O.C

</28/86

Don Gr«9g

■'lit,

DEBBIE HUTTONy

Appwoygp VTC* P^eaiDgNTIAL ACTIVITY

Meeting with Felix Rodriguas

Thursday, May 1. 1916
11:30 a.B.-llilS a. a.

None required

Staff Photographer only

MRS. BUSH PARTlCUTIONi ^^

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DRESii
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CONTACTto)i „, Oon_Gregg_

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P.StADT
0. 4C1CHO

OFFICf OF TH£ VICI ^RCSIOCNT

WAtMINQTOM

UNCLASSIFIED

April 30, 19S6

BRIEFING MEMORANDUM FOK THE VICE PRESIDENT

Evtnt:

D«t«:

Tla«:

Proa:

Meatini with F«lix Rodriguaz
Thursday, Miy 1, 19S6
11:30-11:45 a. a. - West Wing

Don Grtgg

PURPOSE

FcllJ' Rodrigutz, t counterinsurgtncy «xp«rt who is
visiting froa El Salvador, will provida a briafing
on th« status of th« war in El Salvador and
rtsupply of tha Contras.

III. PARTICIPANTS

Tha Vlca Prtsidant
Craig Fuller
Don Gragg
Saa Watson

IV. MEDIA COVERAGE
Staff photographer

Felix Rodrigutz

3&li^

UNtUSSIFe

82-692 0-88-3

Susan A. 'larrl;

, t.-.e am.

:efcre w.-.m -.-.e fcregci-g dsposit:.or. was takar., do r.erabv zartif/
:ha- r.-.e vit.-.ess v.'-.cse tastiJicr.y appears :.r. the fsrecoir.r ds = csi-i;:

was duly sworn by Tie

nat t.-.e testiaor.v cr

said wit-ess was taker, by ne to the best of ay ability ar.d thereait=
reduced to typewriting ur.der =y direction; that said deposition 13 £
true record of the testiraony given by said witness; that I aa r.eitr.s
counsel for, related to, nor eaplcyed by any of the parties to the
action in which this deposition was taken, and f'urther that Z a-Ts no:
a relative or e=ployee of any attorney or counsel er.ployed by ahe
parties thereto, nor financially or other-wise interested in the
outcome of the action.

NCTA.^:; ?V3i:

My commission e.>raire3 d, /j / r/lO

ONCIASSIFIED

■M- $

mffs

TfflS IS A COVER SHEET

FOR

INFORMATION SUBJECT TO

Basic security requirements contained in Department of Justice Regulations
(28 CFR Pan 17).

The unauthorized disclosure of the information contained in the attached docu-
ment(s) could reasonably be expected to cause exceptionally grave damage to the
national security.

Handling, storage, reproduction and disposition of the attached document(s) will
be in accordance with ptolicies and procedures set forth in regulations cited above.

021

Partially Declassified/Released on R-/T-37
under provisions of E,0. 12356
by N. Menan, National Security Council

COPY NO,

COPIES

(This cavtr shtet u uAcUisstfled wtun trpcmted from cLustfird docum^ms)

URKASSIPir

DEPOSITION OF ADOLFO CALERO
Thursday, April 9, 1987

United States Senate
Select Committee on Secret
Military Assii-tance to Iran
and the Nicaraguan
Opposition
Washington, D. C.
Deposition of ADOLFO CALERO, called as a witness
by counsel for the Select Committee, the witness having been
duly sworn by MICHAL ANN SCHAFER, a Notary Public in and for
the District of Columbia, at 10:00 a.m., at the offices of
the Select Committee, Room SH-901, Hart Senate Office
Building, Washington, D.C., and the proceedings taken down
by Stenomask by MICHAL ANN SCHAFER, and transcribed under
her direction.

COPIES

UNCUSSIFIEO

HSTS g>\o

musswn

APPEARANCES:

On behalf of the Select Committee:

THE HONORABLE HOWELL HEFLIN

ARTHUR L.LIMAN, ESQ., Chief Counsel

PAUL BARBADORO, ESQ. , Deputy Chief Counsel

RICHARD PARRY, ESQ., Associate Counsel

LOUIS ZANARDI, Investigator

PHIL BOBBITT

DEE BENSON
On behalf of the House Select Committee to Investigate
Covert Arms Transactions with Iran:

RICHARD J. LEON, ESQ., Deputy Chief Minority .
Counsel

KEN BALLEN, ESQ., Counsel
On behalf of the witness:

JOSEPH J.PORTUONDO, ESQ.

Wood, Lucksinger & Epstein

Southeast Financial Center, Suite 3700

Mianii, Florida 33131-2369

KlASSlFe

CONTENTS

EXAMINATION ON BEHALF OF

WITNESS

SENATE COMMITTEE HOUSE COMMITTEE

Adolfo Calero

Mr.

Liman:

Mr.

Ballen:

148

Mr.

Liman:

169

Mr.

Ballen:

172

Mr.

Liman

173

Mr.

Ballen

173

Mr.

Liman

175

Mr.

Parry

175 ^ -

Mr.

Liman

177

Mr.

Ballen

180

Mr.

Liman

180

AFTERNOON SESSION:

Page 77

EXHIBITS

CALERO EXHIBIT

FOR IDENTIFICATION

No. 5

No. 6
No. 7

wm^^^^

116

172

P R 0 C E£D I N G S
Whereupon,

ADOLFO CALERO
was called as a witness and, having been duly sworn by the
Notary Public, was examined and testified as follows:
EXAMINATION ON BEHALF OF THE SENATE COMMITTEE
BY MR. LIMAN:

Q Mr. Calero, could you give us a very, very brief
description of your educational background?

A Yes. I went to grammar school back home in
Nicaragua with the Christian Brothers, to high school in New
Orleans, Holy Cross Brothers, to college at Notre Dame,.
South Bend, Indiana, and then back in Nicaragua I got a law
degree at the Jesuit University, but I haven't practiced.

I did some post-graduate -- two post-graduate
courses here and attended seminars and other things.

Q And your age is?

A Fifty-five in December.

Q And are you a citizen of Nicaragua?

A I'm a citizen of Nicaragua, yes.

Q And you are a resident of the United States?

A No, I'm not a resident of the United States.

Q You're a non-resident?

A I'm a non-resident, yes. I have refugee status
since 1985, I think.

««WS«B

ggassster

Q Now prior to the time that the Sandinistas took
over in Nicaragua were you a businessman in Nicaragua?

A Yes. I was general manager of the Coca-Cola
Bottling Company in Nicaragua, a franchise. The Nicaraguan
company, we had a franchise foe-fCoca-Cola for 25 years and I
was director of various business enterprises that grew out
of the Coca-Cola area, like automobile distributorship,
hotel, a ceramics plant, and a refrigerator plant and
various other things.

.gr-.JBjj>L.- And had you been a critic of the Somoza regime?

A Yes, I was a critic, strong critic of the Somoza
regime. When I left Nicaragua in 1982, in December 1982, I
had been for the last three years the spokesman for the
Conservative TiSsty^- 1 was jailed by Somoza in 1978 for
about a month and on a few other occasions, too.

Q And when did you leave Nicaragua?

A I left Nicaragua on Christmas vacation in December
1982 and I could not come back because there were rumors
that they were after me. Apparently my name had been leaked
as belonging to various organizations, especially the FDN,
and my home was looted by national security forces towards
the end of January 1983.

So I decided to stay out and join the FDN,
official category as a director.

Q And when did you join the FDN?

\SSWS»B

A WftT?lally as director I made an announcement here
in Washington in February.

Q In February of 1983?

A '83, yes. But I had had relations for quite some
time, as I had with other exile groups, too.

Q That's Mr. Bobbitt of our staff who just entered.
Could you give us just for the record some
description of what the FDN was and how it was founded?

A The FDN came about through a fusion of various
groups of Nicaraguans. Some of them, like Berdo Joaquim
Gonzalez, who had belonged to the Sandinista military, and
other Sandinista guerrillas, national guardsmen who were
also gathering to counter the Sandinistas, and people,
others like me, who had never had anything to do with
neither the Sandinistas nor the Somoza regime.

That was back in 1981. It acquired its name, I
believe, towards the end or the beginning. I'm not sure --
the end of 1981, beginning of 1982. It began to be known as
the FDN, Nicaraguan Democratic Force. It had a civilian
directorate and a military directorate at the time.

I was invited a number of times to participate,
but I was still in Nicaragua and I didn't want to come out.
I wanted to stay and fight inside. But by the end of 1983,
December of 1983 —

Q December of '82 or '83?

.WUiSSIEe

Mil

A ' 82y §3?L'tf>'g'Vi%Vy fl^'t^fgctorate came up, the

seven-person directorate, and a slot was left in it for me
for when I came out. And it was supposed to be in pectore.

Q What is that?

A In pectore is in the chest.

Q In the heart?

A The group decides, but it doesn't come out. And
well, of course, that leaked.

Q And that's when you left Nicaragua?

A No, no, because I found out about it in Nicaragua.

I was still in Nicaragua and I had been without a passport
for about two months, and finally one of the members of the
junta got me a visa to go out for a vacation, and I had all
the intention to go back.

Q Now, when you decided to not return and to
officially join the FDN, you mentioned that you became a
director of the FDN.

A Yes.

Q At that point, which would be the beginning of
1983, did the FDN still have both a military directorate and
a political-civilian directorate?

A Well, it was supposed to have only one
directorate, which was the civilian directorate, with one
military member, six civilians and one military. However,
in practice it actually had two directorates.

KIASSIFIED

ll««fflKT

Q And you joined the civilian directorate?

A I joined the civilian directorate, yes.

Q And was there a leader of the FDN at that point?

A No.

Q Who was in charge of the military side of the FDN
when you joined?

A Weli,^ Iifcsuld say there wa^ar ^ief of staff.

Q And who was that?'

A That was Emilio Echaverri, and also as a member of
the civilian directorate was a man with military background,
which was Bermudez, Enrique Bermudez. Militarily Echaverri
was at the head, was the chief of staff, but I would say
that Bermudez was, say, more respected or more --

Q He was b«trsr known?

A Yes, better known and more respected.

Q Now the directorate functioned as a committee?

A The directorate functioned -- I don't know what
you mean a committee.

Q Was there a chairman of the FDN at that point?

A No, there was no chairman of iha "fciN at that
point.

Q Was there a person who was first among equals?

A Well, no, there wasn't at that point. we all had
different areas of concentration. ~~'_ .^^-

Q And what was your area of concentration?

yNCLASSIFIED

mws

A My area of concentration was the political
aspects, international political aspects. I was doing more
writing than anything else. There were others in charge of
the -- I think Bermudez and another fellow, Rodriguez, were
more, had more to do with the military. Then Edgar
Chsunorro, who seems to have become feunous'^or denouncing us,
he was in charge of publications.

Q Now was the FDN founded in around 1981?

A I believe so, yes.

Q And by the time that you became a member of this
directorate in the beginning of 1983, was it engaged in
military or paramilitary operations?

A They had already -- the kickoff, let's say, point
of the organized Nicaraguan resistance is March 22, I
believe, of 1982.

Q And what marked that kickoff?

A The blowup of bridges in the northern part of
Nicaragua. One big bridge was blown up. Another was
seriously damaged. And the Sandinistas clamped down on the
civilian rights in Nicaragua. So that was the kickoff, I
would say. — - - - _^- £g^

Q Now did you have some information about what the
size of the FDN forc^waa when you joined it in the
beginning ot"^%jf jF :^

A We did not have much information.

mmmw

Q A rough figure -- 5,000?

A Two thousand, maybe -- 2,500, 3,000.

Q Now, at that point how was the military operation
of the FDN being funded?

A remember ^^^^^^^^^^^Hwere there when came

There were^^^^^^^^^^^^^^Hthere who were pare
of the training and who were also -- I understood by stories
that I was told that there was no direct involvement between
Americans and Nicaraguans. All was done through]
but I'm just talking reference.

<2 Did you come to understand at some point that the
CIA was funding the FDN?

A That was my impression, b .t it was being done

It one point, and I don't remember
how long after we were there. Then there was a direct
connection. Direct connection was established with --

Q The CIA?

A Well, I never saw -- they never showed me the
card.

Q But with the United States?

A With people working for the United States
Government, yes, whom I gather were CIA. -^f -^

Q And during this period when the United States was

directly involved who handled the procurement of supplies,
military supplies?

Yi^jU

:';0»i

mm^

A I don't know who did, but all I can tell you is
that we were handed over whatever our needs were, and there
was a ceiling. I remember talk about a ceiling which was at
different levels at different times, and I wouldn't
remember.

Q Is it fair to say that the weapons and military
supplies were given to the FDN?

A Yes.

Q And that the FDN was not involved in purchasing?

A In procurement, definitely not.

MR. PORTUONDO: Excuse me a second. Adolfo, you
have never given a deposition before, but it's difficult for
her to write down or copy when both people are speaking.
Why don't you wait until he finishes his question;
otherwise, she is going to have a very difficult time.
THE WITNESS: Fine.
BY MR. LIM^N: (Resuming)

Q How did the FDN receive the funds to pay its
troops?

A Troops were not paid as such. Some of the
officers and some of the people in different jobs who had
families tS support were given what was called family
support .

Q And where did that money come from?

A My understanding is that it came from the United

imwssifiM.

IBlKfiBfc*

states Government.

Q And do you know how that money was transferred?

A No.

Q In 1983 was there a budget that the FDN had for
paying its people?

A Well, I don't remember a budget as such. I mean,
I was not connected with that aspect of the operation.

Q Who handled that aspect of arranging for the
payments?

MR. PORTUONDO: For family support?
BY MR. LIMAN: (Resuming)

Q For family support.

A To tell you the truth, I don't remember. I know
Echaverri would get a certain amount of money and he would
in turn distribute it to different people. That was for the
military.

Q Do you know where he got that money from? That's

from the United States?

A From the United States.

Q Do you know who actually handled the transfer of
the money?

A No, sir. It would be impossible. I can tell
you --

MR. PORTUONDO: Your answer was no.
BY MR. LIMAN: (Resuming)

nmWB

k^V«« " 12

Q With whom did you deal as representatives of the
United States Government in 1983 in connection with funding
of the organization?

MR. PORTUONDO: It assumes you dealt with someone.
BY MR. LIMAN: (Resuming)
Q He indicated he had earlier.

^^^^^^H|^|head was ^^^^^^^H and also
lots of dealings with^^^H-- he went by many names. I knew
him as^^^^H but then everybody began to talk about]
ll'll remember the name later on.
Q And what did he do? What was his role?
A He was in charge of Central America or he was.
maybe project director or whatever. And then there was
another , ^^^^^^^^^1 also that we dealt with.

Q Did you deal with Colonel Steele? Did you deal

with him at all at that point?

A Colonel Steele? The name doesn't --
Q Did you deal in 1983 with Oliver North?
A Well, I met Colonel North. I believe my
'recollection was that I met him^^^^^^^^Hin 1984, but I
did not meet him, and if I did, I have no recollection.

Going back to the money, I did not finish telling
you that the directors were given also family support and
that was given to us at different times ^^^^^^^H or put
into accounts, into accounts of ours, and as far as I know I

m^ssw

mm^

can tell you about me. I don't know about the others, how
they got it.

Q In 1983 where were you living?

A I was really nowhere because I had no status
anyplace.

Q Were you spending time I

A r was spending a lot of time^^^^^^^^^H Most of
my time, I mean, I spent traveling also in other countries,
in Europe.

Q And is it fair to say that you were trying to
develop political aupfeStrt.-Xor the FDN?

A Yes, yes^ deflnl-tely^^-politica^support and waswere
trying^_C»'v.u»vinii||<>eapia''. t!JH ii^slgF, «t iHe^meraber, was
tryiner to tell the world what the Sandinistas really were,
see, because we Nicaraguans were the first to find out what
they were doing.

Q Did you know how much the United States Government

had appropriated in 1983 for support of the FDN?

A No. No, sir.

Q Oo you know what the '9K£tttMB#ces were that led

to the withdrawal of |

A No.

Q When did^^^^^^Hcome

A ^^^^^^^^Bcame in in 1983, but before^^^^^^^rame
in, when we came in as directors, let's say, there was

UNtussifia

ismi^w*

already an invention of establishing a direct relationship
between the Nicaraguans and --
Q The United States?

A The United States. Then there was no need for
this middle man.

Q I would like to mark as the first exhibit some
records that were produced by your counsel, I believe. And
let's mark as Calero Exhibit 1 a record of financial
expenditures beginning with July 1, 1984.

(The document referred to was
marked Calero Exhibit Number 1 for
identification. )
And as Calero Exhibit 2 i record in the same form
that begins with September of 1985.

(The docu.-nent referred to was
marked Calero Exhibit Number 2 for
identification. )
Mr. Calero, I'll show you Calero Exhibits 1 and 2
and can you tell me if you've seen these before?
A Yes .

Q And what are they?

A These are the monthly expenses^^^^^^^^^Band
it's indicated here what it covers.

Q And who prepared these records?

A In our office, in our finance office.

DfMsra

^mmm

Q And when were they prepared?

A They were prepared at the time of -- I mean, I
cannot tell you when these were copied.

Q Were these records prepared for the Senate

Committee and the House Committee or were they kept at the
time in this form?

A ^^|o.£«cords have been kept all along in our
offices, and they are records of all our expenditures and
there are to the point where it has been possible to keep
all invoices. We have a few trunkfuls of invoices.

Q But were these schedules here, these exhibits 1
and 2, are these schedules that were constructed from thtf'
records that you kept there?

A I would not be able to tall you.

MR. LIMAN: Do you know now these records were
prepared?

MR. PORTUONDO: No. Let "tjbUK^gtffip^ he wants
to know if whtT ^t/KBj/S/l^^^l^ ' ^^^^^^^ ^ ^^<^ Exhibit 2,
were something that you prepared for the first time to give
to the Senate Committee or are LUeae records which have been
made and kept all along when the events occurrec

THE WITNESS: These records were prepared. I
mean, these were written in order for us because we were in
the process of reconstructing everything in order to be able

KUSSW

to present an understandable record of our expenditures.
BY MR. LIMAN: (Resuming)

Q So that these are financial statements?

A These are financial statements which have been
taken out.

Q From the original records?

A From records, yes, from original records. I would
say yes.

Q And were these prepared at your request?

A They were prepared -- let me see -- I don't know,
about two months ago, three months ago. And I asked --

MR. PORTUONDO: When he says "prepared", he
doesn't mean photocopied.

BY MR. LIMAN: (Resuming)

Q Let me just see if I understand what happened
here, Mr. Calero. The organization kept records of its
expenditures.

A Yes, we have records.

Q And kept records of its receipts, correct?

A Yes.

Q And there came a time when there were inquires
made of the organization as to how much money it had
received and how much it had spent, correct?

A Yes.

Q And you can date that to the time that there were

BHCUSSIFIEP

mm\

disclosures in the United States about diversion of money
from the Iranian arms sales; is that correct?

A Yes.

Q And in order to demonstrate how the funds that you
received were spent you had drawn these schedules based on
your original records to show in an understandable form how
much money you spent each month; is that correct?

A Yes.

Q And the records from which these exhibits were
prepared are records that are|

A Yes.

Q And they were records that were made at the time
of the expenditures?

A Yes, which I have never seen.

Q And you have bookkeepers there who keep that kind
of records?

A Yes, we have bookkeepers there. In other words,
this was not drawn up every month. I mean, this was not
drawn up in July of 1984.

Q I untf^Bwnd now. Now, were "there rerords that

you received regularly that showed how much was being spent
and for what purposes? In 1983 did you receive a report
from your financial people?

A I would not see them regularly. I would not see
them regularly. But I have a record which is very difficult

ONCUSSlFiED

umssne

to understand and to follow on account of it showing
conversions and all sorts of --

Q 1 understand that. And what record is that that

you have?

A That's a record. It was a report. It's an
accounting that I have.

Q It's a report?

A Yes.

Q And who would provide you with that report?

A That report was provided by the head finance man,
Mr. Montes^^^^^^^^^^^H Oscar Montes is the name he goes
by . ^^^^^^^^^^^

Q And how often would you receive these reports from
Mr. Montes?

A Monthly.

Q And what did you do with your copies of those
reports?

A I would have them||^^^^^^^H in Miami, wherever.

Q Do you still have those records?

A I have those records.

Q Could we get copies of them?

A Sure.

Q Now if I show you these records maybe you can help

UNClASSiREO

m^^to

explain it. Let's look at Calero Exhibit 1 and the second
page in it, which is a compilation for July of 1984; am I
correct?

A Yes.

Q Could you tell me there's a heading "concepto" .
What does concepto translate to in English?

A Concept, account.

Q That's the account?

A Yeah .

Q And under that are various items which are items
of expense; am I correct?

A Yes.

Q And the first item says maintenance of personnel,
is it?

A Yes.

Q And what does maintenance of personnel represent?

A That would cover --

Q Are those the family allowances or is that some
other item?

A That would be -- let me read a little bit more.

Q Take your time. I call your attention to the fact
that there is another item called maintenance of troops.
Does the item maintenance of personnel mean FDN personnel
other than the troops?

A That includes -- this mantenimiento de personal is

DIUSSW

all our administrative and what we call family support for
officers and for air force and doctors and hospital
personnel and all of that.

Q But the largest item on this sheet is, as I read

it, for the maintenance of the troops, well, maybe it isn't
in dollars, but it's|

A ^^H^^^H

Q ^^^^^^^^M And that would be the family
maintenance allowances for the troops in the field?

A No , no .

Q What would that be for?

A That would come out of here. It would come out 'of
here.

Q When you say "come out of here", it would come out
of maintenance of personnel?

A Yeah.

Then be the^^^^^^^^^^^^^^^^B?

The ^^^^^^^^^^^^^^^^Hwh i c h
let's see —

Q It's equivalent to|

A Yes.

Q And that's under the heading of maintenance of

troops. What was that for?

A Maintenance of troops was food for troops.

Q And the second item here, it says Viaticos. What

Kiftssro

-i^cmie

is that?

A viaticos, that's per diems and travel expenses,

Q Now this schedule for July of 1984 shows, am I
correct, that the total expenditures in dollars after
translation comes to about

A Yes.

Q Am I correct that that money is the money that was

provided by the United states Government?

A No.

Q Where did that money come from?

A This money in July 1984 we began to receive money
from foreign sources. This has nothing to do with United
States money.

Q When you say you began to receive from foreign

sources, into what account were you receiving that?

A Into the accounts that you already have.

Q I believe that the substantial money that you

began receiving from foreign sources into your account began
in July of 1984.

A That's it.

Q So this money was being spent out of .the money
that was coming into the account that you maintained?

A Ye4Kai#

Q And before that, before July of 1984, you also had
these expenses; am I correct?

ptusa®

DinfiPftSisffir

A Yes.

<3 And how was that money being received?

A That was money received from the United States
Government.

Q And into what accounts were those monies put?

A They did not go into accounts rtrall. -

Q That money was disbursed directly by the United
States? ""**

A It was disbursed directly by the people who were
your representatives down there on a weekly or biweekly
basis, depending on the type of the expense.

Q And those were the people that you mentioned
earlier?

A Yes. -,--^^

Q Were you aware when you joined the FDN that the
President of the United States had authorized the CIA to
provide assistance to the FDN?

A Yes. I was told so.

Q And who told you that?
^^^^^^H his name

Q And did he have a position with the United States
Government?

A Yes. He's the one that I described as being the
project director or the chief for Central America. He, if I
remember correctly, is the one who told me that this project

\iimi®&

had the baclting of the President of the United States and
that it was being funded, obviously, by the United States.

Q And^^^^^^|^H| I gaO«¥, the name that you
were trying to think of before?

A Yes, yes. That's it.

Q Now did there come a time in 1984 before you

started to pay these expenses directly out of your account
when you were told that there was doubt whether the United
States government would be able to continue to provide
funding?

A Yes.

Q Tell me about that in your own words.

A Well, through 1983 we were seeing that our project
had many detractors, that it had bad press, that it
definitely was beginning to turn ir.to a partisan issue.

Q Dispute?

A Dispute. That the President's backing was clear.
It was clear the Republican backing was clear. The
conservative Democrats were pretty much on our side,
southern Democrats, and that we were in more trouble. I
mean, it was very obvious since 1983. And then came the
time in 1984 when there were no more funds voted, in June --
May.

Q Do you recall that as early as February of 1984 it
had become apparent that you would be running out of United

mmw

24
States funds by May or June?

A Well, I don't remember exactly now.

Q Do you remember that there was some advance notice
that the funds were not going to be sufficient to cover the
full year?

A Oh, yes. I don't remember, though, exactly when
that became apparent.

Q I can understand that. Do you remember that the
revelations about the mining of tjjpk harbor created some
outcry in the Senate?

A Yes, I remember. Yes.

Q And the House?

A Um-hum.

Q And was it at or about that time that you realized
that it was going to be very, very difficult to get
continued funding from the United States Government?

A Yes. We realized that.

Q 4'^^^HPV^^ have been a source of some concern.

A Yes, definitely.

Q You had troops who were dependent on the FDN being
able to receive money in order to subsist, correct?

A Yes.

0 And this was a cause that you felt very deeply
about, correct?

UNCUSSIFIED

fi»

25
Q And you were told that the President of the United
States felt deeply about it; am I correct?
A Yes.

Q And you were told that many Members of the

Congress felt deeply about this cause?
A I heard from them directly.

Q What plans, if any, were made to provide continued
funding after Congress' money had run out?

A Well, we began talking about our concern to very
many different people, like General Singlaub I remember was
one of the first that we saw about this and so many other
people that I would not remember. General Singlaub was like
-- we felt he was the closest person we had to us.
Q When did you meet General Singlaub?
A I think in the fall of 1983 I attended a meeting
of the Council for world Freedom -- no, no -- the world
Anticommunist League. So I must have met General Singlaub
before that time, in summer 1983, probably, at the CNP
meeting, the Council for National Policy meeting, in Arizona
I believe it was. I think I met him there.
And we have been close ever since.
Q At that time General Singlaub was not still in the

military of the United States; correct?
A No, he was retired.
Q He was retired.

'ijii/Ln^'

Yes.

Q Who did you talk to who was still employed by the
United States- Government about what other sources of funding
might be available once the official funds ran out?

A Well, just #t the time there is a meeting that has
been referred to, which I have called like a pep meeting, a
pep talk, which took place ^^^H^H^^^fwhen Oliver North
-- and I believe that's my recollection of meeting Colonel
North. ~=3«?

Q Do you recall when that was?

A June maybe. May, '84.

Q Colonel North's diaries reflect a meeting with you
on April 6, 1984 in Washington.

A In his office. I was shown that by the --

Q Independent Counsel?

A Independent Counsel. However, I said I'm sorry, I
do not recall that

Q You recall that there came a time when you did in
fact meet with General North in his office in Washington;
correct?

A Oh, yes, but that was aftei

Q So that your recollection is that you first met

him I

A Yes.

Q And then whatever meetings you had with him in

Washington were after that meeting

A Yes, because I don't remember. See, as I said, a
meeting could have taken place, but I cannot remember it.

Q When you first met North^^^^^^^^^ was anyone
accompanying him?

A Yes.

Do you remember who that was, what name?

And who else?

Clarridge, and posslbly^^^^^^Hwas there.
Now I understand how dif f icuIir~l:C is {M>-^ecall
from memory a particular date, but let's see if we can fix
this in time in terms of events. At the time that you Had
the meeting^l^^^^^^^Bhad it already become apparent to
you that funding in Congress was m trouble?

A Well, funding in Congress was in trouble since
1983. As I said, we never Jtnew if it was going to be
continued or not^-***

Q Do you remember that for the fiscal year '84, the

United States fiscal year which ends on September 30, that
Congress had appropriated $24 million? Does that ring a
bell at all?

A No. I don't thinJc — I wasn't even very much
aware of when the fiscal yea*~4B^-'*tJithe time. I was not --
I mean, I had left the United States for such a long time.

wmsro

iHKCt^P

Q Does the figure $24 million ring a bell?

A No.

Q Did the meeting ^^^^^^^^H take place before the
mining incident?

A No, after.

Q So it took place after the mining incident.

A Yes.

Q And tell us what happened at that meeting.

A Well, I mean, that's another thing very difficult
to say, but the thing was that, like I say, the way I
described it before -- and I would do the same again — it
was like a pep talk, you know, that something would come
about .

Q Who was pepping whom up?

A Well, they are pepping us up. I mean, we are the
ones who are in bad shape. And we're the ones who have our
brothers in the field, you know, under the threat of getting
killed.

Q Did they say they wanted you to continue?

A Of course, of course.

Q Did they say that you still had the support of the
President of the United States?

A And that he would keep on trying and trying, that
he wouldn't give up, that he would try and request again and
again and again.

T^KiMitB

Q Did they say that they would try to find other

sources of funds for you?

A Well, I would be saying something that I cannot
recall exactly.

Q I'm not trying to put words in your mouth. But
you were at a time when if the funds ran out you would have
troops starving, correct?

A Well, funds ran out afterwards and we got credit,
you know. Now we owe

MR. PORTUONDO: Adolfo, please listen to the
question.

BY MR. LIMAN: (Resuming)

Q It was clearly a source of concern to you to hear
that the United States might not be able to continue
funding, correct?

A Definitely.

Q And after the bombing incident you had this
meeting^^^^^^^^H am I

A Yes, chronologically it was after the bombing. I
mean, not on account of the bombing.

Q But it was chronologically after the bombing?

A Yes.

Q And it was at a time when there was doubt whether

the funding would continue, correct?

A Correct.

\SWm«B

82-692 0-88-4

Q And you did discuss the subject of funding with
them?

A We did discuss the fact that possibly -- I don't
know if it nad been announced already or not that there
would be no more mamj^d *>«* that that could is* a
possibility. I remember talking about that we would have to
go to solicit funds, to people, to countries, whatever ways
we could fund our -effort, that we would get all the help
possible in this thing.

Q Who would give you all the help possible?

And tRis was your first meeting with Colonel ,

Sir, I ha^ifcflone over ^hat before, and I have

The meeting we're talking about now»is the meeting
!t meeting with him.

Q
North?

A
said --

Q
that

Q And was Colonel North described to you as having a
particular role in assisting the FDN?

A Let ' s say I could gather that he was a newcomer
into this picture, into the situation.

Q How did you gather that?

A The fact of the way of the introduction, and also
then I had information and experience after that that he did

miAssw

iciiii

become a primary player in this thing. You see, I would say
-- I mean, he became, after a couple of more meetings with
him, I realized that he was going to be the interlocutor,
let us say, for the United States Government.

Q Now what about Mr. Clarridge? What did you
understand his position to be?

A Mr. Clarridge, we didn't see him very often.

Q Had you met him before this meeting?

A Yeah. He had been^^^^^^^^^H I had met him in
Miami, but I don't remember when -- back in '82 or '83,
sometime.

Q Did you understand that he was with the Agency?'

A Yes. That was my understanding.

Q Was one member of this group -- did one member of
this group appear to be the leader of the group at this
meeting?

o n e ^^^^^^^^^Hy o u

Q Yes.

A Well, it was Clarridge that appeared to me to be
the top person in the group, yes. And there was someone
else, but I have no idea. There was someone else, too, in
that meeting.

Q Was there someone from the State Department in
that meeting?

A I don't recall.

109

W^0SB

Q Was it Mr. Armitage of the Department of Defense?
Was it Mr. Armitage?

A I would not be able to remember that, because I
met Mr. Armitage in an occasion that seemed to me for the
first time not too long ago, last year sometime.

Q When you discussed with the members of this group
the possibility of obtaining funds from other countries and
other persons, do you recall what Dewey Clarridge said?

A No, sir.

Q Do you recall what Colonel North said?

A Well, not at that meetingi

Q Was there a subsequent meeting in which you
discussed plans for continued funding?

A We met once more.

Q When did that meeting occur and where did it take
place?

A Possibly here in Washington. I would not remember
the date. '^'^ ^I^^^H ^^ could have been

Q Maybe we can get some milestones. You remember
that in July of 1984 the FDN started to receive $1 million a
month?

A Yes.

Q And were there meetings that took place between
the first meeting you had^^^^^^^^^H with Colonel North and
the July date when you started to receive the money?

A I can tell you now. That reminds me. I gave
Colonel North, sometime in June, an account number for a
bank.

Q And how did that come about?

A Well, that came about that there was the
possibility of foreign sources helping us.

Q Who told you that?

A If I gave him the bank account number --

Q It had to be Colonel North?

A It had to be Colonel North, yes.

Q Do you remember the conversation at all?

A No, I don't.

Q Was it a telephone conversation or in person?

A No. I gave him the number in person, if I
remember correctly.

Q Was it in his office?

A In his office I gave him, yes.

Q And did he tell you at that time that he had some
good news for you, that they had gotten some money?

A No, no. Then General Secord came into this
picture too just about the same time. As a matter of fact,
I don't remember who I gave my account number to first or
how many people did I give it to. I remember giving it to
General Singlaub, to Colonel North, to General Secord. And
General Secord spoke about getting money, trying to get

UNWSSm

ymmm

money for us from, I believe,
or something like that.

Q Was that before the first $1 million came in?

A That was before. If I remember correctly, it was
before -- you see, what happened. Let me explain one thing.

What happens is this: The most important thing for me was
that our men would have food, that our men would be able to
defend themselves, that our men would not be sacrificed in
vain.

So all the circumstances, all the talks that
brought this about, I don't keep a diary. I never write
anything down. This war that I was in, you know, was
supposed to be clandestine. So all the circumstances made
it so that sometimes I would purposely not pay attention to
detail or to nothing.

Q Mark as the next exhibit a schedule that we
prepared from the bank records that you provided to us,
which are the monthly balances for the six Calero accounts
that you gave us.

A The six what accounts?

Q Well, we call them Calero accounts, but they are
the accounts that you had some authority over and they have,
as you will see, for each month the total amount of the
deposits and then the total disbursements, and then what the
balances were.

UMASSIFtfO

mmm

(The document referred to was
marked Calero Exhibit Number 3
for identification. )
For the record, the accounts are^^^^^^^f
^^^H^^^^^^^^^^^^^^^^|_^^^^^^^^^^^^^^^^^^H which was
account^^^H; the^^^^^^^^^^^^^^^^^^account the
same place, account number^^^^f-- the first account was in
the name °^^^^^^^^^^^^^^H ^^^ second account was the
name °^^^^^^^^^^^^^^^^| '^^e from

we extracted the information that you gave us the materials

is^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H in the
name °^^

The fourth account is

in the iiii l^^^^^^^^^^^^^M 'i fifth account

anothei

And the final account is a^^^^^^^^H account at the
which is also in the name of

If you look at Exhibit 3 you'll see that until
July of 1984 the amount of activity in these accounts was
very little; am I correct? Until you got the $1 million
there was very little money that either went into the
account or was disbursed.

A Look, sir, that account was a personal account.

MR. PORTUONDO: Adolf o, he just asked you

UNCLASSIFIED

something that calls for a yes or no answer.
THE WITNESS: Oh, okay.
BY MR. LIMAN: (Resuming)

Q There was very little activity.

A Yeah.

Q And so the first major activity was when you
started to get the $1 million a month; am I correct?

A Yes, sir.

Q And am I correct that it was Colonel North who
told you that you would be receiving $1 million a month?

A No, I don't remember that he told me that I would
be receiving $1 million a month.

Q Well, who told you that?

MR. PORTUONDO: It has been assumed here that he
was told that he would be receiving $1 million a month.
BY MR. LIMAN: (Resuming)

Q Well, were you told that you would receive $1
million a month?

A No. I don't remember being told that I would be
receiving $1 million a month. I remember General Secord
told me that he was trying to wor)c for a donation of between
$15 million and $25 million, and I remember that I informed
Colonel North, because I Icept him informed of all our
activities, our situation. Every time I saw him I would
tell him how we were, what we were doing, what were our

mMw

37
problems, what were everything.

And so I told him that I had received that, and I
don't remember he ever telling me you are going to get $1
million a month or you are going to get so much. I don't
remember that.

The only time was when General Secord said that he
was working on some friends to get us between $15 million
and $25 million.

Q Let's go back to Secord. When did you first meet

General Secord?

A I don't remember.

Q Who introduced you to Secord?

A I don't remember. I wasn't introduced as such. I
believe that it was through Colonel North and I don't
remember if I called General Secord or if he called me on
Colonel North's recommendation. But I do not remember. It
was here in Washington at a hotel.

Q Was the hotel one on 734 Jackson Place?

A 734 Jackson Place?

Q Does that ncune mean anything to you, sir -- 7 34
Jackson Place?

A Well, I met -- if that is the place that's across
Lafayette Park?

Q Yes.

A Okay. I met Colonel North there a number of

UNCLASSIFIED

times.

Q Where?

A In an office there.

Q Do you know was there a name on the office?

A If I saw it, I would remember it.

Q Was it called the Commission on the United States
Constitution or the U.S. Executive-Legislative --•

A Look, sir. What I can tell you is that it is --
MR. PORTUONDO: Adolf o, he is not arguing with
you. He is trying to refresh your memory. If you don't
remember, just say you don't remember.

THE WITNESS: I don't know the name of the office.
I cannot remember it. All I can tell you is it was across
the street from Lafayette Park.

BY MR. LIMAN: (Resuming)

Q Who gave you the address to meet him there?

A Colonel North, the person I was meeting.

Q And who was present when you would meet with him
at this address?

A I was offered coffee by someone who was there, but
I don't remember having anybody present there. I do not
remember if I ever met General Secord there. I do not
remember.

Q Am I correct that you do not remember the name of
the office as you sit here today?

yNCUSSIFlEO

A No. I remember clearly that it was right across
the street from Lafayette Park.

Q Did you meet him in a conference room?

A No. I think it was -- yeah, in a conference room.
There was a conference room there, and there was an office,
too, downstairs, and there was a conference room upstairs.
But I don't remember exactly. I remember meeting him in a
conference room.

Q You testified before that the operation of the
organization, the FDN, was supposed to be clandestine. Do
you remember that a moment ago?

A Yes.

Q Was the purpose for meeting Colonel North at this
place as opposed to his office in order to keep it secret?

A No, because -- I don't know why.

Q It was his suggestion?

A It was his suggestion that I meet him there, but I
after that met him in his office. So I don't know what the
purpose was. It was easier to go there because it was no
clearance and no this and no that.

Q I'd like you to probe your memory on this. Do you

have a recollection as to whether you met Colonel Secord
before the $1 million a month started coming into these bank
accounts?

A It would be --

.nv

m«6»*®

Q You don't recall one way or the other?

A I don't recall. To me it made no difference, sir,
one way or the other.

Q I'm not saying that made a difference. I'm just
trying to get a fact, and the fact is that you really at
this point, in 1987, do not recall whether you met Secord
before or after the $1 million a month?

A It could have been before.

Q It could have been after?

A Yeah. But, I mean, I remember that -- I mean, if
I were to really -- you know, I would say before, "You see.

Q That's your best recollection?

A My best recollection would.-bc l>«iore. But« 4S I
say, there are things that I just simply did not attach that
much importance to.

MR. PORTUONDO: Adolfo, Mr. Liman doesn't want to
be argumentative with you and you may get that impression.
What he's trying to do is give you certain reference points
to enable you to refresh your memory. He understands that
things that didn't have significance three years ago you
wouldn't be able to recall now because they do have
significance. He understands that.
BY MR. LIMAN: (Resuming)

Q Mr. Calero, when you started receiving the $1
million a month, did you have any discussion with Colonel

KUSSW

fiMSffffiB

North as to how long this would continue for?
A No, I did not know.

Q Had you given Colonel North any information as to
what the needs were of the FDN?

MR. PORTUONDO: He means in terms of how much
money you needed.

THE WITNESS: I would say that he had ways to know
that.

BY MR. LIMAN: (Resuming)
Q Why do you say that?

A Because he could have checked with his own
government. I remember --

MR. PORTUONDO: Excuse me. Adolfo. The question
was asked.

THE WITNESS: Look at my process, Joe. My process
is that I am thinking out loud, and you are sharing in my
recollection of my thoughts.

MR. PORTUONDO: Take your time and give the answer
then. He wants you to be as accurate as you can. He
doesn't want you to guess.

MR. LIMAN: I appreciate that we're talking about
events that occurred three years ago and that at the time it
may not have been important to Mr. Calero to remember
whether he was told something by North or Secord or by
someone else. I appreciate that he is struggling with the

wiftssife

m^mn

memory and I don't mind his taking his time with his
answers.

MR. PORTUONDO: Think to yourself.
MR. LIMAN: This is not a grand jury. It's an
effort to try to find out what happened, and I appreciate
the effort you are making and the records that you gave us.

THE WITNESS: You understand it is extremely
difficult to be able to remember things exactly and to the
best of my memory I never knew for how long we were going to
receive this. The figure that I heard mentioned clearly was
General Secord saying he was going to try to get between $15
million and $25 million.

BY MR. LIMAN: (Resuming)
Q Let me see if I can try to help again, this time
using Colonel North's diaries. Do you remember meeting with
Colonel North at the Hay Adams at any time?
A Oh , yes .

Q And where would you meet him at the Hay Adams?
A We had breakfast there once that I remember very
clearly, and we met downstairs, downstairs in the London
Grill or something. We had lunch there a number of times.
Yes, I remember meeting him there.

Q Do you ever recall meeting him at the side of the
parking lot at the Hay Adams?

A A parking lot? There is no parking lot at the Hay

KLUSSIFIED

Adaims.

Q Or the side of the park of the Hay Adams?

A Oh, that's where I referred to, the place you
called Jackson Place. That's what I referred to. Across
the street from Lafayette Park, which is the park by the Hay
Adams, is where I met Colonel North -- three, four, two
times. I don't remember how many times.

Q Now I will tell you that the first time that
Colonel North's diaries refer either to Jackson Park or to
the Park itself are an entry for June 26, 1984, which is
just prior to the first deposit of $1 million into the
account. Does that refresh your recollection at all as .to
when you were first told that money would be coming in?

A No, because, see what happens is that my
recollection of giving Colonel North my account number was
in his office and not in that place.

Q Well, the diary of Colonel North indicates that he
met you at his office on June 25, 1984, and June 12, 1984.

A In Jackson Place?

Q No, at his office.

A Maybe June 12, mayb^§g^ave him.

MR. PORTUONDO: He doesn't want you to guess.
B^||^,^|gAN: (Resuming)

Q You had three meetings with him, according to h|H
dimry, in Jun*^ -- ^o in his office and then a third at

MNMSSiFltO

Jackson Place. That doesn't refresh your recollection?
MR. PORTUONDO: As to what?
BY MR. LIMAN: (Resuming)

Q As to the time that you gave him the account
number.

A Account number? I gave it to him in his office.
That's my recollection. »»-_

-, "' Q^. D^you r't;*'^^ how much time passed between when
you gave him the account number and when the money first
came?

A No, sir.

Q Do you recall him telling you where the money yras
coming from?

A No, sir.

Q Did he tell you it was coming from a foreign
state?

A No . -T"-

the unit

procur^ent pfatCtTgilS-j^^ yoM^faanization change?

A Well% #^ore, t^^Sbuted States Government used to
supply us with weapons and ammunition and also uniforms --
if I remember correctly, uniforms and boots.

Q And what happened after the U.S. Government
funding ceased and you started to receive this money in your

UIXULhOOIl ILU

accounts?

A Then we started to buy all these things ourselves.

Q And who handled the procurement for your
organization?

A Well, it was different people.

Q Tell me who.

A The procurement of boots and uniforms and belts
and web gear was handled by my brother.

Q And where was he located? - pj, -^^
^ A._^rie>iMM located in New Orle«Ss^ I handled the
procurement of weapons and aininunition. And^^^^^^^^we
had a procurement office that handled all the food and -

purchases -^^^^^^^^^B- ^^^m^^^H
we also began to obtain things, some things.

Q Did you have any expertise in procurement of
weapons before this?

A No, sir.

Q So let's get the sequence. The United States
Government funding ends, funding starts coming into your
bade account and all of a sudden you have to become an
expert in buying weapons; is that fair to say?

A Well, there were very few things that we were
buying, you know. It was not a matter of -- it was a matter
of buying only a very limited line of weapons and
ammunition.

::i-

Q Who gave you advice on where to go to buy the
weapons and anununition?

A Well, the first procurement I got from -- I had
met a Colonel in Nicaragua, U.S. military attache. Colonel
McCoy.

Q Colonel McCoy?

A Yesi. Coloiiftl^McCoy,-. And. Colonel McCoy approached
me one time and said, you know, whenever I needed anything,
you know, I could call on him -- Jim McCoy -- and that he
had a connection with a company that could help us out.

Q Was that Gretsch World or Mr. Martin's company?

A At first I got a card from him that said R&M >
Equipment Company.

Q R&N?

A R&M Equipment Company. And when I found myself in
the situation wiieqibwe were to buy stuff ourselves, then I
called on Martin because we were in an emergency and then at
the same time also I was speaking to General Secord, who had
told me that he could -qagBB^gy tuff , too.

Q Let me give you some dates that we have extracted

from your records and maybe this will help put things in a
time frame for you. Your first purchase from Martin or
Gretsch World, as he called himself, was in August of 1984.
Your first purchase from a Secord company, according to the
re0»r<l«, was in December of 1984.

uNcussra

\,mMm

, .w - 47

A Yes.

Q And between your first purchase from Gretsch
World, which was August 7, 1984, was for ^^^^^H then you
bought in September for^^^^^^H Then there's a wire
payment in November for^^^^^^^| And then in December we
see the first purchase from a Secord entity called Energy
Resources, which is for

I tell you this -- I haven't put a question --
just to give you a time sequence from your records. So
let's start with Martin or Gretsch World. Who put you in
touch with him? Was that McCoy?

A McCoy, yeah. McCoy handled the procurement. -I
did not meet Martin for quite a wh^ie.

Q So McCoy handled the procurement. Did you tell
him what you needed, or did he find that out from the
commanders?

A Oh, no, no, no. I told him. For instance, I told
him that we needed -- the first thing, I don't remember what
exactly was the first thing we bought from him, but we got a
credit from the* f^ rifles.

MR. PORTUONDO: Excuse me, Adolf o.
BY MR. LIMAN: (Resuming)

g Th4EiMa||[^^£^K' Mr . Martin's company?

A Yes, what turned out to be Gretsch World.

Q And how much did you get as a credit?

UNCUSSIFIED

UMEMSSffil

which we

A The total amount was about|
paid in installments ol

Q Did you understand that Martin was the principal
or a broker?

A I understood him to be working for --

Q Gretsch World?

A R&M Equipment. And it turned out, I found out
later, that R&M Equipment were brokers or agents for this
Gretsch WolRd. '"^

Q How did you know how many rifles to order?

A Well, from our needs. We were having thousands of
people swarming over to us which we could not arm.

Q And who would communicate to you how many rifles
you needed?

A Bermudez .

Q And is it a fact that McCoy would deal directly
with Martin on what type of rifles you should buy and what
the price should be? Who handled the negotiation with
Martin on what type of rifles you should buy and what was a
fair price?

A We were of fered^^^^^^|G=3s. This was a purchase
of opportunity, that the rifles were in --

A No. It turned out afterwards they were in^^H
ind that they_tfeMBin bond, that they

■)-^: :. ..^-r.'

could be given credit and that the price was $300, which was
half the price of what I understood the FAL was costing.

Q Who gave you that advice that this was a good
price?

A I knew what the price of the FAL was. Oh, McCoy.
When I first talked to McCoy -- that must have been in the
summer of '84 -- I passed on his card tol

Q Who was that?

A I don't remember who it was. But I passed on the
card for them to check them.

Q And did you get a report back?

Well, not a report.

An oral report?

Yeah.

Who gave you that oral statement?

I don't remember exactly who it was,

Q And what were you told about Martin?

A That it was okay for us to do business.
Q Now during this period when you are buying the
weapons from Martin and before the first purchase from

nnwssm

\m^^

Secord, were you seeking advice from Secord on weapons?

A What happened with Secord, you see, with Secord we
put together that order months before we made the first
payment. You see?

Q The first payment was in, as I told you, December
19, 1984. What was it for? Do you remember what your first
purchase was from Secord?

A Yes. He put together for us, and it took a while
for the thing to -- ajrvnunit j

[I don't remember. I would have to
look at the records to know exactly what.

Q Do you remember how long ic took?

A A long, long time.

Q To work out the arrangement?

A Well, it took -- the ship came until April.

Q And you began paying in December?

A Well, I don't remember if I paid in December for
something else, you see, because in January and February we
got three air shipments on an emergency basis.

Q Your records, as I've told you, show a December
payment.

A Yes.

Q Do you remember when you first began talking to
Secord about supplying you with weapons?

UNMSSlflEB

A Possibly in July.

Q And do you Icnow what toolc all of the time from
July till the first of the year to get weapons through
Secord?

A That they came fron

Q And Secord told you he was getting the weapons
f rom^^^~

A Yes. He was not getting them directly; he was
getting them through a company that had connections there.

Q Did he talk to you about the fact that^^^^Hi^ould
need some end user certificates in order to make the
shipment?

A Yes, and I believe -- I don't remember exactly.
For parts of those things there were end user certificates
obtained.

^^^^^^^^^B o ne s ?

A Yes.

Q Who handled that?

A Someone ir

Q Somebody for the CIA?

A No. A friend of ours, a Nicaraguan -- a
Nicaraguan friend of ours. But I don't remember what things
needed, because I remember one thing very clearly that he
said, because it stuck in my memory. He said that the

>ell the rounds like firecrackers, that there was no

1 ♦.*

■.jLm>^

52
need for end users.

Q Mr. Calero, do you recall that there came a time
when the United States Government adopted the Boland
Amendment prohibiting further U.S. funding of military and
paramilitary activities of the freedom fighters?

A Yes, I remember the Boland Amendment. I did not
remember when it was, when it began to apply. However, I
have read.

Q You now know?

A I now know.

Q That it ceune into effect in October of 1984?

A Yeah.

Q Let me see if you recall a series of meetings that
you had in September of '84 with Colonel North and some
others. As a way of trying to give you a framework for
recollection, let me tell you what North's diary shows.

On September 4, 1984, his diary shows that he had
breakfast with you at the Hay Adams at 7:30 in the morning.
It shows that at 8:30 in the morning Mr. Clarridge, Colonel
North and^^HH|^H met you at the Hay Adams. That must
have been a continuation of the breakfast.

It shows that at 9:30 Colonel North, Mr.
Clarridge^^^^^^^^^^^^Hcontinued the meeting at the
Jackson Place office, and it shows that at 11:30 there was a
meeting in the Hay Adams lobby with you, Rob Owen, Colonel

IMSSW

mu^wB

North and Mr. Livingston.

Does that in any way jog your memory of a series
of meetings at the beginning of September?
A All those took place in one day?
Q Yes. It was just sort of one series of meetings
for you with Colonel North and these individuals after
another -- one after another.

A I remember -- I don't remember seeing Clarridge
I is _- well, I think I know who

anc

you mean. He used to go by another name.

Q what name did he go by?

A I'll probably think of it later, but right now- it
doesn't come to mind. I'm sorry, but I do not. As I've
said before, I remember having breakfast very clearly one
time or twice with Colonel North at the Hay Adams, but I
have no recollection of that particular meeting.

Q Do you recall any meeting that took place at or
about the time that the Boland Amendment was passed with
Colonel North?

A AS I said, I met him regularly. Whenever I came
to Washington I met with Colonel North.

Q Do you recall any meeting at which you and Colonel
North discussed the effect of the Boland Amendment?

A See, there was so much information on the Boland
Amemdinent in the newspapers.

iwssra

mmm

Q Did you have any discussion that you can recall
with Colonel North of the Boland Amendment?

A I cannot remember any clear conversation. It
doesn't come to mind a conversation. But, as I say, we used
to talk about all the things related to us, so I would
expect that that is something that could have come up.

Q Did your business with Colonel North continue
after the Boland Amendment the same way as before?

A Well, I continued to inform him of our situation,
of our needs, of our problems, of our successes, of our
position.

Q And did he continue to give you advice?

A Well, I remember I was aslced before about did he
ever tell you about Sandinista troops. I remember we talked
about the Sandinistas massing troops near the border, which
was something that we knew. I remember talking about the
Sandinistas getting new shipments of Soviet weapons. I
remember about seeing pictures, maybe that I saw published
in ^^^^^^^^^^^^^^^^1

Q What pictures?

A Pictures of Sandinista installations.

Q Mr. Calero, did the method of operation with
Colonel North continue the same way after Boland as before?

MR. PORTUONDO: Did you continue to have the
meetings and so on?

O^W

55
THE WITNESS: I had answered him. I continued co
meet with him. I continued to tell him all our problems,
all our needs, all our successes.

BY MR. LIMAN: (Resuming)
Q Did you continue to get funding?

A We continued to receive money in our bank

accounts .

Q Did Colonel North have a code name that he used

with you?

A Yes, yes.

Q What was that code name?

A He told me that the Soviets listened to everything
that we talked on the phone in the east coast of the United
States and that we should address each other -- I would call
myself Barnaby and he would call himself Steelhammer.

Q Do you remember him introducing you to Rob Owen?

A That's what is not clear. My recollection is that
Robert Owen was working for Gray and Company, and because I
remember the na^^Rntly, Gray and Company, and coming to
me with a proposal for public relations.

And I understood that that was on Colonel North's
recommendation. But I don't know if I was introduced to him
or he came to me with this proposal on Colonel North's
recommendation. I do not remember. And I remember,
however, that the recommendation or the proposal was not

ONCLASSIflED

taken because it was something expensive and I was doubtful
that it would look good to have our effort, which was poor,
hiring an expensive --

Q An expensive PR firm?

A PR firm, yes.

Q Do you remember meeting a Mr. Livingston with
Colonel North?

A The name does not -- Livingston? What does he
look like?

Q Let me go back to that purchase of^^^^^^Pweapons
from Secord. How did you arrive at the price that you would
pay for those weapons?

A Well, they were quoted by Secord.

Q And was Colonel North present when Secord quoted
those prices to you?

A No.

Q When you would communicate information to Colonel
North would you tell him what you were paying for weapons?

A Oh, yes. Oh, yes. I told him what we had
ordered. As I say, I kept him -- I gave him all the
information and I told him the money we have received.
MR. PORTUONDO: Your answer was yes.
MR. LIMAN: You can let him answer.
MR. PORTUONDO: I don't want him to repeat
himself.

ill^FIED

MR. LIMAN: (Resuming)

BY MR. LIMAN: (Resuming)

Q Mr. Calero, did Colonel North tell you to whom he
was reporting this information?

A No.

Q What did you expect him to do with this
information that you were communicating to him?

A That the U.S. Government should be informed of
what we were doing. We were allies and we also gave
information to the CIA people.

Q Which CIA people?

A The CIA people were always snooping. For a while
we called them the snoopers because they wouldn't do
anything for us and all they would do was look after us, you
see.

Q Did Colonel North ever say to you that he wanted
to know how you were spending the money that he had raised
for you?

A The way you put the question, sir, is --

Q Did he ever ask you to account for your
expenditures of money?

A I did submit to him three, four times, a written,
you know -- that we have purchased so much this, so much
that, an idea of what we were spending. But I never gave
him an invoice or anything like that.

Q But you submitted to him some handwritten account

mmssfiffl

\S8(!fef^il

of what you had purchased?

A Yes.

Q And how much you had paid?

A Yeah, approximate, because it was all from --

Q From memory?

A From memory, yes.

Q And was it handwritten?

A Yes.

Q And when did you first submit such an account to
him?

A It must have been in 1985, beginning of 1985,
because it must have been after we got -- see, I did not put
a big order in until we got the big money.

Q The big money is what?

A The big money we got in February and March.
Before then we were getting $1 million, and then the next
month another $1 million, and we never knew if it was going
to continue, for how long it was going to be.

Q And the big money was the $24 million that you got
in February and March of 1985?

A Twenty-four and a half or 24. I don't remember
exactly.

Q And when you received that money, that's when you
began to submit these handwritten accountings to him?

A No, because before I had given him more or less an

TfRtflSS*^

idea of what were our expenditures, monthly expenditures.

Q How did you give him that -- orally or in writing?

A Well, I must have orally told him about it, and
then sent him or given him figures of what we were spending.

Q Did you mail them to him or hand them to him?

A That's a hard one. I remember mailing a few
things to him, but I don't remember what. I remember
mailing him cartoons that would appear that were funny.

Q I'm going to ask you about this.

A I don't remember exactly, sir.

Q Was it given to him on a monthly basis?

A No, no. Not on a regular basis we didn't giva an

accounting.

Q Now after what you call the big money came in in
February and MarciFof-H985^ on how many occasioflB did jfou

^ -^^^H|Bii^^^^elieve .

Q And that showed how you were spending the money?

A That showed how much we were, yes. It showed what
we had gotten, what we were about to get.

Q In equipment or in money?

A No, in equipment. Just gave him. I don't
remember telling him, you know, we got so much money, but i-r
remember telling him, giving him the handwritten -- so many
this, so much of that, so much of that.

msM'B

#^yP

Q Where do you remember giving it to him?

A Where? In his office I gave it to him.

Q Did he ask for it?

A We'd start a conversation, you know, and then it's
so difficult to determine if he asked or I offered, you
know. We came to the conclusion that it was good for him to
have that. I think it was good to have, and he wanted to
have it. But, you know, it's very hard.

Q Mr. Calero, did you write that out in his office?

A Yes. I believe I wrote it out right there on a
piece of paper. I believe I did.

Q And did you observe that he then had that piece 'of
paper typed?

A No.

Q Did he ever give you a typed document that
reflected the amounts that you were spending?

A No.

Q Going back to the purchase that General Secord
arranged from UKt^^^^^^ was that the very first
transaction you had with Secord?

A Yes, that was the very first.

Q And what steps did you take to make sure that you
were getting the best price?

A Well, I had gotten price indications, but more
than anything else I trusted that a retired general of the

KIHSSIFO

wmim

61
United StAtes Amy, who had, according to what he had said,
helped us secure money and had our best interests would be
giving us prices that were good.

Q What money did he tell you that he had helped you
secure?

A Well, the money that we were getting.

Q Which money — the $24 million?

A This money that we began to get in July.

Q General Secord told you that he had helped get
that $1 million a month?

A No. Well, he didn't say that. He was going to
help us get between $15 million and $25 million a month."-
MR. PORTUONDO: Listen to his question.
BY MR. LIMAN: (Resuming)

Q Mr. Calero, in July you began to get $1 million a
month; is that so?

A Yes.

Q And do you recall that then in February and March

you got this $24 million-$24. 5 million? You recall that,
don't you?

A Um-hum.

Q Now did General Secord at any time tell you that
he had helped get either the $1 million a month or that $24
million to $24.5 million?

A Specifically he didn't say I helped you get $1

Lncc

82-692 0-88-5

lill»Hl

-— — 62

million a month.

Q Did he ever say he had helped you get that money?

A He said that he was helping to get the money.

Q Who did you thank for getting the money?

A No one.

Q You never thanked Colonel North?

A No one.

Q You never thanked General Secord?

A No one, because he didn't tell me I put so much in
there. I just never thanked anyone.

Q Colonel North never discussed with you that you
were getting $1 million a month?

A Sir, I told you that I used to keep him informed
of what we were doing, but I never knew. Nobody ever told
me you're going to get so much, you're going to get $1
million a month, and then so much and so much. No one ever
told me that.

Q Before that $24.5 million arrived in February and
March were you told that substantial deposits would be made
in your account?

A Well, I was told when I gave my account numbers to
Colonel North and to General Secord, my understanding was
that I was going to be getting money.

Q But that's not quite the same. Did anyone tell
you you were going to be getting approximately $24 million

BmmSSW

mmm

in February or March?

A No. The one I remember saying that, I'm trying to
get between $15 million and $25 million, the one that I
remember saying that was General Secord.

Q Was it a surprise to you when you got a
notification from the bank that $24 million roughly had been
deposited?

A I was really happy.

0 I have no doubt that you were happy, were you
surprised?

A Well, if being surprised and being happy are
associated.

Q Well, you can be surprised and be unhappy, right?
You agree with me on that?

A I was surprised and happy, then.

Q You were surprised?

A Yes, I was. I would say I was surprised.

Q No one told you that you could expect deposits of
$24.5 million?

MR. PORTUONDO: In addition to what you have
already testified to about General Secord.
BY MR. LIMAN: (Resuming)

Q General Secord told you he was going to try to
raise money.

A Try and get between $15 million and $25 million.

mm /lecj

100

But he never told you he had succeeded; am I

Q
correct?

A Well, I mean he might have led me on to believe
that what I had gotten had been through his efforts, you
see.

Q After you got the money did you say to General
Secord I have received the money?

A Well, I told him, yes. And I said now we can sit
down and put in a good order, becauf« the order we had put
in before was accumulating. And how yoti esked me about
prices, how did I know about prices. I will tell you how I
just remembered. - ^.

Wft made a. bvfiHSt£^ '^"^ "*

Q Who's "we"? -. — .

^^^^^^^^^^^^^H made a budget!

and^her^ was T Sdq^ia&d* ^
we w«Ee ijfilfirf tn nifffrj^^w^<tt!l^'yi|Mq|tg**SL*'°""^
kind of thing. So Z uS«d th^Pas my guJ«Hil._jai^^ waSaery
happy when I found out that we were- pay ii^ up to 24 cents
for the linked ammunition, referring to our budget, and 18
ceiits for one rofflid of anmuni$Jbn. ~ :i. Z. " *

"^ 'And then- "
costed 7.S;^eTrty per round fS^er tftsn 18, aaS tjy^links
were free, and that we could link them, and we could obtain

fit Hritfc;.aniPutvfcfci<^r^ ge^f romi

mihmm

101

mm^

anmunition for about one-third of what the U.S. Government
people were budgeting it at. -r; - ^.

Q When wits «hia bu(lf»» prepared? .-^ •
A Oh, it must have been the end of 1983— We should
have a date- '" .-»^,^^ -~-.

Q Do yojt have it? ^r ^-'

A I will look for it.
Q Could you produce it?

A we'll look for it. I remember seeing it in a pile
of papers not too long ago. If I find it, which I think I
will, it must have been prepared the end of '83 or beginning
of '84. I don't remember exactly when, but I will look for
it. Would you jot that down?

MR. PORTUONDO: He'll remind us when it's over.
BY MR. LIMAN: (Resuming)
Q Was there a U.S. representative by the name of
Masterson?

A Masterson?

Q Yes, whom you consulted -- Masterpool?

A Oh, Masterpool. I mean, I met him two or three

times.

Q Who was he?

A He was a consultant, a volunteer consultant.

Q For whom?
A For us.

r^nv

102

A Yes. And he was in our base camp. I saw him
there three times, four times.

Q Did he advise you on procurement?
A No.

Q Did you discuss with Colonel North the fact that
you had gotten the $24 million?

A I told him. I informed him about it.
Q Did Colonel North tell you before that money was
received by you that it would be coming?
A Not to my recollection.

Q Mark as the next exhibit a document signed
Steelhammer, addressed to My Friend, and it appears to be a
draft with handwritten markings on it.

(The document referred to was
marked Calero Exhibit Number 4
for identification. )
A I read about that in the paper.

Q Would you look at this and tell me whether you've
ever seen this document before, including at the Independent
Counsel's office?
(Pause. )

MR. PORTUONDO: It's a three-page document, but
you can answer the question that's pending. And that is,
did you see this at the Independent Counsel's office or have

liillASSiFIED

103

«ERSS!FSD

you seen this before?
(Pause. )
BY MR. LIMAN: (Resuming)

Q Have you seen it before?

A No, sir. I mean, a letter like that -- I mean, it
has many points with which I am familiar.

Q But do you recall whether they were communicated
to you in writing?

A In writing, that letter I do not remember seeing
it.

Q Did you ever receive a letter signed Steelhammer?

A Not to my recollection.

Q Did you ever receive any writing signed
Steelhammer?

A Well, I remember one. I got a little one of these
index cards, but I didn't get it from him.

Q Tell me what that was.

A It contained a ncutie, a Cuban-American that wanted
to meet me in Miami and gave me his name and a phone number.

I mean, that I remember.

Q And when you say you didn't receive it from him.

A Well, the secretary gave me one time --

Q Fawn Hall?

A Yeah, a piece of paper with the name of a person.
I mean, I didn't attach any --

uNMSsra

104

ll.Lftl

Did you ever see the name Steelhammer written out?

MR. PORTUONDO: As opposed to typed?

MR. LIMAN: Or typed.

MR. PORTUONDO: You just answered that it was on a

card.

BY MR. LIMAN: (Resuming)
Q No. He didn't say Steelhammer was on the card.
He said there was the name of a Cuban-American on the card.
Did you ever see the name Steelhammer on a piece of paper?

A It is possible. Well, I tell you I remember right
now I got a phone call at my hotel, that Steelhammer had
called, so I've seen it, yes.
Q other'^tharTthal?

A I'm trying to think. I just remembered that one.
MR. PORTUONDO: How can you forget a message from
Steelhammer? If you remember, you'll remind him of it?
THE WITNESS: Yeah, I'll do that.
BY MR. LIMAN: (Resuming)
Q Did you ever receive any document from Colonel
North addressed "My Friend"?

A (Nods in the negative.)

Q If you loo)c at Calero EJthibit 4^ 1 Ittjl^frts^

is being delivered via a trusted courier who has no
Itnowledge of the contents but who can help carry out some of

105

what this l«tt«r 1« *bout.

Did Colon«l worth •v^r ■•nd any docujn«nt to you

vl« « courier?

A I'm trying to z*mmiatfx if I •vmx got *ny document
from Colonel Morth vie courier or directly.

Q You Ju«t don't recall?

A I don't recell ever getting a document from him.

Q If you look at thia document it aayaj

106

BY MR. LIMAN: (Resuming)

Q After those paragraphs that have the dashes in
front of them, it says: And now the best news of all. Next
week a sum in excess of --

A It's crossed out, too.

Q Next week a sum in excess of $20 million will. be
deposited in the usual account, while this must be
husbanded carefully, it should allow us to bridge the gap
between now and when the vote is taken and the funds are
turned on again.

Do you recall being given that message in
substance orally by Colonel North?

A (Nods in the negative.)

Q The answer is no?

A No, sir. I don't remember. And the way we got
the money, I remember my surprise and my happiness when the
person who was in charge of the bank account -- it wasn't me
— told me so much arrived. And for me it was all sort of
like Santa Claus, you know.

M^SW

107

mMWi

Q Were you told, Mr. Calero, that this money would
have to be conserved by you to last for some months?

A No, not for any determined period. As a matter of
fact, for me I sort of felt bad when I didn't see any more
money coming.

Q Well, were you told that no more money was going

to be coming after this?

A No, I wasn't told.

Q Do you remember that by the summer of 1985 this
money had pretty much run out?

A Yes. But then at the end is when we got the --

Q Humanitarian aid?

A Humanitarian aid. We already had -- I had
purchased -- I think I exaggerated the purchase of
anununition.

Q You stockpiled eimmunition?

A Yes.

Q And you stockpiled weapons?

A We spent almost $20 million, yes, or about $20
million in ammunition.

Q When this money ran out, do you recall that it was
at about the sununer of 1985?

A Just about, yes. It coincided --

Q With the grant of the humanitarian aid?

A Yes.

yN6LASS!F![B

108

yiiSMEBT

Q Do you recall that after this money ran out the
FDN started to receive weapons directly again?

A No.

Q Were you ever told that a group of private
benefactors were now supplying weapons directly to the FDN?

A No.

Q Were you ever told that General Secord had
arranged for the supply of weapons to the FDN?

A (Nods in the negative. )

Q The answer is no?

A No, sir. I'm sorry. I forget.

Q Were you ever told, Mr. Calero, by Colonel North
that he was not satisfied with the way in which you had
managed money that had gone into this account?

A No. I don't remember it.

Q Were you ever told that Colonel North had arranged
for General Secord to assume the management of the
procurement of weapons for the FDN?

A Well, he had done it for us.

Q Who had done it for you?

A General Secord had procured weapons for us .

Q But you had paid for them.

A Yes. Also, General Singlaub had obtained weapons

for us.

And you had paid for those?

IINCUSSIFIEO

109

DieswT

A Yes.

Q But were you ever told that instead of the money
going to you and you then paying Secord or Singlaub for the
weapons that they were going to purchase the weapons with
funds being given to them directly?

A No , no .

Q Not through you?

A No.

Q You were never told?

A No, I was never told what you are saying. I was
never told, no.

Q And were you ever told that an air strip was going
to be built

A I heard about the air strip, which I had nothing
to do with.

Q But you heard about it?

A I heard about it and I've been asked about it, and
I've been trying to think where I heard about it or how I
heard about it.

Q But, Mr. Calero, the one thing you knew was that
you were not paying for the air strip.

A We had nothing to do with

When you heard of this, did anyone tell you where

-nui^

■•.;W

the money was coming for that?

A No.

Q The answer is no?

A No , sir.

Q To your knowledge from the time that this money in
your account ran out sometime in 1985 until Congress made
available money f off- weapons again in October of 1986, did
the FDN receive any weapons?

A The weapons we purchased.

Q Apart from what you had purchased before your
money ran out.

A Not to my knowledge.

Q No one told you that there were any kind of air
drops of weapons?

A - No. Well, the air drops of weapons were weapons
of ours that were being air-dropped.

Q Who was paying for the dropping of those weapons?

A I don't know who paid for it. Let's see. I
remember that I learned about it after it had been
established and I remember that I told Colonel North about
it. And I remember saying that it was lousy service we were
getting.

Q But you were getting a service for which you
weren't paying?

A For which we weren't paying.

UNCLASSIFIED

Ill

Dimi^ffiii

Q But you're an experienced businessman, so you know
you get nothing for nothing, right?

A I am very much experienced in making a profit. I
used to be experienced.

Q Now when you spoke to Colonel North about the fact
that you didn't think that the service was good --

A I expected that he could do something about it.

Q Did you ask who was dropping this out of the sky?

A No, no. I did not inquire.

Q Did you ask who was paying for it?

A No, I didn't ask who was paying for it.

Q Did he tell you who was handling it?

A No.

MR. PORTUONDO: Wait until he finishes his
question, please.

BY MR. LIMAN: (Resuming)

Q When you complained about the service did he have
any comment?

A He probably did, but I would not remember what it
was.

Q Did he tell you Secord was handling it?

A No, he didn't say, to my recollection. He didn't
tell me that Secord was handling it. I didn't see Secord
after about the summer or fall of '85. I did not see him
again until February of '87. He disappeared from sight --

UNCLASSIFIED

112

from my sight anyway.

MR. LIMAN: Could we take a break for lunch now
and then resume? Would you have enough time if we resumed
at 1:30?

MR. PORTUONDO: That would be plenty of time.

THE WITNESS: More than enough.

MR. PORTUONDO: Can we ask now if you intend to
go -- I

MR. LIMAN: I think I need two more hours.

(Whereupon, at 12:15 p.m., the taking of the
instant deposition recessed, to reconvene at 1:30 p.m., the
same day. )

UNCUSSIRED

H *#».-. wr

113

AFTERNOON SESSION

(1:30 p.m. )

Whereupon,

ADOLFO CALERO,
the witness herein, having been previously duly sworn by the
Notary Public, was further examined and testified as
follows:

MR. LIMAN: Would you mark as the next exhibit
this document?

(The document referred to was
marked Calero Exhibit Number 5
for identification.)

MR. PORTUONDO: Before you go on to the next
exhibit, Mr. Liman, Mr. Calero and I have talked over lunch
and reflected on some of the questions you have asked him.
I think he should clarify a few things. I can go ahead and
say it and he can confirm it, and you can follow up on it.

Basically he said in regards to the issue of
whether or not North ever told him who was paying for the
air service, he told me that he recalled that North had said
to him that a private group.

THE WITNESS: But not who.

MR. PORTUONDO: And nothing else. You can go
ahead and ask him, if that will help somewhat.

He also recalls in regard to the Clarridge and

limSSlflED

114

mmm

78
North meetings, he does recall a luncheon with Clarridge and
North in Rosslyn, Virginia.

In regards to the park issue, he said he has a
vague recollection of walking with North in a park.

THE WITNESS: Lafayette Park. I don't know if we
met there or if we came out of the place and sat at the park
or talked in the park.

EXAMINATION ON BEHALF OF THE SENATE COMMITTEE - Resumed
BY MR. LIMAN:
Q I appreciate your amplification of the record and,
as I told you before, I understand we're talking about
events that occurred years ago and you've had many, many,
conversations with many people. So I'm appreciative of
that.

On the first point that was just raised, you have
a recollection that Colonel North told you that a private
group was paying for the air service.
A Ves, a private group.

Q Tell us when the conversation occurred and what
was said?

A I couldn't say when but it was at the time that
this air service was going on.

Q And what was your understanding of the air
service? what was it doing?

A It was helping us. We always had a logistic

UNCWSSIFiED

115

mmmi

problem, always. Today we have the same thing. And they
were to deliver stock that we had to deliver inside
Nicaragua.

Q And where were they getting the material that they
would be dropping?

A From our warehouses, because they would come to
our warehouse ^^^^^^^^H and they would take the stuff.
was never there. I never met the people in charge of that.
Captain Cooper was the manager of the whole thing and he was
the person that contacted and spoke to our people down
there. And he was the one who would fly the plane. But I
never met any of the people.

Q So you understood that tr.e air service would pick
up weapons or munitions that were m your warehouses ^^|

A And they would deliver thera to Nicaragua, yes.

Q And these would have been arms or munitions that
you had already paid for?

A That we had already paid for, yes.

Q Did you have any understanding that in addition to
that a private group was paying for an air service to
deliver either weapons or munitions that were being paid for
by the private group?

A No. The only thing was that we were short-shipped
in the big shipment that came from Europe arranged by

UNCUSSIFIED

116

General Secord. We were short-shipped, if I remember
correctly, M-79 grenades, 40 mm grenades.

Q Was that the first sealift?

A No, no, no. It's the second. We had two sealifts
from Secord.

Q And so you were short-shipped in the second one?

A We were short-shipped, yes, and we were short-
shipped that, and I believe C-4 also. And I wouldn't know
what else. And those things came at some time. It must
have been in the late fall,

Q Of what year?

A Of '85.

Q But that's what you had already paid for?

A Yes, what we already paid for.

Q But so far as you know, Mr. Calero, all of these
weapons or grenades or ammunition that you received, the FDN
received, were paid for?

A Were paid for yes, by us.

Q Were paid for by you. And you have no knowledge
of Secord delivering you weapons that were paid for by
others?

A No , sir.

Q The second thing was a recollection that you have
of a meeting in Rosslyn, Virginia with Dewey Clarridge and
North. Tell me about that.

wussm

117

A Well, it was like for, you know, an old times'
sake meeting.

Q When do you place the date of that?

A I would not venture, but it was after Mr.
Clarridge -- after he had left the service in Latin America.

Q And was it after the CIA had been excluded from

support for the freedom fighters?

A Well, when is your date?

Q I would put that date as October of '85.

A Yes.

Q October of '84.

A It was after that date, but I don't know if the
meeting was in '85, the lunch was in '85 or '86.

Q And what do you recall being talked about at the
lunch?

A How things were, you know, how things were going.
Like I say, it was more he wanted to know, apparently, how
we felt, how things were, the long way we had come. You
know, how we had survived and that kind of thing*) -- how we
were doing. It was just -- I would call it an old times'
sake meeting as far as Mr. Clarridge was concerned, yes.

Q 'B^ yeiFrenaro^lpr^lJ^tJting idJDd^tthAj; m««Lh|R. the
walk that you had with Colonel North in LafayetCe Park other
than that you walked there? r^Ji

UNWSSSe

118

Q Were V*tt walking from one place to another?

A You see, what happened was this. I was probably
staying at the Hay Adams because I used to get a place
there, or the other hotel I used to stay at at that time was
the Carl#ton, the Sheraton-Car l»ton. That was right, you
know, very close to each other. And the Old Executive
Office Building was on the other side of the park, and I was
on the other side. So I remember that maybe it was we came
out of this Jackson Place and walked in the park.

But I remember talking to him in the park.

Q Going back to the period of 1984 when the first $1
raillSjn, the first monthly $1 million, what discussiorts did
you have with any representatives of the United States
Government i^out how ytfu «»Ould be able to manage, now that
you had to handle the procurement rather than the United
States Government?

A I find no answer for that.

Q No recollection?

A No SEllection. TmeS^^ just got into this.
As you can see from the items listed there, there were not
very many items that we had to get, you know. It was not a
very complicated matter.

Q But you had never bought a weapon before 1984?

A If you see who we bought weapons from, we bought
weapons from a former colonel who I knew before.

UNDUSSffl

119

Q That is?

A McCoy. A former general that was introduced
somehow by Colonel North.

Q That's Secord?

A Secord. Another former general whom I had met
before. General Singlaub. So I was very much afraid of the
arms because I had heard a lot about the arms dealers and
arms merchants.

Q So you chose people whom you considered to be

trustworthy and whom the United States Government had
recommended?

A No, no. -' ■*■-■-- — ^~"-;

0 McCoy wST'tfecommended?

A Well, no, McCoy was not recommended.

Q I thought you said that you checked on McCoy.

A I checked on McCoy.

Q And you checked on Secord?

A And they said nothing against McCoy and Secord I
had met.

Q Through North?

A Through North. So, I mean --

Q That was a good recommendation?

A The f a^^%if' thfy 'twere former American officers
was, for me, a recommendation. I was not afraid to enter
into this type because I had read a lot about these arms

120

DiPiWe^

dealers that were, you know, not very good people and all of
that. But I felt good with these people -- best of all,
I'll be very frank, with General Singlaub.

Q Mr. Calero, did North ever say to you that he
wanted you to deal with Secord?

A I don't recollect, but I dealt with Singlaub after
I had dealt with North, and there was no objection, I would
say. I didn't feel that I was forced to deal with Secord,
but I felt in a way that if he had helped to get us money,
if he had gotten us materials in^^^^f before, I could,
although I felt best, as I say, with General Singlaub — I
mean, I had a lot of confidence, blind trust, in him. "-

Q Were there any inciden<:s with Secord that gave you
any reservation about doing business with him?

A No. But I did not feel as good, let's say, with
him as I felt with, let's say, with General Singlaub. The
more contact I had with him, the more I appreciated him and
liked hiffl.

Q What was it about Secord that -- you are having a
difficult time verbalizing it and it's there.

A Maybe his ways, his personality.

Q I don't know him, so maybe you can describe it,
the way he dealt with you.

A Maybe too self righteous. I don't know. I mean,
it's one of those gut feeling* thtft-wne f^ about people.

UNWSSiaED

121

mmm

you know. So if you compared the two, as I said. General
Singlaub and Genen£L^Jt«qpp4., I m««n,. General Singlaub was
all heart as far as I'm concerned, and I didn't think the
other one was that way.

But -- maybe General Singlaub one time made a
remark -- I'm trying to recollect. I don't want to put
words in General Singlaub 's mouth he didn't say.
MR. LIMAN: Off the record a moment.
(A discussion was held off the record<4
— jy MR, LIMAN: (Resuming)

Q Did Secord ever express to you any dissatisfaction
with the way that the FDN was running its operation? -

A No, because he didn't know how we were running our
operation. But I remember now that he told me, when I told
him that I was going to buy some rifles and some things from
General Singlaub and I told him the price -- not from
General Singlaub. General Singlaub had friends that were
going to get them for us, and I told him the price. He told
me, well, he's never going to be able to deliver that. He
said something like that. He won't deliver or it's
impossible.

Q The price was too low, according to Secord?

A Yeah, the price was too low.

Q Did you ever have to negotiate price with Secord
where he came in at one price and you negotiated it down?

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122

UNSBlMir

A I would always try and get better prices.

Q Did you ever succeed or did he give you a fixed

price?

A Most of the time I would say he would say he would
try and get a better price, and I believe he might have in a
few items.

Q Let's look at this schedule. Exhibit 5. Have you
ever seen this before?

A I believe, if I remember correctly, I wrote this
longhand. That's what I referred to.

Q And this is the document in longhand that you gave
to Colonel North; am I correct?

A I believe so, yes.

Q And I will tell you that this document was typed

in Colonel North's office. That's Exhibit 5.

I'd like to review it with you. The first heading
is independent acquisition. Does that refer to the items
that you acquired through Martin?

A Yeah. These items were acquired through Martin,
the rounds and the magazines, I believe. Let me see. where
did I get those? That must have been it. But the rounds
were ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H and
^^^^^■hand grenades came to us, and the^^^^H-- I mean, it
was a very close figure to^^^^Hbut apparently I just

rounded.

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123

ymssra

Q ^^^^^^^^^^^H3-3s , they came to you? They were
delivered to you?

A To us, yes.

Q And if we look down to the next item, it says

airlift number one, February 1985. Now, do you recall from
whom you got airlift number one?

A This was airlift number one, airlift number two.
Apparently there are only two airlifts here, but I believe
there were three, but it could be only two. Or maybe two as
of April 9. Those were Secord.

See, what happened was we were waiting for the
srder that took a long, long time and delayed -
immensely, and we caime to a point where we couldn' t^^^^^^H

ind ve needed urgently
ammunition. And so we got these two airlifts.

Q Now those were obtained from Secord. Sealift
number one, which is an April arrival, do you remember where
you got that?

H^^Hl That's

Q And that was from Secord also?

A Yes, Secord. Yes, sir.

Q Now was sealift number one negotiated with Secord
in the summer of 1984?

A Sealift number one?

Right.

iWSSffl

124

A Oh, yes, it must have been negotiated sometime in
August, I believe.

Q In August?

A Yeah.

Q Was that your first transaction with Secord?

A That was the first transaction with Secord,
although, of course, coming from a shorter distance and by
air the other transactions, the airlift came before the
sealift.

Q And that's because the sealifts were slow in
arriving?

A We used to call itl

Q And sealift number two also came from Secord?

A Also came from Secord, yes.

Q And what was the origin of those weapons?

A It was various origins. As you see, HK is German,
Hauklan and Koch, AK magazines are Iron Curtain. The GIP-3
rifles are German. The M-79 grenades are U.S.

Q And where was the ship coming from, do you recall?

A I have no --

Q Was this a European ship?

^^^^H^^^Hj^^^^^^B That's was

Q Now if you look at this schedule, the items
airlift one, airlift two, sealift one and sealift two are

iwsssffl

125

wmm^

all Secord purchases, correct?

A Yes, sir.

Q And then the first one is called independent
acquisition. Do you see that?

A Yes.

g Was that word "independent" your word?

A I don't recall if it's my word or not.

Q Do you know why you would refer to that as

independent?

A No, sir. I don't know if that is my word, if I
put that down or not. This was taken off from something
handwritten by me.

Q Now there was also a sealift of material that came

from Singlaub, right?

A Through.

Q Through him. I'm not suggesting that General
Singlaub was the principal. He —

A Arranged it.

Q Arranged this. And when did that come?

A That came, if I remember correctly, right after
this other one.

Q Right after the May one?
A It must have come in July-August.
Q And where did that come from?
A That came from!

KUSSifiEB

126

iiNai^f^

So you were able to get weapons and ammunition
from^^^^^^^^^^^^^^^^^^^^^^^^l fron
and from Western Europe to help you in your struggle with
the Sandinistas.

A And the easiest thing to do is to get
weapons because they are anxious to sell.

Q To get the hard currency?

A To get the hard currency, yes. And]
thing. I was invited to^^^^pby some]
but I was afraid.

Q I don't believe that you are afraid of anything,
given the difficulties you've had to go through.

A But they are unnecessary risks that I'd rather not
take.

Q Was the person who invited you to gol

A No, no. I don't remember. Some man. I wouldn't
remember his name.

Q While we '.re still with this exhibit, as I
understand it you used the money that had come into your
account to purchase these weapons as well as to provide for
the maintenance of the troops and the organization during
the period of the cutoff.

A Yes.

Q And you bought more weapons than you immediately
needed in order to stockpile them?

127

A Yes, in order to have sufficient amount of
weapons, and the last purchase I made was more on account of
the fact that it was such a good price that, you know, I
wanted to take advantage of it.

Q And that was the purchase that was arranged
through General Singlaub?

A Through General Singlaub, yes.

Q And did you at any time after you had completed
these purchases and before the United States Government
funding got turned on again in the fall of 1986 ever ask.
Colonel North to arrange for more purchases of weapons?

A No, sir. He did not arrange for these purchases.

Q Did you ever ask him to arrange for any purchases

of weapons during that period after you had run out of money
and before the government funding got turned on again?

A No. I mean, I remember discussing with him the
nea^M*^|^^gBmnV^V^«HMWi=lMf^^e«lse the
helicopl^^stS^^^really -- the beginning of September of
'85, August -- well, August or September of '85 -- the
Sandinistas began to make heavy use of the helicopters, of
the MI-24S. "^

Q Those are the Hinds?

A The Hinds, yes. So we talked a number of times
about ground-to-air missiles, the need we had -- you know,
how urgent that was -- but we just talked.

\iHtmsm

128

Q Did you ask him to help you yet thero?

A Well, I roust have. I must have. I don't remember
how I worded it, but I must have. I told him of the urgenqr
of our need, of the necessity of those things.

Q What was his response?

A I'd sure love to. I wish you had them. I'd sure
love to be able to do something.

Q But you didn ' t get them?

A No, we didn't get anything.

Q Did you ever discuss it with Secord?

A No, because, see, I didn't see Secord from that
time on, until I found him at the Independent Counsel. v i
discussed — the one that I discussed this more with was
with Martin, whom I had met, and he did try to get them for
us, but it was very, very difficult.

I talked to General Singlaub about getting ground-
to-air missiles, but then we had no money. And I remember
that the package -- these were SA-7s, and we were more
interested in the blowpipe. The SA-7s are heat-seeking and
we had been told that the Hinds had these heat deflectors.
So, you know, we were thinking about blowpipes. But the SA-
Ts, I remember ,. cost at the time some figure that was
quoted. And then I got quotations, I got letters from all
sorts of dealers — $160,000 for three state of the art,
they would call them, start of the art, the latest Soviet

WmSintB

129

\m^

ground-to-air missiles -- three missiles and one launcher.
$160,000.

So that was a lot of money and we didn't have
money then. We didn't get any more money after that.

Q After the money stopped coming did you ever ask

Colonel North why it had stopped?
A Well --
Q Or anyone else?

A I'm working from memory. See, you have to know my
personality. I wouldn't come to anyone and say, you know,
give me money. I mean, for me it's very difficult to do
that. I must have said, my God, I wish we were getting
help. I mean, we're not getting r.elp. Nothing has come.
Maybe that was my way of asking. Then General Singlaub, I
remember, at some point took a trip and I was more relying
on maybe that General Singlaub could do something, took a
trip to ^^^^^^^^^1 and talked to friends
that he had, very good friends]

AndMH^H

And^^^^^H But he wasn't given the support.

Support from whom?

The support from his government.

Which government?

From this government, the U.S. Government.

He told you that?

UNCLASSiriED

130

A Yeah, he told me he was not given support, that he
had talked to his friends and everything, but they would
wait for some kind of a signal, which apparently they did||
not get. And that's why he was not successful in getting
the money.

Q Did General Singlaub ever tell you he was being
cut out?

A Well, I remember that General Singlaub told me
that he had been told by Colonel North to stay away from
him.

Q To stay away from whom?

A From Colonel North. That I remember.

Q Did he tell you why?

A Too much high profile or something. I would not
recall exactly, but he told me this. He told me I haven't
seen Ollie in months.

Q Did he ever say to you that North preferred
dealing with Secord?

A No, no. I don't remember it being put in those
words, no.

Q You didn't see the two as rivals for supplying the
liberation forces?

A No, no. I did not see the two as rivals. And, as
I say, I'm buying from one. I went and bought from the
other, and I felt that I had absolute freedom to do that.

KUSSW

131

And I would not know if they were pleased or not pleased,
and I didn't ask.

Q But chronologically at least after you bought from
Singlaub the money stopped -- chronologically at least.

A Yes, chronologically. Chronologically it stopped.

Q Now I'm going to ask you to search your memory for
what you thought at the time. Did you associate the end of
the funding with the fact that you had done business with
Singlaub?

A No, sir. I did not associate it because the last
money I got was in March and Singlaub, I started dealing
with him maybe in May, June -- May I think it was. Was it
in May?

Q Our first record of payments to General Singlaub
for shipments that were arranged by General Singlaub would
have been April 26, 1985, which would have been $2 million.

And then -- ^^^^c^^m

A Three million three?

Q Three million three in May.

A Well, that's it.

Q And on that the reference is "to be picked up by

Claude". Do you know who Claude was?

A No. That's expecting too much from me.

Q I didn't know whether that was a code name.

A Well, it was for them. This was done this way.

WIKSSW

132

You know, they gave me an account number and the
indications, and I would order my lawyer friend to send
money to such and such a place, and that was it. But now
that you mention it is the first time that that has come up.

Q Were you purchasing for just the northern front or
also for the southern front?

A Well, we did not purchase for the southern front
as such, but we supplied the southern front.

Q With money?

A With money and with ammunition and weapons. We
made a few flights. They are filmed. One air drop is
filmed. There was more propaganda in the south than we '
were.

Q Let me go back to some documents. Over the period
of the account we notice that there were payments of some

some-odd to

Q And that was for the southern front. Your account
also indicated that there were travelers checks totalling
some^^^^^^^^^l What were they for?

A The travelers checks we used to send -- first
before we got this thing rolling, before we made contacts
that would make transfers through accounts in the States and
deliveryi^^^^^^^^^H we would do most of our business

isii^ssro

133

through travelers checks, and we would do a lot of the
purchasing with travelers checks, too.

But then we started to use -- see, we had a
currency broke i^^^^^^^^fv^ho had a bank account in the
States. We did it through various ones. Then we would
deposit in the States and they would deliver^^^^^^V in
lat the parallel rate, which always higher. And
then travelers checks we used for -- it was a very
convenient way and we were not charged for them by the bank.

Q When did you last see Oliver North or speak to
him?

A Late October or the first of November that T saw

him. And then ^'^^l^^^^l ^"^ °" '"^ ^^^ bac)<^^^|
in Miami I was ambushed, as I said, by a crowd of
reporters who, you know, said what do you say about the gun
money.

Q About the diversion -- so-called diversion?

A The diversion of money, about Colonel Poindexter
resigning and Colonel North being fired. And that was very
shocking to me, really. That night, after I went to some
newscasts and everything, you know, because they were all
after me, I came home and I called Colonel North at the
National Security -- what do they call it -- SIGNET?

Q SIGNET?

A SIGNET, right, which was a very easy number. I

134

this day -^^^^^^^^

Q And what happened?

A And he answered the phone and I said, Ollie, I'm
shocked to hear what's happened and I feel very deeply and I
pray to God that everything will turn out all right. And I
don't know of any money. And he said, well, thanks buddy --
he used that word, "buddy" -- thanks, buddy. Things will
come out all right and God bless you. Via con Dios, he
would say all the time, via con Dios. And then that's the
last time I have talked to him.

I've been told, that I could see him or talk to him
because it's not against the law, but I have not done at.

Q Did you ask him in the conversation about this so-

calLed diversion of funds?

A I said, I don't know anything about this. I told
him I didn't know. I didn't ask. I said I don't know about
anything. I haven't gotten all -^^^'iiffl«g'^'at they say I
got. I haven't gotten any money sine*

A "1 had cfotteB~$l-iliSIi«B".

Q Right, but not big money.

A Not big money, no nothing. And I don't know what
he said, but he was not very talkative. I imagine he must
have been -- and he said, you know, everything will be all
right. This is crazy, all this money. And I believe he

NCLASSiFlEO

135

used these words: this is all crazy. Or something like
that.

And then he said things will be all right and via
con Dios, or something like that. And I don't remember
exactly.

Q Did you ever meet Admiral Poindexter?

A Yes. I met Admiral Poindexter. First, he came
into Mr. North's office one time when I was there, I
believe.

Q When?

A I don't remember. And then when I saw the
President.

Q when was that, what year?

A We saw the President the first time in April, I
believe. It was in April '85.

Q What was the meeting about?

A He met with the resistance, the Nicaraguan
resistance and it was a protocolary thing, I would say. And
then we met him again after the vote when he told us --you
know, it was a pep talk.

Q This was the vote --

A The vote that we lost.

Q The vote that cut off the funds in 1984?
A No, no. I never met -- in 1984 I never met the
President. The first time was in 1985, I believe. I'm not

UNClftSSinfil

136

HgSSCIHET

100

too sure. And then I think we lost the vote -- no, no, when
we lost the vote in 1986, because soon afterwards we won the
vote.

Q This is when the House first voted against?

A When the House first voted against.

Q Against the aid.

A It was almost a public meeting, you know.

Q Now Poindexter was at one or another of these
meetings with the President?

A Yes.

Q Did you ever have any discussions with Admiral
Poindexter?

A No. I don't remember having much of a
conversation with Admiral Poindexter, no. I don't remember
ever seeing him alone or anything.

Q Did you know Mr. McFarlane?

A Yes, I know Mr. McFarlane. I believe the first
time I met him was^^^^^^^^^f and I had about a 20-minute
talk with him.

Q Was that in 1985?

A No, 1984.

Q And was that when he made a trip just before the
inauguration of the President for the second term? Do you
remember that, January of '84?

A January of '84? I don't remember when it was. I

yNMSSlFIED

137

m^WB

101

remember that he was

Q Do you remember what he said?

A I did most of the talking. I mean, I remember him
as a very tight-lipped man, not very talkative, and he
wanted to know how things were. And I told him. i
explained to him our situation and our position. I think
that must have been sometime in --

Q It was in January of 19847

A It was in January?

Q Yes.

A He was not there after.

Q Did you also meet him after? I know you mentioned

January of '84. How many times did you meet him^^H

A Once. I only saw him once.

Q January of 1984?

A I met him in January 1984, and then I saw him
again here once, twice, three times. When we saw the
President the first time he was there. Then I don't know if
I met him before or after I met with him.

Q Did you talk to him about getting more funding?

A I talked to him about our needs. Definitely I
must have told him our needs. Oh, yes. But that was --
let's see, I'm trying to think if it was in both meetings.
I'm trying to remember when. You see, I must explain to you

vyhi"

138

lA^iJ 102

so you know my situation, that I never tcept -- you saw my
appointment book. You know, I started writing in it and
then I just let go on it and never wrote another, and then
for one year I didn't buy a memorandum again.

0 Did Mr. McFarlane ever talk to you about arranging
for funding for the Contras?

A I have read. After that I have read that he had
something to do with^^^^^^^^^Bor something, that he had
been offered something, but I am trying to think. As I say,
I found him not very talkative and he would listen. Maybe
he did say in that January meeting, you know, we will see
what we can do or something like that. But I don't renember
any exact. I would be putting words in his mouth if I told
you that he told me this and that or if I left a meeting
with him real happy, I would remember it.

Q And you do not recall any separate meetings with
Admiral Poindexter, as I understand it.

A No. I do not recall any.

Q And in your meetings with the President of the
United States, these were meetings which were group
meetings?

A Group meetings, yes, sir.

Q And those were meetings in which he pledged to try
to get support for your cause?

A Yes, vital support. He asked for it.

WUSSifO

139

mmm

103

Q Let me go back to November of 1984, which was

right after the Boland Amendment ended U.S. aid. Do you
recall telling any United States representative at that time

had ceased to support the

No, because they never supported us before. In

1984J

Q Yes. Had they provided ~ari^ttchnical support?
A No, sir. I remember talking to a man named^^^HH
I think his name is one you have a copy of ; he was the

asking him for help, and he said well, we'll see. You know,

a situation ^l^^^^^^m^^^^^^^^l

^^^^^^^H But we'll see. Maybe with medicine we can
start, but we never got anything from them.

Q Bid you ever trf^il^get any t»lp frwn^

This thing can be
done again, et cetera, et cetera. And then he said I don't
know what we can do.

Then one time he called me back. I don't know
precisely the dates. He called me -- yes, he called me in,
I believe it was, '85. No, in '86 he called me, in April of

140

104
'86. I remember because in April of '86, I will never
forget, that's when we had our internal problems. And he
called me to come to Washington. I was very enthusiastic
and when I came to Washington he told me he was about to
retire and that he was going to set up a company and wanted
to do business.

So I said, okay, sir, we'll take anything on
credit, you know,

Q You should have shown him your bank account at
that point.

A And then he said, well, that's very difficult and
I think we would require letters of credit. So it came -to
an end.

Q Let me ask you, let's go back to November of 1984.

Do you recall learning in November of 1984 that the Soviets
had delivered the Hind helicopters to the Sandinistas?

A Well, I recall talking about the Hinds arriving,
you know.

Q Do you remember talking to Colonel North about it?

A Oh, yes.

Q Do you remember telling him that you were upset
that the CIA hadn't warned you that these helicopters were
arriving?

_; A Well, I complained many times -- I don't remember
if it was in November -- that we would get no help from the

E'LllSSire

141

rGBMStfiED

105
CIA and that the CIA only served their own purposes and that
they would want to snoop on u*i^nd try to find out what we
were doing and whatgJrfe were thinking even, and that they
would give us no help at all?="^^

And I remember complaining, but I don't remember
the times that I did, nor do I remember when I did it.

Q Am I correct that the reason that you would
communicate this to Colonel North is thaC- he appeared to be
sympathetic to you?

A Yes, he was definitely sympathetic. I don't know
if you know Colonel North, but he seems to be -- he's a very
dedicated person. He has a warm -- I mean, you know, .you
can't help liking him and appreciating him. And he was very
sympathetic, yes. And he would have ears for us, you know,
for our crying, I would say.

Q Did you ask him to provide you^^Mi any

intelligence so that you c4^||||MMtroy these helicopters?

A ^''^^^^'^K^S^^ that, but the helicafHMfltf
everybody knew wmf'Jaf^e ManaiJ>t jj^jP^jbecause people
would see them there, and we knew they were there, and we
knew that they were building the airport in Punta Wette and
that when that airport in Punta Wette was built that had
underground storage that they would be transferred, and that
the best thing would be to destroy the helicopters on the
ground like the Viet Cong used to do.

UNClASSiFIED

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106
t '-J ^
But we didn't have the expertise. Yes, we talked.

Q Did he provide you with any intelligence on that?

A That's difficult. I will tell you one thing, sir.

This I know for a fact, that we never did, we never did any
military action -- because I don't know what intelligence is
and I don't know what general knowledge ij in many ways, and
I don't know what's sensitive. I don't know what is not
sensitive. I mean, I couldn't judge that. .^^

But I can tell you one thing. We never took any
action on accowrtt of"'~any information -^rovAdlid by Colonel
North, whether it was intelligence or just plain information
or just —

Q Did Colonel North ever tell you that he couldn't
help you in any request you made because of United States
law?

A He would sajflwwHFJjflfewas always on the edge. I

remember he didn't use that word, but -- -"y*jTll

Q You mean U.S. law?

A Yeah, that's what he referred to -- being --

Q On the edge?

A On the edge. In other words --

MR. PORTUONDO: Walking a tightrope? :~
THE WITNESS: Yes, walking a tightrope or, how
would I put it -- that he was conscious of a law and then he

was trying to --

UNCLASSIFIED

143

BY MR. LIMAN: (Resuming)

Q Walk right up to the edge?

A Yeah, that was my -- I mean, I don't know in what
word he put it.

Q But that was the substance of it?

A Of what he said. I mean, he could have made that
comment a few times.

Q What were the occasions on which he made that kind
of comment?

A I mean,_he made it, I don't know, a few times --
three, four times, or five. I don't know.

Q But what kinds of requests by you would provoke
that kind of comment?

A You see, sir, again I did not come up and say give
me this or give me that or do this for me. I don't
remember. I just explained our situation, our problems, our
quest7~aflfa there are many ways to skin a cat, like you say,
and there are many ways people have of expressing
themselves. And I have never been one to go and extend a
hand and say give mSTgive me.

So maybe the way I talked, I don't know if you can
gather anything about me by the way I talk here. I mean, I
try to cooperate. I try to tell you the truth as I remember
it. I will not say something I don't remember or that I
cannot recall as a fact. But each one has a way of

DNCiSSaB

144

108

expression. Maybe because my father was a writer I tend to
go off.

Q Do you remember any kind of statement you made

that led him to say I'm on the edge?

A Maybe any kind of a statement he said. Right this
very minute I'm not able to.

Q Do you recall at all in the end of 1984 thatfl^^B

I-- had stated that
it would not go forward with the arms sale that had been
arranged for you?

A There were difficulties involved.

Q Do you remember what those difficulties wer&?

A No.

Q Do you remember that the shipment was supposed to
be tc^^^^^^^^^^^^^^^^Hdid not want to send any weapons

A There was something about^^^^^^^^^l The ship did
come^^^^^^^^^Hand everything was fflfppedl

Q But do you know who arranged to overcome those
obstacles?

A No, sir. I only dealt with J36ner»J^^copd on .!I"
that. I r^moqjl^ pSt thtre were delaxa^^*^! re«^ei_s<xn«
talk with General Secord about the end users. The end users
were necessary only for a few of the items, and I don't

UNCLASSIFIED

145

SECRET

109

know, I don't recall if he did provide end users from some
other placs because m^^f^^Hweren' t, or if the ship had to
go to another place or was routed to another place and then
diverted. I don't remember that.

Q Do you remember being asked to pledge to recognize

I if you gained power in Nicaragua?
A No. I wouldn't have done it. I don't remember.
I mean, I'll tell you one thing. If it takes an offer like
that, you know, a political offer which one not necessarily
has to comply --

Q You would have done it?

A It does represent something for us. I mean, - then,
you know, politicians make lots cf offers.
(Laughter. )

MR. PORTUONDO: Present company excepted.
MR. LIMAN: Let the record reflect that there's no

comment.

Branch.

Q
you wit
A

SENATOR HEFLIN: You're speaking of the Executive

( Laughter . )

BY MR. LIMAN: (Resuming)

Did General Singlaub ever arrange any meetings for
to get arms?
never ant^^^^^^^^^^^^^^m met^^^^l

I forgot to tell you before, when I talked

WUSSIflEO

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110

here. I visitec

Q Who arranged that for you?

A I went t

Q Was that arranged by General Singlaub?

A No, no. to^^^^^^^^Hmyself .
there myself and I identified myself to him.

Q Anything come of it?

A No. You would have seen the money reflected.

Q Now you talked before about getting blowpipes to
deal with the helicopters that the Sandinistas had just
received front the Sovl«c Unioiu Did you jyer make a trip to

Ye*. At.pna time I was

ealivd
^v|^e goin^^d 9Bt* >** -"

Q Blowpipes?

A _- ^b¥. '.Th«3(^ were goifi^ to 9ti* us the projectiler"
and se^gMi)ptT»~Tlr-^jfrgf-^ i*^^^ blowpipe the IraiwMr Js
more expensive.

Q Do you remember they were asking $15,000 each for

DNWSSife

147

the launch^

A I think it was more. I think it was $25,000. And
so I went^^^^^^^H you know, to see what this thing was. I
was ^^^^^^^H

Q What happened!

A Well, I didn't see anyone. The one who had
offered it to this other officer of the FDN was away.

Q So nothing came out of that trip?

A No. I mean, I made a deal with

Q Who?

we were going to buy stuff ^^^^^^^^| and he was going to
supply some of it, and some of it would come from the
government manufacturing plant there. And I even sent some
money ts

Q If

A No, in^^^^^^^^^l But then the whole thing f.<;ll
through and so I didn't buy anything fron

Q Did you get your money back?

A Oh, yeah. We ordered the money --we didn't get
it bacHT; but we ordered that the money ^^^^^Hhad received
be sent to another Swiss bank for a Secord payment.

Q How much money did you send to the|
accounts?

A I don't know if it was $600,000 or $300,000,

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148

M0^^

112

Do you remember when that was?
That was in December.
December of '84?
Yeah.

And who introduced you toj
When I came here --
He in^^^H?

He was in^^^H. This FDN man had already made
all| those visits.

Q How does he spell his name?

And what nationality is he?

Now do you recall discussing with Oliver North any
of the problems in trying to get blowpipes

A I told him about the trip. I told him about

I had offered. As I told you before, I used to tell
him everything, so I told him about this.

Q Do you recall any discussion with him about the
fact that^^^^^^^^^^B needed to get the permission of the
British in order to supply the blowpipes?

A Oh, yes.

Q Did you ask him to see whether or not he could get
you permission from the British to buy the blowpipes?

A Well, I don't know how I put it, but I remember

limASSIFIED

149

113

asking him what could be done about that.

Q And what did he tell you?

A We'll see or we'll try, or, you know, we'll try.
We'll do something -- something like that.

Q Was there anyone else in the United states
Government to whom you reported the way you reported to
Oliver North?

A No.

Q Why was it that you were reporting to Oliver
North?

A Because he was the one, he was the man with whom
we could talk. I mean, there was no one else that we could
talk to in the government the way we could talk, freely and
feel good about it.

Q Because he was sympathetic?

A He was sympathetic and he was open to listening to
us and he always seemed to have time for us. And I didn't
know anyone else besides.

Q you with^^^^^^HHat all?

A That began in -- I don't remember. His name is
Ito us. And I didn't feel the same response.!

150

mjBsatttT

114

Did he ever provide you with any assistance,

A No. He was very, very -- how would I say?

Q Wavering?

A No. You know when something's going to hit you
you go like that --

Q Evasive?

A Yeah, that's the word — evasive. I didn't feel
that talking to him would get us anyplace. But here again
he was more interested in knowing everything we were doing
but more for his information, I could tell, rather than for
using that for us, you see.

Q What about Elliott Abrauns? Did you have contact
with him?

A I don't remember when my first contact with Abrams
was. According to the press, he's not my friend. But I
don't remember when we began dealing with him. I met him a
few times and our meetings had to do more with the
international diplomatic aspect of things. It was always
group meetings. Well, I had a meeting with him, the only
meeting was in January, I believe, or February I met alone
with him one day.

:iiUSSIFI[D

151

iimmrn

115

Q Let's move to another subject. Do you remember
anything about a ship called the Monimbo?

A Is that the one we were supposed to blow up on the
high seas?

Q Or at least seize.

A I read about that. To tell you the truth, sir, I
don't remember speaking about.

Q Do you remember any ship that was coming from
Taiwan with Iranian armaments to be delivered to the
Sandinistas?

A No.

Q Did Oliver North --

A What I told Oliver Nort- -- what we were talking

Q Oliver North didn't ask you whether or not you'd

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152

iji&fSW

116

be willing to put up the money for an operation to seize a
shipment of arms from Taiwan?

A I don't recall. One time we were offered — I
will tell you why I have problems and you will laugh at this
one, too. One time a fellow from Malta who lives in
California someplace came to me here in Washington with a
proposal for me to send 300 of our men to take over Malta
and that he would give me $50 million after the operation.
So you hear all sorts.

Q I'm going to show you some^^^^^^^^Hend user

certificates and ask you if you've seen them before. Would
you mark these as the next exhibit?

(The document referred to was
marked Calero Exhibit Number 6
for identification.)

A I don't remember exactly these, but I have seen -

g You have seen end user certificates J
end user certificates?

A Yes.

Q Did you ever give Oliver North copies of
lend user certificates?

A I don't remember. I remember sending end user
certificates to General Secord.

Q In Virginia?

A In Virginia.

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153

117

Q And what were the circumstances of sending end
user certificates?

A To cover shipments of weapons and I believe I sent

directly^^^^^^^^H i j

Q Do you recall in June of 1985, which is after your
last sealift from Secord, having a meeting with Secord and
Tom ^lines in Oliver North's office? Did you ever meet
Clines?

A I met Clines, but my recollection of meeting
Clines is at the time between the airlifts and the sealifts,
but my recollection of meeting Clines is at the hotel
Carl#ton with Secord. That's my --

Q What do you recall talking about with Clines?

A He was apparently, to re apparently was Secord 's
man over there, you know.

Q In Europe?

A In Europe, yes. And we didn't talk --

Q Did he tell you that Clines was the person who had
helped to arrange the purchase of the weapons that you were
getting fron

A That was his associate, his something-or-other . I
did not have very much to do and I don't remember if I met
Clines again or not.

Q You hav« ■»» recollection of a meeting in the
office of Oliver North?

uNWSsro

154

T0Rb£g88gTL

118

A No, sir.

Q With Clines?

A I have no recollection of meeting and I believe --
I mean, I was asked that question before.

Q You were asked that at the Independent Counsel's
office?

A At the Independent Counsel, and I said I
remembered seeing -- that I did not remember seeing Secord
at North's office, but I did remember seeing Secord and
North in the CNP meeting in Palm Beach.

Q A CNP meeting?

A The Council for National Policy meeting -- the' CNP
— in Palm Beach.

Q When was that?

A I don't remember. I have been to about six of
those meetings, you see. It was maybe two years ago --
maybe a year and a half ago. I don'*- remember, sir.

Q You probably have been asked this by the
Independent Counsel, too, because you've been through this
now several times. Do you recall in November of 198 5 being
told by Oliver North that an airlift of ammunition was going
to be delayed because Secord 's planes were engaged in other
activities?

A I've been asked that question before, and I've
said no, I don't remember. I've read about that. I've read

UNCUSSIFIED

155

119

about it.

Q You saw it in the Tower report?

A I saw it in the newspaper. I haven't read the
Tower report. I haven't got a copy of it yet. Maybe I can
pick one up here. I read about that, but I don't remember
because we weren't getting anything else.

Q At that point, in November of 1985, as far as you
were concerned, you had your stockpile of weapons and
ammunition?

A Yeah, and we weren't getting anything else.

Q You had no money to buy any more.

A Um-hum. The only thing that was concerning me in
November of '85 was the famous ground-to-air missiles.
That's all I felt we needed to be able to carry on.

Q Did North ever tell you that Secord had bought a

ship for the Contras?

A No.

Q Did he ever tell you that he had bought four
planes for the Contras?

A I remember telling North about the small planes
that we got. I don't remember if there were three. And
then I remember seeing the CBS movie or newscast. It showed
Secord as being the one who bought them, and I remember then
talking to General Singlaub about the small planes, and we
weren't very happy about the small planes because, you know.

yNCL»M

156

W^^

120
they were very weak things.

Q Who paid for the planes?

A I don't know, sir.

Q Well, you had an impression that these planes
belonged to you; am I correct -- to the FDN?

A Those planes were delivered. I never received
them, of course.

Q But they were delivered; am I correct?

A They were delivered by the son of Mr. Mall, who
has his manufacturing plant.

Q And where were they delivered?

A They were delivered -- as far as I know, they were
deliverec^^^^^^^^^^l but I don't know exactly in which
location.

g And was that in 1986 or 1985?

A I don't remember, sir.

Q Do you remember that you didn't pay for those
planes?

A I remember that we didn't pay, and it was just,
you know, a private donation.

Q And you thought that these planes had been donated
to your cause, correct?

A Donated to our cause, yes.

Q And later you were told by someone that these

planes belonged to Secord?

eiL4SS!FIED

157

SSfi*

121

A No, no. I saw in a newscast. They say that he
had purchased them, that he had purchased at least one or
two of them.

Q But do you remember any argument about whether he
could take those planes back?

A No, no. I never had any argument.

Q What was your conversation with Singlaub?

A Well, General Singlaub said that those weren't the
best planes for what we wanted them, you know, that they
were not very sturdy.

Q Did you ever discuss those planes with North?

A I told him -- when they arrived I told him that
those planes had arrived, and he said, okay, fine. But I
don't remember any conversation. They were very cheap
planes to begin with. I mean, they were no big deal.

Q Was there a C-123 also that was delivered?

A No. The C-123, what I heard was in connection
with this air resupply operation that began in April of
1986, April '86 -- the Hasenfus operation.

Q And that's when you heard of it?

A Yeah, because I was traveling a lot and I never
dealt with Cooper.

Q And who did you understand was paying for that

Cooper operation?

A A private group. That's what I was told.

ONCLASSiFlEO

158

mBm'

122

Q And who told you that?

A Colonel North told me a private group.

Q Did you ever hear them referred to as private
benefactors?

A Well, maybe private benefactors.

Q Did you ever hear the term "Project Democracy"?

A No, I never heard the term.

Q Did you ever hear the term "Udall Corporation"?

A No, sir. I've read about those things afterwards.

<3 Was there any delivery in 1986 to the FDN from

A No, sir.

Q Did anyone ever tell you that there was a shipment
of eunmunition and weapons f rom^^^^Hthat was going to be
delivered in 1986?

A No, sir.

Q Mr. Calero, I will tell you that there are
references in various things that have been written by
Colonel North to this private supply network. I'll read you
something now: There are several million rounds of most
types of ammo now on hand and more than $3 million worth on
the day by ship frorn^^^^^^ Critically-needed items are
being flown in from Europe to the expanded warehouse
facility ^^^^^^^^^M Boots, uniforms, ponchos, et cetera
are being purchased locally and Calero will receive $500,000

159

123

for food purchases by the end of the week.

A We received one time $500,000, but that was in --
you have the record. Intel. In^^^^^H| there was a
warehouse. I haven't been tc^^^^^^^^in --

Q Who was paying for what was being shipped there?

A The NHAO. Vou see,^^^^^^H toward the end of
'85, was it --

Q Are you talking about when^^^^^^Hwas not
willing to accept any more direct shipments?

A Yes. So a lot of stuff went tc^fj^^^^B, And I
know -- I think NHAO paid for a warehouse in]

Q But that would be for boots and not for weapons.

A I don't know about it. I know that some shipments
went ^°^^^^^|H but, I mean, I nave no check on that. I
have no record of that.

Q As you sit here today can you think of any
conversation in which you were told that General Secord was
now going to take over the supply of weapons for your
organization and that you were no longer going to handle the
purchases?

A No, sir. I was never told that, and if that was
in some people's mentality or mind, I mean, I was not told
that.

Q Mr. Calero, are you aware in 1986 of any purchases
of weapons or other equipment for your organization or for

nntussw

160

124
UNO by General Secord or his organization amounting to about
$30 million?

A Sir, I could tell you that I couldn't be aware of
a small purchase, but a purchase like that I would
definitely have to be aware, and I am not absolutely aware
of any such purchase having been done or any such purchase
having been consulted with me.

Q In 1986 what was it costing a month to maintain
your forces?

A It reached real heights on account that our forces
came out of Nicaragua and was over $1 million a month -- way
over.

Q $1.5 million?

A $1 million-something. I can check it.

Q Where was that money coming from? Was that NHAO
money?

A Well, the NHAO money went from July -- the NHAO
money began -- no, it went from September '85 to more or
less -- it extended. There were some payments into -- there
were small payments even in July or June-July of '86. we
ran up a debt of $1.9 million, almost $2 million between
July of '86 and November -- July and October, when the $100
million -- the last week of October the $100 million began
to operate.

We still have that debt. And then we picked up

liiffiinssife

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TOP

'. ^yijiiLlssit

125

some money, wljai^y^j^iU'Wd' ^ITct^ from --

Q Miller?

A Miller, yes. Channel Miller associated things.
And that's how we kept alive. And then we had made a
differential, a profit on a differential exchange, an
exchange rate differential, which we reported to the NHAO,
and which is reported and accounted for.

Q Mr. Calero, were you consulted about whether or
not $27 million was what was needed for this humanitarian
relief project?

A I don't remember.

<3 You don't know whether or nor that figure waS
derived from discussions with you?

A I don't remember how it was arrived at, no.

g Were you able to spend the full $27 million?

A Well, we did not spend it all, of course, but -that
was'^JI^^JSjfely by -- I mean, mostly in reality it was
managed by the Nicaraguan Humanitarian ' r tljiiaiWfc Office.
We would receive the stuff and they would pay for it either
through brokers, for those who didn't have dollar accounts
in the States, or directly to suppliers who had accounts in
the United States.

Q Was that money sufficient to meet the maintenance
needs apart from weapons or ammunition of the organization
until the summer of 1986?

162

126

A Yes. The quality of the food was greatly-
improved.

Q So you weren't in a position, as I understand it,
in the winter of 1986 of saying we don't have money to feed
our troops?

A Oh, yeah. I was in the position, yes, because the
NHAO money was ending and we didn't know where or when.

Q But that would be after that money, but during the
period that you were getting it you were able to feed your
troops?

A Oh, yeah.

Q Now you were saying that you will need money- after
that money is going to stop.

A But we had family support to give to our men, you
see.

Q And where were you getting that money from?

A The family support came mostly from the money from
Channel Miller and money that had been made on the exchange
differential.

Q And was there any other source of money? Did you
get any money from Secord?

A No, no.

Q And you still had eimmunition and weapons left from
what you had managed to squirrel awcy in 1985?

A Yes. And then at one time we got a $75,000

HNf,U.SSir£5

163

f Ti

127
donation. I don't exactly know where it came from. We got
$50,000 from phone calls that I made. And that was paid to
and that money had been sent to Ann Scott,
no, Ann Stone. And $75,000 that checks that were made did
not pass through our account, checks that were paid directly
to the ^^

Q Did you ever ask the NHAO office to provide you
with funds to hire Mr. Owen as a consultant?

A We sent a letter which was signed by the three
directors of UNO recommending Mr. Owen.

Q What led you to do that?

A The fact that he knew our operations and he "had
visited with us a lot, with the :-.dians, with the people in
the south and with us.

Q You had testified to one meeting with him when you
decided not to hire the organization.

A Not to hire Gray Company. But then we felt that
Owen on his own -- he left Gray and he came to me and said,
you know, he could help us out and we did use him as a sort
of -- he knew a lot of Congressional people. He had been a
Congressional aide and he could help us in the effort of
meeting with Macomb. Congressman Macomb, and around his
office there was some kind of medical money available and he
helped us out on that.

And he came down with Dr. Chaney and made a

wicussire

164

medical survey, and also we felt NHAO was getting off to a
very slow start.

Q Did North recommend that you hire Owen?

A Well, we knew that Owen was a friend of North. I
mean, I suspected that Owen would inform North of everything
he saw down there, and apparently they were close. That was
our impression. But we were not asked, that I remember. I
was not asked, and I said "we" --me and the other two men,
we were not asked. I was asked by Owen himself, I remember,
you know, if we would recommend him.

Q Did you ever meet Bob Earl?

A Bob Earl? The name does not --

Q Can you tell me from the time that the U.S.
Government funding ended in roughly June of 1984 until
September of 1986 what did Colonel North do for you?

A Would you please repeat the question?

Q During that period what did Colonel North do for
the Contras? It's a broad question, but I'd like you to
answer it as best you can.

A Well, I felt that he was our listening post, that
he would keep other people informed as to what we were
doing, what we were needing, that he was going before
Congress giving briefings, that he would brief different
groups, that he would further push our cause.

Q Were you looking to him for military advice?

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r\VJ\

165

129

A No. I did not look to him for military advice.

Q Did you consider that he had raised the $1 million
a month that you received?

A I considered not necessarily for the $1 million a
month, but 1 considered that he was instrumental for us in
speaking out for us, that he had the credibility, that he
had the position, that he had the connections that a
foreigner cannot come to this country and talk, but a U.S.
military man or Marine who could speak well --

Q Who did you think had raised that $24 million you
received in February-March 19857

A Sir, I didn't care really much who did.

Q I can understand that you didn't care where it

came from, but who did you think had raised it-?

A Even that. I mean, my objective ..was keeping a
struggle going. I did not --

Q What would you have done if you hadn't received
the $24 million? Would you have had to close shop?

A No. We would have kept on going somehow.

Q Was the $24 million important?

A The $33.5 million. It was $33.5 million that we

got.

0 That was important?

A That was very important, yes.

Q And still you didn't inquire where it was coming

166

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from?

A No, sir.

Q Did you conclude that it was a matter of secrecy
and that you shouldn't ask?

A I thought it was a matter that the less it was
talked about the better, that I shouldn't even know, and
then I began reading. In the back of my mind I always had
this is, you know, ^^^^^^^| you know
and this, that and the other thing.

Q So that's where the money was?

A That's where the money was and that was my
feeling.

Q
A
Q
A

Q
A

took it

But no one told you that?

Except for General --

Secord?

Secord talking about talking to

5r whatever.
Did he ever mention which^^^^^^^^^^he spoke to?
Maybe he did give the name, but I don't remember.

Well, I've read his name.

Do you know whether he mentioned that?

No. I could not attest that he mentioned that.

167

131

Q Let me put a question to you that we've been sort

of going around. I gather you had a great deal of
confidence in Singlaub.

A Yes.

Q And you believed that General Singlaub was not in

this for his own personal profit.

A Yes.

Q And that General Singlaub would act in a way that
would be in the best interests of your cause.

A Yes.

Q He's a person whose heart is in what he was doing.

A Yes.

Q Was one of the reasons ihat you were giving arms
orders to Secord because you believed that Secord had raised
the money for you?

A I could have had that -- I could have felt that
there was somewhat of an obligation, maybe. But on the
other hand, you know, this did not happen over a long period
of time. It was so fast, you know.

Q But the money was fast and the orders were fast.

A Everything was fast.

Q When you gave those orders for these weapons, you
didn't even have the money in hand, did you?

A The first order from^^^^Hwe talked about it in
August. We didn't know how much money we had available, we

168

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had to wait to see if more money would come in, and that is
why you see that the payment was made later, you know. it
was being talked about and I would tell him -- I mean,
that's what my memory more or less tells me.

I would tell him, well, let's see what we get, you
know.

Q Was it a case where Secord was in effect helping
to finance those purposes of arms?

A No. He didn't help finance.

Q By suggesting at least that he was going to raise
the money for you?

A Well, undoubtedly it created a sort of link there,
you know.

Q And not a legal obligation but a sense of moral
obligation to give business to him? That's fair to say?

A Yes, or to have him do this because this is
detailed here. He acted as if he wasn't making a profit.

Q Secord acted as if he wasn't making a profit?

A Yes.

Q Did he tell you he wasn't making a profit?

A Well, he detailed the freight, demurrage,
insurance, this, that and the other thing.

Q That information you got from him that ' s on the
North schedule?

A Yeah. And then, you know, I didn't put him

mumm

169

ommm

133
against the wall and say -- because, you know, I had respect
for the person -- and I didn't say you are making a profit.

0 But you had some suspicion?

A To tell you the truth, well, yes.

Q Mr. Calero, was Secord with you when you gave the
information to Oliver North that is reflected in that
schedule?

A No , no .

Q Because as you look at this and you see how
detailed it is, isn't it clear that you had some information
with you?

A Oh, yeah, I must have had. I must have had
information because I had these details on a little piece of
paper, I remember, in squares -- very informal, very, very
informal -- because I never got any invoices or anything.

Q Where did you get that information?

A From Secord.

Q From Secord?

A Yes. And I must have had that. This information

here was from memory, but this was detailed. And this was

an estimate, the miscellaneous.

MR. BALLEN: When you say "this", that's not going

to be reflected on the record. Which was the information

from Secord? — ^ ..^i

THE WIUJESS; llSt a i i^ 1 i f t number one, the airlift
ft ■

170

iiiui.i fix ^

134
number two, the sealift number one, and the sealift number
two. This one doesn't even have prices. He had a deposit
that had already been paid in rounded figures, as you can
see, the $5 million, and then the estimated cost was $6
million. It came to $7 million or something.
BY MR. LIMAN: (Resuming)

Q Was the way in which you worked with Secord, was
that you would give him the deposit of $5 million and he
would supply $5 million worth of weapons, ammunition, and
bill you for whatever it was, so that if it turned out to be
$6 million you would pay $6 million, and if it was $5.5
million you would have paid $5.5 million?

A Yes.

Q So that you were really relying on him to act in
good faith in purchasing this equipment for you; isn't that
fair to say? I mean, there's no getting around that. You
weren't an expert in this.

A It is fmki^jjm ^m» that I was relying on the fact
that he was «^in9" in good faith, ve««LV ^ ;

Q And in fact, you know, he told you that apart from
using his expertise in getting you these weapons he was
helping you to raise the money to pay for them?

A Yes. He said that, yes.

QsS^' ff^i yet -- and this puzzles me -- yet even though
he is raising this money for you, you felt more comfortable

UNCLASSIFIED

171

W«§

■sr

135
dealing with General Singlaub.

A Well, I mean it's a matter of personalities, of
course.

Q Did you ever show General Singlaub what the prices
were that Secord was charging?

A I might have told him.

Q That would have been a natural thing,"^orrect?

A I might have told General Singlaub, yes.

Q Given the confidence you had in General Singlaub
it would have been natural to show this to him. Do you
remember any comments he made?

A I told you before that he thought that Secord was
making money on this.

Q Did you ever report that to North?

A I don't thinJc I did because this was a comment.
You know, it was gossip.

Q What was the reason that you gave this schedule to
North?

A We would inform him, as I told you before. I
would tell him everything -- what we were doing, how we were
doing, what we were buying, what we had. I mean, I would
inform him of everything -- what our situation was.

Q That's what you did, but why?

A I felt that he was our --

Q Liaison with the government?

wussire

172

mm\

136

A Our liaison with this whole world, you know. If
we didn't tell h£ifi, we didn't have anyone else to tell that
to.

MR. LIMAN: Can we take a bferak,' and then I think
I'm probably done.

(A brief recess was taken.)
BY MR. LIMAN: (Resuming)

Q I have some just names which come out of your
accounts. First, there was a deposit that was put in the
account, two of them, one on 10/23/85, the next on 10/25/85
of $200,000 -- $25,000 on one day, $175,000 on another,
totalling $200,000 -- from Lake Resources. Do you know what
that was for?

A Well, that was for our use.

Q Was that a refund for some purchases you made?

A No , no .

Q What were the circumstances under which that was
transmitted to you?

A The circumstances were that we were receiving
money, that we needed money. We were in need of money at
the time.

Q Because that was after Congress had appropriated
$27 million.

A Yes. The NHAO did not pay our logistic expenses,
many of our family support for our fighters, because that

UNClKSlFitli

173

m,m3!

137

was connected with --

0 The military?

A The military. And then our air operation.

Q Who did you ask to give money on behalf of Lake?

A To begin with, I found out that that money had
come from Lake.

Q When did you find that out?

A Well, he found it out and told me.

Q Just recently?

A Yeah.

Q Did you know that General Secord had arranged for
this $200,000 contribution?

A (Nods in the negative.)

Q Did you ever meet a man by the name of Hakim?

A No, sir. I never met Hakim.

Q Did you ever hear of Lake Resources?

A Never heard of Lake Resources until I saw it
published in the paper and then it was he --

Q Your lawyer?

A My lawyer, yes, that went through the bank
records, which he did before I did, and told me that that
had come from Lake Resources and that was the company that
had been named in the paper that day.

Q But had you at the time that the $200,000 was
received, did you know that $200,000 was deposited? Did you

ONCLASSIflED

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138

get a notification that you had received $200,000?

A Yes.

0 Did you have any information as to where it came
from?

A My impression was that it had come from Channel
associated companies. I would talk to Rich Miller. At one
point I was talking to Channel, and I worked. I mean, I
felt that whatever money the Channel organization would give
me, we had earned it, because I talked in three or four
different occasions to people, to potential donors, who
Channel had gathered. So I felt all the right to ask Miller
and Channel himself, and I told him myself many times and
even wrote a letter to Channel saying, you know, that we
needed money for that.

Our family support came to about $175,000 a month,
so that was a lot of money that was not covered by the NHAO.

Q And that money was being paid out of the accounts
that you maintained?

A Out of the accounts that we maintained, yes, plus
the earnings out of --

Q Out of your currency?

A Out of the currency, yes.

Q We noted that the account reflected payments to a
company called

^^^^^^^^^^^^H is a

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_^ 139

Q Money broker?

A Money broker, yes.

Q So that was to change dollars into local currency?

A Yes.

Q And is the same true of

A Yes, sir.

Q What about M&S Supplies? What was that?

A M&S Supply was boots and uniforms. They are the
companies that sell surplus materials and things like that.

Q And RM Equipment?

A R&M Equipment is weapons and ammunition. That's
— the last payment that I made for those rifles, rather
than Gretsch World they asked me 'o make it to R&M
Equipment, since through them was the deal. I made it and I
found since, you know, when I asked him why was that -- I
didn't ask at the time -- they said well, it was their
commission or something.

AndHH^H^^B?

political'^C^Stion In^^^^HH[and they also purchased
somefl^^^^H there for us at times, and we used to keep
that. Let's see, he was a sort of broker in the sense that
he purchased. He used to take care of expenses that we had

He was an agent?

176

mmm

140

A He was an agent of ours, yes.

Q And Hondu?

A Hondu Carib?

Q Yes.

A Hondu Carib is a transport company that
transported for quite a while merchandise that we got and we
purchased in the States and took down to|

Q And Bibbins and Rice?

A Bibbins and Rice is another one of these surplus
web gear and boots.

Q Front Line?

A Front Line is the same.

Q DIACSA?

A Those were the transfers. We made intra-account
transfers.

Q And Genesco?

A Genesco is a boot manufacturer in Tennessee.

Q That's right. Forest Surplus?

A Fowler?

Q Forest.

A Forest, another one of these suppliers of surplus.

Q And ONYX Aviation?

A ONYX Aviation. We bought a plane one time there.
$65,000?

Q Yes, you've got a good memory.

UNCLASSJHEG

177

um^fflT

141

A Well, I've been looking at those things.
Q ^Hjj^^Hj ^^^^^

^^^^^^^^His an ^^'^I^^^I^^B '^^° also
did^^^^^^^^^^^lwork for us ^^^^^^^^^H in
At one point we wanted to build up a force. A lot of people
[were asking us that we take care of it because
Pastora was crazy and there was nothing going to happen over
there if we didn't. So we started to.
Q ODOM Aircraft?
A ODOM, they sent parts.

Q And then there was a payment that we weren't able
to identify that went to the world Bank of Canada for -
$432,000.

A The World Bank? That was a Secord payment.
That's sealift number one.

Q That's sealift number one?
A Yeah. When was that? That was late fall.
MR. ZANARDI: 11/6/84.
THE WITNESS: That's a Secord.
BY MR. LIMAN: (Resuming)
Q And would the same be true of that $326,590
payment?

MR. ZANARDI: That went to a Swiss corporation, a
Swiss bank.

THE WITNESS: That's the one that I believe is the

ILni.!"U'

178

ymm

land ther

142

transferred

one that went first tc
it.

BY MR. LIMAN: (Resuming)
Q To Secord?

A To Secord, yes, because we didn't want the money
to come back. So we ordered that. That must have been in
January?

MR. 2ANARDI: December 24.

THE WITNESS: If it's December, no, it's not the
[thing. The ^^^H^fthing would have been in
January, a similar $300,000-something, a similar amount.
BY MR, LIMAN: (Resuming)

Did you ever deal with any Canadian arms dealers?
No. No, sir. We had these three main —
Martin, Secord —

Martin, Secord and Singlaub. We never had any
direct dealing with —

Q Do you remember whether Mr. Livingston was the
Canadian? You remember I referred to Livingston.
A The name really is blank for me.
Q Did you ever meet a man by the name of Olmstead,
with one eye?

A (Nods in the negative.)

Q You testified this morning that because of the
publicity that surrounded General Singlaub that Lieutenant

UNCLASSIFIED

179

yNsasw^T

143

Colonel North had indicated to you that he was
uncomfortable.

A No. I think -- well, it might have been both.
Both North and Singlaub told me that on account of -- that's
a recollection; it's an idea, maybe -- that it was best for
him not to see --

Q To see General Singlaub?
A Yeah, for General Singlaub to keep away.
Q From Lieutenant Colonel North?
A Yeah.

Q Did Colonel North ever indicate to you any
displeasure at the fact that you had done business wit,h
Singlaub?

A No, sir. No, sir. The only comment that I
remember was that of General Secord's that said that that
was not going to go through, you know, that that was going
to fall.

Q Because the price was too good?
A ^SBP^ow, yeah.
Q Did you ever meet Dutton?

A Dutton? I've been asked that question before and
another one.

Q Gadd?

A Gadd. _.. -*■ -

Q Do you. hav«_(|ny r«K>liection of me«tii>«r either of

UNCLASSIFIED

180

w&isam

144

them?

A One time X met someone whose naose I do not
remember, who offered me airplan*».' -■ ~ .y.

Q To buy? :^ - - ^s

A To buy airplanes or to lease — bi^^or lease
airplanes. -^

Q - Did you have money at that*ljne?

A No. So nothing ceune of it. And then at one time,
at the NHAO office, I met a man who had planes, who did
something for NHAO and who seemed very familiar with Central
America, but whose name I do not recall. It could have been
Gadd, could have been Dutton, could have been someone «lse,
too.

Q There were a number of payments that you made to

A One time -- those were for uniforms, for
amnunition. One was for ammunition, $155,000, I think it
was. Another one was for uniforms. And then I sent money

ti^^^^^^^H and one time we paid for some ammunitionl

So we also paid.
Did you ever pay any money to Lieutenant Colonel

North?
A
Q
A

Pay him any money?

Yes.

Well, I gave him some money, yes.

181

\mWt^

145

Q When was that?

A I don't remember when. I've never been asked that
question until now, when you bring it up. I gave him money
for some trips that he had to make or some people had to
make, but I don't remember exactly when.

Q How much?

A I would have to check that. It could have been
$40,000.

Q And was it in cash?

A No, in travelers checks.

Q Travelers checks?

A Yes. ^

Q And how would you check when you paid that to him?

A How what?

Q How would you check when you gave him that?

A How would I check? I would look for -- when I
gave it?

Q Yes.

A I would look for a piece of paper where I put down

jf -
those things.

Q_ . f^ld you do that and communicate with us? Do you

remember where it was you handed it to him?

A In his office.

Q Was it on one occasion?

IF'' No. It was on different occasions.

UNCLASSIFIED

182

146

Q How many occasions?
-^^ A Maybe four, way back. That could have been in
•85.

Q Did he tell you what it was for?

A Something connected with hostages.

Q What did he say?

A That that was going to be used in connection with
the hostlges, ^because the United States Government could
not, you know, couldn't do anything like that.

Q Was he talking about the hostages that were taken
in Lebanon?

A Yes, yes. Those hostages, yes.

Q Did you know he was working on that project?

A Pardon?

Q Did you know he was working on the project for the
freedom --

A Oh, yes. I mean, he was — he mentioned the
hostages and he said that that was going to be used for
people to travel in relation with the release of the
hostages , yes .

Q Did you ever give any money to any other employee
of the United States Government?

A No.

Q Would you please check those records as soon as
possible and let us know?

SMSSiFIE

183

UNeuts^iiOET

147

I don't have any other questions.
A I think I could do that.
Q Today or tomorrow?
A No.

MR. PORTUONDO: We don't get back until 11:00. I

know you are anxious.

MR. LIMAN: I had forgotten he doesn't keep his
records here. I've not dealt with any real person, but, by
the way, I define a real person as a person who lives
outside of the Beltway.

THE WITNESS: I believe that paper, that's^^H

I believe.

MR. LIMAN: Why don't you ask the question?

MR. PARRY: Why did you use six different accounts
for receiving the private donations?

THE WITNESS: I've been asked that before. To
begiUMifH^Miinessmen always have various accounts. In
our case, it was necessary to have various accounts because
we had to be very careful to not put all the eggs in one
basket. That was a lot of money that was in consideration,
so it was better to have it spread over banks.

And if you will see there were a lot of transfers.

You know, one time we heard that^Hwas not -- it's not a
very big bank, so we felt okay, then better we transfer
money from^Hto another account. So another account was

184

Iji^feliittr

148
opened. And then we would transfer back to^^^| back to the
^^^ because ^^^^^H were where our men had the most access
to. And then we also thought it was necessary to have
accounts in banks I

And an account of ours ^^^^^^^H was closed on
account of a letter that was sent by one who sent $30. We
never knew where he got that account number, and he said
"for the Nicaraguan freedom fighters", and then it was
closed down.

But it's usually for businessmen to have, but that
was the reason. We never had a bank account in Switzerland.
MR. LIMAN: Paul, do you have any questions?. Lou,
any questions?

MR. BALLEN: Yes, I have some I'd like to ask you.
EXAMINATION ON BEHALF OF THE HOUSE COMMITTEE
BY MR. BALLEN:
Q I want to focus your attention in March of 1985.
Did you ever at Colonel North's direction deposit money into
(account?
A No. I never did deposit any money into|
■account .

Q Did Colonel North at any time ask you to deposit
money into^^^^H account?
A

UHCLHSSIFIEO

185

So it was dropped.
Q So you never in fact -- no money was ever in fact
given to you for that purpose?

A No money from us went direct ^°^^^^|
Q Did it go indirectly?

A That I cannot -- I mean, now that you ask that
question, I mean, this is supposition, this is speculation
on my part. Could it have been that the money that I gave
to North -- did he —

-*■ I, Mft' '^attijBBMMMfcJiiill, he told you that money was going
for hostages, right?
. j;^-:4i ~7MiS WITNESS : Yes .

BY MR. BALLEN: (Resuming)
Q But he asked you for that money -- North asked for

the money?

A If I could make some money available because there
were some trips to be taken by some people in connection
with the hostages. And my answer was, you know, this money

>^,.'i 'u k<.' .. .

186

\mimm

150

is not mine. The money belongs to freedom, you know, for
whatever it can do for freedom.

Q And did he tell you how much he needed?
A I have to look at these records. I remember one
time it was $15,000 and $10,000. It must have come to
$50,000, something around that amount.

MR. LIMAN4- Jhat ' s what you're going to get the
record for.

THE WITNESS: What I have, yes.
BY MR. BALLEN: (Resuming)
Q What made you associate in your mind that that had
to do wit^

A Well, now your question.

MR. LIMAN: He didn't associate it in his mind.
He put the question of whether there was something that was
indirectly for^^^H

THE WITNESS: So it came to me. You see, you
asked me a question that brought in my mind an association.
BY MR. BALLEN: (Resuming)
Now you about ^^^^^^^^^^^H Did

■- those were broker fees for what?
No, no. He was a broker.

A currency broker? 'fel^J -siZ--::^^" "^^

Yes. I would order a deposit to be made in

■account in the United States, and^^^^^l

Uba 'j-fe---

187

151

would in turn give local currency to our mer

was he involved in any of the

was used as a broker also by the

Q
NHAO --

A
NHAO people.

Q And the money made on the currency transactions
froQ^^^^^^^^^^^^flwould any of it go rlirectly back to
you, or did all of that currency transaction go back to
NHAO?

A No, it went to us. It went to us, but we reported
it to NHAO.

Q And did you have authority to spend that in any
way you saw fit?

A No. I even signed a letter saying that that money
was going to be -- because we informed NHAO that we were
making this exchange differential, so we wrote a letter
saying that that money -- I signed it -- it was going to be
used exclusively for the same humanitarian. It wasn't going
to be used for military purposes.

Q Mr. Calero, do you know a man by the name of
Rafael ^aiiLMH.)?

A I know Rafael e«n*««5, yes.

Q How do you know him? In what context?

A Well, I met him in connection with -- I don't know

mmmm "^-'^^'^^

188

152

if r met him before or if he had been introduced to me
before in Miami, but I met him in connection with --my
formal recollection is meeting him in connection with Secord
and he traveled^^^^^^^^f for Secord.

Q When do you recall that occurring?

When?

Yes.

When did I? Sometime in '84.

And when you met him in 1984 it was with General

Q
Secord?

A Well, my recollection is of meeting him with
General Secord, yes.

Q Was anyone else present at that time?

A No.

Q And what were the circumstances of your meeting?

A The acquisition of weapons, and then Cafttero was
sent ^^^^^^^^Hto determine what our needs were with our
military men down there.

Q And which military men do you know that he might
have met with?

A Canf go? He must have met with Bermudez and
others there, you know — the logistic and different people.

Q And this would be in 1984?

A '84 or '85.

Q So the purpose of his going to meet with the

IINCUSSIFIEO

189

153

military men was to determine precisely what the needs were?
A To meet them and what our needs were, yes.

Q Did you have any subsequent conversations with

*o after meeting him that time?

A Oh, yeah. I saw him once in a while. I would say

yes.

Q JUnder .what ciccunistances would you see -him?
jV _r^th relations to what he was doing, you know, the
work that he was doing.

Q Which was?

A Which was drawing up these lists and he would
maybe bring information as to the state of the shipment and
all of that. And then we made an estimate -- he made an
estimate — but I don't recall the dates.

Q He made what kind of an estimate?

A Estimate for our needs.

Q Did he do this on more than one occasion?

A Yeah. I don't remember exactly when he went down.

Q Was his estimate of your needs, did that
correspond to what you feel your needs were?

A He did it with our military men, you see.

Q Did you review those lists that he drew up or not?

A I saw them, yes. Of course, the estimates -- what
I'm trying to think of is if there was an estimate made
after the purchase. You see, that's what I'm trying to

190

154
determine. It could have been so.

Q In other words, there could have been more than
one estimate that he made?

A Yeah. But what I'm trying to determine is if
there was an estimate after the second sealift, which I
don't remember exactly.

Q And the second sealift, that was the last delivery
from Secord?

A That was the last delivery. Well, the sealift,
yes, but remember that I had said before that there were
some thing which were short-shipped.

Q Did you ever receive the things that were short-
shipped?

A Yes. I don't know when they came, but I asked if
they had arrived and I was told yes, that they had arrived.

Q Were you ever aware of any arms being delivered to
[for the FDN?

A No, except — well, what was short-shipped went to

Q Do you recall — you said you didn't recall.
Would that have been sometime after the second sealift?

A It was after, definitely, because they were short-
shipped.

Q So it would have been either in the summer of '85

or later? - i*

Mmi^

191

155

A No, no, in the fall.

Q The fall of "85?

A In the fall of '85.

Q. Ana how large a shipment was that that was short-
shipped? What are we talking about in terms of arms, to the
best of your recollection?

A Some^^^^^^^|40 millimeter grenades and some C-
4 , maybe .

Q . Do you have any idea what the value of the
shipment was approximately?

A No, no, because it had been paid before.

Q Are you aware of any other munitions or armaments
that were shipped and stored atl

A No, because we didn't buy any. I mean, I was
aware that those grenades and the C-4 and maybe another
little thing, but very, very minor, I would say, compared to
what we had purchased, c^tb WttS^ter date. And they did
come, because I was told they had arrived.

Q Who told you?

A Our logistics people. I asked the logistic people
if they had arrived and they said yes.

Q Well, you testified earlier that the air resupply
was f rom^^^^^^^^^^^^^^^^^^^^^Band

[into Nicaragua. Is that correct?

A The air resupply was delivering weapons from our

INCLASSIRED

192

156

into Nicaragua, yes, by wai

Q Would that be from^^^^^^V

From^^^^^^^^^^^^^^^^H but
of, you know, very scant information which to me did not
matter, you know.

Q But that's what I want to inquire into. If they
were delivering your weapons out °^^^^^^^H ^^Y were they
also going ti

A That was on account of the flight pattern. The
pattern was^^^^^^^^^^^^^^^^Hand these people
had all their operations and all their people, they had
everything ^'^^^^^^^l They had nothing ir

Q Were you aware of the fact that they were taking
weapons at^^^^^^Hintc^^^^^^H for

A No. They brought in what was ours. That's the
information I had. They brought in what was ours, what we
had purchased. But as to new weapons there, I was not
aware.

Do you know a man by the name of Felix Rodriguez?
Oh, yeah.

And when did you first meet him?
I don't remember. He came to visit me after he
stopped. I was introduced to him by another Cuban-American
and he came to visit me when he stopped a shipment of two

OiSlilSSIFIED

193

157
fast boats out of the United States to the Sandinista
government on account of a law that he was familiar with,
and he brought it up to the Customs to stop the shipment of
those boats.

And then we developed a friendship. I was in
lone time with himi
And then he promised to come t<<:;^^^^^^Hto help us, but he
fell in love with -- he told me he was going to Salvador for
a while to help the Salvadoreans and then he would come to
us. And he just became absolutely taken by the Salvadorean
work he was doing and never came to us.

Q Why did he stop the shipment of the boats? .
A Why? Because he thought that those boats were
going to be used for military purposes by the Sandinista
government and they have some technical qualifications that
made it possible under the law not to be shipped to the
Sandinista government.

Q These were boats that were destined for the
Sandinistas?

A Boats that had been purchased by the Sandinista
agent here in this country.

MR. LIMAN: Allegedly as pleasure boats.
THE WITNESS: Yeah, as pleasure boats.
MR. LIMAN: But they could be used for military
purposes.

Uh'CLASSIflED

194

158
THE WITNESS: But they had some technical things
there that could be used for military purposes. I have
described him as a freelancer for democracy, this man Felix
Rodriguez. He had something to do with Che Guevarra. I met
him in^^^^^^H one time when I went tc^^^^^^H with this
same^^^^^^^^^^^^^^^^^who was going to help us -- I

excuse me, not^^^^^^^H -- a

BY MR. BALLEM: (Resuming)

Q Did he provide any direct assistance to you,
though, in your effort?

A No, no. He was going to. He was going to provide
direct assistance. He offered to participate personally and
evex^hing but , as I say^. b«.st4yed in Salvador .-

Q You are not aware, then, of any efforts he might
have made in El Salvador in your behalf?

A Well, I have read about it afterwards, you know,
that he became involved.

Q Are you pers***!^ TflWir^^^^Ijs: ,

A No. Personally aware, no. He told me to visit
him in Salvador and he told me that he was using the name
Max Gomez and he gave me his phone number in Salvador, but I
have never had the opportunity to visit with him in
Salvador, which is just as well.

Q How about a man associated with him by the ncune of

195

Ramon Medina?

A No. I never met Ramon Medina.

Q Did you ever have any dealings withl

159

A I know^^^^^^^^^^^^H I've talked to him about
maybe three times. He's been very, very much sympathetic to
our cause, always ready to help. But most of the contact
with^^^^^^^^^^^^Bhas been b)^^^^^^^^^^^^^^B not by
me. I have met him twice, three times. One time I saw him
in Miami.

Q Were you aware of any efforts he was making in
terms of the air resupply of weapons to you either
personally or through your commanders?

A I don't think I ever discussed what he was doing,
biit^^^^^^^^^^^^^His man who we could assume that if he
was there and there was something going on, he would know
about it and he would sympathize with it. I mean, that was
my impression. He has been very sympathetic all the time.

Q But you are not personally aware in any way of any
way he's been of assistance?

A I'm not personally aware exactly what he did or
how he did it, you know, because I haven't beer
in a very long time. The last time that I was there was on
transit and one time I had to overnight on account of not
being able to land^^^^^^^^^H But I didn't see anyone. I

l^-'lUiflC^filr:/!

5-ri

196

mmmrn

160

went from the airport to a hotel and from the hotel to the
airport.

Q You testified earlier to the meeting that was in

Wa a^^^^^^^^^^^^Ha t
that meeting?

A Um-ura. No, no. It was only between the Americans
and Nicaraguans.

Q Was there ever a meeting with Colonel North and
linl

A Not that I was present at.

Q Not when you were present?

A They must have met, but I don't recall ever ^
meeting with them. I saw Colonel North maybe twice or maybe
three times at the most ia^^^^^^^^^V-- twice. I can say
that I never met wittf^^^^^^Hand Colonel North.

Q And there was no discussion witl]^^^^^^Has to
him being the liaisoi^^^^^^^^^Hfor the private benefactor
network, the private group?

A No, no, "^jfag

Q That you are aware of?

A No.

Q Do you recall ever meeting in Colonel North's
office with Singlaub and Secord both present?

A No. I don't remember. That's a new one. I don't
remember.

n*)ull III

197

^mmm

161
Q Let me see if I can refresh your recollection. Do
you recall a meeting at the White House in the spring of
1985 with North, Secord, yourself and General Singlaub where
SAM-7S were discussed, surface-to-air antiaircraft missiles?
A In the spring of 1985?

Q Well, that's a general date. Or at any time. Let
me ask that question.

A At any time? I do not recall a meeting that both
of them would have been present. I mean, as I say, I have a
faint recollection of having been in Colonel North's office
and General Secord having arrived or having been there and
General Secord having arrived. To tell you the truth,. I
wouldn't swear to that because it's not clear in my mind.
And being there with General Singlaub. I remember that one
time we met the President and Singlaub was there, so we were
together in the Executive Office Building, and then we went
to the White House with General Secord and Colonel North.
MR. LIMAN: General Secord or Singlaub?
THE WITNESS: Singlaub. I'm sorry. I'm getting
all mixed up. But I do not remember ever having attended a
meeting with General Secord and General Singlaub.
BY MR. BALLEN: ^R«aiJUiing)
Q Let me refresh your recollection in a different

way about the subject matter of the meeting. Do you ever
remember discussing the purchase -- you talked about
surface-to-air missiles, antiaircraft missiles -- where

fin ^3^ k'?

198

162

Secord, where General Singlaub said he believed he could get
those and General Secord said something to the effect that
he could provide instructors with them, instructors to
operate, to teach the FDN troops?

A I remember a conversation about instructors
because Secord sent an instructor when we got the SA-7s from
you see. He arranged for an instructor, an
from^^^^^^H

Q Do you recall any discussion prior to that
instructor arriving with him about an instructor, that he
could provide an instructor with it?

A I remember talking about an instructor with.
General Secord, but where I don't remember. I remember his
sending an instructor and I remember the instructor being

I remember all of that, but I do not remember
" — and the instructor gave a course to our men.

Q Do you remember ever having a conversation with
General Singlaub about SA-7s and his ability to provide them
to you?

A Oh, yes. Oh, yes. The price that I was telling
you he told me, that price, $160,000 for these three state-
of-the-art SA-7s, the latest that had been made in the
Soviet Bloc, that were immediate.

Q Do you recall ever discussing the price of those
same SA-7s with General Secord as opposed to General

199

163
Singlaub?

A I'm sorry. No, I don't. I might have. It's a
possibility, but I don't recall it.

Q I'm just trying to get at if there was a
difference in those two prices which one would you purchase
from if there was any reason.

A Well, I didn't purchase any from either one.

Q Well, how did you get those? You said that
General Secord shipped to you --

A Those were fromH^^^f Those cost, I believe,
$47,000, if I remember correctly.

Q But you said you didn't purchase them?

A Sure. I said after that. In the sealift from
.^e gotl

Q Is this the shipment that you discussed the
instructor coming? Is this when the instructor came?

A Those came in April of '85 and then the instructor
came to teach our people the use of those SA-7s that had
been manufactured^^^^^^^^^^^^^^^^^^^f

MR. LIMAN: And the instructor was provided by

Secord?

THE WITNESS: By Secord, yes, sir,

MR. LIKal%^■

frchased from

200

yHuLnOuM

164

BY MR. BALLEN: (Resuming)

Q Did you ever meet with Barbara Studley?

A Oh, yes. I met her through General Secord.

Q Through General Secord?

A I mean, General Singlaub, yes.

Q What were the circumstances of your meeting with
her?

A Well, she helped General Singlaub. She helped
General Singlaub in this acquisition of the weapons that he
got for us. I think somehow she let her company name be
used for that.

Q Did you give General Singlaub the bank account?
Let me ask the question a different way. How were you to
transfer the money for the purchase from General Singlaub?

A He gave me a bank account number where I sent the

money .

Q _
could de

Q
recall?

Did you ever give him a bank account where he

rLes that he raised?
Oh, yes, sure.
What bank account did you give him? Do you

I don't recall, but I gave him -- I must have
given him the first one that I ever had, and then I must
have given him another one and another one so he'd have a
choice.

201

fSiHSEriiP

165

Q And did he, to your knowledge, deposit any monies
in those bank accounts that he had raised?

A No. I believe that those $30 came from --

Q The $30, that would be the sum total -- $30
million?

A No, $30, $30 from^^^^^^Hthe one that closed
down our bank account^^^^^^^^^ I mean, there's $25,000
that could have come from General Singlaub.

Q But that's the extent of it?

A Yeah, because, you see, what he did was he
acquired things. For instance, he was instrumental in
buying the Lady Ellen, for instance, the helicopter. He
picked up the money. He seen about people sending us down.
But I have no record, no recollection or nothing of that.

We've gotten a lot of medicine, a lot of clothing
and things that have been sent down to^^^^^^^Hand that we
have given to the refugees V|tflJ9BB^1^9Hi9flll^^ °^^ troops
and to our troops. We give medical attention in our
hospitals to the ^^^^^^fpopulation around. We take care
of their children and people, and we operate on them and
everything.

Q Let me ask you this. Did Sfrayl^uB^ever call you
in reference to Me* Pastora?

A Yeah.

Q What were the circumstances of that?

llHWSSffl

202

oiHs^ia

166
He went^^^^^^^^^^H at one point and talked to
Pastora and gave me a list of things that Pastora needed,
and he thought that it was important to get Pastora back
into the picture. But then I understand that people here
were upset by this situation, having General Singlaub mixed
up in these things. So we never did send, we ended up by
not sending anything to Pastora.

Q And :Siat was because people here were upset about
it?

A Well, yes. We heard -- Pastora was always a
problem and we werlF'upset, too, you see.

Q Who did you hear from here that was upset about
the agreement with Sin^ai;^?

A I'm trying to see how it was. We were upset by it
to begin with.

Q I understand that, but who from up here did you
hear from that was upset about it -- "up here" being the
U.S. Government?

A I remember telling General Singlaub he should talk
to the government people, that they should give an answer,
and I would say that if my recollection is good, I would say
that it nust. nave beefi^^^^^^^gthe one that seemed upset
about that. I would gather that, but I don't know if he .
ever talked to General Singlaub or not. I do not" "> -
recall .

ONCLASSIFIED

203

KM^IfJOfiir 167

Q Did he talk to you?

A I think. That's my recollection. We both agreed
that it would be a problem.

Q And did he communicate with you not to deliver the

supplies?

A I have been very respectful of the U.S. Government
people and they have been very respectful of me, and we
don't give each other orders, you know. We have taken their
points of view into consideration and they have taken ours.

Q And what was his point of view?

A That Pastora was a problem, that Pastora was a
problem, and that was my idea, too, that Pastora was a-
problem. And I didn't know, you <now, Singlaub was going to
make this arrangement with Pastora, and I didn't know about
it before.

And then General Singlaub also went to a meeting.
One time he went to a meeting who are called Condor Group.
*^he Condor Group is made up of former national guardsmen,
some of whom were kicked out of our-^rgat8t*iffron,- some of
Qie^lef t" the organization. And he went to a JMnSflng with
them which created expectations on their part.

^■irSL. And these people, unknowingly to him, have been
very problem#atic to us, to the FDN.

Q Let me just ask you one final question on Pastora.

Apart f ron^^^^^^^^B-'l Ul J^HiL JPStj^ji. J^ anyone else such as

Tiissasi*

204

mRmmi

168

Colonel North or Elliott Abrams about the Pastora agreement?

A When did it take place?

Q 1986.

A I could have. I don't have a clear recollection.
I could have told Colonel North about it. I could have told
him, but I don't remember. I don't remember talking it over
with -- I have no clear recollection of talking about it
with Mr. Abrams, although, yoxx teiow, you talk about one
thing with people who are so closely associated and it's
very difficult to determine which one you said it to and
which one you didn't and when and who did you tell it first
to. And it's difficult.

Q Because you had discuss. ons with all these people?

A Yeah, sure.

Q Did you or the FDN ever have any Swiss bank

accounts?

A No.

Q Do you personally have any?

A No.

Q How about your brother Mario? Does he have any?

A No. He has much less. I don't have any.

Q Did you av«r;:have to make any payments other than
for supplies t6|

A No.

Q No bribes?

lINCUSSSfiED

205

A No bribes as such, no. I paid for services for a
warehouse, for people who were taking care of the warehouse,
people who were loading trucks and things like that.

0 Did they ever take any of your weapons that were
destined for you?

p^ ^^^^^^^^^^^^^^^^^^^^^^^^^Hwas
AK-47S of ours. I mean, you know, we --

Q Was that voluntary? -^

A Sure. We have given AK-47s to two different
^^^^^^^^^1 a 1 s o .

Q There were certain credits that I don't know
whether you had wanted to get into or not that we hadn-' t
explored. My lists are different than yours. I don't know
whether they concern the Miller part of it. You might just
want to go through. anctJiee if there's any that you feel.
I have one question while they are looking at
that. "^axJ^ESH-^^y — 1* '"limi^ about money being
paid^S^^^^^H What was that for?

A For the upkeep of men in^^^^^^^fthat we hoped
we could get together into a fighting force.

Q Did that ever occur?

A No, no. It didn't come through, so we had to give

it up.

BY MR. LIMAN: (Resuming)

We thought these were Miller, but do you want me

206

wmm\

170

to take them? Your bank account shows deposits June4, 1986,
of $25,000 by order of Bank Scandinavia. Do you know what
that's from?

A That's the one, the $25,000 that I referred to
could be from --

Q From Singlaub?

A From people associated with General Singlaub.
Q Then the next one is May 14, '86, $48,770 by order

of Chase Paneuna. Do you associate that deposit with
someone?

A $48,000?
Q $770.
A $48,770.

Q From Chase in Panama.
A That could be Channel.

Q And then on August 29, 1985, there was a $300,000
by order the^^^^^^^^^^^^^^^H Do we know
what that was?

MR. 2ANARDI: What was the date?
MR. LIMAN: July 20, 1985.

MR. ZANARDI: That's not in one of his accounts.
MR. LIMAN: It says
MR. ZAMARDI: That could be a transfer. The^^^H
^^^H that's one of his accounts.

MR. LIMAN: That's an internal transfer. Is this

ONCLASSIFIEO

207

yi'WIiEIBftT

171

another internal transfer?

MR. ZANARDI: What's the date?

MR. LIMAN: September 27, '85.

THE WITNESS: That sounds like the one when they
closed the account. That's the closing of the account.

BY MR. LIMAN: (Resuming)
Q Then on September 30, 1985 there's a deposit by

order ofl

A That's a transfer interaccount.

Q Then there was a $50,000 reimbursement, it seems
to say, from^^^^^l 1/27/86. Do you know what that is?
A No.

Q REM, FMB^^^^^^I Do you know what that is?
Do you know?

MR. ZANARDI: I think I know what happened. There
was a debit and then a credit.

WITNESS: They are reversing.
BY MR. LIMAN: (Resuming)
Do you know what that was about?

They made a wrong entry and then they reversed it.
Then March 3, '86, there was a deposit by order of
is that what that is?
A We served as -- we served UNO as a channel to give
that money to the radio station operation!
^^^^H I think there were about four deposits made bv

UNCUSSifiED

— •- » »-. J

208

172
to our account and we in turn turned that money over.

BY MR. BALLEN: (Resuming)
Q Just one other matter. I forget which committee
exhibit -- the end user exhibits.

MR. LIMAN: I think we covered these.

MR. BALLEN: I just want to see if I have a
different one. I have a different one.

THE WITNESS: May I tell you a story? Are we sort
of finished?

MR. BALLEN: We have one more question.

MR. PARRY: And then I have one more question.

BY MR. BALLEN: (Resuming)
Q Have you ever seen that document before?

MR. PORTUONDO: He's looking at what purports to
be an end user certificate with a date of 28 November.

MR. BALLEN: We should mark that as an Exhibit.

MR. LIMAN: Let's mark that as Calero Exhibit 7.
We'll have it Xeroxed -- two end user certificates dated
November 28, 1984, addressed tc

I think you referred to^^^^^^^^^^^^^^^^^lat
one point in your testimony in connection with

(The document referred to was
marked Calero Exhibit Number 7
for identification. )

wuissra

209

iim*^*

173

BY MR. LIMAJM: (Resumimg)
Q If you look at this, does it ring any bells to
you?

A Yes. I mean, I don't remember seeing it or
reading it, but I'm reading it now. It's very clear that
these ^^^^H were the ones that were bought f ron
BY MR. BALLEN: (Resuming)

These were ^^^^^^^Hthat were bought from
|that went to you?
A Um-hum.

Q It seems to indicate -- maybe I'm just misreading

it -- but it seems to indicate in there that certain rifles
were sold by ||^^^^| which would be you, to the

Is that correct or am I misreading the

document?

A I didn't read it, to tell you the truth.
Q Would you read it, please?
A That we have purchased, I think it says.
MR. PARRY: You mean translate it?
MR. BALLEN: Maybe you should read it.
MR. LIMAN: The certificate says on it, in
referring to ^^^^^^^B that we have bought f ron
^^^^^H-- you see that language there. So that's what the
translation is. Now your question? I think that*what% you

were pointing out.

210

174
BY MR. BALLEN: (Resuming)

Q My question is, the certificate then would say
that bein^^^^^^^^^^^^H have bought from

would that be correct?

A That's what it says.

Q But the weapons went to you?

A (Nods in the affirmative.) Yes.

Q Did you have any discussions witt
who signed it, that the weapons were going —

A No.

Q Do you Itnow how that end user certificate was
obtained?

A By a friend of ours.

Q Who?

Q And who is that?

A ^^^^^HHi

Testified, those wmpe obtatned^with t"^3»lpSf Mr. Secord?

Q All of them?

A Yes, sir. I really dislike to talk about those
things. They involve other countries.

MR. LIMAN: Our record is not a public record at

m\t

211

mmij

175
this point, and you've expressed yourself on it.

THE WITNESS: I hope they remain non-public.
MR. LIMAN: YOU have one question.
BY MR. LIMAN: (Resuming)
Q Let me ask you a question. On those travelers
checks, did you give him travelers checks that were
unsigned?

A Unsigned.

Q Unsigned travelers' checks.

A Yes.

BY MR. PARRY:
Q I have two areas. Mr. Martin has told us that he
stockpiled a large amount of arms ^H^^^^H through an
arrangement with you where the FDN would be able to draw
those weapons out as needed and pay for them as they needed
the weapons.

A He did that with^^^^^^^^f because we have
authority to do anything like that.

Q Were those weapons intended -^oR use by the Contra
or the FDN in particular?

A Well, let's say if we had the money we could have
gotten those weapons.

Q You are aware that there was a large number of
weapons?

A I was aware, yes.

UNtUSSI

3 U:

212

vHMmm

176

MR. LIMAN: He bought them on speculation in the
expectation that he might be able to sell them to you?

THE WITNESS: Well, I would say yes. But through
an arrangement , a formal , legal arrangement that he made
with^^^^

MR. LIMAN: We're not suggesting there was
anything illegal.

THE WITNESS: They have custody and everything.

MR. LIMAN: We're not suggesting there was
anything illegal in that. But as the foundation for the
questions that Mr. Parry was going to ask of you, you were
aware that he had brought in weapons which he was
stockpiling^^^^^^^^^in the hope that he would be able to
sell them to you, right?

THE WITNESS: Yes, that's what I could gather.
They would be available to us and they would be available to
[in case of a problem with Nicaragua.

BY MR. PARRY: (Resuming)
Q Did you in fact draw any weapons from that source?
A We took some of those things, which we shouldn't
have done, and some of our people did take some of those
things and we have made no payment for them. We don't have
anything to pay with.

Q Was that about $1 million worth?
A Yeah.

yNCUSSif

213

177

Q Now the rest has remained there as far as you
know?

A Yes. It's there as far as I know, yes.

Q Mr. Martin feels that you discontinued using that
source due to pressure from Mr. Secord. Is there any basis
for that?

A No, no, because -- look, we requested, we asked
that those things be purchased because they were there, but
it's the government people that have not wanted to buy any
of that. There were also some --

BY MR. LIMAN: (Resuming)

Q I don't understand that answer. What government
people didn't want to buy?

A The U.S. Government. I discussed with the U.S.
Government people.

Q Since October of 19867

A Since November - October, 1986, the possibility of
acquiring those things that were there.

Q And the United States Government has not wanted to
buy them?

A Has not wanted, but there were some weapons stored
in our facilities. Some of those things were stored in our
facilities and some of those things were dispatched.

Q Dispatched means what?

A Dispatched to our people.

i^t^jiitrn

riili

214

UNt^AgiJfe

178

Q Did Mr. Martin ever complain to you about the fact
that you weren't buying weapons from him that he had stored

A Well, he certainly is worried about all that
material there.

Q He's put a lot of money into it.

A He's put a lot of money and he's lost his shirt on
it and nothing has come of it.

Q Did he ever express to you the view that it was
General Secord who discouraged you from buying from him?

A No. But he has expressed to me that Secord made a
good lot of money on us. He has expressed that.

MR. ZANARDI: If you had had the money, would you
have purchased the additional weapons from him?

THE WITNESS: Yes, because they are very good
weapons. The prices are very, very reasonable, and they are
there. "^^^P^*" "^

MR. ZANARDI: How do those J^i^ws compare with
what you got from Secord?

THE WITNESS; They were different items more or
less, but I don't remember exactly, but from Secord, from

[shipment -- I have to be honest about it -- we
got rounds of ammunition for $75 per thousand and that's a
darn good price. The best price that we could get from the
^as $110 -- of course, better ammunition.

215

\\i ll_U 179

BY MR. LIMAN: (Resuming)

A ^^^^^^^^^H is better ainmunition. And I have not
gone to the trouble, you know, of comparing prices, but the
prices that we could purchase the Martin stuff is a good
price. ,

Q I gather ^fisc since you have found yourself in
this business of buying arms you've discovered that arms
have no ideology.

A None at all. Really, we are now fighting, most of
the fighting that we are doing we are doing against the
communists with communist weapons. It reminds me of the
Indian wars, you know, that you had -- that they were
selling to the Indians and also selling to the cowboys.

MR. ZANARDI: So at the end you would still be
buying weapons if you had the money, even though you had
this early inventory.
THE WITNESS:

Iwe bought
[rounds of that, and we bought^^^^^flAK rifles. I
mean, all our troops now have AK rifles except for the
remaining FALs and D-3s that some of them still carry. But
the majority of our fighting troops have AK.
BY MR. BALLEN: (Resuming)

.T'jr"

fiC^^iVl

«Uob\

216

ufftenSiiS©

180

Q Is from th£^^^^^^ th^l^^^^^^^l rounds,
was that from the last Singlaub purchase?
A The last Singlaub.

BY MR. LIMAN: (Resuming)
Q Have you ever heard the code neune Clutch?
A Clutch?
Q Or Spark?
A Spark?

Q In connection with Miller?
A In connection with Miller, Richard Miller?
Q Yes. Did he ever use those names? Did you ever
hear those names -- Clutch or Spark?
A No.

MR. LIMAN: We have no questions. After we go off
the record I'd like to hear /our story.
THE WITNESS: All right, sir.

(Whereupon, at 4:52 p.m. the taking of the instant
deposition ceased. )

Signature of the witness

Subscribed and sworn to before me this day of

, 1987.

Notary Public
My Commission Expires:

UNCUSS

217

CflUo £i^l

pas

L<^M\ei)

ToTBL
Ex 00004 -&X00O ISA

218

lb pas

5101

219

Date

05-83

06-83

07-83

08-83

09-83

10-83

11-83

12-83

01-84

02-84

03-84

04-84

05-84

06-84

07-84

08-84

09-84

10-84

11-84

12-84

01-85

V-tV^i'-) "

■',\:-

...-■ 31' •■

UNcussm

MONTHLY BALANCES FOR

THE SIX CALERO ACCOUNTS

(as of 4-06-87)

E X

0 ^pn.'^')

ooooi

Disbursements

Month-end Balance

■ UNCLASSIRED

220

UNCUSSIFIED

00004

UNCIASSIHED

221

UNCIASSIHED

MONTHLY BALANCES FOR

THE SIX CALERO ACCOUNTS

(as of 4-06-87)

Date
01-87

Deposits

80,264.67

Disbursements

Month-end Balance

Total Net Deposits: 34,471,161.49

Total Net Disbursements:

Total Net Interest:

Total Items: 592

This report is a listing of transactions associated with six
Calero accounts. Transactions between bank codes 1007, 1020,
1024, 1071, 1073, and 1075 have been eliminated.

UNCUSSIHED

222

ONCLASSiFIED

i^a r^

My Friend;

UNCLASSIFIED

Cril

f- V c

tx-

223

mmsm

N 6389

So that we have a plan, I propose the following steps as hiqhest
priority; •

The forces in the northern part of Nicaragua need to be dispersed
so that ^hey are not caught in the firestorm as _the Sendinista
intend.

regular resuppiy program can

be deposited next week, we can
start a regular logistics program of one flight every 10-15 days
and the steady movement of supplies and ammunition to the forward
bases.

Most important is saving the force from what I believe will be a
serious effort to destroy it in the next few weeks. WMle I know
It hurts to hide, now is the time to do it. While they are
hiding, the man who is carrying this message can start the
regular resuppiy process. I believe it would be wise to dedicate
as much as $9-10M for nothing but logistics. To coordinate a
major effort such as this, I strongly urge that you bring aboard
a logistics expert who is both knowledgeable and trusty. The
^urier should be able to help with this.

ng them hard as tney phase down

"TnTrus^raWon trom 'tTieTr~c\n:rent operations and strikinc at
selected strategic targets with your enhanced capability.

This new money will provide great flexibility we have not enjoyed
to date. I would urge you to make use of some of it for my

British friend and his services for special operations. I can

grcduca him at the end of this mont

IINCUSSIFIED

224

ICLASSra

6Z90

You and I both recognize his value and limitations.

5ome in our Congress

us coul

levestating to our forthcoming campaign to restore the funding.
I will find out how much he is getting and let you know, but it
|Seein* as though something should be sat aside for this purpose.

Request you advise me soonest regarding the deposit and destroy
this letter after reading. The map can be passeddimH with
!fly best wishes. Please do not in any way make anyone aware of
the deposit. Too much is becoming known by too many people. We
need to make sure that this new financing does not become known.
The Congress must believe that there continues to be an urgent
need for funding.

Warm regards,
Steelhamner

\lHtm»^

225

^ Af^ 96-

ONCLASSIFIED

As cf April 9,

TDK Expenditures and Outlays
July 1984 throuoh February 1985

N 6408

Quantity

Independent Acquigition

G-3 riflei
Magazlnei
Round* 7.6 2 x SI
Rounds 7.62 x SI
Band grenades

- February 198S

Airlift «2 -

cRiurrage
Karch 1985

Blmni grenades
60mni grenades
5 0 cal API
Rounds 7.62 x
Rounds 7.62 X
Ins., etc.

Rounds 7.62 x 39
RPG-7 grenades
Hand grenades
60nun mortars
C-4

Fuses and detonators
G-3 rifles
G-3 magazines
Cleaning kits
60mm grenades
SO cal links
Demurrage, Ins., etc.

Scalift «1 - April Arrival

RPG-7 rockets
Rounds 7.62 x 39
Rounds 7.6 2 x SI
Belt* for 7.62 x
SA-7 launchers
SA-7 rockets
M-79 grenades
s . , and other exp

M-79 grenades

J^-r

./y> -

UNCLASSIFIED ..

226

UNCLASSIFIED

51
7.62

Deposit paid
Estimated cost

Item

Rounds 7.62 X

Rounds 7.62 x

Rounds linked

Hand grenades

M-79 grenades

60mm grenades

61mm grenades

6 2mm grenades

Ri'G-7 rockets

Claymore nines

50 cal API

12.7 ammo

57mm recoiless rifles

3 7mn ammo

Anti-tank mines

G-3 rifles

»v^ 'rif«"in9 kits
AK rifles
G-3 magazines
AK magazines
Hv'^^"* K magazines

*'"79 launchers

9mm pistols

AK-39 links or belts

Fuses and detonators

Uniforms
Boots

Radio and comm equip
Air and ground transp
Military gear
Aid to southern front
Aid to Misuras
Food, family asst
upkeep of base
camps, air force
hospitals, etc.
Political activity -
offices in various
countries and cities,
travel, p.j- '
Acquisition two
transp airplanes

Cost

N 6409

UNCUSSIFIED

227

UNCIASSIHED

N 10596
As of April 9, 1985

FDN Expenditures and Outlays
July 1984 through February 1985

Quantity
Independent Acquisition

Cost

G-3 rifles
Magazines
Rounds 7.6 2 x 51
Rounds 7.62 x 51
Hand grenades

Airl

February 1985

^jLfcd--

.J)

81nun grenades
60nun grenades

5 0 C'l API

Rounds
Rounds

39
51

Airlift *2

Demurrage, Ins., etc.
March 1985

Rounds 7.62 x 39
RPG-7 grenades
Hand grenades
60nun mortars
C-4

Fuses and detonators
G-3 rifles
G-3 magazines
Cleaning kits
60mir. grenades
50 cal links
'raight, 0«murrage, Ins., etc.

Seallft •! - April Arrival

RPG-7 rockets
Rounds 7.62 x 39
Rounds 7.6 2 x 51
Belts for 7.62 x 39
SA-7 launchers
SA-7 rockets
M-79 grenades
and other exp

M-79 grenades

UNCIASSIHED

228

UNCIASSIHED

N 10S57

FDN Expenditures and Outlays
July 1984 through February 1985

(Cont'd. . . )

Quantity
Sealift ♦2 - May Arrival

Item

Cost

Rounds 7.62 x 39

Rounds 7.6 2 x 51

Rounds linked 7.62 x 51

Hand grenades

M-79 grenades

SOnun grenades

Slmin grenades

8 2nun grenades

RPG-7 rockets

Claymore mines

50 cal API

12.7 ammo

S7mm recoileis rifles

57mm ammo

Anti-tank mines

G-3 rifles

G-3 cleaning kits

AK rifles

G-3 magazines

AK magazines

Swedish K magazir.es

HK-21 machine guns

RPG-7 launchers

M-79 launchers

9mm pistols

AK-39 links or belts

C-4

Fuses and detonators

Deposit paid
Estimated cost

Miscellaneo-.:s Expenses Since July 1934

Uniforms

Boots

Radio and coma equip

Air and ground transp

Military gear

Aid to southern front

Aid to Hisuras

Food, family asst,

upkeep of base

camps, air force

hospitals, etc.
Political activity -

offices in various

countries and cities

travel, p.r.
Acquisition two

transp airplanes

UNCLASSIFIED

229

lINCUSSIflEO

hi f^t^

N 71 E5

la de febrero de 1,925.

ZliiHGY RESOraCES IHTIJUJATICNAL
4^0 ^;aT3le Ave. East
Vieca,"''a., 22180.

Ser.ores:

::os diricizos a ustedes, para canif esttrles que por es,
te Siedio estascs exteadieado CISTIilC-.JICi; ZZ ^Z^Z.V.Z t^..i^
per OIZZ ^iIL (10,000) riries autozaticos, los cuales sera:^
dectLaalos para uso exclusive del Ioe"=^-o ^s^^^^^^HJ
-3 ssrLr. ree^rzortalrs ni ver.liics a ct"o pais, sier.uo|
^^^Hel destico flzal.

=ate.

uNcwssra

230

UNCLASSIFIED

N 7190

1H de febrero de 1,955.

Ser.ores:

INZSGY RZS0U3CES INTERNATIONAL

iJ^O Kaple Ave. East

Viena, Va. , 22180.

Ser.ores:

I'os dirigiflos :. usteaes, pa^a Ea^ifestarles que por e_s
te zedio e£taz.os exteadiecdo CEHTIJICASIC;; DE DESTIJO JI^AL
por DIE2 MIL (10,000) libras de explosive (HE) - O o TUT y
UIJ NIL i'JINIENrcS (1,500) detonadores variados, los cuales
.serin destir.adcs para uso exclu'ivo eel Ejercitc de^^^^^H
7 CO serin reexportados ni vendidos a otro p^is, sisr.dr
Fel destir.3 rir.il.
Sin otro particular, aprovecho la oportuniiad para sus_
cribirae atenteimente.

UNCLASSIFIED

231

UNCLASSIFIED

f^ 7191

14 de rebrero de 1,985.

S.aores:

ENZ3GY RZSCUHCIS INTESKATIONAL
4A0 Maple Ave. East
Viena, Va. , 22180.

aer.ores:

;Cos dirigijnos a usredes, para nanif esrarles que per es-
te zedio esta::os exter.iiendo CZLSTIrlCACIO:; TI riSTIl.'O ?i;"Al
dil material cue a coatmuacion se detallaj^^^^^^ sera des
tlnado para uso exclusive del £j£rciro dest^^^^^H? Qo se-
rd reexportado ci vendido a otro pais, siead
destmo final:

A. 150 aaetralladoras

3. 150 Eorteros de 60i::i:. -corpletos-.

C. 100 -crteros de Sloe, -coipletos-.

D. 150 laazazranadas r.-79
Z. -30 fusiles sin retroceso de 57=::.

5ia otro particxilar, aprovecio la oportuaiiad par.
critirae atentaiente.

umsw

232

UNCUSSiFiED

N 7192

14 de febrero de 1,985.

Sef5ores:

£:tZHGY H3SCUHCiS IKn3JN'ATI0NAL
44-0 Maple Ave. East
Viena, Va. , 22180.

li'os dirigiEos a usteles, para ca^ifestarlBS que por e>
te r.edio estates exter.dieado ClSri?IC.-.CIC" " ZtZSZZ'.'O ri'.r.-j.
del material que a cc:::ir.u£ci6n £e detslla, ^_^^al_£era
destiaado paxa ulo exclusivo del Zjerciro de^
seri reexportado ni vendido a otro pais, siend
el destico final:

A. 10,000 -ranadas i:-79.
E. -3,000 cranadas de 60:l:.
C. -2,000 iranadas de aicjn.

UNCLASSIFIED

233

UNCLASSIFIED

N 7195

iu de febrero de 1,985.

^^^.

|3?.g"rZ3C'JHC£S INTEa-N'ATLVAL
t-aO .".aple Ave. East
Viena, Va. , 22180.

:-o. dirisiios a ustedes, Para_5a3irestarles que^por^.f!"

"l-ste-^al que a contir.uacicn se deta-l^e^||^ se. a -ei
t--^~3 -ara uso exclusive del Ijercito ^^^K^^^^j -'
rrreex^ortalo ai veclido a otro pais, si^nJo]

destine fir.al:

A. 3,000 E^ar.adas ?-^-7.

B. ICO laizagraaadas RPS-/.

UNCLASSIFIED

234

yNCLASSlFIED

N 7194

14 de febrero de 1,985.

iJ.,

Senores:

Hi'iRGY RESOURCES INTERNATIONAL

^440 Maple Ave. East

Viena, Va., 22180.

Ser.ores:

Nos dirlgixos a ustedes, para maniftstarles que por es_
te cedio estaaos exteadiendo CEP.TIFICACIO" DE DE3Tr"0 FI.VAL
por DOS KIL (2,000) minas anti-persc=ales y UN MIL ('i,000)
niaas anti-t&nque, las cuales seran destinadas para uso ex-
clusivo del Ejercito de^^^^^^^lTr.o seran reexportadas -
ni vendidas a otro pals, sier.do^^^^^^^| el de3tino final.

Sin otro particular, aprovecho la oportunid:id psri sur

mm«B

235

mimm

N 7195

1* de rebrero de 1,985.

Senores:

£:JI-^GY RiSOURCES IXTESNATIONAL
**0 Maple Ave. E»st
Viena, Va. , 22180.

oenores:

I>'os dirigisos a ustedes, para aaaif estarles que por'es^
ce ceiio es-azos extenliecdo ClRTinCACIC" Ei EIsr:"C TZ'.-fJ,
por TR£3 ML (3,000) LAW ROCKETS, que vienen destiaados pa-
ra uso exclusive del EJ^rcito dc^^^^^Hmy no eer&n reex-

cortados Qi vesdidos a otro pais, sieLdd^^^^^^^H el desti.
ao flaal.

Sin otro particular, aprovecho la oportonidad para s-_
cribirae ateotamente.

236

yNCUSSIFIED

N 7196

1A de febrero de 1,985.

Senores:

ENERGY RESOURCES INTERNATIONAL
iUtO Maple Ave. East
Viena, Va. , 22180.

Sei5ores:

Nos dirigizcs a ustcles, para car.irestarles que por"es-

te cedio estar.cs t;cte:;iiendo CZRriEICACIC;: DE 2E3ri"0 rZi'.'S.

por 3IE2 (10) lajizacobetes tierra-aire y ClNCuENTA (50) Eis_i
les tierra-aire, los cuales vieaen destiaados para uso exclu

sivo del EJercito de^^^^^^^| 7 no serin reexportados si —

vendidos a otro pais, siendc^^^^^^^Hel destino Tinal.

Sir. otro particular, aproveiJr.o la opor-uzidal para s\;:

cribirae ateataaente.

llNMSIflEO

237

ONCLASSIFIEO

N 71^

14 de febrero de 1985-

Sefiores EieHGY R£SOURCES INTERNATIONAL
4A0 Maple Ave. East
Viena, Va. , 22180.

Sencrss:

i;os dirigimos a ustedes, para saniiestarles que por e_s'
te ledio estazos extendiendo CZP-TZTIZXCICU IE DE3TIN0 TIKIZ.
per CinCO KILLOKiS (5.000,000) de cartuchos Ball Amo, cal^
bre 7.62ttin. , los cuales seraa destinados para uso exclusivo
del EJercito de^^^^^^H? no serin reexportados ni vendi-
dos a otro pals, siend^^^^^^^H el destino final.

Sin ctro particular, 3-:rovec>.o la c?:rt-.:iidad tara 5-^
cribirae de ustedes atentajuente.

mimm

238

M AR 000057

CEBTIPICACIOg DE DESTINO PINAL

28 da noTiembre de 1,984.

No8 dirisiaos a usted, para manlfestarle que por este medio
eatamoe extendiendo CTBTIPICACION DE DESTINO FINAL por CUATRO MIL-
SETECIZNTOS VEINTICnATEO (4,724) fuailea CETME calibre 7.62 NATO -
con sua acceaorioa; y TEIHTE (20) BROWNING 1919A4 ametralladoras -
calibre 7»S2 NATO, que heaoa comprado de?

Material especifieado Tiane eonsigsado para uso exclu-
siTO del EJereito ^^^^^^^^Hy no sera reezportado nl vendido a-
otro pais, siend^^^^^^^Hal destino final.

Sin otro particular, aprovecho la oportunidad para auscri—
birme de usted, cono su atento servidor.

'7 ?..;.•

UNCLASSIFIED

239

ffiRKSSIRBIEWORl)'

uriginai

Stenographic transcript of
HEARINGS

Before the

SELECT COMMITTEE OM SECRET iHILlTARY ASSISTAUCE
TO ISAi4 AND THE NICARAGUA;* OPPOSITION

UNITED STATES SENATE

TESTIMONY O^j^mUJj^H L^^ M a ^ Co^fz/lf,
Monday, April 20, 1987

PadMy D«cbs>lw<]/Release(^ oivii^^£2.

3oi«r protRrms of LO. 12r56

... ^, r^/- lyMIA Katkmi Security Coufld

Washington. D.C ^^^?Ly<«. ^

SEONEr^SMBVVORD

(202) 628-9300

240

241

UNWSIEI

TESTIMONY OF

Monday, April 20, 1987

Unit«d States Senata
Salact Committee on Secret
Military Assistance to Iran
and th« Nicaraguan Opposition
Washington, D. C« ^xJ)
Deposition of ^^^^^^^^^f^^^H called as a
witness by counsel £or the Select Committee, at the
offices of the Select Committee, Room SH-901, Hart Senate
Office Building, Washington, D. C. , commencing at 10:17
a.m., the witness having been duly sworn, and the
testimony being taken down by Stenomask by ANNE
PELLECCHIA HOROWITZ and transcribed under her direction.

Partially Declassified /Rele«se,1 m <^^h€c.81
jndcf pfovisbns of £.0. IZTSC

*^-^ONiOSOtt)

UWUiSllED

242

UtttiWIED

1 APPEARANCES :

2 On behalf of the Senate Select Coninittee on Secret

3 Military Assistance to Iran and the Nicaraguan

4 Opposition:

5 THE HONORABLE WARREN RUDMAN

6 ARTHUR LIMAN, ESQ.

7 Chief Counsel

8 PAUL BARBAOORO, ESQ.

9 Deputy Chief Counsel

10 MARK BELNICK, ESQ.

11 Executive Assistant to the Chief Counsel

12 TOM POLGAR, Investigator

13 On behalf of the House Select Committee to

14 Investigate Covert Arms Transactions with Iran:

15 RICHARD J. LEON, ESQ.

16 Deputy Chief Minority Counsel

17 NICHOLAS P. WISE, ESQ.

18 Associate Staff Counsel

19 On behalf of the witness:

20 THOMAS E. WILSON, ESQ.

21 MARY BETH SULLIVAN, ESQ.

22 WILLIAM F. PENDERGAST, ESQ.

23 Seyfarth, Shaw, Fairweather & Geraldson

24 1111 19th Street, N.W.

25 Washington, D. C. 20036

uiwsiFe

243

>imwvi\

CONTENTS

EXAMINATION ON BEHALF OF

WITNESS

SENATE WITNESS

m^^H;

Mr. Barbadoro *

Mr. Wilson 196

^^3

EXHIBITS

1 EXHIBIT NUMBER FOR IDENTIFICATION

140

142

171

iJNJtOTtB

244

245

liNBtftSStBEO

PROCEEDINGS
SENATOR RUDMAN: If you would remain standing,
pleaaa rais* your right hand. Do you svaar that the
testimony you are about to give in the course of this
deposition should be the truth, the whole, and nothing
but the truth, so help you God?

KjJ ]^||^^H|H|||| ^

SENATOR RUDMAN; You can be seated.
Whereupon,

called as a witness by counsel on behalf of the Senate
Select Committee, having been duly sworn, was examined
and testified as follows:

EXAMINATION ON BEHALF OF THE SENATE COMMITTEE

^ BY MR. BARBAOORO:
Q ^^B^^^I^^H when did you became the
Stat ion H^^^^^^^^^

A I decline to answer. ^

SENATOR RUDMAN: |Him^m ^ ^'^ going to
read an order to you, to you and your counsel, and I am
going to put it in the record at this time.

It is United States District Court for the
District of Columbia, the Senate Select Committee on
Secret Military Assistance to Iran and the Nicaraguan
Opposition, the United States Senate, Washington, DC.

"ic

246

1 Th« ord«r wa« filed March 30, 1987.

2 Upon consldaration of th« application by the

3 Senate Select Committee on Secret Military Assistance to

4 Iran and the Nicaraguan Opposition, upon determining that

5 the procedural requirements of 18 U.S. Code Section

6 6005(b) have been satisfied, and upon consideration of

7 the application of independent Counsel Lavnrence E. Walsh

8 under 18 U.S. Code Section 6005 (c) to defer this order for

9 20 days from the date of the Select Committee's request

10 for the order, it is. this 30th day of March, 1987,

11 ordered thatmSHj^HHRmay not refuse to testify and

12 provide other information at proceedings of the Senate

13 Select Committee on Secret Military Assistance to Iran

14 and the Nicaraguan Opposition on the basis of his

15 privilege against self-incrimination, and it is further

16 ordered that no testimony or other information compelled

17 under this order (or any information directly or

18 indirectly derived from such testimony or other

19 information) may be used against |||^^^li^^|B i" any

20 criminal case, except a prosecution for perjury, giving a

21 false statement, or otherwise failing to comply with this

22 order.

23 And it is further ordered that this order

24 shall become effective on April 19, 1987. Signed by the

25 United States District Judge, dated March 30, 1987,

SiflEB

247

WMSB

1 Aubrey E. Robinson, Jr.

H^HHI^^Hb upon raadlng that ordar, Is

3 tha opinion of tha Connlttaa that you ara now conpallad

4 to tastify and you naad not assart your Fifth Amandinent

5 prlvllage bafora answering tha questions. Tha privilege

6 wa understand you have assarted. The iDaunlty Order

7 gives you iDmunlty that tha lav allows and wa can now

8 proceed with Mr. Barbadoro's question.

9 Paul, Z an going to stay hara for just a few

10 minutes and then I will leave.

11 MR. BARBAOORO: I would like to mark thir

12 order as flU^P^Exhibit #1, and the record should

13 reflect that I have handed H^^^H^^Hj a copy of tha

14 order as wall.

15 (Tha document referred to was

16 markadfl^^Hpi Exhibit Number 1

17 for identification.)

18 MR. WILSON: Mr. Barbadoro, for the record, it

19 is our understanding that while this proceeding has been

20 denominated a deposition it is considered by the

21 Committee to be an executive session and executive

22 proceeding of the Committee.

23 MR. BARBAOORO: It is considered to be an

24 executive proceeding but it is a deposition rather than a

25 Committee hearing.

lfi«EtH5S»e

248

UNeUWED

BY MR. BARBADORO: (Resuming)

Q ^mUH^IV "^ know from the records
we have reviewed and %he witnesses we have interviewed
that you played a significant role in the development of
the southern front military forces. Who gave you your
instructions regarding the southern front?

A Well, first of all, let me start by saying
that, the exercise of privilege aside, I appreciate the
opportxinity to explain exactly what my role was. Your
question uses the word "developed|"U That Isn't quite a
clear description of my role in working with the southern
military front of the Hicaraguan resistance.

Q Well, why don't you just describe what your
role was?

A To briefly describe it — I think we'll get
into it and we'll get into it certainly as my testimony
goes on — is that it begins with July, 1984, when I
arrived ^^^^^^^^Kind assumed command of the CIA
station ^I^^H^^ And by that time there had already
been a southern front, primarily under the direction of
Eden Pastors, with a smaller military force under the
direction of Fernando Negro Chamorro.

My arrival came after the Boland Amendment had
taken effect and, therefore, my responsibility was
essentially to maintain contact with these people over

mmm

249

2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

\j\\^tfSSttit^

whom w« had questlonabl* control at any time during thair
davalopmant prior to my arrival thara.

so, it was basically an intalliganca
collaction operation to detarmina what thay ware doing.
And as time progressed, of course, we developed more and
more expertise in learning what they were doing. But to
say there was any control on our part would be
inaccurate, even at times ludicrous, given the nature of
these people and their circumstances at that time.

Q well, it was more than just an intelligence
collection operation, wasn't it?

A Yes. The other half of it was political
action activities,]

So, it was sort of keeping them
all together and keeping them looking at what their
primary objective was, the democratization of Nicaragua,
rather than — and to keep them apart when conflicts
arose or to straighten out or mediate among the various
i>,H«T- i.nd political flcQires_and_so_forthJ

^^^^^^^^^^^^^^^^^^^ It was a

different situation.

I would say that virtually at no time did we
ever have control. I certainly d^d_my best to exert

\ll«8lfltB

250

\l#NWtB

Influanc* on than, but I was abl* to do so only to th«
extent that ^Hallowed it.

Q Let me go on here, though. It was more than
just an Intelligence collection operation. You were
given, for example, specific instructions' to separate
Pastqra's commanders from Pastora, were you not?

A No, Z don't recall ever receiving specific
instructions. I think it was my o%m strategy to attempt
to diminish his influence with the fighting forces inside
because he was so erratic, so uncontrollable, creating so
many problems for the U.S. mission and U.S. policyt^H
^^^^^^^H In terms of a specific instruction, I. don't
recall that there was a specific instruction.

Q Did you COB* up with a plan to subvert
Pastora** commanders from Pastora?

A Well, it was sort of an evolution. In terms
of that's what — we recognized — let me stop. We
recognized that inside Nicaragua there were
approximately, well, over a period of time, from^^^Hto
maybe ^^^^Hfighting men who still had nominal allegiance
to Eden Pastora, nominal in the sense that he remained
either on the border!

lSPIBT

251

\HWe^W

1 And, by radio h« would exercia* his — h«

2 would •xarcla* damagoguary ov«r hi« p«opl« Insida, and

3 coincidantally in tarns of, in political terms, the need

4 to hav« Kagro Chanorro, the man who waa, and with his

5 small group of f ightara about

6 Q Excuse ma , ^^^^^^^^^H My queation to you

7 was did you coma up with, a plan to aaparata Pastora from

8 his comaandara?

9 A Tha question is too specific. I would say

10 that I would like to think I did. Let me put it that

11 way. But I think It was probably an evolved plan.

12 Q Vfho did you discuss tha plan with?

13 A Oh, with tha officers in my station, with

14 headquarters officers. The more v« could diminish

15 Pastora and get Negro Chausorro and his forces inside to

16 link up with tha other forces, it created a more solid

17 political situation.

18 . Tha difficulties that Pastora presented to us

19 in political terms simply created a vary erratic,

20 unstable political aituation. He was always the fly in

21 tha ointment, in political terms. So as we tried to

22 maneuver Negro and his forces to leav^^H^^^f and

23 encourage them to follow what had been the political

24 thame of the democratization or the pressure on the

25 Sandinistas to get out^^^H^^H and inside, it also

yimstfiED

252

ORD

meant an equivalent reduction In the presence the
position of Pastora.

Now Pastora vae the nonlnal leader. The
commanders inside had a dialogue with him by radio and so
forth, but in terms of Dllltary operations it was the
commanders Inside who made their own decisions.

Q I'm not asking you to explain the way Pastora
related to his commanders. My question was simply did
you come up with a plan, and I understand ^ your answer to
be, yes, but you consulted with other people about the
plan. Is that right? *'

A Again, I am at a loss to answer your question
specifically, and I am certainly not trying to be
evasive. It's just that as these discussions took place,
as this thing, as this sort of nebulous situation became
more definitive, I can say, sure, I discussed it with
headquarters officers. There was cable traffic on it.
But to say that there was em A, B, and C, no.

Q Let's do it this way. You became Chief of
Station/^^^^^^^^^B in July of Vlhat was your
assignment immediately prior to being Chief of station?

I was of ^^^^^^^^^^^^^^H at
Headquarters for the Central Aaerican Task Force. That
meant I was responsible for all of the non-fpilitary

activities of the Central Aaerica/^^ountries, primarily

253

UNUmED

dealing with press, propaganda, political action
operations, political programs -- in other words, dealing
with all of the problems and so forth surrounding the
Nicaraguan resistance primarily and how they impacted on
the other Central American political situations

Q Was ^^^^^^^^^^^^^^lyour immediate superior?
' A Y*S/ he was.

Q And Dewey Clarridge was Chief of the Latin
American Division at that time?

A For a period of time. Z don't recall exactly
when he left, but for the most part while I was there,
yes.

Q Do you know why you were chosen to be Chief of
Station^"

A Hell, one likes to think that I was the best
candidate for the job.

Q Who informed you that you were chosen to be
Chief of Station?

A Dewey Clarridge, the Division Chief.

Q Did you have any discussions with Dewey
Clarridge at that time about what you were supposed to be
doing regarding the Contrasj

A Well, to conduct all of the headquarters-

ymsstfiEB

254

1 directed operations and to continue the onfgoing programs

2 as they existed at that tine. Of course, this was in the

3 aftermath of both the Boland Amendnent and the bombing

4 attack on Pastora.

5 Q What was the status of the military movement

6 in the southern front when you became Chief of station?

7 A Poor, and it got worse.

8 Q How many men were in the field in July of

9 1984? K

10 A Inside Nicaragua Pastora claimed^l^H X

never thought there were more than jj^HV to^^^^S|^H
^^^^^^^^^^^^H the camps there were perhaps another-

13 300 to 500.

14 Q Who was in charge of the military operations

15 for the southern front at that time?

16 A Oo you mean the station officer responsible?

17 ^ Who was the contra leader in charge of the

18 military aspect of the southern front?

19 A Negro Chamorro for his group, and Eden Pastora

20 for his group.

21 Q Were they working together ot were they

22 entirely separate forces?

23 A Entirely separate. Well, entirely separate.

24 I guess there was some contact from time to time.

25 Pastora nominally had brought Chamorro into his group,

255

itMWO

but It was mora of a casa of compassion on Pastora's part
bacausa Negro Chanorro^^^^^^^^^^^^Hdidn't
hava control of his people, and so Pastora had agreed to
bring or agreed with Negro to bring him into his group.
But after the bombing attack on his camp]
[on May 31, 1984 ~

Q Who is "his camp"?

A Pastora's camp. Pastora, of course, was
severely injured and that's vhen things Kind of started
unravelling for him.

Q How were those ^^^H troops being supplied- in
July of 1984?

A Those troops had been supplied by CIA prior to
the Boland Amendment cut-off and they received massive
resupply, 1 guess, in the early part of 1984 and they
lived on that for cpiite a while. Then Pastora had his
own sources in the Christian Democratic ^vement, the

Social Democratic Jtovement, through Latin America and

some help from^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H
^ I guess,
Cuban-Americans in Miami, but none associated with CIA.

Q It was clear to you when you became Chief of
Station in July that the CIA money was running out and
the CIA was not going to supply the Contras again for at
least a year, isn't that right?

lirtfSIED

256

1 A I 'Believe that at that time CIA money had

2 already run out. I gave no money from the time I assumed

3 command to — official CIA funds we're talking about, of

4 course; it's not my money.

5 Q The money had run out, right?

6 A I'm almost sure. I don't know, but all I can

7 tell you is I did not disburse funds to Pastora after I

8 assumed command.

9 . Q Did you have any discussions with Dewey

10 Clarridge prior to becoming Chief of Station as to how

11 the Contras were going to be supplied once you got down

12 there?

13 A No, no.

14 Q There was no discussion at all about what

15 would happen to that southern front force without CIA

16 money?

17 A Well, you say did I have any discussions with

18 Dewey Clarridge. My answer to that about that is no. I

19 assumed and I don't know, I assume or I believe that or

20 it was my impression at the time that they would get

21 funds ^Mr' private sources.

22 Q Where did you get that impression?

23 A I don't know. I just can't tell you because

24 it was just an impression that they would survive, okay,

25 and that Negro and Pastora and the others would seek

257

UNGUSSiED

1 support from somewhere.

2 Q Did Clarridge say anything to you about

3 private sources supporting the Contras?

4 A I can't remember that he ever did.

5 Q Did you have any discussions with the Director

6 prior to going down to become Chief of Station?

7 A No.

8 Q You didn't meet with him?

9 , A No.

10 Q Once you got your assignment?

11 A No. I'm smiling because the press is alleging

12 all sorts of things and it is simply not true.

13 Q Isn't it customary for someone before he's

14 made Chief of Station to have a meeting with the Director

15 before he goes down?

16 A That depends. After ''^^■^^^^H^*
major not^l^^HHjH^^ I was only,

18 am only a GS-15, I am not in the senior service. It is

19 customary for chiefs of station to be given the hail and

20 farewell handshake, but —

21 Q You didn't have it.

22 A 1 didn't have it,' no. I think the last person

23 I saw may have been the DDO, Clair George, and I don't

24 even remember if I did.

25 Q Did you have any discussions with George about

lINCllSSStfltD

258

^iftmms

Q
A

Station

how th« Contras were going to be resupplied?
A No, sir.

Q Let me ask you about a meeting in August in
Did you attend a meeting]
Chiefs of Station in August]
Yes, I did.

What was the purpose of that meeting?
It was a regional meeting, the Chiefs of

to discuss

the status of their operations, the problems they were
facing, and sort of an overview thing and to look to .the
future .

Q The Director was at that meeting, was he not?

A Yes, he was.

Q Was Clair George at the meeting?

A Yes, he was.

Was^^^^^^^^^^^^B at the
my understanding that he was not.

A That's right, I don't remember him being
th«r«. ,

Q At that time he was the head of the Central
American Task Force, wasn't he?
A Yes, yes.

Q In your experience, isn't that unusual for a
meeting of Chiefs of Station to take place and the head

^"^WSSIflFB

259

UNa

1 of th« Central American Task Force not to be there?

2 A No, Clarridge was there and certainly, you

3 know, to have everybody leave Washington at the same

4 time, I mean, who runs the shop back home? So since

5 Clarridge was there, he is familiar, you know, all of the

6 activities of the Central American Task Force, so I

7 suppose that they decided to leave ^^^^^^^H to run

8 things back home.

9 Q Is it safe to say that —

10 A That is an assumption on my part.

11 Q Okay. Is it safe to say at that time that it

12 was Clarridge rather than ^^^^^^^Hthat really had the

13 day-to-day control over Contras, CIA's Contra activities?

14 A Yes. If you know Clarridge, the only possible

15 answer is yes.

16 Q Who else was at that meeting that was not in

17 the CIA?

18 A Colonel Oliver North.

19 Q Anyone else?

2 0 A It seems to me there was somebody from State,

21 but maybe I'm mistaken.

22 Q North came down with the Director, didn't he?

23 A Well, I really can't say. I arrived|^^mm
2 4 ^^Hand they were there, you know. I met them; they

25 were there. I don't know how they travelled; I assumed

260

mumm

1 they did.

2 Q Was that the first time you met Oliver North?

3 A Yes.

4 Q Did you find it unusual that he was, that a

5 non-CIA person was at a Chief of Station meeting?

6 A Well, unusual, I'm not sure that — no, I

7 don't think so, although I had no previous experience. I

8 mean, I hadn't been to — that was my first Chief of

9 Stations meeting. Secondly, however, I would have to say

10 not unusual because I was aware that Oliver North had a

11 close working relationship with Clarridge. And, you .

12 know, the fact that he was there did not seem unusual. I

13 believe that when we did our overview, station overview,

14 I don't think Korth was present. I think it was just the

15 Director, Clair George, and Clarridge.

16 Q Do you know why North was there?

17 A I assvime because we were talking about

18 Nicaraguan political — the Nicaraguan situation.

19 Q What did he do when he was there?

20 A I don't remember him speaking other than in

21 the exchange of ideas and views and so forth. He didn't

22 make a presentation or anything like this, like that.

23 You know, it just, there was no —

24 Q Had you met North during your tour in the

25 Central American Task Force?

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A No, sir.

Q Did you have any personal discussions with him
at this meeting of August?

A Yes.

Q What did you talk about?

A Well, it was not at the meeting. It was at a
cocktail party on one of the evenings that we were there.
We were there two or three days, and during one of the
evenings we had a cocktail party. I went over tb him and
introduced mvself and told him I was f rom |

262

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^^J/Bd

/■) /4Z^

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UNClASSra

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IS
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Q How long was that meeting with North?

A Oh, a few minutes on the terrace during the
cocktail party.

Q And it was your first private discussion with
him?

A Yes, private. I mean in front of other
people.

Q What else did you talk about?
, A Families, that sort of thing — personal
things. It's the only thing I can remember. I didn't
talk about — I don't recall talking about any other •

Q Did he say anything to you about the status of
the southern front forces?

A I don't recall that he said or I said anything
at the time.

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'To >'^i^

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UWWSIflED

2:
2:
2:

24
2!

Q What als* did you tal)c about in that nesting?
w« ovar^^^^^^^^^H aspects,
rsmambsr bacausa that was tha thing I'd raally bonad up
on sinca that was whara I was waa)cast. I Knaw tha
Nicaraguan situation obviously from my tima in

Washington, and 1 talked about soma of tha major

operations that w^iad^^^^^^^^^^BP^^B^^^^^^^^B
^^^^^^^^^^^^^^^^^^^^^^^^H that

Q Did you talk to him about Pastora and his
troops?

A Wall, that had all been covered in the
overviews.

Q Did you talk to him, though, in this private

IJNttRSStflED

266

1 masting about Pastora and his troops?

2 AX don't remember saying anything about that.

3 Q Did he sa^ anything to you about how the --

4 A No.

5 Q — contras were going to be resupplied during

6 this period when the Boland Amendment was in effect?

7 A No. I frankly can't recall anybody saying

8 anything. It was an assumption on my part, and I can't

9 specifically say from where, that they would survive

10 somehow with private assistance. ;:

11 Q And, to your knowledge, there was no 7

12 discussion at this meeting ^^^^^^Habout how the

13 Contras were going to survive during the period the

14 Boland Amendment was in effect?

15 A To the best of my recollection, no, there was

16 not.

17 Q Were you given any Instructions at that

18 meeting as to what contacts you could and couldn't have

19 with the Contra forces?

20 A Oh, well, it was. all specifically, yes, not

21 only then, but prior to going down as a result of the

22 Boland Amendment that it was strictly intelligence

23 collection and keeping the political worms in the bucket

24 until, of course. Congress decided to resume funding and

25 we did not know how long with was going to be.

UNWSIflED

267

uNfiWSStffEfl

Q Had you conc«iv«d of your plan to separate
Pastora from his commanders by that point?

A No.

Q When did you develop that plan?

A Much, much later. I guess it was in, if there
was even, as I say, a plan, it was kind of a thought
process. But when we received a report,]

that the two commanders, two or three commanders
inside Nicaragua had met with commanders |
it the FDN

and that they, on their own, sat down and signed a
pact that they would cooperate with each other in the
field regardless of what their political alliances might

be — meaning that

I the FDN out of ^^^^^Band the ARDE
conunandera nominally under Pastora from the south, that
they agreed that in the field they would work together,
and this occurred in November, 1985.

Q When you say ARDE, that included Pastora 's
people. It also included Blackie Chamorro's people?

A No. Blackie, Negro Chamorro, had his own
organization called UDN/FARN which stands for tho
National Democratic Union/Nicaraguan Revolutionary Armed
Forces. And as I say, there was a period in 1984 when
they had sort of joined together, but this dissipated

m*WB

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over th« period of 1984-1985, I think mainly because
Pastora was sort of patronizing toward Chamorro, and it
wasn't really what you might call an alliance between two
leaders.

Q What were the names of Pastora 's principal
military commanders? Wa^^^^Hone of them?

A No^^^^H Please now, you are calling back
things that over the time have eluded me. ^H^H I
believe, was under Negro Chamorro. Under Pastora there .
was!

Q Was there a c^uy nickname*^

A Yes.^^^^Hwas one of the field commanders.
He wasn't one of Pastora 's, say, headquarters staff.
^^^H was a field commander inside, and there were other
field commanders inside besides ^^^^B— six to eight.
Well, two of these or three of these were the ones who in
November of 1985 met with]
and signed this pact.

At that point the thought process
crystallized, and we saw the opportunity, I saw the
opportunity — "w4,'v/ I'm talking about my station
officers who were involved in this — to capitalize on
that because it was the first time that the south had
ever had any kind of rapprochement with the north, with
the FDN, and obviously for political reasons this brought

UNttASStFIED

269

UNKAWEO

1 together the things we were not able to accomplish in

2 terms of Adolfo Calero and the FDN, with Alfonso Robelo

3 and Arturo Cruz in the south.

4 So we thought that the political process could

5 be stimulated by the fact that the field commanders, that

6 the patriotic objectives would form the basis for an

7 actual political unity.

8 Q That was in November of 1985?

9 A November of 1985, correct.

10 Q Let me ask you then, who isj

11 A That is Eden Pastora.

12 Q Well, isn't it true that this plan had really

13 been conceived as early as June of 1985?

14 A Well, again I'm not sure that I can call it a

15 plan.

16 MR. LIMAN: Call it an idea for this purpose.

17 THE WITNESS: It is a concept, and I felt that

18 anyway that I could work to diminish Pastora 's influence,

19 that that would, first of all, raise up the stature of

20 the Negro Chamorro people who were aligned with Robelo

21 and Cruz in the south that worked politically together

22 with them and that then that idea and the fact that

23 Pastora 's duplicity with his own commanders could bring

24 about an amalgamation of the military people in the field

25 and that this would give substance and support to the

n.i

270

I AOCIfltft

political typasJ

I a«an, it was sort of trying to do two things
at tha sam« time. To what sxtant it was an idea or a
plan it is very difficult to dsfine bscaus* w« had
nothing, no l«v«rag«. W« had no leverage whatever either
on Pastora or on the field conmanders because we couldn't
deliver anything to them.

MR. BARBAOORO: I will get to that for a
moment .

SENATOR RUOMAN: Paul, if you will suspend for
a moment, our rules do not reqpiire me to stay for thi-s
examination, so I am going to excuse myself on the
record. Thank you very much. 1 have another meeting to
go to this morning.

MR. BARBADORO : Thank you. Senator.

271

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3
4
5

9
10

20
21
22
23
24
25

W. w.r. c.rtainly trying to giv. status,
political status, to UNO. It was, aft.r all, th«
uBbr.lla organization of th. Nicaraguan r.sistanc. By
th. sa». to)c.n, w still had to deal with Pastora a, a
tang.ntial, influential, disruptiv^nd^^dual

NOW her. w. are on. th. on. hand trying to

272

iiNetwe

raise the political status of UNO to say that it really
represents the broad spectrum of the Nicaraguan
opposition, from the social democratics on the one side
to the right-wing conservatives on the other. And yet we
had those loose cannon sitting out there in the form of
Pastora, who could adversely affect things that we had
been working on for a considerable amount of time and put
a considerable amount of effort into it.

In my capacity as Chief of Station in this
particular situation, in this particular case, it was
part of my responsibility in order to promote the one
organizati

273

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4
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6
7
8
9
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11
12
13
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UNClASSIflED

And with Pastora, the
more that w« could do to diminish his influence and at
the same tine elevate the influence of others, it was —
it served our objectives.

MR. LIMAN: When you say our objectives, whose
objectives?

THE WITNESS : The U.S. Government ' s .

MR. LIMAN: And who coBBunicated those
objectives to you?

THE WITNESS: Well, some of them I initiated
and I proposed to headquarters, as in this particular

cable.

MR. LIMAN: Well, who is headquarters?

THE WITNESS: Washington, the CIA, the Central
American Task Force.

BY MR. BARBADORO: (Resuming) C,/^-^^^^^J

Q But at that point it'sj
A Well, sure

isn't it?

^H^B^^

274

1 MR. LIMAN: So it is^^^^you're talking to

2 about that?

3 THE WITNESS: Sure, and let me say that this

4 is one of hundreds of instances, not only in the case of

5 Pastora, but all others, where we had political

6 operations and there were things that I would, operations

7 that I would propose, operations they would propose, and

8 ask for my views on it and the constant give and take

9 over, two and one half years had God knows how many

10 exchanges similar to this.

11 He made a proposal. They said stand down on

12 it. Okay, we'll stand down on it. Maybe next month

13 there might be more propitious opportunity, and might

14 even say, hey, we'd like to resurrect this old idea, and

15 they may say, hey, now is a good time to do it.

16 So that's part of the dialogue that works in a

17 good situation between headquarters and the field. It

18 doesn't always work that way. Sometimes there is

19 misunderstanding. Sometimes, you know, we are not always

20 in sync|. But generally, that's the way it works. So to

21 bring out one piece of paper and try to say, you know,

22 did you have a plan —

23 BY MR. BARBADORO: (Resuming)

24 Q Whatever you want to call it. Let's call it

25 an idea.

OWSStflEO

275

llNCtl«HI

1 A In my vi«v it was a concept bacaus* Pastora

2 was a dlsruptiv* alansnt and what v« n««d«d to do was put

3 hia aslds and at th« sam* tlms enhance th« organization

4 that w« had that w* were supporting.

5 Q Did the concept involve causing Pastora 's

6 commanders to break away from him and unite with the FDN

7 forces?

8 A That is a misconception. What happened is

9 that in December of 1985, after this pact had been

10 signed, the commanders came out of Nicaragua and they

11 came out, three or four of them did, and they were of. one

12 mind. They were going to confront Pastora and say 'we

13 need support now. We can't take it any more. We're

14 being decimated in the field, and if we don't get

15 support, we're going to go talk to the UNO people.

16 And in fact, in December they came out. we

17 heard they came out. They did in fact meet with Negro

18 Chamorro and Negro Chzmorro's assistants. They met with
Alfonso Robelo^^^H^^H|^|HH^^^^|^H^^^^H

^H^^^^^^Hjm The discussions, they

21 initiators. We responded to their interests and their

22 interests were to obtain support. We could not promise

23 them support, but what we did do was to encourage then to

24 get back inside, to take Negro Chamorro 's people with

25 them so that there would be unification of their efforts

I'NfitSSSfflED

276

UNWSINil

1 in opposition to the Nicaraguan regime.

2 What Robelo may have promised them, what

3 Chamorro may have premised them, whether they were empty

4 promises or promises that — it was something that I did

5 not participate in.

6 MR. LIMAN: Even if you didn't participate in

7 the mass chief of station, you surely would want to know

8 what those promises were. That's part of intelligence

9 gathering isn't it?

10 THE WITNESS: Well, it was, but as it turned

11 out —

12 MR. LIMAN: What did you find out?

13 THE WITNESS: I want to say that we found out

14 that Robelo did promise them some help, but I am not

15 certain that I can. I'm not certain that I can.

16 MR. LIMAN: You are not certain that you can

17 because of your memory or because that you don't want to

18 talk about it?

19 THE WITNESS: No, no, memory. Wait a minute.

20 Everything in this room, sir. I mean, everything I'm

21 saying is absolutely on the table. I am not in any way

22 trying to dissemble or to be obtuse.

23 MR. LIMAN: That isn't want I was trying to

24 put to you. I just wanted to know whether there were

25 some subjects that you were just uncomfortable talking

277

W4ssn

1 about.

2 THE WITNESS: Sir, if there are any subjects I

3 am uncomfortable talking about, I am going to tell you I

4 am.

5 MR. LIMAK: Okay, fine, as long as we have

6 that understanding.

7 THE WITNESS: I have a problem with this in

8 that I simply am not sure. Now I'd have to look at our

9 cable traffic for the period of December, January —

10 December of 1985, January of 1986 — to tell you that.

11 MR. LIMAN: But you understood that the reason

12 or one of the reasons that they were dissatisfied —

13 THE WITNESS: You're right, I misspoke.

14 MR. LIMAN: With Pastora was the fact that

15 they weren't getting supplies.

16 THE WITNESS: You're correct.

17 MR. LIMAN: Now they're going to go along with

18 Chamorro and what did you find out about the commitment

19 for supplies?

20 THE WITNESS: Let me clarify. My attitude was

21 throughout this period to be as careful as I possibly

22 could concerning matters dealing with the Boland

23 Amendment. I wanted to be absolutely sure. I wanted to

24 be absolutely sure of the fact. That I may not have been

25 at certain times is the nature of the business.

um;!iiEo

278

UNGlASSIflED

1 But I consciously tried not to get into a

2 position where these commanders would turn to me and say

3 or expect from me, from CIA, because they knew who I was

4 and they knew who my officers were, to expect from us

5 lethal support, okay?

6 MR. LIMAN: You didn't want to promise them

7 more than you could deliver?

8 THE WITNESS: I knew I couldn't deliver

9 anything. When I met with them I knew I couldn't deliver

10 anything. Yet, I did not want to be placed in the

11 position because this was a very delicate negotiation; I

12 did not want to be placed in the position whereby if they

13 asked, and I couldn't deliver, that what we were trying

14 to accomplish in terms of the political unification might

15 suffer.

16 I frankly avoided that point with them.

17 That's what I was trying to say when I said it before.

18 Yes, we did have a responsibility, in response to your

19 question, to collect intelligence on what was discussed

20 between Negro and the commanders, and between Robelo and

21 the commanders.

22 MR. LIMAN: But you must have seen that as

23 quite a dilemma. One the one hand, you wanted to

24 encourage them to join up with the UNO people, and, on

25 the other hand, you weren't in a position to deliver

itJ

279

M^aSIWD

1 lethal aid at that point.

2 THE WITNESS: That is correct, and that goes

3 to the very crux of the matter of my responsibility at

4 that time. I essentially was doing all of this and it

5 reached the peak at that time in January of 1986. I was

6 doing all of this with mirrors, the whole question of

7 bringing these people together, we had nothing to offer

8 them. And at the same time here we were trying to keep

9 them pointed in that direction.
Believe me, it was not easy. I tried not to

H be duplicitous with them. I tried to be as honest as . I

12 could. Obviously, we kept hoping with each time that the

13 issue came before the Congress that, well, three or four

14 more months, let's see if can't last until then. And

15 then, you know, a negative vote and you are down again.

16 And you wait until the next opportunity.

17 I did tell them that we were optimistic about

18 the April vote, which was only""four| somei months away, the

19 April, 1986, vote. Well, you know what happened to that

20 one. In any case, in what I consider an act of really

21 ' extraordinary good faith, they decided to bring

22 Chamorro's troops with them back inside, or take then

23 inside with them, into Nicaragua. And really, they were

24 kind of, you know, betting on the fact that there would

25 be the resumption of aid.

280

UNmSStFtED

1 BY MR. BARBADORO: (Resuming)

2 Q When was that?

3 A That was December, January of 1986.

4 Q Didn't you have some other leverage at that

5 point? Hadn't the humanitarian aid started at that

6 point?

7 A I don't know what impression you have or what

8 you've heard from others about the hiunanitarian aid, but

9 the humanitarian aid, for all the good it did in the

10 south, was virtually useless. He couldn't get the

11 deliveries. People inside were unable because they ~

12 didn't have adequate communications. The terrain was

13 horrible. They were illiterate, untrained in the

14 receiving of supplies, so the humanitarian aid, whatever

15 there was, as it was administrated by State went through

16 either the people there ^^^^^^HHH the various groups
^^^^^^^^^Hand I think w« maybe two

18 deliveries by air inside.

19 But it was a very unsatisfactory thing, what

20 it did more than anything else was it offered false hope

21 that was only satisfied to the commanders inside who

22 needed a hell of a lot more than just, you know, some

23 boots and uniforms and something. They needed everything

24 right down to salt, aspirin, and bandaids, and —

25 Q Did they go to the field with that hope? Take

yiraranED

281

1 your time. Take as much time as you need.

2 (A discussion was held off the record.)

3 MR. LIMAN: Back on the record. The whole

4 purpose of this inquiry is to learn.

5 THE WITNESS: The problem came about when

6 there was great optimism, great anticipation for the

7 people inside who had been deprived for so long to

8 receive something that would at least enable them to

9 survive. My anticipation, which I'm sure was

10 communicated through me, through my officers to the

11 resistance was, oh, now we have $27 million that we have.

12 We can't give you guns and bullets but at least you will

13 have, you will be able to take care of your people.

14 And the $27 million, whether it was

15 administratively misused or not misused, or however, we

16 found that while the State Department people did as good

17 as could be expected, there was never a substantive

18 assistance given to the people in the southern front.

19 There are lots of technical reasons, I guess, why —

20 planes, flight crews,' getting the stuff on a timely

21 basis, whether it be pants and shoes and medicines.

22 And there were instances and 1 can recall one

23 where the plane full of nonVlethal supplies, paid for by

24 NHAO, had to make an emergency landing in ^^*HH||^|

25 International Airport in the middle of the night with a

282

.UNC[]!S»D

1 blown engif

2 I sent my deputy out to the airport and he was

3 able to keep the crew on board. Finally, the customs

4 people came out and said, what's on there? And the

5 deputy sort of said, well, this is a private flight, and

6 so forth. And then — not indicating what it was — but

7 it was loaded with boots and so forth, all with stenciled

8 markings on these big plastic bags full of supplies.

9 And then, finally, when the plane took off, it
10 again had another problem and it landed it ^^^^^^^^^1

^^^I^Pwhere was conf iscated^^^^^^^^^^^^^B

12 helped out through our^^^^^^f^^Hfriends, tellingjMHt

13 ^^^^^^^Hthat in fact there was a flight planned for

14 that aircraft from^^^^^^f I mean, it was just a badly

15 run Mickey Mouse operation. And what happened was the

16 people inside who expected better didn't get what was

17 expected.

18 BY MR. BARBADORO: (Resuming)

19 Q Did they go to the field in part with the hope

20 that th«y were going to be given some of this

21 humanitarian aid?

22 A Well, they were already in the field. They

23 had been there since 1982, and they said, as they still

24 say to this day, that with our help or without our help,

25 they are going to continue the fight.

mmm

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UNCUiSSIHED

X Q In January, you signed an agreement, or an

2 agr««m«nt was signad, with th« southern front commanders,

3 was it not?

4 A Yes.

5 Q Who negotiated that agreement?

6 A We mediated it.

7 Q Who is we?

8 A The station officers.

9 Q Who was involved in the negotiations?
A The ARDE commanders negotiating with Negro

11 Chamorro, and, for the UNO people, Alfonso Robelo, Negro

12 Chamorro.

13 Q Were there any representations made —

14 A Maybe facilitated would be a better word than

15 mediated.

Ig Q Okay, were there any representations made by

17 the UNO people as to what kind of support the southern

18 front people would get?

19 A I think there was, but I can't answer with any

20 degree' of certainty. I'd have to look at the cable

21 traffic for that period.

22 Q Was there anything said about military support
2 3 for them? Were they going to help them get arms?

24 A I hesitate to say yes, but I'm not sure

25 because I'm not sure.

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Q Was there anything said to them about how they
were going to get food and medical supplies?

A Yes, well you know, we had — that was another
problem. You see, all of the supplies going into these
people had to be done by air or by sea. It could not be
done over the land for a number of

Secondly, the Sandinistas, the Sandinista

Th« Sandinistas either patrolled or had mined
all of th« trails on the Nlcaraguan side. We even feared
that they may have crossed on some occasions because we
had reports of mines going off on^^^^^^^^^^^J side .
The Sandinistas crossed over and mined parts °^^^B^^|
^^^Hslde. So, any kind of — for example, if you
wanted to send 50 100-pound bags of rice into Nicaragua,
you couldn't do it by land. I mean, you couldn't put it
in th« back of a truck and send it up because there was

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no way to gat it in and that was tha onca you got it
across ^^^^^^H thara was nobody who was going to carry
it north.

So all of the supplies had to go in by air.
That's why wa had countad so much on tha Nicaraguan
Humanitarian Affairs Office to provide the air delivery
of the supplies.

Q Did the FDN have the capacity to fly flights
directly to the resistance forces in the south?

A Well, they had a couple of old planes — a C-
47, I think, and I think they had a DC-6, but it was, on
the ground out of service more than it was up in the air.
And then there was a problem with some of the pilots
where they were afraid to fly in hostile territory.
Well, you can imagine how much more difficult it would be

south^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^l
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H than
have bean from their own.

So what we ended up with was the situation
whereby they took — the easy path was taken. Sure, they
supplied, the $27 million was used to supply the people
it was easiest to get deliveries to. But the people who
needed it so badly, the ones in the south, with the
exception of one, maybe two, flights, they got nothing.

Q Was the FDN capable of flying!

\imm"i^

286

1 southern Nicaragua and back without stopping for fuel

2 somewhere?

3 A I think tfle plane is capable of flying, but

4 I'm not sure. I mean, if the plane was in perfect

5 operational condition, it would be capable of doing it.

6 But, from my understanding of what those planes were like

7 in terms of their avionics, or lack of avionics, and

8 their age and their mechanical condition, I don't think

9 they could have made it all the way down and all the way

10 back.

11 It would have had to have been done by

12 Nicaraguan Humanitarian Assistance people contracting

13 with commercial companies.

14 Q When that agreement was reached in January did

15 the commanders, the southern front commanders, think they

16 were going to be supplied? What was said to them about

17 how they were going to be supplied?

18 A I'm not sure. I'm just not sure. I know I

19 emphasized the fact that the program was coming up for a

20 vote again in April and that the resumption of support

21 would be official support if the Congress voted the

22 funds.

23 Q Did they come out of the field in January to

24 negotiate this agreement?

25 A Four or five commanders did. You'd have to

UNet.ill^lED

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UNCLASSIFIED

1 look at the traffic.

2 Q Right. And that was negotiateq

3 A (Nods in the affirmative.)

4 Q And then they went back into the field?

5 A And then they went back. Yes, I think they

6 all went back. One or two may have stayed behind to get

7 some medical problems taken care.

8 Q Weren't they going to depend on the private

9 benefactors to resupply them in January?

10 ' A The private benefactors, to the best of my

11 knowledge, at that time did not have their act together

12 yet. In other words, to be able to supply them from, to

13 be able to supply them in the south.

14 Q How were they going to be supplied when they

15 went back in to fight? Who was going to give them the

16 medicine that they needed and tha food that they needed?

17 • A • Well, wa gave them — I know when Negro

18 Chamorro's people went back in, we gave them or Negro

19 Chamorro got from the Nicaraguan humanitarian, as much as

20 thay could carry on their backs.

21 Q But they were going in for a long time.

22 A Thay had been in for a long time, okay? They

23 had been in since 1982 and they had done without, with

24 the exception of a very little bit that Pastora was able

25 to give them. They had been living, surviving throughout

IfflttAmiED

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UNGIiA^IEiJ

1 that period. They were really guerrillas in the true

2 sense of the word, at least much better guerrillas than

3 the people in the north in that they were able to capture

4 supplies from their adversaries.

5 Q It was clear in June of 1986, based on the

6 messages that you were sending, that you were very

7 concerned about these people that were out in southern

8 Nicaragua fighting, that they may be starving to death,

9 that they had mountain leprosy. You were concerned about.

10 that in June. Were you concerned about that in January?

11 A Yes, and the previous January. Yes,

12 throughout the time I was there.

13 Q How did you think they were going to be

14 supplied?

15 A (Nods in the negative.) Until the private

16 benefactors at the end of January, early February, were

17 able to, when they came, when they made, when they

18 offered to deliver the supplies, I didn't know how they

19 were going to do it.

20 0 When did you get the offer from the private

21 benefactors?

22 A It was late January, early February, I

23 believe.

24 Q How was the offer communicated?

25 A You are really testing my memory with this.

lEtASStFIED

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UNfiWriED

1 Q I understand. How was the offer communicated?

2 A Either from Colonel North — I guess it was

3 from Colonel North.

4 Q Do you?

5 A Oh, yeah.

6 Q And how was that communication accomplished,

7 by telephone?

8 A Yes, I think so.

9 Q Tell me about that call.

10 A I was on the phone a lot with Colonel North.

11 And of course everybody here in Washington was very

12 excited, I guess, about the alliance, the pact, the

13 agreement that had been signed among what we now call the

14 non4aligned commanders, as to distinguish them from the

15 ARDE commanders and Negro Chamorro.

16 I was on the phone frequently with North, but

17 in spurts. It might be three or four weeks that would go

18 by that I wouldn't talk to him, and then I might talk to

19 hia three or four times in a row, days in a row, and this
2 0 was on a secure line from the embassy to his office at

21 the NSC. I have to assume that it was at this time,

22 during this period, because it seems like the natural

23 time sec[uenc« that he said that the private benefactors

24 were prepared to deliver a plane load of supplies to the

25 people ina

"imiKm

290

umASStnED

1 This was after the pact had already been

2 signed and after the commanders had returned inside — or

3 at least Z no longer had contact. I had no longer direct

4 contact with the commanders. There's a point I wanted to

5 make. Yes, okay. So he said that he had, that he could

6 arrange, or that delivery could be arranged. Although I

7 don't think he said that he had direct control, my

8 impression is that he certainly would be influential or

9 could be influential in seeing to it that the southern

10 front got some supplies.

11 Okay, I'm giving you impressions. Again, I

12 could be off on the timing of this.

13 Q Let me give you a point of reference. North

14 and his family came to visitjH^^^^Hin December.

15 A Ko.

16 ' Q NO? You tell B« the date.

17 A Late February, March. About then.

18 Q Okay. Was it before or after this visit that

19 North told you that the private benefactors might be able

20 to help support the southern front?

21 A Before.

22 Q Okay. So you're thinking is that it probably

23 was sometime after the agreement was signed with the

24 southern front commanders and sometime before February

25 when North and his family came down?

It!

NttJCTIED

291

1 A To the best of my recollection, yes. Again, I

2 say it's hazy. But it certainly was after the

3 conmanders.

4 MR. LIMAN: Did he use the term private

5 benefactors.

6 THE WITNESS: Private sources, private

7 something.

8 MR. LIMAN: The term private benefactors

9 ultimately came into your vocabulary didn't it?

10 THE WITNESS: Yes. I think it may have been

11 me that used the word for the first time, benefactor.- I

12 don't )cnow why.

13 MR. LIMAN: Did you know who they were, when

14 North said that he could arrange the private airlift of

15 supplies?

16 THE WITNESS: No, sir. And of my own

17 knowledge to this day, I do not know who they are.

18 MR. LIMAN: And why did you ask North about

19 arranging the private airlift as opposed to^^^g

20 THE WITNESS: I don't know. No, no, it was

21 North who offered it to us in the south. Now let me get

22 back to something else. I think I have the point I

23 wanted to make.

24 It was my understanding also at that time

25 that, based on or as an outcome of the Nicaraguan

292

UmWE

humanitarian assistance and the communications
assistance, that it was proper for me to pass information
to the resistance which would or which could be used for
the safe delivery of supplies to them. Let's see, I got
a bit ahead of myself.

So when North offered to arrange for the
private benefactors to deliver supplies, my question was
a question of is this legal, is this proper, for me. He
said, well, actually all you'd be doing is passing
information in terms of where the drop zones are, which
would be Information I would obtain from the commanders
inside, and, on the other hand, to pass information to
the commanders when the drop was expected, and how they
should be — that they should be positioned to receive
it. That seemed acceptable to me to play that role.

Now what was your other question? I thought
you asked a question and then Tom passed you a question.

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^aJ/BV Ja)

/O K^L-

294

Q Around this time, did you hav« any discussion
with^HBabout tha building of an airstrip in Costa
Rica? ^

A August of 1985?

Q Yes.

A No. The idea I don't even think had been

iiiraiss

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Q Th« ABbassador started in Costa Rlca< in July
of 1985 is that right?

A y«s, correct.

Q Ambassador Tanbs has testified in his
deposition that he was sent to Costa Rica with his
principal instruction being the opening of the southern
front. Did he tell you that

A Immediately

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UNOAfflED

1 mat at hla resldance with th« dafansa attacha and with

2 tha deputy chiaf of mission at which tima ha said that

3 his mission in Costa *Rica was tha — what was it? -- was

4 tha astablishmant or tha davalopmant or tha support of

5 tha southern front in tarms, as I understood them, of

6 both military and political.

7 Q Did ha say who had given him that mission?

8 A Yes.

9 Q Who was that?
10 ' A Colonel North.

\\ Q What else did he tell you about what North-.ha<*

12 told hlB?

13 A I don't
14

^^^^^^^^^^^^^^^■j And remember

16 the meeting other than that or any more.

17 Q Did it eurpriee that an ambassador wae being

18 given an aesignment to establish a southern front by a

19 National Security Council staff officer?

20 A No.

21 Q Did you understand the Ambassador's

2 2 instructlone from Colonel North to be consistent with tha

2 3 requirements of the Boland Amendment?

24 A Yes.

25 Q How could tha Ambassador establish a military

!INiro!F!ED

298

OmfflED

1 front in southern Nicaragua consistent with the

2 requirements of the Boland Amendment?

3 A Well, my interpretation, as I reflect on it,

4 and I'm not sure what my thought was then, but this is my

5 impression of that conversation now, is that he was

6 talking in a generic sense about the southern front, the

7 southern front he meant in a political as well as the

8 military, and essentially trying to do the same things I

9 was doing in keeping the southern front military viable

10 in terms of its position vis-a-vis the political side,

11 and to encourage them not to lose faith, not to lose.

12 hope, that things would change as the Sandinistas

13 demonstrated more and more the totalitarian aspects and

14 that the Congress would get — that's what I would have

15 understood it to mean.

16 1 certainly didn't infer from what he said nor

17 did I think he meant to imply that there was any kind of

18 violation of the Boland Amendment intended.

19 Q So you took his instructions to be to give

20 moral support to the military forces in the south and

21 nothing more until Boland was changed?

22 A Well, to support my operational activities.

23 My operation activities, that he would do whatever was

24 necessary in support of what we had as specific

25 operational objectives, that being to keep the political

limSStflED

299

Q At any point in 1985 did you t«il th«
Ambassador about th« CIA's plan not to hava contact with
Pastora and to separata him from his commandars?

' A Th« Ambassador was wall awara of my efforts to
alavata tha status of UNO and to diminish tha status. of
Pastora.

Q Okay. In that initial maating with tha
Ambassador that you described earlier did he tell you
about hi* desire to have a Contra resupply airfield
constructed in Costa Rica?

A No, I don't recall that.

Q Did you have discussions with the Ambassador

prior to|H|August ^^iHJi^ll^^H^B ^"

was apparently a discussion about the building of an

airfield in Costa Rica for Contra resupply?

A There may have been in conceptual terms. I'm
sure I said to him things like, you )cnow, if we aver get
the money it would be great to get an airf ield^^Jin
Costa Rica to be able to resupply these people inside and

urawiE!)

300

wmmm

so forth and so on. But I can't specifically remember it
I actually spoke in such definitive terms.

iTambs and I

probably did discuss in conceptual terms such a thing
because he was the type of person that you could talk in
conceptual terms to, and then he would suddenly run off
with the ball and sometimes before you could reach out to
him and pull him back in, he had done something or other
that -perhaps had gone beyond, you know, just
brainstorming.

Q Was it in your mind of August, 1985, that an
airfield would be helpful to the Contra resupply effort
if the CIA were ever to get back into business?

A Absolutely. Absolutely. I mean, it was an
essential in my view.

Q Did you ever tell that to anybody?

A Oh, I'm sure 1 did. I mean, why not? Why
wouldn't I have? Sure I would have.

Q Did you ever tell it to Colonel North?

A I don't think so. August of 198 5? I didn't
have — I don't know. I don't think so, but I don't
know.

Q Let me ask you this. Colonel North's travel
records show that on August 10, 1985, he made a one-day

301

1 ^rlp^^^^^^^^^|. H« laft on th«, It Is my

2 understanding he left on the 9th, was there on the 10th,

3 and came back on the 10th. Did you meet with him at that

4 time?

5 A Did he travel with^^^^

6 Q I can only tell you what his travel records

7 show. Hang on just a minute.

8 A I don't know.

9 Q Hang on just a minute.

10 • 1 will represent to you that his travel

11 records show that he left Dulles on August 10, arrived
that day |^^^^^^V and leftfl^H^f the next day

13 the 11th. Do you recall meeting with Colonel North on

14 that trip?

15 A I don't have any recollection of that trip

16 whatsoever.

17 Q Between August of 1984, whe« you first met
North, 1985'^^^^^^^^^^^^^^^^^^^^|

19 ^^^^^^^^H did you have any meetings with North?

20 A Although I can't give you dates, I believe I

21 did, and to my recollection is that I met with him here

22 in Washington a couple of times.

23 Q What were the purposes of those meetings?

24 A Again, this is general impressions because I

25 can't recall the exact discussions — to keep up a

302

1 friendship or an acquaintanceship. At that time I found

2 him to be very bright, articulate, charismatic. I

3 enjoyed being with him. He certainly had a thorough

4 grasp of the political dynamics involved on my side of

5 the activities. I found that he was very sympathetic to

6 my views concerning the political situation there.

7 After all, he was Deputy Director of Political'

3 Military Affairs for Central America. I also )cnew that

9 he was on this RIG, this regional, or whatever it is.

10 . Q This Restricted Interfagency Group?

11 A Yes. This Restricted Inter+^gency Group. And

12 obviously I felt that it behooved me to be able to get my

13 thoughts, give him my impressions, my views, about what

14 was happening so that he would essentially represent,

15 accurately represent, again in my view, the political

16 situation in the south. So there was the personal side

17 and there was the political side.

18 Q Did you decide in August of 1984 that you

19 wanted to develop this acquaintanceship?

20 A No.

21 Q When did you decide that you wanted to develop

22 this relationship with Colonel North?

23 A I think several months after that I was up

24 here and I just gave him a call, as I do with people. I

25 call them up to say hi, how are you, why don't we get

itJ

303

muwm

1 together for a b««r.

2 Q Wh«n was tha naxt tina you racall maating with

3 him aftar August of 1984?

4 A I don't know.

5 Q And do you think you saw him mayba twica up

6 hara?

7 A Yas, two or thraa timaa. I'd, you know, have

8 a beer near my hotel or at my hotel or something like

9 that. He'd come by on his way home from work. We'd stop

10 and chat about things, that's all. I think once I did gb

11 over to the NSC office, but I'm not sure when that took

12 place — 1984, 1985, 1986. There wa« once in 1986, but I

13 don't remember when before that.

14 Q When was the first time you recall maating
him injj^^H^H

16 A When he travelled in December of 198 —

17 Q With McFarlane?

18 A Yea. ,

19 Q That's 1985.

20 A No, it was December of 1984.

21 Q You're right, excuse me. Poindexter was

22 December of 1985.

23 A That's correct — Poindexter and North.

24 Q Yes.

2 5 A December of 1985.

'ii; J

304

UNCUSSIP

1 Q So th« next tima you saw North was in December

2 of 1984. The next time you saw him in ^^^^^^^| was in

3 December of 1984?

4 A That is correct.

5 Q And you saw him perhaps a couple of times

6 after that up in Washington?

7 A After August of 1984.

8 Q After December of 1984?

9 A After December of 1984? Let me think about

10 that^.

11 (Pause.)

12 Yes, yes, I guesa, I'd not sure.

13 Q During any of those meetings did you discuss

14 with him the status of the southern front forces?

15 A Of course.

16 Q Did he give you any indication as to how they

17 might be resupplied during the period the Boland

18 Amendment was in effect? ,

19 A No. Not that X recall.

2 0 Q He didn't mention to you at that time the

21 possibility of private sources being used to supply the

22 Contras?

23 A No. You know, I can't definitively answer

24 that question, but my impression is that he did not.

25 Q Did you discuss with him in any of these

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yNCtASSKO

meetings your belief that an airstrip needed to be
constimcted in Costa Rica it the southern front were to
be properly resupplied?

A Z would have to give the same answer to that
question. Until, of course, this August of 1985 period,
I don't think the question of an airstrip came up at any
time before Tambs arrived in Costa Rica, okay? That's
July of 1985. My impression would be it just wasn't, it
wasn't a viable thing, all right, to even have discussed
it. -

And the other point was Pastors 's people were
still Pastora's people. Chamorro's people weren't
inside. If there was any talk of it — and my impression
now is that there wasn't, and I could be mistaken, but my
impression is that there wasn't — it was because it
sinply wasn't viaQile yet.

Q By August 12 it had apparently become viable

Is that right?
A Well, it was viable as far as Ambassador Tambs
is concerned, okay?

If it came up with him, and gee, wouldn't it

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b* graat If, you ]cnow, w« could g«t sooathing ready now
for wh«n«ver w« get the resumption of funds and so forth
and so on. And there was obviously, and this is an
important point to make, a great deal of tension at least
from our perspective, mine, the CIA station chief, and on
his part because the presence of these people
^^^^^^^■had, and I certainly must have added to the
Ambassador's concerns, because these people were creating
such a difficult situation

can't you get those people under control?
Can't you'do it, look, they juat do this and that, I mean
it was just one headache after another.

Q So you had to find a way to get them into
Nicaragua '

A wanted them out^^^^^^^^^H How they

were going to get in?

They certainly had to get
their act together and their guts in place and say no
more ^^^^^^^^B sanctuary, let's go in and fight the
Sandinistas.

They were extremely — and that is not an
overstatement — they were extremely reluctant to do so.
Negro Chamorro to this day that I know of has yet to get

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insida Nicaragua. And tha last tima I remember Negro
Chamorro being Inside Nicaragua was in 1983 when he

the border ^^^^^^■^^^■^^^■■1 and
attacked, ir you can imagine, a guard post, a guard house
30 meters or 30 yards inside Nicaragua. And then when he
started to get his, when the Sandinistas counter-
attacked, he ran to a telephone on the(^HH^Hside and
dialed me in Washington, D.C., at Langley headquarters
asking for mortars!

(Laughter. )

So h«lp ne God! And I asked hin, where in the
hell are you calling from, and he said from the guard
P°3^ ^^^^^^^^B ^* said* we are under attack, you need
to send ma arms, and I said, you've got to be out of your
mind.

Q When was this?

A 1983. This is no joke. He called our outside
lin*.

Q Soma of your messages reflect that the fact
that Chzmorro did not have a lot of courage. Is that
right, that people were concerned that it was hard to get
him into Nicaragua to fight?

A That is an accurate representation. Ves, sir.
Well, getting back to this, if I may, if you don't mind I
would like to refer to some notes here that I wrote.

Mmms

308

NWSiFi!

Q No, that's fine.

A Immediately after the Tower Report came out to
correct some inaccuracies that I saw in there, that
question of the airstrip came up several times in the
Tower Commission Report. And just to give an
appreciation for what my recollection was at that time.

This refers to page C-12, right side of the
page -in the Tower Commission Report. Partially quoted
as, learned of the airstrip project from a CIA field
officer.

MR. WILSON: That was Tambs.

THE WITNESS: My comment is this statement by
Ambassador Tambs is inaccurate. According to my
recollection, the continuing presence of the Nicaraguan
resistance elements ^^^^^^^^^^^^^^^^^H caused
constant political friction]

who felt that these elements
were the responsibility of the U.S. government who had
been supporting them prior to the Boland Amendment cut
off.

Likewise, it was recognized that these
elements would not leave theirq|^|HU^m sanctuary
unless they could be routinely supplied inside southern

309

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Nicaragua. And ther« was no secure or practical means of
doing so other than by aerial resupply, which necessitated
a site in Costa Rica where the resupply aircraft could be
refueled.

BY MR. BARBADORO: (Resuming)
Q Let me ask about this. Oh, finish that.
A Coincidentally, there was a growing
apprehension'^

Ithat the Sandinistas would use their

military capabilities ^^^^^^^^^^^^" The
Sandinistas had already attacked]

[and did so with impunity.
Since Costa Rica has no army and depends on a
constabulary for its defense, authorities felt that other
arrangements for defensive resupply needed to be
considered — that is, a landing fielc

^HB where U.S. and other Rio Treaty pact nations could
land ■ilitary aircraft.

310

Q What did you understand this airstrip was
going to be used for?

A Initially I envisioned it as — let me stop
there. Let ne correct that. It my impression that at
the time ^^^^^^^^^^

lere was no thought, no thought
had been given either by Tambs and certainly not at that
point about who would build this airstrip, okay? It was
in the idea stage.

How it evolved, that the airstrip could be
built other than a U.S. government entity, it seems to ine
that that came from — that Tambs said, why don't we
raise it with Colonel North, with Ollie. Now, I am not

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■ur« of that, okay? And I'm not sura that it was evan
discusaad at that tima. It just seemed like a good idea
to think about.

MR. LIMAN: You'ra not sure about what — that
h« suggested that it be raised with North?

THE WITNESS: In answer to Mr. Barbadoro's
question, there is, or I infer that he's trying to, or
what's he getting at is how, what was the thinking behind
this at that point. 1 don't think that there was. I
recall what happened subsequently, but at that point it
was gee, it would be great if we got their approval, .as
though that was the first thing to do.

But there wasn't really anything after that as

well let'sj^^mUmBII^'' "^^
sort of to get them on board, and then we'll figure out
it will be done.

BY MR. BARBADORO: (Resuming)

Q in August it was a concept; you didn't have
ths details down.

A That's right.

Q But the concept was to have an airfield for,
and resupply depot for the Contras, wasn't it?

A And

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Q Who was going to do th« resupply? That's my
question.

A CIA.

Q Wasn't the Boland Anandment in effect?

A Oh, yes, yes. But please keep in mind that
throughout this period there waa always the optimistic
view that within the foreseeable future forces, political
forces, would be marshalled in Washington to ovcrturr) the
Boland Amendment. Now maybe it was three months down the
road or six months down the road. I don't think any of
us could have survived in that job without feeling that
way , okay?

Q So it was your hope that once you got approval
for this that it could be constructed somehow or that
when the CIA got back into business soon it would be used
for resupply?

313

2:
2:

2i
2!

I added, I said I wanted no Nicaraguan to ever
)cnow about the existence of this base||

I the air base.
MR. LIMAN: By Nicaraguan, you included

Contras?

okayl

THE WITNESS: That's who I was talking about,

MR. LIMAN: Okay.

THE WITNESS: Contras. Because. I mean there
is no such thing as a secret among the Contras. And in
my mind if this was to be a viable CIA air operation, the
Binut* we told the Contras that such a place existed,
th«r« wouldn't be an air operation. There wouldn't be
anything secret about this place.

Il was clearly thinking
ahead to the point where we, CIA, would be able to have a
secret place that was not known to the Contra elements.
BY MR. BARBADORO: (Resuming)
Q I understand. Now tell me, when did you first
get an idea as to how this airfield was actually going

to be built?

yiibWIED

314

ONwsifia

1 A Sometime after this — a week, two weeks, I

2 don't recall — the Ambassador called me into his office

3 and he said there is somebody here I want you to meet.

4 So I went in and there was a young man sitting in front

5 of his desk and he introduced him to me as Rob Owen.

6 I had he^rd about Rob Owen. We had numerous

7 reports about Rob Owen's activities in Costa Rica with

8 his contacts with the various Contra elements. However,

9 we had no contact with him nor were we really interested

10 in contact with him because he was an Aaerican citizen.

11 Q Did you know that he was associated with Korth

12 at this time?

13 A I did not know that he was associated with

14 North. I assumed that it was the Ambassador who told me

15 that he is associated with North. That was th« first

16 definitive information I had that there was a definite

17 relationship between North and Owen.

18 Q Tell me what happened at that meeting.

19 A Now, to this day I still don't know, although

20 I have officially first-hand knowledge of who Rob Owen

21 was working for. I have read in the newspaper that he

22 was working for a firm here in Washington. But I didn't
2 3 know it then. And until he eventually went to work for

24 the State Department's Nicaraguan Humanitarian Assistance

25 Office, I didn't know.

UtimFIED

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Q T«ll m« about that meeting.

A At that meeting, to the best of my
recollection, the Ambassador raised the issue of building
the airstrip with Rob Owen with words to the effect of
why don't you take a trip up there and have a look at it.

Q Had a site already been chosen?

^^^^^^^^^^^^^H chose the in
minutes. The only site thatj^^^^^Hwould be adequate in
all of Costa Rica for this because of its isolation.

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MMSm

Getting back to the meeting, Rob Owen agreed
to go up and take a look at this site.

Q This was before the land had been purchased
from Hanilton? -,

A Oh, yes. This was just to look ^tl^^^^^^^J
I^^^I^^^^^^^^^^^^^^^^^^^^^^^^^H just to take a

look at the place.

Q And Tanbs asked you to go with Owen to look at
the site?

A I can't say that he asked me. I can't say how
it developed. But we agreed that I would accompany Owen
up there]

I understand. What happened next?

IVjw <#> I B

317

UNCUSSi

So w« want up, flew up th«r« in thej

halicoptar.
Who wa« with you?

Rob Ow«n, mysalf, and the pilot.
And we flew up to the site, and Rob walked it and took
photographs of it with a 35 millimeter camera. And then
we flew around the area and then we returned^^^^^^^^H
I later learned he took those films and delivered them to
Colonel North.

Q Did you have any discussion with Owen about
how the strip was going to be built?

A I don't remember. Well, yes, I guess we must
have. But there was only one way to build it because the
thing had hills or a mountain on each side and was sort
of an elongated canyon. And there was only one — now
somebody had said that former General Somoza of Nicaragua
had a farm near there and that ha used to land a plane
there whenever he came to spend his weekends. I am not
sure if that's true.

But the land was generally level. There was a
stream bed running through it. There were some trees
that would have had to have been knocked down. But it

IWftSStfiEB

318

yNi^Sii^lE

1 was totally isolated.
■2 MR. LIMAN: How did you learn that Owen tooJc

3 the films and delivered them to North?

4 THE WITNESS: Colonel North told me after he

5 received them and saw them. And that's where the —

6 BY MR. BARBAOORO: (Resuming)

7 Q Did Owen tell you who was going to build the

8 strip?

9 A No, sir. That's really the end of Owen's

10 participation. Now let me just complete the contact with

11 Owen so that we don't misunderstand. Oven didn't have

12 anything to do with that activity after that. Owen

13 amazingly, in my view, had contact with a very wide

14 circle of people in the resistance movement. And what's

15 amazing about it is that he doesn't speak Spanish. But

16 he is a very engaging, highly intelligent individual.

17 And he wins people over. He Knows how to ask questions.

18 And so, when the Ambassador introduced him to

19 me, I asked him about his interest in these people and he

20 said, well, he just keeps in touch with him, that he had

21 been a long-time friend of John Hull, and through John
Hull he had met a lot of these individualsH^^f^^^^H

24 Subsequently he volunteered a lot of

25 information to us, operational information, especially

319

about tha llttl* conflicts among som« ot tha groups that
w« rsally didn't havs a good handls on. w« found his
infomation to b« accurat* in most casas. Wa fodnd that
his, and wa did not task him bacausa wa couldn't; as an
Amarican citizan, ha was maraly voluntaaring this stuff
to us and v« couldn't use him for intalliganca
collactlon. But it was claar that his intarasts wara
essantially our intarasts. ^

And at ona point I racallH^Hsaying that he
sura vould like to recruit this guy as an Agency officer
bacausa ha was an axtraaaly perceptive individual and, he
had 9oed instincts for the business. Contact existed
through, I guess — well certainly he then joined the
Nicaraguan Humanitarian Affairs Office in the State
Dapartaant .

That's when, when he did that, then we did
have a such Bore operational relationship. We were able
then to ask his a lot of questions about things that
before we could only get from him on a voluntary basis.
After the Kicaraguan humanitarian affairs thing, I don't
think we had any contact with him at all.

Q Let's go back to the visit at the site of the
airstrip. Did you tell anybody in haadcjuartars that you
had gone to look at the site of the airstrip?

A No. If I did, It would be in cable traffic,

320

and I don't recall writing a cabla about It. I

So 1 don't know. I don't know if I did a follow-up or
not.

Q Did you t«ll North that you had b«en out to
look at the airstrip?

A Oh, h« knew it because Owen had returned from
Costa Rica and gave him the filn.

Q When did you meet this fellow who identified
himself as Olnstead?

A Sometime after North told me he had received
the films of the strip. But I'm not sure of the sequence
of things. North told me that he was sending somebody
down to look into the possibility of building the
airstrip, which, of course, was kind of precipitous, in
my view, given the fact that we still didn't have, that
we hadn't resolved the Boland Amendment problem yet.

Q Let me stop here and go back to something.

A At that point he sent Olmstead down.

Q When did this conversation with North take
place when he told you about the films?

A Shortly after Owen returned and it was by

phone .

Did he initiate the call or did you?

321

^wmi

1 A Oh, I wouldn't know, because wa were on the

2 phone frequently, on the secure line. Either he had a

3 question to clarify or I had something that I wanted to

4 bring to his attention. And, as I said, there were

5 periods were we would go weeks without talking to each

6 other and then some matter would come up which was of

7 some import and I'd get on the phone and I'd say, you

8 know, be sure you are aware that this is going on or that

9 is going on.

10 And maybe as a part of one of those

11 conversations either way, he could have said, he did say,

12 oh, look, a got the film.

13 Q Tell me as best as you can remember what he

14 said about the films.

15 A That he had th« film* and the place looked

16 like it night well be suitable for an airstrip. That he

17 was going to eend this fellow down to take a look at it.

18 That's what I remember.

19 Q And what did you understand he was going to do

20 about this airstrip?

21 A Well at that point, nothing. I mean, it

22 wasn't even — it was only a conceptual thing.

23 MR. LIMAN: Do he say he was sending someone

24 down to make some plans for building it?

25 THE WITNESS: Well, that was really --

UHCriSSSIFIED

oo f?no /~\ oo 1 o

322

1 MR. LIMAN: Later?

2 THE WITNESS: Yes, that was later.

3 MR. LIMAN: He didn't talk to you about funds

4 in the phone call for building it?

5 THE WITNESS: He never talked to me about

6 funds .

7 MR. LIMAN: Never said —

8 THE WITNESS: Never said.

9 MR. LIMAN: Never said I will get the —

10 THE WITNESS: Never said a word to me about

11 funds at any time. And that's —

12 . MR. LIMAN: Did he ever make a point of saying

13 to you that I'm never going to talk aOsout funds with you?

14 THE WITNESS: No, sir.

15 MR. LIMAN: Did you ever ask him where he was

16 getting his funds?

17 THE WITNESS: No, sir.

18 MR. LIMAN: He never told you don't ask me?

19 THE WITNESS: No, no. Let me, let's get to

20 that for a moment. It was a matter of assumptions on my

21 part, perceptions — okay? He talked about people

22 without identifying them — that there were people who

23 were supportive — and he used euphemisms — supporters,

24 the private supporters, things like that.

25 MR. LIMAN: Patriotic Americans?

323

ilNettSStflEfl

1 THE WITNESS: Patriotic Americans. Good

2 Amaricans.

3 MR. LIMAH: Okay.

4 THE WITNESS: But in terms of cost, what would

5 it cost, that funds would coms from A, B, or C, no, that

6 in terms of that, okay. I did later learn in very, in

7 sort of a very nebulous way, that when they eventually —

8 "they", the private, the good Americans — made the deal

9 with Hamilton, that the arrangement — and I'm not really

10 clear on this — that the arrangement was purchase for

11 $50,000 for the property, with a second $50,000 in the

12 second year.

13 However, if they didn't come up with this

14 $50,000 in the second year, then some sort of a

15 lease/note thing would come about and that the owner

16 would repossess the property.

17 MR. LIMAH: The owner was Hamilton, because we

18 have another Hamilton who's the Chair on the House

19 Committee. This is a different Hamilton.

20 THE WITNESS: Yes. For the record.

21 MR. BARBADORO: Do you want to take a lunch

22 break and come back in half an hour, 4 5 minutes?

23 (Whereupon, at 12:45 p.m., the taking of the

24 instant deposition recessed, to reconvene at 1:30 p.m.

25 the same day. )

324

AFTEKNOON SESSION

(1:33 p. a.)

Whereupon,

th« witness herein, having been previously duly sworn,
was further examined and testified as follows:
EXAMINATION ON BEHALF OF THE SENATE COMMITTEE - Resumed
A BY MR. BAKBADORO:

^^^^^^^^^^H before we broke for lunch,
had -asked you about when you first heard that this
Olmstead fellow would be coming down to Costa Rica. Can
you tell me when you first learned of that?

A Sometime after Owen had returned with the
photographs and Colonel North mentioned that he was
sending someone down to look into the possibility of
this, constructing an airstrip at this site.

Q Can you give me a month as to when you went
out to look at the airstrip with Owen?

A Rough guess, September.

Q Okay. How about a guess or estimate as to
when it was that Olmstead came down?
A Same month.
Q Did North mention a name of a person to you

\mmm

325

1 wh«n h« said somaon* would b« coming down?
' 2 A y«s, h* said he would b« coming down,

3 mantionad th« nam* of th* person, and then he said that

4 he would — I don't recall if North told me what name he

5 would be using or if it was Olmstead himself who told me

6 that he was using the name Olmstead, okay.

7 Q Did North give you the guy's real name?

8 K Yes.

9 Q What was his name?

10 ' A To the beet of my recollection it was Haskell

11 or Hastings or the H-A-S or H-A-Z eound was — I think it

12 was Haskell.

13 Q You think it was Haskell?

14 A I think it was Haskell.

15 Q How long after this phone call —

16 A Do you know his name? I mean, just out of

17 curiosity.

18 Q I believe it's Haskell. I do know his name

19 and I think you're right, it is Haskell. What else did

20 ha tell you about this person?

21 A That he would be the responsible person for

22 looking into dealing with the owner of the property.

23 We're getting ahead of ourselves, though.

24 At some point after Owen took the film back,

25 but before Olmstead came down. North asked — I think

l|l«»l)

326

ONOl^SIFIED

1 North as]c«d th« Ambassador, bscaus* th«y had contact too,

2 or h« may hav« asksd m«; I know I talkad to th«

3 Aabassador about It, but how it got to that point X don't

4 ramambar — who tha ownar of tha proparty was. ^^H^^B
m^^HHHHHHJI^H told ma, that tha ownar this

6 proparty was an Amarican.

7 Hall, bacausa of CIA rastrictions about

8 daaling with Aaaricans or any contact with Aaaricans,

9 unlass it's, bacausa of tha aattar of an intalliganca

10 ralationship, wa, I don't know if you'ra awara of this,

11 wa hava to inform an Amarican whan wa talk to tham who wa

12 ara. So Z wantad to avoid that.

13 ^^^^^^^^^1^°^*^ "* ^^'^^ ^** '^ Amarican,

14 and it was a fallow by tha nama of Hamilton, not to be

15 confusad with tha Chairman, and that North aakad, as I

16 say ha aithar askad ma or ha askad tha Ambassador, but

17 tha Ambassador and I talkad about it, could wa find out,

18 or could it ba datarminad if ha was, if Hamilton was

19 somaona who would cooparata with, who would ba

20 cooparativa. I don't think — thara's no with — who

21 would b« cooparativa in tarms of making this proparty

22 available.

23 'I^^^^^Hvoluntaarad that ha thought that tha

24 fallow would ba cooparativ«
25

327

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^^^^^ that th« f«llow
was a right-thinking individual.

In any casa, I don't know whara tha Aobassador
found out or how tha Aabaaaador found out — could again
hava ^••nHilllHIHI ~~ ^^^ ^^* ^'l^ov was from North
Carolina. Ha was in tha taxtila industry in North
Carolina and ha had a soma aort of taxtila businasa in
San Josa. So tha Aabaaaador callad up Sanator Halas'
offica, in ay praaanca, and ha apoka to Sanator Halaa'
Adainiatrativa Aaaiatant, I baliava.

And ha askad hia or har to find out what they
could dataraina about thia individual 'a political
attitudaa — Taaba to Halas offica, aithar that day or
tha naxt day or tha day aftar, at aoaa point in thara.
Ha racaivad a call back froa Halaa 'a offica.

Q In that firat call did tha Aabaaaador say why
ha wantad to ]cnow this?

A Ha aaid that this is an Aaarican businassaan
hara in Coata Rica, and that ha just wantad to know
aoaathing about hia. So, aa I said, tha aubaaquant call
back, tha anawar was, ha 'a all right, wa guaaa, bacausa
ha aada contributions to both caapaigna. And I just
happan to raaaabar that aa baing kind of an unusual

UNtDOTED

328

1 comffl«nt by Senator Helms 's office.

2 In any case, there was no derogatory

3 information about th* individual, that he was strictly a

4 businessman. And then Olmstead came to town. It gets

5 very fuzzy in here, okay. So please bear with me.

6 Q Did Olmstead meet with you when he came to

7 town?

8 A Oh yes, when he cam* to town, yes. And I

9 learned that, I forget whether he — he had some problem

10 with' his passport, or he didn't have a passport, because

11 you can to Costa Rica on a tourist card just showing your

12 driver's license or some other form of identification.

13 And he didn't want to use his tourist card at

14 a hotel where he would have to show some identification

15 and he didn't want to use a credit card, if he even had

16 one. So he asked me how he could take care of that, and

17 I said well, just simply go into any of the smaller

18 hotels and tell them that you were fishing up country and

19 something, and you lost your passport and your wallet,

20 but you have some cash, and the passport is being

21 replaced, and they'll check you in.

22 And that's what he did. As I understand, he

23 did it on subsequent visits as well. So, I'm not sure if

24 he actually had a passport in the name of Olmstead or if

25 — what the circumstances were in that regard.

UNtMFIED

329

UNCLASSIFIED

X Summing It up, h« mat with Hamilton. H«

2 n«gotiat«d a contract with Hamilton, which as I racall

3 was, and I m«t with him s«v«ral timas aftar that, to

4 racaiva from him a raport on how it was going^^^^^^^^H
B^H^I^^^^^^H But participata him

6 this thing, what seemed to ba a protractad negotiation --

7 through October, November of 1985.

8 Q Did ha stay down there or did ha make several

9 trips?

10 - A No, no. He would ba do%m there for one, two

11 days, and then he would go back, and then he'd come back,

12 and so forth.

13 Q Did he tell whether he was going to buy the

14 property or lease it?

15 A He did say it, but I don't remember it. It

16 was one or the other, or a fora of buy with or lease with

17 option to buy or buy with sort of a balloon note at the

18 end. In any case, there was a point at which, as I

19 understand from the Ambassador, from what the Ambassador

20 told me, that Hamilton did not want to get involved with

21 this group of businessmen that Olmstead represented.

22 Q Did Olmstead tell you what his story was to

23 Hamilton about what the property would be used for?

24 A Just as a group of businessmen who are

25 interested In putting up a tourist resort. It's my

'■■■ ■ "idOi. Jl

330

1 loprasslon that at soma point, Olmstead probably gave a

2 lot of winking to th« guy who realized who, you know,

3 probably asked who would be putting up a tourist resort

4 in this place where there was no road for 20 miles.

5 I'm trying to keep the sequence of this, the

6 reason being that at some point the Ambassador contacted

7 Hamilton and told Hamilton that the place was to be used

8 for an activity in support of the Nicaraguan resistance

9 and that he, Hamilton, would be doing his country a

10 service.

11 Hamilton, as Z recall the Ambassador telling

12 me, asked about the reliability or the trustworthiness of

13 these individuals that Olmstead represented. And the

14 Ambassador assured him that, gave him personal assurance,

15 that they were of the utmost trustworthiness.

16 Q Did Olmstead tell you who he was working for?

17 A NO.

18 Q Did he tell you where the money was coming

19 from to pay Hamilton?

20 A No. As I said, the only time a figure was

21 raised was that figure of $50,000, and Z could be

22 mistaken on that. And Z don't know hov the $50,000

23 worked aa a mortgage payment.

24 Q Did you have at that time any idea where the

25 $50,000 was coming from?

UmSSIFIED

331

wsmm

9«

1 A No, sir. Zn fact, Z didn't haar that figure

2 until Buch later. Z don't think Z heard that figur*

3 until auch latar. Zt'a By iBpraaaion that tha figure of

4 the $S0,000 caBe up at aoBe tiae later on, not during the

5 OlBStead discueeione. Olaatead said that Haailton was,

6 as part of the agreeaent for this year or two-year, a

7 year renewable, two for two years, agreeaent, that he

8 wanted a road put in froa the highway to this property

9 which was adjacent to the coast through soae of the aost

10 rugged terrain in northern Costa Rica.

11 And to a« that would have cost an enomous.

12 aaount of aoney to do it. Z think that originally, until

13 they realized that how iapossible this was, because these

14 were steep canyons as so forth, that probably out of good

15 faith, Olaatead said, had told ha said that ha had agreed

16 to putting in thia road.

17 Tha other thing that Haailton inalatad on was
IB sinking a wall at tha alta and finally, that the property

19 not be ecologically disturbed. Thia waa iaportant, and

20 in fact I aupportad that atrongly when Z heard it.
21
22
23
24
25 Not only that, along the strip of the cove

UNtCIOTED

332

UNIM»ED

1 juat vh«r« th« airstrip was to b* built, about a quarter

2 of a mil* from where the airstrip was to be built, is a

3 place where turtles com* in and lay eggs, and it has been

4 a constant problem of poachers in the area coming and

5 taking the turtle eggs.

6 And so that was basically all that Heunilton

7 insisted on — the road, the sinking of th* w*ll, and the

8 ecological portion of it — all of which Hamilton told me

9 at one time or another. But th* road —

10 MR. LIMAN: You mean Olmstcad told you that.

11 THE WITNESS: Who did I say?

12 MR. LIMAN: Hamilton.

13 THE WITNESS: No, Hamilton. Olmstead told me

14 h* had with Hamilton, th* discussions h* had with

15 Hamilton. And what *ls*?

16 BY MR. BARBAOORO: (R*suBing)

17 Q Did this 01m*t*ad/Has]c*lI t*ll you anything

18 about what hi* r*lationship va* to North?

19 A That th*y w*r* good fri*nds. North told m*

20 that th*y w*r*, that h* was v*ry, v*ry clos* to this man.

21 H* •\i]b**qu*ntly told n* a f*v month* lat*r that Olmstead

22 wa* a Marin* Corp* offic*r who — again, I might not have

23 it correct — but that olmstaad had lost hi* *y* and was

24 •«v*r*ly wound*d in th* fac*, and that North brought him

25 out from bahind *n*my lines in southeast Asia.

uimssinED

333

1 And that th« bond b«tw««n th«« was v«ry, vary

2 cloaa. 1 undaratood that ha waa an accountant, or had an

3 accounting buainasa- And tha othar thing that Morth said

4 was that ha waa doing all of this, going dotm to Costa

5 Rica and so forth, at his own axpansa. At soaa point,

6 aftar I think thay had, and I'm not sura of this, but

7 aftar thay had aithar mada tha agraanant with Haailton or

8 just bafora, Olastaad cama down with a aoila apacialist,

9 an anginaar, Rafaal Quintaro.

10 Thara wara four of than. Four or fiva paopla.

^^^^^^^^^^H I at thair raquast, for thaaa

12 paopla to go up to do a aurvay of tha araa whara tha

13 landing atrip waa to go in. I did not go with tham to

14 tha aita. 1 want with tham — I want to a placa naar by

15 bacauaa I was worriad about, you taiow, thair halicoptar

16 crash or whatavar thaaa paopla. But 1 did not go to tha

17 atrip with tham ao I don't know what thay did thara.

18 1 subsaquantly haard tha« diacuasing what thay

19 found, and froB what I could tall of thair findings, thay

20 said that tha soil was not suitabla, that tha placa was

21 not long anougb for tha purpoaa intandad, that

22 construction in that araa bacauaa of its isolation would

23 ba vary difficult. It was a vary nagativa raport.

24 Q Tha purpoaa intandad waa to build tha

25 airatrip?

\immm

334

1 A Oh, y«s, y«s. That was, as I aald, it vaa

2 aithar at tha and of tha nagotiatlons or juat aftar tha

3 nagotlatlona had baan complatad. And this would hava

4 baan Novambar 1985. I frankly laft that — whan I laft

5 that maating, I aaid, this thing is not going to go

6 anyvhara. Thara's too aany nagativas, too iapoaaibla to

7 do.

8 Tha naxt that happanad was that, and X don't,

9 Z'va navar saan Olostaad sinca than. Tha naxt that
10 happanad is that Quintaro cana down and Quintaro

contractad^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H

12 ^^^^^^H^^ atart bringing in a gradar and a bulldozar to

13 tha aita, and it had to ba brought in ovar this 20-soBa

14 milaa of canyons and mountains. And aftar that Quintaro

15 just routinely told aa how things vara going, and nona of

16 it want wall.

17 Q Whan did you laam that tha negotiations for

18 tha purchase of tha property ware auccassful?

19 A Noveaber or so.

20 Q Did you report that to anybody?

21 A No. You mean to ay headquarters?

22 Q Right.

23 A No.

24 Q You mentioned that Rafael Quintero came down

25 either shortly aftar or shortly before the negotiations

imSSIflED

335

1 w«r« compl«t«d?

2 A Wa'r* gattln? ahead of ours«lv«i. You just

3 r«mind«d m« of •oa«thing. And w« hav« to chacJt th«

4 chronology h«r«. I don't know wh«n Assistant Sscrstary

5 Abrams toolc ovsr from Tony Motlsy as Assistant Sscrstary

6 for Latin Amsrica. Ths rsason I'm bringing this up is

7 bscaus* —

8 MR. LZMAN: Spring of 1985.

9 THE WITNESS: That dossn't fit.

10 MR. BARBADORO: It was August of 198S.

11 MR. LIMAN: That's right.

12 THE WITNESS: That's right, It didn't fit.. Hs

13 C2m« down.

14 MR. LIMAN: Hs cams down,

15 THE WITNESS: Mo, it wasn't

16 Wsll, hs cams, this was sort of an orisntation trip.

17 BY KR. BARBADORO: (Rssumlng)

18 Q It was in Oscsmbsr of 1985 or Novsmbsr of

19 1985.

20 A All right. Wsll, it was in this psrlod hsrs,

21 oKay.

22 Q Ths psrlod whils ths nsgotiations wsrs going

23 on for ths purchass of ths land?

24 A Ths rsason your qusstion triggsrsd this, is

2 5 that, did you rsport this. Ths rsason it triggsrsd it is

336

^ 2

3
4
5

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

101

bacausa whan Abrams cama down thara, ha aakad or wa
arran^ad aa a mattar of protocol, a brlaflng Cor Abrana.

And than Abrama aat back and aaid, wall now,
tall na about Point Haat. Obvloualy at thla point, I had
aaaunad, Z guaaa naivaly, that thia waa assantially a
mattar of tha Ambaaaador'^^^^^^^H with ma
sitting aa a spactator listaning and tailing tha
Ambasaador and ao forth. Eaaantially, I aupposa, I
raalizad anyway, that thia waa at laaat unorthodox, my
involvamant with it.

MCTIED

337

1 But ones I h«ard that, Z was raally shoclcad,

2 taJcan aback, first of all that h« would cosa out and so

3 blatantly say, tall as all about Point Hast. Hot only

4 that, ha was sayin? it in front of two officars that had

5 no naad to know, that ha didn't avan ask if thay knaw and

6 should thay know. But obviously tha outcoma of all of it

7 was, that this was sonathing that avarybody in Washington
knaw iLbout, and hara was,^^^^^^^^^^^^^^Hthinking

9 Z had a real sacrat.

XO Q What did you tall Abrass?

11 A Oh, I told Abraas. Z said, sir, up until now

12 I thought that in Costa Rica thara wars only four or iCiva

13 paopls that knaw about this placa. Now, bacausa of your

14 question, thasa two officars, who had no naad to know,

15 now know. Oh, ha aaid, Z apologiza. Z'b sorry. Z

16 didn't raalizs it. And Z said, now tall aa somathing,

17 Mr. Sacratary, who up thara knows? Oh,^|^^H and

18 Colpnal North — Ollia, and^fHHjsr Z askad hia if

19 B^^Bknav. And ha said, oh, yas, of coursa; this was tha

20 RZG.

21 So Z said, well, okay. On tha ona hand Z was

22 upsat bacausa thasa two officars who wara raally, you

23 know, thay waran't privy to this thing, and yat, it was a

24 raliaf on ay part bacausa ay aupariors knaw.

25 Q Othar than]

|T/(

338

UNOASSiBED

103

1 ^^^^^^^^1 you hadn ' t told headquartars anythinc^ about

2 Point WMt, had you?
A As I sald^ X don't know If I did a follow-up

to that^^^^^^^^^^^^^^^J^^H^^^^^^^^^H
My recollection is that I probably didn't, Z don't think
I did, but Z Bay havs.

MR. LZMAM: Do you rscall whan Admiral
Polndsxtsr C2un« down to Central America right after he
was named National Security Adviser in December of 1985?

THE WITNESS: Yes.

MR. LIMAN: Did you meet with him?

THE WITNESS: As part of the country team?

MR. LIMAN: Yes.

THE WITNESS: Yes.

MR. LIMAN: You did meet with him.

THE WITNESS: Yes.

MR. LIMAN: And Oliver North was with him?

THE WITNESS: And Oliver North was with him.

MR. LIMAN: Did you discuss Point West with
hlB?

THE WITNESS; No, sir. That was a meeting
with the country team, which consisted of the AID
Director, the Chief of the Economic Section, Chief of
Political Section, the Deputy Chief of Mission, the
Defense Attache, et cetera, et cetera.

mmm

>iimmB

104

MR. LZKAN: It was just too public of a
■••ting for you to discuss It?

THE WITNESS: Right. At that Bsatlng, after
that masting, at tha and of It which too)c place outs Ida
of tha Embassy — thay wara only In town for an hour, so
wa didn't avan hava tlna to gat all tha way Into tha city
from tha airport. At tha and of that aaatlng^^^^^^^H
^^^Bcaaa and Admiral Polndaxtar Invltad hla to tha vnilta
Housa for a photo opportunity.

And that had baan alraady llnad up In that tha,
offar would mada, llnad up In cabla traffic, and so

who thara too ^^^^^^^^^^^^^^^^H

visit with a spaclal addition of tha
visit to tha Oval Of flea.

MR. LZMANs Was this to show appraciatlon for
his assistanca on Point Wast?

BY MR. BARBAOORO: (Rasuming)
Q Did you discuss Point Wast wlth^^^^^^^H O
whan ha was down thara with Polndaxtar for that trip in

llfiCraFIED

340

'Miumi

105

1 Oecembar?

2 A There wasn't enough time on that trip to even

3 discuss the really important things.

4 Q He was there only for a few hours.

5 A Please, if I may give you an appreciation

6 about everything we are discussing here, Tom asked me,

7 Tom Wilson asked me some time back how much did all this

8 represent in terms of — I'm talking about the air drops,

9 I'm talking about the ai^^strip ~ what did this

10 rcprjBsent in the totality of your work. About one

11 percent of my time.

12 So when you're asking questions, asking me to

13 recall dates, there has to be something associated with

14 it because, believe me, if I had 15 minutes withHHHl

15 wouldn't even have bothered asking about Point West,

16 because it really didn't mean anything to me in terms of

17 the much more important issues and problems that we had
with the oveijall^^^^^^^^^^^^^^B

^^^^^^^^^^^^^^^^^^Ell of the other

20 operations that we had going at the time.

21 Q When do you first recall discussing Point west

Withf^HH Cm

23 A 1 think it was at headquarters, and I can't

24 possibly remember the date. It could have been late '85;

25 it could have been early '86. I don't know how it came

msmiED

341

-1

iimmiBB

106

out, but^^^B '''*"^^°'^*^ Point West and I said yeah, you
know. It's under construction or whatever it was. ^

Q Who brought up Point West, you <3i^ ^^^H

A I don'l^i,recall.

Q Did ^^^H appear to )cnow about it?

A Oh, yes. Oh, definitely.

Let me bring up another name because it adds
to the totality of impression in my mind as to the level
of knowledge about Point West. As you mentioned earlier.
North and his family came to spend a few days with me and
my family on a completely personal trip. At the end .—
forgive me if I interject some humor here — North and I
had gone toflH^|^|H^^Bhave him brief my staff on the
ovarii Washington view of the Nicaraguan situation.
We left from there and vm went out to the
airport, where we were supposed to meet our wives and the
children, and my wife had taken his wife downtown for
shopping at the artsy-craftsy things. And the schedule
was that they were to leave at 1:30 on General Calvin's
aircraft. It's a MATS flight where there is space
available. And General Galvin was flying Hm^^^HH^
to Atlanta, and the Norths were going to board
ind get off, of course, at Atlanta, which he
was entitled to.

So the arrangement was to meet at the airport.

liltfiSStfitD

342

limmaB

107

1 and, sure enough, we got there and the General was

2 waiting and they were loading the luggage and my wife

3 doesn't show up for 3 0 minutes, for 40 minutes, 60

4 minutes. The engines are turning. And we are, the

5 Ambassador, General Galvin, Colonel North and myself are

6 sitting in the executive section of the airplane and, of

7 course, I am extremely nervous, upset. My wife is

8 holding up a four-star general, et cetera.

9 But during that conversation, during the time

10 we were together. Colonel North gave General Galvin and

11 updated briefing on Point West and the Ambassador chiming

12 in and so forth. Z was an observer. I wasn't asked for -

13 any opinion, and North just simply told him what the

14 status of it was.

15 MR. LIMAN: So it was a widely^held, closelyi^

16 guarded secret?

17 (Laughter.)

18 THE WITNESS: Yes. And the end of the story

19 is finally that my wife showed up and we put them on the

20 plane, but they forgot their passports. So when they

21 arrived in Atlanta immigration gave them a hard time.

22 MR. LIMAN: That wouldn't stop Oliver North.

23 (Laughter.)

24 . THE WITNESS: No, it did not.

25 MR. LIMAN: Probably some immigration officers

iiftJtftSSSSD

343

UNiAS«D

108

1 have baen fired.

2 (Laughter.)

3 THE WITNESS: That was what Tom wanted(> to

4 remind me, that there was this impression on my part that

5 this was an accepted undertaking, an acknowledged

6 undertaking.

7 BY MR. BARBADORO: (Resuming)

8 Q When did you meet Rafael Quintero?

9 A When that engineer and that soil specialist

10 cane down to do the survey on the field.

11 Q Did North give you any advance warning he

12 would be coming down?

13 A Yes.

14 Q Did he explain who he was, what his

15 relationship was to this operation?

16 A He said I will put my hand in the fire for

17 this fellow. That's what he said.

18 MR. LIMAN: Really? Literally he said that?

19 THE WITNESS: Literally.

20 MR. LIMAN: Had you heard of Quintero before?

21 THE WITNESS: No. Later, of course, I was

22 reading Peter Maas' book Manhunt, which I'd just pick up

23 for, you know, entertainment during ablutions, right, and

24 I saw the name and I almost choked, until I read it. You

25 know, he acted in a responsible way, given the

\mmm

344

UNCiASSm

109

1 circumstances ha was In.

2 But I really did depend on the hand in the

3 fire reconunendation.

4 BY MR. BASBAOORO: (Resuming)

5 Q What was Quintero's role in the construction

6 of the ai£3t'^iP'

7 A He was the project manager. He was the guy

8 that, you know, got ^^^^^^^^H to get the bulldozer and

9 paid the whatever it was. He never told me about

10 specj.fically how much it was costing, except he

11 constantly lamented of the fact that he thought the Costa

12 Rican was ripping them off, which, you know, is the cost

13 of doing business there.

14 Q Did he mention the name of the company that he

15 was working for?

16 A No.

17 Q Did you ever hear Udall mentioned?

18 A After the photo opportunity at the White

19 House, that afternoon was the first afternoon I heard

20 that nam*.

21 Q Okay. Is that the meeting with Secord?

22 A That's correct.

23 Q Okay. We'll get to that in a minute. How

24 frequently was Quintero down there when the construction

25 project was going on?

wmmB

345

UIWISSIIIED

110

11 A H« mad* — oh, I don't know — nor* than fiv«,

I 2 probably less than ten, trips.

; 3 Q Did he meet with you while he was down there?

4 A He'd check in with me. Sometimes he came in

5 and we'd talk on the phone. Sometimes we'd get together

6 for breakfast either on the way in or on the way out.

7 Q Did he update you on the progress of the air-

8 strip?

9 A (Nods in the aff iniative. ) Well, more or

10 less. Frankly, you know, update means that I am

11 interested and I ask appropriate questions. Frankly, _ I

12 didn't have that much interest in knowing what they were

13 up to. you know, I didn't really care. It's a strange

14 thing.

15 Q This was to be the air-strip to resupply

16 the southern front troops. Weren't you concerned about

17 it?

18 A I never believed that the thing would ever get

19 off the ground. Okay? I never believed it, frankly.

20 Q Why not?

21 A Why not? Because it was a damn near

22 impossible situation. The isolation of the place. How

23 are you going to keep people there? How do you transport

24 pilots and mechanics? Where do you get the fuel from?

25 You couldn't get a 55-gallon drum of fuel into Costa Rica

tRl

346

111

b«cau8« It's a controlled material. It would have to be
floated up on a barge from one of the Pacific coast
ports.

They were going to fly in and they eventually
did fly in some gasoline up there. To me, for a clean
operation, unless it was a CIA air operation project
where you have the expertise and it's not a Mickey Mouse,
half-baked, maybe it's done this way or maybe it gets
done that way, but where you go in with a plan and, you
know, you put down a strip and it's going to work because
you've got the kind of people that will make it work.
What did we have here? We hadj
who was acting probably only himself —

When Quintero came down he was telling me all
about th« problems he was havingJ^^^^^^^H frankly
could care less. Okay? 1 say all that and probably the
record will look like that maybe I had more interest or
maybe others might say I had more interest. Well, even if

mmm

347

•mussm

112

you aslc Quintaro h«'d say oh, yaah. But lat ma tall you
I was rol«playing, borna out by tha fact that thay navar
did gat th« airstrip flnlshad.

Tha thing was lavalad and gradad, or it was
just lavalad but navar fully gradad. And whan tha rainy

6 saason cam* and it startad to com* apart, tha work thay

7 had dona, it was a poorly constructad thing bacausa that

8 straam bad, it *rod*d part of th* air strip. Thay navar

9 got what thay — tb* Icind of adninistrativ* s*tup that

10 could hav* mad* th* thing work.

11 And th*n, finally, whan Prasidsnt Arias v^

12 *l*ct*d and than inauguratad and ha said no to tha usa of

13 tha strip, it bacaaa a non-jissua. ,

14 Q Didn't you go out to visit tha strip aftar

15 construction had bagun on it?

16 A No.

17 Q So you had baan at that strip ona tima?

18 A On tha ground ona tima. X flaw ovar it a
19
20
21 tha ground onca.

2 2 Q By tha point at which Quintaro startad coming

2 3 down thara ragularly and startad working on tha
2 4 construction of tha airjtrip you must hava known that
25 this was not going to ba a CIA airstrip, didn't you?

coupla tiaas^^^^^^^^^^^^^^^^^^^^^^^^^^^H

IMWmiED

048

mjmm

113

1 A I still had hopes, but I knew that if it was

2 ever to be a CIA airstrip CIA would have to come in and

3 either finish the job or correct what had been done.

4 Q What did you understand these people to be

5 doing out there?

6 A Leveling, clearing a 6| 000-foot runway, 120-

7 foot wide.

8 Q For what purpose?

9 A For the eventual use by CIA-contracted FDN

10 aircraft. Did I know? Yes. And/or private benefactor

11 aircraft.

12 Q So by December of *85 you had an idea that-

13 there was a possibility there might be a private

14 benefactor use of this air strip?

15 A Ko, not by December. Maybe a little later.

16 Mayb* by January, but not December. That thing really

17 hadn't gotten to the stage yet. I don't even think they

18 got th« bulldozer in by December. They might have.

19 Now let me explain something else to you to

20 giv« you an example of my concerns. Quintero one day --

21 oh, excuse me. The DEA office in the Embassy called me

22 and said, look, we've got a call from the airport

2 3 authorities that they are holding a fellow out at the
24 airport that fit/their drug stereotype profile and that
2 5 he was taken into a room and questioned and searched and

iCaSSIFIED

349

UNGUSSiEii

114

1 no drugs w«ra found.

2 But they started to go through his brlsfcas*

3 and this was somstlme, I gusss, in April. Y«s, it would

4 havs b««n April, April or so. Thsy startsd going through

5 his brisfcass and ha stopped them and ha said, please

6 call this telephone number, and it was my number^^^^^H

7 ^^^^^^^H And the airport authorities, instead of calling

8 that number, called the DEA office and said, loo)c, would

9 you check this out, and they called ma.

10 And so they gave me the name and I said yeah,

11 I know this fellow and that, as far as I know, he's okay.

12 So X mat with him after that and said why did they stop

13 you, and ha said wall, because Z was carrying $5^000 in

14 cash for the usa of paying bills and materials and so

15 forth. And Z said, wall, that's no problem. You know,

16 people can carry, vrhat story did you give them? He

17 said, I waa a cattle buyer.

18 Okay. And ha said, but whan thay started

19 going through the briefcase I didn't want them to see

20 what I had, and I said well, what was that. And with

21 that ha hands ma anvelopaa, brown manlla envelopes, the

22 White House, with photographs of the photo opportunity
with^^^^^^^^^Hand the myself my

24 wife with the President.

25 And he said I felt that if the airport

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350

UimSSiEIED

lis

1 authorities see that, you know, that that would raise a

2 whole lot of other questions. I said, all right.

3 Now you can see that these people are not at

4 all professional.

5 Q Who was this?

6 A Quintero.

7 Q Quintero, and that had to be after March,

8 right?

9 A Oh, yeah. March was when the thing took

10 place. That's why I said it was probably April.

11 So one of the things he asked for was, he

12 says, can you help me get through the airport when X eome

13 back because I don't want these people -- oh, they

14 apparently took his briefcase. They apparently took the

15 money into another room and they counted the money or —

16 no, they took the money into the room and when they

17 returned it to hin, I asked him, I said, did you count
13 that money?

19 He said, well, I gave it a quick look and, he

2 0 says, t think they took a couple of hundred dollars from

21 the money. And I said, well, I think you probably did

2 2 well with that.
2 3 (Laughter.)

24 And the other thing he requested was some kind

25 of identification or ID, a good guy letter — that's my

UNttASStFIED

351

2
3

UNCUSSIHED

116

t«r» — •© that h« could g«t through th« airport without
being has hassled again if it's anothsr craw on duty< of
airport authorities on duty.

■This fellow is
of good reputation, blah, blah, blah, blah, blah, et
cetera, of good reputation, et cetera, and I gave him
this letter.

He also asked for

decided that the letter was sufficient and I destroyed
the ID. I never gave it to hia.

One other matter is that he had in his
briefcase a little cassette for the KL-43 that I had, the
Secret/NOFORH, which North had also given him.

Q Tell me about North's visit in February. He
brought his family with him?

A Yeah. I invited him down here, so, you )cnow,
our families could get together. I )cnew or I sensed that

UNCreiflEO

352

117

1 he was under a great deal of stress, as I was, and

2 together with our wives and the children we decided to

3 take three or four days off, and he was able to catch

4 military flights at that time. So it worked out well.

5 And we also had an agreement with our wives

6 that there would be no business discussed during that

7 period, and there wasn't.

8 Q Did you go to the beach?

9 A Yep. We went to the beach and the only thing

10 we talked about was the families, our hopes, dreams, his

11 experiences in southeast Asia, mine with the Agency.

12 Q You didn't discuss what that air field was-

13 going to be used for?

14 A No. Really we didn't discuss it at all.

15 Yeah, the airfield is being constructed, but that's all.

16 At some point — and I don't think it was then — he said

17 he wanted the Agency to pick up the tab on the air field,

18 but I can't say if it was then or not.

19 Q Wasn't that much later in maybe the summer of

20 '86?

21 A I don't know. I remember that he made that

22 comment about them picking up the tab on the aii^field.

23 Q Did he express any interest in going to see

24 the air~field when he was down there in February?

25 A No, and I wouldn't have let him either.

mmfm

353

UNCLASSIFIE

SECRET/CODEWORD 118

1 Q vniy not?

2 A Because I don't thin)c — you know, having

3 Oliver North, who weM well )uiown to the Sandinistas,

4 running around northern Costa Rica. No. The fact that

5 we were together. He was with us within the context of a

6 family activity to the beach, back^^^^^^^^^and home

7 was enough. I don't even think he ever expressed an

8 interest in going up there.

9 Q At that point had there been any discussions

10 up t9 that point, at any time, with North about private

11 benefactors?

12 A I think you need to say more. In what sertse?

13 Q Had there been any discussions about how these

14 contras in southern Nicaragua were going to be supplied

15 by February of '86?

16 A I don't remember any specifically. He never

17 talked about who the benefactors were or what kind of

18 money we're talking about. I mean, he really didn't, and

19 I'm grateful for it. Tell me about his business, okay?

20 And I think he probably knew I didn't want to know.

21 Q Did you tell him in January of '86 that the
2 2 agreement had been reached with the southern front

2 3 commanders of UNO?

24 A Oh, that was a matter of regular Intel

25 reporting and he would have received all of the Intel,

354

119

1 intelligence, disseminated intelligence reports from all

2 of the activity.

3 Q Did you have any discussions with him about

4 that?

5 A Oh, sure, about all of the political things,

6 you know, but during that beach trip, no. We really

7 religiously tried to avoid shop talk. The wives insisted

8 on it.

9 Q Okay. Let's move away from the beach trip.

10 In January of '86 this agreement was signed and these

11 commanders went back into Nicaragua. At this point you

12 knew an air strip was under construction and that someone

13 was putting up money for the construction of this air

14 strip.

15 Did you have any thought that the same people

16 who were putting up the money for the air_jtrip might be

17 willing to put some money to supply the southern front

18 forces?

19 A Thoughts like that didn't occur to me. Let me

20 try to explain it this way. At some point somebody asked

21 ma, either the IG or the Tower Commission — I guess it

22 was the Tower Commission — did North ever tell you about

23 Project Democracy, and I said he used that term, what

24 did it mean to you? And I said I understood it to be

25 that kind of generic term like patriotic Americans that

mSSfflED

355

120

1 he used when he was referring to support for the

2 Nicaraguan resistance, that these were good Americans who

3 were willing to put up money in various quantities for

4 the support that these people needed to attain their

5 objectives.

6 To me, then, when you're talking about the air^

7 strip or that they were obtaining lethal supplies, to me

8 it all came out of the same pot. I didn't differentiate

9 it. I didn't )cnow Udall, and I didn't know what other

10 entities there were. You know, I'm reading the

11 newspapers now. I've got a fairly good idea. None o,f

12 that was ever said to me by Oliver North, that there was

13 this or there was that or that money for this was going

14 for that.

15 He would refer occasionally to Project

16 Democracy. I thought it was sort of like the term he

17 would us* for the all-American effort. I mean, he could

18 have used any term like that and that's the way I

19 interpreted it. I didn't know that it meant a specific

20 thing. Okay?

21 So I can understand where you're coming from

22 with your question. The problem I have — and it almost

23 sounds a little naive — well, didn't you know that

24 thing? Well, no. I understood that these were people

25 who on the on* hand they would put up money to build this

yiHOTED

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121

1 air__strip; on the other, they might be giving an airplane

2 or something to the FDN.

3 Okay?

4 Q As a United States Government representative
^^^^^^^^^^^^Hdid you a responsibility for the

6 southern front troops that were sent into southern

7 Nicarasgua?

8 A Of course.

9 Q Were you concerned about how they were going

10 to b^ supplied?

11 A I was concerned that they be supplied. I

12 didn't care who supplied them. These people were being

13 decimated and their existence not necessarily for our

14 purposes, which was U.S. policy objectives, but for their

15 own survival as human beings, required that they at least

16 have something to defend themselves with, that they have

17 the wherewithal to withstand the attacks of the people

18 inside, the attacks of the Sandinistas.

19 Let me tell you there is another aspect to

2 0 this which I don't think I have seen properly addressed

21 either in the press or dealing with the whole problem of

22 the southern front during this cutoff period. We found a
2 3 direct correlation between the activities of abuses —

24 and I am talking about very serious abuses — by the

25 Sandinistas against the civilian populace when there was

UmilSIFIED

357

1 a illiiii<liiii«ii« nf activity on the part of tha resistance

2 forces inside, as though the Sandinistas would then feel

3 confident that they could go out, you know, take names,

4 and —

5 Q X understand what you are saying.

6 A Now, so there was not only a concern for the

7 people who were under arms; there was also a concern for

8 the civilian population in the southern part of

9 Nicaragua. The north might have been a different story,

10 but In the southern part of Nicaragua there was this

11 concern that when the resistance didn't have the arms

12 that the civilian population suffered inordinate abuses.

13 So there was obviously a moral imperative at

14 work here on my part that when or, rather, after I had

15 persuaded these people for" political reasons to return

16 back to southern Nicaragua to carry the fight inside,

17 while it may have served my own reasons to get them out
^^^^^^H^fand the neutral territory, that they

19 done so on the basis of my persuasion that the funds

20 would be coning forth from Congress.

21 There was also the moral imperative that once

22 I sent them back in that the people inside, the civilian

23 population, might be affected as well. Okay? Now, faced

24 with that, when Oliver North said in early '86 that he

25 was prepared to send a full flight load in of lethal

Icq

358

NOASmiEO

123

1 material I said, well and that h« asked me to handle the

2 coordination in terms of getting the drop zones and the

3 information from the commanders.

4 I said I will do that. I will take that

5 responsibility. Mr. Barbadoro, I didn't ask Director

6 Casey. I didn't ask Clair George. I didn't askJ^^H C^
1 I^^^H I didn't ask anybody. I made that decision on my

8 own to accept his offer.

9 Now once I did that, because I realized that

10 this, Larry, Moe and Curley operation, from having seen

11 the way they handled the air-strip, X did send a cable to

12 headquarters and I said the resistance forces are

13 expecting to receive from private benefactors a load of

14 arms, an air load of arms, and I asked for flight

15 information, flight path information, risk of hostile

16 forces, radar coverage — the whole nine yards — and

17 headquarters sent it to me not once but several times.

18 And nobody at headquairters came to me and said

19 tell me about how this is all working out, how are the

20 southern resistance commanders inside? They didn't ask

21 any logical clearly understandable questions like how are

22 ^ the commanders inside getting the information about the
2 3 drop zones and the timing of the flight to the delivery
24 people, who by then I understood were ^^^^^^^^^^|

2 5 Nobody asked, and when they sent down this

oNCLraef!

359

Pnobody

asked for that flight how are the commanders in the field
getting that information to the benefactors.

I volunteered that at a later date and we'll
get into that as we go along.

Q When did he first offer this lethal resupply?

A Hold my feet to the fire, but it was January,
January or February — and it didn't happen until April
because their planes couldn't make it, aborts. You know,
for the flight there must have been six aborts. I didn't
keep track or count, but it was a horrendous record.
I mean, it was send the information about
where the drop zone is and start a novena. That's the
way it ran.

(Laughter. )

Q Did you have any discussion with North during
the January discussion about whether this proposed lethal
resupply flight was legal?

A Yes, oh, yes.

Q Tell me what you remember about that.

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125

1 A And about what am I doing is legal. Is that

2 legal, Ollie? And he'd say yeah, you are passing

3 information. You are just passing information. You are

4 not coordinating. You are not running a military

5 operation. You are passing information; is that clear?

6 You are just passing information.

7 I said, fine, as long as that's the case, then

8 that's all I need to know.

9 Q Did he say anything about having legal

10 opinions on the subject?

11 A No, but I had, because we had been told at

12 some point — I think it was December '8S when we had a

13 meeting ^^^^^H of the COSs — that we were permitted to

14 share information with the contras. Oh, yeah, the other

15 aspect is — and Tom just brought this to my attention —

16 is that part of that shading of information, as I

17 understood it from^^^B was that we were permitted to

18 share information which could be used for the secure

19 delivery of lethal equipment and materials.

20 Is that correct, sir?

21 Q What dic^^H| say that led you to understand

22 that?

2 3 A The secure delivery. That meant

24' communications, secure communications. That meant other

25 things involved in the secure delivery of materiel and

mSSIFIE

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126

1 that cam* out of an agreement worked between the House

2 and the Senate as a result of the S27 million and the $3

3 million communications provision.

4 Q Who gave you that understanding?

6 Q When?

7 A I don't know. Certainly during this period.

8 Oh, here's a good point. I triad to be as close to the

9 letter and spirit of the law as I possibly could. My

10 officers will tell you that time and time again I

11 cautioned then about th« whole issue of what can we do,

12 how far can we go within the restrictions of the Boland

13 Amendment and all of the attendant other Agency- imposed

14 qualifications of that restriction.

15 There were times when some things were very

16 easy — I mean, to be able to handle. There were times

17 when it really as a close call and I had to go back to

18 headquarters. Let ne give you an example of one.

19 When we were allowed to provide communications

20 training and communications equipment, specifically

21 HHjHjHradios, for the resistance fighting inside, and

22 that of course was one of the things that we were able to

23 provide to the commanders who signed the agreement in

24 January, part of the things that they carried back in
with them wree the^H^^Hradios, onef-time pads, as

362

127

1 well as we trained a couple of them so that they could

2 train others inside.

3 Well, we had the occasion about the sane

4 period, early January, when we were going to send in some

5 Miskito Indians along the Atlantic coast and we had

6 trained them and given them radio equipment to take in

7 with them. Not only that. We purchased with

8 humanitarian funds the boats and motors so that they

9 could take the medical supplies and the radios in.

10 They came back to us and they said, hey, wait

11 a minute. You expect us to go up here along the Atlantic

12 coast at least 100 miles into Nicaraguan territory

13 without guns. How are we supposed to defend ourselves or

14 how are we supposed to protect the radio equipment that

15 you just gave us to take inside, plus the one'ftime pads

16 and the other thing? I said, well, good question.

17 I went back to headquarters and I asked them

18 the question, and they came back and they said well, no,

19 we can't provide them with weapons even if they are for

20 defensive purposes, but why don't you suggest to them

21 that they contact Negro Chamorro and ask him if they will

22 lend, if Negro will lend the Indians some weapons so that

23 they can carry them back in.

24 I thought that was a very Solomonic decision.

25 It was a judicious decision on their part to avoid the

umssmED

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128

1 question and yet settle the problem. Now we tried that.

2 We followed that practice as much as we could. It wasn't

3 always simple. The questions at times were difficult,

4 but we did the best we could.

5 Q Let me move to a different subject.

6 A And let me get into one other thing, too.

7 Q I don't mind your counsel passing you notes. I

8 will say that if he wants to develop certain ideas with

9 you on the record he will have a chance to ask you any

10 questions. But go ahead, bring up the subject.

11 A Because I think it is relevant. You need to

12 make, or I think that the people looking into this

13 situation need to make a judgment call on the

14 difficulties that I was faced with in dealing with these

15 people who were not of a professional — who were not

16 professionals by career, and yet were trying to enter or

17 get into areas where we had always practiced and followed

18 certain regimens and we would not have allowed some of

19 the things to happen that did happen, such as the

20 problems with the airstrip and how to get through Costa

21 Rican customs and immigration with $5|000 in their

22 pocket, and not carrying tapes or photographs at the same

23 time.

24 I wantjto bring this situation up because it

25 does impact on my personal responsibility as well as the

UNCTASSflEO

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129

judgmental aspects. During a discussion, and I think it
took place some time in the spring of '36 with Quintero,
I brought up the problem of the fact that these people
had, the people inside, had no ability to defend
themselves against Sandinista ambushes.

And one of the things, from our experience,
that would clearly have been helpful would be explosives,
demolition! training. There were demolitions. There are
demolitions inside of Nicaragua and the resistance forces
inside can steal it or capture it, but they had no
ability to use it. They didn't know how to use it, at
least in terms of military usage.

And so Quintero said that he had, he thought
he knew somebody or had access to somebody that could

^^^^^^^^^^^^^^^^Hdo some training

people^^^^^^^^^^^^^^^^^^^^^^^^H 3"<^
said, gee, that would be a nice idea and sort of let it
go at that. Next thing I know, I got a call or a message
from Quintero that he was sending in someone by the name
of Kenneth, Kenneth or Kevin, that would conduct training
of the resistance^HH^HH of two peopl^^^^^

^^^|and that they in turn could train others inside
Nicaragua.

All right, fine. The next thing I know, I got
a call from this Kenneth — I can't remember his last

UimSSIFiED

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130

i name or even if he gave me one — and he said he was

2 staying in room such and such at a local hotel. So he

3 said he was there to conduct the training of these

4 people. So I said, well, let me come over and talk to

5 you. I would like to know something about you, what kind

6 of person you are, fully intending only to provide an

7 introduction — this is so and so, this is so and so —

8 and walk away from it.

9 Well, I went over and I found that he was a

10 very clean-cut young man. He had several books in

11 Spanish, Spanish language primers. He has some Spanish

12 but not nearly enough to work with, and he had said he

13 was making an earnest effort to improve the little that

14 he had.

15 I asked him about his background. He was very

16 reserved about it. He said a military background, and

17 that he had experience in demolitions work. He then gave

18 ma a list of things he needed from hardware stores and so

19 forth, and I said look, friend, I'm not going to go out

20 to hardware stores looking. If you need this stuff for

21 your training activity, you go out and get it, and I

22 assume you have the money because you won't get any

23 money from me either.

24 So he says, okay. It will give me a chance to

25 learn my Spanish or to improve my Spanish, and he did.

liClSSmiED

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UNCUSSD

131

1 Several days later he calls ne up and he says, okay, I've

2 got all the material or I've got all of the tools and the

3 stuff Z needed from the hardware store and they just

4 delivered the material. I said what do you mean? What

5 material? He said the material that I'm going to teach

6 these people to work with.

7 I said who delivered it? He says, I don't
Some guy^^^^^^^^^^^^^^^^^^^^^^^l^^^H

9 just appeared at the hotel door with this material. And

10 I understood what he was talking about, but I didn't

11 understand what was behind all of this. But it was clear

12 that they were explosives that had been delivered to his

13 hotel room.

14 I said you stay right there. You don't leave

15 that hotel. And I raced out of that, out of my office in

16 virtually a state of panic because all I could envision

17 is this Aaerican spending the next 20 years of his life

18 in^^^^^^^^^Bjail for having a case of explosives

19 his room.

20 Well, I went to a phone, called the contact in

21 the resistance and made an arrangement for him to pick up

22 this fellow, to be introduced and pick up this fellow and

23 to get him out of town. I went to the hotel, parked in

24 front of the hotel in an unlicensed car, went upstairs to

25 the room, and I told him let's pack the explosives. He

lliraSSIFIED

367

wmmm

132

1 had two cases of commercial plastic explosive.

3 ^^^^H I am going to take this stuff from this room

4 downstairs. You check out of the hotel and you meet me

5 in my blue car outside. AnWd that's what I did. I

6 carried — there must have been 50 pounds each case,

7 trying to make it look like they were normal pieces of

8 luggage, walked out, stuck them in the car, took him,

9 made sure that we were not under surveillance, because I

10 was convinced that this was a setup. Somehow or other

11 this man had been discovered and somehow or other this

12 whole operation was going to go up in smoke.

13 And I felt that my responsibility was to it.

14 But what I think — and I've never been able to determine

15 this yet — 1 recall only being very mad at Quintero, but

16 I think what they did is they brought, they somehow

17 brought into the coxintry or obtained in-country, this
commercial plastic explosive, and either^^^^^^^^^^H

19 or one of his minions delivered this to this guy's hotel

2 0 room.

21 Now, you know —

2 2 Q Where did you take the explosive?

2 3 A I turned it over to — I mean, I carried him

2 4 and the explosives in my car to the resistance and then

2 5 he took it up-country and they blew it all up during the

yifCL'CTIED

368

^__ 133

1 training period.

2 Q Did you t«ll Colonel North about this episode?

3 A No, I don*t think so. I'm not sure that I

4 did, no.

5 Q Let me leave that and move to a different

6 subject. When did you get your KL-43?

7 A Early '86, I believe.

8 Q Who brought it to you?

9 A Quintero.

10 , Q And had North told you that this would be

11 coning down?

12 A Yes.

13 Q What did ha want you to use it for?

14 A Our communications.

15 Q Well, you were able to conaunicate with North

16 on secure telephone.

17 A Yeah, but that was only between 8:30 in the

18 morning and 4:30 in the afternoon, after which!

19 communications closes down. It wasn't available on

20 holidays. It wasn't available on weekends and it wasn't

21 available at night.

22 Q The CIA didn't have its own access to a secure

23 telephone?

24 A Wa had another secure telephone line, but it

25 didn't connect with North.

369

NM^ED

134

1 Q Okay. So you understood that th« purpose of

2 this 10.-43 would b« to communlcats with North?

3 A And with Quintsro.

4 Q What communications would you havs with

5 Quintsro that you would have to us* a sscurs

6 communications device?

7 A Well, after the offer to send the lethal

8 material in — and that was about the time — well, maybe

9 it wasn't January; maybe it was even February — when

10 this piece of equipment came down.

11 Q Where was Qulntero when you would conaunicate?

12 Z would assume it was for purposes of communicating the

13 intelligence information and the flight information

14 concerning the flight; la that right?

15 A Either Miami ori

16 Q And what was your understanding that Qulntero

17 would do with the information once you transmitted it to

18 hla?

19 A Coordinate the information with the pilot and

20 the crew that was flying the plane.

21 Q So you would call Qulntero at either Miami or

22 ^Hm vherever the plane was, with the Information?

23 A No, no. Where he was. I never Jcnew that the

24 plane was anyplace else other thaqj^H^m If he was

25 in Miami he would communicate with his people and I

UNWStflED

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135

1 didn't know who they wer«, who war* ln[

2 prasunably by th« sam* sacure nathod, and tall them that

3 the commanders had this drop zona or whatever the

4 information pertained to the operation.

5 Q Did you ever speak directly using this device

6 to people ati

7 A No. Well, only to Quintero. There were only

8 two people that I used this davic* with — Quintero and

9 North. And I used it with Quintero when he was either at

10 ^^^^^^1°'^ ^^ Miami, and with North only when he was in

11 Washington and Z couldn't talk to him on the secure line.

12 Q i^H^^^^^^^H ^^^ y°^ participate in the

13 planning of these air drops?

14 A No.

15 Q Did you play any role in deciding when

16 equipment had to be dropped, how much equipment had to be

17 dropped, whara It had to ba dropped?

18 A Please understand that neither the station nor

19 I, nor avan tha communications canter or the remnants of

20 tha little support staff that the armed resistance hac^^

21 ^^^^^^m had any influence or control over what was

22 happening inside. The commandara ware autonomous. They

23 decided tha targets they vara going to have. They

24 decided what their situation waa and they told us we can

25 take a delivery within the next 48 hours or the next 24

371

136

1 hours or, as happened on occasion, thsy had a dalivsry

2 scheduled within 24 hours and they said we can't; we are

3 being pursued. We have to change, will advise you.

4 Being pursued by the Sandinistas.

5 They picked the time and the schedule, and as

6 far as location is concerned they would give us a

7 location where they thought they were. When the aircraft

8 got into the area, they night be seven, eight Jcilometers

9 away because they weren't able to read maps. They would

10 say,' we are, say, three kilometers from the bend in the

11 river.

12 Well, they wouldn't know or they didn't

13 realize that there was a bend in the river that

14 topographically or from the air looked identical to the

15 bend in the river where they were. So they couldn't even

16 give us map coordinates.

17 And I want to try to answer the last part of
IS your question. Toward the end, in September, what we did

was^HH^^H working the resistanc^^^^^^^^^J

20 was to pick out this bend in the river (indicating), and

21 then we'd figure out the coordinates or the resistance ■■

22 ^^^^^^H would figure out the coordinates and the

communications center^^^^^^^^ the

24 communications center, would tell the commanders, all

25 right, this is — when you go to this spot, walk in a

l||#^iH^^!rn

yi'il»L»)»fOi8i iUJ-

372

137

1 northwest direction three kilometers and then this way

2 (indicating) .

3 Then that's where the thing will be, and then

4 there would be an alternate. But that waf done because

5 the equipment kept getting lost or the commanders inside

6 would give the wrong place. So in terms of what input
was^^^^^^HJ^I that was the only input. the

8 private benefactors who told us when and what they were

9 delivering and when they were going to deliver it.

10 ^ We had no control over that. We couldn't even

11 call it off.

12 Q So it's your testimony that you didn't

13 participate in the planning but you were simply given

14 information as to when, where, what, was being dropped?

15 A That's correct. That's correct.

16 Q Was it your objective to create a 2|500-inan

17 force?

18 A I would like to respond to that with the

19 answer that X prepared in response to the appearance of

20 that question in the Tower Commission, if you will permit

21 me.

22 Q Sure.

23 A I don't know what the exact terms are, but the

24 reference to my message to Korth is on page C-8, right

25 side of the page, which quotes, in part, "My objective is

NctraiD

373

IINIMSBD

138

1 th« craation of a 2;500-man force which can strike

2 northwest and link up with Quiche to form solid southern

3 force." My comment fs as follows.

4 The portion of the April 12, 1986 message

5 which mentions the creation of a 2^500-man force reflects

6 a poor choice of words on my part and needs explanation.

7 First, the message should be understood in the context of

8 an informal communication and, as such, was written in an

9 ofttianded style. It was obviously not meant to be

10 anything more than a simple direct expression of an

11 ideal, perhaps unattainable, situation.

12 Secondly, in a more appropriate choice of

13 words I might have cited the expectation of the southern

14 front commanders, whose views I was essentially

15 representing as my own, and the exhortation that all of

16 USG and resistance elements pull together in support of

17 the southern front, including the NSC.

18 For the record, the message represented a bit

19 of brainstorming and I subsequently wrote an identical

20 cable to headquarters in a a6s£f channel message. The

21 existence of this cable was made known to the Office of

22 the Inspector General and I used exactly those terms with

23 exactly the same proposition, that bring the FDN force
2 4 operating at the northern part of southern Nicaragua
25 together with the southern front.

omsstfiED

374

ONMSm

139

1 Q You have just read verbatim from notes that

2 you prepared earlier on this subject?

3 A Immediately after the Tower report was issued.

4 Q And those notes that you read from there are

5 essentially your response to several things, several

6 inaccuracies in the Tower report?

7 A Yep.

8 Q Would you be willing to give us a copy of

9 that?

10 KR. WILSON: Well, these were prepared for us,

11 Paul, for the lawyers' use.

12 MR. BARBAOORO: But ha has used it to refresh

13 his recollection. Ha has also read soma parts verbatim

14 into the record. Certainly under the rules I would be

15 entitled to it and I may push it, but I will just ask you

16 now would you be willing to glva it to us.

17 MR. WILSON: Wa don't hava any object ion.
13 BY MR. BARBADORO: (Resuming)

19 Q Okay.

20 A Soma of it, of course, is conceptual in terns

21 of references that are made to the cutoff and so forth,

2 2 and obviously things that I found interesting. There are

2 3 some things that I think are very — that are essential

24 to the question especially about the air-strip because

25 they refer to things in there that are definitely

mmm

375

\iiimm.s

140

1 inaccurate, according to my Information.

2 Q Wall, that will b« halpful and wa can go over

3 that latar. Lat ma mark £ha April 12 massaga that has
baan rafarrad to as H^H^^H Exhibit S.

5 (Tha documant rafarrad to was

6 markad^BH^^H Exhibit Numbar

7 for idantiflcation.)

8 Taka a look at Exhibit 5. I think that is tha

9 cabla that you rafarrad to in your last anawar; is that

10 right — axcus* ma, tha KL-43 massag* that you rafarrad

11 to?

12 A V««. That's intaraating. I covarad a whoia

13 gamut of things.

14 Q Is that a copy of a massaga — and I am

15 referring now to^H|BH| Exhibit S ~ is that a copy of

16 a message that you sent to Colonel North on April 12?

17 A Yes, it is. well, I don't know the data. I

18 am accepting what is written on there. Was there a data

19 on it? Yes, that's fine. Okay.

20 Q And that message does use the phrase "my

21 objectivei'^,, to begin a sentence saying "My objective is

22 creation of a 2J500-man force." Is It your testimony

2 3 today that when you used "my objective" that you did not

2 4 mean my objective, that you mean to refer to the southern

25 front commander 'W objective?

!JN8t«|fiED

376

2
3
4
5

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

141

A I'll Stand by what I read from my notes in
that within the context of representing I was
representing the views of the commanders as well as my
own, as my own ideal of what I would have hoped a
situation could eventually be. It was a bit of
brainstorming.

Q Okay. Did I also hear you correctly that you
sent an operational cable to CIA headquarters that used
the phrase "my objective" in connection with the
discussion of a 2|500-man force?

A I was more formal, as I recall, in my cable to
headquarters in that I probably would not have used the
first person. I would have said the objective should be
to have, et cetera, et cetera.

Q Was that cable sent around the same time?

A Maybe within the following two to three weeks.
That's my best recollection of that.

Q Okay. f^^^^^H Exhibit 5 also says
plans during the next two to three weeks includes air
drop^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^B
^^^^■marltlme deliveries, NHAO supplies to same, NHAO
supply to UNO/SOUTH, but with certified airworthy
alrcraftA, et cetera.

Is It your testimony that the use of the
phrase "our plans" refers to the plans of the southern

UmiSSIFlEO

377

142

1 front coBBand«r« rath«r than your plans?

2 A Sur«. It's ahort for tha aoutharn front

3 position.

4 Q I would lHta.ths naxt thrsa axhibits markad.
Tha massaga haadad '<|H 4/15/86" is||H^^|s-

6 (Tha docuaant rafarrad to waa

markadHHBjI^I Exhibit Nuobar

8 for idantiflaation.)

9 Tha massaga haadad H^| 6/ 16/8 <" i*|

10 7.

XI (Tha docunant rafarrad to waa -■

BarkadHriHHJlExhibit Nuabar

13 for idantification.)

14 And tha naasaga haadad "2000 Houra, 3 0 Juna"

is^i^ms.

14 (Tha docuaant rafarrad to was

17 aarlcad Famandaz Exhibit Nuabar 8

U for idantification.)

19 V Ta)ca a loolc at 6, 7, and 8, plaasa.j

21 A I did not sand thia aaaaaga.

22 Q You ara rafarring to Exhibit 7?

23 A That is corract. u)

24 KR. WILSON: Raad it carafully,^^^
THE WITNESS: That 'a corract. I did not aand

HKCn^S?"^"

ioJi! slJ

378

UNCIA»E0

143

1 this massage.

2 BV MR. BARBADORO: (Resuming)

3 Q Did you receive it?

4 A I do not recall ever receiving this message.

5 MR. LIMAN: Have you seen this before?

6 THE WITNESS: I was shown this message. I

7 believe I was shown this message by either the IG or the

8 Tower Commission, and in my notes I referred to this. I

9 think I referred to it. Is this the one that's referred

10 to where I say no way did I — no, it's the next page,

11 next one.

12 Ah, field officer sent another secure message,

13 page C-8, first paragraph, right side. I will read it.

14 Quoting from the Tower Commission Report, page C-8, "(4)

15 Three days later the field officer sent another secure

16 message to confirm a delivery to an airjoase in a Central

17 American country." And my comment: the field officer

18 they are referring to is me because it follows a previous

19 paragraph which said, which refers to a cable I did send.

20 End of ny comment.

21 He tells Lieutenant Colonel Korth the delivery

22 is loaded with ammunition for your friends. He asks

23 Lieutenant Colonel North when and where do you want this

24 stuff. We are prepared to deliver it as soon as you call

25 for it. My comment to that was: I did not, as stated the

ItEl

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coaaant above, Z did not sand this massaga. Furthamore,
tha q[uaatlon askad In tha allagad massaga Impllas that I
had control of matarlal and was praparad to dallvar it.
It also Impllas that I had soma maans of dallvary.

Q So that tha racord Is claar, taka a look at

|6. Old you sand North that massaga?
A No, I did not.

HR. LZMAN: Is that tha massaga that you hava
just b««n rafarrlng to?

THE WITNESS: That's tha massaga that I was
rafarrlng to.

MR. LIMXN: Not 7?

THE WITNESS: I supposa not.

MR. LIMAN: Now look at 7.

THE WITNESS: I did not sand this massaga.

MR. LIMAN: You did not sand 7 aithar?

THE WITNESS: No, and I don't ballava I
racaivAd this massaga aithar — racaivad or sand.

(A discussion was hald off tha racord.)

MR. LIMAN: Lat's go back on tha racord. Wa
ar« now rafarrlng to Exhibit 6. It Is addrassad to you,
isn't it,||p^

THE WITNESS: Yas, it is. I did racalva this
ona. I racall racalvlng this ona.

MR. LIMAN: Do you know what tha BT at tha and

yf!Et«SSin[D

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1 of a message means?

2 THE WITNESS: It was Ollie's signoff. okay?

3 Yes, it would make sense if I received it. I had looked

4 at it because of the Tower Commission as though I had

5 sent it. I didn't send that. It looks familiar. I

6 would say yes, I did receive it. This one (indicating) ,

7 if I may, again —

8 MR. LIMAN: Now look at 7, which also looks

9 like it was sent addressed to you and signed BT, North,

10 and read it with that in mind.

11 (Pause.)

12 THE WITNESS: Geez. I don't remember seeing

13 this one.

14 MR. LIMAN: You don't remember seeing it?

15 THE WITNESS: Well, let me look at it and

16 concentrate on it.

17 (Pause.)

18 I know we talked about that subject, the

19 mountain leprosy.

20 MR. LIMAN: Do you have any recollection of

21 that message as such?

22 THE WITNESS: Parts of it.

23 MR. LIMAN: It's fair to say, as you sit here
2 4 today, you cannot say definitively whether or not you

2 5 received it? You may have and you may not have?

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1 THE WITNESS: G««. I want to b« totally

2 pr«cis« with you on it.

3 MR. LIMAK: But you either have a

4 recollection.

5 THE WITNESS: Soma of it looks familiar, some

6 references look familiar, but I don't ever recall him

^ telling ne anything about pilots and the repair people.

8 That's the first thing that strikes me, the fact that

9 they didn't see the zone lights. That was frequently

10 mentioned. I mean, that wasn't the first time.

11 I remember him saying at one point that he

12 wanted Ralph on the scene to beter handle the

13 transaission of information from the commanders through

14 me so that he would be right there and could talk to

15 ^^^^^^H and come back to me. And I know I asked for the

16 mountain leprosy medicine. That was a constant request.

17 I would have to say that even though I don't

18 recognize this message specifically that the contents of

19 it, that in the contents there are things which I do

20 rcall receiving.

21 MR. LIMAN: All right.

22 BY MR. BARBADORO: (Resuming) x

23 Q Now the last one, which is ^^H^^^f Exhibit
2 4 8. Did you sent that message to North?

25 A Fine. This is my message.

UNftMm

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1 MR. LIHAN: This is my message, h« said. Let

2 the record reflect that he is reading the message to

3 himself.

4 (Pause.)

5 THE WITNESS: Yes, I sent this message in the

6 case of sending the two qualified men. It was apparent

7 that the field commanders were having difficulty in

8 either receiving the drops or something and the support

9 staff of the resistance people^^^^^^^^Hwanted to send

10 two "qualified — and I don't know what they mean by

11 '•gualified"l but it just occurs to me that it was either

12 qualified In handling communications or qualified in

13 setting up a drop zone, and so they were prepared to send

14 some people in for the purpose of the coordination

15 inside.

16 And that's all.

17 BY MR. BARBADORO: (Resuaing)

18 Q Let me ask you something about this message.

19 The message appears to have two paragraphs to it. The

20 first paragraph ends "Need July cassette ,HH|'* Is that

21 the end of your message? ^\

22 A I never signed mine^^H first of all.

23 Whoever wrote that message was teOclng it off the machine

24 and simply substituted ay signoff and this other thing

25 here (indicating). I assume that the person who received

T^imt

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148

1 this massage -- and I don't know where this went to or to

2 whom it went. Let me see if X can decipher it.

3 Q Do you reftember who you sent that message to?

4 A You see, I would have sent that to Ralph.

5 Q Quintero you are talking about?

6 A Yes, to Rafael Quintero.

7 Q What looks like a second paragraph says:

8 "From Ralph)'"\.,' Is that something that you send?

9 A No. Let me try to explain. There were times

10 when — and I assume that this would have been one of the

11 occasions and this is from Ralph who told me this, thit

12 there were occasions when he would take and relay my

13 message to North verbatim. In other words, he'd get back

14 on his machine and he would relay it.

15 On occasion I received from Rafael, from

16 Ralph, messages that North had sent him verbatim. Okay?

17 That often happened — well, not often happened, but that

18 happened when, for example. North couldn't get a hold of

19 B« and he had to leave on a trip or he was going out of

20 town or he had to go to a meeting. So he would send the

21 message to Rafael because there were times I was out of

22 contact with either my office or my home or he would call

23 me late at night when it was convenient for him.

24 And he would then relay North's message to me.

25 I can only assume that the person who wrote this piece of

iimmifo

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149

1 paper received two messages. The first one I remember

2 vnrltlng that message. The second one I don't. I assume

3 it was from Ralph but not through me or from me.

4 Q That's what I wanted to know. Thanks. The

5 message, the part that you sent, says, in one part of it,

6 the sentence begins "Even so, we are making new efforts,

7 sending two qualified men by boat 1 July." What is that

8 referring to?

9 A As I said earlier, it refers to that there

10 vara problems inside. I don't recall exactly what they

11 were now. The people that were going In were people from

12 the resistance support staff ^^^^^^^^H I mean, we

13 didn't send Americans in. These were their people going

14 in.

15 Again, it's a question of shorthand.

16 Q You meant they, they sending in?

17 A Hell, most of the trips, as I recall, most of

18 the trips of the people who went inside, such as these

19 people hare went in with our money because they were

20 going in on an intelligence mission, either for the

21 purposes of intelligence collection or for coordination

22 of intelligence information regarding the secure delivery

23 of supplies or to carry in extra communications equipment

24 or to carry in medicines or food and so forth, as in the

25 case of the boat going in.

.iMP'^

385

150

1 So th«ra Is a nix back and forth b«tw««n on*

2 thing and another. Whan I said "sanding two paopla in",

3 mora than likaly va paid thair axpansas for gatting back

4 insida.

5 Q Wall, this massaga says, it follows that

6 sentenca I read to you: '^Ona to Comoandar Gonzo, ona to

7 Conunandar Ramon to sat up sacura drop zona area and

8 organize reception." Are you telling ae that these

9 people were paid by the CIX to go in and do that?

10 . A Boy, you are putting ne on the spot. Z don't

11 remenber, you know, in that particular case. I would^

12 say, hypothetically speaking, that if we were sending a

13 support staff persod[|^^^|H^^^^Hto Gonzo and to Ramon

14 to set up drop zone, secure and for the safe delivery,

15 yeah, we would have paid his expenses to go inside,

16 that's correct. That would have been a legitimate, in my

17 estimation, a legitimate function.

18 That was hypothetical. To give you a

19 definitive answer, I'd have to know more, and I can't

20 recall it from the circumstances, as they are presented

21 there.

22 Q I'd like to go into a new area.

23 MR. LIMAM: I'd like to ask something. This

24 might be something that you have covered. But during the

25 period from, let's say, the fall of 1985 to the fall of

386

Miimm

151

'86, how oft«n would you cominunicat* with North?

THE WITNESS: There were periods when I didn't
talk to him for five or six weeks, and there were times
when I would talk to him three or four times over a
period of several days.

MR. LILIAN: Did you have more contact with him
than with ^^^w

THE WITNESS: Counting cable traffic, no —

I much more. I mean, our cable traffic was running
"I
approximately 1]^200 cables a month, all to the Central

American Task Force, and, incoming 3^000-3^^100 a mon€h.

MR. LIMAN: Were there things that you
communicated to Nor^ that you would not have
communicated to JH^H?

THE WITNESS: Yes.

MR. LIMAN: Give me some Illustrations.

THE WITNESS: When I was attempting to block
^political moves, especially where^^H
I were concerned, I enlisted North so that
— and it also occurred with some of the shenanigans of
Arturo Cruz ~ I enlisted North to be my advocate or the
advocate of my views at the RIG. -^

MR. LIMAN: And why was that? ^

wrong.

WITNESS: Because I believed i
was coming from a —

387

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152

1 (A discussion was held off th« record.)

2 MR. LIMAN: Back on the record.

3 What you have just said is that there were

4 some issues where you felt that it was important that

5 they be aired at the RIG and that you used North as the

6 channel to obtain that airing. Is that fair to say?

7 THE WITNESS: Yes, it is. And, to expand on

8 that, that he act as an advocate for the views that I

9 held concerning these political problems.

10 MR. LIMAN: This may have been covered, and if

11 it has been just cut me off. When North came down for ^

12 that short vacation with his wife you observed that he

13 was a man who was tired; am I correct?

14 THE WITNESS: Yes.

15 MR. LIMAN: He had been working very hard?

16 THE WITNESS: Oh, yes.

17 MR. LIMAN: Did he tell you that he had been

18 working on the hostage release problem?

19 THE WITNESS: No, sir.

20 MR. LIMAN: Did he tell you ~

21 THE WITNESS: He did not say it at that time.
2 2 MR. LIMAN: Did he tell you that he was

2 3 hopeful of getting some money from any source for the

24 contras?

2 5 THE WITNESS: No, sir.

|T/|

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UNCLASSIFIED

153

1 MR. LIMAN: Did he ever discuss with you the

2 possibility during that visit, the possibility of getting

3 money other than from Congress?

4 THE WITNESS: No, sir.

5 MR. LIMAN: Now you say he didn't tell you

6 about the hostages at that time.

7 THE WITNESS: Correct.

8 MR. LIMAN: When did he tell you about the

9 hostage mission?

10 THE WITNESS: One night here in Washington we

11 got together for a couple of beers.

12 MR. LIMAN: Was this while he was still at' the

13 NSC?

14 THE WITNESS: Yes, and he drove me back to the

15 hotel and we were sitting in the carport of the hotel and

16 ha told D« that Bill Bucldey had been tortured and

17 killed. He knew that I knew Buckley. He broke down and

18 started crying, causing me to do the same thing. It was

19 the first Indication that I had that he was involved in

20 any way with any hostages, the first and only indication,

21 and that he had apparently been engaged in some effort to

22 get Buckley released.

23 But it was a terribly emotional moment for

24 both of us.

25 MR. LIMAN: Did he ever tell you that he was

»ORD

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UNCL^SSIte

154

ganar^ting any nonay from Iran to halp tha contraa?

THE WITNESS: At no tina, in no way, did he
avar, thankfully, mantion to na that ha had anything to
do with that. Tha first tina I haard of it was when
Attorney General Meese spoke of it in November.

MR. LIMAN: Did he ever tell you that any of
tha money for the contras was coning from foreign

8 governments?

9 THE WITNESS: No, I don't think he ever

10 menti:oned that. I think perhaps that ^^^^^^^H ^

11 mentioned something, but in very vague terms, and than

12 after the announcement by Attorney General Meese j^^^H ^^

13 did tell me about the mixup of the bank account

14 instructions for the Brunei matter in the context that he

15 was just dumbfounded at what Assistant Secretary Abrams

16 had dona.

17 MR. LIMAN: During this period when you were

18 station chief was there a sense on your part that the

19 southern front was getting shortchanged compared to the
2 0 FDN?

21 THE WITNESS: Well, you know, you are always

22 dealing from perceptions in that. Yes, sure I did.

23 MR. LIMAN: And I gather you identified

2 4 yourself with the people you were working with in the
2 5 southern front?

mmmB

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UNCLiissn

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1 THE WITNESS: That's correct.

2 MR. LZMAN: And you became their advocate?

3 THE WITNESS: In the Cj^wefta of the Central

4 American Task Force, yes, that's very true.

5 MR. LIMAN: Go ahead.

6 THE WITNESS: But then no more or no less than

7 my counterpart

8 BY MR. BARBAOORO: (Resuming)

9 Q That he was being an advocate for the FDN?

10 A You're darn right he was.

11 Q How many resupply drops —

12 A And we are very close friends. It's just .that

13 it was a lot tougher and it took a lot more effort to get

14 stuff to us and it was a lot easier to get stuff to them,

15 and we didn't get anything except for the one flight in

16 April until later on, and it was a matter of the FDN

17 certainly didn't want to deliver anything to the people

18 in the south because they wanted to take care of

19 themselves first.

20 So the people in the south were left, you

21 know, to the benevolence of the private people that were

22 connected to Ollie.

23 Q How many resupply flights were there?

24 A To the best of my ability there were nine.

25 Q What did they contain, those flights?

SECRET/CODEWORD

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1 A Ammunition, grenades, mortar rounds, some

2 rifles, some machine guns.

3 Q How about humanitarian aid, non-jlethal aid?

4 Was that also on these flights?

5 A It was not on any of the private flights.

6 MR. LIMAN: It was or was not?

7 THE WITNESS: There was no non'f lethal material

8 on any of these.

9 MR. LIMAN: These nine flights?

10 THE WITNESS: The private flights, not even

11 the mountain leprosy. I never got — that all ended up

12 at the FDN.

13 BY MR. BARBADORO: (Resuming)

14 Q Were there flights with just humanitarian aid

15 on it?

16 A Yes, sent by the Nicaraguan Humanitarian

17 Affairs Office.

18 Q How many of those?

19 A One or two. I think there were two.

20 Q So during this period, January '86 until the

21 CIA got back in the resupply business?

22 A No, no. Wait a minute. Go back to spring of

23 '84.

24 Q Okay, from the spring of '84 until the CIA got

25 back in there were elev«n?

392

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1 A Excus* m«. L«t n« avan clarify that Dor*.

2 From th« sprln? of '84 until January 24, 1987, tha only

3 supplies that raachad thasa paopla vara tha humanitarian

4 suppllas, ona or two flights, and tha nlna flights of

5 lathal agulpmant dallvarad by tha prlvata sourcas. The

6 monay was approved and In CIA's hands, and this Is a sore

7 point, Mr. Llman, on October 24, 1986, physically In

8 their hands. The first resupply flight to reach those

9 people was January 24, 1987 — three months later.

10 Q Approximately how many people were out In the

11 field then?

12 A Now?

13 Q No, back then in '86.

15 Q Were these flights enough to supply them?

16 A Oh, no.

17 g Are you in a position to estimate the value of

18 the lethal assistance that was given to them?

19 A Z have no idea. Z don't even know what a

20 bullet's worth.

21 Q Was any record made of what was going to them

22 as far as lethal assistance?

2 3 A Whenever a drop was made the commanders, as

2 4 you will sea in one of those reports, prepared an

25 inventory which he radioed in on his one+time pad, and

393

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6
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that constituted th« •ss«nc« of a dlsssamlnatad
intalllganca raport, so avary drop had an intalliganca
raport sant to Washington.

Q So from thosa intalliganca raports wa could
raconstruct axactly how much lathal assistanca was givan
to tham?

A How much thay actually racaivad.

MR. LIMAN: How much thay racaivad if thara
was a drop that hit than?

THE WITNESS: That's right. Thara was ona
casa whara a drop of savan-soma bundlas was navar
racovarad. It want into tha rain forast and thay navar
found it.

BY MR. BARBAOORO: (Rasuning)
Q In March you and your wifa anc
and his wifa want to Washington saa tha Prasidant.

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th« actual — th«"pliO«r feJpUtliity, that was handled, as
I understand it. Admiral Poindextar surrendered five
minutes of his morning briefing time.

Q Who arranged that, do you know? Was it North?

A It was either North or Poindexter or both.

Q Was that visit with the President made to
fulfill Poindexter 's promise in December when he told
^^^■about meeting with the President?

was think, ^^^^^^^^^H the
combination of a dreaa. You know, he considers the
President — he has great admiration for the President.

Q After you came out of the photo session with
the President^HH^^H was at the White House, wasn't
he? ^

A H« was in the outside area there.

Q Had that been arranged between the two of you
that he would be there?

SSWED

395

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160

1 Q W«r« you surprised to sa« him thara?

2 A No.

3 Q Was thara any maatlng —

4 A Ha was awara of whara wa vara going to ba at

5 that tima. ^

6 Q Haa thara any maating with ^^^faf tar this

7 photo opportunity?

8 A Not a maating in th« sans* of — thara at tha

9 Whita Housa?

10 ' Q Yas.

11 A No.^l^Bautographad a pictura book I

12 ^^^Bwhlch ha had also givan tha Prasidant. Ha brought

13 four of tham — ona forHHf^ ona for North, ona for

14 Poindaxtar, and ona for tha Prasidant. And ha had

15 prasantad it to tha Prasidant, tha pictura book to the

16 Prasidant, but hadn't yat autographed it or dedicated it.

17 So whan va laft h* dedicated ona of tha other three

18 copies he had outside and I think the secretary carried

19 it into the Oval Office and then brought out the blank
2 0 one and left the other one.

21 He then went, dedicating each of the remaining

22 three and he handed one to^B^Hand he handed one to

23 Colonel North and we stood around for about ten or

24 fifteen minutes waiting for Admiral Poindexter to come

25 back to finish, I guess, his briefing, and so we chatted

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thara — if that can be called a meeting. Nothing of any
substance was said.

Then, when Admiral Poindexter came back,
Colonel North, Admiral Poindexter^^^^Hand I went into
Admiral Poindexter 's office where the Admiral and]
[had an exchange

Nothing concerning
the air_strip, resupply — to anticipate your question —
or Anything else was conducted at that time.
Q Thank you for saving m« the tin*.
(Laughter.)

Tell me about your meeting with Secord that
day.

A Either before or after this — I guess it was
after — when we broke up after the meeting with
Poindexter, our wives had already gone on shopping and
North said to^^^^I want you to meet with someone this
afternoon. His name is Secord. He will be coming by
your hotel and I took the liberty of setting it up for,
what was it, 2:00, 3:00, whatever it was.

He would like to meet with you about the air^
strip.

Q Was this the first time you heard Secord 's

name mentioned?

HMflED

397

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162

1 A Y«a.

2 Q Did you racogniza tha nana whan It waa

3 mantionad?

4 A From tha book, yaah.

5 Q From what book?

6 A FroB tha book "Manhunt(\j/ I don't think North

7 had evar mantionad it baforahand or — I'm trying to

8 think now. But that's daflnitaly tha first tima that it

9 mada an imprassion on aa.

10 ' Q That you aasociatad Sacord in any way with tha

11 airjitrip or tha raaupply?

12 A That's corract. That's my imprassion. I

13 maan, I might ba wrong, but that's tha only tima that —

14 that's tha first tima I think I haard it. And thara is a

15 curious thing. I mantionad this to tha Towar Commission.

16 For soma raason, as Z haard North talkingf
^^^HHz hava tha imprassion that^^^falraady knaw

18 somathing about Sacord, who Sacord was, or that thay had

19 discussad it bafora, bacausa ha immadiataly sort of yes,

20 sura, instaad of aaying who is ha. You know, it's as

21 though it had alraady baan aort of arrangad and ha was

22 just finally tallingHV and I fait a littla laft out.

23 It's a faaling that you gat aa though you ara coming in

24 tha middla of a convarsation, although I hava nothing to

25 basa it on axcapt that faaling.

398

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163

^^^^^^^^^^V turned to me want

2 you to be there, too. I said, yes, sir. So we got back

3 to the hotel. We went out someplace Cor shopping or

4 something, and then we got back to the hotel and we

5 waited in the Four Seasons, as you walk in, there's the

6 reception desk and then there is a large open area with

7 seating and we waited there so we could have a clear view

8 of the people who were coming in through the door.

9 And Secord appeared with Rafael Quintero, so I

10 knew' who he was, although Quintero was not mentioned as

11 being a participant when North mentioned ^^^^^^^H' A"<^

12 it's the only time that I know of that^^^^sawQuintero .

13 I mean, we talked about it and so forth. We went up to

14 ^^^^^Hroom in the hotel and they sat down, the two of

15 them, and started talking, and it was^|^^Band this is

16 the second reason why this remains in my mind.

17 ^^^^^^Bhad it clearly in mind what he wanted to

18 tell Secord, as though it was something he had been

19 thinking eUsout, and he said look, there are things. I

20 want a letter from the company that's building this

21 strip, and that's when I heard the name Udall, which I

22 thought was ironic in view of the fact of Morris Udall

23 being a super liberal and here they use this name, the

24 Udall name, for one of their companies or for a company

25 which now I found out was one of many.

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^^^|Bdlctat«d terms. For example, that the
Civil Guard would have. access to this airjitrip field. I
don't remember the exact terms. The letter was published
in the press. And Secord sat there and wrote down the
terms f^^^^^^^^^^^^l They a
some minor points, but it was clearly ^^^Bwho was in
charge. And Udall — no, not Udall — Secord said that
he would get the Udall letter to him.

And it's a little fuzzy now, but for some
reason or other I seem to think that somehow that letter
was delivered later that day. I did not see that letter
until much later, weeks It

And then I never knew until I actually saw the
letter in the paper that it had been signed by Robert
Olmetead. Now I don't know if Secord signed Olmstead's
name or Olmstead was sitting there in some office in the
neighborhood and signed it. I don't know.

Q It's the Tico Times?

A The Tico Times.

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1 Q That was after Arias had announced the

2 existsnce of the airstrip?

A ^^^^^^^^^^^^^^^^^^^^m It was th^^^B

4 Minister who showed the letter to the press at the famous

5 news conference.

6 Q Did you ever meet with Secord again?

7 A Never, and I never talked to him on the

8 telephone, and Z never sent him a message. And Z want to

9 be very emphatic about that. I told Tom this. I don't

10 even-)cnow if it's appropriate, but have you ever had an

11 instant dislike for somebody — I mean an instant? The

12 chemistry is absolutely not there. I mean, some people

13 you just — you )cnow. But Secord just sent me the worst

14 possible vibes, and Z told Ollie this later. I said, I

15 do not like that man. Z don't want to have anything to

16 do with him.

17 There was just an antipathy that I cannot

18 explain.

19 Q Did Ollie ever explain to you what Secord was
2 0 doing, what his involvement was in this?

21 A He said Secord 's a good man, Secord can be

22 trusted. Z said, well, Z certainly don't agree with you,
2 3 and that's not my sense of him.

2 4 MR. LZMAN: Did you have the sense that he was

25 in it for profit? Zs that what struck you?

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THE WITNESS: No. I hav« since h«ard that
that aay w«ll hav« b««n th« cas«, but I hava no way of --
that was not my sans*.

MR. LIMXN: That wasn't what struck you?
THE WITNESS: No. It was his personality. It
was that ha cana across as a ruthlass man and I empathize
a great deal with people and I cam get along with
difficult people, but I haven't had a feeling like that
in years about somebody. That's a commentary, probably
isn't important.

BY MR. BARBXDORO: (Resuming) ~

Q Did you meet with anybody at CIA headquarters
while you were up on that trip?
A Oh, yeah, sure.
Q Did you meet with the Director?
A "

Q How many times did you meat with Casey from
the time you became chief of statior

A I met him in August '84J
^^^^^^H I him
trip in '85. I went alone

isit. And when he came to the

ymsstfiEO

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uiiwsstfe

167

1 Station in Novembar to present us with a meritorious unit

2 citation.

3 Q November ef what year?

4 A Of '86.

5 Q Was that the trip immediately prior to him

6 coming back, having to coma back to testify about the

7 Iran matter? Was it around the 18th or 17th of November?

8 A Yes. But I didn't know what he was doing. I

9 know what he did^^^^^^^^H but I don't know what ha

10 did after he left.

11 Q Did you ever discuss tha contra resupply .

12 effort with tha Director?

13 A During his visit, part of the briefing I told

14 him we had received the drops in September, which is all

15 part of the intelligence reports that wa had given — you

16 know, just the ovaxjall briefing of where they were and

17 wht thair condition was.

18 Q Did you tell him about North's involvement in

19 the resupply effort?

20 A No.

21 Q And you didn't talk to him about the air strip

22 at all?

23 A No, ever.

24 MR. LIMAN: I'm going to leave you.

25 MR. BARBADORO: Okay. I've got about a half

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an hour mor*.

MR. LIMAH: I will sec you befor* you leave
anyway. It was very nice meeting you.

THE WITNESS: It was very nice meeting you,
hopefully again under better circumstances.

MR. LIMAN: I hope this hasn't been too
unpleasant.

BY KR. BARBAOORO: (Resuming)
Q When did you first meet General Singlaub?
' A The first and only time I ever met General
Singlaub was in the Ambassador's offlcej
I don't recall the date.
Q March of '86?
A Yeah, okay. That sovinds good.
Q Did you know what he was ^"^H^^^l '°^^
A well, the Ambassador called me in and said he
could explain what he was in^^^^| ^°^' *"** ^^^^ *'*'
to approach Eden Pastors in an attempt to get Eden
Pastors to work out his difficulties with the United
States Government and somehow act as a mediator. And I
spent about ten minutes in an attempt to dii|uade General
Singlaub from any such attempt, that there was no
interest in doing so, and that in fact if he attempted to
do so it would probably be detrimental to the best
interests of U.S. policy.

404

oNemwD

1 I th«n left town for headquarters the next day

2 or the day after, and when I returned I found that he had

3 in fact gone to see Eden Pastora and worked out some sort

4 of an agreement with Pastora in which he presented

5 himself as a representative of the United States

6 Government and that then subsequently the Ambassador went

restricted channel message, ^^^^^^^^^^|

8 ^^^^^^^ which my deputy had sent and in which they

9 outlined this thing.

10 And when I saw it I went high order with the

11 Ambassador and with my deputy.

12 Q You mean you were extremely upset?

13 A Extremely upset. And I went in with what the

14 Ambassador meant to say, because parts of his cable —

15 and I was clearing it with the Ambassador, but part of

16 his cable was just Incredible, that he, knowing the

17 situation as It stood, would have allowed this cable or

18 this representation that Slnglaub made and that he in

In hls^^^^^^^^Hcable endorsed.

20 You don't often get upset with Ambassadors,

21 obviously, but I could taks certain liberties with Tambs,

22 and this was one of the times where righteous indignation

23 was called for.

24 Q Before lunch you mentioned that the Ambassador
'25 was well awarsift4 j^ i^St^^'il.^^ vas not CIA policy to

iiwm\E

405

170

1 encourag* Pastora. At this point it was CIA policy to

2 have no contact with him, and you testified that the

3 Ambassador was well aware of that fact. Did you raise

4 that issue with the Ambassador?

5 A I don't remember exactly what I said at that

6 time, but he knew that everything, that this whole

7 Singlaub affair raised ~ was contradictory to strategy,

8 policy and legality, because to support the private

9 effort of this American, Singlaub, who was, you know, a

10 private citizen, contravened the Boland Amendment

11 certainly in that it endorsed in an official way what the

12 guy, what Singlaub was doing, to say nothing of the fact

13 that we didn't want to give Pastora any encouragement

14 whatsoever.

15 Q Did the Ambassador explain to you why he had

16 done it?

17 A Well, you know, he apologized. He says, you

18 know, I didn't realize it, and then he put it off on my

19 deputy, that my deputy should have known better and that

20 my deputy, you know, let it slip. Well, I went to see

21 the Deputy, and the deputy said what the hell am I going
2 2 to do when the Ambassador tells me, he dictates the

2 3 message to ■•?

This ^^^^^^M
25 A Yes.

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Q L«t's just mark this as^B^^H Exhibit 9.

It is a cable ragarding Pastora-Singlaub agreement .
(Th« document referred to was

I Exhibit Number 9

markedi

for identification.)

A By the way, this started off the real Abrams-
Tanbs conflict. I thought that Tambs would not survive a
month because Abrams just, and from then on their
relationship went dowr^ill. This was the push over the
top.'

Q Did North tell you that Singlaub was going to
be coningP

A No, sir, and at no time did I ever recall
North telling me he had any connection with Singlaub.
He'd say things like Singlaub's a good guy, Singlaub's
trying to be helpful, but never did he ever say that
Singlaub and he had a connection.

Q Old you ever tell him about this agreement
that Pastora had signed with Singlaub?

A Oh, he didn't need to. I mean, ^^Bj^H||
I message went right to three people — Abrams,

9, that is the message, isn't it?
Let oe see it.
Let the record show the witness is reading to

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172

1 himself

2 (Pause.)

3 A Now that Jls a misstatement. That is what

4 Singlaub proposed to obtain. In the paragraph which says,

5 to quote the docximent: "It was agreed that if Singlaub

6 could obtain Pastora's written agreement to meet certain

7 conditions Pastora should receive supplies via UNO."
3 That's not correct. It was not agreed. It was what

9 Singlaub proposed. He met with very strong objections

10 from, me, less so from the Ambassador.

11 Q Let me just say first, Exhibit 9, is that the

12 back^channel cable?

13 A Yeah. Hell, it looks like the one.

14 Q Okay.

15 A You see here this cable shows the implicit

16 endorsement by Tambs and no objection made in the cable

17 whatsoever to the term "the United States will provide" 1/

18 In any case, I sent a cable some days later, when I

19 returned, in which I wrote the Ambassador meant to say,

20 ba-ba-ba, et cetera, et cetera.

21 Q Did you discuss with North the fact that
2 2 Singlaub had entered this agreement with Pastora?

23 A No, no. Essentially the whole situation

24 created so much heat between Abrame and the Ambassador

25 that all anybody had to do was just sit back and watch

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173

1 th« eiraworks. Tha thing, tha issua was daad. Nobody

2 was going to taka this seriously.

3 Q So you never discussed this agreement with

4 North?

5 A No.

6 Q To your knowledge how many times was the air.

7 strip in Costa Rica, the Santa Elena air strip, used?

8 A To my knowledge?

9 Q Yes.

10 ' A According to Rafael Quintaro it was only used

11 onca and that was tor an emergency landing of a resupply

12 flight which suffered either from bad weather or engine

13 damage or something like that, and it landed on tha air^

14 strip in July — June 16.

15 If I may quota from my notes —

16 Q Go ahead.

17 A According to my information, the runway was

18 usad on only one occasion for an emergency landing, when

19 a rasupply aircraft was required to abort its mission

20 because of bad weather. This landing occurred on or

21 about June 16, 1986. On landing, tha aircraft landing

22 gear became stuck in the mud on the uncompleted strip.

23 Nota: See page B-123, last paragraph on right side, and

24 page B-124, first part of tha paragraph on the left side

25 which refers to a North memo dated June 10. States that

UNcraswiED

409

t is "mir«d in th« mudj\^

174

an aircraft is "nirad in tha mudf^.j I cannot account for
tha diffaranca in datas.

In ordar to fraa tha aircraft and rastart the
anginas additional aircraft flew to tha site, within
approximately 48 hours all aircraft departed. This
occurr«nc« was the last known, to me, use of the site.
FYI: Z informed the Ambassador immediately after I was

8 initially notified of the incident. I also informed

9 Colonel North and subsequently, on or about June 18, I
notified ^HH^^|^^H°>^ ^^* Latin American Division

11 Chief ,H^^^^^^orboth, when Z arrived in Washington

12 for a consultation visit.

13 Q That was the only time that you Jcnow of that

14 the airstrip was ever used?

15 A That's correct. However, according to tha

16 Tower Commission report, it refers to apparently other

17 aircraft being at the airjatrip and I had abaolutaly no

18 knowledge of that. I refer to it again in my notes

19 because — well, Z refer to it in the notes. You can see

20 it.

21 Q We'll look at the notes. On June 21 and July

22 12 of 1986 you arranged for two resupply flights to land
at m^^l International Airport?

24 A That's correct.

25 Q How did you make those arrangements?

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175

1 A Wall, let me go back a ways. At some point --

2 and I don't recall how or from whom — I learned that
^^^I^^^^^^^^^V Air National Guard had a camoflaged C-

4 123 which was identical to the aircraft being used at

5 that time by the private benefactors. The private

6 benefactors informed me that they could not make a round

7 trip with a full load of supplies without refueling, and

8 they couldn't land at Point West.

'i So I came up with the idea that well, why

10 don't they just land at^^^^^H International Airport,

11 not say anything to anybody, and just simply refuel ''

12 there, pretending, without saying anything, that they

13 were the^^^^^^^^HAir National Guard aircraft, since

14 it was a known aircraft from other training trips, from

15 training trips that it made — ^^^^I^I^^B ^^^

16 National Guard.

17 I discussed this with the Ainbassador, and the

18 Ambassador thought it was a novel idea, but he became

19 concerned and he just said that he wanted somebody from

20 the U.S. Mil group to stand by and watch to see that

21 nothing went wrong, although these people were to handle

22 all the transactions themselves.

23 I added a stipulation that the aircraft could

24 not land if it had a single bullet on board. I wanted it

25 to be absolutely clean and I told Quintero that I didn't

mmm

411

176

1 car*, that if thay didn't find tha drop zone or if there

2 vara aona othar acrav up, thay ware to kick the material
anyway bafora cama ^^|^^^m||^H-

4 On two occasions —

5 Q So they'd do a drop and than land

6 at tha airport?

7 A That's correct. I don't )cnow that those are

8 tha dataa. I accept your characterization of it. They

9 did land. Tha first time thay want in, refueled and were
10 out, 'and tha Hllgroup parson informed ma —

Was that^^^^^^^^^v^

it wa^^^^^^^^^^^B^ Ha informed

13 that tha flight had departed without difficulty. The

14 second time it cama and it apparently had lost quite a

15 bit of oil, and thay had, in addition to tha refueling

16 coat, thay had to put in 18 quart* of oil in the engine,

17 and thay didn't hava enough monay for tha 18 quarts. So

18 thay signed a voucher for it.

And ^^^^^^^^^^H told ma they

20 this and tha next time I saw Quintero, or Quintero came

21 to town, which was aoma weeks later, I told Quintero that

22 thay owad $60-soma, $60-80, for the oil that they had on

23 tha voucher, and ha gave ma an envelope which he said

24 contained tha dollara. I did not count it.

25 I. tOQX»the.eavfJ.aM,W<l».I '3*v* ^^ ^°l

WMm

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177
But both toolt

and 1 said, this is for th« bill
off and land«d without incident.

Q Do you know whether the flights were
humanitarian flights, or lethal?

A These were lethal supply flights.
Q How did the other lethal supply flights make
the deliveries if they weren't using Point West and if
they weren't stopping at^^^^^^Hlnternational Airport?
A They took a smaller load.

And flew round trip non+^to
Pardon me?

And flew round trip non4sto

Well, as you will recall, I mentioned that I
asked for flight information from headquarters. They
provided that flight information for the first flight or
flights after that.

However, using the smaller aircraft, they had
to carry more gasoline if they were going to make that
long trip. And, by carrying more gasoline, they carried
less of a payload. So, the trips inside, especially
during September, during the six drops in September, the

413

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178

private benefactors decided that they wanted to get as
much in to these people as they could. So, instead of
taking that long route, with a lesser payload, then they
decided to gol

As I understand it, they did that; they used
that route the six times — certainly not with my
concurrence, but that's what they did — six times to
make the deliveries. The seventh time they tried it,
which was not a delivery to the southern frojit, but to
the FDN in the South — it was the Hasenfus flight. -

Q Do you knov

A Yes.

Q To your knowledge, was he ever out at Point
West?

A Oh, he certainly could have been, but I don't
know that, that he ever went there.

Q You never made arrangements for him to be out
there?

A Oh, no sir. The fact that he went, he went on
his own. Certainly,!
about Point West, especial]

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179

because they flew us up there.

Q Do you know, I can't say his name right,

Dagoberto Nunez.

A Yes, I know of him, but I have never met him.

Q You have never met him?

A No sir, but I know him.

Q Did you know that he claims to have known
Oliver North?

A I don't know that to be a fact.

(A discussion was held off the record.)
BY MR. BARBADORO: (Resuming)
Q Back on the record. Were you aware that he
had meetings with Rob Owen?
A Yes, J

Q I understand. What did you understand those
meetings to be for?

A In the same genre of meetings that Rob Owen
had with a lot of people associated or involved in the
resistance movement.

Q Do you know a guy who has called himself Glenn
Ford?

A No, never heard^hat. ia«Scre . Who is that?

415

180

1 Q A guy who calls himself Glenn Ford who met

2 with Rob Owen and Nunez .

3 A Kever heard the name before.

4 Q Do you know if Nunez was involved in any

5 activities regarding the Honey and Avrigan lawsuit?

6 A Yes. He was one of the people named in the

7 Miami Federal court case, and he was also involved in a

8 very sensitive operation related to that, which not even

9 counsel knew about.

10 Q Okay. My question then, and I will focus it

11 very narrowly on Oliver North and Rob Owen, do you know

12 whether Nunez had any contact regarding that lawsuit at

13 the direction of Oliver North or Rob Owen, or somebody

14 working for them?

15 A Yes, to this extent. Dagoberto Nunez obtained

16 from some source copies of the Federal suit, the legal

17 papers, and, if I'm not mistaken, I think he turned over

18 a copy of his copy to Rob Owen. To the best of my

19 knowledge, that is all I know.

20 Q And that is all you know about the contacts

21 with Owen and North concerning that suit?

22 A Yes, that he, Dagoberto, kept Rob informed

2 3 about what he had learned concerning these people. Honey

24 and Avirgan. Now, where he got that information from, I

25 don't know. I think it was from his Miami-Cuban

wmmm

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contacts, but I don't know.

417

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Q9 fiQ9 n.88.1 F.

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^y^fJisD /^

/ )

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419

couple of other questions.

Dutton. When did you first hear that name?
A Who?
Q Du|^(y>| «ir-« DfjUrt?*-

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A Except in the papers that I've read since I've
been here in the States, I've never heard of that name.
Q Did you ever speaJt with a Robert Dutton?
A Not that I know of.

How about a Richard Gadd?

No, sir.

How about a Max Gomez or a Felix Rodriguez?

I was involved!

121

-■i^rm.

iThat was
the last time that I saw Felix Rodriguez -Max Gomez.

However, it occurred to me that, just several
weeks ago, that at some point, in September, I had heard
from Raphael Quintero that Max Gomez was really creating
all Kinds of problems for Quintero, and for the warehouse
and the benefactors there ^^^^^^^^^H the crews and so
forth. I don't know exactly what it all was, and
Quintero gave me Max's phone number or Felix's phone
number just before I went on a trip to the States, and
when I was in Miami, I telephoned his home and I was
going to tell him, look, don't be obstreperous. Be a
nice guy.

You know, we go back a long ways, and so
forth. But, after I got him on the phone, and I heard
that voice again, that tough arrogance, I just said,
No, look, I just wanted to give you ray regards. You are
— you know, I appreciate everything you are doing. I
was going to go much further than that. I didn't, and I
hung up the phone. That's the only time I've talked to
him since 1971,

422

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187

Now, a lot of things have b«an said around and
assumed around, but that's it.

Q Thsrs was' a Chiefs of Station mseting^^H

in the spring of '86 whsra the new head

of LA,^^^^^^^^B was down to meet with you folks,
wasn't there?

A Yes. However, let me back up for you to
explain that meeting.

Q And this is the final topic I have. So, when
we finish that, I think we can finish.,

A In April 1986,^^^^||^^hviaited|
station in a pre, whan ha was Division Chief-designate,
in sort of a pra-takaovar, get to know the Central
American region. And, when he came in, when we net,
and I must tell you thatflH^^^ and I have been close
friends for a long time. We've worked together. In
fact, ha brought ma in origiQally to the task force, when
he was Chief, whan ha was
predecessor.

So he knew a lot of the players, and
it was really sort of an update on what the political,
military and the rest of the situation was. While he was
there I told him about communicating with the private
benefactors, and I had behind me on the floor behind my
desk the KL 4]bfl«^^%t 4k tfi|^|^|{|lVa9- And I told him

423

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IIN6HS«ED

188

thi« was th« devica I'm uilng for sacure communcations.

Q To whom did you tall him you were
communicating?

A To North. I don't Icnow if I mentioned
Quintero, but I mantionad North.

Q Okay.

A And he said, have you informed the Ambassador?
And I said, Yep, the Abmassador knows about all this.
And ha said, well, look, I don't know the points of law
regarding this, but I'm going to go back home and I am
going to check on it, and I will advise you. I said,^
fine, but as far as I am concerned, it's passing
information for the purpose of secure delivery of the
materiel, et cetera, at cetera.

And he said, okay, but I'm going to check on
the law, and I'll gat back to you. Thanks ,^^^^ ^
That's that last part of the discussion.

A meeting was held in May 1986
^^^^^^^B — well, there were several meetings. But the
one we are concerned with here is the meeting that took
place with^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H
^^^^^^^^^^^^^^^^^^^^^^H myself ,|^^^^^^^^H and

and tha subji^ct immediately upon the door
being closed was, look, ^^^f got a problem, and we've
gotta fix it b%:#ij%^W'Wl'ff iWr''^'^^* communication

subject

424

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189

1 for th« passing of information of th« thing is

2 complicated, and it could present us with a problem.

3 That's the gist of it. But, he did say.^^B uJ

4 has a problem and we need to fix it. And so it was our

5 common problem. Okay, the solution we came up with was

6 the following: in order to take me out of the loop,

7 we would train a Nicaraguan Riisistance ^mnunicator^^V

8 ^^^^^^^igive him communications equipment, and one-

9 time pads, and send him^^^^^^^^H where he would be

10 located and interface with the private benefactors, and

11 when he received information from the private benefactors

12 concerning a flight, he would encipher it, send it to the

13 Resistance Communications (/•nt»r ^^^^^^^^M who would

14 relay it inside to the commanders.

15 Likewise, information from the commanders

16 concerning a drop zone, timing, et cetera, request needs,

17 would b« relayed through the coanunlcatlons center, which

18 would encipher It and send It on the corresponding one-

19 time pad to their man inside ^^^^^^^^^B It looked

20 like an ideal situation.

21 Q It didn't work, though, and the reason it

22 didn't work was they decided later on that they couldn't

23 provide the support necessary to put the UNO South

24 communicator ^n^^^^^^^^H isn't that right?

25 A No, not quite. We worked. We trained the

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190

man. W* selected him. ^^^^^^^^^^^^^^H We got him
all set up to go^^^^^^^^H The private benefactors
provided a paid ticket. The problem was, we couldn't get
the man a visa in his Nicaraguan refugee document. I
communicated with^^^^^^^^^^^^^^^ asking him to go

could go
jet a visa for this guy to be
able to go up there. ^^^^^^^^^^^^H came back and
said, no, we can't do

we asked him, can you fix it so that this communicator
can get up there, or this individual can get up there?
And he said, I don't think there is any problem. And he
did

Juet at that point, with the viea fixed, the
airline ticket in hand, the training completed ^^H|
^^^^^^^^^H| ready to then up

cable from l^eadguarters , dated July 12, which says, stand
down on the whole operation.. SiiQcJt, .Qf all shocks. I

426

UmSSfflEO

191

thought v« had th« problaa and that w« vara going to taka
cara of It. Nov tha stand down, and, you know, tha taxt
of tha cabla.

I go up to ^aadquartara aftar that on
consultation, and Z want In to ***^|^^| ^>^^ ^* said,
What happanad? Z said, what happanad? Ha said, Z callad
In. This is tha aftamath. ^H^^l said ha callad In

rafarrlng to tha stand-down cabla, and ha said, Z
thought that wa had to flxH|^|problaB by gattlng a
couninicator up thara. Nhy did va sand out this cabla?
C^^^^^not raalising what cabla ha was talking about, .
talli|^|B^Voh, don't worry about it, that's
all baan takan cara of — maaning that, or thinking
that, wa wara atill talking about tha visa problan.

So, l^l^^^^^th^ Division Chiaf, is laft
with tha iaprassion f roB^^^^^^B| that tha cabla ha Is
rafarring to, tha July 12 stand- dowp cabla, has baan
takan cara of. At tha saaa tiaa,^^Hls rasponding to

L9 Lm^^^^K^y tailing hia that it's all baan flxad concaming

SO tha visa.

All right. Now, lat's just finish tha atory.
Tha comvmlcator didn't go bacausa of tha stand-down
cabla. HfeHknaw that tha coaaunicator didn't go. Early
Saptaabar, North tails aa, ha said, wa want to claar out
tha warahousa at^^^^^Hand sand avarythlng down in a

■aunlcai

life'

• at^^^^^^Hand

UlilStFIED

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192

1 big push to th« p.opl. in th« south. And hs said, can

2 you — ws don't havs a communicator. Can you handle the

3 coordination of the Information, of the passage of

4 information?

5 I said, sure, have him come down. And that's

6 where the other six flights came in — seventh, ninth,

7 eleventh, fourteenth, eighteenth, and the twenty-third —

8 and every one of those flights, every one of those

9 flights, either in operational traffic or as disseminated
intelligence report, or both, were reported to

11 Headquarters. ■k)cnew we didn't have a communicatQr up

12 there. ^^^^^^^B )cnew we didn't have a communicator

X3 atjjH^^lhandling all this traffic.

j^4 My question is, in retrospect, who do they

15 think was doing it? There was no fairy godmother up

16 there handling a thing. I had done it earlier because I

17 had told the.. They Jcnew I was handling. I had to be
handling it now, because th« communicator had not gonej

18
19
20
21
22 on

Q But my point to you is that you also knew that
you weren't supposed to be passing those communications

23
24
25 A

A Why not?

Q Weren't you told that in May?

I was told in May that there was a problem and

ttN6t*S8!HE0

428

193

1 that th«y naadad to fix it, but then th«y stood down on

2 th« solution that I offered to them about sending the

3 conuDunlcator up there. So, we were back to sc[uare one.

4 I was still passing the traffic.

5 Q So, you assumed that even though there was a

6 problem, since the solution had been not implemented,

7 that you should continue?

8 A But, of course. All right, let's say that was

9 the case with the first flight, or even the second

10 flight, or even the third flight. Did anyone come down

11 and tell me, hey,^^^| stop, you know, don't do that.

12 Stop. Nobody said it. Flight after flight after flight

13 went in, and the reports and the traffic outi

14 back to Headc[uarters informing them of it. You know,

15 it's very easy to Monday *morning quarterback on these

16 things. But, when you take a look at the facts ,^^^^k ^

17 ^^^^ftells the world, I didn't know anything about it.

18 Por favor.

19 Q The last thing I have, let me read you some
2 0 names of Cuban-Americans. There are five of them. One

21 of them ia Dagoberto Nunez. The other four are: Claudio

22 Picasso, Rene Corvo, Petro Hernandez —

23 A Wait a minute, Claudio Picaeeo is not a Cuban

24 American. Claudio Picasso is an Italian-

25 Nicaraguan.

mw#iEe

429

194

[Laughter]
Okay.

Q L«t ID* just finish this list. Th« last person
I have is, Felipe vidal Santiago. Mere any of these
five people involved in any way with the private
benefactor operation?

430

11^

^fJ/sD )^

/-;

T^U

431

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

MR. BARBADORO: I don't hav« anything else.
It's be«n a long day. But, that's all I have.

MR. WILSON: I would like to ask one
clarifying question, if I could.

EXAMINATION ON BEHALF OF THE WITNESS
BY MR. WILSON: ^

Q On this business AhoMtj/j/^^got a problen,
Did you ever discuss withf^2[^the nature of the
problem as he perceived it? Was it a legal problem- or a
political problem. What kind of problem was it?
A Are you asking me the question?
Q Yes.

A I think it was probably a political problem
because everybody is pretty clear about the whole

UNCtftSStflED

432

Pi ^ v-^ir

197

1 quaatlon of passing Infomation. I did not raally

2 hava a problaa in tha South in tarms of tha

3 straightforwardnasa tof it. I think, for axampla,
tha and ^^^^^^^^^^^^^^^^^^H must hava

5 had a daily — I can't saa how thay oparatad without

6 a lawyar, bacausa thay vara auch aora involvad in

7 military.

8 Z maan, tha FDN was such aora involvad

9 in ailitary aattars, and it had to slop ovar into

10 ^^^^^H concams . So, I think that raally in ay

11 casa it was a political problaa. Wa vara daaling

12 vith tha passaga of inforaation. Yat, what happens if

13 tha Congrass finds out and vants to aaka an issua of

14 this. I think that's vhat va vara all trying to avoid --

15 tha infaranca or tha iaplication, tha insinuation of a

16 violation of tha Boland Aaandaant.

17 Claarly, that vas tha casa vith tha July 12th

18 cabla, and it said so. That wa'ra vary closa to tha

19 vota. Ha'ra about to gat it. Wa don't want to do

20 anything to andangar it. I aaan, it vas a Johnny Tvo-

21 Stap that just said, look, guys, back off on facilitating

22 tha coBBunicator up thara.

23 MR. BARBADORO: Okay, tha Housa paopla wantad

24 aa to lat you knov that thara is a possibility that they

25 aay vant to dp. » .4JAil«:wi#C>f»Atk«rv Of course, they

WWED

433

UNCUSSIflED

198

1 would hav« ^ours available to tham, and it would b« much,

2 much shorter.

3 MR. WISE: Y«», in fact v« will b« in contact

4 with you regarding a conununication of th« immunity order

5 by the c[uoruB on our Committee.

6 MR. BARBADORO: Thank you very much.

7 (Whereupon, at 4:39 p.m., the taking of the

8 instant deposition ceased.)

10 , Signature of the Witness

-1 Subscribed and sworn to before b« this day of

12 _, 1987.

14 Notary Public

15 My CoBBission Expires:

UHfik*SSIf!ED

434

^ CERTIFICATE OF NOTARY PUBLIC

I. ANNE PELLECCHIA HOROWITZ, the officer

before whom the foregoing deposition was taken, do hereby

certify that the witness whose testimony appears in the

foregoing deposition was duly sworn by me; that the

testimony was taken by me by Stenomask and thereafter

reduced to typewriting under my direction; that I am

neither counsel for, related to, nor employed by any of

the parties to the action in which this deposition was

taken; and further, that I am not a relative or employee

of any attorney or counsel employed by the parties

thereto, nor financially or otherwise interested in

the outcome of the action.

Notary Public in and for the--
1» State of Marylsmd.

20 ^ Commisaion expires,

21
22

/ /

UNCUSSIFIED

435

DEPOSITION OFi

C I <r> m n '^ C(i "3 / / // cj

Monday, May 4, 1987

U.S. House of Representatives,

Select CoiTunittee to Investigate Covert

Arms Transactions with Iran,
Washington, D.C.

The Committee met, pursuant to call, at 11:00 a.m.,
in Room 2203, Rayburn House Office Building, with W. Neil
Eggleston (Deputy Chief Counsel of House Select Committee)
presiding.

Present: W. Neil Eggleston, Deputy Chief Counsel;
Tina Westby and Richard H. Giza, Permanent Select Committee
on Intelligence; Richard L. Leon, Deputy Chief Minority
Counsel and Thomas E. Wilson and Mary Beth Sullivan, on

behalf of

Partially Declasshedmeteasad on.£J*^

undef D'ovisions ol E 0 I33S6

by K Johnson. National Sacwity Counc*

yNWSSiFlE!!

3/?o/).

436

mmm

1 Q Were you aware that Robert Owen was carrying

2 munitions lists from the contra leaders to

3 Colonel North?

4 A No, sir.

5 Q Did you know whether he was making payments to

6 the contra leaders of funds he received from Colonel North?

7 A No, sir. I had heard rumors to that effect, as

8 everybody heard rumors and, in fact, he was in the press

9 that Robert Owen was some sort -- he never said that to me,

10 I never questioned him on it. I just didn't.

11 Q The rumors were that he was a bag man for Colonel

12 North?

13 A That he was a bag man for the contra leaders,

14 that he was bringing money to them.

15 Q Now, I am not asking you what you knew. I eun

16 asking you what the press and the rumors were that

17 you were aware of at the time. Were those rumors

18 reporting that he was carrying money on Colonel North's

19 behalf?

20 A Frankly, I didn't put much stock into this whole

21 thing because I didn't think they were true. I thought

22 that it just seemed to be a conclusion that somebody

23 had drawn by the mere fact that he was always around and

24 always there and always lent him a sympathetic ear. I don't

25 personally know of any occasion when he brought money to them

Mm h \J\ Qmrtfe irm

437

DKS^ASSI^'^

3
4
5
6

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

Whereupon,

having been first duly sworn, was called as a witness herein,
and was examined and testified as follows:
EXAMINATION

BY MR. EGGLESTON:

my name is Neil Eggleston. I am
Deputy Chief Counsel of the House Select Committee to
Investigate Covert Arms Transactions with Iran. Also
present are Congressman Brooks and Congressman Fields, both
members of that committee, and Mr. Giza and Tina Westby are
also present and your two counsel.

This deposition is being conducted pursuant to
rules and a resolution which was passed establishing the
committee and permitting the committee to conduct depositions
in furtherance of its investigation. I have previously
provided your counsel with copies of the resolution and of the
rules. If I haven't or if you would like to see them, I have
brought them with me today.

MR. WILSON: We do not have a copy of those. We got
them from the Senate.

MS. SULLIVAN: We do have them.

MR. EGGLESTON: If you didn't, I have brought
copies with me in case there is any confusion.

imsm

438

umStabvis

1 BY MR. EGGLESTON:

2 0 ^^^^^^^^^^^1 do you know a person by the name of

3 Colonel Oliver North?

4 A I respectfully decline to answer on the grounds

5 that it would be inconsistent with my Fifth Amendment

6 privilege.

7 Q I take it that if I asked you additional questions

8 about your involvement with Colonel North or other activities

9 you will similarly refuse to respond; is that correct?
10 A That is correct.

Q ^H^^^^^^^^^l let me advise you that on March

12 30, 1987 Judge Aubrey Robinson, a United States District'

13 judge in the District of Columbia, signed an order which

14 provided that you were immunized from the use of your

15 testimony or information derived from your testimony. I have

16 presently provided a copy of this to your counsel. Have you

17 seen this?

18 A Yes.

19 Q I ask that this be made part of the record.

20 (Whereupon, the document referred

21 to was made a part of the record.)

22 BY MR. EGGLESTON:

23 Q Mr. Brooks and Mr. Broomfield, let me shqw you a

24 copy of it and we will ask you now to direct

25 to respond to any^ gue scions ^h^t_^^n3y_^^ posed to him since

Mlfflflr'

im^HEF

this order does grant him immunity from use of his statements.
He is directed to respond.

MR. BROOKS: He is, yes.
BY MR. EGGLESTON:
Q ^^^^^^^^^^B let me tell you hope to do
in this deposition.

You have previously given a deposition to the
Senate at which a^plepresentative of the House was
present, although he was not asking questions because at
that time the immunity order had not yet been conveyed upon
you. I have not yet had that transcript made available to
us.

I would like to ask you general questions about your
background and then instead of conducting a complete
deposition, there are various areas that I want to question
you about that in my understanding from the Senate may or
may not have been covered but I would like to cover: them in
a little more detail.

Let me ask about your background. When did you
begin with the CIA?
A

Q What was your first assignment?

A After training, ray first assignment was a temporary
duty ^^^^^^^^1 for a few months. And my first permanent

440

Q You are a little later coming to the CIA than most
of the people with the CIA that I have had occasion to talk
to now. What did you do before you began with the Agency?

A I was a police officer for eight years,

I started as a patrolman and left as a detective
sfrgeant .

Q If you could just complete the' various assignments
you had at the Agency up until the time that you were
appointed Chif of Stati

Central American Task Force, late 1982 until July 1984, Chief

of ^^^^^^^^^^^^^HJBranch,!

July 1984 until present. Chief of Station,]

Q Are you still as of today with the Central

iumssiaoi.

441

Intelligence Agency?

Yes, sir.

Is your retirement scheduled?
I have no intention to retire.
You have no intention to retire?
That is xi

administrative leave at present.

Q Let me just ask you -- as I say, I am not going
to -- I know that the Senate spent almost an entire day with
you. I don't intend to spend that long and want to
ask you some questions about particular areas. They are "not
necessarily going to come in chronological order and
Mr. Giza and Ms. West might have questions as well.

When did you first get one of the encryption
devices?

A Spring, I think — I think — Spring of 1986.

Q In April of 1986, as I understand it from
reading the various files that, as you well know, have now
been created on you, there were the first of the four
shipments where you cabled for vector information and you
got the responses; is that correct? Is the first one of
those in April of 1986?

A There was a flight in April 1986, only one. You
mentioned four.

442

mrnm

^ Q I am sorry. I meant the first of four, the first

2 one being in April. I didn't know that there were four in

3 April.

4 A As I recall, there were nine altogether, and I have

5 them categorized in my mind as the first one being the

6 Bell 100 fligl.c, which I believe was in April of 1986. That

7 is when the delivery was actually made.

8 However, prior to that there were attempts which

9 were aborted for reasons of mechanical failure or whatever.

10 After that April flight there were, I believe, two, and then

11 there was the final group of six in September.

12 Q As of — I guess the question I was sort of leading

13 towas as of the time of the first flight in April that

14 actually went through, did you have the encryption device

15 by that time, if you know?

16 A Yes, I think I had it by the time that first

17 flight came in.

18 Q Who gave you the encryption device?

19 MR. WILSON: May I clarify for the record that the

20 encryption device is a KL-4 3?

21 MR. EGGLESTON: That is correct.

22 BY MR. EGGLESTON:

23 Q That is correct. To the best of my recollection,

24 it was Rafael Quintero, a private American citizen.

25 Q It is also my understanding that on these KL-4 3s

443

3
4
5
6
7
8
9

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

WL^sffe

that it is sort of a physical device but in addition to the
physical device, there has to be a key, the
encryption code that goes with i(

it was obviously a U.S. Government -produced tape

Q My question is did you receive more than one of those
over the period of time —

A I received

Q How did you get each of those?

A Mr. Quintero delivered them to me.

Q You think you got them from Mr. Quintero each
time?

A Yes, I don't think North ever gave me one. I know
that Quintero did.

Q You kept the device ttuyuahSeptember?

;ept the device thrpuohSi

444

IMflW

1 A I kept the device from the time I received it

2 ^^^^^^^^^^H with me until December 1986. Of course,

3 I didn't use it after early October. And in December I

4 brought it to Miami, put it in a box, unlabelled, sealed

5 box, and left it at my mother's home in Miami.

6 I subsequently turned it over or she on my

7 instructions turned it over to an Agency officer]

8 who returned it to Headquarters.

9 I would hope that my mother would not be involved

10 in this matter.

11 Q It sounds as if your mother received a sealed

12 box --

13 A That is correct. Unlabelled, sealed box.

14 Q Which she turned over to an agency official.

15 Other than Rafael Quintero, Colonel North and

16 Mr. Copp — why don't I ask it this way. Who did you

17 cominunicate with --

18 A Only Colonel North and Mr. Quintero.

19 Q You never communicated with Mr. Copp?

20 A I did not.

21 Q Let me go through the other people.

22 A Let's clarify — I did not know who Mr. Copp

23 was until I was told by the Tower Commission investigators

24 that that was a pseudonym used by Mr. Secord -- or General

25 Secord. I never communicated with him via this machine and

uMfiiiism.

445

HNffiMffiF

I only saw him one time, which I have, of course, explained
to the committees.

Q Were you aware that there was a Mr. Copp
who was involved with Mr. North in the re-supply operations?

A It is difficult to say because at times North
would say names and -- because they didn't mean anything to
me, I didn't pay attention to it, never registered with me.

Q So what you are telling me is that he may have
mentioned a Mr. Copp or he may not have, and you don't really
recall?

A There were other names that he mentioned that I
simply do not recall. I am consciously trying to avoid
recalling, even letting it register with me.

Q Did you know a man by the name of Robert Dutton?

A No.

Q Robert MacAlister?

A No.

Q Let me go through the list.
Richard Gadd?

A No. Now, that is a name that I had heard North use,
but I did not know who he was and I have never met him.

Q Did you know Robert Owen?

A Yes.

Q How did you first meet Robert Owen?

A Ambassador Tambs introduced him to me in his office.

iim&!^i!Hf4L

446

vmmw

Q Do you recall when that was?

A I pondered that question, and the best I can come
up with is some time in August or September of 1985. It was
after Tambs arrived at post and that was July and
we had heard about this Robert Owen, ^^^^^^^^^^^^^^^H and
I had heard his name being mentioned by Nicaraguan
resistance personnel, but we had never met the guy.

Q So you think the first time you met him was in a
meeting --

A I remember the occasion when Ambassador Tambs called
me into his office and said there is somebody here I want
you to meet.

Q What did Ambassador Tambs tell you about
Robert Owen?

A To the best of my recollection, and I am not sure
it is accurate, that he was someone who worked with Colonel
North.

Q Did you understand that to mean that he was a
Government employee?

A Oh, no, it was quite clear to me that he had no
Government connection and I never asked him nor do I know
to this day who he actually worked for. I have heard reports
that he works for some public relations firm but I never
asked and he did not tell me. When he eventually became
associated with the NicaraguanJiiunajiititf ian Assistance

447

nmm

Office of the Department of State then, of course, I knew
who he worked for.

I was very careful in dealing with Mr. Owen because
he was an American citizen. I can't task him under agency
regulations to find out something, even though my officers
and I were well aware that Robert Owen probably had the most
extensive network of contacts among the resistance leaders,
including people with whom we did not want to have contact
with, and who, however, were involved with the Nicaraguan
resistance.

To explain that, there were, for example ,^^^^
^^HHHH mercenaries, people like this, that were
accepted by the Nicaraguan resistance as compatriots in their
struggle. However, we were very leery of these people.

However, Robert Owen had an entre to them and so
from time to time when he came to town I would meet with
him for breakfast or a cup of coffee and he would voluntarily
give me sort of a round-up of what he knew about what was
going on, which I accepted as any American citizen who
wishes to volunteer information to its Government. Later on
when he did become involved with the Nicaraguan Humanitarian
Assistance, I did ask him, because then he was a Government
employee, I did ask him to find out things about what was
happening with that group or another group, but that was the
extent of it. ||iini APPjl

448

Q Did you know the date of his relationship with
Colonel North?

A I assumed he was a leg man for him and went out
to find out on behalf of Colonel North or people that
Colonel North had contact with what was going on^^^|

|among the various political and resistance

groups .

He didn't deal too much with the political area,
but since there was overlap, he occasionally came up with
tidbits that were interesting.

As I say, he was very well informed.

Q Do you know how he developed these contacts?

A I assume he did it through one principal
contact he had, John Hull.

Q You knew him to be a close associate of Hull's?

A Yes. Someone told me at one time Hull
considered him sort of his adopted son.

449

mmm

2
3

and whatever the press reports were, I simply don't -- I
can't recollect.

Q You never asked Owen whether he was carrying money?

A No, sir.

Q Did you ask Colonel North whether Owen was carrying
money to Colonel North?

A No, sir.

Q I know that everyone has asked you lots of
questions about the airstrip. I have read your Tower
Commission testimony about the airstrip and I eun not going to
soup to nuts the airstrip and I am sure that the Senate
asked you lots of questions about the airstrip but I don'.t
have the transcript available.

When did you first become knowledgeable that there
was an effort to build the airstrip?

A As I explained^ I think more amply to the Senate
than to the Tower Commission, the idea of an airstrip was
really an idea, a concept, that grew out of a problem that
the United States mission and most specifically myself,
and to just a slightly lesser extent, the Ambassador,
were experience

450

mmm

Well, as you know, our influence diminished after
the Boland Amendment was enacted and whatever leverage
we may have had on them before, which was minimal, believe
me, was close to non-existent at the time so it was a
problem for us having to deal witt

and the fact that we were at the seune time attempting to
keep this force viable until the Congress could re-
consider the question of support to the military side of
this.

At the same time, I had the responsibility of

same time, I had the res

li^lEliSiimtl

451

■^BBSIFffB

trying to bring about some sort of a coalition -- probably a
better word is aggregation of the political groups --
well, since the political groups were closely tied to the
military groups and that these were their brothers in arms,
it became a complex problem or it was a complex problem.

So in looking for a solution!

the obvious solution is
get them back inside Nicaragua to fight.

How can this be done without some means of
eventually supporting them? Well, in looking again in
conceptual terms, down the road to when there would be a
re-institution of military assistance, it became apparent
that the only way that these people could be supported was
through some site^^H^^^^^^^HK^hich -- where there could
be for re-fueling or re-supply that the aircraft could
land and re-supply the southern Nicaraguan forces.

All of this was discussed almost on a very frequent
basis with the Ambassador because of his high degree of
interest in the whole matter of southern forces.

So in either — I think it was August — August or
September, maybe late August or early September, but in
there -- Ambassador Tambs

452

Shortly af ter^^^^^^^^^l Owen visited the Ambassador
and the Ambassador suggested that Owen go up to the site --
to the site^^^^^^^^^^^^^^^^^^^^^^H selectedl
(Owen, that he should go up.

I accompanied

Owen and we went up to the site withi

land walked the site and Owen took pictures of it
and, as I understand, he later delivered those to Colonel
North.

That is where the idea of an airstrip started and
why. Subsequently, Mr. Quintero came down to handle the
details. He followed a person by the name of Robert
Olmstead, who actually contracted with the owner of the
property, who was an American citizen also, by the name
of H£ui\ilton — but all of that I stayed on the periphery.
I knew about the negotiations. I was kept informed of them

453

mmw

Q So^^^B^^H was the one who primarily kept you
apprised of the negotiations?

No,

Q Let me go back to the first sort of step that you
told us about. You had indicated that there was some
notion that this airstrip might be a place that would be
used once, assuming Congress reversed its position and
once official U.S. military support became permissible,
again?

A Yes, let me — my feeling about it was that
these people were doing this thing and I thought that was
primarily their business. I didn't advise them on how they
should proceed other than that I wanted the thing to be
kept absolutely discratt^ and quiet. I didn't want, and in
fact, I insisted^^^^^^^Hthat no Nicaraguan should ever
know about the existence of this airstrip. My reason for that
was I eventually envisioned that the agency would take over
this operation and that it would be run as a paramilitary
air operation site once there was the re-institution of the

funding.

IMASSIfm

454

DNttSSStPilT

I never really thought that these people could do
anything more than -- the private people could do anything
more than to really build it. If that is what they wanted to
do, fine, but for operational reasons I could see that this
could only be carried out by our own people with the necessary
expertise.

Q Your supervisor, I take it, generally at the
agency during this period of time wasj

A During this period, yes.

Q He, as I understand it, was Chief of the Central
American Task Force from October 1984 — He and Boland
come in at the same time; is that your recollection?

A Could you ask me the question again?

Q It was a wandering question, not jjery well framed.
Is it your recollection that ^H^^^^^V began as
Chief of the central American Task Force right around the
time, the Boland Amendment became effective, early October
of 1984?

A No. I think it was later than that. I think —
no, in fact, I am certain it was later than that. ^^^^^B ^^
took over the task force in the spring of 1985. I am
positive.

Q Why are you positive?

A Because I know who was the Chief of the Task
Force in October q£_13'14-

IftSSlBEL

455

Q And who was it?

^^^^^^^^^^^^^^B and he that

winter and then the first time I met ^^^^H was when he made
a trip ^^^^^^^H in the Spring of

0 But at least by August of 1985 -- let me just

tell you, ^^^^B has told me that i.e started in October
of 1984, that ^^^^^H^H[ -- can we go off the record?

(Discussion off the record.)

MR. EGGLESTON: Back on the record.

BY MR. EGGLESTON:
^ Q In any event, it is your recollection that

'does not begin as Chief of the Central American
Task Force until the Spring of 1985 and that
remained in the position throughout the Fall of 1984 --

A That is my impression. Certainly in the fall of
1984, and I would -- I am pretty sure it was into the
winter of 1984-85, and that^fl^^^^^l took over some
time around March or April of 1985, and that there was an
interim chief or maybe there was just an acting chief
during that period.

Okay. But in any event, at least by August of
is Chief of the Central American Task

J had discussions with^^^^H

about the need

456

DNttlSStPifiT

2
3

to create an airstrip if the agency got back in military
re-supply prior to August of 1985?

A Prior to, no, because this all came about due to
the increase in difficulty that we were having with the
Nicaraguan resistance people ^^^^^^^^^^^| It had been over
a year that we hadn't been able to give them any support
except moral support, and things really reached a very
bad point, with lots of incidents such as the ones I described
earlier, and so the coincidence of Ambassador Tambs '
heightened interest,

the locating of an airstrip in Costa Rica sort of
brought together the opportunity

you are going to get the contras back inside they have to be
re-supplied and they won't go back inside unless they have
re-supply, yet they can't be re-supplied unless there is a
site where they could be, even though it is another place and
the aircraft could be re-fueled there. ^

So it wasn't a subject of conversation with^^^^H
at that time or even --

Q That was the next question. When is the first
timg that you think that you had a discussion with

face-to-face, I am not talking about cable
traffic, but face-to-face about the airstrip?

457

In our parlance we talk to our headquarters
counterparts or supervisors by cable, in those terms. So
that would have been the first time.

Q And you think that was immediately after --

A Yes. I don't recall the date of that cable,
but I would say certainly within a week to ten days after
the Ambassador reported back to me. I had completely forgotten
I had written that cable until the Senate counsel showed it
to me, which, in fact, was a very fortuitous aspect.

Q And then you received a cable back; is that right?

A Well, as I said, I didn't remember even sendincf
it so I don't really remember getting an answer, no.

Q Let me get to the answer to my question. Do you
recall a time when you discussed personally with
the airstrip?

A Yes. Some time, much later on, a visit that I
made to headquarters, but I don't remember whether -- but I
did discuss it with him.

Q Was that still in 1985?

A Oh, yes. It would have to be. The fall of 1985,
some time in the fall or early winter of 1985. The reason
I say that is because the airstrip was a fits and starts
thing, and it was some time after construction had been
started, and it was some time after I had talked to

llNHIi^aiD.-

458

ONttHSStFlfflT

Assistant Secretary Elliott Abrams about it, or rather,
that Assistant Secretary Elliott Abrams raised it with me.

Q Right. I am not going to ask you about that
because you testified that at least in the Tower Commission
and I assume before the Senate.

A Yes.

Q That is one of those areas there is no point in
me covering --

A Except that it allows me to answer the question
with this comment. I took it for granted then that
since the RIG was apparently aware of it, then obviously
^^^^■had to be aware of it. In fact, I asked, if_ I am not
mistaken, I asked Assistant Secretary Abrams if j
aware of it and he answerd in the affirmative, yes, that is
correct.

Q And that occurred during the conversation that you
had with Abrams and the two case officers —
^^^^^^^^^H that

0 Was there other cable traffic in the fall of
1985 with regard to the airstrip?

A I don't think so. Because, as I said, I took
this as being extrzmeous to my situationfm^mm^

It didn't involve me
personally. It didn't involve my funds. It was being
undertaken by these people

Kiffiia

459

lIRJBl^HEffT

was one other aspect that in February of 1986 I was present
at a meeting funong the Ambassador, General Galvin, Colonel
North in which Colonel North briefed General Galvin, updated
General Galvin on the airstrip and the existence of the
airstrip.

Q Where was that?

A Aboard the aircraft!

Q What did he tell him?

A Things were proceeding, construction is a little

uiAcussm^

460

Mf^lffir

behind schedule, but it was fit into a general update of
the overall political military situation,

land other parts that had to do with non-
private benefactor matters.

Q Did --

A Excuse me. Let me, again, to make sure that you
understand me and these sort of disjointed comments, I
understood that this was an officially acceptable
activity. I mean, when you hear Assistant Secretary Abrams
saying he knows all about it and that he is aware of it
by virtue of his meetings with the other two members of the
RIG, and General Galvin was being informed of it in a sort of
a matter of fact way and I had airiggd the Ambassador and he
was interested in it ^^^^

while the actual physical
construction of the place was being carried out by American
private citizens, as Counsel LMman mentioned, I guess I
was the only one who thought it was a big secret. It was a
secret that everybody knew about.

Q I am going to introduce a series of questions by
commenting that there was a story in yesterday's New York
Times reporting statements that Mr. Tambs had made.

461

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

IflffiB^SSPrr

^ Q In the story, Mr. Tambs refers to essentially
^ taking his orders from what he considered to be the RIG.
"^ MR. WILSON: For the record, we are referring to

the story starting on page 1 of the New York Times dated

Sunday, May 3, 1987.

BY MR. EGGLESTON:
Q That is correct. The far right hand column is the
story. What was it your understanding that the RIG was
and what its function was?

The RIG stands for Restricted Interagency Group
and the members from NSC were Colonel North, from the CIA,
taaabl^l^ from the State Department, Eliott Abrams; is
that correct?

A That is correct.

Q What was your understanding was the function of the

RIG?

A It was a policy coordination body that brought
together and discussed and made decisions on interests
regarding the Central American military/political situation,
and that this was the main policy spokesman for the U.S.

Government.

Q But I take it it was clear to you that the RIG was
a policy body and that you w^e - you were a CIA employee
and your supervisor was|^ilH^"'^ ^^°^^^ ""^"^^ ^'"^
in the CIA?

UNCI ASSIFIED

462

Mumip'

A That is correct.

Q You didn't take orders, I would assume, from
Elliott Abrams?

A No. The Ambassador did.

The Ambassador did -- you would take orders from

A That is correct.

Q And Ollie North took orders from whomever?

A I did not take orders from Ollie North.

Q You didn't take orders from Ollie North?

A Absolutely not/. Ollie North and I were
professional colleagues first, friends second, very close,
one to the other in terms of where — because our professional
relationship certainly was also based upon the fact that we
were very friendly to each other. But I »ver took any

orders from Ollie North
'' I kept him informed when he asked questions about

'" difficult political situations going on in the south
'' Q And I take it at least to the best of your knowledge,
Ambassador Teunbs did not take orders from Ollie North?

A That is my understanding. He did not take orders
from Ollie North

Q And similarly the RIG as an organization did not
issue orders. Orders-implementing RIG decisions would have

25 come you f'^onfll^^l^^^V'

JIMCII

icciflca.

463

MMm

A That is correct.

Q They would not have come to you from an organization
called the RIG.

A They would not have come to me either from
Assistant Secretary Abrams. Now, on occasion, and there
were several occasions when Assistant Secretary Abrams
or the Central American unit at State would send orders
to their people, the Ambassador and the

any problem with it let him cable up to CIA headquarters
and then they would -- we will discuss it up here, which
was a very convoluted way of doing business, obviously.

If State did do anything — when State attempted to
become involved!

immediately informed headquarters and -that was
problem then to resolve it with Elliott Abrams.

Q And although that might have been cumbersome, it

ii[iri&si!ii[a.

464

1 was up to them to fight those fights, not up to you?

2 A Certainly. But getting back to this, I am

3 going to anticipate your question --

4 Q Go ahead.

5 A I think that it was the Ambassador's perception --

6 I don't think there was any -- that he received instructions,

7 I think he simply in his enthusiasm and his diligence to be

8 as forthcoming as he possibly could, may have perceived

9 this to be their desires rather than their instructions.

10 Q That was what I anticipated hearing, actually,

11 because — let me get back to the airstrip and just a few

12 more questions about the airstrip. Had you met Rafael

13 Quintero prior to August of 1985 -- let me ask it this way --

14 prior to the time that he becomes involved with the

15 airstrip?

16 A No. I had never met him.

17 Q How did you establish his bona fides. How did you

18 know who he was?

19 A North told me he was coming^^^^^^^^^^^^^^land

20 he said he was a person that he trusted completely, and that

21 was enough for me, to hear it from Ollie North.

22 Q Did you want to make a comment about another part

23 of the story?

24 A Only that he refers to the strip in here where it

25 is a total inaccuracy. I am referring to a paragraph

Mmi^iO^IL

465

vifiu:

iuuini:r

'' contained in the New York Times article which appears in

2 the continuing portion on page 14 of the same edition in which

3 it says — in which Mr. Tambs allegedly said that when

^ he arrived in Costa Rica in July 1985, Mr. Abrams and other

5 officers of the Restricted Interagency Group asked him to

6 persuade the Government to allow contra supply pilots to use

7 a secret 1.2 mile long airstrip that Colonel North's operatives

8 had built just south of the Nicaraguan border.

9 The 1.2 mile airstrip did not exist in July of

10 1985, in 1985. It really didn't start to be constructed

11 until late November, early December of 1985. Construction

12 was stopped in March of 1986. It was never completed. The

13 grading -- the leveling had been done but the grading had

14 not been.

15 It was not possible to land an airplane at this
18 strip with any degree of safety as we found out when Quintero

17 reported that in June of 1986 an emergency landing had to be

18 made there and that the plane got stuck in the mud, because

19 there was virtually no drainage, none of that work had been

20 completed.

21 So I don't understand if Tambs is quoted correctly

22 how he could have said this.

23 Q Because, if anything, was clear it is that in

24 I July of 1985 there was no airstrip?

25 A There was no airstrip and I can't even conceive of

UMPiassra^

466

ictimi^

1 anybody in the RIG asking him to persuade the Government to

2 allow contra supply pilots to land there. It was still a

3 concept, it was an idea which came about as a result of

4 all these problems we were having with the resistance

5 people^^^^^^^^^^^H and that was some time after

6 July, August or so when it really reached a heightened

7 point.

8 And so if this tracks with the rest of what

9 Tambs is saying here, he is obviously under a mis-

10 i"^pression or he is not being quoted correctly. But I

11 want to clarify that because it gives che impression --

12 he gives the impression that there was some sort of — that

13 he was instructed to go through with some sort of an

14 arrangement.

15 Well, that is not so.

16 Q Let me ask you this — I understand from reading

17 your Tower testimony that it was your estimate, if I have

18 got the right person's testimony, that the amount of money

19 put into the construction of the air field was about a

20 quarter of a million dollars.

21 A That is what Quintero told me.

22 Q And that an additional $50,000 had to do with the

23 purchase of the —

24 A I don't know what the arrangement was. I suppose

25 only Colonel North or Mr. Olmstead can answer that. It was

ii^f.1 h^mm

467

IMftSSIFIEe^

either a purchase arrangement with some sort of a

baljoon note at the end of a year or two year period, or it

was a lease purchase arrangement. I know that I heard

the figure $50,000 a year is what the lease for a year was

going to cost, the lease or the purchase or whatever that

agreement was, the occupancy of that property for a year

was $50,000.

Quintero told me, and of course he could have
exaggeaated or it could have been a guess on his part, that
the cost of leveling that site and the little bit of
construction that they did on sort of a shack there, which
was never finished either, was $250,000, which I felt was.
exorbitant.

Admittedly this place was very isolated, it was
at least 20 miles to the nearest road of any kind, and the
graders and the tractor — the bull dozer had to be brought
in through these canyons and I guess the cost of these things
is somewhere around three or $400 a day, but it still
se«med to me that $250,000 was a lot of money.

But I had nothing to say about it. It was there —
Q That is what I wanted to ask you. This was a
substantial investmeat. into a capital asset for the contras
at a time when they didn't have a whole lot of money. Where
did you understand —

A Oh, I don't know that^ ^ M^r knew anything

TiMMffiffl

468

ORBftSSmT

about the money. I didn't know if they had millions or
billions .

Q Did you have any understanding about where the
money was coming from to pay the lease and to construct the
air field?

A No.

Q None?

A None. The first time I heard about that
there was even an event it was much later, when the name
Udall Corporation came up.

Q By "much later", not to rush ahead —

A March of 1986.

Q And how did it come up in March of 1986?

A During a meeting between|H|HHGeneral Secord and
Mr. Quintero here in Washington.

Q And this was around the time of the photo session?

Q Did ^^^^^^^H meetl

A Oh, yes, and me.

Q My next question --

A Our wives -- it was social.

Q But did they have a non-social — did they have a
business meeting?

A No.

Q Was there any discussion of the air field between

The afternoon of the photo session.

Did f^^

jllilfillCJCl£inL>.

469

uscassfiffT

the two of them?

A No.

Q When the name Udall came up in the course of the
meeting which occurred among Secord, yourself and
was there anyone else at that meeting?

A No. I went along
|^^H| and when he sat down he started to -- he took charge
of the meeting.

Q We are talking about]

A You are right, yes. Quintero, Secord, |
myself were in the room at that time.

Q Right.

A "

sat down and he told General Secord, this
is what I want from you for the purpose of protecting the point
west site, the air strip. And he went through and ** said
that the civil guard would have access to the property,
that It would be used as a training site, so forth and so on,
and that is when I heard the name Udall Corporation. He
wanted a letter from Secord to that effect.

470

UNSbJtSSffUlET

Q Was the letter coming from Udall Corporation?

A I don't recall that being discussed. It was
just that to^^^^^^^^^^^^Bthis person Secord was going to
get a letter from whoever it was that had control of that
property and that is when I first heard the name Udall
Corporation or Udall Research Corporation.

Q As being --

A As being the people who had title to this
property.

Q As of this time, meaning March of 1986, during
the meeting, who did you understand Secord to be? What
role did you understand him to have?

A That he was -- first of all, I knew he was a
general. That he was somehow responsible for the private
benefactors' activities.

mCUlSSIEIHL

471

msg^T

Q I asked you who you understood Secord was --

A A general, that he was sort of responsible for
the private benefactors' activities.

0 Oid you know that he was involved with Colonel
North?

A Oh, yes, because Colonel Nor«-h told
that morning that he wanted him to meet with General
Secord that afternoon ^^^^^^

land then sort of to our
surprise, Quintero was there. 1 didn't even know that
he was in town.

Q When you said you knew General Secord was involved
with the private benefactors, did you think that was in
connection with supply of the contras?

A It seems to me that that was the first time
that I was sure that General Secord was involved. North
may have mentioned it to me before, but I have no
recollection of it. That was the day that I knew
definitely that he was involved, but before that, he
may have mentioned it, but I have no recollection.

Q But at least, though, by this tirae you didn't
know he was Copp?

guy told me.

Q That was Brian Bruhf?

I • "..1 il:^' w^'v';''^"i

HiiatA liliAidiliLi

472

bp-2

IWeH^FI!^

1
2

A Brian Bruhjjf , right.

Q Did you ever have any conversations with

Jbout the suitability of this location for
the air strip?

A Yes, some time. Again, T can't tell you when.
It was at headquarters. I was up '^n a visit, and we talked
about it. It was certainly before this March when,
met Secord, but I don't remember when. It could have been
anywhere from when they first got the control of the property
of the site from the private owner up until March, so that
would have been some time November, December, up until
March.

But, yes, I had talked to him about it.

Q What do you recall him saying about the
suitability of that location?

A That there was a site, that it would have been
used for refueling, and I think we both agreed that we
couldn't wait for the reinstitution of the funding, so
we could take control of it to be able to re-supply
the people in the south.

Q Do you recall him indicating to you that he
thought it was a terrible place to pick for the air strip?

A I don't know if he knew it or not or if he saw
the photographs that North had. I thought it was suitable
because it was isolated and not easily discovered. The

473

1 downside was it was 16 miles in the Nicaraguan border.

2 Q Right, which --

3 A But you know, you got to take the good with

4 the bad. In Costa Rica, which is a very fertile, populated

5 country, you have very few places where you have that kind

6 of isolation, and we didn't have anything to say about

7 the site being picked.

8 we were left with whatever we had to work with.

9 Q You had indicated that in the fall of 1985

10 that during a trip that you had to Washington you had

11 spoken to^m^Habout the strip?

12 A Fall or that period of November — mid November

13 to mid February, let's put it that way. Some time in

14 that period.

15 Q Is that conversation the conversation that you

16 just related to me where you talked about the suitability

17 of the site — is that the same conversation or is it

18 two conversations?

19 A Yes. I can't recall that we actually talked

20 about suitability. I just don't remember him saying

21 anything bad about it. I am left with the impression that,

22 yes, we will as soon as the Congress votes the money,

23 we will get into business, get on an air operations

24 activity. But there was only one conversation with him

25 at headquarters about it that I recall.

1IM04.AMU;IHU

474

IflKBISBBEffT

1
2
3

Q And it was some time, November to February?

A Some time in that 3 to 4-month period.

Q And just sort of the last thing, this photo
opportunity with the President^^^^^^H which I think
in other testimony you indicated took place around
the 19th of March —

A I think it was St. Joseph's Day.

Q Was there any discussion that you recall
in front of ^^^^^^^^H about the strip?

A I beg your pardon?

0 You had indicated that!
present with^^^^^^H yourselves and your wives and it .
was a social occasion. Do you recall any discussion about
it then?

A No. During that visit the times that I recall
I^^H was present with m^^| and me was immediately after
we came out of the oval office. ^^^^H was in the
secretarial office where the secretaries are for Admiral
Poindexter,^^^^^^B had brought up some picture books
and he inscribed them and gave one to
one to North and he had two others; one, of course,
that he had presented to the President, and one for
Poindexter.

And, we chatted there for 5, 10 minutes, but
there was nothing during that conversation about the

IliSfLACCJIUa.

475

UWB^REffT

air strip. Subsequent to that, we had dinner in Georgetown
with our wives and I don't recall that he said anything
at all about that. Most of the conversation would have
dealt with|^^^|^|^^^HBs^^^^^^°"' ^^^ political
situation, not the air strip.

I am reminded about the Poindexter meeting. Again
not a single word during the meeting in which North,
Poindexter and I were present ^^^^^^^| was there any
reference at all to the air stri

Q You had indicated earlier that in June of
19 86, in or around June of 1986 there came a time when
the plane had to make an emergency landing, and it became
stuck in the nud.

Did you have any role in that incident?
Obviously not the incident of getting it stuck, but in
getting it out?

A Yea.

Q What did you do?

A Well, the first thing, Quintero came into town,
and met with him in hi* hotel room, and he said, "I have
been told that I shouldn't tell you this, but I am going
to tell you this. A plane that was to make a delivery had

iUiiru£Au;u:R.

476

HmSSIFI!^

problems and had to make an emergency landing, and then
landed at the air strip, and I think that was probably the
worst moment that I experienced in two and a half years

because we had just completed assuring the
President of Costa Rica that the air strip was not being
used; that it was never going to be used; that we were
going to close it down and it became a park or whatever."

Q This was a new President?

A Yes, the new president. Arias, J

Here Quintero
says the plane is there and it is stuck in the mud. I
got back to the ambassador immediately, and told him
what was told to me, and he reacted the sane way I did,
and either he or I put in a secure telephone call to
North and explained what had happened, and said, "Look,
do whatever has to be done, but get this damned plane
out of here. "

Q Who said "do whatever has to be done, just
get this plane out of here?"

A Either the ambassador or I, but that was our
position, get the plane out of here. Do whatever has to
be done. He said he would take care of it. He was
supposed to leave the next morning on a trip to Washington
for consultation and delayed my departure until about
11 o'clock in the morning — no I left the office about

JiMTiTO Arupi J I* I M ■ 1 1

477

mamw

1
2

11 o'clock in the morning. I actually left town about
1 o'clock in the afternoon, and I arrived in Washington
about 11 o'clock that night, Baltimore to Washington, and
I found out that night or early the next morning. I can't
recall. I know I made some phone calls to find out what
happened to the aircraft, because they had promised^
they had promised that it would be gotten out of there
as soon as possible. They would bring other aircraft
in with a starter motor and --

Q Who had promised?

A Quintero had promised that he would do whatever
needed to be done, and we had obviously made the phone'
call back to North from the office. Well, it wasn't
out of there for another day or so. Fortunately, it got
out of there and^^^^^^^^^^^^^Hnever found out about
until, of course, the ^BmAt Commission report.

As I understand it, they had to bring in
one or two other aircraft. ;i4ii is from Quintero^ to unload
the first one to lighten the load. Then they had to pull
it out and once they pulled it out, they had to bring in
another plane because they couldn't crank the engines.
As I have described it to others, it was a Larry, Mo and
Curly operation and very typical of the way I thought they
ran both the air deliveries and their business.

Q What was on the plane when it got stuck in

u^}04^A/;«^:lcA.

478

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DHCBl^SWT

the mud?

A I assume lethal equipment. I guess it was

lethal equipment, because they didn't carry anything
el se.

Q That crew didn't?

A That is right.

Q And why did you call North?

A You want to get something done, you call
North. Something like that, absolutely. There was no
question in my mind that North had control or influence
on and had responsibility for this stuff. No question
in my mind at all. Not that he ever told me that I eun-^-
no.

In the evolution of things, if that was a problem,
that was the only person I would call.

Q Because you knew —

A It was his problem.

Q Okay. Did North tell you what he was going
to do to get it out of the mud?

A No. He just said I will do what has to be done.
I will take care of it. I will see what has to be done.

Q Was there anyone else in the Government that
you regarded as like North in having control or having
responsibility for the lethal operation going out of

IMUSS.l£!£a.

479

bp-9

mms

1 A No.

2 0 No:

3 A No.

4 0 There were two guys who worked with North in

5 ■■ '^-^

the saroe suite: Robert EarlEand esay Coy.

6 A I never talked to either of them. In fact,

7 on occasion when they answered the phone I wouldn't speak

8 to theiti, not until I got the — I was trying to get

9 information back to him on the Hasenfus flight. I had

10 received a call from Quintero saying that the plane

11 hadn't returned, andhad it crashed landed in Costa Rica

12 °^ had it landed somewhere in Costa Rica.

13 I said we will, "I'll try and find out." I

14 couldn't find out anything, and the fact that I couldn't

15 find out anything is what I wanted to get back to Quintero

16 and I couldn't do it. I forget now the reason, the

17 telephone lines were down or whatever. So I called

18 North's office and said, "Look, I know you must be

19 concerned about this flight that has not returned to its

20 home base. I want to tell you that there is absolutely

21 no information that it is anywhere^^^^K^n Costa Rica,"

22 and on that occasion North was not available.

23 Earle. answered the phone and I said, "Please

24 pass this message to Colonel North..." that there was

25 no evidence whatiftever that that plane has landec

iiKiALAHiirirB

480

HKStASSflllT

1 We will keep checking.

2 Another hour or so, and Managua announced that

3 it had shot the plane down.

4 Q Just to be sure, this is on the record, I take

5 it the Hasenfus flight was not a flight for which you

6 were to provide information?

7 A That is right. I didn't even know it was coming

8 down. It was not designated for the southern front. It

9 did apparently follow the same route that the other

10 planes which did deliver^ material to the southern front

11 followed, and the Sandinistas — this would have been

12 the seventh flight during the month of September, and they

13 were waiting for it.

14 Q Let me ask you about another thing I know that

15 you have testified sibout, but I want to ask you specific

16 questions, and that is the September 1986 incident when

17 the air strip is about to be exposed.

18 Mr. Wilson. When you frame your questions here

19 you should know that was not covered by the Senate

20 Select Committee.

21 MR. EGGLESTON: In conversations with them,

22 I thought they had covered it. If they have not covered

23 it, then let me do it in a more complete fashion.

24 BY MR. EGGLESTON:

25 Q Could you describe in a complete fashion that

lUiLCU^Eia,

481

bp-ll

WJttWffiF

1
2

3
4
5
6
7
8
9

incident and your involvement in it?

A As I mentioned earlier, the ambassador had

assured President Anas that the air strip was not to be
used, would not be used, that in effect construction had

482

bp-12

IINOiA^^IP

was clear to us that the air strip
was no longer a viable proposition for the original
purpose intended.

However, the cunbassador and ij

were quite adamant
that the site should be protected. First of all, I had
a personal interest in the ecological balance of that
area.

I felt that at least with the civil guard
under control of the place 1
that poachers wouldn't get into this area; that turtle eggs
along the beach near the site would be left unmolested,
and other ecological — it is a very — it is a unique
part of the Central American isthmus, and in that it is
virtually unspoiled land, and part of the agreement, as
I understood, between the private benefactors and the
owner of the property was that it would be maintained as
ecologically protected as possible.

So I was insisting]

keep guards on the property until the
private benefactors were able to work out their situation

with the owner.

Bfflffl^^^^^^

483

iiii»s$iniSET

^^^H The ambassador talked^^^^^^^^^^^^^Habout
putting guardsm^l^^^^^^^Hon the property to avoid
the possibility of having drug traffickers use that
site, and this was a continuing concern during the period
of June, July and August.

In late August, |

^^^^^^^^^^^^^^^^^^t he
President had decided to announce, to call a press
conference and announce that the actual purpose or the
original intended purpose of the site

THE WITNESS: So I called Colonel North at home.
Again, it was his problem, and I complained to Colonel

llAUtUCQJDTQ.-

484

bp-14

1
2
3

IIMMW!ffT

North what I had heard and he said, "All right, I wi?]
take care of it. I will gat hold cf Elliott and

Shortlv thereafter, jjt/M called me and said

^^ c_

I just talked to Ollie and we had ~~4H said that he
and Elliott--that he, Elliott and Ollie had all discussed
this and they thought that the best way to handle this
situation was to have the ambassador call President Arias
and put the lid on this press conference.

I then — and I called^^^Hback and told
him that, and then I got a call from the ambassador,
who was in Greensboro, Greenville, something — South
CArolina or North Carolina, where he was giving a speech,
and he said that he had contacted Arias and that he had
persuaded Arias not to hold the press conference.

Subsequent to that, the Tower Commission and
so forth, there had been allegations of $80 million. My
impression is now on reflex, is that the ambassador said
that he persuaded the President on the basis that this was
an act of bad faith; that we had fulfilled our part of
the bargain in that the air strip was not being used, would
not be used, and he didn't see the reason why it was

llMriAS£l£lfIl-

485

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necessary to go to the press and so forth

BY MR. EGGLESTON:

Q You have made a few references to the Tower
Conmission. You obviously have read parts of it, probably
the parts that deal with your part of the world. Let
me ask you, there have been some claims that Colonel
North, himself, called President Arias.

A Not so. Never heard that. He didn't know
President Arias except by name. He had never met with
him. How would President Arias know who Colonel North
was?

Q So you have no knowledge that he ever called him,
and your opinion based on your knowledge of the Costa
Rican situation is that it is unlikely any such call took
place?

A I am certain it didn't take place. The only
two people that could have called President Arias was
either Assistant Secretary Elliott Abrains or the ambassador
to deal with this particular question.

would have been clearly and properly a matter for

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5,2

the eunbassador to deal with or Assistant Secretary Abrams.

Q Do you know whether there were any efforts
after there was this announcement that the air strip
was going to be exposed? Do you know whether there were
any efforts to get rid of all traces of Udall; whether
there was any effort to clean up the si*-uation, to make
sure that there was no --

A Well, you know — I don't know if this was a
matter of conversation or — it seems to me that t^HffB (
were left with a problem in how to deal with the American
owner of the property, Hamilton. And, I am sure I talked
to the ambassador about it. I don't recall talking to'
North about it. But how do you deal with a thing where
you have got this piece of property and they have a
contract and how do you get out of it and that sort of
thing?

Q By this time, does it still have the storage
tanks on it?

A There were no storage tanks. There were some
fuel drums, 55-gallon fuel drums.

Q That is what I meant. I was referring to the
fuel drums.

A Once the thing had been essentially abandoned
that became civil guard property in terms of whatever was
left there in terms of fire extinguishers and things like

UMTi&J^lClFJl^

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that

Q So you think that that was gone by then?

A ^^^^^^^^^H It could still be there for all
I know , ,

Q I know that you have been shown others of these
messages before. I want to show you some of these. I euti
sure that they are the bane of your existence by now,
and I am sure that you have been asked about some of
these specific cables.

I am going to identify them not by having the
court reporter mark them, but by giving the name and date
at the top of them so it is clear what we are talking about.

■ u)

3/3/86,^^^H If you could just take a look at this one.

A The Tower Commission investigators showed me
this one. It has all the earmarks — this is my sign-off--

MR. EGGLESTON: By this, he is referring to
the Capital D, Capital V.

BY MR. EGGLESTON:

Q What does D.V. stand for?

A It is latin for Dominus Vobiscum, the Lord
be with you. That is what Colonel North used to answer.

Q How did Colonel North in his messages --

UMPI ACCIflTJI

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how did he abbreviate that?

A He didn't. He used another thing, which I
never knew what it meant-- B.T.

Q You didn't know what B.T. meant?

A No. Now, obviously as you read it through,
I recognize that I wrote thi3, but the only thing is I
do not remember at all ever writing this first line, or
the second line, as a matter of fact.

Q By lines, he is referring to the first and
second sentences.

A On February 26 a Maule — the first or second
sentence. I don't recall having written this. The fapt
that this plane Ceune in and I described this in my testimony
to the Senate, this plane came in to ^^^^^H airport as
a result of an arrangement between Quintero and

As a test run of this Maule'

this had come as an outgrowth of
a conversation that I had with Quintero about the possible
use of this Maule, which he had told me they had up there,
to ijnmediately evacuate people from inside Nicaragua

as well as to take up the leader of the
southern front inside to meet with his troops, to see if

UKlTlUCiiUIU'ii-.

489

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it is possible this Maule could be used for that, because
it is a short take-off or landing aircraft, and so
this was the first attempt -- this was a sort of a --
this was an attempt to see if the plane could actually
fly without problems!

Q Whose Maule was it?

A Private benefactors. When the thing landed

and

the authorities there, proper, requestedlthese people and
the pilot — it was both pilots. They found that the
pilot's license was expired, that they didn't have
insurance on the plane. They didn't have a flight
plan. It was another Larry, Moe and Curly operation.

They said there is nothing we can do here for you
to regularize your situation, and the authorities ordered
the P^^^s^ll^^^^^^B At^^^^^^H the
properly called in the DEA. It says they suspected
the pilots might be ours and they asked the DE.^ to check,
and that is how the DEA asked me, and that is how I found
out for the first time that the plane was even in the
country.

Everybody was satisfied that these guys were
not drug runners or anything like that, and they let
them go finally.

Q Did you have any role in getting them to let

490

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then go finally.

Q Did you have any role in getting them to let
them go, getting the authorities to let them go?

A I told the DEA — I said satisfy yourselves,
make sure you are absolutely sure that these people are
not narcotics tr-ffickers, and they did, and they said,
"Okay, then you don't have any hold on them." They said,

"No." 1 said, "Tell the authorities that and let them

work out their problem on the insurance.

I told Qulntero they better get down there to
file whatever papers they had with the FAA so these people
could get the plane released. They were hanging around
and finally they got into the plane and took off and flew
it back. That was the end of my problem.

Q You mean they didn't do emy of these things.
They jumped in the plane and left?

A Yes. Never to return again, because, of course,
the tail number is burned.

0 For what reason are you involved in helping
this plane get released? Row did you get involved?

A DEA called me and said is this your airplane?

Q So your only role in this was to tell DEA that
it was not your airplane?

A That is right. Once I heard it was a Maule, I
knew exactly what plane it was.

llMPimiflfiJ_

491

Q You knew it was a private benefactor?

A It had to be. Do you know how many Maules
there are in Latin America? Perhaps 5 or 6. It is QN
unusual airplane, a fabric-covered single engine^***** ''^
aircraft with oversized wings, and it doesn't carry
more than zbout a thousand pounds because of its-- because
it simply doesn't have the capacity, so it isn't a plane
that you would use for hauling goods.

You use it for airplanes, that sort of thing.

Q Carrying people?

A Carrying people, right.

Q But you didn't help get the plane released
other than to tell DEA that it was not your plane?

A As long as they didn't have anything on that
plane or on those people to police, so inform the authorities
at

They had no problem coming to me and asking me
if we knew anything about it, and I had no problem
telling them that I suspected that they were probably
friends of the contras and that if they didn't have a
problem with it, so inform them and let these guys handle
the problem on their own.

Q Let me show you what has Copp: 3/24/86^^^^B
at che top. This is not from you. There is a reference

492

KNKHSSffiBr

bp-2 2

1 to a ^^1 in it, which leads me to conclude that you might

2 have some knowledge about the events. I want to ask you

3 about the underlying events. It appears to be from Secord,

4 at that time known to you as Copp?

5 A While I did not know of Copp and had only met

6 Seccrd once, that is not to say he did not know of me.

7 I don't know what North or Quintero told him. Ralph,

8 which is Quintero, should have held discussions withB

9 by now with regard to Negro Chamnoro's troops. Let's

10 start — let's get the record straight right there.

11 I don't know anything about the L-lOO at

12 ^^^^^^^H I don't know who th

is that they are

13 referring to here, but I assume it is the same ^^| here

14 which is obviously me. But I could in no way do anything

15 to secure and insure he does all possible to get the

16 load released f roro^^^^^^H That is at |

17 Q You could call

18 A That is right, but I wouldn't have done it,

19 and didn't do it, and I think it was very presumptious

20 on their part to think that I would do it — on their part

21 I an talking about Copp, Secord and Ollie.

22 Q Do you recall the incident that this text is

23 talking about taking you out of it? I am not asking you

24 to ratify your participation in it, but do you recall that

25 there came a time when there was an L-lOO coming down

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bp-2 3

iin8insaaii:T

that was going to pick up supplies?

A No, I was expecting a delivery, an L-lOO
flight. I didn't know where the supplies were coming
from except °^^ fl^^HUH Whether they were supplies
outi

or supplies out of Tirabu/ktu, I didn't

know.

Q What did you expect to be on the flight?

A Lethal supplies.

Q And was this a flight that was going to fly out
and drop into Nicaragua?

A That is correct, but where it gets the supplies
from, I don't know.

Q It was going to do this without stopping at
Point West?

A Point West was never considered as a stop at
any time because Point West wasn't finished. It never
was finished. Just as an aside here, I find it remarkable
that so much attention has been put on Point West when
in fact all it is or ever was, was a leveled piece of
ground which was never suitable for the landing of a
large aircraft.

It never was completed. In fact, you might
say here are these crazy gringos leveling off this land,
and it is unsuitable for anything. I don't understand
where there is even a suggestion of some sort of wrongful

l!MPlll»£iorn

494

b-24

tlNGilA^B^

activity, when in fact no Nicaraguan ever stepped on that,
no equipment with the exception of that one emergency
landing, and that could have been a corn field. That
place was never used, although it was intended to be used.
The L-lOO flight, I asked headquarters in cable traffic
for flight path, hostile risk of forces information, for
radar coverage, and headquarters sent all of this information
down which I then passed along to Quintero, who gave it
to the pilots of the L-100.

There was only one flight of the L-100. There
were several requests because there were a number of
aborts or that they couldn't get the plane off the ground
or the plane had to turn around or whatever, but there was
only one actual delivery by a L-100, that I recall, and
that was with information provided by headquarters in
response to my request, all done openly.

That is the only one. Now as far as all the
rest of this stuff, I cannot comment on it because I
don ' t know .

Q Did you know that Rob Owen had any involvement
with the L-100?

A I did not know that until I read it in the
newspaper that somehow or other he took a flight or
something or he was involved in something with the L-100.
I only knew Rob Owen to be a collector of information as

IIMPLA^^EIEH.

495

bp-25

imssanT

a provider of information when he cameJ

did not know he had anything to do with that L-100.

Q And the statement in here that Copp--suggesting
that North, that he callflH if that is a reference to
you, he -- North -- never called you and asked you to get
the load released f rom |

A That is correct. He never called me, and it
is certainly presumptious on the part of the writer,
Secord, Copp, to think that I will have or could have done
anything about that.

Q Did you ever call^H^^HH^H and ask that
material, military supplies, be released from locations

for transportation down to the south?

August, I went ^^^^^^^^^^^Hand I

[and asked if he could ask the FDN to consider their
brothers in arms in the south and provide them with some
assistance.

Q How did ^^^^H communicate to you?
A Personally in Washington and I was supposed to
and I diverted Washington to Iliami to
back to Miami back]
Q Did you talk tc
A Yes.
Q He said, "I will pass it along." He didn't

promise anything, and I didn't expect anything.

496

iM^iasi^

bp-26 UTlUCnVVirlKi'V g2

1 0 Do you know what happened?

2 A We didn't get anything.

3 Q Is there any cable traffic reflecting this?

4 A 1 don't think so.
5
6
7
8
9

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

yuciiSSlFM..

497

UNtume^

Q So, Other than that occasion, you never called
or coiiununicated with|
A No.

Let me make the point whyfl^^H asked me to qo

^: ^^^

down is because I had told^^^^f what an absolutely
desparate situation the southern forces were in. They were
being decimated during that period and they had nothing,
just nothing.

Q Had they started an offensive at that time?

A No offensive. They had not had an offensive
since 1983. If anything, they were running. They couldn't
even cover their own retreat operations, because they
didn't have the material to do it with.

So, it was -- >»

Q So, It was after you explained ^<^^^^H ^^^
situation in the south that he suggested that you go talk to

A And see if the FDN, through their own channels,
with their own means, with their own aircraft, could somehow
deliver some equipment to the people in the south.

Q Let me return to this L-lOO for a moment.

Do you know whether this L-lOO had anything to
do with NHAO? Whether it had come down with —

A Now, I know from reading the press that it did,
but I did not know at that time.

iiMoi AQQinrn

498

uiiHir

Q You did not know?
A No.

BY MR. GIZA:
Q Can I ask you — you talk about this insurance

. c

department; H^H speaks to you personally after you have
spoken with H^H telling him the serious situation with
the southern front.

A Yes. ^

Q Couldn't^^^fB have picked up the secure phone
ca 1 1 ed ^^^^^^^^^^B himse 1 f ?

A Yes, sure.

Q But did you sense that it was his view that
coming from you personally it would have had, you know, a
larger impression there with f^^Hpicking up the phone?

A Probably.

Q Or was it he didn't want any communications over
the air waves?

A Oh, no. No.

Q Via message traffic?

A My sense was^^Hf^^^P and I very
close friends, have been for years, and I can say — I could
probably be more — I could explain.

In explaining their plight in the south I could
be more precise in the details of what their condition
was, and I presume that that is what it was. We didn't

iiKioi Accincn

499

UNtttS^iaET

discuss it. He didn't say, "Now, you do it, because

I won't — " — no, no. It was just, "On your way back,

why don't you stop off ^^^^^^^^^^^H" and I did.

stayed overnight, left there the next morning and went back

to Miami and

BY MR, EGGLESTON:

Q This cable is from Copp to North three days after.

A Three days after what?

Q Three days after the prior cable which was on
March 24. This is a cable dated 3-27-86, ^HB at the top.
Could you take a look at that one?

A This is the story of our life here.
Well, go ahead.

Q Well, this cable also suggests that you were
involved in — I think the last sentence says that you said
the deal had been set up a long time ago, and there is a
sentence before that says that you — I shouldn't quote it,
because — continues to express surprise.

A I will express surprise right now.

Q The surprise language indicates he was in recent
communication with you or someone who was.

A Yes.

Q I take it it is your testimony that whatever is
in this cable that suggests you had involvement in this
is just false?

iiNcussra

500

\m^s^

A Let's take it point by point.

I don't know anything about the first part of
the cable.

Q Right.

A Let's get down to where it says "Ramano said FDN
totally unaware of any agreement to send anything to
Blackie's troops. FDN totally unaware of any agreement --"
I don't know of any agreement except the fact that the FDN wa
certainly aware of the plight of the people, of Blackie's
troops in the south.

If Blackie made some sort of a- representation
that there was an agreement, I don't know about it.

Okay?

So, this — but the fact is that FDN never wanted
to share its — whatever it had obtained or it had in its
supplies with the people in the south. There were political
reasons as well as normal jealousies.

The whole mess is the result of incompetence
on the CIA's part or worse. Well, that is his comment,
not mine. ^

m^l continues to express surprise — I don't know
what he means by that other than that I would have
expected the people in the north to help the people in the
south.

Meanwhile, my ability to sell this type MSN —

iiiini Aooirirn

501

UNtUt^Slfe

1
2

I don't know what that means — continues to erode because
of lack of professionalism.

MR. WILSON: "Mission"?
THE WITNESS: Lack of professionalism.
BY MR. EGGLESTON:
Q Just editorial comment.

A I agree with that.

"This can not be totally attributable to recent
comments sinceH^Hclaims deal was put together a long time
ago — " Now, I think I know what it means.

This is now March of 1986. The troops in the
south, and I believe it was early November —
Q Early November 1985.

A 1985. ^^^|B and a couple other southern front
commanders met in the field in southern Nicaragua with some

commanders |^^^^^^^^^^^^^^^^^^^HH|^^K and
they wrote an agreement in the field that they would
cooperate with each other, that they would share information
and whatever supplies they could.

That was sort of an expeditious agreement that
was made in the field, and it was the first time that the
commanders in the south had actually had a meeting with
the commanders from the FDN who were also in the upper part
of the southern area of operations.

In December, late December, early January, several

iiuoi Aooinrn

502

WitlMlglr

of the commanders came out of southern Nicaragua and told
you about this agreement.

They then sat down and worked out a political
agreement with Negro Chamorro — these were primarly
dissident commanders of Eden Pastora who had come out of
southern Nicaragua — and they sat down and wrote out what
they thought was the most substantive agreemept that had been
reached yet, political agreement that had been
reached yet, and it was an outgrowth of the basis of this
agreement that they had written in the field with the FDN
in the north.

Prior to that, Pastora had not allowed any of
his commanders to have any contact whatsoever with the ,
northern commanders.

When they came out, they confronted Pastora, and
they said, "Either you give us supplies or we are going to
join up with the UNO structure," which included the FDN.

Even though Pastora tried to persuade them from
doing it, they said, "Maybe they can get us supplies," and
so that was when they sat down.

503

:hey, in fact, sat down and hammered out an agreement
with the political elements of the UNC^^^^^^^^^^^^f and
I assume that that is what is referred to here as "since
the deal was put together a long time ago."

Q But the suggestion in here in these last two
sentences that he has in conununication w'th you -- and
your expressing surprise that these weapons have not yet
arrived is indeed an improper suggestion.

A That is certainly an improper suggestion.

I had no communication whatever with — whether
he got that from Quintero^ or he got involved from — or"
that came out of a conversation he had with North, I don't
know, but it certainly didn't come from the conversation
with me.

Q Are you certain that you got your KL-4 3 from
Quintero|?

A I am pretty certain.

Q Could you have gotten it from Rob Owen?

A I don't think so. Did Owen say that?

Q Hell, I never tell one person what another
person says.

A Hell, I say I am quite certain.

Q All right.

A I just don't remember.

iiMoi Aocicicn

504

UNR

Wi \wu

UUII ILU

1
2

Now that you raised a doubt in my mind --

Q If you got It from Owen, it might have sort of
changed your view about just what exactly Owen had to do
with this whole operation that you --

A No, not that he had -- not that he was North's
representative or North's leg man that is working with
North, no, but I have to say I am pretty certain I got it
from Quinterol.

Q Did you ever talk to North about the reason that
these private individuals, not just the KL-43, which, as
I said before, is, to my understanding, not a secret —

A Wait a minute. I never knew that anybody had
KL-43S except Quintero|, North, and me.

Q Quinterof is not a government official, though.

A Yes, well, but he was working with North, so
I assume that that — whatever clearances. North got him
clearances.

Q But you knew that Quinterof was involved. You
knew he was involved in constructing Point West.

A And that he was involved at]

Q With the private benefactors.

A Sure, with the private benefactors.

Q And did you ever talk to North about — I assume
you knew you had this government cassette that was highly
secret.

uNcussra

505

UNtmSPPET

Did it cause you any concern that Quintero#,
working for this rag-tag group of suppliers or working
with them, had access to and was using this, what
I understand to be a fairly secret and sensitive cassette?

A Well, you know, you have to put it in the context
of Oliver North. This is a National Security Council
deputy director, political military affairs. I mean, you
know, to a GS-15^^^^^H^H this guy talks to God, all
right?

And he meets at a level, and, obviously, I knew
where he worked in the Executive Office Building. He has
got tremendous access -- which is to say, he couldn't simply
pick up the phone and say, "I want clearance for Rafael
Quintero(f" or for John Jones or Joe Doe, you know?

He is outside of my area of experience, or this
was outside of my area of experience. In the agency we
certainly wouldn't have done it, but then this is the NSC
Maybe they have got special things that they do.
Q Okay .

A It all goes to the fount of this. I mean. North
IS not some ordinary American citizen that suddenly is
in a position -- in this position. This is a man who had
dealings with obviously the Director of CIA. He was at the
conference in August of ^'^^^^////j/KM ^ ^^^ ^^"' there.

You know, he deals with my division chief. I am

iiMOi Aooinrn

506

BimsiFKr

2
3

going to question him as to how come this guy that he
says is totally trustworthy and so forth.

I certainly questioned him, but he gave me the
bona fides. That is fine with me.

Q But, on the other hand, you hear, you see
Colonel North obviously involved with lethal re-supply of
the contra s.

A Which I understood he was permitted to do.

BNCUSSm

507

• 2a

mas 1 1

UnyCflvvfrnW

Q In a very active way. He has KL-43s which you
know he has given to Rafael Quintero. When planes get
stuck in the mud you call Colonel North to get them out.
A Right. ^

Did you ever tell ^^|^^^^H that you had a KL-43?

I told my division chief that I did.

When?

April of '86.

Who did you tell?

And when was — where were you when you told hj

that?

A ^^^^^^^^^^^B In my

Q Did you show it to him?

A Sitting right behind my desk and I pointed to it.
Was in a bag with, TRW bag, I said that is the communications
equipment I got from 01 lie.

Q What did he say to you?

A He looked at it and he said, okay, didn't say
anything, he said — I had raised the whole question that
I felt a little uncomfortable in dealing with the passing
of information to the private benefactors that even though
I recognize that it was permissible under the agreement
between the Agency and the Congress to pass intelligence,
I still felt a little uncomfortable in doing it. I wondered

iiKini Acoiticn

508

UNWSiii&ET

m2 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

if there wasn't a better way to do it, and what he
responded was when got back to Washington he was going to
check on the law and check, on this whole situation, and he
would get back to me. And in May, we had^^^^Bconf erence

[and he raisad the problem, and he said -- he
raised it in Tront of^^^^H he raised it in front of

^^ and
he said ^^^^1 got a problem, and we got to fix it.

By that time I had come up with an idea of how to do
it.

Q This is by putting it through the —
A By putting a Nicaraguan communicator

that we had trained, with equipment
that we supplied to him, and then he could do an inter-
face, direct interface with the private benefactors out of

using our connnunications equipment and our

bunds
one-time code tnrt« , communicate with the communications

center^^^^^^^^^|to the people inside Nicaragua, and back

the same way to the private benefactors.

And I guess you know the story of what happened after

that.

Yes.

But —

But it is your testimony that you specifically
U
told m^^^^H when you met with him in April of '86 that

iiKioi Acojnrn

509

l)Nft*SSfflfflET

m3 1

you had a KL-4 3?

A In my office.

Q And that it was to communicate with Ollie.

A That is correct.

Q Did you tell him —

A The private benefactors.

Q Sorry.

A With the private benefactors.

Q You told him it was so that you could communicate
with the private benefactors?

A That is correct.

Q Did you tell him you had gotten it from Ollie?

A I believe I did.

Q Did you tell him you had actually received it from
Rafael Quintero?

A No, I don't think I ever mentioned Quintero 's
neuae to him.

Q But it was clear from what you said to him that
the private benefactors also had a KL-43.

A Oh, sure. You know that is who I was communicating
with and that is what the problem was that we wanted to fix.
There is a point I want to make here —

Q Sure.

A -- and that is I also told him I kept the
ambassador fully informed in response to his question, and

iiiini Aoninrn

510

m4 1

UNOttSSffiRET

that seemed to satisfy him. As long as you keep the
Axnbassador fully informed, you know, I don't see that there
IS a problem -- fully informed in the sense that I was
passing information, that we had a flight coming, whatever.
And also that I had requested the flight path and hostile
forces information from headquarters and had relayed that
to the benefactors for the purpose of the flight.

Furthermore, after the L-lOO flight and all the
subsequent flights all the way through September, I sent
intelligence reports, disseminated what we call intel
dissends, disseminated intelligence reports though the
intel community in CIA channels concerning delivery of this
material and as I pointed out in my testimony to the
Senate, I think it is evident here when the problem was
not fixed and when North said he had these supplies to
send down in September, I agreed to pass the information
on the drop zones and so forth, and as soon as that first
intel report was received in Washington, they knew that
there was — that the communications link had been
established again.

They knew it as of the first intel report that they
received and nobody from Washington caune down and said,
"Stop what you are doing, ^^H"

Let me show you a memo that has

4-12-86

and

'at the top.

UNCI ASIslFIFR

511

UttClA^i^T

Do you remember this one?

A Yes. It was referred in the Tower Commission
report and I wrote up notes for counsel. I would like
to quote because it was a very spontaneous when I wrote this
and I think it reflects my thinking now and at the time.

Q All right.

A So the portion of the April 12 message which
mentioning the creation of the 2000 man force, end quote,
reflects a poor choice of words on my part and needs
explanation. First the message should be understood in
context of an informal communication and as such was
written in an offhanded style. It was obviously not meant
to be anything more than a simple direct expression of an
ideal, perhaps of an ideal perhaps unattainable situation.

Secondly, in a more appropriate choice of wording
I might have cited the expectation of the Southern Front
commanders whose views I was essentially representing as
my own, and the exhortation that all USG and
Nicaraguan resistance elements pull together in support
of a southern front, including the NSC.

For the record, the message represented a bit of
brainstorming and I subsequently wrote an identical cable
to Headquarters in a staff channel message of the existence
of this panel was made in the office of the Inspector
General — and hopefully has been found.

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So to summarize I would like that understood in
the context of being really a reflection of what the
southern commanders wanted, and this came as a result of
our contacts with them.

Q The difficulty is that you creating a 2500 man
force is the one thing I take it which you knew you could not
do.

A Of course I couldn't do, on April 12 although
we had expected the vote I guess to be a favorable one
sometime in the spring this was looking, this was
something that we were looking down the road at.

Q Right.

A As it turns out it was what, four months later,
3 or 4 months later, June -- no, two months later, that
the vote finally took place but it wasn't until October
24, '86 thatJ^^^^^Hactually got a scent.

Q The portion of this memo right before the
section that you talked about though similarly suggests
"our plans during the next 2 to 3 weeks include", and it
lists the various drops, NHAO drops —

A Please put it in the context of the southern
commanders. Please put it in that context.

Q But is it you and the iMukyurii commanders or
is it 3ust the southern commanders?

A That is so hard to distinguish. Obviously

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reflect their concerns. I was their advocate, their
spokesman. I was the person who was reporting on their
problems to the communities.

Our intelligence reports all reflect that
repeatedly. The condition that they were in, what they ~
were suffering. I mean that was my responsibility.

Q Alleviating their condition, I take it?

A No, reporting it.

Q Right.

A Sympathizing with them, explaining to whoever
had to know about these things what condition they were
in so in expressing the question — remember we are dealing
with a machine there that is very limited in its function
and so when I said "our" I am representing an aggregate
of ^^^^^^^^^H views, the commanders' views , the southern
political views. I am not trying to be cute with words or
writing for the purpose of the record.

Obviously had I known that this thing was going
to get so much scrutiny there would — it wouldn't have
been done in such a careless way. If you read my intel
reports in fact you will read most of my operational cables
I would say 99 percent of them, you will find they are
very carefully done.

Q I have read an enormous number of them, I think
Hr . Giza has probably read every one.

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MR. GI2A: I read a lot of them.

BY MR. EGGLESTON:
Q And I think that is generally true.
A I was very careful with the wording so I get
trapped by the sort of feimiliar style because after all
I am writing to my buddy, Ollie, and that sort of engenders
a certain sense of —

MR. LEON: Informality?

THE WITNESS: ~ of informality.

MR. GIZA; You also knew these cables were not
going to be subjected to the dissemination that your
cables that were sent to Headquarters would be
subjected to, right?

THE WITNESS: Within the general sense of my
relationship with Ollie, that is correct, and I want to
make a point about that because I am sure that at some
point in our discussions here today, it is going to be
raised.

What about this relationship with North and me?
W« were close friends. We — I saw in him a very dynamic
individual, someone who truly believed as I did, and I do,
that the cause of the people who I was in contact with on
an almost daily basis was a legitimate one, that I saw
in North a person who would not shirk from doing what he
could do to support these people.

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By the same token, I must say in all honesty
that^there were political differences between myself and
land I saw in Ollie North an advocate at

the iftif'^revel so that my views could be more fairly

represented than I thought they were being represented,
than I believed they were being represented by^^^H who I
think had a different agenda.
BY MR. GIZA:

Q What do you think that agenda was?

A A much stronger political role for the FDN , and
that the south led by Alfonso Robel/o was incapable —
or say that that was the moderate social democratic elements
of the resistance were unable to adequately represent the
strong political position that ^^^^Hwan ted them to
represent .

^^^HB on a number of occasions attempted to
manipulate situations -- and don't ask me to pin them down
because I can't — whereby I felt that the southern poli-
tical organization was put at a disadvantage, that I
was being — that my arguments were not being heard with
the weight that I felt that they should be heard, and so
essentially what I did is I enlisted Ollie North by
virtue of our friendship and our relationship to be my
advocate at that level.

Now, my cables to a certain degree if you read

IIMOI Aooinrn

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battled him for a year until he
finally said this is the way it is going to be, and then as
a good soldier I said all right, I accept that. But I
argued forcefully and I enlisted North to ?rgue forcefully
as though he represented himself and not necessarily me
in those councils of policy thi

MR. EGGLESTON: I have seen that show one time
and that was the one I happened to see.

THE WITNESS: Well, let me tell you that that
was one of many points of contention, and in all honesty
it was a very professional difference, never a personal
difference. I have great admiration for ^^^^^^palents and
his abilities. He is a very bright person, forceful person,
a very articulate person, but as a chief of station trying
to accomplish certain things, I felt that we were being --
that we were not getting the kind of understana/that was
necessary so, yes, I did do that. Maybe that is called
political maneuvering, maybe it is called a lot of things,

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but that is essentially one form of my relationship with
Ollie North.

BY MR. LEON:

Q Did you ever act around ^^^^H bacic?

A Oh, no.

0 Did you ever go around ^^^^H back in acting out
North's wishes?

A No , oh , no . Look, on the aspect of North and
what he was doing with the private benefactors and my
participation in passing the information, I was convinced
throughout this period that my superiors in Latin America

Division,

and North were fully aware of the pass'mg

of the information, and that was clearly --

MR. EGGLESTON:
THE WITNESS:

and

Make sure it's

MR. EGGLESTON: North as well?

THE WITNESS: Not my superior, but they knew what
I was doing in terms of passing information back and
forth between the commanders and the private benefactors
as was shown in that meeting in May ^^^^^^^^^H and the
attempt to resolve the problem and the fact that intel
reports in September when the flights resumed again, that
they saw these things coming in and they said nothing.
They allowed it to continue. So what am I as a reasonable

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person supposed to assume? Certainly, I had not -- while
I may not have had specific authorization to do this or to
do that, neither was there a specific instruction not to
do It .

BY MR. EGGLESTON:
Q Let me, show you another one that you have
seen before, ^^^^ 4 - 1 5 - 8 6 , ^^^^HH^HmS" it
Have you seen this one before?
A Yes.

Q Let me just take this one sort of piece by piece.
First, "delivered to^^^^H^Vby 707 yesterday
is a planeload of ordnance for your friends."
Do you know where the 707 came from?
A No, sir.

Q You didn't even know if it came from Europe or
you didn't have any —
A Or the moon .
Q You didn't have any idea.
A No.

Q About half way down it says, "Is there a UNO/HRN
communicator being placed in^^^^^^H" I may have
misunderstood but it was my understanding that this was
sort of the resolution and that you knew by this time
there wasn't any.

A No, no, no, no , ^^^^H cajne down in April and the

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idea of placing a conununicator was my idea that I raised as
a proposed solution in May. Of course there wasn't one
at this time because we had not worked out anything yet.

Q Right.

A But that we would put a communicator up there in

Q Aye.

A I raised that at the meeting in May, on July 12
the cable came down and said hands off.

Q But at this time you knew there was no communicator

A Right, sure, sure we knew that. There was
never any communicator. At some point I assume I sold
Ralph, I don't think I told -- this is from North -- I may
have told North that one possibility is to put a UNO/FARN
is the Negro Chamorro portion of UNO, to put one
Nicaraguan communicator up there, throwing it out as an
idea. But the thing was not — there was no conanunicator
then. I was still handling the passage of information then

When we ventf^HH^P in May I raised the
idea formally in the meeting with flHjB ^|^P ^^^ ^^^
K and that is the chronology of it.

Q Is this a message from North to you?

A That is from North.

Q To you?

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0 Do you remember getting it at the time? I don't
mean do you remember getting it ^^^^^^^^^^ft but --

A Yes, I got the message.

Q Explain to me why he writes, "When and where do
you want this stuff?

A "You" — again it is the commanders.

Q But he is expecting you then to ask the
commanders?

A I could not accept a bullet. I would not accept
a bullet. Where ^^^^^^^^^^1 could I have? I mean, when
he is saying "you", he is referring generically to you
in the south, you the commanders in the south. By the same
token, the commanders inside Nicaragua never had a set
position for more than 48 to 72 hours because of the
Sandinista pressure on them.

So when he comes in, this is shorthand for saying
when do you want — when do the commanders want the stuff
delivered.

Well, at that point I would then see that a
message got into the commanders saying are you prepared to
receive, if you are prepared to receive, then please give
us a location, a drop zone location.

They would then — this was all done by one time
pad, secure communications. Now, often when we did this
we advised them there is a delivery for you, the benefactors

IIMOI AOf'Tirni

521

fmmm

mis 1 wish to deliver for you, can you receive it. They would

2 say no, we are not in a position to receive it and we don't

3 expect to be for maybe three days or so because of the

* particular pressure that they were under militarily, combat

5 that they were under at the time.

6 When they were ready to receive it they would then

7 notify the ccrounication center and say, o)cay, now we

8 can receive it; we will have a location; and they would

9 give us a location, secure for the next 24 to 48 hours.

10 That would be relayed bacK^H^^^^^H and they would aay

11 well, we can't make it in the next 24 to 48 hours, or,

12 yes, we will try and we will let you know.

13 Sometimes they gave us 4 or 5 hours notice

14 meaning that the plane is leaving at such and such a time,

15 and it will be there tonight. Hopefully we will be able

16 to raise the people inside and tell them, light the fi*ee

17 at such and such a time for the drop. Sometimes we would

18 have -- they would tell us after the flight was under way

19 that they had to turn around and go back to base. We

20 would have to notify them. Please understand that^^^
^^^^^H myself, the peopl^^^^^^^^^H the

22 Micaraquan communicators were only a conduit between the

23 commanders and these people. We did not decide when a drop

24 takes place, we had no way to do that. It was up to the

25 people inside to decide when they could receive a drop.

522

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ml6

We could not dictate to them. We did not know what their
situation was.

BY MR. EGGLESTON:
Q I understand, but you have indicated -- actually
before I get into this, let me talk to Dick for a second.

MR. WILSON: Can we take a short break.

MR. EGGLESTON: Sure. Do you want to take a
couple minutes. I don't have that much more to go.

(Short recess.)

MR. EGGLESTON: Back on the record.

BY MR. EGGLESTON:
Q I have seen the cables that you have sent to .
Headquarters and the ceUoles that came back that related
primarily to vector information, weather information,
and things like that.

What I would like to ask you though is did you
provide information to Headquarters that you were in
comnunication with the commanders in the field to inform
them that military supplies were available? Were they
aware of this type of communication that you were having
with Colonel North?

A I don't remember.
Q Okay .

A I don't remember what I said in those cables.
I just don't remember. Just that they were the southern
forces were expecting a resupply flight and requested

523

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^^HW

^ that information.

2 0 That is my recollection that the cables were

3 essentially saying.

^ A That is the best I can do for you.

5 Q If it is not in the cables, it is not anywhere

6 it is, it is not in personal conversations or secure

7 conversations or whatever?

8 A No. Not that I recall.

9 Q Okay. I am almost done. I have a lot of

10 tabs but I am not going to be asking about all of them.

11 A I think when I first talked to anybody about the

12 whole thing was with]

13 Q In April?

14 A Yes, in April. That was just — no, it was just

15 after the L-lOO flight and frankly I was not comfortable

16 with the situation and I wanted to be sure that passing

17 of this kind of information which was according to ray

18 understanding within the parameters of the agreement, that

19 it was okay and that is why I talked to^^^^f who was the

20 Chief-designate for Latin America Division.

21 I Q Do you know whether the time you spoke with

22 ^^^^^Hwas before or after?

23 A You would have to check when I was there,

24 I don't remember. I know it was before May 1st because
25

he took over May 1

iiMoi Aooinrn

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UMBISfflfflffT

MR. GIZA: Right.

MR. EGGLESTON: Do you know when he was there?

MR. GIZA: No, I think he was probably taking
a trip around the region before he took over.

THE WITNESS: Correct. He knew many of the
characters I was dealing with.

MR. GIZA: Sure. He was head of the Task Force
when you were there.

THE WITNESS: Yes, he brought me into it.

Off the record.

(Discussion off the record.)

MR. EGGLESTON: Let's get back on this.

BY MR. EGGLESTON:
Q I only have about two left and we will finish
up. This is one that says at the top "Copp: 4-28-86

I eun not suggesting it is to or from you
or that you have ever seen it before, but there is a
reference to two things I want to know whether you have
any knowledge of .

The first was in handwriting at the bottom, and I

don't know if you recognize the handwriting, it says

need to get codes and — looks like photos — to ^^H

This is at the end of April '86. Do you know
what this is about?

A Codes , I can only assume that I needed the May

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cassette.

Q Right.

And does that say photos?
A Oh, you know what they were? The pictures of
^^^|and us at the White House with the President.
Q Okay.

There is one other thing that I ]ust want to ask
you whether you know what it is about, paragraph 3, that
was in handwriting at the very bottom designated as
paragraph 6, paragraph 3 which is typewritten, Olmsted
still needs to go to Miami to produce radios for|
MR. WILSON: Procure.
MR. EGGLESTON: What did I say?
MR. WILSON: "Produce".
THE WITNESS: No, I have no idea.
BY MR. EGGLESTON:

Just two left, this one says at the top "Copp:
Below that it says "May 02, ^^^1
Can you read paragraph 1 and tell me if
you know about that?

A The indigenous along the Atlantic Coast were the
most neglected of all the southern forces and as I
recall it Quintero wanted to know how they could get --
what would be one way of getting deliveries into these
people, to the Indians along the southern coast. I said

I'^IAI «noiriir-f\

526

UNBBSSBffiT

i20 ^ there are only two ways to do it, one is by boat and the

2 other is by air. By air it was suggested that they could

3 fill weapons into 55 gallon drums, seal there, watertight

4 seal them and then put what he called a Kerelite, it is a

5 chemical and plastic thing that when crushed the chemicals

6 interact and it creates kind of -- cylinder would glow so

7 that when the aircraft kicks these 55 gallon drums out

8 and they are floating in the water along the coast, that

9 the little Kemlite thing would glow and the people in

10 their canoes could come out from the coast and retrieve

11 them, retrieve the 55 gallon drums.

12 Well, that didn't ring like it would be very

13 practical to me because it involved all sorts of

14 coordination and communication between the Indian groups

15 and the private benefactors, and what time and all, and

16 these Indian people were not capable of doing that. So we

17 discarded that. I discarded that as a possibility given

18 my own knowledge of their circumstances.

19 Furthermore, they didn't have radio equipment,

20 they didn't have — they were not trained in the use of

21 radio secure, secure use of radios. So these were, I

22 discarded that.

23 Then he said, well, what if we provide boats?

24 I said —

25 Q These are conversations with Quintero now?

IlilAI ■ ^^»mm,^^

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A With Quintero, yes, he waa asking me based on my
knowledge of what I knew of their condition inside, what
would be practical, what would be impractical in providing
supp>ort to these people because everybody, myself
included, recognized that the Indians are probably the most
effective force that exists along the Atlantic, eastern
part of Nicaragua. They are fighting for their tribal
lands, they are fighting on their own territory, they have
their own language, and they have their own culture which
is something that the Sandinistas have been trying to bring
under the regime's control and thmy have been generally
ineffective in doing so.

Besides that, they can live with a lot less than
the Caucasian Nicaraguan can live with.

So it was proposed that they would buy, that the
privat* benefactors would buy Zodiac — these are rubber
type boats — I think it was in Miami or someplace and
that they would deliver them to, by air to the Atlantic
coast people so they could start running their — runnin g
some sort of supply lln« up and down the Atlantic
coast.

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Iwhat they
really needed at that time was primarily medical supplies
and other things, and that is why they were going to bring
these boats in.

Well, I don't know what happened. They didn't
buy the boats. They didn't get the boats delivered. They
didn't do that or that. There was a lot of promise and no
delivery. As it was with most things. But that is basically
what that means. It was another one of these ideas that
these people and I don't know, some of it evolved from
conversations that I had with Quintero, others I think came
from North or somebody but once we tried it on for size
it just didn't work.

MR. EGGLESTON: Okay, I have —

THE WITNESS: Like the Medevac plane, the
Maul&

MR. EGGLESTON: I have no further questions
that I would ask. I will say something more at the end
when everybody is done. I may want to ask you other
questions, but thank you for putting up with us one more
time.

THE WITNESS: Sure. I aia just sorry I have not
been able to be more explicit on things but obviously
I am trying to recall memories and I have not had access
to any records from Headquarters. My dates are fuzzy. My

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recollection is certainly fuzzier. Then I am trying to
separate what I have read in the paper from what I knew
at the time. Some of it gets a little bit -- remember
another thing, too, please in all this. I know I am not
using it as an excuse, but this whole thing, when you
put it altogether in one package of time probably didn't
represent any more than about 1 percent of all my activity,
Weeks would go by without even a call to North on the
secure line or a message, and then obviously there are
the constant disappointments of promised flights and no
deliveries.

After all we are talking about a period from
approximately late January, 1986 until September 23 or so,
the third week of September 1986, 9 months, 6 of those
flights as I recall them came in one month, September, and
the rest of it was a lot of promises, maybe we can do
this, maybe we can do that, and all the time laboring with
the problem of trying to stay well within the definition
of the amendment and at the same time, putting up with
the terrible strictures of dealing with these
people face to face and not being able to satisfy their
real, real needs.

But my^^^^^^^operations ,|

occupied 99 percent of my time.
So if I am fuzzy on these things, it is because it really

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530

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)24 1 didn't have the focus of my attention.

2 So I apologize for that.

3 MR. EGGLESTON: I don't know who wants to go

5 BY MR. GIZA:

let me say I was out of the room

7 for a half hour and if I ask you a question that you have

8 already responded to, just say that you have already

9 responded to it in this session with Mr. Eggleston, and

10 I apologize.

11 Did you on any occasion ever have any private

12 conversations with Director Casey?

13 A Yes, two.

14 Q Did you describe this previously in the Senate

15 committee?

16 A I sure did.

17 Q Did you ever have occasion to send privacy channel

18 messages to Mr. Casey during your period of time]
19

20 A No, sir.

21 Q When you discussed with me the issue of the

22 southern front and the problem that you had with'

23 j^^^^H and how you went to Oliver North for assistance to

24 push this issue —

25 A Let me say, please don't misunderstand, it wasn't

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UNei«^ii(is^T

a conscious decision. It was just that Ollie offered
an opportunity to have ray views aired so that there would
be as much balance as possible. I didn't plot the thing
out to make sure that Ollie — I didn't say look, I want
you to do this, I want you to do that; it wasn't that. I
would give him my views and I expected him, maybe he did,
maybe he didn't, but I expected him to at least present
those views at the RIG.

Q That is understood. Without getting into this in
a long amount of detail, my basic sense that you are commu-
nicating to us is that you had a view that differed from
the view of your superiors in the Central Intelligence
Agency concerning the activities and operations of the
southern front?

A Not from my superiors, from one superior.

Okay. Did you ever go to your superiors above

conmunicate that view? Did you ever go

ror Clair George?
Not ^^^^^^^^^^VbecauseB^^^^I rea 1 1 y
I handle all the Central American things, but to
sure, on several occasions I expressed my
concerns about what I thought was an imbalance.

Q Were these in personal discussions or were these
in message traffic?

A No, personal discussions.

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2 pin

ommssiFiEF

Q Do you )(now —

A And only to make, to get things back on track.
It was again, this was, please, it was a professional
difference of opinion. It wasn't personal. I didn't go
behind^^^^H back to do it, but I,^H^Hand I had
worked together a long time|^^^^^Bas well as in
Washington, we knew how our style of operation was we
were both Latin America experts; whereas,^^^Hhad a
different perspective and there were times when I just
couldn't make points that I really felt needed to be made

H about it and^^^H

and therefore I would talk to I

would talk to I

■about it.

UNCUSSI

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BY MR. GIZA:
0 One further question. Did you know

A Yes.

C Did you ever have discussions witf
about the general problems of providing assistance to the
contras?

A Only in the context that he was

and that

were the contras effective from the perspective of
Nicaraguans, the civilian populus inside Nicaragua and
my general lament that the cutoff was devastatiing to
the people in the resistance.

Q Did you ever have discussions with him after he
left position^^^^^^^^^^^^^^^^^^^^^^Hand
Special Assistant to the Director of Central Intelligence?

A I never saw him again. I haven't seen him since
he left asl

MR. GIZA: No further questions.

EXAMINATION
BY MS. WESTBY:

Q Is it fair to say then that the reason you got
involved -- why did you get involved in giving vectors?

A Because it was proper for me to do so.

Q And Ollie asked you directly to do that?

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100

A No. It was proper for mc to pass information to
the consnandcrs insid* concerning delivery information.

Q So that was your complete understanding, that
it was proper for you to do so.

A Certainly it was proper for me to do so.

0 And up until you have the conversation with

A I said I was uncomfortable with passing this
information, which was certainly unorthodox in my experience
as a CIA field operations officer so I raised it with him
and he said he would look into it. Then we had the meeting

and I graphically remember the moment when he
said^^^has got a problem and we have got to fix it and he
said that to the assembled^^^^^^|^mand we had to
figure out how to get this communicator up there so he could
interface and I would be clearly relieved of that
responsibility and I don't think that there was ever a
question about the legality of my passing that
information.

I think that where there was concern and there
were certainly events in that cable of July 12 that there was
a political concern, not a legal concern.

In other words ,^|BHwrote in that cable we are
close to the vote, let's not screw up now or words to that
effect by getting too close to the private benefactors and

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yet by saying so we would have been essentially denying the
legitimate need of the resistance to obtain information
from us concerning delivery of material, including
information such as risk of hostile forces and so forth
that would ensure the safe delivery of material in hostile
territory to them.

Q So it was never your impression -- you never said
to yourself well, I know I am doing something wrong --

A Let me make it very clear to you, to this very momen .

I never did anything wrong — ever. Habye I didn't do
everything exactly right, but I never did anything wrong.

Q Okay. This may have been covered in your Senate
testimony, but how did it come about that this started? Did
Ollie ever say to you -- did he say. Buddy, can you do me a
favor? Did he ever put it in the context --

A Remember, the commanders signed an agreement in
January of 1986 whereby they, the former Pastora commanders
agreed to align themselves with the UNO commanders and take
inside with them the Chamorro forces that were or troops

were^^^^^^^^^^^^^^^H They
under the aegis of UNO and as a result of that, they
expected to receive supplies at some point when the
funding was to be resumed.

Now, that was expected to be some time in March
or April. It didn't come about — the vote didn't even come

mini kk^cui^i'T^

sae

UKIMSHiiE'

102

1 about until June. At the same time. North had supplies or

2 the private benefactors had supplies at^^^^^^^B The

3 private benefactors advised me that they had these

4 supplies which they were willing to deliver to the

5 commanders who were inside now under this political

6 umbrella of UNO and they asked "ould you pass this

7 information.

8 I was well aware that we were allowed to

9 pass information on the basis of the agreement that had

10 been reached under the $27 million humanitarian aid and the

11 $3 million communications aid in that agreement that existed

12 between the agency and the House and the Senate, that we

13 were permitted to pass them information or intelligence of

14 an intelligence nature, of a counter-intelligence nature,

15 including information for the safe delivery of supplies.

16 So on the basis of that, I sent the cable off saying

17 that the southern commanders are prepared — will be receiving

18 supplies from the private benefactors, headquarters, can you

19 F^< "■■' ■■ flight path information. At that point had there

20 been anything illegal in the situation, I am sure headquarters

21 would have said no, we can't provide that.

22 They didn't. They provided very detailed informatioii

23 concerning the flight path and the risk involved in a delivery

24 flight.

25 Clearly, I accepted — not deduced, 1 accepted the

537

103

1 fact that this was legitimately passed information and that

2 my activities were legitimate. I hope I am not being

3 argumentative with you.

4 It is just that I have got to get my view out

5 and it hasn't been so far. It has been distorted in the

6 press and with the things -- you asked me if I had talked

7 to -- I haven't talked to Clair George since summer of 1984.

8 MR. EGGLESTON: I didn't ask you that. It must

9 have been at the Senate.

10 THE WITNESS: No. It was the fellow who was here.

11 The press says I got Clair Goerge's tacit approval. It

12 didn't happen and it didn't need to happen because I was

13 functioning within what I felt were permissible -- in a

14 permissible activity.

15 EXAMINATION

16 BY MR. LEON:

17 Q Did you have any knowledge of the contras being

18 ripped off in the construction of the base?

19 A The contras had nothing to do with the base.

20 Q I should say -- the money that was being used

21 to build the base.

22 A I have no information about that.

23 Q You came across no evidence of over-billing for

24 the the services of the construction work --

25 A Ouintero thouaht that ^^^^^^^^^^^^H was

Quintero thought that

538

UNCH^RfffT

104

CAS-6 1 probably ripping him off ten percent, but that was well

2 within the accepted conditions of that kind of deal in

3 Latin America.
* No, I didn't have any, and I don't know about

5 any profiteering.

6 Q You never saw any evidence to support that?

7 A No.

8 0 Did you ever deal with General Secord?

9 A General Secord — I met General Secord once in

10 the Ambassador's of f ice^^^^^^^^^f The Ambassador

11 introduced me to him and at that time — Secord or

12 Singlaub?

13 Q I asked you Secord, but I will also ask you Singlaub

14 A I only met Secord at the meeting in Washington.

15 Q How about General Singlaub?

16 A He was introduced to me by the Ambassador in his

17 office and he explained that the reason he was

18 was to convince Pastora to accept unity under the UNO

19 umbrella.

20 0 Was Barbara Stud#ley with him by any chance?

21 A I believe she was. I never saw her. 1 think

22 the eunbassador mentioned that she was there ^^^^^^^^^H

23 at the time, yes, but she did not participate in this

24 meeting nor did I ever meet her.

25 General Singlaub went on with this sort of wishful

s»iicLAQCirij:n

539

IWStASSfflST

105

1 hope that he could convince Pastora to accept unity. I

2 qave General Singlaub about a ten minute recitation on

3 the capriciousness , instability .erratic behavior of our
^ experience with Pastora in previous years.

5 I said I thought that his effort was, while

6 well-intentic"ed , was ill-advised. I thought that he

7 should have no contact with Pastora whatsoever because it

8 might give Pastora the wrong signals.

9 Here the UNO was trying to consolidate all of

10 Its political efforts under one umbrella organization with

11 our, of course, endorsement, and strong urging, and all

12 that Pastroa could do was to become very disruptive to that

13 process.

14 So I did everything I could in those ten minutes

15 to try and discourage him from doing this. In any case,

16 he told me that he was determined to do so and that he

17 was going to meet with Pastora and offer assistance in

18 return for his cooperation.

19 I essentially ended the conversation by telling

20 him that as a private American citizen he could do as he

21 saw fit but he would certainly not be acting at that time

22 in what we considered to be the best U.S. interests.

23 Q What time frame was this?

24 A I have no idea.

25 Q 1985, as opposed to 1986?

IIKIlM AC(i4.ll.a

540

iiffieissfiiF

106

CAS-8 1 A 1986. March -- there is a cable. The Senate has

2 a cable. Let me tell you what happened. I left town. I

3 had to go to Miami or someplace in consultation. When I

4 came back I found that my deputy had released the cable from

5 the Ambassador to North , ^^^^Hand Abrams in which he

6 outlined what Singlaub had done, and in that cable the

7 promise that Singlaub made was that the United States will

8 provide Eden Pastora with assistance and so forth.

9 And when I returned and saw this cable, I imniediatel;'

10 went to the Ambassador and said, sir, I think you have made

11 a big mistake in allowing not only him -- not disclaiming,

12 but also distancing ourselves from any such agreement which

13 says the United States which implies the United States

14 Government, but I felt that it should not have been

15 relayed to Washington and we should have sent -- you should

16 have sent Singlaub back to make sure that he, Pastora,

17 understood that it is not a United States entity which is

18 promising him this support.

19 In any case, by the time I was able to get this

20 message across. Assistant Secretary Abrams sent

21 Ambassador Tambs a very strongly worded cable

22 concerning that. It was so strong that I frankly

23 thought that Ambassador Tambs' days were numbered. I then

24 sent -- I wrote a cable in the same channel to the same

25 people with a -- what the Ambassador meant to say was kind of

iiiiAi aoo?nr:^«

541

107

^ cable, and what should be understood by this, and the

2 Senate did have this cable traffic. That was the only

3 experience I had with General Singlaub. Who, if I never
^ see again -- ^

5 0 Do you recall North °>^^^^^H reaction to that

6 cible?

7 A They were in full agreement with everybody, with

8 me, with our position that that was a terribly stupid thing

9 to have happen, to have Singlaub go out and say this to

10 Pastora.

11 Of course, we were only interested in the political

12 aspects of it.

13 Q HaveK'ov^ad reason to think or heard rumors to the

14 effect that Singlaub was sent in there at the encouragement

15 of the CIA at higher levels in order to effectuate

16 bringing Pastora out of the bush so to speak, and ultimately

17 to weaken him?

18 A That is inconceivable because on the question^ of

19 Pastora, there was no difference of opinion between

20 and me and I can't imagine what level of CIA beyond

21 ^^^^Hwould even have considered such a thing.

22 And I, frankly, never heard of a link between

23 Singlaub and North.

24 0 Did you ever have any dealings with a fellow named

25 Max Gomez or Felix Rodriguez?

imCUS£iI;i^_

542

CAS-IO 1

108

A Yes.

Q On more than a couple of occassions or limited?

A Let me tell you about Felix Rodriguez.

543

WMWi

109

I never saw him again. I talked to him once on
the phone, sometime last year in 1986, when I understood
that he was creating problems ^^^^^^^^^|or he was getting
himself involved with the FDN versus the southern versus
the private benefactor and so forth and Quintero gave me his
telephone number in Miami and in Miami I called to try and
get him to back off from getting involved in all these
problems or creating problems.

Once I got him on the phone, I heard this voice
again and he is a very argumentative, very forceful guy and
I said I am not going to get into it. I said,^^^| I ^ust
want to give you amambrazo, a hug, good luck to you, ciao,
regards. I never talked to him about it. It is a long
story, but because there has been too much in the press about
Max Gomez and this and that, I wanted to get it on the
record .

Q Do you have any evidence or any knowledge or

544

UNS»SSili8Fr

110

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reason to believe that Oliver North pocketed any money?
A Absolutely not. None. No.
Q No reason to believe that?
A No.

Q How about Rob Owen?
A I don't know.

Q You never saw any evidence to indicate that?
A No.

Q How about Lew Tambs?
A No.

How about Chichi Quintero?
A I don ' t know .

0 You, yourself, never received any n»ney in any
way, shape or form?

A Absolutely not, except for 68 or $80 for th« oil,
That is all. That I testified before about. Not a

nickel, sir.

IINC/it'JiTii:n

545

mSgggrr

111

Q I ]ust want that to be clear on the record. With
respect to Elliott Abrams, did you ever have any personal
dealings with him?

A No personal dealings. Professional.

Q I mean in any way, shape or form. Did you ever
meet with him?

A I met with him ^^^^^^^^H on several occasions,
when I briefed him, he brought up about point west. In
the Ambassador's office, in the Ambassador's residence at
brief ings ,^^^^^^^^^^^^^^^^^^^^^^H the conference
all the ambassadors and State Department people.

Q With regard to Abrams, did you have any reason to
believe that he was aware by anything he said or did that he
was aware of lethal supplies being provided to the contras?

A Specifically, no. My impression, I assumed he

The assumption was based upon your dealings with

A He gets copies of my intelligence reports and he
knew that deliveries were being made and that they were
private benefactors, because the intel report said so, so
I have to assume that he knew.

Do I know specifically that he read them? No.

Q Did North or^^^^Hever indicate to you that
they had specifically briefed the President on the receipt

IIMPI SOOr.rn

546

CAS- 14 1

vmmw

112

of lethal supplies by the contra forces?

A No.

Q Do you have any reason to beleive the President
was briefed in that regard?

A On lethal supplies to the contras? I )(now that
briefed the President because either he told me or
somebody told me that he had gone in for a briefing but it
was an agency briefing and I don't know what was said in
that briefing. ,

Q So it may or may not have related to latithl
supply of contras.

Did Oliver North ever give you either in writing
or orally a legal opinion that he had received from any lawyer
with regard to the legality of his conduct or the conduct
of any others who were assisting him in the resupply effort
of the contras?

yNMSSiiitB

547

113

A I only asked him about my own situation; is what
I am doing legal? He said, yes it is legal, you are only
passing information. There are certain words that remain
with you for a long time and those I certainly remember.
And he repeated that more than once, when I
said are you sure, he said, yes, yes, it is legal.

Q When he commented did he refer to any legal
opinion he had received from a private or government
lawyer?

A If he did, I don't recall it.

Q Now, given the fact that North is not a lawyer,
were you satisfied in asking him alone as to whether what
you were doing was legal?

A This was also backed up by my own office.

Q H|^^^p

A ^^^^Bspecifically told me that passing^ information
for the secure delivery of supplies was legal.

Q Let me stop you there a second. Lethal supplies?

A Supplies. We are talking lethal supplies.
Humanitarian supplies, there is no question.

Q Your clear understanding when you spoke with
Iwas that he was commenting upon the delivery of lethal
supplies?

A Yes.

Q When would that have been, approximately?

mm ^cc:£!s:n

548

imeassspr

114

A 1986. I don't remember. But you know, there is
no — there wai never a question in my mind about humanitariar
supplies obviously, so when we trere talking about legality
concerning supplies we are specifically talking about
lethal supplies and in providing information for the safe
delivery of lethal supplies, that was specifically a point
that^^^^H4ddressed with me.

Q Okay. Fine. And nobody else at the agency?

A As I said earlier, where there was a question
was in the question of legality, it was in a question of
political propriety, in other words, we didn't want to
antagaiia^e the Congress at a time when here we were getting
close to a vote where it might have been misunderstood or
mi sinterpreted.

Q So essentially you are saying, if I understand
you correctly, you didn't have any reason to think that
you were doing anything illegal at any point in time?

A Absolutely not. It has been brought to my
attention a comment that I had made I believe to the Senate,
at some point when the Indians were promised by us and given
communications equipment, *rtjich was authorized, they were
going to take it up — they didn't have a way to take ^^|^|

[up the coast and into Nicaragua, so they came and
said we need a boat and we need two motors to put on the
dugout. And I went to headquarters and I said since they have

UMTLI^II-Ii

549

jm 3

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9
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imcui^ftiiT

115

got to transport this communications equipment up there,
can we give them more than for a boat and the two motors so
they can transport it; and they said, yes. Can they take up
medical supplies, yes. And food, yes. Then they came to
us and said since we have the boat, the motor, the communica-
tions equipment and the medical supplies to carry up their,
we can't carry it up unless we have guns to take along with
us to protect this stuff.

I said that is a perfectly reasonable argument
but I could also see where there was a question of legality,
because we weren't allowed to provide military equipment.
So I sent a cable to headquarters and I asked them for a-
suggestion or a decision, what do we do? They came back and
said, why don't you ask them to ask Negro Chamorro to give
them the guns that they need to protect themselves while they
are going up the coast, and that was how we handled that
particular thing.

So we were very cautious about our position
concerning the legal questions involved in this.

Q Who did you get that response from?

From ^^^^^H

A Either him or his designee.

Q And that was a while after you began your first

From headquarters,

involvement in all these things?

IMClimffl-

2 c:-;d

550

UWH^FfffT

116

A Sure. This was during the period after the
humanitarian aid, the conununications aid had been authorized
by Congress. You can see where it was a legitimate question
on the part of both the people carrying the equipment up
and ^^^^^^

Q Absolutely

A But yet It did cross the line. So we were
conscious of it. The other question which has not been
raised here yet is the question, did I direct any military
operations. I did not direct any military operations.

We reacted to whatever the commanders inside
needed or when they — or to what their situation was. They
were the ones who told us ^^^^^^^^H and we related it to the
private benefactors, or to Washington in the case of an
intelligence report.

Q Thank you.

MR. EGGLESTON: I am finished.
Thank you very much. We appreciate you coming
down.
(Whereupon, at 2:30 p.m., the deposition concluded.)

ilLASSiOElL

551

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3[ : I N TEXT CF BACK CHANNEL.

F OR mmidllim C/L A/CAT F

3[PiS:v.fNT Cf S:a:[ for iSSiSTANT SECRtlASr :3RiMS
WHITE MOUSE fOR COLONEL OLIVER NORTH

SUBJECT

PiSTCRA/S I NCL AU8 AGREEMENT

: s s . '. : - • : : v-scn n -^i\i^ii john siNciiuS -^i

• ■rH^JH^AT RECJEST :r senator ,essiE i-'-.'^i

'0 ASSESS 'HE SITUATION Of EOEN PASTQRa ANO -IS TROOPS
ON 2- '/:;CH 'lE S'CniUS PARTr CROSSED THE S'C^'aGJAN
BORDER - N D VISITED A PASTORA C AMPf^^HHUH^^HH^I

|^^^H::mr ccntaineo maximum of ns men jnoer command
3P adcl^c ';?:■ c-hmcrro ' 'Fri NP comment pOPO"

. - ■ E ; ; 'f-'in s . ■; c L i u B party!

:ESERii. 5 '.:LijB CiLLEO AMBASSADOR TamBS^AND ARRiNGED
WEETINC AT EMBASSY 9931 HOURS LOCAL 2s MARCH

'\j

MEETi'lC ON 26 M : R C H C C S' S ' S ^ E D OF BRlEr'M OF
:".':l:jB ST :'.'8ASSOCR^H||H:n p:S*:RA'S mi;':;v
SPOILER IT .VAS AGREED THAT IF SiNCLiJB COJLO 32T;,M
PiSTCPA S uPiTTES AGREEMENT TO MEET CERTAIN CCNOlTiCNS
9ASTCRA Sr:i,.: RECEIVE SUPPLIES VIA UNO.

'/:3Ch SINCLAuB AMD PASTCRi SlG'^EO FOl.Cw.',

5*76^

UNCLOflEO

grniiiy 0«cl«si(te<|Wti,i5«<i on lo^fft)8R '<)
uniiff (Koviwos 0' I n 12356 \

K jonnson Nji..i/i ,r,rv Council

554

UNCUSSIFIED

N 7111

2 • : '. : J 0 T E : i : [ m i ? c h h im

:«,; M[MC S "0 iCKNOiVLEDCE THE AjSEEMEs: vl:i TmS
:-f :ET.-/f[N VI; :s :EN£R4l jomn k SiNCIALS JSA »£T :no
::vv:sOtP EO:N PiSTORA

ThE AGREEMENT IS AS fOLLOWS:

:-E JNlTED STATES <VILL PROVIDE.

1 300TS

I f 000

: i'f'>:>; ' ' ; :v
- v: : ; '.£

: ['-■CS'S'ED :0MMJS ' :4T I ONS SrSTEMS

7 MlLiTiSr NEEDS fOR PASTORA'S TROOPS INCLUDING NEW
ME N WhO JOIN HIS ABMf
5 - 3 ; I N ■ M : 0 V , S C S S

• ■ [ : : 3 u 'r-i' i>:'i: : » E 5 i s E 0 c N " r £ •:..;.. ", :
aopee: :omm!tvents from pastor*

. t L E A < { WITH K I 5 TROOPS

P ; S T 0 R A K I U L [ A 0 HIS '.' : N
Til OE N I CARACUt

= :ST0R» .•.■ILLINCLT WILL -CT ' K COC-E'-T vE :•.:
•i;*H MANNER WITH THE OT-EF -'.EMEMTS C- :hE
: : - i ; E 5 I ! T : N : E

: ':STORA '.VILLIMCLT will iCT ' fj A COO^E'-TiV; l\:
::: : : • - ',•:•,•;£? v; I T H : M E i 0 n S 0 ^ S SENT ■ 0 ' ' : i '. i ' :

565

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: l:: I s' I C5

i RiNCER iUiiS.NG

t P4ST0RA AGREES TO TRAVEL TO EUROPE SOUTH
AVEBiCA ASO OTKER CENTRAL AMERICAN COUNTRIES TO ElP'.AiN
THE 'RUE nature" Of 'HE MARXIST LENINiS* SiNOlNlSTA
GOVERNMENT THESE TRIPS WILL BEGIN TO Jiti PLACE iP'ER
HE MAS MOVED MIS TROOPS anO RESTORED " i S ^PM" INTO i
S • : : N G f i G H T I N C f : R C E

en: quote

:mment . n spite cf ■•?

ESEHVAT ' :nS THAT PASTOR
NCE SINGLAUB IS E'JVOr 0'
T TO HELMS HIS CBSERViT
ON R E T u P N TO w 1 s H ■ s : • ; ';

T I on re garo i n: p;:' : = -

UIAR* r STUDLEY -II. I'
CRA AGREED THAT ;.L
RAINING WILL BE li: ■ i ' ':
L L BE DELIVERED J '; T
ARAGUA

'. G : N G L 1 U 8 ? : fl T » LEFT : ' •/ i R ! H

A Wl

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WLOFIED

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4/12/86 1200

C 5166

1030 hour«fc-f^,Apri 1 12. P«r UNO South Force, drop
succe«*f«4>T' ff«"^«I«^«<3 in 15 minutes. force requested to send
full report/ inventory. when told , ^^^^Ha lr>ost cried in
grateful appreciation. Our plans during next 2-3 weeks includes
air dropl

maritioM d«llv«ri«s NHAO supplies to same, NHAO air drop to UKO
South, but w/ccrtifi«d air worthy aircraft, lethal drop to UNO
South ,^^^^Hvis it to UNO South Fore* with photogs, UNO
newspapers, caps and shirts, and transfer of 80 UNO/FXRN recruits
^^^^^^^^^^^^^^Hcarrying remaining cached lethal
to join UNO South Force. My ob]«ctiv« is creation of 2,S00 man
fore* which can strike northwest end link-up with quiche to form
solid southern force. Likewis*, envisage formidable opposition
on Atlantic Coast resupplied at ox by tea. Realize this may be
overly ambitious planning but viti| your help, believe we can pull
it off.

New subject. AfP story appeared in morning paper ^^^^^^^Hon
U.S. attorney south Florida investigation arms, drugs traffic
involving insurgents and U.S. synpathisizers. Terrell, CHA
named. Focus on Mar 1985 shipment ft. Lauderdali
V ia^^^^^^^^^^^^^^^^^^^^^^

New subject. Ref Cruz split, vn^y not offer Cms provisional
presidency in secret agreement signed by principals?
Regards, DV . BT

Panmiy Decijssi'ieo/ReieiMfl on ^' ^'>-**Q£i
under piovisions ol E 0 12356
K jonnson Nalionji Secufiiv Council ^"^

(^10?

560

l!NCl?KSffli

^ 5167

4/l»/ii^^^70«»^

Delivarad to^^^^^^Hby 707 yester<jay is a plane load of
ordn«ne« for your friends. Ammo aboard includes^^^Hrds of
7.62 X l9' and a like anit of 51. Also have^^HM-26 hand
grenades, ancillary items for the C-4 plastic explosives —
blastic caps, det cord, etc., and^^Hlight machine gunds w/
rds of linked anuno and a^^^^^^^^^H anti-personnel nines for

*e in ambushes, when and where do you want this stuff, we are
p >p«red to deliver as soon as you call for it. Is there an
UNO/FARN communicator being plac«d in^^^^^^^^Hlf so, please
have this guy coordinate with Ralph so that we have things wired
together. Also wish to note tay guys are flying without any
intel. Can we do something about, getting them the radar profiles
of Nic AAA radars, etc. BT

iiiifl*. pfoviaons 01 E 0 12356 •
b) K jotiiison. National Security Council

iOsk^o^S

TOP SECRET

mmsE

S77)

561

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C 5176

UlmrTTKB^

The pilots and repair people are talking about a week to ten days
be for* tliey can u*« the C-123 again and that is only if we are
able to>flnd th* accessary part very quickly. The dual
navigatiofk systems aboard the aircraft showed them to be within 1
to 1.5 MI of the OZ for over 40 minutes. They were never able to
see zone lights and never had contact on th« radio on either
channel. The pilots never had the agreed upon proposed run-in
heading, possible enemy locations or recommended pull out
direction to avoid enemy fire. The pilots described the fire as
intense KX MG fire, probably 12. >> We are committed to
commencing drops to the FDN by C-7 tomorrow night but can del^ay
for one night to do your drop if ve can get the necessary info
for the pilots. To facilitate, have asked Ralph to proceed
immediately to your location. I do not think we ought to
contemplate these operations ■JM^ut him being on scene. Too
many things go wrong that the^UKectly involve you and ma in
yt/gj^^pm^^^^m^a^^^vKl^t ua^ Jfa still don't know what
ci^VMleiH^^aM^ViK^^ aowttain leprosy. I was asked to
provide 1500 doses for inclusion in the drop and we don't even
know what we are supposed to b« providing. I know we can do
better; we have got to if these brave people ■>- the fighters and
the pilots are to survive the experience. Help. BLNORTH

PinaKy Oecijssrfiedm^ased on Z,0
vnoti covisions ol E 0 12356
by K Jofwisofl NjiBnil Secufiiy Council

'mmm ^

562

UNCLASSIFIED

•^C> :f.vy)ft

il-u^'7 J July 191' E

rl^9

200»Hour« 30 Junt. C 5 ^7^9

StAtus or Min UNO south forc« <]«t«rior«t«d b*dly p««t 7 d«yi. ludio mqa

•xtt«Mly bltctr, «ccutinq us of pUyinq with lives. Fore* un«blt find S

bundlM^^^^Ek^^y •••rch. f4ov do not b«ll«vt bvindlas dropptd. Fores

\*% . numbcrtfl capturtd rising. Cit* 2 Cubans «monq other;

> laportanc comdrs rttrtat to R^o San Juaaa •■ txp«ct cros« today. Mtn

lapvaay widespread, complicatad by lack Mdicina, food, clothes, ammo.

Botto* line rupCsr* fraqile alliance ARfiC with UNO. due inability resupply.

Fore* b«li*v«« fMsIt ours they vehemently reject our reasons. Even so

we fiakinq new effort, sending two qualified aen by boat 1 July. One to Co^nilr

Gonzo, one to Comdr lUmoi). to set up secure DZ area and organize reception.

Expect Conzo will be quickly organized. Request you coma work with us.

Need July cassette.

From Ralph: Planning to go to^^^^^^^^^^^^^^^^^on Monday to assess

situation and atsist^^Hon requaat % depending on our availability. Advise

on construction plans since I aa supposed to give money to Raoone for regvilar

expanses. I do not think I will ta>«% enough to cover any extras, v

^llVs

'"1^1 proviswns Of £ 0 12M^
»> H Jon,ison. Nauonal S«cu.,ty Couna

UNCLASSIFIED

— , ' /

- 1-(^

563

STENOGRAPHIC MINUTES *

UnreTised aiwl Uii«dit«d ^ ''^■

Not for QooUtloo or

DupUoktloa

UNGSSSIFIED

*«*» ^^"^ /87

DEPOSITION OF GEORGE W. CAVE

Friday, April 17, 1987

U.S. House of Representatives,

Select Committee to Investigate Covert

Arms Transactions with Iran,
Washington, D. C.

Committee Hearingrs

of the

U.S. HOUSE OF REPRESENTATIVES

■nrfcr provWons of E.G. i:3S:>
■ytj D. SMo, Nadocul Security Zov.r.t

OFFICE OP THE CLERK
Offlce of OfflcUl Reporten

564

565

iINKEL/mal

b«D

Wiiffly^ifi&

DEPOSITION OF GEORGE W. CAVE

Friday, April 17, 1987

U.S. House of Representatives,

Select Committee to Investigate Covert

Arms Transactions with Iran,
Washington, D. C.

The Committee met, pursuant to call, at 10:04 a.m.,
in Room H-128, the Capitol, with W. Neil

Eggleston (Deputy Chief Counsel of House Select Committee)
presiding.

Present: W. Neil Eggleston, Deputy Chief Counsel,
Richard L. Leon, Deputy Chief Minority Counsel and George
Van Cleve, Deputy Minority Counsel, on behalf of the House
Select Committee on Covert Arms Transactions with Iran;
Timothy Woodcock, Associate Counsel, on behalf of the
Senate Select Committee on Secret Military Assistance to
Iran and the Nicaraguan Opposition; David M. Pearline,
Legislative Liaiaon and E. Page Moffett, Assistant General
Counsel, on behalf of the Central Intelligence Agency.

.11

ifim proiMaM o( Cb. 12356

566

HNMSlElffiT

1 Whereupon, GEORGE W. CAVE, after having been

2 first duly sworn, was called as a witness and testified

3 as follows:

4 EXAMINATION

5 BY MR. EGGLESTON:

6 Q Thank you for appearing here today, Mr. Cave.

7 My name is Neil Eggleston, Deputy Chief Counsel of the

8 House Select Cominittee to Investigate Covert Arms

9 Transactions with Iran. Also present from the House

10 Committee is Richard Leon, Deputy Chief Minority Counsel;

11 from the Senate Committee — which exact name I cannot

12 remember -- is Tim Woodcock.

13 We thank you for being here today. Let me tell you

14 during the course of the deposition I will ask you a

15 number of questions first about your own background, then

16 about some of your early involvement in the Iran Initiative

17 and then I would like to ask you questions taking

18 you. through your participation in the various meetings,

19 phone calls and various events that were -- took place in

20 order to fulfill the Initiative.

21 Why don't you just start, if you would, by telling

22 us a little about your own background in the Central

23 Intelligence Agency, when you started, some of your overseas

24 assignments, when you left, up to the time that you, I

25 guess, resigned from the Agency or retired or whatever.

IMASSIRI^

567

BNgaSSPRlT

2
3

A I spent -- after getting out of the Hershey
Industrial School in 1947, I spent five years in the
military, all of which was either with the Army Security
Agency, and then assigned to the Armed Forces Security
Agency; and then when the National Security Agency was
formed, I was one of the first military detailees to it in
1951.

I got out in May of 1952 and went to college the
following fall. Graduated from college in '56 and ]oined
the Agency. Entered on duty I think October 1956.

568

KWU/^^igT

24
25

decided to retire in February of 1980.

mnji^^

rX^

569

retired^^^^^^^^^^^^^^^^H and I have
been a consultant to the Agency ever since on Iran^^^B

Q Let me ask you what foreign languages -- I think
I should probably ask it have you spoken or do you speak?

A Persian and Arabic, fluently, although the
Arabic is getting rusty. I haven't spoken it in ten years.
I was very fluent in both languages at one time. I am still
very fluent in Persian. I speak a little bit of French.
That is all. And some Urdu.

Q Some Urdu?

A Yes.

Q So I can complete the re -. of your time period,
you retired from the Agency, at whit time?

A February 29, 1980.

Q And what kinds of assignments have you had then
between February of 1980 and March of 1986?

A It is —

Q Generally.

A Almost 90 percent Iranian operations!

Q Let me ask you during the period of time that
you were -- had been associated with the Central Intelligence
Agency, have you come to know a man by the name of

Ghorbanifar?

OtttWrtdp^t^T

570

BNttilS6{?PT

7-7

A Oh, yes. Yes.

Q And when did you first have dealings with
Mr. Ghorbanifar?

A Our first dealings with Ghorbanifar go back to
I think January of 1980. When he first came across our
sights..

Q Were you personally involved with him at that
time or was that the time the Agency first became
involved?

A I met with him in — once in 1980. I think in
August 1980. I met with him one other time, I think, just
to get a better assessment of him. Because we had been"
getting -- we had had a case officer in contact with him

iis

information was such that some of it appeared to be good, but
a lot of it just didn't check out.

571

2
3

on my recommendation, we
terminated our operational relationship with him in I think

Q During the period of time then from 1980 to
1981, at the time you terminated your operation with
him, was he providing terrorist type information?

A Yes. He was, oh, providing us information on"
the organization of Iranian terrorism and attempts to
export the revolution. Also, some political information on
what was going on inside. The problem we fov^Jout was
a lot of it didn't check out.

And —

And also making exorbitant demands.

Financial demands? ~

When you say the Agency terminated its operational
relationship with him, was that your decision?

A It was my recommendation. It was accepted.
Q Who IS It in the Agency who would make a

decision, who actually would have made that decision?

nave maue i

572

that is

Iconcern

1 A Well, normally this would be|

2 concerned. It is

3 would concur with the decision. Headquarters almost

4 always goes -- it goes back to the division responsible in

5 Headquarters. They would concur. Normally, if the field

6 determines that the guy is not worth running, and wants

7 to terminate him, no one objects.

8 Q I take it that there would be some reflection in

9 his file he had been terminated?

10 A That is correct.

11 Q I take it something must then happen such that the

12 Agency became involved with him again after that time?

13 A Yes. We became involvec with him again in the

14 spring of 1984 when he reported on Iranian attempts to

15 infiltrate terrorist groups into the United States.

16 Q And did you have contact with him at that time?

17 A No . I didn't have contact with him at that time.

18 But I was aware of what was going on and was highly

19 suspicous of the information he was providing. So we

20 decided to give him a polygraph test.

21 Q This was in the spring of '84?

22 A Yes. I think we gave him a polygraph test in

23 June or July of 1984.

24 Q It is my understanding there were a total of

three polygraphs given to Ghorbanifar,

mussm,

b^-..j2 o:

573

wmmk

A Yes.

Q Was this the second?

A No. This was the first. We did not polygraph

him during our previous arrangemen

first polygraph I think was in June
or July. He flunked it. Because some of the information
that he had, that he had given us indicated that the
Iranians were attempting to infiltrate a team to assassinate
senior U .S^-of f icials , including the President, at the
request of the Secret Service we gave him another polygraph.
That was in August or September of 1984, I believe.
At which he also flunked.

Q As a result of those, the information that he
had provided, thSf turned out not to be truthful, I take

-^ ^

That is correct.

A fabricatjif^otice was issued after that?

A fabrication notice was issued after that.

Let me show you for the record, there is a
number, I will use the CIIN number. As I talk about
these I will refer to them by the CIIN number.

This has^een marked by the Agency as number
511. Is that the fabricator notice sent out on him?

A Yes.

iiCUSSiEia.

574

ItttitASSI^BT

2
3

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

Q Are you responsible, were you responsible for
sending out the fabricator notice?

A No. You see, as a consultant, you have really
no authority to take executive decisions. These I think
are by staff ,^^^^^^^^^^^^^^^^^^^^^^^^^H not

by the operating division.

Q Were you consulted about whether or not to send
a fabricator notice on him?

A I don't recall being consulted. I would
certainly not have objected to it.

Yes. Correct. We terminated our relationship
in September.

Q The fabricator notice makes reference to one of
his aliases as Mr. Kralis?

A Yes. He has a Greek passport.

Q I notice it also seems to indicate there was some
belief he was in touch with Israeli intelligence
services ?

A Yes.

Q Do you know why that conclusion was made?

A One of the most interesting things about

UVli^fVMZ^iia7qi :

575

IIRGtA^flBIF'^

2
3

Ghorbanifar is up to the time of the Iran initiative
he never told us about his Israeli connections. We
knew about him because he had been with Star Shipping.
He was the Iranian Director of Star Shipping which was a
]oint Iranian-Iraeli concern with heavy intelligence
overtones .

Q It was based on that association that the Agency
concluded that he had Israeli intelligence associations?

A Yes. He was also -- that is where he got the
nickname :n»d<|i .

Q Let me ask you to put a. date on it. When is
the first time, in '85 or '86 that you learned that the"
United States government has renewed its dealings with
Mr. Ghorbanifar?

A The first -- it is in early January. I was --

Q Early January of '86?

A '86. I was told that Ghorbanifar had provided
extensive information on terrorist -- Iranian terrorist
activities to Charles Allen. I looked at some of the
material and didn't believe it. It was similar to the kind
of things he told us before. A mixture of truth. When
Ghorbanifar does something like that, he is setting you
up or somebody up to make — not necessarily you — to
make a lot of money.

It was decided to give him a polygraph test on

576

IMtl\S£ieii»T

this and I and the polygraph operator and the counter-
intelligence analyst worked for two days coming up with the
questions for the polygraph. I think the polygraph was
given on the 17th of January.

Q I think it was given on the 11th.

A •■MMIMte The 11th. Maybe it was the report
on the polygraph that was filed later. In any case,
he really flunked it. We knew -- I knew what kind of
questions to ask. He really flunked that one. He showed
deception — clear deception on 13 of the questions we
asked and the others, two were inconclusive. As I said
before, he got his name rightitg

Q During the fall of 1985, I take it you were still
working on Iranian matters?

A Yes, I was.

Q Was that generally related to the hostages?

A Not so much because the hostages -- the hostage
question was really being handled by the counterterrorist
people. Since it was in Lebanon

Q But during — between July and early --
between July of 1985 and early January of 1986, I take it
you were not consulted about Mr. Ghorbanifar?

A No. I was not consulted until early January
when we put together the polygraph test for him.

lirlbkBiV^^^ ^WL'Ti

577

IRffitt^BSfcT

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

Q Let me get to the polygraph test in a second.

I want to show you two documents and ask you whether or not
during the period of time that you were working on this,
whether either one of these came across your desk.

Here is CIIN #1034. That is a cable dated July '85.

A I don't recall seeing this.

Q Have you seen it -- ever seen it prior to ]ust
this minute?

A No. I don't recall seeing it. But that is --
most of the time I would be overseas. I would just come in
to get a briefing. I did not spend much time in
Headquarters.

Q Let me just also show y;u for perhaps the same
purpose CIIN #1033 which is a document addressed to
Arnie and signed by, it appears, Peter. It is dated July

II of 1985. Do you know who Arnie and Peter are?

A Arnie? The only Arnie I can think of that would
be there would be^^^^^|^^H I don't recall seeing this
document.

Q It is another document which refers IfoJ
and Manucher, however you pronounce the first name.

A Manucher. I don't know who the Peter would refer
to.

Q Okay.

How did you come to be involved in -- who asked

imAssiHykT

578

UNKIiSSWT

you to participate then in designing the questions for
the polygraph? How did that come about?

A I forget who was the -- it would be the Iranian
branch chief at the time. I was back here m Headquarters
area and I cannot recall who it was at the time. But
that is who it would have been.

Q You mean the person on the Iranian desk?

A Yes, head of the Iranian branch.

Q I will ]ust say was the person you are thinking
about ^^^

A Probably. Probably^^^^H

Q You knew^^Hl take it?

A Yes. Very well.

Q But it was no one at a different level? It
wasn' it^^^^^^^^^l Clair George? You think the request
for assistance came fromi

A Yes, I think it did. Based on his files, he said
you seem to know as much about this guy as anyone. Why
don't you help us out on the research on the polygraph
for him.

Q Let me ask you sort of the state-*f ^feur h^^ledgt
as of the tune you were asked to help out on that. By
that tim^^^^^^^^^Hon December 22 of 1985 had conducted
a fairly lengthy interview of Ghorbanifar at Ledeen's,
Michael Ledeen's home. Were you aware of that?

(JNOA^B

fT>»

579

wmssiREiT

'' A Yes, he told me about it after the fact.

2 Q He did a memorandum on that meeting. Had you

3 read the memorandum, or did you read the memorandum?

^ A Yes. I am pretty sure I did. I would have had

5 to.

6 Q To help design the questions?

7 A To design the polygraph.

8 Q I take it then by that time you were aware

9 Mr. Ghorbanifar had been involved in some fashion in

10 fall arms shipments and negotiations about release of

11 hostages?

12 A I'm not sure if I was. I think the specific

13 things that we were concerned abcut, as I recall -- yes.

14 That is true.

15 Q Because it was inJ

16 A Yes. I recall now. v«niat we were — as you

17 probably know from looking at the polygraph, we were

18 focusing on one part of it on his information on terrorism

19 and Iranian -- and also as that concerned the taking of the

20 hostages.

21 Q And was it -- what was it -- did you have an

22 understanding about the reason that you were being asked

23 to conduct this polygraph? Did you have any understanding

24 about what it was anticipated anyone would use Ghorbanifar

25 for?

VwiilpniJllirlfcHtrn

580

ims^EifcT

^ A It was crucial that we determine the accuracy

2 of the information he was passing.

3 Q Prior to the time that the polygraph was taken,

4 did you speak to^^|^^^^^^| or Clair George or anyone

5 about your views about Ghorbanifar?

6 A No.

7 Q Were they solicited by anyone?

8 A I don't recall.

9 Q Did you make your views on Ghorbanifar known tc

11 A oh, yes. I think|^H||shared my views. He

12 thought the guy was, after having met with him, was a

13 charlatan.

14 Q Did you understand that there was thought to

15 use him or to continue to use him on the hostage release

16 aspect?

17 A No. In fact, I was very alarmed by it when I

18 found out about it on the 5th of March.

19 Q You thought what you were doing is evaluating him

20 for further information about counterterrorism?

21 A Yes. And that once — I assumed once the —

22 see, I got the flu. I was supposed to be at the polygraph

23 session and wasn't able to make it. And so after coming

24 back and hearing — talking to the operator, I assumed

25 that all our relationships with Ghorbanifar were therefore

wMsm

581

imSSREIF^

1 terminated.

2 Q The polygraph examination itself was on January

3 11th, I think, of '86. Then — you were sick on the

4 11th?

5 A Yes. I couldn't make it. I was really in bad

6 shape.

7 Q When did you first learn that he had failed all

8 the questions except his naune?

9 A When I got back into Headquarters a couple days

10 later.

11 Q Who did you learn it from?

12 A I think it was^^^Hwho told me.

13 Q Do you recall -- did you speak about Ghorbanifar

14 then with anyone other than ^^^H Did you have conversa-

15 tions with — were there any meetings about it that you

16 recall?

17 A No. I don't remember speaking specifically about
13 it. I thought that that ended the matter.

19 Q There was a meeting which took place on the 12th

20 of January in Clair George's office. There was discussion

21 at that meeting about the polygraph result and what

22 to do and various things like that. Did you attend that

23 meeting?

24 A I don't recall attending it, no.

25 Q Within a few days after that, maybe the day after

My\&[Mit

582

IHTOBiSSBBkT

1 that meeting, Charles Allen actually meets with Ghorbanifar

2 again and has a long session with him. Did you know that

3 that was taking place?

4 A Not at the time, no.

5 Q You didn't learn that until after March 5th?

6 A That is right.

7 Q Let me just ask you — raise it up to March 5th,

8 but ask you between mid-January of 1986 and March 5th of

9 1986, do you have any further dealings with Ghorbanifar,

10 conversations about Ghorbanifar, what to do with him, were

11 you consulted about him in any fashion?

12 A I don't recall because -- I am sure. The revela-

13 tion on Marvh 5 when I was first briefed was quite a

14 shock.

15 Q You now know there was a shipment of a thousand

16 TOWs in mid-^bruary from the United States through various

17 whatever hands and routes to Iran. Were you aware of that

18 at the time it was taking place?
ig A No, I wasn't.

20 Q Let me direct your attention then to MarJ^h 5 of

21 '86. Could you tell us how it was that you were brought

22 into this operation, where it took place, who was

23 present?

nA A ^^^^^^^^^^^Hcalled me in and said that -- asked

25 me how I wguld like to meet Rafsanjani. I said well,

H^IQU.

583

imssi^iiiT

1 what is the story? He gave me a briefing that the NSC

2 has been involved with the Israelis in an operation which

3 we -- which has several goals; one of them is for us

4 to reestablish a strategic dialogue with the Iranians

5 leading to the normalization of relations *nd also hope-

6 fully get the hostages released. That was sort of the

7 sumation of the briefing.

8 Q Who else was present at the briefing?

9 A I was introduced as I recall to Charlie Allen

10 later that day. There was a discussion wit

11 Charlie, and I. I think also I met Ollie North — came

12 over in the afternoon, that ifiSSBten .

13 Q You think you met Ollie North then on March 5th?

14 A Yes. On March 5th.

15 Q Is that the first time you ever met North?

16 A Yes.

17 Q I get the impression that was the first time

18 you met Charles Allen?

19 A I heard about Charlie. I knew who he was. I

20 never had anything to do with him personally or operationally

21 Q How long did the — what ^^^U^^^^^^^^l

22 title at the time that this meeting took place? Was he

23 ChieT of the Near East Division?

24 A I can't remember whether he was chief or the

deputy chief.

WlHiblWliMrmif'T'

584

DNHA^IffBlr

1 Q How long --

2 A shortly thereafter he was chief I know.

3 Q How long did this conversation last?

4 A I cannot honestly remember.

5 Q What was your reaction when you were told about

6 this initiative? Did you say anything?

7 A Well, I thought the idea of initiative -- because

8 I had long believed and -- that we needed a dialogue with

9 the Iranians and also we had several indications from other

10 operations that were going on that the Iranians — at

11 least it was an indication there was some interest on the

12 part of the Iranians. That part of it I felt was good..

13 The question of arms for hostages -- using the arms

14 for us to establish our bona fides and their getting the

15 hostages released to establish their bona fides was a policy

16 decision made elsewhere and didn't concern me. My real

17 worry was we were relying heavily on one, Ghorbanifar, who

18 A to this day cannot be trusted and, secondly, the Israelis

19 who had different goals in this.

20 Almost as I got briefed -- you know, most of the

21 /nitiative was still in the hands of the Israelis.

22 Q What did you understand or was your view

23 about the different goals the Israelis had as opposed to

24 the goals of the United States?

25 A Well, for the Israelis, I don't know if you are

li!iU!USi^a£IL„

585

HNttASS»H»T

aware of it, but the Israelis under the Shah had an excellent
relationship with the Iranians,

Q So what -- as of this time period, the post-Shah
Iran, what were your views about how the Israeli interests
differ and how that should affect our judgment about how
to proceed?

A Well, the Israeli interest, of course, were as
long as Iran is fighting Iraq, you go back to the '73 war,
the fact that Irani
and Israeli help was able to tie down a great portion of
the Iraqi army. That was a great help for Israel during the
•73 war. Iraq was not able to fulfill its military
obligations to the Arabs during that war.

The strategic situation, given the war with Iraq, was
such as that the Israelis were providing

lumssifluk

586

UttGH^Ptf^T

23
24
25

Ito the Iranians and would like to
have done a lot more. To them, an Iranian defeat of Iraq
is perfectly all right. The last thing they would like
to see is an Iraqi victory which would strengthen the Arab
hand. They also by this time had learned, I think, that
given the situation in Tehran, there was no way they could
get back to the same kind of relationship with Iran unless
the United States was able to do some brokering for them.
This is why -- I thitik this is why they pursued
this so aggressively, this initiative.

Q What kind of assistance did you understand
Israel to have given to Iran up to this time? Military
assistance? " ""~

A Yes. We had had report:.n<

[that the Israelis had provided considerable
ajnount of assistance to the Iranians .^^^^^^^^^^^^^^^

I
think the problem caime, for Israel, probably in late 1984
when the Revolutionary Guard became the supreme military
power in Iran.

And to -- when you get to the Rev Guards, you

llCUiSSm.

587

HNt^SStWST

get to the groups who find Israel an anathema.

Q At this meeting with^^^^^^^^^^and others, what
were you told about the Israeli role in the initiative
up to that time, if you recall?

A I was told about the fact that the -- it wasn't
a full briefing. I was told we were involved with the
Israelis and that a special office in the Prime Minister's
office headed by their counterterrorist man. General Nir,
was the point man. And I didn't -- was not able to brief
myself on all the details until some time later.

Q Do you recall at that time were you told about
the prior arms shipments? First, about the February arms
shipment? Had you been told about that?

A I think I found that out the next day.

Q Let me get to that.

A ^^^^B told me I want you to read up on several
things that have happened.

Q Were you told then, still directing your attention
to March 5, were you told about the fall of '85 shipments,
the HAWK shipment, and the TOWs from earlier in the fall?

A I don't think I was. I don't recall being told
at that time.

Q When you said that Oliver North came in at the end
or in the afternoon on the 5th, was that after this meeting

with I

|was over? A separate time?

588

BfffiPASSfREffT

"I A Yes. It was separate. I think I met with^^Hin

2 the morning. I can't remember when I met with Charlie. It
was about that time.
Q Okay .

5 A And then Ollie came over. He,^^^Lnd I met in

6 the afternoon. I don't know whether Charlie attended that.

7 I can't recall.

8 Q What was your understanding about why you were

9 being brought into it?

10 A Well, several reasons. One is that they didn't

11 want to have to rely on Ghorbanifar as a translator, because

12 during the meetings when ^H^^^^^^H went over, there were

13 quite a bit of indications that Ghorbanifar wasn't translatir

14 accurately.

15 Sam/thing happened incidentally when we were in

16 Tehran. So they decided they needed someone that spoke the

17 language fluently, that they could trust to translate

18 accurately; and second, they wanted someone that -- up to

19 this point no one had been involved in this operation that

20 understood anything about Iran or had ever set foot in

21 Iran. Those are the two reasons given to me.

22 Q So in the afternoon you met with, you think,

23 ^^^^^^^^|and Oliver North, the afternoon of the 5th?

24 A That is correct.

25 Q Was that just a briefing as well?

I HHMnliiiiTrKlt!!!

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end mil2
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BRtft^aSfeT

A Yes. It was a short one because Ollie was
involved in several other things. I saw him briefly the
next day. I can't remember whether it was in his office or
whether he came over to the building. We left that night.

Q You left the night of the 6th?

A That is when I think. Some people say we left
the 7th, but I swear we left the night of the 6th.
MR. LEON: Left for where?

THE WITNESS: For Paris. It was the day the TWA
strike started.

IMASSEll.

590

ake «la

bp-1

UI^EA^IfiBF'

BY MR. EGGLESTON:

Q This is the sixth or seventh, whichever. Colonel
North's calendar seems to indicate you left in the evening.
Seventh. Who knows? I take it you went over with Colonel
North?

A Yes.

Q Who all went over together? You, North?

A ^^^^^^^^^^^^H 0 1 1 i e

Q Who did you meet with when you got to Paris?

A We went to the airport immediately, to one of the
airport hotels. I don't know. ^^^^^^^^^| or the

{one of the two. Nir and Ghorbanifar were at the
hotel.

Q Did you meet them the next morning then?

A Yes. We got right off the plane and went right
to the hotel. After the meeting we went back to the airport
and flew back to the United States.

Q How long was the meeting?

A I guess we got to the hotel about 8:00 or 8:30.
It went on until about noon when we rushed out to —

Q You caught the afternoon flight back?

A Caught the afternoon flight back.

Q Throughout the meeting, it was just the five of you?

A That is correct.

Q If you could summarize as best you recall, what

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was discussed at that meeting?

A We met briefly with Nir first who told us that
Ghorbanifar had done a great job about lining up things
with the Iranians, and then he was called in. We talked to
hijn. Ghorbanifar said that he had a tentative agreement
for us — for a delegation to go to Tehran and meet with senior
officials. He said there is several things — just in
general terms, they are interested in talking about the
Soviets^^

He also spent an enormous amount of time telling
us how none of this could happen without his participation;
that he was the key man. I also recall separately asking

they done^^^^^^^^^^^^^^ssessment
Ghorbanifar to satisfy their faith in him. He asked me what
do you mean? I said, "Well, we have some doubt, and I
think if you haven't done it, you ought to."

I don't know if they ever followed up. They
considered him their agent. They made that known.
Q Let me —

A They told us about that.

Q Let me show you what is marked as CIIN Number 251.
Is this your report of the meeting on March — is this a
document prepared by you?

A Yes. This was — when I got home that night, I
thought that it was a good idea — I just typed on the

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typwriter at home. I think I did this at home. Anyway,
some things that I recalled happened.

Q There is kind of a summary of the meeting that
took place?

A Yes.

Q At least part of what happened at this meeting
is there was a discussion about organizing the trip by
American officials to Tehran; is that correct?

A That is correct. Oh, and also it was at this
meeting that Ghorbanifar told us that — what they were
desperately interested in is getting spares for their Hawks .
He came up with this long list of 240 line items.

Q So this was the meeting -- this was one of the
meetings at which the Hawk parts -- was it your understanding
this was the first time Ghorbanifar had come up with this
request for Hawk parts?

A First, I knew of.

Q Did he have a written list?

A He had a written list he had taken down over the
phone and made up himself.

Q Did he provide you guys with the list?

A Yes.

Q Do you know approximately how many items it was
at opposed to different kinds —

A There were 240 different items on the list. Some

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there were 10, 9. There is a figure somewhere about the
total number of items, but I don't have it.

Q Who did you understand he had gotten this list from?

A From!

Q I take it you had not met^^^^^^^H by this time?

A Oh, no. No.

Q Could we get that back and give it to the witness;
Page 2, I think the last line of this document, why don't
I refer you to paragraph 12. If we could ask how this
conversation csune up.

A Oh, yes. When he was talking about the deals

I didn't know what he meant. I didn't question
him. No one else did, the specifics of what he had in mind.
He also, as an aside said, and also for Central America^^^^^l

Q Well —

A Because it was Ghorbanifar, and it was money. I
made a note of it just in case.

Q Let me ask you. As of this time, were you aware
that one of Colonel North's other accounts, since that
phrase is used, at the NSC was Central America and the contras?

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A I don't think so. Because I met him briefly and we
were discussing this. It wasn't until, I think, after we
came back from this trip that I learned anything that was
meaningful. Someone might have said he is concerned
with terrorism or something else. They might have said
that in brief. I didn't get any detailed knowledge of his
other activities until after this trip. I am sure of that.

Q By this time, Charles Allen had interviewed,
I think, at least twice Mr. Ghorbanifar. In fact, Ghorbanifar
made some reference to Charles Allen about using profits
from some^^^Hdeal to help out Ollie's buys in Central
America.

Were you aware of that as of this time?

A No.

Q Were you aware of that —

A I wasn't aware of it until now.

Q Right now you are not aware of it?

There is a question I forgot to ask you which is
in preparation for this meeting. You indicated you had done
some reading in order to get sort of up to speed, because
you obviously knew other things had happened. What was it
you read?

A I just looked at Ghorbanifar ' s 201 to make sure
of the dates. When you asked me, remember, in the interview,
I couldn't remember the dates of when we did what. I just —

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that is all I read. That is the only thing I read.

Q So you didn't read information about fW^t had
happened previously in 1985 and 1986?
A Oh, no. No.
Q There was —

A In his file. I went through his file. But none
of that stuff was in thepile.

Q Was there — let me return then to thaC»«eting
of March 7 or 8 which took place in Paris. Was there
any discussion at all during the course of that meeting
about financing of this deal? How much the weapons — how much
the Hawk parts would cost?

A No. The only thing that -- what^^Hand I said
that we would find out the availability of the spares on
the list and some preliminary information on what it was
going to cost, because as I recall, it would take us a
long time to get the costing from the military.

Q Was there any discussion, if you recall, about the
method of financing, how it was Ghorbanifar was going to
cone up with the money, what he was going to do?

A Oh, no. Not at that meeting. In fact, that was
entirely in his and Nir's hands.

Q That was entirely in his and Nir's hands?

A Yes.

Q This memorandum that I just showed you which has

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» 4W*-> "WW 32

got the number 251 on it, what did you do with the memorandum
after you wrote it up? Who would you have distributed the
memorandum to?

A I suspect that the only people that ever saw it
were time,^^^^^^^^^Hand^^^^^^^^^H and I am
sure I sent a copy to Ollie.

Q Did you think you sent a copy to Charles Allen?

A I am sure Charlie. By that — shortly thereafter,
I worked closely -- started working closely with Charlie
on
support the effort.

Q Where were you -- where was your office or where
were you working out of at this time at the agency.

A I didn't really have an office.

Q That is why 1 was curious.

A I spent sometime going ove^^^^^^^^^^| — I spent
a lot of time in Charlie's office going over

everything, partly because he was usually
away and it was a quiet place, sometime on the Iranian branch,
sometime in the chief N.E. front office.

Q Let me ask you another question about this meeting.
During the course of the meeting, I want to get a sense of how
far the planning for this United States delegation to
Tehran went. Was there any discussion about who would go,
why it was necessary?

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A No.

Q Was it Ghorbanifar's idea? Was it our side's idea?
A My impression was that this had been in the mill
for some time.

Q There had been prior discussions?

A Prior discussions. Because Ghorbanifar says that
they have agreed in principle to the idea of a delegation
coming to Tehran.

Q Okay. As of this meeting, no, it is clear that
the meeting — as of this meeting on March 7 or so, it is
clear that the meeting that would take place would be a
meeting in Tehran?

A No. Not necessarily. Because as you will
recall later, the original venue was to be Kish Island.

. Q Right. After you returned from this meeeting, did
you meet with anyone? Did you meet with McFarlane or —

A It was much later on I met with — I only met
with McFarlane once before we went to Tehran,
and I went down to brief him.

Q That was substantially later than this?
A Oh, yes.

Q I don't want to ask you until we get to it in the
chronology, but would that have been after the April meeting
with Ghorbanifar in D.C.?

Oh, yes.

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598

^ ■

Q Well, after?

A Yes.

Q When you came back then, did you brief anybody
about the trip?

A I am sure it was after the -- yes. See, there was
yes. It was.

In April, there was the possibility that Ollie
and I would fly in with Ghorbanifar.

Q Right.

A That fell through.

Q Okay. Did you come back and brief ClairJ George
or the director or anyone after returning from the trip .to
Paris in March?

A I can't honestly recall when the first time I
met with the director on this operation was. I am not sure
that I did meet with him right after this trip,

Q You met with him before the trip to Tehran,
I take it?

A Oh, yes. Several times before we went to Tehran.

Q Do you know whether you met with him by the
time Ghorbanifar came to the United States?

A Yes. I think I met with him by then. I can't
remember precisely when it was. I don't keep diaries or
anything.

Q Who is generally at the agency who is sort of the

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gmssM'

supervisor of this operation? Is i c^^^^^^^^^^H Is it-
at what level is this being generally supervised? Who is
the one who is primarily in charge?

A ^^^^^^^^^^^1 I would say, the best one to focus
on.

Q Let rae ask you, then, between this meeting on
March 7 of 1986 and the meeting that took palce in early
April of 1986, what activity did you have with regard to
this? Do you recall?

A I think — I had very little to do with it
except to work to monitor the intelliger

Q Were you reading the intelligence that was coming
in by this time?

A Yes, I was.

Q Had you gone back and read the previous intelligence

A Yes. I reviewed most ot
I don't think I went all the way back. It didn't concern me.

Q Did you have any — this is now. I am sort of
focusing on March up until early April of 1986. Did you
have any telephone conversations with Ghorbanifar? Did
he ever call you during this period of time?

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600

TiTi,

A I don't think so. Most of the times, you know,
when he called I gathered he either — his usual contact
was Charlie Allen.

Q You don't recall him calling you?

A No. He didn't have my home phone number.

Q Did he call — you didn't have any contact, I take it
with^^^^^^^Heither during this time?

A No. The first time I talked tc
when we were in London in May.

Q During this time period, was there any effort to
figure out a way to get Ghorbanifar out of the operation?

A No. He was considered essential. Let me go iato —
there are a couple of — there was quite a bit of argumentation
about this. The Israelis, particularly in the person of
Nir, insisted on Ghorbanifar, for one thing. I was at
the other end of it, insisting that he couldn't be trusted.
There were other people that felt that you had to keep him in
because since he — because he would probably blow the whole
thing.

He was investing a lot of money in this operation,
so that he had to be kept in it. I was more concerned that,
knowing Ghorbanifar, that Ghorbanifar works for Ghorbanifar,
period, which is basically what we found out when we got to
Tehran.

The interesting thing to me was that the Israelis

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were still insistent on it. He had to be used after the
fiasco in Tehran.

Q What was the understanding of the reason the
Israelis by this time are involved in this entire initiative
in such a direct fashion; they are no longer -- by this time
they are no longer directly providing any of the material.
What was their role once you get involved?

A They were -- well, Nir kept a very tight rein on
Ghorbanifar and the Israeli position was that they wanted
to get as much out of this operation as possible also. There
was quite a debate. You know, I made the point I thought it
would be a terrible error for Nir to go to Tehran and it.
was decided that because of the way the Israeli pressure on
this issue, that the only way that you could get him out was
for the President to call Perez and ask him to say that he
just can't go.

I think it was finally left up to McFarlane. He
said, "Well, he has worked so hard on it, let him go."

Q Let me just ask you as of March of 1986, were
you aware General Secord had been involved and was involved
in this operation?

A No, not at that time.

Q How about Albert Hakim?

A No.

Q Did you know Hakim had attended previous meetings

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or Secord had attended previous meetings?

A Yes. Excuse me. I knew Hakim after I got -- was
present in the February meetings in Europe.

Q Did you know Secord — but, so you were aware
Haki-m had some prior involvement in the operation?

A Yes.

Q How about Secord?

A It wasn't until sometime later I became aware
Secord-- Dick was involved.

Q Before or after — at least by the time of the
Tehran trip you knew, because he shows up in Tel Aviv?

A Yes .

Q Okay.

A The first time I saw Dick was when we met in
Tel Aviv.

Q You knew Secord?

We were^^^^^^^^^^^^^^^H but our patlv didn't
cross. We knew of each other, but had no business dealings
with each other]

Q Did you have any understanding about what Hakim was
doing, why he was involved in the February meetings?

A No not at that time.

Q Did you know Hakim before this time?

A I knew of him.

Q What did you know of him?

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A That he was an extremely successful Iranian
businessman, several cuts above Ghorbanifar. For an
Iranian to have gotten the contracts and been able to put
together the firm that he did in Tehran was quite an
accomplishment .

Q But your knolwedge of him was basically he was an
Iranian businessman?

A Yes.

Q You didn't know why it was that he became involved
in this operation?

A No not at that time.

Q Let me direct your attention to the meeting
April 3 and 4 of 1986 that took place here. How did
that meeting get set up and what was its purpose?

A Ghorbanifar, as I recall, called Charlie saying
he was coming over on the third and had -- and also by this
time we had information on the availability of the Hawk
spares and also some preliminary pricing data.

Q Okay.

A So he came over on the third. We met him at the
airport.

Q Who met him at the airport?

A Charlie Allen and I.

Q Where did you go?

A We put him at that Renaissance Hotel in Herndon,

the Ramada RenaiskSft^d

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Bi«tAS8l?SST

ir as I recall , ^^wasn* t.

Q Okay. Did you meet with him that night?

A Yes. I met with him -- we met with him in the
afternoon. ^^^^Bwas there and then Ollie showed up later.
We also had dinner at the hotel. It was^^^H Ollie, and
myself and Ghorbanifar.

Q Charlie Allen, too.

A I think Charlie had to go somewhere, as I recall,

Q So when — sort of a substantive meeting took
place, Charlie Allen was not present?

A As fai

Q How long did that meeting last?

A We had -- Charlie and I met him -- he was delayed
in the airport because he was carrying $50,000 and he had to
fill out all the forms and everything.

MR. LEON: What time did he arrive?
THE WITNESS: He arrived on -- it was a morning
flight from London, as I recall.
BY MR. EGGLESTON:

Q Did he have $50,000 in cash?

A Yes.

Q Was it United States currency?

A Yes. We took him to the hotel and had lunch with
him, then went back -^^^^^pnd I met with him and Ollie joined
us later in the afternoon.

We gave him some data on what parts were available

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isfflasfiRfflT

and what parts were no longer manufactured at that meeting.
At that meeting, he again spent a lot of time telling us
how he was essential to the operation and also gave us a
better -- a clearer idea of who we would be meeting when
we went to Tehran, and also that the venue -- proposed venue,
I think was Kish Island.

Q Do you recall who he told you he thought you
would be meeting during the Tehran trip?

A The problem with this is that some of the names
came up, didn't come up until we got to London in May. I
can't say precisely who he — I can't recall precisely
who he said at this meeting we would meet. I aun sure it. was
Rafsanjani, and Prime Minister Musavi.

Q Let me show you what was Number CIIN 513 on it.
Is this one of your reports, too? Is this the report of the
meeting?

A Yes. This is mine. Oh, yes. They couldn't meet
us in Kish. I know Kish was discussed at this meeting. Yes.
This is mine.

Q It is a report of that meeting, I take it?

A That is correct. I haven't seen this in sometime.

Q Was there any discussion at this meeting about a
pre-meeting involving lower level officials?

A I think this is the — is where we discussed the
possibility of Ollie, I and he flying in.

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IMASSiriEBT

Q Okay. Was that agreed upon?

A Well, we agreed to look into it. We came pretty
close to going eventually, but it was finally -- I gather, as
far as I know -- scotched by the White House.

Q Why don't I, since I am on that subject, jump
ahead. What is it -- maybe just to place this in time, there
is another meeting that you, I think, attend in early May.

A Yes. That was the final meeting before we went.

Q All right. Do you have any understanding about
why the pre-meeting or a set up meeting was cancelled,
not allowed to take place?

A I don't -- this was done at the White House or.
the NSC, the decision not to go. I was prepared to go.
But who said in the final analysis, no, I can't tell you.

Q Did you think you ought to have a pre-meeting?

A I thought it wasn't a bad idea. Because having --
with all my Iranian experience and my mistrust of Ghorbanifar,
I thought there was an awful lot of risk in us going in.

Q Personal risk?

A Yes.

Q Did you -- and I am getting out of my chronology —
think there was a personal risk in going in in late May with
McFarlane?

A I thought the personal risk would be based entirely
on what the radical faction would do if they found out that

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607

OfffiasfflHir

1 we were there, or if it became general knowledge that we were

2 there.

3 Q So that it didn't really matter who it was, the

4 problem was whether or not you would be discovered or not

5 discovered?

6 A That is correct.

7 Q I take it you thought if the radical faction found

8 out you were there, there was an excellent chance you would

9 be seized?

10 A There were members of the radical faction that

11 knew about it. The problem would be if it got to be

12 general knowledge that we were there, the radical faction

13 would have to react. I thought we would be in serious

14 trouble. Even then, I thought the Iranians would make

15 every effort to get us out.

1g Q According to the memo at least there is some discus-

17 sion at this time about the money, and when it is going to be

18 deposited and various things like that.

19 Can you tell us -- and if you want to look at

20 this again, I would be glad to show it to you. Do you mind?

21 Q Not at all. I think it might be helpful.

22 A Okay. Yes. There was a long discussion at

23 this meeting about the timing. In other words, how much

24 in advance we had to have the money deposited before we could

25 arrange everything. That is to the CIA account, because

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\mmw

1 nothing -- from that date is when we had to start timing

2 things, when we can pay for the Hawk spares and the 508 TOWs

3 and get them positined and then, because our arrival in

4 Tehran would have to be based on the time we got everything

5 prepositioned.

6 Q Just a couple of questions. First, what was your

7 understanding about the reason for the 508 TOWs? Did you know

8 at the time the reason —

9 A By this time I did, yes.

10 Q What was your understanding?

11 A My understanding is that the Israelis had asked —

12 incidentally, there is an interesting aside on this. The

13 Israelis to this day swear they only sent 500 TOWs in

14 September. The Iranians counted 508.

15 Q Interesting dispute. You think it would be the
■\Q other way around.

17 A Yes. We did supply the Israelis with 508. They

1g asked if we would replace — that was agreed to. So this

19 shipment included the H^wk spares and the 508 TOWs.

20 Q You indicated that the timing was important because

21 it was only as of the date that the money was received in

22 the CIA I account.

23 A Everything starts moving on the date that we get the

24 deposit made in the CIA account.

25 Q Did you have an understanding or was there anything

jnr'

ll £W ft 'I (-^^ " '^-'

PUBLIC PAPERS OF THE PRESIDKNrr

2 0 L 0 C.J

609

1 discussed at this meeting about how the money would get

2 into the CIA account? What route it would take in order

3 to get to the CIA account?

4 A No. There was no discussion at this meeting.

5 Q Did you know or understand the money would go

6 through General Secord.

7 A No.

8 Q Did you have any knowledge about whether the money

9 would go through the Israelis?

10 A No. Not at this meeting.

11 Q Let me —

12 A In fact, as I recall, Ghorbanifar also took the

13 position that he was raising money through his bankers.

14 In fact, even in May, in London, he said his bankers forced

15 him to take out a life insurance policy, which I thought

16 was rather odd for bankers. In fact, while we were there,

17 he had to take a physical, he said.

18 Q While you were where?

19 A While we were in London, he had to take a physical.

20 Q For the life insurance policy?

21 A Yes. For the life insurance policy.

22 Q Let me just ask you a few other questions.

23 Paragraph 4 of this document refers to -- did you type this

24 at home as well?

25 A No. I typed that at the office.

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1 Q You typed this yourself, I assume?

2 A Yes. I don't spell well or type well.

3 Q Type well, particularly.

4 But that is okay. Although I am sort of joking, I

5 take it you didn't want things like this to be typed by

6 the secretaries? Or, was it just because you didn't have a

7 secretary?

8 A A, I didn't have a secretary. The second thing,

9 I thought this should be closely held. I would type this

10 up and make copies and give them to the people that should

11 have them.

12 Q There is a reference in here --

13 A In other words, that was not in the system.

14 Q I understand. I thought maybe one of the reasons

15 you typed it yourself was for a limited close hold purpose.

16 There is a reference in here to 3,000 Volkswagens

17 about 10 days later.

18 A Oh.

19 Q What does that refer to?

20 A TOWs.

21 Q It refers to TOWs?

22 A Yes.

23 Q "Ghorba pressed for new additions..." I am quoting

24 out of the document. "The new batteries," he said, "were

25 no longer in inventory." What do the batteries refer to?

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C£BT

A These were batteries, I think, used in the
mobile radars.

Q That actually means batteries?

A Yes.

Q I had not understood, I don't think, that TOWs
were part of this negotiation in April of 1986. Do you recall
what was said about TOWs.

A Well, part of it -- whenever we got all of the --
all of the hostages released -- that is at this point in
the negotiatins -- we would provide them with 3,000 TOWs.

Q I guess earlier we had promised them a total of
4,000 and delivered a thousand by this time, the February
shipment. Did you have any knowledge of that?

A One thousand, five hundred^ eight, if you count _
the Israelis.'

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But 1 am pretty sure at this meeting he mentioned
nothing about —

Q Central America?

A — Central America.

Q You saw the et cetera at the end of that. I
thought maybe it was a reference to Central America.

A No. I am pretty sure I would have made a not^
of it.

Q Let me ask you about paragraph 9 of the same
document. It says, "It is still apparent that they have not
given much thought to how a continuing relationship will
be maintained."

What were you trying to convey? What was it that
you derived from the conversation?

A Based on what Ghorbanifar was telling us, what
bothered us about this, what bothered me particularly is
there didn't seen to be much, at least as reported on the
Iranian side, at least as reported by Ghorbanifar, about how
a continuing relationship was going to evolve from all of
this. I was at that point in history very much concerned

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about that.

Q Did you conclude from that that thelranians didn't
care that much about a continuing relationship or just
that they hadn't thought that much about it?

A No. The only thing I can conclude is from what
Ghorbanifar told us, that they hadn't really given serious
thought about the mechanics of how this would be maintained.

Q Let me just ask you a couple of questions about
the mechanics of this meeting.

(CONTINUED ON NEXT PAGE.)

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IIHCim»T

(Discussion off the record.)
BY MR. EGGLESTON:

Q I was asking you about the mechanics of the
trip. You and Charles Allen picked him up at the airport,
have lunch with him, meet with him in the afternoon.
At what point does Oliver North show up?

A Late in the afternoon.

Q Are these meetings taking place at the hotel
you indicated?

A Yes.

Q Did any of these meetings ever take place at
the Old Executive Office Building?

A No, not that I knew of.

Q Did you -- how long then into the evening or
night of April 3 did the meetings take place?

A Pretty late. We had a late — Ollie got there
late, early — late afternoon, early evening.
. Q Around dinnertime?

A I guess maybe around 5:30, 6:00. Maybe even
later than that. We talked for a while, then went down
and had dinner and I guess broke up about 11:00, something
like that.

Q Did you and Ollie leave together?

A No.

Q Did you leave first or did he leave first or

1 :*•? ■."*■ ?>

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615

do you have any recollection of who left first?

A I don't recall. I think we all left approximately
the same time.

Q What I am wondering is whether Ollie would
have continued to meet with him after you left or whether
you would know if he had?

A I don't know. I don't recall him — 1 thought
we all left at roughly the same time.

Q Do you see Ghorbanifar then on the 4th?

A Yes. I went out briefly, just to talk to him.

Q Alone?

A I can't remember whether I dropped him off at'
the airport or not. Yes, I was alone. It was nothing of
any great significance.

Q Ghorbanifar was alone for this meeting, right?

A That's correct. He was on his way out to see
his girl friend.

Q Out in California?

A Yes.

Q Was -- the last question about this meeting:
Was there any discussion at this meeting about the
mechanics of the delivery of the parts ai opposed to the
timing of the release of the hostages?

A In what sense?

Q Was there any discussion about we have to have --

iLLirj.A<Lf^ir'if[i_.

616

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1
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the Iranians saying we have to have all the parts before
we release any hostages?

A I think there was something about we wanted the
hostages before the parts arrived.

0 Was that left in any fashion? Was that agreed
upon with Ghorbanifac?

A I think you have to say Ghorbanifar took this
under advisement. I wouldn't have paid any attention to
whatever the hell he agreed to anyway.

Q Let me show you one other document and just
ask you if you can date this one for me. This is CIIN-16S.

A Oh, yes. This is one that I did in April after
the Ghorbanifar meeting, just to p jt some — some things
of ray own concert

617

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You know, knowing Ghorbanifar, you have to --
see, there was a lot of dumb things done. Both Nir and
Ollie North told Ghorbanifar

change .

Q I get you.

^^^^^^^^^^^^^^^^^^^^dll we can do is ask
him and use a little bit of influer.ce, we don't control
them. Then all at once, there is no problem in getting
hostages released.

In fact, that came to be one of the reasons

that the trip was okay,

:he Iranians can arrange for the release of

the hostages.

Q Did you articulate to anybody your concern^

./ere a set-up for you

lou are talking

hindsight now. Well, this is a good indication that they

618

MISKt^

are going to be released, that we can get them released.

Q Did you have an understanding as of this meeting
or approximately this time about how much money -- putting
aside how it was going to be financed, and all that stuff,
how much money the Iranians were going to be charged for
the spare parts?

A No indication whatsoever.

Q That was something, I take it, though, that you
could have just asked North how much it was going to be?

A I never asked him. In fact, the only thing we
ever discussed with North is what it was going to cost '
him. In other words, what it was going to cost us to
release the -- to ship the parts.

Q And I take it by that you mean how much -- what
is the cost price, what is the price the CIA --

A The cost, what transportation we had to provide,
packaging, stuff like that.

Q You never discussed with Colonel North how much
the price he was going to charge Ghorbanifar or how much
he was going to charge the Iranians?

A No.

Q Was it your understanding he was setting the
price?

Yes. Because we gave it to him. He was the one

619

Di^ASStPiyT

1
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that conveyed the price to whoever he conveyed it to.
Probably Nir, I would assume.

that indicated that the price was around $22 million?

A Yes, but that didn't cor.e until the 7th of
.May .

Q Okay.

A That was the first alarm that I had.

Q Okay. All right. You are right. I am looking
at the wrong note. That was around the 7th of May. That
was after the next meeting?

A I didn't see that until I got back from --

I didn't

see that until I got back from the London meetings in
May. The London meetings were the 7th through 10th,
8 through 10 May.

Q Let me -- before we get up to the meeting which

MMsmu

620

»rj«^ri

I think took place around May 6th?

A Something like that. It was the end of the first
week in May.

Q Let me ]ust sort of fill in the rest of April.
What did you do? What occurred with regard to this during
April of 1986? No additional meetings I take it took place
during that time?

A No. But we had had the final -- in other words,
this shipment was going to be picked up at I

It would include the total price was going to be
over 56 million. It would include not only the Hawk spares
that were available, that we could get, but also the 508'
TOWs which would be dropped off in Israel. That was the --
there is a lot of confusion in the record over this. I
recall when you were over interviewing me, one of the
gentlemen from the Senate kept talking about $4 million.
That's an incorrect figure because the figure was over
$6 million that we passed on to Colonel North.

Q Around $4 million was the price just for the
Hawk parts?

A For the Hawks. There is a real lot of confusion
on who the hell paid for the Hawj^s .

Q Do you know who paid for the Hawks?

A I haven't the slightest idea. What complicates
the confusion is if you go up to our meeting with

jmiSSiFM^

621

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Mmw

1 Furmark on the 22nd of October, when he's talking about,

2 he says the price was S15 million. Did that include the

3 Hawks? Because at the same time he also says, we are

4 talking -- if you recall, it was S15 million is what

5 Ghorbanifar and Khashoggi raised to pay for the shipment.

6 They added S3 million on to that to pay for their expenses

7 and profits and another 2 million bucks for Nir. What
that S2 million was for, God only knows. They owed Nir.

9 So they owed Nir.

The price to Colonel North was over 6 million.
It was about 6.3 million.

Q Because it included more than just the spare
^3 parts?

A Yes.

Q Did you know that that was how much money
Colonel North was being charged? When I say Colonel North,
I mean how much money the CIA had to receive before it
would —

A Yes. I knew the exact figure the CIA had to

receive. Yes.

Q That became clear then during the course of

April?

A Yes. By the —

Q By the London meeting that was clear?

A Yes. A couple of weeks before that.

622

mmw

Q Was availability pretty much established by that
time, too?

A Actually more parts became available after the
3 April meeting, because they are being continually
manufactured.

Q Now —

A The military agreed to give up more.

Q Let me just get this McFarlane meeting in
here. I have now forgotten when you told me. Has that
taken place by the time of the London meeting or does that
take place after the London meeting?

A I think it took place before the London meetiog.

Q Assuming that is right, why don't you tell me
what you remember about the meeting with McFarlane?

A The meeting with McFarlane was basically --
we didn't talk much about the nuts and bolts. It was
basically to give him our best estimate of what was going
on in Teheran and I gave him some idea of what I thought
the risk factor was as far as we were concerned.

We also took a very recent NIE, National
Intelligence Estimate, and we were -- there were a couple
of other things for him to read.

Q Where was it?

A At his office downtown.

Q At his office — not in the White House?

imis:yM£jL.

623

4
5
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fumsm

A No. He was out by then.

Q That's what I thought.

A Nineteenth and K. He had an office, a suite
of offices .

Q It was you. Colonel North?
Mo .^^^^^H|^Bmyself ,

Q Not Colonel North?

A NO.

Q was there a reason Colonel North did not attend?

A I don't know. He might not have been in the
country at that time.

Q How was it that you happened to have the

meeting?

A During one of our many meetings with Colonel
North, he proposed that we give McFarlane a brief on the
current •ituation in Teheran, bring him up to date. And
we called and made an appointment.

Q Had it been decided by the time of this meeting
that Mr. McFarlane might be one of the people who attend
the Teheran meeting?

A Yes. By that time it had been decided he would

head the delegation.

Q It had been decided?

A Yes. It was going to be a three-man delegation.

O Who was that to be?

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A McFarlane, North, and myself.

Q There comes a time when Howard Teicher is
added to the list?

A McFarlane added him?

0 McFarlane added him?

A Yes.

Q Do you recall when that was?

A It was shortly before we went, because when —
after — immediately after we returned from London, it
was just going to be the three of us.

Q Let me ask you about the London meeting then
which records seem to indicate took place around May 6t"h.

A That's correct. Sixth and 7th.

Q Who attended the meeting?

A It was myself, Colonel North, Nir, and
Ghorbanifar.

Q Was — okay. And was — and how long were the
meetings? Did they take place on both days?

A I think we only had really one significant
meeting and that was on the 7th. Because that was the
day that Ghorbanifar told us that he had arranged for
the financing.

Q Where did the meeting take place? At the
Churchill?

A Yes. His suite in the Churchill.

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Q Tell me about it. I understand there was a long
discussion of financing and he raised the money. Tell me
what you recall about those discussions?

A Hell, what became cl^ to me at that discussion
is that he had raised the money and was in the process of
transferring it to an account controlled by General Nir

:t1^ure.
irsation.

and the other asides in the conversation indicated that
the deposit to our account, that is ^M CZA ^octtlfg^
wou£|^0~lHMIe by~G3fi«^l Secord — from an account
contrj^^d ^X)^JS^

^ Ail wMBei£|r# jpfl^antjl^siot^ if yoii^ fSciOl,
about^.«aeont»,of aone^^? - Okwlously you.Jkii||^2^1** anount

and I don't think I Itneti. th«' — I got
As I reca£^r~that dida^ co— ^>t in

of iggUM.^b«t \\wAjm \m i|>iiostt]lB iafn ^f^ acc<

A No. I don't recall. The only think that I

recall is Ghorbanifar 's claims that he was going to pay
20 percent interest on the money raised from the banks,
by his bankers. I don't recall him ever, in my presence,
saying how much it was that he raised.

Q Let me ask it this way: By this time you are

a little over two weeks to the Teheran trip. You have
been now sort of at three of the crucial meetings that
had taken place. At least in your hearing no one has
ever told Ghorbanifar how much money he's got to come

liwiiAM.jiT^^f'r J! nil

626

up with?

A I never found out how much or if North dealt
with Ghorbanifar.

Now, I would assume -- I don't want to assume --
I don't know who North, whether he told Ghorbanifar
directly or whether he told, gave the price to Nir.

Q Did you think that North might have been dealing
separately with Ghorbanifar over the telephone or times
when you were not present?

A He could have been.

Q You didn't have any idea?

A I would not know.

Q Was there any discussion of the 2 million to
Nir at that time?

A Oh, no.

Q During the course of this meeting?

A No.
- Q When you said it was an account controlled
by Nir, was it your understanding that that was an
Israeli account or a Nir personal account?

A I didn't know. It was an account he controlled.

Q Okay .

A A Swiss account.

Q So I take it by this time you had a general
understanding that the money would go from Ghorbanifar to

UiUSSISSL

627

tnoe/fieggfiT

1
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Nir to Secord to the CIA?

A Well, I don't know if it went from Nir to
Secord, if there was any intervening bus stops between the
two.

Q You knew it was going to go from Ghorbanifar
to Nir and from Secord to the CIA and you figured in some
fashion it was getting betwe«B~ Nir and SecqMrd but you
didn't know what was going to happen in between?

A I have no positive information of how that
would take place.

Q Right. Let me just focus once again. By this
time, who was going on to the meeting on the American
side had become pretty fixed, I guess, although Teicher
was added later on . Who did you understand at that
meeting you would meet with when you arrived in Teheran?

A By this time, we had an excellent -- Ghorbanifar
told us we would meet with the Prime Minister, Musavi;
we would be MeCmg with Rafsanjani; he said -- and also
the ^Pres^ent , Khameini .

He also thought there was a possibility we
might meet with Ahmed Khomeini, the Imeun's son, and
also with Ayatollah Farsi, who was one of the leaders
of the conservative faction.

Q Did you believe as of that meeting that you
would be actually meeting with those people or were you

\mA^

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628

still skeptical? You personally?

A I had a fair amount of skepticism, because of
Ghorbanifar ' s track record with us. But I presumed the
Iranians -- by that time, we determined it wasi

would not have said this,
or would not have conveyed this unless -- although there
is nothing reallyl

[- that would say we would see some senior

people .

He them ^^^^^^^^^^^^^^H as

I recall. I thought it was worth the risk.

Q Again let me just ask you as of this meeting, .
what did you understand the sequence of delivery of
yourselves, parts, as opposed to when the hostages were
going to come out?

A This is my first discussion withi
in London. I talked to him on the phone. We run into
our first major snag and^^^^^^^^is insisting we bring
all of the Hawk spares with us. I told him we can't
do that.

And we haggled, typical, like you are buying a
rug. Finally, I said. Okay, we will bring a small partion,
what we can carry with us on the one plane, given the

fuel, which would be about one p«lXit>^~ Hc^g^ed.

* -■»•
Q ^''4P3V' 1^* 'M'^''^!'"*^i"^^*°^"^ what would

r»rTi

629

WBBissroT

happen when you and the one pallet would arrive, that they
would all be released?

A That they would make an effort to release all
the hostages. And while we were there, the rest of it
would arrive.

Q The remaining three pallets?

A Three pallets.

Q And — okay. But at least there was an
understanding that at least the first pallet would arrive
along with the delegation before the release?

A We would be bringing a small amount of the
spares with us on the plane. That was clearly under-
stood.

Q It was not understood, then, or at least --
it was clear to you that you hadn't presumed to bring
half of them?

A Oh, no. No.

Q Did you talk -- and you spoke at that time
directly witt

A Withl

Q Did you speak to him on more than one
occasion?

A After that, I think I did speak to him.

Q I really meant at that meeting?

A Oh. No. Only once . ^ OnJ.vc one conversation.

8.:-t::2 0C..9

630

Q Did you have any discussion with him in that
phone conversation about price?

A No. But -- but on that same day is when
Ghorbanifar gave him the initial price|

Q Tell me how that happened?
A H€

jthe price of the Hawjj spares, I think it was

something like S20-1/2 million.

Q Before we get to that, let me make sure I have
asked everything I wanted to ask about the meeting
itself.

Just one more question. Had the pre-meeting
been canned by this time? What was the status of whether
or not there should be a pre-meeting involved?

A Oh, that had been canned in April, by the end
of April.

Q So you would not agree — this was essentially
the pre-meeting?

mmm

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631

iaiHSIfiSfT

Q The -- let me ask it this way: Although you
were not 100 percent positive, I take it, my recollection
is the 240 and the 22 — 20.2 million,
they look pretty linkedl

A Yes. Also, there were two things. Are the
Iranians paying for the Israeli TOWs again? Because,
you know, that is -- if you take the total -- I think it
was S6 . 3 million, 6.4 million for the TOWs and Hawks.
That figure, I think it was 21-1/2, wasn't it? Something

IS!3USS2£?

632

like that?

Q I think --

A Twenty and a half.

Q That's three times six.

A Six point four, 6.5. That's about three times
the price we gave to Colonel North.

1 e a s t ^^^^^^^^^^^^^^^^^^^^^^^1 y o u
were concerned that there had been a fairly hefty
increase in the price, although you may not have been
100 percent certain it was because of these other deals?

A Yes.

Q Did you -- who did you talk to? What did you^.
do?

to^^^^^^^^H He
may have also brought iwap with Ollie. I think Ollie
said he would check -- talk to Nir about it.

Q Let's take these one at a time. What did you
and ^^^^^^^^^^^- what was the discussion you and
Ihad about it?

A Well, it was the same thing I said to you,
that this seems like a rather large mark-up.

Q How did he respond?

A He agreed. And I think even -- Colonel North
was alarmed, too. We didn't want this thing falling

through because someone is making exorbitant profits.

633

rii

Q Do you recall how you talked to Colonel North
about it? Did you talk to him over a secure phone, at a
meeting?

A I don't recall whether it was at one o£ the
meetings ve had or not. But: .«v were very concerned. Then
that was fortified when we got to TehAran.

Q Than is it nur o^Krstaiiding Colonal North
then contacted Nir?

A I can't — I don't know, in fact, whether he
did or not.

Q But did Colonel North —

A We never got a real answer on what transpired^,
prior to the trip to Teharan, as far as I can recall.
Why the price was so high.

Q Were you —

A Oh, one other thing I might add. While we were
in London, as I recall Ghorbanifar said that he has
already spent just on this specific thing $350,000 of
his own money and that he had already on this overture,

this operation engaged in, he had spent over a million

(
dollars of his own money.

Q Over the total overture?

A Yes.

Q Have you

ire you becoming -- are there any bells

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634

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going off about where this overcharge might be going?

A Well, yes, because you know we hadi

[the intelligence on the fact Ghorbanifar
had been arrested. Because of the dates we assumed -^^H

:hat he and Khashoggi
had been trying to raise S50 million. We said, That's
not for us. They could well have been involved in
financing the sting operation because they were close
associates of Cyrus Hashemi.

That was the first bell that rung. The other
thing is Ghorbanifar just trying to maXe a lot of money.

Q There were no bells going off that maybe
money was going to Central America, though, I take it?

A No.

Q By this time, did you know that Colonel North —
I asked you as of March.

A By this time I knew that you cannot be around
Colonel North very long without learning a lot about the
contras. He was very proud of the private effort to keep
the supply lines open to the contras.

0 This is probably as good a time as any to ask
you what he told you about that .

A Not so much in specifics, except that he was
proud of the fact he was able to keep a force of contras
in — you know, that he had played a role in the effort

"";Q'

«>^%Mfc4^m

635

ieasafiEF

of raising private money from private individuals to keep
the contras supplied for the two years that there was no
official funds available.

Q Did he ever talk about his -- about his
logistics support, about establishing resupply operations
to keep the munitions?

A Not any of the specifics. He never mentioned
an airfield here, or anything like that.

Now, the only way -- and I found out about
it -- I knew he was involved, for instance, when the
plane went down. I saw it on German television first
and called him. I said -- I don't know if this has
anything to do with you, but there's a plane that's been
shot down in Nicaragua.

Q What did he say?

A He said, yes, it was. Then he got -- then he --

Q You were in Frankfurt at that time?

A Yes. Frankfurt.

Q Did he -- was it clear to you that he was
involved in military resupply of the contras?

A I didn't know what kind of supply it was at
the time. Whatever knowledge -- I and my wife were --
see, my wife and I went on vacation, a misguided vacation
the end of September. We got to spend about three or
four days in Rome and got called in^^^^^^^^^^^^^Hand

lH?Wii«fulfiblrfn

636

\mm

told to go to Germany. We have German grandchildren
anyway.

We were sitting in the room getting ready for
dinner when I saw on German television that a plane had
been shot down, a C-123. I called him and said, I don't
know if it has anything to do with you or not, but there's
a C-123 shot down over Nicaragua. He confirmed, yes, it
was .

Q He indicated it did have something to do with
him?

A He said he thought it was one that might have
been one that he was involved with. He wasn't sure at
that time actually.

637

iiu il

Q Did he ever mention Project Democracy to you?
Did he ever mention it by that name?

A Yes, he referred to Project Democracy.

Q What did he —

A The first — the way it came up is the airplane
that took us in — not took us in, but flew us from Dulles
tr;^^^^^^^^^- was Democracy Airlines or something to do with
Project Democracy. That is the first time I ever heard
about it.

Q And is that what it said on it?

A No, it didn't say much of anything.

Q He told you it was one of his Project Democracy
airplanes?

A He said this is Democracy Airlines. He just
laughed. That was all.

Q Let me get back — did you discuss with — there is
one other person I didn't ask you about. Did you discuss
with Charley Allen^^^^^^^^^^^H take it you probably
did.

A Oh, yes. Charley and I used to discus:

Vti^.j^a^s ^ikely that was tt

638

'Sifi^T

amount Ghorbanifar was charging for the 240, but you couldn't
really tell for sure?

A The problem you get into with Ghorba -- he was
involved with so many arms deals with them

iifferent deals, but even that seemed to us that the
amount he was asking did in some way -- did include --
we knew it did include the Hawk spares.

If that was all it was for. That was an awful lot
of money.

Q Did that cause you any operational security
concerns about your trip to Tehran? Did you have any concern
that that price was going to cause you a problem?

A My concern was the egregious overcharging, that it
could queer the whole deal with the Iranians.

Q And it might queer it with you sitting in Tehran?

A Yes. I wasn't that much worried about that.

Q You were not?

A No, because the Iraniaas realized they were dealing
with Ghorbanifar.

Q Meaning that they also knew that there could be
overcharges and it might not be that much surprising to

them?

S^^lrti

639

A Yes. I had a lot of private discussions with the
Iranian side in Tehran over there.

Q Let me get to the preparations for the trip to
Tehran.

Generally, what kind of logistical preparations were
there involved? You must have had to get passports, arrange
for the flights, clearanaces, all sorts of stuff.

A Actually, I didn't have to do much of anything.
We had people that took care of that. I took charge of the
passports. I carried all the^^^^^^^Hpassports with me.
There were other things I had to do that I was

Q Did —

A Incidentally, that was one of the key reasons why
a decision was made to leave, is because

[did not -give any indication that there was any
motion on the hostages.

Q This is —

A while we were in Tehran.

Q Let me ask you, at this time, did you know

r'Pt'q*

640

General Secord was going to have a role in providing
airplanes and getting you from one point to the other?

A By the time we went to London, I knew that.

Q Could you describe ]ust your flight path from the
time you leave Washington, what airlines is involved, until
the time you arrive in Tehran?

A I forget the exact date it was we left. We left
Dulles and we flew via Executive Jet, stopped at
to refuel, and went on tol

Q Who is on that plane?

A McFarlane, myself, Howie Teicher, and the two CIA
communicators.

Then we get ^°^^^^^^H ^^ rest on the ground
there because of the clearances they have and the time that
we have to arrive in Israel.

Then we take our proprietary f ron^^^^^^^^to
Tel Aviv. On that flight are the two communicators, myself,
McFarlane, and Howie Teicher.

Q Okay.

A We arrive at the crack of dawn in Tel Aviv. We
are met by two -- by Colonel North and two Israeli^s from
Nir's office who get us through everything and into a hotel
room without having to check in, etc., etc.

We work during that day about setting up a commo
base in the hotejl and resting. We have dinner in the

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641

2
3

evening and then take off for Tehran. The flight route
from Tehran, of course, is all the way down the Red Sea,
around Socotra, the Gulf of Oman, and make landfall at
Bandar Abbas. That is on an Israeli aircraft, an
Israeli 707. That was McFarlane, myself, Howie Teicher,
Colonel North, Nir, and one communicator.

Q And then you arrive where?

A At Mehrabad airport.

You arrive there on the morning of the 25th?

I believe it was the morning of the 25th; that is

A
correct.

Q Did you -- just to cover this -- see General
Secord in Tel Aviv?

A Yes.

Q What was he doing in Tel Aviv?

A He was in -- he was at the hotel when we
arrived. He introduced us to the air crew he had arranged.
They left. We had a brief meeting on how things would work
out. He was sort of going to be our man in Tel Aviv while
we were in Tehran and would interface with our communicator
there.

0 Did you ask the reason they were using General
Secord as opposed to a CIA man or somebody affiliated with
the government?

A This was always considered to be a NSC operation.

642

2
3

The only conclusion that I can arrive at is that Ollie North
relied very heavily on Dick Secord. They were very close
friends.

Q Did you have an understanding of what Secord ' s
job was or what he was doing for a living, whether he was
getting paid out of this, just what his role was? He was
retired by this time.

A Oh, yes. He was retired and I went under the
assumption he was doing some sort of -- he was a consultant
of some sort for the NSC for Ollie.

By the time we went to Tehran, I was pretty sure
that he was heavily involved in the private financing of the
effort to get support for the contras.

Q You were aware General Secord was?

A Yes.

Q What did you think that entailed as of that time?

A I had no idea what the details were and wasn't
concerned. We didn't really — I didn't see very much
of —

Q Of Secord?

A -- of Secord.

Q Did you have an understanding he was involved in
sort of the mechanics down in Central America as well as the
private fundraising?

643

iiRoa^^T

1 I assumed that he was involved in the -- had some role in the

2 raising of the funds and also in arranging for shipment.

3 Q Did —

4 A I couldn't give you any -- I have no idea of what

5 the details were.

6 Q Did he strike you as Ollie's commander in the field

7 down in Central America? Was that the relationship?

8 A No. I never got that idea. I know that he was

9 heavily involved in getting air crews.

10 Q For Central America?

11 A Yes.

12 Q By this time, had you heard of the account LaJce

13 Resources?

14 A The what? No.

15 Q You had not?

16 A I never heard of Lake — the account for Lake

17 Resources until after all this in the press.

18 Q Let me show you some CI IN 164 so we don't have to

19 pick your brain too much about the trip.

20 A This is my account of it.

21 Q Instead of asking you to review everything about

22 that trip, I take it this account is a fairly complete

23 recollection of what happened?

24 A Well, part -- when we were in Tehran, I did an

25 awful lot of translating. When you are translating, you

iiibnouirikir^

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1
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don't really recall well, because you are concentrating on
translating. So, this is not really a complete account.
This is what I can recall of the discussions I was involved
in really when I wasn't concentrating on all the translating.

Some of the times Ghorbanifar -- you can't -- after
a couple of hours, you get groggy. Ghorbanifar would then
translate.

Q Let me ask it this way: is this about as much as

you recall today about those —

A More.

Q Probably more?

A Yes.

Q Okay.

Before I get into the questions about the trip,
had Hakim resurfaced by this time as someone who was
involved in this at all?

A Whatever involvement he had, I knew nothing at this
time other than the two phone calls.

Q The two --

A And the fact he had been used as a translator.
In fact, I thought ^)j was pretty much out of it.

Q You did?

A Because one of the reasons they wanted a U.S.
citizen as translator —

Q One of the reasons for you getting involved was to

645

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get --

A To get the Iranians out of it.

0 Was there an attempt then -- were those phone
calls Hakim placed part of an attempt to remove Ghorbanifar
from the operation? Was that the purpose behind it?

A I think — I don't know why the calls were made.
I was only given — to translate them. You can surmise from
what transpires in them that it was an attempt to go -- that
is apart from the Ghorbanifar channel to try to convince —
through another channel to convince the Iranians that we were
sincere and would do what we said we would do by Ghorbanifar.
Q Let me ask one last question before I get intQ the

guts of it here.

Had the date that you all would be traveling to
Tehran — how far in advance of the time you actually arrived
had that date been set up, if you recall?

When I say "set u Ay I mean set up with Ghorbanifar
A This kept changing on a daily basis, because we
couldn't set the date until we got the deposit in the CIA

account .

I think that was on the 16th of May.

Q I think that is right.

A Then we were able — we figured we needed about
a week. Then we were able to set the precise date that we
would arrive.

\\\m AC

'tlT^

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magi 0

Q Is It your recollection that Ghorbanifar then was
contacted shortly after the 16th to say we would be there
around the 25th or whenever?

A Yes, because he determined his departure on ours.
He was in Tehran when we arrived.

Q It was not your impression, though, that you had
only recently told him of when you were going to be arrived
in Tehran? It was not a hurry-up trip?

A Oh, no. We had told him. He was well aware that
until we got the money in our account, we could not give any
precise dates, but that as soon as we got it in our
account, we could.

Someone called him. I don't know whether it was
Charley -- to tell him, "Okay, we will be coming."

Q It was also clear to him it would take about a
week to ten days after the money was deposited?

A We said seven or eight working days, because it
would take us that much to get the ship to get the material
in place in Israel.

Q Do I take it that you got about -- that on the

plane that arrived, you said you took one of four pallets.

You 9^0^ about 25 percent of the parts with you on the
A

plane?

A It was actually less than that. We took the small

pallet.

SlWs!^ii.m

647

1 Q Let me just ask you some specific questions about

2 the meetings, because for the rest of it we can pretty much

3 rely on that for your recollection.

4 When you first arrived -- and as I understand from

5 reading that, there is some delay before anyone actually come!

6 out to meet you, which must have surprised everyone -- at

7 what point do you realize the hostages are not about to be

8 released, despite the fact that the delegation and the parts

9 have arrived?

10 A Our initial meeting that afternoon -- because the

11 Iranians tell us about the enormous problems they are having

12 and they go through a long list of conditions that the

13 captors have placed on the release of the hostages, and it

14 it also pretty clear to me at this point the Iranians

15 don't have control of the hostages and are going to have
•J5 considerable difficulty getting control of them.

■J7 Some things were pretty bleak. The Iranians were

18 kind of hostile. In fact, the guy that they brought who was

19 sort of their spokesman, whom we never have identified to

20 this day, was really pretty negative.

21 So, the American delegation was — we were pretty

22 bleak after the first da^, the first afternoon's meeting.

23 But things warmed up after that.

24 What came out of all the discussions was that the

25 Iranians were pretty sure that they^ould get two hostages

648

magl2

released, using their influences, and they were very anxious
that they would consider the deal for two hostages and the
H^j^ spares, and then they would work on getting the other
two, and then any other subsequent shipments would be based
on their being able to release the other two.

But at the same time, they wanted to continue the
dialogue.

One of the bases for us packing up and going was
that McFarlane had given an ultimatuqi^ It w^ e*rly in the
morning_af_the day-aie lft£t* say^ag — they had asked — the
head of the Iranian delegation asked if we can get two
released, we think we can, will you give us some time, and
so he only gave them until -- I think it was 7:00 o'clock
the following morning, because we had gotten the message that
there were no -- there was no indication]

that there was any motion on the
hostage issue in Lebanon.

The following morning, when no one showed up,
including Ghorbanifar -- funny thing -- we decided to leave.

land the Rev Guard guy showed up, and we told them
we were leaving.

We packed up everything and marched out of the
hotel room. He arranged for cars. They took us --
fortunately, about 2:00 in the morning they started refueling
th€ aircraft.

UmASIIiiiAp

649

So, we were able to take off. But I was the last
one on the plane. I talked to the two Iranians. They said
that they really weren't prepared for us.

Why, after all that had gone on -- I don't know
whether you can blame it on Ghorbanifar or what. One of the
things that came out during the meeting, they showed me all
kinds of documentation from Ghorbanifar. He was lying
to both sides. He had painted this to the Iranians as the
beginning of a long-standing -- a new arms relationship with
the United States that included PHC^r/yx/missiles, aereal
cameras, spare parts for the helicopters, si]ff^f.ittf.fi- missiles
large number of TOWs, 20 radars, a lot of other things.

Q Have you read this morning's Washington Post?

A Yes.

Q Did you read the story on page 1 about Colonel
North?

Yes, I did.

Just so the record is clear, the story reports,
as I recall now, that Colonel North early in the morning
of the day you left struck his own deal with Ghorbanifar,
ordered the planes to arrive with the rest of the parts, and
that he either woke up or when McFarlane woke up. North
told McFarlane what he had done, and McFarlane countermanded
his order and said that they wouldn't do that.

Is th^e.,^ijfl||tmith .to that f^ory?

re^aoMitiiLith .to that Cko

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A Not that I know of. The plane never left the
ground .

Q So you think that story is not true?

A Not true. It sounds like part of what -- see,
the deal that we -- as I was just telling you — and
McFarlane had been briefed on it, too. He agreed, yes,
if he can get two out, okay.

And also, Ghorbanifar and I were involved in
writing the seven-point -- you probably have a copy of it
somewhere. I can't recall them offhand — the seven points.
We translated that into Farsi. That was sort of the final
thing.

Q Let me just finally ask you about that conversation
or the meetings that you had.

There comes a time, as I understand it, during
the course of those meetings when Ghorbanifar makes
reference to you about the price of the parts.

A Oh, yes.

Q Do you recall —

A This is very interesting. Why, he approached —
Ghorbanifar said to me, "I want to talk to you." We went
out in the hall, because he knew the rooms were bugged.
He said, "They are going to ask you about the pricing, and
the pricing -- the price is going to be $24.5 million."
He says, "It is all right. Tell th^rp^t is all right.

imn

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because it includes other things, other expenses that came
up during the course of this, and there is other material
in there. You have to say it is okay."

So, I immediately talked to North. I said, "What
is this on the $24.5 million?"

He was shocked. So, we called Nir. And we had a
three-way conversation in which Nir said, "Look, they owe for
other things." We went through a long song and dance about
all the expenses Ghorbanifar had up to this. In fact, he
had to pay a large amount of bribes to a whole raft of
people and that there was no monkey business) the $24.5
million was the correct price.
So, we stuck with it.
Q Did they ever — did the Iranians ever ask you
about the price?
A Yes.

Q What did they -- how did that conversation come
up? What is it that they said to you and what did you
respond?

A I basically said, "You know, I am not really --
I don't know anything. I am not a military man. I don't
know anything about the logistics, the pricing of these
things. You have to talk to the businessmen."

Q What was the question they asked you? How much

,5 million?

this going to be o': f-j^^ AS ^^. f h"

652

magi 6

WJt

A Yes. It was -- is this accurate?

I said, basically, "I assume it is. We can't sell
you these things direct. We have to sell them to the — the
military sells them to the middlemen at commercial prices."

They didn't raise any big stink at that time. The
thing that they did raise is that the head, the senior
Iranian, got me aside and showed me letters Ghorbanifar
had written, giving them all this stuff that we had never
heard about. We only have a copy of one letter and that
we got from Nir on a letter Ghorbanifar wrote on the 8th of
July, after the fact, in which he made all kinds of
ridiculous promises to them.

But there were three separate letters which I
thought we had copies of. But I could never find the damned
things. They were very interesting, because they — it is
clear Ghorbanifar was telling the Iranian side one thing and
us another. Ghorbanifar was presenting it to them as a big
deal about what the American side was prepared to do.

Q The $24 million figure -- whatever the figure
was —

A Twenty-four and a half.

Q Twenty-four and a half? What was it your
understanding that that included as of that time? Just the
Hawk parts?

A I don't know.

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mag 1 7

Pffil^ffRifiT

3 9

The way Nir said, he said, "Hey, look, that
includes other things. They owe him for other arms
shipments he is involved m. He is trying to bring all the;
accounts up square. It is an accurate figure."

He was voviching for Ghorbanifar. He said, "It
also includes bribes that he was forced to pay."

Q Did you have any further discussion with Colonel
North about this figure? Is is now -- this figure is

getting to be pretty close ^^

^^^^^^^^^^^^^^^^^ There was this
conversation.

Was there any further conversation with North' about
this figure of 524 million? What is going on here? This
is going to be a real problem if we are going to charge this
much money?

A One of the things we decided is that the thrust
of the conversation was that Ghorbanifar was knocking down
an awful lot on the deal.

One of the things that was considered -- I don't
know whether we talked about this in Tehran or later -- is
if we do any other deals with Ghorbanifar, we tell him
precisely what he can charge -- you know, a reasonable
profit — and tell the Iranians the same thing.

Q This was a conversation between you and North?

Yes, subsequent to that.

654

mag 18

BRttP^ffiBT

Q Was —

A I don't know whether we talked about this in Tehran
or right after. I can't recall.

Q Let me make sure that is everything I wanted to
ask you about the Iran trip.

MR. PEARLINE: Could we take a couple minutes
break?

MR. EGGLESTON: We are going to have to have
lunch at some point, because I am not about to end.

What I was going to do is get you back — we can
go off the record.

(Discussion off the record.)

MR. EGGLESTON: We can go back on the record.
BY MR. EGGLESTON:
Q Mr. Cave, have you read the Tower Commission report
A Yes, part of it.

Q There is a reference in the Tower Commission report
to Colonel North on the tarmac telling Bud McFarlane about
the diversion of money to the Central American contras.

Do you recall that in the Tower Commission report?
A I recall it in the report.

Q I was going to ask you did Colonel North say
anything like that to you.
A No.
Q And I take it you did not overhear Colonel North

655

BJJStfS

say that to McFarlane on the tarmac in the Tehran airport?

A No.

Q then you leave Tehran in the early morning hours --
I guess It turned out not to be the early morning hours,
on the morning of May 28?

A It was about 9:00, 9:30 by the time we took off.

Q How long did it take you to get back to the United
States?

A It is a long flight. We didn't get back until the
evening, early evening, because it was an 11-hour flight,
ten and a half hour flight.

The communicator and McFarlane and Teicher and
North immediately went over and boarded a Lear ]et that
Secord arranged for them, so they could fly directly back
to the United States. — *«

I havSTdegenerative spinal disease^, so I decided
to stay a night in Tel Aviv. So, I had dinner that night witli
Nir and his wife and then flew back the next morning.

Q Did you have any more discussion with Nir during
that dinner about this financing problem?

A No, because his wife was not aware of anything.

Q Was she aware he had gone off to Tehran?

A No.

Q Are you married?

A Yes.

' PV^^^^K^E^^S ■^^Wt'^"^*^ ^EB^^^^^»^

656

Q Was your wife aware you had gone off to Tehran?

A No.

Q And how long -- you arrived back in approximately
24 hours later?

A Yes. I got the TWA flight out of Tel Aviv the
next morning.

Q And when you arrived back, how long is it after you
get back before you report in to the office or wherever to
brief somebody on what had happened on the trip?

A It was -- I don't know if it was the next day or th<
day after. I came in and saw Casey, gave him a rundown
on what had transpired. I talked to a couple other
people.

Q Did you brief anyone at the NSC about your
impressions of the trip? I assume you had conversations with
North. Did you ever brief Poindexter?

A We had a meeting w^h Poindexter some time after
that. It was just a where-do-we-go-from-here type of
thing .

Q Did you ever brief the President?

A I did not see the President until November 24 at
the NSPG meeting.

Q November 24, 1986?

A Yes. .. .^ --^ -^

Had you met with Poindexter prior to the trip?

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mag 21

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A Yes.

Q On how many occasions?

A I met Poindexter before he came — before he
replaced McFarlane. It was to give him my impressions of the
Iranian exiles. It was completely different.

Then I think I saw him once before he went in.
There was one meeting.

Q Do you recall how much it was prior to the time thai

you went in to Tehran?

_ A It was shortly before we went in.

Q What was your impression of his view of the trip?
A He seemed to be a little bit concerned about the
security of everyone that was going in. So was Casey.
In fact, Casey told me at one point, "The decision to go in
IS yours." He asked me, he said, "Look, I want you to give
this serious consideration, because if you decide — and you
know better than anybody else — that there is a great deal
of risk in this, I will call up the President, and we will

cancel it."

I said, "No, I thought about it, and I think that
there is certainly some danger involved, but I think the
chances of us being really harmed there, of being in harm's
way, are not too great."

Q In your meeting with Director Casey after the trip
did you give him your conclusions about the trip, what had

mML^

658

mag22

been accomplished, where you should go from there?

A I was a little more upbeat than the rest of the
people on the trip. I was more upbeat not -- in hindsight,
It turns out they were looking at different things. I was
upbeat because the Iranians seemed sincerely interested in
maintaining a dialogue.

I told Casey it was my conclusion that no matter
what happened, we were only going to get two more hostages
out at the most. Two more, I think we can count on. Maybe
another one, a third one.

I thought if we kept this up, we could get two
more out, two hostages out, which is what we got.

Q Did you think -- did you give the conclusion that
you thought that you should continue with Ghorbanifar as
the intermediary?

A No. I thought we should definitely — I have
always been, of course, against Ghorbanifar as an
intermediary. Granted, other people had reservations that
to get rid of him may be more dangerous than to keep him.
He would certainly try to get even with us for querring a
good deal that he thought he had.

Q There is — after the meeting -- and this will
be the last question I ask before lunch -- after the
meeting there is a long -- after the meeting in Tehran there
is a long period of time before the hostages are released.

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Are there meetings during that time about whether or not to
close down the entire operation?

A I don't know about closing it down.

During this period, most of the action is under-
taken by Nir in concert with Ghorbanifar. That culminates
in our meeting in Frankfurt which precedes the release of
Jenco .

Q Has your contact with Ghorabanifar dropped off
substantially by this time?
A Yes.

What has happened is, you know, this is the period
when I get all these calls f rom^^^^^^Hromplaining about thi
pricing of the stuff.

Q Let me pick that up after lunch.

MR. EGGLESTON: We can go off the record.
(Discussion off the record.)

(Whereupon, at 12:20 p.m., the deposition was
recessed, to reconvene at 1:30 p.m. the same day.)

l''■•^^»^^

"';>

660

DKKtASSffiEl^

AFTERNOON SESSION

1:35 p.m.
Whereupon, GEORGE W. CAVE, having been previously
duly sworn, resume the witness stand and testified further
as follows:

THE REPORTER: You are still under oath,
Mr. Cave.

THE WITNESS. I figured that.
BY MR. EGGLESTON:
Q Mr. Cave, at the time we broke for lunch, we
had just finished the trip to Tehran in late May and the
immediate reaction to it and your meeting with Director
casey about it and the reactions and discussions with him.
The next thing I want to talk to you about is your
conversations that I think you had with^^^^^^^Hbeginning
really in June of 1986. I think some of those conversations
deal with pricing issues.

Maybe it would make it easier for you if I put CIIN
515 and — why don't I give you — I will start with 515.
A Okay .

Q Is this -- there is really, as I can tell, at
least from your memorandum, there doesn't appear to be --
the fight over the prices is not really discussed?

A This doesn't come up until later. This is
the 13 -- I think the first conversation where he complains

iM:ui££j:i£[L

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about the pricing is on the 20th, isn't it?

Q I don't know that I have a note of one on the
20th. That could well be.

A Yes. After the -- you have another one attached

to this.

Q Is that a different day?

A This was based on a speech. This is something
based on a speech Rafsanjani made.

Q Are those not connected items?

A They are not connected.

Q Why don't you ^ust rip them apart. Otherwise,
I will confuse myself.

A Let me ]ust say a brief word about this. After
we come back from Tehran, whatever movement there is is
between Nir, Ghorbanifar, and the Iranians in Tehran.
NOW when we refer to our friend, that is Ghorbanifar. It
IS quite apparent that^^^anted to talk directly with
me to see if there was any -- if it was really worth while
pursuing this. This is the first conversation.

Q That is what I was going to ask you. Is this
as best you recall the first conversation you have after

getting back?

A Yes. Because I think Ghorbanifar provided the

^^^^^^^^^^^^^^^^^^^^^^H And
phone numbers^^^^^^^^^^^^^^^^^^^^^^^^^^^^H

called him because I think -tb^.e-wrs » -- this was based

662

HOtUt^W'

1 on a request by^^^^^^H It was passed through by

on a request by

2 Ghorbanifar.

3 I had the one position that I had taken is before

4 we do anything else, we would want to have another talk

5 with the Iranians. I didn't think we should go ahead with

6 the deal until after we could talk with the Iranians.

7 Q By the Iranians, who are you referring to?

8 A In this case, we are referring tc^^^^^^^B Such

9 dialogue as would remain would remain via thej

10 ^^^^^^^H That is how we left it when we left Tehran.

11 Q This to me, 515, appears to be not — does not

12 represent much advancement over Tehran. It seems to be

13 substantially the same positions as they have set forth?

14 A Yes.

15 Q Had you at the Agency made decisions to continue

16 the contact even though no hostage had been released —

17 A I didn't do anything without coordinating it with
13 Colonel North. In other words, as far as we were

19 concerned, he was still the point man in the operation.

20 Q Let me just ask you how often did you meet with

21 the Director about this? Was he — and I don't know

22 exactly how to ask the question. Did you have fairly

23 regularfcf meetings with him personally about the project

24 and the progress of the project?

25 A Not so much during this period. There were a

MCL^lEltiL

663

mm^

ni4 1

couple of meetings. But once we had the meetings with
the new channel, I saw him very often.

Q But between the time you get involved in March
and the time of the new channel, the meetings are not very
often?

A No. There wasn't that many of them.

Q Is he generally supportive of this operation?

A Yes.

Q Is he enthusiastically supportive? I am asking
about the time before the second channel?

A Oh, yes. He wanted -- strongly believed we needed
some kind of strategic dialogue with Iran.

0 I take it -- this is getting way ahead -- I take
it from prior conversations with you that you were being
more enthusiastic once the second channel is established?

A Yes. Because we are talking to people then who,
it is quite obvious, they are going to -- that there are
responses and definite -- there are definite proposals made.
We got no -- despite irl the'h^jlin^ CRtf6^rad(Con in Tehran,
if you talk about definitive things the Iranian side was
going to do, it was very little.

Q The next document I have is 592 and -- I don't
know that you need to review it, but I just wonder if this
is the next converw^iOn that you had? It is a transcript
of a conversatioa* . Xi)S <^be ati "ttttf H%3 is June 17 of 1986.

•^isHMlL

664

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100

1
2

A Yes. This is a follow-up of the other one in
which based on instructions, after talking with North, I
kept -- adhered to the view that we would do everything
according to the program we wrote out in Tehran.

Q Let me ]ust get back to 515 for a second. I note
at the end you indicate once again that you have doubts that
the Iranians have control over the hostages at all.

A That is this one?

Q Actually it's the last several words of 515.

A Oh, yes. Because one of the things we had told
them before we left is if you want this deal to go through,
they better get control over some or all of the hostages.
From the way he talked when I brought this up in this
conversation, I sincerely doubted that he was telling me the
truth.

Q Did they — the Iranians — did they essentially
admit to you in Tehran that they did not have control over
the hostages?

A Yes.

Q That they could exert influence but didn't have
the ability to snap their fingers and order release?

A They had a person or persons over there with whom
they were in contact; and the way they put it to us is that
they thought that they could get — were pretty sure they
could get control over two, but it would be a very time

665

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101

consuming process. It was at the Tehran meeting where the
real problem with the captors emerged, i.e., the 17 Dawa
prisoners in Kuwait.

Q It was at the Tehran meeting when that became one
of the bargaining --

A Very clear. Realizing that we could go so far
and then nothing — nothing could happen with regard to the
hostages until the Dawa prisoners issue was cleared up.

Q The next memorandum I have of a conversation
that you had is number 516 and it refers to a conversation
on the 22nd of June. A moment ago you mentioned a conver-
sation on the 20th.

A It could be the date. I can take a look at it.
This is the first indication. This is why he is
urging me to contact the merchant. The merchant refers to
Ghorbanifar. To contact the merchant to get the deta.rls.

Q Is this then the first conversation where he begins
to express concern about the pricing?

A Well, I am talking about hindsight. That comes
out later. This is why he is saying contact the merchant

Q There is just one specific question I wanted to
ask you about this one. In paragraph 2 of this document,
which is again 516, it says "He pointed out that the
previous release of the one person returned for the
one thousand had not left them in good order as the one

iiIi£LI&i^^-i

666

102

m7 1 thousand were not that important and they had to return the

2 other materials."

3 What is he referring to, the one thousand?

4 A I assumed that he was referring to the one

5 thousand TOWs delivered in February.

6 Q Right.

7 A But that doesn't make sense. There is nothing

8 released for. The other things were the HAWK missiles

9 that the Israelis delivered in November that were all

10 returned.

11 Q I take it all the references to four million

12 and two million, those are referenced to the hostages?

13 A Yes.

14 Q But your understanding at the time was he was

15 talking, when he talked about the 1000, he was referring

16 to the TOWs?

17 A Referring to the TOWs.

18 Q That is what I assumed as well.

19 A But he may have been referring to the -- just

20 made a mistake in the number and meant the original

21 500 which precipitated the release of Weir. He may

22 have got the numbers wrong. He's not very bright.

23 Q He's not?

24 A No .

25 Q Is he the one whose breatlj^could curl —

lidliiitidL,

667

103

m8 ■

1 Alt was awful .

2 Q Was that him?

3 A Yes.

4 MR. WOODCOCK. For the record, it should be clear

5 that that is a reference to a breath that would curl a

6 rhino hide.

7 BY MR. EGGLESTON:

8 Q You indicated a couple of times, and I have not

9 asked you any follow-up questions that the people actively

10 engaged during this time was really not you and people at

11 the Agency but the people who were active were Ghorbanifar

12 and Nir?

13 A Oh, yes. During this period. They were the

14 ones really dealing with the Iranians.

15 Q How did you know they were doing that?

15 A Because there were calls from Ghorbanifar and Nir

17 and I think to both Charlie Allen and Colonel North and I

18 think North saw Nir at some point during this period.

19 Q I have been generally asking you about June of

20 1986. You think June or July?

21 A I can't remember when Nir saw the Vice President.

22 I don't know what that date was.

23 Q That was June 29th — excuse me, July 29th.

24 A July 29th. Leading up to all this is that Nir
« was working very hard with Ghorbanifar to keep this thing

■*--., M^ a m ;^ - " "^

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going .

Q Do you know who Nir was dealing with on the Iranian
just ^^^I^^^H

A But via Ghorbanifar.

Q I remember from the last time we talked that you
stated that after Ghorbanifar ' s arrest in late April he had
begun to have some financial problems and that the Iraelis
might have been helping him financially?

A Nir might have. That may have been what the
reference to the 52 million was in the 22nd of October
meeting with Furmark. I don't know. We suspected Nir
was involved financially with Ghorbanifar. For what reason -
purposes, I don't know.

Q Was he still financially -- he meaning now
Ghorbanifar — still financially hurting at this time through
the summer of 1986?

A Yes.

Q The next memorandum —

I think^HH^^H^I^^^^^^^^^f you
an enormous amount of complaints. Now they paid him at
some point in June, which he confirmed, 4 million bucks.

Q Four million?

A Yes. Then you get -- there is a conversation
between I anc^^^^^^^^Hon the 27th of August in which he
assures me they have settled .all,, theix outstanding accounts

669

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103

with Ghorbanifar.

Q Wd Jj LBb S4^lBillion that he was paid the money for
the HAWK parts that had been delivered in May?

A ^^^Hj^m^^^^'^ yes, but Ghorbanifar said no. He
said only $1 million of lit was for the HAWK spares and
$3 million for .another deal.

Q A deal unrelated to the United States?

A Unrelated, yes.

Q Did you ever decide who to believe in that one?

A No. Well, the Iranians were actually — one of

the sort of amusing things is both the new channel — they
told us they

so confused about all the deals that they

had negotiated with Ghorbanifar that even they... So based on
the separate meetings here in Washington, I urged them to
put some accountants onto it, which they did. They said they
had a team of accountants at, I think, the end of October
meeting they told us it was worked out.

Then the figures were given to us on 7 November
that, yes, they did owe Ghorbanifar another $10 million.
But the way they calculated, he also owed them an
additional thousand TOWs and they would be willing to
discuss it with him.

It was very interesting that Furroark proposed
letting him sell a thousand TOWs to the Iranians as a way of
getting out of ail of thjs^

670

Wi&li^ilpr

106

mil 1

Q Letting Ghorbanifar?

A Yes.

Q How was he going to. get the TOWs? From us?

A I guess.

Q My notes reflect there was

laround June 20th which indicated some very specific
prices with regard to the amount that the HAWK parts had
cost. Do you have any recollection of having seen that?

A That might refer to the Iranians got hold of these
Department of Defense microfiches which list prices but are
not really published for the purpose of price. They are
published to get the serial numbers and descriptions correct
for ordering them. I think that is what they are
referring to.

Arguing with Ghorbanifar, hey, look, according
to the Department of -- documents we got from the Department
of Defense the price of these items is only such and such
and you charged us six times as much.

Q Let me show you a memorandum of a call with

3n June 30. It is CIIN 517 which is a call where
there was a lengthy discussion about -- as you say —
"continued to harp on the price of 24 0 items."

Does he have the microfiche by the time of this
conversation?

A Yes. He kept insisting and I kept telling him

He kept insisting and I

DELASSIM,

671

ims»a&feT

107

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. 9

that we had to sell them to a middleman and he had to
deal with a middleman on the pricing". There was nothing
else I could say.

See, here I think this is the first time the
microfiche comes up in our conversations. No. It came
up once before. That is right. I said well, if you have
it, send it. And we eventually got it, but even much later
than this.

Q You eventually received his copy of the prices?

A Just part of it. Then we were able to identify -
what it was he was talking about.

Q Did you identify where the price list had come
from?

A Yes. It is the Defense Logistics Agency in
Battle Creek, Michigan. They print these things and send
them all over the world.

Q So it is not any kind of a secret item?

A No. At least, I can't — I wonder why they were
sent to Iran or how they got them. But actually they are
not — they are not specifically for pricing. There is a
cover sheet which says these are to be used primarily
because the pricing of any item is based on the replacement
cost to the U.S. military. Unless it is going to be
excessed.

Q There, ia /i_.Hf ice reij,e.gted ^n it?

672

108

Jl3 1
2
3
4
5
6
7
8
9

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

A Yes. I think — you know, it is very difficult
for me — the explanation that I got, which we tried to
later use with the new channel, was that the price was a
manufacturing price — the manufacturer's cost. Whether
that is true or not, I don't know.

Q I am sorry?

A The price on these microfiches was the manufac-
turer's cost.

Q How much after this conversation did you actually
receive the list, if you recall? This is late — last
day of June.

A Sometime in July.

Q Sometime in July?

A Yes.

Q This conversation, probably at least by now, you

are pretty yell focused.]

Iyou are focused the Iranians
believe they paid $24 million or so for these HAWK parts?

A Well, we don ' tt know — what is very clear is the
Iranians are clearly aware of the fact they are paying
a hell of a lot more than the listed price.

Q Did you -- what if anything did you do after —
by this time it seems to me — pardon me.

By this time I would suspect there is some
concern because they are really starting to get upset about

673

ml4 1

liflKJfiflHFT

109

the prices. There must have been some concern that the
prices are so high you had to start wondering whether or not
they are just going to kill the hostages as revenge for them
getting ripped off. You must have worried about operational
security, to use a term?

A There was a concern. I think at one point, in
one of those conversations, I asked that we discuss it when
we meet in Europe. I also talked to Colonel North
about it. But the basic position we took with them was that
he should haggle it out with Ghorbanifar since Ghorbanifar
was the man that actually sold the stuff to them. This
is one of the reasons why when we met with the new channel
that we did not deal via Ghorbanifar.

Q Did you and Colonel North ever go to Ghorbanifar
and say what in the world is going on? We gave you items
worth $6 million and we are now learning from everybody
under the sun that you charged $24 million? What
in the world is happening?

A No. Because the next time we see Ghorbanifar is
at the 27th of July meeting.

Q Is there any — let me ask at what level the
meetings got on this in the United States as your intelli-
gence and your information continues to develop?

A On this specific problem?

Q This

'^T^

2-692 0-88-23

674

SNffii^ffffiT

ml5 1

A It was just basically meetings with Colonel North,
I think ;^^^^^^^^H is involved. Because — and Charlie
Allen, because there was some concern what the Iranians
would do.

Q How concerned are you? I am really talking
now from here up to the meeting of July 27th? How concerned
are you that there might be some risk to the hostages as
a result of this dispute?

A Well, I don't —

Q Is it serious?

A I don't think there was a serious risk to the
hostages. The hostages were very valuable to the
captors.

Q You mean as opposed to the Iranians?

A Yes. So that I don't think they were going to
give them up; and the Iranians had other long-term goals
in mind in this, so that whatever the problem was on this,
I don't think they would allow that to deter them from their
long-term goals.

Q Let me, as I sort of keep going through things
here, ask you there are a series of meetings — I should
say two meetings on July 10th and 11th of 1986. The dates
are reflected on document 169 and 170. Are these your
notes?

A This _is„ mine, but I am trying to remember who it

675

ml6 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

111

was talking to.

Q Since it has been redacted --

A Ten July?

Q It looks like Hakim is there?

A Yes. I wonder if I wrote this. Sara is me.

Q That is what I assumed.

MR. PEARLINE: Can we go off the record?
(Discussion off the record.)
BY MR. EGGLESTON:
Q Let's go back on the record.

I will ask you so the record is clear, I have
showed you two documents, 169 and 170. Could you describe
what those two meetings were about?

A This is the beginning of our attempts to open up
a new channel. We had learned from business contacts of

that^^^^^^^^^^^H^^^^had been
contacted a close friend of this guy here saying that
Rafsanjani was interested in a discrete contact with the
Americans. For some reason, ^^^^^^^^^^^^also wanted to
contact Khashoggi. We never found out why. So what we

brought^^^^^^^H^Hjj^m-- they
name, don't they?

MR. PEARLINE: Yes.

THE WITNESS: ^^^^^^Hto the United States. We
talked to him on ^t^, l^th jawj Al,t^^ pimply .

676

BNtt^fflffiT

112

117 1

MR. LEON. Who is we?

THE WITNESS: I talked to him. I think -- I am
sure Colonel North met with him on one of these days.

But the -- he might have met with him separately
from me.

But at this meeting it was Albert Hakim and my-
self talking to him. And also on the 10th of July.
BY MR. EGGLESTON:
Q Okay.

A Colonel North did not panticipate in these two
meetings, but I think he met with him.

Q Was this the beginning of the second channel?
A This was the beginning of it because this man was
then instrumental in arranging the meeting in August
between ^^^^^^^^Hand General Secord in Brussels.
Q Thank you.

A I am sorry I didn't recognize them. I did that
on the computer. That is why the mistakes are corrected.
Q Not on your home typewriter?
A On my home computer.
Q I hope it was Tempest secure.

The following day on July 12, you have another
conversation — I don't know if you recall it — with

ll will hand this to you to refresh your recollec

tion. It is CIIN 518.

677

BNttfSSifSfiT

113

il8 1 A Oh, yes. I wish Charlie hadn't given him my

2 home phone number.

3 Q So he's calling you at home?

4 A Yes. Which made my wife extremely curious about

5 what the hell was going on. She knows some Persian. Yes.

6 Q I take it that this conversation was a continua-

7 tion of the complaints about the pricing as well as some

8 discussion of a need to get a hostage released before any-

9 thing was going to happen?

10 A Yes. This is a pretty blunt -- and it was

11 pretty clear at this time that they had not succeeded in

12 much at this point.

13 Q That who —

14 A The Iranians hadn't succeeded.

15 Q They hadn't gotten very far about getting a hostage

16 released?

17 A Yes.

18 Q Was it your impression they were working pretty '

19 hard to get one released? ^^^

20 A We didn't have any corroborating — there was no

inforTnatior^^H|H^^^^^^^^^^^^^^H but

22 we got from Nir and Ghorbanifar was that there was efforts

23 being made and in the conversations with^^^^^^H^ He

24 would always keep saying yes, we are trying, we are

25 trying.

mmm

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il9 1

Q The next indication of an event I have is
that on July 21st, you met with Nir. ¥ou must have gone
to London to meet with Nir, you and Oliver North?

A Okay. That is when that meeting was. Yes.

Q First, did anything happen between this conversa-
tion with^^^^^^^Kn July 12th and this meeting on July
21st in London? Do you have any recollection of any
significant events ?

A No.

Q Maybe you could just describe the meeting of
July 21st.

A This is the one -- this is -- what transpired- at
this meeting is Ollie and I flew over to see Nir. It
was one of those typical North trips where you g<»t off
the plane for six hours and are supposed to get back on
another one. I didn't. I again spent the night in London.
But what it was is so they could discuss the fact
that Ghorbanifar thought he had come to some sort of an
arrangement to get things moving again. We agreed that --
as I recall -- I don't recall an awful lot about that
meeting. I was awfully tired, but in any case, this is
what I believe -- the way North put it, if something can
be done -- I think we were talking about if we get a
hostage released, we would send the rest of the spares
in because Ghorban_if^,tty.iil(;^t,h«ni A"ti% can continue on

679

115

with the deal .

As I recall, North said yes, they would give that
active -- our side would give that active consideration.
That IS about all that transpired at that meeting that I
can recall. Nir immediately took off to see Ghorbanifar tc
see what the status of play was; but as I recall. North
also said that we would do nothing until -- someone has
to be released.

Q So you stay an extra day and come back --

A The next morning.

Q — the next morning.

I take it the next event that takes place is the
meeting in Frankfurt?

A Yes.

Q Who attends that meeting in Frankfurt?

A Ghorbanifar was there, Nir, North, and I.

Q And according to my notes that takes place on
around July 25th? Well, let me ask it this way. Was it
the day before Jenclo was released?

A I think so. Wasn't he released on the -- was he
released on the 26th or 27th? I am not sure.

Q I sort of lost track.

MR. WOODCOCK. The 26th.

MR. LEON: JencJXL was released on the 26th.

iliiij'iiJi

THE WITNESS. Tjie.,26th ; ^^es .

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116

in21

BY MR. EGGLESTON:

Q What occurs at that meeting in Frankfurt?

A This is the meeting where in return for the
release of Jenc]^o, they would send in the rest of the
spares which is basically what happened.

Q How long does this meeting last?

A It was in the airport hotel. It didn't really
last that long.

Q Couple of hours?

A About an hour-and-a-half .

Q Was it another quick turn-around? Did you get
right back on the plane and come back?

A As I recall I had some other business I could
take care of in Frankfurt. North probably -- he always
did.

Q North always went straight back?

A The next plane he could get. He always did that.

Q Was there any discussion -- this is the first
meeting then that you had with —

A Wait a minute. North did send K))-^
from the hotel. I guess he did stay that night. Saying
what was -- to alert them what was happening. And then -
to make the arrangements to receive Jencjo.

Q So you think he stayed that night?

A Yes. ■ ilB K^^t h^f)Si$¥f vcl| inKurope because of

C]H-47 messag^ ^Kr

iimCTEiT

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117

Jencko.

Q Were you certain as of that meeting that Jencko
would be released the following day?

A Yes, as I recall we were.

Q Did you have any conversations when you were
there with anyone in Iran?

A I don't recall any.

Q You don't think so?

A No.

Q But it was not -^^^^^^^Hwas not present at
this meeting, you take it?

A No.

Q And then Jencko was released the following day.
Let me ask, you indicated — this is the first time you met
with Ghorbanifar I guess really since the meeting in Tehran;
is that correct?

A Yes. I think — as I recall it is the first
meeting I had with him since Tehran.

Q Did the subject of the pricing of thes# — of "^he

-a

HAWK- pa]^Jfeom#lj|jy^^ring the course of this meeting?

A I think Nir asked us not to bring it up,

Q Do you know why?

A No. I don't recall. I was fed up with the

whole pricing issue by then anyway.

Q I take it, tjiough, you- sti*| have to be concerned

682

m23

118

^ that it is on your scope or whatever?

2 A What happens -- Okay. What happens at this

3 meeting, we took up something else. It is at this meeting
^ that Nir tells us — he also tells us at the meeting in

5 London — okay. That Ghorbanifar had made counter^^roposals ,

6 which is this giving them a reduction in price of 56 million,

7 what have you, and that there was a letter — had sent a

8 letter on the 8th of July,

9 Q Right.

10 A Nir promised that we had not yet gotten that,

11 as I recall, when we met. But we were told this would

12 settle everything. This is — yo.: have a copy of that ■

13 letter.

14 Q I do.

15 A I don't know whether it was settled, but as I

16 recall there wasn't that much hassle about the price

17 afterwards in conversations I had with — it sort of

18 changed.

19 It was me pressing^^^^^^Hto get on with the

20 deal, get everything settled so we could continue.

21 Q This is after which time now?

22 A This is after the 27th July meeting. Finally, at

23 the end of August, ^^^^tells me they settled all their

24 accounts with him.

25 Q Let me get to the 27th of July meeting. Where

jMLmihitL^

683

119

does that take place;

A That takes place at]
Frankfurt .

Q So have you basically -- you had a meeting on the
25th in Frankfurt. The 26th Jenc|o is released. Then
there is another meeting on the 27th? Is that right?

A I think there was just the one meeting on the
25th. I might have had the dates wrong.

MR. LEOMy- Could that meeting have been on the
26th instead -of the 25th?'*- 'f^ "^

THE WITNESS:^ 1 didn't make a memo of that meeting.
BY MR. EGGLESTON:

Q I think that is right. Let me ask it this way
because I care less about the dates. You distinctly recall
having a meeting with Ghorbanifar right before JencJ:o
is released?

A I thought it was right before he was released.

Q Jt* d^' t have a memo to show you but let me —
I can read It to you. There seems to be some indication
in some contemporaneous notes North wrote to Poindexter you
were leaving the night of the 26th and Jenc|o is released
the 26th and you were going to meet North and Secord in
Frankfurt tomorrow, which would be the 27th. Nir and
Ghorbanifar depart London tomorrow. And will also meet in
Frankfurt the next_ day.

684

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I guess the significant issue —

A You know, I don't recall meeting Secord.

Q You don't think Secord was in these meetings?

A I thought it was just Ollie, myself, Nir, and
Ghorbanifar. I don't remember Dick participating.

Part of the problem was I had nothing to do with
the hostages, I mean when they were released. That was all
taken care of by North.

Q Right.

A So I'm kind of hazy about the timing.

Q Let me ask it this way, I guess, just so we are
clear. Do you think around this time there was only one
meeting, though? There wasn't a —

A I only recall the one meeting.

Q Do you think that the meeting then -- and I know
you don't have any memoranda on this -- but is it your best
recollection the meeting was — it seems to me there are
two ways. It was the day before, something was along the
following lines, damn it, you have to get a hostage out
or we are not doing anything and he says it will happen
tomorrow. Or the hostage is released and it is said the
hostage is out, let's get our act together.

A It was a foregone conclusion he was being
released when we had the meeting.

Whether w^ pe^ r

685

121

Q I get It.

A You know, immediately before, because I know
Ollie was very busy sending K/\-47 messages abou

I know ^_
t how to ry^

handle the — Jenclp when he was released. Didn't they
hold Jencjto for two days?

55.?.

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magi

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122

Q You mean held him without revealing that he had
been released?

A Without revealing he had been released.

Q I think that is right. Hoping additional hostage.'
would be released?

A Yes. I think we were misled by Ghorbanifar on
that.

Q Ghorbanifar suggesting there might be additional
people?

A I think that is the way it went. We were hopeful
of getting more.

Q You think it might have been —

A The confusion might have been on the fact that
Jenco was held.

Q He had actually been released, but it wasn't
public.

A He was held for two days before it became public.
I am hazy — my memory is hazy because I was not
directly concerned with the hostages.

Q You think it was only one meeting?
A I am sure we only had one meeting.
Q Let me ask you, this is CIIN —
A There may have been another meeting that I did
not attend.

.1 - •

687

ifflttASiaiftT

123

Q I understand that.

Is this in your handwriting?

A No. That can be read.

Q It seems to say at the top of it "Cave to be."

A That is not my handwriting.

Q Can you tell by looking at it what meeting those
are notes from?

A Oh, man.

Q It is not that important if you can't tell.

A I think that might be from that meeting because of
the timing of some of the things.

Q That was my guess.

A But I couldn't be certain. That is not my
handwriting. It has "Cave to --" -- I think that is Ollie's
handwriting, isn't it?

I couldn't tell you precisely, but from the
things that are being discussed, it could have been that
meeting, because it is certainly some time around the end of
July. I can't positively identify it.

Q Between — if I didn't, the number CIIN 584 — that
is the number of the document about which Mr. Cave was just
speaking — between the meetings that had occurred on
July 10 and 11 of 1986 and the time of these meetings in
late July, had there been any further development of the
second channel? ... . „ _

688

k CiifTf ^>2 |[?^^B«a tiiicrn

WWlflWffltiT

No. That didn't occur until August.

Let me ]ust ask you — I will show you CIIN 519.

That is

a memorandum dated 9 August of 1986, I think. Is

this a document you had something to do with?

Yes.

Q "

Who ^ s^^^^^^^^^^^^^^^^^^^H

Me.

Had you changed your alias by this time?

No. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^B

Unredacted.

How did that get through. Okay.

Do you remember this call?

Yes.

What was the purpose of this call? I can't recall

this that well.

Did you call him or did he call you? It is a

call tcJ
1

^^^^^^^■for the

I don't recall precisely whether he called me or

I called him, but this was kind of an interesting call,

because

nothing ever transpired that was discussed in it.

By this time we had already contacted the second --

the second channel -- 9 August.

Oh, no, hold on a minute. Wait a minute. We

had not

yet <=|'ffeif|f IhAnYf^^^W'"^''- ^^^" ^ ma.de this

liNi.lA^MH^Ii

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125

call. In this call, he indicates that they were prepared
to settle their accounts with Ghorbanifar as soon as
the military had finished the inventory of the parts
that we sent on 5 August. This is why he is so pleased,
that we completed our end of the bargain. Yes. It ]ogs
my memory. As I say in here, to get things moving, we are
going to have to meet. He agreed to it. He seemed very --

he had been in a ^(i*^ mood in all the previous calls. He

A.
was very happy about this one because his tail was on the

line on this one, too,

Q The next thing I think that happens, at least -as
nearly as I can tell, is there is a mid-August meeting
with the second channel.

A Yes, that is correct.

Q Could you describe how that is developed and what
occurs. I take it you don't attend that meeting?

A No. That was Secord.

Q Can you tell us how that meeting got put
together, who was present, what happened?

A That meeting was arranged by the new Iranian
contact that we -Bwr on the 10th and 11th of July. It was
TE>eca5swi^wa?^ easiest for^^^^f
|to get there. He had business there. Belgium is
where the Iranians buy most of their medicines for the
treatment of the wounded.

:ontact tnat we s««r on tn
irrangedftjrpB^ Brussels lie

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m2 1 I forget the exact date of the meeting, but it

2 was sometime around mid-August. At that meeting, he agreed

3 to come out again and meet with us in Washington.

4 Q Do you know who met with him in Brussels?

5 A I think it was just Secord and the other two

6 Iranians.

7 0 Do you know whether Hakim was at that meeting?

8 A I don't know for sure. I. know -- I know General

9 Secord was there. I think that Hakim was in the States at

10 the time, but I couldn't swear to that.

11 Q As of this time, what is the focus of this second

12 channel? What is it that you are hoping to achieve through

13 the second channel that hadn't worked through the first

14 channel?

15 A Well, what we were always concerned about is

16 nothing seemed to happen. In other words, there were no

17 real concrete proposals from the Iranian side on a

18 strategic and political relationship. This had been

19 discussed at great -- ad nauseum in Tehran. And Tehran --

20 in Tehran, the Iranians talked about the undesirability of

21 the Ghorbanif ar^^^^^^Bchannel . So that they agreed to

22 look for a new channel and we were to consider the new

23 channel.

24 One of our assumptions was the initiative

25 ^^^^^^^^Hwas based on discussions in Tehran. In other

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words, when they got together back there and said what are
we going to do now, we said well, we will work it out. They
are very paranoid.

Q Was It your understanding that this second channel
was really dealing with the same people?

A And would deal with the issues. But it would deal
with issues which never really got dealt with in Tehran.

Q I think you indicated you had a conversation in
late August of 1986?

A Wit

Q Yes. - ^ ^- '

A That is when he tells ir. ; -- I think one o£ the
last conversations I had widf t^tt wxf on, £~think,rthe
27th of August. Do you have a record of that?

Q I don't have a record. I have a record of a
memorandum by Charlie Allen but not a record that you
prepared of the conversation. There may be one and I haven't
seen it.

A That is the one where he tells me as of the 21st
of august that they had squared all their accounts with
Ghorbanif ar .

Q Is this where he tells you about the — we owe
him money but he owes us TOWs?

A No. ^^H^^Hpiii^i^^^^^i^ this. This we get

692

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128

m4 1 from the new channel.

2 ^^^^^^^^H tried to -- from that point on, tried

3 to get information out ^B^^^^ of me on the second channel .

4 Based on conversations with the new channel, I always

5 sort of ^^ft»«ti him off on it. Stonewalled him on it.

6 Q Has there been a decision by this time that you

7 are not going to deal -- you meaning people in the Agency --

8 are not going to deal with^^^^^^^land Ghorbanifar?

9 A There is no concrete decision. There is a great

10 deal of concern about how we handle Ghorbanifar so he

11 doesn't go public or doesn't screw up the operation.

12 Q Who throughout this period of time is participating

13 in these strategy meetings about "ow to deal with the

14 termination of the old channel and the surfacing of the

15 second channel? Who first at the Agency is involved in these

16 decisions?

17 A Not me. It is basically the decisions have to

18 come from the NSC. We give our views

19 gave his views; I mean; Charlie his. I don't think Casey

20 had strong views on this.
2\ The problem was that even after the Tehran

22 debacle, Nir was insisting on the use of Ghorbanifar; and

23 after the release of JencJ:o, he continued to argue that

24 Ghorbanifar proves he can get things done

25 So it|V4%4^^efy^c3jnglicated thing and it was

693

129

m5 1 complicated by the fact that we wanted to keep the whole

2 initiative secret and we were afraid if Ghorbanifar was cut

3 off, he might go public or at least take some steps tc
^ screw up the operation.

5 In our initial conversations with the new channel,

6 ^^^^^^^^^^1 we spent a lot of time discussing this, how

7 to handle it. They had some ideas and we had some

8 ideas.

9 Q So the new channel was also concerned about what

10 reaction Ghorbanifar might have?

11 A Yes. And we were very concerned about it also.

12 Q Let me just expand on -ne question. Is Clair

13 George involved in these conversations about -- these

14 planning conversations about what to do? He's a name you

15 haven't mentioned much up to now?

16 A I don't think Clair really got involved an awful

17 lot until after we got into the second channel and then

18 the thing got exposed.

19 Q How about Dewey Clarridge? Is he involved?

20 A Dewey wasn't involved really that much. Dewey

21 sort of stood in when someone — in other words, he

22 was involved in a couple of meetings because we didn't

23 have very many people who were cut in. So when you wanted

24 to review something, what are you going to do? It is nice

25 to have a senior experienced officer. Dewey, when^^^Jwas

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away on trips, Dewey would take over his role in this
operation.

Q So he was essentially there as another sounding
board, idea guy to decide what to do?

A Yes.

Q But he was not involved operationally?

A He was not a key player in this operation, no.

Q Between the time of this conversation with

lin late August and then I take it there is a meeting
in Washington with the second channel on the 19th and 20th
of September?

A That is correct.

Q Were there any meetings with either Ghorbanifar,
Nir, or with the second channel between those two times?

A None that I participated in. That I either
participated in or knew about.

Q So could you describe how this second -- this
meeting on the ^Mrtr and 20th of September gets set up and

what occurs during the course of that meeting?

A This meeting was actually arranged when Secord
met witt^^^^^^^^^Hin Brussels; and it was agreed that
he would come out^^^^^^^^^^^^^^^^^^H and when
out, we would arrange to bring him to the United States

for discussions.

I think he came out on the 12th or 13th of

695

131

September and Secord made the arrangements. We flew him
over on the 15th or the 16th. We arranged to have him
brought in. He stayed out at Seven Corners at the Sheraton,
that strange Sheraton that looks like a phallic symbol.
That is right across the street from Hakim's offices.

We met him in Hakim's offices. This was very
interesting because he Ccime with some specific proposals
and was obviously trying to find out how much of all the
deals that Ghorbanifar had presented to them we were willing
to go through with. And spoke frankly about their problems
with the war and with the proposed offensive against Iraq
but what was important, he made a definitive proposal^
about how to proceed on normalizing relations between the
two countries.

Q Do you recall what the proposal was?

A There were two. One was he said that if you
agree, our side feels that a commission should be formed,
we "will have four members, you will have four members,
that will meet in secret and propose steps that can be
taken toward the gradual normalization of relations between
the two countries. In order to put a seal on this, he
also proposed that we have a meeting at the Under Secretary
level and said their Deputy Foreign Minister would attend
the meeting.

1 don't know if it was at that meeting or a

HffllSSKP,

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ASSIFIED

subsequent meeting that he said that they might bring
their ambassador in London since he was pretty bright
and was one of Rafsanjani's men.

Q Who attended this meeting?

A There were two meetings on the 19th and 20th.
On the American side, it was myself, Ollie North, and
Secord. By this time, the first time, Secord is taking -
is participating directly in substantive meetings.

Q This is the first time since you have been
involved?

A Really the first time. On the Iranian side of
course in ^^^^^^^^^^^^^H| but there was anothe;:
Iranian there who is one of their officers!

Q He was also present?

A But he did not participate in most of the
discussion.

Q Was Hakim present?

A He was there but he did not participate in the
substantive discussions.

Q I just want to make sure I understand what you
mean. Was he present for the substantive discussions?

A He was there, but he did not take part in the
discussions. In other words, we went into a room and

talked.

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Q Without Hakim?

A Ollie's theory was that Hakim could then handle
the business end of things such as they wanted.

Q By this time — it struck me that some of the
early meetings|||K^^attended way back in the
spring of '86. By this time he is not attending any
meetings. Is there a reason that he's not attending?

A No. I guess they decided to let me handle them.
We still considered this basically an NSC initiative.

Q I wonder if there was a decision about why he
wouldn't be there. Particularly with the new channel which
seemed to be promising, I wonder if there was discussion
about someone else should be brou.nt in?

A No.

Q There was also a discussion — actually I inter-
rupted you. YOU told me about the meeting of the 19th.
was the meeting on the 20th in the same place and the
same players, substantially?

A Yes. It was -- we gavej
briefing on the Soviets on the 20th.

Q Is that —

A I did that.

Q is that substantially all that happened on the

20th?

A I think there were some other discussions.

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follow-up discussions. Ollie told him that for the time
being our side on the commission he proposed would be
Secord, myself, and Colonel North. We also discussed
possible steps.

One of the proposals made was maybe we could
open -- take steps in the near future of opening commercial
relations, expanding commercial relations between the two
countries leading up to maybe active interest sections
under our protective powers. Things like that were
discussed.

It was very positive and ^^^^^^^^^^B was ver.y

MR. LEON: Did you say McFarlane was there?
THE WITNESS: No. McFarlane — after the Tehran
meeting, I did not see McFarlane until we worked on the

uNcuasimiL

PUBLIC PAPERS OF THE PRESIDENT

■ 2 OCO^

699

135

[iH 1 President's speech. That was on the 13th of November,

2 1986? Was that the day he made the speech?

3 BY MR. EGGLESTON:

4 Q Yes.

5 A We did a lot of the notes for the speech writers.

6 MR. LEON: Is there any reason why you didn't

7 see McFarlane again?

8 THE WITNESS: I don't know, I don't know whether

9 he decided he didn't want any part of it or what, because

10 I had no contact with him. At one point sometime in the

11 sununer, Ollie told me that — he said McFarlane would like

12 to see you to talk to you again, but it never happened.-

13 BY MR. EGGLESTON:

14 Q Had you heard of the second channel? Did you

15 know the person by name prior to the time you had met him?

16 Is this a famous person?

We of ^^^^^^^^^^^^^^^^^Hbut

18 not him.

19 Q Had you been able to verify that he was indeed

20 a substantial — had you been able to verify independent

21 of what he said to you that he was a substantial person?

22 A Yes.

23 Q There was also during the course of these

24 conversations some discussion about their military needs?

25 A Oh, yes. That is what I said. One of the

»mujl.mi:jj:a.

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136

things that he was trying to find out is just what of all

the things that they had discussed with Ghorbanifar

they might be able to expect that they could get from us.

One of the important things that this — I think
it is somewhere in there, it was either at this meeting
or the first one in Frankfurt, North emphasized there can
be no normalization or resumption of an arms program until
there is a resumption of the normalization of relations
between the countries. They fully understood that.

Q What did you understand him to mean by that?

A We would have the resumption of normal diplomatic
relations between the two countries.

Q Did you also understand that to mean all the
hostages had to be released before there would be a
resumption?

A That would be part of it. But I think by that
time -- well, everyone had different views. Having spent
my time in the Middle East, I didn't think we were ever
going to get all the hostages out. I know a lot about ^^|

They are one of the most
independent-minded people in the world.

Q So I take it you had real doubts they would
respond?

A That is what I told Casey when we came back from
Tehran. I said I think we will" geT Two out, maybe three.

701

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137

.ml 3 1 but they would never release all of them until they got some

2 movement on the 17 in Kuwait. And also when we were giving

3 the U.S. position to^^^^^^^^^about we want all hostages,

4 not only Americans released ,^^^^^^^^^^^Hwas very

5 concerned. He said because the — particularly the French

6 hostages, where the captors were demanding release of the

7 Dawa prisoners before there would be much movement on the

8 French hostages.

9 Q Just as a matter of interest, was there a reason

10 he was tying the French hostages so closely to the Dawa?

11 A I don't know except you know what you can surm.ise

12 that the captors thought there might be more — the French

13 might be willing to put more pressure on than we were. The

14 French might be more flexible.

15 Q Was there any — at these meetings on the 19th

16 and 20th of September, was there any specific discussion

17 about delivery of additional weapons? Was there a plan

18 formulated?

19 A There wasn't an outline of a plan. We were

20 prepared — I think this is the first time we talked about

21 an additional shipment of TOWs in return for the two

22 hostages that were at that time being held.

23 Q There were two left at this time?

24 A Yes. No. There were — there were three left

25 at that time.

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138

Q That is right. Two had been released and there
were five total. Had the additional hostages been seized
by this time?

A Yes. You will see there is a telephone call
where I call^^^^^^^Hto complain about the --

Q The seizure —

A This is after they released Jenclfo. Damn. I
can't remember the dates. I remember calling^^^^^^H to
complain. You release one and they pick up another one.
That is a wash. But I can't remember the exact
date of that.

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Q But it is your recollection that after this, in
this meeting on the 19th and 20th, there were some
discussions about going ahead with an additional shipment
of weapons?

A Oh, yes.

Q Was it your recollection that it related to TOWs.

A TOWs is my recollection.

Q There is another meeting on October 8 and 10
in Frankfurt.

A There were other things that happened.

Q I was going to blanket it. What happened between
that meeting and the meeting that takes place in Frankfurt?

A As a result of the steps , I briefed Casey on what
had transpired. I ftrote a memo which you have there. I

to^^^^^^^^^P In my talks with^^^^^^| I
because of the nature of the promise made by the Iranians —
the State Department has to be ^iAjfmmt at sufficient level
^immk because it is becoming a policy issue.

He agreed and talked to North on the 22nd of
September, with which North agreed. We also agreed we have
to look toward sending some intelligence based on these
contacts.

On the 24th of September, all this is because it looks
kind of positive, all this is discussed in a meeting in
Poindexter's offica in^the White House. I can't remember every

f f it^ iP the White House. I c.

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wBtimfflr

140

one that was there.

Q As best you recall?

A What we did was go over this. I forget -- I
think Casey was there. I was there. But the important
thing to me is that toward the end, at the end of the
meeting, I talked privately with Poindexter, and reiterated
this point; that the State Department had to be brought in.
He agreed and said, "I am going to call George Shultz right
away. "

So from that time on, I was under the impression
that the State Department was being kept fully apprised by the
NSC about what was going on. Because the Iranians were '
talking about this deputy foreign minister meeting sometime
in November. So that is what happened. Everyone seemed --
things seemd to be pretty positive. Then we go to the
meeting on the 8th — from the 8th through the 10th of
October.

At this meeting one of the guys who was — one of
the original four people we talked to in Tehran shows up. He

We give a brief —
They give us a brief and a huge
map of the Iranian military order of battle

I also aive them a brief on our view of the Iraqi

give them a brier on our

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9
10
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19
20
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I think it is at this meeting
that they give us the four names of the people proposed
for the joint committee, and also complain that we ought
to move in along faster. This is the meeting in Frankfurt.

Q I take it you and North are thetnly two participants
from the United States in that meeting?

A Secord.

Q Secord is also present?

A Yes and also Hakim is there. Because of the long,
drawn«»out naturef of these, he translates some of the stuff
when I am hoarse from translating. So that is in genera-1
what transpires at the first meeting.

Then there is more talk about — they had — at
all of these meetings, they emphasized their need.

They talked
about other things. They were continually talking about
drone aircraft. Th^e j^ere no xomnntmejits made. In fact.

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HNtASSIFe'^

142

Ollie continually emphasized that we can't have anything
regularized until after there is formal regulations.
We also got at this -- at the September meeting and the
October meeting a lot of the rationale behind why the Iranians
were willing to talk to us; telling us about the fact that
they realize once the war was over they had to rebuild the
country and the only way they could turn was to the West.

Also concern about the radical wing in Iran, we got
quite a bit of information we had never heard before S^m
these things. There is one other thing that was important.
Oh, what came out was that on ending the war, in addition to
the fact that they had — they said the rationale behind- the
final offensive — this was at the early October meeting --
was they felt they had to gain enough territory or enough
strategic objectives so that they would be in a very good
bargaining point at the end of the war!

The one worry they had was that once the war was
over, would the United States resume its arms supply? In
other words, th^^ilP^VB%~ want to agree to some sort of
negotiated end to the war, and then findput they would not
be able to rebuild their military, which they wanted to do
with American equipment if at all possible.

Q How did Colonel North respond to that? How can you-

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143

did you respond to that?

A One of the reasons they asked this is that
North's position has been, look, there can be no normalization
of arms sales with Iran until after the normalization of
diplomatic relations. I think he put on as positive a nature
as he could by saying it depends on whose administration is
in power at the time whenever this happens.

Q Let me ask a couple of other questions about this
meeting. Is this the meeting to which Colonel North brought
the bible?

A No. That was in September, I think.
Q That was the September meeting?

A Yes. Because he took them through the White House.
He took hijn on a tour of the White House. I think he gave
the bible there. See, there was a mix up in my testimony
to the Senate, because they asked about the cake, and said
was there a bible. I said, yes.

Then they didn't ask me whether the bible and cake
went together.

Q The cake was in Tehran?

A The cake was in Tehran. The bible came later.
Q Do you have a firm recollection about whether the
bible came in the United States or whether the bible occurred
in Frank^^t?

A I am pretty sure it was in the September meeting m

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the United States.

Q Was there -- were there — did any money pass at
this meeting?

A Which meeting?

Q At the meeting the 8th to 10th of October?

A^ No. That meeting -- that was what we nailed
down. ^^^^^^^^^^^H said, "Okay, I am going to go in via
Damascus and make sure on the release of two hostages
and we would ship 500 TOWs.

Q Was there any discussion about how much the
500 TOWs would cost them?

A No .

Q Was there ever a discussion in your presence about
how much they were going to cost?

A I never recall any discussion in my presence about
what the price to the Iranians would be. I assume that
Nir briefed Ghorbanifar not to discuss it with me or
something. I never heard any specific pricing on what it was
going to cost.

Q By this time Nir and Ghorbanifar are out of the
picture: is that right? I don't mean out of the picture, but
out —

A We are discussing with the Iranians. The Iranians
at the September meeting that they might get Ghorbanifar back
to Tehran on arms business, and then keep him there until

this thing got further along, working on something back in

709

tMS^ASstRer

145

Tehran. One other — they even told us they had discussed
buying off Ghorbanifar, but Rafsanjani didn't want to do
this because if it ever surfaced he had paid off Ghorbanifar,
he would be in deep political trouble.

So they asked us if we could do anything. We
said, "VJell, there is not much we can do." So what they —
at this early — I think it was at this October meeting, the
early October meeting, H^^H^^^Hsaid that what they would
do is they would continue to throw some arms business this
way to keep him quiet.

Q Did you have an understanding --

A I never saw Nir — there was a meeting — I don't
know which came last, whether it was the meeting in Frankfurt
or a meeting he attended here. He came here for a terrorist
meeting. We had a meeting with him. I can't remember when
that was.

Q Did you have an understanding as of this meeting
in early October about just how the transaction would take
place with the TOWs? Because by now it appears to me that
you are — at least as to this transaction — essentially
cut Ghorbanifar out of the loop and maybe Nir with him.

A They said they would pay direct.

Q Direct from Iran to Secord or direct from Iran to
the CIA account?

A No. No. No. They would pay — they would deal with

iNCUMJED.

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146

Hakim.

Q So they would pay --

A Which I guess is the same as Secord.

Q And any recollection of how much the price was?

I know I just asked you this.

A No. When we talk about the meeting at the end of

October, we can get into how that worked.

Q Actually I was going to go to that right now.

A Okay.

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(Discussion held off the record.)
BY MR. EGGLESTON: j^ _

Q Let me ask you, you have a meeting withi
again, the second channel, as we have been calling him,
in late October?

A That is correct.

Q Did you have any other meetings that were relevant
to this between the end of the meeting in early October
and the meeting in late October?

A Furmark.

Q We will get to Furmark in a second. Could you tell
us where did the meeting take place in late October?

A It was in Mainz.

Q Could you speil tJiac? M-A-I-N-Z. It is right down
the river from Frankfort.

Q Who was present at that meeting?

A North, myself. Hakim and Secord.

Q From the Iranian side?

was^^^^^^^^l and ^^^^^^^^^^^^^1 wasn ' t
there at that one.

^^^^^^^^^^^^^H from —

A The two — the Iranian in London, the two Iranians
in London came over, but they didn't participate in the
meeting. They were there.

Q What occufied during the course of these conversations

Well, the ke

imiHiMf^

e were two key

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148

things. He told us that he had definitely, in talking to
the captors, had definitely received a conunitment to release
one hostage. He asked us if we wanted to name the hostage,
and we said no. He said he was pretty sure he could get
a second one released. But he would not promise on the
second one. He said, "I can't give my word on that. It
looks pretty good."

He also said there has been some problems. This
was the other important thing. He said on the 15th of
October, the radical wing distributed leaflets in Tehran
outlining McFarlane's visit to Tehran. Oh, incidentally,
it took him until then to find out who McFarlane was.
They told us when McFarlane was in Tehran, they did not know
him. The only one they knew was me. They could not locate
Colonel North in the books.

Q You, they knew,
Did they think you were leading the delegation?

A No. In any case, what he said is that these
leaflets had been circulated. He said also on the 26th or
the 27th of October, a small rag in the Bekaa Valley —
Baalbek — had published this story. He said as far as we
know, no one has picked it up. He warned us the thing was
liable to get out. They had arrested a lot of the people in
Tehran in the radical faction who were responsible, including
the leader of the radical faction.

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Q Who were responsible for what?
A Leaking the story.
Q Okay.

A He said that he had brought — my recollection is
that he said he had brought with him a check for S4 million;

he said, "I can't cash it. I have to turn it over to him."
Which he did, and the money appeared in our account, I think,
on the 28th -- very soon.

So we arranged, while he was there, we arranged
to launch the — the 500 missiles — Hawks — not H^^^kp,
TOWs were already in Israel. So we arranged to launch "
those while he was there. As soon as he had heard that the
plane was in the air. He took off to make sure that one —
that the hostages would be released.

I think I left on the 29th. I am not sure. Got
the first plane he could from Geneva.

Q Let me ask you about two people whose names come up
as being involved in the hostage release around that time.
That is Robert Dutton and Rafael Quinteros. Did you know
any one of those people? "Hi

I was introduced to Dutton, but I didn't know the
other guy. Never heard of him.

Q To this moment you never heard of him?

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Q I am not surprised. I was just curious. Where
were you introduced to Dutton?

A The meetings we had withm^^^^^f^^Hon the
19th and 20th were in Secord's office. Dutton was introduced
to me there.

Q Did you meet Dutton in connection with this meeting
in lajB October?

A No.

Q And that meeting and the shipment of the TOWs
results on the third of November in the release of hostage
Jacobsen?

A Second of November.

Q Is it the second of Noveir.ber? After the meeting
when he leaves on the 29th or the 3 0th, whenever, do you ■
leave and come back to the United States, or do you remain
over there?

A Yes. I had to clean up a couple of things in
FrankfJ^rt and I think I took a day off and saw my grand-

back. I can't remember. I think it was a Sunday. Then

I ceune back on Monday.

Q After the hostage Jacobsen is released, do you
have a conversation — do you call Tehran or anything?

A Yes.

Q Where were you when you called Tehran?

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A I think I was back here.
Q The 30th would have been a Sunday.
A The 30th of October?

Q No. I am sorry. The first of November is a
Saturday. The second is a Sunday.
A I guess' I Ccune home then.
Q On the second?

A Maybe I saw them on Saturday and came home on Sunday,
the second.

Q Saw your grandchildren?

Yes. I think I did.

Where were you when you made the call to Tehran?

Back here.

Who did you speak to in Tehran?

A ^^^^^^^^^

Q ^^^^^^^^^1 What was the purpose of that

conversation?

A To findout where the hell the other hostage was.

Q What did he say to you?

A He sai<? they are still trying, not to lose faith.
That was the last time I talked to him.

Q That is the last time you spoke to him. You
continue, however, to have additional meetings with regard
to this, don't you?

A Well, what we did is after this, after everything

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comes out in the press on, I guess, the 4th of November. So
a with|^^^^^^^^^^^^^^^^^^^^^^Hin

Q This is the same man from Tehran now?

A Yes. On 9 through 10 November, or 8-9 November, in
which we try to see if anything can be salvaged. I think
you have a memo on that.

Q I was just going to show it to you.

CINN 166. Is that your summary of that meeting?

A Yes.

Q And who else — who from the American side, the
United States side participates in that meeting?

A Secord and North were both there. There is a *
long — one of the things — North took extensive notes,
so I only -- when I took notes, I only took notes on mainly
things that pertained to me.

Q Did North take extensive notes of each of the
meetings?

A Yes. He was very religious about that. He sent
more deunned messages back to — this is why the cowboy thing -
everything he did, he sent a message back to Poindexter.

Q This is why you don't believe the rogue staffer
theory?

A I find that almost impossible to believe.

Did he have — did he usually travel — you said

4 7 or something.

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A Yes.

Q There is a device called a C.L. 43?
A C.L. 43. Excuse me. The reason I say K.Y. 47 is
that is a device we had years ago.

Q I didn't know if you were talking about a different
device or not. Did he travel with that most of the time?

A He always had it. He used to drive me nuts
because .&^^5WHf hungry as hell, but he would have to send
a message.

Q Who did he send it back to?

A To Poindexter. Well, back to his office to be
taken to Poindexter. Bob Allen was usually on the receiving
end.

Q What was the upshot of the meeting on the 8 through
the 10th? Things are pretty public by now.

A In short the Iranians wanted to continue the
dialogue, but thought maybe the best thing to do was leave
things — just leave things go for a while until things cool
down. They were hopeful that we, on our side, could arrange
it so there would be as little notjp-iety as possible. Faint

hope.

This is what you will see is what he gave me about

their views on cfertain aspects of intelligence cooperation.
This is mainly what this memo is about. There were long, long-
winded discussions about policy and hostages with he. North,

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and me translating most of the time and Hakim some of the
time.

Q Secord was also present at this meeting?

A Yes. I did have -- most of what is there is a
meeting that I had -- the first page -- alone to discuss
this.

Q Let me finish out your meetings, go back to
Furmark, and then I want to ask you some questions about
sort of as these things were breaking. I just want to take
you through North's calendar.

You continued to have meetings into December; is
that right?

A The last meeting was on, I think, the 13th of
December, but the State Department was involved then.

well?

Was there a meeting on the 6th of December as

A I don' t know.

Q You only remember one meeting in December?

A Yes. That is all I recall.

Q Who was at the meeting on the 15th?

A That was Ambassador Dunbar, myself andl

Q What was the — where did that take place?

A That took place in Frankfurt.

Q What was the focus of those discussions?

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1 A It was basically to pass a message to the Iranian

2 side on the State Department's position. That is basically

3 what happened.

4 Q Let's go back and pick up Furmark, or, the

5 Furmark discussions. Sometime in October, you actually meet

6 with Furmark?

7 A Yes. Charlie met with him before, while I was

8 away.

9 Q Is this while you were in — did he meet with

10 him during your early October — when you were in —

11 A Yes. Remember I left the States on the 25th

12 or 26th of September with my wife. We didn't get back

13 until about the 12th of October.

14 Q So prior to you actually meeting with Furmark,

15 I take your meeting with Furmark occurred around October 22?

16 A Yes.

17 Q When you return around the 12th of October, what

18 are you told about Charlie's previous meeting?

19 A Charlie gave me his memo that he wrote which

20 basically were his worries, which were also mine. There

21 were too many people that couldn't be controlled involved in

22 this and that the dangers of it surfacing were pretty great.

23 Then also about — told me a little bit about his conversation

24 with Furmark. And then the director decided after another

25 subsequent call from Furmark to ask Charlie^ and I to go up

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>nhiivb^ was .

1 and hear him out completely, which was what our

2 So we went up on the afternoon shuttle on the 22nd of October

3 and had a long dinner with him in New York in which Charlie

4 and I just sat there and listened to him and took notes.

5 Q Just the three of you?

6 A Just the three of us.

7 Q I know there is a memorandum of it, but as best

8 you recall, what was the focus of what he was telling you?

9 A WeXl , what he did was outline^ the fact that people

10 unbeknownst to us, people had been involved in this from

11 the beginning, like Khashoggi and that he had known about

12 it from the beginning when the Israelis started it, and •then

13 went into his understanding of the financing of the Hawk

14 deal and how it had been arranged and what the dangers were,

15 the fact that two of the creditors were still owed 9/ —

16 about 9 million dollars.

17 After the meeting was over, Charlie and I called

18 Casey at home and told him — we didn't tell him much on the

19 phone, but we told him it was very important, that we would

20 get the first shuttle out the following morning and come

21 right to the office to talk to him.

22 The memo that was written for Admiral Poindexter,

23 designed by Charlie — actually wrote — both of us

24 wrote a lot of the stuff that is in there, and then I

25 shortly thereafter — I left on the 23rd or the 24th to go

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back to Europe, to make the arrangements for the next round
of meetings.

Q How many times did you meet with Furmark?

A Just that once.

Q Just the one occasion. Did you, other than writing
this memoranda, have any further involvement in sort of the
fallfout from the Furmark meetings prior to the time every-
thing comes out and you become involved in November? Did
you meet with anyone else? Did you talk to Poindexter
yourself?

A I don't recall talking to Poindexter. I had
a long conversation with Casey about it.

Q Was it -- was the point of the conversation the
security problems?

A Yes. The security problems and that was his main
focus about what happen if this surfaced. He had the
same worry about Ghorbt "ar going public.

Q Did you regar rhese conversations with Furmark-
as in the nature of a threat?

A Yes. And also I was more inclined to disregard them
than most people. I can't see anyone that is owed $9 million
trying to go to court the way he said he would go to court
with any hope of recovering the money. That is why I think
the threat to us to see if we could do something.

Q Because they knew that what they had on you was

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that you needed to keep this thing secret?

A Yes.

Q The one thing that is explicit in the memoranda
at least is that the numbers fairly closely, as I recall, tie
in with some of the information that you had received
previously in conversations, the asides in Tehran, the
figures.

A One of the interesting things is that it is the
same thing as Ghorbanifar is $10 million short, thereabouts.
Almost exactly. Furmark is — his suggestion is why don't
you let him sell an additional 1,000 TOWs and that will
even thingaap, let him get back in flush again and this Is
what the Iranians tell us is that they figure they owe him
$10 million, but he owes there a thousand TOWs.

Q So it sounded set up to you?

A Bells started to go off.

Q I really want to know where bells are going off
about diversions to Central America? Because what you had
heard at least once and Charlie Allen heard in the spring
was money might go to Central America. The figures turn out
the same. Furmark tells you of all the excess here that he
thought was going off to Central America.

Did you talk to North about funneling this money?

A No. I never talked to North about any funding
to the contras. Also, I was far more suspicious of money

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1 going into Khashoggi and Ghorbanif ar ' s pockets at the time

2 because of the previous knowledge we had of the 22nd

3 April arrest, his possible involvement in a a sting operation.

4 The thing that bothers me is that we didn't know how much

5 Ghorbanifar paid for the equipment.

6 I had no knolwedge of that. I mean he raised

7 15 million bucks supposedly, according to Furmark, but

8 did he have to raise that much? I don't know. He might

9 have used some of it for his own purposes.

10 Also the mysterious thing to me is that I know what

11 the price given to North is. It is over $6 million. That

12 includes the 508 TOWs. Now is the money Ghorbanifar is "

13 raising, does it include money for the TOWs or what? Why

14 is Nir getting $2 million, according to Furmark?

15 So there is not an awful lot — all it dcSIa -is ^
15 incre|pft~'the fl0Hi^L(34H^uspicions and speculations. I

17 don't know what the hell is happening. But I never in all

18 of this long thing ever got any piece of factual information

19 or definite indication that any money was being •cMM^e^r^e^

20 t° thMatoatras.

21 Q I just wondered. Now having learned this, having

22 heard what you heard in the spring, and I know you have been

23 asked this before, but you also knew Secord and North were

24 very heavily involved in Central America.

Yes.

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■•; J

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O

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Q They were also the central players, at least

as far as you were concerned in this, the Iranian initiative.
I am just wondering if you were ever tempted to go to
Ollie and say, "Ollie, you and Dick were the money guys in
this operation, and now Furmark is tellingias the money
went off to Central America." If anybody diverted it there,
assuming it was diverted there, if anybody did that, you
could assume it was Ollie and Dick.

Did you ever ask Ollie this? V/hat is going on?
Did you divert the money away?

A No. After everything blew up, after about the —
I guess I never saw Ollie again after the end of Novembelr.

Q After he was fired?

A Yes. After he was fired --

Q You haven't seen him since then?

A I haven't seen him since then. So I never asked
him about it. I figured that if it was really true, he
wouldn't have said anything anyway.

Q Did you suspect it might be true?

A I hate to put my suspicions out. I Ha<ran^twful
lot of suspicions. The one thing that was obvious was
there was an awful lot of money involved here. What happened
to it —

Q There were a lot of places it might have gone?

A Yes. The thing that always — I could never
understand what «-^f "''Tr'f ^ ^ r-tt1rt Jg-i¥^rt^ "^"^'' '''" was,

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except it is pretty clear they played a role. One of their

accounts was used and we — monies were obviously owed to

Nir for something.

P
Q Let me just ask you a few clean-up questvns. Then

I want to ask you some questions about things in North's

calendar you may or may not recall.

Have you heard of a ship called the Erria?

A Yes.

Q You heard of it prior to November 25th of 1986?

A Yes. Because at -- I forget whether it was the
September meeting-- I didn't take notes on this, I don't
thing. The September meeting or the early October meeting,
they proposed to give us a mint condition T-72, which
they would deliver to us in Bandar Abbass as part of the
deal.

They also offered to send an 1-24, but I don't
think we wanted that. This is when I first heard of the ship.
It was decided to divert this ship from somewhere, wherever
the hell it was, and send it to Bandar Abbass to pick up the
tank.

Qljl Did you have any knowledge of whose ship it was?

A Yes. Ollie mentioned it was of Danish registration.

Q Why did you think he had the ability to divert the
ship somewhere?

A My understanding was I thought they had possibly

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leased it. Something like that.

Q In connection with this operation?

A No. No. In connection with the contra thing.

Q You thought that they leased it, you mean Ollie
and Secord?

A Well, however they — -,

Q Or Haki% or somebody? Was it your impression
that when you said it was diverted, it turns out to be a
key word in this whole thing —

A Wherever it was, I don't recall where it was.

Q Let's go to redirected.

A Redirected and ordered th«.^^gg^^^sail to Bandar
Abbass to pick up the tank.

Q V^as it your — I know this is proba^jpyry
vague, and you didn't pay much attention to this, but did you
think it was on its way to Central America?

A I don't know.

Q I guess the question I am asking is what led
you to —

A No. It was in the Mediterranean.

Q What led you to conclude it was connected with the
contra operation?

A I think Ollie mentioned something about having
used it. But I don't recall what the specifics were. I
do know when it came up. Secord — it might have been — it

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was either in the September meeting in Washington or the
first meeting in Frankfurt in October. Because Secord and
he were talking about it and they said, "Well, we will just
get a boat, go down there and pick it up."

I am not so sure I knew the name of it even then.
I think I learned about the name after it came out in the
press.

Q Did you know Tom Clines?

A I knew Tom when he was with the agency, yes.
Not well.

Q Did you know that he had any association with
Colonel North during the 1986 time period?

A I never saw Tom, but Ollie mentioned him a couple
of times.

Q Do you recall in what context?

A No, not really. He had dealings with Tom. I never
got the impression he was directly involved with him on
anything.

Q Any recollection that Clines might have had
anything to do with this ship?

A No.

Q No connection? Clines — and I don't want to assume
a conclusion you might not share, but it is my general under-
standing that Clines' reputation around the agency by this
time, whether it was right or wrong, was at least a guy

you ought to be s

tav^^q|w|v^gm^i|ai«^e

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he had gotten

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into some trouble? Is that a fair --

A I don't know. Clines was — we were never in
the same organizations in the agency. I knew him only when
hewas chief of training, because you had to go through him
to get specific types of training that you needed then.
I honestly can't answer that, what the basic opinion of
the guy is. I imagine there are people that know him that
have one opinion.

Q Right. That is why I sort of tried to preface it
with whether it was justified or not. It was my under-
standing that at least he was by that time regarded as
somewhat bad news for the agency.

A I frankly can't recall ever discussing Clines
with anybody.

Q Let me ask it this way. Were you surprised to
find Ollie had associated with Tom Clines?

A I was surprised when he just brought the name up
in passing. It was clear that he knew Tom Clines, but
not — I never had any precise knowledge of what he was
doing with hira.

Q And you don't recall it was in connection with
the contras as opposed to something else?

A No. I thought it was in conjunction with the
Libyans, something to do with the Libyans. What it was, I

don't know.

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Q You knew Clines to have been —

A Ollie was doing something with Ghorbanifar about
the Libyans, but I never knew what it was.

Q I should sit back down. I have one last question
before I ask you questions about the calendar. Did Colonel
North have a regular relationship with two DEA agents
who did some work with him, if you recall, or have any
knowledge?

A Not that I know of.

Q This can go real quickly. I will put in front of
you — I don't have it marked, but it is Colonel North's
week-at-a-glance standard government calendar for the year
1986. I want to ask you about sqrne things. The
things I want to ask you about, I wS? in yellow. I don't
know that doing it this way you are really going to
remember. What I was interested in is Dewey is here. I
assume that is Dewey Clarridge. This is September 15.

A That may have been a meeting at the agency.

Q This would have been about a week or so prior to
the meeting with -- the first meeting withj

A Yes.

Q No specific recollection of what the meeting was
about?

A Yes. I have no specific recollection. If it was
the meeting -- was this a meeting when Nir came to the

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21 1

states on a -- Nir cane to the states on a terrorist thing.
We all had a meeting out at the agency. I don't know if it
was that specific date or not^

Saturday. Yes. I think that is what it was.
We had a Saturday meeting.

Q With Nir present, was it a meeting in preparation
for the --

A Yes. We told Nir we had opened up another channel.

Q The purpose of this meeting was to discuss the
other channel?

A Yes. Discuss what we hoped to get out of it and
what to do about Ghorbanifar and whether Nir can in any way
put pressure on him.

Q Was Nir at tltifc^point worried that he was getting
cut out as well? i~:^BJ^^^^

A I think the Israelis feel that they have a lot a^M
at stake in Iraag^BdtJ|riB he would certainly want Israeli
interest/to be pursued. This is one of the things that
Ollie tried to reassure him about.

Q Because in fact as the meetings developed wit>
the Israelis are not present?

A Oh, yes. That is one of the first things they
said is that they wanted Israeli footprints out of this as
completely and as fast as possible,
lid?

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A Yes. That is -- that is when Nir was in the

states on this terrorist thing.

Q Here is the week of — it is Friday, September 19.

A That was the meeting with|

Q That is —

A This is their man who wasl

MR. LEON: Who are you pointing to?
(Discussion off the record.)
BY MR. EGGLESTON:
Q I wasn't going to, for these entp.^es, because they
are names we have been calling]

Just so the record is clear therels a meeting on
the 19th at 11*30 involving Copp, Cave ^^^^^^^^B and
the other individual we were just talking about.

Here is an -- on Friday — Monday September 22nd,
Colonel North looks like he has one of those quick trips
to London. Did you accompany him on that trip?
A No.

Q You are listed as having met with him on Tuesday,
October 14 at 3:30 in the afternoon. At 4 o'clock it appears
Ollie met with the director.

Do you have any recollection of this meeting?
A Well, I was over there an awful lot to go over
things with him and that is probably one where we did a

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rehash of the meetings in Frankfurt.

Q If you recall, did you participate in the meeting
with the director?

A (No audible response.)

Q On Friday, October 31st, it appears — well, let
me go to Saturday, November 1st. It indicates at 4 o'clock,
Colonel North leaves for London. This would have been right
after the Frankfurt trip. Did you go — you didn't go to
London with him, did you?

A No.

Q Do you know why he went to London?

A No .

Q And —

A Might have been to meet Nir. I remember Nir at
one meeting we had saying it was easier for him to get to
London than it was to get to Frankfurt.

Q Similarly he leaves — when I say he, I am referring
to Colonel North, leaves on November 5th for Geneva at 4:45.

Did you accompany him on this trip to Geneva?

A Yes. I don't think we went on the stne plane.

Maybe we did. But that was the trip where we went to see
if there was anything to be rescued. It was very difficult,
because they had — in the hotel they had CNN and his picture
was on every half an hour. So we had to stay in the room.
Q Now we are really up to the time period where —

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I am up to Thursday, November 13, which as you remarked earlier
was the day of the President's speech. It appears that you
and Secord at approximately 3:15 are present to have a
meeting with North. Is that in order to prepare the speech?

A No. That came earlier.

Q That was earlier?

A Yes. What we did at that time is we had this
secure voice thing on which I called Tehran.

Q What was the purpose of that call?

A I wish you hadn't asked that. I have a hard time
remembering at the moment. It was we were trying to maintain
communications with^^^^^^^^^| We were talking to one of
his^^^^^^^^^^^^^^^^^l guy

amintained contact with. As I recall, the secure voice
didn't work well at all.

In fact, I think we left and went out to Dick's
house to see if we could work it from there. We couldn't get
it any better. It was vice-versa. We tried to do it first
at Dick's house, and then came back to the office, because
we couldn't do it there. It was just trying to keep the
channel open.

Q You earlier started to describe that you had had a
role in the preparation of the President's speech.

A What we did is put together a lot of material for
the speech writers. In other words, we put together something

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that the speech writers then boiled down into the President's
speech.

Q By this time, had the preparation of a chronology
begun?

A I think it had. I forget the dates on the
chronology. I worked on the chronology, too, after March 5th.
I didn't do anything before March 5th.

Q Who all was present and helped to draft the
speech? I shouldn't say helped draft it. Who else was
present?

A McFarlane was there, Howie Teicher, myself, of course!
Ollie was there. The secretaries were there, and also his
deputy. Colonel — what is his name?

Q There were two that worked there. Coy and Earl.

Q Earl. I don't think Craig was working on that or
on the chronology.

Q Was your role in this speech preparation primarily
fact -development, I take it?

A Yes. Going over — we were trying to put together
everything that happened. I was putting in for my part, my
recollections and notes. Fortunately the speech writers
threw everything out.

Q I was about to comment, but I decided not to.
There are almost no facts in the speech. So I am not sure
what exact role you played. I hope you didn't work very hard

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on it.

A We didn't. This may be when we were really working

hard on the —

Q He is referring to Wednesday, November 19th.
Mr. Cave is reflecting an item at 2:15. This was also the
day to jog your memory that the President had a press
conference.

A Yes. I think we also went to — we also had a
meeting with Poindexter on that day.

Q It actually looks like it is reflected around

3:30 or so.

A Because a lot of people came over from, I thinfc,
Gates was there and Casey and Clair|| George.
LEON :hH^^^^^|
THE WITNESS: ^^^^^^H He
BY MR. EGGLESTON:

Who ^^^^^^^^^^H
A He is sort of the executive director of the DDO's

office.

Q Was there anybody from — do you recall was there
anybody from the Department of Justice there?

A No.

Q Chuck CoopeEi^Ed_Med3fe^_^^nybody^Ii

A No.

Q What happened at that meetingl

Q What happenea at tnac meetAny.

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A This was a meeting in which basically we were
discussing what can be preserved, if anything. And how do
we handle it. I think things were changing so fast then
that you decide on one thing one day and the next day it
no longer obtained anyway. But you — what would happen is
would go to these meetings, get all charged up, read the
Washington Post the next morning and forget about the
meeting .

Q One of the things that I recall happening after
the press conference or at the press conference is the
President was asked about participation of a third country,
and I think he initially commented there had been no third
country participation and immediately there had to be a
correction.

Was there any discussion at this meeting about how
to handle a third country type question?

A There was one thing that disturbed me: the one thingi
that I recall is that I talked to Ollie about the press
conference. He said, "Well, Poindexter and Regan had
' fmrnprn^ the President on questions." I said, "What the hell
do they know about it? We should have been in there
throwing questions at him. We could have asked far more
embarrassing questions than those two." That is the one
thing I recall.

Nothing much was accomplished in this meeting.

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Q On Thursday, November 20, there is an indication
at 1:30 that says, "JMP" which stands for Poindexter, DRI ,
Casey, and Cave had a meeting. Apparently with Ollie. At
least it is on life* eal-Sndar.

A I don't think that took place.

Q You don't think it took place?

A No. It might have taken place out --wait a minute.
It might have taken place out at headquarters, because we
had a meeting out there to discuss things in preparation
for the NSPG meeting, which was on the 24th.

Q Right. Well, the next thing that happenes is
the next day Casey begins to testify. Did you have any ifole
in preparing Casey's testimony? Casey testifies on the
21st.

A Yes. Is this the SSCI testimony?

Q Both. I think he testifies in the morning before
HPSCI and in the afternoon before SSCI.

A Yes. I did go over some of the things with him
and answer questions that he had. I don't recall the
specific questions. He asked me something, and I would say
here is what happened.

Q Was there a prep session where he was bombarded
with questions?

A No.

Q No?

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175

A Not that I recall. He always felt very confident

when he came up on the hill.

Q He didn't feel the need for these prep sessions?

A No.

Q Did -- I take it the first that you had learned
that there was a suggestion of a diversion was about noon
on the 25th during the course of the press conference?
I don't mean suggestion. Obviously, you had some thoughts,
but did you know —

A I was getting to be pretty suspicious that maybe,
but — by that time. In fact, when Meese made his statement
I couldn't believe it because going back in my mind, I
didn't see where they could have found that much money; not
when you are dealing with people like Ghorbanifar and Khashoggi
They were not going to let you get away with that much money.

Q So your reaction was the amounts — it was possible,
but the amounts were too large?

A Yes.

Q Did you at any time during this sort of two-week
time period in late November discuss with Ollie whether or
not there might have been a diversion?

A No.

Q And do you recall when the last time was that you
talked to North?

A I talked to him sometime around Christmas. He just

UMCLiSSLFP-.

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IFIED

176

called to wish me a merry Christmas.

Q He called you?

A I think it was that way. I called him once, then
right after New Year's, asked him how he was. That was all.
We didn't talk about anything.

Q Mr. Cave, I think I have exhausted myself, if
not you. I thank you for answering all these questions.

THE WITNESS: I am getting my second wind. Can
I get a drink of water?
(Recess. )

EXAMINATION
BY MR. LEON:

Q I just have some questions. I hate to have to
bring you back to events you have already covered, but
there were certain questions that occurred to me as you were
going along I would like to ask you about. Bear with me,
if you will.

I tried to note them on my note pad here. I noticed
in Mr. North's calendar on April 18, which was shortly
after you got involved in all of this — maybe the 24th.
Wrong date. Excuse me. April 24th. It was a Thursday.
There was a meeting supposedly between you and Ollie North
and a person nc

Do you recall that meeting, and

iiiimjissiEJEa-

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177

if so, what was -- what was the purpose of it?

A I think that was — we had gotten additional
information. Remember, there was still the possibility that
Ollie^ North and I would go in with Ghorbanifar separately.

Yes.

The agency was pretty negative on that.
About?

About us going in separately ahead of time.
Why was that? For security reasons?
Yes. We didn't know what we were getting into.
We weren't certain what we were going to get into. It
was a kind of reluctance. I thought it was a pretty good
idea.

Q Who in particular at the agency was — was Mr.
Casey having an opinion on that subject?

A No. But Clair George had a #Wiy iftgative opinion
on that. Also, I think we had pretty much^HPthat time
finalized what we would be able to obtain of the Hawk spares,
That was part of the discussion.

Q What was that? What had you concluded?
A We were able to say here is the finalized list
of what we would be able to ship.
Q Who is

A He is the assistant deputy director for operations,
Q Who wqiJUitM^ajTe^^MK^i^^o a^^hat time?

741

UNCBSSlPSfi'RET

178

A Clairf George.

Q When was it that you first realized that McFarlane
would be going along to Tehran? Would it hav* been after
this date? ^

A I think it was before this date. It was sometime
after we came back from the March visit that North told me
that McFarlane -- if the group went, there would be McFarlane.
It is pretty soon after we came back from Paris.

Q What was the reason for why McFarlane would be
going at all. He was no longer a member of the U.S.
Government?

A I think they wanted it this way.

Q Who is they?

A The NSC. They wanted to send someone of great
stature, but who was not a U.S. official. In other words,
it would have been one thing to send a current serving
senior official, and another thing to send one who is
basically a private citizen.

Q Was anybody else considered, private citizen? *.

;^E.JHpt that I know. I don't know.

Q Did you meet and talk to McFarlane about his
going at any point?

A Yes. We had one meeting. I had one meeting with
him before we went.

Q Was that the one at his office?

UMPU^Filil.

742

179

A Yes. The one at his office.

Q That you mentioned? Who was it, if you can
recall? Who was also there?

^^^^^^^^^^Hand I down to see him.

Q What was the agency's attitude at that time about
sending a former national security advisjjr to the President
to a place where if he was captured in light of what had
happened to our chief of station in Lebonon, might be in a
position where secrets might become jeopardized?

A That is true. There was a lot of soul-searching
and hand-nassaging over the whole thing.

Q By who?

A Casey was very concerned. Clair George was
extremely concerned. As things began to unfold and I learned
more and more, I had some concerns, but I thought knowing
what I ]cnow about Iran and Iranians, I thought we could get
in and out all right.

Q Was it viewed by Casey as a great risk?

A Considerable risk. In fact, as I mentioned to you,
he put it up to me whether we go or not.

Q What was North's attitude with respect to the risk
diinension of it?

A I don't think Colonel North ever considers risk in
anything. He is a — very forward — a very forward leaning.

full of initiative.

T?ibr*^H!Wfrr

743

OKA/ffiUKEEr

180

Q What was your assessment of McFarlane's version of
the risk, or assessment of risk?

A Well, he was going at the behest of the President.
He is a good American. He will do whatever the commander
in chief tells him to do.

Q Did you have any reason to believe the President
has contacted him about it?

A My understanding was, yes, he was going at the
behest of the President.

Q Do you have any knowledge of whether he met with
the President to discuss this?

A I think there was reference to a meeting shortly
before we left, yes. I can't swear to that.

Q No. I understand. Did North ever represent to you--

A Yes. I thought that he and Colonel North met
with the President shortly before we left.

Q In March of 1986, shortly after you got involved,
brought into the picture, the hundred-million-dollar vote
on the contrasf took place.

I don't know if you can recall that, but it was a
major legislative effort. Wednesday, March 19 was the vote.
It was a major legislative push on contra aid. Can you recall
any discussions with Colonel North regarding his efforts on
the vote either before or after it was successful?

A We had -- there were meetings that had to be

m«§§)fm.

744

MME

181

rescheduled because he was working hard on the vote. That
is about my basic recollection. He was working around the
clock on the vote, that I know.

0 Did he express to you that — anything about the
state of affairs of the contras at that time in terms of
their funding and supplies?

A No.

Q Any indication they were in bad need of money for
weapons and arms?

A I don't recall any specific thing that he said.
We never really talked about the contras very much. I
mean, you can't be around Ollie without knowing it is one-
of his overriding interests, but, you know, as far as I am
concerned, Latin America is on the moon.

Q I take it that you are right about it, you can't
be around him much that it doesn't come up, but how does
it come up? Does he just spontaneously start talking?

A No. When it comes up, in questions like -- I went
to his office once. There was a, priest there. He just
said -- -V

Q Father >iiniii?- J

A I forget the guy's name. He introduced me to
him. He said in passing he is the priest for the contras.
He was in his office once. Things like that would happen.
He would never go

745

182

Q On May 9th, there was a meeting according to
Mr. North's calendar^ with yourself, Clair George, HHH
and!

A There's something wrong.

Q Any recollection of that?

A We were in London on May 9 .

Q May 6?

A He left to come back. He might have met with
someone that I wasn't at the meeting.

Q So far as you can recall, you didn't meet
with him on May 9, Friday, May 9?

A He left -- that is when we were in London
holding the meetings with Ghorbanifar, the 7th and 8th.
I don't think I came back until the 10th. He came back
early. So —

Q Would it be possible thatl
least in the states or in Washington,
George?

A Yes.

Q So you didn't attend any meeting?

A I don't recall any meeting. I don't think
I got back until the 10th. I came back from London
on the afternoon flight.

Q On May 13, there appears tcjbe a meeting between
you and North and a^^^^^^^^^^^^^^^^^H That is on

uNULftSSinRr

746

2
3

183

his calendar. That's how it looks. I could be misreading.

Does it ring any bells at all?
A None . None whatsoever .
Q At 2:00. Looks likel
A Are you sure that's me?

MR, PEARLINE: It doesn't look like his name
there.

THE WITNESS: Looks like National something.
Oh, up above it. Oh, 1:30. That is probably — I was
over at Ollie's after this thing started to get moving
quite frequently, just to talk to him briefly on various
things. I'm sure this had to do with the upcoming trip'to
Teheran. We had several meetings. Probably other meetings
aren't even listed on here.

I saw him very frequently during that period

after we got back from London and before we went to

Teh*ran.
w

BY MR. LEON:

Q Okay. You don't know anyone naunec

A No.

Q How about someone named Oakley?

A Oh, yes. Oakley is the State Department's —
the head of what -- their ambassador for counterterrorism
at that time. But he wasn't involved. What is the date

747

Mm^

184

on that?
Q
A

matters .
Q

Well, let's see. May 22nd.

He was probably seeing Oakley on terrorism

Then after that he met a|

you know him?

firtt

No. Don't ring any bells with me.

When you were in Iran and they told you the

It they were pretty sure they could get two

hostages out, but they weren't certain, and it started to

appear to you that they didn't have as much control over

the kidnappers as you thought they might have, did you

feel it was a set-up?

A No.^^^^^^

[there's two different

communities in Lebanon. There is the 8Mn>** of the Bekaa

Valley and the 9i»«wt» of the south. The guys in the Bekaa
A

mASSIFSED

748

185

Valley are pretty fiercely independent.

I have always been skeptical of the
positions on control — on Iranian control over the hostage
takers for that reason. This was fortified when we got. to
Tehfran.

But I did believe that they had enough influence
where they could get two released, which they «9i^. I
thought we were getting closer to the truth in the matter.
This is the position I took with Casey when we got back.

Q What did you feel^^^H^^^^f situation was at
that time when you learned there were going to be trouble
getting two hostages out?

A He was very worried. He was responsible for
us coming in and for us to leave without anything
happening would not redound to his political benefit.

Q Was it your sense that he was -- that he felt
betrayed or that he was in sgiae.wayduped?

:rayed or that he was in somg,|Way"di;

749

A He was very mad at -- along with the other
witnestTi'thorbanifar . When they started showing me these
letters Ghorbanifar had written, you know, he was mad^ .
We said, Don't blame it on us; it is not a U.S. Government
position^ it is a Ghorbanifar position. We will tell you
what our position is.

Q Did you have any sense at the outset of this
operation, Mr. Cave, that while it was an NSC operation,
as you pointed out, that State and the Department of
Defense had been specifically excluded from knowing about
it?

A Not the Department of Defense. The Department
of Defense played a role in this. There were several
people in the Department of Defense who were briefed.

I found it odd that State didn't get it. Was
cut out. That was a decision made by the NSC. Charlie
Allen was specifically told to limit dissemination.

Q Do you know who told him that?

A Yes. That came from the NSC . Came from
Poindexter's office.

Q And did Charlie tell you that himself?

A Oh, res. But *ll^"^ McFarlane swore that he
kept the Secretary of State fully briefed on everything

LilCLii^'Mf^A^

750

^j(^S5lBKi^

187

that transpired up to the time — while he was --

Q Up to the May trip?

A Up until the time that he left, resigned.

Q Okay .

A You know, as I told you, I talked to Poindexter
on the specific subject only the 24th of September and he
told me that he was going to call Secretary Shultz
immediately and brief him.

Q You don't know if that ever happened?

A I don't know. From that point on, my assumption
was that State was fully aware of what was transpiring.

Q Do you know a Colonel named Moshe, M-o-s-h-e,*
Zur, Z-u-r?

A No.

Q Do you know about his meeting with North on
July 10?

A No.
" Q On the July 17 meeting you testified to before,
on Colonel North's calendar, there is a person referred
to as Abe. Would that be Hakim?

A Hakim, yes.

Q When you were in Frankfurt, on July 27, around
that time frame, were you aware of any efforts on the
part of North to contact the Vice President?

A No. The only time the Vice President came up

UMCUl^^m,

751

TOP SECRET

UNCLASSIFIED

188

that I can recall is when he was in Tel Aviv. I don't
know if that occurred at that time.

What he wanted was for Nir to be able to see the
Vice President, present his case.

Q What was your understanding as to the reasons
why North was trying to set up a meeting between Nir and
the Vice President?

A I don't fully know. I never saw a memorandum
of the meeting after it took place.

Q Were you told by either Nir or North before
the meeting took place between the Vice President and Nir
that they were trying to set it up?

A Yes. I was aware they were trying to set up the
meeting.

Q Was it your impression they were trying to
set it up in order to have Nir enlist the support of the
Vice President?

■ A That was my -- yes. That was my understanding.

Q To keep this operation going?

A To keep the thing going. Because of the fact
we were getting Jenco, I guess it was at that time. But
I never saw any result of the meeting. I never saw a
memorandum based on it.

Q Did either North or Nir ever comment to you
later how that mp§ting went?

l^Nt'LASSIRUP

752

^ 189

1 A I don't recall any specific comments, no.

2 Q Were you aware of North trying to have the

3 Vice President meet with Jenco in Frankfurt?

4 A No. I sort of stayed out of the hostage -- I

5 was never involved in any of the briefings or anything

6 like that. And specifically asked to be kept out of it.

7 Q Do you have any knowledge of a $7 million deposit

8 being made into a numbered Swiss account on September 26,

9 1986?

10 A No.

11 Q By Nir or anybody else?

12 A No. September 26?

13 Q Yes. So far as you knew, on September 26,

14 there was no definite understanding as to another ship-

15 ment to be made in the future; was there?

1g A No. We had agreed that we would consider, and

1^ ^^^^^^^^^^^^fsaid okay, he is going to look to make sure

•jg they can get the hostages released. That is where, as

■\Q far as I was concerned, it was left. We didn't get into

20 the more detailed discussion until the Frankfurt meeting.

2'j Q You went to Geneva with North, what, at least

22 once?

23 A We had the meeting in November. Meeting in

24 November, yes.

25 Q Did you ever meet a person in Geneva named

'n"fi'f x*r7^'''H3T?rn

753

yvRRte^EinBr

190

William Zucker?

A No.

Q Did you know him?

A I knew who he was. I think he was in some way
associated with Hakim in business.

Q What else do you know about him, if you know
anything?

A Nothing. He's a Swiss national, I gather.

Q Do you have any knowledge of him providing
money to Colonel Dutton at any time in relationship to
the shipment of arms in October?

A No. I think the only reason I knew who he was-
is we came down to the lobby, and Hakim was talking to a
man and I think it was -- Ollie said. That's William
Zucker. That's my knowledge of him.

Q That was where?

A This was in Geneva.
- Q Do you know where it was? In a hotel?

A In the Intercon Hotel.

Q When you were in Switzerland, do you have any
knowledge of North or anybody on his behalf trying to
contact the ambassc

A No.

Q Have you ever heard her name come up in the

;ador. Faith Whittles'^?

context --

UNClASSlflED

754

IMMLlKSIREir

191

1
2

A What was her name again?

Q Faith Whittlesey, ambassador to Switzerland.

A No.

Q You talked earlier about the first meeting
where Secord was present and directly involved in what
you considered to be a substantive discussion with the
second channel.

Were you surprised to see him present at that
meeting?

A Well, I consider myself an experienced operations
officer. It is always a mistake to mix apples and oranges.
But I think that the rationale for it is Colonel North ■
relied heavily on General Secord. He really thought
highly of him.

My understanding is that Secord at one point
saved his life. I don't know if that's an apocryphal
story or not.

Q Do you have any more facts about that story?

A No. I just heard when they were both in
Vietnam, Secord saved his life. Whether it is true or
not, I don't know.

Q How about Dutton? Had you heard anything about
Dutton's relationship to Secord and North?

A The only point where that ever came up was
when we were having the meetings in Hakim's offices out

E^MCUssicifa^

755

'&ii^mms&

192

1
2
3

at Seven Corners.

Dutton was introduced to me. And after a long
session, was kindly oblig«rby mixing a martini.

I think Dick Secord said that Dutton had been
in Iran^

Q He worked for Secord in Irani

A In Iran, right .

Q But you had never met himi

A No. I think I had actually been -- the same
day when I first went out there. Hakim introduced me to
Dutton, said he was one of his best employees.

Q At one point Mr. Eggleston was asking you
questions about the September 22nd through September 24th
time frame.

A Yes.

Q On the 22nd, I believe you were talking about
a meeting between North and Casey, Then on the 2 4th,
it was a meeting between Poindexter, Casey, yourself, and

A I think Clair George was also there.

Q Clair George? That was on that occasion that
Poindexter said, I am going to call Shultz right away?

A I specifically brought that up with him, because
we had already — I had brought it up withi

l"NCJ.ft3SlfiEflUn

756

193

who brought it up with Colonel North, who said. Yes, he
should be brought in.

I emphasized that point with Poindexter at the
24th September meeting. His response was, I'm going to
call Secretary Shultz right away.

Q And these discussions concerned the hostages
being released and the second channel?

A Basically the second channel. It looked very
promising.

Q Between North's discussion with Casey on the
22nd, which was a Monday, and on the 24th when there was
the meeting with Casey, yourself^^^^^^^Hand Poindexter,
North flew to London the 2 3rd, in between those two days.
Did you go with him to London?

A No.

Q Do you know why he went to London?

A No.

Q Do you know anyone who might have gone with

him?

I don't know, no.

UNCLASSIFIED

mi'N'rfc riT-1/^T^T'wn

757

SECRET

ASSfFfED

194

Q On October 9th, North's calendar indicates he
met with a person. I would like to know if you know who
this is -- Bahman Maalizadeh.

A
Q
A
Q
A-D-E-H.
A
Q
A
Q

Yes.

B-A-H-M-A-N —

He works here.

— is the first name. The second is M-A-A-L-I-Z-

Maalizadeh. He works for Senator Helms.
He does?

I don't know him personally.

You don't know why they met or what happened
at the meeting?

A I don't recall Ollie ever saying anything about
it.

Q Mr. Eggleston asked you about the 14th of
October. That was the day where you are penciled in at a
meeting at 4:30 and the DCI at 4:00 o'clock.

I couldn't recall if he asked if you were there
when Mr. Casey appeared or not?

A What is the date of that meeting?

Q October 14. It was a Tuesday. Supposedly, there
was a meeting at 4:00 o'clock with Casey, Paul Hanley,
Syria Terr — T-E-R-R — and Britt Threat — T-H-R-E-A-T —
in the White HQjiae-5iUial.iQn j-opm_.^

758

mmm

195

1 A I wasn't at that meeting, no.

2 Q You weren't at that meeting?

3 A No.

4 Q Did you go with North on the 22nd, Wednesday,

5 October 22nd, to Geneva?

6 A No.

7 Q You didn't go on that trip with him?

8 Have you ever heard of a person named Mark Durpis

9 D_u_p_R_i_s?

10 A Mark Dupris?

11 Q Yes.

12 A The only Dupris I know is the guy that is the

13 expert on Afghanistan, but his name isn't Mark.

14 Q How about on his calendar for that day in

15 Geneva? He is supposed to meet withi

16 ^^^^^^^^^^B Have you ever heard of that?

17 A Who?

19 A Sounds like an organization DDI would use.

20 No, never heard of it.

21 Q How about a person named Gerald Keilson? K-E-I-L-

22 S-O-N.

23 A No .

24 Q On November 19, Mr. Eggleston asked you about your

25 meetings that day with Ollie and^^^^^^^H ^"d then, of

(fJ(i;i/IXi(fi£n-

759

ufflsSW

19,6

course, there was the DOJ meeting at 4:00 o'clock with
Casey and Gates.

On North's calendar, you were scheduled to arrive
at 2:15 and the meeting with the whole group to go over the
DOJ preparation wasn't until 4:00.

Can you recall, first of all, whether you did meet
with him for an hour and a half before that meeting?

A I think we were working on the chronology. The
speech was on the 13th, right? November 13th?

Q That was the speech. The press conference was
that night, the 19th.

A We were working on the chronology, I believe,.
that day. I am pretty sure. There was one day we spent
a whole long time working on the chronology.

Q I think you told Mr. Eggleston that on the 24th,
that even though you are scheduled here for a meeting at
North's office with Casey, yourself and Poindexter and North,
that you don't recall it taking place.

A The 24th of November?

Q Right. The day before Ollie was discharged.

A No, I don't think so. On the 24th of November,
I went from the agency with Casey to the NSPG meeting.

Q Which was that afternoon?

A That afternoon. "-^^

Q So, were you out at the ^JTSTftf that day?

7i60

197

1 A Yes.

2 Q Were you aware that if Furmark met with Casey

3 that day at the agency?

4 A I think so.

5 Q Do you know what time the meeting was?

6 A Was it that day?

7 Q That is what I am asking you.

8 A He came — one of those days, but I thought he

9 came late at night.

10 Q I believe they met the 24th.

11 A There was one day — I was told to stay —

12 Furmark was coming in. Casey's old executive office director'

13 up there said Furmark was coming in. I can't remenber

14 whether it was the 24th or not.

15 Q Did you say Casey's office director?

16 A Yes. He has an executive director, McCullough.

17 Q Tell us what he said to you.

18 A I was talking to him about we were doing our own

19 chronology, getting ready for subsequent testimony, and he

20 mentioned to me that Furmark is coming in. I guess it was

21 that afternoon. Maybe it was that afternoon. I saw

22 Furmark, but he didn't see me.

23 Q What happened?

24 A I can't swear to the date.

25 Q You remember ^g(^r\fl. aU-tll_1Vy||>L *"" *^^^ NSPG meeting?

761

m^issm

198

A Yes.

Q So, you remember being at the agency on the 24th?

A That is right.

Q You remember seeing him at the agency, Furmark?

A I can't swear it was on the 24th. I remember
seeing him some time in those days there.

Q Did the director ever mention to you his meeting
with Furmark that day?

A I don't recall him specifically saying anything
about that visit. I don't think he called me in. He
might have talked to Gates and Charlie Allen about it, but
I don't think he specifically called me in to brief me on
what Furmark had said.

Q Let's follow it through a second.

If you did go with the director to the NSPG meeting
from Langley and he had already met with Furmark and they
had discussed the events that you have previously recounted,
wouldn't it be likely that the director would bring it to
your attention that he had met with Furmark?

A He did not on that trip. On that trip we were
going over his opening statements he was going to make to the
NSPG meeting.

Q But you do recall seeing Furmark out there?

A I recall seeing Furmark during that period of time.
I can't swear it was on the 24th. I know I saw him coming

UNCLA$aiO£i)„

762

ifflffhSSfffHT

199

1 to visit Casey.

2 Q Were you at Langley the next day?

3 A I don't know. I don't go in unless I have

4 something specifically to do. I would rather play golf.

5 I am not trying to mislead you. I just don't recall --

6 I recall seeing Furmark going into Casey's office when

7 I was talking to Jim McCullough. But I don't recall a

8 specific date.

9 Q Do you have any recollection of Casey every

10 telling you after that time period that he had met with

11 Furmark and Furmark again had made accusations that Khashoggi

12 was being —

13 A I recall there was one period after that that he

14 said that he was very much concerned because according to

15 Furmark, these people were going to bring a case, were

16 going to file a — file suit in New York.

17 Q And did Casey ever mention to you calling

18 Chuck Cooper at the Department of Justice about that

19 meeting?

20 A No .

21 MR. LEON: Thank you very much. It was nice

22 meeting you, Mr. Cave.

23 I have to run to something else.

24 MR. VAN CLEVE: For the record, to introduce

25 myself, I am G^f^^g ^^ Cleye^. I am Chief Minority Counsel

763

immm

200

with the House committee. I have not been able to

attend except for a short period the earlier course of the

deposition. I am going to try not to go over ground you have

already been asked about. There may be one or two places

where I do that. It is unintentional. I am not trying

to get you to give me a different version of something you

have already talked about.

EXAMINATION BY MR. VAN CLEVE, COUNSEL FOR THE HOUSE SELECT
COMMITTEE

BY MR. VAN CLEVE:

Q I have a couple of, I guess, specific factual
questions. Let me just try to get into them in a reasonable
sort of chronological order.

As far as I know, based on your prior testimony
before us today and on prior occasions, you were not
involved in any way in the November 198 5 shipment of Haw)^;
is that correct?

A That is correct.

Q At any time during 198 6, did any of the
participants in these transactions describe the November 198 5
shipment of Hawks to you?

A Charlie Allen did.

Q If so, what did he say about it?

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A It was mainly after the fact. One of the big
concerns is when these things arrive in Israel — in Tehran,
the Star of David was on nine of the 18 Hawjcs, and the fact
that the Iranians didn't accept them, they were the wrong
models. They had to be picked up and returned subsequently
to Israel.

But I was unaware of any detailed — I knew no
detaijs about either the September or November shipment
until after everything came out.

Q When you say "everything came out," you mean
the disclosure? . .

A The disclosures.

Q Your conversation with Allen actually took place
after those disclosures?

A No. It actually took place — the revelations
in the press hadn't occurred, but I was told — when I was
briefed in, I was told there had been a shipment in
September of 500 TOWs by the Israelies and that in November
the NSC had arranged for — with Israel for the shipment
of 18 Hawk missiles, but I — no great details. I never
bothered reading anything on it.

Q This is the conversation with Allen you were just
referring to?

A Allen, and also^^^^^^^^^H mentioned it to me
when he briefed me in.

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Q Can you recall anything else they might have
said to you at that time about the November shipment?

A Just that we played a role in using our
proprietary to ship it in. An attempt by the Israeli^s
to ship it viaj^H^^^^I had failed.

But I was not interested in any details, anyway.
That was past history.

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Q I understand. But it occurs to me when you were
being briefed into what is obviously a fairly complex and
relatively sensitive covert program, that knowing something
about the prior history is of considerable use.
Would I be mistaken in that opinion?

A Well, the agency's involvement was -- there was no
agency involvement in the September shipment, and the only
involvement we had in the November shipment, to my knowledge,
anyway, is our proprietary was used.

We were told we were shipping oil field equipment.

Q Were you told that at the time?

A At the time I was briefed? Yes, we were told. this
was oil field equipment we were shipping in.

Q Can you remember in any greater detail precisely
what you were told on that subject when you were briefed
in this, I guess, March of 1986?

A The only thing I can recall being told is the
first instance that we got involved was when we were asked
by North to arrange for clearance for a flight that didn't
go through.

Then we were asked by North if we would supply
a reliable airline to fly some cargo for humanitarian
purposes. The cargo was described as being oil field
equipment, and the problem evolved when the crew, after the
stuff was loaded on the plane, took off, determined that it

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wasn't oil field equipment they were carrying.

They were — I think the crew thought it was
artillery.

Q Do you recall —

A But that was about the end of my — the brief.

Q You don't recall anything else that you were told
about the prior negotiations?

A On using our proprietary?

Q More generally, about the nature of the shipments,
who had been involved, stuff like that?

A No. The only nSSBw that came out in it is this
was a request by North that was made, I think, first to'
Dewey Clarridge. I am not absolutely certain of that.

Then it went up to the ADDO's office, and John
McMahon got involved in it, and eventually they were given
the name of the proprietary and we contacted the proprietary
to expect to be contacted to haul a cargo to Tehran.

But that is about the limit of my knowledge.
Of course, the problem comes out here -- a lot
comes out in the press afterwards. You have a hard time
separating what you learn after reading the Tower Commission
report from what you were briefed at the time.

Q I know this is a subject that has been covered
earlier today, but I do have a couple of additional
questions about it.

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Could you explain as precisely as you can why it
was that Colonel North and whoever else might have
accompanied him — you, for example — did not go to Tehran
for preparatory meetings prior to the trip in May of 1986?

A I think it was just simply because it was ruled
out at a higher level.

Q On what basis?

A I honestly can't answer that. Too risky, I guess.
I gather at the NSC there was a lot of concern about what
might happen. The only word I got back on it from North is
that we can't go.

Q Were you aware that consideration had been given
to alternative sites for the Tehran meetings?

A Oh, yes. Kish Island was the first one.

Q What is your understanding of why the United
States agreed to hold the meetings in Tehran?

A Because the Iranians claimed it was the only
place they could reasonably hold them where they could have
the security and where they can maintain the operational
security and we wouldn't raise that much curiosity.

They said Kish Island was impossible because the
desalinization plant had broken down and the runway had not
been used in years.

We suggested as an alternative Bandar Abbass.
They said we would stand out like sore thumbs and the only

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logical alternative was for us to first come to Tehran.

Q Were you aware that at least some of the American
participants in these transactions regarded Kish Island
as the preferred site for the meetings?

A Yes. I preferred **e*»»

Q For security reasons?

A Yes, I regard it as a preferred site.

Q Did the justification given by the Iranians for
not wanting to use Kish Island -- I don't want to characterize
it, but at the same time, did it seem like a reasonable "
justification or is it the case the United States simply
acceded to their requests that these be held in Tehran despit«
the risks?

A I didn't think the justification was — had any
merit that the Iranians gave us for moving the site.
I thought it could have been done on Kish Island. They didn't.
really raise much in the way of objections. We had every
reason to believe that that runway was serviceable.

But the decision was made to go ahead with their
demands that we come to Tehran.

Q Can you say specifically who made that decision?

A No, I can't.

Q In your view, based on what you know about the
level of responsibility, could Colonel North have made that

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type of decision?

A I can't believe -- it would have had to go higher
than him.

Q As I understand it, when Mr. McFarlane arrived in
Tehran -- let me back up and try one other sort o* related
subject first.

You said that it is your understanding that the
reason that there was no preparatory meetings in Tehran
itself was concern over the security risks that are
entailed.

Isn't it the case that the security risks from ■
having Robert Mc Farlane present at Tehran meetings are ■
infinitely greater than the risks entailed by having
Colonel North attend such meetings in Tehran?

A I thought so. I thought that we would have been
better off had we gone — North and I had gone in first.
But that is hindsight, as things developed.

I was very amenable to going in first. I thought
it was a good idea. Both Colonel North and I thought it
was a good idea, but not many other people apparently
thought it was a very good idea.

Q How do you account for the willingness of the
United States participants to take that level of risk?

A I can only speak for myself on that. I weighed
everything. I had a long talk with Casey about it. I said

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from my knowledge of Iranians, and also from what I have
learned and the fact that Ghorbanifar himself is taking a
big risk and a big financial risk that I thought that the
rec-1 risk to us while we were in Tehran was if it becomes
public knowledge we are there and the radical faction decides
to make something of it.

But I thought that even then they would make every
attempt to get us out.

Q Were you aware that Colonel North has prepared
three sets of press guidances with respect to this trip,
and that they contemplated specifically the possibility
that the party would become hostage to the Iranians?

A I was aware that he was doing something along
these lines, but not that he had made three specific press
guidances.

Q Are you aware of some reason why a private citizen
other than Robert McFarlane could not have been adequately
briefed and given responsibility for conducting the specific
negotiations that he conducted and done equally well?

A I was given to believe that McFarlane was the choice
of the President. Whether that is accurate or not, I don't
know.

Q But are you aware of any reason — and I am
asking sort of for an expert opinion here. You have a lot of
background knowledge about Iran. Are you aware of any reason

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why a capable private citizen could not have been adequately
briefed and given responsibility for the conduct of these
negotiations and done equally well at the job?

A Well, that is highly speculative. I can't give
you any specific reasons.

Q I can be more specific in my question.

Is there anything Mr. McFarlane knew about Iran
or about these negotiations that someone else either
didn't know or couldn't possibly have been told that made
him indispensable?

A I think part of the reason was since this was
a highly secret initiative, McFarlane was aware of what .
transpired up until the time he resigned his office on
December 12. Therefore, he is an ideal candidate since he
knows what has transpired up to that date.

Q You were briefed in when you joined the operation,
weren't you?
■ A Yes.

Q I assume that someone else could have been briefed
in as well?

A But you would have had to add another body thcit
knew about it.

Q Okay.

So, again, not just to be — have the record be
clear on this E>oint -- is it your view that someone else

ummico,

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could have done this job, some other private citizen?

A Oh, I suppose there are any number of private
citizens that could have done the job.
Q Thank you.

I think I can do this on the record. I want to
address a question not just to you but to my colleagues.
This may be one of the areas you have already covered.
I don't want to go back over this.

I wanted to ask about your specific understanding
about the nature of the deal going into the Tehran trip
in May 1986.

I believe you have previously covered that?

MR. EGGLESTON: It is my recollection I asked
him about sort of on each of the trips what was the under-
standing as of the end of that meeting, each of the
meetings, what was your understanding as of that meeting,
as of that meeting, as of that meeting. I may be wrong.

MR. WOODCOCK: I think that is right.

What you might want to do is if you have a specific
question about perhaps an element of that deal as to
whether Mr. Cave had an under S<randing, you might want to
focus your question. He has given a general description
of it.

MR. EGGLESTON: I am not sure I was focused on
any particular. I wanted to elicit an understanding of

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each stage.

MR. VAN CLEVE: 1 do have one specific question.
BY MR. VAN CLEVE:
Q It is my understanding that you held some direct
telephone conversations with Iranian officials prior to the
Tehran meeting. I believe those conversations would have
occurred some time in late April, that they were conducted
from Europe in the presence of Mr. Nir, Mr. North,
Mr. Ghorbanifar.

A There was only one. That was the 7th of May.
Q The 7th of May?

A Yes, that is when we met in London.
Q You already talked about that?
MR. EGGLESTON: Yes.

MR. VAN CLEVE: I don't think I need to go over
that ground.

BY MR. VAN CLEVE:
Q During the Tehran meetings themselves — and again,
this may be something that you have talked about, but
I think r have a slightly different question to ask on
this — it is my understanding that the Iranians made a
series of proposals.

Once it became clear that the original under-
standing with the Iranians for one reason or another had not
come about, l^^vina aside the gupstlQp of why that might

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have occurred -- that is, the hostages had not been
released -- it is my understanding the Iranians made a series
of proposals to the United States with respect to how many
hostages they might be able to release if the United States
sent the rest of the spare parts and so on. Is that basically
correct?

A Yes. We went in there with the understanding,
of course, that all four of our hostages were going to be
released.

It became quite apparent shortly after we arrived
this wasn't going to be the case. They told us they could
get two. They were negotiating for two.

A great deal of these changes had to do with the
time factor as they saw it. They needed more time.

Finally, McFarlane gave them an ultimatum. They
can have until tomorrow morning at 7:00. Otherwise, we
are going to leave.

■ Q Now, I guess what I am trying to get at is it
sounds as though they made a series of offers to him which
were turned down without any question about whether that was
good, bad, or indifferent.

The question I have is did he ever make them a
counter offer?

A What we had -- what we did, in a long, non-ending
series of negotiations, agree to a seven-point program which

UNtlASSIFe.

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you have a copy of. And also as it became apparent they
could only get two hostages, we focused on that.

The main concession that McFarlane made is that
okay, if you deliver the two hostages, we will send in the
rest of the Hawk spares.

They said okay. And then they went about trying
to arrange — and late — the evening before — they went
out to see if they could do this. Late in the evening the
day before we left, or actually early in the morning, they
asked for time to get two — the two hostages under their
control and a guarantee from us that we would launch an
aircraft with the rest of the Hawk spares within, you kiiow,
so many hours after the hostages were released, wh;'.ch we
agreed.

Then McFarlane gave them until the following
morning to obtain the release of the hostages.

Q Again, this may be a subject that you have covered
thi"s morning somewhat, but I wanted to ask you what were the
precise circumstances surrounding the beginning of the second
channel? Who approached whom?

MR. EGGLESTON: There was, George. Extensive.

MR. PEARLINE: That was extensively covered.

MR. VAN CLEVE: Okay. No point in going back over
all of that.

MimiFBn

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214

BY MR. VAN CLEVE:
Q I may have misheard something earlier but I
wanted to ask this question. It's another factual question.

On November 20, there were -- 1986 — there were
a series of meetings at the White House, some of which you
participated in. Were any Department of Justice officials
present at any of those meetings?
A No.

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BY MR. VAN CLEVE:

A Now we — I think that in the question of
Ghorbanifar, you have to consider the way he develops his
access to be able to accurately assess its value.

Ghorbanifar does everything — he develops his
access to people in the U.S. Government in the same way,
to make money.

This was my great concern about our making use of
it in that we knew he had the access but he was never
truthful.

For instance, during the time that we had an
operational relationship with him, he never told us anything
about his association with the Israelils, which would have
been nice to know.

Another thing is during the whole business of his
relationship with us on this Iranian initiative, he never
told us anything about his direct personal relationship
with Ayatollah Montazerli, who is Khomeini's heir apparent,
which had a lot to do with the whole thing coming undone.

So, when you want to suggest -- if you are look-
ing -- is it better to do business with someone other than
Ghorbanifar, yes, I think, kjiowiij^t^jtiat the Iranians were

Tim

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interested, we could probably developed as we eventually did
better access to the people we wanted to deal with.

If you go back to the record, Ghorbanifar spent
an awful lot of time in all of our initial contacts trying
to convince us this could be done through nobody but him when
he knew this wasn't the case.

Q I appreciate that you have a low estimate of
Mr. Ghorbanifar ' s reliability. I think that is fairly well
known by this time.

But I was really trying to get at something
different. That is what realistically were the alternatives
available to the United States?

[did you

ever have a conversation with people at the agency where
you sort of said, gee, you know, and then you described
your personal opinion of Ghorbanifar, which is well known to
be very low — don't we have alternatives? Don't you have
better sources?

A Yes, but the problem is that the agency was not
picking the person to do this. This was an Israeli operation
at the time. This did not become basically a U.S. operation
until the fall of 1986.

All the initiatives were taken by Israel and
Ghorbanifar

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Q You believe in competitive analysis, don't you?

A In competitive analysis?

Q Right. Just as a principle, you believe in
competitive analysis, don't you?

A Yes.

Q So, if the United States had a way of going
around Ghorbanifar to someone with equally good access to
the Iranian hierarchy, isn't it reasonable to assume we would
have done that?

A You are asking me to speculate on something that
is — 1 don't even think is germane to the whole question
we are tracing.

Q Well, I apologize, but I do think it is germane.

I can tell you that I want to pursue this subject.

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Ghorbanifar 's performance as an intelligence agency was •
virtually nil.

What he did feed us was highly inaccurate most of
the time. So if you are judging him by the quality of the
intelligence he produced, it is zilch.

783

^SSIRHfeT

:he decision had already beer
made to use Ghorbanifar when I came on board.

Q Let me just say as a layman, it looks to me as
though the United States more or less made that decision
because it had no alternative.

In other words, I quite accept your suggestion
that we were using him because Israel wanted us to, but it
also seems to me if we had had any practical alternative
we probably would have chosen it.

After all, you put him on the burn list. Would that
be a fair conclusion to draw from the course of events?

A You are going to have to go higher up the line than
me to get a conclusion to a question like that. I wasn't
part of the decision making process. I was told to do what
I could to make it work.

MR. VAN CLEVE: Can we go off the record for a
mijtute, please?

(Discussion off the record.)

MR. VAN CLEVE: I have one more question for the
record.

BY MR. VAN CLEVE:

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EXAMINATION BY MR. WOODCOCK ON BEHALF OF THE SENATE SELECT
COMMITTEE

BY MR. WOODCOCK:
Q Mr. Cave, just for the record, I am Tim Woodcock,
representing the Senate Select Committee.

I am here in my official capacity as an
associate counsel on the committee, and pursuant to the
mandate of the committee to pursue this matter within the
parameters of the committee's fSfiP^^on, and accordingly.

the committee's r^sp^Lic

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222

this is an official inquiry of the committee.

You might want to remind him that on this end of
the deposition, which is also being taken in conjunction
with the House, that the witness is still under oath.

THE REPORTER: Vou are still under oath.

THE WITNESS: Yes.

BY MR. WOODCOCK:
Q I hope to be relatively brief. I have made
marginal notes of questions here. There will be a certain
probably logical lack of order to these. I am going to
throw them out to you as I come across them.

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end
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Q In the Tower Commission report, there is a
reference to the BTE saying that there was historical
precedent for the sale of arms by Israel to Iran through
the United States.

Do you know what he was talking about there?
This would be December of 1985.

A I think he was probably referring to the
embassy case. One of the big bugaboos on that was the r.
Iranians insisting on the release of the embargoed arms
which, depending on who we listened to, was anywhere from

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Q Anyone comment on that?

A No. The only reason I put that in my notes
is because it was money and it was Ghorbanifar.

Q And the combination made you suspicious?

A Yes.

Q Did Charlie Allen ever tell you that Ghorbanifar
made a reference to the possible diversion of wmmmtfm from

the profits of arms deals to Central America?

A I don't recall anything at the time. I think
that Charlie mentioned something after the fact. I think
I recall him mentioning something, you know, Ghorbanifar

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said something once to him that he hadn't paid much
attention to.

Q When you say "after the fact," you mean after
this was all exposed?

A After everything was all exposed. I don't
remember him at the time he was seeing Ghorbanifar ever
saying anything about diversion of funds.

Q In the Ghorbanifar efforts to finance the
transaction, did you ever become aware of his

and Nir's approach to Tiny Rowland?

A We becauDe aware of that when Tiny Rowland
checked in with the American embassy in London.

Q How did you become aware of that?

A The State Department sent a cable. We saw a
copy of it.

Q You at the Agency saw a copy of it?

A Yes.

Q Did you ever raise this matter with either
Nir or Ghorbanifar?

A No. ,!-.«•'

Q You recall Jtortft^r anyone else ever doing
that?

A No. Has Nir involved?

Q Well, you don't know then whether Nir was
yolva^in that; is that correct?

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229

1
2
3

A I thought it was Ghorbanifar and Khashoggi
that brought it up, Tiny Rowland. I don't recall whether
Nir was -- could have been. I don't recall.

Q Your knowledge, I gather, would then derive
from the cable and wouldn't go beyond that; is that right?

A That's correct.

Q In your association with Ghorbanifar on this --
on these negotiations, was there any involvement of the
hostage location task force?

A In what way?

Q Well, that's what I eun asking you. In any
way?

A Well, there was always a great deal of
interest in trying to locate where the hostages were ^^^|

So the hostage location force was very much
involved in this, in the location aspect of

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IttfiUSSIEEBT

A But by and large, the hostage location foi

230

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Q You testified that when you were brought on in
early March, you had a meeting with ^^^^^^^^^Hand then a
meeting with Charles Allen and a meeting with North all on
the same day.

A Yes.

Q You said at one point that Nir kept a tight
reifn, and I am quoting you, "tight rei4n" on Ghorbanifar.
What did you mean by that? j

A Well, it was my impression from the dealings with
North and Ghorbanifar, that Nir tried to keep Ghorbanifar

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under a very tight reign. For instance, when we met in
Frankfurt in July, whether it was the 25th or 26th, we
talked to Nir first. Then he arranged for Ghorbanifar to
be brought in and talk to us.

Q Do I gather from what you are saying that what
Nir was trying to do was to protect Ghorbanifar from you
as an asset of the Israelis?

A I don't think so. I think what his concern was
was that he had an awful lot riding on this person and also
the Israelis politically. He wanted to make sure he was
aware of everything that was going on.

Q He wanted to make sure he wasn't cut out?
A He was always keeping contact with Ghorbanifar
and everything Ghorbanifar was doing.

Q Were you aware that the Israelis were providing
some assistance to Ghorbanifar during his period of
financial difficulties?

A I assumed that.
Q You didn't know that?

A But — we assumed"that -•fC/^nvolved in it but
we didn't have any -- the only factual thing we had is that
Nir was extremely interested in Ghorbanifar getting paid
and that after the meeting with Furmark, when you had the
two million bucks earmarked for Nir, we couldn't figure
out what that was for.

ii\ifi»^^i^.!l_

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ra3 1

You didn't learn that from Charlie Allen?

That —

That the Israelis were helping Ghorbanifar

233

financially?

A That was Charlie's speculation from everything he
could get. He used to talk on the phone to both Nir and
Ghorbanifar. He shared that with me. A lot of us felt
that — we came to feel that Nir was providing a lot of
assistance to Ghorbanifar.

Q Did Charlie Allen tell you that he was taping some
of these conversations with Nir and Ghorbanifar, the
telephone conversations?

A With Ghorbanifar. Not that I knew with Nir. I
knew he taped -- he taped — he had a tape recorder in his
office for taping conversations with Nir. Not with Nir, but
with Ghorbanifar. Excuse me.

Q Do you know whether he would do that invariably
or most of the time?

A I think he tried to tape all the conversations
with Ghorbanifar.

Q Do you know why he did that? Did he explain that
to you?

A To make sure that he got everything. Much the
same reason that I taped the conversations with

that I could do the translation and give it to

: I could do the translat

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MISSffS

234

Colonel North.

Q Did you ever listen to any of these tapes that
Charlie Allen made of Ghorbanifar?

A No.

Q Do you know whether Albert Hakim was ever a CIA
assetl

A ^^^^^^^^^^^H but I don't think you could ever
call him — on him, but I don't think you could ever call
him a formal asset.

Q An informal source of information?

A I don't think so.

Q Your understanding of the financing of the May
HAWK transaction, did you understand that with respect
to the parts that were available that the United States
was placing any kind of a cap on the monies that —
or the point up to which the value of those parts could
reach?

A No. What we did is checked with the military,
the logistics command on the availability of parts. They
gave us a printout on everything that was available and how
much they could afford to take out of inventory for us.

»miissii;iFfirp

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235

Q When you say we, you mean the CIA collectively?

A The CIA could take out of their inventory, how
much they could afford to let out of the inventory.

Q But I gather you yourself didn't have any under-
standing that if the Army came up with a figure in excess
of, say, $4.4 million, that the Agency would be saying
you can't go above that?

A No.

Q Let me back up and rephrase the question. Did
you -- that wasn't a very good effort, was it?

You, I gather, were not involved in the logistical
end to any great degree in the May deal, is that right J

A No. Just to make sure everything was moving along
all right. Because I had — I wanted to make sure
everything went smoothly. I followed what was going on.
But I didn't do the nuts and bolts, no.

Q Who was handling it that you knew of?

A That shipment would have beei

Q And^^^^^^^^^H would have dealt with logistics
people at CIA?

A Yes. A couple of times when he was busy, I would
do it for him.

Q Did^^^^^^^^^Hhave any involvement in that?

A I think^^^^^^^^Hwa s the guy that gave the
figures to Ollie North on what it was going to cost.

iammt

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m6 1

Q When you got the HAWK list from Ghorbanifar in
Paris, did you yourself bring that back to Washington?

A Yes. I think I myself carried it back.

Q Who did you give that to?

A When we brought it back, we — I discussed it with
We got someone designated by the
Office of Logistics to then take the list and find out the
availability of the parts on the list.

Q You have also testified that by the time you got
to Tehran, Ghorbanifar is telling you that the total figure
for this deal is $24.5 million?

A That was in Tehran.

Q That was in Tehran?

A Right.

Q Did you have any understanding as to whether that
figure in Ghorbanifar 's description of it reached only the
HAWK parts that you had already identified were available?

A He said it was other charges involved in that,
not just the HAWKs.

Q Okay. Let me ask you this: When you came to
Tehran, you had a pallet of parts with you; is that right?

A That is correct -

Q And you also had HAWK parts waiting in Israel
in the event that your negotiations were successful; is

that right?

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17
18
19

20
21
22
23
24
25

mm^

237

A That is correct.

Q However, the sum total of those parts did not
encompass all the things the Iranians had requested?

A No. There were several items that were no longer
manufactured and there were several items on which we did
not have the number on the shelf that they requested.

Q Now did you understand that of some of those items
that either were not in Israel or were not on your pallet
in Iran, that they might become available in the future?

A Yes. We had an idea. Some of them, the
manufacturing process was very low. We would have had
to speed it up to get them.

Q Let me ask you, the $24.5 million figure, did you
have any understanding that that might also encompass
parts yet to come?

A Oh, no.

Q So your understanding was —

A Not that I knew of, no.

Q So your understanding of that was that that
covered the parts waiting in Israel and the parts you
brought with you and no other parts; is that right?

A On that ship^^But Ghorbanifar told me this is
what they owe me. They are going to ask you what the cost
is and there are other things involved in this that you
don't know about. Tell them that that is the right

mi^^nffip

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238

figure. That is when I immediately went to North and
asked him what the hell was going on.

Q Just to make it clear, was it your understanding
when Ghorbanifar brought the $24.5 million figure to you,
that that covered only the parts in Israel and the parts
on your pallet in Tehran and no other parts?

A That was my -- except I don't know about the
508 TOWs. Someone paid for those.

Q Putting the 508 TOWs aside, limiting this to HAWK
parts. Your understanding was it is just the pallet in
Israel and the parts —

A The parts in Israel and the pallet we brought, in.

Q You didn't question Ghorbanifar or anybody else
further on that, did you?

A No. What we did is when I talked to Colonel
North about it and asked him what the hell was going
on, he immediately called Nir and Nir told us there were a
lot- of expenses involved that had to be included in this
figure, and also there were other monies owed to Ghorbanifar
by the Iranians that were also included.

In fact, he went into a long explanation, a great
deal of which I didn't understand.

Q Did North understand it?

A I don't think so.

Q In your testimony, you said that when you found

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ra9 1

out how high — the high figure that was being suggested
for the HAWK parts -- and this is even before you arrived
at Tehran, you had an idea that a high figure was being
discussed — that you mentioned it to^^^^^H^Hand he
agreed that it was too high a figure; is that right?

A Yes. I mentioned to him that — but when we
discussed it, it is that when

Q However, you then get to Tehran and the figure
is high.

A Higher. "

Q Higher. Even higher. Do you recall this figure
which had the possibility of disturbing the whole negotiatio
being pursued by North to resolve it?

A Only that one conversation we had with Nir.

Q How about following Tehran? Do you recall having
any discussions with North about resolving this matter when

fiiHsWbmwHF^b IFip

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240

you are talking to ^^^^^^Hs till complaining?

A Yes. I tSalked to -- we had a lot of
discussions about the pricing, hoping that it wasn't
going to upset the whole apple cart.

Q Did North have any idea what the United States
might be able to do to bring some relief to the pricing
problem?

A Well, there were several things. One of the
things was when I talked to ^^^^^^^^lt|M9isted he haggle
with Ghorbanifar over the pricing. That is when he came
down $6 million. Also, we were looking at ways and means
that we could at least help to cover part of the large cost
in price by saying, you know — by producing -- we were

Lng of producing a document which showed that FMS
sales are -- I think it was 2.7 times the figure given on
those microfiches. We never did it.

MR. EGGLESTON: Did you ever produce a document
to show back to them to justify the prices?

THE WITNESS: The only thing we did was we produced
a letter that we showed ^°H^^^^^B^° give — how
prices are arrived at, which was actually fairly accurate.
In other words, the price that we got — the >pnF<^ things
about it is the price we got those TOWs at was much less
than the Israelis pay for TOWs. On the thousand TOWs Nir
complained about the cost when we sold them.

tjfinkir

804

WKUSSIEIHkT

241

^11 1 MR. EGGLESTON: Because it was too low?

2 THE WITNESS: Because it was too low. Yes.

3 BY MR. WOODCOCK:

4 Q When you first became aware that Richard Secoird

5 was involved, did you have — or were you aware that he -

6 had been considered at one time to be associated with

7 Edwin Wilson?

8 A Yes, I heard about that, but I didn't know

9 any of the details about it.

10 Q Did that cause you any concern?

11 A Well, I was a little bit concerned about that.

12 Secord also is I guess what you would call a "can-do"

13 guy- That appealed to North. North absolutely believed

14 in him.

15 Q I just want to clarify this point for the record.

16 When you arrived in Tehran, or when you were flying to

17 Tehran, did you actually physically land in Bandar Abbass?

18 A No. It was nonstop from Tel Aviv to Tehran.

19 Q Just to clarify the record, or perhaps my own

20 understanding, when you met with Roy Furmark for the first

21 time, I gather from what you said he suggested yet another

22 TOW transaction to clear up the financial problem; is

23 that right?

24 A He said if we would permit Ghorbanifar to sell

25 another thousand TOWs that would get him out of the hole

iiM£ii^:mu;jk

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242

and solve the whole problem.

Q Did you happen to discuss with Furmark how he or
Khashoggi came to be associated with Ghorbanifar?

A No. Our brief from the Director was to listen and
ask as few questions as possible. So -- in other words, we
took the position we didn't know beans from batshit about
this thing.

Q So I gather Mr. Furmark didn't volunteer the
origins of his relationship with Ghorbanifar?

A He spoke very highly of Ghorbanifar and, of
course, he spoke extremely highly of Khashoggi, the salt of
the earth, great man, all that stuff.

Q Let me show you what has been — or bears the
identification number CIIN 1027 and ask you if you have
ever seen that?

A X don't think I ever saw this. But I know for a
fact that Khashoggi is able to get end user certificates
f ron^^^^

Q Let me ask you a couple of questions about that.
This is a cable dated February 4, 1986 and it —

A I never saw that.

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inl3 1

2 A I ^would liJc*"to have seen that. That is the first

3 time I have seen that cable.
^ Q How is it that that kind of information doesn't

5 automatically make its way over to someone in your

6 position?

7 A Oh, a lot of stuff — see, the problem is I am

8 not there every day. No one says hey, George ought to

9 see this. I don't see it,

10 Q Do you know whether^^^^^^^^^| or Charlie Allen

11 are aware of that?

12 A Also, at that time I was not briefed in on the

13 operation.

14 Q You would have come in approximately a month

15 later?

16 A A month later.

17 Q Do you know if Charlie Allen or!

18 aware of that?

19 A They never mentioned it to me.

20 Q Vou testified earlier that in your collective

21 efforts to come up with an explanation for the large price

22 ^°^^^^^^^H ^'^ explanation that he might believe, it was

23 suggested that perhaps it could be — the low price

24 on the list could be explained as the cost to the manu-

25 facturer.

m^\ h

l-rsVjf

T^T-im

807

W^Wi

24-1

inl4 1
2

4
5
6

A I think that is what it is. It is the
manufacturing costs. That is what those microfiche
lists are.

Q Do you recall where you get that information?
Who it was who told you that?

A I think our logistics people told us that.

Q Do you recall discussing that as a rationale with
anyone to run byl

A No. I think that the only thing that we — we
never did anything really but we were thinking North
had the idea of printing up to date microfiches that had
the prices higher.

Q North did?

A But we — we were thinking of printing something
£or^^|^^^|which we never did either that would show that
you can't base the pricing on what is on those microfiches.
Actually, you can't.

Q You also testified that you received a call at •
your home at one point from^^^^^H is that right?

A Yes. He was trying to call at the office and
Charlie Allen gave him my home phone number.

Q Charlie Allen can't speak Farsi, can he?

A No.

Q Do you know how he was able to transmit this

information?

SML

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HNOtASStHilT

2.45

\15 1 A He was able to get the number, you know. I

2 thin)(^^^^^^^|had someone in the office that spoke a

3 little bit of English. Charlie got the number across

4 to him.

5 Q Did you ever get involved wit!

6 discussions to release the hostages in July or release a

7 hostage in July?

8 A Well, all that time, we were — you know, we were

9 saying that we would not -- to ^^^^^^^b that we would not

10 send in the rest of their — of the HAWK spares until

11 the hostage is released or something, or if we could

12 meet. We would do according to the 7 point proposal that we

13 left behind in Tehran. I consistently took that line

14 with him.

15 Q Was it you who suggested at one point that one

16 hostage would be enough?

17 A That came about — I didn't make that

18 suggestion, no. I can't recall precisely who did, but it

19 came about as a result of our talks with Nir on the 20th

20 of July, in which he said they could get another hostage

21 out. And then the decision was made to go ahead.

22 Q So your recollection is that to the extent

23 somebody suggested that maybe one hostage would be enough,

24 that Nir was the source of that?

25 A I think that was based on Nir's proposal to us

in#^-^%'-jCT!n^fffti STH

i till

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ig^B^SStBilkT

246

in London that one could be gotten out if we sent in the
rest of the HAWK spares. I am pretty sure that is the way
it went. Then it was discussed when we got back to
Washington.

Q Did you ever have a conversation withi
where you represented that one hostage would be enough
was the position of the President?

A I don't think so. I can't recall saying that
specifically.

Q Charlie Allen entered a period in July where he
spoke to Nir in lieu of Colonel North. Did he share any
of those conversations with you?

A Some of them when I was around. I wasn't around
a lot of time.

Q Werek'ou aware that Allen had taken over from
North but North had cut Nir off for a period of time?

A I wasn't specifically aware that he had cut him
off. I think what happened is that North wanted Charlie to
talk to Nir rather than have Nir talk to him.

Q Rather than Nir talking to North?

A Since Nir could put more pressure on North than
he could on Charlie.

Q Another thing I want to clarify for the record.
When you have the second channel out to Hakim's office,
we know that Hakim was in the building. Was he in the

^imSSlElEH.

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mmsiRKT

247

a? 1

room when the discussions were going on?

A Not on the substantive discussions.

Q As the second channel developed, did you
have any trouble conveying to Nir that he was now entering
into a subordinate stage?

A A decision was made to keep Nir briefed about the
second channel. One of the surprising things to me was tha
after we returned from Tehran, Nir was still very high on
Ghorbanifar despite what ensued in Tehran, that he had
been lying to both sides. Nir sort of let that go by the
boards as being Iranian business practice. I tried to
argue that it is not quite that way.

So he was still very high on Ghorbanifar, but
we told him we were going to develop a second channel and
actually briefed him on it after it happened. Not in
very great detail, incidentally

811

um»ssmpT

248

Q Let me direct your attention to a reference in the
Tower Report which refers to a deposit occuring on September
26, 1986 of $7 million from Iran into Lake Resources. That
has atootnote reference which reads as follows: "There is
some discrepancy surrounding these dates. The September 26,
1986 date is contained in a PROF note from North to
Poindexter which also contains the $7 million figure. The
CIA I/G report, relying on George Cave, states that!

brought a check for $4 million with him to the
late October meetings in Frankfurt."

Actually that was mine. Do you have any
explanation for that discrepancy?

A I can|t understand what the hell the $7 million
would have been for.

Q Your understanding is that $4 million would have
been sufficient to cover the transaction?

A Yes. I suppose so. Because right after he --
he called up his man and gave him the check and two days
later, we had the $2 million odd dollars in our account.

Q Did you physically see this check?

A No. I never saw it. He just said he had it.

Q It wasn't produced for you?

A It wasn't produced for me.

••A.l2»

812

UMfiHi^tHS^T

249

ml9 1 Q But your understanding was as far as the CIA

2 financial office was concerned, the S2 million came in shortl

3 after the check was produced?

4 A Yes. I think we got it on the 28th. I think it

5 was deposited in our account.

6 Q When you get with the DCI on the Furmark meeting

7 or the subject of Furmark, did he bring up any question

8 about the possible diversion of monies?

9 A No. His great concern at the meeting was this —

10 the going public with the whole operation through the

11 filing of the suit.

12 And the fact that the principals were going to

13 also contact Congress.

14 Q Did Charlie Allen ever raise his suspicions

15 about the possible diversion of money?

16 A Well, we all had suspicions that there was

17 something wrong, but there was so much there to be

18 suspicious of. As I told you before, my main suspicion

19 was the fact that Khashoggi and Ghorbanifar were trying to

20 raise as much cash as possible because of being stung in

21 the April 22 sting operation. Obviously the Swiss banks

22 were worried about the saune thing.

23 Q Why, because of the life insurance policy?

24 A No. What the Swiss banks can do, they can arrest

25 y°^ ^"'^ hold you until you make good on your obligations.

h¥ii

» *%T%lr€dT'l

813

DNt»SSIffr

250

That is obviously what they did with Ghorbanifar. He
denies that he was arrested, I gather.

Q I think he has made that a matter of record. Were
you aware that Ghorbanifar was complaining sometime in early
April about his California girlJf riend' s apartment having
been broken into?

A Yes. He mentioned that at the meetings.

Q Ghorbanifar himself did?

A Yes. When he was here in April.

Q Did he also mention that or complain about
Roy Furmark's office having been broken into?

A Not to me.

Q Do you remember — this would have been --

A I never heard of Furmark until shortly before I
met him.

Q I am going to read this selectively to you
and see if it brings anything back to you. Again this
is -the Tower Commission report. It reads, as a footnote,

"In a series of telephone conversations with Ghorbanifar

and Nir, March 24 to April 2nd, Charles Allen learned that
Ghorbanifar was under pressure in Tehran; that he was passing
through a difficult period financially, but that the
Israelis were helping him."

Is that information he conveyed to you at the time?
A Yes, I think he did.

iiMi5;5:i£i£a,

814

y/msssi^'

251

irk part of it. But y^
jreaking in of his girl*

^21 '' Q The quote goes on, "An NSC consultant reported to

2 Allen that Ghorbanifar was upset in part because his

3 California girlif riend ' s house had been entered, as had

4 Furmark's office in New York. Ghorbanifar blamed the CIA.'

5 Do you recall that?

6 A I don't recall the Furmaj

7 Ghorbanifar comp^tJined about the br

8 friend's apartment when he was here. I never met the

9 girl/friend either.

10 Q You testified that you recognized the reference

11 earlier in this deposition to the Erria and then later said

12 you weren't sure that at the time you knew the name of ■ft^e

13 boat;' is'^at ^^t?

14 A Yes. In fact, I thought it was something else.

15 When it came up, when they made the offer of the tank,

16 that is the first time I ever was aware that there was a

17 boat involved, because Ollie discussed this that we could --

18 they had this boat that was in the Mediterrfmean and they

19 could have it — change its sailing orders and go to

20 Bandar Abbass to take on the tank. Which it did.

21 Q Do you now believe that boat to have been the

22 Erria?

23 A Yes. This comes out from subsequent press

24 coverage. I didn't at the time know the name.

25 Q In your negotiations with the second channel.

_jimASSiffia„

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252

were Israeli prisoners ever on the negotiating table as
being possible subjects of release?

A Yes.

Q How did that happen?

A I think in the initial — it came up because
we were also talking about the 300 sJrtSnthat were being
held by the Israelis.

Q Would that have required more negotiating than
just with Iran?

A I don't think so. We asked the Iranians if they
thought it possible. I guess it was one of the Israelis
that was killed, but one of them was still alive. It was
a pilot that came in later. We talked — we talked -- I
think we only talked about it on one occasion. They kind
of screwed up their eyes, but said they would look into
the possibilities because we said that any -- as I recall,
any release of the 300 being held would certainly be
contingent on Israelis being released and probably
some kind of guarantee.

Q There was a point, I gather, that you made an
attempt to bring your concerns to Colonel North about

816

tlH%KSSKfi&'

253

m23 1 Ghorbanif ar; is that right?

2 A Yes,

3 Q But that was kind of an effort cut short; is that

4 right?

5 A Well, as I was mentioning to George, there

6 is -- there were a lot of countervailing views about

7 Ghorbanifar and people changed their opinion of him. I

8 think that the biggest thing he had going for him was the

9 fact that he had played a role in securing the release

10 of both Weir and Jencf o . In other words, Ollie likes people

11 that are successful in doing things.

12 Q But I was asking a somewhat different question.

13 You had reservations about Ghorbanifar?

14 A Yes.

15 Q That go long back in your career?

16 A Yes. '

17 Q Did you attempt to bring those to North's

18 attention?

19 A I did.

20 Q Did he react to that at all?

21 A Yes. His reaction is that what you say maybe is

22 true, but he has demonstrated that he can produce, because

23 he produced Weir. That was the initial, when I first

24 started.

25 Q Did you ever bring Ghorbanifar back to North when

817

missm

25-1

m24 1

the finances began to go awry as proof of your
opinion of Ghorbanifar?

A Yes. And also I thought that his performance in
Tehran had been such that we should be extremely chary
of him and made my views clear there. And the Iranians
told us flat out in Iran that they didn't trust him.

Q Did you have any dealings with anybody in the
State Department in these transactions?

A Not specifically with this. The only time it
came up is I had a meeting — I think it was!
I don't know if Clair George was there or not. We went
over before the last trip to Geneva, that is the 8th through

818

UHQASSIB^T

255

m25 1

Q Did you have any dealings with anybody in the
Department of Defense?
A I didn't, no.

Q Do you know whether other than logistically or
in —

A ^^^^^^^^^H dealt with, what was his ncune,
Jamie Rizzo? I forget his name. He was the head of
logistics.

MR. EGGLESTON: There was a Russo.
THE WITNESS: Russo. That's it.
BY MR. WOODCOCK:
Q You already testified to the possibility of
danger in your trip to Tehran. Did you have any plans
i.n the event that you were seized and held captive?
Run ^^^^^^^^^^^^^^^^^BI There
weren't many places you could go from the 15th
floor of the Hilton Hotel.

Q Are you a subscriber to the Big Sting Theory?
A No. I think the Big Sting Theory was developed
by the Iranians to protect the participants.

MR. VAN CLEVE: For the record, I assume you are
referring to an article that appeared two weeks ago?

MR. WOODCOCK: That is right. That is a
capital B and a capital S and probably a capital T.

819

UHGUSSIBlEftiT

256

m26 1

THE WITNESS: The Iranian comments on this are
so typically Iranian, The most interesting aspect is that
Khomeini has never really condemned the initiative.

MR. VAN CLEVE: Somebody may have asked you this
question, but what is your view about what Khomeini knew
about the Tehran trip at the time it took place?

THE WITNESS: I am certain he did not know we
were there.

MR. VAN CLEVE: He did not know? Before, during
or after?

THE WITNESS: Not until sometime after. I
place it as sometime in August-September. Andl

[told us that he didn't know about it also.

I was certain because that is -- and I was sure that that

is why we didn't see anyone becaus'no senior Iranian would

take the political risk of doing it unless they had the
blessing of Khomeini. Since no one showed up -- the best
that we can put it together is that^^|^^^Hbroached it .
to him sometime in late August or early September.
BY MR. WOODCOCK:

Q In your meeting in Tehran, was the Iranian
assistance to Nicaragua ever on the table?

A Yes.

Q That was their assistance both in terms of oil

and arms?

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DNtmffiiT

257

A Yes. They denied it.

Q They denied they were doing it?

A Yes. We volunteered to provide them proof.

Q Did they take you up on that?

A Yes. But we — where is it? Well, we didn't
bring it with us. Part of the problem you have as I
explained before is when I was translating, you know it's
very difficult when you translate to remember what the hell
it was that you said.

Q When McFarlane made it plain that he was going
to leave unless the -- his conditions were met, I gather
from your testimony the Iranians asked for some additional
time; is that right?

A Yes. There was a lot of different — when they
saw — North and me stayed behind, and they'll get them.
He said no, we are all going to leave together. There
was a little bravado in that. At the time we made the
announcement, we still had a plane with no fuel in it.

Q But the Iranians asked for more time and I gather
McFarlane gave them a certain amount of additional time;
is that right?

A This was the night before we left. He gave them
until the following morning,

Q Did he leave before that time expired?

A No. We left sometime after. Even going out

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n28 1

to the plane, the Iranians were begging us to stay.

MR. WOODCOCK: Let's go off the record.

(Discussion off the record.)

BY MR. WOODCOCK:
Q Mr. Cave, I have no more questions. I did want
to go back on the record to express my appreciation for
your patience and for your forthrightness.

MR. EGGLESTON: Thank you.

MR. VAN CLEVE: Thank you very much, Mr. Cave.

(Whereupon, at 6:00 p.m., the deposition of
George W. Cave was adjourned.)

]M£U£SMa.

822

823

mmim

q\^|2'^

TAPE ONE (Sides 1 and 2) - TWC/nsd

' 1 UNITED STATES SENATE

2 SELECT COMMITTEE ON SECRET MILITARY

3 ASSISTANCE TO IRAN AND THE NICARAGUAN OPPOSITION
4

5 DEPOSITION OF GEORGE CAVE

6
7

8 Present: George Cave, Deponent

9 Timothy Woodcock, Senate Iran/Contra Committee

10 Jaclc Taylor, House Iran/Contra Committee

11 David Pearline, CIA — Office of Congressional

12 Affairs

13 Paige Moffat, Office of General Counsel
14

15 Cave ("C")

16 Woodcock ("W.")

17 Taylor ("T.")

18 Pearline ("P.")

19 Moffat ("M.")
20

22 Let me state for the record my name is Timothy

2 3 Woodcock. I am an Associate Counsel with the Senate Select

24 Committee on Secret Military Assistance to Iran and the

25 Nicaraguan Opposition. Participating from the House is Jack

26 Taylor, representing the House Iran/Contra Committee. George

27 Cave is present as the deponent. David Pearline is representing

28 the Office of Congressional Affairs/at CIA. Paige Moffat is here

29 representing the Office of Gener^ Counsel.

30 Mr. Cave, before we begin, let me make it clear that

31 this is a statement that we will be taking from you pursuant to

32 the authority of the Senate Select Committee. The information

3 3 that you give us will likely be used in the furtherance of the

34 Committee's investigation under its resolution. Do you

35 understand that? PwtmyOeciassitwjmeleasedon.ilJ.liiy'SS

unde< provisions o( E 0 12356

36 CAVE: Yes I do. by K Jonnson Nanonil Stcurily Council

37 WOODCOCK: Thank you.

:>pics

UNCLASSIFIED

824

Kussife

1 EXAMINATION OP GEORGE CAVE BY MR. WOODCOCK:

2 w. Mr. Cava, l«t m« cover soma of th« aarly ground h«r«

3 with you when you first became involved in the Iran initiative.

A Mr. Cave, we have come across entries that Col. North made before

5 and after the meeting in Frankfurt, Germany in February of 1986,

6 stating that he was forced to use Albert Hakim as a Farsi

7 interpreter because the CIA could not produce a Farsi speaking

8 interpreter. For the record, could you state whether you would

9 have been available to petform the task at that time. This is

10 February 2S-26, 1986.

11 C. As far as I know I could have been made available.' in

12 fact — I was in Europe at the time of that meeting. Either I

13 was — I was either — I was in Europe immediately — either

14 immediately preceding or during it, because I returned to the
United States the February .^^^^^^^^^^^^^^^^^H

l6^^^^^^^^^^^^^|m But, presumably could have been made

17 available to translate for that meeting.

18 w. And I take it from your answer that you were not asked

19 to participate, is that correct?

20 C. That's correct. I knew nothing about this initiative

21 until the Stb of March.

22 w. Thank you Mr. Cave. Let me turn to the early days of

23 your involvement in this initiative. I believe you have

24 previously testified that your first meeting with Mr.

25 Ghorbanifar, in what you then understood to be the Iran

26 initiative was in Paris in March of 1906, is that correct?

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1 C. That's correct. That's corract.

2 w. Bafora you want to tha maatlng in Paris, Z ballava you . .

3 hava alraady tastlflad that you wara brlafad by both^^^^^^^H

4 who althar was alraady Chlaf NE, or about to bacoma Chlaf NE, and

5 Charlas Allan. I* that corract? ^y-x^

6 C. I was brlafad by bothH^HH|||m and I mat Col.

7 North, I think, tha aftarnoon of tha day wa laft. I think I met,

8 as Z racall, Z also mat Charlas Allan, but did not gat much of a

9 brlaflng from him at that tima. Zt was only latar, aftar I got

That's whan Z ovar tha old [ ? ] ^^^^^^^^^^H

11 ^H|^^P|[lntalllganca.

12 w. Tou want ovar that with Charlas Allan?

13 C. Aftar Z raturnad from tha first maatlng in Paris.

14 Air^f^- *<"f' Cava, Z'd Ilka you to racall tha maatlng wlthj

15 ^^^^^H and Z'm raally asking somathing specific. As Z recall,

16 whan Z Intarviawad you, along with many other Congressional

17 representatives, back in March of this year, YQuj;elatad that

18 whan you wara brlafad on tha inltiatlva by^^HJH^Byou

19 recommended to him that no — Z think tha phrase you used was "no

20 serving officer should participate in this initiative." First,

21 is that corract, and second could you expand on that idea?

22 C. Aftar I heard about tha initiative Z. Z recommended to
23HIJHI[^^Band I think also to Clair George, that the

24 participation in tha operation by serving officers should be as

25 limited as possible in that it was quite apparent to me if this

26 operation ever blew, you know, careers would be In Jeopardy. And

mmim

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1 sine* I was an annuitant, it didn't matter. ^ yv I ^

2 W. Mh«n you mad* this remark to^^^^^^HHand Mr.

3 George, what was their reaction to it?

4 C. Well, they agreed that, you know, that this was a high-

5 risk operation. And I think every attempt was made to keep the

6 knowledgeability of the operation to as few a people as possible.

7 w. In order not to imperil as many, or in order to imperil
6 as few careers as possible? ^^

9 C. Partially that, but I think also that the security of

10 operations is a great concern to us.

11 w. Well, for those two reasons. Is that a fair statement?

12 C. I think that's a fair statement. I, I mean we had to

13 involv-i people in it as it progressed. But, I mean, there was a

14 conscious attempt not to unduly involve officers, serving

15 officers, in the operation.

16 w. There is a statement in the Tower Report, and I don't

17 know whether you are familiar with it. It's a footnote. It

18 comes from the testimony of Clair George where he states, and I'm

19 going to paraphrase him, that 'George Cave joined the initiative,

20 and somewhere along the line, became a player." Do you agree

21 with that characterization?

22 C. Well, I, I'm not sure. It's obvious that statement was

23 taken out of context, and I'm not really sure what Clair's Intent _.

24 was. Because everything I did, I reported back ^°^^^H^H|E.

25 I naturally became a player in the initiative because I got more

26 and more involved in it. And though I think Col. North relied

BUSSSatD

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lIHCmSuO

1 more and more on m* as It went on, because of my understanding of

2 Iranians. But, I certainly psported everything that I did back

3 to, back both to^H|H|ff and in many cases directly to

4 D i rector Casey ,
5
6
7

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UNtlASSIFiEO

w. L«t iM aak you another question on th« February TOW
deal. NOW, understanding that you came on the scene after this
deal had been completed, you nonetheless had an opportunity to
speak to many of the participants in that transaction. Secord,
Hakim, North, Ghorbanifar,H|^^Hat one time or another. ■

ilHSUSSffl

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1 ^^^^H in his tastifflony b«for« th« Towar Board •xpc«ss«d th«

2 opinion that ha baliavad that tha lOOO tons of Pabruary wara

3 supposed to, by thamsalvas, spring a hostaga. I thlnJc

4 Ghorbanlfar and othars hava takan tha position that tha 1000 TOWs

5 was a good faith makaup for tha abortlva HAWK shlpmant of

6 Novembar of 1985. Did any of tha paopla that you participated

7 with axprass an opinion on what was supposed to hava been

8 achieved by the February TOWs? L^/ai^

9 C. If my understanding was the same asim^^that this was

0 supposed to cause a hostaga to be released.

1 w. Do you recall where you gat that understanding?

2 C. Z think it was f ron^m as best I can recall, because

3 I remember after Z was briefed, Z think ha told ma that he — we

4 had expected a hostage to be released, but now we are going —

5 you know the meeting with Ghorbanlfar will ba an attempt to sort

6 out some of this and see what tha Iranian position is.

7 w. Are you referring to tha March meeting with

8 Ghorbanlfar?

9 C. March meeting with Ghorbanlfar, yes.

20 w. Did tha — cjmc

1 C. Z recall, I recall before we went thatj^^said that we

2 had expected tha 1000 TOWs to result in a hostage being released.

3 w. Did tha subject coma up in Paris as to why a hostaga

4 had not been released?

5 C. I'm trying to recall exactly what was said with regard
26 to that. Z think that tha way Ghorbanlfar explained it in Paris

' ONCL^SSiFIED

830

UNCUSSIFIED

1 went along these lines: that the Iranians were now convinced by

2 the TOW, the TOW shipment, excuse me, the TOW shipment that we

3 had good intentions, and that they were now prepared to meet with

4 us and discuss the future of the strategic initiative between the

5 two countries, and it also — in that meeting he proposed that

6 we'll sell them the HAWK spares, to sort of cement the deal. And

7 that's when he turned over the list of 240 line items. But

8 that's about how it went. I mean, we had, the, the 1000 TOWs had

9 established the U.S.'s good intentions, and the Iranians were now

10 prepared to respond, and he had preliminary agreement to a

11 meeting in Iran between senior U.S. officials and senior Iranian

12 officials.

13 w. Now, you were, at this point, a Johnny-come-lately to

14 the negotiations, so I gather you were not some much an active

15 participant in Paris as you were an observer. Is that fair to

16 say?

17 C. That's fair to say.

18 w. what was — Col. North himself was present when

19 Ghorbanifar was making these remarks I would gather, is that

20 correct?

21 C. That's correct. The way the meeting was structured is

22 that we went immediately from the airport to the hotel, end we met

23 initially with Amiram Nir, and then he went out and brought

24 Ghorbanifar in.

25 w. And Nir was present through the negotiations as well?

26 C. Nir was present through all the negotiations.

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y{«s::B

1 W. Did North have a reaction to Ghorbanlfar's statement

2 t'hat the 1000 TOWs had simply shown that the United States was

3 serious?

4 C. I don't recall. I thlnJc he said something like, it

5 damn well should have shown him that we are serious, something to

6 that effect.

7 w. Do you recall him saying anything about, you know,

8 where Is our hostage?

9 C. Uh, there was some discussion about, you Icnow, the

10 great disappointment on our end, about not — the 1000 TOWs not

11 resulting in the release of a hostage, but I don't recall the

12 exact words at this point, and I didn't make any notes on that.

13 w. Let me — I'm going to quote from what now is known as

14 the famous diversion memo that North is supposed to have written

15 in early April of 1986. That memo, which is really quite an

16 extensive memo, contains a retrospective on the Iran initiative

17 up to that point, and it contains a paragraph that reads that,

18 that, I'll quote, "the USG [meaning U.S. Government] would

19 establish it's good faith and bona fides by immediately providing

20 1000 TOWs for sale to Iran. This transaction was covertly

21 completed oa February 21, using a private U.S. fainnan[?] and the

22 Israelis as intemwdiaries." That paragraph appears to line up
2 3 with those who would take the position that the 1000 TOWs was a

24 good faith gesture on the part of the United States, but did not

25 bind the Iranians to come up with a hostage. Do you recall any

26 discussion in this early April period about this matter?

nblh

832

UNCUSSiHEO

1 C. It's a difficult question for me to answer, because,

2 you know I was brought in after the fact. But I do recall, there

3 was some disappointment that it hadn't produced any motion

A whatsoever on the hostages. And I can't, I can't at the moment

5 recall the exact words and who said them, but I know among the

6 people who were involved that there was some disappointment that

7 there had been no motion whatsoever with regard to the hostages.

8 The Iranians just took the 1000 TOWs and that was it. And it

9 wasn't until we met with Ghorbanifar in March that we got some

10 explanation. And this is where the idea of this, you know, good

11 intentions being established by the shipment, came from —

12 W. From Ghorbanifar.

13 C. — to the best of my knowledge —

14 w. From Ghorbanifar.

15 C. — yes from Ghorbanifar, saying that we had established

16 our good intentions with the Iranian government and that he had

17 succeeded in getting in getting a commitment for a meeting at a

18 future date in Iran.

19 w. All right. I'm going to move on to another topic. The

20 — let me turn to the meeting in Tehran. In Tehran there were a

21 series of neetings over four days, and I gather from your

22 previous testimony one of the immediate disappointments on the

23 United States' part was that no one on the Iranian side

24 commensurate with McFarlane's ranking appeared to negotiate, is

25 that correct?

26 C. That's correct.

UNCLASSIFIED

833

wiASSife

I b«li«v« on the second day, an Iranian official by the

showed up, is that correct?
That's correct. He was the most senior official we met

with.

1
2
3
4
5
6
7
8
9
10

11 ^^^^^^^^^^_^^^^^^^^^

12 M. And he --^^^^^I^H^^^*^ became a name that was

13 raised In the very later stages of these negotiations with the

14 second channel. Is that right?

15 C. That's true.

16 w. Old you realize at the time — Z know you realized It

17 later — but did you realize at the time that the Iranians did

18 not know who HcParlane was?

19 C. No, we didn't realize that they didn't know who

20 McFarlane was until after we met with the second channel in

21 September.

22 w. Let ne ask you this. This is a minor point, but the --

23 one of the reasons ascribed to the failure of the Tehran

24 negotiations was that they coincided with Ramadan(?). Is -- late

25 May, is that the period for Ramadan?

26 C. Ramadan is based on a lunar calendar, so it changes

w3Mvm

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834

ytliASSlFlti)

every year. It's really bad when It's during the hot months,
because you Icnow they can't drink water or eat all during — and
you have a longer period of light. So, they were pretty
frazzled, you know, when we had a meeting during the day. By the
time it was over they were pretty frazzled since they couldn't
drink anything and they couldn't eat anything.

w. But that was the holy period they were observing in
late May, is that correct?

C. Yes, and based on the current situation in Iran they
damn well had to observe it.

w. You didn't notice any shirkers, is that right?

C. I didn't notice any shirkers — except Ghorbanifar
[ laughter ] .

w. Well, he's sewage in Aris(?). There are entries in the
Tower Report, and we have them in our files, of encrypted cables
that McFarlane sent out of Tehran. Were you familiar with how
the communications system was working? I mean, how was it that
McFarlane was able to comnunicate with Washington?

C. We took two communicators, two CIA communicators which
I arranged for, and I did the briefing of them^
was kept — stayed in Tel Aviv as a backup!

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ustmsw

/:)

Tfi,U

[8>!:r

2
3
4
5

6 w. When you arrived In Tehran, everyone was removed from

9 the plane at one point, is that right?

10 C. When we arrived in Tehran the crew was left on the

11 plane because they had to taxi it across to the military side of

12 the airport.

13 w. But eventually there came a point when all the '

14 Americans were separated from the plane, isn't that right?

15 C. That's true, that was our first crisis and I had to

16 straighten that out. And it turns out that the reason why the

17 Iranians wanted everyone off was that they wanted to go over the
la plane with a fine-tooth comb, which they did. And then after

19 that everything was all right.

20 w. Now, was it at that point that they removed the HAWK

21 parts?

22 C. No. They removed the HAWK parts on the day we arrived,

23 immediately. Oace the plane was taxied over, over to the

24 military side of the aircraft, the three — the four crew members

25 that were on the plane said that they just came and unloaded the

26 plane. Wasn't much they could do about it. So they told us that

yNCUissra

837

UNCLHSSira

1 wben thay showed up at th« hotel. They said they have already

2 unloaded the HAWK parts.

3 w. Was that considered a problem at all?

4 C. Well, there wasn't much that we could do about it

5 sitting on the ISth floor at a Hilton Hotel. We didn't know what

6 was going to happen when we arrived anyway.

7 w. But that, I gather, didn't fall into the category of

8 crisis?

9 C. Not really. We were far more concerned because they

10 wouldn't refuel the aircraft.

11 w. Did you complain to the Iranians about having simply

12 removed the HAWK parts?

13 C. Yes Z did, but they — this was kind of ~ this was

14 sort of amusing. ^^^^^^^1 being a rug merchant, came up to me,

15 when we had our initial meeting in the hotel and said, "you've

16 sent us used parts." And so, I said, you know, I got mad at that

17 and said, "you know you weren't supposed to unload them until

18 after the hostages showed up." And then he complained that we

19 only brought a very small amount of spare parts. And I said,

20 "well, that's all we could fit on the airplane." And he says,

21 "well, it didn't take up hardly any space." I said, "yes, but we

22 only had, we had to fly so many hours that we could only take a

23 certain amount of weight." And we haggled like that. And then,

24 the funny thing was, is when the crew showed up and I told -- you

25 know, we were talking to — I asked him about the parts then.

26 And they said they took them off. And I said, "well, what did

IINH! lij;jJ.IF!Fn

838

yiUSSlFlEB

1 they do with them." He says, "well, when we left they were still

2 sitting on the tarmac. They hadn't opened it up or anything. So

3 how this guy knew they were used before they had even opened them

4 up, I don't know.

5 w. The Tower Report contains rather complete notes of each

6 day's meetings in Tehran. Do you know who the main note-taker

7 was for the Americans?

8 C. Mr. Teicher and Ollie North both took extensive notes.

9 I was doing a lot of the translating, so I couldn't take many

10 notes, but what I did do, and you have a copy of my memo on the

11 trip, I did — I tidied to write down significant points after the

12 meetings were over, and at those times, and since Z sold(?) it,

13 Teicher and Korth were taking extensive notes, Z didn't bother to

14 take them. I just, Z just wrote down what Z thought was

15 significant so we could compare notes later.

16 w. Now to get this straight. You — we do have a copy of,

17 z think a 3 or 4 page single-spaced memorandum that you created

18 on your visit to Tehran. Z want to understand your testimony on

19 this. These were based on notes that you made shortly after each

20 meeting, is that correct?

21 C. Yeah, usually, because Z would, Z would do — Z did

22 most of the translating, when Z was hoarse, Ghorbanifar with the

23 — because we kept catching Ghorbanifar translating inaccurate,

24 and finally^^l^^^^Vgot so upset with him, you know, that he

25 jumped up at one point and said, "Mr. Ghorbanifar, you must

26 translate accurately." Because Z had already corrected

llllASSinED

839

mmim

1 Ghorbanlf»r, you know, several times on mistakes that he had

2 'made, which made, made what the Iranians say a little bit

3 different. And then when he translated the English back, it also

4 came out a little bit different. Favoring, you know, positions

5 that he wanted to favor. But, I did make — usually after the

6 meetings were over Z would write down, I had a steno pad, I would

7 write down what I thought was significant. And then, based on

8 those rough notes, immediately after I returned, I put together

9 that 3-page single-spaced report that you have.

10 w. From what you later learned aboutj^^^^^^^K was he of

11 appropriate rank to be meeting directly with McFarlane?

12 C. I, as the scene — as we learned more about it from

13 hindsight, yes, because no senior official was going to risk

14 meeting with McFarlane at that juncture because, as we later

15 learned, Khomeni was unaware that we were in Tehran. And also

16 the Iranians knew that Nir was an Israeli.

17 w. They knew at the time that he was an Israeli?

18 C. Yeah. They knew at the time.

19 w. How do we know that?

20 C. We were told, we were told by the second channel that

21 in order to protect himself, Ghorbanifar had toldj^^^^^f And

22 ^^^^HVwas not about to take that on his shoulders by himself,

23 so he reported It. So I think those two factors weighed against

24 us seeing any senior official, and quite possibly the fact that

25 they didn't know who McFarlane was.

26 W. Did McFarlane actually sit down face-to-face with

yNCUlSSIFlES

840

ffiaifiSitiB

C. y«s, ha did, on the second day. The Initial meeting on
the second day. And then after he, after we began to see all the
problems, he said, "well, tallc to my staff, and if there is any
breakthrough, I'll tallc to you.* And the last evening that
^^^^^^^■come up to me and said "I'd like to talk to Mr.
McFarlane." And we had — it was a brief meeting. And that's

8 when McFarlane said, "O.K., I'll give you until 7:00 tomorrow

9 morning . "

10 w. When McFarlane finally decided to leave, was that
H direct — did he c(v«itunicate that directly tc

12 C. Uh, no, the only persons that were there when we

13 decided to leave were, ^^^^^^H and

w. That'sl
C. Yeah.

w. Andj^^^^^^H is another name for him?
C. Yeah. And he has a couple other names, too. But, we -
19-1 toldH^^^H we are leaving, and he kept begging me to

20 stay. And we just packed up everything and went down in the

21 lobby, and so — iH^II ''*'*^1' can't you stay up here till we

22 get the cars? We don't want you hanging around the lobby." So,

23 McFarlane — we all stormed down, and they arranged for cars, and

24 they drove us — One interesting thing Is, I don't know what if

25 something happened in Tehran, but they did not drive us the

26 normal route to the airport. They took us through back streets.

mmE

841

UHCUSSlFiED

1 W. Mr. Cave, w« took a momentary diversion here ta change

2 the tape, using the word in it's more comnonly-lenown sease. You

3 were saying that you were not certain whether anything ted

4 happened In Tehran, but that you noticed that they took you to

5 the airport by an Indirect route. Is that correct?

Yeah. ^^^^^^^^^^^^^^^^^^^1 there Is a qilck

7 route, a kind of like a super highway that you can take from the

8 hotel that goes right out to where the big, the big moisnent is.

9 And then It's directly Into the airport. We went throu^ back

10 streets all the way from the hotel to the airport. I doK't know

11 If there was ^ reason for that or not. Ghorbanlfar apparently

12 has reported that there was supposedly mobs out looking for us.

13 Z don't know If that Is true or not.

14 w. There was an article In, I think U.S. News and world

15 Report back In March of 1986, or excuse me 1987, which eas

16 entitled "The Big Sting." And I think that In that article they

17 also postulated that a group of dissidents was looking far you to

18 seize you and embarrass the regime. I gather you haven't been

19 able to confirm that one way or the other.

20 C. No. Wa have never been able to confirm that, ad we

21 just draw a blank from the second channel.

22 W. But you did ask him?

23 C. Taah, «a asked If there was any prob — whan wa

24 discussing the problems about —with the second channel abcut the

25 trip to Tehran, whether he told us they didn't know wbe

26 McFarlane was, that Khomenl had not kno«m that we were la town.

flliSSlrlED

842

iJCUSSIFlEO

1 We went into some other things liJce that, and one of the things

2 that came — they didn't Icnow, or else they just weren't going to

3 tell us, that anything happened. But they just said, there was

4 no problems that they knew of.

5 w. Mr. Cave, did you have a poison pill on this trip?

6 C . No .

7 w. Do you know whether either McFarlane or North or

8 Teicher had such a device?

9 C. I'm absolutely certain they didn't. I think the poison

10 pill story came about — there was a proposal that North and"^© in

11 in April with Ghorbqnifar to do some preliminary discussions with

12 the Iranians. And there was some talk then that, you know,

13 that's pretty risky, and especially since what North and you

14 know. North, I think at one meeting, maybe we should take an LT —

15 they are called L tabs. Incidentally, and, uh, I don't think

16 there was any real serious consideration given to it. I didn't

17 give any serious consideration to it anyway. I told him if

18 things go wrong I'm just going to become a nyyLlah. [laughter]

19 w. when there is no choice there's no problem. I believe

20 in his testimony Col. North said that in fact he did have such

21 appeal and that he got it from CIA. To your knowledge he didn't

22 have such a pill?

2 3 C. Not to my knowledge. I don't think he said he got one.

24 Didn't he say that they were just considering it?

25 w. I understood his testimony to say that he actually

26 received one.

UHCLASS!F!EO

843

ONCUSSIHEO

1 -CI don't--

2 T. I thought he said he had one, too. I thought that he

3 said It was offered to him.

4 w. I believe he said it was offered to him, in the event

5 he wished to use one, one was offered to him.

6 w. Let me just note for the record that this new voice is

7 Jaclc Taylor.

8 T. Yes.

9 w. For the transcriber.

10 T. I believe I recall that one was offered to him by the

11 CIA. Now whether or not he took it with him or not, I don't

12 know. I'll have to check into that.

13 w. But assuming that that is what he said, to your

14 knowledge, he wouldn't have had such a pill, is that correct?

15 C. No, not that I know of, and, I was never offered one.

16 I just remember that the discussion came up, you know, maybe we
l1 should, just in case, and — but no offer was ever made to me to

18 take one, and I wouldn't have taken it anyway.

19 w. Mr. Cave, in the — again in the Tower Report, and I

20 believe also in your, in your notes, you came back from the

21 Tehran mission with the conclusion that irrespective of other

22 considerations that the Da'wa prisoners were going to remain a

23 major impediment to any, any real progress on the hostages. Is

24 that correct?

25 C. Yes. When I came back and reported to Director Casey,

26 I said that I thought the most serious problem confronting any,

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844

yNGlASSlFlED

you know, wholesale release of hostages was the Oa'wa prisoners.
In line with that I also told them that from my talks with the
Iranians, I concluded that they could spring a couple of them,
and I told Director Casey that I thought we'd two, two out, based
on this operation. But no more than — the hostage takers would
continue to, continue to hold hostages until there was some

w. Now, when you apprised Director Casey of your opinion
of the importance of the Da'wa following your meeting in Tehran,
did you also apprise him of your opinion, and I think you've
testified to this in other depositions, that the hostage holders
in Lebanon were extremely independent and were likely to insist
on their demands, no matter what?

C. The way I put it is that the Iranians have influence,
but they don't control the hostage takers. There are — I think

845

UNCLASSIFIED

1 I — there are two separate Shl'lte communities in Lebanon. And
2' the—

3 w. I think you did describe the one in the valley, in the

4 B^kka Valley, and then there is the Urban group, is that the

5 correct distinction?

6 C. The Southern Lebanon — actually — in fact they are sort

■fi.jJs.fit-'

7 of the last renuiants of real futlliwn in Lebanon were among the

8 Southern Shi 'ites. The Shi'ites in the Bakka valley tended to be

9 pretty fiercely Independent. And anyone that is familiar with

10 Lebanon, the area, would say the same thing, so — since no one

11 else has ever been able to fully control those people, I don't

12 see how the Iranians could.

13 w. Well, that brings up another questions. There are —

14 there were points at which consideration was given to, I think,

15 the Israelis pressuring Col. Lahad to release Shl'lte prisoners

16 that he had with his Southern Lebanese army. I gather from what

17 you are saying that since those Shi'ites were probably from a

18 different Shl'lte comnunity that would not have had great

19 Influence on the Shl'lte In the Bakka valley, is that correct?
20
21

22 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

23 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^1/ The

24 interesting thing though is the hostages held by the Phlange, or

25 the prisoners held by the Phlange that were Shl'lte — the Iranians

26 seemed to say well, that's a Lebanese problem, let them sort it

iiNd! mMn

846

KUSSKD

1 out. They weren't too interested in any motion, you know in

2 getting those people released. They said the Phlange and the

3 Shl'lte will sort that out themselves.

4 w. Also participating in the Tehran negotiations, and I

5 think you have already mentioned them, what this

6 ^^^^^^H I think true name is in ^^^^'^j^H^^^H

7 denominated the monster during those meetings by some of the

8 Americans according to Albert Hakim. First, were you familiar

9 with that aabcae and are you familiar with where he picked it up.

10 C. This came about after the second channel, and he did

11 not participate in the meetings in Washington, but he did

12 participate in the first German meetings in Frankfurt on the 8th

13 through the 10th of October, and I don't know whether it was

14 Albert Hakim--I thliik it was Albert Hakim that sort of gave him

15 that 8eiHP«e, the monster. And he's a very hard negotiator. But

16 a very Impressive guy.

17 w. I had understood Hakim to say that he received that

18 nickname in Tehran, is that at odds with your recollection?

19 C. Yeah, that's at odds with my recollection. I don't

20 recall that name being used until after we — in fact I found, of

21 the other people we dealt with outside °'^^^^|^H ^ found him

22 in Tehran to be the one most interested in some kix)i| of a

23 breakthrough. In fact, he's the one that told me — I was the last

24 one on the plane to leave, and I was talking to he and]

25 and they emphasized, look, you know if this thing falls through

26 we should still talk to one another.

IINCUSSIRE!)

847

UNCUSbiritO

1 w. Hakim /also r«f«rr«d to^HH|Hfs the angina. And

2 this was a tarm that ha davalopad hlmsalf In tha coursa of his

3 daposition, but ha rafarrad to him as tha angina bacausa ha saw

4 him In tha second channal maatlngs as tha driving forca behind

5 tha negotiations. Would you agree with that characterization?

6 C. Uh — we had — there was a big debate about — there was

7 arguments on the American side about who was tha more Important

8 one. You know, the relative °^^^^^^^m ^ always thought the

9 relative was more important because he spoke — you know when an

10 Iranian speaks with authority you can usually tell it. I mean,

11 ^'l^t^^^^^^^H they always thought that he wanted to check back

12 with someone before he agreed to anything. Whereas tha relative

13 was able to take a proposal and decide whether to go ahead with

14 it or not. There was some disagreement among the Americans on

15 who was more important. I think that one of the, one of the

16 Important things though was — he was the sole person we saw at the

17 last meeting.

18 w. That's the meeting in November, or the one in December?

19 C. At both meetings. The last— ha came out to talk to

20 North. Secord, Hakim and myself in Geneva at the beginning of

21 November. And then ha also came out for the meeting in December

22 with myself and Ambassador Dunbar.

23 w. Let me just take a moment here while I look up a

24 reference. The record should reflect that there was a S-mlnuta

25 break here for everyone to stretch his legs. We are now back on

26 tha record. Mr. Cave, I want to see if you can reconcile what Z

UNCLASSIFIED

848

UNCUSSIFitO

1 think is an inconaiitcncy in th« reports that %r«r« mad* on tha

2 negotiations in Kuwait on a particular point. And that is—

3 cm Kuwait?

4 w. Excuse me, in Tehran. I've got Kuwait on the mind, in

5 Tehran. As you've already testified to, the subject of the Da'wa

6 prisoners arose while you were negotiating in Tehran. And in

7 your, in your suimary you recalled that North addressed this

8 point and you quote North as saying that the United States would

9 not interfere in the internal affairs of Kuwait, particularly

10 where Kuwaiti due legal process had been carried out. Is that

11 consistent with yoMr recollection?

12 c. Yes, that's consistent with my recollection.

13 w. Now, the Tower Report has one of the note- takers taking

14 down the following exchange, ^^^^^m^aying our dispute is

15 over the lack of complete agreement, what can you say about the

16 blank, or it doesn't say blank, the held in Kuwait, is the way it

17 reads. There is a word missing. Then it has North responding.

18 It says, "North proposed a statement like: the U.S. will make

19 every effort through and with international organizations,

20 private individuals, religious organizations, and other third

21 parties in « humanitarian effort to achieve the release and just

22 and fair treatment for Shi'ites held in confinement as soon as

23 possible."

24 C. That's accurate except for the release part.

25 w. Now, do you have a specific recollection that that is

26 wrong?

AJj^iFltU

849

UNCLASSIFIED

1 C. Y«s I do. What North said. Is as I said bafora, wa

2 won't intar — wa cannot Intarvana whara dua lagal procass is

3 taking placa. But, what wa will do is through intarnational

4 organizations and tha Islamic aquivalant of tha Rad Cross, do our

5 bast to make sura that the prisoners get good treatment, receive

6 mail, visitors, etc., etc. But there was no — he did not, in

7 Tehran, say anything about the release of prison — see to the

8 release of those prisoners.

9 w. I'm going to proceed ahead to a little later period.

10 Following the breakdown of the negotiations in Tehran, there came

11 a point when the United States began actively pursuing a, what's

12 now been known as the second channel into Iran. Were you

13 familiar with how the notion of developing a second channel came

14 to be?

15 C. Well, when we were in Iran, the Iranians told us that

16 they were not happy with the Ghorbanifar^Hf^Hf channel. But

17 they said, if you guys insist on using it, it^s all right with us.

18 But wa would like to use a different channel, we, of course had

19 the problem with the Israelis on Ghorbanlfar, even after Tehran,

20 the Israelis were insisting, or the Israelis in the form of Ami

21 Nir were insisting that Ghorbanifar had to be used, we decided

22 to look
2 3^^^^^^^^^

24 ^^^^^H And we met with him on the lOth and llth of July in

25 Washington.

26 W. O.K. Let me move you back in time just a moment, when

lel, and the first step was

IINOiiSSIREI

850

UNCLASSIFIED

1 you said, we decided to seek a second channel, who Is the "we"

2 you are referring to?

3 C. O.K. This was basically Col. North's initiative. I'm

4 tallcing about we, everyone that was involved. That we would look

5 for a second channel after the breakdown of the negotiations In

6 Tehran, and the problems we saw with it. And, we continued to

7 talk, or he continued to talk to General Nir, and I don't know if

8 he saw Ghorbanifar or not.

9 w. You are referring to Nir?

10 c. I mean, no, I'm referring to Col. North in this period.

11 But we did actively look for a second channel, and that was done

12 by Albert Hakim and General Secord.

13 w. Now, North's decision— I gather it was North's decision

14 to look for the second channel, is that what you are telling me?

15 C. To the best of my recollection it came from the NSC. I

16 mean it wasn't — since it wasn't our operation, we didn't feel we

17 could make a decision like this.

18 W. That is we, CIA?

19 C. CIA, yes.

20 w. Albert Hakim In his testimony attributed the Idea, he

21 believed, was the way he phrased it, to General Secord. Is that

22 consistent with anything you understand?

2 3 C. Well, I think that between General Secord and Col.

24 North. The idea— we were— it is kinda difficult— and everyone

25 was in agreement with — I mean, there is nothing that, you know,

26 there was no contention. I mean, everyone was in agreement, but

UNCLASSIFIED

851

IINCLASSiFIED

1 I — the action paopl* In looking for It was cartalnly. you Icnow,

2 General Secord, and of course Albert Hakim gave him a helping

3 hand. And the first step, as I mentioned before, was 'bringing

4 HH^^H|^|^H^H^° Washington on the or July.

thad|^HH^HHH| was initially by

6 Albert Hakim, correct?

7 c. what--let me see if I can recall it. Through some
6 contacts of his in London we learned that
9 had contact with Iranians who were ex-officio, so to speak.

10 Running a purchasing operation in London. And when we met this

11 guy, because he had reported to Albert that the relative had come

12 out and asked for an American contact, and we assumed that this

13 was the Iranian effort also to set up a second channel.

14 W. Now, that I think, was memorialized in your, your notes

15 of the July 10, 11 meetings with —

16 ? You have copies of those?

17 w. Yes, we do. Let me pass your statement just a moment,

18 here. Your understanding was that Albert Hakim — well, let me

19 back you up even further than that. You said, "we made contacts

20 who then located the people who had the connection to the

21 relative." Who, when you say "we", is that CIA, or —

22 C. Bxcuse me. Albert Hakim. Albert Hakim had the

He used ^^^^H^mi|^^^H[bef ore

24 business. And in talking to him found out that this guy was

25 associated with these two firms In London. And found out about.

26 the relative coming out. So what we wanted to do is, through

BNCUSSiTffl

852

UNClASSfiED

this official, when w« brought him to Washington to talk to him,
as you Icnow from th« notes, is very anxious to get in contact
with the relative the next time he came out. And that was
handled by General Secord and Albert Hakim. They met with him in
Brussels in August Z believe.

w. That's correct. This ^^^^^^^^^H was |
Is that correct?

C. That's correct.

W. And, were you aware at the time that Hakim had proposed
to the CZA back in--at least two times in 1983 as a
possible source of .information?

C. Z should have been aware of it, but Z couldn't recall
it because it was something we didn't pursue, normally in this
business when you don't pursue something it goes from your mind.
But Z think you, you in fact, showed me one of the cables that Z
coordinated on. And Z couldn't, Z honestly couldn't recall it.
So — but, we had nothing to do with^^^^^^B Possibly it might
have been because of the fact we knewl

853

.fjn

WUlSSlM

2 ^^^^^^

3 w. Now, whan ha cama to tha Unltad Stataa, ona of tha

4 things ha was subjactad to was a polygraph axamlnatlon which was

5 conducted by a prlvata commarclal firm. I think you wara awara

6 that that was among tha plans whan ha arrivad. Is that correct?

7 c. That's correct. Wa didn't want — tha agency did not

8 want to get Involved In a polygraph.

9 w. O.K. That's my next question. Why not?

10 C. Well, we normally — it was not someone that we were

11 going to be using as an agent. I mean, the polygraph is pretty

12 much for us an in-house tool.

13 w. That is, when you say us, you are referring to the CZA?

14 C. Yeah. It's a CIA in-house tool.

15 w. Were you present when tha commercial polygraph was

16 performed?

17 c. NO. I didn't want to be president — present, excuse me,

18 not president — present, [laughter]

19 w. No higher ambitions even today, is that correct?

20 C. No. [laughter]

21 W. It Is correct. Mr. Cave, the polygraph axamlnatlon was

22 performed by tha commercial polygraph examiner. I've had the

23 opportunity to interview him and he has told me that the

24 information that Albert Hakim gave him on which he based his

25 questions, was so indistinct that he could not vote for the

26 reliability of the test. Were you ever made aware that that test

siadoinuL*

854

llNCLASSi. lEO

1 was not a ral labia tast?

2 c. No.

3 W. Is that something that you should hava known?

4 CI would hava liked to have known It at the time,

5 because the word I got from Hakim, that he passed the test.

6 W. Uh—

7 C. As a point here, most polygraph tests are Inconclusive,

8 as you are probably aware.

9 w. Except the test you performed In January of 1986 on Mr.

10 Ghorbanlfar?

11 C. Whan you have prize, [laughter] Suspect — subject like

12 Ghorbanlfar, It's pretty easy to come up — see, tha effectiveness

13 of tha test Is based a lot on the backgroxind 0M Information you

14 have from which to formulate your questions, because you can then

15 let the subject know that you know an awful lot about them.

16 w. That I think was part of the problem that this

17 polygraph examiner ran Into. In other words, Mr. Hakim was

18 unwilling to expand on the background Information that would have

19 allowed this polygraph examiner to sharpen his questions and get

20 a more precis* result.

21 C. I never had any — I never knew the questions that were

22 asked on the test. All I know Is this. Albert Hakim told me

23 that he had passed the test with particular emphasis on the fact

24 that^^^^^Vuas not now functioning as an agent of the Iranian

25 government.

26 w. Let me pursue this just one step further. The Iran

yiLKSinEo

855

wmsw

1 initiative was one of — was a very highly compartmented and

2 sensitive operation during the sunvner of 1986. Is that correct?

3 c. well, yes and no. I mean, one of the real worries is

4 that we had too many outsiders that knew an awful lot about it or

5 we would have no discipline or control.

6 w. People like Ghorbanlfar and ultimately people like

7 ^^^^^Hsnd his contacts in London, is that correct?

8 C. And the contacts in London also knew something was

9 going on.

10 w. The reason I pursue that — I think within the American

11 government it was considered to be a very sensitive operation.

12 Is that fair to say?

13 C. Yes, that's fair to say. There were very few people

14 that knew about it.

15 w. Let me stop right here. I'll speak into the microphone

16 for the record. I'll stop right here and change tapes.
17

18 [TAPE TWO (Sides 3 and 4)

19 w. Let the record reflect that we had a short break

20 enabling me to change the tape, switch machines and make the

21 thing work. Mr. Cave, my question is, based on the importance of

22 the Iran initiative to the United States government, and

23 understanding your answer on the CIA not actually being the

24 operative agency here, still wouldn't it have been prudent to

25 employ the polygraph resources of the CIA on such a sensitive

26 matter?

iiMoi AQ<jinFn

856

1 C. Well, at tm time, it seemed better to do it the way it

2 was done because ^^^^^Hpad been involved with Albert in

3 business deals before, and they know each other. We didn't have

4 much to base a polygraph on and did not really want to reveal

5 anything about the initiative, so to the best of my recollection

6 Albert Hakim said that he would devise questions with the

7 polygraph operator which would get at our basic concerns, was

8 M^^^Km^^ B^y *'^y involved with the Iranian government or

9 Iranian government agencies.

10 w. Well, from what you say there it would seem to argue

11 even more strongly th^t you or someone else in the CIA or the NSC

12 review the questions before they are asked.

13 C. Well, I don't know if anyone did. I don't know if Col.

14 North, or I — I assume, I don't know, I assume maybe General

15 Secord did. I didn't. I didn't review the questions, no.

16 w. Let me ask you a question in a different way. Were you

17 awara^that following the meetings in Frankfurt in February that

18 ^Hm^H^A^^ developed some concern about Albert Hakim

19 himself? whether he was an appropriate person, and that was one

20 of the motivating factors bringing you Into this arrangement.

21 C. ¥«ah. I was asked about Albert, and as I recall, the

22 major connwat Z made was that you know, Albert is basically a

23 businessman. Re's bead and shoulders above Ghorbanifar, but you

24 gotta remember, he's gonna look at this initiative as a business

25 opportunity.

26 w. Did you, and I'm speaking personally now, did you have

\\m m\B

857

iiNtiASsro

1 enough confldenc* In Hakim to f««l comfortabl* In trusting him

2 with, this polygraph *'1'^^^^HH

3 C. I think In the question of the polygraph, you are

4 Imputing an awful lot more stature to me In this operation that I

5 had at that time. Remember, I had only taken part In the meeting

6 In Paris, and the trip Into Tehran. And, at the time of this

7 polygraph had not done much with regard to the Iran Initiative.

8 Nothing much had happened. As you recall It wasn't until — this

9 was the beginning of the second channel, and we did not have the

10 meetings In Europe which led to the release of Jenco, I guess It

11 was, at the beginning of all this. They did not occur until the

12 end of July. And what period you are talking about now Is the

13 beginning of July. So, I was still looking at this, as was I

14 think, everyone else, as an KSC operation. And, I can't even

15 recall whether we were asked to provide a polygraph form. Or

16 whether there might have been some bureaucratic reason why we

17 couldn't do It at the time. No operators available. Z just

18 don't recall.

19 w. Let me restate the question because Z don't — I'm not

20 trying to exaggerate your Importance here, I'm really trying to

21 get at your personal feelings at the time. Were you, were you

22 satisfied based on what you knew of Albert Hakim that he would

23 reliably perform this kind of a vetting of possible source?

24 C. I questioned Albert on this, and he said that he had a

25 lot of confidence in this polygraph operator. I think, in fact,

26 I think I recall him saying that he had used them before.

llNCUSSffl

858

llHCUSSifiED

1 W. But th« question really is, did you have confidence in

2 Albert Hakim?

3 C. Oh, Z have found out in dealing with Albert, that when

4 he says he will do something, he does it. And you can trust him

5 on that. My only concern about the use of Albert in this whole

6 operation was that he is a businessman. And he made no bones

7 about it that he looked, he was willing to work for the benefit

8 of the U.S. government, but he also was going to pursue any

9 business opportunities that came up.

10 vr. Were you aware that there was a, Z think was referred

11 to as a derogatory 'block on Albert Hakim which prevented him from

Offic-
ii going into the Old Executive Building?

13 C- Yes. Z was aware of that. But Z never did find out

14 precisely what it was.

15 W. Did that cause you any concern?

16 C. Yeah, it caused me some

18 ^^^^^^^^^^^Bl couldn't come up with any reason why he should

19 have this derogatory block.

20 w. Mr. Cave, also during this June- July period, Z gather

21 you began to meet and had at least one or two meetings wit^
2i^^^^His that correct?

23 C. Yea.

24 W.

25 C. 1 met with him once in July, toward the end of July,

26 and that was a very promising meeting. But this was coordinated

muSsiFO

859

UNCLASSIFIED

1 with th« Stat* Dapartfliant. Z gava tham, you Icnow, a full rundown

2 of avarything that transplrad at tha July maatlng.
3

4
5

9 ^^^^^^

10 w. Lat ma bring somathing to your attantlon and lat me as)c

11 If you ara awara of It. In North's notabooks thara is an antry

12 datad July 7, 1986. North notas that ha has to gat a biography

13 of|H||^H^pfor Aba, which was tha psaudonym for Hakim, wara

14 you awara that Hakim was looking for a biography of ^^^^^^H in

15 early July of '86?

16 C. NO.

17 w. Do you have any idea why ha would have bean looking for

18 a biography ofl

19 C. I don't know. col. North was, of course, aware of the

20 contact witt^^^^^^^H And was awara of our operational

21 interest in him. But Z have no — he never told me that ha had

22 discussed this with Albert.

23 w. Had you known that he had discussed it with Albert,

24 would that have surprised you?

25 C. Yeah, I would want to know why.

26 W.

i»RSS!f!lB

860

2
3
4
5

e ^^^^^^

9 W. I'm gonna go through this particular entry In North's

10 noteboo)cs and ask you If you have any information on this. The

11 note Is. as I think 1,'ve Indicated, July 7, 1986. It's headed

12 "Meeting with Abe." It notes the computer at the white House has

13 a hold on him. And it says , m||^^^^^ bio for Abe." And then

14 It has a list of objectives. And the way these read Is

15 "legitimate". It says "legit bus with Australia," which I read as

16 legitimate business with Australia. "Legit security contracts

17 with U.S. entities. Financial network. Income earners. Jose

18 Defex. Going back to Australian^ on July 18. 1986, and the last

entry ^^.^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H^

20 don't close." Let me go through that with you Mr. Cave. Do you

21 have any id«« what they are talking about with this legitimate

22 business with Australia?

23 C. That might —Axistralia might refer ^°^^^^^^m ""

24 referred to him as the Australian.

25 W. Assuming that Australia refers to the country of

26 Australia, would that have any meaning to you?

iiNH! mmii

861

tlNCLASSlFlEO

1 C. NO.

2 W. How about the entry with respect to Jose Defex?

3 C. I draw a complete blank on that.

4 W. Oo you Icnow what Defex is?

5 C. Defex? Not offhand.

6 ? Defex? Doesn't ring a bell with me.

7 W. if I were to tell you it's a Portuguese arms company,

8 would that ring a bell?

9 C. Oh. Yeah. I've heard of it, yeah. Yeah, I've heard

10 of it now. Defex— is that what it is? Defex? I thought it was

11 Detex or something like that.

12 7 D-E-P-E-X.

13 C. D-E-P-E— O.K.

14 W. There are, I think, at least two large companies that

15 have an inter- relationship. One is Defex, and the other is

16 Indep.

17 C. One of those, I forget which one. General Secord had a

18 close relationship with.

19 w. Yeah. That would be Defex.

20 C. O.K.

21 W. There's a reference here. The Jose is not explained,

22 but there is a Jose Garnell. Does he, excuse me. Does that name

23 mean anything to you?

24 C. No.

25 W. The entry with respect to^

26 ^^^^^^^^^^H that was not new information to you was it?

mMmm

2
3
4
5

6
7
8
9
10
H
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

W. General Hashemi Is the one who Introduced Ted Shackley
to Ghorbanlfar back In November of 1984. Old that Information
come to you at all 'during the course of this Initiative?

Shackley came to him he thought It was a legitimate enterprise.

w. This Is General Hashemi?

yeah. H^^^^^^^^H[ ^^' "^~~
w. This Isn't the same meeting with Mr. Shackley?
C. Ko. No. But through this. A^d so Shackley, Shackley
told him he was functioning on behalf of the NSC. And so he
helped set up the meeting wlthA^^^^^^^^min Hamburg In
August of--November of 1984. I found this out after the fact.

^^^^^^^^^^^^^^^^^^^^^^^^ And
nothing ever happened,

863

UNCiASSiFIED

1
2

3
4
S

6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

W. You are speaking
C
contact had be«n brokered

W. Do you know yourself how he and Mr. Shackley met?

C. No.

w. Do you know that they have been in business together,
and I think still are, in business together?

C. Oh, yeah. I knew — Z was aware that they were in some
kind of business together. But I don't know how they met.

w. Mr. Shackley, in November of 1984, not only met with
Manucher Ghorbanifar, but he met with, I think his entry was.

And

w. Now, is there— who is ^^^^^^H then?

C. They are two brothers. One— the first names I'm not-
one is a>

the other has a position, I think in the!
I'm not sure. There are — actually they're originally|

ONClASSinEO

864

HNCUSSife

1 tribesmen — unusual for a tribesman to be a clergyman.

2 very Important because he controls an awful lot of money and Is

3 considered by a lot of people to be somewhat moderate.

4 w. And you are referring to thej

5 C. "

6 W. And—

7 c. And I think that Is the one he met In Hamburg. I'm not

8 sure.

9 w. Do you recall which name goes with which, whether

10 ^^^^Hgoes with the

11 C. I thlnJc->I'd have to check the records to be sure of

12 It— I think Its
13

14 w. Was It your understanding that Mr. Shackley actually

15 met wlthMHmil^HH or not his brother In November of '84?

16 C. I was told that he met with — my understanding was that
he met with ^^^^^^1 I don't know If that's true or not.

And that's an understanding you gleaned from^^HB

Is that correct?
That's correct.
And I—
Although, one thing that might be — I think at one point

23 Ghorbanlfar said that they had — no — somewhere there Is a report

24 that said Ghorbanlfar had dressed someone up like an Ayatollah

25 and — [laughter] I don't know whether lt's>» ^■■lie«Wir or not,

26 but I know there Is a report somewhere that Ghorbanlfar had

yxmm^

865

UNClASSIFItg

1 dressed a guy up lllce an Ayatollah and had him talk to Shackley.

2 But I don't Icnow whether this Is tnUiliehfll or not. But It's

3 something that Ghorbanlfar would think of doing.

4 w. You don't find that to be Incredible?

5 C. No, I don't find that to be Incredible. And I can't

6 remember where we got the report. I know there was a report

7 somewhere along the line that actually Ghorbanlfar had just
e dressed someone up like an Ayatollah and had him meet with
9 Shackley.

10 w. Mr. Cave, let me just dwell on this for a few more

11 moments. You recall last time we met, which I think was back In

12 early July, I showed you a series of memoranda and cables

13 relating to a proposal back In early July, Z showed you a series

14 of memoranda and cables relating to a proposal back In August of

15 1976 to, from Theodore Shackley to use Albert Hakim as a source

16 for the CIA. Do you recall that?

17 C. I recall you showing me the cables, yes.

18 w. Do you have any Idea, or do you have any knowledge as

19 to how Mr. Shackley met Mr. Hakim?

20 C. I don't recall. And one of the problems, since nothing

21 ever happened — you know, I never paid any great attention to that

22 proposal. It went by the boards, we never did use them.

23 W. Mr. Shackley has told us that he met Albert Hakim

24 through Ed Wilson. I gather that's something that you didn't

25 know.

26 C. I knew that, oh, uh, that Albert had been- -had known

mmm.

82-692 0-88-29

866

'OlD.

imtmsiritb

1 Ed, Ed Wilson, yeah. But I still to this day don't know what

2 extent he was involved in any Icind of business with him.

3 w. And when would you have known that. That Hakim had

4 some background with Ed Wilson?

5 C. I think it was when I reviewed his file. I think there

6 is something in the file that says something about that. I'm

7 not — I couldn't swear to that, but as I recall, I believe there

8 is some — there's a couple pieces from the paper relating to a

9 relationship with Ed Wilson. And that would be when I asked to

10 look at the file after I knew that Albert was in the loop, so to

11 speak, on this operation.

12 W. And that would have been approximately when?

13 C. Probably sometime in, oh, late March, early April of

14 last year.

15 w. Did you, independent of your review of the file, did

16 you have any knowledge of Albert Hakim having any association

17 with Ed Wilson?

18 C. I don't recall any, no.

19 w. Reviewing the file didn't bring back any independent

20 memory, is that correct?

21 C. Ho. I knew of Albert Hakim, but never had had any

22 dealings with him. He's a pretty well-known businessman in

23 Tehran.

24 w. Did you pursue this with him at all? Did you ask him,

25 himself, about his backgroiuid with Mr. Wilson?

26 C. I did at one point, and he told me it was the dumbest

UNCLASSIREI

867

^9mfV^%\

UNtLfcSSihLll

1 thing he ever did was getting Involved with Ed Wilson.

2 w. Were you aware of General Secord having had some

3 involvement with Ed Wilson?

4 C. Yes, I was aware of that.

5 W. Let me Just put these two things together and aslc you —

6 and I'm just speaking on a — you know, your own personal reaction.

7 Did the combination of all this knowledge about Hakim having had

8 an association with Wilson, and Secord having had an association

9 with Wilson. Did that cause you any misgivings about the

10 participation of these two men and the very secret and sensitive

11 initiative?

12 C. I talked to Col. North about this.

13 w. What did he say?

14 C. And what he told me was essentially that, look, these

15 guys made a mistake, and if they had it to do all over again,

16 they wouldn't do it. They realize it was a dumb thing to do, and

17 they are working to basically now prove themselves. Albert wants

18 to really — one of the things, I'll never forget — North told me,

19 he says, "Albert Hakim is very interested in proving that he's

20 worthy of being a citizen of this country.

21 w. Did you know at any time during this initiative that in

22 December of 1983 General Secord had applied to CIA for a security
2 3 clearance and It had been denied?

24 C. I didn't know that, no.

25 w. When — after Father Jenco was released in — I think it

26 was on July 26 of 1986, Manucher Ghorbanifar met with, I think

868

bi^uLftboiii .u&>

1 you, and North in Europe. Is that correct?

2 C. Yes. We had a meeting, I thlnJc It was in Frankfurt, if

3 I remember correctly.

4 w. Now, at that meeting, if I recall correctly, he advised

5 you of what it was that he had promised the Iranians to get

6 Father Jenco released, is that right?

7 C. I'm trying to recall it. I didn't take any notes on

8 that meeting, because North took all the notes. Nir was there.

9 I think that — as far as I recall the commitment was for the rest

10 of the spare parts. I'm trying to remember if there was anything

11 else.

12 w. Now these are the same — when you say the rest of the

13 spare parts, these are the spare parts that were planned to be

14 delivered in — to Iran in May, is that correct?

15 C. That's correct. The remainder of them. I don't recall

16 any other commitments that were asked for at that meeting. I

17 think it was to continue the thing, we should deliver the rest of

18 the HAWK spares.

19 w. Do you recall whether at this meeting he proposed what

20 I think has been. In shorthand fashion, referred to as the

21 sequential release of hostages and delivery of arms.

22 C. T«ah. What he told us is that he indicated that he had
2 3 sent a letter and we were supposed to have a copy of it. This is

24 the famous letter in which he makes all these terrific proposals

25 to the Iranians. And there is the idea of sequential release in

26 that letter. We didn't get that letter until after the fact, as

WNWSS!f!ED

869

1 you are aware.

2 w. And If you would for the record, just relate how It was

3 we ultimately came into possession of that letter.

4 C. Either he or Nlr sent a copy of it to us via DHL, to

5 Col. North.

6 w. The notion of sequential referral was a departure from

7 past U.S. policy, is that correct?

8 C. That's correct.

9 w. Do you recall, and let me place you in the month of

10 August. Do you recall any discussions with North about the

11 advisability of departing from the prior policy of insisting on

12 all the hostages at once, and adopting the policy of sequential

13 release?

14 C. No. I always felt in this operation, you )cnow, we were

15 the mechanics. That the policy decisions were made at the white

16 House. And the way they wanted to do it was all right with me.

17 w. Just to be clear. Xou say, "we" again, we the

18 mechanics, so that's the CIA. Is that correct?

19 C. That's correct. That's the CIA. Now it was — we did

20 not immediately, as you recall, release the rest of the spares.

21 There was some discussion in Washington about the advisability of

22 going along with this. And I remember a conversation I had with
2 3 Director Casey on it.

24 w. What was the position that he toolc?

25 C. Well, he was aslcing for my opinion, and I said loolc,

26 the spares are sitting in Israel. The Israelis don't want them.

UNClliSSIFIEe

870

BNWSSiatB

1 We can't take them back. If they want to keep the initiative

2 going they might as well send them, send the damn things in.

3 Also, no matter what kind of a sleaze Ghorbanifar is, he's on the

4 hook for an awful lot of money. And he's not going to be able to

5 collect anything until those spares are delivered. So those were

6 my recommendations and Casey pretty much went along with them.

7 w. Was there, in your conversation with Director Casey,

8 consideration given to the inconsistency between saying in May

9 you can't have any of these, any more of these, until the

10 hostages are released, and then at the end of July with one

11 hostage released, gl,ving them all over to the Iranians?

12 C. I'm trying to recall. After the — in the immediate

13 aftermath of the visit to Tehran, there was a lot of talk about

14 the initiative being over, as you'll recall. I was probably more

15 upbeat than anyone on the plane because I had a lot of private

16 conversations with Iranians. And I concluded that no matter what

17 happened, they were very much interested in some kind of a

18 strategic dialogue with the United States. I think that — we had

19 a meeting also with Nir before the meeting with Ghorbanifar. And

20 as I recall, the sequential idea came up first there. I mean, it

21 was Ghorbanifar. Because Nlr was speaking from the letter. And

22 Nir later admitted that he had authorized Ghorbanifar to make

2 3 some of the comnitments that he had made in that letter. But not

24 all of them. Now, I never got it straight In my mind which ones

25 he had said he could make, and which ones he did not authorize.

26 w. And you are referring now to the early August meeting

«HClllSS!F![9

871

ONGUSSIHEO

1 in London, is that correct? Or arc wa still in lata July?

2 C. I thought wa mat — didn't wa maet with him in July also

3 in London?

4 W. That is Nir?

5 C. Nir. Mayba it was August.

6 w. Wall, let ma ask you that question —

7 C. Oh, yeah, it might — I guess->see, when we met with

8 Ghorbanifar on the 25th, we did not have the letter.

9 w. That is the letter toJ

10 C. The letter that ha had sent to^^^^^^H And I'm kinda

11 hazy in my memory now when it was. I was not sure whether we met

12 Nir before and than — Z gat dizzy trying to — we met — it was Nir

13 and Ghorbanifar and North and I at the end of — because that was —

14 I was called up from Geneva to meet with them. I had Just met

15 with^^^^^^^H I think on the 25th of July. I'm not sure.

16 But, whether we met — I do not recall whether we met with — we had

17 a meeting with Nir in London before that, or it was immediately

18 after that, in August.

19 W. Let me ask you this. There was a meeting in August, on

20 August 8, between Nir, North and Ghorbanifar. Do you recall

21 whether that fmi hava been a meeting that you would have gone to?

22 C. No. Because the meeting that I'm talking about was

23 just Ollie, Nir and myself. And we flew to London one morning

24 and I flew back the next day.

25 w. In September, in early September, North had a meeting

26 with Poindexter in which he discussed the desirability of

872

iiNCUSsra

1 adopting a sequential release policy. Were you at any time

2 brought into these discussions with North?

3 c. No. He would just apprise me of what they were going —

4 of these discussions with Poindexter and what they were — what the

5 white — you know, I guess the white House or the NSC, had decided

6 on.

7 w. Do you recall him advising you at some point in

8 September that, that the sequential release notion had been

9 approved by the white House?

10 C. I don't remember him specifically saying that this

11 thing here has been approved because the position we took with

12 the second channel was that the seven points, as enunciated in

13 Tehran, would be, would be an — I don't know how you want to

14 phrase it or characterize it — but would be an agreement that the

15 United States would adhere to with Iran. Now, the idea of a

16 sequential release, as I understood it, was [SIDE 3 ENDS] The

17 fact that there was still a certain amount of mistrust and

18 perhaps the sequential idea is the best way. They do this and we

19 do this, and they do this, and we do this. That type of thing.

20 That's the way I understood it. But, I was not involved — a lot

21 of this evolved from, I gather private discussions between North

22 and Admiral Poindexter. We had several meetings at the white

2 3 House. A couple meetings with Poindexter. But it was basically

24 the overall thing. And I don't recall really being in one of

25 those meetings until after the second channel. I think there was

26 one before, immediately before we met with him, then one

irii

LRduSrSLU

873

uNCUSsra

1 iimedlately after. That oo« I remember clearly on the 24th of

2 September.

3 w. O.K. We'll go back and cover September in just a

4 moment. Mr. Cave, we are baclc on the record. I'm going to go

5 baclc and forth on some subjects here, so fasten your safety belt.

6 Reports came out of the meeting with, the first meeting with the

7 second channel, that is a relet ive,^^|mon August 2Sth, that

8 there was a separate TOW transaction that the Iranians were

9 trying to put together. I think the fellow's name was Escandarl.

10 Out of Spain. Were you familiar with that separate TOW

11 transaction as it was developing?

12 C. Yes. That was one where this guy was claiming to have,

13 I forget how many TOWs it was, and we did everything. ^^^^^^^|

14 ^^^^^^^^^^^K^^^^^^^^^^^^^^^^^^^^^^^^^m and we

15 to the conclusion that despite all of the information that we

16 were getting that this deal was going dotm, that it was a

17 spurious deal.
18

19 ^^^^

20 w. Do you recall when they reached that conclusion?

21 C. I can't recall the exact date, no. But I know that, we

22 had had word that supposedly the stuff had been shipped and our

2 3 ^^^^^^H people say, hey, that's a bunch of crap, we would have

24 picked it up.

25 W. Were you aware that North contacted Charlie Allen on

26 this, and asked Allen to report the matter to Customs?

874

gt. «

1 C. Yeah, w« w«re--and we did, we did contact Customs that

2 we have this report. And Customs was never able to develop any

3 concrete information on it. And also our — this munitions —

4 munitions people said that they thought that it was false.

5 w. According to Allen's memo on the subject. Hakim told

6 him that he suspected that Ghorbanifar and Khashoggi were behind

7 it. Was that ever any information that you could verify?

8 C. Yeah. As I recall there was that speculation of

9 Hakim's — I think we were able to put, oh, I'm not certain of

10 this, but I think this guy Erajaskanderi, I believe it was. who

11 was, had some connection with Ghorbanifar. But whether Ghorbani-

12 -we never, I don't think we ever got any concrete evidence that

13 Ghorbanifar or Khashoggi were involved in this deal.

14 w. This subject came up in early, or excuse me, late

15 August. Our first written information on it is a report that

16 Secord made to North on August 27. North's notebooks reflect

17 that there is still concern about this possible transaction as

18 late as October 22. Were you aware of that?

19 C. I don't remember the exact dates. North's concern was

20 that he didn't want the Iranians to get bold of TOWs because that

21 was one of the things we were authorized to deal with them with.

22 And if they were able to develop an alternate source of TOWs, it

23 would weaken our negotiating position. This is why he was

24 pursuing shutting this deal off as — if at all possible. But as

25 far as I recall, when we concluded, there was never a real deal.

26 Our^^^^|H| people were pretty certain of that.

875

UNCLASSIFIED

1 W. Do you know whether the existence of this possible TOW

2 deal in which Escandari was involved played any role in the

3 reduction of the price of the TOWs in the October transaction.

4 That is, the reduction by the United States of the TOW price?

5 C. Kone that I )cnow of. I never heard of any.

6 W. Let me shift onto another subject. Charles Allen wrote

7 a memo in September, on September 8 of 1986, which was directed,

8 ultimately directed into Admiral Polndexter's hands by Lt.Col.

9 North attached to another September 8 memo that Lt.Col. North

10 wrote. And in Mr. Allen's memo he had the observation that, and

11 I'll quote this, "more and more we suspect that some Hizballah

12 leaders would be willing to settle for the release of the

13 Americans and the French for Shi'ite prisoners held by Anton

14 Lahad's Southern Lebanese army. He prefaced that remark by

15 saying that those holding the American French are frustrated

16 because there are no, they were no closer to securing the release

17 of Da'wa prisoners than they were in March when they kidnapped

18 William Buckley." The import of that, or at least the way that

19 reads is that in Mr. Allen's opinion there was coming a point

20 where the hostage holders were becoming frustrated that they were

21 not making any progress on the Da'wa, and perhaps were willing to

22 settle for the Shi'ite who are held prisoner in Southern Lebanon.
2 3 Was that, firat was that an opinion that you were aware of, and

24 second was it one that, at that time— and this would be early

25 September- -you would have endorsed?

26 ^^^^^^^^^^^^^^^__

UNCLASSIFIED

876

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6
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8
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12
13
14
15
16
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18
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20
21
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24
25
26

w. O.K. Would you have agreed with what Mr. Allen wrote
on September 8 then?

C. Yeah. I would agree in the sense I think it was
plausible.

you have to be careful about the generalizations you make. But
certainly what Mr. Allen wrote was entirely plausible, and fit in
with things as we understood them at the time.

w. Do you recall being aware that he submitted that
opinion in September, on September 8, or in that time frame?

C. Yeah. I don't specifically recall fi it, but it rings
a bell that something like that went forward. And, go off the

UNCIASSIREO

877

2
3
4
5

6
7
8

10
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12
13
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20
21
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record .

ONCUSSIHED

W. O.K. wa arc bac)e on tha record. Mr. Cava, during this
period of tijna, let me put you in the August-September-October
1986 time frame, were you providing advice to North or
Poindexter on yourself on whether there was any flexibility being
shown on the Da'wa issue?

C. By the Kuwaitis? On the—

W. I'm thinking really on the, on behalf of the hostage
holders .

C.
there was nothing that I could really have provided them with.

W. So you were not providing them with that kind of
information.

Not on that

But — and also, based on my own
experience in the area, I thought that the hostage takers and the
Iranians are going to have to make pretty, pretty iron-clad
guarantees that there would be no more operations run against the
royal family in Kuwait before there would be any motion on the
Da'wa prisoners.

w. How would, let me ask you just hypothetically, what
kind of a, what kind of an iron-clad agreement could a group as

UNCLASSIFIEO

878

UNtUSSffi

1 shadowy as the Da'wa glv« to a, basically to a governmant on

2 whether they'll continue to perform terrorist acts.

3 C. Now you get into — if you'll go to my report on the

4 final meeting in November in Geneva, one of the things that I

5 argue for, is that, look, the Iranians are going to have to deal

6 directly with the Kuwaitis on this, because they are the only

7 ones that have the influence to make the guarantees and how the

8 Da'wa thing ends is, we have an all day argument!

9 Z think on the 9th of November. An exhausting one. It lasted

10 the whole damn day. It was almost entirely devoted to the Da'wa

11 prisoners. And which we said we had done everything we possibly

12 could, it's now up to you guys. And the final thing, he says,

13 O.K.
14
15

16 w. O.K. We are going to return to that, later on in —

17 C. Because that is one of the things that I think, where

18 Secretary Shultz in his testimony was way off.

19 w. We are going to get to that, too. So make a mental

20 note of that, and we will definitely get to that. The next thing

21 I want to ask you about, is there was an article that appeared in

22 between the two meetings in Germany. One was on October 6-8, was

23 the Frankfurt meeting, and then there was a meeting in Meinz on

24 October 29-30. Ii^etween those two meetings, an article appeared

25 in Newsweek magazine on the subject of the Americans held hostage

26 in Lebanon. And that article, which was dated October 20,

ONCUSSIFiEO

879

UNCUSH

1 actually cama out aarllar than that, and It contained the

2 following observation. First, it stated that Jacobsen, Anderson

3 and Sutherland were being held by the Magnla family members of

4 the Mausi clan. Then it went on, and I'll qv^te ostensibly,

5 "they snatched their victims to trade for seventeen confrairs in

6 terror jailed in Kuwait. But intelligence sources believe they

7 might settle for springing just three Lebanese Shi'ites among

8 them, who have been sentenced to death." First, let me aslc you,

9 do you recall this article coming out?

10 C. Yeah. Z think I recall it now. We were somewhat

11 concerned about it..

12 w. Why was that?

13 C. We were wondering whether somehow, somewhere, something

14 had leaked on the initiative. But I don't know if anyone ever

15 made any conclusions about it. Z don't think security ever

16 investigated, made any investigations or anything.

17 w. Now when you say, we wondered about it. who was

18 curious about this?

19 C. Well, the people tha| were involved. Charlie Allen,

20 myself, and Z thinkJ^^HUlH and Col. North. Somewhere that

21 someone had leaked something to them — to Newsweek. Some person

22 unknown to us. Or whether it was just coincidence that Newsweek

23 had come up — developed this story independently. Zts so

24 fragmen--as you know from the article, its pretty fragmentary.

25 So its hard to tell. But it gets a little bit close to home, you

26 know, about what we were doing.

880

UNClASSinED

1 w. It was quite close to home at that point, wasn't It?

2 The — I gather then that there was speculation, but no

3 investigation, that you know of made on who the "intelligence

4 sources" were who were the source of the Newsweek article, is

5 that right?

6 C. That's correct. Because in a situation like that, if

7 you investigate, you only call attention.

8 W. Now there are — the white House put out some press

9 guidance on this, which was dated October 14, and the press

10 guidance said that the, it had a series of questions that posed

11 and then answered itself, and in response to the central theme of

12 the article, which was that if only three Lebanese Shi'ltes were

13 released, the hostages could come home. At least Jacobsen,

14 Anderson, and Sutherland. The press guide then said, "the

15 question is not whether we would ;^eek the release of three or

16 seventeen prisoners, we will not negotiate the exchange of

17 innocent Americans for the release from prison of tried and

18 convicted murderers held in a third country. Nor will we

19 pressure other nations to do so. To make such concessions would

20 jeopardize the safety of other American citizens and would only

21 encourage more terrorism." Were you aware that the

22 Administration was putting out that kind of press guidance in the

23 wake of this article?

24 C. I can't recall exactly what I knew or didn't know right

25 now, because it's a long time ago. But there is one thing that

26 this has jogged my memory on. One of our concerns was the three

UNMSIREO

881

UNCLASSIFIED

1 condemned to death. Because we Icnew that they were never going

2 to get out. And we were worried about that. It was someone else

3 leaking something to the press to tell us what their final price

4 was going to be. But, I don't — I assume that Col. North had

5 played some role in this, in this statement to the press. But I

6 don't know that for a fact.

7 W. Mow the statement to the Press would have come on the

8 heels of the Frankfurt negotiations.

9 C. Frankfurt negotiations.

10 w. And the Frankfurt negotiations resulted in what Albert

11 Hakim has agreed ought to be called the Hakim Accords. Otherwise

12 known as the nine-point plan, which maybe that's a term you would

13 prefer.

14 C. Actually If you look at them, they are not much

15 different. It's just an expansion. The original seven-point

16 proposal that was given to the Iranians In Tehran.

17 w. O.K. Well, I want to go over that plan with you in

18 some detail. First, however, there Is a — putting aside the Hakim

19 Accords, there is a October 10 PROF memo, which was reproduced in

20 the Tower Report, only It omitted Point 3. Point 3 reads, "Copp

21 and Sam help prepare a plan for approaching the Kuwaitis to

22 guarantee no more terrorism against the Amir and by which the

23 Amir will use a religious occasion to release some of the Oa'wa."

24 They will take this plan to the Hizballah as their idea (face-

25 saving gesture) with the Hlzb." Do you recall that being part of

26 the nine-point plant, reduced to the seven-point plan on a PROF

HMniKCfpcn

882

^ ■ Vr :' ' *' ." - ■'

1 note. bi«yLhwO(. iUi

2 C. Yeah, I recall that. I r'ecaTi "tKis. As you can see,

3 the plan that we finally game them was what had come up at the

4 November 9 meeting in Geneva, with which you guys have gotta piclc

5 up the ball and run with it. We've done everything we can. Now

6 the only thing that I know of that was done — excuse me a minute

7 while I take a look at this. I don't know if it was this

8 meeting, but at some point what the Iranians told us was that

9 they were concerned about the five that got the short terms. Of

10 these seventeen, three were sentenced to death. Nine got medium

11 to long prison terms, and five got very short prison, I think it

12 was just four years or something like that. What they were

13 concerned about, is that the Monies people, was that the five

14 would not be released when their terms were up. Now, the only

15 commitment that I can recall that was made to the Iranians was

16 that Col. North said that he or Admiral Poindexter would talk to

17 the, I think the Kuwaiti Foreign Minister about this, to see if

18 in fact the Kuwaiti's would release these guys when their term

19 was up, and my understanding — I can't prove it — but that actually

20 took place, because the Iranians were subsequently told that

21 these peopl* would be released when their terms were up.

22 w. O.K. Let me first just make it clear for the record

23 what I have handed to Mr. Cave and what he has read as a PROF

24 note, dated 10/10/66 with the, and the time of the PROF note is

25 215531 hours. It bears our Committee identifier of N12176 and it

26 has a page 213 up in the upper right-hand corner. Now, Mr. Cave,

OlLSSSiFlED

883

wmaflt?

1 I'm going to return to the subject of the negotiations In

2 Frankfurt later on this afternoon, but the reason I put that PROF

3 note In front of you Is that that PROF note Is based on the

4 Frankfurt negotiations. Is that correct?

5 C. Yes, that's correct.

6 w. And the note does contain in It, a description. In

7 general terms of an effort that — an undefined effort — that you

8 and General Secord are going to undertake to see If some of the

9 Da'wa can be released. Is that correct?

10 C. What It was. Is that we were supposed to come up with

11 some sort of plan o^ action for the Iranians with regard to the

12 Da'wa.

13 w. Right. And that's what Is embodied In point three.

14 C. That's embodied In point three.

15 w. O.K. Now, my question Is, this, the PROF note appears

16 on October 10. The article appears not long after that because

17 the press guidance on It Is dated October 14. Do you know

18 whether any consideration was given to whether this press article

19 was leaked In order to support the effort that had been made In

20 Frankfurt by preparing public opinion for partial release of the

21 Da'wa prisoners?

22 C. Ho. I have absolutely no Information about any

23 purposeful leak of that type.

24 W. And what I'm saying, and I know you are reading me

25 clearly, is that, is whether this leak might have come from

26 within those people who were participating in the Iran

UNCLASSIFIED

884

uNuUSsm

1 Inltlatlva.

2 C. I know nothing about that, no.

3 w. Again, this Is another cameo subject I'm going to take

4 out of the Frankfurt and Melnz negotiations, before I go Into
them In great detail. You were aware thatj^^^H^^^^^^HV as

6 he was known In the pseudonym, one of his pseudonyms, was an

7 Intelligence officer with revolutionary guards. Is that right.

8 C. Our first Indication was when we were In Tehran,

9 because when he was Introduced, Ghorbanlfar told me out In the
10 hall that he has an Intelligence connection.

H w. You didn't know that already?

12 C. No, this was when — we'd never met the man until we

13 arrived In Tehran.

14 w. Were you not aware that he participated In the

15 Frankfurt meetings In February of '86?

16 C. Oh, no, no. X wasn't aware of that, that this was the

17 same guy. No. No. I mean, when I first — the first time I knew

18 anything about him was when ha was introduced to me In Tehran.

19 And Ghorbanlfar on the side said that this Is an Intelligence

20 officer. And I think that's the first time that we were told

21 that he had any kind of an Intelligence function.

22 w. Did that coma as news to you now that ha was—he

23 participated in the February meeting.

24 C. Yes. Z didn't know that it was ha that participated.

25 I never knew that.

26 w. Albert Hakim advised us that it was one in the same

yNClASSIRFO

885

parson.

w.
as well.

I wonder why Albert never told me?

I can't answer that. General Secord would have known

They never told me that he was — is all 1^ Is that It was
ind one or two other Iranian military officers. They
were described to with ma.

W. Well, Hakim and—well I know Hakim specif ically--
advised us that the man he called the engine was present at the

10 February intelligence briefing that General Secord, under the

11 pseudonym of Richard Adam^ performed for the Iranians.

12 C. Learn something avary day.

13 W. I believe the background information on the relative H|

14 JBI^^Bwas that he, too, had a revolutionary guard background,

15 is that right?

16 C. Yes. He had been in the revolutionary guard ever since

17 he got out of high school.

18 ' W. Now, the revolutionary guard is distinct from the

19 Iranian army, is that not correct?

20 C. That's correct.

21 w. And that's tha military arm of the—would it be fair to

22 say of tha mora radical element within Iran?

23 C. Mo. I think that what brought about the revolutionary

24 guard was the mistrust by the clergy of the military, of the

25 regular military. Almost an exact replica of what happened in

26 tha Russian revolution, is that the Red Army was created by

yNClASSiflFI

886

yNClASSiFlEO

1 Trotsky to replace the regular military organization, and what is

2 happened In Iran Is that the Rev Guard Is gradually replacing the

3 regular military in Iran.

4 w. They are not considered to be more radical than the

5 Army itself?

6 C. They are considered to be, they are considered to be

7 more radical, because the military was pretty much X£i^o^l^l(=sl,

8 and these guys were organized you know, initially for political

9 purposes. They were the arm, they were the executive arm of the

10 revolution, so to speak.

11 w. The members of the Revolutionary Guard would be more

12 properly characterized, true believers than members of the

13 regular army. Is that fair to say?

14 C. That's fair to say.

15 vr. Do you — were you aware who was getting — let's limit

16 this to the HAvnc spares. Do you recall who was getting, or did

17 you know who was getting the HAWK spare parts? whether they were
16 going to the regular Army or whether they were going to the

19 Revolutionary Guards?

In fact at one point ,J^^^^^H told us that the

25 military approached and said we hear you guys got some TOWs, we

26 need them. And they didn't give them to them. In fact, they

IJNCLfi.l^lFIF!

887

were saying If when this whole deal goes through, if we get all

the TOWs, we are going to sell some of them to the military.

w. That sounds like a close, professional relationship.

The fact is, you )cnow all through the

10 meetings with the second channel, they say that Israel's

11 footprints can't be, in this at all. And. one of the, I think one

12 of the real motivations for Israel to contact on this, is that

13 they desperately want a strategic relationship with Iran, and by

14 1984 they began to see that unless the United States gets back in

15 a position of influence in Iran, there is no chance for them.

16 w. This remark that the relet ive^^^^^^^Bmade, about

17 the Army coming to them for the TOWs. Were these the February

18 TOWs, the 1000 TOWs they received in February, or the later

19 October shipment?

20 C. This was th«~he told us this~Z think it was the

21 thousand— he was referring to the 1000 TOWs. Because he told us

22 this when we made the arrangements for the final 500 shipment at

23 the end of October. Even aside he said, you know — he had a good

24 sense of humor — and he said, "you know, the military had

25 approached us some time ago when they heard we had gotten some

26 TOWS, and they wanted some." He says, "well, when this whole

UNCIASSIFI

888

l)NClASSin[0

1 d"l goes through we are planning on selling them some.- At

2 exorbitant prices, I might add.

3 [END OF SIDE 4]

UNCUSSIFIE

||NCUSSIFi[

1 3IDE3 S AND 6 - TCW/)

3 w. Mr. Cava, do you recall at any point the question of

4 the TOWS actually going to the Revolutionary Guard, rather than

5 to say the Army becoming an issue?

6 C. I don't recall it ever becoming an issue, no. It was

7 an Interesting note, as far as we were concerned. The Rev Guards

8 were handling this.

9 W. Did you ever see the finding that the sinisVter(?) was

10 based on?

11 c. Not until after the fact. I was told about the finding

12 when Z was brought in^ But there was a finding. Z don't Icnow

13 whether it was^BM^I^^V Someone who had seen it had taken

14 notes and said here's what it says.

15 w. The finding — I'm gonna just go through a portion of

16 it here — contemplated the United States facilitating efforts by

17 third parties and third countries to establish contact with

18 moderate elements within and outside of the Government of Iran.

19 Let me stop right there because we are going to go a little

20 further with this. Did you consider that the people you were

working ^''HII^^^I^^^^^^H "^'^ ^^^' group.

22 Were they which you would consider moderates within Iran?

23 C. Z would not use the term "moderate." Z would call them

24 pragmatic, and use the Iranian term "mlanirow" — middle roaders.

25 W. Then these personalities were you would consider to be

26 consistent with the general intent of the finding, the moderate

27 element aspect of the finding?

UNCLASSIFI

890

icidssire

1 C. Wall I think modarat* is an unfortunata word, but tha

2 paopla that wa had to daal with, and wa'ra willing to daal with,

3 yes, that's who wa ware daaling with.

< w. The notion of tha finding was that tha modarata

5 elements, however advisable tha term was, would be provided with

6 arms and equipment and related materiel in order to enhance their

7 credibility and that the arms would assist the moderates in their

8 effort to achieve a more pro U.S. government in Iran by

9 demonstrating their ability to obtain requisite resources to

10 defend their country against Iraq and intervention by the Soviet

11 Union. Knowing what you )cnow about the dealings with^B^^HH

12 and^^^^^^H| and tha others, was this group wa ware dealing with

13 consistent with tha intent of the Finding?

i« C Pretty much so. I think if I'd have been involved at

15 the original writing of tha Finding I would have liked to word it

16 otherwise. But I don't think that is inconsistent with what we

17 were trying to do and with tha people that wa were dealing with.

18 w. And this is, you would say this notwithstanding that

19 the effect would be also to strengthen tha Revolutionary Guard,

20 vis-a-vis, the Army, is that correct?

21 C. Wall, the question was, is that you have to pick an

22 element to daal with in Iran. That is part of tha strategic

23 relationship. And what wa ware daaling with is that— was the one

24 that was the only one willing to deal with us. This was

25 Rafsanjani's faction, and what made him politically powerful is

26 his control of the Majlis, and tha large scale influence he has

UNCLASSIFIEI

891

1 among th« R«v Guards.

2 W. North's notas reflect that at soma point, it's an

3 isolated entry, but it — in early November he has a note that

4 H^HUlhas the ambition to build an airwing for the

5 Revolutionary Guard. Were you aware that he was considering

6 something that ambitious?

7 C. The, I think that he is not talking specifically about

9 the Rev Guard has been actively engaged in building an airway,

10 and has actually bought aircraft, and have dona considerable

11 pilot training.

12 w. The, just for the record, the note does sa^^Hlwants

13 to build an airwing, but Z think that that's a minor point.

14 C. I think he's speaking in terms of the Rev Guard when he

15 speaks about ^^^H Because, I remember, you know, I remember

16 some discussions about this.

17 w. Did these, the discussions that you recall, were these

18 in Germany?

19 C. Z think that, yeah, the two meetings that he obtained

20 were the initial one in Frankfurt at the beginning of October,

21 and then the November one which we had in Geneva. The 6 through

22 10 November meetings.

23 w. Let me back up just briefly onto the Revolutionary

24 Guard point we were discussing earlier. Just to make the record

25 clear on this. To your knowledge was there any point where

26 senior officials sat down and thought through the — whether giving

UNCUSSlflFii

892

UNCUSSlf-

1 arms to th« representatives of the Revolutionary Guard was

2 consistent with the Finding? Do you recall a discussion like

3 that at all?

4 C. I don't recall a discussion like that, no.

5 w. In the — in your notes of the meetings in Washington,

6 the first meeting in Washington ^'^^^.^^^^Ib you note that he

7 told you that^m^had "played a role" in the kidnapping of

8 Frank Reed. Do you recall that?

9 C. Yes. He told me that they thought, and they were

10 investigating it. But, in subsequent meetings, he told — they

11 never turned up anything. He said he thought — the reason why he

12 said this is that they thought maybe the radical faction was

13 trying to create more problams for the moderates. He says, you

14 know, there is no — in Tehran it's well known that Rafsanjani was

15 against the taking of hostages. And, since^^^^^^lwas involved

16 in this, and is also a member of the radical faction, he may have

17 played a role in the taking of Reed.

18 W. Did — in your subsequent negotiations, did you — when I

19 say you, the Americans collectively, press the Iranians on the

20 status of our investigation of this?

21 c. The only thing I can recall is, oh, uh — I think it was

22 during the Meinz meeting that he said that they hadn't come up

23 with anything.

24 W. Were they undecided, or were they — or they had

25 demonstrated that he was not involved?

26 C. Well, I don't know~we don't know. They just told us

Mimim

893

UNCUSSIBE

1 that nothing has come of the Investigation.
2I

But, they — we could never get any
followup out of them on It. And that might by typical Iranian
that, well, we're not going to tell the Americans that. It
might — they Just said, well, we haven't gotten anything.
But .4a|

w. But .4A^^^^^^Hhad been Involved In Reed's kidnapping,
that would have been a breach of all understanding with him. Is

10 that not correct?

11 C. Yeah. I was klnda doubtful of that, because, you know,

12 I had called ^^^^^^P Immediately after Reed was kidnapped. And

1 3 I^^^^^Hr ^^'^ he ' s no actor , sounded really astonished .

14 w. The — let me point this out. In your note of the

15 meeting you don't contain — you don't Inject any editorial comment

16 on whether you believe what the relative is saying or not. Did

17 you have an opinion at that point?

18 C. well, I think it's the way he said it. He said that

19 there is, you know, like there is some indication thatj

20 may have been Involved in the Reed kidnapping because they

21 suspect that the radical faction is doing it. And since I

22 is involved with us, he may have played a role. But I thought,

23 maybe I should — I thought it was pretty speculative on his part.

24 I mean, he was saying, here's an event that happens in Beirut,

25 and we think this may have happened. Now, I think that they,

26 they told us subsequently that they thought another group was--

UNCLASSiF!

894

UNWSSlflEl

1 and I had a big go around wlth^^^^^^Hon this — and h« told us

2 at th« beginning of October that they hadn't been able to

3 determine who it was that took Reed and Ciccipio.

4 w. Later, I think in early October, North prepared a

5 memorandum for Poindexter where he attributed the Ciccipio

6 kidnapping ^°^^|^^^H Do you know what he might have been

7 basing that on?

8 C. I don't recall at the time--I think that we were — by

9 this time, you know, we were very concerned, there was a lot of

10 speculation going since we were changing channels and everything,

11 what might happen. -And incidentally, there were several phone

12 calls by^^^^^^Hand me where he was trying to find out what was

13 going on. He kept asking me about Brussels. Are we going to

14 follow that up? And, z, oh, just sloughed him off. But, I

15 didn't — I never saw that memo. I never — Col. North didn't send

16 us copies of his memos. We sent him copies ear ours, but he

17 never sent us copies of his.

18 w. But you are not aware of what he might be basing that

19 statement on?

20 C. I can't, Z can't recall at the moment what he's basing

21 that statement on. Other than what I'm talking — you know, we

22 were concerned about the change of channels. whether that would

23 effect — whether that bad any effect on the taking of the two

24 hostages or not.

25 w. Let me, let me turn again to another subject. This is

26 also during the Washington meeting with the second channel,

«i;lii?;^irfFn

895

UNCLASSIFIED

In that meeting, according to notas that G«n*ral Secord
toolc, jj^^^^ladvlsad all of you that William Buckley was not
killed, that he died of natural causes, that he had three heart
attacks. There is no indication in the notes that anybody
challenged him on his assertion that Mr. Buckley died of natural
causes . ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H
in fact he died of complications from beatings.

C. From beatings, yes.

W. Do you recall the relative making that assertion?

C. Yeah, I rem — uh — Z — uh — we asked him about Hi-
ll treatment and everything, and he said he^ad no information On

12 that. But that he had not died of torture as reported by the

13 press, but had died of natural causes. We subsequently learned

14 of course, that he did die of natural causes, but the natural

15 causes were brought about by his ill-treatment. And the fact

16 that they didn't gat him any medical attention that was worth

17 anything. Uh, the great concern about — cause he told us that

18 /they had 400 pages of interrogation that he had been put through

19 while he was being held captive. And also ha made the comnitment

20 to held — to try and locate the body.

21 w. On the subject of how Mr. Buckley died, were you, and I

22 say you collectively, was the American group credulous of this

23 information? Did they give it some credence, or did they feel

24 that the relative was giving them— was basically jerking their

25 chain on how Buckley had died?

26 C. we were doubtful— well, we Immediately rejoined you

["JS-fc

\\\L0

896

liHClASSIFiED

Icnow. wall, w« understand he's b««n subject to serious, you
know, torture, and the relative's response to that was that he
had no information on that.

w. Now, Secord's notes don't show any rejoinder. But you
recall a rejoinder?

C. Yeah, there was. And that, oh, uh, we were very much
concerned--then he told us about the notes, about getting hold of
the notes. And they promised us that they would get them — give
us the notes, and also, as part of the deal, we definitely wanted
his body returned. But there was some Incredulity expressed by
those there.

897

2
3
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12
13
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15
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17
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w. That^^^H^_dld not hav* sufficient contact with the
Revolutionary Guards?

C. That's correct.

W. Let me ask you this. Did you, did you pose to the, to
or to any Iranian in the second channel, the story that
Buckley was lifted from Lebanon and brought to Iran, and tortured
in Iran?

C. I think that was done by Col. North. And, as I recall,
^denied it. And I think this was at one of the late
evening sessions in Washington.

w. There was sort of a parallel story that went along with

ONSIASSIREB

898

UNClASSIFieO

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3
4
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9
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that — a story that might b« placed in lieu of that story. And
that is that rather than having been taken to Iran and tortured
that he was tortured but under the guidance and direction of
Revolutionary Guard officers in Lebanon. Do you recall that
question being posed ^^^j^^^KK^o^ anyone else in the Second
Channel?

C. I don't recall that question being posed]

899

UNCLASSIFIti)

WNMSIf/fB

900

M. Did you go on th« whit* Hous* tour?

C. No.

W. Do you know who did?

C. I thlnJc It was just, oh. Col. North and^^^^^H-was

8 Hakim there?

9 W. well, somebody would have had to be a translator. I

10 think Hakim was.

11 C. I guess Hakim went along as a translator. No, I was — I

12 stayed In the office to write something up. I forget what It

13 was.

14 w. O.K. Let me stop right here and turn the questioning

15 over to Jack Taylor.
16

17 EXAMINATION BY JACK TAYLOR

18 T. O.K. I'm going to — do you want to take a break?

19 w. This Is to you transcriber, whoever you may be. I'm

20 Instructing Jack Taylor In the use of this higher form of

21 technology. Jack Is going to be asking a few question of the

22 witness, and it should be noted at some point that he has taken

23 over questioning. I think he'll Identify himself for the record.

24 T. My name is Jack Taylor, investigator with the House

25 Select Committee, continuing the questioning.
26

mmmm

901

Mmim

Ifi^fio OQ A*0 y(^

902

UNCUSSIFIEO

1
2
3

4 ^^^^^^^^^^

5 ^^^^^^^^^H we were very alarmed about the pricing.

6 T. Uh-huh.

7 c. And, uh, because that's a hell of a — we Icnew what the

8 damn things were costing. That was a hell of a mark-up. I think

9 the total cost for the two high-powers, and all of the spare

10 parts and the 508 TOWs only came to about $10 or $11 million.

11 T. Right. Afl we, I think there was about $12—

12 C. Well, that was for everything.

13 T. Everything. Including the shipping, the freight.

14 C. We never did ship the two radars. But the price for

15 the radars and the TOWs and the spare parts — I think the total

16 of that came to just under $10 million.

17 T. So, at this point, you've had a meeting on the fourth

18 of April with Ghorbanifar. And you had another meeting In May in

19 London with Ghorbanifar. And you had another meeting in May in

20 London when he was discussing these particular parts.

21 c. He already knew the price because I think it was

22 transmitted to hln via North and Nlr.

23 T. Do you know when that happened?

24 C. No, I don't.

25 T. Did you participate in any pricing discussion in April

26 in Washington, D.C.?

UNCLASSiflO

903

UNClASSlFitO

1 C. wall th« only thing that I participated in was what w«

2 got from our logistics -- is tha prica of it -- and wa passad

3 that on to Col. North.

4 T. And that's the OoO prica that you received from

5 logistics that was provided by the Department of Defense. Okay.

6 You didn't hear North — or were you privy to the conversation —

7 when North discussed with Ghorbanifar the prices at all that

8 were different from the ones at DoD.

9 C. No, they were very careful about that. I don't know

10 whether they were purposely keeping me compartmented. Z don't

11 ever recall any — the only thing that Z recall about pricing

12 with Nir and North are two things. One was about the 1000 TOWs.

13 when we met in Paris, Nir complained that North had sold them too

14 cheaply.

15 T. Okay. And what was the other?

16 C. And the other was in Tehran when Z raised the question

17 about the cost that Ghorbanifar had asked me to back him up on —

18 the twenty-four and one-half million for the HAWK spares, and

19 then Z called this to North's attention and we got hold of Nir —

20 we were out in the . And Nir, the only time he ever

21 said anything like it in my presence, he said, well some of it is

22 based on your mark-up. Now what he meant by that, Z don't know.

23 We knew that the expenses for all this stuff were being paid out

24 of moneys also generated by the sales.
25
26

904

UNCUlSSIFiE

iii^sim

905

ziCLiSlfP

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T. All right. L«t iM jutrtST* a braak h«r«. I'm going
to tak* a look at my notas. Thar* is on* quastloa along that
Una, for tha saka of my raport again, and tha accuracy of it.

mmm

906

lii^GLASSiFIED

1 Did you Indicate that early on In the operation you had suggested

2 to CIA officials that, that — you mentioned already that you

3 should have as few service officers — is that the phrase you use?

4 C. Serving officers.

5 T. Serving officers, as possible to be witting or involved

6 in this operation. Did you also have an understanding with

7 anyone at any time that you should not be present when pricing

8 was discussed?

9 C. No. I had no such understanding. My, my whole point

10 on the serving officers was that this was a — there were two

11 aspects to it. And ,to keep the Icnowledgeability very limited,

12 one, was the sensitivity of the operation, and the fact that it

13 was very high risk. And the kind of thing that when it blows up

14 it could destroy careers. And I didn't want any serving officer

15 putting his career at risk, when I could do It without any. I

16 don't have a career to risk.

17 T. O.K. Now I along that— taking that a step further

18 then, you were allowed access to all conversations Involving

19 pricing, but there may have been conversations where you just

20 weren't, you weren't aware of them, huh?

21 C. Oh, I was not involved — I mean, we — the way — it

22 appears, what Z understand about the pricing. We would get the

23 DOD pricing by our office of logistics, and give that to North.

24 And then North would deal with Nir and Ghorbanifar on the prices.

25 And, in my — in hindsight, they were very careful not to talk

26 about the costs in my presence. There weren't any other CIA

KNCUS'lEO

907

IFi

1 off lean pr«s«at. Ones th«y got th« prlc* that thay had to pay

2 us, than tfa vara out of it.
T. So your first sansa of alarm than was In May, whan you

put tha absoluta prlca togathar with

thosa .
C.
T.

Yaah. This was an awful, awfully larga mark-up.

And, again for tha racord to clarify my raport, what
was your rasponsa to North whan you raad that?

C. wa brought that to North's attantion, and X don't — ha
raally didn't hava much to say at that tima, axcapt to agraa with
us that this was a,, quita an agragious mark-up bacausa at tha

2 maatings in April with Ghorbanifar^!ti0. told us that ha was going

3 to mark up tha cost 60%. Ha would add his axpansas onto tha

4 cost, and than mark it up 60%'. That saamad to ba a lot mora than

5 60%. Ha told us, ha told us in London that his axpansas that ha

6 had incur rad, with ragard to this shipmant, wara about $350,000.

7 So X navar, X navar got much of a raaction out of North whan wa

this up. ^^^^^^^^^^^^I^^^^^^^^^^^^^^^H X
9 got mora of a raaction out of hia in Tahran.

0 T. O.K. Stapping back to tha April 4 maating in

1 Washington^ D.C. , you did writa a raport, I think, following that

2 maating in vhicta you synopsisad tha convarsationa that wara hald

3 ovar that, Z guaas a day and a half or two day pariod whara you

4 mat with Ghorbanifar.

5 C. Yaah, wa mat with hin on April 3, and than X saw him
26 briafly tha morning of tha 4th bafora ha took off to saa his

908

UNCUSSiriED

1 girlfriend in California.

2 T. O.K. And In one part of your report you mentioned that

3 Ghorba began discussing his cut at the Washington, D.C. meeting.

4 I assume again his cut would be a percentage of —

5 C. Yeah. He would—

6 T. — of the payoff.

7 C. He said that he would add his, add his expenses to the

8 price and then add 60%.

9 T. O.K. That was the same figure you just discussed with

10 me now.

11 C. Yes.

12 T. Gotcha. And I take It again as I asked earlier, you

13 did not discuss pricing for the 240 and the radars other than

14 what DOD had given you at that meeting.

is C. Yes. It's all we'd do. we would give that material

16 to, oh, uh. Col. North.

17 T. O.K. Stepping to another subject, there was a lot of

18 confusion over the necessity of a preadvanced trip to Tehran, or

19 Kish Island, or wherever, and this confusion carried all the way

20 through, I guess, not necessarily confusion, but perhaps

21 controversy over whether or not a trip should be held, continued

22 all the wmg from early March up through early May, I guess, as to

23 when —

24 C. By the end of April.

25 T. End of April?

26 C. A decision was made that we wouldn't go.

909

UNClASSIFe

1 T. And thttr* was soma, th«ra was a plan to, I think at one

2 time, meet wlthJ^^^^^Vin Praxikfurt, before you actually
2 traveled to Tehran.

4 C. Well, what the meeting wlthJ^^^^^Hwas decided as

5 superfluous. One of the problems Is Is we can't, we couldn't

6 believe that this guy could speak with any authority, given his

7 level of intelligence. There was a lot of discussion about North

8 and myself and Ghorbanifar. Ghorbanifar said he would hire a

9 private jet and we'd all fly in and we could talk for, you know,

10 one day, and fly back out. That was, that was scotched, Z think

11 by the, to the best of my knowledge, by the white House as being

12 too dangerous.

13 T. O.K. Did you ever get to the point to where the

14 Administration had agreed at one point, where they were going to

15 send you, and you said you and North, at one point were

16 considered?

17 C. Yeah. That was, that was, it was really a proposal

18 that just never got approved.

19 T. General Secord testified that at one point he was to go

20 in and do the same, conduct the same affair, as a pre-advance

21 meeting to determine an agenda prior to McFarlane's trip.

22 C. That was very early on, I think, before I got involved.

23 And then, because when we were talking in early April, it was

24 going to be just myself and North, and Ghorbanifar flying in.

25 T. O.K.

26 C. And that was scratched.

910

uNtussre

1 M. This is Tim woodcock again. Hr. Cava, what was it that

2 was, that th« Adminiatratioa perceived was too dangerous about
2 the advance trip.

4 C. well, I think that we really didn't know that much

5 about who we were dealing with. Z mean the only — as far as we

6 know the only guy on the other end you know, *'*3^^^^^H^ *^'^'

7 there was a lot of uncertainty, there was considerable mistrust

8 of Ghorbanifar, and it was decided that we just didn't want to

9 take the chance.

10 w. The plans for the meeting in Iran originally, of

11 course, centered oo Kish Island, but the plans for the meetiiig in

12 Iran began to develop either during or on the heels of the

13 Frankfurt meeting in February. Were you aware of that?

14 C. Yes, I was aware of that. We — this was just general

15 discussion. It was at the meeting in March in Paris that

16 Ghorbanifar told us that the Iranians had agreed in principle to

17 a high-level U.S. delegation coming to Tehran.

18 w. There is, there are a series of PROF notes and

19 memoranda that, that go all the way through March and April that

20 place the meeting, the one that McFarlane was going to

21 participate in, as being imminent within a week or ten days, and

22 it keeps receding on the horizon.

23 C. Yeah.

24 w. How do you square the imminence suggested in those

25 memoranda with your statement about the advance meeting being too

26 dangerous?

911

UNCIASSIFIEO

1 C. Wall, I don't, Z don't, I was not awar* of th«

2 discussion which lad to the cancellation of the advance meeting.

3 Because that was done over at the NSC or the white House. I

4 wasn't privy to that. Cause all I got from North is that they

5 decided not to do it, and that we'd go ahead with the regular

6 meeting based on the guarantees that I was getting over the phone

7 from Ghorbanifar, one channel, and also from North via Nir. I

8 mean from Ghorbanifar and Nir via North on the other side. And

9 the decision was made to scratch the preliminary mission and to

10 just go with the regular trip to Tehran with McParlane meeting

11 the party.

12 w. Correct me if you have contrary information, but I was

13 always under the impression that the McFarlane meeting that's

14 proposed in the PROF notes begiiuing as early as late February

15 and in PROF notes and memoranda, through March and April, is

16 delayed primarily because the financing for the transaction is

17 not yet put together.

18 C. Oh, that, that's true. No. I'm sorry if there is some

19 confusion. I was confusing the, uh, the preliminary meeting that

20 didn't come off with — yeah, we kept telling them that we can't,

21 we can't come, we can't do this deal until after the financing

22 for the parts, because, you Icnow, one of the proposals was that

23 they release the hostages and we bring in the parts. And then,

24 well that no — you gotta come in first with the parts, then we'll

25 release the hostages, and then we got down to O.K., well we'll

26 come in with a group and a small percentage of the parts, and

UNCLASSIFIED

912

_ _ _li JLaJ

1 th«n you guys raleas* lh« hostag«s, and than wa'll bring tha rest

2 of tha parti In. No, no, you ara corract in that, and tha delay

3 is that wa did not — wa couldn't buy tha spare parts because we

4 did not get the money into our account until the 16th of May, I

5 thinJc it was. And then we had to take the time, you know, to

6 ship the material to — pre-position the material in Israel.

7 w. O.K. I'm not going to dwell on this, but where you are

8 losing m« on this is that from the notes and memoranda, it seems

9 as though money — the lack of money is holding up the McFarlane

0 trip, and that with money tha McFarlane trip could have happened

1 as early as sometime in April. If your advance trip was too

2 dangerous to be held, what was it that would have made tha

3 McParlana trip safer?

4 C. That's a good question. I think that tha problem was,

5 is that — I, I honestly can't answer you. Because all I know is

6 tha preliminary trip was cancelled, but the McFarlane trip was

7 approved on tha basis that wa thought wa had reasonable enough

8 assurances by ^^^^^B and Ghorbanifar. Now the money, of course

9 tha hold-up on the money was, we needed the money before we could

20 buy the spares, and wa had to have the spares pre-positioned in

21 Israel before wa could go in. I can't really clear up — I

22 honestly don't know why the decision was made to scratch the

23 preliminary mission. I thought — in hindsight, it would have been

24 better had we gone.

25 w. Let ma just ask one more question on this. Or two more

26 questions. The decision to scratch tha advance meeting was made

UNCLAS

Mi li.U

913

UNCLASSIFIED

1 to your recollection, when, and by whom?

2 C. I know that by the end of April It had gone — cause — you

3 Icnow, if you'll see, there, is — we'd even had a date for going,

4 Ollie and I, somewhere around the 17th of April, something like

5 that. We were going to go in. And we within about 48 hours of

6 going when it was scratched. So it was sometime, I'd say around

7 the third week of April.

a w. Now let me put some information in front of you. Or

9 before I get to that, who was it who scratched it?

10 C. I don't know.

11 w. It was not North himself, I gather?

12 c. No. Cause North wanted to go. I thought it had to be

13 someone in the white — you know. Admiral Poindexter, or someone in

14 the White House.

15 w. In late April, I think you are probably aware now from

16 the Tower Report if you weren't aware at the time, Ghorbanifar

17 and Nir and Khashoggi, who were in search of financing,

18 approached Tiny Rowlands in England —

19 C. We were aware of that at the time.

20 w. — as a result of that approach they, Rowlands, went to

21 the British Bnbassy and said I —

22 C. Th« American Qnbassy.

23 w. — excuse me, to the American Embassy, and said, is this

24 an American operation? If so, he was interested in it.

25 Otherwise, he was not interested in it. That information,

26 according to the Tower Report and PROP notes that we have, was

mmm

914

2
3

A
S

7
6
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

transmitted to G«org« Shultz by Ambassador Prlca. Shultz was at
a suinnlt m««tlng la Japan with Poindaxtar and tha antlra
Presidential entourage. Shultz confronted Polndexter, who denied
to hlft face that the U.S. was affiliated with that initiative.
Now my question to you is, do you )cnow whether, since Polndexter
had denied that this initiative was an American initiative to the
face of Secretary Shultz, your advance meeting was killed in
order to limit any possibility that Americans might go to Tehran
and Polndexter might be proved wrong?

C. No, I can't answer that. I don't know. X honestly
don't know.

T. Jack Taylor back. I sounded like a sportscaster,
right? \

T. How close at that stage were you to going to Tehran?
C. Nell, we hadn't even had the meeting. This was the
third of May, right?

T. This would have been. Right .

100

UNCLASSIFIED

915

UNCUSSIFIE

1 ^^^^^^

2 C. Th«r« was a disconnect between — the only way I can

3 explain that is a disconnect between Ollie and Nir and

4 Ghorbanifar. Because, as I told you by that time, the idea of us

5 going on a preliminary meeting was —

6 T. Entirely scotched.

7 c. — entirely scotched.

8 T. All right. Then I take it another trip to Frankfurt

9 was replaced by a trip to London in early May to where you

10 actually met with Ghorbanifar, but not with

11 C. That's correct. We met with Ghorbanifar and Nit.

12 T. O.K. And that would have sort of been a pre-advance, I

13 guess, or the closest thing you can get to a pre-advance.

14 C. That was when we finalized the deal, and he was rushing

15 arovind trying to get money. They were trying to get money

16 transferred into Nir's account.

17 T. O.K. I'm going to stop here.

18 [END OF SIDE SIX]

101

wmmiB

916

UNCUSSIFIED

1 TAPE SEVEN -- TCW/sl

2 T: The House Permanent Select Committee on Intelligence

3 has asked me to uh, uh, provide three questions to Mr. Cave,

4 which I'll try and do my best at. The first question [laughter].

5 The first question deals with the ODI Analysis of the Iran

6 factionalism that was analyzed by those people during the time of

7 the Initiative. And I think the first Indication that they would

8 be dealing with Is Mr. Fuller's Memorandum, which was, what,

9 about June 1985?

10 ?: Yes, It might even have been May of 1985.

11 T: May 198S. And then later on about 6 or 8 months, I

12 believe another, um, memorandum was prepared by uh, DDI again.

13 It was approved, which took a different swing or a different

14 stance altogether on the factionalism In Iran.

15 C: I knew about but I don't think I knew about

16 the second one.

17 T: Okay, you've discussed this somewhat today already,

18 about the moderate versus the radicals and the line 1,2,3 and

19 your own perception of that. Did you agree with the analysis as

20 provided by DDI as to these factions?

21 C: This is the analysis that was prepared in the fall of

22 1985?

2 3 T: Yes.

24 C: Uh. • . I never saw — believe it or not, I never saw

25 that analysis. I don't think I knew.

102

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UNClASSiriED

1 T: Did you, th«r« waa a later, one latar, prepared though,

2 I believe, again discussing line 1,2,3 and uh. . .

3 C: I would have a hard time now, you know, this far down

4 the road. I didn't pay much attention to a lot of the analysis

5 of Iranian Internal politics that was going on by the DOI bade in

6 those days.

7 T: Okay.

8 C: So, Z can't honestly give you an opinion of what I

9 thought then, Z don't even think Z read the damn thing.

10 T: Okay, let me try this. This Is very specific, I think

11 Z do recall something that might be of help here. It was

12 mentioned to me thAt Mr. Gates had Indicated that Intelligence

13 that was being brought out regarding the factions was fairly

14 accurate and good Intelligence and was conveyed to NSC and other

15 recipients or users of that Intelligence, uh, that was explained

16 to me. Would you agree with that, at this point?

17 C: Well, good Is a relative term. 7ou know. It could have

18 been a lot better, we were getting some pretty good Information

19 ^^^^^^^^^^^^^^^^^^^^^Vy«s.

20 T: Okay. So, you would agree at that time. At that tlire,

21 you would have agreed that It was fairly good Intelligence?

22 C: Yeah, we knew that, we knew that there were fairly well

23 definable factions within the senior level of the government.

24 T: Okay, if I haven't asked those questions correctly,

25 I'll hear about it later but that's about the only thing Z have

26 along that line unless you have some yourself. Okay, the second

103

918

UNCUSSIFIED

1 Una of questioning deals with th« uh, relationship between

2 North, McFarlane, and Polndexter. I guess the best way to

3 describe this would be a chain of command relationship. I'd like

4 to hear your point of view regarding how North used the chain of

5 comnand to your knowledge. Did he abide by It or did he

6 completely Ignore it In some instances, and let me give you an
example . ^^^^HH^Hhas described North as sidestepping his

8 direct supervisor, Hr. Polndexter, on occasion when perhaps

9 things did not agree with North as far as directions coning from

0 his supervisor he often went to DC! Casey with what he thought

1 should be the game plan. Uh, do you have any background or '

2 Information on thli?

3 C: Yes. First, let me say this. North was religious In

4 reporting everything back to Casey, uh not Casey but Polndexter,

5 excuse me. You have all the PROF notes. He was religious about

6 It. In fact. It usejto /|rk me because I'd get hungry about 9

7 o'clock at night and he's sitting there with that damn RI.-43

8 poking out messages to send back to Polndexter. He religiously

9 reported everything that he did. Now, on — there are certain

0 junctures during this Initiative where Polndexter would disagree

1 or have doubts about whether they would go ahead. And, on at

2 least two occasions North called me and asked me to meet with

3 Director Casey and ask him to welgh-ln with Admiral Polndexter or

24 on one occasion, I think It was with Don Regan ~ to get the

25 thing moving again. Because Polndexter had doubts about the

26 wisdom of proceeding with a couple of times, particularly I think

104

UNCLASSIFIED

919

1 it was on* of th« times wh«n Jenco was relaasad, w«'d go in and

2 sand in tha rast of tha hawk spares.

3 T: Okay, another example of jUiat and you may have answered

4 my second question already. ^^^^^Hagain, indicated uh, that

5 after the February TOW shipments urn, Poindexter did indicate that

6 he wanted to pull out, I think that's been pointed by several

7 people including ■^HH^^B Urn, and he uses this instance as

8 an example of when North went to Casey for support to continue

9 the initiative rather than pull out. Are you familiar with that

10 particular one?

11 C: I am not familiar with that particular one. I was

12 talking about two things that happened later on.

13 T: Okay. That would have been very early in your uh. . .

14 C: Because that would have been before. Because, in other

15 words for us to continue and make the March meeting, it would

16 have had to b««. ikayed in the white House by Poindexter.

17 T: Alright. Did you have any questions along that line?

18 W: This is Tim Woodcock again. Mr. Cave, you said that

19 you recalled a couple of incidents where North enlisted your

20 assistance to bring the weight of the DCI to bear on Admiral

21 Poindexter. Do you recall specifically what those two incidents

22 were? What was the issue?

2 3 C: The one was when Father Jenco 's release is um — should

24 we or should we not send in the rest of the HAWK spares that were

25 in Israel. Z know he specifically called m* on that to ask Casey

26 to weigh-in, talk to Casey about it, and see if I could get Casey

UNCIA^SFIEO

920

UNCLASSIFIED

1 to welgh-ln uh, with Admiral Polndexter that w« should go ahead

2 with th« shipmant of th« HAWK spares, which I didn't cause I

3 thought we shouldn't do It anyway. And there was another

4 occasion,. I'm trying to, it had to do with, it had to do with

5 when things surfaced in the press. And uh, I can't remember

6 exactly what the issue was now, but I Icnow it was right about

7 that time he called me and asked me to get Casey to weigh-in with

8 Don Regan, but I can't remember the specific issue. I remember

9 him calling me though. It had something to do. It was after the

10 thing, right after the surfaced, and I think it had something to

11 do with the, oh, uh, November meeting. And I can't remember

12 exactly what it was — it slipped my mind. But, I know he called

13 me and asked me to call Don Regan. I don't know whether it was

14 his attending it or what. It was something to do with whether we

15 should go ahead with the meeting at the beginning of November or

16 not because I know I went and talked to Casey about it. I can't

17 remember exactly what, but it had to do with the holding of the

18 meeting at the beginning of November.

19 W: Thank you.

20 T: Those are only questions I believe I have, if you want

21 to switch.

22 W: Mr. Cave, I'm going to bring you back again to the

23 subject of uh^B^^|^^|Hand his to the United states

24 in July of 1986. You attended, I think, meetings on consecutive

25 days with Albert Hakim and^J^^H You produced memoranda of

26 those meetings and I'm going to show you uh, two exhibits, one

106

omssra

921

UNCLASSIFIED

1 has b««n marked as lA and one has bean marked as 2A and ask you

2 if those are the memoranda that you produced?

3 C: Yeap. Altogether in my Incorrect typing.

4 W: Your typing Is your trademark. Your memoranda stand

5 out because — I think it's the machine at home, is that

6 correct?

7 C: That's correct.

8 W: First, Mr. Cave, uh, during this period of time, the

9 summer of 1986, I believe, that you told me from an earlier

10 interview, that Mr. Hakim had suggested that you have business

11 cards printed out presenting you as an employee of STTGZ.

12 C: That was to explain my presence to the other people out

13 at his office.

14 W: That is, bis own employees?

15 C: Yeah, his own employees. Like, I was introduced to

16 his, the secretary out there as Sam O'Neil who Is going to be

17 working with him. And, the cards were printed to cover that.

18 W: Now, uh, when youmetwith^^^H^^^^H Z think you

19 told me he recognized you^^^^^^^^^H Is that correct?

20 C: That's correct.

21 W: Do you know whether, or let me put the question

22 differently, did you make plain to him that you were working for

23 the United States?

24 C: Yes, I did.

25 W: What did you tell him your capacity was with the United

26 States?

107

UNCLASSIFIED

922

UNCUSSIFe

1 C: Uh, Z forgat th« axact words I us«d. Z trl«d to lc««p

2 It as vagus as possible because he knew what my association was

3 and z just let him go along with the assumption Z was still with
A the same people.

5 W: So, for all you know, his assumption would hav« been

6 that you were still with the CZA. Zs that correct?

7 C: That's correct.

6 W: Now, uh. In the uh, the second memorandum, that is the

9 second In time, exhibit 2A, there is some discussion about Albert

10 Hakim pursuing various commercial Interest in Zran with^^^^^B

11 Do you recall those conversations?

12 C: vaguely.

13 W: Let me ask you to look at exhibit 2A, and in

14 partlo.larly if you would, to direct your attention to the

15 paragraph numbered 3.

16 C: Okay, now Z remember. Yes.

17 W: Now, uh, in that paragraph Is there is a statement

18 attributed to Albert Hakim that he Is, basically that he is going

19 to proceed to open these commercial avenues to Zran regardless of

20 what "we" do. What was he referring to there?

21 C: This was uh, he had two different things in mind. One,

22 was to get sane comnerclal business to cover his activities. And

23 what he wanted to do was sell mediclnals, uh, because he had

24 learned fromiH|^Hlthat the Iranians were buying all of them in

25 Belgium, and he was certain he could get it cheaper and get

26 better stuff for them. The other thing is he had in the back of

108

UNCLASSIFIE

923

mtssxB

1 his mind. Is that h« wanted all of th« employees of his previous

2 company, the engineers and the technicians were still In Iran,

3 and he had hopes of reestablishing that company.

4 W: And, when It reads that he's going to do this

5 regardless of what "we" do. Is that a reference to the United

6 States and Its Initiative towards Iran?

7 C: That's a reference to our Initiative. That he'll do

8 whatever he can to help us with It, but he's going to pursue his

9 commercial Interests also.

10 W: In the first memorandum, the first In time, July 10,

11 again in paragraph 3 there's a reference to, and I'll quote it

12 "Sam and Abe toldHVTwhich is your letter designation for

13 ^^^^^H/hat there was an Interest on the part of the United

14 States Government (USG) in trying to use trade to gradually to

15 re-establish relations with Iran. Sam and Abe planned to

16 capitalize on the trade part using contacts in the USG with whom

17 they will coordinate their actions. Now, let me ask you based on

18 that statement, did you have any plans to participate in any

19 commercial activity?

20 C: That's just what we told him, that was part of the

21 thing. No, I have no desire to get involved In commercial

22 activities with Iran. Then or now. That was part of the cover

23 story for what we were doing. And also it fitted in, because Abe

24 was going to get in, not Abe, but you know, Albert Hakim. Uh, I

25 went along with this as if I was part of it.

26 W: But I thought^^^^^^understood that you were with the

109

UNCLASSlfiED

924

UNCUSSIFIE!

1 CIA. HOW does that fit In?

2 C: H« did, but I also told him that I had retired and

3 still had my contacts.

4 W: I gather. Do you Icnow whether ^^^^^Hwould have known
your name^^^^^^^^^H^

6 C: Yes, he would 've.

7 W: So, you wouldn't have given him a business card with a

8 pseudonym on It, Is that correct?

9 C: I did not. No. I never gave anyone any of those

10 business cards, except you.

11 W: And I treasure It.

12 C: Z don't know where the rest of them are. He printed up

13 a couple hundred of them and I don't Icnow where they are to this

14 day.

15 W: Well, after this Is over they will be sought after

16 collectors Items, I'm certain.

17 C: I doubt it.

18 W: In September of 1986, uh. North proposed a. In a

19 memorandum to Polndexter the sequential release of the hostages,

20 you did that via your September 2, 1986 memorandum to Polndexter

21 after he passed the memorandum In he, uh, sent a PROF note to

22 Robert McParlane stating that "we still have no response from JMP

23 re: proceeding with the sequential release proposal outlined to

24 you sometime back. Have now undertaken to have Casey raise the

25 same with the JMP tomorrow, after weekly meeting. The things one

26 must do to get action." Do you recall being enlisted to bring

110

'iTirn

&.i«UUil tf^i

925

UNCUSSIFiE

1 the sequential release to Casey's attention so that Casey would

2 bring it to Polndexter's attention In early September?

3 C: I think that North did that directly In a meeting with

4 Casey.

5 W: Were you aware of that at the time.

6 C: Yeah, I was aware of the sequence. By that time we had

7 concluded that the only way to go about It was the sequential

8 release.

9 W: North's notebooks also show that on September A, he's

10 got an entry It says "go-no go on sequential deliveries" that 's

11 under a meeting with Polndexter and then the entry also mentions

12 the need to talk to' Joshua, which I believe was North's code name

13 for President Reagan. Oo you recall the sequential delivery

14 Issue being brought to Polndexter and then that It was to be
is brought to President Reagan?

16 C: Z think so. I can't. I can't be specific about time,

17 but I know this was one of the things that was to go to the

18 President for his approval. You know. North would tell me, you

19 know that he's discussed several of these things with the

20 President and got approval but, you know, I only had It on, his

21 word.

22 W: Let me shift gears slightly and show you what has been

23 marked as exhibit number 4A. This Is a two-page type-written

24 manuscript and It Is headlined "Notes on DISSEM concerning Iran's

25 views that It cannot win a war with Iraq. Their need for an

26 "honorable peace," and their fear that the upcoming offensive may

ill

UNCUSSIFiED

926

UNCUSSIFIED

1 not b« 8ucc«t9ful. If you take a mlnuta Hr. Cava and axamlna

2 that I'm going to ask you If you can idantlfy tham.

3 C: Yaah. I wrota this. I'm trying to ra. . . Thara's no
A data on this Is thara?

5 W: That's tha naxt quastlon.

6 C: Ma had dacldad, at soma point, I forgat axactly whan It

7 was but wa had to start gattlng soma of tha Information that had

8 baan ganaratad by this oparatlon Into tha systam. Llka, wa

9 finally got, wa got North's agraamant on It.

10 N: Now, what, what systam ara wa talking about?

11 C: Tha Dlssamlnatlon Systam, In othar words, tha ragular

12 Intalllganca dlssamlnatlon systam.

13 W: So, It would bacoma avallabla to tha Intalllganca

14 community as naadad? tmJAJS

15 C: That's corract. Uh. . . both ^^^^^^^B and I wara

16 pratty Inslstant on this as was, oh Incldantally Daway Clarrldga

17 and Gharlla Allan. And, uh, I think I wrota this somatlma. It

18 was althar, I honastly can't, somatlma right bafora tha maatlng

19 In Frankfurt or right aftar tha maatlng In Frankfurt. I tand to

20 think It was Immadlataly aftar tha maatlng In Frankfurt, um

21 bacausa of soma of tha things that ara mantlonad In hara.

22 W: And tha purposa of this was to aummarlza It and to

23 placa It Into tha Intalllganca comminlty?

24 C: That's corract. I did this for tha raport sactlon,

25 that was going to ba praparlng tha raports, just to glva tham

26 soma guldallnas on what to amphaslza In a dlssamlnatlon.

112

wmm

927

1 W: Now, uh, this uh, contains soma discussion of a, of an

2 Iranian, wall at least th« Iranians consideration of a possible

3 offensive against Iraq. Is that right?

4 C: Yes.

5 W: When did they launch that, do you recall?

6 C: This was the last, the last major offensive which

7 failed to capture Batzfa in the — what was it — oh uh, in

8 November, I think it was, I think it was November 1966.

9 W: And the...

0 C: It was Al Fahg something or another. They had several

1 numbers for the«i. But this was the last major offensive that

2 they launched.

3 W: The references to artillery here, were to be la support

4 of that offensive. Is that right?

5 C: That's correct.

6 W: Now, there came a point In a the negotiations with the

7 Iranians where, uh, the uh, a relative^^^^^^Hproduced a list

8 which Included on It artillery, among other things

9 C: That was in September. That was in Washington in

0 September.

1 W: And, I believe that there too, he was asking for

22 artillery. Is that correct?

23 C: That's correct. They had a severe shortage of 105

24 pieces, 105 llallister pieces and ISS llalllstar pieces plus

25 barrels for both plus 175 millimeter rap ammunition.

26 W: why don't you spell out the acronym for the record?

113

UNCI kmm

928

UNCLASSIFIED

1 C: The 175 mlllim«t«r annunltlon la bas«d plat* or rocicet

2 assisted projactil*.

3 W: Hr. Cava, let ma uh, let ma diract your attantion to

4 what I've marked as exhibit 7A. This is a page from Lt. Col.

5 North's notebook. It's dated September 8, 1966, and the first

6 entry reads uh, 1350, which would be 1:50, I believe, in the

7 afternoon. Call from Sam, "Australian call, desperate, rabid for

8 parts" (and then there's a word I can't read) uh, and then

9 "date", and then going down another line, "Going see Casey, now.
The date on this.
The date is September 8.
Call from Sam — on 8 September? The only thing I can

13 think of is there were a number of the parts that were damaged in

14 the shipment. And, ^^^^^^b was insistent on getting

15 replacements for them by us taking the recked ones and getting

16 them — that's the only thing I can think of. I do not know what

17 he means by the note "Going to see Casey now." I can't recall

16 what it was I was seeing him about, I certainly wasn't seeing him

19 about that.

20 W: There also was an entry here, further down, uh 15:00

21 hours or 3 o'clock in the afternoon. "Call from Charlie. Casey

22 to call JMP, meaning Poindexter, Gates supportive ,^Hcalls to

23 George, four times Saturday, two times today." Do you recall uh

24 what that was all about?

25 C: we had a problem with, oh uh, by this time we knew that

26 the second channel was coming uh, the only thing Z can think of

114

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UNCUSSIFIEO

1 Is you know, uh, tha um.^^^^^^was trying to find out what was

2 going on. H« k«pt asking m« uh, about, war* w« going to follow-

3 up on the Brussels thing. I kept saying, well, you know, I kept

4 putting him off to anything wrong, etc. etc. And, never, never

5 conceding anything to him, you know, the thing on the parts has

6 to do with the 67 things that were bad that he was demanding that

7 we replaced. Uh, the only thing that I can think of on this Is

8 that we may have discussed the methodology Involved In bringing

9 young men to the States at this meeting. And, It was. Of course
we got the, we had to get ^^^^^^^^^^^^H to help us cause they

11 were coming out, I think It was on the 13th of September, and

12 were to be met ^^^^^^^^^^ That may be what the meeting with

13 Casey Is about.

14 W: I think that...

15 C: To get approval for the whole thing, uh, uh, and to go

16 ahead with It.

17 W: There was some consideration I think at one point, of
the provldlng^^^^^^^^^^^^^^^^^^^^^^^^^^^^^V

19 C: Yeah, there was a lot of things that were discussed.

20 But what we, what we did was, to get our security people to make

21 arrangements out at Dulles Airport to get them In quietly. And,

22 oh, on setting up, we had the, we just had the visas Issued.
2 3 Yeah, that's what that was from. Now, I recall, we had to

24 discuss all the where-wlth-alls and get Casey to convince

25 Polndexter It would all work, as far as I recall.

26 W: Now, this, this happens to be, I want to put this In

115

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930

UNCLASSIHED

1 time for you, one day before, the very day before Polndexter met

2 with President Reagan and put the second channel on the agenda

3 and uh, and uh, discussed sequential release of hostages. Does

4 that add anything to your Insight?

5 C: I can't remember all the details now. But, I Icnow

6 there was a lot of discussion that If we go ahead with the

7 channel, we will have to go ahead with the sequential release

8 Idea. And, I remember there were some discussions with Casey,

9 and the basic thing Is we've come this far, we might as well go
10 ahead with It.

IX W: What was Casey's reaction to the sequential release

12 notion?

13 C: Uh, none of us really liked it, but we came to, we sort

14 of concluded that it was not much of an alternative. That's

15 about the only way we could approach it.

16 W: Mr. Cave, I'm going to show you what's been marked as

17 exhibit 8A and ask you take a moment and read it through.

18 [PAUSE]

19 C: Okay.

20 w: You've had a chance to read this through?

21 C: Yes.

22 W: Thli is, I'll identify it for the record, a 10

23 September 198( memoranduffl to Director of Central Intelligence

24 from Charles Allen and it recounts a conversation that Mr. Allen

25 had the preceding day with Lt. Colonel North, uh, were you aware

26 of this conversation at the time?

116

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931

HNCUSSIFe

I think so, I must have been

2 W: Let me direct your attention to uh, paragraph 2 and the

3 uh, and the third insert

4 [END OP TAPE SEVEN]

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UNClASSIFlEi

2 W: Opportunity to review axhlblt 8A and X was about to

3 direct your attention to paragraph 2 and the third paragraph down

4 and I'll read It to you. It uh, says "Ghorbanlfar will be cut

5 out as the Intermediary In future shipments of cargo to Iran If

6 at all possible. To cut Ghorbanlfar out, Ollle will have to

7 raise a minimum of four million dollars." Uh, do you recall. In

8 this period of time, speaking to Charles Allen about that

9 statement .

10 C: I don't recall that. There was a, during this period,

11 this Is Immediately before the meeting with the second channel,

12 there was a lot of talk about Ghorbanlfar— How you get him out

13 and still of the operation and still preserve the secrecy In the

14 operation. And, uh, I don't recall a specific price tag being

15 put on It, but I knew, you know, we all knew that It was going to

16 cost/quite a bit of money. You know to bribe him out of there.

17 As It happens, when we had the first meeting, one of the things

18 that^^^^^^^Hiuggested was that they can continue to throw

19 some arms business his way in an attampt to keep him quiet.

20 W: This a, this a memorandum...

21 C: The specific sum of four million, I don't recall that.

22 I recall the discussions about, you know, how you get Ghorbanlfar

23 out of It and everyone saying well. It's going to cost quite a

24 bit of money.

25 W: Ghorbanlfar was still crying that he had been

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1 financially wounded too, as a result of the HAWKs spare deal,

2 correct?

3 C: That's true.

4 W: There really are two immediate questions that suggest

5 themselves in light of this entry. One is, why does Ollie, as he

6 uses the name, why does Ollie North have to come up with four

7 million dollars? And, the second question is 'Where is Ollie

8 North going to come up with four million dollars?

9 C: I would ask the same questions, [laughter] That's a,

10 that's a, I wonder if Charlie really meant...! uh...I can't

11 remember any. I think that what he means, Ollie' s not, but Ollie

12 as the head of this thing is going to have to find, somewhere,

13 somehow, you know, four million bucks, to pay off this guy. But,

14 uh, I mean, there was a lot of talk about how you get rid of him

15 but no, to the best of my knowledge, no steps were ever taken.

16 W: I ask.. .

17 C: The claim was. Excuse me. Ghorbanifar 's claim, its a

18 lot of, in the finances there's a lot of confusion. His claim

19 was. Let me first go back. ^^^^^^Btold me that they paid for

20 the first shipment of those spares, four million dollars. That

21 first Maule. And then they later, on the 27th of August, he told

22 me they had just deposited, and he says it was interesting

23 Ghorbanifar demanded cash — eight million dollars — cash, in

24 his account. And, that they had agreed with him that all their

25 accounts were square. Somewhere, I don't know where it came

26 from. I think it came from Nir, who subsequently, when I asked

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1 him about It said, "no" that Ghorbanlfar also got a 6 million

2 dollar payment from them, which would fit in with that letter

3 that he asked for 18 million.

4 w.: That fits in with his financing with Khashoggl.

5 C: Okay, yeah. And a, but he told us that only 1 million

6 of the 4 million dollars he got at the end of June, sometime in

7 June went for the HAWK spares and only 5 million out of the 8

8 million dollar payment. And then he used that to... and this

9 fits in with the amount that he paid the creditors, cause he only
10 paid them something lilte 6 million, 1 hundred-thousand dollars.
IX W: I asked Charles Allen about this memorandiim and uh, he

12 added to this observation that on the evening of September 9 when

13 he was speaking with North (and that conversation was the basis

14 of this memorandum) that he asked North where he was going to get

15 the money to pay-off Ghorbanlfar and North said to him, "I guess

16 I'm going to have to get it out of the reserves." And Allen told

17 me that he found that to be a devastating statement but he

18 couldn't explain why it was, he didn't put It In his memorandum.

19 My question to you would be — Do you recall Allen sharing that

20 observation with you In this time frame?

21 C: I don't recall that. He may well have, I would be the

22 last one denied because Charlie was pretty good about telling me
2 3 things that were going on. But, I don't, I don't recall a

24 specific conversation with him about it, no.

25 W: Let me, let me approach the subject a little more

26 generally. In approximately late August, by Mr. Allen's

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UNCUSSIfiEi

1 calculations, he had a conversation with Richard Kerr, uh the

2 Deputy Director of Intelligence, In which he shared his concern

3 that perhaps the Americans were responsible for Inflating, at

4 least part of the HAWK spare price and that some of the excess

5 was being directed to the Nlcaraguan opposition. And he based

on One ,^^^^^^^^^^^^^^^^^^^^^^^^H

7 another was the Involvement of Secord and Hakim, a third was the

e attempt by the United States to create a false price list, that

9 Is a false microfiche to throw the Iranians off the scent of the

10 real microfiche price list that they had uncovered. Uh, do you

11 recall any point at which uh Mr. Allen shared those same

12 misgivings with you before this whole matter became public?

13 C: He had, well, Charlie had an awful lot of misgivings

14 about what was going on because of the people who were Involved

15 In It. Um, I don't recall his ever telling me about his

16 conversation with Dlclc Kerr, though.

17 W: How about those suspicions that the Americans were

18 responsible for Inflating the price and that there was a possible

19 diversion to the Nlcaraguan opposition.

20 C: I don't recall any specific comment about, not at that

21 time. Later though, yes.

22 W: Do you recall whether he said anything...

23 C: I remember that I wasn't In the building, you know, a

24 lot of this stuff would go on and I would not be In there for

25 quite a while. And uh, I would only come In when something came

26 up that I had to do. Uh, so as a result. If one of these things

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936

1 went by and I wasn't there, quite often I would never even see it

2 or be aware of it.

3 W: Let me direct your attention to something specific and

4 see if, if this incident generated any conversation along those

5 lines. Uh, I thinlc it was on October 22nd you and Charles Allen

6 went and visited with Mr. Roy Furmark. Uh, Purmarlc had earlier

7 visited with uh, the Director,

8 C: With Charlie.

9 W: and with Charlie, and uh, and had on different days, he

10 had visited with the Director, I think on October 7 and again on

11 October 16 and with Charlie on October 16 in a separate meeting.

12 But in any event, when you went up to that meeting, I think in

13 that meeting, Purmarlc raised the possibility that Ghorbanlfar

14 might say that there had been an inflation of price and a uh, and

15 a diversion. Do you recall any discussion with Charlie in the

16 wake of that conversation about Charlie's own independent

17 suspicions along those lines?

18 C: Charlie and I had been suspicious of what was happening

19 on the pricing and the money and everything for sometime. And,

20 the first time that I remember Charlie saying anything about the

21 possible, possibility of, we it call now, diversion, was after

22 his meetings with Furmark. Uh, when we went up to see Furmark,
2 3 the memo '■■K signed by him we both wrote because Z was taking

24 off uh for the meeting in Mainz. And, Furmark pretty much laid

25 out the whole thing in that Ghorbanlfar had told him the reason

26 for the high price to him, 15 million dollars was, that was

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937

ICUSSIflED

1 charged to him of 15 million dollars b«caus« th« rast of tha

2 profits from It ware being diverted to the Contras.

3 W: uh, did, did uh, Charles Allen then, later on outside

A of Purmark's presence, say to you "Gee I suspect the same thing.'

5 C: Well, once I heard that, there was no, he didn't have

6 to. I was certain It was probably true.

7 W: Both the price Inflation and the redirection to the
6 Contras?

9 C: Yes.

10 W: You say that you and Charlie Allen had been suspicious

11 for sometime. Let me ask you two questions about that. One,

12 what made you suspicious and two, how did you become aware that

13 Charlie was suspicious.

14 C: Well we talked about, we could not understand why

15 Ghorbanlfar would raise the price so damn much. Z mean uh, what

16 threw us off was the 22 April arrest, because Ghorbanlfar was

by the Swiss police ^^^^^^^^^^^^^^^^^^^^^^^h

18 ^^^^^^^^^^^^^^^^^^^^ Cyrus ratted on him and

19 this why the police oh uh arrested him and this led us to

20 conclude he was Involved In that sting operation and probably

21 lost a lot of money. That's probably why he was asking for is

22 million dollars from Tiny Roland to oh uh finance that deal and

23 Khashoggl. So that, well maybe he's trying to get as much as

24 possible to get hljnself back you know, back in the black. Uh,

25 but, once we heard, you know, once I heard that from Pumark, I

26 was from that day, you know, fully aware, Z accepted that. It

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938

1 just fit in too much, Z mean, bacaus* if you read that carefully

2 how thay calculatad th« pricing and avarything, that soundad,

3 that soundad mora lika what thay would do.

4 W: Lat ma back you up a littla bit. You, initially, you

5 wara not suspicious of prica inflation from tha Amarican sida

6 bacausa of Ghorbanifar's arrast in Switzerland and uh, and uh the

7 likely financial trouble that was coming from that.

8 C: Wa thought, I tended to think then, after that, that

9 the reason why Ghorbanifar was really inflating the price was to

0 recoup the losses that he had sustained in the sting operation.

1 W: Okay, now, now after that there came a point, Z guess

2 bafore the Furmark meeting but sometioie after the Ghorbanifar

3 arrest that you bagin to suspect maybe it wasn't just

4 Ghorbanifar. when did, when did that thought creep into your

5 mind?

6 C: This part of the problem is that, was uh, and one of

7 the reasons why it was so late in coming, the. . . we knew that a
• lot of the things had to b« that, that, well we kami that Col.

9 Morth had to raise the price to cover tha expenses of everyone

0 else involved, you know the hiring of flight crews, the extra

1 aircraft, all this, tha boat, what have you. we didn't know how

2 much that waa, so it was more logical for us to suspect at that

3 point Khashoggi and, and oh uh Ghorbanifar. Now, another thing
that threw me off is, is oh uh, when we brought flHHj^^^^^to

5 Washington, uh General Secord did it with a, in a private jet

26 that he oh uh, leased. Uh, Korth told me that "hey look, we

124

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UNClASSIHti

1 don't have any money uh, I'm thinking of charging CIA for the

2 aircraft. Uh, Claire doesn't remember but he brought that up

3 with, in a meeting we had with Claire George." And at the same

4 time, this is when he starting telling me he was very much

5 worried, particularly about Dick Secord because what they were,

6 they were practically bankrupt and Secord was in serious

7 financial straits. He wasn't worried about Albert Hakim.

8 W: This is North who's worried about Secord?

9 C: Yes. And he says that Dick is spending his own money

10 on these things. So uh, that threw me off, but once I,

11 everything, so many pieces fit together and Furmark's explanation

12 was pretty crystal clear, was getting uh. Charlie's suspicions

13 became extremely strong after he talked to Furmark.

14 W: Okay, are you unable to place when it was you became

15 suspicious of the Americans?

16 C: Well, I was away as you recall, when all these Furmark

17 discussions took place, Z was in Europe.

18 W: Okay, let me stop you right there. Do you date your

19 suspicions before the Furmark discussions?

20 C: Suspicions of what?

21 W: Of parts inflation and diversion.

22 C: Uh, I uh, yeah, before, Z was, because I saw Charlie's

23 memo after I got back. The one he wrote on the 14th of October.

24 W: Alright.

25 C: And, that, you know I became awful suspicious.

26 W: I am uh, really what I'm interested in is just placing

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UNOmSSlFiED

1 this in tiitw.

2 C: Okay, thli would b« about, I saw tha mamo on about tha

3 15th of Octobar.

4 w: Okay, but what I'm trying to, what I'm trying to placa

5 In tlma Is your suspicions. Is It, Is It tha sarlas of Furmark

6 discussions baglnnlng uh, say In sarllar Octobar with tha

7 Dlractor, I think on Octobar 7, uh. Is It this that Is causing

8 you to ba suspicious or ara you suspicious bafora Furmark appears

9 on tha scana?

10 C: I don't think I was, causa I was thrown off by you

11 know, what North was tailing ma. Uh, but aftar I got, all thosa

12 Furmark maatlngs occurrad whlla I was away. And onca I got

13 through, I think It was tha 15th of Octobar or 16th whan I saw

14 Charlla's mamo and, I was from that point, you know, strongly

15 suspicious that somathlng alsa was going on baslda Ghorbanlfar

16 gouging us.

17 W: Lat ma uh, uh changa topics bara for a momant.

18 C: That's not to say that, you know, thara wasn't

19 suspicions that sotna, but you know wa, thara was nothing you

20 could point to. Othar things saamad mora llkaly than that, up

21 until tha aarliar fall.

22 W: In uh, tha Taharan maatlngs thara' s a, a shoa that has

23 droppad and tha sacond ona has fallad to drop, uh, and uh, at

24 laast tha way tha notas raad. And, lat ma dascrlba this

25 phanomanon to you. Uh, tha uh, ona of tha Iranians, and I

26 bellava It ' s ^^^^I^^HB askad tha Amaricans, "What Is your

126

iiNfi! m^i

941

sMsra

1 vl«w of Iraq, Its rtglme?" There's no response noted in there,

2 uh, the uh status of the regime In Iraq was uh, was an Item of

3 great concern to the Iranians. Uh, do you recall that exchange

4 and did the Americans have a response in Teheran on the subject

5 of Iraq and its regime?

6 C: Is there something preceding that, you know, is , who's

7 memo was that?

8 W: Let me show it you for the record.

9 C: I don't think I made any notation of that in my memo.

10 W: No, this is not your memo.

11 C: I have to take a, I have to take a quick look at it to

12 see if anything jogs my memory.

13 W: The uh, citation uh, is a on B104 of the Tower Report,

14 the speaker is the Iranian official, which is^^^^^^aand uh,

15 I'll show it to you in a moment but, let me read it for the

16 record. "The Iranian official specified Soviet intentions,

17 Afghan issues, Lebanese affairs. Middle East peace, Iran-Iraq

18 war, Khorlstan "What is your view about Iraq, its regime?" and

19 then McFarlane gives a general answer.

20 [PAUSE TO REVIEW MEMO]

21 C: Okay, yeah, I remember that there was, at that time

22 this wasn't — that's about the way it happened. McFarlane

23 didn't, and^^^^^^B completely changed the subject.

24 W: Did it come up again on the course of the Teheran

25 discussions?

26 C: Yes. What they, what um, what they insisted upon was

127

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942

oirirn

1 that they w«r« prepared uh, to drop all of theiX demands on Iraq

2 uh except for the one^^ who were, that one that uh bac)ced the

3 government had to go and. Sadden Hussein had to go. They had

4 made you Icnow, they had made quite a number of demands. They

5 were prepared to drop all those but that they would not negotiate

6 a peace treaty with Saddam Hussein.

7 W: Did they uh, as they later did in. I think in, uh

8 Germany, did they later or did they try to enlist in Teheran the

9 support of the United States in removing Hussein?

10 C: No.

11 w: Not in Teheran?

12 C: Also that's the enlisting of U.S. support in removing

13 Hussein, is a bit, is a bit overblown.

14 W: I'm going to give you a chance to talk about that in

15 just a moment. Uh, let me go directly to the uh first meeting in

16 Germany, the one in Frankfurt. Uh, the uh, there were a series

17 of topics that were discussed in a, in Frankfurt, and this I

18 gather would be your second meeting with <ih, (uh, let the record

19 reflect that was Oavid Pearline sneezing) [LAUGHTER] Uh, the uh,

20 this would be your second meeting with^^^^^^^^^His that

21 correct? Uh, on top of the meeting in Teheran.

22 C: Uh, that's true, this is the, he did not show up in the

23 September meetings but he did in the Frankfurt meetings.

24 W: And this is the first time you would have met him in

25 connection with the Second Channel?

26 C: That's, that's correct.

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yfiCUSSflED

1 W: Thar* uh, uh at the Pranltfurt meeting uh, there Is

2 discussion of the uh list of arms that uh, that uh,lHH||Hhas

3 brought up in Washington, which was an extensive list of arms

4 including uh, uh several hundred Howls Lei barrels and urn an

5 ambitious wish list to be, to be sure, uh, those meetings of

6 course were tape recorded and uh in the course of that meeting,

7 uh North said that basically the limitation on them, the American

8 provision of arms was that they uh should not Include items that

9 would allow or encourage the Army of the Revolutionary Guards to

10 seize Baghdad. Do you recall that?

11 C: I think that that was probably one of the delaying

12 tactics oh uh. North used during these discussions. He didn't

13 want to rule out anything at that point In time. But at the same

14 time he didn't want to make a commitment to deliver anything,

15 since we had no capability of delivering them, what they wanted.

16 I, one of the consistent things you'll see, and he made it at

17 this meeting is that there could be no regular resumption of arms

18 sales to Iran until the Peace was signed and hadn't resumed

19 normal relations. In fact, at some point, it was several points

20 uh during that meeting when laughter erupted when we were, about

21 how we would go about resxjming normal relations.

22 W: The uh, the tapes show a discussions of normal

23 relations as being a goal, but they, they don't invariably tie

24 Increased weapons shipments to uh, to peace with Iran and Iraq.

25 C: The uh, what uh, the position that North took is that

26 oh uh, as he referred to It — a "normal supply system" could

129

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IINWSSIREO

1 not uh, be inaugurated until we had uh, re-established normal

2 relations and until the hostilities had ended.

3 W: Well that, that is not born out by the tapes, that

4 latter point.

5 C: It might have been, you know, the tapes don't cover

6 everything. That's one of the problems. North, was pretty,

7 pretty consistent on that, that we, normal relations were uh the

8 sine quo non — resuming normal arms shipments. And, also uh

9 peace .

10 W: North uh, let me strike that, Secord in the course of

11 these negotiations in Frankfurt suggested that one indirect way

12 the United States could assists the uh, Iranians on the Howistf

13 barrels was uh to direct Iran to a third country and then just

14 look the other way, was the way he put it. As Iran purchased the

15 How43£^r, Uowiater and the Ilalllster barrels uh North had pointed

16 out earlier that the problem with the number of Howister barrels

17 that were being ordered was in order for Washington to supply
13 them they have to open up a new production line. Do you recall

19 that?

20 C: I recall that. And I don't know if any action was ever

21 taken on Secord 's suggestion. I have no, if it was I know

22 nothing about it.

23 W: That uh, suggestion of Secord 's was not tied to

24 anything in particular?

25 C: I think he was just, these were, you know, in these

26 long winded discussions I think these were just things that were

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UNCUSSIFIEO

1 thrown out.

2 W: North has uh, testified in his public testimony that,

3 that uh, he was consistently lying to the Iranians uh in his

4 statements to them. Was that something that you were aware of?

5 C: well I think that what he was doing is, I - I wouldn't

6 put it as lying, I think that he was trying to, to prevent

7 himself from being made, from having to make any categorical

8 statements that we will or we won't do this. While we were, you

9 know the whole purpose of this is to keep the contact going and

10 uh, there were certain things that we could supply them uh, and

11 certain things that we couldn't. But he was somewhat reluctant

12 to give a total negative reply on anything — he didn't want to,

13 he didn't want to cut off the, the negotiations. Uh, I, I

14 wouldn't say, well, I would say its Middle Eastern negotiation.

15 W: Well I'm not, I'm not attributing anything to him,

16 other than what he described himself. I mean, his testimony was

17 and I quote it to you: "I lied to the Iranians every time I had

18 the chance." Do you, do you agree with that?

19 C: Let me, let ma put it this way, he told them things uh,

20 he said "yes" or something you know, on and then as far as I know

21 nothing was over done about it.

22 W: In the uh course of the negotiation and I'm going to,
2 3 I'm going now to the subject of Saddam Hussein uh. North stated

24 that uh, that the United States was "seeking a peace" between

25 Iran and Iraq that would be uh effected in such a way that it

26 would uh, as he said: "Becomes evident, becomes very evident to

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UNCLASSIRE

946

1 everybody that the guy who was causing th« problem is Saddam

2 Hussein.* Do you, do you recall that?

3 C: Uh, there was an enormous amount of discussion of

4 Saddam Hussein and Iraq, what, in what, the thrust of it was is

5 that the American side agreed with the Iranian side that there

6 can be no peace as long as Saddam Hussein'? in power, we said

7 olcay, we accept your contention that you can't make peace as long

8 as Saddam Hussein is in power and then the question is what do

9 you do about it.

10 W: What, what do you do about it?

11 C: Well, this is where some of the tapes are a little bit

12 misleading. I, to svimmarize what was agreed to is that we agreed
to make it clear ^° ^^^^^^^^^^H ^°^ ^ don't know if this was

14 done but, this was one of the things that came out in our

15 discussions with 'em.Korth said, we will make it clear ^o^^^^^f

16 ^^^^^^^^^H that there can be no peace as long as Saddam Hussein

17 is in power. We'll make that clear to them but, that we have

18 normal relations, diplomatic relations with the Iraqi's and uh,

19 unlike what has appeared in the press, there was no commitment

20 made for us to overthrow Saddam Hussein.

21 W: That is, the United States by direct military force?

22 C: ?e«h, that's true. There have been, there have been

23 articles in Buropean newspapers that I snuck out of the Hilton

24 Hotel and negotiated to overthrow Saddam Hussein with Rafsanjani

25 but, that's not true either.

26 W: I thought you were here to confirm that.

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[ LAUGHTER ]

UNCLASS!

2 C: NO. No, that's where there's a certain, and the tapes

3 are a little bit misleading, what we were agreeing. Olcay, we

4 agree with your contention that there can be no peace as long as

5 Saddam Hussein is in power, that's your sine qu^non, or whatever

6 it is. And, that what we did agree to, the actions steps we

7 agreed to, to the best of my recollection, was that we would malce
this position clear to^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^M

9 And, whether, uh my understanding is that Poindexter and North

10 did take some action on this. Now, what they did I don't know.

11 W: That they did?

12 C: Yeah, that they did. Yes.

13 W: where does that understanding derive from?

14 C: Uh, I think that I was told by Ollie one time that,

15 that oh uh Poindexter had talked ^^^^^

16 ^^^^^^^^^^^^^^^^^^^^^^^^^Hwith the Foreign

17 Minister.

18 [END OP TAPE NINE]

UNCLASS

133

948

UNCLASSIr

1 TAPE TEW

2 W: Mr. Cav«, w«'re bade on the record now uh, just to put

3 the Hussein matter In context uh, the uh, you've made it clear

4 that the, that what the United States was undertaking to do was

5 not a direct military overthrow of Saddam Hussein. Is that

6 correct?

7 C: That's correct.

W: Now, was that the, was that the route that was being
discussed here. That uh,the United States would approach/
^^^^^^^^^^^^fthat had up to this point been supporting
Hussein and uh suggests to them that they no longer support him

C: I think that, oh uh, uh, that was not specifically what
was Intended. I do not know what whoever discussed this, I'm not
privy to what was discussed with]
^^^^Hon this

W: Excuse me, I was thinking of what was represented to

134

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UHCUSSIFIED

1 Iran first.

2 C: Oh, oh, Nhat, what wai r«pr«s«nt«d to Iran was that w«
would make it clear to ^^^^^^^^^^^^ that in no way would Iran

4 ever agree to a peace as long as Saddam Hussein was in power, and

5 that uh, we were, we were convinced that this was the Iranian

6 position and uh, basically, what are you guys going to do about

7 it?

8 W: uh, in uh, these transcripts, Korth at one point uh, uh

9 suggests that the United States enter a secret dialogue with uh,

10 H^^^m^^^H states currently aiding Iraq. That was the words

11 he used to explain to them that: 'The real threat to their

12 stability in the whole region, the real threat is the Soviet

13 puppet in Baghdad." Do you uh, do you know whether he, he or
Admiral Poindexter took the step to go to^^^^^^^^^^Hand say

15 'look, this is the way we perceive the real threat to peace in

16 the, in the region'?

17 C: No, I can't, I can't say for sure, I know that. All I

18 know is, they were going to, they said that they were going to

19 take this up. Now, whether they did, Ollie at one point, as I

20 recall told me that they had had some discussions but, we never

21 got memos of anything that took place and I don't know if any

22 memos exists.

23 W: None that I know of. Uh, Mr. Cave uh, there came a

24 point, and this is still in the Frankfurt discussions, where uh,

25 where in the course of the subject of Saddam Hussein uh North uh

26 said to the Iranians, and this is the way the tape reads: "Saddam

135

mm^m

UNCLASSIFIED

1 Hussaln is a expletive* and uh Hakim aslced North If he really

2 wanted him to translate that and North who was attributing the

3 remarlc to President Reagan, said: "Go ahead, that's his word,

4 not mine." [LAUGHTER] Oo you recall that exchange?

5 C: I remember that, yes.
6
7
8
9 ^^^^^^^

10 W: In the uh, again, in the uh FranJcfurt negotiations, the

11 subject of the Dawaa prisoners came up. And, on that subject uh,

12 the uh, uh, fellow whom Hakim called the 'Engine' uhl

13 asked, basically asked the Americans for guidance, to show him

14 the way on a, on uh, improving relations and North then brought

15 up the subject of arms and assisting in the uh, in the uh

16 situation of the Dawaa prisoners. Much later in the discussion

17 North said, uh, that although the United States had told the

18 Government of Kuwait that the Dawaa prisoners were their business

19 that the U.S. would neither criticize Kuwait]
20|^^^^^^^^^^^^^ should Kuwait release them, and that the U.S.

21 had recently conveyed this position to Kuwait. Do you recall

22 that discussion?

23 C: 7es Z do. What, what he said was is that, in essence,

24 is that we have told the Kuwaiti ^s that if these people are,

25 these Dawaa prisoners are released by Kuwait,
26

136

DMcmre

951

UNCUSSiFIE

1 W: Nor would the U.S. criticize them for having released

2 them?

3 C: That's correct.

4 W: Is that consistent with your recollection of...?

5 C: That Is consistent with my recollection.

6 W: And he also advised the Iranians that he believed that

7 the Kuwaiti's would be receptive to releasing the Dawaa if they

3 could get a guarantee against terrorism. Is that also consistent

9 with your recollection?

10 C: Uh, not so, well, not entirely, what, what he said is,

11 is that certain of the prisoners uh, with lesser terms uh, the

12 Kuwaiti's may be, may be willing to release with suitable

13 guarantees uh, on some religious occasion — something like that.

14 But, not, not a whole set, not all of them.

15 W: Isn't it the Lebanese^^Mne "Members of the Oawaa who are

16 under the heaviest sentences?

17 C: Oh yeah, there's three uh, three, like we made it quite

18 clear to them that the three guys who ace convicted, that have

19 been sentenced to death are never going to get out.

20 W: You made that clear to the Iranians?

21 C: Yea.

22 W: So, what we were, what were we talking about in terns

23 of the Oawaa hare, who's getting out?

24 C: Five guys. They're due to get out this year, I think.

25 W: And they are not Lebanese. Is that correct?

26 C: Some of them. I've never gotten a break down. There,

137

UNCLASSIFIED

952

UNClASSlFlEfl

1 there are three different categories of sentences. There are

2 three guys that are sentenced to death. They are Lebanese. Two

3 of them, I thinJe. Two out of the three and, then there are nine

4 others that have oh uh, lesser, have pretty heavy sentences, and

5 then there are five that have, I thinlc, Just four years. So,

6 when would talk, what we committed to do was one of the things

7 that the Iranians were worried about is that these, the Kuwaiti's

8 would not release the five when their sentence was up.

9 W: They, they wanted them to. Was that correct?

10 C: Yeah, and oh uh. North made the commitment to intercede

11 with the Kuwaiti's to malce, to find out if these guys would be

12 released when their sentence was up. So, when, when you're

13 talking about the Oawaa prisoners you're basically talking about

14 those five plus uh, others who had longer sentences but not real

15 long sentences, maybe the Kuwaiti's would oh uh, at some suitable

16 occasion oh uh, uh, release a couple of them.

17 W: Can you explain to me why it is that nowhere in any of

18 the tapes does that distinction appear?

19 C: I don't know because I - Z, if you look at some of my

20 notes uh, particularly in Te, you know in Teheran, North is

21 respond, the initial response that by both North and McFarlane is

22 we'll, w«'ll, we're willing to take certain actions but, we won't

23 interfere with legal, due legal process in Kuwait.

24 W: Right. I- I'm really limiting that question to the, to

25 the Frankfurt and Mainz discussions.

26 C: But if you look at my oh uh, my reco, I don't know if I

138

UNCUSSiHE

953

UNCUSSIFi

1 put anything In my notes about it but, I am convinced that what

2 we were talking about was the five guys who were due to get out,

3 I think it*s this year and maybe one or two of the others. But,

4 we had made it quite clear I recall this specifically, that hey,

5 forget about the three guys that are sentenced to death.

6 W: The uh, nine point plan that Albert Hakim ended up

7 negotiating at the end of the Frankfurt uh, meetings, that

8 specifically contains the number 17 for the plan to release the

9 Dawaa prisoners. Uh, there is, there is uh, uh a modification of

10 that in the uh PROF note that I showed you earlier where it

11 refers to some Dawaa' but it's an undetermined number of Oawaa

12 prisoners who are going to be released. Uh, again, the tapes of

13 both Frankfurt and Mainz show no discussion distinguishing

14 between prisoners with varying prison sentences and there's no

15 point at which the United States delegation in terms of the

16 Iranians, at least on tape, and says to them -- the three who are

17 sentenced to death are not coming out no matter what.

18 C: I remember that specifically. North saying it. I can't

19 remember, I think it was said first here in Washington and then

20 reinforced at the initial meeting in, in Frankfurt.

21 W: Well, it was, what was said in Washington was uh, that

22 uh. North said that he would not interfere with the processes of
2 3 uh, of uh, Kuwait. But, in Frankfurt that same sentiment did not

24 come across, and there was, there was no distinguishing uh,

25 points that you're referring to on sentences did not come through

26 at all. And, there was no specific reference to any Dawaa

139

UNCIASSIF

954

UNCLASS

1 prisoners under death sentence.

2 C: I'm certain that - that was, it might not be in the

3 tapes or anything, but, I'm certain that - that came up. That we

4 just couldn't do anything about, nothing can be done about the

5 three that were sentenced to death.

6 W: Well, how was it that Albert Hakim then negotiated a

7 plan that included all 17?

8 C: Well, I think that if you want to though, but the final

9 fruit of this so-called plan that oh Copp and I were supposed to

10 devise for the, for the Dawaa 17 comes up in the meeting we have

11 with^^^^^^^Hin Geneva in which we basically, if you look very

12 carefully at my minutes, we've, we are haggling with him all day

13 on this saying that we can't do anything more, we can't make any

14 guarantees with you, and the only way you're going to ever get

15 anywhere with the Kuwaiti *s is by going down there yourself and

16 talking to them. And they finally agreed to that.

17 W: Okay. Okay, but I don't want to, I don't want to go to

18 November yet.

19 C: Okay.

20 W: I'm uh, I'm uh speaking really of Prankfurt uh, in

21 Prankfurt that distinction just isn't there.

22 C: I'm certain the distinctioni^i^ was made.

23 W: Now you, you read those tapes before you came down

24 here.

25 C: Yes I did, and I- I think that one of the unfortunate.

26 I'm positive that the distlnctionjag was made in Prankfurt

140

955

^T?

1 between the different categories of prisoners.

2 P: was It possible that the uh, uh, the conversation uh-uh

have.

3 could occurred but not been recorded?

4 C: A lot was missed, a lot was missed on the recording.

5 [ Okay, that was David Pearllne who was uh, assisting there.

6 Laughter]

7 C: There was Incidentally a lot missed. There was a lot

8 missed on the, on the tapes.

9 W: The, the tapes read as though uh, much was missed. The

10 thing that I find uh, disturbing Is that although, the - the

11 tapes also caught quite a bit and that uh, there's just no where

12 In what they caught, any reference whatsoever, to any United

13 States differentiation between the prisoners on the basis of

14 sentences and no Shermanev^^atement out of North saying "there

15 ain't no way on the three that have been sentenced to death."

16 C: If uh, tzs of any help I shared your view when I read

17 It because I know that uh, the word distinctions made In

18 categories of prisoners. Uh.

19 W: And you're pretty sura that was in Frankfurt?

20 C: Yes. I'm certain. I mean, we talked about

21 dlstinctiooa between the prisoners, we also talked about them as

22 a group, but, I'm certain that when we were talking about what

2 3 we, anything that could be done, we were talking about the people

24 who were the lesser terms.

25 W: Do you recall uh, uh the Seven Point Plan that North

26 came to Te, to uh Frankfurt with?

141

956

uNcussre

Teheran?

modlflca

This was the Seven Point Plan that was written In

The same.
Yeah.
It reads.

The Nine Point Plan of Hakim's is sort of a
modification of the original Seven Point Plan.
Well, its - its more than sort of.

OJcay, it^s - it?s a modification of the Seven Point Plan.
The Seven Point Plan that uh, that North brought with

11 him uh, for example,' did not contain any provision for sequential

12 release of hostages, uh.

13 C: That's true. Because its the same as the way we, the

14 way we wrote it up in Teheran.

15 W: There is a, it has some additional factors in it, for

16 example, the release of John Patus, who had been a prisoner at

17 the time the Teheran meeting occurred and also the BucJcley

18 debrief is Included uh, which you didn't )cnow of at that time.

19 In that uh, we have a copy of the, the North handwritten notes,

20 uh, that is cut off on the bottom, the last line is eliminated

21 but it refers to uh, the 7th step, the U.S. will then identify

22 sources for other items oh the list, the bottom part of the, of

23 the sentence is incomplete. Uh, I have by reading the October 10

24 PROP note concluded that - that probably is a reference to the

25 list of arms that the relative brought to Washington with him.

26 Do you recall the seven points well enough to, to express an

142

!F!

957

1 opinion on th»t? wi»w«

2 C: I'd hav* to loolc at tham.

3 W: Okay, lat m« hold off just a minuta hara, and I'll pull

4 that out of my fila. I'm going to go off tha racord for a

5 momant .

6 [PAUSE]

7 W: Mr. Cava, I'm showing you what has baan markad as

8 axhibit ISA. Would you taka a momant and raad it plaasa?

9 [PAUSE]

0 C: Yaah, that's what that rafarrad — What was tha data on

1 this?

2 W: Thar* is no data on it.

3 C: This was, basad, this was not tha original Savan Points

4 in Taharan.

5 W: Right.

6 C: Thasa, thasa ara what wa did at tha Saptambar maating.

uh,jH|^^^H

• C: That's right. And, you'ra corract wa will was

9 what ha was rafarring to, tha othar row of itans on tha list.
0 W: Now, Albart Hakim uh, in his daposition, idantifiad

21 this list as a list that was laft with him as basically a

22 nagotiating guidalina for uh, in Frankfurt whan ha was laft to

23 nagotiata with tha Iranians himsalf and ha idantifiad this

24 inscription at tha top as baing tha handwriting of Ganaral Secord

25 uh, and I think that's whara soma of tha uh languaga comas from

26 on uh tha U.S. position with raspact to Saddam Hussain.

143

958

2
3
4

5
6

9
10

"■■ Ml youT. r.f.rrin, no. to tb. „h. socord uh «,,„ on
tl.. top Of »5« .hxch r^.. .« ^„„^ 3. ^„,^„ __^^ ^^
B.li.v. .. c„ h.lp .,t.r .6.t.cl.. ,0,. .Mch .. . ..,.„„.. ,,

"|^|o»tag*3, I would aaaum^

C: What - what', raally misleading in tha tapas Is It
-PP-rs almost as If thara's a co«»,itn,ant that ..'r. going to
-rch in and drag Saddam Huss.ln out of tha Presidential Palace
and put something, someone else In. and thafs not the case.

144

UNCUSSIFIED

959

UNCLASSIFIED

1 W:

2 C:

3 W: Now, th« tap«s show, and I think th« uh, uh, th« recent

4 uh tape transmissions...

5 C: I have a confession to make. I didn't want to tape

6 those meetings, [LAUGHTER] I've always found that tapes are very

7 bad uh, because you never get everything and uh, they're also

8 subject to interpretation. Also, when you're taping meetings

9 like this, there's so much that's said that is later

10 countermanded uh that, it becomes very confusing.

11 W: Duly noted. In the uh, tapes that we have of Frankfurt

12 uh, there comes a point where North uh, departs the meeting and

13 uh, what he says is, "why don't you guys hold this discussion

14 after I'm gone* and then he refers to the Seven Point uh document

15 and I think he's referring to uh what has been marked as Exhibit

16 ISA.

17 C: I think I left off though. I left that meeting also,
16 at thm same time North did.

19 w: That was th« question I was going to ask you. what

20 happened to you at that point?

21 C: I hMl an irate wife sitting in a hotel. [LAUGHTER] So,

22 I - no I left because I had uh, I had made, alreedy made

23 arrangements to go with my wife, to go see my German

24 grandchildren or our German grandchildren, so I left at about the

25 same time North did. And, Hakim brought the rough copy of the

26 Nine Points at the airport the next morning.

145

iiNHi hmm

960

UNCUSS

T'>. f-

1 W: Alright, now I want to show you what uh, I have marked

2 here as. Hold on, I'm going to go off the record for a moment.

3 Back on the record. I'm going to show you what's been marked as

4 uh. Exhibit 16A and 17A. 16A is a translation by Albert Hakim of

5 the Farsi original of the Nine Points cwo-page document and the

6 second document is 17A, a uh, document with the CIA logo on it

7 dated uh 6 October 1966, evening until midnight. Mr. Cave if

8 you'd take a moment and review those two documents.

9 [ PAUSE ]

10 C: This, okay this is, this one

11 W: This is 17A. Is that correct? when you say this.

12 C: Yeah, 17A, this is the one that Albert delivered to me

13 at the airport on the way out. Cause I immediately questioned

14 him on what did he mean by one and one-half American hostages.

15 Which half?

16 W: Was that his own English rendition of it?

17 C: Uh, yeah. Wait, uh no. I don't know whether I - I

18 can't remember whether I translated this. I remember him giving

19 me the Farsi too, and I don't know whether I translated this or,

20 or what.

21 W: Did you uh — When this whole initiative became

22 publicly exposed did you, were you able to locate a Farsi version
2 3 of this Nine Point Plan in your files?

I thought I passed one to you.

We don't have one, but uh — Do you recall having one?

Yeah, he gave me one.

146

UNCLASSIFIED

961

UNCLASSIFIED

1 W: Hakim did?

2 C: Hakim did. Uh, but someone's got it. It might be that

3 the SSCI has it for all I know.

4 W: But your recollection is that you have it?

5 C: There is one. Yeah, I had one at one time, I know.

6 But what I did with it, is beyond me. But this is, yeah, this is

7 the first draft as I note down here they're available at the NSC

8 subsequent refinements because...

9 W: Is that your handwriting?

10 C: That's my handwriting. Albert, when he told me, he

11 said there was a coyple other things that might be changed based

12 on uh, conversation he was going to have with them.

13 W: With whom?

C: oh uh, uh - uh,^^^^^^^H after

15 W: And uh, just for the record, the reference to your

16 handwriting is on 17A at the bottom of the page. Is that

17 correct?

18 C: That's correct. I - I honestly can't recall whether

19 this, I, whether he gave me the English of this and, I know he

20 gave me the Farsi. I don't know whether I trans.. I can't

21 remember whether translated that or what.

22 W: NOW this plan clearly calls for the 17 prisoners held

23 in Kuwait?

24 C: This one is the — yes, that's true um, but urn, is

25 there a plan for a release of the 17 persons. The only thing I

26 can tell you is that was in talking to the Iranians they agreed,

147

UNCLASSIFIED

82-692 0-88-32

962

UNCLASSIFIED

they agreed to this wording because if you go forward in history
to the November meeting/ we told them we had done everything we
could and everything else was up to them.

W: Now, you're uh. . .

C: But, during the discussions I'm absolutely certain that
the three guys condemned to death, it was made clear that nothing
could be done about them and that the hope was for the five guys
with the lesser sentences and some of the others who had varying
sentences .

W: why is there any doubt that the people who have already
received determinant sentences aren't going to be let go in, at
the end of their period of time?

C: Uh, the Hizballah in Lebanon was concerned that the
Kuwaitis would continue to hold them as hostages against any
future acts of terrorism.

W: All of them?

C: All of them, not release them when their term was up.

W: I'm going to show you again the uh, PROF note dated
10/10/86, uh there the uh Nine Points have been reduced to Seven

148

m hmm

963

wussm

1 Points and uh, there's uh, there's a reference here, an entry

2 here that says: ^^^^^nave Dick a proposal closer In line to my

3 original Seven Points and aslced DlcJt If there was any way he

4 could get us to meet before November 3." Who'sJ

C: j^^^H^

6 W: Take - take a look at the uh, uh first paragraph of uh,

7 unnumbered paragraph of this PROP note.

8 [ PAUSE ]

C: Oh, that's oh uh, that has to be uh,^^^^^^^H|

10 W: Is that uh, another pseudonym for him?

11 C: Yeah, 'I don't understand it — why he's using It.

you know ^^^^^^^^^^^^^^^^^^^^^ See

13 is — you see — to release some of the Dawaa.

14 W: Right, I noted that earlier. Now, how were these

15 modifications made uh, Mr. Cave uh, Albert Haklm has negotiated a

16 Nine Point Plan with the Iranians uh, that plan is transmitted,

17 it^s dated October 8 on the English translation that we marked as

18 uh, I think uh, 17A. This is two days later, the Iranians

19 presvimably have departed from the scene and this looks like a

20 different proposal — it's been changed in some way. Now, how

21 was that accomplished? Do you know?

22 C: If you noticed in the bottom of mine, I said that the
2 3 final, this Is just a draft version, and the final version will

24 only be available at the NSC. Uh.

25 W: When you say that... well who's doing the negotiating?

26 what's — How does this agreed upon?

149

ONCLASSIRFfl

964

UNCUSSiflED

1 C: I uh, all of the negotiation from this point was

2 carried on by uh, Halcim and Secord. I was out of it. I — Ollie

3 and I left the meeting at the same time. They did all this

4 negotiating. These, this, these two proposals were done by,

5 negotiated by them. Now, I don't know how they, I honestly don't

6 know how they got from this, to this...

7 W: From this, you mean 17A to...

8 C: This, I think, to this, to this, to this...

9 W: Okay, wait a minute, we're going to have to, I'm going

10 to have to do this for the record. When you say from this, to

11 this, to this, you're talking, you're referring first to 17A,

12 then to 16A, and then you're referring to the October 10 PROF

13 note. Is that correct?
Yeah, that's correct.
Okay.

But, this see. . .

This is the October 10 PROF note.
The PROF note is more in line with my recollection of

19 the meetings of what transpired on the 17.

20 W: Okay, now I gotta, I have a couple of questions for you

21 about the PROF note. First, the PROF note contains a price for

22 the TOW missiles, uh, if you note on the top, the first point is

23 they're going to pay 3.6 million dollars for the TOW missiles,

24 which is a reduction in price per missile over previous TOW

25 transactions. Do you know how it was that at this stage of the

26 game, that is 10/10/86, the price had already been reduced?

150

UNCLASSIFiED

965

UNCLASSIFlEi

1 C: Reduced from what?

2 W: Reduced from the price that the United States had been

3 asking for TOW missiles uh, uh since February, which is 10

4 thousand a piece.

5 C: Oh, uh, I don't know. I don't know how, how they

6 arrived at this figure. I did not know what the price was at the

7 time. Is all I knew is when we had^^«^ainz meeting uh, the

8 Iranians already had the price because they arrived with a 4

9 million dollar check.

10 W: Alright, and - and this uh, PROF note would indicate

11 that uh, by lO/ip/86, they had a price that was in the area of

12 3.6 million dollars, which is a lower price since Its 500 TOWs

13 than the 10 thousand per TOW uh, that had been charged up to that

14 point. You - you're not aware of the dynamics that resulted in

15 the reduction of price?

16 C: I have no idea what caused the reduction in price.
17

18
19
20

UNCLASS

151

966

UNCUSSlFIEfl

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

SIDE ELEVEN - TWC/hgp

W. Uh, Mr. Cave did you hear that portion of Lt. Col.
North's testimony where he predicted the release of several of
the DaJ^wa prisoners? I think the language he used was "they were
going to release some of these prisoners as sure as I'm sitting
here we may as well get some credit for them" and I think by that
he meant get the release of some hostages.

C. He had told me, I didn't hear that part, but he
had told me that they had questioned the Kuwait^ai^ on those five.

w. The uh, point number 3, the prof note that says
that Copp and Sam are going to help prepare a plan for
approaching the Kuwait«|fs to guarantee no more terrorism against
the Amir and by which the Amlr« will use a religious occasion to
release some of the Da^wa what was contemplated by that? what
did you understand that you were supposed to be doing to execute
point 3?

C. What we were going to do is try and come up with
some sort of proposals that the Iranians could take down to
Kuwait as negotiating points.

Things like that. In other words
152

I'i'i^w

967

UNCUSSiFiE

1 we were not going to, and never contemplated, you know, direct

2 Intervention to get these guys released. Urn, what we had hoped

3 to was based on the fact that the Kuwalt*«s were going to

4 release, uh, these people when their terms were up Is get the

5 Iranians talking to the Kuwalt-«es and try and come up with some

6 reasonable proposals, uh, that might give them some negotiating

7 points with the Kuwalt«Ss.

9 w. This Is all relating to the five whose terms are going

10 to mature In the next six months or so?

11 C. Primarily those, we thought that maybe the Kuwaitees

12 might release one or two of the others who had, you know these

13 terms weren't that great, as some possible am:y(sty.

14 w. And that would be a release before the maturation of

15 their sentence? Is that correct?

16 C. That's correct.

Now, when Admiral Poindexter was questioned on the

18 Dakwa he said that the idea was that General Secord could

19 approach the Kuwaitees as a private citizen and that would not be

20 the United States acting. Was that your understanding, that

21 Secord was basically going to go in the capacity of a private

22 citizen and approach the Kuwaitiits and seek to get some

OL.

2 3 flexibility on the D^^a prisoners?

24 C. No, that is not my recollect J

153

968

W. And this is the Dahwa you're talJclng about now?

C. This is the D^wa, but I don't )cnow if anything was

ever done. And I don't recall Oiclc being mentioned as doing
anything with the Kuwaiteas.

w. And that is Diclc Secord?

C. Diclc Secord, that is correct.

154

>!Fi[S

969

UNCUSSIFIED

Olcay, now let me move HAnthe.

Nice town Mlatb&.

1
2

3 w. Love to go there. The, uh, I think you'll recall from

4 reading the transcripts that theN^^«**i« meeting begins with North

5 giving basically a progress report to the Iranians, uh, first let

6 me as)c you^^^^^^^ftttends the MJaiTth^ meeting. Does|

7 at all attend that meeting?

8 C. No^he's not there.

9 w. The notations In North's notebook Indicate that he's in
lO^^^^^^^H during that period of time. Do you recall anything to
11 do with his V Is 1 1 In'g ^^^^^H during that period of time?

No.

And, uh, otherwise It's you and North, Hakim, Secord,

Is that correct?
That's correct.
Anyone else?
There were^^^^^^^^^V f rom^^^^H and|

18 that always accompanlesJ^^HH|B they were there but they didn't

19 participate In the meetings. Also ^^^^^^H was there.

land

Let me back you up on the subject of I

Were they also present at Frankfurt?
I don't think so, not that I recall.
What were they doing In IUa^M?

Uh, I have to jog, I think that Hakim just brought them
was bringing something and I forget what It was.
came over because North asked him we were supposed

155

andl

■

over. J

And HI

970

utJtU^SiED

1 to congratulate him for his great works he had done^ whatever they

2 were. But he did not participate in any of the meetings.

[l thinJc at that time was a security

Is that

w.
concern
correct?

C. That's correct. And also we knew he was lying about
Ghorbanlfar.

w. There was some concern expressed in the Washington
meeting that he might even be^^^^^^^^^^H Do you recall any
10 credence to that?
11

12 C. That's Ollie North's, you know to warning the Iranians

13 who they are dealing with. You know, for all we know he's^^^^H

14 ^^^^H I don't know whether he is or not. The interesting thing

15 is that^^^^^^^H I don't know whether it was at this meeting or

16 at the Frankfurt meeting wanted^^^^Hcut out. Even though he

17 was ostensibly an eMofficio Iranian official buying arms for

18 Iran.

19 w. And officially I think that ^KKj^/fjhad named him as

20 one of the people who was going to serve on the joint

21 commmission. Is that right?

notJ^^H|_

23 w. I think that was in Washington, when asked to name the

24 Iranian team he said that he wantedHjj^Hto handle logistics.

25 C. Yeh, but he would not be a member of the team.

26 w. That is recorded in Secord's notes as being a member of

156

inu

971

1 the joint commission.

UNCUSSIFIE

C . No.

w. So that would be contrary to your understanding.

C. They would use him for logistics support type things
because he knew his way around but he would not, we had the four
members of the team.

w.
C.
w.
c.
w.

is that right?

You gofthose in

I think they gave them to us In Frankfurt.

You made a memo on that and I'll show it to you.

It could be but.

Let me run through this progress report that North gave

12 and what I want you to do is see if you can shed light on whether

13 any of these actions was taken or to the contrary if you know

14 them not to have been taken to Illuminate the committee on that

15 point. North listed among the steps the United States has taken

16 ^^^^^^^^^^^^^^^^

17 ^^^^^^^^^^^^^^^^^^H Do you know whether that the

18 C. I don't know.

19 w. uh, the United States also had had private discussions

20 with^^^^^^^Hof undetermined character, the Kuwaitaas and had

21 talked vary privately with^^^^^^^^^ according to North. Do

22 you recall beyond just that those talks were represented to have
2 3 occurred what the substance might have been?

24 C. Uh, Ollie told uh, Ollie told me that they were going

25 to talk to the people.

26 W, Okay, but North is representing that the United States

157

972

mmsife

1 has talked to these people. That 1

3 c. And as far as I know it's In the person of

the KuwaltoBs

Admiral

4 Polndexter and the subjects concerned the Iranian position on

5 5*iei«-mjssein is a prerequisite to peace uh, the hostage problem

6 being tied up to the Oao|wa problem and the fact that the Iranians

7 were very much interested in improving relations with the Gulf

8 neighbors.

9 w. Okay now, I think the Iranian position on -aoAain Hussein

10 was publicly known in the Gulf. Is that fair to say?

11 C. Well, 'I would say, publicly yes, but I think that what

12 we were trying to do was emphasize that we had done an awful lot

13 of research on us and had gotten an awful lot of information and

that nothing was going to move until

14 had assured
15^~-9o*«Hr Hussein went.

16 w. Now did you understand that the United States...

17 c. Oh, the Iranians, one of the things that they asked us

18 you know, I think it was at the Frankfurt meeting, to make it
clear to ^^^^^^^^^^^| that they weren't about to enter into

20 any kind of peace negotiations as long as 4«#«m Hussein was in

21 power.

22 W. Was there any concern that if the Iranians succeeded in
2 3 oust lng^S«4oiir Hussein^ it would be an absolutely phenomenal

24 victory in the region for them?

25 C. There was for them but one of the things that they, the

26 message that they wanted to get across to is they said look, we

lOis^sro

973

uNtussm

1 don't want it, we don't care if there's an Islamic government or

2 not we are willing to go along with the government that is
suitable to ^^^^^^^^^^^H and if they want to play a role in a

4 subsequent government fine, we just don't want anything to do

5 with 9«t«R Hussein and the Bath.

6 w. Did you have any concern that uh, in the event that

7 Hussein was removed the pot might be boiling enough in Iraq that

8 Iran would be tempted to seek through its own agents to influence

9 the character of the government?

10 c. If you're asking if I believed in the Iranian!;

H sincerity in what they said, no I didn'

w. So you would have had some reservations about whether

17 in the event that real political instability had manifested

18 itself in Iraq that the Iranians might nonetheless have taken

19 advantage of that, is that correct?

20 C. You know one of the few periods of political stability

21 in Iraq has beeft- Oidew Hussein ' s rji^e.

22 w. Okay, but you would have been concered in the event

2 3 there had been political instability in the wake of his departure

24 that Iran might have been tempted notwithstanding its words to

25 the American negotiators to try to and effect the shape of the

26 next regime.

159

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3
4
5
6

7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

C. I didn't have any doubts about that,
w. Next statement beyond the very private talks wltf
^^^^^^|was that^^^^^^H|stated that on October the
believe it was^^H^^^^Hmet with an Iranian representative and
that^^^^^^^^^^Bsald that he was that he had or was going to
shut' off the Iraqi pipeline that flows to the Red Sea when ^^H

;aid that North said that's us doing that, in other
words influencing the Iraqis to cut off the pipeline to the Red
know whether that act

C. There was a shut-off by the pipeline and I think the
reason that was given was technical.

In fact he had that meeting on October 12, he had had

\^:^£&^n

that meeting by the time the l^nt"hr meeting had occurred. Now do
you know whether when North said "that's us" d^ing the meeting^
whether "that's us" influencing the cut off of the Red Sea oil
pipeline. do you know whether there was any validity to that
statement?

lINCLMSiHEB

975

1 C. I have know concrete evidence that there is other than

2 what North said.

3 w. There also was a good deal of discussion In winttiy

4 about Phoenix Missiles. Do you recall that?

5 C. Yes I do.

6 w. There was a discussion in particular about the need to

7 bring in technicians to repair 72 Phoenix Missiles that the

8 Iranians hoped would eventually bring down some Iraqi fighters

9 who were punishing their, or bombers I guess who were punishing

10 their economic lifelines. Do you Icnow how far the talk

11 progressed on the, subject of the Phoenix technicians?

12 c. We did a lot of talking about that and I guess you

13 could say there was agreement in principle if everything else

14 went down right to send a technician in this would be roughly

15 about the same time we would send a commo team in to maintain

16 secure relations between the uh, secure communications between

17 the two countries.

18 w. Now there was also talk about sending in a Hawk

19 technician, correct?

20 C. That's correct.

21 w. That would be a technician distinct from a Phoenix

22 technician?

2 3 C. Yes, the reason the Hawk thing came up because in

24 analyzing the request for spare parts no one can figure out why

25 they wanted some of the things they wanted. We tried to tell

26 them they didn't need us and they said no their technicians said

161

976

UNCLASSIFIED

1 they needed them and we said well you know If you're ordering ten

2 of these things It takes a hundred years to order ten of them

3 (laughter) .

4 w. Long war.

5 C. So, we were saying also and what Secord was doing is

6 get someone in there that could look over their logistics, they

7 probably had a lot of the stuff and just didn't know how to find

8 it.

9 W. What you mean by that is they have a computerized

10 logistics system that they can't crack anymore.

11 C. Yeah, they can't get it working.

12 w. So they don't know what they have.

13 C. Well they gave us a lot of examples of how poor their

14 logistics system is. Prior to one of these assaults or one of

15 these offensives they call everyone they can think of all over

16 the country. How many 105 rounds have you got, how many

17 recoilless rifle rounds you have got, just to find what they'd

18 gotten and get It assembled. It's done almost mechanically.

19 w. There was In the btlnths tapes and I think you recall

20 this, there was discussion on the Hawk technician that in fact he

21 had been identifiad and there was even some talk about him coming

22 in under contract. It sounded from the tape as though his

2 3 deployment to Iran would be in the near future. Do you recall

24 how near his deployment to Iran might have been?

25 C. There were two possibilities there. One of them had

26 been discussed with Nlr about the possibility, you know there's

162

uNCiASSire

977

UNCIASSIFIEO

1 alLot of Iranian Jews in Israel and maybe among them could be

2 found a couple of technicians. The other thing now, I realize

3 there's ALot of talJc about sending a technician I don't know how

4 real close we ever got to doing that. I don't know if anyone was

5 ever identified. Secord told them that whether he had actually

6 identified someone I don't know. I never heard any names.

7 w. North, lets just go back briefly to the Da£wa, in Mi'n'lhr^

8 North said he had spent seven days putting together a plan on

9 Daawa. Did he share that with you?

10 C. He said that in>H«**^^

11 w. He said it, in fact he said it just to the Americans.

12 The way the tape reads that he had spent seven days putting

13 together a plan on the Da^wa prisoners. Did he go into any

14 detail that you recall on that?

15 C. No, I'm certain I would have remembered any detail on

16 that.

17 w. I'm drawing on your knowledge of Iran on this one.

18 Have you ever heard of the Ayatollah Khomeini referred to as His

19 Holiness the Imaj^?

20 C. Well he's referred to as the Imaa but not His Holiness.

21 I've never b«ard to him as His Holiness, just to say the Ima^ is

22 to say it all, they refer to him as the Imi^ Khomeini.

2 3 w. That's a term I think that westerners tend to associate

24 with the Pope. Is that your association?

25 C. Yep, that's correct. (Laughter), where did you get

26 that?

163

yNClASSlFIED

978

UNMSK

1 w. I don't have it right with me but there was a KL-4 3

2 message where North Imposed a speech for Rafsanjanl that was

3 (laughter) in which among other things Iran proclaimed "the

4 enduring reality of its Islaml resolution its Christian peace"

5 His Holiness the Imam's gracious command that acts of terrorism

6 are not acceptable to advance the alms of the Islamic resolution.

7 C. At one point they had told us that the Imam was

8 prepared a front law on terrorism.

9 w. They told you that on a couple of occassions had they

10 not?

11 C. Yeah.

12 w. I think that's referred to in Ghorbanlfar 's letter in

13 July 8 or July 9 and it's also referred to In Secord's notes in

14 the meeting in Washington with^^^^^Kpeaklng.

15 C. That's correct.

16 w. To your knowledge was that ever issued:

17 c. No not to my knowledge, what he did do is he Issued an

18 Interesting statement in which the hostages being held in Lebanon

19 should be considered by their takers as prisoners under Islamic

20 law.

21 w. Rather than as spies.

22 C. Yeah, or whatever they were saying.

23 w. Were you able to independently verify that occurred?

24 C. Yes, that was in a public speech, I suspect he cuts a

25 lot less ice among the Lebanese now since the money isn't flowing

26 as freely.

164

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979

UNCIASSIFIED

1
2

w. And when you say he you mean the Ayatollah?

C. Yeah, the Ayatollah. The Imam.

w. His Holiness.

C. He's Ayatollah 0 Usmah more correctly.

w. I gather you aren't consulted on the proposed speech,
is that fair to say?

C. I thinJc it's fair to say, yes.

w. In the meeting that occurred in Geneva which I believe
was in November 8 that is you and North, you're there for a
longer period of time than North and Secord^ is that correct?

C. I guess so, they were taJcen, North had to leave a day
early I think.

w. That's the way the notes read.

C. My plane left in the afternoon of the day I left,
whenever the hell it was. Hakim and I were left there.

w. Hakim too attended that meeting, is that correct?

C. He attended some of them, yes that's correct. Some of
them he didn't attend. I had a long meeting with^^^H in which
discussed intelligence thine

980

liNtUSSIflED

1 W. Let me show you I'm going to mark this as 18-A this is

2 dated November 3, 1986 it is directed to the Director of Central

3 Intelligence and it's attributed to Charles Allen and the subject

4 is the Frankfurt meetings. I asked Charles Allen about this, he

5 says he didn't write it, he says you did-would you take a look at

6 it7

7 C. Yep, I wrote this. And what happened is Is, no this is

8 the MteMM meetings.

9 w. It's headed Frankfurt meeting, but in fact it's a

10 rendition of the >*ift*hs meetings.

11 c. And, I'm trying to think of why it was handled this way*

12 there's a reason it was but I can't for the life of mo think of

13 why it was. The only thing I can think of, it... what he did as

14 you know from reading my memos they're all full of typos and

15 misspellings and . . .

16 w. Yes this is really an unusual memorandum in that

17 regard.

18 C. This is what happened here is that Charlie cleaned it

19 up and gave it to his secretary and said send this to the

20 Director. So she had automatically assumed it was from him so

21 that's how It got that way. That's why it's not recognizable as

22 mine immediately. I guess I could even deny I wrote it and
2 3 people would believe me.

24 w. Not anymore.

25 C. Okay.

26 w. The discussion on page 3 really or page 4 excuse me of

166

ilNMSSIFIEQ

981

this exhibit I8-A In the middle of the page there's a reference
to a discussion of the Phoenix Missiles, was there consideration
given to what kind of an Impact the^&esuooetatlen^the missiles
might have on the conduct of the war?

C. Yes and It was considered pretty marginal. The fact Is
that we were not prepared to send In a technician until this
thing got pretty far down the way. All the hostages would have
had to have been released. ,

w. But you didn't thlnJc that would happen If the
Shi'_;te
Valley SKtmk had their way.

C. I thought most of this stuff was window dressing anyway
I couldn't see all of the Sta*aW» releasing all of the people and
we weren't going to do most of this stuff unless that happened.
So I thought It was sort of whistling fi Dixie.

w. The memorandum contains a reference to th^ to four
people who are going to serve on the commission, the joint
commission, that's down on the bottom of the same page you ' re
looking at, page 4,

167

UHClASSiFlEO

982

iiNoussife

2
3
4
5

6
7
8
9
10
11
12
13
14
15
16
17
16
19
20
21
22
23
24
25
26

w. Now I've got to aslc you a question Mr. Cave. If you
survey this list then^^HH^^Haccocding to Albert Hakim is
present at the February meeting in Frankfurt which is a first
channel meeting.

C. I didn't know that.

w. I know you didn't know that. But^^^^^^^H again
shows up at first channel meeting in Tehran, is that correct?

C. That is correct.

w. H^^^^H^^ ^^® main contact point for Ghorbanifar in
Iran so and then these people all show up on the joint commission
proposed by the 'second chajinellrepresentative the Rev Gu4rd
Intelligence Office or by^^^^H|himself inntoMts. Now the
question occurs as you see the personalities as all being the
same that in dealing with the second channel aren't we really
dealing with the same political factions we were dealing with
through the first channel? And before I have you answer that let
me change the tape.

TAPE TWELVE - TWC/hgp

CONTINUATION OP EXAMINATION OF GEORGE CAVE BY MR. WOODCOCK:

168

983

UNCIASSIFIE

1 W. The question pending Is aren't we really dealing with

2 the same cast of characters even though we've switched from
Ghorbanlfar ^°^^KKKL,

4 C. I aslc<^ similar question and put It In a different way

5 to him when he brought these names up.

6 w. And to him Is. . .

7 c. ^^^^^^^1 Now you've got to remember that the, we were

8 always dealing with a faction of the Iranian government not the

9 Iranian government and the faction was the one controlled by

10 Rafsanjanl. Now, when you get Into some of these guys,

11 ^^^^^^^^1^3 Rafsanjanl's man and the man he sent over to tallc

12 to Bud McFarlane the second day. Now when you get Into some of

13 the, what about^^^^^^^| now you told us this was not a

14 supportable channel and he said Rafsanjanl's view of this Is that

15 we have to have members of each faction the three wings In the

16 government and the guy from the radical faction is going to be

17 ^^^^^^^Hbecause he's already been cut in so there's a security

18 consideration also. ^^^^^^^^^^H^s very conservative, a

19 great admirer of Khomeini incidentally, the president. But the
two other guys are both.^^^^^^^^^^^^^^^^Hare both very

21 strong supporters of Rafsanjani his men.

22 w. You don't identify H^^I^Hwlth Rafsanjani is that

23 correct?

24 C. No he's more, he's a conservative he told me that, you

25 know they said some things about Khomeini and then when we were

26 alone he said don't to all this he's a very good man, very

169

984

UNCUSSIFlEy

1 honest, listen to what he says not what people say about him.

2 w. Given that^^^^^^Hshows up in Frankfurt haven't they

3 really affected the joint agreement among the factions even as

4 early as February 1986? You've got^^^^^^H you've got

5 ^^^^^^^1

6 C. Yeah, according ^°^H^|^H when I questioned it was

7 always hi^^^^^Hjidea that everyone had to be involved in this

8 so that they couldn't come out and criticize it.
That pre-dates fl^Hj^^H involvement is that correct?
That's correct. He knew that we were in Tehran.
Rafsanjani did?

NO, flHH|B|did, he us that.
And the presence ^^III^IIJ^H ^^ ^^^ ^^^ negotiations

14 would indicate that Rafsanjani was aware and that tolerating this

15 at that stage, is that correct?

16 C. Yes, he was sent over by Rafsanjanl as his man to be in

17 the negotiations. Now one of the interesting things when we were

18 in Tehran is he and^^^^^^H had several long arguments about

19 how to proceed, we could listen to them, they would go out on

20 the court, out of the range of their listening devices and haggle

21 at one point they were accusing each other you know if this thing

22 doesn't succeed it's going to be your fault cause you didn't do
2 3 the right things. This is the way he explained it to me the

24 security considerations, to keep as few people involved as

25 possible and also they wanted to get everyone Involved and then

26 they swore them to secrecy, you know a representative of each of

170

icussi;e

985

IJNCUSSIF

1 the three wings.

2 w. Now, Mr. Cave just a few more questions here. Your

3 memorandum of the meetings In Geneva state5as I think you've

4 already testified that the Americans advised^^^^^^H,that the

5 United States had done all that was humanly possible by talking

6 directly to the Kuwaitis. Now what did you mean by that by

7 talking directly to the Kuwait»»s.

8 C. Well I was Just passing on, this was not just me

9 talking it was Ollie talking, we had the one whole day we talked

10 about how, they kept wanting us to do more he wanted us to give

11 him a guarantee .that if they sent someone to talk to the

12 KuwaitJes something would result from it.

13 w. And all you could say was that you would be warmly

14 received.

15 C. All we could say is th6 Kuwalt«es are going to be

16 willing to talk to you and you've got to take it from there kid.

17 w. Okay, but what when, your memorandum says you've done

18 all you can by talking directly to the Kuwait««s what direct

19 talking has been to the Kuwalt««s that you're aware of.

20 C. My understanding is that Admiral Poindexter had talked

21 to the Kuwaiti Foreign Minister. Now I never saw minutes to

22 that meeting or a memorandum of it so I don't know precisely what
2 3 took part.

24 w. Now North in his notebooks for this period refers to a

25 six step Kuwaiti plan, do you know what he's writing about

26 there?

171

n i?^ ^ :

986

umnssw

1 C. No I don't.

2 w. Now in this meeting that occurred In Geneva with

3 ^^^^^^^1 according, in North's notebooks of his meeting with

4 j^^^^^^^Hand this is not reflected in your notes which I haven't

5 put in front of you but I'll make that representation.

6 C. Maybe because I was translating.

7 w. I don't know what the reason would be but let me just

8 bring out the point here, ^^^^^^^ftook some time in as

9 reflected in North's notebooks describing or trying to describe a

10 distinction between the Islamic Jihad organization and Hi^^lah.

11 C. That's true.

12 w. The one being susceptible by the Influence by the

13 Iranians and the other, that is the Islamic Jihad being less

14 susceptible to influence by the Iranians. And then he has an

15 entry. North has an entry in his notebooks that appears to be a

16 really quite a wishywashy statement on^^^^^^^^Hpart saying

17 that if the, some of the Oa^a prisoners were released then

18 something may be possible, which Is about as indefinite as you

19 can get. Is that where the Iranians were at this point?

20 C. I had all along as you know concluded that we weren't

21 going to get many released and I remember the long talks we had

22 withH^^^^^I I think that the last guy we got out was the
2 3 last guy we were going to get out, Jacobsen and I think that's

24 reflected there as they just can't, the Hiy^bj^llah wasn't going to

25 release anymore people until they got some of their demands

26 satisfied. That's also reflected in what^^^^^^Hwas saying.

172

\\m m::M

987

However, I go Into some of the things, the differentiation
between Hisbullah and Islamic Jihad, which he's saying Islamic
Jihad Is not really an organization as the same sense as
Hiabj^llah in that something sort of, different people come
together for a specific purpose.

2. 0-

W. So you accepted his distinction between Hi^byillah and
the Islamic Jihad, is that correct?

C. Not necessarily.

w. where do you fall to endorse his description?

C. I don't think we know about, I think when they're going
to do something .that they don't want to necessarily be blamed for
it they call it Islamic Jihad.

w. Is
eyes at this point?
C. I think so

ust trying to throw some smoke in your

:rying to make the point in North's
notes that because these are different organizations and Islamic
Jihad Is really holding the hostages Iran is not going to have
that much Influence. But you don't accept their influence being

173

\XM\

988

UNCIASSIFIEO

1 or waning on that particular point.

2 C. I think that what he was trying to do is give an

3 explanation as to why they can't get anymore hostages released.

4 And ha was less than truthful.

5 w. Just for the record I'm going to identify the

6 memorandum I was referring to from the CIA as actually a National

7 Intelligence Council memorandum signed by Graham Fuller and, the

8 particular point that I was referring to was that until February

9 1985 some of the hostages including several Americans were held
io|
ll^^^^^^^^^^^HThe Islamic Jihad organization and the

12 revolutionary justice organization have claimed responsibility

13 for most of the abductions most names are used as covers by

14 Hi^^llah. Do you agree with that?

15 C. Yeah, I think so, I think that's pretty accurate.

16 w. Kow moving on to the last topic. In December of 19 86

17 you met with^^^^^|Hfor the last time.

18
19
20
21
22
23

C. That is correct.

w. That Is a meeting that was arranged by Albert Hakim.

C. Yeah we had to go thrj^Tiim to get tol

w. Did you try earlier to set up the meeting through

C. We did, we called, I called him and what^^^^Hsaid

24 was that he would be in contact with Albert.

25 W. So ultimately it was Hakim who set up the meeting.

26 C. Yes he set up the meeting.

174

wmwE

989

uEUSSife

1 w. Before the meeting began you ran into Hakim in the

2 hotel lobby and he informed you that he wasn't going to show up

3 unless his lawyer would show up as well, is that correct?

4 C. Well at first he said ask Dunbar if he wants me to

5 attend. I think I called Charlie and he said well I don't care

6 and so I got back to hint and he said if I'm going to attend I

7 want my lawyer there. So I called Charlie back and he says well

8 no lawyer. So Albert didn't attend any of the meetings.

9 w. The, uh, Dunbar wrote reports on these meetings that he

10 sent back to Washington that were then submitted to Secretary

11 Shultz by Arnie Rafael. You know Arnie Rafael don't you?

12 C. Yes, very well.

13 w. Did you know Charlie Dunbar before this meeting you had

14 in December?

15 C. No.

16 w. Before the meeting actually occurred there were ground

17 rules set forth for the negotiations which severely circumscribed

18 the ambit of the channel and Charles Allen wrote a memorandum in

19 fact...

20 C. Charles Allen and I wrote a memeo.

21 w. I thought that might be the case, that Charles Allen

22 wanted to make Director Casey aware of the extremely limited

23 character of the negotiating points.

24 C. We got the terms of reference on the morning I was

25 scheduled to leave to go to Frankfurt, Charlie and I. I took

26 one look at them and told Charlie that if, my understanding from

175

mmm

990

rDjI"^

il!«SlfilD

1 the NSPG meeting on the 24th November is the President wanted

2 this to, this channel to be kept open and if these terms of

3 reference Amir followed it was Just going to click everything

4 off. So what we did was we called, we saw Casey and Casey said

5 oJcay write me a memo on it and I will call Don Regan and I had to

6 leave. Now when, to go to Frankfurt. But the next morning,

7 Charlie and I were going, were translating the terms of

8 reference into Far^l when he got called and I called and I got

9 the change in Instructions in my channel and he got the same

10 thing in his. And then we use those. Now as it turns out

11 nothing came of. it but they were, it was an indication to the

12 United States, at least we left them that we were willing to keep

13 open the channel for discussions.

14 w. So the limited instructions were not conveyed to

15 ^^^^^^^B-s

16 C. No the revised ones were conveyed to him.

17 w. And your understanding, let me say your knowledge I

18 gather it would be Is that Charlie Dunbar received this expanded

19 instruction from his people as you received it from yours* is that

20 correct?

lOry

21 C. This was based on an lnstruct«d by Dr. Keel that the

22 State Department send, that identical instructions be sent out in

23 State channels and CIA channels.

24 w. That Is Alton Keel?

25 C. That is correct. Also the instructions were not as

26 Secretary Shultz testified to.

176

ONCLASS'IIEO

991

UNCLASSIFIED

1 W. Now If you'll take a moment and distinguish where you

2 and the Secretary part company on the ambit of the Instructions.

3 cm his testimony Secretary Shultz said that Casey had

4 gone behind his back to get the instruction changed so that arms

5 shipments can be continued. The paragraph in the instructions

6 regarding the arms shipments were not changed, they were

7 identical, there will be no additional arms shipments until there

8 is peace and normal relations between Iran and the United States.

9 w. Do you have any Idea where the Secretary got the

10 misconception that he testified to?

11 C. No, he must have been either poorly advised or that's

12 all I can come up with. Because I even have copies of things Z

13 was so upset when he made the statement, the original

14 instructions as are here and this is the paragraph on the arms

15 and the revised paragraph on the arms is here and it's virtually

16 the same.

17 w. Let me just take a moment and make a copy of that it

18 should be marked for the record. First Mr. Cave, you had pulled

19 out of your pocket 3 documents Z just want to Identify them for

20 the record. The first Z've marked as 19-A this is a terms of

21 reference memo from Charles Allen to the Director of CZA Z

22 believe that Is the memorandum that you had early testified you

23 and Charles Allen worked on to change the terms of reference. Is

24 that correct?

25 C. This Is a memo that we wrote regarding the terms of

26 reference that we received the morning of the same day, 12

177

UNCUSSIFIE

992

UNCUSSIHED

1 December which was sent over by the state Department which as far

2 as we could tell went against the President's explicit

3 instructions on keeping the channel, trying to Iceep the channel

4 open .

5 w. The first thing I'm referring to, 19-A, is the cover

6 memo you and Charlie Allen did, is that correct?

7 c. That's correct.

8 w. Now would identify 20-A for the record for me?

9 C. These are the terms of reference for the Cave-Dunbar

10 discussions with^^^^^^^Hwhich were sent over by the State

11 Department on the morning of 12 December.

12 w. And the paragraph that you had brought to my attention

13 earlier is the one you placed the brackets around? Is that

14 correct?

15 C. That's correct.

16 w. And you had compared before I went off and copied these

17 the bracketed paragraph in 20-A to the bracketed paragraph in 21-

18 A, first before you compare the two again, 21-A is the cable that

19 you received while you were abroad, is that correct?

20 C. Yes that is correct, note the time is the 13th of

21 December that is when I received that

22 W. And those were your negotiating instructions as
2 3 amended.

24 C. Those were the change in instructions.

25 W. And now for the record if you would compare the two

26 bracketed paragraphs.

178

UNCLASSIFIED

993

UNCLASSiHED

1 C. The original on exhibit 20-A, the original

2 Instructions on arms sales are as follows and I quote "while the

3 Reagan administration sees the utility of having a means of

4 conducting a dialogue with your government there will be no

5 further transfers of American military equipment to your

6 government while Iran refuses to negotiate and end the Iran/Iraq

7 war and while Iran continues to support terrorism." In exhibit

8 21-A which is the cable I received^H^^^HH^^the changed

9 InstructionSj the paragraph regarding arms supplies reads as

10 follows "the United States sees the utility of having means of

11 conducting a dialogue with you government' however, there will be

12 no further transfer of American military equipment to your

13 government while Iran refuses to negotiate em end to the

14 Iran/Iraq war and while Iran continues to support terrorism and

15 subversion."

16 w. And I gather that Charles Dunbar received Identical

17 instructions through his secure conmunlcation channels^ is that

18 correct?

19 C. That's correct. They came into the ConGen in

20 Frankfurt.

21 w. Before the meeting with^^^^^^Hl noted that he's

22 referred and you've been referring to him sometimes as^H^H
2 3 ^^^B What's the difference?

24 C. He was mistakenly at one point introduced as^^^^H

26 w. What's his real name?

179

UNCLASSIHED

S2-fi92 0-88-33

994

1 c.

2 w. So If you Jcnou^^^^you know the story. Before this

3 meeting occurred had you acquainted Dunbar and the State

4 Department what you understood the nine point plan to be?

5 C. No we had told the Department that we were prepared to

6 brief Dunbar anytime but we were never asked to.

7 w. So when the meeting got underway and^^^^^^^Bbr ought

8 up the nine point plan would that have been a surprise to Dunbar

9 do you think?

10 c. I did, he came over and I had Ixinch with him but we

11 didn't get into- a great lot of detail about what had transpired.

12 I didn't have that much time actually. Once I found out that he

13 didn't know about alot of things and didn't have much of a brief

14 I did my best to brief him on what had fully transpired.

15 w. There is in Dunbar's notes he recounts advising

16 ^^^^^^^Hofthe new position with respect to arms and he notes

17 thatHH^^mVs reaction was well that just brings us back to

18 zero. Do you recall that exchange?

19 C. Yes I do, because what^^^^^HHsald well you know,

20 insisted that you told us that the President had agreed to the

21 nine point plan are you going to go through with it or not? And

22 that's mhmn came up the hassle when the President said he never

23 heard of the nine point plan, so...

24 w. I'm going to finish one point on that and then ask you

25 another question and then I'll let you go. First one of our

26 associate counsel afld interviewed Dunbar and he said that one of

180

UNCLASSIFIED

995

UNCLASSIFIED

1 the things that Interested him about^^^^^H|that he was quite

2 unemotional about his response about the bad news that there were

3 going to be no more arms until there was a real dramatic change

4 in Iran's policies, would you share that observation, was he

5 quiet and unemotional when he declared when we were back to zero?

6 c. He's pretty, considering for an Iranian, he's fairly

7 unemotional but I think that the only part where his emotion

8 showed was when he asked about the nine point program. Are you

10 not? That's the only time I would say that he was really

11 emotional.

12 w. His response, I think £)unbar's notes reflect that

13 ^^^^^^^H to Id him you ought to go back to Washington to get
"^^^^^^" Does

14 briefed on this you obviously don't understand where we are. %

15 that comport with your recollection?

16 C. Oh possibly words to that effect. Pretty obvious that

17 poor Charlie, he had been given no brief whatsoever by the

18 Department as far as I could tell. In fact that's what he said to

19 me he told me he had a very narrow brief for this meeting.

20 w. And you had been unable to brief him, your Invitation

21 to brief him hadn't been taken up.

22 C. Th« only time I saw him before we left I said come on

23 over and have lunch and I talked a little bit in general terms.

24 w. There was I think a famous mini-flap that occurred

25 about this time and you were supposed to have overstayed and

26 spoken to ^^^^^^^ outside the company of the State Department

181

UNCLASSl

996

NClASSiFIED

1 rep, what's the story on that?

2 C. What happened was, after the meeting, which toolc place

3 in the afternoon. Charlie and I went out to diioner and he was

4 going to rush back the next morning which was Sunday and I said

5 okay but I'm going to stay over and I will come bade Monday

6 morning because I'll go down Sunday and see my grandchildren.

7 And then I spent the rest of that afternoon and that evening

8 trying, sort of briefing him trying to bring him up to snuff as

9 much as I could and he left. Now when I got back to the hotel

10 late Sunday night at 11:00 pn^^^^^^^Hxas sitting down in the

11 lobby, he must have been there for about 5 hours, and he said, he

12 gave me the phone number, he said call our friend, he's received

13 instructions from Tehran. So I called hint, cause he knew he

14 wasn't supposed to see me, so he said, I've just, I've already

15 received an answer from Tehran and I'd like to see Ambassador

16 Dunbar as soon as possible and I said well gee he's already left,

17 he left this morning. And he said well I've just got this brief

18 message to pass on could I bring it over to you first thing

19 tomorrow morning. And I said well okay, he said it's important.

20 So he came over to the, he was only there about IS minutes, he

21 read It off and I wrote it down and I immediately^^^^^^^^^H

22 ^^^^^^^^1 s«nt it exactly as he said it to me and told them to

23 deliver It to the State Department. And that's the last I saw of

24 ^^^^M^l

25 w. It wasn't the last you heard of that encounter I gather.

26 C. I suppose you're not supposed to use Initiative.

182

UNCLASSIFIED

997

UNCUSSIflED

1 w. Par be It from me to counsel you at this point Mr.

2 Cave.

3 w. One more question on the nine point plan, I think North

4 and Polndeter both testified that the nine point plan in some

5 version perhaps in the prof note version that we earlier

6 identified as the October 10 prof note was brought to President

7 Reagan's attention and President Reagan approved it. Did anyone

8 tell you contemporaneously and this would October 1986 or

9 thereafter that the plan had been brought to President Reagan's

10 attention and that he had approved it?

11 C. Yes. Col. North told me,

12 w. Do you recall when?

13 C. After I got baclc from Frankfurt, cause I called, I

14 called Ollie right after I got back and I recall specifically I

15 don't know if it was in a meeting or whether it was on the phone

16 but he told me that the President had approved it.

17 w. And did he tell whether he had sought the approval or

18 Poindexter had gotten the approval or how it had been given?

19 C. He didn't say how it had been given, he just said that

20 he had seen the nine point plan and he had approved it.

21 w. I have to ask you Mr. Cave, this nine point plan that

22 he says th* President approved, is that what was presented in the
2 3 prof note of October 10?

24 C. What's represented In the prof note to the best of my

25 knowledge, yes.

26 w. Which in the prof note has seven points in it, but that

183

iiN(;ij.<;.<;iFiFfl

998

UNCLASSIFIE

1 would be referred to as the nine point plan?

2 C. That's correct.

3 W. Let me thank you for letting me put you in one more

4 long day since I'm going back to Maine which means you've

5 probably seen the last of me which means you've probably seen the

6 last of a long day like this in front of our committees. ThanJt

7 you again. Thank you Mr. Pearline, thank you Mr. Moffett as well.

ONCUSSIFIE

184

999

/; •

UNCLASSIFIED

/v^

Partially □eciass.l.ed.Rei-Jsed en )jF£gfe£

under proniions oi C 0 M:V\

by K Jotiiistm National Secjriiy ■.'.unci!

-T>^ gE€R£T SewSITiVS^

This is a
Kay 28, to^e
headed by

\f^i the U.S. ailstion to Tehran froa Nay 2S through
th •Q»e comments and observations. The 0.6. teas t^ae
Goode. Mcgrath, Killer and O'neil Making up the
inlcator also accoapanied the team on the trip

rest of thi

into Tehftl

The tiwr^rrived in Tehran at 0630 hours on 2S May and was left to
cool its'^llective heels for about two hours. During this period the
Iranian kif*^force put^pi^ j^ show in which one by one a squadron of P-4'3
took off 'fro^^lehrab^O air port. The planes carried no ordanance and
according ^O^J* Heh^iibad base commander they were flying training
missions. Xccording to Gorba, the Iranians recently recleved a
shipment of P-4 spare parts and the flights were training flights to
bring some of their pilots up to snuff. The first Iranian off^icial to
show up who was connected with this operation was HBWBBmBt^who was
already known to the air crew. The base Comma nder^^^B^BB^HJi also
put in an appearance and made pleasant conversation. He was also their
at our departure. It is unclear how much he was cut in'on he operation.
Gorba showed up about half an hour after our arrival. He said that we
had arrived an hour early and this was the reason there was no one at
the airport to recieve us. We were later told that the recieving party
had gone to the miliary side of the base expecting us to park our plane
there. Gorba told us that for security reasons we were being given the
entire top floor of thCoH^^r^Jotel , now rename<3 the

I stiqla 1 ( indeper,dence) .-i BBBU^f inally arrived and after sone small
talk we depa.'-ted for the ^^^^^wr.i le still at the airport, Gorba
inforired us that everything was going well and the Iranians had already
dispatched a representative to secure the release of the hostages.

wy.ile on the plane Mcfarl^nd, Goode and O'neil rehearsed a discussion
of the briefs which we would run through m the hotel for the benefit of
Iranian coverage of the American delegation. In short the play acting
was designed to give the brief good sourcing. We expressed our concern
out loud that the Iranians would not believe the Soviet invasion plan.
We worried hat we could not indicate the real source of the information
due to said source'; sensitivity. The sensitive source, dubbed
"Vladimir" by Goode was described as a Major General who had taken part
m two of the war games on the invasion of Iran. O'neil subsequently
gave ^^^m a brief glance at the briefing book to whet his appetite and
give them something to which they could tie their audio
of the three briefs were given. /^

The first substantive meeting too)^^lace late in the'
May. The Iranianside consisted of (flnPH*' ■ named

Gorba described as being in their intelligence service,
meeting was hostile with the Iranians listing past sins of Ihe United
States etc. The meeting ended with what appeared to be little chance of
any progress. ' Basically the American side insisted on adherence^, to the
agreement as we understood it, and the Iranians infsisting th^t JSLmerica
must do more to atone for its sins. At the end or) the Meeting,- -
^H^HBB set the tone by saying that even if no progress is made during
the discussions, we were their guests and Iranians honored quests.
The first crisis occurred later in the evening when the Iranians

age. None
oon of 2#C

whom
itial

^7-r/v 'V^V

UNCllSSIf "tD @)

1000

UMCLRSS'J'iD

insisted on removing th* en* cr*w Member who was stsyinf on the plsne.
They insisted thst we hsd agreed to this at the earlier swetinQ.
Mcfarland's response to this was thatjwe pack up and leave. O'neil
consulted wiUu^yjMmg aan AHIBHil who stayed in the hotel with us
during the yfflZ^ySrhlii been intrduced to us as the one person to
contact to yplyt " any^ !P:i?l^*»» whicti night cose up. 4Bllpi was very
upset tha^^MJ^onsult^Wfc^M^^B about the plane and referred to it as
• breach jQHicuity offWfpaft. Be insisted that their priaary concern
was our afjUnity and this was adduced as the reason we were to stay
couped u^jSfjfthe ISth floor of the hotel. Ne succeeded in getting a
crew nem^tvSack on the plane the following day. It was clear that the
Iranians mi^wanted J@narch the plane. The search seemed to satisfy
them and %t^ mQ^9 sw^ra^ent problems on this issue. VBPM was also
very upset tni^jfC had '^Dur own conununications (this was reason we gave
for having a'«an~on the plane at all times). He argued that Iranian
intelligence would pick up the signals and this could jeopardize the
security of whole opeation. He said that they would put what ever we
wished at our disposal including a dedicated telex. We insisted on our
own, commo and he gradually backed off. The hostile attitude of the
Iranians on the first day left us a little uneasy.

On Monday we were left to our own devices throughout most of the day.
We finality had another meeting lat^^^^^i^^^ternoon. At

anothpr Iranian wa«r in'-rnHiirpH ac i^^HlBK He

At tnis meeting, ^cFar land outlined the reasons we
were in Tehran. We wished to lay tlie groundwork for a new political ar.c
strategic relationship between our two courtries. We considered the
arrs supplies as ar example of our good faith ar.tf we insistedo^^^e
release of the hostages as an example of their good faith. fl^HUJ^ade
the appropriate noises and said that Iran was prepared to have normal
relations with every country, except two, Israel ans South Africa.
HcFarland outlined our concerans about soviet designs on Iran and told
the Iranians that we woud provide them with a briefing which would
detail our reasons for concern. He also spoke of Sadatr Hussayn's
December visit to Moscow in which the Soviets promised Sada^^^t they
would do everything to prevent Iraq frorr Lcsinc the war .^^^|^^. r ied
some of the usual Iranian bravado by claiming that if th^so^ets
attacked, the Iranian soldiers would do well against them because of
their devotion to shoheda. T^^^^as followed by a load of shit on
sh^e^^^^r the Iranian side ^^HBr concen^^ted on the Hostage issue
'""^^^^^^K on the arms transac^^ns . ^^^^K said that they had

cen^^^e
wh^sai

Bicpenses

^Ifin would

alreaoy heard from their man in Lebanon who said that

the hostages had insisted on several conditions as foil

withdrawal from the Golan heights (2) Israeli withdrawi

lebanon (3) Removal of Lahad to East Beirut (4) freeii

imprisoned Shi'ites in Kuw^^^ajd (5) re-imbursement/;j^

of holding the hostages^^^^Bj^pgraciously volunteered^^

pay these expenses .bj^Bj^^^^gued that we were not upho.ld'ing our part

of the deal because w^ha^promised to bring half the parts^ with us (no

such promise wa made) . He did not repeat his Sunday claili^hat the

parts we brought were used. He insisted tht we bring the rest of the

parts before the release of the hostages. We stuck to the terns of the

agreement. When things seemed to come unstuck, McTarland got up and

said that we would leave if they couldn't uphold their end of the

ONClASSIfc'ED

1001

ijhclass!f:ed

w«> that the

By thl
the prlnc
the Iran
staff

thea. HI
risk of
•eetlng
Based on,
was T\px.

his blessii

American official . We
the Bazergan governent.

bar^in. This upset ^H^PWho said that NcFarland was very fira an^
stern(ton4-ro) and thayas Iranians liked to negotiate in a aore
gentle (nara) ataosphere. Mhat was encouraging about aonday's aeetings
were far acre friendly than on Sunday.

ar that McParland was not going to aeet any of
en aentioned by Corba. NcParland then told
Id continue negotiations with the Aaerican
back t^VfiPwhen some kind of agreenent was reached.

issue of the problems our presence in Tehran caused
ted'that a senior official could not afford the political

arland. He pointed out that it was Barergan's
at brought down the Bazergan governaent.
't we can take it as a certainty that Khomieni
esence or our mission. He would have to give
senior official would dare to meet wih a senior
ran into the same problem in our diBcjjssj_on£ with
Gorba also let drop that(JmH|^HHHiB °"^
of the senior personages that he had supposedly ar^nged for us to meet
was also not aware of our presence.

Tuesday was a day of marathon negotiations with the Iranians stalling
for time and trying to get the most out of the American delegation. The
American delegation stuck by the terms of the original agreement and
insisted that after the terms of tJ^.^Frankf urt agreement were met, we
would meet and discuss in detail their needs and the outline of our twc
countries' future relations. The American delegation proposed a
specific timing for a subsequent meeting. During the late afternoon it
was agreed that the American tear would draw up an agreement which would
be discussed later in the eveninc. To save time O'neil begar. working on
a translation which was later completed by he and Gcrba.

During tuesday's negotiations, %1 1 the demands of the hostages
holders evaporated except foV the demand for the release of the Shi'ite
prisoners in Kuwait. Goode handled this part of the negotiations by
firmly stating that the United States would not interfere in the
internal affairs of Kuwait, particularly m an instance where Kuwaiti
due legal pocess had been carried out. We would however seek to better
the condition of Shia prisoners through the good offices of
international organizations such as the Red Cross and the Red Crescent.
Goode warned that as far as the well being of the Shi'ite prisoners in
Kuwait is concerned, there had better not be any more terrorist activity
directed at the Royal family in Kuwait.

The draft agreement was the subject of intense negotiations with the
Iranians making some counter proposals which were desi
more time. Talks broke off around midnight with the I
saying it wanted to caucus. For the nexi;^j^h^^,
were held within the Iranian delegation. ^1^^^^ a
that the other would be responsible if nothing come
negotiations. Finally, shortly before two on Wedne
asked to see McFarland. He wanted assurances tha
remaining spare parts two hours after the hostage
would stay after the arrival of the spare parts t
Iranian needs. He also aske^^^r more time to ge^
hostages. McFarland gave^HUP unti 1 0630 wedn^;
for the release of the ho^Kge^ The American del
grab a couple of hours sleep knowing that we had at least out-frazzled

iver
yeleaied , and
8">dditional

f ^^^
morning to arrange

ation retired to

UNCLASSIFIED

/?/.

1002

^ Wednesday •or"<'»« «"
rused to Mke

othTr than .aU-l-Zlic «*ct th.t Corb. did not

• irport -f*^" '^^•^{"^i;* t". had been worrl.o.e for
he plane va. beng.x^ueled. jni. .,.» r«eleved a

lad stalled on refueling th^iane^^^^r^^M^^g^M
|AfihinatA^^lngther^'as^^^^^^^^^^^^H|P^mm

HHHH^HI^BRi^^ffiK^^^^te^h^totel at about
Pm II* ' ' ' to the Airport.

^^T^BHpf^gppIr accompanied the J^>*| j ^.^^ „ith Mcfarland.

^jjpj;^— JJ^^n •PP"'*'^" "^itth McFarland. He asKed for more

l!^?fnesideM|Pli«'^«5 '^.^frelease Cas a very delicate and time
time saying th'STaTTTTging for the release a ^.^^ ^^^ ^p^^^ p^ 3

consuming effort. McFarland told h^/'^^^^^^ ^f the hostages was heard
was in the air. but if no word on ^;%^^^"J^^° to its base. O'neil was
by 0930. the plane would turn "°""\J2_llne before take-off and he and

lane before take-off and he and
ladmitted that the hostages
,d him to get them under Iranian
seek to do this and that he
ontact with us. Our aircraft

thP lacjt Hi the delegation to be

■^■([iPhad one last exchange.--^

?^^^iov, undfiJ^^^ r control. O

control .HBHB^ said that the3_

would send Gorba to Europe to ""^^"^^^

departed at 0900. ol^ne recollection of what transpired

The above account is 0 ^^eil s odUxne ^e ^^ ^^ ^^^^^. ^^^

and may differ somewhat from what 9^J"^ '^'3ir.;e.
O'neil's comments and recomendation to make sense.

COKV.ENTS; ---

,. H Gorba does appear, we -St press hi^ '^1^^^^^^
xdentification of the people -^l\r^^°lZUllTone eteninTr
actually forget his alias during the course^or^ ^^^.^^ aliases,
discussions, we can assume that^the^otne^^jj^^ ^^^H^^ ^^^ ^^^ ^^ ^
particolarl
tru

Lt may

He 1! _
explain why

jve not been

such a P«rson^H^^^^^^^BB^"™Jf' . Iranian side

•i i* ic Quite possible tnat x.ne iioi'*"
under the' ii'prels^rth^t we were only ij-^stea n
hostages. This would explain why they tried so n
more in exchange for the Postages, i.e. .the ^
18 additional hipar radars. U was ^^«";° ^^^^
translation of the <i"^i/,^/^;r,rissuid a stJrn w
something to <fhew on. ^^^^^^^^°tl^l^^ that don
getting fed up with overatures fro^ ^nd strftegi
interested in a long term P°^^*^^"i,^"^,^ " mW
Iran does not pick up on this opportunity it majj

is another one. f.rtor in how-

S.Ramadan was certainly a factor in

an
to identify

gotiating

for the
to do
and the
ave a

went .

^'NCL4SSIF}£D

/7//^/ />//.c/

1003

tLU

/,f to 'thc^roblcB caused by/K>t b«in^ ablt to ••• %^^B^^^^^^^^

the

• p«opl« wc wer^/ncflollA^A9 vlth wtrt •
The fact th«nH|H|B breath could
p •Ithtr. On the poffFTvealde waa the change In the attitude of
Iranian deUaation. By tuetday they were begging a* to atay.

4. Mft^flBteve the problea of a dlahoneat interlocutor. The

ar that they were upaet with Gorba. On tueaday,

ne of the problena in our negotiationa was the

Tact tha^^Kr to d^^Aeting, Gorba gave each aide a different picture
of the iJ^Kure of th^eal. O'neil Mde the point tof^mLhat the
letters^^Hrecieved were froa Gorba. not the O.S. governaent. Me will
have to ^HB heavily on Gorba in ±h^^utiirc,^^S

ba and iBHH^^*"<3 ^** ■*''• • *®^ *' aoney

out of tin^^al, th^^VetuMbly will work hard to bring it off. Gorba
hat very ^^^^^^^^RV for seeing that the deal goes through. The
serious DraH^HHWBTaddress is whether the Ira^nians can gain control

the hoEtafiH^flHBHilHI^HH^I^^I^^tf' ^^^^ °^^

real problem. The Iranians side may be most willing, but unable to gain
control .

RECOMENDATION

Through hindsight it would have been better for Goode and O'neil to

have gone In first to handle the i
have subjected a senior U.S. offic
to endure. We have made the point
agreement must be finally negotiat
frofr both sides. If we have a sub
it is strongly recorr.ended tho*. Goo
side somewhere in Europe to contin

TOP SCTRi!^ IiLlJJTTI ¥C

negotiations. We should not

the indignities he was forced
e Iranians that the draft
senior responsible officials
t response from the Iranian side

O'neil meet with the Iranian

negotiations .

«NCUSSIFIE0

d/Z/i/ o/^</

1004

UNCLASSIFIED

C//a/ /^^

'7oV\U

fell"^

UHCUSSmiB

1005

mMm

NEETIMG MITH ^HHIB^BPJOLY

l.Alnitially described hi* sources. Ic stated that he reads all
Iranian newspapers that he can get bis bands on and also listens to
radio bro^M|^« Be also talks to exiles, sees a lot of Iranians who
travel bai^^Hi forth to Iran, •aintains sporadic contact with foraer
colleagua^PK ro»ain in Iran, but perhaps Bis Bost iaportant source
of inforaation are the representatives of iaportant Iranians who
travel abroad on business. The s»st iaportant of these is the Ban who

handles ^.^.m—^m^—

fcan not return to Iran.

2. Like all Iranians, ^pgroups Iranians into pat divisions. Re
says that Rafsenjani heads one group, Khameni'i another and a third
group known as the third line is headed by seyyed Mehdi ^^)^ni . This
is the real radical group which supports terrorism, etc.^^^aid that
there are two other groups worth men^gning, Bazergan's people and
another group (ask about this one), '^■says that Montazari is doTiinated
bv Rafsenjani and once Khomeini die^will be Rafsenjani 's point ff.an.

^Tsaid tat Rafsenjani and Khameni'i are both brilliant wen and will
cooperate after Khomeini's death. Rafsenjani now effectively controls
the Sepah-i-Pasdar through Mohsen Reza'i. Khameni'i has been
resisting th«r r-ove to incorporate the military into the Pasdars.
t-

3. Sarr and Abe told^^that there was an interest on the part -of the
USG in trying to use trade to gradually re-establish relations with
Iran. Sam and Abe planned to capitalize on the trade part using
contacts in the USG with whom they will coordinate their actions.
This of course requires ^^olitical decision at the highest leve". of
the Iranian government. ^P¥aid that he is certain th«t the vast
majority of senior Iranians want" to re-establish some degree of
political re^^^ns with USG with the single exception of the third
line pople. ^said that the current problem is that Xhomieni would
opp<^^,^nd such action as long as he lives. Groundwork can be done

id that the man to establish contact with is Rafgsenjani.

that he can explore establishing this
with ilflffSIBtiS through ^m

3»^9S*sted that

at some time we consider sending in a non-American t& do some
contacting after ground work has been done.

Parl.aJy Ucc:;v..';eaT,eis.,:.;s r-, \\\'C & fc^
unoer prcnoior; a. FT; ',, ■/_
by K Jotinson Njliona' Sk'.^ .> Cc-ncil

5115

nzTAL^M^

1006

UNCUSSinED

MEETING NITHI^^^H^HVaNDS ALBERT BAKIM ON 11 JOLY 1986

1 .TM« ■€t.tlnq uncovred tojit^infreitlng «cc«»» S§j> first «tk«d

iaia that he had cleaned up hit report • copy of which he
pasted to aam. Re said that If we had further questions he had the
ability to get the answers. Sam said he would take • look at the
report and get back to him.

G>
^ 2. flpsaid that their were two channels into Basemi Raf senjfitLs-
sroTOsedtodiscusswith us the best of these two channels.

3. BakiDi spent a lot of tine explaining to ^P that he wanted to
get some legitimate business with Iran for Cover purposes. Be was
willing to sell Medicinals at cost or on a credit basic wi^^p to a
year to pay if he could get some other benifit out of It. ^^^-
suggested oil sales to the OS which he was in a position to arrange
for fob $8.20 a barrel. San suggested rice since the OSG was
subsidizing the export of rice at prices far below the going world
quotes. There was a question as_ to whether Oil wa anbargoed. During
the course of the meeting, ^P said quite frankly that he wasn't goinc
to do this for nothing and Hakim told him that if anything goes
through he would get a good comini6Eio^^f.Hakia told Saa that he
planned to pursue these matters with ^p no matter what we decided. I
has also set up a private polygraph for -^p on Monday.

Ps'tisiiy Oeciassified/ftelessed (ji jX

binder proviiion.i i)t E C l.^i',S

"V K Johii-,0.;, hdlor;: ;.■• ■ ..-." '^-

CJJiy^ ^/7o

:£3£fi

ONCLASSIHED

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CTCttTMIRC STAYJ OH TRACC. _ _

« .MMTCtA TO KHJM NHO «OUL> tC COINC TO TCHRAN. TOL> Nin HACrAKLANt,

■•» SM> _*H> o'HCXi.. PLUS A conno xpccialxst. nc tmoucht that houl> tc

PX«. _ _ . . . _

1. DC TOL) HXn THAT «t >II NOT MANT TO CO XHTO KTAILS AX THIS HAS COOt'X
SHON «N> NC HOULI CIPLAIN tVCRYTHINC THIS ArCRTNOON. HC >I> SAY THAT
C00> HA> >RAHN UP A tCHCHCULC THAT HC « HOPO HOULI HC ACCCPTABLC TO
T« OTHCR 5I»C. HC tnPHASIXC* TO HW THAT IIF THIS THIHC IS TO HORr
HC nUST PLAY A rCY HHICH HC HILL tXPLAIM TO Hid IN GRCAT SCTAIL THIS
AFTCRNOOH. HC SCCnC* PLCA$C» HITH ALL THIS. MC HAS COINC TO CALL
TCHRAN XnnOIATLY AFTCR HC LCFT TO CXPLAIN THAT HC HCRE LIHING UP ALL THE
»UCtS.

«. HC SPCNT sonc Tinc tcllxnc us that hc nusT hcntion nothinc about

ISRACL in our nCCTINCS «S THIS COULI RUCCR THINCS. HC SAII nAYBC HC
COULI nCNnON on LCAVIK hut THCY COULI RCLY on ^^ on this case. tHONtCR
HON nuCH THIS IS COINC T« COST THC ISRACLIS>.
S. HC ALSO SAII THAT MNILC IN TCRRAN HC HAI TALKCI TO THE CONSERVATIVE

LCAICRS LINC 'flHU^I^^I^^^I^mH^Bi^^V
flH^HPIHHI^^^^^HHHJ^^foir FARAZI ACCORtINC TO OUR
RCCORIS>> aV SAII THAT NT HAI ARCUCI HITH THCH THAT THIS HAS i CREAT
OPPORTUNITY. THCY ARC COINC TO CCT INTO POHCR AFTCR KHOniCNI COCS^ SO
LCTSOIICONC CLSC flACC' THC'OPCNINC TO THC AHCRICANS.

b. ^^pk <LSO BRiCFCl'CCRTAIN IIILITARY LCAICRS ON THIS PROJECT TO CCT THEIR
SUPPROT. «CILC$S TO SAT THCY HCRC CNTHUSIASTIC.

7 .'ASKCI^Ik rOLLOMINC^ CIVICN A SUCCCSSFULL HCCTZHC^ HHO HILL HANILE THE
FOLLOW UP'ON'THE'IRANIAN SliCf'THiS CAUCHT Hin~*T''SUMXSC AN! HE SAII THT
HE tnOUCHT XT HOULl HAVC TO INVOLVC lOTH RAFSCIMMD PRMI LINE THREE ANt
sonc PCOPLC FROn'LINC OftC. HC SAti CtVCN THlt MT tHOOMt XT CSSENTIAL
THA^ THC CROUP ALSO HCCT HITH PCOPLC FROtl LIV MC HHICK HC COULI ARRANGE.
AS AN ASIICHC tAIt THAT HuSAVI IS BlC PROBLb» t» Tl^T Ml RCiLLY lOCSN'T L
LICtt YOU iuYS.

REVIEWED FOR REl£AS£
Date ^ occf^ ^

1008

V K ^ i WCUSSfflEO

M- i

^. Mz T«iJPfntiuT yrMAtjic* to Str,

iTRAICHTEH OUT THE KmCULTIY OVER

Whe »tRtCT Phone CAULS TO MHM "tol» hxr that the call mas

iNSYlCAttl BY I^M^ 'AN» NOT US AN» IN OUR REPLY HE TOL» 4
«C kbASXKR THt »UL~t'0 Bt AS ENUNCIATES iN FRANKFURT. *^§P

THAT
SAIJ THAT
TO CALL US XN9PEN9ENTLY TO

PRO^Ltn S«LVC> AS XT WAS HE MHO TOLB

CHECK ON Hin'AN»~h2$ HONESTY VIA ANOTHtR CHANNEL. THUS EN»E» THIS

CONVERSATION. ':"■■■ - - - " :-■.-.'-■.- J .-■ -' I -• •

10 ^HERE -WAS SOnEThlNC' IN HIS CONVERATION WHICH LC» US TO BELIEVE HE

IN»kCATE» TWO TRIPS TO TEHRAN. ' • • . • r - ' -

11.- WE HAB TO'.LISTEN TO AT LEAST A HALF AN HOUR OF TALK On'hOW CAREFULL

WE nuST BE IN KALING WITH THESECtlTS AN» HOW WE' NEESEB SUCH a' PERSON AS

Hlh'TO eui»E' THE WAY HE KNEW HOW TO. HANDLE' THE H.

W. HE ALSO PROPOSE* THaVw'E USE' PRiflTS FROn THESE SEALS Ti ANB OTHERS

TO tFUNSjU^^^^^^^^^^^^^^^^^^^B WE COULV SO THE SAHE WITH

NICARAUiSRA.

-.h.^-.'-

_.«i

c:ir/y "^^^sl ,, jPam^A' ^/jl.

1009

f VtAUfilSI

noi:

SUBJECT:

Fabricator NMlea en
Muixhchr GDRBAraFAR

1. Ihis notica has been dis»flMinated to the Departaent of State,
the Defense Intelli|ence Agenqr, the Federal Bureau of Investigation and
the U.S. Secret Service.

a.jimwill have it classified to FilH|||^| (Paper MUls mA
Fabricators) anflLoded to the Subject 's^Hfile.

Attadaent as Stated

0*— J.C

til

^.^**^'

3^0

REVIEWED FOR RELEASE

Daft 1 i i^tf aa?

<^//MCiS^//

1010

M«»tUt vitk t Sorl

iJVaASSIFIED

REVIEWEO FOR RELEASE
Dale 1 ^ JftN ^^^

w*r«

-«i TMort vliicli list«a all Ut «f

A^Ilt^Jrt U^^ KllSt;* U%. iir! S.t k. fot^^.rjrtklM.Tifl't.^l
Ii« taa tkat It •l»o wrott • f Ivt P»l» »«portlB
•or* 4«talU«. «k»»« •«• tuppoitltj to Jwj^k

._ •&! llsk vhick vat

;A~;r4ik ft^ Bkrtt litt. Coodt ■ t©ld gortt thtt »11 kt got WM tkt I . I
JirTi^lIt 'Srbt tlU^t fct WTOtt St Ttportt en tht plant frw 1|j
ptrtt ^^•\ f!u! thx »MJTtt to adaa in london who atld tkat k* wouldm
!J3'S« S S'^iTKnt K Jt"alJ U; eoaclutloa. altktr tkt |a|
«i.j5n, do~f .S;?! irihlhc €.;• Jtybe adt. and gorb. •r.jUni^JZ (

therefore he »hort»topped the reports. ^*r,, „. Vritith

2 One of Corbe't mo%\ Interesting offers «* to offer ««» *^»*>"^^^.,

th4

said th.t a aeetlng on Ush woull'Sittace irett logistictl.

_^ we
TC-exaaine

iit^aS r.rdiri.K:"^ir!; J5 s^an^vjrje with „, for C0..0.

• gerha »aid that would be no problea^^ also laid that we would

problably want to arrive In bandar 'SBb»5. *" »«,^a»S:.l^;,
insists that adaa told hi. that we would be "'J^f (IPipj^iJ^'iJ-
we told hia that this gave us aoae heartburn, but noT to "orry, »«
would take care of the docuaentation if even if it aeant being white
It^rilSs! JSrba .aS that he will «ed.o.e details on the plane
?;!l^.u»b;r*Te|istration ate. we told >>^'/^*;V^i tL^e^aii *
ble to tkexax to as. we will devise way of getting axa tne tail
aiaber.

4 we discussed the achedule In tone detail, we »ropeaad •"lvln«
abou?*7.rdty.Tfter >i>. »»ney i. deoosilad .J^'i* •STiS^SaSMwUd
to kave the planed load Bl ipares positioned in aurop*. •• J**"."*'!?*"
for fcoSrriblut what was included 1«d what would {« "•gjl^ ^SlS*^'"
we ttuck to our position that once the release takes »{•" 2 '^'^J"
order plane to launch and it ahould arrive In banda^ .Jj^^tH^I-
hours, it would then turn around and hring in tliejr«^^^gaparcs.
^%t ar"e tentavilye coaaitted to dleiver the 5,000 jS^ff^^f"^^..
^ 10 days later, gorba pressed *'^-' B*" ' f j^'jPCT lij ilMair
^ we taid were no longer In inventoory. v^t T*°*M^-^'^^"*^**^*'**^~*lI i.-..i"

^ that we wouldn't although a aaall ttaplt is an option. y^

^ 5. they agenda for the discussion with the other 'if* *«^ «5?^""*

^include fyyi«^/;t^-J::*; «i.i^;/SiU KTiil roni;iJM'|r2?co.p.ny

1011

X' inclaSsired

key vol* 1b Bakiat/ft all verk. after leaf iMffliaf , kt afr*»a to yrtitn,
tlia aclitdul* to if as ovtllatd 1^ w. «• kava get take a fraseat, la
ftddltioa to koraa»» it Blfbt kt a good idaa to tati all Vu.%
•para partt^g^^t valt vitk vs. and prasaat tliia as a prasaat. v*

told gorb^^^^Rir vith tkaa about tb* availabldlitr of fiiactiOBiat
tost and i^PH^MUAuipatat aad tba tacbaical abtll tolasa

OQUlPJ*^^^^^^^^^^^^^^^^^^^^^^^^^^^

^•T^fosslbl^b^astladlcatloa tbat «a Bitbt ba iftl
aoaewbaro Is tbat towards tbt ond, gorba btgaa aiscusslai bis cut.
good* told bis tbat b* could add on wbatavar ba tbinb» iribt for bis
cut to tb* final prico. ba said that ba bad spent S00,000 dollars
alread/ to grease tbe akids etc. be also discussed bis acheae to use
t be profits to aupport ffhan rebels , etc. it would appear that
be BOW feels tbat the deal is entering its final atages.

7. gorba stated that there is considerable pressure on the iranians
to do soDcthing because the tine frane within wnich they can deliver out
friends, they feel that fighting is going to break out between the
hizbullah and the Syrian amy at any tine, groba insists that Iranian
Syrian relations are ytty bad at the Bonent and will definitely get worse.
he claiBs that iran has stopped delivering oil to syria. believe he
aid that deliveries stopped about S^-'days ago. i

t. gorba clains that the irania^r^side is devoting considerable
tine to this, the whole thing i»vb^ng nasteraiinded by rafsenjani behind
the scenes, if the transaction goei| the plan is to have khonieni
issue a fatwa against the taking OjaTiostages. they also have a_large_nuabe(
of people they us to brief. MM^^HHriM^HH^^^H^^H^HHI

)0Ut

prineninister wno aay be our prxaarp senior contact, he said that he and
line ■ be represents do not like oT'trust us and we nust be aware of this
at all tines, he thought there vaTri chance that rafsenjani would at
sone point put in an appearance, as he will be following everything close
he on bis own part will want us to neet with reps from the conservative
line, particularly farisi.

9. it is still appraent that thev have not given nuch thought to
bow a continuing relationship will be naintained. lorba tried to answer
bis but be was not able to cover up the basic truth that they hadn't
gone that far yet.

UNCLASSIFIED

1012

s (/NCLASS:.%D

/^c )9eJ*x

0*acll ca>tf 4 B^Pli^ M )S Junt tt 1«S0 bTtlit^MtfraeM. 0*a*il

CMvcrtttioB ky MTlHf thstvOTa^ ktard irSaxttir fritnd that
vaqital'to talk to lua . IIHBB Mid that tkia wah^ot true,
fU^^^ad btaa praaalnt hfl to |o -throuth with ^h&jeal.
0*B*lk^^^HpcH what vc should do about tht tituatiea.
raplicd t^BHPW4il9t know why ve didai't coaplatt the deal wKanTin
dubai. OPtil •ttffn«.ted to atatt that he had • au||estdoB. Vc ahould
firat ■oaf in Curo^'^tO aakekaurc there vcre so •iaunderataBdingt as
happened before. > Then our forup vould go to Dubai at an afreed upon
date. Upon ariral in Dubai the four boxes vould be turned over, then
the roat of the spares vould arrive and later dependeing en tiaeing
the tve n Outies vmld arive. Ve vould stay until averything vss

said that the aeeting vux in Ceraany vas not necces
and that dear vas onacceptable to then. He proposed that ve arrive
vith the Taaaialag 240 spares, then two -hostages vould be truned over,
vhen the two radars arrive, the two other hostages vould be turned over.

Ve haggled abit O'neil insisting on our deal and he insisteing
on.J>is. O'neil suggested that aeeting in Geraany was necccssary and
^BP^PM finally agreed that if really neccessary he' would cone. He
parrried the request thattb»-;^|iMi[tiiflliMftfiP' also attend. He
added that it wouJ.d.-be-"^?rir difficult to get away at th

Vhen di.s««sTnsthe possible trip to Dubai, iSBMI^ suggested that

)t neccessary for the c
»ince discussion was getting
he was in position to decide on
it^st that O'niel confer with
and O'neil will get back to hia
-stated that it should not be t
what first, once this deal is c
that we Bust discuss. He again
denonstrate good faith.

O'neil aiie^if the hostages

one point ^p||HVl^,l£i^l^'^ ^*
still in lrf>a'norU'-^|BB9P*hesf
said th»r^bgy^ould get them. 0
hand '^

o acconpany group that comes.,
p Jtell-svggest^d-th&t-
insistancejand "
[superiors and f|riM|||ilrwith^bis

e or two days. At the end<

give such iaportance to who does
ited there are aeany ivportant issues
ted on the need of the US to *

now under their control because at
ot know if their delegation was
ed to answer jpfthis one but
neil saidxxht "then they are in your
said they were(note O'neil doubts this is true).

lOunoo ^un3»s leuonfN uosudOr )l *q
9SKI 0 3 1" sijoisiAOJd )3pun

Pirtijlly 0»ci»t«'"«d/Releasea on JfiCS-S

und«i u^i" -Jons ol EO 12356

by K Johnsoi; 'vational Security Council

ipunoo Ajiinoas lEuoiieN uosutof x <q

9^E2i 0 3 (0 S'joiJisOid J9piin

-— UO l)SSe?|3b/P3lll55E|M0 kW^A

,VkSS«*»

a//Aj osj^

1013

liHClASSlf'.W

fttfttajaai** coBcnts m the Ubanoa art prtttjr ^tra I titt forward •>

thty Frtttjr suck tquar* with the facts. The Iranian relationship with
the Aaal is »rohaly aoaewhat worse than he states and the realationihip
with the tUflflBft set as cood as he daias.

Rafseai^^HPBBaftts(the initial ones) en relations with the west
are Bost nVestteg. This is the first tine I can recall that a
Iranian •file ial as aanior as Rafsenjani has coaaented on U.S. by
saying that we aeek cordial and friendly relations and are workinj
to astahlish better relations.

Kafsaalani's -rehash of aaerican crises later in the text is the
standard bill of atOBaaent for the United States. In reality this
is pretty atandard Basaar bargininf tactics. After rehashing "criBes",
Rafsenjani states that Irani reaains suspicious of the United States,
But if it can be aroved that they (US) no longer wanted to cause trouble,
we can have relations with then.

It is alBost as if he wants the bargining to begin.

With regard to the two factions, the political balance in Iran is
probably sore delicate thatn we had previously thought. Rafsenjani
concedes that this is causing ktrouble, although he does not speciry
in what areas. The factions that he refers to are the conservatieves
and the radicals. The konservatives want the continuation of an Islamic
republican governnent, l>ut they want comnerce to be by and large
freee, not governnent controlled. They also advocate a aore balanced
foreign policy. The radical faction also propounds an islanic
rebublican governnent. but is ■arxist as regards the econony. They
also advocate a foreign policy aore closely alighed to the eastern
block. There is a third line whose intellectual leader is Mahdavi-
Kani and who have less influcne in the governnent that either of the
other two factions. They want to saa the role of clerics in government
diminished. THEY ALSO ADVOCATE A FREE econony and want Iran to lean to
the west in its foreign policy. Baspite their lack of direct influcne
in the governnent, they are nuaerically strong.

uHCUSS\nto

tt/tJ osiS C'f*^ ^)

1014

• I C » B T tENSXTZVB

raONB CALL

OR ABOUT

THF nn

A06UST

FOR THE
DIDN*T I
W AS

SAID THAI
ACCOUNT-
PAYMENT TO
OP THE LAST SH
TO THE MERCi
CLARXF ASKED
bt.CAUSE OUR
BAD CHECKED HIT
ITEMS.

PROPOSED TO WJgAT NE MEET ZM EUROPE ON
ALSO PRBSSra VtO pay THE MERCHANT FOR
SOON AS POSSIBLE BO THAT PURDS WILL BE AVAILABLE
SAID THAT BE MAS MILLING TO MEET IN EUROPE. BUT
WANT TO C^ ONE OP THE REMAINING ACCOUNTS RELEASED AS
LE7 CIJiy|L.SAID TES WE MANTED THIS TO HAPPEN SOONEST.
THE ma^SHIPMENT ARRIVES, HE WILL TAKE STEPS TO HAVE
IMEDIATELY. CLARKE THEN URGED 0>»>41AKE THE
AS SOON AS POSSIBLE. ■flAin THATTHE IN^BNaK^f^
BOULD BE DONE BY 11 AUGUST. HE Wl!3r:BeN0u.&j:HEt
IMMEDIATELY AFTER THE COMPLETICW OF THE INVENTORY.
IF HE WAS CERTAIN THEY NEEDED THE 39 NUMBEI
TARY DOESN'T USE THAT MANY IN 10 YEARS. M^AID THAT RE
E "EXPERTS' AND THEY SIAD THAT THEY MUST HAVE THESE

'0 WAS IN A VERY GOOD MOOD AND
COMPLETED PART OF THE DEAL. HE INV
HE HAT GUESTS IN HIS HOUSE FOR DINN
HAVE. CLARKE.

D PLEASED THAT WE HAVE SUCCESSFULLY
CLARKL TO DINNER SAYING THAT
T EVENING AND WOULD BE GLAD TO

D,,, 11 JAN 193,

C//A/ os/<^

1015

•p0roxiMUly 144S heart m 12 Junt. ffht #MiBBI^ taia that h« h««
c«lU4 0*Mil ^t thatO'Mll b«4 Mi UtfTi^hTiiUBbtr flvtn. o'mii
Mid tiMt tlMM^WM M preblM fts M had bttn inforatd •( tht call and k*
called back ik eeen aa poaaibla. tt «aa )vtt • mutation of O'nall not
having baan U tha office.

2. Althemh there vaa a let of talk one thin« eeerged end that it that
-omiriMBHii^'e people vent to aoMhew fo through with the deal, the
initial part of the cenveraation waa concerned with the •f>nrmftti« r>

^ifficultiea that defH**" w<»k w w. i».».i.>«. »v«, TheVMMII^'''^
oopnaaited that there are aany people that oppoae dealing with ea. tfhtn
O'aeil aiked if thia vaa cauaing hia group oolitieal diffieultiea. he

tontiroed that thla waa the caae. Bia problee la that they ouat apptar t<i
eve ■taoe a gooo o<ai. He pointed out that the previous reltaat of tht
?ne eeraon in return for the 1.000 had not left thee in eoed oder a> th»
«000 %

were not that iepor tent, ana

»rrraTTK<-»iunjm4.iM-n.na.mi4

2. O'neil atated thet we were very such intereated in the deal and a
long tare relationship between the two coapaniea, but the chief of our
coapany was inaiating on the releaae of our gjn^agfload 4,000,000 dollars
before we dtlivered the reoainder of >4n apaya and then the two lAiew— ^
boxes. Nhat was interesting et this point ia that the^Bk^fiBdld not
•ey cnere could be no deel on thia basia. Me aaidthat eone froauia amt
be worked out whereby we can deliver what we proeiaed at ouch the sane
tioe as they deliver the .4.000.000. For the firat tioe he aaid that thty
needed politicel currency io deliver on their end. Be atated thet thay
have • eerioua prooiee wiih the 4 billion '*« ^j^t>r»itt«t>a wKy «» <■ ^^^^^

**Y ***Tfl If ***** **** ^f" * aarioua nreblee in their negotiations with

ose thet control

I nas oaan a aarloua ari
the 4 ■lllion. Mhen 0
roi or the 4 aiillion , i

their nee<
t6 ike dii

neil^eiaeo the oirect quastlftff

the 4HV''^*^<ll^*^*'' ^"^ **i^|
Be aaid thet if w8'^iad .^tayed Ir

con they vein contro

thet thla waa within their cepabilltiea. _

Dubai a few dava longer they could have dallvered 2 oillion iomadla
Be eophaaixed in enawer to an O'neil question that they could not
specif icolly say exactly %fhen the j ■«ii«»**t w,tuM k« »i-a««f^r»i<. ju»«^»h««
waa Btill in their power, deapite the feet that the aituation ^jb^a th* 4
■II I Ion ar» hald was continually deteriorating. The ^MMMPMt urged tFat
we .try to do this oeai aa aoon ai ^fttlble, ao that our two companies
could heve a Beaningfull future relationaihp. O'neil aaid that he would
cell back at aoDroxlaatalv the Mfa ti— nr ^* •^«<*«

^~ll continue llylpoke of the aarloua pro>^^«n>« »*»■ » ♦n'^n?

conauw^r thla <beel Wit tiualng hJA 4M fcH ^olleaguea. Be urged

ii u ewiiei w* Mimiiii lu mi m m« ubliih. — n would try to

contact theMTChant iftUdielely ie provide as anich backround aa possible.
'^*4MMPN|^" several eccaaiona said that there were considereablt
-forces arrayed egainat thia deel and he cywldarad |yi»aalf ^jaowagSnqcr-
Boat intereating note is that during thia cenveraation the^HMHHK^~'4
inaiated that they .want to ao through with deal. Although lie bordared en
the inarticulate st tiaes, long peuaea and sooe relapaea into hia old aong
end dance, h* did not relect our poaition outright. O'neil *s
reccoaendation ia Uial Ul 111 UUBU SilU Lim it oui with hia in in person,
we Bay get aore out of thi^,^an the transaction we are intereated in.

ReVIEWEO FOR RELEASE
Datt - 1* JAN 1S27

1016

to U •tonew.liSTfd MlJ {hit k! i;.*i!S^"*"« kP'«cln|. Hi refuted
seae ediustaent ia the prleinl Ssln ««*!V5**"'*1!» P"»»«" to let
list, fte confesied thet i. Sfi •«? L*!"/*!'** ■ •*>«« «>»• Micro hehe
Th;ls Is so>e kind of iidiJ.?Sj Ihlt'ScK*! JV*/*^?*f »» *"• ■orrow:
However, he does have eoMthf^I IS! .*"''' ' "»« "ifht not exisit.

prlcini ..they vere not oreS.r.S "J^ 2"* *";*"» ■"»* *• <»»«• «»» J}

•P_»Udth£the and 600L iJe irdMo J«uSi!'#" *»Pr«"ion on § S» .1$
-^ In the iirsl pi»ci-T--4 I.id thet 112^1! f*' '"''*"« reco.eoled the dea
W.S osn his ond. sirSid th.rli IlrUM".?? "O'* trouble than he

fro. Se. to cell hi.^^b.ck "."r!" '^"X* •erected . prori

,,._„, UNCLASSIFIED ="^1^

1017

UNCLA3S!F:ED

CJOL TO m

1. tas calHd tht

llothin9 «i
h« eallsd

Oil JOLT 12*

vasual

workad

basics I' _

dollara#r

raaain

and th*^

Dubai

rAccordii^^P tha
Coodt and Saa

to a call froa hln.
ava bia ay boaa nuabar whan
'ctlen was Mda, thara was tha
tad by saying that ba had
and thay wara in agraaaant

thay will ralaasa ona ail Ion
o dubal and discuss tha
rangaaants (notrt thla dlfars foa tha original aggraaaent
agraaa^B^^oposad by Saa which callad for a aaetlng In
ha^i^en coaplatad) .

stated ad nauseun that ha had-had -tpadSle
of damage to their conmo, TheMHHHH said

2. Afl
contacting'
that they

prepared to release one account and they now have this capability.
Saa SAID that this was an excellent develpment and proposed that they
release the one account, then Goode and Sam will nmeet with hln In
Europe and work out the Scheduling details with hin. San emphasized ^^
that the Chief of Sam's company Is fed up and said that nothing wij.^-** \J
>wn until one of our accounts Is released. The tfBHMnil ^'"^

go down

emphasized that there Is only one
the pricing. If this can be reso
is reason why he wants San and Goi
ailcro flche with him. Sam told h
not in our control. We sold the
the awrchant.

3. There was an interesting b
asked if Sam had talked to the me
wh^^^^iad left Oubai as Sam had
MflBP^Hl^ vas confused at this a
Dubai. This indicates that the ate
and perhaps we should wait to hear what he has to say.

problem remaining and that i^
the deal can go through. This
cone to Tehran to review the
t for this deal the pricing was
to Biddle aen who sold them to

he Merchant. The

Sam asked th«
et heard from in. The
d that the Merchant wasn't in
ht Is testing another channel

4. Conversation ended with
proposal. Saa agreed to call

<5r%-' "leciassitieJ/Reisasen on l{f6S9fi.

f: provisions 01 t 0 I235S

K.^ii 'Son. Nii;(ji;,-,l S.:.j ;'v Council

sayingwould persue Sam's
July.

ti«a^««**

enpooid

REVIEWED FOR RELEASE

Date -JliiLML.

(

1018

^^&mia

/y j^ciA'fc

17JUN8& S-SAM

(AFTER GREETINGS)

S-I TALKED WITH OUR OFFICIALS THEY SAID THAT OUR DEAL MUST BE IN ACCORDANCE

WITH THAT AGREEMENT WHICH WE WROTE IN DUBAI

Byes
s-. and they art not willing to change it.

s- what is your view?

"Wer pro
"VK Johnson,

""^erprows,oP3oreo ,sff^^^

W-IF THAT AGREErCNT WHICH THEY WROTE UP HAD BEEN ACCEPTABLE, IT WOULD HAVE
BEEN CARRIED OUT WHEN THEY WERE HERE. IT WAS NOT AGREED UPON. YOU WERE HERE
((AND KNOW)) THAT IT WAS NOT AGREED UPON.

S-YES THAT'S THE REASON WE WROTE THAT AGREEMENT. WE ARE WILLING TO DEAL IN
ACCORDANCE WITH WHAT WE WROTE. BUT IF WE COME AGAIN TO DUBAI. OUR FOUR
MILLION MUST BE TURNED OVER TO OUR BANK THE SAME DAY THAT WE ARRIVE. THEN
WE WILL DELIVER THE REST OF THE 240 IMMEDIATELY. AND THE TWO GHUTIS WILL
COME A LITTLE LATER. AND WE WILL REMAIN IN DUBAI UNTIL THE TWO GHUTIS COME.

THIS IS NOTHING NEW THAT'S WHAT YOl* SAID BEFORE.

S-YES. YES AND WHEN I TALKED WITH OUST OFFIC I ALS. THEY SAID THAT THIS IS HOW
IT HAS TO BE. V: "s

■■at any RATE, WHAT YOU'RE SAYING IS NOTHING NEW.

S- NO. IT HAS TO BE THE WAY I TOLD YQUjpS'ORE

JEWELL. IF THAT'S THE CASE, I DON'T THlMfj^ WE 'LL BE ABLE TO DO ANYTHING.

S-VERY GOOD THEN IT'S UP TO YOU AND Y0U|| COMPANY ((COUNTRY)). IF YOU WANT
TO CONTACT ME, I 'LL GIVE YOU A PHONE NUMBER.

S-IN THE CITY WHERE I AM

PLEASE REPEAT.

((THE TWO MIDDLE DIGITS A
SOUND LIKE HE WAS SAYING

PEATED BY

IWERE INDISTINCT

but it didn't sound like he was saying ^bp)
s- that's right and my name is sam o'neil.
Hhuh?

^'.^■^

> ^•-'

S-SAM O'NEIL ((REPEATS SEVERAL TIMES. SJ^^B^P HAS A HARB.;'TI»« UNDERSTANDING
JUST GIVE MY NAME, AND I 'LL CONTACT YOU IMMEDIATELY '•'

^I'LL TELL YOU NOW AS MUCH AS I KNOW YOU WANT US TO DO . f."''-
SOMETHING FOR YOU. YOU DO SOMETHING FOR US WHEN YOU HAVE DONE
THIS THING FOR US. WE'LL DO SOMETHING FOR YOU - .s-/

S-FINE I KNOW I MEAN, I UNDERSTQQD YOUR POSITION VERY WELL YOU TOLD ME
THAT SEVERAL TIMES BEFORE BUT THE OFF I C I ALS> HERE SAID THAT IT HAS TO BE
THIS WAY, AND THEY ARE NOT WILLING TO CHANGE THEIR MINDS

fTHEY ARE WILLING ((FEW WORDS MSD) )? ,«», f

1019

S-YES, YES. YdU MUST CONFER WITH THE OFFICIALS THERE, AND IF THEY CHANCE
THEIR MINDS- CONTACT ME PLEASE.

I^FINE.

S-COODBYE.

Cll/VAf^:2y

1020

UNCLASSIFIED Au^

y^-tr^ ^^^^-^i- A^j^.>^L -.xt^^

''^Ci45S/f/£o

1021

"'^'^^^2396

•IF'

r'LY 10, i)'-

: (^■■. .-. . • I. J 1 ly 'oscr i.T^T" "i? sources. Ms sf'**'--! th.i
Irani, ^n r.-^wsriai^rs thtit he c^n 'at his hands on rt'.r. .i ; s
radio hrc'^dcasts. Hp also tai:<s to exiles, se°s -i lot .-^
tr3Vr>l -!ir< ani forth ro Ir^n, •maintains soorir*!-: conta
CO 1 l-»-i "j-^s V-.; r^~-iin m Iran, ^ut norhass His n',-?' v.-np
^f :n:or~.i". . or, jre the renr^sentat ives of impor'art In
1 -Tirr :'■''.'' or. iiii.t i.-igs' . T'".-? "^cst innor-.in': o' -..~,?s-r

' he r->^.is a : ;
0 ; ijtens 10
f Ir»n;ans wno
ct with for ■.■!«» r
ortar.t so^rc^
mans ■.-.■^o
IS t"9 "'a- .-. ■

an not return to Iran.

2. Like all Ir
says that Rafsen^a
Troup known as the
IS the real rarfica
there are two othe
another grouplask
^v Rafsen]ani and
Hksai^i tat Rafsen]
cooperate after Kh
the Sepah- i-Pasdar
resisting the -nove

2. San and Abe

I'SG m trymq to u
Iran. Sa-n and Abe
contacts in the U
This of course req
the Iranian govern
-a]ority of senior
political re^tion
line pople. (^Bsai
'P2.se ar.i socn ac

Js^r

anians , ^■■^rouns Iranians into pat d

ni headsone qrouo, Khamer.i'i another

•■hird line is headed hy seyyed Xehdi

1 irouo which supoorts terrorise, etc

r groups worth .•nenrioniPQ, Bazerqan's

about this one). |^ says that Montaza

once khoneini dies will he Rafsenjani

am and Khaneni'i are both hrilliant

omeim's death. Rafsemani now effect

through "-lohsen Reza'i. Khaneni'i ha

to incorporate the military into the

tolc^Bthat ther^ '-.'as an interest 'on
se tra^e to Tradually re-estaol ish re
olanned to capitalize on tne trade pa
SG with whom they will coordinate the
uires apolitical decision at the hi5
ment. ^Bsaid that he is certai- that
Iramaffl want to re-establish soT^e d
s with USG with tne single exception
d that the current proble-n is that Xh
tion as long as he lives. Grour.dwor-c

oeo;

visions. He
and a thir-
HasheTi. This
said that
pie and
ri IS dc^mat^d
*s point T^n.
^en and wrll
ively controls
s been
Pasdars. . .

the part of
la t ions wit",
rt usi-i-
ir actions,
hest lev?:

the vast
egree of
of t .-. e t h 1 r
omien: woul

:nat

'.e .nan

1 5 1 a 0 1 1 s h CO-.-. act

:-3t "T? car.

:an .

■e tne we cor.sic

fr sencm^

m a non-

suqgestej tn?.-
irTca.h to do soTie

contacting after around work has heen done.

iEattlalli OSclassr rd/Reieasei on.

awtef ?rowif:iV\S of l-O. i2335

L^%

, - . p^^ f». ^. '^. - ■■": "^f^ sm^ ***omJ feft"^ ^o'^"'^''

(©

A^,

1022

^cK^b'fe ^-'A

Ch\J^

111

y/j*i<fo

lASOS ALBfT HAKIM ON II I'l.Y lOOr

"CO sam. He said that if wp had f-rther questions he -\ai ■
ability to get the answers. Sam said he would taKe a look at th«
report and get back to him.

3. Hakim spent a lot of time explainin,
get som« legitimate business with Iran for Cov
willing to sell Medicinals at cost or on a credi
year to pay if he could get some other benifit
suggested oil sales to the .US which he was m a
for fob S8.20 a barrel. Srfb suggested rice sine
subsidizing the export of rice at prices far bel
quotes. There was a questionas to whether Oil w
the course of the meeting .HBIiald quite frankly
to do this for nothing and Hakim told him that
through he would get a good commissior^^ Hakim
planned to pursue these matters withH^Jno matte
has also set up a private polygraph fo^HBon Mo

hat he wanted
■purposes. He w
t basis with up
iUt of It.
position to
e the USG was
ow the going wor
a embargoed. Dur

that he wasn' t
f anything goes
old Sam that he
r what we dec
nday .

to a

h^e

irg

going

r07=(

V-

1023

for OBCKW

NATIONAL SECUnrrV OOUNOL

August 5, 1986

Non-Log

3903

MEMORANDUM FOR THE RECORD

SUBJECT:

Operations Sub-Group (OSG) Terrorist Incident
Working Group (TIWG) Meeting

The OSG met on Tuesday, August 5, from 1:30-2:45 p.m. with LTCOL
Ollie North, An\bassador Bob Oakley, Richard Armitage, LTGEN John
Moellering, Charlie Allen, Dewey Clarridge, Buck Revell, and
Craig Coy attending. The following topics were discussed:

to^

Hostages; There was a lively discussion on the next steps
take on the remaining hostages. The discussion touched on the
possibility of Kuwaiti releasing the Da'wa seventeen and the
conditions tha t would lead to that actio nj

Revell raised the concern that we may be acting inconsistently
with the President's policy of no negotiation and that it would
not be in our best interest.

Armitage questioned what our policy should be and whether we
should bargain for the hostages.

Moellering asked whether the President felt pressure to get the

hostages. North responded that he has a personal sense of

obligation and that the President had instructed North to get
them out.

MnHHUMCWaam

8-/7-f?

IMJULJSB

0 1

1024

!■' • .^ ^. ''" ,^

Y:^ 1,^04 (W>^ .-^^ -^ ^i.>.::^vx^.

wmm

1025

.Soces on Dissem concerning Irajrs~vrievr-tnar It "ciam^ot win a war with Iraq "Their
for an "honorable Peace," and their fear that the upcoming offensive may not be
success full.

N 2866

1. Iran now concludes that it can not win a war with Iraq. The economic infastructu:

j^can no longer support the effective waging of the war against Iraq. In addition Irania.-

^ logistics are in a shambles. There are also political reasons which dictate the quick c

elusion of a* peace with Iraq. About 2 years ago the iranians began loUcing at

the rebuilding of Iran after a peace with Iraq is concluded. In a postwar world, Iran

hould have to do sorae re-arming of their military. They would also have to rebuild the

industry and econoery. 1 Since both the military and the economy are western oriented, :t

ive that they unporve relations with the

2 o J

1 l'^
1>
Ob

2. The Iranian govemnent wants to conclude peace with Iraq, but has a problem in tha
it nust be able to present the end of the war as a "Victory" for Iran. Were this not
to be the case, the moderate and conservative factions in the government would be
victimized by the radical wing, which would attenpt to dominate the government. The
fear of the moderates and conservaties is that this would upon up Iran to increased
Soviet influence. In order to present the Iranian people with a xzsXMZ)D("victory, '
the Iranians have planned one last offensive. THe purpose of this offensive ^s to
gain enough territory togive the Iranians a strong bargining position. In the past
two months considerable doubt has arisen within the higher echelons of the Iranain
government as to whether Iran can reasonably expect to 1 make any sizeable gains by
launching such an attack. They are critically aware of the tremendous price they
will have to pay in hianan lives, because of the well prepared Ira
the fire power superiority of the Iraqis.!

82-692 0-88-34

1026

1027

Extrftctt, froa th» Farti 7 pagt report o^^^H|dattd 8-i2-Sft

Nam*

Age:

Place .of bir

Education

Marital Sta

" 2804

Partially Dedassified/Released on^Jid/S^

undlf provisions of EO. 12356

by B. I^ir. National Security Councif

B. Gtnaral picture of th* political status (tha difftrtnt groups)

1. Nuabtr on* aan with absolute powtr continuts to b* Khoaaini.
Ho personally suptrvisas tho work of all group leaders.

2. After his death |^^^^Hcould reach an agreeaent with
Montateri's group, they will be successful.,

UNCLASSIFIED

1028

C. Reunion ior lack oC It), of U.S. /Iran.

H^ 2805

A number '.■:' peopi* at di/ftr*nc occasions contacted different nuahc.'«
of the Ir3nina»govtrnm«jiC.>(in fo.rtigiVgCountries) to'ing to create lome
kind of rtlacion between th* two^^io^i** (aore or less along the ii«e
which wr are odrsuing) . So result*.

The Ira^am^aatrc reagf^^tc
for^bflif thea f ro«. sale*

Irecoaaendatlons :
1. Do not try to contact|^m^| preaaturely this will endanse:
hU for positioning hlaself in thr governaent.

2. Gain Iranians' trust by tupporting thea In:

a. The Hague

b. Military Aid

UNCLASSIFIED

1029

1030

,^>tat 1-A fCMS

♦irt;»*»

>«! »■■- . ..i.j^iiwiijwa

fl 2395

^^ {Ti C
- CU— w-B»Jk «»^fl(fc^ 2 - -^,

*Ktfgi,~ CA&a, ^B»^ CLttt, ^ §• w

- cuwNi^-v^ ,.ja ^»^» 4 -s ^'

IS ^9« - Taxcc-^;) U n uLn

'--■»i.

1031

£^Nb.t ?-A ^c^^^^

lt»JBff|^^^H|>OPGRN/N0aaiBM«^

«aBN

National Inictliienec Council

Partially Declassified /Released on_^iki9i7

under provisions of LO. 12356

by 3. Reger. Notional Security Council

10 Stptcnter 1986

MDOtANDUM rCR: Director of Otntral Inttlligtnc*
FROH:

e SUBJECT:

QtarlM B. Allan

Director, ilo«t«9* Location Tuk Focca

Antrican Itoaba9aa

1. I Mt with Ollia North laat night at hia offioa on Anarican hocta9«s.
Ollia had juat ratumad frca a abating with John toindaitar on tha aana
aubjact.

2. Mindaxtar haa givan Ollia new guidanca on tha American hoatagea,
nainaly:

Ollia ia to oontlnua to devalop linka to tha Iranian Government
through Albert Hakiai and Dick Sacoord of Stanford Technology
Aaaociatea. (Hakia, ^ you are awara, haa linka to the ■■■M ^—
^HflB^ Dm ^■H^tiparantly ia attaafiting to arrange for Ollic
and Otorge Cava toHnat with Rafaanjani, praaonably with tha next
ahipmant of acaa to lahran.)

^ OMbanifar will ba cut out aa the iotaraediary in future ahipnenta of
cargoa to Iran, if at all poaaibla. lb cut Qnbanifar out, Ollie Wii
have to raiaa a ■intaiiw of $4 Billien.

— If thara ia no other channel for financing future araa ahipnenta, then
Chobanifar will ba uaad aa a laat caaort.

3. Ollia ia greatly relieved by Mindexter'a daciaiona becauac he feared
that John and the Pceaidant would ahut down convlately thia back
Iran becauaa of the kiAiapping' yaatardty of Frank Haed.i

"• Tv«*J ^t(,ea4tl ;

«»««va,i

UNCUSSIFIEILm

d^4^:

1032

NATIONAL SeCURlTy COUNOL
WASfWOTON 0 C M406

October 2, 1986

TC
ACTION

MEMORANDUM FOR JOHN M. POINDEXTIR
FROM: OLIVER L. NORTB|u'

SUBJECT: Next Steps with Iran

Hon-Lo9

N 9099

SENSITIVE

[called Dick this morning to advise that he had just returned
Beirut and would very nuch like to meet with us in
Frankfurt, Germany, on Monday, October 6. He indicates that he
has 'good news" regarding the hostages and that he wishes to
get palt the 'obstacle- as quickiv as possible. An appropriAle
'€ravei approval is attached at Tab I.

George Cave is taking a well-deserved 'mini-vacation* in Rome.
We are telling all callers that^e is in the hospital for tests
on his back. In accord with^HH request, the U.S. side would
be represented by: Sam O'Nei^^Copp, and Goode.

This meeting also affords us the opportunity to deal with the
issue of Israeli cooperation. Nir has been calling daily (often
several times) urging that we get on with the process in our
•joint venture.* He constantly cites his September 10 meeting
with you as the basis for proceeding urgently. ^Becausewehave
not told him about our intention to pursue the ^^■■■^■■■■■^
first, he continues to encourage Ghorbanifar to raise the
requisite funds for anothefdelivery . Ghorbanifar, in turn, has
a frequent dialogue with^BIH^f in this regard. All of this
tends tc create confusion among the various participants and an
unnecessary OPSEC vulnerability. We need to act -zv to reduce
the number of channels into the Iranians (at least on a temporary
basis) and clarify various roles and missions.

He (Cave, Clarridg«,(ai
move promptly on botir~f

|T)and Copp) believe that we should
ronts as follows:

Honday

O'Neil, Copp. uid^(>ood« meet witMMMln Frankfurt on
:ay, October (. /iMDhes indicated tnSt'ne has an

internal consensus Sir now to proceed with regard to the
hostages "obstacle.* Be has said that he will bring with
him to this meeting *one of the officials we net with in

bS^iyssllya^AD

\l»^lt9

oy 8. ji^

fir^

1033

T©f-9f€*ET-

9". 00^ ^

SENSITIVE

Tehran* and has asked that we bring with us a definitive
sample of the intelligence we had discuysed wjien he was
here. Based on this, we believe that(
iM^HHHm^Hpmi^^ may accompany^pv^ You
recall thatj^^B^ request for intelligence wj? very specific
(the detaxlS~Cere forwarded to you via PROFs) . While the
sensitivity of providing this infomation is well-recognized,
it Bust also^g^ noted that intelligence was given a higher
priority by (■^^th&n any other assistance we could provide.
In the^Ca^ey^Hll^Cave-North meeting we had with you
after(^iBi^eparted, we all agreed that it was unlikely that
providlng^such information would change the course of the
war. Further, we all recognized that the information need
not be accurate and that it was highly perishable given the
dynamic nature of the conflict. In short, we believe that a
mix of factual and bo^us information can be provided at this
meeting which will satisfy their concerns about 'good
faith* and that we can use the *perishible argument as an
incentive for the Iranians to accept a CIA communications
teeun in Tehran. As before, we would not leave any documents
with the Iranians, but will provide an exposition during
which they could take detailed notes. Director Casey needs
to be told to prepare the intelligence for handcarry to the
meeting.

rm^^

^has said he is bringing a Koran for the President. As a

^^TB^procal oeature, we have purchased a Bible which we would
present to^ipijfor him to take back to Tehran with him.
Given our earlier discussions (see transcript) , it would be
very helpful if the President would inscribe a brief note
citing a particular biblical passage (T&b III) in the front
of the Bible. This particular excerpt is important in that
it is a new testament reference to Abraham, who is viewed by
Moslems, Jews, and Christians as the procenitor of all the
world's nations. It would be most effec-ive if the President
hand wrote the inscription and initialed/signed it without
addressing the note to any particular person.

Nlr: When Aniran was here, we made a conscious decision not
to apprise him of our near-term efforts with Rafsanjanl't
Cil^HHI] We did inform him earlier of the contact and he
^-eSntlnues to inquire regarding the status of this initiative.
Meanwhile, lacking guidance to the contrary, Nir has sought
tpstimulate further activity be^een Ghorbanifar and
[^^■■■£1 This has resulted in^H^Bftxralling directly to
Tieorgc ' sltome and office •everar^imes^ally and cpnslderable
confusion regarding why we have not accepted the <:SiHBB7;)
Ghorbanifar 'offer' to purchase the remaining BAvnc spare
parts and SOO TOWs.

JOr ODCBTT

\mwm

SENSITIVE

1034

TOP^SECKT"-—

mmmm

From «n operational perspective, the current conununications
arrangements are a command and cpntrol/OPSEC nightmare
JJab IIIj^ Nir essentially contfbir'buf'''access to both
([iJPI^BBPdnd Ghorbanifar and, thus, we often find ourselves
reacting to his well intentioned efforts. He believe that
we now have an opportunity to change the relationship in
auch a way that Mir ia placed in a supporting role rather
than acting as a primary source of control. He also
recognize that Israel's participation in this activity is
both politically and operationally important. In altering
Nir's status, we need to do so in such a way that he and
those officials in his government who are cognizant continue
to perceive that this is still a 'joint venture.*

In order to accomplish the objectives outlined above, we
propose that on Saturday, October 4, Copp would fly to
Tel Aviv and meet with Nir. At the meeting, Copp would use
the tal)cing points at Tab IV. In an effort to ameliorate
Nir's anqst over his "new status," we urge that the letter
at Tab V to Prime Minister Peres be signed by the President.
If you agree, we need your approval of the talJcing points at
Tab IV and a Presidential signature (real or autopen) on
Tab V by 3:00 p.m. Friday, October 3.

The steps above are designed to give us a chance to raaKe the new
relationship through the(;jlBMM^ function without destroying the
Ghorbanifar^^H|HV channel. We would, in ef fect.^put
Ghorbanifar^HHt on "hold" until we see what ^il^ produces.
Please note that when Copp briefs Nir in Tel Aviv on Saturday, he
will ngt reveal that he is enroute to Frankfurt to meet (^Bb
Given^^iBB) strong antipathy toward the Israelis and our
uncertaini^ as to whether or not he )cnows that Nir (aka Miller)
is Israeli, we would tell Nir on Si^da^i^^ht that we were going
to a hastily arranged meeting with ^H^m^H|which he (Nir) will
be unable to ma)ce due to lack of connectTn^nights to Frankfurt.

UBVhas already told us, that shortly after the October 6 meeting,
'tfiier* will b^_a follow-on meeting of the 'joint committee' in
which BH^BB^^I^ ^>* * participant. Unless we are convinced
that tdTe Iranians would recognize Mir as an Israeli, we would
intend to invite Nir to this follow-on meeting.

A Bwmo from you to the President has not been prepared for
obvious reasons. It is hoped that between now and 3:00 p.m.
Friday you will have an opportunity to privately discuss this
with the President and obtain his approvals/signatures on the
steps indicated above.

1««&^

SENSITIVE

vefseener-

1085

UNCLASSIFIED

RECOMMENDATIONS

1. That you initlaJ^the travel authorization theet at Tab I.

Approve ^- Diaapprove

2. That you tell Director Casey to prepare an appropriate
intelligence package by Saturday, October *, for the meeting with

<W^>on Monday (departure Sunday evening) .

Approve Disapprove

3. That you have the President inscribe the attached Bible with
the passage at Tab III (a card is paperclipped at the appropriate
place in the Bible) ^

ApproveUl^ Disapprove

4. That you approve the talJting points at Tab IV for use by Coop
with Nir on Saturday, October 4.

Approve Q"' .>^ ' Disapprove

5. That you obtaih a Presidential signature on the letter to
Prime Minister Peres^at Tab V.

Approve (\ Disapprove

Attachnenta

Tab I - Travel Authoriiation Sheet

Tab II - Diagram

Tab III - Bible (for Presidential inscription)

Tab IV - Copp TalJcing Points

Tab V - Presidential Itr to PM Peres

TOP CCCMW

mmmmn

SENSITIVE

1036

"'iMtn

DATE : ^jOctqb^Q-^, Wftc

Z-.-.\~~Z~ ' • ^^-'- ■ Mr. William P. Goode

FV"J'OSI(S; ' i'.TNT(S;, DATE (SI: Official travel to Frankfurt, CE.

-- Mon'^^v- October 6. to meet with our contacts regarding the

--rrent situation in the Middle East.

3. ITINZBAKY (Please Attach Copy of Proposed Itinerary):

10/5 Depart 8:00 p.m. Dulles Airport PanAm 160

Ift/ft X^rive 9:20 a.m. Franjtfurt, GE

10/7 Depart 12:45 p.m. Franlcfurt, GE - PanAm 161

10/7 Axrive 4:40 p.m. Dulles Airport

DEPARTURE DATE Sun, Oct 5 RETURN DATE Tues, Oct 7

TIME 8 = 00 P-"- TIKE 4:40 P-"-

4. HOOE OF TRANSPORTATION:

CCV AIR COMMERCIAL AIR XX pov RAIL OTHER

5. ESTIMATED EXPENSES:

$1872.00 „y

TP.i_VSPORTATION PER DIEM ^^ OTHER TOTAL TRIP COST_

6. WED PAYS EXPENSES: NSC XX . OTHER

7. IT NOT NSC, DESCRIBE SOURCE AND ARRANGEMENTS; N/A

8. WILX FAMILY MEMBER ACCOMPANY YOU: YES NO XX

9. I" SO, WHO PAYS FOR FAMILY MEMBER (If Travel Not Paid by Traveler,
Describe Source and Arrangements) ; s/A

10. TRAVEL ADVANCE REQUESTED: $ 0-00

XI. REMARKS (Use This' Space to Indicate Any Additional Itens You Would
LiX* to Appear on Your Travel Orders) :

12. TRAVELER'S SIGNATUP

13. APPROVALS:

UNCLASSIFIED

1037

UNfitlASmD

September 30, dk

N 9104

COMMUNICATIONS HETS
EUROPE

Fron «n OPSEC perspective, there ere toe wny chennels into (end
S. He cen't hope to have this neny players speek

out froa) the U
with one voice

no matter how 'good* they ere individually.

BecoeMwndat ion : Pare the U.S. ccMMinicatort down to no »ore than
two individualt (who either compare notes directly each day, or
report to a connon supervisor); e.g. ,_ Sam and Copp, who both
report daily to North. Cut Charlie/^H^B^ and anybody else
out. Have then stop comnunications cola curxey (to support cover
•tory of Ji^l^hannel being blown, rolled up, and finished).

Dcelasalfyi OM>l

mmmw

1038

UilUSSIflED

N 9105

INSCRIPTION BY PRESIDENT:

'And the Scripture, foreseeing that
God would justify the Gentiles by
faith, preached the gospel beforehand
to Abraham^ saying, 'All the nations
shall be blessed in you'.

Galatians 3:8"

UNCLASSIFIED

1039

UNCUSSiflED ' ""

^H^h9^ *& ''^'''^^^^^^^^^

UNCLASSIF ED

1040

TOP OCCnTT

UN«LAS$iED

SENSITIVE

INSTRUCTIONS TO COPP FOR MSETINC WITH NIR

Saturday, October 4, 1986 N 910/
TeX Aviv, Israel - ^llT^

You will have with you a letter front President Reagan to Prime
Minister Peres thanking Kr. Nir for his courageous assistance to
our mutual cause. You should initiate this discussion by
presenting him with a copy of the letter and asking. for his
advice on delivering the original.

The objective of this discussion is to improve our control of
events in this joint effort to establish a strategic relationship
with Iran. The talking points below are intended to establish
the parameters of your discussion and are designed to elicit
further cooperation:

ADM Poindexter has directed_that I see you regarding our
current Ghorbanifar^B^BBRchannel and discuss with you
ways in which we can~^B&«« .(Sgether to accomplish our mutual
objective — a strategic relationship with Iran.

We believe that the first new hostage (Reed) was probably
taken by elements other than Hizballah — although they may
have him in their hands now.

We think that^i^^MaNnay have believed that he could bring
additional pressure to Dear on us to commence further
deliveries by seizing another hostage (cr hostages) .

Quite the contrary is true. The President is adamant that
we will not move forward on this channel until we resolve
the new hostage issue.

We are also concerned that the two new hostages (or at least
Cicippio) represents a clear violation of the 'understanding*
we have had with the Iranians on anti-O.S. terrorism since
June of last year.

We do not want to engage in a process that results in new
hostages just to bring 'pressure to bear.* Nor will we
continue this process if, when the current hostages are
released, more are taken, simply to elicit further
deliveries of arms.

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Aside fro« this very strong policy objection to continuing,
we have, as you know, had repetitive financial and communica-
tions difficulties with Ghorbanifar. While we could debate
as to whether or not Ghorbanifar had received all that was
due hiffl by the Iranians, the aost important factor is
potential OPSEC risk.

In an effort to 'keep things noving,* Ghorbanifar has made
commitnents in our name which are patently beyond our
ability to meet. This has resulted in increased expectations
on the part of the Iranians.

that

Finally, both of us know thatm^BB^ himself , is not
intellectually astute enough to realize the importance of
our contact nor the sincerity of our desire to establish an
official government-to-government relationship.

In short, this channel is not serving our mutual objective:
the reopening of a strategic relationship with Iran.

The President has directed that we will not proceed with any
further receipt of funds from Ghorbanifar nor deliveries to
3111^^^ until we resolve these issues.

Several months ago, I apprised you of a contact with the
^|^Hp>of Rafsanjani. The USG decided to pursue this
contact to determine its validity.

We are confident thattBl^i— — pt _the_man I met with in
Brussels, is indeed Ra?sari5anr''^|M^Mk^ and that he has been
franchised to act as a liaison beC^ew^he U.S. and Iranian
governiaents .

When Prine Minister Peres was in Washington last month, the
President assured hia that we are going to continue this
effort as a joint project.

I have been instructed to seek out a second meeting with^i^VV
as soon as it can be set up and that I will act a* the 0.sT~*^
intermdiary until we establish direct contact with
govemaent officials from our side.

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^r sccncr 3 sensitive

Once we have established direct USG contact with the)

we intend to introduce you into this process under the tame'
conditions as obtained when you went to Tehran with us.

Based on my one initial meetin? with ^^M^^^^ ^nd the
intelligence we have been able to collect, we believe that
this contact may well prove to be the one that both your
governinent and mine have been seeking.

(Remember Nir ha» been told that you 'came upon*
as a consequence of looking into the possible diversi^
TOWs through^|PHHBip|[^ during an investigation
undertaken in late July/early August.)

While we explore the sincerity of Cj^Hp^Mand confirm his
ability to speak _f or the Iranian goverJWeiTrT we want to keep
the Ghorbanifar/IBBIB channel on 'hold.*

To that end, we hye told Sam — who is in the hospital --
he is to contact^M^BMB»"d tell him that:

there must be a meeting wittQ^^^B^ before we proceed
any further; ^'•■«~ ^

the issue of the two new hostages has become a strong,
negative factor in proceeding at all;

this matter (the two new hostages) must be resolved
before we will take any further steps for any further
deliveries;

the problem is not the merchant and his financing, but
rather the two new hostages;

contrary to what he Cli^H|^HI may expect, there will
be no further deliveries Unci* we have met and resolved
this matter;

we have asked OllHM|>to meet with us in Frankfurt on
October 9 — we'flO nBt yet have an answer.

I intend to meet with ^BB^^^, somewhere in Europe or
Turkey, hopefully this iwek^^i will then report back to
Washington on my findings and a follow-on meeting will be
set-up — In which we will attempt to have you Included.

I want to caution you, however, that in my meeting In
Brussels ^H^^HMH| indicated that he and others In Tehran
are aware that yotf are an Israeli — and Icnew it when you
went to Tehran.

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Neither of us want this conr>/-» <#<•.;.- ^

think it to be, to foindirblcluse of'thx's^"'"'^ """ ^

I have been instructed to find a way to have vou in ^h-
meeting in which Goode and Sam will serve Is the use
representatives. '"* "*°

Approved

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In thm ahort tTW to r^tolv* tb« Anwricaa l»ogt»««

rrobl«« in I>«b«non« through th« efflc«fl of Iran, to
nclvd*

roturn of all pr«s«ntly bold Aaorican kottagos, and

cassation of hostaga-taking;

and to accomplish this without jeopardising our public
policy of non-negotiation with terrorists and
hostage-takers.

In the lonocr terrr to establish contacts within tht
Irr-;*' G'. vf ;r,-{ r.t t h." t rrjcht tt:t the poi'itjjity c' ;

brincin; about a change i r> the regiirie in Iran (oi
its attitudes), thereby

establishing gradually a rapprochment betweer. the
United States and Iran.

Ultimate. Stratecic Objectives renain an alliance which
r.".v,d.;f ;

containment of the Soviet Union on a crucial flank
and preventing their move toward the Middle cast;

countarweight to Arab themes in the Middle

Problems with the Program:

For over a year the US Covcrnmcnt — using private and
Israeli intermediaries — has tried to resolve the hostage
crisis by treating wi^h Iranian officials; the long-term goal
of eventually restoring a strategic relationship has roaaincd
in the background. The principal interaediary hi
ithgrbanifar. and the principal official has bee n|

Inreturnfo^th^shlpeient of AiBerica^ar5^T^Iran7 the
release of two Aaerican hostages was achieved.

1048

UNCtRSSintlr

■•ecus* th« C>iorb«n'ir«
•low and unr«liabl«. tiM Nhit«<

0189

hann«l« w«g vi«w«d ••
ncourt9«4 by Mccord

•na Haliia — bM turntd to • now ch«nnol. Th« n«w ch*nn«i t<i)
involves an individual purporting ^^^HHI^HHHi<^''''<=^^ 'axsic/1
(-0 Itafsanjani, Speaker .of th« Majlis and socond most powerful aan
in Iran.

r<«<^«

lKc:c r.c-. '. t'---r.
er.i cr.r : : E. re;

While the -one of the meetings has been generally
posilivc. the tarooining has been tough and the

necctictiorr difficult; closure remains elusive.

B
prcL-leT thcl now confronts us isth^di spos i t i on of
irst c^ir.'xl. frc TT r t ?r. : f a i tC>IH|^H|B Thii first
. . f : : '--■.<: : ' • c - a w^^^Hi^^r: . ; c ! i r : t t > .

€ tc the ov€ : a 1 i i r. , 1 1 ai i vt Sj < :j(iCoily, Gr: : Lari , f a i
s h€ war never ccmfeniated fcr sr-e of the am shirked t c
arn.s for which he arranged the financing..

the f
c!.-- r
da-ac
c 1 a i r.
Iran,

Ghorbanifar and his creditors, including Adnan
Khashoggi, appear determined to recoup their
'losses', even at the risk of exposing US covert
arms shipments in exchange for release of our
hostages. ^

We have a fes>^ting sore for which no treatment has been
prescribed. .jBl^HflHf has demanded that the Ghorbanifar-
^channel be sF>u^..^owfK_^Ij>deed^j^^|^BHMclaims
ready to have cooptedi^^HBH^H^H^^^^T^

»tateo tnac n«. andostensibly Rafssnjani,
tad ^proved of the w»y ^|HBB|fcad^roceeded v
heretofore. MotwlthstanaTim^ t' S>
spoken of 'eliminatinQ'
future. '

Ghorbanifar appears to be harassed by his creditors, some of
whom already have brought the problem to the attention of the
OCI and Senators Leahy, Cranston, and Hoynihan.

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1049

IHlULIIUOffffTLIr'

OhorbaniCar claias to havt f«cr«t«d, for
' *lasuranc« purposos', docunwntation of ovonts
which havo tranapicad ao far. | 01 90

Givan thia, tho aajor olaMcnta of thia initiative ara
likaly to ba axpoaad aoon unlaaa ramcdial action ia taken.
Thara ia no indication that tha Mhita Housa haa a plan to
pravant tha aspoaura or a plan to deal with tha potential

exposure. ^^^^^

The Ghorbanifarj^^^^^Hprhannel must be shut down in a
way that contains poten^^^^Rmaqe to the United States.

he rkc round:

When the initiative began. National Security Advisot
MacFarlane wanted to establish a channel to factions within the
Iranian Coverninent with which the United States might
evenlually deal, and which might secure incidentally the
release of the American hostages in Lebanon.

Israeli officials like David Kimke put the white House
; r. ccrtect with Ghcrt^nifar. Wrrkjnc; w:tt ^^rcct Ninrodi ar.c
c'.t.Li Istaeii cr.t ref rer.cur s , G»cr t er.i f f i irtrcducec US
i nteriTiedi^^^^^^j^M^hael Ledecn to fcy Iranian o((jcials
inf ludin^^mmHH|H||^^^£horbani f ar a

. ^ direct 1 inkto^^^^B^B^^P^Prime Minister's Office. A
"^^ series of meet~^^^^nsue^w^h negotiations sometimes appearing
highly positive, sometimes near-disastrous.

One hostage was released in September. 1965, as a
result of this channel.

A breakdown ocurred in Geneva, in late November
198S. when the Iranians accused the other side of
knowingly delivering the wrong version of Hawk
■isailes to Tehran — an accusation we believe and
for which we blame Nimrodi. if not Chobanifar.

Progresa appeared dramatic in May 1986 when a US
delegation lad by MacFarlana aecrctly visited Tehran. Tha
results, however, vera diaappointing. The Iranians were not
prepared to deal directly with ao high level a delegation.
Still, another hoatagc waa ralaasad aubs«)uently. in late July.

Another channel, potentially awra promising, was just
then opening up through private afforta by Albert Hakia and
Dick Seccord. Through a tondoo rapraaantativa of tha Iranian
Covermaent.^^BgHflHl^ a aMatln9 waa held in lata August in

1050

.^ -ii

^^^^.^^ ^ Eo^3^W5n«9s b«t«#Ma the'

(^ ilHVmniS efriclalt« oiM M«tiog in W«tblfifikon, th« other
liirrankrurt.

Cliorb»nlfar'« ASUQ«d rlasncial Stf itit

I 0191

Th« Chorbanif«r-^HHIHch«nn«l Is technically 'on
hold.* _Cl««rly, how€v«7^l^jrb«in9 supplanted byth* Hakim-
~nchann«I -- a (act reportedly known by ^^H^A and
ruaaofy by GhorbaniCar.

The arm? transactions in which Chorbanifar and
fi^trec' required tKil CK&itar.ifar pr&vidt the financii
US leqcited iKonty jr. advance of any arms delivery while Tehran,
previously burned by other would-be arms providers, demanded
shipment before payment. Thus, it fell to middle-man
Ghorbanifar to arrange the financing.

Ghorbanifar. working with Adnan Khashoggi. got some
Canadian investors to lend SIS million to finance the shipment
of Hawk spare parts to Iran. Khashoggi put up collateral to
cover at Itcs* part cf this loan. The interest or. the JISK.
tep'Veilc ir. 3: d«>f, wa: 20*. Ghoibsr.i (ai . then, would have
to pay a miratr.jrr. of $1£K. These financial arrangements were
made at the end of April -- before MacFarlane'^ visit to Tehran.

Since the loan was agreed to, Ghorbanifar claims to have
been paid only S8M. He agrees that he received S4M at the end
of July follwing the release of Father Jenco. He claims,
without proof, that only S3M can t>e applied to repayment of the
loan, the other SIK being related to a separate transaction
IwJLXhH^^^m Ghorbanifar admits to receiving SSM two or
Thrc^weeK^later . but that no additional funds have been
forthcoming.

He states he has been able to repay at>out S8M to
his creditors, including $6H to one financier --
of which SIM was interest.

He states, too, that he paid other financiers S2M
for interest charged.

Ghorbanifar asserts that he now has a $10-$11 Million
shortfall that he cannot aeet. The creditors are becoming
angry and have deiaanded additional interest because the
principal is overdue. Ghorbanifar claiias to be under
trctaei^us pressure and (eels financially discredited.

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lg«c'yfTn«iicl«l situation is mttkr*
J^BMBhaa claiMd that ha paid
IClP kn iMitional |8M in caah, an

Chorbanil
' lnd«td.
Chorbanil
assartion that cannot b« validato4.

Ragardlass of who is cheating whon — and wo aro not
likely to b« ablo to sort out thoso confuted financoa — «#«
fac* a situation where operational security has been forgotten
and no one is prepared to deal with the issue.

B»pprochwent with Iran:

0192

The broaicr, r'.ietccic ctjcctivc ho5 ttccfT.'. sober d i re ic c
tc I >it taclicai n.iiit; cf It-e Aj:*iic«r. hcrtict-: jn Lefccr.cr..
Net w; I hi tend jr.}, wt he ve ottair.ed useful insjqf.is into the
factious qoversraent of Iran.

for example, has focussed on long-terni
fonornic i nvcs tirc-nt in Iran, in addition to
arms supply.

Wc have not yet developed a viable plan of action to
utiliir thiT i r.f crff t icr . Talk atrut Cf-c - 5 1 r o'.€ - : c rclc'vjc::
j: c!ic; e-.-. Ce:>. h.e'.d cfticr.: o.'. hov t. accc-Tj 1 1 tj. ihj* art
he r cJt I tc cc-c by .

The Ghorbanifar-

Chorbanifar is depressed and claims his financial
situation has been damaged. On several occasions, he has said
he would not sit idly by and permit himself 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 hi*. We believe this account would
include statements to the effect that:

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

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

UNfilASSifJED

1052

UlivLfiUJII ILU

CIM US Cevarnacnt Md* several preait«a to hin
(Ghorbanifar) that it Cailatf to kaap; and.

tha Covarmant of tha Unitad Statas. alpn« with^
tha Govacnaant of Israal. acquired • substantial )
profit fre« thosa transactions, sosw of which I
profit was radistributad to othar projtcts of thai
US and of Israal. — '

There is TTTo likely to be material allc9in9 poor judgement and
shabby conduct by individuals of the US and Israeli governments.

I 0195

Kfc face a disaster of majcr F'<'pt 't'*"* in our effoi
with Iran despite the apparent promise of the HaAim-j
channel. Too many know too much, and exposure, at a
would dar^ecc t^e ne- char.r.«l ba^Iy, r»rhaps fatally.

Rafsanjani cannot permit himself to be seer, as
dec3:np directly with the 'Great Satan'

It IS clear from
not have total c<i'

i comments that he dec:
the Lebanese Shi a

holding the American hostages.

Because the risk of exposure is growing daily, the
following action: are recomr.ended:

(A) Establish a Senior-Level Mar.ninq Cell at the wnite
House to focus on the potential for rapprochment with Iran, the
appropriate channels to be used, and the separation of the
tactical hostage issue fro* the lon^-tcriM strategic objective.

This group could consist of two or three experts and

should be headed by soneone with the stature of a Henry

Kissinger, a Hal Sauders. a Don Rumsfeld, or a Oick
MeliRS.

The «roup should have access to all dats concerning the
LJna. iwitiative(s). includine White House records |

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(8) Develop Press Culd>nce In th« Evnt of tn E«po«uf .
We have no coordinated press guidance on how to deal Mltb 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.

Khsshoggi and the Canadian financiers are
complaining to influential US individuals.

Wc c'-:)'i roc- tf' r- ) r.: ! f -t :t ' f rrrr cr c r : r.rr.dr and c?i-ic<
: 1 r . •. r • . ' • r ■• t I -■ : r " < ' :. . i : a ' c : r ■ : '. y , r y:' c -.-'.; c
.x.:.r.<:. | 3^94

(C) Effect^ Orderly, Pa-acc- 1 i rr a t i no Shutdown of the
G " ' : b g I I I J^B^BJl Zt.ir.'.e '. . J t li ur. Jikti) wt ecu i d tonl.y
d J scred J t an^^re^^Ri ions by Ghorbanifar; he has too much
documentary evidence that implicates US officials.

ferhaps we ar. encage Ghorbai ; ( a i^ ot heiwise . in
non-hostage-related projects -- say, in the area
of Iranian, Libyan,, and Syrian sponsored terrorism.

A small working groy^ot those knowledgeable of the
Chor bani f arj^HHH^^^hannel should meet to consider how tc
ccpc with tn^^^^^^^^ . Clearly, there are some personal
things that car. be done for Ghcr bar. 1 f a r , 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 vlleviate Ghorbanifar ' s financial problems
— regardless of their merit — but may dispose him more kindly
to the US Government and lessen his inclinatTon to expose the
Iranian initiative.

UNCLASSIFIED

1054

CWa^ Ni.^fe5»vu2iV«^5

UNCUtSSinED

.o^ssi

l^hc^

> October, tftW
Evening until aldnight

Iran would pay to Mr. Hakia the price of SOO TOW
iilesl.--aud If so desired'-the Hawk parts that reaaia froa
ireeaenc.

\\% days later--should Iran agree-^five
iell as Hawks together with donated aediciues
to Iran,
fulfilling the provisions of paragraph auaber
subait the plan for the release of the Kuwaitis
persons] .

4. Ooe and oue*half Aaerican hostages in Lebanon (oae with
certainty and possibly two through persistent effort) (sic] to
be released froa the Lebanese through Iran's effort, (}«4 days
after the delivery of the cargo aentioned la paragraph 2).

5. Throug^^^ethod for opening of credit to be studied by

l^^^ethod f
iflmm toac
iitb a aaxiau

Albert *B^HHm toaor
aisslles witb a aaxiaua
delivered to Iran withl
provisions of paragraph
TOW'S (500 received and
Aikd tae 1,000 TOM'S wil
days.

6. The Uuited States s
technical support (both in ;
well as tae rejuveaatlea of
and aaps and special coaaunl
subait to Iraj^^aprice sen
delivery of |^^^H[lteas.

7. Prlo^T^^TVuru of
Muslia (Shi 'a) prisoners 1

ght: Five hundred TOV
e hundred launchers to be

days after fulfilling the
Iran will nay for ISOO

future ones),
elivered to Iran within nine

tart and iopleaent the
and expertise) for Hawks as
ary iuforaatloa (latelligence]
n. And It (the U.S.) will
and tiae taole for the

to Tehran, the questloa of
on and the process for their
release by the parties involved shall be discussed with Secord.

1. Iraa shall pursue Its efforts for the creation of
(proper] background for the release of oth«r hostages.

9. Scaps ta ha taken for the subaissi^n of Iteas aentioned

ft, second sentence.

END

<^^

SECRET

UNCUSSIFIEO

1055

[-6

mmm^

Obi«ctlvs of th« ProqfiH!

In th» abort tarm to resolv* the American hostaqa
problem In Lebanon, through the offices of Iran, to
Include

return of all presently held American hostages, and

cessation of hostage-taking;

and to accomplish this without jeopardizing our public
policy of non-negotiation with terrorists and
hostage-takers .

In the longer term to establish contacts within the
Iranian Government that might test the possibility of:

bringing about a change In the regime in Iran (or
its attitudes), thereby

establishing gradually a rapprochment between the
United States and Iran.

Ultimate, Strategic Objectives remain an alliance which
provides:

containment of the Soviet Union on a crucial flank
and preventing their move toward the middle east;

Problems with the Program:

For over a year the US Government — using private and
Israeli intermediaries — has tried to resolve the hostage
crisis by treating wijth Iranian officials; the long-term goal
of eventually restoring a strategic relationship has remained
in the background. The principal intermediary
^horban^^^^n^theprinclpa^of^c^^ha^beer

"5n returnfo^tn^shipment of American arms to' Iran, the
release of two American hostages was achieved.-

£ai5i^

mmmt

J -1-

Recede;: N^

NOV «« ^386

Coyy

1056

uimsiftEf

N 06

B«cauf« th« GhorbanlfarvB^^mpchann*!, *>*» viewed ••
slow and unreliable, the white House-? encouraqed by Seccocd
and Hakim -- haa turned to a new channel^^Th^new channel
Involves an individual purporting to be ^0H||HiH|oC
RaCsanjanl, Speaker of the Majlis and second most powerful man
in Iran.

There have, been two covert iraetinqs withi

and one in Europe. Another meeting is scheduled (o
week in November.

While the 'tone of the meetings has been generally
positive, the bargaining has been tough and the
negotiations difficult; closure remains elusive.

A problem that now confronts us^^^h^^Usposition of
the first channel, from Ghocbanifar toA^HHB This first
channel has never been shut down in a wf^tna^^ould limit the
damage to the overall initiative. Specifically, Ghorbanifar ■
claims he was never compensated for some of the arms shipped to
Iran, arms for which he arranged the financing.

Ghorbanifar and his creditors. Including Adnan
Khashoggi, appear determined to recoup their
'losses', even at the risk of exposing US covert
arms shipments in exchange for release of our
hostages.

We hav^^^e^^^ng sore for which no treatment has been
oresc^bed. JHH||H|^9has demanded tha^th^Ghorbanif ar-
Hl^^BlB chArfldl be shut j)own._p_Indeedit'^^|^IHB<:laims
already to have cooptedj

(claimed the home and office o

fiad been 'bugged', his communications with
horbanifar (and US persons) monitored

rtated that he,
proved of the wayi
heretofore. Notwithsta^
spoken of 'eliminating
future. '

sibly Rafsanjani,
'had proceeded
has
oroetmre in the

Ghorbanifar appears to be harassed by his creditors, some of
whom already have brought the problem to the attention of the
E>CI and Senators Leahy, Cranston, and Moynihan.

IM^SlflED'

1057

IJNW»

Ohorbantfar clalaa to hava sacratad, (or
'Inaucanca purpoaaa*, doeumantatlon o( avants
which hava transplcad so Car.

Glvan thia. tha major alamanta of thia inltlatlva ara
likely to ba exposed soon unless remedial action la taken.
There is no indication that the White House has a plan to
prevent the exposure or a plan to deal with the potential
exposure.

The Ghorbanifa _
way that contains poten

channel muat b« ahut down In a
9e to the United States.

Background!

When the initiative began. National Security Advisor
MacFarlane wanted to establish a channel to factlona within the
Iranian Government with which the United States might
eventually deal, and which night aacure incidentally the
release of the American hoatages in Lebanon.

Israeli officials like David Kimke put the White House
in -contact with Ghorbanifar. Working with Jacob Nimrodl and _
other Israeli entrepreneurs, Ghorbanifar introduced US
)termediarles like Michael Ledean to key Iranian officials
Ghorbanifar also established a

Jirect liniTto^H^HB^iMHIiHBHHIHHHHflH A

series of meetings ensued with negotiationa sometimes appearing
highly positive, sometimes near-disastrous.

One hostage was released in September, I98S, as a
result of thiS'Channel.

A breakdown ocurred in Geneva, in late November
1985, when the Iranians accused the other side of
knowingly delivering the wrong version of Hawk
missiles to Tehran -- an accusation we believe and
for which we blame Nimrodl, if not Ghobanifar.

Progress appeared dramatic In May 1986 when a US
delegation led by MacFarlane secretly visited Tehran. The
results, however, were disappointing. The Iranians were not
prepared to deal directly with so high level a delegation.
Still, another hostage waa released subsequently. In late July.

Another channel, potentially more promising, was just
then opening up through jrivate efforts by Albert Hakim and
Dick Seccord^ Throuohl^BB^^representative of the Iranian
Government/sHMHHi^^lameetlng was held In late August In

mssm

1058

gumgi

uNwra

N 08

Brussels «'i^>)||H^HHH^^^^^^|i^BMajlis S
R^^^njanl. mis, In turn, led to two meetings between|
■^^■■and VS officials, one meeting in Washington, the
InFraflkfurt.

peAkei
ocnet

Ghorbantfar's Alleged Financial Straits;

The Ghorbanifac^^H^^I channel is technically *on
learly, howeve^^^ls being supplante^^yth^Jaklra-

^ fchannel — a fact reportedly known b)flHH|^Hand

presumably by Ghorbanifar. ^^^^^^^

The- arms transactions in which Ghorbanifar and
figured required that Ghorbanifar provide the financing
US required money in advance of any arms delivery while Tehran,
previously burned by other would-be arms providers, demanded
shipment before payment. Thus, it fell to middle-man
Ghorbanifar to arrange the financing.

Ghorbanifar, working with Adnan Khashoggi, got some
Canadian investors to lend $15 million to finance the shipment
of Hawk spare parts to Iran. Khashoggi put up collateral to
cover at least part of this loan. The interest on the $15M,
repayable in 30 days, was 20\. Ghorbanifar, then, would have'
to pay a minimum of $18M. These financial arrangements were
made at the end of April — before MacFarlane's visit to Tehran.

Since the loan was agreed to, Ghorbanifar claims to have
been paid only $8M. He agrees that he received $4M at the end
of July follwing the release of Father Jenco. He claims,
without proof, that only $3M can be applied to repayment of the
loai^gUjeo^er $1M being related to a 'separate transaction
witt^^^mm^ Ghorbanifac admits to receiving $SM two or
three weeks later, but that no additional funds have been
forthcoming.

He states he has been able to repay about $8M to
his creditors. Including $6M to one financier —
of which $1M was interest.

He states, too, that he paid other financiers $2M
for intetest charged.

Ghorbanifar asserts that he now has a $10-$11 million
shortfall that he cannot meet. The creditors are becoming
angry and have demanded additional interest because the
principal is overdue. Ghorbanifar claims to be under
tremendous pressure and feels financially discredited.

mitmB

1059

BNGtASSfFlffi

N 09

Ghorban^jr^iflfl|ncial situation is murky,
indeed. ■HUlHV''*' claimed that he paid
GhotbanTia^anaddltional $8M in cash, an
assertion that cannot be validated.

Regardless of who is cheating whom — and we are not
llKely 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 American hostages in Lebanon.
Notwithstanding, we have obtained useful insights into the
factious government of Iran.

|for example, has fociissed 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 Ghorbanifa<

Ichannel :

Ghorbanlfar is depressed and claims his financial
situation has been damaged. On several occasions, he has said
he would not sit Idly by and permit hiiTiself 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;

1060

DNetASSIFIED

N 10

the US Govarnment mada ••v«t«l protnisas to him
(ChorbanUar) that It failad to Reap; and,

tha Government of the United States, along with
the Governnient 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 likely 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 our, effort
with Iran despite the apparent promise of the HaXin
channel. Too many know too much, and exposure, it
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(^^H|^|^Bpomments that he does
not have total control oveT"^e 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-tern 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
He 1ms .

The group should have access to all data concerning the
onqfljjiq Inl tiat ive(s) , Includina White House records and
ther^

1061

UNCLASSIU

(B) 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 Ghorbanlfar was involved in it.

The Israelis have exposed some of this.

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

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

(C) Effect an Orderly, Damage-limiting Shutdown of the
GhorbanifaoJ^jUBchannel. It is unlikely we could totally
discredit an^rev^^Uions oy Ghorbanlfar; he has too much
documentary evidence that implicates US officials.

Hakim has suggested that means be found to *buy^
off* Ghorbanlfar.

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

A small working group of those knowledgeable of the
Ghorbanlf ac^^H^H^hannel should meet to consider how to
cope with th^^^oblem. Clearly, there are some personal
things that can be done for Ghorbanlfar, 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 Ghorbanlfar '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.

msstfito

1062

t: :t::s ""mmmmn *-*"'-i^3

\mmn

M£?iORANIXIM FOR: Vice Admiral John M. Poindexter, USN
Assistant to the President for
National Security Affairs

SUBJECT: Roy Furmark's Coiunentl on the Hostage Situation

^ I 0195

1. Qiarles Allen and George cave went to New York on 22 October 1986 to
meet with Roy Furmark. This was an extremely interesting meeting in that it
revealed that the financial backers of Ghobanifar have been aware of the
operation since its inception and may actually have played a key role in
getting it moving, possibly for altruistic reasons, but alinost certainly Cor
their own profit. Roy himself admitted several times during the evening -that
profit was certainly a motive but that the group did see their efforts as
leading towards stability in the region and the release of the hostages. Roy
appeared to be very open during the course of the evening and everything he
told UA tracked with what we know. The only doubtful answer he gave was in
/ reply to a question as to whether some of the principals were involved in the
sting operation. Roy said that none of the principals were involved, however,
one of the players, lawyer Sairuel Evans, was the major indictee and is free on
$4.5 million bond. Roy claims that Bvans owes him $200,000.

2. Khashoggi has been involved in this from the beginning as O>obanifar's
financier. Everything started in January 1985 with a meeting in Europe,
Frankfurt apparently, involving Qrabanifar, Khashoggi, Roy, and others. This
was followed up by subsequent meetings in Paris and London. Ihese meetings
culminated in a neeting in August 1985 in T*l Aviv. Roy went to 1*1 Aviv with
Oiobanifar and while there they stayed vith jjiacfidi-in his house. During the
course of these neetings, Roy met Arairan Nir. At this meeting it was decided
that it was necessary to get Washington's approval for the overall plan.
There were two basic objectives; one, get release of the hostages, and two
open up a dialogue with Iran. Schimmer was sent to Washington to obtain this
approval. Roy is uncertain as to whether he discussed this with North or
HacFarlane in Washington. Oiobanifar also made a total of four trips to
Washington. Q)obanifar represents the line held by the Prime Minister which
Roy describes as 'Moderate.* (wc did not tell him that the Prime Minister
could not be considered as Moderate.) By way of personal relationships, Roy

r* "^ tS. 3536-86

Partially Cpc,-.;'.;r"i.:r.:D--^a\*,<Jl3r7 . ' Copy 1 of 2

^-n^er r::_ ;:;.r.: of E J. 12355 CL BY SICND»

oy J. Keger, ..:ii;:al Security Council DECL OAOR Fm SISR vol I

UllClASSmED

1063

mtmin

said that "h€ has known Khashoggx since 1966 and trusted hun. Roy added that
SchiJtr«r ^'^ Khashoggi are close. Roy thinks this points up Khashoggi's
breadth of vision. Roy pointed out that Schiiimer had actually returned from a
visit to China to make the August meeting.

3. Bie first transaction was in Septeinber 1985 and was for 500 TOWs. The
cost of the TWs was $5 million. Khashoggi put up the money because he
believes in Ghobanifar. The cost to Iran was $6 million. This allowed for $1
million to cover profit and expenses. The first shipment of TTMs was
defective, so a second shipment was sent. There was a subsequent $5 million
deal that went off in the November-Decentier timeframe. Khashoggi told Roy
that they were no: involved, but Roy is certain that this was a ni QA
Khashoggi/Qiooapifar organized deal. I U 1 -^ O

A. Roy said that prior to the next deal, there was a meeting in the Pans
airport hotel; he forgets or never knew exactly who was involved in this
meeting. The meeting concerned Hawk spare parts. The deal for the Hawk spare
parts began to be put together in April 1986. Khashoggi raised $15 million to
cover the deal $5 million from an Arab financier, and $10 million fron twj
Canadians. Khashoggi raised the money on 15 May. A group of Americans went
to Tehran and took with them seven percent of the Hawk spare parts which
consisted mainly of nuts and bolts, with regard to this deal, the financiers,
Qiobanifar, and Nir met and agreed that $3 million would be added to the price
to cover profit and expenses and also another $2 million would be added to
cover monies owed to Nir. The price to the Iranians would then be $20
million. (Why did Qxjbanifar charge $24.5 million and with Nir's knowledge?)
Neither Roy nor the financiers apparently know anything about the raise in the
price by Ghobanifar, although they are aware that the Iranians objected
y Strenuously to the price. Qiobanifar told Roy and Khashoggi that he believed

y the bulk of the original $15 million price tag was earmarked for Central

America. In this regard, Oiobanifar told Roy that he was relieved when the
$100 million aid to the Oontras was passed by Congress.

5. The above rehires clarification. In Tehran, Ghobanifar took Cave
aside and told hia that the Iranians would be questioning him about the price
of the Hawk spare parts. Oiobanifar told Cave to insist that the price of $ii_
million old dollars is correct. When asked about the huge jack up in price,
Nir gave « long circumlocution on why the price of over $24 million was
correct. We were so concerned about this that we considered telling
0)0banifar exactly how luch he could charge on any subsequent deals. From
Roy's conments, it is clear that the .ZILpercent interest Qtobanifar told us
about is in fact th« gross profit margin agreed upon.

6. Roy said that Ghobanifar told them that he received two payments, one
for $3 million and the other for $5 million. As originally agreed upon, the
Arab investor was supposed to get back $6 million for his cut and the
Canadians would get back $11 million. The other $1 million was to go to
Khashoggi. Q^obanifar's cut was to come out of the $1 million. To the $8
million that Ghobanifar received, he added $100,000 of hit own funds. The
Arab investor was paid off ($5 million), the two Canadians received $1.1
■lllion. Roy was not sure but presumabiy the $2 aillion went to tiic.

iiNHi Afifiinrn

1064

ONClftSfflED

0197

Originally/ the Canadians were given a check by Khashoggi in the amount of $11
million to cover the $10 million they provided Khashoggi. Bie monies to cover
the fSawk shipnent were paid into an account of a conpany called Lakeside which
is an off -channel company. The Canadians believe that the money was stolen
and this is giving Khashoggi heartburn. (Note: This does not square with
what we know. We know that Ghobanifar received $4 million from the Iranians
in July. He also received $8 million into his Swiss bank account on
21 August. These two payinents were cash. He may also have received a check
for $6 million in between these two payments. The Iranians raised a big stink
about the price of the Hawk spa*«^^t^and Ghobanifar offered them a $6
million deduction. According ^^nfl|^9^ ^^^^ ^8 million payment on
21 August sc-jarei?^^eiraccojnts witnaiooa-.ifac by mutual agreerenc. In
fact, accorcirc ^°Vffl|i^ *' million covered the rerainder of the deal, !.'-,•=
other million was t^iel^aiobanifar finance the next deal.)

7. Roy's suggested solution to the problem is to let Ghobanifar handle
the shipment of the remainder of the Hawk spare parts. Proceeds from this
deal would allow then-, to ease the Canadian pressure. Then it would be 500
TOHs for one hostage and another 500 TX>Js for a second hostage. »

Sincerely,

Willian ,J. Casey

1065

wmm

C 4019

24 r«bru«ry 1M7

Cav*

•nd tooth Asia Division

Tbs racsi eonvscsation on tap* •i9htj
rscerdinf of Cavo's aovaabcr 2Skb call tol
in «fbich Cava proposes a Baatint in Barepo
Itata oapartaank ofCicar will also participat*. Ttia aiaet tin*
•nd plaea of tha •aatin9 to b« sat in • futura phena call.

^__ ily ccMwnk was that MUha aaatinq w« qiw' thaa a

in9 on tha "ataosphara" in^H|i"9^on. ^

Gaor^a N. Cava

i ^

ower pfonsFOr.s o» £ 0 I235S
6/ K Jonnson. KaiKjnal Sicumy Council

KARNING NOTICE
INTELLIGENCE SOORCES
OR METHODS INVOLVED

ji^j4^/}

1066

Tkt Oumar rfCoiiral iMtflifcacc
Vi*ai«.OC SHI

C 0^532

nCM:

3J&7BCT:

NIC 05623-66
12 Oeceaiber 1966

of Central Intelligence
Director of Central Intelligence

es E. Allen
tional Intelligence Officer for Cotnterterroris

Teras of Reference for C&ve/Dunbar Discussions

1. Th« tenia of reference (TOR) approved by Araacoat foe
iscussions with the Iranian Re^rolut
rankfurt — if iqpleaentad— will eff<
n the TOR, the Oepartaent aaJces it
or tha exchange of intttlligence,
ince there is little that we can
ttelligence on the Soviet threat —
jch interest, giv«n their alxost
£ the TOR, it is clear that the Oe]
institutes an intelligence exd^ange

,ve/IXnbar

Guard leadefj^H^^^H ^

shut down tn^rSn^nitiative.
that this channel can oily be used
other substantive exchanges.
Iranians— other than
ans are unlikely to find this of
iption with Iraq. Ftaa the tone
is very narrowly defining «4ttt

2. Uhless the Departsient has a i^^^fcfined alternate strategy and other
able channels to pursue, closure o^Hg link would be presature and a
rious Bistake. He have reason to believe that this channel ruu directly to
fsanjani and that it probably is relatively reliable. It has been
strunental in securing the release of one Aaerican hostage and, givan tlw
lividuals inMolvod, aay be key to effecting the release of edditional
stages, the individuals with lAtao we have been dealing, aoraover. clearly
It rapprodMBent with the united States, they recognize that.&an has been
nonically devastated by the war and that it will require Hestem financi&l
ipozt and technology to faoowar.

3. I believe it is iiyeratlve that the TOR be indified
rhanges on issues bcoadar than intelligence and that a des

icer should participate in these discussions. Mo one
ing the lead in the Iranian initiative, but acceptance
rently constituted, would essentially end any useful d
foreseeable future.

(@)

CiiNJ M033

llWdASSlElEE^^^^^ S

1067

UNCLASSIHEB

^ 0-9533

Material Not relevant to time period.

UNCUSSIHED

18.224-18,228

1068

«— _ t<.^>— : '■*ae^>^>^^

-) ^^ Vs^^jsc^^,^ W..^.v ^^««..«a^

^'^^IsAA'^ioo.tfet* ^^^ ^«. ^S$8JZr -Ti^s

SHS^

Partially De:l3Ssitied.'Released oo^ I ^-

unde' ofovisions ol E 0 123bS

by K Johnson. National SecjMlv Council

UNCLASSIFIED

1069

MHSaffr

€.v^^ !/c

ONCLASSra

1070

-....ONcussife

Translation by Albert Hakim of
the Parse Original of the "9 Points'

Note: The date is the 16th day of the 7th month of the Iranian
year which I believe corresponds to 8 October 1986, but
needs to be checked. It also indicates the discussions
started in the afternoon and lasted until late at night.

Summation of Us and Hakim

Iran provides funds to Mr. Hakim for 500 TOWs and, if
willing, Iranians will provide for the Hawk spare
parts which remain from the previous agreement.

Nine working days from now the 500 TOWs and the Hawk
spare parts (if accepted by Iran) and the gifted
medicines will be delivered to Iran.

Before executing Item 4 below, Albert will provide the
plan for the release of the Kuwaitis (17 persons).

1 1/2 (1 definitely and the 2nd with all effective
possible effort) American hostages in Lebanon, through
the effort of Iran, will be released by the Lebanese.

Using the Letter of Credit method, (three to four days
after delivery of shipment stipulated in Item 2)
additional 500 TOWs (together with a maximum of 100
launchers), within four days after the execution of
Item 4 above, will be delivered to Iran. The method
of Letter of Credit will be reviewed between Albert

and by tomorrow night. Iran will pay

the funds tor 1500 TOWs (the 500 TOWs mentioned above
plus an additional 1000 TOWs) and the 1000 TOWs will
be delivered to Iran within nine days.

The United States will start with the technical
support of the Hawks (material and know-how), update
of the military intelligence and maps, establishment
and commissioning of the special communication link.

Partially Dsc!.U3itied/Re'sased m jili \ 'yfc
under diovisiops oI E 0 1235?
by K Johi:son. National SCLutrty Council

^®

1071

(CAVf)

^5^^

n-^

Ora^ H .^FcoMfljV^-^

UNCLASSIRED

.09S41

(o/^M

8 October, l^l'W
Eveninc until aidnight

Iran would pay to Mr. Hakia the price of SOO TO^
.llesl.--aud If so desired--the Hawk, parts that reaain froa
Lous agreeaent.

tg days later--should Iran agree--fi*e
iell as Hawks together with donated aediciues
to Iran,
fulfilling the provisions of paragraph nuaber
4, AlbTW^^n subait the plan for the release of the Kuwaitis
( 17 persons] .

4. One and oue-half Aaerican hostages in Lebanon (one with
certainty and possibly two through persistent effort) [sic] to
be released froa the Lebanese through Iran's effort, (3-4 days
after the delivery of the cargo aentioned in paragraph 2).

5. Through_Alafi^od for opening of credit to be studied by

fith a aa]

Albert sixlHHI^I toaorr,
aissiles with a aaxiaua
delivered to Iran with!
provisions of paragraph
TOW'S (500 received and
AJid tae 1,000 TOW's will]
days.

6. Ttie Uulted States sh|
technical support (both in g
well as tae rejuvenation of
and aaps and special coaauni
subait to Ira^theprice sen
delivery of H^^H[^'**s*

7. Prio^t^^eturu of
MusliQ (Shi 'a) prisoners i
release by the parties involved shall be discussed with Secord.

8. Iran shall pursue its efforts for the creation of
[proper] background for the release of other hostages.

9. Scaps to b« taken for the subaissi^n of iteas aentioned
^i^'IVillt ^> second sentence. ' i

ght: Five hundred TON
e hundred launchers to be

days after fulfilling the
Iran will nay for ISOO

future ones),
elivered to Iran within nine

tart and iapleaent the
and expertise) fcr Hawks as
ary iuforaation ( intelligsnce]
n. And it (the U.S.] will
and tiae taule for the

to Tehran, the question of
Hon and the process for their

in pai

CiJ^K

END

SECRET

ONCUSSIFIED

1072

UimSlflED

NIC 05060-46
3 Nov«nt>ci 1986

MDIORANDUH FOR: Director of Omtral Int*lli9«nct
FKM:

SUBJECT:

Charlts E. Alltn

National Inttlligenct Officer for ODunttrttrrorim

Frankfurt HMtings

1. Bud Macfarlarx'i trip ii becaning known.

saidHJIIBiHlHHHHiPHHHHHft*'''*^ ^^ aboul Bud'a
visit. lh« probleDateMfrartntradicaTinrounS Hontazari taking action.
th«y have oonvincvd ^hia that this was bad for Iran. Int«r*stingly tnough, it
turns out that Orabanifar told Hontazari about all tht transactions and kept
hiat britfad on what is going on^- It turns out that Chobanifar and Hontazari
have been friands for IS ytars.^lA said that tht rtasons for tha failure of
the Bud trip w«re several. One was that the trip had not been fully
coordinated at the senior level. One of the problems was Orabanifar's
presence in t^hranandUB role he played. Host people do not trust hijD, but
he has con^nced^MIMythat he has a lot of influence in the Onited
SUtes. ^BJIB^ ^>** * ^ot of f^th in Chobanifar. Ihe other pcoblem was
Ami ran Hir's presence t« yahran.-^MMMPtold then who he_
cover his backside. ^HMV arq

was sonsone tBa^n^^nouI^ise. ^ci^|H^^^ coments,

»was giv«r£o believe that Qwbanifar was ^ite a powerful' aan. With
further regard to Qwbanlfar and his threats, Rafsanjani has proposed inviting
his back to Iran and ke^ hia there several aonths working on things. They
can keep hia based on the fact that there is an order for his execution. ^A^ <
said that they do owe Oiobanlfar |10 aiUion, but be also owm than 1,000 t^
TOWS. 9m problea for us is that he has been involved in nany deals and we do
not know how

wm t^xn]\

1073

y<'

UNCUSSIHED

imin^f th« ulks wt htvt
L^IHI*^ prtMurtd thM> intfl^
'MtToTinMlons with thtHHjBB

3. Ollj* North Mid that sine* the btgimin^t th« talks wt htvt taktn
c*rt«in politicdl actions, /m havt ulkcd t^|^Hand prtMurtd
curt£ilin9 agsa fcilait to yaq. wt havt optnt^ofloiMlons with thtl
■"■"""'■^~' TP Mid that thtft wtrt four isauts that

Cin, but firat ht wanttd to aay that nxxntini has

agts

art prisoners. 'S^i.% haa ehangtd tht attitudt of tht Lebanese captors. ^11 C^
saitf that tbiy wish to tablt tht following points for discussion: ^^

A. How to procttd with our rtlations, and rtlations with othtr statts
in tht arta.

B. Want to arrivt at a Joint undtrstanding as to why things art
procctding so slowly.

C. Bt wa/its to -explain and clarify his own rolt in tht ^tration.

D. Bt wcints both sidts to tngagt in an analysis of tht stcurlty of
tht optration.

Zn this instanct wt stattd
fogray >
and thty sust also aovt fast, too. ft^Fiaid that ht has full trust in tht
group ht is dtaling with and wants to txplain tht problaai of coordinating
things in tht Iranian Govtrnnent. Wt sust undtrstand that this is a ntw
rtvolutionary govtrrancnt. Afttr Xhomtini, it ia like a corporation. Thtrt
art thrtt wings in tht govtmwnt. Ont wing is tht fanatic wing (Itndro).
Ihis wing ia actually dividsd into two groups, ont of which is txtrtnaly
fanatic and tht othtr which is Itss so. Tht stcond group is tht Hiddlt
Itoadtrs. lUfsanjcni is tht Itadtr of tht Hiddlt Roadtrs. Ihis group
functions as tht bri^ bttwttn tht fanatic group and tht right wing group.
Tht right wing grctjp leans towards tht Wtst in tht stnst that thty want frtt
trade and a democratic govtmsant. Ittft sust bt undtrstood is that all thrtt
groups art atrongly IslsKic and want an Zslanic govtrnottnt although all thrtt
approach thia difftrtntly.

5. t^^a4id to undtrstand tht govtrnmtnt proctss, wt aust know that
Khcntini has givto to Xafsan)ani tht rtsponsibility for Bsnaging tht war and
fortign affaics^ This is wtiy bt is usually rtftrrtd to as tht msnbtr tw
Bian. Wttn^HlB^first brouf^t up tht issut of bttttr rtlatij
OS^^agsanjani tqrttd. but said that all grc

rsanjBfli tnsistto tnat ttytastnLativts

group* should takt part in this pcograa. Afttr considt;
in tht cabintt and also tha Ha)lis, a position was rtachtd
took it up with tht Isiaa who gavt his approval. Rafsanjani's poal

oonsidtr^l^^|t^^
i'sH^R^Wha^

ATTiAi ^n:iUiL

Wii

'/SPSJTI^

1074

if th« policy miee—iiM, all will shart. On th« samthAnd ff it ftilt »ll
will 4l»o chart to no on« can conplain. Iha problta is on* of coordination

b«tw««n nmi tr iiiM ^1 atattd that tha last shipntnt of TOte^

•llminacas thtfWMI^^BHchannal and tstablishts his 9roup. akTaid
that tha Iraqi Information was vary wall ractived in l^hran. ihjs anablas
th«n to fore* th* cabinat to focus on th* hosta^* situation. B»r* is
howevsr, sow confusion in Tehran. '

ly fanatical Bii

____, ^_ ^^* gtcup is Mall, vary

radical, and wtit*^; stay publifiiad a naw^apac in tihich thay ravcalcd that
tha Phi tad Statas and Iran art eooparating in 9*ttin9 th* hosta9es r*l*as*d.
^^I^said that at th* Bonant they hav* no bard infomatlon on y*>o took tha
othar two boctagas, but b* susp*cts that it could b* this radical Hizballah
group.

C-
8. In on* of his nany asidas to Clarka^^pF aaid that ba tfas conccrnad
about North 'a dasand for rclaasa of all th* hostages. Ihis could b* a problem

■- -. t y /

1075

9. ^^ said that^^HHwculd bt arriving in Europa on 31 October.

said that they want to aovt things along and hope that th« rtlaaae of two itore
hostages will h«lp. His ptrcaption in Tehran is that the American leadership
is in fear of moving things along too fast. Swy interpreted our original
s«v«n poinu as a demonstration of extrens caution. Dm OS side defended this
caution by pointing out that th« bottoa line is that they released two then
took two more .^^^41^ added several points he wanted to discuss as follows: _(r__
Kuwaiti prisoners, cameras for ltf'-4's, and a list of Rwenix spare parts. ^|^
said that the Iranians have 70 Fhoenix missiles which are inoperable and in
need of spare parts. Rafsanjani himself is personally interested in the
Riocnix problem, ihis is because the Iraqis have enormous respect for the
Rtoenix. lh«y need help to repair the missiles on hand as they know it is
impossible to obtain new ones, ftchnicians to help on the Shoenix missiles
would be se«n as a very positive step in Tehran and could well resolve the
whole hostage problem. BBBB*l»_—^th*t they have enough TOUs for
current operations.. At this point^lfviphasized that thfsending of things

to then have proved the US' good intentions. He told mS>Mt it might be
sane time before we could organize the technical support they needed, but we
thought such support was essential as their orders foe spare parts do not make
sense. In fact General Secord believes that it saneone wre to get into their
logistics system he could jrobably locate large nuntiers of ^ares that they do
not even know they have. ^P'ilso asked if we could do anything about the 20
Qiinooks that have been embargoed in Italy for three years. Die FBI is also
holding $20 million that Iran went to court for and won the case. We asked
him for additional information on this case and some documenUry support so
that w« can follow it up.

10. In another aside, ^^ stated to Clarke that they feel they must have
pilotlcss drones to give them the kind of intelligtncc coverage they need. He
wondered if they could buy som from the Israelis, this may be afynni|^or
Illr^JHklso told us abou^^^HHBradars they are buying fr^HHB

I^^^HAlthou^h they are supposed to oe deployed to cover the Soviet union,
TnaSnihe technicians are installing tbea along the Iraqi border.

11. ^S said that a feur-aan comittee has been foraed in Tihran to
oversee thaic relations with the Qhited States. Sicy are as follws:

drxA> ^oA(fi</^

'*^ii^/s«g^^;/[|

»MJd_that th« Mf) thty ultlaattly want, to M«t with tnlor_DS ctficial* i«
in a^B^^HHBI^nd • Bodtrat*. Bt ii

ro^in this is soatwhat foggy .^
la tM only ont oc^cnv (our that knows of his talk- "Of bast My to dascriba
hia is that ha is Kafsanjani's window on tha oparation.

Otarlaa B. Allan

/I TTk\^O^f»*^

;^?l£LiiU'iHS

1077

STENOGRAPHIC MINLTES

N«t for Qootmtloo or ^ fSp HSITS 0<^^^ fZt

'^ UHCflSSIFIED

Deposition of

Select Coiimittee to Investigate

Covert Arms Transactions with

Iran,

U.S. House of Representatives

Washington, D.C.

Friday, May 1, 1987

Committee Hearings

of tk«

U.S. HOUSE OF REPRESENTATIVES

(g^

OFFICK OF THE CLEKK
OOc* of Ofldal Rcportcn

UNCLAS£%D

*— ^ -^i ™ ■» .COPtI

1078

URCLASSlFk

Deposition of

Select Committee to Investigate

Covert Arms Transactions with

Iran,

U.S. House of Representatives

Washington, D.C.

Friday,, May 1, 1987

The Committee met at 10:00 a.m. in Room B-352 Rayburn
House Office Building.

Present: David Pearline; Tom Polgar; Kathleen McGinn;
Paul Barbadoro; Neil Eggleston; and Richard Giza.

UNCLASSIFIEI^

1079

DNCtllSmHIIfiL'

Whereupon,

havinq been first duly sworn, was called as a witness herein,
and was examined and testified as follows:
EXAMINATION
RV MR. BARBADORO:
Q' Could you state your full name for the record,
please?
A

Q . Have you used code names in your capacity as
Chief of the Central American Task Force?
A Operationally aliases, yes.
Q Could you tell me what those names were?
^^^m|HH|^^|^^^^^^^^Hf used
with the Nicaraguans and for travel outside of Nicaragua
to Central America to include!

used only to travel
exposed outside that.

Q Did people here in the United States know your
[alias?

A It is pretty widely known, yes.

Q Did Oliver North know you i^^^^^^l alias?

A Yes.

Q Did he ever refer to you a

iiUCLASSIEJR

1080

li^^iSS^ff

To me or to other people?

In your presence.

Yes, I think as best I can recall.

Q When did you become head of the Central American
Task Force?

A 9 October, or thereabouts, 1984.
Q What did you do immediately prior to that?
A I was on a brief stint with the IG staff doing a
routine inspection o

Q And prior to that?
A

How long were you'

Three years, 1981, roughly June to June, 1984

During the time that you wen

{were you involved in any solicitations of

'to provide money or

assistance to the contras?
A No.

Q During that time were you aware of any solicitations
by any U.S. Government official tc^^^^HHH^^o provide
money or assistance of any kind to the contras?
A No.

Q During that period of time were you aware of any
offers that were made by anyone in^^H^^^^^Vto anyone

anyone i

JlMCl ASSKISA

1081

'GflffLASSSffilS'

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

in the United States Government to provide money for
assistance to the contras?

A No.

Q
United States Government .Jppgoaohel
^^^^^^^l^to request aid for the contras?

National Security Advisor McFarlane says that he approached
)r discussed

Have you since learned that people in the
>nt .appgoaohe

I have

heard speculation at various times — I heard speculation at
various times that^|fl|Hwnoney may be going to the contras,
but the first time I really knew something that would be
official or definitive was the announcement by McFarlane.
Prior to that time I just heard rumors that were floating
around town.

Q Can you recall from whom you heard these rumors?

A I can't. Rumors occasionally came up in the
newspapers and were speculated on, but no one was whispering
saying so and so was gettino somethinc from the contras.
As you speculated as to where funding for the contras might
be-coming on that focused <^tKKI^EWm'^^ ^ country with
big bucks.

Q Did you see cable traffic or CIA intelligence
reporting suggesting that the contras were receiving support

lUJ^Mvl. *«rwiiCslLtl'

1082

lim«§im»

2
3

,5
6
7

9
10
11
12
13
^4

1(
17
18
1^19
20
21
22
23
24
25

A Not that I recall.

Q Did you discuss with Director Casey aboul
^providing assistance to the contras?

A I think that as we looked at or discussed the issue
of where private funding could come from if we got
approvals to solicit funds from third countries, and at some
future date -- I said I 1. 1 ^FijijIil^^^^^^^^^^Mwould be
willing to participate based on my knowledge of them and
where they were coming from but that was always in a
future context of if the law changed and we could solicit.
In discussions at the RIG meetings that took place,
particularly after State Department was authorized to get
into the game of solicitation in the 1986 time frame* I, a
couple of times.

fand othe<
as a potential donor and said if CIA made
the approach I was pretty sure they would provide such
funding.

I mentioned sMM^^^^^^^^^^^Has an intermediary
witfl^^^^B which has a lot of money, but you can only do that
througifl^^^^^^^^^B They follov^^^^^^^lead.

But never in terms of money is going to the contras frori
[or ongoing solicitation.
Q You have described discussions with Director Casey

in which you mentioned the possibility that!

4iAClAS5IH£ft

1083

20
21
22
23
24
25

i9mis$i^i

1 might be a government to approach for aid to the contras.

2 When did those discussions take place?

3 A They would have taken place in the spring of 1986

4 or thereabouts when we were contemplating what would happen

5 in legislative changes looking at future planning. I don't
5 remember the specific discussions, but I am sure I

7 mentioned that.

g Q Do you recall any discussions of that sort in

g 1984 or 1985?

1Q A rjo. None that I can recall.

^^ Q And your discussions at the ^^^ meeting about
^f^^^^^^^^^^^^^HiafA discussions that would have occurred some

-)3 time in the Spring of 1986?

A Or in the late fall of 1985 and they were

•^5 informal musings, not serious planning.

Q In 1984 and 1985. what did you understand was the
situation regarding the legality of CIA officials being
involved in soliciting aid for the contras from third
^g countries?

A That it was illegal until October 1986.

Q What is the basis of that understanding?

A That is statutory language in the Boland Amendment
and its subsequent successors governing aid to the contras.

Q Do you recall reading any memoranda prepared by
OGC attorneys discussing whether soliciting aid from

imfil A&SJCICA.

1084

imcixssiPiii

1 third countries would be legal?

2 A I don't specifically recall reading one. Vaguely

3 in the back of my recollection I think -- and I emphasize

4 think -- that this was a discussion when we were first

5 looking at the Boland Amendment in the fall of 1984 and

6 figuring out what was legal or not, what we could cr couldn't

7 do.

8 I think that was one of the topics that was

9 discussed at that time, but it was clear from the statute

10 and from consultations that it was not legal from 11

11 October 1984, the implementation date of 9 October 1984,

12 until the current legislation was enacted in October of 1986.
\^^3 I think it may have been discussed^to answer your question.

14 Q Okay. Are you aware of any overtures that were made

15 to third countries for aid to the contras by anyone at CIA

16 between January 1, 1984 and the period in time you ]ust

17 specified in 1986 when it became legal to solicit aid,

18 are you aware of any overtures by any CIA official to

19 solicit aid to the contras from third countries during the

20 period of time when it was not legal?

21 A I am not aware of any such direct or indirect

22 sort of solicitation by CIA officials.

23 Q Let me —

24 A No one has told me and I don't have any reason to

25 believe that anybody went to anyone and said will you do

lUMIN iieMEWHta

1085

lWeLX5fll«l

9
10

12
13
14
15
16
17
18
19
20
21
22

this or that or can you do the other thing,

0 Let me ask you about specific countries. Do you

whether anyone from approacheS^^^^^^^^^^^^^^H
request assistance for the contras from
January 1, 1984 to December 30, 1985?

A If you were to ask me that question two days ago,
I would have said no, but I have subsequently learned that
some time^nd this is hard core hearsay, some time in the
spring of 1984 one CIA officer did go t^cfl^^^HH^f^Lnd
perhaps discussed the issue.

Q Is the basis of your knowledge a memo from the
Director to Robert McFarlane that discussed that?

A The basis is a discussion that came from having
seen that memorandum and a discussion of testimony that
may have taken place.

Q Do you know who that officer was?

A I know who he is alleged to be and I want to
emphasize this is hard core hearsay. I didn't know this
until a few days ago and have never heard it from the
officer himself.

Q Who have you heard it from?

A From my compliance officer and my staff that
processed the papers and he said did you know that, (lipid I
said, no, I didn't, and I -- that is sort of the way I heard

IIUAJ ■ffcoiriri^

1086

2
3

17
18
19
20
21
22
23
24
25

Q Okay. That isi

A Yes.

0 Do you know of any approaches that were made t<^^^|
Ito obtain aid for the contras during
the same time period by any CIA official?

A Not during the time period iw question, no.

Q That would lead logically to the question of what
period of time are you aware of such overtures?

A The Director had discussions with interlocutors
who were f rom^^^^^^^^^^^^^^^^^^^^^Hbut who

with^^^^^^^^^^^^^^^^^^^^Vaf ter the
legislation of October to review whether or not they would
be willing to provide assistance and one of my officers
went to New York to meet with the individual in question,
and then when the Director took sick and the investigations
began* we didn't pursue it any further.

Q Give me your best estimate of the time when these
overtures were made.

A Late October, early November 1986. It would be a
matter of record in the agency. I don't remember specifically

Q Who initiated this overture to these interlocutories

A Director Casey, and ther^^^^^^^^^^Vfrom my
staff made the trip to New York for the meeting.

Q Was this after the time that the Congress had
voted $100 million in lethal assistance?

/»« i* >

UNCI LCJUEICA.

1087

A Yes, and to the best of my recollection, after
the legislation had been signed into law because there was
a good deal of discussion by the Director of the propriety
and legality of the move at the time. We discussed can we
do this thing now, that kind of thing.

Q At that time were there any discussions with the
Director about earlier approaches to^^^^^Khat had been
made by anybody to solicit aid for the contras?

A Not in my presence.

Q Are you aware that General Singlaub approached
os^^^^^^^^^^^^^^^^^^Bto for

the contras?

A I have heard that.

How aboi^B^^^m^mm^^^^^^^^^^^^are you
aware of any overtures by any CIA officials to obtain
from^^^^^^^^^^H^^^^^^^^^^^^^Vfrom January
October of 1985?

A No. I am not aware of any such overtures.

Q Do you know whethei
was provided money or support to the contras?

A I don't think they have. I don't know that they
have and it is my recollection of the intelligence over the
past couple of years that they haven't. But I am not
certain about that. I would have to go back and research

that.

■ • i<Wr^fc«sdF • S*"

MMPi itgirirn

1088

UNCLASSIF'.EO

«'>'/v.'i^si??i;n

1089

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^TjTT-rr- ae

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ElCJlt^srea

1092

'mimm

another assignment; and I said can you tell me what it is' and
he said no, not yet. I said, well, if you think it is
important, whatever it is, I will do it, but you know I

to be^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Vand two or
three days later I was called by Clair George and told I was
going to take this assignment. I was not given a choice.

Q Did either Clair or Director Casey explain to you
why you were chosen for this assignment?

A Not in specific terms, no. I mean, subsequently
it was sort ,of said that I was a person that had the
operational mix of experiences they were looking for, and
was a person that the Director had confidence in and they
thought could do the ]ob.

I think it was important -- the operational mix
is important because there aren't a lot of officers who have
both agency, FI experience, military experience at sort of
the right grade levels. There are only^^^^m^^^^Vof us.

Q But it is also true that you had no prior
experience in Central America?

A No. That is not quite true.

Q Did you get instructions frOm Clair George or the
Director as to what they wanted done with regard to the contra
once Boland came into effect?

A I have got to think very hard on that. The —

iiUCl isu£ii:n

1093

iN^i^smiff

' That is an interesting question. The day Boland was passed

2 my first action without referring to anybody was to write a

3 cable, which you probably have which says from this point
^^^ forward you have to cease and desist, gt ceter^. I was

5 called to task by OGC for not coordinating that cable with

6 them.

7 So the answer to your question in a specific
I^B term is no,* but then over time we had a series of

9 meetings, I would say, through the fall of 1984, where I

10 began to develop a picture of what I was going to do. The

11 first meetings focused on a definition of what we could or

12 could not do in terms of things in the pipelines -- that is

13 where I think we discussed solicitation, but I am not entirely

14 clear.

15 I know we discussed defensive intelligence,

16 whether or not that constituted indirect support. We. discussed

17 what things in the pipeline could go forward or not go forward

18 to include the DC-3 we had bought, things ir

19 or things at the forward end. There is a third issue we

20 discussed, a specific issue. Intelligence, the DC-3 —

21 I can't remember what it was.

22 In each case, the fundaunental decision was no, no,
^^Z no; and the reason was that while each one could be

24 argued legally they were politically sensitive, politically

i>K controversial, ^o we won't do it, we will back away.

imA" A/^CACICA.

1094

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And there we developed our operational philosophy
that governs us for the next year-and-a-half and that was
to take a conservative approach to all questions calculating
not only the legality but also the political sensitivities'
and if it was politically sensitive and arguable on the legal
side, we opted not to do things ^pd we developed a very
strict hands-off policy with regard to almost everything
on the resistance.

Q Was your concern with political sensitivities
concern that if the agency went too far politically it might
endanger your ability to get the Congress to provide
lethal assistance for the contras?

A Absolutely. We didn't want to prejudice -- from the
very beginning it was known and understood by all of us
that the Administration was going to try to reverse the
decision about the contras and every decision taken from that
point forward was aimed at two things, not prejudicing
that decision, and preserving as much as possible within the
fraun^^ork of the law something to work with in Nicaragua.

Q Once Boland was passed, did you pull CIA personnel

in many

We pulled them ou

instances pulled them
instances

Q Did you cease paying money tO'

'and in other

illllU ACAiriCA.

1095

2
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5

7
8

10
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umi^siniir

A We ceased paying money to anybody with any
director or indirect connection with the armed resistance,
including people who had only minimal — that was the

and was

other issue. We discussed whether we could pa^

irho had terminated
alwaysf^^^^^^^^^^^^^B wit
and we decided that was controversial and didn't pay him.

Q Had you previously beenJ

A Vte would have been paying him through the

He was getting

whole relationship witt
appropriated money.

Q And payments stopped?

A Payment stopped there, too.

0 Did you also stop payinc

A All the people in the FDN,
continued to pay until later in the year. We stopped paying
him for different reasons.

Q Did you subsequently learn that Oliver North had
started seeing that these people got paid?

A I have subsequently learned that, yes.

Q When did you learn that?

I learned Vi4|^BBHHlHV ^^^ private
funding was arranged to picfc up his salary in 1985 because

iiyiM ftfi^ucucn

1096

ii#iai»»nE]r

1 it was discussed and we discussed it when Congress cut it

^^ off in the context of the RIG. ^d Ollie said I will see if

3 I can arrange private funding.

4 Q This was at what date?

5 A I can't remember the exact date — January or

6 February of 1985.

7 Subsequently, as I recall, and I can't give you

8 an exact date or pin down the conversation when and where it

9 took place, Ollie said he had done it and subsequently
1(H|^^^H^|^|^|y c o n f i r me d

11 Q Did you have an idea where the money was coming

12 from?

13 A No, I suspected, as I did with most of the funding

14 that I knew Ollie was arranging for, coming from private

15 donors in the U.S. That was as much as Ollie ever said.

16 Q Did you know how much he was paying

17 A We probably did. I don't know but probably we

18 knew what the general figure was.

19 Q Continue with the others.

20 A Adolf o Calero,' I think it became obvious that the

21 FDN had access to money and fairly large money as 1984

22 turned into 1985. At no point in time can you say, aha,

23 look at that, they have got money. The way it came around

24 was, oh, my, took at that, they are not starving to death and

25 they are operating. That means they have got money. And

1097

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then how much money. Look at the arms purchases coming in,
it was kind of a cumulative thing. We began to understand

they had f i Ti ■! i n money and were able to calculate at that
point in time» VN knew Calero had money. Simultaneous
with that, I begap to develop a very clear understanding
that Ollie North was in the link somehow.

I thought it was analogous to the quarterback on the
sideline of a football game, flashing signals and getting
things and acting as an interested but not directly involved
intermediary.

Q Did North ever let you know that he had played a
role in obtaining funding for Calero?

A He let everybody know. As time went by, it
became less and less of a secret. By spring of 1985,
there was almost no one in Washington that cared to know
that didn't know that Ollie had some role or responsibility
for that.

Q Did he tell you whether the money was coming from
private U.S. donors or from overseas donors?

A He always implied that it was coming from U.S.
donors. He never talked about it and I never really
pushed him nor asked him about it.

Q About where the money was coming from?

A No. And he never volunteered that and I never
asked him. That was up until some time in 1986. Some time

JJMCJ ftCUEJCn.

1098

1 in 1986 Ollie mentioned a couple of times, once again, you

2 put me on the rack and I couldn't tell you exactly when or

3 where, meetings with David Kimche, in the context of his

4 terrorist role. And the possibility of a French banker,

5 not further described, providing money for the resistance

6 forces.

7 Q Did he mention it in connection with his

8 terrorist role, he said something about his role in —

9 A Kimche 's anti-terrorist role. I remember him

10 saying when the contras were starving to death in the

11 summer of 1986 he said, gee, maybe there are people in

12 France who want to give some money to the resistance forces.

13 Q How did Kimche ' s name come up?

14 A He said a couple of times I am meeting with David

15 Kimche on terrorist things.

1g Q How does that relate to the French banker —

17 A I am an intelligence officer, in the back of my

18 mind was — Kimche, I wonder if he is hitting the Israelis

19 up. I began to develop a question in my own mind, which

20 I never asked. He mentioned a French banker and I never

21 followed up. I always wondered about that. Why does

22 Kimche stand out in my mind? He is a heavy hitter in the

23 Israeli equation. I thought it strange that Ollie was

24 dealing with David Kimche. That is something that as an

25 intelligence officer would catch your attention, and caught

1099

imi^mi^

1 mine. I know David from my experience!

2 who and what David is, and I know that is significant.

3 Q Did Ollie mention Kimche's name in connection

4 with the Iranian arms deal?

5 A No.
Q ^^^^^^Byou recall two RIG meetings where paying

7 ^H^^v^^^ discussed?

8 A Not two. I recall it being discussed.

9 Q There was a meeting where it was discussed where

10 Ollie said I think I can get funding from private sources

11 and then —

12 A Where he said I will take care of it, yes.

13 Q The time of those meetings was --

14 A The first quarter of 1985.

15 Q Do you recall whether Elliott Abrams was present

16 at the meeting?

17 A Elliott was not in the position then.

18 Q Who was head of the RIG at that point?

19 A It would have been chaired by Tony Motley, but

20 Tony didn't play a heavy game in it. It would have had

21 Art Morrow, me, Nester Sanchez and/or — well, Nester

22 Sanchez — Jim Michel played a more significant role in

23 the equation, and Ollie with NSC. And it met more in those

24 days, the RIG did, in terms of the legislation than it did

25 in terms of the RIG. We talked about that before. And it

1100

uflCLHssinEir

r<torr\

. ^ r<oorr\

^ was -- the RIG really was rn \%wm, reactivated in January of

2 198 5 as we went into the end of the six month period and

3 the Boland Amendment and the up or down vote of the

4 unfencing of $14 million and it grew out of a legislative

5 group at that time. But it was in that context that there

6 was discussion.

7 Q Did you ever become aware that Ollie North was

8 getting funds foi

9 A The answer to the question is yes.

10 Q When?

11 A That is what I am going to tell you. I recall

12 Ollie mentioning it once or twice. I never believed it.

13 I never believed him because, ^^^^^^^^^^Iways seemed to

14 have no money; B, he poor-mouthed himself; and C, after the

15 change in legislation in 1986, this was the change of the Intel
1g Authorization Act of 1986, in which the direct, indirect

17 language went away, we resumed fundi ng^^^^^Hv

18 Mr. GIZA. Don't you mean 1985?

19 THE WITNESS: 1985, yes, December of 1985.

20 When the Intel Authorization Act changed. We resumed

21 fundig^^l^^^y I didn't believe it. I said that

22 doesn't make sense. Thei^m^^^^conf irmed it in public

23 statements two or three months ago. Subsequently, in

24 meetings^^^^^^Vhas showed me invoices, so I knew about

25 it, and I held the invoices and looked at them.

..-..MurijissiEirjih

1101

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\/io

BY MR. BARBADORO:
Q When did Ollie mention that he was funding

A In 1986 sometime. Sometime in the first half of
1986, something like that. I didn't pay a lot of attention
to It. It was not as significant in my mind as wa;
and I 3ust brushed it off.

Q But it surprised you because at the same time the
CIA was providing funding?

A Ytes. A, I didn't believe it; and B, I didn't •
think he needed it,' and C, I don't know what the hell he
did with it, frankly.

Q You weren't providing money ^^^^^^^^Vto be used

for military purposes?

A No. And to the best of my knowledge, based on our
understanding of th^^^^^^^^^^^^^Vmilitary equation,
I don't think he was using it for that purpose j

Q I want to go back to the period in 1984 when
Boland first became effective. Did the Central American
Task Force attempt to do any estimates as to what the
contras would need during the period of Boland to survive
and how they were going to get what they needed to survive?

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A The Central American Task Force didn't do them,
the DI did them. And it was a projection of what they
would need, how long they would persevere in the field,
what the Central America*! Task Force did was track their
activity and what was happening on the ground.

I remember we had a graphic map where we changed
colors either for the nightly or monthly and showed their
withdrawal from Nicaragua. In October they were here and
in December here, so they were almost all back -- we were
plotting thit and mapping their activities and tracking
their supply.

I remember specifically when we were surprised
in December/January when things began to stabilize and the
trend didn't get worse, because we were projected really
bad things in sort of the second quarter of the fiscal
year — I was — and it didn't begin to happen, ^id that is
when we began to realize other things were happening.

Q Calero began receiving a million dollars a month
in July of 1984. When did you learn that he was receiving
substantial amounts of money?

A As I said, that was a sliding process. -

Q It became apparent not because you saw
deposits, but because you saw activity that reflected money?

A Yes.

Q When did you first meet Oliver North?

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A Either late September or October of 1984.

Q Did you meet him in your capacity as the Chief of
the Central American Task Force?

A Either as Chief or -- it was as incoming chief.

Q What did you understand his role to be on the
NSC staff vis-a-vis the contras?

A I understood him to be the focal point on the staff
for Central America. -■^ ■

Q In 1984 how frequently would you meet with North?

A Not terribly -- once every two weeks maybe,
something like that, and during the 1984 time frame.

Q Would these be at RIG meetings or at other meetings
as we 1 1 ?

A RIG meetings by and large. There were one or
two of those. Largely RIG or legislative meetings. Maybe
I didn't even meet with him that often. It was not often
in 1984. That is when we were, as far as I was concerned,
in the policy wilderness on Central America*, and the RIG
was hung up, as we discussed, I think because of personality
conflicts between Constantine Menges, and Tony Motley and
so on.

I don't recall a lot of meetings with Oliver in
the last quarter of calendar year 1984.

Q In 1984, you were trying to acquire information
about the status of the contras; is that right?

mirj Acsjurn

1104

IWtLiS^S

A Yes.

Q Did you ever receive any information from North
about the status of the contras?

A I don't recall receiving any significant information
in that time frame from North.

Q When did you learn that ti.e contras were purchasing
weapons from Richard Secord?

A You have got the exact date in a cable.
Q Let me show it to you. I would like to have
marked a^^^^^Bl a cable dated March 5, 1985 and as-
^^^^■2 an intelligence report signed by Clair George concernir
alleged purchase of arms ^n^^^^B for shipment to
on behalf of the CIA.

(The documents referred to were
marked for iden-tif ication as
^mSExhibits 1 and 2.)
BY MR. BARBADORO:
Q For the record .^^^^K-l is CIIN number 1280, as

Please take a look at both of them,
(Documents proffered to witness.)
BY MR. BARBADORO:

do you recall reading^^^^Hl at or
around the time it was produced?

A I recall reading it, yes.

1105

UII0»S»»E9T

1 Q Was that your first knowledge that Secord was

2 involved in purchasing arms for the contras?

3 A Yes.

4 Q When you read this, did you do anything to determine

5 whether Secord was acting on behalf of the CIA? There was

6 a suggestion in here that he yifas.

7 A We knew that he wasn't and I don't specifically

8 recall, but I am sure I brought it to the attention of other

9 people, and said, look at this. I assumed it was also

10 Richard Secord. And we -- I faintly recall sending out -a

11 cable saying that he wasn't operating on behalf of the CIA

12 and I think you should have something like that.

13 Q I represent to you that I believe I have seen

14 that. I don't have it with me today.

15 A I recall having said something like that knowing

16 that he was not operating on behalf of the CIA.

17 Q Did you do anything to try to determine on whose

18 behalf he was operating?

19 A Not that I recall, no.

20 Q Did you discuss witt^^^^^H whet her Secord was

21 selling him arms?

22 A I didn't discuss witt^^^^^f where he was getting

23 his arms from during that time fraune.

24 Q Did you discuss with North whether Secord was

25 working with him in getting arms for the contras?

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A No. Not to my recollection. I stayed away from
It. I didn't want to get involved and I must tell you that
I knew that Ollie North would see that intelligence report,
but I wouldn't ]ump up and down and say look at this.

Q Speaking of Exhibit 2, which you characterize
as the intelligence report, do you recall reading this
at or around the time it was prepared?

A Yes. I remember directing that it be done.

Q This was produced at your direction?

A Yfes.

Q In March of 1985, did you have any idea that
Ollie North was playing a role in locating arms for the
contras?

A Playing a direct role?

Q Any kind of a role in locating arms for the
contras.

A I assumed that he was playing an indirect role in
facilitating support for the contras but I didn't know
that he was playing a direct role or even if he was playing
a direct role in arranging those sales or such. What I
assumed he was doing, I emphasize assumed, was he((go to
arrange for funding, he* go to arrange sort of, say, you talk
to that person and he can do X and Y, as a facilitator.

Q What is the basis for that assumption?

A It would have been observations and comments made -

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observations of things, conunents made by Ollie.

Q Did you know that North was meeting frequently
with Calero during this time period?

A Yes. He was t>he major admin contact for the FDN ,
and had a major role to play during that time frame with
all of the resistaiice leadership. Certainly with other
than the FDN, co-equal to and perhaps even greater than any
contact CIA had at that time.

Q Was that a conscious decision on your part to
allow North to become a primary contact with the FDN?

A Yes. There was nothing I could do about it.
There was nothing I could do to or for the FDN. All I could
do was gather intelligence from them. Meeting with
[any of the FDN was awkward and so I ]ust
sort of laid back.

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from?

Did you know where they were getting the arms

When it would be delivered, in what ports and

Q ^^^^^^^^^H^^^^^^^^^^^^^^^^^^^V d i d you
obtain more concrete information about what North's role
was in supporting the FDN?

A No. The reporting was 1<
almost eiiaiwgfcvg*^^^^^^^^^^^^^Wand it would amount to,
as I recall, and you have in your records a ship or a boat
is coming in at this point in time with this on it and we
are going to do this with it, status of their forces, in
fighting, bickering and that sort of thing and not on where
the funding came from. I assumed and I think that our
reporting indicated that there were one or two people,
probably only one who knew where the funding was coming
from, Calero.

Possibly one of the accountants knew, but it did
not go down into the rank and file. He kept it compartmented.

Q And that was the source of his power?

A Yes, and that makes him a unique Nicaraguan.

Q Prior to receivinq^^^^wExhibit 1, what knowledge
did you have of Secord?

A When he called me, I was aware of him as an
individual in 1979, maybe, or early 1980, when he was the

JMMt^ AeOJCUBJB.

1109

VmiSfllAEff'

Arabian Peninsula Branch Chief and he tried to convince

was in the military,
Deputy Assistant Secretary for International Security
Affairs.

I think he was a brigadier or maybe a major general
We had some fairly sharp words at that point in time.
It was a stupid idea and I told him so. And from that
point forward. General Secord never liked me very much,
as I recall.

Then I didn't have very much to do with him until

General Secord was at one of those meetings.

As X recall, it was a fairly frosty situation.
We didn't exchange many words. He went back to the Council
for Political International Security Affairs and that was

iiuri iccinrn

1110

ffi)SLi@»i»§r

that. The next time I saw General Secord was in
December 1986 when we were both scheduled to testify before
the Senate Intelligence Committee at the same time and he
walked up the elevator with me. I shook his hand and said
^ I anl^^^^^^^^B, and he said I know who you are. I would
" say he didn't like me, and saw me as a bureaucrat.
' I didn't know him well and it was not a cordial

° relationship.
9 Q Did you ever become aware of complaints that

General Secord made about you to Director Casey? -"

A No. I have subsequently -- as a matter of fact,
I am surprised Casey never told me that. I just found out
''3 that he complained about me to Casey. I know from being told
^^ about and seeing some of the infamous notes that he
^5 complained about me there as well.

16 Q Casey never told you that Secord had complained
^^ about you?

18 A No. Did he?

19 Q It is my understanding that he did.

20 A Just out of curiosity, can I ask you the nature of

21 those complaints?

22 MR. BARBADORO: Off the record.

23 (Discussion off the record.)

24 BY MR. BARBADORO:

25 Q Did you know in 198 5 when you read this cable,

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, Exhibit 1, that General Secord was somehow tied in or
connected with the Clines-Wilson Group?

A No.

Q You were not aware that it was rumored that he hjSd
been associated with Clines and Wilson in connection with the
Eatsco matter?

knew when wa^^^^^^^^^^^^^H that he was
involved in the litigation and the allegation of the misuse
of map funds for shipping things to Egypt, and that
be subsequently resigned from the military, even though •
he was sort of exonerated from those allegations.

I can't recall specifically that I would have known
that Tom Clines and Edwin Wilson were involved in that. I
may in the recess of my mind have known that Tom Clines was
involved, but not Wilson. It was not something that was
sort of working everyday knowledge in my mind.

But I know Tom Clines and Wilson worked together.
jqnd I know they are bad news and that they also were
involved in a lot of other thing^ because we worried about
that^^^^^l^^^^^^Kthey were alleged to be
bad things to Libya and had target^ec

las an assassination target.

Q When did you become aware^if you did, that Tom
Clines was involved in purchasing weapons that were intended
to go to the contras?

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A I don't know that I ever developed as clear an
understanding as that would have led me to believe about
Secord, but it would have been later and based on snatches

cables maybe^^^^^^^^^^^^^^^Hp You probably
have seen those, v>*iere Tom Clines' name comes up occasionally.
I remember seeing those and wondering whther Tom Clines was
involved in this whole process.

So I would answer your question, I never developed
the same specificity or the same firm kind of understanding
as I would have based on Exhibit A or 1 and 2. It would'
have been more circumstantial and it would have been in
probably the April/May time frame of 1986, as I recall.

Q Did you come into contact with Oliver/ North during
the AWACs sale?

A No.

Q Was he involved in that in any way?

A I don't know. I met Oliver North for the first time
in late September of 1984.

Q What was the status of the Southern Front Military
effort when you became head of the Central American Task
Force?

A A mess.

Q How many troops were out on the field fighting?

A We never knew for sure because Eden Pastoraj

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one believed

msms '

hi3-4.'tLV>imL%4q or what he was telling us. My

guess is, and I think the estimate that we used, was about

Q Was Pastora the prind*Jjal military commander
for the Southern Pront?

A Yes, up to that time.

Q Was Negro Chamorro associated with him?

A Yes, until May of 1984, when ARDE split and
Pastora went his way and Chamorro stayed with Rubello.
Negro Chamorro was a small part of ARDE. During a
major part of the Cawg^hewJl Front when it was a viable

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The Witness. What I am telling you is as we began
in the spring of 1985 to understand that there was going
to be some legislation somehow for some kind of a program,
this would have been in April-March. We had to discuss
what to do with Eden Pastora.

He was very popular, had a lot of following on *-he
frill. We knew he was a moss. I

Moreover, because of his iJuii'Bagi impersonality
and lack of managerial ability that we were faced with
a hopeless situation there.

So I took the decision that we would do the most,
take one of the — what is the word I want — one of the
most frustrating approaches for Eden Pastora. It is kind
of the one that was calculated to manipulate him in a
particular way; namely, ignore him, totally ignore him.
We would have nothing toooLith him. We would refuse
to talk to him. We would refuse to be associated with
him in any way, and we would just move him to the side,
treatment as a non-entity|.^that he did not exist.

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of ignoring him and marginalizing him and it came back
around td marginalizing him, which was my policy from '
A to Z* Because I knew that we could never deal with
him.

A The goal was to ultimately be in a position to
do that if and when we had the authorities to get back
involved with him. Remember in 1985 we didn't have any
authorit^3«« to do anything that supported directly or
indirectly para-military operations in Nicaragua. So
that was another reason for my ignoring and marginalizing

1117

him. I was manipulating and dealing with the situation
actively in a way that was totally in compliance with the
law by passively doing nothing.

Q At the same time, however, weren't their

No.

By CIA officials

the CIA could get back into the business and fund these
people; is that right?

A Yes, that is right.

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it would have

been before January of 1985. It would have been in
December — saying that there is a good liklihood there
is going to be yet another relaxation of the law.
This was at the time when we were, at the same time
the Intel 85 Intel authorization Conference was going
on and I was actively involved in that whole process*
and it sort of declared there would be some change in
the law.

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Q you your^^^^^^^^^^^^^lto

make any representations to ^^^^^^^^^^^Habout supplying
them?

A I just said that we said within the confines
of the law we would provide to you whatever we can.
Now at some point in time I told

ind once here.

They asked here is what we need. They asked for weapons.
I said, "I can't give you weapons. That is not legal,
but I can tell you that I will do whatever I can to help
you and I will get you weapons as soon as it is legal, put
1 will give you communications and I will tell the FDN you
need weapons, but that is the best I can do.

"They have weapons, but I can't give them to you,
and don't press me on it."

Q You knew historically the FDN had not been
»ery good about sharing their material with the Southern
feont?

A I knew that, but I also knew in my own mind
that a point in time that if we had the remaining
restrictions taken away from us where I wanted to go--
■hecg^I had to go. Now you have to remember that by March
■f 1986 we are going into the final legislative battle

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iKGne^mEr

and in our own minds -- I am sitting in the legislative
strategy group meeting -- in our own mind it was almost
certain in spite of the fact it had not passed that we
were going to win the vote.

We knew that if we got the set up right that we
could pass the vote, at least, that ir what the White
House legislative people were telling \xs', and I was being
asked in that legislative context to begin planning as
to how $100 million would be spent, what would it be
used for, what is going to happen.

So in my own mind and to a degree on paper, by
March of 1986 and before, I had bits and pieces of this
operation laid out based on everything I had done two
years ago. Back what I told you when I came to the task
force. The reason I was there was to do everything
possible with intelligence collection, management of the
project, to help the administration reverse existing
legislation, and to get back andi

So I developed a whole scheme of maneuvers and part
of my scheme of maneuver was the Southern "ont. I
might tell you parenthetically

Q Is it fair to say that|

led to believe by your J

to some extent f j^fjUfoa Hilfl!ff?>P>mt ^^at to the extent

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that you could legally support them, you would

of^^^^^^^^^^^^^^^^l they went
the field and separated with Pastora?

A Yes. It is^ also, I should add, that it was not
only because of that. All except for one were fed up
with Pastora. They realized he was a snarl otan by this

cnarlotan

•tor«4eT

time. Operation axiom that you can never £a«W9*£ is

you can never make somebody do something he doesn't want
to do, and you have to wait until the time is right.

I also want to say there is another reason '
that we were hard over against Pastora, and I should have
put it on the record earlier. We knew that everybody
around Pastora was involved in cocaine. We knew it from
November of 1984 forward. We reported it and by this
point in time or slightly thereafter* |wo of his ma^or
associates, David Mayorga and Robert Odurran, were arrested
in large cocaine deals.

That was kind of the final spike in the vampire's

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heart — a woodtn one. .

Q I believe last week I took the deposition of
your former mUm^^^^^^^^^^^HHand that
deposition he broke down and cried when he discussed his
feelings of responsibility for the Southern ^ont forces
who were sent into the fiald in early 1986, and were
not adequately supplied.

Do you feel a sense of responsibility for them
being out in the field and not being adequately supplied in
1986?

A I feel a sense of responsibility, but I don't
allow myself to become emotionally involved. I look
at something when I know particularly what he is
talking about. He is talking about when]
^^^^^m went in and got torn to pieces. I felt bad
about that, but you can't let those things cloud your
judgment.

Q How did you expect that they were going to be
supplied until the CIA got back in the gameT because even
if you had won the legislation, it wouldn't be until
October of 1986. How did you expect they were going to be
supplied?

A I thought that if they were going to be supplied
they would have to be supplied by the FDN from the private
resources the FDN had.

JJIifillftfilPWA

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1 Q And if you —

2 A And I sort of didn't -- I would not -- didn't

3 think we should force them back in the field until they

4 were ready. I thought we had to play a waiting game. It
^^^ was the Southern ^ort that wanted to be pro-active and

6 get going and get back inside and was chafing at the bit.

7 But I knew that they were going to go back inside the

8 only place they would be able to get supplies was from

9 the FDN — that is what I thought, from the FDN's

10 sources.

11 Q Did you discuss with Ollie North in January

12 or February of 1986 whether he could obtain support for the
^^^ Southern Pront forces that were fighting in southern

14 Nicaragua?

15 A No, not in specific terms. I discussed with
^f^ Ollie North the 5°"^^®^" front. I discussed with him

17 the problems. I discussed with him what we were doing.

18 We discussed it widely within the context of legislation,

19 the RIG, there was heated debate on whether or not

20 we would be dealing -- we should be dealing with Pastora.

21 I discussed it with both oversight committees.

22 I had to discuss it once with Senator Helms, anyone that

23 was interested in it, I think. I had to discuss it with
?4 Senator Kassebaum, because it was controversial and the
25 whole issue was discussed in depth. I even discussed it

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DNSIiirafFIBir

Q But you knew Ollie North had contacts that
were raising money for the contras, correct?

A Yes.

Q Did you discuss the possibility with Ollie
North at any point of using these contacts to help supply
the •Southern Kront forces?

A I don't recall discussing them in specific
terms with Ollie North. I talked about -- if they are
coing to ao back inside, they have to have arms. They

0<ilero

have to be able to access the FDN arms. Adolpho *«*>^^
has to be willing to cooperate with him.

I told^^^^^^uf the Southern front is ever
going to come back into line you have to be able to
help them. You have to share what you have with them.
By this time I was dealing -- I was dealing with
mere and had a better relationship with him and talked
to hLn about that several times.

I probably twisted his arm^particularly after
the direct-indirect sort of language went away.^lnd I
felt a little bit more free to make those kinds of
discussions. We made specific — we made a specific
decision^ )|hd I think it is reflected in traffic to train
the ^^outhern Wont in communications, and to set up a
communications link between the ^uthern V^ont and the FDN#

'. * «»i ■

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j^d the express purpose of that was to try to link them
together so they could have a way to access FDN supplies^
^d did I know that this FDN supply was; that Ollie
had a hand in that?

I have already testified to the fact that I
knew tl.dt Ollie had a hand in that.

Q But you don't recall making a specific one
to Ollie to try to find a way to supply the Southern (K-ont?

A Yes.

Q You don't recall any specific request to North
about support jyou gojthe Southern ^ont.

A I wouldn't have made that kind of a request
because it would have put me into a situation that was
someplace I didn't want to be. Because I knew what the
law said.

Q Okay.

Is it fair to say that you also knew that if
the Southern f^ont forces were going to be effectively
supplied you would need some kind of air fielc

A The answer to your question is, no, because I
never believed we needed an air f ield^^^^^^^^^^^B to
operate out of.

Q Your^^^^^^^^^^l^Phas me assumed
it would be necessary if the CIA were to get back into

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It to have an air fielc

A Yes, I know what he thought. I know what
others thought. Let's come right to the issue. For a
series of reasons thought thae^^^^^^^^^^H^otherwise
known ^^^^^^^^^^^m ^^^ ^ dumb idea. Its geography
exposes it to Sandinistas attack. It sits less than 20

f rom^^^^^^^^^^^^^^^Bwhere they
^^^^^B the best in the country.

within^^^^^^^^^^^^^^^^^^^^^^^^V and
It is difficult to -- it is a difficult place to deal out
of and in my mind I told you I was gaining -- developing
a game plan and the use of that fielc

It it why when we initially-- when these visions mi-
tially *di|b*, I really didn't even have that in my mind,
because I didn't think a lot about it. I had written
something that was not important. It only became
important because it became a political issue between

md the U.S. Government,
and became the focal point of this investigation.

Q How in your game plan would you have re-
supplied the iouthern front forces?

APBu^r^rv^frirn

1127

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UROEI^gSfflEBT

Q Did you meet with Admiral Tambs before he
went down to become MiMpwi^to Costa Rica?

A Yes.

Q Did you give him any instructions or were you

sresent 'when instructions were given to him to open \Sp
a Southern ^ont?

A No. /

Q What do you know about that?

A I know what is in the newspaper. I know that
Admiral Tambs mentioned to me one time or a couple times
that he was sent down to Costa Rica with instructions
by Ollie North to open up a southern front. These were
discussions that took place in the 1986 tiraSframe.
I know that in the newspaper he said his instructions were
issued by Ollie NortJ^ and a CIA officer, and I have always
wondered who that CIA officer was, because it wasn't me.

I was asked to go meet Admiral Tambs, and I can't
remember by whom*, but it w4» either somebody in the State
Department or somebody at CIA before he went to Costa Rica,
f^d there wasn't very much tine because he was leaving that

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day and — and the schedules didn't mix, so I drove out
to his hotel room and met him in his underpants in his
hotel while his wife was in her slip in another room
packing with two small kids, and we had a 15-minute
conversation that was not very satisfactory.

It didn't mean much. He was a nice guy; but I did
not at that time, in Admiral Tambs ' underpants, instruct
hun in meeting him for the first time to go open a
southern front.

Q That was the only time you met him before he went
down there?

A Before he went down there, yes. I developed a
fairly good relationship with hin during the subsequent
two years he was there.

Q Did you have discussions with him while he
was down there about opening up a southern front?

A In 86 ID, yes. That was about the southern
front and how it was goinc

Q Nothing in 1985, though? I an trying to find
out where he — he has testified that he was told he
went down there with instrutions. I am trying to figure
out from whom.

A Let me answer the question this way. I did not
give him those instructions.

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Q And you don't know who did?

A No, It is not within my purview to instruct

an admiral.

Q Okay.

A I don't know who might have given him those
instructions. I would not presume to instruct an admiral
to open up a southern front. That is a fairly heavy
load to lay on somebody.

Q To your knowledge, prior to him going down
there that subject was not discussed at the RIG, was it?
A When did he go down? Do you know?
Q Summer of 1985.

A By the summer of 1985, what to do about
Ed Pastora was being discussed sensitively.

I don't have any specific recollection of that
issue being discussed in front of Admiral Tambs at the
RIG", but if he sat in a RIG meeting, it is probably that
it would have been discussed and it is probably that I
would have been one of the outspoken ones talking about
the need to marginalize Eden Pastora and outlining what
I — what my vision of how the south should work, ftid in
the fall of 1985 there was considerable discussion in
the RIG about what to do about the southern front because
Eden Pastora was jumping up and down screaming that he was
not getting any of the humanitarian aid|^ and that it was

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terriblet||nd interestingly, the right wing or conservative
elements of the House and Senate were jumping all down
everybody's throat because we were treating Pastora so
badly. So there was a lot of discussion about it. A lot
of discussion about the southern front, how to go about
it. I don't recall specifically Admiral Tambs having been
there at a RIG meeting, but he certainly would have been
in and around where all these discussions took place.

Q To your knowledge was he given any instructions
to obtain "the permissioni
to have an air field built for contra re-supply?

A To my knowledge he was not -- I do not know
whether he was given such instructions, and that is not
something I was aware of.

Q Do you recall getting, receiving a cable in
August of 1985 in which a conversation between the
admiral anc^^^^^^^^^^^^^Kwas discussed concerning the
building of an air field for contra >»4«ipCpA4^

A The answer to your question is I do not recall
it, but I read it and I went back and checked my calendar
and I was there so I did see it at the time.

MR. BARBADORO: Let's mark as^^^^KExhibit
5, a cable dated 13 August 1985, subject:

It is CII-Number
900; and mark as^^^^riExhibit 6 a cable dated 17 August

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1985, subject^^^^^Mthinking with regard to UNO SUR,
CIS Number 899.

(The documents referred to,
were marked for identification
as^^^^Loepositions Exhibits
5 and 6, respectively)
BY MR. BARBADORO:
Q Please take a look at those|
A Yes.

Q ' Do you recall having received^^^^HExhibit '5?
A No, I don't recall having — I do not recall
having received and having read that, but I am certain I
did.

Q Okay. And^^^^^fexhibit 6, would that have been
a response drafted by you?
A Yes, it was.

Q Do you recall drafting this response?

A I don't have a specific recollection of
drafting that.

I have checked my calendar. I was there, and
there is no doubt that ray name is there as originato^
that I originated that.

Q ^^^^^M] II li I li I I talks about the conversation
I have alludedto^^^^^^^^onge address to allow construcf/eii

■ IMAI aAi^*'

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Having read these memos, is your recollection
refreshed as to whether you knew in August 1985 that
construction of an air field was being discussed?

A I don't recall it, but I do not sort of claim
that I didn't know it. I obviously, in August 1985,
was aware that both the possibility of building an air
field and establishing^^^^^^^^^^^^^^as being discussed
or was, or had been discussed, yes.

Q Can you explain to me why you don't remember
these?

A Well, I can guess, because I was beginning on
vacation the next day. I think if you look at those
cables they are on a Thursday and Friday. I left,
as a matter of fact, when I saw them the first time I
called my wife to see if she could check her calender
to figure out when we left on vacation? because I don't
remember those. I must not have been here. We left
Saturday morning for a vacation for two weeks. I was
gone and just don't remember seeing them.

Q This would be a relatively significant agreement,
would it not?

A Yes.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^■c o n s t r u c t i o n
of air field.

A Yes.

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But for whatever reason you don't
I don't remember.
In the summer 1985.

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A But that guidance is exactly what I would have
said. You can't be involved directly or indirectly in
doing it, because illegal, what eve i^^^^^HL
^^^^Hwant to do, they can do.

Q When do you first recall having any knowledge

about the possibility that an air strip that would be
built^H^^mH^or contra >ii 1 1 f l**^ m^-

A My specific first recollection about that air
field, and I do not discount the possibility that I heard
about It earlier, even in between December of -- Decer^ber 9,
1985 and the date of those cables, was on December 9
during a trip to Central America with Admiral Pomdexter
as he was about to become the JJitional Security advisor

was a with^^^^^^^K>" ^^^ ""' '

of the hotel in which he mentioned the air field, anc that
it was being built. And I told him to be very careful
what he did to make sure he didn't get involved and
stayed legal. And that was - that is the first time,
as I have gone back extensively and tried to recall when
I knew about that air field; that is the first clear
discussion that I recall.

I can vividly call up about that air field.

1134

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I don't discount the possibi'lity of discussions between
that cable and December 9, but I don't recall them.

Q Do you recall being surprised wher
told you about the air strip?

A I recall my recollection was one of concern that
he knew about it and concerned that he might have been
r'ohbing elbows with it, because I said, "Jesus
watch what you do. Stay legal. Don't get..." I said,
my specific words were, "Jesus^^^^H watch what you are
doing and stay legal."

Q I want to tell you and I am going to have to
wait a minute before I come to it that I have some
documents I want to show you that may suggest that you
heard about this sooner.

A I may have. I just don't recall it.

Q But recount for me again what^^^^^^^^Btold you
about the air strip on December 9.

A That the air strip was being built and that it
was going to be used to support the Southern front.

Q Did he tell you who was building it?

A No, I didn't ask him, and I said to hj
stay away from it. Make sure you stay legal. Stay within
the bounds. Anc^^^Hsaid something like, "I know what I am
doing. I have already made my decisions."

Q Ollie North was along on that trip, wasn't he?

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A Yes.

Q Did you discuss the air strip with Ollie
North in December?

A I don't recall discussing it with Ollie
North in December. I recall discussing it with Ollie North
somewhat later than that in January and maybe later in
several occasions.' One specific occasion that stands
out is at a meeting at the Department of State where he
showed a whole bunch of people pictures of the air field.
Q When would that have been?

A I really don't remember. It probably can be
pinned down by calendars, because I remember that it was
in the 7th floor of the State Department in the
Secretary's conference room at a SIG meeting, I think,
and I would have to go back and try to pin it down off a
couple of calendjjjrs what that was.

Q Is a SIG meeting different from a RIG?
A Yes, SIG meeting is the next level up.
Q That would have been in early February maybe.
A May have been. That would be about right.
I just don't remember the date, and I have not gone back

and tried to —

Q Who was present when the photographs were

shown around?

A Oh, gee. General Moller, I think, was present.

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Colonel Kroeger, as I recall. This is all -- I think
Nestor Sanchez, myself, Elliott Abrams , maybe Bill Walker,
Ollie, probably Ray Bu^hardt.

Q Who produced the photos?

A Who had them in their possession?

Q Yes.

A Ollie did.

Q And what did he do with them?

A Showed them. He said, "Look at this. This
is the a'ir field being builtj

Q What else did he tell you about the air field?

A Once again that is one of those occasions where
I looked at pictures and put them away and thought to
r.yself, "My God, that is dumb," and kind of backed away
from itf and I think he talked about sort of the status
of the field.

I remember my specific reaction, and that is
like showing pornography in junior high school. It is
something you don't want to get caught with in your
hands. I just kind of backed away from it.

Q Did he say whether he had played any role in
the construction of the air field?

A He didn't say it, but the implication was there,
you know, "Look at this. Isn't this great Here it is."

I thought to myself if you are involved in it,
.Y9M.V ^JT.^ ,^lif ' v^'c"^, SSl*^ showing it and I don't know why you

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are doing this thing. I just kind of backed away from
it.

Q Do you recall if he explained what the air
strip war going to be used for in anymore detail, other
than "for the contras?"

A Almost certainly he did. Guce again I don't
recall the specific discussions of it, but I think that
we all knew and he must have said-- must have been
talking about it being used to fly into as an intermediate
stop out Of^^^^^^^Bto stop to refuel and to fly
inside. And then I recall some discussions some place
later in the spring^^ime where they talked about sort
of not having contras there and how to manage it and so
on.

But it was from that point, I remember it being
discussed a couple of times as to how it would be used,
what it was to be used for, and so and so forth.

Q Did he ever mention that the air strip had been
used?

A It is hard for me in ray own mind to recollect
what I know now from what I knew then on that point. I
know now that it was used and the aircraft were stuck there,
and that it was a big thing.

They had to get there to bring supplies in there.
That means it had to be used to fly stuff in and it is

..IIW*.<*CQIE1EII

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fairly obvious to me, and I suspect that I knew it at
the time that they were flying short haul flights in there
to bring in construction equipment because they had to get
there somehow. You couldn't get there any real way
because it was so remote.

I don't recall specifically that Ollie said
that It had been used, but it is possible that he could
have told me it had been used. I cannot specifically
recall a conversation in which he said a flight came in,
and it landed there and got stuck in the mud and all that,
but I know that now.

He may have-- he may not have. You are not

certain.

A I am not certain I wouldn't rule out the
possibility. I just don't remember that. The air field
m this whole saga is the thing of which my memory is
vaguest on because I really didn't focus on it one whole
hell-of-a lot.

Q You didn t take it seriously as a »«ai«4p^y base?

A No, I had a lot of other things I was worrying
about, a lot of other things I was thinking about. I knew
I wanted^^^Bto stay away from it. I kn«w it was being
built. I developed the understanding that it was being
built by the same people that were — the previous
benefactors out^^^^^^^^^^L and what its intended purpose

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1Ni(H.ISS]tl£ff

wheni

was for. I was ir

went to the meeting where^^^^Bsaid , "You can't use it.
I sat in the meeting. Wher^^^^L^he next morning,
talked to Lew Tambs about it, and they were distraught
and I told theni it is not a big thing. "Don't worry
about It. Don't fight it. This is not something you
have to break your pick about. We don't need it.
We haven't planned on it. We don't need it."

From that time forward, it became a political
football', a real hot potato^ be tweerfl^HH^H^I^^y

ind the U.S., and then I know sort of it
was just there. It was sort of a pregnant problem waiting
to break.

Q Do you recall the discussions in 1986 when
was threatening to ^mM««KU;pm
the air field. Do you remember discussions with Ollie

the existence of

North and Elliott Abrams about that?

A Yes.

Q Were there any discussions about someone
tel ling^^^^Ht ha t^^^^^^^^H would be deprived of aid
or U.&i assistance if he exposed the air field?

A Let me tell you the story.

Q Okay.

A That is the best way to go about that — 11:30
at night. I was in bed. The phone rang. Ollie was on

Jlliri ftRSIFIFf)

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the phone. He was absolutely — just in one of his manic

moods, and he was screaming^^^^^H is going to go public with

the air field. You have got to stop it. You can't let it

happen. You got to cal^^^^H You have got to tel

to tell him to stop this thing. If he does it, I will

see that he never gti-s another penny of U.S. aid."

Blah, blah, blah.

Then I said -- I hung the phone up and I then
called Elliott', and Elliott said, "Yes, I know. I
have talked to Ollie, and he said, 'Well, what do you wa'nt
me to do?' He said, 'Would you cal^^^Hand see i
can do something about it?'" And I called^^^^jp long
distance, a real breach of operating procedures.

I just picked up the phone at home and said,
t and^^^ksaid, "Yes, I an aware of the problem.
I have already talked to...." and he talked around who

was^^^^^^^^^^^^^^^^^L ^nd
It is taken care of. "Don't worry about it."

I called Elliott back and I then called -b«w
Tarabs and told him and then I called Ollie.

Q So you didn't suggest the way to deal with it?

A No.

Q You just called^^Band he said it has been taken

care of.

A That is right. He said it was taken care of.

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I was going to suggest^^^pgo to^^^^^^^^^^^^and see
if you can talk him out of doing this because it is not
going to be very helpful. But I know that from my lips

|Sort of I didn't repeat the bombast that Ollie
threw at me becar.se I never repeated half of Ollie *s
bombasts.

Elliott says he didn't repeat, nor did 40^
Tambs repeat the bombast that^^^^Hhad. No one ever does
that. One thing I know about^^^^H| if he had been threatene
like that, he would have it on the public record. He •
would not deny it. He is scrupulous about repeating things
accurately on the public record.

Q Do you know what^^^^^^^^Kdid to get zhe
problem worked out?

A I suspect he — I don't know what he did.

He says he ^°^^^^^^^^^^^^^m
I don't know.

Q What was the CIA role supposed to be in the
humanitarian assistance program?

A CIA's role in the humanitarian assistance
progr2un was to have been one of providing assistance,
technical assistance and advice to NHAO and to monitor the
shipments and deliveries down range, period, nothing more.

Q When did that program start?

A It started during late August of 1985. It

JU4M iccirirn

1142

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1 really didn't get underway until late October of 1985.

2 The bureaucracy of establishing a new organization,

3 figuring out what the law meant and how to do it took some

4 SIX weeks.

5 0 Did you discuss NAHO at the RIG meetings?
^0 A Ad^ ngi^sqiim.

7 Q Early on in the program, there was a problem

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ks a

9 television cameras being brought along on one of the

10 flights. When was that flight?

11 A It was the second flight. I would expand

12 your remark by saying there was a problem -- there was

13 a problem of multiple stupidity. That was one of them.
XJn There was another problem after that, but they *^mim place

15 in late October as I recall.

16 Q And after that, it was decided tha^

17 would be the base for humanitarian assistance.

18 A No, the story is much more complex than that.

19 Q Tell it please.

20 A I will tell that story.

21 The first flight went in and it went in okay.

22 The second flight went in, and it was hauled by -- it

23 was taken in with a CBS and a CNN crew on board, television

24 crew. They filmed the whole thing. ^^^^^^^^^^K/ent

25 absolutely livid. They were jumping up and down. They

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forced the public back haul of the first and second
flight, everything had to be taken out and they went
public with taking it out.

Quietly- they authorized a third flightr and
the ♦■hird flight developed engine problems and sat down

Land became once again
overt and they said, "Enough, you people can't run
this program. You are erabarrasing us. Cancel all the
flights."

• They said, "No more flights." This was a •
decision j^^^^^^^^^^^^^^^^^^^^^^^^^^m it
just ended everything. You can't take stuff into

The NHAO Program is useless, because that is
where you need it.

So it became the focal point for the RIG to
reverse this decision, and it was the topic in Central
America to the preclusion of damn near every other topic
for the next three months.

■ I3AIAI i^^^'-^-^m^

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BQthj^^^^^^^Vand^^^^^^H^changed about the same
time, and I can't remember which was January and which

was February.

JUICI^ACAWtfli

1145

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Okay .

A At that point in time, and this is Decemberish.
The RIG takes a decision, Arnmrn, we got to do something
about this thing. Let's set up an alternate point of
supply. go through^^^^^^^w

Q Who came up with the idea to us
A If I had to put ray finger on somebody, I would
say Oliver North.

Q Do you recall whether North said anything about
having connections int

A I vaguely recall him saying that he was

that^H^^^mH^l^would go along
Q Do you recall --

A I know that he was a major proponent of it.
That is another thing that I was lukewarm on.

Q Do you recall him mentioning Felix Roderiguez
as being a contact he had down there who could get you access
to the air base?

A No, but he mentioned Maximo Gomez.
Q Okay. At that point, did you know Maxijno Gomez
as Felix Rodriguez?
A Yes.

Q Okay. Was that one of the reasons why North
thought he could get the use o

A I think that in previous '^carnations' North

uiiiUuefiiucA.

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2

knew, either knew or knew that^^^^^^^fe would be
cooperative and he was a major -- he was a major proponent
of the move of doing it that way and he eventually
convinced the RIG that that was the way to go.

MR. BARBADORO. Let me mark as^^^^HExhibit 7
a letter dated September 20, 1985, addressed, "Dear Felix,'
signed , "N. "

(The document referred to was
marked for identification as
(Exhibit Number 7.)

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MR. BARBADORO: Why don't you read that and then
take a five-minute recess?
(Recess. )

MR. BARBADORO: Back on the record.
BY MR. BARBADORO:

Q ^^^^^^^^^H have you read Exhibit

A I have.

Q And have you ever seen that letter before?

A No.

Q This purports to be a letter from Oliver North to
Felix Rodriguez, and it talks about Felix gaining pernission
to <JS€^^^^^^^^^^^^|B ^^ ^ place for planes
maintained .

Do you recall whether North, in the fall of 1985,
ever mentioned to you that he had sent a letter like this to
Felix Rodriguez?

A I have no recollection of that.

Q Do you recall whether he ever mentioned that he had
an arrangement with Felix Rodriquez where FDN could be
worked or _

A No, that letter comes at — at that point .n time,
it comes as a complete surprise to me.

Q Okay.

A That is much earlier than I would have suspected.

Q when would you — when did you first know that

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North and Rodriquez have a relationship concerning the

A Decemberish of 1985 when we began in the earnest
discussions of in the RIG meetings about diversifying,
getting an intermediate stop someplace along the way and
use of^^

Q What did North tell you at that time about Felix
Rodriquez anc

A It wasn't what he told me. It was his comments at
the RIG meeting and his putting forward the position that

\- first arguing for the use ol
as an intermediate stop, putting up warehouses and so on
and so forth; and secondly, his taking the position that
Felix Rodriquez could handle the Liuiu jmyiwait , handle
the affairs ^^^^^^^^^K ^^'^ ~~ ^^^ word kind of eludes me --
taking steps or arranging or casting things in a way as to
make it clear that any CIA role similar to the inspecting,
confirming role mad^^^^^^^^^H^ was not welcome.

Q I am not sure I understand.

A Well, Felix Rodriquez and
didn't like each other. As a matter of fact, they big time
disliked each other.

Q You knew before December 198 5 that Felix
Rodriquez was down there!

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A Absolutely, yes. And I knew that there was
tension, there was friction between Felix Rodriguez and|

in the area with Felix
Rodriguez.

The relationship was not a comfortable one, and if
Felix Rodriguez was going to have something with the

ktrans-shipment for NHAO affairs, CIA couldn't,' and
we really didn't want to other than in verification.

And so, there was discussion, and I can't remember
It all. It is kind of a vague glop, but Ollie arguing for
moving there and leaving it pretty certain that Felix
could handle the ]ob. And we didn't get involved with it
too much.

Q Did Ollie say whether Felix was also assisting
with lethal aid to the contras?

A Not that I can recall at that point in time.

Q You later found out that Felix was working with
the people providing lethal aid, didn't you?

A Yes, it developed —

Q In the spring of 1986.

A Even earlier — Feburary-March 1986, as it
develops, as you watch this operation and see the whole
thing coming down, yes.

MR. BARBADORO: Let me mark aJ^^^B 3 some
handwritten notes that purport to be of a RIG meeting

1150

on 10-1-85 which were taken by Ambassador Duemling.

^^^^^^1 Exhibit 8 was marked
for identification.)
THE WITNESS: Can I read these?
MR. BARBADORO: Please read them. I have
highlighted the ones that I will ask you about, but feel free
to glance through them.

BY MR. BARBADORO:

0 ^^^^^^^^^^Wdo you recall the meeting that is
described in these notes?

A Not specifically, no.

Q Did you have meetings to discuss NHAO in
October of 1985?

A As I said, from October forward there were
extensive meetings to discuss NHAO and to help organize
and get things started going.

Q So, it is fair to say that there were several
meetings with people like Michael. North^^^^^H Walker ,
Milton, and Duemling.

A Yes, there would be frequent meetings like that
and there would be that group and sometimes the composition
would change, but there were a lot of meetings like that.

Q On page 2 of the notes, it says
Project Hope being asked to take on refugee assistance; air
strip being prepared; Hope will care for wounded together

1151

oNa/coiRsr

with refugees; NHAO can funnel medicine and food through
PH to the southern front."

What IS Project Hope?

A Project Hope is the -- isn't it the thing that
runs the hospital ships around the world?

Q Do you recall any discussion of Project Hope at any
of these NHAO meetings?

A Absolutely. It was discussed extensively.

Q What was the role of Project Hope with the
humanitarian assistance operation?

A The medical supplies and medical support for the
resistance prior to the funding cut-off of 11 October,
9 October of 1984, had been supplied through the agency
in our office of medical services.

We did the training, we interfaced, bought the
medicines, help them put up hospitals and so on and so
forth.

When NHAO came into the structure, they needed
to find a competent medical group who could provide the
medical side, support the medical side of their undertaking,
and they looked around and there were a series of
charlatans who were making bids, trying to get bids, contract
for this.

Ambassador Duemling and I am not quite sure how
it got set up, but interfaced with Project Hope, the

1152

UmitQistEir

21
22
23
24
25

Project Hope, to get them to provide the expertise, the
purchasing, and to help with pulling together the in-
United States portions of shipping to a warehouse at Dulles
where they then shipped it forward via NHAO channels, and
Project Hope was a major player with Ambassador Duemling
dealing with the Project Hope staff.

Dr. Walsh, maybe, I think -- he is the director's
name .

Q Under the reference to Project Hope, it says --
and also under the reference to^^^^^^^^^K- - it says,
"Air strip being prepared."

You would agree with me that this appears to be a
to th^^^^^^^^^^Vair

A It could be. It is not an unreasonable
assumption.

Q What else could it be?

A I don't know what else it could be.

Q And in 10/85 we know the air strip is under
construction; we know it is jfl^^^^^^^^^H and we know the
air strip would be used to supply the Southern "front.

A Yes.

Q Here the reference is "Air strip being prepared."
Can you think of any other explanation other than
that the strip ^^^^^^^^^^^^nder
construction that is being referred to here?

1153

DWA/e^fiffS^

A No. I could, but none of them would make any
sense. It could be anything.

Q Now, when I show yoi.^^^^^^ Exhibit 8 and the
reference to "air strip under construction," do you now
recall discussing the construction of the air strip at this
meeting in October of 1985?

A No.

Q Do you still maintain that the first time you heard
about the air strip was in December of 1985?

A I have searched my memory and tried to recall
anything specific about that air field, and the first
specific notch in my memory is December 9 where that
conversation wit

As I said previously in a statement, it is
possible -- It may even be probable it came up. I ]ust
don't remember. But it looks like it did. I just don't
remember. It is just not there.

Q If I recall your testimony correctly, when you met
[in December, you were surprised and
concerned when he referred to the air strip.

A No, what I said was in — I said what he told me
about the air strip, I remember him saying, "The air strip is
being built." And I said, "Watch yourself. Don't get
involved with it. Stay legal."

Q But you have no memory of —

1154

Wt6^ASS(fj®r

24
25

A I don't remember.

Q Of having heard of the air strip before that?

A I ]ust don't remember.

MR. POLGAR: 'off the record.

(Discussion off t.he record.)

.MR. BARBADORO: Let's go back on the record.

BY MR. BARBADORO:
Q Let's go back to the discussion in December
where you recall^^^^^^^^H mentioning the air strip to you,
asking you to try to reconcile the fact that you were in a
meeting in October where the air strip was apparently
discussed, and your testimony about your conversation
vit.'i^^^^^^^H in December concerning the air strip.

How do you reconcile those two things?
A I can't reconcile it. It is obvious that it was
mentioned. It is obvious I have forgotten it.

As I told you in all of this undertaking, the
thing about which my recollection is the vaguest is that
air strip. I do not have clear time lines of discussion on
that air strip until December.

Now, I went back, and when I saw that cable from
August, I was surprised about that cable,* because I didn't
remember it, \Hf\d you show me that paper, and I don't remember
that meeting, where we discussed that. That is not something
that sits out in my mind as a clear something I clearly

1155

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v<?

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recall .

I do not deny, nor did I in my previous testimony,
that from the time of that cable in August to December there
may have been discussions about the air field which I heard
or where comments were made, but I don't remember them.
That IS the best I can do.
Q Okay.

On page 1 of the notes, it say:
will supply list of reliable suppliers to NHAO."

Do you remember agreeing to provide NHAO with a
list of reliable suppliers?

A Yes. As part of the carefully negotiated -- a.-.d
I emphasize "carefully negotiated" — agreements with the
various oversight committees* "35- '■^^^ understood that CIA
could provide information and advice to NHAO about who they
could use, who they couldn't use, what was good, what was
bad, how to do something, and so on, Jbid within that context
you will see throughout the NHAO files that we were
frequently giving them advice about doing things r because we
have the expertise, rests m our agency or in DOD.

So, what I was to do on that was provide a list
of people that can get boots or clothes or this or that
and run them through our logistics system.

Q Did you provide any advice about who should be
involved in providing the aircraft to carry the

1156

ONR/e^IFM'

humanitarian aid down there?

A Yes.

Q Was Gadd or his company on your list of approved
suppliers?

A We didn't have a list of approved suppliers,
per se. They would ask you whether this is a good guy or
that IS a bad guy, and after Corporate Air was forbidden to
fly into Nicaragua, they asked me to look into whether Gadd
was a reasonable person or not.

Q What is the time frame on that?

A January, early January 1986.

Q What effort did you make to determine whether Gadd
was a reliable person?

A I met with Gadd, and I had one of my of f icers ,^^^|
, very experienced paramilitary
officer, meet with Gadd. We met with him. We talked with
him about his airplanes, talked about what he was flying,
what he was doing, how he was operating, his cost figures,
spare parts, so on and so forth.

Then we came to — I didn't come to it, because
I am not really — I came to assessment of the man -- my^^H

'officer came to the assessment of the operations, and
we passed it to Mr. Duemling.

Q Did you do a credit check or a criminal check or
look into his military background or anything like that

1157

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• 2
3
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5
6
7
8
9

on Gadd.

A Military background, yes. Credit check — we
checked his licensing. We checked whether he had the
operators and all the permits needed to fly and found out
essentially that he was a ]obber -- he didn't have operators
pennits, and that he was subcontracting out, that he didn't
have the structure and expertise that he claimed to have.

And we recommended to Ambassador Duemling that he
diversify off there, and he did as soon as NHAO -- the
^^^^^■«iunLiLltilJllliHL took place.

Q DO you know how Gadd came to you chosen by Duemling

A I was told the FDN recommended him.

Q Did you also k.^ow that Ollie North was reccri:iendi- =

hin?

A I would suspect that Ollie North probably also

recommended him, as well.

Q DC you know that from firsthand knowledge or do you

assume that he did?

A Ollie North, at the meetings that took place, I
recall, suggested and was forward leaning and supportive of
NHAO using Gadd.

Q Did he explain why he was?

A No.

Q In your checks of Gadd, did you look into how he

was going to finance his operation?

iiuAi locirirr^

1158

VHCL/e^^l^

1 A Charge too much-for the flights and subcontract

2 It was what we came up with.

3 Q Did you know he was going to use Southern Air

4 Transport?

5 A No , but we knew that he was going to -- we didn't

6 know specifically he was going to go subcontracting, but as

7 we talked to him and got into it and^^B probed him about how

8 he would run his operation, it was clear that he was going
1^ to subcontract out^ j^d we thought Southern Air Transport

10 would be one of them.

11 Q Did he disclose who his partners and employers

12 were?

13 A No , he got very closed-T'.outh -- the more you
^^4 probed, the more he got very mystic; and he made a lot of

15 references to classified missions he was doing with DOD and

16 so on and so forth.

17 And the alarm bells started going off in my

18 head. The 1 1 1 ) r i 1 1 ■ i alarm bells started going off in .my

19 head, an^H|B was coming back saying, "Fly-by-night

1^0 operator*" phd when the alarm bells went off in my head*

21 I never met with Mr. Gadd again, because I figured that was

22 not someplace I wanted to be.

23 And I tolc^^^H after one or two more meetings,

24 "Don't go back and talk to him anymore."

25 Q Did he explain to you that Richard Secord was

iiuAi ■cciricn

1159

VttlH.ISSIISS'

1 involved in his operation?

2 A I don't recall that mention of Secord.

3 Q That would have rung a bell with you?

4 A yes, that would have rung the alarm bells.

5 Q So, It IS fair to say that his name didn't come

6 up.

7 A I am fairly certain he didn't tell me that.
6 That would have rung a bell for sure.

9 Q Did he mention Rafael Quinteros was somebody

10 he was associated with?

11 A No.

12 Q Did he tell you about the aircraft?

13 A He talked about his C-7 Caribous, yes.

14 Q Did he tell you how many he had?

15 A He must have mentioned it, that he had two.

16 I remember him talking about the one that almost crashed

17 going in there and having to throw stuff out of the

18 aircraft.

•)g Q Did you talk to him after he had had the Caribou

20 down there?

21 A I talked to him while they were going down.

22 The first one to go down was the one that almost crashed

23 carrying the load.

24 Q They had to throw out the spare engine and

25 refrigerator out the back.

1160

ONCCisranlto

A It was just the day after that happened.

Q Did he tell you about that?

A Yes, oh, yes. They had to throw it out, and he
was sort of bitching and groaning about it, yes.

Q And It was your understanding that that Caribou
wor.ld be used for humanitarian assistance flights only to

A Also back and forth, yes.

Q To

A It was my understanding that the FDN would probably
contract to fly some flights also. I think that was all of
our understanding, that these flights -- because the rules

-- rules out of^^^^^^H by the tir-.e
this was set up was that only FDN-controlled airplanes
could fly from here to here, froi
and^^^^^^^B t<

So, I knew it was essentially FDN-controlled, not
a U.S .-contracted airplane.

Q You subsequently learn those Caribous were being
used by the private benefactors to fly the lethal
assistance, didn't you?

A Yes, I would say by March or by early March,
yes, I saw the first indications that those flights were
crossing the border into Nicaragua and flying lethal in

1161

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Nicaragua? and I knew when they were not hauling NHAO stuff
that they were probably shuttling lethal aid between
fnd|

Q You )<new by then that these people were the, quote,
"private benefactors," didn't you?

A Yes, I knew they were going through a
metamorphosis into the private benefactors, by, I would say,
March.

Q So you knew that Gadd was one of the private
benefactors, right?

A I knew that Gadd turned into one of the private
benefactors. I suspected — I smelled that he might be
turning into a private benefactor when I met him and didn't
want to get involved and backed away from it.

I did not like what I felt or saw and thought
that that was much too close for me and backed away from it.

Q Did he say anything to you directly that he was
planning to provide lethal assistance as well as non-lethal?

A Not lethal assistance, but he implied or said he
was planning to fly into Nicaragua at one point in time, and
I just pulled away from that.

Q Did he say anything to you which suggested that he
had the approval of Ollie North for what he was planning
on doing?

A I don't recall him saying anything like, "Ollie

p^f'^^Aiccicicn

1162

UBCfASSKlBT

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2

¥&

21
22
23
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25

approved this operation," but I came away with the distinct
impression that he and Ollie knew each other pretty well
and that Ollie knew what he was doing.

And I came away, as I said, with a distinct
impression that this was someplace I didn't want to be,
so I didn't get back there.

Q On page 2 of the notes, first Exhibit 8. It says
"(North) can use -- Mr. Green said to -- Maximo Gomez,
will airlift the stuff from

Do you remember any discussion of Maximo Gomez
at a meeting such as this in October?

A No, but as I told you, I don't recall that specific
meeting, but I recall meetings in the fall where Maximo
Gomez was talked about as the person who could handle
the coordination on the ground ii^^HH^Hh for trans-
shipment.

But I recall it being somewhat later than that.
I recall when we were discussing, intensely, setting up the

ILiunt tiin.iiin.iHi operation, to my recollection, it was
in December, not October. But that was the time.

Q, Do you recall references to a Mr. Green in any
of these meetings?

A No, I don't know who Mr. Green might be.

Q Felix Rodriguez, a.k.a. Max Gomez, has testified

1163

llN6^ASStlJQ)r

1
2

that he receivecfl^^H Exhibit 7 on September 29, 1985,
that he, after receiving the letter, called Oliver North and
said, "I agree to do what you ask," and North said, "Await
the instructions from someone who will call and identify
himself as Mr. Green"; that in December he received a call
from a person who he later learned was Rafael Quinteros
who said, "I work with Mr Green, and I have a flight coming
in tomorrow with heavy stuff on it." It was a 707,
SATCO 707 that contained ammunition.

Did Ollie North tell you anything about his'
proposal to use Max Gomez to allow flights of lethal
assistance into^^^^^^H in December 1985?

A No. None of that — that is all news to me.
That is all new information.

Q So these references to Mr. Green and Maximo
Gomez and air lift the stuff fron^^^^^^| would be for
something different?

A I have no idea what that is about.

Q Would you have remembered if it was something
about a plan to ship arms intd

A I would think so. I would think if they were
doing that, yes, and I knew about it, I would remember that.

Q And you don't remember that?

A I don't remember that, and I am hearing Mr. Green
for the first time.

1164

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[with Oliver North

Q Do you recall going to|
December 30, 19857

A I don't remember December 30, but I remember in
late December time frame, yes.

A Bill Walker.

Q Yes.

A And myself.

Q How did you get to

A We flew on a government airplane.

Q Not a Jetstar?

A No, It was a U.S. military airplane. It might have
been a Jetstar, but --

Q A U.S. military plane?

A Took off from Andrews Air Force Base, went to, as
I recall -- well, maybe it went t°^^|^^H first and then
to ^^^^^^^^^^^^^^^^H and then

Q What was the purpose of going there at that ti.Tie?

A to coordinate^^^^^^^^^^B -- to make the

final arrangements °|^^^^^^^^^H towff^Sn^MKt operation,
as I recall.

Q Who did you coordinate it with?

A I didn't coordinate it. I was the -- those
meetings, whenever we travel down there, because of the need
to present a united front, in all of those sessions we

jjum ktifMCiKf^

1165

UND^SfitEKiT

traveled as an interagency group. You never saw in that
t-.Tie frame, and even to this day, people dealing on the
Central American issue traveling individually.

So, that was why that group was like it was --
State Department, N'HAO, CIA -- as a -- and NSC.

lanced ^'^^^^^^^l 01 lie and I
rene.mber whether the Ambassador went with him and met with
and I stayed and met wit
fl did not sit in the meeting a
It was at that point that I delivered the first of two '
direct instructions. Our role was not to be involved in this
thing. Our role was to provide verification reporting, what
:s i.T, what IS out, and that is that, but not to be
i.~.volved m any way with the thing whatsoever.
As I remember, I told
that. We sat in a little anteroom, Bill Walker
and I, while Ollie was off in the other meeting. I did
not go into that meeting.

Q Had you been told by that point that in early
December a 707 with ammunition, a SATCO 707, had been flown

A No, I had not been told that a 707 had been
flown intc

Q In December 30 there was in storagej
approximately ^^^^Bpounds of ammunition that had been

p:*»^i fl.Oiuc'tr'^

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flown in.

Did you see that?

A No.

Q Did you know that any material was — ammunition
was being stored there?

A I would have known that there were still ammunition
left from our earlier program before 1984, because we left
it sit there and froze it.

I didn't know that fresh ammunition had been flown
m until it was there December 30.

Q You hadn't received any reports that lethal
assistance for the contras had been flown
in December?

A I don't recall seeing a report like that. I recai;
a report — and I can't put a point in time -- I think
I recall a report of a 707 going into^^H^^^^ but
I would place it at a later date than that. I would place
it in the spring sometime.

Q Did you have discussions with Ollie North in
December about his plan to us^J^m^^both as a place
for the humanitarian assistance shipments and for lethal
assistance shipments?

A I didn't know Ollie had a plan that he was
actively involved in to move stuff around, and I don't
recall talking in specific terms about — as a matter of

IIMCJ.A^CICICn

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fact, Z didn't talk to him that Z can recall about moving
th« co-locating and piggy-backing on the NHAO program to
fly lethal supplies out of]

Later, in 1986, February or March, when we started
planning, I talked -- we talked about the use ol
in a different role and whether or not we would use it in
oi'r program? but I don't specifically recall a discussion
with Ollie.

Q How about a general discussion in December 1985?
Did you have any idea that there was a plan that involved —

A No.

Q Just oi^^^^^^^l to ship arms to the contras?

A No, I don't have any -- no. I think my
understanding that lethal equipment was going to be flown

out °^^^^^^H °^ ^^' ^^^^^^^^H

probably started developing in February 1986 or later than

that.

Q Did you understand that some of this humanitarian
assistance would end up with the Southern Ront as well as
with the FDN?

A If it could be gotten there.

Q How did you think it would be gotten there?

A Well, as you noted from the record, we knew that
was a problem and didn't — couldn't figure out just how to
get it there, and we came up with the idea of a direct drop

liyiy ICMrprA

1168

r224 v'»4*-

flying from the States into the Southern Jfont to get some
symbolic — symbolic material delivered — more than symbolic
a start.

In fact, we worked with NHAO and provided them some
technical support to make a drop which they finally got done
successfully before we just figured that, given everything,
it was too hard for NHAO to do, and they didn't try it again

Q So, you did one drop. And what was the plane
that was used?

1 1 wa s a ^^^^H
Q Whose plane was it?

F r o iT^^^^^^^^^^^^^I - -
That may not be the correct name, but it was run

9
10
11
12
13
14

15 Q That was the only direct drop of humanitarian

\^B assistance to the Southern ^ont?

17 A Yes.

18 As a matter of fact, I want to put something on

19 the record at this point in time.

20 Q Yes

21 A And it is important that shows you kind of where

22 in my mind I was in December, early December of 1985. There

23 was a meeting in either late November or early December

24 just before the final conference — well, the conference

25 was going on on the Intel Authorization Act in which

1169

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McFarlane shared and asked the conferees to attend* ftid
Congressman Hamilton, Congrens^ian Stump, Congressman C^.e^.ey,
maybe Congressman McCurdy were there, and one Ser.ator --
Senator Durenberger came? and the thrust of it was to argue
rather passionately for the Intel Authorization Act allowing
CIA to provide logistics support to the resistance forces,
because it was so critical.

And I will tell you very honestly I was in the
forefront of arguing for thaf, because I felt if the
logistics' delivery system couldn't get fixed, if we coQldr.'t
get back in and lay together something that was not
functioning right, that we had a serious problem.

And I argued long and hard in sort of -■/ cacaci-y
as working on the legislative team that was involved m this
to get that thing fixed.

At that point in time, if I had known this^ I r.ight
have been less passionate m my arguing and slightly more
relaxed, but I didn't know any of this stuff.

Q Did you ever have any contact with Rob Owen?

A No.

Q Did you know that he was being used as a contractor

by NHAO?

A I knew that, yes.

Q How did you know that?

A It was discussed in various NHAO meetings during

Ulilil l.C£l£JCJl.

1170

IW^dSSMf

the fall of the year about whether or not to put Rob Owen
on contract, how to put him on contract, what his role
would be, and so on.

Q Do you know who the principal proponent of putting

Rob Owen on NHAO payroll was?

A Yes.

Q Ollie North?

A Yes.

Q Did he say why?

A "Rob Owen is a good kid." Rob Owen know* these

people. Rob Owen has been around them, developed good
contacts. They trust him.

Q Do you recall a letter from the AAA representing
Owen?

A I recall discussion of the AAA recommending him and
so on and so forth.

Q Okay.

A I don't recall that specific letter, but I recall
the topic.

Q Did North ever tell you what he had Rob Owen
doing in Central America?

A No. And I never asked.

Q Did you always understand that Rob Owen's sole
role in this thing was as consultant to NHAO?

A Rob Owens' role was ubiquitous. In the 1985 era.

1171

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'miffsisi^ff

he was a count -- the Miskito Indians and other areas. He
was a person who had contacts and so on and so forth.

In that time frame, I really didn't know what he
did. I developed someplace in 1985 an understanding that
he was working with Ollie, and that was another person ti-.at
I refrain from meeting.

Q How did you understand that, come to understand
that relationship?

A Ollie mentioned him a couple of times in
discussions, and I think Rob Owen in discussions around whe.".
people mentioned Ollie* )^d it became clear that there was
a connection between Rob and Ollie.

And then in 1985, summer of 1985, Ollie t^ck a
fairly strong advocacy position in NHAO picking up Rob Owen
and putting him on board, and that sort of put the rest cf tne
package together.

C Did you later learn that Rob Owen was doing --
continued to do work for Ollie after he was on the NHAO
payroll?

A No. Rob Owen is a person that I did not focus on.
I didn't focus on his activities and didn't get involved
with that and didn't know that while he was on NHAO payroll
he continued to work for Ollie North.

Q Can you explain the 10 percent rule to me?

A I can try.

^iUI^IACCiriCA

1172

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Q Go ahead.

A I told you I was — I participated in the early
days of discussions trying to define what NHAO could and
couldn't do and how CIA and DOD could or couldn't relate
to NHAO and define the parameters of that operation.

One of the issues that came up was these planes
are flying from point A to point B and hauling things, and
this IS a war -- must they always fly with NHAO when they
are carrying NHAO material with only nonlethal stuff?
What-happ«ns-if-there-is-some-space-lef t-over kind of i
discussion.

At that point -- and this is where I don't have
direct knowledge -- it is my understanding that t.'-.e ITepart-
ment of State and NHAO had some additional discussions, to
which I did not attend, with Congressman Hamilton and some
others on the oversight committee^ and they talked about t.his
question^ ^d ultimately they came down with saying that if
there is some small and relatively insignificant space left
on an airplane, it is not inconsistent with the law to put --
fill it up with on-a-space-available basis, with some lethal
material.

And so, there was discussion, and again, I couldn't
pin the date down or the time or the specifics of it. They
talked about, well, what does that mean, and outcomes; well
not more than 10 percent. I recall that actually being

....jiii^i acririrn .

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discussed and then us sort of relaying it down there in
our verification role that you can't have more than -- make
sure there is not more than 10 percent lethal on any
particular flight.

They flew a few flights that way. It continued tc
be debatable, continued to be controversial. Elliott
Abrams was uncomfortable with it.

Then we had one flight that the FDN tried to take
off with, sneak out, that was almost totally lethal.

Q That was in February of 1986?

A Something like that. I don't remember t.-.e date,
but It IS that ti.me frame.

our ^^^^|H 7ian^^^^^^^^^H:aucht
reported it, and at that point Elliott Abrams said, "Let's
knock this off totally and completely. This is too
sensitive . "

So, someplace in there the 10 percent rule went
away. That is how I remember it.

Q Let me represent to you that one of the cables
I have says that -- a cable of February 22, 1986 discusses
the flight that was here described as 50 percent lethal.

It is fair to say as of that date, as of
February 1986, you knew that lethal assistance was being
shipped outHH^^^^H| as well as hunanitarian aid; is that
right?

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A 1 think it is fair to say before that.

As I said, sometime in February, but maybe before
that date, yes.

Q How did you <3iscover that they were shipping lethal
assistance out of there?

A I don't directly recall that, but my guess is
-- I don't know .^^^^^^^HHH asked us about
or It came up at a RIG meeting. I just don't recall how it
came up specifically, but at one point in time one knew
there was lethal stuff there.

Q Who did you understand to be the people shipping

the lethal stuff out?

A I understood at that point in time that t'r.e TZ:>
suppliers, the same people that are provided our supplies,
I thought, up to around -- all during 1985 had taken some
supplies int(^^^^^^^^H and it make perfect sense because

[weren't allowing anything to come into the
country at that point in time.

So, I thought they had just taken it on in.
I never asked the question and I don't remember specifically
focusing on it.

Q Well, would you agree with me that you must have
come to the conclusion in January or February that the same
people that were shipping the humanitarian aid were shipping
the lethal aid?

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MS. MCGINN: I object to the form of the
question.

BY MR. BARBADORO:
Q You can answer that. She is just putting on the
record her objection.

A Would you ask the question again?
Q Sure.

Is It fair to say —
A I heard the objection.

You broke my concentration.
Q Is it fair to say that in February 1986 that you
knew that the same people who were providing the humanitarian
aid and shipping the humanitarian aid were also shipping the
lethal aid?

A It is fair to say that, and let me tell you why it
is fair to say that.

[had stipulated that only FDN-
controlled aircraft could make that shuttle, and the
aircraft had to be covered by and affiliated with the FDN
and not U.S. -run airplanes.

The initial flights that were carrying the
supplies fron^^^^^^H the very early ones from

itc^^^^^^B, was the FoHJ^Bcarrying
stuff all over creation, and I knew the Caribous, that the
C-7s, were when they were making that

trant Bliipiimi^t flight.

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were available for contract when not otherwise working for
the NHAO contracts to carry over stuff for the FDN, and
other stuff only meant lethal material.

I knew that that -- i knew that was going on.

Q Okay.

You knew t.hat Gadd was the one that was leasing
out the Caribous, right?

A Yes.

Q And you knew that Gomez was the one who was used
to get th^ contacts to get the planes intc^^^^^^^fin ' the
first place, right?

A Yes.

Q And you knew that both cf those people had
contacts with Ollie North, Because it was North that had
suggested Gomez as the person with contacts li
and North was one of the people who was pushing Gadd as a
contractor for NHAO, right?

A Yes.

Q And is It fair to say that you knew that North
had connections with these people as early as February of
1986?

A It is fair to say that I knew that North was
arranging for these people to be involved in this operation,
and it is fair to say that I backed right away from it and
didn't want to get involved in it.

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twciifissmior

io;

It IS fair to say that I instructed^
^^^^to stay away from it and instructed CIA people to stay
away from it.

And I did not try to develop a clear picture of
all those things.

Q So, you knew that North had connections to these
people; and you decided at that point that yon didn't want
to know more, right?

A I knew at that point in time that that is right,
I was just not going to get involved with it. .My job was
and had been to keep the agency within the boundaries of
?ropriet.y« and to do what I could within the framework of
the law to support the President's policy, and that is what
I did.

I backed away and tried to make sure that everybodv
else backed away and stayed away from places where we saw
potential grief.

Now, all that said, I did not try to put all these
pieces together and say, "Look at that?" but I think there
were about a hundred other people in this town with
exactly the same degree of knowledge that I had, if you
look at it.

Q But even though you knew these things about this
resupply effort m February, you didn't inquire of Ollie
North about what his precise connection was and who these

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people were and who was funding them, etc.?

A I didn't ask Ollie North questions that I knew
or thought might put me someplace I didn't want to be.

Frequently, I did not like -- I wouldn't give
Ollie a chance to talk to me about those things. I certain:
didn't ask him where the noney was coming from and what ail
this stuff was and how all this was goi.-.g down and tried to
keep myself uninvolved.

Q In February of 1986, you had a confrontation
with Felix Rodriguez^^^^^^^^^B correct?

A Yes -- well, I had a confrontation in that ti.Tie
frame. I am not sure it was February. I could check
che record and get the date.

Q Can you describe the circu.-nstances of that
situation?

gon<^^mim^^H for meetmg^^^^HB
|and a while wa ^^^^^^^^^^^^^H

because the ^''^^^^^H^^^^^^^^B ^"'^

Max Gomez, in particular, and the Ambassador being
concerned about that whole operation, where and how it was
going to work, he asked me to come over — Ambassador^^^H|
did.

I ^•'A-mHIIH^^B ^ reviewed^^^B
)sition, you know, what i^^^^^^^^^HB position,
and it was very clear that only, as I have said, planes

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controlled by the FDN, FDN contractor or owned airplanes
ma)(e that^^^H^|^^^^^^^| hop.

And both Anibassador^^^^Hand^^^^H|^^H were
very firm on that point. They said, "If you deviate from
this at all, if there is any deviation, we will get back ir.t:
the same brouhaha*, and they will close down the flights
immediately. %id make sure they understand that because they
don't believe NHAO can run this thing."

So, I flew over t^^^^^

and I landed there. .Our

met anc^^^^^^^^^^^^^H rhey were both jumping up and down,
because they knew the rules, too.

They said, "There is a big C-130 over there
loading up over there." And I said, "What? Where is it
going?"

And they said, "It is going to take it to

They said, "No, it's not. If it goes there it
destroys the whole procedure."

And I said, "Let me see it." So, we drove over anc
looked at it, and there it was, the SAT C-130. I walked
up to somebody -- and to this day I don't know who it
was -- and I said, "Where is that going?" And they said,
"It is loading those supplies to go tol

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And I said, "Who told you to do it?"
"Felix. "

And I said, "Where is Felix?"

They said, "He is in his hooch." And there were
a bunch of people mi H iCi^ around the warehouse, loading this
airplane up.

Q What was it being loaded with?

A I don't know. I never looked at the cargo, but
It was boxes, not ammunition boxes. Soft boxes, cardboard
boxes. You can tell an ammunition box from another box.
Q So you can't say what was in it, but you know
It wasn't ammunition.

A It wasn't a.Tununition boxes. They are all wccden
boxes.

These were cardboard boxes. Looked to me like it
was software, uniforms and quartermaster and such. I didn't
walk into the airplane. I ]ust looked at it and watched
what was on a truck ready to go up the ramp. I went in,
introduced myself to Felix.

This is the one and only time I have ever met
Felix. I shook his hand, said, "Hello," told him who I was.
Chief of the Central American Task Force.

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"Where is that C-13 going?'
"Who told you to lead it?" He said, "Ollie." I said,
"It can't go." I'm not sure. Correct that. I said,
"It can't go to^^^^^^^H" and I said, "you ]ust can't send
It. "

He said, "Well, Ollie told me to send it."
And I said, "Well, let's call Ollie." So he picked up
the telephone and dialed Ollie's phone number. He said a
few words to Ollie, and I picked up the telephone, frid
I said, "Ollie, that god-damn airplane can ' t go. If
you do it, it is going to bounce the whole agreement. It
;;ust can ' t go. "

And Ollie said, "Okay, give me Felix."
And I gave it back to Felix, and the airplane turned
around and went back* ftfid I reiterated the ground rules to
Felix and met with th^HH|^^Htold him about the incident,
told him about the ground rules, reinforced tl

that we were not to be involved, and told the
ur role was to be^ and left.

The next morning I left, I believe? and I came
back and told Admiral Duemling about it and to this day
I do not know how that C-130 got down there or why it
got down there or what it was doing. I only know -- that
was the specific actions I did to keep the agreement
from being imperiled.

Q You wg^y^ Mi^^^^ik t^&^W^°" '^"®*' ^'^^^

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ifRRie^miir

106

at that point that Ollie North was controlling this
operation?

A I knew at that point that Ollie North was
probably involved in it, yes* and that Felix would
respond or would talk to Ollie,* and I knew he wouldn't
listen to me.

to Ollie.
A

flown fro:
A
Q
A
Q

He wouldn't listen to you, but he would listen

He didn't like me. I was CIA.
•MR. BARBADORO: Off the record.
(Discussion held off the record.)
BY MR. BARBADORO:
Back on the record.

When did you learn that missions were being
to '^PQS^^By 'Southern Vrront troops?

March maybe.
How did you learn that?
Reporting from!

Do you recall getting requests frd
for flight vector information, weather reports, intelligence
for southern flights.
A Yes.

Q Is that how you would have learned when you
got that information or request for flight vector informa-

tion for the flight'.

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A Either that or maybe a report that a drop took
place, one of the two.

Q When you got those requests from

what did you understand his role to be in
the operation?

A I understood his role to be one of passing that
information on to someone in the Southern rtont set-up. 3y
that time we were setting up the Southern ^ont comniunicatior. =
center and either getting it to the FDN or getting it to
the private benefactors for delivery. But -- or passing
so they could coordinate operations.

Q So he was, as you understood it, merely
receiving the information passing it on to somebody
there^^^^^^^^^^^Hwho would then relay it to the
right people.

A Or passing it, yes, passing it on, essentially,
yes.

Q When you learned that these flights were going
to the southern front, how did you understand they were

without stopping*.

A I thought they were C-123 K's with extended
range capability. The C-123 K can make that range.

Q And the flight vector would have been for a
plane of that type that would make a round trip without

4UIAI il4eCM;iCA

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arranged for it'

stopping.

A Yes.

Q You didn't have any idea they were using an
field 't^^l^^^^^l ^^ 3 place to refuel.

A I still don't think they did. I had no reason
to think that the air fi««4^|^^^^^^^^H was operational
and that they were making stops and staging out of there.

Q Did you have any idea that your^^^^^^H
^^^^^■on at least two occasions arranged for the
planes to refuel!

A No -- my|

Q Yes.

A No.

Q Did you know that they stopped to refuel at

A I heard one time that they stopped to refuel
there and I thought that what I had heard -- I heard
this subsequent to that, just recently as a matter of
fact, that the DAO, someone at the DAO's office arranged
for their being refueled.

Q What is DAO?

A Defense Attache Office. But I did -- you
just told me for the first time that our
^^^^Hmade that arrangement. I did not know that.
MR. BARBADORO: Let me have this marked as

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Exhibit 9, a cale dated 11 April 1986, regarding
night flight by NAHO L-lOO, CIIN Number 2008, and '^s^^^

LO, a cable dated 12 April 1986, subject ^dUiloLlY
flight aircraft, CIIN Number 1710.

(The documents referred to were
marked for identification as
^^^^H Exhibit Numbers 9 and
10, respectively.)
MS. .MCGINN: That should be|H^BlO.
.MR. BARBADORO:^HHfe| 10, yes. It has been
a busy couple weeks.

BY MR. BARBADORO:
Q ^m^^Exhibit 9 and 10 describe an L-lOO re-
supply flight that arrived on April ^ ^^^^^^^^^ft ^^'^
then left on April 10 and apparently made a drop to the
diouthern firont of lethal assistance.

Having read these cables, do you remember
receiving them?

A No. But that doesn't — I received JJj^H
cables a month, and I just don't remember those two.

g Having read the cables, do you remember the
flight?

A I remember — now I know from after the fact that
an L-lOO or I have seen after the fact that — allegations
that L-lOO went in there, but I don't remember having read

f.v"^i l^ftlUCA

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110

those or remembering that specific flight at that point
in time.

Q Would that have been a 3AH:» plane?
A I have no way of knowing, no.

Q Do you recall that the L-lOO made a lethal drop
to southern firont?

A I recall reading some place that L-lOO did
make a drop to the i^outhern '^ont.
Q Okay.

A I don't recall where I recall that from.

H^^^B^and^^^^Hand^^^^^^^Bare Southern
^Pront commanders?

A All Southern ^ont commanders.
Q Did you have any knowledge of this flight
prior to the time that it left?
A No.

Q Did you ever discuss this flight with Oliver
North prior to the time it left?
A No.

MK. BARBAOORO: I would like to mark a£
11, a CL-43 message from Ollie North using his alias,
Goode, to, I believe Richard Secord. In any event it is
a message obtained from STTGZ.

(The document referred to,
was marked for identification as
Exhibit Number 11.)

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THE WITNESS: I don't recall ever discussing
that with Ollie North.

MS. MCGINN. I haven't finished with that.

THE WITNESS: What IS the date of that, may

I ask?

MR. BARBADORO: It doesn't have a date. By
context it would be before the flight.

THE WITNESS: I have no recollection of havir.g
discussed that with Ollie North.
BY MR. BARBADORO:
Q ^^Hj^^^^^B would you agree with me that this
^hibit 11 appears to describe the L-lOO flight which
we know from --

A May I see it again?

Q -- that we know -^°"H^^B ^ ^"^ ^° ^® ^^°^
made the drop on or about April 10, 1986.

A It could describe that, yes. It looks like

It does.

Q Would you also agree that the message says
that ll^^H has approved the proposed flight?

A That is what it says', but as I said, I have
■no recollection of ever having discussed it, ftnd it
was not within ray 8!*afi&ii-to have approved such a flight*,
and I wouldn't have done that.

Q Let's be clear. Are you saying you did not

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112
approve this flight prior to the time it left?

A What I am saying is I don't recall ever having
discussed that flight with Ollie North. I don't recall
having sort of said I approve that flight. It was not m
my purview to have approved that' and given my posture and
t.he way I dealt with all this stuff, the very most I
would have done is listened. And I don't recall even
having listened. I don't recall talking with Ollie
North about an L-lOO flight going into the Southern
^ont.

Q Did you approve any of the Southern ^ont
-T"^^t^pay flights prior to the time they left.

A Did I approve? No, as I said I was prescribed
from being involved in those things^ and it was not mine
to approve* qhd I wouldn't say, "Drop ^^H^^^Hj" °^
this or that. I would not do that. That would have been
a clear violation of the law.

To do so would have been folly of the first
order. I did not approve those flights.

Q You agree with me that that message says that
^^^^Hhas approved?

A I agree with you what the message says, but
I also know there are other things that 1 am alleged to
have done in Ollie North's messages that I didn't do.
There is also the ^oX note where --

.wiJlMN . ^_^^*^i^'^^'^'

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Q Go ahead.

A There is the ^iSa^ note which I have read in
which I ajn alleged to have done something with regard to
telling him to buy foqd.yhat I didn't do.
MR. BARBADORO: Off the record.
(Discussion held off the record.)
BY MR. BARBADORO:
Q Back on the record.

Oliver North made a trip td
about April 20, 1986 with Richard Secord. Do you know
he made that trip?
A No.

Q You were not down there at that ti.ne?
A No, not. with them, and I don't know what my
travel record is,* but I was not with them on that trip.

Q Do you recall in cable traffic the meeting
IS described as a meeting with U.S. officials and
officials from the ^^^^H[|||Hb^^^ ^^ ^^^ meeting, and
other FDN officials.

Do you recall that meeting at all?
A I recall sometime in the spring of the year
Lng^^^^^^^^^K but couldn't put a date
and time to it without reviewing extensive records.
Q You were not at that meeting?
A I was not at that meeting, nor were any other

UMTJimiClFJ).

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114

CIA personnel that I an aware of.

Q When did you become aware that there was a
problem with^^^^^^^^^^Hregarding his relationship
with the private benefactors?

A March 1986 and whe^^^^^^^^ when we discussed
Iwas when I knew that there was a problem.

Q What did you understand the problem to be?

A Direct contact with the -- passing information
directly to private benefactors.

Q Did you know how he was passing the
information directly?

A No.

Q What was it about his role that was troublesc.T.e?
Wel^^^^^^^^^^^took the
discussion somewhat as I think I have testified, and that
surprised me in the way he came on in the discussion.
As this unfolded, what was troublesome was it became
clear tha^^^Bwas passing information directly to the
private benefactors and that was something that we were
not to do.

Q If he had merely received the flight vector
information and passed it on to the contra leaders in

I by giving them the message, that wouldn't have
been a problem.

A That wouldn't have caused me a problem, no.

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It was a direct contact and direct association, not so
much that we thought it was illegal. We thought we were
putting ourselves in harm's way much the same way I backed
away from Dick Gadd and much the same way we backed away
from all these people. We knew that this was, as I have
said, I knew that this was potential dynamite and that we,
CIA, wanted to stand clear of this thing and stay within
the boundaries of propriety and not get involved.

We felt that that direct contact was, and
passing j.nformation was too close, too much involvement
and laid ourselves open to either criticism politically,
which is what we were most concerned about, or worse.
So therefore we once again reiterated, ar.d
as I said.^^H^^I^^^ took the lead and that surprised
me in laying down very clear instructions that ^^^^^^H
^^^^^^^^^^^H I

Q When did you learn tha^^^H^^^^ had a secure
communications device he was using to communicate with
the private benefactors in the Southern ftont?

A Octoberish, late October when this whole
issue became — when we started to investigate the issue --
let me back away from that. We went down to a trip with
Elliott Abrams sometime in October, right after the law had
passed, and we made one of our swings down to say, and
now this is what we are going to do, and we stopped in

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each country and made our brief ings.^^^^^told me that
he had had these contacts and these phone calls had taken
place, and they were likely to break in the newspaper.

fciiiiiiill Tambs told me the same thing. I came
back and reported those and shortly thereafter our

of fleer ,^^^^^^^^^^ went t^^^^^^H^B and —

to^^^^^^H I guess, and debriefed ^^^^^
and cane back and said ^^^^Hhad this coireaunications
device. That was the first point in time that I had
heard about it.

Q Okay.

A That I recall hearing about it, and I think
I have a pretty clear recollection of that on that case.

Q Did you ever give aerial photos to North to
pass on to the contras?

A Did I?

Q Yes, in 1984.

A Aerial photos? In 1984?

Q Yes. How about specifically concerning

that the Sandinistas were acquiring
or were using?

A No, I don't think I did. I don't recall doing
it, and I don't think I would have.

Q Did you ever provide North with ^^f or order
of battle information, something like that, to give to the

contras?

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BNttiffiffer

A Certainly not before the law changed in December
1986 and I don't recall doing it after that point m time.
He made some requests, but I don't recall giving --
as a matter of fact, I know a couple times I didn't.

Q Rob Owens says that in 1984 he was given
photographs of-- aerial photographs of!
to carry to Cal>^ro, and he understood they came from you.

Do you know why he would have gotten those
photographs if he didn't get them from you?

A Anyone of a number of places but I don't know
where.

Q We have gotten them from the agency?

A Probably could have gotten them from the
agents. Could have gotten them from the DOD, too. They
would have contact with him. I can tell you categorically
I did not give him those photographs in 1984.

Q Do you recall giving some maps to North to
be brought to the contras in March of 1985?

A No, and I wouldn't have done it in March of
1985 because the Boland restrictions were still in place.
I would have found a way not to comply with a request like
that if I was given one.

Q Do you recall giving any maps at any time to
North to be brought down to the contras, maps that were
too large to be carried on a commercial flight?

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1 A No. God, no. Absolutely not.

2 Q Do you have any idea what I am talking about?

3 A No. Throw out your exhibit and let's look

4 at it.

5 Big maps?

6 Q I'm sorry, I don't have the first interviews

7 of Robert Owen. I have the second. I will just quote

8 a passage from it.

9 On the map story of March 1985, previously

10 summarized, Owen said^^^^^^^^H| had prepared the maps

11 which he was supposed to take to the FDN. At first,

12 however, the maps he gave would be too large to carry on

13 commercial flights, and they had to have them redone."

14 Do you know what he was talking about?

15 A No, and in 1985 we had hard core Boland

^g restrictions and we would not have prepared maps to give
^7 to the FDN, because we were prohibited from providing
^3 any intelligence. I would not have done that kind of

19 task.

20 Q You didn't do it at that time?

21 A No.

22 Q Do you recall doing it later?
A Intelligence maps for the FDN? We provided a

lot of intelligence of 1985, but I don't recall preparing
a big map and that kind of stuff.

Q Did yHMft|d^ PiMf If ft N°'^t;h to give

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1 to them?

■2 A North asked me one time as I — at some time

for air defense information, jumping up and down* and I
don't think I gave it to him, but this would have been
in the spring of 1986. I don't think I gave it to him,
but he was particularly forceful at that point m time<|
l^d I don't think-I did, but there is a possibility I might

8 have. But on the other thand, that I didn't.

9 He would ask for intelligence, and I would

10 back away from it. Now there is — he could have

11 gotten a lot of other intelligence in his role as director

12 of Central American Affairs for NSC. It was er|ijt)rely

13 possible I provided briefing boards for the President

14 or for Poindexter or McFarlane, because he would ask for

15 them and I don't recall specifically doing it, but

16 where I would have done a briefing he would say, ""Give

17 me that. I want to use it for briefing," this or that or

18 the other thing, and I may have given it to him.

19 But, "Would you take that down and give it to

20 the contras or the FDN for me," that is not how we do

21 business, and it is also against the clear instructions

22 i" the prohibition.

23 Q North asked you for intelligence information at

24 a couple points that you didn't give him.

25 A A couple points in time I backed away from it.

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1 Q Did he say it was for the contras?

2 A No, it was for the NSC, but I didn't give it to

3 him because I didn't like the feel of it.

4 Q You went to a meeting in Don Gregg's office in

5 August with, among other people, Michael Abrams.

6 A I don't think Abrams was .here.

-^"^ 1

1^7 Q You don t think Abrams was there!

8 A No.

9 Q When did that meeting take place?
10 A . Sometime in August of 1985.

kjff^'" Q mui the 14th of August'

12 A The date is around the 14th of August. I

13 don't remember the exact date.

14 Q Who asked you to come to the meeting?

15 A Don Gregg.

1g Q Did he say why?

17 A To discuss if he likes Rodriguez and problems and

18 such.

19 Q Did anyone else from — was anyone else from

20 CIA asked to go?

21 A No, just me.

22 Q Who else do you remember being at the meeting?

A Bill Walker. Admiral Core, I think. Ray
G)u.ir-<ika»-it'

1^^ DawlJhapdt , myself, Bob Earl, ^W* Watson, and Don Gregg.

I am vague on whether or not Colonel Steele was there. I

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:just can't remember. Vaguely I remember he was, but I
would never put my hand up and swear to that. I don't
think Elliott Abrams was there.

Q I think you are right. I quoted from the
wrong list.

A I don't think Jim Michael was there, although

he could have been. Bill Walker was the senior state

representative at that meeting, I think.
■.■a ."i'£ .-

MS. MCGINN: Was that 1985 or 1986?
• THE WITNESS: 1986.

MS. MCGINN: I think you said 1985.
BY MR. BARBADORO:
Q How long did that meeting last?
A I can't — half an hour. I don't know, 4 5
minutes. Wasn't a long meeting, as I recall.

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mmm

Q And what happened at the meeting?

A The thrust of the meeting was two-fold. Some of
this I recall now after reading over accounts of it. The
part of the meeting that I remember was I was getting beat
up severely by Don Gregg about the negative agency
attitude about Maximo Gomez, Felix Rodriguez, who was real!
a good guy and not a bad guy and who had the best interests
of the U.S. Government at heart and so on^^d he really
didn't understand why I didn't love him and that we should
understand that he was a decent person.

And they went into great lengths to convince me
that he was -- he, Felix Rodriguez -- was okay.

Then there was a long discussion about the
^^^craft^^mmmand that Felix was afraid that they
would be stolen by disreputable characters. My recollection
of that has been significantly refreshed by reading things
in the newspaper subsequent to the meeting.

I didn't really recall that other meeting, but

I do now.

Q Who was the disreputable characters that were

discussed?

A He didn't go into great detail on that. He didn't
name names, as I recall. I remember at that point being
once again distinctly nervous -- not nervous, but ]ust
uncomfortable being there. I didn't like the way the

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discussion was going. It was obvious that they were leanmo
in on me to ma)<e some declaration about what we were goinc
to do with these airplanes when the program came back on
line, because at that tfime it was clear we were going to have

Q Prior to that point, had North come to you and
asked you to purchase the aircraft?

A Yes.

Q When did he come and ask you to purchase the
aircraft?

A July-ish.

Q What did he tell you about the aircraft?

A He yjst said, "Why don't you purchase tr.ese
airplanes? They are there, working. They are good
airplanes. Could you buy them for -- would you be willing
to buy them? Why don't you buy them?"

I told him, "Ollie, they are hot cargo. First,
they are bad airplanes, junk buckets."

Q You knew they were m terrible condition.

A I knew from way back with our discussions with
Dick Gadd that the C-7 was a bad airplane. We knew
technically it is a bad airplane.

We know they are old. We know that to maintain
them is difficult. They are gas hogs. They are not
reliable, blah, blah, ancfl^^^^^^^^H told me a long tirie

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back in this operation we want good equipment. He was the
fellow that was one of my advisors. So we had made a
decision in May what kind of airplanes to fly.

And I told Ollie, "No, they are hot cargo, they
are bad airplanes, and I am not going to buy them."

Q Did he offer to sell you the air strip, too?

A The air strip inj

Q In

A No, because at that time we never -- at that time
the thing was shut down an^^^^^^^^^^^^^^^Bhad said
you can't use it.

Q Did he discuss a price for the airplanes?

A No, I don't remember a price on the airplanes.
I can't say yes or no, because I have read so much subsequent
to thet.

I just remember him asking us to buy the airplanes.

Q Did he tell you who would be selling the
airplanes?

A No.

Q Did he tell you how he had come to be authorized

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to offer them for sale?

A NOi he said, "Why don't you buy them from the
private benefactors? It would be a good thing, and then you
have^^^^^^^^^^^^^^^^^^^^^^^^^^^^B "

I thinJc what he really wanted for us to do was pick
up the whole thing kit and cabocdle.

Q At that point, did you know that Secord was
connected with the private benefactor operation?

A By that time I had developed an understanding
that Secord was around it, but I don't think it really*
crystallized even at that point that Secord was the private
benefactor.

But I knew that — I knew he was around it. :f
you recall, there was an announcement or a publication,
I think, prior to that or around that time on television
that Secord was involved in the sale of the Maule aircraft
and so on and so forth, and either right m that tixe frame -
either before it or shortly after it, I began to develop .
an understanding that Secord was really — had his footprint
on the middle of this thing.

But I didn't really know the extent and depth of i
until things started to unfold in the fall of the year.

Q Let's go back to the meeting in Gregg's office.
Was there any discussion about the fact that
this — that Felix had been charged with air piracy for

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stealing one of the aircraft and th

was upset about the way Felix was being treated and that the

whole operation was in danger?

A There were discussions about Felix having
tremendous friction with the people running the airplanes.

being upset, thinking that the airplanes
were going to be stolen or taken away and they would net be
available to support the resistance.

The air piracy thing I don't remember specifically*
but I remember there was a lot of discussion about the
friction, the tension, the bad guys, Don Gregg warning
us -- Don Gregg has told me subsequently again, |^.d I had
forgotten this, and he says -- he said it, so I believe
It -- warning me not to buy the airplanes. And I told .'-.im,
"Don't worry, we are not going to buy them anyway. They
are hot cargo," blah, blah, we won't touch them.

Then I remember walking out of that meeting and
rolling my eyes, saying that that was the wrong meeting
to be at.

Q Did Don Gregg mention Ollie North's relationship
to these private benefactors in this meeting?

A The clearest recollection I have of Ollie North
out of that meeting was Bob Earl saying, "Ollie North
should be here. Ollie should be at this meeting," a
I-really-don' t-know-what-to-say kind of thing.

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Q Did Greqg mention Ollie North's connection with
these people in any way?

A I don't recall him specifically mentioninq
Ollie North's connection with these people. I remember
him looking -- I remember him and Bob Earl talking about
Ollie and saying -- I don't know, really -- Ollie should be
here to answer the questions.

I remember when Ollie came back he was upset that
the meeting had taken place.

Q You remember -- you were told at least that Don
Gregg -- you do remember that you were told -- Don Gregg
said to you, "Don't buy the aircraft."

A Yes, and I don't doubt -.-.at he said soretr.ir.c .i-'.e

that.

Q What other decisions were made or discussed about

how to deal with this problem?

A There were no decisions made. Everybody was
terribly reticent at the meeting. I remember Bill Walker,.
Ray BuxAhardt, and myself were backing away from this thi.-.g,
saying. "Yes, yes, yes. Ambassador :or-- was — they are
talking in terms of the importance of the Felix Rodriguez
^^HH connection and that that is an important thing,
and you can't try to break that. They are padres," and
so forth and so on.

The only two things that I can remember that were

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decision-ish was that we. would sort of not trash Felix,
that we would ]ust try to — try to get along with him,
and we had taken that decision.

And second was I said, "We are not going to buy
those private benefactor airplanes for these reasons. Don't
worry about it." That sort of closed down that area of
concern, as best I can recall.

Q Now, you have said that when you walked out of
the meeting you said to yourself, "This is a meeting you
shouldn't have been at."

A Would rather not have been at.

Q Would rather not have been at. And you can recall
everybody trying, or most everybody trying to back away
from It.

A Yes,

Q Was it your feeling that things were being
discussed at this meeting that you didn't want to know or
that It was possible that things would be discussed that you
didn't want to know?

A It was possible. I think my recollection was th(;re
were things being discussed there that I was not interested
in knowing, yes, or being involved with or being around;
and I just wanted to be away.

Q You knew it was dangerous if you heard things
about Ollie North's connection with this group, right?

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A I knew that I — I knew from the very beginning
of my time in the task force that I wanted to stay away
from harm's way and backed away from things that were, in
my view, controversial either politically or questionable
legally,' and my tack was to play a passive role, to not
seek things out and look the other way.

Q Why were you so concerned about looking "he other
way at this meeting?

A Well, because there was discussion of -- they were
discussing the private benefactors. They were discussing
Felix's role with the private benefactors and sort of
indicating to me that they wanted to really come to grips
down to the nuts and bolts of that operation.

Q Weren't you concerned that when you got to the
bottom of it there would be a U.S. Government connection
to the private benefactors and that raised a question of
illegality and you didn't want to know that?

A There was a concern that I didn't want to be in
that meeting, because I didn't know where it was going.
And I wanted to back away. You know from most of your
fact gathering and from my testimony that that is what we did
at the agency consistently. Whenever we were someplace we
felt uncoraforta(liJe we backed away.

Q But let's be clear. You knew Ollie North was just
as close as could be to this operation, and you didn't want

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to have anybody tell you that directly, ^o you wanted to get
out of that meeting as fast as you could, right?

A I didn't want to discuss it. And I wanted to
get out, be out of that meeting so that I was not in that
situation where we were discussing the inner workings of
what was going on.

Q But be frank. The reason you didn't want
to discuss It is because you knew of Ollie North's connection
and you didn't want to have anybody confront you with it?

•MS. MCGINN: Objection to the form.

You have asked that a number of times^ftnd you know
you are fishing for an answer, but he gave you an answer.

BY MR. BARBADORO:
Q Give me an answer.
A I will give you an answer.

Our policy — I think the U.S. Government policy,
the agency policy — was one of keeping ourselves legal,
not getting involved with the private benefactors, and not
interfering with their operations and looking the other way,
not probing it, not interfering with it, and not
supporting it.

And I was keeping — I was staying — I felt that
that meeting put me in a place where I was being pulled
beyond where that policy took me, and I didn't want to be
involved in it. And I didn't want to be involved in a

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discussion of what Ollie North or anybody else — Felix
Rodriguez -- may be or may not be doing. I didn't want to
be involved in that. I wanted to stay out of it.

Q If there were no U.S. Government connection to
what Felix Rodriguez were doing there would be no problem
for you knowing about it; isn't that right?

A If there were no U.S. Government involvement --
that is right, yes.

Q The problem you were worried about was the possible
U.S. Govetnment connection, right?

A The problem I was worried about was the unknown,
where the money was coming from, and getting involved in
what may be a private benefactor operation that related
back into the unknown that I didn't want to be associated
with*,' because I was still dealing under restrictions,
restrictions saying that I could not be involved in providing
support to the contras outside a very narrowly defined
thing.

Q But your knowing about it wasn't providing support.

A That is right, but I didn't want to know about
it. And that is, you look through the testimony from October
of 1986 after the C-123 crashed in southern Nicaragua, in
testimony in front of the Senate Foreign Relations
Committee. That is exactly what we said. We remained in the
status of willful ignorance on this.

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Q You knew that Ollie North had a pre-existing
relationship with Max Gomez, right?

A Yes.

Q You knew that he had a relationship at least to
the extent that he was supporting Gadd ' s effort to get a
NHAO contract.

A I knew he was arguing in favor of Gadd -- was
a proponent.

Q You knew m February of 1986 that Ollie North
was in a position of controlling the disposition of these
flights.

A Not controlling. I knew that he was in a
position of influencing them, and that Felix listened tc hi:n
and wouldn't listen to me.

Q You knew Ollie had pictures of the private air
strip?

A Yes.

Q And you knew Ollie discussed the air strip on
several occasions?

A Yes.

Q Isn't it true that you knew that Ollie North's
fingerprints were all over this private benefactor
operation and the reason that you didn't want to be at that
meeting was you were afraid somebody might say it?

A I knew from I think when we start back into

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November of — early December-January of 198 5 that 01 lie
North was deeply involved in the program for arranging
private support to the resistance forces.

I have said -that from the beginning, from the time
we began this thing. I did not know the details of how
Ollie did that. I didn't seek the details of how Ollie
did that. I didn't know whether or not he was directly
involved in the management.

As time came along and as I -- as this developed,
I developed more of an understanding of Ollie being in the
center of this thing. I still didn't understand the details
of it, but I knew that he could influence it.

I knew that he could affect it. I knew he knew
what was going on, and I knew he knew the details. And
I took a position that I didn't want to know the details,
and even on a couple occasions Ollie said, ^^^^H you don't
want to know."

I said, "You're right, I don't want to know."
And I didn't want to know. I felt this meeting put me m
a position where I might hear things I didn't want to
hear.

Q We have reached —

A I said to myself, wrong meeting, wrong time, wrong
person. I shouldn't be here.

MR. BARBADORO: We have reached a time where

UMPUJt&lHEft.

1210

I have to break if I am going to make my flight.

I would represent to you that I have very few
questions. I would imagine that the people from the House
would have a few, and I would think maybe another hour or
two, if we can schedule it sometime when you got back from
your trip, we can finish it.

If there is nothing else, we can adjourn the
deposition until a time we can agree to reschedule it.

(Whereupon, at 2:37 p.m., the deposition was
adjourned..)

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N«t far QMtetkB «r MttTB /V\>r-7

pSITlON OF _-

Monday, May 11, 1987

Select Cononittee. to Investigate

Covert Arms Transactions with Iran,
U. S. House of Representatives,
Washington; D. C.

Dl^'

Committee Hearings

«f tks

U^ HOUSE OF REPRESENTATIVES (^ S 0 5 ^

W Partially Dec.'assified/fie/eased en JlW^f fi

under proWjionj of £.0. m^T^^^
^3.Reger.i;ctiona|SepurityConcH

OFFICE OF THS CLKRX
Oflka of OAdsl lUpMlcn

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CONTINUED DEPOSITION OF

■■■■ c/b/^rF

Monday, May 11, 1987

Select Committee to Investigate

Covert Arms Transactions with Iran,
U. S. House of Representatives,
Washington, D. C.

The select committee met, pursuant to call, at 9:00 a.m.
in Room H-139, The Capitol, with W. Neil Eggleston (Deputy
Chief Counsel of the House Select Committee) presiding.

Present: W. Neil Eggleston, Deputy Chief Counsel;
Richard H. Giza, Professional Staff Member; Tim Traylor,
Investigator; and Robert W. Genzman, Minority Counsel, on
behalf of the House Select Committee on Covert Arms
Transactions with Iran.

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MR. EGGLESTON: H^^^^^R as you Icnow by now,
my name is 4W«ri» Eggleston, Deputy Chief Counsel to the House
Select Committee.

This IS a continuation of the deposition that you
began a week ago last Friday, and we appreciate your coming
back. It is really at my request that you come back, and
I appreciate your cooperating with us.

I ]ust have a few questions that I was unable to
ask at that time, because I was not available. Some of them
are follow-ups on questions that you were asked at the. time,
and some are slightly in different areas.

I don't anticipate this will take very long at all.
I think when I am done, Mr. Giza, an associate staff .-ne.T.ber
of the Select Committee, and is also a staff member of the
House Intelligence Committee, may also have some questions
for you.
Whereupon,

was called as a witness and, having been previously duly
sworn, was examined and testified as follows:
EXAMINATION
BY MR. EGGLESTON:
Q ^^^^^^^^H you were asked last time, 10 days ago,
about whether or not you had had any communications with
Colonel North in November 1984, in or about November 1984,

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about some — I guess they are Hind helicopters that at that
time had been transferred or had been introduced into
Nicaragua .

Do you recall, first, being asked any questions
about that last time?

A No, I don't recall any questions like that being
asked about that last time.

Q Whether you were or not, I have some questions

about It.

Do you recall that in November or so, the fall of
1984, there came a time when the agency learned that Hind

helicopters had been shipped intc

Nicaragua?

A Yes, I remember the incident very clearly, and
I think with counsel's indulgence, the best way to set the
ground work is to lay out the scenario.

Q I was ]ust going to ask you to lay out the
scenario.

A In late October or thereabouts, in 198'

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There was considerable concern in the Administra-
tion at that point in tha^^^^^^^^^H was delivering

MIG-21S H^^^H^HHI^IHiiHHB ^^'^^^^^'

you krow, MIG-21 is a high performance aircraft, is one of
the markers that the Administration has laid down. If the
Nicaraguans do that, it precipitates at least the threat
of certain actions.

»re was an
interagency group meeting, I remember very well,* because
It was on election evening, 4 November. I was supposed to
go off to sort of an election evening party with my wife,
and they called an interagency group mgeting at the State
Department, and Tony Motlette chaired it.

I was there from the CIA. There were people from
DOD, other State — Oliver North was there. And general
discussion was whether or not MIG-21s were coming, what we
would do about it, what reactions could be done, and so on
and on, so forth.

Among those discussions, as I recall them, there
was some discussion about if MIG-21s come, are coming, even,
then what? What actions do we have? And are the CIA
contingency plans that were laid out in the past, which

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I learned of at that meeting, still valid, which called for

to them that is not within the law of feasibility, i:ecause
we were barred from

That meeting broke up, and several days later --
I don't remember the exact time^^^^^^^^

"lad delivered
what we thought were Hind 24-D helicopters.

^^^^^^^ It would have been some
time later in November.

And there was a lot of discussion then about what
to do about Hinds, because it slipped in between the crack.
It was a high performance, sophisticated system, but it
wasn't a jet aircraft, and it didn't hit the markers.

And there was a lot of discussion about what the
Hind does, how it impacts on the balance of forces between
the Sandinistas and the resistance, and its performance
capabilities.

And there may have been — I don't recall
specifically — there may have been some discussion about
what, if anything, could be done to take Hinds out; but it
was very clear from that point that the agency's position
was we couldn't do anything, that our hands were tied,f||nd.

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therefore, the previous scenarios that we had discussed
were -- had really worked out, were not, couldn't be further
considered.

Q Was there any discussion about ^^^^^^^^^^^H the
resistance in talcing out the Hinds?

A Yes, because the resistance -■
resistance in taking out the Hinds

And one called for the use of -- both called for

and so,

therefore, there was a lot of discussion. Specifically,
I asked, "That plan there, can it be done?"

And the answer to the above was "No, it can't

be done."

Q I take it what you mean when you say it can't
be done is the resistance could do it all by itself.

A The resistance didn't have the equipment or the
expertise to do it

|to do the job and

providing the intelligence.

They had^lIBB but they didn't have the

equipment.

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So, H^l^^^^^lii^^^^^^^l ^^^^ were not
really capable logistically of carrying off destruction of
the Hinds?

A That was our assessment, yes, and that was, in
fact, true.

Q Do you recall whether around this period of time
in connection with this incident any
^^■r.aps showing positions were provided to Colonel North?

A I don't recall that they were provided, but it is
entirely possible. Everybody was jumping around and saying,
"We want this; we want that; where is that; where is the
other things?"

I don't recall giving him any intelligence,
saying, "That is where they are," but someone might have.
I r-.ight even have sort of at some point in time.

Q But in any event, if you did or if someone at
your direction did, it was clear to you it was not so that
that information would be provided to the resistance?

A If I gave Colonel North any intelligence or
anybody else did at that point in time, it was because of his
position in the White House and his position as the NSC focal
point for Central America affairs to keep the National
Security Advisor and the President sort of briefed on what
was going on.

And he did have access to, from multiple channels.

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all the intelligence on this.

Q And th.en to follow up, so if it was provided, at
least at the time — assuming you did provide this material
to Colonel North, it was not your understanding that Colonel
North would be providing it to the resistance?

A That is exactly right, yes.

And I don't. recall specifically having provided
it to him, saying, "Here it is, Ollie. Take it."

Q I understand.

• Let me just asJc about a similar incident about
which we have received some information. I just want
your recollection, or whatever, of the events in or about
March 1985.

We have received information from other people,
March 198 5, there were additional maps provided to Colonel
North by people at the agency that reflected Sandinista

battle positions, ^"^^^HHIIIJ^^^^^I

Again, do you recall whether around that time you
or anyone at your direction provided maps to Colonel North?

A Let me get this — March 1985.

Q Showing Sandinista battle positions.

A Sandinista battle positions. March 1985 would
have been when the Sandinistas were preparing for their
first attack on Honduras.

Q Right.

1220

1985.

A The attack actually took place in early May of

Let me take the second half of the question first.
Q Sure.
A

I do not recall providing maps to Colonel North
that outlined those positions.

There is a possibility, once again, in
conjunction with his White House job, because I might- have
given him some schematics of what was going on -- there was
a lot of concern. The director was concerned. We were all
concerned about what appeared to be a growing incursion
into Honduras. It is possible that he asked for some
schematics of those things, but I don't recall having given
them to him and certainly didn't give him the kind of
specific maps that would allow for tactical intelligence
support, at least that I can remember.

Q You don't recall, then, if it occurred, an
incident where maps were provided to him that were not
suitable for travel?

A No. I was asked that before, and I don't have
any recollection of that.

Q I know you were asked that before, but from at
least my understanding, I think that was after I had gone.

1221

HmggSRig

and from my reading of the transcript there wasn't much
connection to it.

A I want to say for the record, there were a few
times in there -- and 1 can't put dates and places -- where
I was asked for intelligence that I thought might have been
bound for the resistance, and I didn't provide it, didn't
respond.

I can't remember dates and places, but
I remember a couple times when I just — I was very reluctant
to provide that kind of stuff.

Q Were these questions that you received from
Colonel North?

A Yes.

Q What kinds of stuff? I know you can't remember
the dates.

A You know, what is this, can you tell me where this
is, give me this map.

I just didn't want to get involved, because: the
restrictions were very, very tight on us, and I didn't know
what would be done with them, so that was one of the places
where I hung back, one of the first instances where I can
remember hanging back.

Q This would have been the time period between
October 1984 to August 1985?

A Yes.

1222

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WfflJISSJRE^

Q In the most restricted time period.

A Yes.

Q Do you have any recollection of what the specifics
were that he was asking about?

A No, just vague generalities of being asked for
things and just sort of going through the mental processes --
that is something to brief the White House- or is that
something that is beyond that, and if it was beyond it,
I just got a little reluctant to do it.

• See, it is important to know that from almost
the beginning in my dealings with Colonel North I applied
roughly the same criteria that the law applied to dealing
with the resistance* [|id I'^uiit|UO my activities within,
roughly along the same lines, trying to balance his White
House job, sort of thinking he needs this? but I want to
make sure, because I knew he dealt with the resistance, that
I wasn't going beyond what I could do with the resistance.

Q Did you have any tangible information that he
might be — that he might have provided this material to the
resistance if you gave it to him?

A No.

Q Or is it just a feeling that you had?

A No, he was very, very, very close with Adolf o
Calero at that point in time. You can say he was the
principal contact in the U.S. Government with Adolfo Calero.

1223

'CMBUaBGa^ilh

I think I testified to that point.
Q Yes.

A And it was just one of sort of — that
I approached from that point of view.

MR. EGGLESTON: Let's hold off for a second.
(Discussion off the record.)

THE WITNESS:' That is my vgue recollection,
and I ]ust wanted to lay out the way I responded to those
things.

•BY MR. EGGLESTON:
Q Let me ask you about another specific event,
and just ask you whether you have any recollection of this
or whether this is something you had heard about.
Again —

MR. PEARLINE: Off the record.
(Discussion off the record.)
BY MR. EGGLESTON:
Q I was about to ask you about another incident
and ask you whether you had any knowledge of it. It is an
incident that we have heard from other people we have talked
to.

That is that in late March 1986 there was a SAT
plane that was involved in a NAHO flight!
We have heard that there was a plan for the flight to drcp

1224

it>i^m^geg&-

s^'

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medical goods ^fH^^^^H ^^ that location, to pick up arms,
then to take the arms t^^^^^^^H where they would be
packaged for an air drop. And when the aircraft landed in

there were no arms released from the FDN so
they could pick them up and make the drop.

We have also heard that various agency officers may
have helped, or attempted to help, I guess I should say,
in order to get the arms released so that this flight could
pick up the arms and make a drop to the Southern front.

Do you have any knowledge of this incident?'
A Once again, that was touched on peripherally
in my testimony last time.

Q I think that is right.

A So let's take it from there.

The KL-4 3 message said that I approved the flight.
That is not true. I don't recall having ever discussed
that flight.

Certainly, given the posture that I took,
I wouldn't have approved it even if someone would have
discussed it with me.

The second thing it said was tha
keeping things from him -

I don't recall any of that.

Subsequently, I went back and reviewed all of the
record and our files, and it is clear that during that time

1225

TCH>jaCGB3aB

frame there was traffic going back and forth about a supply
flight to the Southern Iront.

It didn't make reference to a SAT-C-100 or L-lOO
or talk in specific terms, but it did talk about a private
benefactor flight.

Q Did you say it did or did not?

A It did not .talk in specific terms, as I recall,
the traffic, about an L-lOO and how it was going to work,
but it talked about a flight to the south and the fact that
the FDN was not being totally supportive.

We instructed^^^^^^^^^^^l^^H^Bto
with — tell the FDN that they should support that flight,
should support that, and that he should press upon the F3M
the need — and we did it in this kind of a way, and I don't
have the specific cables in front of me — but they should
impress on the resistance the need to share with the south
and to support the south and to do — meet with the FDN
and make it very clear that that was our position.

Now, I think that is probably part and parcel to
what General Secord was reflecting on in his testimony when
he talked about some support

It was, in our view and in the view of our
general counsel, permissable under the modified guidelines
in the Intelligence Act of 1985 for us to relay that type of
information and play that intemediary role.

1226

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That is what we did in that particular instance,
and ^H^^^^^^^^^^^H ^^ s under that

we considered to be consistent with the modified guidelines
of 1985.

But we didn't approve the flight. We didn't
get involved, to my knowledge, nor did we instruct anybody
to get involved in actually breaking things out or telling
specifics of what should be provided, but just saying
in a generic sense that you, the FDN, should share what you
have and try to assist the south, because it is in your
best interests to do so, and try to faciliate communication
and cooperation between you two.

Q Was It at the time that these instructions were
toH^^^l^^mf^^l^^^^^^^^^^^^^B- -
clear that it was going to be lethal material that the south
was supposed to break out in order to help out the Southern
p-ont?

A If you look at the traffic, it wouldn't say
"lethal material", but we didn't differentiate, and we were
telling them to share what they had. And the problem was
lethal material, and by inference, that was yes.

So, once again, our general counsel has reviewed
that law and that law as we interpreted it, and as general
counsel interpreted it, did not differentiate between
lethal and non-lethal material.

1227

TSMBiaSGJMg-

20
21
22

23
24
25

It talked about being able to provide, deal in
an advisory capacity, and in a generic context with material
of all types and being able to work within a very carefully
structured framework on that. And it was that interpretation
we were working on at that point in time.

So, what I want to put on the record is, if that
is the inten*- and that is the kind of assistance that General
Secord was making reference to in his testimony, then that
was being done by H^^^^^^^^^^Hwith the CIA headquarters'
knowledge, specifically.

Q Does the cable traffic reflect that
was also involved in attempting to get this material broken
out for distribution?

A The cable traffic would reflect, as I recall it,
being — ^^Hj^^^^^B be i ng involved in the
process, yes.

Q As of this time, March 1986, you had a compliance
of ficer, or whatever his name was, assigned to the Central
American^ask ffcrce.

A Yes.

Was ^h^^^i^miB

A It might still have beerHH^^^at that point
in time. ^H|Ban<^^H|both were working there and
reviewing the traffic.

Q What I was curious about is whether they gave any

1228

advice about this particular --

A They would have seen that traffic, and they would
have been aware of it, and they would have given me advice
if they thought it was a problem.

Tne practice was if I thought it was a problem,
I would refer it to them. They JUt all the traffic and had
access to it. If they thought it was a problem, they would
bring it to me and say, "That is a problem; you better
back away from that."

'As you review traffic, you can see places where we
would come up and come back as we would stay within these
parameters, and sometimes I pulled ourselves back, and
sometimes the compliance officer pulled me back.

Q Did you see the part of the — I guess you have
just mentioned it — General Secord's testimony where he
indicated he had a personal meeting with Director Casey?

A I did.

Q And I think that he identified that as taking
place in about March or so of 1986. I think he was not
absolutely specific on whether it was February or March,
but at least in that general time frame.

Let me ask you first — were you — at or about the
time this meeting took place — were you aware that the
meeting had taken place?

A I was not aware. I previously testified to that.

1229

'WdiM^^Sm

Q Right.

Do you recall whether or not, or did you have any
conversations with Director Casey around that time which led
you to believe that he had met with Secord or that he
wanted the Central American fask ^rce to provide additional
information or help to the contras?

A I had no such conversation with Director Casey
and had no indication that -- or no pressure from him to
modify our operating instructions.

Q Anything from Mr. George?

A No.

Q Or anyone else, I take it?

A NO.

Q There was an incident which took place apparently
in March of 1986 — in or about March of 1986 — where
General Singlaub went to Central America and met with
Eden Pastora and concluded an agreement on behalf of the
United States Government.

Can you tell me — and you are pretty good
giving these in narrative fashion — what you knew about
that event, whether you knew of it in advance and what
reaction t.. re was to it?

A I didn't know about it in advance, and I don't
think anybody else did in advance.

As I testified previously, from the fall of 1984

1230

t^^ftSf^f^

forward we developed a policy of ignoring Eden Pastora,
because that was all we really could do with him during
the hard core Boland days, was ignore him.

We couldn't actively work to try to limit the
damage he did then during the NOHA days and the attendant
legislative framework we actively worked not to provide him
with assistance from NOHA.

There is a reason for that. We had made a very
careful review of Eden Pastoi

is deeply involved in drug running, and
that for multiple reasons we just didn't want to deal with
Eden Pastora, not to mention the man's personality.

Even had he been above those two -- and we were
not so certain whether he was or wasn't — we couldn't make
a clear distinction -- but we knew that he was a mercurial
personality that was subject to manipulation by his
friends, that he reacted badly to things U.S., and we had
not been able to establish a cooperative relationship with
him.

His staff and friends

[they were drug smugglers or involved in drug
smuggling, and we made a decision, one I defended ardently —
that you just can't deal with this man. You can not.

1231

rilMH

'Bft^a.asgjPig

Therefore, NAHO didn't deal with him, either.
None of his forces in the 1985 to January 1986 time frame
got anything. Nothing.

I think the record is very clear that we conceived
of an operation in late 1985 to take -- skim off or take
away from Eden Pastora those commandantes, those forces
in the south which were reasonable, which were entities
we thought would be worthy of support. And as the laws
changed , ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^H and
working towards that end.

We were well into that operation in March of 1986,
and part of that operation had as its undertaking not
dealing with Eden Pastora or any of his entourage,

and trying to pull
them into a new collective.

It was within that context that — and it was
controversial. There was congressional pressure from both
sides of the aisle, and not the center sides of those
aisles, but a little bit further out to the right and left,
in support of Eden Pastora. There was that — that pressure
was being brought to bear on the State Department.

The State Department doesn't like congressional
pressure, and they were putting pressure on me to ti tnfpk
the position, and we were pretty firm. We knew we had it
right and didn't think it was worth changing.

1232

IJ^fi^i^faif

Bill Walker and State Department had a
couple meetings with Eden Pastora, trying to talk with him
and get him to do things and to prove that he was someone
we could work with. And each time he proved ]ust the
opposite.

It was in that context that one day I got a message
on my desk through the|^^^|H|^channel -- that is a channel
which is CIA communications through which an ambassador
or any other entity can communicate to specific addressees
in their parent organizations.

This particula^^^^^^^^Jmessage went, as I recall
it, to the State Department for Elliott Abrams, White
House for Oliver North, and to me, and to somebody m OOD.
And it said that, "I, Ambassador Tambs, have talked to
General Singlaub," and and General Singlaub had struck this
deal with Eden Pastora.

I don't remember the text of it, but that was
the thrust of it.

So, we had General Singlaub negotiating with
Eden Pastora on behalf of the U.S. Government, and I went
bonkers. What is this? This is contrary to everything
we are doing. This is not the right answer.

It turns out that the message was released without
the ^^^^^^^^|HH|^^H^H^H having seen
think that Ambassador Tambs knew exactly what the impact of

1233

wtMmm-

it was; and we backed it off very quickly with some messages
saying that he doesn't speak for the U.S. Government, he had
no right to conclude such an agreement, and it was treated
from the very beginning as null and void or without any
substance.

Q The agreement, as I recall, and as you ]ust
mentioned, does mention that the agreement is drafted m
terms of an agreement between the U.S. and Eden Pastora.

A Absolutely, yes.

Q Do you know whether General Singlaub spoke to-
anyone in the United States Government before entering into
the agreement about that?

A I don't know if he spoke with anyone, but I know
that everybody reacted with the same horror.

It was my impression that he didn't speak with
anybody in Washington about it. I suspect that he might
have talked — I just don't know. I don't know beyond
that.

Q You had mentioned Ambassador Tambs.

A He may have talked to Ambassador Tambs, but that
is pure unadulterated speculation.

Q There was nothing in the cable traffic that led
you to conclude that he must have spoken to Ambassador Tambs?

A Well, it is hard to believe that he would have done
this totally devoid of any context, any discussion at all.

1234

DflflgggKElF

But I don't know that there was any discussion.
One can conjure up an image that, as I said. State Department
was nervous because of the pressure they were getting from
various congressional quarters about Pastora, that maybe
they had talked somehow to Tambs, Tambs had talked somehow
to Singlaub, saying, "Talk to Pastora and see if you can't
work something out; find out if the agency has got it
right. The agency may have this wrong in dropping this.
It is an awkward situation." You know, that kind of thing.
■ But I don't know that for a fact.

Q Was there a RIG meeting on this issue after it
came up?

A I don't think there was a specific RIG
meeting, but it was certainly discussed on phones. Phones
rang hot and heavy there, and there was probably — Eden
Pastora was discussed frequently at RIG meetings, and this
policy was reviewed and looked at under a microscope,
argued, debated, challenged, and this would have been
discussed at the meetings subsequent to it.

Q Do you recall any specific reaction by Elliott
Abrams to this agreement that Singlaub —

A Yes, he was upset by it, too.

As I recall, all of the principals were upset of
the concept of General Singlaub negotiating with Eden
Pastora for the U.S. Goverrtinent and wondered what in the

1235

-fflgiaSSPRIB^

hell was going on.

Q I believe that I am correct that Director Casey's
calendar reflects various meetings with Singlaub in
February or so of 1986.

Do you know what those meetings were about?
Did you attend any?

A I did not attend those meetings.

I have never met General Singlaub. I have spoken --
since the start of this program — talked to him a couple
of times, and my secretary has talked to him, but up until
sort of November-December, I didn't know General Singlaub
and had had no dealings with him at all.

Q Up until December 1986.

A 1986, yes.

Q And --

A By "this" program, I mean the current approvals
to support and fund the contras. Very specifically.
General Singlaub' s organization ^^^^^^I^^^HI ^'^ ^^^
United States that they bought for the resistance forces.
The resistance needs that^^^^^^^^H It is hung up in
Florida, and we have had some discussions and some legal
discussions as to whether or not — I have had some
discussions about their^^^^^^^ft its funding; where it
came from; is it tainted with Iran-contra money; is it pure
from Iran-contra money; what is its export license status;

1236

iwimssiRey-

and have been in discussion with our general counsel as

to whether or not we can assist the resistance in exporting

that^^^^

And the decision is not taken yet. That is the
purpose of the subsequent discussions indirectly with
General Singlaub.

Prior to that time, I didn't know General Singlaub.
I had no discussions with him. The director never talked
to me about those meetings.

■ I was aware, however, unlike the meetings with
General Secord -- I was aware, unlike the meetings with
General Secord, that the director met with Singlaub, but
I didn't know why, and I even think one time I asked, said
something to the director -- "You shouldn't be meeting with
him" or something like that. But I didn't meet with him.
And the director never told me what they talked about.

Q Did you ever talk to, you know, Ben Wickham,
I take it?

A Yes,

Q Did you ever talk to Ben Wickham about
General Singlaub?

A Only in general terms. He told me that one time
he called me up and said, ^Hj^ people have to stand up
for what they believe in. I am going to resign and go work
for the contras."

1237

t^OR.agGCfag'

I said, "Jesus, Ben, you got to do what you got to
do, but are you sure that is smart?"

He said, "No, I an\ going to do it."
And I said, "Let your conscience be your guide."
He said, "I am going to work for General Singlaub.'
I said, "Well, I would think twice about doing
that." And that was about the sum total of my discussir-.s
with Ben,' and Ben came down and said he was going to do it,'
and I wished him Godspeed.

Q Do you recall whether .Hr. Wickham told you that
you ought to be meeting with Singlaub?

A I don't recall him saying that, but he might have
said that. I was not about to meet with General Sir.glauc.
Q Does there come a time around the spring of 1986

when Eden Pastora is arrested?

A No, but as I recall, there was some discussion
of him being arrested and kicked out of the country, but
I don't think he was ever arrested.

Q What was he being -- what was the occasion for
the discussion about him being arrested?

A I am trying to remember just what that was.
I 3ust don't recall. Anything I said would be just a wild
guess.

Q Let me ask you this. The summer of 1986 -- you
may have testified about this* and if you have, let me lust

1238

^Efi^ffSSRey

go through it again — in the sununer of 1986, it is my
understanding that you have some involvement in providing
a bank account to Elliott Abrams.

A Yes.

Q Can you tell me what you know about that
incident?

A Sure.

The story begins at an NSC meeting in the spring —
maybe May of 1986 or thereabouts. I can't place the exact
time. You probably have the minutes from it. I know the
Tower --

Q I think it was an NSPC meeting about May 14, 18,
something like that.

A Anyway, it was chaired by the President. Cabinet
level meeting.

I was there as the staff support for the director.
The thrust of that meeting was that we had
projected that NOHA funding would run out in July, final
funding, and that even though we were fairly confident
at that point in time that we were going to get
congressional approval for a program, unabridged program of
support, that probably wouldn't have happened until the
August recess or even after the August recess. I think by
that time we were pretty clear that it might not happen until
September in the continuing resolution.

1239

DJatflftaBKED^

And the focal point was what to do about
bridge money, what to do about funding the resistance,
that there would clearly be a cash shortfall.

Nothing came out of that meeting. No decisions
were taken, and then we calculated -- we -- Ambassador
Dueml ing and I calculated and sharpened the pencils again
and pro]ected that the force could be fed through July of
1985, and that left a shortfall, and there was a lot of
discussion that the State Department had to get out and
exercise its authority to solicit money from someplace-.

And in that context, sometime in late July,
probably -- not probably — the last week in July, because
I have gone back and checked the dates. Elliott Abrams
came to me and said, "H^fe there is a possibility for us
to solicit money from the Sultan of Brunei. I am going to
London to meet with his emissary. How should we handle
the money? Do you have any ideas?"

I thought a minute and did some fast
calculations, reflected largely on^^^^^^^H program, but
knowing we couldn't put it in a CIA bank account.

I said what we ought to do is ge

to open up a bank account and deposit
the money in that bank account, and then the money can be
controlled so that it is spent under our control via that
account, because, you know,^^^^^^^^^^^^^^^H i-s a good

1240

"P^SB^iii^

guy, and we work very closely with him, and State does, too.
And he is — I was fairly confident that he would spend the
money for the correct things within the parameters of the
law, because the law says, you know, you can solicit for
things in th.e law.

Q So, that would be a way you could maintain control
over it.

A Maintain control over it -- that was exactly right.,
That was what was in the back of my mind, because it could
be controlled m USG, m particular by the State Depar.tment
through that mechanism.

Elliott said, "Okay, can you see if you can do
that?"

I said, "Yes."

So, I instructed my staff to contacfl^^H

and have him open up the
bank account.

Time was short, because Elliott was leaving on
a Friday, and it was mid-week, so he flew tc
and opened up a bank account

Q Who was "he" in that sentence?
;^ l^^^^^^^^^^^^^^l He opened up the bank account
Iwith himself as the signator and his
accountant the co-signator on the account il

You have the account. I don't remember any more

1241

^aassa^

of what it is.

Q Yes.

A And he flew back and called the account number
in, and I gave it to Eiliott, and Elliott said, "Thank you
very much . "

And subsequent to that, I think I aske
Elliott if it was successful. He said he didn't know.
I asked^^^^^^^^^^H| a couple times if any money had

been deposited. .Most recently we asked him in, I guess,
March or so of this year, if money was deposited, and 'all
the answers were "no". That is the story.

Q Are you aware that Mr. Abrams had also asked
Colonel North for a bank account?

A I became aware of that some time -- I think it
was in December 1986.

Q So, well after that.

A Well after. It was attendant to the investigations
that I became aware of that.

Q Did you ever learn from Mr. Abrams or from
anybody that, although today no one seems to be able to
find the money, whether or not the Sultan had agreed to
provide funds?

A I never got a specific answer on that. Elliott
never -- he said he didn't know. He said — and I never
got a neat answer on that, so the answer to your question

1242

'i^iV^t^S^i^fca^

Q I have just two more areas I want to cover.

The first IS that I think it was the Sunday after
you were here larst time Ambassador Tambs had a long piece
in the paper. That was right after you testified.

A Yes.

iQ Mr. Tambs essencrally said, as I recall the
article in the Sunday New York Times, that he acknowledged
his ir.structions were to open a southern frcnt, and he
essentially said he was receiving his instructions from
the RIG at a time when you were on the RIG.

A Yes, and he said I was one of the core members
of the RIG.

Q Okay.

A And the attendant editorial in the ^<»w vori<;_

Q I wanted to give you an opportunity to comment
on the article.

A Having read the article and having gone back and
reviewed all of the traffic related to that, I can say
that the article had truth in it? but the fundamental
allegations that I instructed him to, or Elliott Abrams

1243

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instructed hi^ to provide logistic support to the private
benefa^ctors is wrong.

The allegations that I instructed him --
instructed him to open up a southern front is misleading.
That we supported the ^i.thern Sront, that we wanted the
southern front opened up, that we intended to restructure '
that iouther" ^^- it and were actively involved in it is
absolutely accurate.

We started, as I said, thinking about it in
November-'December of 198 5. The law was changed in December
of 1985, and by January of 1986 we were within the context
of that law very actively involved in manipulating and
working, manipulating the situation and working to
establish the southern front.

Our^^^Hwas operating under instructions and
in close coordination with us — Ambassador Tambs knew it.
Ambassador Tambs was working within that regard. But we
didn't — I didn't — let me speak specifically about
me — I didn't instruct Ambassador Tambs to take actions
that were in contravention of the law to provide logistic
support to the private benefactors or things of that
nature.

5d, my impression of the article was it was kind
of a pitiful article, because he hasn't got it exactly
right, j^d I can't quite see what his motivation is in

1244

T^ftl^^?®^

doing that and outlining it the way he did.

If that was his understanding, then he has sone
misunderstandings.

Q The last thing I want to ask you about is on
about October 14, 1986 you attended a briefing of the
members of the HPSCI staff. I suspect Mr. Giza was present,

The purpose of the briefing — it appears you
were summoned or requested -- the agency, I should say,
was requested to attend, because the Hasenfus plane had
recently gone down^^^d the focus was to -- it appears, from
the questioning, at least, and from the memorandum done
about the pre-briefing -- it was a pre-brief -- that the
members of the committee wanted to know about United States
Government involvement with the operation in the Hasenfus
was involved.

You testified last time that by January or so
of 1986, late December 1985, January 1986, you began to
suspect that Colonel North has got some involvement with
that operation, that in the summer of 198 5 Colonel North
comes to you and wants — suggests to you that the agency
should purchase the assets, that in August of 1986 you
attended a meeting that you really wished that you had not
attended that involved — I can't remember if you were at
the meeting with Felix Rodriguez or —

A Not, definitely not the meeting with

1245

'tOtBil^GRgB-

Felix Rodriguez.

Q You were at the follow-up meeting, I guess, where
Felix Rodriguez was discussed, and some of what he said
was discussed.

Let me just ask you -- there were a number of
questions that were posed, principally to Mr. George,
asking what the agency knew about this private operation,
and Mr. George -- and even more strongly, Mr. Abrams --
both emphatically stated — Mr. George says the agency
had no involvement whatsoever, but it appears Mr. Abrams
states that the United States Government had no
involvement in that private resupply operation.

Is that your recollection of what occurred at that
meeting?

A Generally, yes.

I would have to read the transcript to reflect
my recollection. But generally, that was it, yes.

Q Why didn't you speak up and tell the committee
about your belief by this time that Colonel North was
involved in that operation?

A Let me start off by saying that Mr. George's
position at the agency was not involved in these operations
That is absolutely accurate, according to our knowledge at
that point in time.

Q I understand.

1246

''t9Kt^^S&^

And I think that subsequently we did find out that
was a little more closely involved than the
instructions would have otherwise have had him be,* but still
our office of General Counsel has determined that , from their
opinion, that his activity, although represented a
violation of standing operating procedures and regulations
anH instructions, does not represent a violation of the
law.

So, I think Mr. George's testimony is
absolutely accurate.

I didn't speak up for two reasons. First off,
the question was not directed to me. Secondly, it was my
belief that even though I had bits and pieces of this
thing pulled together, I did not believe it was a U.S.
Government operation. I still don't believe it was a
U.S. Government operation.

I didn't know then what I know now about the
involvement o^^^^^^^^^^H or the involvement, apparently,
based on General Secord's testimony — the alleged
involvement of Colonel Steele, and didn't see the need
to intervene in that testimony.

Now, I have testified in front of the House
Committee in previous times to that in direct response |
to questions by Congressman Brown when he asked me a very
similar question, or questions, why we were not investigating

1247

"• that.

2 Q I have read that.

•^ A And I said to Congressman Brown that so far as

we have been able to tell in looking at it, the trail leads

5 back to the United States and U.S. persons and U.S. money.

6 And that is not a matter for us to investigate. That

7 is where I was,.

8 I thought they were private individuals and

9 was unaware of the scope and nature of U.S. Government,

10 official government positions.

11 I believe Ollie's involvement was one, as 1 think

12 I have described, of the second team quarterback on the

13 sidelines flashing signals to the quarterback playing the

14 game, and not a direct involvement.

15 I didn't think he was running the operation.

16 I knew he could influence it. I knew he could cause it to

17 do things, but I didn't think he was a direct player.

18 So, I made a decision. It may or may not be right.

19 I just stayed silent.

20 Q I would be glad to show this to you. I am not

21 hiding it in any fashion. The Chairman in speaking to

22 Mr. George says -- "You began with a series of denials of

23 CIA involvement in any way, directly or indirectly,

24 in supplying the contras. Does the same denial apply to

25 the United States Government across the board, in other

1248

"pg^iascaCT-

words?

"Mr. George. Mr. Chairman, I can not speak for
the United States Government. I can speak for the Central
Intelligence Agency.

"The Chairman. Can anyone assure us that the
United States Government was not involved, indirectly or
directly, in any way in supply of the contras?

"Mr. Abrams. I believe we have done that, and
I think it is — done that -- that is, I think the
President has done it, the Secretary has done it, and .
I have done it.

"The Chairman. So, the answer is the United States
Government was not involved m any way?"

It seems to me in reading this whole transcript
the direct impression that comes across in the testimony
of Mr. George and Mr. Abrams is that there is no government
involvement whatsoever m this entire operation, and yet you
testified before that you, as well as a numbef of other
people in the United States Government, are, especially by
October of 1986 -- have fairly certain knowledge, although
some of It you derived inadvertently, that Colonel North
was quite heavily involved.

Did you just make a decision that your information
was not solid enough to speak up at that time?

A Well, as I think you can see, the questions weren't

1249

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directed to me, and for that I aiTi extremely grateful.
Q I understand.

A And, frankly, at that point in time, I think to
lay it out there I was ]ust grateful the question was not
directed to me.

And I don't know how to answer it, had it been
directed to me. I knew the CIA was not involved, and
I suppose that is a tremendous parochial view, but I think
that, as you see throughout the testimony and in your
investigation of this entire affair, my position has been
that as I steamed through what I knew to be troubled and
potentially perilous waters, I wanted to kf'ep the agency
off the shoals and clean, and made decisions that were
based on that staying within the parameters," and so I would
have testified similar to Mr. George, that I knew about
the agencijf. J, didn' t know and would not speak about the
U.S. Government.

That was the way I would have answered the
question.

MR. EGGLESTON: I have nothing further.
EXAMINATION

BY MR. GIZA:

continuing on the same line of
questioning that was pursued by Mr. Eggleston, when you
testified before us on the first of May, you gave the

1250

T<ii>aJSBSKEir

general indication in our discussions that you pretty
much knew in the winter and spring of 1986 that people like
Richard Gadd, people like Felix Rodriguez, were involved
in this,* and you had some sense that those same individuals
who were providing humanitarian assistance were also
providing lethal assistance.

You recounted for us at the time an incident on
the tarmac at ^^^^^^^| where there was a load on an aircraft
that was going ^o^^^^^^^fe "^^^ indicated this couldn't
go. You went with Felix Rodriguez, placed a direct call to
Oliver North.

I would like to introduce for today Exhibit 12,
CIIN No. 2307, and show that to you,^

(Exhibit No. 12 was marked for
identification.)
(The document marked as Exhibit No. 12 follows:)

**••• INSERT 1-1 •••••

1251

IJORGCCKE^

BY MR, GIZA:

Q Are you familiar with that memo?

A Yes.

Q You read it?*

A Yes.

Q At the time —

A Yes.

Q -- that It occurred?

A Yes.

Q The memo gives an indication, at least, that
Oliver North was, in fact, a principal focus of this
operation.

One could interpret it that way. Maybe you did
not. But that he had been, quote, unquote, "coordinating"
between Felix Rodriguez and Oliver North.

So, not only did you have this incident with
Oliver North making coordination arrangements, but you had
the incident with Rodriguez where Felix Rodriguez talked
to Oliver North on the phone.

As you went through the summer, you saw
additional incidents where Felix was involved with these
aircraft, where North was also involved.

Isn't it true you told us that North had also
shown you photographs of the airfield ir

A Yes. Nor just me, the whole —

1252

Q Members of the RIG?

A A whole group of people. And beyond that, as
I recall, it was a fairly large meeting.

Q So, you had a general sense that Oliver North was
not only knowledgable of the aereal resupply effort, but
he was also knowledgable of the airfield ii

Let me introduce from the testimony on
14 October 1986 Exhibit No. 13.
A Okay.

(Exhibit No. 13 was marked for
identification. )
(The document marked Exhibit No. 13 follows:)
**•*• INSERT 1-2 *****

1253

^(MRIjasC^jOgfr

BY MR. GIZA:
Q You are familiar with that testimony given by
you during that session on 14 October?
A Yes.

Q While Mr. George responded to the questions as to
the airplane, you also responded, indicating that you did
not know, and again, when the Chairman asked secondly, you
said that you again did not know.
A Yes.

They asked me the question. The Chairman says,,
"You do not know whose airplane that was?"

Mr. George said, "I have no idea. I read -- except
what I read m t^e paper.

The Chairman said, "I understand, but you don't
know?"

^^^^^^^^^^1 We do
At that point in time, if you would have asked
me who owned that airplane, I didn't know who owned that
airplane.

Q You may not have known who the specific owner
of the airplane was, but you did, in fact, know a good deal
about the operation that was underway at

A You couldn't have been in my job and been
competent and not have developed an understanding of the
operation a

1254

w^i^ism^

As I testified before, my job was to keep the
agency out of that operation and to stay within the bounds
of propriety and legality, and if I — I did not allow
myself to develop a deep understanding in specific terms
about how that operation ran, who was behind it, and whose
airplanes those were and so on.

So, I would still stand by that answer an that
point in time.

1255

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9

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12''
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rT"

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If you wanted to ask me whose airplanes those
were, I did not know. If he had asked me, do you know who
ran the operations and what, that is a different question
and that would have been a different set of answers.

But as to whose airplane that was, I am still
not sure who owns those airplanes.

Q The chairman -- you indicated you d rd not know
who was flying the flights or who was behind them. The
chairman said, and you still don't know, you responded,
that IS right; no?

Isn't it true that an individual by the name of
Icame to work for the Central Intelligence Agency
sore time in the summer of 1986?

A I don't know when he came to work for the Central
Intelligence Agency.

Q Werevou knowlegeable of the fact tha^^^^^^^^^^H
had participated in this private benefactor resupply effort?

A Some time after -- I would have to get the exact
dates — after the 123 crashed and I think probably after
that hearing, but again, I don't know that was brought to
my attention. But I have never talked ^=^^^^H|^| ^'^^
made it my business not to be the person that debriefed
him.

Q But there was someone in the Central Intelligence
Agency who had been a direct participant in this effort?

1256

TQi^^GECjiigff

A That is my understanding, yes. But I think that
the record should be made absolutely clear that his clearance
and the process of employment was begun prior to that and
that he was not operating in those private flights with the --
understands the instructions of the agency and indeed, I
think that most, if not all of the agency management didn't
know that he was involved in those private flights. It
came as quite a shock to some of us and indeed to the
management to find out that he was there.

Q Management didn't find that out until after they
hired him?

A I don't know. You would have to ask the people
who hired him and the people for whom he worked. It didn't
ccme to my attention until after the 123 crashed and
we were doing a very thorough interim review and it came
to my attention in that context. Someone said there is this
fellow and he does this. I brought it to the attention of
my superiors. He was thoroughly debriefed and from there
the story, I think, is known.

Q When you had that meeting with Don Gregg, Mr.

Walker, Robert Earl, Ambassador Corr,Colonel Steele , perhacs scr

Others that I have left out, you were certainly knowledgeable
that Felix Rodriguez was a main player and involved with
this private benefactor resupoly effort. I believe that
at the time Felix was also knowledgeable and perhaps made

1257

jni 3

IQjt'GEQRPP

1
2

15
16
17
18
19
20
21
22
23
24
25

known names of other individuals who were involved, Richard
Secord, Thomas Clines, others.

MS. "cGIMN: Are you asking a question?
MR, GIZA: No, no, I am making a statement.
BY MR. GIZA:
Q So all of these individual's names were being
bandied about. Have you ever heard any of these names mention
in connection with the private benefactor resupply effort?

A Secord, yes; Clines, never in direct association
with it. I had seen a couple of pieces of paper that let
me know that Clines might be around but more on the
arms side of the equation than on the air delivery side.

I still to this dayjq don't associate Clines
with the private Benefactors that flew the flights,* but
I saw a couple of peices of paper which would have allowed
me to make the sort of quantum leaps that intelligence
officers, operations officers make, saying, well, I
wonder whether he is involved.

But specifically, no. And I don't recall in that
meeting Clines having been mentioned at all. I don't recall
Secord necessarily having been mentioned in that meeting.

Q You knew from other information that Secord may
have been involved in the operation?

A I believe by that time I had an understanding
of Secord being involved.

1258

^^StK^iti^f-

1
2
3

MR. GIZA: I would like to enter the
following exhibit as number 14, into the record again from
the October 14, 1986 testimony before the Intelligence
CoiTL-ni ttee .

(The document referred to was marked as Exhibit^^Hl4
for identification:)

INSER'^ la - 1

1259

IQ^^-gggRSff

MS. McGINN: If you are going to put this into
the record, I would as)c that you put the whole testimony into
the record rather than piecemeal.

MR. GI2A: We will be happy to do that. We can
put the whole testimony m.

MS. McGINN: Yes, and if you would allow the
witness to see the entire tescimony, it makes it better :=r
him to answer the questions within that context rather than
one page at a time.

MR. GI2A: If the witness would like to see the
rest of this testimony, we would be happy to show him the
entire transcript.

THE WITNESS: Let me loox at his ar.d see tne pa^es
front and back.

MS. .McGINN: Are you going to enter the whole
transcript into the record?

.MR. GIZA: If you would like it, we would be happy
to do that.

.MS. McGINN: Yes ; why don't you make the whole cr.e
as Exhibit 14, rather than one piece?

MR. EGGLESTON: Why don't we make the whole
transcript Exhibit 15?

(The following document was marked as Exhibi^^^lS
for identification:)

COMMITTEE INSERT

1260

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1
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6
7

12
13
14
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16
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20
21
22
23
24
25

BY MR. GIZA:

Q Mr. Brown in the question posed to you on that
page asked that you provide the committee with the information
the intelligence the CIA had concerning the resupply
operation?

A Yes.

Q Since the f"nding cut off — that information was,
in fact, provided to the committee?

A Yes. We provided him all of the intelligence
that we had on the best -- to the best of my knowledge, on
the supply operations. We went back and did a complete
review of t.he files and pulled it together, and I think you
had the documents given to you.

Q Can you tell us^^^^^^^^^ why the Central
Intelligence Agency's memos to^f^m^^f were not provided
to the Intelligence Committee?

A No. I can only tell you that it was a mechanical
breakdown. That decision was taken by the chief of the
reports, which I was not aware of, to do it. There was
nothing underhanded, nothing, no skullduggery intended.
It was just a mistake.

Q What do you term a mechanical breakdown?

A I told the chief of reports that I wanted him
to produce all the intelligence on the supply operations
to the resistance between this period of time. And I don't

1261

-"^mim^mr

JM 7

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. 2

4
5

Kir

7
8
9

V<1

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read those reports when they go out. To my mind it wa
everything. It was only when the matter came up, I think soini
months later you brought it up in somewhat irritated fashion,
that the memo to^^^^H had not gone forward. I went to
talk to my chief of reports who was the technician, the
chief technician that passes this stuff back,* and I found
out he had not g'ven you the memo ti

You will have to ask him why he didn't. He told
me there was sensitive limited distribution and didn't think
that they were to be included. If they were to be included,
they were not sent forward? and it was a mistake.

C Who was the individual who was the chief or
reports?

A HH^H^H

Q ^^^^^^^^^H I believe you aware that the
Intelligence Committee, over the course of the last two
or three years, has been reviewing on a periodic basis,
perhaps every quarter, the agency's reports known as
TDs, those reports produced by the deputy director for
operations that concern reports on UNO and the FDM. Were
you aware during that period of tine over the last two to
three years that again no memos to|^^|Hwere provided
to the staff of the Intelligence Committee?

A No, I was not aware of that. I became aware of
that only at this point in time. I had no intention of

1262

jm 8

1
2
3

4
5
6

not providing you the memos t^^^^^| because to my
mind we had nothing to hide.
Q T'hank you.

I have one other additional question.
Have you ever met with Spitz Channell?
A No.

14
15
16
17
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20
21
22
23
24
25

Q Have you ever met with someone named .Robert
and Jane Drissel?

A No.

Q Thank you very much.

A I would like to read into the record two reports
thatS»*pf§Si by desk yesterday, or Friday evening, and point
out to you^the committee- the damare this committee is do:?.r
to the U.S. interests in Centeral Americe

1263

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These are just two. we see overand over again
since this has begun, Central Araerican countries questioning
the wisdom, the fidelity of the United States and their wisdom
of continuing their assocition with us.

I just JMiuLtit to put that on the record.

The final point I want to put on the record is an
excerpt from the CIA legal opinion regarding the Intelligence
Authorization Act for fiscal year 1986, Section 105, Public
Law 99-169, 4 December 1985. Conclusion is based on, this
is — there are two pertinent elements from that. A, CIA
had the authority under that act to provide for information
and advice including intelligence information and advice
for and used by the resistance. CIA had the authority to

1265

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-^Oiiaiucauitf

provide information «ad advic« on r«aistanc« supply efforts
so long •• this did not amount to participating in tha logistic
activitias intagral to raslstahca military or para-military
oparatlons.

Tha finding goes on to point out that in tha
opinion of tha general counsel such advice was not, did not

\^ differentiate between lethal and non-lethal equipment; and
he quotes from that statement made by Senator Durenberger
from the Floor of the Senate in the Congressional Record,
S-16074, daily edition, dated 21, November 1985. I will not
quote from that.

v-j--

u^r

21
22

It is all

off

activities that I have made

reference to and all of the instructions that I gave from

^df the period roughly, 24 December 1985, forward,Lntil enact-
ment of the current legislation rested on that opinion.

MR. EGGL£STON: ^^^^^^^H let me just say in
response, and this is not intended to get into any sort of
argument with you; but obviously the two Select Committees
have done a somewhat complete investigation, or an investiga-
\jfl^ tion of these various activities* ifhd I just might also point
out that Congress repeatedly through 1985 and 1986, asked
Colonel North, the NSC, on occasion members of the Central
Intelligence Agency, whether or not the law was being complied
with, not just by the CIA, but by members of the NSC staff/
and I can only %#onder whether if the government, if the

1266

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Congrcis had gotten accurate responsas back than tha axtant
of Colonal North's involvement in supporting tha contras
rellitarily, financially, with advice, whether or not you
would b« in this sitpation.

THE WITNESS: Well, as I said, I think at the out-
start — maybe this will be my final remarks — my job
from the time I came into this as chief of the Central
American Task Force was to support the Administration's policy
within the bounds of the legal frame work and it was very
clear to me that those instructions fntailed doing all that I
could within the bounds of legality to preserve the option
of bringing para-nilitary pressure to bear on Nicaragua to
preserve the resistance forces, once mf^rm within the bounds
of legality and to do all I could to support the Administratio
and working to change the frame work and achieve the space
and approval we needed.

I worked to do that within the bounds of legality,
to the best of my ability.

MR. EGGLESTON; Thanks|

Thanks for coming ,down again today.

THE WITNESS: Thank you.
(Whereupon at 10:45 a.m., the deposition concluded.)

RnSTON PUBLIC LIBRARY

illillllil

3 9999 06313 382 9

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